01 Quantum Inc. — Interim / Quarterly Report 2020

Sep 10, 2020

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01 Communique Provides Quarterly Update on Business Developments and Third Quarter Fiscal 2020 Results

TORONTO, ON – September 10, 2020. 01 Communique Laboratory Inc. (the "Company") (ONE:TSX-V) is pleased to report that the Company made significant developments during the Third Quarter with:

• the signing of new business partnerships to market and sell IronCAP products,

• the release of IronCAP X v1.1 incorporating the technology in the June 2020 patent application,

• increased revenue resulting in close to breakeven financial results, and

• added capital to allow the Company to allot a further $938,000 to continue advancing the growth of the Company’s business and the development of products based on IronCAP technology.

The Company is continuing with sales and marketing activities to commercialize the recently released IronCAP X v1.1 and build partnerships with companies for the integration of the IronCAP API with third party applications.

Andrew Cheung, 01 Communique CEO, stated, ”We are pleased with our new business partnership arrangements that are showcasing our IronCAP products. As we are focused on the growth of our business, the Company has made additional funds available to further advance our business and product marketing strategy.” Mr. Cheung further stated, “We are seeing the success of our marketing activities through the substantial increase in usage in our remote access products, particularly in Japan with DoMobile. As the trend towards remote work continues due to the coronavirus pandemic, we anticipate that our remote access business will continue to show financial gains.”

Business Development Highlights:

Business development activities have resulted in the signing of new partnerships during the third quarter with more agreements anticipated:

• In July, the Company entered into a Partnership Agreement with a global technology and system integration company headquartered in Montreal, Quebec. Under the agreement, 01 Communique would provide tools to showcase the strength of our IronCAP cryptographic system designed to ensure safety against cyber-attacks from not only the conventional world of computers today but also against future attacks from quantum computers.

• Also, in July the Company entered into a partnership agreement with leading Canadian cybersecurity firm Privacy Horizon Inc. (“Privacy Horizon” or “PHI”) to sell IronCAP products. PHI enables organizations to build privacy and security controls more quickly, and IronCAP products are designed to protect users from cyberattacks and personal information breaches.

In June the Company was issued a receipt for its U.S. Patent Application No.16/893,709 for a Cryptographic System and Method that facilitates sending encrypted emails to a recipient. In August IronCAP X v1.1 was released utilizing the June 9th patent application, offering a personal usage email encryption with a "seamless invitation" to automatically insert an invitation to non-IronCAP-X recipients to join IronCAP X and read the encrypted message. The end-to-end encryption of emails in IronCAP X is designed to offer complete protection and privacy for all our emails; including attachments.

During the Third Quarter, the Company’s I'm InTouch remote access service user numbers have been on the rise, especially in Japan where it is marketed as DoMobile. As many companies have moved towards remote work in response to the coronavirus pandemic, this trend is expected to continue to show an increase in revenue.

In the Third Quarter, the Company strengthened its balance sheet with the completion of a non-brokered private placement of units ("Units"). Pursuant to the offering the Company issued a total of 1,683,334 Units raising aggregate gross proceeds of $202,000. Each Unit was issued at a price $0.12 and consists of one common share in the capital of the Company (a "Common Share") and one-half of one common share purchase warrant.

The Company had $221,180 of cash and cash equivalents and GIC as at July 31. Subsequent to the end of the quarter warrants and options were exercised raising additional proceeds of $717,000. Combined with the cash equivalents and GIC on hand at July 31[st] the Company has $938,000 of cash available to fund the growth of the Company.

Third Quarter 2020 Fiscal Results

The Company reported a loss for its third quarter 2020, which ended July 31, 2020 of $39,816 compared to a loss in 2019 of $168,899. The Company reduced its adjusted loss for the quarter by $121,748 from $136,576 in 2019 to $14,828 for the third quarter 2020. The adjusted loss excludes stock-based compensation and depreciation which are non-cash expenses.

Revenue for the quarter was $235,160 compared to $77,555 in 2019 an increase of $157,605 a result primarily of the increase in business activity in Japan where the Company’s partner, Hitachi Business Solution Creates Ltd. markets the Company’s remote access service.

The cash operating expenses, which excludes stock-based compensation, were $206,882 (2019 - $190,058) an increase of $17,118. The Company continues to make an investment in the development of products based on the IronCAP technology. In addition, the Company is executing sales and marketing activities to commercialize the recently released IronCAP X as well as continuing in efforts to build partnerships with companies for the integration of the IronCAP API with third party applications.

About IronCAP and IronCAP X:

IronCAP is at the forefront of the cyber security market and is designed to protect our customers from cyberattacks. IronCAP’s patent-pending cryptographic system is designed to protect users and enterprises against the ever-evolving illegitimate and malicious means of gaining access to their data today as well as in the future with the introduction of powerful quantum computers. Based on improved Goppa code-based encryption it is designed to be faster and more secure than current standards. It operates on conventional computer systems, so users are protected today while being secure enough to safeguard against future attacks from the world of quantum computers. An IronCAP API is available which allows vendors of a wide variety of vertical applications to easily transform their products to ensure their customers are safe from cyber-attacks today and from quantum computers in the future.

IronCAP X, a new cybersecurity product for email/file encryption, incorporating our patent-pending technology was made available for commercial use on April 23, 2020. The new product has two major differentiations from what is in the market today. Firstly, many offerings in today’s market store users secured emails on email-servers for recipients to read, making email-servers a central target of cyber-attack. Our new product, on the other hand, delivers each encrypted message end-to-end to the recipients such that only the intended recipients can decrypt and read the message. Consumer’s individual messages are protected, eliminating the hackers’ incentive to attack email servers of email providers. Secondly, powered by our patent-pending IronCAP technology, we believe our new product will be the world’s first quantum-safe end-to-end email encryption system; secured against cyberattacks from today’s systems and from quantum computers in the future. Consumers and businesses using our new products will have tomorrow’s cybersecurity today.

About 01 Communique

Established in 1992, 01 Communique (TSX-V: ONE) has always been at the forefront of technology. The Company’s cyber security business unit focuses on post-quantum cybersecurity with the development of its IronCAP technology. IronCAP’s patent-pending cryptographic system is an advanced Goppa code-based postquantum cryptographic technology that can be implemented on classical computer systems as we know them today while at the same time can also safeguard against attacks in the future post-quantum world of computing. 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.A. by its patents #6,928,479 / #6,938,076 / #8,234,701; in Canada by its patents #2,309,398 / #2,524,039 and in Japan by its patent #4,875,094. For more information, visit the Company's web site at www.ironcap.ca and www.01com.com.

Cautionary Note Regarding Forward-looking Statements.

Certain statements in this news release may constitute “forward-looking” statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this news release, such statements use such words as “may”, “will”, “expect”, “believe”, “plan”, “intend”, “are confident” and other similar terminology. Such statements include statements regarding the commercial success of IronCAP X, the future of quantum computers and their impact on the Company's product offering, the functionality of the Company's products and the intended product lines for the Company's technology and the potential licensing of the Company's technology. These

statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under “Risk and Uncertainties” in the Company’s Management`s Discussion and Analysis document filed on SEDAR. Although the forward-looking statements contained in this news release are based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward looking statements. These forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

Neither TSX Venture Exchange (“TSX-V“) nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

INVESTOR CONTACT: Andrew Cheung Chief Executive Officer 01 Communique (905) 795-2888 x206 Andrew.cheung@01com.com

01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Financial Position As at July 31, 2020 and October 31, 2019

	31-July-2031-Oct-19
AssetsCurrent assetsCash and cash equivalentsGuaranteed investment certificateAccounts receivablePrepaid expenses and other assetsRight-of-use assetPlant and equipmentTotal assetsLiabilities and Shareholders' DeficitCurrent liabilitiesAccounts payable and accrued liabilitiesDeferred revenueLease liabilityLiability component of debentureShareholders' deficitShare capitalContributed surplusShare purchase warrantsAgent compensation optionsDeficitTotal liabilities and shareholders' deficit	$ 111,180$ 283,712110,000300,000243,35196,05516,97211,124
	481,503690,89130,400-14,41116,335
	$526,314 $707,226
	$ 110,131$ 140,9629,5428,90730,482-387,596390,703
	537,751540,57241,525,84541,414,2335,765,6665,668,916690,935598,247108,40099,200 (48,097,283) (47,613,942)
	(11,437)166,654
	$526,314 $707,226

01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION

Consolidated Statements of Operations and Comprehensive Income For the 3 and 9 month periods ended July 31, 2020 and 2019

RevenueExpenses:Selling, general and administrativeResearchand development	for the 3 months ended31-Jul-2031-Jul-19$ 235,160$ 77,555111,153122,520120,717 99,862231,870222,3813,290(144,826)15,00015,0004,5354,114 (16,245) (163,940)-2,184 671- (16,916) (161,756)22,9007,143 $ (39,816) $ (168,899)$ (0.00)$ (0.00)$ (0.00)$ (0.00)80,985,65376,624,73380,985,65376,624,733	for the 9 months ended31-Jul-2031-Jul-19
		$ 349,827$ 202,275415,724403,669 323,215279,040
		738,939 682,708
Profit (loss) before accretion onliability component of debenture,interest, other income, and taxesInterest on debentureAccretion on liability portion ofdebenture		(389,112)(480,433)45,00045,00013,83213,411
Loss before other income,expense, and taxes		(447,944) (538,844)
Interest incomeInterest expense		8754,8942,100-
Loss before taxes		(449,169) (533,950)
Withholding taxes		34,17218,301
Loss for the period andcomprehensive loss		$ (483,341) $ (552,251)
BasicDilutedWeighted average number ofcommon sharesBasicDiluted		$ (0.00)$ (0.00)$ (0.00)$ (0.00)80,243,45076,624,73380,243,45076,624,733

01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Cash Flows For the 3 and 9 month periods ended July 31, 2020 and 2019

Cash provided by (used in):Operating activities:Comprehensive loss for the periodAdjustments to reconcile loss for theperiod to net cash flows from operatingactivities:Depreciation of property andequipmentAmortization of right-of-use assetStock-based compensation expenseAccretion on liability portion ofdebentureInterest incomeChange in non-cash working capitalInterest income receivedFinancing activities:Increase in lease liabilitiesProceeds from guaranteed investmentcertificateProceeds from private placementIssuance costs on private placementCash provided by financing activitiesInvesting activities:Decrease in lease liabilitiesRight-of-use assetPurchase of property and equipmentCash used in investing activitiesIncrease (decrease) in cash and cashequivalentsCash and cash equivalents, beginning ofperiodCash and cash equivalents, end ofperiod	three months ending31-Jul-2031-Jul-19$ (39,816)$ (168,899)1,3881,24111,061-23,60031,0824,5354,114-(2,184) (188,623) (37,146)(187,855)(171,792)-2,184(187,855)(169,608)---150,000202,000437,000 (10,438) (31,380)191,562150,000(7,715)-- - (266)-(7,981)-(4,274)386,012115,454112,026 $111,180 $498,038	nine months ending31-Jul-2031-Jul-19
		$ (483,341)$ (552,251)4,3403,93733,183-96,750114,57813,83213,411(875)(4,894) (152,858) (95,772)
		(488,969)(520,991) 8754,894
		(488,094)(516,097)7,715-190,000500,000202,000437,000 (10,438) (31,380)
		389,277905,620(7,715)-(63,583)- (2,417) (5,245)
		(73,715)(5,245)(172,532)384,278283,712113,760
		$111,180 $498,038

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