NOTE 9 – CONCENTRATIONS

Concentrations of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash deposits.

The Company’s cash is held at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation (“FDIC”) limit. To date, the Company has not experienced any losses on its invested cash. As of March 31, 2026 and December 31, 2025, the Company recorded no cash in bank in excess of FDIC insured levels. In August 2024, the Company has entered into a deposit placement agreement for Insured Cash Sweep Service (“ICS”). This service is a secure, and convenient way to access FDIC protection on large deposits, earn a return, and enjoy flexibility. This will reduce the Company’s risk as it relates to uninsured FDIC amounts in excess of $250,000.

Geographic concentrations of sales

During the three months ended March 31, 2026, 98.6% of total sales were to customers in the United States. During the three months ended March 31, 2025, 33.7% of total sales were to a customer in Canada and 66.3% of total sales were to customers in the United States.

Customer concentration

For the three months ended March 31, 2026, one customer, Customer A, accounted for approximately 82.0% of total sales. For the three months ended March 31, 2025, three customers accounted for approximately 94.4% of total sales (Customer B 33.7%, Customer C 39.1% and Customer D 21.6%, respectively).

SAFE PRO GROUP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(unaudited)

A reduction in sales from or the loss of such customers would have a material adverse effect on the Company’s results of operations and financial condition. On March 31, 2026, one customer accounted for 94.2% of the total accounts receivable balance. On March 31, 2025, one customer accounted for 84.5% of the total accounts receivable balance.

Supplier concentration

During the three months ended March 31, 2026, the Company purchased approximately 79.4% of its inventory from two suppliers (Supplier A 67.9%, and Supplier B 11.5%.) During the three months ended March 31, 2025, the Company purchased approximately 88.9% of its inventory from four suppliers (Supplier C 10.0%, Supplier B 42.0%, Supplier D 15.3% and Supplier E 21.7%).

The loss of these suppliers may have a material adverse effect on the Company’s results of operations and financial condition. However, the Company believes that, if necessary, alternate vendors could supply similar products in adequate quantities to avoid material disruptions to operations.