UniPixel Investor Presentation September 2016

UniPixel
Investor Presentation
September 2016
Disclaimer
All statements in this presentation that are not based on historical fact are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended
including the statement that UniPixel’s integrated technologies are expected to provide enhanced yields at a
lower cost, thereby expanding UniPixel’s competitiveness in the touch screen market. While management has
based any forward-looking statements contained herein on its current expectations, the information on which
such expectations were based may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors,
many of which are outside of our control, that could cause actual results to materially differ from such
statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set
forth under Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014.
We operate in a highly competitive and rapidly changing environment, thus new or unforeseen risks may arise.
Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual
results. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking
statements. Anyone reviewing this presentation is also urged to carefully review and consider the other
various disclosures in the company's Annual Report on Form 10-K, quarterly reports on Form 10-Q and Current
Reports on Form 8-K.
Trademarks in this release are the property of their respective owners.
2
UniPixel Overview
 UniPixel (Nasdaq: UNXL) developer of industry-leading touch screen technology increasingly
utilized by the world’s leading PC OEMs to produce faster, thinner and lighter devices
 Tablets, laptops, 2 in 1’s, automotive
 The market is increasingly demanding the attributes of UniPixel’s Copper Metal Mesh
technology – market is coming to us.
 Sensitivity to stylus and finger touch
 Enables thinner and smaller devices
 High level of integration lowers total solution cost
 Flexible for enabling touch on curved surfaces
 Rapid adoption since commercial launch of XTouch in Q2 2015
 22 wins with world class customers (21 wins since January 1, 2016)
 $17-19M revenue in “active order pipeline”
 (H2 2016 thru 2017) based on estimates provided by customers for Design Wins
 RFQ flow as UniPixel makes “Approved Vendor List” for key OEMs & Integrators
 UniPixel’s technology is initially addressing a $1.5B market in 2016
 Next generation curved and flexible touch screen opportunities within mobile phone
could expand addressable market to $5B in 2020
3
XTouch with Diamond Guard = State-of-the-Art Technology

XTouch with Diamond Guard sensor performance opens doors for new and innovative
product applications across multiple market segments.

Ideal for any application that requires a highly responsive and accurate touch
interface that is thinner, lighter, and more cost-effective than legacy
technologies.

Offer a richer user experience with support for both active and passive stylus.

Bendable sensors create unique touch-based products

Unique sensor design allows thinnest cover lens

Narrow sensor borders maximize the touchscreen’s surface in smaller device size

Diamond Guard hard coat reduces overall thickness and cost by eliminating
protection film layers and integrating cover lens in notebook applications

Lower total solution cost with integrated connector cable and Diamond Guard
hard coat.

Delivers improved Stylus and Finger Touch performance at lower total system
cost.
* Source: IHS/Touch Display Research
XTouch Sensor
Coated with
Diamond Guard
4
XTouch: State-of-the-Art Technology
UniPixel’s Copper Metal Mesh meets the needs of the next generation of computing devices
Copper-based mesh using
our patented design
 Allows thinnest cover lens to
reduce device weight and
thickness
Low Sheet Resistance (<10 Ω/sq.)
 Supports stylus and finger touch
Thin borders: 1.5mm or less
 For reduced weight
 Smaller device size
Integrated connector cable (FPC)
 Lower total solution cost
 Improved system reliability
5
Enabling Thinner and Lighter Devices
3.1 lbs.
0.61”
1.9 lbs.
0.7”
2.7 lbs.
0.76”
Dell Latitude 12” 7000


OEMs targeting Glass cover lens to achieve
next level of weight reduction
2.0 lbs.
0.5”
1.7 lbs.
0.4”
DiamondTouch can reduce ~ ½ pound from
a 15.6” touch panel by eliminating glass
cover lens
Thinner
Lenovo LaVie 13.3”
HP Spectre Pro 13.3”
MacBook 12”
Surface Pro 4 12”
Lighter
6
XTouch Addressable Markets by Product Segment
 Tablet Market
 $1.1 Billion
 Thin cover lens, narrow bezel, stylus,
cost of touch, weight reduction
High
Tablets
 Notebook PC / PC Display Market
 Auto Market
Segment
Attractiveness
 $136 million
 Eliminate cover lens, narrow bezel,
stylus, cost of touch
Auto
High
Priority
 $3 billion (2020)
 Potential entry point due to introduction
of flexible display
Future
Target
Markets
Smartphones
Wearable
 $167 million
 Curved infotainment cluster display,
multiple displays per vehicle
 Smartphones
Notebook PC /
PC Display
Industrial
Appliances
Med
Med
Fit with XTouch
High
7
XTouch Addressable Markets by Technology Application
UniPixel’s Copper Metal Mesh flexible sensor material enables innovative product designs
Primary
Applications
Market
Drivers
Incremental
Sensor $TAM
In-cabin
Displays
Automotive monitor touch panel units to
grow from ~20 million in 2016 to ~66
million in 2020. – IHS Technology
$300M
Flexible Display
Phablet
Plastic and flexible displays to grow
rapidly from a $2bn market this year to
$18bn by 2020. – IDTech Ex, May 2016
$1B
Diamond Touch / Passive Stylus
Laptops
“Our laptop touch penetration rate
jumped from 17% to 30% based on lowcost touch sensor.” – Leading PC OEM
$225M
2-in-1’s
“We expect that the capacitive active
stylus market will grow from 100 million
units in 2015 to 300 million units in
2018.” - Jon Peddie Research
$1B
Automotive
Active Stylus
FY16
FY17
FY18
FY19
8
XTouch + Diamond Guard Enables Thinner, Lighter Stacks
XTouch
GFF
Current commodity
technology
(Now Shipping)
Glass Cover Lens
Diamond Guard
Bottom Hardcoat
XTouch
Plastic Cover Lens
Diamond Guard
Bottom Hardcoat
Diamond Touch
Diamond Guard Top and
Bottom Hardcoat
Diamond Touch
Flexible & Foldable
60µm
550µm
850-1000µm
250µm
Thin cover
lens
requirement
of flexible
display
No cover
lens for a
thinnest
flexible
display
solution
9
Metal Mesh Technology Opens Door to Innovation
Toppan
FujiFilm
Low Resistance
Better noise immunity and lower power consumption
Double Sided
Avoids XY layer alignment Moiré Moiré problems
< 5 μm Width
Resolves mesh visability problem
Copper Wiring
More durable as it avoids the silver metal migration problem
Patented Metal Mesh Design
Lower effective resistance to enable thin cover lens, and better touch and stylus performance
Lowest solution cost
Diamond Guard eliminates protection film and can integrate cover lens for notebook
applications
Integrated connector cable
10
Customers and Targets
Notebook PC, Tablet, 2:1
Automotive
Handset
11
Rapid Adoption Setting Stage for Future Revenue Growth



22 new design wins in less than 1 year as a fully operational
sales and manufacturing organization
 21 design wins since January 1, 2016
 Typically 6 to 9 month lag from design win to volume
production
25
Estimated design wins revenue range is $17-19M based on
customer forecasts for each design win.
 Shipment ramp starting in Q4 2016 and growing
through 2017
15
Cumulative Project Design Wins
20
21
16
10
9
Early success includes purchase orders from leading PC
manufacturers such as HP, Toshiba, and Dell for various
touchscreen device programs

Pipeline includes a large number of Tier 1 and 2 electronics
OEM/ODM opportunities; typically sole or dual sourced

Also working with leading OEMs and ODMs for automobile and
other touchscreen panel opportunities
5
3
3
1
3
Q215
Q315
Q415
3
3
3
Q116
Q216
Q316
0
Legacy Projects
New Design Wins
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Financial
Christine Russell, CFO
Increasing Active Order Pipeline
Active Order Pipeline*
$20
$18
$16
$14
$12
$10
$8
$6
$4
$2
$0

Active Order Pipeline entails
cumulative revenue estimates of
current design wins
 “Soft Backlog”

The majority of the recent design wins
were concentrated between March
and June 2016 with additional wins in
August 2016.
 6 to 9 month lag from win to
volume production.

Expect to see revenue start to
increase moderately in Q416 for the
earliest announced wins, with the
majority ramping during 2017.
$17 - $19 M
$15 - $17 M
$500 K
Q415
Q116
Q216
*The Active Order Pipeline, or AOP, is managements estimate of future revenue opportunity
from awarded projects based on customers estimated demand plans. These forecasted orders
may vary based on a number of factors.
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Revenue Expected to Ramp in 2017
$1.2
$1.0
Historical Quarterly Revenue

Current revenue to date has been
derived primarily from “Legacy”
operations.

Active Order Pipeline of $17 - $19
million at June 30, 2016 expected
to commence in Q416 and ramp
into 2017
$1.0
$0.9
$0.8
$0.6
$0.4
$0.2
$0.0
Q116
Q216
15
Manufacturing Improvement Programs
Activity
In-House Base
Coating
Material Cost Overall Yield
Reduction
Improvement
38%
Expose Mask Coating
Plating Chemistry
Enhancement
2%
Hybrid Metal
Diamond Guard
Overcoat

Following the acquisition of the
manufacturing assets in April 2015,
the company has embarked on an
aggressive manufacturing
improvement program
 Improve Yields
 Decrease Material Costs

Manufacturing Improvements will
be key driver to long-term
profitability
Status
5%
Completed
10%
Completed
15%
Completed
5%
Completed
9%
Completed
Interleave Reduction
14%
End of Q4 2016
Liner Reduction
10%
End of Q4 2016
Total Improvements
73%
35%
16
Long-Term Target Model – Non-GAAP
Non-GAAP
Q2 16
LT Model*
Revenue
100%
100%
Direct Margin
(65%)
>50%
Gross Margin
(184%)
>40%
R&D**
$1.0 M
13-15%
SG&A**
$1.4 M
10-13%
Operating Margin
(435%)
12-17%
Note: * Targeted in 2-3 years ** Excludes non-cash charges

Company expects to reach cash
breakeven at approximately $8
million in quarterly revenue

Key drivers to improvement
 Increase in
shipments/revenue
 Improvement in
manufacturing yield/material
costs
 Fixed overhead absorbed by
increasing
shipments/revenue
17
Selected Balance Sheet & Cap Structure
($ in Millions, except per share)
As of 6/30/2016
Cash and cash equivalents
$11.3
Prepaid Licenses
$8.1
Total assets
$22.5
Total current liabilities
$3.4
Long-term debt
$0
Total shareholders’ equity
$17.9
Common Shares Outstanding
45.0
Outstanding Options Restricted Stock (AEP $5.41)
3.4
Outstanding Warrants (AEP $1.61)
9.5
Total Potential Shares Outstanding
57.9
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Management
Jeff Hawthorne
President and CEO
33+ years of senior management and advanced technology product development experience.
Sr. VP and GM – Veeco MOCVD Business
President and CEO – Photon Dynamics (acq’d by Orbotech)
Christine Russell
CFO
CFO of Vendavo (acq’d by Francisco Partners); EAG; Virage Logic (acq’d by Synopsys), OuterBay
Technologies (acq’d by HP), Ceva (Nasdaq: CEVA), Persistence Software, Cygnus Solutions
Director and Audit Committee Chair of QuickLogic Corporation (Nasdaq: QUIK)
Chairman of Silicon Valley Directors Exchange (SVDX)
Served as Director and Audit Committee Chair of Peak International
Jalil Shaikh
COO
VP / GM of Atmel
CEO Ranch Energy Systems; Validity Sensors (acq’d by Synaptics); and Zeevo (acq’d by Broadcom)
Senior management roles @ Broadcom (Nasdaq: BRCM); Silicon Image; Trident Microsystems
Brett Gaines
VP – Marketing
Director of Business Development of Touch Materials at Atmel
VP Strategic development, Silicon Image
Manager of Business Development, Sun Microsystems
Mark McCloud
VP – Sales
25+ years at HP in Emerging Technology, supply chain strategic procurement, and process development
engineering
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Growth Catalysts

Market’s relentless pursuit for more responsive, thinner and lighter mobile devices
 XTouch metal mesh offers the best overall user experience and is the high end performance choice by
OEMs.
 Patented sensor design allows 0.4 mm or thinner glass cover lens which is difficult for competition
 DiamondTouch technology for laptop computers has the thinnest stack, lowest cost, highest
performance with high barrier of entry for competition

Future-ready
 Patented edgeless industrial design
 Ready for flexible displays

Introduction of AAPL pencil and success of MSFT Surface enabling Stylus-based apps
 UniPixel is ahead of the curve. XTouch has the best active stylus (AAPL and MSFT) and also enables
use of a significantly lower-cost passive stylus ~ $2 (as opposed to $60-99 for active)

High Integration
 Integrated FPC reduces cost and increases product reliability, simplifies supply chain and removes
margin stacking by providing sensor directly to display makers

Expanding Capacitive Touch Market in Advanced Designs
 Laptops, Tablets, 2:1, automotive, eReaders, smartphones, peripherals, industrial, IOT devices
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Thank You