BikeExchange : Investor Presentation - Acquisition of Kitzuma

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BIKEEXCHANGE (ASX: BEX)

Overview - Acquisition of

Kitzuma

23rd December 2021

Disclaimer

For personal use only

IMPORTANT NOTICE

The material in this presentation has been prepared by BikeExchange Limited (ASX: BEX) ABN 24 625 305 240 ("BikeExchange or the Company") and is general background information about BikeExchange's activities current as at the date of this presentation. The information is given in summary form and does not purport to be complete in every aspect. In particular you are cautioned not to place undue reliance on any forward looking statements regarding our belief, intent or expectations with respect to BikeExchange's businesses, market conditions and/or results of operations, as although due care has been used in the preparation of such statements, actual results may vary in a material manner. Information in this presentation, including forecast financial information, should not be considered advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities in the Company. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice.

Forward-looking statements

This presentation may contain forward-looking statements which are statements that may be identified by words such as "may", "will", "would", "could", "expects", "intends", "anticipates", and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions and on a number of best estimate assumptions regarding future events and actions that, at the date of this document, are expected to take place. No person who has made any forward-looking statements in this document has any intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this document, other than to the extent required by law. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company.

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Kitzuma Acquisition - Highlights

• Kitzuma is a high growth business servicing all major regions of North America. The service overcomes the difficulties of shipping all types of bikes including e-bikes.
• Complementary business to the current BikeExchange North American operations providing a value-add service with proven appeal to retailers, brands and customers.
• Significant potential to scale considerably in 2022 from the strong foundation of 30+ key existing North American retailer and brand accounts.
• The Kitzuma logistics model and technology platform is globally scalable and can be replicated by market. The primary ambition is to roll out the service across the other BikeExchange existing regions.
• Three co-founders, and majority shareholders, Taylor Essick, Chris Cosgrove and Tony Eggers, highly-engaged with extensive experience, will all remain in the business.
• 100% acquisition of shares for US$3.375 million as of 22 December, 2021. Majority of the consideration is paid via equity (deferred BEX shares) with a US$1.113m upfront cash payment. Funded by existing cash reserves of A$11.5 million (as at 30 November, 2021) without the requirement for a capital raise.
• The acquisition is expected to add over A$2 million of revenue to the Group in the second half of FY22.
• Accelerates BikeExchange's North American growth plans and reduces planned organic growth spend in H2 FY22.

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Kitzuma LLC - Overview

• Kitzuma: Specialist bike delivery service / logistics business from retailers to consumers across the USA.
• • Deliver "Ready to ride" bikes.
  • Ensuring safety, efficiency through a purpose built white glove process.
  • No boxes or assembly. Bikes picked up assembled from retailers / brands.
  • Logistics platform and technology developed by the Kitzuma team
• 3x Founders to remain in business as Key Executives.
• • Taylor Essick - Founder and a logistics / shipping professional.
  • Chris Cosgrove and Tony Eggers - Strong Logistics / Technology career backgrounds.
• Replicable model globally. Enabling e-Commerce and removing friction on the journey for brands, retailers and customers when purchasing a bike.
• 100% acquisition for USD $3.375m (~AUD$4.75m). Majority equity transaction with 67% in BEX Shares (deferred issuance up to 5 years) and 33% cash component (US $1.113m). The vendors can receive up to 50% of the BEX deferred shares 12 months after completion, with the remaining 50% to be received no earlier than 24 months after completion (and up to 5 years from the completion date).

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Kitzuma: Problem Solved & Core Services

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PROBLEM KITZUMA IS SOLVING / FRICTION IT IS REMOVING

• Kitzuma disrupts the typical model:
  Manufacturer builds up a new bike, then breaks it down again to box it up
  ---> Shipping company delivers it via truck / air cargo to the retailer / consumer; ----> Recipient has to unbox and rebuild the bike.
• Shipping bikes "Ready To Ride" (no boxes) across states, enabling more e-Commerce (Retailers offer this to consumers) through a trustworthy service.
• Kitzuma ships all types of bikes including e-bikes (notoriously hard to ship.)

CORE SERVICES

• Weekly pick ups from stores. Bikes already built in retailers.
• Kitzuma ensures the bike is ready to ride upon delivery with the consumer.
• Kitzuma has built a logistics & booking platform for retailer access.
• Average over US$200 per shipment (charged to retailer).
• Service can be booked by consumers via a registered retailer.
• Working with D2C brands as well now (Wahoo deal signed for US national delivery of indoor bike).
• Planned launch of a consumer service early in 2022 for shipping ready to ride bikes for people travelling with a bike. Designated travel hubs across North America to service pick up and drop off locations.

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