A Global Leader in Voice Technology Solutions Bringing Android, - - PowerPoint PPT Presentation

a global leader in voice technology solutions bringing
SMART_READER_LITE
LIVE PREVIEW

A Global Leader in Voice Technology Solutions Bringing Android, - - PowerPoint PPT Presentation

A Global Leader in Voice Technology Solutions Bringing Android, Wi-Fi and VoIP Together August 2016 Apivio Systems Inc. (TSX: APV.V) www.apivio.com DISCLAIMER THIS PRESENTATION HAS BEEN PREPARED BY APIVIO SYSTEMS INC. (THE COMPANY) SOLELY


slide-1
SLIDE 1

A Global Leader in Voice Technology Solutions Bringing Android, Wi-Fi and VoIP Together

August 2016 Apivio Systems Inc. (TSX: APV.V)

www.apivio.com

slide-2
SLIDE 2

2

www.apivio.com

THIS PRESENTATION HAS BEEN PREPARED BY APIVIO SYSTEMS INC. (THE “COMPANY”) SOLELY AS AN INTRODUCTION TO THE COMPANY AND ITS TECHNOLOGY. This Presentation is the sole responsibility of the Company. Information contained herein does not purport to be complete and is subject to certain qualifications and assumptions and should not be relied upon for the purposes of making an investment in the securities or entering into any transaction. The information and opinions contained in the Presentation are provided as at the date of this Presentation and are subject to change without notice and, in furnishing the Presentation, the Company does not undertake or agree to any obligation to provide recipients with access to any additional information or to update or correct the Presentation. No stock exchange, securities commission or similar regulatory authority has passed on the merits of any securities referred to in the Presentation, nor has it passed on or reviewed the Presentation. The Company is developing a new and unproven technology. It is subject to a large number of very significant challenges including the risk that no viable product will ever be developed and even if one is developed there is the risk that no market will exist for it. The Company is competing against companies with much greater resources and the Company’s continued existence is dependent on its ability to secure additional financing. The Presentation may contain “forward looking information” within the meaning of applicable Canadian Securities legislation concerning, among other things, the size of the market for potential applications of the Company’s technology and the timing of further technical development of the Company’s projects. There can be no assurance that the plans, intentions or expectations upon which these forward looking statements and information are based will occur. “Forward looking statements” and “forward looking information” are subject to a variety of risks, uncertainties and assumptions, including those discussed in the annual Management Discussion and Analysis and under “Risk Factors” in the Company’s public filings at www.sedar.com. Some of the factors which could affect future results and could cause results to differ materially from those expressed in the forward looking statements and information contained herein include: Risk of technological non-feasibility, obsolescence and inadequate economics, dependence on key personnel and key relationships with the Company’s technology licensor. Forward-looking statements and information are based on the beliefs, estimates and opinions of management at the date the statements are made and are subject to change without notice. The Company does not undertake to update forward-looking statements or information if management believes estimates or opinions or other circumstances should change. The Company also cautions potential investors that investments in new technology are inherently risky.

DISCLAIMER

slide-3
SLIDE 3

3

www.apivio.com

Our Vision on the Evolution of the Office Phone

Office phones will become “smart” as exemplified by cell phones. In the future, all enterprise phones will be smart desk phones.

slide-4
SLIDE 4

4

www.apivio.com

NEC RELATIONSHIP EXPANDS APIVIO HORIZONS

MONET SERIES UT880

Highlighting Apivio as an Innovative Company Entrenched platform for high-margin, recurring revenue Android apps Collaborating with NEC to develop more apps

slide-5
SLIDE 5

5

www.apivio.com

MONET SERIES UT880: SOLD THROUGH NEC 31%

Others

Market Share Distribution

  • f Enterprise Telephony

Vendors Globally

15% 10% 6% 6% 5% 4% 4% 4% 3% 12%

* Nokia is undergoing an acquisition of Alcatel-Lucent * Mitel acquired Aastra in November, 2013

NEC sells more than 1.5 million phones annually NEC is the 3rd largest enterprise telephony vendor globally

slide-6
SLIDE 6

6

www.apivio.com

Multiple Vertical Industry & Customizations with One Device

Hotel Room Dialer Security Personnel CRM Integration Receptionist Video Conferencing

slide-7
SLIDE 7

7

www.apivio.com UT880s displayed at the Annual NEC Advantage Resellers Conference UT880 apps are a priority

slide-8
SLIDE 8

8

www.apivio.com

Dexter Series Phones: Stable, Growing & Defensible Business

More than 5.5 million phones sold Barrier to entry due to software customization 25%+ CAGR over last three years

IP Phone Unit Sales

519,509 700,402 799,978 924,213 1,072,164 2015 2014 2013 2012 2011 1,200,00 000 900,000 00 600,000 00 300,000 00 H12016 501,066

slide-9
SLIDE 9

9

www.apivio.com

Mobility for the Office Desk Phone

New communication nications option ions

Messaging and SMS. 2 lines for multiple phone numbers

Re Remotely tely provisio ision-able ble

Configurable by the CLive cloud Switch between on-prem and external settings

Rich h featu ture res

Call transfer to internal and external phones Paging and speakerphone

True e cordles dless freedom dom

Anywhere Wi-Fi is available Not limited by charging station range

Truly uly travel el-fri friendly endly

Use at home, office, airports, hotels Charge with USB cable, stand optional

Elimi liminating ting all l permane nent t cablin ling

No installation of phone jacks No wired ethernet ports

More than 130k sold in Korea

slide-10
SLIDE 10

10

www.apivio.com

CLive Introduces New Cloud Services

THAT ENHANCE HARDWARE DEVICES

VoIP VoIP network

Data ta Collectio ection & Analy alysi sis Device Manage agemen ent Self-Tro roubles eshooting ting Interf erface ce Custom tomizati ization Enhan anced ced Appli licati cations

slide-11
SLIDE 11

11

www.apivio.com

Flexible Plans for Hardware and Services

Traditional up-front or subsidized hardware pricing

Hardware price CLive services Monthly CLive service fee Monthly hardware payment App store revenue share One-time purchase No No No Yes Subsidized price No Option 1: Hard rdwa ware re only Option 2: HW + CLive Yes Yes Yes

  • Hardwa

ware can be purcha chase sed d up-fr front

  • nt
  • r with subsidy

sidy and 24 24-mont

  • nth

h payment nts. s.

  • CLive service

ices are

  • ffe

fered d on a monthly ly basis is, and are requi uired red in hardwa ware re subsidy bsidy plan. n.

  • App store revenues

nues shared red with provider ider. .

slide-12
SLIDE 12

12

www.apivio.com

Demonstrated Revenue & Adjusted EBITDA Growth

$29,467 $35,039 $46,553 $59,990 $26,457 $(5,466) $(66) $1,420 $2,120 $408 $408

  • $10,000

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Annual Revenue Adjusted EBITDA H1 2016 2016

Annual Revenue & Adjusted EBITDA

2012 2012 2013 2013 2014 2014 2015 2015

in '000s Canadian Dollars

slide-13
SLIDE 13

13

www.apivio.com

Adjusted EBITDA: Positive for Last Nine Quarters

($400) ($200) $0 $200 $400 $600 $800 $1,000 $1,200 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

in '000s Canadian Dollars

Quarterly Adjusted EBITDA

Posi siti tive Adjus usted d EBITDA TDA for Las ast t Nine Quar arter ters

slide-14
SLIDE 14

14

www.apivio.com

Stronger Balance Sheet

  • $10,000
  • $8,000
  • $6,000
  • $4,000
  • $2,000

$0 $2,000 $4,000 $6,000 $8,000 $10,000 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Cash Debt Net Cash

Good cash position after 9 quarters of positive Adjusted EBITDA & financing in March 2015. Debt is flat despite increase in sales.

Quarterly Debt, Cash & Net Cash Position

Good cash position after 9 quarters of positive Adjusted EBITDA

Debt is flat despite increase in sales in '000s Canadian Dollars

slide-15
SLIDE 15

15

www.apivio.com

Stronger Balance Sheet

($4,000) ($2,000) $0 $2,000 $4,000 $6,000 $8,000 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

in '000s Canadian Dollars

Working Capital

Significant improvement in net working capital over the last two years

slide-16
SLIDE 16

16

www.apivio.com

Stronger Balance Sheet

10.9 9.7 3.1 2.7 2.9 2.5 2.6 2.3 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

Debt-to-Equity Ratio

Better balance sheet ratios due to prudent cash management, increased sales and improved margin

0.92 1.01 1.26 1.32 1.36 1.50 1.48 1.57 0.50 0.70 0.90 1.10 1.30 1.50 1.70 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

Current Ratio

slide-17
SLIDE 17

17

www.apivio.com

Superior Results from Korean Subsidiary

Moimstone Korea (000’s CAD) 2014 2015 Revenue 46,415 59,694 EBITDA 1,643 2,814 Add back Head Office Management Fees 671 622 R&D for North American Products 1,003 2,111 Adjusted EBITDA 3,316 5,548 Adjusted EBITDA % 7.1% 9.3%

The Korean Subsidiary (“MK”) sells to Korean Tier-1 telephone carriers Korean business producing revenue and EBITDA growth High barrier to entry due to customization done for Korean customers MK funds R&D of new products for Korean and North American markets

slide-18
SLIDE 18

18

www.apivio.com

Investment Highlights

Market Capitalization

Share Price (August 15, 2016) $0.29 Basic Shares Outstanding 52.8 52.8 Market Capitalization $15.3 15.3 Debt (as on June 30, 2016) ($7.0) Cash $4.3 $4.3 Options proceeds $0 $0 Enterprise Value $18.0 18.0

(amounts in C$ millions, except per share)

80 Employees in Canada and South Korea

Rob Bakshi CEO CEO David Pais CFO 2015 Revenue/Employee $750K

C$M except for EPS H1’ 2016 2015 2014

Reve venu nue $26 $26 $60 $60 $46.6 .6 Adj. . EBITDA $0.4 .4 $2.1 $2.1 $1.4 $1.4 Cash sh $4.3 $4.3 $5.5 $5.5 $1.8 $1.8 Debt $7.0 .0 $6.8 $6.8 $7.5 $7.5 EPS EPS ($0.0 .00) $0.0 .02 $0.0 .00

APV stock valuation…

Korean n legacy y busi sine ness ss alone ne ~4x x EV/EBIT EBITDA Entire ire compa pany ny ~0.3 .35x 5x EV/Sales les

Ticker: TSXV:APV

52 Week k Hi/Low

  • w

C$0 $0.25/ .25/C$0 $0.48 .48 Inside iders s Own 21% 21%

slide-19
SLIDE 19

Key Manage gement nt Rob Bakshi

President & CEO

  • Serial technology entrepreneur that has built and sold businesses
  • Founder and former CEO of Silent Witness Enterprises

David Pais

CFO

  • CFO at 3 successful companies over the last eleven years.
  • Most recently, CFO of a BC based manufacturing company that was sold to a Boston based NYSE listed US Public company for

$60M

  • Senior Vice President at Ernst & Young Corporate Finance, specializing in M&A and financing

Walter Andri

Sales – North America

  • Previously, President of Avaya Canada where he led the sales, service and support teams
  • Prior to Avaya, SVP at Primus Telecommunications, VP Small and Medium Business at TELUS Corporation, VP Channels for Koodo

Mobile, a subsidiary of TELUS.

  • Serves on the board of directors of UpSnap Inc. and Zaio Corporation
  • MBA from Queen’s University and an Honours Bachelor of Business Administration degree from Brock University.
  • J. Y. Ahn

CEO, Moimstone Korea

  • 8 years at Moimstone Korea, initially as head of Sales promoted to COO and then to CEO, Korea
  • Experience working in Sales, Management and Logistics in several tech companies in Korea
  • Electrical Engineer from Hanyang University, International Business Professional course from Kotra
  • S. H. Shin

CTO, Moimstone Korea

  • 9 years at leading electronics companies including Dasan Networks, Dain Telecom, nSYSTech and Hanwha working on Switching

systems, Semiconductors, VoIP & Wi-Fi and DSL solutions

  • 5 years of experience at Moimstone.
  • Bachelors Degree in Electronics and Computer Engineering from Korea University

Chang Il An

Sales – Korea

  • 7 years of experience managing major sales accounts and International Sales for Moimstone Korea
  • Headed Sales and Sales Engineering positions in Wareplus Co. and Wellink Co.
  • Degree in Information and Communications from Dong Seoul College

Experienced Management Team

19

Experienced Management Team

slide-20
SLIDE 20

20

www.apivio.com

CATALYSTS FOR GROWTH

Global l NEC depl ploym

  • yment

nt High margin, n, recur urring ing app p revenu nue will improve ve busines iness model l and d earni nings ngs profile file Extend nd channel nnel beyond

  • nd NEC,

inclu lude de non-NEC EC dealers, lers, service vice provide ders s and phone ne companie panies

slide-21
SLIDE 21

21

www.apivio.com

In Conclusion

Disrupting the VoIP phone market with a smart Android deskphone Global exclusive partnership with NEC Growing Korean business is EBITDA positive and funds R&D for new products Low Valuation: ~4x EV/EBITDA of Korean biz or 0.35x revenue Named as Top 10 VoIP solution provider by Enterprise Telephony Magazine and on the Branham 300 list of Canada’s top 25 ICT companies 2016 TSX Venture 50 Company

slide-22
SLIDE 22

QUESTIONS?

Rob b Bakshi, shi, CEO

T: 604-761 761-2100 rbaksh kshi@ap apivi vio.c .com

www.apivio.com

David d Pais, CFO

T: 604-340 340-9866 dpai ais@api @apivi vio.c .com

Babak Pedram, m, IR

T: 416-995 995-8651 8651 bpedram ram@vir @virtu tusa sadvi viso sory.c ry.com