SideChannel, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>SideChannel, Inc. has filed its quarterly report (10-Q) for the period ending March 31, 2024, providing an update on its financial and operational status.</b>

AI Summary

SideChannel, Inc. (SDCH) filed a Quarterly Report (10-Q) with the SEC on May 7, 2024. SideChannel, Inc. filed a 10-Q report for the period ending March 31, 2024. The filing covers the quarterly period from January 1, 2024, to March 31, 2024. The company's fiscal year ends on September 30. SideChannel, Inc. was formerly known as CIPHERLOC Corp and NATIONAL SCIENTIFIC CORP/AZ. The company's business address is located at 146 Main Street, Suite 405, Worcester, MA 01608.

Why It Matters

For investors and stakeholders tracking SideChannel, Inc., this filing contains several important signals. This 10-Q filing provides investors with the latest financial performance and operational details for SideChannel, Inc. during the first quarter of 2024. Understanding the company's financial health and strategic direction is crucial for investors assessing its current market position and future prospects.

Risk Assessment

Risk Level: low — SideChannel, Inc. shows low risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report and does not contain significant new information that would alter the risk profile.

Analyst Insight

Review the detailed financial statements and management discussion within the 10-Q to understand SideChannel, Inc.'s performance and outlook.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed period of report)
• 2024-05-07 — Filing Date (Filed as of date)
• 0930 — Fiscal Year End (Fiscal year end)

Key Players & Entities

• SideChannel, Inc. (company) — Filer name
• CIPHERLOC Corp (company) — Former company name
• NATIONAL SCIENTIFIC CORP/AZ (company) — Former company name
• Worcester, MA (location) — Business address city and state

FAQ

Industry Context

SideChannel, Inc. operates in the computer processing and data preparation industry (SIC 7374).

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to submit regular financial reports.

What Investors Should Do

1. Analyze the financial statements for revenue, expenses, and profitability.
2. Review management's discussion and analysis for insights into business operations and strategy.
3. Compare current quarter performance to previous periods and industry benchmarks.

Year-Over-Year Comparison

This is the 10-Q filing for the quarter ending March 31, 2024. Specific comparative data from the previous filing (likely a 10-Q for the quarter ending December 31, 2023, or a 10-K for the year ending September 30, 2023) is not detailed in the provided header information.

Key Financial Figures

• $0.001 — ch Registered Common Stock, par value $0.001 per share SDCH N/A Indicate by ch

Filing Documents

• form10-q.htm (10-Q) — 629KB
• ex31-1.htm (EX-31.1) — 16KB
• ex31-2.htm (EX-31.2) — 16KB
• ex32-1.htm (EX-32.1) — 7KB
• ex32-2.htm (EX-32.2) — 7KB
• form10-q_001.jpg (GRAPHIC) — 3KB
• 0001493152-24-018014.txt (&nbsp;) — 3169KB
• sdch-20240331.xsd (EX-101.SCH) — 26KB
• sdch-20240331_cal.xml (EX-101.CAL) — 33KB
• sdch-20240331_def.xml (EX-101.DEF) — 76KB
• sdch-20240331_lab.xml (EX-101.LAB) — 256KB
• sdch-20240331_pre.xml (EX-101.PRE) — 192KB
• form10-q_htm.xml (XML) — 318KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Consolidated Balance Sheets as of March 31, 2024 (Unaudited), and September 30, 2023 3 Unaudited Consolidated Statements of Operations for the three and six months ended March 31, 2024 and 2023 4 Unaudited Consolidated Statement of Stockholders' Equity for the three and six months ended March 31, 2024 and 2023 5 Unaudited Consolidated Statements of Cash Flows for the six months ended March 31, 2024 and 2023 6 Notes to Unaudited Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 22 Item 4.

Controls and Procedures

Controls and Procedures 22

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 23 Item 1A.

Risk Factors

Risk Factors 23 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24 Item 3. Defaults Upon Senior Securities 24 Item 4. Mine Safety Disclosures 24 Item 5 Other Information 24 Item 6. Exhibits 25 2 Table of Contents PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SIDECHANNEL, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) 31-Mar-24 30-Sep-23 (Unaudited) ASSETS Current assets Cash $ 851 $ 1,053 Accounts receivable, net 910 834 Deferred costs 180 180 Prepaid expenses and other current assets 446 381 Total current assets 2,387 2,448 Fixed assets 24 30 Goodwill 1,356 1,356 Deferred costs 60 150 Total assets $ 3,827 $ 3,984 LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 498 $ 613 Deferred revenue 564 280 Promissory note payable - 50 Income taxes payable - 11 Total current liabilities 1,062 954 Other Liabilities - - Total liabilities 1,062 954 Commitments and contingencies (Note 10) - - Common stock, $ 0.001 par value, 681,000,000 shares authorized; 224,355,805 and 213,854,781 shares issued and outstanding as of Mar 31, 2024 and Sep 30, 2023 224 214 Additional paid-in capital 21,979 21,755 Accumulated Deficit ( 19,438 ) ( 18,939 ) Total stockholders' equity 2,765 3,030 Total liabilities and stockholders' equity $ 3,827 $ 3,984 Note: The consolidated balance sheet at September 30, 2023, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by the United States generally accepted accounting principles for complete financial statements. See accompanying notes to unaudited consolidated financial statements. 3 Table of Contents SIDECHANNEL, INC. CONSOLIDATED (In thousands, except share and per share d

Business

Business Combination On July 1, 2022 we, then known as Cipherloc Corporation ("Cipherloc"), a Delaware corporation, completed an acquisition ("Business Combination") of all the outstanding equity securities of SideChannel, Inc., a Massachusetts corporation, pursuant to an Equity Securities Purchase Agreement dated May 16, 2022 (the "Purchase Agreement"). On September 9, 2022, SideChannel, Inc. the acquired Massachusetts corporation and a subsidiary of the registrant, changed its name to SCS, Inc. (the "Subsidiary" or "SCS") and Cipherloc Corporation, the Delaware parent company of the subsidiary has changed its name to SideChannel, Inc. The Business Combination was accounted for as a reverse acquisition ("reverse merger") in accordance with GAAP. Under this method of accounting, SCS was deemed to be the accounting acquirer for financial reporting purposes. As part of the Business Combination, the former stockholders of SCS (the "Sellers") exchanged all of their equity securities in SCS for a total of 59,900,000 shares of the Company's common stock (the "First Tranche Shares"), and 100 shares of the Company's newly designated Series A Preferred Stock, $ 0.001 par value (the "Series A Preferred Stock"). The In addition the Sellers were entitled to receive up to an additional 59,900,000 shares of the Company's common stock (the "Second Tranche Shares" and together with the First Tranche Shares and the Series A Preferred Stock, the "Shares") at such time that the operations of SCS, as a subsidiary of the Company, achieved at least $ 5.5 million in revenue (the "Milestone") for any twelve-month period occurring after the Closing Date and before the 48-month anniversary of the execution of the Purchase Agreement. The number of the Second Tranche Shares could have been reduced or increased, based upon whether SCS working capital as of the Closing Date is less than or more than zero ("Closing Working Capital Adjustment"). The number of the Second Tranche Shares was also

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