Management Presentation

December 2012

FORWARD LOOKING STATEMENTS

• This presentation about API Technologies Corp. (the “Company”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding industry prospects or future results of the business, operations or financial position of API made in this presentation are forward-looking. We use words such as believe, expect, anticipate, intends, estimate, forecast, project, should and similar expressions to identify forward-looking statements. Forward-looking statements are based on management’s current expectations of our near-term results, based on current information available pertaining to us and are inherently uncertain. We wish to caution investors that any forward-looking statements made by or on our behalf are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other risk factors include, but are not limited to: the affect of the unfavorable global, national and local economic results to differ materially from such statements. These uncertainties and other risk factors include, but are not limited to: the affect of the unfavorable global, national and local economic conditions on our customers and our businesses, the affect of the current economic crisis on our ability to effect our business plans and strategies, the changing political conditions in the United States and other countries, governmental laws and regulations, anticipated government budget changes, international trading and export restrictions, customer product acceptance, and access to capital markets, and foreign currency risks. These risks and uncertainties, as well as other risks and uncertainties could cause our actual results to differ significantly from management’s expectations. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We assume no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements we make, whether as a result of new information, future events, or otherwise.

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KEY FACTS

Company: API Technologies Corp.

Exchange/Ticker: NASDAQ: ATNY

Share Price (11/30/12): $2.63

52-Week High / Low: $2.31 / $4.10

Shares O/S Basic/Diluted: 54.8 million / 58.7 million

Market Cap: $144 millionMarket Cap: $144 million

Enterprise Value: $330 million

LTM Revenue (1)(3): $293.1 million

LTM EBITDA(1)(2)(3): $42.8 million

LTM CAPEX(1)(4): $1.6 million

(1) LTM period ending August 31, 2012

(2) $34.1M in cost savings implemented and being realized since Feb. 2011

(3) Includes CMT acquisition, C-MAC, and RTI

(4) Does not include CMT, C-MAC, and RTI

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Note: Company’s fiscal year end is 11/30/12

• Dominant RF/microwave, microelectronics, and

security technology provider in defense and

commercial high-reliability markets

– 90%+ sole/primary source with recurring revenue streams

– Broad portfolio of highly engineered technology products

INVESTMENT HIGHLIGHTS

– Alignment with growth areas of the Defense budget and

within high-reliability industrial markets

• Focus on revenue generation and profitability

– Target of 20% Adjusted EBITDA

– Demonstrated ability to generate cash

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• Provider of RF/microwave, microelectronics, and

security technologies for the

defense, aerospace, and commercial industries

• Founded in 1981; Re-launched the new API with

new vision in 2011

– Significant acquisition activity in 2011

Today, one of the largest “non-prime” provider of

COMPANY OVERVIEW

– Today, one of the largest “non-prime” provider of

RF/Microwave and microelectronics

• 2,200 employees world-wide

• 3,000 customers world-wide

• Revenue breakdown

– 75% Domestic / 25% International

– 60% Defense & Government / 40% Commercial

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RECENT ACQUISITIONS

Founded

1981

• Began as small electronics firm

• Investment by Vintage Capital in January 2011

Acquired

March 2012

UK-based designer and manufacturer of RF and microwave filters,

multiplexers and related products for DoD, industrial, and

commercial aerospace markets

Acquired

March 2012

A leading provider of passive components to audio, defense,

aerospace, and industrial markets

2012

6

March 2012 aerospace, and industrial markets

Acquired

November 2011

Designer and manufacturer of RF and microwave filters,

multiplexers and related products for satellites and

communications

Acquired

June 2011

Leading provider of RF/microwave, EMI filter products, sensors

and power products (NASDAQ: SPEC)

Acquired

January 2011

Electronics Manufacturing Services (EMS) provider for major

government programs

2011

OUR MARKETS & CUSTOMERS

DefenseDefense

48%

• Radar

• Military aircraft

Missile defense

Medical, Industrial & Medical, Industrial &

Commercial AerospaceCommercial Aerospace

17%

• Medical devices

• Commercial air

• Alt. Energy

Commercial & Commercial &

CommunicationsCommunications

23%

• Satellites

• Internet

IT Systems

Government & Government &

SecuritySecurity

12%

• Secure

communications

Secure access

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LTM Ended August 31, 2012

• Missile defense

• SATCOM

• C4ISR

• UAVs

• Alt. Energy

• Downhole

• Transportation

• IT Systems

• Mobile devices

• Secure access

• Encryption

RF/Microwave & Microelectronics

32.6%

Electromagnetic Integrated Solutions (EIS)

18.1% 9.0%

Sensors Products

ATTRACTIVE PRODUCT PORTFOLIO

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Power Solutions

5.9%

Secure Systems &Information Assurance (SSIA)

8.7%

Electronics Manufacturing Services (EMS)

25.7%

LTM-Ended August 31, 2012

• Mission critical technology that safeguards the world’s most highly sensitive environments

• Focus on addressing critical cyber security requirements and emerging mobility needs

• Innovative technology, multiple patents

• End markets

SECURE SYSTEMS & INFORMATION ASSURANCE

OFFERING OVERVIEW

• End markets– 80% Government & Military / 20% Commercial

• Featured customers– Governments of UK, Canada, United States

– U.S. Department of Defense

– NATO Countries

– Fortune 500 Firms

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SSIA PRODUCTS

Secure Communication Secure Networking Encryption

•One of the world’s largest developers of TEMPEST & Emanation Security Solutions

•First business in the UK to be

•Products enable privileged users to access sensitive data and critical systems easily, dynamically, and securely

•Products enable privileged users to interoperate securely across organizational boundaries and untrusted systems

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•First business in the UK to be accredited under the CESG Formal TEMPEST Certification Scheme (CFTCS)

•Designed to process highly sensitive, classified government information

•Marketed under the names SST™ (Europe & NATO) & EMCON® (US and Canada)

securely

•Award-winning products used by both Fortune 500 firms and the U.S. Department of Defense

untrusted systems

•Focused on the creation of dynamic Communities of Interest (COI)

•Also offer fully encrypted line of mobile communication products

Netgard™

Encryption Suite

Secure

Communications Hub

ION™ SA500

Service Access

Point

Secure

USB Hub

WELL POSITIONED SUPPLIER AT

EVERY STAGE OF VALUE CHAIN

En

gin

ee

rin

g

MODULES & IMAS

SUBSYSTEMS

SYSTEMS

Compelling Go-to-Market Strategy

For Top-Line Growth:

• Unified sales strategy harnesses strength of

company’s broad product portfolio

• Opportunities for adjacent sockets

• Leverage long-term relationships and

“Preferred Supplier” status

• API as a trusted “One Stop Shop”

for customers looking to

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ELECTRONICS MANUFACTURING SERVICES: Engineered Build-

to-Print, Cable & Harness, SMT, Mixed Technologies, Box Builds EM

SD

esi

gn

COMPONENTS: Passives & Actives

HYBRIDS

SINGLE-FUNCTION ASSEMBLIES

MULTI-FUNCTION ASSEMBLIESfor customers looking to

streamline supplier base

ATTRACTIVE INDUSTRY DYNAMICS

• Defense electronics are growing at an

annual rate of 3% even with reduced

defense budgets(1)

• Total defense outlays for fiscal 2Q12

grew 5.4%, the highest since fiscal 1Q11

• Investment account spending(2)

(procurement + R&D, test & evaluation)

grew 9.5% year over year(2)

• Cyber security, information assurance, and

(2)

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• Cyber security, information assurance, and

secured systems are cornerstone of

current and future defense and homeland

security platforms

• Non-defense niche applications aligned

with growth markets (medical, alternative

energy, oil and gas, mobile

communications)

(1) The Teal Group

(2) US Treasury Data/KeyBanc Research

• Technology alignment with funded and growth areas of

Defense budget

• Changes in Department of Defense creates opportunities

– Partner with Primes as they consolidate their supply chain

– API is well-positioned as a substantial one-stop-shop

(from components, to subsystems, to Systems)

– Upgrade vs. buy new: Positioned well for defense

STRONG MARKET OUTLOOK FOR API

– Upgrade vs. buy new: Positioned well for defense

refurbishment projects; incumbent supplier with over 40

years of strong successful heritage

• US foreign military sales continues growth with excellent

opportunities for API

• Growth in space end market (4% of total sales and growing)

Large and growing Total Available Market (TAM) & Serviceable

Available Market (SAM) in non-DoD markets offers

diversification

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DIVERSE AND ATTRACTIVE

PROGRAM EXPOSURE• Well balanced: Top DoD/government programs account for

40% of revenue

• LTM revenue for top revenue program 3% of total sales

• Program alignment with DoD funding

• Program concentration in targeted technology areas

Top Programs

Secure CommunicationSecure Communication8.2 %

7.2 %

5.9 %

Military AircraftMilitary Aircraft

C4ISRC4ISR

LTM-Ended August 31, 2012

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Other60%

Top Programs40%

5.9 %

5.5 %

5.1%

4.2 %

3.9%

Missile ProgramsMissile Programs

Jamming/AntiJamming/Anti--JammingJamming

C4ISRC4ISR

Radar ProgramsRadar Programs

Electronic WarfareElectronic Warfare

API’S PRODUCTS ON KEY DOD/GOVERNMENT

PLATFORMS & PROGRAMS

Secure Communication

7.2%

Missile Programs

5.5%

Military Aircraft

8.2%

Jamming/Anti-Jamming

3.9%

C4ISR

5.9%

RadarPrograms

5.1%

ElectronicWarfare

4.2%

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7.2%

Secure communication solutions used by U.S. Government entities and NATO countries

• TEMPEST& Emanation Security

• Rugged/Mobile CommunicationsPlatforms

• Secure Networking• Encryption

LTM-Ended August 31, 2012

5.5%• Standard Missile• Patriot• AEGIS• AMRAAM• APR-39• HTS/HARM• JDAM• LRAS• Maverick• Meads• MK-73• Hellfire• THAAD

8.2%

• Eurofighter Typhoon• Chinook• Seahawk• Shadow• Black Hawk• Osprey• Harrier II• Apache Longbow• F-16 Eagle• F-18 Fighting Falcon• F-22 Raptor• F-35 JSF• Peace Pioneer

3.9%Programs aimed at detecting and distrupting explosive devices

5.9%

• ID Friend or Foe• Falcon• JTIDS• JPALS• JTRS• NMT• WIN-T• Skyfire• VSAT• WAVPAC/Manpack

5.1%• ALR56• ALR95• ASQ-81• Blighter• CEC• EOTS• GATOR• LAMPS• LCMR• PRSS• MAWS• RFIS• SIRFC• TRIMM

4.2%• AIDWS• DEWS• MALD• Q-126• Sahara Program• SPEWS• SEWIP• Symphony• MK-53

FEATURED PRODUCTS

400Hz UAV PDU

AESA RadarModulesMicrowave

modules for use in next-

EIS

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ION™ SA5600Secure ApplianceUsed by Verizon Business™ and Avaya® Fortune 500 companies to provide third-party access to critical information systems

SST™ Liaison SuiteInconspicuous and highly portable secure communications kit

Intelligent Power Monitoring DevicesRemote power monitoring and re-boot for critical networking systems

400Hz UAV PDUSpecialized power management unit for Unmanned Aerial Systems (UAS)

High gAccelerometerPlug-and-play, pre-calibrated accelerometer for shock testing

65210 SensorSelf-contained 6DoF (Six Degrees of Freedom) kit for Aircraft Stores Separation Testing

EMI/EMC FiltersOne of the world’s largest line of EMC/EMI filtering products(Shown here: Mini Solder-in Feed-thru filters)

Custom MagneticsTop supplier of custom magnetics for critical military and transportation applications

GaNPower AmpsUltra broadband power amplifiers

For use in Electronic Warfare, Radar & C4ISR applications

modules for use in next-generation Radar systems

PassiveFilters

Band reject filter eliminates television and wireless signal interference

LONG-STANDING CUSTOMER BASE

• Long-standing, deep relationships

built on customer collaboration

• No customer over 7% of revenue

• Over 3,000 end customers

• Serve all the key defense

contractors and broad range of

Top 10 customers in alphabetical order

contractors and broad range of

Fortune 500 companies

• Supplier to the U.S., U.K and

Canadian governments, with

several cleared facilities

• Exposed to multiple end markets

Leading Financial Institution

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LTM-Ended August 31, 2012

• Won several, major long-term program wins:– $3.6M AESA Radar Module opportunity with major European missile defense

program

– $1.7M High Power/Small Signal amplifier opportunity

• $20 million contract lifespan potential

– Complex multi-function communications link for European defense opportunity

• $90 million contract lifespan potential

• Achieving EMS business turnaround: Stabilized EMS segment

Q3 BUSINESS HIGHLIGHTS

• Achieving EMS business turnaround: Stabilized EMS segment EBITDA and grew bookings (1.2 Book-to-Bill)

• Implemented additional $5.5M in annualized cost reductions

• 174 new design wins and introduced 8 major, new product families

• Sales funnel at over 205 million dollars at the end of August quarter

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$6.2 million order for

Electronic Warfare

(EW) integrated

assemblies for use in

major DoD platform

OTHER RECENT WINS

$1.7 million order

for High Power Small

Signal amplifiers for

use in DoD platform

$2.4 million order for

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$1.9 million add-on order

for EMI filtering solutions

for major weapons

program; brings fiscal year

program total to

over $5 million

$2.4 million order for

critical Circuit Card

Assemblies for use in

Department of Defense

Electronic Warfare

program

OUR FOOTPRINT• Domestic & International Footprint

• Trusted facilities & personnel

• 12 Trusted facilities (US, UK, and Canada) - High barriers to entry

• Certified facilities, including:

• MIL-PRF-38534 (Class H and K)

• AS9100 Rev C• AS9100 Rev C

• ISO 9001:2008 (All manufacturing facilities)

• International manufacturing locations are API companies and not subcontractors; same equipment and processes as U.S. facilities

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Manufacturing & Design

Design

QUARTERLY REVENUE TREND IN $MMKey Points

• May 2011 Ending Quarter includes Legacy API and SenDEC

• August 2011

Ending Quarter

includes

Spectrum

Control

• February 2012

Ending Quarter

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Ending Quarter

includes CMT

• May 2012 Ending

Quarter includes

RTIE and C-MAC

• August 2012

Ending Quarter

has no new

acquisitions

QUARTERLY REVENUE TREND BY SEGMENT IN $MM Key Points

• EMS Revenue

decline due to

graceful exit of

low and

negative

margin

business

• SSIA August

2011 ending

quarter lower

22

quarter lower

revenue due

to customer

demand pull in

May 2012

ending quarter

• SSC average

revenue for

the past 3

quarters is

about $51mm

QUARTERLY ADJ. EBITDA IN $MM AND % OF REVENUE

Key Points

• Aug Ending Quarter 2012:• SSC Adj EBITDA

was $8.7 MM and 17.1% as a percentage of revenue

• SSIA Adj EBITDA was $0.6MM and 13.8% as a percentage of

8.1

11.5 10.8 11.2 9.3

7.0%

12.0%

17.0%

22.0%

4.3

6.3

8.3

10.3

12.3 Adj. EBITDA Adj. EBITDA %

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percentage of revenue

• EMS Adj EBITDA

was $0MM and 0%

as a percentage of

revenue

• Overall EBITDA %

Goal: 20%

• EMS EBITDA % Goal:

10%

(3.4)

8.1 9.3

-13.0%

-8.0%

-3.0%

2.0%

(3.7)

(1.7)

0.3

2.3

4.3

May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12

BALANCE SHEET(1)

Assets (in $ millions)

Cash & cash equivalents $16.5

Accounts receivable $48.6

Inventory $67.0

Other $2.6

Liabilities & Shareholders’ Equity (in $ millions)

Accounts payable & accrued expenses $32.2

Current debt $2.5

Other $0.6

Total Current $134.7

Fixed assets $45.1

Goodwill, intangibles & other $219.9

Total $399.7

Total Current $35.3

Long-term debt & other $184.4

Deferred taxes $3.9

Total Liabilities $223.6

Total Shareholders’ Equity and other $176.1

Total $399.7

(1) As of Aug 31, 2012

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COMPANY LEADERSHIP

BEL LAZAR, President & Chief Executive Officer

• Over 25 years of experience in the defense, semiconductor and technology sectors

• Most recently served as the Senior Vice President of Operations at Microsemi Corporation

• Previously spent over 22 years at International Rectifier (NYSE: IRF) in expanding leadership and

general management roles, culminating as Vice President of the Company’s Aerospace &

BRIAN KAHN, Chairman of the Board

• Managing Member and Founder of Vintage Capital Management

• Invested in several public and private defense companies, including White Electronics Designs

Corp, Integral Systems, and others

general management roles, culminating as Vice President of the Company’s Aerospace &

Defense business unit

• Has completed over 12 acquisitions and over 25 consolidations within the Aerospace & Defense

electronics sector

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PHIL REHKEMPER, Executive Vice President & Chief Financial Officer• Joined API in April 2012• Brings to API more than 25 years of financial and strategic planning experience• Previously served as Vice President of Finance for International Rectifier (NYSE: IRF) and Chief

Financial Officer and Vice President of Finance for Alliance Fiber Optic Products

• Dominant RF/microwave, microelectronics, and

security technology provider in defense and

commercial high-reliability markets

– 90%+ sole/primary source with recurring revenue streams

– Broad portfolio of highly engineered technology products

INVESTMENT HIGHLIGHTS

– Alignment with growth areas of the Defense budget and

within high-reliability industrial markets

• Focus on revenue generation and profitability

– Target of 20% Adjusted EBITDA

– Demonstrated ability to generate cash

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