I N V E S T O R P R E S E N T A T I O N
T S X . V : P K T O T C Q X : P K T E F
A P R I L 2 0 1 9
I N V E S T O R P R E S E N T A T I O N 2
This presentation and the information contained herein, (“Presentation”) is being issued by Parkit Enterprise Inc. (the “Company”) for information purposes only. This Presentation is not for release,
distribution or publication into or in the United States or any other jurisdiction where applicable laws prohibit its release, distribution or publication. Reliance on this Presentation for the purpose of
engaging in any investment activity may expose an individual to a significant risk of losing all funds invested.
This Presentation is not a prospectus, offering memorandum, advertisement, or solicitation and does not constitute or form part of, and should not be construed as, an offer or invitation to sell or
any solicitation of any offer to purchase or subscribe for any securities of the Company in Canada, the United States or any other jurisdiction. Neither this Presentation, nor any part of it nor anything
contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on in connection with or act as an inducement in relation to a decision to purchase or subscribe for or
enter into any contract or make any other commitment whatsoever in relation to any securities of the Company. No representation or warranty, expressed or implied, is given by or on behalf of the
Company, its directors and affiliates or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation and no liability whatsoever is accepted by the
Company, its directors and affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith.
This Presentation does not constitute a recommendation regarding the Company or an investment therein. The Company has not been and will not be registered under the United States Investment
Company Act of 1940, as amended or the US Securities Act of 1933, as amended.
No reliance may be placed for any purpose whatsoever on the information or opinions contained in this Presentation or on its completeness, accuracy or fairness. Readers should not treat the
contents of this Presentation as advice relating to legal, taxation or investment matters, and must make their own assessments concerning these and other consequences of the various investments,
including the merits of investing and the risks. Readers are advised to consult their own personal legal, tax and accounting advisors and to conduct their own due diligence and agree to be bound by
the limitations of this disclaimer.
Certain statements, beliefs and opinions in this Presentation (including those contained in graphs, tables and charts) are forward-looking, which reflect the Company’s current expectations and
projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from
those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described
herein. Forward-looking statements contained in this Presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.
The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers should not place
undue reliance on forward-looking statements, which speak only as of the date of this Presentation.
All dollar amounts referenced in this presentation are in Canadian dollars unless otherwise noted.
D ISCLAIMER
I N V E S T O R P R E S E N T A T I O N 3
T S X . V : P K T O T C Q X : P K T E F
PARKIT IS A NICHE REAL ESTATE COMPANY.
C O R P O R A T E O V E R V I E W
P A R K I T E N T E R P R I S E I N C .
We currently own five parking assets that are located in:
• New Haven, Connecticut
• East Granby, Connecticut
• Nashville, Tennessee
• Denver, Colorado
We recently disposed of parking assets in:
• Jacksonville, Florida (24% IRR) (sold in July, 2018)
• Oakland, California (42% IRR) (sold in October, 2018)
OUTSTANDING SHARES 34,854,257
CURRENT SHARE PRICE $0.315
MARKET CAPITALIZATION $10,979,0901
1. Market Capitalization is based on the closing price of $0.315 of the Company’s common shares on the TSX Venture Exchange on March 31, 2019.
I N V E S T O R P R E S E N T A T I O N 4
CURRENT ASSET BASE
5PARKING ASSETS
PARKIT CURRENTLY OWNS ASSETS WITH SEVERAL JOINT
VENTURE PARTNERS, INCLUDING OCH-ZIFF REAL ESTATE, AND
PROPARK AMERICA.
USD $64.1 MAPPRAISED VALUE
P A R K I T E N T E R P R I S E I N C .
I N V E S T O R P R E S E N T A T I O N 5
FIGURES IN USD. BASED ON OWNERSHIP OF THE FIVE ASSETS CURRENTLY
OWNED – CANOPY, EXPRESSO, Z PARK, CHAPEL, RICCIO AND NASHVILLE
FLY AWAY PARKING.
PARKIT OWNS AN INDIRECT 24.39% EQUITY INTEREST IN OP HOLDINGS JV LLC, WHICH IN TURN OWNS:
Z-PARKING OFF-AIRPORT PARKING, THE RICCIO LOT, THE CHAPEL SQUARE LOT, AND CANOPY OFF-AIRPORT PARKING.
PARKIT ALSO OWNS AN INDIRECT 50% EQUITY INTEREST IN NASHVILLE FLY-AWAY AIRPORT PARKING.
CURRENT PORTFOLIO
EXPRESSO (SOLD)
OAKLAND, CAOFF-AIRPORT
TERRA PARK (SOLD)
JACKSONVIILLE, FLCOMMERCIAL DISTRICT
P A R K I T E N T E R P R I S E I N C .
CANOPYDENVER, COOFF-AIRPORT
NASHVILLE FLYAWAYNASHVILLE, TN
AIRPORT PARKING
Z PARKINGEAST GRANBY, CTOFF-AIRPORT
RICCIO LOTNEW HAVEN, CTUNIVERSITY & MEDICAL FACILITY
CHAPEL SQUARENEW HAVEN, CTCOMMERCIAL DISTRICT
$61.8MAGGREGATE PURCHASE
PRICES
$64.1MVALUE
$4.4MCY 2018 NET OPERATING
INCOME
$14.25M CY 2018 REVENUE
7.1%CAP RATE ON
TOTAL COST(Includes $8.6M in paid earnouts
after initial acquisition)
I N V E S T O R P R E S E N T A T I O N 6
RECENT SALESP A R K I T E N T E R P R I S E I N C .
• Acquired by Parkit and its partners for USD $18.6M in 2014
• Bought by OP Holdings JV in 2015 for USD 19.2M
• Sold in 2018 for USD $36.1M
• Achieved an IRR to Equity of 42% for the JV
• Services Oakland International Airport
• 1,899 stalls
EXPRESSO AIRPORT PARKINGO A K L A N D , C A L I F O R N I A
• Bought by OP Holdings JV for US$6.4M in 2015
• Sold for US$6.8M in 2018 plus an additional sum of USD
$750,000 paid monthly over the course of a year
• Achieved an IRR to Equity of 24% for the JV
• Services Jacksonville Central Business District
TERRA PARK PARKING FACIL ITYJACKSONVILLE, FLORIDA
I N V E S T O R P R E S E N T A T I O N 7
EXPRESSO AIRPORT PARKINGOAKLAND, CALIFORNIA
I N V E S T O R P R E S E N T A T I O N 8
TERRA PARK PARKING FACIL ITYJACKSONVILLE, FLORIDA
I N V E S T O R P R E S E N T A T I O N 9
DUE TO THE SALE OF THESE TWO ASSETS WITHIN THE OP HOLDINGS JV LLC:
Through its Joint Venture, Parkit has now fulfilled its 15% IRR Hurdle due to Och Ziff Real Estate.
As a result, all proceeds from asset sales and refinancings from the OP Holdings JV LLC will now flow to PAVe*.
* PAVe, is an entity owned 82.83% by Parkit.
D ISPOSITIONSP A R K I T E N T E R P R I S E I N C .
CURRENT PORTFOLIOP A R K I T E N T E R P R I S E I N C .
I N V E S T O R P R E S E N T A T I O N 11
CURRENT PROPERTIESP A R K I T E N T E R P R I S E I N C .
2010CANOPY AIRPORT PARKING FACILITYDENVER, COLORADO
• 2018 Revenue of USD $9.03M
• 2018 NOI of USD $3.1M
• Developed by Parkit and its partners for a total cost of CAD
$18.0M in 2010.
• Refinanced in 2017 for an appraised value of USD $37.6M
• Sold to the OP Holdings JV LLC for CAD $27.1 million (plus
contingent earn-outs) in April 2015
• Owned by OP Holdings JV LLC in which Parkit owns an
indirect 24.39% equity interest
• Services Denver International Airport
• Land lease expires in 2035
• 4,200 Stalls
I N V E S T O R P R E S E N T A T I O N 12I N V E S T O R P R E S E N T A T I O N 12
CANOPY AIRPORT PARKINGDENVER, COLORADO
I N V E S T O R P R E S E N T A T I O N 13
CURRENT PROPERTIESP A R K I T E N T E R P R I S E I N C .
2015RICCIO LOT HOSPITAL PARKINGNEW HAVEN, CONNECTICUT
2015CHAPEL SQUARE LOTNEW HAVEN, CONNECTICUT
• 2018 Revenue of USD $359K - 2018 NOI of USD $274K
• Acquired by OP Holdings JV for USD $4.3M in 2015
• Refinanced in 2017 at an appraised value of USD $4.5M
• Property owned by OP Holdings JV LLC in which Parkit owns an indirect
24.39% equity interest.
• Services the Smilow Cancer Hospital and the Yale New Haven Children’s
Hospital
• 2018 Revenue of USD $1.0M - 2018 NOI of USD $371K
• Refinanced in 2017 at an appraised value of $10.5M
• Acquired by OP Holdings JV in 2015 for $10.5M
• Property owned by OP Holdings JV LLC in which Parkit owns an
indirect 24.39% equity interest.
I N V E S T O R P R E S E N T A T I O N 14
R ICCIO LOT HOSPITAL PARKINGNEW HAVEN, CONNECTICUT
I N V E S T O R P R E S E N T A T I O N 15
CHAPEL SQUARE LOTNEW HAVEN, CONNECTICUT
I N V E S T O R P R E S E N T A T I O N 16
CURRENT PROPERTIESP A R K I T E N T E R P R I S E I N C .
2015Z-PARKINGEAST GRANBY, CONNECTICUT
2015NASHVILLE FLY-AWAY AIRPORT PARKINGNASHVILLE, TENNESSEE
• 2018 Revenue of USD $1.6M
• 2018 NOI of USD $258K
• Purchased by OP Holdings JV LLC in 2015 for $4.0M
• Refinanced in 2017 for an appraised value of USD $3.5M
• Property owned by OP Holdings JV LLC in which Parkit owns
an indirect 24.39% equity interest.
• 2018 Revenue of USD $2.26M
• 2018 NOI of USD $429K
• Purchased by Propark and Parkit in 2015 for USD $7.8M
• 2018 Appraised Value of USD $7.85M based on income
capitalization approach, USD $8.89M based on sales
comparison approach.
• Parkit holds an indirect 50% interest in the property
I N V E S T O R P R E S E N T A T I O N 17
Z-PARKINGEAST GRANBY, CONNECTICUT
I N V E S T O R P R E S E N T A T I O N 18
NASHVILLE FLY-AWAY AIRPORT PARKINGNASHVILLE, TENNESSEE
N E T A S S E T V A L U E C A L C U L A T I O N
S C E N A R I O 1
S a l e i n J a n u a r y 2 0 2 1 b a s e d o n m o s t
r e c e n t l y A p p r a i s e d V a l u e s
I N V E S T O R P R E S E N T A T I O N 20
Based on our most recently Appraised Prices (2017 and 2018) and assuming a sale of our assets in January 2021, we estimate Parkit would have an after-tax Net Asset Value per Share of
approximately $0.65.*
* THE DISCLOSURE REGARDING THE POTENTIAL NET ASSET VALUE CONSTITUTES FORWARD LOOKING FINANCIAL INFORMATION. THIS INFORMATION BY ITS NATURE MAY NOT BE ACCURATE AND IS BASED ON A NUMBER OF ASSUMPTIONS SET FORTH IN THIS PRESENTATION. READERS ARE CAUTIONED THAT THE ACTUAL RESULTS MAY VARY FROM THE ASSUMPTIONS SET FORTH IN THIS PRESENTATION.
I N V E S T O R P R E S E N T A T I O N 21
NET ASSET VALUE CALCULATIONSCENARIO 1 - Sa le in January 2021 at Appraised Pr ices
ASSUME THAT THE FOUR JV ASSETS (OP HOLDINGS ASSETS) ARE SOLD AT MOST RECENT APPRAISED PRICES IN JANUARY 2021:
BASED ON THE OP HOLDINGS JV LLC AGREEMENT, THE WATERFALL WOULD PRODUCE THE FOLLOWING CASH FLOWS TO PARKIT2:
BASED ON THE LOWER RANGE OF THE MOST RECENT APPRAISED VALUE FOR NASHVILLE FLY-AWAY AIRPORT PARKING, ASSUME THAT THE PROPERTY IS SOLD FOR USD$8M:
1. ASSUMES THAT PROPERTIES HAVE THE SAME AMOUNT OF DEBT AS THEY HAD IN JANUARY 2019. IN REALITY, THE LOAN AMOUNTS SHOULD BE LOWER DUE TO THE AMORTIZATION OF THE LOANS.
2. AS OF OCTOBER 2018, PARKIT HAS FULLFILLED ITS 15% IRR HURDLE TO OCH ZIFF REAL ESTATE, MEANING THAT ALL PROCEEDS FROM ASSET SALES AND REFINANCES IN THE JOINT VENTURE FLOW TO PAVE (OF WHICH
PARKIT OWNS 82.83%) UNTIL PAVE HAS RECEIVED A 15% IRR ON CONTRIBUTED CAPITAL. THEREAFTER PROFITS FLOW THROUGH THE WATERFALL AS PER THE OP HOLDINGS JV LLC AS SHOWN ABOVE.
3. PLEASE NOTE THAT NO ASSET SALES ARE CURRENTLY CONTEMPLATED AND THIS NAV VALUATION HAS BEEN PROVIDED SOLELY FOR ILLUSTRATIVE PURPOSES.
OPH JV reference PAVe Distribution Parkit % Parkit Distribution
Pave 15% IRR 6.4(c)(ii) 15,064,842 82.83% 12,478,209
Up to $3 million 6.4(c)(iii), 6.4(b)(ii)(x) 3,000,000 40.60% 1,218,000
1st promote 6.4(a)(ii)x 508,905 50.00% 254,452
17% IRR 6.4(a)(ii)y 731,751 82.83% 606,110
2nd promote 6.4(a)(iii)x 454,533 50.00% 227,267
22% IRR 6.4(a)(iii)y 474,608 82.83% 393,118
20,234,640 15,177,156
Value
Canopy 37,600,000 Chapel 10,500,000 Riccio 4,500,000 Z Park 3,500,000
56,100,000 Loan Amount1 (30,731,542)Closing costs (4%) (2,244,000)Net Proceeds 23,124,458
Appraised Value Loan Amount1 Net Proceeds
Nashville 8,000,000 5,737,582 2,262,418
Closing Costs (4%) 320,000
Total 1,942,418
Parkit Distribution 50% 971,209
FIGURES IN USD
I N V E S T O R P R E S E N T A T I O N 22
NET ASSET VALUE CALCULATIONSCENARIO 1 - Sa le in January 2021 at Appraised Pr icesBased on these assumptions and two years of corporate overhead, this produces an after-tax book value per share of $0.65:
Per FS CAD
31-Jan-19
USD1.3144
USD31-Jan-19
OPHUSD
OPHUSD
OPHUSD
AssociateUSD
PKT CorpUSD
PKT CorpUSD
OPHUSD
OPHUSD USD
SubtotalUSD CADUSD
Mgmt Fee POA Equity Accretion Amortize Expenses OPH OPH Nashville OPH Consolidated
Fee income Feb 2019 to
Jan 2021
Repayment of current
portion
pick-up & operating
of Discounted note to face
value
Prepaid and Intangible
Capital proceeds -
assuming all properties
disposed Jan 31, 2021
Capital proceeds - remaining security deposit
returned 2023
Capital proceeds assuming property
disposed Jan 31, 2021
Estimated tax liability
Projected NAV assuming all
properties disposed of by Jan 31, 2021
[A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K]
Cash 3,023,732 spot 2,300,466 286,346 39,829 542,000 (1,290,627) 15,794,574 129,997 971,209 (596,000) 18,177,794 23,892,892
Accounts Receivable - Mgmt fee 92,463 spot 70,346 (70,346) - -
Accounts Receivable - Other (exc. PoA) 57,731 spot 43,922 43,922 57,731
Prepaids & Deposits 12,015 spot 9,141 (9,141) - -
POA Receivable 1,314,175 spot 999,829 (39,829) 960,000 1,261,824
Intangible Assets 30,208 spot 22,982 (22,982) - -
Investment in Associate 1,228,030 H 977,910 240,090 (1,218,000) - -
Investment in JV - OPH 17,618,451 H 13,333,351 (13,333,351) - -
Investment in JV - Nashville 567,131 (567,131) - -
Accounts payable & tax liabilities (2,139,087) spot (1,627,425) (1,627,425) (2,139,087)
Net Asset Value 21,237,718 16,697,653 216,000 - 542,000 240,090 (32,123) (1,290,627) 1,243,223 129,997 404,078 (596,000) 17,554,291 23,073,360
# of common shares o/s 34,854,257 34,854,257 NAV per share $0.61 $0.66 # of stock options o/s 1,845,000 [L] 1,845,000 Proceeds raised if all options exercised $801,500 [L] $801,500 Fully diluted $0.60 $0.65
PKT Corp Parkit Enterprise Inc. - Corporate Expenses
Associate Investment in Associate (Green Park Denver)
PRE Parking Real Estate LLC (3rd party)
JV Investment in Joint Venture (Parking Acquisition Ventures, LLC or "PAVE")
OPH OP Holdings JV, LLC (or “OP Holdings”)
Nashville PAVe Nashville, LLC
PAVE % in OPH 29.45%
PKT % of PAVE % in OPH 82.83%
Net PKT % in OPH 24.39% (PKT % held through 100% owned subsidiaries)
PAVE % in Nashville 100.00%
PKT % of PAVE % in Nash. 50.00%
Net PKT % in Nashville 50.00% (PKT % held through 100% owned subsidiaries)
I N V E S T O R P R E S E N T A T I O N 23
NET ASSET VALUE CALCULATIONSCENARIO 1 - Sa le in January 2021 Appraised Pr icesAssumptions
[A] The Company receives management fees from OPH. Forecast at US$9,000 per month.
[B] Of the January 31, 2019 receivable from PRE, US$960,000 of the balance is to repaid from the disposition of certain parking assets held in the OPH portfolio. (The expected incoming cash from PRE to settle
the US$960K receivable after the disposition of the remaining JV properties is not shown in the table above for simplicity). The remainder of the receivable of US$39,829 as of January 31, 2019 is being
repaid from the assignment of PRE’s portion of the management fee from OPH JV, and is expected to repaid during the next 12 months.
[C] The joint venture will earn operating income. Excess cash not needed to service operations and the debt is to be distributed to JV members. The estimate for equity pick-up reflects the expected net
income reduction in the JV from the sale of two of the six properties in the OPH portfolio in 2018, and for simplicity we have assumed all operating cash flows were distributed to the JV members. However,
the amount and timing of actual operating cash flows from the JV will vary from the estimate. Note, the actual quarterly equity pick-up has historically varied significantly quarter to quarter due in part to
seasonality.
[D] The only significant asset retained in the associate is an earnings-based contingent receivable from OPH. The final tranche of US$3 million is payable upon the disposition of assets in accordance with the
OPH waterfall. The Company is entitled to 40.6% of this amount, or US$1.218 million.
[E] Reflect amortization of prepaid and intangible assets of January 31, 2019. Assume no significant new prepaids for simplicity.
[F] Reflects 2 years of expected expenses.
[G] Estimate based on disposition of four remaining properties as of January 31, 2021.
The amount of the sale proceeds is distributed to JV members pursuant to a multi-staged priority payment waterfall. Under the waterfall, defined capital proceeds were distributed to Och-Ziff Real Estate
until the first IRR hurdle of 15% was met. This hurdle was met in October 2018 with the sale of the Expresso property. PAVE is now receiving 100% of the distributions from property dispositions and debt
re-financings in the joint venture in the second stage of the waterfall until its 15% IRR hurdle is met. Thereafter, distributions are allocated among the JV members as defined in each subsequent stage of
the waterfall. The amount and timing of any operating or capital distributions, and actual net proceeds will impact the amount to be received under the waterfall distribution. Actual results will vary from
the estimate.
[H] Expected capital proceeds from return of security deposit with-held from Expresso proceeds.
[I] Estimate based on disposition of property as of January 31, 2021.
Assumed no operating distributions for simplicity (none received to date).
Gross Proceeds - JV 8,000,000 Based on 2018 appraisal
less transaction costs (320,000) Estimated at 4%
less estimated debt held (5,737,582) Based on Jan 31, 2019 balance sheet.
Net proceeds to be distributed by JV 1,942,418
Portion to Parkit 971,209 50% equity interest
Gross Proceeds - JV 56,100,000 Based on 2017 appraisals used in refi
less transaction costs (2,244,000) Estimated at 4%
less estimated debt held (30,731,542) Based on debt held as of January 31, 2019
Net proceeds to be distributed by JV 23,124,458 Estimated
I N V E S T O R P R E S E N T A T I O N 24
NET ASSET VALUE CALCULATIONSCENARIO 1 - Sa le in Ju ly 2020 at Appraised Pr ices
Assumptions[J] Estimated tax using an estimated effective tax rate of 27% comprised of 21% federal tax rate plus state taxes. Simplified approach used to estimate taxable capital gain and operating income. Actual results
will vary from the estimate.
[K] The Company’s reporting currency is CAD. Distributions received from its investment in JV and associate are in USD. For the purposes of this analysis, the expected cashflows were presented in USD. For the purposes of this analysis, a consistent FX rate was used. The beginning NAV was translated into USD based on the exchange rates used for the January 31, 2019 reporting. Future cash flows incurred in CAD (such as Parkit corporate expenses) were translated at the FX rate at January 31, 2019. The ending NAV was calculated in USD and translated into CAD using the same FX rate at of January 31, 2019. Actual future results as reported in CAD will differ from changes in FX rates.
[L] Stock options outstanding
* The Company is to grant a further 100,000 stock options on or about the first anniversary of July 1, 2019. The exercise price has not been set in advance.
[M] The assumptions set forth for scenario 1 are subject to a number of risk factors including, without limitation:
(i) Fluctuations in the market value of the properties
(ii) Fluctuations in foreign currency exchange rates
(iii) General Economic Conditions
(iv) The date at which the properties are disposed of
(v) Changes in tax rates and legislation
Exercise price
Outstanding Jan
31, 2019
Proceeds Received if
Exercised
$0.29 100,000 $29,000
$0.30 500,000 $150,000
$0.50 1,245,000 $622,500
1,845,000 $801,500
Before
dilution
Exercise of
stock options Fully Diluted **
NAV $23,073,360 $801,500 $23,874,860
# of common shares 34,854,257 1,845,000 36,699,257
NAV per common share $0.66 $0.65
N E T A S S E T V A L U E C A L C U L A T I O N
S C E N A R I O 2
S a l e i n J a n u a r y 2 0 2 3 b a s e d o n m o s t r e c e n t l y
A p p r a i s e d V a l u e s
I N V E S T O R P R E S E N T A T I O N 26
Based on our most recently Appraised Prices and assuming a sale of our assets in January 2023, we estimate that we would have an after-tax Net Asset Value per Share of approximately $0.71.
* THE DISCLOSURE REGARDING THE POTENTIAL NET ASSET VALUE CONSTITUTES FORWARD LOOKING FINANCIAL INFORMATION. THIS INFORMATION BY ITS NATURE MAY NOT BE ACCURATE AND IS BASED ON A NUMBER OF ASSUMPTIONS SET FORTH IN THIS PRESENTATION. READERS ARE CAUTIONED THAT THE ACTUAL RESULTS MAY VARY FROM THE ASSUMPTIONS SET FORTH IN THIS PRESENTATION.
I N V E S T O R P R E S E N T A T I O N 27
NET ASSET VALUE CALCULATIONSCENARIO 2 - Sa le in January 2023 at Appraised Pr ices
ASSUME THAT THE FOUR JV ASSETS (OP HOLDINGS ASSETS) ARE SOLD AT MOST RECENT APPRAISED PRICES IN JANUARY 2023:
BASED ON THE OP HOLDINGS JV LLC AGREEMENT, THE WATERFALL WOULD PRODUCE THE FOLLOWING CASH FLOWS TO PARKIT2:
BASED ON THE LOWER RANGE OF THE MOST RECENT APPRAISED VALUE FOR NASHVILLE FLY-AWAY AIRPORT PARKING, ASSUME THAT THE PROPERTY IS SOLD FOR USD$8M:
1. ASSUMES THAT PROPERTIES HAVE THE SAME AMOUNT OF DEBT AS THEY HAD IN JANUARY 2019. IN REALITY, THE LOAN AMOUNTS SHOULD BE LOWER DUE TO THE AMORTIZATION OF THE LOANS.
2. AS OF OCTOBER 2018, PARKIT HAS FULLFILLED ITS 15% IRR HURDLE TO OCH ZIFF REAL ESTATE, MEANING THAT ALL PROCEEDS FROM ASSET SALES AND REFINANCES IN THE JOINT VENTURE FLOW TO PAVE (OF WHICH
PARKIT OWNS 82.83%) UNTIL PAVE HAS RECEIVED A 15% IRR ON CONTRIBUTED CAPITAL. THEREAFTER PROFITS FLOW THROUGH THE WATERFALL AS PER THE OP HOLDINGS JV LLC AS SHOWN ABOVE.
3. PLEASE NOTE THAT NO ASSET SALES ARE CURRENTLY CONTEMPLATED AND THIS NAV VALUATION HAS BEEN PROVIDED SOLELY FOR ILLUSTRATIVE PURPOSES.
OPH JV reference PAVe Distribution Parkit % Parkit Distribution
Pave 15% IRR 6.4(c)(ii) 19,194,141 82.83% 15,898,507
Up to $3 million 6.4(c)(iii), 6.4(b)(ii)(x) 3,000,000 40.60% 1,218,000
1st promote 6.4(a)(ii)x 158,154 50.00% 79,077
17% IRR 6.4(a)(ii)y 227,409 82.83% 188,362
2nd promote 6.4(a)(iii)x - 50.00% -
22% IRR 6.4(a)(iii)y - 82.83% -
22,579,704 17,383,946
Value
Canopy 37,600,000 Chapel 10,500,000 Riccio 4,500,000 Z Park 3,500,000
56,100,000 Loan Amount1 (30,731,542)Closing costs (4%) (2,244,000)Net Proceeds 23,124,458
Appraised Value Loan Amount1 Net Proceeds
Nashville 8,000,000 5,737,582 2,262,418
Closing Costs (4%) 320,000
Total 1,942,418
Parkit Distribution 50% 971,209
FIGURES IN USD
I N V E S T O R P R E S E N T A T I O N 28
Based on these assumptions and four years of corporate overhead, this produces an after-tax book value per share of $0.71:
NET ASSET VALUE CALCULATIONSCENARIO 2 - Sa le in January 2023 at Appraised Pr ices
Per FS CAD
31-Jan-19
USD1.3144
USD31-Jan-19
OPHUSD
OPHUSD
OPHUSD
AssociateUSD
PKT CorpUSD
PKT CorpUSD
OPHUSD
OPHUSD USD
SubtotalUSD CADUSD
Mgmt Fee POA Equity Accretion Amortize Expenses OPH OPH Nashville OPH Consolidated
Fee income Feb 2019 to
Jan 2023
Repayment of current
portion
pick-up & operating
of Discounted note to face
value
Prepaid and Intangible
Capital proceeds
-assuming all properties
disposed Jan 31, 2023
Capital proceeds - remaining security deposit
returned 2023
Capital proceeds assuming property
disposed Jan 31, 2023
Estimated tax liability
Projected NAV assuming all
properties disposed of by Jan 31, 2023
[A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K]
Cash 3,023,732 spot 2,300,466 502,346 39,829 1,084,000 (2,581,254) 18,001,364 124,455 971,209 (664,000) 19,778,415 25,996,749
Accounts Receivable - Mgmt fee 92,463 spot 70,346 (70,346) - -
Accounts Receivable - Other(exc. PoA) 57,731 spot 43,922 43,922 57,731
Prepaids & Deposits 12,015 spot 9,141 (9,141) - -
POA Receivable 1,314,175 spot 999,829 (39,829) 960,000 1,261,824
Intangible Assets 30,208 spot 22,982 (22,982) - -
Investment in Associate 1,228,030 H 977,910 240,090 (1,218,000) - -
Investment in JV - OPH 17,618,451 H 13,333,351 (13,333,351) - -
Investment in JV - Nashville 567,131 (567,131) - -
Accounts payable (2,139,087) spot (1,627,425) (1,627,425) (2,139,087)
Net Asset Value 21,237,718 16,697,653 432,000 - 1,084,000 240,090 (32,123) (2,581,254) 3,450,013 124,455 404,078 (664,000) 19,154,912 25,177,216
# of common shares o/s 34,854,257 34,854,257 NAV per share $0.61 $0.72 # of stock options o/s 1,845,000 [L] 1,845,000 Proceeds raised if all options exercised $801,500 [L] $801,500
Fully diluted $0.60 $0.71
PKT Corp Parkit Enterprise Inc. - Corporate Expenses
Associate Investment in Associate (Green Park Denver)
PRE Parking Real Estate LLC (3rd party)
JV Investment in Joint Venture (Parking Acquisition Ventures, LLC or "PAVE")
OPH OP Holdings JV, LLC (or “OP Holdings”)
Nashville PAVe Nashville, LLC
PAVE % in OPH 29.45%
PKT % of PAVE % in OPH 82.83%
Net PKT % in OPH 24.39% (PKT % held through 100% owned subsidiaries)
PAVE % in Nashville 100.00%
PKT % of PAVE % in Nash. 50.00%
Net PKT % in Nashville 50.00% (PKT % held through 100% owned subsidiaries)
I N V E S T O R P R E S E N T A T I O N 29
NET ASSET VALUE CALCULATIONSCENARIO 2 - Sa le in January 2023 at Appraised Pr ices
Assumptions[A] The Company receives management fees from OPH. Forecast at US$9,000 per month.
[B] Of the January 31, 2019 receivable from PRE, US$960,000 of the balance is to repaid from the disposition of certain parking assets held in the OPH portfolio. (The expected incoming cash from PRE to settle
the US$960K receivable after the disposition of the remaining JV properties is not shown in the table above for simplicity). The remainder of the receivable of US$39,829 as of January 31, 2019 is being
repaid from the assignment of PRE’s portion of the management fee from OPH JV, and is expected to repaid during the next 12 months.
[C] The joint venture will earn operating income. Excess cash not needed to service operations and the debt is to be distributed to JV members. The estimate for equity pick-up reflects the expected net
income reduction in the JV from the sale of two of the six properties in the OPH portfolio in 2018, and for simplicity we have assumed all operating cash flows were distributed to the JV members. However,
the amount and timing of actual operating cash flows from the JV will vary from the estimate. Note, the actual quarterly equity pick-up has historically varied significantly quarter to quarter due in part to
seasonality.
[D] The only significant asset retained in the associate is an earnings-based contingent receivable from OPH. The final tranche of US$3 million is payable upon the disposition of assets in accordance with the
OPH waterfall. The Company is entitled to 40.6% of this amount, or US$1.218 million.
[E] Reflect amortization of prepaid and intangible assets of January 31, 2019. Assume no significant new prepaids for simplicity.
[F] Reflects 4 years of expected expenses.
[G] Estimate based on disposition of four remaining properties as of January 31, 2021.
The amount of the sale proceeds is distributed to JV members pursuant to a multi-staged priority payment waterfall. Under the waterfall, defined capital proceeds were distributed to Och-Ziff Real Estate
until the first IRR hurdle of 15% was met. This hurdle was met in October 2018 with the sale of the Expresso property. PAVE is now receiving 100% of the distributions from property dispositions and debt
re-financings in the joint venture in the second stage of the waterfall until its 15% IRR hurdle is met. Thereafter, distributions are allocated among the JV members as defined in each subsequent stage of
the waterfall. The amount and timing of any operating or capital distributions, and actual net proceeds will impact the amount to be received under the waterfall distribution. Actual results will vary from
the estimate.
[H] Expected capital proceeds from return of security deposit with-held from Expresso proceeds.
[I] Estimate based on disposition of property as of January 31, 2021.
Assumed no operating distributions for simplicity (none received to date).
Gross Proceeds - JV 8,000,000 Based on 2018 appraisal
less transaction costs (320,000) Estimated at 4%
less estimated debt held (5,737,582) Based on Jan 31, 2019 balance sheet.
Net proceeds to be distributed by JV 1,942,418
Portion to Parkit 971,209 50% equity interest
Gross Proceeds - JV 56,100,000 Based on 2017 appraisals used in refi
less transaction costs (2,244,000) Estimated at 4%
less estimated debt held (30,731,542) Based on debt held as of January 31, 2019
Net proceeds to be distributed by JV 23,124,458 Estimated
I N V E S T O R P R E S E N T A T I O N 30
NET ASSET VALUE CALCULATIONSCENARIO 2 - Sa le in Ju ly 2023 at Appraised Pr ices
Assumptions
[J] Estimated tax using an estimated effective tax rate of 27% comprised of 21% federal tax rate plus state taxes. Simplified approach used to estimate taxable capital gain and operating income. Actual results
will vary from the estimate.
[K] The Company’s reporting currency is CAD. Distributions received from its investment in JV and associate are in USD. For the purposes of this analysis, the expected cashflows were presented in USD. For
the purposes of this analysis, a consistent FX rate was used. The beginning NAV was translated into USD based on the exchange rates used for the January 31, 2019 reporting. Future cash flows incurred in
CAD (such as Parkit corporate expenses) were translated at the FX rate at January 31, 2019. The ending NAV was calculated in USD and translated into CAD using the same FX rate at of January 31, 2019.
Actual future results as reported in CAD will differ from changes in FX rates.
[L] Stock options outstanding
* The Company is to grant a further 100,000 stock options on or about the first anniversary of July 1, 2019. The exercise price has not been set in advance.
[M] The assumptions set forth for scenario 2 are subject to a number of risk factors including, without limitation:
(i) Fluctuations in the market value of the properties
(ii) Fluctuations in foreign currency exchange rates
(iii) General Economic Conditions
(iv) The date at which the properties are disposed of
(v) Changes in tax rates and legislation
Exercise price
Outstanding
Jan 31, 2019
Proceeds Received
if Exercised
$0.29 100,000 $29,000
$0.30 500,000 $150,000
$0.50 1,245,000 $622,500
1,845,000 $801,500
Before
dilution
Exercise of
stock options Fully Diluted **
NAV $25,177,216 $801,500 $25,978,716
# of common shares 34,854,257 1,845,000 36,699,257
NAV per common share $0.72 $0.71
F U T U R E A C Q U I S I T I O N SP A R K I T E N T E R P R I S E I N C .
I N V E S T O R P R E S E N T A T I O N 32
TARGETING OPPORTUNISTIC REAL ESTATE ASSETS IN THE USD $3 - $10 MILLION DOLLAR RANGE.
F U T U R E A C Q U I S T I O N SP A R K I T E N T E R P R I S E I N C .
Assets should be accretive within one year on a free cash flow per share basis
Assets should meet a levered IRR hurdle of 15%
Leverage will be approximately 65-75%
Targeting High Population and Economic Growth markets in the US
Targeting stabilized and value add assets
*NOTE: AT THIS TIME NO ASSURANCES CAN BE MADE THAT FUTURE ACQUISITIONS WILL BE COMPLETED. THE ABOVE SETS FORTH THE COMPANY’S CRITERIA FOR FUTURE ACQUISITIONS.
I N V E S T O R P R E S E N T A T I O N 33
C O R P O R A T E H I S T O R YP A R K I T E N T E R P R I S E I N C .
2006
Incorporated in 2006 as
a private company
2009
Went Public
as Greenscape
Capital Group
2014
Parkit acquires Expresso
Airport Parking for
$18.6M
2015
Parkit enters into Joint Venture
with Och-Ziff and Propark
acquiring four additional assets
(Chapel Square, Terra Park,
Riccio Lot and Z Parking)
Parkit acquires Nashville
Off-Airport Parking with
Propark for $8M
2010
Purchases and begins construction
on Canopy Airport Parking (4200
stall lot servicing Denver Int’l
Airport)
2011
Canopy Airport Parking is
completed
2018
Parkit acquires Smart
Parking Solutions
Canada
2018
Board of Parkit is
reconstituted to
Current Directors
AUGUST 2018
Terra Park is sold
generating a 24% IRR for
OP Holdings JV LLC
SEPTEMBER 2018
Expresso Airport Parking is sold
generating a ~42% IRR for OP
Holdings JV LLC
I N V E S T O R P R E S E N T A T I O N 34
S H A R E S T R U C T U R EP A R K I T E N T E R P R I S E I N C .
SHARES OUTSTANDING
34.85M
OPTIONS
TSX-V: PKT
MARKET CAP
$10.98MWARRANTS
NONESHARE PRICE
$0.315
1,845,000 TOTAL OPTIONS OUTSTANDING AS OF JANUARY 31, 2019
100,000 AT C$0.29; 500,000 AT C$0.30; 1,245,000 AT C$0.50.
1,695,000 OPTIONS EXPIRE IN 2019; 50,000 EXPIRE IN 2022, 100,000 EXPIRE IN 2023.
I F Y O U H A V E A N Y F U R T H E R Q U E S T I O N S , P L E A S E R E A C H O U T T O U S
W W W . P A R K I T E N T E R P R I S E . C O M
A V I G E L L E R I N T E R I M C E O
D A V I D D E L A N E Y
E X E C U T I V E C H A I R M A N
P H O N E
E M A I L
P H O N E
E M A I L
7 3 2 - 9 6 6 - 1 6 8 3
a v i g @ p a r k i t e n t e r p r i s e . c o m
4 1 6 - 9 5 1 - 9 2 1 4
d a v i d @ p a r k i t e n t e r p r i s e . c o m