Cipherloc Reports Third Quarter Results, Advances Partnership Activities

Rhea-AI Summary

Cipherloc Corporation (OTCQB:CLOK) reported its third quarter results for the period ending June 30, 2020, revealing net revenues of $8,750, a decrease from $27,850 in the same quarter last year. The company highlighted a significant 46.8% reduction in total operating expenses, amounting to $1,147,715, compared to $2,153,687 in Q2 2019. General and administrative costs were $833,260, including $295,000 in severance. Cipherloc continues to advance partnerships and anticipates further expense reductions, aiming to ensure its cash position is sufficient for operations over the next 12 months.

Positive

• 46.8% reduction in total operating expenses year-over-year.
• Ongoing partnership developments, potentially increasing future revenue.
• Expectations for continued expense reductions in the upcoming quarter.

Negative

• Net revenues of $8,750 represent a significant decline from the previous year's $27,850.
• High general and administrative expenses, including restructuring costs.

Cipherloc Reports Third Quarter Results, Advances Partnership Activities

ARLINGTON, VA / ACCESSWIRE / August 14, 2020 / Cipherloc Corporation (OTCQB:CLOK) (the "Company"), a developer of advanced encryption technology, announced financial and corporate results for the third quarter ended June 30, 2020.

"We continued to advance our strategic plan in the second quarter through an almost 47% reduction of operating expenses and development of our partnership initiatives," said Ryan Polk, Chief Financial Officer. "We anticipate further reductions in operating expenses during the September quarter of 2020, providing adequate financial resources for our revenue development efforts over the next twelve months."

Milton Mattox, the Chief Operating Officer, added, "We continue to make exciting progress with multiple technology partnerships and potential sales relationships through engineering and testing of our polymorphic encryption capabilities in a number applications. For example, we recently announced our progress with Arnouse Digital Devices, Corp (ADDC) pairing Cipherloc's data-in-motion encryption with ADDC's BioDigitalPC line of products in order to offload encryption processing and improve network performance. We are engaged in a number of additional projects, which we look forward to announcing as we achieve specific milestones."

Third Quarter 2020 Financial Results

Net revenues for the quarter ended June 30, 2020, were $8,750 as compared to $27,850 for the quarter ended June 30, 2019. Revenue reflects Cipherloc's status as a development stage data security solutions company. The Company is currently engaged in efforts intended to generate future revenue growth.

General and administrative expenses were $833,260 for the three months ended June 30, 2020 as compared to $947,309 for the three months ended June 30, 2019. General and Administrative expenses for the quarter ended June 30, 2020 included approximately $295,000 in severance and other restructuring costs. Selling and marketing expenses were $107,842 for the quarter ended June 30, 2020 as compared to $728,270 for the prior year quarter. Research and developments costs were $206,613 for the three months ended June 30, 2020 as compared to $478,108 for the three months ended June 30, 2019.

Total operating expenses declined 46.8 percent year-over-year, with additional reduction expected in the third quarter as part of Cipherloc's previously announced restructuring program. Cipherloc expects that its cash position will be sufficient to fund future operations for at least the next 12 months.

About Cipherloc Corporation (OTCQB: CLOK)

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.quantanova.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. 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.

Cipherloc Investor Contact:

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

CIPHERLOC CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(UNAUDITED)

		June 30, 2020				September 30, 2019
ASSETS
Current assets
Cash		$	2,227,830			$	7,839,472
Prepaid expenses			26,578				121,371
Total current assets			3,525,177				7,760,843
Other assets			100,000				7,566
Operating lease ROU asset			321,502				-
Fixed assets, net			31,132				40,182
Total assets		$	2,707,042			$	8,008,591
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities		$	676,785			$	650,681
Accrued compensation			40,000				142,293
Operating lease liability			116,943				-
Paycheck Protection Program loan			365,430				-
Deferred revenue			24,167				28,400
Total current liabilities			1,223,325				821,374
Operating lease liability - long-term portion			637,706				-
Total liabilities			1,861,031				821,374
Commitments and contingencies
Series A convertible preferred stock, $0.01 par value, 1,000,000 shares authorized; 1,000,000 shares issued and outstanding as of June 30, 2020 and September 30, 2019			10,000				10,000
Common stock, $0.01 par value, 681,000,000 shares authorized; 40,642,953 and 40,792,510 shares issued and outstanding as of June 30, 2020 and September 30, 2019, respectively			407,925				407,925
Treasury stock, at cost 149,557 shares			(150,000	)			-
Additional paid-in capital			68,368,697				68,225,828
Accumulated deficit			(67,790,612	)			(61,456,536	)
Total stockholders' equity			846,010				7,187,217
Total liabilities and stockholders' equity		$	2,707,042			$	8,008,591

CIPHERLOC CORPORATION AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(UNAUDITED)

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2020				2019				2020				2019
Revenues		$	8,750			$	27,850			$	39,233			$	27,850
Cost of revenues			-				-				-				-
Gross profit			8,750				27,850				39,233				27,850
Operating expenses
General and administrative			833,260				947,309				4,114,084				1,986,090
Selling and marketing			107,842				728,270				695,245				1,377,045
Research and development			205,613				478,108				1,544,205				1,303,680
Total operating expenses			1,146,715				2,153,687				6,353,534				4,666,815
Operating loss			(1,137,965	)			(2,125,837	)			(6,314,301	)			(4,638,965	)
Other income (expense)
Loss on disposal of asset			(19,778	)			-				(19,778	)			-
Interest income			-				2,610				-				5,938
Net loss		$	(1,157,743	)		$	(2,123,227	)		$	(6,334,079	)		$	(4,633,207	)
Net loss per common share - basic and diluted		$	(0.03	)		$	(0.05	)		$	(0.16	)		$	(0.11	)
Weighted average common shares outstanding - basic and diluted			40,642,953				40,792,510				40,740,105				40,792,510

SOURCE: CipherLoc Corporation

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FAQ

What were Cipherloc's revenues for Q3 2020?

Cipherloc reported net revenues of $8,750 for the third quarter ended June 30, 2020.

How much did Cipherloc reduce its operating expenses?

The company achieved a 46.8% reduction in total operating expenses compared to the previous year.

What are the expectations for Cipherloc's future expenses?

Cipherloc anticipates further reductions in operating expenses during the September quarter of 2020.

What is Cipherloc's financial outlook for the next 12 months?

Cipherloc expects its cash position to be sufficient to fund operations for at least the next 12 months.

What partnership initiatives is Cipherloc working on?

Cipherloc is advancing multiple technology partnerships, including collaboration with Arnouse Digital Devices.