[10-Q] CISO Global, Inc. Quarterly Earnings Report
CISO Global, Inc. reported interim financials for the quarter ended June 30, 2025 in this Form 10-Q. The company had 33,408,105 shares outstanding and reported material operating losses: loss from operations of $(2,329,387) and net loss from continuing operations of $(3,009,921) for one period presented, and larger consolidated losses of $(4,039,132) and $(8,389,525) for comparative periods. Net loss per common share figures shown include $(0.09), $(0.40), $(0.36) and $(0.87) depending on the period presented.
The company disclosed significant financing and debt activity: convertible notes totaling up to $8,125,000 were issued and substantially converted into 15,151,706 shares during the six months ended June 30, 2025, producing conversion-related losses and large accretion/amortization interest expense of $7,898,323 for the six-month period. A related-party convertible note of $5,000,000 was amended with a maturity extended to March 20, 2026 and a conversion price of $18.00 per share. Several high-interest loans were repaid or restructured during the period.
CISO Global, Inc. ha presentato i risultati finanziari interinali relativi al trimestre chiuso il 30 giugno 2025 nel Modulo 10-Q. La società ha 33.408.105 azioni in circolazione e ha riportato perdite operative rilevanti: perdita dalle operazioni di $(2,329,387) e perdita netta dalle attività in funzionamento di $(3,009,921) per un periodo riportato, con perdite consolidate più elevate di $(4,039,132) e $(8,389,525) nei periodi comparativi. L’utile (perdita) netto per azione comprende valori di $(0.09), $(0.40), $(0.36) e $(0.87) a seconda del periodo considerato.
La società ha inoltre evidenziato significativa attività di finanziamento e indebitamento: sono stati emessi convertibili per un ammontare massimo di $8,125,000, poi sostanzialmente convertiti in 15,151,706 azioni nei sei mesi terminati il 30 giugno 2025, generando perdite correlate alla conversione e una consistente voce di accrescimento/ammortamento come oneri finanziari per interessi di $7,898,323 nel semestre. Un convertibile con parti correlate di $5,000,000 è stato modificato prorogandone la scadenza al 20 marzo 2026 e fissando un prezzo di conversione di $18,00 per azione. Diversi prestiti ad alto tasso sono stati rimborsati o ristrutturati nel periodo.
CISO Global, Inc. presentó los estados financieros interinos correspondientes al trimestre concluido el 30 de junio de 2025 en este Formulario 10-Q. La compañía tenía 33.408.105 acciones en circulación y registró pérdidas operativas significativas: pérdida de operaciones de $(2,329,387) y pérdida neta de operaciones continuas de $(3,009,921) para un período presentado, y pérdidas consolidadas mayores de $(4,039,132) y $(8,389,525) en los periodos comparativos. Las pérdidas netas por acción incluyen cifras de $(0.09), $(0.40), $(0.36) y $(0.87) según el periodo informado.
La empresa divulgó además una actividad financiera y de deuda significativa: se emitieron pagarés convertibles por un total de hasta $8,125,000 que fueron convertidos en gran medida en 15,151,706 acciones durante los seis meses terminados el 30 de junio de 2025, provocando pérdidas relacionadas con la conversión y una elevada gasto por intereses por acrecentamiento/amortización de $7,898,323 en el semestre. Un pagaré convertible con partes relacionadas por $5,000,000 fue enmendado, extendiendo su vencimiento al 20 de marzo de 2026 y fijando un precio de conversión de $18.00 por acción. Varios préstamos con altos intereses fueron pagados o reestructurados durante el periodo.
CISO Global, Inc.는 본 10-Q 양식에서 2025년 6월 30일 종료 분기에 대한 중간 재무제표를 보고했습니다. 회사의 발행주식수는 33,408,105주였으며 유의미한 영업손실을 기록했습니다: 한 기간에 대해 영업손실 $(2,329,387) 및 계속 영업에서의 순손실 $(3,009,921)을 보고했고, 비교 기간에는 더 큰 연결 손실인 $(4,039,132) 및 $(8,389,525)를 보고했습니다. 보통주당 순손실은 기간에 따라 $(0.09), $(0.40), $(0.36), $(0.87)로 표시되어 있습니다.
회사는 또한 중요한 자금 조달 및 부채 활동을 공개했습니다: 최대 $8,125,000 상당의 전환사채가 발행되어 2025년 6월 30일로 종료되는 6개월 동안 실질적으로 15,151,706주로 전환되었고, 이로 인해 전환 관련 손실과 함께 6개월 동안의 커다란 이자성장/상각 비용인 $7,898,323의 이자비용이 발생했습니다. 관련 당사자 전환사채 $5,000,000는 만기가 2026년 3월 20일로 연장되고 전환가격은 주당 $18.00로 수정되었습니다. 해당 기간 동안 고금리 대출들이 상환되거나 재구성되었습니다.
CISO Global, Inc. a déclaré ses états financiers intermédiaires pour le trimestre clos le 30 juin 2025 dans ce formulaire 10-Q. La société comptait 33 408 105 actions en circulation et a enregistré des pertes d'exploitation significatives : perte d'exploitation de $(2,329,387) et perte nette des activités poursuivies de $(3,009,921) pour une période présentée, et des pertes consolidées plus importantes de $(4,039,132) et $(8,389,525) pour les périodes comparatives. La perte nette par action s'établit à $(0.09), $(0.40), $(0.36) et $(0.87) selon la période considérée.
La société a également divulgué d'importantes opérations de financement et d'endettement : des billets convertibles totalisant jusqu'à $8,125,000 ont été émis et largement convertis en 15,151,706 actions au cours des six mois clos le 30 juin 2025, entraînant des pertes liées à la conversion et une importante charge d'accrétion/amortissement sous forme de charge d'intérêts de $7,898,323 pour la période semestrielle. Un billet convertible lié à une partie affiliée de $5,000,000 a été modifié, sa maturité prorogée au 20 mars 2026 et son prix de conversion fixé à $18.00 par action. Plusieurs prêts à taux élevé ont été remboursés ou restructurés durant la période.
CISO Global, Inc. legte in diesem Form 10-Q die Zwischenabschlüsse für das Quartal zum 30. Juni 2025 vor. Das Unternehmen hatte 33.408.105 ausstehende Aktien und wies erhebliche operative Verluste aus: Betriebsverlust von $(2,329,387) und Nettoverlust aus fortgeführten Geschäftsbereichen von $(3,009,921) für einen dargestellten Zeitraum sowie höhere konsolidierte Verluste von $(4,039,132) und $(8,389,525) in den Vergleichszeiträumen. Der ausgewiesene Verlust je Stammaktie betrug je nach Periode $(0.09), $(0.40), $(0.36) und $(0.87).
Das Unternehmen gab zudem umfangreiche Finanzierungs- und Verschuldungsaktivitäten bekannt: Wandelanleihen mit einem Gesamtbetrag von bis zu $8,125,000 wurden ausgegeben und im Verlauf der sechs Monate zum 30. Juni 2025 weitgehend in 15,151,706 Aktien umgewandelt, was zu umwandlungsbedingten Verlusten und einer hohen Akzretions-/Amortisations- Zinsaufwand von $7,898,323 für das Halbjahr führte. Eine verwandte Wandelanleihe über $5,000,000 wurde geändert, die Fälligkeit auf den 20. März 2026 verlängert und ein Wandlungspreis von $18,00 je Aktie festgelegt. Mehrere hochverzinsliche Darlehen wurden im Berichtszeitraum zurückgezahlt oder umstrukturiert.
- Convertible notes were converted into equity (15,151,706 shares), which reduced outstanding convertible debt obligations
- Several high-cost loans were repaid (including a restructured loan repaid March 26, 2025), reducing immediate cash outflows related to those facilities
- Significant operating losses were reported (examples include loss from operations of $(2,329,387) and $(4,039,132) in presented periods)
- Very large financing-related expense: accretion/amortization and interest related to convertible notes totaled $7,898,323 for the six months ended June 30, 2025
- Material dilution from issuance/conversion of convertible notes (15,151,706 shares) and issuance of warrants
- High-cost historical debt: multiple loans carried effective rates exceeding 50% or over 100% historically before repayment/restructuring
Insights
TL;DR: High operating losses and substantial debt conversions drove large non-cash interest and conversion costs, materially affecting reported results.
The filing shows sequential and year-over-year operating losses and significant financing-driven volatility. The conversion of $8.125M of convertible notes into 15,151,706 shares created recognized losses on conversion and produced $7.9M of accretion/amortization interest in six months, which is material relative to operating results. The presence of multiple high-rate restructured loans, repayment activity, and a related-party $5M convertible note extended to March 2026 increases capital structure complexity and potential dilution. Revenue line items (professional services and security managed services) are reported but are substantially smaller than combined cost of revenue and payroll, yielding operating deficits.
TL;DR: The company is undergoing heavy capital restructuring with high-cost debt replacements and equity conversions that materially change leverage and equity base.
Multiple high-interest instruments were repaid, restructured, or converted during the period, including a restructured loan repaid in March 2025 and subordinated/short-term notes repaid earlier in 2025. The conversion of note holders into equity (15,151,706 shares) and issuance of warrants alters leverage and dilute existing shareholders. Accrued interest payable balances and convertible terms (including a related-party note with a $18 conversion price) are explicitly disclosed and are relevant to liquidity planning. The company recognized non-cash charges tied to these financings, and future interest/amortization obligations appear to have been substantial in the period presented.
CISO Global, Inc. ha presentato i risultati finanziari interinali relativi al trimestre chiuso il 30 giugno 2025 nel Modulo 10-Q. La società ha 33.408.105 azioni in circolazione e ha riportato perdite operative rilevanti: perdita dalle operazioni di $(2,329,387) e perdita netta dalle attività in funzionamento di $(3,009,921) per un periodo riportato, con perdite consolidate più elevate di $(4,039,132) e $(8,389,525) nei periodi comparativi. L’utile (perdita) netto per azione comprende valori di $(0.09), $(0.40), $(0.36) e $(0.87) a seconda del periodo considerato.
La società ha inoltre evidenziato significativa attività di finanziamento e indebitamento: sono stati emessi convertibili per un ammontare massimo di $8,125,000, poi sostanzialmente convertiti in 15,151,706 azioni nei sei mesi terminati il 30 giugno 2025, generando perdite correlate alla conversione e una consistente voce di accrescimento/ammortamento come oneri finanziari per interessi di $7,898,323 nel semestre. Un convertibile con parti correlate di $5,000,000 è stato modificato prorogandone la scadenza al 20 marzo 2026 e fissando un prezzo di conversione di $18,00 per azione. Diversi prestiti ad alto tasso sono stati rimborsati o ristrutturati nel periodo.
CISO Global, Inc. presentó los estados financieros interinos correspondientes al trimestre concluido el 30 de junio de 2025 en este Formulario 10-Q. La compañía tenía 33.408.105 acciones en circulación y registró pérdidas operativas significativas: pérdida de operaciones de $(2,329,387) y pérdida neta de operaciones continuas de $(3,009,921) para un período presentado, y pérdidas consolidadas mayores de $(4,039,132) y $(8,389,525) en los periodos comparativos. Las pérdidas netas por acción incluyen cifras de $(0.09), $(0.40), $(0.36) y $(0.87) según el periodo informado.
La empresa divulgó además una actividad financiera y de deuda significativa: se emitieron pagarés convertibles por un total de hasta $8,125,000 que fueron convertidos en gran medida en 15,151,706 acciones durante los seis meses terminados el 30 de junio de 2025, provocando pérdidas relacionadas con la conversión y una elevada gasto por intereses por acrecentamiento/amortización de $7,898,323 en el semestre. Un pagaré convertible con partes relacionadas por $5,000,000 fue enmendado, extendiendo su vencimiento al 20 de marzo de 2026 y fijando un precio de conversión de $18.00 por acción. Varios préstamos con altos intereses fueron pagados o reestructurados durante el periodo.
CISO Global, Inc.는 본 10-Q 양식에서 2025년 6월 30일 종료 분기에 대한 중간 재무제표를 보고했습니다. 회사의 발행주식수는 33,408,105주였으며 유의미한 영업손실을 기록했습니다: 한 기간에 대해 영업손실 $(2,329,387) 및 계속 영업에서의 순손실 $(3,009,921)을 보고했고, 비교 기간에는 더 큰 연결 손실인 $(4,039,132) 및 $(8,389,525)를 보고했습니다. 보통주당 순손실은 기간에 따라 $(0.09), $(0.40), $(0.36), $(0.87)로 표시되어 있습니다.
회사는 또한 중요한 자금 조달 및 부채 활동을 공개했습니다: 최대 $8,125,000 상당의 전환사채가 발행되어 2025년 6월 30일로 종료되는 6개월 동안 실질적으로 15,151,706주로 전환되었고, 이로 인해 전환 관련 손실과 함께 6개월 동안의 커다란 이자성장/상각 비용인 $7,898,323의 이자비용이 발생했습니다. 관련 당사자 전환사채 $5,000,000는 만기가 2026년 3월 20일로 연장되고 전환가격은 주당 $18.00로 수정되었습니다. 해당 기간 동안 고금리 대출들이 상환되거나 재구성되었습니다.
CISO Global, Inc. a déclaré ses états financiers intermédiaires pour le trimestre clos le 30 juin 2025 dans ce formulaire 10-Q. La société comptait 33 408 105 actions en circulation et a enregistré des pertes d'exploitation significatives : perte d'exploitation de $(2,329,387) et perte nette des activités poursuivies de $(3,009,921) pour une période présentée, et des pertes consolidées plus importantes de $(4,039,132) et $(8,389,525) pour les périodes comparatives. La perte nette par action s'établit à $(0.09), $(0.40), $(0.36) et $(0.87) selon la période considérée.
La société a également divulgué d'importantes opérations de financement et d'endettement : des billets convertibles totalisant jusqu'à $8,125,000 ont été émis et largement convertis en 15,151,706 actions au cours des six mois clos le 30 juin 2025, entraînant des pertes liées à la conversion et une importante charge d'accrétion/amortissement sous forme de charge d'intérêts de $7,898,323 pour la période semestrielle. Un billet convertible lié à une partie affiliée de $5,000,000 a été modifié, sa maturité prorogée au 20 mars 2026 et son prix de conversion fixé à $18.00 par action. Plusieurs prêts à taux élevé ont été remboursés ou restructurés durant la période.
CISO Global, Inc. legte in diesem Form 10-Q die Zwischenabschlüsse für das Quartal zum 30. Juni 2025 vor. Das Unternehmen hatte 33.408.105 ausstehende Aktien und wies erhebliche operative Verluste aus: Betriebsverlust von $(2,329,387) und Nettoverlust aus fortgeführten Geschäftsbereichen von $(3,009,921) für einen dargestellten Zeitraum sowie höhere konsolidierte Verluste von $(4,039,132) und $(8,389,525) in den Vergleichszeiträumen. Der ausgewiesene Verlust je Stammaktie betrug je nach Periode $(0.09), $(0.40), $(0.36) und $(0.87).
Das Unternehmen gab zudem umfangreiche Finanzierungs- und Verschuldungsaktivitäten bekannt: Wandelanleihen mit einem Gesamtbetrag von bis zu $8,125,000 wurden ausgegeben und im Verlauf der sechs Monate zum 30. Juni 2025 weitgehend in 15,151,706 Aktien umgewandelt, was zu umwandlungsbedingten Verlusten und einer hohen Akzretions-/Amortisations- Zinsaufwand von $7,898,323 für das Halbjahr führte. Eine verwandte Wandelanleihe über $5,000,000 wurde geändert, die Fälligkeit auf den 20. März 2026 verlängert und ein Wandlungspreis von $18,00 je Aktie festgelegt. Mehrere hochverzinsliche Darlehen wurden im Berichtszeitraum zurückgezahlt oder umstrukturiert.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the Quarterly Period Ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from _________ to _________
Commission
file number:
(Exact name of registrant as specified in its charter)
(State or other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| 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:
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As
of August 8, 2025, there were
CISO GLOBAL, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025 (unaudited)
TABLE OF CONTENTS
| Page | ||
| PART I. FINANCIAL INFORMATION | 4 | |
| ITEM 1. | Financial Statements (Unaudited) | 4 |
| Condensed Consolidated Balance Sheets | 4 | |
| Condensed Consolidated Statements of Operations and Comprehensive Loss | 5 | |
| Condensed Consolidated Statements of Changes in Stockholders’ Equity | 6 | |
| Condensed Consolidated Statements of Cash Flows | 7 | |
| Notes to Condensed Consolidated Financial Statements | 8 | |
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 |
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 26 |
| ITEM 4. | Controls and Procedures | 26 |
| PART II. OTHER INFORMATION | 27 | |
| ITEM 1. | Legal Proceedings | 27 |
| ITEM 1A. | Risk Factors | 27 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 27 |
| ITEM 3. | Defaults Upon Senior Securities | 27 |
| ITEM 4. | Mine Safety Disclosures | 27 |
| ITEM 5. | Other Information | 27 |
| ITEM 6. | Exhibits | 27 |
| SIGNATURES | 28 | |
| 2 |
FORWARD-LOOKING STATEMENTS
The information contained in this report should be read in conjunction with the financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q. Certain statements made in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based upon beliefs of, and information currently available to, us as of the date hereof, as well as estimates and assumptions made by us. 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. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Forward-looking statements made in this Quarterly Report on Form 10-Q include statements about:
| ● | our ability to maintain an effective system of internal controls and accurately report our financial results; |
| ● | that we will continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients; |
| ● | our belief that our cash and cash equivalents as of the date of this filing, together with anticipated revenues, will be sufficient to meet our anticipated cash requirement for the near term; |
| ● | the doubt about our ability to continue as a going concern; |
| ● | our efforts to developing our business, reducing overhead cost, and capital raising; |
| ● | our plan to improve our liquidity by a planned reduction in overhead costs and actively pursuing additional debt and /or equity financing through discussions with investment bankers and private investors; |
| ● | our estimate for indirect tax liabilities; and |
| ● | our expectation that we will incur further losses through the end of 2025. |
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks detailed from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, any of which may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time they are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results.
| 3 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (UNAUDITED)
CISO GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Prepaid cost of revenue | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Contract assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Prepaid cost of revenue, net of current portion | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Deferred revenue | ||||||||
| Lease liabilities | ||||||||
| Loans payable | ||||||||
| Line of credit | ||||||||
| Derivative liability | - | |||||||
| Convertible notes payable | ||||||||
| Convertible note payable, related party | ||||||||
| Convertible notes payable | ||||||||
| Total Current Liabilities | ||||||||
| Deferred revenue, net of current portion | ||||||||
| Loans payable, net of current portion | ||||||||
| Lease liabilities, net of current portion | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 10) | - | - | ||||||
| Stockholders’ Equity: | ||||||||
| Common stock, $ | ||||||||
| Preferred stock, $ | - | - | ||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost ( | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
CISO GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue: | ||||||||||||||||
| Security managed services | $ | $ | $ | $ | ||||||||||||
| Professional services | ||||||||||||||||
| Cybersecurity software | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of revenue: | ||||||||||||||||
| Security managed services | ||||||||||||||||
| Professional services | ||||||||||||||||
| Cybersecurity software | ||||||||||||||||
| Cost of payroll | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Total cost of revenue | ||||||||||||||||
| Total gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Advertising and marketing | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on extinguishment of convertible notes | ( | ) | - | ( | ) | - | ||||||||||
| Change in fair value of derivative liability | - | - | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from discontinued operations, net of income taxes (1) | - | ( | ) | - | ( | ) | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share, basic and diluted: | ||||||||||||||||
| Continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Discontinued operations | - | ( | ) | - | ( | ) | ||||||||||
| $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Weighted-average shares used in computing net loss per share, basic and diluted: | ||||||||||||||||
| Other comprehensive (loss) income: | ||||||||||||||||
| Foreign currency translation adjustments | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Other comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
CISO GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
| Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Total | |||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Paid-in | Comprehensive | Accumulated | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Total | |||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Stock-based compensation - stock options | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Issuance of common stock for services | - | - | - | - | ||||||||||||||||||||||||||||
| Issuance of common stock | - | - | - | - | ||||||||||||||||||||||||||||
| Conversion of convertible notes | - | - | - | - | ||||||||||||||||||||||||||||
| Issuance of warrants | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Exercise of warrants | - | - | - | - | ||||||||||||||||||||||||||||
| Exercise of stock options | - | - | - | - | - | |||||||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at June 30, 2025 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Paid-in | Comprehensive | Accumulated | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Total | |||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | - | $ | - | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Balance | $ | - | $ | - | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Stock-based compensation - stock options | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Issuance of common stock | - | - | - | - | ||||||||||||||||||||||||||||
| Stock issued as lending discount | - | - | - | - | ||||||||||||||||||||||||||||
| Stock adjustment after reverse stock split | - | - | - | - | - | - | - | |||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Other comprehensive income (loss) | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at June 30, 2024 | $ | - | $ | - | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Balance | $ | - | $ | - | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
CISO GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2025 | 2024 | |||||||
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation - stock options | ||||||||
| Stock-based compensation - stock issued for services | - | |||||||
| Non-cash interest expense | ||||||||
| Depreciation and amortization | ||||||||
| Non-cash operating lease costs | ||||||||
| Bad debt expense | ||||||||
| Loss on assets held for sale | - | |||||||
| Change in fair value of derivative liability | ( | ) | - | |||||
| Loss on extinguishment of convertible notes | - | |||||||
| Other | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventory | - | |||||||
| Contract assets | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Deferred revenue | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | - | ( | ) | |||||
| Net cash used in investing activities | - | ( | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from sales of common stock, net of offering costs | ||||||||
| Proceeds from stock option exercises | - | |||||||
| Proceeds from exercises of warrants | - | |||||||
| Proceeds from loans payable | - | |||||||
| Proceeds from convertible notes payable | - | |||||||
| Proceeds from line of credit | ||||||||
| Payments on line of credit | ( | ) | ( | ) | ||||
| Payments on loans payable | ( | ) | ( | ) | ||||
| Payments of debt issuance costs | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rates on cash and cash equivalents | - | ( | ) | |||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents - beginning of the period | ||||||||
| Cash and cash equivalents - end of the period | $ | $ | ||||||
| Reconciliation of cash and cash equivalents: | ||||||||
| Cash and cash equivalents from continuing operations | $ | $ | ||||||
| Cash and cash equivalents included in assets of business held for sale | - | |||||||
| Total cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | - | $ | - | ||||
| Supplemental disclosures of non-cash investing and financing activities: | ||||||||
| Common stock issued in exchange for services | $ | $ | - | |||||
| Common stock issued as a lending discount | $ | - | $ | |||||
| Conversion of convertible notes | $ | $ | - | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
CISO GLOBAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to CISO Global, Inc., a Delaware corporation and its wholly owned subsidiaries. Unless otherwise specified, all dollar amounts are expressed in United States dollars.
NOTE 1 – ORGANIZATION OF BUSINESS AND GOING CONCERN
Description of the Business
We are a leading cybersecurity, compliance, and software company comprised of highly trained and seasoned security professionals who work with clients to enhance or create a better cyber posture in their organization. We provide a full range of cybersecurity consulting, related services, and cybersecurity software, encompassing all four pillars of proprietary software stack, compliance, cybersecurity, and organizational culture. Our comprehensive cybersecurity services include managed security, compliance services, security operations center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response, certified forensics, technical assessments, and cybersecurity training. We believe that culture is the foundation of every successful cybersecurity and compliance program. To deliver that outcome, we developed our unique offering of MCCP+ (“Managed Compliance & Cybersecurity Provider + Culture”), which is a holistic solution that provides all four of these pillars under one roof from a dedicated team of subject matter experts. In contrast to the majority of cybersecurity firms that are focused on a specific technology or service, we seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating highly sought-after topic experts. We continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients. We believe that bringing together a world-class team of technological experts with multi-faceted expertise in the critical aspects of cybersecurity is key to providing technology-agnostic solutions to our clients in a business environment that has suffered from a chronic lack of highly skilled professionals, thereby setting us apart from competitors and in-house security teams. Our goal is to create a culture of security and to help quantify, define, and capture a return on investment from information technology and cybersecurity spending.
Basis of Presentation
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q pursuant to rules and regulations of the SEC, and include our accounts and the accounts of our subsidiaries. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the SEC’s rules and regulations, although, we believe that the disclosures made are adequate to make the information not misleading. All material intercompany accounts and transactions have been eliminated.
Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2025. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”). The December 31, 2024 condensed consolidated balance sheet included herein is derived from the audited consolidated financial statements included in the 2024 Form 10-K but does not include all disclosures required by GAAP.
Reclassifications
Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation.
| 8 |
Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, due to losses incurred, cash used in operations and the existence of a working capital deficit, substantial doubt about our ability to continue as a going concern exists. Our ability to fund ongoing operations is highly dependent upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles. We are evaluating strategies to obtain the required additional funding for future operations. These strategies may include obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring operations to grow revenues and decrease expenses.
On June 26, 2025, we filed a shelf registration statement on Form S-3, which was deemed effective on July 7, 2025 (“July 2025 Registration Statement”) to replace our existing shelf registration statement on Form S-3. The July 2025 Registration Statement contains two prospectuses:
| 1) | a
base prospectus that covers the potential offering, issuance, and sale from time to time of our common stock, preferred stock, warrants,
debt securities, and units in one or more offerings with total proceeds of up to $ | |
| 2) | a
sales agreement prospectus covering the potential offering, issuance, and sale from time to time of shares of our common stock having
aggregate gross sales proceeds of up to $ |
In no event will we sell securities under this registration statement with a value exceeding more than one-third of our “public float” (the aggregate market value of our common stock and any other equity securities that we may issue in the future that are held by non-affiliates) in any 12-calendar month period so long as our public float remains below $75 million.
However, there can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all. As such, we may be unable to access further equity or debt financing when needed. The ability for us to continue as a going concern is dependent upon our ability to successfully implement our strategies and eventually attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments to the carrying amounts or classification of assets, liabilities, and reported expenses that may be necessary if we are unable to continue as a going concern.
Segment Information
We have a single reportable segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer. The CODM is regularly provided with financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Our CODM uses consolidated net loss, as reported in our condensed consolidated statements of operations and comprehensive loss, to measure segment profit or loss. Net loss is used by the CODM to facilitate analysis of our financial trends, review budgeted versus actual results and for planning purposes. Significant segment expenses are presented in our condensed consolidated statements of operations and comprehensive loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.
Geographic Information
Substantially all of our revenue is from customers located within the United States. Less than 1% of our total revenue is from customers located outside of the United States. All of our property and equipment is located within the United States.
Use of Estimates
Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Material estimates include the allowance for credit losses, the carrying value of intangible assets and goodwill, our deferred tax assets and valuation allowance, the valuation of our convertible notes payable and derivative liability, the adequacy of insurance reserves, and assumptions used in the Black-Scholes option pricing model, such as expected term, stock price volatility and risk-free interest rate.
| 9 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
There have been no significant changes to our accounting policies disclosed in our 2024 Form 10-K.
Net Loss per Common Share
Basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. For dilutive securities, all outstanding stock options and warrants are considered potentially outstanding common stock. The dilutive effect, if any, of stock options and warrants is calculated using the treasury stock method. All outstanding convertible notes payable are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method.
The
following potentially dilutive securities were excluded from the computation of diluted net loss per common share because their inclusion
would have been anti-dilutive:
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Stock options | ||||||||||||||||
| Restricted stock units | - | - | ||||||||||||||
| Warrants | ||||||||||||||||
| Convertible notes payable | ||||||||||||||||
| Total | ||||||||||||||||
Deferred Revenue
Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license. We generally invoice customers in advance or in milestone-based installments.
Deferred revenue consisted of the following:
SCHEDULE OF DEFERRED REVENUE
| June 30, 2025 | December 31, 2024 | |||||||
| Current: | ||||||||
| Security managed services | $ | $ | ||||||
| Professional services | ||||||||
| Cybersecurity software | ||||||||
| Total deferred revenue - current | $ | $ | ||||||
| Long-term: | ||||||||
| Security managed services | $ | $ | ||||||
| Total deferred revenue – long term | $ | $ | ||||||
We recognized revenue of $
SCHEDULE OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE
| Remainder of 2025 | 2026 | 2027 | 2028 | 2029 | Total | |||||||||||||||||||
| Security managed services | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Professional services | - | - | - | - | ||||||||||||||||||||
| Cybersecurity software | - | - | - | |||||||||||||||||||||
| Total deferred revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| 10 |
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, including tax loss and credit carry forwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
We utilize Accounting Standards Codification Topic 740 (ASC 740), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax returns. We account for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely than not” that a deferred tax asset will not be realized. At June 30, 2025 and December 31, 2024, our net deferred tax asset has been fully reserved.
For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the unaudited condensed consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely.
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires additional disaggregated disclosures on an entity’s effective tax rate reconciliation and additional details on income taxes paid. ASU 2023-09 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. The adoption of ASU 2023-09 is expected to result in additional tax-related disclosures in the notes to our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public entities to provide disaggregated disclosure of expenses included within relevant income statement expense captions, as well as additional disclosures about selling expenses. This update is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of the ASU or (2) retrospectively to any or all prior periods presented in the financial statements. The adoption of ASU 2024-03 is expected to result in additional disclosures in our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-04, “Debt (Subtopic 470-20): Debt with Conversion and Other Options.” ASU 2024-04 clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument. ASU 2024-04 is effective for reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted for entities that have adopted ASU 2020-06. We do not expect the adoption of ASU 2024-04 to have a material impact on our consolidated financial statements.
| 11 |
NOTE 3 – DISCONTINUED OPERATIONS
The operating results of our former Latin America subsidiaries, which we disposed of to focus on our U.S.-based operations and the development and marketing of our internally developed cybersecurity software, are reported within discontinued operations on our condensed consolidated statements of operations and comprehensive loss through July 1, 2024. Our loss from discontinued operations, net of tax, and our loss on assets held for sale, net of tax, which are presented in total as discontinued operations, net of income tax, on our condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024, were as follows:
SCHEDULE OF DISCONTINUED OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
| 2024 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Operating expenses | ||||||||
| Other expense | ||||||||
| Loss from discontinued operations before income taxes | ( | ) | ( | ) | ||||
| Benefit from income taxes | - | - | ||||||
| Loss from assets held for sale, net of tax | ( | ) | ( | ) | ||||
| Loss from discontinued operations | $ | ( | ) | $ | ( | ) | ||
Net
cash provided by operating activities of discontinued operations was $
NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS
June 30, 2025 | December 31, 2024 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment, net consisted of the following:
SCHEDULE OF PROPERTY AND EQUIPMENT
June 30, 2025 | December 31, 2024 | |||||||
| Computer equipment | $ | $ | ||||||
| Leasehold improvements | ||||||||
| Furniture and fixtures | ||||||||
| Software | ||||||||
| Property and equipment gross | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation
expense was $
| 12 |
NOTE 6 – INTANGIBLE ASSETS AND GOODWILL
Goodwill
The following table summarizes the goodwill balances as of June 30, 2025 and December 31, 2024:
SCHEDULE OF CHANGES IN GOODWILL
| Balance at June 30, 2025 | ||||
| Goodwill | $ | |||
| Accumulated impairment losses | ( | ) | ||
| Total goodwill | $ | |||
| Balance at December 31, 2024 | ||||
| Goodwill | $ | |||
| Accumulated impairment losses | ( | ) | ||
| Total goodwill | $ |
Intangible Assets
Intangible assets, net are summarized as follows:
SCHEDULE OF INTANGIBLE ASSETS
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
| June 30, 2025 | ||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net
Carrying Amount | ||||||||||
| Tradenames – trademarks | $ | $ | ( | ) | $ | |||||||
| Customer base | ( | ) | ||||||||||
| Non-compete agreements | ( | ) | - | |||||||||
| Intellectual property/technology | ( | ) | ||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | |||||||
| Gross Carrying Amount | Accumulated Amortization | Net
Carrying Amount | ||||||||||
| December 31, 2024 | ||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net
Carrying Amount | ||||||||||
| Tradenames – trademarks | $ | $ | ( | ) | $ | |||||||
| Customer base | ( | ) | ||||||||||
| Non-compete agreements | ( | ) | ||||||||||
| Intellectual property/technology | ( | ) | ||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | |||||||
The
weighted average remaining useful life of finite-lived intangible assets is
Amortization
expense for the three months ended June 30, 2025 and 2024 was $
Based on the balance of intangible assets at June 30, 2025, expected future amortization expense is as follows:
SCHEDULE OF FUTURE AMORTIZATION EXPENSE
| 2025 (remainder of) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total | $ |
| 13 |
NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following:
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES
| June
30, 2025 | December
31, 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued payroll and bonuses | ||||||||
| Accrued expenses | ||||||||
| Accrued commissions | ||||||||
| Indirect taxes payable | ||||||||
| Accrued interest | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
NOTE 8 – RELATED PARTY TRANSACTIONS
Managed Services Agreement with Hensley Beverage Company – Related Party
In
July 2021, we entered into a 1-year Managed Services Agreement with Hensley Beverage Company to provide secured managed services. We
also may be engaged by Hensley Beverage Company from time to time to provide other related services outside the scope of the Managed
Services Agreement. While the agreement provided for an original term through December 31, 2021, the agreement will continue until terminated
by either party. For the three months ended June 30, 2025 and 2024, we received $
Convertible Note Payable with Hensley & Company
In
March 2023, we issued an unsecured convertible note payable to Hensley & Company in the principal amount of $
| 14 |
NOTE 9 – STOCKHOLDERS’ EQUITY
For
the three and six months ended June 30, 2025, we sold
For
the three and six months ended June 30, 2024, we sold
Stock Options
We granted stock options vesting solely upon the continued service of the recipient. We recognize the accounting grant date fair value of equity-based awards as compensation expense over the required service period of each award.
The following table summarizes stock option activity for the six months ended June 30, 2025:
SCHEDULE OF STOCK OPTION ACTIVITY
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Expired or cancelled | ( | ) | ||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | ||||||||||||||
| Exercisable at June 30, 2025 | $ | $ | ||||||||||||||
Total
stock-based compensation expense related to the stock options was $
The
weighted-average grant-date fair value of options granted during the six months ended June 30, 2025 and 2024 was $
Restricted Stock Units
We granted
restricted stock units (“RSUs”) that only contain a service-based vesting condition that is typically satisfied over
four years. We recognize the accounting grant date fair value of equity-based awards as compensation expense over the requisite
service period. The fair value of RSUs is determined by the closing price of the Company’s common stock on the grant date. On
June 13, 2025, we granted
Warrant Activity Summary
The following table summarizes warrant activity for the six months ended June 30, 2025:
SCHEDULE OF STOCK WARRANT ACTIVITY
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2024 | $ | $ | - | |||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Expired or cancelled | - | - | ||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | ||||||||||||||
| Exercisable at June 30, 2025 | $ | $ | ||||||||||||||
| 15 |
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Legal Claims
There
are no material pending legal proceedings in which we or any of our subsidiaries are a party or in which any of our directors, officers
or affiliates, any owner of record or
Indirect Taxes
We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the United States and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the business of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generated based on regulations currently being applied to similar, but not directly comparable industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists and believe we maintain adequate indirect tax accruals.
As
of June 30, 2025 and December 31, 2024, our accrual for estimated indirect tax liabilities was $
Warranties
Our services are generally warranted to deliver and operate in a manner consistent with general industry standards that are reasonably applicable and materially conform with our documentation under normal use and circumstances.
We offer a limited warranty to select customers, subject to various conditions, to cover certain costs incurred by the customer in case of a security breach. We have entered into an insurance policy to cover our potential liability arising from this limited warranty arrangement. We have not incurred any material costs related to such obligations and have not accrued any liabilities related to such obligations in the unaudited condensed consolidated financial statements.
In addition, we also indemnify certain of our directors and executive officers against certain liabilities that may arise while they are serving in good faith in their company capacities. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid.
| 16 |
NOTE 11 – DEBT
Term Loans
In
November 2023, we entered into a business loan and security agreement, pursuant to which we obtained a loan with a principal amount of
$
In
June 2024, we entered into a Subordinated Business Loan and Security Agreement (“Subordinated Business Loan Agreement”) with
Agile Capital Funding, LLC (“Agile”), pursuant to which we obtained a loan with a principal amount of $
In
November 2024, we entered into a Note Purchase Agreement, pursuant to which we obtained a loan with a principal amount of $
In
November 2024, we entered into an Intellectual Property Buy-Back Purchase Agreement, pursuant to which we reacquired vCISO, LLC in exchange
for a Promissory Note with a face value of $
As of June 30, 2025 and December 31, 2024, term loans comprised of the following:
SCHEDULE OF TERM LOANS
| Effective
Interest Rates | Maturities | June 30, 2025 | December
31, 2024 | |||||||||||
| Term loans | $ | $ | ||||||||||||
| Less: current portion | ( | ) | ( | ) | ||||||||||
| Loans payable, net of current portion | $ | $ | ||||||||||||
Line of Credit
On
January 31, 2024, we entered into a Loan and Security Agreement (the “2024 Loan and Security Agreement”) with Aion, pursuant
to which we may borrow up to $
On
April 14, 2025, we entered into a Loan and Security Agreement (the “2025 Loan and Security Agreement”) with Aion to replace
the 2024 Loan and Security Agreement, pursuant to which we may borrow up to $
In
relation to the Loan and Security Agreements, we recorded interest expense of $
| 17 |
Convertible Notes Payable
Hensley & Company Convertible Note
In
March 2023, we issued an unsecured convertible note payable to Hensley & Company in the principal amount of $
JC Associates Convertible Notes
In
June 2023, we issued an unsecured convertible note payable in the principal amount of $
In
June 2024, we entered into Amendment #1 to extend the maturity date of the $
In
December 2024, we entered into Amendment #2 to extend the maturity date of the $
In
October 2023, we issued an unsecured convertible note payable in the principal amount of $
In
June 2024, we entered into Amendment #1 to extend the maturity date of the $
In
December 2024, we entered into Amendment #2 to extend the maturity date of the $
Convertible Notes Payable and Warrants
In
December 2024, we entered into a Securities Purchase Agreement (the “Agreement”) with several purchasers (the “Purchasers”).
Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate of up to $
The
Agreement initially funded us with gross proceeds (prior to the
We recorded these convertible notes payable at fair value and recognized the fair value of the conversion feature as a derivative liability upon each tranche of funding. The allocation of fair value to the convertible notes and warrants was made on a relative fair value basis as the free-standing warrants are equity classified.
The conversion feature of the notes payable was determined to be an embedded derivative requiring bifurcation accounting as (1) the feature is not clearly and closely related to the debt host and (2) the feature meets the definition of a derivative under ASC 815. Changes in the fair value of the embedded derivative were recognized in the condensed consolidated statements of operations and comprehensive loss in change in fair value of derivative liability.
During
the three months ended June 30, 2025, $
The proceeds from the Agreement were used to repay outstanding principal amounts of short-term indebtedness and for general corporate purposes, which included working capital and research and development.
At June 30, 2025, the principal payments due under the above term loans, line of credit, and convertible notes payable were as follows:
SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT
| 2025 (remainder of) | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total future principal payments | ||||
| Less: unamortized debt discount | ( | ) | ||
| Carrying value of debt | ||||
| Less: current portion of debt | ( | ) | ||
| Debt, net of current portion | $ |
| 18 |
NOTE 12 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS
For each of the three and six months ended June 30, 2025, one customer
represented
NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Reclassification adjustments out of accumulated other comprehensive income (loss) (“AOCI” or “AOCL”) and into net loss were not material for all periods presented.
For the six months ended June 30, 2025, changes in AOCL were not material. For the six months ended June 30, 2024, changes in AOCI were as follows:
SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME
| Foreign Currency Translation Adjustments [Member] | Foreign Currency Translation Adjustments | Total AOCI | ||||||
| Six Months Ended June 30, 2024 | ||||||||
Foreign Currency Translation Adjustments | Total AOCI | |||||||
| Balance at December 31, 2023 | $ | $ | ||||||
| Beginning Balance | $ | $ | ||||||
| Other comprehensive loss | ( | ) | ( | ) | ||||
| Amounts reclassified from AOCI | - | - | ||||||
| Balance at June 30, 2024 | $ | $ | ||||||
| Ending Balance | $ | $ | ||||||
NOTE 14 – FAIR VALUE MEASUREMENTS
Fair value is the exchange price to sell an asset or transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value measurements use market data or assumptions market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs may be readily observable, corroborated by market data, or generally unobservable. Valuation techniques maximize the use of observable inputs and minimize use of unobservable inputs. The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy:
| ● | Level 1 – Inputs are based on quoted prices in active markets for identical assets and liabilities. | |
| ● | Level 2 – Inputs are based on observable inputs other than quoted prices in active markets for identical or similar assets and liabilities. | |
| ● | Level 3 – One or more inputs are unobservable and significant. |
Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
We did not have any financial assets or liabilities measured and recorded at fair value on a recurring basis as of June 30, 2025. The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2024:
SCHEDULE OF FAIR VALUE MEASUREMENT
| Level 1 | Level 2 | Level 3 | ||||||||||
| December 31, 2024 | ||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||
| Current liabilities | ||||||||||||
| Derivative liability | $ | - | $ | - | $ | |||||||
| Total liabilities measured at fair value | $ | - | $ | - | $ | |||||||
The estimated fair value of the derivative liability (conversion feature of our convertible notes payable) is based on Monte Carlo simulations, a traditional valuation model and represents a Level 3 fair value measurement due to significant unobservable inputs. The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2025 and December 31, 2024 because of the relatively short duration of these instruments.
NOTE 15 – SUBSEQUENT EVENT
On
August 4, 2025, we entered into Exchange Agreements (each, an “Exchange Agreement,” and collectively, the “Exchange
Agreements”) with each of Hensley & Company, d/b/a Hensley Beverage Company (“Hensley”), an entity affiliated with
Andrew K. McCain, a director of our company, and J C Associates, Inc. (“J C Associates,” and collectively with Hensley, the
“Holders”), an entity affiliated with a member of our advisory board. Pursuant to the Exchange Agreements, the Holders exchanged
certain outstanding convertible notes, as amended from time to time, with aggregate principal and accrued interest of approximately $
| 19 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to CISO Global, Inc., a Delaware corporation, and its wholly owned subsidiaries. Unless otherwise specified, all dollar amounts are expressed in U.S. dollars.
First Half 2025 Highlights
Our operating results for the six months ended June 30, 2025 included the following:
| ● | Total current liabilities reduced by $7,153,067 to $17,802,580 as compared to December 31, 2024 of $24,955,647. | |
| ● | Total gross profit increased to $3,418,442 for the six months ended June 30, 2025 as compared to $1,640,131 for the six months ended June 30, 2024. | |
| ● | Reduced our loss from operations to $4,039,132 for the six months ended June 30, 2025 as compared to $9,138,506 for the six months ended June 30, 2024. |
Results of Operations
Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024
Our financial results for the three months ended June 30, 2025 are summarized as follows in comparison to the three months ended June 30, 2024:
| Three Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Variance | ||||||||||
| Revenue: | ||||||||||||
| Security managed services | $ | 6,046,950 | $ | 7,080,326 | $ | (1,033,376 | ) | |||||
| Professional services | 522,804 | 632,225 | (109,421 | ) | ||||||||
| Cybersecurity software | 143,833 | 95,874 | 47,959 | |||||||||
| Total revenue | 6,713,587 | 7,808,425 | (1,094,838 | ) | ||||||||
| Cost of revenue: | ||||||||||||
| Security managed services | 1,809,328 | 2,334,703 | (525,375 | ) | ||||||||
| Professional services | 72,547 | 134,584 | (62,037 | ) | ||||||||
| Cybersecurity software | 58,815 | 28,264 | 30,551 | |||||||||
| Cost of payroll | 2,658,957 | 3,176,818 | (517,861 | ) | ||||||||
| Stock-based compensation | 477,100 | 1,200,147 | (723,047 | ) | ||||||||
| Total cost of revenue | 5,076,747 | 6,874,516 | (1,797,769 | ) | ||||||||
| Total gross profit | 1,636,840 | 933,909 | 702,931 | |||||||||
| Operating expenses: | ||||||||||||
| Professional fees | 166,178 | 311,194 | (145,016 | ) | ||||||||
| Advertising and marketing | 525,302 | 6,322 | 518,980 | |||||||||
| Selling, general, and administrative | 2,630,096 | 3,605,280 | (975,184 | ) | ||||||||
| Stock-based compensation | 644,651 | 1,252,720 | (608,069 | ) | ||||||||
| Total operating expenses | 3,966,227 | 5,175,516 | (1,209,289 | ) | ||||||||
| Loss from operations | (2,329,387 | ) | (4,241,607 | ) | 1,912,220 | |||||||
| Loss on extinguishment of convertible notes | (24,518 | ) | - | (24,518 | ) | |||||||
| Change in fair value of derivative liability | 79,919 | - | 79,919 | |||||||||
| Interest expense | (736,309 | ) | (623,941 | ) | (112,368 | ) | ||||||
| Other income (expense), net | 374 | (73,810 | ) | 74,184 | ||||||||
| Loss from continuing operations | $ | (3,009,921 | ) | $ | (4,939,358 | ) | $ | 1,929,437 | ||||
| 20 |
Revenue
Security managed services revenue decreased by $1,033,376, or 15%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to lower annual contract values among newly acquired customers.
Professional services revenue decreased by $109,421, or 17%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to fewer customer projects.
Cybersecurity software revenue increased by $47,959, or 50%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to an increase in subscriptions for our Checklight cybersecurity software.
Expenses
Cost of Revenue
Security managed services cost of revenue decreased by $525,375, or 23%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to lower costs associated with our existing client base.
Professional services cost of revenue decreased by $62,037, or 46%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, due to decreased use of consultants.
Cybersecurity software cost of revenue increased by $30,551, or 108%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to our increase in Checklight subscriptions.
Cost of payroll decreased by $517,861, or 16%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to headcount reductions in 2024.
Stock-based compensation expenses decreased by $723,047, or 60%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, due to forfeiture of options by terminated employees and options that contractually expired.
Operating Expenses
Professional fees decreased by $145,016, or 47%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, due to a decrease in legal and accounting fees.
Advertising and marketing expenses increased by $518,980 for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, due to investment into marketing efforts.
Selling, general, and administrative expenses decreased by $975,184, or 27%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to reductions in headcount during 2024 resulting in lower costs for compensation, insurance, and leases in 2025.
Stock-based compensation expenses decreased by $608,069, or 49%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to forfeiture of options by terminated employees and options that contractually expired.
| 21 |
Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024
Our financial results for the six months ended June 30, 2025 are summarized as follows in comparison to the six months ended June 30, 2024:
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Variance | ||||||||||
| Revenue: | ||||||||||||
| Security managed services | $ | 12,492,183 | $ | 14,238,959 | $ | (1,746,776 | ) | |||||
| Professional services | 1,092,627 | 1,398,723 | (306,096 | ) | ||||||||
| Cybersecurity software | 291,099 | 196,157 | 94,942 | |||||||||
| Total revenue | 13,875,909 | 15,833,839 | (1,957,930 | ) | ||||||||
| Cost of revenue: | ||||||||||||
| Security managed services | 3,813,175 | 4,888,652 | (1,075,477 | ) | ||||||||
| Professional services | 122,739 | 290,164 | (167,425 | ) | ||||||||
| Cybersecurity software | 92,045 | 58,769 | 33,276 | |||||||||
| Cost of payroll | 5,411,003 | 6,658,726 | (1,247,723 | ) | ||||||||
| Stock-based compensation | 1,018,505 | 2,297,397 | (1,278,892 | ) | ||||||||
| Total cost of revenue | 10,457,467 | 14,193,708 | (3,736,241 | ) | ||||||||
| Total gross profit | 3,418,442 | 1,640,131 | 1,778,311 | |||||||||
| Operating expenses: | ||||||||||||
| Professional fees | 679,857 | 802,261 | (122,404 | ) | ||||||||
| Advertising and marketing | 529,032 | 32,760 | 496,272 | |||||||||
| Selling, general, and administrative | 5,286,987 | 7,583,874 | (2,296,887 | ) | ||||||||
| Stock-based compensation | 961,698 | 2,359,742 | (1,398,044 | ) | ||||||||
| Total operating expenses | 7,457,574 | 10,778,637 | (3,321,063 | ) | ||||||||
| Loss from operations | (4,039,132 | ) | (9,138,506 | ) | 5,099,374 | |||||||
| Loss on extinguishment of convertible notes | (863,669 | ) | - | (863,669 | ) | |||||||
| Change in fair value of derivative liability | 5,467,610 | - | 5,467,610 | |||||||||
| Interest expense | (8,949,180 | ) | (1,373,766 | ) | (7,575,414 | ) | ||||||
| Other expense, net | (5,154 | ) | (34,918 | ) | 29,764 | |||||||
| Loss from continuing operations | $ | (8,389,525 | ) | $ | (10,547,190 | ) | $ | 2,157,665 | ||||
Revenue
Security managed services revenue decreased by $1,746,776, or 12%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to lower annual contract values among newly acquired customers.
Professional services revenue decreased by $306,096, or 22%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to lower customer projects.
Cybersecurity software revenue increased by $94,942, or 48%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to the initial launch of our suite of internally developed cybersecurity software products.
Expenses
Cost of Revenue
Security managed services cost of revenue decreased by $1,075,477, or 22%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to lower costs associated with existing client base.
Professional services cost of revenue decreased by $167,425, or 58%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, due to our decreased use of consultants.
Cybersecurity software cost of revenue increased by $33,276, or 57%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to the initial launch of our suite of internally developed cybersecurity software products.
Cost of payroll decreased by $1,247,723, or 19%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to headcount reductions.
Stock-based compensation expenses decreased by $1,278,892, or 56%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, due to the forfeiture of options by terminated employees and options that contractually expired.
| 22 |
Operating Expenses
Professional fees decreased by $122,404, or 15%, for the six months ended June 30, 2025 as compared to six months ended June 30, 2024, due to a decrease in legal and accounting fees.
Advertising and marketing expenses increased by $496,272 for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, due to marketing efforts initiated in 2025.
Selling, general, and administrative expenses decreased by $2,296,887, or 30%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to reductions in headcount during 2024 resulting in lower costs for compensation, insurance, and leases in 2025.
Stock-based compensation expenses decreased by $1,398,044, or 59%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to the forfeiture of options by terminated employees and options that contractually expired.
Other Income (Expense)
The loss on extinguishment of convertible notes increased by $863,669 for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 due to the conversion of certain convertible notes into shares of our common stock during 2025. No such conversion occurred in 2024.
Change in fair value of derivative liability increased by $5,467,610 for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 due to changes in the fair value of the derivative liability since the issuance of the related convertible notes payable during December 2024 and January 2025.
Interest expense increased by $7,575,414 for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to the accretion of convertible notes payable and the amortization of debt issuance costs associated with the issuance of certain convertible notes payable during December 2024 and January 2025.
Liquidity and Capital Resources
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the six months ended June 30, 2025, we incurred a net loss of $8,389,525, reported cash used in operations of $5,303,332, and expect to incur further losses through the end of 2025. Further, we have a working capital deficit of $14,460,071 as of June 30, 2025. As a result, substantial doubt about our ability to continue as a going concern exists. Our ability to fund ongoing operations is highly dependent upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles. We are evaluating strategies to obtain the required additional funding for future operations. These strategies may include obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring operations to grow revenues and decrease expenses.
On June 26, 2025, we filed a shelf registration statement on Form S-3, which was deemed effective on July 7, 2025 (“July 2025 Registration Statement”), to replace our expiring shelf registration statement on Form S-3. The July 2025 Registration Statement contains two prospectuses:
| 1) | a base prospectus that covers the potential offering, issuance, and sale from time to time of our common stock, preferred stock, warrants, debt securities, and units in one or more offerings with total proceeds of up to $100,000,000; and | |
| 2) | a sales agreement prospectus covering the potential offering, issuance, and sale from time to time of shares of our common stock having aggregate gross sales proceeds of up to $10,380,600 pursuant to our At-the-Market (“ATM”) sales agreement, dated June 14, 2022, with B. Riley Securities, Inc., Stifel, Nicolaus & Company, Incorporated and Boustead Securities, LLC. |
The July 2025 Registration Statement provides for up to $100,000,000 available funding from which we may issue our securities to fund current and future operations, assuming there is adequate demand for our securities. Although we have access to the July 2025 Registration Statement, based on our public float, as of the filing date of our Annual Report on Form 10-K for the year ended December 31, 2024, we are subject to Instruction I.B.6 to Form S-3, which is referred to as the “baby shelf” rules. For so long as our public float is less than $75,000,000, we may not sell more than the equivalent of one-third of our public float during any twelve consecutive months pursuant to the “baby shelf” rules. While alternative public and private transaction structures may be available, these may require additional time and costs, may result in substantial dilution to existing stockholders, in light of our current stock price, may impose operational restrictions on us, and may not be available on attractive terms or at all.
There can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all. As such, we may be unable to access further equity or debt financing when needed. The ability for us to continue as a going concern is dependent upon our ability to successfully implement our strategies and eventually attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments to the carrying amounts or classification of assets, liabilities, and reported expenses that may be necessary if we are unable to continue as a going concern.
| 23 |
Material Cash Requirements
Our material cash requirements included the following contractual obligations as of June 30, 2025:
Indebtedness
As of June 30, 2025, the carrying value of our outstanding debt obligations was $9,912,816, substantially all of which was scheduled to mature during the remainder of 2025 and during 2026. However, on August 4, 2025, we entered into Exchange Agreements to exchange certain outstanding convertible notes with aggregate principal of $8,070,000 and accrued interest of approximately $1,227,894 (collectively, the “Exchange Notes”) for an aggregate of 9,297,894 newly authorized shares of Series A Preferred Stock, par value $0.00001 per share. Upon the closing of the transactions contemplated by the Exchange Agreements, the Exchange Notes were cancelled. Refer to Note 15 in the accompanying unaudited condensed consolidated financial statements for further information.
Leases
As of June 30, 2025, the carrying value of our outstanding operating lease obligations was $523,167.
Sources of Funding to Satisfy Material Cash Requirements
Our principal sources of liquidity are our cash on hand, cash provided by operations, and our shelf registration statement on Form S-3 discussed above. However, we expect to incur further losses through the end of 2025, and there can be no assurance that we will be able to obtain additional liquidity from the shelf registration statement on Form S-3 when needed or under acceptable terms, if at all.
Working Capital Deficit
Our working capital deficit as of June 30, 2025 in comparison to our working capital deficit as of December 31, 2024, is summarized as follows:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Current assets | $ | 3,342,509 | $ | 3,481,071 | ||||
| Current liabilities | 17,802,580 | 24,955,647 | ||||||
| Working capital deficit | $ | (14,460,071 | ) | $ | (21,474,576 | ) | ||
The decrease in current assets is primarily due to the $452,987 increase in prepaid expenses and other current assets being more than offset by decreases in cash and cash equivalents and accounts receivable of $231,835 and $242,782, respectively. Cash and cash equivalents decreased due to the pay down of debt and accounts payable. Accounts receivable decreased due to collection efforts. Prepaid expenses increased due to increased prepaid marketing expenses.
The decrease in current liabilities is primarily due to decreases in accounts payable and accrued expenses, debt obligations, and the derivative liability of $2,810,470, $1,790,697, and $2,102,927, respectively. During the six months ended June 30, 2025, we paid down accounts payable and loans payable outstanding, certain convertible notes payable were converted into shares of our common stock, and the derivative liability was derecognized as a result of the conversion of the notes payable.
| 24 |
Cash Flows
Our cash flows for the six months ended June 30, 2025 in comparison to our cash flows for the six months ended June 30, 2024, are summarized as follows:
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (5,303,332 | ) | $ | (2,679,622 | ) | ||
| Net cash used in investing activities | - | (83,095 | ) | |||||
| Net cash provided by financing activities | 5,071,497 | 3,068,338 | ||||||
| Effect of exchange rates on cash and cash equivalents | - | (59,214 | ) | |||||
| Net (decrease) increase in cash and cash equivalents | $ | (231,835 | ) | $ | 246,407 | |||
Operating Activities
Net cash used in operating activities was $5,303,332 for the six months ended June 30, 2025 and was primarily due to cash used to fund a net loss of $8,389,525 (which includes non-cash expenses in the aggregate of $6,520,869), a decrease in accounts payable and accrued expenses and a decrease in deferred revenue. Net cash used in operating activities was $2,679,622 for the six months ended June 30, 2024 and was primarily due to cash used to fund a net loss of $15,046,075 (which includes non-cash expenses in the aggregate of $9,913,043), offset by a decrease in accounts receivable and an increase in deferred revenue.
Investing Activities
Net cash used in investing activities of $83,095 for the six months ended June 30, 2024 was due to purchases of property and equipment.
Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2025 was $5,071,497, which was primarily due to $2,684,754 from the sale of our common stock, $655,000 from the exercise of warrants, cash received from borrowings on our convertible loans payable and line of credit (net of debt issuance costs) of $9,861,983, offset by $8,132,411 in repayments of our loans payable and line of credit. Net cash provided by financing activities for the six months ended June 30, 2024 was $3,068,338, which was primarily due to cash received from borrowings on our loans payable and line of credit (net of debt issuance costs) of $6,694,412, offset by $3,781,021 in repayments of our loans payable and line of credit.
Critical Accounting Estimates
Our critical accounting estimates are more fully described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 31, 2025. There have been no material changes to our critical accounting estimates described in our 2024 Annual Report on Form 10-K.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Because we are a smaller reporting company, we are not required to provide the information called for by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.
In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as June 30, 2025, our disclosure controls and procedures were effective. This does not include an evaluation by our independent registered public accounting firm regarding our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are currently not a party to any material legal proceedings.
ITEM 1A. RISK FACTORS
We have disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, risk factors that materially affect our business, financial condition, or results of operations. There have been no material changes from the risk factors previously disclosed.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
During
the quarter ended June 30, 2025, none of our directors or officers
ITEM 6. EXHIBITS
| Incorporated by Reference | ||||||||
Exhibit Number |
Exhibit Description | Form | Exhibit | Filing Date | ||||
3.1 |
Certificate of Designations, Preferences and Rights of Series A Preferred Stock of the Registrant | Form 8-K | 3.1 | 8/5/2025 | ||||
| 10.1 | Exchange Agreement, dated August 4, 2025, by and between the Registrant and Hensley & Company, d/b/a Hensley Beverage Company | Form 8-K |
10.1 |
8/5/2025 | ||||
| 10.2 | Exchange Agreement, dated August 4, 2025, by and between the Registrant and J C Associates, Inc. | Form 8-K | 10.2 |
8/5/2025 | ||||
| 31.1* | Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer | |||||||
| 31.2* | Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer | |||||||
| 32.1* | Section 1350 Certification of Principal Executive Officer | |||||||
| 32.2* | Section 1350 Certification of Principal Financial Officer | |||||||
| 101.INS* | Inline XBRL Instance Document | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
*Filed/furnished herewith.
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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, thereunto duly authorized.
| CISO GLOBAL, INC. | ||
| By: | /s/ David G. Jemmett | |
| David G. Jemmett | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: | August 14, 2025 | |
| By: | /s/ Debra L. Smith | |
| Debra L. Smith | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
| Date: | August 14, 2025 | |
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FAQ
What was CISO Global's net loss for the periods shown in the 10-Q (symbol CISO)?
How many shares were outstanding for CISO at June 30, 2025?
Did CISO convert any convertible notes into equity in the period?
Is there any related-party debt disclosed?
What material financing costs affected the six-month results?
