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

Thursday, June 10, 2021 8:00 AM
01 Communique Laboratory, Inc.

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):

Passcode: ironcap21

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 and  

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.

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

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

 30-Apr-21  31-Oct-20 

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 
  255,285   266,135 
  (48,448,626)  (48,271,110)

  1,050,411   1,108,413 


Total liabilities and shareholders' deficit
 1,408,187  1,285,907 

01 Communique Laboratory Inc.  
Consolidated Statements of Operations and Comprehensive Income  
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 

 297,231  73,297  510,493  114,667 
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:
 (0.00) (0.00) (0.00) (0.00)
 (0.00) (0.00) (0.00) (0.00)

 Weighted average number of common shares:  
  91,818,973   80,235,472   91,806,056   80,235,472 
  91,818,973   80,235,472   91,806,056   80,235,472 

01 Communique Laboratory Inc.  
Consolidated Statements of Cash Flows  
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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