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February 2007 Investor Presentation

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February 2007 investor presentation l.jpg

February 2007 Investor Presentation

Investor Presentation

August 2008


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Safe Harbor Statement

Safe Harbor Statement

This material contains statements that are not statements of historical fact, but instead are forward-looking statements. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the company’s ability to market existing and new products, ability to access capital for expansion, and changes from anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, dependence on our relationship with our primary supplier and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The company undertakes no obligation to publicly update or revise any forward-looking

statements, whether as a result of new information, future events or otherwise. This presentation

is based upon information available to the public, as well as other information from sources

which management believes to be reliable, but is not guaranteed by GVSS as being accurate

nor does it purport to be complete. Opinions expressed herein are those of manage-

ment as of the date of this presentation and are subject to change without notice.


Investment opportunity l.jpg

Investment Opportunity

  • Successful Turnaround Led by Experienced Team

  • Six Straight Profitable Quarters

  • Currently trades at less than 7X Earnings

  • We are Samsung Electronics Security Business in the Americas

  • Working with Samsung to Double Market Share over the Next 3 Years

  • Security “Pure Play”


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Successful Turnaround

Six Straight Profitable Quarters Q1 2007 – Q2 2008

Net Income 2007

$2.6million

  • New Management Team and Board

  • Eliminated Loss-Making Activities

  • Set Appropriate Expense Levels and Implemented Controls

  • Focused on Key Working Capital Items

  • Strengthened Samsung Strategic Partnership and Contract

  • New $15M Credit Facility Established with Wells Fargo Business Credit


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Experienced Management

Steven E. Walin, CEO/Chairman – Former president of GE Security Enterprise Solutions; former Senior VP for the security systems division of Siemens Building Technologies; former President / COO of Security Technologies Group (STG)

Joseph Restivo, COO/CFO – Former VP of North American Services and Business Development for Siemens Building Technologies. President/COO of Casi-Rusco

A team with a track record

of successful growth and investor wins in the

security industry!

Michael Capulli, Sr. VP North American Sales – 26 years of experience in security sales; was VP of Sales for Tri-Ed Inc.; recently was Director of Global Accounts for Tyco Safety Products.

Fernando Tomasiello, Sr. VP International Sales – Eight years of experience in the security industry; was Director of Sales for South America for Global Options International Inc.; from 1998 to 2000, was VP of Sales for International Security Experts Systems.

Duncan Havlin, VP Product Management – 11 years of experience in the security industry; former Vertical Marketing Manager for GE Security.

Esra Pope, VP Marketing – 7 years of experience in the security industry; former leader of project integration for Military and Government security sales in Turkey.


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A Successful Track Record

4x

Access Control

10x

Strategic Acquisitions

GVSS


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Strategic Partner: Samsung Electronics

Source: Korea Herald BusinessWeek

1

2

  • The World’s Largest and Leading Electronics and IT Company

  • #1 Consumer Electronics Brand Worldwide

  • Annual Sales over $100 Billion US

  • Operates in over 100 Countries

  • Wants to be #1 in Security Electronics

1

2


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Strategic Partner: Samsung Electronics

+

=

+


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Sales Channels

Samsung

Installer

Distributor

GVI

End User

Dealer

GVI Brand

  • Samsung and GVI Branded Video Security Surveillance Systems

  • Sell Through Distributors, Installers and Dealers

  • Industry Leading Service and Technical Support

  • 75% Samsung, 25% GVI Branded Products to Supplement Samsung Line


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Leading Edge Products


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Strong Sales Force in the Americas

5 Canadian Salespeople

55+ US Salespeople

20+ International Salespeople

80+ Salespeople


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Selected Customers

Banco

de la Republica

Colombia

Baton Rouge

Parish Schools

Aduana Mexico Gov’t Customs Organization

MAJORRETAILER

Tribunal of Justice de Rio de Janeiro

Sarasota School District

Poder Judicial Republica de Chile

Chesterfield

County VA

Schools

MAJOR APPAREL

RETAILER

Brazil

Metro

Guatemala Government Customs Agency

Joshua Independent

School District

North Carolina Department of Corrections

Los Angeles Air Force Base


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An Exciting Market

Americas Market for Video Surveillance Equipment

Market Drivers

Post 9/11 Security Awareness

Move To Digital Technology

Millions of U.S. Dollars

Productivity Applications

Broadband Network Availability

Source: IMS Research


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Changing Architecture Creates Big Opportunity

Network Video Management

Network Video Storage

IP Video

Access Control

Closed Circuit Video

Stand-alone systems loosely integrated via relays or custom software

Access Control

Closed Circuit Video

IP Video

IP based systems integrated via common standards with a master control console


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Market Transition to IP

Global Video Surveillance CameraRevenue Forecast

Millions of Dollars


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Targeting the Mid Market

  • The High End Enjoys:

    • Larger project sizes

    • Reduced price sensitivity

Number of Employees

>1000

50 to 1000

High End

Market

<50

Americas Video

Mid Market

Size: $1.3B

CAGR: 12%

Market

Sweet Spot

Mid Market (SMB)

Source: Phare Consulting Inc.

Entry Level Market

  • Entry Level Enjoys:

    • Higher unit volumes

    • Reduced system complexity

    • Reduced sale complexity

    • Shorter sales cycles


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Samsung Strategic Partnership

  • Strong Strategic Partnership with Samsung

  • Samsung has High Growth Goals – Double Market Share

  • Strong Partner – $1.5 Million Initial Investment thru Q1 2009

  • Samsung Increasing Investment in R&D / QA for Security

  • Demonstrated Willingness to Co-Invest in Growth and Acquisitions

  • Samsung is Poised to Extend their Leadership in Electronics and IT to the Full Electronic Security Market with GVI as their Strategic Partner


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Acquisition Strategy

  • Complimentary to Video

  • Customer Projects Often Require Both

  • Video Management Software

  • Access Control

  • Accessories

  • Repeat Sales

  • $4B Global Market

  • 15% Growth Rate

Access

Control

Samsung

Complementary

Technology

Video

Management

Software

Accessories

  • Offering a More Sophisticated SolutionTakes Samsung to:

  • Very High Margins

  • A Complete Branded

  • More Upscale Markets

  • More Successful Dealers

  • Higher Margin Sales

Solution


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Growth Strategy

  • Build on our Unique Strategic Partnership with Samsung

  • Deliver Enterprise Level Technology to the Middle Market

  • Expand Revenue and Margins

  • Acquire Technologies such as Access Control and Video Management Software

  • Continue to Build Already Strong Sales Channels

  • Target: Double Market Share in 3 Years


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Income Statement

2005 2006 2007 (est.)

2006 2007 6 mo 2007 6 mo 2008

($ in thousands)

Net Sales

43,973 45,025 23,294 24,164

Gross Profit%

15.0% 28.4% 27.3% 29.9%

Operating Income

(7,887) 2,475 1,103 1,517

(9,388) (7,887)2,300

Net Income

(16,491) 2,637 469 695

EPS (fully diluted)

($12.99) ($4.46) $.05

($4.46) $0.08 $0.01 $0.02

Net Income

Gross Margin


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Balance Sheet

($ in thousands)

6-30-08 12-31-07 12-31-06

Cash and cash equivalents

22 313 225

Current assets

22,543 21,752 15,846

Total assets

23,778 23,356 16,472

Current liabilities

6,405 9,292 17,850

Total liabilities

20,440 20,892 17,912

Stockholder’s equity

3,338 2,464 (1,440)


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Favorable Credit Facilities

  • $15 Million Secured Credit Facility

  • Prime + .75%

  • Resets to Prime + .25% on

  • $1M Net Profit in 2008


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Attractive Valuation

Price

P/E

Market

P/S

(ttm)

Company Name

Ticker

Cap

(ttm)

8/5/2008

GVI Security

GVSS

16.9M

0.37

6.99

0.60

Henry Bros. Electronics

HBE

6.00

0.57

35.5M

43.4

26.0M

Loss

Mace Security International

MACE

0.50

1.59

Vicon Industries

4.55

VII

21.7M

0.33

3.53

84.6M

15.22

1.27

Napco Security Systems

NSSC

4.43

Pelco - Acquired by Schneider Electric in October

for $1.54 Billion or 3X Sales of Approximately $500M

Sources: Yahoo


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Equity Snapshot

Exchange/Symbol: OTCBB/GVSS

Price (8/5/2008): $0.60

Shares Outstanding: 28.1M

Market Capitalization: $16.9M

Price/Earnings (ttm) 6.99X

Price/Sales (ttm): 0.37X

SepNov Jan 08


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Investment Opportunity

  • Emerging Player in Rapidly Growing Security and Surveillance Industry

  • Experienced Management Team in Place

  • Focused on the $2.4B Americas Market for Video Surveillance Growing at 10% CAGR

  • Clear Strategy Aimed at Underserved Middle Market

  • Strong Samsung Strategic Partnership

  • An Exciting and Executable Plan


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A Successful Track Record

4x

Access Control

10x

Strategic Acquisitions

GVSS


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