QCLS 10-K & 10-Q changes, risk factors and insider trading
Q/c Technologies, Inc. · Nasdaq · In Vitro & In Vivo Diagnostic Substances · CIK 1321834 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We have recently shifted our business strategy from pharmaceutical development to laser-based computing for blockchain and high-performance computing, and we may not successfully develop, validate or commercialize our new technology.”
New heading “We may require significant additional capital to develop the qc-LPU100, finance pilot deployments and other development efforts, and execute our hardware commercialization plan, and we may be unable to obtain such capital on acceptable terms or at all.”
New heading “Our primary source for developing qc-LPU100 and LPU prototypes is through a licensing partnership, and therefore the Company is dependent upon maintaining and increasing the number of licensing agreements and developing annual recurring revenues through those partnerships, in order to continue to develop its business.”
New heading “Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate.”
New heading “In order to compete, we must attract, retain and motivate key associates, and the failure to do so could have an adverse effect on our business, financial condition and results of operations.”
New heading “We have a very limited workforce and are highly dependent on a small number of individuals to execute our business strategy, which exposes us to significant operational risk.”
New heading “The quantum computing industry is competitive and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers.”
New heading “Even if we are successful in developing qc-LPU100 and LPU prototypes, competitors in the industry may achieve technological breakthroughs that render our systems obsolete or inferior to other technology.”
New heading “The quantum-class laser computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we anticipate, if it encounters negative publicity or if quantum computing products and services generally do not achieve commercial adoption, the growth of our business will be harmed.”
New heading “The cryptocurrency and blockchain markets are highly volatile, and a sustained downturn in cryptocurrency prices or demand could materially reduce the market for our laser-based computing products.”
New heading “Unfavorable conditions in our industries or the global economy could limit our ability to grow our business and negatively affect our results of operations.”
New heading “Our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, are subject to extensive clinical development, regulatory approval, and commercialization risks that could reduce the value of these assets.”
New heading “The commercial viability of our legacy pharmaceutical product candidates is dependent on market acceptance, pricing, reimbursement, and competition, any of which could reduce the value of these assets.”
New heading “The Company’s legacy pharmaceutical operations are subject to healthcare laws and regulations, including anti-kickback, fraud and abuse, and healthcare reform legislation, which could affect the value of these pharmaceutical assets.”
New heading “Our legacy pharmaceutical operations involve the use of hazardous materials, and we are subject to environmental, health, and safety laws and regulations.”
New heading “Our focus on blockchain and cryptocurrency infrastructure exposes us to regulatory, cybersecurity, and market risks that could materially impact adoption of our technology.”
New heading “We may be subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.”
New heading “Our business depends on our exclusive global licensing agreement with LightSolver, and loss of access to this technology or disputes regarding intellectual property could materially and adversely affect our operations.”
New heading “Under the Series H Purchase Agreement and Series G Purchase Agreement, we are subject to certain restrictive covenants that may make it difficult to procure additional financing.”
New heading “Current market and economic conditions in one or more of our markets could impact our ability to grow our business.”
Removed heading “Risks Related to our Product Development and Regulatory Approval”
Removed heading “Risks Related to Commercialization and Manufacturing”
Removed heading “Our financial statements have been prepared on a going concern basis; we must raise additional capital to fund our operations in order to continue as a going concern.”
Removed heading “The concentration of the capital stock ownership with insiders of the Company will likely limit the ability of our stockholders to influence corporate matters.”
Removed heading “We must attract and retain highly skilled employees to succeed.”
Removed heading “We operate in a highly competitive industry.”
Removed heading “If we fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.”
Removed heading “With regard to our Supera-CBD product candidate, we must conduct pre-clinical testing and prepare and submit an IND to the FDA. With regard to both our Isomyosamine and Supera-CBD product candidates, we must conduct all phases of clinical studies, which will likely take several years and substantial expenses to complete, before we can submit an application for marketing approval to the FDA, and we may be required to complete additional post-market or “Phase 4” studies after application or approval. There is no guarantee that we will complete such clinical development in a timely manner or at all or that we will obtain or maintain regulatory approval for either product candidate.”
Removed heading “Potential Risks”
Removed heading “Clinical drug development is a lengthy, expensive, and inherently uncertain process, and we may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.”
Removed heading “If we are unable to develop, obtain regulatory approval for and commercialize Isomyosamine, Supera-CBD or other future product candidates, or if we experience significant delays in doing so, our business will be materially harmed.”
Removed heading “We may not have the resources to conduct clinical protocols sufficient to yield data suitable for publication in peer-reviewed journals and our inability to do so in the future could have an adverse effect on marketing our products effectively.”
Removed heading “Success in pre-clinical studies and earlier clinical trials for our product candidates may not be indicative of the results that may be obtained in later clinical trials, including our Phase 2 clinical trial for Isomyosamine, which may delay or prevent obtaining regulatory approval.”
Removed heading “Even if we complete the necessary pre-clinical studies and clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize a product candidate and the approval may be for a narrower indication than we seek.”
Removed heading “Our failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our product candidates outside the U.S.”
Removed heading “Our development program for Supera-CBD, a synthetic analog of CBD, is in its infancy and subject to substantial uncertainty and may not yield commercial results and is subject to significant regulatory risks.”
Removed heading “Negative public perception of cannabis-related businesses, misconceptions about the nature of our business or Supera-MD, and regulatory uncertainties relating to the legality of cannabinoids could each have a material adverse effect on our business, financial condition, and results of operations.”
Removed heading “Risks Related to Commercialization and Manufacturing”
Removed heading “The commercial success of our product candidates, including Isomyosamine and Supera-CBD, will depend upon their degree of market acceptance by providers, patients, patient advocacy groups, third-party payors and the general medical community.”
Removed heading “The pricing, insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue.”
Removed heading “If third parties on which we depend to conduct our planned pre-clinical studies or clinical trials, do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines, our development program could be delayed with adverse effects on our business, financial condition, results of operations and prospects.”
Removed heading “We face significant competition in an environment of rapid pharmacological change and it is possible that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may harm our business, financial condition and our ability to successfully market or commercialize Isomyosamine, Supera-CBD and our other product candidates.”
Removed heading “The manufacture of drugs is complex, and our third-party manufacturers may encounter difficulties in production. If any of our third-party manufacturers encounter such difficulties, our ability to provide supply of Isomyosamine, Supera-CBD or our other product candidates for clinical trials, our ability to obtain marketing approval, or our ability to provide supply of our product candidates for patients, if approved, could be delayed or stopped.”
Removed heading “We could be adversely affected if healthcare reform measures substantially change the market for medical care or healthcare coverage in the U.S.”
Removed heading “We are subject to inspection and market surveillance by the FDA to determine compliance with regulatory requirements. If the FDA finds that we have failed to comply, the agency can institute a wide variety of enforcement actions which may materially affect our business operations.”
Removed heading “The FDA’s ability to review and approve new products may be hindered by a variety of factors, including budget and funding levels, ability to hire and retain key personnel, statutory, regulatory and policy changes and global health concerns.”
Removed heading “Our operations and relationships with future customers, providers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to penalties including criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.”
Removed heading “Our internal computer systems, or those of its third-party vendors, collaborators, or other contractors may be subject to various federal and state confidentiality and privacy laws in the United States and abroad and could sustain system failures, security breaches, or other disruptions, any of which could have a material adverse effect on our business.”
Removed heading “Our success largely depends on our ability to obtain, maintain and protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their adequate protection.”
Removed heading “Our potential strategy of obtaining rights to key technologies through in-licenses may not be successful.”
Removed heading “If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.”
Removed heading “We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful and could result in a finding that such patents are unenforceable or invalid.”
Removed heading “We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.”
Removed heading “Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.”
Removed heading “Changes in patent law in the U.S. and in non-U.S. jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.”
Removed heading “Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.”
Removed heading “If we do not obtain patent term extension for any product candidates we may develop, our business may be materially harmed.”
Largest changes
“If we successfully finalize the qc-LPU100 prototypes, our technology and services may be subject to U.S. export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control. U.S. export control and economic sanctions laws include restrictions or prohibitions on the sale or supply of certain products, technologies, and services to U.S. …”see in full comparison
“Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. …”see in full comparison
“Numerous international, national, federal, provincial and state laws, including state privacy laws (such as the California Consumer Privacy Act), state security breach notification and information security laws, and federal and state consumer protection laws govern the collection, use, and disclosure of personal information. …”see in full comparison
“Our operations and relationships with future customers, providers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to penalties including criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.”see in full comparison
“Our legacy pharmaceutical operations involve the use of hazardous materials, including chemicals and biological materials. We are subject to numerous environmental, health, and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment, and disposal of hazardous materials and wastes. We generally anticipate contracting with third parties for the disposal of these materials and wastes. We will not be able to eliminate the risk of contamination or injury from these materials. …”see in full comparison
“On the legislative front, the American Rescue Plan Act of 2021 was signed into law on March 11, 2021, which, in relevant part, eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source drugs and innovator multiple source drugs, beginning January 1, 2024. And, in July 2021, the Biden administration released an executive order entitled, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. …”see in full comparison
Full comparison: every changed paragraph (246)
Risks
Related to our Product Development and Regulatory Approval
Risks
Related to Commercialization and Manufacturing
Risks
Related to GovernmentOur RegulationLegacy Pharmaceutical Business
Our
financial statements have been prepared on a going concern basis; we must raise additional capital to fund our operations in order to
continue as a going concern.
In
its report dated April 1, 2024, Morison Cogen LLP, our independent registered public accounting firm, expressed substantial doubt about
our ability to continue as a going concern as we have suffered recurring losses from operations and have insufficient liquidity to fund
our future operations. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. The accompanying
consolidated financial statements do not include any adjustments that might result if we are unable to continue as a going concern and,
therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause
investors to suffer the loss of all or a substantial portion of their investment. As of December 31, 2024, we had approximately $8.5
million of cash and marketable securities. In order to have sufficient cash to fund our operations in the future, we will need to raise
additional equity or debt capital and cannot provide any assurance that we will be successful in doing so. If are unable to raise sufficient
capital to fund our operations, we may need to delay, reduce or eliminate certain research and development programs or other operations,
sell some or all of our assets or merge with another entity.
We
expect that we will need to raise additional funding before we can expect to become profitable from our laser-based computing
business or any potential future salesrealization of value from our
legacy pharmaceutical product candidates. This additional financing may not be
available on acceptable terms or at all. Failure to obtain this necessary capital
when needed may force us to delay, limit or
terminate our product development efforts or other operations.
We
will require substantial future capital in order to completefund plannedthe development, commercialization, and futuredeployment pre-clinicalof our laser-based
computing business, including the qc-LPU100 prototype, performance benchmarking, pilot testing, hardware certifications,
manufacturing, and clinicalscaling developmentdeployment forclusters. In addition, we hold legacy pharmaceutical assets, including Isomyosamine and
Supera-CBDSupera-CBD, and potentiallymay commercializeincur these product candidates. We expect increased spending levelscosts in connection with ourmaintaining clinical
trialsor disposing of ourthose productassets candidates.as Inpart addition,of ifany strategic alternatives we obtainevaluate. marketing approval for any of our product candidates, we expect to incur
significant expenses related to commercial launch, product sales, medical affairs, regulatory, marketing, manufacturing and distribution.
Furthermore, we expect to incur additional costs associated with operating as a public company.
Accordingly, we will need to obtain substantial
additional funding in connection with our continuing operations before any
commercial revenue may occur.
We have recently shifted our business strategy from pharmaceutical development to laser-based computing for blockchain and high-performance computing, and we may not successfully develop, validate or commercialize our new technology.
We have historically focused on pharmaceutical research and development of our Isomyosamine and Supera-CBD product candidates. Beginning in September 2025, we redirected our strategy toward energy-efficient blockchain and cryptocurrency infrastructure using laser-based computing. However, the qc-LPU100 prototypes we are developing remain in early-stage development, have not completed performance validation or regulatory certifications, and may not achieve the speed, efficiency, scalability, or energy-consumption improvements we anticipate.
If the qc-LPU100 or future LPUs do not perform as expected, cannot be manufactured at commercial scale, or fail to gain adoption from AI, DePin Token, or cryptocurrency infrastructure users, our business prospects and financial condition would be materially adversely affected. Furthermore, our lack of operating history in the technology hardware, photonics, and blockchain markets increases the uncertainty of our ability to execute this new strategy.
We may require significant additional capital to develop the qc-LPU100, finance pilot deployments and other development efforts, and execute our hardware commercialization plan, and we may be unable to obtain such capital on acceptable terms or at all.
Our shift to laser-based computing for blockchain, DePin Token infrastructure, and AI requires significant capital for prototype development, performance benchmarking, pilot testing, hardware certifications, manufacturing and scaling deployment clusters. Additional capital will likely be needed to fund operations through prototype completion, including R&D efforts, beta-unit deployment, and early commercialization, particularly given the volatility and cyclicality of the cryptocurrency sector.
Equity or debt financing may be unavailable or may occur on dilutive or unfavorable terms. Our ability to raise capital may be constrained by our prior going-concern history and our strategic transition. If we cannot secure additional financing, we may be forced to delay or reduce prototype development, defer regulatory certifications, scale back commercialization efforts, or cease operations.
Our primary source for developing qc-LPU100 and LPU prototypes is through a licensing partnership, and therefore the Company is dependent upon maintaining and increasing the number of licensing agreements and developing annual recurring revenues through those partnerships, in order to continue to develop its business.
We are in the early stages of shifting our business and recently began transitioning our products to LPU technology by licensing through a channel partner. There can be no certainty over the pace and scale of revenue growth generated from such relationship, which might take longer than anticipated to generate material revenues. In addition, we are dependent upon maintaining our existing partnership in order to continue to develop our business and annual recurring revenues. If revenues from our licensing relationship fail to develop, take longer than expected to develop, or we fail to maintain existing or increase the number of our partnerships, the impact could adversely affect its business, financial condition, and results of operations.
The
market price of our Common Stock has been and could continue to be subject to significant fluctuation following. Market prices for securities
of life sciences and biopharmaceutical companies in particular have historically been volatile and have shown extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry
factors, as well as general economic,
political and market conditions such as recessions or interest rate changes, may seriously affect
the market price of our Common Stock,
regardless of the actual operating performance of the combined company. Some of the factors that
may cause the market price of our Common
Stock to fluctuate include:
We
are a clinical-stage pharmaceutical company with a limited operating history. Pharmaceutical product development is a highly speculative
undertaking and involves a substantial degree of risk. Our operations to date have been limited primarily to business planning, raising
capital and conducting research and development activities for our product candidates. We have never generated any revenue from product
sales. We have not obtained regulatory approvals for any of our product candidates and we have funded our operations to date through
proceeds from private placements of Common Stock and a line of credit from an affiliate of TNF’s founder.
We
have incurred net losses in each year since our inception. We incurred
net losses attributable to shareholders of $27,161,219$11,627,122 and $8,218,163
$23,359,334, for the years ended December 31, 20242025 and 2023,2024, respectively.
As of December 31, 2024,2025, we had an accumulated deficit of $129,080,851.
$144,122,732. Substantially all our operating losses have resulted from costs
incurred in connection with our research and development programsefforts and
from general and administrative costs associated with our operations.
We expect to continue to incur significant expenses and operating
losses over the next several years and for the foreseeable future as we intend to continue to conduct research and development, clinical
testing, regulatory compliance activities, manufacturing activities, and, if any ofdevelop our productlaser-based candidates is approved, sales and marketingcomputing
activities that,technology, together with anticipated general and administrative expenses, will likely result in the company incurring significant losses
losses for the foreseeablenext future.several years. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect
effect on our shareholders’ equity and working capital.
Our limited operating history related to our laser-based computing technology may make it difficult to evaluate the success of our business to date and to assess our future viability.
As a result of our limited operating history related to our laser-based computing technology, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. Our ability to generate revenues will largely be dependent on our ability to develop and produce the qc-LPU100. As a result, our scalable business model relating to our laser-based computing technology has not been formed and our technical roadmap may not be realized as quickly as expected, or even at all. The development of our scalable business model will likely require the incurrence of a substantially higher level of costs than incurred to date, while our revenues will not substantially increase until our technology is developed, that requires a number of technological advancements which may not occur on the currently anticipated timetable or at all. As a result, our historical results relating to our laser-based computing technology should not be considered indicative of our future performance. Further, in future periods, our growth could slow or decline for a number of reasons, including but not limited to increased competition, changes to technology, inability to scale up our technology, a decrease in the growth of the overall market, or our failure, for any reason, to continue to take advantage of growth opportunities.
We have also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries. If our assumptions regarding these risks and uncertainties and our future growth are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer. Our success as a business ultimately relies upon fundamental research and development breakthroughs in the coming years and decade. There is no certainty these research and development milestones will be achieved as quickly as expected, or even at all.
Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
Market opportunity estimates and growth forecasts, including those we have generated, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of companies covered by our market opportunity estimates will purchase our products at all or generate any particular level of revenue for us. In addition, alternatives to quantum-class laser-based computing may present themselves and if they did, could substantially reduce the market for quantum computing services. Any expansion in our market depends on a number of factors, including the cost, performance, and perceived value associated with quantum computing solutions.
The methodology and assumptions used to estimate market opportunities may differ materially from the methodologies and assumptions previously used to estimate the total addressable market. To estimate the size of our market opportunities and our growth rates, we have relied on market reports by leading research and consulting firms. These estimates of the total addressable market and growth forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate and are based on data published by third parties that we have not independently verified. Advances in classical computing may prove more robust for longer than currently anticipated. This could adversely affect the timing of any quantum advantage being achieved, if at all.
TNF’s
predecessor, MyMD Florida, was formed in late 2014. Our operations to date have been limited primarily to business planning, raising
capital and conducting research and development activities for our product candidates. We have not yet demonstrated the ability to complete
clinical trials of our product candidates, obtain marketing approvals, manufacture a commercial-scale product or conduct sales and marketing
activities necessary for successful commercialization. Consequently, predictions about our future success or viability are speculative
and no assurances can be given about our future performance.
The
concentration of the capital stock ownership with insiders of the Company will likely limit the ability of our stockholders to influence
corporate matters.
As
of the date of this Annual Report on Form 10-K, the executive officers, directors, five percent or greater stockholders, and the
respective affiliated entities of the Company, in the aggregate, beneficially owned more than 10% of the Company’s outstanding
Common Stock. As a result, these stockholders, acting together, had, and continue to have, control over matters that require
approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate
actions might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of
delaying or preventing a corporate transaction that other stockholders may view as beneficial.
As
of April 4,12, 2025,2026, our largest stockholder, PharmaCyte Biotech, Inc.
(“Pharmacyte”) beneficially owns approximatelymore 88.64%than 10% of the
issued and outstanding Common Stock of the Company. As a result, if Pharmacyte
may be able to significantly influence all matters submitted
to the Company’s stockholders for approval, as well as the Company’s
management and affairs. For example, Pharmacyte could
significantly influence the election of directors or the approval of any merger,
consolidation or sale of all or substantially all of
the Company’s assets. This concentration of voting power could delay or prevent
an acquisition of the Company on terms that otherother.
In order to compete, we must attract, retain and motivate key associates, and the failure to do so could have an adverse effect on our business, financial condition and results of operations.
We depend on our executive officers and management team to run our business. As we develop new business models and new ways of working, we will need to develop suitable skill sets within our organization. In addition, our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees that have highly technical set of skills. The current market for such positions is highly competitive. Qualified individuals are in high demand and we may incur significant costs to attract and retain them. Moreover, the loss of any of our senior management or other key employees or our inability to recruit and develop capable managers could adversely affect our ability to execute our business plan and we may be unable to find adequate replacements.
We have a very limited workforce and are highly dependent on a small number of individuals to execute our business strategy, which exposes us to significant operational risk.
As of December 31, 2025, we had only two full-time employees and no part-time employees. Our limited workforce means that we are highly dependent on a very small number of individuals to manage all aspects of our business, including research and development, regulatory compliance, financial management, investor relations, and strategic planning. The loss, incapacity, or departure of any of these individuals could severely disrupt our operations and our ability to execute our business strategy. We rely heavily on third-party contractors and consultants for specialized functions, and any failure to retain or effectively coordinate with these third parties could delay our product development or commercialization efforts. Our minimal staffing also limits our capacity to respond to unexpected challenges, pursue multiple strategic initiatives simultaneously, or scale our operations rapidly if market conditions warrant. If we are unable to attract and retain additional qualified personnel as our business grows, or if our limited workforce is unable to effectively manage the demands of our business, our ability to achieve our strategic objectives could be materially impaired.
The quantum computing industry is competitive and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers.
Since our change in business strategy, we now operate in markets that are rapidly evolving and highly competitive. We expect competition to intensify as the marketplace continues to mature and new technologies and competitors enter. Our current competitors include:
We compete based on various factors, including technology, performance, brand recognition and reputation, scalability and reliability, data governance and security. Many of our competitors have substantially greater partner relationships, and financial, technical and other resources than we do. They may be able to respond more effectively than us to new or changing opportunities, technologies and standards. In addition, many countries are focused on developing quantum computing solutions either in the private or public sector and may subsidize quantum technology, which may make it difficult for us to compete. Many of these competitors do not face the same challenges we do in growing our business.
Additionally, we must be able to achieve our objectives in a timely manner such that we don’t lose ground to competitors, including competing technologies. Because there are a large number of market participants, including certain sovereign nations, focused on developing quantum computing technology, we must dedicate significant resources to achieving any technical objectives on the timelines established by our management team. Any failure to achieve objectives in a timely manner could adversely affect our business, operating results and financial condition.
For all of these reasons, competition may negatively impact our ability to maintain and grow consumption of our platform or put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.
Even if we are successful in developing qc-LPU100 and LPU prototypes, competitors in the industry may achieve technological breakthroughs that render our systems obsolete or inferior to other technology.
Our continued growth and success depend on our ability to innovate and develop LPU technology in a timely manner and effectively license these products. Without timely innovation and development, our technology could be rendered obsolete or less competitive by changing customer preferences or because of the introduction of a competitor’s newer technologies. We believe that many competing technologies will require a technological breakthrough in one or more problems related to science, fundamental physics or manufacturing. While it is uncertain whether such technological breakthroughs will occur in the next several years, that does not preclude the possibility that such technological breakthroughs could eventually occur. Any technological breakthroughs that render our technology obsolete or inferior to other products could have a material adverse effect on our business, financial condition or results of operations.
The quantum-class laser computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we anticipate, if it encounters negative publicity or if quantum computing products and services generally do not achieve commercial adoption, the growth of our business will be harmed.
The nascent market for quantum-class laser computing technology is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing customer demands and behaviors. Our success will depend to a substantial extent on the willingness of the industry to adopt LPU technology to in organizations, government agencies, and other users of quantum computing offerings. Negative publicity concerning the quantum computing industry as a whole could limit market acceptance of our offerings. If our clients and partners do not perceive the benefits of our technology and services, or if they do not drive customer engagement, then our market may not develop at all, or it may develop more slowly than we expect. Similarly, individual and industry concerns or negative publicity regarding technophobic views in the context of quantum computing could limit market acceptance of our quantum computing products and services. If any of these events occur, our business, prospects, financial condition and operating results could be harmed.
In addition, our growth and future demand for our products is highly dependent upon the adoption by developers and customers of quantum computers. Technical failures at other quantum computing companies could limit acceptance of our services and technology. Negative publicity concerning the quantum computing industry as a whole could limit acceptance of our products and services. While we believe that quantum-class laser computing technology will solve many large-scale problems, it is possible that such problems may never be solvable by quantum computing technology. If any of these events occur, it could have a material adverse effect on our business, financial condition and results of operations.
The cryptocurrency and blockchain markets are highly volatile, and a sustained downturn in cryptocurrency prices or demand could materially reduce the market for our laser-based computing products.
Our laser-based computing products, including the qc-LPU100, are primarily targeted at cryptocurrency infrastructure, DePin Token ecosystems, and blockchain applications. The cryptocurrency market has historically experienced extreme price volatility, including dramatic declines in the market prices of Bitcoin, Ethereum, and other digital assets. A sustained downturn in cryptocurrency prices could significantly reduce investment in cryptocurrency mining, blockchain infrastructure, and related computational services, thereby decreasing demand for our products. Additionally, the cryptocurrency industry has experienced high-profile failures of exchanges, lending platforms, and other participants, which have eroded confidence in the industry. Any reduction in the overall size, growth, or acceptance of the cryptocurrency and blockchain ecosystem, whether due to market conditions, regulatory actions, security breaches, or loss of investor confidence, could materially limit our addressable market and adversely affect our business, financial condition, and results of operations.
Unfavorable conditions in our industries or the global economy could limit our ability to grow our business and negatively affect our results of operations.
Our results of operations may vary based on the impact of changes in our industries or the global economy on us or our customers and potential customers. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, inflation, international trade relations, tariffs, public health emergencies, political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States or elsewhere, could cause a decrease in business investments, including the progress on development of quantum technologies, and negatively affect the growth of our business. In addition, in challenging economic times, our current or potential future customers may experience cash flow problems and as a result may modify, delay or cancel plans to purchase our products and services. Additionally, if our customers are not successful in generating sufficient revenue or are unable to secure financing, they may not be able to pay, or may delay payment of, amounts they owe.
Furthermore, uncertain economic conditions may make it more difficult for us to raise funds through borrowings or sales of debt or equity securities. We cannot predict the timing, location, strength or duration of any economic slowdown, instability or recovery, generally or within any particular industry.
We
must attract and retain highly skilled employees to succeed.
To
succeed, we must recruit, retain, manage and motivate qualified clinical, scientific, technical and management personnel, and we face
significant competition for experienced personnel. If we do not succeed in attracting and retaining qualified personnel, particularly
at the management level, it could adversely affect our ability to execute our business plan, harm our results of operations and increase
our capabilities to successfully commercialize Isomyosamine, Supera-CBD and our other product candidates. The competition for qualified personnel
in the biotechnology field is intense and as a result, we may be unable to continue to attract and retain qualified personnel necessary
for the development of our business or to recruit suitable replacement personnel.
Many
of the other biotechnology companies that we compete against for qualified personnel have greater financial and other resources, different
risk profiles and a longer history in the industry than we do. They also may provide more diverse opportunities and better chances for
career advancement. Some of these characteristics may be more appealing to high-quality candidates than what we have to offer. If we
are unable to continue to attract and retain high-quality personnel, the rate and success at which we can discover and develop product
candidates and our business will be limited.
We
operate in a highly competitive industry.
We
face, and will continue to face, intense competition from large pharmaceutical companies, specialty pharmaceutical and biotechnology
companies as well as academic and research institutions pursuing research and development of technologies, drugs or other therapies that
would compete with our products or product candidates. The pharmaceutical market is highly competitive, subject to rapid technological
change and significantly affected by existing rival drugs and medical procedures, new product introductions and the market activities
of other participants. Our competitors may develop products more rapidly or more effectively than us. If our competitors are more successful
in commercializing their products than us, their success could adversely affect our competitive position and harm our business prospects
and may also lead to the diversion of funding away from us and towards other companies.
If
we fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur
costs that could harm our business.
We
are subject to numerous environmental, health, and safety laws and regulations, including those governing laboratory procedures and the
handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations will involve the use of hazardous materials,
including chemicals and biological materials. Our operations also may produce hazardous waste products. We generally anticipate contracting
with third parties for the disposal of these materials and wastes. We will not be able to eliminate the risk of contamination or injury
from these materials. In the event of contamination or injury resulting from any use by us of hazardous materials, we could be held liable
for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil
or criminal fines and penalties for failure to comply with such laws and regulations.
Although
we maintain workers’ compensation insurance to cover us for costs and expenses, we may incur due to injuries to our employees resulting
from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.
In
addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws and regulations.
These current or future laws and regulations may impair our research, development or production efforts. Our failure to comply with these
laws and regulations also may result in substantial fines, penalties or other sanctions.
In
addition, we collect and store sensitive data, including intellectual property, research data, our proprietary business information and
that of our suppliers, technical information about our products, clinical trial plans and employee records. Similarly, our third-party
providers possess certain of our sensitive data and confidential information. The secure maintenance of this information is critical
to our operations and business strategy. Despite the implementation of security measures, our internal computer systems, and those of
third parties on which we rely, are vulnerable to damage from computer viruses, malware, ransomware, cyber fraud, natural disasters,
terrorism, war, telecommunication and electrical failures, cyberattacks or cyberintrusions over the Internet, attachments to emails,
persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption,
particularly through cyberattacks or cyberintrusions, including by computer hackers, foreign governments, and cyber terrorists, has generally
increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Any such
breach could compromise our networks and the information stored there could be accessed, publicly disclosed, encrypted, lost or stolen.
Any such access, inappropriate disclosure of confidential or proprietary information or other loss of information, including our data
being breached at third-party providers, could result in legal claims or proceedings, liability or financial loss under laws that protect
the privacy of personal information, disruption of our operations or our product development programs and damage to our reputation, which
could adversely affect our business.
Risks
Related to ourOur ProductLegacy DevelopmentPharmaceutical and Regulatory ApprovalBusiness
Our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, are subject to extensive clinical development, regulatory approval, and commercialization risks that could reduce the value of these assets.
Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. Clinical drug development is lengthy, expensive, and inherently uncertain. With regard to Isomyosamine, the Company has completed certain early-stage pre-clinical testing and IND submission for some, but not all, targeted indications. With regard to Supera-CBD, the Company remains in the pre-clinical stage, which is the earliest stage of development. Clinical trials are expensive, difficult to design and implement, and can take many years to complete, and their outcomes are inherently uncertain. Failure can occur at any time during the clinical trial process. Success in pre-clinical studies and earlier clinical trials is not predictive of results in later-stage clinical trials. Many companies in the pharmaceutical industry have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and there is a high failure rate for product candidates proceeding through clinical trials. These risks affect the value of the Company’s pharmaceutical assets.
Management's Discussion & Analysis (MD&A)
New heading “Consulting Agreement”
New heading “Employment Agreement”
New heading “Franchise Tax Expenses”
New heading “Warrant Issuance Expense”
New heading “Franchise Tax Expense”
New heading “Warrant Issuance Expenses”
New heading “Preferred Stock Issuance Expenses”
New heading “Capital Requirements”
New heading “Series G Preferred Stock Offering”
New heading “Series H Preferred Stock Offering”
New heading “Mezzanine Equity”
Removed heading “Reduction in Workforce”
Removed heading “Nasdaq Deficiency”
Removed heading “February 2023 Offering”
Removed heading “Series F Convertible Preferred Stock”
Removed heading “Series F Common Stock Warrants”
Removed heading “Series F-1 Private Placement”
Removed heading “Series F-1 Warrants”
Removed heading “Series G Private Placement”
Removed heading “Series G Warrants”
Removed heading “Registration Rights Agreements”
Removed heading “Private Placement Warrants”
Removed heading “Nasdaq Stockholder Approval”
Removed heading “Reverse Stock Split”
Removed heading “Delaware Reincorporation”
Largest changes
“During the year ended December 31, 2023, we recorded a gain of $3,088,800 related to the change in fair value of the derivative liabilities. …”see in full comparison
“Based on our current operating plan, existing cash balances, and expected cash flows, management believes that the Company has sufficient liquidity to fund its operations for at least the next twelve months. However, our ability to continue as a going concern is dependent on our ability to increase revenues, manage operating expenses, and access additional capital as needed. Liquidity constraints and access to capital markets could negatively affect our liquidity and require changes to our operating or investment strategy.”see in full comparison
“On April 5, 2024, the Company entered into an Omnibus Waiver and Amendment (the “Omnibus Agreement”) with the Required Holders (as defined in the Series F Certificate of Designations). …”see in full comparison
“On September 2, 2025, the Company entered into an Omnibus Amendment Agreement (the “September 2025 Omnibus Amendment”) with the Required Holders (as defined in each of (i) the Series F Certificate of Designations and (ii) the Series F-1 Certificate of Designations) pursuant to which, the Required Holders agreed to (i) amend and restate the Series F Certificate of Designations by filing a Second Amended and Restated Certificate of Designations of the Series F Preferred Stock (the “Second Amended and Restated Series F Certificate of Designations”) with the Secretary of State, and (ii) amend and …”see in full comparison
“On September 2, 2025, the Company entered into the September 2025 Omnibus Amendment with the Required Holders (as defined in each of (i) the Series F Certificate of Designations and (ii) the Series F-1 Certificate of Designations) pursuant to which, the Required Holders agreed to (i) amend and restate the Series F Certificate of Designations by filing a Second Amended and Restated Certificate of Designations of the Series F Preferred Stock with the Secretary of State, and (ii) amend and restate the Series F-1 Certificate of Designations by filing an Amended and Restated Certificate of …”see in full comparison
“The Company has historically been engaged in the development and commercialization of two therapeutic platforms based on well-defined targets: Isomyosamine and Supera-CBD. Recently, the Company has shifted its business strategy to focus on energy-efficient blockchain and cryptocurrency infrastructure through quantum-class laser-based computing. The Company’s core strategy leverages an exclusive global licensing agreement with LightSolver Ltd. …”see in full comparison
Full comparison: every changed paragraph (175)
The
information set forth below should be read in conjunction with our consolidated financial statements and related notes thereto included
elsewhere in this Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements based on our current expectations,
assumptions, estimates and projections. These forward-looking statements involve risks and uncertainties. Our actual results could differ
materially from those indicated in these forward-looking statements as a result of certain factors, including those discussed in Item
1 of this Annual Report on Form 10-K, entitled “Business,” under “Forward-Looking Statements” and Item 1A of
this Annual Report on Form 10-K, entitled “Risk Factors.” References in this discussion and analysis to “us,”
“we,” “our,” or “the Company” refer collectively to TNFQ/C Pharmaceuticals,Technologies, Inc.
Our
financial statements are prepared in accordance with GAAP.U.S. Generally Accepted Accounting Principles (“GAAP”) and SEC rules and regulations. These
accounting principles require us to make certain estimates, judgments
and assumptions. We believe that the estimates, judgments and
assumptions upon which we rely are reasonable based upon information available
to us at the time that these estimates, judgments and
assumptions are made. These estimates, judgments and assumptions can affect the
reported amounts of assets and liabilities as of the
date of the financial statements as well as the reported amounts of revenues and
expenses during the periods presented. Our
financial statements would be affected to the extent there are material differences between
these estimates and actual results. In
many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP
and does not require
management’s judgment in its application. There are also areas in which management’s judgment in selecting
any available
alternative would not produce a materially different result. The following discussion should be read in conjunction with our
our financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K.
The Company has historically been engaged in the development and commercialization of two therapeutic platforms based on well-defined targets: Isomyosamine and Supera-CBD. Recently, the Company has shifted its business strategy to focus on energy-efficient blockchain and cryptocurrency infrastructure through quantum-class laser-based computing. The Company’s core strategy leverages an exclusive global licensing agreement with LightSolver Ltd. (“LightSolver”) to deploy innovative laser processing units (“LPUs”), specifically the Company-branded qc-LPU100™ (“qc-LPU100”), which harnesses the natural properties of light with the goal of achieving high computational speed and energy efficiency. The qc-LPU100 is intended to address complex combinatorial and physical problems, such as partial differential equations, and is targeted for applications in cryptocurrency, decentralized physical infrastructure tokens (“DePin Tokens”), and artificial intelligence-driven high-performance computing that relies on decentralized networks. The Company seeks to position itself as a first-mover in bridging laser-based computing with cryptocurrency infrastructure, addressing industry challenges including high energy consumption, scalability limitations, and reliance on traditional graphics processing units (“GPUs”). LPUs are designed to operate at room temperature in standard rack-unit sizes and are intended to outperform GPUs and quantum processing units (“QPUs”) in speed, efficiency, and sustainability, while enhancing blockchain security.
The Company is evaluating the potential divestiture of Isomyosamine and Supera-CBD to fund its new strategic focus, with the objective of creating long-term stockholder value.
Consulting Agreement
On January 16, 2026, the Company entered into a consulting agreement (the “Consulting Agreement”) with Chelsea Voss (the “Consultant”), a current director of the Company, pursuant to which, the Consultant agreed to provide certain consulting services to the Company, including evaluating companies and making related introductions, analyzing technologies and operations, reviewing and advising on potential acquisitions and any other consulting or advisory services which the Company reasonably requests that the Consultant provide to the Company. The Consulting Agreement has a term of twelve (12) months, unless earlier terminated pursuant to the terms of the Consulting Agreement or upon the mutual written consent of the Company and the Consultant in accordance with the terms of the Consulting Agreement.
Pursuant to the Consulting Agreement, the Company agreed to (i) pay the Consultant a monthly fee equal to $12,500 (or, $150,000 annually) payable in arrears on a monthly basis, (ii) grant to the Consultant 212,500 restricted stock units, subject to the terms and conditions of the Company’s standard restricted stock unit award agreement and the Q/C Technologies, Inc. 2021 Equity Incentive Plan, as amended (the “Plan”), which vest in four substantially equal installments on the quarterly anniversaries of the issuance date, provided that the Consultant continues to provide services to the Company through such applicable vesting dates and subject to the related restricted stock unit award agreement, and (iii) grant to the Consultant stock options to purchase up to an aggregate of 212,500 shares of Common Stock at an exercise price equal to the greater of (a) $5.097 per share and (b) the fair market value per share of Common Stock on the date of grant (the “Consultant Options”), subject to the terms and conditions of the Company’s standard nonqualified stock option award agreement and the Plan. The Consultant Options vest and become exercisable in four (4) substantially equal installments on each quarterly anniversary of the issuance date, provided that the Consultant continues to provide services to the Company through such applicable vesting dates.
Employment Agreement
On April 13, 2026, the Company entered into an executive compensation agreement (the “Employment Agreement”) with Joshua Silverman, who serves as the Company’s Executive Chairman, setting forth the terms and conditions of Mr. Silverman’s continued employment as a member of the Company’s Board of Directors and as the Company’s Executive Chairman. The Employment Agreement has a three-year initial term commencing on April 13, 2026 (the “Effective Date”), which term automatically renews each year for successive one-year terms, unless earlier terminated by either party in accordance with the terms of the Employment Agreement.
The Employment Agreement provides that Mr. Silverman will be entitled to receive an annual base salary of one hundred and twenty thousand dollars ($120,000) (“Base Salary”), payable in accordance with the Company’s normal payroll practices. For each fiscal year during the employment period, Mr. Silverman is eligible to receive an annual bonus upon achievement of target objectives and performance criteria, payable on or before March 15 of the fiscal year following the fiscal year to which the bonus relates. The Employment Agreement also entitles Mr. Silverman to receive customary benefits and reimbursement for ordinary business expenses.
Pursuant to the Employment Agreement, Mr. Silverman is entitled to receive, on the Effective Date and subsequently on the first day of each calendar quarter thereafter, a number of fully vested restricted stock units (“RSUs”) equal to an aggregate value of $60,000 per grant calculated based on the closing price of the Company’s Common Stock as of the grant date or the closing price of the last preceding business day if the grant date is not a business day (rounded down for any fractional shares). The RSUs granted pursuant to the Employment Agreement are subject to the terms and conditions of the Company’s standard restricted stock unit award agreement and the Company’s long-term equity incentive plan. With respect to the RSU grants provided in the Employment Agreement, the Company further agreed to provide Mr. Silverman with an additional lump-sum cash payment equal to any estimated personal income and applicable employment taxes to be withheld or paid in connection with Mr. Silverman’s receipt of the applicable RSUs.
In the event Mr. Silverman’s employment is terminated by the Company for Cause (as defined in the Employment Agreement) or by Mr. Silverman without Good Reason (as defined in the Employment Agreement), Mr. Silverman will be entitled to: (i) any earned but unpaid Base Salary earned during his employment and applicable to all pay periods prior to the termination date, and (ii) any unpaid expense reimbursements and vested amounts and benefits in accordance with the terms of any applicable plan, program, corporate governance document, policy, agreement or arrangement of the Company (collectively, “Accrued Compensation”).
If Mr. Silverman’s employment is terminated prior to the end of the term by the Company without Cause or by Mr. Silverman for Good Reason, then, subject to certain conditions set forth in the Employment Agreement (including the execution and non-revocation of a general release of claims), Mr. Silverman will be entitled to: (i) Accrued Compensation; (ii) severance equal to two times the sum of (A) Mr. Silverman’s Base Salary in effect at the time his employment terminates and (B) the target bonus for the year of termination prorated based upon the number of days worked for the year of termination; and (iii) accelerated vesting of the unvested portion of any outstanding equity awards.
If Mr. Silverman’s employment is terminated prior to the end of the term by the Company without Cause or by Mr. Silverman for Good Reason within two (2) years after a Change in Control (as defined in the Employment Agreement) or within six (6) months prior to a Change in Control, Mr. Silverman will be entitled to: (i) Accrued Compensation; (ii) severance equal to three times the sum of (A) Mr. Silverman’s Base Salary in effect at the time his employment terminates and (B) the target bonus for the year of termination prorated based upon the number of days worked for the year of termination; and (iii) accelerated vesting of the unvested portion of any outstanding equity awards.
The Employment Agreement also contains customary provisions relating to, among other things, confidentiality and non-disparagement.
TNF
is a clinical stage pharmaceutical company committed to extending healthy lifespan. TNF is focused on developing and commercializing
two therapeutic platforms based on well-defined therapeutic targets, Isomyosamine and Supera-CBD:
The rights
to Supera-CBDTM were previously owned by Supera Pharmaceuticals, Inc. (“Supera”) and were acquired by MyMD Florida (as defined
below) immediately prior to the closing of the Merger (as defined below) that occurred in 2021.
Reduction
in Workforce
During
October 2023, the Company implemented a reduction in workforce, eliminating three of the Company’s ten employees. Separated employees
were granted a severance package equal to one-quarter of their annual salary.
On
June 7, 2023, the Company granted the three separated employees’ options to purchase an aggregate of 7,668 shares of Common Stock
with an exercise price of $47.10 per share. As consideration for a waiver and release in their separation agreements, the Company amended
the employees’ respective June 7, 2023 option agreements to accelerate vesting of the portion of optioned shares that otherwise
would have vested upon the first and second anniversaries of the date of grant. The options have an exercise period of twelve months
from the date of separation.
Going
Concern
As
of December 31, 2024, the Company’s cash on hand was $173,154 and marketable securities were $8,345,082. The Company has incurred
a net loss attributable to shareholders of $27,161,219 for the year ended December 31, 2024. As of December 31, 2024,
the Company had working capital of $2,710,626 and stockholders’ equity of $9,789,740 including an accumulated deficit of $129,138,286.
During the year ended December 31, 2024, cash flows used in operating activities were $8,976,347. The Company does not currently have
sufficient available liquidity to fund its operations for at least the next 12 months. Such factors raise substantial doubt about our
ability to sustain operations for at least one year from the issuance of the audited financial statements included in this Annual Report.
The accompanying financial statements do not include any adjustments related to the carrying amounts of assets or liabilities.
In
response to these conditions and events, we are evaluating various financing strategies to obtain sufficient additional liquidity to
meet our operating and capital requirements for the next twelve months following the date of this Annual Report. The potential sources
of financing that we are evaluating include one or any combination of secured or unsecured debt, convertible debt and equity in both
public and private offerings. We also plan to finance near-term operations with our cash on hand, as well as by exploring additional
ways to raise capital. The sources of financing described above that could be available to us and the timing and probability of obtaining sufficient capital
depend, in part, on our further developing and commercializing our product candidates and on future capital market conditions. If our
current assumptions regarding the pace of such development are incorrect, or if there are any other changes or differences in our current
assumptions that negatively impact our financing strategy, we may have to reduce expenditures or significantly delay, scale back or discontinue
the development or commercialization of our product candidates.
There is no assurance
we will manage to raise additional capital or otherwise increase cash flows, if required. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Nasdaq
Deficiency
On
March 17, 2025, the Company received a letter from the Listing Qualifications Department of Nasdaq indicating that, based upon the closing
bid price of the Company’s Common Stock for the 30 consecutive business days between January 30, 2025, to March 14, 2025, the Company
did not meet the minimum bid price of $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq
Listing Rule 5550(a)(2). The letter also indicated that the Company will be provided with a compliance period of 180 calendar days, or
until September 15, 2025 (the “Compliance Period”), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A).
In
order to regain compliance with Nasdaq’s minimum bid price requirement, the Company’s Common Stock must maintain a minimum
closing bid price of $1.00 for at least ten consecutive business days during the Compliance Period. In the event the Company does not
regain compliance by the end of the Compliance Period, the Company may be eligible for an additional 180 calendar days to regain compliance.
There can be no assurance that the Company will be eligible for the additional 180 calendar day compliance period, if applicable, or
that the Nasdaq staff would grant the Company’s request for continued listing subsequent to any delisting notification. In the
event of such a notification, the Company may appeal the Nasdaq staff’s determination to delist its securities.
The Company is a pre-revenue company that has not generated any revenue from product sales to date. The Company’s primary revenue opportunity is its laser-based computing business, through which it intends to generate revenue from a combination of hardware sales, leasing arrangements, subscription-based access to LPU clusters, and potential licensing or royalty arrangements associated with the integration of its technology into blockchain infrastructure or other computing platforms. In addition, the Company holds legacy pharmaceutical assets, including the Isomyosamine and Supera-CBD product candidates. The Company does not expect to generate revenue from these pharmaceutical assets and is evaluating strategic alternatives, which may include divestiture or out-licensing.
We anticipate that our expenses will increase significantly as we advance the development and commercialization of our laser-based computing business, including prototype development, performance benchmarking, pilot testing, hardware certifications, manufacturing, and deployment of LPU systems.
We
will not generate revenue from product sales unless and until we successfully complete clinical development, obtain regulatory approval
for, and successfully commercialize our Isomyosamine and Supera-CBD product candidates. The lengthy process of securing marketing approvals
for new drugs requires the expenditure of substantial resources. Any significant delay or failure to obtain regulatory approvals would
materially adversely affect our product candidate’s development efforts and our business overall. In addition, if we obtain regulatory
approval for Isomyosamine and/or Supera-CBD, we expect to incur significant expenses related to developing our commercialization capability
to support product sales, marketing, manufacturing and distribution activities.
We
anticipate that our expenses will increase significantly as we:
We
have not generated any revenue from product sales and do not expect to generate any revenue from the sale of pharmaceutical products
in the near future.
If With respect to our researchlaser-based andcomputing developmentbusiness, effortsthe withCompany Isomyosamineintends and Supera-CBD are successful, we mayto generate revenue fromthrough producta salescombination of hardware sales, leasing arrangements, and service-based offerings, including subscription-based
access to LPU clusters and potential licensing or through
licenseroyalty agreements with third parties.arrangements.
Our operating expenses are broken into several components, including research and development and general and administrative costs. We expect operating expenses to increase as we advance prototype development, performance benchmarking, pilot testing, and early commercialization activities for our laser-based computing business, and as we incur costs to maintain our legacy pharmaceutical assets, including Isomyosamine and Supera-CBD, while we evaluate strategic alternatives.
Our
operating expenses are broken into several components, including research and development and general and administrative costs.
We
expect operating expenses to increase as we progress through the various clinical trials in the development of Isomyosamine and Supera-CBD.
Our research and development expenses consist of costs associated with both our laser-based computing business and the maintenance of our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD. For our laser-based computing business, these costs include prototype development expenses for the qc-LPU100, performance benchmarking activities, LightSolver licensing costs, consulting and general development expenses, and related engineering and technical costs. For our legacy pharmaceutical business, these costs include, but are not limited to:
Our
research and development expenses primarily consist of costs associated with the development of Isomyosamine and Supera-CBD. These costs include,
but are not limited to:
None of our two employees are principally involved in research and development activities for either the laser-based computing business or our legacy pharmaceutical product candidates, Isomyosamine or Supera-CBD. Their salaries, wages and benefits are captured as a component of research and development but not allocated to specific projects.
It
is difficult to project with absolute accuracy the duration or final cost of the development of our laser-based computing products,
including the qc-LPU100, or our legacy pharmaceutical product candidates, Isomyosamine and Super-CBDSupera-CBD, or if revenue will be
be generated from the commercialization of any of these components.products. TheFor our laser-based computing business, costs will depend on the pace
of prototype development, benchmarking results, regulatory certifications, and deployment timelines. For our legacy pharmaceutical
business, the process of achieving regulatory approval is very costly and time consuming.
A few of the many factors that contribute to costs of duration include:
General
and administrative expenses primarily consist of salaries, wages and benefits for our employees in the executive, legalexecutive and accounting
functions and third-party costs for legal, accounting, insurance, investor relations, stock market and board expenses.
Franchise Tax Expenses
Franchise taxes paid to the State of Delaware based on the number of authorized shares of Common Stock.
Warrant Issuance Expense
The bifurcated fair market value of warrants issued with the private placement of Series F-1 Preferred Stock, Series G Preferred Stock, and Series H Preferred Stock.
Other
income (expense), net consists of interest and dividends earned on our cash, cash equivalents, and investments, gains on the sale marketable
securities, losses on equity investments, gains on the forgiveness of debt and an uninsured casualty loss.
We
are focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets, Isomyosamine and Supera-CBD.
The following table summarized the results of operations for the years ended December 31, 20242025 and 2023.2024.
Personnel costs decreased $270,857, or 41%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease is primarily driven by the fact that during the year ended December 31, 2024, we renegotiated a staff members compensation package resulting in a savings of $240,000 on an annualized basis. As of December 31, 2025, we have two full-time administrative staff members.
Personnel
costs decreased $759,850 during the year ended December 31, 2024. We reduced administrative staffing during the year ended December
31, 2023, from four full-time positions to two and renegotiated one staff members compensation during the year ended December 31,
2024. In addition, two research and development staff members had 20% of their salaries allocated to general administrative
expenses to recognize their areas of responsibility. One of these staff members separated during the year ended December 31, 2023, and
the other during the year ended December 31, 2024. As of December 31, 2024, we have two full-time administrative staff members.
Professional
services costs increased $206,050$192,822, or 15.4%, during the year
ended December 31, 2025, as compared to the year ended December 31, 2024. These costs include the consulting fees for our Interim Chief
Chief Financial Officer andOfficer, 20% of the consulting fees for our President and Chief Medical Officer. Other costs includeOfficer, legal,
accounting and audit,audit fees, general business consulting,
and specialized consultingvaluation services related to the initial and quarterly calculation of the fair market value
of the Seriespreferred Fstock Preferred Stock, Series F-1 Preferred Stockand
components and Seriesthe Gacquisition Preferredof Stockthe LightSolver license. The increase is primarily driven by an increase in costs associated with valuation
services and their
components.recruiting fees.
Stock
market and investor relations costs decreased $102,496$93,901, or 11.8%, during
the year ended December 31, 2025, as compared to the year ended December 31, 2024. These costs include the annual Nasdaq
listing fees,
activities related to keeping the stockholder base informed through press releases, presentations and other communication
efforts, transfer
agent fees, and the costs of annual stockholder meetings. The decrease is attributedprimarily driven by the fact that during the year ended December
31, 2024, we engaged a public relations group to perform a reductionmedia blitz to generate interest in consultingthe Company and its product candidates
at a cost of $145,000, this program was not repeated in year ended December 31, 2025. In addition, we saw additional savings related to
periodic filing and stock exchange fees andwhich stockholderwere offset by increases in expenses related to the annual stockholders’ meeting expenses.and
transfer agent fees.
Other
administrative expenses decreased $624,683$253,716, or 17.9%, during the year
ended December 31, 2025, as compared to the year ended December 31, 2024. These costs include Board expenses, business insurance, corporate
corporate travel, and other general business expenses. The decrease is attributable to decreases in Board expenses,and business insurance expenses, facility leasing expense,
and corporate travel expenses.
Salaries and wages decreased $462,552, or 65.5%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. During the year ended December 31, 2024, four full-time staff members separated from the Company. As of December 31, 2025, we have no full-time research and development staff members.
Development program costs include those associated with pre-clinical development, clinical trials and other material and development programs for the biologics segment and consulting and general development expenses for the technology segment, including costs related to the development of the qc-LPU100 prototype, performance benchmarking, and LightSolver licensing activities. Costs increased $507,081, or 21.2%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The increase is attributed to increases in expenses related to the biologic products, including drug products and clinical projects offset by a reduction of expenses for pre-clinical projects and the startup and consulting expenses related to the technology product.
Salaries
and wages decreased $1,059,574 during the year ended December 31, 2024. We reduced administrative staffing during the year ended
December 31, 2023, from six full-time positions to four and the remaining full-time staff separated during the year ended December
31, 2024. Two research and development staff members had 20% of their salaries allocated to general administrative expenses to
recognize their areas of responsibility. One of these staff members separated during the year ended December 31, 2023, and the other
during the year ended December 31, 2024. As of December 31, 2024, we have no full-time research and development staff members.
Development
program costs include those associated with pre-clinical development, clinical trials and other material and development programs.
Costs decreased $3,205,377 during the year ended December 31, 2024, compared to the year ended December 31, 2023, a result of the
completion of pre-clinical toxicology studies and the Phase 2 Sarcopenia clinical trial, the analysis of the Phase 2 Sarcopenia
study results, and the acquisition of base compounds for use in on-going studies. During the year ended December 31, 2024, we engaged
a new Contract Research Organization and began preparing materials for the Phase 2b Sarcopenia clinical trial.
Professional
services costs decreased $12,137$18,132, or 5.7%, during the year
ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. These costs include the 80%scientific ofadvisory theboard, general consulting fees for our President and
Chief Medical Officer, other consulting services , andservices, legal and patentother related
fees associated with the protectionmaintenance of ourthe Company’s intellectual property. The decrease is associated
with a decline in legal and scientific advisory board fees offset by an increase in general consulting services.
Regulatory
expenses decreased $21,184$390, or 100%, during the year ended December
31, 2024,2025, as compared to the year ended December 31, 2023.2024. Regulatory expenses include clinicalaudits, researchregistration organizationsfees (CRO)and other regulatory
andexpenses. During the year ended December 31, 2025, the Company did not incur any regulatory consulting fees associated with Phase 2 clinical study designs, protocol preparations and the maintenance of the investigator
brochures.expenses.
Other
research and
development expenses decreasedincreased $128,513$4,824, or 16.1%, during the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.
2024. These expenses include laboratory supplies,
training shipping and freight expenses, training, and travel while working with third-party
trial sites. The decreaseincrease is attributable to an increase in specialized
freight costs for materials offset by decreases in global
licensing and travel in support of the studiesvarious and data analysis of the Phase 2 Sarcopenia trial results.studies.
Stock-based compensation increased $517,253 during the year ended December 31, 2025, as compared to the year ended December 31, 2024. During the year ended December 31, 2025, stock-based compensation totalled $2,174,524 as follows:
During
the year ended December 31, 2024, stock-based compensation totaledtotalled $1,057,271.$1,060,444. These expenses includerepresent the amortization for two tranches
of vested stock options issued to directors, staff,
and service providers.providers Duringduring the year ended December 31, 2023, stock-based compensation totaled $3,049,537 for stock options issued
to staff and service providers, restricted stock units and Common Stock warrants issued for services.2023.
What changed in the latest 10-Q
Risk Factors
There are no additional risk factors other than those previously disclosed in “Item 1A. Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC on April 15, 2026. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in our annual report, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Summary of Statements of Consolidated Operations for the Six Months Ended June 30, 2026 and 2025”
New heading “General and Administrative Expenses”
New heading “Stock-Based Compensation”
New heading “Franchise Tax Expenses”
New heading “Impairment of Technology License”
New heading “Research and Development Expenses”
New heading “Other Income and Expense”
Removed heading “Francise Tax Expenses”
Removed heading “Registration Rights Agreements”
Removed heading “Series H Registration Rights Agreements”
Largest changes
“During the six months ended June 30, 2025, we recorded a gain of $1,303,000 related to the change in fair value of the Series F-1 Derivative liabilities, which is recorded in other income (expense) on the Statements of Operations. …”see in full comparison
“During the six months ended June 30, 2026, we recorded a gain of $591,000 related to the change in fair value of the Series H Derivative liabilities, which is recorded in other income on the Statements of Operations. …”see in full comparison
“QCLS is engaged in the development of a proprietary silicon photonic computing architecture for artificial intelligence (“AI”) inference. The Company focuses its efforts on its optical processing unit initiative (the “OPU Initiative”). …”see in full comparison
“In connection with the Series H Private Placement, we entered into the Series H Registration Rights Agreement, pursuant to which we are obligated, among other things, to (A) file a resale registration statement (the “Registration Statement”) with the SEC to register for resale promptly following the Series H Closing Date, but in no event later than 15 calendar days after the Series H Closing Date, the sum of (i) 200% of the maximum number of Series H Conversion Shares issuable upon conversion of the shares of Series H Preferred Stock ((x) assuming for purposes hereof that the shares of Series …”see in full comparison
“Summary of Statements of Consolidated Operations for the Six Months Ended June 30, 2026 and 2025”see in full comparison
Full comparison: every changed paragraph (81)
QCLS is engaged in the development of a proprietary silicon photonic computing architecture for artificial intelligence (“AI”) inference. The Company focuses its efforts on its optical processing unit initiative (the “OPU Initiative”). The OPU Initiative is focused on developing next-generation optical computing technologies designed to address the performance, bandwidth, and energy limitations of traditional electronic computing architectures, including through internally developed intellectual property and strategic collaborations addressing challenges such as analog precision, nonlinear computation, and memory integration. The Company has assembled a team of experts in AI, photonics, and advanced computing to support the OPU Initiative and intends to develop proprietary optical chip architectures designed to address key bottlenecks in bandwidth, energy efficiency, and scalability for AI inference applications, while building a portfolio of foundational intellectual property through patent filings. In connection with this shift in strategic focus, the Company relocated its headquarters to San Francisco, California, where it is establishing an integrated photonics laboratory to accelerate research and development of the OPU Initiative.
QCLS
has historically been engaged in the development and commercialization of two therapeutic platforms based on well-defined targets:
Isomyosamine and Supera-CBD. Recently, the Company has shifted its business strategy to focus on energy-efficient blockchain and
cryptocurrency infrastructure through quantum-class laser-based computing. The Company’s core strategy leverages an exclusive
global licensing agreement with LightSolver Ltd. (“LightSolver”) entered into on September 2, 2025, to deploy innovative
laser processing units (“LPUs”), specifically the Company-branded qc-LPU100™ (“qc-LPU100”), which
harnesses the natural properties of light with the goal of achieving high computational speed and energy efficiency. The qc-LPU100
is intended to address complex combinatorial and physical problems, such as partial differential equations, and is targeted for
applications in cryptocurrency, decentralized physical infrastructure tokens (“DePin Tokens”), and artificial
intelligence-driven high-performance computing that relies on decentralized networks. The Company seeks to position itself as a
first-mover in bridging laser-based computing with cryptocurrency infrastructure, addressing industry challenges including high
energy consumption, scalability limitations, and reliance on traditional graphics processing units (“GPUs”). LPUs are
designed to operate at room temperature in standard rack-unit sizes and are intended to outperform GPUs and quantum processing units
(“QPUs”) in speed, efficiency, and sustainability, while enhancing blockchain security.
The
Company is evaluating the potential divestiture of Isomyosamine and Supera-CBD to fund its new strategic focus, with the objective of
creating long-term stockholder value.
As
of MarchJune 31,30, 2026, the Company’s
cash on hand was $1.13$0.3 million and marketable securities were $11.85$10.68 million. The Company has incurred
a net loss from operations
of $1.86$8.65 million for the threesix months ended MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, the Company had working capital
of $10.02$8.18 million and
stockholders’ equity of $20.70$16.09 million including an accumulated deficit of $145.65$152.19 million. During the three six
months ended March
31,June 30, 2026, cash flows used in operating activities were $3.29$5.11 million consisting primarily of a net loss of $1.24 million,$7.86
million. Since its
inception, the Company has met its liquidity requirements principally through the sale of its Common Stock and Preferred
Stock in public
and private placements.
The
Company evaluated the current cash requirements for operations in conjunction with management’s strategic plan and believes that
that the Company’s current financial resources as of the date of the issuance of these condensed consolidated financial
statements are
sufficient to fund its current operating budget and contractual obligations as of MarchJune 31,30, 2026 as they fall due
within the next twelve-month period following the issuance of these condensed consolidated financial statements,
period, alleviating any substantial doubt raised by the Company’s historical operating results
and satisfying its estimated liquidity
needs for twelve months from the issuance of these condensed consolidated financial
statements.
NoneOne
of our three employees is involved in the research and development activities for the laser-based computing business. None of our other
two employees are principally involved in the research and development activitiesof for either the laser-based computing business or
our legacy pharmaceutical product candidates, Isomyosamine
or Supera-CBD. Their salaries, wages and benefits are captured as a component
of research and development but not allocated to specific
projects.
Other
income (expense), net consists of interest and dividends earned on our cash, cash equivalents, and investments, gains on the sale marketable
securities, and gains or losses on equity investments, gains on the forgiveness of debt and an uninsured casualty loss.investments.
Summary
of Statements of Consolidated Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025
The
following table summarized the results of consolidated operations for the three months ended MarchJune 31,30, 2026 and 2025.
We
had no revenue from operations during the three months ended MarchJune 31,30, 2026 and 2025.
The
table below summarizes our general and administrative expenses for the three months ended MarchJune 31,30, 2026 and 2025:
Personnel
costs increased
$43,486, $13,405, or 39%,12%, during the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.
During the
three months ended MarchJune 31,30, 2025, the Company had three employees, during the three months ended MarchJune 31,30, 2026, there are
four three
employees. Employment for two employees terminated in 2025 and twoone new employeesemployee joined the Company for the three months ended
June March
31,30, 2026. The increase in personal cost directly relates to the increased compensation (salaries) of the new employeesemployee hired in
2026.
Professional
services costs increased
$315,604, $248,624, or 133%,87%, during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.
These costs included legal and
accounting and specialized consulting services regularly incurred in the normal course of business. The
increase is primarily related
to increases in fees for recruiting services, legal fees, and general business consulting services; primarily
supporting the 2025 financial
statement audit and the2025 preparation of the Company’s Annual Report onSEC Form 10-K forpreparation the year ended December 31, 2025.efforts.
Stock
market and investor relations
costs decreased $132,001,$173,946, or 74%,76%, during the three months ended MarchJune 31,30, 2026, compared to the three months
ended MarchJune 31,30, 2025. These costs
include the annual Nasdaq listing fees, activities related to keeping the shareholder base informed through press releases,
printing materials and proxies, presentations
and other communication efforts and the costs of annual stockholder meetings. The decrease
is primarily due to the costs associated with
corporate brandinga effortsspecial duringstockholder meeting scheduled in the threefirst monthshalf endedof March2025 31, 2026,
in connectionalong with the Company’srequired
annual quantum-classstockholder laser-based computing business strategy.meeting.
Other
administrative expenses
decreased $2,124,increased $20,569, or 1%,8%, during the three months ended MarchJune 31,30, 2026, compared to the three months ended March 31,June
30, 2025. These costs include
board of director expenses, business insurance, corporate travel and other general operating expenses.
Costs were generally unchanged
during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.
Stock-based
compensation decreasedincreased $26,030,$2,268,801 or 31%,2,163%, during the three months ended MarchJune 31,30, 2026, as compared to the three months ended March 31,June
30, 2025.
All The increase is primarily a result of the stock options issued on June 7, 2023 fully vested during Junethe 2025.second quarter to the Board of Directors, which
had immediate vesting. Additionally, the Company entered into an additional consulting agreement that granted stock options with
immediate vesting.
Francise
Tax Expenses
Franchise
taxes for the state of Delaware totaled $219,403 and $0 for the three months ended March 31, 2026 and 2025, respectively. The
increase is related to the franchise tax for 2025 that was paid late and is reflected in the condensed consolidated financial
statements as of September 30, 2025.
The
table below summarizes our research and development expenses for the three months ended MarchJune 31,30, 2026 and 2025:
Salaries
and wages decreasedincreased $39,362,$60,588 or 62%,101%, during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.
2025. During the three months ended MarchJune 31,30, 2025, the Company recorded payroll and severance expenses for one employee. During the
three months
ended MarchJune 31,30, 2026, the Company onehad staffhired member.a highly compensated engineer in R&D.
Development
program costs include those associated with pre-clinical development, clinical trials and other material and development programs.programs for the three months ended June 30, 2025.
Costs
decreased $896,346,$621,098, or 66%,91%, during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The
decrease is related
to the suspension of the Company’s Phase 2b study of Isomyosamine.
Professional
services costs decreased $95,481,$55,500, or 80%,50%, during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.
These These
costs are primarily related to consulting services not related to a specific development program and legal and maintenance fees
associated associated
with the protection of our intellectual property.
Other
research and development expenses decreased $3,790,$21,239, or 100%, during the three months ended MarchJune 31,30, 2026, compared to the three
months ended March
31,June 30, 2025. These expenses include laboratory supplies, training and travel for department personnel while working
with third-party trial
sites. The decrease during the three months ended MarchJune 31,30, 20252026 is primarilydirectly related to decreasedthe expensessuspension forof internationalthe shipping.Phase 2b study and the transition from pharmaceutical research to laser-based and optical computing.
The
table below summarizes our other income and expenses for the three months ended MarchJune 31,30, 2026 and 2025:
Other
income, incomenet of expense totaled $612,416,$174,500 for the three months ended MarchJune 31,30, 2026,
and other income, net of expenses,expense, totaled $1,347,091
$76,428 for the three months ended MarchJune 31,30, 2025.
During
the three months ended MarchJune 31,30, 2026 interest and dividend income increased $8,828$43,050 primarily related to the availabilitytreasury ofyields cashhaving a
forlower investment.return compared to the first quarter.
During
the three months ended MarchJune 31,30, 2026, we recorded a lossgain of $510,000$81,000 related to the change in fair value of the Series H Derivative
liabilities, which is recorded in other income (expense) on the Statements of Operations. We estimated the $1,647,000$1,566,000 fair value of the
bifurcated embedded derivative at MarchJune 31,30, 2026 using a Monte Carlo simulation model, with the following inputs: the fair value of
our our
common stock of $1.62$3.90 on the valuation date, estimated equity volatility of 100.0%, estimated traded volume volatility of 275.0%,130.0%, the
time to maturity of 10.67 year,years, a
discounted market interest rate of 4.18%,3.92%, dividend rate of 10.0%,7.0%, a penalty dividend rate of 15.0%, and
probability of default of 5.2%.
4.4%.
During
the three months ended MarchJune 31,30, 2025, the Companywe recorded a gainloss of $1,284,000$19,000 related to the change in fair value of the derivativeSeries F-1 Derivative
liabilities, which is recorded in other income (expense) on the Statements of ComprehensiveOperations. Loss. The CompanyWe estimated the $0 fair value
of the bifurcated
embedded derivative at MarchJune 31,30, 2025 using a Monte Carlo simulation model, with the following inputs: the fair value
of our Common Stock
of $0.364$0.12 on the valuation date, estimated equity volatility of 110.0%,125.0%, estimated traded volume volatility of 265.0%,
345.0%, the time to maturity
of 0.250.5 years,year, a discounted market interest rate of 8.1%,4.28%, dividend rate of 10.0%, a penalty dividend rate of 15.0%,
and probability of
default of 2.5%.4.4%.
Summary of Statements of Consolidated Operations for the Six Months Ended June 30, 2026 and 2025
The following table summarized the results of consolidated operations for the six months ended June 30, 2026 and 2025.
Revenue
We had no revenue from operations during the six months ended June 30, 2026 and 2025.
General and Administrative Expenses
The table below summarizes our general and administrative expenses for the six months ended June 30, 2026 and 2025:
Personnel costs increased $56,890, or 26%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. During the six months ended June 30, 2025, the Company had three employees, during the six months ended June 30, 2026, there are three employees. Employment for two employees terminated in 2025 and two new employees joined the Company for the six months ended June 30, 2026. The increase in personal cost directly relates to the increased compensation (salaries) of the new employees hired in 2026.
Professional services costs increased $564,228, or 108%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These costs included legal and accounting and specialized consulting services regularly incurred in the normal course of business. The increase is primarily related to increases in fees for recruiting services, legal fees, and general business consulting services; primarily supporting the 2025 financial statement audit and 2025 SEC Form 10-K preparation efforts.
Stock market and investor relations costs decreased $260,594, or 64%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These costs include the annual Nasdaq listing fees, activities related to keeping the shareholder base informed through press releases, printing materials and proxies, presentations and other communication efforts and the costs of annual stockholder meetings. The decrease is primarily due to the costs associated with a special stockholder meeting scheduled in the first half of 2025 along with the required annual stockholder meeting.
Other administrative expenses decreased $26,907 or 5%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These costs include board of director expenses, business insurance, corporate travel and other general operating expenses. Costs were generally unchanged during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
Stock-Based Compensation
Stock-based compensation increased $2,242,771, or 1,184%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase is primarily a result of the stock options issued during the second quarter to the Board of Directors. The Company entered into an additional employment agreement to issue stock options.
Franchise Tax Expenses
Franchise taxes for the state of Delaware totaled $219,403 and $0 for the six months ended June 30, 2026 and 2025, respectively. The increase is related to the Franchise tax for 2025 was paid late and is reflected in the condensed consolidated financial statements as of September 30, 2025.
Impairment of Technology License
During the six months ended June 30, 2026, impairment of technology license increased by $3,177,999 related to the termination of the LightSolver agreement.
Research and Development Expenses
The table below summarizes our research and development expenses for the three months ended June 30, 2026 and 2025:
Salaries and wages increased $21,226, or 17%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. During the six months ended June 30, 2025, the Company recorded payroll and severance expenses for one employee. During the six months ended June 30, 2026, the Company the company began to build out R&D staffing for the computing technology business.
Development program costs include those associated with pre-clinical development, clinical trials and other material and development programs. Costs decreased $1,517,444, or 74%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease is related to the suspension of the Company’s Phase 2b study of Isomyosamine.
Professional services costs decreased $150,981, or 66%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These costs are primarily related to consulting services not related to a specific development program and legal and maintenance fees associated with the protection of our intellectual property.
Other research and development expenses decreased $25,119, or 100%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The 2025 expenses would normally include laboratory supplies, training and travel for department personnel while working with third-party trial sites. The decrease during the six months ended June 30, 2026 is primarily due to no spending in 2026 related to the pharmaceutical business.
Other Income and Expense
The table below summarizes our other income and expenses for the six months ended June 30, 2026 and 2025:
Other income, net of expenses totaled $786,916, for the six months ended June 30, 2026, and other income, net of expenses, totaled $1,423,519 for the six months ended June 30, 2025.
During the six months ended June 30, 2026 interest and dividend income increased $51,878 primarily related to reduced short-term yields on investments and the reduction in invested funds due to planned usage.
During the six months ended June 30, 2026, we recorded a gain of $591,000 related to the change in fair value of the Series H Derivative liabilities, which is recorded in other income on the Statements of Operations. We estimated the $1,566,000 fair value of the bifurcated embedded derivative at June 30, 2026 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $3.90 on the valuation date, estimated equity volatility of 130.0%, the time to maturity of 0.67 years, a discounted market interest rate of 3.92%, dividend rate of 7.0%, a penalty dividend rate of 15.0%, and probability of default of 4.4%.
During the six months ended June 30, 2025, we recorded a gain of $1,303,000 related to the change in fair value of the Series F-1 Derivative liabilities, which is recorded in other income (expense) on the Statements of Operations. We estimated the $0 fair value of the bifurcated embedded derivative at June 30, 2025 using a Monte Carlo simulation model, with the following inputs: the fair value of our Common Stock of $0.12 on the valuation date, estimated equity volatility of 125.0%, estimated traded volume volatility of 345.0%, the time to maturity of 0.5 year, a discounted market interest rate of 4.28%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 4.4%.
As
of MarchJune 31,30, 2026, the Company’s cash on hand was $1,127,619$307,612 and marketable securities were $11,847,305.
$10,679,782. The Company has incurred
a net loss attributable to stockholders of $1,528,448$8,067,968 for the threesix months ended MarchJune 31,30, 2026. As of March
31,June 30, 2026, the Company had
working capital of $10,016,447$8,175,648 and stockholders’ equity of $20,719,606,$16,090,897, including an accumulated deficit
of $145,651,183. $152,190,703.
Since its inception, the Company has met its liquidity requirements principally through the sale of its Common Stock
and preferred stock
in public and private placements.
Our
future capital requirements will depend on numerous factors, including
the timing and extent of market acceptance of our products and
services, investments in product development, sales and marketing activities,
working capital requirements, and the timing and amount
of future revenue. We may seek to raise additional capital through equity or debt
financings, strategic partnerships, or other arrangements.
There can be no assurance that such financing will be available on acceptable
terms, or at allall.
During
the threesix months ended March
31,June 30, 2026, cash flows used in operating activities were $3,286,563,$5,105,096, consisting primarily of a net loss of $1,242,777 $7,859,013
and changes in operating
assets and liabilities.
Our
netDuring the six months ended June 30, 2025, cash flows used in operating activities totaledwere $2,640,240 for the three months ended March 31, 2025,$4,705,607, consisting primarily of a net loss
of $1,124,743,$2,939,938 and a gain on the fair value of derivatives of $1,284,000,$1,303,000, and a decrease in prepaid expenses of $308,478$445,773 and a decrease
in trade and other payables.payables of $224,954.
QCLS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 1,753 shares, about $5.5K) and open-market sales in 0 filings. Net open-market shares: 1,753 (purchases minus sales); net value about $5.5K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-01 | Silverman Joshua |
Grant/award | 77,390 | — | — |
| 2026-07-10 | Silverman Joshua |
Grant/award | 16,620 | — | — |
| 2026-04-13 | Silverman Joshua |
Grant/award | 16,806 | — | — |
| 2026-04-13 | Silverman Joshua |
Grant/award | 162,162 | — | — |
| 2026-03-30 | Voss Chelsea Sierra |
Open-market purchase | 1,753 | $3.15 | $5.5K |
Well-known investors holding QCLS (13F)
None of the 59 investors we track reported a position in their latest 13F.