CYNERGISTEK I N V E S T O R P R E S E N T A T I O N NYSE AMERICAN: - - PowerPoint PPT Presentation

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CYNERGISTEK I N V E S T O R P R E S E N T A T I O N NYSE AMERICAN: - - PowerPoint PPT Presentation

CYNERGISTEK I N V E S T O R P R E S E N T A T I O N NYSE AMERICAN: CTEK SAFE HARBOR STATEMENTS This presentation contains, and our officers and representatives may from time to time make, forward-looking statements within the meaning of


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NYSE AMERICAN: CTEK

CYNERGISTEK

I N V E S T O R P R E S E N T A T I O N

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SAFE HARBOR STATEMENTS

This presentation contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make (herein or otherwise) regarding the size of the potential market for our services; the number of potential customers/clients for our services; plans and strategies of CynergisTek and its subsidiaries for future growth and performance; market acceptance of our business model; our ability to integrate acquisitions and merged companies; and timelines relating to growth, milestones, and strategic focus. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking

  • statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-

looking statements include, among others, the risk factors discussed throughout Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2018; and throughout Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Quarterly Reports on Form 10-Q for the quarters ending March, June and September 31. Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. We expressly disclaim any obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

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OUR MISSION

TRUST

To be that trusted partner that enables our healthcare clients to build the cybersecurity and information assurance programs they need to protect and support patient safety and care operations by delivering exceptional service, expertise and knowledge.

EXPERIENCE EXPERTISE

Security-as-a-Service – Building Cybersecurity Resiliency

#1 CYBERSECURITY, PRIVACY AND COMPLAINCE

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COMPETITION

RELATED COMPANIES Revenue* Healthcare Focus CynergisTek $21M Healthcare Deloitte $46B** None KPMG $29B* None HCI Group $160M* Healthcare EY $36B** None Secure Digital Solutions N/A None IBM $80B* None Atos $13B* Healthcare^ Impact Advisors $84M* Healthcare

*Estimated 2018 Revenues in US Dollars **Estimated 2019 Revenues in US Dollars ^Atos does not exclusively focus in healthcare, active in 21 industries KLAS Research is a healthcare IT data and insights company providing the industry with accurate, honest, and impartial research on the software and services used by providers and payers worldwide

Black Book Market Research 2019 CynergisTek Named Top Performer Cybersecurity Advisors and Consultants KLAS

Cybersecurity 2018

Top Performer

KLAS

HIT Advisory Services 2018

Top Performer

KLAS

Technical Services 2018

Top Performer

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TRUSTED NATIONAL BUSINESS ACROSS DIVERSE INDUSTRIES**

  • 250+ customers nationwide
  • Covered Entities* - over 1,000 healthcare provider locations and

business associates

  • Partnered with 2 of the top 10 health systems in the US

*Covered entities are defined in the Health Insurance Portability and Accountability Act (HIPAA) rules as (1) health plans, (2) health care clearinghouses, and (3) health care providers who electronically transmit any health information in connection with transactions for which the department of Health and Human Services (HHS) has adopted standards. **Does not include addition of recent acquisition of Backbone Consultants

Health Care Information Technology Consumer Discretionary Financials Other

Current Client Mix by Industry

  • 65% in the Health Care Industry
  • 13% in the Information Technology

Industry

  • 10% in the Consumer Discretionary

Industry

  • 9% in the Financial Industry
  • 2% Other Industries
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INDUSTRY SNAPSHOT

Highly Targeted Industry

  • Every year Healthcare is in the top ten most likely to be attacked industries1
  • New research shows that 59% of all threat actors attacking the Healthcare industry come from the inside2
  • One in eight Americans have had their medical records exposed in a data breach5

Highest Cost of a Data Breach

  • New research shows that data breaches in Healthcare are 65% more costly than breaches in any other industry
  • Average cost of a Healthcare data breach is $6.45M or $429/record3

Skills Gap to Address the Problem Continues to Widen

  • 300,000 open security jobs in the United States and over 2 million world wide4
  • Particularly problematic for health systems outside major metropolitan areas

Healthcare Remains Largely Unsophisticated with Information Security

  • Only 26% of the healthcare market is using two factor authentication – less than half the rate of the rest of the industry
  • Healthcare workers average 71 passwords per employee and reuse passwords across 10 systems on average6
  • Networks are almost universally not segmented

Rise in Ransomware and Destructive Attacks has Kinetic Implications

  • In the first 10 months of 2019, 140 local governments, police stations and hospitals have been held hostage by ransomware

attacks

  • In September a California provider was forced to close as they could no longer access medical records8
  • In October three hospitals in Alabama had to turn away patients due to a ransomware incident9

Increasing Regulatory Pressure in Adjacent Markets

  • There are now 52 different breach disclosure laws in the United States and they are all different10
  • Fines are becoming real with GDPR leading the way: British Airways was fined 229M Euro; two hospitals in Europe fined over

400,000 Euro11

  • California Consumer Privacy Act comes into affect in 2020 and is modeled after GDPR
  • First cybersecurity claims have been paid under the False Claims Act
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BROAD SERVICE OFFERINGS

Cybersecurity Remediation Services Virtual CISO Privacy Program Remediation Services Virtual Privacy Officer Vendor Security Management

(Nov 2018)*

Medical Device Security Management (Dec 2018)* Patient Privacy Monitoring Service

Professional Services Managed Services

Cybersecurity Program Assessment Medical Device Security Risk Assessment Penetration Testing Risk Assessments Privacy Program Assessment IoT Device Security Assessment Incident Response Readiness Exercise

Consulting Services

Compliance Assist Partner Program (CAPP) Managed Security Services (Apr 2019)*

Security-as-a Service: Multi-year Recurring Revenue Contracts

*Launch dates of new managed services offerings

Over 20 Consulting Service Offerings

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IDENTIFY PROTECT DETECT RESPOND RECOVER

CynergisTek Services Strength

Emerging Opportunity With Destructive Incidents & Data Manipulation CynergisTek Services Strength

Left of Boom Right of Boom BOOM

Security Product Marketplace 1200+ vendors

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CTEK SELECT PARTNERS AND ALLIANCES

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$- $10 $20 $30 $40 $50 $60 $70 $80

2018 2019 2020 2021 2022 2023 2024

Millions Five Year Revenue Growth Strategy to $75M

Organic Adjacent Markets M&A

OUR MISSION: LONG-TERM GROWTH

$75M $24M $8M $43M $21M

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FINANCIAL SNAPSHOT

COMPANY TICKER NYSE: CTEK UNITS: USD Price (as of 11/6/19) $2.93 FD Shares Outstanding* 10.3M Market Cap $30.2M LTM Revenue* $22.6M Cash* $10.2M** Long- and Short-Term Debt* $1.7M

*Data as of Q3 2019 and includes recent sale of MPS division **Balance is net of tax liability and Backbone Acquisition

2017 2018 Q3 YTD 2018 Q3 YTD 2019

Managed Services Professional & Consulting Services

52% 48% 46% 38% $17.5M $21.3M $14.3M $15.6M

FY’17 to FY’18 Total Revenue: 22% Financial Highlights ($Millions) – Expanding New Revenue Lines to Focus on Growth 15% Managed Service Growth Q3’ 18 YTD to Q3’19 YTD

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12 InvestorRelations@cynergistek.com cynergistek.com

NYSE AMERICA: CTEK

THANK YOU!