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Item 9A. Controls and Procedures

2025-12-18 compared with 2024-12-13 · 76 added, 98 removed, 128 unchanged (58% of the section changed)

14 unchanged sentences

of Disclosure Controls and Procedures

of September 30, 2024, 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).

and CFO have concluded, based upon the evaluation described above, that, as of September 30, 2024, our disclosure controls and procedures

were not effective at the reasonable assurance level because of the material weaknesses discussed below.

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 weakness 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 GAAP.

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.

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is

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connection with the preparation of our audited financial statements for the year ended September 30, 2023, we identified material weaknesses

in our internal controls over financial reporting, as of September 30, 2023.

These material weaknesses had not been fully remediated

as of September 30, 2024.

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,

2 unchanged sentences

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.

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

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.

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;

had not developed and effectively communicated to our employees our accounting policies and procedures, which resulted in inconsistent

Since these entity level programs have a pervasive effect across the organization, management has determined that these

circumstances constitute a material weakness;

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.

we did not design and maintain formal accounting policies, processes and controls related to complex transactions necessary for an

effective financial reporting process;

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.

management is actively engaged and committed to taking the steps necessary to remediate the control deficiencies that constituted the

material weaknesses.

During fiscal year 2024, we made the following enhancement to our control environment:

We continued documenting

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;

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.

remediation activities will continue during fiscal year 2026.

In addition to the above actions, we expect to engage in additional activities,

including, but not limited to:

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 GAAP, and to assist us with documenting and

assessing our accounting policies and procedures until we have sufficient technical accounting resources;

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;

In addition to the above actions, additional activities may include:

additional qualified accounting staff to enable additional separation of duties;

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;

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.

continue to enhance corporate oversight over process-level controls and structures to ensure that there is appropriate assignment of

12 unchanged sentences

Annual Report on Internal Control over Financial Reporting

are engaged in the process of design and implementation of our internal control over financial reporting in a manner commensurate with

the scale of our operations subsequent to the Business Combination, including the enhancement of our internal and external technical

accounting resources (as well as to address the material weaknesses discussed above).

However, the design of internal control over financial

reporting for our company post-business combination has required and will continue to require significant time and resources from management

and other personnel.

As a result, management was unable, without incurring unreasonable effort or expense to fully assess our internal

control over financial reporting as of September 30, 2024.

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

information set forth under “Material Weaknesses” above is incorporated herein by reference.

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

3 unchanged sentences

We are continuing

to take steps to remediate the material weakness in our internal control over financial reporting, as discussed above.

to take steps to remediate the material weaknesses in our internal control over financial reporting, as discussed above.

Limitation on the Effectiveness of Internal Control

6 unchanged sentences

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.

firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.

OTHER INFORMATION

4 unchanged sentences

Meeting of Stockholders which will be filed with the SEC within 120 days after the end of our fiscal year 2025.

Company has adopted a Code of Ethics that applies to all of our directors, officers and employees, including our Chief Executive Officer

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.

6 unchanged sentences

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

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.

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 2024.

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.

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 2024.

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.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

filed as part of this report:

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.

The following

exhibits are filed as a 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).

3 unchanged sentences

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).

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

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).

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

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

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

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).

1 unchanged sentence

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).

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).

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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).

SideChannel Insider Trading Policy adopted on March 14, 2024.

Subsidiaries of the Registrant.

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

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

Inline XBRL Instance Document.