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WHK Keeps Stacking up Major Revenue Generating Deals

WRITTEN BY: Jonathan Jackson

PUBLISHED: 31-07-2019

WhiteHawk (ASX:WHK) released its quarterly report today and the highlights reel read longer than the end credits of a three hour sci-fi movie.

It certainly confirms why we called the $15M capped WHK as our Next Tech Stock pick of the year.

Given the level of activity this quarter, it would be safe to say that WHK has continued to kick goals and cement its position as one of the go-to cybersecurity providers for small and mid-size enterprises – those with revenues of 1 million to $1 billion.

Its best-in class cyber security products has attracted everyone from defence contractors to top 10 financial institutions to Accenture Federal. It also attracted institutional investment manager RiverFort Global Opportunities PCC Ltd earlier in the year, a UK based manager that invests in high growth companies. This was a big endorsement.

The Accenture deal highlights just how important and far reaching its cybersecurity products can be. WHK is one of several sub-contractors Accenture Federal on a $US2 Billion Federal Government Department contract that complements a further sub-contract it has in place with another US Federal Government department.

Here are some of the milestones WHK has achieved this quarter. You may want to get a cup of coffee, it’s a long line of achievements:

• Sub-contractor to Accenture Federal on a US$2 Billion Contract with US CIO Federal Government Department. Whitehawk’s sub-contract length is 5 years (1 year with 4 option years). First year revenue to WhiteHawk is expected to be between US $300K to US$600K expected to grow between to US$1M to US$3M per year in subsequent years
• WhiteHawk secured a sub-contractor role under the Prime Contractor on a newly awarded US$28 Million Contract for yet another US Federal Government Department. The Contract is for 7 years (1 year with 6 option years) and WhiteHawk’s portion is expected to be between US$150K to US$300K for each year.
• Signed contract extension with a top 12 defense industrial base that is the continuation of an initial 2 phase contract started in 2018 for a total of US$218k
• New Global Sales Channel developed through integration with EZShield/Sontiq providing access to 27 million consumers in the US. Two additional contract discussions with Tier 1 US financial institutions and insurance groups already from this channel.
• Commenced international expansion through partnership with Global Cyber Alliance
• Oversubscribed placement of $2.5M.

Due to the sensitivity of the Cybersecurity Risk focused body of work we can't name the institutions, or the government departments, but what we can say is these contracts are with well known, tier 1 large organisations.

That is just a drop in the well of what WHK has achieved in the last three months. Now, having raised AU$2.5 million (before costs) in oversubscribed placement and with US$110,000 new invoices issued this quarter with payment expected in July, it has finished the quarter with a strong cash position of US$1.9 million.

That’s cash that will be well spent as it looks to further roll out its cyber security solutions.

Given the size of the contracts signed and quality of the institutions on board, it’s surprising the company is trading at a modest $15M market cap with almost $2M in the bank.