All contracts are not created equal.
Let’s call “1” – trivial, and “10” highly significant.
CBD lip balm to feature in 3 Czechoslovakian pop-up stores – “1”.
Molybdenum explorer engages renowned metallurgy expert – “5”.
Cybersecurity company inks deal with U.S. Department of Defense – “10”.
On July 15, 2021 Plurilock Security (PLUR.V) received a US$1.7 million order with the U.S. Department of Defense as part of National Aeronautics and Space Administration’s (NASA) Solution for Enterprise-Wide Procurement (SEWP), a U.S. Government-Wide Acquisition Contract Vehicle (GWAC).
Plurilock is an identity-centric cybersecurity company that reduces or eliminates the need for passwords by measuring the pace, rhythm and cadence of a user’s keystrokes to confirm their identity.”
The U.S. Department of Defense increased contract spending to $445.5 billion in fiscal 2020, an increase of nearly 10% from $404.5 billion disbursed in fiscal 2019, according to Bloomberg Government data.
Following Plurilock’s US$1.15 million order with the U.S. Department of the Navy announced on May 7, 2021, the latest purchase order represents the Company’s second order to be worth over US$1 million in recent months.
All contracts and orders signed by Plurilock since May 2021, including the latest order, represent a combined total of US$5.5 million in sales.
With over 1.4 million men and women on active duty, and 718,000 civilian personnel, the U.S. Department of Defense is the nation’s largest employer.
On June 29, 2021 PLUR provided a corporate update for the first half of 2021.
- Plurilock’s Solutions Division has signed a cumulative US$3.16M in new business since April 2021
- Robust activity in the cybersecurity sector has resulted in an active M&A pipeline with multiple offers in play
- Filing of three U.S. provisional patent applications increases Plurilock’s total patent portfolio to six
Plurilock’s Artificial Intelligence (A.I) can learn a “unique typing signature” in under 60 seconds.
The company’s technology has the power to disrupt the current status quo: Multi-factor Authentication (MFA) – which is widely disliked and unreliable.
“Dedicated hackers have little problem bypassing through the weaker MFA implementations, either by intercepting codes or exploiting account-recovery systems,” confirms The Verge.
Plurilock has agreed to provide the U.S. Department of Defense with “a collection of IT software and hardware products, including network communication equipment, IT system components, peripherals, and software.”
The order includes ongoing maintenance support and will be fulfilled and sent overseas to an international site operated by the U.S. Department of Defense.
This new order is part of the Company’s planned growth strategy and efforts to acquire additional business within the government vertical.
The SEWP V program, launched by NASA in 2015, is the leading information technology (IT) contract vehicle, with government agencies spending $7.9 billion in fiscal 2020.
Estimates anticipate that agencies will utilize SEWP V for $8.8 billion in contracted spending in fiscal 2021. The contract vehicle provides Plurilock with the opportunity to access downstream customers in the government sector.
This contract didn’t come out of the blue.
On March 29, 2021 PLUR announced that it has signed an agreement to acquire 100% of Aurora Systems Consulting – a provider of advanced cybersecurity technology and services based in California.
“Aurora will operate as an additional sales force to deliver Plurilock’s state-of-the-art identity assurance solutions to Aurora’s vast network of clients,” states PLUR.
Aurora’s main clients include the U.S. Department of Defense, U.S. Department of the Air Force, U.S. Department of the Navy, U.S. National Aeronautics and Space Administration, U.S. Department of the Treasury and U.S. Department of the Army.
Since 2001, Aurora has provided cybersecurity products and offered professional services to U.S. clients across three main segments:
- Federal government institutions
- State, local, education government agencies
- commercial firms
Key Highlights of Aurora
- Revenue of US$28.1 million (CAD$35.8 million) in 2020
- Gross Margin of US$1.4M in 2020
- Diversified client base consisting of over 140 tier-1 organizations
- Numerous prominent master service agreements with state and federal agencies in the United States
Aurora’s margins are low (4.9% of revenue) but the kicker here for Plurilock is that Aurora has big customers – like the U.S. Department of Defense – and an existing high-performance sales team.
In the video below, PLUR CEO Ian Paterson talks to Equity Guru’s Jody Vance about the Aurora deal – and more.
“Aurora is based in Southern California,” Paterson told Vance, “They’ve got tremendous distribution and customers in the cybersecurity verticals that we’re targeting. They’re doing approximately $35 million of revenue on an annual basis.”
“The total consideration for this transaction is approximately USD $1.5 million. We believe it’s going to be very valuable for shareholders.”
Paterson points out that no security system is 100% secure.
“If you look at traditional locks or safes, the highest-grade products are measured by how long it takes a determined attacker to break in,” explains Paterson, “With software, it’s similar.”
“With enough time, money and expertise, you can get into anything,” continued Paterson, “But the trick is, how easy or difficult are you going to make it? The good guys have to recognize there’s been an intrusion to stop the bad guys moving laterally throughout the network”.
“The Pentagon represents the majority of overall federal contract spending totaling about $445.5 billion of the $681 billion spending in fiscal 2020,” reports Bloomberg, “Since fiscal 2016, contract spending at the Department of Defense has increased by 45%.”
If the 2020 Pentagon budget was a glass of water, PLUR’s $1.7 million contract with the Department of Defense would represent one tenth of one drop.
The challenge and the opportunity for PLUR is to get higher on Department of Defense’s radar, and move this micro-share to 1-drop or two or ten.
“Plurilock is still very early in its journey,” confirms Paterson, “Most cybersecurity companies operate privately going down the VC road for many, many years and only go public once they’re at the multi billion-dollar stage.”
- Lukas Kane
Full Disclosure: Plurilock is an Equity Guru marketing client.