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America’s Leading Multi-ChannelBill Payment Network
August 2016
Corporate Overview• Over 3 Million Unique End-User Customers per month (~8M/yr)
• Serving the “Cash-Preferred”, Underbanked User Community
• 98%+ Residual/Recurring Revenue
• Recently completed 3rd acquisition in 2 years (Softgate Systems Inc.)which increases TIO’s Revenue to over $100M+ and EBITDA to $15M+
• ~79M Transactions Processed Annually
• Significant portfolio amongst the largest wireless and utility companiesin North America
• Over 69k location endpoints in the US for bill payments at retail
Leading Multi-Channel Billingand Receivables ManagementProcessor In North AmericaProcessing over $9B/year
TIO Networks Corp. (TSVX-TNC)
TIO Facts and Figures(not including Softgate)
Truly national provider of billpay and financial services forunderbanked
Quarterly Revenue(Based on fiscal Q3 2016, TIO’s fiscal year ends July 31, 2016) $17.9MGross Margin %(Based on fiscal Q3, 2016) 49.6%Quarterly Gross profit(based on fiscal Q3 2016) $8.9MQuarterly Adjusted EBITDA(based on fiscal Q3 2016) $2.88M# of over the counter locations 69,000# of Self Service Kiosks serviced 1,200# of Devices owned by TIO 1,000# of TIO consumer accounts (incl CS)(As at April 30, 2016) 1.24M# of billers supported by TIO 9,200# of "expedited" or "same day" billers 700
KIOSKSLeadingfintech in the
self-serve kiosk industryfor over 19 years
Multi-Channel Platform for the Underserved
WALK-IN WEB MOBILE IVR API25,000 bill payment
POS systems & 3000+money order systems
Over 850,000 memberson direct-to-consumer
platform TIO.com
24 native mobileapplication & mobile-
optimizedweb programs
Automating payments inreal-time via interactive
voice response
Connecting hundreds ofpartners to over 69,000
locations across N. America
CHANNELS REPRESENT 20% – 100% OF A BILLER’S RECEIVABLES
Consistent and Accelerating Multi-YearRevenue and Adjusted EBTIDA growth
Source: PI Financial Corp. (forecasts based on PI Financial Corp. estimates)
Increased Scale To Help Drive OperatingLeverage and Free Cash Flow Generation
Source: PI Financial Corp. (forecasts based on PI Financial Corp. estimates)
Revenue & Transactions
Gross Profit & Gross Margin
Net Cash & DebtIn ‘000’s and CA$ April 30, 2016 January 31, 2016 July 31, 2015 July 31, 2014
$ $ $ $Cash (On Hand Or In Transit)Cash and Cash Equivalents 49.20 35.08 31.17 24.16Restricted Cash 6.11 7.37 6.82 5.79Funds to Settle Bill Payment O/S 84.52 75.12 49.42 21.51Funds to Settle Money Orders O/S 15.99 16.62 14.88 10.98
155.82 134.19 102.29 62.44Biller FundsBill Payment Obligations 102.06 85.10 63.79 30.27Money Orders Outstanding 32.82 34.88 32.02 27.14
134.88 119.98 95.81 57.41
Operating Line (United and BofA) 2.51 2.82 2.61 2.18Net cash for use in operations 18.43 11.39 3.86 2.85
Accounts Receivable 1.35 0.97 1.53 0.76Accounts payable and Accrued Liabilities 10.63 7.66 6.62 4.38Net Cash After AR/AP 9.15 4.70 (1.22) (0.77)
Total Current Assets159.48 135.91 104.57 63.79
Total Current Liabilities 149.98 131.08 105.71 64.70Working Capital 9.50 4.83 (1.14) (0.91)
SVB (Current = $1.43M) 7.15Promissory Note(s) 5.18Net Debt 12.33
Fortune 1000 Clients
Retail
Network/Payment System
Biller
Acquired Global Expressin January 2014
• Expanded Biller Catalog
• Expanded Location base in the SouthEastern US, adding 3,000 newlocations
• Strong/experienced team in SilverSpring, MD
Global Express adds the followingstrengths to TIO’s business:
SILVERSPRING,
MD
Acquired ChargeSmart.comfrom VeriFone in August 2014
• $548M TPV processed in the last 12 months
• 851,000 unique members
• ChargeSmart has built a unique riskmanagement system that significantlysuppress chargebacks in CNP environment.
• One-stop shop with wide variety of billers andfrictionless checkout
• Easily create and manage recurring payments
• Rebranded TIO.com in May 2016
Largest non-bank, payment card poweredmulti-purpose bill payment site on the web,allows any card not present (CNP) cardholder topay any bill safely and easily.
• Add USD$37 million in incremental revenue and USD$5 million inincremental EBITDA to TIO’s business
• MSB licenses in 46 states and D.C. (4 states do not require MSBlicenses) allows us to leverage its licenses to operate in 50 states & D.C.
• Independent customer acquisition via its >4,000 direct agent locationnetwork i.e. no dependency on biller relationship
• Softgate operates PayXchange,state of the art proprietary POSsoftware platform for the billpayment marketplace
• Deep bill payments and agentmanagement expertise
TIO Completes Acquisitionof Softgate Systems
Strategically AccretiveAcquisition – with Softgate TIOcreates a powerhouse in theUS non-bank bill payment andreceivables processingmarketplace generating>CAD$100M top line revenueand ~ CAD$15M EBITDA:
The Evolution of the TIO Networks National Footprint
OR
WA
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ID
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MT ND
SD
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OKNM
MN
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MO
WI
IL INOH
VAWV
KY
AR
LAMS AL
NC
SC
FL
MIAK
PR
TN
GA
PA
NY
VTNH
CT
NJ
ME
TX
CA
HI
MA
TIO NETWORKSw/ Regional Coverage
NV
AZ
UTCO
NM
TIO NETWORKSNational Coverage
OR
WA
ID
WY
MT ND
SD
NE
OK
MN
IA
WI
IL
AR
LA
MIAK
PR
GLOBAL EXPRESS
KS MO
IN
VAWV
KY
MS AL
NC
SC
FL
SOFTGATE
OHPA
NY
VT
NH
CT
NJ
ME
MA
ENHANCED TIO + GE/SGSJOINT COVERAGE
TN
GA
TX
CA
How We Make MoneyRevenue Model & Growth Levers
Revenue Model(including 8 days of Softgate)
* Based on Q3.2016 Financial Result
67% 27% 5% 1%
Transaction feespaid by billers.
Convenience feespaid by customers.
Mainly for licenses ofsoftware or hardware.
Fixed monthly fees paid bybillers + MO service revenue.
RecurringMaintenance Revenue
One-TimeRevenue SourcesTransaction Fees
TIO Growth LayersHow does TIO grow?
Virtual
Mobile Solutions Web Solutions
Physical
Kiosk Locations POS Locations
ADD MORE DISTRIBUTION
ADD MORE SERVICES
New Billers Incremental Services
TIO Branded Private BrandedOR
Who We Focus OnDemographic & Market Focus
Demographic Focus
Why?• Large Group (one out of every four
American with GDP ~ $1 Trillion)• Very specific needs ( i.e.: loans/credit,
payments, transfers, prepaid etc.)• An Underserved demographic (most
innovators are focused on traditionallybanked customer)
• TIO has been serving this group forover a decade and understands trends& behavior
“LMI” – Low to Moderate Income
• SKEWS YOUNG and increasing!10.5 million U.S. Millennials household
• NOT ALL LOW INCOME = 22% of $50-75k in HHincome; 14% of income >$75k
• FLUID = moves in and out of fin svcs
Underserved/Underbanked – Big & DiverseApproximately 35 million U.S. households – 68 million adults are financially underserved
Source: 2013 FDIC National Survey of Unbanked and Underbanked Households– Oct 2014
Unbanked9.6 MM, 7.7%
Underbanked24.8 MM,
20%
Banked/Unknown Status89.3 MM, 72.3%
Total Underserved(% of U.S. Households): 28%
Underserved:All consumers within
group by ethnicity
54% Black46% Hispanic42% American Indians20% White20% Asian
Underbanked Market Worth> $138B in US alone in 2014
Source: CFSI 2014 underserved Market Size– Dec 2015
The TIO Cloud • Core Technology Asset = Cloud-based Billing and Payment Processing
• Support For Expedited Payments Is Key Differentiator Compared toPeers
• PCI Certified to Payment Card Industry Data Security Standard
• Two Datacenters: Vancouver, BC and Denver, CO
• Open Architecture Design and API For Ready Connectivity To AnyChannel
• Patented Defensively With One Issued Patent And 4 Pending ProcessPatents
Will ultimately leverage TIO Wallet to supportsophisticated financial products!
Powers TIO Ecosystem…thefirst platform to connectKiosks, POS, Web, Mobile!
Capital Structure
*Based on Aug 3, 2016 market price
SY M B O L
TNC – TSX.V
S H A R E P R I C E
$2.32
M A R K E TC A P I TA L I ZAT I O N
$194.9M CAD
S H A R ESO U T STA N D I N G
84M
I N S I D E ROW N E RS H I P
42%
Key Catalysts • Drive Key “first 100 day” expense synergies from Softgate deal
• Begin process of driving revenue synergies from combination of people,assets, locations and systems
• Drive incremental Organic growth from existing large enterprisecustomers
• Consolidate platform and other services across acquired subjects todrive EBITDA Expansion
• Continued focus on opportunistic and complementary acquisitions
• Continue to ramp up wallet enrolment and value added services drivingincremental monetization
• Devaluation of Canadian Dollar – Drives incremental profitability
The following are key catalystsfor investors to track with TIO:
