What changed in this filing

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Item 9A. Controls and Procedures

2024-04-16 compared with 2023-03-31 · 974 added, 1189 removed, 1048 unchanged (67% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls

and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information

required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods

specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including Chief

Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship

of possible disclosure controls and procedures.

The design of any disclosure controls and procedures also is based in part upon certain

assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated

goals under all potential future conditions.

Any controls and procedures, no matter how well designed and operated, can provide only reasonable,

not absolute, assurance of achieving the desired control objectives.

Our management, with the participation

of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure

controls and procedures as of the end of the period covered by this report.

Based upon that evaluation and subject to the foregoing, our

Chief Executive Officer and Chief Financial Officer concluded that, our disclosure controls and procedures were not effective due to the

material weaknesses in internal control over financial reporting described below.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting.

Our internal control over financial reporting is

a process designed under the supervision of its principal executive and principal financial officers and effected by our Board of Directors,

management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of

its consolidated financial statements for external reporting purposes in accordance with U.S.

of Disclosure Controls and Procedures

maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are

designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized,

and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated

to our management, including Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding

required disclosures.

In designing disclosure controls and procedures, our management necessarily was required to apply its judgment

in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

The design of any disclosure controls and

procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any

design will succeed in achieving its stated goals under all potential future conditions.

Any controls and procedures, no matter how well

designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the

design and operation of our disclosure controls and procedures as of the end of the period covered by this report.

Based on this evaluation,

our CEO and CFO concluded that, as of December 31, 2023, our disclosure controls and procedures are designed at a reasonable assurance

level and are effective to provide reasonable assurance that information we are required to disclose in reports we file or submit under

the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms,

and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely

decisions regarding required disclosure.

of Material Weakness as of December 31, 2022

ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are indicative of

many small companies with small number of staff:

of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner;

of documentation on policies and procedures that are critical to the accomplishment of financial reporting objectives.

a result of identification of the material weakness noted above, we implemented a remediation plan that addressed the material

weakness in internal control over financial reporting.

We designed, documented, and implemented new controls to assess risks on

internal controls over financial reporting and policies and procedures critical to financial reporting objectives.

We have evaluated

the design and operating effectiveness of the controls implemented and concluded that the controls are adequately designed and have

operated effectively for a sufficient period to conclude that the material weakness has been remediated.

on Effectiveness of Controls and Procedures

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

In addition, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions or that the degree of compliance with the policies or procedures may deteriorate.

in Internal Control Over Financial Reporting

the year ended December 31, 2023, we completed formal risk assessment procedures and documentation of policies and

procedures critical to the accomplishment of financial reporting objectives.

than the remediation of our material weakness, there have been no changes in our internal control over financial reporting (as defined

in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2023, that have materially affected, or that

are reasonably likely to materially affect, our internal control over financial reporting.

Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting based on the framework

established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway

Our internal control over financial reporting is a process designed under the supervision of its principal executive and

principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting

purposes in accordance with U.S.

generally accepted accounting principles.

Because of its inherent limitations,

internal control over financial reporting may not prevent or detect misstatements.

In addition, projections of any evaluation of effectiveness

to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance

with the policies or procedures may deteriorate.

Material Weakness in Internal Control over Financial

Our management assessed the effectiveness

of our internal control over financial reporting as of December 31, 2022 based on the framework established in Internal Control—Integrated

Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management

has determined that our internal control over financial reporting as of December 31, 2022 was not effective.

A material weakness, as defined

in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination

of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement

of our annual or interim financial statements will not be prevented or detected on a timely basis.

The ineffectiveness of our internal

control over financial reporting was due to the following material weaknesses which are indicative of many small companies with small

number of staff:

lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely

lack of documentation on policies and procedures that are critical to the accomplishment of financial reporting

We will continue to monitor and

evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting

on an ongoing basis, and we are committed to taking further action and implementing additional enhancements or improvements, as necessary

and in accordance with financial and budgetary considerations.

Management’s Plan to Remediate the Material

Our management plans to implement

measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are

designed, implemented, and operating effectively.

The remediation actions planned include:

identify gaps in our skills base and the expertise of our staff required to meet the financial reporting

requirements of a public company;

develop policies and procedures on internal control over financial reporting and monitor the effectiveness

of operations on existing controls and procedures.

Our management will continue to

monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial

reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary

and as funds allow.

This Annual Report on Form 10-K does not include

an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Our management’s

report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide

only management’s report in this Annual Report on Form 10-K, which may increase the risk that weaknesses or deficiencies in our

internal control over financial reporting go undetected.

Changes in Internal Control Over Financial Reporting

There have been no changes in

our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended

December 31, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial

During the year ended December 31, 2022, we have hired additional finance and accounting staff that we expect will

positively impact our segregation of duties in the coming periods.

Based on our assessment under this framework, our management

concluded that our internal control over financial reporting was effective as of December 31, 2023.

independent registered public accounting firm will not be required to report on the effectiveness of our internal control over

financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” nor a non-accelerated

OTHER INFORMATION

Letter Agreement with Neil Stinchcombe

March 27, 2023, we entered into a letter agreement with Neil Stinchcombe to resolve a dispute about certain payment terms of a convertible

note previously issued to Mr.

Stinchcombe, with an outstanding principal amount of $1,500,000.

Pursuant to the terms of this agreement,

we agreed to repay the principal amount of the note in three equal installment payments of $500,000, on each of March 31, April 28, and

May 31, 2023, with accrued interest to be paid on May 31, 2023 at the note’s reflected interest rate of 5.0% per annum.

to timely make any of the foregoing payments, the applicable interest rate will be increased to a default rate of 24% per annum.

of Failure to Satisfy a Continued Listing Rule

March 29, 2023, we received a letter from the listing qualifications staff (the “Staff”) of Nasdaq providing notification

that the bid price for our common stock had closed below $1.00 per share for the previous 30 consecutive business days and our common

stock no longer meets the minimum bid price requirement for continued listing under Nasdaq Listing Rule 5550(a)(2).

In accordance with

Nasdaq Listing Rule 5810(c)(3)(A), we have an initial period of 180 calendar days, or until September 25, 2023, to regain compliance.

To regain compliance, the closing bid price of our common stock must be $1.00 per share or more for a minimum of 10 consecutive business

days at any time before September 25, 2023.

we do not regain compliance with Rule 5550(a)(2) by September 25, 2023, we may be eligible for an additional 180 calendar day compliance

To qualify, we would need to meet the continued listing requirement for market value of publicly held shares and all other initial

listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and would need to provide written

notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.

However, if it appears to the Staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq would

notify us that our securities would be subject to delisting.

In the event of such notification, we may appeal the Staff’s determination

to delist our securities, but there can be no assurance the Staff would grant our request for continued listing.

Nasdaq notification has no immediate effect on the listing of our common stock on the Nasdaq Capital Market.

We intend to actively monitor

the bid price of our common stock and our minimum market value of listed securities and will consider options available to us to achieve

compliance with the Nasdaq listing rules.

There can be no assurance that we will be able to regain compliance with the minimum bid price

requirement or will otherwise be in compliance with the other listing standards for the Nasdaq Capital Market.

March 30, 2023, David A.

Bennett, our Chief Operating Officer, separated from our company.

March 30, 2023, our Board of Directors appointed Kyle J.

Young as Interim Chief Operating Officer of our company.

Young, age 40,

has served as our Executive Vice President, Operations since January 2022 and previously served as our Vice President, Operations

from February 2021 to January 2022.

Young served in various roles at BeyondTrust Software, a U.S.-based cybersecurity vendor,

from December 2007 to February 2022, most recently serving as its Vice President, Business and Sales Operations.

Young holds a

bachelor’s degree in Speech Communications & Rhetoric from the University of Illinois Urbana-Champaign.

March 30, 2023, we entered into the Young Employment Agreement with Mr.

The Young Employment Agreement is evergreen and can

be terminated by either party.

Pursuant to the Young Employment Agreement, Mr.

Young will receive an annual base salary of $200,000,

which will be subject to review and adjustment in accordance with our policies.

Young will be eligible to receive an annual

bonus between 20% and 100% of his base salary, in the sole discretion of our Board of Directors.

Young is also eligible to

participate in our standard benefit plans.

are no family relationships between Mr.

Young and any of our directors or executive officers.

There have been no transactions since the

beginning of our last fiscal year, and no transactions are currently proposed, in which we were or are to be a participant and in which

Young or any member of his immediate family had or will have any interest, that are required to be disclosed pursuant to Item 404(a)

of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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The age of each Director and Executive

Officer listed below is given as of March 31, 2023.

Chief Executive Officer and Director

Interim Chief Operating Officer

Chief Financial Officer

President, Chief Information Security Officer and Director

Officer listed below is given as of April 9, 2024.

Executive Officer and Director

Chief Operating Officer

Financial Officer and Director

General Robert C.

Scott Holbrook (1) (2) (3)

Holbrook (1) (2) (3)

McCain (1) (2)

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internet technologies in 1998.

We believe Mr.

Jemmett is qualified

to serve as a director of our company due to his extensive business background, his experience in the cybersecurity industry, and his

significant equity ownership in our company.

Young – Interim Chief Operating

Young has served as our

Interim Chief Operating Officer since March 2023.

Jemmett is qualified to serve as a director of our company due to his extensive business background, his experience in the

cybersecurity industry, and his significant equity ownership in our company.

Young – Interim Chief Operating Officer

Young has served as our Interim Chief Operating Officer since March 2023.

Previously Mr.

Young served as our Executive Vice President, Operations from

January 2022 to March 2023 and as our Vice President, Operations from February 2021 to January 2022.

Young served in various

roles at BeyondTrust Software, a U.S.-based cybersecurity vendor, from December 2007 to February 2022, most recently serving as its

Vice President, Business and Sales Operations.

Young served as our Executive Vice President,

Operations from January 2022 to March 2023 and as our Vice President, Operations from February 2021 to January 2022.

in various roles at BeyondTrust Software, a U.S.-based cybersecurity vendor, from December 2007 to February 2022, most recently serving

as its Vice President, Business and Sales Operations.

Young holds a bachelor’s degree in Speech Communications & Rhetoric

from the University of Illinois Urbana-Champaign.

Smith – Chief Financial Officer

Smith – Chief Financial Officer and Director

Smith has served as our Chief Financial Officer since June 2021.

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in Counseling with Honors from Argosy University.

Devoto – President and Director

Devoto has served as our President since July 2022 and as our Chief Information Security Officer and as a director of our company

since March 2022.

Devoto has served in various roles at Booz Allen Hamilton, a U.S.-based government contractor, from June 2018

to March 2022, most recently serving as its Chief Information Security Officer.

From April 2017 to June 2018, Ms.

Devoto served as

Business Information Security officer for Bank of America, a financial services company.

Devoto has served in the U.S.

Cyberspace Operations since March 2010, and she served as defensive cyber operations planner at 24th Air Force and NORAD/USNORTHCOM.

Devoto continues to serve in a reserve capacity by leading strategic cyber force development initiatives in her current

assignment at the Pentagon.

Devoto holds a bachelor’s degree in Computer Engineering from Vanderbilt University and a

master’s degree in Engineering Management from Southern Methodist University.

Devoto is qualified for service as a director of our company due to her cybersecurity experience, as well as her extensive

experience across military, financial services, and professional services organizations.

Scott has served as a founder and director of our company since April 2019.

Scott has been a Partner with Advisor ID (formerly BRI

Partners), a financial services technology firm, since 2016.

Scott was Managing Director of Longboard Asset Management from 2016

From 2009 to 2016, Mr.

Scott was at Van Eck Global, where he served as the Co-Head of the Alternatives Committee and as portfolio

Scott has founded and managed several investment partnerships focused on both private and public investment strategies since

Scott holds a Bachelor of Science from the University of Florida.

Scott is qualified for service as a director of our company due to his background in both the financial services and technology industries.

General Robert C.

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including cybersecurity, through his extensive military service.

Scott Holbrook – Director

Holbrook – Director

Holbrook has served as a director of our company since May 2019.

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McCain has served as a director of our company since May 2019.

He has served as the President and Chief Operating Officer for Hensley

Beverage Company since 2014.

He is a board member of the Arizona Super Bowl Host Committee, the Arizona 2016 College Football Championship

Local Organizing Committee, Chairman of Hensley Employee Foundation, and a Patrons Committee member of United Methodist Outreach Ministries’

New Day Centers.

He is past Chairman of the Board of the Fiesta Bowl, past Chairman of the Anheuser-Busch National Wholesaler Advisory

Panel, and past Chairman of the Greater Phoenix Chamber of Commerce.

McCain received his Bachelor of Arts in Mathematics in 1984

and an MBA in 1986 from Vanderbilt University.

He has served as the President and Chief Executive Officer for Hensley

Beverage Company since January 2024, and previously served as President and Chief Operating Officer from 2014 through January 2024.

is a board member of the Arizona Super Bowl Host Committee, the Arizona 2016 College Football Championship Local Organizing Committee,

Chairman of Hensley Employee Foundation, and a Patrons Committee member of United Methodist Outreach Ministries’ New Day Centers.

He is past Chairman of the Board of the Fiesta Bowl, past Chairman of the Anheuser-Busch National Wholesaler Advisory Panel, and past

Chairman of the Greater Phoenix Chamber of Commerce.

McCain received his Bachelor of Arts in Mathematics in 1984 and an MBA in 1986

from Vanderbilt University.

McCain is qualified for service as a director of our company due to his significant business experience and leadership.

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VanDeWeghe is qualified for service as a director of our company due to his business acumen and experience as an organizational

Chugg – Director

Chugg has served as a director of our company since February 2024.

He has most recently served as Senior Managing Director at Koch Disruptive

Technologies, a venture and growth equity investment group at Koch Industries and in other roles with Koch Industries since 1998.

Chugg has also served as a Director on several high-growth company boards.

Chugg attended Weber State University where he received

a degree in English and received his MBA in 1998 from Bringham Young University.

We believe Mr.

Chugg is qualified to serve as a director due to his experience as an investor and leader in technology with global and multi-industry

Board of Directors currently consists of seven members.

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Jemmett and Ms.

Devoto are employee directors.

Scott is considered independent as he has served as a founder and director of our company since April

Morgan served on our Board of Directors in fiscal 2021 and resigned in March 2022.

Morgan was an independent director.

Smith are employee directors.

Scott served on our Board of Directors since April 2019 and resigned in May 2023.

independent director.

Board of Directors has three standing committees:

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McCain serving as the chair.

Morgan served

on the Audit Committee during fiscal 2021 but resigned from our Board of Directors in March 2022.

VanDeWeghe was appointed to the

Audit Committee in March 2022 following Ms.

Morgan’s resignation.

Each member of the Audit Committee meets the independence and

other requirements to serve on our Audit Committee under The Nasdaq Stock Market Rules and the rules of the SEC.

In addition, our Board

of Directors determined that each of Messrs.

McCain and Holbrook is considered an “audit committee financial expert” as defined

in the rules of the SEC.

Each member of the

Audit Committee meets the independence and other requirements to serve on our Audit Committee under The Nasdaq Stock Market Rules and

the rules of the SEC.

In addition, our Board of Directors determined that each of Messrs.

McCain and Holbrook is considered an “audit

committee financial expert” as defined in the rules of the SEC.

Audit Committee was formed in 2021.

Our Board of Directors has adopted a written charter for the Audit Committee, a copy of which is

posted in the Investor Resources and Corporate Governance section of our website at https://www.ciso.inc/investor-relations/charter-of-the-audit-committee .

posted in the Investor Resources and Corporate Governance section of our website at www.ciso.inc/investor-relations/charter-of-the-audit-committee .

The principal functions of the Audit Committee are to oversee our accounting and financial reporting processes and the audits of our

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and facilitate communication

among our independent auditors and our financial and senior management.

among our independent registered public accounting firm and our financial and senior management.

have a standing Compensation Committee of our Board of Directors.

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VanDeWeghe serving as the chair.

Morgan serve on the Governance and Nominating

Committee during fiscal 2021 but resigned from our Board of Directors in March 2022.

VanDeWeghe was appointed to the Governance and

Nominating Committee in March 2022 following Ms.

Morgan’s resignation.

Each of Messrs.

Oaks, Holbrook and VanDeWeghe meets the

independence and other requirements to serve on our Governance and Nominating Committee under The Nasdaq Stock Market Rules and the rules

Oaks, Holbrook and VanDeWeghe meets

the independence and other requirements to serve on our Governance and Nominating Committee under The Nasdaq Stock Market Rules and the

rules of the SEC.

Governance and Nominating Committee was formed in 2021.

Our Board of Directors has adopted a written charter for the Governance and Nominating

Committee, a copy of which is posted in the Investor Resources and Corporate Governance section of our website at https://www.ciso.inc/investor-relations/charter-of-the-nominating-and-corporate-governance-committee .

Committee, a copy of which is posted in the Investor Resources and Corporate Governance section of our website at www.ciso.inc/investor-relations/charter-of-the-nominating-and-corporate-governance-committee .

The Governance and Nominating Committee considers the performance of the members of our Board of Directors and nominees for director

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are required by SEC regulations to furnish us with copies of all such forms they file.

During fiscal 2022 and years prior,

Smith and Devoto, and Messers.

Jemmett, Bennett, Scott, Oaks, Holbrook, McCain, and VanDeWeghe failed to file all reports

which were required to be filed pursuant to Section 16(a) of the Exchange Act.

solely on our review of such reports and certain representations from each reporting person, we believe that during 2023, all Section

16(a) filing requirements were satisfied on a timely basis.

EXECUTIVE COMPENSATION

following table shows the total compensation paid or accrued during the years ended December 31, 2022 and 2021 to our Chief Executive

Officer, our next three most highly compensated executive officers who were serving as executive officers on December 31, 2022 and one

additional individual who served as an executive officer during the year ended December 31, 2022 but was not serving as an executive

officer on December 31, 2022 (collectively our “named executive officers”).

Compensation Table

Non-qualified

Executive Officer

Financial Officer (2)

President (3)

Chief Operating Officer (4)

Bryce P.Hancock

Former President and Chief Operating Officer (5)

The amounts in this column reflect the fair value on the grant date of the option awards granted to the named executive officer, calculated in accordance with ASC Topic 718.

following table shows the total compensation paid or accrued during the years ended December 31, 2023 and 2022 to our Chief

Executive Officer, and our next two most highly compensated executive officers who were serving as executive officers on December

31, 2023, (collectively, our “named executive officers”).

Name and Principal Position

Option Awards

Non-Equity Incentive Plan Compensation

Non-qualified Deferred Compensation Earnings

All Other Compensation

Chief Executive Officer

Chief Financial Officer

Interim Chief Operating Officer (3)

amounts in this column reflect the fair value on the grant date of the option awards granted to the named executive officer, calculated

in accordance with ASC Topic 718.

Stock options were valued using the Black-Scholes model.

The grant-date fair value does not necessarily reflect the value of shares which may be received in the future with respect to these awards.

The grant-date fair value of the stock options in this column is a non-cash expense that reflects the fair value of the stock options on the grant date and therefore does not affect our cash balance.

The fair value of the stock options will likely vary from the actual value the holder receives because the actual value depends on the number of options exercised and the market price of our common stock on the date of exercise.

For a discussion of the assumptions made in the valuation of the stock options, see Note 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2022.

Smith was appointed to serve as our Vice President of Finance on February 1, 2021 and as our Chief Financial Officer on June 18, 2021.

Devoto was appointed to serve as our Chief Information Security Officer on January 17, 2022 and as our President on August 8, 2022.

Bennett was appointed to serve as our Chief Operating Officer on February 22, 2022.

Bennett separated from our company on March 30, 2023.

Hancock resigned on February 15, 2022.

The grant-date fair value does not necessarily

reflect the value of shares which may be received in the future with respect to these awards.

The grant-date fair value of the stock

options in this column is a non-cash expense that reflects the fair value of the stock options on the grant date and therefore does

not affect our cash balance.

The fair value of the stock options will likely vary from the actual value the holder receives because

the actual value depends on the number of options exercised and the market price of our common stock on the date of exercise.

a discussion of the assumptions made in the valuation of the stock options, see Note 10 to our consolidated financial statements

included in our Annual Report on Form 10-K for the year ended December 31, 2023.

amounts in the “All Other Compensation” column consist of certain benefits provided to our NEOs, which are generally

available to our similarly situated employees, including 401(k) company matching and technology stipend.

Jemmett, the amounts in this column consist of 401(k) company matching

contributions ($13,218) and a technology stipend ($900).

Young, the amounts in this column consist of 401(k) company matching

contributions of ($11,268) and a technology stipend ($900).

Young was appointed to serve as our Interim Chief Operating Officer on March 31, 2023.

Equity Awards as of December 31, 2023

following table summarizes the outstanding equity awards held by each named executive officer as of December 31, 2023.

Unexercisable

Number of Shares Underlying Unexercised Options (#) Exercisable

Number of Shares Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Expiration Date

2 unchanged sentences

December 31, 2031

January 14, 2022 (1)(5)

January 14, 2032

14, 2022 (1)(3)

January 14, 2032

28, 2022 (2)(5)

February 1, 2021 (1)

28, 2022 (3)(5)

February 1, 2026

February 28, 2022 (4)(5)

February 28, 2032

January 14, 2022

February 28, 2022

December 31, 2021 (2)

December 31, 2031

of the shares underlying this option vested at the one-year anniversary from the grant date with the remainder vesting in 24 equal

installments on the last day of each month thereafter.

January 14, 2022 (1)(3)

January 14, 2032

of the shares underlying this option vested on the one-year anniversary of the grant date with the remainder vesting month over the subsequent 24-month period.

of the shares underlying this option vested on the one-year anniversary of the grant date with the remainder vesting monthly over

the subsequent 36-month period.

of the shares underlying this option vested on the eighteen-month anniversary of the grant date with the remainder vesting monthly

over the subsequent 36-month period.

of the shares underlying this option vested on the two-year anniversary of the grant date with the remainder vesting monthly over

the subsequent 36-month period.

August 22, 2022, we repriced these option grants to reflect an exercise price equal to the fair value of our common stock.

provisions of these option grant remained on the same terms as the original option grant.

maintain a tax-qualified Section 401(k) retirement savings plan for our executive officerss and other employees who satisfy the

eligibility requirements.

Under this plan, participants may elect to make pre-tax or Roth contributions of up to a certain portion

of their current compensation, not to exceed the applicable statutory income tax limitation.

We provided matching contributions made

by participants in the plan up to a maximum of 3.5% of eligible compensation annually, subject to limitations in our 401(k) plan

applicable to highly compensated employees.

We intend for the plan to qualify under Section 401(a) of the U.S.

Internal Revenue Code

of 1986, as amended (the “Code”), enabling contributions by participants to the plan, and income earned on plan

contributions, to not be taxable to participants until withdrawn from the plan.

Agreements with our Named Executive Officers

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Pursuant to the Jemmett

Employment Agreement, Mr.

Jemmett earned an initial annual base salary of $225,000, which was increased to an annual base salary of $250,000

upon our common stock becoming quoted on the OTC Markets.

Jemmett’s base salary may be increased in accordance with our normal

compensation and performance review policies.

He is entitled to receive a discretionary annual bonus of up to 100% of his annual base

salary, at the discretion of our Board of Directors, based on performance and our objectives.

Subject to approval by our Board of Directors,

Employment Agreement, the Board of Directors approved an increase to Mr.

Jemmett’s annual base salary from $250,000 to $375,000

and may be increased hereafter from time to time at the discretion of the Board of Directors.

Jemmett’s base salary may be

increased in accordance with our normal compensation and performance review policies.

He is entitled to receive a discretionary annual

bonus of up to 100% of his annual base salary, at the discretion of our Board of Directors, based on performance and our objectives.

Subject to approval by our Board of Directors, Mr.

Jemmett is entitled to stock options under our 2019 Equity Incentive Plan.

The stock options will vest at 33% on the one-year anniversary

of the Jemmett Employment Agreement and the remaining 66% of the options will vest monthly over the next 12 months.

As of December 31,

2021, our Board of Directors had not approved or granted any stock options to Mr.

On July 31, 2021, a bonus of $90,213 was accrued

Jemmett and subsequently paid on February 15, 2022.

options will vest at 33% on the one-year anniversary of the Jemmett Employment Agreement and the remaining 66% of the options will vest

monthly over the next 12 months.

As of December 31, 2022, our Board of Directors had not approved or granted any stock options to Mr.

On December 31, 2022, a bonus of $62,500 was accrued for Mr.

Jemmett and subsequently paid in equal installments on April 28,

May 31, and June 30, 2023.

Jemmett is also eligible to participate in our standard benefit plans.

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as of February 1, 2021 (the “Smith Employment Agreement”).

Pursuant to the Smith Employment Agreement, Ms.

Smith earns an

initial base annual salary of $200,000, with an increase upon our listing to a national exchange, subject to approval by our Board of

Directors, a guaranteed bonus of $60,000 to be paid quarterly, and an additional $60,000 at the end of each fiscal year at the discretion

of our Board of Directors.

Smith is also eligible to participate in our standard benefit plans.

Pursuant to the Smith Employment Agreement, the Board of Directors

approved an increase to Ms.

Smith’s annual base salary from $200,000 to $350,000 and may be increased hereafter from time to time

at the discretion of the Board of Directors.

Smith also earns a guaranteed bonus of $60,000 to be paid quarterly, and an additional

$60,000 at the end of each fiscal year at the discretion of our Board of Directors.

A bonus of $53,125 was accrued for Ms.

subsequently paid in installments on March 31, April 28, May 31, and June 30, 2023.

Smith is also eligible to participate in our

standard benefit plans.

On June 18, 2021, we appointed Ms.

Smith to serve as Chief Financial Officer.

The terms of the original Smith Employment Agreement remained in force.

December 23, 2021, we entered into an employment agreement with Ms.

Devoto to serve as our Chief Information Security Officer (the “Devoto

Employment Agreement”).

The Devoto Employment Agreement is evergreen and can be terminated by either party.

Pursuant to the Devoto

Employment Agreement, Ms.

Devoto earned an initial base annual salary of $225,000, with an increase upon our listing to a national exchange,

subject to approval of our Board of Directors, a guaranteed bonus of equal to 20% of base annual salary, an annual bonus up to 100% of

base annual salary at the discretion of our Board of Directors, and a sign-on bonus of $100,000.

Devoto is also eligible to participate

The terms of the original Smith

Employment Agreement remained in force.

March 31, 2023, we entered into an employment agreement with Mr.

Young to serve as our Chief Operating Officer (the “Young Employment

The Young Employment Agreement is evergreen and can be terminated by either party.

Pursuant to the Young Employment

Agreement, the Board of Directors approved an increase to Mr.

Young’s annual base salary from $200,000 to $350,000, and an annual

bonus between 20% and 100% of base annual salary at the discretion of our Board of Directors.

A bonus of $47,500 was accrued for Mr.

Young and subsequently paid in installments on April 28, May 31, and June 30, 2023.

Young is also eligible to participate

in our standard benefit plans.

On August 8, 2022, we appointed Ms.

Devoto to serve as President.

The terms of the Devoto Employment Agreement

remained in force.

February 28, 2022, we entered into an employment agreement with Mr.

Bennett to serve as our Chief Operating Officer (the

“Bennett Employment Agreement”).

The Bennett Employment Agreement was evergreen and could be terminated by either party.

Pursuant to the Bennett Employment Agreement, Mr.

Bennett received an initial base annual salary of $250,000, which could be increased at

the discretion of our Board of Directors, an annual bonus up to 100% of base annual salary at the discretion of our Board of

Directors, and a sign-on bonus of $150,000.

Bennett was also eligible to participate in our standard benefit plans.

Bennett separated from our company on March 30, 2023.

Bryce Hancock

December 14, 2020, we entered into an employment agreement with Mr.

Hancock to serve as our Chief Operating Officer (the “Hancock

Employment Agreement”).

The Hancock Employment Agreement was evergreen and could be terminated by either party.

Pursuant to the

Hancock Employment Agreement, Mr.

Hancock earned an initial base annual salary of $225,000, which could be increased at the discretion

of our Board of Directors.

Hancock was also eligible to participate in our standard benefit plans.

Hancock resigned on February

following table sets forth for each non-employee director certain information concerning their compensation for the year ended

December 31, 2022:

following table sets forth for each non-employee director certain information concerning their compensation for the year ended December

Fees Earned or

Stock Awards ($)

Option Awards ($) (2)

Non-equity Incentive Plan Compensation ($)

Nonqualified Deferred Compensation Earnings

All Other Compensation ($)

General Robert C.

Stephen Scott (3)

Scott Holbrook

Sandra Morgan (4)

Kiki VanDeWeghe

(Kiki) VanDeWeghe, III

directors receive reimbursement for reasonable out-of-pocket expenses in attending Board meetings and for participating in our business.

amounts in this column reflect the fair value on the grant date of the option awards granted to the named executive, calculated in

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a discussion of the assumptions made in the valuation of the stock options, see Note 10 to our consolidated financial statements,

which are included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2022.

directors receive reimbursement for reasonable out-of-pocket expenses in attending Board meetings and for participating in our business.

Scott receives payment of $11,500 per month under the terms of an independent consulting agreement to provide services relating to

which are included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Scott received payment of $11,500 per month under the terms of an independent consulting agreement to provide services relating to

our strategic and business development, and sales and marketing.

Morgan resigned on March 15, 2022.

In July 2023, we entered into a new independent consulting

agreement with Mr.

Scott to provide similar services for payment for $15,000 per month.

Scott resigned as a Director

on May 10, 2023.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 27, 2023 for

(a) the named executive officers, (b) each of our directors, (c) all of our current directors and executive officers as a group and (d)

each stockholder known by us to own beneficially more than 5% of our common stock.

Beneficial ownership is determined in accordance with

the rules of the SEC and includes voting or investment power with respect to the securities.

We deem shares of common stock that may

be acquired by an individual or group within 60 days of March 27, 2023 pursuant to the exercise of options or warrants to be outstanding

for the purpose of computing the percentage ownership of such individual or group but are not deemed to be outstanding for the purpose

of computing the percentage ownership of any other person shown in the table.

Except as indicated in footnotes to this table, we believe

that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be

beneficially owned by them based on information provided to us by these stockholders.

Percentage of ownership is based on 154,176,477 shares of

common stock outstanding on March 27, 2023.

following table sets forth certain information with respect to the beneficial ownership of our common stock as of April 5, 2024 for (a)

the named executive officers, (b) each of our directors, (c) all of our current directors and executive officers as a group and (d) each

stockholder known by us to own beneficially more than 5% of our common stock.

Beneficial ownership is determined in accordance with the

rules of the SEC and includes voting or investment power with respect to the securities.

We deem shares of common stock that may be acquired

by an individual or group within 60 days of April 5, 2024 pursuant to the exercise of options or warrants to be outstanding for the purpose

of computing the percentage ownership of such individual or group but are not deemed to be outstanding for the purpose of computing the

percentage ownership of any other person shown in the table.

Except as indicated in footnotes to this table, we believe that the stockholders

named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by

them based on information provided to us by these stockholders.

Percentage of ownership is based on 12,232,379 shares of common stock

outstanding on April 5, 2024.

Ownership of Certain Beneficial Holders

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Amount and Nature of

Beneficial Ownership

Jemmett Enterprises, LLC

4,429,000 (2)

1,203,335 (3)

Ownership of Directors and Executive Officers

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Amount and Nature of

Beneficial Ownership

4,629,001 (4)

General Robert C.

Scott Holbrook

7,941,667 (8)

Kiki VanDeWeghe

Bryce Hancock

& Executive Officers as a Group (8 persons)

5,343,290 (10)

than 1% of the outstanding shares of common stock.

otherwise indicated, the address of record is c/o Cerberus Cyber Sentinel Corporation, 6900 E.

Camelback Road, Suite 240, Scottsdale,

Arizona 85251.

otherwise indicated, the address of record is c/o CISO Global, Inc., 6900 E.

Camelback Road, Suite 900, Scottsdale, Arizona 85251.

Jemmett is the managing member of Jemmett Enterprises, LLC and has voting and dispositive power over such shares.

of (i) 853,334 shares held directly by Mr.

(ii) 333,334 shares beneficially held by TVMT LLC;

and (iii) 16,667 shares beneficially

held by JLS 401k Trust.

of (i) 4,429,000 shares held by Jemmett Enterprises, LLC, of which Mr.

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(ii) 133,334 shares held by Xander LLC, of which Mr.

Jemmett and his wife are the sole members and have

voting and dispositive power over such shares;

Jemmett and his wife are the sole members and have voting

and dispositive power over such shares;

and (iii) 66,667 shares held by Dana Borgman Trust.

of 549,582 shares issuable upon exercise of options exercisable within 60 days after March 27, 2023.

of (i) 62,500 shares held directly by Ms.

Devoto and (ii) 312,500 issuable upon exercise of options exercisable within 60 days after

March 27, 2023.

of (i) 12,800,000 shares held directly by Mr.

(ii) 5,000,000 shares beneficially held by TVMT LLC;

and (iii) 250,000 shares beneficially held by JLS 401k Trust.

of 400,000 shares issuable upon the exercise of options exercisable within 60 days after March 27, 2023.

Consists of (i) 375,000 shares held indirectly as executor of the Andrew and Lucy McCain Family Trust, for which Mr.

McCain has voting and dispositive power;

of 59,090 shares issuable upon exercise of options exercisable within 60 days after April 5, 2024.

of 26,666 shares issuable upon the exercise of options exercisable within 60 days after April 5, 2024.

of (i) 25,000 shares held indirectly as executor of the Andrew and Lucy McCain Family Trust, for which Mr.

McCain has voting and

dispositive power;

(ii) 200,000 shares held by Hensley & Company, for which Mr.

McCain has voting and dispositive power;

(iii) 400,000 shares issuable upon the exercise of options exercisable within 60 days after March 27, 2023;

and (iv) 4,166,667 shares issuable upon the conversion of a note payable held by Hensley & Company.

Consists of 183,333 shares issuable upon the exercise of options exercisable within 60 days after March 27, 2023.

Consists of 291,666 shares issuable upon exercise of options exercisable within 60 days after March 27, 2023.

Consist of 1,075,000 shares issuable upon exercise of options exercisable within 60 days after March 27, 2023.

Includes 2,801,780 shares issuable upon the exercise of options

exercisable within 60 days after March 27, 2023 and 4,166,667 shares issuable upon conversion of a note payable.

Authorized for Issuance Under Existing Equity Compensation Plan

following table summarizes certain information regarding our equity compensation plan as of December 31, 2022:

Plan Category

Number of Securities

to be Issued Upon

26,666 shares issuable upon the exercise of options exercisable within 60 days after April 5, 2024;

and (iv) 277,778 shares issuable

upon the conversion of a note payable held by Hensley & Company.

of 13,333 shares issuable upon the exercise of options exercisable within 60 days after April 5, 2024.

211,511 shares issuable upon the exercise of stock options and 277,778 shares issuable upon conversion of a note

following table sets forth information with respect to our common stock that may be issued upon the exercise of stock options under our

equity compensation plans as of December 31, 2023:

of Securities to be Issued Upon Exercise of Outstanding Options

Weighted-Average

Exercise Price of

Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation

Plans (Excluding

Securities Reflected in

Equity compensation plans approved by security holders (1)

Equity compensation plans not approved by security holders

of the 2019 Equity Incentive Plan.

The aggregate number of shares of common stock that may

be issued pursuant to options granted under this Plan or Bonus Stock Awards under this Plan

shall not exceed 60,000,000 shares.

For a description of this plan, see Note 10 to our 2022

consolidated financial statements included in this Annual Report on Form 10-K for the year

ended December 31, 2022.

Exercise Price of Outstanding Options

of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))

compensation plans approved by security holders

compensation plans not approved by security holders

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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director or executive officer of our company;

person who beneficially owns, directly or indirectly, shares carrying more than 5% of the

voting rights attached to our outstanding shares of common stock;

person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding

shares of common stock;

promoters and control persons;

member of the immediate family (including spouse, parents, children, siblings and in laws)

of any of the foregoing persons.

member of the immediate family (including spouse, parents, children, siblings and in laws) of any of the foregoing persons.

Consulting Agreement with Stephen Scott

August 2020, we entered into an Independent Consulting Agreement with Stephen Scott, a director of our company, with respect to advisory

and consulting services relating to our strategic and business development, and sales and marketing.

Scott receives a consulting

August 2020, we entered into an Independent Consulting Agreement with Stephen Scott, a then director of our company, with respect to

advisory and consulting services relating to our strategic and business development, and sales and marketing.

Scott received a consulting

fee of $11,500 per month for such services.

July 2023, we entered into an Independent Consulting Agreement with Mr.

Scott, to provide, on a non-exclusive basis, advisory and consulting

services relating to our strategic and business development, intellectual property development, banking relationships, and strategic

M&A for a period of one year.

Scott will receive a consulting fee of $15,000 per month for such services under the terms of this

During the years ended December 31, 2023 and 2022, we paid consulting fees to Mr.

the amount of $138,000.

Scott in the amounts of $159,000 and $138,000,

respectively.

Services Agreement with Hensley Beverage Company

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31, 2021, the agreement will continue until terminated by either party.

For the years ended December 31, 2022 and 2021, and, we received

For the years ended December 31, 2023 and 2022, we received $1,417,398

and $850,445, respectively from Hensley Beverage Company for contracted services and had an outstanding receivable balance of $152,213

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Note Payable with Hensley Beverage Company

March 20, 2023, we entered into a Purchase Agreement (the “Purchase Agreement”) with Hensley & Company dba Hensley

Beverage Company (the “Purchaser”), an entity affiliated with Mr.

McCain, a director of our company, pursuant to which

we issued and sold to the Purchaser a $5,000,000 10 Percent (10%) Unsecured Convertible Note (the “Note”) for gross

proceeds of $5,000,000 in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as

amended (the “Securities Act”), and Regulation D promulgated thereunder (the “Note Offering”).

together with accrued and unpaid interest thereon, is due on March 20, 2025 (the “Maturity Date”).

We may not prepay the

Note prior to the Maturity Date without the consent of the Purchaser.

The Note will bear interest at a rate of 10% per annum (based

on a 360-day year), payable monthly.

At any time prior to or on the Maturity Date and subject to certain beneficial ownership

limitations, the Purchaser may convert all or any portion of the outstanding principal amount of the Note and all accrued and unpaid

interest thereon into shares (the “Conversion Shares”) of our common stock, par value $0.00001 per share, at a conversion price of $1.20 per share (the “Conversion Price”).

The Conversion Price is adjustable in the event of

any stock split, reverse stock split, recapitalization, reorganization, or similar event.

Upon the occurrence of an “Event of

Default” (as defined in the Note and including the failure to make required payments when due after specified grace periods,

certain breaches of the Purchase Agreement and certain specified insolvency events), the Purchaser would have the right to

accelerate payments due under the Note, which from and after such acceleration would bear interest at a default rate of 24% per

March 2023, we issued an unsecured convertible note to Hensley & Company in the principal amount of $5,000,000 bearing an interest

rate of 10.00% per annum.

The principal amount, together with accrued and unpaid interest is due on March 20, 2025.

At any time prior

to or on the maturity date, Hensley & Company is permitted to convert all or any portion of the outstanding principal amount and

all accrued and unpaid interest thereon into shares of our common stock at a conversion price of $18.00 per share ($1.20 on a pre-reverse

split basis).

During the year ended December 31, 2023, we recorded interest expense of $388,888 and as of December 31, 2023, we had accrued

interest of $388,888.

Andy McCain, a director of our company, is President and Chief Executive officer of Hensley & Company.

“Directors, Executive Officers and Corporate Governance – Director Independence” and “Directors, Executive Officers

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Committee has appointed Semple, Marchal & Cooper, LLP (“SMC”) as our independent registered public accounting firm for the year ended December 31, 2022.

The following table sets forth the fees billed to our company

for professional services rendered by SMC for the years ended December 31, 2022 and 2021:

Audit fees (1)

Audit-related fees (2)

All other fees

fees consisted of billing for professional services normally provided in connection with

statutory and regulatory filings, including (i) fees associated with the audits of our financial

statements for the years ended December 31, 2022 and 2021 and, (ii) fees associated with

quarterly reviews for the quarters ended March 31, 2022 and 2021, June 30, 2022 and 2021,

and September 30, 2022 and 2021.

related fees consisted of billings for professional services for reviews of our periodic

filings under form 10-K and 10-Q and acquisition audits for the years ended December 31,

2022 and 2021.

Audit Committee has appointed Semple, Marchal & Cooper, LLP (“SMC”) to audit the consolidated financial statements of

our company for the fiscal year ending December 31, 2023.

The following table sets forth the fees billed to our company for professional

services rendered by SMC for the years ended December 31, 2023 and 2022:

Audit-related

fees consisted of billing for professional services normally provided in connection with statutory and regulatory filings, including

(i) fees associated with the audits of our financial statements for the years ended December 31, 2023 and 2022 and, (ii) fees associated

with quarterly reviews for the quarters ended March 31, 2023 and 2022, June 30, 2023 and 2022, and September 30, 2023 and 2022.

related fees consisted of billings for professional services for reviews of our periodic filings under form 10-K and 10-Q and acquisition

audits for the years ended December 31, 2023 and 2022.

fees consisted primarily of tax related advisory and preparation services.

Policies and Procedures

Committee Pre-Approval Policies

charter of our Audit Committee provides that the authority and responsibilities of our Audit Committee include the pre-approval of all

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be rendered during that year for each of three categories of services to our Audit Committee for approval.

of the services provided by SMC described above under the caption “Audit-Related Fees” were approved by our Audit Committee

pursuant to our Audit Committee’s pre-approval policies.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as a part of the

For a list of the financial statements included

herein, see the index to the financial statements beginning on page F-1 of this Annual Report on Form 10-K, incorporated into this

Item by reference.

Financial statement schedules have been omitted

because they are either not required or not applicable or the information is included in the consolidated financial statements or

the notes thereto.

following documents are filed as a part of the report:

a list of the financial statements included herein, see the index to the financial statements beginning on page F-1 of this Annual

Report on Form 10-K, incorporated into this Item by reference.

statement schedules have been omitted because they are either not required or not applicable or the information is included in the

consolidated financial statements or the notes thereto.

Agreement for the Purchase and Sale of Limited Liability Company Interests of GenResults, LLC dated April 12, 2019

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dated January 5, 2022

Amended and Restated Certificate of Incorporation of the Registrant

By-laws of the Registrant

Second Amended and Restated Certificate of Incorporation of the Registrant

Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant

C ertificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant

Second Amended and Restated By-laws of the Registrant

Form of Common Stock Certificate of the Registrant

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Form of Underwriter Warrant

Form of Placement Agent Warrant

Stock Repurchase Agreement between the Registrant and Alan Kierman dated September 1, 2019

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Bennett and the Registrant dated February 12, 2022

Agreement by and between Ashley N.

Employment Agreement by and between Ashley N.

Devoto and the Registrant dated December 23, 2021

4 unchanged sentences

Young and the Registrant dated March 30, 2023

2023 Equity Incentive Plan

Placement Agency Agreement, dated May 16, 2023, by and between the Registrant and each Purchaser thereto

Form of Securities Purchase Agreement, dated May 16, 2023, by and between the Registrant and each Purchasers thereto

Subsidiaries of the Registrant

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Section 1350 Certification of Principal Financial Officer

CISO Global, Inc.

Executive Officer Incentive Compensation Recovery Policy

XBRL Instance Document

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on its behalf by the undersigned, thereunto duly authorized.

CYBER SENTINEL CORPORATION

Executive Officer (Principal Executive Officer)

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Financial Officer (Principal Financial Officer and Principal Accounting Officer)

, Chief Information Security Officer and Director

General Robert C.

Scott Holbrook

(Kiki) VanDeWeghe, III

CYBER SENTINEL CORPORATION

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2023 AND 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID # 178 )

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB

FINANCIAL STATEMENTS:

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations For the Years Ended December 31, 2022 and 2021

Consolidated Statements of Stockholders’ Equity For the Years Ended December 31, 2022 and 2021

Statements of Operations and Comprehensive Loss For the Years Ended December 31, 2023 and 2022

Statements of Changes in Stockholders’ Equity For the Years Ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows For the Years Ended December 31, 2023 and 2022

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of Directors and Stockholders of

Cyber Sentinel Corporation and Subsidiaries

and Subsidiaries

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Cerberus Cyber Sentinel Corporation (the “Company”) as of December

31, 2022 and 2021, the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended,

and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our

audits and the report of the other auditors, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company at December 31, 2022 and 2021, and the results of its consolidated operations and its cash flows for the years

then ended , in conformity with accounting principles generally accepted in the United States of America.

have audited the accompanying consolidated balance sheets of CISO Global, Inc.

(the “Company”) as of December 31, 2023 and

2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the

related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits

and the report of the other auditors, the consolidated financial statements present fairly, in all material respects, the consolidated

financial position of the Company at December 31, 2023 and 2022, and the results of its consolidated operations and its cash flows for

the years then ended , in conformity with accounting principles generally accepted in the United States of America.

did not audit the combined financial statements of the Company’s wholly-owned “South American Subsidiaries,” which

1 unchanged sentence

and its wholly-owned subsidiaries Arkavia Networks Limitada and Arkavia

Networks, as of December 31, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash

flows for the year ended December 31, 2022, and for the period from December 1, 2021 (Acquisition) to December 31, 2021;

balance sheets of Servicios Informaticos CUATROi, S.P.A., Comercializadora CUATROi S.P.A., CUATROi Peru S.A.C., and CUATROi S.A.S.

under common ownership and management) as of December 31, 2022 and the related combined statements of operations, stockholders’

equity, and cash flows for the period ended August 26, 2022 (Acquisition) to December 31, 2022;

and the combined balance sheets of NLT

Networks, S.P.A., NLT Tecnologias, Limitada, NLT Servicios Profesionales, S.P.A.

and White and Blue Solutions, LLC (entities under common

ownership and management) as of December 31, 2022 and the related combined statements of operations, stockholders’ equity, and

cash flows for the period ended September 1, 2022 (Acquisition) to December 31, 2022;

and the related notes (collectively “combined

financial statements”).

The combined financial statements of the South American Subsidiaries reflect total assets of $39.5 million

and $12.1 million at December 31, 2022 and 2021, respectively, and total revenues of $10.0 and $1.3 million for the periods then ended.

Those statements were audited by another auditor whose report has been furnished to us, and our opinion, insofar as it relates to the

amounts included for the South American Subsidiaries, is based solely on the report of the other auditors.

Networks, as of December 31, 2023 and 2022, and the related consolidated statements of operations, stockholder’s equity, and cash

flows for the years ended December 31, 2023 and 2022;

the combined balance sheets of Servicios Informaticos CUATROi, S.P.A., Comercializadora

CUATROi S.P.A., CUATROi Peru S.A.C., and CUATROi S.A.S.

(entities under common ownership and management) as of December 31, 2023 and

2022 and the related combined statements of operations, stockholder’s equity, and cash flows for the year ended December 31, 2023

and the period from August 26, 2022 (Acquisition) to December 31, 2022;

and the combined balance sheets of NLT Networks, S.P.A., NLT

Tecnologias, Limitada, NLT Servicios Profesionales, S.P.A.

and White and Blue Solutions, LLC (entities under common ownership and management)

as of December 31, 2023 and 2022 and the related combined statements of operations, stockholders’ equity, and cash flows for the

year ended December 31, 2023 and the period from September 1, 2022 (Acquisition) to December 31, 2022;

and the related notes (collectively

“combined financial statements”).

The combined financial statements of the South American Subsidiaries reflect total assets

of $21.9 million and $39.5 million at December 31, 2023 and 2022, respectively, and total revenues of $23.1 and $10.0 million for the

periods then ended.

Those statements were audited by another auditor whose report has been furnished to us, and our opinion, insofar

as it relates to the amounts included for the South American Subsidiaries, is based solely on the report of the other auditors.

Concern Uncertainty

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have served as the Company’s auditor since 2019.

OF THE INDEPENDENT AUDITORS

of Directors and Stockholders of

Cyber Sentinel Corporation and Subsidiaries Scottsdale, Arizona

on the financial statements

have audited the consolidated balance sheets of Arkavia Networks SpA.

and its wholly-owned subsidiaries Arkavia Networks Limitada and

Arkavia Networks (collectively “Arkavia”), as of December 31, 2022 and 2021, and the related consolidated statements of operations,

stockholders’ equity, and cash flows for the year ended December 31, 2022, and for the period from December 1, 2021 (Acquisition)

to December 31, 2021;

the combined balance sheets of Servicios Informaticos CUATROi, S.P.A., Comercializadora CUATROi S.P.A., CUATROi

Peru S.A.C., and CUATROi S.A.S.

(entities under common ownership and management, collectively “CUATROi”) as of December 31,

2022 and the related combined statements of operations, stockholders’ equity, and cash flows for the period ended August 26, 2022

(Acquisition) to December 31, 2022;

and the combined balance sheets of NLT Networks, S.P.A., NLT Tecnologias, Limitada, NLT Servicios

Profesionales, S.P.A.

and White and Blue Solutions, LLC (entities under common ownership and management, collectively “NLT”)

as of December 31, 2022 and the related combined statements of operations, stockholders’ equity, and cash flows for the period

ended September 1, 2022 (Acquisition) to December 31, 2022;

and the related notes (collectively “combined financial statements”)

(Arkavia, together with CUATROi and NLT, the “Company” ).

In our opinion, such combined financial statements present fairly,

in all material respects the combined financial position as December 31, 2022 and 2021, and the results of its combined operations and

its cash flows for the periods then ended, in conformity with accounting principles generally accepted in the United States of America.

combined financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the combined financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company with respect to

the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the combined financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Board of Directors and Stockholders of

Cyber Sentinel Corporation and Subsidiaries Scottsdale, Arizona

audits include performing procedures to assess the risks of material misstatement of the combined financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding

the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used

and significant estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

SILVA MORALES

TILLY CHILE LTDA.

Chile , March 31, 2023

have served as auditors since 2021.

Tilly Chile Auditores Consultores Ltda., trading as Baker Tilly Chile is a member of the global network of Baker Tilly International

Ltd., the members of which are separate and independent legal entities.

CYBER SENTINEL CORPORATION AND SUBSIDIARIES

AND SUBSIDIARIES

BALANCE SHEETS

December 31, 2023

December 31, 2022

Current Assets:

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Accounts receivable, net

Notes receivable, related party

Prepaid cost of revenue

Prepaid expenses and other current assets

Contract asset

Contract assets

Total Current Assets

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Intangible assets, net

Prepaid cost of revenue, net of current portion

$ 104,496,815

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Deferred revenue

Settlement liability

Lease liability

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Long-term Liabilities:

Deferred revenue, net of current portion

Loans payable, net of current portion

Convertible notes payable, related party

Lease liability, net of current portion

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and 9,697,921

issued and outstanding at December 31, 2022 and 2021

issued outstanding at December 31, 2023 and December 31, 2022, respectively

Preferred stock, $ .00001 par value;

50,000,000 shares authorized;

0 shares issued and outstanding on December 31, 2022 and December 31, 2021

0 shares issued and outstanding on December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

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$ 104,496,815

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

CYBER SENTINEL CORPORATION AND SUBSIDIARIES

accompanying footnotes are an integral part of these consolidated financial statements.

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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Other income (expense):

Other income (expense)

Interest expense, net

PPP loan forgiveness

( 2,881,416 )

Total other income (expense)

( 2,895,056 )

Loss before income taxes

( 80,666,761 )

( 33,775,731 )

Benefit from income taxes

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$ ( 32,712,935 )

Net loss per common share - basic and diluted

Net loss per common share - basic and diluted (Note 3)

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

CYBER SENTINEL CORPORATION AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

accompanying footnotes are an integral part of these consolidated financial statements.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (NOTE 3)

Preferred Stock

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$ 153,170,351

$ ( 77,787,604 )

Stock based compensation - stock options

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Exercise of options

Stock issued for cash in public offering

Stock issued for True Digital acquisition

Stock issued for VelocIT acquisition

Stock issued for Red74 acquisition

Stock issued for Creatrix acquisition

Stock issued for CyberViking acquisition

Stock issued for CUATROi acquisition

Stock issued for NLT acquisition

Stock issued for SB Cyber acquisition

Stock issued as lending discount

Foreign currency translation

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$ ( 44,012,422 )

Stock based compensation - stock options

Stock based compensation - common stock

Exercise of stock options

Exercise of options

Stock issued for conversion of convertible debt

Stock issued for cash

Exercise of options

Stock issued for cash in public offering

Stock issued for True Digital acquisition

Stock issued for acquisition

Stock issued for VelocIT acquisition

Stock issued for Atlantic acquisition

Stock issued for Red74 acquisition

Stock issued for Arkavia acquisition

Stock issued for settlement agreement

Replacement options issued in VelocIT acquisition

Stock issued for Creatrix acquisition

Stock issued for CyberViking acquisition

Stock issued for CUATROi acquisition

Stock issued for NLT Secure acquisition

Foreign currency translation

( 33,775,182 )

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$ 153,170,351

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

CYBER SENTINEL CORPORATION AND SUBSIDIARIES

$ ( 77,787,604 )

$ 153,170,351

$ ( 77,787,604 )

accompanying footnotes are an integral part of these consolidated financial statements.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

Cash flows from operating

December 31, 2023

December 31, 2022

Cash flows from operating activities:

$ ( 80,231,083 )

$ ( 33,775,182 )

Adjustments to reconcile net

loss to net cash used in operating activities:

based compensation - stock options

based compensation - common stock

and amortization

of use amortization

interest expense

Adjustments to reconcile net loss to net cash used in operating activities:

Stock based compensation - stock options

Stock based compensation - common stock

Depreciation and amortization

Right of use amortization

Impairment of intangible assets

Impairment of goodwill

Changes in operating assets

and liabilities:

receivable, net

( 2,358,896 )

and other current assets

Changes in operating assets and liabilities:

Accounts receivable, net

Contract assets

Prepaids and other current assets

( 2,625,108 )

payable and accrued expenses

cash used in operating activities

Accounts payable and accrued expenses

Lease liability

Settlement liability

Deferred revenue

Net cash used in operating activities

( 5,920,112 )

( 10,681,007 )

Cash flows from investing

of property and equipment

(paid)/acquired in acquisitions, net

Cash flows from investing activities:

Purchases of property and equipment

Cash acquired/(paid) in acquisitions, net

( 5,536,697 )

cash (used in)/provided by investing activities

Proceeds from the sale of property and equipment

Net cash used in investing activities

( 6,048,944 )

Cash flows from financing

from sale of common stock

from stock option exercise

from loan payable

from notes payable, related party

from convertible note payable

from line of credit

on line of credit

on loans payable

Cash flows from financing activities:

Proceeds from sale of common stock

Proceeds from stock option exercise

Proceeds from loan payable

Proceeds from convertible notes payable, related party

Proceeds from convertible note payable

Proceeds from line of credit

Payment on line of credit

Payment on loans payable

( 12,118,340 )

Payment on notes payable, related party

( 2,083,076 )

on notes payable, related party

of debt issuance cost

cash provided by financing activities

Effect of exchange rates on

cash and cash equivalents

Net increase in cash and cash

Payment of convertible note payable

( 2,550,000 )

and cash equivalents - beginning of the period

and cash equivalents - end of the period

Payment of debt issuance cost

Net cash provided by financing activities

Effect of exchange rates on cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents - beginning of the period

Cash and cash equivalents - end of the period

Supplemental cash flow information:

Cash paid for:

Non-cash investing and financing

of use asset and lease liability recorded upon adoption of ASC 842

stock issued in VelocIT acquisition

stock issued in Atlantic acquisition

stock issued in RED 74 acquisition

stock issued in Arkavia acquisition

Options issued for VelocIT acquisition

stock issued in True Digital acquisition

stock issued in Creatrix acquisition

stock issued in CyberViking acquisition

stock issued in CUATROi acquisition

stock issued in NLT Secure acquisition

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

CYBER SENTINEL CORPORATION AND SUBSIDIARIES

Supplemental disclosure of non-cash transactions:

Operating lease assets obtained in exchange for operating lease obligations

Common stock issued in True Digital acquisition

Common stock issued in Creatrix acquisition

Common stock issued in VelocIT acquisition

Common stock issued in RED 74 acquisition

Common stock issued in CyberViking acquisition

Common stock issued in CUATROi acquisition

Common stock issued in NLT Secure acquisition

Common stock issued in SB Cyber acquisition

Common stock issued in acquisition

Common stock issued as a lending discount

accompanying footnotes are an integral part of these consolidated financial statements.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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otherwise indicated or the context requires otherwise, the terms ““we,” “us,” “our,” and “our

company” refer to Cerberus Cyber Sentinel Corporation, a Delaware corporation (“Cerberus”), and our wholly owned subsidiaries.

Unless otherwise specified, all dollar amounts are expressed in United States dollars.

company” refer to CISO Global, Inc., a Delaware corporation (“CISO Global”), and our wholly owned subsidiaries.

All dollar amounts are expressed in United States dollars.

of the Business

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To deliver that outcome, we developed our unique offering of MCCP+ (“Managed Compliance &

Cybersecurity Provider + Culture”), which is the only holistic solution that provides all three of these pillars under one roof

Cybersecurity Provider + Culture”), which is a holistic solution that provides all three of these pillars under one roof

from a dedicated team of subject matter experts.

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technology and cybersecurity spending.

Our brand rallies around the battle cry:

“Cyber security is a Culture, not a Product.”

2 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS

accompanying 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.

For the year ended December 31, 2022, we incurred a net loss of $ 33,775,182 ,

had negative cash flows from operations of $ 10,681,007 , and working capital deficit of $ 8,814,244 .

These matters raise substantial doubt

as to our ability to continue as a going concern.

Our existence is dependent upon our ability to develop profitable operations.

We are devoting substantially all of our efforts to developing our business, reducing overhead costs, and raising capital, although there

can be no assurance that the our efforts will be successful.

No assurance can be given that our actions will result in profitable operations

or the resolution of liquidity problems.

The accompanying consolidated financial statements do not include any adjustments that might

result should we be unable to continue as a going concern.

order to improve our liquidity, in addition to a planned reduction in overhead costs, we are actively pursuing additional debt and/or equity financing through discussions with investment bankers and private investors.

can be no assurance that we will be successful in our efforts to secure additional financing.

financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities

that might be necessary should we be unable to continue as a going concern.

The accompanying 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 However, due to losses incurred, substantial doubt about the Company’s ability to continue as a going concern

We are evaluating strategies to

obtain the required additional funding for future operations.

These strategies may include, obtaining equity financing, issuing debt or

entering into other financing arrangements, and restructuring of operations to grow revenues and decrease expenses.

However, we may be

unable to access further equity or debt financing when needed.

As such, there can be no assurance that we will be able to obtain additional

liquidity when needed or under acceptable terms, if at all.

The ability for us to continue as a going concern is dependent upon our

ability to successfully accomplish the plan described in the Growth Strategy paragraph and eventually attain profitable operations.

consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and

reported expenses that may be necessary if the Company were unable to continue as a going concern.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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of our management, who is responsible for their integrity and objectivity.

February 29, 2024, our board of directors approved a 1-for-15

reverse stock split of our common stock.

The record date for the reverse stock split was the close of business on March 7,

2024, with share distribution occurring on March 8, 2024.

As a result of the reverse stock split, stockholders received one

share of CISO Global, Inc.

common stock, par value $ 0.00001 ,

shares they held as of the record date.

All share and per share amounts have been retroactively restated for the effects of this

reverse stock split.

Common stock underlying our outstanding warrants, convertible notes, and options have also been

adjusted, and the conversion and exercise prices have also been adjusted.

Consolidation

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Actual results could differ from those estimates.

believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the

believe the following critical accounting policies affect our more material judgments and estimates used in the preparation of the

accompanying consolidated financial statements.

Significant estimates include the allowance for doubtful accounts, the carrying value

Material estimates include the allowance for credit losses, the carrying value

of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities

assumed and stock issued in business combinations, and assumptions used in the Black-Scholes-Merton pricing model, such as expected volatility,

risk-free interest rate, share price, and expected dividend rate.

risk-free interest rate, share price, expected dividend rate, and the adequacy of insurance reserves.

revenues are derived from two major types of services to clients:

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Managed Services

have four distinct revenue streams under security managed services:

compliance, secured managed services, SOC managed services, and vCISO.

We derive revenue from compliance by ensuring our customers are implementing the right controls, properly prioritizing risks, and investing

in the appropriate remediation, so our customers can achieve compliance, adhere to industry standards and guidelines, and manage continuous

monitoring over time.

We derive revenue from secured managed services through security focused end-to-end network and device management

solutions for companies that want to outsource their administration needs to a team of senior engineers who provide modern strategy,

insights, and support.

We derive revenue from SOC managed services by offering SOC-as-a-service, which is a subscription-based service

that manages and monitors clients’ logs, devices, clouds, network, and assets for possible cyber threats.

We have three distinct revenue streams under cybersecurity security managed

risk and compliance, cyber defense operations, and secured managed services.

We derive revenue from risk and compliance by ensuring

our customers implement the right controls, properly prioritizing risks, and investing in the appropriate remediation, so our customers

can achieve compliance, adhere to industry standards and guidelines, and manage continuous monitoring over time.

We derive revenue from

vCISO when corporations are in need of cybersecurity services, but many do not have the capital resources or knowledge base to hire a

Chief Information Security Officer.

We offer this service to companies on an ongoing managed service basis as a resource to augment their

management team.

vCISO services include road mapping the future state for the client and providing our knowledgeable expertise to help

them achieve their security needs.

cyber defense operations through security focused end-to-end network and device management solutions for companies that want to outsource

their administration needs to a team of senior engineers who provide modern strategy, insights, support, SOC-as-a-service, which is a

subscription-based service that manages and monitors clients’ logs, devices, clouds, network, and assets for possible cyber threats.

Secured managed services include road mapping the future state for the client and providing our knowledgeable expertise to help them achieve

their security needs.

contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance

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We have determined the performance obligations for the following services:

We have determined that services provided under compliance contains a single performance obligation.

We recognize revenue as earned based

on time and material.

Managed Services :

and Compliance :

We have determined that services provided under risk and compliance contains a single performance obligation.

recognize revenue as earned based on time and material.

Cyber Defense Operations :

We consider these services to be one performance obligation, although they may include various parts (e.g., support

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Managed Services :

We have determined that SOC managed services is viewed by our company as one performance obligation, although it

may include various parts (e.g., architecture, design, security, etc.

(referred to generally as the “parts”)).

This position

is based on the fact that these various parts are not viewed as being distinct.

Revenue is recognized as earned ratably over the contract

We have determined that vCISO managed services is viewed by our company as one performance obligation, although it may include various

parts (e.g., strategy, advisory, and oversight (referred to generally as the “parts”)).

This position is based on the fact

that these various parts are not viewed as being distinct.

We have determined that secure IT and architecture services is viewed by our company as one performance

obligation, although it may include various parts (e.g., strategy, advisory, architecture, design, security and oversight (referred

to generally as the “parts”)).

This position is based on the fact that these various parts are not viewed as being

Revenue is recognized as earned based on time and materials.

have four distinct revenue streams under professional services:

technical assessments, incident response and forensics, training, and

other cybersecurity services.

We derive revenue from technical assessments by utilizing the same tools and techniques a malicious cybercriminal

would use to try to gain unauthorized access to highly guarded corporate systems and data to evaluate technical controls and quantify

business risks in a meaningful way.

We derive revenue from incident response and forensics by providing our customers with certified

experts experienced in locating and neutralizing threat actors who have breached their environments.

Our team is able to identify and

contain a cyberattack quickly, implement patches or configuration changes to prevent re-infection, perform forensic analysis to determine

root cause, and provide a plan of attack for improvements that will prevent a similar attack from succeeding in the future.

revenue from training by offering cybersecurity awareness training required under most compliance frameworks, and recommended as a best

practice under National Institute of Standards and Technology standards, to help reduce the risk of a successful cyber-attack.

revenue from other cybersecurity services for hardware and software for customers IT infrastructure along with occasional staffing services.

We have two distinct revenue streams

under professional services:

incident response and digital forensics, and security testing and training.

We derive revenue from security

testing and training by utilizing the same tools and techniques a malicious cybercriminal would use to try to gain unauthorized access

to highly guarded corporate systems and data to evaluate technical controls and quantify business risks in a meaningful way.

We also offer

cybersecurity awareness training required under most compliance frameworks, and recommended as a best practice under National Institute

of Standards and Technology standards, to help reduce the risk of a successful cyber-attack.

We derive revenue from the sale of hardware

and software for customer’s IT infrastructure along with occasional staffing services.

revenue from incident response and digital forensics by providing our customers with certified experts experienced in locating and

neutralizing threat actors who have breached their environments.

Our team is able to identify and contain a cyberattack quickly,

implement patches or configuration changes to prevent re-infection, perform forensic analysis to determine root cause, and provide a

plan of attack for improvements that will prevent a similar attack from succeeding in the future.

contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance

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We have determined the performance obligations for the following services:

Assessments :

We have determined that a technical assessment is viewed by our company as one performance obligation.

Revenue is recognized

at a point in time when the result of the assessment is turned over to the customer.

Response and Forensics :

We consider these services to be one performance obligation, although they may include various parts (e.g.,

determine the source, cause, and prevention of recurrence etc.

Security Testing and Training :

We have determined that security testing and training is viewed by our

company as one performance obligation.

Revenue is recognized at a point in time when the result of the assessment is turned over to the

customer, as earned based on time and materials, or upon delivery of equipment to the client.

Response and Digital Forensics :

We consider these services to be one performance obligation, although they may include various

parts (e.g., determine the source, cause, and prevention of recurrence etc.

(referred to generally as the “parts”)).

These parts are not

viewed as being distinct.

These parts are not viewed as being distinct.

We recognize revenue as earned based on time and material.

We have determined that services provided under compliance contains a single performance obligation.

We recognize revenue as earned based

on time and material.

Cybersecurity Services :

We have determined that services provided under other cyber security is comprised of hardware and software

sales and contains a single performance obligation.

We recognize revenue upon delivery of equipment to the client.

The staffing services

offered contains a single performance obligation based on time and materials and revenue is recognized as invoices are approved and generated.

and Cash Equivalents

consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

receivable are generally unsecured and reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts.

We provide for allowances for doubtful receivables based on our estimate of uncollectible amounts considering age, collection history,

receivable are generally unsecured, non-interest bearing and reported at their outstanding unpaid principal balances, net of allowances for credit losses.

We provide for allowances for credit losses based on our estimate of uncollectible amounts considering age, collection history,

and any other factors considered appropriate.

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We write off accounts receivable

against the allowance for doubtful accounts when a balance is determined to be uncollectible.

against the allowance for credit losses when a balance is determined to be uncollectible.

As of December 31, 2023 and 2022, our allowance

for doubtful accounts was $ 270,011 and $ 77,811 , respectively.

for credit losses was $ 219,141 and $ 270,011 , respectively.

cost of revenue

17 unchanged sentences

cash flows or appraised values, depending on the nature of the assets.

No impairment was recorded for the year ended December 31, 2022.

record our intangible assets at estimated fair value in accordance with Accounting Standards Code (“ASC”) 350, Intangibles

During the year ended December 31, 2023, we recognized losses

on impairment of goodwill and intangible assets of $ 45,194,717 and $ 3,116,039 , respectively.

During the year ended December 31, 2022,

we did not record a loss on impairment.

record our intangible assets at estimated fair value in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles

– Goodwill and Other .

Finite lived intangible assets are amortized over their estimated useful life using the straight-line

method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated.

represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired.

Goodwill is not amortized but is tested for impairment at least during the fourth quarter, at the reporting unit level or more frequently

if events or changes in circumstances indicate that the asset might be impaired.

Goodwill is tested for impairment at the reporting unit

level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting

unit is less than its carrying value.

If the reporting unit does not pass the qualitative assessment, then the reporting unit’s

carrying value is compared to its fair value.

The fair values of the reporting units are estimated using market and discounted cash flow

Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value.

The discounted cash flow

approach uses expected future operating results.

Failure to achieve these expected results may cause a future impairment of goodwill

at the reporting unit level.

Finite lived intangible assets are amortized over their estimated useful life using the

straight-line method, which is determined by identifying the period over which the cash flows from the asset are expected to be

represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets

Goodwill is not amortized but is tested for impairment at least annually during the fourth quarter, at the reporting unit

level or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Goodwill is tested for

impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not

that the fair value of the reporting unit is less than its carrying value.

If the reporting unit does not pass the qualitative

assessment, then the reporting unit’s carrying value is compared to its fair value.

The fair values of the reporting units are

estimated using a market approach.

Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair

Failure to maintain a similar market value may cause a future impairment of goodwill at the reporting unit level.

and Marketing Costs

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values using Level 3 inputs, based on the short-term maturity of these instruments.

The carrying amount of loans and of notes payable

The carrying amount of loans and notes payable

approximate the estimated fair value for this financial instrument as management believes that such debt and interest payable on the

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years ended December 31, 2023 and 2022.

On March 8, 2024, we filed an amendment to our certificate of incorporation

to effectuate a 1-for-15 reverse stock split.

Our shares of outstanding common stock and earnings per share calculation have been retroactively

restated for all periods presented.

following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these

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apply the provisions of ASC 718, Compensation – Stock Compensation , which requires the measurement and recognition of compensation

expense for all stock-based awards made to employees and nonemployees, in the statements of operations.

stock options issued to employees and members of our Board of Directors for their services, we estimate the grant date fair value of

each option using the Black-Scholes-Merton option pricing model.

The use of the Black-Scholes-Merton option pricing model requires management

to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the

expected life of the option, risk-free interest rates and expected dividend yields of the common stock.

For awards subject to service-based

vesting conditions, including those with a graded vesting schedule, we recognize stock-based compensation expense equal to the grant

date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term.

are recorded as they are incurred.

Due to our company’s limited history and lack of public market for its common stock, we used

the average of historical share prices of similar companies within our industry to calculate volatility for use in the Black-Scholes-Merton

option pricing model.

awards are accounted for using the fair value method.

Grant date fair values for stock options are determined using the Black-Scholes-Merton

option pricing model and a single option award approach.

expense for all stock-based awards made to employees and nonemployees, in the consolidated statements of operations.

For stock options

issued to employees and members of our Board of Directors for their services, we estimate the grant date fair value of each option using

the Black-Scholes-Merton option pricing model.

The use of the Black-Scholes-Merton option pricing model requires management to make assumptions

with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the

option, risk-free interest rates and expected dividend yields of the common stock.

For awards subject to service-based vesting conditions,

including those with a graded vesting schedule, we recognize stock-based compensation expense equal to the grant date fair value of stock

options on a straight-line basis over the requisite service period, which is generally the vesting term.

Forfeitures are recorded as

they are incurred.

Due to our company’s limited history and lack of public market for its common stock, we used the average of

historical share prices of our common stock and that of similar companies within our industry to calculate volatility for use in the

Black-Scholes-Merton option pricing model.

issued shares of our stock to vendors and nonemployee for services provided.

We recognize the accounting grant date fair value of the

stock award as compensation expense over the required service period of each award.

Shares issued for services are measured based on

the fair market value of the underlying common stock on their respective accounting grant dates.

We recognize the accounting grant date fair value of

the stock award as compensation expense over the required service period of each award.

Shares issued for services are measured

based on the fair market value of the underlying common stock on their respective accounting grant dates.

New shares are issued upon

the exercise of stock options.

revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided

to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license.

invoice customers in advance or in milestone-based installments.

revenue consisted of the following:

SCHEDULE OF DEFERRED REVENUE

Security managed services

Professional services

Total deferred revenue - current

Security managed services

Total deferred revenue – long term

increase in the deferred revenue balance is primarily driven by payments received in advance of satisfying our performance obligations,

offset by $ 4,120,260 of revenue recognized during 2023, which was included in the deferred revenue balance as of December 31, 2022.

deferred revenue balance as of December 31, 2023 represents our remaining performance obligations that will be recognized as revenue

over the period in which the performance obligations are satisfied, and is expected to be recognized in revenue as follows:

OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE

Security managed services

Professional services

Total deferred revenue

functional and reporting currency is the U.S.

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Issued Accounting Standards

May 2021, the Financial Accounting Standards Board issued ASU No.

2021-04, Earnings Per Share (Topic 260), Debt — Modifications

and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts

in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified

Written Call Options (a consensus of the Emerging Issues Task Force).

The ASU requires issuers to account for modifications or exchanges

of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the

economic substance of the modification or exchange.

Under the ASU, an issuer determines the accounting for the modification or exchange

based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons.

The ASU is applied prospectively

and is effective for us for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years.

Early adoption

is permitted.

The adoption of this standard did not have a material impact on our consolidated financial statements.

October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers.

The new guidance requires contract assets and contract liabilities acquired in a business combination

to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts.

The ASU is applied prospectively and

is effective for us for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

Early adoption

is permitted.

We are currently evaluating the impact that adopting this standard will have on our consolidated financial statements.

October 2021, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) No.

2021-08, Business Combinations

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

The new guidance requires contract

assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC Topic 606 as if the acquirer

had originated the contracts.

The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15,

2022, and interim periods within those fiscal years.

Early adoption is permitted.

The adoption of this standard did not have a material

impact on our consolidated financial statements.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures which expands

annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment

ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025,

with early adoption permitted.

We are currently evaluating the potential effect that the updated standard will have on our financial

statement disclosures.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740):

Improvements to Income Tax Disclosures to expand the disclosure

requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for our

annual periods beginning January 1, 2025, with early adoption permitted.

W e are currently evaluating

the potential effect that the updated standard will have on our financial statement disclosures.

4 – ACQUISITIONS

Acquisition Corporation

July 26, 2021, we entered into an agreement and plan of merger with VelocIT, pursuant to which VelocIT became a wholly owned subsidiary

of our company.

All issued and outstanding shares of common stock of VelocIT were converted into the right to receive an aggregate of

up to 2,566,778 shares of common stock, subject to a holdback of 256,678 shares of our common stock.

In addition, we issued

replacement options to various VelocIT employees to purchase an aggregate of 1,542,251 shares of our common stock with

a fair value of $ 6,861,203 which was included in the purchase price of the transaction.

The transaction closed on August 12, 2021.

following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration paid

Tangible assets acquired:

Accounts receivable

Prepaid expenses

Property and equipment

Total tangible assets

Intangible assets acquired:

Tradename - trademarks

Intellectual property

Total intangible assets

Assumed liabilities:

Accounts payable

Accrued expenses

Loans payable

SBA loan payoff

Total assumed liabilities

Net liabilities acquired

Goodwill ( a )

is not deductible for tax purposes.

Technology Systems, Inc.

October 1, 2021, we entered into a stock purchase agreement with ATS, ATE, James Montagne as the sole shareholder of ATS, and James Montagne

and Miriam Montagne, as the sole shareholders of ATE (the “Shareholders”).

Pursuant to the agreement, we purchased from the

Shareholders all of the outstanding shares of ATE and ATS.

The aggregate purchase price for the shares was 200,000 shares of our common

stock and $ 75,000 in cash.

Furthermore, the Shareholders shall receive an additional 100,000 shares of our common stock based upon Atlantic

achieving certain revenue and earnings thresholds and an additional $ 150,000 in cash upon our listing to a national exchange.

31, 2021, we noted that Atlantic would not achieve the certain revenue and earnings threshold for additional compensation and,

therefore, was not included in the transaction price.

following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration paid

Tangible assets acquired:

Accounts receivable

Prepaid expenses

Property and equipment

Total tangible assets

Intangible assets acquired:

Tradename - trademarks

Intellectual property

Total intangible assets

Assumed liabilities:

Accounts payable

Accrued expenses

Total assumed liabilities

Net assets acquired

Goodwill ( a )

is not deductible for tax purposes.

LLC Acquisition

October 8, 2021, we entered into a merger agreement with RED74 and Ticato Holdings, Inc., a New Jersey corporation (“Ticato”),

and Tim Coleman, as sole shareholder of Ticato.

Tim Coleman and Ticato were the sole shareholders of RED74.

Pursuant to the agreement,

the merger became effective at such time as a certificate of merger was accepted by the Secretary of State of New Jersey, or November

9, 2021 (the “Effective Time”).

All shares of RED74 issued and outstanding immediately prior to the Effective Time were converted

into the right to receive an aggregate of 340,000 shares of our common stock and $ 50,000 in cash..

provides secured managed services and key IT security management expertise to small-to-mid-market businesses in New Jersey.

RED74 focuses

primarily on clients within two industry verticals:

financial services and distribution/warehouse management.

RED74 offers strategic

solutions that address the specific needs of these smaller enterprises made possible by their experienced and personable staff and industry-leading

technology processes.

Its experienced staff members are well-versed in either partial or total secured managed solutions for businesses.

RED74 has a single office location in Pennington, New Jersey and supports clients in New Jersey, Manhattan, and Eastern Pennsylvania.

following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration paid

Tangible assets acquired:

Accounts receivable

Property and equipment

Total tangible assets

Intangible assets acquired:

Tradename - trademarks

Intellectual property

Customer base

Total intangible assets

Assumed liabilities:

Accounts payable

Accrued expenses

Total assumed liabilities

Net assets acquired

Goodwill ( a )

is not deductible for tax purposes.

Point Equities, Inc.

(Arkavia) Acquisition

December 1, 2021, we entered into a stock purchase agreement with Arkavia and all of the owners of Arkavia, pursuant to which we acquired

all of the issued and outstanding equity securities of Arkavia (the “Arkavia Acquisition”).

Under the terms of the Arkavia

Acquisition, all of the issued and outstanding equity securities of Arkavia were exchanged for an aggregate of 2,914,000 shares of our

common stock.

a cybersecurity services company headquartered in Santiago, Chile, is oriented to solve problems with the best technological alternatives

and their recognized IT Engineering services.

Founded in 2010, Arkavia provides consulting, delivery, managed security service provider,

and network monitoring services to a diversified client base throughout South America.

With years of experience backed by multiple certifications

of its specialists, Arkavia’s customers include multiple leading brands in the market in each important business segment.

following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration paid

Tangible assets acquired:

Accounts receivable

Other receivables

Property and equipment

Total tangible assets

Intangible assets acquired:

Tradename - trademarks

Intellectual property

Customer base

Total intangible assets

Assumed liabilities:

Accounts payable

Accrued liabilities

Long-term debt

Total assumed liabilities

Net assets acquired

Goodwill ( a )

is not deductible for tax purposes.

Digital Security, Inc.

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Net assets acquired

Goodwill ( a )

and intangibles are not deductible for tax purposes.

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Net assets acquired

Goodwill ( a )

not deductible for tax purposes.

is not deductible for tax purposes.

LLC Acquisition

13 unchanged sentences

fair values as of the acquisition date, with the excess recorded to goodwill.

During the measurement period, which will not exceed one

year from closing, we will continue to obtain information to assist us in finalizing the acquisition date fair values.

Any qualifying

changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts

allocated to goodwill.

following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed

15 unchanged sentences

Net assets acquired

Goodwill ( a )

and intangibles are not deductible for tax purposes.

8 unchanged sentences

fair values as of the acquisition date, with the excess recorded to goodwill.

During the measurement period, which will not exceed one

year from closing, we will continue to obtain information to assist us in finalizing the acquisition date fair values.

Any qualifying

changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts

allocated to goodwill.

following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed

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Net liabilities assumed

Goodwill ( a )

is not deductible for tax purposes.

forma financial information is not presented because the acquisitions were not material to our financial statements, individually or

in the aggregate.

5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

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Prepaid insurance

Deferred interest

Total prepaid expenses and other current assets

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accumulated depreciation

( 1,700,799 )

Property and equipment, net

1 unchanged sentence

7 – INTANGIBLE ASSETS AND GOODWILL

December 31, 2021, we determined it was more-likely-than-not that the carrying value of goodwill in our reporting units was impaired

as of December 31, 2021.

The fair value estimates for all reporting units were based on a blended analysis of the present value of future

cash flows and the market value approach.

The significant estimates used in the discounted cash flows model included our weighted average

cost of capital, projected cash flows, and the long-term rate of growth.

The significant estimates used in the market approach model

included identifying public companies engaged in businesses that are considered comparable to those of the reporting unit and assessing

comparable revenue and earnings multiples in estimating the fair value of the reporting unit.

The excess of the reporting unit’s

carrying value over the estimate of the fair value was recorded as goodwill impairment of $ 22,078,064 .

There was no impairment recognized

as of and during the year ended December 31, 2022.

the year ended December 31, 2023, our share price reduction was determined to be an indicator of impairment under ASC 350 of our two

reporting units, United States and Latin America.

We performed ongoing assessments to consider whether events or circumstances had occurred

that could more likely than not reduce the fair value of a reporting unit below its carrying value.

The valuation limitation from our

recent share price decline caused us to perform a goodwill impairment test as of December 31, 2023.

on the results of this testing, for the year ended December 31, 2023, we recorded a pre-tax, non-cash impairment charge related to the

United States reporting unit and Latin America reporting unit of $ 35,933,364 and $ 9,261,353 , respectively.

This charge is recorded as

Impairment of goodwill on the Consolidated Statements of Operations and Comprehensive Loss.

The reduction in fair value for the reporting units, and corresponding impairment charge, was

primarily driven by the decline in our share price and uncertainty surrounding

our company and a decrease in forecasted near-term cashflows of our reporting units.

As part of our quantitative testing process for goodwill of the reporting

units, we estimated fair values using a market approach.

following table summarizes the changes in goodwill during the years ended December 31, 2023 and 2022, respectively:

SCHEDULE OF CHANGES IN GOODWILL

Balance December 31, 2020

Acquisition of goodwill

OF CHANGES IN GOODWILL

Balance as of December 31, 2021

Accumulated impairment losses

( 22,078,064 )

Reclassification based on valuation report (1)

Balance December 31, 2021

Acquisition of goodwill

Goodwill acquired during year

Foreign currency translation adjustment

Ending balance, December 31, 2022

the year ended December 31, 2022, we completed a valuation for the December 16, 2021 acquisition

As such, the purchase price allocation disclosed in our Annual Report in Form

10-K for December 31, 2021, filed on March 31, 2022, changed and, therefore, goodwill changed.

Balance as of December 31, 2022

Accumulated impairment losses

( 22,078,064 )

Foreign currency translation adjustment

Impairment losses

( 45,194,717 )

Balance as of December 31, 2023

Accumulated impairment losses

performed an impairment test of our intangible assets based upon the conditions that precipitated the goodwill impairment test described

on the results of this testing, we recorded a pre-tax, non-cash impairment charge totaling $ 3,116,039 for the year ended December 31,

2023, related to our customer base, intellectual property, tradenames-trademarks and non-compete, which is included in the net carry

amount of intangibles in the table below.

These charges were recorded in Selling, general and administrative expenses on the Consolidated

Statement of Operations and Comprehensive Loss.

values used in testing for potential impairment of our intangible assets are calculated using a discounted cash flows method by applying

estimated cash flows from our forecasted revenue and expenses of the business that utilize those assets.

The assumed cash flows from

this calculation are discounted at a rate based on a market participant discount rate.

There is uncertainty surrounding the revenue and cost growth factors for

these assets and a change in the long-term revenue and cost growth rate or increase in the discount rate assumption could increase the

likelihood of a future impairment.

the recognition of the impairment losses, the affected assets had an aggregate carrying value of $ 455,809 as of December 31, 2023.

assets, net are summarized as follows:

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Intellectual property/technology

( 1,078,457 )

Intangible Asset

8 unchanged sentences

Tradenames – trademarks

$ ( 1,167,476 )

Customer base

3 unchanged sentences

$ ( 2,674,297 )

the third quarter of 2022, as the result of rebranding and expected future marketing of our products and services, we made the decision

to phase out certain indefinite-lived tradenames from acquired subsidiaries.

We believe the phase-out and integration of the rebranding

and marketing will be completed no later than June 30, 2024, and expect to recognize $ 1,211,800 of amortization expense from tradenames

previously held as indefinite-lived.

expense of identifiable intangible assets was $ 2,044,999 and $ 2,338,273 , for the years ended December 31, 2023 and 2022, respectively.

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on the balance of intangibles assets at December 31, 2023, expected future amortization expense is as follows:

SCHEDULE OF FUTURE AMORTIZATION EXPENSE

Amortization Expense

OF FUTURE AMORTIZATION EXPENSE

Future Amortization Expense

8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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Accounts payable

Accrued payroll

Accrued payroll and bonuses

Accrued expenses

Accrued commissions

Indirect taxes payable

Accrued interest

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Consulting Agreement with Stephen Scott

August 2020, we entered into an Independent Consulting Agreement with Stephen Scott, a Director of our company, with respect to advisory

and consulting services relating to our strategic and business development, and sales and marketing.

August 2020, we entered into an Independent Consulting Agreement with Stephen Scott, a then director of our company, with respect to

advisory and consulting services relating to our strategic and business development, and sales and marketing.

Scott receives a consulting

fee of $ 11,500 per month for such services.

July 2023, we entered into an Independent Consulting Agreement with Mr.

Scott, to provide, on a non-exclusive basis, advisory and consulting

services relating to our strategic and business development, intellectual property development, banking relationships, and strategic

M&A for a period of one year.

Scott will receive a consulting fee of $ 15,000 per month for such services under the terms of this

During the years ended December 31, 2023 and 2022, we paid consulting fees to Mr.

the amount of $ 138,000 each year.

Scott in the amounts of $ 159,000 and $ 138,000 ,

respectively.

Note Payable – Related Party

December 23, 2020, we issued an unsecured convertible note to Hensley & Company in the principal amount of $ 3,000,000 bearing an

interest rate at 6.00 % per annum payable at maturity with a maturity date of December 31, 2021 , with a conversion price of $ 2.00 per share.

On December 31, 2021, Hensley & Company converted the principal amount of $ 3,000,000 for 1,500,000 shares of our common stock

at a conversion price of $ 2.00 per share.

March 2023, we issued an unsecured convertible note to Hensley & Company in the principal amount of $ 5,000,000

bearing an interest rate of 10.00 %

The principal amount, together with accrued and unpaid interest is due on March

At any time prior to or on the maturity date, Hensley & Company is permitted to convert all or any portion of

the outstanding principal amount and all accrued and unpaid interest thereon into shares of our common stock at a conversion price

per share ($ 1.20 on a pre-reverse split basis).

During the year ended December 31, 2023, we recorded interest expense of $ 388,888

and as of December 31, 2023, we had accrued interest of $ 388,888 .

Andy McCain, a director of our company, is President and Chief Executive officer of Hensley & Company.

Services Agreement with Hensley Beverage Company – Related Party

July 2021, we entered into a 1-year Managed Services Agreement with Hensley Beverage Company to provide secured managed services.

also may be engaged by Hensley Beverage Company from time to time to provide other related services outside the scope of the Managed

Services Agreement.

While the agreement provides for a term through December 31, 2021, the agreement will continue until terminated by

either party.

For the years ended December 31, 2022 and 2021, we received $ 850,445 and $ 466,597 , respectively from Hensley Beverage Company

for contracted services and had an outstanding receivable balance of $ 15,737 and $ 11,508 as of December 31, 2022 and 2021, respectively.

Receivable – Related Party

provided cash infusions to a related party to fund a wholly owned subsidiary in Peru for start-up and operational costs.

The subsidiary

is incorporated and as such, the assets, liabilities and operation results are included in the condensed consolidated financial statements.

At December 31, 2022, no amount remains outstanding.

July 2021, we entered into a 1-year Managed Services Agreement with Hensley Beverage Company, an entity affiliated with Mr.

director of our company, to provide secured managed services.

We also may be engaged by Hensley Beverage Company from time to time to

provide other related services outside the scope of the Managed Services Agreement.

While the agreement provides for a term through December

31, 2021, the agreement will continue until terminated by either party.

For the years ended December 31, 2023 and 2022, we received

$ 1,417,398 and $ 850,445 , respectively from Hensley Beverage Company for contracted services and had an outstanding receivable balance

of $ 152,213 and $ 15,737 as of December 31, 2023 and 2022, respectively.

10 - STOCKHOLDERS’ EQUITY

3 unchanged sentences

voting rights.

the years ended December 31, 2022 and 2021, we issued an aggregate of 2,412,474 and 1,625,000 shares of common stock to investors for

cash proceeds of $ 10,689,087 and $ 3,250,000 , respectively.

the years ended December 31, 2022 and 2021, we issued an aggregate of 909,819 and 392,900 shares of common stock, respectively, to consultants

and vendors for services rendered.

December 31, 2021, we issued 1,500,000 shares of common stock pursuant to the conversion of a convertible note with Hensley & Company.

January 18, 2022, we issued a warrant to the underwriter of our Form S-1 to purchase an aggregate 144,200 shares of our common stock.

The warrant is exercisable for a period of 5 years from the date of issuance at an exercise price of $ 5.00 per share.

the years ended December 31, 2023 and 2022, we issued an aggregate of 1,782,658

shares of common stock ( 26,739,853 and 2,412,474 on a pre-reverse split basis) to investors for cash proceeds of $ 6,682,198

and $ 10,689,087 ,

respectively.

the years ended December 31, 2023 and 2022, we issued an aggregate of 366,667 and 60,655 shares

of common stock ( 5,500,000 and 909,819 on a pre-reverse split basis), respectively, to consultants, lenders, and vendors for services rendered.

January 18, 2022, we issued a warrant to the underwriter of our Form S-1 to purchase an aggregate 9,614

shares of our common stock ( 144,200 on a pre-reverse split basis).

The warrant is exercisable for a period of 5

years from the date of issuance at an exercise price of $ 75.00

per share ($ 5.00 on a pre-reverse split basis).

May 19, 2023, we completed a $ 4,000,000

registered direct offering of our common stock, pursuant to which 1,333,334

shares of our common stock ( 20,000,000 on a pre-reverse split basis) were issued.

In addition, we granted the placement agent

warrants to purchase 40,000

shares ( 600,000 on a pre-reverse split basis) of our common stock at a price of $ 3.75

per share ($ 0.25 on a pre-reverse split basis).

We have used the net proceeds from the offering to repay $ 2,000,000

in outstanding principal of short-term indebtedness and for general corporate purposes.

The warrant is exercisable at any time on or

after November 12, 2023, and expires on May

follow table summarizes warrant activity:

4 unchanged sentences

Exercisable at December 31, 2022

at January 1, 2023

at December 31, 2023

11 – STOCK-BASED COMPENSATION

Equity Incentive Plan

Board of Directors approved our 2019 Equity Incentive Plan (the “2019 Plan”) in June 2019, and our stockholders holding a

majority of the outstanding shares of our common stock approved and adopted the 2019 Plan.

On October 17, 2022, the maximum number of

shares of our common stock that may be issued under our 2019 Plan was increased to 60,000,000 shares.

As of December 31, 2022, there

were 20,213,408 shares of common stock available for issue as future awards under the 2019 Plan.

granted options for the purchase of 17,457,613 and 11,091,691 shares of common stock during the year ended December 31, 2022 and 2021,

2023 Equity Incentive Plan (the “2023 Plan”), which replaces our 2019 Equity Incentive Plan (the “2019

Plan”), became effective on September 13, 2023.

The total number of shares of our common stock reserved and available for

delivery under the 2023 Plan at any time during the term of the 2023 Plan will be 2,666,667

shares ( 40,000,000 on a pre-reverse split basis) plus any remaining available for delivery under the 2019 Plan on the effective date

of the 2023 Plan.

As of the effective date of the 2023 Plan, there were 1,455,983

shares ( 21,839,752 on a pre-reverse split basis) remaining available for delivery under the 2019 Plan.

Therefore, as of September

13, 2023, there were an aggregate of 4,122,650

shares ( 61,839,752 on a pre-reverse split basis) reserved and available for delivery under the 2023 Plan.

In addition, to the extent

that any stock options pursuant to the 2019 Plan expire, terminate or are canceled or forfeited under the terms of the 2019 Plan,

the shares of common stock reserved for issuance pursuant to such stock options will become available for issuance under the 2023

granted options for the purchase of 326,512

and 1,049,489

shares of common stock ( 4,900,833 and 17,457,613 on a pre-reverse split basis) during the year ended December 31, 2023 and 2022,

respectively.

1 unchanged sentence

OF BLACK-SCHOLES STOCK OPTIONS GRANTED

For the Year Ended

December 31, 2022

December 31, 2021

Risk free interest rate

1.43 % - 4.22

0.42 % - 1.34

the Year Ended

Risk free interest

Contractual term (years)

Expected volatility

87.11 % - 90.90

73.43 % - 85.22

Expected dividend yield

6 unchanged sentences

Expired or cancelled

( 4,193,243 )

Outstanding at December 31, 2022

( 2,689,071 )

Expired or cancelled

( 9,743,169 )

Outstanding at December 31, 2023

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related to the options.

The weighted-average grant-date fair value of options granted during the years 2023 and 2022 was $ 2.57 and $ 38.82 ,

respectively.

The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022, was $ 887,595 and $ 7,164,856 ,

respectively.

the year-ended December 31, 2023, 317,929 options vested, net of forfeitures.

12 – COMMITMENTS AND CONTINGENCIES

Settlement Agreement

October 27, 2020, we entered into an advisory agreement (the “Advisory Agreement”) with Maxim Group LLC (“Maxim”),

pursuant to which the parties agreed to certain compensation obligations in the form of our common stock, cash and future rights.

disputes arose between the parties regarding the duties and obligations pursuant to the Advisory Agreement, resulting in the parties

agreeing to enter into a settlement and release agreement on January 13, 2022.

As a result, we recorded a settlement liability at December

31, 2021 of $ 470,000 on the statement of operations and issued 400,000 shares of our common stock to Maxim pursuant to the settlement.

The settlement liability was paid in January 2022.

are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any of our directors, officers

or affiliates, any owner of record or beneficially of more than 5 % of any class of our voting securities, or security holder is a party

adverse to us or has a material interest adverse to us.

time-to-time, we are a party to litigation and subject to claims, suits, regulatory and government investigation, other proceedings and

consent decrees in the ordinary course of business.

We investigate claims as they arise and accrue estimates for resolutions of legal

and other contingencies when losses are probable and reasonably estimable.

are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any of our directors,

officers or affiliates, any owner of record or beneficially

of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest

adverse to us .

While the results of such normal course claims and legal proceedings, regardless of the underlying nature of

the claims, cannot be predicted with certainty, management believes, based on current knowledge and the likely timing of resolution

of various matters, any additional reasonably possible potential losses above the amounts accrued for such matters would not be

However, the outcome of claims, legals proceedings or investigations are inherently unpredictable and subject to

uncertainty, and may have an adverse effect on us because of defense costs, diversion of management resources and other factors that

are not known to us or cannot be quantified at this time.

We may also receive unfavorable preliminary or interim rulings in the

course of litigation, and there can be no assurances that favorable final outcomes will be obtained.

The final outcome of any

current or future claims or lawsuits could adversely affect our business, financial condition or results of operations.

periodically evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued

or the reasonably possible losses that we have disclosed, and make adjustments as appropriate.

are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business.

16 unchanged sentences

of indirect tax audits, litigation, or settlements could be materially different than the amounts established for indirect tax contingencies.

services are generally warranted to deliver and operate in a manner consistent with general industry standards that are reasonably applicable

and materially conform with our documentation under normal use and circumstances.

offer a limited warranty to certain customers, subject to certain conditions, to cover certain costs incurred by the customer in case

of a security breach.

We have entered into an insurance policy to cover our potential liability arising from this limited warranty arrangement.

We have not incurred any material costs related to such obligations and have not accrued any liabilities related to such obligations

in the consolidated financial statements as of December 31, 2023 and 2022.

addition, we also indemnify certain of our directors and executive officers against certain liabilities that may arise while they are

serving in good faith in their company capacities.

We maintain director and officer liability insurance coverage that would generally

enable us to recover a portion of any future amounts paid.

13 – LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT

1 unchanged sentence

OF LOAN PAYABLE

loans (US dollar denominated)

loans (Chilean peso denominated)

current portion

term loans payable

entered into a bridge loan with Bell Bank (the “Bell Bank Note”), secured by substantially all of our assets, in the principal

amount of $ 5,000,000

Effective Interest Rate

December 31, 2023

December 31, 2022

Term loans (US dollar denominated)

4.00 % – 71.55 %

Term loans (Chilean peso denominated)

3.48 % - 19.20 %

Less current portion

( 3,691,464 )

( 7,758,831 )

Long term loans payable

entered into a bridge loan with Bell Bank (the “Bell Bank Note”), secured by substantially all of our assets, in the

principal amount of $ 5,000,000

bearing an interest rate of 4.00 %

per annum payable monthly with a maturity date of December

The bridge loans are guaranteed by

In December 2022, we extend the maturity of the bridge loan to March 14, 2023.

The applicable interest rate on the loan extension

the prime rate at the time of the extension.

14, 2022 , which was extended to March 14, 2023.

We did not repay this bridge loan on the maturity date, which resulted in an

event of default under the terms thereof.

As a result, the interest rate applicable to amounts due under this bridge loan increased

This bridge loan was repaid in full on March 20, 2023.

We recorded interest expense of $ 116,667

for the year-ended December 31, 2022, and had accrued interest of $ 4,167

as of December 31, 2022.

The effective interest

of this loan was 4.22 %.

and $ 114,167

for the years ended December 31, 2023 and 2022, respectively, and had accrued interest of zero

as of December 31, 2023 and 2022, respectively.

subsidiaries in the United States are borrowers under certain term loans.

3 unchanged sentences

$ 20,605 and $ 50,754 for the years ended December 31, 2023 and 2022, respectively.

Accrued interest for the loans was $ 13,435 and zero

Accrued interest for the loans was zero and $ 13,435

as of December 31, 2023 and 2022, respectively.

6 unchanged sentences

on these term loans of $ 617,804 and $ 318,055 for the years ended December 31, 2023 and 2022, respectively.

Accrued interest for the loans

was zero as of December 31, 2022 and 2021, respectively.

The aggregate effective interest rate of these term loans was 10.90 %.

The aggregate effective interest

rate of these term loans was 11.15 %.

March 2023, we entered into a cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000 and paid $ 87,500 in

upfront fees.

The terms of the cash advance agreement called for us to remit aggregate weekly payments of $ 99,398 until such time as

we had repaid $ 2,870,000 .

This cash advance agreement was secured by the accounts receivable of CISO Global Inc.

and our wholly owned

subsidiaries, Talatek, LLC and True Digital Security, Inc.

We recorded interest expense of $ 978,833 for the year ended December 31, 2023.

August 2023, we entered into a second cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000 and paid $ 50,000

in upfront fees.

The terms of the second cash advance agreement called for us to remit weekly payments of $ 80,588 until such time as

we had repaid $ 2,740,000 .

This cash advance agreement was secured by the accounts receivable of CISO Global Inc.

and our wholly owned

subsidiaries, Talatek, LLC and True Digital Security, Inc.

We recorded interest expense of $ 468,707 for the year ended December 31, 2023.

November 2023, we entered into a business loan and security agreement, pursuant to which we obtained a loan with a principal amount

of $ 2,200,000

and paid an origination fee of $ 44,000 .

The business loan bears interest at a rate of 53.44 %

per annum and is payable in 52 weekly installments of $ 53,731 .

We may prepay the loan in whole or in part, but partial repayments do not reduce the total interest payable on the loan, of $ 594,000 .

The business loan is secured by all of the assets of our US subsidiaries.

The proceeds of the loan were used to repay in full the

amount owned under our cash advance agreements that we entered into in March and August 2023.

For the year ended December 31, 2023,

we recorded interest expense of $ 200,881 .

connection with the business loan, we entered into a fee agreement pursuant to which we issued 133,334

shares ( 2,000,000 on a pre-reverse split basis) of our common stock as partial consideration for the lender to enter into the

business loan and extend credit to us.

We recorded the issuance of our common stock as a discount to the business loan, which is

amortized using the effective interest method over the term of the loan.

Notes Payable

December 23, 2020, we issued to Hensley & Company an unsecured convertible note payable in the principal amount of $ 3,000,000 .

convertible note bore interest at 6.00 % per annum, with an effective interest rate of 8.50 % per annum, payable at maturity with a maturity

date of December 31, 2021 .

Amounts due under the note were convertible into shares of our common stock at any time at the option of the

Holder, at a conversion price of $ 2.00 per share.

The issuance of the note resulted in a discount from the beneficial conversion feature

totaling $ 75,000 .

Interest expense on the note was zero and $ 255,891 for the years ended December 31, 2022 and 2021, respectively.

December 31, 2021, Hensley & Company converted the principal amount of $ 3,000,000 for 1,500,000 shares of our common stock.

October 27, 2021, we issued to Neil Stinchcombe, a convertible note in the principal amount of $ 1,500,000 bearing an interest rate of

5.00 % per annum payable at maturity with a maturity date of January 27, 2022 , with a conversion price of $ 5.00 per share.

2022, we entered into Amendment #1 to the note pursuant to which the maturity date was extended to October 27, 2022 .

On March 27, 2023,

we entered into a letter agreement with Neil Stinchcombe to resolve certain payment terms of his convertible note.

We agreed to repay the principal amount

of the note in three equal installment payments of $500,000 on each of March 31, April 28 and May 31, 2023, with accrued interest to be

paid on May 31, 2023 at the note’s reflected interest rate of 5.00% per annum.

If we fail to make any of the foregoing payments,

the applicable interest rate will be increased to a default rate of 24.00% per annum.

The outstanding principal of this note was $ 1,500,000 at December 31, 2022 and 2021.

We recorded interest expense of $ 106,507 and $ 12,500

during the years ended December 31, 2022 and 2021, respectively.

At December 31, 2022 and 2021, we recorded accrued interest of $ 119,007

and $ 12,500 , respectively, with respect to this note.

June 2022, we issued an unsecured convertible note payable in the principal amount of $ 1,000,000 and if repaid in cash, is payable at

105% of the principal amount.

The convertible note bears interest at 5.00 % per annum, with an effective interest rate of 13.57 % per annum,

payable at maturity with a maturity date in June 2023.

Amounts due under the note could be converted into shares of our common stock

at any time at the option of the Holder, at a conversion price of $ 7.83 per share.

We recorded interest expense on the note of $ 79,167

for the year ended December 31, 2022 and accrued interest as of December 31, 2022 was $ 29,167 .

October 2021, we issued to Neil Stinchcombe, a convertible note in the principal amount of $ 1,500,000

bearing an interest rate of 5.00 %

per annum payable at maturity with a maturity date of January

27, 2022 , with a conversion price of $ 75.00

per share ($ 5.00 on a pre-reverse split basis).

On March 10, 2022, we entered into Amendment #1 to the note pursuant to which the maturity date was extended to October

On March 27, 2023, we entered into a letter agreement with Neil Stinchcombe to resolve certain payment terms of his

convertible note.

We agreed to repay the principal amount of the note in three equal installment payments of $ 500,000

on each of March 31, April 28 and May 31, 2023, with accrued interest to be paid on May 31, 2023 at the note’s reflected

interest rate of 5.00 %

The principal amount of this note, plus all accrued interest was repaid in full under the terms of the letter agreement.

For the years ended December 31, 2023 and 2022, we recorded interest expense (recovery) of ($ 16,970 )

and $ 106,507 .

June 2022, we issued an unsecured convertible note payable in the principal amount of $ 1,000,000

bearing an interest rate of 5.00 %

per annum payable monthly with a maturity date of June 2023, with a conversion price of $ 117.45 ($ 7.83 on a pre-reverse split basis).

outstanding principal of this note can be redeemed at any time by us or at maturity at 105% .

At maturity in June 2023, we

repaid the unpaid accrued interest on this convertible note and rolled the principal amount of $ 1,050,000

into a new convertible note with the lender.

We recorded interest expense of $ 22,101

for the years ended December 31, 2023 and 2022, respectively.

June 2023, we issued an unsecured convertible note in the principal amount of $ 1,050,000 bearing an interest rate of 10.00 % per annum

payable monthly.

The principal amount, together with accrued and unpaid interest is due on June 7, 2024 .

At any time prior to or on the

maturity date the holder is permitted to convert all of the outstanding principal amount into 4.20 % of the authorized units of our wholly

owned subsidiary vCISO, LLC.

We recorded interest expense of $ 61,954 for the year ended December 31, 2023.

Accrued interest as of December

31, 2023 was $ 61,954 .

March 2023, we issued an unsecured convertible note to Hensley & Company in the principal amount of $ 5,000,000

bearing an interest rate of 10.00 %

The principal amount, together with accrued and unpaid interest is due on March

At any time prior to or on the maturity date, Hensley & Company is permitted to convert all or any portion of

the outstanding principal amount and all accrued but unpaid interest thereon into shares of our common stock at a conversion price

per share ($ 1.20 on a pre-reverse split basis).

During the year ended December 31, 2023, we recorded interest expense of $ 388,888 .

Accrued interest as of December 31, 2023 was $ 388,888 .

McCain, a director of our company, is President and Chief Executive Officer of Hensley & Company.

October 2023, we issued an unsecured convertible note in the principal amount of $ 1,000,000

bearing an interest rate of 12.00 %

per annum payable monthly.

The principal amount, together with accrued and unpaid interest is due on October

At any time prior to or on the maturity date the holder is permitted to convert all of the outstanding principal

amount into shares of our common stock at a conversion price of $ 1.7595

per share ($ 0.1173 on a pre-reverse split basis).

We recorded interest expense of $ 26,983

for the year ended December 31, 2023.

Accrued interest as of December 31, 2023 was $ 26,983 .

minimum payments under the above debt instruments following the year ended December 31, 2023, are as follows:

2 unchanged sentences

( 5,741,464 )

term debt, net of current portion

Long term debt, net

the years ended December 31, 2023 and 2022, we recognized additional ROU assets and lease liabilities of $ 733,782 and $ 476,986 , respectively.

3 unchanged sentences

borrowing rate.

The incremental borrowing rate applied was 6.00 %.

As of December 31, 2022, our leases had a remaining weighted average

term of 2.34 years.

The weighted average incremental borrowing rate applied was 9.99 %.

As of December 31, 2023, our leases had a remaining

weighted average term of 3.76 years.

following table presents net lease cost and other supplemental lease information:

OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION

Year Ended December 31, 2022

Year Ended December 31, 2021

December 31, 2023

December 31, 2022

Operating lease cost (cost resulting from lease payments)

21 unchanged sentences

SCHEDULE OF STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT

Year Ended December 31,

Computed tax benefit at statutory rate

State income taxes, net of federal tax effect

Effect of rates different than statutory

Stock-based compensation

Change in valuation allowance

Return to provision adjustments

Effective tax rate

Ended December 31,

tax benefit at statutory rate

in valuation allowance

to provision adjustments

tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows

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SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Year Ended December 31,

Ended December 31,

and equipment

for doubtful accounts

operating loss carryforwards

payable and accrued liabilities

deferred tax assets

Property and equipment

Allowance for doubtful accounts

Net operating loss carryforwards

Stock-based compensation

Accounts payable and accrued liabilities

Right of use assets

Goodwill impairment

Total deferred tax assets

Valuation allowance

( 4,381,644 )

( 8,937,487 )

Net deferred income taxes

deferred income taxes

tax liabilities

deferred tax liabilities

Intangible assets

$ ( 2,041,418 )

Prepaid expenses

( 1,546,113 )

Lease liability

Total deferred tax liabilities

$ ( 2,299,668 )

$ ( 1,546,113 )

Net deferred tax liabilities

$ ( 435,678 )

Net deferred tax liability by jurisdiction

$ ( 435,678 )

deferred tax liabilities

deferred tax liability by jurisdiction

account for deferred taxes under ASC 740, Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by

9 unchanged sentences

is commensurate with the extent to which it can be objectively verified.

have provided a valuation allowance for our net deferred tax assets at December 31, 2022 and 2021, due to the uncertainty surrounding

the future realization of such assets and the cumulative losses we have generated.

Therefore, no benefit has been recognized in the financial

statements for the net operating loss carryforwards and other deferred tax assets.

During the years ended December 31, 2022 and 2021,

respectively, the valuation allowance decreased by $ 4,555,842 and increased by $ 9,180,200 , respectively.

of December 31, 2022, we had approximately $ 21,511,055 of consolidated federal net operating loss carryforwards and $ 25,595,104 of apportioned

state net operating loss carryforwards available to offset future taxable income, respectively.

If unused, the federal and state net

operating loss carryforwards will begin to expire in 2032.

Additionally, we had $ 3,584,038 of Chile net operating loss carryforwards

and $ 916,601 of Peru net operating loss carryforwards.

We have provided a valuation allowance

for our net deferred tax assets at December 31, 2023 and 2022, due to the uncertainty surrounding the future realization of such assets

and the cumulative losses we have generated.

Therefore, no benefit has been recognized in the financial statements for the net operating

loss carryforwards and other deferred tax assets.

During the years ended December 31, 2023 and 2022, respectively, the valuation allowance

increased by $ 27,607,085 and decreased by $ 4,555,842 , respectively.

As of December 31, 2023, we had

approximately $ 34,870,734 of consolidated federal net operating loss carryforwards and $ 39,385,617 of apportioned state net operating

loss carryforwards available to offset future taxable income, respectively.

If unused, the federal and state net operating loss carryforwards

will begin to expire in 2032.

Additionally, we had $ 3,579,475 of net operating loss carryforwards from our subsidiaries located in Latin

America, primarily within Chile.

An indefinite carryforward of losses is allowed in Chile.

The net operating loss

carryforward in Peru will begin to expire in 2026.

of net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change

limitations provided by the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions.

We have not performed a

detailed analysis to determine whether an ownership change under Section 382 of the IRC has occurred or will occur.

We will perform

an analysis as soon as is practicable to determine the extent of limitations, especially in regard to our subsidiaries.

possible that additional limitations may arise in future years, even after an analysis is completed, due to future changes in the

ownership of our Company.

The net operating loss carryforward in Peru

will begin to expire in 2026.

of net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations

provided by the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions.

We have not performed a detailed analysis

to determine whether an ownership change under Section 382 of the IRC has occurred or will occur.

We will perform an analysis as soon

as is practicable to determine the extent of limitations, especially in regard to our subsidiaries.

It is possible that additional limitations

may arise in future years, even after an analysis is completed, due to future changes in the ownership of our Company.

file federal and state income tax returns in jurisdictions with varying statutes of limitations.

With few exceptions, we are no longer

subject to federal or state income tax examinations by tax authorities for tax years prior to 2019 and 2018, respectively.

our income tax filing positions and deductions are more likely than not to be sustained on audit.

Therefore, no liabilities for uncertain

tax positions have been recorded.

With few exceptions, we are no

longer subject to federal or state income tax examinations by tax authorities for tax years prior to 2022 and 2021, respectively.

believe our income tax filing positions and deductions are more likely than not to be sustained on audit.

Therefore, no liabilities

for uncertain tax positions have been recorded.

of the date of this filing, we have not filed our 2023 federal and state income tax returns.

1 unchanged sentence

as practicable.

NOTE 16 – DEFINED CONTRIBUTION

On January 1,

2023, we began sponsoring a defined contribution 401(k) plans covering eligible U.S.

employees, who may contribute up to 80 % of

their compensation, subject to limitations established by the Internal Revenue Code.

We match employee contributions on a

discretionary basis.

Expense for our matching contributions was $ 637,365 during 2023.

17 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

4 unchanged sentences

These deposits may generally be redeemed upon demand and bear minimal risk.

single customer represented over 10 % of our total revenue for the year ended December 31, 2022.

client accounted for 20 % of revenue for the year ended December 31, 2021.

single customer represented over 10 % of our total revenue for the years ended December 31, 2023 and 2022.

18 – GEOGRAPHIC INFORMATION

5 unchanged sentences

OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS

other countries

Property and equipment

All other countries

Property and equipment net

other international country represented more than 10% of property and equipment, net in any period presented.

NOTE 18 – ACCUMULATED OTHER COMPREHENSIVE

The following table presents AOCI activity in equity:

OF ACCUMULATED OTHER COMPREHENSIVE LOSS

19 – ACCUMULATED OTHER COMPREHENSIVE LOSS

following table presents AOCI activity in equity:

OF ACCUMULATED OTHER COMPREHENSIVE INCOME

Foreign Currency Translation Adjustments

3 unchanged sentences

Balance as of December 31, 2022

Other comprehensive income

Amounts reclassified from AOCI

Balance as of December 31, 2023

20 – SUBSEQUENT EVENTS

January 10, 2023, we entered into a definitive agreement to acquire RAN Security, a cybersecurity company with headquarters in Buenos

Aires, Argentina and officers in Chile, Peru, Bolivia, and Paraguay.

Under the terms of the agreements, RAN Security will become a wholly

owned subsidiary.

The transaction is expected to close later in the year, subject to satisfaction of customary closing conditions, including

applicable regulatory approvals.

Payable and Convertible Note

Bell Bank Note was originally due and payable on December 14, 2022, which was extended to March 14, 2023 (as so extended, the “Bell

Bank Maturity Date”).

We did not repay the Bell Bank Note on or prior to the Bell Bank Maturity Date, which resulted in an event

of default under the terms thereof.

As a result, the interest rate applicable to amounts due under the Bell Bank Note increased from

4.00 % to 7.50 % per annum.

March 15, 2023, we entered into a Cash Advance Agreement (“Cash Advance Agreement”) with Cedar Advance, LLC, pursuant to

which we received gross proceeds of $ 2,000,000 and paid $ 87,500 in upfront fees.

The terms of the Cash Advance Agreement calls for us

to remit weekly payments of $99,398 until such time as we have repaid $2,870,000.

The estimated effective interest

rate is 155.11%.

The Cash Advance Agreement is secured by the accounts

receivables of Cerberus, TalaTek, and True Digital.

intend to use the proceeds from the Cash Advance Agreement for general corporate purposes, which may include working capital, capital

expenditures, and repayment of debt.

March 20, 2023, we entered into a Purchase Agreement (the “Purchase Agreement”) with Hensley & Company dba Hensley

Beverage Company (the “Purchaser”), a related party, pursuant to which we issued and sold to the Purchaser a $ 5,000,000

10 Percent (10%) Unsecured Convertible Note (the “Note”) for gross proceeds of $ 5,000,000

in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the

“Securities Act”), and Regulation D promulgated thereunder (the “Note Offering”).

The Note, together with

accrued and unpaid interest thereon, is due on March

20, 2025 (the “Maturity Date”).

We may not prepay the Note prior to the Maturity Date without the consent of the

The Note will bear interest at a rate of 10 %

per annum (based on a 360-day year), payable monthly.

At any time prior to or on the Maturity Date and subject to certain beneficial

ownership limitations, the Purchaser may convert all or any portion of the outstanding principal amount of the Note and all accrued

and unpaid interest thereon into shares of our common stock, par value $ 0.00001

per share, at a conversion price of $ 1.20

per share (the “Conversion Price”).

The Conversion Price is adjustable in the event of any stock split, reverse stock

split, recapitalization, reorganization, or similar event.

Upon the occurrence of an “Event of Default” (as defined in

the Note and including the failure to make required payments when due after specified grace periods, certain breaches of the

Purchase Agreement and certain specified insolvency events), the Purchaser would have the right to accelerate payments due under the

Note, which from and after such acceleration would bear interest at a default rate of 24 %

used the proceeds from the Note Offering and our existing cash resources to repay in full the $ 5,000,000

4% promissory note issued and sold to Bell Bank in June 2022, plus $ 35,417

of accrued and unpaid interest.

On March 27, 2023, we entered into a letter agreement with Neil Stinchcombe to resolve a dispute about certain payment terms of a convertible

note previously issued to Mr.

Stinchcombe, with an outstanding principal amount of $ 1,500,000 .

Pursuant to the terms of this agreement,

we agreed to repay the principal amount of the note in three equal installment payments of $ 500,000 , on each of March 31, April 28 and

May 31, 2023, with accrued interest to be paid on May 31, 2023 at the note’s reflected interest rate of 5.0 % per annum.

to timely make any of the foregoing payments, the applicable interest rate will be increased to a default rate of 24 % per annum.

On March 29, 2023, we received

a letter from the listing qualifications staff of Nasdaq providing notification that the bid price for our common stock had closed below

$ 1.00 per share for the previous 30 consecutive business days and our common stock no longer met the minimum bid price requirement for

continued listing under Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have an initial period

of 180 calendar days to regain compliance.

To regain compliance, the closing bid price of our common stock has to be $ 1.00 per share or

more for a minimum of 10 consecutive business days at any time before the expiration of the initial compliance period.

In the event that

we are unable to regain compliance with Rule 5550(a)(2) during the initial compliance period, Nasdaq rules provide that we may be eligible

for an additional 180 calendar day compliance period.

To qualify, we need to meet the continued listing requirement for market value of

publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price

requirement, and to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a

reverse stock split, if necessary.

January 31, 2024, we entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Aion Financial Technologies,

(“Aion”), pursuant to which we may borrow up to $ 3,500,000 .

The amount available for borrowing at any one time is limited

to 80% of our eligible accounts receivable.

The Loan and Security Agreement will bear interest at a rate of 19.25 % per annum (based a

360-day year), payable on the first business day of each month following the accrual thereof.

The Loan and Security Agreement, together

with accrued and unpaid interest thereon, is due on January 30, 2025 (the “Maturity Date”).

Upon providing 30 days written

notice we may terminate the Loan and Security Agreement, subject to an early termination fee of $ 35,000 .

Upon the occurrence of an “Event

of Default” (as defined in the Loan Security Agreement and including the failure to make required payments when due after specified

grace periods, certain breaches and certain specified insolvency events), Aion would have the right to accelerate payments due, which

from after such acceleration would bear interest at a default rate of 29.25 % per annum.

The Loan and Security Agreement is secured by

connection with the Loan and Security Agreement, Aion opened a bank account in our name to be used for general business purposes including

receipt of customer payments, disbursements paying normal business expenses, and receipt of any advances from Aion under this agreement.

will use proceeds from the Loan and Security Agreement to repay our business loan entered into November 2023 and for general corporate

purposes, which may include working capital, capital expenditures, and repayment of debt.

February 29, 2024, our board of directors approved a 1-for-15

reverse stock split of our common stock.

The record date for the reverse stock split was the close of business on March 7,

2024, with share distribution occurring on March 8, 2024.

As a result of the reverse stock split, stockholders received one share of

CISO Global, Inc.

common stock, par value $ 0.00001 ,

for each 15 shares they held as of the record date.

All share and per share amounts have been retroactively restated for the effects

of this reverse stock split.

Common stock underlying our outstanding warrants, convertible notes, and options have also been

adjusted, and the conversion and exercise prices have also been adjusted.

On March 22, 2024, we received notification from the Nasdaq Stock Market that we had sufficiently demonstrated compliance

with the bid price requirement in Nasdaq Listing Rule 5550(a)(2) by maintaining a share price in excess of $ 1.00 per share for 10 consecutive

trading days.

March 28, 2024, we and our US subsidiaries entered into a Business Loan and Security Agreement (the “Loan Agreement” with

LendSpark Corporation (the “Lender”), pursuant to which we obtained a loan with a principal amount of $ 2,200,000 (the

“Loan”) from the Lender.

Pursuant to the Loan Agreement, we paid the Lender a $ 44,000 origination fee.

The Loan bears

interest at a rate of 51.73 % per annum and is payable in 52 weekly installments of $ 53,308 , commencing on April 5, 2024.

may prepay the Loan in whole or in part, but partial repayments do not reduce the total interest payable on the Loan, or $ 572,000 .

the Loan is prepaid in full prior to the 60-day anniversary of the date of the Loan Agreement, the total interest is reduced as follows:

(i) if the Loan is repaid within 30 days, the total amount of interest due will be $242,000, and (ii) if the Loan is repaid within 60

days, the total amount of interest due will be $286,000.

to the Loan Agreement, we granted the Lender a security interest in all if our assets and the assets of our US subsidiaries (the

“Collateral”) that is secondary to the security interest held by Aion.

Upon the occurrence of an event of default, the Lender

may, among other things, accelerate the Loan and declare all obligations immediate due and payable or take possession of the Collateral.

connection with Loan, we entered into a Fee Agreement (the “Fee Agreement”) with the Lender pursuant to which we issued

100,000 shares of our common stock, par value $ 0.00001 per share (the “Shares”) as partial consideration for

the Lender’s agreement to enter into the Loan Agreement and extend credit to us.

Pursuant to the Fee Agreement, if we repay

the Loan in full by (i) May 1, 2024, the Lender will return 75% of the Shares to us, and (ii) June 1, 2024, the Lender will

return 50% of the Shares to us.

The Fee Agreement contains customary representations, warranties, agreements and

obligations of the parties.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures