Castellum, Inc.

Previous 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.

Current wording

Castellum, Inc. is a defense tech services and solutions provider 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, services, and/or solutions companies 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

Due to our success in completing seven acquisitions since 2019 and given our executive officers’ and key managers’ networks of contacts in the IT, telecom, cybersecurity, and defense sectors, we believe that we are well positioned to continue to execute our business strategy. Because of our executive officers’ and key managers’ prior experience growing businesses organically, we believe that we are well positioned to grow our existing business via internal growth as well. The Company has developed a qualified business opportunity (the “Opportunity Pipeline”). Although there can be no assurance that the Opportunity Pipeline can be converted to revenues, the Company believes that the total value of the Opportunity Pipeline to be approximately $953.5 million as of June 30, 2026. The Opportunity Pipeline represents the revenue opportunity for the Company from potential future contracts obtained through organic growth from qualified customers based on the expected base year contract value plus the value of all option periods.

Current wording

Due to our success in completing seven acquisitions since 2019 and given our executive officers’ and key managers’ networks of contacts in the information technology ("IT"), telecom, cybersecurity, and defense sectors, we believe that we are well positioned to continue to execute our business strategy. Because of our executive officers’ and key managers’ prior experience growing businesses organically, we believe that we are well positioned to grow our existing business via internal growth as well. The Company has developed a qualified business opportunity (the “Opportunity Pipeline”). Although there can be no assurance that the Opportunity Pipeline can be converted to revenues, the Company believes that the total value of the Opportunity Pipeline to be approximately $1,662.5 million as of September 30, 2026. The Opportunity Pipeline represents the revenue opportunity for the Company from potential future contracts obtained through organic growth from qualified customers based on the expected base year contract value plus the value of all option periods.

Previous wording

•restrictions by the USG on the ability of federal agencies to use lead system integrators, in response to cost, schedule, and performance problems with large defense acquisition programs where contractors were performing the lead system integrator role; and

Current wording

•restrictions by the USG on the ability of federal agencies to use lead system integrators, in response to cost, schedule, and performance problems with large defense acquisition programs where contractors were performing the lead system integrator role;

Previous wording

•increasingly complex requirements and enforcement and reporting landscapes of the Department of Defense including cybersecurity, managing federal health care cost growth, competition, and focus on reforming existing government regulation of various sectors of the economy, such as financial regulation and healthcare.

Current wording

•increasingly complex requirements and enforcement and reporting landscapes of the Department of Defense including cybersecurity, managing federal health care cost growth, competition, and focus on reforming existing government regulation of various sectors of the economy, such as financial regulation and healthcare; and

Previous wording

In the course of conducting our business operations, we are exposed to a variety of risks. Any of the risk factors we described in Part II, Item 1A. on this Quarterly Report on Form 10Q and Part I, Item 1A. of our Annual Report on Form

Current wording

In the course of conducting our business operations, we are exposed to a variety of risks. Any of the risk factors we described in Part II, Item 1A. on this Quarterly Report on Form 10Q and Part I, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2025 filed on March 9, 2026 have affected or could materially adversely affect our business, prospects, operating results, and financial condition.

Previous wording

On May 2, 2025, President Trump submitted the Government Fiscal Year 2026 ("GFY26") Presidential Budget Request ("PBR") to Congress, holding defense spending flat at the Government Fiscal Year 2025 ("GFY25") enacted level of $893 billion. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act ("OBBBA"), a reconciliation measure separate from standard government appropriations legislation that provides approximately $156 billion in additional defense funding above the PBR. These funds remain available in GFY26 and beyond regardless of whether normal appropriations or a CR is enacted, or even in the event of a government shutdown.

Current wording

On May 2, 2025, President Trump submitted the Government Fiscal Year 2026 ("GFY26") Presidential Budget Request ("PBR") to the U. S. Congress ("Congress"), holding defense spending flat at the Government Fiscal Year 2025 ("GFY25") enacted level of $893 billion. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act ("OBBBA"), a reconciliation measure separate from standard government appropriations legislation that provides approximately $156 billion in additional defense funding above the PBR. These funds remain available in GFY26 and beyond regardless of whether normal appropriations or a CR is enacted, or even in the event of a government shutdown.

Previous wording

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 labor hours or costs incurred relative to total estimated costs to complete. FFP Level-of-Effort contracts are substantially similar to T&M contracts, except that the Company is required to deliver a specified level of effort over a stated period; for these contracts, the Company estimates revenue earned using contract hours worked at negotiated bill rates as the Company delivers the contractually required workforce. 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. These arrangements generally qualify for the "right-to-invoice" practical expedient, where revenue is recognized in proportion to billable consideration.

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. The Company generally recognizes revenue over time as control is transferred to the customer, based on the extent of progress towards satisfaction of the performance obligation. 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 labor hours or costs incurred relative to total estimated costs to complete. FFP Level-of-Effort contracts are substantially similar to T&M contracts, except that the Company is required to deliver a specified level of effort over a stated period; for these contracts, the Company estimates revenue earned using contract hours worked at negotiated bill rates as the Company delivers the contractually required workforce. 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. These arrangements generally qualify for the "right-to-invoice" practical expedient, where revenue is recognized in proportion to billable consideration.

Previous wording

Total revenue was $13,864,676 for the three months ended June 30, 2026 as compared to total revenue of $14,024,090 for the three months ended June 30, 2025. The decrease of $(159,414) or (1)%, was driven primarily by a decrease in revenue recognized on two firm-fixed-price (“FFP”) contracts, on which revenue was recognized in the second quarter of 2025 with less work performed during the same period in 2026, and a decrease in revenue under certain Corvus Consulting, LLC ("Corvus") subcontracts. These decreases were partially offset by revenue from the October 2025 award to the Company's Specialty Systems, Inc. ("SSI") subsidiary of a $66.2 million full and open, five-year contract for logistics, engineering, and cyber support services in support of the Naval Air Warfare Center Aircraft Division ("NAWCAD") Lakehurst ("LKE") Mission Operations & Integration ("MO&I") Department, the ramp-up of which is still in its early stages.

Current wording

Total revenue was $14,701,288 for the three months ended September 30, 2026 as compared to total revenue of $14,619,687 for the three months ended September 30, 2025, an increase of $81,601 or 1%. The increase was driven primarily by revenue under two contracts. The first is the five-and-one-half-year, $103.3 million contract awarded to the Company’s subsidiary Global Technology and Management Resources, Inc. (“GTMR”) for Special Missions Management of On-Site Services in support of the Naval Air Systems Command (“NAVAIR”) Program Office 290 (“PMA-290”) Special Missions. In August 2026, the contract was modified to increase its ceiling by $32.8 million, bringing the total ceiling to $136.2 million. The second is the five-year, $66.2 million full and open contract awarded in October 2025 to the Company’s subsidiary Specialty Systems, Inc. (“SSI”) for logistics, engineering, and cyber support services in support of the Naval Air Warfare Center Aircraft Division (“NAWCAD”) Lakehurst (“LKE”) Mission Operations & Integration (“MO&I”) Department. Ramp-up under the NAWCAD LKE MO&I contract remains in its early stages.

Previous wording

Total cost of revenues was $9,145,257 for the three months ended June 30, 2026 as compared to total cost of revenues of $8,963,643 for the three months ended June 30, 2025. The increase of $181,614, or 2%, was driven primarily by an increase in subcontractor costs, which typically carry a lower margin than direct labor, incurred on the Naval Air Systems Command ("NAVAIR") Maritime Patrol and Reconnaissance Aircraft Program Office ("PMA-290") Special Missions contract and on other large contracts, as well as an increase in the cost to complete the remaining work on the same two FFP contracts noted above.

Current wording

Total cost of revenues was $9,401,065 for the three months ended September 30, 2026 as compared to total cost of revenues of $9,129,119 for the three months ended September 30, 2025. The increase of $271,946, or 3%, was driven primarily by an increase in subcontractor costs, which typically carry a lower margin than direct labor, incurred on the NAVAIR PMA-290 Special Missions contract and on other large contracts.

Previous wording

Total gross profit was $4,719,419 for the three months ended June 30, 2026 as compared to total gross profit of $5,060,447 for the three months ended June 30, 2025. The decrease of $(341,028), or (7)%, was driven primarily by the lower margin of increased subcontractor costs.

Current wording

Total gross profit was $5,300,223 for the three months ended September 30, 2026 as compared to total gross profit of $5,490,568 for the three months ended September 30, 2025. The decrease of $(190,345), or (3)%, was driven primarily by the lower margin of increased subcontractor costs.

Previous wording

Total operating expenses were $5,813,511 for the three months ended June 30, 2026 as compared to total operating expenses of $5,443,970 for the three months ended June 30, 2025. The increase of $369,541, or 7%, was primarily driven by an increase in fringe expenses, reflecting an increase in headcount for business development capabilities and an expected rise in health insurance costs, as well as higher outside consultant costs, including fees related to acquisition activities and investor relations.

Current wording

Total operating expenses were $5,864,034 for the three months ended September 30, 2026 as compared to total operating expenses of $5,045,288 for the three months ended September 30, 2025. The increase of $818,746, or 16%, was primarily driven by an increase in fringe expenses, reflecting an increase in headcount for business development capabilities and an expected rise in health insurance costs, as well as higher outside consultant costs, including fees related to acquisition activities, investor relations, and increased stock-based compensation expense. The increase in stock-based compensation expense was primarily attributable to stock options granted to the management team in November 2025, as well as stock options granted to the Company's President and CEO, Glen R. Ives, on July 1, 2026, in connection with the extension of his employment agreement.

Previous wording

Total other income was $104,444 for the three months ended June 30, 2026 as compared to total other expense of $(14,357) for the three months ended June 30, 2025. The increase in other income of $118,801 or 827%, was primarily driven by the decrease in interest expense due to the overall decrease in debt.

Current wording

Total other income was $106,933 for the three months ended September 30, 2026 as compared to total other income of $76,838 for the three months ended September 30, 2025. The increase in other income of $30,095 or 39%, was primarily driven by the decrease in interest expense due to the overall reduction in debt.

Previous wording

Income tax expense was $(36,949) for the three months ended June 30, 2026, as compared to a benefit of $75,773 for the three months ended June 30, 2025. The increase in expense of $(112,722) or 149% was primarily related to the Company's change in taxable profits and state income taxes.

Current wording

Income tax benefit was $2,974 for the three months ended September 30, 2026, as compared to an expense of $(106,717) for the three months ended September 30, 2025. The increase in benefit of $109,691 or 103% was primarily related to the Company's change in taxable profits and state income taxes.

Previous wording

Total revenue was $28,156,637 for the six months ended June 30, 2026 as compared to total revenue of $25,688,455 for the six months ended June 30, 2025. The increase of $2,468,182 or 10%, 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 NAVAIR PMA-290 Special Missions which ramped up in 2025 and the award in October 2025, to the Company's SSI subsidiary of a $66.2 million full and open, five-year contract for logistics, engineering, cyber support services needed in support of the NAWCAD LKE MO&I Department. This is partially offset bya decrease in revenue under certain Corvus subcontracts.

Current wording

Total revenue was $42,857,925 for thenine months ended September 30, 2026 as compared to total revenue of$40,308,142 for thenine months ended September 30, 2025, an increase of $2,549,783 or 6%. The increase was driven primarily by the five-and-one-half-year, $103.3 million contract awarded to the Company’s subsidiary GTMR for Special Missions Management of On-Site Services in support of NAVAIR PMA-290 Special Missions. Revenue under this contract ramped up during 2025, and in August 2026 the contract ceiling was increased by $32.8 million to $136.2 million. The increase was also attributable to revenue under the five-year, $66.2 million full and open contract awarded in October 2025 to the Company’s subsidiary SSI for logistics, engineering, and cyber support services in support of the NAWCAD LKE MO&I Department. These increases were partially offset by lower revenue under certain Corvus subcontracts.

Previous wording

Total cost of revenues was $18,374,997 for the six months ended June 30, 2026 as compared to total cost of revenues of $16,073,392 for the six months ended June 30, 2025. The increase of $2,301,605, or 14%, 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.

Current wording

Total cost of revenues was $27,776,062 for the nine months ended September 30, 2026 as compared to total cost of revenues of $25,202,512 for the nine months ended September 30, 2025. The increase of $2,573,550, or 10%, 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 $9,781,640 for the six months ended June 30, 2026 as compared to total gross profit of $9,615,063 for the six months ended June 30, 2025. The increase of $166,577, or 2%, was driven primarily by the increase of revenue noted above offset by the lower margin of increased subcontractor costs.

Current wording

Total gross profit was $15,081,863 for the nine months ended September 30, 2026 as compared to total gross profit of $15,105,630 for the nine months ended September 30, 2025. The decrease of $(23,767), or 0%, was driven primarily by the lower margin of increased subcontractor costs.

Previous wording

Total operating expenses were $11,573,729 for the six months ended June 30, 2026 as compared to total operating expenses of $11,484,593 for the six months ended June 30, 2025. The increase of $89,136, or 1%, was primarily driven by an increase in fringe expenses, reflecting an increase in headcount for business development capabilities and an expected rise in health insurance costs, as well as higher outside consultant costs, including fees related to acquisition activities and investor relations, offset by lower stock based compensation and amortization expenses.

Current wording

Total operating expenses were $17,437,762 for the nine months ended September 30, 2026 as compared to total operating expenses of $16,529,880 for the nine months ended September 30, 2025. The increase of $907,882, or 5%, was primarily driven by an increase in fringe expenses, reflecting an increase in headcount for business development capabilities and an expected rise in health insurance costs, as well as higher outside consultant costs, including fees related to acquisition activities, investor relations, and increased stock-based compensation expense, offset by lower amortization expenses.

Previous wording

Total other income was $457,843 for the six months ended June 30, 2026 as compared to total other expense of $375,879 for the six months ended June 30, 2025. The increase in other income of $81,964 or 22%, 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.

Current wording

Total other income was $564,777 for the nine months ended September 30, 2026 as compared to total other income of $452,717 for the nine months ended September 30, 2025. The increase in other income of $112,060 or 25%, was primarily driven by the decrease in interest expense due to the overall reduction in debt and the decrease in expense due to the reduction in the fair value of the derivative liability.

Previous wording

Income tax expense was $(43,625) for the six months ended June 30, 2026, as compared to a benefit of $1,497 for the six months ended June 30, 2025. The increase in expense of $(45,122) or (3014)% was primarily related to the Company's change in taxable profits and state income taxes.

Current wording

Income tax expense was $(40,651) for the nine months ended September 30, 2026, as compared to an expense of $(105,220) for the nine months ended September 30, 2025. The decrease in expense of $64,569 or (61)% was primarily related to the Company's change in taxable profits and state income taxes.

Previous wording

We define backlog to include the following three components:

Current wording

We define backlog to include the following two components:

Previous wording

Our backlog does not include contracts that have been awarded but are currently under protest and also does not include any task orders under indefinite delivery indefinite quantity contracts, except to the extent that task orders have been awarded to us under those contracts.

Current wording

Our backlog excludes contracts that have been awarded but are currently under protest. It also excludes any potential future task orders under indefinite-delivery/indefinite-quantity contracts, except to the extent that task orders have already been awarded to us under those contracts.

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, 2026, the Company had a total backlog of $271,748,334 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 48.0% 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.

Current wording

Our backlog includes orders under contracts that in some cases extend for several years. Although these contracts may call for performance over a number of years, Congress generally appropriates funds for our clients on an annual basis. As a result, contracts are typically only partially funded at any point during their term, and some or all of the work to be performed may remain unfunded unless and until Congress makes subsequent appropriations and the procuring agency allocates funding to the contract. As with all government contracts, there is no guarantee that our customers will receive future funding or exercise contract options in the out-years.

Previous wording

We cannot predict with any certainty the portion of our backlog that we expect to recognize as revenue in any future period and we cannot guarantee that we will recognize any revenue from our backlog. The primary risks that could affect our ability to recognize such revenue on a timely basis or at all are: program schedule changes, contract modifications, and our ability to assimilate and deploy new consulting staff against funded backlog; cost-cutting initiatives and other efforts to reduce USG spending, which could reduce or delay funding for orders for services; and delayed funding of our contracts due to delays in the completion of the USG's budgeting process and the use of CR's by the USG to fund its operations. The amount of our funded backlog is also subject to change, due to, among other factors: changes in congressional appropriations that reflect changes in USG policies or priorities resulting from various military, political, economic, or international developments; changes in the use of USG contracting vehicles, and the provisions therein used to procure our services and adjustments to the scope of services, or cancellation of contracts by the USG at any time. In our recent experience, none of the following additional risks have had a material negative effect on our ability to realize revenue from our funded backlog: the unilateral right of the USG to cancel multi-year contracts and related orders or to terminate existing contracts for convenience or default; in the case of unfunded backlog, the potential that funding will not be made available; and, in the case of priced options, the risk that our clients will not exercise their options.

Current wording

We cannot predict with certainty the portion of our backlog that will be recognized as revenue in any future period, and we cannot guarantee that we will recognize any revenue from our backlog. The primary risks that could affect our ability to recognize such revenue on a timely basis, or at all, include: program schedule changes, contract modifications, and our ability to assimilate and deploy new consulting staff against funded backlog; cost-cutting initiatives and other efforts to reduce U.S. Government (“USG”) spending, which could reduce or delay funding for orders for services; and delayed funding of our contracts resulting from delays in the completion of the USG budgeting process and the USG’s use of CRs to fund its operations.

Previous wording

In addition, contract backlog includes orders under contracts for which the period of performance has expired, and we may not recognize revenue on the funded backlog that includes such orders due to, among other reasons, the tardy submission of invoices by our subcontractors and the expiration of the relevant appropriated funding in accordance with a predetermined expiration date such as the end of the USG's fiscal year.

Current wording

In addition, our backlog includes orders under contracts for which the original period of performance has expired. We may not recognize revenue on the portion of funded backlog that includes such orders due to, among other reasons, the late submission of invoices by our subcontractors or the expiration of the underlying appropriated funds on a predetermined date, such as the end of the USG’s fiscal year.

Previous wording

We expect to recognize revenue from a substantial portion of funded backlog within the next 24 months. However, given the uncertainties discussed above, we can give no assurance that we will be able to convert our backlog into revenue in any particular period, if at all.

Current wording

We expect to recognize revenue from a substantial portion of our funded backlog within the next 24 months. However, given the uncertainties discussed above, we can give no assurance that we will convert our backlog into revenue in any particular period, if at all.

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, 2026, we had $16,865,160 of cash on hand.

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, 2026, we had $15,689,091 of cash on hand.

Previous wording

We did not undertake any equity or debt transactions during the six months ended June 30, 2026. Our liquidity during the current period has been funded entirely through cash flows generated from operations.

Current wording

We did not undertake any equity or debt transactions during the nine months ended September 30, 2026. Our liquidity during the current period has been funded entirely through cash flows generated from operations.

Previous wording

Management believes that cash flows from operating activities, existing cash on hand will be sufficient to meet our anticipated cash requirements for at least the next twelve months. Our primary uses of cash include:

Current wording

Management believes that cash flows from operating activities and existing cash on hand will be sufficient to meet our anticipated cash requirements for at least the next twelve months. Our primary uses of cash include:

Previous wording

•Strategic acquisitions, which we continue to evaluate as part of our growth strategy.

Current wording

•Strategic acquisitions, which we continue to evaluate as part of our growth strategy; and

Previous wording

•Capital expenditures, which have historically been minimal given the labor-intensive nature of our business; and

Current wording

•Capital expenditures, which have historically been minimal given the labor-intensive nature of our business.

Previous wording

Shares of our common stock included in our public float as of August 5, 2026 was 93,352,235 which excludes 1,346,704 shares held by officers, directors, and affiliates.

Current wording

Shares of our common stock included in our public float as of November 4, 2026 was 95,023,801 which excludes 1,402,592 shares held by officers, directors, and affiliates.

Previous wording

Net cash provided by operating activities was $2,350,849 for the six months ended June 30, 2026, compared to $(2,288,422) net cash used in for the six months ended June 30, 2025. This increase in net cash provided by operating activities was primarily driven by a decrease in accounts receivable for the six months ended June 30, 2026 due to collections on existing business.

Current wording

Net cash provided by operating activities was $1,065,657 for the nine months ended September 30, 2026, compared to $(1,286,698) net cash used in for the nine months ended September 30, 2025. This increase in net cash provided by operating activities was primarily driven by a smaller increase in accounts receivable for the nine months ended September 30, 2026 due to collections on existing business.

Previous wording

Net cash provided by investing activities was $44,008 for the six months ended June 30, 2026, compared to $(92,791) net cash used in for the six months ended June 30, 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").

Current wording

Net cash provided by investing activities was $77,052 for the nine months ended September 30, 2026, compared to $(74,711) net cash used in for the nine months ended September 30, 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.

Previous wording

Net cash used in financing activities was $(414,475), for the six months ended June 30, 2026, compared to $4,856,114 net cash provided by financing activities for the six months ended June 30, 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 6, "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 public offerings in 2025.

Current wording

Net cash used in financing activities was $(338,396), for the nine months ended September 30, 2026, compared to $6,924,699 net cash provided by financing activities for the nine months ended September 30, 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 6, "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 public offerings in 2025.

Previous wording

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ("ASU") 2025-06, which makes targeted updates to the accounting and disclosure requirements for internal-use software under Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). The standard becomes effective for the Company beginning in fiscal year 2029, including interim periods, and permits either prospective or retrospective adoption. We are currently assessing the impact on our financial statements.

Current wording

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ("ASU") 2025-06, which makes targeted updates to the accounting and disclosure requirements for internal-use software under Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). The standard becomes effective for the