10-Q: CISO Global Reports Q3 2026 Results Amidst Going Concern Doubts

CISO Global, Inc. filed its Q3 2026 Form 10-Q, revealing continued operating losses, a significant working capital deficit, and substantial doubt about its ability to continue as a going concern, though it has implemented cost reductions.

Summary

• CISO Global, Inc. reported its Q3 2026 results, showing a net loss of $6,337,012 for the nine months ended September 30, 2026, compared to a net loss of $5,857,097 for the same period in 2025.
• Total revenue for the nine months ended September 30, 2026, decreased to $17,632,269 from $20,337,707 in the prior year, primarily driven by a decline in security managed services revenue.
• Operating expenses were reduced to $10,745,840 from $11,698,895, largely due to decreases in advertising and marketing, selling, general, and administrative expenses, and stock-based compensation.
• The company recorded a goodwill impairment charge of $1,650,006 in the current period due to a sustained decline in stock price and market capitalization.
• A significant working capital deficit of $9,637,252 exists as of September 30, 2026, raising substantial doubt about the company's ability to continue as a going concern.
• The company's ability to fund ongoing operations is highly dependent on raising additional capital through equity or debt financing.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as negative due to significant ongoing losses, a substantial working capital deficit, and continued doubt about the company's ability to continue as a going concern, despite some cost-saving measures.

Positives

• Total operating expenses decreased by $953,055 to $10,745,840 for the nine months ended September 30, 2026, compared to $11,698,895 for the same period in 2025.
• Cost of payroll decreased by $710,191 for the nine months ended September 30, 2026, primarily due to headcount reductions.
• Stock-based compensation expenses decreased significantly by $1,183,690 for the nine months ended September 30, 2026, due to fewer equity awards and a decrease in grant-date fair value.
• Advertising and marketing expenses saw a substantial decrease of $822,073 for the nine months ended September 30, 2026, due to transitioning marketing functions in-house.
• Cybersecurity software revenue increased by $152,341, or 35%, for the nine months ended September 30, 2026, compared to the same period in 2025.

Negatives

• The company reported a net loss of $6,337,012 for the nine months ended September 30, 2026, an increase from the net loss of $5,857,097 in the prior year.
• Total revenue decreased by $2,705,438 to $17,632,269 for the nine months ended September 30, 2026, compared to $20,337,707 in the prior year, driven by a 15% decline in security managed services revenue.
• A goodwill impairment charge of $1,650,006 was recorded in the current period.
• The company has a working capital deficit of $9,637,252 as of September 30, 2026, a significant increase from $4,474,265 as of December 31, 2025.
• Substantial doubt exists about the company's ability to continue as a going concern.
• Cash and cash equivalents decreased by $1,244,218 to $451,776 as of September 30, 2026, from $1,695,994 as of December 31, 2025.
• The company expects to incur further losses through the end of 2027.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to ongoing losses, negative operating cash flows, and a working capital deficit.
• The company's ability to fund ongoing operations is highly dependent on raising additional capital through equity issuance, debt, or other financing vehicles, and there is no assurance that such financing will be available.
• A goodwill impairment charge of $1,650,006 was recorded, and further impairment charges could adversely impact financial condition and results of operations.
• The company faces potential delisting from The Nasdaq Capital Market if it cannot regain compliance with the minimum bid price requirement by December 28, 2026.
• Customer attrition or delays in onboarding new customers could materially impact revenue and liquidity.
• The company may be unable to access further equity or debt financing when needed.
• Repayment of the outstanding balance of Series B Preferred Stock by B. Riley could materially reduce available liquidity and the ability to fund working capital and operations.

Future Outlook

The company expects to incur further losses through the end of 2027. Its ability to fund ongoing operations is highly dependent on raising additional capital through equity issuance, debt, or other financing vehicles. There is substantial doubt about its ability to continue as a going concern.

Management Comments

• We believe that culture is the foundation of every successful cybersecurity and compliance program.
• 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.
• 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.
• We would intend to satisfy any required cash payments 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.

Industry Context

StockSavvy.ai notes that the cybersecurity industry continues to face challenges related to talent shortages and evolving threats. CISO Global's strategy of remaining technology-agnostic and focusing on accumulating topic experts is a recognized approach to differentiation, but the company's financial struggles highlight the difficulty in scaling and achieving profitability in this competitive landscape.

Comparison to Industry Standards

• The company's revenue decline in managed services is concerning, as this is often a stable recurring revenue stream for cybersecurity firms.
• The significant goodwill impairment suggests that the company's past acquisitions or valuations may not be sustainable in the current market, a risk faced by many in the tech sector.
• The substantial operating losses and negative cash flow are not uncommon for growth-stage technology companies, but the severity and the going concern warning place CISO Global in a precarious position compared to more stable industry players.
• Competitors like Palo Alto Networks (PANW) and CrowdStrike (CRWD) are experiencing significant revenue growth and profitability, highlighting a stark contrast in performance and financial health within the cybersecurity sector.

Legal Proceedings

• The company is not aware of any material pending legal proceedings.

Related Party Transactions

• Managed Services Agreement with Hensley Beverage Company, a related party through director Andrew K. McCain, generating $1,280,098 in revenue for the nine months ended September 30, 2026.
• A convertible note payable to Hensley & Company was converted into Series A Preferred Stock and subsequently into Common Stock.
• Series A Preferred Stock was issued to Hensley & Company and JC Associates, Inc. in exchange for convertible notes, and later converted into Common Stock.
• A related party accounted for approximately 12% of accounts receivable as of September 30, 2026.

Stakeholder Impact

• Shareholders face continued dilution risk from potential future capital raises and the ongoing uncertainty regarding the company's going concern status.
• Creditors and lenders face increased risk due to the company's substantial debt obligations and precarious liquidity position.
• Employees may face uncertainty regarding job security given the company's financial challenges and stated intention to reduce headcount.
• Customers may experience service disruptions or a lack of continuity if the company is unable to secure necessary financing or continues to face operational challenges.

Next Steps

• Regain compliance with Nasdaq minimum bid price requirement by December 28, 2026, potentially through a reverse stock split.
• Continue efforts to identify and acquire cybersecurity talent to expand service scope and geographical coverage.
• Implement strategies to grow revenues and decrease expenses to address going concern issues.
• Seek additional capital through equity issuance, debt, or other financing vehicles to fund ongoing operations.
• Manage customer retention and expand the pipeline to offset lost revenue.

Key Dates

Recommendation

The company's financial condition is highly concerning, characterized by significant operating losses, a substantial working capital deficit, and explicit doubt about its ability to continue as a going concern. Despite cost-saving measures, revenue continues to decline, and the reliance on future financing creates substantial risk. The potential for delisting from Nasdaq further exacerbates these concerns, making it a sell recommendation.

Keywords

cybersecurity, managed services, goodwill impairment, going concern, revenue decline, working capital deficit, Nasdaq compliance, financing