CISO Global (CISO) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We will need to raise capital to realize our business plan and growth strategy, the failure of which could adversely impact our operations
2. 02We will need to improve the size and capabilities of our organization, and we may experience difficulties in managing this growth
3. 03We depend on key personnel who would be difficult to replace, and our business plans will likely be harmed if we lose their services or cannot hire additional qualified personnel
4. 04We operate in an industry that is experiencing a shortage of qualified compliance and cybersecurity professionals. If we are unable to recruit and retain key management and technical and sales personnel, our business would be negatively affected
5. 05We depend on independent contractors to provide certain services for which we do not have the expertise internally. Any compromise in the service quality may delay our business processes and cause economic loss
6. 06We have recently acquired multiple businesses. Our growth strategy is driven by successful acquisitions and integration of additional businesses that provide comparable or complementary services
7. 07Our business strategy may impose limitations on our ability to accurately forecast future revenue and operating results
8. 08Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense
9. 09Because we recognize revenue from subscriptions to our solutions over the term of the subscription, downturns or upturns in new business will not be immediately reflected in our operating results
10. 10We provide service level commitments under some of our customer contracts. If we fail to meet these contractual commitments, we could be obligated to provide partial refunds, or our customers could be entitled to terminate their contracts and our business would suffer
11. 11Our business is subject to the risks of warranty claims from real or perceived defects in our solutions or their misused by our customers or third parties and provisions in certain agreements potentially expose us to substantial liability and other losses
12. 12We continue to monitor and manage these risks, but there can be no assurance that our efforts will prevent material adverse impacts on our business
13. 13Our future results may be affected by various legal and regulatory proceedings and legal compliance risks, including those involving intellectual property, governmental regulations, the U.S. Foreign Corrupt Practices Act, and other anti-bribery, anti-corruption, or other matters
14. 14We may be subject to risks from operating internationally
15. 15Our operations in certain emerging markets expose us to political, economic, and regulatory risks
16. 16Adverse economic conditions in the United States may adversely impact our business and operating results
17. 17Breaches of network or information technology security could have an adverse effect on our business
18. 18If we fail to meet our service level obligations under our service level agreements, we may be subject to certain penalties and could lose clients
19. 19The nature of our business involves significant risks and uncertainties that may not be covered by insurance or indemnification
20. 20We indemnify our officers and directors against liability to us and our security holders, and such indemnification could increase our operating costs
21. 21Our industry is highly competitive, and there is no assurance that we will compete successfully
22. 22Our success depends on our ability to protect our intellectual property and our proprietary technologies
23. 23Increasingly complex cybersecurity regulations and standards may have significant impact on our business, and it may require us to substantially invest in our development capabilities to meet compliance requirements and may negatively impact our ability to offer certain services and remain profitable
24. 24We may become subject to disputes, including litigation, that could negatively impact our business, profitability, and financial condition
25. 25If we incur additional debt, we will be subject to restrictive covenants and debt service obligations that could negatively impact our operations
26. 26The preparation of our financial statements involves the use of estimates, judgments, and assumptions, and our financial statements may be materially affected if our estimates prove to be inaccurate
27. 27The auditor’s opinion on our audited consolidated financial statements for the year ended December 31, 2024, included in this annual report on Form 10-K, contain an explanatory paragraph relating to our ability to continue as a going concern

Risks Related to our Common Stock

1. 28The market price of our common stock is volatile and may fluctuate in a way that is disproportionate to our operating performance
2. 29Future sales of shares of our common stock by existing stockholders could depress the market price of our common stock
3. 30Provisions in our certificate of incorporation, our by-laws, and Delaware law might discourage, delay, or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock
4. 31Our Board of Directors is expressly authorized to make, alter, or repeal our by-laws by majority vote, while such action by stockholders would require a super majority vote
5. 32FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock
6. 33If we issue additional shares in the future, it will result in a dilution of our existing stockholders
7. 34We are eligible to be treated as an “emerging growth company,” as defined in the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors
8. 35Our directors, a former director and executive officers beneficially own a substantial majority of our outstanding capital stock and will have the ability to control our affairs
9. 36Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock
10. 37We must continue to maintain a minimum closing bid price over $1.00 per share pursuant to Nasdaq Listing Rule 5810(c)(3)(A). If our closing bid price falls below $1.00 per share for more than 30 consecutive trading days, we may again be deemed noncompliant with Nasdaq’s continued listing requirements
11. 38We filed a definitive proxy statement on March 5, 2025 for an annual meeting to be held on April 25, 2025 to regain compliance with the applicable Nasdaq Listing Rules
12. 39Following a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve
13. 40We do not intend to pay dividends on our common stock
14. 41Our business could be negatively impacted by stockholder activism
15. 42Our share price may be volatile, and you may be unable to sell your shares