Business Context and Reporting Period
This Form 8-K was filed by Cerberus Cyber Sentinel Corporation (the "Company") on October 7, 2021, reporting events occurring on October 1, 2021. The Company is an emerging growth company incorporated in Delaware. The filing details the acquisition of Atlantic Technology Systems, Inc. ("ATS") and Atlantic Technology Enterprises, Inc. ("ATE"), collectively referred to as "Atlantic."
Key Financial Metrics and Transaction Details
The filing reports a material definitive agreement involving the purchase of 100% of Atlantic's outstanding shares. The transaction structure includes:
- Immediate Consideration: 200,000 shares of Company common stock and $75,000 in cash.
- Contingent Consideration (Equity): An additional 100,000 shares of Company common stock, payable upon Atlantic achieving specific revenue and earnings thresholds.
- Contingent Consideration (Cash): An additional $150,000 in cash, payable upon the Company listing on a national exchange.
The filing text does not provide specific revenue, profit, cash flow, margin, debt, or liquidity metrics for the Company or the acquired entity for any reporting period.
Material Changes
The primary material change is the expansion of the Company's operations through the acquisition of Atlantic, which becomes a wholly-owned subsidiary. Atlantic provides technology solutions to small and medium-sized businesses, including financial compliance, active directory management, server and email management, antivirus and firewall services, virtualization, endpoint backup, encryption, and business continuity support. Atlantic is based in New Jersey.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future outlook, or a discussion of specific risks and contingencies beyond the standard disclosure of the transaction terms. The issuance of the 200,000 shares was made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933.
Investor Verification Checklist
- Verify the exact terms of the revenue and earnings thresholds required to trigger the issuance of the additional 100,000 shares.
- Confirm the timeline and conditions for the Company's listing on a national exchange to trigger the $150,000 cash payment.
- Review the full Stock Purchase Agreement (Exhibit 10.1) for representations, warranties, and indemnification clauses not summarized in this report.
- Assess the dilution impact of the 200,000 shares issued immediately and the potential 100,000 additional shares on existing shareholders.