UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-53461

High Wire Networks, Inc.

(Exact name of registrant as specified in its charter)

Nevada		81-5055489
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

30 North Lincoln Street, Batavia, Illinois		60510
(Address of principal executive offices)		(Zip Code)

952-974-4000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ YES ☐ NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ YES ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ YES ☒ NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ YES ☐ NO

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock		HWNI		OTCQB

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The registrant had 1,004,605 common shares issued and outstanding as of May 13, 2025.

Table of Contents

PART I - FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
PART II - OTHER INFORMATION		41
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
SIGNATURES		43

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The unaudited interim condensed consolidated financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars, unless otherwise noted.

High Wire Networks, Inc.

	Page
	Number

Condensed consolidated balance sheets as of March 31, 2025 (unaudited) and December 31, 2024	2

Condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 (unaudited)	3

Condensed consolidated statements of stockholders’ equity (deficit) for the three months ended March 31, 2025 and 2024 (unaudited)	4

Condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 (unaudited)	5

Notes to unaudited condensed consolidated financial statements	6

High Wire Networks, Inc.

Condensed consolidated balance sheets

	March 31,			December 31,
	2025			2024
ASSETS
Current assets:
Cash	$	163,896		$	220,824
Accounts receivable, net of allowances of $184,344 and $171,444, respectively, and unbilled revenue of $4,786 and $7,845, respectively		974,839			830,261
Prepaid expenses and other current assets		233,632			212,660
Total current assets		1,372,367			1,263,745

Property and equipment, net of accumulated depreciation of $794,507 and $732,804, respectively		723,535			785,238
Goodwill		605,584			605,584
Intangible assets, net of accumulated amortization of $1,604,418 and $1,481,907, respectively		2,835,328			2,957,839
Operating lease right-of-use assets		147,704			174,365
Total assets	$	5,684,518		$	5,786,771

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities	$	4,671,179		$	4,272,058
Contract liabilities		5,208			25,144
Current portion of loans payable to related parties		370,029			358,557
Current portion of loans payable, net of debt discount of $47,053 and $46,969, respectively		1,575,093			1,297,602
Current portion of convertible debentures, net of debt discount of $129,197 and $58,459, respectively		1,967,453			838,192
Warrant liabilities		73,200			80,520
Operating lease liabilities, current portion		113,598			110,856
Current liabilities of discontinued operations		505,782			505,782
Total current liabilities		9,281,542			7,488,711

Loans payable, net of current portion		70,100			78,125
Operating lease liabilities, net of current portion		39,713			69,094
Total liabilities		9,391,355			7,635,930

Commitments and contingencies (Note 14)

Series B preferred stock; $3,500 stated value; 1,000 shares authorized; 1,000 issued and outstanding as of March 31, 2025 and December 31, 2024		-			-
Total mezzanine equity		-			-

Stockholders’ equity (deficit):
Common stock; $0.00001 par value; 1,000,000,000 shares authorized; 1,004,605 and 970,319 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		10			10
Series D preferred stock; $10,000 stated value; 1,590 shares authorized; 943 issued and outstanding as of March 31, 2025 and December 31, 2024		7,745,643			7,745,643
Series E preferred stock; $10,000 stated value; 650 shares authorized; 311 issued and outstanding as of March 31, 2025 and December 31, 2024		4,869,434			4,869,434
Series F preferred stock; $1,000 stated value; 120 shares authorized; 90 and 0 issued and outstanding as of March 31, 2025 and December 31, 2024		331,439			-
Additional paid-in capital		32,833,510			32,466,050
Accumulated deficit		(49,486,873	)		(46,930,296	)
Total stockholders’ equity (deficit)		(3,706,837	)		(1,849,159	)
Total liabilities and stockholders’ equity (deficit)	$	5,684,518		$	5,786,771

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

High Wire Networks, Inc.

Condensed consolidated statements of operations

(Unaudited)

	For the three months ended
	March 31,
	2025			2024
Revenue	$	2,171,626		$	2,061,503

Operating expenses:
Cost of revenue		1,410,054			1,122,018
Depreciation and amortization		184,214			188,338
Salaries and wages		1,018,609			1,320,219
General and administrative		880,262			958,253
Total operating expenses		3,493,139			3,588,828

Loss from operations		(1,321,513	)		(1,527,325	)

Other income (expense):
Interest expense		(160,585	)		(243,036	)
Amortization of debt discounts		(671,228	)		(432,934	)
Warrant expense		-			(214,737	)
Gain on change in fair value of warrant liabilities		7,320			241,993
Exchange loss		-			(14,888	)
Termination and penalty fee		(410,571	)		(100,000	)
Total other (expense)		(1,235,064	)		(763,602	)

Net loss from continuing operations before income taxes		(2,556,577	)		(2,290,927	)
Provision for income taxes		-			-
Net loss from continuing operations		(2,556,577	)		(2,290,927	)
Net income from discontinued operations, net of tax		-			1,876,489
Net loss attributable to High Wire Networks, Inc. common shareholders	$	(2,556,577	)	$	(414,438	)

Income (loss) per share attributable to High Wire Networks, Inc. common shareholders, basic and diluted:
Net loss from continuing operations	$	(2.62	)	$	(2.38	)
Net income from discontinued operations, net of taxes	$	-		$	1.95
Net loss per share	$	(2.62	)	$	(0.43	)

Weighted average common shares outstanding basic and diluted		977,270			962,155

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

High Wire Networks, Inc.

Condensed consolidated statements of stockholder’s equity (deficit)

(Unaudited)

	Common stock				Series D preferred stock				Series E preferred stock				Series F preferred stock				Additional paid-in		Accumulated
	Shares		$		Shares		$		Shares		$		Shares		$		capital		deficit			Total
Balances, January 1, 2024		959,508	$	10		943	$	7,745,643		311	$	4,869,434		-	$	-	$	31,180,754	$	(46,545,470	)	$	(2,749,629	)
Issuance of common stock and warrants upon issuance of debt		2,974		-		-		-		-		-		-		-		56,286		-			56,286
Stock-based compensation		-		-		-		-		-		-		-		-		136,100		-			136,100
Net loss for the period		-		-		-		-		-		-		-		-		-		(414,438	)		(414,438	)
Ending balance, March 31, 2024		962,482	$	10		943	$	7,745,643		311	$	4,869,434		-	$	-	$	31,373,140	$	(46,959,908	)	$	(2,971,681	)

Balances, January 1, 2025		970,319	$	10		943	$	7,745,643		311	$	4,869,434		-	$	-	$	32,466,050	$	(46,930,296	)	$	(1,849,159	)
Issuance of common stock pursuant to equity line of credit		34,286		-		-		-		-		-		-		-		260,571		-			260,571
Issuance of Series F preferred stock and warrants in connection with debt		-		-		-		-		-		-		90		331,439		96,092		-			427,531
Stock-based compensation		-		-		-		-		-		-		-		-		10,797		-			10,797
Net loss for the period		-		-		-		-		-		-		-		-		-		(2,556,577	)		(2,556,577	)
Ending balance, March 31, 2025		1,004,605	$	10		943	$	7,745,643		311	$	4,869,434		90	$	331,439	$	32,833,510	$	(49,486,873	)	$	(3,706,837	)

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

High Wire Networks, Inc.

Condensed consolidated statements of cash flows

(Unaudited)

	For the three months ended
	March 31,
	2025			2024
Cash flows from operating activities:
Net loss from continuing operations	$	(2,556,577	)	$	(2,290,927	)

Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
Amortization of debt discounts		671,228			432,934
Depreciation and amortization		184,214			188,338
Amortization of operating lease right-of-use assets		26,661			25,474
Stock-based compensation related to stock options		10,797			136,100
Gain on change in fair value of warrant liabilities		(7,320	)		(241,993	)
Issuance of common stock pursuant to equity line of credit		260,571			-
Warrant expense		-			214,737
Penalty fee		-			100,000
Changes in operating assets and liabilities:
Accounts receivable		(144,578	)		(3,812,763	)
Prepaid expenses and other current assets		(20,972	)		(195,222	)
Accounts payable and accrued liabilities		409,174			1,120,333
Contract liabilities		(19,936	)		303,434
Operating lease liabilities		(26,639	)		(24,088	)
Net cash used in operating activities of continuing operations		(1,213,377	)		(4,043,643	)
Net cash provided by operating activities of discontinued operations		-			2,476,921
Net cash used in operating activities		(1,213,377	)		(1,566,722	)

Purchase of fixed assets		-			(13,721	)
Net cash provided by investing activities		-			(13,721	)

Cash flows from financing activities:
Proceeds from loans payable to related parties		242,000			-
Repayments of loans payable to related parties		(240,000	)		-
Proceeds from loans payable		544,900			-
Repayments of loans payable		(300,451	)		(285,211	)
Proceeds from convertible debentures		910,000			431,150
Repayments of convertible debentures		-			(19,528	)
Proceeds from factor financing		-			5,035,007
Repayments of factor financing		-			(3,650,713	)
Net cash (used in) provided by financing activities of continuing operations		1,156,449			1,510,705
Net cash used in financing activities of discontinued operations		-			-
Net cash (used in) provided by financing activities		1,156,449			1,510,705

Net decrease in cash		(56,928	)		(69,738	)

Cash, beginning of period		220,824			333,357
Cash, end of period	$	163,896		$	263,619

Supplemental disclosures of cash flow information:
Cash paid for interest	$	117,689		$	132,219
Cash paid for income taxes	$	-		$	-

Non-cash investing and financing activities:
Original issue discounts on loans payable and convertible debentures	$	742,052		$	58,520
Issuance of Series E preferred stock in connection with debt	$	427,531		$	-
Issuance of common stock and warrants upon issuance of debt	$	-		$	56,286

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

High Wire Networks, Inc.

Notes to the unaudited condensed consolidated financial statements

March 31, 2025

1.	Organization

HWN, Inc., (d/b/a High Wire Network Solutions, Inc.) (“HWN” or the “Company”) was incorporated in Delaware on January 20, 2017. The Company is a global provider of managed cybersecurity and managed networks delivered exclusively through a channel sales model. The Company’s Overwatch managed security platform-as-a-service offers organizations end-to-end protection for networks, data, endpoints and users via multiyear recurring revenue contracts in this fast-growing technology segment.

HWN and JTM Electrical Contractors, Inc. (“JTM”), an Illinois Corporation, entered into an operating agreement through which High Wire owned 50% of JTM.

On June 16, 2021, the Company completed a merger with Spectrum Global Solutions, Inc. On January 7, 2022, Spectrum Global Solutions, Inc. legally changed its name to High Wire Networks, Inc. (“High Wire” or, collectively with HWN, “the Company”). The merger was accounted for as a reverse merger. At the time of the reverse merger, High Wire’s subsidiaries included ADEX Corporation, ADEX Puerto Rico LLC, ADEX Canada, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively “ADEX” or the “ADEX Entities”), AW Solutions Puerto Rico, LLC (“AWS PR”), and Tropical Communications, Inc. (“Tropical”). For accounting purposes, HWN is the surviving entity.

High Wire was incorporated in the State of Nevada on January 22, 2007 to acquire and commercially exploit various new energy related technologies through licenses and purchases. On December 8, 2008, High Wire reincorporated in the province of British Columbia, Canada.

On November 4, 2021, the Company closed on its acquisition of Secure Voice Corp (“SVC”). The closing of the acquisition was facilitated by a senior secured promissory note.

On February 15, 2022, HWN sold its 50% interest in JTM, which qualified for discontinued operations treatment.

On March 6, 2023, HWN divested the ADEX Entities. The divestiture of the ADEX Entities qualified for discontinued operations treatment (refer to Note 17, Discontinued Operations, for additional detail).

On July 31, 2023, the Company paused the operations of its AWS PR subsidiary and sold off certain assets.

On August 4, 2023, the Company formed a new entity – incorporated as Overwatch Cyberlab, Inc. (“OCL”) – which is 80% owned by the Company and 20% owned by John Peterson.

On November 3, 2023, the Company paused the operations of its Tropical subsidiary.

On June 27, 2024, HWN entered into an asset purchase agreement with INNO4 LLC (the “Buyer”) pursuant to which the Buyer agreed to purchase certain assets of HWN related to the Company’s technology services business unit (refer to Note 3, Recent Subsidiary Activity, for additional detail). The assets related to the technology services business unit qualified for discontinued operations treatment. Additionally, the asset purchase agreement includes a non-compete which precludes the Company from operating businesses similar to that of AWS PR and Tropical. As a result, both subsidiaries also now qualify for discontinued operations treatment. (refer to Note 17, Discontinued Operations, for additional detail).

The Company’s SVC subsidiary is a wholesale network services provider with network footprint and licenses in the Northeast and Southeast United States as well as Texas. This network carries VoIP and other traffic for other service providers.

2.	Significant Accounting Policies

Condensed Financial Statements

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

Basis of Presentation/Principles of Consolidation

These unaudited condensed consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. These unaudited condensed consolidated financial statements include the accounts of the Company as well as High Wire and its subsidiaries, SVC and OCL. All subsidiaries are wholly-owned except for OCL where the Company holds 80% ownership. OCL had no operations in 2025 or 2024.

All inter-company balances and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company records unbilled receivables for services performed but not billed. Management reviews a customer’s credit history before extending credit. The Company maintains an allowance for doubtful accounts for estimated losses. Estimates of uncollectible amounts are reviewed each period, and changes are recorded in the period in which they become known. Management analyzes the collectability of accounts receivable each period. This review considers the aging of account balances, historical bad debt experience, and changes in customer creditworthiness, current economic trends, customer payment activity and other relevant factors. Should any of these factors change, the estimate made by management may also change. The allowance for doubtful accounts at March 31, 2025 and December 31, 2024 was $184,344 and $171,444, respectively.

Property and Equipment

Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates:

Computers and office equipment		3-7 years straight-line basis
Vehicles		3-5 years straight-line basis
Leasehold improvements		5 years straight-line basis
Software		5 years straight-line basis
Machinery and equipment		5 years straight-line basis

Goodwill

The Company has two reporting units, HWN and SVC, and tests its goodwill for impairment at least annually on December 31 and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results.

The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during the three months ended March 31, 2025 and 2024.

Intangible Assets

At March 31, 2025 and December 31, 2024, definite-lived intangible assets consisted of tradenames and customer relationships which are being amortized over their estimated useful lives of 10 years.

The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives.

For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. There were no impairment charges during the three months ended March 31, 2025 and 2024.

Long-lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges during the three months ended March 31, 2025 and 2024.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Company conducts business, and files federal and state income, franchise or net worth, tax returns in United States, in various states within the United States and the Commonwealth of Puerto Rico. The Company determines its filing obligations in a jurisdiction in accordance with existing statutory and case law. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2020 to 2024. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of the U.S. have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above.

Significant management judgment is required in determining the provision for income taxes, and in particular, any valuation allowance recorded against the Company’s deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods. The realization of these assets is dependent on generating future taxable income.

The Company follows the guidance set forth within ASC 740, “Income Taxes” which prescribes a two-step process for the financial statement recognition and measurement of income tax positions taken or expected to be taken in an income tax return. The first step evaluates an income tax position in order to determine whether it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. The second step measures the benefit to be recognized in the financial statements for those income tax positions that meet the more likely than not recognition threshold. ASC 740 also provides guidance on de-recognition, classification, recognition and classification of interest and penalties, accounting in interim periods, disclosure and transition. Penalties and interest, if incurred, would be recorded as a component of current income tax expense.

Prior to 2021, the Company had elected to be treated as a Subchapter S Corporation for income tax purposes, and as such recognized no income tax liability or benefit.

Revenue Recognition

The Company recognizes revenue based on the five criteria for revenue recognition established under ASC 606, “Revenue from Contracts with Customers”: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

Contract Types

The Company’s contracts fall under two main types: 1) fixed-price and 2) time-and-materials. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the project progresses and milestones are reached. Time-and-materials contracts include employees working on an as needed basis at customer locations and materials costs incurred by those employees.

A significant portion of the Company’s revenues come from customers with whom the Company has a master service agreement (“MSA”). These MSA’s generally contain customer specific service requirements.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types, the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases, this may be each day or each week, depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work.

Revenue Service Types

The following is a description of the Company’s revenue service types:

●

Managed Services: The Managed Services Segment encompasses all of our recurring revenue businesses including our Overwatch Managed Cybersecurity, all network managed services, all managed services performed under a Statement of Work (SoW), and

●

SVC, which is a wholesale network services provider with network footprint in the Northeast United States. This network carries VoIP and other traffic for other service providers revenue.

Disaggregation of Revenues

The Company disaggregates its revenue by operating segment (refer to Note 15, Segment Disclosures, for additional information).

Contract Assets and Liabilities

Contract assets would include costs and services incurred on contracts with open performance obligations. These amounts would be included in contract assets on the unaudited condensed consolidated balance sheets. At March 31, 2025 and December 31, 2024, the Company did not have any contract assets.

Contract liabilities include payment received for incomplete performance obligations and are included in contract liabilities on the unaudited condensed consolidated balance sheets. At March 31, 2025 and December 31, 2024, contract liabilities totaled $5,208 and $25,144, respectively.

Cost of Revenues

Cost of revenues includes all direct costs of providing services under the Company’s contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment, direct materials, insurance claims and other direct costs.

Research and Development Costs

Research and development costs are expensed as incurred.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation”, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the grant date fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718, at either the grant date fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Accounting Standards Update (“ASU”) 2018-07. In accordance with ASU 2016-09, the Company accounts for forfeitures as they occur.

The Company uses certain pricing models to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period, which is generally the vesting period.

(Loss) Income per Share

The Company computes (loss) income per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing the (loss) income available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the conversion of convertible debentures or preferred stock and the exercise of stock options or warrants. Diluted EPS excludes dilutive potential shares if their effect is anti-dilutive. As of March 31, 2025 and December 31, 2024, respectively, the Company had 1,132,008 and 561,197 common stock equivalents outstanding.

Leases

ASC 842, “Leases” requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Certain of the Company’s lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised.

The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of January 1, 2019. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities, Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.

Going Concern Assessment

Management assesses going concern uncertainty in the Company’s unaudited condensed consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the unaudited condensed consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period.

The Company generated operating losses in the three months ended March 31, 2025 and 2024, and High Wire has historically generated operating losses since its inception and has relied on cash on hand, sales of securities, external bank lines of credit, and issuance of third-party and related party debt to support cash flow from operations. As of and for the three months ended March 31, 2025, the Company had an operating loss of $1,321,513, cash flows used in continuing operations of $1,213,377, and a working capital deficit of $7,909,175. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these unaudited condensed consolidated financial statements.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business.

Management believes that based on relevant conditions and events that are known and reasonably knowable, its forecasts of operations for one year from the date of the filing of the unaudited condensed consolidated financial statements in the Company’s Quarterly Report on Form 10-Q indicate improved operations and the Company’s ability to continue operations as a going concern. The Company has contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look forward period. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. These unaudited condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management requires additional funds over the next twelve months to fully implement its business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover its operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains its cash balances with high-credit-quality financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be withdrawn upon demand and therefore bear minimal risk. As of March 31, 2025 and December 31, 2024, there were no cash balances in excess of provided insurance.

The Company provides credit to customers on an uncollateralized basis after evaluating client creditworthiness. For the three months ended March 31, 2025 and 2024, no customers accounted for 10% or more of consolidated revenues. As of March 31, 2025, two customers accounted for 15% and 8% of trade accounts receivable, respectively. As of December 31, 2024, two customers accounted for 15% and 12% of trade accounts receivable, respectively.

The Company’s customers are all located within the domestic United States of America

Fair Value Measurements

The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows:

Level 1 – quoted prices for identical instruments in active markets;

Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments consist principally of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, loans payable and convertible debentures. Warrant liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. There were no transfers into or out of “Level 3” during the three months ended March 31, 2025 and 2024. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

The Company’s financial assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2025 and December 31, 2024 consisted of the following:

	Total fair value at March 31, 2025		Quoted prices in active markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Description:
Warrant liabilities	$	73,200	$	-	$	-	$	73,200

		Total fair value at December 31, 2024		Quoted prices in active markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Description:
Warrant liabilities	$	80,520	$	-	$	-	$	80,520

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Refer to Note 9, Warrant Liabilities, for additional information.

Warrant Liabilities

The Company accounts for its liability-classified warrants in accordance with ASC 480, “Distinguishing Liabilities from Equity” and all warrant liabilities are reflected as liabilities at fair value in the balance sheet. The Company uses estimates of fair value to value its warrant liabilities. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of March 31, 2025 and December 31, 2024, respectively, the Company had warrant liabilities of $73,200 and $80,520.

Sequencing Policy

Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy.

Recent Accounting Pronouncements

Any new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations.

3.	Recent Subsidiary Activity

HWN Asset Purchase Agreement

On June 27, 2024, HWN entered into an asset purchase agreement with INNO4 LLC pursuant to which INNO4 LLC agreed to purchase certain assets of HWN related to the Company’s technology services business unit, for a base purchase price equal to $11,200,000, subject to adjustment as set forth in the agreement.

Upon closing, (i) $300,000 of the purchase price was deposited into escrow to satisfy HWN’s post-closing working capital adjustment obligations, if any, (ii) $75,000 of the purchase price was deposited into escrow to satisfy HWN’s post-closing indemnification obligations, if any, and (iii) $250,000 of the purchase price was deposited into escrow to satisfy performance revenue targets. This amount will be released to HWN if gross revenue of the technology services business unit related to the sold assets between July 1, 2024 and September 30, 2024 is greater than or equal to $3,756,675. If the revenue is below $3,756,675 but at least $3,000,000, 50% of the escrow amount will be released to HWN and 50% will be released to INNO4 LLC. If revenue is below $3,000,000, the full $250,000 will be released to INNO4 LLC.

The Company considered whether or not this transaction would cause the sold assets to qualify for discontinued operations treatment. The Company determined that the sale of the assets qualifies for discontinued operations treatment in 2024 due to the size of their operations and because the sale represents a strategic shift (refer to Note 17, Discontinued Operations, for additional detail).

In connection with the sale, the Company recorded a gain on sale of business unit of $7,950,773 to the consolidated statement of operations for the year ended December 31, 2024. Additionally, the operations of the assets are included within net income (loss) from discontinued operations, net of taxes on the unaudited condensed consolidated statement of operations for the three months ended March 31, 2025 and 2024.

Additionally, the asset purchase agreement includes a non-compete which precludes the Company from operating businesses similar to that of AWS PR and Tropical. As a result, both subsidiaries also now qualify for discontinued operations treatment in 2025 and 2024 (refer to Note 17, Discontinued Operations, for additional detail). Additionally, the operations of AWS PR and Tropical are included within net income (loss) from discontinued operations, net of taxes on the unaudited condensed consolidated statement of operations for the three months ended March 31, 2025 and 2024.

4.	Property and Equipment

Property and equipment as of March 31, 2025 and December 31, 2024 consisted of the following:

	March 31,			December 31,
	2025			2024
Computers and office equipment	$	187,008		$	187,008
Vehicles		11,938			11,938
Leasehold improvements		6,113			6,113
Software		474,183			474,183
Machinery and equipment		838,800			838,800
Total		1,518,042			1,518,042

Less: accumulated depreciation		(794,507	)		(732,804	)
Equipment, net	$	723,535		$	785,238

During the three months ended March 31, 2025 and 2024, the Company recorded depreciation expense of $61,703 and $62,646, respectively.

5.	Goodwill and Intangible Assets

As of March 31, 2025 and December 31, 2024, the HWN reporting unit had goodwill of $382,750 and the SVC reporting unit had goodwill of $222,834, all respectively.

Intangible assets as of March 31, 2025 and December 31, 2024 consisted of the following:

	Cost		Accumulated Amortization			Net carrying value at March 31, 2025		Net carrying value at December 31, 2024
Customer relationship and lists	$	3,885,679	$	(1,403,819	)	$	2,481,860	$	2,589,035
Trade names		554,067		(200,599	)		353,468		368,804
Total intangible assets	$	4,439,746	$	(1,604,418	)	$	2,835,328	$	2,957,839

During the three months ended March 31, 2025 and 2024, the Company recorded amortization expense of $122,511 and $125,692, respectively.

The estimated future amortization expense for the next five years and thereafter is as follows:

Year ending December 31,
2025	$	321,494
2026		444,005
2027		444,005
2028		444,005
Thereafter		1,181,819
Total	$	2,835,328

6.	Related Party Transactions

Loans Payable to Related Parties

As of March 31, 2025 and December 31, 2024, the Company had outstanding the following loans payable to related parties:

	March 31,			December 31,
	2025			2024
Promissory note issued to Mark Porter, 9% interest, unsecured, matures December 31, 2025	$	118,358		$	115,672
Convertible promissory note issued to Mark Porter, 12% interest, secured, matures December 31, 2025		251,671			242,885
Total	$	370,029		$	358,557

Less: Current portion of loans payable to related parties		(370,029	)		(358,557	)

Loans payable to related parties, net of current portion	$	-		$	-

Promissory note, Mark Porter, 9% interest, unsecured, matures December 31, 2025

On June 1, 2021, the Company issued a $100,000 promissory note to the Chief Executive Officer of the Company in connection with the 2021 merger transaction. The note was originally due on December 15, 2021 and bears interest at a rate of 9% per annum.

On December 15, 2021, this note matured and was due on demand.

On June 28, 2024, the Company and the holder of the note entered into an amendment whereby outstanding accrued interest was added to the principal balance and the due date of the note was changed to December 31, 2025. The updated principal amount was $136,346. Additionally, the Company began making monthly payments of $3,393 in July 2024.

During the three months ended March 31, 2025, the Company paid no amount to the original balance under the note.

As March 31, 2025 and December 31, 2024, the Company owed $118,358 and $115,672, respectively, pursuant to this agreement.

Convertible promissory note, Mark Porter, 12% interest, unsecured, matures December 31, 2025

On December 6, 2023, the Company issued to Mark Porter an unsecured promissory note in the aggregate principal amount of $165,000. The Company received cash of $150,000 and recorded a debt discount of $15,000. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. All outstanding principal and accrued interest under the note was due on February 5, 2024.

The note was extended to December 31, 2025.

On June 28, 2024, the Company and the holder of the note entered into an amendment whereby outstanding accrued interest and a penalty of $75,000 was added to the principal balance and the due date of the note was changed to December 31, 2025. The updated principal amount is $253,529. Additionally, the Company is to begin making monthly payments of $6,320 in July 2024.

During the three months ended March 31, 2025, the Company received short-term proceeds of $242,000 and made repayments of $240,000 under the note.

As March 31, 2025 and December 31, 2024, the Company owed $251,671 and $242,885, respectively, pursuant to this agreement.

7.	Loans Payable

As of March 31, 2025 and December 31, 2024, the Company had outstanding the following loans payable:

	March 31,			December 31,
	2025			2024
Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures June 1, 2025	$	125,000		$	156,250
Future receivables financing agreement with Pawn Funding, non-interest bearing, matures June 1, 2025		125,000			156,250
Future receivables financing agreement with Slate Advance LLC, non-interest bearing, matures December 1, 2025		179,055			195,333
Future receivables financing agreement with Meged Funding Group, non-interest bearing, matures July 1, 2025		200,000			240,000
Channel Partners Capital LLC Loan, matures May 14, 2026, net of debt discount of $2,155 and $2,986, respectively		198,277			233,101
Future receivables financing agreement with Arin Funding LLC, non-interest bearing, matures September 29, 2025, net of debt discount of $19,718 and $40,739, respectively		211,392			256,767
OnDeck Capital Loan, matures November 27, 2025, net of debt discount of $1,817 and $3,244, respectively		108,260			138,026
Future receivables financing agreement with Casa Capital, non-interest bearing, matures October 21, 2025, net of debt discount of $16,420 and $0, respectively		183,580			-
Future receivables financing agreement with Fenix Funding LLC, matures September 9, 2025, net of debt discount of $6,943 and $0, respectively		219,183			-
Headway Capital line of credit, interest of 4.17% per month, matures February 9, 2027		95,445			-
Total	$	1,645,192		$	1,375,727

Less: Current portion of loans payable		(1,575,093	)		(1,297,602	)

Loans payable, net of current portion	$	70,100		$	78,125

The Company’s loans payable have an effective interest rate range of 0.0%.

Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures June 1, 2025

On May 15, 2023, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Cedar Advance LLC. Under the Financing Agreement, the Financing Parties sold to Cedar Advance future receivables in an aggregate amount equal to $1,280,000 for a purchase price of $1,228,800. The Company received cash of $1,228,800 and recorded a debt discount of $51,200.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Cedar Advance $43,840 each week, including interest, based upon an anticipated 10% of its future receivables until such time as $1,753,600 has been paid, a period Cedar Advance and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During June 2024, the Company and Cedar Advance LLC executed a settlement agreement and release whereby the Company is to pay a total of $375,000 of principal and interest. This resulted in a net reduction of principal totaling $261,154. This amount is included within loss on settlement of debt on the consolidated statement of operations for the year ended December 31, 2024. Monthly payments of $31,250 are due beginning in July 2024, and the new maturity date is June 1, 2025. In connection with the settlement agreement, the Company recorded accounts payable of $123,867 to a consultant who facilitated the settlements. The Company accounted for the settlement as a troubled debt restructuring in accordance with ASC 470-60. As a result, a loss on settlement of debt of $180,778 was recorded to the consolidated statement of operations for the year ended December 31, 2024. The net impact of the settlement in the consolidated statement of operations for the year ended December 31, 2024 was a gain on settlement of debt of $80,376.

During the three months ended March 31, 2025, the Company paid $31,250 of the original balance under the agreement.

As of March 31, 2025 and December 31, 2024, the Company owed $125,000 and $156,250, respectively, pursuant to this agreement.

Future receivables financing agreement with Pawn Funding, non-interest bearing, matures June 1, 2025

On May 15, 2023, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Pawn Funding. Under the Financing Agreement, the Financing Parties sold to Pawn Funding future receivables in an aggregate amount equal to $1,280,000 for a purchase price of $1,280,000. The Company received cash of $1,241,600 and recorded a debt discount of $38,400.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $43,840 each week, including interest, based upon an anticipated 4% of its future receivables until such time as $1,753,600 has been paid, a period Pawn Funding and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During June 2024, the Company and Pawn Funding executed a settlement agreement whereby the Company is to pay a total of $375,000 of principal and interest. This resulted in a net reduction of principal totaling $251,471. This amount is included within loss on settlement of debt on the consolidated statement of operations for the year ended December 31, 2024. Monthly payments of $31,250 are due beginning in July 2024, and the new maturity date is June 1, 2025. In connection with the settlement agreement, the Company recorded accounts payable of $123,868 to a consultant who facilitated the settlements. The Company accounted for the settlement as a troubled debt restructuring in accordance with ASC 470-60. As a result, a loss on settlement of debt of $111,078 was recorded to the consolidated statement of operations for the year ended December 31, 2024. The net impact of the settlement in the consolidated statement of operations for the year ended December 31, 2024 was a gain on settlement of debt of $140,393.

During the three months ended March 31, 2025, the Company paid $31,250 of the original balance under the agreement.

As of March 31, 2025 and December 31, 2024, the Company owed $ 125,000 and $156,250, respectively pursuant to this agreement.

Future receivables financing agreement with Slate Advance LLC, non-interest bearing, matures December 1, 2025

On June 9, 2023, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Slate Advance. Under the Financing Agreement, the Financing Parties sold to Slate Advance future receivables in an aggregate amount equal to $1,500,000 for a purchase price of $1,425,000. The Company received cash of $1,425,000 and recorded a debt discount of $75,000.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Slate Advance $75,000 each week, including interest, based upon an anticipated 25% of its future receivables until such time as $2,100,000 has been paid, a period Slate Advance and the Financing Parties estimate to be approximately seven months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During May 2024, the Company and Slate Advance LLC executed a forbearance and release agreement whereby the Company is to pay a total of $343,000 of principal and interest. This resulted in a net reduction of principal totaling $284,605. This amount is included within loss on settlement of debt on the consolidated statement of operations for the year ended December 31, 2024. A payment of $50,000 was due in June 2024, with monthly payments of $16,278 due beginning in July 2024, and the new maturity date is December 1, 2025. In connection with the settlement agreement, the Company recorded accounts payable of $156,567 to a consultant who facilitated the settlements. The Company accounted for the settlement as a troubled debt restructuring in accordance with ASC 470-60. As a result, a loss on settlement of debt of $202,830 was recorded to the consolidated statement of operations for the year ended December 31, 2024. The net impact of the settlement in the consolidated statement of operations for the year ended December 31, 2024 was a gain on settlement of debt of $81,775.

During the three months ended March 31, 2025, the Company paid $16,278 of the original balance under the agreement.

As of March 31, 2025 and December 31, 2024, the Company owed $179,055 and $195,333, respectively, pursuant to this agreement.

Future receivables financing agreement with Meged Funding Group, non-interest bearing, matures July 1, 2025

On July 25, 2023, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Meged Funding Group. Under the Financing Agreement, the Financing Parties sold to Slate Advance future receivables in an aggregate amount equal to $1,200,000 for a purchase price of $1,151,950. The Company received cash of $1,151,950 and recorded a debt discount of $48,050.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Meged Funding Group $67,200 each week, including interest, based upon an anticipated 25% of its future receivables until such time as $1,680,000 has been paid, a period Meged Funding Group and the Financing Parties estimate to be approximately six months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During June 2024, the Company and Meged Funding Group executed a settlement agreement whereby the Company is to pay a total of $525,000 of principal and interest. This resulted in a net reduction of principal totaling $232,120. This amount is included within loss on settlement of debt on the consolidated statement of operations for the year ended December 31, 2024. A payment of $45,000 in due in July 2024, with monthly payments of $40,000 due beginning in August 2024, and the new maturity date is July 1, 2025. In connection with the settlement agreement, the Company recorded accounts payable of $132,604 to a consultant who facilitated the settlements. The Company accounted for the settlement as a troubled debt restructuring in accordance with ASC 470-60. As a result, a loss on settlement of debt of $191,704 was recorded to the consolidated statement of operations for the year ended December 31, 2024. The net impact of the settlement in the consolidated statement of operations for the year ended December 31, 2024 was a gain on settlement of debt of $40,416.

During the three months ended March 31, 2025, the Company paid $40,000 of the original balance under the agreement.

As of March 31, 2025 and December 31, 2024, the Company owed $200,000 and $240,000, respectively pursuant to this agreement.

Channel Partners Capital LLC Loan, matures May 14, 2026

On November 14, 2024, the Company entered into an loan agreement with Channel Partners Capital LLC for a principal of $250,000. Under the agreement, the Company received cash of $246,840 and recorded a debt discount of $3,160.

Pursuant to the terms of the loan agreement, the Company agreed to pay Channel Partners Capital LLC $17,361 each month.

During the three months ended March 31, 2025, the Company paid $52,083 of the original balance under the agreement.

As of March 31, 2025 and December 31, 2024, the Company owed $198,277 and $233,101, net of debt discount of $2,155 and $2,986, all respectively.

OnDeck Capital Loan, matures November 27, 2025

On November 27, 2024, the Company entered into a loan agreement with OnDeck. Under the agreement, The Company received cash of $150,000 and recorded a debt discount of $3,750.

Pursuant to the terms of the Loan Agreement, the Company agreed to pay Ondeck $3,813 each week.

During the three months ended March 31, 2025, the Company paid $49,575 of the original balance under the agreement.

As of March 31, 2025 and December 31, 2024, the Company owed $108,260 and $138,025, net of debt discount of $1,817 and $3,244, all respectively.

Future receivables financing agreement with Arin Funding LLC, non-interest bearing

On December 23, 2024, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Arin Funding LLC. Under the Financing Agreement, the Financing Parties sold to Arin Funding LLC future receivables in an aggregate amount equal to $420,000 for a purchase price of $300,000. The Company received cash of $292,000 and recorded a debt discount of $8,000. In connection with the note, the Company issued 4,000 shares to the lender. The fair value of $34,512 was a recorded as a debt discount, which will be amortized to interest expense over the life of the loan.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Arin Funding LLC $11,029 each week, including interest, based upon an anticipated 8% of its future receivables until such time as $420,000 has been paid, a period Arin Funding LLC and the Financing Parties estimate to be approximately five months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the three months ended March 31, 2025, the Company paid $66,397 of the original balance under the agreement.

As of March 31, 2025 and December 31, 2024, the Company owed $211,392 and $256,767, net of debt discount of $19,718 and $40,739, all respectively.

Future receivables financing agreement with Fenix Funding LLC, non-interest bearing

On February 24, 2025, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Fenix Funding LLC. Under the Financing Agreement, the Financing Parties sold to Fenix Funding LLC future receivables in an aggregate amount equal to $399,330 for a purchase price of $270,000. The Company received cash of $261,900 and recorded a debt discount of $8,100.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Fenix Funding LLC $11,095 each week, including interest, based upon an anticipated 8% of its future receivables until such time as $399,330 has been paid, a period Fenix Funding LLC and the Financing Parties estimate to be approximately six months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the three months ended March 31, 2025, the Company paid $55,475 of the original balance under the agreement.

As of March 31, 2025, the Company owed $219,183, net of debt discount of $6,943.

Headway Capital Line of Credit

On February 21, 2025, the Company entered into a line of credit agreement with Headway Capital. Under the agreement, The Company received initial cash proceeds of $100,000.

Pursuant to the terms of the line of credit agreement, the Company agreed to pay Headway $7,022 each month under a 24 month repayment term. The loan bears interest a monthly interest rate of 4.17%.

During the three months ended March 31, 2025, the Company paid $7,022 of the original balance under the agreement, and incurred interest of $2,468.

As of March 31, 2025, the Company owed $95,445.

Future receivables financing agreement with Casa Capital, non-interest bearing

On March 24, 2025, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Casa Capital Under the Financing Agreement, the Financing Parties sold to Casa Capital future receivables in an aggregate amount equal to $298,000 for a purchase price of $200,000. The Company received cash of $183,580 and recorded a debt discount of $16,420.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Casa Capital $9,933 each week, including interest, based upon an anticipated 2.4% of its future receivables until such time as $298,000 has been paid, a period Casa Capital and the Financing Parties estimate to be approximately seven months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

As of March 31, 2025, the Company owed $183,580, net of debt discount of $16,420.

8.	Convertible Debentures

As of March 31, 2025 and December 31, 2024, the Company had outstanding the following convertible debentures:

	March 31,			December 31,
	2025			2024
Convertible promissory note issued to Herald Investment Management Limited, 18% interest, secured, matures March 25, 2025, net of debt discount of $0 and $36,372, respectively	$	700,000		$	663,628
Convertible promissory note issued to 1800 Diagonal Lending LLC, 12% interest, unsecured, matures August 30, 2025, net of debt discount of $9,609 and $22,086, respectively		187,041			174,564
Convertible promissory note issued to Helena Global Investment Opportunities 1 Ltd., non-interest bearing, secured, matures April 13, 2025, net of debt discount of $119,589 and $0, respectively		1,080,411			-
Total	$	1,967,453		$	838,192

Less: Current portion of convertible debentures, net of debt discount/premium		(1,967,453	)		(838,192	)

Convertible debentures, net of current portion, net of debt discount	$	-		$	-

The Company’s convertible debentures have an effective interest rate of 26.1%.

Securities Purchase Agreement – September 2023

On September 25, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company may issue to accredited investors (the “Investors”) 18% Senior Secured Convertible Promissory Notes having an aggregate principal amount of up to $5,000,000 (the “Notes”) and Common Share Purchase Warrants (the “Warrant”) to purchase up to 4,000 shares of common stock (“Common Stock”) of the Company per $100,000 of principal amount of the Notes (the “Warrant Shares”).

The Notes mature 18 months after issuance (the “Maturity Date”), bear interest at a rate of 18% per annum and are convertible into Common Stock (the “Conversion Shares” and, together with the Warrant Shares, the “Underlying Shares”), at the Investor’s election at any time after the Maturity Date, at an initial conversion price equal to $25.0, subject to adjustment for certain stock splits, stock combinations and dilutive share issuances. The Company may prepay all, but not less than all, of the then outstanding principal amount of the Notes by paying to the Investor an amount equal to the product of (i) the sum of (a) the outstanding principal amount of the Notes, plus (b) accrued and unpaid interest hereon, plus (c) all other amounts, costs, expenses and liquidated damages due in respect of the Notes, multiplied by (ii) (x) 1.18 if the Company prepays the Notes during the first month following the original issue date and (y) if the Company prepays thereafter, 1.18 minus 0.01 for every month following the closing until the Maturity Date. The Notes contain a number of customary events of default.

The Notes constitute senior secured indebtedness of the Company, subject to a preexisting senior lien, and are guaranteed by all existing or future formed, direct and indirect, domestic subsidiaries of the Company (the “Guarantors”) pursuant to a subsidiary guarantee (the “Subsidiary Guarantee”) with the collateral agent for the Investor (the “Agent”). On September 25, 2023, the Company, the Investor, the Guarantors and the Agent also entered into a security agreement (the “Security Agreement”) pursuant to which the Notes are secured by a lien in, and security interest upon, and a right of set-off against all of its right, title and interest of whatsoever kind and nature in and to, all assets of the Company and the Guarantors, subject to customary and mutually agreed permitted liens.

The Warrant is exercisable at an initial exercise price of $37.50 per share for a term ending on the 5-year anniversary of the date of issuance. The exercise price of the Warrant is subject to adjustment for certain stock splits, stock combinations and dilutive share issuances.

As of March 31, 2025, the Company had issued an aggregate of $1,220,000 of principal and an aggregate of 48,800 warrants to debt holders in connection with the Purchase Agreement.

Additionally, the placement agent for the Purchase agreement receives 7% cash and 7% warrant compensation on amounts closed on pursuant to the agreement. As of March 31, 2025, the placement agent had received an aggregate of 3,416 warrants.

For information on the debt issued under the agreement, refer to the “Convertible promissory note, Herald Investment Management Limited, 18% interest, secured, matures March 25, 2025” sections of this note, along with the “Convertible promissory note, Mark Porter, 18% interest, secured, matures March 25, 2025” section of Note 6, Loans Payable to Related Parties.

Convertible promissory note, Herald Investment Management Limited, 18% interest, secured, matures March 25, 2025

On September 25, 2023, the Company issued to Herald Investment Management Limited a senior subordinated secured convertible promissory note in the aggregate principal amount of $700,000. The Company received cash of $669,687 and recorded a debt discount of $30,313. The interest on the outstanding principal due under the note accrues at a rate of 18% per annum. All principal and accrued but unpaid interest under the note are due on March 25, 2025. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $25.00 per share.

Additionally, in connection with the note, the Company issued Herald Investment Management Limited a warrant to purchase 28,000 shares of the Company’s common stock at an exercise price of $37.50 per share. These warrants expire on September 25, 2028.

The warrants, including those issued to the placement agent, had a relative fair value of $318,523, which resulted in an additional debt discount of $318,523. The amount is also included within additional paid-in capital.

As of March 31, 2025 and December 31, 2024, the Company owed $700,000 and $663,628 pursuant to this note, net of debt discount of $0 and $36,372, all respectively.

Convertible promissory note, 1800 Diagonal Lending LLC, 12% interest, unsecured, matures August 30, 2025

On October 23, 2024, the Company issued to 1800 Diagonal Lending LLC an unsecured convertible promissory note in the aggregate principal amount of $196,650. The Company received cash of $165,000, resulting in an original issue discount of $31,650. A one-time interest charge of 12%, or $23,598, was applied on the issuance date. The principal and accrued interest is to be paid in five payments beginning on April 30, 2025, with the final principal and accrued interest payment due on August 30, 2025. In the event of a default, the note is convertible into shares of the Company’s common stock a fixed conversion price of $0.25 per share.

As of March 31, 2025 and December 31, 2024, the Company owed $187,041 and $174,564, net of debt discount of $9,609 and $22,086 pursuant to this note, all respectively.

Convertible senior secured debenture, Helena Global Investment Opportunities 1, Ltd. (“Helena”), 20% original issue discount, matures April 13, 2025

On January 13, 2025, the Company issued to Helena a senior convertible promissory note in the aggregate principal amount of $1,200,000 in connection with the January 2025 Securities Purchase Agreement. The Company received cash of $910,000, net of legal fees of $90,000 and a 20% original issue discount (“OID”). The interest on the outstanding principal due under the note is embedded within the 20% OID, and interest is only due upon default. Under the terms of the agreement the Company will repay the face value of the note on April 13, 2025.

The conversion price in effect on any conversion date, following the original issue date, other than in respect of a Mandatory Conversion (see below), be a price per share equal to 75% of the volume-weighted average price (“VWAP”) in the 5 trading days ending on the date of the delivery of the applicable conversion notice, (the “Conversion Price”), and which in no event shall be less than the floor price of $1.00 per share. The note will automatically convert into conversion shares 90 days subsequent to the closing of a qualified offering or qualified event and (ii) a further 50% of the principal balance and all unpaid accrued interest on the note will automatically convert into conversion shares on the date that 120 calendar days subsequent to the closing of such qualified offering or qualified event. As of March 31, 2025, the note is convertible into 480,000 shares of the Company’s common stock using the floor price calculation.

In connection with the note, the Company issued Helena 90 Series F Preferred Shares which are convertible into 90,453 of the Company’s common stock.

Additionally, in connection with the issuance of this debt, the Company issued a warrant to purchase 12,843 shares of the Company’s common stock to a broker.

Total debt discount recognized in connection with this note was $717,532, including the relative fair value of offering costs, OID, the issuance of Series E Preferred Shares and the broker warrants. Through March 31, 2025, $597,942 of debt discount was amortized. The convertible note payable, net of unamortized discount of $119,588, was $1,080,412 as of March 31, 2025.

9.	Warrant Liabilities

Certain of the warrants related to the convertible debentures described in Note 8, Convertible Debentures, qualify for liability classification under ASC 480, “Distinguishing Liabilities from Equity”. The fair value of the warrant liabilities was measured upon issuance and is re-measured at the end of every reporting period, with the change in fair value reported in the consolidated statement of operations as a gain or loss on change in fair value of warrant liabilities.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 warrant liabilities for the three months ended March 31, 2025:

	Warrant
	Liability
Balance at December 31, 2024	$	80,520
Issuance of warrants		-
Change in fair value of warrant liabilities		(7,320	)
Return of warrants		-
Balance at March 31, 2025	$	73,200

The Company uses Level 3 inputs for its valuation methodology for the warrant liabilities as their fair values were determined by using either the Black-Scholes model based on various assumptions or the price of the Company’s common stock.

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

	Expected volatility			Risk-free interest rate			Expected dividend yield			Expected life (in years)
At March 31, 2025		180.70	%		3.96	%		0	%		3.69
At December 31, 2024		183.65	%		4.38	%		0	%		3.94

10.

Common Stock

Authorized shares

The Company has 1,000,000,000 common shares authorized with a par value of $0.00001.

Issuance of shares under equity line of credit

The Company entered into an Equity Line of Credit agreement (“ELOC”) on January 13, 2025 with Helena. On March 13, 2025, the Company and Helena mutually agreed to terminate the ELOC for a termination fee of $150,000, to be paid to Helena within three days of the intended uplist to Nasdaq. As part of the ELOC agreement, Helena received 34,286 commitment shares of the Company’s common stock, which survive termination of the ELOC. The fair value of the commitment shares issued was $260,571, or $7.60 per share. The total fee of $410,571, including the fair value of commitment shares issued and the $150,000 ELOC termination fee, was included in termination and penalty fee expense in the consolidated statements of operations.

11.

Preferred Stock

See below for a description of each of the Company’s outstanding classes of preferred stock, including historical and current information.

Series A

On January 5, 2023, Dominion Capital converted the remaining 300,000 shares of the Company’s Series A preferred stock into shares of the Company’s common stock.

Series B

On April 16, 2018, High Wire designated 4 shares of Series B preferred stock with a stated value of $875,000 per share. The Series B preferred stock is neither redeemable nor convertible into common stock. The principal terms of the Series B preferred stock shares are as follows:

Issue Price — The stated price for the Series B preferred stock shares shall be $875,000 per share.

Redemption — The Series B preferred stock shares are not redeemable.

Dividends — The holders of the Series B preferred stock shares shall not be entitled to receive any dividends.

Preference of Liquidation — The Corporation’s Series A preferred stock (the “Senior Preferred Stock) shall have a liquidation preference senior to the Series B preferred stock. Upon any fundamental transaction, liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of the shares of the Series B preferred stock shares shall be entitled, after any distribution or payment is made upon any shares of capital stock of the Company having a liquidation preference senior to the Series B preferred stock shares, including the Senior Preferred Stock, but before any distribution or payment is made upon any shares of common stock or other capital stock of the Company having a liquidation preference junior to the Series B preferred stock shares, to be paid in cash the sum of $875,000 per share. If upon such liquidation, dissolution or winding up, the assets to be distributed among the Series B preferred stock holders and all other shares of capital stock of the Company having the same liquidation preference as the Series B preferred stock shall be insufficient to permit payment to said holders of such amounts, then all of the assets of the Company then remaining shall be distributed ratably among the Series B preferred stock holders and such other capital stock of the Company having the same liquidation preference as the Series B preferred stock, if any. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, after provision is made for Series B preferred stock holders and all other shares of capital stock of the Company having the same liquidation preference as the Series B preferred stock, if any, then-outstanding as provided above, the holders of common stock and other capital stock of the Company having a liquidation preference junior to the Series B preferred stock shall be entitled to receive ratably all remaining assets of the Company to be distributed.

Voting — The holders of shares of Series B preferred stock shall be voted together with the shares of common stock such that the aggregate voting power of the Series B preferred stock is equal to 51% of the total voting power of the Company.

Conversion — There are no conversion rights.

In accordance with ASC 480 Distinguishing Liabilities from Equity, the Company has classified the Series B preferred stock shares as temporary equity or “mezzanine.”

Series D

On June 14, 2021, High Wire designated 6.36 shares of Series D preferred stock with a stated value of $2,500,000 per share. The Series D preferred stock is not redeemable.

On December 13, 2021, the Company made the first amendment to the Certificate of Designation of its Series D preferred stock which changed the conversion right. As a result of this amendment, the Company recorded a deemed dividend of $5,852,000 for the year ended December 31, 2021 in accordance with ASC 260-10-599-2.

Subsequent to the first amendment, the principal terms of the Series D preferred stock shares are as follows:

Issue Price — The stated price for the Series D preferred stock shares shall be $2,500,000 per share.

Redemption — The Series D preferred stock shares are not redeemable.

Dividends — The holders of the Series D preferred stock shares shall not be entitled to receive any dividends.

Preference of Liquidation — Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall (i) first be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to $2,500,000 for each share of Series D before any distribution or payment shall be made to the holders of any other securities of the Corporation and (ii) then be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Series D were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

Voting — Except as otherwise provided in the agreement or as required by law, the Series D shall be voted together with the shares of common stock, par value $0.00001 per share of the Corporation (“Common Stock”), and any other series of preferred stock then outstanding that have voting rights, and except as provided in Section 7, not as a separate class, at any annual or special meeting of stockholders of the Corporation, with respect to any question or matter upon which the holders of Common Stock have the right to vote, such that the voting power of each share of Series D is equal to the voting power of the shares of Common Stock that each such share of Series D would be convertible into pursuant to Section 6 if the Series D Conversion Date was the date of the vote. The Series D shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation and may act by written consent in the same manner as the holders of Common Stock of the Corporation.

Conversion — Beginning ninety (90) days from the date of issuance, all or a portion of the Series D may be converted into Common Stock at the greater of the Fixed Price and the Average Price (as defined below). On the business day immediately preceding the listing of the Common Stock on a national securities exchange (the “Automatic Series D Conversion Date”), without any further action, all shares of Series D shall automatically convert into shares of Common Stock at the Fixed Price, which is defined as the closing price of the Common Stock on the trading day immediately preceding the date of issuance of the Series D ( subject to adjustment for any reverse or forward split of the Common Stock). The Series D shares were issued on June 16, 2021, and the closing price of the Company’s common stock was $56.25 on June 15, 2021. The Average Price is defined as the average closing price of the Company’s common stock for the 10 trading days immediately preceding, but not including, the conversion date.

Vote to Change the Terms of or Issuance of Series D — The affirmative vote at a meeting duly called for such purpose, or written consent without a meeting, of the holders of not less than fifty-one (51%) of the then outstanding shares of Series D shall be required for any change to the Certificate of Designation, Preferences, Rights and Other Rights of the Series D.

As of March 31, 2025, the carrying value of the Series D Preferred Stock was $7,745,643. This amount is recorded within equity on the unaudited condensed consolidated balance sheet.

Series E

On December 20, 2021, the Company designated 2.6 shares of Series E preferred stock with a stated value of $10,000 per share. The Series E preferred stock is not redeemable.

The principal terms of the Series E preferred stock shares are as follows:

Issue Price — The stated price for the Series E preferred stock shares shall be $875,000 per share.

Redemption — The Series E preferred stock shares are not redeemable.

Dividends — The holders of the Series E preferred stock shares shall not be entitled to receive any dividends.

Preference of Liquidation — Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall (i) first be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to $875,000 for each share of Series E before any distribution or payment shall be made to the holders of any other securities of the Corporation and (ii) then be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Series E were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

Voting — Except as otherwise provided herein or as required by law, the Series E shall be voted together with the shares of common stock, par value $0.00001 per share of the Corporation (“Common Stock”), and any other series of preferred stock then outstanding that have voting rights, and except as provided in Section 7, below, not as a separate class, at any annual or special meeting of stockholders of the Corporation, with respect to any question or matter upon which the holders of Common Stock have the right to vote, such that the voting power of each share of Series E is equal to the voting power of the shares of Common Stock that each such share of Series E would be convertible into pursuant to Section 6 if the Series E Conversion Date was the date of the vote. The Series E shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation and may act by written consent in the same manner as the holders of Common Stock of the Corporation.

Conversion — Beginning ninety (90) days from the date of issuance, all or a portion of the Series E may be converted into Common Stock at the Fixed Price (as defined below). On the business day immediately preceding the listing of the Common Stock on a national securities exchange (the “Automatic Series E Conversion Date”), without any further action, all shares of Series E shall automatically convert into shares of Common Stock at the Fixed Price. “Fixed Price” shall be defined as the closing price of the Common Stock on the trading day immediately preceding the date of issuance of the Series E (subject to adjustment for any reverse or forward split of the Common Stock or similar occurrence). The Series E shares were issued on December 30, 2021, and the closing price of the Company’s common stock was $0.23075 on December 29, 2021.

Vote to Change the Terms of or Issuance of Series E — The affirmative vote at a meeting duly called for such purpose, or written consent without a meeting, of the holders of not less than fifty-one (51%) of the then outstanding shares of Series E shall be required for any change to the Certificate of Designation, Preferences, Rights and Other Rights of the Series E.

As of March 31, 2025, the carrying value of the Series E Preferred Stock was $4,869,434. This amount is recorded within equity on the unaudited condensed consolidated balance sheet.

Series F

On January 13, 2025, the Company designated 120 shares of Series F preferred stock with a stated value of $10,000 per share.

The principal terms of the Series F preferred stock shares are as follows:

Voting, Dividend and Other Rights — Except as otherwise provided in the Certificate of Designation, Preferences, Rights and Other Rights of the Series F (the “Series F COD”) or as required by law, the Series F shall be voted together with the shares of common stock, and any other series of preferred stock then outstanding that have voting rights, and except as provided in Section 3 of the Series F COD, not as a separate class, at any annual or special meeting of stockholders of the Company, with respect to any question or matter upon which the holders of common stock have the right to vote, such that the voting power of each share of Series F is equal to the voting power of the shares of common stock that each such share of Series F would be convertible as of the record date for determining stockholders entitled to vote on such matter. The Series F shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Company and may act by written consent in the same manner as the holders of Common Stock of the Corporation. The holders of the Series F shall not be entitled to receive any dividends. The Series F are not redeemable.

Preference of Liquidation — Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), subject to the rights of any series of preferred stock that may from time to time come into existence, the holders of Series F shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that holders of common stock would receive if the Series F were fully converted (disregarding for such purposes any conversion limitations hereunder) to common stock at the conversion price then applicable for each share of outstanding share of Series F, which amount shall be paid to the holders of Series F pari passu with the amount paid to the holders of common stock.

Redemption - The Series F Preferred Stock is not redeemable at the option of any holder thereof.

Conversion — Following the date of issuance, all or a portion of the Series F may be converted into common stock determined by dividing the stated value of such share of Series F by the Conversion Price. The Conversion Price, and the rate at which shares of Series F may be converted into shares of common stock, shall be subject to adjustment as provided in the Series F COD. As of the issuance date of the Series F shares and March 31, 2025, the Series F Preferred Shares were convertible into was 90,453 shares of common stock.

In connection with the Helena note (see Note 8), the Company issued Helena 90 Series F Preferred Shares which are convertible into 90,453 of the Company’s common stock. The relative fair value of the Series F Preferred Stock recorded was $331,439, which is recorded within equity on the unaudited condensed consolidated balance sheet.

12.

Share Purchase Warrants and Stock Options

In connection with the issuance of new convertible debentures during December 2023 and January 2024, the associated warrants qualified for liability classification. The fair value of these warrants was $73,200 and $80,520 as of March 31, 2025 and December 31, 2024, respectively. This amount is included in warrant liabilities on the unaudited condensed consolidated balance sheets. The weighted-average remaining life on the share purchase warrants as of March 31, 2025 was 3.5 years. The weighted-average remaining life on the stock options as of March 31, 2025 was 3.7 years. With the exception of those issued during February 2021 and June 2021, the stock options outstanding at March 31, 2025 were subject to vesting terms.

In connection with the Helena note (see Note 8), the Company issued a warrant to purchase 12,843 shares of the Company’s common stock to a broker. The warrant has an exercise price of $7.48 per share and expires on July 16, 2030. A volatility of 184.49%, discount rate of 4.6% and stock price at the grant date of $7.60 per share were used as Black-Scholes option pricing model inputs. The relative fair value of $96,092 was recorded as debt discount and within additional paid-in capital.

The following table summarizes the activity of share purchase warrants for the period of January 1, 2025 through March 31, 2025:

	Number of warrants			Weighted average exercise price		Intrinsic value
Balance at December 31, 2024		166,444			25.81		-
Granted		12,843			7.48		-
Exercised		-			-		-
Expired/forfeited		(2,400	)		62.50		-
Outstanding at March 31, 2025		176,887		$	23.98	$	16,311
Exercisable at March 31, 2025		164,044		$	25.27	$	16,311

As of March 31, 2025, the following share purchase warrants were outstanding:

Number of warrants		Exercise price		Issuance Date	Expiry date	Remaining life
	50,000		25.00	11/18/2022	11/18/2027		2.64
	52,216		37.50	9/25/2023	9/25/2028		3.49
	4,830		31.25	12/7/2023	12/7/2028		3.69
	2,415		31.25	12/11/2023	12/11/2028		3.70
	3,803		31.25	1/11/2024	1/11/2029		3.79
	10,800		13.90	5/9/2024	5/9/2029		4.11
	22,000		10.00	5/16/2024	5/16/2029		4.13
	16,240		12.50	5/23/2024	5/23/2029		4.15
	1,740		11.28	6/19/2024	6/19/2029		4.22
	12,843		7.48	1/13/2025	7/16/2030		5.30
	176,887

The following table summarizes the activity of stock options for the period of January 1, 2025 through March 31, 2025:

	Number of stock options		Weighted average exercise price		Intrinsic value
Balance at December 31, 2024		125,557	$	23.77	$	-
Issued		-		-		-
Exercised		-		-		-
Canceled/expired/forfeited		-		-		-
Outstanding at March 31, 2025		125,557	$	23.77	$	-
Exercisable at March 31, 2025		98,640	$	27.10	$	-

As of March 31, 2025, the following stock options were outstanding:

Number of stock options		Exercise price		Issuance Date	Expiry date	Remaining Life
	3,845		145.00	2/23/2021	2/23/2026		0.90
	13,543		63.63	8/18/2021	8/18/2026		1.38
	741		134.95	11/3/2021	11/3/2026		1.59
	481		46.83	3/21/2022	3/21/2027		1.97
	381		26.25	5/16/2022	5/16/2027		2.13
	480		21.88	9/28/2022	9/28/2027		2.50
	2,400		75.00	2/8/2023	2/8/2026		0.86
	261		28.75	2/27/2023	2/27/2028		2.91
	1,513		27.50	5/30/2023	5/30/2028		3.17
	1,064		31.23	7/18/2023	7/18/2028		3.30
	1,515		18.55	10/24/2023	10/24/2028		3.57
	89,223		11.28	6/21/2024	6/21/2029		4.23
	4,694		12.25	9/30/2024	9/30/2029		4.50
	5,416		9.28	12/31/2024	12/31/2029		4.76
	125,557

The remaining stock-based compensation expense on unvested stock options was $23,327 as of March 31, 2025.

13.

Leases

The Company leases certain office space and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities.

The following table sets forth the operating lease right of use (“ROU”) assets and liabilities as of March 31, 2025 and December 31, 2024:

	March 31,		December 31,
	2025		2024
Operating lease assets	$	147,704	$	174,365

Operating lease liabilities:
Current operating lease liabilities		113,598		110,856
Long term operating lease liabilities		39,713		69,094
Total operating lease liabilities	$	153,311	$	179,950

Expense related to leases is recorded on a straight-line basis over the lease term, including rent holidays. During the three months ended March 31, 2025 and 2024, the Company recognized operating lease expense of $28,667 and $28,667, respectively. Operating lease costs are included within general and administrative expenses on the unaudited condensed consolidated statements of operations. During the three months ended March 31, 2025 and 2024, short-term lease costs were $7,728 and $0, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities were $28,644 and $27,280, respectively, for the three months ended March 31, 2025 and 2024. These amounts are included in operating activities in the unaudited condensed consolidated statements of cash flows. During the three months ended March 31, 2025 and 2024, the Company reduced its operating lease liabilities by $26,638 and $24,088, respectively, for cash paid.

The operating lease liabilities as of March 31, 2025 reflect a weighted average discount rate of 5%. The weighted average remaining term of the leases is 1.33 years. Remaining lease payments as of March 31, 2025 are as follows:

Year ending December 31,
2025	$	88,320
2026		70,179
Total lease payments		158,499
Less: imputed interest		(5,188	)
Total	$	153,311

14.

Commitments and Contingencies

Leases

The Company leases its principal offices under a lease that expires in 2026. Leases with an initial term of 12 months or less and immaterial leases are not recorded on the balance sheet (refer to Note 13, Leases, for amounts expensed during the three months ended March 31, 2025 and 2024).

Legal proceedings

In the normal course of business or otherwise, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred.

15.

Segment Disclosures

During the three months ended March 31, 2025 and 2024, the Company had three operating segments including:

●

Cybersecurity, which is comprised of HWN and OCL.

	●	SVC, which consists of the Company’s SVC subsidiary.

	●	Corporate, which consists of the rest of the Company’s operations.

Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates all reporting segments in one geographical area (the United States).

Financial statement information by operating segment for the three months ended March 31, 2025 is presented below:

	Three Months Ended March 31, 2025
	Corporate			Cybersecurity			SVC			Total

Revenue	$	-		$	1,063,437		$	1,108,189		$	2,171,626
Operating (loss) income		(110,183	)		(1,202,860	)		(8,471	)		(1,321,513	)
Interest expense		32,989			109,213			18,383			160,585
Depreciation and amortization		-			42,720			141,494			184,214
Total assets as of March 31, 2025		14,865			1,659,855			4,009,798			5,684,518

Geographic information as of and for the three months ended March 31, 2025 is presented below:

	Revenues For The Three Months Ended March 31, 2025		Long-lived Assets as of March 31, 2025
United States		2,171,626		4,312,151
Consolidated total	$	2,171,626	$	4,312,151

Financial statement information by operating segment for the three months ended March 31, 2024 and as of December 31, 2024 is presented below:

	Three Months Ended March 31, 2024
	Corporate			Cybersecurity			SVC		Total

Net sales	$	-		$	1,045,828		$	1,015,675	$	2,061,503
Operating (loss) income		(281,422	)		(1,247,339	)		1,436		(1,527,325	)
Interest expense		160,820			82,216			-		243,036
Depreciation and amortization		-			58,361			129,977		188,338
Total assets as of December 31, 2024		16,265			231,631			5,538,875		5,786,771

Geographic information as of and for the three months ended March 31, 2024 and as of December 31, 2024 is presented below:

	Revenues For The Three Months Ended March 31, 2024		Long-lived Assets as of December 31, 2024
United States		2,061,503		4,523,026
Consolidated total	$	2,061,503	$	4,523,026

16.

Earnings Per Share

The following table shows the computation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024:

	For The Three Months Ended
	March 31,
	2025			2024

Numerator:
Net loss from continuing operations	$	(2,556,577	)	$	(2,290,927	)
Net income from discontinued operations, net of tax	$	-		$	1,876,489
Net loss attributable to High Wire Networks, Inc. common shareholders	$	(2,556,577	)	$	(414,438	)

Denominator
Weighted average common shares outstanding, basic		977,270			962,155

Income (loss) per share attributable to High Wire Networks, Inc. common shareholders, basic and diluted:
Net loss from continuing operations	$	(2.62	)	$	(2.38	)
Net loss from discontinued operations, net of taxes	$	-		$	1.95
Net loss per share	$	(2.62	)	$	(0.43	)

17.

Discontinued Operations

On June 27, 2024, HWN sold the assets of its technology services business unit. The operations of the sold business unit qualified for discontinued operations treatment.

The results of operations of the sold business unit have been included within net income (loss) from discontinued operations, net of tax, on the unaudited condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024.

In connection with the sale of HWN’s technology services business unit, the Company is now subject to a non-compete which precludes it from operating businesses similar to that of AWS PR and Tropical. As a result, both subsidiaries qualify for discontinued operations treatment.

The assets and liabilities of AWS PR and Tropical as of March 31, 2025 and December 31, 2024 have been included within the unaudited condensed consolidated balance sheet as current assets of discontinued operations and current liabilities of discontinued operations.

The results of operations of AWS PR and Tropical have been included within net income (loss) from discontinued operations, net of tax, on the unaudited condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024.

The following table shows the balance of the Company’s discontinued operations as of March 31, 2025 and December 31, 2024:

	March 31,		December 31,
	2025		2024
Current assets:
Accounts receivable	$	-	$	-
Current assets of discontinued operations	$	-	$	-

Current liabilities:
Accounts payable and accrued liabilities	$	505,782	$	505,782
Current liabilities of discontinued operations	$	505,782	$	505,782

The following table shows the statement of operations for the Company’s discontinued operations for the three months ended March 31, 2025 and 2024:

	For the three months ended
	March 31,
	2025		2024

Revenue	$	-	$	5,589,478

Operating expenses:
Cost of revenues		-		3,028,721
Salaries and wages		-		449,478
General and administrative		-		236,290
Total operating expenses		-		3,714,489

Income from operations		-		1,874,989

Other income (expenses):
Other income		-		1,500
Total other income (expense)		-		1,500

Pre-tax income (loss) from discontinued operations		-		1,876,489

Provision for income taxes		-		-

Net income (loss) from discontinued operations, net of tax	$	-	$	1,876,489

18.

Subsequent Events

Series G Preferred Stock

On April 30, 2025, the Company entered into a Securities Purchase Agreement with an institutional investor pursuant to which the Company issued 250 shares of a newly created Series G Convertible Preferred Stock, which is convertible into common stock, par value $0.00001 per share.

The material features of the Series G Preferred Stock, as set forth in the Certificate of Designation for the Preferred Stock (“COD”), include the following: (i) the Series G Preferred Stock is convertible into shares of our common stock at a price equal to 90% of the lowest traded price of the Common Stock during the ten (10) trading days immediately preceding any conversion; (ii) conversions are limited so that no conversion may be made to the extent that, following a conversion, the beneficial ownership of the Investor and its affiliates would be more than 4.99% of our outstanding shares of common stock; (iii) the Series G Preferred Stock is entitled to receive dividends at an annual rate of 12% on the stated value thereof, payable quarterly in arrears, in cash or by the issuance of additional shares of Series G Preferred Stock ; (iv) on the earlier of the (1) 90^th calendar day following the issuance date and (2) the date the Common Stock is listed on a national exchange, the Company has the obligation to redeem the Series G Preferred Stock for an amount equal to 110% of the outstanding Stated Value of the Series G Preferred Stock , plus any accrued but unpaid dividends, plus all other amounts due to the Investor pursuant to the Certificate of Designation; and (v) the Preferred Stock will vote together with our common stock on an as-converted basis on all matters submitted to a vote of our shareholders, but not in excess of the 4.99% conversion limitation.

Under additional covenants set forth in the COD, holders of the Series G Preferred Stock enjoy certain other rights, including: (i) upon the consummation of an underwritten offering by the Company resulting in net proceeds of at least $3,000,000, occurring prior to the one year anniversary of the issue date, the Investor shall have the option to convert their Series G Preferred Stock, along with any other series of preferred stock of the Company then held by them, into the securities issued in such underwritten offering, at a 35% discount to the public offering price at which the securities in such offering are issued; (ii) the Investor has the right to have the conversion price adjusted downward to match the conversion price of any newly-issued variable price convertible security with a conversion price more favorable than that set forth in the COD; (iii) Investor has the right to participate in up to 20% of any future financings we may conduct.

The Company relied on the exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation D promulgated thereunder in connection with the issuance and sale of the Series G Preferred Stock and Conversion Shares. The offer and sale of the Series G Preferred Stock and Conversion Shares have not been registered under the Securities Act and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements of the Securities Act, and in each case in compliance with applicable state securities laws.

Pursuant to the Securities Purchase Agreement, the Company has reserved 40,000 shares of common stock.

Issuance of Common Stock

On April 30, 2025, the Company agreed to issue 625,000 shares of common stock to multiple creditors in exchange for certain liabilities.

On April 30, 2025, the Company agreed to issue 78,209 shares of common stock in exchange for certain outstanding warrants.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plan”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed consolidated financial statements are stated in United States dollars ($) and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

All references to “common stock” refer to the common shares in our capital stock.

Unless specifically set forth to the contrary, when used in this report the terms “we”, “our”, the “Company” and similar terms refer to High Wire Networks, Inc., a Nevada corporation, and its consolidated subsidiaries.

The information that appears on our website at www.HighWireNetworks.com is not part of this report.

Description of Business

Business Overview

HWN, Inc., (d/b/a High Wire Network Solutions, Inc.) (“HWN”) was incorporated in Delaware on January 20, 2017. HWN is a global provider of managed cybersecurity and managed networks delivered exclusively through a channel sales model. Our Overwatch managed security platform-as-a-service offers organizations end-to-end protection for networks, data, endpoints and users via multiyear recurring revenue contracts in this fast-growing technology segment. HWN has continuously operated under the High Wire Networks brand for more than 20 years.

HWN and JTM Electrical Contractors, Inc. (“JTM”), an Illinois Corporation, entered into an operating agreement through which High Wire owned 50% of JTM. On February 15, 2022, HWN sold its 50% interest in JTM.

On June 16, 2021, we completed a merger with Spectrum Global Solutions, Inc. On January 7, 2022, Spectrum Global Solutions, Inc. legally changed its name to High Wire Networks, Inc. (“High Wire”). The merger was accounted for as a reverse merger. At the time of the reverse merger, High Wire’s subsidiaries included ADEX Corporation, ADEX Puerto Rico LLC, ADEX Canada, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively “ADEX” or the “ADEX Entities”), AW Solutions Puerto Rico, LLC (“AWS PR”), and Tropical Communications, Inc. (“Tropical”). For accounting purposes, HWN is the surviving entity. On March 6, 2023, HWN divested the ADEX Entities. On July 31, 2023, HWN paused the operations of its AWS PR subsidiary. On November 3, 2023, HWN paused the operations of its Tropical subsidiary.

On November 4, 2021, we closed on the acquisition of Secure Voice Corp (“SVC”). The closing of the acquisition was facilitated by a senior secured promissory note which has been repaid.

On August 4, 2023, we formed a new entity – incorporated as Overwatch Cyberlab, Inc. (“OCL”) – which is 80% owned by our company and 20% owned by John Peterson.

On June 27, 2024, HWN entered into an asset purchase agreement with INNO4 LLC pursuant to which INNO4 LLC agreed to purchase certain assets of HWN related to our technology services business unit. Additionally, the asset purchase agreement includes a non-compete which precludes our company from operating businesses similar to that of AWS PR and Tropical.

Our SVC subsidiary is a wholesale network services provider with network footprint in the Northeast United States. This network carries VoIP and other traffic for other service providers.

We provide the following category of offerings to our customers:

●

Security: High Wire’s award-winning Overwatch Managed Security offers organizations end-to-end protection for networks, data, endpoints, and users via multiyear recurring revenue contracts in this fast-growing technology segment. This segment is nearly 100% recurring revenue with multi-year contracts. Overwatch delivers services through Managed Service Providers (MSPs), strategic partnerships and alliances, Value Added Resellers (VARs), Distributors, and Network Service Providers.

Our Operating Units

Our company is comprised of the following:

●

SVC, which is a wholesale network services provider with network footprint in the Northeast United States. This network carries VoIP and other traffic for other service providers revenue.

Results of Operations for the Three-Month Periods Ended March 31, 2025 and 2024

Our operating results for the three-month periods ended March 31, 2025 and 2024 are summarized as follows:

	For The Three Months Ended
	March 31,
Statement of Operations Data:	2025			2024

Revenue	$	2,171,626		$	2,061,503
Operating expenses		3,493,139			3,588,828
Loss from operations		(1,321,513	)		(1,527,325	)
Total other (expense) income		(1,235,064	)		(763,602	)
Net income from discontinued operations, net of tax		-			1,876,489
Net loss attributable to common shareholders	$	(2,556,577	)	$	(414,438	)

Revenues

Our revenue increased from $2,061,503 for the three months ended March 31, 2024 to $2,171,626 for the three months ended March 31, 2025, an increase of $110,123.

A significant portion of our services are performed under master service agreements and other arrangements with customers that extend for periods of one or more years. We are currently party to numerous master service agreements, and typically have multiple agreements with each of our customers. Master Service Agreements (MSAs) generally contain customer-specified service requirements, such as discreet pricing for individual tasks. To the extent that such contracts specify exclusivity, there are often a number of exceptions, including the ability of the customer to issue work orders valued above a specified dollar amount to other service providers, perform work with the customer’s own employees and use other service providers when jointly placing facilities with another utility. In most cases, a customer may terminate an agreement for convenience with written notice. The remainder of our services are provided pursuant to contracts for specific projects. Long-term contracts relate to specific projects with terms in excess of one year from the contract date. Short-term contracts for specific projects are generally three to four months in duration. The percentage of revenue from long-term contracts varies between periods depending on the mix of work performed under our contracts.

Operating Expenses

During the three months ended March 31, 2025, our operating expenses were $3,493,139, compared to $3,588,828 for the same period of 2024. The decrease of $95,689 is primarily related to a $301,610 decrease in in salaries and wages and a $77,991 decrease in general and administrative expense, partially offset by an increase of $288,036 in costs of revenue. In 2025, after internal departmental evaluation, certain headcount were specifically designated as 100% Security Operations Center (SOC) personnel and therefore were included within cost of revenues. Overall employee count remained relatively the same.

Other Expense

During the three months ended March 31, 2025, we had other expense of $1,235,064, compared to $763,602 for the same period of 2024. The increase of $471,462 is primarily related to an increase in termination and penalty fee of $310,571 and an increase in amortization of debt discount of $238,294 due to new notes issued in the 2025 period compared to the same period of 2024, offset by the change in warrant liability expense and change in fair value of warrant liability.

Net Income from Discontinued Operations, Net of Tax

For the three months ended March 31, 2025, we had net income from discontinued operations, net of tax of $0, compared to a net income from discontinued operations, net of tax of $1,876,489 in the same period of 2024. The 2024 period included income from operations of $1,874,989 and other income of $1,500.

Net Loss

For the three months ended March 31, 2025, we had net loss attributable to High Wire Networks, Inc. common shareholders of $2,556,577, compared to a net loss of $414,438 in the same period of 2024.

Liquidity and Capital Resources

As of March 31, 2025, our total current assets were $1,372,367 and our total current liabilities were $9,281,542 resulting in a working capital deficit of $7,909,175, compared to a working capital deficit of $6,224,966 as of December 31, 2024.

We have historically suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard, we have historically raised additional capital through equity offerings and loan transactions.

Cash Flows

	For The Three Months Ended
	March 31,
	2025			2024
Net cash used in operating activities	$	(1,213,377	)	$	(1,566,722	)
Net cash used in investing activities	$	-		$	(13,721	)
Net cash provided by financing activities	$	1,156,449		$	1,510,705
Change in cash	$	(56,928	)	$	(69,738	)

For the three months ended March 31, 2025, cash decreased $56,928, compared to a decrease in cash of $69,738 for the same period of 2024. For the three months ended March 31, 2025, net cash provided by financing activities included net proceeds from of loans payable to related parties of $2,000, proceeds from convertible debentures of $910,000 and net proceeds from loans payable of $244,449. Net cash used in operating activities included the net loss from continuing operations of $2,556,577, partially offset by a net cash inflow from changes in operating assets and liabilities of $197,049.

As of March 31, 2025, we had cash of $163,896 compared to $220,824 as of December 31, 2024.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Inflation

The effect of inflation on our revenue and operating results has not been significant.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures.

Our management, with the participation of our Chief Executive Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our Chief Executive Officer concluded that, as a result of the material weaknesses described below, as of March 31, 2025, our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are:

Due to our small size, we do not have a proper segregation of duties in certain areas of our financial reporting process. The areas where we have a lack of segregation of duties include cash receipts and disbursements, approval of purchases and approval of accounts payable invoices for payment. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the consolidated financial statements will not be prevented or detected on a timely basis;

we do not have any formally adopted internal controls surrounding our cash and financial reporting procedures; and

the lack of the quantity of resources to implement an appropriate level of review controls to properly evaluate the completeness and accuracy of transactions entered into by our company.

We are committed to improving our financial organization. In addition, we will look to increase our personnel resources and technical accounting expertise within the accounting function to resolve non-routine or complex accounting matters.

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.

Item 1A. Risk Factors

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

As part of the ELOC agreement, Helena received 34,286 commitment shares of the Company’s common stock, which survive termination of the ELOC. The fair value of the commitment shares issued was $260,571, or $7.60 per share.

In connection with the Helena note (see Note 8), the Company issued Helena 90 Series F Preferred Shares which are convertible into 90,453 of the Company’s common stock.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit #		Exhibit Description
31.1*		Certification of the Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	High Wire Networks, Inc.

Date: May 13, 2025	By:	/s/ Mark W. Porter
		Mark W. Porter
		Chief Executive Officer

	High Wire Networks, Inc.

Date: May 13, 2025	By:	/s/ Curtis E. Smith
		Curtis E. Smith
		Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

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