1. finance
2. accounting and auditing

2014 Annual General Meeting
November 25, 2014
Tony Busseri, Chief Executive Officer
This presentation may contain statements that are not current or historical factual statements that may constitute
forward-looking statements. These statements are based on certain factors and assumptions, including, expected
financial performance, business prospects, technological developments, and development activities and like
matters. While Route1 Inc. (“Route1” or the “Company”) considers these factors and assumptions to be reasonable,
based on information currently available, they may prove to be incorrect. These statements involve risks and
uncertainties, including but not limited to the risk factors described in reporting documents filed by the Company.
Actual results could differ materially from those projected as a result of these risks and should not be relied upon as
a prediction of future events. The Company undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of
unanticipated events, except as required by law. Estimates used in this presentation are from Company sources.
© Route1 Inc., 2014. All rights reserved. Route1, the Route1 and shield design Logo, SECURING THE DIGITAL WORLD,
Mobi, MobiSecure, MobiLINK, Route1 MobiKEY, Route1 MobiVDI, MobiKEY, MobiKEY IBAD, DEFIMNET, MobiNET, Route1
MobiNET, TruOFFICE, TruFLASH, TruOFFICE VDI, MobiKEY Fusion, MobiNET Aggregation Gateway, MobiNET Switching
Array, MobiNET Secure Gateway, EnterpriseLIVE, EnterpriseLIVE Virtualization Orchestrator, MobiNET Agent,
MobiKEY Classic and MobiKEY Classic 2, are either registered trademarks or trademarks of Route1 Inc. in the United
States and/or Canada. All other trademarks and trade names are the property of their respective owners. The
DEFIMNET and MobiNET platforms, and the MobiKEY, MobiKEY Classic, MobiKEY Classic 2 and MobiKEY Fusion devices
are protected by copyright, international treaties, and various patents, including Route1’s U.S. Patents 7,814,216
and 7,739,726, Canadian Patent 2,578,053, and other patents pending. The MobiKEY Classic 2 is also protected by
U.S. Patents 6,748,541 and 6,763,399, and European Patent 1001329 of Aladdin Knowledge Systems Ltd. and used
under license. Other patents are registered or pending in various countries around the world. Other product and
company names mentioned herein may be trademarks of their respective companies.
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The Market and Route1’s Positioning
Vertical
•
Secure, enterprise mobility.
Problem Statement
•
Employees, remote workers and contractors demand access to their workspace from
anywhere, from any device.
•
Unlocking these productivity gains can dramatically increase the organization’s
exposure to security threats & the risk of network breaches.
•
At the same time IT professionals are being asked to support mobility and BYOD
initiatives on tightening budgets.
Market’s Current Response
•
Real and material disconnect between what seems as an obvious issue – security of
enterprise data - and the actions being taken, with select exceptions.
3
The Market and Route1’s Positioning
Route1’s Current Niche
•
Security conscious organizations.
•
Users that need to access a full desktop.
2015 Security Trends
(websense SECURITY LABS – 2015 Security Predictions)
1.
Healthcare will see a substantial increase of data stealing attack campaigns.
2.
Attacks on the Internet of Things will focus on business use cases, not consumer
products.
3.
Credit card thieves will morph into information dealers.
4.
Authentication consolidation on the phone will trigger data-specific exploits, but not
for stealing data on the phone.
5.
New vulnerabilities will emerge from decades-old source code.
Our Next Move
•
Expand “use cases” through evolving and leveraging components of our technology.
4
Operational Execution Trends
Number of Paid, Active Users
ARPU
5
MobiKEY User Growth Will Come From
•
We continue to invest in building out our business development (BD) team.
–
Dedicated personnel include Brian Brunetti, Jerry Iwanski, Daron Dabney and
Alicja Kotarska.
• We brought back our original CTO in a technical BD capacity.
–
Strategic contractors in the U.S., Canada and the U.K.
•
We are active in select conferences & other strategic marketing initiatives.
•
Continued growth from accounts within the U.S. Department of Defense.
–
Leverage U.S. government reciprocity rules and the installed accredited
infrastructure to grow the number of proof of concepts within the U.S.
Department of Defense (DOD).
–
Route1 expects that as it continues to work towards closing large, enterprise
deals, there will also be smaller account purchases from DOD components that
will drive increased subscription revenue.
6
MobiKEY User Growth Will Come From
•
•
•
Growth in the U.S. Department of the Navy (DON) account.
–
Contracting issue related to the customer’s transition to a next generation
program holding up user growth.
–
Route1 expects that in late Q4 2014 or early Q1 2015, the contracting issue will be
resolved.
U.S. Civilian Department growth.
–
Working to find a path forward with the Department of Interior.
–
New use cases with U.S. Customs and Border Protection.
Penetrate one or more departments of the Canadian government.
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Product
Development
Roadmap
Release
Attributes
Month
MobiKEY 4.45
Secure remote scanning
Dec
MobiKEY 4.5
Bug fixes, Mac OS X audio
support, improved driver and
Mac OS X Yosemite support
Jan
MobiKEY for iOS 4.5
Bug fixes, improved UX
Feb
MobiKEY for Android 4.6
Android OS support
Feb
MobiKEY 4.6
Scaling, remote multi-monitor
support, secure storage, bug
fixes
Jun
Q4 14 Q1 15 Q2 15
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Operating
Results
2014
Quarterly Operating Performance
In CAD $000s
YTD A
2014
Q3 A
2014
Q2 A
2014
Q1 A
2014
Revenue
4,592
1,432
1,404
1,756
Gross Margin
3,689
1,110
1,174
1,406
Operating expenses
3,174
1,089
1,148
937
Operating Income before SBC
515
21
26
469
EBITDA
794
110
120
564
Net Income
616
210
(34)
439
11
Annual Operating Performance
In CAD $000s
FY 13
Audited
FY 12
Audited
FY 11
Audited
FY 10
Audited
FY 09
Audited
Revenue
5,433
9,050
5,456
5,370
5,209
Gross Margin
4,296
7,488
4,461
4,698
3,416
Operating expenses
4,485
4,750
5,852
4,984
5,863
Operating Income before SBC
(189)
2,738
(1,391)
(286)
(2,447)
72
2,918
(1,226)
(180)
(2,326)
(343)
2,158
(1,911)
(2,095)
(3,409)
EBITDA
Net Income
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Balance Sheet
In 000s of CAD Dollars
Sep 30
2014
Jun 30
2014
Mar 31
2014
Dec 31
2013
Sep 30
2013
Cash
2,601
3,595
332
700
1,428
Total current assets
3,349
4,367
3,058
1,588
2,541
Total current liabilities
2,870
3,992
2,629
1,715
2,687
Net working capital
479
375
429
(127)
(146)
Fixed and intangible assets
580
640
720
799
824
4,095
5,085
3,778
2,387
3,365
0
0
0
0
0
2,940
4,085
2,770
1,854
2,824
Total assets
Bank debt
Total liabilities
Company Confidential
13
Securities Outstanding
Security
Number Outstanding
Common Shares as at Nov 21, 2014
376,775,914
Stock Options as at Nov 21, 2014
29,124,000
15 cents Warrants - Expire
February 25, 2015
38,000,000
Number Available
8,500,341
NCIB
• Purchased 2,045,000 shares during Q3, 2014 for $82k
• Purchased a total of 5,234,000 shares as at November 21, 2014 for $209k
14
Thank You.
Tony Busseri
Chief Executive Officer
[email protected]
(416) 814-2635
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