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Investor Presentation August 2008 February 2007 Investor Presentation.

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Investor Presentation August 2008
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Page 1: Investor Presentation August 2008 February 2007 Investor Presentation.

Investor PresentationAugust 2008

February 2007 Investor Presentation

Page 2: Investor Presentation August 2008 February 2007 Investor Presentation.

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.

Safe Harbor StatementSafe Harbor Statement

Page 3: Investor Presentation August 2008 February 2007 Investor Presentation.

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”

Page 4: Investor Presentation August 2008 February 2007 Investor Presentation.

• 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

Successful Turnaround

$2.6 million$2.6 million

Six Straight Profitable Quarters Q1 2007 – Q2 2008

Net Income 2007Net Income 2007

Page 5: Investor Presentation August 2008 February 2007 Investor Presentation.

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

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.

Experienced Management

A team with a track record of successful growth and

investor wins in the security industry!

Page 6: Investor Presentation August 2008 February 2007 Investor Presentation.

GVSS

4x4x

10x10x

A Successful Track Record

Access Control

Strategic Acquisitions

Page 7: Investor Presentation August 2008 February 2007 Investor Presentation.

Strategic Partner: Samsung Electronics

• 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

2

1

Source: Korea Herald BusinessWeek21

Page 8: Investor Presentation August 2008 February 2007 Investor Presentation.

Strategic Partner: Samsung Electronics

+ +=

Page 9: Investor Presentation August 2008 February 2007 Investor Presentation.

• 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

Distributor InstallerEnd UserGVI

Samsung

GVI Brand Dealer

Sales Channels

Page 10: Investor Presentation August 2008 February 2007 Investor Presentation.

Leading Edge Products

Page 11: Investor Presentation August 2008 February 2007 Investor Presentation.

5 Canadian Salespeople

55+ US Salespeople

20+ International Salespeople

80+ Salespeople

Strong Sales Force in the Americas

Page 12: Investor Presentation August 2008 February 2007 Investor Presentation.

MAJORRETAILER

MAJOR APPARELRETAILER

Baton Rouge

Parish Schools

Baton Rouge

Parish Schools

Sarasota Sarasota School School

DistrictDistrict

Chesterfield Chesterfield County VA County VA SchoolsSchools

Selected Customers

Joshua IndependentSchool District

Joshua IndependentSchool District

Banco Banco de la Republicade la Republica

ColombiaColombia

Brazil Brazil

MetroMetro

Aduana Mexico Gov’t Customs Organization

Tribunal of Justice de Rio de Janeiro

Poder Judicial Republica de Chile

Guatemala Government Customs Agency

Los Angeles Air Force Base

North Carolina Department of Corrections

Page 13: Investor Presentation August 2008 February 2007 Investor Presentation.

Americas Market for Video Surveillance Equipment

Mill

ions

of

U.S

. D

olla

rs

Source: IMS Research

Move To Digital Technology

Productivity Applications

Market Drivers

Post 9/11 Security Awareness

Broadband Network Availability0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2006 2007 2008 2009 2010

An Exciting Market

Page 14: Investor Presentation August 2008 February 2007 Investor Presentation.

Changing Architecture Creates Big Opportunity

Access ControlClosed Circuit Video

Network Video Management

Access Control

Network Video Storage

IP Video

Closed Circuit VideoStand-alone systems loosely integrated via relays or custom software

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

Page 15: Investor Presentation August 2008 February 2007 Investor Presentation.

Market Transition to IP

Analog Cameras

IP Cameras

IP Servers

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2004 2005 2006 2007 2008 2009 2010

Mill

ion

s o

f D

olla

rs

Global Video Surveillance Camera Revenue Forecast

Page 16: Investor Presentation August 2008 February 2007 Investor Presentation.

High EndMarket

Mid Market (SMB)

Entry Level Market

MarketSweet Spot

The High End Enjoys:• Larger project sizes• Reduced price sensitivity

Entry Level Enjoys:• Higher unit volumes• Reduced system complexity• Reduced sale complexity• Shorter sales cycles

Number of Employees

50 to 1000

>1000

<50

Americas VideoMid MarketSize: $1.3BCAGR: 12%

Source: Phare Consulting Inc.

Targeting the Mid Market

Page 17: Investor Presentation August 2008 February 2007 Investor Presentation.

• 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

Samsung Strategic Partnership

Page 18: Investor Presentation August 2008 February 2007 Investor Presentation.

Acquisition Strategy

SamsungComplementaryTechnology

AccessControl

AccessoriesVideoManagementSoftware

• Video Management Software

• Access Control

• Accessories

• Complimentary to Video

• Customer Projects Often Require Both

• Very High Margins• A Complete Branded

• Offering a More Sophisticated SolutionTakes Samsung to:

Solution

• Repeat Sales• $4B Global Market• 15% Growth Rate

More Upscale Markets More Successful Dealers Higher Margin Sales

Page 19: Investor Presentation August 2008 February 2007 Investor Presentation.

• 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

Growth Strategy

Page 20: Investor Presentation August 2008 February 2007 Investor Presentation.

2005 2006 2007 (est.)

($12.99) ($4.46) $.05

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

Gross MarginGross Margin

Income Statement

Net IncomeNet Income

($ in thousands) 2006 2007 6 mo 2007 6 mo 2008 Net Sales 43,973 45,025 23,294

24,164 Gross Profit % 15.0% 28.4% 27.3% 29.9%

EPS (fully diluted) ($4.46) $0.08 $0.01 $0.02

Net Income (16,491) 2,637 469 695

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

$ (15, 000)

$ (12, 000)

$ (9, 000)

$ (6, 000)

$ (3, 000)

$ -

$ 3, 000

2006 2007 6mo

2007

6mo

2008

0.0%

10.0%

20.0%

30.0%

2006 2007 6mo 2007 6mo 2008

Page 21: Investor Presentation August 2008 February 2007 Investor Presentation.

($ in thousands) 6-30-08 12-31-07 12-31-06

Total assets

20,440 20,892 17,912

23,778 23,356 16,472

Current assets 22,543 21,752 15,846

Total liabilities

Cash and cash equivalents 22 313 225

6,405 9,292 17,850Current liabilities

Stockholder’s equity 3,338 2,464 (1,440)

Balance Sheet

Page 22: Investor Presentation August 2008 February 2007 Investor Presentation.

Favorable Credit Facilities

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

Page 23: Investor Presentation August 2008 February 2007 Investor Presentation.

Price8/5/2008

GVI Security GVSS 0.60 16.9M 0.37 6.99

Henry Bros. Electronics HBE 6.00 35.5M 0.57 43.4

Mace Security International MACE 1.59 26.0M 0.50 Loss

P/S (ttm)

P/E(ttm)

Company Name Ticker Market Cap

Vicon Industries VII 4.55 21.7M 0.33 3.53

Sources: Yahoo

Napco Security Systems NSSC 4.43 84.6M 1.27 15.22

Pelco - Acquired by Schneider Electric in October for $1.54 Billion or 3X Sales of Approximately $500M

Attractive Valuation

Page 24: Investor Presentation August 2008 February 2007 Investor Presentation.

Exchange/Symbol: OTCBB/GVSS

Price (8/5/2008): $0.60

Shares Outstanding: 28.1M

Market Capitalization: $16.9M

Price/Sales (ttm): 0.37X

Price/Earnings (ttm) 6.99X

Equity Snapshot

Sep Nov Jan 08

Page 25: Investor Presentation August 2008 February 2007 Investor Presentation.

• 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

Investment Opportunity

Page 26: Investor Presentation August 2008 February 2007 Investor Presentation.

GVSS

4x4x

10x10x

A Successful Track Record

Access Control

Strategic Acquisitions


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