CISO Global, Inc. (CISO) - Q1 2026 10-Q Summary
Business Context and Reporting Period
CISO Global, Inc. is a cybersecurity, compliance, and software company providing managed security, compliance services, and proprietary software. The company operates as a single reportable segment with all revenue and assets located in the United States. This report covers the quarterly period ended March 31, 2026. The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $6,220,325 | $7,162,322 |
| Gross Profit | $1,824,107 | $1,781,602 |
| Net Loss | $(1,588,906) | $(5,379,604) |
| Operating Cash Flow | $(879,816) | $(2,953,508) |
| Cash and Equivalents (End of Period) | $640,075 | $1,786,860 |
| Working Capital Deficit | $(5,523,902) | $(4,474,265) |
| Total Debt (Line of Credit + Loans) | $2,093,063 | N/A (Notes converted) |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased by 13% ($941,997) year-over-year. Security managed services revenue dropped 14% due to the loss of higher-revenue customers, while cybersecurity software revenue grew 32% following a product launch.
- Improved Net Loss: Net loss improved significantly by 70% ($3.79 million reduction) compared to Q1 2025. This improvement was driven primarily by a reduction in interest expense ($8.09 million decrease) and the elimination of non-cash charges related to convertible notes and derivative liabilities that were present in the prior year.
- Expense Reduction: Total operating expenses decreased by 6% ($223,190), largely due to reduced stock-based compensation ($565,079 total reduction across cost of revenue and operating expenses) and lower payroll costs.
- Liquidity Deterioration: Cash and cash equivalents decreased by $1.06 million during the quarter. The working capital deficit widened by approximately $1.05 million.
Outlook, Risks, and Contingencies
- Going Concern Doubt: The company has disclosed substantial doubt about its ability to continue as a going concern due to recurring losses, negative cash flows, and a working capital deficit. Continued operations depend on raising additional capital.
- Series B Preferred Stock Redemption: On April 1, 2026, B. Riley delivered a conversion notice for remaining Series B Preferred Stock. Due to the stock price being below the minimum conversion price, the company is obligated to redeem the shares. This triggers mandatory monthly cash payments of approximately $155,575 starting May 1, 2026, totaling $1,866,900 over eleven months.
- Nasdaq Compliance: The company received notice from Nasdaq that its common stock bid price has closed below $1.00 for 33 consecutive days. It has until June 29, 2026, to regain compliance or risk delisting.
- Debt Maturity: The company's line of credit with Aion matures on April 14, 2026. Renewal was pending finalization as of May 14, 2026.
Investor Verification Checklist
- Verify the status of the Series B Preferred Stock redemption and the company's ability to fund the $1.87 million in mandatory payments starting May 2026.
- Confirm the renewal status of the Line of Credit with Aion maturing in April 2026 and any potential default risks.
- Monitor the Nasdaq bid price compliance status to assess the risk of delisting before the June 29, 2026 deadline.
- Review the customer attrition rate in the managed services segment to evaluate revenue sustainability.
- Assess the availability of the Form S-3 shelf registration and the At-the-Market (ATM) facility for raising necessary equity capital.