2012 Annual General Meeting

Year In Review PresentationOctober 22, 2012

Tony Busseri, Chief Executive Officer

2Company Confidential

3Company Confidential

Forward Looking Statement

This presentation contains statements that are not current or historical factual

statements that may constitute forward-looking statements. These statements

are based on certain factors and assumptions, including, expected financial

performance, business prospects, technological developments, and

development activities and like matters. While Route1 Inc. (“Route1” or the

“Company”) considers these factors and assumptions to be reasonable, based

on information currently available, they may prove to be incorrect. These

statements involve risks and uncertainties, including but not limited to the risk

factors described in reporting documents filed by the Company. Actual results

could differ materially from those projected as a result of these risks and

should not be relied upon as a prediction of future events. The Company

undertakes no obligation to update any forward-looking statement to reflect

events or circumstances after the date on which such statement is made, or to

reflect the occurrence of unanticipated events, except as required by law.

Estimates used in this presentation are from Company sources.

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All Rights Reserved

© Route1 Inc., 2012. All rights reserved. Route1, the Route1 and shield design

Logo, SECURING THE DIGITAL WORLD, Mobi, MobiSecure, Route1 MobiKEY,

Route1 MobiVDI, MobiKEY, MobiKEY IBAD, DEFIMNET, MobiNET, Route1

MobiNET, MobiLINK, TruOFFICE, TruFLASH, TruOFFICE VDI, MobiKEY Fusion,

EnterpriseLIVE, EnterpriseLIVE VO, MobiNET Agent and MobiKEY Classic, are

either registered trademarks or trademarks of Route1 Inc. in the United States

and or Canada. All other trademarks and trade names are the property of their

respective owners. The DEFIMNET and MobiNET platforms and the MobiKEY,

MobiKEY Classic and MobiKEY Fusion devices are protected by U.S. Patents

7,814,216 and 7,739,726, and other patents pending. Route1 Inc. is the

owner of, or licensed user of, all copyright in this presentation, including all

photographs, product descriptions, designs and images. No part of this

presentation may be reproduced, transmitted or otherwise used in whole or in

part or by any means without prior written consent of Route1 Inc.

Company Confidential

5Company Confidential

Company at a Glance

• Route1 is a provider of unique patent-protected cyber security technologies

– Only solution that integrates multi-factor authentication and identity management in a mobile computing environment

• Primarily derives revenue from governmental agencies and commercial clients

– Current clients include the U.S. Navy, U.S. Department of Homeland Security, U.S. Department of the Interior, Canadian Coast Guard, the Government of the Netherlands - Ministry of Foreign Affairs

• Less expensive and more secure solution than competing alternatives

• IP protected technology

• Headquartered in Toronto, Canada

– Founded in 2004– Currently listed on the TSXV: ROI– Based in Toronto, Canada

The last year in review

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Building “the House”

Credibility• US Department of Homeland Security – Solution ATO (Q4 2011)• US Navy - Solution IATO (Q2 2012)• Information and Privacy Commissioner of Ontario – Privacy by Design

Ambassador (Q4 2012)• Business Development - Jim Flyzik (Q4 2011), Daron Dabney (Q3 2012)

and Landmark Ventures (Q3 2012)

Technology Advancement• Released TruOFFICE 3.5 and 4.0 (Q4 2011 and Q3 2012)• Introduced MC2 – support of Mac OS X (Q3 2012)

Strengthened Balance Sheet and Leadership• $4 million Arbitration Award (Q1 2012)• Retired Admiral US Navy Mark Boensel (Q1 2012) and Retired Major-

General Canadian Forces David Fraser (Q4 2012)

Company Confidential

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Quarterly Operating Returns

Company Confidential

As at and for the three month period ended (in thousands of Canadian dollars, except per share data)

J une 30

2012 Mar 31

2012 Dec 31

2011 Sept 30

2011 J une 30

2011 Mar 31

2011 Dec 31

2010 Sept 30

2010

STATEMENT OF OPERATIONS

Revenue

Devices and appliances $60 $1,121 $175 $173 $171 $119 $22 $386

Services 1,828 1,831 1,226 1,226 1,067 1,298 1,755 995

Total revenue 1,888 2,952 1,401 1,399 1,238 1,417 1,777 1,381 Cost of revenue 185 688 233 266 285 210 78 350

Gross margin 1,703 2,264 1,168 1,133 953 1,207 1,699 1,031

Operating expenses

General administration 801 646 2,236 760 749 631 604 633 Research and development

165 300 267 261 18 290 417 521

Selling and marketing 147 230 169 183 156 132 273 184 Total operating expenses

1,113 1,176 2,672 1,204 923 1,053 1,294 1,338

Operating profit (loss) 590 1,088 (1,504) (71) 30 154 405 (307)

EBITDA 634 1,125 (1,464) (37) 70 205 439 (284) Stock-based compensation

(164) (68) (128) (362) (300) (105) (377) (380)

Interest income - 19 585 - - 1 - -

Interest expense - (1) (1) (4) - - - -

Foreign exchange translation 74 (55) (32) 71 6 11 (18) (12)

Severance charges - - - (261) - - - (460) Comprehensive gain (loss) for the period

$500 $983 $(1,081) $(627) $(264) $61 $10 $(1,159)

Income (loss) per share $0.00 $0.00 $(0.00) $(0.00) $0.00 $ 0.00 $(0.00) $(0.00)

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Subscribers

Company Confidential

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Subscriber Pricing

Company Confidential

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Balance Sheet

Company Confidential

Dec 31, Mar 31, J un 30,

in CAD Dollars 2011 A 2012 A 2012 A

Assets

Cash $86,879 $1,484,923 $2,261,304

Accounts receivable 4,378,941 315,155 322,829

Other receivables 32,677 12,696 69,765

Inventory 1,097,744 557,515 787,169

Prepaid expenses 126,945 135,858 289,935

Total current assets 5,723,186 2,506,147 3,731,002

Non-current assets

Capital assets $275,988 $251,558 $275,374

Intangible and software assets 317 7,032 61,052

Total non-current assets 276,305 258,590 336,426

Total assets $5,999,491 $2,764,737 $4,067,428

Shareholders’ deficiency and liabilities

Accounts payable and accrued liabilities $2,328,818 709,787 337,270

KAW termination accrual 153,333 95,834 38,333

Deferred revenue 4,948,123 2,601,112 3,848,304

Total current liabilities 7,430,274 3,406,732 4,223,907

Deferred rent 85,122 120,853 124,018

Deferred revenue 23,181 15,282 22,005

Total non-current liabilities 108,303 136,135 146,023

Total laibilities 7,538,577 3,542,867 4,369,930

Capital

Common shares 24,181,988 23,891,832 23,703,968

Warrants 1,746,027 1,746,027 1,746,027

Contributed surplus 10,755,890 10,824,121 10,987,851

Deficit -38,222,988 -37,240,109 -36,740,347

Total shareholders' deficiency -1,539,083 -778,128 -302,500

Total shareholders' deficiency and liabilities $5,999,494 $2,764,739 $4,067,430

Market overview

13Company Confidential

Cyber Threats: Everybody’s Problem

• The total number of attacks is on the rise, while the number of records exposed per breach declines, indicating a willingness in the cybercriminal to go after “the smaller, easier targets”.

– In 2011, the Identity Theft Resource Center (ITRC) documented 419 breaches, exposing 22,918,441 records. In the first quarter of 2012, there were 93 incidents, exposing 2,140,987 records.

• Approximately 81% of SMBs reported that human "mishandling" was to blame for a breach, compared with 78% of enterprises.

• Among all companies, top three reasons for breaches, as reported by the survey respondents:

– Loss of a laptop or mobile device.

– Third-party mishap - such as when a service provider handling your data accidentally exposes it.

– System glitches.

14Company Confidential

Current Market Challenge

• Evolving technology, network based services, volumes of digital data and ubiquitous connectivity have created a demand for increased mobile access capabilities in both the public and private sectors.

• Increase in teleworkers and prevailing allowance of organizations that encourage employees to “bring your own device” (BYOD).

– Additional remote access connections increase the ability for hackers to penetrate networks.

• Three basic issues need to be addressed:

– Access

– Data Security

– Entitlement Management

• Many remote access solutions exist but require a combination of multiple solutions that create further problems.

15Company Confidential

Current Policies and Thinking are Flawed

• A common, yet FALSE assumption that digital and remote access solutions are inherently secure.

• Users are entitled to have access to company data using personal devices. FALSE

• What we have in place today is sufficient. CIOs and IT leaders become locked into existing and/or large brand name security or remote access solutions without challenging their ability to meet evolving security objectives. FLAWED THINKING

• TO EXPENIVE Effective Solutions for Secure, Remote Access cost tens, even hundreds of thousands of dollars, and are far out of reach for small and medium sized business. UNTRUE

16Company Confidential

The Simple Truth …

• Policies and practices designed to protect data and authenticate against the person must extend to remote access.

• Digital security is about risk management and mitigation, and it should be looked at through the same filter as any other risk management decision in business.

• Two central questions:

– What is the cost to the organization of doing nothing?

– What are the up front and ongoing costs or savings associated with a new investment in a more effective security solution?

• The average total cost per company that reported a breach in 2011 was $5.5 million – Ponemon Institute

• In 2011, negligence accounted for 39% of reported breaches – Ponemon Institute

How Route1 is responding

18Company Confidential

Growth Strategy

1. Aggressively align with strategic partners and leverage their sales/marketing capabilities

– Partner with leading defense and technology players to expand market presence

2. Expand current solutions in connection with evolving market technologies

– Provide support for tablets, additional operating systems and cloud support

3. Target clients who place security first

– Focus on governments, national security related agencies and financial institutions

4. Deliver the best user experience to attract and retain users

– Improve monitoring tools to ensure no platform down time

5. Explore emerging markets to increase customer base

– Focus on governments and financial institutions in South AmericaRoute1’s growth strategy reflects the strengths of its business

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2012-2013 R&D Initiatives

Timing

Operating System Support

Feature Enhance

New Offering

Notes

Q4 2012

Win 8

Android OS • Soft application or MicroSD

Authentication as a Service

– First Offering (AaaS)

• Decoupling of the MobiKEY solution - authentication only offering

• MobiLINK• Engineered solutions• SDK

Audio support

Q1 2013

Policy manageme

nt

• Allow organizations to establish and implement MobiKEY policy management with real-time implementation of changes.

• Features ranging from security settings (encryption settings), default connection settings, password policy, operating systems and versions on remote computer and mobile devices permissible.Company Confidential

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2012-2013 R&D Initiatives

Timing

Operating System Support

Feature Enhance

New Offering

Notes

Q1 2013

iOS • Soft application

Video support

Win 8RT

Android OS• Hardware based, two-factor of

authentication with PIV, CAC and FRAC support

Q2 2013

iOS• Hardware based, two-factor of

authentication with PIV, CAC and FRAC support

Linux

Company Confidential

21Company Confidential

The End Goal

Significant Operating Leverage• Current customers present an extensive market opportunity with over

1,000,000 potential users

• A 5% to 10% penetration rate of existing customers represents potential incremental user additions of approximately 50,000 to 100,000 users

• Operating leverage from incremental users has a substantial impact on pre-tax income

• Depending on the type of Route1 service/product mix, an incremental 15,000 users will yield an estimated $4 to $7 million in additional pre-tax income

Significant operating leverage with high pre-tax margins

22Company Confidential

Investment Highlights

• Extensive market opportunity for secure identity management and authentication

• Highly secure network, processing and data transfer solution keeps critical data secure behind firewalls

• Software-as-a-Service solution creates a highly scalable business model

• Most cost-effective solution on the market

• Unique multi-factor authentication and validation process incorporates government ID cards

• Superior functionality over traditional VPN access

• Bandwidth efficient solution minimizes the volume of data transferred and improves performance

• Valuable intellectual property protects the unique cyber security solutionRoute1’s unique technology and extensive market opportunity present

significant business and financial growth prospects

2012 Annual General Meeting

Year In Review PresentationOctober 22, 2012

Tony Busseri, Chief Executive Officer