CISO (US:CISO)2025-11-13 22:20Revenue Performance - Total revenue for Q3 2025 was $6,461,798, a decrease of $1,049,499 or 14% compared to Q3 2024 revenue of $7,511,297[116] - Security managed services revenue decreased by $1,129,609, or 16%, for Q3 2025 compared to Q3 2024, primarily due to lower annual contract values among newly acquired customers[118] - Cybersecurity software revenue increased by $36,968, or 34%, for Q3 2025 compared to Q3 2024, driven by an increase in subscriptions for Checklight cybersecurity software[119] - Professional services revenue increased by $43,142, or 10%, for Q3 2025 compared to Q3 2024, attributed to more customer projects[118] Profit and Loss - Total gross profit for the nine months ended September 30, 2025 was $5,025,756, an increase of $2,351,557 compared to $2,674,199 for the same period in 2024[128] - Loss from operations for the nine months ended September 30, 2025 was reduced to $6,673,139, compared to $12,657,510 for the same period in 2024, reflecting an improvement of $5,984,371[128] - For the nine months ended September 30, 2025, the company incurred a net loss of $5,857,097 and reported cash used in operations of $6,180,042, with an expectation of further losses through the end of 2025[141] Cash Flow and Financing - Net cash used in operating activities for the nine months ended September 30, 2025, was $6,180,042, compared to $3,582,726 for the same period in 2024[153] - Net cash provided by financing activities for the nine months ended September 30, 2025, was $6,299,182, primarily from the sale of Common Stock and the exercise of warrants[156] - The company has $100,000,000 available from its shelf registration statement on Form S-3 to fund current and future operations, subject to certain limitations due to its public float[145] Debt and Liabilities - Total current liabilities decreased by $16,585,255 to $8,370,392 compared to $24,955,647 as of December 31, 2024[117] - As of September 30, 2025, the carrying value of outstanding debt obligations was $2,053,884, with substantial maturities scheduled for the remainder of 2025 and 2026[148] - Cumulative dividends in arrears on the Series A Preferred Stock totaled $145,200 as of September 30, 2025, with no dividends declared during the period[142] Future Outlook - The company expects to incur further losses through the end of 2025 and has substantial doubt about its ability to continue as a going concern without raising additional capital[147] - The company’s current cash on hand is insufficient to satisfy its operating cash needs for the next 12 months from the filing of the Quarterly Report[150] Other Financial Metrics - Stock-based compensation expenses decreased by $735,631, or 69%, for Q3 2025 compared to Q3 2024, due to the forfeiture of options by terminated employees[122] - Interest expense decreased by $1,110,088 for Q3 2025 compared to Q3 2024, primarily due to the extinguishment of convertible notes payable[127] - The gain on extinguishment of convertible notes increased by $5,296,103 for Q3 2025, as a result of the conversion of certain convertible notes into shares of Series A Preferred Stock[126] - The company recognized a gain on troubled debt restructuring of $5,296,103 during the three and nine months ended September 30, 2025, reflecting the difference between the carrying value of the Exchange Notes and the estimated fair value of the Series A Preferred Stock issued[143] - As of September 30, 2025, the company had a working capital deficit of $5,376,502, a significant decrease from a deficit of $21,474,576 as of December 31, 2024[151]