April 2016 Apivio Systems Inc. (APV.V) Dis isclaim imer THIS - - PowerPoint PPT Presentation

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April 2016 Apivio Systems Inc. (APV.V) Dis isclaim imer THIS - - PowerPoint PPT Presentation

A global leader in voice technology solutions that bring Android, Wi-Fi and VoIP together. April 2016 Apivio Systems Inc. (APV.V) Dis isclaim imer THIS PRESENTATION HAS BEEN PREPARED BY APIVIO SYSTEMS INC. (THE COMPANY) SOLELY AS AN


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April 2016

Apivio Systems Inc. (APV.V) A global leader in voice technology solutions that bring Android, Wi-Fi and VoIP together.

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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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Dis isclaim imer

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Our Vis ision on the Evolu lution of the Office Phone

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In the future, all enterprise phones will be smart desk phones Office phones will become “smart” as happened with cell 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

NEC Rela lationship Exp xpands Apiv ivio Horiz izons

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Monet Series UT880

  • NEC is the exclusive distributor
  • 10,000 UT880 phones shipped to NEC North America in 2015
  • Received follow-on PO from NEC in March 2016
  • NEC is introducing the UT880 globally (beyond North America)
  • The UT880 will be certified to work on third party PBX’s to reach a broader market

Lucrativ ive Rela lationship wit ith NEC Fueli ling Growth

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  • NEC is the third largest enterprise telephony vendor globally
  • Sells more than 1.5 million phones annually

Monet Serie ies UT880: Sold Through NEC

6 Cisco 15% Avaya 12%

NEC 10%

Unify 6% Alcatel-Lucent 6% Microsoft 5% Mitel 4% Aastra Technologies 4% Huawei 4% Digium 3% Others 31%

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

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Voice / Video Recording Security RFID Security (motion) Cordless Wi-Fi Smoke Detectors Media Interface SIP Clients

Appli lications for Vertical Markets

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Android Apps: Recurrin ing Revenue Busin iness

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Dexter VoIP Phones

  • More than 5 million phones sold
  • Barrier to entry due to software customization
  • 25%+ CAGR over last three years

Dext xter Se Serie ries Phones: : St Stable le, Growin ing, g, Defensib ible le Busin iness

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Demonstrated Revenue and EBIT ITDA Growth

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EBIT ITDA Posit itiv ive for Last Seven Quarters

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Stronger Bala lance Sheet

Stronger cash position after 7 quarters of positive EBITDA and financing in March 2015 Debt is flat despite increase in sales.

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Stronger Bala lance Sheet

Significant improvement in networking capital over the last two years

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Superior Result lts from Korean Subsidiary

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

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

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Wi Wi-Fi Phone: Dis isrupts Dect & ATA Products

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More than 100k sold in Korea

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In Investment Hig ighli lights

Market Capitalization

(in C$ millions, except per share)

C$M 2015 2014 2013 Revenue $60 $46.6 $35

  • Adj. EBITDA

$2.1 $1.4 ($0.1) Cash $5.5 $1.8 $3.0 Debt $6.8 $7.5 $6.7

Ticker: TSXV:APV

52 Week Hi/Low C$0.28/C$0.65 Insiders Own 21%

APV stock valuation…

Korean legacy business alone ~4x EV/EBITDA Entire company ~0.4x EV/Sales

16 Share Price (March 31, 2016) $0.40 Basic Shares Outstanding 52.8 Market Capitalization $21.1 Debt (as on Dec 31, 2016) ($6.8) Cash Options proceeds $5.5 $0 Enterprise Value $22.4

80 Employees in Canada and South Korea

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

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Key Management 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
  • 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

  • 19 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
  • J. S. Kang

CFO, Moimstone Korea

  • 20 years of experience with finance and accounting at Dansung Electron, Vodus and Kolon

International

  • 7 years running the Moimstone Korea Finance department
  • Passed the US CPA Examination, degree in Business Administration from Konkuk University

Chang Il An

Executive Director - Sales

  • 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

Exp xperienced Management Team

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Catalysts for Growth

  • Global NEC deployment
  • High margin, recurring app revenue will

improve business model and earnings profile

  • Extend channel to include non-NEC

dealers, service providers and phone companies

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In In Conclu lusion

  • Disrupting the VoIP phone market with a smart

Android deskphone

  • Global exclusive partnership with NEC
  • Named as Top 10 VoIP solution provider by

Enterprise Telephony Magazine

  • Korean business generated $55M in revenue in

‘15, EBITDA positive and funds R&D for new products

  • Low Valuation: ~4x EV/EBITDA of Korean biz or

0.4x revenue

  • 2016 TSX Venture 50 Company

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  • Rob Bakshi, CEO

T: 604-761-2100 rbakshi@apivio.com

  • David Pais, CFO

T: 604-340-9866 dpais@apivio.com

Questions?

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  • Sean Peasgood, IR

T: 416-565-2805 Sean@SophicCapital.com