ALMONTE, Ontario, Dec. 23, 2020 (GLOBE NEWSWIRE) — 3 Sixty Risk Solutions Ltd. (“3 Sixty” or the “Company”) (CSE: SAFE) (OTCQB: SAYFF) (FSE: 62P2) is pleased to provide an update regarding its business and operations to company stakeholders.
Dear Stakeholders of 3 Sixty Risk Solutions Ltd.:
Please let me introduce myself: my name is David Beck. I am the Chairman of the Board of Directors (BOD) at 3 Sixty Risk Solutions Ltd. (‘3 Sixty’). I am writing this letter to all company stakeholders as an extension of, and further to a press release dated November 23, 2020 entitled ‘Business Update’. In April 2020, I joined the 3 Sixty BOD and was subsequently appointed to Chairman in September. While my priority and statutory duty is to work to the benefit of all stakeholders of 3 Sixty, with 16.2 million shares, I am also the second largest shareholder of 3 Sixty.
In October, I was joined on the BOD by Andrew Ellis and Rita Simkin. Andrew and Rita have since taken active roles in the company as interim CEO and interim COO, respectively. Andrew and Rita join existing BOD members, myself, Christian Grunt and Nitin Kaushal. Further, 3 Sixty founder, Thomas Gerstenecker, resigned as CEO and Director.
Before I elaborate on details, it is important to state two things. First, all current BOD members are not receiving any cash or equity compensation. We are accruing modest cash and stock compensation, which will be honoured only when we are confident of the company’s financial position, including satisfaction of critical payables. Second, the company’s management and employees continue to deliver on customer commitments, build a pipeline of new business opportunities and produce revenue.
Our Priority – Enabling trading on the CSE
The BOD is focused on ensuring the Company files all outstanding financial statements, MD&A and other continuous disclosure documents in order to apply for a revocation of the current cease trade order (CTO) imposed against 3 Sixty’ securities by the Ontario Securities Commission on July 15, 2020. It is important to understand that the CTO impacts more than our equity shareholders. It impacts our ability to recruit and retain key employees, pay and work with dedicated suppliers, and service and build customer relationships and we are working diligently to rectify the situation.
In order to have the CTO revoked so that the company’s shares can again trade on the Canadian Securities Exchange, 3 Sixty is required to not only file its audited 2019 financial statements (including refiling Q1, Q2, and Q3 of 2019) and related documents, but also interim unaudited financial statements for Q1, Q2, and Q3 of 2020. While the company has largely completed financial statements for 2020, full completion of these statements cannot occur until ending accounting balances for 2019 are known and audited. Understandably, the completion of our 2019 audit is critical.
To provide context, 3 Sixty became a public company in January 2019. As such, 2019 marks the company’s first year to be audited as a public company. It is also the first year the company has engaged with our auditor MNP LLP. MNP has been a patient partner in working through this audit process. However, please understand, MNP can only audit information that 3 Sixty provides. Unfortunately, during its rapid growth, and in particular, growth through acquisition in 2018 and 2019, 3 Sixty management did not effectively integrate the disparate entities. This has caused enormous effort to correct.
These efforts have largely paid off with the exception of one situation. We are unable to locate records related to one of the company’s subsidiaries, David Hyde and Associates which are required in order to complete the financial statements audit. While on the surface this may seem worrisome, on a materiality basis, David Hyde and Associates represented roughly $2 million of the approximately $30 million of gross revenue for 2019. MNP is acutely aware of this situation, and continues to work daily with 3 Sixty in the upmost professional manner.
Our Future – Building a World Class Security Services Company
As management and BOD are completing our 2019 audit, we are working diligently in parallel with the task of defining our go-forward business strategy. Fortunately, our experience and strength of the company’s platform should enable the company to demonstrate immediate results. Looking at each of our business units, I provide this brief summary:
- Current strengths – Significant contracts with name brand entities.
- Future opportunities – Outsourcing of non-core police services, and expansion into offering complementary high margin security solutions.
- FSS (Financial Security Solutions)
- Current strengths – Long term established business relationship with one of Canada largest Schedule 1 banks.
- Future opportunities – Expansion of current customer relationship and securing additional Schedule 1 bank relationship.
- Secure transport
- Current strengths – Differentiated and proven logistics and transportation service offering with highly loyal clientele.
- Future opportunities – Targeted niche and high product value markets that leverage our expertise in climate controlled and segregated handling of customer goods.
Our Appreciation – 3 Sixty Stakeholders
Going forward, we seek to improve communication both with internal and external stakeholders of 3 Sixty. As such, we are committed to scheduling a well overdue shareholders meeting at the earliest date possible following the expected lifting of our CTO.
On behalf of your BOD, we look at this holiday season with great appreciation for the support we have received and continue to receive from all stakeholders. This is not an easy undertaking. We wish we had more progress to communicate to you at this time. However, please understand the challenges we are going through combined with the opportunities available to 3 Sixty we see as only building our resolve.
I sincerely thank you for your support and patience,
Chairman, 3 Sixty
About 3 Sixty Risk Solutions Ltd.
3 Sixty Secure Corp, a wholly-owned subsidiary, is a multi-national security services company. 3|Sixty proudly offers customized security solutions to public and private sector clients across the globe. Services include: cash in transit; high value storage; protective services; secured transport; high risk training, personal protection, and security risk management consulting. 3 Sixty has a staff of over 600 employees and operates a fleet of over 120 vehicles, with seven secure facilities nationwide and a combined security footprint of approximately 35 million square feet of patrolled area across Canada.
For further information regarding the Company, please contact: