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Item 1A. Risk Factors

2025-03-31 compared with 2024-04-16 · 677 added, 484 removed, 362 unchanged (76% of the section changed)

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Related to Our Business and Industry

will need to raise capital in order to realize our business plan and growth strategy, the failure of which could adversely impact

will need to raise capital to realize our business plan and growth strategy, the failure of which could adversely impact

our operations.

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that arise or expand our business, all of which could adversely impact us.

will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.

will need to improve the size and capabilities of our organization, and we may experience difficulties in managing this growth.

depend on key personnel who would be difficult to replace, and our business plans will likely be harmed if we lose their services

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businesses that provide comparable or complementary services.

Our ability to grow is limited if we fail to identify and consummate

acquisitions.

intend to grow our client base significantly through acquisitions of other service providers.

If we fail to retain existing clients

and attract new clients through acquisitions, we may never achieve profitability.

business strategy may impose limitations in our ability to accurately forecast future revenue and operating results.

Our sales cycles can be long and unpredictable, and our sale efforts require considerable time and expense.

Because we recognize revenue from subscriptions to our solutions over the term of the subscription, downturns or

upturns in new business will not be immediately reflected in our operating results.

We provide service level commitments under some of our customer contracts.

If we fail to meet these contractual commitments,

we could be obligated to provide partial refunds, or our customers could be entitled to terminate their contracts and our business would

We provide service level commitments under some of our customer contracts.

If we fail to meet these contractual commitments,

we could be obligated to provide partial refunds, or our customers could be entitled to terminate their contracts and our business would

future results may be affected by various legal and regulatory proceedings and legal compliance risks, including those involving

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or other matters.

are subject to risks from operating internationally.

may be subject to risks from operating internationally.

operations in certain emerging markets expose us to political, economic and regulatory risks.

economic conditions in the United States and international economies may adversely impact our business operating units.

economic conditions in the United States may adversely impact our business and operating results.

of network or information technology security could have an adverse effect on our business.

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materially affected if our estimates prove to be inaccurate.

auditor’s opinion on our audited consolidated financial statements for the year ended December 31, 2023, included in this

annual report on Form 10-K, contain an explanatory paragraph relating to our ability to continue as a going concern.

auditor’s opinion on our audited consolidated financial statements for the year ended December 31, 2024, included in this annual

report on Form 10-K, contain an explanatory paragraph relating to our ability to continue as a going concern.

Related to Our Common Stock

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sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

we issue additional shares in the future, it will result in the dilution of our existing stockholders.

we issue additional shares in the future, it will result in a dilution of our existing stockholders.

are eligible to be treated as an “emerging growth company,” as defined in the JOBS Act, and we cannot be certain if the

reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

Our directors, a former director and executive officers beneficially own

a substantial majority of our outstanding capital stock and will have the ability to control our affairs.

directors, a former director and executive officers beneficially own a substantial majority of our outstanding capital stock and

will have the ability to control our affairs.

failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.

Following a reverse

stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and

may not satisfy the investing requirements of those investors.

Consequently, the trading liquidity of our common stock may not improve.

a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors,

and may not satisfy the investing requirements of those investors.

Consequently, the trading liquidity of our common stock may not

do not intend to pay dividends on our common stock.

business could be negatively impacted by shareholder activism.

business could be negatively impacted by stockholder activism.

share price may be volatile, and you may be unable to sell your shares.

Related to Our Business and Industry

will need to raise capital in order to realize our business plan and growth strategy, the failure of which could adversely impact our

growth strategy is based upon increasing the number of our clients and our consolidated revenue by making successful acquisitions and

integrating businesses that provide comparable or complementary cyber security services.

As of December 31, 2023, our business was not

Without adequate funding, a significant increase in revenue, and continued successful integration of our acquired targets,

we may not be able to achieve profitability in the existing lines of business and attract further capital.

As of March 31, 2024, we had

available cash resources of approximately $1,575,856.

expect to continue to finance our operations with available net operating cash flows and will need to raise additional capital in the

future by issuing equity or other forms of securities, which could have significant dilutive impact on the ownership interest of existing

stockholders.

Furthermore, any newly issued securities could have rights, preferences, and privileges senior to those of our existing

common stock.

may have difficulty obtaining additional funds as and when needed, and we may have to accept terms that would adversely affect our stockholders.

In addition, any adverse conditions in the credit and equity markets may adversely affect our ability to raise funds when needed.

failure to achieve adequate funding will delay our acquisition efforts and could lead to abandonment of one or more of our acquisition

initiatives, as well as prevent us from responding to competitive pressures or take advantage of unanticipated acquisition opportunities.

Any additional equity financing will likely be dilutive to stockholders, and certain types of equity financing, if available, may involve

restrictive covenants or other provisions that would limit how we conduct our business or finance our operations.

will need to raise capital to realize our business plan and growth strategy, the failure of which could adversely impact our

Our growth strategy focuses

on expanding our client base and increasing consolidated revenue through strategic acquisitions and seamless integration of businesses

offering complementary cybersecurity services.

As of December 31, 2024, our business has not yet achieved profitability.

To reach profitability

and sustain long-term growth, we require adequate funding, significant revenue growth, and continued successful integration of our acquisitions.

As of March 24, 2025, we maintained cash resources of approximately $250,000.

We plan to fund operations

through a combination of available net operating cash flows and future capital raises, which may include issuing equity or other securities.

This approach may result in dilution for existing stockholders.

Any newly issued securities may carry rights, preferences, or privileges

that differ from those of our existing common stock.

incurred significant operating losses during the years ended December 31, 2024 and December 31, 2023, and we have limited cash flow.

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and cannot obtain additional financing, we may need to cut back or curtail our expansion plans.

will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.

our acquisition strategies develop, we must carefully integrate managerial, operational, sales, marketing, financial, and other personnel

in the expanded organization and manage costs.

Future growth will impose significant added responsibilities on members of management,

including the following:

integrating, managing, and motivating qualified employees, particularly strong sales force and cybersecurity talent;

post-acquisition integration effectively, and managing integration costs;

our operational, financial, and management controls, reporting systems, and procedures.

future financial performance and our ability to commercialize our strategic acquisitions will depend, in part, on our ability to effectively

manage any future growth.

Our management may also have to divert a disproportionate amount of its attention away from day-to-day activities

in order to devote a substantial amount of time to managing these growth activities.

This lack of long-term experience working together

may adversely impact our senior management team’s ability to effectively manage our business and growth.

will need to improve the size and capabilities of our organization, and we may experience difficulties in managing this growth.

As we shift our growth

strategy from acquisition-driven expansion to a focus on organic growth, we recognize the importance of effectively integrating and scaling

our operations.

This transition requires the careful alignment of managerial, operational, sales, marketing, financial, and other key

functions across the organization.

Successfully managing these dynamics is critical to sustaining our growth trajectory and enhancing

long-term stockholder value.

Our ability to achieve

future growth will depend on the following factors:

Attracting, integrating, developing, and retaining skilled personnel across all functions, with a particular focus on building a strong,

high-performing salesforce and expanding our cybersecurity expertise.

Executing efficient post-acquisition integration processes where applicable, while maintaining cost discipline and optimizing operational

Strengthening our operational, financial, and management systems to support scalability, ensure transparency, and improve overall business

We anticipate that these

growth initiatives will place increasing demands on our management team, including the need to balance day-to-day operational responsibilities

with the strategic oversight required to guide expansion.

As our leadership team continues to evolve, limited long-term experience working

together may present challenges to operational cohesion.

depend on key personnel who would be difficult to replace, and our business plans will likely be harmed if we lose their services or

cannot hire additional qualified personnel.

success depends substantially on the efforts and abilities of our senior management and executive officers.

We currently do not maintain

key man insurance for any of our senior management or key personnel.

The competition for qualified management and key personnel

The loss of services of one or more of our key employees, or the inability to hire, train, and retain key personnel, especially

executive managers with cybersecurity industry knowledge, could delay the execution of new acquisitions and launch of new service programs,

disrupt our business, and interfere with our ability to execute our business plan.

Our business is significantly

dependent on the continued efforts and abilities of our senior management and executive officers.

The loss of services of one or more

of these key individuals, or our inability to attract, train, and retain key personnel, could materially disrupt our operations, delay

strategic initiatives, and hinder our ability to execute our business plan.

At present, we do not

maintain key man insurance for any members of our senior management or key personnel.

The competition for qualified management and personnel,

particularly those with specialized expertise in the cybersecurity industry, is intense.

If we were to lose the services of any of our

key executives, or if we are unable to successfully recruit, retain, and develop personnel with the necessary skills and industry knowledge,

our ability to continue executing on our acquisition strategy and service program development could be adversely impacted.

such a loss could have a significant effect on our ability to maintain and grow client relationships, which may negatively impact our

financial performance and long-term prospects.

We recognize the critical importance of having a strong and capable leadership team to execute our business strategy.

As such, we continue to explore options for mitigating these risks, including potential investments in succession planning and talent

However, there can be no assurance that we will be successful in securing or retaining the right talent, and any failure

to do so may materially affect our ability to achieve our objectives.

operate in an industry that is experiencing a shortage of qualified compliance and cybersecurity professionals.

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and retain key management and technical and sales personnel, our business would be negatively affected.

execute our growth strategy, we must continue to attract and retain highly skilled compliance and cybersecurity experts.

for these employees is intense, especially for compliance experts and cybersecurity professionals, as there is a global shortage of these

professionals who can provide the technical and strategic skills required for us to deliver high levels of services to our clients and

potential clients.

We may not be successful in attracting and retaining qualified employees.

We have from time-to-time experienced, and

we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications.

of the companies with which we compete for these highly skilled employees have greater resources than we have.

In addition, in making

employment decisions, particularly in the high-technology industry, job candidates often consider the value of the stock options, restricted

stock grants, or other stock-based compensation they are to receive in connection with their employment.

Declines in the value of our

stock could adversely affect our ability to attract or retain key employees and result in increased employee compensation expenses.

we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could

be severely harmed.

To execute our growth

strategy, attracting and retaining highly skilled compliance and cybersecurity experts remains critical.

The demand for these professionals

is intense, particularly given the global shortage of talent with the technical and strategic expertise required to deliver exceptional

services to our clients.

Our competitors, many

with greater resources, also seek to recruit skilled professionals, and compensation packages—particularly stock options and other

equity incentives—often play a significant role in attracting candidates.

We are mindful of the importance of offering competitive

compensation, but recognize that fluctuations in stock value can impact this dynamic.

We continually evaluate our compensation strategies

to ensure they align with market trends and support our long-term growth objectives.

depend on independent contractors to provide certain services for which we do not have the expertise internally.

Any compromise in the

service quality may delay our business processes and cause economic los s.

service quality may delay our business processes and cause economic loss.

currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors,

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that provide comparable or complementary services.

Our ability to grow is limited if we fail to identify and consummate acquisitions.

have completed the acquisition of certain complementary businesses, and we intend to consider additional potential strategic transactions,

which could involve acquisitions of businesses or assets, joint ventures, or investments in businesses or technologies that expand, complement,

or otherwise relate to our business.

We may also consider, from time to time, opportunities to engage in joint ventures or other business

collaborations with third parties.

Should our relationships fail to materialize into significant agreements, or should we fail to work

efficiently with these companies, we may lose sales and marketing opportunities and our business, results of operations, and financial

condition could be adversely affected.

have completed the acquisition and integration of several complementary businesses, and we intend to consider opportune additional

potential strategic transactions that enhance stockholder value, which could involve acquisitions of businesses or assets, joint

ventures, or investments in businesses or technologies that expand, complement, or otherwise relate to our business.

consider, from time to time, opportunities to engage in joint ventures or other business collaborations with third parties.

our relationships fail to materialize into significant agreements, or should we fail to work efficiently with these companies, we

may lose sales and marketing opportunities and our business, results of operations, and financial condition could be adversely

business acquisition creates risks such as, among others:

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Failure to do so could deprive us of the intended benefits of those acquisitions.

intend to grow our client base significantly through acquisitions of other service providers.

If we fail to retain existing clients and

attract new clients through acquisitions, we may never achieve profitability.

acquisition of other service providers, we will inherit an increasingly larger client base, which creates cross-selling and up-selling

opportunities.

We need high-quality service and exemplary client management to retain and grow our client base.

We also plan to launch

sales and marketing efforts, including trade show appearances, sales demos, and advertising campaigns in various forms to promote our

If our marketing efforts do not materialize, we may lose existing clients or fail to obtain new clients.

Our inability to

grow sales as we expand in operations may result in continuing losses, and we may not be profitable for an extended period of time.

addition, even if we are able to make future acquisitions, we will incur additional costs to consummate them, which may result in a shortage

in our capital resources.

We may also incur difficulties in integrating new businesses with our current operations.

business strategy may impose limitations in our ability to accurately forecast future revenue and operating results.

operating results are dependent on a variety of factors, including purchasing patterns of our clients, competitive pricing, debt servicing,

and general economic trends.

Our revenue and operating results may fluctuate if our sales targets are not met, new service offerings

receive poor client response, or client acquisition costs increase due to competition.

In addition to these factors, our acquisition

strategy may impose additional risks to the predictability of our operating results.

Revenue streams may be volatile due to the uncertainty

in identifying attractive acquisition candidates and our ability to consummate new acquisitions.

Unexpected expenses may be incurred

during due diligence and post-acquisition.

Management intends to manage risk carefully with the acquisitions;

however, there can be no

assurance that we will be able to identity and consummate acquisitions that improve our results of operations.

business strategy may impose limitations on our ability to accurately forecast future revenue and operating results.

Our operating results are subject to a variety of

factors that could cause our financial performance to fluctuate significantly.

These factors include, but are not limited to, fluctuations

in client demand, competitive pricing pressures, debt servicing obligations, and general economic conditions.

Our ability to achieve consistent

revenue growth is highly dependent on several key elements, including:

Demand and Sales Targets:

We may experience variability in our sales performance, which

could affect our ability to meet financial targets.

This is especially true if new service

offerings receive a poor response from clients or if client acquisition costs rise due to

increased competition in the market.

● Competition

and Market Positioning:

Intense competition within the cybersecurity and managed IT services

sector can lead to downward pressure on pricing, potentially affecting our profitability.

If we are unable to maintain or grow our market share through innovation or service differentiation,

our financial performance could be negatively impacted.

Growth Strategy:

Our growth is largely dependent on our ability to expand our client

base and increase revenue from existing clients through organic growth.

We face risks associated

with the execution of this strategy, including the challenge of effectively scaling our operations

to meet increasing demand and the potential for higher-than-expected client acquisition costs.

General economic conditions, including changes in client spending patterns or

economic downturns, may adversely impact demand for our services, which could result in lower

revenue growth or even a decline in revenue.

● Operational

and Execution Risks:

We may encounter unexpected operational or execution challenges,

such as the inability to hire and retain top talent or issues related to service delivery,

which could disrupt our growth trajectory.

Additionally, changes in regulatory requirements

or industry standards could affect our operations and increase compliance costs.

As we grow, we may incur additional debt to fund our operations or invest

in new capabilities.

This could result in increased interest expenses and the need to meet

debt covenants, which may limit our financial flexibility and affect our ability to pursue

growth initiatives.

While we have a robust strategy

in place to manage and mitigate these risks, there can be no assurance that we will successfully navigate the challenges associated with

organic growth.

We cannot guarantee that our efforts will result in sustainable revenue growth, improved profitability, or the achievement

of long-term financial objectives.

sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.

revenue recognition is difficult to predict because of the length and unpredictability of the sales cycle for our solutions, particularly

with respect to large organizations and government entities.

For example, in light of current macroeconomic conditions, we have observed

a lengthening of the sales cycle for some prospective customers that we attribute to higher cost-consciousness around IT budgets.

often view the subscription to our solutions as a significant strategic decision and, as a result, frequently require considerable time

to evaluate, test and qualify our solutions prior to entering into or expanding a relationship with us.

Large enterprises and government

entities in particular, often undertake a significant evaluation process that further lengthens our sales cycle.

Our direct sales team

develops relationships with our customers, and works with our channel partners on account penetration, account coordination, sales and

overall market development.

We spend substantial time and resources on our sales efforts without any assurance that our efforts will

produce a sale.

Security solution purchases are frequently subject to budget constraints, multiple approvals and unanticipated administrative,

processing and other delays.

As a result, it is difficult to predict whether and when a sale will be completed.

The failure of our efforts

to secure sales after investing resources in a lengthy sales process would adversely affect our business, operating results and financial

Our sales cycles are

often long and unpredictable, and our sales efforts require significant time, resources, and investment.

These factors introduce considerable

uncertainty into our ability to forecast revenue and operating results.

Specifically:

Length and Unpredictability of the Sales Cycle:

The sales cycle for our solutions, particularly with large enterprises and government

entities, can be extended due to the complex nature of the solutions we provide.

These customers typically require a significant amount

of time to evaluate, test, and qualify our solutions before committing to a purchase or expansion of the relationship.

In light of current

macroeconomic conditions, we have observed an increase in the length of the sales cycle, primarily driven by heightened cost-consciousness

around IT budgets.

As a result, prospective customers may delay or prolong their decision-making process, making it challenging to predict

when, or if, a sale will be finalized.

Challenges in Securing Sales:

Our sales efforts, which are carried out by both our direct sales team and channel partners, involve

substantial time and expense.

We invest considerable resources in developing relationships with customers, coordinating account penetration,

and driving overall market development.

However, there is no guarantee that these efforts will result in a sale.

The purchasing decisions

for security solutions are often subject to budget constraints, multiple levels of approval, and unanticipated delays in administrative

and processing steps, all of which contribute to the difficulty in predicting the timing of sales.

Impact on Financial Performance:

Given the length and unpredictability of our sales cycles, we may face challenges in accurately

forecasting revenue, particularly for large and government accounts.

The failure to close sales after investing significant resources

in a lengthy sales process could have a material adverse effect on our business, operating results, and financial condition.

Considering these factors, we cannot guarantee that we will successfully close sales in the anticipated timeframes,

and the uncertainty surrounding our sales cycle may affect our ability to achieve our revenue and financial objectives.

we recognize revenue from subscriptions to our solutions over the term of the subscription, downturns or upturns in new business will

not be immediately reflected in our operating results.

generally recognize revenue from customers ratably over the term of their subscription, which is generally one to three years.

a substantial portion of the revenue we report in each period is attributable to the recognition of deferred revenue relating to agreements

that we entered into during previous periods.

Consequently, any increase or decrease in new sales or renewals in any one period will

not be immediately reflected in our revenue for that period.

Any such change, however, would affect our revenue in future periods.

the effect of downturns or upturns in new sales and potential changes in our rate of renewals will not be fully reflected in our operating

results until future periods.

We may also be unable to timely reduce our cost structure in line with a significant deterioration in sales

or renewals that would adversely affect our business, operating results, and financial condition.

We recognize revenue

from customer subscriptions ratably over the term of their agreement, which generally spans one to three years.

As a result, a significant

portion of the revenue we report in any given period is derived from the recognition of deferred revenue related to agreements entered

into in prior periods.

This model presents the following risks:

Delayed Impact of Sales

Fluctuations:

Any increase or decrease in new sales or renewals in a given period will not be immediately reflected in our revenue

for that period.

Instead, the financial impact of these changes will be realized in future periods as the associated deferred revenue

is recognized.

Consequently, fluctuations in sales or renewals, particularly during periods of economic uncertainty, may not be fully

captured in our reported revenue until later, making it more difficult to assess our immediate financial performance.

Renewal Rates and Sales

Our revenue is also influenced by the rate of renewals, which can be unpredictable.

A decline in renewals or a decrease

in new sales would not immediately impact our reported revenue but could affect future revenue recognition.

Conversely, an increase

in sales or renewals will positively impact our future revenue but may not be reflected immediately in the current period’s results.

Operational Adjustments

and Cost Structure:

The delayed recognition of revenue can also affect our ability to quickly adjust our cost structure.

event of a significant downturn in sales or renewals, we may be unable to immediately reduce costs in line with revenue reductions,

which could negatively affect our profitability and financial condition.

As a result of these

factors, our ability to manage and adjust our operations in response to changes in sales or renewals may be hindered, potentially leading

to variability in our financial results from period to period.

We may also face challenges in maintaining profitability if revenue trends

do not align with our cost structure adjustments.

provide service level commitments under some of our customer contracts.

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obligated to provide partial refunds, or our customers could be entitled to terminate their contracts and our business would suffer.

of our customer agreements contain service level commitments, which contain specifications regarding the availability of our solutions

and our support services.

Failure of or disruption to our infrastructure or third-party hosting service providers could impact the performance

of our solutions and the availability of services to customers.

If we are unable to meet our stated service level commitments or if we

suffer extended periods of poor performance or unavailability of our solutions, we may be contractually obligated to provide affected

customers with credit, partial refunds or termination rights.

To date, there has not been a material failure to meet our service level

commitments, and we do not currently have any material liabilities accrued on our consolidated balance sheets for such commitments.

business, operating results, and financial condition would be adversely affected if we suffer performance issues or downtime that exceeds

the service level commitments under our agreements with our customers.

Certain of our customer

agreements include service level commitments, which specify the availability and performance of our solutions and support services.

to meet these commitments could have a material adverse effect on our business.

The following outlines key risks associated with our service

level commitments:

Failure to Meet Service Level Commitments:

Our infrastructure, or that of our third-party hosting service providers, could experience

disruptions, impacting the performance and availability of our solutions.

If we fail to meet the agreed-upon service levels, we may be

required to provide affected customers with credits, partial refunds, or even allow them to terminate their contracts.

Although we have

not experienced any material failures to meet our service level commitments to date, any significant downtime or poor performance beyond

agreed-upon service levels could negatively impact our reputation, customer retention, and financial results.

Adverse Business Impact:

Any failure to meet service levels could result in substantial operational challenges, including loss

of customer trust, which would adversely affect our business, operating results, and financial condition.

We may also face increased

costs related to crediting or refunding customers or managing customer contract terminations.

business is subject to the risks of warranty claims from real or perceived defects in our solutions or their misused by our customers

or third parties and provisions in certain agreements potentially expose us to substantial liability and other losses.

may be subject to liability claims for damages related to errors or defects in our solutions.

A material liability claim or other occurrence

that harms our reputation or decreases market acceptance of our solutions will harm our business and operating results.

Although we generally

have limitation of liability provisions in our terms and conditions of sale, they may not fully or effectively protect us from claims

as a result of federal, state or local laws or ordinances, or unfavorable judicial decisions in the United States or other countries.

The sale and support of our solutions also entails the risk of product liability claims.

We employ measures in the form of policy and

technical controls to limit unauthorized access to our solutions by our employees, customers and third-parties, however, these measures

may not fully or effectively protect our solutions from unauthorized access.

Additionally, we typically provide indemnification to customers,

partners or other third parties we do business with for certain losses suffered or expenses incurred as a result of third-party claims

arising from our infringement of a third party’s intellectual property.

We also provide unlimited liability for certain breaches

of confidentiality, as defined in our master subscription agreement.

We also provide limited liability in the event of certain breaches

of our master subscription agreement.

Certain of these contractual provisions survive termination or expiration of the applicable agreement.

To date, we have not incurred any material costs because of such obligations.

However, as we continue to grow, indemnification claims

against us for the obligations listed will increase.

When our customers or other third parties we do business with make intellectual

property rights or other indemnification claims against us, we will incur significant legal expenses and may have to pay damages, license

fees and/or stop using technology found to be in violation of the third party’s rights.

We may also have to seek a license for

the technology.

Such licenses may not be available on reasonable terms, if at all, and may significantly increase our operating expenses

or may require us to restrict our business activities and limit our ability to deliver certain solutions or features.

We may also be

required to develop alternative non-infringing technology, which could require significant effort and expense and/or cause us to alter

our solutions, which could harm our business.

Large indemnity obligations, whether for intellectual property or in certain limited circumstances,

other claims, would harm our business, operating results and financial condition.

Our solutions are subject

to warranty claims arising from real or perceived defects or misuse by our customers or third parties.

The following risks are associated

with potential liability claims:

Product Liability and Warranty Claims:

We are subject to risks of liability for errors, defects, or failures in our solutions.

While we generally have limitations of liability provisions in our contracts, they may not fully shield us from claims under federal,

state, or local laws, or unfavorable judicial decisions.

We may also be exposed to product liability claims, especially if our solutions

are found to be defective or cause harm to customers.

Indemnification and Legal Risks:

We provide indemnification to customers, partners, and other third parties for losses arising

from third-party intellectual property claims related to our solutions.

We also offer unlimited liability for certain breaches of confidentiality

and limited liability for breaches of our master subscription agreements.

While we have not incurred any material costs due to such indemnification

claims to date, as we continue to expand, the frequency and cost of indemnity claims may increase, leading to significant legal expenses,

damages, or licensing fees.

We may also be required to stop using technology found to infringe upon third-party rights, which could disrupt

our business operations.

Intellectual Property Infringement:

If we are found to be infringing on a third party’s intellectual property rights, we

could face substantial damages and legal costs.

Additionally, we may need to obtain licenses for certain technologies, which may not

be available on favorable terms or at all.

The inability to secure necessary licenses could limit our ability to deliver solutions or

features to our customers and harm our competitive position.

Unauthorized Use of Solutions:

Our solutions may be misused by customers or third parties for purposes other than what they were

intended for, which could expose us to liability claims.

Although we maintain insurance to mitigate certain risks, our coverage may not

fully protect us from the claims asserted against us.

Even unsuccessful claims could result in significant litigation costs, diversion

of management resources, and reputational harm.

Impact of Warranty and Insurance Coverage:

We offer limited warranties to some customers, which are subject to certain conditions.

If our insurance providers fail to fulfill their obligations, or if we cease offering warranties, we may face significant expenses or

lose customer trust.

This could negatively impact our ability to attract and retain customers, and harm our business, operating results,

and financial condition.

We continue to monitor and manage these risks, but there can be no assurance that our efforts will prevent material

adverse impacts on our business.

Additionally,

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Foreign Corrupt Practices Act, and other anti-bribery, anti-corruption, or other matters.

may be subject to various legal and regulatory proceedings, and are subject to certain legal compliance risks in the areas of intellectual

property, governmental regulation, U.S.

Foreign Corrupt Practices Act, and related anti-bribery and anti-corruption regulations.

outcome of any such legal proceedings may differ from our expectations because the outcomes of litigation, including regulatory matters,

are often difficult to reliably predict.

Various factors or developments can lead us to change current estimates of liabilities and related

insurance requirements where applicable, or make such estimates for matters previously not susceptible of reasonable estimates, such

as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments, or changes in applicable

A future adverse ruling, settlement, or unfavorable development could result in future charges that could have a material adverse

effect on our results of operations or cash flows in any particular period.

are subject to risks from operating internationally.

operate internationally, and our growth strategy depends in part on our ability to expand our operations in foreign markets, including

by way of acquisitions.

International operations and business expansion plans are subject to numerous risks, including the following:

burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements;

social, or economical unrest, terrorism, hostilities or war, including the current military conflict between Russia and the Ukraine

and in the Middle East;

and other national government trade policies affecting the markets for our services;

in regulatory practices, tariffs and taxes;

need to develop superior products or services, thereby gaining greater market acceptance and expanding their product and service

offerings more efficiently or rapidly;

non-compliance with a wide variety of laws and regulations, including anti-corruption, export control and anti-boycott laws and similar

laws and regulations

sovereign risk, such as defaults by or deterioration in the economies and credit ratings of governments, particularly in emerging

and communication challenges;

interpretation of contractual provisions governed by foreign laws in the event of a contract dispute;

exchange rate fluctuations, devaluations and other conversion restrictions.

of these factors could have a material adverse effect on our reputation, financial condition, results of operations and stock price.

Our business is subject

to various legal and regulatory proceedings, and we face compliance risks in multiple areas, including intellectual property, governmental

regulations, and international anti-bribery and anti-corruption laws.

These risks may adversely impact our business and financial results.

Specifically:

Legal and Compliance Risks:

We may be involved in legal or regulatory proceedings related to intellectual property disputes, compliance

with the U.S.

Foreign Corrupt Practices Act, anti-bribery, anti-corruption laws, and other regulatory matters.

Due to the inherently

unpredictable nature of litigation and regulatory actions, the outcomes of these proceedings may differ from our expectations.

such as significant rulings, settlements, or changes in laws may lead us to revise our estimates of liabilities and insurance requirements.

An adverse ruling or unfavorable regulatory development could result in significant charges that would materially impact our results

of operations and cash flows.

Regulatory Uncertainty:

As regulations evolve, particularly in relation to intellectual property and international compliance

standards, we could face additional legal challenges or expenses related to these matters.

The resolution of any significant legal dispute

or regulatory matter could have a substantial impact on our financial position and operations.

may be subject to risks from operating internationally.

We may seek to

expand our operations in international markets, which may expose us to a variety of risks.

Our international business growth is subject to numerous challenges, including:

Compliance with Foreign

Operating in foreign markets requires compliance with a complex and constantly changing landscape of tax, legal, accounting,

and regulatory requirements.

These challenges could result in increased costs and operational difficulties as we navigate diverse legal

systems and business practices across multiple jurisdictions.

Geopolitical and Economic

International operations expose us to political, social, and economic instability, including risks arising from war, terrorism,

or conflicts such as the ongoing military tensions between Russia and Ukraine, and in the Middle East.

These geopolitical risks could

disrupt our operations, harm our ability to conduct business, and negatively impact market conditions for our services.

Changes in Trade Policies:

Modifications in trade policies, tariffs, and taxes in the United States or other national governments could disrupt market access and increase

the cost of doing business in certain regions.

We must continuously monitor and adapt to these regulatory shifts to maintain our competitiveness

in foreign markets.

Market Acceptance and

Expanding into foreign markets requires the development of superior products and services that meet local demand.

must gain market acceptance while also expanding our offerings efficiently.

Failures in product adaptation or local market penetration

could impede our international growth.

Non-Compliance with International

Operating in multiple countries exposes us to the risk of non-compliance with a broad range of laws, including anti-corruption,

export control, and anti-boycott regulations.

Non-compliance could lead to significant legal penalties and reputational damage.

Sovereign Risk:

face increased sovereign risk, particularly in emerging markets where there is a greater risk of government defaults, economic deterioration,

or downgrades in credit ratings.

These factors could destabilize markets in which we operate, affecting our operations and financial

Logistical and Communication

Operating internationally involves logistical complexities, such as managing supply chains, communication across time

zones, and coordinating activities in diverse business environments.

These challenges can disrupt our operations and delay service

Contractual and Currency

International contracts are subject to interpretation under foreign laws, which can create risks in the event of a dispute.

Additionally, fluctuations in currency exchange rates, devaluations, or conversion restrictions could impact the value of our revenues

and costs, potentially resulting in financial losses.

Any of these factors could have a material adverse effect on our reputation, financial condition, results of operations,

and stock price.

The risks associated with operating internationally are inherent and may increase as we expand into new markets.

operations in certain emerging markets expose us to political, economic, and regulatory risks.

growth strategy depends in part on our ability to expand our operations in emerging markets, including, among others, countries in South

America, and Europe.

However, some emerging markets have greater political, economic and currency volatility and greater vulnerability

to infrastructure and labor disruptions than more established markets.

In many countries, particularly those with emerging economies,

engaging in business practices prohibited by laws and regulations with extraterritorial reach, such as the Foreign Corrupt Practices

Act of 1977 and the U.K.

Bribery Act, or local anti-bribery laws may be more common.

These laws generally prohibit companies and their

employees, contractors or agents from making improper payments to government officials, including in connection with obtaining permits

or engaging in other actions necessary to do business.

Failure to comply with these laws could subject us to civil and criminal penalties

that could materially and adversely affect our reputation, financial condition, results of operations and stock price.

Failure to manage

political, economic and regulatory risks in emerging markets could adversely affect our sales, financial condition, results of operations,

cash flows and stock price.

economic conditions in the United States and international economies may adversely impact our business operating units.

macro-economic conditions, such as a rise in interest rates, inflation in the cost of goods and services including labor, a recession

or an economic slowdown in the United States or internationally, could adversely affect demand for our services and make it difficult

to accurately forecast and plan our future business activities.

For example, U.S.

and global markets have been experiencing volatility

and disruption due to interest rate and inflation increases, such as higher inflation rates in the U.S., which rose in the second half

of 2021 and have remained above the Federal Reserve’s inflation target, as well as the continued escalation of geopolitical tensions,

including those as a result of the conflicts between Russia and Ukraine and in the Middle East.

We have experienced and continue to experience

inflationary pressures in certain areas of our business.

Although our business has not yet been materially negatively impacted by such

inflationary pressures, we cannot be certain that neither we nor our customers will be materially impacted by continued pressures.

the extent conditions in the domestic and global economy change, our business could be harmed as current and potential customers may

reduce or postpone spending or choose not to purchase our services or products, which they may consider discretionary.

If our customers

face decreased consumer demand, increased regulatory burdens or more limited access to international markets, we may face a decline in

demand for our products and services, and our operating results could be adversely impacted.

the extent conditions in the domestic and global economy change, our business could be harmed as current and potential customers may

reduce or postpone spending or choose not to purchase or renew our services, which they may consider discretionary.

If our customers

face decreased consumer demand, increased regulatory burdens, or more limited access to international markets, we may face a decline

in the demand for our services and our operating results could be adversely impacted.

and adverse economic conditions may also lead to a decline in the ability of our customers to use or access credit, which could adversely

affect our business.

In addition, changing economic conditions may also adversely affect third parties with which we have entered into

relationships and upon which we depend in order to grow our business.

As a result, we may be unable to continue to grow in the event

of future economic slowdowns.

Our growth strategy includes expanding

operations in emerging markets, particularly in regions such as South America and Europe.

While these markets present significant growth

opportunities, they also introduce a variety of risks that could adversely affect our business and financial results.

The key risks associated

with our expansion in emerging markets include:

and Economic Volatility:

Emerging markets often experience greater political and economic instability compared to more established

This volatility can lead to unpredictable changes in market conditions, regulatory environments, and business operations.

Political upheaval, economic downturns, or social unrest could disrupt our ability to operate efficiently in these regions, adversely

impacting sales, revenues, and overall business performance.

Fluctuations and Infrastructure Risks:

Emerging markets may be more susceptible to currency fluctuations and devaluations, which

could affect the value of our revenue and expenses in these regions.

Additionally, these markets often have less developed infrastructure,

increasing the risk of operational disruptions, such as supply chain delays or labor shortages, which could negatively affect our ability

to deliver services effectively.

with Anti-Corruption Laws:

In many emerging markets, business practices that may not be permissible in more established markets,

such as improper payments or bribes to government officials, can be more prevalent.

We are subject to stringent anti-corruption laws,

including the U.S.

Foreign Corrupt Practices Act, the U.K.

Bribery Act, and local anti-bribery laws in the countries where we

These laws prohibit improper payments to government officials, including in relation to obtaining permits or conducting other

business activities.

Non-compliance with these laws could result in severe civil and criminal penalties, which could damage our reputation

and adversely impact our financial condition, operating results, and stock price.

and Regulatory Risks:

The legal and regulatory environments in emerging markets can be unpredictable and subject to rapid changes.

Non-compliance with local laws or failure to navigate these complex legal systems effectively could lead to regulatory fines, penalties,

or reputational harm.

These risks are heightened in countries with weak rule of law or inconsistent enforcement of regulations.

Failure to manage political,

economic, and regulatory risks in emerging markets could have a material adverse impact on our ability to achieve sales targets, grow

our business, and maintain profitability in these regions.

The risks associated with expanding into emerging markets may result in unanticipated

costs, operational disruptions, or financial losses, which could negatively affect our financial condition, results of operations, cash

flows, and stock price.

economic conditions in the United States may adversely impact our business and operating results.

Our operations, demand for

services, and overall business performance are subject to general macroeconomic conditions, which can fluctuate and present

significant risks to our financial performance.

Key macroeconomic factors such as higher interest rates, inflation, recessions, or

economic slowdowns—whether in the United States or globally—could adversely affect our business operations, customer

demand, and financial results.

The key risks include the following:

The United States and global markets have experienced volatility due to rising interest rates and inflationary pressures.

rates in the United States have remained above the Federal Reserve’s inflation target since the second half of 2021, contributing to increased

costs for goods, services, and labor.

While our business has not yet been materially impacted by these inflationary pressures, we cannot

predict the future impact on our operations.

If inflation continues or worsens, it may lead to higher operational costs, which could

reduce our profitability and adversely affect our business.

The escalation of geopolitical tensions, including the conflicts between Russia and Ukraine and in the Middle East,

has created ongoing instability in global markets.

These factors may disrupt supply chains, elevate costs, and reduce consumer and

business confidence, which could negatively affect demand for our products and services.

Slowdowns and Recession:

A slowdown in economic activity or a recession, whether domestic or global, could lead to reduced spending

by businesses and consumers.

If our customers face decreased consumer demand, higher operational costs, or increased regulatory burdens,

they may choose to reduce or postpone their spending on our products and services.

Certain discretionary services may be deprioritized,

leading to a decline in sales and potentially adversely affecting our operating results.

Availability:

Adverse economic conditions may impact the availability of credit for our customers.

If customers experience difficulty

accessing credit, they may be unable or unwilling to invest in our products and services, potentially leading to delayed or lost sales

opportunities.

This could affect our revenue and growth prospects.

on Business Relationships:

Economic downturns could also affect the third parties with whom we have business relationships, including

suppliers, service providers, and partners.

If these third parties experience financial difficulties or operational disruptions, it

could impede our ability to execute on business opportunities and growth initiatives, adversely affecting our operations and long-term

strategic goals.

The unpredictability of macroeconomic conditions makes it difficult to accurately forecast and plan for future business

Adverse economic conditions may lead to changes in customer behavior, demand patterns, and spending priorities, all of which

could have a negative effect on our ability to achieve growth and maintain profitability.

In the event of future economic slowdowns or

disruptions, we may face challenges in sustaining growth or expanding our business in the manner anticipated.

of network or information technology security could have an adverse effect on our business.

Cyber-attacks

or other breaches of network or IT security may cause equipment failures or disrupt the systems and operations of us and our clients.

The potential liabilities associated with these events could exceed the insurance coverage we or our clients maintain, if any.

to operate as a result of such events, even for a limited period of time, may result in significant expenses or loss of market share

to other competitors in the market we serve.

In addition, a failure to protect our, or our client’s, enterprises, networks, privacy

of customer, and employee confidential data against breaches of network or IT security could result in damage to our reputation.

we have not been subject to cyber-attacks or other cyber incidents which, individually or in the aggregate, resulted in a material adverse

effect on our business, operating results, or financial condition.

threats to our own IT infrastructure may affect our clients indirectly.

A party who is able to compromise the security measures on our

networks or the security of our infrastructure could misappropriate our proprietary information or the personal information of our clients,

cause interruptions or malfunctions in our operations or our clients’ operations, or damage our computers or systems and those

of our clients.

As security is a primary competitive factor in our industry, such a compromise could be particularly harmful to our brand

Cybersecurity threats,

including cyber-attacks or breaches of our network or IT security, could have a material adverse effect on our operations, financial condition,

and reputation.

We may be required to expend significant resources to protect against such threats or to alleviate problems caused by

breaches in security.

As techniques used to breach security change frequently, and are generally not recognized until launched against

a target, we may not be able to implement security measures in a timely manner or, if and when implemented, we may not be able to determine

the extent to which these measures could be circumvented.

If we are unable to protect sensitive information, our clients or governmental

authorities could question the adequacy of our threat mitigation and detection processes and procedures.

Any breaches that may occur

could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, harm to our reputation,

and increases in our security costs, which may not be fully insured or indemnified by other means.

Additionally, breaches of our, or

our clients’, systems could similarly result in a loss of confidence in our services or damage to our brand and reputation.

of any of these events could have a material adverse effect on our business, financial condition, operating results, or prospects.

our services are aimed at protecting clients from, and limiting the impact of, critical business interruptions and losses related to

cyber-attacks, if our client’s experience losses related to cyber-attacks that result in lost profits or other indirect or consequential

damages to our clients, our clients may expose us to lawsuits.

Our service agreements with our clients typically contain provisions limiting

our liability.

However, we cannot provide assurances that a court would enforce any contractual limitations on our liability.

of any such lawsuit would depend on the specific facts of the case and any legal and policy considerations that we may not be able to

In such cases, we could be liable for substantial damage awards that may exceed our liability insurance coverage by unknown

but significant amounts, which could materially impair our financial condition.

The nature of our business exposes us to various risks related to network security breaches, which could disrupt both

our own operations and the operations of our clients.

Key risks include the following:

Cybersecurity Threats

and Liabilities:

Cyber-attacks or other breaches of network or IT security could result in significant disruptions to our systems,

causing equipment failures, service interruptions, or damage to systems and data.

If our security measures are compromised, it could

lead to misappropriation of proprietary information or sensitive customer and employee data.

Such incidents could expose us to substantial

liabilities, potentially exceeding the coverage provided by our insurance policies, and cause financial losses or operational setbacks.

Damage to Reputation and

Market Share Loss:

A security breach could also damage our brand and reputation, particularly given the nature of our industry,

where security is a critical competitive factor.

Even short periods of operational downtime could result in a loss of market share

to competitors, as clients may lose confidence in our ability to protect their data and systems.

Indirect Effects on Clients:

Our IT infrastructure’s security threats could also affect our clients indirectly.

A compromise of our systems may impact

their operations or lead to the unauthorized access to their proprietary or personal information.

This could damage our clients’

trust in our services, which could have a cascading effect on our relationships and business performance.

Security Challenges:

As cybersecurity threats evolve rapidly, new methods of breach may emerge that we are not able to

anticipate or defend against immediately, especially now with state and foreign governments that are adversaries and employ hackers

or bad actors.

We may be unable to implement timely security measures to mitigate these risks, and in some cases, we may not be

able to fully determine the extent to which new threats can bypass our defenses.

This presents a significant challenge in

maintaining the integrity of our security systems.

Legal and Regulatory Risks:

If we fail to adequately protect sensitive information, we could face legal consequences, including lawsuits, regulatory penalties,

or damage claims, particularly if our clients or relevant authorities question the effectiveness of our threat detection and mitigation

These legal proceedings could expose us to significant financial and reputational risks.

Potential Lawsuits and

Our services are designed to protect clients from cyber-attacks and other security breaches.

However, if our clients

experience losses from cyber-attacks, including lost profits or other indirect damages, they may seek to hold us liable through lawsuits.

While our service agreements typically include liability limitations, these provisions may not be enforceable in all cases.

event of litigation, we could face substantial damage awards, which may exceed our insurance coverage and significantly impact our

financial position.

A security breach, failure to protect sensitive information, or liability arising from a breach could have a material

adverse effect on our business, operating results, financial condition, and prospects.

We may incur significant legal, remediation, and

security costs, and any reputational damage could undermine our business relationships and market position.

we fail to meet our service level obligations under our service level agreements, we may be subject to certain penalties and could lose

have service level agreements with many of our managed services clients under which we guarantee specified levels of service availability.

These arrangements require us to estimate the level of service we will provide.

If we fail to meet our service level obligations under

these agreements, we may be subject to penalties, which could result in higher than expected costs, and we may lose clients, which could

lead to decreased revenue and decreased gross and operating margins.

If we fail to meet our service level obligations under these agreements,

our reputation may suffer as a result.

We have entered into

service level agreements (“SLAs”) with many of our managed services clients, under which we guarantee specified levels of service availability.

These arrangements require us to estimate and meet service delivery standards, including uptime and system performance, to ensure client

satisfaction.

The following risks are associated with these SLAs:

Penalties and Cost Overruns:

If we fail to meet our service level obligations, we may be subject to financial penalties, which could result in higher-than-expected

These penalties, along with any potential requirements for remediation, may negatively affect our profitability and operating

Client Loss and Revenue

Failure to meet SLAs could result in client dissatisfaction, potentially leading to the termination of contracts or a reduction

in client spending.

The loss of clients due to unmet service expectations could significantly reduce our revenue and impact the stability

of our future cash flows.

Reputational Damage:

Our ability to deliver on service level commitments is central to maintaining strong relationships with our clients.

If we fail to

meet our SLAs, our reputation may suffer, potentially leading to a loss of future business, difficulty attracting new clients, and

challenges in retaining existing ones.

Operational and Financial

The financial and operational consequences of failing to meet service level commitments could lead to a deterioration in

our gross and operating margins.

Additionally, the resources required to address service failures and mitigate customer dissatisfaction

could divert attention from other key business priorities, further impacting our overall performance.

If we fail to fulfill

our SLAs, it could result in material financial costs, including penalties, client churn, and reputational damage, which would adversely

affect our business, operating results, financial condition, and prospects.

nature of our business involves significant risks and uncertainties that may not be covered by insurance or indemnification.

provide services in circumstances where insurance or indemnification may not be available to us.

Our existing insurance coverages may

not be sufficient or additional insurance may not be available to protect us against operational risks and other uncertainties that we

Liabilities or claims arising from our services in excess of any indemnity or insurance coverage (or for which indemnity or insurance

coverage is not available or is not obtained) could harm our financial condition, cash flows, and operating results.

Any claim, even

if fully covered or insured, could negatively affect our reputation in the marketplace and make it more difficult for us to compete effectively.

The defense of such claims may be costly and time-consuming and could divert the attention of management.

We provide services in circumstances

where insurance or indemnification may not be available or may be insufficient to cover operational risks and other uncertainties that

Our existing insurance coverages may not fully protect us against the risks associated with the delivery of our services, and

additional insurance may not be available on favorable terms, or at all.

The following risks are associated with our insurance coverage:

Liabilities in Excess

Liabilities or claims arising from our services in excess of available indemnity or insurance coverage could materially

harm our financial condition, cash flows, and operating results.

If we are unable to obtain sufficient coverage for potential claims,

the financial impact could be significant.

Reputational Damage:

Even if a claim is fully covered or insured, it could still harm our reputation in the marketplace.

A negative perception resulting

from claims, regardless of the outcome, could undermine client confidence and make it more difficult for us to compete effectively.

Cost and Management Distraction:

The defense of claims, even if ultimately unsuccessful, can be costly and time-consuming.

It could divert management’s attention

away from key business operations and strategic initiatives, which could affect our ability to execute on our business plan and impact

overall operational performance.

The occurrence of claims

or liabilities for which we do not have adequate insurance or indemnification could have a material adverse effect on our business, operating

results, financial condition, and prospects.

Furthermore, the associated reputational risks and management distraction could hinder our

ability to maintain growth and profitability.

indemnify our officers and directors against liability to us and our security holders, and such indemnification could increase our operating

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industry is highly competitive, and there is no assurance that we will compete successfully.

current and potential competitors vary by size, service offerings, and geographic location.

Competitors include technology companies,

consulting companies, telecommunication companies, technology resellers, hardware and software companies, and others.

Many of our competitors

have entrenched relationships in particular industries or have gained a reputation for expertise in a specific sector of the cybersecurity

market, including services, software, and hardware.

Primary competitive factors in our market include security, reliability and functionality;

Our business operates

in a highly competitive landscape, and our current and potential competitors vary significantly by size, service offerings, and geographic

Our competitors include technology companies, consulting firms, telecommunication companies, technology resellers, hardware

and software providers, and other entities.

Many of these competitors have established relationships within specific industries or have

developed a reputation for expertise in particular sectors of the cybersecurity market, including services, software, and hardware.

Primary factors influencing

competition in our market include security, reliability, and functionality;

customer service and technical expertise;

reputation and brand recognition;

reputation and brand

financial strength;

breadth of products and services offered;

the breadth of products and services offered;

and scalability.

Many of our current and potential competitors have substantially greater financial, technical, and marketing

more diversified product and service offerings;

larger customer bases;

longer operating histories;

greater brand recognition;

and more established relationships in the industry than we do.

As a result, some of these competitors may be able to:

more rapidly to new or emerging technologies and changes in customer requirements;

superior products or services, thereby gaining greater market acceptance and expanding their product and service offerings more efficiently

products and services that we may not offer or in a manner that provides our competitors with a price advantage;

advantage of acquisitions and other opportunities more readily;

a lower cost basis;

more aggressive pricing policies and devote greater resources to the promotion, marketing, and sales of their products and services;

greater resources to the research and development of their products and services.

of these companies have significantly greater financial, technical, marketing, and other resources than we do and may be better positioned

to acquire, offer, and service complementary products and technologies.

These companies and alliances resulting from possible combinations

may create more compelling product and service offerings;

be able to offer greater pricing flexibility than we can;

or engage in business

practices that make it more difficult for us to compete effectively, including on the basis of sales and marketing programs (such as

providing greater incentives to our channel partners to sell a competitor’s product), technology, or product functionality.

could result in, among other things, a substantial loss of customers, reduction in revenue, or increase in expenses, which could materially

adversely affect our business, financial condition, results of operations, or prospects.

However, many of our competitors

possess substantial advantages in these areas, including the following:

and Operational Resources:

Many of our competitors have greater financial, technical, and marketing resources.

They may be able

to deploy more significant resources in research and development, marketing, and sales, which could allow them to adapt more rapidly

to emerging technologies or shifts in customer demands.

Competitors may have entrenched relationships within specific industries or have gained extensive reputation and brand

recognition, positioning them as leaders in the market.

and Product Bundling:

Some of our competitors may be able to offer more favorable pricing or bundle products and services in ways

that provide them with a competitive price advantage.

Additionally, they may be able to maintain a lower cost structure, making it

difficult for us to compete on price.

Acquisitions, and Alliances:

Competitors may also benefit from strategic acquisitions, partnerships, or other alliances, allowing

them to offer complementary products and services or achieve greater operational efficiencies.

Some of our competitors

are better positioned to:

develop and deploy new products and services.

lower prices or more attractive pricing packages.

greater resources to sales and marketing efforts, including providing more incentives to channel partners.

As a result, competition

in our industry could lead to several adverse outcomes for our business, including a loss of customers, reduced revenue, increased expenses,

or pressure on our margins.

These factors could adversely affect our business, financial condition, operating results, and

long-term growth prospects.

success depends on our ability to protect our intellectual property and our proprietary technologies.

rely on trade secrets to protect intellectual property, proprietary technology, and processes, which we have or may develop in the future.

There can be no assurances that secrecy obligations will be honored or that others will not independently develop similar or superior

The protection of intellectual property and/or proprietary technology through claims of trade secret status has been the

subject of increasing claims and litigation by various companies both in order to protect proprietary rights as well as for competitive

reasons even where proprietary claims are unsubstantiated.

The prosecution of proprietary claims or the defense of such claims is costly

and uncertain given the uncertainty and rapid development of the principles of law pertaining to this area.

We may also be subject to

claims by other parties regarding the use of intellectual property, technology information, and data, which may be deemed proprietary

on trade secrets to protect our intellectual property, proprietary technology, and processes, which we have developed or may develop in

However, there can be no assurance that confidentiality obligations will always be honored or that others will not independently

develop similar or superior technology.

The protection of intellectual property and proprietary technology through trade secret claims

has become increasingly contentious, with more companies pursuing litigation to protect their rights or for competitive reasons, even

when the claims may be unsubstantiated.

The prosecution or defense of intellectual property claims can be costly and unpredictable, particularly

given the evolving legal landscape.

We may also face claims from other parties alleging infringement on their intellectual property or

technology, which could adversely affect our business.

complex cybersecurity regulations and standards may have significant impact on our business, and it may require us to substantially invest

in our development capabilities to meet compliance requirements and may negatively impact our ability to offer certain services and remain

and state legislatures continue to advance policy proposals in recent years to address cyber threats directed at governments and private

As threats continue to evolve and expand and as the pace of new technologies accelerates, legislatures are making cybersecurity

measures a high priority.

At the federal and state level, hundreds of bills or resolutions have been introduced and considered that deal

significantly with cybersecurity.

These proposals are at multiple stages of development and may shape out new standards concerning different

Our business expansion strategy focuses on accretive acquisitions of other cybersecurity service providers in the top thirty U.S.

markets to achieve greater service coverage.

The complex regulatory environment in each state may require us to dedicate additional

resource to ensure our service scope and service quality are in compliance with the standards enacted in each state we operate business

We may incur additional legal and compliance costs, and our service scope may be restrained due to compliance requirements.

will cause a delay in our service launch and negatively impact our operating results.

We may also face litigations if we fail to respond

accordingly to these regulatory measures in certain states.

Cybersecurity legislation at the federal and state levels continues to evolve as lawmakers respond to the growing

threat landscape.

Multiple bills and resolutions are currently being considered, which may lead to new regulations, including cybersecurity

standards and compliance requirements.

Our expansion strategy, which includes acquisitions of other cybersecurity service providers, may

be impacted by these regulations.

We may be required to dedicate significant resources to ensure our services comply with diverse state-level

requirements, potentially delaying service launches or limiting the scope of certain offerings.

Non-compliance with these regulations

could result in legal actions, increased costs, and operational disruptions, which would negatively impact our financial results.

may become subject to disputes, including litigation, that could negatively impact our business, profitability, and financial condition.

may become subject to disputes with third parties from time to time.

Any such dispute could result in litigation between us and the other

Whether or not any dispute actually proceeds to litigation, we may be required to devote significant management time and attention

and financial resources to its resolution (through litigation, settlement, or otherwise), which would detract from our management’s

ability to focus on our business.

Any such resolution could involve the payment of damages or expenses by us, which may be significant.

In addition, any such resolution could involve our agreement with terms that restrict the operation of our business.

We may become involved in disputes

with third parties, which could result in litigation.

Whether or not a dispute leads to litigation, significant resources—both management

time and financial—may be required to resolve the issue.

This could detract from our ability to focus on business operations.

resolution could involve the payment of damages or other significant costs, and may involve restrictive terms that limit our operational

Prolonged or unfavorable legal disputes could materially harm our financial condition, profitability, and overall business

we incur additional debt, we will be subject to restrictive covenants and debt service obligations that could negatively impact our operations.

we incur additional debt for operations or acquisitions, a portion of our cash flow will have to be dedicated to the payment of principal

and interest on such indebtedness.

Typical loan agreements also might contain restrictive covenants, which may impair our operating flexibility.

Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants.

A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of

such lender which would be senior to the rights of our stockholders.

A judgment creditor would have the right to foreclose on any of

our assets resulting in a material adverse effect on our business, operating results, or financial condition.

If we incur additional debt to

fund operations or acquisitions, we will be subject to debt service obligations, including interest and principal payments.

Debt agreements

often contain restrictive covenants that may limit our operational flexibility and impose financial constraints.

A default under any debt

agreement could accelerate repayment and result in a judgment against us, potentially leading to the foreclosure of assets, which would

materially adversely affect our business, financial condition, or results of operations.

requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements

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Furthermore, if we are unable to satisfy our obligations as a public company,

we could be subject to delisting of our common stock, fines, sanctions, and other regulatory action and potentially civil litigation.

preparation of our financial statements involves use of estimates, judgments, and assumptions, and our financial statements may be materially

affected if our estimates prove to be inaccurate.

we could be subject to delisting of our common stock, fines, sanctions, other regulatory action, and potentially civil litigation.

preparation of our financial statements involves the use of estimates, judgments, and assumptions, and our financial statements may

be materially affected if our estimates prove to be inaccurate.

statements prepared in accordance with accounting principles generally accepted in the United States require the use of estimates, judgments,

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then we face the risk that charges to income will be required.

auditor’s opinion on our audited consolidated financial statements for the year ended December 31, 2023, included in this

annual report on Form 10-K, contain an explanatory paragraph relating to our ability to continue as a going concern.

auditor’s opinion on our audited consolidated financial statements for the year ended December 31, 2023 includes an

explanatory paragraph stating that our losses and negative cash flows from operations and uncertainty in generating sufficient cash

to meet our operating obligations raise substantial doubt about our ability to continue as a going concern.

While we are pursuing a

variety of funding sources and transactions that could raise capital, there can be no assurances that we will be successful in these

efforts or will be able to resolve our liquidity issues or eliminate our operating losses.

If we are unable to obtain sufficient

funding, we would need to significantly reduce our operating plans and curtail some or all of our strategic plans.

Accordingly, our

business, prospects, financial condition, and results of operations will be materially and adversely affected, and we may be unable

to continue as a going concern.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive

less than the value at which those assets are carried on our audited consolidated financial statements, and it is likely that

investors will lose all or a part of their investment.

If we seek additional financing to fund our business activities in the future

and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be

unwilling to provide additional funding on commercially reasonable terms or at all.

auditor’s opinion on our audited consolidated financial statements for the year ended December 31, 2024, included in this annual

report on Form 10-K, contain an explanatory paragraph relating to our ability to continue as a going concern.

auditor’s opinion on our audited consolidated financial statements for the year ended December 31, 2024 includes an explanatory

paragraph stating that our losses and negative cash flows from operations and uncertainty in generating sufficient cash to meet our operating

obligations raise substantial doubt about our ability to continue as a going concern.

While we are pursuing a variety of funding sources

and transactions that could raise capital, there can be no assurances that we will be successful in these efforts or will be able to

resolve our liquidity issues or eliminate our operating losses.

If we are unable to obtain sufficient funding, we would need to significantly

reduce our operating plans and curtail some or all of our strategic plans.

Accordingly, our business, prospects, financial condition,

and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern.

If we are unable

to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried

on our audited consolidated financial statements, and it is likely that investors will lose all or a part of their investment.

seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue

as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms

Related to our Common Stock

market price of our common stock is volatile and may fluctuate in a way that is disproportionate to our operating performance.

stock price may experience substantial volatility as a result of a number of factors, including, among others:

market price of our common stock may experience significant volatility due to a variety of factors, including, but not limited to:

or potential sales of substantial amounts of our common stock;

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currency values and fluctuations;

political and economic conditions.

political and economic conditions, including internation developments.

of these factors are beyond our control.

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a market in our shares, potentially reducing a stockholder’s ability to resell shares of our common stock.

we issue additional shares in the future, it will result in the dilution of our existing stockholders.

we issue additional shares in the future, it will result in a dilution of our existing stockholders.

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

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for our common stock and our stock price may be more volatile or may decrease.

Our directors, a former director

and executive officers beneficially own a substantial majority of our outstanding capital stock and will have the ability to control our

Our current directors and executive officers, and a former director beneficially

own approximately 51.90% of our outstanding capital stock.

By virtue of these holdings, they effectively control the election of the members

of our Board of Directors, our management, and our affairs and may prevent us from consummating corporate transactions such as mergers,

consolidations, or the sale of all or substantially all of our assets that may be favorable from our standpoint or that of our other stockholders.

directors, a former director and executive officers beneficially own a substantial majority of our outstanding capital stock and will

have the ability to control our affairs.

current directors and executive officers, and a former director beneficially own approximately 31.55% of our outstanding capital stock.

By virtue of these holdings, they effectively control the election of the members of our Board of Directors, our management, and our

affairs and may prevent us from consummating corporate transactions such as mergers, consolidations, or the sale of all or substantially

all of our assets that may be favorable from our standpoint or that of our other stockholders.

failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.

we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum

closing bid price requirement, Nasdaq may take steps to delist our common stock.

On March 29, 2023, we received a letter from the

listing qualifications staff of Nasdaq providing notification that the bid price for our common stock had closed below $1.00 per

share for the previous 30 consecutive business days and our common stock no longer met the minimum bid price requirement for

continued listing under Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had an initial

period of 180 calendar days to regain compliance.

To regain compliance, the closing bid price of our common stock had to be $1.00

per share or more for a minimum of 10 consecutive business days at any time before the expiration of the initial compliance period.

We were unable to regain compliance with Rule 5550(a)(2) during the initial compliance period, but pursuant to Nasdaq rules we were

eligible for an additional 180 calendar day compliance period.

To qualify, we needed 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 we were required to provide written notice of our intention to cure the deficiency during the

second compliance period, by effecting a reverse stock split, if necessary.

Subsequently, on December 28, 2023, we received a letter

from the listing qualifications staff of Nasdaq providing notification that the bid price for our common stock had closed below

$0.10 per share for the previous 10 consecutive trading days and our common stock no longer met the minimum bid price requirement

for continued listing under Nasdaq Listing Rule 5550(a)(2).

Accordingly we were subject to the provisions contemplated under Nasdaq

Listing Rule 5810(c)(3)(A)(iii), and as a result, Nasdaq determined to delist our securities.

We were granted an appeal with

Nasdaq’s Hearings Panel on March 28, 2024.

we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing

bid price requirement, Nasdaq may take steps to delist our common stock.

On March 29, 2023, we received a letter from the listing qualifications

staff of Nasdaq providing notification that the bid price for our common stock had closed below $1.00 per share for the previous 30 consecutive

business days and our common stock no longer met the minimum bid price requirement for continued listing under Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had an initial period of 180 calendar days to regain compliance.

To regain compliance,

the closing bid price of our common stock had to be $1.00 per share or more for a minimum of 10 consecutive business days at any time

before the expiration of the initial compliance period.

We were unable to regain compliance with Rule 5550(a)(2) during the initial compliance

period, but pursuant to Nasdaq rules we were eligible for an additional 180 calendar day compliance period.

To qualify, we needed 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 we were required to provide written notice of our intention

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

Subsequently, on December

28, 2023, we received a letter from the listing qualifications staff of Nasdaq providing notification that the bid price for our common

stock had closed below $0.10 per share for the previous 10 consecutive trading days and our common stock no longer met the minimum bid

price requirement for continued listing under Nasdaq Listing Rule 5550(a)(2).

Accordingly we were subject to the provisions contemplated

under Nasdaq Listing Rule 5810(c)(3)(A)(iii), and as a result, Nasdaq determined to delist our securities.

We were granted an appeal

with Nasdaq’s Hearings Panel on March 28, 2024.

On March 8, 2024, our 1-for-15 reverse split became effective, increasing the bid

price for our common stock above $1.00 per share.

On March 22, 2024, we received notification from Nasdaq that we had regained

compliance with the bid price requirements as set forth under Nasdaq Listing Rule 550(a)(2).

As a result of regaining compliance,

our appeal with Nasdaq’s Hearing Panel was cancelled.

We must continue

to maintain a minimum closing bid price over $1.00 per share pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

If our closing bid price

falls below $1.00 per share for more than 30 consecutive trading days, we may again be deemed noncompliant with Nasdaq’s

On March 22, 2024, we received notification from Nasdaq that we had regained compliance

with the bid price requirements as set forth under Nasdaq Listing Rule 550(a)(2).

As a result of regaining compliance, our appeal with

Nasdaq’s Hearing Panel was cancelled.

must continue to maintain a minimum closing bid price over $1.00 per share pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

If our closing

bid price falls below $1.00 per share for more than 30 consecutive trading days, we may again be deemed noncompliant with Nasdaq’s

continued listing requirements.

liquidity of the shares of our common stock may be affected adversely by the reverse stock split undertaken to address such compliance

failure, given the reduced number of shares that are outstanding following a reverse stock split.

In addition, reverse stock splits may

increase the number of stockholders who own odd lots (less than 100 shares) of our common stock, creating the potential for such stockholders

to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

the event that we again become non-compliant with Rule 5550(a)(2) and cannot re-establish compliance

within the required timeframe, our common stock could be delisted from Nasdaq, which could have a material adverse effect on our financial

condition and which would cause the value of our common stock to decline.

If our common stock is not eligible for listing or quotation

on another market or exchange, trading of our common stock could be conducted in the over-the-counter market or on an electronic bulletin

board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.

In such event, it would become more difficult

to dispose of, or obtain accurate price quotations for, our common stock, and there would likely be a reduction in our coverage by security

analysts and the news media, which could cause the price of our common stock to decline further.

In addition, it may be difficult for

us to raise additional capital if we are not listed on a national securities exchange.

The liquidity of the shares of our common stock may be affected adversely by the reverse stock split undertaken to

address such compliance failure, given the reduced number of shares that are outstanding following a reverse stock split.

reverse stock splits may increase the number of stockholders who own odd lots (less than 100 shares) of our common stock, creating the

potential for such stockholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

On 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 Market.

Under 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.

the event that we again become non-compliant with Rule 5550(a)(2) and cannot re-establish compliance within the required timeframe, our

common stock could be delisted from Nasdaq, which could have a material adverse effect on our financial condition, and which would cause

the value of our common stock to decline.

If our common stock is not eligible for listing or quotation on another market or exchange,

trading of our common stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted

securities such as the Pink Sheets or the OTC Bulletin Board.

In such event, it would become more difficult to dispose of, or obtain

accurate price quotations for, our common stock, and there would likely be a reduction in our coverage by security analysts and the news

media, which could cause the price of our common stock to decline further.

In addition, it may be difficult for us to raise additional

capital if we are not listed on a national securities exchange.

a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors,

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we believe that a higher market price of our common stock may help generate greater or broader investor interest, there can be no assurance

that a reverse stock split will result in a share price that will attract new investors, including institutional investors.

that our reverse stock split will result in a share price that will attract new investors, including institutional investors.

there can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors.

the trading liquidity of our common stock may not necessarily improve.

result, the trading liquidity of our common stock may not necessarily improve.

do not intend to pay dividends on our common stock.

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This may never happen, and investors may lose all of their investment.

business could be negatively impacted by shareholder activism.

recent years, shareholder activists have become involved in numerous public companies.

Shareholder activists frequently propose to involve

themselves in the governance, strategic direction, and operations of companies.

Shareholder activists have also become increasingly concerned

with companies’ efforts with respect to environmental, sustainability and governance standards.

Responding to actions by activist

shareholders, such as requests for special meetings, potential nominations of candidates for election to our Board of Directors, requests

to pursue a strategic combination or other transaction, or other special requests may disrupt our business and divert the attention of

management and employees.

In addition, any perceived uncertainties as to our future direction resulting from such a situation could result

in the loss of potential business opportunities, be exploited by our competitors, cause concern to our current or potential customers,

and make it more difficult to attract and retain qualified personnel and business partners, all of which could negatively impact our

Shareholder activism could result in substantial costs.

In addition, actions of activist shareholders may cause significant

fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect

the underlying fundamentals of our business.

business could be negatively impacted by stockholder activism.

recent years, stockholder activists have become involved in numerous public companies.

Stockholder activists frequently propose to

involve themselves in the governance, strategic direction, and operations of companies.

Stockholder activists have also become

increasingly concerned with companies’ efforts with respect to environmental, sustainability and governance standards.

Responding to actions by activist stockholder, such as requests for special meetings, potential nominations of candidates for

election to our Board of Directors, requests to pursue a strategic combination or other transaction, or other special requests may

disrupt our business and divert the attention of management and employees.

In addition, any perceived uncertainties as to our future

direction resulting from such a situation could result in the loss of potential business opportunities, be exploited by our

competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified

personnel and business partners, all of which could negatively impact our business.

Stockholder activism could result in substantial

In addition, actions of activist stockholder may cause significant fluctuations in our stock price based on temporary or

speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals of our

share price may be volatile, and you may be unable to sell your shares.

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Since shares of our common stock were sold in our initial public offering (IPO) in January 2022 at a

price of $75.00 (1) per share, the reported high and low sales prices of our common stock have ranged from $1.12 (1)

to $138.15 (1) per share through March 31, 2024.

price of $75.00 per share, the reported high and low sales prices of our common stock ranged from $0.26 to $138.15 per share through

March 24, 2025.

Factors that may cause the market price of our common stock to fluctuate include:

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involving us, our industry or both;

developments in the U.S., foreign countries, or both;

developments in the United States, foreign countries, or both;

economic conditions and trends;

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in accounting standards, policies, guidelines, interpretations, or principles;

instituted by activist shareholders or others;

instituted by activist stockholder or others;

catastrophic events, including those resulting from war, incidents of terrorism, outbreaks of pandemic diseases, such as COVID-19,

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result in substantial costs and a diversion of management’s attention and resources.

price adjusted to reflect a 1-for-15 reverse stock split that occurred on March 8, 2024.

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 1A. Risk Factors