VirtualArmour Investor Relations Presentation Q3 2017
INVESTOR RELATIONS BUSINESS OVERVIEW
1
virtualarmour.com
CYBERSECURITY MARKET PREDICTORS 1. Cyber crime damage costs to hit $6 trillion annually by 2021 2. Cybersecurity spending to exceed $1 trillion from 2017 to 2021 3. Cyber crime will more than triple the number of unfilled cybersecurity jobs (3.5 million by 2021) 4. Human attack surface to reach 4 billion people by 2020 5. Global ransomware damage costs are predicted to exceed $5 billion in 2017.
2
virtualarmour.com
WHO WE ARE VirtualArmour is a high growth Cyber-Security Managed Services Provider (MSP) that offers proprietary solutions for Advanced Networking and Cybersecurity business needs through the delivery of: ▪ Managed Services - which includes 24x7x365 alerting, management, monitoring, maintenance and most importantly prevention ▪ Professional Services – which includes design, architecture, consulting, assessments, implementation, migration and training ▪ Hardware and Software Resell – when you need a refresh to the latest technology
3
virtualarmour.com
GLOBAL PRESENCE FOR SERVICES AND SUPPORT Established Security Operations Centers (SOC) in US and UK
Operating 24/7/365
Serving Clients in 30+ Countries across 5 Continents
4
virtualarmour.com
WHY BUSINESSES ARE OUTSOURCING MANAGED SERVICES A SECURE NETWORK ISN’T AN OPTION, IT’S A REQUIREMENT FOR ENTERPRISES AND DRIVEN B Y: 1. Cost Savings – MSP’s can distribute costs for engineers, analysts, security appliances/applications and facilities across their entire customer base 2. Security Expertise – MSP’s have already made the investment in a dedicated team of security specialists that have the right tools and response protocols 3. Customer Experience – MSP’s can provide real-time cyber security response 24 hours a day, 7 days a week, 365 days a year because they already have the infrastructure and technology in place
5
virtualarmour.com
MANAGED SECURITY SERVICES OPPORTUNITY
30 Billion
• Multi-year agreements 40% of Enterprises will have an MSP by 2020
• High customer retention
8 Billion • High margin offering
2015
2020 All figures in USD
6
virtualarmour.com
OUR TECHNOLOGY PARTNERS
7
virtualarmour.com
OUR CLIENTS
8
virtualarmour.com
PROPRIETARY SOLUTIONS THAT DIFFERENTIATE
Portal Enables: • Unparalleled Responsiveness • Proactive Client Communication • One to One Client Management • Customized Response Protocols 9
CLIENT PORTAL AND PREVENTION PLATFORM
virtualarmour.com
SUSTAINED MANAGED SERVICES GROWTH Managed Services Revenue Trends $10,000,000
$350,000
$9,000,000 $300,000 $8,000,000 $250,000
$7,000,000 $6,000,000
$200,000 $5,000,000 $150,000 $4,000,000 $3,000,000
$100,000
$2,000,000 $50,000 $1,000,000
*
$December 2016
August 2017 Contracted Managed Services Revenue
$0
December 2017 Monthly Managed Services Revenue
*Projected based on current pipeline
10
virtualarmour.com
WHY INVEST? Rapidly expanding high margin recurring revenue MSP business Seasoned executive team with growth experience Exploding cybersecurity and Managed Services market Top-tier and international customer base Proprietary CloudCastr Client Portal and Prevention Platform 100% customer retention rate
11
virtualarmour.com
FINANCIAL FORECAST 2015
2016
2017P
2018P
Managed & Professional Services
$1,576,965
$2,050,835
$ 3,060,841
$ 6,013,661
Product Sales
$5,789,344
$6,846,257
$9,237,200
$ 11,639,649
$7,366,309
$8,897,092
$ 12,298,041
$ 17,653,310
$5,234,615
$6,624,066
$ 8,903,713
$ 11,393,715
$2,131,694
$2,273,026
$ 3,394,328
$ 6,259,595
Operating Expenses
$2,477,085
$3,356,072
$ 3,134,424
5,076,480
Operating Income
($345,391)
($1,083,046)
$73,476
$993,107
$216,046
($487,081)
$ 259,904
$ 1,183,115
REVENUE
Total Revenue COST OF REVENUE
Contribution Margin/Gross Profit
EBITDA * All figures in USD
12
* EBITDA based on Adjusted Net Income in 2015 & 2016 that was adjusted for certain non-cash items and other transactions related to going public
virtualarmour.com
INVESTING IN GROWTH
Hiring of key personnel including sales and technical staff 13
Expansion of Capital Markets Campaign and Promotion
Market expansion through investment in Brand awareness, partnerships and lead generation services
Establishment of new Security Operations Center within Denver Headquarters
USE OF PROCEEDS virtualarmour.com
Continued R&D and platform infrastructure development
DRIVING CUSTOMER & EBITDA GROWTH
MANAGEMENT TEAM
Christopher Blisard Founder and Chairman
Todd Kannegieter Founder and CEO
Russ Armbrust Vice President, Sales
Andrew Douthwaite Vice President, Managed Services
Chad Schamberger Vice President, Engineering Services
Nick Dinsmoor Vice President, Strategy and Marketing
Kyle Duffy Vice President, Customer Experience
Experienced in growing businesses that excel in service and profitability 14
virtualarmour.com
DISCLAIMER This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of the Company’s securities, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, the facilities or any of the Company’s securities in any jurisdiction. Neither this presentation nor anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this presentation based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. These projections should not be considered a comprehensive representation of the Company’s cash generation performance. The financial information included in this presentation is preliminary, unaudited and subject to revision upon completion of the Company's closing and audit processes. This financial information has not been adjusted to reflect the outcome of any reorganization of the company’s capital structure, the resolution or impairment of any pre-petition obligations, and does not reflect fresh start accounting which the company may be required to adopt. All forward–looking statements attributable to the Company or person acting on its behalf apply only as of the date of this document, and are expressly qualified in their entirety by the cautionary statements included elsewhere in this document. The financial projections are preliminary and subject to change; the Company undertakes no obligation to update or revise these forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.
15
virtualarmour.com
THANK YOU
VirtualArmour 8085 South Chester Street, Suite 108 Centennial, CO 80112 virtualarmour.com
16
virtualarmour.com
1
virtualarmour.com
CYBERSECURITY MARKET PREDICTORS 1. Cyber crime damage costs to hit $6 trillion annually by 2021 2. Cybersecurity spending to exceed $1 trillion from 2017 to 2021 3. Cyber crime will more than triple the number of unfilled cybersecurity jobs (3.5 million by 2021) 4. Human attack surface to reach 4 billion people by 2020 5. Global ransomware damage costs are predicted to exceed $5 billion in 2017.
2
virtualarmour.com
WHO WE ARE VirtualArmour is a high growth Cyber-Security Managed Services Provider (MSP) that offers proprietary solutions for Advanced Networking and Cybersecurity business needs through the delivery of: ▪ Managed Services - which includes 24x7x365 alerting, management, monitoring, maintenance and most importantly prevention ▪ Professional Services – which includes design, architecture, consulting, assessments, implementation, migration and training ▪ Hardware and Software Resell – when you need a refresh to the latest technology
3
virtualarmour.com
GLOBAL PRESENCE FOR SERVICES AND SUPPORT Established Security Operations Centers (SOC) in US and UK
Operating 24/7/365
Serving Clients in 30+ Countries across 5 Continents
4
virtualarmour.com
WHY BUSINESSES ARE OUTSOURCING MANAGED SERVICES A SECURE NETWORK ISN’T AN OPTION, IT’S A REQUIREMENT FOR ENTERPRISES AND DRIVEN B Y: 1. Cost Savings – MSP’s can distribute costs for engineers, analysts, security appliances/applications and facilities across their entire customer base 2. Security Expertise – MSP’s have already made the investment in a dedicated team of security specialists that have the right tools and response protocols 3. Customer Experience – MSP’s can provide real-time cyber security response 24 hours a day, 7 days a week, 365 days a year because they already have the infrastructure and technology in place
5
virtualarmour.com
MANAGED SECURITY SERVICES OPPORTUNITY
30 Billion
• Multi-year agreements 40% of Enterprises will have an MSP by 2020
• High customer retention
8 Billion • High margin offering
2015
2020 All figures in USD
6
virtualarmour.com
OUR TECHNOLOGY PARTNERS
7
virtualarmour.com
OUR CLIENTS
8
virtualarmour.com
PROPRIETARY SOLUTIONS THAT DIFFERENTIATE
Portal Enables: • Unparalleled Responsiveness • Proactive Client Communication • One to One Client Management • Customized Response Protocols 9
CLIENT PORTAL AND PREVENTION PLATFORM
virtualarmour.com
SUSTAINED MANAGED SERVICES GROWTH Managed Services Revenue Trends $10,000,000
$350,000
$9,000,000 $300,000 $8,000,000 $250,000
$7,000,000 $6,000,000
$200,000 $5,000,000 $150,000 $4,000,000 $3,000,000
$100,000
$2,000,000 $50,000 $1,000,000
*
$December 2016
August 2017 Contracted Managed Services Revenue
$0
December 2017 Monthly Managed Services Revenue
*Projected based on current pipeline
10
virtualarmour.com
WHY INVEST? Rapidly expanding high margin recurring revenue MSP business Seasoned executive team with growth experience Exploding cybersecurity and Managed Services market Top-tier and international customer base Proprietary CloudCastr Client Portal and Prevention Platform 100% customer retention rate
11
virtualarmour.com
FINANCIAL FORECAST 2015
2016
2017P
2018P
Managed & Professional Services
$1,576,965
$2,050,835
$ 3,060,841
$ 6,013,661
Product Sales
$5,789,344
$6,846,257
$9,237,200
$ 11,639,649
$7,366,309
$8,897,092
$ 12,298,041
$ 17,653,310
$5,234,615
$6,624,066
$ 8,903,713
$ 11,393,715
$2,131,694
$2,273,026
$ 3,394,328
$ 6,259,595
Operating Expenses
$2,477,085
$3,356,072
$ 3,134,424
5,076,480
Operating Income
($345,391)
($1,083,046)
$73,476
$993,107
$216,046
($487,081)
$ 259,904
$ 1,183,115
REVENUE
Total Revenue COST OF REVENUE
Contribution Margin/Gross Profit
EBITDA * All figures in USD
12
* EBITDA based on Adjusted Net Income in 2015 & 2016 that was adjusted for certain non-cash items and other transactions related to going public
virtualarmour.com
INVESTING IN GROWTH
Hiring of key personnel including sales and technical staff 13
Expansion of Capital Markets Campaign and Promotion
Market expansion through investment in Brand awareness, partnerships and lead generation services
Establishment of new Security Operations Center within Denver Headquarters
USE OF PROCEEDS virtualarmour.com
Continued R&D and platform infrastructure development
DRIVING CUSTOMER & EBITDA GROWTH
MANAGEMENT TEAM
Christopher Blisard Founder and Chairman
Todd Kannegieter Founder and CEO
Russ Armbrust Vice President, Sales
Andrew Douthwaite Vice President, Managed Services
Chad Schamberger Vice President, Engineering Services
Nick Dinsmoor Vice President, Strategy and Marketing
Kyle Duffy Vice President, Customer Experience
Experienced in growing businesses that excel in service and profitability 14
virtualarmour.com
DISCLAIMER This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of the Company’s securities, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, the facilities or any of the Company’s securities in any jurisdiction. Neither this presentation nor anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this presentation based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. These projections should not be considered a comprehensive representation of the Company’s cash generation performance. The financial information included in this presentation is preliminary, unaudited and subject to revision upon completion of the Company's closing and audit processes. This financial information has not been adjusted to reflect the outcome of any reorganization of the company’s capital structure, the resolution or impairment of any pre-petition obligations, and does not reflect fresh start accounting which the company may be required to adopt. All forward–looking statements attributable to the Company or person acting on its behalf apply only as of the date of this document, and are expressly qualified in their entirety by the cautionary statements included elsewhere in this document. The financial projections are preliminary and subject to change; the Company undertakes no obligation to update or revise these forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.
15
virtualarmour.com
THANK YOU
VirtualArmour 8085 South Chester Street, Suite 108 Centennial, CO 80112 virtualarmour.com
16
virtualarmour.com
