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Telanetix Corporation (OTC BB: TNXI) Corporate Presentation October 2009.

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Presentation on theme: "Telanetix Corporation (OTC BB: TNXI) Corporate Presentation October 2009."— Presentation transcript:

1 Telanetix Corporation (OTC BB: TNXI) Corporate Presentation October 2009

2 Safe Harbor Statement This presentation includes forward-looking statements regarding Telanetix’s business, financial condition, products, competition, technology, customers and prospects that are subject to various risks and uncertainties that may cause actual results to differ materially from those referred to in the forward-looking statements. The forward-looking statements made in this presentation are based on information known to us today and we do not undertake any obligation to update them. We refer you to Telanetix's periodic filings with the Securities and Exchange Commission, including our most recent Form 10-K and Form 10-Q. These documents describe important risk factors that could cause actual results to differ materially from those contained in our projections and other forward- looking statements.

3 Communication is moving from Hardware to Software HARDWIRED Into the Devices and the Network SOFTWARE-BASED Flexible Devices, Separation from the Network Paradigm Shift An Historic Shift:

4 SMB Segment Spend Lock-in model of Long Term Contracts High Cost Features Directory Assistance = $1.99/call International Calling = $1.49/min International Roaming = $1.29/min Minimal Service Feature Innovation Complex Purchase Process Paying Too Much for a Solution that Doesn’t Fit Their Needs $37 Billion cBeyond

5 Paradigm Change Separation of the “Pipe” from the Application/Service allows Data Pipe Provider (DSL, Broadband, Wireless) App or Service Provider Reduced Cost Enhance Features/Functionality Greater Service Flexibility Simplified Implementation Disrupting the Business Communications Industry

6 Disrupting Distribution Disruptive Direct Model 1 of 10,000+ Regional Telco Agents SMB Market Current Indirect Model SMB Market National Coverage Simple Internet Ordering Purchase/Implementation Time: Weeks Purchase/Implementation Time: Days

7 Business Voice Market Over 25 Million Businesses in the U.S. Business Voice Market Number Of Businesses In Each Segment (US) SIP Trunking DPS Individual Services SIP Trunking Individual Services

8 Hosted Market Opportunity 23 Million U.S. Businesses Have Less Than 50 Employees Key Purchasing Criteria = Hosted Voice Services –Does this save us money? –Is it simple to buy, install and use? (normally small or no IT dept.) –Is feature rich? –And, I need great support Hosted Digital Phone Service –25% of 23M $200/mo = $1.15 Billion/Month –Monthly recurring market opportunity –Just 25% represents a $12 billion annual market opportunity

9 Our Product Offerings SIP Trunking: VoIP Dial Tone for existing voice service Up market solution Digital Phone Service: Launched in 2008 VoIP Dial Tone on your existing network Business Phone System SMB focus Individual Services: Virtual attendant Conferencing Find me/ follow me # Toll free number Voic & Fax The Best Fit works “with” existing network or voice solutions Fortune 100 features Low Cost Provider Advantage Technology ownership – we provide applications ( SaaS margins) Easiest to Acquire, Implement and Use Technology design is premised on “ease of use ”

10 Key Channel Partners 76% Of Sales Are Made On One Of Our 18 Websites

11 Our Value Proposition Traditional Business Voice Hardware –$1,500 upfront for 3 business phone systems Installer (Indep. Telco Agent) –$1,000 upfront installation –$100 per year maintenance Phone Service –$50+ per line per month Total cost = $4,400 Hosted VoIP Solutions Telanetix Digital Phone Service –Bundled package includes: –3 business phones –3 lines –No installation necessary –Full PBX feature set –Product support Total cost = $1,800 60% COST SAVINGS (SMB Example: 3 Phones + 3 Lines for 1 Year)

12 Competitive Advantage Low High Cost Simple Complex Simplicity AT&T Telanetix Verizon 8x8 Sprint cBeyond Qwest Comcast Talkswitch Avaya Emerging Private Co. Carriers Premise Equipment Bundlers Hosted

13 Sales/Growth Strategy Increased Channel reach and Web/Marketing –Just beginning to ramp advertising to reach the market –With Internet advertising, clear ROI on dollars spent –Increasing each quarter Leveraging Brand Power and Exclusivity –Costco: “Business Phone Services” –Office Depot Click Through Rate: 2.1% (varies by product/campaign) –High channel loyalty/ long standing relationships Inorganic growth –New entrants and complimentary services Investing For Growth In Hosted VoIP Solutions

14 Company overview and Financials

15 Company Overview Founded: 2001 Public: 2006 (reverse merger) Acquisition: AccessLine, 2007 Customers Lines: 77,000 + Business Segment: SMB Employees: 120 full time Key Partners: Costco Office Depot Mitel Headquarters: Bellevue, WA 2008 Financial Results: Revenues: $32.6M Voice: $26.1M Video: $6.5M Gross Profit Margins: 49% Net Loss: $9.7M, or $0.36 1H09 Financial Results: Revenues: $16.2M, up 3% Voice: $13.9M, up 11% Video: $2.2M, down 27% Gross Profit Margins: 53% Cash Flow Positive Video Business: Exploring strategic alternatives Hosted VoIP Solutions For Business Communication

16 Key Financials

17 Voice Revenue Engine YTD thru Q Year over Year SIP trunking (VoIP)$1,788$2,56143% DPS$19$ % Individual Services$6,317$6,6265% Core Subtotal $8,124$9,74218% Legacy$4,477$4,187-9% Total Gross Margins $12, % $13, % 11% 490 BP increase

18 Balance Sheet Period ended June 30, 2009 Cash and Cash Equivalents$1.1 M Total Assets$32.9 M Total Long-Term Debt*$17.3 M *Face value of debentures is $29.6 M Total Liabilities$39.1 M Shareholder’s Equity($6.2 M)

19 Guidance Double digit annual growth in total voice business –Majority of growth in 2H09 Cash flow positive by end of 2009 Looking for strategic opportunities for Video business

20 Capitalization Table Shares O/S 5% Stockholders: Enable Capital Management Enable Growth Partners Aequitas Capital Management Tom Szabo 2,221,158 / 7.1% 2,002,738 / 6.4% 1,915,712 / 6.1% 2,422,929 / 7.7% Named Executive Officers and Directors Steven Davis James Everline Doug Johnson Paul Quinn David Rane All Named Executive Officers & Directors 132,500 / ** 268,500 / ** 256,033 / ** 57,813 / ** 112,500 / ** 827,346 / 2.6% Total Shares Outstanding on June 3031,366,662 Outstanding Options9,900,000 Fully Diluted Shares on June 30153,000,000

21 Investment Summary The New Telanetix – Well positioned –Focused on the high growth, Hosted SMB voice market –While seeking strategic alternatives for video Significant Recurring Market Opportunity –Hosted voice market - $4.4 B monthly recurring market Significantly Improved Financial Results –Core Voice revenue at 18% –Adjusted EBITDA loss improved to $129,000 versus $1.3 million last year Solid Guidance – Double digit annual growth in total voice revenue – Cash flow positive by end of 2009

22 Telanetix Corporation (OTC BB: TNXI)


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