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Item 1A. Risk Factors

2025-12-18 compared with 2024-12-13 · 663 added, 1145 removed, 140 unchanged (93% of the section changed)

11 unchanged sentences

also affect our business and results of operations.

of Risk Factors

following list provides a summary of risk factors discussed in further detail below:

Related to Our Business and Results of Operations

and related geo-political events increase the risk that we are unable to achieve and maintain profitable operations.

depend significantly upon the continued involvement of our present management and on our ability to attract and retain talented employees.

we are unable to develop new and enhanced products and services, or if we are unable to continually improve the performance, features,

and reliability of our existing products and services, our competitive position would weaken, and our business and operating results

could be adversely affected.

operating results may vary significantly from period to period and have been unpredictable, which has and might continue to cause

the market price of our common stock to be volatile.

future revenue and operating results will depend significantly on our ability to retain clients and customers and the ability to

add new clients and customers.

Any decline in our retention rates or failure to add new clients and customers will harm our business prospects and

operating results.

face intense competition, especially from larger, well-established companies, and we may lack sufficient financial or other

resources to maintain or improve our competitive position.

network or data security incident may allow unauthorized access to our or our end users’ network or data, harm our reputation,

create additional liability and adversely impact our financial results.

Our services, products, systems, and website and the data on these sources may be subject to intentional disruption

that could materially harm our reputation and future sales.

Our products are complex and operate in a wide variety of environments, systems and configurations, which could result

in failures of our products to function as designed and negatively impact our brand recognition and reputation.

our products and services do not work properly, our business, financial condition and financial results could be negatively affected,

and we could experience negative publicity declining sales, and legal liability.

or problems with systems and infrastructure supplied by third-parties could negatively affect our business, financial condition and

financial results.

global financial conditions have been characterized by increased volatility, which could negatively impact our business, prospects,

liquidity and financial condition.

we experience delays and/or defaults in payments, we could be unable to recover all expenditures.

If we do not effectively manage our growth, our business resources and systems may become strained, and we may be

unable to increase revenue growth.

Our growth depends in part on the success of our strategic relationships with third-parties.

Claims, litigation, government investigations, and other proceedings may adversely affect our business and results

of operations.

The ability of our executive officers and directors to control our business may limit or eliminate other stockholders’

ability to influence corporate affairs.

Related to Our Industry

face intense competition.

in product development schedules may adversely affect our revenues.

If we do not accurately predict, prepare for, and respond

promptly to rapidly evolving technological and market developments

and successfully manage product introductions and transitions to meet changing needs in the cybersecurity technology market, our

competitive position, financial results, and prospects will be harmed.

possible, or perceived defects or vulnerabilities in our products or services, the failure of our products or services to detect

or prevent a security breach, or the misuse of our products could harm our reputation and divert resources.

Related to Our Intellectual Property

proprietary rights may be difficult to enforce, which could enable others to copy or use aspects of our products without compensating

by others that we infringe their proprietary technology or other litigation matters could harm our business.

rely on the availability of third-party licenses, and our inability to maintain those licenses could harm our business.

use of open-source software in our products could negatively affect our ability to sell our products and subject us to possible

Related to Cyberattacks

of our information technology may be threatened.

of our products, services, devices, and customers’ data may be breached.

and deployment of defensive measures are ongoing.

and misuse of personal data could result in liability and harm our reputation.

our end users experience data losses, our brand, reputation and business could be harmed.

Related to Regulations and Our Compliance with Such Regulations

We previously identified material weaknesses in our disclosure controls and procedures and internal control over

financial reporting.

If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal

control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting

and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our

common stock.

are subject to changing laws and regulations.

Our failure to comply with laws and regulations applicable

to our business could subject us to fines and penalties and could also cause us to lose potential customers, clients,

licensees, resellers and/or for licensees and resellers to lose potential customers in the public sector or negatively impact our

ability to contract with the public sector.

Governmental restrictions on the sale of our products and

services in non-U.S.

markets could negatively affect our

business, financial condition, and financial results.

Risks Related to Our Financial Position and Need

We have incurred net losses

and may never achieve profitability.

Our ability to continue

as a going concern may depend upon our ability to raise additional capital and such capital may not be available on acceptable terms,

If we can raise additional

funding, we may be required to do so on terms that are dilutive to our stockholders.

We will continue to incur

increased costs as a result of being a reporting company and, given our limited capital resources, such additional costs may have

an adverse impact on our profitability.

We may apply working capital

and future funding to uses that ultimately do not improve our operating results or increase the market price of our securities.

Risks Related to Our Common Stock

The market price for our

common stock has been volatile, and you may not be able to sell our stock at a favorable price, or at all.

Substantial sales of our

common stock, or the perception that such sales might occur, could depress the market price of our common stock.

Holders of our common stock

have a risk of potential dilution if we issue additional shares of common stock in the future.

The anti-dilutive rights

of certain warrants could result in significant dilution to our existing stockholders and/or require us to issue a substantially

greater number of shares, which may adversely affect the market price of our common stock.

Certain warrants issued

in 2021 inhibit our access to equity capital, if we should need it, which may limit our ability to grow and maintain our competitiveness.

The purchase agreement related

to our 2021 private placement includes covenants that we must comply with, or we may suffer potential monetary and other penalties.

Our common shares are thinly

traded, and in the future may continue to be thinly traded, and you may be unable to sell your shares at or near ask prices or at

all, if you need to sell your shares to raise money or otherwise desire to liquidate such shares.

A significant number of

our shares have been registered for resale, and their sale or potential sale may depress the market price of our common stock.

Future sales and issuances

of our securities could result in additional dilution of the percentage ownership of our stockholders and could cause our share price

Our common stock is subject

to restrictions on sales by broker-dealers and penny stock rules, which may be detrimental to investors.

Because our common stock

is quoted on the OTCQB instead of a national exchange, our investors may have difficulty selling their stock or may experience negative

volatility on the market price of our common stock.

Our charter allows us to

issue “blank check” preferred stock and establish its terms, conditions, rights, powers and preferences without stockholder

We have never paid or declared

any dividends on our common stock.

If securities or industry

analysts do not initiate research coverage on us and, if initiated, fail to publish research or reports, or publish unfavorable research

or reports, about our business, our stock price and trading volume may decline.

The sale of shares of our

common stock by our directors and officers may adversely affect the market price for our common stock.

Related to Our Business and Results of Operations

Inflation and related geo-political events increase

the risk that we are unable to achieve and maintain profitable operations.

business may be affected by general economic, political, and market conditions, including any resulting negative impact on spending by

our clients and customers.

Some of our clients may view our services as a discretionary purchase and may in the future reduce their

spending on our services during an economic downturn, especially in the event of a prolonged recessionary period.

Concerns about inflation,

rising interest rates, unemployment trends, geopolitical issues, including wars and other armed conflicts, global health epidemics and

other highly communicable diseases, bank insolvency and related uncertainty and volatility in the financial services industry, or a widespread

economic slowdown or recession (in the United States or internationally) have led to, and could continue to lead to, increased market

volatility and economic uncertainty, which could cause current and prospective customers and clients to delay, decrease, or cancel purchases

of our services, or delay or default on their payment obligations.

As a result, our business, results of operations, and financial condition

may be significantly affected by changes in the economy generally.

depend significantly upon the continued involvement of our present management and on our ability to attract and retain talented employees.

success depends significantly upon our present management, most notable our Chief Executive Officer, Brian Haugli, and our Chief Financial

Officer, Ryan Polk, who are involved in the development of our products as well as in our strategic planning and operations.

officers and key personnel are at-will employees.

In addition, many of our key technologies and systems are custom-made for our business

by our key personnel.

The loss of key personnel, including key members of our management team, as well as certain of our key marketing,

sales, product development, or technology personnel, could disrupt our operations and have an adverse effect on our ability to grow our

Additionally, we will need to adapt and respond to frequently changing circumstances that may impact our workforce, such as

natural disasters or pandemics, or our ability to maintain an effective workforce may be impacted.

execute our business plan, we must attract and retain highly qualified personnel.

Competition for these employees is intense, and we may

not be successful in attracting and retaining qualified personnel.

We have experienced, and we may continue to experience, difficulty

in hiring and retaining highly skilled employees with appropriate qualifications.

we are less successful in our recruiting efforts, or if we are unable to retain key existing employees, our ability to develop and deliver

successful products and services will be adversely affected.

Effective succession planning is also important to our long-term success.

Our failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning

and execution.

If we are unable to develop new and enhanced

products and services, or if we are unable to continually improve the performance, features, and reliability of our existing products

and services, our competitive position would weaken, and our business and operating results could be adversely affected.

Our future success depends on our ability to effectively

respond to evolving threats to consumers and potential customers, as well as competitive technological developments and industry changes,

by developing or introducing new and enhanced products and services on a timely basis.

In the past, Cipherloc incurred significant research

and development expenses.

As a result of the Business Combination, we expect to continue to incur research and development expenses as

we strive to remain competitive and as we focus on organic growth through internal innovation.

If we are unable to anticipate or react

to competitive challenges or if existing or new competitors gain market share in any of our markets, our competitive position would weaken,

and we could experience a decline in our revenues and net income, which could adversely affect our business and operating results.

Additionally,

we must continually address the challenges of dynamic and accelerating market trends, increasingly sophisticated cyber-attacks and intrusions

and competitive developments.

Customers may require features and capabilities that our current products do not have.

Our failure to develop

new products and improve our existing products to satisfy customer preferences and needs and effectively compete with other market offerings

in a timely and cost-effective manner will harm our ability to retain our customers (if any) and the ability of our licensees or resellers

to retain their customers, and to create or increase demand for our products, which may adversely impact our operating results.

The development

and introduction of our new or enhanced products will involve a significant commitment of time and resources and will be subject to a

number of risks and challenges, including but not limited to:

Lengthy development cycles;

Evolving industry and regulatory standards and technological developments by our competitors and customers (if any) and the customers of our licensees and resellers;

Rapidly changing customer preferences and needs;

Evolving platforms, operating systems, and hardware products, such as mobile devices, and related product and service interoperability challenges;

Entering new or unproven markets;

Executing new product and service strategies.

If we are not successful in managing these risks and

challenges, or if our new or improved products and services are not technologically competitive in the market, or do not achieve market

acceptance, our business and operating results would be adversely affected, our market share would decline, and our margins would contract.

operating results may vary significantly from period to period and have been unpredictable, which has and might continue to cause the

market price of our common stock to be volatile.

operating results, in particular, our revenues, gross margins, operating margins, and operating expenses, have historically varied significantly

from period to period, and we expect such variation to continue as a result of a number of factors, many of which are outside of our

control and may be difficult to predict, including:

ability to attract and retain customers (if any) and/or the ability of our licensees and resellers to retain customers or sell products

and services;

budgeting cycles, seasonal buying patterns, and purchasing practices of potential customers and customers of our licensees and resellers;

timing and success of our new product and service introductions by us or our competitors or any other change in the competitive landscape

of our industry, including consolidation among our competitors, licensees, resellers, clients, or customers, and strategic relationships

entered into by and between our competitors;

in the mix of our services, products, and support;

in the growth rate of the cybersecurity technology market;

timing and costs related to the development or acquisition of technologies or businesses or strategic partnerships;

of synergy, or the inability to realize expected synergies, resulting from any acquisitions or strategic partnerships;

inability to execute, complete or integrate efficiently any acquisitions that we have or may hereafter undertake;

expenses, unforeseen liabilities, or write-downs and any impact on our operating results from any acquisitions we may consummate;

ability to create sizeable and productive distribution channels for our proprietary software;

by potential customers, or the customers of our licensees and resellers, to purchase cybersecurity solutions from larger, more established

cybersecurity software and service vendors, or from their sales channel partners;

of revenue recognition from the delivery of existing and future statements of work;

or credit difficulties confronting customers (if any), our licensees and resellers, or the customers of our licensees and resellers,

which could adversely affect their ability to purchase or pay for our products and services and offerings;

cost and potential outcomes of any litigation, which could have a material adverse effect on our business;

or cyclical fluctuations in our markets due to holiday schedules, industry events, or customer funding policies that may impact our

ability to secure new clients or deliver services to existing clients;

accounting pronouncements or changes in our accounting policies;

macroeconomic conditions including interest rates, inflation and increasing labor costs, in some or all regions in which we operate.

one of the factors above, or the cumulative effect of some of the factors referred to above, may result in significant fluctuations in

our operating results including our revenue and net income.

This variability and unpredictability could result in our failure to meet

our revenue, margin, or other operating result expectations, or those of securities analysts or investors for a particular period.

we fail to meet or exceed such expectations for these or any other reasons, the market price of our common stock could decline substantially,

and we could face costly lawsuits, including securities class action suits.

future revenue and operating results will depend significantly on our ability to retain clients and customers and the ability to add

new clients and customers.

Any decline in our retention rates or failure to add new clients and customers will harm our business prospects

and operating results.

anticipate that our future revenue and operating results will depend significantly on our ability to retain clients and customers and

our ability add new clients and customers.

In addition, we may not be able to predict or anticipate accurately future trends in retention

or effectively respond to such trends.

Our retention rates may decline or fluctuate due to a variety of factors, including the following:

clients’ and customers’ levels of satisfaction or dissatisfaction with our products and services;

quality, breadth, and prices of our products and services;

general reputation and events impacting that reputation;

products and services and related pricing offered by our competitors;

by new services or changes in law or regulations that impact the need for or efficacy of our products and services;

customer service activities and responsiveness to any customer issues;

dissatisfaction if they do not receive the full benefit of our services due to their failure to provide all relevant data;

dissatisfaction with the methods or sufficiency of our remediation services;

in target customers’ planned spending levels as a result of general economic conditions or other factors such as inflation.

we do not retain our existing clients and customers, or add new clients and customers, we may not generate revenue and/or our revenue

may grow more slowly than expected, or decline, and our operating results and gross margins will be negatively impacted.

our business and operating results may be harmed if we are unable to increase our retention rates or if they decline.

also must continually add new clients and customers, both to replace those who cancel or elect not to renew their agreements with us

and to grow our business beyond our current level.

If we are unable to attract new clients and customers in numbers greater than the

number that cancel or elect not to renew their agreements with us, our client base will decrease, and our business, operating

results, and financial condition would be adversely affected.

We face intense

competition, especially from larger, well-established companies, and we may lack sufficient financial or other resources to maintain

or improve our competitive position.

The market for cybersecurity

technologies is intensely competitive, and we expect competition to increase in the future from established competitors and new market

Our main competitors fall into three categories:

large companies that incorporate

security or encryption features in their services and products, such as Google’s Cloud Platform, Amazon’s AWS services,

and Microsoft’s Azure, or those that have acquired, or may acquire, cybersecurity services, products, or technologies and have

the technical and financial resources to bring competitive solutions to the market;

independent security vendors,

such as Optiv and Coalfire, that offer cybersecurity products;

small and large companies

that offer cybersecurity services and technologies that compete with our services and products.

Our current and proposed

products and services face, and will continue to face, intense competition from larger and smaller companies, as well as from academic

and research institutions.

We compete in an industry that is characterized by:

(i) rapid technological change, (ii) evolving industry

standards, (iii) emerging competition, and (iv) new service and product introductions.

Our competitors have existing products and technologies

that will compete with our products and technologies and may develop and commercialize additional products and technologies that will

compete with our products and technologies.

Some of these new products and services may have functionality that ours do not have.

many competing companies and institutions have greater financial resources than us, they may be able to:

(i) provide broader services

and product lines, and (ii) fully develop and deploy new products faster than we can with their larger and broader resources.

Our competitors

also generally have greater development capabilities than we do and have greater experience in undertaking testing of products, obtaining

regulatory approvals, and manufacturing and marketing their products.

They may also have greater name recognition and better access to

customers, clients, licensees, and resellers than we do.

Our chief services competitors include companies such as Optiv, NCC, Coalfire,

PwC, EY, Deloitte, and GuidePoint.

Our primary product competitors for Enclave are companies such as Perimeter 81, Zscaler, Palo Alto,

Many of our existing

competitors have, and some of our potential competitors may have, substantial competitive advantages such as:

greater name recognition

and longer operating histories;

larger sales and marketing

budgets and resources;

broader distribution and

established relationships with distributors and customers (if any), or the customers of our licensees and resellers;

greater customer support

greater resources to make

strategic acquisitions or enter strategic partnerships;

greater financial, technical,

and other resources.

In addition, some of

our larger competitors have substantially broader and more diverse product and service offerings, which may make them less susceptible

to downturns in a particular market and allow them to leverage their relationships based on other services and products or incorporate

functionality into existing services and products to gain business in a manner that discourages users from purchasing our services, products

and subscriptions, including through selling at zero or negative margins, offering concessions, product bundling, or closed technology

Many of our smaller competitors that specialize in providing protection from a single type of security threat are often able

to deliver these specialized cybersecurity or security products to the market more quickly than we can.

Organizations that use

legacy products and services may believe that these products and services are sufficient to meet their security needs, or that our platform

only serves the needs of a portion of the cybersecurity technology market.

Accordingly, many organizations have invested substantial

personnel and financial resources to design and operate their networks and have established deep relationships with other providers of

cybersecurity services and products.

As a result, these organizations may prefer to purchase from their existing suppliers rather than

add or switch to a new supplier such as us, regardless of product performance, features, or greater services offerings, or may be more

willing to incrementally add solutions to their cybersecurity infrastructure from existing suppliers than to replace it wholesale with

our solutions.

Conditions in our market

could change rapidly and significantly because of technological advancements, partnering or acquisitions by our competitors, or continuing

market consolidation.

New start-up companies that innovate and large competitors that are making significant investments in research

and development may invent similar or superior services, products, and technologies that compete with our services and products.

of our competitors have made or could make acquisitions of businesses that may allow them to offer more directly competitive and comprehensive

solutions than they had previously offered and adapt more quickly to innovative technologies and changing needs.

Our current and potential

competitors may also establish cooperative relationships among themselves or with third-parties that may further enhance their resources

and reduce their expenses.

These competitive pressures in our market or our failure to compete effectively may result in price reductions,

fewer orders, reduced revenue and gross margins, and loss of market share.

Any failure to meet and address these factors could materially

harm our business and operating results.

network or data security incident may allow unauthorized access to our or our end users’ network or data, harm our reputation,

create additional liability and adversely impact our financial results.

Increasingly,

companies are subject to a wide variety of attacks on their networks on an ongoing basis.

In addition to traditional computer “hackers”

malicious code (such as viruses and worms), phishing attempts, employee theft or misuse, and denial of service attacks, sophisticated

nation-state and nation-state supported actors engage in intrusions and attacks (including advanced persistent threat intrusions) and

add to the risks to internal networks, cloud deployed enterprise and customer-facing environments and the information they store and

Despite significant efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate

We, and our third-party software and service providers, may face security threats and attacks from a variety of sources.

Our data, corporate systems, third-party systems and security measures and/or those of our licensees, resellers, clients, customers,

software providers, independent contractors, employees, end users may be breached due to the actions of outside parties, employee error,

malfeasance, a combination of these, or otherwise, and, as a result, an unauthorized party may obtain access to our or our customers’

Furthermore, as a provider of cybersecurity technologies, we may be a more attractive target for such attacks.

A breach in our

data security or an attack against our service availability, or that of our third-party service providers, could impact our networks

or networks secured by our services, products and subscriptions, creating system disruptions or slowdowns and exploiting security vulnerabilities

of our services, products, and the information stored on our networks or those of our third-party service providers could be accessed,

publicly disclosed, altered, lost, or stolen, which could subject us to liability and cause us financial harm.

Any actual or perceived

breach of network security in our systems or networks, or any other actual or perceived data security incident we or our third-party

service providers suffer, could result in damage to our reputation, negative publicity, loss of channel partners, licensees, resellers,

clients, customers, and sales, loss of competitive advantages over our competitors, increased costs to remedy any problems and otherwise

respond to any incident, regulatory investigations and enforcement actions, costly litigation, and other liability.

In addition, we may

incur significant costs and operational consequences of investigating, remediating, eliminating, and putting in place additional tools

and devices designed to prevent actual or perceived security incidents, as well as the costs to comply with any notification obligations

resulting from any security incidents.

Any of these negative outcomes could adversely impact the market perception of our services, products

and customer and investor confidence in our company and, moreover, could seriously harm our business or operating results.

is essential to our business strategy that our technology and network infrastructure remain secure and are perceived by any clients and

customers we have, and others, to be secure.

Despite security measures, however, any network infrastructure may be vulnerable to cyber-attacks

by hackers and other security threats.

We may face cyber-attacks that attempt to penetrate our network security, sabotage or otherwise

disable our research, products and services, misappropriate our proprietary information, or that of our licensees and resellers, or their

or our customers and partners, which may include personally identifiable information, or cause interruptions of our internal systems

and services.

Any cyber-attacks could negatively affect our reputation, damage our network infrastructure and our ability to deploy our

products and services, harm our business relationships, and expose us to financial liability.

services, products, systems, and website and the data on these sources may be subject to intentional disruption that could materially

harm our reputation and future sales.

our precautions and ongoing investments to protect against security risks, data protection breaches, cyber-attacks, and other intentional

disruptions of our products and services, we expect to be an ongoing target of attacks specifically designed to impede the performance

and availability of our offerings and harm our reputation as a company.

Similarly, experienced computer programmers or other sophisticated

individuals or entities, including malicious hackers, state-sponsored organizations, and insider threats including actions by employees

and third-party service providers, may attempt to penetrate our network security or the security of our systems and websites and misappropriate

proprietary information or cause interruptions of our services.

This risk has increased as more individuals are working from home and

utilize home networks for the transmission of sensitive information.

Such attempts are increasing in number and in technical sophistication,

and if successful could expose us and the affected parties to risk of loss or misuse of proprietary or confidential information or disruptions

of our business operations.

While we engage in a number of measures aimed to protect against security breaches and to minimize problems

if a data breach were to occur, our information technology systems and infrastructure may be vulnerable to damage, compromise, disruption,

and shutdown due to attacks or breaches by hackers or due to other circumstances, such as error or malfeasance by employees or third-party

service providers or technology malfunction.

The occurrence of any of these events, as well as a failure to promptly remedy these events

should they occur, could compromise our systems, and the information stored in our systems could be accessed, publicly disclosed, lost,

stolen, or damaged.

Any such circumstance could adversely affect our ability to attract and maintain licensees and resellers, and/or

for us or our licensees and resellers to retain customers, as well as strategic partners, cause us to suffer negative publicity, and

subject us to legal claims and liabilities or regulatory penalties.

In addition, unauthorized parties might alter information in our

databases, which would adversely affect both the reliability of that information and our ability to market and perform our services.

Techniques used to obtain unauthorized access or to sabotage systems change frequently, are constantly evolving and generally are difficult

to recognize and react to effectively.

We may be unable to anticipate these techniques or to implement adequate preventive or reactive

Several recent, highly publicized data security breaches at other companies have heightened consumer awareness of this issue

and may embolden individuals or groups to target our systems or those of our licensees, resellers, or strategic partners, or our or their

products are complex and operate in a wide variety of environments, systems and configurations, which could result in failures of our

products to function as designed and negatively impact our brand recognition and reputation.

we offer very complex products, errors, defects, disruptions, or other performance problems with our products may and have occurred.

For example, we may experience disruptions, outages, and other performance problems due to a variety of factors, including infrastructure

changes, human or software errors, capacity constraints due to an overwhelming number of users accessing our websites simultaneously,

fraud, or security attacks.

In some instances, we may not be able to identify the cause or causes of these performance problems within

an acceptable period of time.

Interruptions in our products could impact our revenues or cause licensees, resellers, clients, and customers

to cease doing business with us.

Our operations are dependent upon our ability to protect our technology infrastructure against damage

from business continuity events that could have a significant disruptive effect on our operations.

We could potentially lose end user/customer

data or experience material adverse interruptions to our operations or delivery of products and services to our clients in a disaster

recovery scenario.

Further, our business would be harmed if any of these types of events caused our licensees, resellers, or customers,

or our licensees’ and resellers’ customers or potential customers, to believe that our products are unreliable.

that our brand recognition and reputation are critical to retaining existing licensees, resellers, clients and customers, and attracting

new licensees, resellers, clients, and customers.

Furthermore, negative publicity, whether or not justified, relating to events or activities

attributed to us, our employees, our strategic partners, our affiliates, or others associated with any of these parties, may tarnish

our reputation and reduce the value of our brands.

Damage to our reputation may reduce demand for our products and have an adverse effect

on our business, operating results, and financial condition.

Moreover, any attempts to rebuild our reputation and restore the value of

our brands after such an event may be costly and time-consuming, and such efforts may not ultimately be successful.

our products and services do not work properly, our business, financial condition and financial results could be negatively affected,

and we could experience negative publicity, declining sales, and legal liability.

produce complex products that incorporate leading-edge technology that must operate in a wide variety of technology environments.

may contain defects or “bugs” that can interfere with expected operations in these varying technological environments.

can be no assurance that our testing programs will be adequate to detect all defects prior to the product being introduced, which might

decrease customer satisfaction with our products and services.

The product reengineering cost to remedy a product defect could be material

to our operating results.

Our inability to cure a product defect could result in the temporary or permanent withdrawal of a product or

service, negative publicity, damage to our reputation, failure to achieve market acceptance, lost revenue and increased expense, any

of which could have a material adverse effect on our business, financial condition and financial results.

or problems with systems and infrastructure supplied by third-parties could negatively affect our business, financial condition and financial

business relies on third-party suppliers of the telecommunications infrastructure.

We, our clients and customers and our licensees and

resellers, and their customers, will use various communications service suppliers and the global internet to provide network access between

our data centers and our customers and end-users of our services.

If those suppliers do not enable us to provide our clients and customers,

or our licensees’ and resellers’ customers with reliable, real-time access to our systems (to the extent required), we may

be unable to gain or retain clients, customers, licensees and resellers.

These suppliers periodically experience outages or other operational

problems as a result of internal system failures or external third-party actions.

Supplier outages or other problems could materially

adversely affect our business, financial results and financial condition.

global financial conditions have been characterized by increased volatility, which could negatively impact our business, prospects, liquidity

and financial condition.

global financial conditions and recent market events have been characterized by increased volatility, and the resulting tightening of

the credit and capital markets has reduced the amount of available liquidity and overall economic activity.

We cannot guarantee that

debt or equity financing, or the ability to generate cash from operations, will be available or sufficient to meet or satisfy our initiatives,

objectives or requirements.

Our inability to access sufficient amounts of capital on terms acceptable to us for our operations will negatively

impact our business, prospects, liquidity and financial condition.

we experience delays and/or defaults in payments, we could be unable to recover all expenditures.

of the nature of our contracts, at times we will commit resources to projects prior to receiving payments from the counterparty in amounts

sufficient to cover our expenditures on projects as they are incurred.

Delays in payments may require us to make a working capital investment.

Defaults by any of our clients, customers, licensees, and resellers could have a significant adverse effect on our revenues, profitability

and cash flow.

Our clients, customers, licensees, and resellers may in the future default on their obligations to us or them due to bankruptcy,

lack of liquidity, operational failure or other reasons deriving from the current general economic environment.

If a client, customer,

or licensee defaults on its obligations to us or our licensee, or a licensee or reseller defaults in its payments to us, it could have

a material adverse effect on our business, financial condition, results of operations or cash flows.

If we do not effectively

manage our growth, our business resources and systems may become strained, and we may be unable to increase revenue growth.

We plan to grow aggressively

and, if successful, our future growth may provide challenges to our organization, requiring us to expand our personnel and our operations.

Future growth may strain our infrastructure, operations and other managerial and operating resources.

If our business resources become

strained, our earnings may be adversely affected, and we may be unable to increase revenue growth.

Further, we may undertake contractual

commitments that exceed our labor resources, which could also adversely affect our earnings and our ability to increase revenue growth.

Our growth depends

in part on the success of our strategic relationships with third-parties.

In order to grow our

business, we anticipate that we will need to continue to depend on our relationships with third-parties, including our technology providers.

Identifying such third-parties, and negotiating and documenting relationships with them, requires significant time and resources.

competitors may be effective in providing incentives to third-parties to favor their products or services over utilization of our products

and services.

In addition, acquisitions of our business partners by our competitors could result in a decrease in the number of our current

and potential clients, customers, licensees, resellers, and end users.

If we are unsuccessful in establishing or maintaining our relationships

with third-parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our results of operations

Even if we are successful, we cannot assure you that these relationships will result in increased use of our products or

increased revenue.

litigation, government investigations, and other proceedings may adversely affect our business and results of operations.

a company offering a wide range of products and services, we are regularly subject to actual and threatened claims, litigation, reviews,

investigations, and other proceedings, including proceedings relating to goods and services offered by us and by third-parties, and other

Any of these types of proceedings, including currently pending proceedings as discussed herein, may have an adverse effect on

us because of legal costs, disruption of our operations, diversion of management resources, negative publicity, and other factors.

outcomes of these matters are inherently unpredictable and subject to significant uncertainties.

Determining legal reserves and possible

losses from such matters involves judgment and may not reflect the full range of uncertainties and unpredictable outcomes.

final resolution of such matters, we may be exposed to losses in excess of the amount recorded, and such amounts could be material.

any of our estimates and assumptions change or prove to have been incorrect, it could have a material effect on our business, consolidated

financial position, results of operations, or cash flows.

In addition, it is possible that a resolution of one or more such proceedings,

including as a result of a settlement, could require us to make substantial future payments, prevent us from offering certain products

or services, require us to change our business practices in a manner materially adverse to our business, requiring development of non-infringing

or otherwise altered products or technologies, damaging our reputation, or otherwise having a material adverse effect on our operations.

The ability of

our executive officers and directors to control our business may limit or eliminate other stockholders’ ability to influence corporate

As of September 30,

2024, our executive officers and directors owned approximately 46.0% of the Company’s total issued and outstanding shares.

of this voting control through share ownership by the executive officers and directors, these individuals, acting as a group, have significant

influence over corporate actions requiring a shareholder vote, including the selection of our directors, who in turn approve all executive

officers, authorizing change-in-control transactions, amendments to our Articles of Incorporation, and other significant corporate matters.

The interests of our executive officers and directors may differ from the interests of other stockholders with respect to the issuance

of shares, business transactions with or sales to other companies, selection of future officers and directors and other business decisions.

The minority stockholders will have no way of overriding the decisions made by our executive officers and directors acting as a group.

Related to Our Industry

face intense competition.

expect to experience intense competition across all markets for our products and services.

Our competitors that are focused on narrower

product lines may be more effective in devoting technical, marketing, and financial resources to compete with us.

In addition, barriers

to entry in our businesses generally are low, and products and services, once developed, can be distributed broadly and quickly at a

relatively low cost.

Open-source software vendors are devoting considerable efforts to developing software that mimics the features and

functionality of our current and anticipated products.

These competitive pressures may result in decreased sales volumes, price reductions,

and/or increased operating costs, such as for marketing and sales incentives, resulting in lower revenue, gross margins, and operating

in product development schedules may adversely affect our revenues.

development of cybersecurity products and services is a complex and time-consuming process.

New products and services can require long

development and testing periods.

Future revenues may include the sale of new products and services that may not yet be developed.

delays in product development, including quality assurance testing or significant problems in creating new products and services, could

adversely affect our revenue recognition from new products and services.

Revenue in certain reporting periods could be lower than anticipated

because product development problems could cause the loss of a competitive sale transaction, a delay in invoicing a client, customer,

licensee, or reseller or the renegotiation of terms to retain a sale transaction.

we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological and market developments and successfully

manage product introductions and transitions to meet changing needs in the cybersecurity technology market, our competitive position,

financial results, and prospects will be harmed.

cybersecurity technologies market has grown quickly and is expected to continue to evolve rapidly.

Moreover, many of our potential licensees

and resellers and their customers operate in markets characterized by rapidly changing technologies and business plans, which require

them to add numerous network access points and adapt increasingly complex enterprise networks, incorporating a variety of hardware, software

applications, operating systems, and networking protocols.

If we fail to accurately predict potential changing needs and emerging technological

trends in the cybersecurity technology industry, including in the areas of mobility, virtualization, and cloud computing, our business

could be harmed.

If we experience unanticipated delays in the availability of new services, products, platform features, and subscriptions,

or fail to meet expectations for such availability, our competitive position, financial results, and business prospects will be harmed.

Additionally,

we must commit significant resources to developing new products and services before knowing whether our investments will result in services,

products, subscriptions, and features that the market will accept.

The success of new platform features depends on several factors, including

appropriate new product definition, differentiation of new services, products, subscriptions, and platform features from those of our

competitors, and market acceptance of these products, services and platform features.

Moreover, successful new product introduction and

transition depends on a number of factors including, our ability to manage the risks associated with new product production ramp-up issues,

the availability of application software for new products, and the risk that new products may have quality or other defects or deficiencies,

especially in the early stages of introduction.

We cannot assure you that we will successfully identify opportunities for new products

and services, develop and bring new products and subscriptions to market in a timely manner, or achieve market acceptance of our products

and subscriptions, or that products, subscriptions, and technologies developed by others will not render our products, subscriptions,

or technologies obsolete or noncompetitive.

possible, or perceived defects or vulnerabilities in our products or services, the failure of our products or services to detect or prevent

a security breach, or the misuse of our products could harm our reputation and divert resources.

our products and services are complex, they may contain defects or errors that are not detected until after their commercial release

and deployment.

Defects or vulnerabilities may impede or block network traffic, cause our products or services to be vulnerable to electronic

break-ins or cause them to fail to help secure networks.

We are also susceptible to errors, defects, vulnerabilities, or attacks that

may arise at, or be inserted into our products, which are out of our control.

Different users deploy and use cybersecurity products in

different ways, and certain deployments and usages may subject our products to adverse conditions that may negatively impact the effectiveness

and useful lifetime of our products.

Our networks and products, including any cloud-based technology we utilize, could be targeted by

attacks specifically designed to disrupt our business and harm our reputation.

Our products may not prevent all security threats.

the techniques used by computer hackers to access or sabotage networks change frequently and generally are not recognized until launched

against a target, we may be unable to anticipate these techniques.

An actual, possible, or perceived security breach or infection of

the network of one of the users of our products, regardless of whether the breach is attributable to the failure of our products or services

to prevent the security breach, could adversely affect the market’s perception of our security products and services and, in some

instances, subject us to potential liability that is not contractually limited.

We may not be able to correct any security flaws or vulnerabilities

promptly, or at all.

Our products may also be misused by potential end users or third-parties who obtain access to our products.

example, our products could be used to censor private access to certain information on the internet.

Such use of our products for censorship

could result in negative press coverage and negatively affect our reputation, even if we take reasonable measures to prevent any improper

shipment of our products or if our products are being used improperly or provided by an unauthorized third-party.

actual, possible, or perceived defects, errors or vulnerabilities in our products and services, or misuse of our products and services,

could result in:

expenditure of significant financial and development resources in efforts to analyze, correct, eliminate or work around errors or

defects or to address and eliminate vulnerabilities;

loss of potential clients, customers, licensees, resellers, or distribution partners;

or lost revenue;

or failure to attain market acceptance;

publicity and harm to our reputation;

regulatory inquiries, or investigations that may be costly and harm our reputation and, in some instances, subject us to potential

liability that is not contractually limited.

Related to Our Intellectual Property

proprietary rights may be difficult to enforce, which could enable others to copy or use aspects of our products without compensating

rely primarily on patent, trademark, copyright and trade secrets laws and confidentiality procedures and contractual provisions to protect

our technology.

The claims eventually allowed on any patents issued in the future may not be sufficiently broad to protect our technology

Any issued patents may be challenged, invalidated or circumvented, and any rights granted under these patents may not actually

provide adequate offensive scope, defensive protection or competitive advantages to us.

Patent applications in the United States are

typically not published until at least eighteen (18) months after filing, or, in some cases, not at all, and publications of discoveries

in industry-related literature lag behind actual discoveries.

We cannot be certain that we were the first to make the inventions claimed

in our pending patent applications, or that we were the first to file for patent protection.

Additionally, the process of obtaining patent

protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable

cost or in a timely manner.

In addition, recent changes to the patent laws in the United States, including but not limited to “adversary

proceedings,” “first to file,” and “post-grant review” provisions, may bring into question the validity

of certain software patents and may make it more difficult and costly to prosecute patent applications.

As a result, we may not be able

to obtain adequate patent protection or effectively enforce our issued patents.

our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information

that we regard as proprietary.

We generally enter into confidentiality or non-solicitation agreements with our employees, consultants,

and vendors, as the case may be, and generally limit access to and distribution of our proprietary information.

However, we cannot guarantee

that the steps taken by us will prevent misappropriation of our technology.

Policing unauthorized use of our technology or products is

In addition, the laws of some foreign countries do not protect our proprietary rights to as great an extent as the laws of

the United States, and many foreign countries do not enforce these laws as diligently as government agencies and private parties in the

United States.

From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights,

to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of

infringement or invalidity.

Such litigation could result in substantial costs and diversion of resources and could negatively affect

our business, operating results and financial condition.

If we are unable to protect our proprietary rights (including aspects of our

software and products protected other than by patent rights), we may find ourselves at a competitive disadvantage to others who need

not incur the additional expense, time and effort required to create the innovative products that would compete with our products.

by others that we infringe their proprietary technology or other litigation matters could harm our business.

and other intellectual property disputes are common in the cybersecurity and technology industries.

Third-parties may in the future assert

claims of infringement of intellectual property rights against us.

They may also assert such claims against our licensees, resellers,

end users or distribution partners whom we may have to indemnify against claims that our products infringe the intellectual property

rights of third-parties.

As the number of products and competitors in our market increases and overlaps in service and functionality

occur, infringement claims may increase.

Any claim of infringement by a third-party, even those without merit, could cause us to incur

substantial costs defending against the claim and could distract our management from our business.

In addition, litigation may involve

patent holding companies, non-practicing entities, or other adverse patent owners who have no relevant product revenue and against whom

our own patents may therefore provide little or no deterrence to such plaintiffs we will counter-claim for infringement and invalidation

of their patent(s).

third-parties may offer a license to their technology, the terms of any offered license may not be acceptable, and the failure to obtain

a license or the costs associated with any license could cause our business, financial condition and results of operations to be materially

and adversely affected.

In addition, some licenses may be non-exclusive and, therefore, our competitors may have access to the same technology

licensed to us.

Alternatively, we may be required to develop non-infringing technology, which could require significant time, effort,

and expense, and may ultimately not be successful.

Furthermore, a successful claimant could secure a judgment, or we may agree to a settlement

that prevents us from distributing certain products or performing certain services or that requires us to pay substantial damages (including

treble damages if we are found to have willfully infringed such claimant’s patents), royalties or other fees.

Any of these events

could seriously harm our business, financial condition and results of operations.

may be subject to lawsuits claiming patent infringement.

We may also be subject to other litigation in addition to patent infringement

claims, such as employment-related litigation and disputes, as well as general commercial litigation, and could become subject to other

forms of litigation and disputes, including stockholder litigation.

If we are unsuccessful in defending any such claims, our operating

results and financial condition and results may be materially and adversely affected.

For example, we may be required to pay substantial

damages and could be prevented from selling certain of our products.

Litigation, with or without merit, could negatively impact our business,

reputation and sales in a material adverse fashion.

rely on the availability of third-party licenses, and our inability to maintain those licenses could harm our business.

of our products or products under development include software or other intellectual property licensed from third-parties.

necessary in the future to renew licenses relating to various aspects of these products or to seek new licenses for existing or new products.

Licensors may claim we owe them additional license fees for past and future use of their software and other intellectual property or

that we cannot utilize such software or intellectual property in our products going forward.

There can be no assurance that the necessary

licenses would be available on acceptable terms, if at all.

inability to obtain certain licenses or other rights or to obtain such licenses or rights on favorable terms or for reasonable pricing,

or the need to engage in litigation regarding these matters, could result in delays in product releases until equivalent technology can

be identified, licensed or developed, if at all, and integrated into our products.

Further such events may result in significant license

fees and have a material adverse effect on our business, operating results, and financial condition.

Moreover, the inclusion in our products

or software or other intellectual property licensed from third-parties on a non-exclusive basis or the inclusion in our products of opensource

software may limit our ability to differentiate our products from those of our competitors.

Not differentiating our products from those

of our competitors may adversely affect our results of operations, including reducing our revenue and net income.

also rely on technologies licensed from third-parties in order to operate functions of our business.

If any of these third-parties allege

that we have not properly paid for such licenses or that we have improperly used the technologies under such licenses, we may need to

pay additional fees or obtain new licenses, and such licenses may not be available on terms acceptable to us or at all or may be costly.

In any such case, or if we were required to redesign our internal operations to function with new technologies, our business, results

of operations and financial condition could be harmed.

use of open-source software in our products could negatively affect our ability to sell our products and subject us to possible litigation.

A portion of the technologies we use incorporates open source software,

and we may incorporate open source software in the future.

Open source software is generally licensed by its authors or other third parties

under open source licenses.

These licenses may subject us to certain unfavorable conditions, including requirements that we offer our

platform that incorporates the open source software for no cost, that we make publicly available source code for modifications or derivative

works we create based upon incorporating or using the open source software, or that we license such modifications or derivative works

under the terms of the particular open source license.

Additionally, if a third-party software provider has incorporated open source software

into software that we license from such provider, we could be required to disclose any of our source code that incorporates or is a modification

of our licensed software.

If an author or other third party that distributes open source software that we use or license were to allege

that we had not complied with the conditions of the applicable license, we could be required to incur significant legal expenses defending

against those allegations and could be subject to significant damages, enjoined from offering or selling our solutions that contained

the open source software, and required to comply with the foregoing conditions.

Any of the foregoing could disrupt and harm our business,

results of operations, and financial condition.

We have established processes to help alleviate these risks, including a review process

for screening requests from our development organizations for the use of open-source software, but we cannot be sure that our processes

for controlling our use of open-source software in our products will be effective.

Related to Cyberattacks

of our information technology may be threatened.

to IT security can take a variety of forms.

Individual and groups of hackers and sophisticated organizations, including state-sponsored

organizations or nation-states, continuously undertake attacks that pose threats to our customers and our IT.

These actors may use a

wide variety of methods, which may include developing and deploying malicious software or exploiting vulnerabilities or intentionally

designed processes in hardware, software, or other infrastructure in order to attack our products and services or gain access to our

networks and datacenters, using social engineering techniques to induce our employees, users, partners, or customers to disclose passwords

or other sensitive information or take other actions to gain access to our data or our users’ or customers’ data, or acting

in a coordinated manner to launch distributed denial of service or other coordinated attacks.

Nation-state and state-sponsored actors

can deploy significant resources to plan and carry out attacks.

Nation-state attacks against us, our customers, or our partners may intensify

during periods of intense diplomatic or armed conflict, such as the ongoing conflict in Ukraine.

Inadequate account security or organizational

security practices may also result in unauthorized access to confidential data.

For example, system administrators may fail to timely

remove employee account access when no longer appropriate.

Employees or third-parties may intentionally compromise our or our users’

security or systems or reveal confidential information.

Malicious actors may employ the IT supply chain to introduce malware through

software updates or compromised supplier accounts or hardware.

are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully

defending against them.

We may have no current capability to detect certain vulnerabilities or new attack methods, which may allow them

to persist in the environment over long periods of time.

Cyberthreats can have cascading impacts that unfold with increasing speed across

our internal networks and systems and those of our partners and customers.

Breaches of our facilities, network, or data security could

disrupt the security of our systems and business applications, impair our ability to provide services to our customers and protect the

privacy of their data, result in product development delays, compromise confidential or technical business information harming our reputation

or competitive position, result in theft or misuse of our intellectual property or other assets, subject us to ransomware attacks, require

us to allocate more resources to improve technologies or remediate the impacts of attacks, or otherwise adversely affect our business.

We are also subject to supply chain cyberattacks where malware can be introduced to a software provider’s customers, including

us, through software updates.

addition, our internal IT environment continues to evolve.

Often, we are early adopters of new devices and technologies.

We embrace new

ways of sharing data and communicating internally and with partners and customers using methods such as social networking and other consumer-oriented

technologies.

Increasing use of generative AI models in our internal systems may create new attack methods for adversaries.

policies and internal security controls may not keep pace with these changes as new threats emerge, or emerging cybersecurity regulations

in jurisdictions worldwide.

of our products, services, devices, and customers’ data may be breached.

security of our products and services is important in our customers’ decisions to purchase or use our products or services.

threats are a significant challenge to companies like us whose business is providing technology products and services to others.

to our own IT infrastructure can also affect our customers.

Customers using our cloud-based services rely on the security of our infrastructure,

including hardware and other elements provided by third-parties, to ensure the reliability of our services and the protection of their

Adversaries tend to focus their efforts on the most popular operating systems, programs, and services, including many of ours,

and we expect that to continue.

In addition, adversaries can attack our customers’ cloud environments, sometimes exploiting previously

unknown vulnerabilities, Vulnerabilities in these or any product could persist if the attackers exploited the vulnerabilities with the

installation of additional malware, to further compromise customers’ systems.

Customers using our products will continue to get

attacked as they move through their digital transformation projects.

Inadequate account security practices may also result in unauthorized

access, and user activity may result in ransomware or other malicious software impacting a customer’s use of our products or services.

We are increasingly incorporating open-source software into our products.

There may be vulnerabilities in open-source software that may

make our products susceptible to cyberattacks.

customers operate complex IT systems with third-party hardware and software from multiple vendors that may include systems acquired over

They expect our products and services to support all these systems and products, including those that no longer incorporate

the strongest current security advances or standards.

As a result, we may not be able to discontinue support in our services for a product,

service, standard, or feature solely because a more secure alternative is available.

Failure to utilize the most current security advances

and standards can increase our customers’ vulnerability to attack.

Further, customers of widely varied size and technical sophistication

use our technology, and consequently may still have limited capabilities and resources to help them adopt and implement state of the

art cybersecurity practices and technologies.

In addition, we must account for this wide variation of technical sophistication when defining

default settings for our products and services, including security default settings, as these settings may limit or otherwise impact

other aspects of IT operations and some customers may have limited capability to review and reset these defaults.

may adversely impact our customers even if our product services are not directly compromised.

We are committed to notifying our customers

whose systems have been impacted as we become aware and have actionable information for customers to help protect themselves.

also committed to providing guidance and support on detection, tracking, and remediation.

We may not be able to detect the existence

or extent of these attacks for all of our customers or have information on how to detect or track an attack, when we may have no or limited

visibility into our customers’ computing environments.

and deployment of defensive measures are ongoing.

defend against security threats to our internal IT systems, our cloud-based services, and our customers’ systems, we must continuously

engineer more secure products and services, enhance security, threat detection, and reliability features, improve the deployment of software

updates to address security vulnerabilities in our own products as well as those provided by others, develop mitigation technologies

that help to secure customers from attacks even when software updates are not deployed, maintain the digital security infrastructure

that protects the integrity of our network, products, and services, and provide security tools such as firewalls, anti-virus software,

and advanced security and information about the need to deploy security measures and the impact of doing so.

Customers in certain industries

such as financial services, health care, and government may have enhanced or specialized requirements to which we must engineer our products

and services.

cost of measures to protect products and customer-facing services could reduce our operating margins.

If we fail to do these things well,

actual or perceived security vulnerabilities in our products and services, data corruption issues, or reduced performance could harm

our reputation and lead customers to reduce or delay future purchases of products or subscriptions to services, or to use competing products

Customers may also spend more on protecting their existing computer systems from attack, which could delay adoption of additional

products or services.

Customers, and third-parties granted access to their systems, may fail to update their systems, continue to run

software or operating systems we no longer support, or may fail timely to install or enable security patches, or may otherwise fail to

adopt adequate security practices.

Any of these could adversely affect our reputation and revenue.

Actual or perceived vulnerabilities

may lead to claims against us.

Our license agreements typically contain provisions that eliminate or limit our exposure to liability,

but there is no assurance these provisions will withstand legal challenges.

At times, to achieve commercial objectives, we may enter

into agreements with larger liability exposure to customers.

products operate in conjunction with and are dependent on products and components across a broad ecosystem of third-parties.

is a security vulnerability in one of these components, and if there is a security exploit targeting it, we could face increased costs,

liability claims, reduced revenue, or harm to our reputation or competitive position.

and misuse of personal data could result in liability and harm our reputation.

we continue to grow the number, breadth, and scale of our cloud-based offerings, we store and process increasingly large amounts of personal

data of our customers and users.

The continued occurrence of high-profile data breaches provides evidence of an external environment

increasingly hostile to information security.

Despite our efforts to improve the security controls across our business groups and geographies,

it is possible our security controls over personal data, our training of employees and third-parties on data security, and other practices

we follow may not prevent the improper disclosure or misuse of customer or user data we or our vendors store and manage.

third-parties who have limited access to our customer or user data may use this data in unauthorized ways.

Improper disclosure or misuse

could harm our reputation, lead to legal exposure to customers or users, or subject us to liability under laws that protect personal

data, resulting in increased costs or loss of revenue.

Our software products and services also enable our customers and users to store

and process personal data on-premises or, increasingly, in a cloud-based environment we host.

Government authorities can sometimes require

us to produce customer or user data in response to valid legal orders.

and elsewhere, we advocate for transparency concerning

these requests and appropriate limitations on government authority to compel disclosure.

Despite our efforts to protect customer and

user data, perceptions that the collection, use, and retention of personal information is not satisfactorily protected could inhibit

sales of our products or services and could limit adoption of our cloud-based solutions by consumers, businesses, and government entities.

Additional security measures we may take to address customer or user concerns, or constraints on our flexibility to determine where and

how to operate datacenters in response to customer or user expectations or governmental rules or actions, may cause higher operating

expenses or hinder growth of our products and services.

our end users experience data losses, our brand, reputation and business could be harmed.

breach of our end users’ network security and systems, or other events that cause the loss or public disclosure of, or access by

third-parties to, our end users’ files or data, could have serious negative consequences for our business, including reduced demand

for our services, an unwillingness of our clients and customers, and our licensees and resellers or their customers to use our products

or services, harm to our brand and reputation.

The techniques used to obtain unauthorized access, disable or degrade service, or sabotage

systems change frequently, often are not recognized until launched against a target, and may originate from less regulated or remote

areas around the world.

As a result, our end users may be unable to proactively prevent these techniques, implement adequate preventative

or remedial measures, or enforce the laws and regulations that govern such activities.

If our end users experience any data loss, data

disruption, or any data corruption or inaccuracies, whether caused by security breaches or otherwise, our brand, reputation and business

could be harmed.

insurance may not be available now or in the future on acceptable terms, or at all.

In addition, our policy may not cover claims against

us for loss of data or other indirect or consequential damages.

Defending a suit based on any data loss or system disruption, regardless

of its merit, could be costly and divert our management’s attention.

Risks Related

to Regulations and Our Compliance with Such Regulations

We previously

identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting.

If not remediated,

our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could

result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which

could have a material adverse effect on our financial condition and the trading price of our common stock.

Maintaining effective

internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial

Our disclosure controls and procedures and internal controls over financial reporting are currently ineffective and have

in the past been subject to material weaknesses.

A material weakness is a deficiency, or a combination of deficiencies, in internal control

over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim

financial statements will not be prevented or detected on a timely basis.

A control deficiency exists when the design or operation of

a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements

on a timely basis.

We cannot assure you

that additional material weaknesses will not arise in the future.

The development of new material weaknesses in our internal control

over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting

and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading price of our

common stock, and/or result in litigation against us or our management.

We are subject to

changing laws and regulations.

government agencies

continue to implement extensive requirements on our industry.

These regulations have both positive and negative impacts, with much remaining

uncertainty as to how various provisions will ultimately affect our customers, clients, licensees, resellers, end users, and our business.

As to prospective legislation and regulation concerning collection, transmission, storage and use of personal data, we cannot determine

what effect additional state or federal governmental legislation, regulations, or administrative orders would have on our business in

New legislation or regulation may require the reformulation of our business to meet new standards, require us to cease operations,

impose stricter qualification and/or registration standards, impose additional record keeping, or require expanded consumer protection

measures (such as heightened notification procedures and data subject access rights).

Our failure to

comply with laws and regulations applicable to our business could subject us to fines and penalties and could also cause us to lose potential

customers, clients, licensees, resellers and/or for licensees and resellers to lose potential customers in the public sector or negatively

impact our ability to contract with the public sector.

Our business is subject

to regulation by various federal, state, regional, local and foreign governmental agencies, including agencies responsible for monitoring

and enforcing employment and labor laws, workplace safety, product safety, product labeling, environmental laws, consumer protection

laws, anti-bribery laws, data privacy laws, import and export controls, federal securities laws and tax laws and regulations.

jurisdictions, these regulatory requirements may be more stringent than in the United States.

Noncompliance with applicable regulations

or requirements could subject us to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages and civil

and criminal penalties or injunctions.

If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal

litigation, our business, operating results and financial condition could be adversely affected.

In addition, responding to any legal

action will likely result in a significant diversion of our management’s attention and resources and an increase in professional

fees and expenses.

Enforcement actions and sanctions could harm our business, operating results and financial condition.

Additionally, we may

be subject to other laws and regulations throughout the world governing data handling, protection and privacy.

For example, in June of

2018, California passed the California Consumer Privacy Act, or the “CCPA,” which provides new data privacy rights for consumers

and new operational requirements for companies, became effective in 2021, and in March 2022, Virginia passed a consumer data protection

law, the “VCDPA,” which includes similar rights as set forth in the CCPA.

Fines for noncompliance may be up to $7,500 per

Additionally, many other states have passed differing privacy and data protection laws in recent years.

Significantly, several

bills are being worked on in the Senate and the House dealing with these issues, and while it is uncertain that any of them will reach

the floor of either chamber, if they do so they will likely impose substantial additional burdens on companies.

The costs of compliance

with, and other burdens imposed by, the CCPA, the VCDPA and other state or foreign laws, may limit the use and adoption of our products

and services and would have an adverse impact on our business.

These laws and regulations impose added costs on our business, and failure

to comply with these or other applicable regulations and requirements, including non-compliance in the past, could lead to claims for

damages from our channel partners, penalties, termination of contracts, loss of exclusive rights in our intellectual property and temporary

suspension or permanent debarment from government contracting.

Any such damages, penalties, disruptions, or limitations in our ability

to do business with the public sector could have an adverse effect on our business and operating results.

restrictions on the sale of our products and services in non-U.S.

markets could negatively affect our business, financial condition,

and financial results.

of software products and services using cybersecurity technology such as ours are generally restricted by the U.S.

some countries impose restrictions on the use of cybersecurity products and services such as ours.

The cost of compliance with U.S.

other export laws, or our failure to obtain governmental approvals to offer our products and services in non-U.S.

markets, could affect

our ability to sell our products and services and could impair our international expansion.

We face a variety of other legal and compliance

If we or our distributors fail to comply with applicable law and regulations, we may become subject to penalties, fines or restrictions

that could materially adversely affect our business, financial condition and financial results.

Risks Related

to Our Financial Position and Need for Capital

We have incurred

net losses and may never achieve profitability.

Our likelihood of success

must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with

development of a new business enterprise.

Our accumulated deficit as of September 30, 2024, was $19.8 million.

We cannot assure our

current stockholders or future investors that that any of our new products and services currently under development will be successfully

commercialized, and the extent of our future losses and the timing of any possible profitability, if ever achieved, are highly uncertain.

If we are unable to achieve profitability, we may, at any time, be unable to continue our operations.

Our ability to

continue as a going concern may depend upon our ability to raise additional capital and such capital may not be available on acceptable

terms, or at all.

We currently believe

that our available cash will allow us to fund our operations through at least December 2025.

Nevertheless, we may need to raise additional

capital to fund operating losses, support future expansion, develop new or enhanced products and services, hire employees, respond to

competitive pressures, acquire technologies, or respond to unanticipated events or requirements before then.

Our management’s plans

include attempting to improve our profitability and our ability to generate sufficient cash flow from operations to meet our operating

needs on a timely basis, obtaining additional working capital funds through equity and debt financing arrangements, and restructuring

on-going operations to eliminate inefficiencies and reduce our expenses.

However, we are not assured that these plans and arrangements

will be sufficient to fund our ongoing capital expenditures, working capital, and other requirements.

The outcome of these actions cannot

be predicted at this time.

There can be no assurance that any additional financings will be available to us on satisfactory terms and

conditions, if at all.

If adequate funds are not available on acceptable terms, we may be unable to develop or enhance our products and

services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, any of which could

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

If we raise additional funds through the issuance

of equity securities, or convertible debt, the percentage ownership of our stockholders will be reduced, and holders may experience dilution

in net book value per share.

The amount of capital

we may need depends on many factors, including the progress, timing, scope and market acceptance of our product development programs;

the time and cost required to obtain any necessary regulatory approvals;

the possibility of litigation;

our ability to enter into and

maintain collaborative, licensing and other commercial relationships;

and our ability to secure commitment of time and resources from

third-parties to the development and commercialization of our products.

The capital markets

have been unpredictable for unprofitable companies such as ours.

The amount of capital that we may be able to raise depends on variables

that are beyond our control.

As a result, we may not be able to secure financing on terms acceptable to us, or at all.

Even if we are

able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs.

If adequate funds are not

available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued viability

will be materially adversely affected.

If we can raise

additional funding, we may be required to do so on terms that are dilutive to our stockholders.

Our future issuances

of new equity will dilute the ownership percentage of our existing stockholders.

The extent of such dilution will depend on the number

of shares issued.

Neither the amount of funds that may be received in such equity financing, nor the price per share of our equity securities

issued are known at this time.

We will continue

to incur increased costs as a result of being a reporting company and, given our limited capital resources, such additional costs may

have an adverse impact on our profitability.

We are a reporting company

to the Securities and Exchange Commission, or SEC.

The rules and regulations under the Exchange Act require reporting companies to provide

periodic reports with interactive data files, which require that we engage legal, accounting and auditing professionals, and XBRL (eXtensible

Business Reporting Language) and EDGAR (Electronic Data Gathering, Analysis, and Retrieval) service providers.

The engagement of such

services can be costly, and we may continue to incur additional financial losses, which may adversely affect our ability to continue

as a going concern.

In addition, the Sarbanes Oxley Act of 2002, as well as a variety of new related and unrelated rules implemented

by the SEC, have required changes in corporate governance practices and generally increased the disclosure requirements of public companies.

For example, as a result of being a reporting company, we are required to file periodic and current reports and other information with

the SEC, and we are adopting and revising policies regarding disclosure controls and procedures, including internal controls over financial

The additional costs

we continue to incur in connection with being a reporting company (expected to be approximately seven to eight hundred thousand dollars

per year) will continue to further stretch our limited capital resources.

Due to our limited resources, we have to allocate resources

away from other productive uses in order to continue to comply with our obligations as an SEC reporting company.

Further, there is no

guarantee that we will have sufficient resources to continue to meet our reporting and filing obligations with the SEC as they come due.

We may apply working

capital and future funding to uses that ultimately do not improve our operating results or increase the market price of our securities.

In general, we have

complete discretion over the use of our working capital and any new investment capital we may obtain in the future that has no dedicated

use of proceeds.

Because of the number and variety of factors that could determine our use of funds, our ultimate expenditure of funds

(and their uses) may vary substantially from our current intended operating plan for such funds.

We intend to use existing

working capital and future funding to support the development of our products and services, the expansion of our marketing, or the support

of operations to educate the end users of the software we sell.

We will also use capital for market and network expansion, acquisitions,

and general working capital purposes.

However, we do not have more specific plans for the use and expenditure of our capital.

Our management

has broad discretion to use any or all of our available capital reserves.

Our capital could be applied in ways that do not improve our

operating results or otherwise increase the market value of a stockholder’s shares.

Related to Our Common Stock

The market price for our common stock has been volatile, and you may not be able to sell our stock at a favorable price, or at all.

market price for our common stock has been volatile, and you may not be able to sell our stock at a favorable price, or at all.

should consider an investment in our common stock to be risky, and you should invest in our common stock and securities convertible into

4 unchanged sentences

in price and level of trading volumes of our shares of common stock;

ability to obtain financings to conduct and complete research and development activities and other business activities;

timing and success of introductions of new products and services by us or our competitors or any other change in the competitive

dynamics of our industry, including consolidation among competitors;

ability to attract new customers, clients, licensees, and resellers;

ability to obtain financings to conduct and complete research and development activities

and other business activities;

timing and success of introductions of new products and services by us or our competitors

or any other change in the competitive dynamics of our industry, including consolidation

among competitors;

ability to attract and retain new customers, clients, licensees, and resellers;

in the development status of our products and services;

in our capital structure, future issuances of securities, and sales of large blocks of common stock by our stockholders;

in our capital structure, future issuances of securities, and sales of large blocks of common

stock by our stockholders;

cash position;

2 unchanged sentences

inability to enter into new markets or develop new products and services;

● Reputational

● Announcements

of acquisitions, partnerships, collaborations, joint ventures, new products and services, capital commitments, or other events by

us or our competitors;

of acquisitions, partnerships, collaborations, joint ventures, new products and services,

capital commitments, or other events by us or our competitors;

in industry conditions or perceptions;

ability to attract analysts to initiate research coverage and once obtained, having such analysts issue research reports, recommendations

and any changes in recommendations, price targets, and withdrawals of coverage;

ability to attract analysts to initiate research coverage and once obtained, having such

analysts issue research reports, recommendations and any changes in recommendations, price

targets, and withdrawals of coverage;

and additions of key personnel;

34 unchanged sentences

As a result, the effect of the anti-dilution right may cause significant dilution to our other stockholders.

All the 12,011,114 warrants

will expire on April 16, 2026.

warrants to purchase 8,332,439 shares of our common stock issuable upon exercise of warrants issued to the placement agent in the private

5 unchanged sentences

of September 30, 2025, no anti-dilution triggers had occurred.

Certain warrants issued

in 2021 inhibit our access to equity capital, if we should need it, which may limit our ability to grow and maintain our competitiveness.

The warrants we issued in

the 2021 private placement described in Part II, Item 8, Financial Statements, Note 11 , contain various provisions including,

but not limited to, various price reset and anti-dilution provisions when new equity is issued in certain transactions including stock

issued for cash at a price less than the $0.36 exercise price stated in the 2021 private placement warrants.

These provisions inhibit

our access to cash for the issuance of common stock which may limit our ability to compete in a very dynamic market through new investments

in research and development or selling and marketing.

We cannot predict the financial impact of the issuance of the warrants on our financial

statements, specifically our balance sheet.

We also cannot predict the financial impact of the various provisions included in the warrant

The purchase agreement

related to our 2021 private placement includes covenants that we must comply with, or we may suffer potential monetary and other penalties.

The securities purchase agreement we entered into in

connection with the recent private placement contains certain customary covenants.

If we do not comply with these covenants, we will be

in breach of our obligations under the securities purchase agreement, which may lead to exercise by the investors of the remedies available

to them under the securities purchase agreement, which may cause a material impact upon our financial condition.

warrants issued in 2021 inhibit our access to equity capital, if we should need it, which may limit our ability to grow and maintain

our competitiveness.

warrants we issued in the 2021 private placement described in Part II, Item 8, Financial Statements, Note 9 , contain various provisions including, but not limited to, various price reset and anti-dilution provisions

when new equity is issued in certain transactions including stock issued for cash at a price less than the $0.36 exercise price stated

in the 2021 private placement warrants.

These provisions inhibit our access to cash for the issuance of common stock which may limit

our ability to compete in a very dynamic market through new investments in research and development or selling and marketing.

predict the financial impact of the issuance of the warrants on our financial statements, specifically our balance sheet.

We also cannot

predict the financial impact of the various provisions included in the warrant agreements.

purchase agreement related to our 2021 private placement includes covenants that we must comply with, or we may suffer potential monetary

and other penalties.

securities purchase agreement we entered into in connection with the recent private placement contains certain customary covenants.

we do not comply with these covenants, we will be in breach of our obligations under the securities purchase agreement, which may lead

to exercise by the investors of the remedies available to them under the securities purchase agreement, which may cause a material impact

upon our financial condition.

common shares are thinly traded, and in the future may continue to be thinly traded, and you may be unable to sell your shares at or

21 unchanged sentences

to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

significant number of our shares have been registered for resale, and their sale or potential sale may depress the market price of our

common stock.

of September 30, 2024, we had 225,975,331 shares of common stock outstanding and total warrants issued for 43,157,956 shares of

common stock.

If all 43,157,956 warrants are exercised in full for cash, then they would represent 16.0% of the total shares

outstanding after including the exercised warrants.

Sales of a significant number of shares of our common stock in the public

market, or the potential or expectation of such sales, could harm the market price of our common stock.

If a large volume of our

common stock was sold, it would increase the supply of our common stock, which could cause a decrease in its

sales and issuances of our securities could result in additional dilution of the percentage ownership of our stockholders and could cause

46 unchanged sentences

to sell them or may have to hold them for a substantial period of time until the liquidity of the market for our common stock improves.

allows us to issue “blank check” preferred stock and establish its terms, conditions, rights, powers and preferences without

stockholder approval.

Pursuant to our certificate

of incorporation, our Board of Directors has the authority to issue up to 10 million shares of “ blank check ” preferred

stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares without

any additional vote or action by our stockholders.

Because our Board of Directors is able to designate the terms, conditions, rights,

powers, and preferences of the preferred stock without the vote of a majority of our stockholders, our stockholders will have no control

over what designations and preferences our preferred stock will have.

The issuance of shares of preferred stock, or the rights associated

therewith, could cause substantial dilution to our existing stockholders.

Additionally, the dilutive effect of any preferred stock that

we may issue may be exacerbated given the fact that such preferred stock may have voting rights, liquidation and/or other rights or preferences

that could provide the preferred stockholders with substantial voting control over us and/or give those holders the power to prevent

or cause a change in our control.

As a result, the issuance of shares of preferred stock may cause the value of our common stock to decrease.

We have never

paid or declared any dividends on our common stock.

We do not anticipate

paying, in the near future, dividends or distributions on our common stock.

Any future dividends on our common stock will be declared

at the discretion of our Board of Directors and will depend on, among other things, our earnings, our financial requirements for future

operations and growth, and other facts as we may then deem appropriate.

Since we do not anticipate paying cash dividends on our common

stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.

If securities

or industry analysts do not initiate research coverage on us and, if initiated, fail to publish research or reports, or publish unfavorable

research or reports, about our business, our stock price and trading volume may decline.

The trading market for

our common stock will rely in part on the research and reports that industry or financial analysts publish about us, our business, our

markets, and our competitors.

We do not currently have any securities or industry analysts that have initiated research coverage on our

If and when any securities or industry analysts initiate research coverage on our business, we will not control these analysts.

If securities analysts do not cover our common stock, the lack of research or other coverage may adversely affect the market price and

decrease the trading volume of our common stock.

Furthermore, if one or more of the analysts who do cover us downgrade our stock, or

if those analysts issue other unfavorable commentary about us or our business, our stock price would likely decline.

If one or more of

these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility in the market, and interest

in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair our ability to

expand our business and attract new clients and customers to purchase our cybersecurity products and services.

The sale of shares

of our common stock by our directors and officers may adversely affect the market price for our common stock.

Sales of significant

amounts of shares of common stock by our officers and directors, or the prospect of such sales, could adversely affect the market price

of our common stock.

Our management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise

attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over

our stock’s market price.

charter allows us to issue “blank check” preferred stock and establish its terms, conditions, rights, powers and preferences

without stockholder approval.

to our certificate of incorporation, our Board of Directors has the authority to issue up to 10 million shares of “ blank check ”

preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares

without any additional vote or action by our stockholders.

Because our Board of Directors can designate the terms, conditions,

rights, powers, and preferences of the preferred stock without the vote of a majority of our stockholders, our stockholders will have

no control over what designations and preferences our preferred stock will have.

The issuance of shares of preferred stock, or the rights

associated therewith, could cause substantial dilution to our existing stockholders.

Additionally, the dilutive effect of any preferred

stock that we may issue may be exacerbated given the fact that such preferred stock may have voting rights, liquidation and/or other

rights or preferences that could provide the preferred stockholders with substantial voting control over us and/or give those holders

the power to prevent or cause a change in our control.

As a result, the issuance of shares of preferred stock may cause the value of

our common stock to decrease.

have never paid or declared any dividends on our common stock.

do not anticipate paying dividends or distributions on our common stock.

Any future dividends on our common stock

will be declared at the discretion of our Board of Directors and will depend on, among other things, our earnings, our financial requirements

for future operations and growth, and other facts as we may then deem appropriate.

Since we do not anticipate paying cash dividends on

our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.

securities or industry analysts do not initiate research coverage on us and, if initiated, fail to publish research or reports, or publish

unfavorable research or reports, about our business, our stock price and trading volume may decline.

trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us,

our business, our markets, and our competitors.

We do not currently have any securities or industry analysts that have initiated research

coverage on our business.

When any securities or industry analysts initiate research coverage on our business, we will not control

these analysts.

If securities analysts do not cover our common stock, the lack of research or other coverage may adversely affect the

market price and decrease the trading volume of our common stock.

Furthermore, if one or more of the analysts who do cover us downgrade

our stock, or if those analysts issue other unfavorable commentary about us or our business, our stock price would likely decline.

one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility in the market,

and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair

our ability to expand our business and attract new clients and customers to purchase our cybersecurity products and services.

sale of shares of our common stock by our directors and officers may adversely affect the market price for our common stock.

of significant amounts of shares of common stock by our officers and directors, or the prospect of such sales, could adversely affect

the market price of our common stock.

Our management’s stock ownership may discourage a potential acquirer from making a tender

offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing

a premium over our stock’s market price.

ability of our executive officers and directors to control our business may limit or eliminate other stockholders’ ability to influence

corporate affairs.

of September 30, 2025, our Executive Leadership Team (“ELT”) and Directors owned approximately 46.4% of the Company’s total issued and outstanding

Because of this voting control through share ownership by the ELT and Directors, these individuals, acting as

a group, have significant influence over corporate actions requiring a shareholder vote, including the selection of our Directors, who

in turn approve all executive officers, authorizing change-in-control transactions, amendments to our Articles of Incorporation, and

other significant corporate matters.

The interests of our ELT and Directors may differ from the interests of other stockholders

with respect to the issuance of shares, business transactions with or sales to other companies, selection of future officers and directors

and other business decisions.

The minority stockholders will have no way of overriding the decisions made by our ELT and

Directors acting as a group.

Related to Our Industry

uncertainty may pressure our customers to reduce their IT and cybersecurity spending.

economic conditions, including inflation, recession, pandemic, or other changes in economic conditions, may cause lower IT spending and

adversely affect our results of operations.

If demand for computing power, PCs, servers, and other computing devices declines, or consumer

or business spending for those products declines, our results of operations could be adversely affected.

Our product distribution system

relies on our partner and network.

The impact of economic conditions on our partners, such as the bankruptcy of one of our partners could

adversely affect our financial condition and results of operations.

economic conditions also may impair the ability of our customers to pay for products and services they have purchased.

As a result, allowances

for doubtful accounts and write-offs of accounts receivable may increase.

global financial conditions have been characterized by increased volatility, which could negatively impact our business, prospects, liquidity

and financial condition.

financial conditions continue to be marked by significant volatility, rising interest rates, inflationary pressures, and tightening credit

These factors may negatively affect customer budgets, delay technology investments, and reduce demand for our cybersecurity

products and services.

Market instability could also restrict our access to capital, increase borrowing costs, and limit our liquidity

or operational flexibility.

In addition, periods of financial stress often coincide with heightened cybersecurity risks, as organizations

with constrained resources may defer security upgrades or reduce cyber defense spending.

Sustained volatility or an extended economic

downturn could materially and adversely impact our business operations, financial performance, and long-term growth prospects.

and geo-political events increase the risk that we are unable to achieve and maintain profitable operations.

disruption or failure of our systems, operations, or supply chain because of a major earthquake, weather event, cyberattack, terrorist

attack, pandemic, or other catastrophic event could cause delays in completing sales, providing services, or performing other critical

A catastrophic event that results in the destruction or disruption of any of our critical business or systems, or the infrastructure

or systems they rely on, such as power grids, could harm our ability to conduct normal business operations or adversely affect our results

of operations.

Providing our customers with more services and solutions in the cloud puts a premium on the resilience of our systems

and strength of our business continuity management plans and magnifies the potential negative consequences of prolonged service outages.

political change, terrorist activity, and armed conflict, such as the ongoing conflict in Ukraine, pose economic and other risks, which

may negatively impact our ability to sell to and collect from customers, increase our operating costs, or otherwise disrupt our operations

in markets both directly and indirectly impacted by such events.

These conditions also may add uncertainty to the timing and budget for

technology investment decisions by our customers and may cause supply chain disruptions for hardware manufacturers.

Geopolitical change

may result in changing regulatory systems and requirements and market interventions that could impact our operating strategies, access

to national, regional, and global markets, hiring, and profitability.

Geopolitical instability may lead to sanctions and impact our ability

to do business in some markets or with some public-sector customers.

Any of these changes could adversely affect our results of operations.

Changes in geopolitical conditions also increase the security risks described elsewhere in these risk factors.

occurrence of regional epidemics or a global pandemic, such as COVID-19, could adversely affect our business, operations, financial condition,

and results of operations.

The extent to which global pandemics impact our business going forward will depend on factors such as the

duration and scope of the pandemic;

governmental, business, and individuals’ actions in response to the pandemic;

and the impact

on economic activity, including the possibility of recession or financial market instability.

Measures to contain a global pandemic may

intensify other risks described in these Risk Factors.

Related to Our Financial Position and Need for Capital

incurred net losses and may never achieve profitability.

likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered

in connection with development of a new business enterprise.

Our accumulated deficit as of September 30, 2025, was $20.7 million.

cannot assure our current stockholders or future investors that that any of our new products and services currently under development

will be successfully commercialized, and the extent of our future losses and the timing of any possible profitability, if ever achieved,

are highly uncertain.

If we are unable to achieve profitability, we may, at any time, be unable to continue our operations.

ability to continue as a going concern may depend upon our ability to raise additional capital and such capital may not be available

on acceptable terms, or at all.

currently believe that our available cash will allow us to fund our operations through at least December 2026.

Nevertheless, we may need

to raise additional capital to fund operating losses, support future expansion, develop new or enhanced products and services, hire employees,

respond to competitive pressures, acquire technologies, or respond to unanticipated events or requirements before then.

Our management’s

plans include attempting to improve our profitability and our ability to generate sufficient cash flow from operations to meet our operating

needs on a timely basis, obtaining additional working capital funds through equity and debt financing arrangements, and restructuring

on-going operations to eliminate inefficiencies and reduce our expenses.

However, we are not assured that these plans and arrangements

will be sufficient to fund our ongoing capital expenditures, working capital, and other requirements.

The outcome of these actions cannot

be predicted at this time.

There can be no assurance that any additional financings will be available to us on satisfactory terms and

conditions, if at all.

If adequate funds are not available on acceptable terms, we may be unable to develop or enhance our products and

services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, any of which could

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

If we raise additional funds through the issuance

of equity securities, or convertible debt, the percentage ownership of our stockholders will be reduced, and holders may experience dilution

in net book value per share.

amount of capital we may need depends on many factors, including the progress, timing, scope and market acceptance of our product development

the time and cost required to obtain any necessary regulatory approvals;

the possibility of litigation;

our ability to enter

into and maintain collaborative, licensing and other commercial relationships;

and our ability to secure commitment of time and resources

from third parties to the development and commercialization of our products.

capital markets have been unpredictable for unprofitable companies such as ours.

The amount of capital that we may be able to raise depends

on variables that are beyond our control.

As a result, we may not be able to secure financing on terms acceptable to us, or at all.

if we are able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs.

If adequate funds

are not available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued

viability will be materially adversely affected.

we can raise additional funding, we may be required to do so on terms that are dilutive to our stockholders.

future issuances of new equity will dilute the ownership percentage of our existing stockholders.

The extent of such dilution will depend

on the number of shares issued.

Neither the amount of funds that may be received in such equity financing, nor the price per share of

our equity securities issued are known at this time.

will continue to incur increased costs as a result of being a reporting company and, given our limited capital resources, such additional

costs may have an adverse impact on our profitability.

are a Securities Exchange Act of 1934 (the “Exchange Act”) reporting company, meaning that we report certain required

material financial information with the Securities and Exchange Commission (“SEC”).

The rules and regulations under the

Exchange Act require reporting companies to provide periodic reports with interactive data files, which require that we engage

legal, accounting and auditing professionals, and XBRL (eXtensible Business Reporting Language) and EDGAR (Electronic Data

Gathering, Analysis, and Retrieval) service providers.

The engagement of such services can be costly, and we may continue to incur

additional financial losses, which may adversely affect our ability to continue as a going concern.

In addition, the Sarbanes Oxley

Act of 2002, as well as a variety of new related and unrelated rules implemented by the SEC, have required changes in corporate

governance practices and generally increased the disclosure requirements of public companies.

For example, as a result of being a

reporting company, we are required to file periodic and current reports and other information with the SEC, and we are adopting and

revising policies regarding disclosure controls and procedures, including internal controls over financial reporting.

additional costs we continue to incur in connection with being a reporting company (expected to be approximately seven to eight hundred

thousand dollars per year) will continue to further stretch our limited capital resources.

Due to our limited resources, we have to allocate

resources away from other productive uses in order to continue to comply with our obligations as an SEC reporting company.

Further, there

is no guarantee that we will have sufficient resources to continue to meet our reporting and filing obligations with the SEC as they

may apply working capital and future funding to uses that ultimately do not improve our operating results or increase the market price

of our securities.

general, we have complete discretion over the use of our working capital and any new investment capital we may obtain in the future that

has no dedicated use of proceeds.

Because of the number and variety of factors that could determine our use of funds, our ultimate expenditure

of funds (and their uses) may vary substantially from our current intended operating plan for such funds.

intend to use existing working capital and future funding to support the development of our products and services, the expansion of our

marketing, or the support of operations to educate the end users of the software we sell.

We will also use capital for market and network

expansion, acquisitions, and general working capital purposes.

However, we do not have more specific plans for the use and expenditure

of our capital.

Our management has broad discretion to use any or all of our available capital reserves.

Our capital could be applied

in ways that do not improve our operating results or otherwise increase the market value of a stockholder’s shares.

Related to our Business and Results of Operations

depend significantly upon the continued involvement of our present management and on our ability to attract and retain talented employees.

future success depends, in part, on our ability to continue to attract and retain highly skilled personnel.

The loss of the services

of any of our key personnel, the inability to attract or retain qualified personnel, any failure to have in place and execute an effective

succession plan for key executives or delays in hiring required personnel, particularly in engineering, sales and marketing, may seriously

harm our business, financial condition and results of operations.

From time to time, we experience turnover in our management-level personnel.

None of our key employees has an employment agreement for a specific term, and any of our employees may terminate their employment at

Our ability to continue to attract and retain highly skilled personnel will be critical to our future success.

for highly skilled personnel is frequently intense, especially for qualified sales, support and engineering employees in cybersecurity

software and services and especially in the locations where we have a substantial presence and need for highly skilled personnel, such

as software engineers and advanced cybersecurity engineers.

We may not be successful in attracting, assimilating or retaining qualified

personnel to fulfill our current or future needs.

In addition, to the extent we hire personnel from competitors, we may be subject to

allegations that they have been improperly solicited or divulged proprietary or other confidential information.

Changes in immigration

laws, including changes to the rules regarding H1-B visas, may also harm our ability to attract personnel from other countries.

Our inability

to hire properly qualified and effective sales, support and engineering employees could harm our growth and our ability to effectively

support growth.

rely on third-party software for certain essential financial and operational services.

Failure, outages or disruption in services,

systems and infrastructure supplied by third parties could negatively affect our business, financial condition and financial

currently incorporate, and will in the future incorporate, technology that we license from third parties, including software, into our

We cannot be certain that our licensors will continue to be available to us or in the market in general.

Some of our agreements

with our licensors may be terminated by them for convenience or otherwise provide for a limited term.

If we are unable to continue to

license technology or if we are unable to continue our license agreements with our third-party licensors or enter into new licenses on

commercially reasonable terms, our ability to develop and sell solutions and services containing or dependent on that technology would

be limited, and our business could be harmed.

Additionally, if we are unable to license technology from third parties, we may be forced

to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner or at all, and may require

us to use alternative technology of lower quality or performance standards.

This could limit or delay our ability to offer new or competitive

solutions and increase our costs.

As a result, our margins, market share, and results of operations could be significantly harmed.

previously identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting.

not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial

reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations,

each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce

reliable financial statements.

Our disclosure controls and procedures and internal controls over financial reporting are currently ineffective

and have in the past been subject to material weaknesses.

A material weakness is a deficiency, or a combination of deficiencies, in internal

control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual

or interim financial statements will not be prevented or detected on a timely basis.

A control deficiency exists when the design or operation

of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect

misstatements on a timely basis.

cannot assure you that additional material weaknesses will not arise in the future.

The development of new material weaknesses in our

internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to

meet our reporting and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading

price of our common stock, and/or result in litigation against us or our management.

our estimates, assumptions, or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards

or interpretations change, our results of operations could be adversely affected.

we do not effectively manage our growth, our business resources and systems may become strained, and we may be unable to increase revenue

we do not effectively manage our growth, our operations, systems, and resources may become overextended, leading to inefficiencies and

diminished performance.

Rapid expansion can strain our infrastructure, challenge internal controls, and limit management’s ability

to maintain operational discipline and quality standards.

Inadequate integration of new customers, employees, or technologies could disrupt

service and software delivery.

Additionally, failing to scale our systems or workforce in line with growth may prevent us from meeting

demand, containing costs, or achieving strategic objectives.

Such challenges could materially and adversely affect our revenue growth,

operating results, and long-term competitiveness.

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

market awareness of our capabilities and products and increased lead generation are essential to our continued growth and our success

in all our markets, particularly the market for sales to large businesses, service providers and government organizations.

have increased our investments in sales and marketing, it is not clear that these investments will continue to result in increased revenue.

If our investments in additional sales personnel or our marketing programs are not successful in continuing to create market awareness

of our company and products or increasing lead generation, in growing billings for our broad product suite or if we experience turnover

and disruption in our sales and marketing teams, we may not be able to achieve sustained growth, and our business, financial condition

and results of operations may be adversely affected.

we do not effectively expand and train our direct sales force, we may be unable to add new customers or retain and increase sales to

our existing customers, and our business will be adversely affected.

depend on our direct sales force to obtain new customers or retain and increase sales

with existing customers.

Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting,

training and retaining enough sales personnel, particularly in international markets.

There is significant

competition for sales personnel with the skills and technical knowledge that we require.

New hires require significant training and

may take significant time before they achieve full productivity, and this delay is accentuated by our long sales cycles.

hires and planned hires may not become productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers

of qualified individuals in the markets where we do business or plan to do business.

In addition, a large percentage of our sales

force is new to our company and selling our solutions, and therefore this team may be less effective than our more seasoned sales

Furthermore, hiring sales personnel in new countries, or expanding our existing presence, requires upfront and ongoing

expenditures that we may not recover if the sales personnel fail to achieve full productivity.

We cannot predict whether, or to what

extent, our sales will increase as we expand our sales force or how long it will take for sales personnel to become productive.

we are unable to hire and train enough effective sales personnel, or the sales personnel we hire are not successful in obtaining new

customers or increasing sales to our existing customer base, our business and results of operations will be adversely

future revenue and operating results will depend significantly on our ability to retain clients and customers and the ability to add

new clients and customers.

Any decline in our retention rates or failure to add new clients and customers will harm our business prospects

and operating results.

future revenue and operating results depend significantly on our ability to retain existing clients and attract new ones.

pressures, evolving customer expectations, pricing dynamics, and changes in technology preferences could negatively affect our retention

rates and sales performance.

If we fail to maintain strong client relationships, effectively demonstrate value, or expand our customer

base, our growth opportunities and recurring revenue streams may decline.

Any sustained decrease in client retention or delays in acquiring

new customers could adversely affect our business prospects, financial performance, and overall market position.

growth depends in part on the success of our strategic relationships with third parties.

growth depends in part on the strength and success of our strategic relationships with third parties, including technology providers,

resellers, and service partners.

If these partners fail to meet performance expectations, modify their business objectives, or terminate

agreements, our ability to deliver products and expand into new markets could be hindered.

Dependence on third parties also limits our

control over key aspects of service delivery, pricing, and customer experience.

Any disruptions, misalignments, or loss of these relationships

could negatively affect our revenue growth, market reach, and competitive position.

we experience a decline in billing, delays and/or defaults in payments, we could be unable to recover all expenditures, and our operating

margins may decline.

may experience slowing growth or a decrease in billings, revenue, operating margin and free cash flow for a number of reasons, including

a slowdown in pipeline growth or for demand for our products or services generally, a shift in demand from products to services, decrease

in services revenue growth, increased competition, execution challenges including sales execution challenges and lack of optimal sales

productivity, worldwide or regional economic challenges based on inflation or possible stagflation, a regional recession or a recession

in the global economy, changing interest rates, the war in Ukraine, a decrease in the growth of our overall market or softness in demand

in certain geographies or industry verticals, such as the service provider industry, changes in our strategic opportunities, execution

risks, lower sales productivity and our failure for any reason to continue to capitalize on sales and growth opportunities due to other

risks identified in the risk factors described in this periodic report.

Our expenses as a percentage of total revenue may be higher than

expected if our revenue is lower than expected.

If our investments in sales and marketing and other functional areas do not result in

expected billings and revenue growth, we may experience margin declines.

In addition, we may not be able to sustain our historical profitability

levels in future periods if we fail to increase billings, revenue or deferred revenue, and do not appropriately manage our cost structure,

free cash flow, or encounter unanticipated liabilities.

As a result, any failure by us to maintain profitability and margins and continue

our billings, revenue and free cash flow growth could cause the price of our common stock to materially decline.

face intense competition, especially from larger, well-established companies, and we may lack sufficient financial or other resources

to maintain or improve our competitive position.

We may lose market share to our competitors, which could adversely affect our business,

financial condition, and results of operations.

market for network security products is intensely competitive and dynamic, and we expect competition to continue to intensify.

many competitors across the different cybersecurity markets.

Our competitors include companies such as Check Point, Cisco, CrowdStrike,

F5 Networks, HPE, Huawei, Illumio, Juniper, Microsoft, Netskope, Palo Alto Networks, SonicWALL, Sophos, and zScaler.

Some of our existing

and potential competitors enjoy competitive advantages such as:

greater name recognition and/or longer operating histories;

and marketing budgets and resources;

broader distribution and established relationships with distribution partners and end-customers;

access to larger customer bases;

greater customer support resources;

greater expertise in certain single point solutions;

greater resources

to make acquisitions;

stronger U.S.

government relationships;

lower labor and development costs;

and substantially greater financial,

technical and other resources.

addition, certain of our larger competitors have broader product offerings, and leverage their relationships based on other products

or incorporate functionality into existing products in a manner that discourages customers from purchasing our products.

competitors often have broader product lines and market focus and are in a better position to withstand any significant reduction in

capital spending by end-customers in these markets.

Therefore, these competitors will not be as susceptible to downturns in a particular

Also, many of our smaller competitors that specialize in providing protection from a single type of security threat are often

able to deliver these specialized security products to the market more quickly than we can.

Conditions in our markets could change rapidly and significantly because of technological advancements or continuing market consolidation.

Our competitors and potential competitors may also be able to develop products or services, and leverage new business models, that are

equal or superior to ours, achieve greater market acceptance of their products and services, disrupt our markets, and increase sales

by utilizing different distribution channels than we do.

For example, certain of our competitors are focusing on delivering security

services from the cloud which include cloud-based security providers, such as CrowdStrike and Zscaler.

In addition, current or potential

competitors may be acquired by third parties with greater available resources, and new competitors may arise pursuant to acquisitions

of network security companies or divisions.

As a result of such acquisitions, competition in our market may continue to increase and

our current or potential competitors might be able to adapt more quickly to new technologies and customer needs, devote greater resources

to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of acquisition

or other opportunities more readily, or develop and expand their product and service offerings more quickly than we do.

our competitors may bundle products and services competitive with ours with other products and services.

Customers may accept these bundled

products and services rather than separately purchasing our products and services.

As our customers refresh the security products bought

in prior years, they may seek to consolidate vendors, which may result in current customers choosing to purchase products from our competitors

on an ongoing basis.

Due to budget constraints or economic downturns, organizations may be more willing to incrementally add solutions

to their existing network security infrastructure from competitors than to replace it with our solutions.

These competitive pressures

in our market or our failure to compete effectively may result in price reductions, fewer customer orders, reduced revenue and gross

margins and loss of market share.

have limited experience with some of our pricing models, particularly for our newer products and solutions as well as bundled sales of

our products and solutions, and we may not accurately predict the long-term rate of paying customer adoption or renewal, or the impact

these will have on our revenue or results of operations.

have limited experience with some of our pricing models, especially for newer or bundled offerings, and may not accurately predict their

long-term performance or customer adoption.

Changes in customer usage, market expectations, or competitive dynamics could lead to revenue

fluctuations or lower-than-expected renewals.

Inflexible billing systems, evolving consumption patterns, or misaligned pricing structures

may also impact our ability to forecast growth or maintain profitability.

If we fail to optimize or correctly anticipate the financial

impact of our pricing strategies, our revenue stability and operating results could be materially affected.

pricing pressure may reduce our gross profits and adversely affect our financial results.

cybersecurity market is highly competitive, and pricing pressure from both established and emerging competitors may reduce our gross

profit margins.

Many providers are lowering prices to gain market share or appeal to budget-conscious customers, which can erode profitability

across the industry.

As customers increasingly evaluate offerings based on cost and perceived value, we may be required to adjust our

pricing or offer additional incentives to remain competitive.

If we cannot effectively differentiate our solutions or maintain pricing

discipline while preserving quality, our revenue, gross margins, and overall financial results could be adversely affected.

largest revenue stream is providing consulting services.

If we are unable to attract and retain qualified personnel, our business could

consulting services represent a significant source of revenue, and our success depends on attracting, developing, and retaining highly

qualified professionals.

The cybersecurity industry faces a well-documented shortage of skilled talent, driving intense competition for

experienced consultants.

If we cannot hire or retain personnel with the necessary technical expertise or industry certifications, we

may be unable to deliver projects on time, maintain service quality, or meet client expectations.

High turnover, increased labor costs,

or resource constraints could also reduce our consulting capacity and profitability.

Any inability to sustain a skilled workforce may

adversely affect our growth and financial results.

we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological and market developments and successfully

manage product introductions and transitions to meet changing needs in the cybersecurity technology market, our competitive position,

financial results, and prospects will be harmed.

cybersecurity landscape evolves rapidly, driven by emerging threats, regulatory shifts, and advancements such as AI, zero trust

architectures, and post-quantum security.

Our success depends on accurately anticipating these developments, aligning our solutions

with market needs, and managing timely product launches and transitions.

Failure to predict or respond effectively to new

technologies or changing customer requirements could result in outdated offerings, reduced competitiveness, or missed growth

opportunities.

If we do not continually innovate and adapt to these market dynamics, our competitive position, financial

performance, and long-term prospects could be materially harmed.

in product development or failure to introduce new and improved offerings could harm our revenues and competitive position.

ability to maintain growth and competitiveness depends on timely product development and continual innovation.

The cybersecurity industry

evolves rapidly, and meeting customer expectations requires ongoing enhancements in performance, features, and reliability.

product development schedules, resource constraints, or technical challenges could limit our ability to introduce new or improved offerings

Additionally, if our new products or updates fail to gain market acceptance, or if we cannot keep pace with emerging technologies

and competitive advancements, our market share and profitability could decline.

Ineffective management of product transitions or innovation

pipelines may also lead to reduced customer confidence and missed growth opportunities.

Collectively, these factors could materially

and adversely affect our revenues, reputation, and overall financial performance.

defects, or vulnerabilities in our complex products and services could harm our reputation, reduce sales, and expose us to legal or financial

success depends on the market’s confidence in our ability to provide effective network security protection.

Despite our efforts

and processes to prevent breaches of our internal networks, systems and websites, whether in our premises, cloud providers

or colocations, we are still vulnerable to computer viruses, break-ins, phishing attacks, ransomware attacks, attempts to overload our

servers with denial-of-service, vulnerabilities in vendor hardware and software that we leverage, advanced persistent threats from sophisticated

actors and other cyber-attacks and similar disruptions from unauthorized access to our internal networks, systems or websites, whether

in our premises, cloud providers or colocations.

Our security measures may also be breached due to employee error, malfeasance

or otherwise, which breaches may be more difficult to detect than outsider threats, and the existing programs and trainings we have in

place to prevent such insider threats may not be effective or sufficient.

Third parties may also attempt to fraudulently induce our employees

to transfer funds or disclose information in order to gain access to our networks and confidential information.

Third parties may also

send our customers or others malware or malicious emails that falsely indicate that we are the source, potentially causing lost confidence

in us and reputational harm.

We cannot guarantee that the measures we have taken to protect our networks, systems and websites, whether

in our premises, cloud providers or colocations, will provide adequate security.

Moreover, because we provide network security

products, we may be a more attractive target for attacks by computer hackers and any security breaches and other security incidents involving

us may result in more harm to our reputation and brand than companies that do not sell network security solutions.

Hackers and malicious

parties may be able to develop and deploy viruses, worms, ransomware and other malicious software programs that attack our products and

customers, that impersonate our update servers in an effort to access customer networks and negatively impact customers, or otherwise

exploit any security vulnerabilities of our products, or attempt to fraudulently induce our employees, customers or others to disclose

passwords or other sensitive information or unwittingly provide access to our internal networks, systems or data.

Moreover, the threat

landscape continues to evolve as a result of new technologies, including AI, and malicious parties may use AI to help attack our solutions,

systems, and our customers.

we take numerous measures and implement multiple layers of security to protect our networks, we cannot guarantee that our security products,

processes and services will secure against all threats.

Further, we cannot be sure that third parties have not been, or will not in the

future be, successful in improperly accessing our systems and our customers’ systems, which could negatively impact us and our

An actual breach could significantly harm us and our customers, and an actual or perceived breach, or any other actual or

perceived data security incident, threat or vulnerability, that involves our supply chains, networks, systems or websites and/or our

customers’ supply chains, networks, systems or websites could adversely affect the market perception of our products and services

and investor confidence in our company.

Any breach of our networks, systems or websites could impair our ability to operate our business,

including our ability to provide Enclave and other security subscriptions and Enclave technical support services to our end-customers,

lead to interruptions or system slowdowns, cause loss of critical data or lead to the unauthorized disclosure or use of confidential,

proprietary or sensitive information.

We could also be subject to liability and litigation and reputational harm, and our channel partners

and end-customers may be harmed, lose confidence in us and decrease or cease using our products and services.

Any breach of our internal

networks, systems or websites could have an adverse effect on our business, operating results and stock price.

litigation, government investigations, and other proceedings may adversely affect our business and results of operations.

may become subject to a variety of claims and lawsuits.

These claims may arise from a wide variety of business practices and initiatives,

including new product releases, significant business transactions, warranty or product claims, employment practices, and regulation.

As we continue to expand our business and offerings, we may experience new and novel legal claims.

Adverse outcomes in some or all

these claims may result in significant monetary damages or injunctive relief that could adversely affect our ability to conduct our business.

Litigation and other claims are subject to inherent uncertainties and management’s view of these matters may change in the future.

An adverse impact to our financial condition and results of operations could occur for the period in which the effect of an unfavorable

outcome becomes probable and reasonably estimable.

success of our business depends in part on our ability to protect and enforce our intellectual property rights.

our intellectual property rights and combating unlicensed copying and use of our software, source code, and other intellectual property

is difficult.

Similarly, the absence of harmonized international patent laws makes it more difficult to ensure consistent respect for

patent rights.

Changes in the law may continue to weaken our ability to prevent the use of patented technology.

Our increasing engagement

with open source software will also cause us to license our intellectual property rights broadly in certain situations.

If we are unable

to protect our intellectual property, our results of operations could be adversely affected.

by others that we infringe their proprietary technology or other rights, or other lawsuits asserted against us, could result in significant

costs and substantially harm our business, financial condition, results of operations and prospects.

time to time, others may claim we infringe their intellectual property rights,

including current copyright infringement and other claims arising from AI training and output.

To resolve these claims, we may enter

into royalty-bearing data access or licensing agreements on terms that are less favorable than currently available, stop selling or

redesign affected products or services, or pay damages to satisfy indemnification commitments with our customers.

Adverse outcomes

could also include monetary damages or injunctive relief that may limit or prevent importing, marketing, and selling our products or

services that have infringing technologies.

We may be required to

pay significant amounts to settle claims related to the use of technology and intellectual property rights and to

procure intellectual property rights as part of our strategy to manage this risk, and may continue to do so, which could adversely

affect our results of operations.

are subject to changing laws and regulations, of which failure to comply could subject us to fines and penalties.

are subject to a wide range of laws, regulations, and legal requirements in the U.S.

and globally, including those that may apply to

our products and online services offerings, and those that impose requirements related to user privacy, telecommunications, data storage

and protection, digital accessibility, advertising, and online safety.

Laws in several jurisdictions, including EU Member State laws

under the European Electronic Communications Code, increasingly define certain of our services as regulated services.

This trend may

continue with our offerings becoming subject to additional data protection, security, digital safety, law enforcement surveillance, and

other obligations.

Regulators and private litigants may assert that our collection, use, and management of customer data and other information

is inconsistent with their laws and regulations, including laws that apply to the tracking of users via technology such as cookies.

addition, laws requiring us to retrieve and produce customer data in response to compulsory legal demands from law enforcement and governmental

authorities are expanding and the requests we are experiencing are increasing in volume and complexity.

existing, and evolving laws and regulations, or interpretations or applications of existing laws and regulations in a manner inconsistent

with our interpretations of such laws and regulations or our practices, may result in modification of our products and services, altered

business models and operations, increased costs, reputational damage, and civil or criminal liability.

to comply with laws and regulations applicable to government contracting, or to meet the unique requirements and constraints of government

customers, could harm our reputation and ability to secure or maintain public sector business.

Sales to U.S.

and foreign federal, state and local government organizations are subject to several risks.

Because of public sector

budgetary cycles and laws or regulations governing public procurements, such sales often require significant upfront time and expense

without any assurance of winning a sale.

Government demand, sales and payment for our products and services may be negatively impacted

by numerous factors and requirements unique to selling to government agencies, such as:

policies, laws and regulations have in the past,

and may in the future, require us to obtain and maintain certain security and other certifications in order to sell our products and

services into certain government organizations, and such certifications may be costly and time-consuming to obtain and maintain;

authorizations and requirements unique to government agencies, with funding or purchasing reductions or delays adversely affecting public

sector demand for our products;

and geopolitical matters, including tariff and trade disputes, government shutdowns, impact of the war

in Ukraine, tensions between China and Taiwan and trade protectionism and other political dynamics that may adversely affect our ability

to sell in certain locations or obtain the requisite permits and clearances required for certain purchases by government organizations

of our products and services.

In addition, if we do not have certain certifications, this may restrict our ability to sell to certain customers until we have obtained

certain certifications, and we may not obtain the certifications in a timely manner or at all.

For example, certain of our competitors

may have decided to become certified under the U.S.

Federal Risk and Authorization Management Program (“FedRAMP”), and until

the time that we also certify under FedRAMP, we risk losing deals to certified competitors for deals where FedRAMP certification is a

The rules and regulations applicable to sales to government organizations may also negatively impact sales to other organizations.

example, government organizations may have contractual or other legal rights to terminate contracts with our distributors and resellers

for convenience or due to a default, and any such termination may adversely impact our future results of operations.

If the distributor

receives a significant portion of its revenue from sales to government organizations, the financial health of the distributor could be

substantially harmed, which could negatively affect our future sales to such distributor.

Governments routinely investigate, review and

audit government vendors’ administrative and other processes, and any unfavorable investigation, audit, other review or unfavorable

determination related to any government clearance or certification could result in the government’s refusing to continue buying

our products and services, a limitation and reduction of government purchases of our products and services, a reduction of revenue or

fines, or civil or criminal liability if the investigation, audit or other review uncovers improper, illegal or otherwise concerning

Any such penalties could adversely impact our results of operations in a material way.

Further, any refusal to grant certain

certifications or clearances by one government agency, or any decision by one government agency that our products do not meet certain

standards, may reduce business opportunities and cause reputational harm and cause concern with other government agencies, governments

and businesses and cause them to not buy our products and services and/or lead to a decrease in demand for our products generally.

restrictions on the sale of our products and services in non-U.S.

markets could negatively affect our business, financial condition,

and financial results.

internationally and selling outside the United States may depend on our ability to comply with evolving export control laws and

government-imposed restrictions on the sale or use of cybersecurity products.

and foreign regulations increasingly limit the

export of technology, software, and services involving advanced computing, encryption, or cybersecurity tools to certain countries

New or expanded governmental restrictions—such as U.S.

export controls on cybersecurity and artificial

intelligence–related systems—could delay shipments, restrict market access, or require costly licensing and compliance

These laws are complex and may change unpredictably in response to geopolitical tensions.

If we are unable to obtain

necessary licenses or adapt to new compliance requirements, we could lose revenue, face penalties, or be excluded from key

international markets, which could materially and adversely affect our business, reputation, and growth prospects.

and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive

to security can take a variety of forms.

Threat actors, including individual and groups of hackers and sophisticated organizations, including

nation-states, state-sponsored organizations, or cybercriminal groups, continuously undertake attacks that pose threats to our customers

and our internal infrastructure.

These actors use a wide variety of methods, which include developing and deploying malicious software;

exploiting known and potential vulnerabilities or intentionally designed processes in our or third-party software, or other infrastructure

to attack our products and services or gain access to our networks;

using social engineering techniques to induce our employees, users,

partners, or customers to disclose sensitive information, such as passwords, or take other actions to gain access to our data or our

users’ or customers’ data;

or acting in a coordinated manner or conducting coordinated attacks.

account security or organizational security practices, including those of companies we have acquired or those of the third parties we

utilize, have resulted and may result in unauthorized access to our systems and data, including customer systems and data.

or third parties may intentionally compromise our or our users’ security or systems or reveal confidential information, and laws

in foreign jurisdictions may compel actions by such parties against our interests and could limit our recourse.

Malicious actors may

employ the supply chain to introduce malware through software updates or compromised supplier accounts or hardware.

are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully

defending against them.

Our current capabilities may not detect certain vulnerabilities or new attack methods, which may allow them to

persist in the environment over long periods of time.

It may be difficult to determine the best way to investigate, mitigate, contain,

and remediate the harm caused by a cyber incident.

Such efforts may not be successful, and we may make errors or fail to take necessary

It is possible that threat actors may gain undetected access to other networks and systems after establishing a foothold on

an internal system.

Breaches of our facilities, network, or data security can disrupt the security of our systems and business applications,

impair our ability to provide services to our customers and protect the privacy of their data, result in product development delays,

compromise confidential or technical business information, require us to allocate more resources to improve technologies or remediate

the impacts of attacks, or otherwise adversely affect our business.

In addition, actions taken to remediate an incident could result

in outages, data losses, and disruptions of our services.

incidents and attacks, individually or in the aggregate, could adversely affect our financial condition, results of operations, competitive

position, and reputation, or expose us to legal or regulatory risk.

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