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CISO Stock: Analysis – Due Diligence – Risk Factors

CISO Stock – What Investors Should Know

CISO StockCerberus Cyber Sentinel Corp. (CISO Stock) is a cybersecurity and compliance company offering cybersecurity consulting and related services. Cerberus Cyber Sentinel Corporation specializes in cybersecurity and compliance. The company offers secured managed services, compliance services, security operations center (SOC) services, virtual Chief Information Security Officer (vCISO) services, incident response, certified forensics, technical assessments, and cybersecurity training.

These services can be divided into two categories – Security managed services and Professional services. To this end, the company offers cybersecurity consulting, compliance audits, vulnerability assessment, and penetration testing, including disaster recovery and data backup services. Customers can subscribe to a turn-key package called SOC-as-a-Solution.  It is a subscription-based service that manages and analyzes client logs, devices, clouds, networks, and assets for potential cyber threats. The company was established in 2015 and is based in Scottsdale, Arizona.

More About Cerberus Cyber Sentinel (CISO Stock)

Cerberus Sentinel was formed on March 5, 2019, as a Delaware corporation. The company’s principal offices are located at 6900 E. Camelback Road, Suite 240, Scottsdale Arizona. Effective April 1, 2019, the company acquired GenResults, LLC, an Arizona limited liability company. GenResults was founded on June 22, 2015. Prior to the transaction, GenResults was owned entirely by an entity connected to David G. Jemmett, the current Chief Executive Officer and a director of the Cerberus Sentinel.  GenResults is now a wholly-owned subsidiary of Cerberus Sentinel.


TalaTek – Cerberus Sentinel entered into a merger agreement with TalaTek LLC on October 1, 2019.  Under the terms, TalaTek LLC, a Virginia limited liability company became a fully owned subsidiary. All issued and existing units representing TalaTek membership interests were converted into an aggregate of 6,200,000 shares of CISO common stock as part of the TalaTek Merger. TalaTek offers comprehensive integrated enterprise risk management services through a unique blend of methodologies, processes, and technology. Currently, these services are primarily available to the public sector.

Alpine Security LLC – The Company entered into an agreement and plan of merger with Alpine Security LLC, effective December 16, 2020. It is an Illinois limited liability company.  Under the merger agreement, Alpine became a fully owned subsidiary of the Company. All issued and existing membership units in Alpine were exchanged for 900,000 shares of the CISO common stock under the terms of the Alpine Acquisition.

Catapult Acquisition Corporation – On July 26, 2021, the Company entered into a merger agreement and plan with Catapult Acquisition Company.  Catapult is a New Jersey corporation doing business as VelocIT. Under the agreement, VelocIT became the Company’s fully owned subsidiary. All issued and outstanding shares of VelocIT common stock were converted into the right to acquire up to 2,566,778 shares of the CISO common stock, subject to a 256,678 share holdback. The start date was August 12, 2021.


Technologyville Inc. – The Company engaged in a stock purchase agreement with Technologyville, Inc. on May 25, 2020.  TechVille is an Illinois company that became a wholly owned subsidiary of the Company under terms of the Techville Acquisition. The Acquisition swapped all issued and outstanding common stock of Techville for a total of 3,392,271 shares of the CISO common stock.

Clear Skies Security, LLC – Clear Skies Security, LLC, was a Georgia limited liability company.  Its equity investors entered into a stock purchase agreement with the Company on August 1, 2020.  Under the agreement, Clear Skies became a wholly owned subsidiary of the Company. The Clear Skies Acquisition swapped all issued and outstanding equity securities of Clear Skies for a total of 2,330,000 shares of CISO common stock.

Arkavia – On December 1, 2021, the Corporation entered into a stock purchase agreement with Southford Equities, Inc.  Arkavia was a British Virgin Islands company. The agreement resulted in Arkavia becoming a wholly-owned subsidiary of the Company. The transaction’s total purchase price was 3,100,000 shares of CISO common stock.

True Digital Security Inc.

On January 5, 2022, the Company entered into a Stock Purchase Agreement with shareholders of True Digital Security Inc. True Digital is a Delaware corporation. True Digital is scheduled to become a wholly owned subsidiary of the Company under the provisions of the Stock Purchase and Merger Agreement. The Company is to pay an aggregate consideration of $6,153,000 in cash and 8,229,000 shares of the CISO ordinary stock under the True Digital Stock Purchase and Merger Agreements. Certain closing conditions remain in place for the True Digital Stock Purchase and Merger Agreement. This comprises completing an underwritten public offering at a minimum purchase price of $5.00 per share and being listed on the Nasdaq Stock Market.

CISO Stock – SEC Filings

Cerberus Cyber Sentinel Corp is incorporated in the state of Delaware. Cerberus Cyber Sentinel Corp is primarily in the business of services-management consulting services. For financial reporting, their fiscal year ends on December 31st. This page includes all SEC registration details and a list of all documents (S-1, Prospectus, Current Reports, 8-K, 10K, Annual Reports) filed by Cerberus Cyber Sentinel Corp.

Positive Indicators for CISO Stock

  • High growth revenue forecast – Revenue is forecast to grow 48.81% per year
  • Demand outpaces supply – Cybersecurity is also known as computer security or information technology security.  It is the safeguarding of computer systems and networks against information disclosure, theft, or damage to hardware and software.  Also, safeguards for electronic data as well as disruption or misdirection of the services and information provided. The cybersecurity business is experiencing a supply and demand problem.  Currently, there is greater demand for cybersecurity services than competent compliance and cybersecurity specialists available in the market.

CISO Stock – Risk Factors

  • Earnings – Currently unprofitable
  • Volatility – Volatile share price over the past 3 months
  • Share dilution – Shareholders have been diluted in the past year

Cerberus Cyber Sentinel Corp. needs to raise additional capital 

The company needs to raise additional capital in order to realize its published business objectives. Failure could adversely impact our operations. The company’s stated growth strategy is centered on successfully acquiring and integrating firms.  Particularly, companies that provide equivalent or complementary cybersecurity services.  This is necessary in order to increase the number of clients and consolidated revenue. The company was not profitable as of September 30, 2021. Moreover, they may not be able to achieve profitability in the existing lines of business.  Unless they attract additional capital and have appropriate funding.

Ultimately, the company requires significant growth in sales and successful integration of the acquired merger targets. The company had approximately $3,791,728 in liquid financial resources as of November 30, 2021. They expect to continue to fund operations with available net operating cash flows.  However, they will need to raise additional capital in the future.  One way to achieve this is by issuing equity or other forms of securities.  But, this method may significantly reduce the percentage ownership of existing stockholders. Furthermore, any newly issued securities may have rights, advantages, and privileges senior to those of our existing common stock.  As a result, this action may dilute existing stockholders’ ownership stake.

Rising interest rates with a global recession looming

The company may have difficulties acquiring additional cash as needed.  As a result, it may be forced to accept terms that are detrimental to current stockholders. Furthermore, any poor conditions in the credit and stock markets may impair the capacity to raise cash when needed. Failure to obtain appropriate funds will potentially cause acquisition attempts to be delayed.  Or, it may result in the cancellation of one or more acquisition activities.  Moreover, it could prevent the company from responding to competitive challenges.  Or, from taking advantage of unexpected acquisition opportunities. Any new equity financing will almost certainly be dilutive to stockholders.  And, some types of equity financing, if available, may include restrictive covenants.  Or, other terms that restrict how management does business or finances operations.

Cerberus Cyber Sentinel Corp. incurred significant losses and has limited cash flow

The company incurred significant operating losses during the years ended December 31, 2019, and December 31, 2020.  And the nine months ended on September 30, 2021.  The company has limited cash flow. The remedy is to increase revenues and cash flow or raise additional capital.  Otherwise, it may be unable to take advantage of any acquisition opportunities that arise.  Or, expand our business, all of which could adversely impact the company and its shareholders.

Management cannot forecast whether or not it will produce significant positive cash flow or attain profitability. Their strategy for these issues is to increase income while also improving operational efficiencies across the board. However, there can be no guarantees that they will be successful in expanding revenues and improving operational efficiencies.  Or, that funding will be accessible or, if available, on favorable terms. If we are unable to generate sufficient revenues to meet expenses and are unable to get further financing, they may be forced to scale back or halt any expansion plans.

The company operates in an industry with a shortage of qualified compliance and cybersecurity professionals. 

Cerberus Sentinel must continue to attract and retain highly skilled compliance and cybersecurity personnel.  This is essential in order to carry out the company’s stated growth objectives. Competition for these employees is fierce, particularly for compliance experts and cybersecurity professionals. As a result, the company may not be able to attract and maintain qualified staff. Currently, there is a global shortage of these professionals who can provide the technical and strategic skills needed.  Without these qualified professionals, the company cannot provide high-level services to clients and potential new clients. Cerberus Sentinel has had trouble in the past securing key employees and they expect to continue to have difficulty.  In the future, attracting and maintaining highly trained workers with adequate qualifications is a serious potential bottleneck.

Many of the organizations Cerberus competes with for these highly trained employees have more resources than they do. Furthermore, while making employment decisions, particularly in the high-technology business, job candidates frequently consider the value of the stock options, restricted stock grants, or other stock-based remuneration they would receive as part of their employment. Declines in the value of the company’s shares could harm our ability to attract and retain important workers.  Ultimately, this results in higher employment costs. If the company is unable to attract new employees or retain and motivate current employees, their business and future growth prospects may suffer significantly.

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