CLOUDASTRUCTURE, INC.

Cloudastructure, Inc. operates in the global physical security market, which is projected to grow from approximately $182.5 billion ¹ in 2025 to approximately $366.2 billion ² by 2034, representing a compound annual growth rate of just over 8% ³. Within this broader market, the AI in video surveillance industry is a fast-growing segment, expected to expand from approximately $3.9 billion ⁴ in 2024 to roughly $12.5 billion ⁵ by 2030, at a compound annual growth rate of 21.3% ⁶. The global proptech market, where Cloudastructure primarily focuses, is estimated to be worth approximately $44.9 billion ⁷ in 2025 and is projected to grow at a 15% ⁸ compound annual rate to approximately $119.5 billion ⁹ by 2032.

Cloudastructure's competitive advantage is rooted in its ability to centralize security operations, utilizing AI for large-scale monitoring and integrating with a global network of trained security professionals. The company's platform is hardware agnostic, allowing it to integrate with various devices, including mobile surveillance units and drones, which were layered with its proprietary AI in 2025. Cloudastructure believes its full-stack solution offers greater affordability, accountability, and ease of use compared to competitors. The company has secured contracts with six of the top ten property management companies on the National Multifamily Housing Council's (NMHC) 2025 NMHC 50 list, including Greystar Real Estate Partners, Asset Living, Avenue5 Residential, LLC, Cushman & Wakefield, FPI Management, Inc., and Bozzuto. Named competitors include Avigilon (a Motorola Solutions, Inc. subsidiary), Milestone Systems A/S (a Canon Inc. subsidiary), Verkada, Inc., Tyco Integrated Security LLC (a Johnson Controls International plc business unit), and ECam (which recently acquired Stealth Monitoring, Inc.).

The company's core business model revolves around a cloud services delivery model, generating revenue primarily from subscriptions to its cloud video surveillance and Remote Guarding services, as well as from hardware sales and installation services. Revenue from cloud video surveillance and Remote Guarding services is billed based on the number of camera views deployed by the customer, typically on a per camera per year basis. Hardware revenues are derived from sales of cloud video recorders, surveillance cameras, and speakers. Installation services represent labor associated with hardware deployment and configuration. The company offers a financing model for hardware upgrades, which is expected to improve cash flow predictability, shorten sales cycles, and enhance attractiveness to customers.

Cloudastructure offers a suite of integrated solutions. Cloud Video Surveillance provides AI-enhanced video capture and analytics for automated event detection, anomaly recognition, and real-time alerts. Seamless Remote Guarding Software is a cloud-native orchestration platform connecting cameras, AI, and operators for incident triage and standardized response. Remote Guarding involves 24/7 live response by trained security personnel integrated with AI monitoring. Operational Intelligence offers centralized dashboards, reporting, and alerts for property managers and enterprise security teams.

The company's existing products and services include Cloud Video Surveillance, Remote Guarding Software, Remote Guards, Cloud Video Recorder (CVR), Cameras and Speakers, Mobile Surveillance Trailer, Mobile Surveillance Trailer with Drone, and Solar Powered Enclosure. Cloud Video Surveillance and Remote Guarding generated $767,026 ¹⁰ and $706,349 ¹¹ in revenue, respectively, for the year ended December 31, 2025. Hardware sales contributed $1,464,603 ¹², and other services (including installation) contributed $2,127,551 ¹³ in revenue for the same period.

For the fiscal year ended December 31, 2025, net revenues increased to $5,065,529 ¹⁴ from $1,364,293 ¹⁵ in 2024, representing an increase of approximately 271% ¹⁶. Cloud Video Surveillance revenue increased by approximately 137% ¹⁷ to $767,026 ¹⁸ in 2025 from $323,475 ¹⁹ in 2024. Remote Guarding revenue grew by approximately 150% ²⁰ to $706,349 ²¹ in 2025 from $282,849 ²² in 2024. Hardware revenue saw a substantial increase of approximately 329% ²³ to $1,464,603 ²⁴ in 2025 from $341,193 ²⁵ in 2024. Other revenue, including installation services, increased by approximately 410% ²⁶ to $2,127,551 ²⁷ in 2025 from $416,776 ²⁸ in 2024. Gross profit for 2025 was approximately $1,489,000 ²⁹, up from approximately $374,000 ³⁰ in 2024. The net loss for 2025 was approximately $8,462,000 ³¹, an increase of approximately 29% ³² from the $6,535,000 ³³ net loss in 2024. Cash and cash equivalents at the end of 2025 were $8,453,000 ³⁴, compared to $52,000 ³⁵ at the end of 2024. Total current assets were $9,817,000 ³⁶ and total current liabilities were $1,212,000 ³⁷ as of December 31, 2025. The company had no long-term debt.

During 2025, Cloudastructure established in-house Remote Guarding services, including operations in India, which commenced in July 2025. The company also contracted with a financing partner in 2025 to enable customers to upgrade their networks and cameras. In 2025, the company layered its proprietary, patented computer vision AI atop mobile surveillance units and drones. The company also released a video processing technology for its Cloud Video Recorders (CVRs) that reduces bandwidth requirements and lowers CPU utilization.

Cloudastructure anticipates sustaining operating losses for the foreseeable future as it expands its team, continues research and development, and strives to gain customers and market share. The company expects operating expenses to continue to increase in connection with ongoing activities, particularly as it develops existing and new products and services. Management believes that the Series 2 Equity Financing, the Equity Line, and the ATM Facility, along with cash on hand and anticipated cash flows from operations, will be sufficient to fund operations through at least June 30, 2027. The company's stockholders' equity was approximately $8.9 million ³⁸ as of December 31, 2025, exceeding the Nasdaq Listing Rule 5505(b)(1) requirement of at least $2.5 million ³⁹.

The company is currently focused on expanding within its existing top-tier customer locations and acquiring additional customers in the property management ("proptech") space. Cloudastructure anticipates continuing to enter into additional new markets in 2026. The company is also expanding into new verticals, including transportation and logistics, construction, and critical infrastructure. Across all markets, the aim is to integrate emerging security technologies, such as access control, sensors, robotic systems, and electric security fences, by layering its AI.

Cloudastructure plans to introduce new computer vision algorithms or improve existing ones, such as face recognition and object detection, which must be executed at sustainable computational costs. The company also plans to introduce machine learning algorithms that combine information from its video surveillance system. The company expects the proportion of recurring subscription revenue to increase over time as its installed base matures, although the timing and pace of this shift will depend on the rate of new customer acquisitions and the scope of future deployment activity.

The company's operational outlook includes continued investment in its technology platform and product innovation to support long-term growth. The increase in general and administrative expenses in 2025 reflected investments to support growth, operational complexity, and corporate governance requirements. Research and development expenses increased in 2025 due to expanded product development efforts, indicating continued investment in technology. Sales and marketing expenses also increased, reflecting strategic investments in personnel and marketing initiatives to support continued revenue growth. The company has been moving more of its services to its own computers in co-location facilities to achieve lower costs.

Cloudastructure's planned capital allocation includes continued investment in building out its sales and marketing teams, as well as maintaining a robust engineering and development team. The company will require substantial additional funding to maintain its continuing operations. During 2025, the company raised additional capital through the sale of Series 1 Convertible Preferred Stock for gross proceeds of $6.3 million ⁴⁰ and Series 2 Convertible Preferred Stock for aggregate gross proceeds of $11.0 million ⁴¹. The company may sell additional shares of Series 2 Preferred to Streeterville for aggregate gross proceeds of $29.0 million ⁴², subject to terms and conditions. An Equity Purchase Agreement with Atlas Sciences, LLC gives the company the right to require Atlas to purchase up to an aggregate of $50.0 million ⁴³ of Class A common stock, expiring November 25, 2024. An Equity Distribution Agreement with Maxim Group LLC allows the company to sell Class A common stock for aggregate gross proceeds of $9.0 million ⁴⁴ through Maxim as a sales agent, with a commission of 3.0% ⁴⁵ of the gross sales price. The company does not intend to pay dividends on its common stock, retaining future earnings for development, operation, and expansion.

The company has received a notice from Nasdaq on February 17, 2026, indicating non-compliance with the minimum bid price requirement of $1.00 ⁴⁶ per share for continued listing. Cloudastructure has a compliance period of 180 calendar days, until August 17, 2026, to regain compliance. If compliance is not regained, the company may be eligible for an additional 180 calendar day compliance period, requiring it to meet other listing standards and potentially effect a reverse stock split. The company's operations are vulnerable to interruption by fire, severe weather conditions, power loss, telecommunications failure, terrorist activity, pandemics/epidemics, and other events beyond its control.

Cloudastructure faces several material risks, including the potential delisting of its Class A common stock from the Nasdaq Capital Market due to non-compliance with the minimum bid price requirement of $1.00 ⁴⁷ per share, which could reduce liquidity and inhibit additional financing. The company's technology is continuously under development, and there is no assurance it will ever be fully developed. Breaches of security measures or unauthorized access to individually identifiable biometric or other personally identifiable information could harm the company's reputation and incur significant liabilities. The collection, processing, use, and disclosure of such information are subject to evolving privacy and security regulations, including the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), which could require business changes, impose additional costs, and reduce demand for software solutions. Issues arising from the use of artificial intelligence (AI) in its platforms, such as flawed algorithms, insufficient or biased datasets, or ethical concerns, may result in reputational harm or liability. The company operates in a highly competitive industry dominated by large, well-capitalized market leaders, which could impact its ability to maintain or gain market share. Successful infringement claims against the company could lead to significant monetary liability or prevent product sales. Reliance on third-party suppliers for hardware and software solutions poses a risk if these parties fail to meet obligations. The company has a limited operating history and has historically operated at a loss, incurring a net loss of approximately $8.5 million ⁴⁸ in 2025 and an accumulated deficit of approximately $49.3 million ⁴⁹ as of December 31, 2025, and anticipates sustaining operating losses for the foreseeable future, requiring substantial additional capital. A significant portion of revenue is derived from a limited number of customers, with Hasta Capital and RV Mobile Power each accounting for approximately 17% ⁵⁰ of total revenues in 2025, creating customer concentration risk. Future issuances of preferred stock or additional Class A common stock for financing or incentive plans could dilute existing stockholders.

Management's message to shareholders emphasizes Cloudastructure's position as an award-winning innovator in cloud-native, AI-powered security solutions, aiming to provide comprehensive, real-time situational awareness to enterprises. The company's mission is to empower businesses to see and respond to events as they happen, transforming video data into actionable intelligence and deterrence into measurable results. Management acknowledges the company's limited operating history and historical losses, with a net loss of approximately $8,462,000 ⁵¹ for the year ended December 31, 2025, and an accumulated deficit of approximately $49,000,000 ⁵² as of December 31, 2025. Despite these losses, management believes that existing financing arrangements, including the Series 2 Equity Financing, the Equity Line, and the ATM Facility, will provide sufficient capital to fund operations through at least June 30, 2027. The company's stockholders' equity of approximately $8.9 million ⁵³ as of December 31, 2025, is noted as being in excess of the Nasdaq minimum requirement of $2.5 million ⁵⁴. Key strategic priorities for the period ahead include expanding within existing top-tier customer locations, acquiring additional customers in the property management ("proptech") space, and entering into additional new markets in 2026. Management also highlights the ongoing investment in building out sales and marketing teams and maintaining a robust engineering and development team, alongside the continuous development and enhancement of the company's technology platform and service offerings.