ATDS DATA443 Risk Mitigation Inc (PK)

July 14, 2020 -- InvestorsHub NewsWire -- via Seeking Alpha -- About: Data443 Risk Mitigation, Inc. (ATDS), Includes: ADBE, CHKP, CRWD, FB, FTNT
 

• New Data Privacy laws such as the EU GDPR and California CCPA are fueling unprecedented demand for Cyber Security and COVID-19 driven remote work is further fueling demand
• Open Source software model is “free” and has been enormous growth driver in countless successful software enterprises such as YouTube, RHAT, FB, TWTR, GOOG, NFLX, MSFT, ADBE, ORCL
• Data443 Risk Mitigation, Inc., (OTCPK:ATDS) “Open Source” data protection is being met with very strong demand
• Over 30,000 web sites with a reach to millions of end users, sales increased from zero in 2018 to over $1.4 million in 2019, and estimated 2020 sales projected at over $5 million. First quarter 2020 was $477,877 versus $142,971 for same period 2019
• Recently signed Miami Dolphins with potential for entire NFL as well as other major sports leagues
• ZOOM now offers DATA443 to millions of users
• ATDS shares have been EXTREMELY OVERSOLD down from $1.90 in last 12 months by convertible note holders whose only goal was to liquidate at any price and with no regard to share price. The company has now struck a deal to halt the aggressive selling
• BioResearchAlert finds ATDS shares undiscovered and undervalued with current market cap of only $1.7 million and share price of one cent. Current market comps point to current ATDS share value over $.40 per share and significantly higher as current growth rate continues to accelerate

Summary

Countless examples point to the enormous success of the “open source” model for software apps where apps offered to users for free have the potential to mushroom the number of users in a short time and create value from additional offerings such as premium upgrades or ad-free services. Examples are numerous and include well-known names such as YouTube, RHAT, FB, TWTR, GOOG, NFLX, MSFT, ADBE, ORCL. Each has their own unique product, but “open source” or “free” apps is one of the primary drivers of huge growth.

Data443 Risk Mitigation (OTCPK: ATDS) is the first to combine the growing need for new Data Privacy with free “open source” solutions to attract a large number of users. Underlying value to investors and to potential suitors increases as the number of users grows, even if they are free. WordPress powers over 1,000,000,000 websites globally and operates its own app store like Apple and Google. In 2016, 1.5 Billion plugins were downloaded from the WordPress.org repository alone.

Data443 has seen active users of its GDPR Framework for WordPress go from less than 5,000 to over 30,000 in less than 1 year! The Company expects to continue to expand its open source overrings significantly this year.

The following February 23, 2020 article explains the undervalued share price and the current market comps indicating substantially higher valuations with the potential for unusually large gains:

COVID-19, TOUGH NEW CYBER SECURITY LAWS, STRONG GROWTH AND MARKET COMPS POINT TO ATDS OVER 400X POTENTIAL GAINS

• ATDS is a leading Cyber Security provider with over 30,000 company users.
• Executed letter of intent to acquire the assets and customer base of Internet Software Sciences with over 100,000 installations and over 1 million end users worldwide from corporations, educational institutions, non-profits and government agencies
• With the number of COVID-19 remote workers soaring, with B2B customers eager to meet new legal requirements for effective Cyber Security solutions and with the unrealistic low market cap of $140,000, ATDS has become a serious buyout candidate and at the same time a very attractive investment.
• ATDS shares have been oversold and pounded to almost giveaway prices by toxic convertible debt buyers who have no regard for value and who only liquidate at any price as quickly as possible they can move on to their next deal. Shares have traded as high as $17 in 2018 on news of their powerful Cyber Security solutions.
• Effective July 1, 2020, new Consumer Protection laws exposing companies to draconian penalties will drive already mushrooming cybersecurity sales to even greater record growth.
• After recent share consolidation followed by retirement of 2 million shares, the number of ATDS shares plummeted from 9.5 billion down to under 153 million.
• Market comps point to well over $.40 per share based on projected $5 million 2020 revenues.
• CEO Jason Remillard recently committed to buying almost $4 million convertible debt that will keep those shares off market.

Summary

In early 2018, Data 443 (ATDS: OTC) shares were trading at levels well above today's when they announced their first acquisition of the award winning “Classidocs” that met many of the requirements of the then upcoming GDPR Cyber Security requirements in Europe. Shortly thereafter, the market realized the opportunity and saw ATDS shares run to over $17.00 per share in just a few short months.

As is frequently the case, market excitement got ahead of itself and shares gradually drifted back down in normal profit taking. Selling also picked up pace from the convertible investors who helped finance the company but sold their shares so they could be paid back. Combined, these selling pressures created this outstanding buying opportunity today.

Market comparisons based on actual sales demonstrate that ATDS shares are exceptionally undervalued and when share prices catch up with the market through investors becoming aware of this disparity, the price has the potential to increase over 6,000% from current levels.

With the recent increase in sales and projected strong growth from new laws requiring the services of ATDS, and with the drastic reduction in the number of shares reduced from 9.5 billion to about 153 million, it appears that the stage is now set for ATDS to begin a new run to higher prices that have the potential to challenge and even set new highs for 2020 and 2021.

Mushrooming Need For Cyber Security

Data breaches are becoming more frequent, bigger, and increasingly expensive, and the risk of jaw-dropping penalties and settlements for data breaches just got even higher after the European Union’s General Data Protection Regulation (GDPR) on May 25, 2018. In late June, 2018, California passed a consumer privacy act, AB 375, that could have more repercussions on U.S. companies than the European Union’s General Data Protection Regulation (GDPR) that went into effect this past spring.

If a company covered under the new bill is not in compliance with California’s CCPA they will have 30 days to comply once regulators notify them of a violation. If the issue isn't resolved, there's a fine of up to $750 per record and considering that the number of customers in most data banks is very large and frequently in the millions, this kind of penalty could be enough to drive many companies into bankruptcy.

Clearly, the risk is too big to chance and the need for Cyber Security is increasing dramatically. A few recent examples of how steep the fines can be are:

According to a report from IBM, the average cost of a data breach has increased to US$ 3.92 million, which is a 1.6 percent increase in costs in 2018 and a 12 percent rise over the last five years.

Cyber-attacks, data thefts, weak security, mistakes, and cover-ups have cost these companies a huge fortune.

1. British Airways

The UK’s data protection watchdog ICO (Information Commissioner Office) fined British Airways on July 08, 2019, with £183.39 million (around US$ 230 million) after the airline failed to protect its customers’ data. The fine was related to a data breach that occurred in September 2018, exposing around 500,000 customers’ personal information.

The ICO said its investigation found the breach compromised customer details, including login, payment card, name, address, and travel booking information which is collected after being diverted to a fraudulent website. The data breach, which began in June 2018, occurred due to the poor security measures to protect customer information, ICO stated.

2. Yahoo

In one of the biggest class-action lawsuit settlements in the United States’ history, Yahoo Inc. has agreed to pay US$ 117.5 million over a series of data breaches that affected its users between 2012 and 2016. The affected users will likely get US$ 100 in compensation or two years of credit monitoring services for free.

Yahoo urged the Settlement Class Members to claim for the reimbursement. In case users already hold credit monitoring services, they can opt for cash payment, which is less than US$ 100 or more (up to US$ 358) per user, depending on how many users are claiming for the settlement, Yahoo said in a statement.

According to Yahoo, anyone who had a Yahoo account between January 1, 2012, and December 31, 2016, and is a resident of the United States or Israel is eligible for the settlement.

3. Uber

In 2016, taxi aggregator Uber had 600,000 drivers and 57 million user accounts breached. Instead of reporting the issue, the company paid the perpetrators, Glover and Mereacre, US$ 100,000 in ransom to keep the hack a secret. These actions cost the company deeply. Uber was fined US$ 148 million in 2018 for violation of state data breach notification laws.

In October 2019, the two hackers pleaded guilty for their extortion scheme to steal sensitive information of 57 million Uber passengers and drivers. According to the statement from the Federal Court, California, the hackers admitted stealing personal information from the ride-hailing service provider that was stored on Amazon Web Services from October 2016 to January 2017 and then demanded a ransom.

4. Marriott International

In July 2019, popular hospitality group Marriott International was charged with £99,200,396 (around US$ 123,705,870) fine by ICO for the data breach reported in 2018. The ICO stated that Marriott failed to protect its customers’ information, thus violating the GDPR regulations.

Marriott faced a massive data breach affecting up to 500 million guests last year. Hackers extracted people’s personal data as well as a loyalty program, payment, and reservation information. That’s not all, encrypted credit card data of 100 million customers was also stolen.

5. Facebook

Facebook is set to pay the largest fine imposed on a technology company by the Federal Trade Commission (FTC). On July 24, 2019, the social media giant was slapped with a massive US$ 5 billion fine for allegedly violating privacy practices and mishandling user data during the infamous Cambridge Analytica scandal and other privacy breaches. The FTC ordered Facebook to adopt new policies for protecting users’ data and expand these policies across Instagram and WhatsApp.

Facebook has also agreed to pay £500,000 (around US$ 645,000) penalty imposed by ICO for failing to safeguard the users’ data gathered by political data firm Cambridge Analytica.

According to the settlement deal, Facebook has agreed to drop its legal appeal against the penalty. The ICO stated that Facebook can retain some documents that the ICO disclosed during the appeal process to use for its own investigation into issues around Cambridge Analytica.

6. Equifax

In July this year, the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau fined Equifax around US$ 700 million following a massive data breach in 2017 that leaked a massive amount of information of more than 143 million people in the U.S. alone.

According to the official reports, the proposed penalty could be between US$ 650 and US$ 700 million. It’s said that the final amount could vary depending on how many people file claims and their expected compensation.

On September 7, 2017, the Atlanta-based consumer credit reporting agency disclosed that its databases had been breached between May and June 2017, and hackers had gained access to company data that potentially compromised sensitive information for 143 million American consumers, including Social Security numbers, credit card numbers, and driver’s license numbers. Equifax discovered the breach on July 29, 2017. It waited until after the close of trading nearly six weeks later to disclose the breach to consumers and Equifax’s investors, after hackers exfiltrated data for 76 days.

Goldman Small Cap Research published bullish report on ATDS.

Enviable Corporate Success Has Been Overlooked

"ATDS offers what is the longest running DRM platform for mobile. Moreover, in its open source solution, ATDS boasts over 30,000 users---this number rivals and exceeds some of the largest and leading companies in the space. Clearly, many are ripe for conversion to paying customers and thousands are trusted relationships---a highly valuable and hidden asset. New cloud-based, multi-functional and integrated offerings are slated to be introduced following a series of customer tests. This new integrated platform could generate $1500/mo/per customer seeking comprehensive data and privacy solutions," commented Goldman.

ATDS Represents an M&A Prospect

Goldman concludes, "Revenue could approach $1.8M for 2019 and possibly $5M in 2020-the first full year that its three acquisitions will generate revenue and organic growth is demonstrated. This excludes potential 2H20 M&A. Based on these forecasts, ATDS is undervalued relative to current prices and its peer group on a pre-revenue basis. Furthermore, once additional M&A is executed, these figures will likely have to be revised upward. In the meantime, ATDS could be viewed as an attractive takeover candidate. It has a large open- source user base, broad customer base, and low relative industry valuation. An acquirer could buy ATDS and grab tech and market share for a fraction of the industry's valuations. Thus, opportunistic investors may view prices represent an attractive entry point."

Current Market Comps – Price to Sales Ratio Based on Last 12 Month Sales

Splunk - SPLK 6.75 to 1

CheckPoint – CHKP 8 to 1

CrowdStrike – CRWD 25.5 to 1

OKTA – OKTA 25 to 1

Fortinet – FTNT 8 to 1

Zscaler – ZS 23 to 1

ProofPoint – PFPT 6.3 to 1

Average Price to sales Ratio = 11.8

Current ATDS market cap is $1,530,000 with share price of $.01. Based on reported 2019 revenues of $1.4 million and projected 2020 sales of $5 million, with current Price to Sales ratio of 11.8 to 1, ATDS shares are projected to trade at $.40 in 2020.

Business Highlights for the Third Quarter of 2019:

ATDS Expands Sales

During Q1-2020 Data443 has onboarded 9 new sales and marketing professionals and has a continuous growing inbound funnel of professional and capable staff team members going through the application and assessment process at the company. “During hiring, we look for many things – in addition to the basics of course - attitude, the ability to respond to and execute change and quickly cycle between product lines are major considerations for anyone joining our team. Our methodology is being applied across all of our product lines, so the expectations and requirements apply to those as well.”, added Mr. Bruni.

The recently announced Global Privacy Manager™ by Data443 product is built on the award winning data classification platform ClassiDocs™ and Data443’s WordPress GDPR Framework, which is currently powering more than 30,000 businesses worldwide for the EU’s GDPR Privacy Law will be rolled out immediately. The combined platform automatically searches the data residing in cloud application, databases, servers, and endpoints used by businesses to discover, classify and map customer data.

“The new sales and marketing methodology are already garnering results for the organization and we are excited to expand the program to the other product lines. This approach enables us to be more responsive and dynamic to changing market and customer demands – while managing costs and investment in direct to our financial models. This highly algorithmic approach is more appropriate for our business and today’s market conditions – giving us more accurate and timely information on the return of our efforts. These provide the foundation for our next evolution of the product line into consumer-facing capabilities which will be marketed directly and with partners to be announced at a later time.” said Remillard.

Fresh Comp

One quick look at a recent $210 million funding for $2.7 billion Cyber Security company called OneTrust further supports ATDA undervaluation and 2 tables illustrate the advantages held by ATDS over OneTrust.

 

 

Cloud-Based Data Storage, Protection, and Workflow Automation Platform

Personal and Corporate Privacy and Compliance Scanner for Group Video and WebinarsExposes Data443 Brand and Product Line to Millions of New Potential Clients

RESEARCH TRIANGLE PARK, NORTH CAROLINA, July 14, 2020 (GLOBE NEWSWIRE) -- Data443 Risk Mitigation, Inc. (“Data443” or the “Company”) (OTCPK: ATDS), a leading data security and privacy software company, today released to the general public its latest advance in its cloud Global Privacy Manager product line – Data443 Chat History Scanner - powered by the Company’s award winning ClassiDocs™.

What it is:

• Effortlessly scan your recorded chat history logs for privacy, financial, security and other sensitive information types
• Test different languages and sensitive data types against recordings to detect anomalies
• Detect policy breaches by your staff or other vendors on webinars or group meetings
• Remove recordings, webinars or other content that violates policy
• Available for free to all subscribers; premium version to follow at reasonable cost

Why it matters:

• Online meeting platforms have exploded in popularity during the recent pandemic, with significant room to grow.
• Roughly two-thirds of U.S. workers who have been working from home prefer to continue working remotely as much as possible even when pandemic restrictions lift, according to a recent Gallup poll.¹
• Exposes Data443 brand and all other products to millions of end users and customers
• Leading charge in the burgeoning online data storage and management space, providing the Company with significant market penetration

¹ https://www.wsj.com/articles/seven-rules-of-zoom-meeting-etiquette-from-the-pros-11594551601?mod=searchresults&page=1&pos=2

Management Commentary:

Jason Remillard, CEO of Data443, commented, “Today’s announcement is another key accomplishment for Data443, and continues the development of our Global Privacy Manager product segment that includes a plethora of products that ensure corporate compliance and personal privacy online – for both consumers and businesses alike. This effort has taken months of work by our dedicated engineering staff, securing certification from the vendor, and enabling us to deliver another world-first product to the marketplace.”

“The combination of compliance requirements, massive data collection and storage of both consumer and commercial information, without the ability to scan, parse and understand this data in a massively growing virtual environment, continues to be a significant risk for organizations of any size. By creating the Data443 Chat History Scanner, we saw a “blue ocean” opportunity in creating a simple, quick and easy way to meet these challenges, while aligning Data443 with the global leader in online video communications.

“Being on the first page of security and compliance products in the App Store is another notch in our belt as we continue to deliver products for a wide range of SaaS information providers on many platforms. Being distributed and available on multiple providers is part of our new approach to expand our business and reach new potential customers,” concluded Mr. Remillard

Conclusion

TDA – Data 443 is ranked in the top 15 U.S. based Cyber Security companies by Black Book Market Research and provides services to big name clients like Hewlett Packard, Ripple, MicroSoft, Twitter, Facebook and Linkedin. Sales started at zero and were $1.4 million for 2019 and projected to hit $5 million in 2020. With an aggressive and smart acquisition program adding to sales and with strong organic internal sales growth, ATDS is expected to achieve strong sales growth and become a takeover target for the cash rich, sales hungry, software giants. There are about 153 million shares outstanding and the potential exists for prices at many multiples of today’s price and possibly even record highs in 2021. Displaying a strong vote of confidence, CEO, Jason Remillard, stepped up and negotiated a deal with convertible debt holders amounting to around $4 million that has now been extended between 6 months and one year and thereby eliminates those potential shares from ever hitting the market.

2019 revenues were driven by sales for 6 months from only one product and only 1 quarter of the second product, while 2020 sales are being driven by the ENTIRE YEAR OF SALES FROM ALL 3 PRODUCTS PLUS ACQUISITIONS.

Goldman Research recently rated ATDS as a Speculative Buy with a price target of $3.65.

With current market Sales to Price ratio of 11.8 to 1, if ATDS executes as they are currently doing and delivers 2020 sales of $5 million, it is reasonable to expect ATDS share price to achieve $.40 in 2020 and as growth accelerates share price has the potential to rapidly increase over $1.00.

Legal Disclaimer:

Except for the historical information presented herein, matters discussed in this release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as ''expects,'' ''will,'' ''anticipates,'' and ''estimates''; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements.

Original Publication: https://seekingalpha.com/instablog/21922151-bioresearch-alert/5472520-why-1-cent-atds-shares-down-from-1_90-are-expected-to-soar-zoom-jumps-on-board