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JULY 2013 PowerPoint Presentation

JULY 2013

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JULY 2013

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  1. TSXV : LOY Investing in Education: A Global Growth Strategy JULY 2013

  2. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation includes certain forward-looking statements within the meaning of Canadian securities laws. Such forward-looking information and statements are not representative of historical facts or information or current condition, but instead represent only the Corporation’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Corporation’s control. Generally, such forward-looking information or statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein includes, but is not limited to, information with respect to prospective financial performance, anticipated capital funding and sources, proposed or potential acquisitions, estimated operating and sales costs, estimated market drivers and demand, business prospects and strategy, new markets for growth and financial position. By identifying such information and statements in this manner, the Corporation is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such information and statements. Any number of important factors could cause actual results to differ materially from these forward-looking statements as well as future results, including but not limited to: risks related to any of the Corporation’s announced or planned acquisitions failing to close or becoming delayed before closing; the Corporation's reliance on its South Korean contract; carrying on business and activities in international jurisdiction where Canadian laws do not apply; any loss of certain key personnel; levels of student enrolment; delays in rolling out the online education programs; competition in the educational services market; and currency fluctuations. Although the Corporation has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Although the Corporation believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Accordingly, readers should not place undue reliance on any forward-looking information or statements contained in this presentation. The forward-looking information contained in this presentation is made as of the date hereof, and the Corporation does not undertake to update any forward-looking information that is contained or referenced herein, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. All subsequent written and oral forward looking information and statements attributable to the Corporation or persons acting on its behalf is expressly qualified in its entirety by this notice. www.loyalistgroup.com

  3. INDEX • COMPANY SNAP SHOT….…………………………….............................................................4 • INDUSTRY/MARKET………………………………………………..……………….….....…..5-6 • STUDENT DEMOGRAPHICS………………………...…..........................................................7 • 4. OVERVIEW………………………………………………………..…………………………....8 • 5. GROWTH BY ACQUISITIONS……………………………………………….…….................9 • 6. COMPANY HISTORY……………………………………...….…………………….…............10 • 7. QUARTERLY REVENUE FOR YEAR 2011, 2012, 2013.……………………………….........11 • 8. SOURCE OF REVENUE…………………………………………………………………….….12 • 9. LOYALIST’S GOALS…………………………...………………………...................................13 • 10. MANAGEMENT & DIRECTORS………………………………………….……..………......14-16 • 11. CAPITAL RAISED………………………………………………………………………….....17 • 12. ACQUISITION HIGHLIGHTS………………………………………………………....…..…18 • 13. SYNERGIES OF SCHOOL ACQUISITIONS…………………………………….…..…...….19 • 14. COMPETITIVE ADVANTAGE………………………………………….…………..….....…20 • 15. INTERNATIONAL TRENDS……………………………………………………...…….……21 www.loyalistgroup.com 3

  4. COMPANY SNAP SHOT TSXV: LOY Locations: Toronto, Vancouver, Victoria Share Price (as at July 19, 2013): $0.72 Shares Outstanding: 131,908,835 Escrow Shares: 30,902,542 Warrants: 699,848 Fully Diluted: 132,608,683 52-week High/Low: $0.79 / $0.20 Market Capitalization (as at July 19, 2013): $95M 2012 Revenue (Actual): $13.7M 2013 Current Run Rate: $32.0M Debt: NIL www.loyalistgroup.com

  5. INDUSTRY / MARKET • “In the U.S.A., the education and training sector ranks 5thin the export of services”(source: International Trade Administration) • “International education is a US$1.8 Trillion worldwide market, • larger than any other resource market”(source: British Columbia Centre for International Education) Canadian Foreign Education Market • $7.7 Billion • Approximately 218,000 Students ESL Market: • $788 Million • Approximately $650 Million (81 %) in ON & BC • Approximately 30,000 new students annually • 196 Language Canada(LC) accredited schools 4% [ ESL MARKET ] Current Loyalist -Industry Canada 2012 www.loyalistgroup.com

  6. Comparison of International Education Services with Other Top Exports in Goods from Canada to the Top Ten International Student Source Countries, 2008 The Largest Export Education Services - $1.3 Billion www.loyalistgroup.com

  7. STUDENT DEMOGRAPHICS Number of foreign students in Canada by level of study, 2002 to 2011 52,530 Source: Citizenship and Immigration Canada • This is a Recession-Resistant Industry! www.loyalistgroup.com

  8. OVERVIEW • About LOYALIST • Established through a reverse merger in January 2011, Loyalist executes an acquisition and roll up strategy to aggregate existing ESL schools and career colleges providing for the extension of the traditional Canadian ESL experience into a set of accredited carrier courses leading to diplomas. • Target market are students for language acquisition and training: • ESL (English as a second language ) • Teacher Training • Professional Development Acquisitions Strategic Acquisition Process Consolidations Execution Efficiency Organic Growth Marketing/Cross selling • THREE KEY GROWTH DRIVERS www.loyalistgroup.com

  9. GROWTH BY ACQUISITION • Driving Factors • Highly fragmented -196 Languages Canada accredited ESL Schools • Undercapitalized - Private companies (owner/operators),without anexit strategy • Small proprietorships - Annual revenue range $1 to $3 million • No dominant player - Loyalist is filing this position within the market • Sellers currently do not have exit options - Loyalist is currently the only entity providing a solution and enjoying first mover economics www.loyalistgroup.com

  10. COMPANY HISTORY Since its listing on the TSXV in January 2011, Loyalist has acquired 8ESL Schools and 4Career Colleges: • 2011 - McKinsey International College (Toronto) • 2011 - Universal College of Language (Vancouver) • 2011 - PGIC Vancouver (Vancouver) • 2011 - PGIC Career College (Vancouver) • 2011 - Western Town College (Vancouver) • 2011 - Western Town Business College (Vancouver) • 2012 - Cornerstone Academic College (Toronto) • 2012 - Victoria International Academic College (Victoria) • 2012 - Victoria International Academic Training Centre (Victoria) • 2013 - Pan Pacific College (Vancouver) • 2013 - Urban International School (Toronto) • 2013 – MTI Community College (Vancouver) - 7 Sites www.loyalistgroup.com

  11. QUARTERLY REVENUE FOR YEAR 2011~2013 REVENUE GROWTH ($ Thousand) 2013 REVENUE FORECAST (RUN-RATE) 2013 Current Run Rate : $32M 2013 Revenue Forecast (Run-Rate) With Acquisitions : $50M+ 2011 2012 2013 www.loyalistgroup.com

  12. SOURCE OF REVENUE • B2C: 30~40% - Revenue from individual Students & Parents • B2G: 35~40% - Revenue from various governments • B2U: 15~20% - Revenue from Foreign Universities • B2B: 5% - Revenue from corporate training www.loyalistgroup.com

  13. LOYALIST’S GOALS • Where do we hope to be in 5 years? • 30% ON & BC market share • $200+ Million Revenue • 20+% EBITDA Margin • EBITDA $40+ Million www.loyalistgroup.com

  14. SOLID MANAGEMENT TEAM www.loyalistgroup.com

  15. SOLID MANAGEMENT TEAM www.loyalistgroup.com

  16. STRONG BOARD OF DIRECTORS www.loyalistgroup.com

  17. CAPITAL RAISE • [1] Each warrant exercisable to purchase one common share at $0.175 for 2 years. • [2] Broker warrants, each warrant exercisable to purchase one common share at $0.125 for 2 years. • [3] Convertible debenture, convertible on the basis of $0.20 per common share for 1 year. Subsequently, • converted into 2,500,000 shares. • [4] Broker warrants, each warrant exercisable to purchase one common share at $0.54 for 18 months. www.loyalistgroup.com

  18. 2011 & 2012 ACQUISITION HIGHLIGHTS 2013 POTENTIAL ACQUISITIONS www.loyalistgroup.com

  19. SYNERGIES REALIZED FROM SCHOOL ACQUISITIONS ● Synergies 2011 1. Reducing Overlapping Staff: Reduction in redundant staff (salaries and benefits) at PGIC saved Loyalist an estimated annualized $1.2 million ● Synergies 2012 2. Space Consolidation: WTC moved into UCL space saving an estimated annualized $624,000 in rent from February 2012 3. Reducing Overlapping Staff: Reduction in redundant staff (salaries and benefits) at sites, estimated to save Loyalist an annualized $1.1 million. TOTAL COMBINED 2011 and 2012 SAVINGS = $2.4 million ANNUALIZED AT $3.0 MILLION www.loyalistgroup.com

  20. PARTNER SCHOOLS • Partnership with Colleges/Universities – Transfer Programs • British Columbia • Douglas College • Canadian Tourism College • Royal Roads University • Dorset College • Ontario • Algonquin College • Algoma University • Centennial College • New Image College of Fine Arts • Seneca • George Brown • Niagara College • Lambton College • USA • Texas Wesleyan college • Montana State University • Saskatchewan • University of Regina Quebec LaSalle College at Eastern part : Montreal www.loyalistgroup.com

  21. INTERNATIONAL TRENDS • Global Language is English • Language of Business • Language of Education • Government Spending • Investing money in English education and Multicultural experience • (South Korea, Spanish Government Grant, Saudi Arabia, Germany, Quebec) • Corporate Spending • Pemex (Mexican) • Schlumberger (France) • IBM (Brazil) • Safety • Canada is known as a very safe and desirable destination in which to study and a country that provides career opportunities for those holding domestically earned diplomas www.loyalistgroup.com

  22. CONTACT INFORMATION Loyalist Group Limited Andrew Ryu Nancy Lee CEO CFO 1255 Bay Street, Suite 800 1255 Bay Street, Suite 800 Toronto, Ontario Toronto, Ontario M5R 2B1 M5R 2B1 T: 416-969-9800 ext. 222 T: 416-969-9800 ext. 227 E:aryu@loyalistgroup.com E:nlee@loyalistgroup.com David McAdam VP-Corporate Development 1155 Robson Street Vancouver, British Columbia V6E 1B5 T: 604-687-3595 E: dmcadam@loyalistgroup.com Nadine Desruisseaux 1255 Bay Street, Suite 800 Toronto, Ontario M5R 2B1 T: 647-202-5292 E:nadine@capitalideasIR.com www.loyalistgroup.com