zSpace, Inc. · OTC:ZSPC
zSpace — SPAC Merger (May 2022)
41 slides from zSpace's SPAC merger presentation, May 2022
Slide 1: Investor Presentation
Investor Presentation May 2022 Private & Confidential
Slide 2: Disclaimer
Disclaimer This Presentation (together with oral statements made in connection herewith, the “Presentation”) is for informational purposes only to assist prospective purchasers in a private placement in making their own evaluation with respect to the proposed business combination (the “Business Comb
Slide 3: Forward Looking Information
Forward Looking Information Certain statements in this Presentation may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements herein generally relate to future events or t
Slide 4: Additional Information
Additional Information Use of Projections This Presentation contains projected financial information with respect to zSpace. Such projected financial information constitutes forward-looking information, is for illustrative purposes only and should not be relied upon as being predictive of future res
Slide 5: Additional Information
Additional Information Participants in the Solicitation EdtechX, zSpace and their respective directors and executive officers may be deemed participants in the solicitation of proxies from EdtechX’s stockholders with respect to the proposed Business Combination. A list of the names of EdtechX’s dire
Slide 6: EdtechX Holdings Acquisition Corp. II: Edtech & Future of Work-Focused SPAC
EdtechX Holdings Acquisition Corp. II: Edtech & Future of Work- Focused SPAC With a “SPAC for Good” Impact Mandate EdtechX ESG & Impact Assessment Methodology 1. Reach & Affordability 2. Quality of Education / Training & Gainful of Skills & Employment 3. Efficacy & Sustainability 4. Customer Privacy
Slide 7: zSpace: Pioneering the "Eduverse"
zSpace: Pioneering the “Eduverse” zSpace’s immersive AR/VR technology unites education with the metaverse, providing students with equitable access to innovative, engaging learning experiences. Global AR, VR, and mixed reality (MR) market1 : $250b by 2028 (vs. $28b in 2021) Spending on AR and VR in
Slide 8: Transaction Overview
Transaction Overview – ($millions, except share price) Combined zSpace Shareholder Committed Anchor Extended Earnout / Pro forma (1) Rollover Equity PIPE @ $10.15 (2) Lock-Up (3) Escrow Shares (4) Enterprise Value $195M 6 to 18 zSpace – 28.5% Market Cap 100% $25M SPAC Sponsor – Up to 50% months $319
Slide 9: Illustrative Transaction Summary
Illustrative Transaction Summary- ($millions, except share price) Transaction Summary Pro Forma Valuation (8) • Implied enterprise value of $195M, or 3.5x '23E Revenue of $56M (1) Illustrative Share Price $10.15 • Up to $141M cash to balance sheet for continued growth of combined company before tran
Slide 10: zSpace Vision: expanding across the entire learning spectrum
zSpace Vision: expanding across the entire learning spectrum 10
Slide 11: Investment Highlights
Investment Highlights Leading provider of AR/VR technology in the 01 education market Differentiated and proprietary immersive and tracking 02 technologies Key strategic partnerships and network of 3rd party 03 developers provide ability to rapidly scale internationally Rapid growth in bookings, rev
Slide 12: zSpace in Action
zSpace in Action zSpace {<<
Slide 13: Company Snapshot
Company Overview Company Snapshot Leading commercial provider of AR/VR technology, focused on the Education & Training sector Industry Recognition By the Numbers A Customer Base with the Largest US School Districts** & Awards US zSpace Customer Students*** US Rank $56M 54% New York City 984k #1 FY23
Slide 14: zSpace Education Market Offers a Large Opportunity (>$200B)
zSpace Education Market Offers a Large Opportunity ( > $200B) United $24.9B $7.1B States China $41.7B $1.2B EMEA $60.2B $2.8B APAC $78.8B $2.5B ~$184B TAM (K-12) ~$14B TAM (Career Tech Ed [CTE] / Workforce) Source: National Center for Education Statistics, Ministries of Education in various countrie
Slide 15: US Market Opportunity is Bolstered by US Federal Stimulus
US Market Opportunity is Bolstered by US Federal Stimulus ~$300B Covid-19 legislation has added funding to K-12 education, adding growth potential CARES Act Covid Relief Package American Rescue Plan Signed into Law Signed into Law Signed into Law March 2020 December 2020 March 2021 Education Total $
Slide 16: Validated Efficacy with AR/VR in Education and Workforce Training
Validated Efficacy with AR/VR in Education and Workforce Training 16
Slide 17: Hardware
Technology Hardware Continuously developing new products for existing and new markets Original Versions New Generation Classroom Lab Model One-to-One Model Inspire Commercially Launched Q1/2022 AIO Laptop Professional Education/K12 High-Performance Strategic Direction Key Partnership with Major PC O
Slide 18: Technology Differentiation
Technology Technology Differentiation zSpace’s differentiated, easy-to-use and affordable technology has contributed to its success Unique Features Comfortable Viewing ✓ Proprietary 3D panel module ✓ Lightweight eyewear ✓ Full Motion Parallax Perception of Depth Integrated Experience ✓ AR/VR combine
Slide 19: Proven solution with real evidence and customers
Proven solution with real evidence and customers… Every time I visit a zSpace class, the kids are 100 percent engaged, they absolutely love it and they can’t wait to get a visitor’s attention and share what they are doing. SARAH EDWARDS District Supervisor of Instructional Technology Buffalo Public
Slide 20: Software Ecosystem Content Driving Highly-Recurring Revenue
Software Ecosystem Content Driving Highly-Recurring Revenue Broad application offering (both zSpace and 3rd party), including hundreds of activities* aligned with NGSS and state standards Curriculum Areas Covered Physical AI/ Advanced K-12 Math Health CTE Automotive Science Programming Manufacturing
Slide 21: Immersive and engaging zSpace and 3rd party content
Immersive and engaging zSpace and 3rd party content 21
Slide 22: Technology Differentiation
Technology Technology Differentiation zSpace’s differentiated, easy-to-use and affordable technology has contributed to its success Competitive Landscape* Unique Features • Significant Customer Installed Base Robust • Robust software content • 3rd Party Developers for scale Customer • K12/STEM & CTE
Slide 23: The recent metaverse excitement about immersive virtual experiences
The recent metaverse excitement about immersive virtual experiences... 23
Slide 24: ...has been zSpace's core vision for the past 10 years
...has been zSpace's core vision for the past 10 years Our focus on immersive experiences has made us a leading education technology in the metaverse The Missing Link In A Metaverse-For-All Vision “Given the fundamental technology zSpace has demonstrated I believe that the PC and laptop can be modif
Slide 25: Key Strategic Growth Pillars
Key Strategic Growth Pillars Our execution plan includes multiple avenues for continued growth over the next several years Continued US International Software organic growth Expansion Acquisitions 25
Slide 26: Sales & Marketing Growth Plans
Sales & Marketing Growth Plans US Key Initiatives ▪ New Customer Acquisition ▪ Existing Customer Expansion through zSpace Inspire ▪ Continued Virtual/Hybrid selling model ▪ eSports Initiative ▪ US Channel Strategy ▪ US Stimulus Funding Focus – ESSER and CARES implementations International Key Initia
Slide 27: International Reseller Footprint
International Reseller Footprint Strong and growing position in leading markets across the world International customers in over 50 countries through over 25 major resellers Success in US education driving demand Major projects in 2021 is expected to set up 2022 well ▪ Argentina ▪ Eastern Europe 27
Slide 28: Acquisitions – Annual Recurring Revenue (ARR)
Acquisitions – Annual Recurring Revenue (ARR) Acquisitions – Key Criteria Pipeline of 50 targets • Focus on key software applications • Prioritized focus on top 5 targets within K12/STEM & CTE/Workforce • Could add $2m ARR to 2022 • Stable revenues, higher margins, Revenue, >$30m in Revenue in scala
Slide 29: Near-Term Priorities
Near-Term Priorities Continue US organic International growth Expansion 1 2 3 4 Execute on software Go public M&A pipeline 29
Slide 30: 2021 – 2024E Financial Projection Metrics – Base Case
2021 – 2024E Financial Projection Metrics – Base Case Revenues Annual Recurring Revenues (ARR) ($mm) ($mm) 100 40.0 84.2 34.1 80 CAGR 30.0 CAGR 62% 47% 56.1 60 20.2 (a) 37.4 (b) 20.0 13.7 (c) 40 26.7 10.0 8.0 20 0 - 2021 2022e 2023e 2024e 2021 2022e 2023e 2024e Gross Margin Operating Profits ($mm) (
Slide 31: 2021 – 2024E Financial Metrics
2021 – 2024E Financial Metrics Revenues by Region* Revenues by Category* ($mm) ($mm) 90.0 90.0 84.2 84.2 80.0 80.0 70.0 70.0 60.0 56.1 60.0 56.1 50.0 50.0 (1) (1) 40.0 40.0 37.4 37.4 30.0 26.7 30.0 26.7 20.0 20.0 10.0 10.0 - - 2021 2022e 2023e 2024e 2021 2022e 2023e 2024e Americas APAC/EMEA China Ha
Slide 32: Strong bookings that convert to revenues in 2022/2023
Strong bookings that convert to revenues in 2022/2023 Forecasted revenue growth supported by Fulfillment of Booked Orders, ARR and Targeted Programs 2022 2023 • Historical 60% average excluding SW & SVC ARR. 32
Slide 33: Q1 2022 Sales Results – Best Q1 in Company History
Q1 2022 Sales Results – Best Q1 in Company History 1 59% Bookings Growth Y-o-Y | 30% Revenue Growth Y-o-Y | ($mm) 10 Q1 ’21 9 8.9m Q1 ’22 8 + 59% 7 + 30% 6.0m 6 5.6m 5 4.7m 4 Excl. ~$13M of revenues pending fulfillment2 3 2 1 _ Booking Revenue 1) Results are unaudited; actual results may materially
Slide 34: Peer Group Analysis and Operational Benchmarking
Peer Group Analysis and Operational Benchmarking 34
Slide 35: Peer Benchmarking – Valuation Metrics
Peer Benchmarking – Valuation Metrics ($millions) EdTech (subscription business model) Metaverse/AR/VR (1) Median Median Valuation Metrics Market Cap $314 $2,207 $2,409 $2,611 $3,383 $2,653 $1,464 $1,155 $1,061 $1,428 - $575,449 $47,339 $20,087 $1,559 - EV 195 2,716 3,552 3,032 2,862 1,891 1,253 1,0
Slide 36: Peer Benchmarking – Financial Metrics
Peer Benchmarking – Financial Metrics ($millions) EdTech (subscription business model) Metaverse/AR/VR Median Median Financial Metrics Scale CY 22E Revenue(1) $37 $755 $624 $463 $339 $543 $148 $171 $318 $625 - $127,592 $5,496 $1,497 $130 - CY 23E Revenue 56 834 690 516 429 674 200 229 394 767 - 148,
Slide 37: Leadership Team
Leadership Team Mike Harper Paul Kellenberger Joe Powers Ron Rheinheimer Tara Choy Chief Product and Chief Executive Officer Chief Financial Officer Chief Revenue Officer Chief People Officer Marketing Officer Prior to zSpace, Paul was CEO Joe has over 20 years Mike has more than 20 years Ron has ov
Slide 38: Appendix
Appendix zSpace {eden 38
Slide 39: Risk Factors
Risk Factors Risks Related to zSpace’s Business and Industry Following the Business Combination • zSpace has a limited operating history at the current scale of its business and is still scaling up its monetization efforts, which makes it difficult to evaluate its current business and future prospec
Slide 40: Risk Factors (Cont.)
Risk Factors (Cont.) Risks Related to Financial and Accounting Matters • zSpace’s operating results may fluctuate significantly, which makes its future results difficult to predict. • Certain of zSpace’s market opportunity estimates, growth forecasts and key metrics could prove to be inaccurate, and
Slide 41: Risk Factors (Cont.)
Risk Factors (Cont.) Risks Related to the Business Combination • Public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the public shares.