What changed in this filing

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Item 9A. Controls and Procedures

2026-03-30 compared with 2025-03-31 · 1418 added, 1116 removed, 897 unchanged (74% of the section changed)

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in Internal Control Over Financial Reporting

were no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that materially affected,

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

were no changes in our internal control over financial reporting during the year ended December 31, 2025 that materially affected, or

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

Report on Internal Control over Financial Reporting

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purposes in accordance with United States generally accepted accounting principles.

Based on our assessment under this framework, our management

concluded that our internal control over financial reporting was effective as of December 31, 2024.

Based on our assessment under this framework, our

management concluded that our internal control over financial reporting was effective as of December 31, 2025.

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

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OTHER INFORMATION

During the quarter ended December 31, 2024, no director or officer of our company adopted or terminated a “Rule

10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation

the year ended December 31, 2025, no director or officer of our company adopted or terminated a “Rule 10b5-1 trading arrangement”

or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Financial Officer

Interim Chief Operating Officer

Chief Operating Officer

McCain (1) (2)

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of the Governance and Nominating Committee

December 22, 2025, Kyle J.

Young tendered his resignation from his position as Interim Chief Operating Officer of our company.

resignation became effective on January 2, 2026.

Executive Officers

Jemmett – Chief Executive Officer and Director

Jemmett has served as our

Chief Executive Officer and a director since the company’s formation in March 2019.

He founded GenResults in June 2015, which was

acquired by our company in April 2019.

Prior to this, he served as Chief Executive Officer of NantCloud, LLC in 2014, a provider of secure

cloud-hosted applications for healthcare, and as Chief Technology Officer of NantWorks, LLC, the parent company of the “Nant”

family of companies.

Jemmett has served as our Chief Executive Officer and a director since the company’s formation in March 2019.

He founded GenResults

in June 2015, which was acquired by our company in April 2019.

Prior to this, he served as Chief Executive Officer of NantCloud, LLC

in 2014, a provider of secure cloud-hosted applications for healthcare, and as Chief Technology Officer of NantWorks, LLC, the parent

company of the “Nant” family of companies.

From 2005 to 2013, Mr.

Jemmett was the founder and Chief Executive Officer of ClearDATA Networks Corporation, a leading

HIPAA-compliant hosting company specializing in healthcare.

deep expertise in both technology and business, having led innovation in the cybersecurity and healthcare technology sectors.

a recognized leader, having appeared on CBS, CNN, MSNBC, and CSPAN, and testified before the U.S.

Senate Subcommittee on

Telecommunications and Internet Security in 1998.

Jemmett is also a published author and today sits on the Forbes technology

With extensive leadership experience, a strong technical background, and significant equity ownership, Mr.

well-positioned to lead our company and serve as a director.

Jemmett was the founder and Chief Executive Officer of

ClearDATA Networks Corporation, a leading HIPAA-compliant hosting company specializing in healthcare.

Jemmett has deep expertise in both technology and business, having led innovation in the cybersecurity and healthcare technology sectors.

He is a recognized leader, having appeared on CBS, CNN, MSNBC, and CSPAN, and testified before the U.S.

Senate Subcommittee on Telecommunications

and Internet Security in 1998.

Jemmett is also a published author and today sits on the Forbes technology counsel.

With extensive

leadership experience, a strong technical background, and significant equity ownership, Mr.

Jemmett is well-positioned to lead our company

and serve as a director.

Smith – Chief Financial Officer

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Smith served as Executive Vice President of Finance at Arrivia Inc.

from January 2020 to

February 2021 and Controller and, subsequently, Chief Accounting Officer at BeyondTrust from October 2016 to January 2020.

received a Bachelor of Science degree in Accounting, Summa Cum Laude, from DeVry University and a Master’s degree in

Counseling with Honors from Argosy University.

from January 2020 to February

2021 and Controller, Chief Accounting Officer, and, subsequently, Chief Financial Officer at BeyondTrust from October 2016 to January

Smith received a Bachelor of Science degree in Accounting, Summa Cum Laude, from DeVry University and a Master’s degree

in Counseling with Honors from Argosy University.

Young – Interim Chief Operating Officer

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from the University of Illinois Urbana-Champaign.

McCain – Director

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

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.

He is 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, past Chairman of the Greater Phoenix Chamber of Commerce, past board member of the Arizona Super Bowl

Host Committee, and past board member of the Arizona 2016 College Football Championship Local Organizing Committee.

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.

On December 22, 2025, Kyle J.

Young tendered his resignation from his position as Interim

Chief Operating Officer of our company.

His resignation became effective on January 2, 2026.

Jemmet is also a member of our Board of Directors and information regarding his business experience is described above under the heading

“Directors, Executive Officers, and Corporate Governance – Our Executive Officers”.

Balatsos – Director

Balatsos has served as a director of our company since January 2025.

As Vice President at XP Investments US LLC, he has

significantly expanded the firm’s presence in North America and Europe, achieving a 300% increase in FX revenue.

Balatsos was Director at Barclays Capital, where he managed high-value institutional relationships and led joint ventures that

boosted annual revenues by millions.

He began his career at Credit Suisse, rapidly advancing to Vice President supporting hedge fund

His entrepreneurial ventures include owning Thomas-Mackey Veterinarian Service, SeaPath Advisory LLC, and TwoMacks Properties

LLC, which demonstrate his diverse expertise.

He also served on the Board of Directors for Sadot Group Inc., contributing to the

company’s strategic growth.

Balatsos holds a Bachelor of Science in Business Administration from Skidmore College and has

received leadership recognition in various roles.

We believe Mr.

As Vice President at XP Investments US LLC, he has significantly

expanded the firm’s presence in North America and Europe, achieving a 300% increase in FX revenue.

Previously, Mr.

Director at Barclays Capital, where he managed high-value institutional relationships and led joint ventures that boosted annual revenues

He began his career at Credit Suisse, rapidly advancing to Vice President supporting hedge fund sales.

His entrepreneurial

ventures include owning Thomas-Mackey Veterinarian Service, SeaPath Advisory LLC, and TwoMacks Properties LLC, which demonstrate his

diverse expertise.

He also served on the Board of Directors for Sadot Group Inc., contributing to the company’s strategic growth.

Balatsos holds a Bachelor of Science in Business Administration from Skidmore College and has received leadership recognition in

various roles.

Balatsos is qualified for service as a director of our company due to his significant experience with financial markets and

his executive and board experience at other companies.

Hancox – Director

Hancox has served as a director since January 2025.

As the Founder and Managing Member of Block 8 Ventures, he has successfully invested

in over 25 blockchain projects and provided strategic consulting to high-growth companies.

Previously, he co-founded Katapult (NASDAQ:

KPLTW) and served as COO, raising over $250M in capital and expanding the team to 100+ members.

Andrew’s experience includes a

role as an analyst at Permian Investment Partners, where he evaluated and recommended equity investments, and as the Co-Founder and CEO

of Anderson Audio Visual, growing the company to $40M in sales.

His educational background includes studies in Law and Mathematics from

Victoria University (New Zealand) and a Private Equity and Investment Banking Program from the Institute of Banking and Finance (New

Hancox is also a lead mentor at Entrepreneurs Roundtable Accelerator and Parallel 18, an accomplished skier, marathon runner,

and avid traveler, having visited 107 countries.

Originally from New Zealand, he currently splits his time between New York, NY and San

Hancox is qualified for service as a director of our company due to his significant experience in investment analysis and

leadership positions with other companies.

(Michael) Khorassani – Director

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over his thirty years of Wall Street experience and brings with him a wealth of knowledge and a deep bench of personal relationships.

We believe Mr.

Khorassani is qualified

for service as a director of our company due to his significant experience in financial markets and leadership experience with publicly traded companies.

Hancox – Director

Hancox has served as a director since January 2025.

As the Founder and Managing Member of Block 8 Ventures, he has successfully

invested in over 25 blockchain projects and provided strategic consulting to high-growth companies.

Previously, he co-founded

Katapult (NASDAQ:

KPLTW) and served as COO, raising over $250M in capital and expanding the team to 100+ members.

experience includes a role as an analyst at Permian Investment Partners, where he evaluated and recommended equity investments, and

as the Co-Founder and CEO of Anderson Audio Visual, growing the company to $40M in sales.

His educational background includes

studies in Law and Mathematics from Victoria University (New Zealand) and a Private Equity and Investment Banking Program from the

Institute of Banking and Finance (New York).

Hancox is also a lead mentor at Entrepreneurs Roundtable Accelerator and Parallel

18, an accomplished skier, marathon runner, and avid traveler, having visited 107 countries.

Originally from New Zealand, he

currently splits his time between New York, NY and San Juan, PR.

We believe Mr.

Hancox is qualified

for service as a director of our company due to his significant experience in investment analysis and leadership positions with other companies.

Pursuant to that certain Securities Purchase Agreement, dated December 10, 2024, by and among the company and certain

investors (as defined therein), Messrs.

Khorassani is qualified for service as a director of our company due to his significant experience in financial markets and

leadership experience with publicly traded companies.

McCain – Director

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

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 Chairman of Hensley Employee Foundation, a board member of the Barrow Neurological Foundation, the Episcopal School of Jacksonville,

and the Phoenix local organizing committee for the Women’s Final Four.

He is past Chairman of the Board of the Fiesta Bowl, past

Chairman of the Anheuser-Busch National Wholesaler Advisory Panel, past Chairman of the Greater Phoenix Chamber of Commerce, past board

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

Committee, and a past board member of the 2024 Men’s Final Four local organizing committee.

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.

to that certain Securities Purchase Agreement, dated December 10, 2024, by and among the company and certain investors (as defined therein),

Baltsos, Khorassani, and Hancox were appointed to the Board of Directors.

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Our Board of Directors has concluded that each of Messrs.

McCain, Balatsos, Khorassani and Hancox are “independent”, having concluded that any relationship between such director and our company, in its opinion,

does not interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Balatsos, Hancox, Khorassani and

McCain are “independent”, having concluded that any relationship between such director and our company, in its opinion, does

not interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Jemmett is an employee

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Audit Committee of our Board of Directors was established in accordance with Rule 10A-3 promulgated under the Exchange Act.

current members of our Audit Committee are Messrs.

McCain, Hancox, and Balatsos with Mr.

McCain serving as the chair.

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.

members of our Audit Committee are Messrs.

Balatsos, Hancox, and Khorassani, with Mr.

Khorassani serving as the chair.

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

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

McCain, Hancox, and Balatsos is considered an

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

Former directors

Balatsos, Hancox, and Khorassani is financially literate

and considered an “audit committee financial expert” as defined in the rules of the SEC.

directors Reid S.

Holbrook and Ernest M.

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in January 2025.

McCain served as chair of the Audit Committee during fiscal 2025.

Audit Committee was formed in 2021.

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

Additionally,

the Audit Committee reviews related party transactions, manages complaints regarding accounting matters, and reports its findings and

recommendations to the Board of Directors.

have a standing Compensation Committee of our Board of Directors.

The members of our Compensation Committee are Messrs.

Hancox, and McCain, with Mr.

Khorassani serving as the chair.

Each member of the Compensation Committee meets the independence and

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

Former directors

Hancox, and Khorassani, with Mr.

Hancox serving as the chair.

Each member of the Compensation Committee meets the

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

directors Reid S.

Holbrook and Ernest M.

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resignation in January 2025.

During fiscal 2025, Mr.

McCain served on the Compensation Committee and Mr.

Khorassani served as chair of the Compensation Committee.

Compensation Committee was formed in 2021.

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Committee are Messrs.

Balatsos, Khorassani and Hancox, with Mr.

Hancox serving as the chair.

Balatsos, Hancox, and Khorassani, with Mr.

Khorassani serving as the chair.

Each of Messrs.

Balatsos, Khorassani and Hancox

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.

Former directors

Balatsos, Hancox

and Khorassani 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.

directors Reid S.

Holbrook, Ret.

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Committee during fiscal year 2024 until their resignation in January 2025.

Hancox served as chair of the Governance and Nominating Committee during fiscal 2025.

Governance and Nominating Committee was formed in 2021.

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promote ethical behavior and that applies to all our directors, officers and employees.

The Code of Ethics is publicly available on our

website at www.ciso.inc.

Amendments to the Code of Ethics and any grant of a waiver from a provision of the Code of Ethics requiring

disclosure under applicable SEC rules will be disclosed on our website.

The Code of Ethics is publicly available in the

Investor Resources and Corporate Governance section of our website at https://www.ciso.inc/investor-relations/code-of-ethics-and-business-conduct.

Amendments to the Code of Ethics and any grant of a waiver from a provision of the Code of Ethics requiring disclosure under applicable

SEC rules will be disclosed on our website.

Section 16(a) Reports

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

solely on our review of such reports and certain representations from each reporting person, we believe that during 2024, all Section

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

solely on our review of such reports and certain representations from each reporting person, we believe that during 2025, the following

Section 16(a) filing requirements were not satisfied on a timely basis:

Form 3 filed by Mohsen Khorassani on December 30, 2025, Form

3 filed by Andrew K McCain on December 30, 2025, Form 4 filed by Andrew K McCain on December 30, 2025, Form 4 filed by David Grant Jemmet

on December 30, 2025, and Form 4/A filed Debra Lou Smith on December 30, 2025.

Trading Policy Disclosure

adopted an Insider Trading Policy governing the purchase, sale, and/or other disposition of our securities by our directors, officers,

have adopted an Insider Trading Policy governing the purchase, sale, and/or other disposition of our securities by our directors, officers,

and employees.

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EXECUTIVE COMPENSATION

Fiscal 2024 Summary Compensation Table

2025 Summary Compensation Table

following table shows the total compensation paid or accrued during the years ended December 31, 2025 and 2024 to our Chief Executive

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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)

and Principal Position

Incentive Plan Compensation

Non-qualified

Deferred Compensation Earnings

Other Compensation

Executive Officer

Financial Officer

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

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

On December 22, 2025, Kyle J.

Young tendered

his resignation from his position as Interim Chief Operating Officer of our company.

His resignation became effective on January

Equity Awards as of December 31, 2025

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Expiration Date

14, 2022 (1)(3)

Outstanding (#)

Restricted stock units

June 13, 2025

June 13, 2029

Stock options

February 1, 2021

Stock options

December 31, 2021

Stock options

January 14, 2022

Stock options

June 13, 2025

Restricted stock units

June 13, 2025

June 13, 2029

Stock options

February 1, 2021

Stock options

December 31, 2021

Stock options

January 14, 2022

Stock options

June 13, 2025

Restricted stock units

June 13, 2025

June 13, 2029

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

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

Policies and Practices

Related to the Grant of Certain Equity Awards

We do not have any formal policies or practices regarding the timing of awards of options in relation to the disclosure

of material nonpublic information.

Our Board of Directors and Compensation Committee do not take material nonpublic information into account

when determining the timing and terms of such awards, and we do not time the disclosure of material nonpublic information for the purpose

of affecting the value of executive compensation.

The timing of any awards of options to executive officers in connection with new hires,

promotions, or other non-routine grants is generally tied to the event giving rise to the award, such as an executive officer’s

commencement of employment or promotion effective date.

As a result, the timing of the award of options occurs independent of the release

of any material nonpublic information.

However, we have not made any grants of stock options since 2022.

June 13, 2025, we granted an aggregate of 1,550,000 RSUs to the executive officers listed above, with a weighted-average grant date

fair value of $0.96 per unit.

December 22, 2025, Kyle J.

Young voluntarily tendered his resignation from his position as Interim Chief Operating Officer of the

Company, effective January 2, 2026.

As of the effective date of his resignation, Mr.

Young’s outstanding equity awards granted

in 2021 and 2022 were fully vested and remain exercisable through their respective expiration dates.

The equity award granted to

Young in 2025 did not vest and was forfeited upon his resignation.

and Practices Related to the Grant of Certain Equity Awards

do not have any formal policies or practices regarding the timing of awards of options in relation to the disclosure of material nonpublic

Our Board of Directors and Compensation Committee do not take material nonpublic information into account when determining

the timing and terms of such awards, and we do not time the disclosure of material nonpublic information for the purpose of affecting

the value of executive compensation.

The timing of any awards of options to executive officers in connection with new hires, promotions,

or other non-routine grants is generally tied to the event giving rise to the award, such as an executive officer’s commencement

of employment or promotion effective date.

As a result, the timing of the award of options occurs independent of the release of any material

nonpublic information.

During the last fiscal year, we have not awarded options to a named executive officer in the period beginning

four business days before the filing of a periodic report on Form 10-Q or annual report on Form 10-K, or the filing or furnishing of

a current report on Form 8-K that discloses material nonpublic information, and ending one business day after the filing or furnishing

of such report.

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

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monthly over the next 12 months.

As of December 31, 2024, our Board of Directors had not approved or granted any stock options to Mr.

On December 31, 2023, a bonus of $187,500 was accrued for Mr.

Jemmett but has not yet been paid.

As of December 31, 2024, $34,142

of base salary was accrued and unpaid to Mr.

As of December 31, 2025, the Board of Directors approved and granted 750,000 restricted stock units

On December 31, 2024, $34,142 of base salary was accrued and unpaid to Mr.

As of December 31, 2025, there was

no accrued or unpaid base salary.

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

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

On December 31, 2023, a bonus of $114,375 was accrued

Smith but has not yet been paid.

As of December 31, 2024, $53,285 of base salary was accrued and unpaid to Ms.

is also eligible to participate in our standard benefit plans.

As of December 31, 2025, the Board of Directors approved

and granted 500,000 stock options and 400,000 restricted stock units to Ms.

On December 31, 2024, $53,285 of base salary was accrued

and unpaid to Ms.

As of December 31, 2025, there was no accrued or unpaid base salary.

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.

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.

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

Pursuant to the Young Employment

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

On December 31, 2023, a bonus of $142,500

was accrued for Mr.

Young but has not yet been paid.

As of December 31, 2024, $53,285 of base salary was accrued and unpaid to Mr.

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

As of December 31, 2025, the Board of Directors

approved and granted 500,000 stock options and 400,000 restricted stock units to Mr.

On December 31, 2024, $53,285 of base salary

was accrued and unpaid to Mr.

As of December 31, 2025, there was no accrued or unpaid base salary.

Young is also eligible

to participate in our standard benefit plans.

On December 22, 2025, Kyle J.

Young tendered his resignation from his position as Interim

Chief Operating Officer of our company.

His resignation became effective on January 2, 2026.

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.

(Kiki) VanDeWeghe, III

Awards ($) (2) (3)

Incentive Plan Compensation ($)

Deferred Compensation Earnings

Other Compensation ($)

Phillip Balatsos

Andrew Hancox

Mohsen Khorassani

compensation of our Chief Executive Officer, David G.

Jemmett, has been omitted from this table because he received no special compensation

for serving on our Board of Directors.

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

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Ownership of Certain Beneficial Holders

Name and Address of

Beneficial Owner (1)

Amount and Nature of

Beneficial Ownership

and Address of

and Nature of

Hensley & Company

6,528,666 (2)

Jemmett Enterprises, LLC

4,429,000 (3)

J C Associates, Inc

3,238,712 (4)

Ownership of Directors and Executive Officers

Name and Address of

Beneficial Owner (1)

Amount and Nature of

Beneficial Ownership

and Address of

and Nature of

4,629,001 (5)

Phillip Balatsos

Mohsen (Michael) Khorassani

Andrew Hancox

Directors & Executive Officers as a Group (7 persons)

Mohsen (Michael) Khorassani

6,567,000 (7)

Directors & Executive

Officers as a Group (7 persons)

11,329,995 (8)

than 1% of the outstanding shares of common stock.

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Camelback Road, Suite 900, Scottsdale, Arizona 85251.

information is based on Schedule 13D filed with the SEC on December 31, 2025.

Hensley & Co.

reported sole voting and dispositive

power with respect to 6,528,666 shares of common stock.

Hensley & Co.’s principal address is 4201 N.

45th Street, Phoenix,

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.

information is based on Schedule 13G, Amendment No.1, filed with the SEC on December 29, 2025.

J C Associates, Inc.

reported aggregate

beneficial ownership of 3,238,712 shares of common stock, with sole voting and dispositive power with respect to 3,192,044 shares,

and shared voting and dispositive power with respect to 3,238,712 shares of common stock.

J C Associates, Inc.’s principal

address is 8111 Preston Road, Ste 420 Dallas, TX 75225.

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

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McCain has voting and dispositive power;

26,666 shares issuable upon the exercise of options exercisable within 60 days after March 24, 2025;

and (iv) 333,333 shares issuable

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

160,576 shares issuable upon the exercise of stock options and 333,333 shares issuable upon conversion of a note payable.

(iii) 13,333 shares issuable upon the exercise of options exercisable within 60 days after March 20, 2026.

Director Andrew K.

is President of Hensley & Co.

but disclaims beneficial ownership of the shares owned by Hensley & Co.

147,327 shares issuable upon the exercise of stock options.

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, 2025:

Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options

Weighted-Average Exercise Price of Outstanding Options

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

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

of Securities to be Issued Upon Exercise of Outstanding Options

Weighted-Average

Exercise Price of Outstanding Options

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

Equity compensation plans approved

by security holders

Equity compensation plans not approved by security

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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

Scott, as amended in June 2024, 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 mergers and acquisitions 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 agreement.

During the years ended December 31, 2024 and 2023, we paid

consulting fees to Mr.

Scott in the amounts of $180,000 and $159,000, respectively.

Scott, as amended in June 2024, 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 mergers and acquisitions 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 agreement.

During the year ended December 31, 2024, we paid consulting fees to Mr.

in the amounts of $180,000.

After the first quarter of 2025, Mr.

Scott was no longer considered a related party of our company.

Services Agreement with Hensley Beverage Company

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, 2024 and 2023, we received $2,283,995

and $1,417,398, respectively from Hensley Beverage Company for contracted services and had an outstanding receivable balance of zero

and $152,213 as of December 31, 2024 and 2023, respectively.

The payments received during the year ended December 31, 2024, included

a payments for future services, of which $191,633 remains outstanding.

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 provided for an original term through December 31, 2021, the agreement will continue until terminated

by either party.

For years ended December 31, 2025 and 2024, we received $1,019,567 and $2,283,995, respectively, from Hensley Beverage

Company for contracted services, and had an outstanding receivable balance of $125,215 and $0 as of December 31, 2025 and 2024, respectively.

Andy McCain, a director of our company, is President and Chief Executive Officer of Hensley & Company, the parent company of Hensley

Beverage Company.

Note Payable with Hensley Beverage Company

2 unchanged sentences

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

At any time prior

to or on the maturity date, Hensley & Company was 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.

During the year ended

December 31, 2024 and 2023, we recorded interest expense of $500,000 and $388,888, respectively, and as of December 31, 2024 and 2023,

we had accrued interest of $888,888 and $388,888, respectively.

Andy McCain, a director of our company, is President and Chief Executive

Officer of Hensley & Company.

On March 25, 2025,

we entered into Amendment #1 to this convertible note, which extended the maturity date of the convertible note to March 20, 2026.

any time prior to or on the maturity date, Hensley & Company was 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.

the years ended December 31, 2025 and 2024, we recorded interest expense of $291,666 and $500,000, respectively, and as of December 31,

2025 and 2024, we had accrued interest of $0 and $888,888, respectively.

On August 5, 2025, the principal amount of $5,000,000 together

with $1,180,554 of accrued and unpaid interest payable under the convertible note were converted into Series A Preferred Stock and the

convertible note was fully extinguished.

On November 6, 2025, we converted all outstanding shares of Series A Preferred Stock held

by Hensley & Company, together with $148,111 in accrued and unpaid dividends to 6,328,665 shares of common stock.

Refer to Note 10,

“Stockholders’ Equity and Temporary Equity,” and Note 13, “Debt,” for further discussion.

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

7 unchanged sentences

Audit-related fees (2)

All other fees (4)

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

4 unchanged sentences

fees consisted primarily of tax related advisory and preparation services.

for permitted services other than the services reported in audit fees, audit-related fees, and tax fees.

Committee Pre-Approval Policies

15 unchanged sentences

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

Agreement and Plan of Merger by and among the Registrant, TalaTek, LLC, TalaTek Merger Sub and Baan Alsinawi dated September 23, 2019

Stock Purchase Agreement by and among the Registrant, Technologyville, Inc.

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

and Plan of Merger by and among the Registrant, TalaTek, LLC, TalaTek Merger Sub and Baan Alsinawi dated September 23, 2019

Purchase Agreement by and among the Registrant, Technologyville, Inc.

and Brian Yelm dated May 25, 2020

Share Purchase Agreement among the Registrant, Clear Skies Security, LLC and all of its Members dated July 31, 2020

Agreement and Plan of Merger by and among the Registrant, Alpine Merger Sub, LLC, Alpine Security, LLC and Christian Espinosa dated December 16, 2020

Amended and Restated Agreement and Plan of Merger by and among the Registrant, Catapult Acquisition Merger Sub, LLC, Catapult Acquisition Corporation, the shareholders of Catapult Acquisition Corporation and Darek Hahn dated July 26, 2021

Stock Purchase Agreement by and among the Registrant, Atlantic Technology Systems, Inc., Atlantic Technology Enterprises, Inc., and James Montagne and Miriam Montagne as sole shareholders, dated October 1, 2021

Agreement and Plan of Merger by and among the Registrant, RED74 Merger Sub, LLC, RED74 LLC, Ticato Holdings, Inc.

Purchase Agreement among the Registrant, Clear Skies Security, LLC and all of its Members dated July 31, 2020

and Plan of Merger by and among the Registrant, Alpine Merger Sub, LLC, Alpine Security, LLC and Christian Espinosa dated December

and Restated Agreement and Plan of Merger by and among the Registrant, Catapult Acquisition Merger Sub, LLC, Catapult Acquisition

Corporation, the shareholders of Catapult Acquisition Corporation and Darek Hahn dated July 26, 2021

Purchase Agreement by and among the Registrant, Atlantic Technology Systems, Inc., Atlantic Technology Enterprises, Inc., and James

Montagne and Miriam Montagne as sole shareholders, dated October 1, 2021

and Plan of Merger by and among the Registrant, RED74 Merger Sub, LLC, RED74 LLC, Ticato Holdings, Inc.

and Tim Coleman dated October

Stock Purchase Agreement by and among the Registrant, Southford Equities, Inc., a British Virgin Islands based company and David Esteban Alfaro Medina, Roberto Andrés Arriagada Poblete and Camilo Orlando Garrido Briones dated December 1, 2021

Stock Purchase Agreement among the Registrant and certain shareholders of True Digital Security Inc.

Purchase Agreement by and among the Registrant, Southford Equities, Inc., a British Virgin Islands based company and David Esteban

Alfaro Medina, Roberto Andrés Arriagada Poblete and Camilo Orlando Garrido Briones dated December 1, 2021

Purchase Agreement among the Registrant and certain shareholders of True Digital Security Inc.

dated January 5, 2022

Agreement and Plan of Merger among the Registrant and certain shareholders of True Digital Security Inc.

and Plan of Merger among the Registrant and certain shareholders of True Digital Security Inc.

dated January 5, 2022

Stock Purchase Agreement by and among the Registrant and Southford Equities, Inc., David Esteban Alfaro Medina, Roberto Andrés Arriagada Poblete, Camilo Orlando Garrido Briones, dated July 1, 2024

Stock Purchase Agreement by and among the Registrant and CT Group, LP, Alejandro Torchio, Datadeck, LP, Diego Cabai, Woodface, LP, Rodrigo Astorga.

Purchase Agreement by and among the Registrant and Southford Equities, Inc., David Esteban Alfaro Medina, Roberto Andrés Arriagada

Poblete, Camilo Orlando Garrido Briones, dated July 1, 2024

Purchase Agreement by and among the Registrant and CT Group, LP, Alejandro Torchio, Datadeck, LP, Diego Cabai, Woodface, LP, Rodrigo

VMT Technologies, LP, José Williams Torres Valenzuela, Quijote Ventures, LP, Lucio Quijano, dated July 1, 2024.

Stock Purchase Agreement by and among the Registrant and Itada Equities, Inc., Lilian Andre Espinosa Villarroel, Lorenzo Espinoza Labra, dated July 1, 2024

Second Amended and Restated Certificate of Incorporation of the Registrant

Certificate 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

Description of Securities Registered under Section 12 of the Exchange Act

Form of Underwriter Warrant

Form of Placement Agent Warrant

Purchase Agreement by and among the Registrant and Itada Equities, Inc., Lilian Andre Espinosa Villarroel, Lorenzo Espinoza Labra,

dated July 1, 2024

Amended and Restated Certificate of Incorporation of the Registrant

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

of Amendment of Amended and Restated Certificate of Incorporation

of Designations, Preferences and Rights of Series A Preferred Stock of the Registrant

of Designations, Preferences and Rights of Series B Preferred Stock of the Registrant

Amended and Restated By-laws of the Registrant

of Common Stock Certificate of the Registrant

of Securities Registered under Section 12 of the Exchange Act

of Underwriter Warrant

of Placement Agent Warrant

Equity Incentive Plan, as amended

Form of Stock Option Agreement

Employment Agreement between the Registrant and David G.

of Stock Option Agreement

Agreement between the Registrant and David G.

Jemmett dated September 30, 2019

Employment Agreement by and between Debra L.

Agreement by and between Debra L.

Smith and the Registrant dated December 31, 2020

Employment Agreement by and between Kyle J.

Agreement by and between Kyle J.

Young and the Registrant dated March 30, 2023

Form of Lockup Agreement

Purchase Agreement, dated March 20, 2023, by and between the Registrant and Hensley & Company dba Hensley Beverage Company

Amendment Number One to Purchase Agreement and the Note dated March 20, 2023, by and between the Registrant and Hensley & Company dba Hensley Beverage Company

of Lockup Agreement

Agreement, dated March 20, 2023, by and between the Registrant and Hensley & Company dba Hensley Beverage Company

Number One to Purchase Agreement and the Note dated March 20, 2023, by and between the Registrant and Hensley & Company dba Hensley

Beverage Company

Unsecured Convertible Note by the Registrant payable to Hensley & Company, dated March 20, 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

Form of Intellectual Property Buy-Back Purchase Agreement

Form of Promissory Note

Form of Convertible Note by the Registrant and payable to Target Capital 14, LLC.

Form of Convertible Note by the Registrant and payable to Secure Net Capital, LLC.

Form of Common Stock Purchase Warrant by the Registrant and Target Capital 14, LLC.

Form of Common Stock Purchase Warrant by the Registrant and Secure Net Capital, LLC.

Form of Registration Rights Agreement dated December 10, 2024, by and between the Registrant and Purchasers thereto

Placement Agency Agreement dated December 10, 2024, by and between the Registrant and each Purchaser thereto

Securities Purchase Agreement dated December 10, 2024, between Registrant and the Purchasers thereto

CISO Global, Inc.

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

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

of Intellectual Property Buy-Back Purchase Agreement

of Promissory Note

of Convertible Note by the Registrant and payable to Target Capital 14, LLC.

of Common Stock Purchase Warrant by the Registrant and Target Capital 14, LLC.

of Registration Rights Agreement dated December 10, 2024, by and between the Registrant and Purchasers thereto

Agency Agreement dated December 10, 2024, by and between the Registrant and each Purchaser thereto

Purchase Agreement dated December 10, 2024, between Registrant and the Purchasers thereto

Agreement, dated August 4, 2025, by and between the Registrant and Hensley & Company, d/b/a Hensley Beverage Company

Agreement, dated August 4, 2025, by and between the Registrant and J C Associates, Inc.

Equity Purchase Agreement, dated September 24, 2025, by and between the Registrant and B.

Riley Principal Capital I

Equity Incentive Plan, as amended

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

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

of Intellectual Property Buy-Back Purchase Agreement

of Promissory Note

of Convertible Note by the Registrant and payable to Target Capital 14, LLC.

of Convertible Note by the Registrant and payable to Secure Net Capital, LLC.

of Common Stock Purchase Warrant by the Registrant and Target Capital 14, LLC.

of Common Stock Purchase Warrant by the Registrant and Secure Net Capital, LLC.

of Registration Rights Agreement dated December 10, 2024, by and between the Registrant and Purchasers thereto

Agency Agreement dated December 10, 2024, by and between the Registrant and each Purchaser thereto

Purchase Agreement dated December 10, 2024, between Registrant and the Purchasers thereto

Insider Trading Policy

Subsidiaries of the Registrant

Consent of Semple, Marchal & Cooper LLP

of the Registrant

Consent of Semple, Marchal & Cooper LLP

Consent of Baker Tilly Chile Ltda.

Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer

Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer

Section 1350 Certification of Principal Executive Officer

Section 1350 Certification of Principal Financial Officer

CISO Global, Inc.

of Baker Tilly Chile Ltda.

13a-14(a) / 15d-14(a) Certification of Principal Executive Officer

13a-14(a) / 15d-14(a) Certification of Principal Financial Officer

1350 Certification of Principal Executive Officer

1350 Certification of Principal Financial Officer

Executive Officer Incentive Compensation Recovery Policy

6 unchanged sentences

Page Interactive Data File (Embedded within the Inline XBRL document)

*Filed/furnished

exhibits, annexes, and/or schedules have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.

15 unchanged sentences

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2025 AND 2024

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID # 3172)

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

FINANCIAL STATEMENTS:

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations and Comprehensive Loss For the Years Ended December 31, 2024 and 2023

Consolidated Statements of Changes in Stockholders’ Equity For the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows For the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023

Balance Sheets as of December 31, 2025 and 2024

Statements of Operations and Comprehensive Loss For the Years Ended December 31, 2025 and 2024

Statements of Changes in Stockholders’ Equity and Temporary Equity For the Years Ended December 31, 2025 and 2024

Statements of Cash Flows For the Years Ended December 31, 2025 and 2024

to Consolidated Financial Statements For the Years Ended December 31, 2025 and 2024

of Independent Registered Public Accounting Firm

2 unchanged sentences

on the Consolidated Financial Statements

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

(the “Company”) as of December 31, 2024 and

2023, 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”).

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

(the “Company”) as of December 31, 2025

and 2024, 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

2 unchanged sentences

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

include the consolidated balance sheet of Arkavia Networks SpA.

and its wholly-owned subsidiaries Arkavia Networks Limitada and Arkavia

Networks, as of December 31, 2023, and the related consolidated statements of operations, stockholders’ equity, and cash flows

for the 6 months and the year ended July 1, 2024 (the date of disposition) and December 31, 2023, respectively;

the combined balance

sheet 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 the related combined statements of operations, stockholder’s equity,

and cash flows for the 6 months and year ended July 1, 2024 (the date of disposition) and December 31, 2023, respectively;

and the combined

balance sheet 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 the related combined statements of operations, stockholders’

equity, and cash flows for the 6 months and year ended July 1, 2024 (the date of disposition) and December 31, 2023, respectively;

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

The combined financial statements of the South American

Subsidiaries reflect total assets of $21.9 million at December 31, 2023, and total revenues of $8.4 million and $23.1 million for the

6 months ended July 1, 2024 (the date of disposition) and the year ended December 31, 2023, respectively.

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.

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

include the consolidated statements of operations, stockholders’ equity, and cash flows of Arkavia Networks SpA.

and its wholly-owned

subsidiaries Arkavia Networks Limitada and Arkavia Networks, for the 6 months ended July 1, 2024 (the date of disposition);

statements of operations, stockholders’ equity, and cash flows 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) for the 6 months ended July 1, 2024 (the

date of disposition);

and the combined statements of operations, stockholders’ equity, and cash flows 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)

for the 6 months ended July 1, 2024 (the date of disposition);

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

The combined financial statements of the South American Subsidiaries reflect total revenues of $8.4 million for the 6 months ended July

1, 2024 (the date of disposition).

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

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, negative cash flows from

3 unchanged sentences

might result from the outcome of this uncertainty.

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

Our responsibility is to express an opinion

on the Company’s consolidated 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

in accordance with the 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.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated 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 in accordance with the U.S.

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

Commission and the PCAOB.

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

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

4 unchanged sentences

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

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

4 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Semple, Marchal &

/s/ Semple, Marchal & Cooper, LLP

Public Accountants

have served as the Company’s auditor since 2019.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

AND SUBSIDIARIES

BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

Current Assets:

Cash and cash equivalents

Cash and cash

Accounts receivable, net

of allowance for credit losses of $ 60,551 and $ 124,434 at December 31, 2025 and 2024, respectively

Prepaid cost of revenue

Prepaid expenses and other current assets

Contract asset

Assets of business held for sale

Prepaid expenses and other

current assets

Total Current Assets

Property and equipment, net

Right of use asset, net

Property and equipment,

Operating lease right-of-use

Intangible assets, net

Prepaid cost of revenue, net of current portion

LIABILITIES AND STOCKHOLDERS’ EQUITY

Prepaid cost of revenue,

net of current portion

LIABILITIES AND STOCKHOLDERS’

Current Liabilities:

Accounts payable and accrued expenses

Accounts payable

Accrued expenses and other

current liabilities

Deferred revenue

Lease liability

Lease liabilities

Loans payable

2 unchanged sentences

Convertible notes payable

Convertible notes payable, related party

Convertible notes payable

Liabilities of business held for sale

notes payable, related party

notes payable

Total Current Liabilities

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

Total Liabilities

Deferred revenue, net of

current portion

Loans payable, net of current

liabilities, net of current portion

Commitments and Contingencies

Series B Preferred Stock;

shares issued at December 31, 2025

and 2024, respectively;

shares outstanding at December

31, 2025 and 2024, respectively

Stockholders’ Equity:

Common stock, $ .00001 par value;

Common Stock, $ .00001 par

300,000,000 shares authorized;

11,821,866 and 11,949,959 issued and outstanding at December 31, 2024 and December 31, 2023, respectively

Preferred stock, $ .00001 par value;

45,173,774 and 12,324,003 shares issued at December 31, 2025 and 2024, respectively;

and 11,821,866 outstanding at December 31, 2025 and 2024, respectively

Preferred Stock, $ .00001

50,000,000 shares authorized:

0 shares issued and outstanding on December 31, 2024 and December 31, 2023, respectively

Series A Preferred Stock, 0

shares issued and outstanding at December 31, 2025 and 2024, respectively

Additional paid-in capital

Treasury stock, at cost ( 502,137 and zero shares)

Accumulated translation adjustment

Accumulated deficit

Treasury stock, at cost

( 502,137 shares)

Accumulated other comprehensive loss

( 190,341,517 )

( 182,262,606 )

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

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

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

December 31, 2024

December 31, 2023

Security managed services

Stockholders’ Equity

Liabilities and Stockholders’ Equity

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Security managed

Professional services

Cybersecurity software

Total revenue

Cybersecurity

Cost of revenue:

3 unchanged sentences

Cost of payroll

Stock based compensation

Total cost of revenue

Total gross profit

cost of revenue

Operating expenses:

2 unchanged sentences

Selling, general and administrative

Stock based compensation

Impairment of goodwill

Total operating expenses

2 unchanged sentences

( 14,589,635 )

Other income (expense):

Other income (expense)

Gain on extinguishment of convertible notes,

Loss on issuance of convertible notes

4 unchanged sentences

( 3,584,172 )

Other income (expense)

Total other income (expense)

( 5,315,966 )

( 2,020,653 )

Loss from continuing operations before income taxes

Loss from continuing operations before income

( 8,073,930 )

4 unchanged sentences

( 19,905,601 )

Loss from discontinued operations, net of income taxes (1)

( 4,338,318 )

Loss from discontinued

operations, net of income taxes (1)

( 4,338,318 )

1 unchanged sentence

$ ( 24,243,919 )

Foreign currency translation adjustment

Basic net loss per common share:

Continuing operations

Net loss per share

Diluted net loss per common share:

Continuing operations

Net loss per share

Weighted-average shares used in computing net

loss per share:

Other comprehensive loss:

currency translation adjustments

Other comprehensive loss

Comprehensive loss

1 unchanged sentence

$ ( 24,248,698 )

Net loss per common share - basic and diluted:

Continuing operations

Discontinued operations

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

Includes recognized loss on disposal of $ 3,189,232 .

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

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (NOTE 3)

Preferred Stock

(1) Includes recognized loss on disposal

of $ 3,189,232 .

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

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY

Comprehensive

2 unchanged sentences

$ 183,707,063

Stock based compensation - stock options

Stock based compensation - common stock

Stock issued for cash

Stock issued as lending discount

Stock adjustment after reverse stock split

Relative fair value of warrants issued with convertible notes

Warrants issued to convertible notes placement agent

Repurchase of treasury stock related to disposition of assets

Foreign currency translation

Reclassification of foreign currency translation to net loss

$ ( 182,262,606 )

Stock-based compensation - stock options

Issuance of common stock for services

Issuance of common stock

Issuance of Series B Preferred Stock, net of

offering costs

Conversion of convertible notes into common

Conversion of convertible notes into Series

A Preferred Stock

Conversion of Series A Preferred Stock to common

( 9,297,894 )

Conversion of Series B Preferred Stock to common

Accretion of Series B Preferred Stock to redemption

Issuance of warrants

Exercise of warrants

Exercise of stock options

Other comprehensive income

( 8,073,930 )

4 unchanged sentences

$ ( 190,341,517 )

Comprehensive

Balance at January 1, 2024

4 unchanged sentences

Stock based compensation - stock options

Stock based compensation - common stock

Stock issued for cash

Exercise of options

Stock issued for SB Cyber acquisition

Issuance of common stock for services

Issuance of common stock

Stock issued as lending discount

Foreign currency translation

Stock adjustment after reverse stock split

Relative fair value of warrants issued with

convertible notes

Warrants issued to convertible notes placement

Repurchase of treasury stock related to disposition

Other comprehensive loss

Other comprehensive income (loss )

Reclassification of foreign currency translation

( 1,320,177 )

( 24,243,919 )

Balance at December

3 unchanged sentences

$ ( 290,737 )

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

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

December 31, 2024

December 31, 2023

Cash flows from operating activities:

$ 183,707,063

$ ( 182,262,606 )

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

Stock based compensation - stock options

Stock based compensation - common stock

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flows from operating

$ ( 8,073,930 )

$ ( 24,243,919 )

Adjustments to reconcile net loss to net cash

used in operating activities:

Stock-based compensation

- stock options

Stock-based compensation

- stock issued for services

Non-cash interest expense

Depreciation and amortization

Right of use amortization

Impairment of intangible assets

Impairment of goodwill

Loss on disposal

Change in fair value of derivative liability

Loss on issuance of convertible notes

Non-cash operating lease

Bad debt expense

Loss on assets held for

Change in fair value of

derivative liability

( 5,467,610 )

Gain on extinguishment

of convertible notes, net

( 4,432,434 )

Loss on issuance of convertible

Changes in operating assets and liabilities:

1 unchanged sentence

Contract assets

Prepaids and other current assets

Accounts payable and accrued expenses

Lease liability

Deferred revenue

Net cash used in operating activities

Prepaid expenses and other

Accounts payable

( 3,401,939 )

Accrued expenses and other

current liabilities

( 1,933,062 )

Cash flows from investing activities:

Cash acquired in acquisitions, net

Proceeds from the sale of property and equipment

Purchases of property and equipment

Net cash used in investing activities

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 lines of credit

Payment on lines of credit

Lease liabilities

cash used in operating activities

( 7,971,902 )

Payment on loans payable

( 3,841,706 )

Cash flows from investing

of property and equipment

Net cash used in investing

Cash flows from financing

Proceeds from sales of

common stock, net of offering costs

Proceeds from stock option

Proceeds from issuance

of Series B Preferred Stock, net of offering costs

Proceeds from exercises

Proceeds from loans payable

Proceeds from convertible

notes payable

Proceeds from line of credit

Payments on line of credit

( 19,266,896 )

Payment of convertible note payable

( 1,067,713 )

Payment of debt issuance cost

Net cash provided by financing activities

Payments on loans payable

( 1,667,400 )

( 6,157,484 )

Payments on convertible

notes payable

of debt issuance costs

Net cash provided by financing

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

Reconciliation of cash and cash equivalents to the condensed consolidated financial statements

Cash from continuing operations

Cash from discontinued operations

Total cash and cash equivalents, end of period

Net increase (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:

Supplemental disclosure of non-cash transactions:

Operating lease assets obtained in exchange for operating lease obligations

Common stock issued in SB Cyber acquisition

Common stock issued as a lending discount

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

AND SUBSIDIARIES

Supplemental disclosures

of non-cash investing and financing activities:

Operating lease assets

obtained in exchange for operating lease liabilities

Common stock issued as

a lending discount

Common stock issued in

exchange for services

Debt conversion to equity

- common stock

Debt conversion to equity

- Series A Preferred Stock

Conversion of Series A

Preferred Stock to common stock

Conversion of Series B

Preferred Stock to common stock

Accretion of Series B Preferred

Stock to redemption value

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

TO CONSOLIDATED FINANCIAL STATEMENTS

1 – NATURE OF THE ORGANIZATION AND BUSINESS

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

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

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

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of the Business

are a cybersecurity, compliance, and software company comprised of highly trained and seasoned security professionals who work with

clients to enhance or create a better cyber posture in their organization.

are a leading cybersecurity, compliance, and software company comprised of highly trained and seasoned security professionals who work

with clients to enhance or create a better cyber posture in their organization.

We provide a full range of cybersecurity consulting,

related services, and cybersecurity software, encompassing all four pillars of proprietary software stack, compliance,

cybersecurity, and organizational culture.

Our services include managed security, compliance services, security operations

center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response,

certified forensics, technical assessments, and cybersecurity training.

We believe that culture is the foundation of every

successful cybersecurity and compliance program.

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

Compliance & Cybersecurity Provider + Culture”), which is a holistic solution that provides all four of these pillars

under one roof from a dedicated team of subject matter experts.

In contrast to the majority of cybersecurity firms that are focused

on a specific technology or service, we seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating

highly sought-after topic experts.

We continually seek to identify and acquire cybersecurity talent to expand our service scope and

geographical coverage to provide the best possible service for our clients.

We believe that bringing together a world-class team of

technological experts with multi-faceted expertise in the critical aspects of cybersecurity is key to providing technology agnostic

solutions to our clients in a business environment that has suffered from a chronic lack of highly skilled professionals, thereby

setting us apart from competitors and in-house security teams.

Our goal is to create a culture of security and to help quantify,

define, and capture a return on investment from information technology and cybersecurity spending.

related services, and cybersecurity software, encompassing all four pillars of proprietary software stack, compliance, cybersecurity,

and organizational culture.

Our comprehensive cybersecurity services include managed security, compliance services, security operations

center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response, certified

forensics, technical assessments, and cybersecurity training.

We believe that culture is the foundation of every successful cybersecurity

and compliance program.

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

Provider + Culture”), which is a holistic solution that provides all four of these pillars under one roof from a dedicated team

of subject matter experts.

In contrast to the majority of cybersecurity firms that are focused on a specific technology or service, we

seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating highly sought-after topic experts.

We continually

seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible

service for our clients.

We believe that bringing together a world-class team of technological experts with multi-faceted expertise in

the critical aspects of cybersecurity is key to providing technology-agnostic solutions to our clients in a business environment that

has suffered from a chronic lack of highly skilled professionals, thereby setting us apart from competitors and in-house security teams.

Our goal is to create a culture of security and to help quantify, define, and capture a return on investment from information technology

and cybersecurity spending.

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 However, due to losses incurred, substantial doubt about the Company’s ability

to continue as a going concern exists.

are evaluating strategies to obtain the required additional funding for future operations.

The accompanying consolidated 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, historical cash used in operations and the existence of a working capital

deficit, substantial doubt about our ability to continue as a going concern exists.

The Company’s ability to fund ongoing operations

is highly dependent upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles.

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

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.

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.

The 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.

financing, issuing debt or entering into other financing arrangements, and restructuring operations to grow revenues and decrease expenses.

August 4, 2025, we entered into Exchange Agreements (each, an “Exchange Agreement,” and collectively, the “Exchange

Agreements”) with each of Hensley & Company, d/b/a Hensley Beverage Company (“Hensley”), an entity affiliated with

McCain, a director of the Company, and JC Associates, Inc.

(“J C Associates,” and collectively with Hensley, the

Pursuant to the Exchange Agreements, the Holders exchange certain outstanding convertible notes payable with

aggregate principal and accrued interest of approximately $ 9,297,894 (collectively, the “Exchange Notes”) for an aggregate

of 9,297,894 newly authorized shares of Series A Preferred Stock.

Upon the closing of the transactions contemplated by the Exchange Agreements,

the Exchange Notes were cancelled, and the Holders relinquished all rights, powers, privileges, remedies, or interest under such securities.

On November 6, 2025, we converted all 9,297,894 outstanding shares of Series A Preferred Stock, together with $ 222,815 in accrued and

unpaid dividends to 9,520,709 shares of Common Stock.

September 24, 2025, we entered into a Preferred Equity Purchase Agreement (the “Purchase Agreement”) with B.

Riley Principal

Capital I (“B.

Riley”), an affiliate of B.

Riley Securities, Inc.

(“BRS”), pursuant to which we will have the

right to issue and sell to B.

Riley, and B.

Riley must purchase from us, up to $ 15.0 million of shares of our newly authorized Series

B Convertible Preferred Stock, par value $ 0.00001 per share (the “Series B Preferred Stock”).

As of the issuance of these

consolidated financial statements, B.

Riley has purchased $ 2.3 million of the $ 15.0 million of shares of Series B Preferred Stock.

sales of Series B Preferred Stock by us to B.

Riley, if any, will be subject to certain limitations and conditions set forth in the Purchase

Agreement, and may occur from time to time, at our sole discretion, over the 18-month period commencing September 24, 2025 and terminating

on the earliest of (i) March 24, 2027, (ii) the date on which B.

Riley shall have made payment of the aggregate purchase price equal

to $ 15.0 million.

In no event may we issue or sell to B.

Riley under the Purchase Agreement shares of our Series B Preferred Stock that

are convertible into an aggregate number of shares of Common Stock exceeding a customary 9.99 % beneficial ownership limitation.

June 26, 2025, we renewed our expiring shelf registration statement on Form S-3 (that was deemed effective on July 7, 2025) (“July

2025 Prospectus”) that contains two prospectuses:

base prospectus that covers the potential offering, issuance, and sale from time to time of our Common Stock, preferred stock, warrants,

debt securities, and units in one or more offerings with total proceeds of up to $ 100,000,000 ;

sales agreement prospectus covering the potential offering, issuance, and sale from time to time of shares of our common stock having

aggregate gross sales proceeds of up to $ 10,380,600 pursuant to our At-the-Market (“ATM”) sales agreement, dated June

14, 2022, with BRS, Stifel, Nicolaus & Company, Incorporated and Boustead Securities, LLC.

no event will we sell securities under this registration statement with a value exceeding more than one-third of our “public float”(the

aggregate market value of our Common Stock and any other equity securities that we may issue in the future that are held by non-affiliates)in

any 12-calendar month period so long as our public float remains below $75 million.

can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

may be unable to access further equity or debt financing when needed.

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

upon our ability to successfully implement our strategies and eventually attain profitable operations.

The accompanying consolidated

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

that may be necessary if we are unable to continue as a going concern.

December 30, 2025, we received a letter from the listing qualifications staff (the “Staff”) of Nasdaq providing notification

that the bid price of our Common Stock had closed below $ 1.00 per share for the previous 33 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 180 calendar days or until June 29, 2026, 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

June 29, 2026.

we do not regain compliance with Rule 5550(a)(2) by June 29, 2026, we may be eligible for an additional 180 calendar day compliance period.

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.

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.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the

United States of America (“GAAP”).

The summary of significant accounting policies presented below is designed to assist in

understanding our consolidated financial statements.

Such consolidated financial statements and accompanying notes are the representations

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

United States of America (“GAAP”) and have been consistently applied in the presentation of the consolidated financial statements.

February 29, 2024, our board of directors approved a 1-for-15 reverse stock split of our Common Stock.

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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.

stock split, stockholders received one share of CISO Common Stock, par value $ 0.00001 , for each 15 shares they held as of the record

All share and per share amounts have been retroactively restated for the effects of this reverse stock split.

stock underlying our outstanding warrants, convertible notes, and options have been adjusted, and the conversion and exercise prices

have also been adjusted.

Common Stock underlying

our outstanding warrants, convertible notes, and options have been adjusted, and the conversion and exercise prices have also been adjusted.

Consolidation

consolidated financial statements include the accounts of our company and our wholly owned subsidiaries.

All significant intercompany

accounts and transactions have been eliminated in consolidation.

accompanying consolidated financial statements present the financial position, results of operations and cash flows of CISO and its wholly

owned subsidiaries.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Period Reclassifications

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assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenue and expenses during the reporting period.

of expenses during the reporting period.

Actual results could differ from those estimates.

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

accompanying consolidated financial statements.

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

intangible assets and goodwill, deferred tax asset and valuation allowance, the valuation of convertible notes, derivative

liabilities, 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,

expected dividend rate, and the adequacy of insurance reserves.

revenue is derived from three major types of services to clients:

security managed services, professional services, and

cybersecurity software.

With respect to security managed services, we provide culture education and enablement, tools and technology

provisioning, data and privacy monitoring, regulations and compliance monitoring, remote infrastructure administration, and

cybersecurity services, including, but not limited to, antivirus and patch management.

With respect to professional services, we

provide cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, disaster recovery and

data backup solutions.

With respect to cybersecurity software, we provide a comprehensive suite of proactive cybersecurity software solutions

designed to protect organizations from evolving cyber threats.

Their offerings encompass advanced threat detection, proactive monitoring,

and robust risk management to ensure enterprise security and compliance.

revenue is categorized and disaggregated as reflected in our consolidated statements of operations and comprehensive loss, as follows:

Material estimates include the allowance for

credit losses, the carrying value of intangible assets and goodwill, our deferred tax assets and valuation allowance, the valuation of

our convertible notes payable, Series A and Series B Preferred Stock, the adequacy of insurance reserves, and assumptions used in the

Black-Scholes option pricing model, such as expected term, stock price volatility and risk-free interest rate.

Company operates and manages its business as one reportable and operating segment.

Our chief operating decision maker (“CODM”)

is our Chief Executive Officer.

The CODM is regularly provided with financial information on a consolidated basis for purposes of allocating

resources and evaluating financial performance.

Our CODM uses consolidated net loss, as reported in our consolidated statements of operations

and comprehensive loss, to facilitate analysis of our financial trends, review budgeted versus actual results and for planning purposes.

Significant segment expenses are presented in our consolidated statements of operations and comprehensive loss.

of our revenue and long-lived assets are located within the United States.

Company recognizes revenue in accordance with FASB Accounting Standards Codification Topic 606, Revenue from Contracts with Customers

Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer,

in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

606 requires the Company to apply a five-step model to all customer arrangements (i) identify the contract(s) with the customer;

identify the performance obligation(s) in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to

the performance obligation(s);

and (v) recognize revenue when (or as) a performance obligation is satisfied.

The Company applies this

framework when a substantive contract exists and the collectability of the related consideration is deemed probable.

Company applies significant judgment in determining the appropriate accounting for contracts with customers.

These judgments include

identifying performance obligations in contracts, determining whether promised goods and services are distinct, determining whether revenue

should be recognized over time or at a point in time, and assessing whether the Company acts as principal or agent in transactions involving

third-party hardware or software solutions.

transaction price is determined based on the consideration to which the Company is expected to be entitled in exchange for transferring

services to the customer.

The Company’s contracts generally contain a single performance obligation, and the entire transaction

price is allocated to that obligation.

The Company’s contracts generally do not include variable considerations such as discounts,

rebates, refunds, credits, price concessions (explicit or implicit), incentives, performance bonuses, or penalties.

revenue is derived from and disaggregated in our consolidated statements of operations and comprehensive loss into, the following three

major types of products and services:

security managed services, professional services, and cybersecurity software.

Managed Services

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are satisfied.

Assets and Liabilities

assets represent revenue recognized in advance of the Company’s right to invoice.

As of December 31, 2025 and 2024, the contract

asset balance was $ 91,956 and $ 179,093 , respectively, primarily related to services performed in advance of billing.

Company’s contracts generally do not contain a significant financing component.

liabilities consist of deferred revenue and primarily include amounts billed or payments received in advance of revenue recognition.

These amounts relate to services not yet performed or annual software licenses for which revenue will be recognized as the services are

delivered or ratably over the license term.

The Company generally invoices customers in advance or in milestone-based installments.

Company recognized revenue of $ 1,274,007 and $ 1,598,670 for the years ended December 31, 2025 and 2024, respectively, which was included

in the corresponding deferred revenue balance at the beginning of the period.

in deferred revenue were as follows:

OF CHANGES IN DEFERRED REVENUE

Beginning balance

Additions to deferred revenue

Recognition of deferred

( 5,193,162 )

( 6,430,441 )

Ending balance

Acquisition Costs

Company pays sales commissions to obtain contracts with its customers.

However, because the Company’s contracts generally have

original terms of one year or less, the Company has elected the practical expedient to expense sales commissions as incurred, which are

recorded as selling expenses.

Performance Obligations

Company’s contracts generally have original terms of one year or less, and the Company has elected the practical expedient to exclude

disclosures about remaining performance obligations for contracts with an original expected duration of one year or less.

and Cash Equivalents

7 unchanged sentences

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

As of December 31, 2024 and 2023, our allowance

for credit losses was $ 124,434 and $ 219,141 , respectively.

in the allowance for credit losses were as follows:

OF CHANGES IN ALLOWANCE FOR CREDIT LOSSES

December 31, 2025

December 31, 2024

Allowance for credit losses, beginning

of the period

Bad debt expense

Allowance for credit

losses, end of the period

Cost of Revenue

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and Equipment

and equipment are recorded at cost.

Depreciation is computed using the straight-line method over the estimated useful lives of the related

assets, generally between three and five years .

Expenditures that enhance the useful lives of the assets are capitalized and depreciated.

and equipment are recorded at cost, net of accumulated depreciation.

Depreciation is computed using the straight-line method over the

estimated useful lives of the related assets, generally between three and five years.

Expenditures that enhance the useful lives of the

assets are capitalized and depreciated.

and equipment are depreciated over the following estimated useful lives using the straight-line method as follows:

OF USEFUL LIVES OF PROPERTY AND EQUIPMENT

of 10 years or the term of the lease

and repairs are charged to expense as incurred.

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accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

Long-Lived and Finite-Lived Intangible Assets

intangible assets are amortized over the following estimated useful lives:

OF FINITE-LIVED INTANGIBLE ASSETS

assets are amortized over the following estimated useful lives:

OF INTANGIBLE ASSETS

property/technology

finite lived intangible assets are amortized on a straight-line basis.

We annually evaluate the estimate remaining useful lives of our

intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization.

review long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances

indicate that the carrying amount of such assets may not be recoverable.

Recoverability of these assets is determined by comparing

the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount.

Fair value is

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

During the year ended December

31, 2024, we did not record a loss on impairment.

During the year ended December 31, 2023, we recognized losses on impairment of

intangible assets of $ 3,116,039 , which is included in loss from discontinued operations on our statement of operations .

and other intangible assets

and indefinite-lived intangible assets are assessed for impairment annually, or more frequently, if events occur that would indicate

intangible assets are amortized on a straight-line basis.

We annually evaluate the estimated remaining useful lives of our intangible

assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization.

review long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate

that the carrying amount of such assets may not be recoverable.

Recoverability of these assets is determined by comparing the forecasted

undiscounted cash flows of the asset group to which the assets relate to the carrying amount.

If the undiscounted cash flows are less

than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of such assets exceeds

their fair value.

Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets.

If we determine the fair value of an asset is less than the carrying value, an impairment loss is recognized in operating income or loss

in the consolidated statements of operations during the period incurred.

During the years ended December 31, 2025 and 2024, we did no t

record a loss on impairment.

is not amortized but is assessed for impairment annually in the fourth quarter, or more frequently, if events occur that would indicate

a potential reduction in the fair value of a reporting unit below its carrying value.

1 unchanged sentence

at the reporting unit level.

If we determine the fair value of the reporting unit’s goodwill or other indefinite-lived intangible

assets is less than their carrying value as a result of an annual or interim test, an impairment loss is recognized and reflected in

operating income or loss in the consolidated statements of operations during the period incurred.

We perform our impairment assessment

based on a quantitative analysis performed for our reporting unit.

review finite-lived intangible assets for impairment whenever an event occurs or circumstances change that indicate that the carrying

amount of such assets may not be fully recoverable.

Recoverability is determined based on an estimate of undiscounted future cash flows

resulting from the use of an asset and its eventual disposition.

Should an asset not be recoverable, an impairment loss is measured by

comparing the fair value of the asset to its carrying value.

If we determine the fair value of an asset is less than the carrying value,

an impairment loss is recognized in operating income or loss in the consolidated statements of operations during the period incurred.

of December 31, 2024, we believe such assets are recoverable;

however, there can be no assurance these assets will not be impaired in

future periods.

Any future impairment charges could adversely impact our results of operations.

the year ended December 31, 2023, we recognized losses on impairment of goodwill of $ 45,194,717 , of which $ 9,261,353 is included in loss from discontinued operations in our statement of operations.

If we determine the fair value of the reporting unit’s goodwill is less than their carrying value

as a result of an annual or interim test, an impairment loss is recognized and reflected in operating income or loss in the consolidated

statements of operations during the period incurred.

We perform our impairment assessment based on a quantitative analysis performed

for our reporting unit.

the years ended December 31, 2025 and 2024, we recognized no impairment of goodwill.

and Marketing Costs

expense advertising and marketing costs as they are incurred.

Advertising and marketing expenses were zero and $ 449,231 for the

years ended December 31, 2024 and 2023, respectively, and are recorded in operating expenses on the consolidated statements of operations.

Advertising and marketing expenses were $ 1,012,140 and $ 0 for the years

ended December 31, 2025 and 2024, respectively, and are recorded in operating expenses on the consolidated statements of operations.

Value Measurements

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carrying value of cash, accounts receivable, accounts payable and accrued expenses and other current liabilities approximate their fair

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

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 notes approximates

our incremental borrowing rate.

The long-lived assets (i.e., goodwill and intangible assets) were valued utilizing Level 3 inputs.

unobservable inputs used in fair value measurement of the intangible assets include projected revenue, gross profit and operating expenses,

income tax rates, discount rates, royalty rates, and attrition rates.

values, based on the short-term maturity of these instruments.

The carrying amount of loans and notes payable approximate the estimated

fair value for this financial instrument as management believes that interest payable on the notes approximates our incremental borrowing

Loss per Common Share

loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period.

All outstanding options are considered potentially outstanding common stock.

The dilutive effect, if any, of stock options is calculated

using the treasury stock method.

All outstanding convertible notes are considered common stock at the beginning of the period or at the

time of issuance, if later, pursuant to the if-converted method.

Since the effect of common stock equivalents is anti-dilutive with respect

to losses, the options and shares issuable upon conversion have been excluded from our computation of net loss per common share for the

years ended December 31, 2024 and 2023.

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.

The following

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

shares was antidilutive due to our net loss position even though the exercise price could be less than the average market price of the

common shares:

net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the

Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of Common Stock and potentially

dilutive shares of Common Stock outstanding during the period.

dilutive securities, all outstanding stock options, restricted stock units, warrants, convertible notes payable, and Series B Preferred

Stock are considered potentially outstanding Common Stock.

The dilutive effect, if any, of stock options, restricted stock units, and

warrants is calculated using the treasury stock method.

All outstanding convertible notes payable and Series B Preferred Stock are considered

Common Stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method.

following is a reconciliation of the numerators and denominators of the basic net loss per share computations for the periods presented:

OF BASIC AND DILUTED NET LOSS PER SHARE

Loss from continuing operations

$ ( 8,073,930 )

$ ( 19,905,601 )

Deemed dividend on Series B Preferred

Series A Preferred Stock dividend

Deemed contribution related to Series

B Preferred Stock

Loss from discontinued

( 4,338,318 )

Net loss attributable

to common stockholders

$ ( 8,993,793 )

$ ( 24,243,919 )

Weighted-average shares

outstanding - basic

Basic loss per share:

Loss from continuing operations

Loss from discontinued

following is a reconciliation of the numerators and denominators of the diluted net loss per share computations for the periods presented:

Net loss attributable to common

$ ( 8,993,793 )

$ ( 19,905,601 )

Gain on extinguishment of convertible

notes payable

( 4,096,855 )

Convertible notes payable - interest expense

Loss from discontinued

( 4,338,318 )

Net loss attributable

to common stockholders for diluted net loss per share computation

$ ( 12,733,318 )

$ ( 24,243,919 )

Weighted-average shares outstanding - basic

Convertible notes payable

Diluted weighted average shares outstanding

Diluted loss per share:

Loss from continuing operations

Loss from discontinued

following potentially dilutive securities were excluded from the computation of diluted net loss per common share because their inclusion

would have been anti-dilutive:

SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE

December 31, 2024

December 31, 2023

Stock options

Convertible debt

Restricted stock units

Series B Preferred Stock

Convertible notes payable

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

3 unchanged sentences

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

to make assumptions with respect to the expected term of the option, the expected volatility of our Common Stock consistent with the

expected life of the option, risk-free interest rates, and expected dividend yields of the Common Stock.

3 unchanged sentences

are recorded as they are incurred.

the average of historical share prices of our common stock to calculate volatility

for use in the Black-Scholes-Merton option pricing model.

We used the average of historical share prices of our Common Stock to calculate volatility for use

in the Black-Scholes-Merton option pricing model.

New shares are issued upon the exercise of stock options.

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

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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.

evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives

in accordance with ASC Topic 815 “Derivatives and Hedging.” Derivative instruments are initially recorded at fair value on

the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

in accordance with ASC Topic 815, Derivatives and Hedging .

Derivative instruments are initially recorded at fair value on the

grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

assets and liabilities are classified in the balance sheets as current or non-current based on whether or not net-cash settlement or

conversion of the instrument could be required within 12 months of the balance sheet date.

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

December 31, 2024

December 31, 2023

Security managed services

Professional services

Cybersecurity software

Total deferred revenue - current

Security managed services

Total deferred revenue – long term

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

obligations, offset by $ 1,598,670

of revenue recognized during 2024, which was included in the deferred revenue balance as of December 31, 2023.

The deferred revenue

balance as of December 31, 2024 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

Cybersecurity software

Total deferred revenue

functional and reporting currency is the U.S.

For certain of our foreign subsidiaries whose functional currency were other than

For certain of our former foreign subsidiaries whose functional currency were

other than the U.S.

dollar, we translated revenue and expense transactions at average exchange rates.

We translated assets and liabilities at period-end

exchange rates and include foreign currency translation gains and losses as a component of accumulated other comprehensive income.

in which our company is the lessee are comprised of our corporate office and one additional office, which is immaterial to our

We translated assets and

liabilities at period-end exchange rates and include foreign currency translation gains and losses as a component of accumulated

other comprehensive loss.

determine if an arrangement contains a lease at inception.

We exclude leases with an original term of one year or less at the commencement

date from our consolidated balance sheets.

Leases in which our company is the lessee are comprised of our corporate office and one

additional office, which is immaterial to our operations.

All of the leases are classified as operating leases.

Our office spaces have a remaining weighted average

(“ROU”) assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred.

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extend or terminate the lease if it is reasonably certain that we will exercise that option.

Our leases do not provide an implicit rate;

therefore, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present

value of the future lease payments.

accordance with ASC 842, Leases , we recognized a ROU asset and corresponding lease liability on our consolidated balance sheet

for long-term office leases and a vehicle operating lease agreement.

See Note 14 – Leases for further discussion, including the

impact on our consolidated financial statements and related disclosures.

tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial

statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets, including tax loss

and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which

those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in

tax rates is recognized in income in the period that includes the enactment date.

utilize ASC 740, Income Taxes , which requires the recognition of deferred tax assets and liabilities for the expected future tax

consequences of events that have been included in the consolidated financial statements or tax returns.

We account for income taxes using

the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts,

using currently enacted tax rates.

A valuation allowance is recorded when it is “more likely than not” that a deferred tax

asset will not be realized.

At December 31, 2024 and 2023, our net deferred tax asset has been fully reserved.

See Note 14, “Leases,” for further discussion, including

the impact on our consolidated financial statements and related disclosures.

tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities, including tax

loss and credit carry forwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates

is recognized in income in the period that includes the enactment date.

utilize Accounting Standards Codification Topic 740 (ASC 740), which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.

account for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities

and the related financial amounts, using currently enacted tax rates.

A valuation allowance is recorded when it is “more likely

than not” that a deferred tax asset will not be realized.

As of December 31, 2025 and 2024, our net deferred tax asset has been

fully reserved.

uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions

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Issued Accounting Standards

December 2023, the FASB issued Accounting Standards Update, or ASU, 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax

Disclosures,” or ASU 2023-09.

ASU 2023-09 requires additional disaggregated disclosures on an entity’s effective tax rate

reconciliation and additional details on income taxes paid.

ASU 2023-09 is effective on a prospective basis, with the option for retrospective

application, for annual periods beginning after December 15, 2024 and early adoption is permitted.

We do not expect the adoption of ASU

2023-09 to have a material impact on our consolidated financial statements.

December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09

“Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” ASU 2023-09 requires additional disaggregated disclosures

on an entity’s effective tax rate reconciliation and additional details on income taxes paid.

ASU 2023-09 is effective on a prospective

basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted.

As an emerging growth company (EGC), the Company has elected to adopt the standard based on the effective dates applicable to non-public

business entities.

Accordingly, the Company will adopt ASU 2023-09 for annual periods beginning after December 15, 2025.

We expect this

to result in additional disclosures in our consolidated financial statements.

November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40):

Disaggregation of Income Statement Expenses.” ASU

is effective prospectively to financial statements issued for reporting period after the effective date or retrospectively to any or

all prior periods presented in the financial statements, for annual periods beginning after December 15, 2026 and interim reporting periods

beginning after December 15, 2027.

Early adoption is permitted.

Adoption of this guidance will result in additional disclosures, but

we do not expect the adoption of ASU 2024-03 will impact our consolidated financial position, results of operations or cash flows.

2024-03 requires public entities to provide disaggregated disclosure of expenses included within relevant income statement expense captions,

as well as additional disclosures about selling expenses.

This update is effective for annual periods beginning after December 15, 2026,

and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The amendments in this ASU

should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of the ASU or

(2) retrospectively to any or all prior periods presented in the financial statements.

The adoption of ASU 2024-03 is expected to result

in additional disclosures in our consolidated financial statements.

November 2024, the FASB issued ASU 2024-04, “Debt (Subtopic 470-20):

Debt with Conversion and Other Options.

ASU 2024-04 clarifies the

assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes

are made to conversion features as part of an offer to settle the instrument.

ASU 2024-04 is effective for reporting periods beginning

after December 15, 2025, and interim periods within those annual reporting periods.

Early adoption is permitted for entities that have

adopted ASU 2020-06.

We do not expect the adoption of ASU 2024-04 to 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,”

or ASU 2023-07.

ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis.

ASU 2023-07 is

effective on a retrospective basis for annual periods beginning after December 15, 2023, for interim periods within fiscal years beginning

after December 15, 2024.

We adopted ASU 2023-07 for the fiscal year-ended December 31, 2024.

The additional disclosure requirements of

ASU 2023-07 did not have a material impact on our consolidated financial statements.

Debt with Conversion and Other Options.” ASU 2024-04

clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt

when changes are made to conversion features as part of an offer to settle the instrument.

ASU 2024-04 is effective for reporting periods

beginning after December 15, 2025, and interim periods within those annual reporting periods.

Early adoption is permitted for entities

that have adopted ASU 2020-06.

We adopted ASU 2024-04 during the year ended December 31, 2025 (with an effective date of January 1, 2025),

which did not have a material impact on our consolidated financial statements.

September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.” The purpose of this ASU is to modernize the accounting guidance

for the costs to develop software for internal use by removing all references to prescriptive and sequential software development project

stages and providing further guidance on when an entity is required to start capitalizing eligible costs.

ASU 2025-06 is effective for

annual reporting periods beginning after December 15, 2027.

Early adoption is permitted and the new guidance should be applied either

on a prospective transition, a modified transition or a retrospective transition approach.

The company is currently evaluating the impact

of this standard on its consolidated financial statements and disclosures.

4 – DISPOSITIONS

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the outstanding shares of our wholly owned subsidiary Ocean Point Equities, Inc.

in exchange for 194,267 shares of our common stock

owned by the owners of Southford Equities, Inc.

in exchange for 194,267 shares of our Common Stock owned

by the owners of Southford Equities, Inc.

and nominal cash consideration ($ 1.00 dollar).

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CUATROi SpA, Comercializadora CUATROi SpA, CUATROi Peru, SAC, and CUATROi SAS in exchange for 135,795 shares of our Common Stock owned

by the owners of CT Group, LP, Datadeck LP, Woodface, LP, VMT Technologies, LP and Quijote Ventures, LP and nominal cash consideration

by the owners of CT Group, LP, DatadeckLP, Woodface, LP, VMT Technologies, LP and Quijote Ventures, LP and nominal cash consideration

($ 5.00 dollars).

July 1, 2024, we entered into a Stock Purchase Agreement with Itada Equities, Inc.

(the “NLT SPA”) to sell 100 % of the outstanding

(the “NLT SPA”) to sell 100 % of the outstandings

shares of our wholly owned subsidiaries NLT Networks, S.P.A., NLT Technologias, Limitada, NLT Servicios Profesionales, S.P.A.

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in exchange for 172,075 shares of our Common Stock owned by the owners of Itada Equities, Inc.

cash consideration ($ 1.00 dollar).

and nominal cash

consideration ($ 1.00 dollar).

committed to a formal plan to sell our former Latin America subsidiaries to focus on our U.S.-based operations and development and marketing

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The operating results of our former Latin America subsidiaries are reported within

discontinued operations on our condensed consolidated statements of operation through July 1, 2024.

As a result of the sale, we recorded

a loss from discontinued operations of $ 4,338,318 , which includes the release of associated accumulated translation adjustment from the net assets disposed

discontinued operations on our consolidated statements of operation through July 1, 2024.

As a result of the sale, we recorded loss from

discontinued operations of $ 4,338,318 , which includes the release of associated accumulated translation adjustment from the net assets

table below provides the total revenue and loss of the discontinued operations presented in our statements of operations.

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Other expense

Loss from discontinued operations before income taxes

( 1,149,086 )

Loss from discontinued operations before income

( 1,149,086 )

Benefit from income taxes

Loss on disposal, net of tax

( 3,189,232 )

Loss from discontinued operations

Loss on disposal, net

( 3,189,232 )

Loss from discontinued

$ ( 4,338,318 )

flows from operating activities of discontinued operations was $ 223,831 and $ 3,283,088 for the years ended December 31, 2024 and 2023,

respectively.

used in investing activities of discontinued operations was $ 83,095 and $ 69,865 for the years ended December 31, 2024 and 2023, respectively.

September 2024, we entered into an Intellectual Property Purchase Agreement pursuant to which we sold our wholly owned subsidiary

(“vCISO”), for cash proceeds of $ 1,000,000 .

vCISO owns substantially all of our internally developed intellectual property currently marketed to our customers and also being

developed for future deployment.

As a condition of closing the Intellectual Property Purchase Agreement, we concurrently entered

into a License-Back and Buy-Back Agreement which provides us with a perpetual, transferable and royalty-free license to use the

intellectual property rights to sell such software to our customers.

The license was exclusive for our use for the initial six

months of the agreement.

In exchange for these rights, we agreed to continue development of the intellectual property at our own

also retained the right to buy back the intellectual property at a price of $ 1,500,000 , if repurchased within six months

from the date of the agreement, $ 1,750,000 if repurchased within six to twelve months, or at an agreed upon purchase price if repurchased

after twelve months.

Upon execution of this divestiture, we did not have financial means nor the intent to execute the Buy-Back Agreement.

cash provided by operating activities of discontinued operations was $ 223,831 for the year ended December 31, 2024.

Net cash used in

investing activities of discontinued operations was $ 83,095 for the year ended December 31, 2024.

September 2024, we entered into an Intellectual Property Purchase Agreement in which we sold our wholly-owned subsidiary vCISO, LLC.(“vCISO”),

for cash proceeds of $ 1,000,000 .

vCISO owns substantially all of our internally developed intellectual property currently marketed to

our customers and also being developed for future deployment.

As a condition of closing the Intellectual Property Purchase Agreement,

we concurrently entered into a License-Back and Buy-Back Agreement which provides us with a perpetual, transferable and royalty-free

license to use the intellectual property rights to sell such software to our customers.

The license was exclusive for our use for the

initial six months of this agreement.

In exchange for these rights, we have agreed to continue development of the intellectual property

at our own cost.

also retained the right to buy back the intellectual property at a price of $ 1,500,000 , if repurchased within six months from the date

of the agreement, $ 1,750,000 if repurchased within six to twelve months, or at an agreed upon purchase price if repurchased after twelve

November 2024, certain prospective investors required us, as a condition of securing their investment, to have direct and full ownership

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amount of $ 1,020,000 .

did not hold any assets or liabilities reported in our consolidated financial statements at the time of disposal, as a result, we initially

recorded a $ 1,000,000 gain on the disposition of vCISO.

The repurchase of vCISO would result in the recognition of an asset on our consolidated

balance sheet.

The economic substance of these two transactions resulted in us receiving $ 1,000,000 of cash in exchange for a Promissory

Due to the close proximity in execution of these agreement, the second which was not previously contemplated, and their economic

substance for the year-ended December 31, 2024, we netted the previously recorded gain on the sale of vCISO in the repurchase transaction

to make our consolidated financial statements reflect the ultimate economics of these transactions.

did not hold any assets or liabilities reported in our consolidated financial statements, as a result, we initially recorded a $ 1,000,000

gain on the disposition of vCISO.

The repurchase of vCISO would result in the recognition of an asset on our consolidated balance sheet.

The economic substance of these two transactions resulted in us receiving $ 1,000,000 of cash in exchange for a Promissory Note.

the close proximity in execution of these agreement, the second which was not previously contemplated, and their economic substance for

the year-ended December 31, 2024, we netted the previously recorded gain on the sale of vCISO in the repurchase transaction to make our

consolidated financial statements reflect the ultimate economics of these transactions.

5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

expenses and other current assets consisted of:

expenses and other current assets consisted of the following:

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

December 31, 2024

December 31, 2023

Prepaid expenses

Prepaid insurance

Total prepaid expenses and other current assets

Total prepaid expenses

and other current assets

6 – PROPERTY AND EQUIPMENT

and equipment consisted of the following:

and equipment, net consisted of the following:

OF PROPERTY AND EQUIPMENT

December 31, 2024

December 31, 2023

Computer equipment

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accumulated depreciation

Property and equipment, net

Total property and

equipment, net

depreciation expense was $ 286,147 and $ 322,126 for the years ended December 31, 2025 and 2024, respectively.

7 – INTANGIBLE ASSETS AND GOODWILL

following table summarizes the changes in goodwill during the years ended December 31, 2024 and 2023, respectively:

following table presents the goodwill balance and accumulated impairment losses as of December 31, 2025 and 2024:

OF CHANGES IN GOODWILL

Balance as of December 31, 2022

Accumulated impairment losses

( 15,691,695 )

Balance at December 31, 2025 and 2024

Gross goodwill

impairment losses

( 51,625,059 )

Balance as of December 31, 2023

Accumulated impairment losses

( 51,625,059 )

Balance as of December 31, 2024

Accumulated impairment losses

( 51,625,059 )

Goodwill, net of accumulated

impairment losses

assets, net are summarized as follows:

OF INTANGIBLE ASSETS

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

December 31, 2024

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

SCHEDULE OF INTANGIBLE ASSETS

Carrying Amount

Tradenames – trademarks

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( 2,120,034 )

Intangible Asset

Total intangible assets

$ ( 6,470,233 )

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

December 31, 2023

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Carrying Amount

Tradenames – trademarks

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Intellectual property/technology

Intangible Asset

( 1,621,621 )

Total intangible assets

$ ( 5,549,094 )

expense of identifiable intangible assets was $ 921,139 and $ 1,744,366 , for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2024, the weighted-average remaining amortization period for intangible assets was 2.28 years.

The weighted average remaining useful life of intangible assets was 1.62 years as of December 31, 2025.

on the balance of intangibles assets at December 31, 2025, expected future amortization expense is as follows:

OF FUTURE AMORTIZATION EXPENSE

Amortization Expense

8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following amounts:

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

December 31, 2024

December 31, 2023

Accounts payable

Accrued payroll and bonuses

SCHEDULE OF FUTURE AMORTIZATION EXPENSE

8 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

expenses and other current liabilities consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accrued expenses

Accrued payroll and bonuses

Accrued commissions

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Accrued interest

Total accounts payable and accrued expenses

Total accrued expenses

and other current liabilities

9 - RELATED PARTY TRANSACTIONS

Consulting Agreement with Stephen Scott

August 2020, we entered into an Independent Consulting Agreement with Stephen Scott, a significant stockholder due to his beneficial

ownership, with respect to advisory and consulting services relating to our strategic and business development, and sales and

Scott received a consulting fee of $ 11,500

per month for such services until July 2023.

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

Scott, as amended in July 2024, 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 mergers and acquisitions for a period of one year.

Scott will receive a consulting fee of

per month for such services under the terms of this agreement.

During the years ended December 31, 2024 and 2023, we paid consulting

Scott in the amounts of $ 180,000

and $ 159,000 ,

respectively.

Note Payable – Related Party

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 but unpaid interest thereon into shares of our common stock at a conversion price of $ 18.00 per share.

During the years ended

December 31, 2024 and 2023, we recorded interest expense of $ 500,000 and $ 388,888 , respectively.

Accrued interest as of December 31,

2024 and 2023 was $ 888,888 and $ 388,888 , respectively.

McCain, a director of our company, is President and Chief Executive Officer

of Hensley & Company.

July 2023, we entered into an Independent Consulting Agreement with Stephen Scott, as amended in July 2024, 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 mergers and acquisitions for a period of one year.

Scott received a consulting fee of $ 15,000 per month

for such services under the terms of this agreement.

During the year ended December 31, 2024, we paid consulting fees to Mr.

Scott totaling

After the first quarter of 2025, Mr.

Scott was no longer considered a related party of the company.

Note Payable with Hensley & Company

March 2023, we issued an unsecured convertible note payable 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 was due on March 20, 2025 .

25, 2025, we entered into Amendment #1 to this convertible note, which extended the maturity date of the convertible note to March 20,

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

On August 5, 2025, the

principal amount of $ 5,000,000 together with $ 1,180,554 of accrued and unpaid interest payable under the convertible note were converted

into Series A Preferred Stock and the convertible note was fully extinguished.

On November 6, 2025, Hensley & Company converted all

outstanding shares of Series A Preferred Stock together with $ 148,111 in accrued and unpaid dividends to shares of our Common Stock.

Services Agreement with Hensley Beverage Company – Related Party

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, 2024 and 2023, we received $ 2,283,995

and $ 1,417,398 , respectively from Hensley Beverage Company for contracted services and had an outstanding receivable balance of zero

and $ 152,213 as of December 31, 2024 and 2023, respectively.

The payments received during the year ended December 31, 2024 included payments for future services, of which $ 191,633 remains outstanding at December 31, 2024.

10 - STOCKHOLDERS’ EQUITY

amended and restated certificate of incorporation authorized the issuance of up to 300,000,000 shares of common stock and 50,000,000

shares of undesignated preferred stock, each having a par value of $ 0.00001 per share.

Shares of common stock have both economic and

voting rights.

the years ended December 31, 2024 and 2023, we issued an aggregate of 126,688 and 1,782,658 shares of common stock to investors for cash

proceeds of $ 154,947 and $ 6,682,198 , respectively.

the years ended December 31, 2024 and 2023, we issued an aggregate of 200,000 and 366,667 shares of common stock, respectively, to consultants,

lenders, and vendors for services rendered.

December 10, 2024, we issued warrants to the Purchasers and the Placement Agent of the Securities Purchase Agreement to purchase 6,500,000

shares and 224,945

shares of our common stock, respectively.

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 provided for an original term through December 31, 2021, the agreement will continue until terminated

by either party.

For years ended December 31, 2025 and 2024, we received $ 1,019,567 and $ 2,283,995 , respectively, from Hensley Beverage

Company for contracted services, and had an outstanding accounts receivable balance of $ 125,215 and $ 0 as of December 31, 2025 and 2024,

respectively.

McCain, a director of the Company, is President and Chief Executive Officer of Hensley & Company, the parent company

of Hensley Beverage Company.

10 - STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY

the year ended December 31, 2025, we sold 112,907 shares of our Common Stock for proceeds of $ 131,321 (net of $ 4,841 of offering costs),

under our registration statement on Form S-3 that was declared effective on July 7, 2025.

the year ended December 31, 2025, we sold 4,933,395 shares of our Common Stock for proceeds of $ 2,684,754 (net of $ 97,517 of offering

costs), under our registration statement on Form S-3 that was declared effective on June 27, 2022.

the year ended December 31, 2024, we sold 126,688 shares of our Common Stock for proceeds of $ 154,947 (net of $ 5,777 of offering costs),

under our registration statement on Form S-3 that was declared effective on June 27, 2022.

A Preferred Stock

August 4, 2025, we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock of CISO (the “Series

A Certificate of Designations”).

A summary of the Series A Certificate of Designations of Series A Preferred Stock is as follows:

of Shares – 9,297,894 shares of preferred stock are designated as Series A Preferred Stock.

– No voting rights.

– Cumulative dividends will accrue, whether or not declared by our Board of Directors and whether or not there are funds

legally available for the payment of dividends, on a daily basis in arrears at the rate of 10 % per annum on the sum of the original

issuance price of $ 1.00 per share plus all unpaid accrued and accumulated dividends thereon.

accrued dividends will be paid in cash or our capital stock (as determined in our sole discretion) when, and if declared by our Board

of Directors or upon liquidation, conversion or redemption of the Series A Preferred Stock

entitled to participate in dividends or distributions of any nature paid on or in respect of the Common Stock (i.e., non-participating).

Rights – In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, each holder

will be entitled to receive liquidating distributions out of our assets legally available for distribution to our stockholders, before

any payment or distribution is made to holders of any junior securities (including our Comon Stock), in an amount equal to the issuance

price of $ 1.00 per share.

Redemption – The Company has the right, at any time or from time to time, to redeem any or all of the issued and outstanding

shares of Series A Preferred Stock for cash at the issuance price of $ 1.00 per share.

Rights – As determined in the sole discretion of our Board of Directors, and at our option, the Company may convert the

Series A Preferred Stock into shares of Common Stock.

Conversion is determined by (i) multiplying the number of shares of Series

A Preferred Stock to be converted by the issuance price of $ 1.00 per share, (ii) adding to the result all accrued and accumulated

and unpaid dividends on such shares of Series A Preferred Stock to be converted, and then (iii) dividing the result by the issuance

price of $ 1.00 per share.

August 4, 2025, we entered into the Exchange Agreements with Hensley & Company, an entity affiliated with Andrew K.

McCain, a director

of the Company, and JC Associates, Inc..

Pursuant to the Exchange Agreements, the Holders exchanged certain outstanding convertible notes,

as amended from time to time, with aggregate principal and accrued interest of approximately $ 9,297,894 for an aggregate of 9,297,894

newly authorized shares of Series A Preferred Stock.

Upon the closing of the transactions contemplated by the Exchange Agreements, the

Exchange Notes were cancelled, and the Holders relinquished all rights, powers, privileges, remedies, or interest under such securities.

The Series A Preferred Stock was entitled to cumulative dividends at a rate of 10 % per annum, accruing daily and compounding quarterly,

whether or not declared by the Board of Directors, based on the original issuance price plus any previously accrued and unpaid dividends.

a result of this transaction, for the year ended December 31, 2025, the Company recognized a gain on troubled debt restructuring of $ 5,296,103 ,

which reflects the difference between the carrying value of the Exchange Notes and the estimated fair value of the Series A Preferred

Stock issued.

November 6, 2025, we converted all 9,297,894 outstanding shares of Series A Preferred Stock, together with $ 222,815 in accrued and unpaid

dividends, into 9,520,709 shares of Common Stock.

B Preferred Stock

September 25, 2025, we filed with the Secretary of State of the State of Delaware a Certificate of Designations, Preferences and Rights

of Series B Preferred Stock of CISO (the “Series B Certificate of Designations”).

The Series B Certificate of Designations

sets forth the rights, preferences, privileges, and restrictions of the shares of Series B Preferred Stock.

Following is a summary of

the terms of the Series B Preferred Stock.

of Shares – 15,625 shares of preferred stock are designated as Series B Preferred Stock.

– No voting rights.

– The Series B Preferred Stock rank senior and prior to the common stock and junior to the Series A Preferred Stock.

Rights – The holders of Series B Preferred Stock are entitled to receive, concurrently with any dividends or distributions,

such dividends or distributions paid to the holders of common stock to the same extent as if such holders had converted the Series

B Preferred Stock into common stock (without regard to any limitations on conversion) and had held such shares of common stock on

such record date.

Rights – In the event of any Liquidation (as defined in the Certificate of Designations), each holder will be entitled

to receive liquidating distributions out of our assets legally available for distribution to our stockholders, before any payment

or distribution of any of our assets shall be made or set apart for holders of any junior securities, including, without limitation,

the common stock in an amount equal to the greater of (i) $ 1,000 per share and (ii) the amount that would have been received had

such Series B Preferred Stock and accrued and unpaid dividends thereon, if any, been converted immediately prior to such Liquidation

at the Conversion Price then in effect.

Right – The Series B Preferred Stock is subject to redemption by us in certain circumstances where our common stock is

not listed on or is otherwise suspended from Nasdaq, the holder becomes prohibited from converting any portion of the Series B Preferred

Stock for eighteen (18) months following the issuance of such Series B Preferred Stock due to the Exchange Cap, or the market price

of our common stock falls and remains below the Minimum Conversion Price for ten (10) consecutive trading days (each as described

in the Series B Certificate of Designations).

Rights – Each share of Series B Preferred Stock will be convertible at the option of the holder into the number of shares

of common stock determined by dividing the initial stated value of $ 1,000 per share (the “Stated Value”) by the applicable

conversion price for the Series B Preferred Stock then being converted as of each conversion date (the “Conversion Price”).

The Conversion Price equals (a) with respect to the first $ 500,000 of Stated Value of shares of Series B Preferred Stock being converted,

the greater of (x) one hundred and five percent ( 105 %) of the lowest volume weighted average price, as reported by Bloomberg Financial

Markets, during the five (5) trading day period immediately preceding and ending on the trading day immediately preceding such conversion

date and (y) the Minimum Conversion Price (defined below), and (b) with respect to all additional shares of Series B Preferred Stock

being converted thereafter, the greater of (x) ninety-five percent ( 95 %) of the lowest volume weighted average price during the five

(5) trading day period immediately preceding and ending on the trading day immediately preceding such conversion date and (y) the

Minimum Conversion Price.

The “Minimum Conversion Price” is initially $ 0.40 per share (subject to adjustment).

Right During VWAP Condition – If the Volume Weighted Average Price (“VWAP”) for any trading day falls below

the Minimum Conversion Price and then remains below the Minimum Conversion Price for ten (10) consecutive trading days after the

Series B Preferred Stock become convertible (“VWAP Condition”) then:

the holder delivers a notice of conversion while a VWAP Condition exists, the company must redeem such preferred stock.

must pay to the holder, on a monthly basis beginning on the first (1st) day of the first (1st) month following the conversion date

in respect of such notice of conversion and for continuing for the eleven (11) consecutive months thereafter, an amount equal to

one-twelfth (1/12th) of one hundred five percent ( 105 %) of the Stated Value of such preferred stock.

If 18 months after issuance

of such preferred stock (or 36 months after the commitment date, whichever comes first) occurs before the 12-month redemption period

ends, the company must pay the remaining balance in full within 10 trading days

the holder does not deliver a notice of conversion while a VWAP Condition exists and the

VWAP Condition continues for each trading day through the date that is eighteen (18) months

following issuance of such preferred stock, (or, if earlier, the date that is thirty-six

(36) months following the commitment date), the company must redeem all remaining preferred

stock in cash within 10 trading days.

The redemption price will be the greater of:

conversion price on the 10th day the VWAP fell below the Minimum Conversion Price, multiplied

by the number of shares of Common Stock the preferred stock is convertible into, and (b)

110 % of the stated value of the preferred stock.

the VWAP subsequently increases above the Minimum Conversion Price for ten (10) consecutive trading days before the 18-month or 36-month

deadline, the VWAP Condition and the related redemption right no longer exists.

Regardless of the VWAP Condition or subsequent recovery, the holder maintains the right to convert

the Series B Preferred Stock into Common Stock at the Minimum Conversion Price at any time and forego their cash redemption right related

to the existence of a VWAP Condition.

Right Upon Trading Failure – Within five (5) trading days of the holder’s receipt of a trading failure notice, the

holder may require the company to redeem in cash all or any portion of such holder’s Series B Preferred Stock at the redemption

Price – The greater of (i) the Stated Value and (ii) the product of (x) the lowest conversion price in effect during

the period beginning on the date immediately preceding the trading failure and ending on the date of the redemption notice and (y)

the number of shares of Common Stock into which such Series B Preferred Stock is convertible at the conversion price then in effect.

(A) The suspension of the Common Stock from trading on the Nasdaq for a period of ten (10) consecutive Trading Days

or for more than an aggregate of twenty (20) trading days in any 365-day period or (B) the failure of the Common Stock to be listed

on the Nasdaq.

Rights Offerings.

If at any time the we grant, issue, or sell any Common Stock or Common Stock equivalents or rights to purchase

stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock, then the holders

of Series B Preferred Stock will be entitled to acquire the same as if the holder had held the number of shares of Common Stock acquirable

upon complete conversion of such holder’s Series B Preferred Stock immediately before the date on which a record is taken for

the grant, issuance, and sale, so long as such holder’s ownership would not exceed 9.99 % of the Common Stock outstanding immediately

after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Series B Preferred Stock held by such

Ownership Limitation .

The Company will not affect any conversion of the Series B Preferred Stock and the holder may not convert any portion

of the Series B Preferred Stock, such that, after giving effect to the conversion, the holder would own in excess of 9.99 % of the Company’s

Common Stock outstanding immediately after the conversion.

September 24, 2025, we entered into the Purchase Agreement with B.

Riley Principal Capital, LLC (“B.

Riley”), pursuant to

which we will have the right to issue and sell to B.

Riley, and B.

Riley must purchase from us, up to $ 15.0 million of shares of our

newly authorized Series B Preferred Stock.

Such sales of Series B Preferred Stock by us to B.

Riley, if any, will be subject to certain

limitations and conditions set forth in the Purchase Agreement, and may occur from time to time, at our sole discretion, over the 18-month

period commencing September 24, 2025 and terminating on the earliest of (i) March 24, 2027 and (ii) the date on which B.

have made payment of the aggregate purchase price equal to $ 15.0 million.

In no event may we issue or sell to B.

Riley under the Purchase

Agreement shares of our Series B Preferred Stock that are convertible into an aggregate number of shares of Common Stock exceeding a

customary 9.99 % beneficial ownership limitation.

the year ended December 31, 2025, the Company issued 2,396

shares of Series B Preferred Stock to B.

Riley pursuant to the Purchase Agreement for cash proceeds of $ 1,774,935

(net of $ 525,065

of offering costs).

Such shares are classified as temporary equity in the company’s consolidated balance sheet, because they

are redeemable upon the occurrence of an event that is not solely within the control of the company, and subsequent to issuance

their carrying value is adjusted to redemption value.

For the year ended December 31, 2025, the Company recognized $ 699,445

of accretion of the carrying value of Series B Preferred Stock to its redemption value with a corresponding decrease to additional

paid-in capital.

As of December 31, 2025, 315

shares of Series B Preferred Stock had been converted into 624,795

shares of Common Stock, with 2,081

shares remaining outstanding.

Any additional future issuances of shares of Series B Preferred Stock to B.

Riley pursuant to the

Purchase Agreement are subject to certain conditions, including (i) the lowest daily VWAP for each of the five (5) consecutive

trading days prior to the put notice date and (ii) the closing sale price on the trading day prior to the put notice date shall

equal or exceed 150 %

of the Minimum Conversion Price then in effect.

the years ended December 31, 2025 and 2024, we issued warrants to the Purchasers and the Placement Agent of the Securities Purchase

Agreement to purchase 500,000

shares of our Common Stock.

The warrants issued to the Purchasers and Placement Agent are exercisable for a period of five

years from the date of issuance with an exercise price of $ 1.15

per share and $ 1.66

per share, respectively.

following table summarizes warrant activity:

OF STOCK WARRANT ACTIVITY

Weighted Average

Exercise Price

Life (in years)

Outstanding at January 1, 2023

following table summarizes warrant activity for the years ended December 31, 2025 and 2024:

SCHEDULE OF STOCK WARRANT ACTIVITY

Outstanding at December 31, 2023

Expired or cancelled

Outstanding at December 31, 2024

( 2,018,333 )

Expired or cancelled

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became effective on September 13, 2023.

As of December 31, 2024, 4,814,330 shares were available for issuance under the 2023 Plan.

Plan Activity

On December 10, 2025, our stockholders approved an amendment to our 2023 Plan to increase the

number of shares of our Common Stock, par value $ 0.00001 per share, available for issuance under the 2023 Plan by ten million ( 10,000,000 )

shares (the “Plan Amendment”).

The Plan Amendment was previously adopted by our Board of Directors on October 31, 2025.

of December 31, 2025, 735,841 shares were available for issuance under the 2023 Plan.

The additional shares approved under the Plan Amendment

are not reflected as of December 31, 2025, as the related Form S-8 was filed on February 13, 2026.

grant stock options vesting solely upon the continued service of the recipient.

We recognize the accounting grant date fair value of

equity-based awards as compensation expense over the required service period of each award, which is generally 1 to 4 years.

Stock options

expire 10 years from the date of grant.

applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions:

OF BLACK-SCHOLES STOCK OPTIONS GRANTED

For the Year Ended

December 31, 2024

December 31, 2023

Risk-free interest rate

3.78 % - 4.23 %

3.46 % - 4.79 %

Contractual term (years)

Expected term (years)

Expected volatility

96.30 % – 96.65 %

94.58 % - 136.47 %

Expected dividend yield

following table summarizes stock option activity:

following table summarizes stock option activity for the year ended December 31, 2025:

OF STOCK OPTION ACTIVITY

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life (in years)

Aggregate Intrinsic Value

Outstanding at January 1, 2023

Expired or cancelled

Outstanding at December 31, 2024

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value of our Common Stock and the exercise price of the stock options.

compensation expense related to the options was $ 8,956,571

and $ 11,469,667

for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, there was future compensation expense of

with a weighted average recognition period of 0.99

years related to the options.

The weighted-average grant-date fair value of options granted during the years 2024 and 2023 was

stock-based compensation expense related to the stock options was $ 3,301,782 and $ 8,956,571 for the years ended December 31, 2025 and

2024, respectively.

The total intrinsic value of options exercised during the years ended December 31, 2024 and 2023, was zero

and $ 887,595 ,

As of December 31, 2025, there was unrecognized compensation expense of $ 2,026,186 with a weighted average recognition

period of 1.95 years related to the stock options.

The total intrinsic value of options exercised during the years ended December 31,

2025 and 2024, was $ 2,986 and zero , respectively.

weighted-average grant-date fair value of stock options granted during the years ended December 31, 2025 and 2024 was $ 0.86 and $ 1.34 ,

respectively.

the year-ended December 31, 2024, 284,838 options vested, net of forfeitures.

During the year-ended December 31, 2025, 79,733 options vested, net of forfeitures.

granted restricted stock units (“RSUs”) that only contain a service-based vesting condition that is typically satisfied over

We recognize the accounting grant date fair value of equity-based awards as compensation expense over the requisite service

The fair value of RSUs is determined by the closing price of the Company’s Common Stock on the grant date.

2025, we granted 1,550,000 RSUs with a weighted-average grant date fair value of $ 0.96 .

Total stock-based compensation expense related

to the RSUs was $ 205,874 for the year ended December 31, 2025.

As of December 31, 2025, there was unrecognized compensation expense of

$ 1,282,126 with a weighted average recognition period of 3.45 years related to the RSUs.

12 – COMMITMENTS AND CONTINGENCIES

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.

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

45 unchanged sentences

enable us to recover a portion of any future amounts paid.

13 – LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT

payable was as follows:

OF LOAN PAYABLE

Effective Interest Rate

December 31, 2024

December 31, 2023

3.62 % – 100.00 %+

Less current portion

( 2,674,090 )

( 1,856,245 )

Long term loans payable

subsidiaries are borrowers under certain term loans.

These term loans require monthly principal and interest payments.

loans are secured by various assets owned by our subsidiaries.

We recorded aggregate interest expense of these term loans of $ 4,547

for the years ended December 31, 2024 and 2023, respectively.

Accrued interest for the loans was zero

as of December 31, 2024 and 2023.

The aggregate effective interest rate of the terms loans was 3.62 %

for the year ended December 31, 2024.

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 us and our wholly owned subsidiaries, Talatek, LLC and True

Digital Security, Inc.

This loan was repaid in full in 2023.

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 us and our wholly owned subsidiaries,

Talatek, LLC and True Digital Security, Inc.

This loan was repaid in full in 2023.

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

The business loan carried an interest rate of 53.44 % per annum and was payable in

52 weekly installments of $ 53,731 .

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 years

ended December 31, 2024 and 2023, we recorded interest expense of $ 564,529 and $ 200,881 , respectively.

connection with the business loan, we entered into a fee agreement pursuant to which we issued 133,334 shares 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.

March 28, 2024, under a troubled debt restructuring, we entered into a Business Loan and Security Agreement (the “Loan Agreement”

with LendSpark Corporation (the “Lender”), pursuant to which we obtained a restructured loan with a principal amount of $ 2,200,000

(the “Restructured Loan”) from the Lender.

Pursuant to the Loan Agreement, we paid the Lender a $ 44,000 origination fee.

The Restructured 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.

to the Loan Agreement, we granted the Lender a security interest in all if our assets and the assets of our U.S.

subsidiaries (the

“Collateral”) that is secondary to the security interest held by Aion Financial Technologies, Inc.

Upon the occurrence of an event of default, the

Lender may, among other things, accelerate the Loan and declare all obligations immediately due and payable or take possession of

the Collateral.

connection with the Restructured 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, as partial consideration for the Lender’s agreement to enter into the Loan Agreement and extend

credit to us.

The Fee Agreement contains customary representations, warranties, agreements and obligations of the parties.

year ended December 31, 2024, we recorded interest expense of $ 683,480 .

This loan was repaid in full on March 26, 2025.

June 2024, we entered into a Subordinated Business Loan and Security Agreement with Agile Capital Funding, LLC

(“Agile”), pursuant to which we obtained a loan with a principal amount of $ 2,000,000

plus an administrative agent fee paid of $ 100,000 .

On March 28, 2024, under a troubled debt restructuring, we entered into a Business Loan and Security

Agreement (the “Loan Agreement”) with LendSpark Corporation (the “Lender”), pursuant to which we obtained a restructured

loan with a principal amount of $ 2,200,000 (the “Restructured Loan”) from the Lender.

In connection with the Restructured

Loan, we entered into a Fee Agreement with the Lender, pursuant to which we issued 100,000 shares of our Common Stock, as partial consideration

for the Lender’s agreement to enter into the Loan Agreement and extend credit to us.

The Restructured Loan bore interest at a rate

of 51.73 % per annum and was payable in 52 weekly installments of $ 53,308 , commencing on April 5, 2024.

We recorded interest expense of

$ 54,561 and $ 1,179,938 for the years ended December 31, 2025 and 2024, respectively.

The Restructured Loan was repaid in full on March

June 2024, we entered into a Subordinated Business Loan and Security Agreement (“Subordinated Business Loan Agreement”) with

Agile Capital Funding, LLC (“Agile”), pursuant to which we obtained a loan with a principal amount of $ 2,000,000 plus an

administrative agent fee paid of $ 100,000 (“Subordinated Business Loan”).

The Subordinated Business Loan was in excess of

per annum and is payable in 30 weekly installments.

The first four installments due were $ 75,000

followed by 26 installments of $ 103,154 .

100 % per annum and was payable in 30 weekly installments.

The first four installments due were $ 75,000 followed by 26 installments of

For the year ended December 31, 2024, we recorded interest expense of $ 1,026,058 .

to the Subordinated Business Loan Agreement, we granted Agile a security interest in the Collateral that is tertiary to the security

interest held by Aion and LendSpark.

Upon the occurrence of an event of default, Agile may, among other things, accelerate the

Subordinated Business Loan and declare all obligations immediately due and payable or take possession of the Collateral.

proceeds from the Subordinated Business Loan for general corporate purposes, which includes working capital, capital expenditures,

and repayment of debt.

This loan was repaid in full in February

3 unchanged sentences

matured on January 1, 2025, and was repaid in full.

January 31, 2024, we entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with 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 on

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

used proceeds from the Loan and Security Agreement to repay our business loan entered into November 2023 and may use for general corporate

purposes, which includes working capital, capital expenditures, and repayment of debt.

For the year ended December 31, 2024, we recorded

interest expense of $ 374,521 .

Accrued interest as of December 31, 2024 was zero .

November 2024, we entered into an Intellectual Property Buy-Back Purchase Agreement, pursuant to which we reacquired vCISO, LLC in exchange

for a Promissory Note with a face value of $ 1,020,000 and interest of 8.00 % per annum.

The Promissory Note was scheduled to mature in

November 2025.

On August 5, 2025, the Promissory Note together with $ 15,729 of accrued and unpaid interest were converted to Series A

Preferred Stock, and the Promissory Note was fully extinguished.

Refer to Note 10, Stockholders’ Equity and Temporary Equity, for

further discussion.

For the years of December 31, 2025 and 2024, we recorded interest expense of $ 66,404 and $ 11,136 , respectively.

interest payable as of December 31, 2025 and 2024, was $ 0 and $ 11,136 , respectively.

of December 31, 2025 and 2024, term loans were comprised of the following:

OF TERM LOANS

4.75 % to 6.00 %

current portion

( 2,674,090 )

Loans payable, net of

current portion

January 31, 2024, we entered into a Loan and Security Agreement (the “2024 Loan and Security Agreement”) with Aion, pursuant

to which we may borrow up to $ 3,500,000 .

The amount available for borrowing at any one time was limited to 80 % of our eligible accounts

The 2024 Loan and Security Agreement had an interest rate of 19.25 % per annum (based on a 360-day year), payable on the first

business day of each month following the accrual thereof.

The 2024 Loan and Security Agreement, together with accrued and unpaid interest

thereon, was due on January 30, 2025 (the “Maturity Date”).

April 14, 2025, we entered into a Loan and Security Agreement (the “2025 Loan and Security Agreement”) with Aion to replace

the 2024 Loan and Security Agreement, pursuant to which we may borrow up to $ 3,500,000 .

The amount available for borrowing at any one

time is limited to 85 % of our eligible accounts receivable.

The 2025 Loan and Security Agreement bears interest at a rate of 18.00 % per

annum (based on a 360-day year), payable on the first business day of each month following the accrual thereof.

The 2025 Loan and Security

Agreement, together with accrued and unpaid interest thereon, is due on April 14, 2026 (the “Maturity Date”).

Upon providing

30 days written notice we may terminate the 2025 Loan and Security Agreement, subject to an early termination fee of $ 35,000 .

occurrence of an “Event of Default” (as defined in the 2025 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 2025 Loan

and Security Agreement is secured by our assets.

relation to the Loan and Security Agreements, we recorded interest expense of $ 308,485 and $ 374,521 during the years ended December 31,

2025 and 2024, respectively.

Accrued interest payable as of December 31, 2025 and 2024 was $ 1,086 and $ 0 , respectively.

As of December

31, 2025 and 2024, the Loan and Security Agreement outstanding balance was $ 2,172,667 and $ 1,957,938 , respectively.

Notes Payable

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.

& Company Convertible Note

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

25, 2025, we entered into Amendment #1 to this convertible note, which extended the maturity date of the convertible note to March 20,

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

On August 5, 2025, the

principal amount of $ 5,000,000 , together with $ 1,180,554 of accrued and unpaid interest payable under the convertible note were converted

into shares of Series A Preferred Stock, and the convertible note was fully extinguished.

Refer to Note 9, “Related Party Transactions”

for further details regarding this convertible note.

Associates Convertible Notes

June 2023, we issued an unsecured convertible note payable 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, was 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 .

June 2024, we entered into Amendment #1 to extend the maturity date of the $ 1,050,000 unsecured convertible note to December 15, 2024.

In exchange for an extension of the maturity date, we agreed to repay on September 30, 2024 , all accrued, but unpaid interest as of June

30, 2024 on the convertible note.

June 2024, we entered into Amendment #1 to extend the maturity date of the $ 1,050,000 unsecured convertible note payable to December

In exchange for an extension of the maturity date, we agreed to repay on September 30, 2024 , all accrued, but unpaid interest

as of September 30, 2024 on the convertible note payable.

All remaining accrued but unpaid interest was due at maturity on December 15,

December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,050,000 unsecured convertible note to December 15,

In exchange for the extension of the maturity date, interest beginning from the date of Amendment #2 increased to 12.00 % per annum

and $ 25,000 of accrued interest to be repaid on or before December 31, 2024, with remaining accrued interest due on or before March 31,

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 but unpaid interest thereon into shares of our common stock at a conversion price of $ 18.00 per share.

During the years ended

December 31, 2024 and 2023, we recorded interest expense of $ 500,000 and $ 388,888 , respectively.

Accrued interest as of December 31,

December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,050,000 unsecured convertible note payable to December

In exchange for the extension of the maturity date, interest beginning from the date of Amendment #2 increased to 12.00 % per

annum and $ 25,000 of accrued interest was to be repaid on or before December 31, 2024, with the remaining accrued interest due on or

before March 31, 2025.

On August 5, 2025, the principal amount of $ 1,050,000 convertible note payable together with $ 16,191 of accrued

and unpaid interest payable under the convertible note were converted into Series A Preferred Stock, and the convertible note was fully

extinguished.

Refer to Note 10, “Stockholders’ Equity and Temporary Equity,” for further discussion.

We recorded interest

expense of $ 110,070 and $ 156,314 for the years ended December 31, 2025 and 2024, respectively.

Accrued interest payable as of December

31, 2025 and 2024 was $ 0 and $ 163,165 , respectively.

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 12, 2024 .

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.

We recorded interest expense of $ 26,983 for the year ended December 31, 2023.

Accrued interest

as of December 31, 2023 was $ 26,983 .

June 2024, we entered into Amendment #1 to extend the maturity date of the $ 1,000,000 unsecured convertible note to December 15, 2024.

In exchange for an extension of the maturity date, we agreed to repay on September 30, 2024 , all accrued, but unpaid interest as of June

30, 2024 on the convertible note.

October 2023, we issued an unsecured convertible note payable 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 was due on October 12, 2024 .

June 2024, we entered into Amendment #1 to extend the maturity date of the $ 1,000,000 unsecured convertible note payable to December

In exchange for an extension of the maturity date, we agreed to repay on September 30, 2024 , all accrued, but unpaid interest

as of September 30, 2024 on the convertible note payable.

All remaining accrued, but unpaid interest was due at maturity on December

December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,000,000 unsecured convertible note to December 15,

In exchange for the extension of the maturity date, interest beginning from the date of Amendment #2 increased to 12.00 % per annum

and $ 25,000 of accrued interest to be repaid on or before December 31, 2024, with remaining accrued interest due on or before March 31,

November 2024, we entered into an Intellectual Property Buy-Back Purchase Agreement (the “Buy-Back Agreement”), pursuant

to which we reacquired vCISO, LLC in exchange for a Promissory Note with a face value $ 1,020,000 and bears interest of 8.00 % per annum.

The Promissory Note matures in November 2025.

We may not prepay any principal amount due under this Promissory Note without the consent

of the holder.

For the year-ended December 31, 2024, we recorded interest expense of $ 11,136 , and accrued interest as of December 31,

2024 was $ 11,136 .

December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,000,000 unsecured convertible note payable to December

In exchange for the extension of the maturity date, $ 25,000 of accrued interest was to be repaid on or before December 31,

2024, with remaining accrued interest due on or before March 31, 2025.

On August 5, 2025, the principal amount of $ 1,000,000 convertible

note payable together with $ 15,420 of accrued and unpaid interest payable under the unsecured convertible note were converted into Series

A Preferred Stock, and the unsecured convertible note was fully extinguished.

Refer to Note 10, “Stockholders’ Equity and

Temporary Equity,” for further discussion.

We recorded interest expense of $ 81,083 and $ 137,220 for the years ended December 31,

2025 and 2024, respectively.

Accrued interest payable as of December 31, 2025 and 2024 was $ 0 and $ 164,307 , respectively.

Notes Payable and Warrants

December 2024, we entered into a Securities Purchase Agreement (the “Agreement”) with several purchasers (the “Purchasers”).

Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate of up to $ 8,125,000 , including convertible notes and warrants

Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate of up to $ 8,125,000 of convertible notes payable and warrants

to purchase our Common Stock.

The convertible notes have a face value of up to $ 8,125,000 and was subject to an original issue discount

The convertible notes do not bear a stated rate of interest and mature one year from the date of issuance.

The effective interest

rate of these convertible notes exceeds 100 % per annum.

At any time prior to or on the maturity date, the Purchasers, may in part or

in whole convert the outstanding principal amount into shares of our common stock at a Conversion Price equal to 90 % of the lowest volume

weighed average price of our common stock during the ten Trading Day period immediately preceding the Conversion Date.

At no time shall

the Conversion Price be below $ 0.394 per share.

Agreement initially funded us with gross proceeds of $ 3,125,000 .

Funding of the remaining $ 5,000,000 was contingent upon the effectiveness

of a change in majority of directors of CISO Global, which occurred on January 7, 2025, at which time we received the remaining

unfunded amount.

issued 6,500,000

warrants pursuant to the Agreement to purchase shares of our common stock with an exercise price of $ 1.00

initially recorded these convertible notes at a fair value of zero , recognized the fair value of a derivative liability of $ 1,509,844 ,

and recorded a loss of $ 1,022,650 upon issuance of the Agreement, as our issuances costs exceeded the fair value of the convertible notes.

The allocation of fair value to the convertible notes was made on a relative fair value basis as the free-standing warrants issued in

connection with the Agreement are equity classified.

We accreted interest expense using the effective interest method over the expected

term of the Agreement through December 31, 2024.

For the year ended December 31, 2024, we accreted interest expense of $ 2 .

conversion feature of the Agreement was determined to be an embedded derivative requiring bifurcation accounting as (1) the feature is not clearly and

closely related to the debt host and (2) the feature meets the definition of a derivative under ASC 815 and has been record at

fair value on our balance sheet.

Subsequent changes in the fair value of embedded derivative flows through the Statements of Operations.

proceeds from the Agreement will be used to repay outstanding principal amounts of short-term indebtedness and for general corporate

purposes, which may include working capital, capital expenditures, research and development, acquisitions of additional companies or

technologies, and investments.

minimum payments under the above debt instruments following the year ended December 31, 2024, are as follows:

OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT

Total future minimum payments

( 3,158,266 )

The convertible notes payable had a face value of up to $ 8,125,000 and were subject to an original issue

discount of 20 %.

The convertible notes payable did not bear a stated rate of interest and matured one year from the date of issuance.

The effective interest rate of these convertible notes exceeded 100% per annum.

At any time prior to or on the maturity date, the Purchasers,

could in part or in whole convert the outstanding principal amount into shares of our Common Stock at a conversion price equal to 90 %

of the lowest volume weighed average price of our Common Stock during the ten trading day period immediately preceding the conversion

At no time could the conversion price be below $ 0.394 per share.

Agreement initially funded us with gross proceeds (prior to the 20 % original issue discount) of $ 3,125,000 in December 2024, and the

remaining $ 5,000,000 (prior to the 20 % original issue discount) was funded upon the effectiveness of a change in a majority of our directors,

which occurred on January 7, 2025.

The proceeds from the Agreement were used to repay outstanding principal amounts of short-term indebtedness

and for general corporate purposes, which included working capital and research and development.

Pursuant to the Agreement we issued

warrants to the Purchasers to purchase up to 6,500,000 shares of our Common Stock with an exercise price of $ 1.00 per share.

recorded these convertible notes payable at fair value and recognized the fair value of the conversion feature as a derivative liability

upon each tranche of funding.

The allocation of fair value to the convertible notes and warrants was made on a relative fair value basis

as the free-standing warrants are equity classified.

conversion feature of the notes payable was determined to be an embedded derivative requiring bifurcation accounting as (1) the feature

is not clearly and closely related to the debt host and (2) the feature meets the definition of a derivative under ASC 815.

the fair value of the embedded derivative were recognized in the consolidated statements of operations and comprehensive loss in change

in fair value of derivative liability.

the year ended December 31, 2025, $ 8,125,000 of the convertible notes payable issued under the Agreement were converted into 15,151,706

shares of our Common Stock.

We recognized losses on the conversion of the convertible notes of $ 863,669 for the year ended December 31,

2025, which is the intrinsic value of the shares issued upon conversion.

For the year ended December 31, 2025, we recognized interest

expense of $ 7,898,323 related to the accretion of the convertible notes payable and the amortization of debt issuance costs.

As of December

31, 2025, no convertible notes payable issued under the Agreement remained outstanding and the derivative liability has been derecognized.

December 31, 2025, the principal payments due under the above term loans and line of credit were as follows:

SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT

Total future principal payments

current portion

( 2,256,650 )

term debt, net

Debt, net of current

the years ended December 31, 2025 and 2024, we recognized additional ROU assets and lease liabilities of $ 0 and $ 60,215 , respectively.

We elected to not recognize ROU assets and lease liabilities arising from short-term office leases, leases with initial terms of twelve

months or less (deemed immaterial) on the consolidated balance sheets.

measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using its estimated incremental

borrowing rate.

The weighted average incremental borrowing rate applied was 11.54 %.

As of December 31, 2024, our leases had a remaining

weighted average term of 3.22 years.

When measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using its estimated

incremental borrowing rate.

The weighted average incremental borrowing rate applied was 11.54 % for the years ended December 31, 2025

As of December 31, 2025 and 2024, our leases had a remaining weighted average term of 2.22 years and 3.22 years, respectively.

following table presents net lease cost and other supplemental lease information:

2 unchanged sentences

December 31, 2024

Operating lease cost (cost resulting from lease payments)

Short term lease cost

Net lease cost

Operating lease – operating cash flows (fixed payments)

Operating lease – operating cash flows (liability reduction)

Non-current leases – right of use assets

Current liabilities – operating lease liabilities

Non-current liabilities – operating lease liabilities

lease cost (cost resulting from lease payments)

Total lease cost

Cash paid for amounts included in the measurement

of lease liabilities

minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the year ended December

1 unchanged sentence

OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES

Operating Leases

Total future minimum lease payments

Amount representing interest

Present value of net future minimum lease payments

Amount representing

Present value of

net future minimum lease payments

15 – FAIR VALUE MEASUREMENT

following table sets forth our material liabilities measured and recorded at fair value on a recurring basis:

OF FAIR VALUE MEASUREMENT

December 31, 2024

Quoted prices in active markets for identical assets

Significant other observable inputs

Significant unobservable inputs

estimated fair value of the conversion feature of the derivative liability was based on Monte Carlo simulations, a valuation

The derivative liability component of the convertible notes was classified as Level 3 due to significant unobservable inputs.

the year ended December 31, 2025, the derivative liability was derecognized following the conversion of the convertible notes into shares

of Common Stock.

following table sets forth as of December 31, 2024 the carrying value of the derivative liability that was measured and recorded at fair

value on a recurring basis:

SCHEDULE OF FAIR VALUE MEASUREMENT

prices in active markets for identical assets

other observable inputs

unobservable inputs

Current liabilities

Derivative liability

Total liabilities measured at fair value

estimated fair value of the conversion feature of the derivative liability is based on Monte Carlo simulations, a traditional valuation

The derivative liability component of the convertible notes are classified as Level 3 due to significant unobservable inputs.

liabilities measured at fair value

16 – INCOME TAXES

No current or deferred income tax benefit or expense was recognized in the years ended December 31, 2024 and 2023.

current or deferred income tax benefit or expense was recognized in the years ended December 31, 2025 and 2024.

reconciliation of the statutory federal income tax benefit to actual tax benefit for the years ended December 31, 2025 and 2024 is as

SCHEDULE OF STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT

Year Ended December 31,

Computed tax benefit at statutory rate

Ended December 31,

Computed tax benefit at statutory

Stock-based compensation

Other permanent adjustments

Change in valuation allowance

Return to provision adjustments

Return to provision

Effective tax rate

2 unchanged sentences

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Year Ended December 31,

Ended December 31,

Deferred tax assets:

Intangible assets

Allowance for doubtful accounts

Allowance for credit

Net operating loss carryforwards

Stock-based compensation

Accounts payable and accrued liabilities

Accounts payable and

accrued liabilities

Goodwill impairment

Total deferred tax assets

Valuation allowance

( 30,608,487 )

( 31,165,400 )

Net deferred income taxes

deferred income taxes

Deferred tax liabilities

1 unchanged sentence

Prepaid expenses

Total deferred tax liabilities

Net deferred tax liabilities

account for deferred taxes under ASC 740, Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by

a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized.

Right-of-use assets

deferred tax liabilities

account for deferred taxes under ASC 740, Income Taxes , which requires a reduction of the carrying amounts of deferred tax assets

by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized.

the need to establish valuation allowances for deferred tax assets is assessed periodically based on the ASC 740 more-likely-than-not

12 unchanged sentences

During the years ended December 31, 2025 and 2024,

respectively, the valuation allowance increased by $ 4,712,900 and $ 22,344,508 , respectively.

respectively, the valuation allowance decreased by $ 556,913 and increased by $ 4,712,900 , respectively.

of December 31, 2025, we had approximately $ 43,757,603 of consolidated federal net operating loss carryforwards and $ 41,699,531 of apportioned

4 unchanged sentences

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.

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.

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.

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.

9 unchanged sentences

sponsor 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 matched employee contributions on a discretionary basis in 2023 and amended

our plan in 2024 to remove the matching feature.

Expenses for our matching contributions were zero and $ 637,365 for the years-ended December

31, 2024 and 2023.

employees, who may contribute up to 80 %

of their compensation, subject to limitations established by the Internal Revenue Code.

We amended our plan in 2024 to remove any

matching feature.

No matching contributions were made for the years ended December 31, 2025 and 2024.

18 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

4 unchanged sentences

upon demand and bear minimal risk.

single customer represented over 10 % of our total revenue for the years ended December 31, 2024 and 2023.

and Accounts Receivable

the year ended December 31, 2025, the Company had one customer that represented approximately 10 % of total revenue.

For the year ended

December 31, 2024, no customer represented 10 % or more of total revenue.

of December 31, 2025, the Company had one customer that represented approximately 17 % of our accounts receivable balance.

As of December

31, 2024, two customers represented approximately 13 % and 11 %, respectively, of our accounts receivable balance.

19 – ACCUMULATED OTHER COMPREHENSIVE LOSS

following table presents AOCI activity in equity:

OF ACCUMULATED OTHER COMPREHENSIVE INCOME

Foreign Currency Translation Adjustments

Balance as of December 31, 2022

Other comprehensive income

Amounts reclassified from AOCI

SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME

Currency Translation Adjustments

Balance as of December 31, 2023

Other comprehensive income

Amounts reclassified from AOCI

Amounts reclassified from

( 1,320,177 )

1 unchanged sentence

Balance as of December 31, 2024

20 – SEGMENT INFORMATION

Chief Operating Decision Maker (“CODM”), as of December 31, 2024, was our Chief Executive Officer.

Our CODM evaluates the

performance of and allocates resources to our segment based on our consolidated net loss and earnings before interest, taxes, depreciation

and amortization (Segment EBITDA).

Segment EBITDA is defined as segment revenue less operating costs and expenses, excluding depreciation

and amortization interest income or expense (net), provision or benefit for income taxes, change in fair value of derivative liabilities,

loss on issuance of convertible notes, impairment of goodwill and intangible assets, and stock-based compensation expense.

Segment EBITDA serves as a measure that assists our CODM and our investors in comparing our segment performance on a consistent basis.

loss and Segment EBITDA are used to monitor budgeted versus actual results.

Additionally, review of budgeted versus actual results is

used in assessing performance of the segment.

CODM does not use assets by segment to evaluate performance or allocate resources;

therefore, we do not provide disclosure of assets

following table presents our segment information for the periods indicated and, because we currently only have one segment, net loss

is identical to the information presented in our “Consolidated Statement of Operations” above:

OF SEGMENT INFORMATION

Year Ended December 31,

Net loss from continuing operations

$ ( 19,905,601 )

$ ( 64,984,498 )

Impairment of goodwill

Impairment of intangible assets

Loss on issuance of convertible notes

Interest expense, net

Depreciation and amortization

Stock-based compensation

Change in fair value of derivative liabilities

Segment EBITDA

$ ( 3,339,465 )

$ ( 11,717,372 )

20 – SUBSEQUENT EVENTS

January 10, 2025, we received a notification letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC

(“Nasdaq”) indicating that, since we have not yet held an annual meeting of stockholders within twelve months of the end

of its December 31, 2023 fiscal year, we are out of compliance with the Nasdaq rules for continued listing (Listing Rules 5620(a)

and 5810(c)(2)(G)).

The notification letter has no immediate effect on the listing of our securities on the Nasdaq Capital

the applicable Nasdaq rules, we had 45 calendar days to submit a plan to regain compliance.

If Nasdaq accepted our plan, Nasdaq can grant

an exception of up to 180 calendar days from our most recent fiscal year end, or until June 30, 2025, to regain compliance.

We filed a definitive proxy statement on March 5, 2025 for an annual meeting to be held on April 25, 2025 to regain compliance with

the applicable Nasdaq Listing Rules.

On March 25, 2025, we entered

into Amendment Number One to the Purchase Agreement with Hensley & Company dba Hensley Beverage Company, a related party, pursuant to which

we extended the Maturity Date to March 20, 2026.

On January 1, 2025 and March 26,

2025, we repaid in full the outstanding balances of our loans with Agile and LendSpark, respectively, our highest interest rate term

January 12, 2026, we filed a Certificate of Amendment with the Secretary of State of the State of Delaware to our Amended and Restated

Certificate of Incorporation, as amended (the “Certificate of Amendment”), to increase the number of authorized shares of

our Common Stock, par value $ 0.00001 per share, from 300,000,000 to 1,300,000,000 .

The Certificate of Amendment was approved by our stockholders

at the 2025 Annual Meeting of Stockholders held on December 10, 2025, as reported on the Current Report on Form 8-K, filed with the Securities

and Exchange Commission on December 16, 2025.

On February 13, 2026,

we filed a Form S-8 Registration Statement with the SEC to register an aggregate of 10,000,000

additional shares of our common stock available for issuance under our 2023 Equity Incentive Plan, as amended (the “Plan”).

The additional shares are being registered in addition to our common stock previously registered for issuance under the Plan pursuant

to our Registration Statement on Form S-8 filed with the Commission on October 31, 2023.

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