8-K
SideChannel, Inc. (SDCH)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 5, 2024
SideChannel,Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-28745 | 86-0837077 |
|---|---|---|
| (State<br> or other jurisdiction<br><br> <br>of<br> incorporation) | (Commission<br><br> <br>File<br> Number) | (IRS<br> Employer<br><br> <br>Identification<br> No.) |
146Main Street, Suite 405, Worcester, MA 01608
(Address of principal executive offices) (Zip Code)
(508)925-0114
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| n/a | n/a | n/a |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item2.02. Results of Operations and Financial Condition
On December 5, 2024, SideChannel, Inc. (the “Company”) issued a press release announcing its financial results for the year ended September 30, 2024. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
The information included in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item9.01 Financial Statements and Exhibits
(a) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release issued by the registrant on December 5, 2024. |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SideChannel, Inc. | ||
|---|---|---|
| Date:<br> December 5, 2024 | By: | /s/ Brian Haugli |
| Name: | Brian<br> Haugli | |
| Title: | Chief<br> Executive Officer |
Exhibit99.1
SideChannelAchieves Full Year Cash Provided by Operations
Financialresults conference call on Thursday, December 5 @ 4:30 P.M. ET
WORCESTER,MA / ACCESSWIRE / December 5, 2024 / SideChannel, Inc. (OTCQB:SDCH) (“SideChannel”), a leading provider of cybersecurity services and technology to emerging and middle market companies, today announced its financial results for the fiscal year ended September 30, 2024.
FiscalYear 2024 Highlights
| ● | Revenue<br> of $7.4 million; 12.8% greater than Fiscal Year (“FY”) 2023 revenue of $6.6 million. |
|---|---|
| ● | Gross<br> margin of 47.8%; 290 bps lower than 50.7% for FY 2023. |
| ● | Operating<br> expenses, excluding intangible asset impairment and business combination related costs, decreased $1.2 million, or 22.0%, compared<br> to FY 2023. |
| ● | Net<br> loss of $785 thousand or $0.00 per share versus a net loss of $7.0 million or $0.04 per share in FY 2023. |
| ● | Revenue<br> retention of 69.2%; 180 bps lower than 71.0% for FY 2023. |
| ● | Cash,<br> cash equivalents, and short-term investments increased by $242 thousand from September 30, 2023, to an ending balance of $1.3<br> million at September 30, 2024. |
ManagementComments
Commenting on the results for the fiscal year ended September 30, 2024, Brian Haugli, President and Chief Executive Officer of SideChannel, said, “We accomplished our goal of establishing sustainable cash provided by operations this year and intend to keep that going during 2025. The next objective we want to achieve is delivering multiple quarters of Enclave revenue growth. We are deploying our cash provided by operations to build a sales team for that purpose. We are also creating awareness about how Enclave’s novel approach to microsegmentation is proving to be a significantly cost-effective alternative to hardware.”
Haugli continued, “The quantity of new service client leads is increasing and the deal flow through our sales funnel is ahead of this same time last year. Our assessment product is an attractive solution for companies that need to identify priorities and explore options before tapping into our vCISO platform. In the second half of fiscal year 2024, our service delivery team began expanding capacity in a manner that won’t negatively impact our gross margins. We expect to see this benefit in our 2025 results.”
SideChannel will host a conference call on December 5, 2024, at 4:30 P.M. Eastern Time to discuss its fiscal year 2024 results and provide an update on the Company’s initiatives.
CALLINFORMATION
| Date: | Thursday<br> December 5, 2024, at 4:30 P.M. Eastern Standard Time. |
|---|---|
| Dial In: | Toll<br> Free: 888-506-0062 |
| International:<br> 973-528-0011 | |
| Participant<br> Access Code: 433384 |
A webcast of the call will also be available: https://www.webcaster4.com/Webcast/Page/2071/49680
Participants may register in advance for the call using the webcast link.
The call will include management remarks and a live question and answer session. Questions may be submitted prior to the meeting using ir@sidechannel.com.
The Company’s annual report for the year ended September 30, 2024, will be timely filed on Form 10-K with the Securities and Exchange Commission upon completion of the audit.
Financialtables follow.
SIDECHANNEL,INC.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
| Twelve Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | ||||||
| 2024 | 2023 | |||||
| Revenues | $ | 7,416 | $ | 6,572 | ||
| Cost of revenues | 3,874 | 3,240 | ||||
| Gross profit | 3,542 | 3,332 | ||||
| Operating expenses | ||||||
| General and administrative | 3,046 | 3,586 | ||||
| Selling and marketing | 771 | 1,337 | ||||
| Research and development | 546 | 669 | ||||
| Intangible asset impairment | - | 4,940 | ||||
| Business Combination related costs | - | 214 | ||||
| Total operating expenses | 4,363 | 10,746 | ||||
| Operating loss | (821 | ) | (7,414 | ) | ||
| Other income, net | 41 | 29 | ||||
| Net loss before income tax expense | (780 | ) | (7,385 | ) | ||
| Income tax expense (benefit) | 5 | (379 | ) | |||
| Net loss | $ | (785 | ) | $ | (7,006 | ) |
| Net loss per common share – basic and diluted | $ | (0.00 | ) | $ | (0.04 | ) |
| Weighted average common shares outstanding – basic and diluted | 222,078,462 | 175,274,762 |
SIDECHANNEL,INC.
CONSOLIDATEDBALANCE SHEETS
(In thousands, except share and per share data)
| September 30, 2023 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | 1,045 | $ | 1,053 | ||
| Short-term investments | 250 | - | |||
| Accounts receivable, net | 732 | 834 | |||
| Deferred costs | 150 | 180 | |||
| Prepaid expenses and other current assets | 379 | 381 | |||
| Total current assets | 2,556 | 2,448 | |||
| Fixed assets | 33 | 30 | |||
| Goodwill | 1,356 | 1,356 | |||
| Deferred costs | - | 150 | |||
| Total assets | 3,945 | $ | 3,984 | ||
| LIABILITIES & STOCKHOLDERS’ EQUITY | |||||
| Current liabilities | |||||
| Accounts payable and accrued liabilities | 634 | $ | 613 | ||
| Deferred revenue | 499 | 280 | |||
| Promissory note payable | - | 50 | |||
| Income taxes payable | 3 | 11 | |||
| Total current liabilities | 1,136 | 954 | |||
| Other liabilities | - | - | |||
| Total liabilities | 1,136 | 954 | |||
| Commitments and contingencies | |||||
| Common stock, 0.001 par value, 681,000,000 shares authorized; 225,975,331 and 213,854,781 shares issued and outstanding as of September 30, 2024, and 2023, respectively | 226 | 214 | |||
| Additional paid-in capital | 22,307 | 21,755 | |||
| Accumulated deficit | (19,724 | ) | (18,939 | ) | |
| Total stockholders’ equity | 2,809 | 3,030 | |||
| Total liabilities and stockholders’ equity | 3,945 | $ | 3,984 |
All values are in US Dollars.
AboutSideChannel
SideChannel helps emerging and mid-market companies protect their assets. Founded in 2019, we deliver comprehensive cybersecurity plans through a series of actions branded SideChannel Complete.
SideChannel deploys a combination of skilled and experienced talent, and technological tools to offer layered defense strategies supported by battle-tested processes. SideChannel also offers Enclave, a network infrastructure platform that eases the journey from zero to zero-trust. Learn more at sidechannel.com.
Investors and shareholders are encouraged to receive to press releases and industry updates by subscribing to the investor email newsletter and following SideChannel on X and LinkedIn.
You may contact us at:
SideChannel
146 Main Street, Suite 405
Worcester, MA 01608
InvestorContact
Ryan Polk
ir@sidechannel.com
Forward-LookingStatements
Thispress release may contain forward-looking statements, including information about management’s view of SideChannel’s futureexpectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes”, “hopes”,“expects”, “intends”, “plans”, “anticipates”, “potential”, “could”,“should” or “may”, and similar conditional expressions are intended to identify forward-looking statements. Examplesof forward-looking statements include, among others, statements relating to future sales, earnings, cash flows, results of operations,uses of cash and other measures of financial performance.
Becauseforward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that may cause SideChannel’sactual results and financial condition to differ materially from those expressed or implied in the forward-looking statements. Theserisk factors include, but are not limited to: that we have incurred net losses since inception, our need for additional funding, thesubstantial doubt about our ability to continue as a going concern, and the terms of any future funding we raise; our dependence on currentmanagement and our ability to attract and retain qualified employees; competition for our products; our ability to develop and successfullyintroduce new products, improve current products and innovate; unpredictability in our operating results; our ability to retain existinglicensees and add new licensees; our ability to manage our growth; our ability to protect our intellectual property (IP), enforce ourIP rights and defend against claims that we infringed on the IP of others; the risk associated with the concentration of our cash inone financial institution at levels above the amount protected by FDIC insurance; and other risk factors included from time to time indocuments we file with the Securities and Exchange Commission, including, but not limited to, our Annual Reports on Form 10-K, QuarterlyReports on Form 10-Q and Current Reports on Form 8-K. These reports are available at www.sec.gov.
Otherunknown or unpredictable factors also could have material adverse effects that could cause actual results to differ materially from thoseprojected or represented in the forward-looking statements. Further, factors that we do not presently deem material as of the date ofthis release may become material in the future. The forward-looking statements included in this press release are made only as of thedate hereof. SideChannel cannot guarantee future results, levels of activity, performance, or achievements. Accordingly, you should notplace undue reliance on these forward-looking statements. Finally, SideChannel undertakes no obligation to update these forward-lookingstatements after the date of this release, except as required by law, nor any obligation to update or correct information prepared bythird parties.