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What changed in CLOUDASTRUCTURE, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CLOUDASTRUCTURE, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+265 added−222 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in CLOUDASTRUCTURE, INC.'s 2025 10-K

265 paragraphs added · 222 removed · 130 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOther of our customers include the following, with the approximate percentage of revenue generated by each as of December 31, 2024, noted next to their names: ● Greystar Real Estate Partners* – 1% ● Cushman & Wakefield* – 2% ● FPI Management, Inc.* – 1% ● BH Management Services, LLC* – 1% ● Avenue5 Residential, LLC* – 11% ● Federal Capital Partners – 2% ● CONAM Management – 6% ● The Wolff Company – 6% ● Wingate – 9% ● The Habitat Company – 1% ● American Landmark Apartments – 2% ● AJ Capital Partners – 1% ● Fairfield Properties – 9% ● MBK Rental Living – 1% ● SunRoad Enterprises – 7% ● RVMP – 7% ● The Breeden Company – 2% ● Gold Crown Management, Inc. – 3% *Top 10 property management company on the National Multifamily Housing Council’s 2024 NMCH 50 list. 13 Select Customer Accolades “Our package thefts have disappeared almost entirely, which is amazing!” —Zahra Alhisnawi, CONAM “We are able to stop a crime if it’s in progress!” —Britney Kalberer, VP Kalberer Properties “...A gate was damaged multiple times.
Biggest changeOther of our customers include the following, with the approximate percentage of revenue generated by each as of December 31, 2025, noted next to their names: ● Greystar Real Estate Partners* – 5% ● Cushman & Wakefield* – 1% ● Avenue5 Residential, LLC* – 2% ● Federal Capital Partners – 6% ● CONAM Management – 4% ● The Wolff Company – 2% ● Wingate – 4% ● Fairfield Properties – 4% ● SunRoad Enterprises – 4% ● RVMP – 17% ● The Breeden Company – 2% ● Gold Crown Management, Inc. – 2% ● Maiker Housing Partners – 3% ● Amurcon – 2% ● Pacific Urban Investors – 2% *Top 10 property management company on the National Multifamily Housing Council’s 2025 NMCH 50 list. 15 Select Customer Accolades “Our package thefts have disappeared almost entirely, which is amazing!” —Zahra Alhisnawi, CONAM “We are able to stop a crime if it’s in progress!” —Britney Kalberer, VP Kalberer Properties “...A gate was damaged multiple times.
In our experience, these markets are close-knit and relationship-based, with sales being highly reliant on word-of-mouth recommendations and customer testimonials. Larger property management firms in these markets are very protective of their reputations, and often require a meaningful amount diligence before selecting new, significant vendors.
In our experience, these markets are close-knit and relationship-based, with sales being highly reliant on word-of-mouth recommendations and customer testimonials. Larger property management firms in these markets are very protective of their reputations and often require a meaningful amount of diligence before selecting new, significant vendors.
We operate our services through both Cloudastructure owned facilities and third-party facilities ( e.g. , Amazon Web Services and Google Cloud Platform). Our machine learning software can see across countless cameras more efficiently than humans ever could. Next, our Cloud-based system indexes objects and faces in a customer’s surveillance video.
We operate our services through both Cloudastructure-owned facilities and third-party facilities (e.g., Amazon Web Services and Google Cloud Platform). Our machine learning software can see across countless cameras more efficiently than humans ever could. 9 Next, our Cloud-based system indexes objects and faces in a customer’s surveillance video.
Liability is limited, with us and our affiliates not responsible for any indirect, incidental, punitive, special, or consequential damages, and total liability is capped at fees paid in the preceding 12 months. We make no warranties whatsoever regarding the services provided, including any implied warranties of merchantability or fitness for a particular purpose.
Liability is limited, with us and our affiliates not responsible for any indirect, incidental, punitive, special, or consequential damages, and total liability is capped at fees paid in the preceding 12 months. We make no warranties regarding the services provided, including any implied warranties of merchantability or fitness for a particular purpose.
Similarly, we source cameras and speakers primarily from Shenzhen Sunell Technology Corporation, but there are a large number of suppliers from whom we could source for these cameras and speakers should we have to source from alternative providers for any reason. Strategic Acquisitions Our core focus is to grow Cloudastructure organically.
Similarly, we source cameras and speakers primarily from Shenzhen Sunell Technology Corporation, but there are a large number of suppliers from whom we could source for these cameras and speakers should we have to source from alternative providers for any reason. 17 Strategic Acquisitions Our core focus is to grow Cloudastructure organically.
Intellectual Property We do not have any patents or trademarks on which our business relies. We have engaged intellectual property counsel and pursue intellectual property filings that we and our counsel deem appropriate. We rely on confidentiality procedures, contractual commitments, and other legal rights to establish and protect our intellectual property.
Intellectual Property We do not have any patents or trademarks on which our business relies. We have engaged intellectual property counsel and pursue intellectual property filings that we and our counsel deem appropriate. 18 We rely on confidentiality procedures, contractual commitments, and other legal rights to establish and protect our intellectual property.
From time to time we may use our website as a distribution channel for material company information, accordingly investors should monitor our website in addition to following our press releases and SEC filings. 16
From time to time we may use our website as a distribution channel for material company information, accordingly investors should monitor our website in addition to following our press releases and SEC filings.
For SunRoad, pricing is structured around an annual commitment, with services prepared and prepaid on an annual basis, and similarly, either party may terminate the agreement upon thirty days’ written notice without penalty. Additionally, we may terminate the agreement if SunRoad fails to pay fees or becomes insolvent.
For SunRoad, pricing is structured around an annual commitment, with services prepared and prepaid on an annual basis, and similarly, either party may terminate the agreement upon 30 days’ written notice without penalty. Additionally, we may terminate the agreement if SunRoad fails to pay fees or becomes insolvent.
Our Reporting Segment As of December 31, 2024, we have organized our operations into one reporting segment, focused on cloud-based AI video surveillance and remote guarding security services, based on the way we organize and evaluate our business internally. Our Business Model We operate under a Cloud services delivery model.
Our Reporting Segment As of December 31, 2025, we have organized our operations into one reporting segment, focused on cloud-based AI video surveillance and remote guarding security services, based on the way we organize and evaluate our business internally. Our Business Model We operate under a Cloud services delivery model.
For example, “animal” or “person” or “vehicle.” Enabling our customer search surveillance videos by tag. For example, a customer can search by “person” and see only surveillance videos with people in them. 5 License Plate Reading Our License Plate Reading technology reads license plates and then we can search surveillance videos for those license plates.
For example, “animal” or “person” or “vehicle.” Enabling our customer search surveillance videos by tag. For example, a customer can search by “person” and see only surveillance videos with people in them. 6 License Plate Reading Our License Plate Reading technology reads license plates and then we can search surveillance videos for those license plates.
Overview of our Business and Operations Our solutions centralize the management of video surveillance in a collection of servers that host our software and infrastructure and can be accessed over the internet (the “Cloud”). Our Cloud-based model allows customers to scale geographically over multiple locations without complicated or potentially insecure network architectures.
Overview of Our Business and Operations Our solutions centralize the management of video surveillance in a collection of servers that host our software and infrastructure and can be accessed over the internet (the “Cloud”). Our Cloud-based model allows customers to scale geographically over multiple locations and standardize their security without complicated or potentially insecure network architectures.
However, we may selectively evaluate strategic acquisition opportunities that would allow us to expand our footprint, broaden our client base and deepen our product and service offerings. We believe that there are meaningful synergies that result from acquiring small companies that provide unique solutions and opportunities for the Company and our clients.
However, we may selectively evaluate strategic acquisition opportunities that would allow us to expand our footprint, broaden our client base and deepen our product and service offerings. We believe there can be meaningful synergies that result from acquiring small companies that provide unique solutions and opportunities for the Company and our clients.
We allow cancellation of our services at any time unless a three-year contract is signed, in which case penalties occur. Specifically, for CONAM, our agreement operates on a month-to-month basis and may be terminated by either party upon thirty days’ written notice. Immediate termination is possible under circumstances like non-payment or insolvency.
We allow cancellation of our services at any time unless a 3-year contract is signed, in which case penalties occur. Specifically, for CONAM, our agreement operates on a month-to-month basis and may be terminated by either party upon 30 days’ written notice. Immediate termination is possible under circumstances like non-payment or insolvency.
These groups are looking for cloud-based advanced AI and remote guarding services to increase the security of their properties and improve the overall tenant experience. Security is often one of the most frequently cited problems at multi-family properties as it can lead to higher costs from increased vacancy rates, vandalism, and rising insurance rates.
These groups are looking for cloud-based advanced AI and remote guarding services to increase the security of their properties and improve the overall tenant experience. Security is often one of the most frequently cited problems at multi-family properties as it can lead to higher costs from increased vacancy rates, poor reviews from residents, and rising insurance rates.
Principal competitive factors important to us include price, product features, relative price/performance, product quality and reliability, design innovation, a strong third-party software and accessories ecosystem, marketing and distribution capability, service and support and corporate reputation. Our Customer Base We focus on selling our products and services in the multifamily and commercial property management markets.
Principal competitive factors important to us include price, product features, relative price/performance, product quality and reliability, design innovation, a strong third-party software and accessories ecosystem, marketing and distribution capability, service and support and corporate reputation. 14 Our Customer Base We focus on selling our products and services in the multi-family and commercial property management markets.
The technology also possesses directional awareness, so for example, if a customer wishes to only receive an alert when someone enters the pool or enters a parking garage afterhours, they can customize and reduce the number of alerts they receive.
The technology also possesses directional awareness, so for example, if a customer wishes to only receive an alert when someone enters the pool or enters a parking garage after hours, they can customize and reduce the number of alerts they receive.
In the ordinary course of business we and customers using our solutions access, collect, store, analyze, transmit and otherwise process certain types of data, including personal information, which subjects us and our customers to certain privacy and information security laws in the United States and internationally, including, for example, the California Consumer Privacy Act (the “CCPA”), which took effect January 1, 2020, and the California Privacy Rights Act (the “CPRA”) which took effect January 1, 2023, and which significantly amended the CCPA, and imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data and imposes significant data privacy and potential statutory damages related to data protection for the data of California residents.
In the ordinary course of business, we and customers using our solutions access, collect, store, analyze, transmit and otherwise process certain types of data, including personal information, which subjects us and our customers to certain privacy and information security laws in the United States and internationally, including, for example, the California Consumer Privacy Act (the “CCPA”), and the California Privacy Rights Act (the “CPRA”), which significantly amended the CCPA and imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data, and significant data privacy and potential statutory damages related to data protection for the data of California residents.
We operated as a small Silicon Valley startup until early 2021 when we raised over $35 million in funding under Regulation A of the Securities Act of 1933, as amended (the “Securities Act”). With these funds we quickly built a sales, marketing and support structure and achieved a degree of early success in the property management space.
We operated as a small Silicon Valley startup until early 2021 when we raised over $35 million in funding under Regulation A of the Securities Act. With these funds, we quickly built a sales, marketing, and support structure and achieved a degree of early success in the property management space.
Disputes are resolved through arbitration in San Francisco under JAMS rules, though provisional remedies may be sought in court. 14 Subscription Agreement The terms of our subscription agreement stipulates that any disputes will be resolved through binding arbitration, with both parties waiving the right to a jury trial.
Disputes are resolved through arbitration in San Francisco under JAMS rules, though provisional remedies may be sought in court. 16 Subscription Agreement The terms of our subscription agreement stipulate that any disputes will be resolved through binding arbitration, with both parties waiving the right to a jury trial.
If the customer feels that the service is not meeting agreed-upon levels, they may notify the Company, which will have 30 days to remedy the situation. If unresolved, the customer will not be responsible for fees from the time of notice until the issue is resolved.
If the customer feels that the service is not meeting agreed-upon levels, they may notify us, and then we have 30 days to remedy the situation. If unresolved, the customer will not be responsible for fees from the time of notice until the issue is resolved.
Inc., Exxact Corporation, and Newegg Commerce, Inc., but there are a large number of other suppliers from whom we could source these computers should we have to source from alternative providers for any reason.
To date, we have bought computers primarily through Amazon.com Inc., Exxact Corporation, and Newegg Commerce, Inc., but there are a large number of other suppliers from whom we could source these computers should we have to source from alternative providers for any reason.
Any returns are subject to a 20% restocking charge, and late payments incur interest at a rate of 5% per month. Our Employees As of December 31, 2024, we had 16 full-time employees and two part-time employees.
Any returns are subject to a 20% restocking charge, and late payments incur interest at a rate of 5% per month. Our Employees As of December 31, 2025, we had 52 full-time equivalent employees and 2 part-time employees.
Suppliers We currently utilize third-party suppliers of standard, off-the-shelf computers onto which we install software to turn them into our cloud video recorders. To date, we have bought computers primarily through Amazon.com.
Suppliers We currently utilize third-party suppliers of standard, off-the-shelf computers onto which we install software to turn them into our cloud video recorders.
Our Competition Entities with competing solutions include: Avigilon (a subsidiary of Motorola Solutions, Inc. and our primary competitors in the multi-family space), Milestone Systems A/S (a Canon Inc. subsidiary), Verkada, Inc., Tyco Integrated Security LLC (a business unit of Johnson Controls International plc) and Stealth Monitoring, Inc.
Our Competition Entities with competing solutions include: Avigilon (a subsidiary of Motorola Solutions, Inc.), Milestone Systems A/S (a Canon Inc. subsidiary), Verkada, Inc., Tyco Integrated Security LLC (a business unit of Johnson Controls International plc) and ECam (which recently purchased Stealth Monitoring, Inc.).
Based on internal data comparing the total number of actual threatening activity alerts received by our Remote Guards, against all potentially suspicious and threatening activity alerts received by our Remote Guards, on average, from 2023 to the date of this Form 10-K, our Remote Guarding services deterred over 97% of all threatening activity for our customers.
Based on internal data comparing the total number of actual threatening activity alerts received by our Remote Guards, against all potentially suspicious and threatening activity alerts received by our Remote Guards, our Remote Guarding services deterred an average of over 98% of all threatening activity for our customers in 2025.
Now that we have landed five of the top 10 property management firms (based on National Multifamily Housing Council’s 2024 NMCH 50 list) as clients, as well as many mid-tier property management firms, our strategy is to expand our relationships with these accounts with the goal of becoming the standardized AI security solution across their entire portfolios. 12 For the year ended December 31, 2023, SunRoad Enterprises accounted for approximately 18%, and CONAM Management accounted for approximately 9% of our revenues, respectively.
Now that we have landed 6 of the top 10 property management firms (based on National Multifamily Housing Council’s 2025 NMCH 50 list) as clients, as well as many mid-tier property management firms, our strategy is to expand our relationships with these accounts with the goal of becoming the standardized AI security solution across their entire portfolios.
With a technological solution that use AI, machine learning and digitization of data, Cloudastructure is capitalizing on this growing market need for an end-to-end centralized security system.
With a technological solution that uses AI, machine learning and digitization of data, Cloudastructure is capitalizing on this growing market need for an end-to-end centralized security system by expanding into vertical markets such as construction, transportation and logistics, and critical infrastructure.
Other Specialized Features Our products and services employ advanced technology, such as: · AI and machine learning to simultaneously decrease false positives and false negatives, improving overall accuracy; · Lower light, lower contrast and lower resolution computer vision abilities; · persistent computer vision, whereby previous and future frames provide context for the analysis of the current frame; · Increased granularity in search sensitivity on a per object basis; and · Reducing latency for real time operation like alerts for our Remote Guarding services. 9 Our Product and Service Installation and Delivery Processes Our typical product and service installation and delivery process is as follows: First, we install our custom, on-premises CVR, which is configured to work with a customer’s existing video surveillance cameras, is network secure, and simply requires a power source and ethernet connection.
Other Specialized Features Our products and services employ advanced technology, such as: · AI and machine learning to simultaneously decrease false positives and false negatives, improving overall accuracy; · Lower light, lower contrast and lower resolution computer vision abilities; · Persistent computer vision, whereby previous and future frames provide context for the analysis of the current frame; · Increased granularity in search sensitivity on a per object basis; and · Reducing latency for real-time operation like alerts for our Remote Guarding services.
The CVR replaces any NVR’s (Network Video Recorder) or other recording devices. Our CVR then sends all motion viewed by a customer’s surveillance cameras to our Cloud-based systems.
Our CVR then sends all motion viewed by a customer’s surveillance cameras to our Cloud-based systems.
When the AI detects an event occurring, the Remote Guards are notified. The Remote Guards can then determine if escalation is required. With real-time human intervention, our Remote Guarding service turns video surveillance from a forensic tool, used after a crime has been committed, into a real time crime prevention tool.
With real-time human intervention, our Remote Guarding service can turn video surveillance from a forensic tool, used after a crime has been committed, into a real time crime prevention tool.
Available Information Holders of our Class A units may obtain copies of our filings with the SEC, free of charge, from the SEC’s website, www.sec.gov, or from our website, www.cloudastructure.com. The contents of our website are solely for informational purposes and the information on our website is not part of or incorporated by reference into this Form 10-K.
The contents of our website are solely for informational purposes and the information on our website is not part of or incorporated by reference into this Form 10-K.
These laws and regulations involve privacy, data protection, intellectual property, competition, consumer protection and other subjects. Although our business is not currently subject to licensing requirements in any of the jurisdictions in which we operate, this does not mean that licensing requirements may not be introduced in one or more jurisdiction in which we operate.
Although our business is not currently subject to licensing requirements in any of the jurisdictions in which we operate, this does not mean that licensing requirements may not be introduced in one or more jurisdiction in which we operate. Any such licensing requirements, if introduced, could be burdensome and expensive or even impose requirements that we are unable to meet.
However, we are not currently utilizing the assets we acquired from these businesses in our core operations.
However, we are not currently utilizing the assets we acquired from these businesses in our core operations. As of the date of this Form 10-K, we have not acquired any other businesses and are not currently pursuing any other acquisitions.
We also believe that our solution is more affordable and easier to use than the various solutions that our competitors offer. Our Remote Guarding service bridges the line between AI and human intelligence. AI has the ability to monitor all cameras at the same time and all of the time, a task from which humans would fatigue.
We believe that our full stack solution is more affordable, offers greater accountability, and is easier to use than the various solutions that our competitors offer. Our Remote Guarding service bridges the line between AI and human intelligence.
If an installer is required (typically for additional cameras, speakers and conduit/cable), we bundle these services using our trusted partners.
If an installer is required (typically for additional cameras, speakers and conduit/cable), we bundle these services using our trusted partners. In terms of hardware, in addition to our CVR, we also sell cameras and speakers, which are often required at each location. 10 Our Market Our market is growing.
As of the date of this Form 10-K, we have contracts in place with five of the top 10 property management companies on the National Multifamily Housing Council’s (“NMHC’s”) 2024 NMHC’s top 50 list (Greystar Real Estate Partners, Avenue5 Residential, LLC, Cushman & Wakefield, BH Management Services, LLC and FPI Management, Inc.).
We went public on the Nasdaq under ticker symbol CSAI in January 2025. As of December 31, 2025, we have contracts with six of the top ten property management companies on the National Multifamily Housing Council’s (“NMHC’s”) 2025 NMHC 50 list—Greystar Real Estate Partners, Asset Living, Avenue5 Residential, LLC, Cushman & Wakefield, FPI Management, Inc., and Bozzuto.
New Product: Mobile Surveillance Trailer Our Mobile Surveillance Trailer solution is a solar and battery powered video surveillance tower with wireless broadband that connects to our Cloud Video Surveillance and Remote Guarding services. 4 Select High-Level Product and Service Features Select high-level features currently available with some of our products and services include: Tagger Our Tagger technology generates tags for every object it can identify in a surveillance video.
New Product: Solar Powered Enclosure Our solar-powered enclosure delivers reliable surveillance in remote locations with limited power and no internet, powering and streaming securely through solar energy and edge-enabled connectivity. 5 Select High-Level Product and Service Features Select high-level features currently available with some of our products and services include: Tagger Our Tagger technology generates tags for every object it can identify in a surveillance video.
Additionally, city and county ordinances for mandated surveillance (such as the laws in Prince George County, Maryland, DeKalb County, Georgia, etc., that require multi-family dwellings to install and maintain 24-hour security cameras) are increasing given the availability, affordability and accessibility of advanced security solution. 11 Cloudastructure contracts with both the ownership and asset management groups of large multi-family properties such as Greystar Real Estate Partners, Avenue5 Residential, LLC, Cushman & Wakefield, BH Management Services, LLC, FPI Management, Inc. and more, each with portfolios of properties in the several hundreds, if not thousands.
Cloudastructure contracts with both the ownership and asset management groups of large multi-family properties such as Greystar Real Estate Partners, Avenue5 Residential, LLC, Cushman & Wakefield, BH Management Services, LLC, FPI Management, Bozzuto, and more, each with portfolios of properties in the several hundreds, if not thousands.
As of the date of this Form 10-K, we are focused on expanding into more of our existing top tier customer locations, acquiring additional customers in the property management (“proptech”) space, and we anticipate entering into additional markets in 2025. 1 Our intelligent AI solution works by identifying objects (faces, license plates, animals, guns, etc.) in video footage so that property managers can quickly search for those objects.
We are currently focused on expanding within our existing top-tier customer locations and acquiring additional customers in the property management (“proptech”) space, and we anticipate continuing to enter into additional new markets in 2026. 2 Our intelligent AI solution works by sorting motion-based footage and subsequently indexing the people, vehicles, and objects (license plates, animals, backpacks, guns, etc.) within that footage.
Our system also employs “supervised learning” technologies, which allows our team and the end users to provide feedback on the face recognition.
Our system also employs “supervised learning” technologies, which allows our team and the end users to provide feedback on facial recognition accuracy. For example, the system can be taught “that’s not Dave, that’s John”, improving accuracy significantly over less advanced systems.
As of the date of this Form 10-K, we have not acquired any other businesses and are not currently pursuing any other acquisitions. 15 Regulatory Environment We are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business.
Regulatory Environment We are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business. These laws and regulations involve privacy, data protection, intellectual property, competition, consumer protection and other subjects.
For example, the system can be taught “that’s not Dave, that’s John”, improving accuracy significantly over less advanced systems. 6 Line Crossing Our Line Crossing technology can “draw” a virtual line across a camera’s field of view, or a zone around any area (e.g. a door) where a customer wants access restricted.
Customers can also switch off this feature for jurisdictions that ban facial recognition technology. 7 Line Crossing Our Line Crossing technology can “draw” a virtual line across a camera’s field of view, or a zone around any area (e.g. a door) where a customer wants to restrict access.
We believe AI security delivers multiple benefits for many property owners, including, without limitation: · Deterring crime and improving overall safety; · Improving occupancy rates and rental rates; and · Reducing onsite guard costs and lowering insurance rates As of the date of this Form 10-K, we are the only seamless, cloud-based, AI surveillance and Remote Guarding solution on the market of which we are aware.
We believe AI security delivers multiple benefits for many property owners, including, without limitation: · Deter crime and improve overall safety by leveraging AI-driven monitoring and rapid-response remote guarding; · Improve occupancy and rental rates by creating a safer, more attractive environment for residents and tenants; and · Reduce losses, lower onsite guard costs, and decrease insurance rates by streamlining security operations and mitigating incidents before they escalate.
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Item 1. Business. Overview Cloudastructure, Inc. (“Cloudastructure,” “we,” “us,” “our” or the “Company”) was formed under the laws of the State of Delaware on March 28, 2003. We provide an award-winning cloud-based artificial intelligence (“AI”) video surveillance and Remote Guarding (as described below) service built on AI and machine learning platforms.
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Item 1. Business. Overview Cloudastructure, Inc. (“Cloudastructure,” “we,” “our,” or “the Company”) is an award-winning innovator in cloud-native, AI-powered security solutions, delivering comprehensive, real-time situational awareness to enterprises to protect people, property, and brand reputation from threats such as theft, vandalism, false liability and violence.
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Our cloud-based solutions allow our customers to provide real-time safety and security solutions for their properties, as well as easily manage security across all of their locations.
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Headquartered in Palo Alto, California, Cloudastructure delivers a full-stack solution—cutting-edge cloud video surveillance, proprietary AI/ML analytics, and a seamless remote guarding platform with accompanying services—that transforms security from a reactive toolkit into a proactive system capable of stopping crime in real time.
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Additionally, our AI and Remote Guarding services provide a proactive response to crime. Remote guarding combines video surveillance, AI analytics, monitoring centers, and security agents (“Remote Guarding”).
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Our mission is to empower businesses to see and respond to events as they happen, turning video data into actionable intelligence and deterrence into measurable results. By leveraging a cloud-based architecture, we provide organizations with unprecedented scalability, flexibility, and operational insight, without the limitations of traditional, on-premises systems.
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This has the potential to greatly increase value for our customers. 2 The Remote Guards follow a series of protocols which may include announcing through a networked speaker “YOU ARE ON VIDEO SURVEILLANCE WITH A LIVE AGENT AND ARE BEING WATCHED AND RECORDED!”.
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Every camera and alert is woven into a unified digital fabric, giving operators the power to act proactively, mitigate risks, and safeguard communities. Cloudastructure’s solutions encompass a suite of integrated offerings: Cloud Video Surveillance – AI-enhanced video capture and analytics that automate event detection, anomaly recognition, and real-time alerts to reduce loss, liability, and security blind spots.
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These “talk downs” are so effective that we have found that we rarely have to escalate to law enforcement. History and Development of the Company In 2003, a laptop was stolen from our founder Rick Bentley’s office.
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Seamless Remote Guarding Software – Cloud-native orchestration that connects cameras, AI, and operators into one platform, enabling incident triage, standardized response playbooks, and auditable records that strengthen risk management and compliance. Remote Guarding – 24/7 live response by trained security personnel, tightly integrated with AI monitoring for rapid intervention, risk mitigation, and documented response to support insurance and legal defense.
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He went to the landlord to get the surveillance footage, only to discover a cleaning lady had unplugged the surveillance system to plug in a vacuum cleaner. Dubbing the unsolved theft “The Vacuum Effect,” Rick decided surveillance footage needed to go to the cloud.
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Operational Intelligence – Centralized dashboards, reporting, and alerts for property managers and enterprise security teams, driving informed decision-making, streamlined workflows, and better alignment between security operations and overall risk management strategy. Our platform primarily serves multifamily residential and broader property management, with a growing presence in commercial real estate, construction, critical infrastructure, transportation and logistics.
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Our CTO Gregory Rayzman shared this vision for a secure, scalable suite of cloud-based video surveillance, storage, analytics, and monitoring. 3 Google’s release of Tensorflow, a free and open-source software library for machine learning and artificial intelligence, in 2015 added computer vision, AI, and machine learning to Bentley’s and Rayzman’s vision.
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We focus on enterprises that value safety, liability reduction, and operational efficiency, helping them realize clear returns through fewer incidents, stronger compliance, and better protection of their tenants, assets, and brand. 1 Cloudastructure’s competitive advantage lies in its ability to centralize security operations, leveraging AI to monitor activity at scale while seamlessly connecting to a global network of trained security professionals.
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Rayzman hand-selected talented engineers in Silicon Valley in the fields of AI, machine learning and user interface, and designed the Cloudastructure platform to scale, and in 2021, the Company raised funding under Regulation A to hire a marketing, sales and implementation team.
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Unlike traditional hardware-bound systems, our platform eliminates on-site constraints, reduces total cost of ownership, and allows organizations to protect what matters most with precision and confidence. Since our founding, Cloudastructure has maintained an entrepreneurial commitment to innovation, reliability, and customer-centric design, continually expanding its reach while reinforcing its reputation as a trusted partner for modern security challenges.
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Over twenty years later legacy, on-premises video surveillance systems like the system that inspired our founding remain the industry standard. As a result, we believe there is an enormous opportunity to bring innovation and new technology to the field of video surveillance security and eliminate many of the weaknesses of today’s standard surveillance systems.
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By combining state-of-the-art technology, cloud-first infrastructure, and proactive security services, we redefine what it means to protect people and property in an increasingly complex world. Cloudastructure was formed under the laws of the State of Delaware on March 28, 2003.
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We offer our services and support for a monthly subscription fee, requiring no upfront licensing costs or large capital expenditure budgets. We believe that as we add additional AI capabilities, that we will be able to increase pricing power for our Cloud-based solution.
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Our cloud-based solutions allow our customers to provide real-time safety and security across their properties, while efficiently managing operations across all locations. Beyond multifamily, we have seen growth in adjacent verticals, including construction and critical infrastructure, supported by strategic engagements with a leading national builder and a trucking and logistics partner.
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Product: Cameras and Speakers We resell networked, IP-based, cameras and speakers.
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Eliminating static footage enables rapid search, so that property managers can rapidly search for challenges brought to their attention by tenants. Simultaneously, our AI analytics create customizable alerts to anomalous behavior as it is occurring, such as unauthorized access, loitering, and vandalism, and forward that behavior in seconds to live remote guards for further review.
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Remote Guarding Our cloud-based Remote Guarding solution is seamlessly integrated with our AI surveillance system to make remote guarding more efficient and effective. · Our AI monitors all of the cameras all of the time. · We are at the forefront of AI and human intelligence, but recognize when humans should be involved. · When the AI detects an event requiring human intervention, the Remote Guards are notified. · Our Remote Guard solution can then verify if there is an issue and escalate as appropriate, for example: o Our AI monitors all of the cameras all of the time. 7 o o We are at the forefront of AI and human intelligence, but recognize when humans should be involved. o When the AI detects an event requiring human intervention, the Remote Guards are notified. o Our Remote Guard solution can then verify if there is an issue and escalate as appropriate, for example: • Our AI monitors all of the cameras all of the time. • We are at the forefront of AI and human intelligence, but recognize when humans should be involved. • When the AI detects an event requiring human intervention, the Remote Guards are notified. • Our Remote Guard solution can then verify if there is an issue and escalate as appropriate, for example: § Communicating to anyone on site through our system’s speakers; § Escalating the response to customer onsite personnel, if warranted; and § Calling for emergencies services when required. 8 Based on internal data comparing the total number of actual threatening activity alerts received by our Remote Guards, against all potentially suspicious and threatening activity alerts received by our Remote Guards, on average, from 2023 to the date of this Form 10-K, our Remote Guarding services deterred over 97% of all threatening activity for our customers.
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Our Remote Guarding software enables guards to review the footage that created the alert with live view, and, should they determine unwanted activity is occurring, they can “voice down” the perpetrator on a speaker, as well as contact security or law enforcement, thereby providing a proactive response to crime.
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In terms of hardware, in addition to our CVR, we also sell cameras and speakers, which are often required at each location. 10 Our Market Our Cloudastructure solutions fall between the intersection of three very large and growing industries AI, Public Cloud, and Security.
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AI has the ability to monitor all cameras at the same time and all of the time, a task from which humans would fatigue. By filtering out non-essential footage and only sending alerts for unusual or suspicious activity, our guards no longer need to watch every camera constantly.
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The worldwide AI market was estimated at $500 billion in 2023, growing at an annual rate of 19% (Worldwide Semiannual Artificial Intelligence Tracker; February 2022 IDC).
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This focused monitoring allows a single Remote Guard to effectively oversee up to 50 cameras—roughly eight times more than the typical six cameras a guard can manage with traditional static surveillance—while maintaining the same level of vigilance and response accuracy.
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According to Gartner Research, the public cloud market was estimated at around $490 billion in 2023, growing at an annual rate of 20.7% (Gartner Forecasts Worldwide Public Cloud End-User Spending to Reach Nearly $500 billion in 2023; Gartner, October 31, 2022).
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How it Works When an alert comes through, our Remote Guards follow a series of protocols, comparing the live view to the recorded footage and utilizing AI analytics to determine confidence levels regarding people and objects.
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The worldwide security market was estimated at $188 billion in 2023, growing at an annual rate of 11 percent (Gartner Identifies Three Factors Influencing Growth in Security Spending; Gartner October 13, 2022). We are primarily focused on the multi-family and commercial property markets.
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If they determine there is a threat, they will hit the mic button on the computer screen and announce via a networked speaker “YOU ARE ON VIDEO SURVEILLANCE WITH A LIVE AGENT AND ARE BEING WATCHED AND RECORDED!” These “talk downs” are so effective that typically, the perpetrator will simply leave.
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According to a 2023 report by Fortune Business Insights, the global proptech market (real estate focused only) is projected to grow from $36.6 billion for 2024 and reach $89.93 billion by 2033, for a compounded annual growth rate of 11.9% during the period ( see PropTech Market Report).
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Less than 1% of cases throughout 2025 were escalated to law enforcement. 3 History and Development of the Company Cloudastructure has built its reputation as a pioneer in AI-driven security through innovation, adaptability, and a commitment to measurable results. In 2020 and 2021, we raised over $30 million through crowdfunding, providing the capital to scale our vision.
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We believe the rapid advancement of AI, machine learning, and digitization of data is fueling much of this growth.
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A request from our first customer in the multifamily sector set us on a path to create the only seamless Remote Guarding software on the market—a solution that has become a defining differentiator for our platform.
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Any such licensing requirements, if introduced, could be burdensome and expensive or even impose requirements that we are unable to meet.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeYou may be diluted by future issuances of preferred stock or additional Class A common stock in connection with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.
Biggest changeThe existence of, and voting rights associated with, our Class B common stock, either alone or in conjunction with certain of the other provisions of our charter could also have the effect of delaying, deterring or preventing a change in our control or make the removal of our management more difficult. 32 You may be diluted by future issuances of preferred stock or additional Class A common stock in connection with our financing arrangements, incentive plans, acquisitions or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.
For example: · others may be able to develop products and services that are similar to our product candidates but that are not covered by the claims of the patents that we own or license; · we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or license; · we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; 22 · others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; · it is possible that our licensors’ pending patent applications will not lead to issued patents; · issued patents that we own or license may be held invalid or unenforceable, as a result of legal challenges by our competitors; · our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; · we may not develop additional proprietary technologies that are patentable; · we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries; · the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; · if enforced, a court may not hold that our patents are valid, enforceable and infringed; · we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; · we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application and obtain an issued patent covering such intellectual property; · we may fail to adequately protect and police our trademarks and trade secrets; and · the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
For example: · others may be able to develop products and services that are similar to our product candidates but that are not covered by the claims of the patents that we own or license; · we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or license; · we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; · others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; · it is possible that our licensors’ pending patent applications will not lead to issued patents; · issued patents that we own or license may be held invalid or unenforceable, as a result of legal challenges by our competitors; · our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; · we may not develop additional proprietary technologies that are patentable; · we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries; · the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; 25 · if enforced, a court may not hold that our patents are valid, enforceable and infringed; · we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; · we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application and obtain an issued patent covering such intellectual property; · we may fail to adequately protect and police our trademarks and trade secrets; and · the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
The expansion of the market for our solutions depends on a number of factors, such as: · the cost, performance and reliability of our products and services and the solutions offered by our competitors; · customers’ perceptions regarding the benefits of cloud-based video surveillance solutions; · public perceptions regarding the intrusiveness of these solutions and the manner in which organizations use biometric and other identity information collected; · public perceptions regarding the confidentiality of private information; · proposed or enacted legislation related to privacy of information; · customers’ satisfaction regarding our cloud-based video surveillance system; and · marketing efforts and publicity regarding our video surveillance solutions.
The expansion of the market for our solutions depends on a number of factors, such as: · the cost, performance and reliability of our products and services and the solutions offered by our competitors; · customers’ perceptions regarding the benefits of cloud-based video surveillance solutions; · public perceptions regarding the intrusiveness of these solutions and the manner in which organizations use biometric and other identity information collected; 21 · public perceptions regarding the confidentiality of private information; · proposed or enacted legislation related to privacy of information; · customers’ satisfaction regarding our cloud-based video surveillance system; and · marketing efforts and publicity regarding our video surveillance solutions.
The public price of our Class A common stock could be subject to wide fluctuations in response to the risk factors described in this Form 10-K and others beyond our control, including: · changes in the industries in which we operate; · variations in our operating performance and the performance of our competitors in general; · actual or anticipated fluctuations in our quarterly or annual operating results; · publication of research reports by securities analysts about us or our competitors or our industry; · the public’s reaction to our press releases, our other public announcements and our filings with the SEC; · our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; · additions and departures of key personnel; · changes in laws and regulations affecting our business; 27 · commencement of, or involvement in, litigation involving us; · changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; · the volume of shares of our Class A common stock available for public sale; and · general economic and political conditions such as recessions, pandemics, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.
The public price of our Class A common stock could be subject to wide fluctuations in response to the risk factors described in this Form 10-K and others beyond our control, including: · changes in the industries in which we operate; · variations in our operating performance and the performance of our competitors in general; · actual or anticipated fluctuations in our quarterly or annual operating results; · publication of research reports by securities analysts about us or our competitors or our industry; · the public’s reaction to our press releases, our other public announcements and our filings with the SEC; 31 · our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; · additions and departures of key personnel; · changes in laws and regulations affecting our business; · commencement of, or involvement in, litigation involving us; · changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; · the volume of shares of our Class A common stock available for public sale; and · general economic and political conditions such as recessions, pandemics, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.
Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing operations. Our estimate as to how long we expect our existing capital to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing operations. 27 Our estimate as to how long we expect our existing capital to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
Failure to do so would continue to have a material adverse effect on our accumulated deficit, would affect our cash flows, would affect our efforts to raise capital and is likely to result in a decline in the value of your investment in our Company. 24 We anticipate sustaining operating losses for the foreseeable future.
Failure to do so would continue to have a material adverse effect on our accumulated deficit, would affect our cash flows, would affect our efforts to raise capital and is likely to result in a decline in the value of your investment in our Company. We anticipate sustaining operating losses for the foreseeable future.
Such announcements could also harm our reputation or the market for our future product candidates, which could have a material adverse effect on our business. 23 If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
Such announcements could also harm our reputation or the market for our future product candidates, which could have a material adverse effect on our business. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
Such litigation could be expensive, time-consuming and could prevent us from selling our products and services, which would significantly harm our ability to grow our business as planned. 20 We rely on other companies to provide certain hardware and software solutions for our products.
Such litigation could be expensive, time-consuming and could prevent us from selling our products and services, which would significantly harm our ability to grow our business as planned. We rely on other companies to provide certain hardware and software solutions for our products.
For example, Virginia recently passed its Consumer Data Protection Act, and Colorado recently passed the Colorado Privacy Act, both of which differ from the CPRA and became effective in 2023. Additional states have since also passed comprehensive privacy laws with additional obligations and requirements on businesses.
For example, Virginia passed its Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act, both of which differ from the CPRA and became effective in 2023. Additional states have since also passed comprehensive privacy laws with additional obligations and requirements on businesses.
If we are not able to raise additional capital when required or on acceptable terms, we may have to: (i) significantly delay, scale back or discontinue the development or commercialization of new products; (ii) seek collaborators for further development and commercialization of our products; or (iii) relinquish or otherwise dispose of some or all of our rights to technologies or the products that we would otherwise seek to develop or commercialize. 26 We have a limited number of customers accounting for a substantial portion of our revenue, and such substantial customer concentration could adversely affect our business, operating results and financial condition.
If we are not able to raise additional capital when required or on acceptable terms, we may have to: (i) significantly delay, scale back or discontinue the development or commercialization of new products; (ii) seek collaborators for further development and commercialization of our products; or (iii) relinquish or otherwise dispose of some or all of our rights to technologies or the products that we would otherwise seek to develop or commercialize. 29 We have a limited number of customers accounting for a substantial portion of our revenue, and such substantial customer concentration could adversely affect our business, operating results and financial condition.
We could in the future have difficulty attracting experienced personnel to our company and may be required to expend significant financial resources in our employee recruitment and retention efforts. We face intense competition for qualified personnel.
We could in the future have difficulty attracting experienced personnel to our company and may be required to expend significant financial resources in our employee recruitment and retention efforts. 20 We face intense competition for qualified personnel.
In addition, the trading volume and price of shares of our Class A common stock may be more volatile and subject to greater fluctuations due to the direct listing method. 30 The direct listing process differs from an initial public offering underwritten on a firm-commitment basis and the impact of awareness of our brand and investor recognition of our Company on the demand for our Class A common stock is unpredictable and our marketing and brand development efforts may not be successful.
In addition, the trading volume and price of shares of our Class A common stock may be more volatile and subject to greater fluctuations due to the direct listing method. 35 The direct listing process differs from an initial public offering underwritten on a firm-commitment basis and the impact of awareness of our brand and investor recognition of our Company on the demand for our Class A common stock is unpredictable and our marketing and brand development efforts may not be successful.
Consequences of such data breaches could result in fines, litigation expenses, costs of implementing better systems, and the damage of negative publicity, all of which could have a material adverse effect on our business operations and financial condition. 17 Our collection, processing, use and disclosure of individually identifiable biometric or other personally identifiable information is subject to evolving and expanding privacy and security regulations.
Consequences of such data breaches could result in fines, litigation expenses, costs of implementing better systems, and the damage of negative publicity, all of which could have a material adverse effect on our business operations and financial condition. 19 Our collection, processing, use and disclosure of individually identifiable biometric or other personally identifiable information is subject to evolving and expanding privacy and security regulations.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or (iv) any action asserting a claim governed by the internal affairs doctrine.
Our charter provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or (iv) any action asserting a claim governed by the internal affairs doctrine.
Large indemnity payments to our directors and officers in excess of any available insurance would materially adversely affect our business, financial condition, and results of operations. 31 General Risks Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A common stock.
Large indemnity payments to our directors and officers in excess of any available insurance would materially adversely affect our business, financial condition, and results of operations. 36 General Risks Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A common stock.
In addition, we do not carry sufficient insurance to compensate us for actual losses from interruption of our business that may occur, and any losses or damages incurred by us could harm our business. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. 32 Item 1B.
In addition, we do not carry sufficient insurance to compensate us for actual losses from interruption of our business that may occur, and any losses or damages incurred by us could harm our business. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. 37 Item 1B.
Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend or eliminate one or more of our research-stage programs, clinical trials or future commercialization efforts, grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, obtain funds through arrangement with collaborators on terms unfavorable to us or pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of our stockholders. 25 Raising additional capital may cause dilution to our existing stockholders.
Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend or eliminate one or more of our research-stage programs, clinical trials or future commercialization efforts, grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, obtain funds through arrangement with collaborators on terms unfavorable to us or pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of our stockholders.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation provides that the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the Exchange Act.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our charter provides that the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the Exchange Act.
If cloud-based video surveillance solutions generally or our solutions specifically do not gain wide market acceptance, we may not be able to achieve our anticipated level of growth and our revenues and results of operations would suffer. 19 Issues raised by the use of artificial intelligence (“AI”) (including machine learning) in our platforms may result in reputational harm or liability.
If cloud-based video surveillance solutions generally or our solutions specifically do not gain wide market acceptance, we may not be able to achieve our anticipated level of growth and our revenues and results of operations would suffer. Issues raised by the use of AI (including machine learning) in our platforms may result in reputational harm or liability.
Sales of a substantial number of our Class A common stock in the public market could cause the price of our shares of Class A common stock to decline, and a decline in the market price for our Class A common stock could impair our ability to raise capital through the future sale of additional equity securities.
Sales of a substantial number of our Class A common stock in the public market could cause the price of our shares of Class A common stock to further decline, which could impair our ability to raise capital through the future sale of additional equity securities.
We may seek additional capital through a variety of means, including through equity, debt financings, or other sources. We may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Raising additional capital may cause dilution to our existing stockholders. We may seek additional capital through a variety of means, including through equity, debt financings, or other sources. We may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation, but there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our charter, but there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
Data privacy remains an evolving landscape, with new regulations coming into effect at both the domestic and international level. For example, various states, such as California, Massachusetts, and others, have implemented similar privacy laws and regulations, such as the California Consumer Privacy Act, which took effect January 1, 2020 (the “CCPA”), and creates new data privacy rights for users.
Data privacy remains an evolving landscape, with new regulations coming into effect at both the domestic and international level. For example, various states, such as California, Massachusetts, and others, have implemented similar privacy laws and regulations, such as the California Consumer Privacy Act (the “CCPA”), which created new data privacy rights for users.
Our amended and restated certificate of incorporation authorizes us to issue shares of Class A common stock and options, rights, warrants and appreciation rights relating to our Class A common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion.
Our charter authorizes us to issue shares of Class A common stock and options, rights, warrants and appreciation rights relating to our Class A common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion.
If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.
If a court were to find either exclusive-forum provision in our charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.
Claims for indemnification by our directors and officers may reduce the amount of money available to us. Our amended and restated certificate of incorporation provides that our directors and officers will be indemnified by us to the fullest extent permitted by Delaware law.
Claims for indemnification by our directors and officers may reduce the amount of money available to us. Our charter provides that our directors and officers will be indemnified by us to the fullest extent permitted by Delaware law.
The likelihood of our creation of a successful business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the growth of a business, operation in a competitive industry, and the continued development of our technology and products.
However, the Company was a development stage company until 2021. The likelihood of our creation of a successful business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the growth of a business, operation in a competitive industry, and the continued development of our technology and products.
We may not be able to compete successfully against current or future competitors, and increased competition may result in price reductions, reduced profit margins, loss of market share and an inability to generate cash flows that are sufficient to maintain or expand the development and marketing of new products or services, any of which would adversely impact our results of operations and financial condition.
We may not be able to compete successfully against current or future competitors, and increased competition may result in price reductions, reduced profit margins, loss of market share and an inability to generate cash flows that are sufficient to maintain or expand the development and marketing of new products or services, any of which would adversely impact our results of operations and financial condition. 22 We may not be as successful as our competitors incorporating AI into our business or adapting to a rapidly changing marketplace.
These rules and regulations will increase our legal and financial compliance costs, make certain activities more time-consuming and costly, and require our management and other personnel to devote a substantial amount of time to compliance initiatives.
These rules and regulations have increased our legal and financial compliance costs, have made certain activities more time-consuming and costly, and require our management and other personnel to devote a substantial amount of time to compliance initiatives.
As a result, we may not be able to accurately forecast the financial impact of an acquisition transaction, including tax and accounting charges. In addition, we may not be able to successfully integrate acquired businesses and may incur significant costs to integrate and support acquired companies. Any of these factors could adversely affect our financial results.
As a result, we may not be able to accurately forecast the financial impact of an acquisition transaction, including tax and accounting charges. In addition, we may not be able to successfully integrate acquired businesses and may incur significant costs to integrate and support acquired companies.
Our business may be adversely impacted by additional leverage in connection with acquisitions. As stated above, we may pursue strategic acquisitions as part of our business strategy. If we are able to identify acquisition candidates, such acquisitions may be financed with a substantial amount of additional indebtedness.
Any of these factors could adversely affect our financial results. 23 Our business may be adversely impacted by leverage in connection with acquisitions. As stated above, we may pursue strategic acquisitions as part of our business strategy. If we are able to identify acquisition candidates, such acquisitions may be financed with a substantial amount of indebtedness.
For the year ended December 31, 2023, SunRoad Enterprises accounted for approximately 18% and CONAM Management accounted for approximately 9% of our revenues, respectively. There are inherent risks whenever a large percentage of total revenue is derived from a limited number of customers.
For the year ended December 31, 2024, SunRoad Enterprises accounted for approximately 18%, Avenue 5 accounted for approximately 11%, and Fairfield Residential accounted for approximately 9% of our total revenues, respectively. There are inherent risks whenever a large percentage of total revenue is derived from a limited number of customers.
We have historically operated at a loss, which has resulted in an accumulated deficit. For the fiscal years ended December 31, 2023 and December 31, 2022, we incurred net losses of approximately $7.04 and approximately $11.4 million, respectively. There can be no assurance that we will ever achieve profitability.
We have historically operated at a loss, which has resulted in an accumulated deficit. For the fiscal years ended December 31, 2025 and December 31, 2024, we incurred net losses of approximately $8.5 million and approximately $6.5 million, respectively. There can be no assurance that we will ever achieve profitability.
Our capital stock as of the date hereof consists of Class A common stock and Class B common stock. Our Class B common stock is entitled to 20 votes per share.
Our common stock consists of Class A common stock and Class B common stock. Our Class B common stock is entitled to 20 votes per share.
These competitive advantages may enable our competition to innovate better and more quickly and to compete more effectively on quality and price, causing us to lose business and profitability. Burgeoning interest in AI may increase our competition and disrupt our business model.
Our competitors may be larger, more diversified, better funded and have access to more advanced technology, including AI. These competitive advantages may enable our competition to innovate better and more quickly and to compete more effectively on quality and price, causing us to lose business and profitability. Burgeoning interest in AI may increase our competition and disrupt our business model.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that are not favorable to us.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that are not favorable to us. 28 We may need additional financing, and if such financing is not available to us or is not available on acceptable terms, we may be limited in our ability to grow our business.
A substantial sale of our Class A common stock by one or more major stockholders, could result in an oversupply of our Class A common stock on Nasdaq and cause the public trading price of our Class A common stock to decline significantly.
Substantial sales of our Class A common stock could result in an oversupply of our Class A common stock on Nasdaq and cause the public trading price of our Class A common stock to decline significantly.
We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting Class A common stock held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting Class A common stock held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter.
We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting Class A common stock held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting Class A common stock held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter. 34 It is possible that some investors will find our Class A common stock less attractive as a result of the foregoing, which may result in a less active trading market for our Class A common stock and higher volatility in our stock price.
The future issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of shares of our Class A common stock, either by diluting the voting power of our Class A common stock if the preferred stock votes together with the Class A common stock as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote, even if the action were approved by the holders of our shares of our Class A common stock. 28 The future issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our Class A common stock by making an investment in the Class A common stock less attractive.
The future issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of shares of our Class A common stock, either by diluting the voting power of our Class A common stock if the preferred stock votes together with the Class A common stock as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote, even if the action were approved by the holders of our shares of our Class A common stock.
Even the perception that such sales may occur could depress the market price of our shares of Class A common stock and could impair our ability to raise capital through the future sale of additional equity securities. As of the date of this Form 10-K, we have 487,677 shares of Class B common stock with super voting rights.
Even the perception that such sales may occur could depress the market price of our shares of Class A common stock and could impair our ability to raise capital through the future sale of additional equity securities.
If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts. Our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase in connection with our ongoing activities.
If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts.
We may need to share our proprietary information, including trade secrets, with our current and future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.
We may need to share our proprietary information, including trade secrets, with our current and future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors. 26 Moreover, third parties may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them from using that technology or information to compete with us.
Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. · Our future funding requirements will depend on many factors, including, but not limited to: · the initiation, progress, timeline, cost and results of our products; · the cost and timing of manufacturing activities; · the effect of competing technological and market developments; · the payment of licensing fees, potential royalty payments and potential milestone payments; · the cost of general operating expenses; and · the costs of operating as a public company.
Our future funding requirements will depend on many factors, including, but not limited to: · the initiation, progress, timeline, cost and results of our products; · the cost and timing of manufacturing activities; · the effect of competing technological and market developments; · the payment of licensing fees, potential royalty payments and potential milestone payments; · the cost of general operating expenses; and · the costs of operating as a public company.
Our failure to comply with any covenants under such indebtedness could result in an event of default that, if not cured or waived, could result in an acceleration of repayment of other existing indebtedness, which in turn could materially and adversely affect our business and results of operations. 21 We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
Our failure to comply with any covenants under such indebtedness could result in an event of default that, if not cured or waived, could result in an acceleration of repayment of other existing indebtedness, which in turn could materially and adversely affect our business and results of operations.
It is possible that some investors will find our Class A common stock less attractive as a result of the foregoing, which may result in a less active trading market for our Class A common stock and higher volatility in our stock price. 29 Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America will be the exclusive forums for certain disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.
Our charter provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America will be the exclusive forums for certain disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.
Risks Related to the Ownership of Our Class A common stock An active trading market for our Class A common stock may not be sustained, and the market price of shares of our Class A common stock may be volatile.
An active trading market for our Class A common stock may not be sustained, and the market price of shares of our Class A common stock may be volatile. Prior to the listing of our Class A common stock in January 2025, there was no public market for shares of our Class A common stock.
If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we develop and commercialize our products and services could be limited and our potential for successfully growing our business could be harmed. 18 Volatility in the trading price of our Class A common stock may also affect our ability to attract and retain qualified personnel.
Additionally, laws and regulations, such as restrictive immigration laws, may limit our ability to recruit outside of the United States. If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we develop and commercialize our products and services could be limited and our potential for successfully growing our business could be harmed.
We have historically incurred losses from operations and, for the fiscal year ended December 31, 2024 we had an accumulated deficit of approximately $40,856,000, and stockholders’ equity of approximately $503,000. Additionally, for the fiscal year ended December 31, 2024, we incurred a net loss of approximately $6,535,000.
We have historically incurred losses from operations. For the fiscal year ended December 31, 2025, we incurred a net loss of approximately $8.5 million and, as of December 31, 2025, we had an accumulated deficit of approximately $49.3 million.
We will be subject to financial reporting and other requirements for which our accounting and other management systems and resources may not be adequately prepared. As a public company, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur as a private company.
As a public company since only January 2025, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur as a private company.
On November 25, 2024, we also entered into an Equity Purchase Agreement (the “Equity Line”) with Atlas Sciences, LLC, a Utah limited liability company (“Atlas”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Atlas will purchase up to an aggregate of $50,000,000 of our Class A common stock over the 24-month term of the Equity Line.
In addition, we have entered into an Equity Purchase Agreement with Atlas Sciences, LLC, a Utah limited liability company (“Atlas”), that gives us the right, subject to the terms and conditions of that agreement, to require that Atlas purchase up to an aggregate of $50.0 million of our Class A common stock. The Equity Purchase Agreement expires November 25, 2024.
The Series 1 Equity Financing, Series 2 Equity Financing and Equity Line will provide us with, and allow us to maintain, stockholders’ equity well in excess of the required minimum under Nasdaq Listing Rule 5505(b) as well as enable us to fund our operations through at least the next twelve months.
We believe our ability to sell additional shares of our Series 2 Preferred stock to Streeterville and our ability to sell shares of our Class A common stock to Atlas and through our agreement with Maxim, in each case subject to the respective terms and conditions of those agreements, will provide us with, and allow us to maintain, stockholders’ equity in excess of the required minimum under Nasdaq Listing Rule 5505(b) as well as enable us to fund our operations through at least the next 12 months.
Since inception we have relied primarily on financing activities to fund our operations, including raising over $35 million in funding in an offering under Regulation A of the Securities Act, and through the sale of preferred stock.
Our failure to generate sufficient revenues, effectively manage expenses or raise additional capital could adversely affect our ability to achieve our intended business objectives. Since inception we have relied primarily on financing activities to fund our operations, including raising over $35 million in funding in an offering under Regulation A of the Securities Act.
Many of members of our management and other key personnel hold equity awards that have vested in part or are exercisable, which could adversely affect our ability to retain these personnel. Personnel may be more likely to leave us if the shares they own or the shares underlying their vested options have significantly appreciated in value.
Volatility in the trading price of our Class A common stock may also affect our ability to attract and retain qualified personnel. Many of members of our management and other key personnel hold equity awards that have vested in part or are exercisable, which could adversely affect our ability to retain these personnel.
This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. We could also become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.
This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
The Company will continue to invest in building out its sales and marketing teams as well as maintain a robust engineering and development team. General and administrative expenses will increase as the cost of maintaining a public company is significantly higher than maintaining a privately held company.
General and administrative expenses will increase as we grow and because the cost of maintaining a public company is significantly higher than maintaining a privately held company.
We derive a significant portion of our revenues from a few major customers. For the year ended December 31, 2024, SunRoad Enterprises accounted for approximately 18%, Avenue 5 accounted for approximately 11%, and Fairfield Residential accounted for approximately 9% of our total revenues, respectively.
We derive a significant portion of our revenues from a few major customers. For the year ended December 31, 2025, Hasta Capital accounted for approximately 17%, RV Mobile Power accounted for approximately 17%, Federal Capitol Partners accounted for approximately 6%, and Greystar accounted for approximately 5% of our revenues, respectively.
Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business.
We do not currently have any debt financing, but we may pursue debt financing to raise capital necessary to fund our operations, particularly if we are unable to sell additional shares of capital stock through the financing arrangements described above. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business.
As a public company, we will also be required to maintain disclosure controls and procedures.
We could also become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources. 24 As a public company, we are also required to maintain disclosure controls and procedures.
Removed
Additionally, laws and regulations, such as restrictive immigration laws, may limit our ability to recruit outside of the United States.
Added
Shares of our Class A common stock were first listed on the Nasdaq Capital Market in January 2025, and the market price of the shares has declined significantly since the initial listing.
Removed
In addition, many of our personnel may be able to receive significant proceeds from sales of our equity in the public markets, which may reduce their motivation to continue to work for us. Any of these factors could harm our business, financial condition and results of operations.
Added
We incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives. We are subject to financial reporting and other requirements for which our accounting and other management systems and resources may not be adequately prepared.
Removed
We may not be as successful as our competitors incorporating AI into our business or adapting to a rapidly changing marketplace. Our competitors may be larger, more diversified, better funded and have access to more advanced technology, including AI.
Added
Our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase in connection with our ongoing activities and growth. The Company will continue to invest in building out its sales and marketing teams as well as maintain a robust engineering and development team.
Removed
Moreover, third parties may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them from using that technology or information to compete with us.
Added
Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Removed
We may need additional financing, and if such financing is not available to us or is not available on acceptable terms, we may be limited in our ability to grow our business.
Added
During 2025, we raised capital through the sale of our preferred stock, which is convertible into our Class A common stock. We also have financing facilities in place that may result in additional sales of our convertible preferred stock and/or Class A common stock. Please see Note 5, Share Capital below for more information.
Removed
Our failure to generate sufficient revenues, effectively manage expenses or raise additional capital could adversely affect our ability to achieve our intended business objectives.
Added
During 2025, we raised additional capital through the sale of shares of our Series 1 Convertible Preferred Stock (the “Series 1 Preferred”) for gross proceeds of $6.3 million and the sale of shares of our Series 2 Convertible Preferred Stock (the “Series 2 Preferred”) for aggregate gross proceeds of $11.0 million.
Removed
On November 25, 2024, we entered into a Securities Purchase Agreement , as amended by Amendment No. 1 to Securities Purchase Agreement, dated January 16, 2025, and Amendment No. 2 to Securities Purchase Agreement, dated January 29, 2025 (the “Series 1 Equity Financing”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”) pursuant to the terms of which we agreed to issue and sell $6,300,000 of newly designated Series 1 Convertible Preferred Stock, par value $0.0001 per share (the “Series 1 Preferred”) and 720,000 pre-delivery shares to Streeterville.
Added
The Series 1 Preferred shares and Series 2 Preferred shares were sold to Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”). Pursuant to the agreement we have in place with Streeterville, we may sell additional shares of our Series 2 Preferred to Streeterville for aggregate gross proceeds of $29.0 million, subject to the terms and conditions of that agreement.
Removed
The Series 1 Equity Financing closed on January 29, 2025.
Added
In February 2026, we entered into an Equity Distribution Agreement with Maxim Group, LLC, a Delaware limited liability company (“Maxim”), that allows us to sell shares of our Class A common stock in an “at-the-market” offering through Maxim, as sales agent, for aggregate gross proceeds of $9.0 million, subject to the terms and conditions of that agreement.
Removed
On March 21, 2025, we entered into a second Securities Purchase Agreement (the “Series 2 Securities Purchase Agreement” or “Series 2 Equity Financing”) with Streeterville pursuant to the terms of which we agreed to issue and sell up to $40,000,000 of newly designated Series 2 Convertible Preferred Stock, par value $0.0001 per share (the “Series 2 Preferred” and, together with the Series 1 Preferred, the “Preferred Stock”) to Streeterville.
Added
Please see Note 5, Share Capital below for more information regarding these various financing arrangements.
Removed
On March 25, 2025, at the initial closing of the Series 2 Equity Financing (the “Closing Date”), we issued and sold 4,500 shares of Series 2 Preferred to Streeterville, for an aggregate purchase price of $4,500,000.
Added
Nasdaq Listing Rule 5505(b)(1) requires that we maintain stockholders' equity of at least $2.5 million for continued listing on the Nasdaq Capital Market. As of December 31, 2025, our stockholders' equity was approximately $8.9 million. However, we cannot be certain that additional funding will be available on acceptable terms, or at all.
Removed
Pursuant to the terms of the Series 2 Securities Purchase Agreement, Streeterville will also have, for a period ending on the later of (i) two years from the Closing Date, and (ii) the date on which it no longer holds any Preferred Stock, the right, but not the obligation, to reinvest up to an additional $4,000,000 into the Company in one or more tranches (of at least $100,000) at its election (the “Reinvestment Right”).
Added
It is possible that we may not be able to satisfy all of the requirements and conditions to allow us to sell additional shares of our capital stock through the financing arrangements described above, including if we are unable to regain compliance with the minimum bid price requirement applicable under Nasdaq rules, as described below.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity. In the ordinary course of our business, we receive, process, use, and store digitally large amounts of data, including customer data as well as confidential, sensitive, proprietary, and personal information.
Biggest changeItem 1C. Cybersecurity. Risk Management and Strategy In the ordinary course of our business, we receive, process, use, and store digitally large amounts of data, including customer data as well as confidential, sensitive, proprietary, and personal information.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. From time to time, we may be party to litigation arising in the ordinary course of business. As of December 31, 2024, we are not subject to any material legal proceedings nor, to the best of our knowledge, are any material legal proceedings pending or threatened against us.
Biggest changeItem 3. Legal Proceedings. From time to time, we may be party to litigation arising in the ordinary course of business. As of December 31, 2025, we are not subject to any material legal proceedings nor, to the best of our knowledge, are any material legal proceedings pending or threatened against us.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNeither our Class B Common stock Holders of Record As of March 26, 2025, there were 9,584 holders of record of our Class A common stock, and six holders of record of our Class B common stock.
Biggest changeHolders of Record As of February 28, 2026, there were 9,584 holders of record of our Class A common stock, and six holders of record of our Class B common stock.
Removed
Unregistered Sales of Equity Securities The following sets forth information regarding all unregistered securities we have issued since December 31, 2021: Regulation A Offering On July 9, 2020, we commenced an offering of units under the exemption from registration provided by Tier 2 of Regulation A under the Securities Act of 1933, as amended (the “Securities Act”).
Added
Unregistered Sales of Equity Securities All unregistered sales of our equity securities since January 1, 2025, have previously been reported by us in Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Issuer Purchases of Equity Securities None. Item 6. [Reserved].
Removed
Each unit consisted of two shares of our Class A common stock and one warrant to purchase one share of Class A common stock for a period of 18 months following the date of issuance.
Removed
As of December 31, 2024, we had issued approximately 12.1 million shares of Class A common stock in our Regulation A offering, including shares issued upon exercise of outstanding warrants, and received cumulative proceeds of approximately $33.1 million, net of issuance costs of approximately $6.1 million, and 4,317 warrants remained outstanding.
Removed
Acquisition Transactions On December 30, 2021, we entered into an Asset Purchase Agreement with Visionful Holding Inc., a Delaware corporation (“Visionful”), and its sole stockholders, pursuant to the terms of which we agreed to acquire substantially all of the assets of Visionful in consideration of our payment $282,662 in cash and the issuance of 48,844 shares of Class A common stock, in a transaction exempt from registration under Section 4(a)(2) of the Securities Act.
Removed
The transaction with Visionful closed on February 4, 2022.
Removed
On July 8, 2022, we entered into an Asset Purchase Agreement with Infrastructure Proving Grounds, Inc., a Delaware corporation (“IPG”), and each of its stockholders, pursuant to the terms of which we acquired substantially all of the assets of IPG in consideration of our payment $250,000 in cash and the issuance of a warrant to purchase up to 3,541,667 shares of our Class A common stock for a period of 10-years at an exercise price of $2.16 per warrant share, subject to a number of milestone achievements and vesting provisions, in a transaction exempt from registration under Section 4(a)(2) of the Securities Act.
Removed
As of September 30, 2024, 750,000 warrant shares have vested under the terms of the warrant. 34 Private Placement In July 2023, we commenced an offering of units in a transaction exempt from registration under Section 4(a)(2) of the Securities Act, and Regulation D, Rule 506(c) promulgated thereunder.
Removed
Each unit consisted of one share of Class A common stock and one warrant to purchase one share of Class A common stock for a period of 18 months following the date of issuance. The purchase price of each unit was $12.00 per unit, and the exercise price of each warrant was $9.00 per warrant share.
Removed
We issued 2,836 units and received cumulative proceeds of approximately $35,000.
Removed
Advisory Agreement On April 25, 2024, we entered into a letter agreement with Maxim Group LLC, a New York limited liability company (“Maxim Group”), pursuant to the terms of which Maxim Group provided us with financial advisory and investment banking services in connection with our direct listing on Nasdaq and in partial consideration for which we issued 145,915 shares of Class A common stock, in reliance on an exemption from registration in reliance Section 4(a)(2) of the Securities Act, to Maxim Partners, LLC, a Delaware limited liability company, and affiliate of Maxim, with unlimited piggyback registration rights.
Removed
Preferred Equity Financings On November 25, 2024, we entered into a Securities Purchase Agreement, as amended by Amendment No. 1 to Securities Purchase Agreement, dated January 16, 2025, and Amendment No. 2 to Securities Purchase Agreement, dated January 29, 2025 (as so amended, the “Series 1 Securities Purchas Agreement” or “Series 1 Equity Financing”), with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), pursuant to which we agreed to issue and sell to Streeterville (i) 6,300 shares of a newly designated series of Series 1 Convertible Preferred Stock, par value $0.0001 per share (“Series 1 Preferred”), for an aggregate purchase price of $6,300,000, and (ii) 720,000 pre-delivery shares, for an aggregate purchase price of $72.00, in a transaction exempt from registration in reliance on Section 4(a)(2) of the Securities Act.
Removed
The Series 1 Equity Financing closed on January 29, 2025.
Removed
On March 21, 2025, we entered into a second Securities Purchase Agreement (the “Series 2 Securities Purchase Agreement” or “Series 2 Equity Financing”) with Streeterville pursuant to the terms of which we agreed to issue and sell up to $40,000,000 of newly designated Series 2 Convertible Preferred Stock, par value $0.0001 per share (the “Series 2 Preferred”) to Streeterville.
Removed
On March 25, 2025, at the initial closing of the Series 2 Equity Financing, we issued and sold 4,500 shares of Series 2 Preferred to Streeterville, for an aggregate purchase price of $4,500,000 in a transaction exempt from registration in reliance on Section 4(a)(2) of the Securities Act and Regulation D, Rule 506(b) promulgated thereunder .
Removed
The foregoing descriptions of the Series 1 Securities Purchase Agreement and Series 2 Securities Purchase Agreement are qualified in their entirety by reference to the Series 1 Securities Purchase Agreement and Series 2 Securities Purchase Agreement, which are filed as Exhibits 10.4 and 10.12, respectively, hereto and incorporated herein by reference herein. Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

26 edited+48 added−37 removed27 unchanged
Biggest changeInvesting Activities Our investing activities have consisted primarily of business combinations and the purchases of assets and equipment. We have invested in assets and equipment to support our headcount growth. Net cash used in investing activities for the year ended December 31, 2024, was approximately $27,000, which was entirely attributable to purchases of fixed assets.
Biggest changeInvesting Activities Net cash used in investing activities was $315,000 for the year ended December 31, 2025, compared to $27,000 for the year ended December 31, 2024. Cash used in investing activities during 2025 primarily related to purchases of property and equipment to support the Company’s operational growth, including investments in technology infrastructure and office equipment.
We believe AI security delivers multiple benefits for many property owners, including, without limitation: · Deterring crime and improving overall safety; · Improving occupancy rates and rental rates; and · Reducing onsite guard costs and lowering insurance rates As of the date of this Form 10-K, we are the only seamless, cloud-based, AI surveillance and Remote Guarding solution on the market of which we are aware.
We believe AI security delivers multiple benefits for many property owners, including, without limitation: 40 · Deterring crime and improving overall safety; · Improving occupancy rates and rental rates; and · Reducing onsite guard costs and lowering insurance rates As of the date of this Form 10-K, we are the only seamless, cloud-based, AI surveillance and Remote Guarding solution on the market of which we are aware.
We do not have any other long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. 41 Emerging Growth Company We are an “emerging growth company,” as defined in the Jump Start Our Business Startups Act of 2012 (“JOBS Act”).
We do not have any other long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. Emerging Growth Company We are an “emerging growth company,” as defined in the Jump Start Our Business Startups Act of 2012 (“JOBS Act”).
Liquidity and Capital Resources Overview From inception we have funded our operations principally through the net proceeds from sales of our capital stock and to a lesser extent from cash flows generated from operating activities. Summary of Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024 and 2023.
Liquidity and Capital Resources Overview From inception we have funded our operations principally through the net proceeds from sales of our capital stock and to a lesser extent from cash flows generated from operating activities. Summary of Cash Flows The following table summarizes our cash flows for the years ended December 31, 2025 and 2024.
As of the date of this Form 10-K, we are focused on expanding into more of our existing top tier customer locations, acquiring additional customers in the property management (“proptech”) space, and we anticipate entering into additional markets in 2025.
As of the date of this Form 10-K, we are focused on expanding into more of our existing top tier customer locations and acquiring additional customers in the property management (“proptech”) space, and we anticipate entering into additional markets in 2026.
The factors listed under “Risk Factors” and “Forward-Looking Statements” in this Form 10-K provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations described in any forward-looking statement. Overview We were formed under the laws of the State of Delaware on March 28, 2003.
The factors listed under “Risk Factors” and “Forward-Looking Statements” in this Form 10-K provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations described in any forward-looking statement. 39 Overview and Recent Developments We were formed under the laws of the State of Delaware on March 28, 2003.
In addition, we expect to incur further costs and expenses associated with being a public company. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
In addition, we expect to continue to incur further costs and expenses associated with being a public company and working to maintain the listing of our Class A common stock on Nasdaq. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
We will remain an emerging growth company for up to the last day of the fiscal year following the fifth anniversary of our direct listing on Nasdaq, or until the earliest of: (i) the last date of the fiscal year during which we had total annual gross revenues of $1.235 billion or more; (ii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iii) the date on which we are deemed to be a “large accelerated filer” as defined under Rule 12b-2 under the Exchange Act.
If we were to subsequently elect to comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act. 47 We will remain an emerging growth company for up to the last day of the fiscal year following the fifth anniversary of our direct listing on Nasdaq, or until the earliest of: (i) the last date of the fiscal year during which we had total annual gross revenues of $1.235 billion or more; (ii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iii) the date on which we are deemed to be a “large accelerated filer” as defined under Rule 12b-2 under the Exchange Act.
Years Ended December 31, ( in thousands ) 2024 2023 Proceeds from issuance of Class A common stock $ 7 $ 387 Registration Statement related costs (692 ) – $ (685 ) $ 387 40 Funding Requirements We anticipate incurring additional losses for the foreseeable future, and we may never become profitable.
Years Ended December 31, ( in thousands ) 2025 2024 Proceeds from issuance of Class A common stock $ 128 $ 7 Proceeds from issuance of Preferred stock 17,250 – Preferred dividends payable 512 – Registration Statement related costs (2,257 ) (692 ) $ 15,633 $ (685 ) Funding Requirements We anticipate incurring additional losses for the foreseeable future, and we may never become profitable.
We believe that the Equity Financing that we have entered into with Streeterville and Equity Line that we have entered into with Atlas will provide us with, and allow us to maintain, stockholders’ equity well in excess of the required minimum under Nasdaq Listing Rule 5505(b) as well as enable us to fund our operations through at least June 30, 2026.
We believe that the Series 2 Equity Financing, the Equity Line, and the ATM Facility that we have in place, as described in Note 5, Share Capital below, will provide us with, and allow us to maintain, stockholders’ equity in excess of the required minimum under Nasdaq Listing Rule 5505(b) as well as enable us to fund our operations through at least June 30, 2027.
We have incurred operating losses and negative cash flows from operations since inception. As of December 31, 2024, we had an accumulated deficit of approximately $41,000,000. Management expects to continue to incur operating losses and negative cash flows for the foreseeable future.
We have incurred operating losses and negative cash flows from operations since inception. As of December 31, 2025, we had an accumulated deficit of approximately $49,000,000.
This has the potential to greatly increase value for our customers. Results of Operations Net Revenues. Our net revenues primarily consist of revenues generated from subscriptions to our core business services (cloud video surveillance and remote guarding), hardware sales, and installation services. We bill cloud video surveillance and remote guarding according to the number of camera views.
This has the potential to greatly increase value for our customers. Net Revenues Our net revenues are primarily derived from subscriptions to our core business services, including cloud video surveillance and Remote Guarding, as well as from hardware sales and installation services.
Revenue and cost of sales described above resulted in gross profit of $374K in the year ended December 31, 2024 compared to a gross loss of $118K for the same period in 2023. 38 Off-Balance Sheet Arrangements As of the date of this Form 10-K we have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements As of the date of this Form 10-K, we have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
We have based the foregoing estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we expect. We have a planning and budgeting process in place to monitor our operating cash requirements, including amounts projected for capital expenditures, which are adjusted as our future funding requirements change.
We have a planning and budgeting process in place to monitor our operating cash requirements, including amounts projected for capital expenditures, which are adjusted as our future funding requirements change.
Our net cash used in financing activities for the year ended December 31, 2024, was approximately $685,000 compared to net cash provided by financing activities of approximately $387,000 for the year ended December 31, 2023, a decrease of approximately $1,071,000 or 277%.
Net cash provided by financing activities was $15,633,000 for the year ended December 31, 2025, compared to net cash used in financing activities of $685,000 for the year ended December 31, 2024.
We provide an award-winning cloud-based artificial intelligence (“AI”) video surveillance and Remote Guarding (as described below) service built on AI and machine learning platforms. 35 History of the Company and Overview of Our Business We operated as a small Silicon Valley startup until early 2021 when we raised over $35 million in funding under Regulation A of the Securities Act of 1933, as amended (the “Securities Act”).
History of the Company and Overview of Our Business We operated as a small Silicon Valley startup until early 2021 when we raised over $35 million in funding under Regulation A of the Securities Act of 1933, as amended (the “Securities Act”).
Net Loss As a result of the foregoing, net loss for the year ended December 31, 2024, was approximately $6,535,000 compared to $9,007,000 for the year ended December 31, 2023, a decrease of approximately $2,472,000 or approximately 27%.
Net Loss As a result of the foregoing, net loss for the year ended December 31, 2025 was approximately $8,462,000, compared to $6,535,000 for the year ended December 31, 2024, representing an increase in net loss of approximately $1,927,000, or approximately 29%.
Year Ended December 31, ( in thousands ) 2024 2023 Net cash (used in) operating activities $ (3,277 ) $ (5,716 ) Net cash (used in) investing activities (27 ) (43 ) Net cash provided by financing activities (685 ) 387 Cash and cash equivalents at end of period $ 52 $ 4,042 Operating Activities.
Year Ended December 31, ( in thousands ) 2025 2024 Net cash (used in) operating activities $ (6,917 ) $ (3,277 ) Net cash (used in) investing activities (315 ) (27 ) Net cash provided by financing activities 15,633 (685 ) Cash and cash equivalents at end of period $ 8,453 $ 52 45 Operating Activities Net cash used in operating activities was $6,917,000 for the year ended December 31, 2025, compared to $3,277,000 for the year ended December 31, 2024.
Net cash used in investing activities for the year ended December 31, 2023, was approximately $43,000, also entirely attributable to purchases of fixed assets. 39 Financing Activities Since inception we have relied primarily on financing activities to fund our operations, including raising over $35 million in funding in an offering under Regulation A of the Securities Act, and through the sale of preferred stock.
Financing Activities Since inception we have relied primarily on financing activities to fund our operations, including raising over $35 million in funding in an offering under Regulation A of the Securities Act, and through the sale of preferred stock. Please see Note 5, Share Capital below.
As of the year ended December 31, 2024, we had approximately $52,000 of cash on hand and approximately $577,000 of working capital deficiency, and our anticipated operating requirements for the next twelve months, assuming the maintenance of our current operations, exceed our available capital resources.
Management expects to continue to incur operating losses and negative cash flows for the foreseeable future. 46 As of December 31, 2025, we had approximately $8,453,000 of cash on hand and approximately $8,605,000 of net working capital (including cash on hand), and our anticipated operating requirements for the next 12 months, assuming the maintenance of our current operations, do not exceed our available capital resources.
Our operating expenses consist of: general and administrative expenses, which are primarily salaries, professional fees, consulting costs and expenses related to the administrative functions of the Company; research and development expenses, which consist primarily of product development costs and salaries; and sales and marketing expenses, which represent public relations, advertising and direct marketing costs, as well as the associated personnel costs.
General and administrative expenses primarily include salaries and benefits, professional fees, consulting costs, and other expenses related to the administrative and corporate functions of the Company. Research and development expenses consist primarily of product development costs, including employee compensation and related expenses.
Furthermore, while we have decreased our operating expenses by reducing our personnel and consultant expenditures, reducing salaries for our executives and employees, and reducing our overall spending, we nevertheless expect expenses to increase in connection with our ongoing activities, particularly as we continue development of our existing and new products and services.
As described above, our operating expenses increased significantly from 2024 to 2025 as a result of our growth. We expect operating expenses to continue to increase in connection with our ongoing activities, particularly as we continue development of our existing and new products and services.
The following table summarizes our revenue by service line: Year Ended December 31, 2024 2023 Cloud video surveillance $ 323,475 $ 219,120 Remote guarding 282,849 56,128 Hardware 341,193 97,361 Other (installation, door subscriptions, etc.) 416,776 234,527 $ 1,364,293 $ 607,135 Cost of Goods Sold.
The following table summarizes our revenue by service line: Year Ended December 31, 2025 2024 Cloud Video Surveillance $ 767,026 $ 323,475 Remote Guarding 706,349 282,849 Hardware 1,464,603 341,193 Other (installation, door subscriptions, etc.) 2,127,551 416,776 $ 5,065,529 $ 1,364,293 The significant increase in hardware and installation revenue during fiscal year 2025 was primarily attributable to initial deployment activity associated with new customer acquisitions and the expansion of existing customer relationships.
Our cost of goods sold primarily consists of hosting costs, the costs of equipment sold, installation costs and the costs of the operations department. Operating Expenses.
Cost of Goods Sold Our cost of goods sold primarily consists of hosting costs associated with the delivery of our cloud-based services, including data storage, bandwidth, and related infrastructure expenses.
Our cost of goods sold increased approximately $265,000, or approximately 36%, from approximately $725,000 for the year ended December 31, 2023, compared to approximately $990,000 for the year ended December 31, 2024.
Revenue and cost of sales resulted in gross profit of approximately $1,489,000 for the year ended December 31, 2025, compared to gross profit of approximately $374,000 for the year ended December 31, 2024.
Notwithstanding, we also intend to raise additional capital pursuant to one or more registered offerings of equity or debt securities.
Nasdaq Listing Rule 5505(b)(1) requires that we maintain stockholders' equity of at least $2.5 million for continued listing on the Nasdaq Capital Market. As of December 31, 2025, our stockholders' equity was approximately $8.9 million. Notwithstanding, we may also raise additional capital pursuant to one or more registered offerings of equity or debt securities.
Removed
Hardware mainly includes cloud video recorders, surveillance cameras, horn and axis speakers kept in inventory. Installation services include the labor needed to set in place said hardware and software. We recognize revenue when a customer obtains control of promised goods or services.
Added
We provide an award-winning cloud-based artificial intelligence (“AI”) video surveillance and Remote Guarding (as described below) service built on AI and machine learning platforms.
Removed
Typically, our customers pay up front annually for our services and sign subscription and remote guarding agreements governing the terms of service. In those instances, revenue is recognized ratably over the period that commences on the subscription start date and ending on the date the subscription term expires.
Added
Compliance with NASDAQ Listing Rule 5550(a)(2) On February 17, 2026, we received a letter (the “Notification Letter”) from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of our Class A common stock for the last 30 consecutive business days, we are not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).
Removed
Some of our customers require monthly billing arrangements, in which case revenue is recognized on a monthly basis. Revenue generated from sales of hardware is generally recognized at the time of delivery. Revenue generated from door and video services is generally recognized at the completion of the professional services. 36 Cost of Goods Sold.
Added
The Notification Letter does not result in the immediate delisting of our Class A common stock from the Nasdaq Capital Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided a compliance period of 180 calendar days, or until August 17, 2026, to regain compliance with the minimum bid price requirement.
Removed
Comparison of Year Ended December 31, 2024, to the Year Ended December 31, 2023 Net Revenues The majority of our net revenue for the year ended December 31, 2024, and the year ended December 31, 2023 was comprised of subscription revenue generated from our core business services (cloud video surveillance and remote guarding) and hardware sales.
Added
To regain compliance, the closing bid price of our Class A common stock must be at least $1.00 per share for a minimum of 10 consecutive business days during the 180-day compliance period. If we do not regain compliance by August 17, 2026, we may be eligible for an additional 180 calendar day compliance period.
Removed
Total revenue increased approximately $757,000, or approximately 125%, from approximately $607,000 for the year ended December 31, 2023, compared to approximately $1,364,000 for the year ended December 31, 2024. This increase is due to our having signed 30% more new locations during the year ended December 21, 2024, compared to the same period in 2023.
Added
To qualify for the additional compliance period, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market (except for the bid price requirement) and must provide written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.
Removed
Cloud video surveillance subscriptions increased by approximately 48%, remote guarding increased by approximately 404%, and hardware increased by approximately 250% over the same period in 2023.
Added
If we do not regain compliance within the allotted compliance period(s), or if we are otherwise not eligible for an additional compliance period, Nasdaq will provide notice that our Class A common stock will be subject to delisting. At that time, we may appeal the delisting determination to a Nasdaq Hearings Panel.
Removed
This increase was the result of increased sales and the completion of more installation projects in the year ended December 31, 2024, compared to the same period in 2023. This increase was offset by a reduction of hosting costs of approximately 37%.
Added
We intend to monitor the closing bid price of our Class A common stock and will consider available options to regain compliance with the minimum bid price requirement, which may include effecting a reverse stock split, if necessary and if approved by our stockholders.
Removed
Year Ended December 31, 2024 2023 Hosting and data center bandwidth $ 273,128 $ 433,009 Remote guarding costs 114,440 60,519 Hardware Costs 218,025 119,942 Installation and labor costs 378,853 111,959 $ 984,447 $ 725,426 37 Operating Expenses.
Added
There can be no assurance that we will be able to regain compliance with the minimum bid price requirement.
Removed
The following table summarizes our operating expenses for the year ended December 31, 2024, and as compared to the same period in 2023: Year Ended December 31, ( in thousands ) 2024 2023 General and administrative $ 1,241 $ 2,365 Research and development 1,266 2,014 Sales and marketing 1,813 2,541 Non-cash expenses (equity compensation, depreciation, bad debt, etc.) 2,245 1,674 $ 6,565 $ 8,594 Our operating expenses for the year ended December 31, 2024, were approximately $6,565,000 compared to approximately $8,594,000 for the year ended December 31, 2023, a decrease of approximately $2,029,000 or approximately 24%.
Added
Revenues from cloud video surveillance and Remote Guarding services are billed based on the number of camera views deployed by the customer. Hardware revenues consist primarily of sales of cloud video recorders, surveillance cameras, and horn and axis speakers held in inventory. Installation services represent labor associated with the deployment and configuration of hardware and related software.
Removed
The largest component of our operating expenses were non-cash expenses, which were approximately $2,245,000, for the year ended December 31, 2024, compared to approximately $1,674,000 for the year ended December 31, 2023, an increase of approximately $571,000 or approximately 34%.
Added
Hardware revenues are recognized upon shipment of the related products to the customer, while installation service revenues are recognized based on the percentage of completion of the services performed. Subscription revenues are billed either monthly or annually and are recognized over the contractual service period in accordance with ASC 606, Revenue from Contracts with Customers.
Removed
This increase in non-cash expenses was primarily due to an increase in stock compensation expense of approximately $881,000, a decrease in loss on impairment of goodwill of approximately $1,674,000, a decrease in depreciation of approximately $137,000 and an increase in bad debt expense of approximately $60,660.
Added
Cost of goods sold also includes the cost of equipment sold to customers, such as cloud video recorders, surveillance cameras, and related peripherals, as well as labor and third-party costs incurred in connection with installation services.
Removed
The second largest component of our operating expenses were sales and marketing expenses, which were approximately $1,813,000 for the year ended December 31, 2024, compared to approximately $2,541,000 for the year ended December 31, 2023, a decrease of approximately $728,000 or approximately 29%.
Added
In addition, cost of goods sold includes compensation, benefits, and other direct costs associated with personnel in our operations department who support the delivery, monitoring, and maintenance of our services. Operating Expenses Our operating expenses consist of general and administrative, research and development, and sales and marketing expenses, and include both cash and non-cash items.
Removed
This decrease in sales and marketing expenses was primarily due to a decrease in payroll for our internal sales and marketing staff of approximately $113,000, a decrease in fees related to consulting services of approximately $26,000, and a decrease in trade show and corporate event expenses and content creation services from third-party marketing service providers of approximately $278,000.
Added
Sales and marketing expenses include public relations, advertising, and direct marketing costs, as well as personnel-related expenses associated with sales and marketing activities.
Removed
The remainder of our operating expenses were primarily comprised of general and administrative expenses and research and development expenses. General and administrative expenses were approximately $1,241,000 for the year ended December 31, 2024, compared to approximately $2,365,000 for the year ended December 31, 2023, a decrease of approximately $1,124,000 or approximately 48%.
Added
Total operating expenses also include non-cash expenses, primarily consisting of depreciation expense, bad debt expense, and stock-based compensation expense. 41 Comparison of Year Ended December 31, 2025, to the Year Ended December 31, 2024 Net Revenues Net revenues increased to $5,065,529 in 2025 from $1,364,293 in 2024, representing an increase of $3,701,236, or approximately 271%.
Removed
This decrease in general and administrative expenses was primarily due to decreases in consulting fees of approximately $118,000, payroll of approximately $226,000, and other general operating expenses of approximately $115,000.
Added
The increase was driven by growth across all revenue categories, reflecting continued customer adoption of our services, expanded deployments, and increased sales activity. Cloud Video Surveillance revenue increased to $767,026 in 2025 from $323,475 in 2024, an increase of $443,551, or approximately 137%.
Removed
Research and development expenses were primarily comprised of engineering and development expenses, which were approximately $1,266,000 for the year ended December 31, 2024, compared to approximately $2,014,000 for the year ended December 31, 2023, a decrease of approximately $748,000 or approximately 37%.
Added
This increase was primarily attributable to a higher number of subscribed camera views resulting from new customer acquisitions and expansion of deployments with existing customers. Remote Guarding revenue increased to $706,349 in 2025 from $282,849 in 2024, an increase of $423,500, or approximately 150%.
Removed
This decrease in engineering and development expenses was due to a decrease in payroll of approximately $310,000, a decrease in consulting fees of approximately $67,000 and $38,000 decrease in equipment and prototype expenses.
Added
The increase was driven by increased customer demand for remote monitoring services, as well as growth in the installed base of cameras eligible for remote guarding. Hardware revenue increased to $1,464,603 in 2025 from $341,193 in 2024, an increase of $1,123,410, or approximately 329%.
Removed
We continue to experience negative cash flows from operations as we expand our business. Our cash flows from operating activities are significantly affected by our cash investments to support the growth of our business in areas such as product and service development and selling, general and administrative.
Added
The increase was primarily due to higher volumes of hardware sold in connection with larger customer deployments and bundled service offerings compared to the prior year. Other revenue, which includes installation services, door subscriptions, and other ancillary services, increased to $2,127,551 in 2025 from $416,776 in 2024, an increase of $1,710,775, or approximately 410%.
Removed
Our operating cash flows are also affected by our working capital needs to support growth and fluctuations in personnel-related expenditures, accounts payable and other current assets and liabilities.
Added
This increase was largely attributable to higher installation activity associated with increased hardware sales, expanded customer deployments, and increased adoption of additional subscription-based services. Overall, the increase in net revenues reflects continued execution of our growth strategy, expansion of our customer base, and increased penetration of our integrated hardware, installation, and subscription-based service offerings.
Removed
Net cash used in operating activities for the year ended December 31, 2024, was approximately $3,277,000 which reflects our net loss of $6,535,000 and increases in accounts receivable of $155,000 and deferred revenue of $292,000. Accounts payable increased by $601,000 and the rest was offset by non-cash activities including stock-based compensation of $1,154,000 and impairment of goodwill of $1,674,000.
Added
As new customer locations are onboarded, we typically experience an initial period of higher hardware and installation revenue, followed by a shift toward recurring subscription-based revenue as those locations transition to ongoing cloud video surveillance and Remote Guarding services.
Removed
Net cash used in operating activities for the year ended December 31, 2023, was approximately $5,716,000 which reflects our net loss of $9,006,699 and increases in accounts receivable of $49,597 and deferred revenue of $144,074. Accounts payable decreased by $118,789 and the rest was offset by non-cash activities including stock-based compensation of $1,154,222 and impairment of goodwill of $1,673,933.
Added
We expect the proportion of recurring subscription revenue to increase over time as our installed base matures, although the timing and pace of this shift will depend on the rate of new customer acquisitions and the scope of future deployment activity.
Removed
On July 10, 2023, we received a “Wells Notice” from the Enforcement Division of the SEC alleging violations of Sections 17(a)(1), 17(a)(2), and 17(a)(3) of the Securities Act, and Section 10(b) of the Exchange Act, and Rules 10b-5(a), (b) and (c) under the Exchange Act.
Added
Of total net revenues of $5,065,529 for the year ended December 31, 2025, approximately $1,473,375, or 29%, was derived from recurring subscription services (Cloud Video Surveillance and Remote Guarding), while the remaining $3,592,154, or 71%, was derived from non-recurring hardware sales and installation services. 42 Cost of Goods Sold Cost of goods sold increased to $3,576,688 in 2025 from $984,447 in 2024, representing an increase of $2,592,241, or approximately 263%.
Removed
On September 27, 2023, without admitting or denying the findings, we submitted an offer of settlement to the SEC and agreed to the imposition of an order (the “Order”) which, among other things, states that we violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the Securities Act.
Added
The increase was primarily attributable to higher service delivery costs associated with significant revenue growth, increased customer deployments, and expanded installation activity during 2025. Hosting and data center bandwidth costs increased to $331,546 in 2025 from $273,128 in 2024, an increase of $58,418, or approximately 21%.
Removed
We also agreed to pay a penalty of $558,071, which has been paid in full. As a result of the Order (the “Disqualification Event”), we have been disqualified from relying on certain exemptions from registration under the Securities Act for offers and sales of our securities for a period of five years, including the exemption provided by Regulation A.
Added
This increase was primarily driven by higher data storage, bandwidth usage, and infrastructure costs resulting from growth in cloud video surveillance subscriptions and increased camera deployments. Remote Guarding costs increased to $261,956 in 2025 from $114,440 in 2024, an increase of $147,516, or approximately 129%.
Removed
On November 25, 2024, we entered into a Securities Purchase Agreement , as amended by Amendment No. 1 to Securities Purchase Agreement, dated January 16, 2025, and Amendment No. 2 to Securities Purchase Agreement, dated January 29, 2025 (the “Series 1 Equity Financing”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”) pursuant to the terms of which we agreed to issue and sell $6,300,000 of newly designated Series 1 Convertible Preferred Stock, par value $0.0001 per share (the “Series 1 Preferred”) and 720,000 pre-delivery shares to Streeterville.
Added
The increase was primarily attributable to higher labor and monitoring costs associated with the expansion of Remote Guarding services and increased customer utilization, as well as costs related to the establishment of our India-based subsidiary, which commenced operations in July 2025. Hardware costs increased to $754,873 in 2025 from $218,025 in 2024, an increase of $536,848, or approximately 246%.
Removed
The Series 1 Equity Financing closed on January 29, 2025.
Added
This increase was driven by higher volumes of hardware sold in connection with larger customer deployments and increased overall sales activity. Installation labor costs increased to $2,228,313 in 2025 from $378,853 in 2024, an increase of $1,849,460, or approximately 488%.
Removed
On November 25, 2024, we also entered into an Equity Purchase Agreement (the “Equity Purchase Agreement” or “Equity Line”) with Atlas Sciences, LLC, a Utah limited liability company (“Atlas”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Atlas will purchase up to an aggregate of $50,000,000 of our Class A common stock over the 24-month term of the Equity Line.
Added
The increase was primarily attributable to a substantial increase in installation activity related to hardware sales and customer deployments, as well as increased internal and third-party labor costs required to support this growth.

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