CISO

CISO Global, Inc. (CISO) - 2025 Form 10-K Summary

Business Context and Reporting Period

Company: CISO Global, Inc.
Reporting Period: Fiscal Year Ended December 31, 2025
Business Model: A cybersecurity, compliance, and software firm providing managed security services, professional services (incident response, forensics), and proprietary software (CISO Edge, CHECKLIGHT, Argo). The company operates as a single segment and focuses on a "technology-agnostic" staffing model and proprietary IP development.
Corporate Status: Emerging Growth Company (EGC) and Smaller Reporting Company. Listed on Nasdaq under symbol "CISO".

Key Financial Metrics (Year Ended Dec 31, 2025)

Material Changes vs. Prior Period

• Revenue Decline: Total revenue decreased by 13.5% ($4.1M) primarily due to a 14% drop in Security Managed Services revenue (loss of higher-revenue customers) and a 12% drop in Professional Services. Cybersecurity software revenue grew 34% ($151k) due to initial product launches.
• Improved Operating Loss: Operating loss narrowed by 40% ($5.8M improvement) driven by significant reductions in stock-based compensation (down 63% in cost of revenue and 50% in operating expenses) and lower payroll costs due to headcount reductions.
• Debt Restructuring: The company extinguished significant debt obligations. Convertible notes totaling approximately $9.3M were converted into Series A Preferred Stock (later converted to common stock), and other notes were converted to common stock. This resulted in a $4.4M gain on extinguishment of convertible notes.
• Derivative Liability: A $5.5M gain was recognized from the change in fair value of a derivative liability, which was subsequently derecognized upon conversion of related notes.
• Discontinued Operations: The company disposed of its Latin American subsidiaries in July 2024. The 2024 net loss included a $4.3M loss from discontinued operations; 2025 results reflect only continuing operations.

Guidance, Outlook, Risks, and Contingencies

• Going Concern Warning: The independent auditor's opinion includes an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern. This is due to recurring losses, negative cash flows from operations, and a working capital deficit. The company's ability to continue depends on raising additional capital.
• Liquidity Strategy: The company is pursuing equity financing, debt issuance, and operational restructuring. It has a $15M Preferred Equity Purchase Agreement with B. Riley (sold $2.3M as of filing) and a shelf registration for up to $100M in securities.
• Nasdaq Compliance: The company received notice from Nasdaq that its stock price closed below $1.00 for 33 consecutive days. It has 180 days (until June 29, 2026) to regain compliance or face delisting.
• Customer Concentration: One customer represented approximately 10% of total revenue and 17% of accounts receivable in 2025.
• Strategic Outlook: Management plans to shift from acquisition-driven growth to organic growth via proprietary software commercialization (Phase III strategy) to improve margins and scalability.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $1.7M cash balance against the $8M annual operating cash burn rate.
• Capital Raise Execution: Monitor progress on the B. Riley Preferred Stock agreement and the $100M shelf registration to confirm ability to fund operations.
• Nasdaq Status: Track the stock price to ensure it meets the $1.00 minimum bid price requirement by June 29, 2026, to avoid delisting.
• Revenue Quality: Assess the sustainability of revenue following the loss of key customers in 2025 and the reliance on a single customer for 10% of revenue.
• Debt Obligations: Review the terms of the remaining line of credit ($2.2M outstanding) and any new debt covenants that may restrict operations.