bluerush inc. ful… · >60 seconds of video +70% objective improve conversion performance of...

CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V

TSX-V: BTV

February 2019

BlueRush Inc. Investor Presentation

CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 2

This presentation (the “Presentation”) about BlueRush Inc. (“BlueRush”) is dated as of February 2019. It isinformation in a summary form and does not purport to be complete. It is not intended to be relied upon as adviceto investors or potential investors and does not take into account the investment objectives, financial situation orneeds of any particular investor.

No representation or warranty, express or implied, is made or given by or on behalf of BlueRush or any of itsaffiliates, directors, officers or employees as to the accuracy, completeness or fairness of the information oropinions contained in this Presentation and no responsibility or liability is accepted by any person for suchinformation or opinions. BlueRush does not undertake or agree to update this Presentation or to correct anyinaccuracies in, or omissions from, this Presentation that may become apparent. No person has been authorized togive any information or make any representations other than those contained in this Presentation and, if givenand/or made, such information or representations must not be relied upon as having been so authorized. Thecontents of this Presentation are not to be construed as legal, financial or tax advice.

Certain statements contained in this press release constitute "forward-looking information" as such term is definedin applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek","intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to BlueRush, areintended to identify forward-looking information. All statements other than statements of historical fact may beforward-looking information. Such statements reflect BlueRush's current views and intentions with respect to futureevents, and current information available to BlueRush, and are subject to certain risks, uncertainties andassumptions. Many factors could cause the actual results, performance or achievements that may be expressed orimplied by such forward-looking information to vary from those described herein should one or more of these risksor uncertainties materialize. Examples of such risk factors include, without limitation: changes in law, large increasein competitors, litigation, the ability to implement business strategies and pursue business opportunities, state ofthe capital markets, future capital requirements, the availability of funds and resources to pursue operations, newtechnologies, the ability to protect intellectual property rights, the ability to obtain patent protection for products,third-party intellectual property infringement claims, regulatory changes affecting products, failing research anddevelopment activities, the ability to reach and sustain profitability, dependence on business and technical experts,the ability to effectively manage business operations and growth, issuance of debt, dilution of existing securities,volatility of publicly traded securities, potential conflicts of interest, unlikelihood of dividend payments, thepotential costs stemming from defending third-party intellectual property infringement claims, the ability to securerelationships with suppliers and customers, dependence on key management and employees, as well as generaleconomic, market and business conditions, as well as those risk factors discussed or referred to in BlueRush’sdocuments filed with the securities regulatory authorities in certain provinces of Canada and available atwww.sedar.com.

Should any factor affect BlueRush in an unexpected manner, or should assumptions underlying the forward-lookinginformation prove incorrect, the actual results or events may differ materially from the results or events predicted.Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover,BlueRush does not assume responsibility for the accuracy or completeness of such forward-looking information. Theforward-looking information included in this press release is made as of the date of this press release and BlueRushundertakes no obligation to publicly update or revise any forward- looking information, other than as required byapplicable law.

By your acceptance of this presentation you and any person reviewing this Presentation agrees not to distribute,copy; reproduce; transmit; make available; or condone any of the foregoing, without the prior written consent ofBlueRush. Any unauthorized use of this Presentation is strictly prohibited.

This Presentation does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any saleof the securities of BlueRush in any jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of such jurisdiction. The securities of BlueRush have not beenand will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), orany state securities laws and may not be offered or sold within the United States, unless an exemption from suchregistration is available, information concerning the assets and operations of BlueRush included in this Presentationhas been prepared in accordance with Canadian standards and is not comparable in all respects to similarinformation for United States companies.

Recipients of this Presentation who are considering acquiring securities of BlueRush are referred to the entire bodyof publicly disclosed information regarding BlueRush. The information is subject to material updating, revision andfurther amendment, and is qualified entirely by reference to BlueRush’s publicly disclosed information.

Disclaimer


Information Overload• People are inundated, attention

spans are limited • 6 second ads are not the answer• The problem is not going away

Personalized VideoWith interactive and personalized video we are able to achieve superior and quantifiable levels of engagement, which drives meaningful business results.

The Problem The Solution

The Problem BlueRush Solves:Customer Engagement

Attention Spans• The average attention span in the year:

• 2000 – 12 seconds• 2015 – 8.25 seconds

• The average attention span of a goldfish is 9 seconds!

Recent BlueRush Case StudyAs part of a pension fund personalized video project, the average viewer was engaged for 75 seconds.


Of viewers clicked CTA

+30%Lift in

conversions

+40%

Mortgage Affordability IndiVideo for

one of Canada’s “Big Six” Banks

IndiVideo Case Studies

4

ObjectiveEngage and educate AFP Habitat’s 2,000,000+ clients to increase pension account openings and contributions

Of visitors watched >60 seconds of video

+70%

ObjectiveImprove conversion performance of client’s mortgage affordability calculator

Satisfaction rating

+90%

AFP Habitat Pension Statement IndiVideo

These successful customer results led to record business activity in Q1 2019 in terms of SaaS revenue, deferred revenue and total billings

Watched entire IndiVideo

+70%Increase in

account openings and contributions

+250%

WATCH THE VIDEO

http://bluedemo.bluerush.ca/individeo/explainer.html

http://kunder.bluerush.ca/kun001/kun001_individeo_b03_en.html


B2C Video Marketing Opportunity

• Video is 69% of all Internet traffic, and is projected to grow to 80% by 2021 (Cisco 2017)

• In 2018, 2.4 billion people consumed video content, of which 78% was viewed on mobile (eMarketer 2018)

• 95% of consumers watch video to understand products/services (HubSpot 2018)

• 96% of marketers plan to maintain or increase investment in personalization in 2019 (Evergage 2018)

5


US $22Video advertising market by 2021

Video Marketing Landscape

BILLION

IndiVideo’s Current Addressable Financial Institution Market (for Tier 1, 2, and 3 financial institutions in North America with AUM of at least US$2 billion):

~US $450Total

~US $4510% Market Share

MILLION in ARR MILLION in ARR

6


• Public since 2004, the Company’s history is primarily providing one-time digital media services

• Commenced transition to SaaS model in late 2017 with appointment of CEO Steve Taylor

• Revitalized: new SaaS strategy

• Recapitalized: fresh capital

• Restructured: new leadership team

• Fiscal 2018 revenue: $3.0 million

Founded in 2003, based in Toronto

Growth-stage venture capital firm investing in Canadian information technology companies including:

• Lavalife, Skywave, FloNetwork, Softimage, Fortiva

• Hubdoc: exit to Xero for ~$100M (July 2018)

Round13 provides guidance for:

• Strategic planning

• Sales & marketing

Own ~38% of BlueRush Inc. after initial investment and exercise of warrants (2018)

Lead Investor


Management

Steve Taylor / CEO, Director; 2017

Strong track record leading emerging, high-growth companies:

• SaaS-based compliance: 2002-2015 (Exit to Klass Capital)

• Mobile: 2005-2012 (Split company in two, resulting in sale of both)

• E-commerce: 1995-2001 (IPO)

Larry Lubin /President, Co-Founder, Chair; 2003

Richard Pineault /VP Tech; 2008

Dave Badun, CPA, CA /CFO; 2018

Jeff Bilyea /COO; 2018

Ted Mercer /VP Sales; 2018

Len Smofsky /EVP, Co-Founder; 2003

8


Verticals

• Financial institutions

• Insurance

• Telecommunications

• Utilities

• E-commerce

• Healthcare

• Cannabis

Applications

• Billing & statements

• Customer care

• Customer engagement

• AdTech

• Proxies

Creates a memorable customer experience, simplifying complex products and ensuring immediate relevancy.

The platform’s data-driven video content seamlessly fits into existing marketing infrastructure to accelerate the buyer journey. IndiVideo cost-effectively scales with no compromise to data security.

Content engagement platform that aligns sales, marketing, and compliance. The platform facilitates the centralization, personalization, distribution and associated tracking of customer-centric content.

DigitalReach empowers personalized client communications, ensuring a seamless digital experience and emotional brand connection.


What is IndiVideo?

WATCH VIDEO

What is DigitalReach?

WATCH VIDEO

9

Our Products






http://bluedemo.bluerush.ca/blue019/video_page.html







Focus on increasing predictable recurring revenue through

higher direct & partner sales and document composition

opportunities in 2019.

Business Growth

CEO identified prime products with SaaS ability, thus altering the business

from one-time services revenue to recurring revenue model.

Transformation to SaaS

2017

Re-positioning for Growth

Sourced quality leads moving pipeline from $1M (Oct’17) to $5M (today)

including 75 IndiVideo deals.Greenfield: 70/75 non-competitive.

Growing Sales Pipeline

Power BI Integrated for data capture & reporting Work on IndiVideo 'as a platform’

begins Integration with DigitalReachAI strategy developed

Product Development

BlueRush continues to strengthen its executive team (CFO, COO) while

acquiring A-level talent within sales & development.

Strengthened Team


(S. America) (UK & Europe)

Blue Chip Customers Strategic Partners

CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 121 Fiscal years ended July 31

$ Millions except percentages and per share amounts Fiscal 2018 Fiscal 2017

Revenues

Subscriptions & Support $1.0 $1.0

Services $2.0 $2.2

Total Revenue $3.0 $3.3

Cost of Sales


Services $1.1 $1.3

Total Cost of Sales $1.5 $1.9

Gross Profit $1.5 $1.4

SaaS Gross Margin 61% 44%

Services Gross Margin 44% 42%

Net Loss ($3.3) ($1.6)

Per Share (basic & diluted) ($0.06) ($0.05)

Fiscal 2018 Performance Reflects Repositioning

BlueRush’s transition to SaaS model drove strong financial performance in fiscal 2018

$0.45M

$0.63M

Fiscal 2017 Fiscal 2018

SaaS Gross Margin1

($)

44%

61%

Fiscal 2017 Fiscal 2018

SaaS Gross Margin1

(% of SaaS Revenue)

Gross margin growth in SaaS business attributable to:

Optimized Company structure by moving to the Microsoft Azure cloud platform.

Successful R&D investments in IndiVideo and DigitalReach.

CEO: [email protected] @BlueRushdm Bluerush.com SYMBOL: BTV TSX-V: BTV-V 131 Quarters ended October 31

$0.14M

$0.18M

Q1 2018 Q1 2019

SaaS Gross Margin1

($)

61%67%

Q1 2018 Q1 2019

SaaS Gross Margin1

(% of SaaS Revenue)

$ Millions except percentages and per share amounts Q1 2019 Q1 2018

Revenues


Services $0.6 $0.5

Total Revenue $0.9 $0.7

Cost of Sales


Services $0.4 $0.2

Total Cost of Sales $0.4 $0.3

Gross Profit $0.43 $0.42

SaaS Gross Margin 67% 61%

Services Gross Margin 41% 59%

Net Loss ($0.9) ($0.3)

Per Share (basic & diluted) ($0.01) ($0.01)

Continued SaaS Growth in Q1 2019

26%

Services revenue grew

17%

SaaS revenue increased

Further SaaS and Services revenues due to increased sales activity while margin growth continued as a result of product enhancements and shift to Microsoft Azure platform.

$2 million

Strengthened liquidity with

non-brokered private placement of convertible debentures.

Record business activity in the quarter


Investment Summary

• CEO Steve Taylor, lead investor Round13 Capital both have track records of value creation

Strong Management and Lead Investor

2

• Clients include leading banks, insurance and asset management firms

• Partners drive global footprint and accelerate technical roadmap

Blue Chip Customers and Strategic Partners

4

• Highly scalable, personalized and customized SaaS solution

• Disruptive delivery and pricing model

• Superior gross margins

IndiVideo is a Superior Product

3

• Video is the fastest-growing online medium

• Epidemic engagement problem

Large and Growing Market Opportunity

1


Appendix


Paul SmithCurrently the Chief Executive Officer and Director of Frontline Broadband Inc., a private telecommunications and information technology service provider in Canada. Paul was Chair of VIA Rail Canada Inc.’s board of directors from 2010 to 2014 after having joined the board in September 2006. Prior to that, Paul was President & Chief Executive Officer of Equity Financial Holdings Inc., a TSX listed issuer, and a Canadian financial services firm he co-founded whose principal subsidiary is an OSFI-regulated deposit-taking institution. Paul is a director of several companies and, before joining the private sector, served as Executive Assistant to the Prime Minister of Canada.

Larry Lubin, ChairAs original founder, Chairman and CEO of Fitech, now part of CGI, Larry began innovating in sales, software development, and financial services early on. Many leading applications for financial institutions including the Reality Check™ series for Scotiabank were developed by Larry and his Fitech team. In September of 2003, he co-founded BlueRush. His vision of an optimized and fully integrated sales and customer experience that leverages the power of technology is at the heart of all BlueRush products.

Steve TaylorMore than 25 years' experience driving profitable growth in the Enterprise SaaS, eCommerce and Digital Media industries. Steve is the former CEO and founder of Resolver Inc., a SaaS-based governance, risk and compliance company that was successfully sold to Klass Capital in 2015. Steve joined as Director of BlueRush in 2017 and successfully closed a non-brokered private placement with Round13 Capital. Shortly thereafter he was appointed CEO of the Company.

John EckertJohn is a co-founder of the Canadian venture capital firm Round13 Capital and is a co-founder and former managing partner of McLean Watson Capital. Round13 manages $200 million in funds focused on growth-stage technology opportunities. John has been a professional venture capitalist for over 25 years and has invested in over 40 technology companies. He has backed many of Canada's most successful technology companies including Softimage, FloNetwork, Fortiva, Lavalife, i4i, Skywave and Hubdoc.

Mike BeckermanMost recently Mike was CEO of North American marketing agencies Ariad Communications and Bluespire Marketing. Ariad is an agency specializing in branding and online communications. Prior to this, Mike was the Chief Marketing Officer for Bank of Montreal. He led the development of new brand identities for both its Canadian and U.S. operations which involved more than 1,000 retail locations and over 30,000 employees. Prior to Bank of Montreal, Mike was the Vice President, Marketing for Canadian Airlines after having served over a decade with Nike in various roles and countries around the world.

Board of Directors


Company Name Headquarters Investors Investment Raised

New YorkComcast Ventures, Viola Growth, Norwest Ventures

US$74M

New York Marker ~US$10M

KitchenerBattery Ventures, Bessemer Venture, OMERS Ventures

US$61M

Toronto Round13 CAD$2.6M

Competitors


Share Price (Moving 50 Day Average)

$ 0.11Options

11,255,000

Warrants

6,550,018

S/O Basic

75,251,848

52 Week Range

$0.075 - $0.20

Fully Diluted Figure

112,104,485

Stock Data

As at January 14, 2019

Market Cap$7.9M

Convertible Debenture

19,047,619** Assumes conversion at $0.105. The company has ability to invite debenture holders to convert at $0.105 if after October 31, 2019 the shares have been trading for 20 consecutive days at $0.25 or greater. Should the holder wish not to convert at that time, the conversion changes to $0.15.


Less IT engagement required

Lower implementation costs

Monthly fees spread over life of contract

Ability to flex between operating versus capital expenditure budgets

Predictable, stackable revenues

Superior operating model (support, upgrades…)

Robust gross margins that improve over time

Stronger trading multiple relative to services

Conceptual IndiVideo Example of SaaS Margin Potential

SaaS is a superior operating model

Customer Benefits Benefits for SaaS Provider

Win SaaS deal US $60,000annually

Initial product development cost: US $20,000

Minimal return in first 3-4 months

~60%-70% gross margin in first 12 months

~80%-95% gross margin beginning in year 2


Key IndiVideo Elements

ScalabilityAbility to produce one or millions of videos

High gross margins: minimal COGS increase

Pricing: flat monthly fee

Hybrid Creative StrategyBuilds video content or incorporates from outside agencies

Data CaptureLoop back to support company objectives and customer insights

Traction With Existing/New Client Base + Partners

CustomersTop-tier customer base in multiple verticals across Canada, USA, South America & Europe

PartnersExcellent distribution partners in financial, bill statement, insurance, software and other industries across Canada, UK and South America

Competitive Strengths

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