LTTC Presentation April 2014

Lattice Inc.

RedChip Conference April 24, 2014

Ticker Symbol: LTTC

© 2011, Lattice Incorporated. All Rights Reserved.

Safe Harbor Statement Management’s prepared remarks contain forward-looking statements which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore we refer you to a more detailed discussion of the risks and uncertainties in the company’s filings with the Securities and Exchange Commission.

The Company

!  Technology leader in the correctional facilities

market. !  700% revenue growth from 2009 to 2013. !  Provides a suite of cloud based services

enabling smaller facilities access to technology traditionally only available to large facilities.

!  Providing secure communications and

information technology since 1973.

Financials

2009 2010 2011 2012 2013 Revenue 1,096 3,554 4,572 7,530 8,270 COGS 464 2,343 3,243 5,094 5,461 GP 632 1,211 1,329 2,436 2,809 SGA 1,104 1,299 2,116 1,982 2,769 EBITDA* (472) 104 (483) 830 44 * Excludes Government services Division and associated corporate expenses

Correctional Technology Market Overview

!  $5.0B+ Market total in Federal, State, and County

!  Additional revenue from other non-communication based services

!  2.3 Million Inmates !  Strong recurring revenue base !  Prison population steadily growing at 3%

annually, capturing market share. !  Communications revenues are split with

prison, alleviating pressure on state and county budgets.

Innovisit Acquisition

!  Industry Leader in Video Visitation Technology " Integrated with Lattice ICON Platform in 2013 " Implemented first installation in Q1 2013

! Acquired Company Q4 2014 " Adds 15 new states " Currently serving 90 correctional facilities " Will add $1.5 - $2.0M additional revenue in2014

Competitive Landscape

!  Small Regional Service Providers "  Solid regional relationships with

smaller facilities "  Outdated Technology generating

lower revenues per inmate !  Large National Service Providers

"  Focusing on larger facilities "  Multiple technology platforms through

acquisition making service inconsistent to smaller facilities.

"  Losing smaller facilities as customers

Business Model – US Market

!  Exclusive Rights to Facility "  Revenue sharing with Facility "  Provides extra revenue for strapped

state budgets "  Range from 20-60%

!  Up-sell Leading Features & Products Provides customer stickiness

"  Ability for family members to credit inmate’s call account

"  Video Visitation "  Kiosk for cash management and value

added services "  Integrated jail management software

solution (difficult to replace)

Sales and Marketing

!  Direct Sales to Facilities "  Local sales presence "  Expand upon established local

concentration "  Referrals important for winning county

customers !  Indirect Wholesale & Technology License

Sales "  Utilized by channel partners for larger

facilities and State bids "  For out of direct sales region "  Builds Lattice footprint and brand

recognition

Foreign Market Overview

!  Competitive Landscape "  Incumbent Telcos primary competition "  Legacy payphone model (collect

calling) "  New technology yet to be introduced

! Lattice has Unique Technology Advantage "  Lattice technology provides cost

reductions "  Lattice Model provides enhanced

revenue streams "  Lattice technology provides enhanced

security and investigative tools


!  Business Model "  Technology sales/license revenue "  Transaction revenue "  Services revenue

! Current Foreign Sales Pipeline Asia Canada Israel Mexico U.K. India Belgium Caribbean


!  Canadian Market "  Awarded four installations "  All 4 being implemented in 2013 "  Partnered with Telus Canada for

larger provinces "  Smaller facilities partnering with

Wymactel !  U.K. Market

"  First site operational in Gibraltar (2011)

"  Successful trial completed with Sodexo Justice Services

"  90,000+ inmate potential in UK

Foreign Market Opportunity

!  Retained Communication Media Advisors to Accelerate International Expansion:

"  Identify most attractive markets for

expansion. "  Identify potential partners and

licensees that best enable Lattice to successfully win new business in these markets.

! Phase I of the project will be

completed in Q2 of this year.

Device Agnostic

SECURE COMMUNICATIONS CLOUD

COMMISSARY ORDERING

SCHEDULING SERVICES

LEGAL COUNSEL

INMATE E DEVICE

EMAIL

INTEGRATION SERVICES

MUSIC DOWNLOAD

EDUCATION

INVESTIGATION

VIDEO VISITATION

SOCIAL MEDIA

DEDICATED INMATE STATION

TEXT MESSAGING VOICE MAIL

HOME PC

SECURE FIREWALL

Secure

Secure Communica-on Layer

ICON will consist of five major components:

•  Products and Services management •  Customer Informa-on Database

•  Payment Processing

•  Accoun-ng/Billing •  Customer Care

ICON Core

All communica-on between payments and services will u-lize ICON’s Secure

Communica-on Layer. Outside development firms will have standard interfaces to u-lize

Integrated Correc-ons Opera-ons Networks (ICON)

Communication

ICON Application Management

ICON will provide centralized database management and payment capability. U-lizing the a central core engine will allow mul-ple soMware applica-ons to reuse soMware processes saving

development -me and producing far more efficient business prac-ces.

Jail Management System

Secure

Products and Services managed and accounted for by ICON

Communication

PIN Debit and PPC Phone Accounts



Secure

The ICON JMS includes the following features:

• Reporting • Scheduling

• Multi-Facility/Multi Agency Integration

• Special Diet/Meal Count • Workflow

• Biometrics • Booking

• Trust Accounting/General Ledger • Medical Records

• Incident Reporting • NCIC Background screening

Communication


The ICON Jail Management System (JMS) is a key component to the ICON

core. The JMS stores and manages correc-onal facility processes, inmate

booking, inmate informa-on, and trust accoun-ng


ICON Jail Management System

Investment Highlights

!  Rapid expansion of the Company’s service and technology sales to drive overall growth and margin improvement.

!  Lattice offers industry leading proprietary technology to traditionally underserved area of the market—small and midsized correctional facilities.

!  International expansion with key partnerships growing sales and margin growth while increasing the Company’s footprint.

!  700% revenue growth over the last 4 years. Early stages of growth potential.

Q&A

Contact:

Jon Cunningham RedChip Companies, Inc.

1.800.REDCHIP x107 | 407.644.4256 x107 [email protected]

Paul Burgess

CEO [email protected]

856-910-1166 ext 2111

LTTC Presentation April 2014

Technology

Transcript of LTTC Presentation April 2014