Document:

Exhibit 4.1

   

   

  LIGHTSPEED POS INC.

        ANNUAL INFORMATION FORM

   

  Fiscal Year ended March 31, 2020

   

  May 21, 2020

   

  
     

    
      
 

  

  ANNUAL INFORMATION FORM 

    LIGHTSPEED POS INC. 

    TABLE OF CONTENTS

   

  	ANNUAL INFORMATION FORM	1
	 	 
	EXPLANATORY NOTES	2
	 	 
	FORWARD-LOOKING INFORMATION	4
	 	 
	CORPORATE STRUCTURE	7
	 	 
	BUSINESS OF LIGHTSPEED	9
	 	 
	GENERAL DEVELOPMENT OF LIGHTSPEED’S BUSINESS	18
	 	 
	RISK FACTORS	21
	 	 
	DIVIDEND POLICY	47
	 	 
	DESCRIPTION OF SHARE CAPITAL	47
	 	 
	MARKET FOR SECURITIES	53
	 	 
	DIRECTORS AND EXECUTIVE OFFICERS	53
	 	 
	AUDIT COMMITTEE	56
	 	 
	LEGAL PROCEEDINGS AND REGULATORY ACTIONS	58
	 	 
	INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	58
	 	 
	TRANSFER AGENT AND REGISTRAR	59
	 	 
	MATERIAL CONTRACTS	59
	 	 
	INTERESTS OF EXPERTS	59
	 	 
	ADDITIONAL INFORMATION	60
	 	 
	EXHIBIT A	A-1

   

  
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  EXPLANATORY NOTES

   

  As used in this Annual Information Form (“AIF”), 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. Furthermore, as used in this AIF, unless the context indicates or requires otherwise, the following terms have the following
    meanings:

   

  “Audit Committee” means the audit committee of the Board;

   

  “CBCA” means the Canada Business Corporations Act, as amended from time to time;

   

  “CNG Committee” means the compensation, nominating and governance committee of the Board;

   

  “COVID-19 Pandemic” means the COVID-19 pandemic declared by the World Health organization on March 11, 2020;

   

  “Fiscal 2018” means the fiscal year ended March 31, 2018;

   

  “Fiscal 2019” means the fiscal year ending March 31, 2019;

   

  “Fiscal 2020” means the fiscal year ending March 31, 2020;

   

  “NI 52-109” means National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings, as amended from time to time;

   

  “NI 52-110” means National Instrument 52-110 – Audit Committees, as amended from time to time;

   

  “POS” means point of sale;

   

  “SaaS” means software as a service;

   

  “SMBs” means small- and medium-sized businesses; and

   

  “TSX” means the Toronto Stock Exchange.

   

  This AIF is dated May 21, 2020, which is the date it was approved by the board of directors of the Company (the “Board”), and, unless specifically stated
    otherwise, all information disclosed in this AIF is provided as at March 31, 2020, the end of Lightspeed’s most recently completed fiscal year.

   

  This AIF should be read in conjunction with the Company’s audited consolidated financial statements and notes for Fiscal 2020 and Management’s Discussion and Analysis
    for Fiscal 2020, but which, for greater certainty, are not incorporated by reference herein.

   

  Trademarks and Trade Names 

   

  This AIF 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 AIF 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.

   

  Presentation of Financial Information and Other Information 

   

  We present our consolidated financial statements in U.S. dollars. All references in this AIF to dollars, “$” or “US$” are to United States dollars and all references
    to Canadian dollars and “C$” are to Canadian dollars. Amounts are stated in U.S. dollars unless otherwise indicated.

   

  Key Performance Indicators 

   

  This AIF makes reference to “Customer Locations” and “Gross Transaction Volume” or “GTV”, which are key performance indicators we monitor 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.

   

  “Customer Location” means a billing customer location for which the term of services have 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. See “Key Performance Indicators” from Management’s Discussion and Analysis of Financial Condition and Results of Operations for Fiscal 2020.

   

  
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  “Gross Transaction Volume” or “GTV” means the total dollar value of transactions processed through our cloud-based SaaS platforms in the
    period, net of refunds, inclusive of shipping and handling, duty and value-added taxes. GTV does not represent revenue earned by us. See “Key Performance Indicators” from Management’s Discussion and Analysis of Financial Condition and Results of
    Operations for Fiscal 2020.

   

  Exchange Rate Data 

   

  The following table sets out the high and low rates of exchange for one U.S. dollar expressed in Canadian dollars during each of the periods specified, the average
    rate of exchange for those periods and the rate of exchange in effect at the end of each of those periods, each based on the rate of exchange published by the Bank of Canada for conversion of U.S. dollars into Canadian dollars.

   

  	 	 	Fiscal Year Ended March 31,	 
	 	 	2020	 	 	2019	 
	 	 	(C$)	 	 	(C$)	 
	Highest rate during the period	 	 	1.4496	 	 	 	1.3642	 
	Lowest rate during the period	 	 	1.2970	 	 	 	1.2552	 
	Average rate for the period	 	 	1.3308	 	 	 	1.3118	 
	Rate at the end of the period	 	 	1.4187	 	 	 	1.3363	 

   

  
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  FORWARD-LOOKING INFORMATION

   

  This AIF 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 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 are 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 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 identified in our Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended March 31, 2020, which is available under our profile
    on SEDAR at www.sedar.com, and the following risk factors described in greater detail under “Risk Factors” of this AIF:

   

  		●	the COVID-19 Pandemic is adversely affecting and is expected to continue to adversely affect our business, operating results and financial condition and this adverse affect could be material;

   

  		●	our rapid growth may not be sustainable and depends on our ability to attract new customers, retain revenue from existing customers and increase sales to both new and existing customers;

   

  		●	we may not be able to successfully implement our growth strategy on a timely basis or at all;

   

  		●	the impact of worldwide economic conditions such as the COVID-19 Pandemic, including the resulting effect on the operations of and spending by SMBs and consumer spending, may adversely affect our business, operating
          results and financial condition;

   

  		●	our business could be harmed if we fail to manage our growth effectively; 

        
	 	 	 
	 	● 

        	we have a history of losses and we may be unable to achieve profitability; 

        

   

  		●	our limited operating history in new and developing markets and new geographic regions makes it difficult to evaluate our current business and future prospects and may increase the risk that we will not be
          successful;

   

  		●	our growth strategy involves accelerating the rollout of our payment processing solution, Lightspeed Payments, which may present risks and challenges that we have not yet experienced;

   

  
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  		●	if we fail to improve and enhance the functionality, performance, reliability, design, security and scalability of our platforms in a manner that responds to our customers’ evolving needs, our business may be
          adversely affected;

   

  		●	the introduction of Lightspeed Payments subjects us to regulatory requirements, payment card network rules, payment card transactions underwriting and other risks that could be costly and difficult to comply with or
          that could harm our business;

   

  		●	our risk management efforts in connection with the processing of payments may not be effective, which could expose us to losses and liability and otherwise harm our business;

   

  		●	we rely on a limited number of suppliers to provide part of the technology we offer through Lightspeed Payments;

   

  		●	security breaches, denial of service attacks, or other hacking and phishing attacks on our systems or other security breaches, including internal security failures, could harm our reputation or subject us to
          significant liability, and adversely affect our business and financial results;

   

  		●	system failures, interruptions, delays in service, catastrophic events, inadequate infrastructure and resulting interruptions in the availability or functionality of our platforms could harm our reputation or subject
          us to significant liability, and adversely affect our business and financial results;

   

  		●	we store personal and other information of our partners, our customers and their consumers and our employees. If the security of this information is compromised or is otherwise accessed without authorization, our
          reputation may be harmed and we may be exposed to liability and loss of business;

   

  		●	our business is susceptible to risks associated with international sales and the use of our platform in various countries;

   

  		●	our use of “open source” software could negatively affect our ability to sell our solutions and subject us to possible litigation;

   

  		●	we rely on computer hardware, purchased or leased, and software licensed from and services rendered by third parties in order to run our business;

   

  		●	third-party hardware that we sell to our customers is generally procured from a single or limited number of suppliers. Thus, we are at risk of shortages, price increases, changes, delays or discontinuations of
          hardware, which could disrupt and materially adversely affect our business;

   

  		●	our business is highly competitive. We may not be able to compete successfully against current and future competitors; 

        
	 	 	 
	 	● 

        	if our software contains serious errors or defects, we may lose revenue and market acceptance and may incur costs to defend or settle claims with our customers; 

        

   

  		●	we may be unable to achieve or maintain data transmission capacity;

   

  		●	our growth depends in part on the success of our strategic relationships with third parties; 

        
	 	 	 
	 	● 

        	we rely to a significant extent on the integration of third-party payment processing solutions; 

        

   

  		●	if we do not maintain the compatibility of our solutions with third-party applications and operating systems that our customers use or the fiscal recording requirements they are required to comply with in their
          business processes, demand for our solutions could decline;

   

  		●	our business and prospects would be harmed if changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers adversely impact the process by which our customers
          and their consumers interface with our platform;

   

  		●	we may be unable to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third parties from making unauthorized use of our technology;

   

  		●	we may be subject to claims by third-parties of intellectual property infringement; 

        
	 	 	 
	 	● 

        	if we are unable to hire, retain and motivate qualified personnel, our business will suffer; 

        

   

  		●	we are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition;

   

  
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  		●	we have in the past made, and in the future may make, acquisitions and investments that could divert management’s attention, result in operating difficulties and dilution to our shareholders and otherwise disrupt our
          operations and adversely affect our business, operating results or financial position;

   

  		●	businesses we acquire may not have disclosure controls and procedures and internal controls over financial reporting, cybersecurity controls and data privacy compliance programs, or their existing controls and
          programs may be weaker than or otherwise not in conformity with ours;

   

  		●	we may need to raise additional funds to pursue our growth strategy or continue our operations, and we may be unable to raise capital when needed or on acceptable terms;

   

  		●	from time to time, we may become defendants in legal proceedings as to which we are unable to assess our exposure and which could become significant liabilities in the event of an adverse judgment;

   

  		●	new tax laws could be enacted or existing laws could be applied to us or our customers, which could increase the costs of our solutions and adversely impact our business;

   

  		●	unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition;

   

  		●	our future effective tax rates could be subject to volatility or adversely affected by a number of factors;

   

  		●	tax authorities may seek to assess business taxes, sales and use taxes and other indirect taxes. If we are required to collect such taxes in additional jurisdictions, we might be subject to tax liability for past
          sales;

   

  		●	failure to effectively expand our sales capabilities could harm our ability to increase our subscriber base and achieve broader market acceptance of our platforms;

   

  		●	we rely on search engines, advertising on the Internet and social networking sites to attract a meaningful portion of our customers. If we are not able to generate traffic to our website through search engines,
          advertising on the Internet and social networking sites, our ability to attract new customers may be impaired. In addition, if our customers are not able to generate traffic to their stores, restaurants and websites through search engines,
          advertising on the Internet and social networking sites, their ability to attract consumers may be impaired;

   

  		●	if we fail to maintain a consistently high level of customer service or if we fail to manage our reputation, our brand, business and financial results may be harmed;

   

  		●	we are subject to export and import controls and economic sanctions laws that could impair our ability to offer our platform internationally or subject us to liability if we are not in compliance with applicable
          laws;

   

  		●	our brand is integral to our success. If we fail to effectively maintain, promote and enhance our brand, our business and competitive advantage may be harmed;

   

  		●	our insurance costs may increase significantly, we may be unable to obtain the same level of insurance coverage and our insurance coverage may not be adequate to cover all possible losses we may suffer.

   

  		●	provisions of our present and future debt instruments may restrict our ability to pursue business strategies;

   

  		●	we are dependent upon customers’ continued and unimpeded access to the internet, and upon their willingness to use the internet for commerce;

   

  		●	changes in accounting standards and interpretations, and our adoption thereof, as well as subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect
          our reported financial results or financial condition;

   

  		●	exchange rate fluctuations may negatively affect our results of operations;

   

  		●	the dual class structure contained in our restated articles of incorporation has the effect of concentrating voting control and the ability to influence corporate matters with Dax Dasilva, our founder and Chief
          Executive Officer, which may have a negative impact on the trading price of the subordinate voting shares;

   

  		●	the market price of our subordinate voting shares may be volatile and your investment could suffer or decline in value;

   

  
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  		●	we do not currently anticipate paying dividends;

   

  		●	future sales, or the perception of future sales, of subordinate voting shares by existing shareholders or by us, or future dilutive issuances of subordinate voting shares by us, could adversely affect prevailing
          market prices for the subordinate voting shares;

   

  		●	our quarterly results of operations may fluctuate. As a result, we may fail to meet or exceed the expectations of investors or securities analysts, which could cause our share price to decline;

   

  		●	securities analysts’ research or reports could impact the price of the subordinate voting shares; 

        
	 	 	 
	 	● 

        	shareholders have limited control over our Company’s operations; 

        

   

  		●	we incur increased expenses as a result of being a public company;

   

  		●	we are required to develop and maintain proper and effective internal controls over financial reporting. We may not complete our analysis of our internal controls over financial reporting in a timely manner, or these
          internal controls may not be effective, which could adversely affect investor confidence in our Company and, as a result, negatively impact the value of our subordinate voting shares;

   

  		●	our constating documents permit us to issue an unlimited number of subordinate voting shares and multiple voting shares without additional shareholder approval; and

   

  		●	any issuance of preferred shares could make it difficult for another company to acquire us or could otherwise adversely affect holders of our subordinate voting shares, which could depress the price of our
          subordinate voting shares.

   

  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 “Risk Factors” 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 AIF 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 AIF is expressly qualified by the foregoing cautionary statements. 

   

  CORPORATE STRUCTURE

   

  Lightspeed was incorporated under the CBCA on March 21, 2005 as Xsilva Systems Inc. We filed articles of amendment on April 20, 2012 to change our name to Lightspeed
    Retail Inc. and again on October 22, 2014 to change our name to Lightspeed POS Inc.

   

  On December 17, 2008, we filed articles of amendment to split all of our issued and outstanding common shares on a 100,000-to-1 basis. On August 12, 2015, we filed
    articles of amendment to split all of our issued and outstanding redeemable preferred shares on a 10-to-1 basis. On August 2, 2017, we filed articles of amendment to cancel our class A-1 and class A-2 preferred shares.

   

  Immediately prior to closing of our initial public offering (the “IPO”) on March 15, 2019 (the “IPO Closing Date”), we implemented a number of
    pre-closing capital changes. All of our issued and outstanding redeemable preferred shares were converted into common shares on a one-for-one basis in accordance with their terms. We also filed articles of amendment so as to amend and re-designate our
    common shares as subordinate voting shares, create a new class of multiple voting shares, repeal the classes of shares relating to our redeemable preferred shares, create a new class of preferred shares, issuable in series and consolidate all of our
    issued and outstanding shares on a 4-to-1 basis. On March 18, 2019, we also proceeded to file restated articles of incorporation. See “Description of Share Capital” for more information about our current share capital.

   

  
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  Our head and registered office is located at 700 Saint-Antoine Street East, Suite 300, Montréal, Québec, Canada, H2Y 1A6.

   

  The following chart identifies our material subsidiaries (including jurisdiction of formation, incorporation or continuance of the various entities):

   

  

   

  
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  BUSINESS OF LIGHTSPEED

   

  Mission 

   

  At Lightspeed, our mission is to bring cities and communities to life by powering SMBs. We believe cities and communities are built on the presence and success of
    local SMBs and that SMBs are integral to the vibrancy of these communities. Running an SMB, however, is becoming increasingly complex. Consumer behaviors and expectations are changing, fueled by the influence of new technologies pushing consumers
    towards an omni-channel experience. Our solutions equip SMBs with the technology required to transform the way they manage their business and exceed consumers’ expectations in this changing environment.

   

  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 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 in nature and we have a strong
    track-record of growing revenue per customer over time.

   

  Our solutions are specifically tailored to meet the needs of SMBs, essentially democratizing technology previously available only to large enterprises.

   

  We provide SMBs with easy-to-use and affordable platforms with end-to-end capabilities that help them grow. Our platforms are built to scale with SMBs, supporting
    them as they open new locations, and offering increasingly sophisticated solutions as their businesses become more complex. Our platforms help SMBs avoid having to stitch together multiple, and often disjointed, applications from various providers to
    leverage the technology they need to run and grow their businesses. Our ecosystem of development, channel and installation partners further reinforces the scalability of our solutions, making them customizable and extensible. We work alongside our
    customers through their business journey by providing industry-leading onboarding and support services, and fundamentally believe that our success is directly connected to their success.

   

  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, 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 payments 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 since 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.

   

  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, which combined represented 89% of our revenue in Fiscal 2020. 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.

   

  Competitive Strengths 

   

  Comprehensive solution 

   

  Our platforms enable SMBs to run many core aspects of their operations and sell across multiple channels, all using a single platform. We provide our customers a hub
    of end-to-end capabilities, including full POS capabilities, full eCommerce capabilities, tools to manage home delivery and pick-up options, online bookings and membership management capabilities, payment processing, inventory or menu management,
    multi-location connectivity, customer management, loyalty, analytics and reporting. Retailers and hospitality businesses are able to tailor our services by selecting the features that best meet their needs and eliminate inefficiencies associated with
    maintaining a patchwork of loosely-connected niche applications. We maintain a robust ecosystem of third-party integrations, apps and themes that allow our customers to enhance both their online and offline businesses. We and our development partners
    leverage each other’s APIs to connect our respective solutions, thereby expanding the breadth of our platform even further through seamless integrations with accounting software solutions and property management platforms, as well as niche applications
    across a variety of verticals and use cases. Lightspeed Payments further enhances our offering, providing our customers with full visibility into the final step of their sales process.

   

  
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  Simplified user experience 

   

  We make complexity simple for our customers at every stage of their development, from initial onboarding through to expansion. We provide our solutions through an
    intuitive, easy-to-use interface that requires minimal training to operate. We enable customers to manage their businesses on the go by offering cloud-based access to sales, customer and inventory information from anywhere. Customers can access data on
    our platform through any operating system or device. This affords owners and employees more time to spend on what matters most to them: interacting with consumers, selling products and growing their businesses. For retailers, bringing a mobile tablet
    onto the sales floor gives staff faster access to product information and allows for on-the-spot checkout and shorter line-ups. For restaurants, offering tableside ordering helps shorten wait times and decrease the chances of order mistakes.

   

  Enabler of business growth 

   

  We provide our customers with the latest innovations and technologies required to compete successfully and grow their businesses. For SMBs seeking to increase
    consumer engagement, our complete loyalty solution, Lightspeed Loyalty, allows automated, regular communication and incentives to promote increased shopping and dining. For physical retailers looking to sell online, our eCommerce platform, Lightspeed
    eCom, integrates directly into their point of sale system. For hospitality businesses, Lightspeed Delivery provides simplified management of home delivery and consumer pick-up options. We enable our customers to track the metrics that contribute to
    their business success in real-time and make data-driven decisions. From real-time inventory management across multiple locations to end-of-day reports, our software empowers SMBs with actionable insights that take the guesswork out of data.

   

  Scalable platform 

   

  We have built a highly scalable platform that can grow alongside our customers. Our solution is customizable, ensuring that an SMB selects the appropriate features
    and functionalities for its stage of development. When adding a new location, retailers can transfer inventory, get a clear sales overview of the entire business, create a single purchase order for all locations, and access complete purchase history
    from one central place. We have the ability to handle significant spikes in traffic and consumer activity patterns, for example around meaningful promotional events such as Black Friday and Cyber Monday. Given the high scalability and robustness of our
    platform, we have the ability to serve our customers effectively irrespective of how significantly they grow their businesses.

   

  Differentiated approach to market 

   

  While our platforms are well-suited for various types of SMBs, we have primarily focused our attention to date on selling to single- and multi-location retailers,
    restaurants and golf course operators. This targeted approach has allowed us to develop proprietary knowledge of our customers and their industries, and tailor our solutions to address their unique and complex needs. For example, we understand the
    issues facing a retailer that manages a sophisticated inventory system across multiple locations and channels, or the challenges that arise for restaurateurs with a menu and staff that turns over multiple times daily. This differentiated approach to
    market and these specialized offerings are significant reasons why we have cultivated a broad and loyal customer base. We believe that this focused and tailored approach allows us to help our clients run nearly every aspect of their operations and is
    the reason our customers choose our solutions over those of our competitors. Our customers collectively operate approximately 76,500 Customer Locations in more than 100 countries, and sell across a wide variety of verticals within the broader retail
    and hospitality segments.

   

  Growth Strategies

   

  We strive to grow our business both organically, by attracting new customers and expanding our solutions and average revenue per user, and through targeted and
    opportunistic acquisitions. Key elements of our growth strategy include the following:

   

  		●	Expand our customer base. We believe that there is significant potential to increase penetration of our total addressable market, attract new customers and drive even more of our market to move away
          from legacy systems and adopt cloud-based solutions and omni-channel strategies. We seek to attract new customers by leveraging our brand awareness and continually innovating our products, particularly in response to changing regulations and
          consumer behaviours. We will continue to invest in strategies tailored to attract new businesses to our platform, both in our existing geographies and new markets around the world. We will also selectively evaluate opportunities to offer our
          solutions to businesses operating in industry verticals that we do not currently target.

   

  
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  We employ a systematic and data-driven framework for generating our funnel of new leads, engaging with these businesses and converting them into active
    paying customers. Since our founding, we have successfully grown revenue by increasing the number of Customer Locations served. As of March 31, 2020, our customers collectively represented approximately 76,500 Customer Locations in more than 100
    countries.

   

  		●	Expand solutions. Given our platforms’ extensive suite of modules, our customers can add additional functionalities to their initial line-up of Lightspeed products as their needs evolve. We continue to
          see a large portion of our existing customers adopt additional modules as they grow and, increasingly, see new customers opting to purchase multiple modules at the outset when first adopting our platform. Our eCommerce platform has seen strong
          growth with an increasing number of our retail customers electing to use Lightspeed eCom to power their online selling. Lightspeed Payments has also seen favorable adoption by both existing and new customers following its launch in January 2019.

   

  We will continue to add more solutions and modules to our platforms, which will allow us to deepen our relationships with existing customers and attract
    new ones. Since our founding we have successfully added innovative capabilities for payments, eCommerce, home delivery, analytics and loyalty. Our internal process for developing new solutions is based on monitoring of our broader ecosystem,
    specifically identifying the needs of our customers that are being addressed by third parties. Our research and development team then considers the merits of developing solutions to these needs internally.

   

  		●	Expand ARPU. Our success is directly linked to the success of our customers. We provide our customers with the tools to successfully grow their businesses which in turn benefits our platform growth. We
          stand to benefit from their growth as they generate more transaction volume, add new locations, upgrade their plans and use more of our solutions. Our platform was developed with this in mind and has the flexibility to evolve and scale along with
          our customers.

   

  We launched Lightspeed Payments to our base of U.S. retail customers in January 2019 and have since begun offering it to Canadian retail customers as well
    as U.S. hospitality customers. Offering a fully integrated payments functionality is highly complementary to the platforms we offer our customers today and allows us to monetize a greater portion of the transaction volume processed on our platforms
    annually. For SMBs, this service further reduces complexity by integrating seamlessly into our existing platforms, eliminating the need to deal with a separate payments provider and the related data reconciliation, and allowing for more accurate
    management of their businesses.

   

  Lightspeed Payments also allows us to capture a larger portion of the overall economics of a payments transaction. Historically, we have referred customers
    to various payment processing partners, from whom we would generally receive a small percentage-based referral fee. With Lightspeed Payments, we are able to earn a larger percentage (after accounting for network and interchange fees and other direct
    processing costs) of the electronic Gross Transaction Volume processed.

   

  		●	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 GMBH (“Gastrofix”) in January 2020. Our Customers Locations are almost evenly balanced between North America and the rest of world. Additionally, these Customer Locations 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.

   

  Our Solutions 

   

  We provide easy-to-use commerce-enabling SaaS platforms that equip our customers with the critical functionality they need to engage with consumers, manage their
    operations, accept payments, and grow their business. Our customers can use a computer or mobile device to access front-office, back-office, and payments operational dashboards, enabling them to effectively manage their business.

   

  Front-End Customer Experience Solutions 

   

  		●	Point of Sale. Accessible from a mobile device or computer, our POS platforms are designed to allow merchants to create, manage and receive customer orders, sell their products and collect payments.

   

  		●	Omni-Channel Engagement. Our retail platform enables retailers to create a fully-localized and secure online store that is an extension of the products and inventory they offer in-store. Retailers can choose
          from a collection of responsive themes offered in our theme store, or use the built-in editor to customize their site, including adding additional pages or a built-in blog. Customers can use the built-in search optimization tools and Facebook
          integration to help drive traffic to their site.

   

  
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  		●	Home Delivery. Hospitality customers can reach consumers by easily integrating to many of the market-leading home delivery platforms and manage these orders in a single system.

   

  		●	Order Management. Our Lightspeed Hospitality platform enables consumers to place orders directly from a mobile tablet in a restaurant. Orders are then automatically sent to the kitchen for processing. Our
          kitchen display system allows orders to be sent to a mobile tablet or display screen in the restaurant kitchen for immediate processing in a quick-service environment. Restaurants are also able to accept and manage takeout and delivery orders.
          Consumers can make orders in person, on the phone, or from several integrated online ordering services.

   

  		●	Discounts, Price Rules and Gift Cards. Customers are able to offer discounts at the point of sale, as well as sell and manage gift cards. Our retail customers can set price rules, while restaurant customers
          can configure when, and to whom, discounts are offered.

   

  		●	Loyalty. Lightspeed enables retailers and restaurants to offer a fully-integrated loyalty program allowing consumers to accumulate points through retailer or restaurant purchases and redeem points when they
          visit the retailer or restaurant. Retailers and restaurants can also create a branded loyalty app that doubles as an in-store payment method.

   

  		●	Hardware. We also offer a suite of sleek third-party hardware products to complement our software solutions for both the retail and hospitality segments, such as our customer facing display, stands, barcode
          scanners, receipt printers, cash drawers, payment terminals and an assortment of other accessories.

   

  Back-End Operations Management Solutions 

   

  		●	Product and Menu Management. Retailers can add and manage the products they sell, including updating descriptions, categories and images. Retailers can use our public catalogs to save them time creating
          products. Restaurants can configure their menus, by adding products, organizing them into categories and creating combo products.

   

  		●	Inventory Management. Our inventory management system allows retailers and restaurateurs to keep track of the available inventory, access vendor product catalogues, create and receive orders from vendors and
          track costs, and transfer inventory between multiple stores.

   

  		●	Bookings and Membership Management. Golf course operators can book reservations online, manage tee-time schedules and administer membership billing.

   

  		●	Customer Management. Our customers can keep track of consumer information and sales history, which enables them to individually customize the consumer experience.

   

  		●	Employee Management. With the support of partner apps we integrate, our customers can seamlessly coordinate and schedule employees to help enable a high-performing work environment.

   

  		●	Accounting. Our platforms help enable retailers and restaurants to automatically sync their sales, payments and tax data from multiple locations with accounting software such as QuickBooks, Xero or Sage.

   

  		●	Floor and Table Management. Restaurants can create floor plans to organize their tables into groups. Fine dining establishments can organize floors to reflect the actual layout of their restaurant, while
          quick-service establishments can organize for ease of use.

   

  		●	Complex Workflows. Many of our features are equipped to handle advanced workflows that are common for established physical location businesses. These include putting products on layaway and adding a deposit,
          special orders of products from a vendor, credit accounts for customers, managing physical inventory counts, tracking orders and transfer requests across multiple retail locations.

   

  		●	Reporting and Analytics. Retailers can view real-time reports on sales, inventory, payments, customers, employee performance and many other aspects of their businesses. Our restaurant platforms allow owners
          to view real-time reports on revenue, tips, payments, employees, and other facets of their business. Additionally, we provide a retail business intelligence analytics tool with built-in and customizable reports that help retailers identify
          opportunities to improve their business.

   

  		●	Real-Time Dashboard. Our real-time dashboard equips SMBs with data-driven insights into the performance of their business, including sales for the ongoing period compared to historical periods, and an
          overview of back-of-house operations.

   

  Fully Integrated Payments Solutions 

   

  		●	Lightspeed Payments. Our integrated payment processing solution allows our customers to accept electronic payments in-store, through connected terminals and online. Our customers can manage their payments
          directly in the Lightspeed back-office, giving them a single view of their cash flow to their bank account.

   

  
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  		●	Integrated Payment Gateways. Customers that already have a preferred payments processor can connect to several payments partners in the United States, Canada, Europe and Australia.

   

  The Lightspeed Customer Journey 

   

  Highly Efficient Customer Acquisition, Sales and Distribution 

   

  Our acquisition strategy for new customers is highly refined, scalable and completely virtual in approach. We do not employ a “feet on the street” sales team, instead
    leveraging our expertise in using marketing techniques to drive inbound interest to our solutions and a virtual sales team to qualify and finalize contracts with our customers.

   

  Our structured go-to-market approach begins with marketing outreach, targeting potential customers throughout their entire journey on the path to purchase through
    both online channels (paid and organic search, social media, video and content marketing) and offline channels (trade shows, local events and sponsorships). Based on user data and actions, we are able to ascertain with a high degree of certainty the
    stage of the marketing funnel into which a prospect should be grouped and we deliver targeted advertising, informative content and tools relevant to that particular stage of the purchase journey in an effort to push them further down the funnel.

   

  In addition to these methods we also use our growing customer base and third-party referrers as advocates for our brand. These customers and third parties may earn
    incentives, including commissions, for referring other businesses who become Lightspeed customers. We also partner with industry leaders and influencers who are very active in our target markets or key consumer verticals to drive lead generation.

   

  Once a potential customer engages with our marketing channels, our team of in-house sales development representatives qualify the opportunity by exploring the needs
    of the prospective customer to validate that our products are well-suited to their needs and to ensure appropriate budget exists, amongst other criteria. Only highly-qualified leads are then passed on to our business development teams to quote,
    configure and conclude a commercial contract.

   

  Onboarding a customer is also done virtually; indicative of the ease of use of our platform. Customers receive an onboarding session that is completed in hours, and
    allows them to be transactional quickly.

   

  After our brief onboarding period, our team of account managers, customer success managers and business consultants engage the customer to ensure that the customer is
    maximizing its use of our solutions, often resulting in further upselling opportunities for us.

   

  Our pricing model is designed to make it easy for customers to quickly get started with our products. We offer affordable, simple to understand packages from less
    than $100 per month per Customer Location, up to several hundred dollars per Customer Location depending on customer size and complexity. Our additional modules such as Lightspeed Analytics, Lightspeed Loyalty and Lightspeed Accounting all come with an
    additional monthly charge per Customer Location and are sold either by business development team, or by our account management team after the initial sale. Lightspeed Payments is designed to be transparent and easy to understand, unlike the models
    charged by many of the legacy payment processors, and we price our solution at market competitive rates based on a percentage of GTV electronically processed through our platform.

   

  We offer customers the flexibility to choose monthly, annual or multi-year contract terms. 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. Further, in most markets we serve, we price our
    products in the local currency of our customers. While this subjects us to some foreign currency risk, we believe this makes us more competitive in those local markets. The majority of our sales and marketing efforts are accomplished in-house.

   

  Strong Partner Network 

   

  Our customer acquisition strategy also involves channel partners in certain geographies and industry verticals. The Lightspeed Experts Network is our network of
    certified local channel partners and focuses on in-person interactions with customers as an extension of the internal Lightspeed sales and support teams. These partners are trained and certified on our platform and provide us with a local presence in a
    variety of markets. Our channel partners typically earn a percentage of the monthly revenue from the customers they bring on board. These percentages vary based on the volumes and breadth of services provided by those partners. In addition, some of our
    value-add channel partners enable us to access industry verticals outside of traditional retail and hospitality and are becoming an increasingly important part of our partner network.

   

  
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  Competition 

   

  Our market is large, evolving, highly-fragmented, competitive and has low barriers to entry. Our competitors range from large, well-established vendors to smaller,
    earlier-stage ones. We notably compete with payment processors, traditional and cloud-based POS software and terminal providers, peer-to-peer payment providers, and business software providers such as those that provide eCommerce, inventory management,
    analytics, and appointment solutions. We expect competition to intensify in the future, particularly as industry consolidation occurs and as large, well-established vendors increasingly service more complex SMBs. We believe the principal competitive
    factors in our market are:

   

  		●	quality of onboarding and customer experience;

   

  		●	simplicity and ease of use;

   

  		●	ability to offer cost-effective, subscription-based solutions;

   

  		●	ability to run in a cloud-based environment;

   

  		●	availability of strong third-party partner networks;

   

  		●	vision for commerce and product strategy;

   

  		●	breadth and depth of functionality, including omni-channel capabilities;

   

  		●	accuracy and timeliness of reporting, including real-time data;

   

  		●	capabilities to support local market requirements such as language, compliance, including with fiscal regulations, and consumer behaviour;

   

  		●	pace of innovation;

   

  		●	security and reliability; and

   

  		●	ability to support customers’ growth and scalability.

   

  Overall, taking into account each of these factors, we believe that we compare favorably to our competitors. We seek to differentiate ourselves from competitors
    primarily on the basis of providing SMBs with a hub of easy-to-use end-to-end capabilities and comprehensive post-sale support. On the other hand, many competitors offer payments and POS services that have features that are not tailored to particular
    business types or seller needs, and many competitors, especially larger ones, have offerings with comprehensive features and integrations that we believe are inaccessible to SMBs due to their complexity, high cost and the resources required to
    implement them.

   

  We do not believe that any of our competitors offer an integrated solution including all of the features and functionalities of our products. However, some SMBs may
    choose to do business with different vendors that offer, without limitation, one or more of the following:

   

  		●	POS software;

   

  		●	inventory management software;

   

  		●	eCommerce software;

   

  		●	restaurant management software;

   

  		●	loyalty solutions;

   

  		●	analytics and advanced reporting; and

   

  		●	payment processing.

   

  We expect the markets for payments and POS services, eCommerce, inventory management, restaurant management services, analytics services, financial services, loyalty
    and customer marketing services to evolve and overlap, which we expect will increase competition in our industry.

   

  Culture and Employees 

   

  At Lightspeed, we pride ourselves on our culture and employees. We are a company infused with culture, just as much as code. Our values are what unite us, but our
    differences are what inspire us. We strive to do the best work of our lives together, and we celebrate our successes every chance we get.

   

  
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  Our values and leadership principles focus on perseverance and relentlessly driving towards results while retaining our high standards of excellence, all within an
    environment that fosters positivity, trust, mutual respect, accountability and individual ownership. We value ongoing learning and invest in annual global summits for our sales and marketing and product teams. We encourage our team members to be just
    as invested in their communities as they are in Lightspeed by providing annual volunteer days.

   

  We are proud to have received positive feedback and ratings from our current and former employees on employer review site Glassdoor, which shares insights collected
    from millions of reviews on over a million employers. As of March 31, 2020, we were rated 3.9 out of 5. This compares to the then-current average company rating of 3.5. Glassdoor allows both current and former employees to anonymously and transparently
    share feedback on work culture and environment, and job and company satisfaction.

   

  Being headquartered in Montréal, Québec, gives us access to a large and multi-lingual talent pool. Montréal is home to excellent technical and business schools and
    universities and a thriving start-up community. We recruit our employees in a variety of ways, including global outreach, frequent open houses and other recruiting events and internships.

   

  As of March 31, 2020, we had more than 1,100 employees and contractors worldwide. None of our employees are represented by a labor organization or are party to a
    collective bargaining arrangement. We consider our relationship with our employees to be excellent and this is a hallmark of our company. Our employees often say that working at Lightspeed gives them the opportunity to collaborate with the best talent,
    and this is highly valued. We care for and respect our employees and they, in turn, respect and are dedicated to Lightspeed. Based on results on an anonymous survey conducted in January and February of 2020 and responded to by approximately 65% of
    employees worldwide, approximately 75% of Lightspeed employees reported feeling engaged.

   

  As of the date hereof, 5 out of 15 of our executive officers, or 33.33%, are women and one woman sits on the Board, representing 17% of all directors. As of the date
    hereof, 6 out of 15 of our executive officers, or 40%, self-identify as women or as a visible minority and one woman and one person who identifies as a visible minority sit on the Board, representing 33.33% of all directors.

   

  Based on results of an anonymous diversity and inclusion survey conducted by the Company and responded to by approximately half of all employees worldwide, 38.05% of
    employees self-identify as women, 25.61 % of our employees self-identify as belonging to an ethnic minority, 16.81% of employees self-identify as part of the LGBTQ+ community, and 4.01% self-identify as having a disability.

   

  In exceptional circumstances, due to the competitive landscape in which we operate and our need for highly specialized skillsets that may not be readily available
    locally, Lightspeed may recruit foreign nationals requiring visas to work in the countries in which they work or offshore employees. In such circumstances, Lightspeed engages specialized counsel to assist in obtaining such visas. We have elaborated
    procedures and practices to accommodate for such circumstances while complying with applicable laws. As of March 31, 2020, 8.46% of Lightspeed employees are foreign nationals or otherwise require a visa to work in the country in which they are employed
    and 0.24% of employees are located offshore from their entity of employment.

   

  Facilities 

   

  We are headquartered in Montréal, Canada. We do not own any real property. The following table outlines significant facilities that we currently lease.

   

  	Location	 	Area 

            (in square feet)	 	Lease Expiration Date	 	Use
	Montréal, Québec	 	83,447	 	March 31, 2025	 	Office Space
	Amsterdam, the Netherlands	 	17,549	 	September 30, 2026	 	Office Space
	Ghent, Belgium	 	12,346	 	December 31, 2021	 	Office Space
	Berlin, Germany	 	10,818	 	April 6, 2022	 	Office Space
	Sydney, Australia	 	8,317	 	December 31, 2020	 	Office Space
	Geneva, Switzerland	 	5,167	 	September 30, 2023	 	Office Space
	Olympia, Washington	 	5,100	 	February 28, 2021	 	Office Space
	Toronto, Ontario	 	4,806	 	August 31, 2024	 	Office Space
	Ottawa, Ontario	 	3,900	 	June 30, 2021	 	Office Space
	Hamburg, Germany	 	3,197	 	April 30, 2022	 	Office Space
	Les Acacias, Switzerland	 	1,873	 	November 30, 2021	 	Office Space

   

  In addition to the facilities listed above, we also lease office space under short-term leasing arrangements in various locations including London (United Kingdom),
    Amsterdam (the Netherlands), Lausanne and Zurich (Switzerland), and Waterloo (Ontario) under short-term leasing arrangements.

   

  
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  We also lease space in third-party data centres in the Netherlands, Finland, Norway and Germany on which portions of our platforms are hosted.

   

  We believe that our current facilities are adequate to meet our ongoing needs and that, if we require additional space, we will be able to obtain additional
    facilities on commercially reasonable terms.

   

  Intellectual Property 

   

  Our intellectual property rights are important to our business. In accordance with industry practice, we protect our proprietary products, technology and our
    competitive advantage through a combination of contractual provisions and trade secret, patents, copyright and trademark laws in Canada, the United States, Europe and other jurisdictions in which we conduct our business We also have confidentiality
    agreements, assignment agreements and license agreements with employees and third parties, which limit access to and use of our intellectual property.

   

  We have been issued trademark registrations in Canada, the United States, Europe and Australia covering the trademark “Lightspeed”. We have been issued trademark
    registrations in Canada and the United States covering a design of a flame (referred to herein as “Flame Design”). We have filed for protection of the trademark “Lightspeed” and the Flame Design in a number of other jurisdictions, including for
    International Trademark Protection. We have been issued trademark registrations in Canada and the United States covering the trademark “Show & Tell”. We have been issued trademark registrations in Europe covering the trademarks “Lightspeed Cloud”
    and “Lightspeed Pro”. Prior to being acquired by us, Gastrofix had been issued trademark registrations in Europe and the United States covering the trademarks “Gastrofix” and “Pepperkorn”. Prior to being acquired by us, Kounta Pty Ltd had been issued a
    trademark in Australia covering the trademark “Kounta”.

   

  We have been granted a patent titled “Technologies for Point of Sale Transactions” in the United States (U.S. Patent No. 10,467,867) and have also applied for patent
    protection in Canada, Europe, Australia, Mexico and with WIPO.

   

  We are subject to risks related to our intellectual property. For more information, see “Risk Factors – Risks Related to our Business and Industry”.

   

  Government Regulation 

   

  We are subject to a number of federal, state, provincial and foreign laws and regulations that affect companies conducting business on the internet. While we monitor
    changes in these laws and regulations, many are still evolving and it is possible that current or future laws or regulations could be interpreted or applied in a manner that would prohibit, alter, or impair our existing or planned products and
    services. For more information, see “Risk Factors – Risks Related to our Business and Industry”.

   

  Regulations Applicable to eCommerce 

   

  We are subject to laws, regulations and policies that govern the amount and type of taxes our customers are required to collect and remit. Federal, state, provincial
    and foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the internet as a commercial medium. In addition, in many jurisdictions, laws relating to the liability of
    providers of online services for activities of their customers and other third parties are currently being tested by a number of claims, including actions based on defamation, invasion of privacy and other torts, unfair competition, copyright and
    trademark infringement, and other theories based on the nature of the relevant content. New income, sales, use or other tax laws, statutes, rules, regulations or ordinances applicable to solutions provided over the internet could therefore be enacted
    at any time, possibly with retroactive effect. We may also be subject to federal, state provincial and other taxes if a tax authority asserts that our activities or the activities of our subsidiaries are sufficient to establish nexus, or sales and use
    tax or other indirect tax if any such tax authority asserts that distribution of our solutions over the internet is subject to sales and use or other indirect taxes. Jurisprudence of the U.S. Supreme Court has provided for the possibility for U.S.
    states to require that online retailers collect sales and use taxes imposed by such state, even if the retailer has no physical presence in that state, and we have since then seen many jurisdictions in the United States and elsewhere adopt legislation
    in line with this jurisprudence. For more information, see “Risk Factors – Risks Related to our Business and Industry”.

   

  Regulations Concerning Payment Processing 

   

  We are currently subject to a variety of laws and regulations in the United States, Canada and elsewhere related to payments processing, including those governing
    cross-border and domestic money transmission, gift cards and other prepaid access instruments, electronic funds transfers, taxation reporting requirements, contract disclosure requirements, foreign exchange, privacy and data protection, banking and
    import and export restrictions. We are also subject to various anti-corruption and anti-money laundering laws, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and its regulations, the Foreign Corrupt
    Practices Act (U.S.), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA Patriot Act, the U.K. Bribery Act 2010 and Proceeds of Crime Act 2002, and other anti-bribery and anti-money laundering laws in countries
    in which we conduct activities. Concern about the use of payment processing platform for illegal conduct, such as money laundering or to support terrorist activities, may result in legislation or other governmental action that could require changes to
    our platform. Depending on how Lightspeed Payments and our other customer solutions evolve, and as we expand into new geographies, we expect to become subject to additional laws in Canada, the United States, Europe and elsewhere.

   

  
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  Regulations Governing Cybersecurity and the Protection of Data and Privacy 

   

  Our customers can use our platforms to collect, store and use personal or identifying information regarding their employees and consumers. In addition, we store
    personal information and other confidential information of our partners, customers and their consumers and employees, and may also store credit card information of our customers. Accordingly, we may be subject to federal, state, provincial and foreign
    laws regarding cybersecurity and the protection of data and privacy, including the Personal Information Protection and Electronic Documents Act (Canada), the California Consumer Privacy Act and the European General Data Protection
      Regulations (“GDPR”). Further, some jurisdictions have enacted laws requiring companies to notify governmental authorities and/or individuals of certain security breaches, such as those involving certain types of personal data or those
    giving rise to significant risk of harm to an individual. Our agreements with certain customers require us to notify them in the event of a security incident. Additionally, some jurisdictions, as well as our contracts with certain customers, require us
    to use industry-standard or reasonable measures to safeguard personal or confidential information. We post on our website our privacy policy, data processing agreement, and terms of service, which describe the way we process customer data and data
    relating to their employees and consumers. These documents set out Lightspeed’s commitment to processing personal data in a responsible manner and in compliance with applicable data protection legislation.

   

  Lightspeed has implemented a wide range of measures to protect data from unauthorized access, accidental loss or destruction. For instance, Lightspeed hosts its
    product infrastructure with multi-tenant, outsourced infrastructure providers. The physical and environmental security controls of its infrastructure providers are audited for SOC 2 Type II, ISO 27001 and PCI DSS compliance, among other certifications.
    In addition, Lightspeed implements network access control mechanisms designed to prevent network traffic using unauthorized protocols from reaching its product infrastructure. The technical measures implemented differ between infrastructure providers
    and include virtual private cloud implementations, security group assignment, and traditional firewall rules and multi-factor authentication on all administrative consoles. Finally, Lightspeed has designed its infrastructure to log extensive
    information about system behavior, traffic received, system authentication, and other application requests. Internal systems aggregate log data and alert appropriate employees of malicious, unintended, or anomalous activities. Lightspeed personnel,
    including security, operations, and support personnel, are responsive to detected incidents.

   

  Lightspeed has appointed resources to design and oversee its cybersecurity, privacy and data protection policies and procedures, and continually assesses its
    technology platform in light of new legal and regulatory developments. We have implemented an incident management program to define the procedures we follow to mitigate the effect of and rapidly respond to unplanned interruptions in service. We rely on
    internal teams and third-party automated services to continually monitor service interruptions and notify the incident response team of any issues. Our incident response team may include members of executive management, the legal department, the
    product leadership team, support and customer success. Incidents are categorized by severity, helping us trigger the appropriate response cascade. Internal and external communications are made as appropriate. An internal post-mortem must be held within
    three days of any incident and a record of each incident is kept, including relevant metrics and artifacts. Further, we hold incident table-top exercises on a quarterly basis to test and strengthen our processes. A post-mortem follows each tabletop
    exercise.

   

  In Canada, the regulatory authority responsible for enforcement of Canada’s Anti-Spam Legislation (“CASL”) has issued a bulletin that signals broad potential
    liability for electronic intermediaries (such as hosting providers, SaaS providers and payment processors) for failing to take sufficient steps to stop third parties from using intermediary services and facilities to violate CASL, including
    prohibitions on sending electronic marketing messages or installing computer programs without consent.

   

  The regulatory framework in Canada, the United States, Europe and Australia and in many other jurisdictions in respect of cybersecurity and the protection of data and
    privacy is constantly evolving and is likely to remain uncertain for the foreseeable future. As our business continues to expand, and as laws and regulations continue to be passed and their interpretations continue to evolve in numerous jurisdictions,
    additional laws and regulations may become relevant to us. Certain aspects of the interpretation and application of such laws and regulations are also ambiguous. We are subject to risks relating to protection of data and privacy. For more information,
    see “Risk Factors – Risks Related to our Business and Industry”.

   

  Communications Regulation 

   

  We send or enable the sending of emails and other communications in a variety of contexts, including when providing digital receipts and in our marketing efforts.
    Communications laws and regulations, including those promulgated by the Canadian Radio-television and Telecommunications Commission and Federal Communications Commission, apply to certain aspects of this activity in Canada, the United States and
    elsewhere.

   

  
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  Fiscal Regulation 

   

  In a number of jurisdictions, POS systems must comply with applicable fiscalization laws including Kassensicherungsverordnung (Germany), the Cash Register
      Security Regulation (Austria), the Cash Register System Act (Norway) and the Bookkeeping Act (Norway). Such rules and regulations may require the automated storage or reporting of transaction data. Local tax authorities may
    require merchants to submit transaction reports on a regular basis or otherwise upon request. Countries for which we have adapted our platforms for compliance with fiscalization laws include Austria, Belgium, France, Germany, Italy, Norway and Québec,
    Canada. Other than these fiscal requirements, our platform is not, to our knowledge, subject to government-required monitoring, blocking, content filtering, or censoring.

   

  Export and Import Control Regulations 

   

  As a result of our international operations, we are subject to a number of Canadian and foreign laws and regulations relating to economic sanctions and to export and
    import controls which govern or restrict our business and activities in certain countries and with certain persons, including sanctions regulations administered or enforced by the Office of the Superintendent of Financial Institutions in Canada, the
    economic sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control and the export control laws administered by the U.S. Commerce Department’s Bureau of Industry and Security, the U.S. State Department’s
    Directorate of Defense Trade Controls and the Canadian Export and Import Controls Bureau.

   

  Additional Developments 

   

  Legislators and regulators in the jurisdictions in which we operate continue to examine a wide variety of issues that could impact our business, including direct and
    indirect tax, products liability, import and export compliance, accessibility for the disabled, insurance, marketing, privacy, data protection, information security, and labor and employment matters. As our business continues to develop and expand,
    additional rules and regulations may become relevant.

   

  GENERAL DEVELOPMENT OF LIGHTSPEED’S BUSINESS

   

  Below is a summary of key general developments of our business over the last three completed financial years. As of March 31, 2020, Lightspeed operated in a single
    operating and reportable segment.

   

  Three-Year Business Development History 

   

  Fiscal 2018

   

  On May 9, 2017, we announced the launch of Lightspeed Analytics, a solution designed to provide retailers with deep insights and recommendations into their sales,
    inventory, employee performance and customer behaviors by simplifying the gathering of data, and making it accessible, understandable and actionable for business owners and employees.

   

  On September 19, 2017, we announced that our restaurant solution had met the stringent standards necessary to achieve an Oracle Validated Integration with Oracle
    Hospitality OPERA Cloud Services via a new two-way integration enabling hotel restaurants to communicate billing information between the restaurant POS and a hotel’s property management system.

   

  On October 18, 2017, we announced a $166 million investment in Lightspeed led by Caisse de depot et placement du Québec (“Caisse”). The investment included a
    $15 million line of credit from Silicon Valley Bank.

   

  On December 31, 2017, we acquired Crank Logic, Inc., a developer of business analytics and retail software solutions.

   

  Fiscal 2019

   

  On April 25, 2018, we announced the appointment of Brandon Nussey to the role of Chief Financial Officer.

   

  On June 19, 2018, we announced an integration between Lightspeed, accounting software, Intuit QuickBooks Online, and workforce collaboration platform, Planday, to
    bring a full-suite of powerful apps to businesses in the retail and hospitality space, empowering them to grow and thrive. The resulting integrated service offering supports better business management from planning finances and organizing work
    schedules, to simplifying merchant-to-customer transactions.

   

  
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  On October 16, 2018, we announced the unveiling of our Retail Success Index, an industry-validated questionnaire for small and medium-sized retailers to evaluate and
    score their businesses relative to peers in order to gain new insights and windows for advancement.

   

  On November 13, 2018, we announced the appointment of Patrick Pichette, Marie-Josée Lamothe, Rob Williams and Paul McFeeters to our Board. Each of Patrick Pichette,
    Marie-Josée Lamothe and Rob Williams had joined the Board on October 14, 2018 with Paul McFeeters appointment occurring on November 7, 2018.

   

  On December 11, 2018, we announced launch of Lightspeed Loyalty, a solution that enables Lightspeed customers to engage consumers, reward repeat business and build
    loyalty. The announcement came on the heels of our acquisition of cloud-based digital loyalty solutions provider, ReUp Technologies Inc., on July 18, 2018.

   

  On January 30, 2019, we announced the launch of Lightspeed Payments, our fully-integrated payments processing solution, for U.S.-based retailers. Lightspeed Payments
    reduces complexity for retailers by eliminating their need to deal with a separate payments provider and the related data reconciliation, and allowing them more accurate management of their businesses.

   

  On March 15, 2019, we announced the closing of our IPO of 17,250,000 subordinate voting shares at a price of C$16 per share for total gross proceeds of C$276 million,
    including exercise in full by the underwriters of their over-allotment option. The subordinate voting shares are listed on the TSX under the symbol “LSPD”.

   

  Fiscal 2020

   

  On April 2, 2019, we announced the closing of 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.

   

  On May 9, 2019, we completed the acquisition of Chronogolf Inc., the provider of a platform that leverages our retail and hospitality solutions to enable golf course
    operators to manage all aspects of their business including running the retail pro shop and the golf course restaurant, billing for memberships and optimizing tee-time bookings.

   

  On July 10, 2019, we announced the launch of the latest Lightspeed inventory release giving complex retail SMBs more mastery over inventory tracking across all of
    their omnichannel workflows, including tighter management over presales, back-orders, and overselling.

   

  On July 2, 2019, we completed the acquisition of iKentoo S.A., a Switzerland-based hospitality POS solutions provider, bringing us complementary technology
    well-suited for large and complex deployments and enabling us to further accelerate the displacement of legacy providers globally.

   

  On July 24, 2019, we announced the appointment of Jim Texier to the role of Chief Product Officer.

   

  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.

   

  On August 22, 2019, we announced the closing of a secondary offering by the Principal Shareholders (as defined below), iNovia Capital funds and certain of our
    officers of 6,209,542 subordinate voting shares at a price of C$35 per share for total gross proceeds to the selling shareholders of C$217,333,970, including exercise in full by the underwriters of their over-allotment option.

   

  On September 24, 2019, we announced the launch of Lightspeed Retail 3.0, the newest version of our core retail platform. Key features behind the faster and more
    streamlined user experience included a sleek new design, simplified navigation capabilities, more mobile-friendly functionality, and a more seamless sales workflow engine designed to optimize the selling process in complex retail environments.

   

  On October 20, 2019, we announced the acquisition of Kounta Holdings Pty Ltd, a rapidly-growing cloud-based POS solutions platform provider to small and medium-sized
    hospitality businesses in Australia and New Zealand. The acquisition closed on November 1, 2019.

   

  
    19 

    
      
 

  

  On January 7, 2020, we announced the acquisition of Gastrofix, a premier cloud-based hospitality POS solution provider, providing us with further global scale in
    Europe’s largest economy. We drew down $30,000,000 from our stand-by acquisition term loan with the Canadian Imperial Bank of Commerce on January 2, 2020 to fund part of the acquisition.

   

  On February 6, 2020, we announced that extended capabilities for Lightspeed Payments available to U.S. retailers, including a broader range of device types, improved
    reporting and an overall faster checkout experience. We also announced the commencement of the initial rollout of Lightspeed Payments to U.S. hospitality and Canadian retail customers.

   

  On February 27, 2020, we announced the closing of a bought deal offering of 7,717,650 subordinate voting shares at a price of C$37.30 per share for total gross
    proceeds of C$287,868,345, including exercise in full by the underwriters of their over-allotment option. The offering consisted of a total of 4,695,000 subordinate voting shares issued from treasury and sold by us for gross proceeds of C$175,123,500
    and 3,022,650 subordinate voting shares were sold by selling shareholders for aggregate gross proceeds of C$112,744,845.

   

  On March 3, 2020, we announced the appointment of Marty Reaume to the role of Chief People Officer.

   

  On March 12, 2020, we successfully invoked our business continuity plan and announced to our employees that, with effect on March 16, 2020, employees in all of our
    global offices would be asked to work from in response to the COVID-19 Pandemic.

   

  On March 23, 2020, we announced a number of resources and initiatives aimed at supporting our customers through the COVID-19 Pandemic.

   

  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.

   

  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.

   

  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 on our employees, customers, vendors, partners and other stakeholders, and also evaluating actions being taken by governments globally
    to manage the spread of COVID-19 and the economic impact. 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. We expect
    that our financial results for the first quarter of 2020 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. See also “The COVID-19 Pandemic is adversely
    affecting and is expected to continue to adversely affect our business, operating results and financial condition and this adverse affect could be material” under “Risk Factors” in this AIF.

   

  
    20 

    
      
 

  

  

  

   

  RISK FACTORS

   

  In addition to all other information set out in this AIF, as well as our Management’s
        Discussion and Analysis for Fiscal 2020 and our audited financial statements and related notes thereto for Fiscal 2020, the following specific factors could materially adversely affect us and/or our business, financial condition and results of
        operations. Other risks and uncertainties that we do not presently consider to be material, or of which we are not presently aware, may also become important factors that affect our future business, financial condition and results of operations.
        The occurrence of any of these risks could materially and adversely affect our business, prospects, financial condition, results of operations or cash flow. This AIF also contains forward-looking statements that involve risks and uncertainties. Our
        actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors including the risks described below. See “Forward Looking Information”. 

   

  Risks Related to Our Business and Industry 

   

  The COVID-19 Pandemic is adversely affecting and is expected to continue to adversely
          affect our business, operating results and financial condition and this adverse affect could be material.

   

  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, and 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.

   

  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. The duration and severity of the COVID-19 Pandemic may also have the effect of heightening many of the other risks described herein, such
      as risks relating to our rapid growth and growth strategy, our ability to achieve profitability, payments processed through our platforms and our risk management efforts in connection therewith, our reliance on certain suppliers and strategic
      partners, our international sales, cybersecurity and data protection, our internal controls, our ability to attract and retain employees, our ability to obtain insurance on favorable terms, our access to capital, and the provisions of our debt
      instruments. 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.

   

  
    21

    
      
 

  

   

  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.

   

  Our rapid growth may not be sustainable and depends on our ability to attract new
          customers, retain revenue from existing customers and increase sales to both new and existing customers. 

   

  We generate revenue primarily from the sale of cloud-based software subscriptions and
      licenses and other recurring revenue sources including payments solutions for both retailers and restaurants. In addition, we offer a variety of hardware and other services to provide value-added support to our customers and supplement our software
      and payments revenue solutions. Subscription-based revenues are principally realized through the sale of subscription licenses to our retail and hospitality customers. Our subscription plans typically have a one-year or multi-year term, although some
      of our customers have month-to-month subscription terms. Our customers generally have no long-term obligation to renew their subscriptions, and the difficulty and costs associated with switching to a competitor may not be significant for many of our
      customers. As a result, even though the number of customers using our platform has grown rapidly in recent years, there can be no assurance that we will be able to attract new customers or retain existing customers. We have historically experienced
      customer turnover as a result of our focus on SMBs, which are more susceptible than larger businesses to changes in general economic conditions and other risks affecting their businesses. Our costs associated with subscription renewals are
      substantially lower than costs associated with generating revenue from new customers or costs associated with generating sales of additional solutions to existing customers. Therefore, if we are unable to retain revenue from existing customers or if
      we are unable to increase revenues from existing customers, even if such losses are offset by an increase in new customers or an increase in other revenues, our operating results could be adversely impacted.

   

  We may also fail to attract new customers, retain revenue from existing customers or
      increase sales to both new and existing customers as a result of a number of other factors, including:

   

  		•	reductions in our current or potential customers’ spending levels;

   

  		•	competitive factors affecting the SaaS market, including the introduction or innovation of competing
            platforms, discount pricing and other strategies that may be implemented by our competitors;

   

  		•	global political, economic, social and environmental risks that may impact our operations or our customers’ operations
            and/or decrease consumer spending, including pandemics such as the COVID-19 Pandemic (which is adversely affecting and is expected to continue to adversely affect our business, operating results and financial condition) and other global health
            emergencies, natural disasters, acts or threats of war or terrorism and other general security concerns;

   

  		•	our ability to execute on our growth strategy and operating plans;

   

  		•	a decline in the market share of SMBs relative to large enterprises;

   

  		•	a decline in our customers’ level of satisfaction with our platform and customers’ usage of our platform;

   

  		•	changes in our relationships with third parties, including our suppliers, app developers, theme
            designers, referral sources, resellers, payments processors, installation partners and other partners;

   

  		•	the timeliness and success of new products and services we may offer in the future;

   

  		•	concerns relating to actual or perceived privacy or security breaches;

   

  		•	the frequency and severity of any system outages;

   

  		•	technological changes or problems; and

   

  		•	our focus on long-term value over short-term results,

   

  meaning that we may make strategic decisions that may not maximize our short-term revenue or
      profitability if we believe that the decisions are consistent with our mission and will improve our financial performance over the long-term.

   

  Additionally, we anticipate that our growth rate will decline over time to the extent that
      the number of customers using our platform increases and we achieve higher market penetration rates. As our growth rate declines, investors’ perception of our business may be adversely affected and the trading price of our subordinate voting shares
      could decline as a result. To the extent our growth rate slows, our business performance will become increasingly dependent on our ability to retain revenue from existing customers and increase sales to existing customers.

   

  
    22

    
      
 

  

   

  We may not be able to successfully implement our growth strategy on a timely basis or at all. 

   

  Our future growth, profitability and cash flows depend upon our ability to successfully
      implement our growth strategy, which, in turn, is dependent upon a number of factors, including our ability to:

   

  		•	expand our customer base;

   

  		•	accelerate the rollout of Lightspeed Payments;

   

  		•	support growth of existing customers;

   

  		•	enhance our platform; and

   

  		•	selectively pursue acquisitions.

   

  There can be no assurance that we can successfully achieve any or all of the above
      initiatives in the manner or time period that we expect. Further, achieving these objectives will require investments which may result in short-term costs without generating any current revenue and therefore may be dilutive to our earnings. We cannot
      provide any assurance that we will realize, in full or in part, the anticipated benefits we expect our strategy will achieve. The failure to realize those benefits could have a material adverse effect on our business, financial condition and results
      of operations.

   

  The impact of worldwide economic conditions such as the COVID-19 Pandemic, including
          the resulting effect on the operations of and spending by SMBs and on consumer spending, may adversely affect our business, operating results and financial condition. 

   

  A significant majority of the customers that use our platforms are SMBs and many of our
      customers are in the entrepreneurial stage of their development. Our performance is subject to worldwide economic conditions and global events, including political, economic, social and environmental risks that may impact our operations or our
      customers’ operations and/or decrease consumer spending. Conditions and events such as pandemics like the COVID-19 Pandemic, other global health emergencies, natural disasters, acts or threats of war or terrorism and other general security concerns
      may impact the operations of and spending levels by SMBs and consumer spending levels. SMBs may be disproportionately affected by economic downturns. SMBs frequently have limited budgets and may choose to allocate their spending to items other than
      our platform, especially in times of economic uncertainty or recessions.

   

  Economic downturns may also adversely impact retail and restaurant sales, which could result
      in customers who use our platform going out of business or deciding to stop using our services in order to conserve cash. Moreover, our customers that run restaurants operate in an industry which is intensely competitive and subject to heightened
      exposure to economic conditions affecting consumer discretionary spending, resulting in overall risk and a rate of failure that are typically greater than for businesses generally.

   

  Weakening economic conditions may also adversely affect third parties, including suppliers
      and partners, with whom we have entered into relationships and upon whom we depend in order to operate and grow our business. Uncertain and adverse economic conditions may also lead to increased refunds and chargebacks, any of which could adversely
      affect our business.

   

  Our business could be harmed if we fail to manage our growth effectively. 

   

  The rapid growth we have experienced in our business places significant demands on our
      operational infrastructure. The scalability and flexibility of our platforms depend on the functionality of our technology and network infrastructure and its ability to handle increased traffic and demand for bandwidth. The growth in the number of
      customers using our platform and the number of requests processed through our platform has increased the amount of data that we process. Any problems with the transmission of increased data and requests could result in harm to our brand or
      reputation. Moreover, as our business grows, we will need to devote additional resources to improving our operational infrastructure and continuing to enhance its scalability in order to maintain the performance of our platform.

   

  Our growth has placed, and will likely continue to place, a significant strain on our
      managerial, administrative, operational, financial and other resources. We have grown from 734 employees, including part-time employees and interns, as at March 31, 2019 compared to over 1100 employees, including part-time employees and interns, as
      at March 31, 2020. We intend to further expand our overall business, including headcount, with no assurance that our revenues will continue to grow. As we grow, we will be required to continue to improve our operational and financial controls and
      reporting procedures and we may not be able to do so effectively. Furthermore, some members of our management do not have significant experience managing a large global business operation, so our management may not be able to manage such growth
      effectively. In managing our growing operations, we are also subject to the risks of over-hiring and/or overcompensating our employees and over-expanding our operating infrastructure. As a result, we may be unable to manage our expenses effectively
      in the future, which may negatively impact our gross profit or operating expenses.

   

  
    23

    
      
 

  

   

  In addition, we believe that an important contributor to our success has been our corporate
      culture, which we believe fosters innovation, teamwork and passion for our customers and a focus on attractive design and technologically advanced and well-crafted software. As a result of our rapid growth, a large portion of our employees have been
      with us for fewer than two years. As we continue to grow and develop the infrastructure of a public company, we must effectively integrate, develop and motivate a growing number of new employees, some of whom are based in various countries around the
      world. In addition, we must preserve our ability to execute quickly in further developing our platforms and implementing new features and initiatives. As a result, we may find it difficult to maintain our corporate culture, which could limit our
      ability to innovate and operate effectively. Any failure to preserve our culture could also negatively affect our ability to recruit and retain personnel, to continue to perform at current levels or to execute on our business strategy effectively and
      efficiently. 

    

   

  We have a history of losses and we may be unable to achieve profitability. 

   

  We incurred net losses of $53.5 million in Fiscal 2020, $183.5 million in Fiscal 2019, and
      $96.2 million in Fiscal 2018. At March 31, 2020, we had an accumulated deficit of $513,479. These losses and accumulated deficit are a result of the substantial investments we made to grow our business and we expect to make significant expenditures
      to expand our business in the future. We expect to carefully monitor the impact of the COVID-19 Pandemic on our addressable market and to make opportunistic and deliberate investments in sales and marketing to attract new businesses to our platform,
      both in our existing core geographies and new markets around the world. We plan to increase our investment in research and development as we continue to introduce new products and services to extend the functionality of our platforms and innovate in
      response to changing regulations and consumer behaviours. We also intend to invest in maintaining our high level of customer service and support, which we consider critical for our continued success. We also expect to incur additional general and
      administrative expenses as a result of our growth. In order to support the continued growth of our business and to comply with continuously changing security and operational requirements, we plan to continue investing in our hosting and network
      infrastructure. We also plan to continue to selectively pursue acquisition opportunities, which require that we incur various expenses and fees of external advisors. These increased expenditures will make it harder for us to achieve profitability and
      we cannot predict whether we will achieve profitability in the near term or at all. Historically, our costs have increased each year due to these factors and we expect to continue to incur increasing costs to support our anticipated future growth. If
      the costs associated with acquiring new customers, including online advertising and paid search costs, or the terms on which our partners refer clients to us, materially rise in the future, our expenses may rise significantly. If we are unable to
      generate adequate revenue growth and manage our expenses, we may continue to incur significant losses and may not achieve or maintain profitability.

   

  We may make decisions that would reduce our short-term operating results if we believe those
      decisions will improve the experiences of our customers and their consumers and if we believe such decisions will improve our operating results over the long-term. These decisions may not be consistent with the expectations of investors and may not
      produce the long-term benefits that we expect, in which case our business may be materially and adversely affected.

   

  Our limited operating history in new and developing markets and new geographic regions
          makes it difficult to evaluate our current business and future prospects and may increase the risk that we will not be successful. 

   

  While we launched our first solution in 2005, the majority of our revenue growth has
      occurred in the past few years. We also operate in new and developing markets that may not develop as we expect. This limited operating history in new and developing markets and new geographic regions and recent rapid growth make it difficult to
      accurately assess our future prospects. You should consider our future prospects in light of the challenges and uncertainties that we face, including the fact that it may not be possible to discern fully the trends that we are subject to, and that
      elements of our business strategy are new and subject to ongoing development. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including increasing
      and unforeseen expenses as we continue to grow our business. If we do not manage these risks successfully, our business, results of operations and prospects will be harmed.

   

  Our future success will depend in part upon our ability to expand into new geographic
      regions, whether by acquisition or otherwise, and we will face risks entering markets in which we have limited or no experience and in which we do not have any brand recognition. It is costly to establish, develop and maintain international
      operations, and to promote our brand internationally. In addition, expanding into new geographic regions where foreign languages may be used will require substantial expenditures and take considerable time and attention, and we may not be successful
      enough in these new markets to recoup our investments in a timely manner, or at all. Our efforts to expand into new geographic regions may not be successful, which could limit our ability to grow our business.

   

  Our growth strategy involves accelerating the rollout of our payment processing
          solution, Lightspeed Payments, which may present risks and challenges that we have not yet experienced. 

   

  We introduced our payment processing solution, Lightspeed Payments, to our U.S. retail
      customers in January 2019, and we have recently begun offering it to Canadian retail customers as well as U.S. hospitality customers. We plan to make Lightspeed Payments an increasingly important part of our business as it is rolled out more broadly.
      Lightspeed Payments represents an entirely new line of business for our Company and accelerating its rollout is core to our growth strategy. However, we and our management have limited operating experience executing this strategy. This strategy has
      and will continue to require significant investment in cross-functional operations and management focus, along with investment in supporting technologies and people. Implementation of this strategy may also divert management’s attention from other
      aspects of our business and place a strain on our management, operational, development and financial resources, as well as our information systems. The rollout of Lightspeed Payments beyond the United States will also require us to comply with
      different and evolving laws governing payment processing, as well as the collection, storage and use of information on consumers involved in transactions. We may incur additional costs and operational challenges in complying with these laws, and
      differences in these laws may cause us to operate our businesses differently in different territories. If so, we may incur additional costs and may not fully realize the investment in our international expansion.

   

  
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  Further, we are internally developing certain solutions that form a part of Lightspeed
      Payments. Development of new solutions incorporating advanced technology is a complex process and subject to numerous uncertainties. Our success in developing such solutions will depend in part on our ability to develop them in a manner that keeps
      pace with continuing changes in technology, evolving industry standards, new solution and product introductions by competitors, changing client preferences and requirements and the interoperability of such solutions with our platforms, including the
      platforms of companies we acquire, and third-party developed portions thereof.

   

  In addition, we face competition from established payment processors offering existing and
      proven payment solutions. These payment processors and their product offerings benefit from a long history of market acceptance and familiarity as compared to Lightspeed Payments. Potential customers for Lightspeed Payments may be reluctant to adopt
      our solution over existing solutions, or may consider Lightspeed Payments as inferior to similar solutions offered by our competitors. Further, many of our customers currently rely on our existing integrated payments solutions, on which we achieve
      lower margins compared to Lightspeed Payments. Finally, the marketability of Lightspeed Payments could be significantly affected by changes in economic or market conditions or by the adoption of new payment technologies. There can be no assurance
      that our customers will adopt Lightspeed Payments over other competing payment solutions or our existing integrated payments solutions.

   

  If we are unable to provide a convenient and consistent payment experience for our
      customers, our ability to compete and our results of operations could be adversely affected. In addition, if the solutions we have incorporated into Lightspeed Payments do not appeal to our customers, reliably function as designed, or maintain the
      privacy and security of customer data, we may experience a loss of customer confidence or lost revenue, which could adversely affect our reputation and results of operations.

   

  If we fail to improve and enhance the functionality, performance, reliability, design,
          security and scalability of our platforms in a manner that responds to our customers’ evolving needs, our business may be adversely affected. 

   

  The markets in which we compete are characterized by constant change and innovation and we
      expect them to continue to evolve rapidly. Our success has been based on our ability to identify and anticipate the needs of our customers and design platforms that provide them with the breadth of tools they need to operate and grow their
      businesses. Our ability to attract new customers, retain revenue from existing customers and increase sales to both new and existing customers will depend in large part on our ability to continue to improve and enhance the functionality, performance,
      reliability, design, security and scalability of our platform.

   

  We expect that new services and technologies applicable to the industries in which we
      operate will continue to emerge and evolve, including developments in POS, eCommerce and payments technology. Other potential changes are on the horizon as well, notably in the payments space, such as developments in blockchain, crypto-currencies and
      in tokenization, which replaces sensitive data (e.g., payment card information) with symbols (tokens) to keep data safe in the event of a breach. Similarly, there is rapid innovation in the provision of other products and services to businesses,
      including financial services and marketing services. These new services and technologies may be superior to, impair, or render obsolete the products and services we currently offer or the technologies we currently use to provide them. We have in the
      past, and may experience in the future, difficulties with software development that could delay or prevent the development, introduction or implementation of new solutions and enhancements. Software development involves a significant amount of time
      for our research and development team, as it can take our developers months to update, code and test new and upgraded solutions and integrate them into our platforms. We must also continually update, test and enhance our software platforms. For
      example, our design team spends a significant amount of time and resources incorporating various design enhancements, such as customized colors, fonts, content and other features, into our platform. The continual improvement and enhancement of our
      platforms requires significant investment and we may not have the resources to make such investment. Our improvements and enhancements may not result in our ability to recoup our investments in a timely manner, or at all. We may make significant
      investments in new solutions or enhancements that may not achieve expected returns. The success of any enhancement or new solution depends on several factors, including the timely completion and market acceptance of the enhancement or new solution.
      Our ability to develop new enhancements or solutions may also be inhibited by industry-wide standards, payment card networks, laws and regulations, resistance to change by customers, difficulties relating to integration or compatibility with
      third-party software or hardware, or third parties’ intellectual property rights.

   

  
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  Any new solution we develop or acquire might not be introduced in a timely or cost-effective
      manner and might not achieve the broad market acceptance necessary to generate significant revenue. Improving and enhancing the functionality, performance, reliability, design, security and scalability of our platform is expensive, time-consuming and
      complex, and to the extent we are not able to do so in a manner that responds to our customers’ evolving needs, our business, operating results and financial condition will be adversely affected.

   

  The introduction of Lightspeed Payments subjects us to regulatory requirements,
          payment card network rules, payment card transactions underwriting and other risks that could be costly and difficult to comply with or that could harm our business. 

   

  Our intention to accelerate the rollout of Lightspeed Payments, which is core to our growth
      strategy, subjects us to a number of risks related to payments processed through our platforms. These risks include, but are not limited to, the following:

   

  		•	we pay interchange and other fees, which may increase our operating expenses;

   

  		•	our payments processors may terminate their relationships with us, fine us or increase our operation
            costs, if we are unable to maintain our chargeback ratios at acceptable levels, if we violate card network rules or if we engage in any other business or activity that in the view of our payments processors may increase our risk profile;

   

  		•	increased costs and diversion of management time and effort and other resources to deal with
            fraudulent transactions, chargeback disputes and risk monitoring;

   

  		•	potential fraudulent or otherwise illegal activity by our customers, their consumers, developers,
            employees or third parties which could lead to increased liabilities, particularly as an increasing amount of our GTV is processed via eCommerce;

   

  		•	potential unpaid customer chargebacks and fees for which we must bear the loss;

   

  		•	restrictions on funds or required reserves or other forms of security related to payments;

   

  		•	data breaches involving credit card information, including security breaches of our customers’
            systems which could lead to increased liabilities; and

   

  		•	additional disclosure and other requirements, including new reporting regulations and new payment
            card network operating rules.

   

  We are required by our payments processors to comply with payment card network operating
      rules and those of the sponsor financial institution and we have agreed to reimburse our payments processors and the sponsor financial institutions for any fees or fines they are assessed by payment card networks as a result of any unpaid liabilities
      or rule violations by us or our customers. The payment card networks set and interpret the card rules and the sponsor financial institution can add to these rules. In addition, we face the risk that one or more payment card networks or other
      processors may, at any time, assess penalties against us or terminate our ability to accept credit card payments or other forms of online payments from customers, which would have an adverse effect on our business, financial condition and operating
      results.

   

  If we fail to comply with the rules and regulations adopted by the payment card networks, we
      would be in breach of our contractual obligations to our payments processors, sponsor financial institutions, financial institutions, partners and customers. Such failure to comply may subject us to fines, penalties, damages, higher transaction fees,
      increased security requirements and civil liability, and could eventually prevent us from processing or accepting payment cards or could lead to a loss of payment processor partners, even if there is no compromise of customer information.

   

  We are currently subject to a variety of laws and regulations in the United States, Canada
      and elsewhere related to payment processing, including those governing cross-border and domestic money transmission, gift cards and other prepaid access instruments, electronic funds transfers, taxation reporting requirements, contract disclosure
      requirements, foreign exchange, anti-money laundering, counter-terrorist financing, privacy and data protection, banking and import and export restrictions. Depending on how our platform and our other customer solutions evolve, and as we expand
      Lightspeed Payments to new geographies, we expect to become subject to additional laws, either in existing or new jurisdictions. In some jurisdictions, the application or interpretation of these laws and regulations is not clear. Our efforts to
      comply with these laws and regulations could be costly and result in diversion of management time and effort and may still not guarantee compliance. In the event that we are found to be in violation of any such legal or regulatory requirements, we
      may be subject to monetary fines or other penalties such as a cease and desist order, or we may be required to make changes to our platform, any of which could have an adverse effect on our business, financial condition and results of operations.

   

  
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  Our risk management efforts in connection with the processing of payments may not be
          effective, which could expose us to losses and liability and otherwise harm our business. 

   

  As Lightspeed Payments grows, greater efforts will be required to vet and monitor our
      customers and to determine whether the transactions we process for them are legitimate. If our solutions are used to process illegitimate transactions, we will be expected to settle those funds to customers and may be unable to recover them and may
      suffer losses and liability. These types of illegitimate transactions can also expose us to governmental and regulatory scrutiny. The highly automated nature of, and liquidity offered by, our payments services make us a target for illegal or improper
      uses, including fraudulent or illegal sales of goods or services, money laundering, and terrorist financing Identity thieves and those committing fraud using stolen or fabricated credit card or bank account numbers, or other deceptive or malicious
      practices, potentially can steal significant amounts of money from our customers, which amounts we may be required to absorb. In configuring our payments services, we face an inherent trade-off between security and customer convenience. Our risk
      management policies, procedures, techniques, and processes may not be sufficient to identify all of the risks to which we are exposed, to enable us to mitigate the risks we have identified, or to identify additional risks to which we may become
      subject in the future. As a greater number of customers use our services, our exposure to material risk losses from a single customer, or from a small number of customers, will increase. In addition, when we introduce new services, focus on new
      business types, or begin to operate in markets where we have a limited history of fraud loss, we may be less able to forecast and reserve accurately for those losses. Furthermore, if our risk management policies and processes contain errors or are
      otherwise ineffective, we may suffer large financial losses and our business may be materially and adversely affected.

   

  Similarly, we may be exposed to risks associated with chargebacks and refunds in connection
      with payment card fraud or relating to the goods or services provided by our customers. In the event that a billing dispute between a cardholder and a customer is not resolved in favor of the customer, including in situations where the customer
      engaged in fraud, the transaction is typically “charged back” to the customer and the purchase price is credited or otherwise refunded to the cardholder. If we are unable to collect chargeback or refunds from the customer’s account, or if the
      customer refuses to or is unable to reimburse us for a chargeback or refunds due to closure, bankruptcy, or other reasons, we may bear the loss for the amounts paid to the cardholder, in addition to corresponding fees and fines. While we have the
      right to do so, we do not typically collect and maintain reserves from our customers to cover these potential losses, and for customer relations purposes, we sometimes decline to seek reimbursement for certain chargebacks. The risk of chargebacks is
      typically greater with those of our customers that promise future delivery of goods and services, and that finalize sales in a card-not-present environment such as online or over the phone, which risk becomes increasingly significant as a greater
      amount of our GTV is processed via eCommerce. If we are unable to maintain our losses from chargebacks at acceptable levels, the payment card networks could fine us, increase our operating costs, or terminate our ability to process payment cards. Any
      increase in our operating costs could damage our business, and if we were unable to accept payment cards, our business would be materially and adversely affected.

   

  We rely on a limited number of suppliers to provide part of the technology we offer through Lightspeed
          Payments. 

   

  In order to provide Lightspeed Payments to our U.S. retail customers, we have entered into a
      payment facilitator merchant agreements with Worldpay, LLC (“Worldpay”). For our U.S. retail and hospitality customers, and our Canadian retail customers, we have similarly entered into merchant platform agreements with Stripe, Inc and Stripe
      Payments Canada, Ltd., respectively (collectively, “Stripe”). These three agreements provide for initial terms of three years, and then extend automatically for additional one-year terms unless (i) in the case of Worldpay, either party
      terminates the agreement on 90 days’ advance notice or otherwise in accordance with its terms; or (ii) in the case of the Stripe agreements, we terminate on 30 days’ advance notice or either party otherwise terminates in accordance with its terms.
      These agreements are of significant importance to Lightspeed Payments and any disruption or problems with Worldpay, Stripe or their respective services could have an adverse effect on our reputation, results of operations and financial results. If
      Worldpay and/or Stripe were to terminate their relationship with us, we could incur substantial delays and expenses in finding and integrating an alternative payment service provider into Lightspeed Payments, and the quality and reliability of such
      alternative payment service provider may not be comparable. Any long-term or permanent disruption in Lightspeed Payments would decrease our revenues from retail solutions, since our customers would be required to use one of our integrated payment
      processing solutions or a third-party payment provider.

   

  Security breaches, denial of service attacks, or other hacking and phishing attacks on
          our systems or other security breaches, including internal security failures, could harm our reputation or subject us to significant liability, and adversely affect our business and financial results. 

   

  We operate in an industry that is prone to cyber attacks. Failure to prevent or mitigate
      security breaches and improper access to or disclosure of our data, customer data, or the data of their consumers, could result in the loss or misuse of such data, which could harm our business and reputation. The security measures we have integrated
      into our internal networks and platforms, which are designed to prevent or minimize security breaches, may not function as expected or may not be sufficient to protect our internal networks and platforms against certain attacks. In addition,
      techniques used to sabotage or to obtain unauthorized access to networks in which data is stored or through which data is transmitted change frequently. As a result, we may be unable to anticipate these techniques or implement adequate preventative
      measures to prevent an electronic intrusion into our networks. While we have established a cyber attack remediation plan to enable us to assess and respond to such attacks, there can be no assurance that the measures set forth under such plan will be
      adequate in all circumstances nor that they will be effective in mitigating, or allowing us to recover from, the effects of such attacks.

   

  
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  Our customers’ storage and use of data concerning their stores and restaurants and their
      consumers is essential to their use of our platforms, which stores, transmits and processes our customers’ proprietary information and personal information relating to them and their clients. If a security breach were to occur, as a result of
      third-party action, employee error, breakdown of our internal security processes and procedures, malfeasance or otherwise, and the confidentiality, integrity or availability of our customers’ data was disrupted, we could incur significant liability
      to our customers and to individuals whose information was being stored by our customers, and our platforms may be perceived as less desirable, which could negatively affect our business and damage our reputation.

   

  Our platforms and third-party applications available on, or that interface with, our
      platforms may be subject to distributed denial of service attacks (“DDoS”), a technique used by hackers to take an internet service offline by overloading its servers, and we cannot guarantee that applicable recovery systems, security
      protocols, network protection mechanisms and other procedures are or will be adequate to prevent network and service interruption, system failure or data loss. In addition, computer malware, viruses, and hacking and phishing attacks by third parties
      are prevalent in our industry. We have experienced such attacks in the past and may experience such attacks in the future. As a result of our increased visibility, we believe that we are increasingly a target for such breaches and attacks.

   

  Moreover, our platforms and third-party applications available on, or that interface with,
      our platforms could be breached if vulnerabilities in our platforms or third-party applications are exploited by unauthorized third parties or due to employee error, breakdown of our internal security processes and procedures, malfeasance, or
      otherwise. Further, third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as user names, passwords or other information or otherwise compromise the security of our internal networks,
      electronic systems and/or physical facilities in order to gain access to our data or our customers’ data. Since techniques used to obtain unauthorized access change frequently and the size and severity of DDoS attacks and security breaches are
      increasing, we may be unable to implement adequate preventative measures or stop DDoS attacks or security breaches while they are occurring. In addition to our own platforms and applications, some of the third parties we work with may receive
      information provided by us, by our customers, or by our customers’ clients through web or mobile applications integrated with Lightspeed. If these third parties fail to adhere to adequate data security practices, or in the event of a breach of their
      networks, our own and our customers’ data may be improperly accessed, used or disclosed.

   

  Any actual or perceived DDoS attack or security breach could damage our reputation and
      brand, expose us to a risk of litigation and possible liability and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the DDoS attack or security breach. Some jurisdictions have enacted
      laws requiring companies to notify individuals and authorities of data security breaches involving certain types of personal or other data and our agreements with certain customers and partners require us to notify them in the event of a security
      incident. Similarly, if our suppliers experience data breaches and do not notify us or honor their notification obligations to authorities or users, we could be held liable for the breach. We may not be in a position to assess whether a data breach
      at one of our suppliers would trigger an obligation or liability on our part. Such mandatory disclosures are costly, could lead to negative publicity, and may cause our customers to lose confidence in the effectiveness of our data security measures.
      Moreover, if a high profile security breach occurs with respect to another SaaS provider, customers may lose trust in the security of the SaaS business model generally, which could adversely impact our ability to retain revenue from existing
      customers or attract new ones. Similarly, if a high profile security breach occurs with respect to a retailer or eCommerce platform, customers may lose trust in eCommerce more generally, which could adversely impact our customers’ businesses. Any of
      these events could harm our reputation or subject us to significant liability, and materially and adversely affect our business and financial results.

   

  System failures, interruptions, delays in service, catastrophic events, inadequate
          infrastructure and resulting interruptions in the availability or functionality of our platforms could harm our reputation or subject us to significant liability, and adversely affect our business and financial results. 

   

  Our brand, reputation and ability to attract, retain and serve our customers are also
      dependent upon the reliable performance of our platforms, including our underlying technical infrastructure. Our platforms are mission critical for our customers who rely on them to manage their businesses and the data collected in connection
      therewith, including transaction records, information about inventory and customers and other important business information and data. Our systems, those of our third-party data center facilities and those of our payment partners may experience
      service interruptions, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks and other geopolitical unrest, computer
      viruses, or other events. Our systems are also subject to break-ins, sabotage, and acts of vandalism. Our platforms and technical infrastructure may not be adequately designed with sufficient reliability and redundancy and our disaster recovery
      planning, which includes using geographically distinct and multi-region data centers, may not be sufficient to avoid performance delays or outages that could be harmful to the businesses of our customers and our business. We are in the process of
      implementing a formal disaster recovery program to document our processes for moving our systems to back-up data centers in the event of a catastrophe; however, our capabilities to do this in the event of a catastrophe may not be sufficient for all
      eventualities. In addition, as a provider of payments solutions, we are subject to increased scrutiny by regulators that may require specific business continuity and disaster recovery plans and more rigorous testing of such plans. This increased
      scrutiny may be costly and time-consuming and may divert our resources from other business priorities.

   

  
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  We have in the past experienced and may in the future experience service interruptions which
      disrupt the availability or reduce the speed or functionality of one or more of our platforms. These events have resulted and likely will result in loss of revenue. In addition, they could result in significant expense to repair or replace damaged
      equipment and remedy resultant data loss or corruption. A prolonged interruption in the availability or reduction in the speed or other functionality of any of our platforms could materially harm our reputation and business. Frequent or persistent
      interruptions in access to functionality of any of our platforms could cause our customers to believe that our platforms are unreliable. If any of our platforms is unavailable when our customers attempt to access it, or if any of our platforms do not
      perform to expected levels, especially during peak periods for our customers, such as the holiday shopping season, our customers may cease to use our platforms entirely. Moreover, to the extent that any system failure or similar event results in
      damages to customers or their businesses, these customers could seek compensation from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly to address. While we have implemented measures intended to
      prevent or mitigate such interruptions, there can be no assurance that such measures will successfully prevent service interruptions in the future.

   

  A significant natural disaster could have a material and adverse effect on our business.
      Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems at our headquarters or the data centers of our service providers could result in lengthy interruptions in access to or functionality of our
      platforms or could result in related liabilities.

   

  We store personal and other information of our partners, our customers and their
          consumers and our employees. If the security of this information is compromised or is otherwise accessed without authorization, our reputation may be harmed and we may be exposed to liability and loss of business. 

   

  We store personal information and other confidential information of our partners and our
      customers, and may also store credit card information of our customers. We also collect and maintain personal information of our employees. Third-party software applications integrated with Lightspeed and the third-party applications available on our
      platforms may also store personal information and/or other confidential information. We do not regularly monitor or review the content that our customers upload and store, or the information provided to us through the applications integrated with our
      platforms, and, therefore, we do not control the substance of the content hosted within our platforms, which may include personal information. Additionally, we use third-party service providers and subprocessors to help us deliver services to
      customers and their consumers. These service providers and subprocessors may store personal information, credit card information and/or other confidential information. We have in the past experienced and may in the future experience successful
      attempts by third parties to obtain unauthorized access to the personal information of our partners, our customers and our customers’ consumers, and events or situations as a result of which this information was or could be exposed through human
      error, malfeasance or otherwise. The unauthorized or inadvertent release or access, or other compromise of this information could have a material adverse effect on our business, financial condition and results of operations. Even if such a data
      breach were to affect one or more of our competitors or our customers’ competitors, rather than us, the resulting consumer concern could negatively affect our customers and/or our business.

   

  We are also subject to federal, state, provincial and foreign laws regarding cybersecurity
      and the protection of data. The regulatory framework in Canada, the United States, Europe and many other jurisdictions in respect of privacy issues is constantly evolving and is likely to remain uncertain for the foreseeable future. For example, the
      GDPR became effective in May 2018 and replaced the data protection laws of each member state of the European Union. The GDPR significantly increased penalties for non-compliance with European data protection regulations. The interpretation and
      application of such laws is often uncertain and such laws may be interpreted and applied in a manner inconsistent with our current policies and practices or require us to make changes to our platforms. Some jurisdictions, including Canada, U.S.
      states and the European Union, among others, have enacted laws requiring companies to notify individuals and authorities of security breaches involving certain types of personal and other information and our agreements with certain customers and
      partners require us to notify them in the event of a security incident. Similarly, if our suppliers experience data breaches and do not notify us or honor their notification obligations to authorities or users, we could be held liable for the breach.
      We may not be in a position to assess whether a data breach at one of our suppliers would trigger an obligation or liability on our part. Additionally, some jurisdictions, as well as our contracts with certain customers, require us to use
      industry-standard or reasonable measures to safeguard personal information or confidential information, and thereby mitigate the risk of a security incident. These laws, which tend to focus around individuals’ financial and payment related
      information, are increasingly relevant to us, as we have started to process more information from our customers’ clients through our platform.

   

  Our failure to comply with legal or contractual requirements around the security of personal
      information could lead to significant fines and penalties imposed by regulators, as well as claims by our partners, our customers and their consumers, our employees or other relevant stakeholders. These proceedings or violations could force us to
      spend money in defense or settlement of these proceedings, result in the imposition of monetary liability or injunctive relief, diversion of management’s time and attention, increase our costs of doing business, and materially adversely affect our
      reputation and the demand for our solutions.

   

  
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  In addition, while we employ security measures to protect any credit card information that
      we may collect and store, such as encryption and authentication technology licensed from third parties, advances in computer capabilities, new discoveries in the field of cryptography and other developments may result in a compromise or breach of the
      technology we use to protect credit card information. If our security measures fail to protect credit card information adequately, we could be liable to our partners or our customers for their losses. As a result, we could be subject to fines, we
      could face regulatory or other legal action, and our customers could end their relationships with us. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from any
      such liabilities or damages with respect to any particular claim. In addition, while we carry insurance against cybersecurity risks that we consider appropriate, we cannot be sure that our existing insurance coverage and coverage for errors and
      omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims, or that our insurers will not deny coverage as to any future claim. The successful assertion of one or more
      large claims against us that exceeds our available insurance coverage, or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business,
      financial condition and results of operations.

   

  Our business is susceptible to risks associated with international sales and the use of our platform in
          various countries. 

   

  We currently have customers in more than 100 countries and we expect to continue to expand
      our international operations in the future. However, our international sales and the use of our platform in various countries subject us to risks that we do not generally face with respect to domestic sales within North America. These risks include,
      but are not limited to:

   

  		•	greater difficulty in enforcing contracts, including our universal terms of service and other agreements;

   

  		•	lack of familiarity and burdens and complexity involved with complying with multiple, conflicting
            and changing foreign laws, standards, regulatory requirements, tariffs, export controls and other barriers;

   

  		•	difficulties in ensuring compliance with countries’ multiple, conflicting and changing international
            trade, customs and sanctions laws;

   

  		•	data privacy laws which may require that customer and consumer data be stored and processed in a designated territory;

   

  		•	difficulties in managing systems integrators and technology partners;

   

  		•	different technology standards;

   

  		•	potentially adverse tax consequences, including the complexities of foreign value-added tax (or
            other tax) systems and restrictions on the repatriation of earnings;

   

  		•	uncertain political and economic climates and increased exposure to global political, economic, social and environmental
            risks that may impact our operations or our customers’ operations and/or decrease consumer spending, including pandemics such as the COVID-19 Pandemic (which is adversely affecting and is expected to continue to adversely affect our business,
            operating results and financial condition) and other global health emergencies, natural disasters, acts or threats of war or terrorism and other general security concerns;

   

  		•	difficulties in ensuring compliance with government regulations of eCommerce and other services,
            which could lead to lower adoption rates, and potentially restrictive governmental actions, and restrictions on foreign ownership;

   

  		•	fiscal recording requirements on retailers, restaurants and other businesses;

   

  		•	lower levels of credit card usage and increased payment risks;

   

  		•	currency exchange rates;

   

  		•	reduced or uncertain protection for intellectual property rights in some countries;

   

  		•	new and different sources of competition;

   

  		•	reduced demand for our platform at historical price points;

   

  		•	lower levels of consumer spending; and

   

  		•	restricted access to and/or lower levels of use of the internet.

   

  
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  These factors may cause our international costs of doing business to exceed our comparable domestic costs and may
      also require significant management attention and financial resources. Any negative impact from our international business efforts could adversely affect our business, results of operations and financial condition.

   

  Our use of “open source” software could negatively affect our ability to sell our solutions and subject us
          to possible litigation. 

   

  Our solutions incorporate and are dependent to a significant extent on the use and
      development of “open source” software, and we intend to continue our use and development of open source software in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses and is
      typically freely accessible, usable and modifiable. Pursuant to such open source licenses, we may be subject to certain conditions, including requirements that we offer our proprietary software that incorporates the open source software for no cost,
      that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of the particular open source
      license. If an author or other third-party that uses or distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses
      defending against such allegations and could be subject to significant damages, enjoined from the sale of our solutions that contained or are dependent upon the open source software and required to comply with the foregoing conditions, which could
      disrupt the distribution and sale of some of our solutions. Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition or require us to devote additional research and development resources to
      change the affected platform. The terms of many open source licenses to which we are subject have not been interpreted by U.S., Canadian or foreign courts. Accordingly, there is a risk that terms of these licenses could be construed in a manner that
      imposes unanticipated conditions or restrictions on our ability to commercialize our solutions. The potential impact of these terms on our business is therefore uncertain and may result in unanticipated obligations regarding our solutions and
      technologies. It is our view that we do not distribute most of our software, since no installation of our software is necessary for many of our solutions and parts of our platform are accessible solely through the “cloud”. Nevertheless, this position
      could be challenged. Any requirement to disclose our proprietary source code, termination of open source license rights or payments of damages for breach of contract could be harmful to our business, results of operations or financial condition, and
      could help our competitors develop products and services that are similar to or better than ours.

   

  In addition to risks related to license requirements, usage of open source software can lead
      to greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties, controls on the origin or development of the software, or remedies against the licensors. Many of the risks associated
      with usage of open source software cannot be eliminated and could adversely affect our business.

   

  Although we believe that we have complied with our obligations under the various applicable
      licenses for open source software, it is possible that we may not be aware of all instances where open source software has been incorporated into our proprietary software or used in connection with our solutions or our corresponding obligations under
      open source licenses. We do not have robust open source software usage policies or monitoring procedures in place. We rely on multiple software programmers to design our proprietary software and we cannot be certain that our programmers have not
      incorporated open source software into our proprietary software that we intend to maintain as confidential or that they will not do so in the future. To the extent that we are required to disclose the source code of certain of our proprietary
      software developments to third parties, including our competitors, in order to comply with applicable open source license terms, such disclosure could harm our intellectual property position, competitive advantage, results of operations and financial
      condition. In addition, to the extent that we have failed to comply with our obligations under particular licenses for open source software, we may lose the right to continue to use and exploit such open source software in connection with our
      operations and solutions, which could disrupt and adversely affect our business.

   

  We rely on computer hardware, purchased or leased, and software licensed from and
          services rendered by third parties in order to run our business. 

   

  We rely on computer hardware, purchased or leased, and software licensed from and services
      rendered by third parties in order to run our business. Third-party hardware, software and services may not continue to be available on commercially reasonable terms, or at all. Any loss of the right to use or any failures of third-party hardware,
      software or services could result in delays in our ability to run our business until equivalent hardware, software or services are developed by us or, if available, identified, obtained and integrated, which could be costly and time-consuming and may
      not result in an equivalent solution, any of which could cause an adverse effect on our business and operating results. Further, customers could assert claims against us in connection with service disruptions or cease conducting business with us
      altogether. Even if not successful, a claim brought against us by any of our customers would likely be time-consuming and costly to defend and could seriously damage our reputation and brand, making it harder for us to sell our solutions.

   

  
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  Third-party hardware that we sell to our customers is generally procured from a single
          or limited number of suppliers. Thus, we are at risk of shortages, price increases, changes, delays or discontinuations of hardware, which could disrupt and materially adversely affect our business. 

   

  Many of our solutions require or benefit from the use of third-party hardware products that
      we sell to customers in both the retail and hospitality segments, such as our customer-facing display, receipt printers, cash drawers, servers, stands, barcode scanners, payment terminals and an assortment of accessories. A number of such products –
      including, for example, Lite Servers, which are offered as part of our restaurant hardware kits, or payment terminals used in connection with Lightspeed Payments – come from limited or single sources of supply. To date, we have not
      identified alternative suppliers for many of the single-sourced hardware products sold to our customers. Due to our reliance on the products produced by such single-source suppliers, we are subject to the risk of shortages and long lead times in the
      supply of certain products. For instance, hardware used as part of Lightspeed Payments must meet stringent certification requirements in addition to being compatible with the technical specifications of the payment system with which it must
      interface, thus rendering sourcing of such hardware difficult and potentially time-consuming.

   

  We have in the past experienced, and may in the future experience, product shortages or
      delays or other hardware problems, and the availability of such products may be difficult to predict. Additionally, various sources of supply-chain risk, including strikes or shutdowns at delivery ports or loss of or damage to hardware products while
      they are in transit or storage, could limit the supply of such products. In the event of a shortage or supply interruption from our hardware suppliers, we may not be able to develop alternate sources quickly, cost-effectively, or at all. Any
      interruption or delay in product supply, any increases in product costs, or the inability to obtain these products from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to provide such products to
      our customers on a timely basis. This could harm our relationships with our customers, prevent us from acquiring new customers, and materially and adversely affect our business.

   

  Our business is highly competitive. We may not be able to compete successfully against current and future
          competitors. 

   

  We face competition in various aspects of our business and we expect such competition to
      intensify in the future as existing and new competitors introduce new services or enhance existing services. We have competitors with longer operating histories, larger customer bases, greater brand recognition, greater experience and more extensive
      commercial relationships in certain jurisdictions, and greater financial, technical, marketing and other resources than we do. Our potential new or existing competitors may be able to develop products and services better received by customers or may
      be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, regulations or customer requirements. In addition, some of our larger competitors may be able to leverage a larger installed customer base and
      distribution network to adopt more aggressive pricing policies and offer more attractive sales terms, which could cause us to lose potential sales or to sell our solutions at lower prices.

   

  Competition may intensify as our competitors enter into business combinations or alliances
      or raise additional capital, or as established companies in other market segments or geographic markets expand into our market segments or geographic markets. For instance, certain competitors could use strong or dominant positions in one or more
      markets to gain a competitive advantage against us in areas where we operate including: by integrating competing platforms or features into products they control such as search engines, web browsers, mobile device operating systems or social
      networks; by making acquisitions; or by making access to our platforms more difficult. Further, current and future competitors could choose to offer a different pricing model or to undercut prices in an effort to increase their market share. We also
      expect new entrants to offer competitive services. If we cannot compete successfully against current and future competitors, our business, results of operations and financial condition could be negatively impacted.

   

  If our software contains serious errors or defects, we may lose revenue and market acceptance and may incur
          costs to defend or settle claims with our customers. 

   

  Software such as ours often contains errors, defects, security vulnerabilities or software
      bugs that are difficult to detect and correct, particularly when first introduced or when new versions or enhancements are released. Despite internal testing, our platform may contain serious errors or defects, security vulnerabilities or software
      bugs that we may be unable to successfully correct in a timely manner or at all, which could result in lost revenue, significant expenditures of capital, a delay or loss in market acceptance and damage to our reputation and brand, any of which could
      have an adverse effect on our business, financial condition and results of operations. Furthermore, our platforms are multi-tenant cloud-based systems that allow us to deploy new versions and enhancements to all of our customers simultaneously. To
      the extent we deploy new versions or enhancements that contain errors, defects, security vulnerabilities or software bugs to all of our customers of a single platform simultaneously, the consequences would be more severe than if such versions or
      enhancements were only deployed to a smaller number of our customers.

   

  Since our customers use our services for processes that are critical to their businesses,
      errors, defects, security vulnerabilities, service interruptions or software bugs in our platforms could result in losses to our customers. Our customers may seek significant compensation from us for any losses they suffer or cease conducting
      business with us altogether. Further, a customer could share information about bad experiences on social media, which could result in damage to our reputation and loss of future sales. There can be no assurance that provisions typically included in
      our agreements with our customers that attempt to limit our exposure to claims would be enforceable or adequate or would otherwise protect us from liabilities or damages with respect to any particular claim. Even if not successful, a claim brought
      against us by any of our customers would likely be time-consuming and costly to defend and could seriously damage our reputation and brand, making it harder for us to sell our solutions.

   

  
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  We may be unable to achieve or maintain data transmission capacity. 

   

  Customers using our platforms often draw significant numbers of consumers over short periods
      of time, including from events such as new product releases, holiday shopping seasons and flash sales, which significantly increases the traffic on our servers and the volume of transactions processed on the relevant platform. Our servers may be
      unable to achieve or maintain data transmission capacity high enough to handle increased traffic or process requests in a timely manner. Our failure to achieve or maintain high data transmission capacity could significantly reduce demand for our
      solutions. Further, as our customers grow and as we continue to attract larger customers, the volume of transactions processed on our platforms will increase, especially if such customers draw significant numbers of consumers over short periods of
      time. In the future, we may be required to allocate resources, including spending substantial amounts of money, to upgrade our technology and infrastructure in order to handle the increased load. Our ability to deliver our solutions also depends on
      the development and maintenance of internet infrastructure by third parties, including the maintenance of reliable networks with the necessary speed, data capacity and bandwidth. If one of these third parties suffers from capacity constraints, our
      business may be adversely affected.

   

  Our growth depends in part on the success of our strategic relationships with third parties. 

   

  We anticipate that the growth of our business will continue to depend on third-party
      relationships, including relationships with our service providers and suppliers, app developers, theme designers, referral sources, resellers, payments processors, installation partners and other partners. In addition to growing our third-party
      partner ecosystem, we have entered into agreements with, and intend to pursue additional relationships with, other third parties, such as shipping partners and technology and content providers. Identifying, negotiating and documenting relationships
      with third parties requires significant time and resources as does integrating third-party technology and content. Some of the third parties that sell our services have direct contractual relationships with the customers, and in these circumstances,
      we risk the loss of such customers if those third parties fail to perform their contractual obligations, including in the event of any such third party’s business failure. Our agreements with providers of cloud hosting, technology, content and
      consulting services are typically non-exclusive and do not prohibit such service providers from working with our competitors or from offering competing services. These third-party providers may choose to terminate their relationship with us or to
      make material changes to their businesses, products or services in a manner that is adverse to us.

   

  The success of our platforms depends, in part, on our ability to integrate third-party
      applications, themes and other offerings into our third-party ecosystem. Third-party developers may also change the features of their offering of applications and themes or alter the terms governing the use of their offerings in a manner that is
      adverse to us. If third-party applications and themes change such that we do not or cannot maintain the compatibility of our platforms with these applications and themes, or if we fail to provide third-party applications and themes that our customers
      desire to add to their businesses, demand for our platforms could decline. If we are unable to maintain technical interoperation, our customers may not be able to effectively integrate our platforms with other systems and services they use. We may
      also be unable to maintain our relationships with certain third-party vendors if we are unable to integrate our platforms with their offerings. In addition, third-party developers may refuse to partner with us or limit or restrict our access to their
      offerings. Such changes could functionally limit or terminate our ability to use these third-party offerings with our platforms, which could negatively impact our solution offerings and harm our business. If we fail to integrate our platforms with
      new third-party offerings that our customers need for their businesses, or to adapt to the data transfer requirements of such third-party offerings, we may not be able to offer the functionality that our customers and their clients expect, which
      would negatively impact our offerings and, as a result, harm our business.

   

  Further, our competitors may effectively incentivize third-party developers to favor our
      competitors’ products or services, which could diminish our prospects for collaborations with third-parties and reduce subscriptions to our platforms. In addition, providers of third-party offerings may not perform as expected under our agreements or
      under their agreements with our customers, and we or our customers may in the future have disagreements or disputes with such providers. If any such disagreements or disputes cause us to lose access to products or services from a particular supplier,
      or lead us to experience a significant disruption in the supply of products or services from a current supplier, especially a single-source supplier, they could have an adverse effect on our business and operating results.

   

  We rely to a significant extent on the integration of third-party payment processing solutions. 

   

  A portion of our customers use integrated payment processing solutions referred to them by
      us. Such solutions are provided by third-party payment processors who in many cases pay us a share of revenues derived from their relationship with our customer or referral fees. We rely to a significant extent on such third-party providers for
      purposes of providing our customers with comprehensive platform offerings. Given that the reliability of the payment facilities used by our customers is critical to the management of their businesses, any performance interruption, delay or failure
      affecting the payment processing solutions with which we integrate could harm our brand, reputation and ability to attract, retain and serve our customers. We have no control over the operations of our payment processing partners and our ability to
      expeditiously remediate any such performance interruption, delay or failure is limited. As we expand the availability of Lightspeed Payments, we expect that integrated payment processing solutions will remain in use with a number of customers over
      the foreseeable future. As such, if we fail to maintain integration partnerships with dependable third-party payment processors, we may not be able to offer an important functionality that our customers and their consumers expect, which would
      negatively impact our offerings and, as a result, harm our business and results of operations.

   

  
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  If we do not maintain the compatibility of our solutions with third-party applications
          and operating systems that our customers use or the fiscal recording requirements they are required to comply with in their business processes, demand for our solutions could decline. 

   

  Our solutions can be used alongside a wide range of other systems, such as enterprise
      software systems and business software applications used by our customers in their businesses. If we do not support the continued integration of our solutions with third-party applications, including through the provision of application programming
      interfaces that enable data to be transferred readily between our solutions and third-party applications, demand for our solutions could decline, and we could lose sales. We will also be required to make our solutions compatible with new or
      additional third-party applications that are introduced into the markets that we serve. We may not be successful in making our solutions compatible with these third-party applications, which could reduce demand for our solutions and adversely affect
      our revenues. In addition, prospective customers, especially large customers, may require heavily customized features and functions unique to their business processes. If prospective customers require customized features or functions that we do not
      offer, then the market for our solutions will be adversely affected. Further, while many of our solutions are platform agnostic, in certain cases the solutions we provide require the use of products sold by particular suppliers. Demand for our
      solutions and our resulting revenues are therefore partially dependent on the success, prevalence and adoption of such suppliers’ products by our customers.

   

  In addition, certain jurisdictions have introduced and other jurisdictions may introduce in
      the future fiscal recording requirements on retailers, restaurants and other businesses, such as the mandatory use of sales recording modules. If our POS platform and other solutions fail to comply or to support our customers’ compliance with fiscal
      recording requirements applicable in a jurisdiction, we may be unable to attract or retain customers in such jurisdiction, which would harm our business.

   

  Our business and prospects would be harmed if changes to technologies used in our
          platform or new versions or upgrades of operating systems and internet browsers adversely impact the process by which our customers and their consumers interface with our platform. 

   

  We believe the simple and straightforward interface for our platforms has helped us to
      expand and offer our solutions to customers with limited technical expertise. In the future, providers of internet browsers could introduce new features that would make it difficult for customers to use our platforms. In addition, internet browsers
      for desktop, tablets or mobile devices could introduce new features, change existing browser specifications such that they would be incompatible with our platforms, or prevent consumers from accessing our customers’ businesses. Any changes to
      technologies used in our platforms, to existing features that we rely on, or to operating systems or internet browsers that make it difficult for customers to access our platforms or consumers to access our customers’ businesses, may make it more
      difficult for us to maintain or increase our revenues and could adversely impact our business and prospects.

   

  We may be unable to obtain, maintain and protect our intellectual property rights and
          proprietary information or prevent third-parties from making unauthorized use of our technology. 

   

  Our intellectual property rights are important to our business. We rely on a combination of
      confidentiality clauses, assignment agreements and license agreements with employees and third parties, trade secrets, copyrights and trademarks to protect our intellectual property and competitive advantage, all of which offer only limited
      protection. The steps we take to protect our intellectual property require significant resources and may be inadequate. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect
      unauthorized use of our intellectual property. We may be required to use significant resources to monitor and protect these rights. Despite our precautions, it may be possible for unauthorized third parties to copy our platforms and use information
      that we regard as proprietary to create services that compete with ours. Some license provisions protecting against unauthorized use, copying, transfer and disclosure of our proprietary information may be unenforceable under the laws of certain
      jurisdictions and foreign countries. In addition, we may not be able to acquire or maintain appropriate domain names in all countries in which we do business, or prevent third parties from acquiring domain names that are similar to, infringe upon, or
      diminish the value of our trademarks and other proprietary rights. Furthermore, regulations governing domain names may not protect our trademarks or similar proprietary rights.

   

  
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  We enter into confidentiality and invention assignment agreements with our employees and
      consultants and enter into confidentiality agreements with the parties with whom we have strategic relationships and business alliances. No assurance can be given that these agreements will be effective in controlling access to our proprietary
      information and trade secrets. The confidentiality agreements on which we rely to protect certain technologies may be breached, may not be adequate to protect our confidential information, trade secrets and proprietary technologies and may not
      provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, trade secrets or proprietary technology. Further, these agreements do not prevent our competitors or others from independently developing
      software that is substantially equivalent or superior to our software. In addition, others may independently discover our trade secrets and confidential information, and in such cases, we likely would not be able to assert any trade secret rights
      against such parties. Additionally, we may from time to time be subject to opposition or similar proceedings with respect to applications for registrations of our intellectual property, including our trademarks. While we aim to acquire adequate
      protection of our brand through trademark registrations in key markets, occasionally third parties may have already registered or otherwise acquired rights to identical or similar marks for services that also address our market. We rely on our brand
      and trademarks to identify our platform and to differentiate our platform and services from those of our competitors, and if we are unable to adequately protect our trademarks, third parties may use our brand names or trademarks similar to ours in a
      manner that may cause confusion in the market, which could decrease the value of our brand and adversely affect our business and competitive advantages.

   

  Policing unauthorized use of our intellectual property and misappropriation of our
      technology and trade secrets is difficult and we may not always be aware of such unauthorized use or misappropriation. Despite our efforts to protect our intellectual property rights, unauthorized third parties may attempt to use, copy or otherwise
      obtain and market or distribute our intellectual property rights or technology or otherwise develop services with the same or similar functionality as our platforms. If our competitors infringe, misappropriate or otherwise misuse our intellectual
      property rights and we are not adequately protected, or if our competitors are able to develop a platform with the same or similar functionality as ours without infringing our intellectual property, our competitive advantage and results of operations
      could be harmed. Litigation brought to protect and enforce our intellectual property rights could be costly, time consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. As a
      result, we may be aware of infringement by our competitors but may choose not to bring litigation to enforce our intellectual property rights due to the cost, time and distraction of bringing such litigation. Furthermore, if we do decide to bring
      litigation, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits challenging or opposing our right to use and otherwise exploit particular intellectual property, services and technology or
      the enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay
      further sales or the implementation of our solutions, impair the functionality of our platforms, prevent or delay introductions of new or enhanced solutions, result in our substituting inferior or more costly technologies into our platforms or injure
      our reputation. Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do.

   

  We may be subject to claims by third parties of intellectual property infringement. 

   

  The software industry is characterized by the existence of a large number of patents and
      frequent claims and related litigation regarding patents, copyright and other intellectual property rights. Third parties have in the past asserted and may in the future assert that our platforms, solutions, technology, methods or practices infringe,
      misappropriate or otherwise violate their intellectual property or other proprietary rights. Such claims may be made by our competitors seeking to obtain a competitive advantage or by other parties. Additionally, in recent years, non-practicing
      entities have begun purchasing intellectual property assets for the purpose of making claims of infringement and attempting to extract settlements from companies like ours. The risk of claims may increase as the number of solutions that we offer and
      competitors in our market increases and overlaps occur. In addition, to the extent that we gain greater visibility and market exposure, we face a higher risk of being the subject of intellectual property infringement claims. See “Legal Proceedings
      and Regulatory Actions”.

   

  Any such claims, regardless of merit, that result in litigation could result in substantial
      expenses, divert the attention of management, cause significant delays in introducing new or enhanced services or technology, materially disrupt the conduct of our business and have a material and adverse effect on our brand, business, financial
      condition and results of operations. Although we do not believe that our proprietary technology, processes and methods have been registered by any third-party, it is possible that intellectual property rights have been issued to third parties that
      cover all or a portion of our business. As a consequence of any patent or other intellectual property claims, we could be required to pay substantial damages, develop non-infringing technology, enter into royalty-bearing licensing agreements, stop
      selling or marketing some or all of our solutions or re-brand our solutions. We may also be obligated to indemnify our customers or partners or pay substantial settlement costs, including royalty payments, in connection with any such claim or
      litigation and to obtain licenses, modify applications or refund fees, which could be costly. If it appears necessary, we may seek to secure license rights to intellectual property that we are alleged to infringe at a significant cost, potentially
      even if we believe such claims to be without merit. If required licenses cannot be obtained, or if existing licenses are not renewed, litigation could result. Litigation is inherently uncertain and can cause us to expend significant money, time and
      attention to it, even if we are ultimately successful. Any adverse decision could result in a loss of our proprietary rights, subject us to significant liabilities, require us to seek licenses for alternative technologies from third parties, prevent
      us from offering all or a portion of our solutions and otherwise negatively affect our business and operating results.

   

  
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  If we are unable to hire, retain and motivate qualified personnel, our business will suffer. 

   

  Our future success depends, in part, on our ability to continue to attract and retain highly
      skilled personnel. Our ability to identify, hire, develop, motivate and retain qualified personnel will directly affect our ability to maintain and grow our business, and such efforts will require significant time, expense and attention. The
      inability to attract or retain qualified personnel or delays in hiring required personnel may seriously harm our business, financial condition and operating results. Our ability to continue to attract and retain highly skilled personnel, specifically
      employees with technical and engineering skills and employees with high levels of experience in designing and developing software and internet-related services, will be critical to our future success. Competition for highly skilled personnel in the
      geographic areas in which we operate can be intense due in part to the more limited pool of qualified personnel as compared to other places in the world, and we have experienced difficulties hiring employees from foreign jurisdictions to work in our
      offices. Further, increases in the Canadian dollar, the Euro or the Australian dollar relative to the U.S. dollar and other currencies could make it more difficult for us to offer compensation packages to new employees that are competitive with
      packages in the United States or elsewhere and could increase our costs of acquiring qualified personnel. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or have
      divulged proprietary or other confidential information. While we intend to issue options or other equity awards as key components of our overall compensation and employee attraction and retention efforts, we are required under IFRS to recognize
      compensation expense in our operating results for employee stock-based compensation under our equity grant programs which may increase the pressure to limit stock-based compensation.

   

  We are dependent on the continued services and performance of our senior management
          and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition. 

   

  Our future performance depends on the continued services and contributions of our senior
      management, including our Chief Executive Officer, Dax Dasilva, our President, Jean Paul Chauvet, and other key employees to execute on our business plan and to identify and pursue new opportunities and product innovations. The failure to properly
      manage succession plans and/or the loss of services of senior management or other key employees could significantly delay or prevent the achievement of our strategic objectives. If members of our senior management or other key employees, or people
      under their care, contract the COVID-19 virus, they may become unavailable to us for indefinite periods of time, which may impact our ability to execute on our objectives. From time to time, there may be changes in our senior management team
      resulting from the hiring or departure of executives, which could disrupt our business. The loss of the services of one or more of our senior management or other key employees for any reason could adversely affect our business, financial condition
      and operating results and require significant amounts of time, training and resources to find suitable replacements and integrate them within our business, and could affect our corporate culture.

   

  We have in the past made, and in the future may make, acquisitions and investments
          that could divert management’s attention, result in operating difficulties and dilution to our shareholders and otherwise disrupt our operations and adversely affect our business, operating results or financial position. 

   

  Pursuing strategic acquisitions or investment opportunities is one of our key growth
      strategies and has been an important contributor to our past growth. Any transactions that we enter into could be material to our financial condition and results of operations. The process of acquiring and integrating another company or technology
      could create unforeseen operating difficulties and expenditures. Acquisitions and investments involve a number of risks, such as:

   

  		•	diversion of management time and focus from operating our business;

   

  		•	use of resources that are needed in other areas of our business;

   

  		•	in the case of an acquisition, implementation or remediation of controls, procedures and policies of the acquired
            company;

   

  		•	in the case of an acquisition, difficulty integrating the accounting systems and operations of the acquired company;

   

  		•	in the case of an acquisition, coordination of product, engineering and selling and marketing
            functions, including difficulties and additional expenses associated with supporting legacy services and products and hosting infrastructure of the acquired company and difficulty converting the customers of the acquired company onto our
            systems, platforms and contract terms, including disparities in the revenues, licensing, support or professional services model of the acquired company;

   

  		•	in the case of an acquisition, difficulty integrating, supporting or enhancing acquired product
            lines or services, including difficulty in transitioning acquired solutions developed with different source code architectures to our integrated platforms, difficulty in supporting feature development across our full suite of house-built and
            acquired solutions and strain on resources from marketing and supporting multiple platforms prior to integration;

   

  
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  		•	in the case of an acquisition, retention and integration of employees from the acquired company, and
            preservation of our corporate culture;

   

  		•	unforeseen costs or liabilities;

   

  		•	adverse effects to our existing business relationships with partners and customers as a result of
            the acquisition or investment;

   

  		•	the possibility of adverse tax consequences;

   

  		•	litigation or other claims arising in connection with the acquired company or investment; and

   

  		•	in the case of foreign acquisitions, the need to integrate operations across different cultures and
            languages and to address the particular economic, currency, political and regulatory risks associated with specific countries.

   

  In addition, a significant portion of the purchase price of companies we acquire may be
      allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based
      on this impairment assessment process, which could adversely affect our results of operations.

   

  Acquisitions and investments may also result in dilutive issuances of equity securities,
      which could adversely affect our share price, or result in issuances of securities with superior rights and preferences to the subordinate voting shares or the incurrence of debt with restrictive covenants that limit our future uses of capital in
      pursuit of business opportunities.

   

  We may not be able to identify acquisition or investment opportunities that meet our
      strategic objectives, or to the extent that such opportunities are identified, we may not be able to negotiate terms with respect to the acquisition or investment that are acceptable to us.

   

  Businesses we acquire may not have disclosure controls and procedures and internal
          controls over financial reporting, cybersecurity controls and data privacy compliance programs, or their existing controls and programs may be weaker than or otherwise not in conformity with ours.

   

  We have a history of acquiring businesses of varying sizes and organizational complexities.
      Upon consummating an acquisition, we seek to implement our disclosure controls and procedures, our internal controls over financial reporting as well as procedures relating to cybersecurity and compliance with data privacy laws and regulations at the
      acquired company as promptly as possible. Depending upon the nature and scale of the business acquired, the implementation of our disclosure controls and procedures as well as the implementation of our internal controls over financial reporting at an
      acquired company may be a lengthy process and may divert our attention from other business operations. Our integration efforts may periodically expose deficiencies or suspected deficiencies in the controls, procedures and programs of an acquired
      company that were not identified in our due diligence undertaken prior to consummating the acquisition. Where there exists a risk of deficiencies in controls, procedures or programs, we may not be in a position to comply with our obligations under
      applicable laws, regulations, rules and listing standards or we may be required to avail ourselves of scope limitations with respect to certifications required thereunder, and, as a result, our business and financial condition may be materially
      harmed.

   

  We may need to raise additional funds to pursue our growth strategy or continue our
          operations, and we may be unable to raise capital when needed or on acceptable terms. 

   

  We expect to seek additional equity or debt financing to fund our growth, enhance our
      platforms, respond to competitive pressures or make acquisitions or other investments. Our business plans may change, general economic, financial or political conditions in our markets may deteriorate or other circumstances may arise, in each case
      that have a material adverse effect on our cash flows and the anticipated cash needs of our business. Any of these events or circumstances could result in significant additional funding needs, requiring us to raise additional capital. We cannot
      predict the timing or amount of any such capital requirements at this time. If financing is not available on satisfactory terms, or at all, we may be unable to expand our business at the rate desired and our results of operations may suffer. In
      addition, any financing through issuances of equity securities would be dilutive to holders of our shares.

   

  From time to time, we may become defendants in legal proceedings as to which we are
          unable to assess our exposure and which could become significant liabilities in the event of an adverse judgment. 

   

  From time to time in the ordinary course of our business, we may become involved in various
      legal proceedings, including commercial, product liability, employment, class action and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s
      attention and resources and cause us to incur significant expenses. In addition, our insurance or indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may
      harm our reputation. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on our business, operating results or financial condition. See “Legal Proceedings and Regulatory
      Actions”.

   

  
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  New tax laws could be enacted or existing laws could be applied to us or our
          customers, which could increase the costs of our solutions and adversely impact our business. 

   

  The application of federal, state, provincial, local and foreign tax laws to solutions
      provided over the internet is evolving. New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, possibly with retroactive effect, and could be applied solely or disproportionately to
      solutions provided over the internet. These enactments could adversely affect our sales activity due to the inherent cost increase the taxes would represent, and could ultimately result in a negative impact on our results of operations and cash
      flows.

   

  Unanticipated changes in effective tax rates or adverse outcomes resulting from
          examination of our income or other tax returns could adversely affect our operating results and financial condition. 

   

  With sales in various countries, we are subject to taxation in several jurisdictions around
      the world with increasingly complex tax laws, the application of which can be uncertain. The amount of taxes we pay in these jurisdictions could increase substantially as a result of changes in the applicable tax principles, including increased tax
      rates, new tax laws or revised interpretations of existing tax laws and precedents, which could have an adverse impact on our liquidity and results of operations.

   

  In addition, the authorities in several jurisdictions could review our tax returns and
      impose additional tax, interest and penalties, which could have an impact on us and on our results of operations. We previously have participated in government programs with the Canadian federal government and Canadian provincial governments that
      provide investment tax credits based upon qualifying research and development expenditures. If Canadian taxation authorities successfully challenge such expenses or the correctness of such income tax credits claimed, our historical operating results
      could be adversely affected. As a public company, we are no longer eligible for refundable tax credits under the Canadian federal Scientific Research and Experimental Development Program, or SR&ED credits. However, we are still eligible for
      non-refundable SR&ED credits under this program, which are eligible to reduce future income taxes payable.

   

  Our future effective tax rates could be subject to volatility or adversely affected by a number of factors.
        

   

  Our future effective tax rates could be subject to volatility or adversely affected by a number of factors,
      including:

   

  		•	changes in the valuation of our deferred tax assets and liabilities;

   

  		•	expected timing and amount of the release of any tax valuation allowances;

   

  		•	tax effects of stock-based compensation;

   

  		•	costs related to intercompany restructurings;

   

  		•	changes in tax laws, regulations or interpretations thereof; or

   

  		•	future earnings being lower than anticipated in countries where we have lower statutory tax rates
            and higher than anticipated earnings in countries where we have higher statutory tax rates.

   

  We currently conduct activities in the United States and other jurisdictions through our
      subsidiaries pursuant to transfer pricing arrangements and may in the future conduct operations in other jurisdictions pursuant to similar arrangements. If two or more affiliated companies are located in different countries, the tax laws or
      regulations of each country generally will require that transfer prices be the same as those between unrelated companies dealing at arms’ length. While we believe that we operate in compliance with applicable transfer pricing laws and intend to
      continue to do so, our transfer pricing procedures are not binding on applicable tax authorities. If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions, they could
      require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us.

   

  Tax authorities may seek to assess business taxes, sales and use taxes and other
          indirect taxes. If we are required to collect such taxes in additional jurisdictions, we might be subject to tax liability for past sales. 

   

  There is a risk that various jurisdictions could assert that we are liable for business
      activity taxes, which are levied upon income or gross receipts, or for the collection of local sales and use taxes or other indirect taxes. This risk exists regardless of whether we are subject to federal, state, provincial or local income tax. Tax
      authorities are becoming increasingly active in asserting nexus for business activity tax purposes and imposing sales and use taxes and other indirect taxes on products and services provided over the internet. We may be subject to indirect taxes if a
      local tax authority asserts that our activities or the activities of our subsidiaries are sufficient to establish nexus. We could also be liable for the collection of indirect taxes if a local tax authority asserts that distribution of our solutions
      over the internet is subject to indirect taxes. Each jurisdiction has different rules and regulations governing indirect taxes, and these rules and regulations are subject to varying interpretations that change over time. We review these rules and
      regulations periodically and, when we believe we are subject to sales and use taxes in a particular state, voluntarily engage state and local tax authorities in order to determine how to comply with their rules and regulations. Further, the U.S.
      Supreme Court held in South Dakota v. Wayfair, Inc. that a U.S. state may require an online retailer to collect sales and use taxes imposed by that state, even if the retailer has no physical presence in that state, thus permitting a wider
      enforcement of such sales and use tax collection requirements. Legislation adopted in the wake of this decision could require us or our customers to incur substantial costs in order to comply, including costs associated with legal advice, tax
      calculation, collection, remittance and audit requirements, which could make selling in such markets less attractive, adversely affect buyer behavior, adversely affect our customers and adversely affect our business. Moreover, if a tax authority
      asserts that distribution of our solutions is subject to such taxes, the additional cost may decrease the likelihood that such customers would purchase our solutions or continue to renew their subscriptions.

   

  
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  A successful assertion by one or more jurisdictions could also result in tax assessments,
      penalties, and interest, and we may be required to collect sales or other taxes in the future on subscription service revenue which could result in substantial tax liabilities for past transactions and otherwise harm our business. We cannot assure
      you that we will not be subject to indirect taxes or related penalties for past sales in jurisdictions where we currently believe no such taxes are required. New obligations to collect or pay taxes of any kind could increase our cost of doing
      business.

   

  Failure to effectively expand our sales capabilities could harm our ability to
          increase our subscriber base and achieve broader market acceptance of our platforms. 

   

  Increasing our customer base and achieving broader market acceptance of our platforms will
      depend, in part, on our ability to effectively expand our sales and marketing operations and activities globally. We are substantially dependent on our online marketing efforts and on our direct sales force to obtain new customers. Our sales and
      marketing organizations have expanded over the last two fiscal years. We plan to continue to expand our direct sales force, both domestically and internationally, and to increase the number of our sales professionals. Our ability to achieve
      significant revenue growth in the future will depend, in part, on our success in recruiting, training and retaining a sufficient number of experienced sales professionals. New hires require significant training and time before they achieve full
      productivity, particularly in new sales segments and territories. Our recent and planned hires may not become productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the
      markets where we do business. Because we do not have a long history of expanding our sales force, we cannot predict whether, or to what extent, our sales will increase as we expand our sales force or how long it will take for sales personnel to
      become productive. If our sales expansion efforts do not generate a significant increase in revenue, our business and future growth prospects could be harmed.

   

  We rely on search engines, advertising on the Internet and social networking sites to
          attract a meaningful portion of our customers. If we are not able to generate traffic to our website through search engines, advertising on the Internet and social networking sites, our ability to attract new customers may be impaired. In
          addition, if our customers are not able to generate traffic to their stores, restaurants and websites through search engines, advertising on the Internet and social networking sites, their ability to attract consumers may be impaired. 

   

  Most of our customers find our business through internet search engines, such as Google,
      advertisements online and on social networking sites, such as Facebook. The prominence of our website in response to internet searches is a critical factor in attracting potential customers to our platform. If we are listed less prominently or fail
      to appear in search results for any reason, visits to our website could decline significantly, and we may not be able to replace this traffic.

   

  Similarly, many consumers locate our customers’ businesses through internet search engines,
      advertisements online and social networking sites. If our customers are listed less prominently or fail to appear in search results for any reason, visits to our customers’ stores, restaurants and websites could decline significantly. As a result,
      our customers’ businesses may suffer, which would affect the GTV that they process through our platform and could affect the ability of such customers to pay for our solutions.

   

  Search engines revise their algorithms from time to time in an attempt to optimize their
      search results. If search engines modify their algorithms, our website and our customers’ websites may appear less prominently or not at all in search results, which could result in reduced traffic to our website and to our customers’ stores,
      restaurants and websites.

   

  Additionally, if the price of marketing our solutions over search engines or social
      networking sites increases, we may incur additional marketing expenses or may be required to allocate a larger portion of our marketing spend to search engine marketing and our business and operating results could be adversely affected. Furthermore,
      competitors may in the future bid on the search terms that we use to drive traffic to our website. Such actions could increase our marketing costs and result in decreased traffic to our website. In addition, search engines or social networking sites
      may change their advertising policies from time to time. If any change to these policies delays or prevents us from advertising through these channels, it could result in reduced traffic to our website and sales of our solutions. As well, new search
      engines or social networking sites may develop, particularly in specific jurisdictions, that reduce traffic on existing search engines and social networking sites and if we are not able to achieve awareness through advertising or otherwise, we may
      not achieve significant traffic to our website through these new platforms. If we are unable to continue to successfully promote and maintain our websites, or if we incur excessive expenses to do so, our business and operating results could be
      adversely affected. 

    

   

    

  
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  If we fail to maintain a consistently high level of customer service or if we fail to
          manage our reputation, our brand, business and financial results may be harmed. 

   

  We believe our focus on customer service and support is critical to attract and onboard new
      customers, retain our existing customers and grow our business. As a result, we have invested heavily in the quality and training of our support team, along with the tools they use to provide this service. We also maintain a sizeable support
      contingent via third-party providers located in the Philippines.

   

  If we or our third-party service providers are unable to maintain a consistently high level
      of customer service, we may lose existing customers. In addition, our ability to attract new customers is highly dependent on our reputation and on positive recommendations from our existing customers. Any failure to maintain a consistently high
      level of customer service and to help our customers quickly resolve issues and provide effective ongoing support could harm our ability to retain existing customers and attract new customers and our reputation with existing or potential customers
      could suffer. We may experience difficulties maintaining a consistent level of service across our international operations and third-party providers.

   

  We are subject to export and import controls and economic sanctions laws that could
          impair our ability to offer our platform internationally or subject us to liability if we are not in compliance with applicable laws. 

   

  As a result of our international operations, we are subject to a number of Canadian and
      foreign laws relating to economic sanctions and to export and import controls which presently limit and could limit further our ability to offer our platform in certain jurisdictions or to certain customers. In addition, the export of our technology,
      hardware or software in certain jurisdictions may require governmental authorizations. Various jurisdictions also regulate the import of certain encryption technology, including imposing import permitting and licensing requirements, and have enacted
      laws that could limit our ability to offer our platforms in those countries. Complying with export or import controls and economic sanctions may be time-consuming and result in the delay or loss of business opportunities.

   

  Any change in export or import controls, economic sanctions or related legislation, or
      change in the countries, governments, persons, or technologies targeted by such restrictions or legislation, could result in decreased use of our platforms by customers or in our decreased ability to offer our platforms internationally, which would
      harm our business, operating results and financial condition. Furthermore, failure to comply with export or import controls or with economic sanctions may expose us to government investigations and penalties, which could harm our business, operating
      results and financial condition.

   

  Our brand is integral to our success. If we fail to effectively maintain, promote and
          enhance our brand, our business and competitive advantage may be harmed. 

   

  We believe that maintaining, promoting and enhancing the Lightspeed brand is critical to
      expanding our business. Maintaining and enhancing our brand will depend largely on our ability to continue to provide high-quality, well-designed, useful, reliable and innovative solutions, which we may not do successfully.

   

  Errors, defects, data breaches, disruptions or other performance problems with our
      platforms, including with third-party applications, may harm our reputation and brand. We may introduce new solutions or terms of service that our customers and their consumers do not like, which may negatively affect our brand. Additionally, if our
      customers or their consumers have a negative experience using our solutions or third-party solutions integrated with Lightspeed, such an experience may affect our brand, especially as we continue to attract larger customers to our platforms.

   

  We receive media coverage globally. Any unfavorable media coverage or negative publicity
      about our industry or our company, including, for example, publicity relating to the quality and reliability of our platforms, our privacy and security practices, our product changes, litigation, regulatory activity, or the actions of our partners or
      our customers, could seriously harm our reputation. Such negative publicity could also adversely affect the size, demographics, engagement, and loyalty of our customers and result in decreased revenue, which could seriously harm our business. Critics
      of our industry, and others who may want to pursue an agenda have in the past and may in the future utilize the internet, the press and other means to publish criticisms of our industry, our Company and our competitors, or make allegations regarding
      our business and operations, or the business and operations of our competitors. We or others in our industry may receive similar negative publicity or allegations in the future, and it could be costly, time consuming, distracting to management, cause
      fluctuations in the market price of our subordinate voting shares and harm our business and reputation.

   

  
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  We believe that the importance of brand recognition will increase as competition in our
      market increases. In addition to our ability to provide reliable and useful solutions at competitive prices, successful promotion of our brand will depend on the effectiveness of our marketing efforts. While we market our platforms primarily through
      advertisements on search engines, social networking and media sites, and paid banner advertisements on other websites, our platforms are also marketed through our partner and reseller channels and through a number of free traffic sources, including
      customer referrals, word-of-mouth and search engines. Our efforts to market our brand have involved significant expenses. Our marketing spend may not yield increased revenue, and even if it does, any increased revenue may not offset the expenses we
      incur in building and maintaining our brand.

   

  Our insurance costs may increase significantly, we may be unable to obtain the same level of insurance
          coverage and our insurance coverage may not be adequate to cover all possible losses we may suffer.

   

  We generally renew our insurance policies annually. If the cost of coverage becomes too high
      or if we believe certain coverage becomes inapplicable, we may need to reduce our policy limits, increase retention amounts or agree to certain exclusions from our coverage to reduce the premiums to an acceptable amount or to otherwise reduce
      coverage for certain occurrences. On the other hand, we may determine that we either do not have certain coverage that would be prudent for our business and the risks associated with our business or that our current coverages are too low to
      adequately cover such risks. In either event, we may incur additional or higher premiums for such coverage than in prior years.

   

  Among other factors, national security concerns, catastrophic events, pandemics such as the
      COVID-19 Pandemic, or any changes in any applicable statutory requirement binding insurance carriers to offer certain types of coverage could also adversely affect available insurance coverage and result in, among other things, increased premiums on
      available coverage (which may cause us to elect to reduce our policy limits or not renew our coverage) and additional exclusions from coverage. As cyber incidents and threats continue to evolve, we may be required to expend additional, perhaps
      significant, resources to continue to update, modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents. Although we maintain and monitor our information technology systems and we have insurance
      coverage for protecting against cyber security risks, such systems and insurance coverage may not be sufficient to protect against or cover all the losses we may experience as a result of any cyber-attacks.

   

  We may suffer damage due to a casualty loss (such as fire, natural disasters, pandemics and
      acts of war or terrorism) or other losses, such as those related to labor, professional liability or certain actions or inactions by our management, directors, employees or others, that could severely disrupt its business or subject us to claims by
      third parties who are injured or harmed. Although we maintain insurance that we believe to be adequate, such insurance may be inadequate or unavailable to cover all the risks to which our business and assets may be exposed, including risks related to
      certain litigation. Should an uninsured loss (including a loss that is less than the applicable deductible or that is not covered by insurance) or loss in excess of insured limits occur, it could have a significant adverse impact on our business,
      results of operations or financial condition.

   

  Provisions of our present and future debt instruments may restrict our ability to pursue business
          strategies. 

   

  We currently have credit facilities, which are collateralized by substantially all of our
      assets. Our credit facilities require us, and any debt instruments we may enter into in the future may require us, to comply with financial covenants, compliance with which may require revenue growth or improved profitability, and various covenants
      that limit our ability to, among other things:

   

  		•	dispose of assets;

   

  		•	complete mergers or acquisitions or change of control transactions;

   

  		•	engage in any business other than that in which we currently engage;

   

  		•	incur indebtedness;

   

  		•	encumber assets;

   

  		•	pay dividends or make other distributions to holders of our shares; and

   

  		•	engage in transactions with our affiliates.

   

  These restrictions could inhibit our ability to pursue our business strategies. If we
      default under a credit facility, and such event of default is not cured or waived, the lenders could terminate commitments to lend and cause all amounts outstanding with respect to the debt to be due and payable immediately.

   

  We may also incur additional indebtedness in the future. The instruments governing such
      indebtedness could contain provisions that are as, or more, restrictive than those to which we are presently subject. If we are unable to repay, refinance or restructure our indebtedness when payment is due, the lenders could proceed against the
      collateral granted to them to secure such indebtedness, as applicable, or force us into bankruptcy or liquidation.

   

  
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  We are dependent upon customers’ continued and unimpeded access to the internet, and
          upon their willingness to use the internet for commerce. 

   

  Our success depends upon the general public’s ability to access the internet, including
      through mobile devices, and its continued willingness to use the internet as a means to pay for purchases, communicate, access social media, research and conduct commercial transactions. The adoption of any laws or regulations that adversely affect
      the growth, popularity or use of the internet, including changes to laws or regulations impacting internet neutrality, could decrease the demand for our platforms, increase our operating costs, or otherwise adversely affect our business. Given
      uncertainty around these rules, we could experience discriminatory or anti-competitive practices that could impede both our and our customers’ growth, increase our costs or adversely affect our business. If customers become unable, unwilling or less
      willing to use the internet for commerce for any reason, including lack of access to high-speed communications equipment, congestion of traffic on the internet, internet outages or delays, disruptions or other damage to customers’ computers,
      increases in the cost of accessing the internet and security and privacy risks or the perception of such risks, our business could be adversely affected.

   

  Changes in accounting standards and interpretations, and our adoption thereof, as well
          as subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our reported financial results or financial condition. 

   

  IFRS accounting principles and related accounting pronouncements, implementation guidelines
      and interpretations with regard to a wide range of matters that are relevant to our business, including revenue recognition, impairment of goodwill and intangible assets, income taxes and litigation, are highly complex and involve many subjective
      assumptions, estimates and judgments. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments could significantly change our reported financial performance or financial condition in accordance with
      generally accepted accounting principles.

   

  Further, our implementation of and compliance with changes in accounting rules, including
      new accounting rules and interpretations, could adversely affect our reported financial position or operating results or cause unanticipated fluctuations in our reported operating results in future periods.

   

  Exchange rate fluctuations may negatively affect our results of operations. 

   

  While a significant portion of our revenues are denominated in U.S. dollars, most of our
      operating expenses are incurred in Canadian dollars, Euros and Australian dollars. As a result, our results of operations will be adversely impacted by an increase in the value of the Canadian dollar, the Euro and/or the Australian dollar relative to
      the U.S. dollar. Exchange rate fluctuations may also affect our revenue growth rates as our software subscriptions are priced in the local currency of the country in which the customer is located, and the underlying GTV (from which we earn
      transaction-based payments revenue) is also expected to be denominated in that currency. As a result, we will be further exposed to currency fluctuations to the extent non-U.S. dollar revenues from our platform increase. The value of the Canadian
      dollar relative to the U.S. dollar and the value of the U.S. dollar relative to the Euro and the Australian dollar has varied significantly and investors are cautioned that past and current exchange rates are not indicative of future exchange rates.

   

  Risks Related to Ownership of the Subordinate Voting Shares 

   

  The dual class structure contained in our restated articles of incorporation has the
          effect of concentrating voting control and the ability to influence corporate matters with Dax Dasilva, our founder and Chief Executive Officer, which may have a negative impact on the trading price of the subordinate voting shares. 

   

  Our multiple voting shares have four votes per share and our subordinate voting shares have
      one vote per share. Dax Dasilva, our founder and Chief Executive Officer, beneficially owns and controls all of our multiple voting shares and holds approximately 43.1% of the voting power attached to our outstanding voting shares and therefore has
      significant influence over our management and affairs and over all matters requiring shareholder approval, including election of directors and significant corporate transactions.

   

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

   

  
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  Each of our directors and officers owes a fiduciary duty to the Company and must act
      honestly and in good faith with a view to the best interest of the Company. However, any director and/or officer that is a shareholder, including a controlling shareholder, is entitled to vote his or her shares in his or her own interests, which may
      not always be in the interest of our shareholders generally. The concentration of the voting power attached to our issued and outstanding shares in favour of our founder and Chief Executive Officer may also have an adverse effect on the price of our
      subordinate voting shares. As a result of such concentration of voting power, we may also take actions that our other shareholders do not view as beneficial, which may adversely affect our results of operations and financial condition and cause the
      value of your investment to decline.

   

  The market price of our subordinate voting shares may be volatile and your investment could suffer or
          decline in value. 

   

  The market price of our subordinate voting shares has fluctuated in the past and we expect
      it to fluctuate in the future, and it may decline. Some of the factors that may cause the market price of our subordinate voting shares to fluctuate include: volatility in the market price and trading volume of comparable companies; actual or
      anticipated changes or fluctuations in our operating results or in the expectations of market analysts; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; short sales, hedging and other derivative
      transactions in our subordinate voting shares; litigation or regulatory action against us; investors’ general perception of us and the public’s reaction to our press releases, our other public announcements and our filings with Canadian securities
      regulators, including our financial statements; publication of research reports or news stories about us, our competitors or our industry; positive or negative recommendations or withdrawal of research coverage by securities analysts; changes in
      general political, economic, industry and market conditions and trends; sales of our subordinate voting shares and multiple voting shares by existing shareholders; recruitment or departure of key personnel; significant acquisitions or business
      combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; and the other risk factors described in this section of the AIF.

   

  Additionally, these factors, as well as other related factors, may cause decreases in asset
      values that are deemed to be other than temporary, which may result in impairment losses. As well, certain institutional investors may base their investment decisions on consideration of our environmental, governance and social practices and
      performance against such institutions’ respective investment guidelines and criteria, and failure to satisfy such criteria may result in limited or no investment in our subordinate voting shares by those institutions, which could materially adversely
      affect the trading price of our subordinate voting shares. There can be no assurance that continuing fluctuations in price and volume will not occur. If such increased levels of volatility and market turmoil continue for a protracted period of time,
      our operations and the trading price of our subordinate voting shares may be materially adversely affected.

   

  In addition, broad market and industry factors may harm the market price of our subordinate
      voting shares. Therefore, the price of our subordinate voting shares could fluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce the price of our subordinate voting shares regardless of
      our operating performance. In the past, following a significant decline in the market price of a company’s securities, there have been instances of securities class action litigation having been instituted against that company. If we were involved in
      any similar litigation, we could incur substantial costs, our management’s attention and resources could be diverted and it could harm our business, operating results and financial condition.

   

  We do not currently anticipate paying dividends. 

   

  Our current policy is to reinvest our earnings to finance the growth of our business.
      Therefore, we do not anticipate paying any cash dividends on our securities, including the subordinate voting shares, in the foreseeable future. Any future determination to pay dividends on our securities will be at the discretion of the Board and
      will depend on, among other things, our results of operations, current and anticipated cash requirements and surplus, financial condition, contractual restrictions and financing agreement covenants, solvency tests imposed by corporate law and other
      factors that the Board may deem relevant. Until the time that we do pay dividends, which we might never do, our shareholders will not be able to receive a return on their subordinate voting shares unless they sell such subordinate voting shares for a
      price greater than their acquisition price, and such appreciation may never occur. See “Dividend Policy”.

   

  
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  Future sales, or the perception of future sales, of subordinate voting shares by
          existing shareholders or by us, or future dilutive issuances of subordinate voting shares by us, could adversely affect prevailing market prices for the subordinate voting shares. 

   

  Subject to compliance with applicable securities laws, sales of a substantial number of
      subordinate voting shares in the public market could occur at any time. These sales, or the market perception that the holders of a large number of subordinate voting shares or securities convertible into subordinate voting shares intend to sell
      subordinate voting shares, could reduce the market price of our subordinate voting shares. We cannot predict the effect, if any, that future public sales of these securities or the availability of these securities for sale will have on the market
      price of our subordinate voting shares. If the market price of our subordinate voting shares were to drop as a result, this might impede our ability to raise additional capital and might cause remaining shareholders to lose all or part of their
      investment.

   

  We, the Principal Shareholders (as defined below), and two of our executive officers,
      Brandon Nussey and Jean-Paul Chauvet, are party to lock-up agreements (the “Lock-Up Agreements”) with the underwriters of our bought deal offering which expire on May 27, 2020. Further, the lock-up agreements entered into in connection with
      our initial public offering (the “IPO Lock-Up Agreements”) by Investissement Québec, Inovia Capital funds and the Principal Shareholders are set to expire on the 18-month anniversary of the closing of our initial public offering. All of the
      subordinate voting shares held by the forgoing persons will be able to be resold after the expiration of the Lock-up Agreements and/or the IPO Lock-up Agreements, as applicable. In addition, the applicable underwriters might waive the provisions of
      these Lock-up Agreements and/or IPO Lock-up Agreements and allow the subject shareholders to sell their subordinate voting shares at any time. There are no pre-established conditions for the grant of such a waiver by such underwriters, and any
      decision by them to waive those conditions may depend on a number of factors, which might include market conditions, the performance of our subordinate voting shares in the market and our financial condition at that time. If the restrictions in such
      Lock-up Agreements and/or IPO Lock-up Agreements are waived, additional subordinate voting shares will be available for sale into the public market, subject to applicable securities laws, which could reduce the market price for subordinate voting
      shares.

   

  Moreover, certain of our shareholders have the right under the Investor Rights Agreement (as
      defined below) to require us to file a prospectus covering their registrable securities or to include their registrable securities in prospectuses that we may file for ourselves or on behalf of other shareholders. See “Description of Share Capital –
      Investor Rights Agreement.”

   

  In addition, certain holders of options will have an immediate income inclusion for tax
      purposes when they exercise their options (that is, tax is not deferred until they sell the underlying subordinate voting shares). As a result, these holders may need to sell subordinate voting shares purchased on the exercise of options in the same
      year that they exercise their options. This might result in a greater number of subordinate voting shares being sold in the public market, and reduced long-term holdings of subordinate voting shares by our management and employees.

   

  Our quarterly results of operations may fluctuate. As a result, we may fail to meet or
          exceed the expectations of investors or securities analysts, which could cause our share price to decline. 

   

  Our quarterly revenue and results of operations may fluctuate as a result of a variety of
      factors, many of which are outside of our control. If our quarterly revenue or results of operations fall below the expectations of investors or securities analysts, the price of our subordinate voting shares could decline substantially. Fluctuations
      in our results of operations may be due to a number of factors, including:

   

  		•	demand for and market acceptance of our solutions;

   

  		•	the mix of services sold during a period;

   

  		•	our ability to retain and increase sales to customers and attract new customers;

   

  		•	the timing of product deployment which determines when we can recognize the associated revenue;

   

  		•	the timing and success of introductions of new solutions or upgrades by us or our competitors;

   

  		•	changes in global economic conditions;

   

  		•	changes in our pricing policies or those of our competitors;

   

  		•	competition, including entry into the industry by new competitors and new offerings by existing competitors;

   

  		•	network outages or security breaches; and

   

  		•	the amount and timing of expenditures related to expanding our operations, research and development
            or introducing new solutions.

   

  Due to the foregoing factors, and the other risks discussed in this AIF, you should not rely
      on quarter-to-quarter comparisons of our results of operations as an indication of our future performance.

   

  
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  Securities analysts’ research or reports could impact the price of the subordinate voting shares. 

   

  The trading market for our subordinate voting shares may be facilitated in part by the research and reports that industry or financial analysts publish about us or
    our business. If few analysts provide coverage about us or our business, the trading price of our subordinate voting shares could be lower than otherwise. If one or more of the analysts covering us or our business downgrade their evaluations of us, our
    business or the value of our subordinate voting shares, the price of our subordinate voting shares could decline. If one or more of these analysts cease to cover us or our business, we could lose visibility in the market for our subordinate voting
    shares, which in turn could cause the price of our subordinate voting shares to decline.

   

  Shareholders have limited control over our Company’s operations. 

   

  Holders of subordinate voting shares have limited control over changes in our policies and operations, which increases the uncertainty and risks of an investment in
    our Company. The Board determine major policies, including policies regarding financing, growth, debt capitalization and any future dividends to shareholders. Generally, the Board may amend or revise these and other policies without a vote of the
    holders of subordinate voting shares. Holders of subordinate voting shares only have a right to vote in the limited circumstances described under “Description of Share Capital”. The Board’s broad discretion in setting policies and the limited ability
    of holders of subordinate voting shares to exert control over those policies increases the uncertainty and risks of an investment in our Company.

   

  Dax Dasilva, our founder and Chief Executive Officer, beneficially owns and controls all of our multiple voting shares and holds approximately 43.1% of the voting
    power attached to our outstanding voting shares, and Caisse is entitled to certain director nomination rights under our Investor Rights Agreement. In addition, a restrictive covenant with respect to our business operations in Québec is included in the
    Investor Rights Agreement. See “Description of Share Capital – Investor Rights Agreement.” Accordingly, the Principal Shareholders (as defined below) have significant influence with respect to all matters submitted to the Company’s shareholders for
    approval, including without limitation the election and removal of directors, amendments to the constating documents of the Company and the approval of certain material transactions.

   

   We incur significant expenses as a result of being a public company.

   

  As a public company, we incur significant legal, accounting, insurance and other expenses, which may negatively impact our performance and could cause our results of
    operations and financial condition to suffer. Compliance with applicable securities laws in Canada and the rules of the TSX substantially increases our expenses, including our legal and accounting costs, and make some activities more time consuming and
    costly. Reporting obligations as a public company and our anticipated growth may place a strain on our financial and management systems, processes and controls, as well as on our personnel.

   

  These laws, rules and regulations make it more expensive for us to obtain director and officer liability insurance on an ongoing basis, and we may in the future be
    required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board or as officers.
    As a result of the foregoing, we expect a substantial increase in legal, accounting, insurance and certain other expenses in the future, which will negatively impact our financial performance and could cause our results of operations and financial
    condition to suffer.

   

  We are required to develop and maintain proper and effective internal controls over financial reporting. We may not complete our analysis of our internal
        controls over financial reporting in a timely manner, or these internal controls may not be effective, which could adversely affect investor confidence in our Company and, as a result, negatively impact the value of our subordinate voting shares. 

   

  We are subject to reporting and other obligations under applicable Canadian securities laws, including NI 52-109, and the rules of the TSX. These reporting and other
    obligations place significant demands on our management, administrative, operational and accounting resources. In order to meet such requirements, we have, among other things, established systems, implemented financial and management controls,
    reporting systems and procedures and hired qualified accounting and finance staff, and may be required to do so in the future. However, if we are unable to accomplish any necessary objectives in a timely and effective manner, our ability to comply with
    our financial reporting obligations and other rules applicable to reporting issuers could be impaired. Moreover, any failure to maintain effective internal controls could cause us to fail to satisfy our reporting obligations or result in material
    misstatements in our financial statements. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results could be materially adversely affected which could also cause investors to lose confidence in our reported
    financial information, which could result in a reduction in the market price of our subordinate voting shares.

   

  
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  We do not expect that our disclosure controls and procedures and internal controls over financial reporting will prevent all error and fraud. A control system, no
    matter how well-designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the
    benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within an organization are detected. The inherent
    limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by individual acts of certain persons, by collusion of two or more
    people or by management override of the controls. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected in a timely manner or at all.

   

  Our constating documents permit us to issue additional securities in the future, including subordinate voting shares, multiple voting shares and preferred
        shares, without additional shareholder approval. 

   

  Our restated articles of incorporation permit us to issue an unlimited number of subordinate voting shares and multiple voting shares. We anticipate that we will,
    from time to time, issue additional subordinate voting shares in the future. Subject to the requirements of the TSX, we will not be required to obtain the approval of shareholders for the issuance of additional subordinate voting shares. Although the
    rules of the TSX generally prohibit us from issuing additional multiple voting shares, there may be certain circumstances where additional multiple voting shares may be issued, including upon receiving shareholder approval. Any further issuances of
    subordinate voting shares or multiple voting shares will result in immediate dilution to existing shareholders and may have an adverse effect on the value of their shareholdings. Additionally, any further issuances of multiple voting shares may
    significantly lessen the combined voting power of our subordinate voting shares due to the four-to-one voting ration between our multiple voting shares and subordinate voting shares.

   

  Our restated articles of incorporation also permit us to issue an unlimited number of preferred shares, issuable in series. While we have no present plans to issue
    any preferred shares, our board of directors has the authority to issue preferred shares and determine the price, designation, rights, (including voting and dividend rights), preferences, privileges, restrictions and conditions of such preferred shares
    and to determine to whom they shall be issued. Any issuance of preferred shares may result in further dilution to existing shareholders and have an adverse effect on the value of their shareholdings. We cannot foresee the terms and conditions of any
    future offerings of preferred shares nor the effect they may have on the market price of the subordinate voting shares.

   

  Any issuance of preferred shares could make it difficult for another company to acquire us or could otherwise adversely affect holders of our subordinate voting
        shares, which could depress the price of our subordinate voting shares. 

   

  Our Board has the authority to issue preferred shares and to determine the preferences, limitations and relative rights of preferred shares and to fix the number of
    shares constituting any series and the designation of such series, without any further vote or action by our shareholders. Our preferred shares may be issued with liquidation, dividend and other rights superior to the rights of our subordinate voting
    shares and multiple voting shares. The potential issuance of preferred shares may delay or prevent a change in control of the Company, discourage bids for our subordinate voting shares at a premium over the market price and adversely affect the market
    price and other rights of the holders of our subordinate voting shares.

   

  
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  DIVIDEND POLICY

   

  We have not declared or paid any cash dividends on our securities since our IPO. We currently intend to retain any future earnings to fund the development and growth
    of our business and/or to pay down debt and do not currently anticipate paying dividends on the subordinate voting shares and multiple voting shares. Any determination to pay dividends in the future will be at the discretion of the Board and will
    depend on many factors, including, among others, our financial condition, current and anticipated cash requirements, contractual restrictions and financing agreement covenants, solvency tests imposed by applicable corporate law and other factors that
    the Board may deem relevant.

   

  DESCRIPTION OF SHARE CAPITAL

   

  The following description of our share capital summarizes certain provisions contained in our restated articles of incorporation and by-laws. These summaries do
      not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of our restated articles of incorporation and by-laws. 

   

  Our authorized share capital consists of (i) an unlimited number of subordinate voting shares, (ii) and unlimited number of multiple voting shares and (iii) an
    unlimited number of preferred shares, issuable in series, of which 77,538,895 subordinate voting shares, 14,667,922 multiple voting shares and no preferred shares were issued and outstanding as of March 31, 2020. The subordinate voting shares are
    “restricted securities” within the meaning of such term under applicable Canadian securities laws.

   

  Subordinate Voting Shares and Multiple Voting Shares 

   

  Except as described herein, the subordinate voting shares and multiple voting shares have the same rights, are equal in all respects and are treated by the Company as
    if they were one class of shares. Holders of multiple voting shares and subordinate voting shares have no pre-emptive rights or conversion or exchange rights or other subscription rights, except that each outstanding multiple voting share may at any
    time, at the option of the holder, be converted into one subordinate voting share and our multiple voting shares will automatically convert into subordinate voting shares upon certain transfers and other events, as described below under “Conversion”.
    There are no redemption, retraction, purchase for cancellation or surrender provisions or sinking or purchase fund provisions applicable to our subordinate voting shares or multiple voting shares. There is no provision in our Articles requiring holders
    of subordinate voting shares or multiple voting shares to contribute additional capital, or permitting or restricting the issuance of additional securities or any other material restrictions. The special rights or restrictions attached to the
    subordinate voting shares and multiple voting shares are subject to and may be adversely affected by, the rights attached to any series of preferred shares that we may designate in the future.

   

  Rank 

   

    

  The subordinate voting shares and multiple voting shares rank pari passu with respect to the payment of dividends, return of capital and distribution of
    assets in the event of the liquidation, dissolution or winding up of the Company. In the event of the liquidation, dissolution or winding-up of the Company or any other distribution of its assets among its shareholders for the purpose of winding-up its
    affairs, whether voluntarily or involuntarily, the holders of subordinate voting shares and the holders of multiple voting shares are entitled to participate equally in the remaining property and assets of the Company available for distribution to the
    holders of shares, without preference or distinction among or between the subordinate voting shares and the multiple voting shares, subject to the rights of the holders of any preferred shares.

   

  Dividends 

    

  

    

  The holders of outstanding subordinate voting shares and multiple voting shares are entitled to receive dividends at such times and in such amounts and form as our
    Board may from time to time determine, but subject to the rights of the holders of any preferred shares, without preference or distinction among or between the subordinate voting shares and the multiple voting shares. We are permitted to pay dividends
    unless there are reasonable grounds for believing that: (i) we are, or would after such payment be, unable to pay our liabilities as they become due; or (ii) the realizable value of our assets would, as a result of such payment, be less than the
    aggregate of our liabilities and stated capital of all classes of shares. In the event of a payment of a dividend in the form of shares, subordinate voting shares shall be distributed with respect to outstanding subordinate voting shares and multiple
    voting shares shall be distributed with respect to outstanding multiple voting shares, unless otherwise determined by our Board.

   

  Voting Rights 

    

  

    

  The holders of outstanding subordinate voting shares are entitled to one vote per share and the holders of multiple voting shares are entitled to four votes per
    share. As of March 31, 2020, the subordinate voting shares collectively represent approximately 84.1% of our issued and outstanding shares and approximately 56.9% of the voting power attached to all of our issued and outstanding shares and the multiple
    voting shares collectively represent approximately 15.9% of our issued and outstanding shares and approximately 43.1% of the voting power attached to all of our issued and outstanding shares.

   

  
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  Conversion 

   

    

  The subordinate voting shares are not convertible into any other class of shares. Each outstanding multiple voting share may at any time, at the option of the holder,
    be converted into one subordinate voting share. Upon the first date that a multiple voting share shall be held by a Person other than a Permitted Holder (each such term as defined herein), the Permitted Holder which held such multiple voting share
    until such date, without any further action, shall automatically be deemed to have exercised his, her or its rights to convert such multiple voting share into a fully paid and non-assessable subordinate voting share.

   

  In addition, all multiple voting shares held by Permitted Holders will convert automatically into subordinate voting shares at such time that is the earlier to occur
    of the following (i) Permitted Holders that hold multiple voting shares no longer as a group beneficially own, directly or indirectly and in the aggregate, at least 12.5% of the issued and outstanding subordinate voting shares and multiple voting
    shares (on a non-diluted basis), and (ii) Dax Dasilva is no longer serving as a director or member of senior management of the Company.

   

  For the purposes of the foregoing:

   

  “Members of the Immediate Family” means with respect to any individual, each parent (whether by birth or adoption), spouse, or child
    (including any step-child) or other descendants (whether by birth or adoption) of such individual, each spouse of any of the aforementioned Persons, each trust created solely for the benefit of such individual and/or one or more of the aforementioned
    Persons, and each legal representative of such individual or of any aforementioned Persons (including without limitation a tutor, curator, mandatary due to incapacity, custodian, guardian or testamentary executor), acting in such capacity under the
    authority of the law, an order from a competent tribunal, a will or a mandate in case of incapacity or similar instrument. For the purposes of this definition, a Person shall be considered the spouse of an individual if such Person is legally married
    to such individual, lives in a civil union with such individual or is the common law partner (as defined in the Income Tax Act (Canada) as amended from time to time) of such individual. A Person who was the spouse of an individual within the
    meaning of this paragraph immediately before the death of such individual shall continue to be considered a spouse of such individual after the death of such individual;

   

  “Permitted Holders” means (i) Dax Dasilva and any Members of the Immediate Family of Dax Dasilva, and (ii) any Person controlled, directly
    or indirectly, by one or more Persons referred to in clause (i) above

   

  “Person” means any individual, partnership, corporation, company, association, trust, joint venture or limited liability company; and

   

  A Person is “controlled” by another Person or other Persons if: (i) in the case of a company or other body corporate wherever or however
    incorporated: (A) securities entitled to vote in the election of directors carrying in the aggregate at least a majority of the votes for the election of directors and representing in the aggregate at least a majority of the participating (equity)
    securities are held, other than by way of security only, directly or indirectly, by or solely for the benefit of the other Person or Persons; and (B) the votes carried in the aggregate by such securities are entitled, if exercised, to elect a majority
    of the board of directors of such company or other body corporate; or (ii) in the case of a Person that is not a company or other body corporate, at least a majority of the participating (equity) and voting interests of such Person are held, directly
    or indirectly, by or solely for the benefit of the other Person or Persons; and “controls”, “controlling” and “under common control with” shall be interpreted accordingly.

   

  Subdivision or Consolidation 

   

  No subdivision or consolidation of the subordinate voting shares or the multiple voting shares may be carried out unless, at the same time, the multiple voting shares
    or the subordinate voting shares, as the case may be, are subdivided or consolidated in the same manner and on the same basis.

   

  Certain Class Votes 

   

  Except as required by the CBCA, applicable Canadian securities laws or our Articles, holders of subordinate voting shares and multiple voting shares will vote
    together on all matters subject to a vote of holders of both those classes of shares as if they were one class of shares. Under the CBCA, certain types of amendments to our Articles are subject to approval by special resolution of the holders of our
    classes of shares voting separately as a class, including amendments to:

   

  		•	add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class;

   

  
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  		•	increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class; and

   

  		•	make any class of shares having rights or privileges inferior to the shares of such class equal or superior to the shares of that class.

   

  Without limiting other rights at law of any holders of subordinate voting shares or multiple voting shares to vote separately as a class, neither the holders of the
    subordinate voting shares nor the holders of the multiple voting shares shall be entitled to vote separately as a class upon a proposal to amend our restated articles of incorporation in the case of an amendment to (1) increase or decrease any maximum
    number of authorized shares of such class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of such class; or (2) create a new class of shares equal or superior to the shares of
    such class, which rights are otherwise provided for in paragraphs (a), and (e) of subsection 176(1) of the CBCA. Pursuant to our restated articles of incorporation, neither holders of our subordinate voting shares nor holders of our multiple voting
    shares will be entitled to vote separately as a class on a proposal to amend our restated articles of incorporation to effect an exchange, reclassification or cancellation of all or part of the shares of such class pursuant to Section 176(1)(b) of the
    CBCA unless such exchange, reclassification or cancellation: (a) affects only the holders of that class; or (b) affects the holders of subordinate voting shares and multiple voting shares differently, on a per share basis, and such holders are not
    already otherwise entitled to vote separately as a class under applicable law or our restated articles of incorporation in respect of such exchange, reclassification or cancellation.

   

  Pursuant to our restated articles of incorporation, holders of subordinate voting shares and multiple voting shares will be treated equally and identically, on a per
    share basis, in certain change of control transactions that require approval of our shareholders under the CBCA, unless different treatment of the shares of each such class is approved by a majority of the votes cast by the holders of our subordinate
    voting shares and multiple voting shares, each voting separately as a class.

   

  Take-Over Bid Protection 

   

  Under applicable Canadian securities laws, an offer to purchase multiple voting shares would not necessarily require that an offer be made to purchase subordinate
    voting shares. In accordance with the rules of the TSX designed to ensure that, in the event of a take-over bid, the holders of subordinate voting shares will be entitled to participate on an equal footing with holders of multiple voting shares, the
    holders of multiple voting shares have entered into a customary coattail agreement with us and a trustee (the “Coattail Agreement”). The following is a summary of the material attributes and characteristics of the Coattail Agreement. This
    summary is qualified in its entirety by reference to the provisions of that agreement, which contains a complete statement of those attributes and characteristics. The Coattail Agreement has been filed with the Canadian securities regulatory
    authorities and available on the system for electronic document analysis and retrieval (“SEDAR”) at www.sedar.com.

   

  The Coattail Agreement contains provisions customary for dual-class, TSX-listed corporations designed to prevent transactions that otherwise would deprive the holders
    of subordinate voting shares of rights under applicable Canadian securities laws to which they would have been entitled if the multiple voting shares had been subordinate voting shares.

   

  The undertakings in the Coattail Agreement do not apply to prevent a sale by Permitted Holders of multiple voting shares if concurrently an offer is made to purchase
    subordinate voting shares that:

   

  		a)	offers a price per subordinate voting share at least as high as the highest price per share to be paid pursuant to the take-over bid for the multiple voting shares;

   

  		b)	provides that the percentage of outstanding subordinate voting shares to be taken up (exclusive of shares owned immediately prior to the offer by the offeror or persons acting jointly or in concert with the offeror)
          is at least as high as the percentage of outstanding multiple voting shares to be sold (exclusive of multiple voting shares owned immediately prior to the offer by the offeror and persons acting jointly or in concert with the offeror);

   

  		c)	has no condition attached other than the right not to take up and pay for subordinate voting shares tendered if no shares are purchased pursuant to the offer for multiple voting shares; and

   

  		d)	is in all other material respects identical to the offer for multiple voting shares.

   

  In addition, the Coattail Agreement does not prevent the transfer of multiple voting shares to Permitted Holders, provided such transfer is not or would not have been
    subject to the requirements to make a take-over bid (if the vendor or transferee were in Canada) or constitutes or would be exempt from certain requirements applicable to take-over bids under applicable Canadian securities laws. The conversion of
    multiple voting shares into subordinate voting shares, whether or not such subordinate voting shares are subsequently sold, would not constitute a disposition of multiple voting shares for the purposes of the Coattail Agreement.

   

  
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  Under the Coattail Agreement, any sale of multiple voting shares by a holder of multiple voting shares party to the Coattail Agreement will be conditional upon the
    transferee becoming a party to the Coattail Agreement, to the extent such transferred multiple voting shares are not automatically converted into subordinate voting shares in accordance with our restated articles of incorporation.

   

  The Coattail Agreement contains provisions for authorizing action by the trustee to enforce the rights under the Coattail Agreement on behalf of the holders of the
    subordinate voting shares. The obligation of the trustee to take such action is conditional on us or holders of the subordinate voting shares providing such funds and indemnity as the trustee may reasonably require. No holder of subordinate voting
    shares will have the right, other than through the trustee, to institute any action or proceeding or to exercise any other remedy to enforce any rights arising under the Coattail Agreement unless the trustee fails to act on a request authorized by
    holders of not less than 10% of the outstanding subordinate voting shares and reasonable funds and indemnity have been provided to the trustee.

   

  Other than in respect of non-material amendments and waivers that do not adversely affect the interests of holders of subordinate voting shares, the Coattail
    Agreement provides that, among other things, it may not be amended, and no provision thereof may be waived, unless, prior to giving effect to such amendment or waiver, the following have been obtained: (a) the consent of the TSX and any other
    applicable securities regulatory authority in Canada; and (b) the approval of at least two-thirds of the votes cast by holders of subordinate voting shares represented at a meeting duly called for the purpose of considering such amendment or waiver,
    excluding votes attached to subordinate voting shares held by the holders of multiple voting shares or their affiliates and related parties and any persons who have an agreement to purchase multiple voting shares on terms which would constitute a sale
    or disposition for purposes of the Coattail Agreement, other than as permitted thereby.

   

  No provision of the Coattail Agreement will limit the rights of any holders of subordinate voting shares under applicable law.

   

  Preferred Shares 

   

  The preferred shares are issuable at any time and from time to time in one or more series. The Board is authorized to fix before issue the number of, the
    consideration per share of, the designation of, and the provisions attaching to, the preferred shares of each series, which may include voting rights, the whole subject to the issue of a certificate of amendment setting forth the designation and
    provisions attaching to the preferred shares or shares of the series. Holders of preferred shares, except as otherwise provided in the terms specific to a series of preferred shares or as required by law, will not be entitled to vote at meetings of
    holders of shares, and will not be entitled to vote separately as a class upon a proposal to amend our Articles in the case of an amendment of the kind referred to in paragraph (a), (b) or (e) of subsection 176(1) of the CBCA. The preferred shares of
    each series, if and when issued, will, with respect to the payment of dividends, rank on parity with the preferred shares of every other series and will be entitled to preference over the subordinate voting shares, the multiple voting shares and any
    other shares ranking junior to the preferred shares with respect to payment of dividends and distribution of any property or assets in the event of the Company’s liquidation, dissolution or winding-up, whether voluntary or involuntary. We currently
    anticipate that the preferred shares will not carry any pre-emptive, redemption, conversion, exchange or retraction rights, nor will they contain any purchase for cancellation or surrender provisions, sinking or purchase fund provisions, provisions
    permitting or restricting the issuance of additional securities and any other material restrictions, or provisions requiring a securityholder to contribute additional capital.

   

  Warrants 

   

  On October 17, 2017, the Company issued warrants to Silicon Valley Bank in connection with the entry into a now-terminated loan and security agreement with Silicon
    Valley Bank which warrants, after giving effect to the 4-for-1 share consolidation and other capital changes effected by the Company on March 15, 2019, entitled the holder to purchase 37,500 subordinate voting shares of the Company at a price of $4.00
    per subordinate voting share for a period of 10 years. All such warrants were exercised on a net basis on June 26, 2019 and 31,647 subordinate voting shares were issued as a result.

   

  On April 15, 2014, the Company issued warrants to Hercules Capital, Inc., which warrants, after giving effect to the conversion of all of our issued and outstanding
    redeemable preferred shares into common shares and the 4-for-1 share consolidation and other capital changes effected by the Company on March 15, 2019, entitled the holder to purchase 61,403 subordinate voting shares of the Company at a price of
    $4.07142752 per subordinate voting share for a period of 10 years. All such warrants were exercised on a net basis on August 12, 2019 and 54,604 subordinate voting shares were issued as a result.

   

  Other Important Provisions of our Constating Documents

   

  Advance Notice Provisions 

   

  We have adopted an advance notice by-law that includes provisions with respect to the election of our directors in our restated articles of incorporation (the “Advance

      Notice Provisions”). The Advance Notice Provisions are intended to: (i) facilitate orderly and efficient annual general meetings or, where the need arises, special meetings; (ii) ensure that all shareholders receive adequate notice of Board
    nominations and sufficient information with respect to all nominees; and (iii) allow shareholders to register an informed vote. Only persons who are nominated by shareholders in accordance with the Advance Notice Provisions will be eligible for
    election as directors at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors.

   

  
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  Under the Advance Notice Provisions, a shareholder wishing to nominate a director would be required to provide us notice, in the prescribed form, within the
    prescribed time periods. These time periods require that we receive notice of a director’s nomination: (i) in the case of an annual meeting of shareholders (including annual and special meetings), not less than 30 days prior to the date of the annual
    meeting of shareholders; provided, that if the first public announcement of the date (the “Notice Date”) of the annual meeting of shareholders is less than 50 days before the meeting date, not later than the close of business on the 15th day following the Notice Date; and (ii) in the case of a special meeting (which is not also an annual meeting) of shareholders called for any purpose which includes
    electing directors, not later than the close of business on the 15th day following the Notice Date, provided that, in either instance, if notice-and-access (as defined in
    National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer) is used for delivery of proxy related materials in respect of a meeting described above, and the Notice Date in respect of the meeting is not
    less than 50 days prior to the date of the applicable meeting, the notice must be received not later than the close of business on the 40th day before the applicable
    meeting.

   

  Forum Selection 

   

  We have adopted a forum selection by-law that provides that, unless we consent in writing to the selection of an alternative forum, the courts of the Province of
    Québec, Canada and appellate courts therefrom (or, failing such court, any other “court” as defined in the CBCA having jurisdiction, and the appellate courts therefrom), will be the sole and exclusive forum for (1) any derivative action or proceeding
    brought on our behalf; (2) any action or proceeding asserting a breach of fiduciary duty owed by any of our directors, officers or other employees to us; (3) any action or proceeding asserting a claim arising pursuant to any provision of the CBCA or
    our restated articles of incorporation or by-laws, or (4) any action or proceeding asserting a claim otherwise related to our “affairs” (as defined in the CBCA). Our forum selection by-law also provides that our securityholders are deemed to have
    consented to personal jurisdiction in the Province of Québec and to service of process on their counsel in any foreign action initiated in violation of our by-law.

   

  Investor Rights Agreement

   

  In connection with closing of our IPO, we entered into an investor rights agreement (the “Investor Rights Agreement”) with DHIDasilva Holdings Inc., a company
    controlled by our founder and Chief Executive Officer, and Caisse (collectively, the “Principal Shareholders”), with respect to certain shareholder rights. The following is a summary of the material attributes and characteristics of the Investor
    Rights Agreement. This summary is qualified in its entirety by reference to the provisions of that agreement, which contains a complete statement of those attributes and characteristics. The Investor Rights Agreement has been filed with the Canadian
    securities regulatory authorities and is available on SEDAR at www.sedar.com.

   

  Nomination Rights 

   

  The Investor Rights Agreement provides that Caisse is entitled to nominate one of the Company’s directors as part of the slate of director candidates proposed by the
    Company in any management information circular, and will continue to be entitled to nominate such director for so long as it holds at least 20% of our subordinate voting shares and multiple voting shares (on a non-diluted basis). Moreover, for as long
    as Caisse holds at least 20% of our subordinate voting shares and multiple voting shares (on a non-diluted basis), the Company, acting reasonably, will consult Caisse in respect of any appointment or replacement of the Chair of the Board.

   

  The Investor Rights Agreement also provides that, should the Company grant additional nomination rights in the future to an investor other than Caisse, the Company
    shall cause such other investor to exercise all voting rights under its control to vote in favour of the nominee of Caisse, provided that such other investor may withhold from voting in favour of such nominee of Caisse.

   

  The nominee of Caisse designated under the Investor Rights Agreement must be considered independent within the meaning of NI 52-110. Quorum for meetings of the Board
    must include the nominee of Caisse, subject to customary exceptions.

   

  Restrictive Covenant 

   

  The Investor Rights Agreement limits the Company’s ability to prejudice the maintenance within Québec of its head office. Such restrictive covenant will continue to
    apply until the occurrence of either (i) Caisse ceasing to hold at least 15% of our subordinate voting shares and multiple voting shares (on a non-diluted basis) or (ii) seven years following the completion of our IPO.

   

  
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  Registration Rights 

   

  The Investor Rights Agreement provides for demand registration rights in favour of the Principal Shareholders that enable them, under certain circumstances, to
    require the Company to qualify by prospectus in Canada all or any portion of the subordinate voting shares held by them for a distribution to the public, provided that the Company is not obliged to effect (i) more than two demand registrations in any
    12-month period or (ii) any demand registration where the value of the subordinate voting shares offered under such demand registration is less than C$25 million.

   

  The Investor Rights Agreement also provides for incidental registration rights allowing the Principal Shareholders to include their subordinate voting shares in
    certain public offerings of subordinate voting shares, subject to certain underwriters’ cutback rights.

   

  
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  MARKET FOR SECURITIES

   

  Trading Price and Volume

   

  Our subordinate voting shares are listed for trading on the TSX under the symbol “LSPD”. The following table sets forth the price ranges and volumes of our
    subordinate voting shares traded on the TSX for each month of Fiscal 2020 during which our shares traded on the TSX.

   

  	Fiscal 2020	High (C$)	Low (C$)	Volume (#)
	April	25.40	20.64	2,202,850
	May	27.93	22.26	1,946,360
	June	38.14	27.64	4,823,200
	July	43.11	34.69	4,475,260
	August	49.70	36.16	8,423,840
	September	42.03	29.36	8,437,470
	October	35.78	27.97	5,524,250
	November	35.80	29.41	6,349,880
	December	38.44	31.92	6,706,920
	January	46.54	36.04	7,901,640
	February	45.82	31.60	12,747,650
	March	34.01	10.50	22,140,350

   

  None of our other securities were listed for trading or quoted on any exchange or market, however, as described further above, our multiple voting shares can be
    converted into subordinate voting shares on a one-for-one basis at any time, at the option of the holder thereof.

   

  DIRECTORS AND EXECUTIVE OFFICERS

   

  The following tables set out, as of the date of this Annual Information Form, for each of our directors and executive officers, the person’s name, municipality of
    residence, position(s) with the Company, previously held positions for the last five years and, if a director, the year in which the person became a director. Our directors are either elected annually by the shareholders at the annual meeting of
    shareholders or, subject to our restated articles of incorporation and applicable law, appointed by our board of directors between annual meetings. Each director holds office until the close of the next annual meeting of our shareholders or until he or
    she ceases to be a director by operation of law, or until his or her removal or resignation becomes effective. Executive officers are appointed by the Board to serve, subject to the discretion of the Board, until their successors are appointed.

   

  Directors

   

  	Name and Place of Residence	Position(s) with Lightspeed	Director Since	Principal Occupation	
          Previously Held Positions

          (Last Five Years)

        
	
          Patrick Pichette(1)(2)

          London, United Kingdom

        	Chair of the Board of Directors	2018	
          General Partner,

          Inovia Capital

        	
          Senior Vice President and Chief Financial Officer, Google Inc.

          (from 2008 to 2015)

        
	
          Marie-Josée Lamothe(2)

          Beaconsfield, Québec

        	Director	2018	President, Tandem International	
          Managing Director, Consumer Goods and Branding Canada, Google Canada

          (from 2014 to 2018)

        
	
          Paul McFeeters(1)(2)

          Milford, Ontario

        	Director	2018	Corporate Director	-
	
          Rob Williams(1)

          Edmonds, Washington

        	Director	2018	Corporate Director	
          Management Consultant

          (2016 to present)

           

          General Manager, Business Development, Global Vendor Management, International Retail, Amazon.com, Inc.

          (from 2014 to 2015)

        
	
          J.P. Chauvet

          Outremont, Québec

        	Director and President	2013	President	
          Chief Revenue Officer, Lightspeed POS Inc.

          (from 2012 to 2016)

        
	
          Dax Dasilva

          Westmount, Québec

        	Director and Chief Executive Officer	2005	Chief Executive Officer	-

  
  

  

  
    

  
  		(1)	Member of the Audit Committee. Mr. McFeeters is Chair of the Audit Committee.

  

  		(2)	Member of the Compensation, Nominating and Governance Committee. Mr. Pichette is Chair of the Compensation, Nominating and Governance Committee.

   

  
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  Executive Officers

   

  	Name and Place of Residence	Position(s) with Lightspeed	Years with Lightspeed	
          Previously Held Positions

          (Last Five Years)

        
	
          Dax Dasilva

          Westmount, Québec

        	Director and Chief Executive Officer	15	-
	
          J.P. Chauvet

          Outremont, Québec

        	Director and President	8	
          Chief Revenue Officer, Lightspeed POS Inc.

          (from 2012 to 2016)

        
	
          Brandon Nussey

          Waterloo, Ontario

        	Chief Financial Officer	2	
          Chief Financial Officer, D2L Inc.

          (from 2010 to 2018)

        
	
          Marty Reaume

          Mississauga, Ontario

        	Chief People Officer	0.5	
          Consultant, People Precision

          (from 2019 to 2020)

           

          Chief People Officer, Twilio Inc.

          (from 2017 to 2019)

           

          Chief People Officer, Fitbit Inc.

          (from 2015 to 2017)

        
	
          Jean-Michel Texier

          Outremont, Québec

        	Chief Product Officer	1	
          Chief Technology & Product Officer, SSENSE (Groupe Atallah Inc.)

          (from 2018 to 2019)

           

          Chief Technology & Product Officer, Global Fashion Group

          (from 2016 to 2018)

           

          Head of Digital and Big Data, AXA Group Solutions

          (from 2014 to 2016)

        
	
          Julian Teixeira

          Westmount, Québec

        	Senior Vice President of Global Sales	9	
          Vice President of Sales, North America, Lightspeed POS Inc.

          (from 2016 to 2018)

           

          Director of U.S. Sales

          (from 2012 to 2016)

        
	
          Adrian Valeriano

          London, United Kingdom

        	Senior Vice President and Managing Director of EMEA	0.5	
          Vice President EMEA, OpenTable, Inc.

          (from 2016 to 2020)

           

          Vice President, UK – Sales and Restaurant Relations, OpenTable, Inc.

          (from 2011 to 2016)

        
	
          Asha (Hotchandani) Bakshani

          Côte Saint-Luc, Québec

        	Senior Vice President of Finance	5	
          Vice President of Finance, Lightspeed POS Inc.

          (from 2015 to 2019)

        

   

  
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          Jean-Philippe Leblanc

          La Prairie, Québec

        	Senior Vice President of Development	2	
          Vice President of Development, Lightspeed POS Inc.

          (from 2018 to 2019)

           

          Vice President of Product Engineering, Shutterstock, Inc.

          (from 2017 to 2018)

           

          Director, Technology, Shutterstock, Inc.

          (from 2015 to 2017)

        
	
          Denise Nahas

          Montréal, Québec

        	Senior Vice President of Customer Support	7.5	
          Vice President of Customer Support, Lightspeed POS Inc.

          (from 2014 to 2019)

        
	
          Lory Ajamian

          Montréal, Québec

        	Vice President of Marketing	7.5	
          Director, Performance Marketing, Lightspeed POS Inc.

          (from 2018 to 2019)

           

          Senior Manager, Marketing Automation, Lightspeed POS Inc.

          (from 2017 to 2018)

           

          Senior Manager, Information Systems, Lightspeed POS Inc.

          (from 2016 to 2017)

           

          Project Manager and Business Analyst, Lightspeed POS Inc.

          (from 2014 to 2016)

        
	
          Isabelle Bénard

          Montréal, Québec

        	Vice President of Product Management	0.5	
          Sr. Director of Product Management, SSENSE (Groupe Atallah Inc.)

          (from 2018 to 2019)

           

          Director of Product Management, Global Fashion Group

          (from 2017 to 2018)

           

          Head of Product Management, Global Fashion Group

          (from 2016 to 2017)

           

          Head of Product Management, Amazon EU S.a.r.l

          (from 2014 to 2016)

        
	
          Nicholas Cloete

          Mosman, Australia

        	Vice President, APAC	0.5	
          Chief Executive Officer, Kounta Pty Ltd

          (from 2013 to 2019)

        
	
          Patrick Lacelle

          Montréal, Québec

        	Vice President of Operations	5.5	
          Director of Internal Operations, Lightspeed POS Inc.

          (from 2014 to 2015)

        
	
          Reinhard Martens

          Berlin, Germany

        	VP, Germany	0.5	
          Chief Executive Officer, Gastrofix GmbH

          (from 2012 to 2020)

        
	
          Daniel Micak

          Kitchener, Ontario

        	General Counsel & Corporate Secretary	2	
          Vice President, Assistant General Counsel & Assistant Corporate Secretary, D2L Inc.

          (from 2017 to 2018)

           

          Assistant General Counsel & Assistant Corporate Secretary, D2L Inc.

          (from 2011 to 2017)

        
	
          Christopher Schafer

          Burlington, Ontario

        	VP, Mid-Market and Strategic Accounts	0.5	
          VP of Sales, Oracle Corporation Canada Inc.

          (from 2017 to 2020)

           

          VP of Sales, NetSuite Inc.

          (from 2005 to 2017)

        

   

  Ownership of Securities

   

  As of May 19 2020, as a group, our directors and executive officers beneficially own, or control or direct, directly or indirectly, a total of 797,720 subordinate
    voting shares and 14,667,922 multiple voting shares, representing 1.03% of the subordinate voting shares and 100% of the multiple voting shares outstanding and 43.65% of the voting power attached to all of our issued and outstanding shares.

   

  
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  Cease Trade Orders, Bankruptcies, Penalties or Sanctions

   

  To the knowledge of Lightspeed, no director or executive officer of Lightspeed is, as at the date of this AIF, or was within 10 years before the date of this AIF, a
    director, chief executive officer or chief financial officer of any company (including Lightspeed), that: (a) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied such company access to any exemption
    under securities legislation (each an “Order”) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer, or (b) was subject to an Order that was issued after the
    director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief
    financial officer.

   

  To the knowledge of Lightspeed, no director or executive officer of Lightspeed, or a shareholder holding a sufficient number of securities of Lightspeed to materially
    affect the control of Lightspeed, (a) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any company (including Lightspeed) that, while that person was acting in that
    capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with
    creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (b) has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become
    subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

   

  To the knowledge of Lightspeed, no director or executive officer of Lightspeed, or a shareholder of Lightspeed holding a sufficient number of securities of Lightspeed
    to materially affect the control of Lightspeed has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities
    regulatory authority, or has been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor making an investment decision.

   

  Conflicts of Interest

   

  To the knowledge of Lightspeed, there are no existing or potentially material conflicts of interest between Lightspeed or a subsidiary of Lightspeed and any director
    or officer of Lightspeed or of a subsidiary of Lightspeed, except that certain of our directors and officers also serve as directors or officers of other companies, and therefore it is possible that a conflict may arise between their duties to us and
    their duties as a director or officer of such other companies. Directors are required to comply with the relevant provisions of the CBCA regarding conflicts of interest.

   

  AUDIT COMMITTEE

   

  Composition of the Audit Committee

   

  The Audit Committee consists of a minimum of three directors, all of whom are persons determined by the Board to be both independent directors and financially
    literate within the meaning of NI 52-110. The Audit Committee is currently comprised of Paul McFeeters, who acts as chair of this committee, Patrick Pichette and Rob Williams, all of whom are independent and meet the criteria for financial literacy
    established by applicable laws, including NI 52-110.

   

  Relevant Education and Experience of the Audit Committee Members

   

  Each of the Audit Committee members has an understanding of the accounting principles used to prepare financial statements and varied experience as to the general
    application of such accounting principles, as well as an understanding of the internal controls and procedures necessary for financial reporting. The education and experience of each Audit Committee member that is relevant to the performance of his
    responsibilities as an Audit Committee member is as follows:

   

  Paul McFeeters (Chair)

   

  Mr. McFeeters retired from OpenText in September 2014 where he had served as the Chief Financial Officer since June 2006. Mr. McFeeters has more than thirty years of
    C-level business experience, including previous employment as Chief Financial Officer of Platform Computing Inc., a grid computing software vendor from 2003 to 2006, and of Kintana Inc., a privately-held IT governance software provider, from 2000 to
    2003. Mr. McFeeters also held President and CEO positions at MD Private Trust from 1997 to 2000. Between 1981 and 1996 Mr. McFeeters worked at Municipal Financial Corporation and held various progressive positions there including Chief Financial
    Officer, Chief Operating Officer, President and Chief Executive Officer. Mr. McFeeters has been a member of the board of directors of Constellation Software Inc., a diversified software company, since October 2014 and serves on its audit committee.
    From 2015 to 2019, Mr. McFeeters was a board advisor for Hootsuite, a social media management company. From 2007 to January 2016, Mr. McFeeters was a member of the board of Blueprint Software Systems Inc., an enterprise requirements software solutions
    provider. Mr. McFeeters holds a B.B.A (Honours) from Wilfrid Laurier University and a MBA from Schulich School of Business at York University and is a Chartered Professional Accountant. Mr. McFeeters has been a director of Lightspeed since 2018.

   

  
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  Patrick Pichette

   

  Mr. Pichette is a General Partner at Inovia Capital, a full-stack venture firm that invests in technology companies focused on transforming complex legacy industries,
    such as financial services, healthcare, commerce, transportation and others, which he joined in April 2018. Mr. Pichette previously served as Senior Vice President and Chief Financial Officer of Google Inc. from August 2008 until May 2015. Prior to
    joining Google, from January 2001 until July 2008, Mr. Pichette served as an executive officer of Bell Canada Enterprises Inc., including, in his last position, as President, Operations for Bell Canada, and previously as Executive Vice President, Chief
    Financial Officer, and Executive Vice President of Planning and Performance Management. Prior to joining Bell Canada Enterprises Inc., from 1996 to 2000, Mr. Pichette was a principal at McKinsey & Company. Prior to that, from 1994 to 1996, he
    served as Vice President and Chief Financial Officer of Call-Net Enterprises Inc., a Canadian telecommunications company. Mr. Pichette has been a member of the board of directors of Twitter, Inc. since December 2017 and serves as chair of its audit
    committee. Mr. Pichette was previously a director of Bombardier Inc. from October 2013 to November 2017 and of Amyris, Inc., a renewable products company, from March 2010 to May 2013. Mr. Pichette holds a Master of Arts degree in philosophy, politics,
    and economics from Oxford University, where he attended as a Rhodes Scholar, and a Bachelor of Arts degree in Business Administration from Université du Québec à Montréal. Mr. Pichette has been a director of Lightspeed since 2018.

   

  Rob Williams

   

  Mr. Williams has over 20 years of online (Amazon), big box (Best Buy) and specialty retail (Magnolia Hi-Fi) experience. In his near decade at Amazon (2006 to 2015),
    Mr. Williams held five senior leadership positions on both the Retail and Seller teams. In his last role, Mr. Williams led Amazon’s Tier 1 Vendor team for Global Vendor Management. Prior to that, Mr. Williams led three business teams for Amazon’s
    Seller Fulfillment by Amazon (FBA) division: the Seller Reimbursement and Recovery/Liquidations team, the Contact Reduction team, and the Defect Reduction team. Previously, he led the FBA Product Development Roadmap team. Before that role, Mr. Williams
    led Product Management for Amazon’s Competitive Strategy and Negotiations Team. Prior to Amazon, Mr. Williams was on the leadership team of Magnolia Hi-Fi when they were acquired by Best Buy. Mr. Williams was promoted to National Director at Best Buy,
    where he led Sales Development for the Magnolia Home Theater store within a store project. Mr. Williams was at Magnolia Hi-Fi and Best Buy from September 1994 to June 2006. Prior to that in 1994 he was a criminal prosecutor under the City of Seattle’s
    Trial Advocacy Program. Mr. Williams holds his Bachelor of Arts degree in Business Administration from the University of Washington and his Juris Doctor, Law from the Willamette University College of Law. He is also a guest lecturer on International
    Business for the University of Washington School of Business Administration and a keynote speaker on how to build a company culture of Disruptive Innovation and consults worldwide on eCommerce, retail and technology. Mr. Williams has been a director of
    Lightspeed since 2018.

   

  Charter of the Audit Committee

   

  The Board has adopted a written charter, the text of which is reproduced in its entirety as Exhibit A, setting forth the purpose, composition, authority and
    responsibility of the Audit Committee, consistent with NI 52-110. The Audit Committee assists the Board in fulfilling its oversight of, among other things:

   

  		•	the quality and integrity of the Company’s financial statements and related information;

   

  		•	the qualifications, independence, appointment and performance of the external auditor;

   

  		•	the accounting and financial reporting policies, practices and procedures of the Company and its subsidiaries and affiliates;

   

  		•	the Company’s risk management practices and legal and regulatory compliance;

   

  		•	management’s design, implementation and effective conduct of internal controls over financial reporting and disclosure controls and procedures;

   

  		•	the performance of the Company’s internal audit function, if applicable; and

   

  		•	preparation of disclosures and reports required to be prepared by the Audit Committee by any law, regulation, rule or listing standard.

   

  
    57

    
      
 

  

   

  It will be the responsibility of the Audit Committee to maintain free and open means of communication between the Audit Committee, the external auditor and the
    management of the Company. The Audit Committee will be given full access to the Company’s management and records and external auditor as necessary to carry out these responsibilities. The Audit Committee will have the authority to carry out such
    special investigations as it sees fit in respect of any matters within its various roles and responsibilities. The Company shall provide appropriate funding, as determined by the Audit Committee, for the payment of compensation to the external auditor
    for the purpose of rendering or issuing an audit report and to any advisors employed by the Audit Committee.

   

   Audit Committee Pre-Approval Policies and Procedures

   

  Under its charter, the Audit Committee is required to pre-approve all non-audit services to be performed by the external auditors in relation to us, together with
    approval of the engagement letter for such non-audit services and estimated fees thereof. The pre-approval process for non-audit services also involves consideration of the potential impact of such services on the independence of the external auditors
    and whether the service for which approval is sought is a prohibited service under applicable laws, regulations, rules or listing standards.

   

  The Committee may delegate the pre-approval of services provided by the external auditor to one or more members of the Committee, which member(s) shall be independent
    to the extent required by any applicable law, regulation, rule or listing standard. Any such delegate shall report his or her approvals to the Committee at the next scheduled meeting.

   

  External Auditor Service Fee 

   

  For Fiscal 2020 and Fiscal 2019, we incurred the following fees with our external auditor, PricewaterhouseCoopers LLP:

   

  	 	 	
          Fiscal 2020

        	 	
          Fiscal 2019

        
	Audit fees(1)	 	C$	769,756	 	 	C$	145,000	 
	Audit related fees(2)	 	C$	122,379	 	 	C$	824,000	 (3)

          
	Tax fees(4)	 	C$	5,035	 	 	 	—	 
	All other fees(5)	 	C$	252,467	 	 	C$	7,250	 
	Total fees paid	 	C$	1,149,636	 	 	C$	976,250	 

   

  

   

  
  		(1)	Audit fees relate to professional services rendered for the audit of the Company’s annual consolidated financial statements and reviews of our interim consolidated financial statements
            for the first three quarters of the year, and fees associated with the audit of our prospectus supplements dated and August 15, 2019 and February 20, 2020.

  

  		(2)	Audit-related fees relate to professional services, including in connection with the implementation of new accounting standards and translation services.

  

  		(3)	These fees include services performed in anticipation of or in connection with the IPO such as conversion of the Company’s financial statements from U.S. GAAP to IFRS and document
            translations.

  

  		(4)	Fees for tax compliance, tax advice and tax planning.

  

  		(5)	All other fees not included above.

   

  LEGAL PROCEEDINGS AND REGULATORY ACTIONS

   

  We are, from time to time, involved in legal proceedings of a nature considered normal to our business. We believe that, other than the proceedings described in the
    next paragraph, none of the litigation in which we are currently involved, or have been involved since the beginning of our most recently completed financial year, individually or in the aggregate, is material to our consolidated financial condition,
    cash flows or results of operations.

   

  On June 1, 2016, two non-practicing entities, 99257 Canada Ltd. and 3811981 Canada Inc. (collectively, the “Plaintiffs”), filed proceedings against us and Dax
    Dasilva in Quebec Superior Court. The Plaintiffs allege that our legacy on-premise solution, Onsite, infringed and infringes their copyrighted “IRON” software. The Plaintiffs seek an ongoing royalty, C$27 million for disgorgement of profits,
    C$3 million in exemplary and punitive damages, plus interest, indemnity and costs. We filed a defense in the matter on June 7, 2019. We strongly disagree with the Plaintiffs’ position, hold that it is without merit, and intend to vigorously defend
    ourselves against the Plaintiffs’ claim. Should the Plaintiffs prevail in their claim, we could suffer harm both financially and to our reputation, including our ability to attract and retain customers. We have been not been court ordered to pay
    damages or fines to date.

   

  INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

   

  Other than as described elsewhere in this AIF, the Company’s audited consolidated financial statements and notes for Fiscal 2020 and Management’s Discussion and
    Analysis for Fiscal 2020, no director or executive officer of Lightspeed, and to the knowledge of the directors and executive officers of Lightspeed, (i) no person or company that beneficially owns, or controls or directs, directly or indirectly, more
    than 10 percent of Lightspeed’s voting shares, (ii) nor any of such persons’ or companies’ associates or affiliates, (iii) nor any associates or affiliates of any director of executive officer of Lightspeed, has had a material interest, direct or
    indirect, that has materially affected or is reasonably expected to materially affect the Company within the three most recently completed financial years or during the current financial year.

   

  
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  TRANSFER AGENT AND REGISTRAR

   

  The transfer agent and registrar for our subordinate voting shares is AST Trust Company (Canada) at its principal office in Montréal, Québec.

   

  MATERIAL CONTRACTS

   

  The following are the only material contracts, other than those contracts entered into in the ordinary course of business, which the Company has entered into since
    the beginning of the last financial year ended March 31, 2020, or entered into prior to such date, but which are still in effect and that are required to be filed with Canadian securities regulatory authorization in accordance with Section 12.2 of
    National Instrument 51-102 - Continuous Disclosure Obligations:

   

  		•	the Investor Rights Agreement.; and

   

  		•	the Coattail Agreement.

   

  See “Description of Share Capital – Investor Rights Agreement” and “Description of Share Capital – Take-Over Bid Protection”, for a summary of the Investor Rights
    Agreement and the Coattail Agreement, respectively. Copies of the foregoing agreements are available on SEDAR at www.sedar.com.

   

  INTERESTS OF EXPERTS

   

  PricewaterhouseCoopers LLP, the external auditors of Lightspeed, reported on the consolidated financial statements for Fiscal 2020, which were filed with the
    securities regulatory authorities. PricewaterhouseCoopers LLP have confirmed that they are independent within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario.

   

  
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  ADDITIONAL INFORMATION

   

  Additional information about Lightspeed is available on our website at www.lightspeedhq.com or the website maintained by the Canadian Securities Administrators at
    www.sedar.com.

   

  Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of our securities and securities authorized for issuance
    under equity compensation plans will be contained in our management information circular that will be filed in connection with our next annual meeting of shareholders. Once filed, the circular will be available on our website at www.lightspeedhq.com
    and at www.sedar.com.

   

  Additional financial information is provided in our consolidated financial statements and MD&A for the fiscal year ended March 31, 2020, available on our website
    at www.lightspeedhq.com and at www.sedar.com.

   

  References to our website in this AIF or any documents that are incorporated by reference in this AIF do not incorporate by reference the information on such website
    into this AIF, and we disclaim any such incorporation by reference.

   

  
    60

    
      
 

  

  
   

  EXHIBIT A

   

  LIGHTSPEED POS Inc. 

   

  AUDIT COMMITTEE CHARTER 

   

  		I.	GENERAL

   

  		1.	Mandate and Purpose of the Committee 

   

  The purpose of the Audit Committee (the “Committee”) is to assist the board of directors (the “Board”) of Lightspeed POS Inc. (the “Company”) in
    fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions, including the Board’s oversight of:

   

  		(a)	the quality and integrity of the Company’s financial statements and related information;

   

  		(b)	the qualifications, independence, appointment and performance of the external auditor;

   

  		(c)	the accounting and financial reporting policies, practices and procedures of the Company and its subsidiaries and affiliates;

   

  		(d)	the Company’s risk management practices and legal and regulatory compliance;

   

  		(e)	management’s design, implementation and effective conduct of internal controls over financial reporting and disclosure controls and procedures;

   

  		(f)	the performance of the Company’s internal audit function, if applicable; and

   

  		(g)	preparation of disclosures and reports required to be prepared by the Committee by any law, regulation, rule or listing standard.

   

  		2.	Authority of the Committee 

   

  		(a)	The Committee has the authority to delegate to subcommittees, provided however that the Committee shall not delegate any power or authority required by any law, regulation, rule or listing standard to be exercised by
          the Committee as a whole.

   

  		(b)	The Committee has the authority, and the Company will provide it with proper funding to enable it, to:

   

  		(i)	engage independent counsel and other advisors as it determines necessary or advisable to carry out its duties and to set and pay the compensation for any such advisors; and

   

  		(ii)	communicate directly with the external auditors and to obtain information it requires from employees, officers, directors and external parties.

   

  		II.	PROCEDURAL MATTERS

   

  		1.	Composition 

   

  The Committee will be composed of a minimum of 3 members.

   

  		2.	Member Qualifications 

   

  		(a)	Every Committee member must be a director of the Company.

   

  		(b)	Every Committee member must be qualified to serve on the Committee pursuant to the requirements of any applicable law, regulation, rule or listing standard, including being “independent” and “financially literate” as
          such terms are defined by applicable laws, regulations, rules and listing standards.

   

  		(c)	At least one member of the Committee will have accounting or related financial management experience or expertise and such person shall be designated the “audit committee financial expert” for the purposes of
          applicable securities laws, regulations, rules and listing standards.

   

  		3.	Member Appointment and Removal 

   

  Committee members will be appointed by the Board. The members of the Committee will be appointed promptly after each annual shareholders’ meeting and will hold office
    until a successor is appointed, they are removed by the Board or they cease to be directors of the Company.

   

  
    A-1

    
      
 

  

   

  Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board on the recommendation of the Committee and will be filled by the
    Board if the membership of the Committee falls below 3 directors.

   

  		4.	Committee Structure and Operations 

   

  		(a)	Chair

   

  The Board will appoint one Committee member to act as its chair (the “Chair”), provided that if the Board does not so designate a Chair, the
    Committee, by a majority vote, may designate a Chair. The Chair may be removed at any time at the discretion of the Board. The incumbent Chair will continue in office until a successor is appointed or he or she is removed by the Board or ceases to be a
    director of the Company. If the Chair is absent from a meeting, the Committee will, by majority vote, select another Committee member to preside at that meeting.

   

  		(b)	Meetings

   

  The Chair will be responsible for developing and setting the agenda for Committee meetings and determining the time, place and frequency (which shall be
    at least quarterly) of Committee meetings, provided that any member of the Committee or the external auditor may call a Committee meeting.

   

  		(c)	Notice

   

  		(i)	Notice of the time and place of every Committee meeting will be given verbally or in writing to each member of the Committee and to the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”)

          and the President of the Company at least 24 hours prior to the time fixed for such meeting.

   

  		(ii)	The external auditor of the Company will be given notice of every Committee meeting and, at the expense of the Company, will be entitled to attend and be heard thereat.

   

  		(iii)	If requested by a Committee member, the external auditor will attend every Committee meeting held during such external auditor’s term of office.

   

  		(d)	Quorum

   

  A majority of the Committee constitutes a quorum. No business may be transacted by the Committee except by resolution in writing signed by all the
    Committee members or at a Committee meeting at which a quorum of the Committee is present in person or by means of such telephonic, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each
    other simultaneously and instantaneously. At Committee meetings, Committee actions shall require approval of a majority of Committee members.

   

  		(e)	Attendees

   

  The Committee may invite any directors, officers and employees of the Company and any advisors as it sees fit from time to time to attend Committee
    meetings (or any part thereof) and assist in the discussion and consideration of matters relating to the Committee. The Committee will meet in camera at each meeting.

   

  		(f)	Secretary

   

  The Committee will appoint a secretary to the Committee who need not be a director or officer of the Company.

   

  		(g)	Records

   

  Minutes of Committee meetings will be recorded and maintained by the Committee’s secretary and will be presented to the Chair for review and approval.

   

  		5.	Committee and Charter Review 

   

  The Committee will annually review and assess its performance, effectiveness and contribution, including an evaluation of whether this Charter appropriately addresses
    the matters that are and should be within its scope. The Committee will conduct such review and assessment in such manner as it deems appropriate and report the results thereof to the Board, including any recommended changes to this Charter and to the
    Company’s policies and procedures.

   

  
    A-2

    
      
 

  

   

  		6.	Reporting to the Board 

   

  The Committee will report to the Board in a timely manner with respect to each of its meetings held. This report may take the form of circulating copies of the
    minutes of each meeting held.

   

  		III.	RESPONSIBILITIES

   

  		1.	Financial Reporting 

   

  		(a)	The Committee is responsible for:

   

  		(i)	discussing with management and the external auditor the quality and acceptability of accounting and financial reporting standards;

   

  		(ii)	discussing with management and the external auditor the Company’s internal controls and the integrity of the financial reporting and related attestations by the external auditors of the Company’s internal controls
          over financial reporting;

   

  		(iii)	in the course of discussion with management and the external auditor, identifying problems or areas of concern and ensuring such matters are satisfactorily resolved; and

   

  		(iv)	engaging the external auditor to perform a review of the interim financial statements required to be prepared by any applicable law, regulation, rule or listing standard and reviewing their findings; however, no
          formal report from the external auditor will be required.

   

  		2.	External Auditor 

   

  		(a)	The Company’s external auditor is required to report directly to the Committee.

   

  		(b)	The Committee is responsible for recommending to the Board:

   

  		(i)	the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company; and

   

  		(ii)	the compensation of the external auditor.

   

  		(c)	The Committee is directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the
          Company, including the resolution of disagreements between management and the external auditor regarding financial reporting.

   

  		(d)	The Committee is responsible for reviewing and approving the proposed audit scope, focus areas, timing and key decisions (e.g., materiality, reliance on internal audit) underlying the audit plan and the
          appropriateness and reasonableness of the proposed audit fees.

   

  		3.	Relationship with the External Auditor 

   

  The Committee is responsible for:

   

  		(a)	establishing effective communication processes with management, the Board and the external auditor so that it can objectively monitor the quality and effectiveness of the external auditor’s relationship with
          management and the Committee;

   

  		(b)	receiving and reviewing regular reports from the external auditor on the progress against the approved audit plan, important findings, recommendations for improvements and the auditors’ final report;

   

  		(c)	meeting regularly with the external auditor without management present;

   

  
    A-3

    
      
 

  

   

  		(d)	considering and reviewing with management the internal control memorandum or management letter containing the external auditor’s recommendations and management’s response, if any, including an evaluation of the
          adequacy and effectiveness of the Company’s internal financial controls and procedures for financial reporting and following up with respect to any identified weaknesses;

   

  		(e)	receiving and reviewing, at least as frequently as required by any applicable law, regulation, rule or listing standard, a report by the external auditor describing its internal quality control procedures and all
          relationships between the external auditor or any affiliates thereof and the Company or persons in financial reporting oversight roles at the Company that, as of the report’s date, may reasonably be thought to bear on independence, and discussing
          with the external auditor the potential effects of such relationships;

   

  		(f)	reviewing and approving the Company’s hiring policies regarding partners, employees and former partners and employees of the Company’s present and former external auditors; and

   

  		(g)	pre-approving all audit and non-audit services to be provided to the Company or its subsidiary entities by the Company’s external auditor where such pre-approval is required by any applicable law, regulation, rule or
          listing standard.

   

  The Committee may delegate the pre-approval of services provided by the external auditor to one or more members of the Committee, which member(s) shall be
    independent to the extent required by any applicable law, regulation, rule or listing standard. Any such delegate shall report his or her approvals to the Committee at the next scheduled meeting.

   

  		4.	Accounting Policies 

   

  The Committee is responsible for:

   

  		(a)	reviewing the Company’s accounting policy note to ensure completeness and acceptability with the accounting standards adopted by the Company as part of the approval of the financial statements;

   

  		(b)	reviewing with management and the external auditor any proposed changes in major accounting policies and key estimates and judgments that may be material to financial reporting;

   

  		(c)	discussing with management and the external auditor the acceptability, appropriateness (within the range of acceptable options and alternatives), degree of aggressiveness/conservatism and quality of underlying
          accounting policies, disclosures and key estimates and judgments; and

   

  		(d)	discussing with management and the external auditor the clarity and completeness of the Company’s financial and non-financial disclosures.

   

  		5.	Risk Management and Compliance 

   

  The Committee is responsible for:

   

  		(a)	reviewing, with Company counsel, compliance and legal matters that could have a significant impact on the Company’s financial statements, including pending or threatened material litigation;

   

  		(b)	discussing the Company’s policies with respect to risk assessment and risk management, the Company’s insurance coverage, as well as the Company’s major financial risk exposures and the steps management has undertaken
          to control them;

   

  		(c)	to the extent permitted by law, considering waivers of the Code of Business Conduct and Ethics applicable to members of the Compensation, Nominating and Governance Committee, and if appropriate, granting any such
          waivers;

   

  		(d)	in consultation with management, identifying the principal business and financial risks and deciding on the Company’s “appetite” for risk; and

   

  		(e)	making recommendations on the Company’s risk management practices.

   

  		6.	Controls and Control Deviations 

   

  		(a)	The Committee is responsible for reviewing and discussing:

   

  		(i)	management’s annual plan for monitoring of internal controls over financial reporting;

   

  		(ii)	the plan and scope of the annual audit with respect to planned reliance and testing of controls;

   

  		(iii)	major points contained in the auditor’s management letter resulting from control evaluation and testing; and

   

  		(iv)	the Company’s disclosure controls and procedures, including any significant deficiencies in or material non-compliance with, such controls and procedures.

   

  
    A-4

    
      
 

  

   

  		(b)	The Committee is also responsible for:

   

  		(i)	reviewing plans of the external auditors to ensure the combined evaluation and testing of control is comprehensive, well coordinated, cost effective and appropriate to risks, business activities and changing
          circumstances;

   

  		(ii)	receiving from management and the external auditors regular reports on all major control deviations, or indications/detection of fraud, and how such control breakdowns have been corrected;

   

  		(iii)	meeting regularly with management without the external auditor present; and

   

  		(iv)	reviewing the risk of management’s ability to override the Company’s internal controls.

   

  		(c)	The Committee shall review and discuss with the Company’s CEO, CFO and President the process for the certifications to be provided and receive and review any disclosure from the Company’s CEO, CFO and President made
          in connection with the required certifications of the Company’s quarterly and annual reports filed, including:

   

  		(i)	any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process,
          summarize and report financial data; and

   

  		(ii)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

   

  		(d)	The Committee shall establish procedures for:

   

  		(i)	the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and

   

  		(ii)	the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

   

  		7.	Relationship with the Internal Auditor 

   

  If no internal audit function exists, the Committee is responsible for periodically reviewing with management the need for such a function.

   

  		8.	Public Disclosure of Financial Information and Other Public Disclosure 

   

  In connection with the public disclosure of financial information and other public disclosure, the Committee shall:

   

  		(a)	review the Company’s annual and interim financial statements, MD&A, prospectus-type documents, earnings press releases (including financial outlook, future-oriented financial information and other forward-looking
          information) and other disclosure material filed with any securities commission before the Company publicly discloses this information and, if appropriate, recommend for approval by the Board, focusing particularly on:

   

  		(i)	any changes in accounting policies and practices;

   

  		(ii)	any material areas where judgment must be exercised;

   

  		(iii)	the going concern assumption, if any;

   

  		(iv)	compliance with accounting standards; and

   

  		(v)	subject to the advice of internal or external legal counsel, compliance with applicable laws, regulations, rules and listing standards;

   

  		(b)	review with management its evaluation of the Company’s procedures and controls designed to assure that information required to be disclosed in the Company’s periodic public reports is recorded, processed, summarized
          and reported in such reports within the time periods specified by applicable laws, regulations, rules and listing standards for the filing of such reports, and consider whether any changes are appropriate in light of management’s evaluation of
          the effectiveness of such disclosure controls;

   

  		(c)	as applicable, establish a policy, which may include delegation to an appropriate member or members of management, for release of earnings press releases as well as for the release of financial information and
          earnings guidance provided to analysts and rating agencies;

   

  
    A-5

    
      
 

  

  
   

  		(d)	satisfy itself that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements and periodically assess the
          adequacy of those procedures; and

   

  		(e)	to the extent deemed appropriate, review and supervise the preparation by management of:

   

  		(i)	any information of the Company required to be filed by the Company with applicable securities regulators or stock exchanges;

   

  		(ii)	press releases of the Company containing material financial information, earnings guidance, forward-looking statements, information about operations or any other material information;

   

  		(iii)	correspondence broadly disseminated to the shareholders of the Company; and

   

  		(iv)	other relevant material written and oral communications or presentations.

   

  		9.	Other Responsibilities 

   

  		(a)	The Chair of the Committee is responsible for setting forth the Committee’s expectations with respect to information (e.g., nature, level of detail, timing, reports, etc.) and ensuring the information received is
          responsive to important performance measures and to the key risks the Committee oversees.

   

  		(b)	The Committee is responsible for, and has the explicit authority, to investigate any matters that fall within the Committee’s responsibilities.

   

  		10.	Limitation on Duties of the Committee 

   

  The Committee shall discharge its responsibilities and shall assess the information provided by the Company’s management and any external advisors, including the
    external auditor, in accordance with its business judgment. Committee members are not full-time Company employees and are not, and do not represent themselves to be, professional accountants or auditors. The authority and responsibilities set forth in
    this Charter do not create any duty or obligation of the Committee to (i) plan or conduct any audits, (ii) determine or certify that the Company’s financial statements are complete, accurate, fairly presented or in accordance with IFRS or GAAP, as
    applicable, and applicable laws, regulation, rules or listing standards, (iii) guarantee the external auditor’s reports, or (iv) provide any expert or special assurance as to internal controls or management of risk. Committee members are entitled to
    rely, absent knowledge to the contrary, on the integrity of the persons from whom they receive information, the accuracy and completeness of the information provided and management’s representations as to any audit or non-audit services provided by the
    external auditor.

   

  Nothing in this Charter is intended or may be construed as to impose on any Committee member or the Board a standard of care or diligence that is in any way more
    onerous or extensive than the standard to which the directors are subject under applicable law. This Charter is not intended to change or interpret the Company’s amended articles of incorporation or by-laws or any law, regulation, rule or listing
    standard to which the Company is subject, and this Charter should be interpreted in a manner consistent with all such applicable laws, regulations, rules and listing standards. The Board may, from time to time, permit departures from the terms hereof,
    either prospectively or retrospectively, and no provision contained herein is intended to give rise to civil liability to Company securityholders or other liability whatsoever.

   

   A-6Exhibit 4.2 

   

  Lightspeed POS Inc.

   

  Consolidated Financial Statements

  March 31, 2020 and 2019 

  (expressed in thousands of US dollars)

   

  

   

  
    
      
 

  

   

   

   

  Independent auditor’s report

   

  To the Shareholders of Lightspeed POS Inc.

   

  

  
  
     

  

  
  Our opinion 

   

  In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
      financial position of Lightspeed POS Inc. and its subsidiaries (together, the Company) as at March 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting
      Standards as issued by the International Accounting Standards Board (IFRS).

   

  What we have audited  

  The Company’s consolidated financial statements comprise:

  

  		•	the consolidated balance sheets as at March 31, 2020 and 2019;

  

  		•	the consolidated statements of loss and comprehensive loss for the years then ended;

  		•	the consolidated statements of cash flows for the years then ended; and

  		•	the consolidated statements of changes in shareholders’ equity for the years then ended;

  		•	the notes to consolidated financial statements, which include a summary of significant accounting policies.

   

  

  
  
     

  

  
  Basis for opinion 

   

  We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
      under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report.

   

  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
      opinion.

   

  Independence 

  We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of
      the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

   

  

  
  
     

  

  
  Other information

   

  Management is responsible for the other information. The other information comprises the Management’s Discussion
      and Analysis and the information, other than the consolidated financial statements and our auditor’s report thereon, included in the annual report.

   

  

  	     

  PricewaterhouseCoopers LLP 

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

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

   

  “PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

   

  

   

  
    
      
 

  

   

   

   

  Our opinion on the consolidated financial statements does not cover the other information and we do not express
      any form of assurance conclusion thereon.

   

  In connection with our audit of the consolidated financial statements, our responsibility is to read the other
      information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

   

  If, based on the work we have performed, we conclude that there is a material misstatement of this other
      information, we are required to report that fact. We have nothing to report in this regard.

   

  

  
  
     

  

  
  Responsibilities of management and those charged with governance for the
        consolidated financial statements

   

  Management is responsible for the preparation and fair presentation of the consolidated financial statements in
      accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

   

  In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability
      to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
      alternative but to do so.

   

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

   

  

  
  
     

  

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

   

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

   

  As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
      judgment and maintain professional skepticism throughout the audit. We also:

   

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

   

  

   

  
    
      
 

  

   

  

   

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

   

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

   

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

   

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

   

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

   

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

   

  We also provide those charged with governance with a statement that we have complied with relevant ethical
      requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

   

  The engagement partner on the audit resulting in this independent auditor’s report is John B. Simcoe.

   

  /s/ PricewaterhouseCoopers LLP

   

  Montréal, Quebec 

      May 21, 2020  

  

  
  

   

  
    
      
 

  

  
   

  Lightspeed POS Inc.

  Consolidated Balance Sheets

  As at March 31, 2020, and 2019

  
  
     

  

  
  

  (expressed in thousands of US dollars)

   

  	 	 	Notes	 	 	2020	 	 	2019	 
	Assets	 	 	 	$	 	 	$	 
	Current assets	 	 	 	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	 	 	 	 	 	210,969	 	 	 	207,703	 
	Trade and other receivables	 	 	14	 	 	 	10,879	 	 	 	8,424	 
	Inventories	 	 	12	 	 	 	932	 	 	 	269	 
	Other current assets	 	 	6, 13	 	 	 	10,427	 	 	 	5,204	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total current assets	 	 	 	 	 	 	233,207	 	 	 	221,600	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lease right-of-use assets	 	 	15	 	 	 	15,957	 	 	 	—	 
	Property and equipment, net	 	 	16	 	 	 	7,989	 	 	 	5,372	 
	Intangible assets, net	 	 	17	 	 	 	62,819	 	 	 	2,618	 
	Goodwill	 	 	18	 	 	 	146,598	 	 	 	22,536	 
	Restricted cash and other long-term assets	 	 	6, 19	 	 	 	11,749	 	 	 	3,499	 
	Deferred tax assets	 	 	24	 	 	 	109	 	 	 	186	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total assets	 	 	 	 	 	 	478,428	 	 	 	255,811	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Liabilities and Shareholders’ Equity	 	 	 	 	 	 	 	 	 	 	 	 
	Current liabilities	 	 	 	 	 	 	 	 	 	 	 	 
	Accounts payable and accrued liabilities	 	 	20	 	 	 	30,810	 	 	 	16,183	 
	Lease liabilities	 	 	15	 	 	 	3,301	 	 	 	—	 
	Income taxes payable	 	 	24	 	 	 	76	 	 	 	135	 
	Current portion of deferred revenue	 	 	6	 	 	 	36,622	 	 	 	32,317	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total current liabilities	 	 	 	 	 	 	70,809	 	 	 	48,635	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Deferred tax liabilities	 	 	24	 	 	 	6,578	 	 	 	706	 
	Deferred revenue	 	 	6	 	 	 	5,472	 	 	 	8,025	 
	Lease liabilities	 	 	15	 	 	 	13,546	 	 	 	—	 
	Long-term debt	 	 	21	 	 	 	29,687	 	 	 	—	 
	Other long-term liabilities	 	 	22	 	 	 	8,198	 	 	 	1,779	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total liabilities	 	 	 	 	 	 	134,290	 	 	 	59,145	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shareholders’ equity	 	 	 	 	 	 	 	 	 	 	 	 
	Share capital	 	 	23	 	 	 	852,115	 	 	 	652,336	 
	Additional paid-in capital	 	 	23, 27	 	 	 	11,773	 	 	 	4,278	 
	Accumulated other comprehensive loss	 	 	 	 	 	 	(6,271	)	 	 	—	 
	Accumulated deficit	 	 	 	 	 	 	(513,479	)	 	 	(459,948	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total shareholders’ equity	 	 	 	 	 	 	344,138	 	 	 	196,666	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total liabilities and shareholders’ equity	 	 	 	 	 	 	478,428	 	 	 	255,811	 
	Commitments and contingencies	 	 	25, 26	 	 	 	 	 	 	 	 	 

   

  Approved by the Board of Directors

   

  

  	(signed) Paul McFeeters	Director	(signed) Dax Dasilva	Director

   

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

   

  

   

  
    5

    
      
 

  

   

  Lightspeed POS Inc.

  

  Consolidated Statements of Loss and Comprehensive Loss

  

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  

   

  (expressed in thousands of US dollars)

   

  	 	 	Notes	 	 	2020	 	 	2019	 
	 	 	 	 	 	 	 		$	 	 	 	$	 
	 	 	 	 	 	 		 	 	 	 	 	 
	Revenues	 	 	6	 	 	 	120,637	 	 	 	77,451	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Direct cost of revenues	 	 	7, 8, 9	 	 	 	43,199	 	 	 	23,573	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gross profit	 	 	 	 	 	 	77,438	 	 	 	53,878	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 
	General and administrative	 	 	9	 	 	 	24,486	 	 	 	13,790	 
	Research and development	 	 	8, 9	 	 	 	31,812	 	 	 	18,283	 
	Sales and marketing	 	 	9	 	 	 	55,388	 	 	 	39,043	 
	Depreciation of property and equipment	 	 	16	 	 	 	1,749	 	 	 	1,389	 
	Depreciation of right-of-use assets	 	 	15	 	 	 	2,492	 	 	 	—	 
	Foreign exchange loss (gain)	 	 	 	 	 	 	(395	)	 	 	987	 
	Acquisition-related compensation	 	 	5	 	 	 	11,087	 	 	 	454	 
	Amortization of intangible assets	 	 	17	 	 	 	9,226	 	 	 	3,148	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total operating expenses	 	 	 	 	 	 	135,845	 	 	 	77,094	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating loss	 	 	 	 	 	 	(58,407	)	 	 	(23,216	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fair value loss on Redeemable Preferred Shares	 	 	23	 	 	 	—	 	 	 	(191,219	)
	Interest income net of interest expense	 	 	10	 	 	 	1,766	 	 	 	181	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Loss before income taxes	 	 	 	 	 	 	(56,641	)	 	 	(214,254	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income tax expense (recovery)	 	 	24	 	 	 	 	 	 	 	 	 
	Current	 	 	 	 	 	 	49	 	 	 	59	 
	Deferred	 	 	 	 	 	 	(3,159	)	 	 	(30,788	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total income tax expense (recovery)	 	 	 	 	 	 	(3,110	)	 	 	(30,729	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net loss	 	 	 	 	 	 	(53,531	)	 	 	(183,525	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other comprehensive loss	 	 	 	 	 	 	 	 	 	 	 	 
	Items that may be reclassified to net loss	 	 	 	 	 	 	 	 	 	 	 	 
	Foreign currency differences on translation of foreign operations	 	 	 	 	 	 	(6,271	)	 	 	—	 
	Total comprehensive loss	 	 	 	 	 	 	(59,802	)	 	 	(183,525	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net loss per share – basic and diluted	 	 	11	 	 	 	(0.62	)	 	 	(5.53	)

   

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

   

  

   

  
    6

    
      
 

  

   

  Lightspeed POS Inc.

  

  Consolidated Statements of Cash Flows

  

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  

  

  	(expressed in thousands of US dollars)	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Cash flows from (used in) operating activities	 	 	 	 	 	 	 	 
	Net loss	 	 	(53,531	)	 	 	(183,525	)
	Items not affecting cash and cash equivalents	 	 	 	 	 	 	 	 
	Acquisition-related compensation	 	 	11,087	 	 	 	454	 
	Fair value loss on Redeemable Preferred Shares	 	 	—	 	 	 	191,219	 
	Amortization of intangible assets	 	 	9,226	 	 	 	3,148	 
	Depreciation of property and equipment and lease right-of-use assets	 	 	4,241	 	 	 	1,389	 
	Deferred income taxes	 	 	(3,159	)	 	 	(30,788	)
	Stock-based compensation expense	 	 	8,870	 	 	 	1,693	 
	Unrealized foreign exchange loss	 	 	475	 	 	 	929	 
	(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities 	 	 	 	 	 	 	 	 
	Trade and other receivables	 	 	2,071	 	 	 	(546	)
	Inventories	 	 	(401	)	 	 	(31	)
	Other assets	 	 	(3,440	)	 	 	(335	)
	Accounts payable and accrued liabilities	 	 	(1,329	)	 	 	5,647	 
	Income taxes payable	 	 	(59	)	 	 	(9	)
	Deferred revenue	 	 	(433	)	 	 	3,309	 
	Other long-term liabilities	 	 	(402	)	 	 	71	 
	Interest income net of interest expense	 	 	(1,766	)	 	 	(181	)
	 	 	 	 	 	 	 	 	 
	Total operating activities	 	 	(28,550	)	 	 	(7,556	)
	 	 	 	 	 	 	 	 	 
	Cash flows from (used in) investing activities	 	 	 	 	 	 	 	 
	Additions to property and equipment	 	 	(3,609	)	 	 	(2,030	)
	Payment of liabilities related to acquisition of business	 	 	(5,116	)	 	 	—	 
	Acquisition of businesses, net of cash acquired	 	 	(115,048	)	 	 	(1,389	)
	Interest income	 	 	3,480	 	 	 	—	 
	 	 	 	 	 	 	 	 	 
	Total investing activities	 	 	(120,293	)	 	 	(3,419	)
	 	 	 	 	 	 	 	 	 
	Cash flows from (used in) financing activities	 	 	 	 	 	 	 	 
	Proceeds from exercise of stock options	 	 	3,546	 	 	 	536	 
	Proceeds from issuance of share capital	 	 	130,933	 	 	 	207,547	 
	Proceeds from draw-down of long-term debt	 	 	30,000	 	 	 	—	 
	Share issuance costs	 	 	(6,893	)	 	 	(12,372	)
	Payment of lease liabilities and movement in restricted deposits	 	 	(3,401	)	 	 	—	 
	Financing costs	 	 	(653	)	 	 	—	 
	Repurchase of Common Shares	 	 	—	 	 	 	(792	)
	 	 	 	 	 	 	 	 	 
	Total financing activities	 	 	153,532	 	 	 	194,919	 
	 	 	 	 	 	 	 	 	 
	Effect of foreign exchange rate changes on cash and cash equivalents	 	 	(1,423	)	 	 	(892	)
	 	 	 	 	 	 	 	 	 
	Net increase in cash and cash equivalents during the year	 	 	3,266	 	 	 	183,052	 
	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents – Beginning of year	 	 	207,703	 	 	 	24,651	 
	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents – End of year	 	 	210,969	 	 	 	207,703	 
	 	 	 	 	 	 	 	 	 
	Interest paid	 	 	320	 	 	 	26	 
	Income taxes paid	 	 	113	 	 	 	124	 

   

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

   

  

   

  
    7

    
      
 

  

   

  Lightspeed POS Inc.

  

  Consolidated Statements of Changes in Shareholders' Equity

  

  For the years ended March 31, 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

            loss	 	 	Accumulated

            deficit	 	 	Total	 
	 	 	 	 	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at March 31, 2018	 	 	 	 	 	 	29,366,937	 	 	 	14,325	 	 	 	2,804	 	 	 	—	 	 	 	(282,690	)	 	 	(265,561	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Beginning accumulated deficit IFRS adjustments (IFRS 9 and 15)	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	6,267	 	 	 	6,267	 
	Net loss and comprehensive loss	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(183,525	)	 	 	(183,525	)
	Issuance of shares upon initial public offering	 	 	23	 	 	 	17,250,000	 	 	 	207,547	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	207,547	 
	Share issuance costs	 	 	23	 	 	 	—	 	 	 	(13,773	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(13,773	)
	Conversion of Redeemable Preferred Shares	 	 	23	 	 	 	37,131,198	 	 	 	442,103	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	442,103	 
	Exercise of stock options and vesting of share awards	 	 	27	 	 	 	434,774	 	 	 	755	 	 	 	(219	)	 	 	—	 	 	 	—	 	 	 	536	 
	Stock-based compensation	 	 	27	 	 	 	—	 	 	 	—	 	 	 	1,693	 	 	 	—	 	 	 	—	 	 	 	1,693	 
	Repurchase of Common Shares	 	 	23	 	 	 	(966,651	)	 	 	(792	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(792	)
	Share-based acquisition-related compensation	 	 	5	 	 	 	208,772	 	 	 	394	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	394	 
	Shares issued in connection with business combinations	 	 	5	 	 	 	327,180	 	 	 	1,777	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,777	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at March 31, 2019	 	 	 	 	 	 	83,752,210	 	 	 	652,336	 	 	 	4,278	 	 	 	—	 	 	 	(459,948	)	 	 	196,666	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net loss	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(53,531	)	 	 	(53,531	)
	Issuance of shares upon Bought Deal Offering	 	 	23	 	 	 	4,695,000	 	 	 	130,933	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	130,933	 
	Share issuance costs	 	 	23	 	 	 	—	 	 	 	(6,315	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(6,315	)
	Exercise of stock options and vesting of share awards	 	 	27	 	 	 	1,470,303	 	 	 	4,921	 	 	 	(1,375	)	 	 	—	 	 	 	—	 	 	 	3,546	 
	Stock-based compensation	 	 	27	 	 	 	—	 	 	 	—	 	 	 	8,870	 	 	 	—	 	 	 	—	 	 	 	8,870	 
	Exercise of warrants	 	 	23	 	 	 	86,251	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Share-based acquisition-related compensation	 	 	5	 	 	 	—	 	 	 	4,876	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	4,876	 
	Shares issued in connection with business combinations	 	 	5	 	 	 	2,203,053	 	 	 	65,364	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	65,364	 
	Other comprehensive loss	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(6,271	)	 	 	—	 	 	 	(6,271	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance as at March 31, 2020	 	 	 	 	 	 	92,206,817	 	 	 	852,115	 	 	 	11,773	 	 	 	(6,271	)	 	 	(513,479	)	 	 	344,138	 

   

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

   

  

   

  
    8

    
      
 

  

   

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  

  (expressed in thousands of US dollars)

   

  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 consolidated financial statements have been prepared in accordance with International Financial
      Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and were approved for issue by the Board of Directors (the “Board”) of the Company on May 21, 2020.

   

  The consolidated financial statements have been prepared on a historical cost basis
      except for contingent consideration, which was carried at fair value and our lease liabilities which are measured at present value. Certain comparative figures have been reclassified in order to conform to the current period presentation.

   

  The consolidated financial statements include the accounts of Lightspeed and its wholly-owned
      subsidiaries, Lightspeed POS USA Inc., Lightspeed POS Belgium BV, Lightspeed POS UK Ltd., Lightspeed Netherlands BV, Lightspeed Payments USA Inc., ReUp Technologies Inc. (“ReUp”), Chronogolf Inc. (“Chronogolf”), iKentoo SA (“iKentoo”), Kounta Pty Ltd
      (“Kounta”) and Gastrofix GMBH (“Gastrofix”) (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated on consolidation.

   

  The financial statements of all subsidiaries, including those of new subsidiaries of Lightspeed from the
      reporting period starting on their acquisition or incorporation date, are prepared for the same reporting period as Lightspeed using Lightspeed’s accounting policies. All subsidiaries are fully consolidated until the date that Lightspeed’s control
      ceases.

   

  The consolidated financial statements provide comparative information in respect of the previous
      periods. On April 1, 2019, the Group adopted IFRS 16, Leases, using the modified retrospective approach. Refer to note 15 for further information on comparability following the adoption.

   

  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 4 of these consolidated financial
      statements for a description of how COVID-19 impacted the Company’s significant accounting estimates and assumptions.

   

  3.  Significant accounting policies

   

  Revenue recognition

   

  The Company’s main sources of revenue are subscriptions for its platforms as well as subscriptions and
      licences for its legacy product. In addition, the Company generates revenue from Lightspeed Payments, payment residuals, Apps & Themes, professional services and sales of hardware, as described below.

   

  
    9

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Software and payments revenue

   

  Software subscriptions and licences

   

  Software subscriptions and licences include subscriptions to cloud-based solutions for both retail and
      hospitality platforms and for the Company’s e-commerce offering, as well as the Company’s legacy on-premise retail solution, which is downloaded by the customer and installed on the customer’s server. The Company’s on-premise solution is sold as a
      subscription (term licence) with associated maintenance. In addition to the core subscriptions and licences outlined above, merchants can purchase add-on services such as loyalty, advanced reporting, accounting and analytics. Subscriptions include
      maintenance and support, which includes access to unspecified upgrades.

   

  Payment residuals

   

  The Company’s software interfaces with third parties that enable credit card processing. These
      companies generate revenue from charging transaction fees that are generally a fixed amount per transaction, or a fixed percentage of the transaction processed. As part of integrating with the solutions of these payment processors, the Company
      negotiates a revenue share with most of them, whereby the Company receives a portion of the revenues generated by the payment processor. In addition, the Company has contracted with a number of third-party vendors that sell products to the same
      merchant customers as does the Company. The Company refers its merchant customers to these vendors and earns a referral fee.

   

  Lightspeed Payments

   

  The Company offers to its merchants payment processing services that facilitate payment for goods and
      services sold by the merchant to its customers.

   

  Apps & Themes

   

  The Company’s e-commerce solution features an app and theme marketplace (Apps & Themes) on which
      third party developer-built add-ons can be purchased. The Company earns a portion of the revenue generated by the sales of subscriptions to Apps & Themes add-ons.

   

  Hardware and other

   

  Hardware and implementation services

   

  For retail, hospitality and e-commerce customers, the Company’s software integrates with various
      hardware solutions required to operate a location. As part of the sale process to both new and existing customers, the Company acts as a reseller of the hardware. Such sales consist primarily of hardware peripherals. In addition, in some cases where
      customers would like assistance deploying the Company’s software or integrating the Company’s software with other systems or setting up their e-commerce store, the Company provides professional services customized to the merchant.

   

  Revenue recognition from the above-mentioned sources

   

  The Company recognizes revenue to depict the transfer of promised services to merchants in an amount
      that reflects the consideration to which the Company expects to be entitled in exchange for those services by applying the following steps:

   

  		•	Identify the contract with a merchant;

   

  		•	Identify the performance obligations in the contract;

   

  		•	Determine the transaction price;

   

  		•	Allocate the transaction price; and

   

  		•	Recognize revenue when, or as, the Company satisfies a performance obligation.

   

  
    10

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  The Company follows the guidance provided in IFRS 15 – Appendix B, Principal versus Agent
      Considerations, for determining whether the revenue should be recognized based on the gross amount billed to a merchant or the net amount retained. This determination is a matter of judgment that depends on the facts and circumstances of each
      arrangement.

   

  Sales taxes collected from merchants and remitted to government authorities are excluded from revenue.

   

  The Company’s arrangements with merchants can include multiple services or performance obligations,
      which may consist of some or all of the Company’s subscription solutions. When contracts involve various performance obligations, the Company evaluates whether each performance obligation is distinct and should be accounted for as a separate unit of
      accounting. In the case of software subscriptions and licences and hardware and other, the Company has determined that merchants can benefit from each service on its own, and that each service being provided to the merchant is separately identifiable
      from other promises in the contract. Specifically, the Company considers the distinct performance obligations to be the software subscriptions and licences, Apps & Themes and the hardware and implementation services. Payment residuals and
      Lightspeed Payments were also considered to be distinct performance obligations.

   

  The total transaction price is determined at the inception of the contract and allocated to each
      performance obligation based on their relative standalone selling prices. The Company determined the standalone selling price by considering internal evidence such as normal or consistently applied standalone selling prices. The determination of
      standalone selling prices is made through consultation with and approval by management, taking into consideration the Company’s go-to-market strategy. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in
      the future, which could result in changes in relative standalone selling prices. Rebates are allocated to each performance obligation that they relate to based on their relative standalone selling price.

   

  The Company generally receives payment from its merchants on the invoice due date.
      In all other cases, payment terms and conditions vary by contract type, although terms generally include a requirement for payment within 14 days of the invoice date. In instances where the timing of revenue recognition differs from the timing of
      invoicing and subsequent payment, we have determined the Company’s contracts generally do not include a significant financing component.

   

  Software subscriptions and licences

   

  The Company recognizes revenues for its software subscriptions and subscription licences ratably over
      the contract term, primarily commencing with the date the services are made available to customers. Support fees are typically paid in advance and are recognized on a straight-line basis over the term of the contract.

   

  Payment residuals

   

  The Company recognizes the revenue it receives from third party vendors on a net basis, whereby only
      the portion of revenues that the Company receives (or is due) from the counterparty is recognized. These revenues are recognized at a point in time when they are due from third party vendors.

   

  Lightspeed Payments

   

  The Company recognizes revenue from Lightspeed Payments at a point in time, at the time of the
      transaction, on a gross basis, as it has been determined that the Company is the principal in the arrangement.

   

  Apps & Themes

   

  Revenues from the sale of separately priced Apps & Themes are recognized ratably over time, over
      the contractual term. The Company recognizes revenue from the sales of Apps & Themes on a net basis, as it has been determined that the Company is the agent in the arrangement with merchants.

   

  

  
    11

    
      
 

  

   

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Hardware

   

  Hardware equipment revenues are recognized on a gross basis at a point in time, based on the receipt
      of the goods by the customer in accordance with the shipping terms.

   

  Professional services

   

  Most professional services are sold on a time-and-materials basis. Consulting engagements can last
      anywhere from one day to several weeks and are based strictly on the customer’s requirements. The Company’s software, as delivered, typically can be used by the customer. The Company’s professional services are generally not essential to the
      functionality of the software. For services performed on a time-and-materials basis, revenues are recognized as the services are delivered.

   

  Contract assets

   

  The Company records commission assets for selling commissions paid at the inception of a contract that
      are incremental costs of obtaining the contract, if the Company expects to recover those costs. Commission assets are subsequently amortized on a straight-line basis over the expected life of the customer. Incremental selling commissions to obtain a
      renewal of a contract are capitalized and amortized on a straight-line basis over the renewal period of the contract.

   

  The Company records contract assets for discounts provided to merchants at the inception of a contract
      that are amortized against revenue over the expected life of the customer.

   

  Deferred revenue

   

  Deferred revenue mainly comprises fees collected or contractually due for services in which the
      applicable revenue recognition criteria have not been met. This balance will be recognized as revenue as the services are performed.

   

  Cash and cash equivalents

   

  The Company considers all highly liquid investments purchased with an original maturity of three
      months or less to be cash equivalents.

   

  Restricted cash

   

  The Company is required to hold a defined amount of cash as collateral under the terms of certain
      business combination arrangements and lease agreements. Cash deposits that have restrictions governing their use are classified as restricted cash, current or long-term, based on the remaining length of the restriction.

   

  Inventories

   

  Inventories, consisting of hardware equipment only, are recorded at the lower of cost and net
      realizable value with cost determined using the weighted average cost method. The Company provides an allowance for obsolescence based on estimated product life cycles, usage levels and technology changes. Changes in these estimates are reflected in
      the determination of cost of revenues.

   

  The amount of any impairment of inventories to net realizable value, and all losses
      on inventories are recognized as an expense in the year during which the impairment or loss occurs.

   

  Deferred financing costs

   

  The Company records deferred financing costs related to its credit facilities when it is probable that
      some or all of the facilities will be drawn down. The deferred financing costs are amortized over the term of the related financing arrangement. The long-term debt is recorded net of deferred financing costs.

   

  
    12

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Research and development tax credits

   

  Research and development costs are expensed as incurred, net of refundable
      investment tax credits. The Company’s research and development costs consist primarily of salaries and other related personnel expenses.

   

  The Company recognizes the benefit of refundable research and development investment
      tax credits as a reduction of research and development and support costs, while non-refundable investment tax credits that can only be claimed against income taxes otherwise payable are recognized as a reduction of income taxes when there is
      reasonable assurance that the claim will be recovered.

   

  Property and equipment

   

  Property and equipment are recorded at cost less accumulated depreciation and impairment losses.
      Depreciation is recognized using the declining balance method at the following rates, except for leasehold improvements, for which depreciation is calculated on a straight-line basis:

   

  	Furniture	20%
	Equipment	20%
	Computer equipment	55%
	Leasehold improvements	Shorter of useful life and term of lease

   

  Leasehold improvements in progress are not depreciated until the related asset is ready for use.

   

  Intangible assets

   

  Acquired identifiable intangible assets

   

  Purchased software licences are recorded at cost and are amortized on a straight-line basis over the
      life of the licence, which is the licence term.

   

  Amortization of software technologies that are acquired through business combinations is calculated
      using the straight-line method over the estimated useful life, which ranges from three to four years, and amortization of customer relationships acquired through business combinations is calculated using the straight-line method over the estimated
      useful life, which ranges from three to five years.

   

  Impairment of long-lived assets

   

  The Company evaluates its property and equipment and definite-lived intangible assets for impairment
      when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
      recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are
      largely independent of the cash inflows from other assets or groups of assets (cash-generating units).

   

  Goodwill and impairment of goodwill

   

  Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and
      identifiable intangible assets acquired in business combinations. After initial recognition, goodwill is measured at cost less any accumulated impairment losses, if any. For the purpose of impairment testing, goodwill acquired in a business
      combination is allocated to the Company’s operating segment (“the Segment”), which is the level at which management monitors goodwill.

   

  

  
    13

    
      
 

  

   

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  The Company reviews the carrying value of goodwill in accordance with International Accounting
      Standard (IAS) 36, Impairment of Assets, on an annual basis on March 31 or more frequently if events or a change in circumstances indicate that it is more likely than not that the fair value of the goodwill is below its carrying amount. Impairment is
      determined by assessing the recoverable amount of the Segment. The Segment’s recoverable amount is the higher of the Segment’s fair value less costs of disposal and its value in use. A quantitative analysis was performed to determine the fair value
      less costs of disposal. Note 18 discusses the method and assumptions used for impairment testing.

   

  Business combinations

   

  The Company follows the acquisition method to account for business combinations in
      accordance with IFRS 3, Business Combinations. The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their estimated fair values on the date of a business acquisition.

   

  The amounts included in the consolidated statement of loss and comprehensive loss under
      acquisition-related compensation arise from business combinations made by the Company. Acquisition costs that are tied to continuing employment of pre-existing shareholders are required to be recognized as acquisition-related compensation and
      recognized in accordance with the vesting terms in the acquisition agreement. Consequently, those costs are not included in the total purchase consideration of the business combination. All other costs that are not eligible for capitalization related
      to the acquisition are expensed as incurred.

   

  New information obtained during the measurement period, up to 12 months following the acquisition
      date, about facts and circumstances existing at the acquisition date affect the acquisition accounting.

   

  Government assistance

   

  Government assistance, which mainly includes investment and other tax credits, is recognized when
      there is reasonable assurance that it will be received and all related conditions will be complied with. When the government assistance relates to an expense item, it is recognized as a reduction of expense over the period necessary to match the
      government assistance on a systematic basis to the costs that it is intended to subsidize.

   

  Income taxes

   

  		i)	Current tax

   

  The current tax payable is based on taxable income for the year. Taxable income
      differs from income as reported in the consolidated statement of loss and comprehensive loss because of items of income or expense that are taxable or deductible in other periods and items that are never taxable or deductible. The Company’s liability
      for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

   

  		ii)	Deferred tax

   

  Deferred tax is recognized on temporary differences between the carrying amounts of assets and
      liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all
      deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the
      temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

   

  The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
      to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

   

  
    14

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
      period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the
      tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

   

  Deferred tax assets and liabilities are offset when there is a legally enforceable
      right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

   

  		iii)	Current and deferred tax

   

  Current and deferred tax are recognized as an expense or income in profit or loss, except when they
      relate to items that are recognized outside of profit or loss (whether in other comprehensive loss or directly in deficit), in which case the tax is also recognized outside of profit or loss.

   

  Provisions

   

  Provisions are recognized when the Company has a present legal or constructive
      obligation (a) as a result of a past event; (b) when it is more probable than not that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) when a reliable estimate can be made of the amount of the
      obligation. The expense relating to any provision is accounted for in the consolidated statement of loss and comprehensive loss, net of any reimbursement.

   

  If the known expected settlement date exceeds 12 months from the date of recognition, provisions are
      discounted using a current pre-tax interest rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a financial expense. Provisions are reviewed
      periodically and adjusted as appropriate.

   

  Leases

   

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

   

  – The Company has the right to obtain substantially all the economic benefits from the use of the
      asset throughout the period of use; and

   

  – The Company has the right to direct the use of the asset. The Company has this right when it has 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, the Company allocates
      the consideration in the contract to each lease component on the basis of its relative standalone price.

   

  As a lessee

   

  The Company recognizes 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 or before the commencement date, plus any initial direct costs incurred and an estimate of costs to
      dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received 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.

   

  
    15

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  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 any such asset. 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 subsequently 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 the Company changes its assessment of whether it 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

   

  The Company has 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. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

   

  On the consolidated 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, whereas the remaining lease payments are classified as cash flows from financing activities.

   

  Disclosures relating to IFRS 16 can be found in note 15. The adoption of IFRS 16 resulted in the
      derecognition of deferred rent liabilities of $1,197, the recognition of lease right-of-use assets of $11,971 and lease liabilities of $13,168, on the consolidated balance sheet as of April 1, 2019. There was no impact to the consolidated statement
      of loss and comprehensive loss or on the accumulated deficit upon adoption. Except for the first-time application of IFRS 16, none of the new or amended standards and interpretations as of April 1, 2019 have had a material impact on the Company’s
      financial results or position.

   

  Equity incentive plan

   

  The Company has multiple equity incentive plans and records all stock-based payments, including grants
      of employee stock options, at their respective fair values. The Company recognizes stock-based compensation expense over the vesting period, over the life of the tranche of shares being considered. The fair value of stock options granted to employees
      is estimated at the date of grant using the Black-Scholes option pricing model. The Company also estimates forfeitures at the time of grant and revises its estimate, if necessary, in subsequent periods if actual forfeitures differ from these
      estimates. Any consideration paid by employees on exercising stock options and the corresponding portion previously credited to additional paid-in capital are credited to share capital.

   

  The Black-Scholes option pricing model used by the Company to calculate option values was developed to
      estimate the fair value. This model also requires assumptions, including expected option life, volatility, risk-free interest rate and dividend yield, which greatly affect the calculated values.

   

  
    16

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Expected option life is determined using the time-to-vest-plus-historical-calculation-from-vest-date
      method that derives the expected life based on a combination of each tranche’s time to vest plus the actual or expected life of an award based on the past activity or remaining time to expiry on outstanding awards. Expected forfeiture is derived from
      historical patterns. Expected volatility is determined using comparable companies for which the information is publicly available, adjusted for factors such as industry, stage of life cycle, size and financial leverage. The risk-free interest rate is
      determined based on the rate at the time of grant and cancellation for zero-coupon Canadian government securities with a remaining term equal to the expected life of the option. Dividend yield is based on the stock option’s exercise price and
      expected annual dividend rate at the time of grant.

   

  The fair value of restricted share units (“RSUs”), deferred share units (“DSUs”) and performance share
      units (“PSUs”) is measured using the fair value of the Company’s shares as if the units were vested and issued on the grant date. An estimate of forfeitures is applied when determining stock-based compensation expense as well as estimating the
      probability of meeting related performance conditions where applicable.

   

  Employee benefits

   

  The Company maintains defined contribution plans for which it pays fixed contributions to administered
      pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no legal or constructive obligation to pay further amounts if the fund does not hold sufficient assets to pay the benefits to all employees. Obligations for
      contributions to defined contribution pension plans are recognized as employee compensation as the services are provided.

   

  Segment information

   

  The Company’s Chief Operating Decision-Maker (CODM) is a function comprising three C-Level executives,
      specifically the Chief Executive Officer, the Chief Financial Officer and the President. The CODM is the highest level of management responsible for assessing Lightspeed’s overall performance and making operational decisions such as resource
      allocations related to operations, product prioritization, and delegation of authority. Management has determined that the Company operates in a single operating and reportable segment.

   

  Loss per share

   

  Basic loss per share is calculated by dividing net loss attributable to common equity holders of the
      Company by the weighted average number of Common Shares outstanding during the year.

   

  Diluted loss per share is calculated by dividing net loss attributable to common equity holders of the
      Company by the weighted average number of Common Shares outstanding during the year, plus the effect of dilutive potential Common Shares outstanding during the year. This method requires that diluted loss per share be calculated as if all dilutive
      potential Common Shares had been exercised at the latest of the beginning of the year or on the date of issuance, as the case may be, and that the funds obtained thereby (plus an amount equivalent to the unamortized portion of related stock-based
      compensation costs) be used to purchase Common Shares of the Company at the average fair value of the Common Shares during the year.

   

  Financial instruments

   

  Financial assets

   

  Initial recognition and measurement

   

  The Company’s financial assets comprise cash and cash equivalents, restricted cash, trade receivables,
      and other long-term assets. All financial assets are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases and sales of financial assets are recognized on the settlement
      date being the date that the Company receives or delivers the asset. The Company has financial assets consisting primarily of cash and cash equivalents and receivables. Receivables are non-derivative financial assets with fixed or determinable
      payments that are not quoted in an active market. They are included in current assets except for those with maturities greater than 12 months after the reporting period.

   

  
    17

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Subsequent measurement

   

  Cash and cash equivalents and restricted cash are carried at fair value with gains and losses
      recognized in the consolidated statement of loss and comprehensive loss.

   

  Trade receivables are carried at amortized cost using the effective interest rate
      method. For information on impairment losses on trade and other receivables, refer to the impairment of financial assets section below.

   

  Derecognition

   

  Financial assets are derecognized when the rights to receive cash flows from the asset have expired.

   

  Impairment of financial assets 

   

  The Company assesses at each reporting date whether there is any evidence that its trade receivables
      are impaired. The Company uses the simplified approach for measuring impairment for its trade receivables as these financial assets do not have a significant financing component as defined under IFRS 15, Revenue from Contracts with Customers.
      Therefore, the Company does not determine if the credit risk for these instruments has increased significantly since initial recognition. Instead, a loss allowance is recognized based on lifetime expected credit losses (“ECL”) at each reporting date.
      ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows expected to be received. The shortfall is then discounted at an approximation to the asset’s original effective interest
      rate. To measure the ECL, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

   

  The Company has established a provision matrix that is based on its historical credit loss
      experiences, adjusted for forward-looking factors specific to the debtors and the economic environment. Impairment losses and subsequent reversals are recognized in profit or loss and are the amounts required to adjust the loss allowance at the
      reporting date to the amount that is required to be recognized based on the aforementioned policy.

   

  Financial liabilities

   

  Initial recognition and measurement

   

  The Company’s financial liabilities comprise trade and other payables, lease liabilities, other
      liabilities, long-term debt and contingent consideration. All financial liabilities except lease liabilities are recognized initially at fair value. The Company assesses whether embedded derivative financial instruments are required to be separated
      from host contracts when the Company first becomes party to the contract.

   

  Subsequent measurements

   

  After initial recognition, payables are subsequently measured at amortized cost using the effective
      interest method. The effective interest method amortization is included as a finance cost in the consolidated statement of loss and comprehensive loss. Gains and losses are recognized in the consolidated statement of loss and comprehensive loss when
      the liabilities are derecognized.

   

  Payables are classified as current liabilities unless the Company has an unconditional right to defer
      settlement of the liability for at least 12 months after the reporting date.

   

  The Company accounts for contingent consideration as a financial liability measured at fair value
      through profit or loss and subsequently re-measures fair value at the end of each reporting period. 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 consolidated balance sheets. The change in the fair value of the contingent consideration, if any, is recognized within general and administrative expenses in the consolidated statements of loss and comprehensive loss.

   

  
    18

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Redeemable Preferred Shares, after initial recognition at fair value, prior to their
      conversion to Common Shares, were subsequently re-measured at fair value at the end of each reporting period with changes in fair value recognized in the consolidated statement of loss and comprehensive loss.

   

  Derecognition 

   

  Financial liabilities are derecognized when the obligation under the liability is discharged,
      cancelled, or expires.

   

  Foreign currency translation

   

  Functional and presentation currency

   

  The functional as well as the presentation currency of Lightspeed is the US dollar. Items included in
      the consolidated financial statements of the Company are measured in the functional currency, which is the currency of the primary economic environment in which the entity operates.

   

  Foreign currency transactions are translated into the functional currency using the exchange rates
      prevailing at the date of the transactions or when items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the changes at period-end exchange rates of monetary assets and liabilities
      denominated in foreign currencies are recognized in the consolidated statement of loss and comprehensive loss.

   

  Foreign operations

   

  The Company’s foreign operations are principally conducted through Lightspeed’s wholly-owned
      subsidiaries: Lightspeed POS USA Inc., Lightspeed POS Belgium BV, Lightspeed POS UK Ltd., Lightspeed Netherlands BV, Lightspeed Payments USA Inc., ReUp, Chronogolf, iKentoo, Kounta and Gastrofix (collectively, “the subsidiaries”). The results and
      financial position of all the Company entities that have a functional currency different from the presentation currency are translated into US dollars as follows: assets and liabilities are translated at the closing rate at the reporting date; income
      and expenses for each statement of operation are translated at average exchange rates; and all resulting exchange differences are recognized in other comprehensive loss.

   

  Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as
      assets and liabilities of the operation and translated at the closing rate at each reporting date.

   

  New accounting pronouncements

   

  New accounting pronouncements are issued by the IASB or other standard-setting bodies, and they are
      adopted by the Company as at the specified effective date.

   

  New and amended standards and interpretations adopted by the Company

   

  IFRS 16, Leases

   

  Refer to note 15 for information on the adoption of this standard.

   

  Amended standards and interpretations issued not yet effective

   

  There are no IFRS or IFRIC interpretations that are not effective that are expected to have a material
      impact.

   

  
    19

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  4.  Significant accounting estimates and assumptions

   

  Use of estimates

   

  The preparation of the 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. Management reviews its estimates on an ongoing basis based on management’s best knowledge of current events and
      actions that the Company may undertake in the future. Actual results could differ from those estimates.

   

  Key estimates and assumptions are as follows:

   

  COVID-19

   

  The uncertainties around COVID-19 required the use of judgments and estimates which resulted in no
      material impacts for the year 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.

   

  Impairment of non-financial assets

   

  The Company’s 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 flow 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, and the assessment of CGUs, can have a material impact on the respective values and ultimately the amount of any goodwill impairment. Refer to note 18 for additional information on the assumptions
      used.

   

  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.

   

  Business combinations

   

  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. The Company develops the fair value 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.

   

  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. The Company establishes 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.

   

  
    20

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  Stock-based compensation

   

  The Company measures 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 stock-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. Refer to note 27 for additional information on
      the assumptions used.

   

  5.  Business combinations

   

  Chronogolf

   

  On May 9, 2019, the Company acquired all of the outstanding shares of Chronogolf, a long-standing
      partner of the Company that leverages Lightspeed’s retail and hospitality platform within its comprehensive golf course management platform which also includes booking and membership capabilities.

   

  The fair value of the consideration transferred of $13,497 consisted of $9,115 cash paid on the
      closing date, net of cash acquired, and 50,199 Common Shares, at a fair value of $18.23 per share at the closing date, which is based on the quoted price of the Common Shares on the Toronto Stock Exchange on the closing date. A discounted amount of
      $1,399 was payable if certain milestones were achieved by December 31, 2019, along with the issuance of 50,198 additional Common Shares, at a value of $18.23 per share, and a discounted amount of $935 to be paid over two years, some of which are
      contingent upon key employees’ continued employment with the Company and are accounted for as acquisition-related compensation expense. The December 31, 2019 milestones were achieved and the $1,399 was paid.

   

  The results of operations of Chronogolf have been consolidated with those of the Company as at May 9,
      2019. The acquisition has been accounted for as a business combination in accordance with IFRS 3, Business Combinations, using the acquisition method whereby the net assets acquired and the liabilities assumed are recorded at fair value. The purchase
      price allocation was based on management’s best estimates of the fair values of Chronogolf’s assets and liabilities as at May 9, 2019.

   

  
    21

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  The following table summarizes the allocations of the consideration paid and the amounts of estimated
      fair value of the assets acquired and liabilities assumed at the acquisition date:

   

  	 	 	 	$	 
	Current assets	 	 
	Cash	 	 	208	 
	Trade and other receivables	 	 	779	 
	 	 	 	987	 
	Property and equipment	 	 	10	 
	Goodwill	 	 	5,859	 
	Customer relationships	 	 	4,501	 
	Software technology	 	 	2,708	 
	Total assets	 	 	14,065	 
	Current liabilities	 	 	 	 
	Accounts payable and accrued liabilities	 	 	867	 
	Deferred revenue	 	 	50	 
	Employee stock option payout liability	 	 	1,215	 
	Deferred income tax liability	 	 	546	 
	Total liabilities	 	 	2,678	 
	Fair value of net assets acquired	 	 	11,387	 
	Less: Cash acquired	 	 	208	 
	Fair value of net assets acquired, less cash acquired	 	 	11,179	 
	Paid in Common Shares of the Company	 	 	915	 
	Paid in cash	 	 	9,115	 
	Payable to Chronogolf	 	 	1,149	 

   

  The goodwill related to the acquisition of Chronogolf is composed of expected synergies in utilizing Chronogolf
      technology in the Company’s product offerings, including an assembled workforce that does not qualify for separate recognition, and is not deductible for tax purposes.

   

  The customer relationships of Chronogolf and the software technology acquired are amortized on a
      straight-line basis over their estimated useful lives of 3 years and 4 years, respectively.

   

  Right-of-use assets and lease liabilities of $337 were recorded by Lightspeed on the acquisition date
      of Chronogolf. This lease was subsequently transferred to a third party and Lightspeed is no longer a party to this lease.

   

  iKentoo

   

  On July 2, 2019, the Company acquired all of the outstanding shares of iKentoo, a Switzerland-based
      POS solutions provider for small and medium-sized businesses operating in the hospitality industry.

   

  The total consideration of $35,100 consisted of $17,428 cash paid on the closing date, net of cash
      acquired, and 408,624 Common Shares, at a fair value of $29.17 per share at the closing date, which is based on the quoted price of the Common Shares on the Toronto Stock Exchange on the closing date. An amount of $6,327 is payable through July 2,
      2021 contingent upon key employees’ continued employment and is accounted for as acquisition-related compensation expense. Additional cash was returned to the Company due to a post-closing working capital adjustment.

   

  The results of operations of iKentoo have been consolidated with those of the Company as at July 2,
      2019. The acquisition has been accounted for as a business combination in accordance with IFRS 3, Business Combinations, using the acquisition method whereby the net assets acquired and the liabilities assumed are recorded at fair value. The purchase
      price allocation was based on management’s best estimates of the fair values of iKentoo’s assets and liabilities as at July 2, 2019.

   

  
    22

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  The following table summarizes the allocations of the consideration paid and the amounts of estimated
      fair value of the assets acquired and liabilities assumed at the acquisition date:

   

  	 	 	 	$	 
	Current assets	 	 
	Cash	 	 	1,044	 
	Trade receivables and other assets	 	 	767	 
	 	 	 	1,811	 
	Property and equipment	 	 	192	 
	Goodwill	 	 	16,471	 
	Customer relationships	 	 	7,394	 
	Software technology	 	 	7,342	 
	Total assets	 	 	33,210	 
	Current liabilities	 	 	 	 
	Accounts payable and accrued liabilities	 	 	800	 
	Deferred revenue	 	 	1,207	 
	Deferred income tax liability	 	 	1,386	 
	Total liabilities	 	 	3,393	 
	Fair value of net assets acquired	 	 	29,817	 
	Less: Cash acquired	 	 	1,044	 
	Fair value of net assets acquired, less cash acquired	 	 	28,773	 
	Paid in Common Shares of the Company	 	 	11,918	 
	Paid in cash	 	 	17,428	 
	Receivable from iKentoo	 	 	573	 

   

  The goodwill related to the acquisition of iKentoo is composed of expected synergies in utilizing iKentoo technology in
      the Company’s product offerings, including an assembled workforce that does not qualify for separate recognition, and is not deductible for tax purposes.

   

  The customer relationships of iKentoo and the software technology acquired are amortized on a
      straight-line basis over their estimated useful lives of 5 years and 4 years, respectively.

   

  Right-of-use assets and lease liabilities of $851 were recorded by Lightspeed on the acquisition date
      of iKentoo.

   

  Kounta

   

  On November 1, 2019, the Company acquired all of the outstanding shares of Australia-based Kounta, a
      cloud-based POS solutions provider to small and medium-sized businesses operating within the hospitality industry.

   

  The total consideration of $57,717 consisting of $34,178 cash paid on the closing date, net of cash
      acquired, and 306,300 Common Shares, at a fair value of $26.02 per share at the closing date, which is based on the quoted price of the Common Shares on the Toronto Stock Exchange on the closing date. An amount of $7,524 in deferred cash
      consideration along with the issuance of 299,702 Common Shares, at a value of $26.02 per share, is payable through October 2021 to certain key employees contingent on whether certain milestones, such as the continued employment of those employees,
      are achieved, and is accounted for as acquisition-related compensation expense. Additional cash was paid by the Company to the sellers due to a post-closing working capital adjustment.

   

  
    23

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  The results of operations of Kounta have been consolidated with those of the Company as at November 1,
      2019. The acquisition has been accounted for as a business combination in accordance with IFRS 3, Business Combinations, using the acquisition method whereby the net assets acquired and the liabilities assumed are recorded at fair value. The purchase
      price allocation was based on management’s best estimates of the fair values of Kounta’s assets and liabilities as at November 1, 2019. The following table summarizes the allocations of the consideration paid and the amounts of estimated fair value
      of the assets acquired and liabilities assumed at the acquisition date:

   

  	 	 	 	$	 
	Current assets	 	 
	Cash	 	 	941	 
	Trade receivables and other assets	 	 	745	 
	 	 	 	1,686	 
	Property and equipment	 	 	177	 
	Goodwill	 	 	29,989	 
	Customer relationships	 	 	10,584	 
	Software technology	 	 	5,149	 
	Total assets	 	 	47,585	 
	Current liabilities	 	 	 	 
	Accounts payable and accrued liabilities	 	 	1,280	 
	Deferred revenue	 	 	458	 
	Deferred income tax liability	 	 	2,511	 
	Total liabilities	 	 	4,249	 
	Fair value of net assets acquired	 	 	43,336	 
	Less: Cash acquired	 	 	941	 
	Fair value of net assets acquired, less cash acquired	 	 	42,395	 
	Paid in Common Shares of the Company	 	 	7,970	 
	Paid in cash	 	 	34,178	 
	Payable to Kounta	 	 	247	 

   

  The goodwill related to the acquisition of Kounta is composed of expected synergies in utilizing Kounta
      technology in the Company’s product offerings, including an assembled workforce that does not qualify for separate recognition, and is not deductible for tax purposes.

   

  The customer relationships of Kounta and the software technology acquired are
      amortized on a straight-line basis over their estimated useful lives of 5 years and 3 years, respectively.

   

  Right-of-use assets and lease liabilities of $991 were recorded by Lightspeed on the acquisition date
      of Kounta.

   

  The Company has a non-cancellable commitment to pay an amount of $3,433 tied to a marketing alliance
      agreement to one selling shareholder in three equal annual installments. The first installment was paid on closing.

   

  Gastrofix

   

  On January 7, 2020, the Company acquired all of the outstanding shares of Gastrofix, a cloud-based POS
      hospitality software provider in Germany for small and medium-sized businesses.

   

  The total consideration of $101,279, which includes the estimated amounts of contingent consideration
      and acquisition-related compensation expense payable, consisted of $54,327 cash paid on the closing date, net of cash acquired, $6,486 of this amount being transferred to a holdback account which will be released to Gastrofix over 18 months and
      1,437,930 Common Shares, at a fair value of $30.99 per share at the closing date, which is based on the quoted price of the Common Shares on the Toronto Stock Exchange on the closing date, subject to a post-closing working capital adjustment. An
      additional amount of up to $10,030 in deferred cash consideration along with the issuance of up to 238,664 Common Shares, at a value of $30.99 per share, subject to an adjustment for amounts payable to non-shareholders, is payable contingent on the
      over performance of agreed milestones in each of the next two years. Additional information on this contingent consideration, which was estimated to have a fair value of nil at the time of acquisition, can be found in note 29.

   

  
    24

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  An additional $1,604 along with the issuance of 38,186 Common Shares, at a value of $30.99 per share,
      is payable to certain key employees through January 2022 contingent on the continued employment of those employees, and will be accounted for as acquisition-related compensation expense. An additional amount of up to $2,407 in deferred cash
      consideration along with the issuance of up to 57,278 Common Shares, at a value of $30.99 per share, is payable through January 2022 contingent on certain milestones being achieved and will be accounted for as acquisition-related compensation
      expense. An additional amount of up to $501 in deferred cash consideration along with the issuance of up to 11,934 Common Shares, at a value of $30.99 per share is payable contingent on the over performance of agreed milestones in each of the next
      two years and will be accounted for as acquisition-related compensation expense.

   

  The results of operations of Gastrofix have been consolidated with those of the Company as at January
      7, 2020. The acquisition has been accounted for as a business combination in accordance with IFRS 3, Business Combinations, using the acquisition method whereby the net assets acquired and the liabilities assumed are recorded at fair value. The
      preliminary purchase price allocation was based on management’s best estimates of the fair values of Gastrofix’s assets and liabilities as at January 7, 2020.

   

  The following table summarizes the preliminary allocations of the consideration paid and the amounts
      of estimated fair value of the assets acquired and liabilities assumed at the acquisition date:

   

  	 	 	 	$	 
	Current assets	 	 
	Cash	 	 	1,678	 
	Trade receivables and other assets	 	 	1,729	 
	 	 	 	3,407	 
	Property and equipment	 	 	230	 
	Goodwill	 	 	76,013	 
	Customer relationships	 	 	26,835	 
	Software technology	 	 	7,066	 
	Total assets	 	 	113,551	 
	Current liabilities	 	 	 	 
	Accounts payable and accrued liabilities	 	 	6,321	 
	Deferred revenue	 	 	470	 
	Debt (settled by the Company on closing of the acquisition)	 	 	1,583	 
	Deferred income tax liability	 	 	5,008	 
	Total liabilities	 	 	13,382	 
	Fair value of net assets acquired	 	 	100,169	 
	Less: Cash acquired	 	 	1,678	 
	Fair value of net assets acquired, less cash acquired	 	 	98,491	 
	Paid in Common Shares of the Company	 	 	44,561	 
	Paid in cash	 	 	47,841	 
	Payable to Gastrofix	 	 	6,089	 

   

  The goodwill related to the acquisition of Gastrofix is composed of expected synergies in utilizing
      Gastrofix’s technology in the Company’s product offerings, including an assembled workforce that does not qualify for separate recognition and is not deductible for tax purposes.

   

  
    25

    
      
 

  

  Lightspeed POS Inc.

  Notes to Consolidated Financial Statements

  For the years ended March 31, 2020 and 2019

  
  
     

  

  
  (expressed in thousands of US dollars)

   

  The customer relationships of Gastrofix and the software technology acquired are amortized on a
      straight-line basis over their estimated useful lives of 5 years and 3 years, respectively.

   

  Right-of-use assets and lease liabilities of $848 were recorded by Lightspeed on the acquisition date
      of Gastrofix.

   

  The allocation of the purchase price to assets acquired and liabilities assumed was based upon a
      preliminary valuation for all items and may be subject to adjustment during the 12-month measurement period following the acquisition date.

   

  6.  Revenue from contracts with customers

   

  Disaggregated revenue

   

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

   

  	 	 	 	2020	 	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Software and payments revenue	 		106,871	 	 	 	68,489	 
	Hardware and other	 	 	13,766	 	 	 	8,962	 
	Total revenue from contracts with customers	 	 	120,637	 	 	 	77,451	 

   

  The Company discloses revenue by geographic area in note 31.

   

  Contract assets

   

  The amount of amortization of commission assets recognized as sales and marketing expense in the year
      ended March 31, 2020 is $6,226 (2019 – $5,000).

   

  The Company recorded a contract asset for discounts provided to merchants at the inception of a
      contract of $365 included in other current assets and $703 included in other long-term assets as at March 31, 2020, with $55 being amortized into hardware and other revenue for the year ended March 31, 2020 (2019 – nil and nil, respectively).

   

  Contract liabilities

   

  As of March 31, 2020 and 2019, the Company had deferred revenue of $42,094 and $40,342, respectively.

   

  Revenue recognized that was included in the deferred revenue balance at the beginning of the years
      ended March 31, 2020 and 2019 is $32,317 and $25,211, respectively.

   

  
    26

    
      
 

  

   

  

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  7. Direct cost of revenues

   

  	 	 	 	2020	 	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Cost of software and payment revenue	 	 	 	 	 	 	 	 
	Support	 	 	18,517	 	 	 	12,939	 
	Other third-party costs	 	 	13,465	 	 	 	2,813	 
	 	 	 	31,982	 	 	 	15,752	 
	Cost of hardware and other	 	 	 	 	 	 	 	 
	Hardware and other	 	 	11,217	 	 	 	7,821	 
	Total direct cost of revenues	 	 	43,199	 	 	 	23,573	 

   

  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.

   

  8. Government grants

   

  Government assistance recognized as a reduction of expenses is as follows:

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Direct cost of revenues	 	 	533	 	 	 	262	 
	Research and development	 	 	2,678	 	 	 	2,194	 

   

  Government assistance includes research and development tax credits, grants and other credits.

   

  9. Employee compensation

   

  The total employee compensation comprising salaries and benefits, excluding tax credits for the year ended March 31, 2020, was $83,866 (2019 – $53,841).

   

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

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Direct cost of revenues	 	 	731	 	 	 	260	 
	General and administrative	 	 	3,196	 	 	 	1,030	 
	Research and development	 	 	3,101	 	 	 	245	 
	Sales and marketing	 	 	2,902	 	 	 	1,575	 

   

  The amount recognized as an expense for the year ended March 31, 2020 for our defined contribution plan was $1,392 (2019 - $350).

   

  
    27

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  10. Finance income and costs

   

  For the year ended March 31, 2020, interest income and interest expense, including interest expense on lease liabilities, amounted to $3,577 and $1,811, respectively (2019 –
    $375 and $194).

   

  11. Loss per share

   

  The Company had three categories of potentially dilutive securities: convertible preferred shares, 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 years ended March 31, 2020, and 2019. All outstanding potentially dilutive securities could potentially dilute net loss per share in the future.

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Issued Common Shares	 	 	92,206,817	 	 	 	83,752,210	 
	Weighted average number of Common Shares (basic and diluted)	 	 	85,890,314	 	 	 	33,203,567	 
	Net loss per Common Share – Basic and diluted	 	($	0.62	)	 	($	5.53	)

   

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

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	 	 	 	 	 	 	 	 	 
	Class B Preferred Shares issued and outstanding	 	 	—	 	 	 	1,235,824	 
	Class C Preferred Shares issued and outstanding	 	 	—	 	 	 	1,780,416	 
	Class D Preferred Shares issued and outstanding	 	 	—	 	 	 	10,942,791	 
	Class E Preferred Shares issued and outstanding	 	 	—	 	 	 	20,876,422	 
	Stock options and awards	 	 	6,506,869	 	 	 	5,575,435	 
	Warrants	 	 	26,718	 	 	 	98,903	 

   

  12. Inventories

   

  Inventories expensed during the year ended March 31, 2020 in direct cost of revenues amount to $10,432 (2019 – $7,278).

   

  13. Other current assets

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Restricted cash	 		1,829	 	 	 	—	 
	Prepaid expenses and deposits	 	 	4,048	 	 	 	1,527	 
	Commission asset	 	 	3,938	 	 	 	3,677	 
	Other	 	 	612	 	 	 	—	 
	Total other current assets	 	 	10,427	 	 	 	5,204	 

   

  
    28

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  14. Trade and other receivables

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Trade	 		7,721	 	 	 	6,535	 
	Loss allowance	 	 	(2,878	)	 	 	(1,703	)
	Total trade receivables	 	 	4,843	 	 	 	4,832	 
	Research and development tax credits receivable (note 24)	 	 	4,059	 	 	 	3,017	 
	Sales tax receivable	 	 	847	 	 	 	384	 
	Other	 	 	1,130	 	 	 	191	 
	Total trade and other receivables	 	 	10,879	 	 	 	8,424	 

   

  Included in general and administrative expenses is an expense of $1,739 related to loss allowance for the year ended March 31, 2020 (2019 – $861).

   

  15. Leases

   

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

   

  The Company’s statement of loss and comprehensive loss for the year ended March 31, 2020 reflects additional depreciation expense due to the right-of use assets, an increase in
    finance costs for effective interest expense on its lease liabilities, and is partially offset by a reduction in rental expenses.

   

  The changes have no overall impact on cash flows. However, operating cash flows are positively impacted, while financing cash flows are 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.

   

  Definition of a lease 

   

  Previously, the Company determined at contract inception whether an arrangement is or contains a lease under IAS 17 and IFRIC 4, Determining Whether an Arrangement Contains a
    Lease. Under IFRS 16, the Company assesses whether a contract is or contains a lease based on the definition of a lease, as explained in the accounting policy in note 3.

   

  The Company elected to use the transitional practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17
    and IFRIC 4 at the date of initial application. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after April 1, 2019.

   

  As a lessee, the Company previously classified all of its leases as operating based on its assessment of whether the lease transferred significantly all of the risks and
    rewards incidental to ownership of the underlying asset to the Company. Under IFRS 16, the Company recognizes right-of-use assets and lease liabilities for most leases previously classified as operating under IAS 17.

   

  
    29

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

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

   

  The Company does not currently act in the capacity of a lessor.

   

  At transition, lease liabilities were measured at the present value of the remaining lease payments, discounted at the lessee’s incremental borrowing rate as at April 1, 2019.
    Right-of-use assets were measured at the value of the lease liabilities, less any deferred lease incentives still outstanding as of the transition date.

   

  The Company used the following practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17:

   

  		–	Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term and for leases of low-value assets.

   

  		–	Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.

   

  Below is a reconciliation related to lease commitments as of that date recognized due to the modified retrospective application of IFRS.

   

  	 	 	March 31, 2019	 
	 	 	$	 
	Total lease commitments as at March 31, 2019	 	 	14,798	 
	Discounted lease renewal options	 	 	4,302	 
	Variable lease payments	 	 	(3,666	)
	Impact of discounting remaining lease payments	 	 	(1,634	)
	Recognition exemption for short-term leases	 	 	(534	)
	Future commitments starting after April 1, 2019	 	 	(153	)
	Foreign exchange	 	 	55	 
	Total lease liabilities included in the consolidated balance sheet as at April 1, 2019	 	 	13,168	 

   

  The weighted average incremental borrowing rate applied to lease liabilities recognized in the consolidated balance sheet at the date of initial application was 5.64%. The
    interest expense for the year ended March 31, 2020 was $852.

   

  
    30

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

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

   

  	 	 	$	 
	Cost	 	 	 	 
	As at April 1, 2019	 	 	11,971	 
	Additions	 	 	4,158	 
	Acquired in business combinations	 	 	3,027	 
	Modifications to lease contracts	 	 	(626	)
	Exchange differences	 	 	(127	)
	As at March 31, 2020	 	 	18,403	 
	 	 	 	 	 
	Accumulated depreciation	 	 	 	 
	As at April 1, 2019	 	 	—	 
	Depreciation charge	 	 	2,492	 
	Modifications to lease contracts	 	 	(46	)
	As at March 31, 2020	 	 	2,446	 
	 	 	 	 	 
	Cost, net accumulated depreciation	 	 	 	 
	As at April 1, 2019	 	 	11,971	 
	 	 	 	 	 
	As at March 31, 2020	 	 	15,957	 
	 	 	 	 	 
	Offices	 	 	15,183	 
	Vehicles	 	 	774	 

   

  Expenses relating to short-term leases, including those excluded from the IFRS 16 transition due to the election of the practical expedient, as well as variable lease payments
    not included in the measurement of lease liabilities were approximately $1,770 for the year ended March 31, 2020. For the year ended March 31, 2019, rental expense under operating leases calculated in accordance with IAS 17, Leases, amounted to $2,996.

   

  The maturity analysis of lease liabilities as at March 31, 2020 are as follows:

   

  	Fiscal Year	 	 $	 
	2021	 	 	3,301	 
	2022	 	 	2,837	 
	2023	 	 	2,312	 
	2024	 	 	1,822	 
	2025	 	 	1,437	 
	2026 and thereafter	 	 	5,138	 
	Total minimum payments	 	 	16,847	 

   

  
    31

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  16. Property and equipment

   

  2020 

   

  	 	 	Furniture	 	 	Equipment	 	 	Computer equipment	 	 	
          Leasehold

          improvements

        	 	 	
          Leasehold

          improvements in progress

        	 	 	Total	 
	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2019	 	 	1,150	 	 	 	1,540	 	 	 	3,546	 	 	 	4,318	 	 	 	208	 	 	 	10,762	 
	Additions and movement across asset classes	 	 	522	 	 	 	188	 	 	 	869	 	 	 	2,306	 	 	 	(128	)	 	 	3,757	 
	Acquired through business combinations	 	 	386	 	 	 	26	 	 	 	152	 	 	 	45	 	 	 	—	 	 	 	609	 
	Disposals	 	 	—	 	 	 	—	 	 	 	(113	)	 	 	—	 	 	 	—	 	 	 	(113	)
	As at March 31, 2020	 	 	2,058	 	 	 	1,754	 	 	 	4,454	 	 	 	6,669	 	 	 	80	 	 	 	15,015	 
	Accumulated depreciation	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2019	 	 	509	 	 	 	854	 	 	 	2,593	 	 	 	1,434	 	 	 	—	 	 	 	5,390	 
	Additions	 	 	254	 	 	 	177	 	 	 	875	 	 	 	443	 	 	 	—	 	 	 	1,749	 
	Disposals	 	 	—	 	 	 	—	 	 	 	(113	)	 	 	—	 	 	 	—	 	 	 	(113	)
	As at March 31, 2020	 	 	763	 	 	 	1,031	 	 	 	3,355	 	 	 	1,877	 	 	 	—	 	 	 	7,026	 
	Net book value as at March 31, 2020	 	 	1,295	 	 	 	723	 	 	 	1,099	 	 	 	4,792	 	 	 	80	 	 	 	7,989	 

   

  2019 

   

  	 	 	Furniture	 	 	Equipment	 	 	Computer equipment	 	 	
          Leasehold

          improvements

        	 	 	
          Leasehold

          improvements in progress

        	 	 	Total	 
	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2018	 	 	955	 	 	 	1,378	 	 	 	2,556	 	 	 	3,722	 	 	 	121	 	 	 	8,732	 
	Additions	 	 	195	 	 	 	162	 	 	 	990	 	 	 	596	 	 	 	87	 	 	 	2,030	 
	As at March 31, 2019	 	 	1,150	 	 	 	1,540	 	 	 	3,546	 	 	 	4,318	 	 	 	208	 	 	 	10,762	 
	Accumulated depreciation	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2018	 	 	367	 	 	 	699	 	 	 	2,001	 	 	 	934	 	 	 	—	 	 	 	4,001	 
	Additions	 	 	142	 	 	 	155	 	 	 	592	 	 	 	500	 	 	 	—	 	 	 	1,389	 
	As at March 31, 2019	 	 	509	 	 	 	854	 	 	 	2,593	 	 	 	1,434	 	 	 	—	 	 	 	5,390	 
	Net book value as at March 31, 2019	 	 	641	 	 	 	686	 	 	 	953	 	 	 	2,884	 	 	 	208	 	 	 	5,372	 

   

  
    32

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  17. Intangible assets

   

  2020 

   

  	 	 	
          Acquired

          software

          technologies

        	 	 	
          Customer 

          relationships

        	 	 	Total	 
	 	 	$	 	 	$	 	 	$	 
	Cost	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2019	 	 	17,971	 	 	 	2,663	 	 	 	20,634	 
	Additions	 	 	22,265	 	 	 	49,314	 	 	 	71,579	 
	Exchange differences	 	 	(645	)	 	 	(1,507	)	 	 	(2,152	)
	As at March 31, 2020	 	 	39,591	 	 	 	50,470	 	 	 	90,061	 
	Accumulated amortization	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2019	 	 	15,353	 	 	 	2,663	 	 	 	18,016	 
	Additions	 	 	4,621	 	 	 	4,605	 	 	 	9,226	 
	As at March 31, 2020	 	 	19,974	 	 	 	7,268	 	 	 	27,242	 
	Net book value as at March 31, 2020	 	 	19,617	 	 	 	43,202	 	 	 	62,819	 

   

  2019 

   

  	 	 	
          Acquired software

          technologies

        	 	 	
          Customer

          relationships

        	 	 	Total	 
	 	 	$	 	 	$	 	 	$	 
	Cost	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2018	 	 	16,292	 	 	 	2,663	 	 	 	18,955	 
	Additions	 	 	1,679	 	 	 	—	 	 	 	1,679	 
	As at March 31, 2019	 	 	17,971	 	 	 	2,663	 	 	 	20,634	 
	Accumulated amortization	 	 	 	 	 	 	 	 	 	 	 	 
	As at March 31, 2018	 	 	12,552	 	 	 	2,316	 	 	 	14,868	 
	Additions	 	 	2,801	 	 	 	347	 	 	 	3,148	 
	As at March 31, 2019	 	 	15,353	 	 	 	2,663	 	 	 	18,016	 
	Net book value as at March 31, 2019	 	 	2,618	 	 	 	—	 	 	 	2,618	 

   

  18. Goodwill

   

  As at March 31, 2019, the goodwill balance was $22,536 and increased to $146,598 as at March 31, 2020 due to an increase of $5,859 arising from the Chronogolf acquisition,
    $16,471 from the iKentoo acquisition, $29,989 from the Kounta acquisition and $76,013 from the Gastrofix acquisition, net of exchange loss of $4,270.

   

  
    33

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  Impairment analysis

   

  The following key assumptions were used to determine recoverable amounts for the impairment tests performed as at March 31, 2020:

   

  	 	 	 	
          Pre-tax

          discount rate

        	 	 	
          Terminal

          Value Multiple

        	 	 	
          Perpetual

          Growth Rate

        	 
	Assumptions	 	 	 	28	%	 	 	4	 	 	 	30	%

   

  Fair value is based on a discounted cash flow model involving several key assumptions that were used in the test for goodwill impairment. Adjusted EBITDA was determined as a
    valuation basis, measuring a five-year projection based on actual year-end amounts and management’s best estimates. A terminal value was calculated based on revenues, with a weighted average cost of capital reflecting the current market assessment
    being used. The cost of sale was assumed to be 2.5% of the fair value amount. The enterprise value (carrying amount) was compared with the fair value less cost of sale to test for impairment. Tests performed on the Segment demonstrated no impairment of
    goodwill for the years ended March 31, 2020, and 2019.

   

  The factors used in the impairment analysis are inherently subject to uncertainty. Management believes that it has made reasonable estimates and assumptions to determine the
    fair value of the Segment. If actual results are not consistent with these estimates and assumptions, goodwill may be overstated, which could trigger an impairment charge to the consolidated financial statements.

   

  Sensitivity of assumptions

   

  The following table presents the change in the discount rate or in the perpetual growth rate used in the most recently performed tests that would have caused an impairment in
    the carrying amount of the Segment as at March 31, 2020:

   

  	 	 	 	
          Incremental

          increase in pre-tax

          discount rate

        	 	 	
          Decrease in

          terminal value

          multiple

        	 	 	
          Incremental

          decrease in

          perpetual

          growth rate

        	 
	Assumptions	 	 	 	22	%	 	 	55	%	 	 	30	%

   

  19. Restricted cash and other long-term assets

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Restricted cash	 	 	7,703	 	 	 	—	 
	Commission asset	 	 	2,898	 	 	 	2,993	 
	Other	 	 	1,148	 	 	 	506	 
	Total other-long term assets	 	 	11,749	 	 	 	3,499	 

   

  
    34

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  20. Accounts payable and accrued liabilities

   

  	 	 	2020	 	 	2019	 
	 	 	 	$	 	 	 	$	 
	Trade	 		12,325	 	 	 	7,706	 
	Accrued compensation and benefits	 	 	9,528	 	 	 	6,883	 
	Accrued payroll taxes on stock-based compensation	 	 	1,170	 	 	 	1,361	 
	Acquisition-related payables	 	 	7,787	 	 	 	233	 
	Total accounts payable and accrued liabilities	 	 	30,810	 	 	 	16,183	 

   

  21. Credit facility

   

  In April 2019, the Company entered into new credit facilities with the Canadian Imperial Bank of Commerce (“CIBC”), which include a $25,000 demand revolving operating credit
    facility (the “Revolver”) and a $30,000 stand-by acquisition term loan (the “Acquisition Facility”, and together with the Revolver, the “Credit Facilities”). The Credit Facilities replaced the previous $15,000 working capital line of credit granted to
    the Company by Silicon Valley Bank.

   

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

   

  The Acquisition Facility was drawn in full in January 2020 for the acquisition of 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.

   

  22. Other long-term liabilities

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Acquisition-related payables	 		7,982	 	 	 	—	 
	Deferred lease incentives	 	 	—	 	 	 	1,197	 
	Accrued payroll taxes on stock-based compensation	 	 	198	 	 	 	353	 
	Other	 	 	18	 	 	 	229	 
	Total other long-term liabilities	 	 	8,198	 	 	 	1,779	 

   

  23. Share capital

   

  As at March 31, 2020, the Company had 92,206,817 Common Shares issued and outstanding, unlimited shares authorized (2019 – 83,752,210).

   

  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.

   

  
    35

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  Common Shares

   

  The Common Shares consist of Subordinate Voting Shares and Multiple Voting Shares.

   

  The Subordinate Voting Shares and Multiple Voting Shares have the same rights, have no nominal value, are equal in all respects and are treated by the Company as if they were
    one class of shares.

   

  The Subordinate Voting Shares and Multiple Voting Shares rank pari passu with respect to the payment of dividends, return of capital and distribution of assets in the event of
    the liquidation, dissolution or winding up of the Company.

   

  The holders of outstanding Subordinate Voting Shares and Multiple Voting Shares are entitled to receive dividends at such times and in such amounts and form as the Board may
    from time to time determine, but subject to the rights of the holders of any preferred shares, without preference or distinction among or between the Subordinate Voting Shares and the Multiple Voting Shares.

   

  The holders of outstanding Subordinate Voting Shares are entitled to one vote per share and the holders of Multiple Voting Shares are entitled to four votes per share.

   

  The Subordinate Voting Shares are not convertible into any other class of shares. Each outstanding Multiple Voting Share may at any time, at the option of the holder, be
    converted into one Subordinate Voting Share.

   

  In addition, all Multiple Voting Shares held by Permitted Holders will convert automatically into Subordinate Voting Shares at such time as the earlier of the following occur:
    (i) Permitted Holders that hold Multiple Voting Shares no longer as a group beneficially own, directly or indirectly and in the aggregate, at least 12.5% of the issued and outstanding Subordinate Voting Shares and Multiple Voting Shares (on a
    non-diluted basis), and (ii) Dax Dasilva is no longer serving as a director or member of senior management of the Company.

   

  Preferred Shares

   

  The preferred shares are issuable at any time and from time to time in one or more series. The Board is authorized to fix before issue the number of, the consideration per
    share of, the designation of, and the provisions attaching to, the preferred shares of each series, which may include voting rights, the whole subject to the issue of a certificate of amendment setting forth the designation and provisions attaching to
    the preferred shares or shares of the series.

   

  Fiscal 2020

   

  On June 26, 2019, a warrant holder was issued 31,647 Subordinate Voting Shares as a result of its net exercise of 37,500 warrants at an exercise price per Subordinate Voting
    Share of $4.00.

   

  On August 12, 2019, another warrant holder was issued 54,604 Subordinate Voting Shares as a result of its net exercise of 61,403 warrants at an exercise price per Subordinate
    Voting Share of $4.07.

   

  On February 27, 2020, the Company completed a new issue and secondary offering (“Bought Deal 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.

   

  
    36

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  Fiscal 2019

   

  Share Repurchase and Cancellation

   

  Pursuant to separate agreements reached in 2014 and 2016 between the Company, its CEO and his holding company, DHIDasilva Holdings Inc. (“DHI”), for the benefit of the
    Company’s other shareholders, the Company’s CEO agreed to absorb from his own shareholdings, in the case of the first agreement, 60% of the dilutive impact of an increase in the number of shares issuable under the Company’s stock option plan, and in
    the case of the second agreement, the full dilutive impact of option grants to certain executives. In the case of the first agreement, the dilutive impact of the increase was to be absorbed upon exercise of a specified number of options by the
    Company’s stock option plan participants through the repurchase by the Company for nominal consideration of options and shares held beneficially by the Company’s CEO. In the case of the second agreement, the dilutive impact of the increase was to be
    absorbed upon the exercise of the specific options granted to the key executives through the repurchase by the Company of shares held beneficially by the Company’s CEO for an amount equal to the aggregate exercise price of the specific options being
    exercised.

   

  These arrangements were unwound on March 7, 2019 when the agreements were cancelled, and the Company acquired 966,651 Common Shares in the capital of the Company and 10,928
    options to purchase Common Shares in the capital of the Company from DHI for total cash proceeds of $792. The Company also agreed to indemnify DHI for certain costs, including taxes, in connection with such transaction. The Common Shares acquired from
    DHI were cancelled on such same date in order to give effect to the intent of the cancelled agreements.

   

  Initial Public Offering

   

  The Company completed the closing of its initial public offering (“IPO”) on March 15, 2019.

   

  On March 15, 2019, immediately prior to the completion of the IPO, the Company completed a reorganization of its share capital, whereby all of the Company’s issued and
    outstanding classes of Redeemable Preferred Shares were converted into Common Shares on a one-for-one basis, and the Company’s articles were then amended to cancel all the authorized but unissued shares for all classes of Redeemable Preferred Shares
    subsequent to the 4-for-1 share consolidation discussed in the next paragraph. The conversion of the outstanding Classes of Redeemable Preferred Shares converted into Common Shares on a one-for-one basis and the consolidation of the Common Shares on a
    4-for-1 basis resulted in 37,131,198 Common Shares.

   

  As approved in a special meeting of the shareholders on March 5, 2019, immediately preceding the IPO, the Company (i) filed articles of amendment that, among other things, (a)
    reclassified the Company’s Common Shares as Subordinate Voting Shares, (b) amended the rights, privileges and conditions of the Subordinate Voting Shares, (c) cancelled all the authorized but unissued Class B Preferred Shares, Class C Preferred Shares,
    Class D Preferred Shares and Class E Preferred Shares, (d) created an unlimited number of Multiple Voting Shares, and an unlimited number of preferred shares issuable in one or more series, and (e) consolidated the issued and outstanding Subordinate
    Voting Shares on a 4-for-1 basis, and (ii) entered into a share exchange agreement with DHI, pursuant to which 16,052,445 Multiple Voting Shares were issued to DHI in exchange for an equivalent number of Subordinate Voting Shares held by DHI. The
    Capital Reorganization was completed on March 15, 2019.

   

  On March 15, 2019, the Company completed an IPO and issued 17,250,000 Subordinate Voting Shares for a total gross consideration of $207,547, including 2,250,000 Subordinate
    Voting Shares issued upon the exercise of the underwriters’ over-allotment option which accounted for total gross consideration of $27,071. Share issuance costs amounted to $13,773.

   

  
    37

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  24. Income taxes

   

  Income tax expense (recovery) includes the following components:

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Current	 	 	 	 	 	 	 	 
	United States	 	 	44	 	 	 	14	 
	Other	 	 	5	 	 	 	45	 
	 	 	 	49	 	 	 	59	 
	Deferred	 	 	 	 	 	 	 	 
	Canada	 	 	(957	)	 	 	(30,122	)
	United States	 	 	77	 	 	 	43	 
	Europe	 	 	(1,678	)	 	 	(701	)
	Australia	 	 	(632	)	 	 	—	 
	Other	 	 	31	 	 	 	(8	)
	 	 	 	(3,159	)	 	 	(30,788	)
	Total income tax expense (recovery)	 	 	(3,110	)	 	 	(30,729	)

   

  The income tax expense (recovery) reported, which includes foreign taxes, differs from the amount of the income tax expense (recovery) computed by applying Canadian Statutory
    rates as follows:

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Income tax recovery at the statutory tax rate	 	 	(15,004	)	 	 	(57,050	)
	Impact of rate differential of foreign jurisdiction	 	 	386	 	 	 	(169	)
	Non-deductible stock-based compensation	 	 	2,049	 	 	 	447	 
	Acquisition-related compensation and transaction costs	 	 	3,222	 	 	 	—	 
	Deferred tax related to Part VI.1 tax	 	 	—	 	 	 	(29,944	)
	Other non-deductible expenses (credits) and non-taxable amounts	 	 	431	 	 	 	(173	)
	Changes in unrecognized benefits of deferred tax assets	 	 	3,797	 	 	 	5,361	 
	Preferred share adjustment	 	 	—	 	 	 	50,917	 
	Impact on changes in deferred tax rates and other	 	 	2,009	 	 	 	(118	)
	Total income tax expense (recovery)	 	 	(3,110	)	 	 	(30,729	)

   

  
    38

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used
    for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Deferred tax assets	 	 	 	 	 	 	 	 
	Property and equipment	 	 	1,712	 	 	 	952	 
	Intangible assets	 	 	44	 	 	 	110	 
	Non-capital losses carried forward	 	 	8,159	 	 	 	11	 
	Lease liabilities	 	 	3,557	 	 	 	—	 
	Others	 	 	939	 	 	 	1,176	 
	Total deferred tax assets	 	 	14,411	 	 	 	2,249	 
	Deferred tax liabilities	 	 	 	 	 	 	 	 
	Property and equipment	 	 	(16	)	 	 	(26	)
	Intangible assets	 	 	(15,447	)	 	 	(656	)
	Lease right-of-use assets	 	 	(3,226	)	 	 	—	 
	Other	 	 	(2,191	)	 	 	(2,087	)
	Total deferred tax liabilities	 	 	(20,880	)	 	 	(2,769	)
	Net deferred tax liabilities	 	 	(6,469	)	 	 	(520	)
	As presented on the consolidated balance sheets:	 	 	 	 	 	 	 	 
	Deferred tax assets	 	 	109	 	 	 	186	 
	Deferred tax liabilities	 	 	(6,578	)	 	 	(706	)
	Net deferred tax liabilities	 	 	(6,469	)	 	 	(520	)

   

  2020 

   

  	 	 	
          Balance as

          at March 31, 2019

        	 	 	
          Charged

          (credited) to

          consolidated

          statement of loss

        	 	 	
          Business

          acquisitions and other

        	 	 	
          Balance as

          at March 31, 2020

        	 
	 	 	$	 	 	$	 	 	$	 	 	$	 
	Deferred tax assets (liabilities) continuity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Property and equipment	 	 	926	 	 	 	778	 	 	 	(8	)	 	 	1,696	 
	Intangible assets	 	 	(546	)	 	 	2,461	 	 	 	(17,318	)	 	 	(15,403	)
	Lease liabilities	 	 	—	 	 	 	2,901	 	 	 	656	 	 	 	3,557	 
	Lease right-of-use assets	 	 	—	 	 	 	(2,587	)	 	 	(639	)	 	 	(3,226	)
	Non-capital losses carried forward	 	 	11	 	 	 	1,280	 	 	 	6,868	 	 	 	8,159	 
	Other	 	 	(911	)	 	 	(1,674	)	 	 	1,333	 	 	 	(1,252	)
	Net deferred tax liabilities	 	 	(520	)	 	 	3,159	 	 	 	(9,108	)	 	 	(6,469	)

   

  
    39

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  2019 

   

  	 	 	
          Balance as

          at March 31, 2018

        	 	 	
          Charged

          (credited) to

          consolidated

          statement of loss

        	 	 	
          Business

          acquisitions and other

        	 	 	
          Balance as

          at March 31, 2019

        	 
	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	Deferred tax assets (liabilities) continuity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Property and equipment	 	 	92	 	 	 	834	 	 	 	—	 	 	 	926	 
	Intangible assets	 	 	(1,014	)	 	 	1,139	 	 	 	(671	)	 	 	(546	)
	Part VI.1 tax	 	 	(29,944	)	 	 	29,944	 	 	 	—	 	 	 	—	 
	Non-capital losses carried forward	 	 	97	 	 	 	(86	)	 	 	—	 	 	 	11	 
	Other	 	 	152	 	 	 	(1,043	)	 	 	(20	)	 	 	(911	)
	Net deferred tax liabilities	 	 	(30,617	)	 	 	30,788	 	 	 	(691	)	 	 	(520	)

   

  The Company has accumulated other deductible temporary differences of $2,960 (2019 – $2,029) for Canadian tax purposes for which no deferred tax asset is recognised.

   

  The Company has accumulated research and development expenditures of $12,167 (2019 – $11,826) for Canadian federal income tax purposes. These expenditures are available to
    reduce future taxable income and have an unlimited carryforward period.

   

  	 	 	2020	 	 	2019	 	 	
          Year in

          which the

          losses begin to expire

        	 
	 	 	$	 	 	$	 	 	 	 
	Non-capital loss carryforwards	 	 	 	 	 	 	 	 	 	 	 	 
	Canada	 	 	62,810	 	 	 	50,596	 	 	 	2034	 
	Belgium	 	 	31,100	 	 	 	23,708	 	 	 	No expiry	 
	Netherlands	 	 	20,410	 	 	 	12,145	 	 	 	2024	 
	United States	 	 	120	 	 	 	350	 	 	 	2035	 
	Germany	 	 	15,814	 	 	 	—	 	 	 	No expiry	 
	Switzerland	 	 	8,085	 	 	 	—	 	 	 	2021	 
	Australia	 	 	1,901	 	 	 	—	 	 	 	No expiry	 
	Total non-capital loss carryforwards	 	 	140,240	 	 	 	86,799	 	 	 	 	 

   

  The tax benefits of non-capital losses in Canada (with the exception of an amount of non-capital losses $5,139 in Chronogolf which was recognised), Belgium and Netherlands have
    not been recognised.

   

  The change in statutory tax rate is mostly due to the annual 0.1% decrease in the Quebec tax rate over the course of five years, from 11.9% to 11.5%.

   

  Government assistance

   

  The Company incurred research and development expenditures and e-business development expenses which are eligible for tax credits. The tax credits recorded are based on
    management’s estimate of amounts expected to be recovered and are subject to audit by the taxation authorities and, accordingly, these amounts may vary. For the year ended March 31, 2020, the Company recorded a Canadian provision for refundable tax
    credits of $2,961 (2019 – $2,343). This amount has been recorded as a reduction of research and development and e-business development expenditures for the year.

   

  
    40

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  As at March 31, 2020, the Company has available Canadian federal non-refundable investment tax credits of $1,924 (2019 – $2,016) related to research and development
    expenditures which may be used to reduce Canadian federal and provincial income taxes payable in future years. These non-refundable investment tax credits begin to expire in 2033. The Company also has a non-refundable e-business tax credit of $1,844
    (2019 – $1,266) expiring on various dates starting in 2035.

   

  The benefits of these non-refundable investment tax credits have not been recognized in the consolidated financial statements.

   

  25. Commitments

   

  On April 1, 2019, the Company recognized right-of-use assets for non-cancellable operating lease arrangements, except for short-term leases excluded from the IFRS 16 transition
    due to the election of the practical expedient. Refer to note 15.

   

  The Company was not subject to any other commitments other than those described above.

   

  The future minimum lease payments under non-cancellable operating leases, prior to the adoption of IFRS 16, as at March 31, 2019 were as follows:

   

  	 	 	$	 
	2020	 		2,995	 
	2021	 	 	2,328	 
	2022	 	 	2,172	 
	2023	 	 	2,199	 
	2024	 	 	2,174	 
	2025 and thereafter	 	 	2,930	 
	Total minimum payments	 	 	14,798	 

   

  26. Contingencies

   

  The Company is in receipt of a claim of alleged infringement of intellectual property. The Company believes that the claim is without merit and no provision has been made.

   

  The Company is involved in other litigations and claims in the normal course of business. Management is of the opinion that any resulting provisions and ultimate settlements
    would not materially affect the financial position and operating results of the Company.

   

  27. Stock-based compensation (numbers of shares and awards are presented in per share and per award amounts)

   

  In 2012, the Company established the 2012 option plan (which was amended in 2015 and 2019) (the “2012 Legacy Option Plan”). In 2016, in connection with the grant of options to
    two senior executives of the Company, the Company established the 2016 option plan (which was amended in 2019) (the “2016 Legacy Option Plan” and, together with the 2012 Legacy Option Plan, the “Legacy Option Plans”). Employee stock option grants under
    the Legacy Option Plans generally vest as to 25% a year annually over four years and have a term of seven years. In connection with the IPO, the Legacy Option Plans were amended such that outstanding options granted thereunder are exercisable for
    Subordinate Voting Shares and no further awards can be made under the Legacy Option Plans.

   

  
    41

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  In connection with the IPO, an omnibus incentive plan (the “Omnibus Incentive Plan”) was adopted. It was subsequently amended in November 2019. The Omnibus Incentive Plan
    allows the Board to grant long-term equity-based awards to eligible participants in the form of stock options, RSUs, DSUs, and PSUs. All options granted under the Omnibus Incentive Plan have an exercise price determined and approved by the Board at the
    time of grant, which cannot be less than the market price of a Common Share on the date of the grant. Employee stock options under the Omnibus Incentive Plan generally vest as to 25% on the first anniversary of the grant date and then monthly
    thereafter for 36 months until fully vested, are granted with a term of seven years and settled via the issuance of new shares upon exercise. A portion of stock option grants under the Omnibus Incentive Plan vest as to 20% on the first anniversary, 25%
    on the second and third anniversaries and 30% on the fourth anniversary of the grant date.

   

  Each RSU, DSU and PSU evidences the right to receive one Subordinate Voting Share (issued from treasury or purchased on the open market), cash based on the value of a Common
    Share or a combination thereof at some future time. RSUs under the Omnibus Incentive Plan generally vest as to 30% on the first anniversary of the grant date and in eight equal quarterly tranches thereafter until fully vested. PSU vesting is
    conditional on the attainment of specified performance metrics determined by the Board. RSUs and PSUs must be settled before the date that is three years after the last day of the calendar year in which the performance of services for which the RSUs or
    PSUs were granted, occurred. DSUs generally vest on the grant date and must be settled after the termination date of the holder, but prior to the last day of the calendar year following such termination date. Each of RSUs, DSUs and PSUs may be settled
    via the issuance of shares, cash or a combination thereof at the discretion of the Board.

   

  The Company has also made grants of stock options and RSUs without shareholder approval in compliance with an allowance under the rules of the Toronto Stock Exchange as
    inducements for executive officers to enter into contracts of full-time employment with the Company. The terms of such grants generally align with the terms governing grants of comparable awards under the Omnibus Incentive Plan.

   

  The number of Subordinate Voting Shares reserved for issuance under the Omnibus Incentive Plan and the Legacy Option Plans, collectively, was 8,700,251.

   

  The stock option activity and the weighted average exercise price are summarized as follows:

   

  	 	 	2020	 	2019	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
          Number

          of options

        	 	 	
          Weighted

          average

          exercise

          price

        	 	 	
          Number

          of options

        	 	 	
          Weighted

          average

          exercise

          price

        	 
	 	 	 	 	 	$	 	 	 	 	 	$	 
	Outstanding – Beginning of year	 	 	5,986,234	 	 	 	4.402	 	 	 	4,871,275	 	 	 	2.910	 
	Granted	 	 	3,476,465	 	 	 	25.128	 	 	 	2,876,153	 	 	 	5.990	 
	Exercised	 	 	(1,469,127	)	 	 	2.410	 	 	 	(434,774	)	 	 	1.201	 
	Forfeited	 	 	(429,266	)	 	 	10.487	 	 	 	(1,196,046	)	 	 	3.764	 
	Expired	 	 	(6,732	)	 	 	18.761	 	 	 	(130,374	)	 	 	0.192	 
	Outstanding – End of year	 	 	7,557,574	 	 	 	13.964	 	 	 	5,986,234	 	 	 	4.402	 
	Exercisable – End of year	 	 	1,651,692	 	 	 	4.000	 	 	 	2,069,994	 	 	 	2.345	 

   

  
    42

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  The RSU, DSU and PSU activity and the weighted average grant date fair values are summarized as follows:

   

  	 	 	2020	 	 	2020	 	 	2020	 
	 	 	RSU	 	 	DSU	 	 	PSU	 
	 	 	
          Number

          of options

        	 	 	
          Weighted

          average

          grant date

          fair value

        	 	 	
          Number

          of options

        	 	 	
          Weighted

          average

          grant date

          fair value

        	 	 	
          Number

          of options

        	 	 	
          Weighted

          average

          grant date

          fair value

        	 
	 	 	 	 	 	 	 	$	 	 	 	 	 	 	 	$	 	 	 	 	 	 	 	$	 
	Outstanding – Beginning of year	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Granted	 	 	124,162	 	 	 	24.640	 	 	 	7,109	 	 	 	25.660	 	 	 	84,326	 	 	 	24.750	 
	Released	 	 	(1,176	)	 	 	24.110	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Forfeited	 	 	(5,217	)	 	 	24.110	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Outstanding – End of year	 	 	117,769	 	 	 	24.668	 	 	 	7,109	 	 	 	25.660	 	 	 	84,326	 	 	 	24.750	 

   

  The fair value of stock options granted to employees was estimated at the dates of grant using the Black-Scholes option-pricing model with the following weighted average
    assumptions:

   

  	 	 	2020	 	 	2019	 
	 	 	 	 	 	 	 
	Expected volatility	 	 	40.81%	 	 	 	42.79%	 
	Risk-free interest rate	 	 	1.27%	 	 	 	2.18%	 
	Expected option life	 	 	4.57 years	 	 	 	4.90 years	 
	Expected dividend yield	 	 	0%	 	 	 	0%	 
	Forfeiture rate	 	 	25.46%	 	 	 	17.38%	 

   

  The fair value of stock options, RSUs, DSUs and PSUs granted in 2020 amounted to $37,689 (2019 – $6,687). The initial aggregate fair value of options and RSUs forfeited in 2020
    amounted to $1,901 (2019 – $1,870). For the year ended March 31, 2020, stock-based compensation expense of $8,870 (2019 – $1,693) was recorded in the consolidated statement of loss and comprehensive loss with a corresponding credit to additional
    paid-in capital.

   

  As at March 31, 2020, the total remaining unrecognized stock-based compensation expense related to unvested stock options, RSUs, and PSUs, amounted to $16,956 (2019 – $3,735),
    which will be amortized over the weighted average remaining requisite service period of 1.728 years (2019 – 2.04 years).

   

  The following table summarizes information with respect to stock options outstanding and stock options exercisable as at March 31, 2020:

   

  	 	 	 	Awards outstanding	 	 	Awards exercisable	 
	
          Exercise

          price

        	 	 	
          Number

          of options

        	 	 	
          Weighted average

          remaining

          contractual life (years)

        	 	 	
          Weighted average

          exercise price

        	 	 	
          Number

          of options

        	 	 	
          Weighted average

          remaining

          contractual life (years)

        	 	 	
          Weighted average

          exercise price

        	 
	$	 	 	 	 	 	 	 	 	$	 	 	 	 	 	 	 	 	$	 
	0.26 to 4.36 	 	 	 	975,676	 	 	 	2.873	 	 	 	2.538	 	 	 	846,113	 	 	 	2.723	 	 	 	2.430	 
	4.37 to 4.86	 	 	 	1,879,975	 	 	 	4.984	 	 	 	4.720	 	 	 	483,930	 	 	 	4.901	 	 	 	4.720	 
	4.87 to 16.45	 	 	 	1,328,382	 	 	 	5.583	 	 	 	6.849	 	 	 	321,649	 	 	 	5.595	 	 	 	7.049	 
	16.46 to 23.73	 	 	 	1,261,995	 	 	 	6.413	 	 	 	21.962	 	 	 	—	 	 	 	—	 	 	 	—	 
	23.74 to 30.71	 	 	 	2,111,546	 	 	 	6.706	 	 	 	27.170	 	 	 	—	 	 	 	—	 	 	 	—	 
	Total	 	 	 	7,557,574	 	 	 	5.536	 	 	 	13.964	 	 	 	1,651,692	 	 	 	3.920	 	 	 	4.000	 

   

  
    43

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  The following table summarizes information with respect to stock options outstanding and stock options exercisable as at March 31, 2019:

   

  	 	 	 	Options outstanding	 	 	Options exercisable	 
	
          Exercise

          price

        	 	 	
          Number

          of options

        	 	 	
          Weighted average

          remaining

          contractual life (years)

        	 	 	
          Weighted average

          exercise price

        	 	 	
          Number

          of options

        	 	 	
          Weighted average

          remaining

          contractual life (years)

        	 	 	
          Weighted average

          exercise price

        	 
	$	 	 	 	 	 	 	 	 	$	 	 	 	 	 	 	 	 	$	 
	0.00 to 2.86	 	 	 	1,398,812	 	 	 	4.844	 	 	 	1.628	 	 	 	1,308,657	 	 	 	4.897	 	 	 	1.581	 
	2.87 to 4.36	 	 	 	838,931	 	 	 	4.328	 	 	 	3.200	 	 	 	498,952	 	 	 	4.192	 	 	 	3.098	 
	4.37 to 4.86	 	 	 	2,068,309	 	 	 	5.981	 	 	 	4.720	 	 	 	258,157	 	 	 	5.860	 	 	 	4.720	 
	4.87 to 5.50	 	 	 	556,842	 	 	 	6.353	 	 	 	5.000	 	 	 	4,228	 	 	 	6.344	 	 	 	5.000	 
	5.51 to 11.99	 	 	 	1,123,340	 	 	 	6.718	 	 	 	7.869	 	 	 	—	 	 	 	—	 	 	 	—	 
	Total	 	 	 	5,986,234	 	 	 	5.657	 	 	 	4.402	 	 	 	2,069,994	 	 	 	4.850	 	 	 	2.345	 

   

  28. Related party transactions

   

  Key management personnel includes 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:

   

  	 	 	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	 

   

  29. Financial instruments

   

  Fair value

   

  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.

   

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

   

  
    44

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  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 March 31 2020 and 2019.

   

  The fair value of Redeemable Preferred Shares was determined using a discounted cash flow approach (and a discount rate of 23.0% to 25.0%) in order to determine the fair market
    value of the enterprise value of the Company. This approach is considered to be appropriate when valuing a business where significant fluctuations in the future earnings or discretionary cash flow are expected or where the historical/current operating
    results of the Company are not considered to be representative of the future earnings capacity of the Company. The market value of the Redeemable Preferred Shares was used to determine their fair value at the time of the IPO.

   

  As at March 31 2020 and 2019, financial instruments measured at fair value in the consolidated balance sheets were as follows:

   

  	 	 	2020	 	 	2019	 
	 	 	
          Fair

          value

          hierarchy

        	 	 	
          Carrying

          amount

        	 	 	
          Fair

          value

        	 	 	
          Fair

          value

          hierarchy

        	 	 	
          Carrying

          amount

        	 	 	
          Fair

          value

        	 
	 	 	 	 	 	$	 	 	$	 	 	 	 	 	$	 	 	$	 
	Cash and cash equivalents	 	 	Level 1	 	 	 	210,969	 	 	 	210,969	 	 	 	Level 1	 	 	 	207,703	 	 	 	207,703	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Restricted cash	 	 	Level 1	 	 	 	9,532	 	 	 	9,532	 	 	 	—	 	 	 	—	 	 	 	—	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contingent consideration	 	 	Level 3	 	 	 	0	 	 	 	0	 	 	 	—	 	 	 	—	 	 	 	—	 

   

  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 the
    next 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 consolidated balance sheets. The change in the fair
    value of the contingent consideration, if any, is recognized within general and administrative expenses in the consolidated statements of loss and comprehensive loss. As at March 31, 2020, there was no change in the estimated contingent consideration
    from the time of the acquisition.

   

  Credit and concentration risk

   

  Generally, the carrying amount on the consolidated balance sheet of the Company’s financial assets exposed to credit risk, net of any applicable provisions for losses,
    represents the maximum amount exposed to credit risk.

   

  The Company’s credit risk is primarily attributable to its cash and cash equivalents and trade receivables. The Company does not require a guarantee from its customers. Credit
    risk with respect to cash and cash equivalents is managed by maintaining balances only with high credit quality financial institutions.

   

  
    45

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  Due to the Company’s diverse customer base, there is no particular concentration of credit risk related to the Company’s trade receivables. Moreover, trade receivable balances
    are managed and analyzed on an ongoing basis to ensure allowances for doubtful accounts are established and maintained at an appropriate amount.

   

  The Company maintains a loss allowance for a portion of trade receivables when collection becomes doubtful on the basis described in note 3. As described in that note, the ECL
    includes forward-looking factors specific to the debtors and the economic environment.

   

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

   

  Potential effects from the COVID-19 pandemic on the Company's credit risk have been considered and have resulted in increases to its allowances for ECLs. The Company continues
    its assessment given the fluidity of COVID-19's global impact.

   

  The loss allowance as at March 31, 2020 was determined as follows:

   

  	 	 	
          Not 

          past due

        	 	 	0–30	 	 	30–60	 	 	60–90	 	 	90–180	 	 	180+	 
	Expected loss rate	 	 	4	%	 	 	17	%	 	 	45	%	 	 	63	%	 	 	74	%	 	 	83	%
	Gross carrying amount	 	 	2,147	 	 	 	2,264	 	 	 	494	 	 	 	476	 	 	 	591	 	 	 	1,749	 
	Loss allowance	 	 	86	 	 	 	385	 	 	 	222	 	 	 	300	 	 	 	437	 	 	 	1,448	 

   

  Changes in the loss allowance were as follows:

   

  	 	 	2020	 
	 	 	$	 
	Balance, beginning of year	 		1,703	 
	Increase	 	 	2,234	 
	Write-offs	 	 	(1,059	)
	Balance, end of year	 	 	2,878	 

   

  The details of the Company’s trade receivables are as follows:

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	Not past due	 	 	2,147	 	 	 	1,893	 
	Past due less than 90 days	 	 	3,234	 	 	 	1,693	 
	Past due more than 90 days	 	 	2,340	 	 	 	2,949	 
	Total	 	 	7,721	 	 	 	6,535	 
	Loss allowance	 	 	(2,878	)	 	 	(1,703	)
	Balance – End of year	 	 	4,843	 	 	 	4,832	 

   

  Liquidity risk

   

  The Company is exposed to the risk of being unable to honour its financial commitments by the deadlines set, under the terms of such commitments and at a reasonable price. The
    Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities.

   

  
    46

    
      
 

  

   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  As at March 31, 2020, the maturity analysis of financial liabilities represented the following:

   

  	 	 	< 1	 	 	1 to 3	 	 	4 to 5	 	 	>5	 	 	 	 
	 	 	Year	 	 	Years	 	 	Years	 	 	Years	 	 	Total	 
	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	Accounts payable and accrued liabilities	 	 	30,810	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	30,810	 
	Other long-term liabilities	 	 	—	 	 	 	8,198	 	 	 	—	 	 	 	—	 	 	 	8,198	 
	Long-term debt	 	 	—	 	 	 	—	 	 	 	30,000	 	 	 	—	 	 	 	30,000	 

   

  For the maturity analysis of lease liabilities, see note 15.

   

  The Company has $210,969 of cash and cash equivalents as well as $25,000 available under the Revolver as at March 31, 2020, demonstrating its liquidity and its ability to cover
    upcoming financial liabilities.

   

  Currency risk

   

  The Company is exposed to currency risk due to financial instruments denominated in foreign currencies. The following table provides a summary of the Company’s exposure to the
    Canadian dollar, the euro, the British pound sterling, the Australian dollar and the Swiss Franc, expressed in US dollars:

   

  	2020	 	CAD	 	 	EUR	 	 	GBP	 	 	AUD	 	 	CHF	 	 	Total	 
	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	Cash and cash equivalents and restricted cash	 	 	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	)
	Other long-term liabilities	 	 	—	 	 	 	(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	)

   

  The table below shows the immediate increase/(decrease) in net loss before tax of a 1% strengthening in the closing exchange rate of significant currencies to which the Company
    has transaction exposure as at March 31, 2020. The sensitivity associated with a 1% weakening of a particular currency would be equal and opposite. This assumes that each currency moves in isolation.

   

  	 	 	 	CAD	 	 	EUR	 	 	GBP	 	 	AUD	 	 	CHF	 
	 	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 
	2020	 	 	 	(533	)	 	 	(53	)	 	 	(2	)	 	 	(23	)	 	 	(8	)

   

  The Company does not enter into arrangements to hedge its currency risk exposure.

   

  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 the Company’s cash earns interest. The Company’s
    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. The Company is not exposed to material interest rate risk.

   

  
    47

    
      
 

  

  
   

  	Lightspeed POS Inc.
	Notes to Consolidated Financial Statements
	For the years ended March 31, 2020 and 2019
	(expressed in thousands of US dollars)

   

  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 the Company’s 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 the Company’s ordinary share price of 10% would result in a change of $160 as at March 31,
    2020.

   

  30. Capital risk management

   

  The general objectives of the Company to manage its capital reside in the preservation of the Company’s ability to continue operating, in providing benefits to its stakeholders
    and in providing an adequate return on investment to its shareholders by selling its services at a price commensurate with the level of operating risk assumed by the Company.

   

  The Company thus determines 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 in the risks of the underlying assets.

   

  Refer to note 21 for information on the Company's Credit Facilities.

   

  31. Geographic information

   

  The geographic segmentation of the Company’s assets is as follows:

   

  	 	 	 	2020	 	 	2019	 
	 	 	 	
          Property and

          equipment

        	 	 	
          Right-of-

          use assets

        	 	 	Intangible assets	 	 	Goodwill	 	 	
          Property and

          equipment

        	 	 	Intangible assets	 	 	Goodwill	 
	 	 	 	$	 	 	 	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	Germany	 	 	 	215	 	 	 	735	 	 	 	31,614	 	 	 	74,888	 	 	 	—	 	 	 	—	 	 	 	—	 
	Australia	 	 	 	192	 	 	 	751	 	 	 	12,488	 	 	 	26,844	 	 	 	—	 	 	 	—	 	 	 	—	 
	Switzerland	 	 	 	153	 	 	 	680	 	 	 	12,250	 	 	 	16,471	 	 	 	—	 	 	 	—	 	 	 	—	 
	Canada	 	 	 	5,634	 	 	 	10,084	 	 	 	6,138	 	 	 	7,905	 	 	 	3,360	 	 	 	1,319	 	 	 	2,046	 
	Other	 	 	 	1,795	 	 	 	3,707	 	 	 	329	 	 	 	20,490	 	 	 	2,012	 	 	 	1,299	 	 	 	20,490	 

   

  Geographic sales based on customer location are detailed as follows:

   

  	 	 	2020	 	 	2019	 
	 	 	$	 	 	$	 
	 	 	 	 	 	 	 
	United States	 	 	67,814	 	 	 	42,885	 
	Netherlands	 	 	12,716	 	 	 	10,972	 
	Canada	 	 	12,685	 	 	 	8,840	 
	Belgium	 	 	7,651	 	 	 	6,416	 
	Other	 	 	19,771	 	 	 	8,338	 

   

   

  48

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