Mogo Announces Fourth Quarter & Full-Year 2019 Financial Results & Provides Update Related to COVID-19

Mogo’s COVID-19 Response: Helping Members Manage Through This Financial Challenge

Mogo’s platform empowers consumers with simple solutions to help them get in control of their financial wellness. During this challenging period, we are focused on helping customers in several areas:

  • Financial Relief – Mogo members who have a loan outstanding and have experienced a disruption in their employment will be offered payment options including reduced payments and deferred interest to help manage through this time.
  • Support & Coaching – We’re providing information to our members to help them navigate the various options they have available to them for assistance such as accessing government funding and EI and tips for things like potentially reducing car insurance while unemployed.
  • Spending Control – Living on a reduced budget is challenging. We’re rolling out our MogoSpend product, designed to help consumers track and control spending while earning cash back.
  • Monitor and Protect – Since a financial disruption can have a negative impact on a member’s credit score and identity fraud is on the rise, we will offer ID fraud protection for free for six months to any members who do not have MogoProtect. This is in addition to our free credit score product.  

Cost Reduction Initiatives

In light of the current economic volatility and uncertainty, Mogo is taking several immediate steps to accelerate its path to positive cash flow including the following initiatives, which, when combined, will reduce cash expenses in the second quarter by an estimated $5.0 million.

  • The Company is reducing expenses across the organization with a focus on deferring its growth investments in technology and development and marketing, excluding marketing efforts under the partnership with Postmedia Network Inc.  These reductions will result in a temporary layoff of approximately 30% of our team, as well as reduced compensation for the C-Suite.
  • Mogo has temporarily paused new on-balance-sheet loan originations. However, the Company will continue to originate loans for its lending partner. These loans generate recurring fee-based revenue for Mogo, with no capital investment or risk.
  • The Company will also exercise its option to capitalize interest payments on its non-convertible subordinated debentures beginning in Q2, resulting in cash conservation of approximately $1.4 million during the quarter. 

Greg Feller added: “We will continue to support our existing loan customers through this challenging period while directing new originations to our lending partners, which will allow us to continue to monetize our digital lending platform. We have been transitioning our business to a capital-light model for some time and, in light of the economic volatility and uncertainty, we are accelerating this transition and taking immediate steps, which we expect will allow us to mitigate the potential impact to our business during these uncertain times and accelerate our path to cash flow positive once we return to a more stable environment.”

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