Mr. Ian Paterson reports

PLURILOCK SECURITY INC. REPORTS FOURTH QUARTER AND FISCAL 2020 RESULTS

Plurilock Security Inc. has released its fourth quarter and fiscal 2020 financial results for the period ended Dec. 31, 2020. All dollar figures are stated in Canadian dollars, unless otherwise indicated.

COVID-19 impact on operations and financial position

In March, 2020, the World Health Organization declared the coronavirus (specifically identified as COVID-19) a global pandemic. The COVID-19 spread has had a limited impact on the company's operations. All employees have switched to working remotely during this time. The company has resources available to fulfill its customers' deliverables. The company does not expect that the impact of COVID-19 will materially affect its business and financial results. The company believes its response plan represents a positive contribution to society and the business community.

Fiscal 2020 financial highlights:

• Total revenue for the year ended Dec. 31, 2020, was $479,329 ($646,900 in 2019), a decrease of 26 per cent over the prior fiscal year.
• Licence revenue accounted for 68 per cent of total revenues for the year ended Dec. 31, 2020 (25 per cent in 2019) while government revenue accounted for 32 per cent of total revenues for the year ended Dec. 31, 2020 (75 per cent in 2019).
• Licence revenue was $326,322 for the year ended Dec. 31, 2020, compared with $158,669 in the prior fiscal year.
• Government revenue was $153,007 for the year ended Dec. 31, 2020, compared with $488,231 in the prior fiscal year.
• Gross margin was 83.6 per cent for the year ended Dec. 31, 2020, compared with 87.6 per cent in the prior fiscal year.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was negative $2,208,539 for the year ended Dec. 31, 2020, compared with negative $1,241,275 in the prior fiscal year.
• Cash used for operating activities for the year ended Dec. 31, 2020, was $1,823,439, compared with $1,365,955 in the prior fiscal year.
• Cash generated from financing activities for the year ended Dec. 31, 2020, was $3,436,922, compared with $1,100,179 in the prior fiscal year.
• Non-recurring listing costs and share-based compensation for the year ended Dec. 31, 2020, in accordance with the company's public listing on the TSX Venture Exchange on Sept. 24, 2020, were $1,557,016 and $787,004, respectively.

Fourth quarter fiscal 2020 operational highlights:

• On Oct. 14, 2020, the company announced the appointment of Gaetan Houle, with 35 years of security leadership experience, as a senior adviser.
• On Nov. 10, 2020, the company announced that it outsourced a federal sales agency, Government Sales Specialists LLC (GSS), to leverage and optimize Plurilock's existing federal government processes, assets and relationships in order to grow Plurilock's government sales funnel.
• On Nov. 18, 2020, the company announced the launch of a new product collaboration with prominent open-source identity and access management (IAM) software vendor, Gluu Inc.
• On Dec. 14, 2020, the company announced the successful completion of the first of four milestones of a recent $198,000 (U.S.) contract with the U.S. Department of Homeland Security (DHS) Science and Technology Directorate's Silicon Valley innovation program (S&T SVIP). Under the milestone, Plurilock received $70,000 (U.S.) in funds.
• On Dec. 15, 2020, the company announced new product features and enterprise-oriented infrastructure to Plurilock's family of identity-centric cybersecurity products, including Plurilock's Adapt and Defend.
• On Dec. 16, 2020, the company announced the appointment of Chris Pierce, with more than 30 years of success across the military, civil, intelligence, commercial and international markets focused on management and technology consulting, as a senior adviser.
• On Dec. 18, 2020, the company announced that a major U.S. financial services firm had awarded a $42,000 (U.S.) annual recurring contract to Plurilock to deploy the company's core authentication solutions.

"Fiscal 2020 was a difficult year across the industry due to the global pandemic," said Ian L. Paterson, chief executive officer of Plurilock. "Despite the headwinds of COVID-19, we were able to achieve our primary strategic objectives, which included a successful listing of Plurilock on the TSX Venture Exchange, capitalizing the company with $3.4-million in net financing proceeds, and laying the foundation for both organic and inorganic future growth. Most importantly, we were also able to grow our product licensing revenue by roughly 206 per cent and increase our licence revenue as a percentage of total revenue to 68 per cent in fiscal 2020, from 25 per cent in fiscal 2019. Furthermore, we have made several key additions to the team with notable cybersecurity leaders, which makes us well positioned to capture new opportunities in this global market in 2021."

Subsequent to the year-end:

• On Jan. 8, 2021, the company secured a contract renewal with a U.S. regional bank for which the regional bank will continue to gain access to the company's core multifactor authentication solutions.
• On Jan. 13, 2021, the company announced the filing of a U.S. provisional patent application that covers user authentication during remote work sessions with time-based data.
• On Jan. 21, 2021, the company listed its shares on the OTCQB Venture Exchange.
• On Jan. 29, 2021, the company announced a reseller agreement with a United Kingdom-based distributor of cyberdefence solutions, Tantallon Ltd., to deliver the company's solutions to a network of financial institutions outside North America.
• On Feb. 4, 2021, the company announced the appointment of retired U.S. Navy vice-admiral, Jan E. Tighe, who is currently an independent director on the board of Goldman Sachs, as a member of the company's advisory board.
• On Feb. 26, 2021, the company closed its second private placement and raised over $5.1-million in aggregate gross proceeds from the company's combined private placements.
• On March 1, 2021, the company obtained DTC eligibility.
• On March 11, 2021, the company completed its second milestone of a $198,000 (U.S.) contract with the U.S. DHS.
• On April 1, 2021, the company completed its acquisition of Aurora System Consulting Inc., a provider of advanced cybersecurity technology and services, based in California.

"Since the beginning of 2021, we have advanced our growth strategy, which is evidenced by Plurilock's latest operational developments in recent months," continued Mr. Paterson. "Our most notable accomplishment includes the recent acquisition of Aurora Systems Consulting Inc., a leading provider of cybersecurity solutions with revenues of approximately $28.1-million (U.S.) in 2020 and a client base that comprises over 140 top-tier clients.

"As the global economy continues to adapt to an increasing number of security threats, our focus remains on expanding our operations across North America in order to deliver our advanced high-margin software cybersecurity solutions to organizations that require safe remote work access for their employees and staff."

A summary of key financial metrics is provided in the attached table.

Non-IFRS (international financial reporting standards) measures

This news release presents information about EBITDA and adjusted EBITDA, both of which are non-IFRS financial measures, to provide supplementary information about operating performance.

Annual filings

The management's discussion and analysis, consolidated financial statements, and the notes thereto, for the fiscal period ended Dec. 31, 2020, can be obtained from Plurilock's corporate website and under Plurilock's SEDAR profile.

About Plurilock Security Inc.

Plurilock is a cybersecurity company that provides advanced and continuous authentication for standards and regulatory compliance. Plurilock's software leverages state-of-the-art behavioural-biometric, environmental and contextual technologies to provide invisible, adaptive and risk-based multifactor authentication (MFA) solutions with the lowest possible cost and complexity. Plurilock enables organizations to compute safely and with peace of mind.

We seek Safe Harbor.