Plurilock Security Inc said it has completed the previously announced acquisition of certain assets of CloudCodes Software Private Limited, an award-winning cloud access security broker (CASB) based in India, and, separately, has released its financial results for the three and six months ended June 30, 2022.
With a global customer base, CloudCodes has been a leading provider of unique cloud security SaaS enterprise solutions for protecting email and group collaboration platforms as well as other cybersecurity products including single-sign-on (SSO), multi-factor authentication (MFA), and cloud data loss prevention (DLP) solutions. For its year ended March 31, 2022, CloudCodes generated approximately C$572,000 in product revenue.
“We are delighted to have completed the acquisition of CloudCodes,” said Ian L. Paterson, CEO of Plurilock in a statement.
“Given CloudCodes’ award-winning CASB solution and international customer base, this acquisition bodes well for our growth strategy as we intend to secure new technology assets to offer more advanced zero trust solutions to our customers and expand our market presence within the global cybersecurity industry. We look forward to welcoming CloudCodes’ staff and integrating their innovative products into our robust technology portfolio," Paterson added.
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"This transaction represents a major milestone for CloudCodes as we will be part of a fast-growing organization that will supply our unique CASB products to the North American market,” said Debasish Pramanik, co-founder of CloudCodes. “We are excited about the new opportunities that await us, and we look forward to working with the Plurilock family of companies in developing the next generation of cybersecurity solutions.”
The acquisition enables Plurilock to expand its product line, as the company intends to offer CloudCodes’ CASB solution as an early-access product named Plurilock CLOUD, providing its customers with a cost-effective cloud security solution. The company expects CLOUD to initially integrate with, and to later absorb, its existing Plurilock ADAPT login authentication product, providing a path to low-friction, high-security SSO and CASB solutions with system-wide, real-time behavioral biometric identity confirmation.
In addition, the acquisition is expected to be beneficial for CloudCodes’ team as they will be able to leverage Plurilock’s financial resources, deep security, information technology, AI capabilities and expertise as well as its top-tier sales team to optimize their operations.
Furthermore, the company’s Indian subsidiary, Plurilock Security Private Limited, which is based in Mumbai, India, has obtained a technical product team and a new office in Pune, India.
Overall, the acquisition is expected to not only drive Plurilock’s sales growth but also, allow the company to enter the CASB market and gain a larger footprint in the global zero trust cybersecurity industry.
CloudCodes is an internationally based Cloud Security SaaS platform company, offering a product that protects email and group collaboration platforms like Microsoft 365 and Google Workspace, while providing SSO, MFA and DLP functionality.
In connection with the acquisition, the company paid CloudCodes aggregate consideration of approximately US$1,451,148 payable as follows: (i) US$700,000 in cash payable on closing; (ii) a promissory note of US$300,000 maturing on November 15, 2022; and (iii) 992,755 common shares of Plurilock at C$0.59 per share. The consideration shares were placed in escrow for 18 months to satisfy any indemnification obligations to the company.
The acquisition is subject to receipt of the approval of the Toronto Venture Exchange (TSXV).
Financial results for the period ended June 30, 2022
In a separate statement, Plurilock Security Inc has also released its financial results for the three and six months ended June 30, 2022.
"The second quarter of fiscal 2022 saw Plurilock reaching new milestones which includes releasing new advanced product features, adding a seasoned director, receiving international recognition for its technology and sales efforts, and, most notably, securing its first cross-sale order for its high-margin proprietary software with a California-based pension fund," said Plurilock chief executive officer Paterson in the results statement.
"Furthermore, we continued to expand our active sales pipeline by securing new purchase orders, which led us to generate a total revenue of $9.1-million for the three-month period," he added.
Paterson continued: "Our first cross-sale for our Defend product during this quarter highlights our ongoing efforts to capitalize on our extensive distribution channels. As we scale both organically and inorganically, we intend to continue completing more high-margin software sales, which would result in enhanced gross margins for our business."
Second quarter fiscal 2022 financial highlights. All dollar figures are stated in Canadian dollars:
- Total revenue for the three and six months ended June 30, 2022, was $9,106,547 and $16,059,599, respectively, as compared with $8,604,310 and $8,680,071 for the same periods in the prior fiscal year ended June 30, 2021. Revenue for the three months ended June 30, 2022, and June 30, 2021, included revenue from both the technology division and the solutions division. Revenue for the six months ended June 30, 2022, is significantly higher than the six months ended June 30, 2021, in the prior year due to the timing of the acquisitions of Aurora Systems Consulting Inc. (ASC) and Integra Networks Corp. (INC).
- Hardware and systems sales revenue for the three and six months ended June 30, 2022, totalled $8,359,715 and $14,855,611, respectively, compared with $7,581,208 and $7,581,208 in the prior year for the same periods. Software, licence and maintenance sales revenue for the three and six months ended June 30, 2022, was $610,523 and $1,039,979, respectively, compared with $738,055 and $805,811, respectively, in the prior year for the same periods. Professional services revenue was $136,309 and $164,009, respectively, for the three and six months ended June 30, 2022, compared with $285,047 and $293,052, respectively, in the prior year for the same periods.
- Hardware and systems sales revenues for the three and six months ended June 30, 2022, accounted for 91.8% and 92.5%, respectively, of total revenues compared with 88.1% and 87.3% for the three and six months ended June 30, 2021.
- Software, licence and maintenance sales revenues for the three and six months ended June 30, 2022, accounted for 6.7% and 6.5%, respectively, compared with 8.6% and 9.3% for the three and six months ended June 30, 2021.
- Professional services revenue for the three and six months ended June 30, 2022, accounted for 1.5% and 1.0%, respectively, of total revenues, compared with 3.3% and 3.4% for the three and six months ended June 30, 2021.
- Gross margin for the three and six months ended June 30, 2022, was 10% and 8.6%, respectively, compared with 7.3% and 8% in the prior year for the same periods.
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the three and six months ended June 30, 2022, was $(1,791,408) and $(3,677,423), respectively, compared with $(939,232) and $(1,969,017) in the prior year for the same periods.
- Cash and cash equivalents and restricted cash on June 30, 2022, was $3,194,872 compared with $9,468,104 on Dec. 31, 2021.
- During the three and six months ended June 30, 2022, the company used $1,628,613 and $6,130,212, respectively, of cash from operating activities compared with $418,094 and $1,576,549 in the prior year for the same periods.
Plurilock provides identity-centric cybersecurity for today's workforces. The company offers world-class cybersecurity solutions paired with artificial intelligence-driven, cloud-friendly security technologies that deliver persistent identity assurance with unmatched ease of use.
The Plurilock family of companies enables organizations to operate safely and securely while reducing cybersecurity friction.
Contact the author at jon.hopkins@proactiveinvestors.com