CISO Global, Inc. Form 8-K Summary
Business Context and Reporting Period
CISO Global, Inc. (CISO) filed a Current Report on Form 8-K on September 24, 2025, regarding the entry into a material definitive agreement. The company is incorporated in Delaware and its common stock trades on The Nasdaq Stock Market LLC under the symbol "CISO."
Key Financial Metrics and Transaction Details
The filing details a Preferred Equity Purchase Agreement with B. Riley Principal Capital I ("B. Riley"). Key financial terms include:
- Total Commitment: Up to $15.0 million in Series B Convertible Preferred Stock.
- Initial Purchase: $2.3 million of Series B Preferred Stock.
- Purchase Price: $960 per share (a 4% original issue discount from the $1,000 stated value).
- Issuance Limits: Sales may occur in increments of $100,000, with a maximum of $500,000 weekly.
- Placement Fee: B. Riley will receive a 3.5% cash fee on sales.
- Termination Fee: CISO must pay $1.0 million in liquidated damages if it terminates the agreement early.
- Use of Proceeds: Working capital, general corporate purposes, and payment of debt obligations.
The filing does not provide specific revenue, profit, cash flow, or existing debt figures for the reporting period.
Material Changes and Terms
The primary material change is the authorization of 15,625 shares of Series B Preferred Stock. Key structural terms include:
- Duration: The agreement is effective for 18 months, terminating on March 24, 2027, or earlier if the $15.0 million cap is reached.
- Conversion Rights: Shares are convertible into Common Stock. The conversion price is based on a discount to the lowest volume-weighted average price (105% for the first $500,000 of stated value; 95% thereafter), subject to a minimum conversion price of $0.40 per share.
- Exchange Cap: Conversion is limited to 19.99% of outstanding Common Stock (6,821,115 shares) without stockholder approval. A 9.99% beneficial ownership limitation also applies.
- Ranking: Series B Preferred Stock ranks senior to Common Stock but junior to Series A Preferred Stock.
- Lock-up: CISO agreed not to issue Common Stock or equivalents until October 23, 2025.
Outlook, Risks, and Contingencies
Management expects to use proceeds for working capital and debt repayment. The company is required to use reasonable best efforts to obtain stockholder approval for the Exchange Cap within 90 days of the agreement date. Risks include the potential dilution of existing shareholders upon conversion and the obligation to pay a $1.0 million termination fee if the company exits the agreement early. The transaction relies on exemptions from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D.
Investor Verification Checklist
- Verify the current trading price of CISO Common Stock to assess the potential dilution impact of the conversion price formula (95%-105% of VWAP).
- Confirm the status of the stockholder vote required to lift the 19.99% Exchange Cap.
- Review the company's current debt obligations to understand the urgency of the "payment of debt obligations" use of proceeds.
- Monitor the weekly issuance schedule to track the actual capital raised versus the $15.0 million commitment.
- Check for any existing Series A Preferred Stock terms that may impact the liquidation preference of the new Series B.