Ackroo Inc. TSX Venture: AKR OTC Pink: AKRFF January 2019
ACKROO INC. DISCLAIMER Certain written and oral statements included in this presentation may constitute forward-looking information which reflect the current expectations of Ackroo. This information reflects Ackroo s current beliefs with respect to future events and are based on information currently available to management. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this presentation. Although forward-looking information contained in this presentation is based upon what Ackroo believes to be reasonable assumptions, management cannot assure Users that actual results, performance or achievements will be consistent with this forward-looking information and cautions that undue reliance should not be placed on the forward-looking information. The forward-looking information is made as of the date of this presentation and Ackroo does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law. 2
What we do Our Vision To simplify, consolidate and improve the merchant marketing landscape Our Mission To help Automotive, Petroleum, Hospitality and Retail merchants of all sizes attract, retain and grow their customers and their revenues Our Solution Gift Cards Loyalty Marketing An easy to use, self-serve marketing platform that manages important currencies including gift card, loyalty, and promotions An open solution that integrates seamlessly into a merchants point-of-sale environment or customer engagement application A product that provides merchants with key insights and tools to help shift, lift, retain, and engage their customers An in-store and online solution that will continue to evolve through product and industry consolidation 3
Our Results Revenue Annual Revenue $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Revenue Data Fiscal Year Amount +/-% 2012 $681,142 N/A 2013 $1,284,016 89% 2014 $1,328,166 3% 2015 $1,822,224 37% 2016 $2,224,165 22% 2017 $2,737,830 23% $0 2012 2013 2014 2015 2016 2017 2018 2018 $4,447,726 63% 4
Our Results - EBITDA Annual EBITDA $500,000 EBITDA Data Fiscal Year Amount +/-% $0 -$500,000 -$1,000,000 -$1,500,000 -$2,000,000 -$2,500,000 -$3,000,000 -$3,500,000 -$4,000,000 2012 2013 2014 2015 2016 2017 2018 2012 - $3,421,920 N/A 2013 - $2,509,484 27% 2014 - $1,608,162 36% 2015 - $853,021 47% 2016 - $607,466 29% 2017 - $502,315 17% 2018 +???? TBD% 5
Financial Highlights Proven Execution 40% CAGR Since Founded EBITDA Positive as of 2018 70% + of Revenue Recurring 80% + Gross Margins Closed 6 M&A deals 96% + Retention Rate 10-1 Organic CAC to LTV Ratio 5-1 Inorganic CAC to LTV Ratio $200k + Revenue per employee 8-10% net margin and growing 6
Our Story Major Milestones Founded & began trading on the TSX-V Added initial Primary Channel Partner 2012 Steve Levely becomes CEO Added 2nd Channel Partner 10-1 Share consolidation 2014 Acquired OnTab, D1 Mobile & Loyalint Added 3rd Channel Partner 2016 Specialized in Automotive, Petroleum, Hospitality and Retail industries First EBITDA positive year 2018 2017 2013 Rebuilt Ackroo technology Defined commercial model 2015 Acquired PhotoGIFTCARD Acquired Dealer Rewards Integrated to many POS solutions Acquired KESM/LoyalMark 7
Share Structure & Ownership Shares Outstanding 1 76 million Insiders & Management Approx. 50% Options Granted 2 7.2 million Top 15 Shareholders Approx. 70% Warrants 3 10.7million Market Cap 4 C$9 million Options Pool 10 % of i/o 1. As of Jan 22 nd 2019 2. Average weighted options strike price is $0.154 3. Strike is $0.10 for 10,675,364 warrants expiring July 2022 4. As of Jan 22 nd 2019 8
Industry Comparables Market Cap $60M $51M $50M $40M $30M $23M $20M $10M $9M $10M $0M AKR.V MOS.V GET.CN VPY.V Revenue Multiple 2018 Revenue Annualized from Q1-Q3 $5M $5M $4M $4M $3M $3M $2M $2M $1M $0M AKR.V MOS.V GET.CN VPY.V 2018 YTD YoY Growth Rate 14x 12x 10x 8x 6x 4x 2x 0x 12x 13x 2x 3x AKR.V MOS.V GET.CN VPY.V 350% 300% 250% 200% 150% 100% 50% 0% 322% 63% 73% 0% AKR.V MOS.V GET.CN VPY.V AKR = ACKROO MOS = Mobi724 GET = Glance Technologies VPY = Versapay (Data as of Jan 22 nd 2019) Ackroo is the only EBITDA S positive business 9
Market Positioning Industry Ecosystem Ackroo Today Ackroo Future Gift/Loyalty Payment Gift/Loyalty Marketing Gift/Loyalty Marketing Marketing P.O.S. Payment Companies within all 4 areas are partnering, competing and consolidating Ackroo is differentiated today by providing expanded marketing services Ackroo will continue to differentiate in the future by providing additional marketing services and by adding payment services 10
Addressable Market The North American Gift Card & Loyalty market is estimated at $180B Estimated 20% CAGR 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Ackroo s current % penetration of the CDN & US Market 0.0% Automotive Petroleum Hospitality Retail CDN Market US Market SIGNIFICANT ROOM FOR GROWTH 11
How we do it We provide a closed loop in-store and online automated marketing solution Process gift card, loyalty & promotional transactions at the point-of-sale Provide merchants with important administrative and marketing data Allow consumers to access and manage their gift card & loyalty accounts We also provide additional services to help our clients grow Distribution Marketing Email Marketing Gift Card Mall We help merchants sell their gift cards at other retailers We offer email, direct mail and analytics services to maximize results Direct Mail 12
Client Benefits Gift cards increase merchant revenues and cash flow Other Ackroo platform benefits for merchants Loyalty protects margin, attracts customers, creates lift and drives behavior Marketing platforms provide key insights and actionable tools to drive results Removes manual labor, fraud and theft from paper based options Centralizes data and reporting for gift card and loyalty programs Enhances their customers experience Provides a self-serve platform allowing for swift changes to marketing strategy & admin setup Improves brand image and so much more 13
Some of our Clients Large/Enterprise Merchants: Medium Sized Merchants: Small Sized Merchants: ACKROO SUPPORTS OVER 4,000 CLIENTS LOCATIONS AND GROWING 14
Some of our Partners 15
Business Model Monthly Subscription Revenue (MRR) Other Subscription Revenue (MRR) One Time Services Revenue (OTR) Marketing Services Revenue (OTR) Platform access, development & support Payment & specialty services commissions Platform setup, design & custom development Cards + collateral E-mail & direct Mail marketing Company Business Metrics 2018 Description MRR to OTR Ratio 72% 28 % Fixed vs. Variable Revenue Average MRR per location per month $71 Monthly Recurring Revenue Average OTR per location per month $24 Monthly One Time Revenue Average TR per location per month $95 Monthly Total Revenue Average initial up front fees per location $1,301 Setup, Collateral, Custom Dev Approximate LTV (7 year min) $9,281 Initial setup + TR x 84 months Average CAC (Organic) $996 Sales, Marketing and Channel costs RPE $202,273 Revenue Per Employee Retention 96%+ Lost locations % by total locations Closing Ratio 32% Inbound & Channel leads Locations 4,200 + Active customer locations 16
Organic Growth Approach Product Geography Cross Sell Customers Product Partners Specialization Sales Channel Expand Product Expand Services Increase # of POS CDN Expansion US Expansion MS Loyalty Promo E-Gift Gift Product = Self Serve SMB + Payment Services = Marketing (MS) Via new partners + offerings 17
Inorganic Growth Strategy Past Inorganic Growth Photo GIFTCARD Dealer Rewards OnTab D1 Mobile Loyalint KESM LoyalMark Revenue Multiple 2.5x 3x MRR 2 x Total N/A 1x 2.6x MRR 2x Total 1.5x Total Structure 100% stock 80% cash 20% stock Customers Added 29 brands 900 locs Annual Revenues $60k $600k ARR + $300k OTR Consulting Ag 107 locations None 4 brands 200 locs 100% stock 80% cash 20% stock None $100k $180k ARR + $50k OTR 10% cash 90% stock 138 locations 2,400 + locations Integration Time 3 months 24 months 6 months 5 months 8 months 15 months $2M Go forward strategy Acquire 1-2 Per Year Focus on Debt/Earn-outs Add customers, tech + talent 40%+ of rev adds to EBITDA Expand solution & reach 18
Direct Competition Large Merchants SMB Gift Card Loyalty North American Many small and large players with specific niches Ackroo covers all 4 quadrants Ackroo is helping to consolidate this marketplace 19
How we differentiate today FOCUS: Gift card, loyalty & marketing for all merchant sizes PARTNERSHIPS: Deeply integrated selected strategic partners PLATFORM: AFFORDABILITY & TRANSPARENCY: GO TO MARKET: OTHER SERVICES: PUBLIC CURRENCY: Latest technology-ui/ arch, developer friendly, self-serve Priced for all sizes with no hidden costs Specialization, channel approach + market consolidation Distribution and marketing services Access to growth capital & liquidity draws interest for M&A 20
Our Team Senior Management Steve Levely CEO Sales, Marketing and Executive leadership expertise; Pitney Bowes, Maritz, and Ackroo Derek Schaaf CFO Finance & Executive leadership expertise; X, Great Blue Resorts and Ackroo Ihab Kazem VP of Product Product Management & Engineering expertise; Bridgewater Systems and Ackroo Board of Directors Steve Levely Director Sales, Marketing and Executive leadership expertise; Pitney Bowes, Maritz, and Ackroo Sam Cole Director Corporate securities law expertise; ASKD Law and Cassels Brock & Blackwell LLP Wayne O Connell Director Public and Private accounting expertise; Jones & O Connell LLP Kristaps Ronka Director Technology founder, investor and executive; AdParlour and Namesilo Jason Donville Director Capital markets research and investment expertise; Cormark Securities and DKAM 21
Contact Information Ackroo Inc. Steve Levely (416) 360-5619 x730 slevely@ackroo.com OTTAWA OFFICE 62 Steacie Drive, Suite 201 Ottawa, Ontario K2K 2A9 HAMILTON OFFICE 530 North Service Road, Unit #4 Grimsby, Ontario L3M 0C9 Simplify, Consolidate & Improve! 22