SPACETALK LTD — Investor Presentation 2021

Nov 1, 2021

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Investor Presentation

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Spacetalk Ltd. (ASX:SPA)

OCTOBER 2021

CONNECTED FAMILIES • CONFIDENT KIDS • SAFE SENIORS

Important notice

This presentation has been prepared by Spacetalk Ltd. (“Spacetalk,” or “Company,” or “SPA”).

Information contained in this presentation:

• is intended to be general background information only, and is not intended that it be relied upon as advice to investors or potential investors and is not an offer or invitation for subscription, purchase, or recommendation of securities in Spacetalk

• should be read in conjunction with Spacetalk’s financial reports and market releases on ASX

• may include forward-looking statements about Spacetalk and the environment in which Spacetalk operates, which are subject to significant uncertainties and contingencies, many of which are outside the control of Spacetalk – as such undue reliance should not be placed on any forward-looking statements as actual results or performance may differ materially from these statements

• includes statements relating to past performance, which should not be regarded as a reliable guide to future performance

• includes certain financial information which Spacetalk considers useful to assist in evaluating Spacetalk’s performance, however, such information has not been subject to audit or review in accordance with Australian Auditing Standards

All dollar values are in Australian dollars (A$) unless otherwise stated.

Definitions:

• FY = financial year ended 30 June

• Q1 = quarter ended 30 September

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2

About Spacetalk

Who We Are

Spacetalk Ltd. is a global technology provider of secure communication solutions for families to stay connected and protected.

What we deliver

Smartphone watches purpose-built for kids and seniors, with software designed to enhance their independence while enabling guardians to ensure their safety and care.

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What we stand for

Connecting families

What sets us apart

Proprietary end-to-end design, engineering and product development, with software built in-house and IP created and owned. Tested, certified and ranged by global tier-1 mobile network operators and mass market retailers, meeting the highest standards of security, privacy and usability.

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3

Company Snapshot

Company Structure

ASX:SPA Overview at 25 October 2021

Shares on Issue (m)	165.7
Share Price ($)	$0.220
Market Capitalisation (A$m)	$36.4
Debt (A$m)	$5.0
Enterprise Value (A$m)	$41.4
Options/Warrants/Retention Rights (m)	31.2

Share Register

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Leadership

Board of Directors

Mark Fortunatow	Co-Founder and Executive Chairman
Martin Pretty	Non-Executive Director
Brandon Gien	Non-Executive Director
Jarred Puro	Chief Financial Officer
David Pridgeon	Chief Technology Officer
Megan Coleman	Global Sales and Marketing Director

Price Chart

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4

Spacetalk Offer

Spacetalk Ltd. (“Spacetalk” or “Company” or “SPA”), developer of innovative technologies that keep families safe and connected, proposes to raise A$10.5 million in new equity capital to fund new and existing growth opportunities.

Details of Offer

Number of shares

• $8.0 million through 2-tranche placement

• 29.6 million shares in tranche 1

• 12.5 million shares in tranche 2 (subject to subject to additional placement capacity)

• $2.5 million (capped) through Share purchase plan

• 13.2 million shares

Issue price

• A$0.19 per share

Use of Funds

• Working and growth capital

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US Opportunity

Spacetalk is aiming to launch online in December 2021 in USA and Canada through:

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USA Canada
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Device Business Model Evolution

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Premium In App
Services
App Fees
Now Evolution Device Coming
Revenue
Device
Revenue
Different Mix in Different Markets
App Fees
Determined by local conditions
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7

Global market opportunity

Worldwide Wearables Shipment by Product

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Source – IDC, Veritas Research
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“Worldwide end-user spending on wearable devices will total $81.5 billion in 2021, an 18.1% increase from $69 billion in 2020 ….. The rise in remote work and increased interest in health - monitoring during the COVID 19 pandemic was a significant factor driving market growth.”

Source: Gartner Research.

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of all smartwatch sales will be children aged 5-13

30%

Global spending on wearables forecasted in 2020

$52B

Global smartwatch shipments expected to reach 108.91m by 2024 from of 43.87m in 2018 (CAGR of 14.5%)

109M

Source: Gartner Research, IDC.

“Market forecast predicts that shipments of wrist-worn wearables will hit 232 million units in 2021, a growth of 20% from an already solid 2020. Of sales in 2021, 142 million units will be smartwatches and 90 million will be simpler fitness trackers.”

Source – CCS Insight.

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8

Supply Chain and Production Risk Management

Strategic Advantage

• Spacetalk owns and controls the technology stack. From industrial design to circuitry design to software to firmware to servers

• Production currently in China across 3 different factories

• Current Spacetalk Adventurer manufacturing capacity – 1,200 units per day

• Spacetalk employees on the ground in China closely overseeing manufacturing.

• On the ground Spacetalk team foresaw possibility of production disruptions

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Procurement

Production

Placement

Pre-purchase of key components

Close oversight of head manufacturers and tiers 1-3 suppliers

Distributed logistics across multiple geographies.

No major production disruptions

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9

Q1 2022 Financial Highlights*

Group: Record performance, attributable to strong Device sales + App revenue

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GROUP REVENUE +50% pcp Q1 2021: $2.7m
$4.0m
GROUP REVENUE BY QUARTER ($m) TOTAL DEVICE REVENUE ($m) APP REVENUE ($m)
$16.0
+56% +78%
$14.0
$3.0
0.7
$12.0
$10.0 $1.1 $3.9
$1.9
$8.0
0.4
$1.7
$6.0
$5.5
$5.2
$1.4
$4.0
1.9 2.9 0.2
1.7
$3.1
$2.0 $4.0
$2.4 $2.7
$0.9
$-
FY2019 FY2020 FY2021 FY2022
Q1 FY20 Q1 FY21 Q1 FY22
Q1 FY20 Q1 FY21 Q1 FY22
Q1 Q2 Q3 Q4
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• Unaudited 10

Q1 2022 Wearables Summary

Record sales, continued strong ARR growth, expanded distribution, lower CAC

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DEVICE SALES TOTAL REVENUE APP ARR [1]
+56% pcp
+70% pcp
Q1 2021: $1.9m
$2.9m $2.9m Q1 2021: $1.7m
$3.6m
APP REVENUE +59% pcp CAC [2]
+78% pcp -43% pcp
$0.7m Q1 2021 : $0.4m $19 Q1 2021: $34
Unaudited
1. ARR = Annualised Recurring Revenue from Spacetalk App monthly subscriptions.
2. CAC = Customer Acquisition Cost = Advertising & Marketing Expenses 11
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Additional Financial Information

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Group Revenue By Quarter APP ARR By Quarter
$6
$3.5
$3.0
$5
$2.5
$4
$2.0
$3
$1.5
$2
$1.0
$1
$0.5
$0 $0.0
Q1 Q2 Q3 Q4
FY2019 FY2020 FY2021 FY2022
$Million $Million
Q1 FY2019 Q2 FY2019 Q3 FY2019 Q4 FY2019 Q1 FY2020 Q2 FY2020 Q3 FY2020 Q4 FY2020 Q1 FY2021 Q2 FY2021 Q3 FY2021 Q4 FY2021 Q1 FY2022
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12

FY22 YTD Business Highlights

Distribution

• UK distribution of Spacetalk Adventurer with O2 (Telefonica), Virgin Mobile and Sky.

• Spacetalk Adventurer regulatory technical acceptance in Europe, USA and Canada.

• Partnership with Elisa in Finland (MNO) from November 2021.

• Continued Spacetalk Life B2B2C sales channel build out.

New Distribution

Supply Chain Oversight

• USA launch (on-line) in December 2021 through Walmart, Amazon, Best Buy and Spacetalk online.

• Minor to negligible disruptions to date.

• Proprietary ownership of device design and distributed manufacturing enhances control and reduces risk.

• Canada launch (on-line) in December 2021 through Best Buy and Spacetalk online.

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New

Product

Enhanced Governance

• Spacetalk device and App upgrades

• Additional languages

• Board enhancement with transition to 5-person board and independent Non-Executive Chair.

• Additional features

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13

Devices and Distribution

Distribution

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Physical Stores vs Cumulative Revenue
2000 32
Stores Revenue
1750 28
1500 24
1250 20
1000 16
750 12
500 8
250 4
0 0
Stores
Revenue $m
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Global Partnerships

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Pan-Europe engagement with leading retailers
and Major MNOs on new partnerships for
device sales and content collaborations
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1,718 Stores Globally

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Devices App
New Languages
English Danish Finnish French
Kids Adventurer Life App Norwegian Spanish Swedish
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Customer Value Proposition

For Mobile Operators and Retailers

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For Families
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Strong CAC:LTV

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Driving new non cannibalised sales to large new market sector, children 5-12 years old

Provides retailers and mobile network operators an opportunity to responsibly acquire new customers at an early age

Opportunity for mobile network operator to acquire customer at lower cost (less than AU $90)

Customers are likely to continue with the same mobile network when the user upgrades to a smart phone

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Safety and
Peace of
Security
Mind
Reliability Privacy and
and Trust Responsibility
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15

FY2021 Accounts

Profit & Loss Statement

Continuing Operations Revenue Cost of sales Doubtful debts Interest expense Amortisation & depreciation Option and share issue costs Corporate and administration Advertising and marketing Employee costs (Loss)/ Gain on foreign exchange (Loss)/Profit before tax Income tax benefit Net loss for the period attributable to owners of the company Other comprehensive income/Items that may be classified subsequently to profit or loss Exchange differences on translating foreign operations Other comprehensive income net of tax Total comprehensive (loss)/income for the year (Loss)/Profit attributable to: Owners of the Company Earnings per share Basic (cents per share) Diluted (cents per share)	Group Year Ended 30/06/2021 30/06/2020 $ $ 15,121,573 10,486,518 (5,759,779) (3,049,807) (75,170) (14,544) (172,128) (127,632) (2,993,992) (2,458,697) (351,342) (2,477,662) (3,292,530) (3,167,824) (1,491,229) (1,741,184) (3,029,154) (2,762,209) (391,968) 41,696
	(2,435,719) (5,271,345) 655,571 1,005,893
	(1,780,148) (4,265,452)
	(11,881) (4,485)
	(11,881) (4,485)
	(1,792,029) (4,269,937)
	(1,792,029) (4,269,937)
	(1.09) (3.10) (1.03) (3.03)

Balance Sheet

ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Other current assets Total Current Assets Non-Current Assets Property, plant and equipment Intangible assets Right-of-use asset Deferred tax assets Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables Provisions Current Tax Liabilities Lease liabilities Total Current Liabilities Non-Current Liabilities Borrowings Warrants Lease liabilities Deferred tax liabilities Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Issued capital Reserves Accumulated losses Total Equity	Group As At 30/06/2021 30/06/2020 $ $ 4,185,033 3,165,125 2,218,826 1,049,580 1,736,994 977,851 2,774,845 1,061,566
	10,915,698 6,254,122
	205,911 182,731 3,941,220 3,713,004 289,016 134,111 655,661 458,488
	5,091,808 4,488,334
	16,007,506 10,742,456
	1,944,348 2,084,841 418,494 208,790 51,379 0 183,539 135,642
	2,597,760 2,429,273
	1,538,125 - 2,409,726 109,304 - 1,046
	4,058,201 -
	6,655,961 2,429,273
	9,351,545 8,313,183
	18,686,099 16,124,617 6,442,745 6,185,717 (15,777,299) (13,997,151)
	9,351,545 8,313,183

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Uses and Sources of Funds

Uses of Funds

• Uses of Funds Sources of Funds Growth and Working Capital • Growth Capital for North America and Europe

• • $9.9m Tranche 1 Placement $5.6m Inventory build-up and bolstering supply chains

• • Development of next generation devices and applications

• • Working Capital

• Costs $0.6m Tranche 2 Placement* $2.4m Share Purchase Plan $2.5m

• Total $10.5m Total $10.5m

Growth and Working Capital

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• subject to additional placement capacity. 17

Timetable

Event	Date
Trading Halt	Friday, 29 October 2021
Placement Offer opens	Friday, 29 October 2021
Placement Offer closes	Friday, 29 October 2021
Record Date for Share Purchase Plan (SPP)	Monday, 1 November 2021
Trading Halt Lifted	Tuesday, 2 November 2021
Tranche 1 Placement (DvP) settlement date	Tuesday, 9 November 2021
Quotation of new Tranche 1 Placement shares	Wednesday, 10 November 2021
Spacetalk Annual General Meeting	Tuesday, 30 November 2021

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18

This announcement has been authorized by Spacetalk CEO Mark Fortunatow.

Spacetalk Ltd. (ASX:SPA) is a global technology provider of secure communication solutions for families to stay connected and protected.

Spacetalk’s range of all-in-one smartphone GPS watches for children (Spacetalk KIDS and Spacetalk ADVENTURER) and seniors (Spacetalk LIFE) are purpose built with tailored features, design qualities and best practice data encryption, security and privacy technologies, for families to stay confidently connected. Fun, fashionable, secure and technologically advanced, Spacetalk devices deliver confidence for the child and senior wearer, enhanced controls for the guardian, and engaging functionalities for the whole family to stay connected.

The Spacetalk App is designed to provide a family environment for fun, engaging and secure media consumption beyond its device control – – functionalities for the guardian. Every linked contact parents, grandparents, extended family members and friends regardless of whether they are Android or iOS users, can interact with linked Spacetalk devices and each other through the Spacetalk App.

Spacetalk was founded in 2001 and listed on the ASX in 2003 as MGM Wireless Limited, which developed the world’s first SMS student absence notification platform for schools and went on to become Australia’s most successful school messaging company. On 12 November 2020 the Company changed its name to Spacetalk Ltd.

Investor Centre: https://investors.spacetalkwatch.com/

Investor Enquiries Dimitri Burshtein Investor Relations and Corporate Development +61 493 041 751 dburshtein@spacetalkwatch.com

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spacetalkwatch.com

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