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Plurilock Security Inc. Reports Second Quarter Fiscal 2022 Financial Results

·11 min read

Vancouver, British Columbia--(Newsfile Corp. - August 26, 2022) - Plurilock Security Inc. (TSXV: PLUR) (OTCQB: PLCKF) and related subsidiaries ("Plurilock" or the "Company"), an identity-centric cybersecurity solution provider for workforces, today announces its financial results for the three and six months ended June 30, 2022. All dollar figures are stated in Canadian dollars, unless otherwise indicated.

"The second quarter of fiscal 2022 saw Plurilock reaching new milestones which includes releasing new advanced product features, adding a seasoned director, receiving international recognition for its technology and sales efforts and most notably, securing its first cross-sale order for its high-margin proprietary software with a California-based pension fund," said Ian L. Paterson, CEO of PlurilockTM. "Furthermore, we continued to expand our active sales pipeline by securing new purchase orders, which led us to generate a total revenue of $9.1 million for the three-month period."

Mr. Paterson added, "Our first cross-sale for our DEFEND product during this quarter highlights our ongoing efforts to capitalize on our extensive distribution channels. As we scale both organically and inorganically, we intend to continue completing more high-margin software sales, which would result in enhanced gross margins for our business."

Second Quarter Fiscal 2022 Financial Highlights

  • Total revenue for the three and six months ended June 30, 2022 was $9,106,547 and $16,059,599 respectively as compared to $8,604,310 and $8,680,071 for the same periods in the prior fiscal year ended June 30, 2021. Revenue for the three months ended June 30, 2022 and June 30, 2021 included revenue from both the Technology Division and the Solutions Division. Revenue for the six months ended June 30, 2022 is significantly higher than the six months ended June 30, 2021 in the prior year due to the timing of the acquisitions of Aurora Systems Consulting Inc. ("ASC") and Integra Networks Corporation ("INC").

  • Hardware and systems sales revenue for the three and six months ended June 30, 2022 totalled $8,359,715 and $14,855,611 respectively compared to $7,581,208 and $7,581,208 in the prior year for the same periods. Software, license and maintenance sales revenue for the three and six months ended June 30, 2022 was $610,523 and $1,039,979 respectively compared to $738,055 and $805,811 respectively in the prior year for the same periods. Professional services revenue was $136,309 and $164,009 respectively for the three and six months ended June 30, 2022 compared to $285,047 and $293,052 respectively in the prior year for the same periods.

  • Hardware and systems sales revenues for the three and six months ended June 30, 2022 accounted for 91.8% and 92.5% respectively of total revenues compared to 88.1% and 87.3% for the three and six months ended June 30, 2021. Software, license and maintenance sales revenues for the three and six months ended June 30, 2022 accounted for 6.7% and 6.5% respectively compared to 8.6% and 9.3% for the three and six months ended June 30, 2021. Professional services revenue for the three and six months ended June 30, 2022 accounted for 1.5% and 1.0% respectively of total revenues, compared to 3.3% and 3.4% for the three and six months ended June 30, 2021.

  • Gross margin for the three and six months ended June 30, 2022 was 10.0% and 8.6% respectively compared to 7.3% and 8.0% in the prior year for the same periods.

  • Adjusted EBITDA for the three and six months ended June 30, 2022 was $(1,791,408) and $(3,677,423) respectively compared to $(939,232) and $(1,969,017) in the prior year for the same periods.

  • Cash and cash equivalents and restricted cash on June 30, 2022 was $3,194,872 compared to $9,468,104 on December 31, 2021.

  • During the three and six months ended June 30, 2022, the Company used $1,628,613 and $6,130,212 respectively of cash from operating activities compared to $418,094 and $1,576,549 in the prior year for the same periods.

Second Quarter Fiscal 2022 Operational Highlights

  • On April 1, 2022, Plurilock announced the appointment of Garr Stephenson Jr as its Chief Revenue Officer ("CRO") and granted 800,000 common shares at an exercise price of $0.33, which will vest over four years from the grant date. He subsequently left the Company and his CRO role on August 15, 2022.

  • On April 4, 2022, ASC entered into a non-binding letter of intent to acquire all net assets from a regional USA-based IT & cybersecurity company (the "Asset Acquisition").

  • On April 7, 2022, Plurilock announced that in accordance with the Share Purchase Agreement dated March 26, 2021, among the Company, PLUS and ASC, the performance- based earnout was achieved and the Company issued 1,154,676 common shares of the Company at $0.325 per share to the vendor in satisfaction of the earnout payment of US$300,000.

  • On April 7, 2022, in connection with the online marketing services provided by AGORA Internet Relations Corp. ("AGORA"), the Company issued 69,538 common shares at a deemed price of $0.325 per share to AGORA as the first installment payment of $20,000 plus applicable taxes.

  • On April 22, 2022, the Company announced that ASC received a purchase order from a California-based pension fund for Plurilock's DEFEND zero trust identity confirmation solution, representing the first cross-selling purchase order through Aurora.

  • On May 2, 2022, Plurilock announced the appointment of Jennifer Swindell to the Board of Directors and granted 300,000 common shares at an exercise price of $0.26 per share, which will vest over three years from the grant date.

  • On May 10, 2022, Plurilock announced the release of DEFEND for Amazon Workspaces available though Amazon Web Services ("AWS").

  • On May 17, 2022, Plurilock's Integra Networks Wins Tenable's Top Canadian Regional Partner Award.

  • During Q2 2022, the Company announced US $3.65 million in new orders and contracts which included US$1.41 million and US $2.01 million orders with multiple U.S governmental agencies such as the U.S. Department of Defense, U.S. Department of Energy, US library of Congress and as part of the National Aeronautics and Space Administration ("NASA")'s Solution for Enterprise-Wide Procurement ("SEWP") program, a United States Government Wide Acquisition Contract Vehicle ("GWAC") that were announced on April 7, 2022, May 10, 2022 and June 15, 2022 respectively.

Subsequent to Second Quarter Fiscal 2022:

  • On July 22, 2022, the Company announced a $2,500,000 Non-Brokered Private Placement of convertible debenture units ("Debenture Units") at $1,000 per debenture unit ("Financing"). Each debenture will consist of C$1,000 principal amount of 10% unsecured convertible debenture of the Company with a maturity date of 48 months from the date of issuance, subject any forced conversion in certain circumstances and 500 common share purchase warrants. Each warrant will entitle the holders thereof to acquire one common share of the Company at an exercise price of $0.40 per warrant share for 24 months from the date of the issuance. The Warrants will be subject to an accelerated expiry if, anytime following the date of issuance, the weighted average daily trading price of the common shares of the Company on the TSX Venture Exchange is or exceeds C$0.50 for any 10 consecutive trading days, in which the holder may, at the Company's election, be given notice, by way of a news release, that the Warrants will expire 30 days following the date of such notice. Subject to approval from the TSXV, the Debentures will be convertible at the holder's option into common shares (the "Debenture Shares") at a conversion price of $0.285 per Debenture Share. On August 15, 2022, the Company announced the closing of the first tranche (the "First Tranche") of the Financing, for aggregate gross proceeds to the Company of $1,245,000.

  • On August 9, 2022, the Company announced the signing of a definitive agreement for (the "Asset Acquisition") previously announced on April 4, 2022 with Atrion Communications, Inc. ("Atrion") Atrion is a leading provider of consulting, professional services, and technology solutions. Pursuant to the terms of (the "Asset Acquisition"), the total consideration payable by the Company to Atrion is US$3,700,000, payable as follows: (i) US$2,000,000 in cash payable on closing, subject to working capital adjustment; (ii) US$500,000 in cash payable on the date that is 90 days following closing; and (iii) 1,285,700 common shares of Plurilock, issuable at closing and 1,285,700 common shares of Plurilock, issuable one year following the closing (collectively, the "Purchaser Shares") at CA$0.30. The Purchaser Shares shall be subject to a statutory hold period commencing on closing and shall expire on the date that is four months following closing. US$300,000 in Purchaser Shares shall be held in escrow for 18 months to stand as security for any claims of the Company with respect to the representations and warranties of Atrion contained in the Asset Acquisition. Furthermore, the Asset Acquisition includes future based performance-based earnout payments ("Earnouts"), whereby up to US$600,000 in cash may be paid to Atrion. The Earnouts are divided into three equal annual earnout payments following the Transaction closing date.

Summary of Key Financial Metrics



Summary of Key Financial Metrics

To view an enhanced version of this table, please visit:
https://images.newsfilecorp.com/files/7288/135099_plurilocktable1.jpg

Note:

(1) Non-GAAP measure. Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA should not be construed as alternatives to net income/loss determined in accordance with IFRS. EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines EBITDA as earnings before interest, taxes, and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation, listing, financing and acquisition related expenses. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.

Non-IFRS measures

This news release presents information about EBITDA and Adjusted EBITDA, both of which are non-IFRS financial measures, to provide supplementary information about operating performance. Plurilock defines EBITDA as net income or loss before interest, income taxes, depreciation and amortization. Adjusted EBITDA removes non-cash share-based compensation and listing expenses from EBITDA. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. EBITDA and Adjusted EBITDA are not intended as a substitute for IFRS measures. A limitation of utilizing these non-IFRS measures is that the IFRS accounting effects of the adjustments do in fact reflect the underlying financial results of Plurilock's business and these effects should not be ignored in evaluating and analyzing Plurilock's financial results. Therefore, management believes that Plurilock's IFRS measures of net loss and the same respective non-IFRS measure should be considered together. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Readers should refer to the Company's most recently filed MD&A for a more detailed discussion of these measures and their calculation.

Quarterly Filings

Management's Discussion and Analysis and Interim Condensed Consolidated Financial Statements and the notes thereto for the fiscal period ended June 30, 2022 can be obtained from Plurilock's corporate website at www.plurilock.com and under Plurilock's SEDAR profile at www.sedar.com.

About Plurilock

Plurilock provides identity-centric cybersecurity for today's workforces. Plurilock offers world-class cybersecurity solutions paired with AI-driven, cloud-friendly security technologies that deliver persistent identity assurance with unmatched ease of use. The Plurilock family of companies enables organizations to operate safely and securely-while reducing cybersecurity friction.

For more information, visit https://www.plurilock.com or contact:

Ian L. Paterson
Chief Executive Officer
ian@plurilock.com
212.780.3255

Roland Sartorius
Chief Financial Officer
roland.sartorius@plurilock.com

Prit Singh
Investor Relations
prit.singh@plurilock.com
905.510.7636

Forward-Looking Statements

This press release may contain certain forward-looking statements and forward-looking information (collectively, "forward-looking statements") which relate to future events or Plurilock's future business, operations, and financial performance and condition. Forward-looking statements normally contain words like "will", "intend", "anticipate", "could", "should", "may", "might", "expect", "estimate", "forecast", "plan", "potential", "project", "assume", "contemplate", "believe", "shall", "scheduled", and similar terms. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Plurilock's business. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation, unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Many of these factors are beyond the control of Plurilock. All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof and Plurilock undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/135099