investor presentation tsx-v:tkx · enables iiot, big data and digital transformation emerging...
TRANSCRIPT
April 2018
INVESTOR PRESENTATION TSX-V:TKX
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This document is a summary description of TrackX Inc. (“TrackX”, or the “Company”) and its business and does not purport to be complete. Investors are encouraged to obtain independent legal advice concerning any investment in securities of TrackX and should not base their decision on whether to invest in TrackX upon the material provided herein. There are no representations or warranties made herein by TrackX and investors will only be able to rely on the representations and warranties contained in the subscription agreement to be entered into at the time of a sale of securities.This document is not to be distributed to third parties without the prior written consent of TrackX. It is intended that any offering of securities of TrackX will be made in reliance upon the availability of exemptions from the applicable registration and prospectus requirements.This document is not, and under no circumstances is it to be construed as, an advertisement or a public offering of securities. No securities regulatory authority or similar authority has reviewed or in any way passed upon the document or the merits of TrackX’ssecurities.This document has been prepared for informational purposes only. By accepting delivery of this confidential information or any other material in connection with an investment in TrackX, the investor agrees: (1) to keep strictly confidential the contents of this confidential information presentation and such other material and not to disclose such contents to any third party or otherwise use the contents for any purpose other than evaluation by such offeree of an investment in the securities; (2) not to copy all or any portion of this confidential document, other confidential information or any such other material; and (3) to return this confidential presentation and all such other material to TrackX upon request.This information contained herein does not constitute a general offer to the public, or the general solicitation from the public, of offers to subscribe or purchase any of TrackX’s securities in the United States. The distribution of this information and the offer and sale of the securities in certain jurisdictions in the United States may be restricted by law. Persons into whose possession this information comes are required to inform themselves about and to observe any such restrictions. TrackX’s securities have not been and will not be registered under the U.S. Securities Act of 1933 (the “U.S. Securities Act”) or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in the U.S. Securities Act). TrackX will not offer or sell securities within the United States, except to persons reasonably believed to be either (i) Qualified Institutional Buyers pursuant to Rule 144A under the U.S. Securities Act, or (ii) Accredited Investors as defined in Rule 501(a) under the U.S. Securities Act, and in each case incompliance with applicable state securities laws.
FORWARD LOOKING STATEMENTS
This presentation contains certain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from TrackX (“TrackX”, or, the “Company”) expectations and projections. The TSX-V has neither approved nor disapproved the information contained in this presentation. Except for statements of historical fact relating to the Company, certain information contained herein constitutes “forward-looking statements”. Forward-look- ing statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the RFID hardware and software technology based industries including but not limited to, product obsolescence and evolving industry standards, the ability to constantly enhance current product offerings and design and develop new products and services; the defence of of its intellectual property and reliance on copyright and common law trademark protection; the possibility of project cost overruns or unanticipated costs and expenses associated with the implementation of its products and services in a constantly evolving technology and increasing customer sophistication; the availability, price and quality of third party hardware solutions required to implement TrackX’s product offerings; and TrackX'sinability to accurately forecast revenue and to substantiate and execute on its revenue pipeline, due to possible competition, technology change, customer demands and other factors; competition form new or existing companies with substantially greater financial, marketing and other resources; uncertainties relating to the availability and costs of financing needed in the future and other factors. Circumstances or management’s estimates or opinions could change. The reader is cautioned not to place undue reliance on forward-looking statements and must complete their own due diligence on TrackX.
disclaimerTHIS DOCUMENT IS PRIVATE AND NOT FOR PUBLIC DISTRIBUTION
TrackX provides an enterprise SaaS IIoT platform that manages physical assets and drives operational efficiencies
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$5.2 million private bought deal (closed May 10, 2017)
Accretive M&A Activity • Sales Expansion • Working Capital
Use of Proceeds:Partner Network Development • Pipeline Fulfillment •
CAPITAL STRUCTURE
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Volu
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Volume Close
Average $0.52 – ($0.25 and $0.55)Expire May 2018 to May 2019
Average $0.28 – ($0.25-$0.50)May 2021
73,199,841
8,653.089
4,670,000
86,522,930
~20%
$0.53 - $0.23131,000
$0.32
~$23.4M
~$0.9M
~$22.5M
March 1, 2018
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INVESTMENT HIGHLIGHTS
Proven solution with referenceable enterprise accounts
Existing customers continue to expand solution throughout the enterprise
Large pipeline of new enterprise opportunities
Lifetime value of customers represents significant future potential revenue
Strong leadership team with years of industry experience
High margin SaaS revenue continues to grow year-over-year
Attractive SaaS business model should drive operating leverage
Partners offer leverage to scale customer deployments, reduce costs and increased revenue
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Enterprise ScalableEnterprise software platform to manage all assetsacross all locations
Hardware AgnosticSupport for all auto ID technologies simultaneously
Business AnalyticsPredictive analytics drives operational efficiencies, regulatory compliance, and rapid ROI
System IntegrationIntegration with customer ERP and business systems unlocks the value of those investments
Enabling Digital Transformation, Big Data and IoT Initiatives
Mobile Asset Tracking &
Management
Maintenance &Work-in-Process
Management
Distribution Yard Management
Returnable Transport Item &Rental AssetManagement
Why TRACKX?
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WHY ENTERPRISES ARE ADOPTINGKeyDrivers:
Regulatory and compliance mandatesNeed to drive out operational inefficienciesNeed for asset visibility and analyticsHardware costs have decreased; capabilities have increased
Enables IIOT, Big Data and Digital TransformationEmerging sensor technologies provide additional data
TheMarket:Asset Management to grow 15.17% CAGR from US$ 9.43B in 2016 to $25.55B in 2022
Asset Tracking IoT devices is to grow from 22M to 70M by 2022–Mobile Experts Aug. 2, 2017
The IIoT to grow at 7.89% CAGR to US$195.47B by 2022
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ENTERPRISE SaaS IIoT PLATFORM
GAME VALUE PROP:Improves asset utilizationEliminates shrink, loss & theftImproves operational efficiencySupports regulatory complianceSingle platform for all enterprise assets
CUSTOMERS AGREE:C$2 million for U.S. insurance provider asset mgmt.
Carvana – land and expand
Global Powersports leader
Global appliance manufacturer
U.S. baked snack provider
DENSO
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RECENT WINS ACROSS SOLUTIONS & INDUSTRIES
Nationwide US Insurance Company
Planned rollout to 10+ facilities in 2018
Leading household appliance manufacturerYMS rollout to 4 facilities
identified for 2018
Leading online used car retailerPhase 2 expansion for repair and
maintenance handling
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Key Metrics:
•Very low churn rate of customers
•High lifetime value of customers
•Customer retention cost is extremely low
•High margin recurring revenue model
Typical SaaS Implementation: Food Distributor
•$75,000 - $100,000 - hardware- Gross Margin of 25-30%
•$45,000 - $65,000 - implementation services - Gross Margin of 50-70%
•$35,000 - $50,000 - SaaS yearly - Gross Margin of 80-90%
REVENUE MODEL
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North American Coverage,customers are leading Fortune 500 companies from several sectors
• Focus on high margin recurring Software-as-a-Service (SaaS) revenue - direct sales
• large Fortune 500 accounts
• Continue “Land and Expand” strategy
• Expand partner network• off-load set-up and integration, facilitate scale
• M&A activity to accelerate growth andglobal expansion
GO TO MARKET
Mainland US coverage 6,000 customers, 700active
Premiere Federal Government Contract Consulting firm. recognized leader of GSA Schedule Consulting
Global leader acquired by Motorola for $3.5B USD. Leader in mobile computing, RFID products,real-time locatingsystems
Government focused science andtechnology solutions leader with18,000employees.
Leader in barcoding, card, GPS, RFIDand wireless solutions
Global automotive supplier of advanced technology, systems and components for all the world's major carmakers.
Expansion of business at CarvanaFortune 500 insurance company Leading household appliance manufacturerLeading baked goods manufacturerExpansion at leading meat producer
RECENT WINS & OPPORTUNITIES:
FINANCIAL REVIEW
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Year-over-year growth in Revenue, Gross Margin & Recurring Revenue• Revenue growth from both new and
follow-on orders• Recurring SaaS revenue will
continue to grow as new customers are added
• Gross margin on software is 80-90%• New partnerships should lead to
operating leverage
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MANAGEMENT
Tim Harvie - Director, President &CEO 30+ years in supply chain technology formerly Prologis,USF Corp, Fluensee
Dr. Eddie Shek –-Chief Strategy Officer20 Publications, 4 US PatentsDistributed Data Expert, formerly Fluensee
Chris Brumett- COOformerly broTECH,Fluensee25+ years technology & supplychain
Blair Garrou, Director Adrian Fortino, AdvisorMercury Fund,Houston
Darren Devine, DirectorCDM Capital,Vancouver
Art Mesher, AdvisorDescartes Systems, supply chain & SaaSpioneer
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Kevin Shea, DirectorPrivate Investor
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• Executing on Core Strategies – Land & Expand, key market penetration
• Pipeline Growth - More enterprise accounts, shorter close times, more educated buyer
• Build-out partnerships – SharpMinds, Barcoding, DENSO
• Platform Enhancement – new features, technologies & processes driven by customers
• Mergers & Acquisitions - looking for accretive acquisitions
• Strengthen Team – continue additons to Sales, Marketing, Engineering, Delivery Services
TrackX GAME platform setting the industry standard
SUMMARY
Corporate Headquarters
7800 East Union Avenue, Suite 430Denver, CO80237
303. 325.7300Tel303. 799.0703Fax
[email protected] www.trackx.com
DevelopmentOffice
4210 Riverwalk PkwySuite 250Riverside, CA 92505
Investor Relations
800 Pender St., Suite 1430 Vancouver, BC V6C 2V6
Contact:
Sean Peasgood, Sophic Capital [email protected]
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March 2018
APPENDIX – CASE STUDIES
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BENEFITS:Full real-time visibility
Automobiles tagged with RFID
OnlineUsedCarRetailer
Phase I completed in 40locations: Vehicle location & Inventory CDN$2.6 million enterprise contract
Phase II initiated: 'Work-in-process" Detailed analytics & workflows through inspection, repair, &maintenance
Reader/antenna arraytracking scheduled processes
Increased process efficiency | Significant labor reduction | Reduced downtimeEmployee accountability | Customer satisfaction
AUTOMOTIVE TRACKING
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BENEFITS: Audit Compliance
Enterprise IT Assets tagged with RFID
Visibility to Enterprise ITAssets:CDN$2M Enterprise Contract 2 Primary Data Centers14 Branch Locations
Audit & Regulatory Compliance: Location, Ownership & Inventory Over 75% reduction in labor costs
16 location deployment underway
Regulatory Compliance | Significant labor reduction | Real-time Perpetual InventoryEmployee accountability | Reduced Capital Expenditures
HIGH VALUE ASSETS
Nationwide Insurance Company
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BENEFITS:Automated Gate Process | Significant labor reduction | Real-time Perpetual Inventory
Delivery Optimization | Map Based Planning
Complete Visibility in the Yard, Dock, & In-Transit
Full Supply Chain Optimization:Yard, Dock, Gate, Shipping & Delivery
First of 10 total locations: Enterprise-wide deployment Optimizes supply chain functions Integration with:• Warehouse Management System• Production Planning System
In Cab Android BasedApplication for driver check inGPS & RFID on every shunt
SUPPLY CHAIN
Packaging Solutions Company
BENEFITS:
Real-time inventory solution for all depots
Returnable Asset Optimization:End to end solution:•From grower's field to retailoutlet 800,000+ total assetsActive RFID used on tagged racks
Enterprise deployment:52 Depots41,000 nursery & retail locations
Active RFID tags on over 800,000 racks
Increased Revenue | 80% Reduction in A/R | Maximized Rack Usage and IncomeImproved Customer Satisfaction | Reduced Labor Cost
Readers in field & at the depots
Horticultural Rack Distributor
RETURNABLES & RENTAL
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Ontario•Securities legislation in the Province of Ontario provides that certain purchasers resident in Ontario purchasing securities pursuant to an offering memorandum (as such term is defined in the Securities Act (Ontario)) shall have, in addition to any other rights the purchaser may have at law, a statutory right of action for damages or rescission against the issuer and any selling security holder if the offering memorandum, or any amendment thereto, contains a “misrepresentation” (as defined in the Securities Act (Ontario)). A “misrepresentation” is defined in the Securities Act (Ontario) as an untrue statement of material fact or an omission to state a material fact that is required to be stated or that is necessary to make astatement not misleading in light of the circumstances in which it is made. A “material fact”, when used in relation to securities issued or proposed to be issued, is defined in the Securities Act (Ontario) as a fact that would reasonably be expected to have a significant effect on the market price or value of such securities.•The right of action that is provided to a purchaser resident in the Province of Ontario is summarized below. Purchasers should refer to the applicable provisions of the Ontario securities legislation for particulars of these rights or consult with a lawyer.•If an offering memorandum, together with any amendment thereto, contains a misrepresentation, then any purchaser resident in Ontario to whom the offering memorandum has been delivered and who purchases the securities offered thereby during the period of distribution shall have, without regard to whether the purchaser relied on the misrepresentation, a statutory right of action for damages or, alternatively, while still the owner of the securities, for rescission against the issuer and any selling security holder, provided that, among other things:•if such purchaser elects to exercise its right of rescission, it shall cease to have a right of action for damages against the issuer and any selling security holder;•the issuer and any selling security holder will not be liable if they prove that the purchaser purchased the securities with knowledge of the misrepresentation;•the issuer and any selling security holder will not be liable for all or any portion of damages that they prove do not represent the depreciation in value of the securities as a result of the misrepresentation relied on; and•in no case will the amount recoverable exceed the price at which the securities were offered.• The right of action for rescission or damages is in addition to and without derogation from any other right or remedy such purchaser may have at law.• The Securities Act (Ontario) provides that no action shall be commenced to enforce these statutory rights more than:•in an action for rescission, 180 days from the date of the transaction that gave rise to the cause of action; or•in an action other than for rescission, the earlier of: (1) 180 days after the purchaser first had knowledge of the facts giving rise to the cause of action; or (2) three years after the date of the transaction that gave rise to the cause of action.•The rights referred to above do not apply in respect of an offering memorandum delivered to a purchaser in connection with a distribution made in reliance on the “accredited investor” exemption in section 2.3 of National Instrument 45-106 (“NI 45-106”) if the purchaser is:•a Canadian financial institution or a Schedule Ill bank (each as defined in NI 45-106);•the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); or•a subsidiary of any person referred to above if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary.Alberta, British Columbia, Manitoba, and Québec•Notwithstanding that the Securities Act (British Columbia), the Securities Act (Québec) and, in certain circumstances, the Securities Act (Alberta), do not provide, or require the issuer to provide, to purchasers resident in these jurisdictions any rights of action in circumstances where an offering memorandum, or any amendment thereto, contains a misrepresentation, the issuer hereby grants to such purchasers contractual rights of action that are equivalent to the statutory rights of action set forth above with respect to purchasers resident in Ontario.•In Manitoba, the Securities Act (Manitoba) provides a statutory right of action for damages or rescission to purchasers resident in Manitoba, in circumstances where an offering memorandum, or any amendment thereto, contains a misrepre- sentation, which rights are similar, but not identical to, the rights available to Ontariopurchasers.
statutory rights