What changed in this filing

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Item 9A. Controls and Procedures

2022-12-20 compared with 2021-12-21 · 139 added, 576 removed, 24 unchanged (97% of the section changed)

CONTROLS AND PROCEDURES

of Disclosure Controls and Procedures

maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file

or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities

and Exchange Commission’s (the “SEC”) rules and forms and that such information is accumulated and communicated to

our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter

how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is

required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our disclosure controls

and procedures have not been formally designed and evaluated to provide reasonable assurance that the controls and procedures would meet

their objectives.

required by SEC Rule 13a-15(b), our Chief Executive Officer and Principal Financial Officer need to carry out an evaluation of the effectiveness

of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.

foregoing, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not

effective as of September 30, 2020, due to 1) no formal evaluation has been performed by us and 2) the existence of the material weaknesses

in internal control over financial reporting described below (which we view as an integral part of our disclosure controls and procedures).

Based on the performance of additional procedures designed to ensure the reliability of our financial reporting, we believe that the

financial statements included in this Annual Report fairly present, in all material respects, our financial position, results of operations

and cash flows as of the dates, and for the periods, presented, in conformity with U.S.

Report on Internal Control over Financial Reporting

Chief Executive Officer and the Principal Financial Officer are responsible for establishing and maintaining adequate internal control

over financial reporting and for the assessment of the effectiveness of our internal control over financial reporting.

Internal control

over financial reporting (as defined in Rules 13a-15(f) and 15d(f) under the Exchange Act) is a process designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes

in accordance with U.S.

Internal control over financial reporting includes those policies and procedures that (a) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets, (b) provide

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,

(c) provide reasonable assurance that receipts and expenditures are being made only in accordance with appropriate authorization of management

and the Board of Directors, and (d) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use or disposition of assets that could have a material effect on the financial statements.

connection with the preparation of the Annual Report on Form 10-K for the year ended September 30, 2021, our Chief Executive Officer

and Principal Financial Officer evaluated the effectiveness of our internal control over financial reporting as of September 30, 2021

and concluded that we had not implemented effective internal control over financial reporting during the reporting year.

executed a remediation plan to address the material weaknesses discussed above.

These remediation efforts focused on:

monitoring and review controls over financial reporting and disclosures;

review and approval controls around transaction processing;

controls around proving the delivery of software;

and maintaining written policies and procedures for accounting and financial reporting.

to September 30, 2019, management designed and implemented review and approval controls around transaction processing, including written

policies and procedures.

In addition, management has continued to train key accounting staff to improve controls that will eliminate

the material weaknesses discussed above, as well as improve the accounting and financial reporting process.

has also evaluated the effectiveness of its internal control over financial reporting in accordance with generally accepted accounting

principles within the guidelines of the Committee of Sponsoring Organizations of the Treadway Commission framework (2013).

results of this evaluation, management has determined that the Company’s internal control over financial reporting was effective

as of September 30, 2021.

maintain “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.

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.

of disclosure and controls and procedures

of September 30, 2022, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, 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 management

recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving

their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and

Our Chief Executive Officer and Chief Financial Officer have concluded based upon the evaluation described above that, as

of September 30, 2022, our disclosure controls and procedures were not effective at the reasonable assurance level.

Annual Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined

in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our internal control system is designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally

accepted accounting principles.

Because of inherent limitations, a system of internal control over financial reporting may not prevent

or detect all misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls

may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

control over financial reporting is defined, under the Exchange Act, as a process designed by, or under the supervision of, the issuer’s

principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those

policies and procedures that:

to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets

of the issuer;

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with

generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with

authorizations of management and directors of the issuer;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s

assets that could have a material effect on the financial statements.

Company’s principal executive officers have assessed the effectiveness of the Company’s internal control over financial

reporting as of September 30, 2022.

In making this assessment, the Company’s principal executive officers were guided by the

releases issued by the SEC and to the extent applicable the criteria established in Internal Control - Integrated Framework issued

by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Update).

The Company’s principal executive

officers have concluded that based on their assessment, as of September 30, 2022, that our internal control over financial reporting

were not effective and require remediation in order to be effective at the reasonable assurance level.

Prior to the Business

Combination, we have been a private company with limited accounting personnel and other resources necessary for effective internal

controls over financial reporting.

In addition, our auditors identified material weaknesses in our internal control over financial

reporting during the audit of the fiscal year ended September 30, 2022.

A material weakness is a deficiency, or combination of

deficiencies, in internal controls, such that there is a reasonable possibility that a material misstatement of our annual or

interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified relate to the

fact that we did not design and maintain an effective control environment commensurate with our financial reporting requirements,

including (a) lack of a sufficient number of trained professionals with an appropriate level of accounting knowledge, training and

experience and (b) lack of accounting research on critical accounting policies including business combinations and specifically

the valuation of warrants in calculating the consideration paid during the Business Combination.

Management’s general assessment of the above processes in light of the company’s size, maturity and

complexity, as to the design and effectiveness of the internal controls over financial reporting is that the key controls and

procedures in each of these processes provide reasonable assurance regarding reliability of financial reporting and the preparation

of financial statements for external purposes in accordance with generally accepted accounting principles.

The remediation efforts we will undertake during fiscal year 2023 are intended to increase our accounting knowledge,

training, and experience through increased staffing and engagement with the appropriate third-party subject matter experts.

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.

in Internal Control over Financial Reporting

the year ended September 30, 2021, there were no changes in our internal control over financial reporting that have materially affected

or are reasonably likely to materially affect our internal control over financial reporting, other than the remediation actions discussed

Limitations on Internal Controls

should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance

that the objectives of the control system are met.

In addition, the design of any control system is based in part upon certain assumptions

about the likelihood of certain events.

Limitations inherent in any control system include the following:

in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes;

can be circumvented by individuals, acting alone or in collusion with others, or by management override;

design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be

no assurance that any design will succeed in achieving its stated goals under all potential future conditions;

time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated

policies or procedures;

design of a control system must reflect the fact that resources are constrained, and the benefits of controls must be considered

relative to their costs.

of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues

and instances of fraud, if any, have been detected.

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 Securities Exchange Act of 1934, as amended) during the last quarterly period covered by this report that have materially affected,

or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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 Securities and Exchange Commission that permit the Company to provide only management’s report in

this annual report.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE [incorporate by reference to July 2021 proxy statement?]

and Executive Officers

forth below is information regarding the Company’s current directors and executive officers.

There are no family relationships

between any of our directors or executive officers.

The directors are elected annually by our stockholders.

The executive officers serve

at the pleasure of the Board of Directors.

of the Board of Directors

Independent Director

Executive Officer and Director

Financial Officer

Technology Officer

background and principal occupations of the directors and executive officers of the Company are as follows:

Wilkinson – Chairman of the Board of Directors

Wilkinson serves as the Company’s Chairman of the Board of Directors.

He is a licensed CPA in Texas and Colorado.

October 2015 he was the Chief Financial Officer of Amherst Holdings, LLC.

Wilkinson joined Xplore Technologies Corp., a NASDAQ traded

company, in 2015 where he served as the Chief Financial Officer until 2017 when he took on the position of Chief Executive Officer until

the sale of the company to Zebra Technologies in August 2018.

He presently owns and operates Wilkinson & Company, a financial and

business consulting firm focused on emerging growth pre-IPO and public companies.

Wilkinson has also been a member of the board of

directors of Astrotech Corporation (NASDAQ:

ASTC) since October 2018.

He received his Bachelor of Business Administration and Master

of Professional Accounting from the University of Texas in 1992.

We believe Mr.

Wilkinson is qualified to serve on our board of directors

based on his financial experience.

Ambrose – Lead Independent Director

Ambrose serves a director of the Company.

Ambrose has served as a director, President and Chief Executive Officer of Data I/O, the

leading global provider of advanced data and security programming solutions, and a NASDAQ listed company (NASDAQ:

Prior to Data

Ambrose was Owner and Principal of Cedar Mill Partners, LLC, a strategy consulting firm since 2011.

From 2007 to 2011, he was

Vice President and General Manager at RadiSys Corporation, a leading provider of embedded wireless infrastructure solutions, where he

established the telecom platform business and grew it to over $125M in annual revenues.

He was previously general manager and held several

other progressively responsible positions at Intel Corporation, where he led development and marketing of standards-based communications

platforms and grew the industry standard server business to over $1B in revenues.

Ambrose has a Bachelor of Science degree in Engineering

from Princeton University and has completed the Stanford University Director Symposium.

Ambrose is qualified to serve on our board of directors based on his data security and industry experience.

Chasteen – Chief Executive Officer and Director

Chasteen serves as a director of the Company.

Since 2018, Mr.

Chasteen has been the Chief Information Security Officer for the City and

County of San Francisco Police Department.

From 2015 to 2018, Mr.

Chasteen was a Threat Intelligence Strategist for the City and County

of San Francisco where he was responsible for managing city, state and federal intelligence relationships and managing cybersecurity

operations for the City and County of San Francisco.

From 2015 to 2016 Mr.

Chasteen was the Western Regional Director for Iraq and Afghanistan

Veterans of America.

From 2006 to 2014 Mr.

Chasteen worked for the Central Intelligence Agency as a Collection Management Officer, Specialized

Skills Officer, and finally an Executive Officer, Covert Action Staff.

Chasteen received a B.S.

in Political Science from Ball State

University in 2000.

We believe Mr.

Chasteen is qualified to serve on our board of directors based on his cybersecurity and industry experience.

Davis DrPH – Director

Davis serves as a director of the Company.

Davis has over 20 years’ experience in operations, finance, budgeting, financial

reporting, revenue cycle management, inventory, payroll, accounts receivable and payable, and information systems in the healthcare industry.

Since 2009 Dr.

Davis has been a Senior Marketing Liaison with Physician Reliance Corporation.

From 2005 to 2009, Dr.

Davis was the Chief

Executive officer of Renaissance Hospital in the Dallas/Fort Worth Area.

From 2004 to 2005, Dr.

Davis was the interim Chief Executive

Officer of Transition Health Care LTAC in Corpus Christi, TX.

Davis holds a Doctor of Public Health degree from the University of

We believe Dr.

Davis is qualified to serve on our board of directors based on his leadership experience.

Polk – Chief Financial Officer

Polk serves as the Company’s Chief Financial Officer.

Polk has served in leadership roles in both public and private companies

after a brief time at accounting firm Ernst & Young.

He is a part-time employee of Cipherloc and is engaged in providing CEO and

CFO related services to other companies as an independent contractor.

He is a graduate of Purdue University with two Bachelor of Science

degrees from the Krannert School of Management.

His career has focused on both the consumer products and technology industries.

Hnatiw – Chief Technology Officer

Hnatiw serves as the Company’s Chief Technology Officer.

Hnatiw has more than 15 years of experience creating software technologies

from network security to artificial intelligence.

Hnatiw has led the design and development of a security risk assessment SaaS platform,

run a security monitoring service with a custom-built next generation automation and SIEM system.

Prior to the Company, Mr.

Hnatiw served

as the technical director for network operations supporting U.S.

Cyber Command, U.S.

Intelligence Agencies, and other Department of Defense

research organizations from October 2010 to October 2014.

From June 2015 to September 2019, Mr.

Hnatiw was the Chief Executive Officer

of Loki Labs, a cyber security firm.

Hnatiw is also currently a consultant with Cuesta Partners (since January 2020);

a partner and

Chief Technology Officer of Sidechannel Security (since February 2020), and the Chief Technology Officer of RealCISO.io (since October

Hnatiw earned a Bachelor of Science degree in computer engineering and computer science at the University of Massachusetts,

Relationships and Other Arrangements

are no family relationships among our directors and executive officers.

Other than Mr.

Chasteen’s appointment as a chief executive

officer in connection with his employment agreement, there are no arrangements or understandings between or among our executive officers

and directors pursuant to which any director or executive officer was or is to be selected as a director or executive officer.

Leadership Structure and Role in Risk Oversight

Board has established an audit committee, a compensation committee, and a nominating and corporate governance committee, each of which

operate pursuant to a charter adopted by our Board.

Each committee has the composition and responsibilities described below.

may establish other committees from time to time.

following table identifies the current members of each of our committees:

Tom Wilkinson

Anthony Ambrose

David Chasteen

Sammy Davis DrPH

Chairman of the committee

Board has determined that a majority of the Board consists of members who are currently “independent” as that term is defined

under the rules of the Nasdaq Stock Market LLC.

As our common stock is traded over the counter on the OTCQB, we are not required to comply

with such requirements.

Nevertheless, the Board considers Ms.

Davis, and Mr.

Ambrose to be “independent” under

Ambrose, Wilkinson, and Davis serve on the Audit Committee, which is chaired by Mr.

audit committee’s responsibilities include:

approving the compensation of, and assessing the independence of our independent registered public accounting firm;

pre-approving

auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public

accounting firm;

the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing

our financial statements;

and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements

and related disclosures as well as critical accounting policies and practices used by us;

the oversight and reviewing the adequacy of our internal control over financial reporting;

policies and procedures for the receipt and retention of accounting-related complaints and concerns;

based upon the audit committee’s review and discussions with management and our independent registered public accounting firm

whether our audited financial statements will be included in our Annual Reports on Form 10-K;

the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial

statements and accounting matters;

the audit committee report required by SEC rules to be included in our annual proxy statement;

all related person transactions for potential conflict of interest situations and approving all such transactions;

quarterly earnings releases.

Ambrose, Wilkinson, and Davis and serve on the Compensation Committee which is chaired by Mr.

compensation committee’s responsibilities include:

reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer;

the performance of our chief executive officer considering such corporate goals and objectives and determining the compensation of

our chief executive officer;

and approving the compensation of our other executive officers;

and establishing our overall management compensation, philosophy and policy;

and administering our compensation and similar plans;

and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable

Nasdaq rules;

and approving the compensation of any compensation advisors;

and making recommendations to our Board about our policies and procedures for the grant of equity-based awards;

and making recommendations to the Board about director compensation;

the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement;

and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation

Governance/Nominating Committee

Ambrose, Wilkinson, and Davis serve on the Corporate Governance/Nominating Committee, which is chaired by Mr.

nominating and corporate governance committee’s responsibilities include:

and recommending to the Board criteria for board and committee membership;

procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;

the size and composition of the Board to ensure that it is composed of members containing the appropriate skills and expertise to

individuals qualified to become members of the Board;

to the Board the persons to be nominated for election as directors and to each of the board’s committees;

and recommending to the Board a code of business conduct and ethics and a set of corporate governance guidelines;

the evaluation of our Board and management.

of our management are associated with other firms involved in a range of business activities.

Consequently, there are potential inherent

conflicts of interest in their acting as officers and directors of our company.

Although the directors are engaged in other business

activities, we anticipate they will devote an important amount of time to our affairs.

officers and directors are now and may in the future become stockholders, officers or directors of other companies, which may be formed

for the purpose of engaging in business activities similar to ours.

Accordingly, additional direct conflicts of interest may arise in

the future with respect to such individuals acting on behalf of us or other entities.

Moreover, additional conflicts of interest may

arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise.

Currently, we do not have a right of first refusal pertaining to opportunities that come to their attention and may relate to our business

officers and directors are, so long as they are our officers or directors, subject to the restriction that all opportunities contemplated

by our plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered

opportunities of, and be made available to us and the companies that they are affiliated with on an equal basis.

A breach of this requirement

will be a breach of the fiduciary duties of the officer or director.

If we or the companies with which the officers and directors are

affiliated both desires to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting

upon the opportunity.

However, all directors may still individually take advantage of opportunities if we should decline to do so.

as set forth above, we have not adopted any other conflict of interest policy with respect to such transactions.

have adopted a formal Code of Ethics applicable to all Board members, officers and employees.

A copy of our Code of Ethics may be obtained

without charge upon written request to Secretary, Cipherloc Corporation, 6836 Bee Cave Road, Bldg.

1, Suite 279, Austin, TX 78746.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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 the Company’s 2022 Proxy Statement

which will be filed with the Commission within 120 days after the end of the Company’s 2022 fiscal year.

Company has adopted a Code of Ethics that applies to all of 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.

EXECUTIVE COMPENSATION

Compensation Table

following tables set forth certain information concerning all compensation paid, earned or accrued for service by (i) our Principal Executive

Officer and Principal Financial Officer and (ii) all other executive officers who earned in excess of $100,000 in the fiscal years ended

September 30, 2021 and 2020, and each of the other two most highly compensated executive officers of the Company who served in such capacity

at the end of the fiscal year whose total salary and bonus exceeded $100,000 (collectively, the “Named Executive Officers”):

COMPENSATION TABLE

Other Compensation ($) (1)

in Pension Value and Nonqualified Deferred Compensation Earnings ($)

David Chasteen(7)

Executive Officer & Director

Executive Officer (2)

Chief Financial Officer (3)

Technology Officer (8)

Financial Officer (4)

Scientific Officer (6)

Operating Officer (5)

All other compensation consists primarily of remunerations for legal settlements, severance, auto and health insurance costs.

Andrew Borene was terminated as Chief Executive Officer on April 3, 2020.

Polk was appointed as Chief Financial Officer on February 1, 2020.

Mauriello was terminated as Chief Financial Officer on December 13, 2019.

Mattox resigned from the Company on November 12, 2020.

Carlson resigned from the Company on December 17, 2019

Chasteen was appointed as Chief Executive Officer on November 1, 2020

Hnatiw was appointed as Chief Technology Officer on June 1, 2021

Company’s compensation policy for directors includes quarterly

fees as well as stock options.

Annual director compensation will be $60,000 for the Chairman of the Board and Lead Independent Director,

$40,000 for directors with an additional $4,000 for additional committees.

In July 2020, the board of directors temporarily deferred

cash payments to its members.

We restored cash payments to directors in April 2021.

with the quarter ended September 30, 2021, the Company’s directors received one-half of their compensation in cash and the

remaining half in common stock.

During the years ended September 30, 2021, and 2020, the Company paid $220,000 and $170,000 in

board fees, respectively.

Employment Agreement

Company entered into an Employment Agreement with Andrew Borene (the

“Borene Employment Agreement”), our Chief Executive Officer, on November 25, 2019, pursuant to which he received a base annual

salary of $350,000, payable in accordance with the Company’s standard payroll schedule, and other customary benefits.

also received options to purchase up to 500,000 shares of the Company’s common stock (the “Borene Options”).

Options had an exercise price of $0.75 per share and were to vest as follows:

166,666 shares vest on November 26, 2020, 166,667 shares

vest on November 26, 2021, and 166,667 shares vest on November 26, 2022.

Additionally.

Borene received a signing bonus in the amount

of $150,000 which is payable in equal installments at the end of each of the first three months of his employment.

Andrew Borene’s employment with the Company was terminated on April 3, 2020.

The Company expects no future payments

Boren’s employment contract.

Employment Agreement

Company previously entered into an employment agreement with Albert

Carlson as its Chief Scientific Officer.

Carlson resigned from his positions as Chief Scientific Officer and director on December

The employment agreement was for a term of one year, commencing on September 1, 2015, and initially expired on August

31, 2016, with three one-year extensions.

The agreement provided that, in addition to receiving paid vacation in accordance with

the Company’s policies as well as other customary benefits and provisions, Dr.

Carlson received an annual base salary of $150,000.

If, at any time during the term of the agreement, Dr.

Carlson was terminated “without cause,” he was entitled to receive

a cash payment equal to the aggregate compensation payable to him during the remaining term of the Agreement.

During the year ended September

30, 2019, prior to his resignation, Dr.

Carlson’s annual base salary was increased to $300,000.

Omnibus Equity Incentive Plan

Company’s Board of Directors approved the 2021 Omnibus Equity

Incentive Plan (“2021 Plan”) on May 12, 2021, and it became effective upon approval by the Company’s

shareholders at the annual meeting on September 13, 2021.

The 2021 Plan is intended to align the interests of our stockholders

and the recipients of awards under the 2021 Plan, and to advance the Company’s interests by attracting and retaining directors,

officers, employees and other service providers and motivating them to act in our long-term best interests.

The material terms of the

2021 Plan are as follows:

The 2021 Plan terminates on September 12, 2031 (the day before the tenth anniversary of the adoption of the plan), unless terminated

earlier by our Board.

participants .

All officers, directors, employees, consultants, agents and independent contractors, and persons expected to become

officers, directors, employees, consultants, agents and independent contractors of our Company or any of our subsidiaries are eligible

to receive awards under the 2021 Plan.

The compensation committee of our Board will determine the participants under the 2021 Plan.

8,000,000 shares of common stock are available for awards granted under the 2021 Plan, subject to adjustment for stock

splits and other similar changes in capitalization.

The number of available shares will be reduced by the aggregate number of shares

that become subject to outstanding awards granted under the 2021 Plan.

To the extent that shares subject to an outstanding award granted

under the 2021 Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or

by reason of the settlement of an award in cash, then those shares will again be available under the 2021 Plan.

In addition, any shares

covered by an award that have been surrendered in connection with the payment of the award exercise or purchase price or in satisfaction

of tax withholding obligations incident to the grant, exercise, vesting or settlement of an award will be deemed not to have been issued

for purposes of determining the maximum number of shares which may be issued pursuant to all awards under the 2021 Plan.

Awards include options (non-qualified and incentive stock options) and restricted stock.

Administration .

The compensation committee will interpret and administer the 2021 Plan.

The compensation committee’s interpretation, construction

and administration of the 2021 Plan and all its determinations thereunder will be conclusive and binding on all persons.

compensation committee shall have the authority to determine the participants in the 2021 Plan, the form, amount and timing of any awards,

the performance goals, if any, and all other terms and conditions pertaining to any award.

The compensation committee may take any action

such that (i) any outstanding options become exercisable in part or in full, (ii) all or any portion of a restriction period on any restricted

stock will lapse, (iii) all or a portion of any performance period applicable to any performance-based award will lapse and (iv) any

performance measures applicable to any outstanding award will be deemed satisfied at the target level or any other level.

the terms of the 2021 Plan relating to grants to our executive officers and directors, the compensation committee may delegate some or

all of its powers and authority to the Chief Executive Officer or other executive officer as the compensation committee deems appropriate.

The 2021 Plan provides for the grant of stock options.

Stock options may be either tax-qualified incentive stock options

or non-qualified stock options.

The compensation committee will determine the terms and conditions to the exercisability of each option.

period for the exercise of a non-qualified stock option will be determined by the compensation committee provided that no option may

be exercised later than ten years after its date of grant.

The exercise price of a non-qualified stock option will not be less than 100%

of the fair market value of a share of our common stock on the date of grant.

incentive stock option will be exercisable for not more than 10 years after its date of grant, unless the optionee owns greater than

10% of the voting power of all shares of our capital stock, or a “ten percent holder,” in which case the option will be exercisable

for not more than five years after its date of grant.

The exercise price of an incentive stock option will not be less than the fair

market value of a share of our common stock on its date of grant, unless the optionee is a ten percent holder, in which case the option

exercise price will be the price required by the Internal Revenue Code of 1986, as amended, or the “Code,” currently 110%

of fair market value.

exercise, the option exercise price may be paid in cash, by the delivery of previously owned shares of our common stock, share withholding

or through a cashless exercise arrangement, as permitted by the applicable award agreement.

All of the terms relating to the exercise,

cancellation or other disposition of an option upon a termination of employment, whether by reason of disability, retirement, death or

any other reason, will be determined by the compensation committee.

compensation committee, without stockholder approval, may (i) reduce the exercise price of any previously granted option, or (ii) cancel

any previously granted option at a time when its exercise price exceeds the fair market value of the underlying shares, in exchange for

another option, or other award or for cash.

The 2021 Plan provides for the grant of stock awards.

The compensation committee may grant a stock award as a restricted

stock award and the compensation committee may determine that such award will be subject to the attainment of performance measures over

an established performance period.

All of the terms relating to the satisfaction of performance measures and the termination of a restriction

period, or the forfeiture and cancellation of a stock award upon a termination of employment, whether by reason of disability, retirement,

death or any other reason, will be determined by the compensation committee.

otherwise set forth in a restricted stock award agreement, the holder of shares of restricted stock will have rights as our stockholder,

including the right to vote and receive dividends with respect to the shares of restricted stock, except that distributions other than

regular cash dividends and regular cash dividends with respect to shares of restricted stock subject to performance-based vesting conditions

will be held by us and will be subject to the same restrictions as the restricted stock.

Under the 2021 Plan, the vesting or payment of performance-based awards will be subject to the satisfaction of certain performance

The performance goals applicable to a particular award will be determined by the compensation committee at the time of grant.

The performance goals may be one or more of the following corporate-wide or subsidiary, division, operating unit or individual measures,

stated in either absolute terms or relative terms.

With respect to non-employee directors, the maximum grant date fair value of shares that may be granted to an individual

non-employee director during any fiscal year of the Company is $150,000 in their first year of service and $120,000 thereafter.

or termination of the 2021 Plan .

Our Board may amend or terminate the 2021 Plan as it deems advisable, subject to any requirement

of stockholder approval required by law, rule or regulation.

In the event there is a change in control and/or the Company is a party to a merger or acquisition or reorganization

or Change in Control event or similar transaction, outstanding awards shall be subject to the merger agreement or other applicable transaction

Such agreement may provide, without limitation, that subject to the consummation of the applicable transaction, for the assumption

(or substitution) of outstanding awards by the surviving corporation or its parent, for their continuation by the Company (if the Company

is a surviving corporation), for accelerated vesting or for their cancellation with or without consideration, or for the mandatory exercise

or conversion of awards into shares and/or cash whether by net exercise or otherwise, in all cases without the consent of a participant

of the 2021 Plan.

Additionally,

in the event a change in control occurs and there is no assumption, substitution or continuation of awards, the compensation committee

in its discretion may provide that all awards shall vest and become exercisable as of immediately before such change in control.

compensation committee may also in its discretion include in an award agreement a requirement that unless approval under Section 280G

of the Code has been obtained, no acceleration of vesting shall occur with respect to an award to the extent that such acceleration would,

after taking into account any other payments in the nature of compensation to which the participant would have a right to receive from

the Company and any other person contingent upon the occurrence of such change in control, result in a “parachute payment”

as defined under Code Section 280G.

the 2021 Plan, a change of control will occur upon:

(i) the consummation of an acquisition, a merger or consolidation of the Company

with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or

surviving entity’s securities outstanding immediately after such acquisition, merger, consolidation or other reorganization is

owned by persons who in the aggregate owned less than 20% of the Company’s combined voting power represented by the Company’s

outstanding securities immediately prior to such acquisition, merger, consolidation or other reorganization;

(ii) A sale of more than

fifty percent (50%) of the outstanding shares of each class of capital stock of the Company to a person, entity or group other than a

person, entity or group affiliated with the Company, or (iii) he sale, transfer or other disposition of all or substantially all of the

Company’s assets to a person, entity or group other than a person, entity or group affiliated with the Company.

plan benefits .

The benefits that might be received by officers, employees and non-employee directors cannot be determined at this

All officers, employees and non-employee directors are eligible for consideration to participate in the 2021 Plan.

regarding executive compensation is incorporated herein by reference to the information included in the Company’s 2022 Proxy Statement

which will be filed with the Commission within 120 days after the end of the Company’s 2022 fiscal year.

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

following table sets forth certain information regarding beneficial ownership of our common stock as of December 17, 2021, by (i) each

person (or group of affiliated persons) who is known by us to own more than five percent (5%) of the outstanding shares of our common

stock, (ii) each director and executive officer, and (iii) all of our directors and executive officers as a group.

As of December 17,

2021, there were 82,927,311 shares of our common stock issued and outstanding.

as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock

owned by them, except to the extent that power may be shared with a spouse.

ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities.

purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock

that such person currently owns or has the right to acquire within 60 days of the date of this prospectus.

With respect to options and

warrants, this would include options and warrants that are currently exercisable within 60 days.

With respect to convertible securities,

this would include securities that are currently convertible within 60 days.

as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with

respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by such stockholders.

Unless otherwise indicated, the address for each director and executive officer listed is c/o Cipherloc Corporation, 6836 Bee Cave Road,

1, Suite 279, Austin, TX 78746.

of Beneficial Owners

Officers and Directors as a Group (6 persons)

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 the Company’s 2022 Proxy Statement which will be filed with the Commission within

120 days after the end of the Company’s 2022 fiscal year.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

following includes a summary of transactions during our fiscal years ended September 30, 2021 and September 30, 2020 to which we have

been a party, including transactions in which the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average

of our total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or, to

our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons

had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and

other arrangements, which are described elsewhere in this Annual Report on Form 10-K.

La Garza Settlement

August 28, 2020, we entered into a Settlement Agreement and Mutual General Release (the “Settlement”) with Michael De La

Garza, a former director of the Company.

The Settlement related to certain actions, including (i) Cipherloc Corporation vs.

La Garza, MSR, LLC, and James LaGanke, as Trustee of the Caramel Trust II, Civil Action No.

1:19-CV-01147-LY in the United States District

Court for the Western District of Texas, Austin Division, (ii) Cipherloc Corporation vs.

Michael De La Garza, Cause No.

D-1-GN-19-005253

in the 53 rd Judicial District Court of Travis County, Texas, and (iii) Michael De La Garza and Cipherloc, Inc.

Tom Wilkinson,

Anthony Ambrose, Manchester PR, LLC and Manchester Explorer, LP;

D-1-GN-19-004708 in the 53 rd Judicial District

Court of Travis County, Texas.

Under the Settlement, all of the foregoing actions were dismissed with prejudice.

Pursuant to the Settlement,

De La Garza, agreed to, among other things, (i) resign as a director of the Company and confirmed that he had no disagreements with

the Board of Directors, and (ii) return 13,137,757 shares of the Company’s common stock, $0.01 par value per share (the “Forfeited

Stock”), held by him to the Company’s treasury.

We agreed to pay Mr.

De La Garza an aggregate sum of $400,000 (the “Settlement

Amount”), payable as follows:

(A) $300,000 on or before ten (10) business days after the last to occur (the “Settlement Date”)

of (i) the execution of the Settlement by Mr.

De La Garza, (ii) actual receipt by the Company of the Forfeited Stock and consummation

of the deliveries contemplated by the Settlement, and (iii) the receipt by the Company of a completed Internal Revenue Service Form W-9

and (B) $25,000 on each of the four (4) succeeding quarterly anniversaries of the Settlement Date.

Notwithstanding

the foregoing, in the event that Mr.

De La Garza is not in compliance with the Settlement on any such payment date, then no payment shall

be due, and we will have the right to pursue any and all remedies against De La Garza including, without limitation, seeking the return

of all amounts paid.

In exchange for the consideration described above, and subject to the terms and conditions set forth in the Settlement,

the Company and Mr.

De La Garza mutually agreed to grant each other a general release.

Approval or Ratification of Transactions with Related Parties

Board of Directors reviews and approves transactions with directors, officers and holders of five percent or more of our voting securities

and their affiliates, each a related party.

The material facts as to a related party’s relationship or interest in the transaction

are disclosed to our Board of Directors prior to their consideration of such transaction.

Further, when stockholders are entitled to

vote on a transaction with a related party, the material facts of the related party’s relationship or interest in the transaction

are disclosed to the stockholders, who must approve the transaction in good faith.

The Company does not have a related party transactions

policy in place.

regarding certain relationships and related transactions and director independence is incorporated herein by reference to the information

included in the Company’s 2022 Proxy Statement which will be filed with the Commission within 120 days after the end of the Company’s

2022 fiscal year.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

aggregate fees billed to the Company by its principal accountants for each of the last two

fiscal years were as follows:

The aggregate fee billed by Briggs & Veselka Co for the audit of the Company’s annual financial statements were $83,200

for the year ended September 30, 2021.

The aggregate fees billed by Briggs & Veselka Co.

for the audit of the Company’s annual

financial statements were $83,200 for the year ended September 30, 2020.

Audit-Related

The aggregate fees billed by Briggs & Veselka Co., for assurance and related services that are reasonably related to the

performance of the audit or review of the Company’s financial statements for the fiscal years ended September 30, 2021 and 2020

that are not disclosed in the paragraph captioned “Audit Fees” above, were $0.00.

The aggregate fee billed by The Wenmohs Group for professional services rendered for tax compliance, tax advice and tax planning

for the fiscal year ended 2020 were $13,500.

The aggregate fee billed by The Wenmohs Group for professional services rendered for tax

compliance, tax advice and tax planning for the fiscal year ended 2020 were $12,250.

The aggregate fees billed by Briggs & Veselka Co.

for products and services, other than the services described in

the paragraphs “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” above for the fiscal years ended

September 30, 2021 and 2020 were $7,000 and $0.

Board of Directors has received and reviewed the written disclosures and the letter from the Company’s independent registered public

accounting firm required by Independence Standards Board Standard No.

1 (Independence Discussions with Audit Committees) and has discussed

with its auditors its independence from the Company.

The Board of Directors has considered whether the provision of services other than

audit services is compatible with maintaining auditor independence.

on the review and discussions referred to above, the Board of Directors approved the inclusion of the audited financial statements be

included in the Company’s Annual Report on Form 10-K for its 2020 fiscal year for filing with the SEC.

Board of Directors pre-approved all fees described above.

regarding principal accounting fees and services is incorporated herein by reference to the information included in the Company’s

2022 Proxy Statement which will be filed with the Commission within 120 days after the end of the Company’s 2022 fiscal year.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Agreement and Plan of Merger (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed September 13, 2021)

Certificate of Incorporation (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021).

Documents filed as part of this report:

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

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

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).

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).

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

of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference

to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on September 30, 2021).

Registration Rights Agreement dated March 31, 2021 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 8-K filed on April 8, 2021.

Employment Agreement of Dr.

Albert Carlson (incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K filed on September 4, 2015).?

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).

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).

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed herewith).

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).

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).

Form of Lockup Agreement between Cipherloc Corporation, a Texas corporation and the several purchasers of the Company’s Units (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 8, 2021).

Placement Agent Agreement between Cipherloc Corporation, a Texas corporation and Paulsen Investment Company, LLC related to the Company’s sole of Units incorporated by reference to Exhibit 10.4.

Indemnification Agreement by and between the Company and Paulson Investment Company, LLC (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on April 8, 2021).

Technology Partnership and Authorized Reseller Licensing Agreement between the Company and ECS Federal, LLC (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 filed on April 30, 2021)

Developer Agreement between the Company and Arnouse Digital Devices (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 filed on April 30, 2021)

Authorized Reseller/Developer Agreement with Arouse Digital Devices (incorporated by reference to Exhibit 10.21 to the Company’s Current Report on Form S-1 filed on April 30, 2021)

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).

Employment Agreement with Nick Hnatiw

Executive Employment Agreement with Ryan Polk (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 30, 2021)

2019 Stock Incentive Plan, Effective as of August 8, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 12, 2019.

Executive Offer Letter accepted by David Chasteen

Code of Ethics for Directors, Officers and Employees of Cipherloc and its Affiliates, dated August 8, 2019 (filed as Exhibit 14.1 to a Current Report on Form 8-K, filed on August 12, 2019)

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.

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.

Certification

Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification

Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Technology Partnership and Authorized Reseller Licensing Agreement between the Company and ECS Federal, LLC dated March 6, 2020 (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1 filed on April 30, 2021).

Authorized Reseller/Developer Agreement with Arnouse Digital Devices (incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 filed on April 30, 2021).

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).

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).

Independent Contractor Agreement by and between the Company and Sammy Davis (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed July 6, 2022).

Purchase Agreement between the Company and SideChannel, Inc.

and The Sellers Therein and Brian Haugli, as the Seller Representative (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 18, 2022).

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).

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

Subsidiaries of the Registrant.

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 (filed herewith).

Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certifications of Principal Executive

Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certifications

of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

XBRL Instance Document (filed herewith).

XBRL Taxonomy Extension Schema Document (filed herewith).

XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

XBRL Taxonomy Extension definition Linkbase Document (filed herewith).

Page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments) (filed herewith)

management or compensatory plan or arrangement

FORM 10-K SUMMARY

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

1 unchanged sentence

December 20, 2022

David Chasteen

Executive Officer, Director

and Chief Executive Officer, Director

December 20, 2022

Financial Officer

Financial Officer (Principal Financial and Accounting Officer)

accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company

1 unchanged sentence

December 20, 2022

David Chasteen

Executive Officer, Director

Chief Executive Officer, Director (principal executive officer)

December 20, 2022

4 unchanged sentences

December 20, 2022

Hugh Regan, Jr.

December 20, 2022

Deborah MacConnel

December 20, 2022

Kevin Powers.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures