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What changed in Safe Pro Group Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Safe Pro Group 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.

+160 added−159 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Safe Pro Group Inc.'s 2025 10-K

160 paragraphs added · 159 removed · 115 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

52 edited+21 added−11 removed75 unchanged
Biggest changeWe believe our diversified customer base provides us with an opportunity to leverage our skills, experience and varied product lines across markets and reduces our exposure to a single end market. Additionally, we believe the diversity of our customer base is an important strength of our company.
Biggest changeOur personnel have spent extensive time supporting these efforts through on-site deployments, contractor support, and collaborative engagements related to the evaluation and deployment of our SpotlightAI™ technology, as well as the assessment of related protective equipment. 6 We believe our diversified potential customer base provides us with an opportunity to leverage our skills, experience and varied product lines across markets and reduces our exposure to a single end market.
Furthermore, we believe that the scale and scope of the conflict in Ukraine has created a significant near-term opportunity for several of our products and services, in particularly, our AI-powered, drone-based solution for the identification and locating of UXO and personal protective equipment (“PPE”) such as our Explosive Ordnance Disposal and Blast and Fragmentation protective suits.
We believe that the scale and scope of the conflict in Ukraine has created a significant near-term opportunity for several of our products and services, in particularly, our AI-powered, drone-based solution for the identification and locating of UXO and personal protective equipment (“PPE”) such as our Explosive Ordnance Disposal and Blast and Fragmentation protective suits.
Certain employees are subject to contractual agreements that specify requirements regarding confidentiality and restrictions on working for competitors, as well as other standard matters. Certain of our employees are licensed to fly our drones. Currently, two part-time employees of our subsidiary, Airborne Response Corp., are licensed drone operators with FAA Part 107 Remote Pilot Certificates.
Certain employees are subject to contractual agreements that specify requirements regarding confidentiality and restrictions on working for competitors, as well as other standard matters. Certain of our employees are licensed to fly our drones. Currently, two employees of our subsidiary, Airborne Response Corp., are licensed drone operators with FAA Part 107 Remote Pilot Certificates.
Safe Pro AI’s AI-powered analysis engine and software tools (collective referred to as “Safe Pro Object Threat Detection” or “SPOTD”) technology enable the rapid detection and identification of small objects present in drone-based images and video feeds and utilize that data and imagery to securely generate detailed, high resolution 2D/3D orthomosaic maps and real-time visual indications highlighting objects of interest.
Safe Pro AI’s AI-powered analysis engine and software tools (collectively referred to as “Safe Pro Object Threat Detection” or “SPOTD”) technology enable the rapid detection and identification of small objects present in drone-based images and video feeds and utilize that data and imagery to securely generate detailed, high resolution 2D/3D orthomosaic maps and real-time visual indications highlighting objects of interest.
On November 19, 2024, we were granted out first patent from the United States Patent and Trademark Office (“USPTO”), for our technology that identifies, locates and maps explosives.
On November 19, 2024, we were granted our first patent from the United States Patent and Trademark Office (“USPTO”), for our technology that identifies, locates and maps explosives.
Troop movement, on foot or by vehicle, exposes soldiers and assets to the risk of a wide array of explosive threats including landmines, anti-personnel mines and improvised explosive devices (IEDs). Currently, we believe there are no well adopted real-time systems fielded to alert personnel to the presence of potentially deadly small threats.
Troop movement, on foot or by vehicle, exposes soldiers and assets to the risk of a wide array of explosive threats including landmines, anti-personnel mines and improvised explosive devices (IEDs). Currently, we believe there are no well-adapted real-time systems fielded to alert personnel to the presence of potentially deadly small threats.
Safe Pro AI’s capabilities enable the rapid, automated processing of aerial imagery (collective referred to as “Safe Pro Object Threat Detection” or “SPOTD”) making it an ideal solution for several photogrammetry applications including demining, military, law enforcement and security as well as critical infrastructure inspection and agriculture.
Safe Pro AI’s capabilities enable the rapid, automated processing of aerial imagery (collectively referred to as “Safe Pro Object Threat Detection” or “SPOTD”) making it an ideal solution for several photogrammetry applications including demining, military, law enforcement and security as well as critical infrastructure inspection and agriculture.
We offer a full array of bullet and blast resistant personal protection equipment including complete Explosive Ordnance Disposal (“EOD”) Systems, demining aprons and bomb blankets, body armor & ballistic plates to government, security, law enforcement and first responders, as well as armor systems for ground vehicles and aircraft including helicopters.
We offer a full array of bullet and blast resistant personal protection equipment including complete Explosive Ordnance Disposal (“EOD”) Systems, demining aprons and bomb blankets, body armor & ballistic plates to government, security, law enforcement and first responders, as well as armor systems for ground vehicles and aircrafts, including helicopters.
This visual dataset can be uploaded to the Cloud or processed locally on a portable Window’s-based personal computer, to provide ground personnel with detailed, actionable intelligence about the location and type of hazard present, dramatically improving the efficiency, speed, and safety of any operation.
This visual dataset can be uploaded to the Cloud or processed locally on a portable Windows-based personal computer, to provide ground personnel with detailed, actionable intelligence about the location and type of hazard present, dramatically improving the efficiency, speed, and safety of any operation.
Landmine Detection and Remediation The threat of anti-personnel landmines and/or unexploded ordnance is present in over 60 countries across Africa, the Middle East, South America, Southeast Asia, and throughout mainland China and Russia (source: Statista).
Landmine Detection and Remediation The threat of anti-personnel landmines and/or unexploded ordnance is present in approximately 60 countries across Africa, the Middle East, South America, Southeast Asia, and throughout mainland China and Russia (source: Statista).
Product pricing can be a major competitive consideration in certain international markets where customers may consider lower-cost/lower performance foreign-manufactured product options are available instead of high-quality/higher-performance Made in America products.
Product pricing can be a major competitive consideration in certain international markets where customers may consider lower-cost/lower performance foreign-manufactured product options instead of high-quality/higher-performance Made in America products.
We have more than 30 years of combined experience in the U.S. defense industry with a proven expertise and strength in the design, engineering, and manufacture of advanced armor composites.
We have more than 30 years of combined experience in the U.S. defense industry with a proven expertise and strength in the design, engineering, and manufacturing of advanced armor composites.
This capability greatly increases situational awareness for soldiers as well helps address the scale and improve the efficacy of remediation efforts versus existing human and dog-based identification methods.
This capability greatly increases situational awareness for soldiers and helps address the scale and improve the efficacy of remediation efforts versus existing human and dog-based identification methods.
Our strategic emphasis is on the development of a software based ecosystem for analyzing drone imagery and data utilizing proprietary artificial intelligence (“AI”), machine learning, deep learning, and applied computer vision software for hyper scalable processing, analysis, and reporting. Our core capabilities include artificial intelligence/machine learning, mission critical drone services and the manufacturer of ballistic protective products.
Our strategic emphasis is on the development of a software-based ecosystem for analyzing drone imagery and data utilizing proprietary artificial intelligence (“AI”), machine learning, deep learning, and applied computer vision software for hyper scalable processing, analysis, and reporting. Our core capabilities include artificial intelligence/machine learning, mission critical drone services and manufacturing of high performance ballistic protective products.
We also lease a 7,000 sq. ft. facility located in Hialeah, Florida that is used for the manufacturing operations of our Safe-Pro USA business unit. We believe that our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed.
We also lease a 7,000 square foot facility located in Hialeah, Florida that is used for the manufacturing operations of our Safe-Pro USA business unit. We believe that our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed.
We have developed an ecosystem of advanced AI-powered small object detection and data analysis and reporting tools for hyper-scalable, cloud-based (leveraging the hyperscale of Amazon Web Services or “AWS) or local real-time processing of drone imagery to extract actionable geospatial intelligence.
We have developed an ecosystem of advanced AI-powered small object detection and data analysis and reporting software tools for hyper-scalable, cloud-based (leveraging the hyperscale of Amazon Web Services or “AWS”) or local (edge) real-time processing of drone imagery to extract actionable geospatial intelligence.
As of March 2025, SpotlightAI TM , powered by AWS, has processed over 1.2 million drone images and detected over 22,000 real-world explosive threats in Ukraine. Additionally, ground personnel can be equipped with an array of advanced personal ballistic protective equipment, thereby providing customers with a complete solution for the remediation of landmines and other hazardous remnants of war.
As of March 2026, SpotlightAI TM , powered by AWS, has processed over 2.4 million drone images and detected over 45,000 real-world explosive threats in Ukraine. Additionally, ground personnel can be equipped with an array of advanced personal ballistic protective equipment, thereby providing customers with a complete solution for the remediation of landmines and other hazardous remnants of war.
Safe-Pro USA was formed in Florida in November of 2008, and develops an array of unique products in development for, and marketed to, government, law enforcement and international humanitarian aid organizations seeking personal protective gear.
Safe-Pro USA was formed in Florida in November of 2008 and develops an array of unique products marketed to, government, law enforcement and international humanitarian aid organizations seeking high performance personal protective gear.
All bullet and blast resistant protection equipment are proudly designed, engineered, and manufactured in the United States and meets or exceeds the United States Government and NATO standards including the latest U.S. National Institute of Justice (“NIJ”) and STANAG standards. Aerial Managed Services and Mission-Critical Uncrewed Solutions.
All bullet and blast resistant protection equipment are designed, engineered, and manufactured in the United States and meet or exceed the United States Government and NATO standards including the latest U.S. National Institute of Justice (“NIJ”) and STANAG standards. Aerial Managed Services and Mission-Critical Uncrewed Solutions.
Powered by the Amazon Web Services (“AWS”) Cloud, Safe Pro AI’s technology, called SpotlightAI TM , is initially being applied to the identification, classification, and clearance of landmines. The SPOTD technology is also integrated into a real-time, locally processed Window’s-based personal computer application called ONSITE which enables real-time visual indications and alerts of threats.
Powered by the Amazon Web Services (“AWS”) Cloud, Safe Pro AI’s technology is initially being applied to the identification, classification, and clearance of landmines. The SPOTD technology is also integrated into a real-time, locally processed Windows-based personal computer application called ONSIGHT which enables real-time visual indications and alerts of threats.
It is currently building on over two years of real-world experience in Ukraine, expanding SPOTD into a broad array of military and defense markets where its integration into existing tactical hardware platforms (ex: the US Army’s Tactical Assault Kit or TAK system) can be used in force protection applications.
The Company is currently building on over three years of real-world experience in Ukraine, expanding SPOTD into a broad array of military and defense markets where its integration into existing tactical hardware platforms (e.g., the US Army’s Tactical Assault Kit or TAK system) can be used in force protection applications.
Our software ecosystem supports a wide array of applications and use cases where the ability to rapidly analyze drone-based imagery can significantly improve geospatial situational awareness, operational effectiveness and safety such as: ● Integrating with military mobile devices, vehicle displays, and tactical networks used by soldiers to provide access to real-time threat alerts, providing unmatched precision in navigating hazardous environments; ● Allowing security and first responder personnel to detect items of interest including contraband or weapons at an incident location; ● Providing enhanced border security through integrating with mobile devices, vehicle displays, and tactical networks used by border agents to provide access to real-time threat alerts, providing unmatched precision in navigating hazardous environments; ● Detecting items of interest in applications where hazardous items and contraband can be detected on critical infrastructure such as roads or bridges which can indicate potentially hazardous conditions; and ● Analyzing agricultural vegetation for growth or signs of crop damage, as well as collecting data to generate topographical maps 1 Bullet and Blast Resistant Personal Protection Equipment.
Our software ecosystem supports a wide array of applications and use cases where the ability to rapidly analyze drone-based imagery at scale can significantly improve geospatial situational awareness, operational effectiveness and safety such as: ● Integrating with military mobile devices, vehicle displays, and tactical networks used by soldiers to provide access to real-time threat alerts, providing unmatched precision in navigating hazardous environments; ● Route planning supporting autonomous/unmanned ground vehicle (UGV) operations utilizing orthomosaics, vegetation height maps, terrain slope maps and digital surface maps and 3D terrain modeling; ● Allowing security and first responder personnel to detect items of interest including contraband or weapons at an incident location; ● Providing enhanced border security through integrating with mobile devices, vehicle displays, and tactical networks used by border agents to provide access to real-time threat alerts, providing unmatched precision in navigating hazardous environments; ● Detecting items of interest in applications where hazardous items and contraband can be detected on critical infrastructure such as roads or bridges which can indicate potentially hazardous conditions; and ● Analyzing agricultural vegetation for growth or signs of crop damage, as well as collecting data to generate topographical maps 1 Bullet and Blast Resistant Personal Protection Equipment.
The Ukraine Crisis: In Ukraine, The World Bank, The Ukraine Rapid Damage and Needs Assessment , February 2024, estimates that more than 165,000 km 2 or nearly 64,000 square miles, will require a non-technical survey to determine the level of contamination with land mines and unexploded ordinance. The non-technical survey is the first step in analyzing an area for contamination.
The Ukraine Crisis: In Ukraine, The World Bank, The Ukraine Rapid Damage and Needs Assessment , February 2025, estimates that more than 138,500 km 2 or nearly 53,000 square miles, will require a non-technical survey to determine the level of contamination with land mines and unexploded ordnance. The non-technical survey is the first step in analyzing an area for contamination.
We have 4 such contracts with FPL covering 4 regions of Florida in FPL’s coverage areas. Pursuant to these contracts FPL is not obligated to call upon us and there is no assurance that we will derive any income from this agreement.
The fee can vary depending upon the level of service selected. We have 4 such contracts with FPL covering 4 regions of Florida in FPL’s coverage areas. Pursuant to these contracts FPL is not obligated to call upon us and there is no assurance that we will derive any income from this agreement.
Currently, our patented software blends AI, machine learning and computer vision capabilities that enable rapid, automated cloud-based or local/edge-based processing of drone imagery for small object detection of threats such as landmines, unexploded ordnance (“UXO”), and other remnants of war. This current cloud system is called SpotlightAI TM .
Currently, our patented software blends AI, machine learning and computer vision capabilities that enable rapid, automated cloud-based or local/edge-based processing of drone imagery for small object detection of threats such as landmines, unexploded ordnance (“UXO”), and other remnants of war at scale.
Employees As of December 31, 2024, we employed eleven full-time employees, two part time employees, and seventeen independent contractors. We have never had a work stoppage, and none of our employees are represented by a labor organization or under any collective bargaining arrangements. We consider our employee relations to be good.
Employees As of December 31, 2025, we employed fifteen full-time employees , and twenty-nine independent contractors. We have never had a work stoppage, and none of our employees are represented by a labor organization or under any collective bargaining arrangements. We consider our employee relations to be good.
The code is executed on servers located in the United States and is not exported. Regulations Relating to Drone Services The UAS-based services we offer to customers within the United States are limited by federal laws and rulemaking, including the commercial drone regulations (Part 107) adopted by the U.S. Federal Aviation Administration (the “FAA”) at the end of August 2016.
Regulations Relating to Drone Services The UAS-based services we offer to customers within the United States are limited by federal laws and rulemaking, including the commercial drone regulations (Part 107) adopted by the U.S. Federal Aviation Administration (the “FAA”) at the end of August 2016.
Intellectual Property Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we currently rely on a combination of trade secrets, including know-how, employee and third-party non-disclosure agreements, and other contractual rights to establish and protect our proprietary rights in our technology.
To accomplish this, we currently rely on a combination of trade secrets, including know-how, employee and third-party non-disclosure agreements, and other contractual rights to establish and protect our proprietary rights in our technology.
ITEM 1. BUSINESS Overview Safe Pro Group was created to provide innovative security and protection products and has strategically acquired and assembled three business units focused on protecting those who protect us all.
ITEM 1. BUSINESS Overview Safe Pro Group Inc. was incorporated as a Delaware corporation in December 2021. Safe Pro Group was created to provide innovative security and protection products and has strategically acquired and assembled three active business units focused on protecting those who protect us all.
Due to our acquisitions, we are comprised of three principal operating units, each of which was acquired because they possess emerging technologies that can be leveraged together to create innovative new approaches to the development and sale of security and protective solutions for customers. 2 Safe-Pro USA LLC On June 7, 2022, we completed the acquisition of Safe-Pro USA LLC (“Safe-Pro USA”).
Due to our acquisitions, we are comprised of three principal operating units, each of which was acquired because they possess emerging technologies that can be leveraged together to create innovative new approaches to the development and sale of security and protective solutions for customers.
Safe Pro AI does not collect personal identifiable information and is not subject to laws and regulations governing such as the California Consumer Privacy Act. Safe Pro AI’s primary product, SpotlightAI, is accessed through the web on a subscription basis. The subscription does not give a subscriber access to the code, only the right to the output of processed information.
Safe Pro AI does not collect personally identifiable information and is not subject to laws and regulations governing such information, such as the California Consumer Privacy Act. Safe Pro AI’s primary product, SpotlightAI™, is accessed through the web on a subscription basis.
Technical obstacles and challenges we encounter in our research and development process may result in delays in our abandonment of product commercialization, substantially increase the costs of development and negatively affect our results of operations. Research and Development expenses were $90,372 and $373,655 for the two years ending December 31, 2024 and 2023, respectively, a decrease of $283,283 or 76%.
Technical obstacles and challenges we encounter in our research and development process may result in delays in, or our abandonment of, product commercialization, substantially increase the costs of development and negatively affect our results of operations. Research and Development expenses were $394,207 and $90,372 for the years ending December 31, 2025 and 2024, respectively, an increase of $303,835 or 336.2%.
We also have contracts with FPL to provide UAS teams to inspect power lines and poles with respect to regular maintenance. Under this contract we receive a fee per pole inspected or per mile of power line inspected. The fee can vary depending upon the level of service selected.
Under a previous version of this agreement, we were called upon and provided services to FPL in the aftermath of storms. We also have contracts with FPL to provide UAS teams to inspect power lines and poles with respect to regular maintenance. Under this contract we receive a fee per pole inspected or per mile of power line inspected.
As of March 2025, SpotlightAI TM , powered by AWS, has processed over 1.2 million drone images and detected over 22,000 real-world explosive threats in Ukraine.
This current cloud system is called SpotlightAI TM and as of March 2026, powered by AWS, has processed over 2.4 million drone images and detected over 45,000 real-world explosive threats in Ukraine.
Safe Pro AI is a developer of artificial intelligence (“AI”), machine learning (“ML”) and computer vision systems technologies for the rapid processing and analysis of drone-based imagery.
On August 30, 2023, the Company changed its name to Safe Pro AI LLC (“Safe Pro AI”). Safe Pro AI is a developer of patented artificial intelligence (“AI”), machine learning (“ML”) and computer vision systems technologies for the rapid processing and analysis of drone-based imagery.
We may acquire patents through acquisitions or direct prosecution efforts and engage in licensing transactions to secure the right to use third parties’ patents.
The Company filed a formal patent application on this system in December 2025. We may acquire patents through acquisitions or direct prosecution efforts and engage in licensing transactions to secure the right to use third parties’ patents.
We currently maintain a fleet of eleven drones through Airborne Response Corp. In the aftermath of natural disasters when our clients require additional support, we bring on outside contractors that have obtained a Remote Pilot Certificate from the Federal Aviation Administration (FAA).
In the aftermath of natural disasters when our clients require additional support, we bring on outside contractors that have obtained a Remote Pilot Certificate from the Federal Aviation Administration (FAA). These outside contractors supply their own drones to complete fieldwork that is then reviewed by the Airborne Response team.
Once fully deployed, this advanced network will offer rapid incident response and assessment, capturing, and relying real-time video and other relevant information to first responders for use in efficiently allocating resources and developing a response plan. We are currently under contract with the Florida Police Department and expect to deploy our DFR service this year.
Once fully deployed, this advanced network will offer rapid incident response and assessment, capturing, and relaying real-time video and other relevant information to first responders for use in efficiently allocating resources and developing a response plan.
The “305 Pro” in compliance with the latest National Institute of Justice (NIJ) publication, Ballistic Resistance of Body Armor , NIJ Standard 0101.07, specifies minimum performance requirements and test methods for the ballistic resistance of body armor used by U.S. law enforcement that is intended to protect the torso against handgun and rifle ammunition.
In late 2024 and through 2025, Safe-Pro USA has been designing and producing a series of new ultra-light and ultra-thin high-performance body armor plate products designed in compliance with the latest National Institute of Justice (NIJ) publication, Ballistic Resistance of Body Armor , NIJ Standard 0101.07, which specifies minimum performance requirements and test methods for the ballistic resistance of body armor used by U.S. law enforcement that is intended to protect the torso against handgun and rifle ammunition.
The HUBZone program includes unique access to certain federal government contracts, set-aside opportunities, and priority consideration in competitive procurements for certified companies in compliance with the Federal Acquisition Regulation (FAR). Recently, the Company introduced the “305 Pro” ultra-light and ultra-thin high-performance body amor product designed for law enforcement markets.
The HUBZone program includes unique access to certain federal government contracts, set-aside opportunities, and priority consideration in competitive procurements for certified companies in compliance with the Federal Acquisition Regulation (FAR).
This contract has a term beginning on March 25, 2024, and goes through December 30, 2026. Under this contract, FPL will call upon Airborne to respond and provide UAS teams after a storm. Airborne will be paid for having a team on standby, for one half day of work, or a full day of work.
The first contract is for the provision of UAS teams to inspect power lines and poles after a storm. This contract has a term beginning on March 25, 2024, and goes through December 30, 2026. Under this contract, FPL will call upon Airborne to respond and provide UAS teams after a storm.
Our Growth Strategy Safe Pro Group was created to invest in safety and security businesses and technologies that can be layered together to dramatically improve effectiveness of operations and provide actionable intelligence.
Additionally, its comprehensive mapping capabilities enable route planning featuring 3D terrain modeling in support of safe autonomous, unmanned ground vehicle (UGV) operations. Our Growth Strategy Safe Pro Group was created to invest in safety and security businesses and technologies that can be layered together to dramatically improve effectiveness of operations and provide actionable intelligence.
Personal Protective Gear In July 2023, Safe-Pro Group was awarded a Multiple Award Schedule (“MAS”) contract by the U.S. General Services Administration (“GSA”) for its Safe-Pro USA ballistic protection products.
We are currently under contract with a city police department in South Florida and are completing operational training ahead of expected system deployment and routine operations. Personal Protective Gear In July 2023, Safe-Pro Group was awarded a Multiple Award Schedule (“MAS”) contract by the U.S. General Services Administration (“GSA”) for its Safe-Pro USA ballistic protection products.
Under our contracts with Florida Power & Light (FPL), the principal electric utility in Florida, we, through our operating subsidiary, Airborne, provide UAS services related to the inspection of power poles and lines. The first contract is for the provision of UAS teams to inspect power lines and poles after a storm.
We support customers under both multi-year contracts as well as individual purchase orders. Under our contracts with Florida Power & Light (FPL), the principal electric utility in Florida, we, through our operating subsidiary, Airborne, provide UAS services related to the inspection of power poles and lines.
Each of these industries are characterized by rapidly advancing technologies and material science, intense competition, and a strong emphasis on proprietary products.
Additionally, through our Safe Pro AI operation, we compete in the rapidly emerging AI-driven analytics market. Each of these industries are characterized by rapidly advancing technologies and material science, intense competition, and a strong emphasis on proprietary products.
Once an area is cleared, an additional survey can be done to evaluate the clearance efforts. We are currently providing Safe Pro AI’s technology to customers on a trial basis. 4 Force Protection for the Military Operations by ground personnel (i.e., soldiers) are inherently dangerous.
Once an area is cleared, an additional survey can be done to evaluate the clearance efforts. We have been providing Safe Pro AI’s technology to customers on a limited trial basis.
It is a revision of National Institute of Justice (NIJ) Standard 0101.06, Ballistic Resistance of Body Armor , published in 2008.[1] 5 With respect to each of the above referenced product areas our market penetration is minimal.
It is a revision of National Institute of Justice (NIJ) Standard 0101.06, Ballistic Resistance of Body Armor , published in 2008.
Safe-Pro USA LLC currently serves multiple international customers including a Canadian Humanitarian Aid organization and multiple U.S. government and law enforcement end-users. Airborne Response Corp . On August 29, 2022, we acquired the operations of Airborne Response LLC. Airborne Response LLC changed its name to Airborne Response Corp. (“Airborne Response”) and converted from a limited liability company to a corporation.
On August 29, 2022, we acquired the operations of Airborne Response LLC, a Florida limited liability company originally formed in August 2016. Airborne Response LLC changed its name to Airborne Response Corp. (“Airborne Response”) and converted from a limited liability company to a corporation.
They are not obliged to call upon Airborne Response and there is no assurance that we will derive any income from this agreement. Under a previous version of this agreement, we were called upon and provided services to FPL in the aftermath of storms.
Airborne will be paid for having a team on standby, for one half day of work, or a full day of work. They are not obliged to call upon Airborne Response and there is no assurance that we will derive any income from this agreement.
Our Competition As a combined, single organization, we compete in several industry segments including AI analysis, aerial managed services and body armor/personal protective equipment. Additionally, through our Safe Pro AI operation, we compete in the rapidly emerging AI-driven analytics market.
However, we believe that, if necessary, alternative vendors could supply similar products in adequate quantities to avoid material disruptions to operations. Our Competition As a combined, single organization, we compete in several industry segments including AI analysis, aerial managed services and body armor/personal protective equipment.
Safe Pro AI LLC On March 9, 2023, we acquired the assets and intellectual property of Demining Development LLC, which was formed in New York on February 22, 2021. On August 30, 2023, the Company changed its name to Safe Pro AI LLC, (‘Safe Pro AI”).
Further, we provide a system for imagery data from third-party drones operated by outside contractors to be uploaded and analyzed leveraging artificial intelligence and machine learning. Safe Pro AI LLC On March 9, 2023, we acquired the assets and intellectual property of Demining Development LLC, a New York limited liability company formed on February 22, 2021.
The loss of these suppliers may have a material adverse effect on our results of operations and financial condition. However, we believe that, if necessary, alternative vendors could supply similar products in adequate quantities to avoid material disruptions to operations.
During the year ended December 31, 2024, we purchased 35.7% of our inventory from two suppliers, Minelab Electronics and Southeast Drone Technologies. The loss of these suppliers may have a material adverse effect on our results of operations and financial condition.
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These outside contractors supply their own drones to complete fieldwork that is then reviewed by the Airborne Response team. Further, we provide a system for imagery data from third-party drones operated by outside contractors to be uploaded and analyzed leveraging artificial intelligence and machine learning.
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On December 23, 2025, we formed SPAI Ventures LLC, a wholly owned subsidiary of Safe Pro Group, that was established to pursue both strategic collaborations and investments with Ukrainian and other international tech developers.
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Our customers include a Canadian Humanitarian Aid organization, as well as enterprises such as Florida Power & Light, Citizen’s Insurance and Motorola Solutions, and various State and municipal governments and agencies. We support customers under both multi-year contracts as well as individual purchase orders.
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Through SPAI Ventures, Safe Pro Group Inc. will evaluate opportunities in which to invest or to commercialize technologies that it believes could complement the capabilities of its portfolio of AI and ballistic protective solutions.
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The terms of these agreements are from August 25, 2023, through August 24, 2026 with a right to renew until August 24, 2028. During the year ending December 31, 2024 and 2023, these contracts generated approximately $1,064,000 and $253,100, respectively in revenue for Airborne.
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SPAI Ventures has not made any investments or entered into any agreements, and is currently not an actively operating unit of the Company. 2 Safe-Pro USA LLC On June 7, 2022, we completed the acquisition of Safe-Pro USA LLC (“Safe-Pro USA”).
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Our personnel have spent hundreds of days on the ground in Ukraine through more than a dozen trips to Europe and Ukraine, and we maintain a number of contractors based in Ukraine working with potential partners regarding both the deployment of our Spotlight AI technology for the detection of UXO and the sale of personal protective equipment including blast resistant suits and body armor. 6 Our personnel were featured in a segment aired on the PBS Newshour ( https://www.pbs.org/video/russian-invasion-1694720956/ ) demonstrating our UXO detection capability in Ukraine and we regularly give demonstrations and training to various governmental and non-governmental organizations involved in demining efforts in Ukraine.
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Safe-Pro USA LLC currently serves multiple domestic and international customers including a U.S. Government Contractor operating in support of the US Department of State landmine and explosive ordnance remediation initiatives in the Indo-Asia Pacific region, Humanitarian Aid organizations and multiple U.S. government and law enforcement end-users. Airborne Response Corp .
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In June 2023, the United Nations Development Programme (UNDP), in collaboration with the Ministry of Economy (MoEc) of Ukraine, invited us to participate in a pilot demonstration in Ukraine (Phase I). This initiative was designed to showcase innovative tools and methodologies utilizing Unmanned Aerial Vehicles/ Unmanned Ground Vehicles (UAV/UGV) systems to enhance land release efficiency in agricultural areas across Ukraine.
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During 2025, Airborne Response was awarded two aerial drone services contracts by two power utility customers serving millions of central Florida residents. We currently maintain a fleet of eleven drones through Airborne Response Corp.
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Upon completing the Phase I demonstration, in May 2024, we received an invitation from the UNDP to participate in Phase II testing in Ukraine. We completed the Phase II testing in June 2024.
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ONSIGHT is also being incorporated into a turnkey, standalone hardware/software solution called NODE (“Navigation, Observation & Detection Engine”) which provides local /edge computing and processing of drone-based imagery to create maps without requiring connectivity to the internet.
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In July 2024, we received a purchase order (P.O.) from the UNDP for a Phase III operation, specifically an active survey of 25 hectares of land at a contracted rate of $175 per hectare.
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As of March 2026, SpotlightAI™ has analyzed more than 2,470,927 drone images from Ukraine, identifying more than 45,689 landmines and unexploded remnants of war across 12,111 hectares (29,914 acres) of Ukrainian territory.
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Supplier Concentration The following table sets forth information for each supplier that accounted for 10% or more of the Company’s purchases for the years ended December 31, 2024 and 2023.
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During 2025, the Company entered multiple Memoranda of Understanding (MOUs) with government, commercial and university entities in Ukraine including its National Mine Action Center of Excellence, the country’s leading grain export and agricultural organization NIBULON Ltd., and the Igor Sikorsky Kyiv Polytechnic Institute, Ukraine’s largest technical university.
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December 31, 2024 December 31, 2023 Barrday Corp. $ 2,590 0.3 % $ 54,399 25.3 % Industries Bitossi Inc. $ - - $ 67,631 31.5 % Minelab Electronics $ 181,600 22.9 % $ - - Southeast Drone Technologies $ 101,750 12.8 % $ - - During the years ended December 31, 2024 and 2023, we purchased 35.7% of our inventory and services from two suppliers, Minelab Electronics and Southeast Drone Technologies and we purchased 56.8% of our inventory and services from two suppliers, Barrday Corp and Industries Bitossi, respectively.
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Through these relationships, the Company will conduct research and collaborate on the development of new technologies, education and training programs incorporating cutting-edge AI technology for applications including demining, environmental safety, agricultural and rare earth geology projects as well as infrastructure reconstruction. 4 Force Protection for the Military Operations by ground personnel (i.e., soldiers) are inherently dangerous.
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The expenses were related to finite lived intangible asset, SpotlightAI TM, which was put in service on July 1, 2024, decreasing costs for the year ended December 31, 2024.
Added
Additionally, in response to end-user demand for a solution that could enable the rapid collection and processing of drone-based imagery to identify emerging surface-level threats on the modern battlefield, creating 2D and 3D interactive, high-resolution maps locally at the tactical edge without requiring internet connectivity, the Company recently introduced and demonstrated its newly created SPOTD NODE (Navigation, Observation & Detection Engine).
Removed
For the year ended December 31, 2024, the Company had $1,088,645 of finite lived intangible assets, of which $845,800 represented SpotlightAI TM , net Company’s development of advanced artificial intelligence (AI) powered object detection and data analysis and reporting tools for hyper-scalable, cloud-based processing of drone imagery.
Added
Based upon preliminary feedback received by potential end users, the Company believes there is demand for this unique solution within the U.S. armed forces and with international governments. To address this opportunity, the Company intends to leverage industry relationships to access current and future contracting opportunities. As such, through Memoranda of Understanding (MOUs) with Ondas Holdings Inc.
Added
(Ondas), Unusual Machines Inc. (Unusual Machines), and Red Cat Holdings, Inc. (Red Cat), leaders in the U.S. drone industry, signed in August and September 2025, the Company intends to collaborate on the development and integration of the Company’s patented AI-powered drone imagery analysis and computer vision technologies into their respective hardware and software offerings.
Added
Finally, during 2025, the Company conducted a series of presentations and demonstrations with U.S. Government and military potential end users and has been invited to participate in several U.S. Army exercises in 2026 where its technology solutions will be showcased as a potential tool for supporting force protection and mission planning operations.
Added
As of January 2026, Safe-Pro USA has multiple high performance, ultra-lightweight and ultra-thin hard armor plates undergoing certification testing by the NIJ for compliance with NIJ 0101.07 ballistic standard with certifications expected throughout 2026. 5 With respect to each of the above referenced product areas our market penetration is minimal.
Added
Airborne Response (Aerial Services): Our Airborne Response business provides uncrewed aerial systems (“UAS”) services to electric utilities, insurance carriers, technology companies, public safety organizations as well as state and municipal governments and agencies. Our customers include Florida Power & Light, Citizen’s Insurance and Motorola Solutions, and various State and municipal governments and agencies.
Added
The terms of these agreements are from August 25, 2023, through August 24, 2026 with a right to renew until August 24, 2028. Additionally, in 2025, Airborne Response was awarded two aerial drone services contracts by two power utility customers serving millions of central Florida residents. Safe-Pro USA (Ballistic Protection): Our customers include a U.S.
Added
Government Contractor operating in support of the US Department of State landmine and explosive ordnance remediation initiatives in the Indo-Asia Pacific region, as well government, military, law enforcement and public safety organizations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBecause we are subject to these risks, and the other risks discussed below, you may have a difficult time evaluating our business and your investment in our company.
Biggest changeBecause we are subject to these risks, and the other risks discussed below, you may have a difficult time evaluating our business and your investment in our company. We incurred net losses in the years ended December 31, 2025, and 2024, we cannot assure you as to when, or if we will become profitable and generate positive cash flows.
If we issue additional shares of our common stock or other securities that may be convertible into, or exercisable or exchangeable for, our common stock, our existing stockholders will experience further dilution and could trigger anti-dilution provisions in outstanding warrants. We will likely need to raise additional capital in the future.
If we issue additional shares of our common stock or other securities that may be convertible into, or exercisable or exchangeable for, our common stock, our existing stockholders will experience further dilution and could trigger anti-dilution provisions in outstanding warrants. We may need to raise additional capital in the future.
Investments in new technology and processes are inherently speculative. Technical obstacles and challenges we encounter in our research and development process may result in delays in our abandonment of product commercialization, substantially increase the costs of development and negatively affect our results of operations.
Investments in new technology and processes are inherently speculative. Technical obstacles and challenges we encounter in our research and development process may result in delays in, or our abandonment of, product commercialization, substantially increase the costs of development and negatively affect our results of operations.
We are an emerging growth company until the earliest of: ● the last day of the fiscal year during which we have total annual gross revenues of $1.235 billion or more; ● the last day of the fiscal year following the fifth anniversary of our IPO; ● the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or ● the date on which we are deemed a “large accelerated issuer” as defined under the federal securities laws.
We are an emerging growth company until the earliest of: ● the last day of the fiscal year during which we have total annual gross revenues of $1.235 billion or more; ● the last day of the fiscal year following the fifth anniversary of our IPO; ● the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or ● the date on which we are deemed a “large accelerated filer” as defined under the federal securities laws.
As a result, you may suffer a loss on your investment. 25 We will likely need to raise additional capital in the future. Additional capital may not be available to us on reasonable terms, if at all, when or as we require.
As a result, you may suffer a loss on your investment. 25 We may need to raise additional capital in the future. Additional capital may not be available to us on reasonable terms, if at all, when or as we require.
Members of management are registered with the Defense Trade Controls Compliance (“DTCC”) program with the United States Department of State and maintains relations with additional subject matter experts on the topic of ITAR and international export controls. Currently, our sales do not require us to be registered with the DTCC, but sales of future products may require registration with DTCC.
Members of management are registered with the Defense Trade Controls Compliance (“DTCC”) program with the United States Department of State and maintain relations with additional subject matter experts on the topic of ITAR and international export controls. Currently, our sales do not require us to be registered with the DTCC, but sales of future products may require such registration.
During the years ended December 31, 2024 and 2023, UAS services provided to Florida Power & Light (FPL) represented approximately 49.0% and 27.6%, respectively, of our overall revenue. Our contract with FPL allows them to call upon us to provide UAS services under defined criteria at a defined price.
During the years ended December 31, 2025 and 2024, UAS services provided to Florida Power & Light (FPL) represented approximately 22.9% and 49.0%, respectively, of our overall revenue. Our contract with FPL allows them to call upon us to provide UAS services under defined criteria at a defined price.
Government programs in which we may seek to participate, and contracts for tethered aerostats and drones or microwave radios, must compete with other programs for consideration during Congress’ budget and appropriations hearings, and may be affected by changes not only in political power and appointments but also general economic conditions and other factors beyond our control.
Government programs in which we may seek to participate must compete with other programs for consideration during Congress’ budget and appropriations hearings, and may be affected by changes not only in political power and appointments but also general economic conditions and other factors beyond our control.
Growing and operating our business will require significant cash outlays, liquidity reserves and capital expenditures and commitments to respond to business challenges, including developing or enhancing new or existing products. As of December 31, 2024, we had cash on hand of $1,970,719.
Growing and operating our business will require significant cash outlays, liquidity reserves and capital expenditures and commitments to respond to business challenges, including developing or enhancing new or existing products. As of December 31, 2025, we had cash on hand of $16,793,088.
During the years ended December 31, 2024 and 2023, approximately 19.3% and 33.6%, respectively, of our revenues were derived from sales outside of the United States.
During the years ended December 31, 2025 and 2024, approximately 17.0% and 19.3%, respectively, of our revenues were derived from sales outside of the United States.
When determining whether to buy our common stock, you should also refer to the other information in this prospectus, including our financial statements and the related notes included elsewhere in this prospectus.
When determining whether to buy our common stock, you should also refer to the other information in this Annual Report on Form 10-K, including our financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.
If cash on hand, cash generated from operations, and the net proceeds from our IPO are not sufficient to meet our cash and liquidity needs, we may need to seek additional capital, potentially through debt or equity financing.
If cash on hand is not sufficient to meet our cash and liquidity needs, we may need to seek additional capital, potentially through debt or equity financing.
If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or product candidate development programs or the commercialization of any product candidate or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, operating results and prospects and cause the price of the common stock to decline. 12 Our losses from operations could continue to raise substantial doubt regarding our ability to continue as a going concern.
If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or product candidate development programs or the commercialization of any product candidate or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, operating results and prospects and cause the price of the common stock to decline. 12 If we are unable to obtain additional funding when needed, our business operations will be harmed, and if we do obtain additional financing, our then-existing shareholders may suffer substantial dilution.
Our bylaws and Delaware law may discourage, delay or prevent a change of control of our company or changes in our management, which could have the result of depressing the trading price of our common stock.
During 2025, the Company obtained D&O liability insurance with a term of one year, which was renewed until August of 2026. Our bylaws and Delaware law may discourage, delay or prevent a change of control of our company or changes in our management, which could have the result of depressing the trading price of our common stock.
At the end of the period December 31, 2024, our certifying officers concluded that the Company’s disclosure controls and procedures were not effective.
At the end of the period December 31, 2025, our certifying officers concluded that the Company’s disclosure controls and procedures were not effective. We believe our disclosure controls and procedures were not effective due to a lack of; segregation of duties within accounting functions and formalized accounting procedures.
While the Company anticipates continuing this trend, we have no assurances this will continue. We have incurred significant net losses since our inception. For the years ended December 31, 2024, and 2023, we have incurred net losses of $7,428,461 and $6,314,649, respectively. As of December 31, 2024, we had an accumulated deficit of $14,250,751.
We have incurred significant net losses since our inception. For the years ended December 31, 2025, and 2024, we have incurred net losses of $14,322,779 and $7,428,461, respectively. As of December 31, 2025, we had an accumulated deficit of $28,573,530.
If we are unable to obtain additional funding when needed, our business operations will be harmed, and if we do obtain additional financing, our then-existing shareholders may suffer substantial dilution. As we take steps in the commercialization and marketing of our products and technologies or respond to potential opportunities and/or adverse events, our working capital needs may change.
As we take steps in the commercialization and marketing of our products and technologies or respond to potential opportunities and/or adverse events, our working capital needs may change.
Moreover, no control environment, no matter how well designed and operated, can prevent or detect all errors or fraud.
We expect to have remedied the effectiveness of our controls and procedures during the second quarter of 2026. Moreover, no control environment, no matter how well designed and operated, can prevent or detect all errors or fraud.
Removed
We incurred net losses for the in the years ended December 31, 2024, and 2023, we cannot assure you as to when, or if we will become profitable and generate positive cash flows. For the years ended December 31, 2024 and 2023, revenue has increased $1,251,458 or 126.4%.
Added
We continue to implement additional policies and procedures to remedy our effectiveness and continue to upgrade our accounting software, as well as, seeking additional staff. We have engaged third parties to assist in the documentation of our corporate policies and to further address our personnel needs.
Removed
Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations. We do not have sufficient existing cash and cash equivalents, without giving effect to the proceeds from our IPO, to support operations for at least one year following the date our consolidated financial statements.
Removed
Our independent registered public accounting firm has included an explanatory paragraph in its report on our financial statements as of December 31, 2024, stating that our recurring losses and cash used from operations since inception and required additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern.
Removed
If we are unable to obtain sufficient funding, we could be forced to delay the implementation of our business plan, and our financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern.
Removed
Future financial statements may continue to disclose substantial doubt about our ability to continue as a going concern.
Removed
If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.
Removed
We believe our disclosure controls and procedures were and remain not effective due to; (i) a lack of segregation of duties within accounting functions, (ii) need for the establishment of an integrated accounting and manufacturing inventory ERP cloud-based software, in order to effectively track the movement of our inventory and add a layer of internal control for transaction approvals.
Removed
We have implemented additional policies and procedures to remedy our effectiveness and have actively started pursuing upgrading our accounting software, however, until we raise sufficient capital resources, to invest in accounting software and add personnel for the segregation of duties, we may not achieve our desired objectives.
Removed
In November of 2023, the Company obtained D&O liability insurance for an aggregate liability of $2,000,000, which has a term of one year, which the Company which was renewed till August of 2025.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeShould any cybersecurity threat or incident be detected, our senior management team would timely report such threat or incident to the Audit Committee and provide regular communications and updates throughout the incident and any subsequent investigation, in order that the impact, materiality, and reporting requirements of such incident are appropriately identified and assessed for further necessary or appropriate action to be taken .
Biggest changeShould any cybersecurity threat or incident be detected, our senior management team would timely report such threat or incident to the Audit Committee and provide regular communications and updates throughout the incident and any subsequent investigation, so that the impact, materiality, and reporting requirements of such incident are appropriately identified and assessed for further necessary or appropriate action to be taken .
Our Chief Executive Officer has over 20 years’ experience as a C-Level technology executive for private and public companies . The plan for the future is that our Chief Executive Officer will report to the Audit Committee on cybersecurity on a quarterly basis.
Our Chief Executive Officer has over 25 years’ experience as a C-Level technology executive for private and public companies . The plan for the future is that our Chief Executive Officer will report to the Audit Committee on cybersecurity on a quarterly basis.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Properties We do not own any real property. We currently rent our executive office space located in Aventura, Florida, which also houses employees of our Airborne Response business unit. We also lease a 7,000 sq. ft. facility located, in Hialeah, Florida, which is used for the manufacturing operations of our Safe-Pro USA business unit.
Biggest changeITEM 2. PROPERTIES Properties We do not own any real property. We currently rent our executive office space located in Aventura, Florida, which serves as the operational base for the parent and for two of our subsidiaries, Airborne Response and Safe Pro AI.
We believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed.
We also lease a 7,000 square foot facility located, in Hialeah, Florida, which is used for the manufacturing operations of our Safe-Pro USA business unit. We believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed.

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 become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Neither our company nor any of our subsidiaries currently is a party to any legal proceeding that, individually or in the aggregate, is material to our company as a whole.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Neither our company nor any of our subsidiaries is currently a party to any legal proceeding that, individually or in the aggregate, is material to our company as a whole.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe did not issue any equity securities during the fourth quarter of 2024 that were not registered under the Securities Act. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the year ended December 31, 2024.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers During the year ended December 31, 2025, the Company repurchased an aggregate of 162,454 shares of its common stock under its Treasury Stock Repurchase Program for total consideration of $676,034.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has traded on the NASDAQ under the symbol “SPAI” since August 29, 2024. Holders As of March 31, 2025, there were 719 holders of record for our shares common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has traded on the NASDAQ under the symbol “SPAI” since August 29, 2024. Holders As of March 31, 2026, there were 60 holders of record for our shares common stock.
Our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. 30 Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offering All information related to equity securities sold by us during the period covered by this report that was not registered under the Securities Act has been included in our Form 10-Q filings or in a Form 8-K filing.
Our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. 30 Recent Sales of Unregistered Securities All information related to equity securities sold by us during the period covered by this report that were not registered under the Securities Act have been included in our Form 10-Q filings or in a Form 8-K filing.
Added
Of the total consideration, $613,409 was paid in cash during the year ended December 31, 2025 and $62,625 was recorded in accounts payable as of December 31, 2025. All shares repurchased were recorded as treasury stock and are reflected as a reduction of stockholders’ equity in the accompanying consolidated balance sheet.
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The following table sets forth information regarding purchases made by or on behalf of the Company or any affiliated purchaser of shares of the Company’s common stock during the fourth quarter of the fiscal year ended December 31, 2025: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2025 - - - - November 1-30, 2025 - - - - December 1-31, 2025 162,454 $ 4.16 162,454 $ 2,323,966 Total 162,454 $ 4.16 162,454 $ 2,323,966

Item 7. Management's Discussion & Analysis

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

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Biggest changeResults of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table provides certain selected financial information for the periods presented: Consolidated Statement of Operations Data: Years Ended December 31, December 31, 2024 2023 Change % REVENUES: Product Sales $ 1,029,502 $ 622,455 $ 407,047 65.54 % Services 1,139,676 295,265 844,411 286.0 % Total Revenues 2,169,178 917,720 1,251,458 136.4 % COST OF REVENUES: Product sales 744,009 461,111 282,898 61.4 % Services 519,023 145,528 373,495 256.6 % Total Cost of Revenues 1,263,032 606,639 656,393 108.2 % Gross profit (loss) 906,146 311,081 595,065 191.3 % Operating expenses: Salary, wages and payroll taxes 2,263,223 1,324,386 938,837 70.9 % Stock-based compensation wages 2,015,178 979,000 1,036,178 105.8 % Total salary, wages, payroll taxes 4,278,401 2,303,386 1,975,015 85.7 % Research and development 90,372 373,655 (283,283 ) (75.8 )% Professional fees: Professional fees - other 1,083,091 671,240 411,851 61.4 % Stock based compensation – professional fees 1,078,806 2,637,700 (1,558,894 ) (59.1 )% Total Professional fees 2,161,897 3,308,940 (1,147,043 ) (34.7 )% Selling, general and administrative expenses 1,254,772 449,874 804,898 178.9 % Depreciation and amortization 272,705 182,156 90,549 49.7 % Total operating expenses 8,058,147 6,618,011 1,440,136 21.8 % Loss from operations (7,152,001 ) (6,306,930 ) (845,071 ) 13.4 % Other income (expense) Interest income 30,056 508 29,548 5,816.5 % Interest expense (306,516 ) (8,227 ) (298,289 ) 3,625.7 % Total Other income (expense) (276,460 ) (7,719 ) 268,741 3,481.6 % Net loss $ (7,428,461 ) $ (6,314,649 ) $ (1,113,812 ) 17.6 % Net loss per common share – basic and diluted $ (0.70 ) $ (0.79 ) $ 0.09 11.5 % Weighted average number of shares of common stock outstanding – basic & diluted 10,613,270 7,984,743 33 Consolidated Balance Sheet Data: Years Ended December 31, December 31, 2024 2023 Change % Cash $ 1,970,719 $ 703,368 $ 1,267,351 180.2 % Property and equipment, net 314,881 320,928 (6,047 ) (1.9 )% Working capital (2) 1,856,203 (142,821 ) 1,999,024 1,399.7 % Total assets 4,949,943 3,430,199 1,519,744 44.3 % Total liabilities 1,075,518 1,653,841 (578,323 ) (35.0 )% Accumulated deficit (14,250,751 ) (6,822,290 ) (7,428,461 ) 108.9 % Total stockholders’ equity $ 3,874,425 $ 1,776,358 $ 2,098,067 118.1 % Net Revenue.
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table provides certain selected financial information for the periods presented: Consolidated Statement of Operations Data: Years Ended December 31, December 31, 2025 2024 Change % REVENUES: Product Sales $ 361,266 $ 1,029,502 $ (668,236 ) (64.9 )% Services 245,415 1,139,676 (894,261 ) (78.5 )% Total Revenues 606,681 2,169,178 (1,562,497 ) (72.0 )% COST OF REVENUES: Product sales 201,235 675,632 (474,397 ) (70.2 )% Services 126,741 519,023 (392,282 ) (75.6 )% Depreciation Expense 76,527 68,377 8,150 11.9 % Total Cost of Revenues 404,503 1,263,032 (858,529 ) (68.0 )% Gross profit (loss) 202,178 906,146 (703,968 ) (77.7 )% Operating expenses: Salary, wages and payroll taxes 2,712,929 2,263,223 449,705 19.9 % Stock-based compensation wages 2,826,396 2,015,178 811,218 40.3 % Total salary, wages, payroll taxes 5,539,325 4,278,401 1,260,924 29.5 % Research and development 394,207 90,372 303,835 336.2 % Professional fees: Professional fees - other 1,466,739 1,083,091 383,648 35.4 % Stock based compensation – professional fees 4,080,709 1,078,806 3,001,903 278.3 % Total Professional fees 5,547,448 2,161,897 3,385,551 156.6 % Selling, general and administrative expenses 2,131,056 1,254,772 876,284 69.8 % Depreciation and amortization 304,803 272,705 32,098 11.8 % Impairment of goodwill 684,867 - 684,867 100.0 % Impairment of other intangibles 146,001 - 146,001 100.0 % Total operating expenses 14,747,707 8,058,147 6,689,560 83.0 % Loss from operations (14,545,529 ) (7,152,001 ) (7,393,528 ) 103.4 % Other income (expense) Other income 57,107 - 57,107 100.0 % Interest income 178,476 30,056 148,420 493.8 % Interest expense (12,833 ) (306,516 ) 293,683 (95.8 )% Total Other income (expense), net 222,750 (276,460 ) 499,210 180.6 % Net loss $ (14,322,779 ) $ (7,428,461 ) $ 6,894,318 92.8 % Net loss per common share – basic and diluted $ (0.85 ) $ (0.70 ) $ (0.15 ) 21.0 % Weighted average number of shares of common stock outstanding – basic & diluted 16,906,724 10,613,270 33 Consolidated Balance Sheet Data: Years Ended December 31, December 31, 2025 2024 Change % Cash $ 16,793,088 $ 1,970,719 $ 14,822,369 752.1 % Property and equipment, net 283,087 314,881 (31,794 ) (10.1 )% Working capital 16,677,602 1,856,203 14,821,399 798.5 % Total assets 19,114,804 4,949,943 14,164,861 286.2 % Total liabilities 1,397,791 1,075,518 322,273 30.0 % Accumulated deficit (28,573,530 ) (14,250,751 ) (14,322,779 ) 100.5 % Total stockholders’ equity $ 17,717,013 $ 3,874,425 $ 13,842,588 357.3 % Net Revenue.
Our revenues are generated primarily from the sale of our products, which consist primarily of personal protective gear (“PPE”) and ballistic protective equipment including Explosive Ordnance Disposal (“EOD”) and blast and fragmentation resistant vests and body armor, as well as aerial managed services (drones) for the inspection of customer’s critical infrastructure including radio towers and power grids.
Our revenues are generated primarily from the sale of our products and services, which consist primarily of personal protective gear (“PPE”) and ballistic protective equipment including Explosive Ordnance Disposal (“EOD”) and blast and fragmentation resistant vests and body armor, as well as aerial managed services (drones) for the inspection of customer’s critical infrastructure including radio towers and power grids.
Changes in operating assets and liabilities were reflected by increases in prepaid and other current assets of $265,611 and accrued expenses of $7,134; offset by decreases in accounts payable of 49,269, accrued compensation of $48,995, accounts receivable of 39,643, inventory of $17,098, and contract liabilities of $902.
Changes in operating assets and liabilities were reflected by increases in accounts receivable of $39,643, inventory of $17,098, and accrued expenses of $7,134; offset by decreases in prepaid and other current assets of $265,611, accounts payable of $49,269, accrued compensation of $48,995, and contract liabilities of $902.
During the year ended December 31, 2024, we had proceeds from the sale of our common stock offering of $4,179,500, proceeds from the exercise of warrants of $878,708, from the sale of common stock and warrants of $489,002, proceeds from the sale of convertible notes payable of $275,002, proceeds from the sale of notes payable of $236,500, offset by repayments of notes payable of $236,500, and repayment of due to related party of $23,038.
During the year ended December 31, 2024, we had proceeds from the sale of our common stock offering of $4,179,500, proceeds from the exercise of warrants of $878,708, proceeds from the sale of common stock and warrants of $489,002, proceeds from the sale of convertible notes payable of $275,002, proceeds from the sale of notes payable of $236,500, offset by repayments of notes payable of $236,500, and repayment of due to related party of $23,038.
Safe Pro AI Safe Pro AI will sell subscriptions and licenses to its customers for the use of its software under a software-as-a-service subscription model (“SaaS”), which will allow for the rapid, automated processing of aerial and ground-based imagery uploaded by customers, making it an ideal solution for a number of applications including defense, demining, in law enforcement and border security.
Safe Pro AI Safe Pro AI will primarily sell subscriptions and licenses to its customers for the use of its software under a software-as-a-service subscription model (“SaaS”), which will allow for the rapid, automated processing of aerial and ground-based imagery uploaded by customers, making it an ideal solution for a number of applications including defense, demining, in law enforcement and border security.
For acquisitions of an asset or a group of assets that does not constitute a business, the Company applies ASC 805-50 which provides guidance on acquisitions of assets rather than a business. Acquisitions of assets are accounted for using the cost accumulation and allocation model.
For acquisition of an asset or a group of assets that does not constitute a business, the Company applies ASC 805-50 which provides guidance on acquisitions of assets rather than a business. Acquisitions of assets are accounted for using the cost accumulation and allocation model.
For the year ending December 31, 2024, we expect selling, general and administrative expenses to increase, as we ramp up our sales and marketing expansion efforts to correspond with our increased production efforts, relating to our personal protective gear, the availability of additional AI-powered image processing solutions and new drone-based services such as Drone as a Responder (DFR).
For the year ending December 31, 2026, we expect selling, general and administrative expenses to increase, as we ramp up our sales and marketing expansion efforts to correspond with our increased production efforts, relating to our personal protective gear, the availability of additional AI-powered image processing solutions and new drone-based services such as Drone as a Responder (DFR).
Selling, General and Administrative expenses consist of expenses associated with our training programs, trade shows, marketing programs, promotional materials, demonstration equipment, commissions payable, national and local regulatory approvals of our products, travel, entertainment, recruiting, operating supplies such as, computer equipment, drones, EOD testing supplies; and facilities and other supporting overhead costs.
Selling, General and Administrative expenses consist of expenses associated with our training programs, trade shows, marketing programs, promotional materials, demonstration equipment, national and local regulatory approvals of our products, travel, entertainment, recruiting, operating supplies such as, computer equipment, drones, EOD testing supplies; and facilities and other supporting overhead costs.
During the year ended December 31, 2024 and 2023, the Company operated in three reportable business segments which consisted of (1) the business of Safe-Pro USA, (2) the business of Airborne Response, and (3) the business of Safe Pro AI. The Company’s reportable segments are strategic business units that offer different products.
During the year ended December 31, 2025 and 2024, the Company operated in three active reportable business segments which consisted of (1) the business of Safe-Pro USA, (2) the business of Airborne Response, and (3) the business of Safe Pro AI. The Company’s reportable segments are strategic business units that offer different products.
Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this prospectus. Business Overview We were incorporated in the State of Delaware on December 15, 2021.
Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K. Business Overview We were incorporated in the State of Delaware on December 15, 2021.
Under this model, customers are charged an upfront fee based upon the number of gigapixels of aerial images uploaded into the system for processing. For customer convenience, Safe Pro AI will initially charge data processing fees on a per hectare basis (1 hectare = 1,000 square meters).
The subscription tiers will utilize declining prices as the volume grows. Under this model, customers are charged an upfront fee based upon the number of gigapixels of aerial images uploaded into the system for processing. For customer convenience, Safe Pro AI will initially charge data processing fees on a per hectare basis (1 hectare = 1,000 square meters).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties.
Through a layered approach to the development and integration of advanced technologies in artificial intelligence, drone-based remote sensing technologies and services, and personal protective gear, Safe Pro Group seeks to provide government, NGOs and enterprises with innovative solutions designed to respond to evolving threats.
Through a layered approach to the development and integration of advanced technologies in artificial intelligence, drone-based remote sensing technologies and services, and personal protective gear, Safe Pro Group seeks to provide government, NGOs and enterprises with innovative solutions designed to respond to evolving threats. Currently, the Company’s revenue is primarily generated by its subsidiaries Airborne Response and Safe-Pro USA.
We recorded a net loss of $7,428,461 for the year ended December 31, 2024 as compared to a net loss of $6,314,649, for the year ended December 31, 2023. The increase is a result of the factors as described above.
We recorded a net loss of $14,322,779 for the year ended December 31, 2025 as compared to a net loss of $7,428,461, for the year ended December 31, 2024. The increase is a result of the factors as described above.
Liquidity and Capital Resources Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. At December 31, 2024, we had a cash balance of $1,970,719 and working capital of $1,856,203.
Liquidity and Capital Resources Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. At December 31, 2025, we had a cash balance of $16,793,088 and working capital of $16,677,602.
The Company adopted ASU No. 2023-07 on December 31, 2024. The adoption of the standard did not result in any significant disclosure changes in the Notes to the Consolidated Financial Statements. In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”).
The adoption of the standard did not result in any significant disclosure changes in the Notes to the Consolidated Financial Statements. In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement.
Discounts in multiple elements sold as a single arrangement are allocated proportionately to the individual elements based on the fair value charged when the element is sold separately.
Discounts in multiple elements sold as a single arrangement are allocated proportionately to the individual elements based on the fair value charged when the element is sold separately. 38 Airborne Response Airborne Response recognizes revenue when, or as, the performance obligation is satisfied.
Investing Activities Net cash flows used in investing activities were $436,389 and $30,172 for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, we purchased property and equipment for $63,801 and investment in intangible technologies of $375,588. For the year ended December 31, 2023, we purchased property and equipment for $30,172.
Investing Activities Net cash flows used in investing activities were $241,353 and $436,389 for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, we purchased property and equipment for $48,808 and made investments in intangible technologies of $192,545.
The decrease is comprised of decreases in; convertible notes payable, net of discount of $343,796, accrued compensation and benefits of $88,102, accounts payable of $49,269, accrued expenses of $51,396, contract liabilities of $902, current portion of lease liabilities of $5,407, offset by an increase in due to related parties of $16,069, which is representative of related party accrued wages. 35 Operating Activities Net cash flows used in operating activities for the year ended December 31, 2024 amounted to $4,095,434 and were primarily attributable to our net loss of $7,428,461 and lease costs of $9,144, offset by depreciation and amortization expense of $341,083, stock-based compensation and professional fees of $2,852,648, the relative fair value of options granted of $241,336, and amortization of debt discount of $208,006.
Net cash flows used in operating activities for the year ended December 31, 2024 amounted to $4,095,434 and were primarily attributable to our net loss of $7,428,461 and lease costs of $9,144, offset by depreciation and amortization expense of $341,083, stock-based compensation and professional fees of $2,852,648, the relative fair value of options granted of $241,336, and amortization of debt discount of $208,006.
Principle of Consolidation Our consolidated financial statements included in this prospectus include our accounts and those of our subsidiaries: Airborne Response Corp., Safe-Pro USA LLC, and Safe Pro AI LLC from their respective dates of acquisition. Segment Information The Company uses “the management approach” in determining reportable operating segments.
Principle of Consolidation Our consolidated financial statements included in this Annual Report on Form 10-K include our accounts and those of our active operating subsidiaries: Airborne Response Corp., Safe-Pro USA LLC, and Safe Pro AI LLC from their respective dates of acquisition.
Stock based compensation for wages were $2,015,178 and $979,000, for the years ended December 31, 2024 and 2023, respectively, an increase of $1,036,178, or 105.8%.
Stock based compensation for wages were $2,826,396 and $2,015,178, for the years ended December 31, 2025 and 2024, respectively, an increase of $811,218, or 40.3%.
Safe Pro AI’s, SaaS offerings are sold under a license or prepaid or postpaid, usage-based pricing system pursuant to a tiers model, allowing customers to choose the subscription level to be charged based upon their intended usage. The subscription tiers will utilize declining prices as the volume grows.
In the case of NODE, the combined solution includes specialized, commercially available hardware integrated with Safe Pro AI’s proprietary software. Safe Pro AI’s, SaaS offerings are sold under a license or prepaid or postpaid, usage-based pricing system pursuant to a tiers model, allowing customers to choose the subscription level to be charged based upon their intended usage.
Salaries, wages and payroll taxes were $2,263,233 and $1,324,386 for the years ended December 31, 2024 and 2023, respectively, an increase of $938,837, or 70.9%.
Salaries, wages and payroll taxes were $2,712,929 and $2,263,223 for the years ended December 31, 2025 and 2024, respectively, an increase of $449,705 or 19.9%.
ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and application may be applied prospectively or retrospectively.
ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and application may be applied prospectively or retrospectively. We are currently evaluating the potential effect that ASU 2024-03 will have on our consolidated financial statements.
The increase was due to certain contingencies in officers’ employment contracts, which were triggered at the time of the IPO. 34 Research and Development expenses were $90,372 and $373,655 for the years ended December 31, 2024 and 2023, respectively, a decrease of $283,283 or 75.8%.
The increase was due to certain contingencies in officers’ employment contracts and options granted for the year ended December 31, 2025. 34 Research and Development expenses were $394,207 and $90,372 for the years ended December 31, 2025 and 2024, respectively, an increase of $303,835 or 336.2%.
However, we are unable at this time to estimate the amount of the expected increases. Operating Expenses. Total operating expenses for the year ended December 31, 2024 were $8,058,147, an increase of $1,440,136, or 21.8%, from total operating expenses for the year ended December 31, 2023 of $6,618,011. Factors resulting in the increase are described more fully below.
Total operating expenses for the year ended December 31, 2025 were $14,747,707, an increase of $6,689,560 or 83.0%, from total operating expenses for the year ended December 31, 2024 of $8,058,147. Factors resulting in the increase are described more fully below.
Our current assets at December 31, 2024 increased by $1,476,221, or 115.9%, to $2,750,129 from $1,273,908, from December 31, 2023. The increase included an increase in cash of $1,267,351 and prepaid expenses and other current assets of $265,611, offset by a decrease in accounts receivable of $39,643 and inventory of $17,098.
Our current assets at December 31, 2025 increased by $15,178,317, or 551.9%, to $17,928,446 from $2,750,129 at December 31, 2024. The increase included an increase in cash of $14,822,369, inventory of $272,963, and prepaid expenses and other current assets of $106,643. These are partially offset by decreases in accounts receivable of $23,658.
During the years ended December 31, 2024 and 2023, the cost of revenues increased to $1,263,032 compared to $606,639. For the years ended December 31, 2024 and 2023, gross profit margins were 41.8% and 33.9% respectively.
During the years ended December 31, 2025 and 2024, the cost of revenues decreased to $404,503 compared to $1,263,032. For the years ended December 31, 2025 and 2024, gross profit margins were 33.3% and 41.8% respectively. The decrease in margin was attributable to a shift in product and service mix toward lower gross profit margin products and services. Operating Expenses.
Selling, general and administrative expenses were $1,254,772 and $449,874 for the years ended December 31, 2024 and 2023, respectively, an increase of $804,898 or 178.9%. The increase is attributable to travel, insurance related costs, employee benefits and marketing.
Selling, general and administrative expenses were $2,131,056 and $1,254,772 for the years ended December 31, 2025 and 2024, respectively, an increase of $876,284 or 69.8%. The increase is primarily attributable to increases in D&O insurance premiums, contractor fees and travel fees.
Financing Activities Net cash flows provided by financing activities were $5,799,174 and $985,152 for the years ended December 31, 2024 and 2023, respectively.
For the year ended December 31, 2024, we purchased property and equipment for $63,801 and made investments in intangible technologies of $372,588. Financing Activities Net cash flows provided by financing activities were $21,280,088 and $5,799,174 for the years ended December 31, 2025 and 2024, respectively.
Stock based compensation for services were $1,078,806 and $2,637,700, a decrease of $1,558,894 or 59.1%. The decrease is primarily attributable to restricted stock awards granted for the year ended December 31, 2023 and 2022, which were vested and issued in 2023, as compared to restricted stock awards granted and vested in 2024.
Stock based compensation for services were $4,080,709 and $1,078,806, an increase of $3,001,903 or 278.3%. The increase is primarily attributable to restricted stock awards granted for the year ended December 31, 2025, as compared to restricted stock awards granted and vested in 2024, and non-cash expenses for share-based professional fees recognized pursuant to contractual agreements.
We expect our expenses in each of these areas to continue to increase during fiscal 2025 and beyond as we expand our operations and begin generating additional revenues for our current business. However, we are unable at this time to estimate the amount of the expected increases. Total Other (Income) Expense.
There were no such impairments in the year ended December 31, 2024. The impairments resulted from an interim impairment assessment performed during the third quarter of 2025. We expect our expenses in each of these areas to continue to increase during fiscal 2026 and beyond as we expand our operations and begin generating additional revenues for our current business.
On August 30, 2023, Demining Development LLC filed an amended and restated Articles of Organization to change its name to Safe Pro AI LLC.
On August 30, 2023, Demining Development LLC filed an amended and restated Articles of Organization to change its name to Safe Pro AI LLC. On December 23, 2025, we formed SPAI Ventures LLC. Currently, SPAI Ventures is a non-active wholly owned subsidiary, that was established to pursue both strategic collaborations and investments with Ukrainian and other international tech developers.
Changes in operating assets and liabilities were reflected by increases in accounts receivable of $61,152, accounts payable of $118,038, contract liabilities of $40,692, accrued compensation of $69,041; and decreases in inventory of $5,083, prepaid and other current assets of $88,052 and accrued expenses of $18,023.
Changes in operating assets and liabilities were reflected by increases in accounts receivable of $23,658, accounts payable of $278,869, accrued expenses of $180,668 and lease liability of $11; offset by decreases in, accrued compensation of $51,619, inventory of $272,963, prepaid and other current assets of $106,643, and contract liabilities of $64,871.
Depreciation and amortization expenses were $272,705 and $182,156 for the years ended December 31, 2024 and 2023, respectively, an increase of $90,549, or 49.7%.
Depreciation and amortization expenses were $304,803 and $272,705 for the years ended December 31, 2025 and 2024, respectively, an increase of $32,098, or 11.8%. The increase is attributable to amortization related to assets put into service in the prior year. Impairments of goodwill and other intangibles were $684,867 and $146,001, respectively, for the year ended December 31, 2025.
Net cash flows used in operating activities for the year ended December 31, 2023 amounted to $2,003,878 and were primarily attributable to our net loss of $6,314,649, offset by depreciation and amortization expense of $239,009, stock-based compensation and professional fees of $3,616,700, amortization of debt discount of $1,454, contributed services of $210,000 and lease costs of $1,877.
Accounts payable and accrued expenses increased primarily due to higher year-end obligations related to contractor fees, professional fees including those related to the treasury stock repurchases, and insurance accruals. 35 Operating Activities Net cash flows used in operating activities for the year ended December 31, 2025 amounted to $6,216,366 and were primarily attributable to our net loss of $14,322,779 offset by depreciation and amortization expense of $381,330, impairment of goodwill of $684,867, impairment of other intangibles of $146,001, and stock-based compensation and professional fees of $6,907,105.
For two years ended December 31, 2024 and 2023, revenues generated were $2,169,178 and $917,720, an increase of $1,251,458 or 136.4%. Comparable sales for Airborne Response increased $985,598, or 333.8%, from $295,265 to $1,280,863. Comparable sales for Safe-Pro USA increased $250,819, or 40.3%, from $622,455 to $873,274.
For the years ended December 31, 2025 and 2024, revenues were $606,681 and $2,169,178, a decrease of $1,562,497 or 72.0%. Comparable sales for Airborne Response decreased $1,089,363, or 85.0%, from $1,280,863 to $191,500. Comparable sales for Safe-Pro USA decreased $532,498, or 61.0%, from $873,274 to $340,776. Comparable sales for Safe Pro AI increased $59,364, or 394.7%, from $15,041 to $74,405.
Removed
Comparable sales for Safe Pro AI increased $15,041, or 100.0%, from $0 to $15,041. The increase in revenue was attributable to; an increase in arial imaging services due to inclement weather and an increase in revenue generated for military grade bomb suits and law enforcement safety products. Cost of Sales.
Added
Through SPAI Ventures, Safe Pro Group, will evaluate opportunities in which to invest or to commercialize technologies that it believes could complement the capabilities of its portfolio of AI and ballistic protective solutions. SPAI Ventures has not made any investments or entered into any agreements.
Removed
The increase in margin was attributable to the increase in sales for aerial imaging services, which have a higher gross profit margin, as compared to our manufactured products. We expect our cost of revenues to continue to increase during fiscal 2025 and beyond, as we expand our operations and begin generating additional revenues under our current business.
Added
We expect to begin realizing revenue from Safe Pro AI for its Safe Pro Object Threat Detection (SPOTD) technology ecosystem - SpotlightAI™, OnSight and SPOTD NODE (Navigation, Observation & Detection Engine)- as a result of multiple completed demonstrations and evaluations in Ukraine, the Philippines and the United States during 2025, as well as planned demonstrations including events hosted by the U.S.
Removed
The increases were primarily attributable to the increases in personnel to accommodate the company’s expansion, in preparation for the Company’s initial public offering and certain contingencies in officers’ employment contracts, which were triggered at the time of the initial public offering.
Added
Army in early 2026. Furthermore, the Company expects to generate revenue through a number of strategic relationships formed during August and September of 2025 with select drone industry vendors introduced through its most recent investors such as Ondas Holdings Inc. and Unusual Machines Inc.
Removed
The decrease is primarily attributable to the capitalization of $372,588 for internal use software development for the year ending December 31, 2024, as the asset was put into service on July 1, 2024 and all charges prior to that were expensed accordingly.
Added
Further, the Company expects to generate revenue from Safe Pro AI through the delivery of AI-powered edge processing systems under a $1.0 million U.S. Government subcontract entered in February 2026, marking the Company’s first material government program revenue associated with its AI technology portfolio.
Removed
Professional fees were $1,083,091 and $671,240 for the years ended December 31, 2024 and 2023, respectively, an increase of $411,851 or 61.4%. The increase was attributable to legal, accounting and other costs associated with the preparation of the Company’s initial public offering and for the recurring compliance expenses related to being a public company.
Added
Not included in this Annual Report on Form 10-K, SPAI Ventures LLC, which is currently a non-operating subsidiary of the company. Segment Information The Company uses “the management approach” in determining reportable operating segments.
Removed
The increase is attributable to amortization related to assets put into service on July 1, 2024 and the accelerated amortization of an employment agreement balance for a cancelled agreement in Airborne Response due to a new agreement in the Company’s parent which became effective at time of the initial public offering.
Added
A substantial portion of revenue for Airborne Response, is with one customer, Florida Power & Light, (“FPL”). If there is positive weather patterns, the electrical power grid remains in stable condition requiring less maintenance and repair work, which results in fewer work orders for Airborne Response.
Removed
Our total other expenses were $276,460 compared to $7,719 during the years ended December 31, 2024 and 2023 respectively, an increase of $268,741 or 3,481.6%.
Added
For the years ended December 31, 2025 and 2024, the decrease in revenue for Airborne Response was primarily attributable to the lack of disruptions to the FPL electrical power grid, as a result of positive weather patterns, which included no active hurricanes.
Removed
The increase is primarily attributed to interest expense of $306,516 related to convertible debt in 2024, as compared to interest expense of $8,227, from the same period in 2023, and offset by an increase of interest income of $29,548. Net Income (Loss) .
Added
Airborne Response is currently in the process of completing a training program for a new revenue stream, providing nested flight services with FPL/NextEra. For the years ended December 31, 2025 and 2024, Safe-Pro USA’s decrease in revenue is attributable to the effects of U.S. Tariffs on Chinese products. The Company imports Security Guards’ uniforms from China.
Removed
Our current liabilities at December 31, 2024 decreased to $893,925 from $1,416,729 or a decrease of $522,804, or 36.9% from December 31, 2023.
Added
As a result of the high tariffs on goods imported from China, our business model is being reevaluated and recalibrated at this time, with the consequence that business is at its lowest level. Safe-Pro USA is in the process of sourcing additional customers along with obtaining government certifications to become a supplier for the U.S. government.
Removed
During the year ended December 31, 2023, we had proceeds from the sale of common stock and warrants of $1,005,249, proceeds from the sale of convertible notes payable of $475,000, proceeds from related party advances of $298,361, offset by repayments due to related party for $793,458.
Added
We expect to begin realizing additional revenue from Safe Pro AI for its Safe Pro Object Threat Detection (SPOTD) technology ecosystem - Spotlight AI™, SpotlightAI™ OnSight and SPOTD NODE (Navigation, Observation & Detection Engine)- as a result of multiple completed demonstrations and evaluations in Ukraine, the Philippines and the United States during 2026, as well as planned demonstrations including events hosted by the U.S.
Removed
Recently Issued Accounting Pronouncements In August 2020, FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) , (“ASU 2020-06”) to simplify accounting for certain financial instruments.
Added
Army in early 2026. As the Company begins to bring on SaaS and subscription customers related to its AI offerings, it is expected that revenue growth will have a more predictable trajectory and decrease the volatility from one-time contracts. Cost of Sales.
Removed
ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.
Added
The increases were primarily attributable to additional compensation expense related to employment agreements and incentive bonuses associated with current-year equity issuances, partially offset by a reduction in officer wages incurred pursuant to the terms of employment agreements with the Chief Executive Officer.
Removed
The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.
Added
The increase is primarily attributable to expanded development efforts and the engagement of external contractors to support enhancements to the artificial intelligence business. Professional fees were $1,466,739 and $1,083,091 for the years ended December 31, 2025 and 2024, respectively, an increase of $383,648 or 35.4%.
Removed
ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.
Added
The increases for the year ended December 31, 2025 as compared to 2024, were attributable to additional public company expenses including legal and investor relations fees, and additional director fees, related to the prior year, consisting of four months of fees versus a full year in 2025.
Removed
The adoption of the standard did not result in any significant disclosure changes in the Notes to the Consolidated Financial Statements. 36 In November 2023, the FASB issued ASU No. 2023-07 – “ Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures ”, which enables investors to better understand an entity’s overall performance and assess potential future cash flows through improved reportable segment disclosure requirements.
Added
However, we are unable at this time to estimate the amount of the expected increases. Total Other (Income) Expense. For the years ended December 31, 2025 and 2024, total other income (expense) was $222,750 and $(276,460), respectively, resulting in an increase of $499,210 or 180.6%.
Removed
The amendments enhance disclosures about significant segment expenses, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. ASU 2023-07 is effective for annual periods beginning after December 15, 2023.
Added
The increase was primarily driven by higher interest income resulting from increased cash balances associated with the private placements in 2025 and lower interest expense compared to the prior year. Net Income (Loss) .
Removed
We are currently evaluating the potential effect that ASU 2024-03 will have on our consolidated financial statements.
Added
The increase in cash is primarily a result of the proceeds from the private placements and warrant exercises in 2025. Our current liabilities at December 31, 2025 increased to $1,250,844 from $893,926 or an increase of $356,918, or 39.9% from December 31, 2024.
Removed
For the year ended December 31, 2023, a Safe-Pro USA, Bangladesh customer represented $308,354 of the Company’s total consolidated revenue, or 33.6%, (see Note 12), the Company has identified two performance obligations related to this customer: 1) The sale and delivery of safety equipment, ballistic and bomb vests, helmets, and other equipment. 2) Training and final inspections related to the sale of the equipment.
Added
The increase is comprised of increases in accounts payable of $341,494, accrued expenses of $180,668, due to related parties of $15,739, partially offset by decreases in current portion of lease liabilities of $7,955, accrued compensation of $108,157 and contract liabilities of $64,871.
Removed
The Company estimated the allocation of the transaction price to each of the above performance obligations since it does not have evidence of the standalone selling process, which is summarized as follows: ● Performance Obligation 1 - Historically, the Company has received 80% of the contract price upon shipment and presentation of required documents. ● Performance Obligation 2 - The remaining 20% of the contract price shall be authorized and received after 1) post-shipment inspection is performed, functionality testing is performed, and approval of the testing is granted.
Added
During the year ended December 31, 2025, we had proceeds from the sale of our common stock in private placement offerings of $12,945,000, proceeds from the sales of common stock and warrants in private placement offerings of $6,767,500, proceeds from the exercise of warrants of $1,511,570, proceeds from sale of Preferred Series C shares and warrants of $1,050,000, proceeds from exercise of options of $12,750, and proceeds from related party advances of $141,866 and partially offset by payments for employee tax withholdings on net share settlement of $465,601, related party repayments of $69,588, and purchases of treasury stock in connection with our Stock Repurchase Program of $613,409.
Removed
The 20% is triggered after testing and training. Local training with the contracted items consists of 1) use and care training, 2) engineering, repair, & maintenance, and 3) inventory management. Historically, the remaining 20% has not been collected.
Added
Recently Issued Accounting Pronouncements 36 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures . This ASU requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold.
Removed
Although the Company believes this 20% will ultimately be collected, due to the historical non-payment of this 20%, the Company will not record such revenue until such time as collection is probable and all training and inspections are completed (See Note 11 – Commitments regarding this revenue stream).
Added
The amendment also includes other changes to improve the effectiveness of income tax disclosures, including further disaggregation of income taxes paid for individually significant jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 on December 31, 2025.
Removed
In connection with the revenue associated with the former customer discussed above, the Company paid a commission of approximately 10% of the amounts collected to local agents that assisted with the facilitation of training, shipment, and documentation.

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