Mr. Andrew Cheung reports

01 COMMUNIQUE PROVIDES UPDATE ON BUSINESS DEVELOPMENTS AND SECOND QUARTER FISCAL 2023 RESULTS

01 Communique Laboratory Inc. has released the company's second quarter fiscal 2023 results, which ended April 30, 2023.

Andrew Cheung, chief executive officer of the company, commented: "Cybercrime continues to peak and the rapid development in quantum computing intensifies the existing cybersecurity threats by potentially rendering current encryption systems obsolete. I feel confident that IronCAP will accomplish the task of providing protection against bad actors using quantum computers. To this end, just yesterday we released what we believe to be the world's first commercially available quantum-safe enterprise level e-mail security product -- IronCAP X v.2.0."

Mr. Cheung continued: "Now that the major portion of our development efforts have been completed, going forward our efforts will be focused on integrating applications and feature enhancements for our partners. This allows us the ability to reduce our operating expenses. As we move forward, we will continue to monitor our operating expenses keeping them in line with our recurring revenue."

Operational highlights:

• On June 6 the company's quantum-safe blockchain end points protection patent has been officially issued in the United States. The U.S. patent No. is 11,669,833 and can be found on the USPTO (U.S. Patent and Trademark Office) site.
• The company has received a notice of allowance for its Japanese patent application No. 2020-534978 about the IronCAP Modern McEliece code-based post-quantum cryptography technology. The official patent issuance is in the process.
• Earlier in fiscal 2023 the completion of the integration of IronCAP into one of the company's partners' military-grade hardware security modules (HSM) made postquantum cryptography functionality seamless. Joint marketing activities are now in process with the first being the company's participation at the RSA Conference held in San Francisco between April 24 to April 27. As part of the company's partner's PQC Palooza event 01 together promoted postquantum cryptography to enterprise customers. The event results were very encouraging with expectations of new partnerships to come.
• On June 14 announced the release of IronCAP X v2.0, which the company believes to be the world's first commercially available quantum-safe end-to-end e-mail security product for enterprises of all sizes.
• Global partners have been signed and integration efforts have begun with the goal to capitalize on the quantum-readiness transformation market embraced by enterprises of all sizes internationally.

Financial highlights:

• Revenue for the second quarter was $127,782 (2022 -- $357,594) a $229,812 decrease. During the second quarter 2022 one-time development fees were received for enhancements to the company's remote access product as well as a proof-of-concept project for injecting quantum-safety into the Solana blockchain. The remote access enhancements contributed to an increase in subscriber revenue for 2023, year over year, from the company's remote access business which is marketed on a subscription fee basis with recurring royalties.
• The loss for the second quarter was $187,292 (2022 -- $82,879). The adjusted loss, which excludes stock-based compensation and depreciation which are non-cash expenses, for the second quarter was $123,091 (2022 -- $40,315). The company completed the quarter with $436,188 of cash and a GIC.
• Cash operating expenses which exclude stock-based compensation and depreciation were $240,239 (2022 -- $374,430) a reduction of $134,191 primarily the result of:
  • Completion of a number of R&D (research and development) projects which included enhancements to the company's remote access product, integration of IronCAP into the company's partners' HSM, and the integration of IronCAP into existing public blockchains has contributed to the reduction in development expenses for fiscal 2023.
  • Contributing factors to the lower selling, general and administrative expenses included costs incurred in fiscal 2022 for non-recurring legal expenses pertaining to the prosecution of patent applications including the patent received in fiscal 2023 as well as investor relations campaigns that were completed in fiscal 2022.
  • As a result, the company has been able to reduce cash operating expenses with a goal to keep them in line with the continuing recurring revenue.

Conference call reminder and information

01 Communique will host a live teleconference allowing for questions and answers later today at 10 a.m. ET (June 15, 2023) to discuss the company's results as well as providing an update on the business prospects for IronCAP and IronCAP X.

Dial-in:

Within Canada:  647-374-4685 or 647-558-0588

Within the U.S.:  646-558-8656 or 669-900-9128

Webinar ID when prompted:  832 7263 0612

Pass code:  286832739

About 01 Communique Laboratory Inc.

Established in 1992, 01 Communique has always been at the forefront of technology. The company's cybersecurity business unit focuses on postquantum cybersecurity with the development of its IronCAP product line. IronCAP's technologies are patent-protected in the U.S. by its patents No. 11,271,715 and No. 11,669,833. The company's remote access business unit provides its customers with a suite of secure remote access services and products under its I'm InTouch and I'm OnCall product offerings. The remote access offerings are protected in the U.S. by its patents No. 6,928,479/No. 6,938,076/No. 8,234,701; in Canada by its patents No. 2,309,398/No. 2,524,039; and in Japan by its patent No. 4,875,094.

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