Ticker: TAPM A Mobile Gaming Leader DECEMBER 2017
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 1995. Words such as targeted, 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 forward-looking 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: http://www.tapinator.com/disclaimers 1
WHAT WE DO An Emerging Mobile Gaming Leader We Develop, & Publish Mobile Games for the ios, Android, and Amazon platforms. 2
SNAPSHOT An Emerging Mobile Gaming Leader Our portfolio consists of more than 300 mobile gaming titles with over 450mm player downloads Our strategy is two-fold: (i) produce a large number of Rapid-Launch Games, which have low development costs and predictable returns and (ii) produce a select number of original Full-Featured Games which have higher development costs yet offer massive upside Our revenues and adjusted EBITDA* for 2016 were approximately $3.7mm and $870k, respectively. This compares to revenues and adjusted EBITDA* for 2015 of $2.4mm and $522k, respectively We generate revenues through the sale of: (i) branded advertisements within our games and (ii) app store transactions We are based in New York City and have 10 employees and 40 contractors We are listed on the OTCQB Market and our market cap is approximately $10.0mm * EBITDA is a non-gaap, unaudited financial measure. 3
INVESTMENT HIGHLIGHTS An Emerging Mobile Gaming Leader Large and growing total addressable market - mobile games & mobile advertising Diversified portfolio of 300+ revenue producing games that, together, have achieved network scale Low cost and highly efficient development platform Rapid revenue growth with high operating leverage; we are EBITDA* positive and growing Disciplined ROI-based strategy of blending low cost Rapid-Launch and higher cost Full-Featured Games Efficient monetization strategy consisting of programmatic advertising sales and app store transactions Veteran management team/board with high-growth and large internet company credentials and a track record of building successful digital media businesses * EBITDA is a non-gaap, unaudited financial measure. 4
TEAM BIOS Management IIYA NIKOLAYEV - Chief Executive Officer Co-Founder and CEO of Familybuilder until the sale of the Company to Intelius in 2011. 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 2014. 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. GEORGI DARAKEV - CTO 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 Was CMO/CRO at Spotify, the world s leading music streaming service, starting in 2011. 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. 5
TWO MARKETS: MOBILE GAMING & MOBILE ADVERTISING Mobile Gaming Revenue to Grow From $34.8B in 2015 to $74.6B in 2020 6
TWO MARKETS: MOBILE GAMING & MOBILE ADVERTISING Mobile Advertising Revenue Projected to Grow From $101B in 2016 to $166B in 2018 7
T W O - P R O N G E D G A M E S T R AT E G Y Maximizing Risk Adjusted Returns Via a Game Portfolio Approach Full-Featured Games Rapid-Launch Games High volume Lost cost Historically predictable returns Advertising monetization Evergreen and/or homerun potential Low volume Higher cost Higher returns In-app purchase monetization 8
TWO-PRONGED GAME STRATEGY Maximizing Risk Adjusted Returns on Investment of Game Portfolio RAPID-LAUNCH GAMES FULL-FEATURED GAMES Range of game development time 1 to 3 months 3 to 12 months Target lifetime game dev cost $5k to $10k $100k to $1mm 2017 game launches (est.) 100 4 Technology Unity, MoPub, GameAnalytics Unity, MoPub, GameAnalytics Adjust, GameSparks Game genres Parking, Driving, Stunts, Simulation, Arcade, Casino, Sports, RPG Shooting, Fighting Branded license partners NA MGM, Discovery Channel Target average life 18 to 54 months 36 to 60 months Risk level Low Moderate Target lifetime revenue per game $35k $2.5M ($250k to $5M+) Primary monetization methods Advertising In-App Purchases + Advertising % of 2017 bookings (est.) 52% 48% 9
RAPID-LAUNCH GAMES High Volume, Low Cost, Predictable Returns Low cost development platform Cross game promotion replaces traditional user acquisition cost Over 300 active games, 88+ of which have achieved 1 million+ downloads 66% of our games older than 180 days are profitable $6.9K $26.7K 3.9x Average Development Cost per Game* Average Contribution Margin per Game* Average ROI per Game* *Historical data from 314 Rapid-Launch games from 7/1/13 through 3/31/17. *Figures include projected revenue and cost data over estimated remaining life. 10
RAPID-LAUNCH GAMES High Volume, Low Cost, Predictable Returns 11
FULL-FEATURED GAMES Low Volume, Higher Cost, Higher Returns Product Focus: Unique game play with in-depth content High retention with best-in-class monetization Build unique IP and selectively license branded IP Recently launched top grossing games generate huge revenue numbers: Clash Royale, launched 03/21016, generated $1 billion in its first year* Gardenscapes, launched 08/2016, has a $36+ million revenue run rate** Design Home, launched 11/2016, has a $60+ million revenue run rate*** $500K $2.5mm 5.0x Avg. Target Development Cost per Game *VentureBeat, 02/15/17 Avg. Target Contribution Margin per Game Avg. Target ROI per Game ** MobileDevMemo, 09/19/16 ***Glu Q1 2017, Earnings Presentation 12 11
FULL-FEATURED GAMES Low Volume, Higher Cost, Higher Returns We have launched fifteen full-featured games Eleven were Featured as New Games We Love Nine reached the Top 50 in Games We have evolved our full-featured strategy to shift away from super casual games We have in-depth knowledge of how to create a hit game and are well positioned to launch a home run product in 2018 Ilya Nikolayev CEO Interviewed on TheStreet Dec 1, 2015 13
FULL-FEATURED GAMES Recent Launches: Solitaire Dash and Big Sport Fishing 2017 Solitaire Dash Big Sport Fishing 2017 14
FULL FEATURED GAME PIPELINE Major Planned Launches for 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 ColorFill Divide & Conquer Sequel to a unique RPG game with an Apple App Store Editors Note. Our goal is to improve upon the original s already-strong ARPDAU while solving for long term retention. In this unique, artthemed puzzle game, you must apply the correct color paint within each square to successfully reveal the masterpieces hidden beneath. Craft a robo-hero to take on an endless horde of battle droids in this fast-paced RPG. Take on missions, find loot, and unlock an arsenal of cannons, missiles, lasers, and more. An arena-style synchronous, multiplayer strategy game. Offers a unique combination of fast, synchronous multiplayer battles and longterm progress via upgrades and unlocks. 15
DIVERSIFIED REVENUE SOURCES Advertising & App Store Purchases Advertising App Store Purchases September 30, 2017 (YTD): 51% of Bookings September 30, 2017 (YTD): 49% of Bookings 16
MONETIZATION BEST PRACTICES Our Ads Do Not Disrupt Gameplay & Provide Value to Users 1 No Ads During Gameplay 2 INTERSTITIAL ADS Shown Between Levels 1 Ads Tie Into Game Currency 2 REWARDED VIDEO ADS Provide Value 17
MONETIZATION BEST PRACTICES Our In-App Purchases Enhance Gameplay 1 Free to Play 2 Monetize Gameplay with Consumables & Non-Consumables 18
OPERATIONAL EXCELLENCE Creating Barriers to Entry 300+ Games Zero paid marketing to acquire game s first 100k players Cross Promotion System Top search placement & ability to move games up the leaderboards 11m+ MAU App Store Optimization 450m+ Installs Platform Relationships Data Analytics Strong platform editorial relationships (11 New Games We Love on ios) 317,000+ Daily Installs Expertise in Live Operations: Player analytics, attribution, and ad optimization 19
PLAYER & GAME METRICS We Have Built a Robust & Defensible Network Metrics as of Q3 2017: Average DAUs 692,000 Average MAUs 11.7 million Average New Daily Downloads 317,000 Cumulative Downloads 451 million as of September 30, 2017 Game Library 333 active titles as of September 30, 2017 Game Concentration Diverse portfolio with no single game accounting for more than 20% of total revenues during the twelve months ended September 30, 2017 20
FUTURE OPPORTUNITIES Virtual Reality (VR) and Augmented Reality (AR) VR likely had its first $1 Billion year in 2016.* The VR industry is expected to hit $30 Billion by 2020** The Company has released several prototype VR games as it gathers data before pursuing a more significant VR product The AR industry is expected to hit $120 Billion by 2020** Apple recently announced the largest AR platform in the world. The Company sees this as a significant opportunity given its strength on ios * Deloitte Global **DigiCapital, April 2015 19 21
FUTURE OPPORTUNITIES Publishing and Acquisitions Pursue publishing transactions that leverage our network, platform relationships, and operational excellence There are significant opportunities for expanding our gaming IP to new platforms 22
FINANCIAL HIGHLIGHTS +30% Annual Bookings Growth Target for 2017-2019 REVENUE OP. INCOME (LOSS) NET INCOME (LOSS) ADJUSTED EBITDA* CASH TOTAL ASSETS TOTAL LIABILITIES STOCKHOLDERS EQUITY 12 months DEC 31, 2016 (audited) $3,731,774 (12,263) (2,347,675) 871,268 590,461 2,415,171 1,296,500 1,118,670 12 months DEC 31, 2015 (audited) $2,448,051 (893,718) (1,924,008) 522,892 1,487,196 2,837,097 1,080,043 1,757,054 * Unaudited. See Adjusted EBITDA footnote on page 3. 23
KEY FACTS SHARE STATISTICS Trading Symbol (OTC) TAPM Stock Price (12/01/17) $0.16 CommonShares Outstanding (06/30/17) 59.5mm 30d Avg. Volume (12/01/17) 113,047 Market Cap (12/01/17) Float (12/01/17) $10.1mm 12.1mm shares Insider Ownership (12/01/17) 58% OTHER Personnel 10 FTE Fiscal Year Ends 12/31 Website Corporate HQ Legal Auditor Tapinator.com New York, NY Quick Law Group Liggett & Webb, P.A. 24
THANK YOU For more information and a copy of our presentation, go to: http://tapinator.com/investors 25