What changed in this filing

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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-04-16 · 1001 added, 1010 removed, 1012 unchanged (67% of the section changed)

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decisions regarding required disclosure.

of Material Weakness as of December 31, 2022

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

many small companies with small number of staff:

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

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

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

weakness in internal control over financial reporting.

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

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

We have evaluated

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

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

on Effectiveness of Controls and Procedures

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in Internal Control Over Financial Reporting

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

procedures critical to the accomplishment of financial reporting objectives.

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

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

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

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

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

Report on Internal Control over Financial Reporting

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

purposes in accordance with U.S.

generally accepted accounting principles.

purposes in accordance with United States generally accepted accounting principles.

Based on our assessment under this framework, our management

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

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

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

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

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

OTHER INFORMATION

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

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

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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The age of each Director and Executive

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

Officer listed below is given as of March 24, 2025.

Executive Officer and Director

Chief Operating Officer

Financial Officer and Director

General Robert C.

Holbrook (1) (2) (3)

Financial Officer

Interim Chief Operating Officer

McCain (1) (2)

(KiKi) VanDeWeghe, III (1) (2) (3)

Balatsos (1) (3)

(Michael) Khorassani (2)(3)

Hancox (1) (2) (3)

of the Audit Committee

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Jemmett – Chief Executive Officer and Director

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

He also founded GenResults

in June 2015, which we subsequently acquired in April 2019.

From January 2014 to December 2014, Mr.

Jemmett served as Chief Executive

Officer of NantCloud, LLC, a provider of secure cloud-hosted applications for healthcare customers, and Chief Technology Officer of NantWorks,

LLC, a parent company for the “Nant” family of companies.

Jemmett has served as our

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

He founded GenResults in June 2015, which was

acquired by our company in April 2019.

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

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

family of companies.

From 2005 to 2013, Mr.

Jemmett served as founder and Chief Executive

Officer of ClearDATA Networks Corporation, a HIPAA compliant hosting company specializing in healthcare.

He has been a guest speaker

on CBS, CNN, MSNBC and CSPAN, and has spoken before the U.S.

Senate Subcommittee on Telecommunications and Internet Security regarding

internet technologies in 1998.

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

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

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

HIPAA-compliant hosting company specializing in healthcare.

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

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

Senate Subcommittee on

Telecommunications and Internet Security in 1998.

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

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

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

Smith – Chief Financial Officer

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

Smith previously served as a director on our Board of Directors

from May 2023 to January 2025.

Smith served as our Executive Vice President of Finance and Accounting from February 2021 to June

Prior to joining our company, Ms.

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

from January 2020 to

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

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

Counseling with Honors from Argosy University.

Young – Interim Chief Operating Officer

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from the University of Illinois Urbana-Champaign.

Smith – Chief Financial Officer and Director

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

Smith served as our Executive Vice President of Finance and Accounting

from February 2021 to June 2021.

Prior to joining our company, Ms.

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

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

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

in Counseling with Honors from Argosy University.

General Robert C.

Oaks – Director

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

He is a retired U.S.

Air Force general who served as commander in

chief of the U.S.

Air Forces in Europe, and commander, Allied Air Forces Central Europe, with headquarters at Ramstein Air Base, Germany.

He retired as a four-star General and Commander and Chief of U.S.

Air Forces Europe and NATO Central Europe in 1994 after serving 34

Following his retirement, Ret.

General Oaks was employed at U.S.

Airways as Senior Vice President from 1994 to 2000.

Oaks resigned from this position when he was called to serve the LDS Church, where he served until 2009, when he was released as a general

He earned a Bachelor of Science degree in Military Science from the U.S.

Air Force Academy and a Master’s degree in

Business Administration from Ohio State University prior to graduating from the Naval War College.

General Oaks currently serves

as the official Liaison for the Church of Jesus Christ to the U.S.

Armed Forces.

General Oaks is qualified for service as a director of our company due to his experience with national security issues,

including cybersecurity, through his extensive military service.

Holbrook – Director

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

Since 2013, Mr.

Holbrook has been a Principal at Mountain Summit Advisors,

a specialty firm focused on mergers and acquisitions of primarily healthcare technology and services companies, and a strategic advisor

to Health Catalyst, a company focused on data analytics and warehousing primarily in healthcare.

He served as the Executive Vice President

of Medicity, a population health management company with solutions for health information exchange, business intelligence, and provider

and patient engagement, from 2002 to 2013.

Holbrook founded KLAS where he remains as a board member.

He has served in executive

positions at IHC, GTE, Sunquest Information Systems, Integrated Medical Networks and is a founder of Park City Solutions.

is a HIMSS Fellow.

He holds a Master of Science from Utah State University and a Bachelor of Science from Brigham Young University.

Holbrook is qualified for service as a director of our company as a result of his significant experience in the healthcare

technology sector.

McCain – Director

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

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

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

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

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

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

Chairman of the Greater Phoenix Chamber of Commerce.

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

from Vanderbilt University.

He has served as the President and Chief Executive Officer for

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

January 2024.

He is Chairman of Hensley Employee Foundation and a Patrons Committee member of United Methodist Outreach

Ministries’ New Day Centers.

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

Wholesaler Advisory Panel, past Chairman of the Greater Phoenix Chamber of Commerce, past board member of the Arizona Super Bowl

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

received his Bachelor of Arts in Mathematics in 1984 and an MBA in 1986 from Vanderbilt University.

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

(Kiki) VanDeWeghe, III – Director

VanDeWeghe has served as a director of our company since May 2021.

He has served as the Executive Vice President, Basketball Operations

of the National Basketball Association since 2013.

Prior to that, Mr.

VanDeWeghe was the general manager of the Denver Nuggets and the

New Jersey Nets and a head coach of the New Jersey Nets.

Prior to that he played professionally for the Los Angeles Clippers, New York

Knicks, Portland Trail Blazers, and the Denver Nuggets.

VanDeWeghe attended UCLA where he received a degree in Economics.

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

Chugg – Director

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

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

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

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

Chugg attended Weber State University where he received

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

Balatsos – Director

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

As Vice President at XP Investments US LLC, he has

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

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

boosted annual revenues by millions.

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

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

LLC, which demonstrate his diverse expertise.

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

company’s strategic growth.

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

received leadership recognition in various roles.

We believe Mr.

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

Board of Directors currently consists of seven members.

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

his executive and board experience at other companies.

(Michael) Khorassani – Director

Khorassani has served as a director since January 2025.

He has served as founder and CEO of Orion 4, a corporate advisory firm, since

March of 2019 where he has served as capital markets, business development and marketing advisor for many public and private companies.

Before founding Orion, he spent nineteen years at Oppenheimer Private Client Division as Director of Investments focused on building

and developing a successful wealth management practice.

He was responsible for advising both high net-worth and institutional clients.

Prior to joining Oppenheimer, he served as a Vice President at Oscar Gruss & Son, an institutional NYSE member firm where he was

responsible for helping build the firm’s retail division.

His responsibilities included recruiting advisors, managing teams, and

sales and trading.

Prior to Oscar Gruss and Son, he spent four years at Gruntal and Co.

as V.P of Investments.

He started his financial

services career at Lehman Brothers two years earlier.

Khorassani has demonstrated extensive understanding of the capital markets

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

We believe Mr.

Khorassani is qualified

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

Hancox – Director

Hancox has served as a director since January 2025.

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

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

Previously, he co-founded

Katapult (NASDAQ:

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

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

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

His educational background includes

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

Institute of Banking and Finance (New York).

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

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

Originally from New Zealand, he

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

We believe Mr.

Hancox is qualified

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

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

investors (as defined therein), Messrs.

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

Board of Directors currently consists of five members.

All directors hold office until the next annual meeting of stockholders.

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Our Board of Directors has concluded that each of Messrs.

Oaks, Holbrook, McCain, and Mr.

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

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

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

Jemmett and Ms.

Smith are employee directors.

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

independent director.

Jemmett is an employee

Board of Directors has three standing committees:

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

members of our Audit Committee are Messrs.

McCain, Holbrook, and VanDeWeghe, with Mr.

current members of our Audit Committee are Messrs.

McCain, Hancox, and Balatsos with Mr.

McCain serving as the chair.

Each member of the

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

the rules of the SEC.

Each member of

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

Rules and the rules of the SEC.

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

McCain and Holbrook is considered an “audit

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

McCain, Hancox, and Balatsos is considered an

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

Former directors

Holbrook and Ernest M.

(Kiki) VanDeWeghe, III, served on the Audit Committee during fiscal year 2024 until their resignation

in January 2025.

Audit Committee was formed in 2021.

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The members of our Compensation Committee are Messrs.

Holbrook, VanDeWeghe,

and McCain, with Mr.

Holbrook serving as the chair.

Each member of the Compensation Committee meets the independence and other requirements

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

Hancox, and McCain, with Mr.

Khorassani serving as the chair.

Each member of the Compensation Committee meets the independence and

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

Former directors

Holbrook and Ernest M.

(Kiki) VanDeWeghe, III, served on the Compensation Committee during fiscal year 2024 until their

resignation in January 2025.

Compensation Committee was formed in 2021.

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have a standing Governance and Nominating Committee of our Board of Directors.

The current members of our Governance and Nominating Committee

Oaks, Holbrook and VanDeWeghe, with Mr.

VanDeWeghe serving as the chair.

The current members of our Governance and Nominating

Committee are Messrs.

Balatsos, Khorassani and Hancox, with Mr.

Hancox serving as the chair.

Each of Messrs.

Oaks, Holbrook and VanDeWeghe meets

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

rules of the SEC.

Balatsos, Khorassani and Hancox

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

Rules and the rules of the SEC.

Former directors

Holbrook, Ret.

General Robert C.

Oaks, and Ernest M.

(Kiki) VanDeWeghe, III, served on the Governance and Nominating

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

Governance and Nominating Committee was formed in 2021.

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

Delinquent Section 16(a)

Section 16(a) Reports

16(a) of the Exchange Act, requires officers and directors of our company and persons who beneficially own more than 10% of a registered

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

Trading Policy Disclosure

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

and employees.

We believe that our Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules,

and regulations and the exchange listing standards applicable to us.

A copy of our Insider Trading Policy is filed as Exhibit 19.1 to

this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

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

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

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

Fiscal 2024 Summary Compensation Table

following table shows the total compensation paid or accrued during the years ended December 31, 2024 and 2023 to our Chief Executive

Officer, and our next two most highly compensated executive officers who were serving as executive officers on December 31, 2024, (collectively,

our “named executive officers”).

Name and Principal Position

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

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

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

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

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

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

available to our similarly situated employees.

Smith, and Mr.

Young the amounts in this column consist of a

technology stipend ($825).

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

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following table summarizes the outstanding equity awards held by each named executive officer as of December 31, 2024.

Number of Shares Underlying Unexercised Options (#) Exercisable

Number of Shares Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

of Shares Underlying Unexercised Options (#) Exercisable

of Shares Underlying Unexercised Options (#) Unexercisable

Exercise Price ($)

Expiration Date

February 1, 2021 (1)

February 1, 2026

December 31, 2031

14, 2022 (1)(3)

January 14, 2032

February 1, 2021 (1)

February 1, 2026

December 31, 2021 (2)

December 31, 2031

January 14, 2022 (1)(3)

January 14, 2032

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

14, 2022 (1)(3)

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

subsequent 24-month period.

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

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

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

eligibility requirements.

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

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

We provided matching contributions made

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

applicable to highly compensated employees.

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

Internal Revenue Code

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

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

Policies and Practices

Related to the Grant of Certain Equity Awards

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

of material nonpublic information.

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

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

of affecting the value of executive compensation.

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

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

commencement of employment or promotion effective date.

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

of any material nonpublic information.

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

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

requirements.

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

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

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

Internal Revenue Code of 1986, as amended (the “Code”), enabling contributions by participants to the plan, and

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

Agreements with our Named Executive Officers

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

Jemmett and subsequently paid in equal installments on April 28,

May 31, and June 30, 2023.

Jemmett but has not yet been paid.

As of December 31, 2024, $34,142

of base salary was accrued and unpaid to Mr.

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

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

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

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

Smith is also eligible to participate in our

standard benefit plans.

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

Smith but has not yet been paid.

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

is also eligible to participate in our standard benefit plans.

On June 18, 2021, we appointed Ms.

Smith to serve as Chief Financial Officer.

The terms of the original Smith

Employment Agreement remained in force.

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

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

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

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

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

Young is also eligible to participate

in our standard benefit plans.

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

was accrued for Mr.

Young but has not yet been paid.

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

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

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

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General Robert C.

Stephen Scott (3)

(Kiki) VanDeWeghe, III

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which are included in our Annual Report on Form 10-K for the year ended December 31, 2024.

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

our strategic and business development, and sales and marketing.

In July 2023, we entered into a new independent consulting

agreement with Mr.

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

Scott resigned as a Director

on May 10, 2023.

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

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

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

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

Beneficial ownership is determined in accordance with the

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

We deem shares of common stock that may be acquired

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

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

percentage ownership of any other person shown in the table.

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

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

them based on information provided to us by these stockholders.

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

outstanding on April 5, 2024.

following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 24, 2025 for

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

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

Beneficial ownership is determined in accordance with

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

We deem shares of common stock that may

be acquired by an individual or group within 60 days of March 24, 2025 pursuant to the exercise of options or warrants to be outstanding

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

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

Except as indicated in footnotes to this table, we believe

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

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

Percentage of ownership is based on 16,458,933

shares of common stock outstanding on March 24, 2025.

Ownership of Certain Beneficial Holders

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Amount and Nature of

Beneficial Ownership

Jemmett Enterprises, LLC

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Amount and Nature of

Beneficial Ownership

4,629,001 (4)

General Robert C.

Kiki VanDeWeghe

& Executive Officers as a Group (8 persons)

Phillip Balatsos

Mohsen (Michael) Khorassani

Andrew Hancox

Directors & Executive Officers as a Group (7 persons)

5,347,912 (7)

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

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

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

of 66,955 shares issuable upon exercise of options exercisable within 60 days after March 24, 2025.

of (i) 25,001 shares held indirectly as executor of the Andrew and Lucy McCain Family Trust, for which Mr.

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McCain has voting and dispositive power;

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

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

and (iv) 333,333 shares issuable

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

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

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

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

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

equity compensation plans as of December 31, 2024:

of Securities to be Issued Upon Exercise of Outstanding Options

Weighted-Average

Exercise Price of Outstanding Options

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

compensation plans approved by security holders

compensation plans not approved by security holders

Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options

Weighted-Average Exercise Price of Outstanding Options

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

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

10 unchanged sentences

Consulting Agreement with Stephen Scott

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

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

Scott received a consulting

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

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

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

Scott received a consulting fee of $11,500 per month for such services until July 2023.

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

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

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

M&A for a period of one year.

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

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

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

respectively.

Scott, as amended in June 2024, to provide, on a

non-exclusive basis, advisory and consulting services relating to our strategic and business development, intellectual property

development, banking relationships, and strategic mergers and acquisitions for a period of one year.

Scott will receive a consulting fee of

$15,000 per month for such services under the terms of this agreement.

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

consulting fees to Mr.

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

Services Agreement with Hensley Beverage Company

6 unchanged sentences

For the years ended December 31, 2024 and 2023, we received $2,283,995

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

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

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

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

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

Note Payable with Hensley Beverage Company

1 unchanged sentence

rate of 10.00% per annum.

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

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

At any time prior

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

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

split basis).

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

interest of $388,888.

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

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

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

During the year ended

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

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

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

Officer of Hensley & Company.

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

5 unchanged sentences

services rendered by SMC for the years ended December 31, 2024 and 2023:

Audit-related

Audit fees (1)

Audit-related fees (2)

All other fees (4)

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

1 unchanged sentence

with quarterly reviews for the quarters ended March 31, 2024 and 2023, June 30, 2024 and 2023, and September 30, 2024 and 2023.

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

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

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

benefit plan audit for the years ended December 31, 2024 and 2023.

fees consisted primarily of tax related advisory and preparation services.

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

Committee Pre-Approval Policies

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dated January 5, 2022

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

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

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

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

Second Amended and Restated Certificate of Incorporation of the Registrant

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

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

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

Second Amended and Restated By-laws of the Registrant

3 unchanged sentences

Form of Placement Agent Warrant

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

2019 Equity Incentive Plan, as amended

2 unchanged sentences

Jemmett dated September 30, 2019

Purchase Agreement and 5% Unsecured Convertible Note by the Registrant payable to Neil Stinchcombe dated October 27, 2021

Letter Agreement between the Registrant and Neil Stinchcombe dated March 27, 2023

Employment Agreement by and between Debra L.

Smith and the Registrant dated December 31, 2020

Employment Agreement by and between David A.

Bennett and the Registrant dated February 12, 2022

Employment Agreement by and between Ashley N.

Devoto and the Registrant dated December 23, 2021

Employment Agreement by and between Kyle J.

Young and the Registrant dated March 30, 2023

Form of Lockup Agreement

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

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

10% Unsecured Convertible Note by the Registrant payable to Hensley & Company, dated March 20, 2023

Employment Agreement by and between Kyle J.

Young and the Registrant dated March 30, 2023

2023 Equity Incentive Plan

1 unchanged sentence

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

Form of Intellectual Property Buy-Back Purchase Agreement

Form of Promissory Note

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

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

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

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

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

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

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

CISO Global, Inc.

Insider Trading Policy

Subsidiaries of the Registrant

Consent of Semple, Marchal & Cooper LLP

Consent of Baker Tilly Chile Ltda.

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Financial Officer (Principal Financial Officer and Principal Accounting Officer)

General Robert C.

(Kiki) VanDeWeghe, III

Phillip Balatsos

Mohsen (Michael) Khorassani

(Michael) Khorassani

Andrew Hancox

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024 AND 2023

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB

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

FINANCIAL STATEMENTS:

Consolidated Balance Sheets as of December 31, 2024 and 2023

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

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

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

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

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

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

include the consolidated balance sheets of Arkavia Networks SpA.

include the consolidated balance sheet of Arkavia Networks SpA.

and its wholly-owned subsidiaries Arkavia Networks Limitada and Arkavia

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

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

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

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

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

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

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

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

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

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

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

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

and the related notes (collectively

“combined financial statements”).

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

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

periods then ended.

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

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

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

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

the combined balance

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

(entities under

common ownership and management) as of December 31, 2023 and the related combined statements of operations, stockholder’s equity,

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

and the combined

balance sheet of NLT Networks, S.P.A., NLT Tecnologias, Limitada, NLT Servicios Profesionales, S.P.A.

and White and Blue Solutions, LLC

(entities under common ownership and management) as of December 31, 2023 and the related combined statements of operations, stockholders’

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

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

The combined financial statements of the South American

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

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

Those statements were audited

by another auditor whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the South

American Subsidiaries, is based solely on the report of the other auditors.

Concern Uncertainty

27 unchanged sentences

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

Semple, Marchal & Cooper, LLP

Semple, Marchal &

Public Accountants

have served as the Company’s auditor since 2019.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

AND SUBSIDIARIES

BALANCE SHEETS

December 31, 2023

December 31, 2022

Current Assets:

3 unchanged sentences

Prepaid expenses and other current assets

Contract assets

Contract asset

Assets of business held for sale

Total Current Assets

3 unchanged sentences

Prepaid cost of revenue, net of current portion

$ 104,496,815

LIABILITIES AND STOCKHOLDERS’ EQUITY

4 unchanged sentences

Loans payable

Line of credit

Derivative liability

Convertible notes payable

Convertible notes payable, related party

Convertible notes payable

Liabilities of business held for sale

Total Current Liabilities

4 unchanged sentences

Lease liability, net of current portion

Deferred tax liability

Total Liabilities

1 unchanged sentence

Stockholders’ Equity:

Common stock, $ .00001

Common stock, $ .00001 par value;

300,000,000 shares authorized;

and 9,697,921

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

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

Preferred stock, $ .00001 par value;

2 unchanged sentences

Additional paid-in capital

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

Accumulated translation adjustment

4 unchanged sentences

Total Liabilities and Stockholders’ Equity

$ 104,496,815

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

3 unchanged sentences

December 31, 2023

December 31, 2022

Security managed services

Professional services

Cybersecurity software

Total revenue

2 unchanged sentences

Professional services

Cybersecurity software

Cost of payroll

14 unchanged sentences

Other income (expense)

Loss on issuance of convertible notes

( 1,022,650 )

Change in fair value of derivative liability

Interest expense, net

( 3,584,172 )

( 2,266,573 )

Total other income (expense)

( 5,315,966 )

Loss before income taxes

( 2,020,653 )

Loss from continuing operations before income taxes

( 19,905,601 )

( 64,984,498 )

Benefit from income taxes

Loss from continuing operations

( 19,905,601 )

( 64,984,498 )

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

( 4,338,318 )

( 15,246,585 )

( 24,243,919 )

( 80,231,083 )

Foreign currency translation adjustment

2 unchanged sentences

$ ( 79,973,153 )

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

Net loss per common share - basic and diluted:

Continuing operations

Discontinued operations

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

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

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

9 unchanged sentences

Stock issued for cash

Exercise of options

Stock issued for SB Cyber acquisition

Stock issued as lending discount

Stock adjustment after reverse stock split

Relative fair value of warrants issued with convertible notes

Warrants issued to convertible notes placement agent

Repurchase of treasury stock related to disposition of assets

Foreign currency translation

Reclassification of foreign currency translation to net loss

( 1,320,177 )

( 24,243,919 )

Balance at December 31, 2024

1 unchanged sentence

$ ( 290,737 )

$ ( 182,262,606 )

Balance at January 1, 2023

1 unchanged sentence

$ ( 77,787,604 )

$ 153,170,351

$ ( 77,787,604 )

Stock based compensation - stock options

2 unchanged sentences

Exercise of options

Stock issued for cash in public offering

Stock issued for True Digital acquisition

Stock issued for acquisition

Stock issued for VelocIT acquisition

Stock issued for Red74 acquisition

Stock issued for Creatrix acquisition

Stock issued for CyberViking acquisition

Stock issued for CUATROi acquisition

Stock issued for NLT Secure acquisition

Stock issued for SB Cyber acquisition

Stock issued as lending discount

Foreign currency translation

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Impairment of goodwill

Loss on disposal

Change in fair value of derivative liability

Loss on issuance of convertible notes

Changes in operating assets and liabilities:

Accounts receivable, net

Accounts receivable

Contract assets

Prepaids and other current assets

( 2,625,108 )

Accounts payable and accrued expenses

Lease liability

Settlement liability

Deferred revenue

3 unchanged sentences

Cash flows from investing activities:

Purchases of property and equipment

Cash acquired/(paid) in acquisitions, net

( 5,536,697 )

Cash acquired in acquisitions, net

Proceeds from the sale of property and equipment

Purchases of property and equipment

Net cash used in investing activities

( 6,048,944 )

Cash flows from financing activities:

4 unchanged sentences

Proceeds from convertible note payable

Proceeds from line of credit

Payment on line of credit

Proceeds from lines of credit

Payment on lines of credit

( 1,067,713 )

Payment on loans payable

( 6,157,484 )

Payment on notes payable, related party

( 12,118,340 )

7 unchanged sentences

Cash and cash equivalents - end of the period

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

Cash from continuing operations

Cash from discontinued operations

Total cash and cash equivalents, end of period

Supplemental cash flow information:

2 unchanged sentences

Operating lease assets obtained in exchange for operating lease obligations

Common stock issued in True Digital acquisition

Common stock issued in Creatrix acquisition

Common stock issued in VelocIT acquisition

Common stock issued in RED 74 acquisition

Common stock issued in CyberViking acquisition

Common stock issued in CUATROi acquisition

Common stock issued in NLT Secure acquisition

Common stock issued in SB Cyber acquisition

Common stock issued in acquisition

Common stock issued as a lending discount

5 unchanged sentences

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

All dollar amounts are expressed in United States dollars.

dollar amounts are expressed in United States dollars.

of the Business

are a cybersecurity and compliance company comprised of highly trained and seasoned security professionals who work with clients to enhance

or create a better cyber posture in their organization.

We provide a full range of cybersecurity consulting and related services, encompassing

all three pillars of compliance, cybersecurity, and culture.

Our services include secured managed services, compliance services, security

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

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

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

We provide a full range of cybersecurity consulting,

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

cybersecurity, and organizational culture.

Our services include managed security, compliance services, security operations

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

certified forensics, technical assessments, and cybersecurity training.

We believe that culture is the foundation of every successful

cybersecurity and compliance program.

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

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

from a dedicated team of subject matter experts.

In contrast to the majority of cybersecurity firms that are focused on a specific technology

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

We continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the

best possible service for our clients.

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

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

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

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

technology and cybersecurity spending.

We believe that culture is the foundation of every

successful cybersecurity and compliance program.

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

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

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

In contrast to the majority of cybersecurity firms that are focused

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

highly sought-after topic experts.

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

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

We believe that bringing together a world-class team of

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

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

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

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

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

2 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS

The accompanying financial statements

have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal

course of business However, due to losses incurred, substantial doubt about the Company’s ability to continue as a going concern

We are evaluating strategies to

obtain the required additional funding for future operations.

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

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

However, we may be

unable to access further equity or debt financing when needed.

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

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

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

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

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

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

accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction

of liabilities in the normal course of business However, due to losses incurred, substantial doubt about the Company’s ability

to continue as a going concern exists.

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

These strategies may include, obtaining equity

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

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

As such, there can be no assurance that we

will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

ability for us to continue as a going concern is dependent upon our ability to successfully accomplish the plan described in the Growth

Strategy paragraph and eventually attain profitable operations.

The consolidated financial statements do not include any adjustments

to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable

to continue as a going concern.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

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

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

reverse stock split of our common stock.

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

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

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

share of CISO Global, Inc.

common stock, par value $ 0.00001 ,

shares they held as of the record date.

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

reverse stock split.

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

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

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

The record date for the reverse

stock split was the close of business on March 7, 2024, with share distribution occurring on March 8, 2024.

As a result of the reverse

stock split, stockholders received one share of CISO Global, Inc.

common stock, par value $ 0.00001 , for each 15 shares they held as of

the record date.

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

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

have also been adjusted.

Consolidation

11 unchanged sentences

accompanying consolidated financial statements.

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

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

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

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

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

security managed services and professional services.

With respect to

Security Managed Services, we provide culture education and enablement, tools and technology provisioning, data and privacy monitoring,

regulations and compliance monitoring, remote infrastructure administration, and cybersecurity services including, but not limited to,

antivirus and patch management.

With respect to Professional Services, we provide cybersecurity consulting, compliance auditing, vulnerability

assessment and penetration testing, and disaster recovery and data backup solutions.

managed services offerings typically are paid in advance of providing services.

We have determined that our contracts do not include

a significant financing component.

Payments received in advance of our performance are initially recorded as deferred revenue and then

recognized as revenue on a straight-line basis over the term of the contract.

Revenue is recognized net of allowances for applicable

transaction-based taxes collected from customers.

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

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

liabilities, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations, and

assumptions used in the Black-Scholes-Merton pricing model, such as expected volatility, risk-free interest rate, share price,

expected dividend rate, and the adequacy of insurance reserves.

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

security managed services, professional services, and

cybersecurity software.

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

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

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

With respect to professional services, we

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

data backup solutions.

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

designed to protect organizations from evolving cyber threats.

Their offerings encompass advanced threat detection, proactive monitoring,

and robust risk management to ensure enterprise security and compliance.

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

Managed Services

We have three distinct revenue streams under cybersecurity security managed

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

We derive revenue from risk and compliance by ensuring

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

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

We derive revenue from

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

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

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

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

their security needs.

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

obligation is satisfied.

We have determined the performance obligations for the following services:

and Compliance :

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

recognize revenue as earned based on time and material.

Cyber Defense Operations :

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

desk, vulnerability identification and patching, firewall management, etc.

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

parts are not viewed as being distinct, but rather a collection of interrelated parts that are combined to fill a functional need over

a period of time (managed IT service).

As such, the parts are not viewed as distinct as the parts are not separable in the contract.

We bill the client on a monthly basis under the annual contract, and revenue is recognized as earned ratably over the contract term.

Managed Services :

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

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

to generally as the “parts”)).

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

Revenue is recognized as earned based on time and materials.

We have two distinct revenue streams

under professional services:

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

We derive revenue from security

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

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

We also offer

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

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

We derive revenue from the sale of hardware

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

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

neutralizing threat actors who have breached their environments.

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

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

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

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

obligation is satisfied.

We have determined the performance obligations for the following services:

Security Testing and Training :

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

company as one performance obligation.

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

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

Response and Digital Forensics :

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

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

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

These parts are not viewed as being distinct.

We recognize revenue as earned based on time and material.

managed services revenue primarily consists of risk compliance, cyber defense operations, and secured managed services.

We consider these

services to be a single performance obligation, and revenue is recognized as services and materials are provided to the customer.

services revenue primarily consists of security testing and training, and incident response and digital forensics.

We consider these

services to be a single performance obligation, and revenue is recognized in the period in which the performance obligations are satisfied.

Cybersecurity

software revenue primarily consists of our internally developed cybersecurity software designed to provide a security management platform,

protect users from untrusted and malicious online threats, provide proactive security monitoring, and deliver continuous security assessments.

We consider these services to be a single performance obligation, and revenue is recognized in the period in which the performance obligations

are satisfied.

and Cash Equivalents

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

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

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

and any other factors considered appropriate.

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

for credit losses.

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

history, and any other factors considered appropriate.

Payments are generally due within 30 days of invoice.

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

of Long-Lived Assets

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

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

Recoverability of these assets is determined by comparing the forecasted

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

Fair value is determined based on discounted

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

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

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

Long-Lived and Finite-Lived Intangible Assets

intangible assets are amortized over the following estimated useful lives:

OF FINITE-LIVED INTANGIBLE ASSETS

property/technology

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

We annually evaluate the estimate remaining useful lives of our

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

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

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

Recoverability of these assets is determined by comparing

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

Fair value is

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

During the year ended December

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

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

– Goodwill and Other .

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

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

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

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

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

Goodwill is tested for

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

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

If the reporting unit does not pass the qualitative

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

The fair values of the reporting units are

estimated using a market approach.

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

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

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

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

and other intangible assets

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

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

We perform our annual impairment review of goodwill

at the reporting unit level.

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

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

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

We perform our impairment assessment

based on a quantitative analysis performed for our reporting unit.

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

amount of such assets may not be fully recoverable.

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

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

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

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

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

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

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

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

future periods.

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

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

and Marketing Costs

expense advertising and marketing costs as they are incurred.

Advertising and marketing expenses were $ 474,121 and $ 804,218 for the years

ended December 31, 2023 and 2022, respectively, and are recorded in operating expenses on the consolidated statements of operations.

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

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

Value Measurements

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

The carrying amount of loans and notes payable

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

notes approximates our incremental borrowing rate.

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

Level 3 inputs.

Significant unobservable inputs used in fair value measurement of the intangible assets include projected revenue, gross

profit and operating expenses, income tax rates, discount rates, royalty rates, and attrition rates.

The carrying amount of loans and notes payable approximate

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

our incremental borrowing rate.

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

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

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

Loss per Common Share

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years ended December 31, 2024 and 2023.

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

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

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

restated for all periods presented.

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

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

of the common shares:

OF SECURITIES EXCLUDED FROM DILUTED PER SHARE

March 8, 2024, we filed an amendment to our certificate of incorporation to effectuate a 1-for-15 reverse stock split .

Our shares of

outstanding common stock and earnings per share calculation have been retroactively restated for all periods presented.

The following

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

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

common shares:

SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE

December 31, 2024

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

For stock options

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

the Black-Scholes-Merton option pricing model.

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

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

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

For awards subject to service-based vesting conditions,

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

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

Forfeitures are recorded as

they are incurred.

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

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

Black-Scholes-Merton option pricing model.

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

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

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

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

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

For awards subject to service-based

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

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

are recorded as they are incurred.

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

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

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

We recognize the accounting grant date fair value of

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

Shares issued for services are measured

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

New shares are issued upon

the exercise of stock options.

We recognize the accounting grant date fair value of the

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

Shares issued for services are measured based on

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

New shares are issued upon the exercise

of stock options.

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

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

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

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

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

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

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SCHEDULE OF DEFERRED REVENUE

December 31, 2024

December 31, 2023

Security managed services

Professional services

Cybersecurity software

Total deferred revenue - current

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Total deferred revenue – long term

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

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

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

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

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

obligations, offset by $ 1,598,670

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

The deferred revenue

balance as of December 31, 2024 represents our remaining performance obligations that will be recognized as revenue over the period

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

OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE

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Professional services

Cybersecurity software

Total deferred revenue

functional and reporting currency is the U.S.

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

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

We translate assets and liabilities at period-end

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

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

We translated assets and liabilities at period-end

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

in which our company is the lessee are comprised of corporate offices and property and equipment.

All of the leases are classified as

operating leases.

We lease multiple office spaces with a remaining weighted average term of 3.76 years.

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

All of the leases are classified as operating leases.

Our office spaces have a remaining weighted average

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

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Issued Accounting Standards

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

2021-08, Business Combinations

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

The new guidance requires contract

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

had originated the contracts.

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

2022, and interim periods within those fiscal years.

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

Improvements to Income Tax

Disclosures,” or ASU 2023-09.

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

reconciliation and additional details on income taxes paid.

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

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

We do not expect the adoption of ASU

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

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

Disaggregation of Income Statement Expenses ASU 2024-03

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

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

beginning after December 15, 2027.

Early adoption is permitted.

The adoption of this standard did not have a material

impact on our consolidated financial statements.

Adoption of this guidance will result in additional disclosures, but

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

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

Debt with Conversion and Other Options.

ASU 2024-04 clarifies the

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

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

ASU 2024-04 is effective for reporting periods beginning

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

Early adoption is permitted for entities that have

adopted ASU 2020-06.

We do not expect the adoption of ASU 2024-04 to have a material impact on our consolidated financial statements.

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

Improvements to Reportable Segment Disclosures which expands

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

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

with early adoption permitted.

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

statement disclosures.

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

Improvements to Income Tax Disclosures to expand the disclosure

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

ASU 2023-09 is effective for our

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

W e are currently evaluating

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

4 – ACQUISITIONS

Digital Security, Inc.

January 5, 2022, we entered into the True Digital Stock Purchase Agreement with certain stockholders of True Digital and the True Digital

Merger Agreement with True Digital and certain of its other stockholders.

On January 19, 2022, the transactions contemplated by the True

Digital Stock Purchase Agreement and the True Digital Merger Agreement were consummated, with True Digital becoming a wholly owned subsidiary

of our company (the “True Digital Acquisition”).

True Digital’s outstanding common stock was exchanged for $ 6,153,000

in cash and 548,600 shares of our common stock.

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

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration

Tangible assets acquired:

Accounts receivable

Contract assets

Prepaid expenses and other current assets

Property and equipment

Total tangible assets

Intangible assets acquired:

Tradename - trademarks

Intellectual property

Total intangible assets

Assumed liabilities:

Accounts payable and accrued expenses

Deferred revenue

Line of credit

Loans payable

Loans payable - shareholder

Total assumed liabilities

Net assets acquired

and intangibles are not deductible for tax purposes.

June 1, 2022, we entered into a stock purchase agreement with the stockholders of Creatrix, pursuant to which Creatrix became our wholly

owned subsidiary.

We anticipate that this will expand our professional services offerings and capabilities.

Creatrix offers recognized

expertise in identity management as wells as systems integration and software engineering and specializes in biometrics, vetting, credentialing,

and case management.

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

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration paid

Tangible assets acquired:

Accounts receivable

Contract assets

Prepaid expenses and other current assets

Total tangible assets

Assumed liabilities:

Accounts payable and accrued expenses

Loans payable

Total assumed liabilities

Net assets acquired

is not deductible for tax purposes.

LLC Acquisition

July 1, 2022, we entered into a stock purchase agreement with the interest holders of CyberViking and its interest holders, pursuant

to which we acquired all of the issued and outstanding units of CyberViking, with CyberViking becoming a wholly owned subsidiary of our

We anticipate that this will expand our professional services offerings and capabilities.

CyberViking specializes in application

security services, incident response, and threat hunting as well as the creation and management of security operation centers.

did not acquire assets nor assume liabilities in our purchase of CyberViking, as a result the $ 1,836,320 of consideration paid is recognized

The goodwill is not deductible for tax purposes.

August 25, 2022, we entered into a stock purchase agreement with CUATROi and its partners, pursuant to which CUATROi became our wholly

owned subsidiary.

We anticipate that this will expand our professional services offerings and capabilities.

CUATROi is a cloud, managed

services provider and cybersecurity company with offices in South America.

aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated

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

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

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration paid

Tangible assets acquired:

Accounts receivable

Prepaid expenses and other current assets

Property and equipment

Total tangible assets

Intangible assets acquired:

Customer base

Total intangible assets

Assumed liabilities:

Accounts payable and accrued expenses

Loans payable

Total assumed liabilities

Net assets acquired

and intangibles are not deductible for tax purposes.

Secure Acquisition

September 1, 2022, we entered into a stock purchase agreement with NLT Secure and its interest holders, pursuant to which we acquired

all of the issued and outstanding units of NLT Secure becoming a wholly owned subsidiary of our company.

We anticipate that this will

expand our professional services offerings and capabilities.

NLT Secure provides a broad range of security solutions and managed services

to organizations throughout South America.

aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimate

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

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

as of the transaction date:

OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES

Consideration paid

Tangible assets acquired:

Accounts receivable

Prepaid expenses and other current assets

Property and equipment

Total tangible assets

Assumed liabilities:

Accounts payable and accrued expenses

Loans payable

Total assumed liabilities

Net liabilities assumed

is not deductible for tax purposes.

Improvements to Reportable Segment Disclosures,”

or ASU 2023-07.

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

ASU 2023-07 is

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

after December 15, 2024.

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

The additional disclosure requirements of

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

4 – DISPOSITIONS

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

(the “Arkavia SPA”) to sell 100 % of

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

in exchange for 194,267 shares of our common stock

owned by the owners of Southford Equities, Inc.

and nominal cash consideration ($ 1.00 dollar).

July 1, 2024, we entered into a Stock Purchase Agreement with CT Group, LP, Datadeck LP, Woodface, LP, VMT Technologies, LP and Quijote

Ventures, LP (the “CUATROi SPA”) to sell 100 % of the outstanding shares of our wholly owned subsidiaries Servicios Informaticos

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

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

($ 5.00 dollars).

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

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

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

and Blue Solutions LLC.

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

cash consideration ($ 1.00 dollar).

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

of our internally developed cybersecurity software.

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

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

As a result of the sale, we recorded

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

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

DISCONTINUED OPERATIONS BALANCE SHEETS AND INCOME STATEMENT

Cost of revenue

Operating expenses

Other expense

Loss from discontinued operations before income taxes

( 1,149,086 )

( 15,682,263 )

Benefit from income taxes

Loss on disposal, net of tax

( 3,189,232 )

Loss from discontinued operations

$ ( 4,338,318 )

$ ( 15,246,585 )

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

respectively.

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

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

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

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

developed for future deployment.

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

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

intellectual property rights to sell such software to our customers.

The license was exclusive for our use for the initial six

months of the agreement.

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

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

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

after twelve months.

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

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

of the intellectual property disposed of when we sold vCISO.

As a result, we entered into an Intellectual Property Buy-Back Purchase

Agreement in which we reacquired vCISO and all intellectual property we previously owned, in exchange for a Promissory Note with a principal

amount of $ 1,020,000 .

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

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

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

balance sheet.

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

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

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

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

5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

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Prepaid expenses

Prepaid taxes

Prepaid insurance

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accumulated depreciation

( 1,700,799 )

Property and equipment, net

1 unchanged sentence

7 – INTANGIBLE ASSETS AND GOODWILL

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

reporting units, United States and Latin America.

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

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

The valuation limitation from our

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

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

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

This charge is recorded as

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

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

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

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

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

units, we estimated fair values using a market approach.

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

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( 15,691,695 )

Goodwill acquired during year

Foreign currency translation adjustment

Impairment losses

( 35,933,364 )

Balance as of December 31, 2023

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( 51,625,059 )

Foreign currency translation adjustment

Impairment losses

( 45,194,717 )

Balance as of December 31, 2024

Accumulated impairment losses

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

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

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

amount of intangibles in the table below.

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

Statement of Operations and Comprehensive Loss.

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

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

The assumed cash flows from

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

There is uncertainty surrounding the revenue and cost growth factors for

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

likelihood of a future impairment.

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

( 51,625,059 )

assets, net are summarized as follows:

OF IDENTIFIABLE INTANGIBLE ASSETS

OF INTANGIBLE ASSETS

Gross Carrying Amount

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OF FUTURE AMORTIZATION EXPENSE

Future Amortization Expense

Amortization Expense

8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

12 unchanged sentences

Consulting Agreement with Stephen Scott

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

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

Scott receives a consulting

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

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

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

Scott received a consulting fee of $ 11,500

per month for such services until July 2023.

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

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

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

M&A for a period of one year.

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

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

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

Scott, as amended in July 2024, to provide, on a

non-exclusive basis, advisory and consulting services relating to our strategic and business development, intellectual property

development, banking relationships, and strategic mergers and acquisitions for a period of one year.

Scott will receive a consulting fee of

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

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

Scott in the amounts of $ 180,000

and $ 159,000 ,

respectively.

Note Payable – Related Party

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

bearing an interest rate of 10.00 %

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

rate of 10.00 % per annum.

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

At any time prior to or on the maturity date, Hensley & Company is permitted to convert all or any portion of

the outstanding principal amount and all accrued and unpaid interest thereon into shares of our common stock at a conversion price

per share ($ 1.20 on a pre-reverse split basis).

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

and as of December 31, 2023, we had accrued interest of $ 388,888 .

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

At any time prior

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

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

During the years ended

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

Accrued interest as of December 31,

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

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

of Hensley & Company.

Services Agreement with Hensley Beverage Company – Related Party

6 unchanged sentences

For the years ended December 31, 2024 and 2023, we received $ 2,283,995

$ 1,417,398 and $ 850,445 , respectively from Hensley Beverage Company for contracted services and had an outstanding receivable balance

of $ 152,213 and $ 15,737 as of December 31, 2023 and 2022, respectively.

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

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

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

10 - STOCKHOLDERS’ EQUITY

3 unchanged sentences

voting rights.

the years ended December 31, 2023 and 2022, we issued an aggregate of 1,782,658

shares of common stock ( 26,739,853 and 2,412,474 on a pre-reverse split basis) to investors for cash proceeds of $ 6,682,198

and $ 10,689,087 ,

respectively.

the years ended December 31, 2023 and 2022, we issued an aggregate of 366,667 and 60,655 shares

of common stock ( 5,500,000 and 909,819 on a pre-reverse split basis), respectively, to consultants, lenders, and vendors for services rendered.

January 18, 2022, we issued a warrant to the underwriter of our Form S-1 to purchase an aggregate 9,614

shares of our common stock ( 144,200 on a pre-reverse split basis).

The warrant is exercisable for a period of 5

years from the date of issuance at an exercise price of $ 75.00

per share ($ 5.00 on a pre-reverse split basis).

May 19, 2023, we completed a $ 4,000,000

registered direct offering of our common stock, pursuant to which 1,333,334

shares of our common stock ( 20,000,000 on a pre-reverse split basis) were issued.

In addition, we granted the placement agent

warrants to purchase 40,000

shares ( 600,000 on a pre-reverse split basis) of our common stock at a price of $ 3.75

per share ($ 0.25 on a pre-reverse split basis).

We have used the net proceeds from the offering to repay $ 2,000,000

in outstanding principal of short-term indebtedness and for general corporate purposes.

The warrant is exercisable at any time on or

after November 12, 2023, and expires on May

follow table summarizes warrant activity:

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

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

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

lenders, and vendors for services rendered.

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

shares and 224,945

shares of our common stock, respectively.

The warrants issued to the Purchasers and Placement Agent are exercisable for a period of five

years from the date of issuance with an exercise price of $ 1.00

per share and $ 1.66

per share, respectively.

following table summarizes warrant activity:

OF STOCK WARRANT ACTIVITY

Weighted Average

Exercise Price

Life (in years)

Outstanding at January 1, 2023

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Outstanding at December 31, 2023

Expired or cancelled

Outstanding at December 31, 2024

Exercisable at December 31, 2024

at January 1, 2023

at December 31, 2023

11 – STOCK-BASED COMPENSATION

Equity Incentive Plan

2023 Equity Incentive Plan (the “2023 Plan”), which replaces our 2019 Equity Incentive Plan (the “2019

Plan”), became effective on September 13, 2023.

The total number of shares of our common stock reserved and available for

delivery under the 2023 Plan at any time during the term of the 2023 Plan will be 2,666,667

shares ( 40,000,000 on a pre-reverse split basis) plus any remaining available for delivery under the 2019 Plan on the effective date

of the 2023 Plan.

As of the effective date of the 2023 Plan, there were 1,455,983

shares ( 21,839,752 on a pre-reverse split basis) remaining available for delivery under the 2019 Plan.

Therefore, as of September

13, 2023, there were an aggregate of 4,122,650

shares ( 61,839,752 on a pre-reverse split basis) reserved and available for delivery under the 2023 Plan.

In addition, to the extent

that any stock options pursuant to the 2019 Plan expire, terminate or are canceled or forfeited under the terms of the 2019 Plan,

the shares of common stock reserved for issuance pursuant to such stock options will become available for issuance under the 2023

granted options for the purchase of 326,512

and 1,049,489

shares of common stock ( 4,900,833 and 17,457,613 on a pre-reverse split basis) during the year ended December 31, 2023 and 2022,

respectively.

2023 Equity Incentive Plan (the “2023 Plan”), which replaced our 2019 Equity Incentive Plan (the “2019 Plan”),

became effective on September 13, 2023.

As of December 31, 2024, 4,814,330 shares were available for issuance under the 2023 Plan.

Plan Activity

applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions:

OF BLACK-SCHOLES STOCK OPTIONS GRANTED

the Year Ended

Risk free interest

For the Year Ended

December 31, 2024

December 31, 2023

Risk-free interest rate

3.78 % - 4.23 %

3.46 % - 4.79 %

Contractual term (years)

Expected volatility

96.30 % – 96.65 %

94.58 % - 136.47 %

Expected dividend yield

follow table summarizes stock option activity:

following table summarizes stock option activity:

OF STOCK OPTION ACTIVITY

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value of our common stock and the exercise price of the stock options.

compensation expense related to the options was $ 11,469,667 and $ 15,464,587 for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, there was future compensation expense of $ 16,337,762 with a weighted average recognition period of 1.85 years

related to the options.

The weighted-average grant-date fair value of options granted during the years 2023 and 2022 was $ 2.57 and $ 38.82 ,

compensation expense related to the options was $ 8,956,571

and $ 11,469,667

for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, there was future compensation expense of

with a weighted average recognition period of 0.99

years related to the options.

The weighted-average grant-date fair value of options granted during the years 2024 and 2023 was

respectively.

The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022, was $ 887,595 and $ 7,164,856 ,

The total intrinsic value of options exercised during the years ended December 31, 2024 and 2023, was zero

and $ 887,595 ,

respectively.

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and other contingencies when losses are probable and reasonably estimable.

are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any of our directors,

officers or affiliates, any owner of record or beneficially

of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest

adverse to us .

While the results of such normal course claims and legal proceedings, regardless of the underlying nature of

the claims, cannot be predicted with certainty, management believes, based on current knowledge and the likely timing of resolution

of various matters, any additional reasonably possible potential losses above the amounts accrued for such matters would not be

However, the outcome of claims, legals proceedings or investigations are inherently unpredictable and subject to

uncertainty, and may have an adverse effect on us because of defense costs, diversion of management resources and other factors that

are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any of our directors, officers

or affiliates, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party

adverse to us or has a material interest adverse to us .

While the results of such normal course claims and legal proceedings, regardless

of the underlying nature of the claims, cannot be predicted with certainty, management believes, based on current knowledge and the likely

timing of resolution of various matters, any additional reasonably possible potential losses above the amounts accrued for such matters

would not be material.

However, the outcome of claims, legals proceedings, or investigations are inherently unpredictable and subject

to uncertainty, and may have an adverse effect on us because of defense costs, diversion of management resources, and other factors that

are not known to us or cannot be quantified at this time.

We may also receive unfavorable preliminary or interim rulings in the

course of litigation, and there can be no assurances that favorable final outcomes will be obtained.

The final outcome of any

current or future claims or lawsuits could adversely affect our business, financial condition or results of operations.

periodically evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued

or the reasonably possible losses that we have disclosed, and make adjustments as appropriate.

We may also receive unfavorable preliminary or interim rulings in the course

of litigation, and there can be no assurances that favorable final outcomes will be obtained.

The final outcome of any current or future

claims or lawsuits could adversely affect our business, financial condition, or results of operations.

We periodically evaluate developments

in our legal matters that could affect the amount of liability that has been previously accrued or the reasonably possible losses that

we have disclosed, and make adjustments as appropriate.

are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business.

11 unchanged sentences

We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals.

of December 31, 2023 and 2022, our accrual for estimated indirect tax liabilities was $ 793,347 and $ 409,187 , respectively, reflecting

our best estimate of the potential liability based on an analysis of our business activities, revenues subject to indirect taxes, and

applicable regulations.

Although we believe our indirect tax estimates and associated liabilities are reasonable, the final determination

of indirect tax audits, litigation, or settlements could be materially different than the amounts established for indirect tax contingencies.

of December 31, 2024 and 2023, our accrual for estimated indirect tax liabilities was $ 32,959 and $ 53,277 , respectively, reflecting our

best estimate of the potential liability based on an analysis of our business activities, revenues subject to indirect taxes, and applicable

Although we believe our indirect tax estimates and associated liabilities are reasonable, the final determination of indirect

tax audits, litigation, or settlements could be materially different than the amounts established for indirect tax contingencies.

services are generally warranted to deliver and operate in a manner consistent with general industry standards that are reasonably applicable

15 unchanged sentences

December 31, 2023

Term loans (US dollar denominated)

3.62 % – 100.00 %+

Term loans (Chilean peso denominated)

3.48 % - 19.20 %

Less current portion

2 unchanged sentences

Long term loans payable

entered into a bridge loan with Bell Bank (the “Bell Bank Note”), secured by substantially all of our assets, in the

principal amount of $ 5,000,000

bearing an interest rate of 4.00 %

per annum payable monthly with a maturity date of December

14, 2022 , which was extended to March 14, 2023.

We did not repay this bridge loan on the maturity date, which resulted in an

event of default under the terms thereof.

As a result, the interest rate applicable to amounts due under this bridge loan increased

This bridge loan was repaid in full on March 20, 2023.

We recorded interest expense of $ 116,667

and $ 114,167

for the years ended December 31, 2023 and 2022, respectively, and had accrued interest of zero

as of December 31, 2023 and 2022, respectively.

subsidiaries in the United States are borrowers under certain term loans.

subsidiaries are borrowers under certain term loans.

These term loans require monthly principal and interest payments.

The term loans are secured by various assets owned by our subsidiaries.

loans are secured by various assets owned by our subsidiaries.

We recorded aggregate interest expense of these term loans of $ 4,547

$ 20,605 and $ 50,754 for the years ended December 31, 2023 and 2022, respectively.

Accrued interest for the loans was zero and $ 13,435

as of December 31, 2023 and 2022, respectively.

for the years ended December 31, 2024 and 2023, respectively.

Accrued interest for the loans was zero

as of December 31, 2024 and 2023.

The aggregate effective interest rate of the terms loans was 3.62 %

Latin America subsidiaries are the borrowers under certain term loans denominated in Chilean Pesos.

These term loans require monthly

principal and interest payments.

The loans are secured by various assets owned by our subsidiaries.

We recorded aggregate interest expense

on these term loans of $ 617,804 and $ 318,055 for the years ended December 31, 2023 and 2022, respectively.

The aggregate effective interest

rate of these term loans was 11.15 %.

March 2023, we entered into a cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000 and paid $ 87,500 in

upfront fees.

The terms of the cash advance agreement called for us to remit aggregate weekly payments of $ 99,398 until such time as

we had repaid $ 2,870,000 .

This cash advance agreement was secured by the accounts receivable of CISO Global Inc.

and our wholly owned

subsidiaries, Talatek, LLC and True Digital Security, Inc.

We recorded interest expense of $ 978,833 for the year ended December 31, 2023.

August 2023, we entered into a second cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000 and paid $ 50,000

for the year ended December 31, 2024.

March 2023, we entered into a cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000

and paid $ 87,500

in upfront fees.

The terms of the second cash advance agreement called for us to remit weekly payments of $ 80,588 until such time as

we had repaid $ 2,740,000 .

This cash advance agreement was secured by the accounts receivable of CISO Global Inc.

and our wholly owned

subsidiaries, Talatek, LLC and True Digital Security, Inc.

We recorded interest expense of $ 468,707 for the year ended December 31, 2023.

November 2023, we entered into a business loan and security agreement, pursuant to which we obtained a loan with a principal amount

of $ 2,200,000

and paid an origination fee of $ 44,000 .

The business loan bears interest at a rate of 53.44 %

per annum and is payable in 52 weekly installments of $ 53,731 .

We may prepay the loan in whole or in part, but partial repayments do not reduce the total interest payable on the loan, of $ 594,000 .

The business loan is secured by all of the assets of our US subsidiaries.

The proceeds of the loan were used to repay in full the

amount owned under our cash advance agreements that we entered into in March and August 2023.

The terms of the cash advance agreement called for us to remit aggregate weekly payments of $ 99,398

until such time as we had repaid $ 2,870,000 .

This cash advance agreement was secured by the accounts receivable of us and our wholly owned subsidiaries, Talatek, LLC and True

Digital Security, Inc.

This loan was repaid in full in 2023.

We recorded interest expense of $ 978,833

for the year ended December 31, 2023.

August 2023, we entered into a second cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000

and paid $ 50,000

in upfront fees.

The terms of the second cash advance agreement called for us to remit weekly payments of $ 80,588

until such time as we had repaid $ 2,740,000 .

This cash advance agreement was secured by the accounts receivable of us and our wholly owned subsidiaries,

Talatek, LLC and True Digital Security, Inc.

This loan was repaid in full in 2023.

We recorded interest expense of $ 468,707

connection with the business loan, we entered into a fee agreement pursuant to which we issued 133,334

shares ( 2,000,000 on a pre-reverse split basis) of our common stock as partial consideration for the lender to enter into the

business loan and extend credit to us.

We recorded the issuance of our common stock as a discount to the business loan, which is

amortized using the effective interest method over the term of the loan.

for the year ended December 31, 2023.

November 2023, we entered into a business loan and security agreement, pursuant to which we obtained a loan with a principal amount of

$ 2,200,000 and paid an origination fee of $ 44,000 .

The business loan bears interest at a rate of 53.44 % per annum and is payable in 52

weekly installments of $ 53,731 .

The business loan is secured by all of the assets of our US subsidiaries.

The proceeds of the loan were

used to repay in full the amount owned under our cash advance agreements that we entered into in March and August 2023.

For the years

ended December 31, 2024 and 2023, we recorded interest expense of $ 564,529 and $ 200,881 , respectively.

connection with the business loan, we entered into a fee agreement pursuant to which we issued 133,334 shares of our common stock as

partial consideration for the lender to enter into the business loan and extend credit to us.

We recorded the issuance of our common

stock as a discount to the business loan, which is amortized using the effective interest method over the term of the loan.

March 28, 2024, under a troubled debt restructuring, we entered into a Business Loan and Security Agreement (the “Loan Agreement”

with LendSpark Corporation (the “Lender”), pursuant to which we obtained a restructured loan with a principal amount of $ 2,200,000

(the “Restructured Loan”) from the Lender.

Pursuant to the Loan Agreement, we paid the Lender a $ 44,000 origination fee.

The Restructured Loan bears interest at a rate of 51.73 % per annum and is payable in 52 weekly installments of $ 53,308 , commencing on

April 5, 2024.

to the Loan Agreement, we granted the Lender a security interest in all if our assets and the assets of our U.S.

subsidiaries (the

“Collateral”) that is secondary to the security interest held by Aion Financial Technologies, Inc.

Upon the occurrence of an event of default, the

Lender may, among other things, accelerate the Loan and declare all obligations immediately due and payable or take possession of

the Collateral.

connection with the Restructured Loan, we entered into a Fee Agreement (the “Fee Agreement”) with the Lender pursuant to

which we issued 100,000

shares of our common stock, as partial consideration for the Lender’s agreement to enter into the Loan Agreement and extend

credit to us.

The Fee Agreement contains customary representations, warranties, agreements and obligations of the parties.

year ended December 31, 2024, we recorded interest expense of $ 683,480 .

This loan was repaid in full on March 26, 2025.

June 2024, we entered into a Subordinated Business Loan and Security Agreement with Agile Capital Funding, LLC

(“Agile”), pursuant to which we obtained a loan with a principal amount of $ 2,000,000

plus an administrative agent fee paid of $ 100,000 .

The Subordinated Business Loan was in excess of 100 %

per annum and is payable in 30 weekly installments.

The first four installments due were $ 75,000

followed by 26 installments of $ 103,154 .

For the year ended December 31, 2024, we recorded interest expense of $ 1,026,058 .

to the Subordinated Business Loan Agreement, we granted Agile a security interest in the Collateral that is tertiary to the security

interest held by Aion and LendSpark.

Upon the occurrence of an event of default, Agile may, among other things, accelerate the

Subordinated Business Loan and declare all obligations immediately due and payable or take possession of the Collateral.

proceeds from the Subordinated Business Loan for general corporate purposes, which includes working capital, capital expenditures,

and repayment of debt.

This loan was repaid in full in February 2025.

November 2024, we entered into a Note Purchase Agreement, pursuant to which we obtained a loan with a principal amount of $ 540,000 and

paid an original issue discount of $ 140,000 .

The effective interest rate on Note Purchase Agreement exceeded 100 % per annum.

matured on January 1, 2025 and was repaid in full..

January 31, 2024, we entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Aion, pursuant to which we may borrow up to $ 3,500,000 .

The amount available for borrowing at any one time is limited

to 80 % of our eligible accounts receivable.

The Loan and Security Agreement will bear interest at a rate of 19.25 % per annum (based on

a 360-day year), payable on the first business day of each month following the accrual thereof.

The Loan and Security Agreement, together

with accrued and unpaid interest thereon, is due on January 30, 2025 (the “Maturity Date”).

Upon providing 30 days written

notice we may terminate the Loan and Security Agreement, subject to an early termination fee of $ 35,000 .

Upon the occurrence of an “Event

of Default” (as defined in the Loan Security Agreement and including the failure to make required payments when due after specified

grace periods, certain breaches and certain specified insolvency events), Aion would have the right to accelerate payments due, which

from after such acceleration would bear interest at a default rate of 29.25 % per annum.

The Loan and Security Agreement is secured by

used proceeds from the Loan and Security Agreement to repay our business loan entered into November 2023 and may use for general corporate

purposes, which includes working capital, capital expenditures, and repayment of debt.

For the year ended December 31, 2024, we recorded

interest expense of $ 374,521 .

Accrued interest as of December 31, 2024 was zero .

Notes Payable

October 2021, we issued to Neil Stinchcombe, a convertible note in the principal amount of $ 1,500,000

bearing an interest rate of 5.00 %

per annum payable at maturity with a maturity date of January

27, 2022 , with a conversion price of $ 75.00

per share ($ 5.00 on a pre-reverse split basis).

On March 10, 2022, we entered into Amendment #1 to the note pursuant to which the maturity date was extended to October

On March 27, 2023, we entered into a letter agreement with Neil Stinchcombe to resolve certain payment terms of his

convertible note.

We agreed to repay the principal amount of the note in three equal installment payments of $ 500,000

on each of March 31, April 28 and May 31, 2023, with accrued interest to be paid on May 31, 2023 at the note’s reflected

interest rate of 5.00 %

The principal amount of this note, plus all accrued interest was repaid in full under the terms of the letter agreement.

For the years ended December 31, 2023 and 2022, we recorded interest expense (recovery) of ($ 16,970 )

and $ 106,507 .

June 2022, we issued an unsecured convertible note payable in the principal amount of $ 1,000,000

bearing an interest rate of 5.00 %

per annum payable monthly with a maturity date of June 2023, with a conversion price of $ 117.45 ($ 7.83 on a pre-reverse split basis).

outstanding principal of this note can be redeemed at any time by us or at maturity at 105% .

At maturity in June 2023, we

repaid the unpaid accrued interest on this convertible note and rolled the principal amount of $ 1,050,000

into a new convertible note with the lender.

We recorded interest expense of $ 22,101

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

June 2023, we issued an unsecured convertible note in the principal amount of $ 1,050,000 bearing an interest rate of 10.00 % per annum

payable monthly.

The principal amount, together with accrued and unpaid interest is due on June 7, 2024 .

The principal amount, together with accrued and unpaid interest was due on June 7, 2024 .

At any time prior to or on the

4 unchanged sentences

31, 2023 was $ 61,954 .

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

bearing an interest rate of 10.00 %

June 2024, we entered into Amendment #1 to extend the maturity date of the $ 1,050,000 unsecured convertible note to December 15, 2024.

In exchange for an extension of the maturity date, we agreed to repay on September 30, 2024 , all accrued, but unpaid interest as of June

30, 2024 on the convertible note.

All remaining accrued, but unpaid interest was due at maturity on December 15, 2024.

December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,050,000 unsecured convertible note to December 15,

In exchange for the extension of the maturity date, interest beginning from the date of Amendment #2 increased to 12.00 % per annum

and $ 25,000 of accrued interest to be repaid on or before December 31, 2024, with remaining accrued interest due on or before March 31,

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

rate of 10.00 % per annum.

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

At any time prior to or on the maturity date, Hensley & Company is permitted to convert all or any portion of

the outstanding principal amount and all accrued but unpaid interest thereon into shares of our common stock at a conversion price

per share ($ 1.20 on a pre-reverse split basis).

During the year ended December 31, 2023, we recorded interest expense of $ 388,888 .

Accrued interest as of December 31, 2023 was $ 388,888 .

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

October 2023, we issued an unsecured convertible note in the principal amount of $ 1,000,000

bearing an interest rate of 12.00 %

per annum payable monthly.

At any time prior

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

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

During the years ended

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

Accrued interest as of December 31,

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

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

of Hensley & Company.

October 2023, we issued an unsecured convertible note in the principal amount of $ 1,000,000 bearing an interest rate of 12.00 % per annum

payable monthly.

The principal amount, together with accrued and unpaid interest is due on October 12, 2024 .

At any time prior to or on the maturity date the holder is permitted to convert all of the outstanding principal

amount into shares of our common stock at a conversion price of $ 1.7595

per share ($ 0.1173 on a pre-reverse split basis).

We recorded interest expense of $ 26,983

for the year ended December 31, 2023.

Accrued interest as of December 31, 2023 was $ 26,983 .

At any time prior to or

on the maturity date the holder is permitted to convert all of the outstanding principal amount into shares of our common stock at a

conversion price of $ 1.7595 per share.

We recorded interest expense of $ 26,983 for the year ended December 31, 2023.

Accrued interest

as of December 31, 2023 was $ 26,983 .

June 2024, we entered into Amendment #1 to extend the maturity date of the $ 1,000,000 unsecured convertible note to December 15, 2024.

In exchange for an extension of the maturity date, we agreed to repay on September 30, 2024 , all accrued, but unpaid interest as of June

30, 2024 on the convertible note.

All remaining accrued, but unpaid interest was due at maturity on December 15, 2024.

December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,000,000 unsecured convertible note to December 15,

In exchange for the extension of the maturity date, interest beginning from the date of Amendment #2 increased to 12.00 % per annum

and $ 25,000 of accrued interest to be repaid on or before December 31, 2024, with remaining accrued interest due on or before March 31,

November 2024, we entered into an Intellectual Property Buy-Back Purchase Agreement (the “Buy-Back Agreement”), pursuant

to which we reacquired vCISO, LLC in exchange for a Promissory Note with a face value $ 1,020,000 and bears interest of 8.00 % per annum.

The Promissory Note matures in November 2025.

We may not prepay any principal amount due under this Promissory Note without the consent

of the holder.

For the year-ended December 31, 2024, we recorded interest expense of $ 11,136 , and accrued interest as of December 31,

2024 was $ 11,136 .

December 2024, we entered into a Securities Purchase Agreement (the “Agreement”) with several purchasers (the “Purchasers”).

Pursuant to the Agreement, the Purchasers agreed to purchase an aggregate of up to $ 8,125,000 , including convertible notes and warrants

to purchase our common stock.

The convertible notes have a face value of up to $ 8,125,000 and was subject to an original issue discount

The convertible notes do not bear a stated rate of interest and mature one year from the date of issuance.

The effective interest

rate of these convertible notes exceeds 100 % per annum.

At any time prior to or on the maturity date, the Purchasers, may in part or

in whole convert the outstanding principal amount into shares of our common stock at a Conversion Price equal to 90 % of the lowest volume

weighed average price of our common stock during the ten Trading Day period immediately preceding the Conversion Date.

At no time shall

the Conversion Price be below $ 0.394 per share.

Agreement initially funded us with gross proceeds of $ 3,125,000 .

Funding of the remaining $ 5,000,000 was contingent upon the effectiveness

of a change in majority of directors of CISO Global, which occurred on January 7, 2025, at which time we received the remaining

unfunded amount.

issued 6,500,000

warrants pursuant to the Agreement to purchase shares of our common stock with an exercise price of $ 1.00

initially recorded these convertible notes at a fair value of zero , recognized the fair value of a derivative liability of $ 1,509,844 ,

and recorded a loss of $ 1,022,650 upon issuance of the Agreement, as our issuances costs exceeded the fair value of the convertible notes.

The allocation of fair value to the convertible notes was made on a relative fair value basis as the free-standing warrants issued in

connection with the Agreement are equity classified.

We accreted interest expense using the effective interest method over the expected

term of the Agreement through December 31, 2024.

For the year ended December 31, 2024, we accreted interest expense of $ 2 .

conversion feature of the Agreement was determined to be an embedded derivative requiring bifurcation accounting as (1) the feature is not clearly and

closely related to the debt host and (2) the feature meets the definition of a derivative under ASC 815 and has been record at

fair value on our balance sheet.

Subsequent changes in the fair value of embedded derivative flows through the Statements of Operations.

proceeds from the Agreement will be used to repay outstanding principal amounts of short-term indebtedness and for general corporate

purposes, which may include working capital, capital expenditures, research and development, acquisitions of additional companies or

technologies, and investments.

minimum payments under the above debt instruments following the year ended December 31, 2024, are as follows:

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( 3,158,266 )

Long term debt, net

( 11,682,030 )

term debt, net

the years ended December 31, 2024 and 2023, we recognized additional ROU assets and lease liabilities of $ 60,215 and $ 733,782 , respectively.

25 unchanged sentences

Present value of net future minimum lease payments

15 – FAIR VALUE MEASUREMENT

following table sets forth our material liabilities measured and recorded at fair value on a recurring basis:

OF FAIR VALUE MEASUREMENT

December 31, 2024

Quoted prices in active markets for identical assets

Significant other observable inputs

Significant unobservable inputs

Current liabilities

Derivative liability

Total liabilities measured at fair value

estimated fair value of the conversion feature of the derivative liability is based on Monte Carlo simulations, a traditional valuation

The derivative liability component of the convertible notes are classified as Level 3 due to significant unobservable inputs.

16 – INCOME TAXES

the years ended December 31, 2023, and 2022, the income tax benefit consisted of the following:

INCOME TAX BENEFIT

Year Ended December 31,

Total current income taxes

Total deferred income taxes

No current or deferred income tax benefit or expense was recognized in the years ended December 31, 2024 and 2023.

reconciliation of the statutory federal income tax benefit to actual tax benefit for the years ended December 31, 2024 and 2023 is as

SCHEDULE OF STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT

Ended December 31,

tax benefit at statutory rate

in valuation allowance

to provision adjustments

Year Ended December 31,

Computed tax benefit at statutory rate

Stock-based compensation

Change in valuation allowance

Return to provision adjustments

Effective tax rate

tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows

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SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Ended December 31,

and equipment

for doubtful accounts

operating loss carryforwards

payable and accrued liabilities

Year Ended December 31,

Deferred tax assets:

deferred income taxes

tax liabilities

deferred tax liabilities

Intangible assets

Allowance for doubtful accounts

Net operating loss carryforwards

Stock-based compensation

Accounts payable and accrued liabilities

Goodwill impairment

Total deferred tax assets

Valuation allowance

( 31,165,400 )

( 26,452,500 )

Net deferred income taxes

Deferred tax liabilities

deferred tax liability by jurisdiction

Property and equipment

Prepaid expenses

Total deferred tax liabilities

Net deferred tax liabilities

account for deferred taxes under ASC 740, Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by

9 unchanged sentences

is commensurate with the extent to which it can be objectively verified.

We have provided a valuation allowance

for our net deferred tax assets at December 31, 2023 and 2022, due to the uncertainty surrounding the future realization of such assets

and the cumulative losses we have generated.

Therefore, no benefit has been recognized in the financial statements for the net operating

loss carryforwards and other deferred tax assets.

During the years ended December 31, 2023 and 2022, respectively, the valuation allowance

increased by $ 27,607,085 and decreased by $ 4,555,842 , respectively.

As of December 31, 2023, we had

approximately $ 34,870,734 of consolidated federal net operating loss carryforwards and $ 39,385,617 of apportioned state net operating

loss carryforwards available to offset future taxable income, respectively.

If unused, the federal and state net operating loss carryforwards

will begin to expire in 2032.

Additionally, we had $ 3,579,475 of net operating loss carryforwards from our subsidiaries located in Latin

America, primarily within Chile.

An indefinite carryforward of losses is allowed in Chile.

The net operating loss carryforward in Peru

will begin to expire in 2026.

have provided a valuation allowance for our net deferred tax assets at December 31, 2024 and 2023, due to the uncertainty surrounding

the future realization of such assets and the cumulative losses we have generated.

Therefore, no benefit has been recognized in the financial

statements for the net operating loss carryforwards and other deferred tax assets.

During the years ended December 31, 2024 and 2023,

respectively, the valuation allowance increased by $ 4,712,900 and $ 22,344,508 , respectively.

of December 31, 2024, we had approximately $ 42,059,091 of consolidated federal net operating loss carryforwards and $ 39,977,845 of apportioned

state net operating loss carryforwards available to offset future taxable income, respectively.

If unused, the federal and state net

operating loss carryforwards will begin to expire in 2032.

of net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations

3 unchanged sentences

We will perform an analysis as soon

as is practicable to determine the extent of limitations, especially in regard to our subsidiaries.

as is practicable to determine the extent of limitations.

It is possible that additional limitations

1 unchanged sentence

file federal and state income tax returns in jurisdictions with varying statutes of limitations.

With few exceptions, we are no

longer subject to federal or state income tax examinations by tax authorities for tax years prior to 2022 and 2021, respectively.

believe our income tax filing positions and deductions are more likely than not to be sustained on audit.

Therefore, no liabilities

for uncertain tax positions have been recorded.

With few exceptions, we are no longer

subject to federal or state income tax examinations by tax authorities for tax years prior to 2022 and 2021, respectively.

our income tax filing positions and deductions are more likely than not to be sustained on audit.

Therefore, no liabilities for uncertain

tax positions have been recorded.

of the date of this filing, we have not filed our 2024 federal and state income tax returns.

1 unchanged sentence

as practicable.

NOTE 16 – DEFINED CONTRIBUTION

On January 1,

2023, we began sponsoring a defined contribution 401(k) plans covering eligible U.S.

employees, who may contribute up to 80 % of

their compensation, subject to limitations established by the Internal Revenue Code.

We match employee contributions on a

discretionary basis.

Expense for our matching contributions was $ 637,365 during 2023.

17 – DEFINED CONTRIBUTION PLAN

sponsor a defined contribution 401(k) plans covering eligible U.S.

employees, who may contribute up to 80 % of their compensation, subject

to limitations established by the Internal Revenue Code.

We matched employee contributions on a discretionary basis in 2023 and amended

our plan in 2024 to remove the matching feature.

Expenses for our matching contributions were zero and $ 637,365 for the years-ended December

31, 2024 and 2023.

18 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

1 unchanged sentence

Although we deposit cash

with multiple banks, these deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided

on such deposits.

These deposits may generally be redeemed upon demand and bear minimal risk.

with multiple banks, these deposits may exceed the amount of insurance provided on such deposits.

These deposits may generally be redeemed

upon demand and bear minimal risk.

single customer represented over 10 % of our total revenue for the years ended December 31, 2024 and 2023.

18 – GEOGRAPHIC INFORMATION

by geography is based on the customer’s billing address and was as follows:

OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS

All other countries

other international country represented more than 10% of revenue in any period presented.

and equipment, net by geography was as follows:

OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS

All other countries

Property and equipment net

other international country represented more than 10% of property and equipment, net in any period presented.

19 – ACCUMULATED OTHER COMPREHENSIVE LOSS

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Amounts reclassified from AOCI

( 1,320,177 )

Balance as of December 31, 2024

20 – SEGMENT INFORMATION

Chief Operating Decision Maker (“CODM”), as of December 31, 2024, was our Chief Executive Officer.

Our CODM evaluates the

performance of and allocates resources to our segment based on our consolidated net loss and earnings before interest, taxes, depreciation

and amortization (Segment EBITDA).

Segment EBITDA is defined as segment revenue less operating costs and expenses, excluding depreciation

and amortization interest income or expense (net), provision or benefit for income taxes, change in fair value of derivative liabilities,

loss on issuance of convertible notes, impairment of goodwill and intangible assets, and stock-based compensation expense.

Segment EBITDA serves as a measure that assists our CODM and our investors in comparing our segment performance on a consistent basis.

loss and Segment EBITDA are used to monitor budgeted versus actual results.

Additionally, review of budgeted versus actual results is

used in assessing performance of the segment.

CODM does not use assets by segment to evaluate performance or allocate resources;

therefore, we do not provide disclosure of assets

following table presents our segment information for the periods indicated and, because we currently only have one segment, net loss

is identical to the information presented in our “Consolidated Statement of Operations” above:

OF SEGMENT INFORMATION

Year Ended December 31,

Net loss from continuing operations

$ ( 19,905,601 )

$ ( 64,984,498 )

Impairment of goodwill

Impairment of intangible assets

Loss on issuance of convertible notes

Interest expense, net

Depreciation and amortization

Stock-based compensation

Change in fair value of derivative liabilities

Segment EBITDA

$ ( 3,339,465 )

$ ( 11,717,372 )

21 – SUBSEQUENT EVENTS

January 31, 2024, we entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Aion Financial Technologies,

(“Aion”), pursuant to which we may borrow up to $ 3,500,000 .

The amount available for borrowing at any one time is limited

to 80% of our eligible accounts receivable.

The Loan and Security Agreement will bear interest at a rate of 19.25 % per annum (based a

360-day year), payable on the first business day of each month following the accrual thereof.

The Loan and Security Agreement, together

with accrued and unpaid interest thereon, is due on January 30, 2025 (the “Maturity Date”).

Upon providing 30 days written

notice we may terminate the Loan and Security Agreement, subject to an early termination fee of $ 35,000 .

Upon the occurrence of an “Event

of Default” (as defined in the Loan Security Agreement and including the failure to make required payments when due after specified

grace periods, certain breaches and certain specified insolvency events), Aion would have the right to accelerate payments due, which

from after such acceleration would bear interest at a default rate of 29.25 % per annum.

The Loan and Security Agreement is secured by

connection with the Loan and Security Agreement, Aion opened a bank account in our name to be used for general business purposes including

receipt of customer payments, disbursements paying normal business expenses, and receipt of any advances from Aion under this agreement.

will use proceeds from the Loan and Security Agreement to repay our business loan entered into November 2023 and for general corporate

purposes, which may include working capital, capital expenditures, and repayment of debt.

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

reverse stock split of our common stock.

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

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

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

CISO Global, Inc.

common stock, par value $ 0.00001 ,

for each 15 shares they held as of the record date.

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

of this reverse stock split.

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

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

On March 22, 2024, we received notification from the Nasdaq Stock Market that we had sufficiently demonstrated compliance

with the bid price requirement in Nasdaq Listing Rule 5550(a)(2) by maintaining a share price in excess of $ 1.00 per share for 10 consecutive

trading days.

March 28, 2024, we and our US subsidiaries entered into a Business Loan and Security Agreement (the “Loan Agreement” with

LendSpark Corporation (the “Lender”), pursuant to which we obtained a loan with a principal amount of $ 2,200,000 (the

“Loan”) from the Lender.

Pursuant to the Loan Agreement, we paid the Lender a $ 44,000 origination fee.

The Loan bears

interest at a rate of 51.73 % per annum and is payable in 52 weekly installments of $ 53,308 , commencing on April 5, 2024.

may prepay the Loan in whole or in part, but partial repayments do not reduce the total interest payable on the Loan, or $ 572,000 .

the Loan is prepaid in full prior to the 60-day anniversary of the date of the Loan Agreement, the total interest is reduced as follows:

(i) if the Loan is repaid within 30 days, the total amount of interest due will be $242,000, and (ii) if the Loan is repaid within 60

days, the total amount of interest due will be $286,000.

to the Loan Agreement, we granted the Lender a security interest in all if our assets and the assets of our US subsidiaries (the

“Collateral”) that is secondary to the security interest held by Aion.

Upon the occurrence of an event of default, the Lender

may, among other things, accelerate the Loan and declare all obligations immediate due and payable or take possession of the Collateral.

connection with Loan, we entered into a Fee Agreement (the “Fee Agreement”) with the Lender pursuant to which we issued

100,000 shares of our common stock, par value $ 0.00001 per share (the “Shares”) as partial consideration for

the Lender’s agreement to enter into the Loan Agreement and extend credit to us.

Pursuant to the Fee Agreement, if we repay

the Loan in full by (i) May 1, 2024, the Lender will return 75% of the Shares to us, and (ii) June 1, 2024, the Lender will

return 50% of the Shares to us.

The Fee Agreement contains customary representations, warranties, agreements and

obligations of the parties.

January 10, 2025, we received a notification letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC

(“Nasdaq”) indicating that, since we have not yet held an annual meeting of stockholders within twelve months of the end

of its December 31, 2023 fiscal year, we are out of compliance with the Nasdaq rules for continued listing (Listing Rules 5620(a)

and 5810(c)(2)(G)).

The notification letter has no immediate effect on the listing of our securities on the Nasdaq Capital

the applicable Nasdaq rules, we had 45 calendar days to submit a plan to regain compliance.

If Nasdaq accepted our plan, Nasdaq can grant

an exception of up to 180 calendar days from our most recent fiscal year end, or until June 30, 2025, to regain compliance.

We filed a definitive proxy statement on March 5, 2025 for an annual meeting to be held on April 25, 2025 to regain compliance with

the applicable Nasdaq Listing Rules.

On March 25, 2025, we entered

into Amendment Number One to the Purchase Agreement with Hensley & Company dba Hensley Beverage Company, a related party, pursuant to which

we extended the Maturity Date to March 20, 2026.

On January 1, 2025 and March 26,

2025, we repaid in full the outstanding balances of our loans with Agile and LendSpark, respectively, our highest interest rate term

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures