Ackroo Inc. - TSX Venture: AKR OTC Pink: AKRFF

Ackroo Inc. - TSX Venture: AKR OTC Pink: AKRFF
Ackroo Inc.
                        TSX Venture: AKR
                        OTC Pink: AKRFF

                        JANUARY 2020


Copyright 2020 Ackroo Inc. All rights reserved.
Ackroo Inc. - TSX Venture: AKR OTC Pink: AKRFF
ACKROO INC. DISCLAIMER

                 Certain written and oral statements included in this presentation may constitute “forward-looking information” which reflect the
                 current expectations of Ackroo. This information reflects Ackroo’s current beliefs with respect to future events and are based on
                 information currently available to management. Forward-looking information involves significant known and unknown risks,
                 uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different
                 from any future results, performance or achievements that may be expressed or implied by such forward-looking information.
                 Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking
                 information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied
                 by the forward-looking information contained in this presentation. Although forward-looking information contained in this
                 presentation is based upon what Ackroo believes to be reasonable assumptions, management cannot assure Users that actual
                 results, performance or achievements will be consistent with this forward-looking information and cautions that undue reliance
                 should not be placed on the forward-looking information. The forward-looking information is made as of the date of this
                 presentation and Ackroo does not assume any obligation to update or revise it to reflect new events or circumstances, except as
                 required by law.




Copyright 2020 Ackroo Inc. All rights reserved.                                 2
Ackroo Inc. - TSX Venture: AKR OTC Pink: AKRFF
What we do

     Our Vision
     To simplify, consolidate and improve the merchant marketing and payments landscape


     Our Mission
     To help Automotive, Petroleum, Hospitality and Retail merchants of all sizes
     attract, retain and grow their customers and their revenues


                                            Loyalty   Marketing   Gift Cards   Payments
     Our Solution
     ▪ An easy to use, self-serve marketing platform that manages important currencies
       including loyalty, gift card, promotions and payment.
     ▪ An open solution that integrates seamlessly into a merchants point-of-sale environment
       or customer engagement application
     ▪ A product that provides merchants with key insights and tools to help shift, lift, retain,
       and engage their customers
     ▪ An in-store and online solution that will continue to evolve through product and
       industry consolidation
Copyright 2020 Ackroo Inc. All rights reserved.                   3
Ackroo Inc. - TSX Venture: AKR OTC Pink: AKRFF
Our Results – Revenue



  Annual Revenue                                                                            Revenue Data
 $6,000,000                                                                                 Fiscal Year    Amount      +/-%

                                                                                            2012           $681,142    N/A
 $5,000,000
                                                                                            2013          $1,284,016   89%
 $4,000,000
                                                                                            2014          $1,328,166   3%

 $3,000,000                                                                                 2015          $1,822,224   37%

                                                                                            2016          $2,224,165   22%
 $2,000,000
                                                                                            2017          $2,737,830   23%
 $1,000,000
                                                                                            2018          $4,435,019   62%

             $0                                                                             2019          $5,227,429   18%
                     2012       2013      2014    2015   2016   2017   2018   2019   2020
                                                                                            2020*            TBD       X%




Copyright 2020 Ackroo Inc. All rights reserved.                                4
Our Results - EBITDA



  Annual EBITDA                                                                         EBITDA Data
  $1,000,000                                                                            Fiscal Year   Amount         +/-%
    $500,000
                                                                                        2012          - $3,421,920     N/A
              $0
                       2012       2013        2014   2015   2016   2017   2018   2019   2013          - $2,509,484     27%
   -$500,000

 -$1,000,000                                                                            2014          - $1,608,162     36%
 -$1,500,000
                                                                                        2015           - $853,021      47%
 -$2,000,000
                                                                                        2016           - $607,466      29%
 -$2,500,000

 -$3,000,000                                                                            2017           - $502,315      17%
 -$3,500,000
                                                                                        2018           + $332,176      N/A
 -$4,000,000
                                                                                        2019* (TBD)       +$X          X%




Copyright 2020 Ackroo Inc. All rights reserved.                             5
Financial Highlights

       Proven Execution

                          36% Revenue                 EBITDA Positive           60% EBITDA
             ✓             CAGR Since             ✓     as of 2018        ✓   CAGR since 2018
                            Founded



                           80% + Gross                 Closed 7 M&A           96% + Retention
             ✓               Margins
                                                  ✓        deals          ✓        Rate




                       11-1 Organic CAC               4-1 Inorganic CAC       $200k + Revenue
             ✓           to LTV Ratio             ✓      to LTV Ratio     ✓    per employee



                            14% net                      Cash Flow
             ✓           margin/EBITDA            ✓   Positive as of Q2   ✓   75% + of Revenue
                                                                                 Recurring
                          and growing                       2019




Copyright 2020 Ackroo Inc. All rights reserved.                6
Our Story – Major Milestones


                                                                                       •Specialization into Auto,     •TBD
                                                                •Acquired OnTab, D1     Petro, Hosp & Retail
                                    •Steve Levely becomes        Mobile & Loyalint     •First EBITDA positive
•Founded & began                     CEO                        •Added 3rd Channel      year
 trading on the
 TSX-V
                                    •Added 2nd Channel           Partner                                              2020
                                     Partner
•Added 1st Primary                  •10-1 Share consolidation                                 2018
 Channel Partner
                                                                      2016
                                              2014
        2012
                                                                                                              2019
                                                                                      2017
                                                                                                           •Acquired IQ 724
                                                          2015                  •Integrated many POS       •Launched 1st self
                       2013                                                      solutions                  serve signup
                                                                                                            product w/ Clover
                                                  •Acquired PhotoGIFTCARD &     •Acquired
                                                                                 KESM/LoyalMark            •Added AckrooPAY
                                                   Dealer Rewards
    •Rebuilt Ackroo technology
    •Defined commercial model

Copyright 2020 Ackroo Inc. All rights reserved.                            7
Share Structure & Ownership


                    Shares
                                                  • 77 million                         Insiders &
                  Outstanding1                                                                           • Approx. 50%
                                                                                      Management


                      Options
                                                  • 6.7 million
                     Granted 2
                                                                                   Top 15 Shareholders   • Approx. 70%


                    Warrants3                     • 10.4million



                                                                                      Options Pool       • 10 % of i/o
                  Market         Cap4             • C$13 million


             1.   As of Jan 17th 2020
             2.   Average weighted options strike price is $0.136
             3.   Strike is $0.10 for 10,375,364 warrants expiring July 2022
             4.   As of Jan 17th 2020


Copyright 2020 Ackroo Inc. All rights reserved.                                8
Industry Comparables

  Market Cap                                                                Trending Annualized Revenues
  $4,000M                                                     $3,600M       $140M
                                                                                                                       $118M
                                                                            $120M
  $3,000M                                                                   $100M
                                                                             $80M
  $2,000M
                                                                             $60M
  $1,000M                                                                    $40M
                                         $60M         $39M                   $20M    $6M         $3M          $4M
                       $14M
        $0M                                                                   $0M
                       AKR.V             OSS.V        ALY.V   LSPD.TO                AKR.V      OSS.V        ALY.V    LSPD.TO
  Revenue Multiple                                                          Estimated YOY Growth Rate
  35x                                                                       150%
                                                               30x
  30x                                                                                           115%
  25x                                                                       100%
                                      20x
  20x                                                                                                                   58%
  15x                                                                       50%
                                                     10x                            18%
  10x
   5x             2x                                                         0%
   0x                                                                               AKR.V       OSS.V        ALY.V    LSPD.TO
               AKR.V                OSS.V            ALY.V    LSPD.TO       -50%                             -20%
             AKR = Ackroo                    OSS = OneSoft Solutions    ALY = AnalytixInsight           LSPD = Lightspeed POS

     (Data as of Jan 17th 2020)                   Ackroo is the ONLY EBITDA Positive Company
Copyright 2020 Ackroo Inc. All rights reserved.                         9
Market Positioning


         Industry Ecosystem                              Ackroo Today                            Ackroo Future




         Gift/Loyalty              Payment            Gift/Loyalty        Marketing          Gift/Loyalty   Marketing



          Marketing                  P.O.S.                                                     TBD          Payments
                                                               Payments




  Companies within all 4 areas are                Ackroo is differentiated today by    Ackroo will continue to differentiate
    partnering, competing and                      providing expanded marketing       in the future by expanding into other
          consolidating                               and payments services            aspects of the industry’s ecosystem




Copyright 2020 Ackroo Inc. All rights reserved.                      10
Addressable Market


               The North American Gift Card & Loyalty market is estimated at $180B
                                                         Estimated 20% CAGR


                                            Ackroo’s current % penetration of the CDN & US Market
                        25.0%

                        20.0%

                        15.0%

                        10.0%

                         5.0%

                         0.0%
                                            Automotive     Petroleum             Hospitality   Retail
                                                            CDN Market      US Market



                                                   SIGNIFICANT ROOM FOR GROWTH

Copyright 2020 Ackroo Inc. All rights reserved.                        11
How we do it

    We provide a closed loop in-store and online automated marketing solution




        Process gift card, loyalty &                             Provide merchants with          Allow consumers to access
       promotional transactions at                              important administrative        and manage their gift card &
             the point-of-sale                                     and marketing data                 loyalty accounts


    We also provide additional services to help our clients grow




                                                    Distribution             Marketing      Email Marketing       Payments
                                                  Help merchants sell    Digital and physical                     Credit & Debit
                                                   their gift cards at   marketing services                        Transaction
          Gift Card Mall
                                                     other retailers     to maximize results                        processing
                                                                                                    Direct Mail

Copyright 2020 Ackroo Inc. All rights reserved.                             12
Client Benefits


                                                      Other Ackroo platform benefits for merchants
                      Loyalty protects margin,
                      attracts customers, creates
                      lift and drives behavior        ✓   Removes manual labor, fraud and theft from paper
                                                          based options
                      Marketing platforms provide
                      key insights and actionable
                                                      ✓   Centralizes data and reporting for gift card and
                      tools to drive results
                                                          loyalty programs
                                                      ✓   Enhances their customers experience
                      Gift cards increase merchant
                      revenues and cash flow          ✓   Provides a self-serve platform allowing for swift
                                                          changes to marketing strategy & admin setup

                       Payment Processing is a        ✓   Provides a centralized solution for all primary
                       necessary service needed for
                       all merchant types
                                                          merchant currencies
                                                      ✓   Provides significant cost savings for debit and credit
                                                          card processing
Copyright 2020 Ackroo Inc. All rights reserved.                13
Some of our Clients

Large/Enterprise Merchants:




Medium Sized Merchants:




Small Sized Merchants:




                           ACKROO SUPPORTS OVER 4,600 CLIENT LOCATIONS AND GROWING
Copyright 2020 Ackroo Inc. All rights reserved.       14
Some of our Partners




Copyright 2020 Ackroo Inc. All rights reserved.   15
Business Model

                  Monthly                             Other                               One Time                        Marketing
                Subscription                       Subscription                       Services Revenue                 Services Revenue
               Revenue (MRR)                      Revenue (MRR)                             (OTR)                            (OTR)

                   •Platform access,               •Payment &                           •Platform setup,                  •Cards + collateral
                    development &                   specialty services                   design & custom                  •E-mail & direct Mail
                    support                         commissions                          development                       marketing



  Company Business Metrics                                                 2019                                      Description
  MRR to OTR Ratio                                                       77% | 23 %                            Fixed vs. Variable Revenue
  Average MRR per location per month                                        $84                               Monthly Recurring Revenue
  Average OTR per location per month                                        $22                               Monthly One Time Revenue
  Average TR per location per month                                        $106                                 Monthly Total Revenue

  Average initial up front fees per location                              $1,257                             Setup, Collateral, Custom Dev

  Approximate LTV (7 year min)                                            $10,918                            Initial setup + TR x 84 months

  Average CAC (Organic)                                                    $975                            Sales, Marketing and Channel costs

  RPE (29 staff)                                                         $207,000                               Revenue Per Employee

  Retention                                                                96%+                            Lost locations % by total locations
  Organic Closing Ratio                                                     35%                                Inbound & Channel leads
  Locations                                                               4,700 +                              Active customer locations

Copyright 2020 Ackroo Inc. All rights reserved.                               16
Organic Growth


                   Approach                                          Product                      Geography



           Cross Sell
           Customers
                                 Specialization               Expand         Increase
                                                              Product        # of POS
                                                                                               CDN              US
                                                                                             Expansion       Expansion
            Product
                                 Sales Channel
            Partners
                                                                     Expand
                                                                     Services


                                                  PS
                                  MS                   Product = Self Serve SMB + Business   Via new partners + offerings
                           Loyalty                        Intelligence (BI) Advancement
                      Promo                              Services = Marketing + Payment
            E-Gift
     Gift



Copyright 2020 Ackroo Inc. All rights reserved.                         17
Inorganic Growth Strategy

    Past Inorganic Growth
                                   Photo               Dealer Rewards     OnTab         D1              Loyalint       KESM        IQ 724
                                 GIFTCARD                                              Mobile                        LoyalMark

    Revenue                           2.5x                   2x             N/A           1x              2x            1.5x        1.5x
    Multiple Paid
    Structure                    100% stock            80% cash | 20%    Consulting      100%       80% cash | 20%   10% cash |   100% cash
                                                           stock            Ag           stock          stock        90% stock
    Customers                        900 +                  107            None          100 +       138 locations    2,400 +       400 +
    locations added
    Annual Revenues                  $60k                  $900k           None          $100k          $230k          $1.8M       $1.9M

    Integration Time              3 months               24 months       6 months      5 months        8 months      18 months      TBD




       Go forward strategy


         Acquire 1 -2 Per                           Focus on            Add customers,            40%+ of rev adds      Expand solution
              Year                                Debt/Earn-outs         tech + talent               to EBITDA             & reach




Copyright 2020 Ackroo Inc. All rights reserved.                                   18
Direct Competition


                      Merchants                   Gift Card           Loyalty
                       Large
                           SMB




              •   North American
              •   Many small and large players with specific niches
              •   Ackroo covers all 4 quadrants
              •   Ackroo is helping to consolidate this marketplace


Copyright 2020 Ackroo Inc. All rights reserved.               19
How we differentiate today



         FOCUS:                                   Loyalty marketing, gift card and payments for all merchants

         PARTNERSHIPS:                            Deeply integrated selected strategic partners

         PLATFORM:                                Latest technology-UI/ arch, developer friendly, self-serve

         AFFORDABILITY &                          Priced for all sizes with no hidden costs
         TRANSPARENCY:

         GO TO MARKET:                            Specialization, channel approach + market consolidation

         OTHER SERVICES:                          Distribution, marketing and payment services

         PUBLIC CURRENCY:                         Access to growth capital & liquidity draws interest for M&A




Copyright 2020 Ackroo Inc. All rights reserved.                      20
Our Team

     Senior Management
     ▪ Steve Levely | CEO
          Sales, Marketing and Executive leadership expertise; Pitney Bowes, Maritz, and Ackroo
     ▪ Derek Schaaf | CFO
          Finance & Executive leadership expertise; CMC Distribution, Great Blue Resorts and Ackroo
     ▪ Ihab Kazem | VP of Product
          Engineering & Product Management expertise; Bridgewater Systems and Ackroo
     Board of Directors
     ▪ Steve Levely | Director
          Sales, Marketing and Executive leadership expertise; Pitney Bowes, Maritz, and Ackroo
     ▪ Sam Cole | Director
          Corporate securities law expertise; ASKD Law and Cassels Brock & Blackwell LLP
     ▪ Wayne O’Connell | Director
          Public and Private accounting expertise; Jones & O’Connell LLP
     ▪ Kristaps Ronka | Director
          Technology founder, investor and executive; AdParlour and Namesilo
     ▪ Jason Donville | Director
          Capital markets research and investment expertise; Cormark Securities and DKAM

Copyright 2020 Ackroo Inc. All rights reserved.          21
Contact Information



     Ackroo Inc.
     Steve Levely
     (416) 360-5619 x730
     slevely@ackroo.com

     HAMILTON OFFICE
     1250 South Service Road, A3-1
     Hamilton, Ontario L8E 5R9

     OTTAWA OFFICE
     62 Steacie Drive, Suite 201
     Ottawa, Ontario K2K 2A9


                                      Simplify, Consolidate & Improve!
Copyright 2020 Ackroo Inc. All rights reserved.      22
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