ticker: tapm an emerging mobile gaming leaderdeck+02+01+16.pdfan emerging mobile gaming leader...
TRANSCRIPT
An Emerging Mobile Gaming Leader
Ticker: TAPM
FEBRUARY 2016
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 “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
FORWARD LOOKING STATEMENTS
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W H AT W E D OAn Emerging Mobile Gaming Leader
We Design, Develop,
& Publish Casual
Mobile Games for the
iOS, Android, and
Amazon platforms.
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M O B I L E G A M I N G G R O W I N G T O $ 4 1 B B Y 2 0 1 7App Store Billings Have Already Exceeded Hollywood US Box Office Revenues
$41Bby 2017
$17Bby 2013
3Sources: Newzoo 2014 Global Games Market Report & Service; Glu Mobile Analyst Day Presentation, May 14, 2015
F u l l F e a t u r e d G a m e s
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
A N E M E R G I N G M O B I L E G A M I N G L E A D E ROver 180 Titles with New Games Released Every Week
R a p i d L a u n c h G a m e s
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
Tw o D i v i s i o n s
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A N E M E R G I N G M O B I L E G A M I N G L E A D E RRapid Launch Games
Over 180 games: 40 of which have achieved 1 million+ downloads
*Historical data from 107 rapid launch games from 9/1/13 through 6/30/15.
*Figures include projected data over estimated remaining life. 5
Average Cost per Game* Average ROI per Game*
$6.5K 245%$22.4K
Average Revenue per Game*
A N E M E R G I N G M O B I L E G A M I N G L E A D E RFull Featured Games
We have launched eight such Games on iOS.
Seven were Featured as Best New Games Six reached the Top 50 in Games
Full Featured Titles with Unique Gameplay and Branded IP:
I lya NikolayevCEO
Interviewed on TheStreetDec 1, 2015
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F R E E M I U M B U S I N E S S M O D E LWe Monetize User Engagement
80% of Revenue 20% of Revenue
Ads In-App Purchases
12 Month Target: 50/50 revenue split between Ads and IAP
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F R E E M I U M B U S I N E S S M O D E LOur Advertising Does Not Disrupt Gameplay
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No Ads During Gameplay Ads Shown Between Levels
When Game Ends Users Can Purchase New Items or Levels
1 2
3 4
Free to Play
Monetize Gameplay with Consumables & Non-Consumables
F R E E M I U M B U S I N E S S M O D E LOur In-App Purchases Enhance Gameplay
1
2
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M O B I L E M O N E T I Z AT I O N G E T T I N G S T R O N G E RPlayer Monetization Is Accelerating
GROWTHCompoundAnnual Growth
Rates:
App Rev
Mobile AdoptionTIME
19% C
AGR, 2
014-2
019 (t
o reac
h $7
3 bill
ion)
*
15.3% CAGR, 2014-2020 (to reach 6.1 billion smartphones)**
Sources: *Gartner; **Digital Trends/Ericsson 10
C O M P E T I T I V E L A N D S C A P ERapid Launch and Full Featured Strategies Complement Each Other
Higher CPI, Higher ARPU
Lower CPI, Lower ARPU
Lower number of users
Higher number of users
FULL FEATURED
RAPID LAUNCH
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MIDCORE
GAMES
HARDCORE
GAMES
CASUAL
GAMES
C O M P E T I T I V E A D VA N TA G EBarriers to Entry
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• Zero paid marketing to acquire game’s first 100k players
(replaces market CPIs of $3-$5)
• Publishing opportunities
• Top search placement
• Ability to move games up the leaderboards
• Seven “Best New Games”
• Potential appstore placement for all full-featured games
• Mobile gaming is a live ops business
• Player analytics, attribution, and ad optimization are all crucial
• Cross Promotion System
• App Store Optimization
• Platform Relationships
• Data Analytics
180 Games
300,000+ Daily Installs
9m MAU
160mInstalls
P L AY E R & G A M E M E T R I C SRobust Network Growth
M e t r i c s a s o f Q 4 2 0 1 5 :
· 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 2015
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R A P I D L A U N C H D I V I S I O NCritical Mass Across Six Genres
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F U L L F E AT U R E D G A M E P I P E L I N ENine Announced Launches for 2016
Q1 2016 Q2 2016 Q3 2016 Q4 2016
Major motion picture based game.
To be announced.
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F U L L F E AT U R E D G A M E P I P E L I N EVideo Poker VIP (with Multiplayer Mode)
B e s t I n C l a s s V i d e o P o k e r
· 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. 2015 16
F U L L F E AT U R E D G A M E P I P E L I N EPublishing Deal: Big Sport Fishing 2
S e q u e l t o H i t F i s h i n g G a m e
· 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
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F U L L F E AT U R E D G A M E P I P E L I N EROCKY
G a m e B a s e d o n t h e L e g e n d a r y F r a n c h i s e
· 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 2016
F U L L F E AT U R E D G A M E P I P E L I N ECombo Quest 2
S e q u e l t o H i t C Q 1
· 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 monetiza-
tion and retention built into the game from the
ground up
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F U L L F E AT U R E D G A M E P I P E L I N EMiss the Moose
U n i q u e Q u i c k - F i x G a m e
· Quick-fix games have mass appeal and significant
ad revenue potential, with relatively small down-
side 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
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A C Q U I S I T I O N S & P U B L I S H I N GIndustry Fragmentation Creates Large Growth Opportunity
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• 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
F U T U R E O P P O R T U N I T I E SApple 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
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In 2016, virtual reality is expected to generate
$6.7 billion in revenue and increase tenfold
by 2020. Gaming will be one of the key
categories on VR
T E A M B I O SManagement
IIYA NIKOLAYEV - Chief Executive OfficerCo-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.
GEORGI DARAKEV - CTO - Full Featured GamesLed 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 DirectorOver 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.
KHURRAM SAMAD - CTO - Rapid Launch GamesFounded 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.
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ANDREW MERKATZ - President/CFOAn 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.
TEYMOUR FARMAN-FARMAIAN - Independent DirectorTeymour Farman-Farmaian 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.
R E V E N U E
O P. I N C O M E ( L O S S )
N E T I N C O M E ( L O S S )
A D J U S T E D E B I T D A*
C A S H
T O TA L A S S E T S
T O TA L L I A B I L I T I E S
S T O C K H O L D E R S ’ E Q U I T Y
6 mo. (inception)DEC 31, 2013
(audited)
$1,755,369
(254,118)
(875,541)
373,187
1,792,224
3,490,683
667,663
3,490,683
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12 monthsDEC 31, 2014
(audited)
9 monthsSEP 30, 2015(unaudited)
$943,449
24,447
7,892
101,762
121,740
1,569,712
390,206
406,007
$130,980
(17,807)
(17,807)
2,320
12,418
64,254
42,561
21,693
1 1
1 Unaudited
F I N A N C I A L H I G H L I G H T S2015 Audited Results Scheduled for March 2016 Release
* See Adjusted EBITDA footnote on following page.
*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 accor-dance 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 http://www.otcmarkets.com/stock/TAPM/news.
R E V E N U E & A D J U S T E D E B I T D AInvesting In Measured Growth
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K E Y FA C T S
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) $17.1mm
Float (12/31/15) 8.1mm shares
Insider Ownership (12/31/15) 66.9%
OTHERPersonnel 52 (including contract employees)
Fiscal Year Ends 12/31
Website Tapinator.com
Corporate HQ New York, NY
Legal Quick Law Group
Auditor Liggett, Vogt & Webb, P.A.
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T H A N K Y O U
For more information and a copy of our presentation, go to: http://tapinator.com/investors
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