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 June 30, 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

For the three months ended June 30, 2026, 99.7% of total sales were to customers in the United States. During the six months ended June 30, 2026, 99.2% of total sales were to customers in the United States. For the three months ended June 30, 2025, 100.0% of total sales were to a customer in the United States. During the six months ended June 30, 2025, 77.6% of total sales were to a customer in the United States and 22.4% of total sales were to a customer in Canada.

Customer concentration

For the three months ended June 30, 2026, 2 customers accounted for approximately 88.4% of total sales (Customer A, 70.2% and Customer B, 18.2%). For the six months ended June 30, 2026, 2 customers accounted for approximately 88.3% of total sales (Customer A, 75.8% and Customer B, 12.5%).

For the three months ended June 30, 2025, three customers accounted for approximately 90.2% of total sales (Customer C, 45.5%, Customer D, 31.6% and Customer B, 13.1%). For the six months ended June 30, 2025, three customers accounted for approximately 88.6% of total sales (Customer C, 41.2%, Customer D, 25.0% and Customer E, 22.4%).

SAFE PRO GROUP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 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 June 30, 2026, two customers accounted for 99.7% of the total accounts receivable balance.

Supplier concentration

During the three months ended June 30, 2026, the Company purchased approximately 91.6% of its inventory from three suppliers (Supplier A 53.1%, Supplier B 21.2%, and Supplier C 17.2%). During the six months ended June 30, 2026, the Company purchased approximately 85.0% of its inventory from three suppliers (Supplier A 38.3%, Supplier B 34.2%, and Supplier C 12.5%).

During the three months ended June 30, 2025, the Company purchased approximately 77.2% of its inventory from two suppliers (Supplier D, 45.9% and Supplier E, 31.2%). During the six months ended June 30, 2025, the Company purchased approximately 93.8% of its inventory from four suppliers (Supplier G, 40.8%, Supplier D, 28.3%, Supplier E, 13.5%, and Supplier F, 11.2%,).

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.