CISO Global Inc

Previous wording

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

Current wording

Our operating results for the nine months ended September 30, 2024 included the following:

Previous wording

Professional services revenue decreased by $288,081, or 31%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to lower customer projects.

Current wording

Professional services revenue decreased by $588,016, or 57%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to lower customer projects.

Previous 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.

Current wording

Cybersecurity software revenue increased by $108,570, or 100%, for the three months ended September 30, 2024 as compared to the September months ended September 30, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Previous 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.

Current wording

Professional services cost of revenue decreased by $106,848, or 56%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to our decreased use of consultants.

Previous 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.

Current wording

Cybersecurity software cost of revenue increased by $29,939, or 100%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Previous 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.

Current wording

Cost of payroll decreased by $951,712, or 24%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to headcount reductions.

Previous 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.

Current wording

Professional fees decreased by $422,027, or 65%, for the three months ended September 30, 2024 as compared to the three months ended September 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 $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.

Current wording

Advertising and marketing expenses decreased by $114,975, or 99%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to utilization of more internal marketing resources.

Previous 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.

Current wording

Selling, general, and administrative expenses decreased by $1,311,207, or 30%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to our analysis of our carrying amount of intangible assets being impaired for the three months ended September 30, 2023, reductions in headcount, and lower costs for insurance and lease expenses for the three months ended September 30, 2024.

Previous wording

Comparison of the Six Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

Current wording

Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

Previous wording

Our financial results for the six months ended June 30, 2024 are summarized as follows in comparison to the six months ended June 30, 2023:

Current wording

Our financial results for the nine months ended September 30, 2024 are summarized as follows in comparison to the nine months ended September 30, 2023:

Previous wording

Professional services revenue decreased by $631,659, or 31%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to lower customer projects.

Current wording

Professional services revenue decreased by $1,219,675, or 40%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to lower customer projects.

Previous wording

Cybersecurity software revenue increased by $196,157, or 100%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Current wording

Cybersecurity software revenue increased by $304,727, or 100%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Previous wording

Security managed services revenue decreased by $816,117, or 5%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to lower hardware and software sales.

Current wording

Security managed services cost of revenue decreased by $344,529, or 5%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to lower hardware and software sales.

Previous wording

Professional services cost of revenue increased by $36,376, or 14%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, due to our increased use of consultants.

Current wording

Professional services cost of revenue decreased by $70,472, or 16%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, due to our decreased use of consultants.

Previous wording

Cybersecurity software cost of revenue increased by $58,769, or 100%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 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 $87,708, or 100%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to the initial launch of our suite of internally developed cybersecurity software products.

Previous wording

Cost of payroll decreased by $1,763,660, or 21%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to headcount reductions.

Current wording

Cost of payroll decreased by $2,715,372, or 22%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to headcount reductions.

Previous 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.

Current wording

Stock-based compensation expenses decreased by $425,481, or 11%, for the nine months ended September 30, 2024 as compared to the nine months ended September 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, the decline in our share price which produces a lower fair value of our option awards to recognize as stock-based compensation and the timing of the recognition of the reversal of expense for option forfeited by former employees in 2023.

Previous wording

Professional fees decreased by $1,249,378, or 61%, for the six months ended June 30, 2024 as compared to six 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.

Current wording

Professional fees decreased by $1,671,405, or 62%, for the nine months ended September 30, 2024 as compared to nine months ended September 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 $120,861, or 79%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, due to utilization of more internal marketing resources.

Current wording

Advertising and marketing expenses decreased by $235,836, or 87%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, due to utilization of more internal marketing resources.

Previous wording

Selling, general, and administrative expenses decreased by $1,930,736, or 20%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to our analysis of our carrying amount of intangible assets being impaired for the six months ended June 30, 2023, reductions in headcount, and lower costs for insurance and lease expenses for the six months ended June 30, 2024.

Current wording

Selling, general, and administrative expenses decreased by $3,241,943, or 23%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to our analysis of our carrying amount of intangible assets being impaired for the nine months ended September 30, 2023, reductions in headcount, and lower costs for insurance and lease expenses for the nine months ended September 30, 2024.

Previous wording

Impairment of goodwill decreased by $31,776,820, or 100%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, due to our analysis of our carrying amount of goodwill being impaired in 2023.

Current wording

Impairment of goodwill decreased by $31,776,820, or 100%, for the nine months ended September 30, 2024 as compared to the nine months ended September 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 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.

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 nine months ended September 30, 2024, we incurred a net loss of $18,723,961 and negative cash flows from operations of $3,582,726 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 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.

Current wording

As of September 30, 2024, we had $291,190,324 of available funding under our Shelf Registration Statement on Form 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 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.

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, additional borrowings under short-term credit facilities and on our new line of credit, and an increase in accounts payable and accrued expenses.

Previous 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:

Current wording

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

Previous 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.

Current wording

Net cash used in operating activities was $3,582,726 for the nine months ended September 30, 2024 and was primarily due to cash used to fund a net loss of $18,723,961, adjusted for non-cash expenses in the aggregate of $12,671,400 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 $6,704,498 for the nine months ended September 30, 2023 and was primarily due to cash used to fund a net loss of $69,677,615, adjusted for non-cash expenses in the aggregate of $56,748,217 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of a decrease in accounts receivable and increases in deferred revenue and accounts payable and accrued expenses.

Previous 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.

Current wording

Net cash provided by investing activities of $916,905 for the nine months ended September 30, 2024 was primarily due to the sale of our subsidiary vCISO. Net cash used in investing activities of $135,848 for the nine months ended September 30, 2023 was due to purchases of property and equipment.

Previous 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.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $2,105,679, 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 $4,743,680 in repayments of our loans payable and lines of credit. Net cash provided by financing activities for the nine months ended September 30, 2023 was $5,777,702, which was primarily due to cash received from the sale of our common stock of $6,682,198, $4,448,641 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 $11,756,420.