CISO Global, Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _________ to _________ Commission file number: 001-41227 CISO GLOBAL, INC. (Exact name of registrant as specified in its charter) Delaware 83-4210278 (State or other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 6900 E. Camelback Road , Suite 900 , Scottsdale , Arizona 85251 (Address of Principal Executive Offices) (Zip Code) (480) 389-3444 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.00001 par value CISO The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of May 13, 2025, there were 32,042,967 shares of the registrant’s common stock outstanding. CISO GLOBAL, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025 (unaudited) TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION 4 ITEM 1. Financial Statements (unaudited) 4 Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Operations and Comprehensive Loss 5 Condensed Consolidated Statements of Changes in Stockholders’ Equity 6 Condensed Consolidated Statements of Cash Flows 7 Notes to Condensed Consolidated Financial Statements 8 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 26 ITEM 4. Controls and Procedures 26 PART II. OTHER INFORMATION 27 ITEM 1. Legal Proceedings 27 ITEM 1A. Risk Factors 27 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 27 ITEM 3. Defaults Upon Senior Securities 27 ITEM 4. Mine Safety Disclosures 27 ITEM 5. Other Information 27 ITEM 6. Exhibits 27 SIGNATURES 28 2 FORWARD-LOOKING STATEMENTS The information contained in this report should be read in conjunction with the financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q. Certain statements made in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based upon beliefs of, and information currently available to, us as of the date hereof, as well as estimates and assumptions made by us. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Forward-looking statements made in this Quarterly Report on Form 10-Q include statements about: ● our ability to maintain an effective system of internal controls and accurately report our financial results; ● that we will 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; ● our belief that our cash balance as of the date of this filing, together with anticipated revenues, will be sufficient to meet our anticipated cash requirement for the near term; ● the doubt about our ability to continue as a going concern; ● our efforts to developing our business, reducing overhead cost, and capital raising; ● our plan to improve our liquidity by a planned reduction in overhead costs and actively pursuing additional debt and /or equity financing through discussions with investment bankers and private investors; ● our estimate for indirect tax liabilities; and ● our expectation that we will incur further losses through the end of 2025. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks detailed from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, any of which may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. These risks may cause our or our industry’s actual results, levels of activity, or performance to be materially different from any future results, levels of activity, or performance expressed or implied by these forward-looking statements. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time they are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report. 3 PART I – FINANCIAL INFORMATION Item 1. Financial Statements CISO GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 2025 2024 ASSETS Current Assets: Cash and cash equivalents $ 1,786,860 $ 992,589 Accounts receivable, net 1,741,710 1,837,521 Prepaid cost of revenue 220,008 334,143 Prepaid expenses and other current assets 1,082,583 137,725 Contract asset 179,125 179,093 Total Current Assets 5,010,286 3,481,071 Property and equipment, net 649,707 730,511 Right of use asset, net 495,466 537,173 Intangible assets, net 1,569,044 1,802,214 Goodwill 19,900,550 19,900,550 Prepaid cost of revenue, net of current portion 62,263 73,021 Other assets 131,966 129,916 Total Assets $ 27,819,282 $ 26,654,456 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable and accrued expenses $ 8,296,851 $ 9,635,086 Deferred revenue 1,255,068 1,365,315 Lease liability 177,176 170,289 Loans payable 1,044,443 2,674,090 Line of credit 2,034,087 1,957,938 Derivative liability 79,919 2,102,927 Convertible notes payable 2,470,000 2,050,002 Convertible notes payable, related party 5,000,000 5,000,000 Convertible notes payable 5,000,000 5,000,000 Total Current Liabilities 20,357,544 24,955,647 Long-term Liabilities: Deferred revenue, net of current portion 69,904 84,403 Loans payable, net of current portion 27,635 37,272 Lease liability, net of current portion 384,834 428,070 Total Liabilities 20,839,917 25,505,392 Commitments and Contingencies - - Stockholders’ Equity: Common stock, $ .00001 par value; 300,000,000 shares authorized; 29,817,101 and 11,821,866 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively 303 123 Preferred stock, $ .00001 par value; 50,000,000 shares authorized; 0 shares issued and outstanding on March 31, 2025 and December 31, 2024 - - Additional paid-in capital 194,912,582 183,707,063 Treasury stock, at cost ( 502,137 shares) ( 290,737 ) ( 290,737 ) Accumulated translation adjustment ( 573 ) ( 4,779 ) Accumulated deficit ( 187,642,210 ) ( 182,262,606 ) Total Stockholders’ Equity 6,979,365 1,149,064 Total Liabilities and Stockholders’ Equity $ 27,819,282 $ 26,654,456 The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 4 CISO GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) March 31, 2025 March 31, 2024 Quarter Ended March 31, 2025 March 31, 2024 Revenue: Security managed services $ 6,445,233 $ 7,158,633 Professional services 569,823 766,498 Cybersecurity software 147,266 100,283 Total revenue 7,162,322 8,025,414 Cost of revenue: Security managed services 2,003,847 2,553,949 Professional services 50,192 155,580 Cybersecurity software 33,230 30,505 Cost of payroll 2,752,046 3,481,908 Stock based compensation 541,405 1,097,250 Total cost of revenue 5,380,720 7,319,192 Total gross profit 1,781,602 706,222 Operating expenses: Professional fees 513,679 491,067 Advertising and marketing 3,730 26,438 Selling, general and administrative 2,656,891 3,978,594 Stock based compensation 317,047 1,107,222 Total operating expenses 3,491,347 5,603,321 Loss from operations ( 1,709,745 ) ( 4,897,099 ) Other income (expense): Other income (expense) ( 5,528 ) 38,892 Loss on extinguishment of convertible notes ( 839,151 ) - Change in fair value of derivative liability 5,387,691 - Interest expense, net ( 8,212,871 ) ( 749,825 ) Total other expense, net ( 3,669,859 ) ( 710,933 ) Loss from continuing operations before income taxes ( 5,379,604 ) ( 5,608,032 ) Benefit from income taxes - - Loss from continuing operations ( 5,379,604 ) ( 5,608,032 ) Loss from discontinued operations, net of income taxes - ( 1,001,167 ) Net Loss ( 5,379,604 ) ( 6,609,199 ) Foreign currency translation adjustment ( 4,206 ) ( 663,003 ) Comprehensive loss $ ( 5,383,810 ) $ ( 7,272,202 ) Net loss per common share - basic and diluted: Continuing operations $ ( 0.38 ) $ ( 0.47 ) Discontinued operations - ( 0.08 ) $ ( 0.38 ) $ ( 0.55 ) Weighted average shares outstanding - basic 14,204,831 11,956,137 Weighted average shares outstanding - diluted 14,204,831 11,956,137 The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 5 CISO GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) Accumulated Additional Other Common Stock Preferred Stock Paid-in Treasury Comprehensive Accumulated Shares Amount Shares Amount Capital Stock Gain/(Loss) Deficit Total Balance at January 1, 2025 12,324,003 $ 123 - $ - $ 183,707,063 $ ( 290,737 ) $ ( 4,779 ) $ ( 182,262,606 ) $ 1,149,064 Stock based compensation - stock options - - - - 850,992 - - - 850,992 Stock based compensation - common stock 100,000 1 - - 90,999 - - - 91,000 Stock issued for cash 3,809,519 38 - - 1,719,518 - - - 1,719,556 Conversion of convertible notes 14,085,716 141 - - 8,544,010 - - - 8,544,151 Foreign currency translation - - - - - - 4,206 - 4,206 Net loss - - - - - - - ( 5,379,604 ) ( 5,379,604 ) Balance at March 31, 2025 30,319,238 $ 303 - $ - $ 194,912,582 $ ( 290,737 ) $ ( 573 ) $ ( 187,642,210 ) $ 6,979,365 Balance at January 1, 2024 11,949,959 $ 119 - $ - $ 172,837,842 $ - $ 1,320,177 $ ( 158,018,687 ) $ 16,139,451 Balance 11,949,959 $ 119 - $ - $ 172,837,842 $ - $ 1,320,177 $ ( 158,018,687 ) $ 16,139,451 Stock based compensation - stock options - - - - 2,204,272 - - - 2,204,272 Stock issued for cash 41,254 1 - - 48,086 - - - 48,087 Stock issued as lending discount 100,000 1 - - 121,999 - - - 122,000 Stock adjustment after reverse stock split 47,356 - - - - - - - - Foreign currency translation - - - - - - ( 663,003 ) - ( 663,003 ) Net loss - - - - - - - ( 6,609,199 ) ( 6,609,199 ) Balance at March 31, 2024 12,138,569 $ 121 - $ - $ 175,212,199 $ - $ 657,174 $ ( 164,627,886 ) $ 11,241,608 Balance 12,138,569 $ 121 - $ - $ 175,212,199 $ - $ 657,174 $ ( 164,627,886 ) $ 11,241,608 The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 6 CISO GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) March 31, 2025 March 31, 2024 Cash flows from operating activities: Net loss $ ( 5,379,604 ) $ ( 6,609,199 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock based compensation - stock options 850,992 2,204,272 Stock based compensation - common stock 7,460 - Non-cash interest expense 7,898,323 68,071 Depreciation and amortization 312,224 760,281 Right of use amortization 41,707 57,346 Other 1,750 117,066 Loss on extinguishment of convertible notes 839,151 - Change in fair value of derivative liability ( 5,387,691 ) Changes in operating assets and liabilities: Accounts receivable, net 95,811 1,711,217 Inventory - 199,826 Contract assets ( 32 ) 2,964 Prepaids and other current assets ( 738,475 ) ( 213,949 ) Accounts payable and accrued expenses ( 1,334,029 ) ( 120,323 ) Lease liability ( 36,349 ) ( 30,155 ) Deferred revenue ( 124,746 ) 443,950 Net cash used in operating activities ( 2,953,508 ) ( 1,408,633 ) Cash flows from investing activities: Purchases of property and equipment - ( 75,571 ) Net cash used in investing activities - ( 75,571 ) Cash flows from financing activities: Proceeds from sale of common stock 1,719,556 48,087 Proceeds from loan payable - 2,201,984 Proceeds from convertible notes payable, related party 5,000,000 - Proceeds from lines of credit 1,000,000 2,413,599 Payment on lines of credit ( 923,851 ) ( 137,634 ) Payment on loans payable ( 1,639,284 ) ( 2,468,002 ) Payment of convertible note payable - - Payment of debt issuance cost ( 1,408,642 ) ( 44,000 ) Net cash provided by financing activities 3,747,779 2,014,034 Effect of exchange rates on cash and cash equivalents - ( 75,283 ) Net increase in cash and cash equivalents 794,271 454,547 Cash and cash equivalents - beginning of the period 992,589 1,062,442 Cash and cash equivalents - end of the period $ 1,786,860 $ 1,516,989 Supplemental cash flow information: Cash paid for: Interest $ 251,835 $ 629,364 Income taxes $ - $ - Supplemental disclosure of non-cash transactions: Common stock issued in exchange for services $ 91,000 $ - Common stock issued as a lending discount $ - $ 122,000 Debt conversion to equity $ 7,705,000 $ - The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 7 CISO GLOBAL, INC. and subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to CISO Global, Inc., a Delaware corporation and its wholly owned subsidiaries. Unless otherwise specified, all dollar amounts are expressed in United States dollars. NOTE 1 – ORGANIZATION OF BUSINESS AND GOING CONCERN Description of the Business We are a leading cybersecurity, compliance, and software company comprised of highly trained and seasoned security professionals who work with clients to enhance or create a better cyber posture in their organization. We provide a full range of cybersecurity consulting, related services, and cybersecurity software, encompassing all four pillars of proprietary software stack, compliance, cybersecurity, and organizational culture. Our comprehensive cybersecurity services include managed security, compliance services, security operations center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response, certified forensics, technical assessments, and cybersecurity training. We believe that culture is the foundation of every successful cybersecurity and compliance program. To deliver that outcome, we developed our unique offering of MCCP+ (“Managed Compliance & Cybersecurity Provider + Culture”), which is a holistic solution that provides all four of these pillars under one roof from a dedicated team of subject matter experts. In contrast to the majority of cybersecurity firms that are focused on a specific technology or service, we seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating highly sought-after topic experts. We continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients. We believe that bringing together a world-class team of technological experts with multi-faceted expertise in the critical aspects of cybersecurity is key to providing technology-agnostic solutions to our clients in a business environment that has suffered from a chronic lack of highly skilled professionals, thereby setting us apart from competitors and in-house security teams. Our goal is to create a culture of security and to help quantify, define, and capture a return on investment from information technology and cybersecurity spending. Basis of Presentation Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), the instructions to Form 10-Q pursuant to regulations of the SEC, and include our accounts and the accounts of our subsidiaries. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although, we believe that the disclosures made are adequate to make the information not misleading. All material intercompany accounts and transactions have been eliminated. Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2025. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2024. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, due to losses incurred, substantial doubt about our ability to continue as a going concern exists. 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 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. 8 The ability for us to continue as a going concern is dependent upon our ability to successfully accomplish the plan and eventually attain profitable operations. The condensed 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 we are unable to continue as a going concern. Use of Estimates GAAP requires management to make estimates and assumptions that affect the reported amounts in our unaudited condensed consolidated financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results could materially differ. We believe the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements. Material estimates include the allowance for credit losses, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the valuation of convertible notes, derivative liabilities, the adequacy of insurance reserves, and assumptions used in the Black-Scholes option pricing model, such as expected volatility, risk-free interest rate, share price, and expected dividend rate. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Our revenue is derived from three major types of services to clients: security managed services, professional services, and 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, and disaster recovery and data backup solutions. Our revenue is categorized and disaggregated as reflected in our unaudited condensed consolidated statement of operations as follows: Security Managed Services Security 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. Professional Services Professional 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 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. 9 Accounts Receivable Accounts receivable are reported at their outstanding unpaid principal balances, net of allowances for credit losses. We periodically assess our accounts and other receivables for collectability on a specific identification basis. We provide for allowances for credit losses based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for credit losses when a balance is determined to be uncollectible. As of March 31, 2025 and December 31, 2024, our allowance for credit losses was $ 127,041 and $ 124,434 , respectively. Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. For dilutive securities, all outstanding options and warrants are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents are anti-dilutive with respect to losses, the options, warrants, and shares issuable upon conversion thereof have been excluded from our computation of net loss per common share for the three months ended March 31, 2025 and 2024, as follows: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE March 31, 2025 March 31, 2024 Stock options 1,473,967 1,951,206 Warrants 6,774,559 49,614 Convertible debt 1,958,854 874,672 Total 10,207,380 2,875,292 Deferred Revenue Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license. We generally invoice customers in advance or in milestone-based installments. D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE March 31, 2025 December 31, 2024 Current: Security managed services $ 332,451 $ 461,599 Professional services 715,182 631,241 Software 207,435 272,475 Total deferred revenue - current $ 1,255,068 $ 1,365,315 Long-term: Security managed services $ 69,904 $ 84,403 Total deferred revenue – long term $ 69,904 $ 84,403 10 The increase in the deferred revenue balance is primarily driven by payments received in advance of satisfying our performance obligations, offset by $ 570,741 of revenue recognized during 2025, which was included in the deferred revenue balance as of December 31, 2024. The deferred revenue balance as of March 31, 2025 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: SCHEDULE OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE Remainder of 2025 2026 2027 2028 2029 Total Security managed services $ 312,882 $ 55,800 $ 25,297 $ 5,290 $ 3,086 $ 402,355 Professional services 715,182 - - - - 715,182 Software 207,381 54 - - - 207,435 Total deferred revenue $ 1,235,445 $ 55,854 $ 25,297 $ 5,290 $ 3,086 $ 1,324,972 Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, including tax loss and credit carry forwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We utilize Accounting Standards Codification Topic 740 (ASC 740), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax returns. We account for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely than not” that a deferred tax asset will not be realized. At March 31, 2025, our net deferred tax asset has been fully reserved. For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the unaudited condensed consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740), to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this guidance require additional disclosures about income taxes, primarily focused on the disclosures of income taxes paid and the rate reconciliation table. The new guidance will be effective for the 2025 fiscal year, with early adoption permitted. The adoption of ASU 2023-09 is not expected to have a material impact on our disclosures within our condensed consolidated financial statements. In 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 periods after the effective date or retrospectively to any or all prior periods presented in the financial statements, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. Adoption of this guidance will result in additional disclosures, but we do not expect that the adoption of ASU 2024-03 will impact our condensed consolidated financial position, results of operations, or cash flows. NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS March 31, 2025 December 31, 2024 Prepaid expenses $ 1,016,446 $ 97,706 Prepaid insurance 66,137 40,019 Total prepaid expenses and other current assets $ 1,082,583 $ 137,725 11 NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT March 31, 2025 December 31, 2024 Computer equipment $ 367,584 $ 414,214 Leasehold improvements 25,791 25,791 Furniture and fixtures 72,511 75,698 Software 866,254 879,642 Property and equipment gross 1,332,140 1,395,345 Less: accumulated depreciation ( 682,433 ) ( 664,834 ) Property and equipment, net $ 649,707 $ 730,511 Total depreciation expense was $ 79,054 and $ 83,812 for the three months ended March 31, 2025 and 2024, respectively. NOTE 5 – INTANGIBLE ASSETS AND GOODWILL Goodwill The following table summarizes the net goodwill as of March 31, 2025 and December 31, 2024: SCHEDULE OF CHANGES IN GOODWILL Balance as of December 31, 2024 Goodwill $ 71,525,609 Accumulated impairment losses ( 51,625,059 ) 19,900,550 Balance March 31, 2025 Goodwill 71,525,609 Accumulated impairment losses ( 51,625,059 ) $ 19,900,550 Intangible Assets Intangible assets, net are summarized as follows: SCHEDULE OF INTANGIBLE ASSETS Gross Carrying Amount Accumulated Amortization Net Carrying Amount March 31, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames – trademarks $ 3,835,981 $ ( 3,210,976 ) $ 625,005 Customer base 572,048 ( 337,238 ) 234,810 Non-compete agreements 487,400 ( 485,760 ) 1,640 Intellectual property/technology 2,455,879 ( 1,748,290 ) 707,589 Intangible Asset $ 7,351,308 $ ( 5,782,264 ) $ 1,569,044 Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames – trademarks $ 3,835,981 $ ( 3,123,766 ) $ 712,215 Customer base 572,048 ( 319,587 ) 252,461 Non-compete agreements 487,400 ( 484,120 ) 3,280 Intellectual property/technology 2,455,879 ( 1,621,621 ) 834,258 Intangible Asset $ 7,351,308 $ ( 5,549,094 ) $ 1,802,214 12 The weighted average remaining useful life of identifiable amortizable intangible assets is 2.06 years as of March 31, 2025. Amortization of identifiable intangible assets for the three months ended March 31, 2025 and 2024 was $ 233,170 and $ 477,157 , respectively. Based on the balance of intangible assets at March 31, 2025, expected future amortization expense is as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2025 (remainder of) $ 687,969 2026 709,464 2027 73,211 2028 49,200 2029 49,200 Future Amortization Expense $ 1,569,044 NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES March 31, 2025 December 31, 2024 Accounts payable $ 4,833,969 $ 6,109,150 Accrued payroll and bonuses 793,632 750,410 Accrued expenses 1,302,297 1,477,846 Accrued commissions 48,500 37,847 Indirect taxes payable 29,912 32,959 Accrued interest 1,288,541 1,226,874 Total accounts payable and accrued expenses $ 8,296,851 $ 9,635,086 Note 7 – RELATED PARTY TRANSACTIONS Managed Services Agreement with Hensley Beverage Company – Related Party In July 2021, we entered into a 1-year Managed Services Agreement with Hensley Beverage Company to provide secured managed services. We also may be engaged by Hensley Beverage Company from time to time to provide other related services outside the scope of the Managed Services Agreement. While the agreement provides for an original term through December 31, 2021, the agreement will continue until terminated by either party. For the three months ended March 31, 2025 and 2024, we received $ 186,217 and $ 1,123,322 , respectively, from Hensley Beverage Company for contracted services, and had an outstanding receivable balance of zero as of March 31, 2025 and December 31, 2024. As of March 31, 2025, we have an outstanding balance of $ 230,856 due to Hensley Beverage Company for future services. Andy McCain, a director of our company, is President and Chief Executive Officer of Hensley & Company, the parent company of Hensley Beverage Company. Convertible Note Payable with Hensley & Company In 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, was due on March 20, 2025 . On March 25, 2025, we entered into Amendment Number One to this convertible note, which extended the maturity date of the convertible note to March 20, 2026 . 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 quarter ended March 31, 2025 and 2024, we recorded interest expense of $ 125,000 . As of March 31, 2025 and December 31, 2024, we had accrued interest of $ 1,013,888 and $ 888,888 , respectively. Mr. McCain, a director of our company, is President and Chief Executive Officer of Hensley & Company. 13 Note 8 – STOCKHOLDERS’ EQUITY Options We granted stock options vesting solely upon the continued service of the recipient. We recognize the accounting grant date fair value of equity-based awards as compensation expense over the required service period of each award. The following table summarizes stock option activity: SCHEDULE OF STOCK OPTION ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2025 1,523,691 $ 37.34 - - Granted 201,666 0.62 - - Exercised - - - - Expired or cancelled ( 251,390 ) 39.19 - - Outstanding at March 31, 2025 1,473,967 $ 31.88 4.69 $ 14,767 Exercisable at March 31, 2025 1,241,030 $ 35.54 3.90 $ 14,767 Total compensation expense related to the options was $ 850,992 and $ 2,204,272 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, there was future compensation expense of $ 1,986,051 with a weighted average recognition period of 0.80 years related to the options. The weighted-average grant-date fair value of options granted during the three months ended March 31, 2025 was $ 0.57 . The total intrinsic value of options exercised during the three months ended March 31, 2025 was zero . During the three months ended March 31, 2025, 216,294 options vested, net of forfeitures. Warrant Activity Summary The following table summarizes warrant activity: SCHEDULE OF STOCK WARRANT ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2025 6,774,559 $ 1.14 4.93 - Granted - - - - Exercised - - - - Expired or cancelled - - - - Outstanding at March 31, 2025 6,774,559 $ 1.14 4.68 $ - Exercisable at March 31, 2025 6,774,559 $ 1.14 4.68 $ - 14 NOTE 9 – COMMITMENTS AND CONTINGENCIES Legal Claims There are no material pending legal proceedings in which we or any of our subsidiaries are 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. Indirect Taxes We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the United States and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the business of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generated based on regulations currently being applied to similar, but not directly comparable industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists and believe we maintain adequate indirect tax accruals. As of March 31, 2025 and December 31, 2024, our accrual for estimated indirect tax liabilities was $ 29,912 and $ 32,959 , 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. Warranties Our services are generally warranted to deliver and operate in a manner consistent with general industry standards that are reasonably applicable and materially conform with our documentation under normal use and circumstances. We offer a limited warranty to select customers, subject to various conditions, to cover certain costs incurred by the customer in case of a security breach. We have entered into an insurance policy to cover our potential liability arising from this limited warranty arrangement. We have not incurred any material costs related to such obligations and have not accrued any liabilities related to such obligations in the unaudited condensed consolidated financial statements as of March 31, 2025 and December 31, 2024. In addition, we also indemnify certain of our directors and executive officers against certain liabilities that may arise while they are serving in good faith in their company capacities. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid. NOTE 10 – LOANS PAYABLE AND LINES OF CREDIT Loans Payable Loans payable was as follows: SCHEDULE OF LOAN PAYABLE Effective Interest Rates Maturities March 31, 2025 December 31, 2024 Term loans 5.62 % to 8.00 % 2025 - 2027 1,072,078 2,711,362 Less, current portion ( 1,044,443 ) ( 2,674,090 ) Long term loans payable $ 27,635 $ 37,272 15 Term Loans Our subsidiaries are borrowers under certain term loans. These term loans require weekly or monthly principal and interest payments. These term loans are secured by various assets owned by our subsidiaries. In 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 carried an interest rate of 53.44 % per annum and is payable in 52 weekly installments of $ 53,731 . The business loan was secured by all of the assets of our U.S. 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. On March 28, 2024, under a troubled debt restructuring, we entered into a Business Loan and Security Agreement (the “Loan Agreement”) with LendSpark Corporation (the “Lender”), pursuant to which we obtained a restructured loan with a principal amount of $ 2,200,000 (the “Restructured Loan”) from the Lender. Pursuant to the Loan Agreement, we paid the Lender a $ 44,000 origination fee. The Restructured Loan bore interest at a rate of 51.73 % per annum and was payable in 52 weekly installments of $ 53,308 , commencing on April 5, 2024. Pursuant to the Loan Agreement, we granted the Lender a security interest in all of our assets and the assets of our U.S. subsidiaries (the “Collateral”) that was secondary to the security interest held by Aion Financial Technologies, Inc. (“Aion”). Upon the occurrence of an event of default, the Lender was permitted to, among other things, accelerate the Loan and declare all obligations immediately due and payable or take possession of the Collateral. In 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 contained customary representations, warranties, agreements, and obligations of the parties. For the three months ended March 31, 2025, we recorded interest expense of $ 54,561 . The Restructured Loan was repaid in full on March 26, 2025. In June 2024, we entered into a Subordinated Business Loan and Security Agreement (“Subordinated Business Loan Agreement”) with Agile Capital Funding, LLC (“Agile”), pursuant to which we obtained a loan with a principal amount of $ 2,000,000 plus an administrative agent fee paid of $ 100,000 (“Subordinated Business Loan”). The Subordinated Business Loan was in excess of 100 % per annum and was payable in 30 weekly installments. The first four installments due were $ 75,000 followed by 26 installments of $ 103,154 . For the three months ended March 31, 2025, we recorded interest income of $ 44,100 . Pursuant to the Subordinated Business Loan, we granted Agile a security interest in the Collateral that was tertiary to the security interest held by Aion and LendSpark. Upon the occurrence of an event of default, Agile was permitted to, among other things, accelerate the Subordinated Business Loan and declare all obligations immediately due and payable or take possession of the Collateral. We used proceeds from the Subordinated Business Loan for general corporate purposes, which included working capital, capital expenditures, and repayment of debt. This loan was repaid in full in February 2025. In 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 the Note Purchase Agreement exceeded 100 % per annum. This loan matured on January 1, 2025 and was repaid in full. In November 2024, we entered into an Intellectual Property Buy-Back Purchase Agreement, pursuant to which we reacquired vCISO, LLC in exchange for a Promissory Note with a face value of $ 1,020,000 and interest of 8.00 % per annum. The Promissory Note matures in November 2025. We may not prepay any principal amount due under this Promissory Note without the consent of the holder. For the three months ended March 31, 2025, we recorded interest expense of $ 25,268 , and accrued interest as of March 31, 2025 and December 31, 2024, was $ 29,737 and $ 11,136 , respectively. Line of Credit On January 31, 2024, we entered into a Loan and Security Agreement (the “2024 Loan and Security Agreement”) with Aion, pursuant to which we may borrow up to $ 3,500,000 . The amount available for borrowing at any one time is limited to 80 % of our eligible accounts receivable. The 2024 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 2024 Loan and Security Agreement, together with accrued and unpaid interest thereon, was due on January 30, 2025 (the “Maturity Date”). Upon providing 30 days written notice we may terminate the 2024 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 2024 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, after which interest at a default rate of 29.25 % per annum. The 2024 Loan and Security Agreement is secured by our assets. 16 We used proceeds from the 2024 Loan and Security Agreement to repay outstanding debt and may use for general corporate purposes, which includes working capital, capital expenditures, and repayment of debt. For the three months ended March 31, 2025 and 2024, we recorded interest expense of $ 86,476 and $ 14,874 , respectively. Accrued interest as of March 31, 2025 and December 31, 2024 was zero . Convertible Notes Payable In 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, was due on March 20, 2025 . On March 25, 2025, we entered into Amendment Number One to this convertible note, which extended the maturity date of the convertible note to March 20, 2026. 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 quarter ended March 31, 2025 and 2024, we recorded interest expense of $ 125,000 . As of March 31, 2025 and December 31, 2024, we had accrued interest of $ 1,013,888 and $ 888,888 , respectively. Mr. McCain, a director of our company, is President and Chief Executive Officer of Hensley & Company. In 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 was due on June 7, 2024 . At any time prior to or on the maturity date, the holder is permitted to convert all of the outstanding principal amount into 4.20 % of the authorized units of our wholly owned subsidiary vCISO, LLC. In 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. In December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,050,000 unsecured convertible note to December 15, 2025. 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, 2025. We recorded interest expense of $ 31,529 and $ 27,603 for the three months ended March 31, 2025 and 2024, respectively. Accrued interest as of March 31, 2025 and December 31, 2024 was $ 94,694 and $ 163,165 , respectively. In 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 was 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. In 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. In December 2024, we entered into Amendment #2 to extend the maturity date of the $ 1,000,000 unsecured convertible note to December 15, 2025. 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, 2025. We recorded interest expense of $ 34,830 and $ 31,184 for the three months ended March 31, 2025 and 2024, respectively. Accrued interest as of March 31, 2025 and December 31, 2024 was $ 149,137 and $ 164,307 , respectively. In 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 had a face value of up to $ 8,125,000 and were subject to an original issue discount of 20 %. The convertible notes did not bear a stated rate of interest and matured one year from the date of issuance. The effective interest rate of these convertible notes exceeded 100 % per annum. At any time prior to or on the maturity date, the Purchasers, could in part or in whole convert the outstanding principal amount into shares of our common stock at a Conversion Price equal to 90 % of the lowest volume weighed average price of our common stock during the ten Trading Day period immediately preceding the Conversion Date. At no time could the Conversion Price be below $ 0.394 per share. The Agreement initially funded us with gross proceeds of $ 3,125,000 in December 2024, and the remaining $ 5,000,000 was funded upon the effectiveness of a change in a majority of our directors, which occurred on January 7, 2025. We recorded these convertible notes at fair value and recognized the fair value of a derivative liability upon each tranche of funding. The allocation of fair value to the convertible notes was made on a relative fair value basis as the free-standing warrants issued in 2024 in connection with the Agreement are equity classified. The 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. During the quarter-end March 31, 2025, $ 7,705,000 of the convertible notes was converted into share shares of our common stock. We recognized a loss on the conversion of the convertible notes of $ 839,151 , which is the intrinsic value of the shares converted. As of March 31, 2025, $ 420,000 of the principal balance remained outstanding. For the three months ended March 31, 2025, we recognized interest expense of $ 7,898,323 related to the accretion of the convertible notes and the amortization of debt issuance costs. On April 1, 2025, the remaining balance of these convertible notes was converted into shares of our common stock. The proceeds from the Agreement were used to repay outstanding principal amounts of short-term indebtedness and for general corporate purposes, which included working capital, and research and development. Future minimum payments under the above loans payable, line of credit, and convertible notes payable due as of March 31, 2025 were as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT 2025 (remainder of) $ 10,552,389 2026 33,495 2027 3,615 Total future minimum payments 10,589,499 Less: discount ( 13,334 ) Total 10,576,165 Less: current ( 10,548,530 ) Long term debt, net $ 27,635 17 NOTE 11 – LEASES We have entered into various non-cancellable operating lease agreements for certain offices. These leases currently have lease periods expiring through 2028. The lease agreements may include one or more options to renew. Renewals were not assumed in our determination of the lease term unless the renewals were deemed to be reasonably assured at lease commencement. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of lease costs, weighted-average lease term, and discount rates are detailed below. When measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using our estimated incremental borrowing rate at commencement date of each lease. The weighted average incremental borrowing rate applied was 11.54 %. As of March 31, 2025, our leases had a remaining weighted average term of 2.97 years. Operating leases are included in the unaudited condensed consolidated balance sheets as follows: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Classification March 31, 2025 December 31, 2024 Lease assets Operating lease ROU assets, net Assets $ 495,466 $ 537,173 Total lease assets $ 495,466 $ 537,173 Lease liabilities Operating lease liabilities, current Current liabilities $ 177,176 $ 170,289 Operating lease liabilities, non-current Liabilities 384,834 428,070 Total lease liabilities $ 562,010 $ 598,359 The components of lease costs, which are included in loss from operations in our unaudited condensed consolidated statements of operations, were as follows: SCHEDULE OF LEASE COSTS 2025 2024 Three Months Ended March 31, 2025 2024 Leases costs Operating lease costs $ 53,280 $ 73,996 Short term and variable lease costs 6,695 16,165 Total lease costs $ 59,975 $ 90,161 Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the three months ended March 31, 2025 were as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES Fiscal Year Operating Leases 2025 (remainder of) $ 164,097 2026 223,177 2027 229,145 2028 51,662 Total future minimum lease payments 668,081 Amount representing interest ( 106,071 ) Present value of net future minimum lease payments $ 562,010 NOTE 12 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS Our financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents. 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. No single customer represented over 10 % of our total revenue for any period presented. 18 NOTE 13 – GEOGRAPHIC INFORMATION All of our revenue and property and equipment from continuing operations is located within the United States. NOTE 14 – ACCUMULATED OTHER COMPREHENSIVE INCOME The following table presents Accumulated Other Comprehensive Income (“AOCI”) activity in equity: SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME Foreign Currency Translation Adjustments Total AOCI Foreign Currency Translation Adjustments [Member] Balance as of December 31, 2024 $ ( 4,779 ) $ ( 4,779 ) Other comprehensive income 4,206 4,206 Amounts reclassified from AOCI - - Balance as of March 31, 2025 $ ( 573 ) $ ( 573 ) NOTE 15 – FAIR VALUE MEASUREMENT The following table sets forth our material liabilities measured and recorded at fair value on a recurring basis: SCHEDULE OF FAIR VALUE MEASUREMENT Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) As of March 31, 2025 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Current liabilities Derivative liability $ - $ - $ 79,919 Total liabilities measured at fair value $ - $ - $ 79,919 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) As of December 31, 2024 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Current liabilities Derivative liability $ - $ - $ 2,102,927 Total liabilities measured at fair value $ - $ - $ 2,102,927 The estimated fair value of the conversion feature of the derivative liability is based on Monte Carlo simulations, a traditional valuation model. The derivative liability component of the convertible notes are classified as Level 3 due to significant unobservable inputs. NOTE 16 – SEGMENT INFORMATION We report our operating results through one reportable segment. Our Chief Operating Decision Maker (“CODM”), as of March 31, 2025, 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 (“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 extinguishment of debt, impairment of goodwill and intangible assets, and stock-based compensation expense (“Segment EBITDA”). We believe Segment EBITDA serves as a measure that assists our CODM and our investors in comparing our segment performance on a consistent basis. Net 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. Our CODM does not use assets by segment to evaluate performance or allocate resources; therefore, we do not provide disclosure of assets by segment. The 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 “Condensed Consolidated Statement of Operations” above: SCHEDULE OF SEGMENT INFORMATION 2025 2024 Three months ended March 31, 2025 2024 Net loss from continuing operations $ ( 5,379,604 ) $ ( 5,608,032 ) Loss on extinguishment of debt 839,151 - Interest expense, net 8,212,871 749,825 Depreciation and amortization 312,224 560,976 Stock-based compensation 858,452 2,204,472 Change in fair value of derivative liability ( 5,387,691 ) - Segment EBITDA $ ( 544,597 ) $ ( 2,092,759 ) NOTE 17 – SUBSEQUENT EVENTS On April 1, 2025, the remaining $ 420,000 balance from the convertible note we entered into in December 2024 was converted into shares of our common stock. On April 14, 2025, we entered into a Loan and Security Agreement (the “2025 Loan and Security Agreement”) with Aion to replace the 2024 Loan and Security Agreement, pursuant to which we may borrow up to $ 3,500,000 . The amount available for borrowing at any one time is limited to 80 % of our eligible accounts receivable. The 2025 Loan and Security Agreement will bear interest at a rate of 18.00 % per annum (based on a 360-day year), payable on the first business day of each month following the accrual thereof. The 2025 Loan and Security Agreement, together with accrued and unpaid interest thereon, is due on April 14, 2026 (the “Maturity Date”). Upon providing 30 days written notice we may terminate the 2025 Loan and Security Agreement, subject to an early termination fee of $ 35,000 . Upon the occurrence of an “Event of Default” (as defined in the 2025 Loan Security Agreement and including the failure to make required payments when due after specified grace periods, certain breaches and certain specified insolvency events), Aion would have the right to accelerate payments due, which from after such acceleration would bear interest at a default rate of 29.25 % per annum. The 2025 Loan and Security Agreement is secured by our assets. 19 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to CISO Global, Inc., a Delaware corporation, and its wholly owned subsidiaries. Unless otherwise specified, all dollar amounts are expressed in U.S. dollars. First Quarter 2025 Highlights Our operating results for the three months ended March 31, 2025 included the following: ● ● Repayment of two term loans with interest rates exceeding 100% Conversion of $7.7 million of convertible debt into shares of common stock ● Total gross profit increased to $1.8 million for the three months ended March 31, 2025, as compared to $0.7 million for the three months ended March 31, 2024. Results of Operations Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024 Our financial results for the three months ended March 31, 2025 are summarized as follows in comparison to the three months ended March 31, 2024: Three Months Ended March, 31 2025 2024 Variance Revenue: Security managed services $ 6,445,233 $ 7,158,633 $ (713,400 ) Professional services 569,823 766,498 (196,675 ) Cybersecurity software 147,266 100,283 46,983 Total revenue 7,162,322 8,025,414 (863,092 ) Cost of revenue: Security managed services 2,003,847 2,553,949 (550,102 ) Professional services 50,192 155,580 (105,388 ) Cybersecurity software 33,230 30,505 2,725 Cost of payroll 2,752,046 3,481,908 (729,862 ) Stock based compensation 541,405 1,097,250 (555,845 ) Total cost of revenue 5,380,720 7,319,192 (1,938,472 ) Total gross profit 1,781,602 706,222 1,075,380 Operating expenses: Professional fees 513,679 491,067 22,612 Advertising and marketing 3,730 26,438 (22,708 ) Selling, general, and administrative 2,656,891 3,978,594 (1,321,703 ) Stock-based compensation 317,047 1,107,222 (790,175 ) Total operating expenses 3,491,347 5,603,321 (2,111,974 ) Loss from operations (1,709,745 ) (4,897,099 ) 3,187,354 Other income (expense): Other income (expense) (5,528 ) 38,892 (44,420 ) Loss on extinguishment of convertible notes (839,151 ) - (839,151 ) Change in fair value of derivative liability 5,387,691 - 5,387,691 Interest expense, net (8,212,871 ) (749,825 ) (7,463,046 ) Total other income (expense) (3,669,859 ) (710,933 ) (2,958,926 ) Loss from continuing operations $ (5,379,604 ) $ (5,608,032 ) $ 228,428 20 Revenue Security managed services revenue decreased by $713,400, or 10%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to lower hardware and software sales. Professional services revenue decreased by $196,675, or 26%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to fewer customer projects. Cybersecurity software revenue increased by $46,983, or 47%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an increase in subscriptions for our Checklight cybersecurity software. Expenses Cost of Revenue Security managed services cost of revenue decreased by $550,102, or 22%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to lower hardware and software sales. Professional services cost of revenue decreased by $105,388, or 68%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a decreased use of consultants. Cybersecurity software cost of revenue increased by $2,725, or 9%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to our increase in Checklight subscriptions. Cost of payroll decreased by $729,862, or 21%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to headcount reductions in 2024. Stock-based compensation expenses decreased by $555,845, or 51%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to the forfeiture of options by terminated employees and options that contractually expired. Operating Expenses Professional fees increased by $22,612, or 5%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to an increase in legal and accounting fees offset by a decrease in consultant fees. Advertising and marketing expenses decreased by $22,708, or 86%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to utilizing internal resources for advertising and marketing activities. 21 Selling, general, and administrative expenses decreased by $1,321,703, or 33%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to reductions in headcount during 2024 resulting in lower costs for compensation, insurance, and leases in 2025. Stock based compensation expenses decreased by $790,175, or 71%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to the forfeiture of options by terminated employees and options that contractually expired. Liquidity and Capital Resources The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfying liabilities in the normal course of business. For the three months ended March 31, 2025, we incurred a net loss of $5,379,604 and negative cash flows from operations of $2,953,508 and expect to incur further losses through the end of 2025. In the report accompanying our financial statements for the year ended December 31, 2024, our independent registered public accounting firm stated that our financial statements were prepared assuming that we would continue as a going concern and that they have substantial doubt as to our ability to do so based on our recurring losses from operations and need to raise additional capital. These condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should we be unable to continue as a going concern. As of March 31, 2025, we had $289,409,103 of available funding under our Shelf Registration Statement on Form S-3 from which we may issue our securities to fund current and future operations, assuming there is adequate demand for our securities. Although we have access to our Shelf Registration Statement on Form S-3, based on our public float, as of the filing date of our Annual Report on Form 10-K for the year ended December 31, 2024, we are only permitted to utilize a “shelf” registration statement for primary offerings, including the Shelf Registration Statement, subject to Instruction I.B.6 to Form S-3, which is referred to as the “baby shelf” rules. For so long as our public float is less than $75,000,000, we may not sell more than the equivalent of one-third of our public float during any twelve consecutive months pursuant to the baby shelf rules. While alternative public and private transaction structures may be available, these may require additional time and costs, may result in substantial dilution to existing stockholders, in light of our current stock price, may impose operational restrictions on us, and may not be available on attractive terms or at all. Working Capital Deficit Our working capital deficit as of March 31, 2025 in comparison to our working capital deficit as of December 31, 2024, is summarized as follows: As of March 31, December 31, 2025 2024 Current assets $ 5,010,286 $ 3,481,071 Current liabilities 20,357,544 24,955,647 Working capital deficit $ (15,347,258 ) $ (21,474,576 ) The increase in current assets is primarily due to an increase in cash and cash equivalents and prepaid expenses and other current assets of $794,271 and $944,858, respectively, offset by a decrease in accounts receivable, net, and prepaid cost of revenue of $95,814 and $114,135, respectively. The decrease in current liabilities is primarily due to a decrease in accounts payable and accrued expenses, loans payable, and derivative liability of $1,338,235, $1,629,647, and $2,023,008, respectively. 22 Cash Flows Our cash flows for the three months ended March 31, 2025 in comparison to our cash flows for the three months ended March 31, 2024, can be summarized as follows: Three Months ended March 31, 2025 2024 Net cash used in operating activities $ (2,953,508 ) $ (1,408,633 ) Net cash used in investing activities - (75,571 ) Net cash provided by financing activities 3,747,779 2,014,034 Effect of exchange rates on cash and cash equivalents - (75,283 ) Operating Activities Net cash used in operating activities was $2,953,508 for the three months ended March 31, 2025 and was primarily due to cash used to fund a net loss of $5,379,604, adjusted for non-cash expenses in the aggregate of $4,563,916 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of a decrease in accounts payable and accrued expenses, and prepaids and other current assets. Net cash used in operating activities was $1,408,633 for the three months ended March 31, 2024 and was primarily due to cash used to fund a net loss of $6,609,199, adjusted for non-cash expenses in the aggregate of $3,207,036 and additional cash inflow by changes in the levels of operating assets and liabilities, primarily as a result of a decrease in accounts receivables, net, and an increase in deferred revenue. Investing Activities Net cash used in investing activities of zero and $75,571 for the three months ended March 31, 2025 and 2024, respectively, was due to purchases of property and equipment. Financing Activities Net cash provided by financing activities for the three months ended March 31, 2025 was $3,747,779, which was primarily due to $1,719,556 from the sale of our common stock, cash received from borrowings on our convertible loans payable and line of credit, net of debt issuance cost, of $4,591,358, offset by $2,563,135 in repayments of our loans payable and lines of credit. Net cash provided by financing activities for the three months ended March 31, 2024 was $2,014,034, which was primarily due to cash received from borrowings on our loans payable and lines of credit, net of debt issuance cost, of $4,571,583, offset by $2,605,636 in repayments of our loans payable and lines of credit. The accompanying financial statements have been prepared on a going concern basis, which assumes the realization of assets and satisfaction of liabilities in the normal course of business. However, due to losses incurred, substantial doubt about our ability to continue as a going concern exists. We are actively evaluating strategies to obtain the necessary 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. Consequently, there is no assurance that we will be able to obtain the necessary liquidity when needed or under acceptable terms, if at all. Our ability to continue as a going concern depends on successfully executing the plan outlined in our growth strategy and eventually achieving 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 we were unable to continue as a going concern. Critical Accounting Policies and Estimates Our critical accounting policies are more fully described in the notes to our condensed consolidated financial statements included herein for the quarter ended March 31, 2025 and in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 31, 2025. 23 Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the periods. Our significant estimates and assumptions 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 adequacy of insurance reserves, and assumptions used in the Black-Scholes option pricing model, such as expected volatility, risk-free interest rate, share price, and expected dividend rate could be affected by external conditions, including those unique to us and general economic conditions. It is reasonably possible that these external factors could have an effect on our estimates and could cause actual results to differ from those estimates. Fair Value Measurement The fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in the valuation of an asset or liability. It establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the fair value measurement guidance are described below: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Goodwill and Indefinite-Lived Intangible Assets Goodwill 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. We 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. 24 Impairment of Long-Lived Assets We will periodically evaluate the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review and at least annually. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily by using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. Stock-Based Compensation We measure and recognize compensation expense for equity-based awards based on the grant date fair values of the awards. For options with service or performance-based vesting conditions, the grant date fair value is estimated using the Black-Scholes option-pricing model, which requires management to make assumptions and apply judgment in determining the grant date fair value. The most significant assumptions and judgments include estimating the expected option term, the expected stock price volatility, and the risk-free interest rates. The assumptions used in our option pricing model represent management’s best estimates. If factors change and different assumptions are used, our equity-based compensation expense could be materially different in the future. We record forfeitures when they occur, based on our lack of historical data available to estimate an appropriate forfeiture rate. Changes in our forfeiture rate can have a significant impact on our equity-based compensation expense since the cumulative effect of adjusting the forfeiture rate is recognized in the period in which the estimate is changed. We will continue to use judgment in evaluating the assumptions related to our equity-based awards on a prospective basis. As we continue to accumulate additional data related to our awards, we may refine our estimates, which could materially impact our future equity-based compensation expense. Revenue Recognition Our agreements with clients are primarily service contracts that range in duration from a few months to three year. We recognize revenue when control of these services is transferred to the client for an amount, referred to as the transaction price, which reflects the consideration to which we are expected to be entitled in exchange for those goods or services. A contract with a client exists only when: ● the parties to the contract have approved it and are committed to perform their respective obligations; ● we can identify each party’s rights regarding the distinct services to be transferred (“performance obligations”); ● we can determine the transaction price for the services to be transferred; and ● the contract has commercial substance, and it is probable that we will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the client. We do not adjust the promised amount of consideration for the effects of a significant financing component since we expect, at contract inception, that the period between the time of transfer of the promised goods or services to the client and the time the client pays for these goods or services to be generally one year or less. Our credit terms to clients generally average 30 days, although in some cases payments are required in 15 days. We do not disclose the value of unsatisfied performance obligations for contracts with original expected duration of one year or less. Our revenue is categorized and disaggregated as reflected in our statements of operations as follows: Security Managed Services Security managed services revenue primarily consists of compliance, security managed services, SOC managed services, and vCISO. We consider these services to be a single performance obligation, and revenue is recognized as services and materials are provided to the customer. Professional Services Professional services revenue primarily consists of technical assessments, incident response and forensics, training, and other cybersecurity services. We consider these services to be a single performance obligation, and revenue is recognized in the period in which the performance obligations are satisfied. 25 Cybersecurity Software Cybersecurity revenue primarily consists of our internally developed software products, CHECKLIGHT Endpoint Security Monitoring, ARGO Security Management, CISO Edge Cloud Security Platform, DISC Net Gen VPN, and Skanda Breach Assessment Tool. Each software offering is a single performance obligation, and we begin revenue recognition upon provisioning of our cybersecurity software to our customers and recognize ratably over the duration of the service period. We currently do not bundle our cybersecurity software with other product offerings, and as a result, judgment is not required to determine standalone selling price. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources. Item 3. Quantitative and Qualitative Disclosures about Market Risk Because we are a smaller reporting company, we are not required to provide the information called for by this Item. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2025, our disclosure controls and procedures were effective. This does not include an evaluation by our independent registered public accounting firm regarding our internal control over financial reporting. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. 26 PART II – OTHER INFORMATION Item 1. Legal Proceedings We are currently not a party to any material legal proceedings. Item 1A. Risk Factors We have disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, risk factors that materially affect our business, financial condition, or results of operations. There have been no material changes from the risk factors previously disclosed. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS In March 2025, we issued 100,000 shares of our common stock to TraDigital Marketing Group as compensation for investor relations services provided to our company. Item 3. Defaults upon Senior Securities None. Item 4. Mine Safety Disclosures Not Applicable. Item 5. Other Information During the quarter ended March 31, 2025, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading agreement” or a “non-Rule 10b5-1 trading agreement” (in each case, defined in Item 408 of Regulation S-K). Item 6. Exhibits Incorporated by Reference Exhibit Number Exhibit Description Form Exhibit Filing Date 31.1* Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer 31.2* Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer 32.1 Section 1350 Certification of Principal Executive Officer 32.2 Section 1350 Certification of Principal Financial Officer 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *Filed herewith. #Management contracts and compensatory plans and arrangements. 27 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CISO GLOBAL, INC. By: /s/ David G. Jemmett David G. Jemmett Chief Executive Officer (Principal Executive Officer) Date: May 15, 2025 By: /s/ Debra L. Smith Debra L. Smith Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: May 15, 2025 28