Plurilock Security Inc. (TSX-V:PLUR) CEO Ian L Patterson told investors that 2022 is likely to be a transformational year for the company as it scales its technology offerings to a diverse and growing base of enterprise customers.
In a corporate update and strategy outlook for 2022, Patterson said: "As the global cybersecurity market continues to shift toward zero trust architecture, we feel our suite of continuous authentication, behavioral-biometric products will continue to gain traction in the face of the growing cyber threat.
“We have invested in this segment of our business by acquiring distribution through our subsidiary, Aurora Systems Consulting Inc., and training our sales staff to accelerate our pipeline growth to secure the direction of Plurilock,” he added.
READ: Plurilock Security files application with US patent office for its insider threat protection technology
The company said it plans to achieve its primary corporate objectives by executing the following growth initiatives:
Focus on sales of high-margin, proprietary products:
With the number of cyberattacks continuing to increase year over year, Plurilock said cybersecurity has become essential for private and public entities, with 50% of large enterprises spending $1 million or more each year on security.
In recent weeks, it noted that the White House and the US Office of Management and Budget have announced that federal agencies will be required to adopt zero trust technology and policies by fiscal year 2024 and a recent survey of security and risk professionals stated that 80% of their organizations intend to implement zero trust in 2022.
The company said it plans to act on this growing demand for innovative cybersecurity technology offerings to drive revenue growth and margin expansion. It is in active discussions with organizations across North America for both ADAPT and DEFEND, from its existing sales strategy as well as the distribution network through its Aurora subsidiary.
Growing distribution channels:
As part of its plan to increase distribution channels to attract software sales, Plurilock said through Aurora it has multiple US government contracting vehicles, providing access to many federal civilian and defense agencies, and over 170 state agencies in California.
It plans to continue leveraging existing distribution streams to cross-sell its Technology Division's proprietary AI-driven, identity-centric continuous authentication solutions, which generated gross margins of 84.1% for the nine months ended September 30, 2021.
Overview of technology division's products:
- Plurilock ADAPT - Invisible Multi-Factor Authentication (MFA) Solution
- Plurilock DEFEND - Behavioral-Biometric, Continuous Authentication Solution
Additionally, Plurilock said it has continued to demonstrate strong sales growth in its Solutions Division over the last several weeks, highlighted by US$1.16 million in sales captured from all announced contracts and orders since January 2022.
Product innovation - zero trust technology:
To combat the growing cyber threat, Plurilock said organizations have made a shift toward implementing zero-trust solutions and demand for these products has increased significantly, highlighted by the growing global zero trust security market, which is expected to generate $66.74 billion in revenue by 2027. It said it intends to capitalize on the opportunities within this marketplace by innovating new zero trust technology.
It also intends to increase its competitive moat through patent filings and developing new trade secrets to advance Plurilock's cutting-edge behavioral biometrics technology.
Product Development:
Plurilock said its technology is backed by research from a world-class data science team and leading pioneers in the behavioral biometrics space. It looks to strengthen its product portfolio with a focus on zero trust. The company currently holds six provisional and issued patents through the US Patent and Trademark Office, including a recently submitted non-provisional US patent application for new technology enhancements in combatting insider threats.
Accretive M&A opportunities:
Following its acquisition of Aurora Systems Consulting Inc in April 2021, Plurilock said it has established a pipeline of M&A targets including the October 2021 definitive asset purchase agreements to acquire certain assets of CloudCodes Software Private Limited, a leading Indian-based cloud access security broker with a global customer base.
It said it continues to evaluate new M&A opportunities to grow its customer base, expand its AI and machine learning technology capabilities and leverage new revenue and cost synergies. Overall, it plans to acquire accretive and profitable cybersecurity companies with top-tier customers and products in order to rapidly extend its distribution channels and offer enhanced technology offerings.
The company said it will explore alternate financing mechanisms, including a combination of debt, earn-outs, and rewards-based compensation to fulfill acquisition mandates that could arise in the future, while focusing on minimizing shareholder dilution.
Well-capitalized balance sheet
With $7.05 million in cash as of September 30, 2021, Plurilock said it is well-positioned to execute on all growth initiatives to expand its footprint in the global cybersecurity industry.
"For the duration of 2022, we plan to focus on advancing three primary objectives: sales of Plurilock's high-margin zero trust identity platform, developing new technology that expands our competitive moat, and strategically looking at accretive acquisition opportunities we feel will help us scale,” Patterson concluded.
“Given our comprehensive growth strategy, we intend to deliver ambitious results with the goal of improving our financial performance, as well as continuing to solidify our role as a cybersecurity technology leader."
Plurilock provides identity-centric cybersecurity for today's workforce. The Plurilock family of companies enables organizations to operate safely and securely while reducing cybersecurity friction.
Contact the author at stephen.gunnion@proactiveinvestors.com