Q/C TECHNOLOGIES, INC.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Report of Independent Registered Public Accounting Firm
To the Board of Directors and
Stockholders of Q/C Technologies, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Q/C Technologies, Inc. and Subsidiaries (the Company) as of December 31, 2025, and the related consolidated statements of operations, changes in mezzanine equity and stockholders’ equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited the adjustments to the 2024 consolidated financial statements to retrospectively present the 1-for-100 reverse stock split of the shares of the Company’s Common Stock in 2025, as disclosed in Note 6. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2024 consolidated financial statements of the Company other than with respect to these adjustments, and accordingly, we do not express an opinion or any other form of assurance on the 2024 consolidated financial statements taken as a whole.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Goodwill Impairment Assessment
As of December 31, 2025, the Company’s goodwill balance was approximately $10.5 million. As discussed in Note 2 to the consolidated financial statements, the Company tests goodwill for impairment annually, or more frequently if certain events or changes in circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. The Company performed its annual impairment test as of December 31, 2025, using both qualitative and quantitative approaches. The Company’s assessment included consideration of a third-party valuation. The results of this analysis were evaluated to determine if goodwill impairment was necessary.
The principal consideration for our determination that the goodwill impairment assessment was a critical audit matter was the significant auditor judgment required to evaluate management’s fair value estimates. The valuation involved significant assumptions, particularly given the pre-revenue status of the Company as well as its new business venture entered into in the current year, and the fair value measurements were sensitive to changes in those assumptions.
Our audit procedures related to the Company’s goodwill impairment assessment included the following, among others:
| a) | We gained an understanding of management’s impairment testing. |
| b) | We evaluated management’s qualitative assessment of whether events or changes in circumstances indicated potential impairment of goodwill. |
| c) | We reviewed the third-party valuation report and other key documents used by management to assess the fair value of the reporting unit. We involved an internal valuation specialist who assisted in the evaluation and testing performed of the reasonableness of significant methods and assumptions to the models. |
| d) | We tested the key data and inputs used in the valuation report |
| e) | We assessed the sufficiency of the Company’s disclosure of its goodwill impairment analysis included in Note 2. |
Accounting for Mezzanine Equity Instruments and Associated Fair Value Estimates
As disclosed in Note 6, the Company has various classes of Convertible Preferred Stock that are all classified as mezzanine equity. Certain transactions throughout the year required the Company to estimate the fair value of these instruments in order to properly account for them. The Company hired a specialist to value these instruments at certain dates and again at year-end using either a Black-Scholes model or a Monte Carlo simulation.
The principal consideration for our determination that the accounting for mezzanine equity and associated fair value estimates was a critical audit matter was the significant auditor judgment required to evaluate management’s fair value estimates. The valuation involved significant assumptions, and the fair value measurements were sensitive to changes in those assumptions.
Our audit procedures related to the Company’s mezzanine equity instrument fair value estimates included the following, among others:
| a) | We read and reviewed the relevant agreements to evaluate the Company’s classification of the instruments as mezzanine equity recorded at fair value. |
| b) | We vouched the issuance and conversions of the mezzanine equity instruments to source documentation to validate existence of the transactions. |
| c) | We evaluated the methodologies used to determine the fair value of the mezzanine equity instruments. |
| d) | We obtained the valuation reports prepared by the third-party specialist engaged by management. |
| e) | We assessed the qualifications and competence of management and the qualifications, competence and objectivity of the third-party specialist. |
| f) | We tested the key data noted above used within the Black-Scholes models and Monte Carlo simulations to estimate the fair value of the mezzanine equity instruments. |
| g) | We involved an internal valuation specialist who assisted in the evaluation and testing performed of the reasonableness of significant methods and assumptions to the models. |
| h) | We assessed the sufficiency of Company’s disclosure of its accounting for these transactions included in Note 6. |
Derivative Liability Fair Value Estimate
As disclosed in Note 6, the Company issued 7,000 shares of its Series H Convertible Preferred Stock as well as warrants to acquire up to an aggregate of 1,400,000 shares of Common Stock. The shares of Series H Convertible Preferred Stock were determined to be more akin to a debt-like host than an equity-like host. The Company identified the following embedded features that are not clearly and closely related to the debt host instrument: (1) certain contingent redemption options, (2) optional conversion features inclusive of make-whole interest, and (3) an increase in the dividend rate related to the occurrence of a triggering event. These features were bundled together, assigned probabilities of being affected, and measured at fair value with subsequent changes in fair value of these features recognized in the Consolidated Statement of Operations. The Company estimated the fair value of the bifurcated embedded derivative at issuance and again at the reporting date using a discounted cash flow scenario model. The key assumptions in the model included the fair value of the Company’s common stock, estimated equity volatility, the time to maturity, the redemption premium, a market interest rate, a risk-free rate, and dividend rate. The fair value of the bifurcated derivative liability was estimated utilizing the with-and-without method, which uses the probability-weighted difference between the scenarios with the derivative and the plain vanilla maturity scenario without a derivative.
The principal consideration for our determination that the derivative liability fair value estimate was a critical audit matter was the significant auditor judgment required to evaluate management’s fair value estimates. The valuation involved significant assumptions, and the fair value measurements were sensitive to changes in those assumptions.
Our audit procedures related to the Company’s derivative liability fair value estimate included the following, among others:
| a) | We read and reviewed the relevant agreements to evaluate the Company’s classification of the securities as a derivative liability recorded at fair value at issuance and at each reporting period. |
| b) | We vouched the stock and warrant issuance to source documentation to validate existence of the transaction. |
| c) | We evaluated the methodologies used to determine the fair value of the derivative liability. |
| d) | We obtained the valuation report prepared by the third-party specialist engaged by management. |
| e) | We assessed the qualifications and competence of management and the qualifications, competence and objectivity of the third-party specialist. |
| f) | We tested the key data noted above used within the discounted cash flow model to estimate the fair value of the derivative liability. |
| g) | We involved an internal valuation specialist who assisted in the evaluation and testing performed of the reasonableness of significant methods and assumptions to the model. |
| h) | We assessed the sufficiency of Company’s disclosure of its accounting for these transactions included in Note 6. |
Acquisition of LPU Holdings LLC
The Company completed the acquisition of LPU Holdings LLC (“LPU”) and the acquisition was accounted for as an asset purchase under ASC 805. We identified the valuation of the intangible asset acquired, the valuation of the Series I Convertible Preferred Stock issued, and contingent consideration payable as a critical audit matter.
The principal consideration for our determination that the valuation of the intangible asset acquired, the valuation of the Series I Convertible Preferred Stock issued, and contingent consideration payable was a critical audit matter was the significant auditor judgment required to evaluate management’s fair value estimates. The valuations involved complex models and significant assumptions, and the fair value measurements were sensitive to changes in those assumptions.
Our audit procedures related to the Company’s acquisition of LPU included the following, among others:
| a) | We evaluated whether the acquisition met the definition of an asset purchase under ASC 805, including the identified accounting acquirer, acquiree, and acquisition date. |
| b) | We read and reviewed the relevant agreements including the valuation report. |
| c) | We vouched the cash and stock tendered to source documentation to validate purchase price. |
| d) | We evaluated the methodologies used to determine the fair value of the consideration provided in the form of cash, Series I Convertible Preferred Stock, and contingent consideration payable to determine the consideration provided for the acquisition. |
| e) | We assessed the qualifications and competence of management and the qualifications, competence and objectivity of the third-party specialist. |
| f) | We tested the data used within the discounted cash flow models to estimate the fair values of the intangible asset and contingent consideration payable. |
| g) | We involved an internal valuation specialist who assisted in the evaluation and testing performed of the reasonableness of significant methods and assumptions to the models. |
| h) | We assessed the sufficiency of Company’s disclosure of its accounting for this acquisition included in Note 11. |
Grassi & Co., CPAs, P.C.
We have served as the Company’s auditor since 2026.
Glastonbury, Connecticut
April 15, 2026
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Q/C Technologies, Inc. (formerly TNF Pharmaceuticals. Inc.) and Subsidiaries
Opinion on the Consolidated Financial Statements
We have audited, before the effects of the adjustments to retrospectively present the 1-for-100 reverse stock split of the shares of the Company’s common stock in 2025 as described in Note 1, the accompanying consolidated balance sheet of Q/C Technologies, Inc. (formerly TNF Pharmaceuticals. Inc.) and Subsidiaries (the “Company”) as of December 31, 2024 and the related consolidated statements of operations, changes in mezzanine equity and stockholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the consolidated financial statements). The 2024 consolidated financial statements, before the effects of the adjustments described in Note 1, are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively present the 1-for-100 reverse stock split of the shares of the Company’s common stock in 2025 as described in Note 1, present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively present the 1-for-100 reverse stock split of the shares of the Company’s common stock in 2025 as described in Note 1 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by Grassi & Co.,CPAs, P.C.
Substantial Doubt About the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has experienced a net loss and negative cash flows from operations for the year ended December 31, 2024, which raises substantial doubt about their ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of preferred stock and bifurcated embedded derivative
As discussed in Note 6 to the consolidated financial statements, on February 21, 2023, the Company sold 15,000 shares of Series F Convertible Preferred Stock (“Series F Preferred Stock”), with various embedded features. The Preferred Stock was determined to be more akin to a debt-like host than an equity-like host. The Company concluded that the embedded features were not clearly and closely related to the debt host instrument and thus were deemed to be bifurcated embedded derivatives (“Embedded Derivative”). The Embedded Derivative liabilities are measured at fair value at inception and then are required to be re-measured and reported at fair value at each reporting period. Management’s estimate of the Embedded Derivative liabilities as of December 31, 2024 was $0. On April 8, 2025, the Company entered into an Omnibus Amendment Agreement with the Series F Preferred Stock holders, which amended certain terms of the Certificate of Designations surrounding the Stated Value, the timing and amount of installment redemptions and the final maturity date of the Series F Preferred Stock. This amendment resulted in an extinguishment of the original instrument and reissuance of Series F Preferred Stock on December 31, 2024. The estimated fair value of the Series F Preferred Stock at December 31, 2024 reissuance was $4,930,000.
As discussed in Note 6 to the consolidated financial statements, on May 20, 2024, the Company sold 5,050 shares of Series F-1 Convertible Preferred Stock (“Series F-1 Preferred Stock”), with various embedded features. The Preferred Stock was determined to be more akin to a debt-like host than an equity-like host. The Company concluded that the embedded features were not clearly and closely related to the debt host instrument and thus were deemed to be bifurcated embedded derivatives (“Embedded Derivative”). The Embedded Derivative liabilities are measured at fair value at inception and then are required to be re-measured and reported at fair value at each reporting period. Management’s estimate of the Embedded Derivative liabilities at inception and as of December 31, 2024 was $854,000 and $1,303,000. The estimated fair value of the Series F-1 Preferred Stock at issuance was $9,323,000.
As discussed in Note 6 to the consolidated financial statements, on May 20, 2024, the Company sold 8,950 shares of Series G Convertible Preferred Stock (“Series G Preferred Stock”). The estimated fair value of the Series G Preferred Stock at issuance was $22,260,000.
Management applies considerable judgment in selecting assumptions used to estimate the fair value of Preferred Stock and Embedded Derivative liabilities and changes in market conditions or variations in certain assumptions could result in significant fluctuations in the estimate. Management estimates the fair value of the Preferred Stock and Embedded Derivative liabilities using a Monte Carlo simulation model, with the following inputs: the fair value of the Company’s common stock on the issuance date and re-measurement date, estimated equity volatility, estimated traded volume volatility, the time to maturity, a discounted market interest rate, a dividend rate, a penalty dividend rate, and probability of default. The fair value of the bifurcated derivative liabilities was estimated utilizing the with and without method which uses the probability weighted difference between the scenarios with the derivative and the plain vanilla maturity scenario without a derivative.
Given the inherent uncertainty in selecting assumptions and the complexity of the calculations, we have determined that management’s valuation of the Preferred Stock and Embedded Derivative liabilities is a critical audit matter which required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the judgments made and the reasonableness of the models and assumptions used in the valuation. The audit effort included the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained from these procedures.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following:
| ● | With the involvement of our fair value specialists, we developed an independent fair value estimate for a sample and compared our estimate to the Company’s estimate and evaluated any differences. We developed our estimate by evaluating the observable and unobservable inputs used by management or developing independent inputs. |
| ● | With the involvement of our fair value specialists, we evaluated the methods, models, and judgments applied by management in the determination of principal assumptions and the calculations of fair value of Preferred Stock and Embedded Derivative liabilities. |
| ● | For the re-measurement at December 31, 2024, we evaluated management’s ability to accurately estimate fair value by comparing management’s fair value re-measurements at quarterly reporting dates during 2024 to their fair value re-measurement at December 31, 2024. |
Goodwill - Assessment of Impairment
As of December 31, 2024, the Company’s goodwill balance was approximately $10.5 million. As discussed in Note 2 to the consolidated financial statements, the Company tests goodwill for impairment annually, or more frequently if certain events or changes in circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. The Company operates as a single reporting unit and performed its annual impairment test as of December 31, 2024, using both qualitative and quantitative approaches. The Company’s assessment included consideration of a third-party valuation and a recent equity financing transaction. The results of these analyses, along with various mitigating factors, were evaluated to determine if goodwill impairment was necessary.
The principal considerations for our determination that performing procedures relating to the impairment assessment for goodwill is a critical audit matter is the significant judgment by management in making the qualitative and quantitative assessment of whether goodwill was impaired. This in turn led to significant auditor judgment in assessing whether the fair value of the reporting unit exceeded its carrying amount, particularly given the pre-revenue status of the Company, its reliance on ongoing research and development activities, and its low market capitalization relative to book value.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following:
| ● | Gaining an understanding of management’s impairment testing process and verifying that the Company operates as a single reporting unit. |
| ● | Evaluation of management’s qualitative assessment of whether events or changes in circumstances indicate potential of goodwill. |
| ● | Reviewing the third-party valuation report and other key documents used by management to assess the fair value of the reporting unit. |
| ● | Evaluating the recent equity financing transaction, including the investor composition and terms, and assessing its relevance in determining the fair value of the reporting unit. |
Going Concern Assessment
As discussed in Note 3 to the consolidated financial statements, historically, the Company has incurred net losses. Since its inception, the Company has met its liquidity requirements principally through the sale of its preferred and common stock in public and private placements. The Company believes that its current financial resources as of the date of issuance of the consolidated financial statements are not sufficient to fund its current operating budget and contractual obligations as of December 31, 2024 as they fall due in the next twelve-month period, and as such have concluded that there are material uncertainties related to events or conditions that may cast significant doubt upon the Company’s ability to continue as a going concern. In making such a determination, management prepared a short-term cash flow projection. Management used significant assumptions in preparing the short-term cash flow projection, which included operating costs and financing obligations.
The principal considerations for our determination that performing procedures relating to the going concern assessment is a critical audit matter are the significant judgments in management’s plans to fund its operating budget and contractual obligations. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate management’s conclusion that it is probable the Company’s plans will be effectively implemented within twelve months after the date the consolidated financial statements are issued and will provide the necessary cash flows to fund the Company’s operating budget and contractual obligations.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following:
| ● | Evaluation of the reasonableness of key assumptions and estimates used by the management in the short-term cash flow projection in the light of its existing operating requirements and plans. |
| ● | Evaluation of the reasonableness of management’s plans on the cash flow requirements of the operations. |
| ● | Testing the completeness, accuracy, and relevance of underlying data in the short-term cash flow projection. |
| ● | Evaluation of the adequacy of the Company’s disclosure of these circumstances in the consolidated financial statements. |
Investment in Oravax, Inc. - Assessment of Impairment
As discussed in Note 2 to the consolidated financial statements, the Company has elected to measure its investment in Oravax Medical, Inc. as an equity security without a readily determinable fair value. Under this election, an equity security without a readily available fair value is reflected at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. At each reporting period, the Company is required to make a qualitative assessment considering impairment indicators to evaluate whether the investment is impaired. If deemed impaired, the Company is required to estimate the fair value of the investment and recognize an impairment loss equal to the difference between the fair value of the investment and its carry amount. As of December 31, 2024, the Company performed a qualitative assessment to evaluate whether the investment is impaired and determined that the investment was not impaired and thus no adjustment to fair market value was required as of December 31, 2024. In making such a determination, management prepared a detailed qualitative analysis considering various impairment indicators. Management used significant judgment in their qualitative assessment.
The principal considerations for our determination that performing procedures relating to the impairment assessment of investments in equity securities without readily determinable fair value is a critical audit matter is the significant judgment by management in making the qualitative assessment of whether investments in equity securities were impaired. This in turn led to significant auditor judgment and effort in performing procedures to evaluate the reasonableness of significant judgments management applied in determining whether events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following:
| ● | Analyzing management’s detailed qualitative analysis considering various impairment indicators that may indicate that the carrying amount of the investment might not be recoverable for reasonableness. |
| ● | Reviewing management’s assessment of events or changes in circumstances for reasonableness. |
| ● | Evaluating management’s significant accounting policies related to the election to measure its investment in Oravax Medical, Inc. as an equity security without a readily determinable fair value. |
/s/Stephano Slack LLC
We have served as the Company’s auditor from 2024 to 2025.
Wayne, Pennsylvania
April 11, 2025
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.