SideChannel Inc (SDCH)

[nt2innovate]

Brian seems to be doing a great job.l and growing the company quickly and efficiently.

The one question I suppose that the prior discussion brings up is that Cipherloc mostly marketed itself as a future SAAS business where you pay monthly to use the encryption tech and Enclave. I spoke with Brian previously and he mentioned that monetizing the polymorphic encryption is not a likely near term goal. Brian please correct me if I am wrong on this.

What then changes is that SideChannel also provides a cyber service (vCISO) along with SAAS like Enclave. The PE and PS ratios of service businesses are typically less than SAAS businesses partly since the labor costs (hiring CISOs) are higher. Brian does seem to feel that the personal touch provided by the CISOs helps grow and keep customer retention versus having pure software product. I suppose it remains to see how this plays out going forward. I am optimistic, but I can understand how the switch from pure SAAS is not something everyone is comfortable with. Of course if Cipherloc stayed pure SAAS, they still might not have revenue increasing the risk of bankruptcy.