Jam City SPAC Presentation Deck | Slidebook.io

Jam City SPAC Presentation Deck

May 2021, 41 slides

investor presentation may proprietary and confidential | Jam City

disclaimer | Jam City

disclaimer continued | Jam City

disclaimer continued | Jam City

today presenters founder chairman and josh founder president and coo chief financial officer chairman and of founder of multiple start ups with successful exits accomplished media executive and gaming industry insider senior executive level oversight at several technology companies highly regarded silicon valley business executive founder and chief executive officer of pioneering social platform awarded time most influential entrepreneur of the year and vanguard among senior strategy executive at fox worked on hulu fox studios previously bus dev at and principal accounting officer at and head of finance at us search most influential people and henry crown fellow at the aspen institute jam city first senior executive hire who has overseen financial growth since inception chief business officer at played a pivotal role in raising nearly in capital and leading expansion in china previously chief operating officer at and formerly a white house fellow working for the secretary of defense | Jam City

investment thesis shared vision of creating a scaled category leader within the fast growing mobile gaming ecosystem our qualifications why we excited diverse group of successful entrepreneurs and operators relevant experience leading and advising category defining businesses brokered numerous transactions for global tech companies experienced board and advisors one of few top mobile gaming platform plays not yet public successful business model with growth and profitability at scale strong management team with committed strategic partner innovative platform enhances game performance proven ability to scale up a more as growth driver our team has served as executives advisors or on the boards of companies highlighted above including and sap among bolt slack | Jam City

our vision to make premium massively social mobile games that are an enduring part of our players lives our mission combine the best creative talent in the world with our proprietary tech platform to create the and most engaging mobile entertainment experiences | Jam City

what we believe games are the next generation social engagement platforms premium content is key to creating enduring franchises mobile unlocks global audiences and universal access to entertainment games as a service model sustains player retention and monetization a a a | Jam City

jam city at a glance statistics above and on subsequent pages reflect jam city and through as if combined unless otherwise noted for financial projections please refer to the use of projections portion of the disclaimer key definitions are provided in the appendix bookings aes adjusted i forecast woe game installs forecast million historically successful scalable tay rectal global with pipeline games planned launch million partner choice top entertainment brands average monthly elm elle an | Jam City

forever franchises game pipeline | Jam City

our games are beloved by our players our games are more engaging than many leading social media and casual gaming and have become an enduring meaningful part of the daily lives of our players average minutes spent on mobile jam as world alive its sits potter mystery i candy crush saga king bingo pop ser sam | Jam City

proprietary technology drives our success in game development live and a our jam city live central tech platform and live drives sustained performance and growth to create forever franchises performance marketing product management player management powers cost efficient user acquisition supports long term player retention unlocks organic growth and game durability enables a strategy as an ongoing growth driver for examples of the attributes highlighted above see pages and lie | Jam City

investment highlights large fast growing mobile gaming market balanced portfolio of forever franchises powerful jam city live central tech platform historically successful and scalable a strategy diverse innovative new game pipeline world class talent base and global studio network | Jam City

large fast growing market gaming is reshaping the entertainment landscape with global appeal across an immense player base and market forecast to exceed revenue by revenue by sector billions | Jam City

we have a well balanced diversified portfolio of critically acclaimed top grossing games our game portfolio including seven forever franchises is diversified across game genres and types of no single game contributed more than of total bookings in total bookings in other games licensed of total bookings owned of total bookings owned provides consistent contribution licensed drives new players and payers since jam city has won best game awards from apple and pocket in addition to a media excellence award and writer guild award nomination among many | Jam City

our owned games are a powerful profit engine case study jam franchise jam is our most enduring franchise annual bookings contribution margin since we capture full value of the jam franchise as with no royalty payments required no creative or platform restrictions around the game and full control over sequels and derivative significant long term retention bookings by install cohort as of official launch jam jam blast lifetime bookings as of contribution margin contribution margin is calculated as revenue less platform fees user acquisition marketing fees and royalties if any | Jam City

jam city live is a strategic advantage underpinning our entire business player acquisition real time bidding campaign optimization and to increase and long term roi data driven player targeting cross promotion and to keep high players within game portfolio retention content volume optimization and dynamic difficulty jam city social feature guidance event design and live management tools monetization advertising optimization economy design and management tools powered dynamic sales and offers on cat | Jam City

we leverage analytics to realize network intelligence across our portfolio predictive analysis cross promotion a feature testing dynamic level tuning player segmentation economy management targeted creative and serving million global player network monthly active users billion cumulative game installs including million in billion total hours played since with billion each year billion impressions in million new impressions daily jam city is top featured publisher in across the store and play statistics for jam city and through as if combined sensor tower top featured publisher data for full year as of | Jam City

our hands on approach to a is historically successful and scalable deal closing at combination forecast bookings increase burbank bookings increase improvements post transaction planned improvements post transaction increased high monetization features improved live and management increased organic discovery through enhanced publishing i store support plans to focus on improving efficiency of and marketing across portfolio plans to improve channel mix to increase revenue plans to increase content releases and event cadence bookings increase improvements post transaction invested in new features invested in to efficiently double installs significantly increased event and merchandising cadence has more than doubled from in to in berlin bookings increase improvements post transaction improved revenue monetization greatly increased efficiency and volume increased new feature and general live cadences game in the world by trailing month revenue social casino genre social casino genre casual puzzle genre social casual puzzle genres new game titles subject to change and license assignment subject to licensor approval for financial projections please refer to the use of projections portion of the disclaimer ame frozen frozen | Jam City

jam city and combine together two highly creative leaders in mobile gaming we plan to leverage jam city strengths to maximize long term potential bookings millions forecast world class talent and complementary games deep story narrative game genre strong pipeline of licensed games live data science and jam city live central tech user acquisition and monetization consumer insights marketing and publishing for financial projections please refer to the use of projections portion of the disclaimer jam city gits | Jam City

we have a focused game plan to improve performance across the portfolio expanding audience and growth driving monetization data science improve budget allocation and social campaigns with jam city live creative channel mix increase marketing creative throughput and testing with in house talent and resources improve channel mix with more advertising partners organics increase store featuring and optimize store page for content event cadence revenue increase content cadence and leverage jam city narrative increase seasonal event cadence and subscription and season pass offerings optimize mediation waterfall and add additional networks placements and partnerships select targeted results reduced cost per install increased organic installs increased average revenue per install increased revenue see | Jam City

our pipeline of releases is expected to accelerate organic growth for the next several years game launched game launch near term game launch mid term game launch mid term game launch long term game launch long term game pipeline and financial projections do not include unsigned third party future owned or future a licensed games including titles launch windows and license assignment and renewals subject to licensor approval | Jam City

our talent aligns well with the future of mobile gaming world class team of people with a broad range of experiences from the most successful entertainment media and gaming companies across our jam city studios located in countries around the world social networks premium entertainment game development live and technology our team includes dozens of individuals with or graduate degrees in fields including data science behavioral science and psychology includes both jam city and employees ore at go an via double gown | Jam City

key attributes of our business model live optimization helps to maintain steady financial base and bookings visibility contribution margin typically increases as games mature requiring decreased spend strong pipeline of game releases should create an organic growth engine for years to come inherent operating leverage helps drive margin expansion as game portfolio grows | Jam City

performance metrics the fundamental driver of our continued growth at scale is our large payer base with increasing average monthly spend to a lesser degree we capitalize on our global player network for payer conversion monetization and cross promotion global player network mau average monthly active users monthly payers average monthly paying users monthly spend average bookings per monthly paying user payer activation conversion payer conversion months quarterly bookings key definitions are provided in the appendix i jam city jam city | Jam City

our opportunistic user acquisition spend in is profitable and outperforming spend in prior year user acquisition spend and bookings by install year jam city has historically returned over of its user acquisition spend within one year in jam city took advantage of a unique opportunity to meaningfully increase investment in user acquisition for long term growth and that cohort outperformed spend in the prior year total user acquisition spend jam city only millions bookings jam city only by yearly install cohort | Jam City

consolidated financial projections more than of our bookings come from prior year payer cohorts providing increased confidence in our performance estimates bookings millions adjusted millions forecast strategic investment for long term growth in forecast new games cumulative from onwards other games current forever franchises adjusted excludes non cash stock based compensation expense and non recurring one time expenses pro financial projections include combined jam city and for all years highlighted game pipeline and financial projections do not include unsigned third party future owned or future a for financial projections please refer to the use of projections portion of the disclaimer | Jam City

financial forecasts and growth assumptions long term steady state revenue user acquisition as of revenue other as of revenue adjusted as of revenue revenue is defined as the amount of bookings recognized under us pro financial projections include combined jam city and for all years highlighted game pipeline and financial projections do not include unsigned third party future owned or future a for financial projections please refer to the use of projections portion of the disclaimer on cit i | Jam City

transaction overview highlights is an publicly listed special purpose acquisition company with million cash held in trust at closing of the transaction will combine with jam city and in a transaction that values the combined company at a billion post money enterprise value implies bookings implies concurrent with the closing of the transaction and jam city to raise million in pipe proceeds sponsor has committed to invest million in the pipe has committed to invest million in the pipe in addition to committing to invest in the pipe sponsor has agreed to forfeit million founder shares and subject million founder shares to vesting at and per share split evenly cash proceeds from the transaction will be used to finance the acquisition of among other things fund cash merger consideration to ventures initially invested in and pay fees and expenses in connection with the transaction after giving effect to the transaction the combined company will have approximately million of cash on its balance sheet to accelerate growth via future a and other strategic initiatives at closing of the transaction combined company will implement a dual class structure with super voting rights such that will have majority voting control and continue consolidating combined company financial results to receive governance and shareholder rights commensurate with controlling stockholder status including pro rata rights to retain its controlling position post closing more details in the various exhibits to the business combination agreement sources and uses of funds illustrative subject to change millions sources uses cash in trust cash to balance sheet pipe raise cash to shareholders company closing cash company debt cash to ventures company debt company equity company equity deal fees expenses total total post transaction ownership illustrative subject to change post transaction ownership chart above does not include i unvested shares held by sponsor or warrants assumes no redemptions from public stockholders new shares issued in the merger based on an assumed value of per share shares issued in the pipe at a price of per share | Jam City

bookings growth operational valuation bookings millions millions bookings growth adjusted bookings | Jam City

appendix key definitions | Jam City

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our business ability to execute our strategy the proposed business combination and your investment in securities are subject to many risks before making a decision to invest in the securities offered hereby you should carefully evaluate and consider all of the risks and uncertainties with respect to such investment these risks include but are not limited to the following risk relating to the business combination and integration of jam city and businesses directors and officers of have potential conflicts of interest in recommending that stockholders vote in favor of approval of the business combination initial stockholders have agreed to vote in favor of the business combination regardless of how our public stockholders vote initial stockholders directors officers advisors and their affiliates may elect to purchase shares or public warrants from public stockholders which may influence a vote on the business combination and reduce the public float of our common stock subsequent to the consummation of the business combination we may be required to take write downs or write offs and impairment or other charges that could have a significant negative effect on our financial condition results of operations and stock price which could cause you to lose some or all of your investment we may invest or spend the proceeds of the business combination in ways with which the investors may not agree or in ways which may not yield a return each of jam city and have incurred and will incur substantial costs in connection with the business combination and related transactions such as legal accounting consulting and financial advisory fees has not yet performed an analysis of the possible impact to its sec reports of the recent statement by the staff of the sec on accounting and reporting considerations for warrants issued by special purpose acquisition companies or whether any of financial statements included in such sec reports will be restated as a result of such sec staff statement as a result of this analysis may be required to account for its warrants as a liability and to reflect the changes in fair value on its earnings which could have an adverse impact on its financial condition results of operations and stock price in addition if is required to restate its financial statements such restatement would be required to be made prior to filing a registration statement proxy statement in connection with the business combination which could have the effect of delaying the anticipated for completion of the business combination and related private placement while jam city and work to complete the business combination and integrate the jam city and businesses and operations management focus and resources may be diverted from operational matters and other strategic opportunities jam city and operations may be restricted during the pendency of the business combination pursuant to terms of the our actual financial position and results of operations may differ materially from the unaudited pro financial information presented to investors there can be no assurance that the common stock issued in connection with the business combination will be approved for listing on the following the closing or that we will be able to comply with the continued listing standards of the | Jam City

the ability of stockholders to exercise redemption rights with respect to a large number of shares could deplete trust account prior to the business combination and thereby diminish the amount of working capital of the combined company uncertainty about the effect of the business combination may affect our ability to retain key employees and integrate management structures and may materially impact the management strategy and results of our operation as a combined company we may incur successor liabilities due to conduct arising prior to the completion of the business combination some of our or existing agreements contain change in control or early termination rights that may be implicated by the business combination some of our or relationships with its customers and suppliers may experience disruptions in connection with the business combination which may limit our business although our management and the management of expect that the business combination will produce substantial synergies the integration of the two companies with geographically dispersed operations and with different business cultures and compensation structures presents significant management challenges there can be no assurance that this integration and the synergies expected to result from that integration will be achieved as rapidly or to the extent currently anticipated except as otherwise noted below references to we and our below refer to jam city and collectively risks relating to our business and industry the covid pandemic and containment efforts across the globe have materially altered how individuals interact with each other and have materially affected how we our studios and business partners are operating competition within the entertainment industry is intense and our existing and potential users may be attracted to competing forms of entertainment such as television movies and sporting events as well as other entertainment and gaming options on the we derive a substantial majority of our revenue from our games distributed on the store and play if we are unable to maintain a relationship with each of apple and or if either of these third party platforms impose less favorable terms or compete against us or change how they display games in their stores our business will suffer we have a history of net losses and experience both quarterly and annual fluctuations in our operating results including net income loss where such fluctuations are due to a number of factors including but not limited to i the timing of contingent consideration payments in connection with acquisitions fluctuations in operating expenses such as sales and marketing incremental amortization expenses from acquisitions which we expect to occur in the case of jam city acquisition of and stock | Jam City

based compensation charges related to equity grants which may result from the business combination in connection with existing warrants and any related payments the third party platforms on which we publish our games and the advertising channels through which we acquire some of our users often have the unilateral ability to change and interpret the terms of our and agreements with them we must develop and launch new games enhance our existing franchises and games and evolve successful new games into franchises so our users will continue to play our games make purchases of virtual goods and currency within our games and be receptive to advertising within our games delays to the expected launch of new games or in particular new games within our existing franchises could harm our reputation business financial condition and operating results economic downturns and political and market conditions beyond our control could adversely affect our business financial condition and results of operations our free to play business model depends on in transactions in our games and our financial condition and results of operations will be materially and adversely affected if we do not continue to successfully implement this model we plan to continue to make acquisitions and if we are unable to identify suitable targets successfully execute planned acquisitions or integrate our acquisitions our business could suffer our projections will be subject to significant risks assumptions estimates and uncertainties including assumptions regarding future legislation and changes in regulations both inside and outside of the united states as a result our projected revenues market share expenses and profitability may differ materially from our expectations we depend on a small number of games for a significant portion of our in transaction bookings if these games do not continue to succeed or we do not release highly successful new games in the future our bookings will decline we rely on a very small portion of our total users for substantially all of our revenue that we derive from in transactions although our games are available internationally we derive a substantial majority of our revenue from one country the united states we have a history of net losses including net losses of million and million in years ended and respectively our ability to advertise is affected by competition for advertisements relationships with advertisers and limitations from third party and mobile device and operating system providers if any of these were to occur our advertising revenue and operating results would be adversely affected distribution and marketing of and access to our products depends in significant part on a variety of third party publishers and platforms if these third parties limit prohibit or otherwise interfere with or | Jam City

change the terms of the distribution use or marketing of our products in any material way it could materially adversely affect our business financial condition and results of operations we may experience fluctuations in our quarterly operating results due to a number of factors which make our future results difficult to predict our industry is intensely competitive and subject to rapid changes if consumers prefer our competitors games or services over our own our operating results could suffer if users do not find our game genres compelling and engaging we could lose users and our revenue could decline our games are built using the proprietary source code of third parties including unity a proprietary game engine if we are unable to renew licenses to proprietary source code underlying our games including unity or the terms and conditions of these licenses change at the time of renewal our business financial condition and results of operations could be adversely affected we rely on unity to maintain its proprietary engine that allows us to distribute our games on multiple platforms if unity discontinues support for one or more of these platforms our business financial condition and results of operations could be adversely affected our games and franchises based on third party entertainment intellectual property depend on the continued popularity of such entertainment intellectual property and we have little to no control over such popularity we may incur impairment charges for minimum guarantee royalty or other payments for our third party licensed intellectual property if our forecasts are inaccurate or if related games fail to perform as expected for games featuring licensed third party intellectual property delays in the launch of the related game could result in the licensor charging a penalty increasing the minimum guarantee or canceling the license altogether any disruption of service at our third party data centers including but not limited to web services could interrupt or delay our ability to deliver our services to our consumers we have an increasing number of studios and facilities in different geographic locations which may subject us to increased business additional regulation and economic risks that could affect our financial results we localize and offer our games for certain jurisdictions which is time and resource intensive we may not achieve comparable success for such games as they have historically had in other geographies we have experienced significant rapid growth in our operations and we cannot assure you that we will effectively manage our growth we have historically developed and launched games in the puzzle and story genres our investments and efforts in new game genres may not be successful if we develop new games that achieve success it is possible that these games could divert users of our existing games which could harm our operating results certain of our key operating metrics are subject to inherent challenges in measurement and real or perceived inaccuracies in such metrics may negatively affect our business and operating results we will need to continue to expand and enhance our unified technology platform related infrastructure and data analytics to support our business | Jam City

failure to comply with anti corruption and anti money laundering laws including the and similar laws associated with our activities outside of the united states could subject us to penalties and other adverse consequences changes in tax laws or regulations could be enacted or existing tax laws or regulations could be applied to us or our users in a manner that could increase costs and harm our business we could be subject to additional income tax liabilities our international operations subject us to potential adverse tax consequences taxing authorities may successfully assert that we should have collected or in the future should collect sales and use value added or similar taxes and we could be subject to liability with respect to past or future sales which could adversely affect our business and results of operations changes in financial accounting standards or practices may cause adverse unexpected financial reporting fluctuations and affect our reported operating results our ability to use our net operating losses to offset future taxable income may be subject to certain limitations benefits from significant tax credits from the and governments any change in the availability of or eligibility for those credits could materially impact financial results local regulations related to the use of the language also impact ability to claim those credits risks related to employees and culture the loss of one or more of our key personnel or our failure to attract and retain other highly qualified personnel in the future could harm our business if we are unable to maintain and nurture our company culture our business may be harmed | Jam City

risks related to intellectual property if we do not adequately protect our intellectual property rights it may be possible for third parties to obtain and improperly use our intellectual property and our business and operating results may be harmed our licenses with our key license partners may prove too short in duration or too limited in scope we could be required to cease certain activities or incur substantial costs as a result of any claim of infringement of another party intellectual property rights we use open source in our games that may subject our code to general release or require us to engineer such code which may cause harm to our business risks related to will own a significant portion of our company including majority voting control via a dual class structure with votes per share held only by so it may take actions that may not benefit other stockholders will have a right to designate two directors to the board and will have significant influence in determining the composition of the rest of the board as a result of its voting power and thus will have significant influence over the company governance will have various negotiated contractual rights in addition to its voting power as a stockholder including a structured right that allows it to maintain its ownership level and to ensure continued control of the company may compete with us which could reduce our market share competitive position in certain markets may constrain our ability to build and maintain partnerships risks related to public company requirements we are an emerging growth company and we cannot be certain that the reduced disclosure requirements applicable to emerging growth companies will not make our common stock less attractive to investors if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business the price and trading volume of our securities could decline there has been no prior public market for jam city common stock the stock price of the combined company class a common stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the subscription price although we do not intend to rely on controlled company exemptions from certain corporate governance requirements under the rules if we rely upon these exemptions in the future you will not have the same protections afforded to stockholders of companies that are subject to such requirements if we fail to maintain effective internal control over financial reporting in the future the accuracy and timing of our financial reporting may be adversely affected general risks catastrophic events may disrupt our business | Jam City

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