Castellum, Inc.

Previous wording

On March 19, 2025, the Company closed on the public offering (the "March 2025 Public Offering") of 4,500,000 units ("Unit(s)") at a public offering price of $1.00 per Unit. Each Unit consisted of one share of common stock and one warrant to purchase one share of common stock (the "March 2025 Warrants"). The March 2025 Warrants were immediately exercisable at $1.08 per share and expired 60 days from the date of issuance. The shares of common stock and 2025 Warrants were immediately separable and issued separately. Gross proceeds from the March 2025 Public Offering were approximately $4.5 million before deducting placement agent fees and offering expenses. Castellum intends to use the net proceeds of the offering for working capital and general corporate purposes.

Current wording

On March 19, 2025, the Company closed on the public offering (the "March 2025 Public Offering") of 4,500,000 units ("Unit(s)") at a public offering price of $1.00 per Unit. Each Unit consisted of one share of common stock and one warrant to purchase one share of common stock (the "March 2025 Warrants"). The March 2025 Warrants were immediately exercisable at $1.08 per share and expired 60 days from the date of issuance. The shares of common stock and 2025 Warrants were immediately separable and issued separately. Gross proceeds from the March 2025 Public Offering were approximately $4.5 million before deducting placement agent fees and offering expenses. Castellum used the net proceeds of the offering for working capital and general corporate purposes.

Previous wording

On June 13, 2025, the Company closed on the public offering (the "June 2025 Public Offering") of 4,166,667 units ("Unit(s)") at a public offering price of $1.20 per Unit. Each Unit consists of one share of common stock and one warrant to purchase one share of common stock (the "June 2025 Warrants"). The June 2025 Warrants are immediately exercisable at $1.22 per share and will expire 60 days from the date of issuance. The shares of common stock and June 2025 Warrants are immediately separable and issued separately. As of June 30, 2025, none of the June 2025 Warrants issued were exercised. Gross proceeds from the June 2025 Public Offering were approximately $5.0 million before deducting placement agent fees and offering expenses. Castellum intends to use the net proceeds of the June 2025 Public Offering for working capital and general corporate purposes.

Current wording

On June 13, 2025, the Company closed on the public offering (the "June 2025 Public Offering") of 4,166,667 units ("Unit(s)") at a public offering price of $1.20 per Unit. Each Unit consists of one share of common stock and one warrant to purchase one share of common stock (the "June 2025 Warrants"). The June 2025 Warrants are immediately exercisable at $1.22 per share and expired 60 days from the date of issuance. The shares of common stock and June 2025 Warrants are immediately separable and issued separately. Gross proceeds from the June 2025 Public Offering were approximately $5.0 million before deducting placement agent fees and offering expenses. Castellum used the net proceeds of the June 2025 Public Offering for working capital and general corporate purposes.

Previous wording

The continuing resolution (“CR”) enacted on December 21, 2024, extended the federal funding at fiscal year 2024 levels through March 14, 2025. On March 15, 2025, the President signed into law the Full-Year Continuing Appropriations and Extensions Act, 2025 (H.R. 1968). This legislation extends government funding at fiscal year 2024 levels through September 30, 2025. Subsequently, on July 4, 2025, the President signed the One Big Beautiful Bill Act (Public Law No. 119-21), a comprehensive appropriations package informally referred to as the “Big Beautiful Bill.” While this legislation provides continued funding and program authorizations, absent further congressional action, there remains a risk of a government shutdown after September 30, 2025.

Current wording

The continuing resolution (“CR”) enacted on December 21, 2024, extended the federal funding at fiscal year 2024 levels through March 14, 2025. On March 15, 2025, the President signed into law the Full-Year Continuing Appropriations and Extensions Act, 2025 (H.R. 1968). This legislation extends government funding at fiscal year 2024 levels through September 30, 2025. Subsequently, on July 4, 2025, the President signed the One Big Beautiful Bill Act (Public Law No. 119-21), a comprehensive appropriations package informally referred to as the “Big Beautiful Bill.” When Congress did not enact further appropriations by September 30, a federal government shutdown began on October 1, 2025. The shutdown led to temporary delays in certain government activities and contracting processes. While the Company did not experience a material impact on operations or liquidity as of the filing date, management continues to monitor the situation and assess potential effects should the shutdown be prolonged. A prolonged government shutdown (i.e. beyond December 1, 2025) is expected to have a negative impact on our business, financial condition, and operating results.

Previous wording

Our revenues are primarily derived from services provided to the U.S. Federal, state, and local governments. We currently generate our revenue from three different types of contractual arrangements: Cost Plus Fixed Fee (“CPFF”), Fixed Firm Price (“FFP”), and Time and Materials (“T&M”) contracts. For CPFF contracts, we use input progress measures to derive revenue based on hours worked on contract performance as follows: direct costs plus Defense Contract Audit Agency approved provisional burdens plus fee. The provisional indirect rates are adjusted and billed at actual at year end. Revenue from FFP contracts is generally recognized ratably over the contract term, using a time-based measure of progress, even if billing is based on other metrics or milestones, including specific deliverables. For T&M contracts, we use input progress measures to estimate revenue earned based on hours worked on contract performance at negotiated billing rates, plus direct costs and indirect cost burdens associated with materials and the direct expenses incurred in performance of the contract.

Current wording

Our revenues are primarily derived from services provided to the U.S. Federal, state, and local governments. We currently generate our revenue from three different types of contractual arrangements: Cost Plus Fixed Fee (“CPFF”), Fixed Firm Price (“FFP”), and Time and Materials (“T&M”) contracts. For CPFF contracts, the Company uses input progress measures to derive revenue based on hours worked on contract performance as follows: direct costs plus Defense Contract Audit Agency (“DCAA”) approved provisional burdens plus a fee. The provisional indirect rates are adjusted and billed at actual at year end. Revenue from FFP contracts is generally recognized ratably over the contract term, using a time-based measure of progress, even if billing is based on other metrics or milestones, including specific deliverables. Certain FFP contracts require the use of an input method based on estimated costs to complete. For T&M contracts, the Company uses input progress measures to estimate revenue earned based on hours worked on contract performance at negotiated billing rates, plus direct costs and indirect cost burdens associated with materials and the direct expenses incurred in performance of the contract.

Previous wording

Company's subsidiary, Global Technology and Management Resources, Inc. ("GTMR") of a $103.3 million, five and one-half year contract for Special Missions Management of On-Site Services in support of the Naval Air Systems Command (“NAVAIR”) Program Office 290 (“PMA-290”) Special Missions and additional direct labor growth on existing contracts, offset by the reduction in revenue from the sale of the subsidiary Mainnerve Federal Services, Inc. in September 2024.

Current wording

Total revenue was $14,619,687 for the three months ended September 30, 2025 as compared to total revenue of $11,608,691 for the three months ended September 30, 2024. The increase of $3,010,996 or 26%, was driven primarily by the award in March 2024, to the Company's subsidiary, Global Technology and Management Resources, Inc. ("GTMR") of a $103.3 million, five and one-half year contract for Special Missions Management of On-Site Services in support of the Naval Air Systems Command (“NAVAIR”) Program Office 290 (“PMA-290”) Special Missions and additional direct labor growth on existing contracts, offset by the reduction in revenue from the sale of the subsidiary Mainnerve Federal Services, Inc. in September 2024.

Previous wording

Total cost of revenues was $8,963,643 for the three months ended June 30, 2025 as compared to total cost of revenues of $6,849,180 for the three months ended June 30, 2024. The increase of $2,114,463, or 31%, is in line with the change in revenue noted above and additional labor and subcontractor costs for the PMA-290 award. The additional subcontractor costs are typically at a lower margin than direct labor.

Current wording

Total cost of revenues was $9,129,119 for the three months ended September 30, 2025 as compared to total cost of revenues of $6,650,035 for the three months ended September 30, 2024. The increase of $2,479,084, or 37%, is in line with the change in revenue noted above and additional labor and subcontractor costs for the PMA-290 award. The additional subcontractor costs are typically at a lower margin than direct labor.

Previous wording

Total gross profit was $5,060,447 for the three months ended June 30, 2025 as compared to total gross profit of $4,673,208 for the three months ended June 30, 2024. The increase of $387,239, or 8%, was driven primarily by the increase of revenue noted above.

Current wording

Total gross profit was $5,490,568 for the three months ended September 30, 2025 as compared to total gross profit of $4,958,656 for the three months ended September 30, 2024. The increase of $531,912, or 11%, was driven primarily by the increase of revenue noted above.

Previous wording

Total operating expenses were $5,443,970 for the three months ended June 30, 2025 as compared to total operating expense of $6,243,413 for the three months ended June 30, 2024. The decrease of $799,443, or 13%, was primarily driven by a reduction in salaries, achieved through the implementation of strategic cost-saving initiatives and the enhancement of operational efficiencies across all G&A support departments, and a decrease in noncash stock-based compensation granted to certain employees.

Current wording

Total operating expenses were $5,045,288 for the three months ended September 30, 2025 as compared to total operating expense of $6,341,753 for the three months ended September 30, 2024. The decrease of $1,296,465, or 20%, was primarily driven by a reduction in health care expenses, achieved through the transition from a self-funded plan to a fully insured health plan and the implementation of cost-management strategies across employee benefit programs, and a decrease in noncash stock-based compensation granted to certain employees.

Previous wording

Total other income (expense) was $(14,357) for the three months ended June 30, 2025 as compared to total other (expense) of $(155,999) for the three months ended June 30, 2024. The decrease in (expense) of $141,642 or 91%, was primarily driven by the decrease in expense due to the reduction in the fair value of derivative liability, the decrease in interest expense due to the overall decrease in debt, and the increase in interest income due to the Company's increased cash balance.

Current wording

Total other income was $76,838 for the three months ended September 30, 2025 as compared to total other (expense) of $(154,475) for the three months ended September 30, 2024. The decrease in (expense) of $231,313 or 150%, was primarily driven by the decrease in expense due to the reduction in the fair value of derivative liability, the decrease in interest expense due to the overall decrease in debt, and the increase in interest income due to the Company's increased cash balance.

Previous wording

Income tax benefit was $75,773 for the three months ended June 30, 2025, as compared to an expense of $(120,531) for the three months ended June 30, 2024. The decrease in expense of $196,304 or 163% was primarily related to the decrease in permanent adjustments and changes in valuation allowance against our net deferred tax assets.

Current wording

Income tax expense was $(106,717) for the three months ended September 30, 2025, as compared to a benefit of $257,480 for the three months ended September 30, 2024. The increase in expense of $(364,197) or 141% was primarily related to the decrease in permanent adjustments, net income for the quarter, and changes in valuation allowance against our net deferred tax assets.

Previous wording

Total revenue was $25,688,455 for the six months ended June 30, 2025 as compared to total revenue of $22,857,441 for the six months ended June 30, 2024. The increase of $2,831,014 or 12%, was driven primarily by the award to the Company's subsidiary, GTMR of a $103.3 million, five and one-half year contract for Special Missions Management of On-Site Services in support of the Naval Air Systems Command (“NAVAIR”) Program Office 290 (“PMA-290”) Special Missions and additional direct labor growth on existing contracts, offset by the reduction in revenue from the sale of the subsidiary Mainnerve Federal Services, Inc. in September 2024.

Current wording

Total revenue was $40,308,142 for the nine months ended September 30, 2025 as compared to total revenue of $34,466,131 for the nine months ended September 30, 2024. The increase of $5,842,011 or 17%, was driven primarily by the award in March 2024, to the Company's subsidiary, GTMR of a $103.3 million, five and one-half year contract for Special Missions Management of On-Site Services in support of the Naval Air Systems Command (“NAVAIR”) Program Office 290 (“PMA-290”) Special Missions and additional direct labor growth on existing contracts, offset by the reduction in revenue from the sale of the subsidiary Mainnerve Federal Services, Inc. in September 2024.

Previous wording

Total cost of revenues was $16,073,392 for the six months ended June 30, 2025 as compared to total cost of revenues of $13,668,812 for the six months ended June 30, 2024. The increase of $2,404,580, or 18%, is in line with the change in revenue noted above and additional labor and subcontractor costs for the PMA-290 award.

Current wording

Total cost of revenues was $25,202,512 for the nine months ended September 30, 2025 as compared to total cost of revenues of $20,318,846 for the nine months ended September 30, 2024. The increase of $4,883,666, or 24%, is in line with the change in revenue noted above and additional labor and subcontractor costs for the PMA-290 award.

Previous wording

Total gross profit was $9,615,063 for the six months ended June 30, 2025 as compared to total gross profit of $9,188,629 for the six months ended June 30, 2024. The increase of $426,434, or 5%, was driven primarily by the increase of revenue noted above.

Current wording

Total gross profit was $15,105,630 for the nine months ended September 30, 2025 as compared to total gross profit of $14,147,285 for the nine months ended September 30, 2024. The increase of $958,345, or 7%, was driven primarily by the increase of revenue noted above.

Previous wording

Total operating expenses were $11,484,593 for the six months ended June 30, 2025 as compared to total operating expense of $13,430,056 for the six months ended June 30, 2024. The decrease of $(1,945,463), or (14)%, was primarily driven by a reduction in salaries, achieved through the implementation of strategic cost-saving initiatives and the enhancement of operational efficiencies across all G&A support departments, and a decrease in noncash stock based compensation granted to certain employees.

Current wording

Total operating expenses were $16,529,880 for the nine months ended September 30, 2025 as compared to total operating expense of $19,771,809 for the nine months ended September 30, 2024. The decrease of $(3,241,929), or (16)%, was primarily driven by a reduction in health care expenses, achieved through the transition from a self-funded plan to a fully insured health plan and the implementation of cost-management strategies across employee benefit programs, and a decrease in noncash stock-based compensation granted to certain employees.

Previous wording

Total other expense was $375,879 for the six months ended June 30, 2025 as compared to total other expense of $(1,462,639) for the six months ended June 30, 2024. The decrease in (expense) of $1,838,518 or (126)%, was primarily driven by the decrease in expense due to the reduction in the fair value of derivative liability, the decrease in interest expense due to the overall decrease in debt, and the increase in interest income due to the Company's increased cash balance.

Current wording

Total other income was $452,717 for the nine months ended September 30, 2025 as compared to total other (expense) of $(1,462,639) for the nine months ended September 30, 2024. The decrease in (expense) of $2,069,835 or (128)%, was primarily driven by the decrease in expense due to the reduction in the fair value of derivative liability, the decrease in interest expense due to the overall decrease in debt, and the increase in interest income due to the Company's increased cash balance.

Previous wording

Income tax benefit was $1,497 for the six months ended June 30, 2025, as compared to an expense of $(254,390) for the six months ended June 30, 2024. The decrease in expense of $255,887 or (101)% was primarily driven by an increase in the effective tax rate due to permanent adjustments and changes in valuation allowance against our net deferred tax assets.

Current wording

Income tax expense was $(105,220) for the nine months ended September 30, 2025, as compared to a benefit of $3,090 for the nine months ended September 30, 2024. The chaneg in expense of $(108,310) or (3505)% was primarily driven by an increase in the effective tax rate due to permanent adjustments, net income in the quarter, and changes in valuation allowance against our net deferred tax assets.

Previous wording

Our total scheduled backlog consists of remaining performance obligations, certain orders under contracts for which the original period of performance has expired, unexercised option periods, and other unexercised or optional orders. Excluding unscheduled options orders, as of June 30, 2025, the Company had $201,988,871 of funded, unfunded, and scheduled priced options. We expect to recognize approximately 22.0% of the remaining performance obligations over the next 12 months, and approximately 65.0% over the next 24 months. The total backlog is $201,988,871. The remainder is expected to be recognized thereafter. As with all government contracts there is no guarantee the customer will have future funding or exercise their contract option in the out-years. Our backlog includes orders under contracts that in some cases extend for several years. Congress generally appropriates funds for our clients on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years to complete. As a result, contracts typically are only partially funded at any point during their term and all or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

Current wording

Our total scheduled backlog consists of remaining performance obligations, certain orders under contracts for which the original period of performance has expired, unexercised option periods, and other unexercised or optional orders. Excluding unscheduled options orders, as of September 30, 2025, the Company had $220,659,019 of funded, unfunded, and scheduled priced options. We expect to recognize approximately 21.0% of the remaining performance obligations over the next 12 months, and approximately 62.0% over the next 24 months. The total backlog is $220,659,019. The remainder is expected to be recognized thereafter. As with all government contracts there is no guarantee the customer will have future funding or exercise their contract option in the out-years. Our backlog includes orders under contracts that in some cases extend for several years. Congress generally appropriates funds for our clients on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years to complete. As a result, contracts typically are only partially funded at any point during their term and all or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

Previous wording

We have historically sourced our liquidity requirements with cash flows from operations, borrowings under our previous credit facilities, and in October, 2022, with an equity issuance through the listing of our common stock on the NYSE American LLC. As of June 30, 2025, we had $14,729,948 of cash on hand. During the first six months of 2025, we undertook the following significant equity and debt transactions that enhanced our liquidity and sources of funds:

Current wording

We have historically sourced our liquidity requirements with cash flows from operations, borrowings under our previous credit facilities, and in October, 2022, with an equity issuance through the listing of our common stock on the NYSE American LLC. As of September 30, 2025, we had $17,818,338 of cash on hand. During the first nine months of 2025, we undertook the following significant equity and debt transactions that enhanced our liquidity and sources of funds:

Previous wording

•On June 13, 2025, the Company closed on the June 2025 Public Offering of 4,166,667 units ("Unit(s)") at a public offering price of $1.20 per Unit. Each Unit issued as part of the June 2025 Warrants consisted of one share of common stock and one warrant to purchase one share of common stock which are immediately exercisable at $1.22 per share and will expire 60 days from the date of issuance, if not exercised prior to the expiration date. The shares of common stock and June 2025 Warrants are immediately separable and were issued separately. Gross proceeds from the June 2025 Public Offering were approximately $5.0 million before deducting placement agent fees and offering expenses. Refer to Note 14, "Subsequent Events" in this Quarterly Report on Form 10-Q, for further details on the exercised June 2025 warrants.

Current wording

•On June 13, 2025, the Company closed on the June 2025 Public Offering of 4,166,667 units ("Unit(s)") at a public offering price of $1.20 per Unit. Each Unit issued as part of the June 2025 Warrants consisted of one share of common stock and one warrant to purchase one share of common stock. The June 2025 Warrants were immediately exercisable at $1.22 per share and expired 60 days from the date of issuance, it nor exercised prior to the expiration date. Gross proceeds from the June 2025 Public Offering were approximately $5.0 million before deducting placement agent fees and offering expenses.

Previous wording

Shares of our common stock included in our public float as of August 7, 2025 was 82,598,534 which excludes 10,292,022 shares held by officers, directors, and affiliates.

Current wording

Shares of our common stock included in our public float as of November 6, 2025 was 85,475,428 which excludes 9,137,322 shares held by officers, directors, and affiliates.

Previous wording

Net cash used in operating activities was $(2,288,422) for the six months ended June 30, 2025, compared to $772,346 net cash provided by for the six months ended June 30, 2024. This decrease in net cash provided by operating activities was primarily driven by an increase in accounts receivable for the six months ended June 30, 2025 due to the ramping up of the PMA-290 award.

Current wording

Net cash used in operating activities was $(1,286,698) for the nine months ended September 30, 2025, compared to $1,514,537 net cash provided by for the nine months ended September 30, 2024. This decrease in net cash provided by operating activities was primarily driven by an increase in accounts receivable for the nine months ended September 30, 2025 due to the ramping up of the PMA-290 award.

Previous wording

Net cash used in investing activities was $(92,791) for the six months ended June 30, 2025, compared to $(54,534) for the six months ended June 30, 2024. The increase in net cash provided by investing activities was primarily due to the purchase of fixed assets.

Current wording

Net cash used in investing activities was $(74,711) for the nine months ended September 30, 2025, compared to $51,672 net cash provided by for the nine months ended September 30, 2024. The increase in net cash used in investing activities was primarily due to the purchase of fixed assets.

Previous wording

Net cash provided by financing activities was $4,856,114, for the six months ended June 30, 2025, compared to $(136,828) provided by financing activities for the six months ended June 30, 2024. The increase in net cash provided by financing activities was primarily due to the proceeds from the issuance of common stock and warrants issued in the March 2025 Public Offering and June 2025 Public Offering, offset by the pay down of the revolving line of credit, the pay down of two notes payable as detailed in Note 6, "Notes Payable" in this Quarterly Report on Form 10-Q

Current wording

Net cash provided by financing activities was $6,924,699, for the nine months ended September 30, 2025, compared to $(654,089) used in financing activities for the nine months ended September 30, 2024. The increase in net cash provided by financing activities was primarily due to the proceeds from the issuance of common stock and warrants issued in the