Code Rebel Corporation (NASDAQ:CDRB) CEO Interview


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Code Rebel Corporation
(NASDAQ:CDRB)
Chairman and CEO: Arben Kryeziu

Aegis identity Software
CEO: Bob Lamvik
Executive Chairman: Ralph Armijo

INTERVIEW TRANSCRIPTS:

WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Analyzer.  Joining us today are Arben Kryeziu, CEO for Code Rebel Corporation as well as Bob Lamvik, CEO of Aegis and their company’s executive chairman Ralph Armijo. The company has just announced a proposed merger. I appreciate you taking the time to join us today gentleman.  Starting off can you give us an overview there of the transaction?

Arben Kryeziu: Sure. So, I’ll start it. We basically came together, Aegis and Code Rebel and looked at the opportunity where both companies stand and what a merger and what this transaction would do for us and what are the benefits that basically would come together when both companies merge. And one of them is a very senior, strong executive team that would help grow the combined company. Also, the location in Denver which is central and allows us to grow our talent base and it makes it easier for us to actually hire the right talent and deploy better sales and support strategy. Also we have Code Rebel side multiple IP inventory, like load balancer so our DRM Solution that can basically help Aegis deploy their sales strategy at an expedited rate and give them access to our development team as well.  The integration team is a spinoff of what we acquired last year, which allows us to also scale up the deployment of Aegis as well as Code Rebel.

Hence the sales team over at Aegis allows us to truly implement a sales funnel process. This execution has been on – and we just saw that a perfect puzzle fit in regards of what the elements were and how they actually synchronized together. So, we thought this is going to be a long discussion around the operation and how to put pieces together, but within the first couple of hours we were very pleased. We saw that all the pieces were almost meant to be in regards to the ecosystem that Aegis is currently attached to applies itself towards our asset management and remote access solution.  So for you to be able to even access any system you have to go through an authentication process. Aegis has created one of the strongest authentication systems I’ve seen.  And I saw a perfect path foundation between having their team, their knowledge as a support system, but also we are giving them the access of our enterprise clients so that we can actually grow the vertical enterprise and Symtech and other verticals that we have at Code Rebel as a sales funnel for Aegis with our current inventory of clients. I saw an interesting mixture that created the correct cake that basically allows us to expedite our sales and expedite our growth, but also have that expertise and knowledge that allows us to be this confident.

WSA: Certainly and can you guys talk a little bit about what the new management structure will be?

Bob Lamvik: Sure, Ralph why don’t you start and maybe introduce yourself and your background and then I will do the same for myself.

Ralph Armijo: Okay, sure. So, Juan this is Ralph Armijo speaking.  And so as we talk about the management structure and the experience that Arben mentioned, I think it is clearly one of our major success factors is our experienced management team. My particular background is 18 years in corporate America including IBM and Tektronix.  And then since 1993, I’ve been an entrepreneur and this current company is my fourth start-up.  So I am taking companies from starting with two employees and growing them over 300.

Taking my first company public, acquiring other companies, creating wholly owned subsidiaries, spinning them out, ultimately selling one company to Microsoft and then becoming strategy partners with major players like Sun Microsystems, which is where Bob Lamvik and I met who’ll be talking next.

So I have lot of experience in corporate America and I have for the last 20 years or so in entrepreneurship and starting companies, taking them from start-up position all the way into public entities and then growing them to significant valuations. So that is my background and one of the things that I would just say if I could before we turn it over to Bob is that, as I look at this relationship and the opportunity here, I think there were probably four things that truly make a difference which I think are the success factors.

One is the experienced management team, which you are hearing about now, the other is the significant market needs that there is in this whole cyber security market space, which we will talk more about.  And I think it’s clearly known in the industry and in the market place by individuals and corporations the need for cyber security and the kind of solutions that we provide. The third point is that within our vertical market, focussed on education, we have significant market leadership credibility with the solutions that we have created and that we have brought to market.  And that is something that we will again, will be talking systematically about.  And then ultimately we have improved the solutions, so we have been validated in the markets, to the major universities and K12 institutions using the solutions.

When you add up what I consider the four keys to success, the experienced team, the market need, market leadership and credibility and proven solutions, we believe we can make a major impact, in bringing in the two organizations with Code Rebel and ourselves, bringing in a technology platform that really supports these key factors, and then having a professional services firm like ThinOps which was acquired last year, is a great implementation arm as we start to move forward. With my background experience and the vision that I had for this company, these success factors were key to our joint merger.  So, with that being said I will turn it over to Bob to give his background, and Bob will be responsible for the day-to-day implementation of success of the organization going forward.

Bob Lamvik: So, I just wanted to share my excitement as Arben and Ralph both already presented.  This is going to be a great combination.  We are working hard to make sure that in this case one plus one equals three. To introduce myself financially on sort of the Wall Street side, I have been involved with the prior tech company IPO and then I was also involved in taking another NASDAQ company private.  So I have got some fair amount of experience on the financial side.  I think the real value though that I bring is delivering Identity software on the technology side. I had been a Silicon Valley veteran for most of my career. Ralph as he mentioned, during the role I had at Sun Microsystems, I was responsible for most of the software activity in North, South, and Central America.  I had a large group and a large revenue responsibility.

One of my assignments there was running the ISP reseller council of which Ralph ultimately became President of. That former company was really good at delivering Identity Management Solutions into the Ed Tech vertical, and we kept a very close eye on that and we are proud of our affiliation in that regard. So, the catalyst for our starting this identity was Oracle’s acquisition of Sun Microsystems.  We made the bet that there would be a market opening based on that activity. We started the company in October 2011, and have been running that successfully ever since. Identity management as a solution for higher education initially and now adding on K12 is really prevalent.  Lots of opportunities in the market place which I’m sure as we continue this podcast, we will dive a little bit deeper in there. But basically that, with Arben’s experience, mine and Ralph’s put together, we’re very confident about the success on going.

WSA: Well, great. So, what are some of the key trends that you will be focusing on right now in this sector and how is the company uniquely positioned especially with the acquisition and past acquisition of Dentsu to capitalize?

Bob Lamvik:  Well how about if you do the trends in the market right now and then I’ll highlight just a couple of the unique aspects of identity in education?

Ralph Armijo:  Perfect again this is Ralph speaking.  And I think the bottom line is where you see us, we have created technology in the identity and access management space that is very significant and it is leverageble in many, many areas.  And so what we intend to do if you kind of divide up the roles from an operational point of view, it’s important to understand how we’re going to grow this business, where are we going to get our growth and our profitability as we go forward. There are only two areas, now Bob is going to talk about the systematic products in our organic growth in – my area of responsibility is to make sure that together Arben and I help raise the capital that’s needed for the organization. But also I am going to specifically be looking at leveraging that technology into new potential vertical markets because it’s needed across all verticals.  In addition our primary next steps for growth is going to be acquisition strategy.  So with organic growth and acquisition strategy and leverage of our technology in new vertical markets we have a tremendous market opportunity and vision of what we can create.

So when you start adding and building out new technologies out of existing technologies that we have within Aegis Identity the technologies that come with Code Rebel and the technologies that we may be working on through the acquisition, will really give us a foundation to really leverage into this whole cyber security identity and access management space, we’ll focus on education and leverage in new verticals. That’s what we see, when you look at education as a whole and I’ll speak to it as a high level, right now we see that although there’s some, we’ve been identified by Gardner as one of the key players as a solution provider in the education space.

And we are identified with the major corporations like Oracle and Microsoft and IBM and the reason why we’re identified there is because we’re 100% focused today in education.  We have a solution that Bob is going to talk about, what we’ve created and why it’s differentiated.  And we’ve been able to make a big impact in the market in a short period of time because of our focus in the quality of solutions that we built.  And then higher education is over 4800 universities just in the US and every one of them is going to need this solution, every one of them in some form or fashion is doing this today mostly in home grown solutions that ultimately are not meeting the requirements. When you look at K12 there’s over 13,500 school districts and there is badly a need of the technology infrastructure that‘s needed to be able to move K12 education in an effective way to utilize explosive growth of technologies in the market place.

So despite the explosive growth in the market place our internet technology which is driving a higher need for utilization of identity and access and controlling who is getting access to what when you look at that, then actually the risk that’s associated with the wrong people getting to the data.  There’s a tremendous need for the solutions that we bring to the market. So that’s what’s really driven us today in higher education if we believe that it’s not a focused market by most players.  It is by us and we have been able to get significant traction. We also believe that a high level in need for identity and access in cyber security as a whole is driven by the explosive growth of the Internet and risk associated with, as I mentioned before the wrong people getting access to the wrong information. And those are the areas that we focus on.  So with that being set at a high level, that’s going to drive in the vision of both organic growth, our acquisition strategy and the leverage of our technologies and the other verticals. So with that being said Bob I’ll turn it over to you and you can talk more specifically about how we deal with this on a daily basis in our focus market.

Bob Lamvik:  I appreciate that Ralph.  Identity and access management is our sector.  As Ralph pointed out there is so much activity going on in this space because digital education is being enhanced quickly at all levels.  We all know and can sense that online education, you know, there’s other things such as bringing your own device on to campus, which is a newer activity let’s say with tablets and smart phones.  And so Higher Ed in particular K12 also has a lot of work to do. I have up on my screen right now a very new article from March EdTech magazine and the headline is ‘How Higher Ed Is Coping as a Cyber security Target in 2016’ and according to Symantec, which just came out with that report in May 2015: Education ranks third amongst the most breached vertical sectors in 2015.

So these are big research institutions, many times a lot of real important stuff behind the firewall, so schools are really having to lock this down. We are in this cyber security space, we are a component, of course an overall cyber security deployment will require many logical and physical types of security apparatus, that we’re a key component in that which is identity and access management.  So this point of me speaking, one of the big questions you ask was what’s so unique about this. The number one thing that’s unique about identity and access management in the Ed Tech vertical is the fact that colleges, universities and K12 districts collaborate.  And now it’s contracted against or contrasted against corporations that compete with one another.

That may sound like a simple point, the longer you’re in this market place the more you realize it’s the biggest point you could make, because what happens is, there’s always a balance between openness and security. So this is where we get into our solution some of the real unique attributes in there.  The first one that comes to mind is and, I don’t want to go too deep here and certainly don’t want to go on the technical side but most anyone that has knowledge of identity management knows that most of the deployments get broken down into what role one is in.

So role based identity management is a really contemporary way to deploy.  And so in a corporation you’re going to be in a role, you’re going to work in that group or you going to be a manager of this other group and then you get access permission assigned based on that role.   Ed tech it’s really interesting and the fact that identity is moving to multi role really quickly and short of the high speed you had around that, you just to envision a student as the primary role that also works in the bookstore on Saturday, employee role and then grade some papers you know on Fridays, faculty role. And so when architecture meets these different market conditions it can either be an easy and smooth or it can be hard.

So bringing the commercial identity platform in the Ed tech sort of runs into some things like this, which is multi role use case.  There’s others, the only other one I would highlight in the interest of time, is there’s really no other market segment that has the identity turnover that Ed tech does i.e. a large institution may have ten thousand incoming freshmen and ten thousand exiting seniors every year, that’s a turnover rate of digital identity which could be greater than any corporation I have no doubt.  Maybe, in the government, certainly a commercial institution would not have that case. Basically we are in the identity and access management, right now were focused on Ed tech, the identity – hopefully I’ve explained the attributes of access management which has to do with something as simple as a user name and password, multi-factor identification, single sign on, identity federation and all of those types of things but for this audience I think I’ll – I’ll leave it right there.

WSA: Great, and what are some of the key goals and milestones the team is hoping to accomplish over the course of the next 6 to 12 months?

Bob Lamvik:  Ralph do you want to take that…?

Ralph Armijo:  If I could respond just briefly and then Arben feel free to chime in as well. One of the things that we have to be very careful with at this juncture is that we have not yet filed our property in this one.  So, although we are operating under a joint operating agreement and until final shareholder approval we are not at liberty to disclose any financial information at this juncture because it’s not public information.  We hope we get into market place within the next 30 or 45 days and then we will be prepared to talk about that. I think what I would say at this juncture is that, just to reiterate, we have a strong customer base now. Our strategy is very clear for us and there are three points to this strategy.

Point number one is we expect to dominate, I think globally to the market, to the areas that we currently serve. That’s point number one.  Point number two is that we want to start carefully and we want to validate the solutions that we’ve created into the market place.  And then point number three, we have to scale fast once it’s validated. In higher education, we have validated the solutions, and we have done that over the last four and half years with major universities and now we are ready to scale fast. In K12 we are in the process of continuing the validation process in major market environments around the country.  So soon we will be in the position to start the scale that fast as well.  Today that’s in the validation stage, with the Code Rebel solutions – my position, again, Arben can chime in on this, some time on this. We believe that it has the opportunity to really be a dominant force when it’s been validated by mainly major customers, both in the commercial space and in the education space.

So we are now ready to take that and scale that as well. And it is very important for you to understand the differentiation there because number one we don’t just develop a product and bring it to market and hope that it’s going to sell. We very carefully validate it to make sure we do what we are expected to do, that the customers are getting what they want and once we have done that, there’s key customers around the country and around the world then we scale fast.  That’s the position orientated in overall organisation.  With that set as a background we expect some significant growth to appear over the next 12 to 18 months and beyond.

Interviewer: And are there any key drivers that you wish perhaps investors and the financial community better understood about the company and recent transaction.

Bob Lamvik: Can I take that Ralph, do you mind?

Ralph Armijo:  Yeah, sure…please.

Bob Lamvik:  Yeah, I think Arben at the onset brought up some of those points, the Code Rebel technology in IP base is going to get us into cloud based services at an accelerated rate.  Now where that’s going to help us in an expansion into smaller universities and acceleration in our K12 roll out.  So I would say that’s one very important point back to that one plus one equals three.   I would say number two is we are starting some geographical expansion and we have already had some activity outside the United States that’s continuing.  I don’t want to really name names right now, but I think that’s going to accelerate with the merging of our channel activities, with the existing channels activities Code Rebel had on a legacy. I would say that’s probably the three things that the IP integration is going to accelerate. We will be able to make faster moves internationally and we’ll be able to have an enhanced channel deployment very quickly based on the merger.

WSA: Sure, so once again joining us today are Bob Lamvik, the current CEO of Aegis, and the company’s executive chairman Ralph Armijo, as well as Code Rebel Corps’, CEO Arben Kryeziu.  Code Rebel currently trades on NASDAQ ticker, CDRB; currently trading at 4.64 share and the market cap currently is about 56 million. And before we conclude today to recap some of your key points today gentleman, why do you believe investors should consider the company as a good investment opportunity today?

Arben Kryeziu: I think what you should expect from the company going forward is that the qualities that we have which we believe are the key success factors, are an experienced management team, we have a very significant market need for what we do.  We have a market leadership position and credibility in the space already and we have proven solutions.  And what that’s going to allow us to do is to effectively grow organically.  It’s going to allow us to grow globally and it’s going to allow us to effectively execute on M&A activity.  In the combination of those we believe we will create significant value for the shareholders.

WSA: Well we certainly look forward to continuing to track the company’s growth and report on the upcoming progress.  And we would like to thank you guys for taking the time to join us today and update our investor audience on Code Rebel and Aegis, it was great to have you on.

All: We appreciate the opportunity.

 

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