Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Cybolt is a Next-Generation Cybersecurity Services provider specialized in delivering multi-technology solutions for managing digital risks and transforming ways of working—ultimately becoming our customers’ long-term IT security partner.

Over the next 5 years, we plan on reaching a valuation of $1B USD. Our global TAM is USD $163B+ in 2020 and is projected to reach USD $418B by 2028 with North America poised to capture a large share in the global market for cybersecurity. We are positioning ourselves as market leaders, specializing in cybersecurity in North America and other parts of the world. These are forward looking projections and are not guaranteed.

Company background

AI4SEC, Inc incorporated in the State of Delaware in May 2019. 

The Company is wholly owned by PURSUIT SCA SICA RAIF. In turn, Search Services SAPI currently owns around 59% of RAIF.

In January 2020, through an Ordinary General Shareholders' Meeting, the sale of the shares of Cyber Team SAPI de CV, a Mexican holding company, was approved to AI4SEC, Inc, making AI4SEC Inc the new owner of Cyber Team SAPI de CV along with its subsidiaries.

Cyber Team SAPI de CV wholly owns the following entities: Cyber Shared Services, Informacion Segura, Novtech, and Cybolt Managed Services.

Milestones

Since the Company's inception, we have:

• Company had over $26M in revenue in the past 12 months. Projected revenue of $50M in 2021 (not guaranteed)
• Average EBITDA growth of 150% in the last two years..
• Result of the successful merger of market leaders in Latin America.
• 200+ active international clients.

Historical Results of Operations

Our company was organized in May 2019 and has limited operations upon which prospective investors may base an evaluation of its performance.

• Revenues & Gross Margin. For the period ended December 31, 2020, the Company had revenues of $26,669,226 compared to the year ended December 31, 2019, when the Company had revenues of $20,577,329. Our gross margin was 39.25% in fiscal year 2020, compared to 22.58% in 2019.
• Assets. As of December 31, 2020, the Company had total assets of $16,363,781, including $2,775,036 in cash. As of December 31, 2019, the Company had $10,640,405 in total assets, including $2,132,963 in cash.
• Net Income. The Company has had net income of $2,475,998 and net income of $1,017,483 for the fiscal years ended December 31, 2020 and December 31, 2019, respectively.
• Liabilities. The Company's liabilities totaled $7,938,594 for the fiscal year ended December 31, 2020 and $9,621,058 for the fiscal year ended December 31, 2019.

Liquidity & Capital Resources

To-date, the company has been financed with $8,154,063 in equity and $4,956,233 in debt. 

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 months before we need to raise further capital.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

Runway & Short/Mid Term Expenses

AI4SEC, Inc cash in hand is $364,542, as of September 2021. Over the last three months, revenues have averaged $2,247,000/month, cost of goods sold has averaged $1,312,000/month, and operational expenses have averaged $480,900/month, for an average net margin of $454,100 per month. We are currently profitable.

Since the date our financials cover, the company continues to grow and remain cash flow positive. Revenues for the first 8 months of the year (2021) amount USD $17 million and EBITDA of USD $2.2 million. In 2021, the Company also underwent a stock split and thus authorized 16.6M shares of common stock. 

Our next goal is to consolidate the organization’s growth in Latin America with strategic acquisitions, and to penetrate the North American market, leveraging on our corporate structure designed to integrate other players in a friendly win-win model that has proven highly attractive for the most talented professionals. With the integration of the right partners in the US and Canada, we believe we will be able to scale the business with great profitability. 

We expect to close 2021 with $50M in revenues and $7M in EBITDA. The Company makes most of its revenue in the last quarter of the year due to seasonality. Additionally, these projections also include acquisitions we intend to close before year end. These are forward looking projections are not guaranteed.

Free cash flow from operations can be leveraged as additional sources of capital. Given our expected levels of EBITDA, we believe we could also borrow an additional $25-$30M if needed (though not guaranteed).