CISO Global, Inc. (CISO) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. CISO Global, Inc. is a cybersecurity, compliance, and software company providing managed security, compliance services, and proprietary software. The company is classified as a non-accelerated filer, smaller reporting company, and emerging growth company. As of November 12, 2025, there were 44,046,343 shares of Common Stock outstanding.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | Q3 2024 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Total Revenue | $6,461,798 | $7,511,297 | $20,337,707 | $23,345,136 |
| Gross Profit | $1,607,314 | $1,034,068 | $5,025,756 | $2,674,199 |
| Net Income (Loss) | $2,532,428 | $(3,677,886) | $(5,857,097) | $(18,723,961) |
| Cash and Equivalents | $1,111,729 | $(N/A) | $1,111,729 | $(N/A) |
| Working Capital Deficit | $(5,376,502) | $(N/A) | $(5,376,502) | $(N/A) |
| Total Debt (Carrying Value) | $2,053,884 | $(N/A) | $2,053,884 | $(N/A) |
Note: Q3 2025 Net Income includes a significant non-cash gain on extinguishment of convertible notes.
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 14% year-over-year for the nine months ended September 30, 2025, driven by a 14% drop in security managed services and a 14% drop in professional services. Cybersecurity software revenue increased 43% due to the launch of new products.
- Profitability Improvement: Gross profit increased significantly to $5.0 million for the nine months ended September 30, 2025, compared to $2.7 million in the prior year period, despite lower revenue. This was driven by a 18% reduction in payroll costs and a 60% reduction in stock-based compensation expenses.
- Debt Restructuring: The company extinguished approximately $9.3 million in convertible notes by exchanging them for Series A Preferred Stock, resulting in a $5.3 million gain on extinguishment in Q3 2025. This action reduced total current liabilities by over $16 million compared to year-end 2024.
- Operating Loss Reduction: Loss from operations improved to $6.7 million for the nine months ended September 30, 2025, compared to $12.7 million in the same period in 2024.
Guidance, Outlook, and Risks
- Going Concern: The company has disclosed substantial doubt about its ability to continue as a going concern due to recurring losses, negative cash flows from operations, and a working capital deficit. Continued operations depend on raising additional capital.
- Financing Activities:
- Series A Preferred Stock: Issued 9,297,894 shares in exchange for convertible notes. These accrue 10% cumulative dividends.
- Series B Preferred Stock: Entered a Purchase Agreement with B. Riley to sell up to $15.0 million of Series B Convertible Preferred Stock over 18 months. No shares had been sold as of September 30, 2025.
- Shelf Registration: Renewed a Form S-3 shelf registration allowing for up to $100 million in securities offerings, subject to "baby shelf" rules limiting sales to one-third of public float.
- Outlook: Management expects to incur further losses through the end of 2025. The company is actively evaluating strategies to obtain funding, including equity financing and debt issuance.
- Risks: Risks include the inability to access further financing, potential dilution to existing shareholders, and the complexity of indirect tax liabilities.
Investor Verification Checklist
- Liquidity Runway: Verify the sufficiency of current cash ($1.1M) against the working capital deficit ($5.4M) and monthly burn rate.
- Debt Conversion Terms: Review the specific conversion terms and dividend accruals for the newly issued Series A and Series B Preferred Stock.
- Revenue Quality: Analyze the sustainability of the revenue decline in managed services versus the growth in software subscriptions.
- Financing Execution: Monitor the execution of the B. Riley Purchase Agreement and the utilization of the S-3 shelf registration.
- Subsequent Events: Note that on November 6, 2025, all Series A Preferred Stock was converted into Common Stock, which may impact share count and dilution.