BUDA, TX / ACCESSWIRE / November 26, 2019 / Cipherloc Corporation (OTCQB:CLOK) ("CipherLoc"), a developer of highly secure, quantum-safe data protection technology, today announced it has filed a complaint in the United States District Court for the Western District of Texas in which it asserts claims for conversion and theft against Michael De La Garza, its former CEO and Chairman of the Board. Mr. De La Garza voluntarily resigned his position as CEO and Chairman on July 26, 2019, amid serious allegations that he had misused company assets and made false disclosures in order to hide his self-dealing from the investing public. He was subsequently terminated for cause on August 9, 2019. De La Garza is currently prohibited by court order from taking any action on behalf of CipherLoc, except as a member of the board, pending the outcome of state court litigation regarding his misconduct.
Among other relief, this complaint seeks a declaratory judgment invalidating the issuance of 9 million shares of CipherLoc Series A Preferred Stock to Mr. De La Garza, which were valued at nearly $10 million. CipherLoc alleges that Mr. De La Garza failed to comply with both state law and corporate bylaws when he caused CipherLoc to issue the stock to himself as purported compensation. CipherLoc further alleges that Mr. De La Garza went to great lengths to cover his tracks, including falsifying board minutes, filing unauthorized amendments with state authorities, and making misleading disclosures to the Securities and Exchange Commission. Resolution of the issues surrounding Mr. De La Garza's shareholder status is critical in order for CipherLoc to correct its shareholder records and protect potential investors who might unknowingly acquire the allegedly stolen shares.
The lawsuit and the related inquiries and investigations are ongoing.
About Cipherloc Corporation (OTCQB:CLOK)
Cipherloc Corporation is a provider of highly secure, quantum-safe data protection technology. Our highly innovative solutions are based on our patented Polymorphic Cipher Engine which is designed to enable an ironclad layer of protection to be added to existing products, services, or applications. We deliver solutions that are highly secure, synergistic, and scalable. In short, we keep information safe in today's highly dangerous world. For further information, please go to www.cipherloc.net.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set forth in the Company's SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements.
Darrow Associates Investor Relations
SOURCE: Cipherloc Corporation
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