false FY 0001022505

 2025-03-31

 2025-12-17

 us-gaap: GoodwillMember

 us-gaap: GoodwillMember

 SDCH:VirtualChiefInformationSecurityOfficerServicesMember

 SDCH:VirtualChiefInformationSecurityOfficerServicesMember

 SDCH:CybersecuritySoftwareAndServicesMember

 SDCH:CybersecuritySoftwareAndServicesMember

 SDCH:PaulsonInvestmentCompanyLLCMember

 2021-07-23
 2021-07-23

 SDCH:PaulsonInvestmentCompanyLLCMember

 SDCH:PaulsonInvestmentCompanyLLCMember

 SDCH:PaulsonInvestmentCompanyLLCMember

 2021-12-10

 2021-12-10
 2021-12-10

 srt: ScenarioForecastMember

 2026-09-30

 us-gaap: FairValueInputsLevel1Member

 us-gaap: FairValueInputsLevel2Member

 us-gaap: FairValueInputsLevel3Member

 us-gaap: FairValueInputsLevel1Member

 us-gaap: FairValueInputsLevel2Member

 us-gaap: FairValueInputsLevel3Member

 SDCH:BoardOfDirectorsMember

 SDCH:TwoThousandTwentyOnePrivatePlacementWarrantsMember

 2023-08-22
 2023-08-22

 SDCH:TwoThousandTwentyOnePrivatePlacementWarrantsMember

 2023-12-26

 SDCH:TwoThousandTwentyOnePrivatePlacementWarrantsMember

 2023-12-26

 SDCH:TwoThousandEighteenPlacementAgentMember

 SDCH:TwoThousandTwentyOnePrivatePlacementMember

 SDCH:TwoThousandTwentyOnePlacementAgentMember

 SDCH:TwoThousandTwentyThreeWarrantExchangeMember

 2022-10-01

 us-gaap: SalesRevenueNetMember
 SDCH:NoClientMember
 us-gaap: CustomerConcentrationRiskMember

 us-gaap: SalesRevenueNetMember
 SDCH:NoClientMember
 us-gaap: CustomerConcentrationRiskMember

 us-gaap: AccountsReceivableMember
 SDCH:TwoCustomerMember
 us-gaap: CustomerConcentrationRiskMember

 srt: MaximumMember

 SDCH:RealCISOMember

 SDCH:RealCISOMember

 SDCH:RealCISOMember

 SDCH:RealCISOMember

 SDCH:AssociationOfTheUSArmyMember

 2023-10-13

 SDCH:AssociationOfTheUSArmyMember

 SDCH:AssociationOfTheUSArmyMember

 SDCH:AssociationOfTheUSArmyMember

 2025-03-01
 2025-03-31

 SDCH:TwoThousandTwentyOneEquityIncentivePlanMember

 2021-09-13

 SDCH:TwoThousandTwentyOneEquityIncentivePlanMember

 2022-06-29

 SDCH:TwoThousandTwentyOneEquityIncentivePlanMember

 2024-02-15

 SDCH:TwoThousandTwentyOneEquityIncentivePlanMember

 2025-02-03

 SDCH:UnvestedRSUAndStockOptionsMember

 srt: MaximumMember

 us-gaap: GeneralAndAdministrativeExpenseMember

 us-gaap: SellingAndMarketingExpenseMember

 us-gaap: ResearchAndDevelopmentExpenseMember

 SDCH:TwoThousandAndTwentyOneOmnibusEquityIncentivePlanReserveMember

 2021-09-12

 SDCH:TwoThousandAndTwentyOneOmnibusEquityIncentivePlanReserveMember

 2021-09-13

 SDCH:TwoThousandAndTwentyOneOmnibusEquityIncentivePlanReserveMember

 SDCH:EquityIncentivePlanMember

 SDCH:EquityIncentivePlanMember

 2025-06-30

 SDCH:EquityIncentivePlanMember

 2025-06-30

 SDCH:EricMarquezMember
 SDCH:SettlementAgreementMember

 SDCH:EricMarquezMember
 SDCH:SettlementAgreementMember

 SDCH:EricMarquezMember
 SDCH:SettlementAgreementMember
 srt: MaximumMember

 SDCH:NextFiveYearsMember

 SDCH:ThereafterMember

 2015-02-04
 2015-02-05

 us-gaap: DomesticCountryMember

 us-gaap: DomesticCountryMember

 us-gaap: StateAndLocalJurisdictionMember

 us-gaap: StateAndLocalJurisdictionMember

 us-gaap: RestrictedStockMember

 2024-12-23
 2024-12-23

 utr:sqft

 SDCH:Integer

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the Fiscal Year Ended September 30, 2025

 OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from ____ to ____

 Commission
File Number: 000-28745

 SideChannel,
Inc.

 (Exact
name of registrant as specified in its charter)

 Delaware

 86-0837077

 State
 or other jurisdiction of

 incorporation
 or organization)

 I.R.S.
 Employer

 Identification
 No.

Main Street, Suite 405, Worcester, MA 01608

 (Address
of principal executive offices) (Zip Code)

 (508) 925-0114

 (Registrant's
telephone number, including area code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 N/A

 N/A

 N/A

 Securities
registered pursuant to Section 12(g) of the Act:

Stock, par value $0.001

 (Title
of Class)

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
 No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
 No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes
 No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller
reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Small
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 On
March 31, 2025, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value
of the common equity held by non-affiliates of the registrant was approximately $ 5.0 million based upon the closing price of the
common stock on that date on the OTCQB Venture Market of approximately $0.04.

 As
of December 17, 2025, there were 231,229,054 shares of the issuer's common stock, par value $ 0.001 per share, outstanding.

 Documents
Incorporated by Reference: Portions of the Registrant's Definitive Proxy Statement to be filed for its 2025 Annual Meeting of
Stockholders are incorporated by reference into Part II, Item 5 and Part III of this Annual Report on Form 10-K.

INC.

 FORM
10-K ANNUAL REPORT

 FOR
THE FISCAL YEAR ENDED SEPTEMBER 30, 2025

 TABLE
OF CONTENTS

 ITEM
 1.

 BUSINESS

 ITEM
 1A.

 RISK FACTORS

 ITEM
 1B.

 UNRESOLVED STAFF COMMENTS

 ITEM
 1C.

 CYBERSECURITY

 ITEM
 2.

 PROPERTIES

 ITEM
 3.

 LEGAL PROCEEDINGS

 ITEM
 4.

 MINE SAFETY DISCLOSURES

 ITEM
 5.

 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 ITEM
 6.

 [ Reserved ]

 ITEM
 7.

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 ITEM
 7A.

 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 ITEM
 8.

 FINANCIAL STATEMENTS

 ITEM
 9.

 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 ITEM
 9A.

 CONTROLS AND PROCEDURES

 ITEM
 9B.

 OTHER INFORMATION

 ITEM
 9C.

 DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 ITEM
 10.

 DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

 ITEM
 11.

 EXECUTIVE COMPENSATION

 ITEM
 12.

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 ITEM
 13.

 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 ITEM
 14.

 PRINCIPAL ACCOUNTANT FEES AND SERVICES

 ITEM
 15.

 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 SIGNATURES

 Except
as otherwise required by the context, references to "SideChannel," "SideChannel, Inc.," the
"Company," "we," "us" and "our" are to SideChannel, Inc., a Delaware corporation and
its subsidiaries.

 Forward-Looking
Statements

 This
Annual Report on Form 10-K, including estimates, projections, statements relating to our business plans, objectives and expected operating
results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements generally are identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "plan," "may,"
"should," "will," "would," "will be," "will continue," "will likely
result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject
to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion
of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included
in the section entitled " Item 1A. Risk Factors " ("Risk Factors") and elsewhere in this Annual Report
on Form 10-K. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information,
future events, or otherwise.

 These
forward-looking statements are based on management's current expectations. These statements are neither promises nor guarantees,
but involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements
to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

 Although
we believe that the assumptions underlying our forward-looking statements are reasonable, any of the assumptions could be inaccurate;
therefore, we cannot assure you that the forward-looking statements included in this Annual Report on Form 10-K will prove to be accurate.
Considering the significant uncertainties inherent in our forward-looking statements, the inclusion of such information should not be
regarded as a representation by us or any other person that our objectives and plans will be achieved. Some of these and other risks
and uncertainties that could cause actual results to differ materially from such forward-looking statements are more fully described
in Risk Factors and elsewhere in this Annual Report on Form 10-K, or those discussed in other documents we filed with the Securities
and Exchange Commission ("SEC"). Except as may be required by applicable law, we undertake no obligation to publicly update
or advise of any change in any forward-looking statement, whether as a result of new information, future events, or otherwise. In making
these statements, we disclaim any obligation to address or update each factor in future filings with the SEC or communications regarding
our business or results, and we do not undertake to address how any of these factors may have caused changes to discussions or information
contained in previous filings or communications. In addition, any of the matters discussed above may have affected our past results and
may affect future results, so that our actual results may differ materially from those expressed in this Annual Report on Form 10-K and
in prior or subsequent communications.

 This
information should be read in conjunction with the audited financial statements and the notes thereto included in this Annual Report
on Form 10-K, and "Part II. Other Information - Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations", contained in this Annual Report on Form 10-K.

 We
are not aware of any misstatements regarding any third-party information presented in this Annual Report on Form 10-K; however, these
estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are
subject to change based on various factors, including those discussed under, and incorporated by reference in, Risk Factors of this Annual
Report on Form 10-K. These and other factors could cause our future performance to differ materially from our assumptions and estimates.
Some market and other data included herein, as well as the data of competitors as they relate to SideChannel, is also based on our good
faith estimates.

 PART
I

 ITEM
1. BUSINESS

 Business
Overview & Strategy

 SideChannel
is a cybersecurity advisory services and software company. Our mission is to make cybersecurity simple and accessible for mid-market
and emerging companies, a market that we believe is currently underserved. Our solutions provide effective cybersecurity risk management
for our clients. We anticipate that our target customers will continue to need cost-effective security solutions. We continue to expand
our catalogue of services and solutions to address the cybersecurity needs of our customers, including virtual Chief Information Security
Officer ("vCISO"), cyber program strategy, zero trust, third-party risk management, compliance readiness, cloud security
and architecture services, privacy, threat intelligence, managed end-point security solutions, and awareness and training.

 Our
Solutions

 Our
efforts are focused on protecting and enabling the critical business functions of our clients and customers through comprehensive cybersecurity
programs. This specifically includes:

 Deploying
 Enclave, a proprietary software product simplifying the important cybersecurity tasks of segmenting and securing digital networks,
 addressing the increased demand for remote worker technologies, and advancing zero trust strategies to better protect against threats such as ransomware and intrusions.

 Embedding
 vCISOs as a fractional resource into the leadership teams of our clients. The role of vCISOs is becoming increasingly pivotal, especially
 among small and cloud-enabled companies. The flexibility and expertise offered by vCISOs make them an attractive option for companies
 facing budget constraints, needing to establish a robust security posture quickly, and overseeing increasingly complex regulatory environments.

 Assessing,
 identifying, and mitigating cybersecurity and privacy risks through tech-enabled security engineering processes. We leverage AI-based
 security operations for post-detection actions, including alert prioritization, augmented threat detection/hunting, playbook creation,
 and automation of incident response processes.

 Reselling
 third-party cybersecurity services and software when appropriate, expanding our offerings to include a full range of cybersecurity
 products and services delivered through our team of security engineers and a network of third-party service providers and value-added
 resellers (VARs).

 In
the context of SideChannel's offerings, Enclave is well-positioned to address these challenges faced by enterprises in achieving
a zero trust environment:

 Establishing
 a clear scope,

 Communicating
 success through strategic and operational metrics, and

 Anticipating
 increase in staffing and costs without delays.

 Enclave
simplifies crucial cybersecurity tasks such as asset inventory, vulnerability management, and microsegmentation. By integrating access
control, microsegmentation, encryption, machine identity management, and secure networking concepts into a unified solution, Enclave
provides a comprehensive solution for managing cybersecurity controls effectively. It allows IT professionals to segment enterprise networks
efficiently, allocate the right personnel to those segments, and direct traffic seamlessly. This alignment with zero trust principles
ensures that organizations can enhance their security posture and achieve measurable risk reduction.

 By
combining zero trust network access with certificate management and machine identity, Enclave seamlessly creates a unified security architecture
that eliminates traditional network vulnerabilities. This integration enables IT teams to enforce precise access policies based on verified
machine identities. Certificate-based identities allow a simplified management for any certificate-based communication, while the zero
trust framework continuously validates every connection attempt. This powerful combination delivers robust security without the typical
management overhead, allowing organizations to implement sophisticated microsegmentation strategies with remarkable simplicity and minimal
resource requirements.

 We
offer cybersecurity service solutions designed to address financial and espionage-driven breaches effectively, minimize end-user errors,
and ensure rapid incident response. With the increase in data transmission and connected intelligent devices through the prevalence of
Internet of Things, the scale of security risks and the attack surface are much larger. Our offerings in data security, application security,
network security, security operations, and risk management position us to meet these challenges.

 Further
information about Enclave and our service offerings are available on our website (www.sidechannel.com).

 Revenue
Categories

 We
internally report our revenue using two categories:

 vCISO
 Services: This category captures the revenue from the Chief Information Security Officer services that we provide to our clients
 on a "virtual" or outsourced basis. Embedded into the C-suite executive teams of our clients, our vCISOs deliver services
 including assessing the cybersecurity risk profile, implementing policies and programs to mitigate risks, and managing the day-to-day
 tasks to ensure compliance with the adopted cybersecurity framework. Most of our clients use our vCISO services. Engagements typically
 include a fixed monthly subscription fee and exceed 12 months because of renewal options of 1, 3, 6, or 12 months.

 Cybersecurity
 Software and Services: This category encompasses an array of cybersecurity software and services that our clients deem necessary
 to protect their digital assets, including Enclave. These augment our vCISO offering and include a full range of other cybersecurity
 products and services delivered through a team of security engineers along with a network of third-party service providers and VARs.
 Commercial relationships with third-party service providers and VARs provide SideChannel with additional internal capabilities to
 mitigate cybersecurity risks. We earn licensing revenue from software contracts and commissions from third-party service provider
 partnerships which are included in this revenue category.

 Growth
Strategy

 Our
growth strategy focuses on these three initiatives:

 Increasing
 adoption of Enclave: By promoting Enclave and our other cybersecurity solutions to our existing vCISO clients, we aim to deepen
 our relationships and provide comprehensive, integrated security solutions. This supports the increased demand for zero trust strategies
 and remote worker technologies.

 Securing
 new vCISO Services Clients: As organizations plan to increase security investments due to breaches and the rising complexity
 of cyber threats, we aim to expand our client base by offering flexible, expert vCISO services that address budget constraints and
 the need for rapid security posture establishment.

 Adding
 new Cybersecurity Software and Services offerings: We plan to enhance our portfolio by incorporating transformational technologies
 such as AI-based security operations, data security posture management ("DSPM"), polymorphic encryption, cyber-physical system ("CPS")
 security, and application security posture management ("ASPM"). This aligns with industry trends and the anticipated incremental spend
 on application and data security due to generative AI.

 Industry
Standards and Compliance

 Industry-standard
cybersecurity and risk management frameworks, such as the National Institute of Standards and Technology Cybersecurity Framework and Center for Internet Security Controls ("CIS"), prioritize inventory of assets and access control as top requirements for a sustainable
and compliant cybersecurity program. The first three controls in CIS version 8 call for organizations to:

 Control 1: "Establish and maintain an accurate, detailed, and up-to-date inventory of all enterprise assets with the potential
 to store or process data."

 Control 2: "Actively manage (inventory, track, and correct) all software (operating systems and applications) on the network
 so that only authorized software is installed and can execute, and that unauthorized and unmanaged software is found and prevented
 from installation or execution."

 Control 3: "Configure data access control lists based on a user's need to know. Apply data access control lists, also
 known as access permissions, to local and remote file systems, databases, and applications."

 We
built Enclave to primarily address these three extremely critical cybersecurity controls along with other controls in CIS version 8. Enclave seamlessly
combines access control, microsegmentation, encryption, and other secure networking concepts to create a comprehensive solution.
Through software, it allows IT professionals to easily segment the enterprise network, place the right staff in those segments, and
direct traffic. Unlike open, traditional models, Enclave allows for near-limitless micro-segmented networks to operate insulated
from one another.

 Company
History

 The
Company was originally incorporated in the State of Texas on June 22, 1953, as American Mortgage Company. During 1996, the Company
acquired the operations of Eden Systems, Inc. ("Eden"), which became a wholly owned subsidiary of the Company. Eden was
engaged in water treatment and the retailing of cleaning products. Eden's operations were sold on October 1, 1997. On May 16,
1996, the Company changed its name to National Scientific Corporation. From September 30, 1997, through the year ended September 30,
2001, the company aimed its efforts in the research and development of semiconductor proprietary technology and processes and in
raising capital to fund its operations and research. Effective August 27, 2014, the Company changed its name to Cipherloc
Corporation ("Cipherloc") after it began engaging in cybersecurity software development. The Company redomiciled and
became a Delaware corporation on September 30, 2021. A reverse merger was completed on July 1, 2022, between SCS, Inc., f.k.a.
SideChannel, Inc. and Cipherloc. The
combined entity changed its name to SideChannel, Inc., on July 5, 2022, and the acquiree is now named SCS, Inc. ("SCS")
and for accounting purposes, is a subsidiary of the Company.

and Development

 Since
Enclave is a proprietary software product, we classify all our software development activities to be research and development. The success
of our software product, Enclave, depends on our ability to provide our customers with reliable, innovative features and benefits that
are delivered before, or at least no later than, our competitors. When the demands of product development exceed the capacity or knowledge
of our in-house staff, we retain temporary third-party consultants to assist us.

 Our
research and development expenditures for the fiscal years ended September 30, 2025, and September 30, 2024, were $562 thousand and $546
thousand, respectively. These costs were incurred primarily to develop Enclave.

 Selling
and Marketing

 We
use four primary sources to identify prospective clients for our services and products including Enclave:

 Digital
 Marketing

 Industry
 Events and Conferences

 Direct
 Outreach

 Referral
 Partners

 We
continue enhancing our digital marketing tactics and expanding our online presence. A growing list of referral partners recommend SideChannel
to their clients as the primary option to identify, assess, and mitigate cybersecurity risks. Certain referral partners receive a commission
upon a referral becoming a SideChannel client.

 As
of September 30, 2025, we had three (3) employees dedicated to selling and marketing activities. Our selling and marketing expenditures
for the fiscal years ended September 30, 2025, and September 30, 2024, were $966 thousand and $771 thousand, respectively.

 Competition

 The
cybersecurity software and services market is highly competitive, subject to rapid change, and significantly affected by new product
introductions and other activities of market participants.

 Some
of our competitors have greater financial, technical, sales, marketing, and other resources than we do. Because of these and other factors,
competitive conditions in the markets we operate in are likely to continue to intensify in the future, as participants compete for market
share. Increased competition could result in price reductions for our products and services, possibly reducing our net revenue and profit
margins and resulting in a loss of our market share, any of which would likely harm our business.

 We
believe that our future results depend largely upon our ability to serve our clients and customers with the products and services described
earlier better than our competitors, and by offering new services and product enhancements, whether such product and service offerings
are developed internally or through acquisition. We also believe that we must provide product and service offerings that compete favorably
against those of our competitors with respect to ease of use, reliability, performance, range of useful features, reputation and price.

 We
anticipate that we will face increasing pricing pressures from our competitors in the future. Since there are low barriers to entry into
the cybersecurity services and software markets, we believe competition in these markets will persist and intensify in the future.

 Our
chief services competitors include companies such as Optiv, NCC, Coalfire, PwC, EY, Deloitte, and GuidePoint. Our primary software competitors
are companies such as Check Point, Cisco, CrowdStrike, F5 Networks, HPE, Huawei, Illumio, Juniper,
Microsoft, Netskope, Palo Alto Networks, SonicWALL, Sophos, and zScaler.

 Intellectual
Property

 Protective
Measures

 We
believe that our intellectual property is an important and vital asset, which enables us to develop, market, and sell our products and
services and enhance our competitive position. Our intellectual property includes our proprietary business and technical know-how, inventions,
works of authorship, and confidential information. To protect our intellectual property, we rely primarily upon legal rights in trade
secrets, patents, copyrights, and trademarks, in addition to our policies and procedures, security practices, contracts, and relevant
operational measures.

 We
protect the confidentiality of our proprietary information by entering into non-disclosure agreements with our employees, contractors,
and other entities with which we do business. In addition, our license agreements related to our software and proprietary information
include confidentiality terms. These agreements are generally non-transferable. We also employ access controls and associated security
measures to protect our facilities, equipment, and networks.

 Patents,
Copyrights, Trademarks, and Licenses

 Our
products, particularly our software and related documentation, are protected under domestic and international copyright laws and other
laws related to the protection of intellectual property and proprietary rights. Currently, we have six active patents registered with
the U.S. Patent and Trademark Office. We employ procedures to label copyrightable works with the appropriate proprietary rights notices,
and we actively enforce our rights in the United States and abroad. However, these measures may not provide us with adequate protection
from infringement, and our intellectual property rights may be challenged.

 Our
SideChannel and Enclave logos are registered with the U.S. Patent and Trademark Office ("USPTO"). In the United States, we
can maintain our trademark rights and renew trademark registrations for as long as the trademarks are in use.

 Government
Regulation

 Export
Control Regulations

 We
expect that all our products will be subject to U.S. export control laws and applicable foreign government import, export and/or use
requirements. The level of such control generally depends on the nature of the products in question. Often, the level of export
control is impacted by the nature of the software and cybersecurity incorporated into our products. In those countries where such
controls apply, the export of our products may require an export license or authorization. However, even if a transaction qualifies
for a license exception or the equivalent, it may still be subject to corresponding reporting requirements. For the export of some
of our products, we may be subject to various post-shipment reporting requirements. Minimal U.S. export restrictions apply to all
our products, whether or not they perform cybersecurity functions. If we become a Department of Defense prime contractor in the
future, certain registration requirements may be triggered by our sales. In addition, certain of our products and related services
may be subject to the International Traffic in Arms Regulations (ITAR) if our software or services are specifically designed or
modified for defense purposes. If we become engaged in manufacturing or exporting ITAR-controlled goods and services (even if we do
not export such items), we will be required to register with the U.S. State Department.

 To
date, Export Control Regulations have had no material impact on our business.

 Enhancements
to our existing products may be subject to review under the Export Administration Act to determine what export classification they will
receive. In addition, any new products that we release in the future will also be subject to such review before we can export them. The
U.S. Congress continues to discuss the correct level of export control in possible anti-terrorism legislation. Such export regulations
may be modified at any time. Modifications to these export regulations could reduce or eliminate our ability to export some or all of
our products from the United States in the future, which could put us at a disadvantage in competing with companies located outside of
the U.S. Modifications to U.S. export regulations could restrict us from exporting our existing and future products. Any such modifications
to export regulations may put us at a competitive disadvantage with respect to selling our products internationally.

 Privacy
Laws

 We may be subject to various international, federal and state regulations regarding the treatment and protection of personally
identifying and other regulated information. Applicable laws may include U.S. federal laws and implementing regulations, such as the
GLBA and HIPAA, as well as state and international laws and regulations, including the California Consumer Privacy Act (CCPA) and the
European Union General Data Protection Regulation (GDPR). Some of these laws have requirements on the transmittal of data from one jurisdiction
to another. In the event our systems are compromised, many of these privacy laws require that we provide notices to our customers whose
personally identifiable data may have been compromised. Additionally, if we transfer data in violation of these laws, we could be subjected
to substantial fines. To mitigate the risk of having such data compromised, we use cybersecurity, software and other security procedures
to protect our databases.

 Personnel

 As
of September 30, 2025, we had 23 full-time employees. We also had approximately 15 independent contractors that provide services to us.
We anticipate that we will need to increase our staffing in the foreseeable future.

 ITEM
1A. RISK FACTORS

 Our
business, financial condition and results of operations and the market price for our common stock are subject to numerous risks, many
of which are driven by factors that we cannot control or predict. An investment in our common stock involves a high degree of risk. You
should carefully consider the following information about these risks, together with the other information contained in this Annual Report
on Form 10-K, including the information regarding "Forward-Looking Statements" earlier in this Form 10-K immediately prior
to Part I, Item 1 and "Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations,"
before investing in our common stock. If any of the events anticipated by the risks described below occur, our results of operations
and financial condition could be adversely affected, which could result in a decline in the market price of our common stock, causing
you to lose all or part of your investment. Additional risks that we do not yet know of, or that we currently think are immaterial, may
also affect our business and results of operations.

 Risks
Related to Our Common Stock

 The
market price for our common stock has been volatile, and you may not be able to sell our stock at a favorable price, or at all.

 You
should consider an investment in our common stock to be risky, and you should invest in our common stock and securities convertible into
our common stock only if you can withstand a complete loss and wide fluctuations in the market value of your investment. Some factors
that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this "Risk Factors"
section and elsewhere are:

 Sale
 of our common stock by our stockholders, executives, and directors;

 Volatility
 in price and level of trading volumes of our shares of common stock;

 Our
 ability to obtain financings to conduct and complete research and development activities
 and other business activities;

 The
 timing and success of introductions of new products and services by us or our competitors
 or any other change in the competitive dynamics of our industry, including consolidation
 among competitors;

 Our
 ability to attract and retain new customers, clients, licensees, and resellers;

 in the development status of our products and services;

 in our capital structure, future issuances of securities, and sales of large blocks of common
 stock by our stockholders;

 Our
 cash position;

 Announcements
 and events surrounding financing efforts, including debt and equity securities;

 Our
 inability to enter into new markets or develop new products and services;

 Reputational
 issues;

 Announcements
 of acquisitions, partnerships, collaborations, joint ventures, new products and services,
 capital commitments, or other events by us or our competitors;

 in industry conditions or perceptions;

 Our
 ability to attract analysts to initiate research coverage and once obtained, having such
 analysts issue research reports, recommendations and any changes in recommendations, price
 targets, and withdrawals of coverage;

 Departures
 and additions of key personnel;

 Disputes
 and litigations related to intellectual properties, proprietary rights, and contractual obligations;

 in applicable laws, rules, regulations, or accounting practices and other dynamics; and

 Other
 events or factors, many of which may be out of our control.

 In
addition, if the market for stock of companies in our industry or industries related to our industry, or the stock market in general,
experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business,
financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose
us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

 Substantial
sales of our common stock, or the perception that such sales might occur, could depress the market price of our common stock.

 We
cannot predict whether future issuances of our common stock, or resale of shares in the open market, will decrease the market price of
our common stock. The consequence of any such issuances or resale of our common stock on our market price may be increased as a result
of the fact that our common stock is thinly, or infrequently, traded. The exercise of any outstanding options, or the vesting of any
restricted stock, that we may grant to directors, executive officers and other employees in the future, or the issuance of common stock
in connection with acquisitions and other issuances of our common stock, may decrease the market price of our common stock.

 Holders
of our common stock have a risk of potential dilution if we issue additional shares of common stock in the future.

 The
exercise or conversion of stock options, warrants, preferred stock, or convertible securities will dilute the ownership percentage of
our then existing stockholders. The dilutive effect of the exercise or conversion of these securities may adversely affect our ability
to obtain additional capital. The holders of these securities may be expected to exercise or convert their securities when we are able
to obtain additional equity capital on terms more favorable than these securities. On September 13, 2021, our stockholders approved an
equity incentive plan authorized by our Board of Directors under which we may issue equity awards that may increase the number of outstanding
shares of common stock. In the future, we may grant additional stock options, warrants, preferred stock or convertible securities.

 The
anti-dilutive rights of certain warrants could result in significant dilution to our existing stockholders and/or require us to issue
a substantially greater number of shares, which may adversely affect the market price of our common stock.

 The
warrants to purchase 12,011,114 shares of our common stock issued to investors in a private placement transaction that closed on April
16, 2021, contain anti-dilution rights such that if we issue, or are deemed to have issued, common stock or common stock equivalents
at a price less than the then exercise price of those warrants, the exercise price of those warrants will automatically be reduced to
such lower value, and the number of shares of common stock issuable upon exercise thereafter will be adjusted proportionately, so that
the aggregate exercise price payable upon exercise of such warrants is the same prior to and after such reduction in exercise price.
As a result, the effect of the anti-dilution right may cause significant dilution to our other stockholders. All the 12,011,114 warrants
will expire on April 16, 2026.

 The
warrants to purchase 8,332,439 shares of our common stock issuable upon exercise of warrants issued to the placement agent in the private
placement include a weighted average anti-dilution right in the event we issue any shares of common stock or equivalents with a value
less than the then exercise price. As a result, the effect of the anti-dilution right may cause significant dilution to our other stockholders.
The triggering of the anti-dilution rights in the warrants issued in the private placement may result in such securities being exercisable
for a reduced exercise price.

 As
of September 30, 2025, no anti-dilution triggers had occurred.

 Certain
warrants issued in 2021 inhibit our access to equity capital, if we should need it, which may limit our ability to grow and maintain
our competitiveness.

 The
warrants we issued in the 2021 private placement described in Part II, Item 8, Financial Statements, Note 9, contain various provisions including, but not limited to, various price reset and anti-dilution provisions
when new equity is issued in certain transactions including stock issued for cash at a price less than the $0.36 exercise price stated
in the 2021 private placement warrants. These provisions inhibit our access to cash for the issuance of common stock which may limit
our ability to compete in a very dynamic market through new investments in research and development or selling and marketing. We cannot
predict the financial impact of the issuance of the warrants on our financial statements, specifically our balance sheet. We also cannot
predict the financial impact of the various provisions included in the warrant agreements.

 The
purchase agreement related to our 2021 private placement includes covenants that we must comply with, or we may suffer potential monetary
and other penalties.

 The
securities purchase agreement we entered into in connection with the recent private placement contains certain customary covenants. If
we do not comply with these covenants, we will be in breach of our obligations under the securities purchase agreement, which may lead
to exercise by the investors of the remedies available to them under the securities purchase agreement, which may cause a material impact
upon our financial condition.

 Our
common shares are thinly traded, and in the future may continue to be thinly traded, and you may be unable to sell your shares at or
near ask prices or at all, if you need to sell your shares to raise money or otherwise desire to liquidate such shares.

 We
cannot predict the extent to which an active public market for our common stock will develop or be sustained due to a number of factors,
including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and
others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons,
they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of
our shares until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when
trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect on its share price. We cannot give you any assurance
that a broader or more active public trading market for our common stock will develop or be sustained, or that even current trading levels
will be sustained. You may be unable to sell your common stock at or above your purchase price, if at all, which may result in substantial
losses to you. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our stockholders may
disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously
in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer
that could better absorb those sales without adverse impact on its share price. As a consequence of this enhanced risk, more risk-averse
investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined
to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

 Future
sales and issuances of our securities could result in additional dilution of the percentage ownership of our stockholders and could cause
our share price to fall.

 We
expect that we will need significant additional capital in the future to continue our planned operations, including research and development,
increased marketing, hiring new personnel, commercializing our products, and continuing activities as an operating public company. To
the extent that we raise additional capital by issuing equity securities, our existing stockholders may experience substantial dilution.
We may sell common stock, convertible securities or other equity securities in one or more transactions, at prices and in a manner that
we determine from time to time, in our discretion. If we sell common stock, convertible securities or other equity securities in more
than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our
existing stockholders, and new investors could gain rights superior to our existing stockholders.

 Our
common stock is subject to restrictions on sales by broker-dealers and penny stock rules, which may be detrimental to investors.

 Our
common stock is subject to Rules 15g-1 through 15g-9 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which impose certain sales practice requirements on broker-dealers who sell our common stock to persons other than established customers
and "accredited investors" (as defined in Rule 501(a) of the Securities Act of 1933, as amended (the "Securities Act")).
For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and receive the
purchaser's written consent to the transaction prior to the sale. This rule adversely affects the ability of broker-dealers to
sell our common stock and holders of our common stock to sell their shares of our common stock.

 Additionally,
our common stock is subject to SEC regulations applicable to "penny stocks." Penny stocks include any non-Nasdaq equity security
that has a market price of less than $5.00 per share, subject to certain exceptions. The regulations require that, prior to any non-exempt
buy/sell transaction in a penny stock, a disclosure schedule proscribed by the SEC relating to the penny stock market must be delivered
by a broker-dealer to the purchaser of such penny stock. This disclosure must include the amount of commissions payable and the current
price quotations for our common stock. The regulations also require that monthly statements be sent to holders of a penny stock that
disclose recent price information for the penny stock and information regarding the limited market for penny stocks. These requirements
adversely affect the market liquidity of our common stock.

 Because
our common stock is quoted on the OTCQB instead of a national exchange, our investors may have difficulty selling their stock or may
experience negative volatility on the market price of our common stock.

 Our
common stock is quoted on the OTCQB Market, operated by the OTC Markets Group. The OTCQB is often highly illiquid, in part because it
does not have a national quotation system by which potential investors can follow the market price of shares, except through information
received and generated by a limited number of broker-dealers that make markets in particular stocks. There is a greater chance of volatility
for securities that trade on the OTCQB, as compared to a national exchange or quotation system. This volatility may be caused by a variety
of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and
ask quotations, lower trading volume, and market conditions. Investors in our common stock may experience high fluctuations in the market
price and volume of the trading market for our securities. These fluctuations, when they occur, have a negative effect on the market
price for our securities. Accordingly, our stockholders may not be able to realize a fair price for their shares when they determine
to sell them or may have to hold them for a substantial period of time until the liquidity of the market for our common stock improves.

 Our
charter allows us to issue "blank check" preferred stock and establish its terms, conditions, rights, powers and preferences
without stockholder approval.

 Pursuant
to our certificate of incorporation, our Board of Directors has the authority to issue up to 10 million shares of " blank check "
preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares
without any additional vote or action by our stockholders. Because our Board of Directors can designate the terms, conditions,
rights, powers, and preferences of the preferred stock without the vote of a majority of our stockholders, our stockholders will have
no control over what designations and preferences our preferred stock will have. The issuance of shares of preferred stock, or the rights
associated therewith, could cause substantial dilution to our existing stockholders. Additionally, the dilutive effect of any preferred
stock that we may issue may be exacerbated given the fact that such preferred stock may have voting rights, liquidation and/or other
rights or preferences that could provide the preferred stockholders with substantial voting control over us and/or give those holders
the power to prevent or cause a change in our control. As a result, the issuance of shares of preferred stock may cause the value of
our common stock to decrease.

 We
have never paid or declared any dividends on our common stock.

 We
do not anticipate paying dividends or distributions on our common stock. Any future dividends on our common stock
will be declared at the discretion of our Board of Directors and will depend on, among other things, our earnings, our financial requirements
for future operations and growth, and other facts as we may then deem appropriate. Since we do not anticipate paying cash dividends on
our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.

 If
securities or industry analysts do not initiate research coverage on us and, if initiated, fail to publish research or reports, or publish
unfavorable research or reports, about our business, our stock price and trading volume may decline.

 The
trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us,
our business, our markets, and our competitors. We do not currently have any securities or industry analysts that have initiated research
coverage on our business. When any securities or industry analysts initiate research coverage on our business, we will not control
these analysts. If securities analysts do not cover our common stock, the lack of research or other coverage may adversely affect the
market price and decrease the trading volume of our common stock. Furthermore, if one or more of the analysts who do cover us downgrade
our stock, or if those analysts issue other unfavorable commentary about us or our business, our stock price would likely decline. If
one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility in the market,
and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair
our ability to expand our business and attract new clients and customers to purchase our cybersecurity products and services.

 The
sale of shares of our common stock by our directors and officers may adversely affect the market price for our common stock.

 Sales
of significant amounts of shares of common stock by our officers and directors, or the prospect of such sales, could adversely affect
the market price of our common stock. Our management's stock ownership may discourage a potential acquirer from making a tender
offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing
a premium over our stock's market price.

 The
ability of our executive officers and directors to control our business may limit or eliminate other stockholders' ability to influence
corporate affairs.

 As
of September 30, 2025, our Executive Leadership Team ("ELT") and Directors owned approximately 46.4% of the Company's total issued and outstanding
shares. Because of this voting control through share ownership by the ELT and Directors, these individuals, acting as
a group, have significant influence over corporate actions requiring a shareholder vote, including the selection of our Directors, who
in turn approve all executive officers, authorizing change-in-control transactions, amendments to our Articles of Incorporation, and
other significant corporate matters. The interests of our ELT and Directors may differ from the interests of other stockholders
with respect to the issuance of shares, business transactions with or sales to other companies, selection of future officers and directors
and other business decisions. The minority stockholders will have no way of overriding the decisions made by our ELT and
Directors acting as a group.

 Risks
Related to Our Industry

 Economic
uncertainty may pressure our customers to reduce their IT and cybersecurity spending.

 Worsening
economic conditions, including inflation, recession, pandemic, or other changes in economic conditions, may cause lower IT spending and
adversely affect our results of operations. If demand for computing power, PCs, servers, and other computing devices declines, or consumer
or business spending for those products declines, our results of operations could be adversely affected. Our product distribution system
relies on our partner and network. The impact of economic conditions on our partners, such as the bankruptcy of one of our partners could
adversely affect our financial condition and results of operations.

 Challenging
economic conditions also may impair the ability of our customers to pay for products and services they have purchased. As a result, allowances
for doubtful accounts and write-offs of accounts receivable may increase.

 Current
global financial conditions have been characterized by increased volatility, which could negatively impact our business, prospects, liquidity
and financial condition.

 Global
financial conditions continue to be marked by significant volatility, rising interest rates, inflationary pressures, and tightening credit
markets. These factors may negatively affect customer budgets, delay technology investments, and reduce demand for our cybersecurity
products and services. Market instability could also restrict our access to capital, increase borrowing costs, and limit our liquidity
or operational flexibility. In addition, periods of financial stress often coincide with heightened cybersecurity risks, as organizations
with constrained resources may defer security upgrades or reduce cyber defense spending. Sustained volatility or an extended economic
downturn could materially and adversely impact our business operations, financial performance, and long-term growth prospects.

 Inflation
and geo-political events increase the risk that we are unable to achieve and maintain profitable operations.

 A
disruption or failure of our systems, operations, or supply chain because of a major earthquake, weather event, cyberattack, terrorist
attack, pandemic, or other catastrophic event could cause delays in completing sales, providing services, or performing other critical
functions. A catastrophic event that results in the destruction or disruption of any of our critical business or systems, or the infrastructure
or systems they rely on, such as power grids, could harm our ability to conduct normal business operations or adversely affect our results
of operations. Providing our customers with more services and solutions in the cloud puts a premium on the resilience of our systems
and strength of our business continuity management plans and magnifies the potential negative consequences of prolonged service outages.

 Abrupt
political change, terrorist activity, and armed conflict, such as the ongoing conflict in Ukraine, pose economic and other risks, which
may negatively impact our ability to sell to and collect from customers, increase our operating costs, or otherwise disrupt our operations
in markets both directly and indirectly impacted by such events. These conditions also may add uncertainty to the timing and budget for
technology investment decisions by our customers and may cause supply chain disruptions for hardware manufacturers. Geopolitical change
may result in changing regulatory systems and requirements and market interventions that could impact our operating strategies, access
to national, regional, and global markets, hiring, and profitability. Geopolitical instability may lead to sanctions and impact our ability
to do business in some markets or with some public-sector customers. Any of these changes could adversely affect our results of operations.
Changes in geopolitical conditions also increase the security risks described elsewhere in these risk factors.

 The
occurrence of regional epidemics or a global pandemic, such as COVID-19, could adversely affect our business, operations, financial condition,
and results of operations. The extent to which global pandemics impact our business going forward will depend on factors such as the
duration and scope of the pandemic; governmental, business, and individuals' actions in response to the pandemic; and the impact
on economic activity, including the possibility of recession or financial market instability. Measures to contain a global pandemic may
intensify other risks described in these Risk Factors.

 Risks
Related to Our Financial Position and Need for Capital

 We have
incurred net losses and may never achieve profitability.

 Our
likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered
in connection with development of a new business enterprise. Our accumulated deficit as of September 30, 2025, was $20.7 million.

 We
cannot assure our current stockholders or future investors that that any of our new products and services currently under development
will be successfully commercialized, and the extent of our future losses and the timing of any possible profitability, if ever achieved,
are highly uncertain. If we are unable to achieve profitability, we may, at any time, be unable to continue our operations.

 Our
ability to continue as a going concern may depend upon our ability to raise additional capital and such capital may not be available
on acceptable terms, or at all.

 We
currently believe that our available cash will allow us to fund our operations through at least December 2026. Nevertheless, we may need
to raise additional capital to fund operating losses, support future expansion, develop new or enhanced products and services, hire employees,
respond to competitive pressures, acquire technologies, or respond to unanticipated events or requirements before then. Our management's
plans include attempting to improve our profitability and our ability to generate sufficient cash flow from operations to meet our operating
needs on a timely basis, obtaining additional working capital funds through equity and debt financing arrangements, and restructuring
on-going operations to eliminate inefficiencies and reduce our expenses. However, we are not assured that these plans and arrangements
will be sufficient to fund our ongoing capital expenditures, working capital, and other requirements. The outcome of these actions cannot
be predicted at this time. There can be no assurance that any additional financings will be available to us on satisfactory terms and
conditions, if at all. If adequate funds are not available on acceptable terms, we may be unable to develop or enhance our products and
services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, any of which could
have a material adverse effect on our business, financial condition and operating results. If we raise additional funds through the issuance
of equity securities, or convertible debt, the percentage ownership of our stockholders will be reduced, and holders may experience dilution
in net book value per share.

 The
amount of capital we may need depends on many factors, including the progress, timing, scope and market acceptance of our product development
programs; the time and cost required to obtain any necessary regulatory approvals; the possibility of litigation; our ability to enter
into and maintain collaborative, licensing and other commercial relationships; and our ability to secure commitment of time and resources
from third parties to the development and commercialization of our products.

 The
capital markets have been unpredictable for unprofitable companies such as ours. The amount of capital that we may be able to raise depends
on variables that are beyond our control. As a result, we may not be able to secure financing on terms acceptable to us, or at all. Even
if we are able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs. If adequate funds
are not available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued
viability will be materially adversely affected.

 If
we can raise additional funding, we may be required to do so on terms that are dilutive to our stockholders.

 Our
future issuances of new equity will dilute the ownership percentage of our existing stockholders. The extent of such dilution will depend
on the number of shares issued. Neither the amount of funds that may be received in such equity financing, nor the price per share of
our equity securities issued are known at this time.

 We
will continue to incur increased costs as a result of being a reporting company and, given our limited capital resources, such additional
costs may have an adverse impact on our profitability.

 We
are a Securities Exchange Act of 1934 (the "Exchange Act") reporting company, meaning that we report certain required
material financial information with the Securities and Exchange Commission ("SEC"). The rules and regulations under the
Exchange Act require reporting companies to provide periodic reports with interactive data files, which require that we engage
Gathering, Analysis, and Retrieval) service providers. The engagement of such services can be costly, and we may continue to incur
additional financial losses, which may adversely affect our ability to continue as a going concern. In addition, the Sarbanes Oxley
Act of 2002, as well as a variety of new related and unrelated rules implemented by the SEC, have required changes in corporate
governance practices and generally increased the disclosure requirements of public companies. For example, as a result of being a
reporting company, we are required to file periodic and current reports and other information with the SEC, and we are adopting and
revising policies regarding disclosure controls and procedures, including internal controls over financial reporting.

 The
additional costs we continue to incur in connection with being a reporting company (expected to be approximately seven to eight hundred
thousand dollars per year) will continue to further stretch our limited capital resources. Due to our limited resources, we have to allocate
resources away from other productive uses in order to continue to comply with our obligations as an SEC reporting company. Further, there
is no guarantee that we will have sufficient resources to continue to meet our reporting and filing obligations with the SEC as they
come due.

 We
may apply working capital and future funding to uses that ultimately do not improve our operating results or increase the market price
of our securities.

 In
general, we have complete discretion over the use of our working capital and any new investment capital we may obtain in the future that
has no dedicated use of proceeds. Because of the number and variety of factors that could determine our use of funds, our ultimate expenditure
of funds (and their uses) may vary substantially from our current intended operating plan for such funds.

 We
intend to use existing working capital and future funding to support the development of our products and services, the expansion of our
marketing, or the support of operations to educate the end users of the software we sell. We will also use capital for market and network
expansion, acquisitions, and general working capital purposes. However, we do not have more specific plans for the use and expenditure
of our capital. Our management has broad discretion to use any or all of our available capital reserves. Our capital could be applied
in ways that do not improve our operating results or otherwise increase the market value of a stockholder's shares.

 Risks
Related to our Business and Results of Operations

 We
depend significantly upon the continued involvement of our present management and on our ability to attract and retain talented employees.

 Our
future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. The loss of the services
of any of our key personnel, the inability to attract or retain qualified personnel, any failure to have in place and execute an effective
succession plan for key executives or delays in hiring required personnel, particularly in engineering, sales and marketing, may seriously
harm our business, financial condition and results of operations. From time to time, we experience turnover in our management-level personnel.
None of our key employees has an employment agreement for a specific term, and any of our employees may terminate their employment at
any time. Our ability to continue to attract and retain highly skilled personnel will be critical to our future success.

 Competition
for highly skilled personnel is frequently intense, especially for qualified sales, support and engineering employees in cybersecurity
software and services and especially in the locations where we have a substantial presence and need for highly skilled personnel, such
as software engineers and advanced cybersecurity engineers. We may not be successful in attracting, assimilating or retaining qualified
personnel to fulfill our current or future needs. In addition, to the extent we hire personnel from competitors, we may be subject to
allegations that they have been improperly solicited or divulged proprietary or other confidential information. Changes in immigration
laws, including changes to the rules regarding H1-B visas, may also harm our ability to attract personnel from other countries. Our inability
to hire properly qualified and effective sales, support and engineering employees could harm our growth and our ability to effectively
support growth.

 We
rely on third-party software for certain essential financial and operational services. Failure, outages or disruption in services,
systems and infrastructure supplied by third parties could negatively affect our business, financial condition and financial
results.

 We
currently incorporate, and will in the future incorporate, technology that we license from third parties, including software, into our
solutions. We cannot be certain that our licensors will continue to be available to us or in the market in general. Some of our agreements
with our licensors may be terminated by them for convenience or otherwise provide for a limited term. If we are unable to continue to
license technology or if we are unable to continue our license agreements with our third-party licensors or enter into new licenses on
commercially reasonable terms, our ability to develop and sell solutions and services containing or dependent on that technology would
be limited, and our business could be harmed. Additionally, if we are unable to license technology from third parties, we may be forced
to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner or at all, and may require
us to use alternative technology of lower quality or performance standards. This could limit or delay our ability to offer new or competitive
solutions and increase our costs. As a result, our margins, market share, and results of operations could be significantly harmed.

 We
previously identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. If
not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial
reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations,
each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

 Maintaining
effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce
reliable financial statements. Our disclosure controls and procedures and internal controls over financial reporting are currently ineffective
and have in the past been subject to material weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual
or interim financial statements will not be prevented or detected on a timely basis. A control deficiency exists when the design or operation
of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis.

 We
cannot assure you that additional material weaknesses will not arise in the future. The development of new material weaknesses in our
internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to
meet our reporting and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading
price of our common stock, and/or result in litigation against us or our management.

 If
our estimates, assumptions, or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards
or interpretations change, our results of operations could be adversely affected.

 If
we do not effectively manage our growth, our business resources and systems may become strained, and we may be unable to increase revenue
growth.

 If
we do not effectively manage our growth, our operations, systems, and resources may become overextended, leading to inefficiencies and
diminished performance. Rapid expansion can strain our infrastructure, challenge internal controls, and limit management's ability
to maintain operational discipline and quality standards. Inadequate integration of new customers, employees, or technologies could disrupt
service and software delivery. Additionally, failing to scale our systems or workforce in line with growth may prevent us from meeting
demand, containing costs, or achieving strategic objectives. Such challenges could materially and adversely affect our revenue growth,
operating results, and long-term competitiveness.

 Our
sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.

 Increased
market awareness of our capabilities and products and increased lead generation are essential to our continued growth and our success
in all our markets, particularly the market for sales to large businesses, service providers and government organizations. While we
have increased our investments in sales and marketing, it is not clear that these investments will continue to result in increased revenue.
If our investments in additional sales personnel or our marketing programs are not successful in continuing to create market awareness
of our company and products or increasing lead generation, in growing billings for our broad product suite or if we experience turnover
and disruption in our sales and marketing teams, we may not be able to achieve sustained growth, and our business, financial condition
and results of operations may be adversely affected.

 If
we do not effectively expand and train our direct sales force, we may be unable to add new customers or retain and increase sales to
our existing customers, and our business will be adversely affected.

 We
depend on our direct sales force to obtain new customers or retain and increase sales
with existing customers. Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting,
training and retaining enough sales personnel, particularly in international markets. There is significant
competition for sales personnel with the skills and technical knowledge that we require. New hires require significant training and
may take significant time before they achieve full productivity, and this delay is accentuated by our long sales cycles. Our recent
hires and planned hires may not become productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers
of qualified individuals in the markets where we do business or plan to do business. In addition, a large percentage of our sales
force is new to our company and selling our solutions, and therefore this team may be less effective than our more seasoned sales
personnel. Furthermore, hiring sales personnel in new countries, or expanding our existing presence, requires upfront and ongoing
expenditures that we may not recover if the sales personnel fail to achieve full productivity. We cannot predict whether, or to what
extent, our sales will increase as we expand our sales force or how long it will take for sales personnel to become productive. If
we are unable to hire and train enough effective sales personnel, or the sales personnel we hire are not successful in obtaining new
customers or increasing sales to our existing customer base, our business and results of operations will be adversely
affected.

 Our
future revenue and operating results will depend significantly on our ability to retain clients and customers and the ability to add
new clients and customers. Any decline in our retention rates or failure to add new clients and customers will harm our business prospects
and operating results.

 Our
future revenue and operating results depend significantly on our ability to retain existing clients and attract new ones. Competitive
pressures, evolving customer expectations, pricing dynamics, and changes in technology preferences could negatively affect our retention
rates and sales performance. If we fail to maintain strong client relationships, effectively demonstrate value, or expand our customer
base, our growth opportunities and recurring revenue streams may decline. Any sustained decrease in client retention or delays in acquiring
new customers could adversely affect our business prospects, financial performance, and overall market position.

 Our
growth depends in part on the success of our strategic relationships with third parties.

 Our
growth depends in part on the strength and success of our strategic relationships with third parties, including technology providers,
resellers, and service partners. If these partners fail to meet performance expectations, modify their business objectives, or terminate
agreements, our ability to deliver products and expand into new markets could be hindered. Dependence on third parties also limits our
control over key aspects of service delivery, pricing, and customer experience. Any disruptions, misalignments, or loss of these relationships
could negatively affect our revenue growth, market reach, and competitive position.

 If
we experience a decline in billing, delays and/or defaults in payments, we could be unable to recover all expenditures, and our operating
margins may decline.

 We
may experience slowing growth or a decrease in billings, revenue, operating margin and free cash flow for a number of reasons, including
a slowdown in pipeline growth or for demand for our products or services generally, a shift in demand from products to services, decrease
in services revenue growth, increased competition, execution challenges including sales execution challenges and lack of optimal sales
productivity, worldwide or regional economic challenges based on inflation or possible stagflation, a regional recession or a recession
in the global economy, changing interest rates, the war in Ukraine, a decrease in the growth of our overall market or softness in demand
in certain geographies or industry verticals, such as the service provider industry, changes in our strategic opportunities, execution
risks, lower sales productivity and our failure for any reason to continue to capitalize on sales and growth opportunities due to other
risks identified in the risk factors described in this periodic report. Our expenses as a percentage of total revenue may be higher than
expected if our revenue is lower than expected. If our investments in sales and marketing and other functional areas do not result in
expected billings and revenue growth, we may experience margin declines. In addition, we may not be able to sustain our historical profitability
levels in future periods if we fail to increase billings, revenue or deferred revenue, and do not appropriately manage our cost structure,
free cash flow, or encounter unanticipated liabilities. As a result, any failure by us to maintain profitability and margins and continue
our billings, revenue and free cash flow growth could cause the price of our common stock to materially decline.

 We
face intense competition, especially from larger, well-established companies, and we may lack sufficient financial or other resources
to maintain or improve our competitive position. We may lose market share to our competitors, which could adversely affect our business,
financial condition, and results of operations.

 The
market for network security products is intensely competitive and dynamic, and we expect competition to continue to intensify. We face
many competitors across the different cybersecurity markets. Our competitors include companies such as Check Point, Cisco, CrowdStrike,
F5 Networks, HPE, Huawei, Illumio, Juniper, Microsoft, Netskope, Palo Alto Networks, SonicWALL, Sophos, and zScaler. Some of our existing
and potential competitors enjoy competitive advantages such as: greater name recognition and/or longer operating histories; larger sales
and marketing budgets and resources; broader distribution and established relationships with distribution partners and end-customers;
access to larger customer bases; greater customer support resources; greater expertise in certain single point solutions; greater resources
to make acquisitions; stronger U.S. government relationships; lower labor and development costs; and substantially greater financial,
technical and other resources.

 In
addition, certain of our larger competitors have broader product offerings, and leverage their relationships based on other products
or incorporate functionality into existing products in a manner that discourages customers from purchasing our products. These larger
competitors often have broader product lines and market focus and are in a better position to withstand any significant reduction in
capital spending by end-customers in these markets. Therefore, these competitors will not be as susceptible to downturns in a particular
market. Also, many of our smaller competitors that specialize in providing protection from a single type of security threat are often
able to deliver these specialized security products to the market more quickly than we can.

 Conditions in our markets could change rapidly and significantly because of technological advancements or continuing market consolidation.
Our competitors and potential competitors may also be able to develop products or services, and leverage new business models, that are
equal or superior to ours, achieve greater market acceptance of their products and services, disrupt our markets, and increase sales
by utilizing different distribution channels than we do. For example, certain of our competitors are focusing on delivering security
services from the cloud which include cloud-based security providers, such as CrowdStrike and Zscaler. In addition, current or potential
competitors may be acquired by third parties with greater available resources, and new competitors may arise pursuant to acquisitions
of network security companies or divisions. As a result of such acquisitions, competition in our market may continue to increase and
our current or potential competitors might be able to adapt more quickly to new technologies and customer needs, devote greater resources
to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of acquisition
or other opportunities more readily, or develop and expand their product and service offerings more quickly than we do. In addition,
our competitors may bundle products and services competitive with ours with other products and services. Customers may accept these bundled
products and services rather than separately purchasing our products and services. As our customers refresh the security products bought
in prior years, they may seek to consolidate vendors, which may result in current customers choosing to purchase products from our competitors
on an ongoing basis. Due to budget constraints or economic downturns, organizations may be more willing to incrementally add solutions
to their existing network security infrastructure from competitors than to replace it with our solutions. These competitive pressures
in our market or our failure to compete effectively may result in price reductions, fewer customer orders, reduced revenue and gross
margins and loss of market share.

 We
have limited experience with some of our pricing models, particularly for our newer products and solutions as well as bundled sales of
our products and solutions, and we may not accurately predict the long-term rate of paying customer adoption or renewal, or the impact
these will have on our revenue or results of operations.

 We
have limited experience with some of our pricing models, especially for newer or bundled offerings, and may not accurately predict their
long-term performance or customer adoption. Changes in customer usage, market expectations, or competitive dynamics could lead to revenue
fluctuations or lower-than-expected renewals. Inflexible billing systems, evolving consumption patterns, or misaligned pricing structures
may also impact our ability to forecast growth or maintain profitability. If we fail to optimize or correctly anticipate the financial
impact of our pricing strategies, our revenue stability and operating results could be materially affected.

 Competitive
pricing pressure may reduce our gross profits and adversely affect our financial results.

 The
cybersecurity market is highly competitive, and pricing pressure from both established and emerging competitors may reduce our gross
profit margins. Many providers are lowering prices to gain market share or appeal to budget-conscious customers, which can erode profitability
across the industry. As customers increasingly evaluate offerings based on cost and perceived value, we may be required to adjust our
pricing or offer additional incentives to remain competitive. If we cannot effectively differentiate our solutions or maintain pricing
discipline while preserving quality, our revenue, gross margins, and overall financial results could be adversely affected.

 Our
largest revenue stream is providing consulting services. If we are unable to attract and retain qualified personnel, our business could
be harmed.

 Our
consulting services represent a significant source of revenue, and our success depends on attracting, developing, and retaining highly
qualified professionals. The cybersecurity industry faces a well-documented shortage of skilled talent, driving intense competition for
experienced consultants. If we cannot hire or retain personnel with the necessary technical expertise or industry certifications, we
may be unable to deliver projects on time, maintain service quality, or meet client expectations. High turnover, increased labor costs,
or resource constraints could also reduce our consulting capacity and profitability. Any inability to sustain a skilled workforce may
adversely affect our growth and financial results.

 If
we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological and market developments and successfully
manage product introductions and transitions to meet changing needs in the cybersecurity technology market, our competitive position,
financial results, and prospects will be harmed.

 The
cybersecurity landscape evolves rapidly, driven by emerging threats, regulatory shifts, and advancements such as AI, zero trust
architectures, and post-quantum security. Our success depends on accurately anticipating these developments, aligning our solutions
with market needs, and managing timely product launches and transitions. Failure to predict or respond effectively to new
technologies or changing customer requirements could result in outdated offerings, reduced competitiveness, or missed growth
opportunities. If we do not continually innovate and adapt to these market dynamics, our competitive position, financial
performance, and long-term prospects could be materially harmed.

 Delays
in product development or failure to introduce new and improved offerings could harm our revenues and competitive position.

 Our
ability to maintain growth and competitiveness depends on timely product development and continual innovation. The cybersecurity industry
evolves rapidly, and meeting customer expectations requires ongoing enhancements in performance, features, and reliability. Delays in
product development schedules, resource constraints, or technical challenges could limit our ability to introduce new or improved offerings
on time. Additionally, if our new products or updates fail to gain market acceptance, or if we cannot keep pace with emerging technologies
and competitive advancements, our market share and profitability could decline. Ineffective management of product transitions or innovation
pipelines may also lead to reduced customer confidence and missed growth opportunities. Collectively, these factors could materially
and adversely affect our revenues, reputation, and overall financial performance.

 Failures,
defects, or vulnerabilities in our complex products and services could harm our reputation, reduce sales, and expose us to legal or financial
liability.

 Our
success depends on the market's confidence in our ability to provide effective network security protection. Despite our efforts
and processes to prevent breaches of our internal networks, systems and websites, whether in our premises, cloud providers
or colocations, we are still vulnerable to computer viruses, break-ins, phishing attacks, ransomware attacks, attempts to overload our
servers with denial-of-service, vulnerabilities in vendor hardware and software that we leverage, advanced persistent threats from sophisticated
actors and other cyber-attacks and similar disruptions from unauthorized access to our internal networks, systems or websites, whether
in our premises, cloud providers or colocations. Our security measures may also be breached due to employee error, malfeasance
or otherwise, which breaches may be more difficult to detect than outsider threats, and the existing programs and trainings we have in
place to prevent such insider threats may not be effective or sufficient. Third parties may also attempt to fraudulently induce our employees
to transfer funds or disclose information in order to gain access to our networks and confidential information. Third parties may also
send our customers or others malware or malicious emails that falsely indicate that we are the source, potentially causing lost confidence
in us and reputational harm. We cannot guarantee that the measures we have taken to protect our networks, systems and websites, whether
in our premises, cloud providers or colocations, will provide adequate security. Moreover, because we provide network security
products, we may be a more attractive target for attacks by computer hackers and any security breaches and other security incidents involving
us may result in more harm to our reputation and brand than companies that do not sell network security solutions. Hackers and malicious
parties may be able to develop and deploy viruses, worms, ransomware and other malicious software programs that attack our products and
customers, that impersonate our update servers in an effort to access customer networks and negatively impact customers, or otherwise
exploit any security vulnerabilities of our products, or attempt to fraudulently induce our employees, customers or others to disclose
passwords or other sensitive information or unwittingly provide access to our internal networks, systems or data. Moreover, the threat
landscape continues to evolve as a result of new technologies, including AI, and malicious parties may use AI to help attack our solutions,
systems, and our customers.

 Although
we take numerous measures and implement multiple layers of security to protect our networks, we cannot guarantee that our security products,
processes and services will secure against all threats. Further, we cannot be sure that third parties have not been, or will not in the
future be, successful in improperly accessing our systems and our customers' systems, which could negatively impact us and our
customers. An actual breach could significantly harm us and our customers, and an actual or perceived breach, or any other actual or
perceived data security incident, threat or vulnerability, that involves our supply chains, networks, systems or websites and/or our
customers' supply chains, networks, systems or websites could adversely affect the market perception of our products and services
and investor confidence in our company. Any breach of our networks, systems or websites could impair our ability to operate our business,
including our ability to provide Enclave and other security subscriptions and Enclave technical support services to our end-customers,
lead to interruptions or system slowdowns, cause loss of critical data or lead to the unauthorized disclosure or use of confidential,
proprietary or sensitive information. We could also be subject to liability and litigation and reputational harm, and our channel partners
and end-customers may be harmed, lose confidence in us and decrease or cease using our products and services. Any breach of our internal
networks, systems or websites could have an adverse effect on our business, operating results and stock price.

 Claims,
litigation, government investigations, and other proceedings may adversely affect our business and results of operations.

 We
may become subject to a variety of claims and lawsuits. These claims may arise from a wide variety of business practices and initiatives,
including new product releases, significant business transactions, warranty or product claims, employment practices, and regulation.
As we continue to expand our business and offerings, we may experience new and novel legal claims. Adverse outcomes in some or all
these claims may result in significant monetary damages or injunctive relief that could adversely affect our ability to conduct our business.
Litigation and other claims are subject to inherent uncertainties and management's view of these matters may change in the future.
An adverse impact to our financial condition and results of operations could occur for the period in which the effect of an unfavorable
outcome becomes probable and reasonably estimable.

 The
success of our business depends in part on our ability to protect and enforce our intellectual property rights.

 Protecting
our intellectual property rights and combating unlicensed copying and use of our software, source code, and other intellectual property
is difficult. Similarly, the absence of harmonized international patent laws makes it more difficult to ensure consistent respect for
patent rights. Changes in the law may continue to weaken our ability to prevent the use of patented technology. Our increasing engagement
with open source software will also cause us to license our intellectual property rights broadly in certain situations. If we are unable
to protect our intellectual property, our results of operations could be adversely affected.

 Claims
by others that we infringe their proprietary technology or other rights, or other lawsuits asserted against us, could result in significant
costs and substantially harm our business, financial condition, results of operations and prospects.

 From
time to time, others may claim we infringe their intellectual property rights,
including current copyright infringement and other claims arising from AI training and output. To resolve these claims, we may enter
into royalty-bearing data access or licensing agreements on terms that are less favorable than currently available, stop selling or
redesign affected products or services, or pay damages to satisfy indemnification commitments with our customers. Adverse outcomes
could also include monetary damages or injunctive relief that may limit or prevent importing, marketing, and selling our products or
services that have infringing technologies. We may be required to
pay significant amounts to settle claims related to the use of technology and intellectual property rights and to
procure intellectual property rights as part of our strategy to manage this risk, and may continue to do so, which could adversely
affect our results of operations.

 We
are subject to changing laws and regulations, of which failure to comply could subject us to fines and penalties.

 We
are subject to a wide range of laws, regulations, and legal requirements in the U.S. and globally, including those that may apply to
our products and online services offerings, and those that impose requirements related to user privacy, telecommunications, data storage
and protection, digital accessibility, advertising, and online safety. Laws in several jurisdictions, including EU Member State laws
under the European Electronic Communications Code, increasingly define certain of our services as regulated services. This trend may
continue with our offerings becoming subject to additional data protection, security, digital safety, law enforcement surveillance, and
other obligations. Regulators and private litigants may assert that our collection, use, and management of customer data and other information
is inconsistent with their laws and regulations, including laws that apply to the tracking of users via technology such as cookies. In
addition, laws requiring us to retrieve and produce customer data in response to compulsory legal demands from law enforcement and governmental
authorities are expanding and the requests we are experiencing are increasing in volume and complexity.

 New,
existing, and evolving laws and regulations, or interpretations or applications of existing laws and regulations in a manner inconsistent
with our interpretations of such laws and regulations or our practices, may result in modification of our products and services, altered
business models and operations, increased costs, reputational damage, and civil or criminal liability.

 Failure
to comply with laws and regulations applicable to government contracting, or to meet the unique requirements and constraints of government
customers, could harm our reputation and ability to secure or maintain public sector business.

Sales to U.S. and foreign federal, state and local government organizations are subject to several risks. Because of public sector
budgetary cycles and laws or regulations governing public procurements, such sales often require significant upfront time and expense
without any assurance of winning a sale. Government demand, sales and payment for our products and services may be negatively impacted
by numerous factors and requirements unique to selling to government agencies, such as: policies, laws and regulations have in the past,
and may in the future, require us to obtain and maintain certain security and other certifications in order to sell our products and
services into certain government organizations, and such certifications may be costly and time-consuming to obtain and maintain; funding
authorizations and requirements unique to government agencies, with funding or purchasing reductions or delays adversely affecting public
sector demand for our products; and geopolitical matters, including tariff and trade disputes, government shutdowns, impact of the war
in Ukraine, tensions between China and Taiwan and trade protectionism and other political dynamics that may adversely affect our ability
to sell in certain locations or obtain the requisite permits and clearances required for certain purchases by government organizations
of our products and services.

In addition, if we do not have certain certifications, this may restrict our ability to sell to certain customers until we have obtained
certain certifications, and we may not obtain the certifications in a timely manner or at all. For example, certain of our competitors
may have decided to become certified under the U.S. Federal Risk and Authorization Management Program ("FedRAMP"), and until
the time that we also certify under FedRAMP, we risk losing deals to certified competitors for deals where FedRAMP certification is a
requirement.

The rules and regulations applicable to sales to government organizations may also negatively impact sales to other organizations. For
example, government organizations may have contractual or other legal rights to terminate contracts with our distributors and resellers
for convenience or due to a default, and any such termination may adversely impact our future results of operations. If the distributor
receives a significant portion of its revenue from sales to government organizations, the financial health of the distributor could be
substantially harmed, which could negatively affect our future sales to such distributor. Governments routinely investigate, review and
audit government vendors' administrative and other processes, and any unfavorable investigation, audit, other review or unfavorable
determination related to any government clearance or certification could result in the government's refusing to continue buying
our products and services, a limitation and reduction of government purchases of our products and services, a reduction of revenue or
fines, or civil or criminal liability if the investigation, audit or other review uncovers improper, illegal or otherwise concerning
activities. Any such penalties could adversely impact our results of operations in a material way. Further, any refusal to grant certain
certifications or clearances by one government agency, or any decision by one government agency that our products do not meet certain
standards, may reduce business opportunities and cause reputational harm and cause concern with other government agencies, governments
and businesses and cause them to not buy our products and services and/or lead to a decrease in demand for our products generally.

 Governmental
restrictions on the sale of our products and services in non-U.S. markets could negatively affect our business, financial condition,
and financial results.

 Expanding
internationally and selling outside the United States may depend on our ability to comply with evolving export control laws and
government-imposed restrictions on the sale or use of cybersecurity products. U.S. and foreign regulations increasingly limit the
export of technology, software, and services involving advanced computing, encryption, or cybersecurity tools to certain countries
or entities. New or expanded governmental restrictions—such as U.S. export controls on cybersecurity and artificial
intelligence–related systems—could delay shipments, restrict market access, or require costly licensing and compliance
procedures. These laws are complex and may change unpredictably in response to geopolitical tensions. If we are unable to obtain
necessary licenses or adapt to new compliance requirements, we could lose revenue, face penalties, or be excluded from key
international markets, which could materially and adversely affect our business, reputation, and growth prospects.

 Cyberattacks
and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive
position.

 Threats
to security can take a variety of forms. Threat actors, including individual and groups of hackers and sophisticated organizations, including
nation-states, state-sponsored organizations, or cybercriminal groups, continuously undertake attacks that pose threats to our customers
and our internal infrastructure. These actors use a wide variety of methods, which include developing and deploying malicious software;
exploiting known and potential vulnerabilities or intentionally designed processes in our or third-party software, or other infrastructure
to attack our products and services or gain access to our networks; using social engineering techniques to induce our employees, users,
partners, or customers to disclose sensitive information, such as passwords, or take other actions to gain access to our data or our
users' or customers' data; or acting in a coordinated manner or conducting coordinated attacks.

 Inadequate
account security or organizational security practices, including those of companies we have acquired or those of the third parties we
utilize, have resulted and may result in unauthorized access to our systems and data, including customer systems and data. Employees
or third parties may intentionally compromise our or our users' security or systems or reveal confidential information, and laws
in foreign jurisdictions may compel actions by such parties against our interests and could limit our recourse. Malicious actors may
employ the supply chain to introduce malware through software updates or compromised supplier accounts or hardware.

 Cyberthreats
are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully
defending against them. Our current capabilities may not detect certain vulnerabilities or new attack methods, which may allow them to
persist in the environment over long periods of time. It may be difficult to determine the best way to investigate, mitigate, contain,
and remediate the harm caused by a cyber incident. Such efforts may not be successful, and we may make errors or fail to take necessary
actions. It is possible that threat actors may gain undetected access to other networks and systems after establishing a foothold on
an internal system. Breaches of our facilities, network, or data security can disrupt the security of our systems and business applications,
impair our ability to provide services to our customers and protect the privacy of their data, result in product development delays,
compromise confidential or technical business information, require us to allocate more resources to improve technologies or remediate
the impacts of attacks, or otherwise adversely affect our business. In addition, actions taken to remediate an incident could result
in outages, data losses, and disruptions of our services.

 Cyber
incidents and attacks, individually or in the aggregate, could adversely affect our financial condition, results of operations, competitive
position, and reputation, or expose us to legal or regulatory risk.

 ITEM
1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM
1C. CYBERSECURITY

 Risk
management and strategy

 SideChannel,
Inc. recognizes the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information
systems and protect the confidentiality, integrity, and availability of our data.

 Managing
Material Risks & Integrated Overall Risk Management

 SideChannel,
Inc. has strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide
culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making
processes at every level. Our risk management team works closely with our IT department to continuously evaluate and address cybersecurity
risks in alignment with our business objectives and operational needs.

 Engage
Third Parties on Risk Management

 Recognizing
the complexity and evolving nature of cybersecurity threats, SideChannel, Inc. has relationships with a range of external experts,
including cybersecurity assessors, consultants, and auditors in evaluating and testing our risk management systems. These
partnerships enable us to leverage specialized knowledge and insights as needed, to ensure our cybersecurity strategies and
processes remain at the forefront of industry best practices. Our collaboration with these third parties may include audits, threat
assessments, and consultation on security enhancements.

 Oversee
Third-party Risk

 Because
we are aware of the risks associated with third-party service providers, SideChannel, Inc. implements stringent processes to oversee
and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing
monitoring to ensure compliance with our cybersecurity standards. The monitoring includes quarterly assessments by our Chief Information
Security Officer ("CISO") and on an ongoing basis by our security engineers. This approach is designed to mitigate
risks related to data breaches or other security incidents originating from third parties.

 Risks
from Cybersecurity Threats

 We
have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.

 Governance

 The
Board of Directors is acutely aware of the critical nature of managing risks associated with cybersecurity threats. The Board has established
robust oversight mechanisms to ensure effective governance in managing risks associated with cybersecurity threats because we recognize
the significance of these threats to our operational integrity and stakeholder confidence.

 Board
of Directors Oversight

 The
Audit Committee is central to the Board's oversight of cybersecurity risks and bears the primary responsibility for this domain.
The Audit Committee is composed of board members with diverse expertise including, risk management, technology, and finance, equipping
them to oversee cybersecurity risks effectively.

 Management's
Role Managing Risk

 The
CISO and the Chief Executive Officer ("CEO") play a pivotal role in informing the Audit Committee on cybersecurity risks.
They provide comprehensive briefings to the Audit Committee on a regular basis, with a minimum frequency of once per year. These briefings
encompass a broad range of topics, including:

 Current
 cybersecurity landscape and emerging threats;

 Status
 of ongoing cybersecurity initiatives and strategies;

 Incident
 reports and learnings from any cybersecurity events; and

 Compliance
 with regulatory requirements and industry standards.

 In
addition to our scheduled meetings, the Audit Committee, CISO and CEO maintain an ongoing dialogue regarding emerging or potential cybersecurity
risks. Together, they receive updates on any significant developments in the cybersecurity domain, ensuring the Board's oversight
is proactive and responsive. The Audit Committee actively participates in strategic decisions related to cybersecurity, offering guidance
and approval for major initiatives. This involvement ensures that cybersecurity considerations are integrated into the broader strategic
objectives of SideChannel, Inc. The Audit Committee conducts an annual review of the company's cybersecurity posture and the effectiveness
of its risk management strategies. This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity
efforts with the overall risk management framework.

 Risk
Management Personnel

 Primary
responsibility for assessing, monitoring and managing our cybersecurity risks rests with the CISO, Mr. Eric Gauthier. With over 20 years
of experience in the field of cybersecurity, Mr. Gauthier brings a wealth of expertise to his role. His background includes extensive
experience as an enterprise CISO and is well-recognized within the industry. His in-depth knowledge and experience are instrumental in
developing and executing our cybersecurity strategies. Our CISO oversees our governance programs, tests our compliance with standards,
remediates known risks, and leads our employee training program.

 Monitor
Cybersecurity Incidents

 The
CISO is continually informed about the latest developments in cybersecurity, including potential threats and innovative risk management
techniques. This ongoing knowledge acquisition is crucial for the effective prevention, detection, mitigation, and remediation of cybersecurity
incidents. The CISO implements and oversees processes for the regular monitoring of our information systems. This includes the deployment
of advanced security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident,
the CISO is equipped with a well-defined incident response plan. This plan includes immediate actions to mitigate the impact and long-term
strategies for remediation and prevention of future incidents.

 Reporting
to Board of Directors

 The
CISO, in his capacity, regularly informs the CEO and the Chief Financial Officer ("CFO") of all aspects related to cybersecurity
risks and incidents. This ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks
facing SideChannel, Inc. Furthermore, significant cybersecurity matters, and strategic risk management decisions are escalated to the
Board of Directors, ensuring that they have comprehensive oversight and can provide guidance on critical cybersecurity issues.

 ITEM
2. PROPERTIES

 On
December 10, 2021, we entered into a lease for approximately 500 square feet of office space at 146 Main Street in Worcester, Massachusetts,
with the option to renew annually. The annual renewal date is January 1 st. Our current lease payment is $986 per month. The
lease allows for a two percent (2%) increase effective at the beginning of each renewal period. We anticipate the lease payment to be
$1,006 per month during calendar year 2026.

 ITEM
3. LEGAL PROCEEDINGS

 As
of the filing date of this Annual Report on Form 10-K, there are no material pending legal proceedings. From time to time, we may be
involved in ordinary routine litigation incidental to our business, to which we are a party or which our property is the subject. In
addition, none of our officers, directors, affiliates or 5% stockholders (or any associates thereof) is a party averse to us, or has
a material interest adverse to us, in any material proceeding.

 Recently
Settled Litigation

 In
April 2021, Eric Marquez, the former Secretary/Treasurer and Chief Financial Officer of Cipherloc Corporation, and certain other plaintiffs,
filed a lawsuit against Cipherloc Corporation and Michael De La Garza, Cipherloc's former Chief Executive Officer and President,
in the 20 th Judicial District for Hays County, Texas (Cause No. 20-0818). We executed a settlement agreement with the plaintiffs
on December 13, 2024, resulting in the dismissal of the lawsuit with prejudice on January 2, 2025. The settlement agreement requires
the Company to issue the plaintiffs a combined 356,400 shares of common stock and pay a total of $95 thousand in cash in six equal, quarterly
installments of approximately $16 thousand each, beginning by January 1, 2025, and ending by April 1, 2026. The expenses associated with
this settlement were included in our results for the fiscal year ended September 30, 2024. Four payments totaling approximately $63 thousand
have been made and 356,400 shares of common stock have been issued as of September 30, 2025.

 ITEM
4. MINE SAFETY DISCLOSURES

 Not
applicable.

 PART
II

 ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our
common stock is traded on the over-the-counter market and is quoted on the OTCQB Venture Market run by OTC Markets Group under the symbol
"SDCH."

 The
OTC Markets Group is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides
information on current "bids" and "asks," as well as volume information. The trading of securities on the OTC
Markets is often sporadic and investors may have difficulty buying and selling our shares or obtaining market quotations for them, which
may have a negative effect on the market price of our common stock.

 Transfer
Agent

 The
Transfer Agent and Registrar for our common stock is Computershare Limited located in Canton, Massachusetts ("Computershare").

 Trading
History

 The
following table sets forth, for the periods indicated the high and low closing bid quotations for our common stock. These quotations
represent inter-dealer quotations, without adjustment for retail markup, markdown, or commission and may not represent actual transactions.

 Low

 High

 Fiscal
 2024

 First Quarter (October 1, 2023, to
 December 31, 2023)

 $
 0.01

 $
 0.05

 Second Quarter (January 1, 2024, to March 31, 2024)

 0.02

 0.06

 Third Quarter (April 1, 2024, to June 30, 2024)

 0.03

 0.07

 Fourth Quarter (July 1, 2024, to September 30, 2024)

 0.03

 0.05

 Fiscal
 2025

 First Quarter (October 1, 2024, to December 31, 2024)

 $
 0.03

 $
 0.06

 Second Quarter (January 1, 2025, to March 31, 2025)

 0.03

 0.05

 Third Quarter (April 1, 2025, to June 30, 2025)

 0.03

 0.07

 Fourth Quarter (July 1, 2025, to September 30, 2025)

 0.06

 0.16

 Fiscal
 2026

 First Quarter (October 1, 2025, to December 31, 2025)
 (1)

 $
 0.05

 $

 0.08

 (1)

 Through
 December 12, 2025

 As
of September 30, 2025, there were 231,229,054 shares of our common stock issued and outstanding, and there were approximately 699 holders
of our common stock on record at Computershare.

 Also
as of September 30, 2025, there were zero (0) shares of Preferred Stock issued and outstanding.

 Dividends

 Our
Board of Directors does not intend to declare dividends in the foreseeable future. The declaration, payment, and amount of any future
dividends will be made at the discretion our Board of Directors, and will depend upon, among other things, the results of our operations,
cash flows and financial condition, operating and capital requirements, and such other factors as our Board of Directors consider relevant
at that time. We currently expect to use all available funds to finance the future development and expansion of our business, and we
do not anticipate paying dividends on our common stock in the foreseeable future.

 Recent
Sales of Unregistered Securities

 There
have been no sales of unregistered securities during the year ended September 30, 2025.

 ITEM
6. RESERVED

 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 This
Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying
consolidated financial statements and the notes thereto. In addition, please refer to the discussion of our business and markets contained
in Part 1, Item 1 of this Annual Report on Form 10-K.

 Overview

 Our
Business

 Our
mission is to make cybersecurity simple and accessible for mid-market and emerging companies, a market that we believe is currently underserved.
We believe that our cybersecurity offerings will identify and develop cybersecurity, privacy, and risk management solutions for our customers.
We anticipate that our target customers will continue to need cost-effective security solutions. We continue to expand our catalogue
of services and solutions to address the cybersecurity needs of our customers, including virtual Chief Information Security Officer, cyber program strategy, zero trust, third-party risk management, compliance readiness, cloud security services,
privacy, threat intelligence, managed end-point security solutions, and cybersecurity awareness.

 We
are marketing and selling Enclave, a proprietary software product that simplifies important cybersecurity tasks to achieve "microsegmentation."
By combining zero trust network access with certificate management and machine identity, Enclave seamlessly creates a unified security
architecture that eliminates traditional network vulnerabilities. This integration enables IT teams to enforce precise access policies
based on verified machine identities. Certificate-based identities allow a simplified management for any certificate-based communication,
while the zero trust framework continuously validates every connection attempt. This powerful combination delivers robust security without
the typical management overhead, allowing organizations to implement sophisticated microsegmentation strategies with remarkable simplicity
and minimal resource requirements.

 Our
growth strategy focuses on these three initiatives:

 Increasing
 adoption of Enclave: By promoting Enclave and our other cybersecurity solutions to our existing vCISO clients, we aim to deepen
 our relationships and provide comprehensive, integrated security solutions. This supports the increased demand for zero trust strategies
 and remote worker technologies.

 Securing
 new vCISO Services Clients: As organizations plan to increase security investments due to breaches and the rising complexity
 of cyber threats, we aim to expand our client base by offering flexible, expert vCISO services that address budget constraints and
 the need for rapid security posture establishment.

 Adding
 new Cybersecurity Software and Services offerings: We plan to enhance our portfolio by incorporating transformational technologies
 such as AI-based security operations, data security posture management, polymorphic encryption, cyber-physical system
 security, and application security posture management. This aligns with industry trends and the anticipated incremental spend
 on application and data security due to generative AI.

 We
internally report our revenue using two categories:

 vCISO
 Services: This category captures the revenue from the Chief Information Security Officer services that we provide to our clients
 on a "virtual" or outsourced basis. Embedded into the C-suite executive teams of our clients, our vCISOs deliver services
 including assessing the cybersecurity risk profile, implementing policies and programs to mitigate risks, and managing the day-to-day
 tasks to ensure compliance with the adopted cybersecurity framework. Most of our clients use our vCISO services. Engagements typically
 include a fixed monthly subscription fee and exceed 12 months because of renewal options of 1, 3, 6, or 12 months.

 Cybersecurity
 Software and Services: This category encompasses an array of cybersecurity software and services that our clients deem necessary
 to protect their digital assets, including Enclave. These augment our vCISO offering and include a full range of other cybersecurity
 products and services delivered through a team of security engineers along with a network of third-party service providers and VARs.
 Commercial relationships with third-party service providers and VARs provide SideChannel with additional internal capabilities to
 mitigate cybersecurity risks. We earn licensing revenue from software contracts and commissions from third-party service provider
 partnerships which are included in this revenue category.

 Revenue

 The
following revenue metrics are for the twelve months ended September 30, 2025, versus the same period in 2024. These summary metrics are
accompanied by pie charts that reflect the revenue by category in fiscal years 2025 and 2024:

 Total
 revenue declined by $49 thousand or 0.7%.

 vCISO
 Services category revenue decreased by $715 thousand or 14.9%.

 Cybersecurity
 Software and Services category revenue grew by $666 thousand or 25.6%.

 The
year-over-year decline in vCISO Services revenue reflects new vCISO client acquisition not exceeding vCISO client churn and the transitioning
of vCISO Services clients into lower revenue generating Cybersecurity Software & Services. Cybersecurity Software & Services
revenue benefited from these transitions along with the expansion of the software and services offered.

 We
also monitor new and retained revenue. The revenue earned from clients during our first twelve months of working with them is classified
as new, while the revenue earned with clients after our first twelve months of working with them is classified as retained. The following
chart provides details on our new and retained revenue for fiscal years 2025 and 2024:

 Further,
we consider revenue retention a key performance indicator. Revenue retention is calculated by dividing retained revenue by the prior
year total revenue. The following table shows the revenue retention for fiscal years 2025 and 2024 by revenue category.

 Trailing Twelve Months Ended

 September 30, 2025

 September 30, 2024

 vCISO Services

 56.4
 %

 67.7
 %

 Cybersecurity Software & Services

 76.9
 %

 72.2
 %

 Total

 63.6
 %

 69.2
 %

 Results
of Operations

 Fiscal
Year Ended September 30, 2025, Compared to Fiscal Year Ended September 30, 2024

 Twelve
 Months Ended

 September
 30,

 2025

 2024

 Revenues

 $
 7,351

 $
 7,400

 Cost of revenues

 3,847

 3,868

 Gross profit

 3,504

 3,532

 Gross margin

 47.7
 %

 47.7
 %

 Operating expenses

 General
 and administrative

 2,894

 3,155

 Selling
 and marketing

 and development

 Total
 operating expenses

 4,422

 4,472

 Operating loss

 (918
)

 (940
)

 Other
 income, net

 Net loss before income tax
 expense

 (878
)

 (899
)

 tax expense

 Net loss after income tax
 expense

 $
 (892
)

 $
 (904
)

 Revenue.
 Our revenue was $7.4 million for the year ended September 30, 2025, compared to $7.4 million in the prior year, a decrease of $49
thousand or 0.7%. We believe this decrease reflects the factors previously discussed in the Overview section above.

 Gross
Margin. Gross margin was 47.7% in each of the fiscal years 2025 and 2024. We have experienced an increase in higher gross margin Enclave revenue which was offset by increased revenue
from lower gross margin third-party services and software.

Expenses. Total operating expenses during fiscal year 2025 were $4.4 million compared to fiscal year 2024 total operating expenses
of $4.5 million, a decrease of $50 thousand or 1.1%.

 General
and Administrative Expenses. Our general and administrative expenses were $2.9 million for the year ended September 30, 2025, compared
to $3.2 million for the prior year, a decrease of $261 thousand or 8.3%. The decrease in general and administrative expenses primarily
resulted from lower professional services, stock-based compensation, and insurance costs. These favorable variances were partially offset
by an increase in personnel related costs.

 Selling
and Marketing Expenses. Our selling and marketing expenses were $966 thousand for the year ended September 30, 2025, compared to
$771 thousand for the prior year, an increase of $195 thousand or 25.3% resulting from an increase in personnel costs and advertising
expenses.

and Development Expenses. Our research and development expenses were $562 thousand for the year ended September 30, 2025, compared
to $546 thousand for the prior year, an increase of $16 thousand or 2.9%. Increases in personnel and consulting costs were partially
offset by a decrease in stock-based compensation.

 Other
Income. Other Income was $40 thousand and $41 thousand for fiscal years 2025 and 2024 respectively, which reflects interest income
from the cash on deposit at our bank.

Tax Expense. We recorded income tax expense of $14 thousand in the fiscal year ended September 30, 2025, compared to $5
thousand for the year ended September 30, 2024. Our income tax expense is attributed to accruals for state income taxes in the various
jurisdictions where we have customers, employees, or property.

 Liquidity
and Capital Resources

 During
fiscal year 2025, we incurred a net loss of $878 thousand, and we had $130 thousand of cash used by operations. Our primary source of
liquidity and capital resources was the $1.3 million of cash, cash equivalents, and short-term investments at the beginning of fiscal
year 2025. We had an accumulated deficit of $20.7 million as of September 30, 2025.

 The
following table summarizes, for the periods indicated, selected items in our Statements of Cash Flows:

 2025

 2024

 Net cash provided by (used in):

 Operating activities

 $
 (130
)

 $

 Investing activities

 (265
)

 Financing activities

 -

 (50
)

 Total
 cash provided by (used)

 $

 $
 (8
)

Activities. Net cash used by operations for the year ended September 30, 2025, was $130 thousand compared to $307 thousand provided
by operations for the year ended September 30, 2024. During fiscal year 2025, we recorded net, non-cash charges of $498 thousand for
depreciation, amortization and stock-based compensation expense. Our net accounts receivable decreased by $179 thousand due to earlier
payment of invoices by our clients as well as a decrease in revenue. We also experienced a $286 thousand increase in deferred revenue
because of higher payments from clients in advance of receiving software and services. These two sources of cash were partially offset by
a $214 thousand decrease in accounts payable and accrued liabilities.

 Investing
Activities. We purchased and sold short-term investments in the form of time deposits during fiscal year 2025, yielding a net
of $150 thousand provided by investing activities.

 Financing
Activities. We had zero ($0) cash provided by or used in financing activities during fiscal year 2025.

 As
of September 30, 2025, we had $1.2 million in cash, cash equivalents, and short-term investments; and our working capital was $0.8 million.
We believe that our existing cash balances are sufficient to fund our operations through at least December 31, 2026.

 We
expect to fund our operations
with our existing cash balance and any cash flow generated by operations. We intend to manage our business such that our expenses will allow us to sustain positive
cash flow from our operations, but we cannot assure this will occur. We don't currently have any credit facilities available to
us; however, we have had discussions with several lenders about establishing a line of credit secured by our accounts receivable.

Accounting Estimates

 The
preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of
America requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and
related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to
long-lived assets, goodwill, identifiable intangibles and deferred income tax assets and liabilities including their related valuation
allowances. We base our estimates on historical experience and on appropriate and customary assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Some of these accounting estimates and assumptions are particularly sensitive because
of their significance to our consolidated financial statements and because of the possibility that future events affecting them may differ
markedly from what had been assumed when the financial statements were prepared.

 Goodwill,
Intangible and Long-Lived Assets

 We
account for goodwill and intangible assets in accordance with Accounting Standards Codification ("ASC") Topic 350 (Intangibles-
Goodwill and Other). Finite-lived intangible assets are amortized over their estimated useful economic life and are carried at cost less
accumulated amortization. Goodwill is assessed for impairment at least annually in the fourth quarter, on a reporting unit basis, or
more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. As a part of the goodwill
impairment assessment, we have the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the
fair value of a reporting unit is less than its carrying amount. If, because of our qualitative assessment, we determine this is the
case, we are required to perform a goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill
impairment loss to be recognized. The test is discussed below. If, because of our qualitative assessment, we determine that it is more-likely-than-not
that the fair value of the reporting unit is greater than its carrying amounts, the goodwill impairment test is not required.

 The
quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares
the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying
amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value,
an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting
unit. The goodwill impairment assessment is based upon the income approach, which estimates the fair value of our reporting units based
upon a discounted cash flow approach. This fair value is then reconciled to our market capitalization at year end with an appropriate
control premium. The determination of the fair value of our reporting units requires management to make significant estimates and assumptions
including the selection of control premiums, discount rates, terminal growth rates, forecasts of revenue and expense growth rates, income
tax rates, changes in working capital, depreciation, amortization and capital expenditures. Changes in assumptions concerning future
financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit or the
amount of the goodwill impairment charge. Goodwill was $1.4 million at both September 30, 2025 and 2024. The fair value of the goodwill
at September 30, 2025, as determined by our impairment analysis, was more than the carrying value; thus, we had no impairment of goodwill
in fiscal year 2025.

 We
did not record indefinite-lived intangible assets in the fiscal years ended September 30, 2025 and 2024.

 Long-lived
assets, which consist of finite-lived intangible assets and property and equipment, are assessed for impairment whenever events or changes
in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these
assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded
value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. The cash flow estimates used to
determine the impairment, if any, contain management's best estimates using appropriate assumptions and projections at that time.
We have $17 thousand in property and equipment at September 30, 2025. At September 30, 2025 and 2024, finite-lived intangibles and long-lived
assets were zero ($0) and zero ($0), respectively.

 Off-Balance
Sheet Arrangements

 We
did not have during the periods presented, nor do we currently have, any off-balance sheet arrangements as defined under applicable SEC
rules.

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 The
Company is not required to provide the information required by this Item as it is a "smaller reporting company," as defined
in Rule 229.10(f)(1) of Regulation S-K promulgated by the SEC.

 ITEM
8. FINANCIAL STATEMENTS

INC.

 TABLE
 OF CONTENTS

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 587)

 Financial
 Statements:

 Balance Sheets as of September 30, 2025 and 2024

 Statements of Operations for the years ended September 30, 2025 and 2024

 Statements of Stockholders' Equity for the years ended September 30,
2025 and 2024

 Statements of Cash Flows for the years ended September 30, 2025 and 2024

 Notes to Financial Statements

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Board of Directors and

 Stockholders
of SideChannel, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of SideChannel, Inc., (the Company) as of September 30, 2025 and 2024, and
the related consolidated statements of operations, stockholders' equity, and cash flows for each of the
years in the two-year period ended September 30, 2025, and the related notes (collectively referred to as the consolidated financial
statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year
period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

Audit Matters

 The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We determined
that there are no critical audit matters.

 /s/
 RBSM LLP

 We have
 served as the Company's auditor since 2021.

 Houston, Texas

 December
18, 2025

 RBSM
 LLP (PCAOB ID Number 587)

INC.

 CONSOLIDATED
BALANCE SHEETS

 (In
thousands, except share and per share data)

 September
 30, 2025

 September
 30, 2024

 ASSETS

 Current assets

 Cash and cash
 equivalents

 $
 1,065

 $
 1,045

 Short-term investments

 Accounts receivable, net

 Deferred costs

 -

 Prepaid
 expenses and other current assets

 Total current assets

 2,092

 2,562

 Fixed assets

 Goodwill

 1,356

 1,356

 Total
 assets

 $
 3,465

 $
 3,951

 LIABILITIES & STOCKHOLDERS'
 EQUITY

 Current liabilities

 Accounts payable and accrued
 liabilities

 $

 $

 Deferred revenue

 taxes payable

 Total current liabilities

 1,322

 1,247

 Total liabilities

 1,322

 1,247

 Commitments and contingencies (Note 14)

 -

 -

 Common stock, $ 0.001 par value, 681,000,000 shares authorized; 231,229,054 and 225,975,331 shares issued and outstanding as of September 30, 2025, and September 30,
 2024, respectively

 Additional paid-in capital

 22,647

 22,321

 Accumulated deficit

 ( 20,735
)

 ( 19,843
)

 Total
 stockholders' equity

 2,143

 2,704

 Total
 liabilities and stockholders' equity

 $
 3,465

 $
 3,951

 The
accompanying notes are an integral part of these audited consolidated financial statements.

INC.

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 (In
thousands, except share and per share data)

 2025

 2024

 Twelve
 Months Ended

 September
 30,

 2025

 2024

 Revenues

 $
 7,351

 $
 7,400

 Cost of revenues

 3,847

 3,868

 Gross profit

 3,504

 3,532

 Operating expenses

 General
 and administrative

 2,894

 3,155

 Selling
 and marketing

 and development

 Total
 operating expenses

 4,422

 4,472

 Operating loss

 ( 918
)

 ( 940
)

 Other
 income, net

 Net loss before income tax
 expense

 ( 878
)

 ( 899
)

 tax expense

 Net
 loss after income tax expense

 $
 ( 892
)

 $
 ( 904
)

 Net
 loss per common share – basic and diluted

 $
 ( 0.00
)

 $
 ( 0.00
)

 Weighted average common shares
 outstanding – basic and diluted

 229,097,973

 222,078,462

 The
accompanying notes are an integral part of these audited consolidated financial statements.

INC.

 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY

 FOR
THE TWELVE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

 (In
thousands, except share data)

 Par
 Value

 APIC

 Accumulated

 Deficit

 Total

 Equity

 at September 30, 2023

 213,854,781

 21,755

 ( 18,939
)

 3,030

 issued for 2023 Warrant Exchange

 7,270,958

 ( 7
)

 -

 -

 issued for legal settlement

 -

 issued for services

 437,643

 -

 -

 Stock-based
 compensation

 4,411,949

 -

 Net
 loss

 -

 -

 -

 ( 904
)

 ( 904
)

 at September 30, 2024

 225,975,331

 22,321

 ( 19,843
)

 2,704

 225,975,331

 22,321

 ( 19,843
)

 2,704

 issued for legal settlement

 356,400

 ( 1
)

 ( 1
)

 Stock-based
 compensation

 4,897,323

 -

 Net
 loss

 -

 -

 -

 ( 892
)

 ( 892
)

 at September 30, 2025

 231,229,054

 22,647

 ( 20,735
)

 2,143

 231,229,054

 22,647

 ( 20,735
)

 2,143

 The
accompanying notes are an integral part of these audited consolidated financial statements.

INC.

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 (In
thousands)

 2025

 2024

 Twelve Months Ended

 2025

 2024

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net loss

 $
 ( 892
)

 $
 ( 904
)

 Adjustments to reconcile net loss to net cash flows provided by / (used in) operating activities:

 Depreciation

 Amortization

 Legal settlement paid in stock

 ( 1
)

 Stock-based compensation and payments for services, net

 Changes in operating assets and liabilities:

 Accounts receivable, net

 Prepaid expenses and other assets

 ( 4
)

 Accounts payable and accrued liabilities

 ( 214
)

 Income taxes payable

 ( 8
)

 Deferred revenue

 Net cash provided by / (used in) operating activities

 ( 130
)

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Net sale (purchase) of short-term investments

 ( 250
)

 Purchase of fixed assets

 -

 ( 15
)

 Net cash provided by / (used in) investing activities

 ( 265
)

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Payment of note payable

 -

 ( 50
)

 Net cash used in financing activities

 -

 ( 50
)

 INCREASE / (DECREASE) IN CASH

 ( 8
)

 CASH, BEGINNING OF PERIOD

 1,045

 1,053

 CASH, END OF PERIOD

 $
 1,065

 $
 1,045

 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 Shares Issued for Services

 $
 -

 $

 Purchase of RSUs sold by employees to pay for taxes due on vested RSUs

 The
accompanying notes are an integral part of these audited consolidated financial statements.

INC.

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 FOR
THE YEARS ENDED SEPTEMBER 30, 2025 AND 2024

 (Amounts
shown in thousands, except shares and per share amounts)

 NOTE
1 – DESCRIPTION OF BUSINESS

 Our
mission is to make cybersecurity simple and accessible for mid-market and emerging companies, a market that we believe is currently underserved.
We believe that our cybersecurity product and service offerings provide cybersecurity and privacy risk management solutions for our customers.
We anticipate that our target customers will continue to need cost-effective security solutions. We continue to expand our catalogue
of services and solutions to address the cybersecurity needs of our customers, including virtual Chief Information Security Officer ("vCISO"),
cyber program strategy, zero trust, third-party risk management, compliance readiness, cloud security and architecture services, privacy,
threat intelligence, managed end-point security solutions, and cybersecurity awareness.

 We
are marketing and selling Enclave, a proprietary software product that simplifies important cybersecurity tasks to achieve "microsegmentation."
By combining zero trust network access with certificate management and machine identity, Enclave seamlessly creates a unified security
architecture that eliminates traditional network vulnerabilities. This integration enables IT teams to enforce precise access policies
based on verified machine identities. Certificate-based identities allow a simplified management for any certificate-based communication,
while the zero trust framework continuously validates every connection attempt. This powerful combination delivers robust security without
the typical management overhead, allowing organizations to implement sophisticated microsegmentation strategies with remarkable simplicity
and minimal resource requirements.

 Our
headquarters are located at 146 Main Street, Suite 405, Worcester, MA, 01608. Our website is www.sidechannel.com.

 NOTE
2 – GOING CONCERN ASSESSMENT

 We
are required to perform a going concern assessment for the annual reporting period. The assessment uses a two-step process to evaluate
whether there are conditions and/or events that raise substantial doubt about our ability to continue as a going concern within one year
after the date on which the annual financial statements are issued.

 The
two steps are to:

 1.

 Determine
 if "substantial doubt" is raised regarding the entity's ability to continue as a going concern. If it is not raised,
 the assessment stops there. However, if substantial doubt is raised, management would proceed to the next assessment step.

 2.

 Determine
 if the substantial doubt continues to exist after considering any plan to address and mitigate the doubt. However, regardless of
 whether such a plan alleviates the initial doubt, the guidance will require some level of disclosure in the financial statements.

 Substantial
doubt exists when it is probable (within one year after the date on which the financial statements are issued) that the Company will
be unable to meet its obligations as they become due. Probable is used consistently with its use in ASC 450, Contingencies (the future
event or events are likely to occur, which is a higher threshold than "more likely than not" but lower than "virtually
certain").

 This assessment
is through December 31, 2026, because our fiscal year 2025 financial statements were issued during December 2025. For the year ended
September 30, 2025, we reported a net loss of $ 892 thousand, which includes $ 498 thousand of non-cash expenses for depreciation, amortization,
and stock-based compensation. Our operating activities used $ 130 thousand in cash for the year ended September 30, 2025, and
our cash balance increased by $ 20 thousand after gaining $ 150 thousand of cash for investing and financing activities. We
may incur continued net losses until we generate revenues more than our expenses; however, we intend to increase revenue or decrease expenses such that
our current cash balance and net cash provided by operations will allow us to sustainably fund our business. We cannot be certain that
this will be achieved. We don't currently have any credit facilities available to us.

 We
have determined that substantial doubt does not exist about our ability to continue as a going concern through December 31, 2026.

 NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis
of Presentation and Use of Estimates

 The
accompanying consolidated financial statements include our accounts and those of our wholly owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated upon consolidation. The preparation of financial statements in conformity with U.S. GAAP
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates. Certain of our accounts, including goodwill, identifiable intangibles, and
deferred tax assets and liabilities, including related valuation allowances, are based upon estimates. References to fiscal year 2025
and fiscal year 2024 used throughout this report shall mean the current fiscal year ending September 30, 2025, and the prior fiscal year
ended September 30, 2024, respectively.

 Reclassifications

 Certain
prior year amounts have been reclassified to be comparable with the current year's presentation or adjusted due to rounding and
have had no impact on net income or stockholders' equity.

 Segment

 The Company operates as a single reportable segment focused on cybersecurity
solutions, which consists of two primary revenue-generating categories: 1) vCISO Services and 2) Cybersecurity Software and Services.

 vCISO
 Services: This category captures the revenue from the Chief Information Security Officer services that we provide to our clients
 on a "virtual" or outsourced basis. Embedded into the C-suite executive teams of our clients, our vCISOs deliver services
 including assessing the cybersecurity risk profile, implementing policies and programs to mitigate risks, and managing the day-to-day
 tasks to ensure compliance with the adopted cybersecurity framework. Most of our clients use our vCISO services. Engagements typically
 include a fixed monthly subscription fee and exceed 12 months because of renewal options of 1, 3, 6, or 12 months.

 Cybersecurity
 Software and Services: This category encompasses an array of cybersecurity software and services that our clients deem necessary
 to protect their digital assets, including Enclave. These augment our vCISO offering and include a full range of other cybersecurity
 products and services delivered through a team of security engineers along with a network of third-party service providers and VARs.
 Commercial relationships with third-party service providers and VARs provide SideChannel with additional internal capabilities to
 mitigate cybersecurity risks. We earn licensing revenue from software contracts and commissions from third-party service provider
 partnerships which are included in this revenue category.

 Our
Chief Executive Officer is our Chief Operating Decision Maker ("CODM"). Revenue is the primary segment performance measure
reviewed by the CODM for operational and capital allocation decisions.

 The
following table presents revenue reviewed by the CODM for the twelve months ended September 30, 2025 and 2024:

OF DISAGGREGATED REVENUE

 2025

 2024

 Twelve Months Ended

 2025

 2024

 vCISO services

 $
 4,083

 $
 4,798

 Cybersecurity software and services

 3,268

 2,602

 Total

 $
 7,351

 $
 7,400

 Business
Combinations

 Acquired
businesses are accounted for using the purchase method of accounting, which requires that the purchase price be allocated to the net
assets acquired at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired
is recorded as goodwill. Fair values of intangible assets are estimated by valuation models prepared by our management and third-party
advisors. The assets purchased and liabilities assumed have been reflected in our consolidated balance sheets, and the operating results
are included in the consolidated statements of operations and consolidated statements of cash flows from the date of acquisition. Any
change in the fair value of acquisition-related contingent consideration after the acquisition date, including changes from events after
the acquisition date, will be recognized in the consolidated statement of operations in the period of the estimated fair value change.
Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition,
are recognized separately from the acquisition and expensed as incurred in general and administrative expense in the consolidated statements
of operations.

 Cash,
Cash Equivalents, and Short-Term Investments

 Cash
includes funds deposited in banks.

 We
consider all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Highly liquid investments
with original maturities of 91 days or more that will mature less than one year from the balance sheet date are classified as short-term
investments. Securities with maturities of more than 360 days, if any, are included in "long-term investments."

 Our
cash equivalents and short-term investments are placed primarily in money market funds and time deposits and are classified as held-to-maturity
based on our positive intent and ability to hold the securities to maturity. We value cash equivalents at their original purchase prices
plus interest that has accrued at the stated rate. We value short-term investments at their original purchase prices. Interest earned
on short-term investments is accrued in interest receivable which is included on our balance sheet in "Accounts receivable, net."

 Interest
income related to cash equivalents and short-term investments is reported in "Other income, net" on the Consolidated Statement
of Operations.

 Accounts
Receivable

 Trade
accounts receivable are recorded at the invoiced amounts and do not bear interest. We grant credit to customers and generally require
no collateral. To minimize our risk, we perform ongoing credit evaluations of our customers' financial condition. Effective January
1, 2023, we follow the guidance in Accounting Standards Codification ("ASC") Topic 326 (Financial Instruments
– Credit Losses) in developing our estimate of the allowance for credit losses related to our accounts receivable. The allowance
for credit losses is our best estimate of the amount of expected credit losses in our existing accounts receivable. In establishing the
amount of allowance for credit losses, we consider all information available as of the reporting date including information related to
past events, such as historical loss rates and actual incurred losses, as well as current conditions that may indicate future risk of
loss and any other factors of which we are aware, that we believe could impact the ultimate collectability of the related receivables
in future periods.

 Account
balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. We do not have any significant off-balance sheet credit exposure related to our customers. Cash flows from accounts receivable
are recorded in operating cash flows.

 For
the year ended September 30, 2025, there was no change in the amount of the allowance for credit losses. There was no bad debt
expense recorded for the years ended September 30, 2025 and 2024.

 Fair
Value of Financial Instruments

 Our
financial instruments consisted primarily of cash and cash equivalents, short-term investments, accounts receivable, accounts payable
and accrued expenses. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the
short-term maturities and approximate market interest rates of these instruments.

 Fair
value is focused on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Within the measurement of fair value, the use of market-based information is prioritized
over entity specific information and a three-level hierarchy for fair value measurements is used based on the nature of inputs used in
the valuation of an asset or liability as of the measurement date.

 The
three-level hierarchy for fair value measurements is defined as follows:

 Level
 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

 Level
 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs
 that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets
 that are not considered to be active;

 Level
 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 For
more information about the Company's accounting policies surrounding fair value investments, see Note 7.

 Goodwill,
Intangible, and Long-Lived Assets

 We
account for goodwill and intangible assets in accordance with ASC Topic 350 (Intangibles – Goodwill and Other). Finite-lived intangible
assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed
for impairment annually during the fourth quarter on a reporting unit basis, or more frequently when events and circumstances occur indicating
that the recorded goodwill may be impaired. Goodwill is impaired if the fair value of a reporting unit is less than its carrying amount.
As a part of the goodwill impairment assessment, we have the option to perform a qualitative assessment to determine whether it is more-likely-than-not
that the fair value of a reporting unit is less than its carrying amount. If, because of our qualitative assessment, we determine that
it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amount, a quantitative goodwill impairment
test is not required. However, if, as a result of our qualitative assessment, we determine it is more-likely-than-not that the fair value
of a reporting unit is less than its carrying amount, or, if we choose not to perform a qualitative assessment, we are required to perform
a quantitative goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss
to be recognized.

 The
quantitative goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the
fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying
amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to
the total amount of goodwill allocated to that reporting unit. The goodwill impairment assessment is based upon the income approach,
which estimates the fair value of our reporting units based upon a discounted cash flow approach. This fair value is then reconciled
to our market capitalization at year end with an appropriate control premium. The determination of the fair value of our reporting units
requires management to make significant estimates and assumptions including the selection of control premiums, discount rates, terminal
growth rates, forecasts of revenue and expense growth rates, income tax rates, changes in working capital, depreciation, amortization,
and capital expenditures. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant
impact on either the fair value of the reporting unit or the amount of the goodwill impairment charge. The goodwill was evaluated at
the balance sheet date of September 30, 2025. For fiscal years 2025 and 2024, we recorded no impairment of goodwill.

 None
of the goodwill associated with business combinations is deductible for income tax purposes.

 We
did not record indefinite-lived intangible assets in the fiscal years ended September 30, 2025 and 2024.

 Long-lived
assets, which consist of finite-lived intangible assets and property and equipment, are assessed for impairment whenever events or changes
in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these
assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded
value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. The cash flow estimates used to
determine the impairment, if any, contain management's best estimates using appropriate assumptions and projections at that time.

 Revenue
Recognition

 We
recognize revenue in accordance with the guidance in ASC Topic 606 (Revenue from Contracts with Customers).

 Nature
of Products and Services

 We
identify, develop, and deploy cybersecurity and privacy risk management solutions for our clients in North America. We categorize our
products and services as either vCISO Services or Cybersecurity Software and Services. The revenue earned from Enclave, our proprietary
software product, as well as the revenue from reselling third-party software and services are included in Cybersecurity Software and
Services.

 Performance
Obligations

 A
performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting
in Topic 606. A significant portion of our revenue is from clients with whom we have a Master Service Agreement ("MSA").
Each MSA generally contains one or more Statement(s) of Work ("SOW"). Each SOW specifies the products and services and their
respective transaction prices. We refer to an MSA and its SOW(s) as a "Contract". Our Contracts generally contain monthly
service subscriptions, annual software licenses, time and material based billing, or fixed fee projects.

 A
Contract's transaction price is allocated to each distinct performance obligation. For Contracts with multiple performance obligations,
we allocate the Contract's transaction price to each performance obligation based on the relative standalone selling price.

 Revenue
is recognized over a period of time for monthly service subscriptions and software licenses. Revenue is recognized at a point in
time when, or as, the performance obligation is satisfied for fixed fee projects and time and material based billing. The completed
work products we create for our clients do not have alternative uses to SideChannel and our Contracts created a right to payment for
work completed. Each of the fixed fee project performance obligations we delivered in fiscal year 2025 were accompanied by an
upfront payment. Our determination for point in time revenue recognition is based upon client acceptance of the performance
obligation.

 We
do not have any material variable consideration arrangements, client-specific acceptance criteria, or any material payment terms with
our clients other than standard payment terms which generally range from net 15 to net 30 days.

 Principal
vs Agent

 We
resell the software and services provided by third parties. When we have discretion over the pricing used in the Contracts with our
clients then we deem ourselves to be the principal for purposes of revenue recognition and record revenue on a gross basis using the
price specified in the Contract. This is the case for almost all the third-party software and services we sell. Also consistent in
our determinations to recognize revenue as the principal is our ability to direct the third party to provide the service to the
client on our behalf.

 Occasionally,
we receive a commission from the sale of third-party software and services in which case we are an agent and record revenue on a net
basis equal to the amount of the commission earned.

 Contract
Balances

 We
record accounts receivable at the time of invoicing. To the extent that we do not recognize revenue at the same time as we invoice, we
record a liability for deferred revenue. In certain instances, we also receive customer deposits in advance of invoicing and recording
of accounts receivable. Deferred revenue and customer deposits are included in current liabilities on our consolidated balance sheets.
In these instances, the recognition of revenue is deferred until we have determined that we have satisfied our performance obligations
under the Contract.

 Costs
to Obtain a Contract with a Customer

 The
costs we incur associated with obtaining contracts with customers are marketing costs incurred with third-party service providers and
sales commissions that we pay to our employees, contractors, or third-party sales representatives. Commissions are calculated based on
set percentages of the revenue value of each product or service sold. Commissions are considered earned by our internal sales personnel
at the time we recognize revenue for a particular transaction. Commissions are considered earned by third-party sales representatives
at the time that revenue is recognized for a particular transaction. We record commission expense in our consolidated statements of operations
at the time the commission is earned. Commissions earned but not yet paid are included in current liabilities on our balance sheets.

 Leases

 We
account for leases in accordance with ASC Topic 842 (Leases). We determine if an arrangement is a lease at inception. A lease contract
is within scope if the contract has an identified asset (property, plant, or equipment) and grants the lessee the right to control the
use of the asset during the lease term. The identified asset may be either explicitly or implicitly specified in the contract. In addition,
the supplier must not have any practical ability to substitute a different asset and would not economically benefit from doing so for
the lease contract to be in scope. The lessee's right to control the use of the asset during the term of the lease must include
the ability to obtain substantially all the economic benefits from the use of the asset as well as decision-making authority over how
the asset will be used. Leases are classified as either operating leases or finance leases based on the guidance in ASC Topic 842. Operating
leases are included in operating lease ROU assets and operating lease liabilities in our consolidated balance sheets. Finance leases
are included in property and equipment and financing lease liabilities. We do not currently have any financing leases.

lease payments are included in cash outflows from operating activities on our consolidated statements of cash flows.

 We
have made an accounting policy election not to apply the recognition requirements of ASC Topic 842 to short-term leases (leases with
a term of one year or less at the commencement date of the lease). Our lease periods are less than one-year in duration. Lease expense
for short-term lease payments is recognized on a straight-line basis over the lease term.

 Following
the guidance of ASC Topic 842, we are not required to record ROU assets and operating lease liabilities.

 See
Note 6 for further disclosures regarding our leases.

and Development and Software Development Expenses

 All
research and development costs, including patent and software development costs, are expensed as incurred.

 Stock-Based
Compensation

 We
account for stock-based compensation in accordance with ASC Topic 718 (Compensation – Stock Compensation) which requires that employee
share-based equity awards be accounted for under the fair value method and requires the use of an option pricing model for estimating
fair value of awards, which is then amortized to expense over the service periods. The Company estimates the fair value of share-based
payment awards on the date of grant using an option-pricing mode or the fair value of our stock on the grant date. The value of the portion
of the award that is ultimately expected to vest is recognized as stock compensation expense over the requisite service period in the
Company's consolidated statements of income.

 As
stock compensation expense recognized in the accompanying consolidated statements of income is based on awards ultimately expected to
vest. Accounting guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods
if actual forfeitures differ from those estimates. The Company has limited historical experience with forfeitures and were based on management's
estimates.

 Excess
tax benefits or deficiencies from stock compensation are recognized in the income tax provision and are not estimated in the effective
tax rate. Rather, they are recorded as discrete tax items in the period they occur. Excess income tax benefits from stock compensation
arrangements are classified as a cash flow from operations.

 See
further disclosures related to our stock-based compensation plans in Note 13.

 Legal

 We
are subject to legal proceedings, claims, and liabilities which arise in the ordinary course of business, and we accrue for losses associated
with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information
becomes available or circumstances change. Legal fees are charged to general and administrative expenses as they are incurred.

Taxes

 We
utilize the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized
for operating loss and tax credit carryforwards and for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations
in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets
unless it is more likely than not that the value of such assets will be realized.

 We
use the two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition
by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit,
including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest
amount, which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating
our tax positions and tax benefits, which may require periodic adjustments. We did no t record any liabilities for uncertain tax positions
during the years ended September 30, 2025 or 2024.

 Net
Loss Per Common Share

 Basic
loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding
during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding. Diluted earnings per share reflects the potential dilution that could occur if
stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of
common stock that could share in our earnings. Diluted loss per share is the same as basic loss per share during periods where net losses
are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss.

 Warrants

 We
evaluate warrants in accordance with ASC Topics 480 (Distinguishing Liabilities from Equity) and 815 (Derivatives and Hedging). The result
of this accounting treatment is that the fair value of the embedded derivative, if required to be bifurcated, is marked-to-market at
each balance sheet date and recorded as a liability. The change in fair value is recorded in the Statement of Operations as a component
of other income or expense. Upon exercise of a warrant, it is marked to fair value at the exercise date and then that fair value is reclassified
to equity.

 Recent
Accounting Announcements

 The
Financial Accounting Standards Board ("FASB") issues Accounting Standards Updates ("ASU") to amend the authoritative
literature in the ASC. There have been several ASUs to date that amend the original text of the ASCs. Other than those discussed below,
we believe those ASUs issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable
to us, or (iv) are not expected to have a significant impact on us.

 Accounting
Pronouncements Adopted

 In
November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures," which provides guidance to improve reportable segment disclosure requirements, primarily through enhanced
disclosures about significant segment expenses. In addition, the guidance enhances interim disclosure requirements, clarifies
circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure
requirements for entities with a single reportable segment, and contains other disclosure requirements. The purpose of the guidance
is to enable investors to better understand an entity's overall performance and assess potential future cash flows. The
guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after
December 15, 2024. For us, annual reporting requirements were effective for our fiscal year 2025 beginning on October 1, 2024, and
interim reporting requirements will be effective beginning with our first quarter of fiscal year 2026. We manage our operations as a
single operating segment for the purpose of assessing performance and making operating decisions. Our Chief Executive Officer is our
CODM. No changes have been made to the presentation of our financial statements because of this
pronouncement.

 We
did not adopt additional new accounting pronouncements during the year ended September 30, 2025.

 Accounting
Pronouncements Not Yet Adopted

 In
December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which updates
income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation
table and disaggregation of income taxes paid, net of refunds, by jurisdiction. All entities are required to apply the guidance prospectively,
with the option to apply it retrospectively. The guidance is effective for fiscal years beginning after December 15, 2024, which for
us is our fiscal year 2026 beginning on October 1, 2025. Early adoption is permitted.

 The
Company does not believe that the above recently issued, but not yet effective accounting standards, when adopted, will have a material
effect on the accompanying consolidated financial statements.

 In
March 2024, the Securities and Exchange Commission issued a rule which will require companies to make certain climate-related disclosures
in periodic filings. The rule includes certain disclosures in the footnotes of the financial statements:

capitalized costs, expenditures expensed, and losses incurred because of severe weather events and other natural conditions, such as
hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise;

capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates if they are
used as a material component of a registrant's plans to achieve its disclosed climate-related targets or goals; and

whether estimates and assumptions used to produce the financial statements were materially impacted by risks and uncertainties associated
with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans.

 The
footnote disclosures are effective for annual filings for the year ended September 30, 2026. The Company is currently evaluating the
impact of the adoption of the rule.

 NOTE
4 – CASH EQUIVALENTS AND INVESTMENTS

 We
have financial instruments included as cash equivalents and short-term investments on our balance sheets. Money market funds and time
deposits with maturities of less than 90 days from the purchase date are included in "Cash and cash equivalents." Time deposits
with maturities from 91-360 days are included in "Short-term investments." As of September 30, 2025 and 2024, the Company
had no long-term investments.

 The
following table presents the carrying amounts of cash equivalents and short-term investments as of September 30, 2025 and 2024:

 SCHEDULE OF CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

 2025

 2024

 Cash equivalents

 Money market funds

 $
 -

 $

 Total cash equivalents

 $
 -

 $

 Short-term investments

 Time deposits

 Total short-term investments

 $

 $

 For
more information about the fair value of the Company's financial instruments, see Note 7.

 NOTE
5 – DEFERRED COSTS

 On
July 23, 2021, we entered into a financial advisory and consulting agreement with Paulson Investment Company, LLC
("Paulson"). Pursuant to the agreement, Paulson will provide the following services at the Company's request: (a)
familiarize itself with the Company's business, assets, and financial condition; (b) assist the Company in developing
strategic and financial objectives; (c) assist the Company in increasing its exposure in the software industry; (d) assist the
Company in increasing its profile in the investment and financial community through introductions to analysts and potential
investors, participation in investment conferences and exploitation of reasonably available media opportunities; (e) identify
potentially attractive merger and acquisition opportunities; (f) review possible innovative financing opportunities and (g) render
other financial advisory services as may be reasonably requested. The term of the agreement is four years from the date of the
agreement, unless terminated earlier by either party as provided therein. As compensation for these services, the Company issued to
Paulson 4
million shares of the Company's common stock and agreed to reimburse Paulson for all reasonable and documented expenses
incurred by Paulson in connection with providing such services. The fair value of the shares issued was $ 720
thousand which the Company recognized as deferred costs, which were amortized at a rate of $ 15
thousand per month through July 2025. The Company expensed $ 150
thousand and $ 180
thousand in fiscal years ended September 30, 2025, and 2024, respectively. The unamortized balance of the deferred costs was zero
($ 0)
at September 30, 2025.

 NOTE
6 - LEASES

 On
December 10, 2021, we entered into a lease for approximately 500 square
feet of office space at 146 Main Street in Worcester, Massachusetts, with the option
to renew annually. The annual renewal date is January 1 st. Our
current lease payment is $ 986
per month. The lease allows for a two percent ( 2 %)
increase effective at the beginning of each renewal period. We anticipate the lease payment to be $1,006 per month during calendar year 2026.

lease payments are included in cash outflows from operating activities on our consolidated statements of cash flows.

lease expenses were $ 12 thousand and $ 12 thousand for the fiscal years ended September 30, 2025 and 2024, respectively.

 We
have made an accounting policy election not to apply the recognition requirements of ASC Topic 842 (Leases) to short-term leases (leases
with a term of one year or less at the commencement date of the lease). Lease expense for short-term lease payments is recognized on
a straight-line basis over the lease term. We do not have any long-term operating leases or financing leases as of September 30, 2025.

 We
expect to pay approximately $ 12 thousand over the next twelve (12) months for the Worcester lease.

 NOTE
7 – FAIR VALUE MEASUREMENT

 ASC
Topic 820 "Fair Value Measurement" ("Topic 820") defines fair value, establishes a market-based framework or
hierarchy for measuring fair value, and expands disclosures about fair value measurements. Topic 820 is applicable whenever assets and
liabilities are measured and included in the financial statements at fair value.

 The
following tables present the carrying amounts, estimated fair values, and valuation input levels of certain financial instruments as
of September 30, 2025 and 2024.

OF FAIR VALUE OF FINANCIAL INSTRUMENTS

 Amount

 Level 1

 Level 2

 Level 3

 Value

 September 30, 2025

 Carrying

 Fair Value Measured Using

 Fair

 Amount

 Level 1

 Level 2

 Level 3

 Value

 Short-term investments

 Time deposits: 91 - 360 days

 $

 $
 -

 $

 $
 -

 $

 Total Short-term investments

 $

 $
 -

 $

 $
 -

 $

 Amount

 Level 1

 Level 2

 Level 3

 Value

 September 30, 2024

 Carrying

 Fair Value Measured Using

 Fair

 Amount

 Level 1

 Level 2

 Level 3

 Value

 Short-term investments

 Time deposits: 91 - 360 days

 $

 $
 -

 $

 $
 -

 $

 Total Short-term investments

 $

 $
 -

 $

 $
 -

 $

 The
entire September 30, 2025, balance of time deposits maturing in 91 to 360 days are certificates of deposit issued by a bank at which
total deposits are less than the FDIC limit of $ 250 thousand.

 NOTE
8 – DEBT

 SideChannel
did not have debt at September 30, 2025.

 NOTE
9 – STOCKHOLDERS' EQUITY

Stock

 As
of September 30, 2025 and 2024, we had 231,229,054 and 225,975,331 shares of common stock outstanding, respectively, and were authorized
to issue 681,000,000 shares of common stock at a par value of $ 0.001.

Stock Issued for Cash

 No common shares were issued for cash in fiscal year 2025 or fiscal
year 2024.

Stock Issued for Business Combinations

 No shares were issued for business combinations in fiscal year
2025 or fiscal year 2024.

Stock Issued for Services

 No shares were issued for services in fiscal year 2025.

 Until
March 31, 2024, our Board of Directors elected to have each of its members receive one-half of such member's quarterly compensation
in the form of shares of the Company's common stock instead of cash. We also use stock as a form of compensation for independent
contractors who provide professional services to us in sales, marketing, or administration. During fiscal year 2024, the fair market
value of stock issued for services totaled $ 20 thousand for 437,643 shares of common stock.

Stock Issued Under Equity Incentive Plan

 We
issued 4,897,323 shares of common stock for 6,398,717 restricted stock units ("RSUs") that vested during
the year ended September 30, 2025. The number of RSUs sold by these employees to fund payroll taxes for the year September 30, 2025,
was 1,501,394.

 We
issued 4,411,949 shares of common stock for 6,537,045 restricted stock units ("RSUs") that vested during the year ended September
30, 2024. The number of RSUs sold by these employees to fund payroll taxes for the year September 30, 2024, was 2,125,096.

Stock Issued for Legal Settlement

 We
issued 356,400 shares of common stock in fiscal year 2025 related to a legal
settlement and no shares were issued in fiscal year 2024 related to legal settlements.

Stock Issued for Tender Offer

 No
stock was issued for tender offers in fiscal year 2025.

 On
August 22, 2023, the Company commenced a Tender Offer for the 69,281,020 Warrants subject to our Offer to Exchange. A new Tender Offer
("Offer to Exchange") was filed on November 7, 2023.

 We
closed the November 7 Offer to Exchange on December 26, 2023, resulting in the issuance of 7,270,958
shares of common stock and 17,415,437
new warrants in exchange for 43,538,501 2021 Private Placement Warrants tendered ("2023 Warrant Exchange").

 Preferred
Stock

 As
of September 30, 2025 and 2024, we had zero ( 0)
shares of preferred stock outstanding.

 Warrants

 We
have four categories of warrants outstanding which are summarized below along with exercise prices and expiration dates.

OF WARRANT OUTSTANDING

 (In thousands, except prices and lives)

 Number of Warrants

 Exercise Price

 Expiration Date

 2018 Placement Agent

 5,399

 $
 1.00

 Aug 7, 2028

 2021 Private Placement

 12,011

 0.36

 Apr 16, 2026

 2021 Placement Agent

 8,333

 0.18

 Apr 16, 2031

 2023 Warrant Exchange

 17,415

 0.18

 Dec 29, 2028

 Total Outstanding Warrants

 43,158

 We
did not have any warrant activity during fiscal year 2025.

 Warrant
activity for years ended September 30, 2025 and 2024, is as follows:

 SCHEDULE OF WARRANT ACTIVITY

 (In thousands, except prices and lives)

 Number of

 Warrants

 Weighted

 Average

 Exercise
 Price

 Weighted

 Average

 Remaining
 Life

 at September 30, 2023

 69,281

 $
 0.39

 3.31

 in 2023 Warrant Exchange

 17,415

 0.18

 4.25

 Tendered
 in 2023 Warrant Exchange

 ( 43,538
)

 ( 0.36
)

 ( 2.25
)

 Exercised

 —

 —

 —

 Canceled/Forfeited

 —

 —

 —

 Outstanding at September 30, 2024

 43,158

 $
 0.33

 3.89

 —

 —

 —

 Exercised

 —

 —

 —

 Canceled/Forfeited

 —

 —

 —

 Outstanding at September 30, 2025

 43,158

 $
 0.33

 2.89

 NOTE
10 – REVENUE FROM CONTRACTS WITH CLIENTS

 Deferred
revenue is comprised of payments received from our clients and customers for products or services in advance of receiving the product
or service and primarily occurs for annual software and service contracts including Enclave. The deferred revenue is expected to be earned
within 12 months of the balance sheet date.

OF CHANGES IN DEFERRED REVENUE

 Balance at September 30,
 2023

 $

 Deferral
 of revenue

 1,258

 Recognition
 of revenue

 ( 1,023
)

 Balance at
 September 30, 2024

 $

 Deferral
 of revenue

 1,776

 Recognition
 of revenue

 ( 1,490
)

 at September 30, 2025

 $

 NOTE
11 – BUSINESS RISK AND CREDIT RISK CONCENTRATION INVOLVING CASH

 No
client individually accounted for over 10 % of our revenue during the years ended September 30, 2025, or 2024.

 We
had two clients each with an accounts receivable balance that exceeded 10 %
of accounts receivable at September 30, 2025.

 We
maintain our cash, cash equivalents, and short-term investments in accounts held by highly reputable financial institutions (collectively
"Deposits"). The Federal Deposit Insurance Corporation ("FDIC") insures these Deposits up to $ 250 thousand per
financial institution. At times our balance at each institution may exceed the $ 250 thousand FDIC insured limit. As of September 30,
2025, we had insured Deposits totaling $ 424 thousand at three (3) distinct financial institutions leaving approximately $ 741 thousand of our Deposits uninsured.
We have not experienced any losses on Deposits.

 NOTE
12 – RELATED PARTY TRANSACTIONS

 Brian
Haugli, our Chief Executive Officer and our stockholder in the Company, is also a principal shareholder of RealCISO Inc. ("RealCISO").
In September 2020, SideChannel assigned to RealCISO Inc. certain contracts and intellectual property. We are a reseller of the RealCISO
software. We receive revenue from our customers for the use of RealCISO software and pays licensing fees to RealCISO for such use. For
fiscal years 2025, and 2024, SideChannel paid $ 75 thousand and $ 30 thousand to RealCISO for licenses, respectively.

 We
also invoiced $ 34 thousand and $ 122 thousand from RealCISO for software development services that we provided RealCISO during fiscal
years 2025 and 2024, respectively.

 On
October 13, 2023, the Association of the US Army ("AUSA") signed an agreement for a cybersecurity risk assessment for
approximately $ 24
thousand. On February 15, 2024, the President of AUSA, Retired U.S. Army General Robert Brown, joined our Board. On July 8, 2024,
AUSA signed an agreement for recurring vCISO Services which generated approximately $ 9 thousand of revenue in fiscal year 2024 and
$ 54
thousand of annual revenue in fiscal year 2025 for the Company before terminating in March 2025. SideChannel reserved booth space at
the AUSA Global Force Symposium held in March 2025 and paid $ 8
thousand to AUSA for this event.

 No
other related party transactions occurred during the years ending September 30, 2025, and September 30, 2024.

 NOTE
13 – STOCK-BASED COMPENSATION

 As
of September 30, 2025, we had 15.3 million unvested RSUs granted
under the 2021 Omnibus Equity Compensation Plan (the "2021 Equity Incentive Plan") approved by stockholders on September
13, 2021.

 The
stockholder approval of the 2021 Equity Incentive Plan included a reserve of 8.0 million shares for awards. The 2021 Equity Incentive
Plan also allows for an annual increase in the reserve up to an amount approximately equal to five percent ( 5 %) of the fully diluted
outstanding shares at the end of the prior calendar year. On June 29, 2022, the Board of Directors authorized an 8,186,106 increase in
the shares reserved for the 2021 Equity Incentive Plan. On February 15, 2024, the Board of Directors authorized an increase of 13,599,334
in the shares reserved for the 2021 Equity Incentive Plan. On February 3, 2025, the Board of Directors authorized an increase of 14,196,898
in the shares reserved for the 2021 Equity Incentive Plan. Awards granted under the 2021 Equity Incentive Plan in lieu of compensation
are exempt from counting against the reserve.

OF COMMON STOCK SHARES RESERVED FOR EQUITY GRANTS

 2021 Omnibus Equity Incentive Plan Reserve

 Initial Reserve at September 13, 2021

 8,000

 Non-exempt awards

 ( 36,280
)

 Forfeitures

 3,983

 Annual reserve increases

 35,982

 Reserve at September 30, 2025

 11,685

 Reserve percent of outstanding shares at September 30, 2025

 5.1
 %

 We
typically have granted RSUs and stock options with a 3 -year, service-based vesting period. Our unvested RSUs and stock options are accounted
for based on their grant date fair value. As of September 30, 2025, total compensation expense to be recognized in future periods was
$ 525 thousand. That cost is expected to be recognized over the remaining vesting period.

 Our
total stock-based compensation expense for the year ended September 30, 2025, was $ 395 thousand for the amortization of outstanding equity
compensation grants.

 Certain
employees opted to sell RSUs back to the Company at the fair market value on the vesting date to fund their portion of payroll taxes
due on the taxable income generated by the vested RSUs. For the year ended September 30, 2025, we purchased RSUs with a vesting date
value of $ 63
thousand. Our Statement of Stockholders Equity reflects the net increase of $ 332
thousand as of September 30, 2025, or $ 395
thousand of total stock-based compensation expense, less the $ 63
thousand of RSUs purchased. Forfeitures are recognized as they occur and result in an increase to our reserve,

 We
incurred stock-based compensation expense of $ 682 thousand for the year ended September 30, 2024, which is comprised of $ 20 thousand
for shares issued for services and $ 662 thousand for the amortization of outstanding equity compensation grants. For the year ended September
30, 2024, we purchased RSUs with a vesting date value of $ 119 thousand.

 Stock-based
compensation of $ 338 thousand, $ 15 thousand, and $ 42 thousand was included in general and administrative expense, selling and marketing
expense, and research and development expense respectively in our accompanying Consolidated Statements of Operations for the year ended
September 30, 2025.

 Restricted
Stock Units

 We
record compensation expense for RSUs based on the closing market price of our stock at the grant date and amortize the expense over the
vesting period which is typically three years. For RSUs, we recognize compensation cost for unvested share-based awards on
a straight-line basis over the requisite service period. The fair value of stock awards is based on the quoted price of our common stock
on the grant date.

 The
following table summarizes the activity of our RSUs granted under the 2021 Equity Incentive Plan during the years ended September 30,
2025, and September 30, 2024.

 SCHEDULE OF RESTRICTED STOCK UNITS VESTING

 Restricted Stock Unit Grants

 Number
 of RSU's

 Weighted
 Average Grant Date Value Per RSU

 Outstanding Grants at September
 30, 2023

 8,637

 $
 0.10

 11,048

 0.05

 Vested

 ( 6,537
)

 0.08

 Canceled/Forfeited

 ( 2,000
)

 0.10

 Outstanding Grants at
 September 30, 2024

 11,148

 0.06

 11,498

 0.04

 Vested

 ( 6,399
)

 0.06

 Canceled/Forfeited

 ( 946
)

 0.06

 Grants at September 30, 2025

 15,301

 $
 0.05

 The
weighted-average remaining vesting period of RSUs at September 30, 2025, was 1.85 years. The total grant-date fair value of RSUs vested
during fiscal years 2025 and 2024, was $ 414 thousand, and $ 554 thousand, respectively.

 Aggregate
intrinsic value of RSUs represents the applicable number of awards multiplied by the Company's closing share price on the last
trading day of the relevant fiscal period. The approximate aggregate intrinsic value of RSUs outstanding at September 30, 2025, was $ 995
thousand. The approximate aggregate intrinsic values of RSUs awarded during fiscal years 2025 and 2024 were $ 747 thousand and $ 475 thousand,
respectively. The Company's closing share price was approximately $ 0.07 on September 30, 2025, and $ 0.04 on September 30, 2024.

 Stock Options

 The following table summarizes the activity of our
stock options granted under our Equity Incentive Plan during the nine months ended June 30, 2025:

 SCHEDULE OF STOCK OPTION OUTSTANDING TRANSACTIONS

 Number
 of Stock Options

 Options at September 30, 2024

 3,300,000

 -

 Vested

 -

 Cancelled/Forfeited

 ( 3,300,000
)

 Options at June 30, 2025

 -

 On December 20, 2024, our Board of Directors authorized
the termination of stock options previously awarded to independent directors.

 We
have no other forms of equity compensation outstanding as of September 30, 2025. We did not have grants, vesting, or forfeitures of any
other forms of equity compensation during fiscal year 2025.

 NOTE
14 – COMMITMENTS AND CONTINGENCIES

 Litigation

 We
are currently not involved in any litigation that we believe could have a material adverse effect on its financial condition or results
of operations.

 Recently
Settled Litigation

 In
April 2021, Eric Marquez, the former Secretary/Treasurer and Chief Financial Officer of Cipherloc Corporation, and certain other plaintiffs,
filed a lawsuit against Cipherloc Corporation and Michael De La Garza, Cipherloc's former Chief Executive Officer and President,
in the 20 th Judicial District for Hays County, Texas (Cause No. 20-0818). We executed a settlement agreement with the plaintiffs
on December 13, 2024, resulting in the dismissal of the lawsuit with prejudice on January 2, 2025. The settlement agreement requires
the Company to issue the plaintiffs a combined 356,400 shares of common stock and pay a total of $ 95 thousand in cash in six equal, quarterly
installments of approximately $ 16 thousand each, beginning by January 1, 2025, and ending by April 1, 2026. The expenses associated with
this settlement were included in our results for the fiscal year ended September 30, 2024. Four payments totaling approximately $ 63 thousand
have been made and 356,400 shares of common stock have been issued as of September 30, 2025.

 NOTE
15 - INCOME TAXES

 We
began filing consolidated federal and state income tax returns beginning for the tax year ended September 30, 2023. We have adopted the
provisions related to accounting for uncertainty in income taxes, which defines a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We have considered
our tax positions and believe that all the positions taken by us in our federal and state tax returns are more likely than not to be
sustained upon examination.

 We
utilize the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized
for operating loss and tax credit carryforwards and for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations
in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets
unless it is more likely than not that the value of such assets will be realized.

 The
provision for income taxes from continued operations for the years ended September 30, 2025 and 2024 consist of the following:

 SCHEDULE OF PROVISION FOR INCOME TAXES FROM CONTINUED OPERATIONS

 2025

 2024

 2025

 2024

 Current:

 Federal

 $
 —

 $
 —

 State

 Total

 $

 $

 Deferred:

 Federal

 $
 —

 $
 —

 State

 —

 —

 Total

 —

 —

 Provision for income taxes, net

 $

 $

 The
difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is
as follows:

 SCHEDULE OF FEDERAL STATUTORY CORPORATE TAX RATE AND ACTUAL INCOME TAX EXPENSE

 2025

 2024

 Statutory federal income tax rate

 21.00
 %

 21.00
 %

 Non-deductible meals & entertainment

 ( 0.75
)

 ( 0.27
)

 Non-deductible contingent consideration

 —

 —

 Prior year adjustment

 ( 0.16
)

 ( 12.88
)

 State tax

 0.02

 ( 26.91
)

 Loss of NOL due to statute

 ( 13.22
)

 ( 36.65
)

 Change in valuation allowance

 ( 8.57
)

 55.71

 Effective tax rate

 ( 1.68
)%

 0.00
 %

 For
the years ended September 30, 2025 and 2024, the difference between the amounts of income tax expense or benefit that would result from
applying the statutory rates to pretax income to the reported income tax expense of $ 14 thousand for the year ended September 30, 2025, and $ 5 thousand for the year ended September 30, 2024, due to state
income taxes payable to the jurisdictions in which we have nexus.

 Deferred
income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for
tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the
following:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

 Federal

 2025

 2024

 2025

 2024

 Net operating loss carry forward

 $
 7,184

 $
 7,190

 Intangible asset – not deductible for tax

 —

 —

 AIPR&D capitalization

 Other

 Deferred compensation

 Valuation allowance

 ( 7,638
)

 ( 7,536
)

 Deferred income tax asset

 $
 —

 $
 —

 State

 2025

 2024

 2025

 2024

 Net operating loss carry forward

 $

 $

 Intangible asset – not deductible for tax

 —

 —

 Other

 Valuation allowance

 ( 333
)

 ( 320
)

 Deferred income tax asset

 $
 —

 $
 —

 The
Company has a net operating loss carry forward of $ 34.2 million
available to offset future taxable income, of which, $ 2.6 million
will expire within the next five years, $ 10.4
million will expire thereafter, and the remaining $ 21.2 million
will not expire. For income tax reporting purposes, the Company's aggregate unused net operating losses were subject to the
limitations of Section 382 of the Internal Revenue Code, as amended. The Company has adjusted the net operating losses incurred
prior to 2015 to reflect only the losses not subject to limitation. The Company has provided for a valuation reserve against the net
operating loss benefit, because in the opinion of management based upon the earning history of the Company, it is more likely than
not that the benefits will not be realized. For income tax reporting purposes, Management has determined that net operating losses
prior to February 5, 2015, are subject to an annual limitation of approximately $ 525 thousand.

 Utilization
of the pre-Business Combination net operating loss carryforwards ("pre-Combination NOL's") attributable to Cipherloc
may become subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership changes
occurred during the tax year during the tax year ended September 30, 2022. In general, an ownership change, as defined by Section 382, results
from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over
a three-year period. Future ownership changes may trigger Section 382 and therefore, substantially limit the amount of pre-Combination
NOLs that can be utilized annually to offset future taxable income.

 The
Company is current on all its federal income tax filings. The Company is subject to IRS examinations for periods beginning after September
30, 2020, and all net operating losses we may use in future federal tax filings are subject to IRS examination.

 NOTE
16 - SUBSEQUENT EVENTS

 On
December 8, 2025, Anna Seacat was appointed to our Board. The Board considers Ms. Seacat to be "independent"
under the independent director requirements of the Nasdaq Stock Market LLC.

 On
December 9, 2025, Deborah MacConnel, a current Member of the Board of Directors ("Board") of SideChannel, Inc., (the "Company"),
and the Chairwoman of the Board informed the Company of her upcoming retirement from the Board of Directors.

 Ms.
MacConnel will remain a member of the Board and the Chairwoman until the Company's next Annual Stockholders Meeting ("Annual
Meeting"), at which time Ms. MacConnel will not stand for re-election as a Member of the Board.

 Ms.
MacConnel's departure is not the result of any disagreement with the Company's management, the Company's Board or the
Company on any matter related to its operations, policies or practices.

 In
recognition of Ms. MacConnel's tenure and contributions to the Company during her service as a member of the Board, the Company
will provide her with the vesting of 333,667 restricted stock units ("RSUs"), which were awarded to her on December 23, 2024,
and are scheduled to vest on March 1, 2026. The remaining 333,667 RSUs from the December 23, 2024, award will be forfeited by Ms. MacConnel.

 The
Company has evaluated events through December 18, 2025, the filing date of this Annual Report on Form 10-K and determined that there
have been no additional subsequent events that occurred that would require adjustments to our disclosures in the consolidated financial
statements.

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM
9A. CONTROLS AND PROCEDURES

 Our
management is responsible for establishing and maintaining adequate "disclosure controls and procedures," as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports
that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated to our principal executive officer to allow timely
decisions regarding required disclosure. Disclosure controls and procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated
to our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), to allow
timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, the Company recognized
that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving
the desired control objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of
possible disclosure controls and procedures.

 Evaluation
of Disclosure Controls and Procedures

 As
of September 30, 2025, our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our CEO and CFO have concluded, based upon the evaluation
described above, that, as of September 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance
level because of the material weaknesses discussed below.

 Notwithstanding
the material weaknesses in internal control over financial reporting described below, our management has concluded that our consolidated
financial statements included in this Form 10-K are fairly stated in all material respects in accordance with U.S. GAAP.

 Material
Weaknesses

 A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is
a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented
or detected on a timely basis.

 In
connection with the preparation of our audited financial statements for the year ended September 30, 2023, we identified material weaknesses
in our internal control over financial reporting, as of September 30, 2023. These material weaknesses had not been fully remediated as
of September 30, 2025. The material weaknesses identified related to the fact that we did not design and maintain accounting policies,
procedures and controls to ensure complete, accurate and timely financial reporting in accordance with U.S. GAAP. Specifically, the material
weaknesses identified included the following:

 Did
 not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting,
 reporting and disclosures, including controls over the preparation and review of account reconciliations, journal entries and classification
 of certain costs;

 We
 had not developed and effectively communicated to our employees our accounting policies and procedures, which resulted in inconsistent
 practices. Since these entity level programs have a pervasive effect across the organization, management has determined that these
 circumstances constitute a material weakness;

 We
 do not have sufficient, qualified finance and accounting staff with the appropriate U.S. GAAP technical accounting expertise to identify,
 evaluate and account for accounting and financial reporting, and effectively design and implement systems and processes that allow
 for the timely production of accurate financial information in accordance with internal financial reporting timelines. As a result,
 we did not design and maintain formal accounting policies, processes and controls related to complex transactions necessary for an
 effective financial reporting process; and

 As
 a high-growth, smaller reporting company that became responsible for listed financial reporting, we have a limited staff and budget
 available to adequately test and monitor the effectiveness of certain internal controls.

 Remediation
Plan

 Our
management is actively engaged and committed to taking the steps necessary to remediate the control deficiencies that constituted the
material weaknesses. During fiscal year 2025, we continued documenting and enhancing accounting policies, procedures and controls to
achieve complete, accurate, and timely financial accounting, reporting and disclosures including controls over the preparation and review
of account reconciliations, journal entries and classification of certain costs.

 Our
remediation activities will continue during fiscal year 2026. In addition to the above actions, additional activities may include:

 Hiring
 additional qualified accounting staff to enable additional separation of duties;

 Engaging
 external consultants to provide support and to assist us in our evaluation of more complex applications of U.S. GAAP, and to assist
 us with documenting and assessing our accounting policies and procedures until we have sufficient technical accounting resources;
 and

 Implementing
 business process-level controls across all significant accounts and information technology general controls across all relevant systems.
 This includes providing training for control owners that will present expectations as it relates to the control design, execution
 and monitoring of such controls, including enhancements to the documentation to evidence the execution of the controls.

 We
continue to enhance corporate oversight over process-level controls and structures to ensure that there is appropriate assignment of
authority, responsibility, and accountability to enable remediation of our material weaknesses. We believe that our remediation plan
will be sufficient to remediate the identified material weaknesses and strengthen our controls. As we continue to evaluate, and work
to improve our controls, management may determine that additional measures to address control deficiencies or modifications to the remediation
plan are necessary.

 While
we have performed certain remediation activities to strengthen our controls to address the identified material weaknesses, control weaknesses
are not considered remediated until new internal controls have been operational for a period of time, are tested, and management concludes
that these controls are operating effectively. We will continue to monitor the effectiveness of our remediation measures in connection
with our future assessments of the effectiveness of internal control over financial reporting and disclosure controls and procedures,
and we will make any changes to the design of our plan and take such other actions that we deem appropriate given the circumstances.

 Management's
Annual Report on Internal Control over Financial Reporting

 Management
is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with U.S. GAAP.

 The
information set forth under "Material Weaknesses" above is incorporated herein by reference.

 Management,
under the supervision of the Company's CEO and CFO, conducted an evaluation, as of September 30, 2025, of the effectiveness of
internal control over financial reporting based on the framework in 2013 Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company's
internal control over financial reporting was not effective as of September 30, 2025.

in Internal Control over Financial Reporting

 There
have been no changes in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) during the fiscal year ended September 30, 2025, covered by this Form 10-K that have materially affected, or are reasonably
likely to materially affect, the Company's internal control over financial reporting, other than described herein. We are continuing
to take steps to remediate the material weaknesses in our internal control over financial reporting, as discussed above.

 Inherent
Limitation on the Effectiveness of Internal Control

 Readers
are cautioned that internal control over financial reporting, no matter how well designed, has inherent limitations and may not prevent
or detect misstatements. Therefore, even effective internal control over financial reporting can only provide reasonable assurance with
respect to the financial statement preparation and presentation.

 This
annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting
firm pursuant to rules of the SEC that permit the Company to provide only management's report in this annual report.

 ITEM
9B. OTHER INFORMATION

 None.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 None.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

regarding directors and executive officers of the Company, as well as the required disclosures with respect to the Company's audit
committee financial expert, is incorporated herein by reference to the information included in our Proxy Statement for our next Annual
Meeting of Stockholders which will be filed with the SEC within 120 days after the end of our fiscal year 2025.

 The
Company has adopted a Code of Ethics that applies to all our directors, officers and employees, including our Chief Executive Officer
and Chief Financial Officer. The complete text of this Code of Ethics is available on the SEC's EDGAR system as described in Part
IV, Item 15 of this Form 10-K.

 ITEM
11. EXECUTIVE COMPENSATION

regarding executive compensation of our directors and officers, is incorporated herein by reference to the information included in our
Proxy Statement for our next Annual Meeting of Stockholders which will be filed with the SEC within 120 days after the end of our fiscal
year 2025.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

regarding security ownership of certain beneficial owners and management and the Company's equity compensation plans are incorporated
herein by reference to the information included in our Proxy Statement for our next Annual Meeting of Stockholders which will be filed
with the SEC within 120 days after the end of our fiscal year 2025.

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

regarding certain relationships and related transactions and director independence is incorporated herein by reference to the information
included in our Proxy Statement for our next Annual Meeting of Stockholders which will be filed with the SEC within 120 days after the
end of our fiscal year 2025.

 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

regarding principal accounting fees and services is incorporated herein by reference to the information included in our Proxy Statement
for our next Annual Meeting of Stockholders which will be filed with the SEC within 120 days after the end of our fiscal year 2025.

 PART
IV

 ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a)

 Documents
 filed as part of this report:

 1.

 Financial
 Statements

 The
 financial statements and schedules required by this Item 15 are set forth in Part II, Item 8 of this Form 10-K.

 (b)

 Exhibits.
 The following exhibits are filed as a part of this report:

 Exhibit

 Number

 Description
 of Document

 2.1

 Agreement and Plan of Merger by and between Cipherloc Corporation, a Texas corporation and Cipherloc Corporation, a Delaware corporation (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed September 17, 2021).

 3.1

 Certificate of Incorporation of Cipherloc Corporation, a Delaware corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on September 30, 2021).

 3.2

 Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, filed on September 30, 2021).

 3.3

 Certificate of Amendment of Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed July 6, 2022).

 3.4

 Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed July 6, 2022).

 4.1*

 Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

 10.1

 Form of Securities Purchase Agreement between Cipherloc, a Texas corporation and the several purchasers of the Company's units (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 8, 2021).

 10.2

 Form of Registration Rights Agreement dated March 31, 2021 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on April 8, 2021).

 10.3

 2018 Common Stock Purchase Warrant issued to the placement agents associated with a 2018 private placement conducted by Paulson Investment Company, LLC.

 10.4

 2021 Common Stock Purchase Warrant issued to the placement agents associated with a 2021 private placement conducted by Paulson Investment Company, LLC.

 10.5

 2021 Common Stock Purchase Warrant issued to the investors in the 2021 private placement conducted by Paulson Investment Company, LLC.

 10.6

 Letter Agreement with Paulson Investment Company, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 28, 2021).

 10.7

 Ryan Polk Executive Employment Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on October 12, 2021).

 10.8

 2021 Omnibus Equity Incentive Plan approved by the Company's stockholders at the 2021 Annual Meeting held September 13, 2021 (incorporated by reference to Appendix A to the Company's Definitive Proxy Statement filed on July 20, 2021).

 10.9

 Brian Haugli Executive Employment Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 6, 2022).

 10.10

 Independent Contractor Agreement by and between the Company and Thomas Wilkinson (Thomas W. Wilkinson, CPA, PLLC) dated December 28, 2022 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 30, 2022).

 10.11

 Ryan Polk 2023 Compensation Change Authorization (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 5, 2023).

 10.12

 Offer to Exchange Common Stock for Certain Outstanding Warrants, dated August 21, 2023 (incorporated by reference to Exhibit (a)(1)(A) to the Schedule TO filed on August 22, 2023).

 10.13

 Notice of Extension of the Offer to the Holders of the Warrants, dated September 19, 2023 (incorporated by reference to Exhibit (a)(1)(I) to the Schedule TO Amendment No. 2 filed on September 20, 2023.

 10.14

 Notice of Withdrawal of the Offer to the Holders of Warrants, dated November 3, 2023 (incorporated by reference to Exhibit (a)(1)(J) to the Schedule TO Amendment No. 3 filed on November 3, 2023).

 10.15

 Offer to Exchange Common Stock for Certain Outstanding Warrants, dated November 6, 2023 (incorporated by reference to Exhibit (a)(1)(A) to the Schedule TO filed on November 7, 2023).

 10.16

 2023 Common Stock Purchase Warrant as Amended on November 14, 2023, dated November 14, 2023 (incorporated by reference to Exhibit (a)(1)(F) to the Schedule TO Amendment No. 1 filed on November 14, 2023).

 10.17

 Offer to Exchange Common Stock and New Warrants for 2021 Investor Warrants and Amended on December 1, 2023 (incorporated by reference to Exhibit (a)(1)(H) to the Schedule TO Amendment No. 2 filed on December 4, 2023).

 14.1

 Code of Ethics for Directors, Officers and Employees of SideChannel and its Affiliates, dated August 8, 2019 (incorporated by reference to Exhibit 14.1 to the Company's Current Report on Form 8-K, filed on August 12, 2019).

 19.1

 SideChannel Insider Trading Policy adopted on March 14, 2024.

 21.1

 Subsidiaries of the Registrant.

 23.1*

 Consent of Independent Registered Public Accounting Firm.

 24.1*

 Power of Attorney (included on signature page)

 31.1*

 Certification of Principal Executive Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*

 Certification of Principal Financial Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1**

 Certification
 of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
 2002.

 101.INS*

 101.SCH*

 101.CAL*

 101.LAB*

 101.PRE*

 101.DEF*

 104*

 Cover

Indicates management or compensatory plan or arrangement

 *
Filed herewith

 **
Furnished herewith

 EXHIBIT
16. FORM 10-K SUMMARY

 None

 SIGNATURES

 In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, there unto duly authorized.

 SideChannel,
 Inc.

 Date:

 By:

 /s/
 Brian Haugli

 Brian
 Haugli

 President
 and Chief Executive Officer

 Date:

 By:

 /s/
 Ryan Polk

 Ryan
 Polk

 Chief
 Financial Officer

 POWER
OF ATTORNEY

 Each
person whose signature appears below hereby appoints Brian Haugli and Ryan Polk, and each of them, as attorney-in-fact with full power
of substitution to execute in the name and on behalf of the registrant and each such person, individually and in each capacity stated
below, one or more amendments to the annual report on Form 10-K, which amendments may make such changes in the report as the attorney-in-fact
acting deems appropriate and to file any such amendment to the annual report on Form 10-K with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.

 In
accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.

 Date:

 By:

 /s/
 Brian Haugli

 Brian
 Haugli

 President,
 Chief Executive Officer, and Director (principal executive officer)

 Date:

 By:

 /s/
 Ryan Polk

 Ryan
 Polk

 Chief
 Financial Officer (principal financial officer and principal accounting officer)

 Date:

 By:

 /s/
 Deborah MacConnel

 Deborah
 MacConnel

 Chairwoman
 of the Board

 Date:

 By:

 /s/
 Robert Brown

 Robert
 Brown

 Director

 Date:

 By:

 /s/
 Nick Hnatiw

 Nick
 Hnatiw

 Chief
 Technology Officer and Director

 Date:

 By:

 /s/
 Hugh Regan, Jr.

 Hugh
 Regan, Jr.

 Director

 Date: December 18, 2025

 By:

 /s/ Anna Seacat

 Anna Seacat

 Director