SideChannel (SDCH) posts lower Q1 revenue, deeper loss and tight cash

Rhea-AI Filing Summary

SideChannel, Inc. reported results for the first quarter of FY 2026 and detailed recent shareholder actions. Revenue was $1.77 million, down from $1.91 million a year earlier, while gross margin improved to 51.2% from 45.8%. Net loss widened to $396 thousand, or $0.09 per share, compared with $195 thousand, or $0.04 per share, as operating expenses rose 21.2%.

Cash, cash equivalents, and short-term investments fell by $570 thousand to $595 thousand at December 31, 2025. Management plans to reduce annual operating costs by $930 thousand to extend the cash runway and support marketing for its Enclave cybersecurity product. The company completed a 1‑for‑52 reverse stock split, elected five directors, ratified its independent auditor, and appointed CEO Brian Haugli as Chairman of the Board.

Positive

• None.

Negative

• Cash position and losses are concerning. Cash, cash equivalents, and short-term investments fell by $570 thousand to $595 thousand, while net loss more than doubled to $396 thousand, increasing pressure on liquidity despite planned $930 thousand in annual cost reductions.

Insights

Equity analyst focused on micro-cap technology and cash flow

Losses widened and cash fell sharply, pressuring SideChannel’s near‑term flexibility.

SideChannel posted Q1 FY 2026 revenue of $1.774M, down 7.0%, but lifted gross margin to 51.2% from 45.8%. The improvement reflects better economics per dollar of sales, yet total operating expenses jumped 21.2%, pushing the operating loss deeper.

Net loss more than doubled to $396K, or $0.09 per share, compared with $195K and $0.04. Cash, cash equivalents, and short‑term investments dropped by $570K to $595K at December 31, 2025, while total assets declined to $2.98M. This balance limits room for prolonged losses.

Management plans to cut annual operating costs by $930K during the rest of FY 2026 to extend the cash runway and fund Enclave marketing. The recently completed 1‑for‑52 reverse split and governance moves (director elections, auditor ratification, CEO becoming Chairman) are structural steps, but the key variables remain revenue stabilization and cash usage in upcoming quarters.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 12, 2026

SideChannel, Inc.

(Exact name of registrant as specified in its charter)

Delaware		000-28745		86-0837077
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

146 Main Street, Suite 405, Worcester, MA 01608

(Address of principal executive offices) (Zip Code)

(508) 925-0114

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On February 17, 2026, SideChannel, Inc. (the “Company”) issued a press release providing information about its operating and financial results for the quarter ended December 31, 2025. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

The information included in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 5.07. Submission of Matters to a Vote of Security Holders.

On February 12, 2026, the Company held an annual meeting of stockholders (the “2026 Annual Meeting”) to vote on the following matters:

	●	Proposal No. 1. – Election of five members to the Company’s Board of Directors (“Board”); and
	●	Proposal No. 3. – Ratification of the appointment of RBSM, LLP as our independent registered public accounting firm for our fiscal year ending September 30, 2026.

As previously disclosed:

	(i)	Proposal No. 2 (relating to the amendment of the Company’s certificate of incorporation, as amended, to effectuate a reverse stock split of the Company’s outstanding shares of common stock, at a ratio of no less than 1-for-2 and no more than 1-for-200, with such ratio to be determined by the Board in its sole discretion), was withdrawn prior to the 2026 Annual Meeting; and
	(ii)	After the close of trading on January 22, 2026, the Company effectuated a 1-for-52 reverse stock split of the Company’s outstanding shares of common stock (the “Reverse Split”).

The Reverse Split was previously approved by stockholders at the Company’s annual meeting of stockholders held on February 12, 2025. The Reverse Split did not affect the voting rights of stockholders, the number of votes entitled to be cast by any stockholder at the 2026 Annual Meeting, or the manner in which votes were tabulated by the Company’s transfer agent. For clarity and consistency with the Company’s current capital structure, the Company has disclosed share information in this Current Report on Form 8-K as adjusted to reflect the Reverse Split.

There were 231,229,054 (4,446,713 on a post-Reverse Split basis) shares of common stock outstanding as of December 10, 2025, the record date for determination of stockholders entitled to notice of, and to vote at, the 2026 Annual Meeting. At the 2026 Annual Meeting, 180,536,044 (3,471,847  on a post-Reverse Split basis) shares of common stock, representing 78.08% of the eligible voting shares, were present in person or by proxy. Accordingly, a quorum was present at the 2026 Annual Meeting.

Proposal No. 1 – Election of Directors

Stockholders voted to elect the five nominees for director named below to the Board, in accordance with the voting results below:

		For								Withhold								Broker Non-Votes
Nominee		Pre- Reverse Split				Post- Reverse Split				Pre- Reverse Split				Post- Reverse Split				Pre- Reverse Split				Post- Reverse Split
Robert Brown			146,465,713				2,816,649				543,212				10,447				33,527,119				644,753
Brian Haugli			146,395,713				2,815,303				613,212				11,793				33,527,119				644,753
Nick Hnatiw			146,469,546				2,816,723				539,379				10,373				33,527,119				644,753
Hugh Regan, Jr.			146,449,349				2,816,334				559,576				10,762				33,527,119				644,753
Anna Seacat			146,445,071				2,816,252				563,854				10,844				33,527,119				644,753

Proposal No. 3 – Ratification of Independent Registered Public Accounting Firm

Stockholders voted to approve ratification of the appointment of RBSM, LLP as the Company’s independent registered public accounting firm for the Company’s fiscal year ending September 30, 2026, in accordance with the voting results below:

For								Against								Abstain								Broker Non-Votes
Pre- Reverse Split				Post- Reverse Split				Pre- Reverse Split				Post- Reverse Split				Pre- Reverse Split				Post- Reverse Split				Pre- Reverse Split				Post- Reverse Split
	179,892,548				3,459,473				462,674				8,898				180,822				3,478				-				-

Item 9.01. Financial Statements and Exhibits.

(a) Exhibits.

Exhibit No.		Description
99.1		Press release of the registrant issued on February 17, 2026.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SideChannel, Inc.
Date: February 17, 2026	By:	/s/ Brian Haugli
	Name:	Brian Haugli
	Title:	Chief Executive Officer

Exhibit 99.1

SideChannel Reports FY 2026 First Quarter Results

Financial results conference call on Tuesday, February 17 @ 4:30 P.M. ET

WORCESTER, MA / ACCESSWIRE / February 17, 2026 / SideChannel, Inc. (OTCQB:SDCH) (“SideChannel” or the “Company”), a leading provider of cybersecurity services and technology to emerging to enterprise companies, today announced its financial results for the first quarter of the fiscal year ending September 30, 2026 (“FY 2026”).

FY 2026 First Quarter Highlights

	●	Revenue of $1.8 million, representing $134 thousand, or 7.0%, less than fiscal year ended September 30, 2025 (“FY 2025”) first quarter revenue of $1.9 million.
	●	Gross margin of 51.2%, 540 basis points higher than 45.8% gross margin for FY 2025.
	●	Operating expenses increased $229 thousand, or 21.2%, compared to FY 2025.
	●	Net loss of $396 thousand, or $0.09 per share, versus net loss of $195 thousand, or $0.04 per share, in FY 2025.
	●	Trailing twelve-month revenue retention of 65.2% as of December 31, 2025, compared to 63.6% as of September 30, 2025.
	●	Cash, cash equivalents, and short-term investments decreased by $570 thousand from September 30, 2025, to an ending balance of $595 thousand at December 31, 2025.

SideChannel will host a conference call on February 17, 2026, at 4:30 P.M. Eastern Time to discuss its FY 2026 first quarter results and provide an update on the Company’s initiatives.

Management Comments

Commenting on the results for the quarter ended December 31, 2025, Brian Haugli, SideChannel’s President, Chief Executive Officer and Chairman of the Board, said, “Jamie Wolf, our Chief Marketing Officer, is providing excellent leadership to our Enclave marketing campaign. Her presence fills a gap we identified in effectively telling the Enclave story to our target market. Ms. Wolf is being supported by Anna Seacat, a recent addition to our Board. Our increased participation in strategic partnerships, relevant industry events, and speaking opportunities have been the catalysts for potential customers exploring how Enclave solves critical business challenges, such as business email compromise and certificate lifecycle management.”

Mr. Haugli continued, “We have been addressing our declining revenue through improvements in our marketing and selling personnel and processes. It will take time for these improvements to translate into revenue impacts, but we are seeing the precursors to revenue growth in our marketing KPIs and in our sales pipeline. We expect to reduce our annual operating costs by $930 thousand during the balance of FY 2026 to extend our cash runway and bolster our investments in Enclave marketing.”

Haugli Appointed Chairman

Mr. Haugli was appointed Chairman of the Board effective February 12, 2026. Mr. Haugli succeeds Deborah MacConnel, who previously announced her retirement from the Board. Ms. MacConnel presided over the Board through the Company’s 2026 Annual Meeting of stockholders held on February 12, 2026. The Board also appointed Ms. Seacat as a member of the Audit Committee, effective February 12, 2026.

CALL INFORMATION

Date:	Tuesday February 17, 2026, at 4:30 P.M. Eastern Time
Dial In:	Toll Free: 888-506-0062
	International: 973-528-0011
	Participant Access Code: 835324

A webcast of the call will also be available: https://www.webcaster5.com/Webcast/Page/2071/53378

Participants may register in advance for the call using the webcast link.

The call will include management remarks and a live question and answer session. Questions may be submitted prior to the meeting using ir@sidechannel.com.

The Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2025, is expected to be filed today with the Securities and Exchange Commission and will be available at https://investors.sidechannel.com/sec-filings.

Financial tables follow.

SIDECHANNEL, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

		Three Months Ended
		December 31,
		2025				2024
Revenues		$	1,774			$	1,908
Cost of revenues			865				1,034
Gross profit			909				874
Operating expenses
General and administrative			677				660
Selling and marketing			457				267
Research and development			175				153
Total operating expenses			1,309				1,080
Operating loss			(400	)			(206	)
Other income, net			7				13
Net loss before income tax expense			(393	)			(193	)
Income tax expense			3				2
Net loss		$	(396	)		$	(195	)
Net loss per common share – basic and diluted		$	(0.09	)		$	(0.04	)
Weighted average common shares outstanding – basic and diluted			4,446,713				4,346,574

The Company’s weighted average common shares outstanding and net loss per common share – basic and diluted for the three months ended December 31, 2025, and December 31, 2024, have been retroactively restated for the 52:1 reverse stock split that became effective on January 22, 2026.

SIDECHANNEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

		December 31, 2025				September 30, 2025
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	495			$	1,065
Short-term investments			100				100
Accounts receivable, net			686				553
Prepaid expenses and other current assets			328				374
Total current assets			1,609				2,092
Fixed assets			13				17
Goodwill			1,356				1,356
Total assets		$	2,978			$	3,465
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities		$	445			$	515
Deferred revenue			677				801
Income taxes payable			9				6
Total current liabilities			1,131				1,322
Total liabilities			1,131				1,322
Commitments and contingencies
Common stock, $0.001 par value, 681,000,000 shares authorized; 4,446,713 shares issued and outstanding as of December 31, 2025, and September 30, 2025,			4				4
Additional paid-in capital			22,974				22,874
Accumulated deficit			(21,131	)			(20,735	)
Total stockholders’ equity			1,847				2,143
Total liabilities and stockholders’ equity		$	2,978			$	3,465

About SideChannel

Our mission is to make cybersecurity simple and accessible for mid-market and emerging companies, a market that we believe is currently underserved. We believe that our cybersecurity product and service offerings provide cybersecurity and privacy risk management solutions for our customers. We anticipate that our target customers will continue to need cost-effective security solutions. We continue to expand our catalogue of services and solutions to address the cybersecurity needs of our customers, including virtual Chief Information Security Officer (“vCISO”), cyber program strategy, zero trust, third-party risk management, compliance readiness, cloud security services, privacy, threat intelligence, managed end-point security solutions, and cybersecurity awareness.

We are marketing and selling Enclave, a proprietary software product that simplifies important cybersecurity tasks to achieve “microsegmentation.” By combining zero trust network access with certificate management and machine identity, Enclave seamlessly creates a unified security architecture that eliminates traditional network vulnerabilities. This integration enables IT teams to enforce precise access policies based on verified machine identities. Certificate-based identities allow a simplified management for any certificate-based communication, while the zero trust framework continuously validates every connection attempt. This powerful combination delivers robust security without the typical management overhead, allowing organizations to implement sophisticated microsegmentation strategies with remarkable simplicity and minimal resource requirements. Learn more at sidechannel.com. 

Investors and shareholders are encouraged to receive press releases and industry updates by subscribing to the investor email newsletter and following SideChannel on X and LinkedIn.

You may contact us at:

SideChannel

146 Main Street, Suite 405

Worcester, MA 01608

Investor Contact

Ryan Polk

ir@sidechannel.com

Forward-Looking Statements 

This press release may contain forward-looking statements, including information about management’s view of SideChannel’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes”, “hopes”, “expects”, “intends”, “plans”, “anticipates”, “potential”, “could”, “should” or “may”, and similar conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, among others, statements relating to future sales, earnings, cash flows, results of operations, uses of cash and other measures of financial performance.

Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that may cause SideChannel’s actual results and financial condition to differ materially from those expressed or implied in the forward-looking statements. These risk factors include, but are not limited to: that we have incurred net losses since inception, our need for additional funding, the substantial doubt about our ability to continue as a going concern, and the terms of any future funding we raise; our ability to grow revenues from our Enclave product; our dependence on current management and our ability to attract and retain qualified employees; competition for our products; our ability to develop and successfully introduce new products, improve current products and innovate; unpredictability in our operating results; our ability to retain existing licensees and add new licensees; our ability to manage our growth; our ability to protect our intellectual property (IP), enforce our IP rights and defend against claims that we infringed on the IP of others; the risk associated with the concentration of our cash in financial institutions at levels above the amount protected by FDIC insurance; and other risk factors included from time to time in documents we file with the Securities and Exchange Commission, including, but not limited to, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These reports are available at www.sec.gov.

Other unknown or unpredictable factors also could have material adverse effects that could cause actual results to differ materially from those projected or represented in the forward-looking statements. Further, factors that we do not presently deem material as of the date of this release may become material in the future. The forward-looking statements included in this press release are made only as of the date hereof. SideChannel cannot guarantee future results, levels of activity, performance, or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SideChannel undertakes no obligation to update these forward-looking statements after the date of this release, except as required by law, nor any obligation to update or correct information prepared by third parties. 

FAQ

How did SideChannel (SDCH) perform financially in Q1 FY 2026?

SideChannel reported Q1 FY 2026 revenue of $1.77 million, down from $1.91 million a year earlier. Net loss increased to $396 thousand, or $0.09 per share, compared with $195 thousand, or $0.04 per share, in the prior-year quarter.

What happened to SideChannel (SDCH) gross margin and expenses this quarter?

Gross margin improved to 51.2% from 45.8%, indicating better profitability per dollar of revenue. However, operating expenses increased 21.2%, rising by $229 thousand, which contributed to a larger operating loss and offset the benefit of the stronger gross margin.

What is SideChannel’s (SDCH) current cash position and how did it change?

As of December 31, 2025, SideChannel had $595 thousand in cash, cash equivalents, and short-term investments. This represents a decline of $570 thousand from September 30, 2025, highlighting significant cash usage over the quarter and a relatively limited liquidity cushion.

What cost-saving measures did SideChannel (SDCH) announce for FY 2026?

Management expects to reduce annual operating costs by $930 thousand during the remainder of FY 2026. These planned reductions are intended to extend the company’s cash runway while continuing to support marketing and sales initiatives for its Enclave cybersecurity product and related services.

Did SideChannel (SDCH) change its capital structure with a reverse stock split?

Yes. After trading closed on January 22, 2026, SideChannel implemented a 1‑for‑52 reverse stock split of its outstanding common shares. The company restated share counts and per-share data to reflect this split, while stating that voting rights and vote tabulation were not affected.

What corporate governance actions were approved at SideChannel’s 2026 Annual Meeting?

Stockholders elected five directors to the Board and approved the ratification of the company’s independent registered public accounting firm for the fiscal year ending September 30, 2026. Separately, CEO Brian Haugli was appointed Chairman of the Board effective February 12, 2026.

How is SideChannel (SDCH) positioning its Enclave cybersecurity product?

SideChannel highlights Enclave as a proprietary cybersecurity solution focused on microsegmentation, combining zero trust network access, certificate management, and machine identity. Management emphasizes marketing efforts, strategic partnerships, and industry events to drive adoption and sees Enclave as central to addressing customers’ cybersecurity and business challenges.

Filing Exhibits & Attachments

4 documents

Press Releases

• EX-99.1 EX-99.1 56.7 KB

Other Documents

• EX-101 XBRL SCHEMA FILE 3.0 KB
• EX-101 XBRL LABEL FILE 33.4 KB
• EX-101 XBRL PRESENTATION FILE 21.8 KB