CISO Global Inc

Previous wording

Our operating results for the three months ended March 31, 2024 included the following:

Current wording

Our operating results for the six months ended June 30, 2024 included the following:

Previous wording

Cybersecurity software revenue increased by $100,283, or 100%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Current wording

Cybersecurity software revenue increased by $95,874, or 100%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Previous wording

Security managed services cost of revenue decreased by $905,079, or 16%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due tohigher hardware sales in our Latin American region for the three months ended March 31, 2023.

Current wording

Security managed services cost of revenue decreased by $382,759, or 14%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to lower hardware and software sales.

Previous wording

Professional services cost of revenue increased by $75,038, or 38%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to our increased use of consultants.

Current wording

Professional services cost of revenue increased by $10,734, or 9%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to our steady use of consultants.

Previous wording

Cybersecurity software cost of revenue increased by $30,505, or 100%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Current wording

Cybersecurity software cost of revenue increased by $28,264, or 100%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Previous wording

Cost of payroll decreased by $1,013,317, or 17%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to headcount reductions.

Current wording

Cost of payroll decreased by $637,212, or 17%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to headcount reductions.

Previous wording

Stock-based compensation expenses decreased by $670,834, or 38%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to outstanding option awards becoming fully vested, a decrease in the amount of new stock options awarded to our revenue generating employees, and the decline in our share price which produces a lower fair value of our option awards to recognize as stock-based compensation.

Current wording

Stock-based compensation expenses decreased by $497,034, or 29%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to outstanding option awards becoming fully vested, a decrease in the amount of new stock options awarded to our revenue generating employees, and the decline in our share price which produces a lower fair value of our option awards to recognize as stock-based compensation.

Previous wording

Professional fees decreased by $1,080,740, or 64%, for the three months ended March 31, 2024 as compared to three months ended March 31, 2023, due to an decrease in accounting, legal, and other professional fees incurred related to our periodic SEC filings and our efforts to raise additional capital.

Current wording

Professional fees decreased by $210,010, or 40%, for the three months ended June 30, 2024 as compared to three months ended June 30, 2023, due to a decrease in accounting, legal, and other professional fees incurred related to our periodic SEC filings and our efforts to raise additional capital.

Previous wording

Advertising and marketing expenses decreased by $87,088, or 75%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to utilization of more internal marketing resources.

Current wording

Advertising and marketing expenses decreased by $40,909, or 87%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to utilization of more internal marketing resources.

Previous wording

Selling, general, and administrative expenses decreased by $4,511,563, or 47%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to our analysis of our carrying amount of intangible assets being impaired for the three months ended March 31, 2023, reductions in headcount, and lower costs for insurance and lease expenses for the three months ended March 31, 2024.

Current wording

Selling, general, and administrative expenses decreased by $1,125,810, or 24%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to our analysis of our carrying amount of intangible assets being impaired for the three months ended June 30, 2023, reductions in headcount, and lower costs for insurance and lease expenses for the three months ended June 30, 2024.

Previous wording

Stock based compensation expenses decreased by $2,521,953, or 69%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to outstanding option awards becoming fully vested, a decrease in the amount of new stock options awarded to our employees, and the decline in our share price which produces a lower fair value of our option awards to recognize as stock-based compensation.

Current wording

Stock based compensation expenses decreased by $862,319, or 41%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to outstanding option awards becoming fully vested, a decrease in the amount of new stock options awarded to our employees, and the decline in our share price which produces a lower fair value of our option awards to recognize as stock-based compensation.

Previous wording

Impairment of goodwill decreased by $20,199,368, or 100%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to our analysis of our carrying amount of goodwill being impaired in 2023.

Current wording

Impairment of goodwill decreased by $16,330,839, or 100%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to our analysis of our carrying amount of goodwill being impaired in 2023.

Previous wording

The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfying liabilities in the normal course of business. For the three months ended March 31, 2024, we incurred a net loss of $6,609,199 and negative cash flows from operations of $1,408,632 and expect to incur further losses through the end of 2024. In the report accompanying our financial statements for the year ended December 31, 2023, our independent registered public accounting firm stated that our financial statements were prepared assuming that we would continue as a going concern and that they have substantial doubt as to our ability to do so based on our recurring losses from operations and need to raise additional capital. These condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should we be unable to continue as a going concern.

Current wording

The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfying liabilities in the normal course of business. For the six months ended June 30, 2024, we incurred a net loss of $15,046,075 and negative cash flows from operations of $2,679,622 and expect to incur further losses through the end of 2024. In the report accompanying our financial statements for the year ended December 31, 2023, our independent registered public accounting firm stated that our financial statements were prepared assuming that we would continue as a going concern and that they have substantial doubt as to our ability to do so based on our recurring losses from operations and need to raise additional capital. These condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should we be unable to continue as a going concern.

Previous wording

As of March 31, 2024, we had $291,301,171 of available funding under our Shelf Registration Statement on From S-3 from which we may issue our securities to fund current and future operations, assuming there is adequate demand for our securities.

Current wording

As of June 30, 2024, we had $291,190,324 of available funding under our Shelf Registration Statement on From S-3 from which we may issue our securities to fund current and future operations, assuming there is adequate demand for our securities.

Previous wording

The decrease in current assets is primarily due to an increase in cash and cash equivalents of $454,547, offset by a decrease in accounts receivable, net, of $1,947,567. The increase in current liabilities is primarily due to our $5,000,000 related party convertible note becoming due within the next year and net borrowings on our new line of credit of $2,300,708.

Current wording

The increase in current assets is primarily due to increases in our cash and cash equivalents from borrowings and collection of accounts receivable, offset by a decrease in accounts receivable due to the timing of receipt of customer payments. The increase in current liabilities is primarily due to our $5,000,000 related party convertible note coming due in March 2025 and net borrowings on our new line of credit and short-term borrowings of $3,628,473.

Previous wording

Our cash flows for the three months ended March 31, 2024 in comparison to our cash flows for the three months ended March 31, 2023, can be summarized as follows:

Current wording

Our cash flows for the six months ended June 30, 2024 in comparison to our cash flows for the six months ended June 30, 2023, can be summarized as follows:

Previous wording

Net cash used in operating activities was $1,408,633 for the three months ended March 31, 2024 and was primarily due to cash used to fund a net loss of $6,609,199, adjusted for non-cash expenses in the aggregate of $3,207,036 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of a decrease in accounts receivables, net, and an increase in deferred revenue. Net cash used in operating activities was $2,110,872 for the three months ended March 31, 2023 and was primarily due to cash used to fund a net loss of $34,841,689, adjusted for non-cash expenses in the aggregate of $29,809,522 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of an increase in current assets, and accounts payable and accrued expenses.

Current wording

Net cash used in operating activities was $2,679,622 for the six months ended June 30, 2024 and was primarily due to cash used to fund a net loss of $15,046,075, adjusted for non-cash expenses in the aggregate of $9,898,579 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of a decrease in accounts receivables, net, and an increase in deferred revenue. Net cash used in operating activities was $5,318,960 for the six months ended June 30, 2023 and was primarily due to cash used to fund a net loss of $64,170,352, adjusted for non-cash expenses in the aggregate of $55,321,005 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of an increase in accounts receivable, prepaid and other current assets, deferred revenue and accounts payable and accrued expenses.

Previous wording

Net cash used in investing activities of $75,571 for the three months ended March 31, 2024 was due to purchases of property and equipment. Net cash used in investing activities of $182,839 for the three months ended March 31, 2023 was due to purchases of property and equipment.

Current wording

Net cash used in investing activities of $83,095 for the six months ended June 30, 2024 was due to purchases of property and equipment. Net cash used in investing activities of $148,866 for the six months ended June 30, 2023 was due to purchases of property and equipment.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 was $2,014,034, which was primarily due to cash received from borrowings on our loans payable and lines of credit, net of debt issuance cost, of $4,571,583, offset by $2,605,636 in repayments of our loans payable and lines of credit. Net cash provided by financing activities for the three months ended March 31, 2023 was $4,238,797, which was primarily due to cash received from the sale of our common stock of $3,143,147, $1,912,500 in net proceeds from our loan payable, and $5,000,000 in proceeds from a related party convertible note payable, offset by aggregate repayments on loans payable and a convertible note payable of $6,279,547.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 was $3,068,338, which was primarily due to cash received from borrowings on our loans payable and lines of credit, net of debt issuance cost, of $6,694,412, offset by $3,781,021 in repayments of our loans payable and lines of credit. Net cash provided by financing activities for the six months ended June 30, 2023 was $5,493,207, which was primarily due to cash received from the sale of our common stock of $6,682,198, $2,122,522 in net proceeds from our loans payable, and $6,050,000 in proceeds from convertible notes payable, offset by aggregate repayments on loans payable and convertible notes payable of $9,847,980.

Previous wording

Based on our current business plan, we believe our cash balance as of the date of this filing, together with anticipated revenues, will be sufficient to meet our anticipated cash requirement for the near term. However, there can be no assurance that the current business plan will be achievable. Such conditions raise substantial doubts about our ability to continue as a going concern for one year from the date the condensed consolidated financial statements are issued.

Current wording

Based on our current business plan, we believe our cash balance as of the date of this filing, together with anticipated revenues and additional debt or equity financing, will be sufficient to meet our anticipated cash requirement for the near term. Upon obtaining additional debt of equity financing new investors may require that we take the Company private and no longer operate as a publicly traded company. However, there can be no assurance that the current business plan will be achievable. Such conditions raise substantial doubts about our ability to continue as a going concern for one year from the date the condensed consolidated financial statements are issued.

Previous wording

In order to improve our liquidity, in addition to a planned reduction in overhead costs, we are actively pursuing additional debt and/or equity financing through discussions with investment bankers and private investors. There can be no assurance that we will be successful in our efforts to secure additional financing.

Current wording

In order to improve our liquidity, in addition to reductions in overhead costs, we are actively pursuing additional debt and/or equity financing through discussions with investment bankers and private investors. There can be no assurance that we will be successful in our efforts to secure additional financing.