Summer 2016
One platform for a multi-screen world
Confidential and intended solely for internal use.
Do not redistribute. Frankly Inc.
DISCLAIMER
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This presentation (“Presentation”) is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of the securities of Frankly Inc. (the “Company”), or an offer, invitation or recommendation to sell, or a solicitation of an
offer to buy, any of the Company’s securities in any jurisdiction. Neither this Presentation nor anything in it shall form the basis of any contract or commitment. This Presentation is not intended to be relied upon as advice to investors or potential investors
and does not take into account the investment objectives, financial situation or needs of any investor. All potential investors should seek independent information and advice from qualified investment professionals.
The Company has prepared this Presentation based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the
accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. No information contained in this Presentation or any other written or oral communication in connection with it is, or shall be relied upon as, a
promise or representation and no representation or warranty is made as to the accuracy or attainability of any estimates, forecasts or projections set out in this Presentation.
Forward-Looking Information
This release includes forward-looking statements, including: the expected completion date of the proposed transaction; the integration of Gannaway Web Holdings, LLC d/b/a Worldnow (“Worldnow”) into Frankly’s business; the business plan and
strategies of Worldnow and Frankly; the combined company's financial position and growth prospects; management of the combined company; the anticipated tax treatment of the proposed combination for Worldnow’s shareholders; and Frankly’s and
Worldnow’s anticipated future results. Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may" and "should" and similar
expressions. Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on Frankly's and Worldnow's perception of historical trends, current conditions and expected future developments, as well as other factors
management believes are appropriate in the circumstances. Frankly's and Worldnow's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future
events and as such, are subject to change. Frankly and Worldnow can give no assurance that such estimates, beliefs and assumptions will prove to be correct.
Material risk factors and uncertainties that could cause actual results to differ materially from the forward-looking information and material assumptions that were used to develop the forward-looking information include, but are not limited to: the forecasted
demand for mobile messaging technologies and ephemeral messaging technologies; the forecasted demand for interest-based and discovery portal chat products; public confidence in the security related to ephemeral messaging technologies; the
Company’s success in obtaining patents for each of its “unsend message,” “direct manipulation of object size in user interface” and “preview reticule to manipulate coloration in a user interface” technologies; the Company’s success in expanding the global
chat network; the ability of the Company to monetize the chat network; the Company’s success in building differentiated applications and software development kit products; the ability of the Company to foster, expand and maintain a software development
kit partner base; the ability of the Company to achieve rapid incremental user growth through a variety of software development kit partners in different industries; the Company’s success in implementing its “Supergroup” chat technology; the Company’s
success in implementing brand and event sponsorship; the Company’s success in introducing digital and virtual goods, including gift cards and coupons; the Company’s success in introducing content, such as mobile games, music and video; the
Company’s success in attaining and maintaining high levels of retention and frequency of use amongst the network user base; the Company’s ability to release products and updates in a timely manner; the Company’s ability to retain key members of its
management and development teams; and the Company’s ability to access the capital markets. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results
could differ materially from the expectations expressed in these forward-looking statements.
Numerous risks and uncertainties could cause the combined company's actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: failure to realize
anticipated results; failure to realize benefits from the combined company's IT systems, including the combined company's IT systems implementation, or unanticipated results from these initiatives; the inability of the combined company's IT infrastructure to
support the requirements of the combined company's business; heightened competition; and changes in economic conditions; damage to the reputation of brands promoted by the combined company; changes in the combined company's income,
commodity, other tax and regulatory liabilities including changes in tax laws.
There can be no assurance that the proposed combination will occur or that the anticipated strategic benefits and operational , competitive and cost synergies will be realized. The proposed combination is subject approval by the TSX Venture Exchange
and, potentially, shareholders of Frankly, and the fulfillment of certain conditions, and there can be no assurance that any such approvals will be obtained and/or any such conditions will be met.
Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, 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. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the
impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
This Presentation is directed only at, and may only be communicated to, (i) persons that are outside of the United States within the meaning of Regulation S promulgated under the United States Securities Act of 1933, as amended (the “U.S. Securities
Act”) or (ii) inside the United States to persons that are either “qualified institutional buyers” within the meaning of Rule 144A under the US Securities Act or “accredited investors” as defined in Regulation D under the US Securities Act. The distribution of
this Presentation may be restricted by law in certain jurisdictions. Recipients, and any other persons who come into possession of this Presentation must inform themselves about, and observe any such restrictions.
All $ = U.S. dollars
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COMPANY + TEAM
COMPANY + TEAM
WORLD-CLASS COMPANY
PUBLICLY TRADED
UNDER TICKER TLK ON THE TSX-V since JAN 2015.
$20M+ IN ANNUAL REVENUES, QUARTERLY EBITDA
BREAK-EVEN
LEADER IN FAST GROWTH NEXT-GEN MEDIA TECH
TECH PLATFORM FOR MEDIA COMPANIES TO OPERATE
THEIR FAST GROWING DIGITAL BUSINESS
100 EMPLOYEES AND GROWING
HQ IN SAN FRANCISCO, WITH MAJOR OFFICE IN
NEW YORK
BACKED BY WORLD-CLASS PARTNERS / INVESTORS
INCUBATED AT STANFORD UNIV. STARTX,
LEAD INVESTORS ARE MAJOR MEDIA & TELECOM
Confidential and intended solely for internal use.
Do not redistribute. Frankly Inc.
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5
COMPANY + TEAM
OUR MISSION
One platform for a multi-screen world.
With rapid growth in multiscreen digital media, we provide a comprehensive,
multi-media platform for media companies to operate their digital business in an
increasingly complex world.
Our customers focus on creating the content, we take care of the rest.
POWERED BY
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COMPANY + TEAM
COMPREHENSIVE MEDIA PLATFORM
200+ media customers and growing (ABC, NBC, CBS, FOX affiliates)
1 billion monthly impressions
80 million monthly unique visitors
#16 in comScore Media Metrix
Team of 100 professionals; over 50 dedicated engineers
16+ years of experience with the broadcasting industry
Frankly acquired Worldnow in August 2015
POWERED BY
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COMPANY + TEAM
WORLD CLASS MANAGEMENT
Steve Chung
Chairman & CEO
• CDNetworks (sold to KDDI),
BlueRun Ventures (Nokia),
Goldman Sachs
• Harvard (BA), Stanford (MBA)
Lou Schwartz
COO & CFO
Harrison Shih
Chief Product
Officer
• WWE, Multicast Media
(sold to Piksel)
• Google, GREE, Fitstar
(sold to Fitbit)
• Penn State University,
Mississippi College School
of Law (JD)
• Northwestern University
John Wilk
General Counsel
• Phillips Nizer LLP
• Rutgers University (JD)
POWERED BY
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COMPANY + TEAM
PRESS ATTENTION
Confidential and intended solely for internal use.
Do not redistribute. Frankly Inc.
For more press please visit:
http://www.franklyinc.com/press
POWERED BY
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POSITIONING + FINANCIALS
WORLD CLASS BACKERS
• StartX: Stanford University’s accelerator fund for its top alumni entrepreneurs
• Frankly was incubated in the Stanford University StartX program
• One of America’s largest broadcasters which owns and/or provides services for 60
TV stations
• Long-time WorldNow customer
Invested US$1.3M
(1.6% shareholder)
Post-WorldNow Merger
(21% shareholder)
• Significant WorldNow shareholder, second only to Founder/CEO
• Mobile Commerce & VAS arm of SK Group (Global Fortune #64 in 2014 ) and wholly
owned by SK Telecom (#1 wireless carrier in Korea)
• Korea’s leading mobile, web and platform company
Invested over US$14M
(29% shareholder)
• $1.3B Revenues and 4K+ employees
• Canada’s leading RTO specialist; $100M+ transactions
• Led Concordia Healthcare and Element Financial
Led US$5M & RTO
(6.5% shareholder)
• Sponsored the most ‘direct to TSX’ deals
POWERED BY
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MARKET + PRODUCTS
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MARKET + PRODUCTS
BIG ISSUES FOR TRADITIONAL MEDIA
1
Disruption by Mobile & Connected Devices
3
Traditional media companies have no
info on their audience beyond age
and gender. Netflix, Hulu, Comcast,
SmartTV, HBO Go, all have direct
relationship & know audience well
Traditional media are unprepared
for cord-cutting, mobile-first and
connected devices as consumers
flock to new devices
2
Declining Relevance & Low Engagement
Millennials are consuming and
sharing content through new
platforms like Snapchat, BuzzFeed
and other mobile messaging apps,
not watching traditional media
No Audience Understanding & Data
4
Fragmented & Complex Platforms
Media companies have too many
systems to manage their digital
presence with fewer people from
web, mobile, advertising, data
analytics, social
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MARKET + PRODUCTS
THE BIG GROWTH OPPORTUNITY
Frankly can capture hyper-growth market via transition from TV to mobile, worth $25B+ in US
• 49% increase in time spent with digital media from 2013 to 2015 (comScore)
• 3x in revenue from mobile Internet 2014 vs. 2017 (digi-capital); 10x from 2013 vs. 2019 (eMarketer)
POWERED BY
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MARKET + PRODUCTS
OUR PRODUCTS
What we do:
CMS
APPS
Software-as-a-Service
(Platform Fees)
VIDEO
DATA
ADS
Managed Advertising Services
(Revenue Share)
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MARKET + PRODUCTS
FRANKLY PLATFORM SNAPSHOT
USER EXPERIENCE
PUBLISHER EXPERIENCE
MAPPING
DATA
ANALYTICS
ADS
CHAT
AUTH
PUSH
CACHE
CONFIG
VIDEO
CONTENT
FRANKLY MEDIA PLATFORM
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MARKET + PRODUCTS
OUR PRODUCTS & SOLUTIONS
Multi-media Ingestion  ONE CONSOLE  Multi-point Publishing
Desktop &
Responsive
Web
Mobile Apps &
Connected Devices
Social &
Engagement
Data &
Advertising
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MARKET + PRODUCTS
OUR PRODUCTS & SOLUTIONS
WHITE-LABELED TECH PLATFORM (SaaS)
Best-in-class MOBILE APP, DESKTOP WEB, CONNECTED DEVICE plaform for media
Over-the-top (OTT), multiscreen technology for digital VIDEO
Real-time and scalable MOBILE CHAT solution
DATA & MARKETING SOLUTIONS (SaaS & SERVICES)
DATA ANALYTICS and local media audience insight
CONTENT syndication, pooling and cross promotion
Digital marketing & USER ACQUISITION
MONETIZATION & ADVERTISING (REVENUE SHARE)
Industry leading national-local destop & mobile ADVERTISING solution (premium & programmatic)
IAP (In App Purchase) and DIGITAL CONTENT monetization module
Location-based HYPERLOCAL advertising network for mobile apps
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MARKET + PRODUCTS
OUR CUSTOMERS & ADVERTISERS
OUR CUSTOMERS
OUR ADVERTISERS
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POSITIONING + FINANCIALS
MASSIVE SCALE
Aggregate Reach of Frankly’s Platform Customers Rank Top 100 in the United States
Top Sites by Most Unique Visitors
March 2016 – All Sites
Top Sites by Most Unique Visitors
March 2016 – News/Information
Rank
Site
Rank
Site
1
2
3
4
5
6
Google Sites
Facebook
Yahoo Sites
Microsoft Sites
Amazon Sites
AOL, Inc.
1
2
3
4
5
6
Yahoo-ABC News Network
CNN Network
Weather Company, The
HPMG News
USA TODAY Network
NBC News Digital
,,,
,,,
,,,
,,,
16
75
```
```
```
```
76
78
82
84
89
93
Snapchat, Inc.
Forbes Digital
VEVO
Business Insider
Dow Jones & Company
Ticketmaster
18
22
25
30
33
42
Time
BBC Sites
NPR
MSN News
USNews
National Geographic Sites
Source: comScore, Inc.
Frankly will leverage
this massive scale
& distribution for
diverse
monetization
strategies
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FINANCIALS + GROWTH PLAN
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POSITIONING + FINANCIALS
FINANCIALS
(All amounts in $USD)
Financial Highlights
Revenue
Adj. EBITDA
$M
*$4.8
$5.2
$1.5
$0.0
($1.0)
($3.0)
Q3-15
Q4-15
(*Normalized
Revenue)
Q1-16
Q1 2016 baseline on revenue and EBITDA
going-forward, with post-acquisition
integration completed
QoQ revenue growth of 8% from 4Q 2015
vs. 1Q 2016, despite 1Q seasonally low
revenue
Major improvements on expenses over past
three quarters, with positive adjusted
EBITDA for Q1 2016
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POSITIONING + FINANCIALS
GROWTH CATALYSTS – 12 MONTHS
MOBILE APPS & CONNECTED TV (APPLE TV, ROKU, FIRE TV)
MANAGED ADVERTISING SERVICES & TARGETED LOCAL ADVERTISING
FULLY INTEGRATED CMS + DATA TO CAPTURE MAJOR BROADCASTERS
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POSITIONING + FINANCIALS
FUTURE GROWTH STRATEGY
FOCUS
2016
Focus on local broadcast
market
EXPAND
2017
UBIQUITY
2018
Expand into other media
verticals
International & Product
Diversification
Targeted Ad Network and Data Platform
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POSITIONING + FINANCIALS
INORGANIC OPPORTUNITIES
While primarily focused on executing an organic plan, we will evaluate selective inorganic opportunities
that accelerate our long-term growth and profitability in several key areas
DATA – TARGETED DATA COLLECTION, ANALYSIS, INSIGHTS
ADVERTISING – TARGETED / HYPERLOCAL ADVERTISING TECH / SOLUTIONS
INDUSTRY EXPANSION – CUSTOMER VERTICAL ACQUISITION
POWERED BY
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POSITIONING + FINANCIALS
COMPETITIVE LANDSCAPE
Mkt
Cap
Mkt Cap
/ Rev
Facebook
$300B
15x
Twitter
$10B
4x
Snapchat
$16B
50x
Neulion
$300M
3x
Salesforce.com
$50B
7x
FRANKLY
$20M
1x
News + Media Tech
FULL
SOLUTION
TECH ONLY
CONSUMER (B2C)
BUSINESS (B2B)
* - Estimate based on public info and internal
assessment as of May 2016
POWERED BY
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POSITIONING + FINANCIALS
CAP TABLE
Frankly Inc. April 2016 ending Summary Cap-table
Shareholder
SKP America, LLC
Raycom Media Inc.
Gannaway Entertainment, Inc.
Other Institutions and Individuals
2014 Private Placement
Shares from WB III
Options from WB III
Frankly employee stock options
Option Reserve
Private Placement Agent Options
RSU
Sum
Grand Total
Common
9,269,917
3,647,312
8,596,700
737,715
22,251,644
% of
Common
42%
0%
0%
16%
39%
3%
0%
0%
0%
0%
0%
100%
Restricted Voting
6,751,132
3,021,072
69,483
9,841,687
% of Common &
Restricted
29%
21%
9%
12%
27%
2%
0%
0%
0%
0%
0%
100%
38,324,238
Employee
Options
Agent
Options
-
24,590
4,549,205
780,950
5,354,745
RSUs
-
515,802
- 360,360
515,802 360,360
POWERED BY
Fully
Diluted %*
24%
18%
8%
10%
22%
2%
0%
12%
2%
1%
1%
100%
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THANK YOU
STEVE CHUNG
FOUNDER & CEO
[email protected]
POWERED BY