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
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
August 2016 Apivio Systems Inc. (TSX: APV.V)
www.apivio.com
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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.
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Office phones will become “smart” as exemplified by cell phones. In the future, all enterprise phones will be smart desk phones.
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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
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Others
Market Share Distribution
Vendors Globally
* 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
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Hotel Room Dialer Security Personnel CRM Integration Receptionist Video Conferencing
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www.apivio.com UT880s displayed at the Annual NEC Advantage Resellers Conference UT880 apps are a priority
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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
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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
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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
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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
ware can be purcha chase sed d up-fr front
sidy and 24 24-mont
h payment nts. s.
ices are
fered d on a monthly ly basis is, and are requi uired red in hardwa ware re subsidy bsidy plan. n.
nues shared red with provider ider. .
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$29,467 $35,039 $46,553 $59,990 $26,457 $(5,466) $(66) $1,420 $2,120 $408 $408
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Annual Revenue Adjusted EBITDA H1 2016 2016
2012 2012 2013 2013 2014 2014 2015 2015
in '000s Canadian Dollars
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($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
Posi siti tive Adjus usted d EBITDA TDA for Las ast t Nine Quar arter ters
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$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.
Good cash position after 9 quarters of positive Adjusted EBITDA
Debt is flat despite increase in sales in '000s Canadian Dollars
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($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
Significant improvement in net working capital over the last two years
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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
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
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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
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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
C$0 $0.25/ .25/C$0 $0.48 .48 Inside iders s Own 21% 21%
Key Manage gement nt Rob Bakshi
President & CEO
David Pais
CFO
$60M
Walter Andri
Sales – North America
Mobile, a subsidiary of TELUS.
CEO, Moimstone Korea
CTO, Moimstone Korea
systems, Semiconductors, VoIP & Wi-Fi and DSL solutions
Chang Il An
Sales – Korea
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Global l NEC depl ploym
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
inclu lude de non-NEC EC dealers, lers, service vice provide ders s and phone ne companie panies
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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
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