SideChannel Reports Quarterly Revenue Growth of 37%
WORCESTER, MA / ACCESSWIRE / August 9, 2023 / 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 three months and nine months ended June 30, 2023.
Third Quarter 2023 Highlights
- Revenue of $1.8 million; up 37.1% versus the third quarter of 2022
- Sequential quarter growth of $133,000 or 8.2%
- Gross margin of 49.9% versus 45.6% for the second quarter of 2023 and 44.0% in the third quarter of 2022
- Net loss of $0.7 million or less than $0.01 per share (includes $214,000 in non-recurring, non-cash business combination related expense)
- Trailing twelve-month revenue reaches $6.1 million as of June 30, 2023
- Revenue retention was 70.8% for the twelve months ended June 30, 2023
- Cash of $1.4 million as of June 30, 2023; cash used in operations during the quarter of $432,000
- Operating expenses were flat sequentially from the second quarter of 2023; however, operating expenses decreased $241,000 compared to the second quarter of 2023 excluding the non-recurring, non-cash business combination related expense
Management Comments
Commenting on the fiscal third quarter ended June 30, 2023, Brian Haugli, President and Chief Executive Officer of SideChannel said, “our team continues to successfully execute our strategy, and I am pleased to see that reflected in our income statement – revenue growth, gross margin increases, and decreased operating expenses. We continue adapting our service offering to reflect the evolving needs of our clients, and the growing capabilities of our cybersecurity professionals.”
“Like most companies, we are paying more attention to the risks and opportunities that the current macro-economic uncertainties present SideChannel and our clients. The Begin, Balance, and Beyond plans offered through SideChannel Complete, address the needs of companies across a range of risk management maturity levels as well as differing client budgets for cybersecurity risk mitigation. Since the announcement on June 27, we have increased communication about SideChannel Complete options available to the emerging and mid-market companies that we have designed these options to serve,” said Haugli.
Financial Outlook for Fiscal 2023
The Company reiterates its financial outlook expected for fiscal year 2023 as follows:
- Revenue ranging from $6.3 million to $6.5 million
- Gross margin ranging from 50.0% to 52.0%
- Operating losses to be lower in the second half of the year compared to the first half
Conference Call Information
CALL INFORMATION
Date: Wednesday, August 9, 2023 at 4:30 pm EDT
Dial In: Toll Free: 877-545-0523
International: 973-528-0016
Participant Access Code: 157177
A webcast of the call will also be available: https://www.webcaster4.com/Webcast/Page/2071/48675
The call will include management remarks and a Q&A session comprised of live questions and questions submitted in advance to ir@sidechannel.com no later than 4:00 pm Eastern Time on Monday. The conference call host will provide participants with instructions for joining the queue to asks questions at the conclusion of management remarks.
Third Quarter 2023 Review
The third quarter Form 10-Q is accessible in its entirety at https://investors.sidechannel.com/sec-filings.
| In thousands, except shares and per share data | Three Months Ended | |||||||||||||||||||||||||||
| Change | Change | |||||||||||||||||||||||||||
| 6/30/2023 | 6/30/2022 | $ | % | 3/31/2023 | $ | % | ||||||||||||||||||||||
| Revenue | $ | 1,750 | $ | 1,276 | 474 | 37.1 | % | $ | 1617 | $ | 133 | 82 | % | |||||||||||||||
| Gross profit | 874 | 562 | 312 | 55.5 | % | 727 | 137 | 18.6 | % | |||||||||||||||||||
| Gross margin | 49.9 | 44.0 | 45.6 | % | ||||||||||||||||||||||||
| Operating expenses | 897 | 196.3 | % | (241 | ) | -15.1 | % | |||||||||||||||||||||
| Business Combination related costs | 214 | – | 214 | – | 214 | |||||||||||||||||||||||
| Operating income (loss) | (694 | ) | 105 | (799 | ) | (858 | ) | 164 | ||||||||||||||||||||
| Net loss | (679 | ) | (88 | ) | (591 | ) | (856 | ) | 177 | |||||||||||||||||||
| Net income (loss) per common share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | |||||||||||||
| Weighted average common shares outstanding – basic and diluted | 189,435,933 | 62,016,618 | 148,928,663 | |||||||||||||||||||||||||
| As ofJune 30, 2023 | As ofSeptember 30, 2022 | |||||||||||||||||||||||||||
| Cash | $ | 1,446 | $ | 3,030 | ||||||||||||||||||||||||
| Current Assets | $ | 2,662 | $ | 4,142 | ||||||||||||||||||||||||
| Current Liabilities | $ | 1,121 | $ | 1,161 | ||||||||||||||||||||||||
About SideChannel
SideChannel, founded in 2019, creates top-tier cybersecurity programs and services for emerging and mid-market companies to help protect their assets. SideChannel employs a combination of skilled and experienced talent, technology tools, and production-tested processes to offer a complete program. SideChannel also offers Enclave; a network microsegmentation solution that simplifies securing a network in a zero-trust model. Learn more at sidechannel.com.
Interested investors and stockholders are encouraged to sign up for press releases and industry updates by registering for Email Alerts at www.sidechannel.com/news/newsletter-sign-up/ and by following SideChannel on Twitter and LinkedIn .
SideChannel
146 Main Street
Suite 405
Worcester, MA 01608
Investor Contact
Ryan Polk
ir@sidechannel.com
Forward-Looking Statements
This press release may contain forward-looking statements, including information about management’s view of SideChannel’s future expectations, plans and prospects, subject to the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 (the “Act”). 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 within the meaning of the Act and are subject to the safe harbor created by the Act and otherwise. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of SideChannel to be materially different than those expressed or implied in such statements. These risk factors include, but are not limited to, our ability to integrate the operations of the acquired company into our company; that we have incurred net losses since inception, our need for additional funding, the substantial doubt about our ability to continue as a going concern, and the terms of any future funding we raise; our dependence on current management and our ability to attract and retain qualified employees; competition for our products; our ability to develop and successfully introduce new products, improve current products and innovate; unpredictability in our operating results; our ability to retain existing licensees and add new licensees; our ability to manage our growth; our ability to protect our intellectual property (IP), enforce our IP rights and defend against claims that we infringed on the IP of others; the risk associated with the concentration of our cash in one financial institution at levels above the amount protected by FDIC insurance; and other risk factors included from time to time in documents we file with the Securities and Exchange Commission, including, but not limited to, our Forms 10-K, 10-Q and 8-K. These reports are available at www.sec.gov. Other unknown or unpredictable factors also could have material adverse effects on SideChannel’s future results. Further, factors that we do not presently deem material as of the date of this release may become material in the future. The forward-looking statements included in this press release are made only as of the date hereof. SideChannel cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SideChannel undertakes no obligation to update these forward-looking statements after the date of this release, except as required by law, nor any obligation to update or correct information prepared by third parties.
