CLOUDASTRUCTURE, INC.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
CSAI$1.57-12.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001683168-25-002122
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001683168-26-002561
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 85 current paragraphs.
39 unchanged; 7 reworded; 38 added; 28 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
Overview and Recent Developments
Current report
Compliance with NASDAQ Listing Rule 5550(a)(2)
Current report
On February 17, 2026, we received a letter (the “Notification Letter”) from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of our Class A common stock for the last 30 consecutive business days, we are not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2). The Notification Letter does not result in the immediate delisting of our Class A common stock from the Nasdaq Capital Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided a compliance period of 180 calendar days, or until August 17, 2026, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our Class A common stock must be at least $1.00 per share for a minimum of 10 consecutive business days during the 180-day compliance period.
Current report
If we do not regain compliance by August 17, 2026, we may be eligible for an additional 180 calendar day compliance period. To qualify for the additional compliance period, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market (except for the bid price requirement) and must provide written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If we do not regain compliance within the allotted compliance period(s), or if we are otherwise not eligible for an additional compliance period, Nasdaq will provide notice that our Class A common stock will be subject to delisting. At that time, we may appeal the delisting determination to a Nasdaq Hearings Panel.
Current report
We intend to monitor the closing bid price of our Class A common stock and will consider available options to regain compliance with the minimum bid price requirement, which may include effecting a reverse stock split, if necessary and if approved by our stockholders. There can be no assurance that we will be able to regain compliance with the minimum bid price requirement.
Current report
Revenues from cloud video surveillance and Remote Guarding services are billed based on the number of camera views deployed by the customer. Hardware revenues consist primarily of sales of cloud video recorders, surveillance cameras, and horn and axis speakers held in inventory. Installation services represent labor associated with the deployment and configuration of hardware and related software.
Current report
Hardware revenues are recognized upon shipment of the related products to the customer, while installation service revenues are recognized based on the percentage of completion of the services performed. Subscription revenues are billed either monthly or annually and are recognized over the contractual service period in accordance with ASC 606, Revenue from Contracts with Customers.
Current report
Our cost of goods sold primarily consists of hosting costs associated with the delivery of our cloud-based services, including data storage, bandwidth, and related infrastructure expenses. Cost of goods sold also includes the cost of equipment sold to customers, such as cloud video recorders, surveillance cameras, and related peripherals, as well as labor and third-party costs incurred in connection with installation services. In addition, cost of goods sold includes compensation, benefits, and other direct costs associated with personnel in our operations department who support the delivery, monitoring, and maintenance of our services.
Current report
Our operating expenses consist of general and administrative, research and development, and sales and marketing expenses, and include both cash and non-cash items.
Current report
Total operating expenses also include non-cash expenses, primarily consisting of depreciation expense, bad debt expense, and stock-based compensation expense.
Current report
Net revenues increased to $5,065,529 in 2025 from $1,364,293 in 2024, representing an increase of $3,701,236, or approximately 271%. The increase was driven by growth across all revenue categories, reflecting continued customer adoption of our services, expanded deployments, and increased sales activity.
Current report
Cloud Video Surveillance revenue increased to $767,026 in 2025 from $323,475 in 2024, an increase of $443,551, or approximately 137%. This increase was primarily attributable to a higher number of subscribed camera views resulting from new customer acquisitions and expansion of deployments with existing customers.
Current report
Remote Guarding revenue increased to $706,349 in 2025 from $282,849 in 2024, an increase of $423,500, or approximately 150%. The increase was driven by increased customer demand for remote monitoring services, as well as growth in the installed base of cameras eligible for remote guarding.
Current report
Hardware revenue increased to $1,464,603 in 2025 from $341,193 in 2024, an increase of $1,123,410, or approximately 329%. The increase was primarily due to higher volumes of hardware sold in connection with larger customer deployments and bundled service offerings compared to the prior year.
Current report
Other revenue, which includes installation services, door subscriptions, and other ancillary services, increased to $2,127,551 in 2025 from $416,776 in 2024, an increase of $1,710,775, or approximately 410%. This increase was largely attributable to higher installation activity associated with increased hardware sales, expanded customer deployments, and increased adoption of additional subscription-based services.
Current report
Overall, the increase in net revenues reflects continued execution of our growth strategy, expansion of our customer base, and increased penetration of our integrated hardware, installation, and subscription-based service offerings.
Current report
The significant increase in hardware and installation revenue during fiscal year 2025 was primarily attributable to initial deployment activity associated with new customer acquisitions and the expansion of existing customer relationships. As new customer locations are onboarded, we typically experience an initial period of higher hardware and installation revenue, followed by a shift toward recurring subscription-based revenue as those locations transition to ongoing cloud video surveillance and Remote Guarding services. We expect the proportion of recurring subscription revenue to increase over time as our installed base matures, although the timing and pace of this shift will depend on the rate of new customer acquisitions and the scope of future deployment activity.
Current report
Of total net revenues of $5,065,529 for the year ended December 31, 2025, approximately $1,473,375, or 29%, was derived from recurring subscription services (Cloud Video Surveillance and Remote Guarding), while the remaining $3,592,154, or 71%, was derived from non-recurring hardware sales and installation services.
Current report
Cost of goods sold increased to $3,576,688 in 2025 from $984,447 in 2024, representing an increase of $2,592,241, or approximately 263%. The increase was primarily attributable to higher service delivery costs associated with significant revenue growth, increased customer deployments, and expanded installation activity during 2025.
Current report
Hosting and data center bandwidth costs increased to $331,546 in 2025 from $273,128 in 2024, an increase of $58,418, or approximately 21%. This increase was primarily driven by higher data storage, bandwidth usage, and infrastructure costs resulting from growth in cloud video surveillance subscriptions and increased camera deployments.
Current report
Remote Guarding costs increased to $261,956 in 2025 from $114,440 in 2024, an increase of $147,516, or approximately 129%. The increase was primarily attributable to higher labor and monitoring costs associated with the expansion of Remote Guarding services and increased customer utilization, as well as costs related to the establishment of our India-based subsidiary, which commenced operations in July 2025.
Current report
Hardware costs increased to $754,873 in 2025 from $218,025 in 2024, an increase of $536,848, or approximately 246%. This increase was driven by higher volumes of hardware sold in connection with larger customer deployments and increased overall sales activity.
Current report
Installation labor costs increased to $2,228,313 in 2025 from $378,853 in 2024, an increase of $1,849,460, or approximately 488%. The increase was primarily attributable to a substantial increase in installation activity related to hardware sales and customer deployments, as well as increased internal and third-party labor costs required to support this growth.
Current report
Overall, the increase in cost of goods sold reflects higher service delivery, hardware, and installation costs incurred to support the Company’s significant revenue growth and expanded operational scale during 2025.
Current report
*General and administrative expenses.*General and administrative expenses increased to $2,439,401 in 2025 from $1,240,930 in 2024, an increase of $1,198,471, or approximately 97%. The increase was primarily driven by higher payroll and consulting expenses incurred to support the Company’s growth and expanded corporate infrastructure.
Current report
Overall, the increase in general and administrative expenses reflects investments made to support the Company’s growth, operational complexity, and corporate governance requirements.
Current report
*Research and development expenses.*Research and development expenses increased to $1,883,461 in 2025 from $1,266,229 in 2024, representing an increase of $617,232, or approximately 49%. The increase was primarily attributable to higher payroll and consulting expenses related to expanded product development efforts.
Current report
Overall, the increase in research and development expenses reflects the Company’s continued investment in its technology platform and product innovation to support long-term growth.
Current report
*Sales and marketing expenses.*Sales and marketing expenses were the largest component of operating expenses in 2025 and increased to $2,882,042 from $1,812,751 in 2024, representing an increase of $1,069,291, or approximately 59%. The increase was primarily attributable to higher payroll and increased sales and marketing program costs incurred to support revenue growth and customer acquisition.
Current report
Overall, the increase in sales and marketing expenses reflects the Company’s strategic investments in personnel and marketing initiatives to support continued revenue growth.
Current report
*Non-cash expenses.*Non-cash operating expenses increased to $2,429,509 in 2025 from $2,245,411 in 2024, representing an increase of $14,098, or approximately 8%. Non-cash expenses primarily consist of stock-based compensation, depreciation expense, and bad debt expense.
Current report
Overall, the change in non-cash operating expenses reflects higher equity-based compensation and depreciation, partially offset by a reduction in bad debt expense.
Current report
As a result of the foregoing, net loss for the year ended December 31, 2025 was approximately $8,462,000, compared to $6,535,000 for the year ended December 31, 2024, representing an increase in net loss of approximately $1,927,000, or approximately 29%.
Current report
Revenue and cost of sales resulted in gross profit of approximately $1,489,000 for the year ended December 31, 2025, compared to gross profit of approximately $374,000 for the year ended December 31, 2024. Despite the significant improvement in gross profit, the increase in net loss was primarily attributable to higher operating expenses, including increased sales and marketing, general and administrative, and research and development expenses incurred to support revenue growth, expand operations, and invest in personnel, technology, and corporate infrastructure.
Current report
Overall, the increase in net loss reflects the Company’s continued investment in growth initiatives and operational scale, which exceeded the improvements in gross profit during the year.
Current report
Net cash used in operating activities was $6,917,000 for the year ended December 31, 2025, compared to $3,277,000 for the year ended December 31, 2024. The increase in cash used in operating activities was primarily attributable to the Company’s increased net loss and higher operating expenses associated with expanded sales and marketing, research and development, and general and administrative activities. These increases were partially offset by changes in working capital, including timing of customer collections and vendor payments.
Current report
Net cash used in investing activities was $315,000 for the year ended December 31, 2025, compared to $27,000 for the year ended December 31, 2024. Cash used in investing activities during 2025 primarily related to purchases of property and equipment to support the Company’s operational growth, including investments in technology infrastructure and office equipment.
Current report
Net cash provided by financing activities was $15,633,000 for the year ended December 31, 2025, compared to net cash used in financing activities of $685,000 for the year ended December 31, 2024. The increase was primarily attributable to proceeds from financing transactions with Streeterville completed during 2025, which were used to fund operating losses, support growth initiatives, and strengthen the Company’s liquidity position.
Removed paragraphs (28)
Previous report
Results of Operations
Previous report
We bill cloud video surveillance and remote guarding according to the number of camera views. Hardware mainly includes cloud video recorders, surveillance cameras, horn and axis speakers kept in inventory. Installation services include the labor needed to set in place said hardware and software.
Previous report
We recognize revenue when a customer obtains control of promised goods or services. Typically, our customers pay up front annually for our services and sign subscription and remote guarding agreements governing the terms of service. In those instances, revenue is recognized ratably over the period that commences on the subscription start date and ending on the date the subscription term expires. Some of our customers require monthly billing arrangements, in which case revenue is recognized on a monthly basis. Revenue generated from sales of hardware is generally recognized at the time of delivery. Revenue generated from door and video services is generally recognized at the completion of the professional services.
Previous report
Our cost of goods sold primarily consists of hosting costs, the costs of equipment sold, installation costs and the costs of the operations department.
Previous report
The majority of our net revenue for the year ended December 31, 2024, and the year ended December 31, 2023 was comprised of subscription revenue generated from our core business services (cloud video surveillance and remote guarding) and hardware sales.
Previous report
Total revenue increased approximately $757,000, or approximately 125%, from approximately $607,000 for the year ended December 31, 2023, compared to approximately $1,364,000 for the year ended December 31, 2024. This increase is due to our having signed 30% more new locations during the year ended December 21, 2024, compared to the same period in 2023. Cloud video surveillance subscriptions increased by approximately 48%, remote guarding increased by approximately 404%, and hardware increased by approximately 250% over the same period in 2023.
Previous report
Our cost of goods sold increased approximately $265,000, or approximately 36%, from approximately $725,000 for the year ended December 31, 2023, compared to approximately $990,000 for the year ended December 31, 2024. This increase was the result of increased sales and the completion of more installation projects in the year ended December 31, 2024, compared to the same period in 2023. This increase was offset by a reduction of hosting costs of approximately 37%.
Previous report
Our operating expenses for the year ended December 31, 2024, were approximately $6,565,000 compared to approximately $8,594,000 for the year ended December 31, 2023, a decrease of approximately $2,029,000 or approximately 24%.
Previous report
The largest component of our operating expenses were non-cash expenses, which were approximately $2,245,000, for the year ended December 31, 2024, compared to approximately $1,674,000 for the year ended December 31, 2023, an increase of approximately $571,000 or approximately 34%. This increase in non-cash expenses was primarily due to an increase in stock compensation expense of approximately $881,000, a decrease in loss on impairment of goodwill of approximately $1,674,000, a decrease in depreciation of approximately $137,000 and an increase in bad debt expense of approximately $60,660.
Previous report
The second largest component of our operating expenses were sales and marketing expenses, which were approximately $1,813,000 for the year ended December 31, 2024, compared to approximately $2,541,000 for the year ended December 31, 2023, a decrease of approximately $728,000 or approximately 29%. This decrease in sales and marketing expenses was primarily due to a decrease in payroll for our internal sales and marketing staff of approximately $113,000, a decrease in fees related to consulting services of approximately $26,000, and a decrease in trade show and corporate event expenses and content creation services from third-party marketing service providers of approximately $278,000.
Previous report
The remainder of our operating expenses were primarily comprised of general and administrative expenses and research and development expenses.
Previous report
General and administrative expenses were approximately $1,241,000 for the year ended December 31, 2024, compared to approximately $2,365,000 for the year ended December 31, 2023, a decrease of approximately $1,124,000 or approximately 48%. This decrease in general and administrative expenses was primarily due to decreases in consulting fees of approximately $118,000, payroll of approximately $226,000, and other general operating expenses of approximately $115,000.
Previous report
Research and development expenses were primarily comprised of engineering and development expenses, which were approximately $1,266,000 for the year ended December 31, 2024, compared to approximately $2,014,000 for the year ended December 31, 2023, a decrease of approximately $748,000 or approximately 37%. This decrease in engineering and development expenses was due to a decrease in payroll of approximately $310,000, a decrease in consulting fees of approximately $67,000 and $38,000 decrease in equipment and prototype expenses.
Previous report
As a result of the foregoing, net loss for the year ended December 31, 2024, was approximately $6,535,000 compared to $9,007,000 for the year ended December 31, 2023, a decrease of approximately $2,472,000 or approximately 27%. Revenue and cost of sales described above resulted in gross profit of $374K in the year ended December 31, 2024 compared to a gross loss of $118K for the same period in 2023.
Previous report
Overview
Previous report
We continue to experience negative cash flows from operations as we expand our business. Our cash flows from operating activities are significantly affected by our cash investments to support the growth of our business in areas such as product and service development and selling, general and administrative. Our operating cash flows are also affected by our working capital needs to support growth and fluctuations in personnel-related expenditures, accounts payable and other current assets and liabilities.
Previous report
Net cash used in operating activities for the year ended December 31, 2024, was approximately $3,277,000 which reflects our net loss of $6,535,000 and increases in accounts receivable of $155,000 and deferred revenue of $292,000. Accounts payable increased by $601,000 and the rest was offset by non-cash activities including stock-based compensation of $1,154,000 and impairment of goodwill of $1,674,000.
Previous report
Net cash used in operating activities for the year ended December 31, 2023, was approximately $5,716,000 which reflects our net loss of $9,006,699 and increases in accounts receivable of $49,597 and deferred revenue of $144,074. Accounts payable decreased by $118,789 and the rest was offset by non-cash activities including stock-based compensation of $1,154,222 and impairment of goodwill of $1,673,933.
Previous report
Our investing activities have consisted primarily of business combinations and the purchases of assets and equipment. We have invested in assets and equipment to support our headcount growth.
Previous report
Net cash used in investing activities for the year ended December 31, 2024, was approximately $27,000, which was entirely attributable to purchases of fixed assets.
Previous report
Net cash used in investing activities for the year ended December 31, 2023, was approximately $43,000, also entirely attributable to purchases of fixed assets.
Previous report
On July 10, 2023, we received a “Wells Notice” from the Enforcement Division of the SEC alleging violations of Sections 17(a)(1), 17(a)(2), and 17(a)(3) of the Securities Act, and Section 10(b) of the Exchange Act, and Rules 10b-5(a), (b) and (c) under the Exchange Act. On September 27, 2023, without admitting or denying the findings, we submitted an offer of settlement to the SEC and agreed to the imposition of an order (the “Order”) which, among other things, states that we violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the Securities Act. We also agreed to pay a penalty of $558,071, which has been paid in full.
Previous report
As a result of the Order (the “Disqualification Event”), we have been disqualified from relying on certain exemptions from registration under the Securities Act for offers and sales of our securities for a period of five years, including the exemption provided by Regulation A.
Previous report
On November 25, 2024, we entered into a Securities Purchase Agreement, as amended by Amendment No. 1 to Securities Purchase Agreement, dated January 16, 2025, and Amendment No. 2 to Securities Purchase Agreement, dated January 29, 2025 (the “Series 1 Equity Financing”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”) pursuant to the terms of which we agreed to issue and sell $6,300,000 of newly designated Series 1 Convertible Preferred Stock, par value $0.0001 per share (the “Series 1 Preferred”) and 720,000 pre-delivery sharesto Streeterville. The Series 1 Equity Financing closed on January 29, 2025.
Previous report
On November 25, 2024, we also entered into an Equity Purchase Agreement (the “Equity Purchase Agreement” or “Equity Line”) with Atlas Sciences, LLC, a Utah limited liability company (“Atlas”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Atlas will purchase up to an aggregate of $50,000,000 of our Class A common stock over the 24-month term of the Equity Line.
Previous report
On March 21, 2025, we entered into a second Securities Purchase Agreement(the “Series 2 Securities Purchase Agreement” or “Series 2 Equity Financing”) with Streeterville pursuant to the terms of which we agreed to issue and sell up to $40,000,000 of newly designated Series 2 Convertible Preferred Stock, par value $0.0001 per share (the “Series 2 Preferred” and, together with the Series 1 Preferred, the “Preferred Stock”) to Streeterville. On March 25, 2025, at the initial closing of the Series 2 Equity Financing (the “Closing Date”), we issued and sold 4,500 shares of Series 2 Preferred to Streeterville, for an aggregate purchase price of $4,500,000.
Previous report
Pursuant to the terms of the Series 2 Securities Purchase Agreement, Streeterville will also have, for a period ending on the later of (i) two years from the Closing Date, and (ii) the date on which it no longer holds any Preferred Stock, the right, but not the obligation, to reinvest up to an additional $4,000,000 into the Company in one or more tranches (of at least $100,000) at its election (the “Reinvestment Right”). The Reinvestment Right supersedes and replaces the reinvestment right granted to Streeterville in connection with the Series 1 Equity Financing. In addition, Streeterville will have the right, for a period ending six months after it no longer holds any Preferred Stock or is not otherwise owed any obligations from us, to participate in up to 30% of the amount sold in any debt or equity financing that we consummate (the “Participation Right”). The Participation Right supersedes and replaces the participation right granted to Streeterville in connection with the Series 1 Equity Financing.
Previous report
Our net cash used in financing activities for the year ended December 31, 2024, was approximately $685,000 compared to net cash provided by financing activities of approximately $387,000 for the year ended December 31, 2023, a decrease of approximately $1,071,000 or 277%. This decrease in cash used in financing activities is the result of the Disqualification Event and our inability to continue our Regulation A offering and initial expenses of approximately $692,000 incurred in connection with the our registration statement on Form S-1, as amended (File No. 333-282038), related to our direct listing on Nasdaq.
Reworded paragraphs (7)
Previous wording
We operated as a small Silicon Valley startup until early 2021 when we raised over $35 million in funding under Regulation A of the Securities Act of 1933, as amended (the “Securities Act”). With these funds we quickly built a sales, marketing and support structure and achieved a degree of early success in the property management space. As of the date of this Form 10-K, we have contracts in place with five of the top 10 property management companies on the National Multifamily Housing Council’s (“NMHC’s”) 2024 NMCH 50 list (Greystar Real Estate Partners, Avenue5 Residential, LLC, Cushman & Wakefield, BH Management Services, LLC and FPI Management, Inc.). Our cloud-based solutions allow our customers to provide real-time safety and security solutions for their properties, as well as easily manage security across all of their locations. As of the date of this Form 10-K, we are focused on expanding into more of our existing top tier customer locations, acquiring additional customers in the property management (“proptech”) space, and we anticipate entering into additional markets in 2025.
Current wording
We operated as a small Silicon Valley startup until early 2021 when we raised over $35 million in funding under Regulation A of the Securities Act of 1933, as amended (the “Securities Act”). With these funds, we quickly built a sales, marketing and support structure and achieved a degree of early success in the property management space. As of the date of this Form 10-K, we have contracts in place with five of the top 10 property management companies on the National Multifamily Housing Council’s (“NMHC’s”) 2024 NMCH 50 list (Greystar Real Estate Partners, Avenue5 Residential, LLC, Cushman & Wakefield, BH Management Services, LLC and FPI Management, Inc.). Our cloud-based solutions allow our customers to provide real-time safety and security solutions for their properties, as well as easily manage security across all of their locations. As of the date of this Form 10-K, we are focused on expanding into more of our existing top tier customer locations and acquiring additional customers in the property management (“proptech”) space, and we anticipate entering into additional markets in 2026.
Previous wording
Our net revenues primarily consist of revenues generated from subscriptions to our core business services (cloud video surveillance and remote guarding), hardware sales, and installation services.
Current wording
Our net revenues are primarily derived from subscriptions to our core business services, including cloud video surveillance and Remote Guarding, as well as from hardware sales and installation services.
Previous wording
Our operating expenses consist of: general and administrative expenses, which are primarily salaries, professional fees, consulting costs and expenses related to the administrative functions of the Company; research and development expenses, which consist primarily of product development costs and salaries; and sales and marketing expenses, which represent public relations, advertising and direct marketing costs, as well as the associated personnel costs.
Current wording
General and administrative expenses primarily include salaries and benefits, professional fees, consulting costs, and other expenses related to the administrative and corporate functions of the Company. Research and development expenses consist primarily of product development costs, including employee compensation and related expenses. Sales and marketing expenses include public relations, advertising, and direct marketing costs, as well as personnel-related expenses associated with sales and marketing activities.
Previous wording
Since inception we have relied primarily on financing activities to fund our operations, including raising over $35 million in funding in an offering under Regulation A of the Securities Act, and through the sale of preferred stock.
Current wording
Since inception we have relied primarily on financing activities to fund our operations, including raising over $35 million in funding in an offering under Regulation A of the Securities Act, and through the sale of preferred stock. Please seeNote 5, Share Capital below.
Previous wording
We anticipate incurring additional losses for the foreseeable future, and we may never become profitable. Furthermore, while we have decreased our operating expenses by reducing our personnel and consultant expenditures, reducing salaries for our executives and employees, and reducing our overall spending, we nevertheless expect expenses to increase in connection with our ongoing activities, particularly as we continue development of our existing and new products and services. In addition, we expect to incur further costs and expenses associated with being a public company.
Current wording
We anticipate incurring additional losses for the foreseeable future, and we may never become profitable. As described above, our operating expenses increased significantly from 2024 to 2025 as a result of our growth. We expect operating expenses to continue to increase in connection with our ongoing activities, particularly as we continue development of our existing and new products and services. In addition, we expect to continue to incur further costs and expenses associated with being a public company and working to maintain the listing of our Class A common stock on Nasdaq.
Previous wording
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is dependent on our ability to further implement our business plan, raise capital, and generate revenues. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. We have incurred operating losses and negative cash flows from operations since inception. As of December 31, 2024, we had an accumulated deficit of approximately $41,000,000. Management expects to continue to incur operating losses and negative cash flows for the foreseeable future.
Current wording
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is dependent on our ability to further implement our business plan, raise capital, and generate revenues. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. We have incurred operating losses and negative cash flows from operations since inception. As of December 31, 2025, we had an accumulated deficit of approximately $49,000,000. Management expects to continue to incur operating losses and negative cash flows for the foreseeable future.
Previous wording
As of the year ended December 31, 2024, we had approximately $52,000 of cash on hand and approximately $577,000 of working capital deficiency, and our anticipated operating requirements for the next twelve months, assuming the maintenance of our current operations, exceed our available capital resources. We believe that the Equity Financing that we have entered into with Streeterville and Equity Line that we have entered into with Atlas will provide us with, and allow us to maintain, stockholders’ equity well in excess of the required minimum under Nasdaq Listing Rule 5505(b) as well as enable us to fund our operations through at least June 30, 2026. Notwithstanding, we also intend to raise additional capital pursuant to one or more registered offerings of equity or debt securities. However, if we are unable to raise additional capital or otherwise obtain funding as and when needed or on attractive terms, we could be forced to reduce operations or delay or eliminate new or existing products and services, which could raise substantial doubt about our ability to continue as a going concern.
Current wording
As of December 31, 2025, we had approximately $8,453,000 of cash on hand and approximately $8,605,000 of net working capital (including cash on hand), and our anticipated operating requirements for the next 12 months, assuming the maintenance of our current operations, do not exceed our available capital resources. We believe that the Series 2 Equity Financing, the Equity Line, and the ATM Facility that we have in place, as described inNote 5, Share Capitalbelow, will provide us with, and allow us to maintain, stockholders’ equity in excess of the required minimum under Nasdaq Listing Rule 5505(b) as well as enable us to fund our operations through at least June 30, 2027. Nasdaq Listing Rule 5505(b)(1) requires that we maintain stockholders' equity of at least $2.5 million for continued listing on the Nasdaq Capital Market. As of December 31, 2025, our stockholders' equity was approximately $8.9 million. Notwithstanding, we may also raise additional capital pursuant to one or more registered offerings of equity or debt securities.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
However, if we are unable to raise additional capital or otherwise obtain funding as and when needed or on attractive terms, we could be forced to reduce operations or delay or eliminate new or existing products and services, which could raise substantial doubt about our ability to continue as a going concern. Our ability to raise additional capital or otherwise obtain necessary funding is likely to be significantly dependent on our ability to maintain the listing of our Class A common stock on Nasdaq.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous report — wording carried elsewhere
The Equity Financing and Equity Line will provide us with, and allow us to maintain, stockholders’ equity well in excess of the required minimum under Nasdaq Listing Rule 5505(b) as well as enable us to fund our operations through at least June 30, 2026.