Investor Presentation Apivio Systems Inc. (TSX: APV.V) November - - PowerPoint PPT Presentation

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Investor Presentation Apivio Systems Inc. (TSX: APV.V) November - - PowerPoint PPT Presentation

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


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

Apivio Systems Inc. (TSX: APV.V)

www.apivio.com

November 2016

Investor Presentation

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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

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www.apivio.com

Disrupting Enterprise Communications

Beyond Devices Beyond Mobility Beyond Voice

VoIP ne networ

  • rk
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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.

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NEC RELATIONSHIP EXPANDS APIVIO’S 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

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VALIDATED FOR USE WITH BROADSOFT PARTNERS

MONET SERIES UT880s

Market opportunity expanded to include BroadSoft’s customers A significant new sales channel for Apivio starting with the UT880s Over 12 million lines and 600+ service providers across 80 countries A leader in the rapidly-growing cloud- based unified communications space

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MONET SERIE RIES UT880 880: SOLD THROUGH NEC 31%

Others

Market Share Distribution

  • f Enterprise Telephony

Vendors Globally

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

* 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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Multiple Vertical Industry & Customizations with One Device

Hotel Room Dialer Security Personnel CRM Integration Receptionist Video Conferencing

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www.apivio.com UT880s displayed a at the An Annual NE NEC Ad Advantage R Resellers C Conference UT88 880 apps are a priority

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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, 519,509 700, 00,402 799, 799,978 924, 924,213 1,072, 72,164 164 20 2015 15 20 2014 14 20 2013 13 20 2012 12 20 2011 11 1,200, 0,000 00 900, 00,00 000 600, 00,00 000 300, 00,00 000 YTD TD ‘ ‘16 765, 765,458

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www.apivio.com

Mobility for the Office Desk Phone

New c com

  • mmun

unications ns opt

  • ptions

ns

Messaging and SMS. 2 lines for multiple phone numbers

Remote tely ly p provis isio ion-ab able

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

Rich features es

Call transfer to internal and external phones Paging and speakerphone

True e cordles ess f freedom

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

Tru ruly tra ravel-frien endly

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

Elim limin inatin ting all l permanent t cablin ling

No installation of phone jacks No wired ethernet ports

More than 150k sold in Korea

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CLive Introduces New Cloud Services

THAT ENHANCE HARDWARE DEVICES

VoIP ne networ

  • rk

Data Co Colle llection & & Analysis is Device M Management Se Self lf-Troubleshooting Interface C Customization Enha nhanc nced A Appl pplications

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Demonstrated Revenue & Adjusted EBITDA Growth

Annual and YTD Revenue & Adjusted EBITDA

2012 2012 2013 2013 2014 2014 2015 2015

in '000s Canadian Dollars

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Adjusted EBITDA: Positive for Last Ten Quarters

in '000s Canadian Dollars

Quarterly Adjusted EBITDA

Pos

  • sitive Adj

djusted EBITDA for

  • r Last Ten

n Qua Quarters

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Stronger Balance Sheet

Good cash position after 10 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 10 quarters of positive Adjusted EBITDA

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

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Stronger Balance Sheet

in '000s Canadian Dollars

Working Capital

Significant improvement in net working capital over the last two years

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Stronger Balance Sheet

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

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Superior Results from Korean Subsidiary

Moimstone Kor

  • rea (000

000’s CAD AD) 2014 2015 Rev even enue 46,415 59,694 EBITDA DA 1,643 2,814 Add ba Add back Head Office Ma Management Fees ees 671 622 R&D for No North American Products 1,003 2,111 Adjusted EBITDA 3,316 5,548 Adjusted EBITDA A % 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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Investment Highlights

Mar Market Cap apital alization

Share Pr Price ( (Nove vember 14, 14, 20 2016) 16) $0 $0.2 .25 Basic Sha Share res O Out utstandi ding g 52.8 52.8 Market C Capit italiz lizatio ion $13.2 $13.2 Debt ( (as on September 3 30, 2 2016) ($7.5) $7.5) Cash ( (as on September 3 30, 2 2016) $6.8 $6.8 Options p proceeds $0 $0 Enterp rpri rise V Value ue $13.9 $13.90

(amounts in C$ millions, except per share)

80 Em Empl ploy

  • yees in

n Cana nada da and nd Sout South h Kor

  • rea

20 2015 R 15 Reve venue/Employee $750 $750K

C$M M ex excep ept f for E EPS PS YTD ‘16 ‘16 20 2015 15 20 2014 14

Revenue $41 $41 $60 $60 $46. $46.6

  • Adj. E

EBITD TDA $1. $1.0 $2.1 $2.1 $1.4 $1.4 Cash ( (as at e end o

  • f period)

$6.8 $6.8 $5.5 $5.5 $1.8 $1.8 Debt (as a at e end o

  • f period)

$7.5 $7.5 $6.8 $6.8 $7.5 $7.5 EPS EPS $0.00 00 $0.02 02 $0.00 00

APV V stoc

  • ck valua

uation

  • n

Korean s subsidiary ~4x EV ~4x EV/EB EBITDA Entire c company ~0 ~0.3x 3x EV EV/Sales

Tic icker: : TSXV:A :APV

52 Week eek H Hi/Low C$0.24/ 24/C$0 C$0.48 .48 Insider o

  • wnership

21% 21%

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Key Managem emen ent Rob Bakshi

President & CEO

  • Serial technology entrepreneur who 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
  • 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
  • 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

Experienced Management Team

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Dire Directo tors Rob Bakshi

President & CEO

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

Rob McJunkin

Independent Director

  • 20 years experience in operational and strategic financing
  • Currently SVP, Finance and Corporate Services at Anthem Properties Group

Walter Andri

Independent Director

  • 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.

Jason Donville

Independent Director

  • Current President and CEO of Donville Kent Asset Management
  • Formerly employed by Cormark Securities, where he was ranked one of the top financial services analysts in Canada
  • Graduated from the Richard Ivey School of Business at Western University (MBA) in 1992

David Shaw

Independent Director

  • Professor Emeritus at Western University, Ivey Business School
  • Completed both an MBA and a PhD in Business Administration from the Wharton School of Business and University of

Pennsylvania respectively

  • Formerly served on the Boards of Directors at MRS Trust Company, a subsidiary of Investors Group, as well as Chair of the Audit

Committee at Silent Witness Inc., a publically listed TSX company.

Tim Howley

Independent Director

  • Chartered Accountant and Chartered Business Valuator.
  • Formerly a Partner at KPMG (1988-1999)
  • Formerly CFO, and then subsequently CEO of a major Western Canadian retail chain
  • Currently the CFO for the Mark Anthony Group of Companies

Rahul Aggarwal

Independent Director

  • Currently Vice President of Partner and Business Development, Product Marketing at Broadsoft, Inc
  • Previously served as Director – Alliances and Business Development at Blackbox Network Services
  • Previously Director of Product Line Management – Broadband Applications and Carrier Ethernet at Nokia Siemens Networks
  • Master of Business Administration in Marketing and a Bachelor of Engineering in Electronics and Communications

Experienced Board of Directors

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CATALYSTS FOR GROWTH

Global N NEC deploym yment Hig igh m marg rgin in, re recurri rring app re revenue will i impr prov

  • ve bus

business mode

  • del and

nd earni nings ngs profile ile Extend c channel b beyond NEC, inc nclude non non-NE NEC d dealer ers, , service e pr provi

  • viders a

and phon nd phone c com

  • mpanies
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www.apivio.com

In Conclusion

Disrupt upting the he VoIP VoIP phone phone market w with a h a smart Andr Androi

  • id

d de deskph phon

  • ne

Globa

  • bal exc

xclus usive ve pa partne nership w with h NEC Grow

  • wing K

ng Kor

  • rean bus

business is EBITDA posit positive a and nd funds R unds R&D for

  • r

ne new produ products Low Low Va Valua uation: n: ~4 ~4x x EV/ V/EBIT ITDA A of

  • f K

Kor

  • rean bi

biz or z or 0.35x r x reve venue nue Named d as T Top 1

  • p 10 VoIP

VoIP s sol

  • lut

ution n pr provi

  • vide

der by by Ent nterpr prise Telephon

  • ny

y Maga gazi zine and on t nd on the he B Branha nham 300 l list of

  • f C

Cana nada da’s top 2

  • p 25 IC

ICT com

  • mpa

panies 2016 T TSX Ve Vent ntur ure 5 50 Com

  • mpa

pany ny Top 2

  • p 20 Publ

ublic C Com

  • mpa

pany s y selected by by the he Cana nadian Innov Innovation E Exc xcha hange

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QUESTIONS?

Rob Bakshi, CEO

T: 6 T: 604-761 761-210 2100 rbakshi hi@api pivio.

  • .com
  • m

www.apivio.com

Da David id P Pais is, CF CFO

T: 6 T: 604-340 340-986 9866 dpa pais is@api pivio. io.com

Ba Babak P Pedram, , IR

T: 416 416-995 995-8651 8651 bpedram@vi virtusa sadvi viso sory.c y.com