Cipherloc Announces $6.4 Million Offering of Common Stock

Rhea-AI Summary

Cipherloc Corporation (OTCQB:CLOK) announced a Securities Purchase Agreement projected to yield approximately $6.4 million in gross proceeds. The offering will involve around 35.8 million shares of common stock and warrants at a sale price of $0.18 per combined share and warrant. This fundraising is intended to enhance the company's resources for commercializing its quantum-resistant encryption technology. The deal is bolstered by a commitment from officers and directors to a 180-day lock-up period post-offering.

Positive

• Projected gross proceeds of approximately $6.4 million to enhance commercialization activities.
• Offering includes both common stock and warrants, potentially increasing future capital.
• Support from officers and directors with a 180-day lock-up agreement, indicating confidence in the company's direction.

Negative

• Issuance of approximately 35.8 million shares could lead to shareholder dilution.
• The pricing of shares at $0.18, which is 80% of the previous closing price, may reflect market concerns.

AUSTIN, TX / ACCESSWIRE / April 7, 2021 / Cipherloc Corporation (OTCQB:CLOK) ("CipherLoc"), a developer of advanced encryption technology, today announced entry into a Securities Purchase Agreement with gross proceeds to the Company expected to be approximately $6.4 million before deducting offering expenses payable by the Company.

Said David Chasteen, Chief Executive Officer, "We believe that post-quantum encryption will be one of the largest and most critical technology migrations of the next several years. We intend to remain true to our lean operating approach, but will now have the capital resources to build out Cipherloc's organization and further increase our commercialization activities. This capital is particularly important in light of our recent announcements and additional progress with key partners as we advance the application of our quantum resistant and FIPS 140-2 certified Polymorphic Encryption Core (PEC) in multiple potential applications."

The offering equates to approximately 35.8 million Shares of common stock and Warrants to purchase 35.8 million shares of common stock in the Company. Cipherloc had previously announced the return of more than 14.5 million shares through settlements with former executives and their estates in 2020 and 2021.

The Shares and Warrants were sold at a price of $0.18 per combined Share and Warrant, which was equal to 80% of the closing sales price of the Company's common stock on March 30, 2021, which was the last trading day prior to the entry into the Purchase Agreement. The Warrants are good for a term of five years and have an exercise price of $0.36 per Share.

Paulson Investment Company, LLC (the "Placement Agent"), served as placement agent for the Offering.

In connection with the Offering, each of Cipherloc's officers and directors entered into Lock-Up Agreements whereby they agreed not to sell, offer, or transfer, any of their securities which they hold for 180 days after the end of the Offering, subject to customary exceptions.

Financial terms and additional information regarding the funding transactions are available in Cipherloc's Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on April 8, 2021, and available at www.sec.gov.

This press release does not constitute an offer to sell any securities or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Cipherloc Corporation (OTCQB:CLOK)

Cipherloc Corporation provides advanced technology and expertise to secure your data Cipherloc Corporation provides advanced technology and expertise to secure your data and safeguard your privacy with the speed you need today and the agility you'll need tomorrow. Our patented Polymorphic Encryption technology provides a layer of security that is stronger, adaptable, and scalable across a variety of applications and systems. Learn more at www.cipherloc.net.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of, and within the safe harbor provided by the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations, opinions, belief or forecasts of future events and performance. A statement identified by the use of forward-looking words including "will," "may," "expects," "projects," "anticipates," "plans," "believes," "estimate," "should," and certain of the other foregoing statements may be deemed forward-looking statements. Although Cipherloc believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set forth in the Company's SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements. The Company takes no obligation to update or correct its own forward-looking statements, except as required by law, or those prepared by third parties that are not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Investor Contact:
Matt Kreps
Darrow Associates Investor Relations
214-597-8200
mkreps@darrowir.com

SOURCE: CipherLoc Corporation

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https://www.accesswire.com/639358/Cipherloc-Announces-64-Million-Offering-of-Common-Stock

FAQ

What is the purpose of Cipherloc's $6.4 million offering?

The offering aims to enhance Cipherloc's resources for commercialization of its advanced encryption technology.

How many shares are involved in Cipherloc's recent offering?

The offering involves approximately 35.8 million shares of common stock and warrants.

What is the price per share for Cipherloc's offering?

The shares and warrants were sold at a price of $0.18 per combined share and warrant.

What is the lock-up period for Cipherloc's officers and directors?

Cipherloc's officers and directors have entered into a 180-day lock-up agreement post-offering.

How does this offering affect Cipherloc's shareholders?

The offering could lead to shareholder dilution due to the issuance of a significant number of new shares.