10-K: Cycurion Reports $24M Loss, Going Concern Doubt Amid Strategic Shifts

Sentiment:

Annual Report 31 March 2026 4:55 PM

📋All filings for Western Acquisition Ventures CORP

Cycurion, Inc. reported a significant net loss of $24.06 million for fiscal year 2025, driven by business combination expenses and increased public company costs, alongside a 14.8% revenue decrease, while actively managing Nasdaq listing compliance and pursuing strategic growth initiatives.

Delay expectedRevenue decrease in 2025 was attributed to delayed start dates of new federal, state, and local contracts.The company has experienced, and may continue to experience, delays in contract awards and revenue recognition attributable to disruptions in federal funding flows.The company has experienced, and expects to continue to experience, delays in its contracting backlog attributable to government budget disruptions.The Stock-for-Stock Exchange Agreement with iQSTEL Inc. was amended to extend the timeline for the issuance and delivery of shares from 30 business days to 60 business days following the effective date of September 2, 2025, and established a firm deadline of December 15, 2025, for regulatory filings to facilitate dividend distribution by December 31, 2025.

Capital raiseReceived $7.0 million in proceeds from an equity line of credit in fiscal year 2025.Received $4.8 million in proceeds from a private placement capital raise in December 2025.Received $3.7 million in proceeds from the exercise of warrants in fiscal year 2025.Received $2.4 million in proceeds from convertible notes payable in fiscal year 2025.Received $0.5 million in proceeds from notes payable in fiscal year 2025.Entered into an Equity Purchase Agreement with Yield Point NY LLC for up to $60.0 million in shares of common stock, with a pre-funded warrant issued as a $1.8 million commitment fee.Entered into a securities purchase agreement with Armistice Capital Master Fund Ltd. for gross proceeds of approximately $6 million, involving pre-funded warrants and warrants.Management plans to undertake a public offering to raise additional capital to address going concern issues and reduce leverage.

Worse than expectedReported a net loss of $24.06 million in FY2025, a significant deterioration from net income of $1.23 million in FY2024.Revenue decreased by 14.8% from $17.77 million in FY2024 to $15.13 million in FY2025.Gross profit percentage declined substantially from 20.5% in FY2024 to 10.7% in FY2025.Operating expenses surged from $1.22 million in FY2024 to $25.03 million in FY2025, primarily due to business combination expenses and public company costs.Net cash used in operating activities increased from $1.37 million in FY2024 to $12.09 million in FY2025, indicating a significant increase in cash burn.Accumulated deficit increased from $3.2 million in FY2024 to $26.9 million in FY2025.The company has a working capital deficit of $8.9 million and substantial doubt about its ability to continue as a going concern.

Summary

Reported a net loss of $24.06 million for fiscal year 2025, a substantial decline from net income of $1.23 million in fiscal year 2024.
Revenue decreased by 14.8% to $15.13 million in fiscal year 2025 from $17.77 million in fiscal year 2024, attributed to delayed contract start dates and a focus on more profitable business.
Gross profit declined to $1.61 million (10.7% margin) in fiscal year 2025 from $3.63 million (20.5% margin) in fiscal year 2024.
Operating loss was $23.41 million in fiscal year 2025, compared to operating income of $2.42 million in fiscal year 2024.
Selling, general and administrative (SG&A) expenses increased significantly to $9.26 million in fiscal year 2025 from $1.21 million in fiscal year 2024, primarily due to increased costs associated with being a publicly traded company and the addition of key individuals.
Incurred $11.87 million in business combination expenses in fiscal year 2025.
Net cash used in operating activities increased to $12.09 million in fiscal year 2025 from $1.37 million in fiscal year 2024.
Cash and cash equivalents increased to $5.26 million as of December 31, 2025, from $38,742 as of December 31, 2024, primarily due to financing activities.
Accumulated deficit grew to $26.9 million as of December 31, 2025, from $3.2 million as of December 31, 2024.
A working capital deficit of $8.9 million was reported as of December 31, 2025.
Management and auditors expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses, working capital deficit, and negative operating cash flows.
Completed a business combination with Western Acquisition Ventures Corp. on February 14, 2025, and was renamed Cycurion, Inc.
Acquired SLG Innovation, Inc. as a Variable Interest Entity (VIE) on March 31, 2025, recognizing $14.3 million in goodwill.
Successfully regained compliance with Nasdaq's minimum bid price requirement after effecting a one-for-thirty reverse stock split on October 27, 2025.
Committed backlog increased significantly to $80.0 million as of December 31, 2025, from $16.0 million as of December 31, 2024.
Announced new contract awards totaling $1.35 million in expected revenue for 2026, including $1.165 million in new annual recurring revenue, on March 25, 2026.
Entered into a Memorandum of Understanding to acquire the video-solutions division of Kustom Entertainment, Inc. on January 22, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging period marked by significant financial losses and ongoing liquidity concerns, despite strategic efforts to secure new contracts and capital. The explicit going concern doubt and substantial revenue decline overshadow recent positive developments, indicating a high-risk investment profile.

Positives

Successfully completed the business combination with Western Acquisition Ventures Corp. on February 14, 2025.
Regained compliance with Nasdaq's minimum bid price requirement on November 11, 2025, after a one-for-thirty reverse stock split.
Strategic acquisition of SLG Innovation, Inc. on March 31, 2025, expanding the public-sector IT modernization footprint and adding $14.3 million in goodwill.
Expanded partnership with Journal Technologies, securing a $22 million multi-year contract announced on April 8, 2025.
Awarded a $6 million contract by a major municipal agency on April 29, 2025.
Formed a partnership with AgileBlue, an AI-powered security operations platform provider, announced on July 2, 2025.
Achieved diamond level partnership with the National Association of County and City Officials (NACCHO), announced on July 10, 2025.
Announced an additional $4.6 million in new contracts in September 2025, bringing the total backlog to $73.6 million.
Selected as an approved vendor under the Florida State Term Contract for Information Technology Staff Augmentation Services on October 29, 2025.
SLG Innovation, Inc. was awarded a $1.1 million contract to modernize legacy data systems for a large county-level public guardian office on November 5, 2025.
Awarded a contract by a telecommunication company to deliver network deployment services supporting a federal government agency modernization initiative on November 10, 2025.
Announced two new contract awards on March 25, 2026, expected to generate approximately $1.35 million in combined revenue in 2026, including $1.165 million in new annual recurring revenue.
Committed backlog significantly increased to $80.0 million as of December 31, 2025, from $16.0 million as of December 31, 2024.
Recorded a gain on debt settlement, net of $1.22 million for the year ended December 31, 2025.

Negatives

Reported a significant net loss of $24.06 million in fiscal year 2025, a substantial reversal from net income of $1.23 million in fiscal year 2024.
Revenue decreased by 14.8% in fiscal year 2025, indicating a contraction in core business operations.
Gross profit percentage significantly declined to 10.7% in fiscal year 2025 from 20.5% in fiscal year 2024, suggesting reduced profitability per dollar of revenue.
Operating expenses surged to $25.03 million in fiscal year 2025 from $1.22 million in fiscal year 2024, primarily due to $11.87 million in business combination expenses and increased public company costs.
Net cash used in operating activities increased significantly to $12.09 million in fiscal year 2025, highlighting a substantial cash burn from operations.
Accumulated deficit increased dramatically to $26.9 million as of December 31, 2025, from $3.2 million as of December 31, 2024.
Reported a working capital deficit of $8.9 million as of December 31, 2025, indicating short-term liquidity challenges.
Management and the independent auditor expressed substantial doubt about the company's ability to continue as a going concern.
Received a delisting notice from Nasdaq on October 14, 2025, for failing to meet the minimum bid price requirement, although compliance was later regained through a reverse stock split.
Maintains a high level of indebtedness and debt service obligations, which could adversely affect financial condition.
Requires substantial additional funding in the future, with no assurance of availability on acceptable terms or at all.
Allocation of capital to cryptocurrency investments through Cycurion Crypto Inc. introduces speculative risk and may not align with shareholder or client expectations.
Derives a substantial portion of revenue from a limited number of contracts and clients (64.5% from four largest customers in 2025), increasing concentration risk.
Government contracts are subject to funding risks, including dependence on federal funding, and potential cost-reduction initiatives (DOGE) that could reduce demand.
The government contracting process is lengthy, complex, and subject to protest and delay, making revenue difficult to predict.
The AI-enhanced ARx platform and other technology solutions are at an early stage of market adoption, with no guarantee of broad commercial acceptance.
The historical management team has limited experience managing a public company, leading to increased costs and potential inefficiencies.
Potential future sales of common stock due to registration rights and Rule 144 may depress the market price.
Future offerings of debt or preferred equity could adversely affect the market price of common stock and dilute ownership.

Risks

Reliance on a limited number of contracts and clients, with the loss or non-renewal of any significant contract or client relationship potentially materially reducing revenue and profitability.
Government contracts are subject to funding risks, including dependence on federal funding that flows through state and local agencies, creating revenue uncertainty.
Recent and ongoing federal and state government cost-reduction initiatives (e.g., DOGE) may reduce demand for services and disrupt the contracting pipeline.
The competitive landscape for cybersecurity and IT services is intense and evolving, and failure to innovate may lead to a loss of competitiveness.
The government contracting process is lengthy, complex, and subject to protest and delay, making revenue difficult to predict and backlog an unreliable indicator of future revenue.
Government contracts are subject to audit, investigation, modification, and termination, which could result in adverse findings, reduced revenue, or other penalties, including False Claims Act liability.
Business strategy, particularly acquisition activities, may impose limitations on the ability to accurately forecast future revenue and operating results due to integration risks and potential liabilities.
A cybersecurity breach or incident affecting internal systems, client systems, or the AI-enhanced ARx platform could damage reputation, expose to liability, and undermine market confidence.
The rapidly evolving cybersecurity regulatory environment means failure to comply with new and changing requirements could result in penalties, loss of contracts, and competitive disadvantage.
The AI-enhanced ARx platform and other technology solutions are at an early stage of market adoption, with no assurance of broad commercial acceptance or recovery of development costs.
Integration of artificial intelligence introduces new risks, including adversarial manipulation, false positives/negatives, and evolving regulatory landscapes.
Dependence on unaffiliated third-party software for solutions and operations, with risks of increased license fees or inability to renew agreements.
Recurring losses, net working capital deficit, and accumulated deficit raise substantial doubt about the ability to continue as a going concern, potentially leading to liquidation.
High level of indebtedness and debt service obligations could adversely affect financial condition and limit operational flexibility.
Requires substantial additional funding in the future, which may not be available on acceptable terms or at all, potentially forcing delays or cessation of operations.
Allocation of capital to cryptocurrency investments involves speculative risk due to market volatility, regulatory uncertainty, and potential for market manipulation, which may not align with shareholder expectations.
Growth strategy depends on acquisitions, which involve integration risks, potential unforeseen liabilities, and diversion of management's attention.
Strategic partnerships and international expansion expose the company to unfamiliar regulatory environments, foreign exchange fluctuations, and geopolitical instability.
Reliance on personnel with extensive information security expertise, including security-cleared professionals, and the inability to attract and retain qualified personnel could harm the business.
No assurance that securities will continue to be listed on Nasdaq, with risks of delisting due to non-compliance with listing requirements (e.g., minimum bid price, market value).
A 'short squeeze' due to sudden demand exceeding supply could lead to extreme price volatility in common stock.
Common stock price may be volatile, leading to potential loss of investment.
Potential future sales of common stock pursuant to registration rights and Rule 144 may depress the market price.
Future offerings of debt or preferred equity securities could adversely affect the market price of common stock and dilute ownership.
Immediate and substantial dilution may be experienced as a result of current and future equity offerings.
Failure to maintain proper and effective internal control over financial reporting could impair the ability to produce accurate and timely financial statements.
As a cybersecurity provider to government clients, the company is subject to heightened data protection obligations, and any compliance failure could result in significant penalties and loss of client trust.
FINRA sales practice requirements may limit a stockholder's ability to buy and sell common stock.
Changes in government contracting regulations, procurement preferences, or small business set-aside policies could reduce contract opportunities.
Accusations of intellectual property infringement by third parties, regardless of accuracy, could result in significant costs and harm the business.
Insurance policies may not adequately protect from all business risks, leaving the company exposed to significant uninsured liabilities.
Anti-takeover provisions in the charter and bylaws, as well as Delaware law, could impair a takeover attempt.
Historical management team has limited experience managing a public company, leading to significantly increased costs.
Qualifying as an 'emerging growth company' and 'smaller reporting company' may make securities less attractive to investors due to certain disclosure exemptions.
Unanticipated changes in effective tax rates or adverse outcomes from examination of tax returns could adversely affect results of operations and financial condition.
Changes in tax laws or regulations (e.g., OBBBA, Pillar Two accord) could materially adversely affect the business.
Ability to use certain tax attributes (e.g., federal net operating loss carryforwards) may be subject to limitation.
Macroeconomic conditions, including inflation, rising interest rates, and economic uncertainty, could adversely affect business, client budgets, and cost structure.
If securities or industry analysts do not publish research or publish negative reports, share price and trading volume could decline.

Future Outlook

The company expects to incur continued, significant operating losses for the next few years. Management plans to improve operations to generate positive cash flows and register shares of its common stock to undertake a public offering to raise additional capital. It is believed that the valuation and liquidity from a public offering will provide a mechanism for holders of convertible notes and preferred stockholders to convert their securities into common stock, thereby reducing the company's overall leverage and debt service requirements.

Management Comments

"We attribute this decrease in the revenues in 2025 compared to 2024 to delayed start dates of new federal, state and local contracts and the company's focus on more profitable business."
"We believe that our current cash position, access to the capital markets and cash flow generated from operations should be sufficient for our operating requirements through the next several fiscal years."
"Management's plan is to continue improving operations to generate positive cash flows and register shares of its common stock in order to undertake a public offering to raise additional capital."
"Management believes that the valuation and liquidity brought by a public offering of its securities will allow holders of convertibles notes, and convertible preferred stockholders the mechanism to convert their securities into common stock that will reduce the Company's overall leverage and debt service requirement."
"Management does not believe that there are any litigation or claims that would have a material adverse effect on the business, or the consolidated financial statements of the Company as of December 31, 2025."

Industry Context

StockSavvy.ai notes that Cycurion operates in a highly competitive and fragmented cybersecurity and IT solutions market, facing larger, better-resourced competitors and specialized firms. The company's focus on government clients exposes it to unique funding and regulatory risks, while its strategic shift towards AI-enhanced platforms like ARx and Cyber Shield aligns with broader industry trends in advanced threat detection and managed security services. The announced Memorandum of Understanding to acquire Kustom Entertainment's video-solutions division indicates a diversification into public safety technology, potentially leveraging existing government client relationships and expanding its service portfolio.

Comparison to Industry Standards

The company competes with large, well-established defense and IT contractors, specialized cybersecurity firms, cloud service providers, and managed security service providers, many of whom possess significantly greater financial, technical, and marketing resources, broader name recognition, and larger installed bases of government contracts and clearances.
The cybersecurity landscape is characterized by rapidly changing technologies and evolving threats, requiring constant improvement and timely innovation. Cycurion's ability to maintain competitiveness against larger players with more extensive R&D budgets is a continuous challenge.
The company's AI-enhanced ARx platform and Cyber Shield Managed Security Services Platform are at an early stage of market adoption, contrasting with more mature and widely adopted solutions offered by established industry leaders.
Cycurion's reliance on a concentrated client base (64.5% of revenue from four largest customers) is higher than typical for diversified IT service providers, increasing vulnerability to client-specific risks.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Board Member	NA	Irving Minnaker	April 9, 2025	Appointment to increase the size of the board of directors.
Chief Executive Officer	NA	L. Kevin Kelly	December 1, 2024	Employment agreement commenced.
Chief Financial Officer	NA	Alvin McCoy III	January 1, 2025	Employment agreement commenced.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Bylaws Amendment	The board of directors amended and restated the Amended and Restated Bylaws to conform them to the provisions in the Second Amended and Restated Certificate of Incorporation and certain provisions of the Delaware General Corporation Law with respect to the election of directors.	August 28, 2025	Aims to ensure consistency with corporate charter and Delaware law regarding director elections, potentially streamlining governance processes.
Equity Incentive Plan Expansion	Upon approval by a majority consenting stockholders, the number of authorized shares issuable under the 2025 Equity Incentive Plan was increased from 10,000,000 to 25,000,000 shares of Common Stock.	September 29, 2025	Provides more flexibility for equity compensation to attract and retain talent, but could lead to further dilution for existing shareholders.
Preferred Stock Lock-up Waiver	The board of directors waived the Series A Convertible Preferred Stock lock-up restrictions, which previously commenced on February 14, 2025. This allows holders to convert preferred stock into common stock, potentially saving approximately $120,000 in annual stock or cash dividend payments.	September 25, 2025	Aims to strengthen the balance sheet by reducing preferred stock dividend costs, but could increase the common stock float and potentially exert downward pressure on the share price.
Insider Trading Policy Amendment	The board of directors amended and restated the Company's Insider Trading Policy to clarify language around trading windows and blackout periods.	November 14, 2025	Enhances compliance with insider trading regulations and promotes ethical conduct among directors, officers, and employees.

Legal Proceedings

The company may be a party to litigation or claims arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, intellectual property disputes, and other business matters.
Management believes that the outcome of such known matters will not have a material adverse effect on the company's financial condition and results of operations as of December 31, 2025.

Related Party Transactions

A promissory note was entered into with Western Acquisition Ventures Sponsor, LLC (the 'Sponsor') on September 20, 2024, for $230,000, with a 10% interest rate, payable upon the consummation of the Business Combination. The full $255,556 was borrowed with a $25,556 discount.
Personal guarantees were made by Emmit McHenry, Kurt McHenry, and Alvin McCoy III (officers and stockholders) in support of the Main Street Bank Loan and Security Agreement.
Axxum purchased an AT&T contract relationship from Archura, LLC, a company owned by Emmit McHenry and Kurt McHenry. Total sales from these purchase orders were $99,653 for 2025 and $119,279 for 2024.
Loans issued to directors in 2023 and 2024 had a balance of $123,650 as of December 31, 2025 (down from $148,088 in 2024), with weighted average interest rates of 24.0% for 2023 loans and 24.0% for 2024 loans. As of December 31, 2025, loans were only to one director.

Stakeholder Impact

Shareholders face significant dilution risk from future equity issuances, warrant exercises, and convertible note conversions. The stock may experience extreme price volatility due to 'short squeeze' dynamics, and there is a risk of losing all or part of their investment due to going concern doubt and delisting risk. A special dividend was distributed in December 2025.
Employees, particularly senior management, received retention packages. The company's future performance depends on its ability to attract and retain qualified cybersecurity personnel in a highly competitive labor market. A strategic business reorganization was announced in February 2026, which could impact employees.
Customers may experience delays in contract awards and revenue recognition due to federal funding disruptions. Cybersecurity breaches could damage trust. New contracts and expanded partnerships aim to improve service offerings and expand the customer base.
Creditors are exposed to the company's high level of indebtedness and debt service obligations. The conversion of debt to preferred equity (Series G) aims to strengthen the balance sheet, but some loans are in default (e.g., RPA Loan, SLG Loan Payable).

Next Steps

Continue improving operations to generate positive cash flows.
Register shares of common stock for a public offering to raise additional capital.
Finalize the accounting for the SLG Innovation, Inc. business combination by March 31, 2026.
Complete the acquisition of the video-solutions division of Kustom Entertainment, Inc. (MOU signed January 22, 2026).
Implement strategic business reorganization announced February 11, 2026.
Issue up to 3,314,920 shares of common stock upon exercise of certain common stock purchase warrants, following stockholder approval on March 19, 2026.
Continue to deliver AI-powered IT and cybersecurity assessment services for a major county government (initiated September 2025).
Conduct a three-part webinar series with NACCHO designed to empower healthcare organizations (announced October 30, 2025).
Generate approximately $1.35 million in combined revenue in 2026 from new contract awards announced March 25, 2026.

Key Dates

Date	Description
October 12, 2017	Cycurion, Inc. (then KAE Holdings, Inc.) was incorporated in Delaware.
November 22, 2017	Axxum Technologies LLC was acquired, and a revolving line of credit and loan and security agreement were procured by Axxum.
April 3, 2019	Cloudburst Security LLC was acquired.
July 14, 2020	Corporate name changed from KAE Holdings, Inc. to Cyber Secure Solutions, Inc.
July 16, 2020	Cycurion executed an EIDL Loan for $150,000.
September 30, 2020	SLG Innovation executed an EIDL Loan for $150,000.
February 24, 2021	Corporate name changed to Cycurion, Inc.
September 2021	Cycurion Innovation, Inc. was formed in connection with the acquisition of assets from Sabres Security Ltd.
January 11, 2022	Business Combination Marketing Agreement with A.G.P. was entered, and the PIPE Subscription Agreement for $3.76 million closed.
March 22, 2022	The company issued subordinated convertible promissory notes with a principal value of $526,315.
November 21, 2022	The Agreement and Plan of Merger with Western Acquisition Ventures Corp. was signed.
November 22, 2022	The company issued $2,777,778 in promissory notes and warrants to three unaffiliated investors.
April 25, 2023	A Term Sheet between RCR Technology Corporation and Cycurion, Inc. was entered.
April 29, 2023	A unidirectional letter of intent (SLG LOI) with SLG Innovation, Inc. was executed.
December 1, 2024	Employment agreement with L. Kevin Kelly, Chief Executive Officer, commenced.
January 1, 2025	Employment agreement with Alvin McCoy III, Chief Financial Officer, commenced.
February 14, 2025	The business combination and transactions with Western Acquisition Ventures Corp. were completed, and Western was renamed Cycurion, Inc. Seward & Kissel LLP Pre-Funded Warrant was issued.
March 31, 2025	The company entered into a Management Services Agreement with SLG Innovation, Inc. and a Release Agreement with Ed Burns, gaining control of SLG as a VIE.
April 7, 2025	The Equity Purchase Agreement with Yield Point NY LLC was entered, and the Yield Point Pre-Funded Warrant and Registration Rights Agreement were issued.
April 8, 2025	Cycurion announced an expanded partnership with Journal Technologies and a $22 million multi-year contract award.
April 9, 2025	Irving Minnaker was appointed to the board of directors.
April 29, 2025	Cycurion announced a $6 million contract award by a major municipal agency.
July 2, 2025	The company announced a partnership with AgileBlue, an AI-powered security operations platform provider.
July 10, 2025	The company announced its diamond level partnership with the National Association of County and City Officials (NACCHO).
August 7, 2025	The company entered into a memorandum of understanding with iQSTEL Inc. for a stock-for-stock exchange.
August 12, 2025	The company entered into exchange agreements with Alpha Capital Anstalt, M2B Funding Corp., ADI Funding, Deltennium, Osher Capital, Lexi London, and ILE Associates to exchange debt for Series G Convertible Preferred Stock.
August 28, 2025	The company's board of directors amended and restated the Amended and Restated Bylaws.
September 2, 2025	The company entered into a stock-for-stock exchange agreement with iQSTEL Inc.
September 10, 2025	The company announced an additional $4.6 million in new contracts, bringing the total backlog to $73.6 million.
September 25, 2025	The company's board of directors waived the Series A Convertible Preferred Stock lock-up restrictions. The RCR Technology Corporation transaction was consummated, resulting in the issuance of 248,006 shares of common stock.
September 26, 2025	The company entered into an amendment to the Stock-for-Stock Exchange Agreement with iQSTEL Inc.
September 29, 2025	Stockholders approved an increase in the number of authorized shares issuable under the 2025 Equity Incentive Plan from 10,000,000 to 25,000,000 shares.
October 1, 2025	The Loan and Security Agreement was fully paid off.
October 14, 2025	Nasdaq staff determined to commence proceedings to delist the company's common stock.
October 27, 2025	A one-for-thirty Reverse Stock Split was effected, and shares began trading on a split-adjusted basis.
October 29, 2025	The company announced its selection as an approved vendor under the Florida State Term Contract for Information Technology Staff Augmentation Services.
November 5, 2025	SLG Innovation, Inc. was awarded a $1.1 million contract to modernize legacy data systems.
November 11, 2025	Nasdaq confirmed that the company regained compliance with its minimum bid price requirement, and the delisting hearing was canceled.
November 14, 2025	The company's board of directors amended and restated the Insider Trading Policy.
December 4, 2025	The company entered into a securities purchase agreement with Armistice Capital Master Fund Ltd.
December 5, 2025	The private placement with Armistice Capital Master Fund Ltd. closed, and Armistice Pre-Funded Warrants and Armistice Warrants were entered.
December 11, 2025	The company announced an updated dividend distribution ratio of 0.0180 per share of Common Stock.
December 30, 2025	A special dividend valued at $500,000 in common stock shares was paid to shareholders of record as of December 15, 2025.
January 22, 2026	The company announced a Memorandum of Understanding to acquire the video-solutions division of Kustom Entertainment, Inc.
February 11, 2026	The company announced a strategic business reorganization.
March 19, 2026	A special meeting of stockholders was held, approving the issuance of up to 3,314,920 shares of common stock upon the exercise of certain warrants.
March 25, 2026	The company announced two new contract awards expected to generate approximately $1.35 million in combined revenue in 2026.
March 31, 2026	The annual report on Form 10-K was dated and issued.

Recommendation

sell

The company faces severe financial distress, evidenced by a substantial net loss of $24.06 million, a 14.8% revenue decline, a significant drop in gross profit margin, and a growing accumulated deficit of $26.9 million in 2025. The explicit 'substantial doubt about its ability to continue as a going concern' from both management and the independent auditor is a critical red flag. While the company has secured new contracts and raised capital through financing activities, these efforts appear insufficient to offset the escalating operating losses and debt obligations. The recent Nasdaq delisting notice (though compliance was regained via a reverse stock split) highlights underlying instability. The speculative nature of cryptocurrency investments and the early stage of market adoption for key technology platforms add further uncertainty. Given the severe financial challenges, high operational burn rate, and the explicit going concern warning, a seasoned investor would likely recommend selling the stock to mitigate significant downside risk.

Keywords

Cybersecurity, AI, IT Solutions, Government Contracts, Managed Security Services, Nasdaq Listing, SPAC, Business Combination, Financial Performance, Risk Management, Data Modernization, Public Sector, Software as a Service, SLG Innovation, Western Acquisition Ventures Corp., Going Concern, Reverse Stock Split, Capital Raise

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