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February 2007 Investor Presentation

February 2007 Investor Presentation. Investor Presentation August 2008. Safe Harbor Statement. Safe Harbor Statement.

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February 2007 Investor Presentation

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  1. February 2007 Investor Presentation Investor Presentation August 2008

  2. 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.

  3. 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”

  4. 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

  5. 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.

  6. A Successful Track Record 4x Access Control 10x Strategic Acquisitions GVSS

  7. 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

  8. Strategic Partner: Samsung Electronics + = +

  9. 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

  10. Leading Edge Products

  11. Strong Sales Force in the Americas 5 Canadian Salespeople 55+ US Salespeople 20+ International Salespeople 80+ Salespeople

  12. 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

  13. 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

  14. 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

  15. Market Transition to IP Global Video Surveillance CameraRevenue Forecast Millions of Dollars

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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)

  22. Favorable Credit Facilities • $15 Million Secured Credit Facility • Prime + .75% • Resets to Prime + .25% on • $1M Net Profit in 2008

  23. 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

  24. 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 Sep Nov Jan 08

  25. 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

  26. A Successful Track Record 4x Access Control 10x Strategic Acquisitions GVSS

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