Cycurion, Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 14, 2026
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Item 2. Results of Operations
Results of Operations
| Table MD&A 1: Consolidated Results of Operations | ||||
|---|---|---|---|---|
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||
| 2026 | 2025 | 2026 | 2025 | |
| Revenue | $3,757,076 | $3,887,915 | $7,025,696 | $7,757,965 |
| Cost of revenue | 2,663,739 | 3,651,978 | 5,244,001 | 6,844,265 |
| Gross profit | 1,093,337 | 235,937 | 1,781,695 | 913,700 |
| Gross margin | 29.1% | 6.1% | 25.4% | 11.8% |
| Operating expenses: | ||||
| Selling, general and administrative expenses | 2,641,320 | 2,313,343 | 5,385,015 | 2,650,716 |
| Stock compensation expenses | 336,722 | 1,012,443 | 652,555 | 1,012,443 |
| Business combination expenses | — | 676,228 | — | 11,114,122 |
| Total operating expenses | 2,978,042 | 4,002,014 | 6,037,570 | 14,777,281 |
| Operating loss | (1,884,705) | (3,766,077) | (4,255,875) | (13,863,581) |
| Interest income | 3,506 | — | 17,742 | — |
| Interest expense | (227,941) | (615,392) | (432,793) | (794,283) |
| Loss on debt settlement, net | (1,930,427) | (907,983) | (1,930,427) | (766,330) |
| Other expense | — | (962) | — | (114,706) |
| Other expense, net | (2,154,862) | (1,524,337) | (2,345,478) | (1,675,319) |
| Loss before income taxes | (4,039,567) | (5,290,414) | (6,601,353) | (15,538,900) |
| Provision for income tax | — | — | — | — |
| Net loss | (4,039,567) | (5,290,414) | (6,601,353) | (15,538,900) |
| Less: Net loss attributable to non-controlling interest | 283,793 | 101,659 | 717,117 | 101,659 |
| Net loss attributable to Cycurion | $(3,755,774) | $(5,188,755) | $(5,884,236) | $(15,437,241) |
Revenue
Revenues for the three months ended June 30, 2026 decreased $0.1 million or 3.4%, from $3.9 million for the three months ended June 30, 2025 compared to $3.8 million for the three months ended June 30, 2026. For the six months ended June 30, 2026, the company recognized $7.0 million, compared to $7.8 million for the same period in 2025. The overall decreases in revenue for both the three month and six month periods are primarily the result of a delay in a large contract start.
Cost of revenues
The cost of revenue for the three months ended June 30, 2026, was $2.7 million, compared to $3.7 million for the comparable period in 2025. The cost of revenue for the six months ended June 30, 2026 was $5.2 million, compared to $6.8 million for the six months ended June 30, 2025. Management has worked hard over the past year to improve margins, has translated into gross margins of 29.1% and 25.4% for the three and six months ended June 30, 2026, compared to 6.1% and 11.8% for the three and six months ended June 30, 2025.
Selling, general and administrative expenses
Our selling, general and administrative expenses increased significantly for the three and six months ended June 30, 2026 compared to the same period in 2025 due to the additional expenses associated with being a publicly traded company, full consolidation of SLG selling, general and administrative expenses and the addition of key individuals for the company's growth strategy.
Stock compensation expenses
Stock compensation expense was $0.3 million and $0.7 million for the three and six months ended June 30, 2026, respectively, compared to $1.0 million for both the three and six months ended June 30, 2025. The decrease is the result of timing of stock compensation grants.
Business combination expenses
Business combination expenses recognized during the three and six months ended June 30, 2025 are a result of the business combination with Western.
Interest income
Interest income was $3,506 and $17,742 for the three and six months ended June 30, 2026, respectively, as the company was able to invest cash in money market accounts. No interest earning assets existed in the six months ended June 30, 2025.
Interest expense
Interest expense for the three and six months ended June 30, 2026 was $0.2 million and $0.4 million, respectively. Compared to $0.6 million and $0.8 million for the three and six months ended June 30, 2025. The decrease in interest expense in 2026, compared to 2025, is the result of reducing debt levels through cash payments and conversions to equity. For further information refer to debt footnotes.
Loss on debt settlement, net
The company recognized a $1.9 million loss on debt settlement, net for both the three and six months ended June 30, 2026, compared to a loss of $0.9 million and $0.8 million for the three and six months ended June 30, 2025, respectively. These losses are the results of debt conversions as the company continues to strengthen the balance sheet through liability management.
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