What changed in this filing

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Item 1A. Risk Factors

2026-03-09 compared with 2025-03-11 · 29 added, 66 removed, 336 unchanged (22% of the section changed)

25 unchanged sentences

We rely upon a few, select key employees who are instrumental to our ability to conduct and grow our business.

In the event any of those key employees would no longer be affiliated with the Company, and we did not replace them with

equally capable replacements, it may have a material detrimental impact on our ability to successfully operate our business.

In the event any of those key employees would no longer be affiliated with the Company, and we did not replace them with equally capable replacements, it may have a material detrimental impact on our ability to successfully operate our business.

Our future success will depend in large part on our ability to attract, retain, and motivate high-quality management, operations, and other personnel who are in high demand, are often subject to competing employment offers, and are attractive recruiting targets for our competitors.

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Merriman was promoted to COO.

We depend on the continued services of our key personnel, including our CEO, David T.

Bell, our Chief Financial Officer (“CFO”), our COO, and Jay O.

Wright, our Executive Vice-President of Strategy and General Counsel.

Martin was appointed to serve as our General Counsel (“GC”) effective January 1, 2026.

We depend on the continued services of our key personnel, including our CEO, CFO (David T.

Bell), COO, and GC.

Our work with each of these key personnel is subject to changes and/or termination, and our inability to effectively retain the services of our key management personnel could materially and adversely affect our operating results and future prospects.

Certain key members of our management team lack significant public company experience in their positions and our executive management team has limited time working together.

The members of our team do not all have significant prior experience working in their roles for a public company, including our CEO, COO, and CFO.

The management team also has limited experience working together as a team.

The inability of any member of our management team to operate effectively in their position, or for the management team to effectively work together, could materially and adversely affect our operating results and future prospects.

We may have difficulty raising additional capital, which could deprive us of necessary resources.

We expect to continue to devote significant capital resources to fund our acquisition strategy.

To support the initiatives envisioned in our business plan, we will need to raise additional funds through the sale of public or private debt or equity financing or other arrangements.

To support the initiatives envisioned in our business plan, we will need to raise additional funds through the sale of public or private debt, equity financing, or other arrangements.

Our ability to raise additional financing depends on many factors beyond our control, including the state of capital markets and the market price of our common stock.

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Additionally, we have certain potential dilutive instruments, of which the conversion of these instruments could result in dilution to stockholders:

As of March 10, 2025 the maximum potential dilution is 15,873,277 shares and includes Series A preferred stock convertible into approximately 587,500 shares of common stock, Series C preferred stock convertib le into 356,250 shares of common stock, options granted exercisable into 9,515,000 shares of common stock, and warrants granted exercisable into 5,664,527 shares of common stock.

As of March 6, 2026 the maximum potential dilution is 19,950,231 shares and includes Series A preferred stock convertible into approximately 587,500 shares of common stock, Series C preferred stock convertible into 356,250 shares of common stock, options granted exercisable into 13,352,500 shares of common stock, and warrants granted exercisable into 5,653,981 shares of common stock.

Failure to effectively manage any future growth could place strains on our managerial, operational, and financial resources and could adversely affect our business and operating results.

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Further, if our subsidiaries’ businesses grow, then we will be required to manage multiple relationships.

Any further growth by us or our subsidiaries, or any increase in the number of our strategic relationships, will increase the strain on our managerial,

operational, and financial resources.

Any further growth by us or our subsidiaries, or any increase in the number of our strategic relationships, will increase the strain on our managerial, operational, and financial resources.

This strain may inhibit our ability to achieve the rapid execution necessary to implement our business plan and could have a material adverse effect on our financial condition, business prospects, and operations, and the value of an investment in our Company.

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Our existing contracts typically expire after some period of time and must be “re-competed.” There is no guarantee that we will win such re-compete efforts;

• government certification requirements applicable to our products may change and in doing so restrict our ability to sell into the U.S.

federal government sector until we have attained the revised certification;

• government demand and payment for our products and services may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products and services;

• governments can generally terminate our contracts “for convenience”, meaning we could lose part or all of our revenue on short notice, and more specifically, the potential impact of the U.S.

DOGE Service Temporary Organization on government spending and terminating contracts for convenience;

• government certification requirements applicable to our service may change and in doing so restrict our ability to sell into the USG sector until we have attained the revised certification;

• government demand and payment for our services may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products and services;

• governments can generally terminate our contracts “for convenience”, meaning we could lose part or all of our revenue on short notice;

• governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our services, which would adversely impact our revenue and results of operations, or institute fines or civil or criminal liability if the audit uncovers improper or illegal activities;

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• laws, regulations, and executive orders regulating the handling, use, and dissemination of personally identifiable information in the course of performing a USG contract;

• international trade compliance laws, regulations, and executive orders that prohibit business with certain sanctioned entities and require authorization for certain exports or imports in order to protect national security and global stability, including The International Traffic in Arms Regulations that controls the manufacture, sale, and distribution of defense and space-related articles and services as defined in the United States Munitions List;

• laws, regulations, and executive orders governing organizational conflicts of interest that may restrict our ability to compete for certain USG contracts because of the work that we currently perform for the USG or may require that we take measures such as firewalling off certain employees or restricting their future work activities due to the current work that they perform under a USG contract;

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If we are unable to win particular contracts we may be prevented from providing services to customers that are purchased under those contracts for a number of years.

If we are unable to consistently win new contract awards over any extended

period, our business and prospects will be adversely affected and that could cause our actual results to differ materially and adversely from those anticipated.

If we are unable to consistently win new contract awards over any extended period, our business and prospects will be adversely affected and that could cause our actual results to differ materially and adversely from those anticipated.

If we are unable to win prime contracts, or acquire companies with prime contract vehicles, our business and prospects will be adversely affected.

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They also evaluate the adequacy of internal controls over our business systems, including our purchasing, accounting, estimating, earned value management, and government property systems.

Any costs found to be improperly allocated or assigned to contracts will not be reimbursed, and any such costs already reimbursed

must be refunded and certain penalties may be imposed.

Any costs found to be improperly allocated or assigned to contracts will not be reimbursed, and any such costs already reimbursed must be refunded and certain penalties may be imposed.

Moreover, if any of the administrative processes and systems are found not to comply with requirements, we may be subjected to increased government scrutiny and approval that could delay or otherwise adversely affect our ability to compete for or perform contracts or collect our revenue in a timely manner.

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changes in the use of USG contracting vehicles, and the provisions therein used to procure our services and adjustments to the scope of services, or cancellation of contracts, by the USG at any time.

In addition, contract backlog includes orders under contracts for which the period of performance has expired, and we may not recognize revenue on the funded backlog that includes such orders due to, among other reasons, the tardy submission of invoices by our subcontractors and the expiration of the relevant appropriated funding in accordance with a predetermined expiration date such as the end of the USG's fiscal year.

In addition, contract backlog includes orders under contracts for which the period of performance has expired, and we may not recognize revenue on the funded backlog that includes

such orders due to, among other reasons, the tardy submission of invoices by our subcontractors and the expiration of the relevant appropriated funding in accordance with a predetermined expiration date such as the end of the USG's fiscal year.

Our backlog may not result in actual revenue in any particular period, or at all, which could cause our actual results to differ materially and adversely from those anticipated.

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We obtain much of our business on the basis of proposals submitted in response to requests from potential and current customers, who may also receive proposals from other firms.

The market for our products and services is intensely competitive and characterized by rapid changes in technology, customer requirements, industry standards, and frequent

new product introductions and improvements.

We anticipate continued challenges from current competitors, which in many cases are more established and enjoy greater resources than us, as well as by new entrants into the industry.

The market for our products and services is intensely competitive and characterized by rapid changes in technology, customer requirements, industry standards, and frequent new product introductions and improvements.

We anticipate continued challenges from current competitors, which in many cases are more established and enjoy greater resources than we do, as well as by new entrants into the industry.

Non-traditional players have entered the market and have established positions related to such areas as cloud computing, cyber, satellite operations, and business systems.

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Systems failures may disrupt our business and have an adverse effect on our operating results.

Any systems failures, including network, software, or hardware failures, whether caused by us, a third-party service provider, unauthorized intruders and hackers, computer viruses, natural disasters, power shortages, or terrorist attacks, could cause loss of data or interruptions or delays in our business or that of our customers.

could cause loss of data or interruptions or delays in our business or that of our customers.

Like other companies, we have experienced cyber security threats to our data and systems, our Company sensitive information, and our IT infrastructure, including attempted malware and computer virus attacks, unauthorized access, systems failures, and temporary disruptions.

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Our earnings and margins may, therefore, vary materially and adversely depending on the relative mix of contract types, the costs incurred in their performance, the achievement of other performance objectives and the state of performance at which the right to receive fees, particularly under incentive and award fee contracts, is finally determined.

Our self-insurance program may expose us to significant and unexpected costs and losses.

To help control our overall long-term costs associated with employee health benefits, we began maintaining our employee medical insurance benefits on a self-insured basis effective June 1, 2024.

To limit our exposure, we have third party stop-loss insurance coverage which sets a limit on our liability for both individual and aggregate claim costs.

We record a liability for our estimated cost of claims incurred but unpaid as of each balance sheets date.

Our estimated liability is based on assumptions we believe to be reasonable under the current circumstances and will be adjusted as warranted based on changing circumstances.

It is possible, however, that our actual liabilities may exceed our estimates of losses.

We may also experience an unexpectedly large number of claims that result in costs or liabilities in excess of our projections, which could cause us to record additional expenses.

Our self-insurance reserves could prove to be inadequate, resulting in liabilities in excess of our available insurance and self-insurance.

If a successful claim is made against us and is not covered by our insurance or exceeds our policy limits, our business may be negatively and materially impacted.

These fluctuations could have a material adverse effect on our business, operating results, and financial condition.

Risks Related to our Acquisitions

1 unchanged sentence

The success of our acquisition strategy will depend on our ability to continue to successfully integrate any businesses we may acquire in the future.

The integration of these businesses into our operations may result in unforeseen operating

difficulties, absorb significant management attention, and require significant financial resources that would otherwise be available for the ongoing development of our business.

The integration of these businesses into our operations may result in unforeseen operating difficulties, absorb significant management attention, and require significant financial resources that would otherwise be available for the ongoing development of our business.

These integration difficulties include the integration of personnel with disparate business backgrounds, the transition of new information systems, coordination of geographically dispersed organizations, loss of key employees of acquired companies, and reconciliation of different corporate cultures.

9 unchanged sentences

During the third quarter of 2023, due to decline in stock price, Management determined that a triggering event occurred representing an indicator of goodwill impairment, resulting in a noncash charge of $0.

No triggering events were identified during 2024.

Risks Related to our Indebtedness

Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.

We have substantial indebtedness.

We have $10,399,944 of debt as of December 31, 2024, the majority of which originally matured in calendar year 2024 and the terms of which have been amended to extend the maturity date to calendar year 2026.

See “Notes Payable under N ote 7 , Part II, Item 8., Financial Statements” on this Form 10-K.

Should our bus iness fail to generate cash flow from operations sufficient to service our debt and make necessary capital expenditures we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining equity capital on terms that may be onerous or highly dilutive.

Such a “fire sale” would materially and adversely affect the value of our common stock.

No triggering events were identified during 2024 or 2025.

Risks Related to our Common Stock and Preferred Stock

Future sales or potential sales of our common stock in the public market could cause our share price to decline.

If the existing holders of our common stock, particularly our directors, officers, and other 10% stockholders, sell a large number of shares, they could adversely affect the market price for our common stock.

If the existing holders of our common stock sell a large number of shares, they could adversely affect the market price for our common stock.

Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could cause the market price of our common stock to decline.

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Our common stock was approved for listing on the NYSE American and began trading there on October 13, 2022.

In the case of a company whose common stock sells for a low price per share for a substantial period of time, the NYSE American continued listing rules permit the exchange to de-list a listed company in the event it fails to effect a reverse split of such shares within a reasonable time after being notified that the exchange deems such action to be appropriate under the

circumstances.

of such shares within a reasonable time after being notified that the exchange deems such action to be appropriate under the circumstances.

We have not received any such notification from the NYSE American but could receive it in the future.

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These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and as a result, stockholders may have difficulty selling their shares.

Although our Company does not intend to utilize the controlled company exemptions to the NYSE American corporate governance listing standards, if we are eligible to utilize the controlled company exemptions in the future, we may choose to do so.

In such instance we would be exempted from, among other things, the requirements to have a board with a majority of independent members and the requirement that we have a nominating and governance committee and compensation committee that are composed entirely of independent directors and have written charters addressing the respective committee’s purpose and responsibilities.

Our Company’s reliance on such exemption would likely result in a reduction in transparency to shareholders on various governance matters which could negatively impact their investment decisions.

We are an “emerging growth company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.

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Investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and consented to the provisions of Article IX of our Amended and Restated Articles of Incorporation and Article XIII of our Amended and Restated Bylaws.

Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have

notice of and consented to the provisions of Article IX of our Amended and Restated Articles of Incorporation and Article XIII of our Amended and Restated Bylaws.

There exists uncertainty, however, as to whether such forum selection provisions of our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws would be enforced by a court.

The choice of forum provision in our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employees, or agents, which may discourage such lawsuits against us and our directors, officers, employees, and agents even though an action, if successful, might benefit our stockholders.

The applicable courts may also reach different judgments or results than would other courts, including courts where a stockholder considering an action

may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders.

The applicable courts may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders.

With respect to the provision making the Eighth Judicial District Court of Clark County, Nevada the sole and exclusive forum for certain types of actions, stockholders who do bring a claim in the Eighth Judicial District Court of Clark County, Nevada could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Nevada.

Finally, if a court were to find this provision of our Amended and Restated Articles of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could have a material adverse effect on us.

Our management collectively owns a substantial amount of our common stock.

Collectively, our officers and directors own or exercise voting and investment control of approximately 35.5% of our outstanding common stock and control 35.1% of the voting power of the Company.

As a result, unless required by a stock exchange rule, investors may be prevented from affecting matters involving our Company, including:

• the composition of our Board and, through it, any determination with respect to our business direction and policies, including the appointment and removal of officers;

• any determination with respect to mergers or other business combinations;

• our acquisition or disposition of assets;

• our corporate financing activities.

Furthermore, this concentration of voting power could have the effect of delaying, deterring, or preventing a change of control or other business combination that might otherwise be beneficial to our stockholders.

This significant concentration of share ownership may also adversely affect the trading price of our common stock because investors may perceive disadvantages in owning stock in a Company that is controlled by a small number of stockholders.

Our Company’s reliance on such exemption would likely result in a reduction in transparency to shareholders on various governance matters which could negatively impact their investment decisions.

If we fail to establish and maintain an effective system of internal control or disclosure controls and procedures are not effective, we may not be able to report our financial results accurately and timely or to prevent fraud.

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors