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NYSE AMERICAN: CTEK
CYNERGISTEKI 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 STATEMENTSThis 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, 2017; 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 and June 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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INVESTMENT
Pioneer and leader in healthcare cybersecurity
Innovative service offerings filling the gap in the industry
Loyal national customer base
with large upsell opportunity
Capitalizing on strong
cybersecurity market growth
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WHO WE ARE#1 CYBERSECURITY AND INFORMATION ASSURANCE COMPANY IN HEALTHCARE
2018 Most Comprehensive Cybersecurity ServicesTOP KLAS PERFORMER 3RD STRAIGHT YEAR
STRONG RELATIONSHIPS &
TRACK RECORD
THOUGHTLEADERS
WELL-KNOWN INDUSTRY
PLAYER
TRUSTED ADVISOR
MARKETDRIVEN
TAILORED SOLUTIONS
CynergisTek has been recognized by KLAS in the 2016 and 2018 Cybersecurity report as a top performing firm in healthcare cybersecurity.
CynergisTek won the 2017 Best in KLAS Award for Cyber Security Advisory Services
KLAS
Cybersecurity2018
Top Performer
KLAS
HIT AdvisoryServices
2018
Top Performer
KLAS
TechnicalServices
2018
Top Performer
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WHY CYNERGISTEK?RELATED COMPANIES HEALTHCARE
SPECIALIZEDKLAS OVERALL
SCORE
CYBERSECURITY SERVICES
CLASSIFICATION
CynergisTek ✓ 92.6 Comprehensive
Deloitte X 79.8 Comprehensive
FireEye X 89.5 Comprehensive
Fortified Health Security ✓ 85.7 Comprehensive
Optiv X 87.8 Comprehensive
Coalfire X 85.0 Broad
PWC X 89.2 Broad
EY X 91.1 Broad
Clearwater Compliance ✓ 95.0 Advisory Focused
*All information from KLAS Cybersecurity Services 2018 Report June 2018
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.
CYNERGISTEK’S MISSION
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INDUSTRY SNAPSHOT
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ATTACK SURFACES CONTINUE TO GROWGLOBAL HEALTHCARE CYBERSECURITY SPENDING EXPECTED TO EXCEED ~$65B OVER NEXT 5 YEARS
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NAVIGATE & PREVENT BREACHESRansomware
Internal and External Threats
Privacy Threats
Phishing AttemptsSocial Engineering
IoT Threats
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THE SERVICES WE PROVIDECOMPLIANCE ASSIST PARTNER PROGRAM (CAPP)
CAPP
OPTIONAL SERVICESCynergisTek also offers optional services that can be customized to meet a compliance program’s unique needs.
ANNUAL ASSESSMENTAn annual extensive review to identify security gaps through the combination of the following:• Information Security Program
Assessment• Technical Security Assessment• Risk Analysis• Architecture Assessment• Wireless LAN Security Assessment• MU EHR Security Controls
Assessment
INTERNAL & EXTERNAL TESTINGCynergisTek will conduct regular internal and external testing to uncover potential threats.• External: Quarterly• Internal: Bi-Annually
CAPP COMMUNITYCynergisTek Advisory Service addresses questions, concerns, and advice covering technology, program development and maintenance, and regulatory compliance matters.
PERIODIC EXECUTIVE REVIEWSCynergisTek’s executive team leads workshops that are designed to:• Review remediation progress• Provide guidance on regulatory
changes and security threats• Promote knowledge transference
81% OF REVENUE COMES FROM MANAGED SERVICES WHICH INCLUDE CAPP PROGRAMS
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MAKE THE MOST OF YOUR PRIVACY MONITORING PROGRAMTHE SERVICES WE PROVIDE
PATIENT PRIVACY MONITORING AS A SERVICE (PPMS)CynergisTek collaborates with your organization to support functionality of your patient privacy monitoring tool.
PPMS
DESCRIPTION PPMS SELECT
PPMS ELITE
Audit Program Development ü ü
Current & Future State Analysis ü ü
Optimization Plan & End User Training ü ü
Validation and Testing of Audit Tool ü ü
Proactive Audit Reporting Analysis ü ü
Incident Documentation and Escalation of Findings ü ü
Audit Tool Optimization ü ü
Standard Program Reports ü ü
Reactive Audit Reports, Advanced Analysis, Advanced Program Reports and Advisory Services ü
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THE SERVICES WE PROVIDEVENDOR SECURITY MANAGEMENTCollaborates with your organization to support functionality of your patient privacy monitoring tool.
VSM ASSESSMENT APPROACH• Initiation: Analyst gets notified of ticket and initiates assessment in RiskSonar• Monitoring: Questionnaire/documentation request sent, and assessment progress
updated/monitored.• Analysis: Analysis of vendor’s input conducted, and gaps identified upon
assessment submittal • Reporting: Single Assessment Vendor Report created, client notified it is ready for
review within RiskSonar• Next Steps: Vendors notified of remediation requirements/re-assessments• High Risk Vendors: Client is notified of high-risk vendors – client uses Risk
Acceptance or Risk Exception process• Risk Exception: If client approves risk exception, vendor is tagged and tracked for
annual renewal
VSM DELIVERABLES• Single assessment vendor with report outlining security gaps and risk rating• Status Updates on vendor participation and escalation of issues• Quarterly Program Report covering high-level of the vendor program including
recommendations
TAKE THE LEGWORK OUT OF MONITORING
VSM
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THE SERVICES WE PROVIDESECURE AND PROTECT YOUR BIOMEDICAL DEVICES
BIOMEDICAL DEVICE SECURITY TECHNICAL ASSESSMENTA comprehensive inventory of networked biomedical devices and the associated vulnerabilities.
BIOMEDICAL DEVICE SECURITY PROGRAM ASSESSMENTAn evaluation of security controls and an identification of gaps or vulnerabilities in the management practices for biomedical device security.
BIOMEDICAL DEVICE SECURITY MANAGEMENT STRATEGYA strategy articulating different risk categories and a remediation roadmap to address the different categories and the unique issues/vulnerabilities.
BIOMEDICAL DEVICE SECURITY PROGRAM MANAGEMENTOur service is built to address the security aspects, as it relates to each component of the biomedical device lifecycle including policy development, pre-acquisition procedures, implementation and security control setup, identifying and reporting vulnerabilities, and coordinating remediation in conjunction with the device maintenance schedule.
Biomedical
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THE SERVICES WE PROVIDERESOURCE & TALENT TO BRIDGE THE RESOURCE GAP
CYBERSECURITY REMEDIATION• Next steps after a security assessment• On-demand seasoned security experts prioritize, implement and execute unique
remediation plan• Short- and long-term remediation plan
CYBERSECURITY PROGRAM DEVELOPMENT• Utilize best practice standards and guidelines to review, build, and implement
components of your security program• Improve the effectiveness of a complex strategy• Well-versed in many industry frameworks,
ensuring the alignment of policy charters, program playbooks, and process and procedure documents are a solid foundation
STRATEGIC SECURITY STAFFINGAlleviate the efforts to source and employ skilled talent for projects that are high priority.• Virtual CISO and Privacy Officers• Sourcing difficult roles to cost-effective solution • Identified to align with your needs for short-term,
project specific, long-term, or temp-to-hire cybersecurity and privacy engagements • Advisory services from resources recognized as subject matter experts in the
healthcare industry
Professional Services
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THE SERVICES WE PROVIDE
MPS
FINANCIAL MANAGEMENT SERVICES• Invoice support: validate invoices
against client contracts to ensure validity of charges
• Vendor contracts: we provide a comprehensive review of third- party contracts and provide opportunities for improvement
ONE-STOP SOLUTIONFor all service, supplies, and acquisition requests• Strategic approach to identify cost
savings opportunities• Healthcare exclusive and
manufacturer agnostic• Assess risks associated with print
devices and create remediation plan
STANDARD ENGAGEMENT• Service & support• Asset management• Installation & removal services• Training• Utilization review and reporting• Device security assessment
OPTIMIZATION & WORKFLOW SERVICES• Toner: direct delivery to the device• Helpdesk services: support and service
for your fleet• Control print: processes and
technology to impact print utilization• Device integration: test equipment
against application and technology• Print shop management: staff to
support and oversee timely production of print jobs
PERFORMANCE-BASED REPORTING SERVICES• User-level utilization reporting: further
reduce unnecessary print volume
Recurring Revenue model with 3-5-year contracts
MANAGED PRINT SERVICE PROGRAM WITH SECURITY AND COMPLIANCE IN MIND
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Increase Sales Reach, Accelerate Land and Expand
Non-Organic Growth
Expand into New Markets
MULTIPLE DRIVERS FOR LONG-TERM GROWTH
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TRUSTED BY HEALTHCARE NATIONWIDECovered Entities* - over 1,000 healthcare provider locations and business associates
*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.
Partnered with 4 of the top 10 largest health systems in the US
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CTEK ALLIANCE
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FINANCIAL SNAPSHOTCOMPANY TICKER NYSE: CTEK UNITS: USD
Price (as of 11/06/18) $4.15
FD Shares Outstanding** 9.8M
Market Cap $41M
LTM Revenue $71.2M
Cash** $6.4
Long- and Short-Term Debt** $22.8M
Total Enterprise Value $63.4M
** Data as of Q3 ending September 30th, 2018
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FINANCIAL HIGHLIGHTSREVENUE & GROSS MARGIN
2015 2016 2017 9M 2017 9M 2018
Managed Services Professional & Consulting Services Equipment & Software
17% 20% 29% 28% 27%
$61 $60
$72
$53 $53
Financial Highlights ($Millions) – Expanding New Revenue Lines to Increase Gross Margins
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FINANCIAL HIGHLIGHTSADJUSTED EBITDA
$1.8
$3.4
$7.8
$5.3 $4.9
$1.7
$3.3
$6.1
$4.0 $3.6
2015 2016 2017 9M 2017 9M 2018
Adjusted EBITDA Adjusted Earnings
Financial Highlights ($Millions) – Profitable While Investing in Growth
1 Adjusted EBITDA: adjusting EBITDA for stock-based compensation and non-recurring charges related to our recent debt refinancing and the departure of a senior executive.2 Adjusted Earnings: adjusting net income for estimated cash tax adjustment, adjustment in contingent consideration from acquisition, amortization and impairment of intangibles, non-recurring charges related to our recent debt refinancing and the departure of a senior executive, stock-based compensation and depreciation.
