S-1: CISO Global Files S-1 for $15M B. Riley Preferred Stock Resale

CISO Global, a cybersecurity firm, filed an S-1 registration statement for the resale of up to 39,062,500 common shares by B. Riley Principal Capital, LLC, stemming from a potential $15 million Series B Preferred Stock offering.

Summary

• CISO Global, Inc. filed an S-1 registration statement for the resale of up to 39,062,500 shares of common stock by B. Riley Principal Capital, LLC.
• These shares are issuable upon the conversion of Series B Convertible Preferred Stock, which CISO Global may sell to B. Riley for up to $15.0 million over an 18-month period.
• The proceeds from the Series B Preferred Stock sales, if any, will be used for working capital, general corporate purposes, and debt obligations.
• The initial purchase of Series B Preferred Stock by B. Riley is set at $2.3 million, with subsequent weekly purchases capped at $500,000.
• The conversion price for the Series B Preferred Stock is variable, with a minimum of $0.40 per share, and is subject to certain trading price and volume conditions.
• Stockholder approval is required for B. Riley to convert Series B Preferred Stock into common shares exceeding 19.99% of outstanding common stock (Exchange Cap).
• The company recently exchanged approximately $9.3 million in outstanding convertible notes for 9,297,894 shares of newly authorized Series A Preferred Stock with related parties.
• CISO Global operates as a cybersecurity, compliance, and software firm, focusing on talent acquisition, proprietary software (MCCP+), and a technology-agnostic approach.

Sentiment

Score: 4

Explanation: The filing outlines a significant potential capital infusion which is positive for liquidity and debt management. However, the substantial potential dilution from the Series B Preferred Stock conversion and the contingent nature of the funding (minimum trading price, volume limitations) introduce considerable uncertainty and risk for existing shareholders. The company's business strategy in a high-demand industry is positive, but the financial structure of this offering presents notable downsides.

Positives

• Potential to raise up to $15.0 million in gross proceeds from the sale of Series B Preferred Stock to B. Riley, enhancing liquidity and funding for working capital, general corporate purposes, and debt obligations.
• Strategic focus on identifying, attracting, and retaining top cybersecurity and compliance talent, addressing a significant industry supply-demand imbalance.
• Investment in proprietary software (MCCP+) and a unified ecosystem to integrate acquisitions, foster cross-pollination of solutions, and enhance recurring revenue.
• Technology-agnostic approach and integrated service model aim to differentiate the company, drive scalable growth, and strengthen client retention.
• Successful conversion of approximately $9.3 million in outstanding convertible notes into Series A Preferred Stock, reducing debt obligations.

Negatives

• Significant potential for substantial dilution to existing common stockholders, with up to 39,062,500 new common shares potentially issued, representing up to 53.4% of current outstanding shares.
• The company's ability to access the full $15.0 million from B. Riley is contingent on meeting minimum trading price requirements and not exceeding trading volume limitations, which could limit access to capital when needed.
• The company may be obligated to redeem Series B Preferred Stock in cash under certain adverse market conditions (e.g., Nasdaq delisting, sustained low stock price), which could adversely affect liquidity and financial condition.
• Restriction from entering into variable rate transactions while the Purchase Agreement is in effect, potentially limiting alternative financing opportunities.
• The mere existence of the arrangement with B. Riley and potential future sales could depress the market price of common stock and make it harder to raise equity capital in the future.

Risks

• Ability to direct B. Riley to purchase Series B Preferred Stock is subject to minimum trading price and trading volume limitations, potentially limiting access to needed proceeds.
• Management has broad discretion over the use of proceeds from Series B Preferred Stock sales, which may not be invested successfully.
• Issuance and conversion of Series B Preferred Stock will significantly increase the total number of outstanding common shares, causing substantial dilution to existing stockholders.
• Substantial future sales or other issuances of common stock or conversion of Series B Preferred Stock could depress the market price of common stock.
• Future equity offerings and other issuances of securities may lead to further dilution for existing stockholders.
• Obligation to redeem Series B Preferred Stock under certain circumstances could adversely affect liquidity and financial condition and limit the ability to pursue other business opportunities.
• The company is an "emerging growth company" and may take advantage of reduced reporting requirements, which could make it more difficult for investors to compare its financial performance with other public companies.

Future Outlook

CISO Global aims to expand its service scope and geographical reach by acquiring top cybersecurity talent, building a world-class technology team, and leveraging its proprietary software to stay ahead of emerging threats and regulatory changes. The company expects its strategy to drive scalable growth, strengthen recurring revenue streams, and position it as a leader in the cybersecurity market. Future capital needs may differ from anticipated, and the timing and amount of Series B Preferred Stock purchases and conversions will depend on market conditions and stock price volatility.

Management Comments

• Our company is a leading cybersecurity, compliance, and software firm composed of highly trained and seasoned security professionals.
• We prioritize identifying, attracting, and retaining top cybersecurity and compliance talent.
• Our strategy includes acquisitions, direct hiring, and employee incentivization through stock options to ensure retention.
• We continuously seek culturally aligned cyber talent that offers operational leverage through existing revenue streams and customer relationships.
• We differentiate ourselves through a technology-agnostic approach and a relentless focus on acquiring high-demand cybersecurity talent, expanding both service capabilities and global reach.
• Our goal remains to stay ahead of emerging threats and regulatory changes, ensuring our clients safety, compliance, and success—with our proprietary software serving as a vital tool to support ongoing security, compliance, and operational excellence.

Industry Context

The cybersecurity industry faces a significant supply and demand imbalance for expert professionals. CISO Global's strategy of acquiring talent, developing proprietary software (MCCP+), and offering technology-agnostic solutions positions it to capitalize on this shortage and differentiate itself from competitors and traditional in-house security models. The integrated service model aims to enhance revenue capture, operational efficiency, and client retention in a growing but competitive market.

Comparison to Industry Standards

• The company aims to surpass competitors and traditional in-house security models by combining a technology-agnostic approach with proprietary CISO software for enhanced threat visibility and accelerated incident response.
• Its staffing model, where employees are dedicated partners under recurring monthly contracts rather than consultants, is presented as a differentiator to mitigate challenges in hiring experienced cybersecurity professionals, contrasting with typical consulting models.
• The focus on acquiring top cybersecurity talent and expanding geographical footprint directly addresses the critical cybersecurity talent shortage, a widely recognized industry challenge.

Corporate Governance

Related Party Transactions

• On August 4, 2025, CISO Global entered into Exchange Agreements with Hensley & Company, d/b/a Hensley Beverage Company, an entity affiliated with Andrew K. McCain (a director), and J C Associates, Inc., an entity affiliated with a member of the advisory board. These parties exchanged approximately $9.3 million in convertible notes for 9,297,894 shares of Series A Preferred Stock.
• Hensley & Company was also the purchaser of a $5,000,000 10% Unsecured Convertible Note on March 20, 2023.

Stakeholder Impact

• Shareholders: Will experience substantial dilution from the conversion of Series B Preferred Stock into common stock. Their economic and voting interests will represent a smaller percentage of the total outstanding shares. The market price of common stock could decline due to future sales.
• Creditors: The potential $15.0 million in proceeds from Series B Preferred Stock sales could be used to pay down debt obligations, potentially improving the company's credit profile.
• Employees: The company's strategy includes employee incentivization through stock options to ensure retention of top cybersecurity talent.
• Customers: The company aims to enhance its cybersecurity posture, expand service capabilities, and deliver unparalleled value through its integrated service model and proprietary software, potentially leading to better service and outcomes for clients.
• B. Riley Principal Capital, LLC: Will become a significant holder of convertible preferred stock and potentially common stock, with rights to convert and resell shares, and will receive placement agent fees.

Next Steps

• CISO Global must satisfy certain conditions (minimum share price, trading volumes, registration statement effectiveness) to commence sales of Series B Preferred Stock to B. Riley.
• The company must use reasonable best efforts to obtain stockholder approval for issuances exceeding the 19.99% Exchange Cap within 90 days of September 24, 2025 (by December 23, 2025), and subsequently every 90 days if not obtained.
• B. Riley may resell the common stock issuable upon conversion of Series B Preferred Stock from time to time.
• Management will exercise broad discretion over the use of net proceeds from Series B Preferred Stock sales.

Key Dates

Recommendation

While the potential capital infusion of up to $15 million is a positive for CISO Global's liquidity and ability to fund operations and debt, the significant potential for dilution (up to 53.4% of outstanding shares) from the Series B Preferred Stock conversion presents a substantial risk to existing shareholders. The contingent nature of the funding, tied to minimum trading prices and volume, adds uncertainty. The company's strategic focus on cybersecurity talent and proprietary software is sound in a growing market, but the dilutive financing structure and redemption obligations warrant caution. A 'hold' recommendation reflects the balance between the company's operational strengths and the considerable financial risks associated with this particular capital raise.

Keywords

CISO Global, Cybersecurity, SEC Filing, S-1, Preferred Stock, Common Stock, B. Riley, Capital Raise, Dilution, Nasdaq, Stock Offering, Financial Reporting, Risk Management, Corporate Governance, MCCP+, Managed Compliance, Incident Response, vCISO, Cyber Talent