CISO Global, Inc.

Previous wording

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

Current wording

Our operating results for the three months ended March 31, 2025 included the following:

Previous 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.

Current wording

Cybersecurity software revenue increased by $46,983, or 47%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an increase in subscriptions for our Checklight cybersecurity software.

Previous 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.

Current wording

Security managed services cost of revenue decreased by $550,102, or 22%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to lower hardware and software sales.

Previous 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.

Current wording

Professional services cost of revenue decreased by $105,388, or 68%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a decreased use of consultants.

Previous 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.

Current wording

Cybersecurity software cost of revenue increased by $2,725, or 9%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to our increase in Checklight subscriptions.

Previous 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.

Current wording

Cost of payroll decreased by $729,862, or 21%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to headcount reductions in 2024.

Previous 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.

Current wording

Advertising and marketing expenses decreased by $22,708, or 86%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to utilizing internal resources for advertising and marketing activities.

Previous 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.

Current wording

Selling, general, and administrative expenses decreased by $1,321,703, or 33%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to reductions in headcount during 2024 resulting in lower costs for compensation, insurance, and leases in 2025.

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 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.

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 three months ended March 31, 2025, we incurred a net loss of $5,379,604 and negative cash flows from operations of $2,953,508 and expect to incur further losses through the end of 2025. In the report accompanying our financial statements for the year ended December 31, 2024, 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 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.

Current wording

As of March 31, 2025, we had $289,409,103 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. Although we have access to our Shelf Registration Statement on Form S-3, based on our public float, as of the filing date of our Annual Report on Form 10-K for the year ended December 31, 2024, we are only permitted to utilize a “shelf” registration statement for primary offerings, including the Shelf Registration Statement, subject to Instruction I.B.6 to Form S-3, which is referred to as the “baby shelf” rules. For so long as our public float is less than $75,000,000, we may not sell more than the equivalent of one-third of our public float during any twelve consecutive months pursuant to the baby shelf rules. While alternative public and private transaction structures may be available, these may require additional time and costs, may result in substantial dilution to existing stockholders, in light of our current stock price, may impose operational restrictions on us, and may not be available on attractive terms or at all.

Previous 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:

Current wording

Our cash flows for the three months ended March 31, 2025 in comparison to our cash flows for the three months ended March 31, 2024, can be summarized as follows:

Previous 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.

Current wording

Net cash used in operating activities was $2,953,508 for the three months ended March 31, 2025 and was primarily due to cash used to fund a net loss of $5,379,604, adjusted for non-cash expenses in the aggregate of $4,563,916 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of a decrease in accounts payable and accrued expenses, and prepaids and other current assets. 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.

Previous 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.

Current wording

Net cash used in investing activities of zero and $75,571 for the three months ended March 31, 2025 and 2024, respectively, was due to purchases of property and equipment.

Previous 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.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $3,747,779, which was primarily due to $1,719,556 from the sale of our common stock, cash received from borrowings on our convertible loans payable and line of credit, net of debt issuance cost, of $4,591,358, offset by $2,563,135 in repayments of our loans payable and lines of credit. 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.

Previous wording

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the periods. Our material estimates and assumptions include the allowance for credit losses, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations, and assumptions used in the Black-Scholes option pricing model, such as expected volatility, risk-free interest rate, share price, and expected dividend rate. Certain of our estimates, including the carrying amount of intangible assets and goodwill, could be affected by external conditions, including those unique to us and general economic conditions. It is reasonably possible that these external factors could have an effect on our estimates and could cause actual results to materially differ from those estimates.

Current wording

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the periods. Our significant estimates and assumptions include the allowance for credit losses, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the valuation of convertible notes, derivative liabilities, the adequacy of insurance reserves, and assumptions used in the Black-Scholes option pricing model, such as expected volatility, risk-free interest rate, share price, and expected dividend rate could be affected by external conditions, including those unique to us and general economic conditions. It is reasonably possible that these external factors could have an effect on our estimates and could cause actual results to differ from those estimates.

Previous wording

Impairment of Long-Lived and Intangible Assets

Current wording

Impairment of Long-Lived Assets

Previous wording

We will periodically evaluate the carrying value of long-lived and intangible assets to be held and used when events and circumstances warrant such a review and at least annually. The carrying value of a long-lived and intangible asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived and intangible assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

Current wording

We will periodically evaluate the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review and at least annually. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily by using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

Previous wording

Our agreements with clients are primarily service contracts that range in duration from a few months to one year. We recognize revenue when control of these services is transferred to the client for an amount, referred to as the transaction price, which reflects the consideration to which we are expected to be entitled in exchange for those goods or services.

Current wording

Our agreements with clients are primarily service contracts that range in duration from a few months to three year. We recognize revenue when control of these services is transferred to the client for an amount, referred to as the transaction price, which reflects the consideration to which we are expected to be entitled in exchange for those goods or services.

Previous wording

For the majority of our contracts, we receive non-refundable upfront payments. We do not adjust the promised amount of consideration for the effects of a significant financing component since we expect, at contract inception, that the period between the time of transfer of the promised goods or services to the client and the time the client pays for these goods or services to be generally one year or less. Our credit terms to clients generally average 30 days, although in some cases payments are required in 15 days.

Current wording

We do not adjust the promised amount of consideration for the effects of a significant financing component since we expect, at contract inception, that the period between the time of transfer of the promised goods or services to the client and the time the client pays for these goods or services to be generally one year or less. Our credit terms to clients generally average 30 days, although in some cases payments are required in 15 days.