Ticker: TAPM. An Emerging Mobile Gaming Leader

Transcription

1 Ticker: TAPM An Emerging Mobile Gaming Leader FEBRUARY 2016

2 FORWARD LOOKING STATEMENTS To the extent that statements contained in this presentation are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of Words such as may, will expect, anticipate, estimate, intend, and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forwardlooking statements. Examples of forward-looking statements contained in this presentation include, among others, statements regarding the quoting and trading of our common stock and our expectations regarding our development and monetization plans for our mobile games. Forward-looking statements in this release involve substantial risks and uncertainties that could cause the development and monetization of our mobile games, future results, performance or achievements to differ significantly from those expressed or implied by the forward- looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the hits nature of the mobile gaming business. Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the company s common stock on the OTC Bulletin Board and the OTC Market Group s OTC Link quotation system is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the company s operations or business prospects. As a result, there may be volatility in the market price of the shares of the company s common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board and the OTC Market Group s OTC Link quotation system are not stock exchanges, and trading of securities on them is often more sporadic than trading of securities listed on the NASDAQ Stock market or another securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the company in general, see Tapinator s disclaimers, which are available here: 1

3 WHAT WE DO An Emerging Mobile Gaming Leader We Design, Develop, & Publish Casual Mobile Games for the ios, Android, and Amazon platforms. 2

4 MOBILE GAMING GROWING TO $41B BY 2017 App Store Billings Have Already Exceeded Hollywood US Box Office Revenues $41B by 2017 $17B by 2013 Sources: Newzoo 2014 Global Games Market Report & Service; Glu Mobile Analyst Day Presentation, May 14,

5 AN EMERGING MOBILE GAMING LEADER Over 180 Titles with New Games Released Every Week Two Divisions Rapid Launch Games Launching 1-2 games weekly Using proprietary game engines, development has become faster, more cost-efficient Variety of genres including driving, parking, stunts, animal and career simulation Profitable, low risk Monetizes primarily through advertising Full Featured Games 3 to 9 month development timeline Variety of genres including Quick-Fix, Social Casino, & RPG Working with branded IP Monetizes primarily through in-app purchases, and advertising More risk but ability to generate home run successes 4

6 AN EMERGING MOBILE GAMING LEADER Rapid Launch Games Over 180 games: 40 of which have achieved 1 million+ downloads $6.5K $22.4K 245% Average Cost per Game* Average Revenue per Game* Average ROI per Game* *Historical data from 107 rapid launch games from 9/1/13 through 6/30/15. *Figures include projected data over estimated remaining life. 5

7 AN EMERGING MOBILE GAMING LEADER Full Featured Games Full Featured Titles with Unique Gameplay and Branded IP: We have launched eight such Games on ios. Seven were Featured as Best New Games Six reached the Top 50 in Games Ilya Nikolayev CEO Interviewed on TheStreet Dec 1,

8 FREEMIUM BUSINESS MODEL We Monetize User Engagement Ads In-App Purchases 80% of Revenue 20% of Revenue 12 Month Target: 50/50 revenue split between Ads and IAP 7

9 FREEMIUM BUSINESS MODEL Our Advertising Does Not Disrupt Gameplay 1 No Ads During Gameplay 2 Ads Shown Between Levels 3 When Game Ends 4 Users Can Purchase New Items or Levels 8

10 FREEMIUM BUSINESS MODEL Our In-App Purchases Enhance Gameplay 1 Free to Play 2 Monetize Gameplay with Consumables & Non-Consumables 9

11 MOBILE MONETIZATION GETTING STRONGER Player Monetization Is Accelerating Compound Annual Growth Rates: App Rev Mobile Adoption GROWTH 19% CAGR, (to reach $73 billion)* 15.3% CAGR, (to reach 6.1 billion smartphones)** TIME Sources: *Gartner; **Digital Trends/Ericsson 10

12 COMPETITIVE LANDSCAPE Rapid Launch and Full Featured Strategies Complement Each Other HARDCORE GAMES Higher CPI, Higher ARPU FULL FEATURED Lower number of users MIDCORE GAMES Higher number of users RAPID LAUNCH Lower CPI, Lower ARPU CASUAL GAMES 11

13 COMPETITIVE ADVANTAGE Barriers to Entry 180 Games Zero paid marketing to acquire game s first 100k players (replaces market CPIs of $3-$5) Publishing opportunities Top search placement 9m MAU Cross Promotion System App Store Optimization 160m Installs Ability to move games up the leaderboards Platform Relationships Seven Best New Games Data Analytics Potential appstore placement for all full-featured games 300,000+ Daily Installs Mobile gaming is a live ops business Player analytics, attribution, and ad optimization are all crucial 12

14 PLAYER & GAME METRICS Robust Network Growth Metrics as of Q4 2015: Average DAUs 532,000; up 149% year-over-year Average MAUs 8.8 million; up 104% year-over-year Average New Daily Downloads 338,000; up 144% year-over-year Cumulative Downloads 166 million as of Dec. 31, 2015; up 245% year-over-year Game Library 186 titles as of Dec. 31, 2015; up from 94 year-over-year Game Concentration Diverse portfolio with no single game accounting for more than 10% of total revenues during

15 RAPID LAUNCH DIVISION Critical Mass Across Six Genres 14

16 FULL FEATURED GAME PIPELINE Nine Announced Launches for 2016 Q Q Q Q Major motion picture based game. To be announced. 15

17 F U L L F E AT U R E D G A M E P I P E L I N E Video Poker VIP (with Multiplayer Mode) Best In Class Video Poker New spin on the players favorite video poker variants including Jacks or Better, Deuces Wild, Bonus Poker, and Double Bonus. Mechanics that have proven themselves in slot games In Q1, we will be launching Multiplayer mode, which is unique within the video poker segment Opportunity to own the video poker space on mobile with a differentiated, highly polished product The social casino industry will grow from its current $3.4 billion level to $4.4 billion by 2017 * Source: Eilers Research, Social Casino Tracker, Nov

18 FULL FEATURED GAME PIPELINE Publishing Deal: Big Sport Fishing 2 Sequel to Hit Fishing Game Debuted on Google Play in 2010 and has since accumulated over 15 million downloads. This sequel will bring the game to ios for the first time Turns players phones into virtual fishing rods within a 360 degree, simulated reality fishing environment Evergreen category with more than 55m Americans going on at least one fishing trip in 2013 spending $42b Mega hit potential given the success of the hunting category on mobile * Source: Statista 17

19 FULL FEATURED GAME PIPELINE ROCKY Game Based on the Legendary Franchise Agreement with MGM covers creating an interactive boxing mobile game based on the entire ROCKY motion picture franchise ROCKY is one of only a handful of brands that are recognizable across age groups and demographics, especially given the success of the Creed sequel The ROCKY franchise has grossed more than $1 billion. Our game will launch in June

20 FULL FEATURED GAME PIPELINE Combo Quest 2 Sequel to Hit CQ1 Unique Time-Tap Mechanic Mass Appeal RPG for All Ages Version 1.0 Launched on 01/08/15 as a 99 cent, paid game. Became the #1 Paid RPG on ios CQ1 was featured by Apple four times: as a Best New Game, twice as Best New Update and as a Free App of the Week CQ2 is the freemium sequel with monetization and retention built into the game from the ground up 19

21 FULL FEATURED GAME PIPELINE Miss the Moose Unique Quick-Fix Game Quick-fix games have mass appeal and significant ad revenue potential, with relatively small downside risk We have had success with prior quick-fix feature placements including Best New Games for Balance of the Shaolin, Endless Balance, Rotatio, and others Miss the Moose is our latest game within this genre. It is characterized by addictive gameplay, beautiful artwork, and a great soundtrack We plan on releasing multiple quick-fix games this year 20

22 ACQUISITIONS & PUBLISHING Industry Fragmentation Creates Large Growth Opportunity We are aggressively pursuing accretive acquitions within evergreen areas such as social casino Within the last 6 months, we have reached out to 100+ targets, have had 40+ conversations, and have made 2 preliminary acquisition offers We are also exploring publishing transactions, both standalone and as a first step toward a potential acquisition 21

23 FUTURE OPPORTUNITIES Apple TV, Virtual Reality & Geographic Expansion The Apple TV platform will challenge PS4 and Xbox One and will bring ios games to a new medium with an additional set of players In 2016, virtual reality is expected to generate $6.7 billion in revenue and increase tenfold by Gaming will be one of the key categories on VR 22

24 TEAM BIOS Management IIYA NIKOLAYEV - Chief Executive Officer Co-Founder and CEO of Familybuilder until the sale of the Company to Intelius in He grew the business to profitability, acquired over 45 million users on the web, and over 2 million users on mobile. Mr. Nikolayev was also a cofounder of InAppFuel, a developer of patented minigame software acquired by Tapinator in Prior to Familybuilder, Mr. Nikolayev worked in banking for JP Morgan and graduated cum laude with a BA from New York University. ANDREW MERKATZ - President/CFO An accomplished entrepreneur with 20+ years of financial operations and transactional experience. Mr. Merkatz spent 6+ years at Vision Capital where he focused on digital media and software technology. Mr. Merkatz was also a cofounder of InAppFuel and Familybuilder along with Mr. Nikolayev. Mr. Merkatz earned his BA from University of Pennsylvania (cum laude), and his MBA from Harvard University. KHURRAM SAMAD - CTO - Rapid Launch Games Founded GeniTeam, an outsourced development Company focused on mobile with over 80 developers in house. Mr. Samad is an experienced leader of offshore technical teams with access to superb local talent. Mr. Samad earned a BS in Computer Science from National University of Computer and Emerging Sciences and an MBA from LUMS. GEORGI DARAKEV - CTO - Full Featured Games Led all feature development at Familybuilder. Extensive experience developing successful LAMP (Linux,Apache, MySQL, PHP) applications and web services. Expertise in scaling applications on AWS, S3, and Rightscale. Built products used by millions monthly on both the web & mobile. Cofounder of InAppFuel. Mr. Darakev earned his BS in Computer Science from Dowling College. ROBERT CRATES - Independent Director Over 25 years of experience in private equity, investing in a broad range of industries and asset categories. Mr. Crates has served on the board of directors of numerous public and private companies. Mr. Crates earned his BA from Yale University. TEYMOUR FARMAN-FARMAIAN - Independent Director Teymour Farman-Farmaian was CMO/CRO at Spotify, the world s leading music streaming service, starting in He helped triple revenue growth to hit a $500 million run rate, and achieve 7.5 million DAU. Before Spotify, Teymour worked at Zynga (ZNGA) as GM of Partnerships and at Google (GOOG) in various sales and operational roles. Teymour earned his BA from Duke University and his MBA from Harvard University. 23

25 FINANCIAL HIGHLIGHTS 2015 Audited Results Scheduled for March 2016 Release 9 months SEP 30, 2015 (unaudited) 12 months DEC 31, 2014 (audited) 6 mo. (inception) DEC 31, 2013 (audited) REVENUE $1,755,369 $943,449 $130,980 OP. INCOME (LOSS) (254,118) 24,447 (17,807) NET INCOME (LOSS) (875,541) 7,892 (17,807) ADJUSTED EBITDA* 373, , ,320 CASH 1,792, ,740 12,418 TOTAL ASSETS 3,490,683 1,569,712 64,254 TOTAL LIABILITIES 667, ,206 42,561 STOCKHOLDERS EQUITY 3,490, ,007 21,693 1 Unaudited * See Adjusted EBITDA footnote on following page. 24

26 REVENUE & ADJUSTED EBITDA Investing In Measured Growth *Adjusted EBITDA Disclaimer: We believe Adjusted EBITDA, a non-gaap, unaudited financial measure, is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. We believe that: Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with other companies, many of which use similar non-gaap financial measures to supplement their GAAP results; and It is useful to exclude non-cash charges, such as depreciation and amortization, stock-based compensation and one-time charges from Adjusted EBITDA because the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods. We use Adjusted EBITDA in conjunction with traditional GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. Adjusted EBITDA should not be viewed in isolation nor considered as a substitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using non-gaap financial measures. One principal limitation is that this measure excludes significant expenses and income that are required by GAAP to be recorded in the Company s financial statements. In addition, while depreciation and amortization are non-cash charges, and therefore excluded from Adjusted EBITDA, the assets being depreciated and amortized may have to be replaced in the future. Adjusted EBITDA is subject to inherent limitations as it reflects the exercise of judgment by management about which expenses and income are excluded or included in determining this non-gaap financial measure. Additionally, other companies may calculate Adjusted EBITDA differently than we do. We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income (loss). The Company urges investors to review the reconciliation of its Adjusted EBITDA to the comparable GAAP financial measure which may be found in our quarterly and annual results press releases which may be found at 25

27 KEY FACTS SHARE STATISTICS Trading Symbol (OTC) TAPM Stock Price (01/20/16) $0.30 Shares Outstanding (12/31/15) 57.1mm 30d Avg. Volume (12/31/15) 50,438 Market Cap (01/20/16) Float (12/31/15) $17.1mm 8.1mm shares Insider Ownership (12/31/15) 66.9% OTHER Personnel 52 (including contract employees) Fiscal Year Ends 12/31 Website Corporate HQ Legal Auditor Tapinator.com New York, NY Quick Law Group Liggett, Vogt & Webb, P.A. 26

28 THANK YOU For more information and a copy of our presentation, go to: 27