Exhibit 99.1




Cipherloc Reports Third Quarter Results, Advances Partnership Activities


Arlington, VA – 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













June 30,


   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 




The following information was filed by Cipherloc Corp (CLOK) on Friday, August 14, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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