An Emerging Mobile Gaming Leader
Ticker: TAPM
JULY 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 “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
FORWARD LOOKING STATEMENTS
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W H AT W E D OAn Emerging Mobile Gaming Leader
We Design, Develop,
& Publish Mobile
Games for the iOS,
Android, and Amazon
platforms.
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S N A P S H O TAn Emerging Mobile Gaming Leader
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• Our portfolio consists of more than 244 owned and operated mobile gaming titles with over 267mm cumulative 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 and licensed “Full-Featured Games” which have higher development costs yet greater upside
• Game genres include Parking, Driving/Stunts, Simulation, Shooting, Arcade, Role Playing, Social Casino, and Sports
• We generate revenues through the sale of: (i) advertisements within our games, (ii) paid downloadable games, and (iii) additional in-game content
• Our revenues and adjusted EBITDA for 2015 were $2.4mm and $522k, respectively, and we have provided guidance for 2016 of revenues between $4.0 - $4.5mm, with adjusted EBITDA margins of $1.0 - $1.1mm
• We are listed on the OTC Markets and our market capitalization is approximately $12.0mm
• As of March 31, 2016, our total debt was $2.2mm and cash was $1.5mm
• We are based in New York City and have 52 employees and contractors
I N V E S T M E N T H I G H L I G H T SAn Emerging Mobile Gaming Leader
• Large and growing total addressable market - mobile games & mobile advertising
• Diversified portfolio of 244+ 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
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, both independent research universities in Pakistan.
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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 DirectorWas 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.
T W O M A R K E T S : M O B I L E G A M I N G & M O B I L E A D V E R T I S I N GMobile Gaming Revenue to Grow From $34.8B in 2015 to $74.6B in 2020
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T W O M A R K E T S : M O B I L E G A M I N G & M O B I L E A D V E R T I S I N GMobile Advertising Revenue Projected to Grow From $101B in 2016 to $166B in 2018
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D U A L G A M E T Y P E S T R AT E G YMaximizing Risk Adjusted Returns on Investment of Game Portfolio
Tw o D i v i s i o n s
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RAPID-LAUNCH GAMES FULL-FEATURED GAMESRange of game development time 1 to 3 months 3 to 12 monthsLaunch frequency 20 to 30 per quarter 1 to 2 per quarterTarget lifetime game dev cost $5k to $10k $50k to $500kNumber of games launched in 2015 89 6Technology Unity, MoPub, GameAnalytics Unity, MoPub, GameAnalytics
Adjust, GameSparksGame genres Parking, Driving/Stunts, Simulation,
ShootingArcade, Casino, Sports, RPG
Branded license partners NA MGM, Discovery ChannelTarget contribution margin 70% 33% (25% to 40%)Target average life 18 to 36 months 36 to 60 monthsRisk level Low ModerateTarget lifetime revenue per game $30k ($10k to $400k+) $1.5M ($100k to $4M+)Monetization method Ads, In-Game Content, Paid Downloads In-Game Content, Advertising% of 2015 revenues 93% 7%% of 2016 revenues (est.) 65% to 75% 25% to 35%
R A P I D - L A U N C H G A M E SHigh Volume, Low Cost, Predictable Returns
• Low cost development platform
• Cross game promotion replaces traditional user acquisition cost
• Over 240 games, 60+ of which have achieved 1 million+ downloads
• 75% of our games older than 180 days are profitable
*Historical data from 201 Rapid-Launch games from 7/1/13 through 3/31/16.
*Figures include projected data over estimated remaining life. 9
Average Development
Cost per Game*
Average ROI per Game*
$6.5K 3.4x$22.3K
Average Contribution Margin
per Game*
R A P I D - L A U N C H G A M E SHigh Volume, Low Cost, Predictable Returns
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PParking Animal SimsDriving ShootingStunts Career Sims
F U L L - F E AT U R E D G A M E SLow Volume, Higher Cost, Higher Absolute Returns
Product Focus:
• Unique game play
• Differentiated product vision
• Build unique IP or selectively license studio IP
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Avg. Target Development
Cost per Game
Avg. Target
ROI per Game
$200K 2.5x$500k
Avg. Target Contribution
Margin per Game
Seek out Selective Publishing deals which leverage:
• Promotional power of large installed base
• Best in class monetization techniques
• Relationships with platform operators
F U L L - F E AT U R E D G A M E SLow Volume, Higher Cost, Higher Absolute Returns
I lya NikolayevCEO
Interviewed on TheStreetDec 1, 2015
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• We have launched twelve full-featured games
• Nine were Featured as Best New Games.
• Seven reached the Top 50 in Games
• We have evolved our full-featured strategy
over the last six months to shift from quick-fix
arcade games to products with: (i) in-depth
content (ii) high retention and (iii) best-in-
class monetization techniques
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
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To Be Announced
*June 30, 2016
M U LT I P L E R E V E N U E S O U R C E SAdvertising, Paid Downloads, & In-App Purchases
Current: 80% of Revenue
24 Month Target: 50% of Revenue
Current: 20% of Revenue
24 Month Target: 50% of Revenue
AdsApp Store Purchases
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(Paid Downloads + IAPs)
M O N E T I Z AT I O N B E S T P R A C T I C E SOur 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
M O N E T I Z AT I O N B E S T P R A C T I C E S Our In-App Purchases Enhance Gameplay
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2
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O P E R AT I O N A L E X C E L L E N C E Creating Barriers 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
• Nine “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
244+ Games
600,000+ Daily Installs
18m+ MAU
267m+Installs
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 2 2 0 1 6 :
· Average DAUs – 1,100,000; up 127% year-over-year
· Average MAUs – 18.3 million; up 136% year-over-year
· Average New Daily Downloads – 629,000; up 78% year-over-year
· Cumulative Downloads – 267 million as of June 30, 2016; up 175% year-over-year
· Game Library – 244 active titles as of June 30, 2016; up from 128 year-over-year
· Game Concentration – Diverse portfolio with no single game accounting for more than 12%
of total revenues during the last 12 months
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F U T U R E O P P O R T U N I T I E SPublishing, New Platforms, M&A and Geographic Expansion
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• Explore publishing transactions that leverage our net-
work, platform relationships, and operational excellence
• Extend game library to new platforms including VR,
Windows Mobile, Facebook, Apple TV, Apple Watch,
and others
• We regularly pursue accretive acquitions within ever-
green areas such as social casino
• Extend game IP that is successful in Western markets
to select, high-growth international markets, including
Asia and MENA
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
M o b i l e G a m i n g P u b l i c C o m p s
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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
$2,448,051
(893,718)
(1,924,008)
522,892
1,487,196
2,837,097
1,080,043
1,757,054
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12 monthsDEC 31, 2014
(audited)
12 monthsDEC 31, 2015
(audited)
$943,449
24,447
7,892
101,762
121,740
1,569,712
390,206
406,007
F I N A N C I A L H I G H L I G H T S
* Unaudited. See Adjusted EBITDA footnote on following page.
3 monthsMAR 31, 2016
(unaudited)
$848,613
6,893
(402,820)
220,510
1,489,770
2,752,637
1,426,904
1,325,733
*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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2 0 1 6 F i r s t Q u a r t e r R e s u l t s a n d 2 0 1 6 G u i d a n c eInvesting In Measured Growth
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* Q1 2016 quarterly revenue of $848,613; up 106% year-over-year
* Q1 2016 quarterly Adjusted EBITDA of $220,510; up 97% year-over-year
* $1.49 million in cash and cash equivalents as of March 31, 2016
* 2016 Revenue Guidance: $4.0 million - $4.5 million
* 2016 Operating Income Guidance: Breakeven
* 2016 Adjusted EBITDA Guidance: $1.0 million - $1.1 million (24%)
Use the link below to access complete Q1 2016 earnings release:
http://bit.ly/29x5JYb
* See Adjusted EBITDA footnote on previous page 24
K E Y FA C T S
SHARE STATISTICS
Trading Symbol (OTC) TAPM
Stock Price (07/01/16) $0.22
Shares Outstanding (03/31/16) 57.0mm
30d Avg. Volume (07/01/16) 53,683
Market Cap (07/01/16) $12.5mm
Float (03/31/16) 8.5mm shares
Insider Ownership (03/31/16) 66.9%
OTHERPersonnel 52
Fiscal Year Ends 12/31
Website Tapinator.com
Corporate HQ New York, NY
Legal Quick Law Group
Auditor Liggett & 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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