A global leader in voice technology solutions that bring Android, Wi-Fi and VoIP together. April 2016

Transcription

1 A global leader in voice technology solutions that bring Android, Wi-Fi and VoIP together. April 2016 Apivio Systems Inc. (APV.V)

2 Disclaimer 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 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. cc 2

3 Our Vision on the Evolution of the Office Phone Office phones will become smart as happened with cell phones In the future, all enterprise phones will be smart desk phones 3

4 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 4

5 Lucrative Relationship with NEC Fueling Growth 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 5

6 Monet Series UT880: Sold Through NEC NEC is the third largest enterprise telephony vendor globally Sells more than 1.5 million phones annually Others 31% Cisco 15% Avaya 12% Digium 3% NEC 10% Huawei 4% Aastra Technologies 4% Mitel 4% Microsoft 5% *Nokia is undergoing an acquisition of Alcatel-Lucent *Mitel Acquired Aastra in November, 2013 Alcatel-Lucent 6% Unify 6% 6

7 Applications for Vertical Markets Voice / Video Recording SIP Clients Security RFID Media Interface Security (motion) Smoke Detectors Cordless Wi-Fi 7

8 Android Apps: Recurring Revenue Business 8

9 Dexter Series Phones: Stable, Growing, Defensible Business Dexter VoIP Phones More than 5 million phones sold Barrier to entry due to software customization 25%+ CAGR over last three years 9

10 Demonstrated Revenue and EBITDA Growth 10

11 EBITDA Positive for Last Seven Quarters 11

12 Stronger Balance Sheet Stronger cash position after 7 quarters of positive EBITDA and financing in March 2015 Debt is flat despite increase in sales. 12

13 Stronger Balance Sheet Significant improvement in networking capital over the last two years 13

14 Superior Results from Korean Subsidiary Moimstone Korea (000 s) Revenue 59,694 46,415 EBITDA 2,814 1,643 Add back: Head Office Management Fees R&D for North American Products 2,111 1,003 Adjusted EBITDA 5,548 3,316 Adjusted EBITDA % 9.3% 7.1% 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 14

15 Wi-Fi Phone: Disrupts Dect & ATA Products More than 100k sold in Korea 15

16 Investment Highlights (in C$ millions, except per share) Market Capitalization 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 Ticker: TSXV:APV 52 Week Hi/Low C$0.28/C$0.65 Insiders Own 21% C$M 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 APV stock valuation Korean legacy business alone Entire company ~4x EV/EBITDA ~0.4x EV/Sales 80 Employees in Canada and South Korea Rob Bakshi David Pais CEO CFO 2015 Revenue/Employee $750K 16

17 Experienced Management Team Key Management Rob Bakshi President & CEO David Pais CFO J. Y. Ahn CEO, Moimstone Korea S. H. Shin CTO, Moimstone Korea J. S. Kang CFO, Moimstone Korea Chang Il An Executive Director - Sales Serial technology entrepreneur that has built and sold businesses Founder and former CEO of Silent Witness Enterprises 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 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 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 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 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 17

18 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 18

19 In Conclusion 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 19

20 Questions? Rob Bakshi, CEO T: David Pais, CFO T: Sean Peasgood, IR T: