Strategy for growth of computer forensics is an excellent question.
You are correct that the business potential of computer forensics is enormous. In my Letter to Stakeholders previously the business model of a publicly-traded law firm was explored in some detail. There is good reason to believe that Homeland Forensics Inc would become very important in the future in countless legal matters just by employing a large number of the best computer forensics professionals in a 'partner' capacity similar to the structure of a law firm and devoting the company entirely to the needs of clients who have urgent legal problems requiring complex computer investigations. Owners of publicly-traded unrestricted shares of the company's stock would participate as limited partners, in effect, with dividends being the mechanism by which both forensics partners and limited partners receive net profits from the casework undertaken for clients.
This professional services business model is not possible within the PivX parent company today because the capital structure and debt load of the legacy company are designed for a product-based business, not a services-based one. This is a core reason for the spin-out of Homeland Forensics Inc by way of the soon-to-be-declared stock dividend. The business of 3Me Inc is product sales, in keeping with the requirements and the limitations imposed by the present financial condition and capital structure of the company.
There was no point in raising new capital just to help assemble a team of legal services professionals and forensics experts around the Homeland Forensics business name. To justify raising new capital required a product-based business strategy, which 3Me now has, and the spin-out enables the formation of the forensic services law firm business model in addition to setting the stage for low-cost further spin-outs of new technology companies from Homeland Forensics Inc.
With zero debt and initial seed capital provided by the parent company, the Homeland Forensics team will no longer have any barriers to attracting and keeping top forensics talent. We had limited potential to do this before because forensics professionals are not interested in joining a company that has significant legacy debts when there is almost no capital overhead required for the professional services business model of a law firm.
My expectation is that the debt-free Homeland Forensics spin-out will be able to realize the objective of assembling a world-class team of experts who are dedicated to providing litigation support and computer investigative services as one of the facets of the long-term growth business. Our expertise from working in this field positions us to consistently innovate in many areas of technology and to identity very important emerging business needs that should become the focus of additional spin-out companies in the future.
A law firm usually does not apply for patents, develop software and Internet services, launch new hi-tech startup companies, and pioneer new consumer-, corporate-, military-, and government-oriented businesses but there is no reason for a forensics company not to do these things because we do not occupy a position as legal counsel to our professional services clients. Therefore, the conventional law firm partnership business model only provides a reference point for thinking about the guaranteed future profit- and growth-potential of Homeland Forensics. With proper risk management and this spin-out business strategy for all non-core inventions or new business ideas, so that new capital can be raised for each new business venture as-needed without diluting any of the existing owners of Homeland Forensics Inc, not even future business failures within the additional spin-outs of Homeland Forensics will jeopardize the viability and growth potential of the core forensics business. Protecting that business and the people who invest their assets and their careers in it is the most important strategic imperative from which countless new opportunities will emerge.
The exciting consumer product-oriented business of 3Me Inc will, meanwhile, provide Homeland Forensics with a core investment asset that is expected to become a future source of capital for funding these spin-outs and attracting top forensics talent. As such from my perspective what we have designed and are presently launching is a 'reverse spin-out' of the core innovative engine of the company. The 3Me business and new operating divisions such as Adia Nutrition will retain an ownership stake in the innovation engine that it is spinning out, but in actual fact the 3Me business is going to become a productive asset for the shareholders of the spin-out first, while we continue to lay the intellectual property and business foundation required plus design and launch the forensics product spin-outs, individually capitalizing each one separately in non-dilutive share issuances and stock dividends.
This is the strategy that ensures success before the first move is made, and I believe it is profoundly innovative that this has been achieved under the adverse business conditions that existed at PivX Solutions as of June 2006 when I agreed to become CEO and chief architect of this turnaround plan. People have been saying for several years that they have never seen anything like this before and that it will become the model case study of the correct way in which to turn around and recapitalize an insolvent tech company while avoiding dilution or other negative impact on the company's shareholders. Books and magazine articles and a television documentary are distinct possibilities, just to tell this remarkable business turnaround story in its full and fascinating detail and to share the strategic business ideas with others who could benefit from them. A patent application for some of these innovative ideas is also being worked on presently, following in the footsteps of the many world-class accounting and financial services firms who have successfully patented novel systems and methods of value to their clients who seek tax reduction mechanisms or new and better ways to execute their proprietary business strategies within complex regulatory environments and global financial markets.
Sincerely,
Jason Coombs
JCoombs@HomelandForensics.com
