SideChannel, Inc. Files 2024 10-K

TL;DR

SideChannel (SCCH) filed its 2024 10-K. Full financials and biz ops details inside.

AI Summary

SideChannel, Inc. filed its 10-K for the fiscal year ending September 30, 2024, reporting on its operations and financial condition. The company, formerly known as CIPHERLOC Corp and NATIONAL SCIENTIFIC CORP/AZ, is incorporated in Delaware and headquartered in Worcester, MA. The filing covers the period from October 1, 2023, to September 30, 2024, and includes comparative financial data for previous fiscal years.

Why It Matters

This 10-K filing provides investors and stakeholders with a comprehensive overview of SideChannel, Inc.'s financial performance and business operations for the fiscal year 2024, crucial for investment decisions.

Risk Assessment

Risk Level: medium — As a 10-K filing, it inherently contains detailed financial and operational information that can reveal risks, but without specific negative disclosures, the risk level is assessed as medium.

Key Numbers

• 2024-09-30 — Fiscal Year End (The end date for the reporting period covered by the 10-K.)
• 2023-09-30 — Prior Fiscal Year End (Provides a comparison point for financial performance.)
• 2022-09-30 — Previous Fiscal Year End (Offers further historical financial context.)

Key Players & Entities

• SideChannel, Inc. (company) — Filer of the 10-K
• CIPHERLOC Corp (company) — Former name of SideChannel, Inc.
• NATIONAL SCIENTIFIC CORP/AZ (company) — Former name of SideChannel, Inc.
• Worcester, MA (location) — Business and mail address
• 0930 (date) — Fiscal year end
• 20240930 (date) — Conformed period of report
• 20241213 (date) — Filed as of date

FAQ

Key Financial Figures

• $0.001 — ) of the Act: Common Stock, par value $0.001 (Title of Class) Indicate by check
• $0.07 — e OTCQB Venture Market of approximately $0.07. As of December 12, 2024, there were
• $190 billion — ecurity spending is forecasted to reach $190 billion in calendar year ("CY") 2024, reflectin
• $141.4 billion — 2023 on a constant currency basis from $141.4 billion in CY 2022 to $158.9 billion in CY 2023
• $158.9 billion — basis from $141.4 billion in CY 2022 to $158.9 billion in CY 2023. This growth is driven by co
• $350 — O time and material projects range from $350 to $450. Each of our vCISOs is generall
• $450 — nd material projects range from $350 to $450. Each of our vCISOs is generally embedd
• $546 thousand — 30, 2024, and September 30, 2023, were $546 thousand and $669 thousand, respectively. These
• $669 — tember 30, 2023, were $546 thousand and $669 thousand, respectively. These costs wer
• $771 thousand — 30, 2024, and September 30, 2023, were $771 thousand and $1.4 million, respectively. Compe
• $1.4 m — tember 30, 2023, were $771 thousand and $1.4 million, respectively. Competition Th

Filing Documents

• form10-k.htm (10-K) — 1231KB
• ex4-1.htm (EX-4.1) — 10KB
• ex21-1.htm (EX-21.1) — 3KB
• ex23-1.htm (EX-23.1) — 5KB
• ex31-1.htm (EX-31.1) — 18KB
• ex31-2.htm (EX-31.2) — 19KB
• ex32-1.htm (EX-32.1) — 6KB
• ex32-2.htm (EX-32.2) — 6KB
• form10-k_001.jpg (GRAPHIC) — 32KB
• form10-k_002.jpg (GRAPHIC) — 26KB
• form10-k_003.jpg (GRAPHIC) — 14KB
• form10-k_004.jpg (GRAPHIC) — 6KB
• logo.jpg (GRAPHIC) — 16KB
• 0001493152-24-049837.txt ( ) — 6130KB
• sdch-20240930.xsd (EX-101.SCH) — 44KB
• sdch-20240930_cal.xml (EX-101.CAL) — 56KB
• sdch-20240930_def.xml (EX-101.DEF) — 187KB
• sdch-20240930_lab.xml (EX-101.LAB) — 402KB
• sdch-20240930_pre.xml (EX-101.PRE) — 324KB
• form10-k_htm.xml (XML) — 735KB

BUSINESS

BUSINESS 4 ITEM 1A. RISK FACTORS 10 ITEM 1B. UNRESOLVED STAFF COMMENTS 29 ITEM 1C. CYBERSECURITY 29 ITEM 2.

PROPERTIES

PROPERTIES 31 ITEM 3. LEGAL PROCEEDINGS 31 ITEM 4. MINE SAFETY DISCLOSURES 31 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 32 ITEM 6. [Reserved] 32 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 32 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 37 ITEM 8.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 38 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 60 ITEM 9A.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 60 ITEM 9B. OTHER INFORMATION 62 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 62 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 62 ITEM 11.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 62 ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 63 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 63 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 63 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 63

SIGNATURES

SIGNATURES 66 2 Except as otherwise required by the context, references to "SideChannel," "SideChannel, Inc.," the "Company," "we," "us" and "our" are to (i) Cipherloc Corporation, a Texas corporation, and its subsidiaries, for all periods prior to September 30, 2021, and to (ii) Cipherloc Corporation, a Delaware corporation, and its subsidiaries, for all periods after September 30, 2021, the date of the completion of the merger of the Texas corporation into the Delaware corporation, and to (iii) SideChannel, Inc., a Delaware corporation and its subsidiaries, for all periods after July 5, 2022, the date of the name change of Cipherloc Corporation's name to SideChannel, Inc. Forward-Looking This Annual Report on Form 10-K, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, contains "forward-looking statements." These forward-looking "estimate," "intend," "strategy," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled " Item 1A. Risk Factors " ("Risk Factors") and elsewhere in this Annual Report on Form 10-K. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. These forward-looking statements are based on management's current expectations. These statements are neither prom

Business

Business Overview & Strategy SideChannel is a cybersecurity advisory services and software company. Our mission is to simplify cybersecurity for mid-market and emerging companies, a market we believe is underserved. Our products and services offer comprehensive cybersecurity and privacy risk management solutions. We anticipate ongoing demand for cost-effective cybersecurity solutions, driven by continued remote and hybrid work environments, increased data breaches, and a heightened focus of Chief Information Officers (CIOs) on information security. To meet these needs, we aim to provide tech-enabled services, including virtual Chief Information Security Officer (vCISO) services, zero trust solutions, third-party risk management, due diligence, privacy, threat intelligence, and managed end-point security solutions. Market Opportunity According to the Cantor's Cybersecurity Q3'24 Market Updater released by Cantor Technology Investment Banking on October 29, 2024 ("Cantor 2024 Q3 Update"), security spending is forecasted to reach $190 billion in calendar year ("CY") 2024, reflecting significant growth in the cybersecurity market. Information security spending is expected to have grown 12.4% for CY 2023 on a constant currency basis from $141.4 billion in CY 2022 to $158.9 billion in CY 2023. This growth is driven by continued remote and hybrid work, increased incidences of data breaches, and a continued focus of CIOs on information security. The Cantor 2024 Q3 Update also noted: The number of reported data compromises increased by 78% in 2023, affecting over 350 million victims. Cybercrime adversaries are utilizing social engineering to circumvent multi-factor authentication ("MFA"), and phishing, stolen or compromised credentials, and cloud misconfiguration were the most frequent attack vectors. Intrusions through cloud environments have increased by 75% year-over-year from 2022 to 2023. As a result, 51% of organizations are planning to increase security

View Full Filing

View this 10-K filing on SEC EDGAR