Zapata Quantum, Inc.

Previous wording

In late 2024 the Company voluntarily elected to temporarily suspend its operations due to its limited capital resources and inability to access adequate liquidity to continue to fund its operations and meet its outstanding debt obligations. In June 2025, the Company commenced debt restructuring and capital raising transactions and the reinstatement of operations by (1) entering into exchange agreements with unsecured creditors pursuant to which such creditors agreed to exchange outstanding obligations payable to them for Common Stock and certain rights related thereto, and (2) the Company sold convertible notes and warrants for gross proceeds of $3 million. The Company has since been continuing efforts to negotiate and restructure outstanding obligations and raise capital. In the furtherance of scaling operations, the Company has also entered into advisory agreements with third parties and agreed to compensate such parties in the form of equity and/or cash compensation.

Current wording

In late 2024 the Company voluntarily elected to temporarily suspend its operations due to its limited capital resources and inability to access adequate liquidity to continue to fund its operations and meet its outstanding debt obligations. In June 2025, the Company commenced debt restructuring and capital raising transactions and the reinstatement of operations by (1) entering into exchange agreements with unsecured creditors pursuant to which such creditors agreed to exchange outstanding obligations payable to them for Common Stock and certain rights related thereto, and (2) the Company sold convertible notes and warrants for gross proceeds of $3,000. The Company has since been continuing efforts to negotiate and restructure outstanding obligations and raise capital. In the furtherance of scaling operations, the Company has also entered into advisory agreements with third parties and agreed to compensate such parties in the form of equity and/or cash compensation.

Previous wording

In April 2026, we sold and issued to accredited investors a total of 15,000 shares of Series D (which are convertible into 34,160,784 shares of Common Stock, subject to adjustment) and Warrants to purchase up to 17,080,392 shares of Common Stock (representing 50% warrant coverage on an as-converted basis) for total gross proceeds of $15 million. We received net proceeds of $13.8 million after deducting commissions and fees. We intend to use the net proceeds for working capital and general corporate purposes.

Current wording

In April 2026, we sold and issued to accredited investors a total of 15,000 shares of Series D (which are convertible into 34,160,784 shares of Common Stock, subject to adjustment) and Warrants to purchase up to 17,080,392 shares of Common Stock (representing 50% warrant coverage on an as-converted basis) for total gross proceeds of $15,000. We received net proceeds of $13,838 after deducting commissions and fees. We intend to use the net proceeds for working capital and general corporate purposes.

Previous wording

Our revenue historically was generated primarily from sales of subscriptions to our software platform and related services. Subscriptions to our software platform are offered as stand-ready access to our cloud environment on an annual or multi-year basis. We may also offer consulting services in the form of stand-ready scientific and software engineering services, which are typically only offered in conjunction with our software platform. We evaluate our contracts at inception to determine if the terms represent a single, combined performance obligation or multiple performance obligations. We generated no revenue in each of the three and six months ended June 30, 2026 and June 30, 2025.

Current wording

Our revenue historically was generated primarily from sales of subscriptions to our software platform and related services. Subscriptions to our software platform are offered as stand-ready access to our cloud environment on an annual or multi-year basis. We may also offer consulting services in the form of stand-ready scientific and software engineering services, which are typically only offered in conjunction with our software platform. We evaluate our contracts at inception to determine if the terms represent a single, combined performance obligation or multiple performance obligations. We generated no revenue in each of the three and nine months ended September 30, 2026 and September 30, 2025.

Previous wording

Sales and marketing expense was $285 thousand for the three months ended June 30, 2026, as compared to $0 for the three months ended June 30, 2025. The increase reflects higher employee compensation costs, marketing expenses, and stock-based compensation expense.

Current wording

Sales and marketing expense was $713 for the three months ended September 30, 2026, as compared to $6 for the three months ended September 30, 2025. The increase reflects higher employee compensation costs, marketing expenses, and stock-based compensation expense.

Previous wording

Research and development expense was $383 thousand for the three months ended June 30, 2026, as compared to $0 for the three months ended June 30, 2025. The increase reflects higher employee compensation costs, advisor fees, and stock-based compensation expense.

Current wording

Research and development expense was $1,041 for the three months ended September 30, 2026, as compared to $0 for the three months ended September 30, 2025. The increase reflects higher employee compensation costs, advisor fees, and stock-based compensation expense.

Previous wording

General and administrative expenses were $959 thousand for the three months ended June 30, 2026, compared to $584 thousand for the three months ended June 30, 2025. The increase of $375 thousand reflects an increase in stock-based compensation expenses and employee compensation. Current-quarter expenses mainly consisted of insurance, software costs, salaries and benefits, and legal and professional fees, including $142 thousand of legal expenses related to our intellectual property.

Current wording

General and administrative expenses were $1,023 for the three months ended September 30, 2026, compared to $1,023 for the three months ended September 30, 2025. Current-quarter expenses mainly consisted of insurance, software costs, salaries and benefits, and legal and professional fees, including $142 of legal expenses related to our intellectual property.

Previous wording

Other expense, net was $321 thousand for the six months ended June 30, 2026, compared to other income, net of $3.2 million for the six months ended June 30, 2025. The $3.5 million negative variance was primarily driven by the prior year recording of a $2.4 million gain on extinguishment of Forward Purchase Agreement settlement liability and a $1.2 million gain on extinguishment of liabilities. These favorable items were partially offset by a $134 thousand loss on extinguishment of Senior Secured Note, and a $118 thousand increase in interest expense.

Current wording

Other expense, net was $118 for the three months ended September 30, 2026, compared to other income, net of $4,294 for the three months ended September 30, 2025. The $4,412 negative variance was primarily driven by the prior year recording of a $4,294 gain on extinguishment of liabilities.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2026 and 2025:

Previous wording

Sales and marketing expense was $458 thousand for the six months ended June 30, 2026, as compared to $0 for the six months ended June 30, 2025. The increase reflects an increase in employee compensation costs, marketing expenses, and stock-based compensation expense.

Current wording

Sales and marketing expense was $1,171 for the nine months ended September 30, 2026, as compared to $6 for the nine months ended September 30, 2025. The increase reflects an increase in employee compensation costs, marketing expenses, and stock-based compensation expense.

Previous wording

Research and development expense was $618 thousand for the six months ended June 30, 2026, as compared to $0 for the six months ended June 30, 2025. The increase reflects an increase in employee compensation costs, advisor fees, and stock-based compensation expense.

Current wording

Research and development expense was $1,659 for the nine months ended September 30, 2026, as compared to $0 for the nine months ended September 30, 2025. The increase reflects an increase in employee compensation costs, advisor fees, and stock-based compensation expense.

Previous wording

General and administrative expenses were $1.8 million for the six months ended June 30, 2026, compared to $1.3 million for the six months ended June 30, 2025. The increase of $484 thousand reflects an increase in stock-based compensation expenses and employee compensation. Current-quarter expenses mainly consisted of insurance, software costs, salaries and benefits, and legal and professional fees, including $268 thousand of legal expenses related to our intellectual property.

Current wording

General and administrative expenses were $2,771 for the nine months ended September 30, 2026, compared to $2,287 for the nine months ended September 30, 2025. The increase of $484 reflects an increase in stock-based compensation expenses and employee compensation. Current-quarter expenses mainly consisted of insurance, software costs, salaries and benefits, and legal and professional fees, including $261 of legal expenses related to our intellectual property.

Previous wording

Other expense, net was $208 thousand for the three months ended June 30, 2026, compared to other income, net of $3.3 million for the three months ended June 30, 2025. The $3.5 million negative variance was primarily driven by the prior year recording of a $2.4 million gain on extinguishment of Forward Purchase Agreement settlement liability and a $1.2 million gain on extinguishment of liabilities. These favorable items were partially offset by a $134 thousand loss on extinguishment of Senior Secured Note, and a $88 thousand increase in interest expense.

Current wording

Other expense, net was $439 for the nine months ended September 30, 2026, compared to other income, net of $7,488 for the nine months ended September 30, 2025. The $7,927 negative variance was primarily driven by the prior year recording of a $2,357 gain on extinguishment of Forward Purchase Agreement settlement liability and a $5,614 gain on extinguishment of liabilities. These favorable items were partially offset by a $134 loss on extinguishment of Senior Secured Note, and a $117 increase in interest expense, net of interest income.

Previous wording

Since our inception, we have financed our operations primarily with proceeds from sales of Convertible Preferred Stock and Common Stock and the issuance of Convertible Notes. For the six months ended June 30, 2026, we recorded a net loss of $3,145, used cash in operations of $2,688 and had a stockholders’ equity of $3,062 as of that date. As of June 30, 2026, we had a cash balance of $12,771. Cash used in operations was primarily from the Company’s operating losses, working capital, and investment in strategic growth initiatives. We have incurred significant losses and negative cash flows from operations since inception and expect to continue to incur losses and negative cash flows for the foreseeable future as we expand our penetration of the quantum computing application development market.

Current wording

Since our inception, we have financed our operations primarily with proceeds from sales of Convertible Preferred Stock and Common Stock and the issuance of Convertible Notes. For the nine months ended September 30, 2026, we recorded a net loss of $6,040, used cash in operations of $4,484 and had a stockholders’ equity of $1,527 as of that date. As of September 30, 2026, we had a cash balance of $11,244. Cash used in operations was primarily from the Company’s operating losses, working capital, and investment in strategic growth initiatives. We have incurred significant losses and negative cash flows from operations since inception and expect to continue to incur losses and negative cash flows for the foreseeable future as we expand our penetration of the quantum computing application development market.

Previous wording

In April 2026, we sold and issued to accredited investors a total of 15,000 shares of Series D (which are convertible into 34,160,784 shares of Common Stock, subject to adjustment) and Warrants to purchase up to 17,080,392 shares of Common Stock (representing 50% warrant coverage on an as-converted basis) for total gross proceeds of $15 million. We received net proceeds of $13.8 million after deducting commissions and fees.

Current wording

In April 2026, we sold and issued to accredited investors a total of 15,000 shares of Series D (which are convertible into 34,160,784 shares of Common Stock, subject to adjustment) and Warrants to purchase up to 17,080,392 shares of Common Stock (representing 50% warrant coverage on an as-converted basis) for total gross proceeds of $15,000. We received net proceeds of $13,838 after deducting commissions and fees.

Previous wording

As of August 4, 2026, we have cash and cash equivalents of $12.1 million. We expect our existing cash will be sufficient to fund our current operating plan for at least twelve months from the date of issuance of these financial statements.

Current wording

As of October 30, 2026, we have cash and cash equivalents of $10,459. We expect our existing cash will be sufficient to fund our current operating plan for at least twelve months from the date of issuance of these financial statements.

Previous wording

The Senior Secured Notes bear interest at the compound rate of 15% per annum and are convertible at the option of each noteholder in connection with the Merger at a conversion price of (i) $4.50 per share at the closing of the Merger or (ii) $8.50 per share at any time after the closing of the Merger. The outstanding principal amount of the Senior Secured Notes and all accrued but unpaid interest will be due and payable at the maturity date, December 15, 2026, unless otherwise converted. Upon the closing of the Merger, a portion of the aggregate outstanding Senior Secured Notes with an aggregate principal amount of $14.2 million and associated accrued interest of $0.5 million were converted into shares of our Common Stock. While any Senior Secured Notes are outstanding, we cannot incur additional indebtedness for borrowed funds, except additional Senior Secured Notes, substantially similar notes or other debt instruments that are pari passu with or subordinate to the Senior Secured Notes. As of June 30, 2026, the aggregate principal and accrued interest outstanding under the Senior Secured Notes totaled $1.4 million.

Current wording

The Senior Secured Notes bear interest at the compound rate of 15% per annum and are convertible at the option of each noteholder in connection with the Merger at a conversion price of (i) $4.50 per share at the closing of the Merger or (ii) $8.50 per share at any time after the closing of the Merger. The outstanding principal amount of the Senior Secured Notes and all accrued but unpaid interest will be due and payable at the maturity date, December 15, 2026, unless otherwise converted. While any Senior Secured Notes are outstanding, we cannot incur additional indebtedness for borrowed funds, except additional Senior Secured Notes, substantially similar notes or other debt instruments that are pari passu with or subordinate to the Senior Secured Notes. As of September 30, 2026, the aggregate principal and accrued interest outstanding under the Senior Secured Notes totaled $1,480.

Previous wording

In June 2025, we entered into a securities purchase agreement with accredited investors pursuant to which we sold and issued secured Convertible Promissory Notes and warrants to purchase 37,500,000 shares of Common Stock (“Warrants”) for total gross proceeds of $3 million. The Convertible Promissory Notes bear simple interest at a rate of 10.00% per annum and, as extended, mature in June 2027, unless earlier converted or repaid in accordance with its terms. Interest accrues daily based on a 360-day year and will not be paid in cash prior to maturity unless the Convertible Promissory Notes are repaid before conversion. As of June 30, 2026, the aggregate principal and accrued interest outstanding under the Convertible Promissory Notes totaled $3.1 million, net of the unamortized debt discount of $211 recognized in connection with the amendment and the remaining unamortized debt issuance costs.

Current wording

The Convertible Promissory Notes bear simple interest at a rate of 10.00% per annum and, as extended, mature in June 2027, unless earlier converted or repaid in accordance with its terms. Interest accrues daily based on a 360-day year and will not be paid in cash prior to maturity unless the Convertible Promissory Notes are repaid before conversion. As of September 30, 2026, the aggregate principal and accrued interest outstanding under the Convertible Promissory Notes totaled $3,241, net of the unamortized debt discount of $154 recognized in connection with the amendment and the remaining unamortized debt issuance costs.

Previous wording

Effective June 1, 2026, the Company and the holders amended the Convertible Promissory Notes to extend the maturity date to June 2027 and replace the provision requiring automatic conversion upon the closing of a qualified financing. Under the amended terms, if (i) the volume-weighted average price of the Company’s common stock on the immediately preceding trading day equals or exceeds $0.60 per share and (ii) the average daily traded value of the Company’s common stock for the five immediately preceding trading days equals or exceeds $1.0 million, the Company may elect to convert all or any portion of the outstanding principal balance into shares of common stock at a conversion price of $0.04 per share, subject to customary adjustments for stock splits, stock dividends, combinations, recapitalizations and similar events. Any accrued and unpaid interest attributable to principal converted pursuant to the amended conversion provision is automatically forgiven upon conversion. If the Company elects to convert the entire $3.0 million outstanding principal balance, the Convertible Promissory Notes would convert into 75,000,000 shares of the Company’s common stock.

Current wording

Effective June 1, 2026, the Company and the holders amended the Convertible Promissory Notes to extend the maturity date to June 2027 and replace the provision requiring automatic conversion upon the closing of a qualified financing. Under the amended terms, if (i) the volume-weighted average price of the Company’s common stock on the immediately preceding trading day equals or exceeds $0.60 per share and (ii) the average daily traded value of the Company’s common stock for the five immediately preceding trading days equals or exceeds $1,000, the Company may elect to convert all or any portion of the outstanding principal balance into shares of common stock at a conversion price of $0.04 per share, subject to customary adjustments for stock splits, stock dividends, combinations, recapitalizations and similar events. Any accrued and unpaid interest attributable to principal converted pursuant to the amended conversion provision is automatically forgiven upon conversion. If the Company elects to convert the entire $3,000 outstanding principal balance, the Convertible Promissory Notes would convert into 75,000,000 shares of the Company’s common stock.

Previous wording

Net cash used in operating activities was $2.7 million for the six months ended June 30, 2026. Operating cash flows reflected a net loss of $3.1 million, partially offset by $805 thousand in non-cash charges. Changes in working capital were primarily driven by a $214 thousand decrease in accounts payable, a $174 thousand decrease in accrued expenses and other current liabilities, partially offset by a $40 thousand increase in prepaid expenses and other current and non-current assets. Non-cash charges included $361 thousand in non-cash interest expense and $444 thousand in stock-based compensation.

Current wording

Net cash used in operating activities was $4,484 for the nine months ended September 30, 2026. Operating cash flows reflected a net loss of $6,040, partially offset by $2,080 in non-cash charges. Changes in working capital were primarily driven by a $58 increase in prepaid expenses and other current and non-current assets, a $10 decrease in accounts payable, and a $456 decrease in accrued expenses and other current liabilities. Non-cash charges included $545 in non-cash interest expense and $1,535 in stock-based compensation.

Previous wording

Net cash used in operating activities was $464 thousand for the six months ended June 30, 2025. Operating cash flows reflected net income of $1.9 million and a $0.8 million net increase in working capital, partially offset by offset by $3.2 million in net non-cash charges. Changes in working capital were primarily driven by a $720 thousand increase in accrued expenses and other current liabilities, and a $73 thousand increase in accounts payable, partially offset by a $37 thousand increase in prepaid expenses and other current and non-current assets. Non-cash charges included $2.4 million gain on extinguishment of Forward Purchase Agreement settlement liability, and $1.2 million gain on extinguishment of liabilities, partially offset by $195 thousand in non-cash interest expense, a $134 thousand loss on extinguishment of Senior Secured Note and $74,000 thousand in stock-based compensation.

Current wording

Net cash used in operating activities was $985 for the nine months ended September 30, 2025. Operating cash flows reflected net income of $5,195 and a $1,208 net increase in working capital, partially offset by $7,388 in net non-cash charges. Changes in working capital were primarily driven by a $1,009 increase in accrued expenses and other current liabilities, and a $206 increase in accounts payable. Non-cash charges included $5,614 gain on extinguishment of liabilities, and a $2,357 gain on extinguishment of Forward Purchase Agreement settlement liability, partially offset by $333 in non-cash interest expense, $116 in stock-based compensation and $134 loss on extinguishment of Senior Secured Note. As previously disclosed, we ceased operations in October 2024, resulting in limited activities during the current period.

Previous wording

Net cash provided by financing activities was $13.9 million for the six months ended June 30, 2026. This amount primarily reflects $13.8 million in net proceeds received from the sale of Series D Convertible Preferred shares, net of expenses, and proceeds of $1 thousand on the exercise of stock options.

Current wording

Net cash provided by financing activities was $14,127 for the nine months ended September 30, 2026. This amount primarily reflects $13,838 in net proceeds received from the sale of Series D Convertible Preferred shares, net of expenses, proceeds of $1 on the exercise of stock options, and proceeds of $288 on the exercise of warrants.

Previous wording

Net cash provided by financing activities was $1.5 million for the six months ended June 30, 2025. This amount primarily reflects $2.8 million in net proceeds received from the issuance of Convertible Promissory Notes, partially offset by the repayment of $1.3 million of Senior Secured Notes.

Current wording

Net cash provided by financing activities was $1,582 for the nine months ended September 30, 2025. This amount primarily reflects $2,925 in net proceeds received from the issuance of Convertible Promissory Notes, partially offset by the repayment of $1,343 of Senior Secured Notes.