Plurilock’s Solutions Division has signed a cumulative US$3.16M in new business since April 2021
Robust activity in the cybersecurity sector has resulted in an active M&A pipeline with multiple offers in play
Filing of three U.S. provisional patent applications increases Plurilock’s total patent portfolio to six
VICTORIA, BRITISH COLUMBIA—Plurilock Security Inc. (TSXV: PLUR) (OTCQB: PLCKF) and related affiliates (“Plurilock” or the “Company”), an identity-centric cybersecurity solutions provider for workforces, is pleased to provide the following corporate update for the first half of 2021.
2021/2022 Growth & Industry Outlook
With the Aurora Systems Consulting Inc. (Aurora) acquisition completed and the organization integrated within the Plurilock family, the Company is currently evaluating several opportunities, as bolt-on acquisitions in the identity-centric area of cybersecurity. With the recent string of high-profile cyber attacks, organizations of all sizes are addressing their infrastructure needs, which has led to the Company announcing over US$3.16M in contract wins since the acquisition in April 2021.
Plurilock continues to identify and evaluate potential accreditive acquisition targets with a large customer base in order to capture synergistic opportunities. Plurilock plans to leverage distribution channels and cross-sell the Company’s high-margin products to Aurora’s existing client base, which would result in an increased revenue run rate. It is expected that the Company will continue to execute on its M&A pipeline in order to add additional revenue to the business.
Ransomware attacks have increased globally by 102% this year, compared to the first half of 2020, with healthcare and utilities being the most targeted sectors.1 Major incidents such as the Colonial Pipeline and Oldsmar’s water treatment attack have brought more awareness to this global crisis. In line with the increased focus on cybersecurity, on May 12, 2021, President Biden signed an executive order to urge U.S. federal government agencies to strengthen their defenses.2
The surge in cyber attacks and data breaches has resulted in high demand for advanced cyber defense solutions. According to a report from Cybersecurity Ventures, global cybersecurity spending is estimated to exceed US$1 trillion cumulatively from 2017 to 2021.3 These statistics underscore the need and opportunity in the market for solutions like Plurilock’s proprietary products.
At the end of March 2021, Plurilock completed the acquisition of Aurora, a leading IT and security solutions provider. A summary of Aurora that was previously included in a Plurilock press release dated April 1, 2021 including:
Revenue of US$28.1 million (CAD$35.8 million) in 2020
Gross Margin of US$1.4M in 2020
Diversified client base consisting of over 140 tier-1 organizations
Numerous prominent master service agreements with state and federal agencies in the United States
Concurrently, Plurilock divided its operations into two divisions, namely the Technology Division (Plurilock’s existing portfolio of software products) and Solutions Division (Aurora’s products and services).
The Aurora acquisition enables the Company to leverage the Solutions Division’s extensive distribution channels which sell high volume & low margin products to cross-sell the Technology Division’s high-margin products.
Since the acquisition announcement, Plurilock has successfully increased sales velocity, notably including:
US$1.15 million order with the U.S. Department of the Navy
US$120,000 order with the U.S. Special Operations Command under the SEWP V program
US$400,000 order from a California state health care agency under the NASPO ValuePoint program
Total cumulative contracts awarded since the acquisition represent US$3.16M in sales
These examples demonstrate that Aurora was a strong investment, as the Solutions Division continues to generate significant new sales and add to Plurilock’s topline revenue.
Additionally, Plurilock has continued sales of its proprietary Technology Division products in a competitive market, securing its first order from a company in the pharmaceutical manufacturing space through IT service reseller GiaSpace.
Plurilock has an active M&A program with multiple offers in play for synergistic growth opportunities in the cybersecurity space. The Company has global targets for the Solutions Division to expand and enhance distribution and targets for the Technology Division for additional capacity in technology, talent, and recurring revenue opportunities.
Final Base Shelf Prospectus and Recent Financing
Plurilock filed and obtained a receipt for its final short form base shelf prospectus in May 2021 enabling Plurilock to raise up to C$50 million over a 25-month period for general corporate purposes, capital projects, internal expansion, or for the acquisition of other businesses, assets, or securities. Additionally, Plurilock raised over C$5.1 million in aggregate proceeds from two non-brokered private placements to pursue growth initiatives, announced on February 26, 2021.
Certification and Compliance Program
The Company continues to roll out its certification and compliance program, which commenced in November 2020 in pursuit of System and Organization Controls 2 (“SOC2”) Type II standard compliance. A SOC 2 Type II report covers the operational effectiveness of a vendor’s systems which will provide assurance to the clients of Plurilock that the Company is providing its services securely with the goal of protecting their privacy.
Scientific Research and Experimental Development (SR&ED) Tax Credits and U.S. Small Business Payroll Protection Program (PPP) Loan Forgiveness
As a result of expanding its U.S. patent portfolio, research and development expenditures incurred by Plurilock in 2020 granted the Company eligibility to receive $69,432 in SR&ED tax credits. In April 2021, Plurilock’s U.S. Small Business PPP loan worth US$199,830 in principal and US$2,053.81 in interest was remitted and forgiven.
Additions to Board of Directors and Advisory Board
The Company added retired U.S. Navy Vice Admiral Jan E. Tighe to its Advisory Board, who currently serves as an independent director on the board of Goldman Sachs, to assist Plurilock in growing its North American client base. In addition, Plurilock appointed Molly Falconer de Ramel, CEO of Periwinkle LLC, a prominent executive coach and a former news anchor on Fox News Channel, to its Board of Directors. Having worked with major clients in the banking sector such as the Bank of America, Credit Suisse and JP Morgan Chase, Molly is well-positioned to provide guidance to the Company in establishing strong relationships with U.S. enterprise customers.
Core Product Initiatives and Patented Technology Updates
The Company engaged in and launched several product-related initiatives and U.S. patent portfolio expansions, including:
The launch of Plurilock’s Spring 2021 product release which provides additional early access features and enhanced functionality for the Technology Division’s ADAPT multi-factor authentication (MFA) and DEFEND continuous authentication solutions.
The transition of Plurilock’s systems and clients to an advanced high-availability cloud architecture that features the Elastic Kubernetes Service for enhanced reliability and scalability.
The filing of three U.S. provisional patent applications, which covers innovations focusing on insider threats, enhancements to Plurilock’s authentication technology, and a new form of continuous authentication for remote work sessions. Plurilock’s patent portfolio now includes six issued and provisional patents, enhancing its competitive moat for the organization.
The release of a Splunk SIEM application to support the Company’s DEFEND continuous authentication solution, aligned with a key corporate milestone Plurilock highlighted as a priority at the end of 2020 to secure new platform integrations.
“The first half of 2021 has been an active one for our team,” said Ian L. Paterson, CEO of Plurilock. “The achievements have positioned us well to take empower our customers with solutions to solve critical issues and defend against threats. Since our recent acquisition of Aurora, we have seen an acceleration in sales activity due to an overwhelming demand from enterprise customers. We plan to continue rapid expansion of our business by evaluating synergistic companies that can widen our customer distribution and accelerate time to market for advanced cybersecurity technologies.”
Plurilock provides identity-centric cybersecurity for today’s workforces. The Plurilock family of companies enables organizations to operate safely and securely while reducing cybersecurity friction. Plurilock offers world-class IT and cybersecurity solutions through its Solutions Division, paired with proprietary, AI-driven and cloud-friendly security through its Technology Division. Together, the Plurilock family of companies delivers persistent identity assurance with unmatched ease of use.
For more information, visit https://plurilock.com or contact:
Ian L. Paterson
Chief Executive Officer
Chief Financial Officer
This press release may contain certain forward-looking statements and forward-looking information (collectively, “forward-looking statements”) related to future events or Plurilock’s future business, operations, and financial performance and condition. Forward-looking statements normally contain words like “will”, “intend”, “anticipate”, “could”, “should”, “may”, “might”, “expect”, “estimate”, “forecast”, “plan”, “potential”, “project”, “assume”, “contemplate”, “believe”, “shall”, “scheduled”, and similar terms. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions, and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Plurilock’s business. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation, the impact of general economic conditions, the success of the Company in obtaining new or extended contracts or orders; the Company’s ability to maintain existing customers or develop new customers; the Company’s ability to successfully integrate acquisitions of other businesses and/or companies or to realize on the anticipated benefits thereof; and unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. This list is not exhaustive of the factors that may affect the Company’s forward-looking statements. Many of these factors are beyond the control of Plurilock. All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof, and Plurilock undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws. Risks and uncertainties about the Company’s business are more fully discussed under the heading “Risk Factors” in its most recent Annual Information Form. They are otherwise disclosed in its filings with securities regulatory authorities available on SEDAR at www.sedar.com.
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