UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _________ to _________

Commission file number: 001-41227

CISO GLOBAL, INC.

(Exact name of registrant as specified in its charter)

Delaware

83-4210278

(State or other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

6900 E. Camelback Road, Suite 900, Scottsdale, Arizona		85251
(Address of Principal Executive Offices)		(Zip Code)

(480) 389-3444

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.00001 par value		CISO		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 13, 2026, there were 45,313,337 shares of the registrant’s common stock outstanding.

CISO GLOBAL, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026 (unaudited)

TABLE OF CONTENTS

		Page

PART I. FINANCIAL INFORMATION		4

ITEM 1.	Financial Statements (unaudited)	4

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Operations and Comprehensive Loss	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity	6

	Condensed Consolidated Statements of Cash Flows	7

	Notes to Condensed Consolidated Financial Statements	8

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	26

ITEM 4.	Controls and Procedures	26

PART II. OTHER INFORMATION		27

ITEM 1.	Legal Proceedings	27

ITEM 1A.	Risk Factors	27

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

ITEM 3.	Defaults Upon Senior Securities	27

ITEM 4.	Mine Safety Disclosures	27

ITEM 5.	Other Information	27

ITEM 6.	Exhibits	28

SIGNATURES		29

FORWARD-LOOKING STATEMENTS

The information contained in this report should be read in conjunction with the financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q. Certain statements made in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based upon beliefs of, and information currently available to, us as of the date hereof, as well as estimates and assumptions made by us. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Forward-looking statements made in this Quarterly Report on Form 10-Q include statements about:

●	our belief that culture is the foundation of every successful cybersecurity and compliance program;
●	our ability to differentiate ourselves from the majority of cybersecurity firms that are focused on a specific technology or service by remaining technology agnostic, focusing on accumulating highly sought-after topic experts;
●	that we will continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients;
●	our belief that bringing together a world-class team of technological experts with multi-faceted expertise in critical aspects of cybersecurity is key to providing technology-agnostic solutions to our clients in a business environment that has suffered from a chronic lack of highly skilled professionals, thereby setting us apart from competitors and in-house security teams;
●	our ability to achieve our goal of creating a culture of security and to help quantify, define, and capture a return on investment from information technology and cybersecurity spending;
●	the substantial doubt about our ability to continue as a going concern;
●	our ability to regain compliance with the minimum bid price requirement or otherwise be in compliance with the other listing standards for the Nasdaq Capital Market;
●	our intention to satisfy the Series B Preferred Stock redemption through a combination of operating cash flows and additional financing;
●	our ability to fund ongoing operations upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles;
●	that we may be unable to access further equity or debt financing when needed; and
●	our belief that we maintain adequate indirect tax accruals.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks detailed from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as amended, any of which may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time they are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (UNAUDITED)

CISO GLOBAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
	2026			2025

ASSETS

Current Assets:
Cash and cash equivalents	$	640,075		$	1,695,994
Accounts receivable, net of allowance for credit losses of $58,858 and $60,551 at March 31, 2026, and December 31, 2025, respectively		1,321,532			1,201,061
Prepaid cost of revenue		82,735			70,216
Prepaid expenses and other current assets		150,601			204,997
Contract assets		130,889			91,956
Total Current Assets		2,325,832			3,264,224

Property and equipment, net		406,858			450,104
Operating lease right-of-use assets, net		328,638			370,345
Intangible assets, net		694,205			881,075
Goodwill		19,900,550			19,900,550
Prepaid cost of revenue, net of current portion		-			29,989
Other assets		131,966			131,966

Total Assets	$	23,788,049		$	25,028,253

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	3,174,965		$	2,682,762
Accrued expenses and other current liabilities		1,499,838			1,592,874
Deferred revenue		895,433			1,024,725
Lease liabilities		186,435			181,478
Loans payable		83,075			83,983
Line of credit		2,009,988			2,172,667
Total Current Liabilities		7,849,734			7,738,489

Deferred revenue, net of current portion		22,261			33,673
Loans payable, net of current portion		-			3,605
Lease liabilities, net of current portion		213,272			260,572

Total Liabilities		8,085,267			8,036,339

Commitments and Contingencies (Note 10)		-

Temporary Equity: Series B Preferred Stock; 2,396 shares issued at March 31, 2026 and December 31, 2025, respectively; 1,778 and 2,081 shares outstanding at March 31, 2026 and December 31, 2025, respectively		1,866,900			2,171,980

Stockholders’ Equity:
Common Stock, $.00001 par value; 1,300,000,000 shares authorized; 45,815,474 and 45,173,774 shares issued at March 31, 2026 and December 31, 2025, respectively; 45,313,337 and 44,671,637 outstanding at March 31, 2026 and December 31, 2025, respectively		458			451
Preferred Stock, $.00001 par value; 50,000,000 shares authorized: Series A Preferred Stock; 0 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		-			-
Additional paid-in capital		206,060,872			205,462,426
Treasury stock, at cost (502,137 shares)		(290,737	)		(290,737	)
Accumulated other comprehensive income (loss)		(4,288	)		(10,689	)
Accumulated deficit		(191,930,423	)		(190,341,517	)
Total Stockholders’ Equity		13,835,882			14,819,934

Total Liabilities, Temporary Equity and Stockholders’ Equity	$	23,788,049		$	25,028,253

The accompanying notes are an integral part of these condensed consolidated financial statements.

CISO GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)


	Three Months Ended March 31,
	2026			2025

Revenue:
Security managed services	$	5,540,348		$	6,445,233
Professional services		484,971			569,823
Cybersecurity software		195,006			147,266
Total revenue		6,220,325			7,162,322

Cost of revenue:
Security managed services		1,639,954			2,003,847
Professional services		39,370			50,192
Cybersecurity software		56,343			33,230
Cost of payroll		2,585,299			2,752,046
Stock-based compensation		75,252			541,405
Total cost of revenue		4,396,218			5,380,720
Total gross profit		1,824,107			1,781,602

Operating expenses:
Professional fees		689,166			513,679
Advertising and marketing		12,562			3,730
Selling, general and administrative		2,348,308			2,656,891
Stock-based compensation		218,121			317,047
Total operating expenses		3,268,157			3,491,347

Loss from operations		(1,444,050	)		(1,709,745	)

Other (expense) income:
Change in fair value of derivative liability		-			5,387,691
Loss on extinguishment of convertible notes		-			(839,151	)
Interest expense, net		(127,051	)		(8,212,871	)
Other expense		(17,805	)		(5,528	)
Total other expense		(144,856	)		(3,669,859	)

Loss from continuing operations before income taxes		(1,588,906	)		(5,379,604	)
Benefit from income taxes		-			-
Loss from continuing operations		(1,588,906	)		(5,379,604	)

Net loss	$	(1,588,906	)	$	(5,379,604	)

Net loss per common share, basic and diluted:	$	(0.04	)	$	(0.38	)

Weighted-average shares used in computing net loss per share, basic and diluted:		45,179,343			14,204,831

Other comprehensive income (loss):
Foreign currency translation adjustments	$	6,401		$	(4,206	)
Other comprehensive income (loss)		6,401			(4,206	)
Comprehensive loss	$	(1,582,505	)	$	(5,383,810	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

CISO GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)


	Temporary Equity						Permanent Equity
	Series B Preferred Stock						Common Stock				Series A Preferred Stock				Treasury Stock						Additional Paid-in		Accumulated Other Comprehensive			Accumulated
	Shares			Amount			Shares		Amount		Shares		Amount		Shares			Amount			Capital		Loss			Deficit			Total

Balance at January 1, 2026		2,081		$	2,171,980			45,173,774	$	451		-	$	-		(502,137	)	$	(290,737	)	$	205,462,426	$	(10,689	)	$	(190,341,517	)	$	14,819,934

Stock-based compensation		-			-			-		-		-		-		-			-			293,373		-			-			293,373
Issuance of Common Stock for services		-			-			-		-		-		-		-			-			-		-			-			-
Issuance of Common Stock		-			-			-		-		-		-		-			-			-		-			-			-
Conversion of Series B Preferred Stock to Common Stock		(303	)		(290,880	)		641,700		7		-		-		-			-			290,873		-			-			290,880
Adjustment of Series B Preferred Stock to redemption value		-			(14,200	)		-		-		-		-		-			-			14,200		-			-			14,200
Issuance of warrants		-			-			-		-		-		-		-			-			-		-			-			-
Exercise of warrants		-			-			-		-		-		-		-			-			-		-			-			-
Exercise of stock options		-			-			-		-		-		-		-			-			-		-			-			-
Foreign currency translation adjustments		-			-			-		-		-		-		-			-			-		6,401			-			6,401
Net loss		-			-			-		-		-		-		-			-			-		-			(1,588,906	)		(1,588,906	)
Balance at March 31, 2026		1,778		$	1,866,900			45,815,474	$	458		-	$	-		(502,137	)	$	(290,737	)	$	206,060,872	$	(4,288	)	$	(191,930,423	)	$	13,835,882

	Temporary Equity				Permanent Equity
	Series B Preferred Stock				Common Stock				Series A Preferred Stock				Treasury Stock						Additional Paid-in		Accumulated Other Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital		Loss			Deficit			Total

Balance at January 1, 2025		-	$	-		12,324,003	$	123		-	$	-		(502,137	)	$	(290,737	)	$	183,707,063	$	(4,779	)	$	(182,262,606	)	$	1,149,064

Stock-based compensation - stock options		-		-		-		-		-		-		-			-			850,992		-			-			850,992
Issuance of Common Stock for services		-		-		100,000		1		-		-		-			-			90,999		-			-			91,000
Issuance of Common Stock		-		-		3,809,519		38		-		-		-			-			1,719,518		-			-			1,719,556
Conversion of convertible notes into Common Stock		-		-		14,085,716		141		-		-		-			-			8,544,010		-			-			8,544,151
Foreign currency translation adjustments		-		-		-		-		-		-		-			-			-		4,206			-			4,206
Net loss		-		-		-		-		-		-		-			-			-		-			(5,379,604	)		(5,379,604	)
Balance at March 31, 2025		-	$	-		30,319,238	$	303		-	$	-		(502,137	)	$	(290,737	)	$	194,912,582	$	(573	)	$	(187,642,210	)	$	6,979,365

The accompanying notes are an integral part of these condensed consolidated financial statements.

CISO GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(1,588,906	)	$	(5,379,604	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation - stock options		293,373			850,992
Stock-based compensation - stock issued for services		-			7,460
Non-cash interest expense		-			7,898,323
Depreciation and amortization		237,996			312,224
Non-cash operating lease costs		41,707			41,707
Bad debt (recovery) expense		(1,693	)		59,022
Change in fair value of derivative liability		-			(5,387,691	)
Loss on extinguishment of convertible notes		-			839,151
Other		1,031			1,750
Changes in operating assets and liabilities:
Accounts receivable		(118,778	)		36,789
Contract assets		(38,933	)		(32	)
Prepaid expenses and other assets		71,866			(738,475	)
Accounts payable		498,604			(1,270,975	)
Accrued expenses and other current liabilities		(93,036	)		(63,054	)
Lease liabilities		(42,343	)		(36,349	)
Deferred revenue		(140,704	)		(124,746	)
Net cash used in operating activities		(879,816	)		(2,953,508	)

Cash flows from investing activities:
Purchases of property and equipment		(8,911	)		-
Net cash used in investing activities		(8,911	)		-

Cash flows from financing activities:
Proceeds from sales of common stock, net of offering costs		-			1,719,556
Proceeds from convertible notes payable		-			5,000,000
Proceeds from line of credit		6,019,500			1,000,000
Payments on line of credit		(6,182,179	)		(923,851	)
Payments on loans payable		(4,513	)		(1,639,284	)
Payments of debt issuance costs		-			(1,408,642	)
Net cash (used in) provided by financing activities		(167,192	)		3,747,779

Net (decrease) increase in cash and cash equivalents		(1,055,919	)		794,271

Cash and cash equivalents - beginning of the period		1,695,994			992,589

Cash and cash equivalents - end of the period	$	640,075		$	1,786,860

Supplemental cash flow information:
Cash paid for:
Interest	$	125,898		$	251,835
Income taxes	$	-		$	-
Supplemental disclosures of non-cash investing and financing activities:
Common stock issued in exchange for services	$	-		$	91,000
Conversion of convertible notes - common stock	$	-		$	7,705,000
Conversion of Series B Preferred Stock to common stock	$	290,880		$	-
Adjustment to redemption value of Series B Preferred Stock	$	14,200		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

CISO GLOBAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to CISO Global, Inc., a Delaware corporation and its wholly owned subsidiaries. Unless otherwise specified, all dollar amounts are expressed in United States dollars.

NOTE 1 – ORGANIZATION OF BUSINESS AND GOING CONCERN

Description of the Business

We are a leading cybersecurity, compliance, and software company comprised of highly trained and seasoned security professionals who work with clients to enhance or create a better cyber posture in their organization. We provide a full range of cybersecurity consulting, related services, and cybersecurity software – spanning all four pillars of security: proprietary software stack, compliance, cybersecurity, and organizational culture. Our comprehensive cybersecurity services include managed security, compliance services, security operations center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response, certified forensics, technical assessments, and cybersecurity training. We believe that culture is the foundation of every successful cybersecurity and compliance program. To deliver that outcome, we developed our unique offering of MCCP+ (“Managed Compliance & Cybersecurity Provider + Culture”), which is a holistic solution that provides all four of these pillars under one roof from a dedicated team of subject matter experts. In contrast to the majority of cybersecurity firms that are focused on a specific technology or service, we seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating highly sought-after topic experts. We continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients. We believe that bringing together a world-class team of technological experts with multi-faceted expertise in the critical aspects of cybersecurity is key to providing technology-agnostic solutions to our clients in a business environment that has suffered from a chronic lack of highly skilled professionals, thereby setting us apart from competitors and in-house security teams. Our goal is to create a culture of security and to help quantify, define, and capture a return on investment from information technology and cybersecurity spending.

Basis of Presentation

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q pursuant to rules and regulations of the SEC and include our accounts and the accounts of our subsidiaries. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the SEC’s rules and regulations, although, we believe that the disclosures made are adequate to make the information not misleading. All material intercompany accounts and transactions have been eliminated.

Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2026. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, as amended (“2025 Form 10-K”). The December 31, 2025 condensed consolidated balance sheet included herein is derived from the audited consolidated financial statements included in the 2025 Form 10-K but does not include all disclosures required by GAAP.

Reclassifications

Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation. The reclassifications had no impact on the reported results of operations.

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, due to losses incurred, historical cash used in operations and the existence of a working capital deficit, substantial doubt about our ability to continue as a going concern exists. Our company’s ability to fund ongoing operations is highly dependent upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles. We are evaluating strategies to obtain the required additional funding for future operations. These strategies may include obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring operations to grow revenues and decrease expenses. However, we may be unable to access further equity or debt financing when needed. As such, there can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

On September 24, 2025, we entered into a Preferred Equity Purchase Agreement (the “Purchase Agreement”) with B. Riley Principal Capital I (“B. Riley”) pursuant to which we may sell up to $15.0 million of shares of our Series B Convertible Preferred Stock (the “Series B Preferred Stock”). As of March 31, 2026, B. Riley purchased $2.3 million (2,396 shares) of the Series B Preferred Stock, of which 618 shares have been converted into shares of our Common Stock. Additional issuances under the Purchase Agreement are subject to customary conditions, including market-price/VWAP thresholds and a 9.99% beneficial ownership limitation.

On April 1, 2026, B. Riley delivered a conversion notice for the remaining 1,778 shares of Series B Preferred Stock. Because the notice was delivered at a time when the volume-weighted average price of our Common Stock was below the minimum conversion price of $0.40 per share for ten consecutive trading days, we are obligated to redeem the remaining Series B Preferred Stock and make monthly payments beginning May 1, 2026 equal to one-twelfth of 105% of the $1,778,000 stated value (aggregate $1,866,900, or $155,575 per month) over eleven months. These required cash payments increase our near-term liquidity needs, and we intend to satisfy them through a combination of operating cash flows and additional financing; however, there can be no assurance that sufficient funds will be available on acceptable terms, if at all.

On June 26, 2025, we renewed our expiring shelf registration statement on Form S-3 (that was deemed effective on July 7, 2025) (“July 2025 Prospectus”) that contains two prospectuses:

	1)	a base prospectus that covers the potential offering, issuance, and sale from time to time of our Common Stock, preferred stock, warrants, debt securities, and units in one or more offerings with total proceeds of up to $100,000,000; and
	2)	a sales agreement prospectus covering the potential offering, issuance, and sale from time to time of shares of our Common Stock having aggregate gross sales proceeds of up to $10,380,600 pursuant to our At-the-Market (“ATM”) sales agreement, dated June 14, 2022, with BRS, Stifel, Nicolaus & Company, Incorporated and Boustead Securities, LLC.

If our public float remains below $75 million, our sales under the shelf are limited to no more than one-third of our public float in any 12-month period.

There can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all. As such, we may be unable to access further equity or debt financing when needed. The ability for us to continue as a going concern is dependent upon our ability to successfully implement our strategies and eventually attain profitable operations. The accompanying consolidated financial statements do not include any adjustments to the carrying amounts or classification of assets, liabilities, and reported expenses that may be necessary if we are unable to continue as a going concern.

On December 30, 2025, we received a letter from the listing qualifications staff of Nasdaq providing notification that the bid price of our Common Stock had closed below $1.00 per share for the previous 33 consecutive business days and our Common Stock no longer meets the minimum bid price requirement for continued listing under Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 calendar days or until June 29, 2026, to regain compliance. To regain compliance, the closing bid price of our Common Stock must be $1.00 per share or more for a minimum of 10 consecutive business days at any time before June 29, 2026.

If we do not regain compliance with Rule 5550(a)(2) by June 29, 2026, we may be eligible for an additional 180 calendar day compliance period. To qualify, we would need to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and would need to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq would notify us that our securities would be subject to delisting. In the event of such notification, we may appeal the staff’s determination to delist our securities, but there can be no assurance the Staff would grant our request for continued listing.

The Nasdaq notification has no immediate effect on the listing of our Common Stock on the Nasdaq Capital Market. We intend to actively monitor the bid price of our Common Stock and our minimum market value of listed securities and will consider options available to us to achieve compliance with the Nasdaq listing rules. There can be no assurance that we will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with the other listing standards for the Nasdaq Capital Market.

Segment Information

We have a single reportable segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer. The CODM is regularly provided with financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Our CODM uses consolidated net loss, as reported in our condensed consolidated statements of operations and comprehensive loss, to measure segment profit or loss. Net loss is used by the CODM to facilitate analysis of our financial trends, review budgeted versus actual results and for planning purposes. Significant segment expenses are presented in our condensed consolidated statements of operations and comprehensive loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

Geographic Information

All of our revenue and property and equipment is located within the United States.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates include the allowance for credit losses, the carrying value of intangible assets and goodwill, our deferred tax assets and valuation allowance, the adequacy of insurance reserves, and assumptions used in the Black-Scholes option pricing model, such as expected term, stock price volatility and risk-free interest rate.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no significant changes to our accounting policies disclosed in our 2025 Form 10-K.

Contract Liabilities

Contract liabilities consist of deferred revenue and primarily include amounts billed or payments received in advance of revenue recognition. These amounts relate to services not yet performed or annual software licenses for which revenue will be recognized as the services are delivered or ratably over the license term. We generally invoice customers in advance or in milestone-based installments.

We recognized revenue of $290,723 and $570,741 for the three months ended March 31, 2026 and 2025, respectively, which was included in the corresponding deferred revenue balance at the beginning of the period.

Changes in deferred revenue were as follows:

	Three Months Ended March 31, 2026			Three Months Ended March 31, 2025

Beginning balance	$	1,058,398		$	1,449,718
Additions to deferred revenue		777,715			729,244
Recognition of deferred revenue		(918,419	)		(853,990	)
Ending balance	$	917,694		$	1,324,972

Net Loss per Common Share

Basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of Common Stock and potentially dilutive shares of Common Stock outstanding during the period.

For dilutive securities, all outstanding stock options, restricted stock units, warrants, and Series B Preferred Stock are considered potentially outstanding Common Stock. The dilutive effect, if any, of stock options, restricted stock units, and warrants is calculated using the treasury stock method. All outstanding shares of Series B Preferred Stock are considered Common Stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method.

The following is a reconciliation of the numerators and denominators of the basic and diluted net loss per share computations for the periods presented:

	Three Months Ended March 31, 2026			Three Months Ended March 31, 2025
Numerator:
Loss from continuing operations	$	(1,588,906	)	$	(5,379,604	)
Add: Adjustment of Series B Preferred Stock to redemption value		14,200			-
Less: Deemed dividend related to Series B Preferred Stock		(37,579	)		-
Net loss attributable to common stockholders	$	(1,612,285	)	$	(5,379,604	)

Denominator:
Weighted-average shares outstanding – basic & diluted		45,179,343			14,204,831

Net loss per share – basic & diluted:	$	(0.04	)	$	(0.38	)

The following potentially dilutive securities were excluded from the computation of diluted net loss per common share because their inclusion would have been anti-dilutive:

	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025

Stock options		3,596,804		1,473,967
Restricted stock units		1,150,000		-
Warrants		5,031,281		6,774,559
Series B Preferred Stock		4,445,000		-
Convertible notes payable		-		1,958,854
Total		14,223,085		10,207,380

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, including tax loss and credit carry forwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We utilize Accounting Standards Codification Topic 740 (ASC 740), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax returns. We account for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely than not” that a deferred tax asset will not be realized. At March 31, 2026 and December 31, 2025, our net deferred tax assets have been fully reserved.

For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the unaudited condensed consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires additional disaggregated disclosures on an entity’s effective tax rate reconciliation and additional details on income taxes paid. ASU 2023-09 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. As an emerging growth company (EGC), we have elected to adopt the standard based on the effective dates applicable to non-public business entities. Accordingly, we will adopt ASU 2023-09 for annual periods beginning after December 15, 2025. We expect this to result in additional disclosures in our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public entities to provide disaggregated disclosure of expenses included within relevant income statement expense captions, as well as additional disclosures about selling expenses. This update is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of the ASU or (2) retrospectively to any or all prior periods presented in the financial statements. The adoption of ASU 2024-03 is expected to result in additional disclosures in our condensed consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The purpose of this ASU is to modernize the accounting guidance for the costs to develop software for internal use by removing all references to prescriptive and sequential software development project stages and providing further guidance on when an entity is required to start capitalizing eligible costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted and the new guidance should be applied either on a prospective transition, a modified transition or a retrospective transition approach. Our company is currently evaluating the impact of this standard on its condensed consolidated financial statements and disclosures.

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of:

	March 31, 2026		December 31, 2025
Prepaid expenses	$	110,669	$	157,231
Prepaid insurance		39,932		47,766
Total prepaid expenses and other current assets	$	150,601	$	204,997

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

	March 31, 2026			December 31, 2025
Computer equipment	$	353,900		$	375,076
Leasehold improvements		25,791			25,791
Furniture and fixtures		72,511			72,511
Software		866,254			866,254
Property and equipment gross		1,318,456			1,339,632
Less: accumulated depreciation		(911,598	)		(889,528	)
Property and equipment, net	$	406,858		$	450,104

Total depreciation expense was $51,126 and $79,054 for the three months ended March 31, 2026 and 2025, respectively.

NOTE 5 – INTANGIBLE ASSETS AND GOODWILL

Goodwill

The following table presents the goodwill balance and accumulated impairment losses as of March 31, 2026 and December 31, 2025:

SCHEDULE OF CHANGES IN GOODWILL

Balance at March 31, 2026 and December 31, 2025
Gross goodwill	$	71,525,609
Accumulated impairment losses		(51,625,059	)
Goodwill, net of accumulated impairment losses	$	19,900,550

Intangible Assets

Intangible assets, net are summarized as follows:

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2026

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Tradenames – trademarks

3,835,981

(

SEC Form 10-Q filed by CISO Global Inc.