SideChannel Inc (SDCH)

[22rover]

I stand corrected...

$6.6M in revenues.

[22rover]

Realeased, as expected, on the day when the warrant tender offer was completed.

Looked over the 10K carefully. No red flags.

Positives were significant, starting with the NOLs.

For the uninitiated:

What Is Net Operating Loss (NOL)?
A net operating loss (NOL) occurs when a company’s allowable deductions exceed its taxable income within a tax period. The NOL can generally be used to offset a company’s tax payments in other tax periods through an Internal Revenue Service (IRS) tax provision called a loss carryforward.

It's a big deal when you consider SDcH has over $20M in NOLs, which can be used to offset future tax obligations. Now, because there has been a merger (it's complicated tax code), the actual figure might change. I have a phone call in with a soon-to-be retired CPA who will fill me on the amount of NOLs available to sidechannel.

Secondly, sidechannel has a ~$975 monthly lease in Massachusetts. As a shareholder, that is so reassuring. I admire and respect that level of frugality.

Nice quarter, Team side channel! Revs moving towards $7,000,000 and a growth rate close to 40%. Collectively, keep executing. Keep those cyber eyes on the prize.

[22rover]

$6.8M yearly revenues

$4M market cap

You read that correctly.

[vCISO]

10K is out.
https://app.quotemedia.com/data/downloadFiling?webmasterId=102691&ref=317950666&type=HTML&symbol=SDCH&cdn=037c48122e569f1ce71b0785e1e48847&companyName=SideChannel+Inc&formType=10-K&formDescription=Annual+report+pursuant+to+Section+13+or+15%28d%29&dateFiled=2023-12-27

[vCISO]

SideChannel Exchanges 2021 Warrants for Common Stock and New Warrants
WORCESTER, MA / ACCESSWIRE / December 27, 2023 / SideChannel, Inc. (OTCQB:SDCH) ("SideChannel"), a leading provider of cybersecurity services and technology to emerging and middle market companies, announced the successful completion of a tender offer with holders of certain 2021 warrants.

On November 7, 2023, SideChannel announced a tender offer to 101 investors who collectively possess 55.5 million warrants issued in 2021 with an exercise price of $0.36 and expiration dates between March 31, 2026 and April 16, 2026. The tender offer closed at 5:00 p.m., Eastern Time, on December 26, 2023, with 76 investors receiving, on a combined basis, approximately 7.3 million shares of common stock and 17.4 million new warrants in exchange for tendering 43.5 million 2021 warrants (78.4% of the total 2021 warrants).

"Our growth and industry leadership are positioning SideChannel for strategic opportunities. The 2021 warrants contain toxic terms that limit our options and impede our ability to take advantage of these opportunities. We have alternatives for working around the roadblocks presented by these warrants that don't involve the warrant holders, but we chose to work with these investors on a solution and we are appreciative of their support," said Brian Haugli, SideChannel's CEO. He added, "We are mindful of the patience investors have had with our company as we work through the merger and continue advancing Enclave. Our tender offer allows these investors to get immediate value from their 2021 warrants and increase their potential to benefit from our future successes."

The common stock issued through this tender offer represents approximately 3.3% of the total outstanding shares after the tender offer. The new warrants received by investors have an $0.18 exercise price, expire on December 31, 2028, have no restrictions on a cashless exercise, and feature an automatic conversion into common stock if the bid price exceeds $0.36 for 30 consecutive days.

About SideChannel

SideChannel helps emerging and mid-market companies protect their assets. Founded in 2019, the Company delivers comprehensive cybersecurity plans through a series of actions branded, SideChannel Complete.

SideChannel deploys a combination of skilled and experienced talent, and technological tools to offer layered defense strategies supported by battle-tested processes. SideChannel also offers Enclave; a network infrastructure platform that eases the journey from zero to zero-trust. Learn more at sidechannel.com.

Investors and shareholders are encouraged to receive to press releases and industry updates by subscribing to the investor email newsletter and following SideChannel on X and LinkedIn.

SideChannel

146 Main Street, Suite 405
Worcester, MA 01608

Investor Contact

Ryan Polk
[e-mail]

[22rover]

Didn't know where that was going, but I agree. The Q could surprise to the upside. $7.5M revenues for the FY? Looking for color around Enclave adoption…

Tender offer expires today after 4(!) months of “negotiations.”

Lastly, I doubt we see sub-.02 cents in 2024.

[vCISO]

All I want for Christmas is a blow out Q.

Please.

[22rover]

Threat actor doing her thing, but ya okta be more careful, especially when you're tasked with (among other things) securing user identification.

Might I suggest SideChannel? Anyone?

December 20, 2023
Hello,
On Wednesday, November 29 we published a blog post with an update on the October security incident. As described in the blog post, the threat actor accessed reports in the Okta customer support system containing user contact information. This email is part of our outreach to the individuals affected by this information exposure.

We are contacting you today to notify you that your contact information - name, and certain other contact information such as phone number, work address and/or email address was among the information downloaded by the threat actor. This contact information does not include user credentials or sensitive personal information.

Your contact information was in Okta’s customer support system because of prior interaction with Okta. For example, holding an Okta certification (e.g., an Okta Certified Professional certificate), participating in a product trial, receiving promotional communication, being a former customer, or similar.

As we shared in our November 29 blog post, we do not have direct knowledge or evidence that this information is being actively exploited. We aim to share this information with you as a precaution as phishing and social engineering attacks are common and there is the possibility that this information may be used for such purposes.

As a security best practice, Okta strongly recommends that you enable multi-factor authentication (MFA) across all your online accounts as a key protection against these types of attacks. If you have further questions or concerns, please call 800-456-3166 toll-free Monday through Friday 8:00am CST to 8:00pm CST (excluding major U.S. holidays).

We apologize for the frustration this situation has caused.
Thank you,
Okta Team

[hoodoo]

Oops in response to vCISO “only up from here”😄

[hoodoo]

I cannot put a number on how many times I’ve heard this..but at .03 now, I feel like you’re correct.

[vCISO]

Looking forward to seeing what changes we will see in our Board of Directors. Maybe the update will come in our soon to be released Q?

[vCISO]

I think we are at the low point. Nowhere but up from here.

Looking forward to a strong Q....probably next week.

[22rover]

Market continues to be generous.

I generally don't suggest averaging down, but we’ve reached a point of exhaustion, where investors have simply given up. The pain is too great. Get me out at any price. . .

The tide will turn, probably sooner than later.

[vCISO]

Loaded up again yesterday. I only see an upside from here. I've averaged down tremendously from the old nsct days.

Good luck to everyone and wishing everyone a Very Merry Christmas and a Happy New Year.

[vCISO]

Heavy trading today.

[22rover]

Of course, .02 centavos is freaking ridiculous!

If I were to take the helm of a pubco, just about every Tom, Dick, and Harry I know would throw a minimum $5-10K at it. And $10K is good for 500,000 shares…

At that rate, $100K would move this back to .20c in a hurry. Remember, the float is roughly 120,000,000 shares.

So, either the head honchos at SideChannel (and those associated w the company) have an extremely risk-averse inner circle—real belt & suspenders types—or they’re broke (I jest).

Or maybe it’s something else.

Waiting is fine too.

Reporting Q soon.

[22rover]

Market cap ~ $6.5M

Revs Growing at a 30-40% clip.

estimating FY revs of $7M

Now trading less than 1x revenues.

Again, SaaS company with incredible growth, no debt, proven service model (vCISO), excellent management, promising product (Enclave) + white hot sector . . . Trading below revenue.

I like our chances.

[candyldy]

https://www.linkedin.com/posts/brianhaugli_cisolife-interview-tyler-moffitt-on-the-activity-7134912039969288193-DN9Q?utm_source=share&utm_medium=member_android

[vCISO]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549







SCHEDULE TO

(Amendment No. 3)







TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934







SIDECHANNEL, INC.

(Name of Subject Company (Issuer) and Name of Filing Person (Issuer))



Warrants to Purchase Common Stock with an Exercise Price of $0.36

(Title of Class of Securities)



N/A

(CUSIP Number of Warrants)







Ryan Polk

Chief Financial Officer

SideChannel, Inc.

146 Main Street, Suite 405

Worcester, MA 01608

Phone: [phone]

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications on Behalf of Filing Persons)



with a copy to:

Michael E. Storck, Esq. Paul J. Schulz, Esq. Lippes Mathias LLP

50 Fountain Plaza, Suite 1700

Buffalo, New York 14202

[phone]







CALCULATION OF FILING FEE



Transaction valuation* $4,463,442.48; Amount of filing fee* $658.80



* Estimated for purposes of calculating the amount of the filing fee only. SideChannel, Inc. (“SideChannel” or the “Company”) is offering to holders of certain of its warrants, as more fully described herein, the opportunity to exchange such warrants for shares of the Company’s common stock, par value $0.001 per share (“Shares” or “Common Stock”) by tendering six (6) warrants with an exercise price of $0.36 in exchange for one (1) share of our Common Stock and to exchange such warrants for new warrants (“New Warrant” or “New Warrants”) by tendering two and one-half (2.5) warrants with an exercise price of $0.36 in exchange for one (1) New Warrant. The amount of the filing fee assumes that all outstanding warrants that are the subject of the offer will be exchanged and is calculated pursuant to Rule 0-11(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The transaction value was determined assuming that all warrants to purchase SideChannel’s Common Stock eligible to participate in the Offer are exchanged, and that the approximately 9,276,824 Shares issued as a result of the Offer have an aggregate value of $463,841.20 calculated based on the average of the low and high trading price on October 31, 2023 which was $0.05, and that the approximately 22,219,896 New Warrants issued as a result of the Offer have an aggregate value of $3,999,581.28 calculated using an exercise price of $0.18.



The amount of the filing fee, calculated in accordance with Rule 0-11(b) under the Exchange Act, equals $147.60 per million dollars of the transaction valuation.



Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A


? Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.


Check the appropriate boxes below to designate any transactions to which the statement relates:



? third-party tender offer subject to Rule 14d-1.
? issuer tender offer subject to Rule 13e-4.
? going-private transaction subject to Rule 13e-3.
? amendment to Schedule 13D under Rule 13d-2.


Check the following box if the filing is a final amendment reporting the results of the tender offer: ?












SCHEDULE TO-I

Amendment No. 3



This Amendment No. 3 (this “Amendment”) amends the Tender Offer Statement (together with any amendments and supplements thereto, the “Schedule TO”), filed with the Securities and Exchange Commission on November 7, 2023 by SideChannel, Inc., a Delaware corporation (the “Company” or “SideChannel”).



This Schedule TO relates to the offer by the Company to holders of certain of the Company’s outstanding warrants (“2021 Investor Warrants”). The offer is made upon the terms and subject to the conditions set forth in the Company’s offer to exchange, dated November 6, 2023 (the “Offer to Exchange” or “Offer”), and in the related Offer to Exchange materials which are filed as Exhibits (a)(1)(B), (a)(1)(C), (a)(1)(F) and (a)(1)(H) to this Schedule TO (which the Offer to Exchange and related Offer to Exchange materials, as amended or supplemented from time to time, collectively constitute the “Offer Materials”).



The 55,549,615 2021 Investor Warrants subject to our Offer to Exchange consist of warrants to purchase an aggregate of 55,549,615 Shares issued to certain investors in 2021 with a five (5) year term and with an exercise price of $0.36. Under the Offer to Exchange, the holders of the 2021 Investor Warrants will be entitled to receive one (1) share of Common Stock for each six (6) 2021 Investor Warrants exchanged (“Investor Exchange Ratio for Stock”) and one (1) New Warrant (attached as Exhibit (a)(1)(F)) for each two and one half (2.5) 2021 Investor Warrants exchanged, exercisable for five (5) years at an exercise price of $0.18 per share (“Investor Exchange Ratio for Warrants”). The Investor Exchange Ratio for Stock and the Investor Exchange Ratio for Warrants are collectively referred to as the “Investor Exchange Ratios.” The “Offer Period” is the period commencing on November 6, 2023 and ending at 5:00 p.m., Eastern Time, on December 15, 2023, or such later date to which the Company may extend the Offer (the “Expiration Date”). If all of the 2021 Investor Warrants are tendered, the Company will issue approximately 9,267,824 Shares and 22,219,896 New Warrants. The Investor Exchange Ratios were selected by the Company in order to provide the holders of the 2021 Investor Warrants with an incentive to exchange the 2021 Investor Warrants.




Except as otherwise set forth in this Amendment, the information set forth in the Schedule TO remains unchanged and is incorporated herein by reference to the extent relevant to the items in this Amendment. Capitalized terms used but not defined herein have the meanings ascribed to them in the Schedule TO.








Items 1 through 9 and 11



The Offer to Exchange and Items 1 through 9 and 11 of the Schedule TO, to the extent such items incorporate by reference the information contained in the Offer to Exchange, are hereby amended by adding the following text thereto:



“On December 11, 2023, the Company decided to waive the all or nothing requirement stated in the Offer to Exchange and provide 2021 Investor Warrant holders ten (10) business days to respond to this amendment. As such, the Company extended the Expiration Date of the Offer. The Offer was previously scheduled to expire at 5:00 p.m., Eastern Time, on December 15, 2023. The Expiration Date has been extended until 5:00 p.m. Eastern Time on December 26, 2023.



The Company will close the Offer on the Expiration Date and intends to issue the Shares and New Warrants to 2021 Investor Warrant holders who have submitted Letters of Transmittal by the Expiration Date on or before December 28, 2023.



The Company has indicated that as of 5:00 p.m., Eastern Time, on Friday December 8, 2023, approximately 37,512,388 warrants had been validly tendered into and not validly withdrawn from The Offer, representing approximately 67.5% of the Warrants.”



Amendments to the Offer to Exchange and Exhibits to the Schedule TO



The references to “all” 2021 Investor Warrants set forth in the Offer to Exchange (Exhibit (a)(1)(H)) and the related Exhibits to this Schedule TO each as amended by prior amendments to the Schedule TO, are hereby replaced with “at least 65%”.



Exhibit (a)(1)(K), Email from the Chief Executive Offer to 2021 Investor Warrant Holders, has been added to the Schedule TO.



Exhibit (a)(1)(L), Email from the Chief Financial Officer Announcing the At Least 65% Requirement, has been added to the Schedule TO.



Item 12. Exhibits.




Exhibit Description
(a)(1)(K) Email from Chief Executive Officer to 2021 Investor Warrant Holders *
(a)(1)(L) Email from Chief Financial Officer Announcing the At Least 65% Requirement *


* Filed herewith.








SIGNATURE



After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.



SIDECHANNEL, INC.

Date: December 11, 2023 By: /s/ Ryan Polk
Name: Ryan Polk
Title: Chief Financial Officer





ATTACHMENTS / EXHIBITS

ex99a1k.htm

ex99al.htm

[vCISO]

https://www.linkedin.com/posts/brianhaugli_triangle-infosecon-keynote-issa-raleigh-activity-7140335990107185153-7_Fy?utm_source=share&utm_medium=member_ios

[vCISO]

I posted it

[candyldy]

Can you repost the link?

[vCISO]

[BrianHaugli]

Triangle InfoSeCon Keynote - ISSA Raleigh 2023 - Brian Haugli - What does good look like?

I've been waiting for the edits on this video and wanted to share. This is my keynote from ISSA's Triangle InfoSeCon back in October. Thought you'd all appreciate the talk.

YouTube LINK -

[vCISO]

https://www.linkedin.com/posts/brianhaugli_diehardisachristmasmovie-activity-7139268068727234562-iooC?utm_source=share&utm_medium=member_android

[hoodoo]

Bingo. Can those bastards be sued? I get there is high risk associated with these sort of endeavors, but when blatant lies are told (datapath and many others) does it matter what’s in the fine print? I don’t know, it sounds illegal not merely unethical.

[22rover]

*Prior to merger w/SideChannel, Cipherloc never “graduated” from story to real business.

Cipherloc brass were acting as “conduits channeling money to management and service providers.”

Here is (and hopefully was) the dilutive cycle: Create a story (MLG) -> investment banks (like Paulsen) raise money -> investment banks, attorneys, consultants, investor relations, and management take the money back out ->

And . . . Rinse and repeat as long as possible.

Those days are over.

[22rover]

Find undiscovered companies that are growing revenues and earnings and not diluting.

Go ahead and merge, get acquired, grow and generate cash flow — BUT don’t dilute.

Successful CEO (I’ll try track down author):

"No, I haven't been tempted to dilute. I believe that having constraints on a business makes it stronger. It's sort of like if you're growing tomato plants in your garden, you don't want to give them too much water. They need a little struggle to be their best. And I think the business is the same way. I think there's a good argument - constraints make the
business better."

[vCISO]

https://www.linkedin.com/posts/sidechannelsecurity_press-release-04dec23-zatik-security-activity-7137497664874496000-kfPC?utm_source=share&utm_medium=member_ios

[vCISO]

Today SideChannel welcomes Aaron Ansari to the team!

Aaron possesses extensive technical expertise in #cybersecurity, honed through years of experience in the financial services sector. His current role as a Principal Consultant (vCISO) for SideChannel involves providing strategic oversight and implementation of comprehensive cybersecurity strategies for various organizations. Aaron's technical acumen is rooted in his more than a decade-long tenure as a security professional, particularly in the financial services industry.

During his time at BMW Financial Services, he held the position of Chief Security Architect, where he was responsible for the formulation and implementation of information security (IS) application security policies, standards, and guidelines. His duties included managing application compliance within the BMW group, and he also acted as a subject matter expert, ensuring that key vendors and partners adhered to BMW's stringent security practices.

Prior to BMW, Aaron further developed his application security (AppSec) expertise through various roles at JPMorgan Chase & Co. (JPMC), Cardinal Health, and Huntington Banks. At JPMC, he spearheaded the application security management for several security groups, covering areas like customer deposits platform, business continuity and disaster recovery (BC&DR) planning, and risk management for applications, including some aspects of internal auditing. At Cardinal Health, he was instrumental in the global installation and management of intrusion detection systems and conducted Health Insurance Portability and Accountability Act (HIPAA) audits.

[22rover]

Not a huge distinction, but this is an amendment (actually the 2nd). Company has incentivized the tender offer by adding a new warrant conversion and removing non-dilution language.

SCHEDULE TO
Amendment No. 2

This Amendment No. 2 (this “Amendment”) amends the Tender Offer Statement (together with any amendments and supplements thereto, the “Schedule TO”), filed with the Securities and Exchange Commission on November 7, 2023 by SideChannel, Inc., a Delaware corporation (the “Company” or “SideChannel”).

[candyldy]

This is a completely different filing. There us no 'opt-out' I think it is because they were cipherloc warrants and the company needs to clean up the books. Doesn't want all those warrants out there with a non-dilusion clause.

[22rover]

Agreed, it’s an amendment, thereby extending the tender offer to Dec 15th.

The 15th of December can, once again, be extended, should the company decide to do so.

You can borrow someone else’s stock ideas, but you can’t borrow their conviction. Conviction can only be obtained by trusting your own research over that of others. Conviction is necessary because at multiple points with every multi-bagger it's going to be you against the world.

~ Ian Cassel

[candyldy]

This is an update to a filing on Nov 6.

[22rover]

Tender offer deadline pushed out to 12/15.

New #SEC filing: SC TO-I/A
2023-12-04 10:58:18 EST
sec.gov/Archives/edgar

SDCH: Investing at the intersection of cybersecurity + massive growth + international conflict + substantial insider ownership + increased governmental reg

[Stock_Barber]

It is hard to say.

Better since Brian took over, for sure. But the stock is simply dead for now.

[vCISO]

Hoodoo, it's not fair to go back to pre SideChannel days. This is a totally different company now. Earnings speak for themselves. I encourage all to just look at the past Qs and do your own DD.

[vCISO]

Been a minute. I am Interested in your current evaluation of SideChannel.

[Stock_Barber]

Hey hoodoo! You have been here over 3 years. Can you share what tales/expectations made you a shareholder here?

TIA!

Cheers!

[hoodoo]

Broken record of lies. We’ve literally heard this every single year for the last 5 years. Nothing will change.

[22rover]

Investor Impatience Means Cheap Shares
One can hardly blame long-suffering shareholders for throwing in the towel; today 500,000 shares changed hands, a rather significant percentage of the float, though only a modest $25K in trading dollars.

Do what works best for you, but I might throw in some cheap bids because, what I have learned, cheap becomes cheaper, and the out-at-any-price crowd want to be done with this.

FY revenue of, let's say, $7M means 1.5x
FY revs of $10 1.0x (a little too bullish)
This isn't a steel company, it’s SaaS. So single-digit Rev multiples make for an incredibly inexpensive stock.

Now, if I'm not mistaken, sidechannel has started to include the enterprise, moving beyond SMB. Anyone else gather that?

[vCISO]

Intro has been updated. Lmk if you can think of anything else that needs to be corrected. Once we have new board members, I will update that.

Something tells me this might just be the year that we see some major movement.

It's been a long , long ride for the old longs.

[vCISO]

I will get it updated

[KnicksStockChamp]

When and how does the company info on this page get updated? The directors, IR, bios, numbers. Is that informed by the company or pulled off a website?

[22rover]

Back at you, long-suffering shareholder. First let’s see what the latest quarter tells us about growth, Enclave adoption, etc., and then keep a watchful eye on that soon-to-be open Board position. imho 2024 will be, as Sinatra said, a very good year. . . for sidechannel longs. Gobble gobble.

[vCISO]

Happy Thanksgiving to everyone. Maybe this will be the year for all the beaten up longs. Have a wonderful day.

[22rover]

Today, on approx $15K in trade (~350K shares), SDCH jumped better than 50% (.04–>.06x).

When volume comes into this stock, you’ll see some real movement. Today might serve as a harbinger of things to come. (Warrants need to be cleaned up first.)

As for RCISO, it’s not something that SDCH can currently afford. Down the road, when the equity has greater value / purchasing power, that’s when you might see an acquisition . . . for what I’m guessing might be a pretty penny.

[vCISO]

https://www.g2.com/products/enclave

[vCISO]

Excellent answers. This my friend is why most shareholders are happy with this company and its future. Transparency is well deserved and considered very important. Thank you again for following and posting on this thread.

[BrianHaugli]

Should it? The idea may benefit SideChannel, but not for certain. Can SideChannel buy RealCISO is the better question. When you review the public filings, SideChannel is not currently at a place to make a reasonable cash offer or to make a stock offer that wouldn't be noticeably dilutive. Also to consider is that I'm not the sole owner of RealCISO, in fact, I don't own more than 50% of RC anyway. So anything would need to be meaningful to the others not just me.