Coda Octopus Group, Inc

Coda Octopus Group, Inc. World Leader in Sound Underwater Technology Corporate Presentation September 2016 Forward-Looking Statements This presenta...
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Coda Octopus Group, Inc. World Leader in Sound Underwater Technology

Corporate Presentation September 2016

Forward-Looking Statements This presentation contains statements that do not relate to historical or current facts, but are “forward looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to future events or trends, our future prospects and proposed new products, services, developments, or business strategies, among other things. These statements can generally (although not always) be identified by their use of terms and phrases such as anticipate, appear, believe, could, would, estimate, expect, indicate, intend, may, plan, predict, project, pursue, will, continue, and other similar terms and phrases, as well as the use of the future tense. Examples of forward looking statements in this report include, but are not limited to, the following categories of expectations about: customer demand for our products and market prices; general economic conditions; our reliance on a few customers for substantially all of our sales; the intensity of competition; our ability to collect outstanding receivables; the amount of liquidity available at reasonable rates or at all for ongoing capital needs; our ability to raise additional capital if necessary to execute our business plan; our ability to attract and retain management, and to integrate and maintain technical information and management information systems; the outcome of legal proceedings affecting our business; and our insurance coverage being adequate to cover the potential risks and liabilities faced by our business. Actual results could differ materially from those expressed or implied in our forward looking statements. Our future financial condition and results of operations, as well as any forward looking statements, are subject to change and to inherent known and unknown risks and uncertainties. See the section entitled “Risk Factors”, contained herein for a discussion of these and other risks and uncertainties. You should not assume at any point in the future that the forward looking statements in this report are still valid. We do not intend, and undertake no obligation, to update our forward looking statements to reflect future events or circumstances, except as required by law.

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Overview • Small company, profitable since 2011 with significant opportunities • World’s best sonar technology: seeing and measuring in real time in zero visibility conditions underwater • Strategic solution development for key applications through unique sonar, software and engineering capabilities globally • Established business with strong pedigree in subsea products and defense engineering • Products Business has the world’s only real-time 3D imaging sonar • Engineering Businesses have long-established relationship with US and UK Defense Primes, such as Raytheon, Northrop and BAE, with a number of proprietary parts for significant programs such as Phalanx® CIWS, yielding recurring and growing revenues

• Strong culture of IP ownership in products segment and sole supplier status by engineering segment Coda Octopus Group, Inc. - Corporate Presentation

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What Sets Coda Apart: Real-time 3D Sonar Seeing & Measuring in Real Time in Zero Visibility Conditions Underwater Echoscope®

Dimension®

Echoscope® C500

See 3D Video Gallery at www.codaoctopus.com

Echoscope® 3D Product Line

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3D Product Line Competing Technology is No Comparison 3D Multibeam Produces static map after hours or days of processing NO Real-Time Image

OR 2D Imaging Produces 2D real-time image with no depths NO Mapping

Echoscope ® Real-Time 3D Imaging AND Real-Time Mapping – see the shadows disappear Client deliverables completed instantaneously.

See 3D Video Gallery at www.codaoctopus.com

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3D Product Line The Challenging Zero-Visibility Environment In Which We Work

Comparison of an ROV camera, left, and Echoscope®, right, approaching a well head in the Gulf of Mexico. Color = depth See 3D Video Gallery at www.codaoctopus.com

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Coda Octopus Group: Value Drivers Subsea Market must continue to adopt real-time 3D sonar into work flow – Coda in leadership position

Profitable and Growing Business

Significant lead over competitors in respect of real-time 3D sonar

Reputation for Technological Excellence

Real-time 3D sonar is one of only two breakwater construction solutions in the world

Diversified Business Model Helps to Buffer Cyclical Sectors, such as Oil & Gas

Inventor of only available real-time 3D sonar in market Highly skilled workforce – over 70 engineers in the company Substantial IP and know-how

World’s only fully integrated underwater inspection systems – 30 in use in US ports

Recent advancement of real-time 3D technology paves the way for increased market share

Sole source supplier for ground equipment Decontamination Unit - for Eurofighter

Sole source supplier for US defense programs such as Phalanx® CIWS

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Products Business – Customers Coda Octopus Products

End-user Customers: Shell BP

Military & Defense: 30 US Ports & Law Enforcement Bodies FBI and sheriff offices US Navy

Chevron Exxon Mobil

Service Providers:

NPCC - Abu Dhabi

Technip - Oceaneering Fugro - Van Oord

Others: De Beers - Mining

Boskalis - Jan de Nul

Penta Ocean Construction

CT Offshore JD Contractors

Bohlen & Doyen -

Baird – Tusk

US Coast Guard South Korean Navy Lockheed Martin Marlin AUV

Complex Dredging

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Key Markets – Products Business

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The Building Blocks Of Coda’s Unique Technology Real-Time 3D Sonar

Hardware: 8 GB per sec Patented algorithm

Value Add

Software: Patented Rendering

3D Image

Software: Patented Volume Rendering

Software: Integration

Software: Patented Tracking, Simplification

Moving 3D Image

External Sensors

Motion IMU

Mosaiced 3D Image

Moving 3D Images, Moving 3D models, Mosaiced 3D data

Tracked objects (position + orientation), Domain specific information, Market directed applications

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3D Product Family

Echoscope® Echoscope® C500 Dimension®

What is the Key USP? Single sensor, multi-application, for vision, mapping and measurement

3D Camera Mode – unique

3D Complex Mapping – no post-processing See 3D Video Gallery at www.codaoctopus.com Coda Octopus Group, Inc. - Corporate Presentation

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Coda Technology – Delivering Significant Performance Gains Sample Echoscope® Project ROI Snapshots: LNG Port Expansion Was: 3 blocks placed per hour Now: 10 blocks place per hour

ZADCO Sleeper Placement Was: 4 sleepers placed in 12 hrs. Now: 76 sleepers in 24-hour shifts

Productivity: > 400% Cost Saving: > $1 million Duration: 1 – 2 years

Productivity: > 3,000% Cost Saving: > $3 million Duration: 3 – 6 months

DEME Rock Dumping Zero visibility and accurate placement required

UTEC Oilfield Development Zero visibility conditions for asset placement and pipe lay

Technip / Shell Echoscope used in zero visibility saving significant NPT

Productivity: > 100% Cost Saving: > $1m Duration: 6 days

Productivity: > 100% Cost Saving: priceless Duration: 3 months

Productivity: > 100% Cost Saving: > $2 million Duration: 6 months

Coda Octopus Group, Inc. - Corporate Presentation

 Improved process with faster deliverables to client  Reduced project costs including Non-Productive Time  Complete end-to-end workflow to capture, measure and document  Increased safety and awareness  Improved Quality Control  Simplified subsea tasks  Deskilling a number of tasks

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Strategy – Subsea “Land Grab” • Over 300 real-time 3D sonar products in the market • Price is a barrier to mass adoption • Coda’s 3D product line price range: $250,000 - $500,000 • Competition’s price range: $50,000 - $300,000

• Disruptive new technology, based on existing patented technology, invented August 2015. Multiphase roll-out expected to yield: • Improved efficiencies in Production Costs • Expanded range of 3D products – new benefits, same industryleading technology • New markets where real-time 3D is an emerging need, including fisheries, additional Navy applications and bathymetric survey Coda Octopus Group, Inc. - Corporate Presentation

 Allows capture of all parts of market  Expands considerably the range of 3D products and capabilities  Opens price-competition with existing non real-time 3D  Customer choice of resolution and performance  Significantly increased power efficiency - same performance at reduced power  Cost/performance allows technology option, expected to increase demand for applications to be executed faster, safer and with real-time 3D data 13

Coda Octopus Engineering Businesses: Colmek and Martech Add significant engineering depth to Coda’s Products Business and its products

Provide significant presence in two major economic blocks

Mitigate external costs of onward development of flagship technology

Engineering Businesses

Prevent Coda’s flagship technology from stagnating Bring defense customer base to Products Business (i.e., Northrop, Raytheon & Lockheed Martin)

Capabilities allow Coda to preserve trade secrets in-house

Help to diversify revenues stream

Coda Octopus Group, Inc. - Corporate Presentation

Premier Providers of Missioncritical Defense Data Solutions and Testing Measurement in Challenging Environments  Software, mechanical and electrical engineering  Custom engineering  Software architecture  Design and production of electronics  Sub-contractor to DoD Prime Contractors  Concept, design and prototyping: FPGA, PCB, and ruggedized equipment

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Coda Octopus Engineering Business Colmek - A Coda Octopus Company Phalanx® Close-in Weapon System (CIWS)

UAV/AQS-24 – Mine Hunting System

AN/AQS-24 – Mine Hunting System

SeaRAM

New Salt Lake City Facility

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Selected Customers

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Coda Octopus Engineering Business Martech - A Coda Octopus Company • Same model as Colmek • Situated Portland, Dorset, UK • Defense Customers • Marine Business products • Increasing customer base

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Historical Consolidated Results Prior Management Performance FY 2006

FY 2007

FY 2008

FY 2009

Sales

$7.291m

$13.853m

$17.0m

$13.224m

SG&A

$7.453m

$12.35m

$13.2m

$11.238m

Net Loss

($7.559m)

($14.952m)

($7.920m)

($9.433m)

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Consolidated Results New Management Performance FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

FY 2015

Sales

$11.509

$15.723

$21.126

$22.343

$16.446

$19.234

SG&A

$7.652

$5.276

$4.867

$5.329

$5.821

$7.483

($1.778)

$1.096

$4.924

$5.315

$1.626

$1.070

($MM)

Net Income (Loss)

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Company Profile • Delaware corporation with subsidiaries in USA, UK, Australia and Norway. • Symbol: CDOC.PK Market Capitalization

$17.8MM (As of September 16, 2016)

Shares Outstanding

127.2MM

% officers and directors

1.1%

Cash and Cash Equivalents

$6.9MM (Q3-2016), $6.3MM (Q3-2015), $5.3MM (Q3-2014)

Current Senior Debt (Principal)

$9,200,000 (July 31, 2016 - current with debt covenants) Original Debt $15.5m (through combination of cash repayments and partial conversion into equity balance reduced to current amounts).

Interest on Senior Debt Outstanding

8.5% per annum

FYE (October) Results

2015

2014

2013

Revenues

$19,234,396

$16,446,271

$22,343,540

EBITDA

$2,723,481

$3,689,264

$6,981,974

Net Income

$1,070,292

$1,626,403

$5,315,487

Non-Recurring Expenses

$1,300,000

$88,500

-

Adjusted Net Income

$2,370,000

$1,715,000

$5,315,000

($2,955,842)

$3,070,390

Net (Decrease) Increase in Cash

Coda Octopus Group Inc - Investor Presentation

$1,018,267

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Appendix • Management • Board of Directors • IP/Patents • Geographic Location of our Operations

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Management Annmarie Gayle, LL.B, LLM – Chief Executive Officer and Director – Denmark Ms. Gayle has been our Chief Executive Officer and a member of the Board of Directors since 2011. Prior thereto, she spent two years assisting with the restructuring of our Company. She previously served with the Company as Senior Vice President of Legal Affairs between 2006 and 2007. Earlier in her career she worked for a major London law practice, the United Nations and the European Union. Ms. Gayle has a strong background in restructuring and has spent more than 12 years in a number of countries where she has been the lead adviser to a number of transitional administrations on privatizing banks and reforming state owned assets in the CEE countries including banking, infrastructure, mining and telecommunications assets. Ms. Gayle has also managed a number of large European Union funded projects. Ms. Gayle holds a Law degree gained at the University of London and a Masters of Law degree from Cambridge University. She is qualified to practice as a solicitor in England & Wales. Because of her wealth of experience in corporate governance, large scale project management, restructuring, strategy, structuring and managing corporate transactions, we believe that she is highly qualified to act as our Chief Executive Officer.

Geoff Turner – Director – England, UK Mr. Turner has been a director since 2011. He has been with the Company since May 2006 and during that time has had a number of roles including Senior Vice President, Mergers and Acquisitions of Coda Octopus Group, Inc. and President European Operations. From September 2009 to 2011, he acted as the Company’s Chief Executive Officer. He acted as interim Chief Financial Officer from January 2010 to March 2011. Previously, he served as a consultant from November 2005 to April 2006 through his consultancy company Taktos Limited. He has been involved in the IT industry for over 30 years, in both technical and commercial roles. He spent the 13 years up to 1999 with GE Information Services (& International Network Services), the then global market leader in Electronic Commerce, where he was Director of Business Development for Europe, Middle East and Africa. During this time, in addition to his business development roles he held posts as Software Products Director, and in global channel sales management. Since leaving GE in 1999, Mr. Turner has been involved as a shareholder and a consultant through Taktos Limited in a number of businesses ranging from financial services businesses to a provider of supply chain management software. Because of Mr. Turner’s expertise in IT and business development, the Company believes that he is highly qualified to act as a member of the Board of Directors.

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Management Blair Cunningham – President of Technology and Director; Chief Executive Officer of Coda Octopus Products, Inc. – US Mr. Cunningham has been with the Company since July 2004 and has had a number of roles including President of Technology and CEO of Coda Octopus Products, Inc. (current position), Chief Technology Officer and Head of R& D Operations of Coda Octopus Group, Inc. since 2005 and Technical Manager of Coda Octopus Products Ltd between July 2004 and July 2005. From March 1992 to present he has served as a Director of Softworks Business Systems Solutions Ltd, an Aberdeen, Scotland, based software company which developed turnkey software solutions for large public companies. From 1990-92, Mr. Cunningham was an Analyst/Programmer with an Aberdeen company (now defunct). Mr. Cunningham received an HND in Computer Science in 1989 from Moray College of Further Education, Elgin, Scotland. Because of Mr. Cunningham’s expertise in technology, the Company believes that he is highly qualified to serve in his current roles.

Michael Midgley – Acting Chief Financial Officer and Director; Chief Executive Officer of Coda Octopus Colmek, Inc. – US Mr. Midgley has been our acting Chief Financial Officer since 2013. He has also been Chief Executive Officer of Colmek since 2010, which he joined in 2008. He is a qualified CPA and has had his own practice as well as working for regional accounting firms, specializing in SEC and Tax practice areas. Mr. Midgley attended the University of Utah. Due to Mr. Midgley’s expertise in financial reporting, we believe that he is highly qualified to serve as the Company’s Chief Financial Officer and as a member of the Board of Directors.

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Board of Directors Michael Hamilton – Chairman of the Board – US Mr. Hamilton has been our Chairman of the Board since June 2010. Since 2014, Mr. Hamilton has provided accounting and valuation services for a varied list of clients. He was Senior Vice President of Powerlink Transmission Company from 2011 through 2014. From 1988 to 2003, he was an audit partner at PriceWaterhouseCoopers. He holds a Bachelor of Science in Accounting from St. Frances College and is a certified public accountant and is accredited in business valuation. Because of Mr. Hamilton’s background in auditing, strategic corporate finance solutions, financial management and financial reporting, we believe that he is highly qualified to act as the Company’s Chairman.

Robert Ethrington – Director – UK Mr. Ethrington has been a member of our Board of Directors since 2013. Since 1989, Mr. Ethrington has been a director of Resanco Ltd., a UK based consultancy firm specializing in competitive strategy and corporate restructuring services that operates in both developed world countries and in developing countries of Asia and Africa and economies of the former Soviet Union. He has also been a director of Resendjer srl, a Moldova based manufacturer of essential oils, since 2001. Mr. Ethrington earned a Bachelors’ of Arts Degree from Leeds University and an MBA from Cranfield University. Because he is a strategic and financial expert with forty years of experience in the fields of corporate restructuring in both the private and public sectors, we believe that he is highly qualified to serve as a member of our Board of Directors.

Chuck (Francis) Rogers – Director – US Mr. Rogers has been a member of our Board of Directors since July 2016. Since 2014, he has been affiliated with Score and KMDR, LLC, a California based financial and business consultancy firm. Mr. Rogers was President and Chief Executive Officer of three diverse businesses from 1998 to 2014; the most significant was the ASC Group, Inc., an electronics systems integrator serving the defense and aerospace market worldwide. He holds a B.S. in Ceramic Engineering from Alfred University and an MA in Economics and Finance from St. Mary’s University. Because of his experience in running large companies and financial expertise, we believe that Mr. Rogers is highly qualified to be a member of our Board of Directors.

Annmarie Gayle, LL.B, LLM, Geoff Turner, Blair Cunningham, and Michael Midgley – Directors

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Patents USPTO No.

Title

6,438,071

Method for producing a 3D image

6,532,192

Subsea positioning system and apparatus

7,466,628

Method of constructing mathematical representations of objects from reflected sonar signals

7,489,592

Patch test for 3D sonar data

7,898,902

Method of representation of sonar images

8,059,486

Method of rendering volume representation of sonar images

8,854,920

Volume rendering of 3D sonar data

9,019,795

Method of object tracking using sonar imaging

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Operations Coda Octopus Products Ltd Edinburgh, Scotland (UK)

Coda Octopus Colmek Inc. Salt Lake City, UT (USA)

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Coda Octopus Group Inc. & Coda Octopus Products Inc. Lakeland, FL (USA)

Marine Technology

43

Engineering

75

Coda Octopus R&D AS

35

Bergen (Norway)

Coda Octopus Martech Ltd. Portland, Dorset (UK)

3

35

4

Coda Octopus Products Pty Ltd. Perth (Australia)

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Contact Information Coda Octopus Group, Inc. World Leader in Sound Underwater Technology

OTC: CDOC.PK www.codaoctopusgroup.com Investor Relations: MDC GROUP Contact: David Castaneda (414) 351-9758 | [email protected]