QI Systems (QIIU) 8-K Regulation FD Disclosure

QI Systems Inc.

September 2007

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Disclaimer

This presentation includes forward-looking statements that are made
pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. While these statements are made to
convey to the public the company's progress, business opportunities and
growth prospects, readers and listeners are cautioned that such
forward-looking statements represent management's opinion. Whereas
management believes such representations to be true and accurate
based on information and data available to the company at this time,
actual results may differ materially from those described. The company's
operations and business prospects are always subject to risk and
uncertainties. Important factors that may cause actual results to differ are
set forth in the company's periodic filings with the US Securities and
Exchange Commission.

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Company Overview

•QI Systems is a leading developer and
   integrator of contact and contactless card
   payment and control solutions

•Design and manufactures hardware and
   software for open and closed card systems

•Huge global market, yet North America
   represents only 4% of the global market

–smart card acceptance in its infancy

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Company Highlights

•Incorporated in 1978

•Entered smart card industry in 1990’s

•First company certified by both Visa Cash and
   MasterCard/Mondex for Unattended Point of Sale
   (UPOS) devices

•Headquartered in Dallas, TX, USA

•Main operations in Vancouver, BC, CN

–Significant tax loss carry forwards available

•Excess of $10 million (CND)

•Launched QiWave™ product brand in 2006

–First to market with contactless readers

–

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Symbol	QIII:OB
Corporate Headquarters	Dallas, Texas
Stock Price (8/20/07) || 52-Week Range	$0.07 || $0.05 - 0.18
Shares Outstanding (6/30/07)	50,000,000
Market Capitalization	$3,500,000
Volume (daily 90-day average)	35,000
Debt  (06/30/07)	$430,000
Cash (06/30/07)	$10,000
Revenue (estimate June 30, 2007 fiscal year)	$900,000
Insider Ownership	<5%
Institutional Ownership Shares	<5%
Full-time Employees	10
Fiscal Year	June 30
Accounting Firm	Amisano Hanson, Vancouver, BC US & Canada Certified/Chartered

Key Facts

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Executive Management

•Steven R. Garman

President & Chief Executive Officer

–35 years international corporate business experience

•Olympus Corporation

•Atlantic Richfield

•Johnson & Johnson

–Led $150M high tech products group for market leader

–Led multi-million dollar divisional start-up of new products group

–Led product group of 150 people, 8 locations in 3 countries

–CEO experience in micro-cap corporate start-ups

•Robert I. McLean, Jr.

Chief Financial Officer / Chief Operations Officer

–Executive Vice President of $300M publicly traded technology company

–Treasurer of large publicly traded independent computer parts distributor

–Vice President - Planning and Development of a $2B retail subsidiary of Radio Shack, Inc.

–Director of Planning and Analysis for CompuCom Systems, Inc.

–General Manager of a commercial aviation component repair facility owned by Aviall, Inc.

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Executive Management

•Donny V. Lee

Chief Technology Officer

–Founder and CEO of AWID, a company he founded in 1997

–AWID had developed two successful lines of RFID readers

–Transitioned AWID from engineering oriented company to technology leadership

–Under his tenure, AWID was named by Deloitte & Touche as Raising Star Company

•Stephen B. Riegel

Vice President of Business Development & Sales

–More than 20 years experience within the Smart Card Market

–VP General Manager for Inside Contactless, responsible for the Americas operations

–RFID Business Development Manager for Texas Instruments

–Business Development Manager for Motorola Inc's RFID technology

–Managed strategic relationships, direct sales and launching an entirely new product line

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Smart Card Industry

•International production of smart cards is dominated by a
    few large companies selling cards as commodities:

–HID Global

–Gemplus

–Inside Contactless

–Schlumberger

–Card Logic

NOTE: QI Systems does not compete with card manufacturers.

•North America lags behind the rest of the world in smart
    card use

•Percentage growth by regions of the world ‘01 to ’03:

–EMEA46%

–Asia - Pacific 31%

–Latin America19%

–North America 4%

ScillumBelgerSelly 3-2003

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Smart Card Industry

•Total number of smart cards in use in North America
is now dramatically growing:

–1996 smart cards in use273 Million

–2005 smart cards in use543 Million

•Total global smart card production is growing at a
rapid rate:

–1996 production total 5 Billion

–2003 production total19 Billion

Frost & Sullivan 415-961-9000

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Card - Front
end

Reader -
Middleware

Software -
Back end

QI Systems’ Products

Smart Card System Overview

Three parts

1.Smart card - front end commodity

2.Reader - middleware technology

3.Software and data collection - back end system

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Types of Smart Card Systems

•Closed (restricted to selected users)

–Loyalty program

–Only accept one card type

–Original ATMs

•Open (unrestricted for general users)

–Accepts multiple cards

–Current ATMs

•QI Systems offers both options or
combination

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–Financial	–Stored Value
–Loyalty programs	–Access control
–Data control	–Biometrics

Benefits of Smart Card Systems

•Improves Profitability

–Increases revenue

–Reduces costs, theft and vandalism

–Improves cashflow

•More secure than cash or magnetic stripe cards

•More durable and stores more information than
magnetic stripe

•Flexible, customized solutions

•Multiple applications

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Manufacturing

•Strategy is to design and document products for
high volume manufacturing

–third-parties doing the production of components

•Build first article prototypes in Vancouver

•Utilize manufacturing partners

–local and in Asia

–cost competitive

–eliminates high capital investment

–ability to ramp up production quickly

•Assembly and testing is performed in Vancouver

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Markets

•Closed systems

–Range of markets is almost limitless

–QI initial target markets

•Laundromats and route laundry operators

•Colleges and corporate campuses

•Municipalities, state and federal parks

•Theme parks, resorts, tourist centers, arcades

•Open systems

–Credit cards

•VISA PayPass, Chase Blink, AMEX Blue

–Debit cards

•Hybrid systems

–QI can offer readers that accept both closed and
open system cards

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Market Opportunities

•QI is one of a few card solution companies in
the world that offers a broad base of technical
expertise applicable to a variety of industries

•Other Opportunities:

–Open systems - credit card readers

–Oil and Gas

–Gaming

–Property Management

–ID, Health care, Data collection

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Competitive Advantage

•Expertise in broad range of industries

•Understand both smart cards and modern
vending device interfaces

•Full suite of products and services

•First to market in contactless technology

•Low cost production

•Strong partner base to support additional
applications

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Product Line4 Competition6	Parking	Laundry	Vending	Bike Rental
QI Systems	X	X	X	X
USA Technologies		X	X
ESD		X
Debitek		X	X
Velib				X
Parcxmart	X
Greenwald		X

Vertical Market Competition

•QI offers full suite of products and services across a broad range of
industries

•No other company offers contact, contactless and hybrid smart card
technology

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Case Study - Parking

•Customer Needs: Solar powered cashless
municipal parking systems

•Customer objective: Reliable low priced card
readers

•QI Solution: QI SmartReader cashless readers
and reload stations

•Competing solutions: QI sole sourced

•2008 projected product revenue: $1,000,000

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Case Study - Laundry

•Customer Needs: Contactless, cashless route
laundry payment systems

•Customer objective: Reliable low priced card
readers

•QI Solution: QiWave & Wash™ contactless
cashless readers and reload stations

•Competing solutions: Greenwald, EDS

•2008 projected product revenue: $1,500,000

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Case Study - Newspaper Vending

•Customer Needs: Cashless newspaper box
payment system

•Customer objective: Reliable, low priced card
readers

•QI Solution: QI SmartReader cashless readers
and reload stations accepting student ID cards

•Competing solutions: QI sole sourced

•2008 projected product revenue: $750,000

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Case Study - Bicycle Stations

•Customer Needs: Cashless bicycle distribution
systems

•Customer objective: Unattended card operated
distribution system

•QI Solution: QI CycleStation cashless readers and
operating system

•Competing solutions: Velib

•2008 projected product revenue: $750,000

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Capitalization Table

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Historical Income Statement

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Historical Balance Sheet

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Growth Strategy

•Aggressive launch of new QiWave product
line

–Contactless smart card technology

•Initial QI Focus & Sales Channels

–Laundromats - distributors

–Route Laundry - direct sales

–Campus - integrators, distributors

–Bikes - direct sales, partners

–Water - distributors, direct sales

–Leisure and Entertainment - partners,
integrators

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Financial Model

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Investment Summary

•Summary

–Great technology, huge market opportunities, first to market with
contactless vending, history of technological excellence

•Great People

–Veteran management team, extremely strong engineering
department

•Solid Processes

–Products designed for ease of manufacture and assembly,
non-critical items sourced in low cost markets

•Strong Technology Leadership

–Strengths in smart cards, contactless interface and vending
devices, plug and play design

•Sales traction / profitability

–High interest in QiWave in all markets

–Growth target >100% per year for next 2 years

–High gross margin potential

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101-3820 Jacombs Road

Richmond, BC, CN V6V 1Y6

Phone:  604-248-2301

Fax:      604-248-2306

609 Cheek Sparger Road

Suite 300
Colleyville, TX 76034
Phone:  817-485-8111

Fax:      817-485-8186

Visit us on the web at:
www.qisystemsinc.com

QI Systems Inc.

•Canadian Operations

•US Headquarters

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