Hackstrike Company Overview

January 31, 2006 HackStrike - Confidential 2

ParticipantsHemi Aharoni Managing Director

Noga Barak Business Development Consultant

David Dove Financial and Operations Director

January 31, 2006 HackStrike - Confidential 3

Agenda

• Company & Team

• Technology & Products

• Marketing & Sales

January 31, 2006 HackStrike - Confidential 4

Company & Team

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Company OverviewCompany at a Glance:

• Scope of Business: Supplying Managed Security

Services Platform for Service Providers.

• Founded in 2003 by Menachem Schwartz,

co-founder and formally VP of Galileo Ltd.

• Incorporated in Israel at beginning of 2005.

• Personnel: 18 (all based in Israel).

• Located at Park Azorim, Petach Tikva.

January 31, 2006 HackStrike - Confidential 6

Shareholding Structure

Eran Yarom30%

Menachem Schwartz

60%

ESOP10%

January 31, 2006 HackStrike - Confidential 7

Management• Founder and President: Menachem Schwartz

• Managing Director: Hemi Aharoni

• Development Manager: Alex Ris

• Marketing Director: Weeb Cnossen

• Director of Products: Ben Ben-Aderet

• Operations Manager: David Dove

January 31, 2006 HackStrike - Confidential 8

Managing Director

Hemi Aharoni

Operations Manager

David Dove

Sales & MarketingManager

Weeb Cnossen

Product Manager

Ben Ben-Aderet

Development Manager

Alex Ris

QA TeamAccounting Department

EmbeddedSystem

Customer Support Team

High-end Gateways

Management

Server

Document Protection

BusinessDevelopment

Noga Barak

DesignTeam

Organizational Chart

January 31, 2006 HackStrike - Confidential 9

Technology & Products

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Platform – Overview

Internet

Management Server(s)

Gateway Appliances

11

Topology

January 31, 2006 HackStrike - Confidential 12

Secure server application running on a 19” Rack mount 1U hardware.

ManagementServer

Power for Large Businesses & Enterprise. Two models ready to serve from 350 to 500 users. 19” Rack mount 2U hardware.

PHOENIX seriesE 350/500

Optimal for Medium Businesses. Two models ready to serve from 100 up to 200 users. 19” Rack mount 1U hardware.

CRIMSON seriesM 100/200

Applicable for Small to Medium Businesses, extended VPN capabilities, Tabletop model (12”) up to 100 users (optimal)

SCARLET seriesSMB 50/75

Suitable for Private Individuals, Small Office Home Office, Fan less Tabletop model (10”)up to 50 users (optimal)

CARMINE seriesSOHO 10/25

Platform - Product Line

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• Real time digital security monitoring• Remote support of customer network• Remote management of security services• Software upgrades• Data updates• Real time alarming features (under development)• Extensive reporting module regarding:

- Intrusion Attempts & Counter measures- Bandwidth consumption (per station)- Email traffic- Blocked documents- Various Network Statistics- more….

Platform - Management Server

January 31, 2006 HackStrike - Confidential 14

January 31, 2006 HackStrike - Confidential 15

16

Business Flow

Hackstrike

Service

providers

GMS MS Appliances

Customers

MSSP’s ISP’s

ASP’s

Integrators

Local Reps

PartnershipSubsidiaries

SMB’s

Services

Updates & Upgrades

Status & Service

17

Platform – Services Diagram

18

Hackstrike's Fortress1 provides unprecedented coverage of the SMB's security requirements. It includes a comprehensive set of security features and mechanisms, leaving no threat-aspect unattended. We find the product's bi-directional defense and document protection feature highly distinguishing in today's market.

Guy Alfasi CTO

References

19

Marketing & Sales

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Sales (# of appliances)

• Started – July 2005

• Sales so far:– Poland : 40 – Holland : 25– South Africa : 7 – Israel : 65– Argentina : 5

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Sales Projection - 2006• Signed Distribution agreements for:

(# of appliances)– Turkey : 1200– China, Hong Kong and Taiwan : 1200– Holland – 500– Zimbabwe : 110– Poland – 370– Israel : 400– Macedonia : 110

• Negotiation OEM Agreement with Safe and Secure (Thailand)

• We have agreements in process for: Singapore, and Japan

January 31, 2006 HackStrike - Confidential 22

Market Size USAUTM/ILP IDC Forecasts

(Millions)

0

500

1000

1500

2000

2500

3000

3500

4000

2002 2003 2004 2005 2006 2007 2008

ILP Forecast

UTM Forecast

January 31, 2006 HackStrike - Confidential 23

ILP Competition

SMB

Enterprises

Enterprises

Enterprises

Enterprises

Enterprises

Target market

Seed money from founderInbound/Outbound Security Software Appliance - SDM

HackStrike2005

$12.5 (2005) (WBCP, Globespan, Sigma

Partners, Sequel Venture Partners)

Intelligent Content Monitoring

Vericept2005

$23.5(Sequoia, Greylock)

Outbound Security Software

Vidius/Port Authority

Up to2004

$15(US Venture Partners, Benchmark Capital)

Outbound Security SoftwareVontu2003

$11.3(Outlook Ventures, Norwest

Ventures)

Inbound/Outbound Security Software Appliance

Reconnex2004

$7 (Menlo Ventures)

Outbound Security Software Appliance

Tablus2004

VC Funding (M)DescriptionCompanyDate

January 31, 2006 HackStrike - Confidential 24

Hackstrike’s Markets• Information Leakage Prevention : ILP

– Tracks or blocks confidential data from leaving the network– ILP segment is expected to reach 1.7B by 2008

• UTM Market focuses on perimeter protection: – VPN, Firewall, IPS/IDS, anti-virus– UTM Market is poised to grow from $100M in 2003 to

$2B by 2008

UTM = Outside inILP = Inside outHackstrike = the only Outside-In and Inside-Out security solution

January 31, 2006 HackStrike - Confidential 25

Customers / Distribution Channels

• Managed Security Service Provider– MSSP is poised to reach 5.3B in 2005 (Gartner)

• ISP• ASP• Data Hosting• Broadband Providers• Integrators/IT Services• Future:

– OEMs• Document Management, Hardware

– VARs and VADs

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Competitive Advantage• Strong IP

– Secure Digital Asset System : SDAS

• Remote System Management

• Alert, Reporting & Monitoring

• Price/Performance Leader

– Scalability and Modularity

• Strong market differentiation

– Outside-In and Inside-Out Digital Security™

– Business continuity

January 31, 2006 HackStrike - Confidential 27

The Market Challenge

…Data cannot be protected by network appliances [alone] …Insiders still have freedom to copy, view, corrupt, destroy and sell valuable material …financial, personnel, medical and …private data.”

Network World March 2005

“

January 31, 2006 HackStrike - Confidential 28

HackStrike Pricing StructureSystem

• Currently server is not priced. After launch phase it will be charged and licensed.

• Average revenue per appliance $1,000.

• First year of maintenance & subscription services included.

Recurring Revenue

• Document Protection.

• Remote Backup.

• 30% Subscription and Maintenance per Appliance

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Pricing Table

$2,925$1,950$675$450$255$210$135$90Contract renewal

$19,110$12,740$4,410

$2,940

$1,666

$1,372$882$588End user

price

$9,750$6,500$2,250

$1,500

$850$700$450$300Price FOB Hackstrike

up to 500

Up to 350

Up to 200

Up to 100

Up to 75

Up to 50

Up to 25

Up to 10

Recommended number of

users

E500E350M200M100SMB 75

SMB 50SoHo 25

SoHo 10Model

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MSSP Model Example

January 31, 2006 HackStrike - Confidential 31

Sales Forecasts

33,075

20,672

12,920

2,500

FORTRESS-1Units

2009

2008

2007

2006

$10,630,380$5,315,189$51,143,475$67,089,044

$4,237,445$2,118,722$31,964,672$38,320,840

$1,143,605$571,802$15,469,200$17,184,600

----$1,350,000$1,350,000

LicenseDocument Protection

Appliance Related

Total Sales

January 31, 2006 HackStrike - Confidential 32

20062007

20082009 S1

-$10,000,000$0

$10,000,000$20,000,000$30,000,000$40,000,000$50,000,000$60,000,000$70,000,000$80,000,000

Cumulative Cashflow

20062007

20082009

S1

-10000000

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

o

January 31, 2006 HackStrike - Confidential 33

Capital RequirementsBudget:

$1,762,000Resources:

Investment: $700,000, Sales: $1,062,000

Where the $ goes in 2006

$811,000

$598,775

$232,200

$119,600

Development Marketing Wages Overhead

January 31, 2006 HackStrike - Confidential 34

Budget: $6,390,000

Resources: Investment: $3,000,000, Sales: $3,390,000

Future Capital - to be considered

Where the $ will go in 2007

$1,497,000

$1,417,550$3,027,000

$446,200

Development Marketing Wages Overhead

January 31, 2006 HackStrike - Confidential 35End of Presentation

Questions?