Modified Direct Listing

Cerberus Cyber Sentinel Corporation

Situational Overview

Cerberus engaged HFG to construct a going public process that expedited its time to listing on the OTC. The client did not require capital but wanted a publicly listed stock to use as a currency to make acquisitions. Cerberus did not want to do a traditional reverse merger and relied upon HFG to utilize its direct listing strategy to allow the company to directly list its shares on the OTC without using a shell corporation.

Transaction Highlights

  • HFG structured the vehicle for the going public transaction
  • Going public transaction was completed and a Form 10 Registration Statement filed with the SEC
  • Within 122 days of filing with the SEC the client was a SEC reporting company and listed on the OTC
  • Company has subsequently completed eight acquisitions using its shares as the sole consideration

About The Client

Cerberus Cyber Sentinel Corp. is the first publicly traded pure play cybersecurity roll-up, and is currently listed under ticker “CISO.” Cerberus operates as a nationwide provider of cybersecurity consulting and managed services, with offices and resources all across the US. They specialize in building a security- centric culture for their clients using an education-based approach. Cerberus also focuses on acquiring top cybersecurity talent who specialize in key areas that compliment the various services the company offers.

Outcome

HFG constructed a combination structure whereby the client received the required number of shareholders it needed for listing without the use of a shell corporation, while limiting the founders’ dilution to 2%. CISO’s initial acquisitions were made using a price of $0.50 per share. Within six months the company’s stock price increased 4X, allowing it to make additional acquisitions at an enhanced valuation. Such increase in price further limited any additional dilution to owners overall equity in the company.