SideChannel (SDCH) 5 Dec 242024 Q4 Earnings call transcript

Good day, everyone, and welcome to the SideChannel Fiscal Year 2024 Full Year Financial Results Update. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Brian Haugli. Sir, the floor is yours.

Thank you so much. Good afternoon, everybody. CEO Haugli, Brian is of SideChannel. This by joined our CFO, Polk. Ryan I'm to I taking the everybody time for want thank again. This is December X. I together. off able know a day, but it we now to get pushed we're

things, So over into we then it I'll and to I'll over can take Q&A. overviews, I'm for financial we'll a of go kick the go Ryan then going some couple it to outlooks. -- and back

been of submitted. have I then You have ones online. got to that a of have this methods a there's seen number during call. And We've obviously, questions questions number submit

year, XXXX hit kind of a target we accomplished those it's mid-market has I those our ended went. at into fiscally will away not and but from is really this number feel how really commercial looking and with And it's all a We about and about calendar core easier of the some getting excited year is, like out to those. small goals Ryan the with cybersecurity going which and like businesses, on smaller this feel very we year good financial set are the of a where definitely any as services. kind for market not a enterprise and problem. our But specifics. market, as side, midsize, going whole internal

kind anybody have financed, not orchestrated, this like the has kids issues saddled issues CIOs, thinking that see on hit basement. their beyond our availability threats that. there. are are with like with in me dealing We've industry, out -- over seen product. leaders well spaces happen that These are now Enclave like We kind we a in how are mid-market sales But manufacturing hear with different been fact concerns. It's that And about enterprises within obviously, of mom's and of big larger here branched business a will then global we're and commercial well of well-structured call just CTOs, number cybersecurity. people, really shaped

triad, and major We X, by they're logistics availability within development impact is of is, at CrowdStrike to this the of a when on thing confidentiality has kind And a distribution, we a the and see create deal cybersecurity, this defined with. with about because integrity availability up they first When of saw And people, cybersecurity updating. integrity. systems confidentiality, look provider just IT availability. software warehousing. lot poor and of We it what about thinking really chalk think and a massive the global they that is cybersecurity

that The reality to the for seeing an is as either professional it and is clients squarely that's needs bringing and increase the up as as address what in of a for clients. cybersecurity And CISO risk ignored, we that it. that being to and very a are we type are risk accomplished we're or can needs realm a deploying in to for it the a addressed client embraced actually and are bringing that building be risk whether that something or of security is software as being then met we're our we right as the program address be up risk

that of market, things expanding piling professionals, landscape, lack the All keeps clients. qualified technical the of at in these threat the up debt the things

our and favor to of to allowing these playing us are things deals. All win

go lot 'XX 'XX. where over gaining we we are we're of who going a in 'XX, to growth where and have marketing traction we're doing, we why to, and our confidence is are, is This who what with

organizations squarely to risk blocker not So that are horizon them of a it Cybersecurity to. sales to the experienced there my their is why with a maybe just sitting that's to way that dealing operational address out thing Start-ups like customers. and It is this for anymore. risk space, for that why get on very looking excited it. is sell risk a to table. within not we'll a other still supporting is products kind is are thoughts good, of a exciting still be inside we're This their

entities can read disclosures It it the are like underneath is investors think a a XXXX. of peel and squarely Actually, that The I'll regulatory be supposed in underneath it go some I ahead to. disclosing what and them. that saw happening challenged I you. go on up lot the We cybersecurity of of this issue with are all shaping those risk that front SEC honest, I I are all different bringing read see need did honestly, -- be in in start factors challenge and XC, back. you program their the of looks to publicly of I companies section, call. XX-Ks traded to the it's like. that

lot a read of them. should You

Some embracing. us I'm of some not what couple this week We a of allowed out XX-Ks had them are their out. really what doing doing they're poor. happy. and really them were call very put to And organizations or it's just interesting of clients are

rank We've we strong. are excited believe, really cool 'XX. continually on what we in marketing, expanded searches. what around We've to doing. we're building. they very are and going "Hey, what ready use still that things to spot in about this that an a risk." So market, after. great from disclosing our presence, high the and brand why not, they're organization our And It's done the address primed saying, that's use capabilities are we're was just is our what inbound, we but some doing SideChannel a Google that is is right these we're Some we for we We way I'm for do vCISO, and our hey, them

telling within company? U.S., ChatGPT, who's not starts it ChatGPT. Perplexity because ChatGPT top and always mean about But that, way that's go We're the telling now high about us. back, people vCISO ask best and will It's ranking the ahead been us. firm spit people vCISO It is. the Perplexity, the in I who's

number of not Google because landed cybersecurity The on we've just It's how that. clients is find expertise. fact, search. people landscape of changing in In a

want side, of last that I'm to working doing continued excited sales. been to the right? inside at to way dead. that the team approach couple data we're with talk people of on we've the And dial over know very favor. work. what to the embrace XX-year-olds people channel. opened smile up What it's sales cold type client SDR junior years direct talking we and the pragmatic have about there and up you out our our We've of It's is call hiring expansion to for in experience. about. around want who look opened to to of They When right and doesn't a up days Buyers talk current and of practitioners to that. who are presence, the cybersecurity build We've people The XX, doing type metrics they're base. inside the build what

with to compete small, providers experience. us They What with who that and them. want our all rather MSPs, day channel, talk about service and they'd in doing They partnerships, are now vCISO large can And talk other MSSPs and partner. approach the it's to that the other who in favor. our want and somebody has we're don't want The excited that just have been I'm realized on seeing to super working to working to we are work get them our we to call. firms, they since thing really actually don't X,

they So have have they they as audience and us. a base are captive client channel for

see Let "Hey, are listen, us that delivery." software, us And that let basically be that capability. be we let us saying,

and we what of go to channel get person our be And who work program it in doing just us You sales now your one can in to us our around are has go sales audience. and to allowed front XX. that, talk with

there's partnerships. solid having exponential in So good developing and a program an factor channel good

great. Now going partnerships not are all be to

and a frogs, solid deals to but and get in, the landing start see you right? going in, starting contracts unfortunate, for lot kiss you're how you and we're process flowing good nature of to agreements with these and once It's business. you've partnerships the of that, got start your to and going partners good But on work a the onboarding right? training that's You're to

in I'm going into unlock our June the I in We mean is channel of year. going like guy very, charge leading very, robust. very just to of it's in our XXXX. excited pipeline this hired what about

getting fun. of kind do the just On a adoption. a getting lot had a bats. yearly around some good we've at a of really amount the good of Everybody We right But in We've internally we good Enclave movie, types it's things front of discussion folks. Moneyball amount the get We're of bats. pipeline. growing like front, centered internal whole analogies. had baseball We're at knows I of a

Enclave what so not identity with so management, different host-based gateway, whether but in can like it management because secure machine that multiple complex, firewall have one service X it's it's functions microsegmentation, just enterprises versatile, product all so that products a And intelligence, X generally web need it's of asset of they're this. to is and do different single are now, direct for multidimensional manage clients these vulnerability glass organizations, organizations going to discovery, pane use they're all able they're able for position to providers or and themselves, with to or be to we're --

things. able have each don't industry products And hearing X always from this do they feed to these closely they with well, and want is the to that's so and product, do. aren't And our things related are in we're other, approach what why to they what these we one are has Enclave been, They all different want. off

also stand each in own. we're those can think blessed modules of of those actually their functionality Enclave I because each on and

So vulnerability that. type who applications embedded got things like already of like with asset where or other somebody commodity is discovery intelligence or you've

really there's to as don't that to We our questions the will PR. lot nature in them, initial to we in of I contract that a we me. into a questions. much we just Trust to DoD can't everything go that contract just the as customer sell the out I good. I and our put sell as first we and Q&A I'll And works did, Due the that that. we and PR, DoD nature we much much try could this, favor. our share disclose positioning part more number what the the of with about We I in of else. approach been is later but on there got the had and can know of have of have of than the did. package. with very tried

site the approach deployment with a with Enclave on is Nick that with today working And foothold. initial is them. customer our

in the a aspects customer a need this is There's and Our expand. can needs of other it expand we're DoD component that Right across to do. and what feedback goal this it. now, will of

is Our adoption the old means do DoD. goal the to revenue, of ways And with the of a pathway school they to it's how things -- expanded replace legacy Enclave. expanded inside

worth on have itself, usually the we they about talk that they've DoD, through the solving what worked. very always is you're We piece I that in that. Ryan, multimillion-dollar your they whole Where gold. for performance. they're seen concept because service What past this that. or here. other can Everyone mess The replaced have if wrong big now to product agency up It's I Inside on -- this to correct or service this agency have get me action. buy finance going legacy your has to has is hardware

same years it buying also as a going that and before. introducing hardware. are introducing software-defined they're networking every not year they they and that but them CapEx nothing means didn't only -- X are to thing, and as to They're cost replace or removing we from a -- we're the it capabilities new do As have

do, architecture. apply and poor hold we're the their areas and you're word. through problem things, spend and Ramaswamy for If and So see down our the poor the are solutions, to more remove approaches, What lot, this federal to anybody legacy and costs going Enclave going favor of Elon that, going is doing and more with thinking The costs actually solutions. solves They're next we think they what that hopefully, way can do they government to are the and more on going cut within becoming into DoD modern a better, their old secure. work administration. in cost-effective lowering remove following wasteful I remove crazy

we're of So a lot solving here. in problems

about I the -- member, to into mean, into I inroads to mean is excited are with we speak board also and Enclave our with this DoD. CTO on we about done. the have what an product white label do we it we bullish solve what we're We're we're And OEM it. them. looking can very else are on the where where for over in ability this we're and to doing other of now very making is solutions product fellow other else space this impact, announce it doing probably what he's because can next partnerships bullish that we not quarter with and be I'm these we're ways people and We're on the making problems Enclave behalf going that with pretty and it. to are provide I'll can Nick, this able to product. excited very

want our that there they now bring approach partner, our do And behalf. products, for they're our on into just other like solution solution to channel does we right? we this selling works what their with we capabilities on find do, can out services, If can solutions don't so sales and

overall, again, in good just after right We're we're a the opportunities. doing Enclave, still what So investment the getting solid market. right with

able week. might bring think at seen their one I left top-notch on up principal actually Dutch you Dutch architects, this maybe to very well guy, AWS be and industry. to reinvent in really of I'll security announcement respected here. as the wrap cloud AWS recently, an We're He's fortunate Schwartz. have

recent surveys unfortunately of other is for to to very you adoption, you'll top put YO and a see ability cloud of experience us. the the that -- hate thought side major Our reports -- the in surveys, cloud the last is that tremendous bring around into movement and cloud, the When still leadership that of and Ventures and years a IONS sales asset I industry for audience kind leadership, cloud level read term security from real and captive but because over security. now type XX

realizing, they're I not. now and that, it's no, doing all is are people outside secure. was It's walls. my thought is "Oh, now I And not what, my stuff Azure AWS doing Oh, that. the cloud in guess thought

I Well, secure You're Multi-cloud Azure, you this super bring of I'm will realizing of ability that, and doing "Oh, still to capabilities people delivery, type along God. other AWS pull with that, about But and we're Google, are. responsible. how People which Why? markets confident are our Our these types are products that. services, in those are do good just through now realizing into feel what it. that? realizing environments, clients you

I looking one mean best we the build got a of up build really team, to in We're really the a delivery. business.

of our So to be and as deliver current of deliver new to then inside aspects a that and facets clients be new we have and able number with Enclave our clients different to one retain, to able deliver with products. channel expand into to obviously

All right.

for good Ryan, So come the want then Q&A. missed, I other to all with that that, it touch we'll turn to back and hopefully, I over who on things will

Brian. Okay. Thanks,

in in our that calls flow ourselves year we have I'm margin The confidence new had -- these press case of morning. We cash fiscal well. wanted to we felt was we being May pretty in to understood a cash We as in past, read set are that done, goal year. grow out we've profile we in do of revenue. positive ability fiscal in folks this to release just repeating you've XXXX used flow positive In this say to to our got on a came this. the that like we -- me that declaration. which lot we next we said conversation. been our some that April, you've accomplish the formula in become At made during point, XXXX, for If to our you've heard XXXX

And felt so we were some focused like we on unnecessary taking in term. out that costs short the

of lot were out marketing. a area us, sales that for costs of and in came Unfortunately, those the

you The to And that we question order was to access we so really from that operations. because haven't capital. have achieve answer some sacrificed did us don't we growth as heard to flow maybe positive cash why in

stock severely of folks a undervalued. are to stock we is And at One, in dilutive would for Issuing be that our the underpriced, so price reasons. this think excessively price different couple new currently a Number of our off prohibitive from cap they're us really got table. fall really warrants warrants the tranche engaging cap -- that two, the some Those we've capital XXXX. are table in even markets.

so And XXXX. April

that to And through so real means cash cash -- our our provide of source only that we going can operations. is be

upon to into to cash cut results down. flow this formula, don't announced in the allowed leaned growth manage slowing that's that margin, our our depended some ability the we us morning. expenses. you we operating that We create so And see see And

going in deliver isn't clients. underutilized unexpected. some explanation that had our growth to that margin is little that pullback to was some employees stop. our We Our that we a year had for this The

And that of goods our margins. therefore cost our so we flowed had costs sold some excess decreased and through to

reverse half Last allocating our margin scheduling we up a approach and change that and our we our as started employees line. that 'XX, benefit gross trend think of will to 'XX to show in year-over-year

So do OpEx gives stays in announced growth the which continues, we controlled, in for hiring us think just flow still salespeople. 'XX, improves, that margin he's works cash what to confidence Brian engine

few new 'XX, up August. looking sales there's that in We've at one weeks, here new and position salesperson person in joins got well. salesperson the fourth New joins a May as we're coming next in

toward of toward would investment lot We Enclave. oriented a Enclave. is So maybe overweighted that say

platform in year into making this year would are SaaS of to SaaS a couple platform. tremendous support be fiscal who really investments that our think so I can next area. We're a off months the the XXXX. that's successful in Enclave on -- us fiscal a doing opportunity we that everyone call understands And why very is represents And Well, of created develop a a why we're that? value for

we got us our are XX QX, items -- of our That will with next, neutral, one to cash plan we that's hit XX maybe line. cash QX, from the from But couple slightly We higher, quarter. flow saying we're working flow so -- like on tracking our in we're December slightly flow cash looking QX, some so the quarter capital a lower. is operations. We've the offset be and to I'm maybe that March the quarter generate of likely QX, what

would our we of internal of expect be terms we're where terms in cash. But tracking, in to

continue about. I got investments some we've effectiveness the There's doing talked monitor confidence our that that so metrics And internally. the look we've marketing the to of leads. at we

Our is at time, fiscal this XXXX lead fiscal it The where our in year it. pipeline of deeper. a in much year ahead generation was It's got in clients mix is better of XXXX.

confidence And we this year. least in at at have in point fiscal well, line so as that the growth

So our think release the read details you around statement. I our And balance income can the some in sheet. press of

turn I'll And I'm and so the back Brian, when questions take the group get going to any to we have to Q&A. you, floor may

Yes, year, to not Thank toxic to tried kind to sizable, these couple known allow Ryan out of a warrants. just year my things get a with We've on with the clarifying conversion about Ryan. warrants. work with kind Perfect. We reasonable new from came end to that away warrant from holders what these We've RSUs of said. warrants a would you, through. warrant last this these sizable us

everyone reason, brokers And had for pretty close at hold the of wouldn't they to But that us that's is the money. but warrants be offered a taken loss honest their like to have think investors, move XX% allowed -- or I'm but out off like the I Pretty I'll conversion, using I'm would April out for the we with holding sure, why pleased with who they're that they kind good, of not are not I'm we deal they're honestly, are have XX% that as in through forward. XXXX. whatever and just whether out,

be their loss. will it So

to Markets opportunity, Capital do move aspects with hinges The on. of kind the we're around going that. going of what but had we're is They to

We shareholders Ryan today think be So to I just warrants are stock that to said, are don't and at really, like again, price dilutive we the undervalued, think, the again, the we're another we want just, blocker. at.

that is. it what So is

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services the and but and using -- to now, we've be our forecast not then goal rebuilding capital or that that and sales So so really team towards products is up and start can let's or rebuilding and at built sales just able let's there. the looking a getting that building we expanding there current marketing out out out the take growth our the start

of of But team was SideChannel, we think on the leadership on Directors everybody Board yes, an the investor call. it the only pieces I as to had obviously, want everybody behalf for executive I on thank and kind and clarifying that of this.

us on seems how I Anybody out don't SideChannel that know does figure that to Board I run the if can we why are Hub the that go the could board but electronics most are Board, and talking and category, be that for about components So somebody that online we everybody manages underneath out that, and knows us. Investor that. that I website, to Q&A get from category people where still got read over to that underneath board with

that. appreciate I And

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go with of couple let's a that, questions. to So

We a revenue do a DoD? contract have question about major to attached the with

I allowed answered We're as did. hit that as that. Hopefully, think I to earlier. much say we I

split When can a expect we and an reverse uplisting?

chime to We of board. our price get sake in free to is to do see to Enclave feel But just just the want sake just just but We downside consistent view us. understand doing to the here. want essentially, with to revenue-generating doesn't going discussions quarters drawbacks, for Ryan, stock we the and have an more. behind make want uplift themselves, it more. it another split We doing reverse to NYSE grow of not to of OTC number And to for up up the we're like with In has advisers, its it. it our actually sense it. there's interesting a

uplift. into there's let's fingers just it lot things more doesn't, not snap the that your on. like, So you of a than just can goes one That

of otherwise. that I've a it more So today, little understand heard I definitely hope bit it because heard investors kind I've and

touch to to keep Ryan, question that -- do on seems uplifting split coming? reverse want business the you The model

no. No,

think to answered. I you Yes, add. nothing

this a tomorrow, significant shareholders made right news, to I great XX but been $X.XXX. XX% I assume, it the and like XX in last everyone, amount But do the up -- Like do I and it set to it mean $X.XX. we like Look, to -- price right? set now, think sense a more for obviously were doesn't to doesn't for we're make alone -- up Yes. there's go the the the over trading to the the it sense is love mechanically make significant much and It up time. ask if sense price uptick would $X.XX, see guys, from, at just stock was amount ask on that today the to last days at us do day stock the of today. we

growing the So definitely do let's the announced. and socialized will we just it yes. as And it not keep let's It's building Trust me, growing. when will -- is going be will business, right. it to be keep we're be time

only Business solid, has been model has very moderate. been but growth

it, back. and position And we expand I now we marketing be able to a are why sales touched think in pull Ryan our programs. on why to did

So you're going see that to in XXXX.

slowing aggressive conserved Another you it's dropped mean changes margins is question have significant. dropped think here, towards our don't or think revenue I significant. cash? Yes, slightly, They not. don't margin the -- don't I slightly. this push anything been

Where do you years? X see the company in

That's go XX months which building and CISO as a like security because a I'll generally never program a I've you out plan -- this, set a for don't tell or security growth practitioner, security a company We do I on out. probably us models even years? bring Where talking we've in think built try much. Ryan to shifts see back the is end that me landscape to the diligently X I just to up the so clients. here

need I've to belief that obvious group. the But XX% you as to at heard on the see would growth. Otherwise, you're say kind a be XX% Ryan's me of services really like side, -- -- to as services to this, I standing held and growth. like still growing

services. amount the trajectory is. don't the -- On we'd I every we is a business after of $X.XX significant business, know vCISO adoption ideally, I vCISO from of was of And you much But other much our remember Enclave, how we're merger, like what of other kind when a if was know to of of how we're dollar cybersecurity the about talking seeing back doing the years side, of don't product it services. at like was couple start the like it $X.XX time, growth

dollar recall, services And we for wanted flip every other we're where vCISO. of services $X.XX that if for you'll doing to other $X.XX,

in want still and go of we an that. to want still to we then see do Enclave inverse maybe expansion where what hit a to there. what is go carve-out that. doing So We is also we're I want think And

of is ultimate every dollar structure $X.XX we other our revenue -- capabilities to at product the that way. services is different you're have and for where $X.XX that of I leading So a Enclave, think our is that of invert into goal and it's looking vCISO, of the out the there type

a we yes, amazing SideChannel company services company about no So longer services X years, line. and product an leading SideChannel is just an as product, talking with in amazing with a are

Is sales pick revenue will growth assume lowest this reasonable year-over-year growth will Other that So it question the here? to future. for be foreseeable QX up? the

I lead to you Ryan, that might of quarter and quarter we're touch it seeing based mentioned answer what that? kind this last think but... do want you versus on

to seasonality is purchasing but We then that a just late we've QX, concluded bit seem our pipeline calendar an clients. what is year really It QX. -- cycles. definitely for a strong in there's QX, of around -- uptick year driven QX what calendar seasonality new to business. have the I calendar Sure, think And our the year

I think on that this sees just aligns work. without businesses everyone normally call

any at is been different that's been client than that And least that's so us point. that We acquisition to going data history. changing, We don't be at our have telling our was this new last year. don't see that's -- it any our

we'll that's to was how But going under are think we'll different spend. things Enclave. some don't, this in be more a before 'XX. evidence don't there's the But predict of a our new a be any terms little it, world. -- that be turn putting which the have what around pipeline would be is seasonal if there discussions history It to into which to we can in get at quarter-over-quarter see cues would Enclave of course, point, year, sales us 'XX than with like. the at half exploring we would animal is in see -- spike. we get have of of that be normally till But -- beginning looks I wait in We everyone's software kind us what Of don't it that enough on fiscal change we understand the year there would in that activated for you second a to we'll budgets, year sense revenue data going going any make saying

do think mentioned, curve, out our terms partner incremental new, that the put though, revenue going quarter-over-quarter, Channel seasonality ability let's that quarterly seen. emphasized the couple We are it a to relatively the into Brian work sales plays have have, in some a channel. does of on we to that is how think call yet be we our of results same. to it's But and initiatives be

mean, Yes. see the starts Thanks, that has We Yes. we Everybody right? see always commercially, got all Jan time. budget budgets I their X, Ryan. start.

some you during government of kind the QX at we actually that. always October to in standard spend We a it year minute That's you year down pretty are least at services? spikes a corporate, I short-term cash. So hey, stuff. on get is. you're of some Fortune some see start, got for through set federal to up -- got QX calendar I people like like see on a like, trying is Government the additional I've QX, we've X different. -- tuned to an that when in calendar projects seen They're XXX. where lived late was little Or CISO

most different that, the little for on federal is focus a are space. but our part, on states Some

start, X, They're to X meetings, calendar year be those released when you're an those October get for going after trying can X. things starting that set year October into money use up get calendar X, then which generally means

lined inside seasonality is are those just of So buying. It's around of we a up lot trying to and constraints. budgets, there against play always

can All all right. online I find. the are Those questions

the please, anything, are missed if a of drop from you those, on please line I if Sorry note. any

the Q&A call on Let's live. get from and into anybody

[Operator is from Jacqueline [ Your question coming first ]. Instructions]

like noticed I noticed We're on investors if seems we've the the to by little not like investors block. into attract -- mean, any -- actually I the just company? isn't it wondering we're Brian, it's just being that the I or being traded guy like But some plans stock stock. was Yes. additional there's recently,

Yes. Yes. doing hear Thanks, well. number retail a [ I Jacqueline initiatives. of to on hear outreach kind mean Glad this. you. we've different ]. done from you Good hope of I to investor you're

continue to to we're think do I going that.

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least we March we able February, go He cold. it came So had definitely was I But it folks worth He's it offices. warm. to was Ryan some where to where still Boston, dinners at lucky. with back net to family ultra-high to go number were with is -- of did a net high worth, individuals, was XXXX was once. with January, me California down back down where

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other kind of definitely was that, we're within good And we quite learned of get ran of bit which space. the still So means but into and disheartening, to exploring we a retail learn. to kind

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that's what's mean I us things, to So go -- that's to for happening. these

a of one both kind to show that, idea us almost for conference up to a standpoint, optic like to about it's bad So is from that. no there an like talk and really

and OTC brand. find think that us, and it's to worth, continue our in can family for I ultra-high retail net companies high just the to like continue to space for us offices to So individuals, worth listed net just buy build continue building the in

in Ryan of Probably, IR and two point? out there build company again much financials and I representing to wasn't didn't What an honestly, we and tremendous contracted, very company fact getting pretty show we're themselves. way Nick out kind that do I say Will a stronger, with need just groups company go strongly our the outside both at in investor amount is the I in are that are value relations. that. firm that standard of believe feel the of and will the pleased continually as some last as this Ryan it. better that industry. approach getting I and the stockholders leadership to see build a to strong kind I like engage that the of had, we experts with field I will we do major

speaking awareness a to building in? chalk I and the financials. can any that's conferences way, more you exhaust going have brand discussions, talks, ideas other strong with So think go do Or get want coupled are you that long that? if that we way, in to do our front and where did Ryan, we maybe I

and cash also Jacqueline on investors then -- stock. to get think, to what Yes. Yes. you're one, people in create prioritize, [ suggesting. -- flow want the to opportunity awareness selling create we Thanks, to we getting think behind. the is of and those do that to want ] get two, do we've get I activate things, positive; that we this What understand Brian. awareness and new Both We marketing. chosen to can story want of

make something want talking rather sure than that we're we just So being present present talking, and to and substance. about of

out doesn't balance has company a dilute a running that And of those of and the strong I all of think needing cash to things. that sheet kinds have risk

be can we We intend around are, that corner. than and corner that. do a turned we've So to we further

thing just a quarters those think growth. investments people when sustainable and attract stock. of second see that's that's The retain we Enclave attract story to think some it's I going having X new announced I some is think And probably the attract, not things, going to in

I been us bit. So know for a you've with

a to few filings we've that that. thing that, going sustain quarters to are get substantive we few people understand. have a that -- got that's before story we we we And public and in to that think But one of patient, been got our growth we're appreciate going done. more think reported You've Enclave

Okay. I do have one other question.

explain talking about to keep you understanding I so? they the could why and were quite wasn't couldn't are toxic, as and Warrants toxic, you -- how they quite I So they're why

Yes. They the the means what's sold $X.XX full stock a price causes have at which increase the any that warrants to less called decrease. that's of a warrants to provision, quantity of ratchet than price and

So I understand way warrants are problem. invest it no well, those when those there's a say, in they would your the because becomes very dilutive who people terms, for existing a the they And event warrants, company look at stockholders.

be these and position go in cash pretty up are and need good to the warrants you me. for If taking going a cap get going cash, not end strong to you that's table

full we're how -- of away. about not be like. capital because able is the -- this the right thing anyone away table. the No, it's clause So the we're undervalued you? to that stock looks We're that course, these growth the scare right Warrant -- now. anyway ratchet to understands approach even do table Enclave going ratchet market That's wouldn't that that because getting off fully clause And of But -- be not off for warrants does price pushes or services. scares help that full to what people

Yes it does.

[ ]. from Luke question is Your next coming

live. line Your is

had a insider a just month question that out trading the came I regarding report ago. filings about

had the price were they that repriced to Board, were options $X.XX, of given the So original they an but to strike $X.XX.

of So I obviously, went lower strike want was the Board that then price. wondering interest that is just And repricing? the into because they to adverse what a

talk you if So that went into that, what could about bit? just a little

I'm going don't able Ryan, because a wrong to thing. this mind take Ryan, I to don't the that. be going you're you Yes. to better want than probably can. I lot you're cover to just say -- to Ryan ask

Yes, things. yes. No problem. Yes. Well, a couple of different

has First, been positive. to flow us be push our cash Board extremely to supporting helpful in our

a achieve were used And Our to management cash making receive of because the stock. they receiving as a quarterly chose much Board to well to because as quarterly of some quarterly we flow -- cash being sacrifices cash forego that we company, as payments team as how positive.

of So around into do that we them appreciate in the of how supportive that conversation, we how do we we're for incentivize lot that a way. had we we Board, how we doing. compensate do really And when got work Board the our being debates

about And at should we made what ended in up just those had miscommunication a arriving options. a exercise been have options. We price We the mistake.

on say we're us heard few call, you've we undervalued. think think a this I times

way just and in that we We so a saw honestly what we mistake, mistake made the recent filing. had most correct administer agreement. in that's And the warrant you the to

your question? does -- of that to the heart So get did -- I

future. about the for Yes. thanks I'm and really That to say great today. to what's call. I was want And a excited shareholder, really has in I come I'm This been new great. just it. appreciate the

Oh good. Thanks Luke.

obviously, its because are It We week to know awesome that file next our to afraid Board of Luke. kind see new our I in this Board. to offs and appreciate Ryan meeting what that what had we're to I part doing we Always I that today vision. I was mess was we're tie people compensating at looking entirety with the we seeing the Board. Thanks Obviously, approve, out. just of XX-K compensating said are released our Yes. looking we the that. kind going week,

We taking stock much with the company are is a the just like of RSUs rest granted. structure different

to made and So an just we able error, program. it, the our We able thankfully be to to process, it. correct we're same were catch regular they'll in

because the they growth the So is predominantly Board company very much the through stock. of incentivized are with incentivized

working to Brown here, want but and Hugh as audit they So obviously, being I lead and -- our our Board other as see and retired it great got Nick our General a Debbie Board. grow inside we've directors, with Chair, as member.

introductions to Our on and into them networks, feedback go we're get to to guidance, doing. get ability them their their their what

their on obviously, It's guide the I've have we're stronger publicly we governance then CEO a we and I'm both really again, accountable experienced to company. for doing. been and And holding able I of Board. time enough traded have glad us that also a us to as now. management. team better is couldn't nimble be the but this first the what ask Remember

we're basically to accomplish and grow. what we Board need what us glad trying So I'm the have to able on us -- that I guide do also we to help to do be

So...

question Will? is Your next coming from

didn't wrong. I that polymorphic Maybe it It seemed clarify it conference, legacy the like about previous positive. something update software Yes. there like that? maybe seems some last Could I'm it of like you in on that was maybe the you one understand you the that. mentioned seemed inherited. And was quite

Yes, sure. do I can that.

Encryption the retain So Core and patents we the the around PEC. Polymorphic the or trademarks still

listing website that. to can If SideChannel sidechannel.com on see products, the you the under go you

the adopting NIST, other number say it's -- of to this not models. I'm a one, With going With different NIST NSA.

They've in since X initially X of months, one used to down, think In greenlit fact, actually for they X just had the last adopted be I them. and encryption. post-quantum struck

But XXXX. that came X. back process So they're and to went only whole in down

for essentially low it we can communication great an just that of encryption. make communication, no streamline We can So environment. It's engine smaller. have kind

be very changing use something in explore. within encryption But post-quantum good these to people we're that as making It's for space. cases. should IoT, It's the option, encryption of like good available types satellite, it's that early still Enclave want an for and it's and something

it. it's the cost what leading, us was that that will of old entity. merger we something it. retain maintain, doesn't doing with maintain anything Cipherloc and It did inherited So the out I we with the we'll really to and SideChannel we're reverse we When patents

But doing what with we're a we're needs seeing around the on focus of more Enclave. really

the encryption. solution searching for there was the out aren't that folks So polymorphic

innovations all we a all we view, at and and got to of them. them and keep number decisions merger, remember, maintain to made the when had to looked You were of too, good. not after inventions things different In of not Cipherloc push try my and

PEC the of Enclave. things little some but focusing bit lapse, we've for our investment more on and some growth let more a our keeping we've activities So we Hopefully, alive, mothballed, you, just but we and that helps are things our are clarify Will?

Yes, it does.

a question Just quick of thought.

Polymorphic satellites. What good I You of make the about for that was knew that nature. Starlink... communications

So low run communicate consumption. is lower it level allows want needs is What it. track consumption that the PEC a in space of But thing I same some to like pretty The Elon honest, I encryption, system like or about what hardware. right? communication power it in of but do the everything up can am biggest satellites you low satellites mean ground type don't is with are have do and maintain in communications, be I -- got that -- earth communications You've right? not communications mean, not I Musk type got maybe boy, orbit that's on of power you to them to cool. I modes, to going I'll fan actually back you've

where those factor of they're that plugged form to needs the not about happen, electric So into deal grid. environments for devices, it's Think a right? small IoT devices, types

batteries. on running they're Sometimes

that not So infinite. power do and that -- that cost they're is anything, if they power, to going to means it's then going

maintain heck that's think if Starlink chance they where could consumption, a saying? in that the got Is yes Enclave them their why -- And sit can of and power we're anybody So that know in where front you're do. plays reduce like that's good Do would I still capabilities you team that's the how to tell a meeting if a I there? need case. use But really I heartbeat. with PEC what their that encryption, -- you and the encryption well. And out really what we PEC, Enclave, take then we can

met No. but lost I him. him, had I

just bad. So too it's

that's but those we No, kind mean opportunities I I joking, that are was okay. are entertaining. of

for this of other change I think satellite people I a year see there's yes, we're next things mean mean lot like where some ton is to operating a and start-ups. satellite of that's are. going there's stuff accessible how -- But I

clients ton around a orbit that lot stuff One the space doing around a orbit. there earth manages LEO in lower of groups of stuff our low the satellites or different earth space. are things out There's of and

remarks. for you. hand Thank conference Q&A ahead. go our That concludes I'll the session. now our back to host closing Please

for joining the definitely call. Thanks monthly for you, Obviously, of don't online. everybody, with out more a out what reaching know I I Well, to add. Okay. just what staying touch we're We're newsletter. putting else thank doing. investor in

to see going shareholders. I to You're from more and communication Ryan consistent

and so us sign-up So a do that we'll make monthly basis. that a sure get sidechannel.com. e-mail, get on that newsletter your you you sign information, There's up on list, get on you

do when to the Boards can. time, monitor time I from I

make on follow Twitter. LinkedIn notes sure But as So my I'll this, in, chime so asking say just you're I me continue know try us kind can. you then of I on to on some question. I to there. a yes, definitely name drop and on

kind the pushing our the same messaging I to of through press out stay are then obviously, stay our there Board close thing. -- the so still the We asked well releases, as message. all look, close to And just as

I shareholders, As to us see want see all to grow. want you us grow.

But and company. looking friends If like tell you're of them we'll firms place help and or around people. you're lot people happily just anybody. That's if us which good whatever, and they're have don't a to portcos, in you you're banks, help network to experience on your in a CPA the we company mean clients. their a good clue me investment and to then a talking this lawyers because There's why I what pathway you, your let cybersecurity, they're business great any equity their happy started they firms, meeting the in whoever, that, about tell have doing private stuff. in matters the where folks with and first It's addressing seem us. at for

all the So, on Board leadership your the out. Hnatiw, the the and again Thank the Polk, I of And has CEO. that, of a time Merry Year. want of Haugli, Ryan And and I'm you the behalf to of SideChannel rest of today. New holidays Christmas Nick with for Brian team we'll and Directors hope rest good thank close everybody you.

event. you, Thank This everyone. today's concludes

may and you Thank day. for wonderful disconnect have this You at time, your participation. a