CIPHERPOINT LIMITED

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Cipherpoint : Appendix 4C and Activities Report

01/19/2022 | 05:06pm

For personal use only

ASX ANNOUNCEMENT (ASX: CPT)

20 JANUARY 2022

QUARTERLY ACTIVITIES REPORT AND BUSINESS UPDATE AND APPENDIX 4C FOR THE QUARTER

ENDED 31 DECEMBER 2021

Cipherpoint Limited (Cipherpoint or the Company) (ASX:CPT) is pleased to provide the following quarterly activities report and business update and Appendix 4C for the quarter ended 31 December 2021

  • Record Customer Receipts
  • Record Quarter Revenues
  • Continued Brace168 and VITCS Growth with outlook looking strong
  • Major Customer Wins
  • $2.599M Cash at Bank

Quarter Financial Highlights

The results for the Cipherpoint group (the Group), include revenues and cashflows for our Brace168 cyber security services platform division and 2 months of the recently acquired VITCS.

Financial highlights for the quarter were:

  • Customer receipts of $1.441M compared to September quarter receipts of $1.247M
  • The Group held $2.599M in cash as of 31 December 2021 following funding of VITCS acquisition and further investments in growth
  • Strong revenue growth Q on Q in Brace168 and VITCS.

Brace168

VITCS

Millions

1.25

250

1.00

200

0.75

150

0.50

100

0.25

50

-

-

Q1 Apr-Jun Q2 Jul-Sep Q3 Oct-Dec

Q1 Apr-Jun Q2 Jul-Sep Q3 Oct-Dec

©2022 Cipherpoint Limited or its affiliates

Page 1

ABN 61 120 658 497

For personal use only

Operating expenses slightly higher due to new hires to support growth and consolidating VITCS operating costs. During the quarter, the Company made payments to related parties of $251K which were comprised of usual executive and non-executive director fees, salaries, and consultancy payments. The Company notes that effective from January 2022 the remuneration of Mr Pretty (as Managing Director and Executive Chairman) has been increased by $11,000 to $33,000 per month, for a temporary period of 6 months, unless extended by the Board, in recognition of his increased role and time commitment associated with, among other things, the ongoing integration of recent acquisitions.

Cipherpoint Executive chairman Mr Ted Pretty said "The December quarter delivered record customer receipts and revenues for the Group and reflects the determination of the team to grow the top line of our business in the face of strong competition for customers and resources. As we achieve more scale and extract operating synergies our focus will shift to improving our operating margins. We intend to expand both vertically in acquiring cyber capabilities and horizontally by looking at complementary businesses. Our strategy of acquiring additional cyber capability and complementary businesses is working very well."

CPT Group

1.5

Millions

1.0

0.5

-

Q1 Apr-Jun

Q2 Jul-Sep

Q3 Oct-Dec

Note: Revenue from sale of software assets excluded

Figure 3. Revenue growth for the group is accelerating

Activities Report and Business Update

The demand for cyber security and data protection solutions and services remained strong.

During the December quarter:

  • Both Brace168 and VITCS continued to grow their sales pipeline and customer base for recurring and project revenues
  • Brace 168:
  1. secured new contracts with major organisations including with Ingenia Communities

and telco Vocus Communications along with other client wins;

    1. retained 100% of our existing customer base; and o maintained our ISO27001 accreditation.
  • VITCS, which was acquired in the quarter, also secured three new customers relating to cyber security related professional services work, an extension of its existing professional services engagement with Tasmanian Government and an extension to Red Hat for systems support contract for Department of Health Tasmania to start 1st March 2022.

©2022 Cipherpoint Limited or its affiliates

Page 2

ABN 61 120 658 497

For personal use only

  • The Company also continued the recruitment of new sales, delivery and technical staff and the Sydney and Hobart based teams continue to accommodate a combination of office and remote working arrangements.

Outlook

Operationally, Cipherpoint is in a strong position and confident of continuing growth. The Group sees further positive tailwinds in the growing market for cyber security services, its strong sales pipeline and good partner relationships. We will continue to identify suitable targets in the managed services and cyber security markets.

Cipherpoint also intends to continue its strategy of deploying our cash to scale the Group's business by chasing organic growth and to pursue bolt on EPS accretive acquisitions.

--Ends--

This announcement has been approved for release by the Board.

About Cipherpoint Group

Cipherpoint through its wholly owned subsidiaries Brace 168 and VITCS is a focused managed cyber security services business. It utilizes its best of breed security operations centre and a highly trained operations and advisory team to identify and detect security vulnerabilities using Brace168's unique cyber security approach driven by the NIST framework. It provides innovative IT and cyber security solutions to a broad range of enterprise sectors and government.

Further information

For further information, please visit https://covata.com/cipherpoint.com

Cipherpoint investor relations contact:

Ted Pretty

Peter Taylor

Managing Director and Executive

Investor Relations

Chairman

Peter@nwrcommunications.com.au

+61 412 036 231

©2022 Cipherpoint Limited or its affiliates

Page 3

ABN 61 120 658 497

For personal use only

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Cipherpoint Limited

ABN

Quarter ended ("current quarter")

61 120 658 497

31 December 2021

Consolidated statement of cash flows

Current quarter

Year to date

$A'000

(9 months)

$A'000

1.

Cash flows from operating activities

1.1

Receipts from customers

1,441

3,075

1.2

Payments for

(a)

research and development

(190)

(409)

(b) product manufacturing and operating

-

-

costs

(c)

advertising and marketing

(45)

(178)

(d)

leased assets

-

-

(e)

staff costs

(1,071)

(2,617)

(f) administration and corporate costs

(745)

(2,349)

1.3

Dividends received (see note 3)

-

-

1.4

Interest received

-

-

1.5

Interest and other costs of finance paid

(1)

(41)

1.6

Income taxes paid

-

-

1.7

Government grants and tax incentives

-

-

1.8

Other (provide details if material)

(10)

(29)

1.9

Net cash from / (used in) operating

(620)

(2,547)

activities

2.

Cash flows from investing activities

2.1

Payments to acquire or for:

(a)

entities

-

-

(b)

businesses

(700)

(2,677)

(c) property, plant, and equipment

(43)

(229)

(d)

investments

-

-

(e)

intellectual property

-

-

ASX Listing Rules Appendix 4C (17/07/20)

Page 4

+ See chapter 19 of the ASX Listing Rules for defined terms.

For personal use only

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows

Current quarter

Year to date

$A'000

(9 months)

$A'000

(f)

other non-current assets

(45)

(61)

2.2

Proceeds from disposal of:

(a)

entities

-

-

(b)

businesses

-

1,320

(c)

property, plant, and equipment

-

-

(d)

investments

-

-

(e)

intellectual property

-

-

(f)

other non-current assets

-

-

2.3

Cash flows from loans to other entities

-

-

2.4

Dividends received (see note 3)

-

-

2.5

Other (provide details if material)

-

(32)

2.6

Net cash from / (used in) investing

(788)

(1,679)

activities

3. Cash flows from financing activities

3.1 Proceeds from issues of equity securities

(excluding convertible debt securities)

-

2,170

3.2

Proceeds from issue of convertible debt

-

-

securities

3.3

Proceeds from exercise of options

-

-

3.4

Transaction costs related to issues of

-

-

equity securities or convertible debt

securities

3.5

Proceeds from borrowings

121

787

3.6

Repayment of borrowings

-

-

3.7

Transaction costs related to loans and

-

-

borrowings

3.8

Dividends paid

-

-

3.9

Other (provide details if material)

-

(90)

3.10

Net cash from / (used in) financing

121

2,867

activities

4. Net increase / (decrease) in cash and cash equivalents for the period

4.1 Cash and cash equivalents at beginning of

period

3,887

3,962

4.2

Net cash from / (used in) operating

(620)

(2,547)

activities (item 1.9 above)

4.3

Net cash from / (used in) investing activities

(788)

(1,679)

(item 2.6 above)

ASX Listing Rules Appendix 4C (17/07/20)

Page 5

+ See chapter 19 of the ASX Listing Rules for defined terms.

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Cipherpoint Limited published this content on 19 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 January 2022 22:05:08 UTC.

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