EXCITE TECHNOLOGY SERVICES LTD — AGM Information 2017

Nov 21, 2017

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AGM MANAGEMENT PRESENTATION 22 NOVEMBER 2017

DISCLAIMER

This presentation is the property of Covata Limited (Covata). It is a presentation of non-specific background information about the current activities of Covata. It is information given in summary form and does not purport to be complete.

All persons should seek appropriate professional investment advice in reviewing or considering this presentation and all other information with respect to Covata, its business, financial performance and operations. Neither the provision of this presentation nor the information contained therein, or any associated communication to any person should be taken as constituting financial advice regarding the purchase or dealing of shares in Covata. This presentation does not purport to provide all information that might reasonably be required to complete a detailed assessment of Covata.

Individuals should conduct their own investigation of investment and financial parameters relevant to their personal requirements for investment purposes. The presentation may contain forward looking statements regarding the intentions of the Company, and these will be affected by many other factors beyond the control of the Company.

Forward-looking statements include, but are not limited to, statements concerning Covata’s planned strategies and programs and other statements that are not historical facts. Although Covata believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements The presentation must be considered in the light of these uncertainties and investments in Covata should be considered as speculative in nature.

This presentation does not constitute an offer, invitation or recommendation to subscribe for, or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. This presentation does not constitute an offer or invitation in any jurisdiction anywhere, or to any person to whom, such an offer would be unlawful.

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

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SECTION A THE MARKET AND OPPORTUNITY

THE REVENUE OPPORTUNITY IS LARGE AND GROWING

“Data breaches repeatedly prove the criticality of data security, and data security products need to continue to evolve”

Gartner Market Insight: The Future of Data Security (12 October 2017)

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113
90
84
75
71
2014 2015 2016 2017 2020-F
Cyber Security Market Growth ($USbn) [1]
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8.0
3.7
2.8
2.1
2014 2015 2016-F 2021-F
Data Security Growth ($USbn) [2]
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• 1 Gartner Research Reports

• 2 Markets and Markets: Cyber Security Market - Global Forecast to 2021 (2016)

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

DATA BREACHES AND REGULATION DRIVE PRODUCT DEMAND

Reported breaches[1]

Stricter compliance and regulatory requirements

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4,326 4,281
4,149
3,275
2,612
1,106 1,095
822
2013 2014 2015 2016
Number of Incidents Number of Records Exposed (m)
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General Data Personal Information Sarbanes-Oxley Act
Protection Protection Commission (SOX) (US)
Regulation (EU) (Japan)
PCI Security Data Privacy Legislation Health Insurance Portability
Standards (Global) (Australia) and Accountability Act (US)
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GLOBAL COST TO BUSINESS: BY 2021[2] US$6 TRILLION

1 Risk Based Security: Data Breach QuickView Report (January 2017)

2 Cybersecurity Ventures: The Official 2017 Cybercrime Report (October 2017)

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

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SECTION B ABOUT COVATA

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COVATA IS AT THE CENTRE OF THE DATA SECURITY MARKET

We are an Australian software company that delivers innovative data-centric security solutions for sensitive and regulated information, however it’s shared and wherever it travels

CVT SNAPSHOT[1] Shares on issue 572.15M Share price 5.1c Market cap A$30.9M Cash at bank (zero debt) A$3.4M (Excludes R&D tax rebate)

• 1As at 21 November 2017

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

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OUR PRODUCTS

• Covata Data Discovery installs quickly and is pre-configured to find credit card numbers, patient information, and personally identifiable information (PII) used in several countries

• SafeShare is a secure file sharing and collaboration solution

• CipherPoint Eclipse is a suite of integrated data security and privacy compliance solutions for Microsoft SharePoint, file servers, and Office 365 (SharePoint Online and OneDrive for Business)

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

COVATA UNDERSTANDS THE KEY MARKET TRENDS

INTEGRATION

END USERS AND EASE OF USE

EMERGING TECHNOLOGIES

• A data security platform to combine encryption and access control with enterprise digital rights management, data loss prevention, user and entity behaviour analytics, privileged access management, data masking

• Integration of the DSP with industry leading data repositories

• Single pane of glass or unified management console for security management

• Seamless integration with cloud productivity tools e.g. Microsoft

• Multiple deployment options including cloud (Azure or AWS) or on-premises

• AI and Machine Learning for automatic data classification

• Advanced Security Analytics

• Extension of key management by using Blockchain technologies for application security in IoT and big data

Source: Gartner Market Insight: The Future of Data Security (12 October 2017)

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

AND THE FUTURE IS BUILDING OUR DSP

DISCOVER PROTECT CONTROL UNIFIED MANAGEMENT CONSOLE DATA AI & DATA ENCRYPTION, ACCESS CONTROL COMPLIANCE & ADVANCED DISCOVERY CLASSIFICATION DRM, DLP & COLLABORATION AUDIT ANALYTICS DATA SECURITY PLATFORM API TRANSLATION CURRENT ROADMAP

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

WE ARE FOLLOWING A PROVEN BUSINESS MODEL

RECURRING LICENCE MODEL

DIRECT AND VIA STRONG PARTNERS

TARGET CUSTOMERS

• Transition from perpetual plus maintenance into an Enterprise subscription and/or SaaS based pricing model

• Options of cloud, hybrid, and on-premises deployments

• Feature upsell

• Support options

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Initial target: Enterprise

• Higher touch, Beta version of products acceptable

• Total Contract Value (TCV) and Annual Recurring Revenue (ARR) are higher (>$50K)

• 6-9 months to close

• Covata-configured solution

Extend to SME

• Light touch, SaaS product featuring self-service and configuration

• TCV / ARR <$2-$10K pa but could be much less

• Sales cycle ranges from 2-3 days up to 4 months

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

OUR TARGETED MARKETING IS BUILDING LEADS

Campaigns underway and showing solid results Events are being tracked for leads and sales

UK – GDPR

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USA – ITAR

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26-27 September, National Conference Sydney 10-12 October, Sydney

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CIO Summit 1 November, Melbourne

Cyber Leadership forum 26 October, Melbourne

• Exponential increase in outbound marketing campaigns

• GDPR campaign ‘click rate’ best performing at 45%

• Substantive product evaluations currently underway

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Summit 2017 14-17 November, Sydney

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

WE ALREADY HAVE QUALITY CUSTOMERS

GOVERNMENT

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ENTERPRISE

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24 Departments
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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

AND WE ACTIVELY PARTICIPATE IN THOUGHT LEADERSHIP

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Australasia Conference Cybersecurity Panel 13 November 2017

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

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SECTION C OPERATIONAL UPDATE

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WE ARE MOVING TO A SUSTAINABLE OPERATING MODEL

 Q1 FY18 largest revenue quarter to date SALES  Credible opportunity pipeline built US$6M+ (unweighted)  FY17 Australian R&D receipt $1.5M due Q2 FY18 R&D  We intend to leverage incentives and invest in R&D  SPP raised a net of circa A$1.6M and the placement A$425K for a total in excess of A$2M CAPITAL RAISE  A strong balance sheet is important for customer confidence, recruiting and to invest  A$3.4M in cash 21 November 2017 (excluding capital raise and R&D) CASH  Notional cash including capital raise and R&D of approximately A$7M (before Q2 FY18 costs)  Costs and cash outflows for Q1 FY18 were lower than Q4 FY17 LEAN MODEL  Our focus is to maintain a lean operating model without restricting R&D

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

AND WE ARE BUILDING A BETTER BUSINESS

AND WE ARE	BUILDING A BETTER BUSINESS
CUSTOMERS	 Macquarie Government agreement renewed  New technology customer for A$360K over 3 years  CipherPoint secures major US sports contract
MARKETING	 Refreshed brand and collateral  GDPR & ITARs (International Traffic in Arms Regulations) digital marketing campaigns
TECHNOLOGY	 Implemented quarterly product release cycle: SafeShare 3.5 SP2, Eclipse X.1.1  DSP platform CovataSecure 1.0 beta launch late Q2 FY18  Azure – commercial launch in November
DISCIPLINE	 Cost control  Investment in new releases and platform  Tighter market communications
PEOPLE	 Refreshed development team in place  Sales capability hired and working well

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

OUR FY18 OPPORTUNITY PIPELINE IS GROWING

OPPORTUNITIES

• Qualified opportunity pipeline building – now in excess of US$6m for next 3-4 quarters, 20+ qualified opportunities in next 90 days

• Expect 10%+ conversion rate, increasing over time

• In Q3 expect contribution uplift from Macquarie Government and T-Systems

• New Partners/Channels discussions are underway across all territories with Global document management providers and Cyber Insurance underwriters

CHALLENGES

• Typical sales cycle is 6-9 months – only shorter when a breach occurs or a ‘sensitive data discovery’ test reveals data leakage

• Channel set up time

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Marketing, Leads
RAW LEADS
VIABLE LEADS
Prospect Development MARKETING QUALIFIED
US$6m+
SALES QUALIFIED
SALES 10%+
Sales
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(90-180 DAYS)

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Source: https://www.business.com

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AGM 22 NOV 2017 – MANAGEMENT PRESENTATION

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CONTACT

Steven Bliim Head of Finance and Company Secretary P + 61 2 8412 8200 M + 61 457 600 052 E steven.bliim@covata.com

THANK YOU

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