01 Communique Provides Quarterly Update on Business Developments and Second Quarter Fiscal 2021 Results

TORONTO, ON / ACCESSWIRE / June 10, 2021 / 01 Communique Laboratory Inc. (the ‘Company’) (TSXV:ONE)(OTCQB:OONEF) one of the first-to-market, enterprise level cybersecurity providers for the quantum computing era is pleased to report that the Company moved closer to profitability with increasing revenue and reducing the loss for the second quarter 2021.

Andrew Cheung, CEO of 01 Communique, stated, “I am pleased to announce we exceeded our expectations this quarter. The rising number of corporate users of our Remote Access technology have resulted in substantial revenue growth enabling us to increase our investment in our sales and marketing activities for IronCAP™. I am confident we will continue with this positive momentum in both revenue and earnings.”

Second quarter 2021 results:
The Company’s loss for the second quarter was $64,782 (2020 – $249,133) a decrease of $184,351. The adjusted loss was very close to breakeven at $18,401 (2020 – $205,924) a decrease of $187,523. The adjusted loss excludes stock-based compensation and depreciation which are non-cash operating expenses.

Revenue for the second quarter was $297,231 (2020 – $73,297) an increase of $223,934. The upward trend for the Company’s remote access service business continues as subscriber numbers and revenue are increasing.

Operating expenses including withholding taxes for the second quarter were $362,291 (2020 – $294,324) an increase of $67,967. The Company increased sales and marketing activities with the goal to commercialize IronCAP X™ as well as continue its efforts to build partnerships with companies for the integration of the IronCAP™ API with third party applications. The Company expects to make significant investments in infrastructure over the next few years including marketing, sales and business development, R&D, finance and business processes. These investments are expected to support the growth of the business thereby enabling significant future levels of profitability.

Business Development Highlights:  
The Company continued with its business development efforts forming new partnerships and building on existing partnerships:

  1. The Company’s remote access service business continued to see an increase in subscriber numbers and revenue. The Company believes much of this increase is the result of a response to the coronavirus pandemic whereby many companies have moved towards remote work. We believe this trend will continue as the move towards work from home continues beyond the pandemic.
  2. On March 25, 2021 the Company announced the results of its second Bounty Contest, whereby 807 cybersecurity and quantum experts attempted unsuccessfully to crack IronCAP™’s quantum-safe encryption during the one-month CAD$100,000 Bounty Contest. As with the first contest held over a year ago, no contestants managed to break the code and IronCAP™’s encryption yet again proven its resilience and robustness.
  3. On March 23, 2021 the Company announced a partnership agreement with DigiFlynt Tech Ltd., a Dubai-based digital transformation company with market focus on West Africa, UAE and India to sell IronCAP™.
  4. On April 6, 2021 the Company announced the signing of a partnership agreement with rThreat Inc., a United States-based cybersecurity company providing breach and attack emulation solutions to help their clients prevent cyberattacks. Upon testing IronCAP™’s algorithm during the month-long Bounty Contest, rThreat Inc. deemed IronCAP™ ‘uncrackable’ and concluded that the attack methodologies for traditional asymmetric encryption algorithms such as RSA, do not apply to IronCAP™. rThreat Inc. plans to use IronCAP™’s technology and encryption methodologies to help create the next generation of custom and forced zero-day artifacts for quantum-era cyberattacks.
  5. Building on the existing partnership with ixFintech on May 26, 2021 the Company announced its collaboration with ixFintech and a third party, Polydigi Tech, to augment the security and protection of ixFintech’s ixWallet against mounting cyber-threats. We believe we are the first to provide quantum-safe protection to the world’s first quantum-safe Bitcoin ATM machine and crypto E-wallet, ixWallet.

Grant of Stock Options  
The Company granted stock options pursuant to its stock option plan to certain directors and executives of the Company to purchase up to an aggregate of 740,000 common shares in the Company. The options were granted on June 9, 2021 and are exercisable at a price of $0.36 per share for a period of four years from the date of grant. The options vest over a period of two years, with 25% vesting on each of December 9, 2021, June 9, 2022, December 9, 2022 and June 9, 2023. The options, and the shares issuable upon exercise, will be subject to applicable securities and regulatory laws.

Conference Call Reminder and Information:  
01 Communique will host a live teleconference allowing for questions and answers later today at 10:00 AM EST (June 10, 2021) to discuss the Company’s results as well as providing an update on the business prospects for IronCAP™ and IronCAP X™.

Browser (please cut-and-paste the following link into your browser):

https://us02web.zoom.us/j/83272630612?pwd=ZGRGMU5aWUY0Z3N3SFgvT2s0VlVrZz09

Passcode: ironcap21

Dial-in:  
Within Canada (647) 374-4685 or (647) 558-0588

Within the USA (646) 558 8656 or (669) 900 9128

Webinar ID when prompted is 832 7263 0612

Passcode: 724051661

About 01 Communique  
Established in 1992, 01 Communique (TSXV:ONE)(OTCQB:OONEF) has always been at the forefront of technology. The Company’s cyber security business unit focuses on post-quantum cybersecurity with the development of its IronCAP™ technology. IronCAP™’spatent-pending cryptographic system is an advanced Goppa code-based post-quantum cryptographic technology that can be implemented on classical computer systems as we know them today while at the same time can also safeguard against attacks in the future post-quantum world of computing. The Company’s remote access business unit provides its customers with a suite of secure remote access services and products under its I’m InTouch and I’m OnCall product offerings. The remote access offerings are protected in the U.S.A. by its patents #6,928,479 / #6,938,076 / #8,234,701; in Canada by its patents #2,309,398 / #2,524,039 and in Japan by its patent #4,875,094. For more information, visit the Company’s web site at www.ironcap.ca and www.01com.com.  

Cautionary Note Regarding Forward-Looking Statements.  
Certain statements in this news release may constitute “forward-looking” statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this news release, such statements use such words as “may”, “will”, “expect”, “believe”, “plan”, “intend”, “are confident” and other similar terminology. Such statements include statements regarding the commercial success of IronCAP X™, the future of quantum computers and their impact on the Company’s product offering, the functionality of the Company’s products and the intended product lines for the Company’s technology and the potential licensing of the Company’s technology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under “Risk and Uncertainties” in the Company’s Management`s Discussion and Analysis document filed on SEDAR. Although the forward-looking statements contained in this news release are based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

Neither TSX Venture Exchange (“TSX-V”) nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

INVESTOR CONTACT:  
Brian Stringer
Chief Financial Officer
01 Communique
(905) 795-2888 x204
[email protected]

01 Communique Laboratory Inc.  
SELECTED FINANCIAL INFORMATION  
Consolidated Statements of Financial Position
Unaudited  
As at April 30, 2021 and October 31, 2020

 
  30-Apr-21     31-Oct-20  
 
           
Assets
           
Current assets
           
Cash and cash equivalents
  914,057     962,337  
Guaranteed investment certificate
          60,000  
Accounts receivable
    303,780       202,974  
Prepaid expenses and other assets
    42,495       25,343  
 
    1,260,332       1,250,654  
 
               
Plant and equipment
    147,855       35,253  
 
               
Total assets
  1,408,187     1,285,907  
 
               
Liabilities and Shareholders’ Deficit
               
 
               
Current liabilities
               
Accounts payable and accrued liabilities
  157,483     151,111  
Deferred revenue
    9,068       7,679  
Lease liability
    38,449       18,704  
 
    205,000       177,494  
Non-current liabilities
               
Premise lease liability
    92,776        
CEBA loan payable
    60,000        
Total liabilities
    357,776       177,494  
Shareholders’ deficit
               
Share capital
    43,462,102       43,395,752  
Contributed surplus
    5,781,650       5,717,636  
Warrants
    255,285       266,135  
Deficit
    (48,448,626 )     (48,271,110 )
 
    1,050,411       1,108,413  
 
               
Contingencies
               
 
               
Total liabilities and shareholders’ deficit
  1,408,187     1,285,907  
                 

01 Communique Laboratory Inc.  
SELECTED FINANCIAL INFORMATION  
Consolidated Statements of Operations and Comprehensive Income  
Unaudited  
For the 3 and 6 month periods ended April 30, 2021 and 2020

 
  three months ended     six months ended   
 
  30-Apr-21     30-Apr-20     30-Apr-21     30-Apr-20  
 
                       
Revenue
  297,231     73,297     510,493     114,667  
Expenses:
                               
Selling, general and administrative
    194,208       162,918       362,492       304,570  
Research and development
    138,876       131,404       276,105       202,499  
Withholding taxes
    29,207       7,816       49,991       11,272  
 
    362,291       294,324       688,588       507,069  
 
                               
Loss before accretion on liability component of debenture, interest, and other income
    (65,060 )     (221,027 )     (178,095 )     (392,402 )
Interest on debenture
          15,000             30,000  
Accretion on liability portion of debenture
          4,762             9,297  
Loss before other income and expense
    (65,060 )     (240,789 )     (178,095 )     (431,699 )
Interest income
    839       150       1,415       875  
Interest expense
    561       679       836       1,429  
Loss for the period and comprehensive loss
  (64,782 )   (249,133 )   (177,516 )   (443,525 )
 
                               
Loss per common share:
                               
Basic
  (0.00 )   (0.00 )   (0.00 )   (0.00 )
Diluted
  (0.00 )   (0.00 )   (0.00 )   (0.00 )
 
                               
  Weighted average number of common shares:    
Basic
    91,818,973       80,235,472       91,806,056       80,235,472  
Diluted
    91,818,973       80,235,472       91,806,056       80,235,472  
                                 

01 Communique Laboratory Inc.  
SELECTED FINANCIAL INFORMATION  
Consolidated Statements of Cash Flows  
Unaudited  
For the 3 and 6 month periods ended April 30, 2021 and 2020

 
  three months ended     six months ended  
 
  30-Apr-21     30-Apr-20     30-Apr-21     30-Apr-20  
Cash provided by (used in):
                       
 
                       
Operating activities:
                       
Comprehensive loss for the period
  (64,782 )   (249,133 )   (177,516 )   (443,525 )
Adjustments to reconcile loss for the
                               
period to net cash flows from operating activities:
                               
Depreciation of property and equipment
    1,804       1,459       3,654       2,952  
Amortization of right-of-use asset
    12,018       11,061       23,079       22,122  
Stock-based compensation expense
    44,577       41,750       65,764       73,150  
Accretion on liability portion of debenture
          4,762             9,297  
Change in non-cash working capital
    (167,471 )     13,281       (110,197 )     1,827  
 
    (173,854 )     (176,820 )     (195,216 )     (334,177 )
 
                               
Financing activities:
                               
Exercise of stock options
                1,750        
Exercise of debenture warrants
                52,000        
Proceeds from loan
                60,000        
Lease payments made
    (10,455 )     (11,034 )     (22,113 )     (21,930 )
 
    (10,455 )     (11,034 )     91,637       (21,930 )
 
                               
Investing activities:
                               
Proceeds from guaranteed investment certificate
    60,000       (60,000 )     60,000       190,000  
Purchase of property and equipment
    (2,510 )     (1,443 )     (4,701 )     (2,151 )
 
    57,490       (61,443 )     55,299       187,849  
 
                               
Increase in cash and cash equivalents
    (126,819 )     (249,296 )     (48,280 )     (168,258 )
 
                               
Cash and cash equivalents, beginning of period
    1,040,876       364,751       962,337       283,712  
Cash and cash equivalents, end of period
  914,057     115,454     914,057     115,454  
                                 

SOURCE: 01 Communique Laboratory, Inc.

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