XREALITY GROUP LTD — Investor Presentation 2015

Aug 24, 2015

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FY 2015

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Disclaimer

This presentation has been prepared by Indoor Skydive Australia Group Limited ( ISA Group ) and provides general background information about the Company’s activities. That information is current at the date of this presentation. The information is a summary and does not purport to be complete. This presentation is not (and should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction, and neither this document nor anything in it shall form the basis of any contract or commitment. The 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 particular investor which need to be considered, with or without professional advice, when deciding whether an investment is appropriate.

ISA Group has prepared this presentation based on information available to it, including information derived from publically available sources that have not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, correctness or reliability of the information, opinions and conclusions expressed in this presentation.

Any statements or assumptions in this presentation as to future matters may prove to be incorrect and the differences may be material. This presentation should not be relied upon as a recommendation of or forecast by the Company. To the maximum extent permitted by law, none of the Company, its directors, employees or agents , or any other person accepts any liability, including without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its content or otherwise arising in connection with it.

The financial information disclosed in this presentation has been prepared on a statutory and pro forma basis consistent with the financial information prepared in the Company’s accounts. Due care and attention should be undertaken when considering and analysing the financial performance of the Company. All references to dollars are to Australian currency unless otherwise stated. The distribution of this presentation in jurisdictions outside Australia may be restricted by law and you should observe such restrictions.

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Contents

1. Overview

2. Results & Analysis

3. Strategy

4. Current Focus

5. Outlook

6. Summary

1. Appendices

1. Overview

Highlights

Proof of Concept Profitable Penrith Ops - EBITDA Facility: $3.1m Utilisation Continues to Rise Operational Cash flow: $0.7m Delivery of Rollout continues Stable, Robust, Low maintenance System IT Systems Development: localisation of hardware Australian Championships – August 22: 47 teams

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2. Results & Analysis

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June 2015 FY Dec 2014 HY only June 2014 FY
(‘000) (‘000) (‘000) #
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Revenue	$6,588	$3,185	$1,319
**EBITDA ***	($833)	($1,597)	($3,311)
Operating Margin (operational facilities)	50%	43%	30%
NPAT	($1,750)	($1,995)	($2,714)
Cashflow from operations	$683	$241	($582)
Net Tangible Assets/Share	$0.25	$0.25	$0.18

Opened to public Apr 26, 2014

• Reported EBITDA includes the effect of share based payments

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2. Results & Analysis

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KEY DRIVERS
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Tunnel based Revenue and Occupancy remained strong across the period Occupancy levels continue to steadily increase Unearned Revenue (Pre-sales) remains strong at $1.3m

At a Group level the results were heavily impacted by Performance Based Share expenses: $1.4m The reversal of the Make Good provision and associated P&L impact Property, Plant and Equipment continues to grow as we progress new projects: $23.9m

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2. Results & Analysis

Typical Utilisation Rates

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100%
90%
80%
70%
60%
50%
81% 78% 76% 74% 40%
61% 58% 66% 64% 30%
20%
10%
0%
Midweek Weekend School Overall
Holidays
Full Year Half Year
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Unique Customers: 37,400 Return Flyers: 8%

Age of Flyers (% of total flyers)

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30%
18% 18%
15%
9%
7%
1% 2%
0%
up to 5 6 to 9 10 to 19 20 to 29 30 to 39 40 to 49 50 to 59 60 to 69 over 70
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Average Occupancy: 66% (+2%) Frequent Flyer Club: 470 (+20%)

7 Percentages based on 15 hrs/day 364 days/year

2. Results & Analysis

Average Weekday Revenue Mix

Average Weekend Revenue Mix

Average Weekly Revenue Mix

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9%
7%
9%
5%
8%
6%
48%
19%
53%
33%
38%
66%
First timers Professional Groups / Events Merchandise
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3. Strategy

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First Australian Tunnel
Proof of Concept
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Existing Australian Rollout
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International Systems
Development
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S/E Asian Preparation

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Further Australian & S/E Asian Expansion
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Global Opportunities
/ Acquisitions
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Successful proof of concept | Implementing local growth | Planning future growth
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4. Current Focus

Contingencies:

First Australian Tunnel

• § Proven concept

• § Established markets segments

• § Technology and processes tested and delivered

• § World Class Facility

Existing Australian Projects

• § Gold Coast

• § Perth

Resulting in:

• § Growth Platform

• § Stable Operations

• § Economies of Scale

• § Corporate overhead absorption

• § Currency

• § Construction risk

• § Economic downturn

Managed by:

• § Project Timeline Management

• § Cost Management

• § Debt

Further Expansion

• § Additional Australian Projects

• § Partnership Projects: Australia & NZ

• § Hong Kong

§ S/E Asia

§ Acquisitions

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4. Current Focus

Australian Rollout

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Size: 16.5 ft

Target Market: Professional & Retail

Operating Licence: 24/7

Size: 12ft

Target Market: Retail

Operating Licence: 24/7

Expected Capex: $11-$12m

Size: 14ft

Size: 12 ft

~~T~~ arget Mar ~~k~~ et: Target Mark ~~e~~ t: Professional & Retail Retail Operating Licence: Operating Licence: 24/7 TBC Expected Capex: Expected Capex: $11 - $12m (Developer Funded)

Additional Australian Tunnel Final location: TBC Size: TBC

Partnershi Pro ects Australia & NZ p j

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In accordance with the Exclusive Territory Development Agreement with our equipment supplier, SkyVenture LLC, both parties have the ability to invest in each specific facility. SkyVenture’s first project has commenced and is to be located at Essendon Fields, VIC. IFLY Melbourne is scheduled to open mid 16.

All operations will be marketed and operated under the iFLY brand.

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4. Current Focus

Australian Rollout

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Pre sales: To commence September Pricing strategy: Starting from $99 3rd Party Sales: Including inbound tourism

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Development
Approval
Received
Jul
2014
Commencement
Of Tunnel Fabrication
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Construction Construction Tunnel Commissioning
Commencement Certificate Received Open to Public
Oct/Dec
Jan Dec
2015 2015
Commencement Tunnel Components
Of Tunnel Fabrication Received
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4. Current Focus

Australian Rollout

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Development Application Construction
Submitted Commenced
Dec
2014
Development Application
Approved
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Tunnel Commissioning
Open to Public Mid 16
Dec Jun
2015 2016
Tunnel Components
Shipping/Arrival
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Key Terms Agreement Finalise Commercial
Signed Terms
Dec Mar
2014 2016
Developer Funded Model
Expected Construction Commencement
Of Shopping Complex
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Expected Complex
Opening Day
Mar
2017
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5. Outlook – Global Industry

80+ Vertical Wind Tunnels in Operation World Wide*

40+ Opening by end 2016*

Global Growth of 50% expected in the next 12 months

Increased technology and efficiency as further credible manufacturers enter the market.

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Proven Business Model – expanding successful operations world wide.

14 *Source - indoorskydivingsource.com

6. Summary

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Clear strategy for growth Dynamic Board of Directors Strong management team Expertise in planning and execution Proven to deliver

Flexibility in engagement models

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7. Appendices

Indoor Skydive Australia Group Board

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David Murray AO Non-Executive Director

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Malcolm Thompson Alternative Director for Stephen Baxter

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Wayne Jones Director & Chief Executive Officer

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Ken Gillespie AC, DSC, CSM Chairman

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Danny Hogan MG Stephen Baxter Director & Non-Executive Director Chief Operations Officer

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7. Appendices

Indoor Skydive Australia Group Executive Team

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Stephen Burns Chief Financial Officer

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Fiona Yiend General Counsel & Company Secretary

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Danny Hogan

Executive Director & Chief Operations Officer

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Wayne Jones Brett Sheridan Executive Director & Chief Marketing Officer Chief Executive Officer

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7. Appendices

Global Wind Tunnel Market – Installed Capacity

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128
104
68
54
44
38
34
32
26
24
17
13
7 9 9
3 3 3 3 3 3 3 3 4 4 4
<1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total Tunnels - Cumulative
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Wind Tunnels – Long Term, High Growth, Global Market – 15 Year CAGR 26%
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7. Appendices

Global Wind Tunnel Manufacturers

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1% 1% 2%
1% Dynamis
4%
6% Eydisa Wind Tunnels
Tunnel Technologies
44% 7% Bodyflight Mobile Systems
BodyFlying AG
Tornado
7%
Aerodium Technologies
Strojirna Litvinov
Custom Built
11%
Indoor Skydiving Germany (ISG)
SkyVenture
16%
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Wind Tunnels Manufacturers – Competition in Manufacturing is driving increased efficiency in Technology
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7. Appendices

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IDZ CY13 – YTD CY 15 Share Price Performance vs
Index & Other Listed Consumer Discretionary Companies
(Indexed to 13 Jan 2013)
400%
375%
350%
325%
300%
275%
250%
225%
200%
175%
150%
125%
100%
75%
50%
25%
0%
-25%
-50%
IDZ VRL AAD
Index - Consumer Discretionary (XDJ.ASX) Index - ASX 200 (XJO.ASX) Index - Small Ordinaries (XSO.ASX)
Share Price movement relative to 2 Jan 2012 Share Price (%) 1-Jan-13 22-Jan-13 12-Feb-13 5-Mar-13 26-Mar-13 16-Apr-13 7-May-13 28-May-13 18-Jun-13 9-Jul-13 30-Jul-13 20-Aug-13 10-Sep-13 1-Oct-13 22-Oct-13 12-Nov-13 3-Dec-13 24-Dec-13 14-Jan-14 4-Feb-14 25-Feb-14 18-Mar-14 8-Apr-14 29-Apr-14 20-May-14 10-Jun-14 1-Jul-14 22-Jul-14 12-Aug-14 2-Sep-14 23-Sep-14 14-Oct-14 4-Nov-14 25-Nov-14 16-Dec-14 6-Jan-15 27-Jan-15 17-Feb-15 10-Mar-15 31-Mar-15 21-Apr-15 12-May-15 2-Jun-15 23-Jun-15 14-Jul-15 4-Aug-15
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Strong Share Price Performance – Since listing in Jan 2013
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Thank you

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