Attached files
| file | filename |
|---|---|
| EX-99.2 - PRESS RELEASE DATED DECEMBER 20, 2016 - root9B Holdings, Inc. | rtnb_ex992.htm |
| EX-10.1 - STOCK PURCHASE AGREEMENT - root9B Holdings, Inc. | rtnb_ex101.htm |
| 8-K - CURRENT REPORT - root9B Holdings, Inc. | rtnb_8k.htm |
Exhibit 99.1
Dear
Fellow Shareholder,
Much
has changed since our last letter, beginning most prominently with
our new name: root9B Holdings, Inc. This new name reflects our
commitment to re-focus our business to that of a pure-play
cybersecurity company based on the operations of our wholly-owned
subsidiary, root9B, LLC. We believe this is the best path forward
to expand our operations and enhance the long-term value of your
investment.
To this
end, we are undertaking a series of initiatives that we expect to
complete in 2017. These initiatives will be led by Dan Wachtler,
President and COO of root9b Holdings, and Eric Hipkins, founder and
CEO of root9B, LLC.
Our top three priorities involve exploring the divestiture
and/or downsizing of our non-cybersecurity assets: IPSA
International, Control Engineering, and Business Advisory
Solutions.
The
cash-intensive nature of IPSA and the volatile revenue swings
within the AML practice suggest we explore the potential sale of
this asset as a way to generate additional, non-dilutive capital to
strengthen our balance sheet and fund the growth of our
cybersecurity business. Dan Wachtler is leading this assessment and
we have engaged an investment banking firm to assist in this
review.
We are
also pursuing the sale of Control Engineering (“CEI”).
A small part of our current operations, CEI is the last remaining
asset of the energy business strategy taken on by our former
management team, and there simply are no synergies with our current
cybersecurity focus.
Likewise,
our Business Advisory Solutions (“BAS”) practice is a
long-time legacy operation of our former Premier Alliance
founders. BAS currently operates in highly-competitive
markets with low barriers to entry, and one of its core business
lines relates to Sarbanes-Oxley and other compliance-driven work,
which tends to be seasonal in nature. We are reviewing several
options with respect to the operations of BAS.
We want
to emphasize that these are good companies with promising futures.
However, they are not synergistic with our “pure-play”
cyber focus.
We are also centralizing our operations, and enhancing our internal
capabilities. Most prominently, we have relocated our
corporate headquarters from Charlotte, NC to Colorado Springs, CO,
which is home to root9B. This move is symbolic of our evolution
into a pure-play cybersecurity company, and a reflection of our
commitment to this endeavor. We are also consolidating a number of
corporate support functions in order to improve efficiencies and
reduce costs.
In late
November, William (“Bill”) Hoke, CPA joined the company
as Chief Financial Officer. Bill is a seasoned financial and
operating executive who brings more than 30 years of relevant
experience to root9B Holdings, including leading Nasdaq-listed
companies. His strong track record with acquisitions and
integration, and his experience in IT and SEC financial reporting
makes Bill an ideal fit for our organization, and we welcome him
aboard.
We will
continue to consider the most prudent means of raising additional
capital in order to fund the growth of root9B. This includes
funds raised from any potential sale of assets, as referenced
earlier in this letter. It is worth noting here that the
Company’s executive management team and the Board of
Directors, in the aggregate, own over 25% of RTNB common
stock.
In
response to feedback from our investors, we are also pursuing the
uplisting of
our stock to a national exchange. In this regard, we
announced a 1:15 reverse stock split that became effective on
December 5, 2016. We are currently trading under a temporary symbol
(RTNBD) for a period of 20 days, after which we will revert back to
RTNB. This reverse split now allows us to pursue a listing on the
Nasdaq Capital Market which, in turn, would elevate our profile
among a broader range of institutional and other
investors.
Our greatest asset is our people. At root9B, we have
assembled extraordinary talent from the Department of Defense,
intelligence community, law enforcement and the commercial sector.
Together, we have developed and deployed multi-platform products
and services for CIOs, CISOs and IT security teams facing rising
cyber threats and a severe cybersecurity workforce shortage. This
includes the first-ever commercial Security-as-a-Service and HUNT
(Active Adversary Pursuit) Model, the first-ever agentless HUNT
Platform, and more than 15 organic threat-defense software
capabilities. root9B also opened the Adversary Pursuit Center
(“APC”) in Colorado Springs, a first-of-its-kind, 24/7
manned operations facility. The ability to offer this level of
expertise to CIOs, CISOs, and IT security teams who are struggling
with cyber operations and threat defense in the face of a severe
cybersecurity workforce shortage is what really sets root9B apart.
It also embodies the vision of root9B’s founder, Eric
Hipkins.
root9B
was recently named the #1 company on the Cybersecurity 500 for the fourth
consecutive quarter, and continues to be recognized as a leader and
pioneer in the Manned Information Security and Adversary Pursuit
Operations HUNT market.
Although challenges remain, we believe
we are taking the necessary steps to meaningfully address the
myriad of opportunities inherent in the global cybersecurity
market.
We appreciate your ongoing support and pledge to continue to
champion your investment.
Respectfully submitted,
/s/
Joseph J. Grano, Jr.
Joseph
J. Grano, Jr.
Chairman
& CEO