Emerging Companies 13-‐Jan-‐2014 Price $0.165 Spec Buy TZ Limited Stop $0.10 Overview: TZ Limited (“TZL”, the Company”) is an Australian technology company focused on asset security. It has developed devices and software which enable the management, control, and monitoring of business assets, including aircraft, buildings, data centres, and parcel delivery systems. TZL’s core technology enables remote operation of mechanical devices such as fasteners and locks. It was founded in 1998 and listed on the ASX via a reverse merger in 2004. Start Up Growth Maturity Catalysts: Renewed balance sheet health and greater concentration on CORPORATE SUMMARY Ticker Industry Price Diluted Shares1 Market Cap Net Debt Enterprise Value Issued Capital2,1 note holder, QVT Funds has agreed to a $24m ordinary equity exchange. $8m and operating cost savings up to 25 per cent. MANAGEMENT Chairman ExecuYve Director Company has been impaired by high levels of historic executive turnover and an unsuccessful tender for Australia Post in 2012. Convertible note exchange is subject to shareholder approval in February. Investment View: TZL is a speculative turnaround play with leverage to Track Record Fair Fair Strong FINANCIAL OVERVIEW FY13 Revenue NPAT EBITDA Historic Growth PE Div Yield data center growth and a trend towards the ‘internet of things’. $2.7m -‐$16m -‐$6m N/A -‐ -‐ SHAREHOLDERS Restructuring undertaken during 2013 has the potential to deliver QVT Funds1 significant operating and financial improvements. Deutsche Bank Technical InvesYng Pty Ltd Directors Top 20 Whilst further capital may be required to reach a self sustaining trajectory, current prices of ~0.5x historic investment offer value as commercial applications for TZL’s Intellectual Property portfolio expand. We expect recent successful Checklist Management ! Four years of difficult restructuring appear complete Financials ? Improving revenue although reliant on external capital Catalysts ! ! ! Pending Con Note exchange at 0.5x historic investment Share Register Stock Price Insto support growing Emerging uptrend 45.2% 7.2% 4.8% 1.6% 42.85% STRATEGY tenders with Poste Italiane and Singapore Post to boosted near term confidence, and initiate coverage with a ‘speculative buy’ recommendation. Mark Bouris Kenneth Ting Value Crea>on Opera>ons Capital Markets Hurdles: Despite cumulative investment exceeding $100m, TZL remains reliant on external capital to finance operations. Confidence towards the $128m 2. Post 2004 reverse merger The transactions are expected to drive a significantly improved financial performance in FY14 with the Company targeting ~2x revenue growth to TZL.ASX SoQware $0.15 360m $54m -‐ $54m 1. Post Con Note exchange technology sales are expected to drive growth for TZL. Loss making engineering services unit, PDT, was disposed in 2013, and convertible Target $0.29 Target Entry Limit 0.6 $0.24 $0.17 Stop Sell Limit $0.10 $0.095 Trading History 0.4 0.2 0 2011 2012 2013 2014 Glossary Archive Buy Increasing value of established business operaYons is likely to yield share price appreciaYon Base Resources 24-‐01-‐14 Spec Buy Increasing value of a new or developing business operaYon is likely to yield share price appreciaYon. Quickstep Holdings 20-‐01-‐14 Hold There exists an even balance of risks TZ Limited Research RecommendaYons 15-‐01-‐14 Sell There is elevated risk of share price depreciaYon. Algae.Tec Stop Our recommended, pre determined sell price, to be executed if the share price fails to appreciate JORC Joint Ore Reserves Commieee. A body sponsored by the Australian mining industry and its professional organisaYons, which sets minimum standards for the measurement and reporYng and mineral reserves and resources. ExploraNon A category of companies that have yet to define resources beyond the 'inferred' category according to JORC standards. Resource A category of companies that have defined resources classified as 'measured' and/or 'indicated' according to JORC standards. Reserve A category of companies that have defined mineral reserves according to JORC standards. 17-‐12-‐13 Analysts Sven Restel Imran Valibhoy Tim Morris svenr@wise-‐owl.com imranv@wise-‐owl.com timm@wise-‐owl.com About Us Contact Us Media Partners: Phone Australia International Wise owl is a global supplier of intelligence, strategic soluYons, and expansion capital for emerging companies and investors. Established in 2001, wise owl drives efficient capital allocaYon towards developing assets. 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