Plurilock Security Inc. Reports Fiscal 2021 Third Quarter Financial Results

Victoria, British Columbia–(Newsfile Corp. – November 26, 2021) – 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 nine months ended September 30, 2021. All dollar figures are stated in Canadian dollars, unless otherwise indicated.

“The third quarter of fiscal 2021 saw us deliver strong year over year revenue growth, achieve multiple operational milestones with key product initiatives domestically and abroad, while having our organization highlighted by winning 2021 Cybersecurity Breakthrough award,” said Ian L. Paterson, CEO of Plurilock. “Many U.S. state and federal agencies have become our customers, validating how integral security is to the structure of government organizations and why our organization is a leader in providing trusted, reliable and simple cybersecurity tools.”

“Moving into the end of the year and 2022, we are focused on executing on our stated strategy of acquiring synergistic assets that can help our operation scale while providing our customers with a broader range of options when it comes to protecting their enterprise from cyber threats.”

The U.S. Cybersecurity and Infrastructure Security Agency (CISA) recently issued a binding operational directive, titled Reducing the Significant Risk of Known Exploited Vulnerabilities as most hacks that occurred in recent months have targeted flaws in software systems. The directive lists a number of vulnerable areas where cyber criminals will capitalize on and enforces mandatory measures to U.S. federal agencies to act upon. In November 2021, the email system of the Federal Bureau of Investigation was hacked as thousands of unauthorized spam emails were sent on its behalf, underscoring the graveness of cyber defenses for major government organizations.

Third Quarter Fiscal 2021 Financial Highlights

• For the three months ended September 30, 2021, revenue increased by $6.6 million as compared to revenue for the three months ended June 30, 2021.

• Total revenue for the three and nine months ended September 30, 2021, was $15,245,948 and $23,926,019 respectively, compared to $168,854 and $351,705 over the same periods in the prior fiscal year. The increase in revenue is primarily due to revenue generated from the new Solutions Division post Aurora Systems Consulting Inc. (“ASC”) acquisition.

• Hardware sales revenue for the three and nine months ended September 30, 2021, totalled $13,866,649 and $21,447,857, respectively. No hardware revenue was recorded in the prior year. Electronic software license and maintenance sales revenue for the three and nine months ended September 30, 2021, was $1,294,124 and $2,099,934, respectively, compared to $84,915 and $248,395 over the same periods in the prior year. Professional services revenue was $85,175 and $378,228 for the three and nine months ended September 30, 2021, respectively, compared to $83,939 and $103,310 over the same periods in the prior year.

• Hardware sales revenues for the three and nine months ended September 30, 2021, accounted for 91% and 89.6% of total revenues respectively, compared to nil % for the same periods in 2020. Electronic software, license and maintenance sales revenues for the three and nine months ended September 30, 2021, accounted for 8.5% and 8.8% respectively, compared to 50.3% and 70.6% for the same periods in 2020. Professional services revenue for the three and nine months ended September 30, 2021, accounted for 0.6% and 1.6% of total revenues respectively, compared to 49.7% and 29.4% for the same periods in 2020. Hardware revenues was the new revenue stream added to the Company after the acquisition of ASC.

• Adjusted EBITDA for the three and nine months ended September 30, 2021, was $(1,244,593) and $(3,286,133), respectively, compared to $(276,205) and $(1,313,954) over the same periods in the prior year.

• Cash & cash equivalents on September 30, 2021, was $7,050,291 compared to $1,721,179 on December 31, 2020.

• During the three and nine months ended September 30, 2021, the Company generated $1,904,265 and $327,717 of cash from operating activities respectively, compared to using $346,795 and $865,338 during the same periods in 2020.

Third Quarter Fiscal 2021 Operational Highlights

• On September 15, 2021, Plurilock released ADAPT Administration Dashboard V1.2 to customers under the Early Access Program.

• On September 17, 2021, the Company transitioned its auditors from Deloitte LLP to Mazars, LLP.

• On September 29, 2021, the Company received a SOC2 Type II report from the security and compliance firm BARR Advisory, P.A., indicating that Plurilock met all requirements by completing an examination that focuses on five trust service principles of security, which includes confidentiality, security, availability, processing integrity, and the privacy of customer data to obtain the SOC2 Type II certification for the ADAPT and DEFEND products.³

• On September 30, 2021, the Company’s deployed Plurilock DEFEND 5.4 in Asia. This was the first time Plurilock DEFEND version 5 was deployed outside of North America.

• On September 30, 2021, Plurilock was named “Authentication Solution of the Year” as a winner of the 2021 Cybersecurity Breakthrough Awards, for its cutting-edge DEFEND continuous authentication product.

• During Q3 2021 the Company announced US $8.36 million new orders and contracts which included US $1.7 million and US $1.9 million orders with the U.S. Department of Defense that were announced on July 15, 2021, and July 21, 2021 respectively, an order for US $1.08 million with the U.S. Air Force that was announced on August 23, 2021 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“).

Summary of Key Financial Metrics

Table 1

To view an enhanced version of this table, please visit:
https://orders.newsfilecorp.com/files/7288/105303_table1.jpg

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 September 30, 2021 can be obtained from Plurilock’s corporate website at www.plurilock.com and under Plurilock’s SEDAR profile at www.sedar.com.

Investor Webinar

Plurilock will be hosting an investor webinar on Monday, November 29, 2021 at 3 PM Eastern Standard Time to discuss the Company’s Q3 F2021 financial results as well as other operational developments.

Registration Link: https://us02web.zoom.us/webinar/register/WN_xGfGDXp4Q4-5IK_IJyjGpw

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.

1. https://www.cnbc.com/2021/08/25/google-microsoft-plan-to-spend-billions-on-cybersecurity-after-meeting-with-biden.html
2. https://www.cnbc.com/2021/08/25/google-microsoft-plan-to-spend-billions-on-cybersecurity-after-meeting-with-biden.html
3. https://us.aicpa.org/interestareas/frc/assuranceadvisoryservices/aicpasoc2report

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