3 Sixty – Letter to Stakeholders - Seite 2

In order to have the CTO revoked so that the company’s shares can again trade on the Canadian Securities Exchange, 3 Sixty is required to not only file its audited 2019 financial statements (including refiling Q1, Q2, and Q3 of 2019) and related documents, but also interim unaudited financial statements for Q1, Q2, and Q3 of 2020. While the company has largely completed financial statements for 2020, full completion of these statements cannot occur until ending accounting balances for 2019 are known and audited. Understandably, the completion of our 2019 audit is critical.

To provide context, 3 Sixty became a public company in January 2019. As such, 2019 marks the company’s first year to be audited as a public company. It is also the first year the company has engaged with our auditor MNP LLP. MNP has been a patient partner in working through this audit process. However, please understand, MNP can only audit information that 3 Sixty provides. Unfortunately, during its rapid growth, and in particular, growth through acquisition in 2018 and 2019, 3 Sixty management did not effectively integrate the disparate entities. This has caused enormous effort to correct.

These efforts have largely paid off with the exception of one situation. We are unable to locate records related to one of the company’s subsidiaries, David Hyde and Associates which are required in order to complete the financial statements audit. While on the surface this may seem worrisome, on a materiality basis, David Hyde and Associates represented roughly $2 million of the approximately $30 million of gross revenue for 2019. MNP is acutely aware of this situation, and continues to work daily with 3 Sixty in the upmost professional manner.

Our Future - Building a World Class Security Services Company

As management and BOD are completing our 2019 audit, we are working diligently in parallel with the task of defining our go-forward business strategy. Fortunately, our experience and strength of the company’s platform should enable the company to demonstrate immediate results. Looking at each of our business units, I provide this brief summary:

• Guarding
  • Current strengths – Significant contracts with name brand entities.
  • Future opportunities – Outsourcing of non-core police services, and expansion into offering complementary high margin security solutions.
• FSS (Financial Security Solutions)
  • Current strengths – Long term established business relationship with one of Canada largest Schedule 1 banks.
  • Future opportunities – Expansion of current customer relationship and securing additional Schedule 1 bank relationship.
• Secure transport
  • Current strengths – Differentiated and proven logistics and transportation service offering with highly loyal clientele.
  • Future opportunities – Targeted niche and high product value markets that leverage our expertise in climate controlled and segregated handling of customer goods.