Cipherloc Reports Third Quarter Results, Advances Partnership Activities

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

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


   June 30, 2020    September 30,
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 
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 


   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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