Western Acquisition Ventures(WAVS) - 2024 Q4 - Annual Report

Financial Performance - Gross profit for 2024 reached $3,634,743, representing a margin of 20.5$2,643,060 and a margin of 13.7% in 2023 [56]. - Operating income increased to $2,416,113 in 2024, with a margin of 13.6$326,411 and a margin of 1.7% in 2023 [56]. - Net income for 2024 was $1,229,601, a significant improvement from a net loss of$2,097,013 in 2023, reflecting a margin of 6.9% [56]. - The number of customers grew to 41 in 2024, up from 38 in 2023 [56]. - The company has over 41 customers, with the top ten customers accounting for approximately 93% of total revenue in 2024 and 88% in 2023 [83]. Business Operations and Services - Managed security services include 24/7 monitoring, threat detection, incident response, and remediation [38]. - The company provides consulting and advisory services to enhance customers' cybersecurity programs [30]. - Cycurion's managed IT services optimize IT infrastructure, reduce costs, and improve operational efficiency [33]. - Cycurion's growth engine is driven by organic business solutions and strategic acquisitions of cybersecurity services and technology providers [29]. - The Cycurion ARx platform offers comprehensive cybersecurity solutions, including DDoS protection and endpoint protection, enhancing overall security posture [55]. - The company has a strong focus on healthcare IT services, addressing HIPAA/HITECH compliance and improving service delivery through technology solutions [52]. - Cycurion has integrated technology assets from Sabres into its Managed Security Services Practice, enhancing service offerings and commercial business expansion [80]. Acquisitions and Strategic Partnerships - Cycurion plans to acquire SLG Innovation Inc., with the acquisition agreement expected to close in the current fiscal quarter [67]. - The SLG Management Agreement aims to ensure SLG's commercial viability and will result in SLG's financial statements being consolidated with Cycurion's [70]. - Axxum Technologies, acquired in 2017, continues to provide cybersecurity services to federal government clients while expanding its commercial footprint [58]. - Cloudburst Security, acquired in 2019, specializes in innovative cybersecurity services for various sectors, enhancing the company's service offerings [61]. - An expanded partnership with a major health association will bring Cycurion's Managed Security Services Provider (MSSP) to several thousand member organizations across the country [104]. Financial Challenges and Compliance - Cycurion has incurred net losses and cannot assure that it will achieve or maintain profitable operations [22]. - The company requires substantial additional funding in the future, which may not be available on acceptable terms [22]. - Cycurion's ability to grow and compete will be adversely affected if adequate capital is not available [22]. - The company has a limited operating history, raising substantial doubt regarding its ability to continue as a going concern [22]. - Cycurion issued multiple promissory notes totaling $300,000 in January 2025 to unaffiliated investors [95][96][97]. - Cycurion received a notification from Nasdaq regarding a deficiency in the closing bid price of its common stock, which has been below$1.00 for 30 consecutive business days, with a compliance deadline of October 6, 2025 [108]. - The company was also notified of a deficiency in maintaining a Market Value of Listed Securities (MVLS) below the required $50,000,000 for 30 consecutive business days, with a compliance deadline of October 8, 2025 [109]. - Additionally, Cycurion was informed of a deficiency in the Market Value of Publicly Held Shares (MVPHS), which has been below the required$15,000,000 for 30 consecutive business days, also with a compliance deadline of October 8, 2025 [110]. - Failure to regain compliance within the specified 180-day periods for either MVLS or MVPHS could result in delisting from Nasdaq, although the company retains the right to appeal such decisions [109][110]. - The Nasdaq notifications currently have no effect on the listing status of Cycurion's common stock [108][109][110]. - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures [311]. Future Outlook and Growth Strategy - Cycurion expects to close the RCR Term Sheet transactions in the first half of the current fiscal year, with a backlog of $16 million as of December 31, 2024, compared to$15 million in 2023 [86]. - Cycurion's Multi-Dimensional Protection (MDP) platform is expected to move into production in Q3 2024, enhancing cybersecurity capabilities through a cloud-based AI algorithm [78]. - The company plans to continue expanding its market presence by pursuing new customers and investing in new technology platforms, including cybersecurity and disaster recovery solutions [85]. - Cycurion's common stock began trading on The Nasdaq Global Market under the symbol "CYCU" following the completion of a business combination on February 14, 2025 [101].