Castellum, Inc.

Previous wording

Castellum, Inc. is a technology company focused on leveraging the power of information technology to help solve the nation’s most pressing national security challenges. The Company provides clients in the United States (“U.S.") government (“USG”), financial services, healthcare, and other users of large data applications with services which include intelligence analysis, software development, software engineering, program management, strategic and mission planning, information assurance, cybersecurity and policy support, data analytics, and model based systems engineering (“MBSE”). In addition to constantly innovating and enhancing our organic capabilities, Castellum is executing strategic acquisitions of technology companies in the areas of cybersecurity, information technology (“IT”), electronic warfare, information warfare, and information operations with businesses in the defense, federal, civilian, and commercial markets that share our passionate commitment to U.S. national security and have a history of bringing exceptional value to their clients.

Current wording

Castellum, Inc. is a technology and solutions company focused on leveraging the power of information technology to help solve the nation’s most pressing national security challenges. The Company provides clients in the United States (“U.S.") government (“USG”), financial services, legal, and other users of large data applications with services which include intelligence analysis, software development, software engineering, system modernization, program management, strategic and mission planning, information assurance, cybersecurity and policy support, data analytics, and model based systems engineering (“MBSE”). In addition to constantly innovating and enhancing our organic capabilities, Castellum is executing strategic acquisitions of technology companies in the areas of cybersecurity, information technology (“IT”), electronic warfare, information warfare, and information operations with businesses in the defense, federal, civilian, and commercial markets that share our passionate commitment to U.S. national security and have a history of bringing exceptional value to their clients. The Company is actively working with business brokers and contacts within their business network to identify potential acquisitions.

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 used 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 March 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 March 2025 Public Offering for working capital and general corporate purposes.

Previous wording

Of the 4,500,000 March 2025 Warrants issued during the March Public Offering, 1,755,543 warrants were exercised at $1.08 per share prior to September 30, 2025 for gross proceeds of $1.90 million before deducting placement agent fees. The remaining 2,744,457 warrants expired on May 19, 2025.

Current wording

Of the 4,500,000 March 2025 Warrants issued during the March 2025 Public Offering, 1,755,543 warrants were exercised at $1.08 per share for gross proceeds of $1.90 million before deducting placement agent fees. The remaining 2,744,457 warrants expired on May 19, 2025.

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 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.

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 were 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

Of the 4,166,667 June 2025 Warrants issued during the June Public Offering, 3,673,666 warrants were exercised at $1.22 per share prior to September 30, 2025 for gross proceeds of $4.48 million before deducting placement agent fees. The remaining 493,001 warrants expired on August 12, 2025.

Current wording

Of the 4,166,667 June 2025 Warrants issued during the June Public Offering, 3,673,666 warrants were exercised at $1.22 per share for gross proceeds of $4.48 million before deducting placement agent fees. The remaining 493,001 warrants expired on August 12, 2025.

Previous wording

•cost-cutting and efficiency initiatives, current and future budget restrictions, continued implementation of Congressionally mandated automatic spending cuts, and other efforts to reduce USG spending could cause clients to reduce or delay funding for orders for services or invest appropriated funds on a less consistent or rapid basis or not at all, particularly when considering long-term initiatives and in light of current uncertainty around Congressional efforts to craft a long-term agreement on the USG's ability to incur indebtedness in excess of its current limits, and generally in the current political environment, there is a risk that it will not issue task orders in sufficient volume to reach current contract ceilings, alter historical patterns of contract awards, including the typical increase in the award of task orders or completion of other contract actions by the USG in the period before the end of the USG's fiscal year on September 30, delay requests for new proposals and contract awards, rely on short-term extensions and funding of current contracts, or reduce staffing levels and hours of operation;

Current wording

•cost-cutting and efficiency initiatives, current and future budget restrictions, and other efforts to reduce USG spending could cause clients to reduce or delay funding for orders for services or invest appropriated funds on a less consistent or rapid basis or not at all, particularly when considering long-term initiatives and in light of current uncertainty around Congressional efforts to craft a long-term agreement on the USG's ability to incur indebtedness in excess of its current limits, and generally in the current political environment, there is a risk that it will not issue task orders in sufficient volume to reach current contract ceilings, alter historical patterns of contract awards, including the typical increase in the award of task orders or completion of other contract actions by the USG in the period before the end of the USG's fiscal year on September 30, delay requests for new proposals and contract awards, rely on short-term extensions and funding of current contracts, or reduce staffing levels and hours of operation;

Previous 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.

Current wording

Total revenue was $14,291,961 for the three months ended March 31, 2026 as compared to total revenue of $11,664,365 for the three months ended March 31, 2025. The increase of $2,627,596 or 23%, 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 which ramped in 2025 and the award in October 2025, to the Company's Specialty Systems, Inc. (“SSI”) subsidiary of a $66.2 million full and open, five year contract for logistics, engineering, cyber support services needed in support of the Naval Air Warfare Center Aircraft Division (“NAWCAD”) Lakehurst (“LKE”) Mission Operations & Integration (“MO&I”) Department and additional direct labor growth on existing contracts.

Previous 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.

Current wording

Total cost of revenues was $9,229,741 for the three months ended March 31, 2026 as compared to total cost of revenues of $7,109,749 for the three months ended March 31, 2025. The increase of $2,119,992, or 30%, is in line with the change in revenue noted above, driven by additional labor and subcontractor costs for the PMA-290 award, which typically carry a lower margin than direct labor.

Previous 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.

Current wording

Total gross profit was $5,062,220 for the three months ended March 31, 2026 as compared to total gross profit of $4,554,616 for the three months ended March 31, 2025. The increase of $507,604, or 11%, was driven primarily by the increase of revenue noted above offset by the lower margin of increased subcontractor costs.

Previous 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.

Current wording

Total operating expenses were $5,760,218 for the three months ended March 31, 2026 as compared to total operating expense of $6,040,623 for the three months ended March 31, 2025. The decrease of $280,405, or 5%, was primarily driven by a decrease in the amount of noncash stock-based compensation granted to certain employees.

Previous 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.

Current wording

Total other income was $353,400 for the three months ended March 31, 2026 as compared to total other income of $390,236 for the three months ended March 31, 2025. The decrease in (expense) of $(36,836) or 9%, was primarily driven by the decrease in interest expense due to the overall decrease in debt, offset by the decrease in expense due to the reduction in the fair value of derivative liability.

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 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.

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 March 31, 2026, the Company had a total backlog of $273,259,965 which includes funded, unfunded, and scheduled priced options. We expect to recognize approximately 16.0% of the remaining performance obligations over the next 12 months, and approximately 49.0% over the next 24 months. 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 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:

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 March 31, 2026, we had $15,772,974 of cash on hand. During the fiscal year 2025, we undertook the following significant equity and debt transactions that enhanced our liquidity and sources of funds:

Previous wording

•As of September 30, 2025, 1,755,543 of the March 2025 Warrants issued in the March 2025 Public Offering were exercised at $1.08 per share, for gross proceeds of $1.90 million before deducing placement agent fees.

Current wording

•Gross proceeds from the March 2025 Warrants were $1.90 million before deducing placement agent fees.

Previous wording

•As of September 30, 2025, 3,673,666 of the June 2025 Warrants issued in the June 2025 Public Offering were exercised at $1.22 per share, for gross proceeds of $4.48 million before deducing placement agent fees.

Current wording

•Gross proceeds from the June 2025 Warrants were $4.48 million before deducing placement agent fees.

Previous 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.

Current wording

Shares of our common stock included in our public float as of May 7, 2026 was 93,357,103 which excludes 1,341,836 shares held by officers, directors, and affiliates.

Previous 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.

Current wording

Net cash provided by operating activities was $1,290,696 for the three months ended March 31, 2026, compared to $(2,502,640) net cash used in for the three months ended March 31, 2025. This increase in net cash provided by operating activities was primarily driven by a decrease in accounts receivable for the three months ended March 31, 2026 due to collections on existing business and a decrease in net loss.

Previous 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.

Current wording

Net cash provided by investing activities was $24,319 for the three months ended March 31, 2026, compared to $4,435 net cash provided by for the three months ended March 31, 2025. The increase in net cash provided by investing activities was primarily due to the cash received from the sale of Mainnerve Federal Services, Inc. dba MFSI Government Group (“MFSI").

Previous 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

Current wording

Net cash used in financing activities was $(426,819), for the three months ended March 31, 2026, compared to $3,532,757 net cash provided by financing activities for the three months ended March 31, 2025. The increase in net cash used in financing activities was primarily due to the pay off of the related party note payable as detailed in Note 7, "Notes Payable - Related Party" in this Quarterly Report on Form 10-Q, as compared to the proceeds from the issuance of common stock and warrants issued in the March 2025 Public Offering in 2025.