Transforming Media to a Multiscreen World - Frankly...

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Transforming Media to a Multiscreen World January 2017 Investor Presentation TSX-V: TLK

Transcript of Transforming Media to a Multiscreen World - Frankly...

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Transforming Media to a Multiscreen World

January 2017

Investor Presentation TSX-V: TLK

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This presentation includes forward-looking statements regarding Frankly and their respective businesses.

Forward-looking events and circumstances discussed in this release, may not occur by certain specified dates

or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting

the parties. No forward-looking statement can be guaranteed. Except as required by applicable securities

laws, forward-looking statements speak only as of the date on which they are made and Frankly undertakes

no obligation to publicly update or revise any forward-looking statement, whether as a result of new

information, future events, or otherwise.

All $ = U.S. dollars

Safe Harbor Statement

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COMPANY OVERVIEW

Frankly Key Stats ($ in USD)

Stock Price (12/14/16) $0.32

52 Week Low-High $0.29-$0.68

Avg. Vol. (3 mo.) 59,966

Shares Outstanding 34.7M

Free Float (est.) 12.8M

Insider Holdings

(est. as of 12/14/16)62.2%

Market Cap (12/14/16) $11.2M

Total Debt $11.7M

Enterprise Value (est.) $20.1M

Founded (Frankly Co.) 2012

Full-time Employees 90+

Data source: TSX Info Suite,TSX Venture Info, Yahoo Finance!, Capital IQ

All figures are converted into U.S. Dollars at a conversation rate of

1.00USD/1.33CAD as of December 14, 2016

1) Q4-15 normalized revenue of $4.8 million excludes one-time, non-recurring

revenue of $660,000 related to contract termination fees and other revenue.

Total Revenue (TTM)1 $21.4M

Gross Profit (TTM) $10.4M

Adjusted EBITDA (TTM) $(0.7M)

EV / Revenue (TTM) 0.9x

Cash and Investments (mrq) $2.8M

Total Assets (mrq) $32.6M

Revenue ($M)1

Adjusted EBITDA ($M)

-$1.0

$0.0 -$0.1 $0.4

Q4-15 Q1-16 Q2-16 Q3-16

$4.8$5.2 $5.2

$6.2

Q4-15 Q1-16 Q2-16 Q3-16

3

Chart above is denoted in CAD.

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Leading Industry Experts MANAGEMENT TEAM

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Steve ChungFounder & CEO

Lou SchwartzCOO & CFO

Omar KarimGlobal Head of Technology

Todd RandakGlobal Head of Products

Melissa HatterHead of Client Services

• Former CSO of CDNetworks

(sold to KDDI), Investment

Director of BlueRun Ventures

(Nokia), Analyst at Goldman

Sachs

• Harvard (BA), Stanford (MBA)

• Founder of pioneering OTT

solutions company serving

Fortune 1000 companies, and ex-

Chief Digital Officer of WWE

• Mississippi College School of Law

• Tech pioneer in CMS and online

video, Adjunct Professor at The

New School, Co-Founder/CEO of

Mobdub, ex-CTO of Worldnow

• Hampshire College (BA)

• Former EVP at Worldnow, Co-

Founder of Mobdub, and VP

eCommerce Strategy at Exceed

• Southern Connecticut State

University (MS)

• Former EVP at Worldnow, and

former Affiliates Manager at UGO

Networks and NBC Television

• Ithaca College (BS)

Bill AmmermanHead of Advertising

Jason SimpsonHead of Sales

Michael BachmanGlobal Head of Design

John WilkGeneral Counsel

• Ex-General Sales Manager at

Capitol/WRAL, and ex-Head of

Programmatic Revenue at Tribune

• UNC Chapel Hill (MA)

• Formerly with Adobe, Piksel,

Accenture

• University of Michigan (BA)

• Founder of high-end interactive

agency, creator of top weather

mobile app and #1 ranked mobile

apps in Weather/Entertainment

with 7M+ downloads

• Former Special Counsel at Phillips

Nizer LLP, and former General

Counsel at Worldnow

• Rutgers School of Law

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• #1 wireless carrier in Korea and top global innovator

• Respected as top telco for leading technology

Invested over US$14M

(27% shareholder)

• Top broadcaster owns 60+ TV stations in the US

• Leading industry thought leader in media & technology27% shareholder

World Class Backers

• Frankly incubated in the Stanford StartX program

• StartX: Stanford’s accelerator fund for its top alumniInvested US$1.3M

STRATEGIC INVESTORS

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The Opportunity

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THE BIG DISRUPTION

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1) Source: Devoncroft 2016

2) Source: KPCB 2016

SINGLE SCREEN, SINGLE PLATFORM MULTISCREEN, MULTI-PLATFORM

PAST FUTURE

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THE BIG DISRUPTION

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1) Source: Devoncroft 2016

2) Source: KPCB 2016

$50 BILLION MARKET SHIFTING TO NEW AREAS

¹ Source: Devoncroft 2016 Report

1. IABM DC Global Market Valuation Report, 2015

Decline in Traditional

Broadcasting¹

Total Market: $49.3B

(down 4.3% vs. 2014)

Services:

$27.3B (down 4.2%

vs. 2014)

Products:

$22.0B (down 4.4%

vs. 2014)

Increase in

Digital

Nascent market

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THE BIG DISRUPTION

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1) Source: Devoncroft 2016

2) Source: KPCB 2016

MASSIVE DISRUPTION WITH NEW PLAYERS

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Company Overview

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COMPANY OVERVIEW

What We Do

Frankly’s disruptive technology enables broadcasters

and media companies to transform their business to a

new, digital, multiscreen world, all from one integrated

system

Our multimedia CMS is used to publish and monetize

digital content on all platforms including desktop,

mobile, social networks and connected TVs

We have 200+ media properties and growing, including

local TV affiliates of ABC, NBC, CBS, and FOX

Recurring SaaS revenues in long-term contracts;

revenue share for advertising and growing fast

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Our SolutionsONE-STOP DIGITAL PLATFORM

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Multi-media Ingestion ONE PLATFORM Multi-point Publishing

mCMSMobile & TV

AppsVideo Data Ads

o Multi-media CMS

including website

management, video

management, and

publishing under one

dashboard

o Branded mobile

apps for broadcast

TV stations

o Connected TV apps

including Apple TV,

Roku, Fire TV, etc.

o OTT multiscreen

technology for digital

video

o Live and VOD

solutions

o Data analytics and

local media audience

insight

o Content syndication,

pooling and cross-

promotion

o National-local

desktop & mobile ad

solution (premium &

programmatic)

o In-app purchase and

content monetization

SaaS (Recurring Platform Fees) Managed Services (Recurring Revenue Share)

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MARKET POSITIONING + FINANCIALS

Competitive Landscape

Video Multimedia

Multi-screen

One Screen

Media/Content Platform

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FINANCIALS & GROWTH

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FINANCIAL SUMMARY

REVENUE & PROFITABILITY(All amounts in $USD)

Annualized revenue based on Q3 2016 is

approximately $24.8M

Normalized quarterly adjusted EBITDA

improved to $380K

Optimized cost structure leading to a further

improvement in net loss

Financial Highlights

$1.5

*$4.8$5.2 $5.2

$6.2

($3.0)

($1.0)$0.0 ($0.1)

$0.4

Q3-15 Q4-15(*Normalized

Revenue)

Q1-16 Q2-16 Q3-16

$M

Revenue

Adj. EBITDA

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GROWTH OPPORTUNITIES

Growth Catalysts – Organic and Inorganic

Mobile Apps & Connected TV (Apple TV, Roku, Fire TV)

Big Data and Targeted Advertising

Large Media Customers Pipeline (Local Media, TV, Hollywood)

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1%0.04%

Share

=$20M =$500M

Our 5-Year Goal is to capture 1% of the global $50B annual market for broadcast products &

services; today we are only at 0.04%.

1/3 = US Broadcasters

1/3 = Media/Content Prg.

1/3 = Int’l Expansion

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ADVERTISING & MOBILE MARKET

Growth Strategy

17Source: KPCB Mary Meeker I Internet report 2016

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STRATEGY ROADMAP

Growth Catalysts Next 3 Years

Targeted Data & Ad Platform

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2016

Focus on TV /

Broadcast market

2017

Expansion into

Other Verticals

2018

International &

Product Expansion

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SUMMARY

INVESTMENT HIGHLIGHTS

Land grab opportunity: Massive transformation from $50B traditional broadcast market to multi-

screen content distribution happening now, with high M&A activity

Sticky, recurring revenues: Content management and media workflow sticky with high switching

costs for customers; recurring revenues in 3-5 year long-term contracts

Solid team and foundation: Over 200+ TV stations as foundation with top management team and

strategic investors to execute on fast growth, long-term strategy

Data & advertising disruption: Digital distribution combines content and ad monetisation by

leveraging user and platform data for massive disruption

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CONTACT US

Company Contact:

Lou Schwartz

Chief Financial Officer

[email protected]

Investor Relations:

Matt Glover or Najim Mostamand

Liolios Group, Inc.

(949) 574-3860

[email protected]

Frankly Inc.

333 Bryant Street, Suite 240

San Francisco, CA 94107

www.franklyinc.com

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APPENDIX

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Leading Industry Experts BOARD OF DIRECTORS

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Steve Chung

Chairman

Tom Rogers

Director

Steve Zenz

Director

Samuel Hyun

Director

Joe Fiveash

Director

• CSO of CDNetworks (sold

to KDDI), Investment

Director of BlueRun

Ventures (Nokia), Analyst

at Goldman Sachs

• Harvard (BA), Stanford

(MBA)

• Executive Chairman at

WinView Games

• Chairman and CEO of

TRget Media

• Former President and CEO

of TiVo, Inc.

• Former President of NBC

Cable and EVP of NBC,

and founder of CNBC

• Board member for RedBrick

Health, Insignia Systems,

Closys, YOXO and

Children's Home Society

(non-profit).

• Former Partner-in-charge of

Audit at KPMG

• Global Planning Team, SK

Planet Co., Ltd.

• Corporate VP, Digital

Media, Strategy and

Business Development at

Raycom

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APPENDIX

Cap Table

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December 2016 Summary Cap Table

ShareholderCommon Stock

Held

% of Total

Common Stock

Outstanding

Restricted

Voting

% of Total

Common Stock &

Restricted

Employee

OptionsWarrants

Employee

RSUsFully Diluted %

Raycom Media Inc. 9,304,532 27.0% - 27.0% - 14,809,720 - 42.0%

SKP America, LLC 9,269,917 26.9% - 26.9% - - - 16.1%

Gannway Entertainment, Inc. 1,510,536 4.4% 1,510,536 8.8% - - - 5.3%

Stanford-StartX Fund, LLC 528,451 1.5% - 1.5% - - - 0.9%

Others 13,910,163 40.3% 149,908 40.7% - 793,811 - 25.9%

Options & RSU Issued - - - - 142,628 - 1,304,433 2.5%

Options & RSU Available - - - - 4,177,954 - - 7.3%

Sum 34,523,599 100% 1,660,444 100% 4,320,582 15,603,531 1,304,433 -

Total Issued & Outstanding - - - 36,184,043 - - - -

Fully Diluted Share Base - - - - - - 57,412,589 100.0%