premier provider of cybersecurity managed services … · premier provider of cybersecurity managed...

CROP

Premier Provider of Cybersecurity Managed Services

OTCQB:VTLR CSE:VAI FRA:3V3

June 2018Corporate Presentation

www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3

IMPORTANT CAUTIONS REGARDING FORWARD LOOKING STATEMENTS

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This presentation may include forward-looking information within the meaning of Canadian securities legislation and U.S. securities laws. It contains certain forward-looking statements concerning the future performance of our business, its operations and its financial performance and condition, as well as management’s objectives, strategies, beliefs and intentions.

The forward-looking information is based on certain key expectations and assumptions made by the management of VirtualArmour. Although, VirtualArmour believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information as VirtualArmour cannot provide any assurance that it will prove to be correct.

Forward-looking statements are frequently identified by such words as “may”, “will”, “plan”, “expect”, “anticipate”, “estimate”, “intend” and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management.

All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the success of the Academies, the future employee potential from the Academies, future interest in such programs, competitive risks and the availability of financing. These forward-looking statements are made as of the date of this presentation and VirtualArmour disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

© 2018 VirtualArmour International, Inc. All Rights Reserved. 060118

VirtualArmour is a high growth Cybersecurity Managed Services Provider

(MSP) that specializes in Advanced Networking & Cybersecurity

Denver HQ, Global Presence, with Security Operation

Centers in Middlesbrough, UK & Salt Lake City, UT

Proprietary Cybersecurity Products & Services

Expanding High-Margin, Recurring Revenue

Growing Global Enterprise Customer Base

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Who We Are


KEY STATS (OTCQB:VTLR, CSE:VAI, FRA:3V3)

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mrq = most recent quarter ttm = trailing 12 months Stock trading data sources: Yahoo! Finance, Bigcharts.com and Nasdaq.com

Total Annual RevenueExchange OTCQB ($US) CSE ($CN)

Stock Price $0.22 $0.27

52 Wk Low-High $0.15 - $1.00 $0.18 - $0.36

Avg. Vol. 1,475 4,270

Shares Outstanding mrq 63.6M

Free Float Shares est. 43%

Market Cap USD $12.7M

Insider Holdings 50%

Employees 45

Year Founded 2001 Year End Dec 31

$1.6 $2.1$2.8

$5.8

$6.8

$7.7

$7.4M

$8.9M

$10.5M

2015 2016 2017

$millions

Hardware & SoftwareManaged & Prof. Services

Revenue (mrq) $3.3M

Net Comprehensive Loss mrq $127K

Adj. EBITDA mrq $15K

Annual Recurring Rev. (ARR) $3.7M

Total Contract Value (TCV) mrq $6.1M

Cash (@5-25-18) $539K

Total Assets mrq $2.8M

Total Debt mrq $133k

Total Liabilities mrq $3.5M


MAJOR CYBERSECURITY EVENTS OVER LAST 12 MONTHS

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Source: CNN

Personal data of 145 million people stolen. Considered among worst breaches of all time, creating long-term identity theft problems.

200 million voter records exposed online after a GOP data firm misconfigured security settings.

Petya computer virus spread to major global businesses, including FedEx, WPP, Rosneft and Maersk.

WannaCry ransomware, based on leaked NSA tools, hit 300,000+ machines across multiple industries in 150+ countries, including hospitals and financial services companies.

Target paid $18.5 million multistate settlement — largest ever for a data breach. Affected 41 million customer accounts. A turning-point for the industry.

Yahoo! finally revealed last October that ALL of its 3 billion accounts were hacked in 2013 –3x more than initially reported.

http://money.cnn.com/2017/12/18/technology/biggest-cyberattacks-of-the-year/index.html


CYBERSECURITY HIGH-GROWTH MARKET DRIVEN BY GROWING THREATS

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Source: Juniper Research, The Wall Street Journal, CyberSecurity Ventures

DAMAGE COSTS

from cyber crime

to hit $2.4 trillion

annually by 2022.

CYBERSECURITY

spending to exceed

$135 Billion by

2022.

CYBER CRIME

will more than

triple the number

of unfilled

cybersecurity

jobs (3.5 million by

2021).

4 BILLION

people will be

targeted by

cybercrime by

2020.

GLOBAL

damages cost

more than $5

billion last year for

ransomware

alone.

https://cybersecurityventures.com/


MANAGED SECURITY SERVICES OPPORTUNITY

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Multi-year Agreements

Dollars in US

of enterprises

will have an

MSP by 2020

Source: Gartner 2017

$46.1 BILLION

$19.4 BILLION

2017A 2023F

40%

High Margin

High Customer Retention


MANAGED SERVICES

• 24x7x365

• Alerting

• Management

• Monitoring

• Maintenance

• Prevention

PROFESSIONAL SERVICES

• Design

• Architecture

• Implementation

• Migration & Training

HARDWARE & SOFTWARE

• Partner with Top Technology Partners

WE ADDRESS THIS MARKET OPPORTUNITY WITH A FULL SUITE OF CYBERSECURITY PRODUCTS & SERVICES

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PROPRIETARY SOLUTIONS: CLOUDCASTR

CLIENT PORTAL PORTAL ENABLES

• Unparalleled responsiveness

• Proactive client communication

• One-to-one client management, from CTOs to CEOs

• Customized response protocols

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Direct Sales – Consultative team approach, by internal sales team.

GO-TO-MARKET APPROACH

Technology Partner Sales –Technology partner referral.

Today, everyone has a vested interest in protecting their business — from IT, Network,

Operations and Compliance Directors, to the C-Suite of CIOs, CISOs, & CEOs.

Channels Sales – worldwide network of co-marketing partners

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GROWING CUSTOMER BASE

Top Tier Customers

Spanning 30 Countries

Across Multiple Industries Why We Win

✓ Engineering talent

✓ High touch customer experience

✓ Consultative sales approach

✓ Unparalleled responsiveness

✓ Advanced prevention platform

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125+ Enterprise Clients

30+ Under Long-term Managed

Service Contracts

100% Customer Retention

Rate Last 5 Quarters


Managed & Prof. Services TCV & ARR

Total Gross Margin %

Annual Revenue Growth

$1.6$2.1

$2.8

$5.8

$6.8

$7.7

$7.4M

$8.9M

$10.5M

2015 2016 2017

$millions

Hardware & Software

Managed & Prof. Services

FINANCIAL PERFORMANCE

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$2.5

$6.1

$1.7

$3.7

3/31/17 6/30/17 9/30/17 12/31/17 3/31/18

$millions

Total Contract Value (TCV)Annual Recurring Revenue (ARR)

$457K

$597K

$818K

$928K

$1.1M

22.4%

39.0%

39.9% 39.7%

48.9%

Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

Managed & Prof. Services Revenue

Gross Margin %

17.1% 17.6%

26.0% 24.4%28.1%

Q1-17 Q2-17 Q3-17 Q4-17 Q1-18

ARR = value of its managed service contracts normalized to a one-year period. TCV = total value of service contracts including one time and recurring charges.

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GROWTH STRATEGY

Team BuildingAdd new Sales &

Technical talent

Margin

ImprovementContinue to grow

Managed &

Professional Services

business

Infrastructure

InvestmentEstablish Additional

Security

Operations Center

(SOC) at Denver

HQ

Security Platform

Development• CloudCastr platform

additional functionality

• Launch Blockchain-

based Managed Security

Solution

Market

Expansion thru investment in

• Brand Awareness

• Partnerships

• Lead Generation

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KEY TAKEAWAYS

Exploding Cybersecurity & managed services market

Fast-growing, high-margin recurring revenue business

Proprietary platform delivers competitive edge

Top-tier, international customer base

100%+ customer retention rate last five quarters

On track for record growth in 2018 & beyond

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CONTACT US

Russ Armbrust

Chief Executive Officer

VirtualArmour International, Inc.

T 855-422-8283

[email protected]

Investor RelationsRon Both, CMAT [email protected]

8085 S Chester Street, Suite 108

Centennial, CO 80112

www.virtualarmour.com

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APPENDIX


Experienced in Growing Businesses that Excel in Service & ProfitabilityMANAGEMENT TEAM

Russ ArmbrustCEO

Andrew DouthwaiteCTO

Tianyi LuChief Architect

Chad SchambergerV.P. Engineering Services

Kyle DuffyVP Customer Experience

• 20 years experience in engineering services, focused on growing service based businesses

• V.P. of sales before becoming CEO of the company in May 2018

• Previously VP of business development at Axis Technical Group, a Microsoft Gold Partner and IT advisor to multiple industries.

• VP of operations and business development at Seeing Machines, world leader in computer vision technologies.

• 12+ years leading growth in managed services business from two to 30+ customers.

• Joined in 2007 as a senior engineer

• Promoted to director of engineering services in 2012, VP of managed services in 2015, then CTO in May 2018

• Earlier, a web developer at TeleWare after beginning his career as software developer at Intex

• Computing/software engineering degree, Leeds Beckett University

• Based in UK SOC

• 6 years of information security and large scale network architecture experience, enabling business to securely scale

• Previously principal & founder of Acrono Services, provider of system solutions (networking, wireless, desktop, server/systems, and virtualization) to SMBs and large enterprise

• BAs in computer science and Molecular, Cellular and Developmental Biology, Univ. of Colorado

• 7 years running VirtualArmour’s engineering services with increasing levels of responsibility

• Earlier a system engineer at Juniper Networks and Sales Engineers at Nortel

• BSEE Kansas State University

• 12 year experience, responsible for driving customized solutions and service that exceeds our customers expectations

• Former VP of Product Management & Delivery at Axis Technical Group

• Executive Director of Business Development, WhiteStar Holdings

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VIRTUALARMOUR ACADEMY

• The VirtualArmour Academy was developed in association with local colleges and universities near our security operation centers so we are able to mine local resources to provide exceptional service.

• Students further develop their knowledge and skills to become the best-managed service engineers in cybersecurity.

• At the Academy we expect future graduates to bring new ideas, energy, and enthusiasm to VirtualArmour.

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CAP TABLE

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Market Capitalization (May 31, 2018) $17,171,851

Shares Outstanding – Basic 63,599,447

Options Outside the Plan(avg. price $0.17) 2,095,474

Option Within the Plan (avg. price$.17) 4,214,944

Fully Diluted Shares Outstanding 69,909,865

Insider Ownership 50%


USE OF NON-GAAP FINANCIAL MEASURESIn addition to IFRS financial measures, management uses non-IFRS financial measures to assess the company's operational performance. It is likely that the non-IFRS financial measures used by the company will not be comparable to similar measures reported by other issuers or those used by financial analysts as their measures may have different definitions.

Generally, a non-IFRS financial measure is a numerical measure of an entity's historical or future financial performance, financial position or cash flows that is neither calculated nor recognized under IFRS. Management believes that such non-IFRS financial measures can be important as they provide users of the financial statements with a better understanding of the results of the company's recurring operations and their related trends, while increasing transparency and clarity into its operating results. Management also believes these measures can be useful in assessing the company's capacity to discharge its financial obligations.

In Q1 2018, management began assessing its operational performance using supplemental non-IFRS statement of income, adjusted EBITDA, which is defined as loss for the period as reported excluding depreciation and amortization, change in fair value of warrant derivative liabilities, share-based compensation and interest expense.

Adjusted EBITDA is not a term recognized under IFRS and non-IFRS measures do not have standardized meaning. Accordingly, non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

The following table provides a reconciliation of net (loss) for the period as reported to non-IFRS adjusted EBITDA for the three months ended March 31, 2018 and 2017:

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Loss for the period as reported (489,830) (410,694) (342,545) (547,852) (127,212)

Add (deduct):

Depreciation and amortization 33,410 35,059 38,537 56,835 32,740

Change in fair value of warrant derivative liabilities (28,671) 11,045 (9,547) - (2,589)

Share-based compensation 74,727 (68,548) 77,863 76,597 72,971

Interest Expense 11,866 43,257 48,586 53,050 39,001

Bad Debt Expense - - - 9,116

Adjusted EBITDA (398,498) (389,881) (187,106) (352,254) 14,911

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BIGGEST DATA BREACHES OF 21ST CENTURY

Source: CSOonline.com 21

https://www.csoonline.com/article/2130877/data-breach/the-biggest-data-breaches-of-the-21st-century.html

https://www.csoonline.com/article/2130877/data-breach/the-biggest-data-breaches-of-the-21st-century.html


U.S. – HIGHEST COST OF DATA BREACHES

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FINANCIAL SECURITY BREACHES

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SECURITY STATS

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