intelligent systems investor conference call -...

July 7, 2009 Intelligent Systems Corporation 1

Intelligent Systems Investor Conference Call

July 7, 2009

Review of Operating Companies

ChemFree

CoreCard Software

Rights Offering Summary

Q & A


Forward Looking Statements

In addition to historical information, this presentation may contain forward- looking statements relating to Intelligent Systems Corporation (“ISC”). All statements, trend analyses and other information contained in the following discussion relative to markets for our products and trends in revenue, gross margins and anticipated expense levels, as well as other statements including words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend”, and other similar expressions constitute forward-looking statements. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. All forward-looking statements are based upon information available to ISC on the date of this presentation. A number of the factors that could impact our future operations are discussed in Management’s Discussion and Analysis in Item 7 of our 2008 Form 10-K and in the section titled Risk Factors in the Prospectus dated June 18, 2009.


Rights Offering proceeds will be used primarily to support CoreCard Software growth plans and other general business purposes


The SmartWasher® Bioremediating Parts Washer.

Consumable Fluid and Filters Replenished Monthly+

OzzyMat™

OzzyJuice™

ChemFree Corporation


ChemFree / ISC History

• Two people with idea for cleaning water towers with aqueous-based, non-bioremediating solution

• ChemFree founded – 100% owned by ISC• ISC funded development of technology & start-up

operations• Introduced bioremediation concept for parts washers• ISC & ChemFree management are inventors and co-

inventors on ChemFree patents • ChemFree operations located at ISC HQ in Norcross GA


ChemFree

• Recognized leader & pioneer in bio-remediating parts washer systems

• “Green” solution for cleaning automotive and industrial parts – positive trend

• Established domestic & international distribution; installed base of >25,000 machines

• 11 US and 15 foreign patents issued• Profitable for 5+ years, despite high legal $$


What the SmartWasher® Bioremediation Solution means to customers:

INCREASED EMPLOYEE SAFETYNo exposure to harmful, caustic solvents

REDUCED OPERATING AND MAINTENANCE COSTS

No expensive maintenance or service contracts

REDUCE AIR POLLUTIONNo VOC production

ELIMINATE WORKING WITH HAZARDOUS WASTE No Flash Point No VOC production

Non-toxic Non-caustic

END HAZARDOUS WASTE GENERATIONNo hauling No manifesting

No record keeping No regulatory hassles


ChemFree Customer Mix and Sample Customers

US Distributors

Corporate & Military

Lease Customers

International Distributors


ChemFree CompetitionTraditional solvent-based machines and hazardous waste haulers

Other aqueous based solutions

ChemFree’s SmartWasher® competes based on:Never generates hazardous wastesImproved employee safety & health Bio-remediation cleans better than plain aqueous washersSupports compliance with regulations & trends emphasizing

positive environmental impactReduced air pollution compared to alternativesPatented systemNo long-term service contracts needed


ChemFree Key Revenue Metrics & Trends

SmartWasher® machine sales

Unit sales lower in YTD 2009 vs 2008• end of high volume Cintas rollout in 2008• some impact from economic slowdown • conservative plan for balance of year

Fluid & Filter consumable sales

Increasing component of revenue – > 50% YTD revenueStrong recurring revenue stream tied to installed base Gross margin on supplies higher than GM on machines

Lease revenue PepBoys/Firestone/TiresPlus leases Recurring monthly revenue stream YTD 2009 levels approximate 2008

2009 Outlook~$10M Revenue~$2M EBITDA (excluding legal $)

SmartWasher Machines 24% of revenueFluid & Filter 50%Lease 18% Other 8% Domestic 88% vs International 12%


CoreCard Software the “back-office” software used to process and manage consumer and business accounts associated with:

• Credit cards• Debit cards• Fleet cards• Gift cards• Payroll & benefit cards• Loyalty programs• Short-term, revolving loans• Accounts receivable • … and more

Both Licensed Software +

Processing Services


CoreCard / ISC History1993 ISC acquired majority interest in Credit Card

Software, Inc. (CCS) and changed name to PaySys International

2001 PaySys sold to First Data Corp. for ~$135M;CoreCard spun off prior to sale as new company with 40+ engineers to continue software development

2002 ISC acquired majority ownership in CoreCard

2003 Romania office established

2004 India office established


Deep Experience in Payments Industry

CoreCard’s senior management has distilled lessons learned from 20+ years of conversions & implementations for leading card issuers & processors at PaySys …

VisionPLUSVision21 &

CardPac systems


CoreCard Today140+ employees (25 US, others offshore)Offices in USA, India and Romania Industry & technical expertsSoftware platform and applications provide unique alternative to trends & problems in payments systemsLimited sales & marketing activities/personnel to dateEstablished reference accounts in target marketsExpanding CoreProcessingservices, marketing and infrastructureNot consistently profitable

Offices: Atlanta, India, Romania


CoreCard’s Markets are financial institutions, retailers, marketers & processors that need to keep up with accounts and financial transactions for:

Credit Cards/Accounts: Revolving and non-revolving credit for consumer or business accounts (with or without a physical card)Involve interest, fees, settlement, collections etc. Market includes:

private label cardsfleet managementbank credit / debit cardsaccounts receivableshort term consumer loans

Prepaid Cards/Accounts: Pre-loaded funds drawn down for purchase or cash Typically involve variety of feesNo interest Multiple markets and types:

cross border remittancesgift cardsreward programspayroll & health care paymentssocial security & welfare paymentstransit cardsstore refunds … etc.


Trends Driving Prepaid Card MarketIssuers/sponsors looking for new revenue sources and competitive advantageGrowing # of unbanked and under-banked consumers and employees (22M US households have no bank acct; $500B in PR checks issued annually to unbanked employees) Cross border transfers facilitated at lower cost with prepaid cardGovt. and employers need low cost, secure way to distribute funds to geographically disbursed recipients Consumers consider Prepaid cards safer than cash, better for budgeting and less costly than credit cards


CoreCard’s software platform and applications provide customers in the financial payments markets with:

Faster time to market with new card programs

More efficient processes to reduce credit risk and lower operating costs

Ability to address global opportunities with one system

Flexibility to adapt to trends in consumer financing, payment methods and competition

CoreENGINE / Dashboard

Core DISPUTE

Core ACQUIRE

Core ISSUE

Core COLLECT

Core SALES

Customer Interfaces and Customization


CoreENGINE™ Key Features & Benefits

Real-time posting

Unlimited hierarchies

Linear scalability

Fault tolerance

Localization editor

Runs on Intel-based HW

Embedded rules-based workflow engine

Always current interest, acct. balances, back dating, currency conversions

Enables flexibility, complex authorizations & processing rules, rollups

Software scales with volume growth

Uninterrupted operations

Embedded multilingual & multicurrency supports global operations on 1 system

Lower initial and total cost of ownership vslegacy/mainframe systems

Customize workflows quickly without new programming


Sample Customer Applications Show Complexity & Flexibility of Software

Catalog Retailer Private label, complex A/R and collections for subprime consumer

Consumer Finance

Revolving short-term consumer loans in multi-state jurisdictions

Electronics Retailer

Private label revolving credit with cash advance feature

Fleet Card Issuer/Processor

End-to-end, complex revolving credit program for local and long-haul fleets

PrePaid Card Issuer/Processor

MasterCard branded programs for reloadable prepaid payroll and benefits disbursement

Dental Practice Installment loan financing for patients in 150+ clinic practice management group


CoreProcessing™ ServicesUnique Offering – Outsourced Processing PLUS Licensing Option Using the Same Software.

Customers can:outsource their card processing to CoreCard initiallyretain the control and flexibility of a customized in-house system option to switch to in-house processing using same CoreCard software

and processes be able to graduate consumers from prepaid to credit cards .. and

manage both on the same software system

CoreProcessing™ Services offered in PCI compliant data center: :Configure– We configure our CoreEngine™ platform and CoreApplications for each customer Operate – We manage the customer’s system and provide processing services running the customer’s CoreCard software applicationLicense – Customer can opt to license their customized software for in- house processing.


CoreCard Competition

ProcessorsTypically involve multi-year contracts, no real-time data access, limited mind-share, slow response time to market shifts, high price for small issuers and undifferentiated card programs. For example:. - First Data

- TYSYS- FiServe- Metavente- Galileo

Software VendorsCompetition varies by geography, market served, and functionality.For example:

- Card Tech- RS2 Group- TxVIA- Euronet Worldwide

Broadly categorized as Processors (which provide customers with an outsourced transaction processing solution) or Software Vendors (which offer customers an in-house transaction processing solution).


Sales and MarketingCoreCard’s focus has been on establishing a select number of reference accounts in its target markets

By late 2008, US reference customers for all applications except full bank card implementation

CoreCard has not invested in full-time sales and marketing resources to date

Initial sales have been in response to customer enquiries 2009 plan calls for building marketing/sales team and infrastructure to drive new customer acquisition in US and select international marketsCoreCard has licensed its products direct to customers; may partner with distributor/reps for countries/regions outside the US


CoreCard Revenue SourcesSoftware License Fees

+Professional Services

+Recurring Annual or Monthly Maintenance for License Customers

+Recurring Monthly Fees for CoreProcessing Customers

Outlook Revenue (GAAP) < $5M in 2009 and 2010

May lose/invest up to $1M in 2009 and 2010

Revenue mix and volume varies significantly by quarter – timing of revenue recognition often not under our control


Rights Offering Summary

Record Date June 17, 2009Expiration Date July 17, 2009Basic right - All shareholders have right to buy 1 share for each

share owned on record dateOversubscription right – up to 500,000 additional sharesShare price - $0.70 Proceeds - $1.4M to $3.1MUse - primarily support CoreCard growth plans; other general

business purposesManagement & BOD participationInformation Agent - Morrow & Co. ; telephone 800- 607-0088

The Company has filed a registration statement (including a prospectus) with the SEC for the rights offering. A copy of the prospectus has been sent to each shareholder eligible to participate in the rights offering. Before you invest, you should read the prospectus and other documents the Company has filed with the SEC for more complete information about the Company and the rights offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. The prospectus and other Company SEC Filings are also available on our website at www.intelsys.com.

http://www.sec.gov/

http://www.intelsys.com/

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