Enabling Cloud Video Surveillance Bob Brilon, President & CFO INVESTOR PRESENTATION October 2015 Common Stock 27.7 MM Shares Stock Symbol: IVDA GO
FORWARD LOOKING STATEMENT This presentation contains forward-looking statements that represent our beliefs, projections and predictions about future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievement described in or implied by such statements, including statements relating to: (a) Iveda s future revenue, expenses, margins, profitability, net income, taxes, adjusted net income, adjusted operating expenses and other measures of results of operations; and (b) Iveda Solution's ability to capitalize on industry trends. Actual results may differ materially from the expected results described in our forward-looking statements, including with respect to: development and acceptance of Iveda s services; competitive risks, including competing technologies, products and services, and the competitive activities of our competitors; risks associated with the introduction of new products and services; risks inherent in strategic relationships, and technology and service integration efforts. The preparation of our financial statements and forward-looking financial guidance requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions. Iveda assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the Iveda Solutions' securities should not place undue reliance on these forward-looking statements. 2
INVESTMENT HIGHLIGHTS SENTIR - Internet-based video surveillance PLATFORM Enabling Plug and Play Video Surveillance 1 2 Enabling, Disruptive Technology CLOUD based - NO On-Site SYSTEMS or DVRs License SERVICE PROVIDERS to compete for Market Share Proprietary and Efficient Software Platform Proprietary cloud based architecture Patented components Storage and Compute efficiency for Big Data 3 Extremely Scalable Recurring Business Model LICENSE large Service Providers to deliver to Millions of established customers 4 5 Defined Path to Profitable Growth Service Provider Contracts in place achieve profitability Large & Growing Market Nearly $60B Internet based video surveillance market 3
COMPANY OVERVIEW Iveda - CLOUD video surveillance Access from your phone, tablets, and computers anywhere in the world Alerts Email and SmartPhone Notifications Live and recorded video CLOUD is the Disruptive Technology Displacing DVRs and traditional on-site systems. IVEDA ENABLES Service Providers to compete for Market Share (Telcos, ISPs, Data Centers, Cable) We LICENSE our CLOUD video surveillance software platform They SELL Security/Peace of Mind to their millions of subscribers Plug and play cameras 4
REVENUE MODEL Simple Revenue Model - Extremely Scalable Service Providers pay IVEDA a monthly fee per Camera Service Providers Install SENTIR in THEIR Data Center THEY have the COST of hosting and storage License per camera for SENTIR Telecom Data Center Customer User Interface; Billing & Admin Tools Data Center Storage and Compute Optimization; Free Mobile Apps 5
MARKET OPPORTUNITY $18.7B Global IP Video Surveillance Market by 2020 International VSaaS $57.3B North America $38.6B Estimated CAGR for global sales for IP video surveillance from 2013-2020 37% Sources: IDC, Allied Market Research 6
Cloud-Based Video Management Platform: Proprietary and Patented components User Friendly Access live & recorded video from your computer or mobile device. No On-Site DVR Data Stored and Accessed in the defined CLOUD Easy to Deploy Devices are Plug and Play. Camera Compatibility Firmware can enable any IP camera. 7
SALES STRATEGY Data Centers Home License Revenue Service Providers Telecoms End Users SMBs Camera Revenue ISPs Enterprise Cable Service Providers Government 8
END USER APPLICATIONS Sentir s flexibility and cost-effectiveness provides an almost endless number of applications. Home Small & Medium Businesses (SMBs) Enterprise Government BABY & PETS SECURITY DELIVERIES EMPLOYEE & CUSTOMER Surveillance MARKETING DATA SECURITY OFF HOURS VANDALISM REMOTE INSPECTION MONITOR PRODUCTION EMPLOYEE SAFETY SCHOOLS TRAFFIC PUBLIC BUILDINGS 9
STRATEGIC BENEFITS For IVEDA Scale Service Providers - Millions of Customers. Established Infrastructure Service Provider will handle billing, hardware distribution, and data center for hosting Sentir on their cloud. Pay Per Device Model No up front fees, immediate positive cash flow for service providers is an easy purchase decision and builds annuity for Iveda. For Service Providers Average Revenue Per User (ARPU) Revenue from existing customers Simple And Cost-Effective Sentir is designed to utilize and optimize existing data center. Infrastructure Utilization Increased revenues for bandwidth and data storage in tandem with video surveillance service. 10
REVENUE MODEL Revenue Sources Software Licensing Fees - Perpetual $3/camera/month Service Providers expected to charge $5-$10/per camera Hardware IVEDA generates additional revenue from sales of its branded cameras Gross Margin 90% 25% 11
TELECOM CONTRACTS Philippines Long Distance Telecommunications - PLDT Philippines Largest Telecom Vietnam Post Telecommunications-VNPT Vietnam s Largest Telecom Viettronics Vietnam s Largest Electronics Manufacturer FPT Third Largest Telecommunications Provider in Vietnam TELMEX Telecom Part of America Movil 12
RECENT TELECOM PARTNERS UPDATE Philippine Long Distance Telephone Co - PLDT 10,000 unit PO ($1.33MM) Vietnam s Largest Telecom - VNPT Signed Framework Agreement in December 2014 Final licensing agreement Executed April 2015 50,000 unit commitment Hundreds of units per month per 63 provinces projected July Four Data Centers Installed with SENTIR P.O.s and Deposits in Process Viettronics 50,000 camera license commitment first year from June 2015 Agreement represent at least $1.8 Million in Annual Recurring Revenue In process for deposits and P.O.s (end customer is state owned telecom) FPT Agreement signed for 10,000 devices next 12 months VIETNAM TWO OTHER MAJOR TELECOMS IN PROCESS 13
ILLUSTRATIVE FINANCIALS MONTHLY CASH BREAKEVEN ANALYSIS Accumulated Activations Monthly License Fee Hardware Monthly 8k-10k units Hardware Margin Monthly Cash Op Exp. Positive Cash Flow 30,000 $90K (A) $1 - $1.2M $250K - 300K (B) $225K (C) A + B - C $115K to $165K CASHFLOW ANALYSIS EXAMPLE Activations Hardware Hardware Margin Annual License Fee Estimated Annual Cash Operating Expense 250,000 $30 M $7.5 M $9 M $4 M 500,000 $60 M $15 M $18 M $4.5 M 1,000,000 $120 M $30 M $36 M $5 M 14
ILLUSTRATIVE FINANCIALS REVENUE Customer PLDT First Year Camera Activations Average Camera Revenue First Year Camera Revenue Monthly Sentir Fee per Camera End of First Year Sentir Fee Annuity 10,000 $130 $1.3 Million $3 $0.36 Million VNPT 50,000 150,000 $120 $6.0 Million - $18 Million $3 $1.8 Million - 5.4 Million VIETTRONICS 50,000 $120 $6.0 Million $3 $1.8 Million FPT - IvedaHome Vietnam Telecom #3 10,000 $200 $2.0 Million $3 $.36 Million Vietnam Telecom #4 15
2015 PROJECT-BASED CONTRACTS MEGAsys (100% owned Taiwan System Integrator) Secured $1.8 M contract with Chunghwa Telecom Secured $1.4 M contract with Taiwan Stock Exchange Secured $500K contract with Taiwan International Airport Secured $1.5 M contract with Chunghwa Telecom Secured $544K contract with Chunghwa Telecom for 2015 MEGAsys anticipated to be positive cash flow and profitable for 2015 with just these announced projects. 16
CORPORATE ROADMAP With the launch of Sentir in 2014, Iveda is on course to execute on its licensing strategy culminating with an up list to Nasdaq and Profitability. Achieve Profitability NASDAQ Uplist Sign Additional Service Provider Agreements Path to Profitability Existing Service Provider Contracts Sentir Launch April 2014 17
EXPERIENCED LEADERSHIP Management David Ly Chairman/ CEO 10 years cloud video technology within the security industry 14 years Sales Management, Telecom industry Bob Brilon President/ CFO Technology Advisors Dr. Joseph Lee Cloud Architect Dr. Eric Chen Cloud Storage 30 years as CEO, President, and CFO of NASDAQ technology companies InPlay (NASDAQ:NPLA); Duraswitch (NASDAQ:DSWT); Rental Service Corp. (NYSE:RRR) and Go-Video (AMEX:VCR) Cloud computing expert CTO at 21Vianet, largest data center in China Sr exec at Microsoft, Lucent Technologies, Exxon and Owens Corning Founder/CEO of CA-based ProphetStor Data Services Big Data storage architecture expert Sr exec at FalconStor Software (NASDAQ: FALC), IBM 18
INVESTMENT HIGHLIGHTS SENTIR - Internet-based video surveillance PLATFORM Enabling Plug and Play Video Surveillance 1 2 Enabling, Disruptive Technology CLOUD based - NO On-Site SYSTEMS or DVRs License SERVICE PROVIDERS to compete for Market Share Proprietary and Efficient Software Platform Proprietary cloud based architecture Patented components Storage and Compute efficiency for Big Data 3 Extremely Scalable Recurring Business Model LICENSE large Service Providers to deliver to Millions of established customers 4 5 Defined Path to Profitable Growth Service Provider Contracts in place achieve profitability Large & Growing Market Nearly $60B Internet based video surveillance market 19
APPENDIX GO 20
True Plug & Play Easy to set up Excellent video quality at an affordable price See all your cameras on a single dashboard View from your computer, tablet or smartphone Cloud hosted, 24/7 Web access to live & recorded video Off-site cloud storage for video security 21