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Corporate Update PresentationSeptember 2018
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DISCLAIMERDISCLAIMERS This presentation has been prepared solely for its use at informational meetings relating to Quisitive Technology Solutions, Inc. ("Quisitive” or the “Company”) and is being provided for information purposes only to a limited number of persons. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation and the material contained herein are confidential. This presentation is for information purposes only and may not be reproduced or distributed to any other person or published, in whole or in part. The information contained in this presentation is (a) is provided as at the date hereof and is subject to change without notice, (b) does not purport to contain all the information that may be necessary or desirable to fully and accurately evaluate an investment in the Company, and (c) is not to be considered as a recommendation by the Company that any person make an investment in the Company. An investment in the securities described herein is speculative and involves a number of risks that should be considered by a prospective investor. No securities commission or similar authority in Canada or any other jurisdiction has in any way passed upon the adequacy or accuracy of the information contained in this presentation. No sales of the securities of the Company shall be made until the Company and the potential investor enters into a subscription agreement for such securities. Prospective investors should carefully consider the risk factors described under the heading in this presentation titled “Risk Factors” before investing in the Company and purchasing the securities described herein. By accepting and reviewing this presentation, you acknowledge and agree (i) to maintain the confidentiality of this presentation and the information contained herein, (ii) to protect such information in the same manner you protect your own confidential information, which shall be at least a reasonable standard of care, and (iii) to not utilize any of the information contained herein except to assist with your evaluation of a potential investment in the Company.
THIRD PARTY INFORMATION This presentation includes market and industry data which was obtained from various publicly available sources and other sources believed by the Company to be true. Although the Company believes it to be reliable, the Company has not independently verified any of the data from third-party sources referred to in this presentation, or analyzed or verified the underlying reports relied upon or referred to by such sources, or ascertained the underlying assumptions relied upon by such sources. The Company does not make any representation as to the accuracy of such information. Forward-Looking Information This presentation contains “forward-looking information” within the meaning of applicable Canadian securities laws (“forward-looking statements”). Forward-looking statements in this presentation include, but are not limited to, statements with respect to: the Company’s strategy, development and commercialization plans and objectives (including target acquisitions including expected acquisition terms, projected milestones and timelines, estimated sales, revenue, margins and EBITDA and cost metrics), the anticipated business, operation and financial performance and condition of the Company, management’s expectation with respect to the success of the Company in its industry, expectations regarding the ability to raise capital, the amount and use of proceeds of financings, market prices, values and other economic indicators and estimated valuation multiples. Forward-looking statements are based on certain material assumptions and analysis made by the Company, and the opinions and estimates of management as of the date such statements are made and they represent management's best judgment based on facts and assumptions that management considers reasonable in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. The material assumptions upon which forward-looking statements in this presentation are based include, among others, assumptions with respect to: the completion of the Acquisition (as defined herein); the Company's consolidation strategy, commercialization of Intellectual property, growth plans and cash flows; the demand for the Company's services; future demand and trends in Microsoft Azure Assessments; the Company’s ability to scale revenue; the Company's ability to access financing on favorable terms from time to time; the Company's ability to protect its intellectual property rights and that the Company will not infringe upon the intellectual property rights of others; the Company's ability to attract and retain clients; the continuation of executive and operating management or the non-disruptive replacement of them on competitive terms; and stable market and general economic conditions. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions. Although the Company believes that the assumptions underlying forward-looking statements are reasonable, they may prove to be incorrect and the Company cannot assure that actual results will be consistent with such statements. Given these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements or the information contained in such statements. Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including the Company's history of net losses and negative cash flow; the Company's requirement for additional funding to develop its business; and risks relating to the following: failure to complete target acquisitions on the expected terms or at all; liabilities associated with acquired companies or assets; failure to achieve expected synergies, cost savings, sales, revenue and / or EBITDA; the Company's failure to economically commercialize its service; failure to protect the Company’s intellectual property rights; litigation, including with respect to intellectual property infringement; the Company's inability to maintain or improve its competitive position; future demand and trends in Microsoft Service Offerings; the Company's failure to retain key personnel and hire additional personnel needed to develop its business; the Company's failure to adequately evaluate its current business and future prospects; and the Company's business practice reputation being negatively affected by customer or user complaints or negative publicity. These risks, uncertainties, assumptions and other factors could cause the Company's actual results, performances, achievements and experience to differ materially from the Company's expectations, future results, performances or achievements expressed or implied by the forward-looking statements. The forward-looking statements contained herein are presented for the purpose of assisting readers in understanding the Company’s expected financial and operating performance and the Company’s plans and objectives, and may not be appropriate for other purposes. You should read this information with the understanding that the Company's actual future results may be materially different from what it expects. These forward-looking statements are expressly qualified in their entirety by this cautionary statement. The Company disclaims any obligation to update forward-looking statements, except as required by law.
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Agenda
Capital Structure
Microsoft Partner of the Future
Quisitive Goto Market Strategy
M&A Strategy Update
Quisitive IP and LedgerPay Strategy
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Capital Structureas at September 18, 2018
Ticker Symbol: Share Price (CAD)Shares OutstandingOptions & Warrants OutstandingEscrow SharesEmployee Incentives
Market CAP (CAD)
1.7M @ $0.35 expiry (2020)12.3M @ $0.50 expiry (2020)Warrants Outstanding
TSXV: QUIS$0.2584.8M16.6M51.1M2.1M
$21.2M
1.8M @ $0.35 expiry (2023)Options Outstanding
Corporate & Finance History
March 2018 Private Placement – CAD $8.6M @ $0.35
RTO Completed August 8, 2018
Quisitive (TSXV: QUIS) Begins Trading August 13, 2018
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Board of Directors
Director, CEO
Quisitive
Mike Reinhart
Director
Investor
Gord McMillan
Director
Microsoft
Phil Sorgen
Director, Audit Chair
Clarocity
Dave Guebert
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A Microsoft technology solutions provider that helps customers navigate the ever-changing technology climate that a business demands.
With a legacy of innovation and deep technical expertise, Quisitive is empowering the enterprise to harness the Microsoft cloud and emerging technology such as blockchain, artificial intelligence, machine learning and IoT like never before.
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Morgan Stanley, Deutsche Bank and others predict Microsoft will reach the $1 trillion market cap in less than a year’s time, thanks in large part to cloud adoption and the subsequent growth of Microsoft Azure – up 89 percent in Q4 of FY19. As the rising tide of cloud adoption continues to raise “all ships,” there is one market subset in particular – cloud consultancies –
that are well-positioned for success and longevity.
One such consultancy is Quisitive Technology Solutions Inc.
Satya Nadella’s Microsoft Reboot
• Increased in market value of $450 billion+ (180% share price appreciation)
• Returned to consistent profitability
• Azure revenue increased 98% in 2017, as Microsoft becomes the world's largest enterprise-cloud vendor
• Dynamics 365 and Office 365 continue on hypergrowth trajectories
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Microsoft’s Partner of the Future
Specialization Verticalization Productization
Quisitive’s value proposition is three-fold: specialization surrounding the different technologycomponents of the Microsoft platform and how they work cohesively inside the enterprise;verticalization across burgeoning markets like financial services, oil and gas, and manufacturing; andproductization relative to SaaS-based solutions. With this infrastructure, Quisitive will bridge thedivide between business and IT, and ultimately achieve its rightful status as Microsoft Partner of theFuture.
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Delivery Maturity Model
Phase One Hourly Serviceso Narrow Geographic Focuso No Vertical Focuso T and M Staffing Focuso Flagging YoY Top Line o NOI of less then 7%
Phase TwoProject Based Serviceso Larger Geographic Focuso Predominantly focused on less
than 5 Vertical marketso Project Focus predominantly
T and Mo Single Digit YoY Top Line Growtho NOI of 7 to 15%
Phase ThreeSubscription Based Serviceso Focused on one Vertical Market
and National/International Footprint
o Subscription revenue model for project based/maintenance services
o 20%+ YoY Top Line Growtho NOI of 13 to 22%+
Phase FourSubscription Based Services
and Intellectual Property
o Focused on one Vertical Market and National/International Footprint
o Subscription revenue model for project based/maintenance services
o Industry aligned frameworks, mass customizable products, and pre-configured solutions
o 30%+ YoY Top Line Growtho NOI of 20% to 28%+
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Quisitive Growth Objectives
• Aggressive M&A Growth– Strategic Microsoft partner consolidation in US and Canada– 3+ acquisitions per year over next 5 years
• 20%+ annual organic growth• Achieve 40% Monthly Recurring Revenue
– Cloud Solution Provider (CSP) – Azure monthly recurring license revenue
– Cloud Managed Services monthly recurring revenue– SaaS license revenue
• LedgerPay, Supply Chain Solution
• Increase EBITDA Margins driven by monthly recurring revenue
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Quisitive’s mission is to become the premier Microsoft partner in North America dedicated to helping customers move their businesses to the Microsoft cloud and benefit from the full breadth of emerging technologies that cloud offers.
Partners since 2008
10+ Years
100+ YearsCombined leadership experience with Microsoft
Microsoft 2018 US Partner of
the Year Finalist
National Solution Provider
Gold Microsoft Partner
Customer Engagement
Alliance Charter Member
Partner Advisory Council
Member
Microsoft Blockchain
Advisors Group Member
Executive Partner
Advisory Board (CEO)
DENVER
DALLAS
TORONTO
Purpose Driven Partnership
Strategic Enterprise AI and
Blockchain Partner
Enterprise Ethereum Alliance
Member
Mike Reinhart Steven Balusek Scotty Perkins Kevin Castillo Tami AndersStephanie Ratza
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Microsoft Inspire 2018
1:1 with Microsoft CEO Satya Nadella• Discuss Partnership with Microsoft• Review Quisitive Azure Accelerator Assessment Program• Discuss strategic partnering on LedgerPay and Quisitive
blockchain proof of concepts.
Comprehensive ROI Analysis
Azure Consumption Cost Estimates
Cloud Migration Project Plan
Architecture FindingsOptimization Recommendations
Executive Business Case
Azure Accelerator Assessment
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ACCLERATING AZURE GROWTH IN THE NORTH AMERICAN CUSTOMER BASE
Providing the business case to move customers from kicking the Azure can to taking action
Quisitive’s Azure Assessment motion is accelerating the rate in which Microsoft’s Cloud Economics Team is gaining access to customers in their cloud explorations. This early exposure is helping us jointly position Azure for datacenter transformation much ahead of our competitors.
Jamie Martins Microsoft Customers Success Manager | Cloud Economics Team
Customers Engaged45+Azure Assessments Completed
25+
FY18 Azure Consumption Influence$85M+
700+ Targets Touched
IP Co-sell22
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Azure Assessment Goal - Next 12 MonthsNorth America (U.S. and Canada)300+
$750M - $1BN150+
Azure Consumption Pipeline to Microsoft
Azure Customer Adds
$7.5M Quisitive Services Revenue
$100M Quisitive 3 Year Pipeline
All Amounts are CAD $
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M&A Strategy Update
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• Target Profile• Geographic Location (Regional US, Canada)• Microsoft Specialization
• Microsoft Cloud Services• Cloud Solution Provider (CSP) – Direct Bill• Managed Services• Off-Shore Capability
• Vertical/Industry • O&G, Financial Services, Retail, Manufacturing
• ISV or SaaS Product Solutions• $10M - $50M in annual revenue• Growing Business with strong EBITDA and Recurring Revenues
M&A Strategy
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• Strong Validation of Strategy from Channel• Strategic Engagement and Support from Microsoft• Preferred Deal Structure
• 1/3 Cash, 1/3 Equity, 1/3 Earnout (2- 3 year)• 6-9x TTM EBITDA
• Active Acquisition Pipeline• 12+ Active Acquisition Targets• $300M in Revenue• USA, Canada, UK
M&A Strategy
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VisionQuisitive is bringing the power and scale of the cloud to consumers and commercial customers in the retail and consumer goods space and first-party IP solutions to enterprise customers in the Microsoft Azure ecosystem
DMDIIOIL AND GAS SUPPLY CHAIN
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LedgerPay
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OverviewLedgerPay is a Quisitive product company that has been created to develop products and offerings enabled by blockchain and specific to payments-related market needs.
The company is developing a consumer insights data analytics service coupled with a payments processing platform that addresses a USD $40+ billion market opportunity.
The team includes senior management experiencedin financial services, data analytics and blockchain technologies.
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Mission & Vision
LedgerPay’s mission is to provide consumers with the fullest, most convenient, and most rewarding buying experience possible by delivering cloud-based consumer insights and payment solutions to the top consumer and retail brands in North America.
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MARKET SIZE AND OPPORTUNITYPrimary consumer insights offering targets CPG companies and merchants
Target opportunity for primary offering represents a $30-40 billion industry
• There is a strong opportunity to differentiate with the application of emerging technologies such as machine learning and AI
• CPGs rely on buying consumer insights data and reports from 3rd parties, but have little analytical capability
• Merchants are investing heavily in loyalty and rewards programs but there has been little innovation in 20 years
Globally there are over 430 billion card transactions each year. Any business that currently accepts card payments is a potential customer of our Processor platform, which would stream transaction data gateway to our Insights platform.
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The marketplace for consumer insights is fragmented and has applied little innovation over many years
• FMCG/CPG producers spend millions every year on consumer insights data and reports from 3rd parties that are incomplete and often stale. They are seeking better, more targeted insights.
• Merchants produce consumer transaction data, but few have the expertise to effectively analyze the data themselves.
Payment systems continue to be a source of pain and frustration for merchants, with high interchange fees, delays in clearing funds and the growing impact of fraudulent purchases. Few have been built with today’s data-driven environment in mind.
THE PROBLEM
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LedgerPay Insights will leverage cloud, AI
& Machine Learning and blockchain to
provide merchants and FMCG/CPGs with
access to the most complete consumer
data intelligence available at a highly
competitive price.
LedgerPay Insights
LedgerPay Processor is a purpose-built
payments network, architected from the
ground up on blockchain technology,
offering significantly lower transaction fees
than the incumbent systems, and the ability
to harness the transaction data generated at
the point of sale for ever-improving insights.
LedgerPay Processor
LedgerPay Protect provides powerful
protection from retail payment
fraud and AML compliance capabilities not
currently available to the retail market
today. Also architected on a blockchain
foundation for transparency and rapid
auditability.
LedgerPay Protect
THE SOLUTIONLedgerPay’s integrated suite of products provides a powerful solution for merchants and FMCG/CPGs
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Scotty PerkinsMike Reinhart
LedgerPay Team
Dan Devlin James Becker Saundra Linn
• 25 years leading and building strategic technology consulting teams
• Deep relationshipsas a long-timeMicrosoft National Solutions Provider
• 25 years in retail, payments, operations, technology, and compliance
• Chief Compliance Officer for payments company with $3B USD in TPV
• Managing Director, Technology Integrationat FedEx
• Founder at Pure Payments, Chockstone, MoneyCard, Transaction Labs
• Chief Architectat First Data
• Chief Scientist at Excite@Home
• 20 years in payments technology sales and business development
• Head of Business Development at Transaction Labsand T-Gate Payments
• 30 years in loyalty, operations, and consumer behaviorin retail
• Managing partnerat GEM Insights
• Former EVP at dunnhumby, Head of dunnhumby Canada
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TSXV: QUIS
- Experienced Leadership Team- Depth of Microsoft Relationship
- Huge Growth Potential at the Leading Edge Market Opportunity- AI, IoT and Blockchain Product Innovation
- SaaS and Recurring Revenue Models that Drive Value- Defining the Microsoft Partner of the Future
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