CISO

CISO Global, Inc. (CISO) - Q2 2026 10-Q Summary

Business Context and Reporting Period

This summary covers the unaudited quarterly report on Form 10-Q for CISO Global, Inc. for the period ended June 30, 2026. CISO Global is a cybersecurity, compliance, and software company providing managed security, compliance services, and proprietary software. The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Total revenue decreased 13.7% year-over-year for the six months ended June 30, 2026 ($12.0M vs. $13.9M). This was driven by a 15% drop in security managed services revenue due to the loss of several high-revenue customers, partially offset by a 34% increase in cybersecurity software revenue.
• Expense Reduction: Operating expenses decreased 17.3% year-over-year ($6.2M vs. $7.5M). Significant reductions were seen in advertising and marketing (down 97%) due to transitioning to internal resources, and stock-based compensation (down 54%).
• Improved Loss Profile: The loss from operations improved to $2.9M for the six months ended June 30, 2026, compared to $4.0M in the prior year period. Net loss decreased significantly to $3.2M from $8.4M, largely due to the elimination of non-cash interest expense and derivative liability adjustments associated with convertible notes converted in late 2025.
• Liquidity Deterioration: Cash and cash equivalents decreased by $974,223 during the six-month period. The working capital deficit widened from $(4.5M) at year-end 2025 to $(8.5M) at June 30, 2026.

Guidance, Outlook, Risks, and Contingencies

• Going Concern: The company has disclosed substantial doubt about its ability to continue as a going concern due to recurring losses, negative operating cash flows, and a working capital deficit. Continued operations depend on raising additional capital through equity or debt financing.
• Debt Obligations: Following the conversion of Series B Preferred Stock in April 2026, the company is obligated to make monthly cash payments of approximately $155,575 through May 2027 (aggregate $1.87M). Additionally, the company has a line of credit and term loans totaling over $4.1M due within the next 12-18 months.
• Nasdaq Compliance: The company received notice from Nasdaq regarding failure to meet the minimum bid price requirement ($1.00). It has been granted a second 180-day compliance period until December 28, 2026. Failure to regain compliance may result in delisting. The company may effect a reverse stock split to cure the deficiency.
• Goodwill Impairment Risk: Management noted that a 1% decrease in stock price could trigger a goodwill impairment charge, which would adversely impact financial results.
• Outlook: Management expects to incur further losses through the end of 2026. There is no assurance that additional financing will be available on acceptable terms.

Investor Verification Checklist

• Verify the company's ability to secure additional financing to cover the $1.87M Series B redemption payments and ongoing operating losses.
• Monitor the status of the Nasdaq bid price compliance and any announcements regarding a reverse stock split.
• Assess the sustainability of revenue growth given the reported loss of high-revenue customers in the managed services segment.
• Review the maturity schedule of the $4.1M in current debt obligations and the company's cash burn rate.
• Check for any future goodwill impairment charges given the sensitivity to stock price declines.