corporate presentation - spectra7data center virtual reality spectra7 target markets: high value,...
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Corporate Presentation November 2017
Disclaimers
2
Certain statements contained in this presentation constitute “forward-looking statements”. All statements other than statements of historical fact contained in this presentation, including, without limitation, those regarding the market opportunity of the Company’s products, capabilities of the Company’s products, Company’s future financial position and results of operations, strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to the risk factors discussed in the Company’s annual MD&A for the year ended December 31, 2016 which is available at www.sedar.com. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this presentation are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this presentation and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law. Cautionary Note Regarding United States Securities Laws This presentation does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities of the Spectra7 Microsystems Inc., in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities of Spectra7 Microsystems Inc. have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons, “as such term is defined in Regulations under the U.S. Securities Act, unless an exemption from such registration is available
Spectra7 Overview • High performance analog semiconductor company targeting high value, high
growth markets with patented advanced signal processing technology
• Headquartered in San Jose, California.
4 From
bulky data, audio, power & video cables.
1 Ultra-thin and light-weight
interconnect.
Spectra7 makes electronic products smaller, lighter, and faster.
Spectra7 delivers the performance of optical networking using low- cost, low-power active copper cable solutions.
3
Share Structure and Key Statistics
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Share Price $ 0.41 CAD*
Market capitalization $ 66.6M CAD*
TTM revenue (00/30/17) $ 8.7 M
TTM gross margin (09/30/17) 59%
Insider ownership 4.5% Est. Shares %
*As of 09/30/17 Market Close See disclaimers on slide 2
Listed as SEV
Commonsharesissued 163M 100
Investment Highlights
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Focused, targeted go-to-market strategies fuelling business momentum
New transformative design win pipeline with industry leaders in AR/VR/MR
Encouraging market acceptance and testing of Data Center products
Growing Visibility in the AR / VR / MR Space
Operational efficiency programs supporting improved margin performance
I
II
III
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Seecau:onarynotesonpage2
Spectra7 Team
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Dr.AndrewKimCTO&VP,ENGINEERING
20YearsExperience:Samsung,Intersil
RaoufHalimCEO
CEOicClarityCEOMindspeedTechnologies
32YearsExperience
DarrenMaCFO
15YearsExperienceinFinanceIntel,Semtech,GigPeak
JohnMitchellCHIEFMARKETINGOFFICER20yearsofProductMarke:ng:
Intersil,Quellan
AntonyNgYukshingVP,OPERATIONS
23yearsSemiconductorEngineeringCypress,Marvell
EbrahimAbunasrahVP,INTERCONNECTPRODUCT
GROUP10yearsProductDevelopment
Molex
GeraldHamiltonSENIORVP,WORLDWIDESALES
27YearsSemiconductorExperience:Mindspeed,icClarity
High Gross Margin / Single Sourced / Secured by over 50 Patents
The Leader in Active Copper Cable Technology
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Augmented/ Mixed Reality
Data Center
Virtual Reality
Spectra7 Target Markets: High Value, High Growth, Disruptive Technologies
1-Estimated Hardware Revenue from Digi Capital(2016) 2- Gartner (2016)
$6 billion by 20201 3D gaming- Immersive Content -VR social
platforms
$4 billion market in 20192 Data Center Market Drivers
Cloud data storage- Real time streaming analytics
$42 billion by 20201 Workplace collaboration-Virtual desktop
Increased productivity- Job training
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VR Market Opportunity: 99% CAGR (‘15-’20) Global Virtual & Augmented/ Mixed Reality Head-Mounted Display Shipments
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AR/MR2
VR1
See disclaimers on slide 2 1-BI Intelligence: The virtual Reality Content Report (2015) 2-AugmentedReality.org:Smart Glasses Market Report (2015)
New Design Driving Growth: DreamWeVR™
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Spectra7’s 4 new chips featuring
SpectraLinear™ technology enabling
AR, VR, and MR devices to drive
resolutions of 4K / 5K with low latency
over an ultra-thin unified interconnect.
Potential Applications for Spectra7’s ultra-thin wearable interconnects: • UHD Video
• Data Control
• Gesture recognition
• Gyro interface Up to 50 Gbps
Significant AR/VR/MR Customer & Market Demand1
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• FACEBOOK • SONY • APPLE • LG
• HTC • TENCENT • SAMSUNG • GOOGLE
• MICROSOFT • ACER • DELL • LENOVO
1-Digi-Capital-TherealityofAR.VRbusinessmodels-April2016
• Microsoft Reference MR Design
• Developer Kits shipped
• $299 retail price point • Windows 10 Bundles with PC OEM
laptops this holiday season (2017)
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Mixed Reality Design Partner & Customer
First Head Mounted Display “HMD” enabled by Spectra7 Active Cable on display at GDC in
March 2017
Growing Roster of Customer Partners
Poised to Enter Data Center Market
Glo
bal D
CI R
even
ue, $
M
Multi-slot Small Form Factor
Ovum, 2016
Data Center Interconnect Optical Revenue
58.5%CAGR
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Spectra7 Proposition: Design Drives Value
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Upto10XreducVonin
cablediameter
Passivecablebundle
Replacement Opportunity: Compelling Efficiency Gains
Up to 80% power reduction over fiber1
Up to 65% lower cost over fiber1
Major Recent Developments:
! Collaboration with Foxconn, one of six
interconnect suppliers who serve 10 major
Data Center Operators.
! Prototype orders in Q3’17.
! Revenue expected to ramp in 2018.
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1. Company Estimates 2. Ovum: Ovum Says it is Good to be a Data Center Interconnect Supplier (2015)
VR8200 Display Port Module
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HT8181 HDMI 2.0 Module
VR8183-M-71 USB 3.1 Gen1 Type-C™ Module
VR7050-M-01-STDA USB 3.1 Gen1 Std A Module
Broad Multi-Market Cable Technology Platform
Camera Connectivity HDTV, 4K, OLED Displays Digital Signage Tablets
Investment Highlights
17
Focused, targeted go-to-market strategies fuelling business momentum
New transformative design win pipeline with industry leaders in AR/VR/MR
Encouraging market acceptance and testing of Data Center products
Growing Visibility in the AR / VR / MR Space
Operational efficiency programs supporting improved margin performance
I
II
III
IV
V
Seedisclaimersonslide2