Rank One Computing Corp
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 13, 2026
ROC$3.39+4.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001213900-26-056913
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001193125-26-349111
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 107 current paragraphs.
51 unchanged; 28 reworded; 28 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
Full-Stack Capability: We are focused on owning the full stack of identity capabilities, offering comprehensive platforms that address a wide range of customer needs. This approach is evident in our development of products like ROC ABIS, ROC Evidence, ROC Watch, ROC Enroll, and ROC Evidence.
Current report
Modularity and Configurability: We design our systems to be modular and configurable, allowing us to adapt to specific customer requirements and integrate seamlessly with other technologies. This is crucial in a market where identity solutions must be flexible and adaptable.
Current report
Broad View of Identity: Unlike competitors who view identity narrowly as biometrics, we adopt a broader perspective that includes biometrics, license plates, person entities, and real-time video. This comprehensive view enables us to provide more holistic solutions and address a wider range of use cases.
Current report
Platform Approach: We are building a platform that offers both comprehensive solutions and individual components, recognizing that customers have diverse needs and require varying levels of integration. This strategy allows us to compete effectively with “all or nothing” approaches.
Current report
Pending Acquisition of Zuccaro Technical Consulting LLC
Current report
On June 23, 2026, we entered into a Purchase Agreement to acquire 100% of the equity interests of Zuccaro Technical Consulting LLC (“ZTC”), a provider of digital forensics services that complements our ROC Evidence product line. Consideration consists of $500,000 in cash payable at closing, subject to customary adjustments, $2,500,000 in restricted shares of our common stock vesting over three years, and revenue share payments equal to 15% of ROC Evidence Advanced Revenue over a seven-year term, capped in the aggregate at $7,000,000. Separately, we have committed to grant up to $500,000 of retention restricted stock units to continuing ZTC employees vesting over five years. Closing remains subject to customary conditions, including completion of an audit of ZTC’s 2024 and 2025 annual financial statements. The acquisition had not closed as of June 30, 2026 and remains pending as of the date of this Quarterly Report. We expect that a substantial portion of the share-based and revenue share consideration will be recognized as post-combination compensation expense over the applicable service periods rather than as purchase consideration, which we expect will increase operating expenses in future periods. For additional information, refer to Note 7 of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Current report
Execution of Indemnification Agreements by Directors and Executive Officers of the Company
Current report
On August 11, 2026, each of the Company's directors and executive officers entered into an indemnification agreement with the Company (each, an "Indemnification Agreement"). Each Indemnification Agreement provides that the Company will indemnify the director or officer party thereto against expenses, judgments, fines, penalties, and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending, or completed proceeding by reason of the fact that such person is or was a director or officer of the Company, to the fullest extent permitted under Colorado law.
Current report
Each Indemnification Agreement also provides for the advancement of expenses to the director or officer in connection with a covered proceeding, subject to the terms of the agreement. The Company's indemnification obligations under each Indemnification Agreement are not exclusive of any other indemnification rights to which the applicable director or officer may be entitled under the Company's organizational documents, applicable law, or any other agreement, and the Company is the indemnitor of first resort with respect to such obligations. Each Indemnification Agreement is governed by and construed in accordance with the internal laws of the State of Colorado.
Current report
Revenue increased by $124,060, or 2%, for the three months ended June 30, 2026 compared to the same period in 2025. The increase was primarily driven by higher R&D contract revenue, partially offset by lower product revenue.
Current report
R&D Contract revenue increased $867,703, or 41%, to $2,990,707. This increase is primarily attributable to a single research and development contract with a U.S. Government customer. We recognized approximately $2.7 million of revenue under that arrangement during the quarter. Of that amount, approximately $2.3 million related to a license of functional intellectual property and approximately $0.4 million related to research and development services. The license component was recognized in full during the second quarter. The services component is expected to be recognized over the remaining period of performance under the option, which extends into 2027.
Current report
Product revenue decreased $743,643, or 26%, to $2,102,275. The decrease was driven principally by a $1,676,462 decline in ROC Watch revenue, reflecting the completion of a significant ROC Watch deployment in the prior-year period, partially offset by an increase of $725,676 in ROC SDK revenue and increases of $143,761 and $45,882 in ROC ABIS and ROC Enroll revenue, respectively.
Current report
Revenue decreased by $500,820, or 6%, for the six months ended June 30, 2026 compared to the same period in 2025. The decrease was primarily driven by lower product revenue, partially offset by higher R&D contract revenue. Product revenue decreased by $857,611, or 16%, primarily due to lower ROC Watch revenue following the completion of a significant deployment. The decrease was partially offset by growth in ROC SDK from new customer and expansion opportunities, as well as increased revenue from ROC ABIS and ROC Evidence. R&D contract revenue increased by $356,791, or 12%, primarily reflecting revenue recognized from government-funded development contracts, including the significant contract awarded during the second quarter of 2026 discussed above.
Current report
Our revenue has historically been concentrated among a limited number of customers, and one customer accounted for 35% of total revenue for the six months ended June 30, 2026 and 47% of accounts receivable at June 30, 2026. The timing of contract awards, option exercises and license deliveries can cause our quarterly revenue to fluctuate significantly. Period-to-period comparisons of our results of operations should not be relied upon as indicative of future performance.
Current report
Our gross profit increased by $572,214 or 14%, for the three months ended June 30, 2026, compared to the same period in 2025, while gross margin improved to 90% from 80%. This improvement was driven principally by the recognition of the license component of the U.S. Government research and development arrangement described above, whereas the license portion of the arrangement was recognized with no significant incremental cost of sales. This arrangement accounted for substantially all of the margin improvement in the quarter. Our cost of sales also declined $448,154, or 46%, reflecting a lower proportion of hardware revenue following the decrease in ROC Watch revenue.
Current report
Our gross profit increased by $64,077, or 1%, for the six months ended June 30, 2026, compared to the same period in 2025, while gross margin improved to 86% from 80%. The drivers were the same as for the quarter, with the effect of the license component partially offset by the decline in higher-cost hardware revenue over the six-month period then ended.
Current report
We do not expect the gross margin improvement in the second quarter of 2026 to recur in the third and fourth quarters of 2026. Period-to-period comparisons of gross margin should not be relied upon as indicative of future performance.
Current report
Selling, general and administrative expenses increased by $2,407,364, or 63%, for the six months ended June 30, 2026, compared to the same period in 2025. The drivers were consistent with those described above for the quarter. The increase was primarily driven by higher personnel-related costs associated with expanding our business development and administrative functions to support the growth of our product offerings and markets served. The increase also reflected additional costs associated with operating as a public company. These investments support our long-term growth strategy.
Current report
Research and development expenses increased by $1,253,963, or 43%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by higher personnel-related costs associated with expanding our research and engineering organization and continued investment in the development and enhancement of our products and platform. These investments are intended to expand product capabilities, support new customer opportunities, and address evolving customer requirements across our target markets.
Current report
Total other expense increased by $28,125 and $40,778 for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily attributable to higher non-operating expenses, partially offset by higher interest income.
Current report
We recorded no provision for or benefit from income taxes for either the three or the six months ended June 30, 2026, in each case reflecting an effective tax rate of 0%. For the comparable prior-year periods, we recorded income tax expense of $229,494 for the three months ended June 30, 2025 on pre-tax income of $810,698, reflecting an effective tax rate of approximately 28.3%, and an income tax benefit of $61,319 for the six months ended June 30, 2025 on a pre-tax loss of $216,679, also reflecting an effective tax rate of approximately 28.3%. The $229,494 decrease in income tax expense for the three-month period, and the $61,319 decrease in income tax benefit for the six-month period were each primarily attributable to the establishment of a full valuation allowance against our U.S. federal and state deferred tax assets during 2025. The prior-year interim amounts were determined before that valuation allowance was established and therefore reflect tax expense and benefit at a blended federal and state rate, whereas no tax expense or benefit has been recognized in the current-year periods.
Current report
The shift from an income tax benefit for the six months ended June 30, 2025 to income tax expense for the three months ended June 30, 2025 does not reflect any change in our tax positions or in the rate applied. Because substantially the same blended federal and state rate of approximately 28.3% was applied in each period, the direction of the tax amount follows the direction of pre-tax results.
Current report
In addition, because relatively small changes in projected pre-tax results would produce significant changes in our estimated annual effective tax rate, we determined that a reliable estimate of the annual effective tax rate could not be made and computed our interim income tax provision based on actual year-to-date results.
Current report
We used $6,045,692 of cash in operating activities during the six months ended June 30, 2026, compared to $126,190 during the same period in 2025. Cash used in operating activities in the 2026 period included approximately $3.0 million of net outflows from changes in operating assets and liabilities, primarily due to a $1.5 million increase in accounts receivable, and a $0.7 million decrease in accounts payable and accrued expenses. We expect to continue to use cash in operating activities as we invest in product development and expand our sales and marketing organization. Our rate of cash usage in any given period depends substantially on the timing of contract awards, billings and collections, and may vary significantly from period to period
Current report
Our revolving line of credit provides for borrowings of up to $2.5 million. We repaid all amounts outstanding under the facility during the three months ended June 30, 2026 and had no borrowings outstanding as of June 30, 2026. The facility is payable on demand and may be cancelled by either party at any time upon written notice. Accordingly, we do not consider availability under the facility to be a committed source of liquidity.
Current report
Net cash used in operating activities was $6,045,692 and $126,190 for the six months ended June 30, 2026 and 2025, respectively. The increase of $5,919,502 was driven by two principal factors.
Current report
First, our cash operating costs grew substantially faster than gross profit. Selling, general and administrative expenses increased $2,407,364 and research and development expenses increased $1,253,963, while gross profit increased only $64,077. The costs driving that growth, principally personnel costs and costs associated with operating as a public company, were substantially settled in cash during the period.
Current report
Second, changes in operating assets and liabilities used $3.0 million of cash during the 2026 period, compared to $0.5 million during the 2025 period. The most significant movement was a $1.5 million increase in accounts receivable, with one customer representing 47% of our accounts receivable balance at June 30, 2026. Revenue recognized during the second quarter of 2026 under the research and development contract described above substantially exceeded cash collected under that contract during the period. Accordingly, the improvement in gross profit for the quarter was not accompanied by a corresponding increase in operating cash flow. In addition, accounts payable and accrued expenses decreased $0.7 million and deferred revenue decreased $0.4 million, each of which further reduced operating cash flow.
Removed paragraphs (7)
Previous report
Initial Public Offering
Previous report
Revenue decreased by $624,880, or 20%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
Previous report
Product revenues declined by $113,968, or 5%, compared to the prior year quarter, primarily reflecting lower revenues from ROC SDK and ROC Enroll, partially offset by growth in ROC Watch and ROC ABIS. R&D contract revenue decreased by $510,912, or 69%, primarily attributable to the completion of a significant prior-year R&D program, with new R&D contract activity in the current quarter occurring at a smaller scale.
Previous report
The pace of new contract awards and customer order placement during the quarter was also affected by lingering effects of the U.S. federal government funding lapse that occurred during the period from October 1, 2025 through November 12, 2025. Although the funding lapse ended prior to the start of the current quarter, it constrained federal procurement and contracting activity through late 2025, which delayed certain customer purchasing decisions, contract awards, and program authorizations that we believe would otherwise have advanced during the three months ended March 31, 2026. As discussed in the “Risk Factors” section of our 2025 Annual Report, the timing of our sales cycles is influenced by U.S. Government budgeting, appropriation, and procurement cycles, and disruptions to those cycles may delay customer purchasing decisions and the timing of revenue recognition.
Previous report
Despite these timing impacts, the Company experienced continued traction in ROC Watch sales, new pilot deployments, and increased customer engagements during the quarter. The Company also went live with multiple early-adopter pilot deployments of its ROC ABIS product offering, demonstrating directional traction in this emerging product area. These trends reflect continued underlying demand for the Company’s platform product offerings and support the progression of deployments into larger programs over time, consistent with the Company’s land-and-expand strategy.
Previous report
Total other expense increased by $12,654 for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily driven by higher interest expense, as well as additional other expense recognized during the current period.
Previous report
Net cash used in operating activities was $2,878,872 and $423,755 for the three months ended March 31, 2026 and 2025, respectively. The increase in cash used in operations was primarily driven by a higher net loss, partially offset by favorable changes in working capital and non-cash items. The higher net loss reflects continued investment in personnel and product development to support growth, including expansion of the Company’s research and development and business development functions, as well as incremental costs associated with operating as a public reporting company. These factors were partially offset by lower cost of sales compared to the prior-year period.
Reworded paragraphs (28)
Previous wording
The following discussion and analysis of our financial position as of March 31, 2026 and the results of our operations for the three months ended March 31, 2026 should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes included in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 31, 2026, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
Current wording
The following discussion and analysis of our financial position as of June 30, 2026 and the results of our operations for the three and six months ended June 30, 2026 should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes included in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 31, 2026, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
Previous wording
Founded in 2015, ROC is a consistently top-tier rated U.S.-built, U.S.-owned, and U.S.-operated provider of advanced biometric, facial recognition, and Vision AI solutions. We develop and deploy innovative technologies that enhance safety, security, and convenience globally, while upholding principles of fairness and privacy. Our solutions are trusted by U.S. and international military branches, law enforcement agencies, financial technology firms, and commercial enterprises, with our multimodal capabilities consistently demonstrating robust performance in rigorous government evaluations and in over 300 million annual identity verification transactions for major financial institutions. We believe our customer-centric approach and superior algorithms allow us to displace foreign incumbents and offer a transparent alternative to address the growing threat of “Poison AI” as discussed below.
Current wording
Founded in 2015, ROC is a U.S.-built, U.S.-owned, and U.S.-operated provider of advanced biometric and Vision AI solutions. We develop and deploy innovative technologies that enhance safety, security, and convenience globally; our solutions are trusted by U.S. and international military branches, law enforcement agencies, financial technology firms, and commercial enterprises. Our multimodal capabilities consistently demonstrate robust performance in rigorous government evaluations and in over 300 million annual identity verification transactions for major financial institutions. We believe our customer-centric approach and superior algorithms allow us to displace foreign incumbents and offer a transparent alternative to address the growing threat of “Poison AI” as discussed below.
Previous wording
Several factors and trends affect our business and results of operations. These include the increasing importance of identity solutions, the evolving nature of biometric technologies, and our strategic approach to market opportunities.
Current wording
Several factors and trends affect our business and results of operations. These include the increasing importance of identity solutions, the evolving nature of biometric and Vision AI technologies, and our strategic approach to market opportunities.
Previous wording
We believe ROC is also well-positioned to benefit from U.S. federal government policies focused on greater efficiency through technology, and our unique placement as a U.S.-based provider. Additionally, there is a general aversion to Chinese and Russian technology around the globe, which creates opportunities for ROC. We believe ROC is particularly well-positioned for winning automated biometric identification system (“ABIS”) contracts around the world, where there are clear indications of aversion to legacy Western players, primarily due to a history of vendor lock-in and poor service.
Current wording
We believe ROC is well-positioned to benefit from U.S. federal government policies focused on greater efficiency through technology and our placement as a U.S.-based provider. Additionally, there is a general aversion to competing Chinese and Russian technology in key markets around the globe, which creates opportunities for ROC. We believe ROC is particularly well-positioned for winning automated biometric identification system (“ABIS”) contracts around the world, where we observe indications of aversion to legacy Western ABIS providers, primarily due to a history of vendor lock-in and poor service.
Previous wording
“Poison AI” is a shorthand term that refers to the practice of data poisoning, a type of machine learning attack where malicious data is deliberately introduced into an AI model’s training dataset to manipulate its behavior or outputs, causing it to malfunction or become biased. An illustrative example of Poison AI is the Nightshade tool offered by the University of Chicago (https://nightshade.cs.uchicago.edu/whatis.html). Nightshade allows creators to prevent their digital artwork from being fed into generative AI models without consent by “turn[ing] any image into a data sample that is unsuitable for model training. More precisely, Nightshade transforms images into “poison” samples, so that models training on them without consent will see their models learn unpredictable behaviors that deviate from expected norms.” In the national security field, we believe Poison AI poses a serious and growing risk wherein adversarial state actors seek to intentionally create security vulnerabilities in AI models that are used in critical U.S. national security missions. As a solution provider to the U.S. national security community, we believe that our ability to closely manage our training data to prevent the introduction of “poison” samples would mitigate the risk of Poison AI and differentiate our offerings for our prospective government customers.
Current wording
“Poison AI” is a shorthand term that refers to the practice of data poisoning, a type of machine learning attack where malicious data is deliberately introduced into an AI model’s training dataset to manipulate its behavior or outputs, causing it to malfunction or become biased. An illustrative example of Poison AI is the Nightshade tool offered by the University of Chicago (https://nightshade.cs.uchicago.edu/whatis.html). Nightshade allows creators to prevent their digital artwork from being fed into generative AI models by “turning" images into “poison” data samples, so that models training on them will learn unpredictable behaviors that deviate from expected norms. In the national security field, we believe Poison AI poses a serious and growing risk wherein adversarial state actors seek to intentionally create security vulnerabilities in AI models that are used in critical U.S. national security missions. As a solution provider to the U.S. national security community, we believe that our ability to closely manage our training data to prevent the introduction of “poison” samples will mitigate the risk of Poison AI and differentiate our offerings for our prospective government customers.
Previous wording
Our revenue primarily consists of sales of software licenses for our products (ROC SDK, ROC Watch, ROC ABIS, and ROC Enroll), which generally include post-contract customer support, sales of bundled security solutions that combine our software with cameras, hardware devices, and installation services, and research and development services performed under contracts predominantly with the U.S. Government and government-adjacent customers and with select commercial customers.
Current wording
Our revenue primarily consists of sales of software licenses for our products (ROC SDK, ROC Watch, ROC ABIS, ROC Enroll, and ROC Evidence), which generally include post-contract customer support, sales of bundled security solutions that combine our software with cameras, hardware devices, and installation services, and research and development services performed under contracts predominantly with the U.S. Government and government-adjacent customers and with select commercial customers.
Previous wording
On February 19, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with The Benchmark Company, LLC, acting as the representative of the several underwriters (the “Representative”), for a firm commitment underwritten initial public offering (the “IPO”). Pursuant to the Underwriting Agreement, the Company agreed to sell to the Representative an aggregate of 4,000,000 shares of the Company’s common stock at an offering price of $6.00 per share.
Current wording
On February 19, 2026, we entered into an underwriting agreement (the “Underwriting Agreement”) with The Benchmark Company, LLC, acting as the representative of the several underwriters (the “Representative”), for a firm commitment underwritten initial public offering (the “IPO”). Pursuant to the Underwriting Agreement, we agreed to sell to the Representative an aggregate of 4,000,000 shares of the Company’s common stock at an offering price of $6.00 per share.
Previous wording
On February 23, 2026, the Company consummated the closing of our IPO, generating gross proceeds of approximately $24,000,000, before deducting underwriting discounts and offering expenses.
Current wording
On February 23, 2026, we consummated the closing of our IPO, generating gross proceeds of approximately $24,000,000, before deducting underwriting discounts and offering expenses.
Previous wording
On March 26, 2026, the Representative partially exercised the over-allotment option pursuant to the Underwriting Agreement. As a result of the partial exercise of the over-allotment option, the Company received additional gross proceeds of $350,862 for the offer and sale of 58,477 shares of common stock, before underwriting discounts, commissions, and offering expenses.
Current wording
On March 26, 2026, the Representative partially exercised the over-allotment option pursuant to the Underwriting Agreement. As a result of the partial exercise of the over-allotment option, we received additional gross proceeds of $350,862 for the offer and sale of 58,477 shares of common stock, before underwriting discounts, commissions, and offering expenses.
Previous wording
Comparison of the three months ended March 31, 2026 and 2025
Current wording
Comparison of the three and six months ended June 30, 2026 and 2025
Previous wording
We define Product Revenue as the aggregate revenue recognized from our four commercial software product lines: ROC SDK, ROC Watch, ROC ABIS, and ROC Enroll. Product Revenue is derived directly from amounts presented in our consolidated statements of operations and excludes revenue from research and development contracts, which consist of customer-funded development services performed under U.S. Government and similar arrangements.
Current wording
We define Product Revenue as the aggregate revenue recognized from our commercial software product lines: ROC SDK, ROC Watch, ROC ABIS, ROC Enroll, and ROC Evidence. Product Revenue is derived directly from amounts presented in our consolidated statements of operations and excludes revenue from research and development contracts, which consist of customer-funded development services performed under U.S. Government and similar arrangements.
Previous wording
The following table sets forth our financial results for the periods indicated. All information is derived from the statements of income for the three months ended March 31, 2026 and 2025.
Current wording
The following table sets forth our financial results for the periods indicated. All information is derived from the statements of income for the three and six months ended June 30, 2026 and 2025.
Previous wording
The following table sets forth selected operating data for the periods indicated. All information is derived from the statements of income for the three months ended March 31, 2026 and March 31, 2025, and we provide additional explanation below.
Current wording
The following table sets forth selected operating data for the periods indicated. All information is derived from the statements of income for the three and six months ended June 30, 2026 and June 30, 2025, and we provide additional explanation below.
Previous wording
Selling, general and administrative expenses increased by $956,504, or 48%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by higher personnel-related costs associated with continued investment in our business development and administrative functions to support the growth of our product offerings and markets served. The increase also reflects higher professional services expenses, including legal and accounting fees, and incremental costs associated with operating as a public company. These investments are aligned with our continued focus on operational execution and scaling the organization to support future growth.
Current wording
Selling, general and administrative expenses increased by $1,450,858, or 80%, for the three months ended June 30, 2026 compared to the same period in 2025. The increase was primarily driven by higher personnel-related costs associated with expanding our business development and administrative functions to support the growth of our product offerings and markets served. The increase also reflected additional costs associated with operating as a public company. These investments support our long-term growth strategy.
Previous wording
Research and development expenses increased by $533,521, or 34%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily driven by higher labor costs associated with growth in R&D headcount, reflecting continued investment in the development and enhancement of our platform and products. These investments are focused on expanding platform capabilities and functionality to address evolving customer requirements across our target markets.
Current wording
Research and development expenses increased by $720,442 or 53%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by higher personnel-related costs associated with expanding our research and engineering organization and continued investment in the development and enhancement of our products and platform. These investments are intended to expand product capabilities, support new customer opportunities, and address evolving customer requirements across our target markets.
Previous wording
Income tax provision (benefit) for the three months ended March 31, 2026 was $0, reflecting an effective tax rate of 0%, compared to an income tax benefit of approximately $290,813 and an effective tax rate of approximately 28.3% for the three months ended March 31, 2025. The decrease in income tax benefit of approximately $290,813 was primarily attributable to the establishment of a full valuation allowance against our U.S. federal and state deferred tax assets during 2025. As a result, no income tax benefit was recognized on our pre-tax loss for the three months ended March 31, 2026, as any benefit that would otherwise have been recognized was offset by a corresponding increase in the valuation allowance.
Current wording
No income tax benefit was recognized on our pre-tax losses for the three and six months ended June 30, 2026 because any benefit that would otherwise have been recognized was offset by a corresponding increase in the valuation allowance. Accordingly, our effective tax rate of 0% for each of the three and six months ended June 30, 2026 differed from the U.S. federal statutory rate of 21% primarily due to the effect of the full valuation allowance recorded against our deferred tax assets, as well as due to state income taxes and non-deductible expenses, the effect of each of which was also offset by the change in the valuation allowance.
Previous wording
Our effective tax rate for the three months ended March 31, 2026 differed from the U.S. federal statutory rate of 21% primarily due to the impact of the full valuation allowance recorded against our deferred tax assets. We expect to continue to maintain a full valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the realization of some or all of these deferred tax assets. For additional information, refer to Note 9 of our condensed consolidated financial statements included elsewhere in this Quarterly Report and Note 9 of our consolidated financial statements included in our 2025 Annual Report.
Current wording
We expect to continue to maintain a full valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the realization of some or all of these deferred tax assets. For additional information, refer to Note 9 of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and Note 9 of our consolidated financial statements included in our 2025 Annual Report.
Previous wording
Net loss attributable to common stockholders was $3,038,194 and $736,566 for the three months ended March 31, 2026 and 2025, respectively. The increase in net loss was primarily attributable to the items discussed above, including higher operating expenses associated with continued investment in personnel and product development, as well as incremental costs associated with operating as a public company.
Current wording
Net loss was $816,513 and $3,854,707 for the three and six months ended June 30, 2026, respectively, compared to net income of $581,204 for the three months ended June 30, 2025, and a net loss of $155,360 for the six months ended June 30, 2025. The increase in net loss was primarily attributable to the items discussed above, including higher operating expenses associated with continued investment in personnel and product development, as well as incremental costs associated with operating as a public company.
Previous wording
Basic and diluted net loss per share was $0.18 for the three months ended March 31, 2026, compared to $0.05 for the three months ended March 31, 2025. The change reflects both the increase in net loss and the increase in the weighted-average number of common shares outstanding to 16,624,897 from 14,985,411 primarily as a result of the issuance of 4,058,477 shares in our initial public offering in February 2026, including the partial exercise of the underwriters’ over-allotment option. Because we reported a net loss in both periods, all potentially dilutive securities, including outstanding stock options, warrants, and unvested restricted stock units, were excluded from the calculation of diluted net loss per share as their inclusion would have been anti-dilutive. For additional information, refer to Note 2 of our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Current wording
Basic and diluted net loss per share was $0.04 and $0.22 for the three and six months ended June 30, 2026, respectively, compared to basic and diluted earnings per share of $0.04 for the three months ended June 30, 2025, and a basic and diluted net loss per share of $0.01 for the six months ended June 30, 2025. The change reflects the increase in net loss, partially offset by the increase in the weighted-average number of common shares outstanding to 19,080,127 and 17,859,295 for the three and six months ended June 30, 2026, respectively, from 14,999,087 and 14,992,287 for the comparable prior-year periods, primarily as a result of the issuance of 4,058,477 shares in our initial public offering in February 2026, including the partial exercise of the underwriters' over-allotment option. Because we reported a net loss for both 2026 periods, all potentially dilutive securities, including outstanding stock options, warrants, and unvested restricted stock units, were excluded from the calculation of diluted net loss per share because their inclusion would have been anti-dilutive. For additional information, refer to Note 2 of our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Previous wording
As of March 31, 2026, we had cash of approximately $16.6 million and working capital of $16.5 million. In February 2026, we completed our initial public offering, resulting in net proceeds to the Company of approximately $21.5 million, including net proceeds from the partial exercise of the underwriters’ over-allotment option, after deducting underwriting discounts, commissions, and offering expenses.
Current wording
As of June 30, 2026, we had cash of approximately $11.9 million and working capital of $14.8 million, compared to cash of $0.3 million and a working capital deficit of $1.5 million as of December 31, 2025. In February 2026, we completed our initial public offering, resulting in net proceeds to the Company of approximately $21.5 million, including net proceeds from the partial exercise of the underwriters’ over-allotment option, after deducting underwriting discounts, commissions, and offering expenses. We had no borrowings outstanding under our revolving line of credit as of June 30, 2026.
Previous wording
Our revenue is concentrated among a limited number of U.S. Government and government-adjacent customers, and the timing of customer billings, collections, and contract awards is influenced by federal budgeting and appropriation cycles. As a result, our quarterly cash flow from operations may vary significantly based on the timing of contract awards and customer payments. We monitor working capital, days sales outstanding, and our concentrated receivable balances on a regular basis.
Current wording
Our revenue is concentrated among a limited number of U.S. Government and government-adjacent customers, and the timing of customer billings, collections, and contract awards is influenced by federal budgeting and appropriation cycles. One customer represented 47% of our accounts receivable as of June 30, 2026. As a result, our quarterly cash flow from operations may vary significantly from period to period, and a delay in collection from a significant customer could have a disproportionate effect on our liquidity in any given quarter. We monitor working capital, days sales outstanding, and our concentrated receivable balances on a regular basis.
Previous wording
Based on management’s evaluation as of March 31, 2026, including consideration of our cash, available borrowing capacity under our revolving line of credit, expected cash flows from operations, and our forecasted operating plan, management concluded that no conditions or events exist that raise substantial doubt about our ability to continue as a going concern for at least twelve months from the date these condensed consolidated financial statements are issued.
Current wording
Based on management’s evaluation as of June 30, 2026, including consideration of our cash, expected cash flows from operations and our forecasted operating plan, management concluded that no conditions or events exist that raise substantial doubt about our ability to continue as a going concern for at least twelve months from the date these condensed consolidated financial statements are issued. In reaching this conclusion, management did not rely on availability under our revolving line of credit.
Previous wording
Operating lease obligations: We lease office space under non-cancelable operating leases for our offices in Denver, Colorado, Morgantown, West Virginia, and Grand Rapids, Michigan. As of March 31, 2026, the total undiscounted future minimum lease payments under these leases were approximately $1.3 million, of which approximately $0.3 million is payable within the next twelve months. For additional information regarding our lease obligations, including the remaining lease term and discount rate used to measure the related lease liability, refer to Note 6 of our condensed consolidated financial statements included elsewhere in this Quarterly Report and Note 6 of our consolidated financial statements included in our 2025 Annual Report.
Current wording
Operating lease obligations: We lease office space under non-cancelable operating leases for our offices in Denver, Colorado, Morgantown, West Virginia, and Grand Rapids, Michigan. As of June 30, 2026, the total undiscounted future minimum lease payments under these leases were approximately $1.2 million, of which approximately $0.3 million is payable within the next twelve months. For additional information regarding our lease obligations, including the remaining lease term and discount rate used to measure the related lease liability, refer to Note 6 of our condensed consolidated financial statements included elsewhere in this Quarterly Report and Note 6 of our consolidated financial statements included in our 2025 Annual Report.
Previous wording
Line of credit: We maintain a revolving line of credit, and during the three months ended March 31, 2026, we repaid $3,709,907 of outstanding borrowings under the line of credit. As of March 31, 2026, $237,812 of borrowings were outstanding, and approximately $2.3 million of borrowing capacity remained available under the facility, subject to the terms and conditions of the credit agreement, including covenant requirements. We currently expect to maintain the facility as a source of supplemental liquidity. For additional information, refer to Note 7 of our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Current wording
Line of credit: We maintain a revolving line of credit, and during the three months ended June 30, 2026, we repaid $237,812 of outstanding borrowings under the line of credit. As of June 30, 2026, there were no borrowings outstanding, and approximately $2.5 million of borrowing capacity remained available under the facility, subject to the terms and conditions of the credit agreement, including covenant requirements. We currently expect to maintain the facility as a source of supplemental liquidity. For additional information, refer to Note 7 of our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Previous wording
Purchase obligations: In the ordinary course of business, we enter into agreements with vendors and service providers, including for cloud infrastructure, software, and professional services. As of March 31, 2026, we had approximately $1.3 million of non-cancelable purchase commitments for equipment to expand our computing infrastructure. Other than as described above, we do not have any material non-cancelable purchase obligations as of March 31, 2026.
Current wording
Purchase obligations: In the ordinary course of business, we enter into agreements with vendors and service providers, including for cloud infrastructure, software, and professional services. As of June 30, 2026, we had approximately $0.7 million of non-cancelable purchase commitments for equipment to expand our computing infrastructure. Other than as described above, we do not have any material non-cancelable purchase obligations as of June 30, 2026.
Previous wording
Net cash used in investing activities was $622,199 and $206,250 for the three months ended March 31, 2026 and 2025, respectively. The increase in cash used in investing activities was primarily driven by higher spending on capitalized software development and purchases of fixed assets during the three months ended March 31, 2026 compared to the prior-year period. Capitalized software costs reflect ongoing investment in the development and enhancement of certain of the Company’s product offerings.
Current wording
Net cash used in investing activities was $1,953,786 and $354,171 for the six months ended June 30, 2026 and 2025, respectively. The increase in cash used in investing activities was primarily driven by higher spending on capitalized software development and purchases of fixed assets during the six months ended June 30, 2026 compared to the prior-year period. Capitalized software costs reflect ongoing investment in the development and enhancement of certain of the Company’s product offerings.
Previous wording
Net cash provided by financing activities was $19,847,363 and $108,481 for the three months ended March 31, 2026 and 2025, respectively. The increase in cash provided by financing activities was primarily attributable to net proceeds of approximately $21.5 million from the Company’s initial public offering, including proceeds from the partial exercise of the underwriters’ over-allotment option, partially offset by repayments on the Company’s line of credit during the period.
Current wording
Net cash provided by financing activities was $19,642,381 for the six months ended June 30, 2026, compared to net cash used in financing activities of $184,753 for the six months ended June 30, 2025. The increase was primarily attributable to net proceeds of approximately $21.5 million from the Company's initial public offering, including proceeds from the partial exercise of the underwriters' over-allotment option, partially offset by net repayments under the Company's line of credit during the period.
Previous wording
There has been no material change in our significant accounting policies and estimates disclosed in Note 1 of the Notes to Consolidated Financial Statements and in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
There has been no material change in our significant accounting policies and estimates disclosed in Note 1 of the Notes to Consolidated Financial Statements and in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (the “SEC").