What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-12 compared with 2021-08-13 · 391 added, 371 removed, 211 unchanged (78% of the section changed)

47 unchanged sentences

(“TalaTek”), Technologyville, Inc., an Illinois corporation (“Techville”), Clear Skies Security, LLC, a Georgia

limited liability company (“Clear Skies”), and Alpine Security, LLC, an Illinois limited liability company (“Alpine”).

Unless otherwise specified, all dollar amounts are expressed in United States dollars.

limited liability company (“Clear Skies”), Alpine Security, LLC, an Illinois limited liability company (“Alpine”)

and Catapult Acquisition Corporation (“VelocIT), a New Jersey corporation.

Unless otherwise specified, all dollar amounts are expressed

in United States dollars.

Cyber Sentinel Corporation (“Cerberus Sentinel”) was formed on March 5, 2019 as a Delaware corporation.

9 unchanged sentences

Under the terms of the Clear Skies Acquisition,

all issued and outstanding equity securities in Clear Skies were exchanged for an aggregate of 2,330,000 shares of our common

all issued and outstanding equity securities in Clear Skies were exchanged for an aggregate of 2,330,000 shares of our common stock.

December 16, 2020, we entered into an Agreement and Plan of Merger pursuant to which Alpine became a wholly owned subsidiary of the Company.

All units representing membership interests of Alpine issued and outstanding were converted into 900,000 shares of our common stock.

are a security services company comprised of highly trained security professionals who work with clients to create a continuously aware

security culture.

We do not sell cybersecurity products.

We position ourselves as a trusted cybersecurity advisor and are committed to

delivering tailored security solutions to organizations of different sizes and across all geographies and industries to fit their budgetary

needs and limit their cyber threat exposure.

currently provide a multitude of cybersecurity services including managed security service, cybersecurity consulting, technology consulting,

compliance auditing, vulnerability assessment, penetration testing, security remediation, Security Operations Center (“SOC”)

set-up and consulting and cybersecurity training.

We differentiate ourselves from competitors by staying technology agnostic.

that many cybersecurity service providers in the market today are committed to a specific technology solution which limits their service

scope and ability to quickly respond to any emerging cybersecurity challenges.

In addition, as we continue to serve our clients within

our existing capacities, we plan to continue making strategic acquisitions of small-to-medium-sized engineer-led cybersecurity service

businesses to continue to expand our service scope and geographical coverage.

We believe that having a world-class technology team with

multi-faceted expertise is key to providing technology agnostic solutions to our clients and maximizing their return on investment from

cybersecurity and information technology (“IT”) spending.

Cybersecurity

the world has become increasingly connected through the Internet and the Internet of Things (“IoT”), cyberattacks have prevailed

and evolved over the years, in different forms, causing uncontainable threats to the integrity and privacy of enterprise and personal

data and resulted in significant economic losses globally.

response to the increasing economic damage caused by heightened cybersecurity risks, regulatory bodies have pushed the implementation

of new cybersecurity legislations, and cyber insurance companies have increased minimum cybersecurity requirements.

We believe that we

are well positioned in a fast-growing industry to provide businesses with a wide scope of cybersecurity services and with significant

opportunities for growth.

currently offer two major types of services to clients:

Managed Services and Consulting Services.

Managed Services focus on a holistic approach to cybersecurity based on an upfront gap analysis of our clients’ existing cybersecurity

We provide multiple offerings in the managed service portfolio including the following:

CISO-as-a-service:

Many companies need cybersecurity services but do not have the capital resources or knowledge base to hire a Chief Information Security

Officer (“CISO”).

We offer this service to companies on an ongoing consulting basis as a resource to augment their management

CISO-as-a-service includes road mapping the future needs for the client and providing our knowledge and expertise to help them

achieve their security needs;

education and enablement offering:

This targets the root cause for approximately 75% of cyber breach events by starting with a culture

of security-forward thinking;

and technology provisioning offering:

We provide technology-agnostic solutions catering to a client’s existing products and

to enhance the cyber defense system by making carefully selected additions without bias and to fit their financial profile;

and privacy offering:

This ensures that a client’s data security and privacy are properly managed to alleviate risks of data

loss and breach;

and compliance offering:

We evaluate a client’s policies and procedures and implement the appropriate compliance framework

based on the latest industry regulations and obligations;

We offer SOC-as-a-service, which is a subscription-based service that manages and monitors client’s logs, devices,

clouds, network and assets for possible cyber threats.

This service provides the clients with the knowledge and skills necessary

to combat cybersecurity threats.

consulting services include a wide array of tailored solutions for organizations of all sizes.

Our in-depth industry expertise allows

us to act as the trusted advisor of our clients to help them lower their risk profile, minimize cost impact to organizations and meet

regulatory compliance demands.

July 26, 2021, and effective August 12, 2021, we entered into an Amended and Restated Agreement and Plan of Merger pursuant to which

VelocIT became a wholly-owned subsidiary of the Company.

All issued and outstanding shares of common stock of VelocIT were converted

into the right to receive an aggregate of up to 2,566,778 shares of common stock of the Company, subject to a holdback of 256,678 shares

of Company stock.

cyber security industry has a supply and demand issue;

there is more demand for cyber security services than expert and seasoned compliance

and cybersecurity professionals available in the market.

We are a cybersecurity and compliance company comprised of highly trained and

seasoned security professionals who work with clients to enhance or create a better cyber posture in their organization.

We seek to identify,

attract, and retain highly skilled cyber and compliance teams and bring them together to provide holistic cyber services.

This is accomplished

through acquisitions, direct hiring and incentivizing employees with stock options to help retain them.

On an ongoing basis, we seek

to identify cyber talent that is culturally aligned and that offers operating leverage through both existing customer revenue and relationships.

We have invested in enterprise solutions and executive talent to integrate our different organizations into an ecosystem that works together

to provide complete and holistic cybersecurity through cross pollination of solutions.

The ecosystem is intended to provide additional

revenue opportunities and drive overall recurring revenue.

emphasize to clients the critical nature of having their work force create a continuously aware security culture.

Once engaged, we strive

to become the trusted advisors for customers’ cybersecurity and compliance needs by providing tailored security solutions based

upon their organizational needs.

We do not focus on the selling of cybersecurity products;

we are product agnostic so that we can provide

solutions that fit customers’ security needs, financial realities, and future strategy.

Our approach is to evaluate clients’

organizations holistically, identify compliance requirements, and help secure the infrastructure while helping to create a culture of

provide a full range of cybersecurity services, encompassing all pillars of cybersecurity, compliance, and culture, including Secured

Managed Services, Compliance Services, SOC Services, Virtual CISO (vCISO) Services, Incident Response, Certified Forensics, Technical

Assessments, and Cybersecurity Training.

We believe that culture is the foundation of every successful cybersecurity and compliance program.

To deliver that outcome, we developed our unique offering of MCCP+, which is the only holistic solution that provides all three of these

pillars under one roof from a dedicated team of subject matter experts.

In contrast to the majority of cybersecurity firms that are focused

on a specific technology or service, we seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating highly-sought

after topic experts.

We continually identify and acquire cyber security talent to expand our service scope and geographical coverage

to provide the best possible service for our clients.

We believe that bringing together a world-class team of technological experts with

multi-faceted expertise in the critical aspects of cybersecurity is key to providing technology agnostic solutions to our clients in

a business environment that has suffered from a chronic lack of highly-skilled professionals, thereby setting us apart from competitors

and in-house security teams.

Our goal is to create a culture of security and to help quantify, define and capture a return on investment

(ROI) from information technology and cybersecurity spending.

Our brand rallies around the battle cry:

“Cybersecurity is a Culture,

not a Product.”

this set of cybersecurity services allows us to capture more revenue with greater efficiency, facilitating greater profitability and

stronger customer retention.

The benefit to our customers is that they receive an efficient engagement from a single provider that covers

a wide range of their needs.

This means their challenges are addressed more thoroughly and problems are resolved more rapidly when compared

to working with multiple vendors.

This leads to the best possible outcome which enables them to commit to us for the long term.

believe that our business model is differentiated from other companies in the industry in that our employees are not consultants;

dedicated partners available on a recurring monthly contract.

Due to the numerous challenges in hiring experienced cybersecurity and

compliance professionals, we believe that assimilating our team of industry and subject matter experts into our clients’ teams

is the ideal solution.

are technology agnostic.

Whereas, most cybersecurity firms are locked into working with a single technology, we seek to differentiate

ourselves by remaining technology agnostic.

This approach enables us to work with any business, no matter what systems or tools they

For our customers the benefit is equally valuable;

they’re able to choose the best tools and technology for their business

needs without affecting their relationship with us.

believe that building a world-class technology team with industry-specific and subject-matter expertise is the key to providing cutting-edge

solutions to our clients.

We aim to continue to identify and acquire cybersecurity talent to expand our scope of services and geographical

footprint to fortify our capability to deliver excellence to our customers.

Furthermore, our commitment is that we will stay a step ahead

of threat actors and regulatory obligations to keep our customers safe and compliant.

Service Offering

currently offer two major types of services to clients including Security Managed Services and Professional Services.

Managed Services

Security Managed Services deliver an end-to-end solution to cybersecurity and compliance needs.

We begin with a gap analysis of our customers’

existing cybersecurity and compliance practices.

Next, we perform penetration testing, vulnerability scanning, and a best practices assessment.

This culminates with a deliverable report outlining failures and risks and includes a remediation roadmap organized based on highest-value

opportunities and critical necessities.

This prioritized approach utilizes the maxi-min strategy to optimize our customers’ budget;

something that comes from decades of experiential wisdom.

Using this roadmap, our team performs remediation and change implementation

throughout a customer’s business.

This is followed by our culture program that delivers cybersecurity and compliance awareness

training, risk reporting, and periodic knowledge verification.

We cover every area of our customers’ businesses and engage with

every member of their team.

This is our end-to-end holistic approach that we believe leaves no stone unturned to ensure our customers

are truly safe, secure, and compliant.

offer multiple services in the Security Managed Services portfolio including the following:

Our compliance practice ensures the customers are implementing the right controls, properly prioritizing risks, and

investing in the appropriate remediation, so our customers can achieve compliance, adhere to industry standards and guidelines, and

manage continuous monitoring over time.

We provide the combination of integrated processes and systems, experienced staff, and

innovative technology to help our customers meet those goals.

Our seasoned experts possess the stringent industry certifications and

accreditations that prove they understand security compliance regulations, frameworks, and controls.

Our deep knowledge of these

rigorous and unique requirements means we can offer a thorough, timely assessment that will identify residual risk within the

customer’s information system.

We then propose mitigation strategies to manage the customer’s risk effectively.

authorized FedRAMP vendor ourselves, we bring an insider’s perspective to the process in the following standards:

- The Federal Risk and Authorization Management Program (FedRAMP) provides standardization to cloud security for Cloud Service Providers

FedRAMP recognition is required to sell cloud services to the US Federal and many state and local governments https://www.fedramp.gov/

2014 - codifies the Department of Homeland Security’s role in administering the implementation of information security policies

for federal Executive Branch civilian agencies, overseeing agencies’ compliance with those policies, and assisting OMB in developing

those policies.

https://www.cisa.gov/federal-information-security-modernization-act

17021, ISO 27001 is an International Standard that provides Certification Bodies (CB) with a set of requirements that will enable them

to ensure that their management system certification process is carried out in a competent, consistent and impartial manner.

https://www.iso.org/

- Technology for Economic and Clinical Health Act of 2009 (“HITECH”) – These are laws regulated by the Department of

Health and Human Services (“HHS”) to secure the privacy and confidentiality of protected health information (“PHI”)

( https://www.hhs.gov/hipaa/index.html )

- This is a standard administered by the Payment Card Industry Security Standards Council ( https://www.pcisecuritystandards.org/pci_security/ )

Security Framework (CSF) Consist of five core functions:

Identify, Protect, Detect, Respond, and Recover.

NIST defines the framework

core on its official website as a set of cybersecurity activities, desired outcomes, and applicable informative references common across

critical infrastructure sectors.

https://www.nist.gov/cyberframework

- The National Institute of Standards and Technology (“NIST”) – This is formally known as a National Bureau of Standards,

which is a federal agency that promotes and maintains measurement standards while encouraging and assisting industry and science to develop

and use these standards.

https://www.nist.gov/

○ 800-171/CMMC

- CMMC is intended to serve as a verification mechanism to ensure that DIB companies implement appropriate cybersecurity practices and

processes to protect Federal Contract Information (FCI) and Controlled Unclassified Information (CUI) within their unclassified networks.

https://csrc.nist.gov/publications/detail/sp/800-171/rev-2/final

○ GDPR - The General Data Protection Regulation is one of the most wide-ranging pieces of legislation passed by the EU in

recent memory.

It was introduced to standardize data protection law across the single market and give people in a growing digital

economy greater control over how their personal information is used.

https://gdpr.eu/compliance/

Service Organization 2 (“SOC 2”) – This is an auditing procedure that focuses on a business’ non-financial reporting

controls related to security, availability, processing, integrity, confidentiality, and privacy of a system;

https://www.aicpa.org/

HITRUST CSF – This is a comprehensive security framework (“CSF”) developed by the Health Information Trust Alliance

(“HITRUST”) in collaboration with healthcare, technology and information security leaders, to create access, store and exchange

sensitive and/or regulated data;

https://hitrustalliance.net/

Secured Managed Services:

Cybersecurity companies who may excel at pointing out vulnerabilities or configuration issues, we have experts

with the capability to resolve fix them.

Our team has extensive experience in remediating security issues in a holistic fashion, to quickly

effect change at organization scale.

We know our customers’ teams are busy enough as is, so we offload the burden of addressing

the dozens or hundreds of remediation items that may come from a security review, penetration test, or incident response project.

remediation services resolve vulnerabilities that may expose risk to, or have caused, unwanted conditions or outcomes.

Examples of issues

that Cerberus Sentinel remediate include writing new or more effective policies, rearchitecting computer networks to minimize attack

surface, implementing high security password requirements and multi-factor authentication, applying missing security patches that expose

an organization to security attack, or correcting misconfigurations that can lead to unauthorized access such as a user being granted

overly broad permissions.

Our remediation services provide customers with a mature methodology for the heavy lifting needed to ensure

that implementing solutions to minimize security risk are done safely, efficiently, and correctly the first time.

● SOC Managed Services:

We offer SOC-as-a-service, which is a subscription-based service that manages and monitors

client’s’ logs, devices, clouds, network, and assets for possible cyber threats.

This lets our service provide the

clients with the knowledge and skills necessary to combat cybersecurity threats.

vCISO Service:

Corporations are in need of cybersecurity services but many do not have the capital resources or knowledge base to hire

a Chief Information Security Officer (“CISO”).

We offer this service to companies on an ongoing managed service basis as

a resource to augment their management team.

vCISO includes road mapping the future state for the client and providing our knowledgeable

expertise to help them achieve their security needs.

advisory services include a wide array of tailored solutions for organizations of all sizes.

Our in-depth and uniquely acquired industry

expertise allows us to act as a trusted advisor of our clients to help them lower their risk profile, minimize cost impact to organizations

and meet regulatory compliance demands.

We specialize in:

Cybersecurity

Bringing the culture of cybersecurity to a client’s leadership team and penetrating throughout the organization

is a critical first step of building any cybersecurity system.

Through our consulting service, we dive in both at the cultural and

technical aspects of cybersecurity within the organization.

We help our clients build effective policies and best practices, design

or enhance a cybersecurity system and train the executive management team so that the culture at the top is set to facilitate diligent

implementation of cybersecurity awareness.

We provide auditing services under several compliance frameworks as follows:

Organization 2 – This is an auditing procedure that focuses on a business’ non-financial reporting controls related to

security, availability, processing, integrity, confidentiality, and privacy of a system;

Card Industry Data Security Standard– This is a standard administered by the Payment Card Industry Security Standards Council;

Insurance Portability and Accountability Act of 1996 and The Health Information Technology for Economic and Clinical Health Act of

2009 – These are laws regulated by the Department of Health and Human Services to secure the privacy and confidentiality of

protected health information;

CSF – This is a comprehensive security framework developed by the Health Information Trust Alliance in collaboration with healthcare,

technology and information security leaders, to create, access, store and exchange sensitive and/or regulated data;

National Institute of Standards and Technology – This was formally known as the National Bureau of Standards, which is a federal

agency that promotes and maintains measurement standards while encouraging and assisting industry and science to develop and use

these standards.

and risk assessment:

We perform security risk gap analysis and advanced threat intelligence and analytics to identify potential areas

of security risk and monitor potential breaches on a frequent basis.

Evaluating all aspects of the business from executive management,

finance, legal, human resources, compliance, operations and then IT.

This is to ensure the organization has a holistic understanding

of their company’s security posture.

We offer network and application-level penetration testing performed through industry tools and verified by certified security

At the network level, we conduct network scans for clients at pre-defined intervals based on their preference.

automatic scans are performed at the same IP address.

We also make further attempts to exploit any vulnerability found by the network

scan to eliminate false positives.

At the application level, we utilize techniques such as parameter tampering, cookie poisoning,

session hijacking, user privilege escalation, credential manipulation, forceful browsing, backdoors and debug options, configuration

subversion, input validation bypass, SQL injection, and cross-site scripting to assess the application for known vulnerabilities.

Developments During the Quarter

May 5, 2021, our Board of Directors appointed Kiki VanDeWeghe as a director.

VanDeWeghe, 62, is an American former professional basketball

player, coach and executive in the National Basketball Association.

He has served as the Executive Vice President, Basketball Operations

of the National Basketball Association since 2013.

Prior to that, Mr.

VanDeWeghe was the general manager of the Denver Nuggets and the

New Jersey Nets, and a head coach of the New Jersey Nets.

Prior to that he played professionally for the Los Angeles Clippers, New York

Knicks, Portland Trail Blazers and the Denver Nuggets.

VanDeWeghe attended UCLA where he received a degree in Economics.

is qualified for service as a director of the Company due to his business acumen and experience as an organizational leader.

of Chief Financial Officer

June 18, 2021, the Board of Directors appointed Deb Smith as Chief Financial Officer.

Smith, 51, has served as Executive Vice President

of Finance and Accounting at the Company since February 2021.

Prior to joining the Company, Ms.

Smith served as Executive Vice President

of Finance at Arrivia Inc.

from January 2020 to February 2021 and Controller and, subsequently, Chief Accounting Officer at BeyondTrust

from October 2016 to January 2020.

Smith received a Bachelor of Science degree in Accounting, Summa Cum Laude, from DeVry University

and a Master’s degree in Counseling with Honors from Argosy University.

Incident Response and Forensics:

This is where we focus on identification, investigation, and remediation of cyberattacks.

Technical Assessments:

We specialize in advanced cyber security assessments that highlight the skills and experience of our team’s

top-tier talent.

Our customers benefit from our routine identification of issues based on our emphasis on real-world manual testing techniques

and custom exploit development to uncover new avenues of attack.

We believe that our approach to penetration testing services strikes

the perfect equilibrium between cost, time and results.

Our team of highly skilled testers utilize the same tools and techniques a malicious

cybercriminal would use to try to gain unauthorized access to highly-guarded corporate systems and data to evaluate technical controls

and quantify business risks in a meaningful way.

This level of analysis provides business leaders the knowledge required to not only

understand the impact a successful attack might have on their business operations, but also can validate the effectiveness of existing

security controls and justify additional security related investment.

This targets the root cause for 75% of cyber breach events by starting with a culture of security-first forward thinking.

awareness training can prevent a catastrophic cyberattack before it even occurs by equipping users with the tools and techniques required

to spot a potential cyberattack in the early stages.

Other Cybersecurity Services:

Cybersecurity Road Mapping:

Bringing the culture of cybersecurity to client’s leadership team and penetrating throughout the

organization is a critical first step of building any successful cybersecurity system.

Through our consulting service, we dive into

both the cultural and technical aspects of cybersecurity within the organization, providing meaningful recommendations to improve

cybersecurity posture immediately.

We help our clients build effective policies and best practices, design or enhance a

cybersecurity system and train the executive management team to foster a top-down culture of cybersecurity in order to facilitate

diligent implementation of cybersecurity awareness.

Gap and Risk Assessment:

Threat actors probe and exploit the weakest points in an organization, it doesn’t matter if a business

has done 100 things right when one mistake can be catastrophic.

Cerberus Sentinel combines decades of security expertise and in-depth

knowledge of how cyberattackers operate to deliver a thorough security risk gap analysis that identifies real world threats and issues

guidance for protection.

We first familiarize ourselves with the customer’s environment, business model, operations, and business

drivers to best determine a customer’s cybersecurity posture in an ever evolving threat landscape.

We then use our advanced threat

intelligence, data breach experience, and analytics to accurately assess the customers unique cybersecurity risk based on their “as

We then operate with a holistic mindset, considering every link in the cybersecurity chain from people, processes, and

technology, to determine their ideal “to be” state, aligned with their business goals, compliance requirements, and risk

Finally, we collaboratively devise and develop a strategic cybersecurity plan that takes into account critical priorities

to effectively reduce cybersecurity risk by closing the gap between their “as is” and “to be” states.

This comprehensive

awareness of internal systems and policies provides our customers with a clear understanding of their overall risk as well as the strategies

and tools they need to protect their most valuable assets:

their data and brand reputation.

Development During the Quarter

June 30, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Catapult

Acquisition Merger Sub, LLC (“Merger Sub”), Catapult Acquisition Corporation (“Catapult”), the shareholders of

Catapult Acquisition Corporation (the “Catapult Shareholders”) and Darek Hahn, in his capacity as the shareholder representative

(the “Shareholder Representative”).

Pursuant to the Merger Agreement, Catapult agreed to merge with and into Merger Sub (the

“Merger”), with Merger Sub surviving the Merger as a wholly-owned subsidiary of the Company.

The Merger was to become effective

as soon as practicable following completion of certain conditions to closing in the Merger Agreement (the “Effective Time”).

July 26, 2021, the Company, Merger Sub, Catapult, the Catapult Shareholders and the Shareholder Representative entered into an Amended

and Restated Agreement and Plan of Merger (the “Amended and Restated Merger Agreement”) to provide, among other things, that

Merger Sub would merge with and into Catapult, with Catapult surviving the Merger as a wholly-owned subsidiary of the Company.

and outstanding shares of common stock of Catapult immediately prior to the Effective Time were converted into the right to receive an

aggregate of up to 2,566,778 shares of common stock, par value $0.00001, of the Company, subject to a holdback of 256,678 shares of Cerberus

The Effective Time was August 12, 2021.

which operates under the brand name of VelocIT, offers enterprise solutions through a suite of products and services to small and medium

sized businesses.

Such suite of products and services include IT leadership, vector alerts, active directory management, server management,

email management, antivirus services, LAN services, wireless management, firewall management, virtualization management, WAN services,

SAN services, endpoint back-up, endpoint encryption and business continuity support.

VelocIT is based in Cranbury, New Jersey.

of Operations

of the Three Months Ended June 30, 2021 to the Three Months Ended June 30, 2020

financial results for the three months ended June 30, 2021 are summarized as follows in comparison to the three months ended June 30,

the Three Months Ended June 30, 2021

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Loss before income taxes

$ (2,413,381 )

$ (2,116,862 )

the Three Months Ended June 30, 2020

Cost of revenue

Operating expenses

Operating loss

Other income (expense)

Loss before income taxes

Cost of revenue

Operating expenses

Operating loss

Other expense

Loss before income taxes

$ (1,854,075 )

$ (1,570,759 )

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the three months ended June 30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

the Three Months Ended June 30, 2021

Managed services

Consulting services

Total revenue

the Three Months Ended June 30, 2020

Managed services

Consulting services

Total revenue

Managed services

Consulting services

of the Three Months Ended September 30, 2021 to the Three Months Ended September 30, 2020

financial results for the three months ended September 30, 2021 are summarized as follows in comparison to the three months ended September

Three Months Ended

September 30,

Security Managed Services

Professional Services

Total revenue

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the three months ended June 30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

decreased for Cerberus by $216,403, or 40%, for the three months ended June 30, 2021, as compared to the three months ended June 30,

2020, due to one of the Company’s largest customers decreasing its required services as compared to the three months ended June

increased for TalaTek by $149,078, or 17%, for the three months ended June 30, 2021, as compared to the three months ended June 30, 2020,

as a result of (i) an increase in contract revenue from a significant client of approximately $113,000 and (ii) various contracts that

were active during the three months ended June 30, 2021 that were entered into subsequent to June 30, 2020.

increased for Techville by $580,553 for the three months ended June 30, 2021, as compared to the three months ended June 30, 2020, as

a result of Techville only having one month of operations due to the acquisition consummated on May 25, 2020.

Approximately $537,000

was a result of Techville’s managed service offerings and approximately $200,000 was a result of Techville’s miscellaneous

hardware sales associated with Techville’s consulting service offerings.

for Clear Skies and Alpine were $885,962 for the three months ended June 30, 2021.

We did not recognize any revenue attributable to Clear

Skies or Alpine during the three months ended June 30, 2020, because of the acquisitions consummated on August 1, 2020 and December 16,

2020, respectively.

Virtually all of these revenues were a result of Clear Skies’ and Alpine’s gap and risk assessment offerings.

the Three Months Ended June 30, 2021

Managed services

Consulting services

Cost of payroll

Total cost of revenue

the Three Months Ended June 30, 2020

Managed services

Consulting services

Cost of payroll

Total cost of revenue

Managed services

Consulting services

Cost of revenue:

Security Managed Services

Professional Services

Cost of payroll

Total cost of revenue

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the three months ended June 30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

of revenues increased for Cerberus by $208,802, or 75%, for the three months ended June 30, 2021, as compared to the three months ended

June 30, 2020, and was primarily the result of an increase in employees due to Alpine’s employees being accounted for under Cerberus.

of revenues increased for TalaTek by $112,670, or 21%, for the three months ended June 30, 2021, as compared to the three months ended

June 30, 2020, as a result of an increase in employees resulting in an increase in salaries.

of revenues increased for Techville by $503,376 for the three months ended June 30, 2021, as compared to the three months ended June

30, 2020, which reflected only one month of operations following consummation of the acquisition of Techville on

May 25, 2020..

of revenues for Clear Skies and Alpine were $328,995 for the three months ended June 30, 2021.

We did not recognize any costs of revenues

for Clear Skies or Alpine for the three months ended June 30, 2020, because the acquisitions were consummated on August 1, 2020 and December

16, 2020, respectively.

the Three Months Ended June 30, 2021

Professional fees

Advertising and marketing

Selling, general and administrative

Stock based compensation

Loss on write-off of account receivable

Total operating expenses

the Three Months Ended June 30, 2020

Professional fees

Advertising and marketing

Selling, general and administrative

Stock based compensation

Loss on write-off of account receivable

Total operating expenses

Total gross profit

Operating expenses:

Professional fees

4 unchanged sentences

Total operating expenses

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the three months ended June 30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

expenses increased for Cerberus by $1,359,515 or 164%, for the three months ended June 30, 2021, as compared to the three

months ended June 30, 2020, primarily as a result of (i) an increase in payroll due to Alpine’s employees being accounted for under

Cerberus, and (ii) an increase in stock-based compensation of $547,216 due to an increase in stock option grants as a result of the Techville,

Clear Skies, and Alpine acquisitions.

expenses increased for TalaTek by $160,322, or 60%, for the three months ended June 30, 2021, as compared to the three months ended June

30, 2020, as a result of an increase in employees resulting in an increase in salaries.

expenses increased for Techville by $92,301, or 61%, for the three months ended June 30, 2021, as compared to the three months ended

June 30, 2020, which reflected only one month of operations following consummation of the acquisition of Techville

on May 25, 2020.

Approximately $105,402 was attributable to Techville’s administrative payroll and benefits.

expenses for Clear Skies and Alpine were $134,943 for the three months ended June 30, 2021.

We did not recognize any operating expenses

for Clear Skies or Alpine for the three months ended June 30, 2020, because the acquisitions were consummated on August 1, 2020 and December

16, 2020, respectively.

Approximately $91,000 was attributable to Clear Skies and Alpine’s administrative payroll and benefits.

of the Six Months Ended June 30, 2021 to the Six Months Ended June 30, 2020

financial results for the six months ended June 30, 2021 are summarized as follows in comparison to the six months ended June 30, 2020:

the Six Months Ended June 30, 2021

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Loss before income taxes

$ (4,194,018 )

$ (3,893,721 )

the Six Months Ended June 30, 2020

Cost of revenue

Operating expenses

Operating loss

Loss from operations

Other income (expense):

Loss before income taxes

$ (1,283,599 )

Interest expense, net

PPP loan forgiveness

Total other income (expense)

$ (2,252,899 )

Cost of revenue

Operating expenses

Operating loss

Other expense

Loss before income taxes

$ (1,035,199 )

$ (1,217,700 )

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the six months ended June30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

the Six Months Ended June 30, 2021

Managed services

Consulting services

Total revenue

the Six Months Ended June 30, 2020

Managed services

Consulting services

Total revenue

Managed services

Consulting services

managed services revenues increased by $1,416,020, or 84%, for the three months ended September 30, 2021, as compared to the three months

ended September 30, 2020, due to to revenues of $985,146 for VelocIT for the 3 months ended September 30, 2021.

We did not recognize

any revenue attributable to VelocIT during the 3 months ended September 30, 2020 because the acquisition consummated on August 12 ,

The additional increase in revenues were a result of additional customers and usage increases within existing customers.

services revenues increased by $319,390, or 98%, for the three months ended September 30, 2021, as compared to the three months ended

September 30, 2020, due to revenues for Clear Skies and Alpine of $695,069 for the 3 months ended September 30, 2021.

The acquisitions

of Clear Skies and Alpine were consummated on August 1, 2020 and December 16, 2020, respectively.

Revenues for Clear Skies was approximately

$141,000 for the 3 months ended September 30, 2020.

managed services cost of revenues increased by $227,171, or 54%, for the three months ended September 30, 2021, as compared

to the three months ended September 30, 2020, and was primarily the result of as a result of the VelocIT acquisition on August 12,

services cost of revenues increased by $215,364, or 1,136%, for the three months ended September 30, 2021, as compared to the three months

ended September 30, 2020, due to cost of revenues for Clear Skies and Alpine.

The acquisitions of Clear Skies and Alpine were consummated

on August 1, 2020 and December 16, 2020, respectively.

Cost of payroll cost of revenues

increased by $1,224,262, or 141%, for the three months ended September 30, 2021, as compared to the three months ended September

30, 2020, as a result of the cost of headcount for the VelocIT, Clear Skies, and Alpine acquisitions as well as an increase in employees

resulting in an increase in salaries in other lines of business due to an increase in demand for our services.

fees remained relatively consistent during the three months ended September 30, 2021 as compared to three months ended September 30,

and marketing expenses increased by $223,538, or 733%, for the three months ended September 30, 2021, as compared to the three months

ended September 30, 2020, as a result of increased public relations and marketing prograams.

Selling, general and administrative

expenses increased by $1,064,955, or 104%, for the three months ended September 30, 2021, as compared to the three months

ended September 30, 2020, primarily as a result of an increase in payroll due to the Company being able to recognize Alpine’s payroll

as well as a portion of VelocIT’s payroll, which both were not recognizeable during the three months ended September 30, 2020,

due to the acquisition dates of December 1, 2020 and August 12, 2021, respectively.

based compensation expenses increased by $858,974, or 219%, for the three months ended September 30, 2021, as compared to the three months

ended September 30, 2020, due to an increase in stock options awarded during the three months ended September 30, 2021.

Loss on write-off of accounts

receivable remained relatively consistent during the three months ended September 30, 2021 as compared to the three months ended September

of the Nine Months Ended September 30, 2021 to the Nine Months Ended September 30, 2020

financial results for the nine months ended September 30, 2021 are summarized as follows in comparison to the nine months ended September

Nine Months Ended September 30,

Security Managed Services

Professional Services

Total revenue

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the six months ended June 30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

decreased for Cerberus by $126,359, or 14%, for the six months ended June 30, 2021, as compared to the six months ended June 30, 2020,

due to one of the Company’s largest customers decreasing its required services compared to the six months ended June 30, 2020.

increased for TalaTek by $413,007, or 26%, for the six months ended June 30, 2021, as compared to the six months ended June 30, 2020,

as a result of (i) an increase in contract revenue from a significant client of approximately $88,000 and (ii) various contracts that

were active during the six months ended June 30, 2021 that were entered into subsequent to June 30, 2020.

increased for Techville by $1,150,843, or 742%, for the six months ended June 30, 2021, as compared to the six months ended June 30,

2020, which reflected only one month of operations following consummation of the acquisition of Techville on May

Approximately $977,000 was a result of Techville’s managed service offerings and approximately $329,000 was a result

of Techville’s miscellaneous hardware sales associated with Techville’s consulting service offerings..

for Clear Skies and Alpine were $1,453,256 for the six months ended June 30, 2021.

We did not recognize any revenue attributable to Clear

Skies or Alpine during the six months ended June 30, 2020, because the acquisitions were consummated on August 1, 2020 and December

16, 2020, respectively.

Virtually all of these revenues were a result of Clear Skies’ and Alpine’s gap and risk assessment

the Six Months Ended June 30, 2021

Managed services

Consulting services

Cost of payroll

Total cost of revenue

the Six Months Ended June 30, 2020

Managed services

Consulting services

Cost of payroll

Total cost of revenue

Managed services

Consulting services

Cost of revenue:

Security Managed Services

Professional Services

Cost of payroll

Total cost of revenue

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the six months ended June 30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

of revenues increased for Cerberus by $471,841, or 92%, for the six months ended June 30, 2021, as compared to the six months ended June

30, 2020, and was primarily the result of Alpine employees being accounted for under Cerberus.

of revenues increased for TalaTek by $212,897, or 20%, for the six months ended June 30, 2021, as compared to the six months ended

June 30, 2020, as a result of an increase in employees resulting in an increase in salaries.

of revenues increased for Techville by $827,333, or 2,053%, for the six months ended June 30, 2021, as compared to the six months ended

June 30, 2020, which reflected only one month of operations following consummation of the acquisition of Techville

on May 25, 2020.

of revenues for Clear Skies and Alpine were $605,694 for the six months ended June 30, 2021.

We did not recognize any costs of revenues

for Clear Skies or Alpine for the six months ended June 30, 2020, because the acquisitions were consummated on August 1, 2020 and December

16, 2020, respectively.

the Six Months Ended June 30, 2021

Professional fees

Advertising and marketing

Selling, general and administrative

Stock based compensation

Loss on write-off of account receivable

Total operating expenses

the Six Months Ended June 30, 2020

Professional fees

Advertising and marketing

Selling, general and administrative

Stock based compensation

Loss on write-off of account receivable

Total operating expenses

Total gross profit

Operating expenses:

Professional fees

4 unchanged sentences

Total operating expenses

on the insignificant nature of the operational activities of Clear Skies and Alpine in comparison to the entity as a whole during

the six months ended June 30, 2021, the Company has combined them into one category, titled Other, for the purposes of this presentation.

expenses increased for Cerberus by $2,178,432 or 131%, for the six months ended June 30, 2021, as compared to the six months ended June

30, 2020, primarily as a result of (i) an increase in payroll due to Alpine’s employees being accounted for under Cerberus, and

(ii) an increase in stock-based compensation of $1,060,549 due to an increase in stock option grants as a result of the Techville, Clear

Skies, and Alpine acquisitions.

expenses increased for TalaTek by $316,333, or 56%, for the six months ended June 30, 2021, as compared to the six months ended June

30, 2020, as a result of an increase in employees resulting in an increase in salaries.

expenses increased for Techville by $357,638, or 238%, for the six months ended June 30, 2021, as compared to the six months ended

June 30, 2020, as a result of only having one month of operations due to the acquisition consummated on May 25, 2020.

Approximately $329,000

was attributable to Techville’s administrative payroll and benefits.

expenses for Clear Skies and Alpine were $293,819 for the six months ended June 30, 2021.

We did not recognize any operating expenses

for Clear Skies or Alpine for the six months ended June 30, 2020, because the acquisitions were consummated on August 1, 2020 and December

Loss from operations

Other income (expense):

Interest expense, net

PPP loan forgiveness

Total other income (expense)

$ (6,146,620 )

$ (2,420,446 )

$ (3,726,174 )

managed services revenues increased by $3,366,657, or 93%, for the nine months ended September 30, 2021, as compared to the nine months

ended September 30, 2020, due to the acquisitions of VelocIT and Technologyville consummated on August 12, 2021 and May 25, 2020,

respectively.

Approximately $91,000 was attributable to Clear Skies and Alpine’s administrative payroll and benefits.

Approximately $2,400,000 was a result of these acquisitions.

The balance is a result of increase in usage and various new

client contracts that were entered into subsequent to September 30, 2020.

services revenues increased by $1,259,621, or 124%, for the nine months ended September 30, 2021, as compared to the nine months ended

September 30, 2020, due to the acquisitions of Clear Skies and Alpine consummated on August 1, 2020 and December 16, 2020, respectively.

managed services cost of revenues increased by $600,174, or 83%, for the nine months ended September 30, 2021, as compared to

the nine months ended September 30, 2020, and was primarily due to the acquisitions of VelocIT and Technologyville consummated on

August 12, 2021 and May 25, 2020, respectively.

services cost of revenues increased by $267,396, or 322%, for the nine months ended September 30, 2021, as compared to the nine months

ended September 30, 2020, due to the acquisitions of Clear Skies and Alpine consummated on August 1, 2020 and December 16, 2020, respectively.

of payroll increased by $2,916,993, or 137%, for the nine months ended September 30, 2021, as compared to the nine months ended September

30, 2020, due to as a result of the cost of headcount for the VelocIT, Clear Skies, and Alpine acquisitions as well as an increase

in employees resulting in an increase in salaries in other lines of business due to an increase in demand for our services.

fees remained relatively consistent during the nine months ended September 30, 2021 as compared to the nine months ended September 30,

and marketing expenses increased by $367,663, or 353%, for the nine months ended September 30, 2021, as compared to the nine months ended

September 30, 2020, as a result of additional spend on public relations.

general and administrative expenses increased by $3,006,054, or 135%, for the nine months ended September 30, 2021, as

compared to the nine months ended September 30, 2020, as a result of primarily as a result of an increase in payroll due to the Company

being able to recognize a full nine months of Clear Skies’ and Alpine’s payroll as well as a portion of VelocIT’s payroll,

which were not recognizeable during the nine months ended September 30, 2020, due to the acquisition dates of August 1, 2020, December

1, 2020 and August 12, 2021, respectively.

based compensation expenses increased by $1,919,523, or 181%, for the nine months ended September 30, 2021, as compred to the nine months

ended September 30, 2020, as a result of an increase in stock options awarded during the nine months ended September 30, 2021.

on write-off of accounts receivable remained relatively consistent during the nine months ended September 30, 2021 as compared to the

nine months ended September 30, 2020.

Capital Surplus

working capital surplus as of June 30, 2021, in comparison to our working capital surplus as of December 31, 2020, is summarized as follows:

working capital surplus as of September 30, 2021, in comparison to our working capital surplus as of December 31, 2020, is summarized

September 30,

Current assets

1 unchanged sentence

Working capital surplus

increase in current assets is primarily due to increases in cash and cash equivalents and accounts receivable of $527,719 and $617,769,

respectively.

The increase in current liabilities is primarily due to the increase in stock payable and the current portion of lease

liabilities of $114,750 and $94,781, respectively.

cash flows for the six months ended June 30, 2021, in comparison to our cash flows for the six months ended June 30, 2020, can be summarized

Six months ended June 30,

decrease in current assets is primarily due to a decrease in cash and cash equivalents of $2,467,451, offset by an increase in accounts

receivable of $1,261,999.

The increase in current liabilities is primarily due to the increase in accounts payable and accrued expense,

and the current portion of lease liabilities of $684,355 and $157,720, respectively.

cash flows for the nine months ended September 30, 2021, in comparison to our cash flows for the nine months ended September 30, 2020,

can be summarized as follows:

Nine months ended September 30,

Net cash used in operating activities

$ (4,312,312 )

$ (1,157,976 )

Net cash provided by investing activities

Net cash provided by financing activities

Increase in cash

cash used in operating activities was $2,646,739 for the six months ended June 30, 2021 and was primarily due to cash used to fund a

net loss of $3,893,721, adjusted for non-cash expenses in the aggregate of $2,013,960 and additional cash outlaid by changes in the levels

of operating assets and liabilities, primarily as a result of an increase in accounts receivable.

Net cash used in operating activities

was $740,120 for the six months ended June 30, 2020 and was primarily due to cash used to fund a net loss of $1,385,247, adjusted for

non-cash expenses in the aggregate of $742,507, partially offset by cash generated by changes in the levels of operating assets and liabilities,

primarily as a result of an increase in accounts payable.

was no cash used in or provided by investing activities for the six months ended June 30, 2021.

Net cash provided by investing activities

of $65,037 for the six months ended June 30, 2020, was due to cash acquired in the Techville Acquisition.

cash provided by financing activities for the six months ended June 30, 2021 was $3,174,458, which was primarily due to cash received

from the sale of the Company’s common stock of $3,250,000.

Net cash provided by financing activities for the six months ended June

30, 2020 was $841,907 and was due to cash received from the sale of the Company’s common stock of $140,000 and proceeds from PPP

loans of $709,600.

Increase (decrease) in cash

$ (2,467,451 )

cash used in operating activities was $4,313,312 for the nine months ended September 30, 2021 and was primarily due to cash used to fund

a net loss of $7,124,149, adjusted for non-cash expenses in the aggregate of $2,631,683 and additional cash outlaid by changes

in the levels of operating assets and liabilities, primarily as a result of an increase in accounts receivable and other current assets.

Net cash used in operating activities was $1,157,976 for the nine months ended September 30, 2020 and was primarily due to cash used

to fund a net loss of $2,420,446, adjusted for non-cash expenses in the aggregate of $1,170,094, partially offset by cash generated by

changes in the levels of operating assets and liabilities, primarily as a result of an increase in accounts payable.

cash provided by investing activities of $662,176 for the nine months ended September 30, 2021, was due to cash acquired in the VelocIT

Net cash provided by investing activities of $254,180 for the nine months ended September 30, 2020, was due to cash acquired

in the Techville and Clear Skies Acquisitions.

cash provided by financing activities for the nine months ended September 30, 2021 was $1,182,685, which was primarily due to cash received

from the sale of the Company’s common stock of $3,250,000 and offset by the payment of loans of approximately $2,000,000.

Net cash provided by financing activities for the nine months ended September 30, 2020 was $1,443,158 and was due to cash received

from the sale of the Company’s common stock of $790,000 and proceeds from PPP loans of $709,600.

accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as

a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business.

At June 30, 2021,

At September 30,

2021, the Company had an accumulated deficit of approximately $11,013,000 and working capital surplus of approximately $646,000.

months ended June 30, 2021, the Company had a loss from operations of approximately $3,762,000 and negative cash flows from operations

of approximately $2,647,000.

Although the Company is showing positive revenues and gross profit trends, the Company expects to incur

further losses through the end of 2021.

For the nine months ended September 30, 2021, the Company had a loss from operations of approximately $6,920,000 and negative

cash flows from operations of approximately $4,312,000.

Although the Company is showing positive revenues and gross profit trends, the

Company expects to incur further losses through the end of 2021.

date the Company has been funding operations primarily through the sale of equity in private placements and revenues generated by the

Company’s services.

During the six months ended June 30, 2021, the Company received $3,250,000 from private placements of the Company’s common stock.

During the nine months ended June 30, 2021, the Company received $3,250,000 from private placements of the

Company’s common stock.

on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development and corresponding

3 unchanged sentences

Accounting Policies and Estimates

significant accounting policies are more fully described in the notes to our condensed consolidated financial statements included

herein for the quarter and six months ended June 30, 2021 and in the notes to our consolidated financial statements included

in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 31, 2021.

significant accounting policies are more fully described in the notes to our condensed consolidated financial statements included herein

for the quarter and six months ended June 30, 2021 and in the notes to our consolidated financial statements included in our Annual Report

on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 31, 2021.

Value Measurement

68 unchanged sentences

to be generally one year or less.

The Company’s credit terms to clients generally average thirty days, although in some cases payments are required in 15 days.

The Company’s credit terms to clients generally average thirty days, although in some cases payments

are required in 15 days.

Company does not disclose the value of unsatisfied performance obligations for contracts with original expected duration of one year

Disaggregation

consists of the following by service offering for the six months ended June 30, 2021:

consists of the following by service offering for the nine months ended September 30, 2021:

Primary Sector Markets

1 unchanged sentence

Major Service Lines

Gap and Risk Assessment

Managed Security Services

consists of the following by service offering for the six months ended June 30, 2020:

Secured Managed Services

SOC Managed Services

Technical Assessments

Forensics & I/R

Other CyberSecurity Services

consists of the following by service offering for the nine months ended September 30, 2020:

Primary Sector Markets

1 unchanged sentence

Major Service Lines

Gap and Risk Assessment

Managed Security Services

Secured Managed Services

SOC Managed Services

Technical Assessments

Forensics & I/R

Other CyberSecurity Services

part of ASC 606, the Company has adopted several practical expedients including the following:

21 unchanged sentences

new and recently adopted accounting pronouncements are more fully described in Note 2 to our unaudited condensed consolidated financial

statements herein for the quarter ended June 30, 2021.

statements herein for the quarter ended September 30, 2021.

Sheet Arrangements

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis