CYN Investor Presentation - November 2017 v1312018...Investor Presentation November 2017 NYSE AMERICAN: CTEK 2 Safe Harbor Statements This presentation contains, and our officers and

InvestorPresentationNovember2017NYSEAMERICAN:CTEK

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SafeHarborStatementsThispresentationcontains,andourofficersandrepresentativesmayfromtimetotimemake,“forward-lookingstatements”withinthemeaningofthesafeharborprovisionsoftheU.S.PrivateSecuritiesLitigationReformActof1995.Forward-lookingstatementscanbeidentifiedbywordssuchas:“anticipate,”“intend,”“plan,”“goal,”“seek,”“believe,”“project,”“estimate,”“expect,”“strategy,”“future,”“likely,”“may,”“should,”“will”andsimilarreferencestofutureperiods.Examplesofforward-lookingstatementsinclude,amongothers,statementswemake(hereinorotherwise)regardingthesizeofthepotentialmarketforourservices;thenumberofpotentialcustomers/clientsforourservices;plansandstrategiesofCynergisTekanditssubsidiariesforfuturegrowthandperformance;marketacceptanceofourbusinessmodel;ourabilitytointegrateacquisitionsandmergedcompanies;andtimelinesrelatingtogrowth,milestones,andstrategicfocus.Forward-lookingstatementsareneitherhistoricalfactsnorassurancesoffutureperformance.Instead,theyarebasedonlyonmanagement’scurrentbeliefs,expectationsandassumptionsregardingthefutureofourbusiness,futureplansandstrategies,projections,anticipatedeventsandtrends,theeconomyandotherfutureconditions.Becauseforward-lookingstatementsrelatetothefuture,theyaresubjecttoinherentuncertainties,risksandchangesincircumstancesthataredifficulttopredictandmanyofwhichareoutsideofourcontrol.Ouractualresultsandfinancialconditionmaydiffermateriallyfromthoseindicatedintheforward-lookingstatements.Therefore,youshouldnotrelyonanyoftheseforward-lookingstatements. Importantfactorsthatcouldcauseouractualresultsandfinancialconditiontodiffermateriallyfromthoseindicatedintheforward-lookingstatementsinclude,amongothers,theriskfactorsdiscussedthroughoutPartII,Item7.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations,andinPartI,Item1A.RiskFactorsofourAnnualReportonForm10-KfortheyearendedDecember31,2016;andthroughoutPartI,Item2.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperationsofourQuarterlyReportsonForm10-QforthequartersendingMarch31,June30andSeptember30,2017,Anyforward-lookingstatementmadebyusinthispresentationisbasedonlyoninformationcurrentlyavailabletousandspeaksonlyasofthedateonwhichitismade.Weexpresslydisclaimanyobligationtopubliclyupdateanyforward-lookingstatement,whetherwrittenororal,thatmaybemadefromtimetotime,whetherasaresultofnewinformation,futuredevelopments,orotherwise.

Introduction

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CynergisTekCybersecurity&InformationManagementforHealthcare

NationwidePresenceConsultantsaverage15yearsofexperience

intheirdomainexpertise

Revenue$60Min2016

CoveredEntities1,000healthcare

providerlocationsandbusinessassociates

Contracts3-5yearservice

contracts

AuxilioacquiresCynergisTekin2017

MarketOpportunity

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PrintHasIncreased11%SignificantrisktoPHIandcostsavingsopportunityforhospital.

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CostofaBreachBreachescostthehealthcareindustry$6.2B/yr1,90%ofall

hospitalshadabreachinthepasttwoyears.2

HealthcareITDynamics3.5MillionCoveredEntitiesand35MillionBusinessAssociates

ITSpendonSecurity3Healthcare4-6%Financial10-12%Government7-9%

InternetofThings(IoT)Estimated30billiondevicesby

2020.Biomedicaldevicerisk.

IncreasedRegulationOCRenforcementofHIPAAamongCoveredEntitiesandBusiness

Associates.

LackofResourcesShortageofestimated1.5M

cybersecurityresources.Leadingtomanagedservicesandprogram

delivery.

Referencesonslide25

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$12B+DomesticMarketOpportunity

EHRproduces60%ofprintvolume1-Paperrepresents30%ofallbreaches

Healthcare$12BMarket

MarketCapcombinedHealthcareCybersecurityandMDSbusiness

40%of2016breacheswereunauthorized

disclosure2

64%increaseinbreachesrelatedtohackingin2016vs.

20153

41%ofdatabreachesin2017weretiedtoinsidererrororwrongdoing,whichcompromisednearly1.2millionpatientrecords.

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IntheNews

EnterpriseAttacksareGrowingandImpactingConsumers

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Ransomware64%ofvictimsintheU.S.payransom

Threats1in131emailsaremalicious

WeaponizedIoTdevicesTakedowncriticalcloudservices

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DisruptiveAttacksShutting downhospitals

IdentityTheftEverytwosecondssomeoneisavictimofidentitytheft

6Global689millionpeoplegloballywerevictimsofcybercrimein2016

Cybersecuritylaborcrunchtohit3.5millionunfilledjobsby2021

Solutions

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TheServicesWeProvide

ConsultingServices

• RiskAssessment• TechnicalSecurityAssessment

• PrintSecurityAssessment• ArchitectureAssessment• SocialEngineeringandPhishing

• PrivacyProgramAssessment

• PolicyandProcedureDevelopment

• ComplianceProgramEffectivenessAssessment

• HIPAAResearchProgramAssessment

• MeaningfulUseAudits

ManagedServices

• ComplianceAssistPartnerProgram

• VendorSecurityManagement

• PrivacyMonitoring• VulnerabilityManagement

• ManagedPrintService• IncidentResponseManagement

ProfessionalServices

• Remediation• ProgramDevelopment• StrategicStaffing• VirtualCISO

Security/Privacy/Compliance/Cost

ThoughtLeader

UniqueleadgenerationeffortsofeducationaleventsandPRtogainshareofvoiceinthemarket.

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Ourdepthandbreadthintheindustrymakeusatrustedpartnertohealthcareleadership,providingtheservicestheyneed.

AccountManagersembeddedintoclienttoupsellservicesacrosstheorganization.

Buildinglong-termpartnershipsandbecomingthetrustedadvisorwithourclients.

Go-to-MarketStrategy

MarketApproach

Upsell

Longevity

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CompetitiveAdvantageUnmatchedHealthcareCybersecurityExperts

CynergisTekwonthe2017BestinKLASAwardforCyberSecurityAdvisory

Services

EffectiveLeadership

CustomerDriven

StrongRelationshipsandTrackRecord

WellKnownIndustryPlayer

ActionableInsight

TailoredSolutions

FinancialPerformance

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SnapshotNYSE AMERICAN 11/28/2017

Shareprice $4.06

Marketcap $41M

FDSharesOutstanding 10M

SharesOwnedbyMgmt.andBoard

25%

IncomeStatement 2016 YTDQ32017

Revenue1 $60M $53M

AdjustedEBITDA1 $3.4M $5.3M

AdjustedEarnings $3.3M $3.9M

Cash $6.1M $2.7M2

Debt $1.3M $21.4M1 Pleaseseeourannualandquarterlyfinancialresultsforcompletedetails.2Companymaintainsa$5Mreceivablebasedlineofcreditwith$0balanceoutstanding.

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RevenueFinancialHighlights

$44

$61 $60

$53

19% 17%

20%

29%

$44 Q3YTD

2014 2015 2016 YTD3Q17

Revenue GrossMargin YTD

$INM

ILLIONS

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AdjustedEBITDAFinancialHighlights

1 AdjustedEarnings:adjustingforestimatedcashtaxadjustment,interestexpense,amortizationofintangibles,stockbasedcompensationanddepreciation

$2.1$1.8

$3.4

$5.3

$1.8 $1.7

$3.3

$3.9

2014 2015 2016 YTD3Q17

AdjustedEBITDA AdjustedEarnings

$INM

ILLIONS

AboutUs

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SnapshotofClients

Samplerepresentationmorethan1,000healthcareproviderlocationsandbusinessassociates.

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Create$150MRecurringRevenueHealthcareIT

ServicesBusiness5yeargoalwith>15%adjustedEBITDA.

EmployeeInvestmentContinuetostrengthenandbuildonthe

teamsdepthofknowledgeincybersecurity.

IncreaseShareholderValue

CybersecurityFocusContinuegrowingserviceofferingsto

meetmarketdemand.Bethe#1trustedsourceinthemarket.

GrowthInitiatives

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ManagementTeam

MacMcMillanChiefExecutiveOfficer

PaulAnthonyChiefFinancialOfficer

Machasnearly40yearsofbothgovernmentandprivatesectorexperience.HeservedasDirectorofSecurityfortwoDefenseAgenciesandasanIntelligenceOfficerintheU.S.Marines. Hehasworkedinthehealthcareindustrysincehisretirementfromthefederalgovernmentandcontributesregularlytoindustrythoughtleadership.

PaulisaCertifiedPublicAccountantandanexpertinfinancialmanagement,investorrelations,tax,treasuryandriskmanagementwithover20yearsofprofessionalservicesexperiencewithworldwideenterprises,publiclytradedcompaniesandstart-ups.HiscareerhasincludedtimewithKPMG,PeatMarwickLLPandIBM.

AngelaRiveraEVPOperations

DavidFinnEVPStrategy

AngelaRiveraisapassionateexecutivewith24yearsofyearsexperienceinthehealthcareindustrywithsignificantfocusservingthehealthcareproviderindustry. Ms.Riveraservedthelast17yearsinvariousrolesatComputerTaskGroup. InhermostrecentroleasVicePresident,HealthSolutionsforComputerTaskGroup,sheheldexecutiveresponsibilityforsolutionsandgrowthstrategy,qualityservicedelivery,andmanagementoftheprofessionalconsultingbasethatdeliveredinformationtechnologyservicesandsolutionstoCTG’shealthcareprovider,payer,andlifesciencesclientsinNorthAmerica.

David,comesfromSymantecandhasbeeninvolvedinleadingtheplanning,management,andcontrolofenterprise-wide,mission-criticalinformationtechnologyandbusinessprocessesformorethan30years.Hisuniqueexperienceinriskmanagementandcontrolobjectivesoftechnology(includingaudit,security,andprivacy)allowshimadistinctiveperspectiveinthedesignandimplementationofbusinessapplicationsandtheprocessesthatthetechnologymustsupport.

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BoardofDirectors

J.D.AboucharChairmanoftheBoard

DrexDeFordDirector

PrincipalatDrexioDigitalHealth,formerHealthcare

CIO

MacMcMillanDirector

CEOOFCynergisTek

JudyKrandelDirector

SnapInteractiveCFO

MarkRobersonChairmanoftheAudit

CommitteeCOOofChanticleerHolding,

Inc.

TheresaMeadowsDirectorSVP/CIO

CooksChildren’sHealthCareSystem

Dr.MichaelMathews

DirectorCOOofCynergisTek

TransitionofBoardin2016and2017

bringinginhealthcareITandcapitalmarkets

expertise

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InvestmentThesisfortheNewCTEK

FY17:Transformation

FY18:Execution

FY19&FY20:Opportunity

Growanddeployprofessionalandprivacyservicesofferingsthathelphealthcareorganizationsremediate,developandimplementprogramsandtechnologytofulfillshort

andlong-termsecurityandprivacyroles

Wellpositionedforsustainablemidtohighorganicrevenuegrowth

Fundamentaloperationalimprovementsexpectedtoresultinindustry-leadingoperatingmargin

Experiencedmanagementteamwithprovenoperationalsuccessanddeephealthcarecybersecurityknowledge

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Questions

[email protected]

Questions?

?

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References

Slide6:1 BeckersHealthcareITandCIOReview,20172 HIMSSAnalyticsHealthcareITSecurityandRiskManagementStudy,20163 SANSITSecuritySpendingReport,20164 BIIntelligentEstimates– GlobalData,2015

Slide7:1 Nuance2 BitglassBreachReport3 ModernHealthcareDecember2016