Document:

Exhibit 4.3

   

  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

  AND RESULTS OF OPERATIONS

    

  As used in this management’s discussion and analysis (“MD&A”), unless the context indicates or requires
      otherwise, all references to the “Company”, “Lightspeed”, “we”, “us” or “our” refer to Lightspeed POS Inc. together with our subsidiaries, on a consolidated basis as constituted on March 31, 2020.

   

  This MD&A dated May 21, 2020, for the three months ended March 31, 2020, and 2019 and the years ended
      March 31, 2020 (“Fiscal 2020”) and 2019 (“Fiscal 2019”) should be read in conjunction with the Company’s audited annual consolidated financial statements and the notes related thereto for the years ended March 31, 2020, and 2019, included elsewhere
      in this annual report. This MD&A is presented as of the date of this annual report and is current to that date unless otherwise stated. The financial information presented in this MD&A is derived from the Company’s audited annual consolidated
      financial statements for Fiscal 2020 and Fiscal 2019, 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.

   

  Forward-looking information

   

  This MD&A contains “forward-looking information” and “forward-looking statements” (collectively,
      “forward-looking information”) within the meaning of applicable securities laws. Forward looking information may relate to our financial outlook and anticipated events or results and may include information regarding our financial position, business
      strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or
      opportunities or the markets in which we operate and the impact of the COVID-19 pandemic declared by the World Health Organization on March 11, 2020 (the “COVID-19 Pandemic”) thereon is forward-looking information.

   

  In some cases, forward-looking information can be identified by the use of forward-looking terminology such as
      “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”,
      “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”, the negative of these terms and similar terminology. In
      addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts
      but instead represent management’s expectations, estimates and projections regarding future events or circumstances.

   

  This forward-looking information includes, among other things, statements relating to: expectations regarding
      industry trends; our growth rates and growth strategies; addressable markets for our solutions; the achievement of advances in and expansion of our platforms; expectations regarding our revenue and the revenue generation potential of our
      payment-related and other solutions; our business plans and strategies; and our competitive position in our industry.

   

  This forward-looking information and other forward-looking information is based on our opinions, estimates and
      assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful
      process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of our ability to build our market share and
      enter new markets and industry verticals; our ability to retain key personnel; our ability to maintain and expand geographic scope; our ability to execute on our expansion plans; our ability to continue investing in infrastructure to support our
      growth; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; the changes and trends in our industry or the global economy; and the changes in laws, rules,
      regulations, and global standards are material factors made in preparing forward-looking information and management’s expectations.

   

  Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that we
      considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to
      be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the “Summary of Factors Affecting our Performance” section of this MD&A and in the “Risk Factors”
      section of our Annual Information Form dated May 21, 2020, which is available under our profile on SEDAR at www.sedar.com.

   

  
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  If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying
      the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. The opinions, estimates or assumptions referred to above and described in greater detail
      in “Summary of Factors Affecting our Performance” should be considered carefully by prospective investors.

   

  Although we have attempted to identify important risk factors that could cause actual results to differ
      materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from
      those expressed in such forward- looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No
      forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this MD&A represents
      our expectations as of the date of hereof (or as of the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking
      information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

   

  All of the forward-looking information contained in this MD&A is expressly qualified by the
        foregoing cautionary statements.

   

  This MD&A includes certain trademarks, such as “Lightspeed”, “Flame Design”, “Show & Tell”,
      “Lightspeed Cloud”, “Lightspeed Pro”, “Kounta”, “Gastrofix” and “Pepperkorn”, which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and trade names referred to in this MD&A
      may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names.

   

  Additional information relating to Lightspeed, including our most recently completed Annual Information Form,
      can be found on SEDAR at www.sedar.com.

   

  COVID-19

   

  On March 11, 2020, the World Health Organization declared COVID-19 a pandemic as a result of the rapidly
      spreading corona virus. Subsequently, all of the jurisdictions in which Lightspeed has significant operations imposed increasingly strict measures in an attempt to slow the transmission of the virus, including travel restrictions, self-isolation
      measures, mandatory closures of non-essential services and businesses, and physical distancing practices. Our teams quickly pivoted to helping customers navigate this uncertain time. We focused the majority of our resources on our existing customers
      to help them find government relief programs, to share best practices and to support their adoption of new business strategies by leveraging our omni-channel tools and capabilities. We implemented temporary measures, making our eCommerce platform
      available for free, enlisting partners to help our restaurants leverage a home delivery platform for free, and making Lightspeed Payments available at no-margin pricing to help our customers save money and streamline.

   

  The health and safety of our employees is critically important to us during this time. We quickly enforced a
      work from home policy for our employees around the globe. This was something we were well suited to do given the modern tools we use to run our business and the virtual customer engagement model we already had in place. We have maintained, and are
      committed to maintaining continuity of services to our customers globally, we have implemented several preventative measures to protect the health and safety of our employees, and we continue to refine our work processes to adapt to these
      unprecedented circumstances.

   

  There continues to be uncertainty regarding the duration and magnitude of the COVID-19 Pandemic and the
      possibility of a recurrence, making it impossible to forecast the impact on the Company’s business and operations, both in the short term and in the long term.

   

  Despite the present risks and uncertainties, we believe the impact of COVID-19 will drive even more of our end
      market to move away from legacy systems, and adopt cloud-based solutions and omni-channel strategies as they adjust to changing regulations and consumer behaviours. Lightspeed believes it is well-positioned to capitalize on this opportunity. The
      Company will also continue to leverage its privileged position at the point of sale to seize upon the Lightspeed Payments opportunity.

   

  We are continuing to monitor the impact of COVID-19 on our business, financial condition
      and operations, as further discussed below. Refer to the section of this MD&A entitled “Summary of Factors Affecting Our Performance” for a discussion about the risks associated with seasonality and business continuity.

   

  
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  Overview

   

  Lightspeed provides easy-to-use, omni-channel commerce-enabling SaaS platforms. Our software platforms provide
      our customers with the critical functionality they need to engage with consumers, manage their operations, accept payments, and grow their business. We operate globally in over 100 countries, empowering single- and multi-location small and
      medium-sized businesses (“SMBs”) to compete successfully in an omni-channel market environment by engaging with consumers across online, mobile, social, and physical channels. We believe that our platforms are essential to our customers’ ability to
      run and grow their business. As a result, most of our revenue is recurring and we have a strong track-record of growing revenue per customer over time.

   

  Our cloud platforms are designed around three interrelated elements: front-end consumer experience, back-end
      operations management to improve our customers’ efficiency and insight, and the facilitation of payments. Key functionalities of our platforms include full omni-channel capabilities, point of sale (“POS”), product and menu management, inventory
      management, analytics and reporting, multi-location connectivity, loyalty and customer management. Our position at the point of commerce puts us in a privileged position for payment processing and allows us to collect transaction-related data
      insights. Lightspeed Payments, our payment processing solution, is currently available to North American retail customers and we have begun offering it to U.S. hospitality customers as well. We believe that the broader rollout of Lightspeed Payments
      will further align us with our customers’ success and represents a significant growth opportunity for our Company.

   

  We sell our platform primarily through our direct sales force in North America, Europe and Australia,
      supplemented by indirect channels in other countries around the world. Our platform is well-suited for various types of SMBs, particularly single and multi-location retailers with complex operations, such as those with a high product count, diverse
      inventory needs or a service component, golf course operators and hospitality customers ranging from quick service and festivals to hotels and fine dining establishments. On average, the customers we serve generate Gross Transaction Volume (as
      defined herein) in excess of $600,000 annually, which is reflective of the success of their businesses. Our customers generate monthly ARPU (as defined herein) of approximately $230 per customer ($145 on a customer location basis) in Fiscal 2020 and
      collectively represented 76,500 Customer Locations in approximately 100 countries. With respect to eligible new customers, greater than 60% purchased Lightspeed Payments in conjunction with purchasing their Lightspeed software during the fourth
      quarter of Fiscal 2020. For Fiscal 2020, our cloud-based SaaS platform processed GTV of $22.3 billion, which represents growth of 54% relative to GTV of $14.5 billion processed in Fiscal 2019.

   

  We generate revenue primarily from the sale of cloud-based software subscription licenses and other recurring
      revenue sources including payments solutions for both retail and hospitality segments. We offer pricing plans designed to meet the needs of our current and prospective customers that enable Lightspeed solutions to scale with SMBs as they grow. Our
      subscription plans vary from monthly plans to one-year and multi-year terms, with the majority of our Customer Locations contracted for at least 12 months as of March 31, 2020. In addition, our software is integrated with certain third parties that
      enable electronic payment processing and as part of integrating with these payment processors, we have entered into revenue share agreements with each of them. In the last quarter of Fiscal 2019, we launched Lightspeed Payments, our in-house payment
      processing solution, which provides our customers with full visibility into the final steps of their sale process. Our latest pricing plans, which rolled out in the third quarter of Fiscal 2020, are designed to encourage adoption of Lightspeed
      Payments. With this change we have become more accommodating of monthly payment plans for our customers who also sign up for Lightspeed Payments. In Fiscal 2020, software and payments revenue accounted for 89% of our total revenues compared to 88% in
      Fiscal 2019.

   

  In addition, we offer a variety of hardware and other services to provide value-added support to our merchants
      and supplement our software and payments revenue solutions. These revenues are generally one-time revenues associated with the sale of hardware with which our solutions integrate and the sale of professional services in support of the installation
      and implementation of our solutions. In Fiscal 2020, this revenue accounted for 11% of our total revenues (12% in Fiscal 2019).

   

  We believe we have a distinct leadership position in SMB commerce given our scale, breadth of capabilities,
      and diversity of customers. As a result, our business has grown significantly. Our total revenue has increased to $120.6 million in Fiscal 2020 from $77.5 million in Fiscal 2019, representing year-over-year growth of 56%. No customer represented more
      than 1% of our revenue in Fiscal 2020 or Fiscal 2019 or the three months ended March 31, 2020, and 2019.

   

  Our business is growing rapidly and we plan to continue making investments to drive future growth. We believe
      that our future success depends on a number of factors, including our ability to expand our customer base, add more solutions to our platform increase revenue from existing customers, and our ability to selectively pursue acquisitions. As of March
      31, 2020, approximately 40% of our customers (excluding customers acquired through the iKentoo S.A. (“iKentoo”), Kounta Holdings Pty Ltd (“Kounta”) and Gastrofix GmbH (“Gastrofix”) acquisitions) are paying for more than one Lightspeed product, up
      from approximately 33% a year ago. We view this as an important measure of our ability to grow our ARPU and drive further value to our customers, which in turn will improve retention rates. We achieved positive net dollar retention rates again in
      Fiscal 2020 as a result of expanded ARPU and our customer focused initiatives. We believe that we have significant opportunity to continue to expand ARPU and the number of customers adopting more Lightspeed products over time and that our continued
      investments will increase our revenue base, improve the retention of this base and strengthen our ability to increase sales to our customers.

   

  

  
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  We have not been profitable to date, and if we are unable to successfully implement our growth strategies, we
      may not be able to achieve profitability. In Fiscal 2020 and Fiscal 2019, we incurred an operating loss of $58.4 million and $23.2 million, respectively, and our operating cash outflow was $28.6 million and $7.6 million, respectively.

   

  Key Performance Indicators

   

  We monitor the following key performance indicators to help us evaluate our business, measure our performance,
      identify trends affecting our business, formulate business plans and make strategic decisions. These key performance indicators are also used to provide investors with supplemental measures of our operating performance and thus highlight trends in
      our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use industry metrics in the evaluation of issuers. Our key
      performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.

   

  Average Revenue Per User. “Average Revenue Per User” or “ARPU” represents the total software and payments revenue of the Company in the period divided by the number of unique customers, or by the number of Customer Locations, as the context dictates, of the Company in the period.

   

  Customer Locations. “Customer Location” means a billing
      customer location for which the term of services has not ended, or with which we are negotiating a renewal contract. A single unique customer can have multiple Customer Locations including physical and eCommerce sites. We believe that our ability to
      increase the number of Customer Locations served by our platforms is an indicator of our success in terms of market penetration and growth of our business. We have successfully demonstrated a history of growing both the number of our Customer
      Locations and GTV per Customer Location through the increased use of our platforms. At the end of Fiscal 2020 and Fiscal 2019, approximately 76,500 and over 49,000 Customer Locations were utilizing one of our platforms, respectively.

   

  Gross Transaction Volume. “Gross Transaction Volume” or “GTV” means the total dollar value of transactions processed through our cloud-based SaaS platform in the period, net of refunds, inclusive of shipping and handling, duty and value-added taxes. We believe GTV is an indicator of the
      success of our Customer Locations and the strength of our platform. GTV does not represent revenue earned by us. For Fiscal 2020 and Fiscal 2019, GTV was $22.3 billion and $14.5 billion, respectively.

   

  Net Dollar Retention Rate. We believe that our ability to retain and
      expand the revenue generated from our existing customers is an indicator of the long-term value of our customer relationships. We track our performance in this area by measuring our “Net Dollar Retention Rate”, which is calculated as
      of the end of each month by considering the cohort of customers on our commerce platforms as of the beginning of the month and dividing our subscription and payments revenue attributable to this cohort in the then-current month by total subscription
      and payments revenue attributable to this cohort in the immediately preceding month. For Fiscal 2020, we had Net Dollar Retention Rates in excess of 100% as calculated using an average of the monthly Net Dollar Retention Rates for those periods.

   

  Non-IFRS Measures and Reconciliation of Non-IFRS Measures

   

  The information presented within this MD&A includes certain financial measures such as “Adjusted EBITDA.”
      These measures are not recognized measures under IFRS and do not have a standardized meaning 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 those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis
      of our financial information reported under IFRS. These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when
      relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our 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.

   

  
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  Adjusted EBITDA

   

  Adjusted EBITDA is defined as net loss excluding interest, taxes, depreciation and amortization, or EBITDA, as
      adjusted for stock-based compensation and related expenses, fair value loss on Redeemable Preferred Shares, compensation expenses relating to acquisitions completed, foreign exchange gains and losses and transaction-related expenses. The following
      table reconciles Adjusted EBITDA to net loss for the periods indicated:

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	Three months 

          ended March 31,	 
	(In thousands of US dollars)	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	Net loss	 	 	(53,531	)	 	 	(183,525	)	 	 	(18,597	)	 	 	(96,076	)
	Fair value loss on Redeemable Preferred Shares(1)	 	 	—	 	 	 	191,219	 	 	 	—	 	 	 	132,135	 
	Stock-based compensation and related payroll taxes(2)	 	 	9,930	 	 	 	3,110	 	 	 	2,676	 	 	 	2,043	 
	Depreciation and amortization(3)	 	 	13,467	 	 	 	4,537	 	 	 	5,631	 	 	 	1,064	 
	Foreign exchange loss (gain)(4)	 	 	(395	)	 	 	987	 	 	 	(300	)	 	 	637	 
	Interest income net of interest expense(3)	 	 	(1,766	)	 	 	(181	)	 	 	226	 	 	 	(81	)
	Acquisition-related compensation(5)	 	 	11,087	 	 	 	454	 	 	 	5,138	 	 	 	188	 
	Transaction-related costs(6)	 	 	2,658	 	 	 	1,023	 	 	 	1,159	 	 	 	718	 
	Income tax recovery	 	 	(3,110	)	 	 	(30,729	)	 	 	(2,111	)	 	 	(44,773	)
	Adjusted EBITDA	 	 	(21,660	)	 	 	(13,105	)	 	 	(6,178	)	 	 	(4,145	)

  

   

  		(1)	This loss is with respect to the change in valuation of our Redeemable Preferred Shares from period to period, which is a non-cash item. Prior to the completion of our initial public
            offering on March 15, 2019, all of our Redeemable Preferred Shares were converted and the liability was reduced to $Nil with a corresponding increase in share capital. There will be no further impact on our results of operations from these
            shares.

   

  		(2)	These expenses represent non-cash expenditures recognized in connection with issued stock options and other awards under our stock option plans to our employees and directors as well
            as related payroll taxes given that they are directly attributable to stock-based compensation, are estimates and therefore subject to change. For the three months and fiscal year ended March 31, 2020, the stock-based compensation expense was
            $4,060 and $8,870 respectively (March 31, 2019 - $706 and $1,693) and the related payroll taxes were a recovery of $1,384 and an expense of $1,060 respectively (March 31, 2019 - expense of $1,337 and $1,417).

  

   

  		(3)	In connection with the adoption of IFRS 16 - Leases, on a modified retrospective basis, with no restatement of comparatives, for the three months ended March 31, 2020, net loss
            includes depreciation of $821 related to amortization of right-of-use assets, interest expense of $246 on lease liabilities, and excludes an amount of $954 relating to rent expense ($2,492, $852, and $2,894 respectively for the fiscal year
            ended March 31, 2020). Refer to “Critical Accounting Policies and Estimates” below for more details on the adoption of IFRS 16.

   

  		(4)	These non-cash losses (gains) relate to foreign exchange translation.

   

  		(5)	These costs represent a portion of the consideration paid to acquired businesses that is associated with the ongoing employment obligations for certain key employees of such acquired
            businesses.

   

  		(6)	These expenses relate to professional, legal, consulting and accounting fees relating to our initial public offering, our acquisitions, our secondary offering in August 2019 and our
            bought deal in February 2020 that would otherwise not have been incurred.

   

  Outlook

   

  Given the uncertainty surrounding the duration and magnitude of COVID-19, Lightspeed is declining to provide a
      financial outlook for Fiscal 2021 at this time. Further discussion on the subject is contained in the Company’s press release dated May 21,

  2020 under the heading ‘Financial Outlook’. The press release is available on www.sedar.com.

   

  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 “Risk Factors” section of our most recent Annual
      Information Form, which can be found on SEDAR at www.sedar.com.

   

  
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  Market adoption of our platform

   

  We intend to continue to drive adoption of our commerce-enabling platforms by scaling our solutions to meet
      the needs of both new and existing customers of all types and sizes. We believe that there is significant potential to increase penetration of our total addressable market and attract new customers. We plan to do this by further developing our
      products and services as well as continuing to invest in marketing strategies tailored to attract new businesses to our platforms, both in our existing geographies and new markets around the world. We also intend to selectively evaluate opportunities
      to offer our solutions to businesses operating in industry verticals that we do not currently serve. We plan to continue to invest in our platforms to expand our customer base and drive market adoption and our operating cash flows may fluctuate as we
      make these investments.

   

  Customer adoption of Lightspeed Payments

   

  In January 2019, we released our payment processing solution, Lightspeed Payments, to our U.S. retail
      customers, and we believe that Lightspeed Payments will become an increasingly important part of our business as we make it available to our broader customer base and across multiple geographies. Lightspeed Payments is designed to be transparent and
      easy to understand, and we have priced our solution at market competitive rates based on a percentage of GTV electronically processed through our platforms. As an increasing proportion of our revenue is generated from Lightspeed Payments, we believe
      that while our total revenues may grow significantly, our gross margins will decrease over time due to the lower gross margin profile of our payments revenue stream relative to the higher gross margin profile of our software subscription revenue
      stream. Lightspeed Payments has now begun an initial rollout to the Company’s Canadian retail customers and US hospitality customers.

   

  Cross-selling and up-selling with existing customers

   

  Our existing customers represent a significant opportunity to cross-sell and up-sell products and services
      with limited incremental sales and marketing expense. We use a “land and expand” approach, with many of our customers initially deploying one of our platforms for a specific use case. Once they realize the benefits and wide functionality of our
      platforms, they can expand the number of use cases including services such as Lightspeed Loyalty, Lightspeed Analytics and Lightspeed Payments. We plan to continually invest in product development, and in sales and marketing, to add more solutions to
      our platforms and to increase the usage and awareness of our solutions. Our future revenue growth and our ability to achieve and maintain profitability is dependent upon our ability to maintain existing customer relationships and to continue to
      expand our customers’ use of our comprehensive suite of our solutions.

   

  Scaling our sales and marketing team

   

  Our ability to achieve significant growth in future revenue will largely depend upon the effectiveness of our
      sales and marketing efforts, both domestically and internationally. The majority of our sales and marketing efforts are accomplished in-house, and we believe the strength of our sales and marketing team is critical to our success. We have invested
      and intend to continue to invest meaningfully in terms of expanding our sales force, and consequently, we anticipate that our headcount will continue to increase as a result of these investments.

   

  International sales

   

  We believe that global demand for our platform will continue to increase as SMBs seek out end-to-end solutions
      with omni-channel capabilities to enable their businesses to thrive and succeed in an increasingly complex operating environment. Accordingly, we believe there is a significant opportunity to grow our international business. We have invested, and
      plan to continue to invest, ahead of this potential demand in personnel and marketing, and to make selective acquisitions outside of North America to support our international growth.

   

  Seasonality

   

  We believe our transaction-based revenues will begin to represent an increasing proportion of our overall
      revenue mix over time as a result of the recent introduction of Lightspeed Payments, and we expect seasonality of our quarterly results to increase. While rapid growth in our subscription base and upsells to existing customers has largely mitigated
      seasonal trends in our revenues to date, we expect our transaction-based revenues will become increasingly correlated with respect to the GTV processed by our customers through our platforms.

   

  
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  Foreign currency

   

  Our presentation and functional currency is the U.S. dollar. We derive the largest portion of our revenues in
      U.S. dollars and a smaller proportion of our expenses in U.S. dollars. Our head office and a significant portion of our employees are located in Montréal, Canada, along with additional presence in Europe and Australia, and as such, a significant
      amount of our expenses are incurred in Canadian dollars and Euros with a smaller proportion of expenses incurred in Australian dollars, GBP, and Swiss Francs. As a result, our results of operations will be adversely impacted by a decrease in the
      value of the U.S. dollar relative to these currencies but primarily the Canadian dollar or the Euro. See the “Risk Factors” section of our most recent Annual Information Form, which can be found on SEDAR at www.sedar.com, for a discussion on exchange
      rate fluctuations.

   

  Selective pursuit of acquisitions

   

  We complement our organic growth strategies by taking a targeted and opportunistic approach to acquisitions.
      We identify possible acquisition targets with a view to accelerating our product roadmap, increasing our market penetration and creating value for our shareholders. Throughout our history, we have accrued significant sales and marketing expertise,
      which we leverage to facilitate our continued global expansion both organically and in integrating the companies we acquire.

   

  Our Customer Location count increased to approximately 76,500 locations as at March 31, 2020, including
      Customer Locations added through our acquisition of Gastrofix in January 2020. Our Customer Locations are almost evenly balanced between North America and the rest of world. Additionally, these merchants are well balanced between retail and
      hospitality, representing approximately 55% and 45% of our total Customer Locations respectively. We believe that we remain well-positioned to continue to grow organically around the globe and to selectively pursue new acquisitions given our
      experience and scale. However, such acquisitions and investments could divert management’s attention, result in operating difficulties due to a lack of timely and proper integration, or otherwise disrupt our operations and adversely affect our
      business, operating results or financial position.

   

  COVID-19 Pandemic

   

  The COVID-19 Pandemic, the measures attempting to contain and mitigate the effects of the
      virus, including travel restrictions, self-isolation measures, mandatory closures of non-essential services and businesses, physical distancing practices, and the resulting effect on the operations of and spending by SMBs and on consumer spending
      have disrupted and will continue to disrupt our normal operations and impact our employees, vendors, partners, and our customers and their consumers. We have had to change some our business practices in response to the pandemic and we may be required
      by government authorities to, or determine it appropriate to, take further actions. However, there is no certainty that such measures will be sufficient to mitigate the direct and indirect effects of the virus and its impact on our business,
      financial condition and results of operations. Additionally, the impact of new solutions and initiatives we have launched or will launch in response to the COVID-19 Pandemic on our business, financial condition and results of operations is uncertain
      and we may be subject to additional risks in connection with such solutions and initiatives.

   

  Many of the measures attempting to contain and mitigate the effect of the COVID-19 virus
      were implemented in March 2020, and thus have had a more limited impact on our results for the quarter ended March 31, 2020, and we expect to see more significant impacts in subsequent quarters. The degree to which COVID-19 will affect our business,
      operating results and financial condition will depend on future developments that are highly uncertain and cannot currently be predicted, including the duration and magnitude of the COVID-19 Pandemic, actions taken to contain the virus, the impact of
      the pandemic and related restrictions on economic activity and domestic and international trade, and the extent of the impact of these and other factors on our employees, partners and vendors and our customers and their consumers. The current global
      crisis has impacted and continues to impact our retail and hospitality customers, including their GTV, overall demand for our services, and anticipated churn rates due to business closures and temporary business shutdowns. It may also limit their
      ability to obtain inventory or ingredients and supplies, to generate sales, or to make timely payments to us. As we engage in customer-focused initiatives, such as subscription discounts and deferred payment arrangements, aimed at supporting our
      customers during the COVID-19 Pandemic, this is having and may continue to have a negative impact on revenue and cash flows. As long as social distancing measures persist, we expect this to continue to have a negative impact on our business,
      financial condition and results of operations.

   

  COVID-19 has also caused heightened uncertainty in the global economy. If economic growth
      slows further or if a recession develops, consumers may not have the financial means to make purchases from our customers and may delay or reduce discretionary purchases, negatively impacting our customers (which are SMBs that are more susceptible
      than larger businesses to general economic conditions) and our results of operations. Uncertain and adverse economic conditions may also lead to increased refunds and chargebacks, which could adversely affect our business and may require us to
      recognize an impairment related to our assets in our financial statements.

   

  
    (7)

    
      

  

   

  The COVID-19 Pandemic and related restrictions may also disrupt or delay the ability of
      employees to work because they become sick or are required to care for those who become sick, cause delays or disruptions in services provided by our vendors, increase our vulnerability and that of our partners and service providers to security
      breaches, denial of service attacks or other hacking or phishing attacks, or cause other unpredictable events. Additionally, although we have attempted to identify the COVID-19-related risks faced by our business, the uncertainty and lack of
      predictability around the COVID-19 Pandemic means there may be other risks not presently known to us or that we presently believe are not material that could also affect our business, financial condition and results of operations.

   

  We cannot currently estimate the overall severity, extent or duration of any resulting
      adverse impact on our business, financial condition or results of operations from COVID-19, though the impact may be material. A material adverse effect on our employees, customers, vendors, partners and/or other stakeholders could have a material
      adverse effect on us.

   

  Key Components of Results of Operations

   

  Revenues

   

  Software and payments revenues

   

  We principally generate subscription-based revenues through the sale of subscription licenses to our retail
      and restaurant software solutions and transaction-based revenues. We offer pricing plans designed to meet the needs of our current and prospective customers that enable Lightspeed solutions to scale with SMBs as they grow. Our subscription plans are
      sold as monthly, one-year or multi-year plans, with more than half of our Customer Locations contracted for at least 12 months. Where customers elect to pay their full contract upfront, a deferred revenue balance is created on our balance sheet.
      Subscription plans for our cloud-based solutions include maintenance and support. Customers purchase subscription plans directly from us or through our channel partners.

   

  We also generate transaction-based revenues by providing our customers with the functionality to accept
      payments from consumers. Such revenues come in the form of payment processing fees and transaction fees and represent a percentage of GTV processed by our customers through our offered solutions. We have two sources of transaction-based revenues: our
      proprietary payments processing solution, Lightspeed Payments, and revenue sharing agreements with our integrated payment partners.

   

  Lightspeed Payments allows our customers to accept electronic payments in-store, through connected terminals
      and online. Given its availability was largely limited to U.S. retail customers until we recently began offering it Canadian customers and U.S. hospitality customers, Lightspeed Payments represents only a nominal source of revenue to date. We believe
      it will become an increasingly important part of our business, as it is made available to our broader customer base. Offering a fully integrated payment functionality is highly complementary to the platforms we offer our customers today and will
      allow us to monetize a greater portion of the over $22.3 billion in GTV, which represents approximately 54% growth in total GTV over the past 12 months, processed on our cloud-based SaaS platforms over the last 12 months.

   

  We also continue to support our legacy on-premise retail solution, which is downloaded by the customer and
      installed on the customer’s server. As we transition this small group of customers to our cloud platform, we expect revenue from our on-premise solution to decline.

   

  In addition, we generate revenues through referral fees and revenue sharing agreements from our partners to
      whom we direct business or who sell their applications through our apps and themes marketplace. Pursuant to the terms of our agreements with these partners, these revenues can be recurring or non-recurring.

   

  Hardware and other revenues

   

  These revenues are generally one-time revenues associated with the sale of hardware with which our solutions
      integrate and the sale of professional services in support of the installation and implementation of our solutions. We generate revenues through the sale of POS peripheral hardware such as our customer facing display, receipt printers, cash drawers,
      payment terminals, servers, stands, bar-code scanners, and an assortment of accessories.

   

  Although our software solutions are intended to be turnkey solutions that can be used by the customer as
      delivered, we provide professional services to our hospitality customers in some circumstances in the form of on-site installations and implementations. These implementation services are typically delivered through our internal integrations team or
      through a network of certified partners. Additionally, from time to time we earn one-time fees for integration work performed pursuant to certain strategic partnerships.

   

  

  
     

    (8)

    
      
 

  

   

  Direct Cost of Revenues

   

  Cost of software and payments revenue

   

  Cost of software and payments revenue primarily includes employee expenses for the support team, direct costs
      related to our Lightspeed Payments business and costs associated with hosting infrastructure for our services. Significant expenses include data center capacity costs and other third party direct costs such as cloud infrastructure, including total
      salaries and benefits, stock-based compensation and related expenses, customer support and royalties. We expect that cost of software and payments revenue will increase on an absolute dollar basis and as a percentage of total revenues due to the
      lower gross margin profile of Lightspeed Payments relative to the higher gross margin profile of our software subscription revenue stream.

   

  Cost of hardware and other revenue

   

  Cost of these revenues primarily includes costs associated with our hardware solutions, such as the cost of
      acquiring the hardware inventory, including hardware purchase price, expenses associated with a third-party fulfillment company, shipping and handling and inventory adjustments, as well as expenses related to costs of implementation services provided
      to customers.

   

  Operating Expenses

   

  General and administrative

   

  General and administrative expenses comprise employee expenses, including stock-based compensation and related
      expenses, for finance, accounting, legal, administrative, human resources, information technology as well as payment operations. These costs also include other professional fees, transaction-related fees related to the Company’s acquisitions, costs
      associated with internal systems and general corporate expenses. We expect that general and administrative expenses will increase on an absolute dollar basis as we incur the costs of compliance associated with being a public company, including
      increased accounting and legal expenses. In the longer term, however, we expect general and administrative expenses to decrease as a percentage of total revenues as we focus on processes, systems and controls to enable our internal support functions
      to scale with the growth of our business.

   

  Research and development

   

  Research and development expenses consist primarily of employee expenses, including stock-based compensation
      and related expenses, for product-related expenses including product management, core development, data, product design and development and other corporate overhead allocations. We continue to invest our research and development efforts on developing
      added features and solutions, as well as increasing the functionality and enhancing the ease of use of our platforms. Historically, these expenses have been reduced primarily by the Canadian Federal Scientific Research and Experimental Development
      Program and Tax Credit for the Development of e-business, or “SR&ED” and “e-business” tax credits respectively. As a public company, we are no longer eligible for federal refundable SR&ED tax credits, while e-business tax credits remain
      available. However, we remain eligible for non-refundable SR&ED credits under this program, which are eligible to reduce future income taxes payable. Given the Company’s recent losses in Canada, these credits have not been recognized. Upon
      recognition, they will reduce research and development expenses. Although not immediately, given that we are still scaling our technology group in line with anticipated growth, we expect research and development expenses to decline in proportion to
      total revenue as we achieve additional economies of scale from our expansion.

   

  Sales and marketing

   

  Sales and marketing expenses consist primarily of selling and marketing costs and employee expenses, including
      stock-based compensation and related expenses, for sales and business development, marketing as well as a small portion of onboarding for new customers. Other costs within sales and marketing include costs of acquisition of new customers,
      travel-related expenses and corporate overhead allocations. We plan to continue to expand sales and marketing efforts to attract new customers, retain existing customers and increase revenues from both new and existing customers. Over time, we expect
      sales and marketing expenses will decline as a percentage of total revenues as we achieve additional economies of scale from our expansion.

   

  
    (9)

    
      

  

   

  Acquisition-related compensation

   

  Acquisition-related compensation expenses represent the portion of the purchase price from acquisitions which
      is payable contingent upon ongoing employment obligations of certain key employees of the acquired businesses. This portion of the cost is amortized over the related service period for those key employees.

   

  Other Expenses

   

  Fair value loss on Redeemable Preferred Shares

   

  These costs include costs with respect to the change in valuation of the Redeemable Preferred Shares from
      period to period. Immediately prior to the completion of the initial public offering of our shares on the Toronto Stock Exchange in March 2019, all of our Redeemable Preferred Shares were converted and the liability was reduced to $Nil with a
      corresponding increase in share capital. Following their conversion, the Redeemable Preferred Shares ceased to impact our results of operations.

   

  
    (10)

    
      

  

   

  Results of Operations

   

  The following table outlines our consolidated statements of loss for Fiscal 2020 and Fiscal 2019, and for the
      three months ended March 31, 2020, and 2019:

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	Three months 

          ended March 31,	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except per share data)	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	106,871	 	 	 	68,489	 	 	 	31,784	 	 	 	18,648	 
	Hardware and other	 	 	13,766	 	 	 	8,962	 	 	 	4,487	 	 	 	2,637	 
	 	 	 	120,637	 	 	 	77,451	 	 	 	36,271	 	 	 	21,285	 
	Direct cost of revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	31,982	 	 	 	15,752	 	 	 	9,968	 	 	 	4,604	 
	Hardware and other	 	 	11,217	 	 	 	7,821	 	 	 	3,627	 	 	 	2,358	 
	 	 	 	43,199	 	 	 	23,573	 	 	 	13,595	 	 	 	6,962	 
	Gross profit	 	 	77,438	 	 	 	53,878	 	 	 	22,676	 	 	 	14,323	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	General and administrative	 	 	24,486	 	 	 	13,790	 	 	 	7,350	 	 	 	4,793	 
	Research and development	 	 	31,812	 	 	 	18,283	 	 	 	10,100	 	 	 	5,074	 
	Sales and marketing	 	 	55,388	 	 	 	39,043	 	 	 	15,239	 	 	 	11,362	 
	Depreciation of property and equipment	 	 	1,749	 	 	 	1,389	 	 	 	550	 	 	 	415	 
	Depreciation of right-of-use assets	 	 	2,492	 	 	 	—	 	 	 	821	 	 	 	—	 
	Foreign exchange loss (gain)	 	 	(395	)	 	 	987	 	 	 	(300	)	 	 	637	 
	Acquisition-related compensation	 	 	11,087	 	 	 	454	 	 	 	5,138	 	 	 	188	 
	Amortization of intangible assets	 	 	9,226	 	 	 	3,148	 	 	 	4,260	 	 	 	649	 
	Total operating expenses	 	 	135,845	 	 	 	77,094	 	 	 	43,158	 	 	 	23,118	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating loss	 	 	(58,407	)	 	 	(23,216	)	 	 	(20,482	)	 	 	(8,795	)
	Fair value loss on Redeemable Preferred Shares	 	 	—	 	 	 	(191,219	)	 	 	—	 	 	 	(132,135	)
	Interest income net of interest expense	 	 	1,766	 	 	 	181	 	 	 	(226	)	 	 	81	 
	Loss before income taxes	 	 	(56,641	)	 	 	(214,254	)	 	 	(20,708	)	 	 	(140,849	)
	Income tax expense (recovery)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	 	49	 	 	 	59	 	 	 	(46	)	 	 	64	 
	Deferred	 	 	(3,159	)	 	 	(30,788	)	 	 	(2,065	)	 	 	(44,837	)
	Total income tax expense (recovery)	 	 	(3,110	)	 	 	(30,729	)	 	 	(2,111	)	 	 	(44,773	)
	Net loss	 	 	(53,531	)	 	 	(183,525	)	 	 	(18,597	)	 	 	(96,076	)
	Loss per share – basic and diluted	 	 	(0.62	)	 	 	(5.53	)	 	 	(0.21	)	 	 	(2.21	)

   

  
    (11)

    
      

  

   

  The following table outlines stock-based compensation and the related payroll taxes associated with these
      expenses included in the results of operations for Fiscal 2020 and Fiscal 2019 and the three months ended March 31, 2020, and 2019:

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	Three months 

          ended March 31,	 
	(In thousands of US dollars)	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	Direct cost of revenues	 	 	731	 	 	 	260	 	 	 	170	 	 	 	151	 
	General and administrative	 	 	3,196	 	 	 	1,030	 	 	 	606	 	 	 	647	 
	Research and development	 	 	3,101	 	 	 	245	 	 	 	1,400	 	 	 	350	 
	Sales and marketing	 	 	2,902	 	 	 	1,575	 	 	 	500	 	 	 	895	 
	Total stock-based compensation	 	 	9,930	 	 	 	3,110	 	 	 	2,676	 	 	 	2,043	 

  

    

  For the three months and fiscal year ended March 31, 2020, the stock-based compensation expense was $4,060 and
      $8,870 respectively (March 31, 2019 - $706 and $1,693) and the related payroll taxes were a recovery of $1,384 and an expense of $1,060 respectively (March 31, 2019 - expense of $1,337 and $1,417).

   

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

   

  Revenues

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	31,784	 	 	 	18,648	 	 	 	13,136	 	 	 	70.4	 
	Hardware and other	 	 	4,487	 	 	 	2,637	 	 	 	1,850	 	 	 	70.2	 
	Total revenues	 	 	36,271	 	 	 	21,285	 	 	 	14,986	 	 	 	70.4	 
	Percentage of total revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	87.6	%	 	 	87.6	%	 	 	 	 	 	 	 	 
	Hardware and other	 	 	12.4	%	 	 	12.4	%	 	 	 	 	 	 	 	 
	Total	 	 	100	%	 	 	100	%	 	 	 	 	 	 	 	 

   

  Software and Payments Revenue

   

  Software and payments revenue for the three months ended March 31, 2020 increased by $13.1 million or 70% as
      compared to the three months ended March 31, 2019. The increase was primarily due to growth in our subscription customer base including customers from the acquisitions of iKentoo, Kounta , as well as Gastrofix, which combined accounted for $5.1
      million of software and payments revenue in the quarter. Also contributing to the increase were higher payments revenue from continued adoption of Lightspeed Payments and payment referral fees earned through our partners. GTV processed through our
      platforms grew from $3.5 billion for the three months ended March 31, 2019 to $6.1 billion for the three months ended March 31, 2020, evidencing increased use of our platforms. Customers adopting additional modules of our platforms also contributed
      to the increase in subscription license revenue in the period.

   

  Hardware & Other Revenue

   

  Hardware and other revenue for the three months ended March 31, 2020 increased by $1.9 million or 70% as
      compared to the three months ended March 31, 2019 due to the increase in sales of our hardware to new customers during the period as well as to the revenue contributions of iKentoo, Kounta, and Gastrofix in the quarter.

   

  
    (12)

    
      

  

   

  Direct Cost of Revenues

    

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Direct cost of revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	9,968	 	 	 	4,604	 	 	 	5,364	 	 	 	116.5	 
	Hardware and other	 	 	3,627	 	 	 	2,358	 	 	 	1,269	 	 	 	53.8	 
	Total costs of revenues	 	 	13,595	 	 	 	6,962	 	 	 	6,633	 	 	 	95.3	 
	Percentage of revenue	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	31.4	%	 	 	24.7	%	 	 	 	 	 	 	 	 
	Hardware and other	 	 	80.8	%	 	 	89.4	%	 	 	 	 	 	 	 	 
	Total	 	 	37.5	%	 	 	32.7	%	 	 	 	 	 	 	 	 

   

  Direct Cost of Software and Payments Revenue

   

  Direct cost of software and payments revenue for the three months ended March 31, 2020 increased by $5.4
      million or 117% as compared to the three months ended March 31, 2019. The increase was primarily due to increased costs associated with supporting a greater number of Customer Locations utilizing our platform, as well as an increase in our Lightspeed
      Payments customers which carry higher direct costs than our subscription business. Overall, direct cost of software and payments revenue as a percentage of revenue increased from 25% to 31% for the three months ended March 31, 2020 as compared to the
      three months ended March 31, 2019.

   

  Direct Cost of Hardware and Other Revenue

   

  Direct cost of hardware and other revenue for the three months ended March 31, 2020 increased by $1.3 million
      or 54% as compared to the three months ended March 31, 2019. The increase was primarily due to an increase in sales of our hardware to new customers during the period.

   

  Gross Profit

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Gross profit	 	 	22,676	 	 	 	14,323	 	 	 	8,353	 	 	 	58.3	 
	Percentage of total revenues	 	 	62.5	%	 	 	67.3	%	 	 	 	 	 	 	 	 

  

    

  Gross profit for the three months ended March 31, 2020 increased by $8.4 million or 58% compared to the three
      months ended March 31, 2019. The increase was primarily due to growth in our software and payments revenue as a result of increased Customer Locations using our platform and increased GTV processed through our platforms. A higher mix of Lightspeed
      Payments revenue in the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 reduced gross profit as a percentage of revenue.

   

  
    (13)

    
      

  

   

  Operating Expenses

   

  General and Administrative

    

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	General and administrative	 	 	7,350	 	 	 	4,793	 	 	 	2,557	 	 	 	53.3	 
	Percentage of total revenues	 	 	20.3	%	 	 	22.5	%	 	 	 	 	 	 	 	 

  

   

  General and administrative expenses for the three months ended March 31, 2020 increased by $2.6 million
      compared to the three months ended March 31, 2019. Included in general and administrative expense for the three months ended March 31, 2020 is $0.6 million of stock-based compensation expense compared to $0.6 million for the three months ended March
      31, 2019. The overall increase was primarily due to growth in our headcount of $1.9 million, including $1.1 million of costs arising from the acquisition of iKentoo, Kounta, and Gastrofix. In addition, $1.2 million was due to the increase in the
      provision for bad debt given the estimated impact of the COVID-19 Pandemic, and $0.2 million was due to an increase in professional fees in connection with costs of being public, offset by an adjustment of $0.8 million related to the new lease
      standard implementation in this fiscal year. Our general and administrative expenses as a percentage of revenue decreased to 20% from 23% between the three months ended March 31, 2020 and the three months ended March 31, 2019.

   

  Research and Development

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Research and development	 	 	10,100	 	 	 	5,074	 	 	 	5,026	 	 	 	99.1	 
	Percentage of total revenues	 	 	27.8	%	 	 	23.8	%	 	 	 	 	 	 	 	 

  

    

  Research and development expenses for the three months ended March 31, 2020 increased by $5.0 million or 99%
      compared to the three months ended March 31, 2019. Included in research and development expense for the three months ended March 31, 2020 is $1.4 million of stock-based compensation expense compared to $0.4 million for the three months ended March
      31, 2019. The overall increase was due primarily to additional salary and employee-related costs due to increased headcount in our research and development teams, $2.5 million of which arose from salaries and benefits of employees of companies
      acquired in the fiscal year as well as a $1.0 million increase in stock-based compensation and related benefits. Our research and development costs as a percentage of revenue increased from 24% to 28% from the three months ended March 31, 2019 to the
      three months ended March 31, 2020.

   

  Sales and Marketing

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Sales and marketing	 	 	15,239	 	 	 	11,362	 	 	 	3,877	 	 	 	34.1	 
	Percentage of total revenues	 	 	42.0	%	 	 	53.4	%	 	 	 	 	 	 	 	 

  

  

  

   

  
    (14)

    
      

  

   

  

  Sales and marketing expenses for the three months ended March 31, 2020 increased by $3.9 million or 34% as
      compared to the three months ended March 31, 2019. Included in sales and marketing expense for the three months ended March 31, 2020 is $0.5 million of stock-based compensation expense compared to $0.9 for the three months ended March 31, 2019. The
      increase was mainly due to added personnel tied to our continued growth in revenue. Approximately $2.0 million of the additional expenses related to salaries and other employee costs, including incremental employee costs pursuant to our recent
      acquisitions of Chronogolf, iKentoo, Kounta, and Gastrofix. An additional $1.9 million in costs were incurred for the increase of conferences and training for our marketing teams, and advertising, acquisition and growth spend including payments made
      to our distribution partners as reseller commissions. Sales and marketing costs as a percentage of revenue decreased from 53% to 42% from the three months ended March 31, 2019 to the three months ended March 31, 2020.

   

  Depreciation

    

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Depreciation of property and equipment	 	 	550	 	 	 	415	 	 	 	135	 	 	 	32.5	 
	Depreciation of right-of-use assets	 	 	821	 	 	 	—	 	 	 	821	 	 	 	100	 
	 	 	 	1,371	 	 	 	415	 	 	 	956	 	 	 	230.4	 
	Percentage of total revenues	 	 	3.8	%	 	 	1.9	%	 	 	 	 	 	 	 	 

  

    

  Depreciation of property and equipment expenses for the three months ended March 31, 2020 increased by $0.1
      million as compared to the three months ended March 31, 2019. The marginal increase in the depreciation expense resulted from additions to property and equipment made throughout Fiscal 2020. The depreciation of right-of-use assets of $0.8 million
      represents the depreciation of leases that were capitalized as a result of the adoption of IFRS 16.

   

  Foreign Exchange Loss (Gain)

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Foreign exchange loss (gain)	 	 	(300	)	 	 	637	 	 	 	(937	)	 	 	(147.1	)
	Percentage of total revenues	 	 	(0.8	)%	 	 	3.0	%	 	 	 	 	 	 	 	 

  

   

  Foreign exchange gain for the three months ended March 31, 2020 was $0.3 million as compared to the foreign
      exchange loss for the three months ended March 31, 2019 of $0.6 million. This was due to the strengthening of the Canadian dollar given that subsequent to our initial public offering, a significant portion of the Company’s cash was held in Canadian
      dollars before being converted into U.S. dollars. Items included in our results are measured in the functional currency of the Company (U.S. dollars), and foreign currency transactions are translated into the functional currency using the exchange
      rates prevailing at the date of the transactions or when items are re-measured with resulting gains and losses subsequently recognized.

   

  Acquisition-related Compensation

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Acquisition-related compensation	 	 	5,138	 	 	 	188	 	 	 	4,950	 	 	 	2,633.0	 
	Percentage of total revenues	 	 	14.2	%	 	 	0.9	%	 	 	 	 	 	 	 	 

  

   

  

  
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  Acquisition-related compensation expenses for the three months ended March 31, 2020 increased by $5.0 million
      as compared to the three months ended March 31, 2019. The increase was due to our acquisitions of Chronogolf in May 2019, iKentoo in July 2019, Kounta in November 2019 and Gastrofix in January 2020. We issued contingent cash and equity instruments,
      some of which were tied to ongoing employment obligations in connection with these acquisitions. The contingent amounts that were not included in the total purchase consideration were treated as an acquisition-related compensation expense for post
      combination services to be received over a one to two-year period starting on the date of acquisition.

   

  Amortization of Intangible Assets

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Amortization of intangible assets	 	 	4,260	 	 	 	649	 	 	 	3,611	 	 	 	556.4	 
	Percentage of total revenues	 	 	11.7	%	 	 	3.0	%	 	 	 	 	 	 	 	 

  

    

  Amortization of intangible assets for the three months ended March 31, 2020 increased by $3.6 million as
      compared to the three months ended March 31, 2019. The increase in amortization relates to intangibles acquired through the Chronogolf, iKentoo, Kounta and Gastrofix acquisitions during Fiscal 2020 of $4.1 million, which was offset by a decrease in
      amortization from intangibles that were fully amortized during Fiscal 2019 of $0.5 million.

   

  Other Income (Expense)

   

  

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Fair value loss on Redeemable Preferred Shares	 	 	—	 	 	 	(132,135	)	 	 	132,135	 	 	 	100	 
	Interest income net of interest expense	 	 	(226	)	 	 	81	 	 	 	(307	)	 	 	(379	)
	Total other income (expense)	 	 	(226	)	 	 	(132,054	)	 	 	 	 	 	 	 	 
	Percentage of total revenues	 	 	(0.6	)%	 	 	(620.4	)%	 	 	 	 	 	 	 	 

  

    

  Other income (expense) includes losses on the Redeemable Preferred Shares that are
      measured at fair value, and interest income net of interest expense.

   

  Fair value loss on Redeemable Preferred Shares for the three months ended March 31, 2020 decreased to $0 from
      $132 million in the three months ended March 31, 2019. Upon the Company’s initial public offering in March 2019, all the Redeemable Preferred Shares converted to Common Shares and as a result, there will be no further impact on our results of
      operations from these shares.

   

  Interest expense relates to the interest arising from the loan draw-down made in
      connection with the acquisition of Gastrofix in January 2020, as well as interest expense on the lease liabilities and acquisition-related compensation offset by interest income earned in the period on cash and cash equivalents.

   

  
    (16)

    
      

  

   

  Income Taxes

    

  	 	 	Three months 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Income tax expense (recovery)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	 	(46	)	 	 	64	 	 	 	(110	)	 	 	(171.9	)
	Deferred	 	 	(2,065	)	 	 	(44,837	)	 	 	42,772	 	 	 	95.4	 
	Total income tax expense (recovery)	 	 	(2,111	)	 	 	(44,773	)	 	 	42,662	 	 	 	95.3	 
	Percentage of total revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	 	(0.1	)%	 	 	0.3	%	 	 	 	 	 	 	 	 
	Deferred	 	 	(5.7	)%	 	 	(210.7	)%	 	 	 	 	 	 	 	 
	Total costs of revenues	 	 	(5.8	)%	 	 	(210.4	)%	 	 	 	 	 	 	 	 

    

  Deferred income tax recovery for the three months ended March 31, 2020 decreased by $42.8 million or 95% as
      compared to the three months ended March 31, 2019. The decrease was primarily due to the reversal of the balance of the Part VI.I tax that occurred in Fiscal 2019 given the conversion of the Redeemable Preferred Shares upon the initial public
      offering.

   

  Results of Operations for the Fiscal Years Ended March 31, 2020, and 2019

   

  Revenues

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	106,871	 	 	 	68,489	 	 	 	38,382	 	 	 	56.0	 
	Hardware and other	 	 	13,766	 	 	 	8,962	 	 	 	4,804	 	 	 	53.6	 
	Total revenues	 	 	120,637	 	 	 	77,451	 	 	 	43,186	 	 	 	55.8	 
	Percentage of total revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	88.6	%	 	 	88.4	%	 	 	 	 	 	 	 	 
	Hardware and other	 	 	11.4	%	 	 	11.6	%	 	 	 	 	 	 	 	 
	Total	 	 	100	%	 	 	100	%	 	 	 	 	 	 	 	 

  

   

  Software and Payments Revenue

   

  Software and payments revenue for Fiscal 2020 increased by $38.4 million or 56% as compared to Fiscal 2019.
      The increase was primarily due to growth in our subscription customer base including customers from the acquisitions of iKentoo, Kounta as well as Gastrofix which combined accounted for $8.7 million of software and payments revenue for the year ended
      March 31, 2020. Also contributing to the increase were higher payments revenue from continued adoption of Lightspeed Payments and payment referral fees earned through our partners. The number of new Customer Locations using our platforms increased
      from approximately 49,000 Customer Locations as at March 31, 2019, to approximately 76,500 Customer Locations as at March 31, 2020. Additionally, the GTV processed through our platforms grew from $14.5 billion in Fiscal 2019 to $22.3 billion in
      Fiscal 2020 evidencing the increased use of our platform.

   

  
    (17)

    
      

  

   

  Hardware and Other Revenue

   

  Hardware and other revenue for Fiscal 2020 increased by $4.8 million or 54% as compared to Fiscal 2019
      primarily due to the increase in sales of our hardware to new customers during the period, the revenue contribution of iKentoo, Kounta and Gastrofix in the fiscal year, as well as the contribution of some one-time revenue from certain strategic
      partnerships.

   

  Direct Cost of Revenues

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Direct cost of revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	31,982	 	 	 	15,752	 	 	 	16,230	 	 	 	103.0	 
	Hardware and other	 	 	11,217	 	 	 	7,821	 	 	 	3,396	 	 	 	43.4	 
	Total costs of revenues	 	 	43,199	 	 	 	23,573	 	 	 	19,626	 	 	 	83.3	 
	Percentage of total revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Software and payments	 	 	29.9	%	 	 	23.0	%	 	 	 	 	 	 	 	 
	Hardware and other	 	 	81.5	%	 	 	87.3	%	 	 	 	 	 	 	 	 
	Total	 	 	35.8	%	 	 	30.4	%	 	 	 	 	 	 	 	 

  

    

  Direct Cost of Software and Payments Revenue

   

  Direct cost of revenues for software and payments revenue for Fiscal 2020 increased by $16.2 million or 103%
      as compared to Fiscal 2019. The increase was primarily due to increased costs associated with supporting a greater number of Customer Locations utilizing our platforms, an increase in our Lightspeed Payments customers which carry higher direct costs
      than our subscription business, a $5.6 million increase in support costs over the prior year and a $1.6 million increase in infrastructure costs to support a larger customer base. As a result of the above, direct cost of software and payments revenue
      as a percentage of revenue increased from 23% to 30% from Fiscal 2019 to Fiscal 2020.

   

  Direct Cost of Hardware and Other Revenue

   

  Direct cost of hardware and other revenue for Fiscal 2020 increased by $3.4 million or 43% as compared to
      Fiscal 2019. The increase was primarily due to an increase in hardware sold as we expanded our customer base, although the decrease as a percentage of revenue was a result of the contribution of some one-time revenue from certain strategic
      partnerships.

   

  Gross Profit

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Gross profit	 	 	77,438	 	 	 	53,878	 	 	 	23,560	 	 	 	43.7	 
	Percentage of total revenues	 	 	64.2	%	 	 	69.6	%	 	 	 	 	 	 	 	 

  

   

  Gross profit for Fiscal 2020 increased by $23.6 million compared to Fiscal 2019. The increase was primarily
      due to growth in our software and payments revenue as a result of increased Customer Locations using our platform and increased GTV processed through our platforms. Increased adoption of Lightspeed Payments reduced gross profit as a percentage of
      revenue.

   

  
    (18)

    
      

  

  Operating Expenses

   

  General and Administrative

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	General and administrative	 	 	24,486	 	 	 	13,790	 	 	 	10,696	 	 	 	77.6	 
	Percentage of total revenues	 	 	20.3	%	 	 	17.8	%	 	 	 	 	 	 	 	 

  

   

  General and administrative expenses for Fiscal 2020 increased by $10.7 million, or 78%, as compared to Fiscal
      2019. Included in general and administrative expense for Fiscal 2020 was $3.2 million of stock-based compensation expense compared to $1.0 million in Fiscal 2019. The overall increase was due to $2.2 million in higher stock-based compensation and
      related payroll tax costs as compared to the prior year, and $2.6 million related to an increase in professional fees incurred as a result of acquisitions made in Fiscal 2020, fees related to our secondary offering and bought deal, as well as certain
      professional costs related to being a public company. In addition, an increase of $0.9 million was due to the increase in the provision for bad debt incorporating the estimated impact of the COVID-19 Pandemic. The remainder of the increase of $7.6
      million was due to higher salary costs and other employee related costs such as software licenses as we continued to scale our back-office operations with additional headcount in our finance, human resources, information technology, and internal
      systems departments. These increased costs were offset by an adjustment of $2.6 million related to the new lease standard implementation in this fiscal year. As a result of the above, our general and administrative expenses as a percentage of revenue
      increased to 20% from 18% between Fiscal 2020 and Fiscal 2019.

   

  Research and Development

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Research and development	 	 	31,812	 	 	 	18,283	 	 	 	13,529	 	 	 	74.0	 
	Percentage of total revenues	 	 	26.4	%	 	 	23.6	%	 	 	 	 	 	 	 	 

  

    

  Research and development expenses for Fiscal 2020 increased by $13.5 million, or 74%, as compared to Fiscal
      2019. Included in research and development costs for Fiscal 2020 were $3.1 million of stock-based compensation expense and $0.2 million in Fiscal 2019. The overall increase was due primarily to additional salary and other employee costs resulting
      from increased headcount in our research and development teams including a $2.9 million increase in stock-based compensation and related payroll taxes as well as $5.4 million of incremental expenses assumed as part of our acquisitions of Chronogolf,
      iKentoo, Kounta and Gastrofix. Our research and development costs as a percentage of revenue increased to 26% in Fiscal 2020 from approximately 24% in Fiscal 2019.

   

  Sales and Marketing

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Sales and marketing	 	 	55,388	 	 	 	39,043	 	 	 	16,345	 	 	 	41.9	 
	Percentage of total revenues	 	 	45.9	%	 	 	50.4	%	 	 	 	 	 	 	 	 

  

    

  
    (19)

    
      

  

   

  Sales and marketing expenses for Fiscal 2020 increased by $16.3 million or 42% as compared to Fiscal 2019.
      Included in sales and marketing expense for Fiscal 2020 was $2.9 million of stock-based compensation expense and $1.6 million in Fiscal 2019. The overall increase was primarily due to the addition of personnel to facilitate our growth with
      approximately $9.1 million of the additional expenses related to salaries and other employee costs, $1.3 million of which related to stock-based compensation and related benefits and $5.4 million of which related to incremental employee expenses
      pursuant to our recent acquisitions of Chronogolf, iKentoo, Kounta and Gastrofix. An additional $7.2 million in costs were incurred for other growth focused investments in sales and marketing specifically in advertising, acquisition and growth spend
      including payments made to our distribution partners as reseller commissions. As a result of the scaling and efficiencies realized as our customer base continued to expand, our sales and marketing expenses as a percentage of revenue decreased from
      50% to 46% from Fiscal 2019 to Fiscal

  2020.

   

  Depreciation

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Depreciation of property and equipment	 	 	1,749	 	 	 	1,389	 	 	 	360	 	 	 	25.9	 
	Depreciation of right-of-use assets	 	 	2,492	 	 	 	—	 	 	 	2,492	 	 	 	100	 
	 	 	 	4,241	 	 	 	1,389	 	 	 	2,852	 	 	 	205.3	 
	Percentage of total revenues	 	 	3.5	%	 	 	1.8	%	 	 	 	 	 	 	 	 

  

     

  Depreciation of property and equipment expenses for Fiscal 2020 increased by $0.4 million, or 26% as compared
      to Fiscal 2019. The increase in the depreciation expense results from additions to property and equipment made throughout Fiscal 2019. The depreciation of right-of-use assets represents the depreciation of leases that were capitalized as a result of
      the adoption of IFRS

  16.

   

  Foreign Exchange Loss (Gain)

    

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Foreign exchange loss (gain)	 	 	(395	)	 	 	987	 	 	 	(1,382	)	 	 	(140.0	)
	Percentage of total revenues	 	 	(0.3	)%	 	 	1.3	%	 	 	 	 	 	 	 	 

  

    

  Foreign exchange gain for Fiscal 2020 was $0.4 million as compared to a loss of $1.0 million for Fiscal 2019.
      This was due to the strengthening of the Canadian dollar given that subsequent to our initial public offering, a significant portion of the Company’s cash was held in Canadian dollars before being converted into U.S. dollars. Items included in our
      results are measured in the functional currency, which is the U.S. dollar, and foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions or when items are re-measured
      with resulting gains and losses subsequently recognized.

   

  
    (20)

    
      

  

   

  Acquisition-related Compensation

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Acquisition-related compensation	 	 	11,087	 	 	 	454	 	 	 	10,633	 	 	 	2,342.1	 
	Percentage of total revenues	 	 	9.2	%	 	 	0.6	%	 	 	 	 	 	 	 	 

  

   

  Acquisition-related compensation expenses for Fiscal 2020 increased by $10.6 million or 2,342% as compared to
      Fiscal 2019. The increase was due to our acquisitions of Chronogolf in May 2019, iKentoo in July 2019, Kounta in November 2019 and Gastrofix in January 2020. We issued contingent cash and equity instruments, some of which were tied to ongoing
      employment obligations in connection with these acquisitions. The contingent amounts that were not included in the total purchase consideration were treated as an acquisition-related compensation expense for post combination services to be received
      over a one to two-year period starting on the date of acquisition.

   

  Amortization of Intangible Assets

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Acquisition-related compensation	 	 	9,226	 	 	 	3,148	 	 	 	6,078	 	 	 	193.1	 
	Percentage of total revenues	 	 	7.6	%	 	 	4.1	%	 	 	 	 	 	 	 	 

  

   

  Amortization of intangible assets for Fiscal 2020 decreased by $6.1 million or 193% as compared to Fiscal
      2019. The increase in amortization relates to intangibles acquired through the Chronogolf, iKentoo, Kounta and Gastrofix acquisitions of $7.9 million during Fiscal 2020 which was offset by a decrease in amortization from intangibles that were fully
      amortized during Fiscal 2019 and Q1 of Fiscal 2020 of $1.9 million.

   

  Other income (Expense)

    

  

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Fair value loss on Redeemable Preferred Shares	 	 	—	 	 	 	(191,219	)	 	 	191,219	 	 	 	100	 
	Interest income net of interest expense	 	 	1,766	 	 	 	181	 	 	 	1,585	 	 	 	876	 
	Total other income (expense)	 	 	1,766	 	 	 	(191,038	)	 	 	 	 	 	 	 	 
	Percentage of total revenues	 	 	1.5	%	 	 	(246.7	)%	 	 	 	 	 	 	 	 

  

   

  Fair value loss on Redeemable Preferred Shares for Fiscal 2020 decreased to $0 from $191.2 million in Fiscal
      2019. Upon the Company’s initial public offering in March 2019, all the Redeemable Preferred Shares converted to Common Shares and as a result, there will be no further impact on our results of operations from these shares.

   

  Interest expense relates to the interest arising from the loan draw-down made in connection with the
      acquisition of Gastrofix in January 2020, as well as interest expense on the lease liability and acquisition-related compensation offset by interest income earned in the period on cash and cash equivalents.

   

  
    (21)

    
      

  

   

  Income Taxes

    

  	 	 	Fiscal year 

          ended March 31,	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	 	 	 	 	 	 	 	 	 	 	 
	except percentages)	 	2020	 	 	2019	 	 	Change	 	 	Change	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	%	 
	Income tax expense (recovery)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	 	49	 	 	 	59	 	 	 	(10	)	 	 	(16.9	)
	Deferred	 	 	(3,159	)	 	 	(30,788	)	 	 	27,629	 	 	 	(89.7	)
	Total income tax expense (recovery)	 	 	(3,110	)	 	 	(30,729	)	 	 	27,619	 	 	 	(89.9	)
	Percentage of total revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	 	0.0	%	 	 	0.1	%	 	 	 	 	 	 	 	 
	Deferred	 	 	(2.6	)%	 	 	(39.8	)%	 	 	 	 	 	 	 	 
	Total	 	 	(2.6	)%	 	 	(39.7	)%	 	 	 	 	 	 	 	 

    

  Deferred income tax expense (recovery) for Fiscal 2020 decreased by $27.6 million or 90% as compared to Fiscal
      2019. The decrease was primarily due to the reversal of the balance of the Part VI.I tax that occurred in Fiscal 2019 given the conversion of the Redeemable Preferred Shares upon the initial public offering.

   

  Selected Annual Information

    

  	 	 	Fiscal year ended March 31,	 
	(In thousands of US dollars	 	2020	 	 	2019	 	 	2018	 
	 	 	 	$	 	 	 	$	 	 	 	$	 
	Total revenues	 	 	120,637	 	 	 	77,451	 	 	 	57,079	 
	Net loss	 	 	(53,531	)	 	 	(183,525	)	 	 	(96,179	)
	Loss per share – basic and diluted	 	 	(0.62	)	 	 	(5.53	)	 	 	(3.30	)
	Total assets	 	 	478,428	 	 	 	255,811	 	 	 	64,025	 
	Total long-term liabilities	 	 	63,481	 	 	 	10,510	 	 	 	295,278	 

   

  See “Results of Operations” in this MD&A for a more detailed discussion of the year-over-year changes in
      revenues and net loss.

   

  Total Assets

   

  Fiscal 2020 Compared to Fiscal 2019

   

  Total assets increased $222.6 million or 87% from Fiscal 2019 to Fiscal 2020, with cash accounting for $3.3
      million of the increase, trade receivables accounting for $2.5 million of the increase, inventory and other current assets accounting for $5.9 million of the increase, goodwill of $124.1 million and $60.2 million of intangibles net of amortization
      and exchange differences from the acquisitions of Chronogolf, iKentoo, Kounta and Gastrofix accounting for $184.3 million of the increase, lease assets accounting for $16.0 million of the increase, property and equipment accounting for $2.6 million
      of the increase, and restricted cash and other long-term assets accounting for $8.3 million of the increase. The proceeds from our February 2020 bought deal net of issuance costs accounted for the increase in cash.

   

  Fiscal 2019 Compared to Fiscal 2018

   

  Total assets increased $191.8 million or 300% from Fiscal 2018 to Fiscal 2019, with cash accounting for $183.1
      million of the increase, trade receivables accounting for $1.3 million of the increase, commission assets accounting for $6.7 million of the increase, goodwill from the ReUp acquisition accounting for $2.0 million of the increase, property and
      equipment accounting for $0.6 million of the increase, offset by a decrease in prepaid expenses of $0.3 million and a decrease in intangible assets of $1.5 million due to amortization. The proceeds from our Initial Public Offering net of issuance
      costs accounted for the increase in cash.

   

  

  
    (22)

    
      

  

   

  Total Long-Term Liabilities

   

  Fiscal 2020 Compared to Fiscal 2019

   

  Total long-term liabilities increased $53.0 million or 504% from Fiscal 2019 to Fiscal 2020. The main drivers
      of the increase were the recognition of the lease liability of $13.5 million due to the adoption of the new lease standard and the $29.7 million of the acquisition facility drawn in full, net of issuance costs, in January 2020, in connection with the
      acquisition of Gastrofix. In addition, there was a $6.4 million increase in other long-term liabilities related to acquisition-related compensation accrued in line with continuing employment obligations in connection with the acquisitions made during
      the year. These contingent amounts were not included in the total purchase consideration, but rather were treated as an acquisition-related compensation expense for post-combination services. In addition, the deferred tax liability increased by $5.9
      million. This was offset partially by a $2.6 million reduction in the long-term portion of the Company’s deferred revenue. The decrease of deferred revenue was due to the shorter durations of our contracts in general, which increased the short-term
      portion of deferred revenue and decreased the long-term portion of deferred revenue versus Fiscal 2019.

   

  Fiscal 2019 Compared to Fiscal 2018

   

  Total long-term liabilities decreased $284.8 million or 96.4% from Fiscal 2018 to Fiscal 2019. The main
      drivers of the decrease was the conversion of the Redeemable Preferred Shares which had a carrying value of $250.9 million at the end of Fiscal 2018 into Common Shares, the decrease in deferred tax liabilities of $30.2 million and the decrease in
      long-term portion of deferred revenue of $3.8 million. The decrease in deferred tax liabilities is due to the reversal of the balance of the Part VI.I tax given the conversion of the Redeemable Preferred Shares upon our Initial Public Offering. The
      decrease of deferred revenue was due to the shorter durations of our contracts in general which increased the short-term portion of deferred revenue and decreased the long-term portion of deferred revenue versus Fiscal 2018.

   

  
    (23)

    
      

  

   

  Quarterly Results of Operations

   

  The following table sets forth selected unaudited quarterly statements of operations data for each of the
      eight quarters ended March 31, 2020. This data should be read in conjunction with our audited annual consolidated financial statements and the notes related thereto. These quarterly operating results are not necessarily indicative of our operating
      results for a full year or any future period.

   

  

  	 	 	 	 	 	 	 	 	 	 	 	Three months ended	 	 	 	 	 	 	 	 	 	 
	(In thousands of US dollars,	 	Jun. 30,	 	 	Sep. 30,	 	 	Dec. 31,	 	 	Mar. 31,	 	 	Jun. 30,	 	 	Sept. 30,	 	 	Dec. 31,	 	 	Mar. 31,	 
	except per share data)	 	2018	 	 	2018	 	 	2018	 	 	2019	 	 	2019	 	 	2019	 	 	2019	 	 	2020	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	Revenues	 	 	17,471	 	 	 	18,598	 	 	 	20,097	 	 	 	21,285	 	 	 	24,065	 	 	 	28,026	 	 	 	32,275	 	 	 	36,271	 
	Direct cost of revenues	 	 	5,390	 	 	 	5,251	 	 	 	5,970	 	 	 	6,962	 	 	 	8,366	 	 	 	9,522	 	 	 	11,716	 	 	 	13,595	 
	Gross profit	 	 	12,081	 	 	 	13,347	 	 	 	14,127	 	 	 	14,323	 	 	 	15,699	 	 	 	18,504	 	 	 	20,559	 	 	 	22,676	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	General and administrative	 	 	2,644	 	 	 	2,910	 	 	 	3,443	 	 	 	4,793	 	 	 	4,411	 	 	 	5,527	 	 	 	7,198	 	 	 	7,350	 
	Research and development	 	 	4,184	 	 	 	4,024	 	 	 	5,001	 	 	 	5,074	 	 	 	6,303	 	 	 	7,339	 	 	 	8,070	 	 	 	10,100	 
	Sales and marketing	 	 	8,647	 	 	 	9,039	 	 	 	9,995	 	 	 	11,362	 	 	 	13,040	 	 	 	12,060	 	 	 	15,049	 	 	 	15,239	 
	Depreciation of property and equipment	 	 	272	 	 	 	324	 	 	 	378	 	 	 	415	 	 	 	390	 	 	 	423	 	 	 	386	 	 	 	550	 
	Depreciation of right-of-use assets	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	414	 	 	 	609	 	 	 	648	 	 	 	821	 
	Foreign exchange loss (gain)	 	 	119	 	 	 	(9	)	 	 	240	 	 	 	637	 	 	 	(330	)	 	 	(80	)	 	 	315	 	 	 	(300	)
	Acquisition-related compensation	 	 	—	 	 	 	108	 	 	 	158	 	 	 	188	 	 	 	707	 	 	 	2,055	 	 	 	3,187	 	 	 	5,138	 
	Amortization of intangible assets	 	 	980	 	 	 	875	 	 	 	644	 	 	 	649	 	 	 	1,012	 	 	 	1,800	 	 	 	2,154	 	 	 	4,260	 
	Total operating expenses	 	 	16,846	 	 	 	17,271	 	 	 	19,859	 	 	 	23,118	 	 	 	25,947	 	 	 	29,733	 	 	 	37,007	 	 	 	43,158	 
	Operating loss	 	 	(4,765	)	 	 	(3,924	)	 	 	(5,732	)	 	 	(8,795	)	 	 	(10,248	)	 	 	(11,229	)	 	 	(16,448	)	 	 	(20,482	)
	Fair value loss on Redeemable Preferred Shares	 	 	(2,952	)	 	 	(3,643	)	 	 	(52,489	)	 	 	(132,135	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Interest income (expense)	 	 	58	 	 	 	33	 	 	 	9	 	 	 	81	 	 	 	1,019	 	 	 	690	 	 	 	283	 	 	 	(226	)
	Loss before income taxes	 	 	(7,659	)	 	 	(7,534	)	 	 	(58,212	)	 	 	(140,849	)	 	 	(9,229	)	 	 	(10,539	)	 	 	(16,165	)	 	 	(20,708	)
	Income tax expense (recovery)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	 	(5	)	 	 	—	 	 	 	—	 	 	 	64	 	 	 	20	 	 	 	19	 	 	 	56	 	 	 	(46	)
	Deferred	 	 	471	 	 	 	662	 	 	 	12,916	 	 	 	(44,837	)	 	 	(152	)	 	 	(483	)	 	 	(459	)	 	 	(2,065	)
	Total income tax expense (recovery)	 	 	466	 	 	 	662	 	 	 	12,916	 	 	 	(44,773	)	 	 	(132	)	 	 	(464	)	 	 	(403	)	 	 	(2,111	)
	Net loss	 	 	(8,125	)	 	 	(8,196	)	 	 	(71,128	)	 	 	(96,076	)	 	 	(9,097	)	 	 	(10,075	)	 	 	(15,762	)	 	 	(18,597	)
	Loss per share – Basic and diluted	 	 	(0.28	)	 	 	(0.27	)	 	 	(2.37	)	 	 	(2.21	)	 	 	(0.11	)	 	 	(0.12	)	 	 	(0.18	)	 	 	(0.21	)

  

    

  Revenues

   

  The increase in total revenue was due to increases in subscription revenue including the increased adoption of
      our add-ons including Lightspeed Payments and payment referral fees as well as additional hardware sales. The number of Customer Locations using our platform and the GTV processed through our platforms have both exhibited increases over the
      cumulative period evidencing their increased usage and adoption.

   

  Direct Cost of Revenues

   

  Our total quarterly costs of revenue increased sequentially for all periods presented except for the quarter
      ended September 30, 2018. The aggregate increase was primarily due to increased costs associated with supporting a greater number of Customer Locations utilizing our platform.

   

  Gross Profit

   

  Our total quarterly gross profit increased sequentially for all periods presented due primarily to increased
      sales to existing and new customers.

   

  
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  Operating Expenses

   

  Total operating expenses generally increased sequentially for each period presented. The
      aggregate increase was primarily due to the additional resources such as headcount required to support our expanding base of Customer Locations as well as higher sales and marketing expenses required to attract additional customers to our platform.

   

  Liquidity and Capital Resources

   

  Overview

   

  The general objectives of our capital management strategy reside in the preservation of our capacity to
      continue operating, in providing benefits to our stakeholders and in providing an adequate return on investment to our shareholders by selling our services at a price commensurate with the level of operating risk assumed by us.

   

  We thus determine the total amount of capital required consistent with risk levels. This capital structure is
      adjusted on a timely basis depending on changes in the economic environment and risks of the underlying assets. We are not subject to any externally imposed capital requirements.

   

  Working Capital

   

  Our primary source of cash flow is from capital raises totaling $417 million since Fiscal 2016. Our approach
      to managing liquidity is to ensure, to the extent possible, that we always have sufficient liquidity to meet our liabilities as they become due. We do so by monitoring cash flow and performing budget-to-actual analysis on a regular basis. In addition
      to the cash balances, we have a $25 million credit facility available to be drawn to meet ongoing working capital requirements. We drew down $30.0 million from our acquisition facility in January 2020 in connection with the purchase of Gastrofix. Our
      principal cash requirements are for working capital and acquisitions we may execute. Working capital surplus as at March 31, 2020 was $162.4 million. Excluding the short-term portion of deferred revenue of $36.6 million, our working capital as at
      March 31, 2020 is $199.0 million. Given our existing cash and credit facilities, along with proceeds obtained from our bought deal in February 2020, we believe there is sufficient liquidity to meet our current and short-term financial obligations.

   

  Credit Facility

   

  In April 2019, we entered into new credit facilities with Canadian Imperial Bank of Commerce, including a $25
      million demand revolving operating credit facility and a $30 million stand-by acquisition term loan. The new credit facilities replaced our previous $15 million working capital line of credit provided by Silicon Valley Bank. We drew down the full
      acquisition term loan to help finance the acquisition of Gastrofix in January 2020.

   

  Base Shelf Prospectus

   

  On July 29, 2019, we announced the filing of a preliminary short form base shelf prospectus with securities
      regulatory authorities in each of the provinces and territories of Canada to allow us and certain of our security holders to qualify the distribution by way of prospectus in Canada of up to C$500 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. Subsequently, on February 6, 2020, we announced that we had filed an amended and
      restated short form base shelf prospectus to allow us to offer up to an aggregate of C$1 billion 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.

   

  Bought Deal Offering

   

  On February 27, 2020, the Company completed a new issue and secondary offering on a bought deal basis of its
      subordinate voting shares through the issuance of new shares and a secondary sale of shares by certain shareholders. The bought deal offering consisted of an aggregate of 7,717,650 subordinate voting shares, including the exercise in full by the
      underwriters of their over-allotment option to purchase 1,006,650 additional subordinate voting shares. A total of 4,695,000 subordinate voting shares were issued from treasury for gross consideration of $130,933 for the Company, with share issuance
      costs for the Company amounting to $5,595. A total of 3,022,650 subordinate voting shares were sold by the selling shareholders for gross consideration of $84,295, with the underwriting fees relating to their shares being paid by the selling
      shareholders.

   

  
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  Cash Flows

   

  The following table presents cash and cash equivalents as at March 31, 2020, and 2019, and cash flows from
      operating, investing, and financing activities for Fiscal 2020 and Fiscal 2019:

   

  

  	 	 	Fiscal year 

          ended March 31,	 	 	Three months 

          ended March 31,	 
	(In thousands of US dollars)	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	Cash and cash equivalents	 	 	210,969	 	 	 	207,703	 	 	 	210,969	 	 	 	207,703	 
	Net cash provided by (used in)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating activities	 	 	(28,550	)	 	 	(7,556	)	 	 	(8,885	)	 	 	(238	)
	Investing activities	 	 	(120,293	)	 	 	(3,419	)	 	 	(59,029	)	 	 	(802	)
	Financing activities	 	 	153,532	 	 	 	194,919	 	 	 	153,741	 	 	 	194,623	 
	Effect of foreign exchange on cash and cash equivalents	 	 	(1,423	)	 	 	(892	)	 	 	(1,520	)	 	 	(752	)
	Net increase (decrease) in cash and cash equivalents	 	 	3,266	 	 	 	183,052	 	 	 	84,307	 	 	 	192,831	 

  

    

  Cash Flows Used in Operating Activities

   

  Cash flows used in operating activities for Fiscal 2020 were $28.6 million compared to $7.6 million for Fiscal
      2019. Excluding transaction costs of $4.7 million, payroll taxes relates to stock-based compensation of $1.4 and payment of deferred acquisition compensation expense of $1.7 million, cash flows used in operating activities were $20.7 million in
      Fiscal 2020. Cash flows used for operations were lower in Fiscal 2020 due primarily to $13.7 million less cash generated from working capital than in the prior year as we shifted to accepting more monthly payment plans with our customers as compared
      to annual fees paid in advance.

   

  Cash Flows Used in Investing Activities

   

  Cash flows used in investing activities for Fiscal 2020 were $120.3 million compared to $3.4 million for
      Fiscal 2019. The increase in cash outflows for investing activities of $116.9 million was mainly due to the acquisitions of Chronogolf, iKentoo, Kounta and Gastrofix in Fiscal 2020 which accounted for $120.2 million of cash out in the year.

   

  Cash Flows from Financing Activities

   

  Cash flows from financing activities for Fiscal 2020 was $153.5 million compared to $194.9 million for Fiscal
      2019. The decrease in cash inflows from financing activities of $41.4 million was due to the closing of our initial public offering on March 15, 2019 which yielded proceeds of $193.8 million net of issuance costs while the proceeds from our bought
      deal offering in Fiscal 2020 yielded proceeds of 125.4 million net of issuance costs. In addition, cash flows from financing activities include an increase of $30.0 million from the draw down of the acquisition facility in connection with the
      purchase of Gastrofix in January 2020.

   

  Based upon our current cash balance and available financing, we believe that cash flows from operations,
      together with credit available under the credit facility, will be adequate to meet the Company’s future operating cash needs.

   

  Recent Developments

   

  On April 8, 2020, we provided a business update that we had seen positive momentum through most of the fourth
      quarter of Fiscal 2020 prior to feeling the impact of the global economic disruption caused by the COVID-19 Pandemic. We noted in this update that there was at the time uncertainty regarding the duration and magnitude of the COVID-19 Pandemic, but
      that the crisis was clearly impacting our retail and hospitality customers, including their GTV, overall demand for Lightspeed services and anticipated churn rates due to business closures. We also noted that despite the risks and uncertainties, we
      believed that we were well-positioned to help SMB retailers and restaurants move away from legacy on-premise systems to cloud-based, omni-channel solutions and that we would also continue to leverage our privileged position at the point of sale to
      seize upon the Lightspeed Payments opportunity. We also stated that we were well-capitalized as of March 31, 2020.

   

  

  
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  As of the date hereof, there continues to be uncertainty regarding the duration and magnitude of the COVID-19
      Pandemic. The current global crisis continues to impact Lightspeed’s retail and hospitality customers, including their GTV, overall demand for Lightspeed services, and anticipated churn rates due to business closures. As long as social distancing
      measures persist, we expect this to have a negative impact on Lightspeed’s business, financial condition and results of operations. In this context, Lightspeed has moved decisively to mitigate these negative impacts of the crisis through
      customer-focused initiatives, such as subscription discounts and deferred payment arrangements, and cost-containment measures. Despite being well capitalized, we moved swiftly to manage our costs in many ways once we began to feel the effects of
      COVID-19. We revisited our hiring plans, quickly recalibrated sales and marketing spending in line with new activity levels, renegotiated with vendors, and attacked all the other vectors of discretionary spending. We further pursued the various
      available government relief programs in the many markets we serve around the world. Our intention in doing all of this is to ensure we can preserve our best asset, our people, in a manner that leaves us confident in our bank account balance.

   

  We have modeled scenarios that reflect various assumptions around the duration of COVID-19 and its impact on
      new business rates, GTV rates, and churn rates. Under each of these scenarios our intention is to the manage the business with a view to maintaining strength in our balance sheet to capitalize on the opportunities that we see ahead.

   

  The extent of the future impact of the COVID-19 Pandemic on our business, financial condition and results of
      operations cannot currently be predicted. We are continually monitoring, assessing, and responding where possible, to the potential effects of the COVID-19 Pandemic. We expect that our financial results for the first quarter of Fiscal 2021 will be
      negatively impacted by the COVID-19 Pandemic, though we cannot currently estimate the overall severity or duration of any resulting adverse impact on our business, financial condition or results of operations, though the impact may be material. A
      material adverse effect on our employees, customers, vendors, partners and/or other stakeholders could have a material adverse effect on us.

   

  Contractual Obligations

   

  We have contractual obligations with a variety of expiration dates. The table below outlines our contractual
      obligations as at March 31, 2020:

    

  	 	 	Payments due by period	 
	(In thousands of US dollars)	 	
          < 1

          Year

        	 	 	
          1 to 3

          Years

        	 	 	
          4 to 5

          Years

        	 	 	
          >5

          Years

        	 	 	Total	 
	Accounts payable and accrued liabilities	 	 	30,810	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	30,810	 
	Other long-term liabilities	 	 	—	 	 	 	8,198	 	 	 	—	 	 	 	—	 	 	 	8,198	 
	Lease obligations(1)	 	 	4,620	 	 	 	7,276	 	 	 	5,159	 	 	 	9,577	 	 	 	26,632	 
	 Total contractual obligations	 	 	35,430	 	 	 	15,474	 	 	 	5,159	 	 	 	9,577	 	 	 	65,640	 

   

  		(1)	Included in the lease obligations are short term leases and variable lease payments for our share of tenant operating expenses and taxes. Lease obligations relate mostly to our office
            space. The lease terms are between one and ten years. See note 15 to the consolidated financial statements for further details regarding leases.

   

  Off-Balance Sheet Arrangements

   

  We have not entered into off-balance sheet financing arrangements, other than low value and short-term leases
      included above under “Contractual Obligations”. From time to time, we may 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 our consolidated financial statements. The
      executive compensation expense for the top five key management personnel is as follows for Fiscal 2020 and Fiscal 2019:

   

  

  	 	 	Fiscal year ended March 31,	 
	(In thousands of US dollars)	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Short-term employee benefits and other benefits	 	 	1,389	 	 	 	1,892	 
	Stock-based payments	 	 	2,812	 	 	 	1,288	 
	Total compensation paid to key management personnel	 	 	4,201	 	 	 	3,180	 

  

   

  
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  Financial

        Instruments and Other Instruments

   

  Credit and Concentration Risk

   

  Generally, the carrying amount in our consolidated statement of financial position exposed to credit risk, net
      of any applicable provisions for losses, represents the maximum amount exposed to credit risk.

   

  Our credit risk is primarily attributable to our cash and cash equivalents and trade receivables. We do not
      require guarantees from our customers. Credit risk with respect to cash and cash equivalents is managed by maintaining balances only with high credit quality financial institutions.

   

  Due to our diverse customer base, there is no particular concentration of credit risk related to our trade
      receivables. Moreover, balances for trade receivables are managed and analyzed on an ongoing basis to ensure expected credit losses are established and maintained at an appropriate amount.

   

  We maintain a provision for impairment of a portion of trade receivables when collection becomes doubtful. We
      estimate anticipated losses from doubtful accounts based upon the expected collectability of all trade receivables, which estimate takes into account the number of days past due, collection history, identification of specific customer exposure and
      current economic trends. As a result of the increased collectability risk, including the estimated impact of the COVID-19 Pandemic, the Company increased its expected credit loss at the end of Fiscal 2020 by $1.2 million.

   

  The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables
      mentioned above. We do not hold any collateral as security.

   

  Foreign Currency Exchange Risk 

   

  We are exposed to currency risk due to financial instruments denominated in foreign
      currencies. The following table provides a summary of our exposure to the Canadian dollar, the Euro, the British pound sterling, the Australian dollar and the Swiss Franc, expressed in thousands of U.S. dollars:

   

  	2020	 	
          CAD

          $

        	 	 	
          EUR

          $

        	 	 	
          GBP

          $

        	 	 	
          AUD

          $

        	 	 	
          CHF

          $

        	 	 	
          Total

          $

        	 
	Cash and cash equivalents	 	 	16,992	 	 	 	14,073	 	 	 	379	 	 	 	569	 	 	 	685	 	 	 	32,698	 
	Trade and other receivables	 	 	323	 	 	 	3,020	 	 	 	246	 	 	 	441	 	 	 	77	 	 	 	4,107	 
	Accounts payable and accrued liabilities	 	 	(10,583	)	 	 	(10,230	)	 	 	(490	)	 	 	(3,785	)	 	 	(481	)	 	 	(25,569	)
	Long-term debt	 	 	—	 	 	 	(7,408	)	 	 	—	 	 	 	(702	)	 	 	—	 	 	 	(8,110	)
	Lease liabilities	 	 	(10,523	)	 	 	(4,399	)	 	 	(347	)	 	 	(781	)	 	 	(721	)	 	 	(16,771	)
	 Net financial position exposure	 	 	(3,791	)	 	 	(4,944	)	 	 	(212	)	 	 	(4,258	)	 	 	(440	)	 	 	(13,645	)

   

  We have not entered into arrangements to hedge our exposure to currency risk.

   

  Interest Rate Risk

   

  Interest rate risk is the risk that changes in interest rates will have a negative impact on
      earnings and cash flow. Certain of our cash earns interest. Our trade receivables, accounts payable and accrued liabilities and lease liabilities do not bear interest. Our exposure to interest rate risk is related to our acquisition facility. We are
      not exposed to material interest rate risk.

   

  Share price risk

   

  Stock-based compensation (social costs) are payroll taxes associated with stock-based compensation that we are
      subject to in various countries in which we operate. Social costs are accrued at each reporting period based on the number of vested stock options and awards outstanding, the exercise price, and our share price. Changes in the accrual are recognized
      in direct cost of revenues and operating expenses. An increase in share price will increase the accrued expense for social costs, and when the share price decreases, the accrued expense will become a reduction in social costs expense, all other
      things being equal, including the number of vested stock options and exercise price remaining constant. The impact on the accrual for social costs on outstanding stock-based payment awards of an increase or decrease in our share price of 10% would
      result in a change of $160 at March 31, 2020.

   

  

  
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  Critical Accounting Policies and Estimates

   

  The preparation of our consolidated financial statements in conformity with IFRS requires management to make
      estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We review these estimates on an ongoing basis based on management’s best knowledge of current events and actions that we may
      undertake in the future. Actual results could differ from these estimates. Areas requiring the most significant estimates and judgments are outlined below. Management has determined that we operate in a single operating and reportable segment.

   

  IFRS 16 - Leases

   

  In January 2016, the IASB released IFRS 16. The new standard, which represents a major revision of the way in
      which companies account for leases, sets out the principles that both parties to a contract, i.e. the customer (lessee) and the supplier (lessor), apply to provide relevant information about leases in a manner that faithfully represents those
      transactions. To meet this objective, a lessee is required to recognize assets and liabilities arising from a lease, following a single model, where previously leases were classified as either finance leases or operating leases.

   

  On April 1, 2019, we adopted IFRS 16, and all related amendments, using the modified retrospective transition
      method, under which the cumulative effect of initial application, if any, is recognized in accumulated deficit at April 1, 2019. The new standard requires the recognition of right-of-use assets and lease liabilities on our balance sheet for operating
      leases, along with the net impact on transition recorded to accumulated deficit. There was no impact on our accumulated deficit upon adoption. We are required to separately recognize the interest expense on the lease liability and the depreciation
      expense on the right-of-use asset.

   

  Our consolidated balance sheet as at March 31, 2020 reflects an increase in lease assets of $15,957 and an
      increase in lease liabilities of $16,847 as compared to our consolidated balance sheet as at March 31, 2019 as a result of adopting this standard. Our statement of operations for the three months and fiscal year ended March 31, 2020 reflects a
      reduction in rent expense of $954 and $2,894, an additional depreciation expense due to the right-of use assets of $821 and $2,492, and an increase in finance costs for effective interest expense on its lease liabilities of $246 and $852
      respectively.

   

  There is no impact to the overall changes in cash flows. However, operating cash flows are positively
      impacted, while financing cash flows is negatively impacted due primarily to the classification of principal payments on lease liabilities.

   

  The comparative information for the prior period has not been restated and continues to
      be reported under IAS 17, Leases, and related interpretations. The primary change in accounting policies as a result of the application of IFRS 16 is explained below. Such a change is made in accordance with the transitional provisions of IFRS 16.

   

  At inception of a contract, we assess 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. To assess whether a contract conveys the right to control the use of an identified asset, we assess whether:

   

  		–	The contract involves the use of an identified asset - this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a
          physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified.

   

  		–	We have the right to obtain substantially all the economic benefits from the use of the asset throughout the period of use; and

   

  		–	We have the right to direct the use of the asset. We have this right when we have the decision-making rights that are most relevant to changing how and for what purpose the asset is used.

   

  At inception or on reassessment of a contract that contains a lease component, we allocate the consideration
      in the contract to each lease component on the basis of their relative stand-alone prices.

   

  We recognize a right-of-use asset and a lease liability at the lease commencement date. 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 of 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 prior to the commencement date. Any costs related to the removal and restoration of leasehold improvements, which meet the
      definition of fixed assets under IAS 16 Property Plant and Equipment are assessed under IAS 37, Provisions, Contingent Liabilities and Contingent Assets, and are not within the scope of IFRS 16.

   

  

  
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  The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
      to the end of the lease term, which is considered the appropriate useful life of these assets. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability, to the extent
      necessary.

   

  The lease liability is initially measured at the present value of the lease payments that are not paid at the
      commencement date, discounted using an incremental borrowing rate if the rate implicit in the lease arrangement is not readily determinable.

   

  Lease payments included in the measurement of the lease liability comprise fixed payments, including
      in-substance fixed payments and variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date.

   

  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, lease term, or if we change our assessment of whether we will exercise an 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.

   

  Lease incentives receivable are included in the initial measurement of the lease liability and right-of-use
      asset.

   

  Short-term leases and leases of low-value assets

   

  We elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease
      term of 12 months or less and leases of low-value assets. We recognize the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

   

  On the statement of cash flows, lease payments related to short-term leases, low value assets and variable
      lease payments not included in lease liabilities are classified as cash outflows from operating activities on the cash flow statement whereas the remaining lease payments are classified as cash flows from financing activities.

   

  Recoverability of Deferred Tax Assets and Current and Deferred Income Taxes and Tax
          Credits

   

  Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of
      future taxable income. We establish provisions based on reasonable estimates for possible consequences of audits by the tax authorities. The amount of such provisions is based on various factors, such as experience of previous tax audits and
      differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

   

  Deferred income tax assets are recognized for unused tax losses and deductible temporary differences to the
      extent it is probable that taxable income will be available against which the losses and deductible temporary differences can be utilized. Management’s judgment is required to determine the amount of deferred income tax assets that can be recognized,
      based upon the likely timing and the level of future taxable income together with future tax planning strategies.

   

  Share-Based Payments

   

  We measure the cost of equity-settled transactions with employees by reference to the fair value of the
      related instruments at the date at which they are granted. Estimating fair value for share-based payments requires determining the most appropriate valuation model for a grant, which depends on the terms and conditions of the grant. This also
      requires making assumptions and determining the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield.

   

  Business Combinations and Impairment of Non-financial Assets

   

  Business combinations are accounted for in accordance with the acquisition method. The consideration
      transferred and the acquiree’s identifiable assets, liabilities and contingent liabilities are measured at their fair value. We develop the fair value internally by using appropriate valuation techniques, which are generally based on a forecast of
      the total expected future net discounted cash flows. These evaluations are linked closely to the assumptions made by management regarding the future performance of the related assets and the discount rate. Contingent consideration is measured at fair
      value using a discounted cash flow model.

   

  

  
    (30)

    
      

  

   

  Our impairment test for goodwill is based on internal estimates of fair value less costs of disposal
      calculations and uses valuation models such as the discounted cash flows model. Key assumptions on which management has based its determination of fair value less costs of disposal include estimated growth rates, discount rates and tax rates. These
      estimates, including the methodology used, can have a material impact on the respective values and ultimately the amount of any goodwill impairment.

   

  Whenever property and equipment and intangible assets are tested for impairment, the determination of the
      assets’ recoverable amount involves the use of estimates by management and can have a material impact on the respective values and ultimately the amount of any impairment.

   

  Provisions

   

  We have recorded provisions to cover cost exposures that could materialize in future periods. In determining
      the amount of the provisions, assumptions and estimates are made in relation to discount rates and the expected cost to settle such liabilities.

   

  COVID-19 Pandemic

   

  The uncertainties around COVID-19 required the use of judgments and estimates which resulted in no material
      impacts for the period ended March 31, 2020. The future impact of COVID-19 uncertainties could generate, in future reporting periods, a significant risk of material adjustment to the following: revenue recognition, estimated losses on
      revenue-generating contracts, goodwill and intangible impairment and other assets and liabilities.

   

  Recently Issued Accounting Pronouncements Not Yet Adopted

   

  From time to time, new accounting pronouncements are issued by the International Accounting Standards Board
      (“IASB”) or other standards-setting bodies, and are adopted as of the specified effective date.

   

  Outstanding Share Information

   

  Lightspeed is a publicly traded company listed on the Toronto Stock Exchange (TSX: LSPD). Our authorized share
      capital consists of (i) an unlimited number of subordinate voting shares, (ii) an unlimited number of multiple voting shares and (iii) an unlimited number of preferred shares, issuable in series, of which 77,565,184 subordinate voting shares,
      14,667,922 multiple voting shares and no preferred shares were issued and outstanding as of May 19, 2020.

   

  As of May 19, 2020, there were 3,717,392 options outstanding under the Company’s Amended and Restated 2012
      Stock Option Plan (of which 1,692,778 were vested as of such date), 162,516 options outstanding under the Company’s Amended and Restated 2016 Stock Option Plan (of which 162,516 were vested as of such date), 3,155,363 options outstanding under the
      Company’s Amended and Restated Omnibus Incentive Plan (of which 95,300 were vested as of such date) and 500,000 options outstanding which were issued in compliance with an allowance under the rules of the TSX as inducements for executive officers to
      enter into contracts of full-time employment with the Company (“Inducement Grants”) (of which none were vested as of such date). Each such option is or will become exercisable for one subordinate voting share.

    

  As of May 19, 2020, there were no warrants outstanding.

   

  As of May 19, 2020, there were 10,221 DSUs outstanding under the Company’s Amended and Restated Omnibus
      Incentive Plan. Each such DSU will, upon the holder thereof ceasing to be a director, executive officer, employee or consultant of the Company in accordance with the Amended and Restated Omnibus Incentive Plan, be settled at the discretion of the
      board through (a) the delivery of shares issued from treasury or purchased on the open market, (b) cash, or (c) a combination of cash and shares.

   

  As of May 19, 2020, there were 112,892 RSUs outstanding under the Company’s Amended and Restated Omnibus
      Incentive Plan (of which none were vested as of such date) and 4,877 RSUs outstanding which were Inducement Grants (of which none were vested as of such date). Each such RSU, upon vesting, may be settled at the discretion of the board through (a) the
      delivery of shares issued from treasury or purchased on the open market, (b) cash, or (c) a combination of cash and shares.

   

  
    (31)

    
      

  

   

  As of May 19, 2020, there were 84,326 PSUs outstanding under the Company’s Amended and Restated Omnibus
      Incentive Plan (of which none were vested as of such date). Each such PSU, upon vesting, may be settled at the discretion of the board through (a) the delivery of shares issued from treasury or purchased on the open market, (b) cash, or (c) a
      combination of cash and shares.

   

  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 March 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 March 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 March 31, 2020.

   

  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 Kounta which was acquired on November 1, 2019, and Gastrofix which was acquired on January 7, 2020.

   

  Kounta’s contribution to our Consolidated Statements of Loss and Comprehensive Loss for Fiscal 2020 was
      approximately 3% of total revenues and approximately 2% of total net loss. Additionally, as at March 31, 2020, Kounta’s current assets and current liabilities were approximately 0% and 2% of consolidated current assets and current liabilities, and
      its non-current assets and non- current liabilities were approximately 0% and 3% of consolidated non-current assets and non-current liabilities, respectively.

   

  

  
    (32)

    
      

  

  
   

  Gastrofix’s contribution to our Consolidated Statements of Loss and Comprehensive Loss for Fiscal 2020 was
      approximately 3% of total revenues and approximately 1% of total net loss. Additionally, as at March 31, 2020, Gastrofix’s current assets and current liabilities were approximately 2% and 7% of consolidated current assets and current liabilities, and
      its non-current assets and non-current liabilities were approximately 0% and 10% of consolidated non-current assets and non-current liabilities, respectively.

   

  The amounts recognized for the assets acquired and liabilities assumed at the date of acquisition are
      described in Note 5 of the audited consolidated financial statements for the fiscal year ended Fiscal 2020.

    

  

  (33)Exhibit 4.4

   

  Lightspeed POS Inc.

   

  Condensed Interim Consolidated Financial Statements 

      (Unaudited) 

  For the three months ended June 30, 2020 

  (expressed in thousands of US dollars)

   

   

  
     

    
      
 

  

  Lightspeed POS Inc. 

  Condensed Interim Consolidated Balance Sheets

  (Unaudited) 

  As at June 30 and March 31, 2020 

  
  
     

  

  
  

  (expressed in thousands of US dollars)

   

  	 	 	 	 	 	June 30,	 	 	March 31,	 
	 	 	Notes	 	 	2020	 	 	2020	 
	 	 	 	 	 	$	 	 	$	 
	Assets	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current assets	 	 	 	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	 	 	 	 	 	203,521	 	 	 	210,969	 
	Trade and other receivables	 	 	10	 	 	 	10,266	 	 	 	10,879	 
	Inventories	 	 	 	 	 	 	623	 	 	 	932	 
	Other current assets	 	 	9	 	 	 	9,532	 	 	 	10,427	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total current assets	 	 	 	 	 	 	223,942	 	 	 	233,207	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lease right-of-use assets	 	 	11	 	 	 	15,334	 	 	 	15,957	 
	Property and equipment, net	 	 	 	 	 	 	7,645	 	 	 	7,989	 
	Intangible assets, net	 	 	 	 	 	 	60,737	 	 	 	62,819	 
	Goodwill	 	 	 	 	 	 	151,306	 	 	 	146,598	 
	Restricted cash and other long-term assets	 	 	12	 	 	 	11,710	 	 	 	11,749	 
	Deferred tax assets	 	 	 	 	 	 	88	 	 	 	109	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total assets	 	 	 	 	 	 	470,762	 	 	 	478,428	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Liabilities and Shareholders’ Equity	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current liabilities	 	 	 	 	 	 	 	 	 	 	 	 
	Accounts payable and accrued liabilities	 	 	13	 	 	 	31,326	 	 	 	30,810	 
	Lease liabilities	 	 	11	 	 	 	3,474	 	 	 	3,301	 
	Income taxes payable	 	 	 	 	 	 	80	 	 	 	76	 
	Current portion of deferred revenue	 	 	 	 	 	 	32,924	 	 	 	36,622	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total current liabilities	 	 	 	 	 	 	67,804	 	 	 	70,809	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Deferred revenue	 	 	 	 	 	 	4,072	 	 	 	5,472	 
	Lease liabilities	 	 	11	 	 	 	13,507	 	 	 	13,546	 
	Long-term debt	 	 	14	 	 	 	29,716	 	 	 	29,687	 
	Other long-term liabilities	 	 	15	 	 	 	8,735	 	 	 	8,198	 
	Deferred tax liabilities	 	 	 	 	 	 	5,279	 	 	 	6,578	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total liabilities	 	 	 	 	 	 	129,113	 	 	 	134,290	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shareholders’ equity	 	 	 	 	 	 	 	 	 	 	 	 
	Share capital	 	 	16	 	 	 	858,436	 	 	 	852,115	 
	Additional paid-in capital	 	 	 	 	 	 	16,186	 	 	 	11,773	 
	Accumulated other comprehensive income (loss)	 	 	 	 	 	 	622	 	 	 	(6,271	)
	Accumulated deficit	 	 	 	 	 	 	(533,595	)	 	 	(513,479	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total shareholders’ equity	 	 	 	 	 	 	341,649	 	 	 	344,138	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total liabilities and shareholders’ equity	 	 	 	 	 	 	470,762	 	 	 	478,428	 

    

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

  

   

  
    2 

    
      
 

  

  Lightspeed POS Inc. 

  Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

  (Unaudited) 

  For the three months ended June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  	 	 	 	 	 	Three months ended June 30,	 
	 	 	Notes	 	 	2020	 	 	2019	 
	 	 	 	 	 	 	 	$	 	 	 	$	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	 	4	 	 	 	36,229	 	 	 	24,065	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Direct cost of revenues	 	 	5	 	 	 	14,615	 	 	 	8,520	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gross profit	 	 	 	 	 	 	21,614	 	 	 	15,545	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 
	General and administrative	 	 	 	 	 	 	6,771	 	 	 	3,790	 
	Research and development	 	 	 	 	 	 	9,824	 	 	 	6,521	 
	Sales and marketing	 	 	 	 	 	 	15,100	 	 	 	13,289	 
	Depreciation of property and equipment	 	 	 	 	 	 	412	 	 	 	390	 
	Depreciation of right-of-use assets	 	 	11	 	 	 	827	 	 	 	414	 
	Foreign exchange loss (gain)	 	 	 	 	 	 	480	 	 	 	(330	)
	Acquisition-related compensation	 	 	 	 	 	 	5,129	 	 	 	707	 
	Amortization of intangible assets	 	 	 	 	 	 	4,405	 	 	 	1,012	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total operating expenses	 	 	 	 	 	 	42,948	 	 	 	25,793	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating loss	 	 	 	 	 	 	(21,334	)	 	 	(10,248	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net interest income (expense)	 	 	7	 	 	 	(301	)	 	 	1,019	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Loss before income taxes	 	 	 	 	 	 	(21,635	)	 	 	(9,229	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income tax expense (recovery)	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	 	 	 	 	 	55	 	 	 	20	 
	Deferred	 	 	 	 	 	 	(1,574	)	 	 	(152	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total income tax recovery	 	 	 	 	 	 	(1,519	)	 	 	(132	)
	Net loss	 	 	 	 	 	 	(20,116	)	 	 	(9,097	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other comprehensive income (loss)	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Items that may be reclassified to net loss	 	 	 	 	 	 	 	 	 	 	 	 
	Foreign currency differences on translation of foreign operations	 	 	 	 	 	 	6,893	 	 	 	—	 
	Total comprehensive loss	 	 	 	 	 	 	(13,223	)	 	 	(9,097	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net loss per share – basic and diluted	 	 	8	 	 	 	(0.22	)	 	 	(0.11	)

    

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

   

  
    3 

    
      
 

  

  Lightspeed POS Inc. 

  Condensed Interim Consolidated Statements of Cash Flows

  (Unaudited) 

  For the three months ended June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  	 	 	Three months ended June 30,	 
	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Cash flows from (used in) operating activities	 	 	 	 	 	 	 	 
	Net loss	 	 	(20,116	)	 	 	(9,097	)
	Items not affecting cash and cash equivalents	 	 	 	 	 	 	 	 
	Acquisition-related compensation	 	 	5,129	 	 	 	707	 
	Amortization of intangible assets	 	 	4,405	 	 	 	1,012	 
	Depreciation of property and equipment and lease right-of-use assets	 	 	1,239	 	 	 	804	 
	Deferred income taxes	 	 	(1,574	)	 	 	(152	)
	Stock-based compensation expense	 	 	5,529	 	 	 	912	 
	Unrealized foreign exchange loss (gain)	 	 	172	 	 	 	5	 
	(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities	 	 	 	 	 	 	 	 
	Trade and other receivables	 	 	251	 	 	 	2,418	 
	Inventories	 	 	309	 	 	 	(79	)
	Other assets	 	 	592	 	 	 	(633	)
	Accounts payable and accrued liabilities	 	 	1,031	 	 	 	(1,178	)
	Income taxes payable	 	 	4	 	 	 	(4	)
	Deferred revenue	 	 	(5,098	)	 	 	(479	)
	Other long-term liabilities	 	 	415	 	 	 	478	 
	Net interest (income) expense	 	 	301	 	 	 	(1,019	)
	 	 	 	 	 	 	 	 	 
	Total operating activities	 	 	(7,411	)	 	 	(6,305	)
	 	 	 	 	 	 	 	 	 
	Cash flows from (used in) investing activities	 	 	 	 	 	 	 	 
	Additions to property and equipment	 	 	(160	)	 	 	(393	)
	Acquisition of business, net of cash acquired	 	 	(1,779	)	 	 	(10,330	)
	Interest income	 	 	468	 	 	 	1,259	 
	 	 	 	 	 	 	 	 	 
	Total investing activities	 	 	(1,471	)	 	 	(9,464	)
	 	 	 	 	 	 	 	 	 
	Cash flows from (used in) financing activities	 	 	 	 	 	 	 	 
	Proceeds from exercise of stock options	 	 	2,872	 	 	 	1,178	 
	Share issuance costs	 	 	(778	)	 	 	(1,401	)
	Payment of lease liabilities	 	 	(954	)	 	 	(506	)
	Financing costs	 	 	(343	)	 	 	—	 
	 	 	 	 	 	 	 	 	 
	Total financing activities	 	 	797	 	 	 	(729	)
	 	 	 	 	 	 	 	 	 
	Effect of foreign exchange rate changes on cash and cash equivalents	 	 	637	 	 	 	235	 
	 	 	 	 	 	 	 	 	 
	Net decrease in cash and cash equivalents during the period	 	 	(7,448	)	 	 	(16,263	)
	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents – Beginning of period	 	 	210,969	 	 	 	207,703	 
	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents – End of period	 	 	203,521	 	 	 	191,440	 
	Interest paid	 	 	301	 	 	 	—	 
	Income taxes paid	 	 	—	 	 	 	—	 

    

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

   

  
    4 

    
      
 

  

  Lightspeed POS Inc. 

  Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

  (Unaudited) 

  For the three months ended June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares) 

  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
          Issued and

          Outstanding Shares

        	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Notes	 	
          Number

          of shares

        	 	 	Amount	 	 	
          Additional

          paid-in

          capital

        	 	 	
          Accumulated

          other

          comprehensive

          income (loss)

        	 	 	
          Accumulated

          deficit

        	 	 	Total	 
	 	 	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at March 31, 2020	 	 	 	 	92,206,817	 	 	 	852,115	 	 	 	11,773	 	 	 	(6,271	)	 	 	(513,479	)	 	 	344,138	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net loss	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(20,116	)	 	 	(20,116	)
	Share issuance costs	 	 	 	 	—	 	 	 	(3	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(3	)
	Exercise of stock options and vesting of share awards	 	 	 	 	738,483	 	 	 	3,988	 	 	 	(1,116	)	 	 	—	 	 	 	—	 	 	 	2,872	 
	Stock-based compensation	 	 	 	 	—	 	 	 	—	 	 	 	5,529	 	 	 	—	 	 	 	—	 	 	 	5,529	 
	Share-based acquisition-related compensation	 	 	 	 	25,099	 	 	 	2,336	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,336	 
	Other comprehensive income	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	6,893	 	 	 	—	 	 	 	6,893	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at June 30, 2020	 	 	 	 	92,970,399	 	 	 	858,436	 	 	 	16,186	 	 	 	622	 	 	 	(533,595	)	 	 	341,649	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at March 31, 2019	 	 	 	 	83,752,210	 	 	 	652,336	 	 	 	4,278	 	 	 	—	 	 	 	(459,948	)	 	 	196,666	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net loss and comprehensive loss	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(9,097	)	 	 	(9,097	)
	Share issuance costs	 	 	 	 	—	 	 	 	(650	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(650	)
	Exercise of stock options and vesting of share awards	 	 	 	 	440,983	 	 	 	1,636	 	 	 	(458	)	 	 	—	 	 	 	—	 	 	 	1,178	 
	Stock-based compensation	 	 	 	 	—	 	 	 	—	 	 	 	912	 	 	 	—	 	 	 	—	 	 	 	912	 
	Exercise of warrants	 	 	 	 	31,647	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Share-based acquisition-related compensation	 	 	 	 	—	 	 	 	234	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	234	 
	Shares issued in connection with business combination	 	 	 	 	50,199	 	 	 	915	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	915	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at June 30, 2019	 	 	 	 	84,275,039	 	 	 	654,471	 	 	 	4,732	 	 	 	—	 	 	 	(469,045	)	 	 	190,158	 

    

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

   

  
    5 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  1. Organization and nature of operations

   

  Lightspeed POS Inc. (“Lightspeed” or the “Company”) was incorporated on March 21, 2005 under the Canada Business
      Corporations Act. Its head office is located at Gare Viger, 700 Saint-Antoine St. East, Suite 300, Montréal, Quebec, Canada. Lightspeed provides easy-to-use, omni-channel commerce enabling platforms. The Company’s software platforms provide its
      customers with the critical functionalities they need to engage with consumers, manage their operations, accept payments, and grow their business. Lightspeed operates globally in over 100 countries, empowering single- and multi-location small and
      medium-sized businesses to compete in an omni-channel market environment by engaging with consumers across online, mobile, social, and physical channels.

   

  The Company’s shares are listed on the Toronto Stock Exchange under the stock symbol “LSPD”.

   

  2. Basis of presentation and consolidation

   

  These condensed interim consolidated financial statements have been prepared in accordance with International Financial
      Reporting Standards (IFRS) applicable to the preparation of interim financial statements, including International Accounting Standard (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB). Certain
      information and disclosures have been omitted or condensed. The same accounting policies and methods of computation were followed in the preparation of these unaudited condensed interim consolidated financial statements as were followed in the
      preparation of the most recent annual audited consolidated financial statements. These unaudited condensed interim consolidated financial statements should be read together with the Company’s annual audited consolidated financial statements and notes
      thereto for the fiscal year ended March 31, 2020. Certain comparative figures have been reclassified in order to conform to the current period presentation. 

   

  These unaudited condensed interim consolidated financial statements were approved for issue by the Board of Directors of
      the Company on August 5, 2020.

   

  Seasonality of interim operations

   

  The operations of the Company can be seasonal, and the results of operations for any interim period are not necessarily
      indicative of operations for the full fiscal year or any future period.

   

  Estimates, judgments and assumptions

   

  The preparation of the unaudited condensed interim consolidated financial statements in accordance with IFRS requires
      management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and reported amounts of revenues and expenses during the period. These estimates and
      assumptions are based on historical experience, expectations of the future, and other relevant factors and are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future
      period affected. Actual results may differ from these estimates. 

   

  In preparing these unaudited condensed interim consolidated financial statements, the significant judgments made by
      management in applying the Company’s accounting policies and the key sources of uncertainty are the same as those applied and described in the Company’s annual audited consolidated financial statements for the fiscal year ended March 31, 2020.

   

  
    6 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  In March 2020, the World Health Organization characterized a novel strain of the coronavirus, known as COVID-19, as a
      pandemic. Concerns related to the spread of COVID-19 and the related containment measures intended to mitigate its impact have created substantial disruption in the global economy. Refer to note 3 for a description of how COVID-19 impacted the
      Company’s significant accounting estimates and assumptions.

   

  3. Significant accounting policies and other changes in the current reporting period

   

  Risks and uncertainties related to COVID-19

   

  The uncertainties around COVID-19 required the use of judgments and estimates which resulted in no material impacts for
      the three months ended June 30, 2020 other than the impact on expected credit losses driven by the changes in the macro-economic environment due to COVID-19. For information on the expense related to the loss allowance, refer to note 10. The future
      impact of COVID-19 uncertainties could generate, in future reporting periods, a significant risk of material adjustment to the following: revenue recognition, estimated losses on revenue-generating contracts, goodwill and intangible impairment, and
      other assets and liabilities.

   

  In addition to the impacts disclosed above, the Company received $6,216 with respect to remuneration of eligible
      employees pursuant to government-sponsored COVID-19 wage subsidy programs globally.

   

  4. Revenue from contracts with customers

   

  The disaggregation of the Company’s revenue from contracts with customers was as follows:

   

  	 	 	
          Three months ended

          June 30,

        	 
	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Software and payments revenue	 	 	33,406	 	 	 	21,334	 
	Hardware and other	 	 	2,823	 	 	 	2,731	 
	Total revenue from contracts with customers	 	 	36,229	 	 	 	24,065	 

   

  
    7 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  5. Direct cost of revenues

   

  	 	 	
          Three months ended

          June 30,

        	 
	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Cost of software and payments revenue	 	 	 	 	 	 	 	 
	Support	 	 	5,223	 	 	 	4,006	 
	Other third-party costs	 	 	6,847	 	 	 	1,961	 
	 	 	 	12,070	 	 	 	5,967	 
	Cost of hardware and other	 	 	 	 	 	 	 	 
	Hardware and other	 	 	2,545	 	 	 	2,553	 
	Total direct cost of revenues	 	 	14,615	 	 	 	8,520	 

    

  Support consists of any support services provided by the Company to its customers and mostly consists of salaries; other
      third-party costs consists of housing, servicing, infrastructure and maintaining the Company’s servers, payments made to suppliers of certain software add-ons sold by the Company and direct costs related to Lightspeed Payments; hardware relates to
      costs of hardware sold to customers; and other relates to implementation services provided to customers. 

   

  6. Employee compensation

   

  The total employee compensation comprising salaries and benefits, excluding tax credits and government grants for the
      three months ended June 30, 2020, was $32,189 (June 30, 2019 - $17,995). 

   

  Stock-based compensation and related costs were included in the following expenses:

   

  	 	 	
          Three months ended

          June 30,

        	 
	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Direct cost of revenues	 	 	615	 	 	 	240	 
	General and administrative	 	 	1,842	 	 	 	962	 
	Research and development	 	 	2,251	 	 	 	577	 
	Sales and marketing	 	 	2,508	 	 	 	1,100	 
	Total stock-based compensation and related costs	 	 	7,216	 	 	 	2,879	 

   

  
    8 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  Due to the COVID-19 pandemic, the Company benefited from global government subsidies. The subsidies were included as a
      reduction in the following expenses:

   

  	 	 	
          Three months ended

          June 30,

        	 
	 	 	2020	 
	 	 	 	$	 
	Direct cost of revenues	 	 	1,190	 
	General and administrative	 	 	1,088	 
	Research and development	 	 	2,015	 
	Sales and marketing	 	 	1,923	 
	Total reduction	 	 	6,216	

   

  7. Finance income and costs

   

  For the three months ended June 30, 2020, interest income and interest expense, including interest expense on lease
      liabilities, amounted to $448 and $749, respectively (2019 – $1,259 and $240). 

   

  8. Loss per share

   

  The Company had two categories of potentially dilutive securities: share options and awards and warrants. Diluted net
      loss per share excludes all potentially-dilutive shares if their effect is anti-dilutive. As a result of net losses incurred, all potentially-dilutive securities have been excluded from the calculation of diluted net loss per share because including
      them would be anti-dilutive; therefore, basic and diluted number of shares is the same for the three months ended June 30, 2020 and 2019. All outstanding potentially dilutive securities could potentially dilute loss per share in the future.

   

  	 	 	
          Three months ended

          June 30,

        	 
	 	 	2020	 	 	2019	 
	 	 	 	 	 	 	 
	Issued Common Shares	 	 	92,970,399	 	 	 	84,275,039	 
	Weighted average number of Common Shares (basic and diluted)	 	 	92,464,395	 	 	 	83,879,960	 
	Net loss per Common Share – basic and diluted	 	$	(0.22	)	 	$	(0.11	)

    

  The weighted average number of potential dilutive securities that are not included in the diluted per share calculations
      because they would be anti-dilutive are as follows:

    

  	 	 	
          Three months ended

          June 30,

        	 
	 	 	2020	 	 	2019	 
	 	 	 	 	 	 	 
	Stock options and awards	 	 	7,516,555	 	 	 	5,998,076	 
	Warrants	 	 	—	 	 	 	86,403	 

   

  
    9 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  9. Other current assets

   

  	 	 	June 30, 

            2020	 	 	March 31, 

            2020	 
	 	 	 	$	 	 	 	$	 
	Restricted cash	 	 	1,868	 	 	 	1,829	 
	Prepaid expenses and deposits	 	 	3,323	 	 	 	4,048	 
	Commission asset	 	 	3,574	 	 	 	3,938	 
	Other	 	 	767	 	 	 	612	 
	Total other current assets	 	 	9,532	 	 	 	10,427	 

    

  10. Trade and other receivables

   

  

  	 	 	June 30,	 	 	March 31,	 
	 	 	2020	 	 	2020	 
	 	 	 	$	 	 	 	$	 
	Trade	 	

        	9,211	 	 	 	7,721	 
	Loss allowance	 	 	(4,192	)	 	 	(2,878	)
	Total trade receivables	 	 	5,019	 	 	 	4,843	 
	Research and development tax credits receivable	 	 	2,840	 	 	 	4,059	 
	Government subsidy receivable	 	 	1,308	 	 	 	 —	 
	Sales tax receivable	 	 	521	 	 	 	847	 
	Other	 	 	578	 	 	 	1,130	 
	Total trade and other receivables	 	 	10,266	 	 	 	10,879	 

    

  Included in general and administrative expenses is an expense of $1,145 related to loss allowance for the three months
      ended June 30, 2020 (June 30, 2019 – expense of $184).

   

  
    10 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  11. Leases

   

  The Company leases certain properties under non-cancellable lease agreements that relate to office space. The expected
      lease terms are between one and ten years. 

   

  The roll-forward of lease right-of-use assets is as follows:

   

  	 	 	$	 
	Cost	 	 	 
	As at March 31, 2020	 	 	18,403	 
	Additions	 	 	85	 
	Exchange differences	 	 	119	 
	As at June 30, 2020	 	 	18,607	 
	 	 	 	 	 
	Accumulated depreciation	 	 	 	 
	As at March 31, 2020	 	 	2,446	 
	Depreciation charge	 	 	827	 
	As at June 30, 2020	 	 	3,273	 
	 	 	 	 	 
	Cost, net accumulated depreciation	 	 	 	 
	As at March 31, 2020	 	 	15,957	 
	 	 	 	 	 
	As at June 30, 2020	 	 	15,334	 
	 	 	 	 	 
	Offices	 	 	14,570	 
	Vehicles	 	 	764	 
	 	 	 	 	 
	The maturity analysis of lease liabilities as at June 30, 2020 is as follows:	 	 	 	 
	 	 	 	 	 
	Fiscal Year	 	$	 
	2021	 	 	2,698	 
	2022	 	 	3,006	 
	2023	 	 	2,448	 
	2024	 	 	1,919	 
	2025	 	 	1,519	 
	2026 and thereafter	 	 	5,391	 
	 	 	 	 	 
	Total minimum payments	 	 	16,981	 

    

  Expenses relating to short-term leases, including those excluded due to the election of the practical expedient, as well
      as variable lease payments not included in the measurement of lease liabilities, were approximately $363 for the three months ended June 30, 2020 (June 30, 2019 - $446).

   

  The interest expense for the three months ended June 30, 2020 was $233 (June 30, 2019 - $184).

   

  
    11 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  12. Restricted cash and other long-term assets

   

  	 	 	
          June 30,

          2020

        	 	 	
          March 31,

          2020

        	 
	 	 	 	$	 	 	 	$	 
	Restricted cash	 	 	7,528	 	 	 	7,703	 
	Commission asset	 	 	2,885	 	 	 	2,898	 
	Other	 	 	1,297	 	 	 	1,148	 
	 	 	 	 	 	 	 	 	 
	Total restricted cash and other-long term assets	 	 	11,710	 	 	 	11,749	 

    

  13. Accounts payable and accrued liabilities

   

  	 	 	
          June 30,

          2020

        	 	 	
          March 31,

          2020

        	 
	 	 	 	$	 	 	 	$	 
	Trade	 	 	8,803	 	 	 	12,325	 
	Accrued compensation and benefits	 	 	8,971	 	 	 	9,528	 
	Accrued payroll taxes on stock-based compensation	 	 	2,637	 	 	 	1,170	 
	Acquisition-related payables	 	 	10,036	 	 	 	7,787	 
	Other	 	 	879	 	 	 	—	 
	 	 	 	 	 	 	 	 	 
	Total accounts payable and accrued liabilities	 	 	31,326	 	 	 	30,810	 

   

  14. Credit facility

   

  The Company has credit facilities with the Canadian Imperial Bank of Commerce (“CIBC”), which include a $25,000 demand
      revolving operating credit facility (the “Revolver”) and a $50,000 stand-by acquisition term loan (the “Acquisition Facility”, and together with the Revolver, the “Credit Facilities”).

   

  The Revolver will be available for draw at any time during the term of the Credit Facilities. 

   

  The Acquisition Facility was drawn for $30,000 in January 2020 for the acquisition of Gastrofix GmbH (“Gastrofix”) and
      will mature 60 months thereafter. The interest rate on the current Acquisition Facility is equal to LIBOR + 3.0%. 

   

  The financing costs related to the Credit Facilities are netted against the principal and are being amortized over the
      60- month term. 

   

  The Credit Facilities are subject to certain general and financial covenants, including the delivery of annual audited
      consolidated financial statements to the holders.

   

  
    12 

    
      
 

  

  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  15. Other long-term liabilities 

   

  	 	 	
          June 30,

          2020

        	 	 	
          March 31,

          2020

        	 
	 	 	 	$	 	 	 	$	 
	Acquisition-related payables	 	 	8,336	 	 	 	7,982	 
	Accrued payroll taxes on stock-based compensation	 	 	399	 	 	 	198	 
	Other	 	 	—	 	 	 	18	 
	 	 	 	 	 	 	 	 	 
	Total other long-term liabilities	 	 	8,735	 	 	 	8,198	 

    

  16. Share capital

   

  The Company’s authorized share capital consists of (i) an unlimited number of Subordinate Voting Shares, (ii) an
      unlimited number of Multiple Voting Shares and (iii) an unlimited number of preferred shares, issuable in series.

   

  17. Related party transactions

   

  Key management personnel includes the C-Level executives, and other Vice-Presidents. Other related parties include close
      family members of the key management personnel and entities controlled by the key management personnel.

   

  The executive compensation expense to the top five key management personnel is as follows: 

   

  	 	 	
          Three months ended

          June 30,

        	 
	 	 	2020	 
	 	 	 	$	 
	Short-term employee benefits and other benefits	 	 	408	 
	Stock-based payments	 	 	1,697	 
	Total compensation paid to key management personnel	 	 	2,105	 

    

  18. Financial instruments

   

  The Company measures the fair value of its financial assets and financial liabilities using a fair value hierarchy. A
      financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value. The different levels of the
      fair value hierarchy are defined as follows:

   

  Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

   

  Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
      directly or indirectly; and

   

  Level 3: Unobservable inputs for the asset or liability.

   

  
    13 

    
      
 

  

  
  Lightspeed POS Inc. 

  Notes to Condensed Interim Consolidated Financial Statements

  (unaudited) 

  June 30, 2020 and 2019 

  

  
  
     

  

  
  (expressed in thousands of US dollars, except number of shares)

   

  The Company estimated the fair value of its financial instruments as described below.

   

  The fair value of cash and cash equivalents, restricted cash, trade receivables, trade accounts payable, accrued
      compensation and benefits, contingent consideration and other accruals is considered to be equal to their respective carrying values due to their short-term maturities.

   

  The fair value of contingent consideration and other long-term liabilities approximates their carrying value as at June
      30 and March 31, 2020.

   

  Recurring fair value measurements

   

  Contingent consideration

   

  On January 7, 2020, the Company acquired Gastrofix, a cloud-based POS hospitality software provider in Germany. The
      amount included in the purchase price related to the estimated fair value of contingent consideration was nil. The contingent consideration was valued by the Company using a discounted cash flow model under the income approach. The maximum potential
      contingent consideration payout is $10,030 over two years. The fair value of the contingent consideration, if above nil, is presented as a component of accounts payable and accrued liabilities as well as other long-term liabilities on the condensed
      interim consolidated balance sheets. The change in the fair value of the contingent consideration, if any, is recognized within general and administrative expenses in the condensed interim consolidated statements of loss and comprehensive loss. As at
      June 30, 2020, there was no change in the estimated contingent consideration from the time of the acquisition.

   

  The purchase price allocation of Gastrofix was finalized during the three months ended June 30, 2020.

   

  As at June 30 and March 31, 2020, financial instruments measured at fair value in the condensed interim consolidated
      balance sheet were as follows:

   

  	 	 	 	 	 	June 30, 2020	 	 	 	 	 	March 31, 2020	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
          Fair value

          hierarchy

        	 	 	
          Carrying

          amount

        	 	 	
          Fair

          value

        	 	 	
          Fair value

          hierarchy

        	 	 	
          Carrying

          amount

        	 	 	
          Fair

          value

        	 
	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 
	Cash and cash equivalents	 	 	Level 1	 	 	 	203,521	 	 	 	203,521	 	 	 	Level 1	 	 	 	210,969	 	 	 	210,969	 
	Restricted cash	 	 	Level 1	 	 	 	9,396	 	 	 	9,396	 	 	 	Level 1	 	 	 	9,532	 	 	 	9,532	 
	Contingent consideration	 	 	Level 3	 	 	 	0	 	 	 	0	 	 	 	Level 3	 	 	 	0	 	 	 	0	 

   

   

  

  14

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