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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
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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.
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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.
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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
Investor RelationsRon Both, CMAT [email protected]
8085 S Chester Street, Suite 108
Centennial, CO 80112
www.virtualarmour.com
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APPENDIX
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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%
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
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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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
BIGGEST DATA BREACHES OF 21ST CENTURY
Source: CSOonline.com 21
www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
U.S. – HIGHEST COST OF DATA BREACHES
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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
FINANCIAL SECURITY BREACHES
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www.virtualarmour.comOTCQB:VTLR CSE:VAI FRA:3V3
SECURITY STATS
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