Rank One Computing Corp 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2026 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________to_____________ Commission File Number 001-43137 RANK ONE COMPUTING CORPORATION (Exact name of registrant as specified in charter) Colorado 47-3970528 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1290 Broadway , Suite 1200 , Denver , CO 80203 (Address of principal executive offices) (Zip Code) (303) 317-6118 (Registrant’s telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of exchange on which registered Common Stock, par value $0.01 per share ROC The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ YES ☐ NO Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ YES ☐ NO Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ YES ☒ NO As of May 8th, 2026, there were 19,080,127 shares of the registrant’s common stock outstanding. NOTE REGARDING COMPANY REFERENCES Unless the context indicates otherwise, as used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “our company,” “our business,” “Rank One Computing,” and “ROC” refer to Rank One Computing Corporation and its subsidiaries. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this report, including information incorporated by reference, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect current views about future events and financial performance based on certain assumptions. They include opinions, forecasts, intentions, plans, goals, projections, guidance, expectations, beliefs or other statements that are not statements of historical fact. Words such as “will,” “may,” “should,” “could,” “would,” “expects,” “plans,” “believes,” “anticipates,” “intends,” “estimates,” “approximates,” “predicts,” “forecasts,” “potential,” “continue,” or “projects,” or the negative or other variation of such words, and similar expressions may identify a statement as a forward-looking statement. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, our goals, strategies, focus and plans, and other characterizations of future events or circumstances, including statements expressing general optimism about future operating results and the development of our products, are forward-looking statements. Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risk Factors” below, as well as those discussed elsewhere in this Quarterly Report on Form 10-Q. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We file reports with the Securities and Exchange Commission (the “SEC”). The public can read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report on Form 10-Q. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Quarterly Report on Form 10-Q, which attempt to advise interested parties of the risks and factors that may affect our businesses, financial condition, results of operations and prospects. FORM 10-Q TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Item 1. Condensed Financial Statements (Unaudited) F-1 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 1 Item 3. Quantitative and Qualitative Disclosures About Market Risk 8 Item 4. Controls and Procedures 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings 9 Item 1A. Risk Factors 9 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Mine Safety Disclosures 9 Item 5. Other Information 9 Item 6. Exhibits 10 SIGNATURES 11 i PART I - FINANCIAL INFORMATION Item 1. Financial Statements Rank One Computing Corporation Page Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 F-2 Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2026 and 2025 F-3 Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2026 and 2025 F-4 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 F-5 Notes to Condensed Consolidated Financial Statements F-6 F- 1 RANK ONE COMPUTING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, 2026 December 31, 2025 ASSETS Current Assets: Cash $ 16,616,852 $ 270,560 Accounts receivable net of allowance for credit losses of $ 60,380 and $ 161,723 , respectively 2,939,289 4,155,230 Prepaid expenses and other current assets 472,765 420,785 Total Current Assets 20,028,906 4,846,575 Property and equipment, net 444,970 268,569 Intangible assets, net 5,139 5,519 Operating lease right-of-use asset 1,017,640 1,088,181 Capitalized software 1,133,413 726,582 Other Assets 38,347 30,195 Total Non-Current Assets 2,639,509 2,119,046 Total Assets $ 22,668,415 $ 6,965,621 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities: Accounts payable and accrued expenses $ 1,685,951 $ 2,802,961 Deferred revenue 1,292,782 1,382,995 Line of credit 237,812 1,839,891 Operating lease liabilities short-term 312,403 306,113 Total Current Liabilities 3,528,948 6,331,960 Operating lease liabilities 831,488 912,229 Deferred tax liability 13,703 13,703 Total Long-Term Liabilities 845,191 925,932 Total Liabilities 4,374,139 7,257,892 Commitments and contingencies (Note 7) Stockholders’ Equity (Deficit): Common stock, par value $ 0.01 ; 100,000,000 shares authorized; 19,080,127 and 15,021,650 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 190,801 150,217 Additional paid-in capital 25,810,612 4,226,455 Accumulated Deficit ( 7,707,137 ) ( 4,668,943 ) Total Stockholders’ Equity (Deficit) 18,294,276 ( 292,271 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 22,668,415 $ 6,965,621 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. F- 2 RANK ONE COMPUTING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) For the Three Months Ended March 31, 2026 2025 Sales $ 2,548,642 $ 3,173,522 Cost of sales 542,994 659,738 Gross profit 2,005,648 2,513,784 Operating Expenses Selling, general and administrative 2,933,221 1,976,717 Research and development 2,087,767 1,554,246 Loss from Operations ( 3,015,340 ) ( 1,017,179 ) Other Income (Expense) Interest expense ( 19,418 ) ( 10,200 ) Other expense ( 3,436 ) - Total Other Income (Expense) ( 22,854 ) ( 10,200 ) Loss before benefit from income taxes ( 3,038,194 ) ( 1,027,379 ) Provision (Benefit) from income taxes - ( 290,813 ) Net Loss $ ( 3,038,194 ) $ ( 736,566 ) Loss per Share – Basic $ ( 0.18 ) $ ( 0.05 ) Loss per Share – Diluted $ ( 0.18 ) $ ( 0.05 ) Weighted Average Number of Shares – Basic 16,624,897 14,985,411 Weighted Average Number of Shares – Diluted 16,624,897 14,985,411 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. F- 3 RANK ONE COMPUTING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE MONTHS ENDED MARCH 31, 2026, AND 2025 (UNAUDITED) Common Stock Additional Paid-in Retained Earnings (Accumulated Total Stockholders’ Equity Shares Par Capital Deficit) (Deficit) Balance January 1, 2026 15,021,650 $ 150,217 $ 4,226,455 $ ( 4,668,943 ) $ ( 292,271 ) Stock-based compensation — — 142,470 — 142,470 Issuance of common stock from initial public offering, net of issuance costs 4,058,477 40,584 21,441,687 — 21,482,271 Net Loss — — — ( 3,038,194 ) ( 3,038,194 ) Balance, March 31, 2026 19,080,127 $ 190,801 $ 25,810,612 $ ( 7,707,137 ) $ 18,294,276 Common Stock Additional Paid-in Retained Earnings (Accumulated Total Stockholders’ Equity Shares Par Capital Deficit) (Deficit) Balance January 1, 2025 14,985,411 $ 149,854 $ 3,692,515 $ ( 1,992,097 ) $ 1,850,272 Stock-based compensation — — 89,819 — 89,819 Net Loss — — — ( 736,566 ) ( 736,566 ) Balance, March 31, 2025 14,985,411 $ 149,854 $ 3,782,334 $ ( 2,728,663 ) $ 1,203,525 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. F- 4 RANK ONE COMPUTING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 2026 2025 Cash Flows from Operating Activities: Net Loss $ ( 3,038,194 ) $ ( 736,566 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 142,470 89,819 Depreciation and amortization 39,347 34,649 Non-cash lease expense 87,711 88,084 Non-cash line of credit fees 32,830 — Change in expected credit losses ( 36,343 ) — Changes in Assets and Liabilities: Accounts receivable, net 1,252,284 362,778 Prepaid expenses and other current assets ( 51,980 ) 180,684 Other assets ( 8,152 ) — Deferred taxes — ( 290,813 ) Accounts payable and accrued expenses ( 1,117,010 ) 430,895 Deferred revenue ( 90,213 ) ( 496,639 ) Lease liability ( 91,622 ) ( 86,646 ) Net Cash Used In Operating Activities ( 2,878,872 ) ( 423,755 ) Cash Flows from Investing Activities: Capitalized software ( 406,831 ) ( 206,250 ) Purchase of fixed assets ( 215,368 ) — Net Cash Used in Investing Activities ( 622,199 ) ( 206,250 ) Cash Flows from Financing Activities: Net proceeds from issuance of common stock 21,482,271 — (Repayments to) proceeds from the line of credit, net ( 1,634,908 ) 108,481 Net Cash Provided by Financing Activities 19,847,363 108,481 Net Increase (Decrease) In Cash 16,346,292 ( 521,524 ) Cash, Beginning of Year 270,560 726,436 Cash, End of Period $ 16,616,852 $ 204,912 Supplemental Disclosures: Cash paid for interest $ 5,712 $ 1,302 NONCASH INVESTING AND FINANCING ACTIVITIES: Fair value of warrants issued with initial public offering $ 936,042 $ - The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. F- 5 RANK ONE COMPUTING CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 Note 1 – Organization and Nature of Business Rank One Computing Corporation (the “Company” or “ROC”) was incorporated in 2015 in the state of Virginia and subsequently converted to a corporation incorporated under the laws of the State of Colorado in 2018. We are an independent American artificial intelligence company developing Vision AI in identity, security, and digital forensics. The Company’s Vision AI platform delivers real-time facial recognition, multimodal biometric verification, and AI-powered evidence analysis. Initial Public Offering 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. 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. 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. Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair presentation of the Company’s condensed consolidated financial position and results of operations for the interim periods presented. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2026. The condensed consolidated balance sheet as of December 31, 2025 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. The results for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period. On January 8, 2026, the Company effected a stock split of the Company’s issued and outstanding Common Shares, by a ratio of 167-to-1 (the “Forward Stock Split”). Accordingly, all Common Shares, stock options, warrants, as well as per share information, for all periods presented in the consolidated financial statements and notes thereto have been adjusted retrospectively to reflect this Stock Split. F- 6 Recently Issued and Newly Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires disclosure of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction. As an emerging growth company that has elected the extended transition period under the JOBS Act, the Company will adopt this standard for its annual period beginning January 1, 2026 (the effective date applicable to entities other than public business entities). The Company expects the adoption will result in expanded qualitative and quantitative disclosures, including additional rate reconciliation categories and disaggregated income tax payment information, but does not expect the standard to have a material impact on its consolidated financial position, results of operations, or cash flows. In November 2024, the FASB issued Accounting Standards Update (ASU) No. 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses , which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the financial statements. The amendments in this pronouncement will be effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently assessing the potential impacts of adoption on its financial statements and related disclosures. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Inventories Inventory, which consists of hardware for installation, is stated at cost. Due to the nature of our deployments inventory turnover is quick, with most items moving from receipt to installation within a short period of time. As of March 31, 2026 and December 31, 2025, the Company has $ 34,470 and $ 26,563 of inventory respectively. These amounts are recorded in prepaid expenses and other current assets on the Balance Sheets. Estimated Fair Value of Financial Instruments The Company’s financial instruments include cash, accounts receivable, accounts payable, and lease commitments. Management believes the estimated fair value of these accounts on March 31, 2026, approximate their carrying value as reflected in the balance sheet due to their short-term nature. The carrying values of the Company’s Operating lease obligations approximate their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace. The fair value measurement disclosures are grouped into three levels based on valuation factors: ● Level 1 – quoted prices in active markets for identical investments ● Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) ● Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of equity instruments) F- 7 The carrying amounts of cash, accounts receivable, accounts payable, and prepaid expenses approximate fair value due to their short-term nature and accordingly are not assigned to a hierarchy level. The Company’s Level 2 assets and liabilities include the Company’s operating lease assets and liabilities. The carrying amounts of these leases approximate their fair values, based on a comparison of the lease terms and the Company’s incremental borrowing rates with those of similar leases available in the market. The Company’s Level 3 assets and liabilities use inputs to determine the fair value that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The Company typically determines the fair value of these assets and liabilities using discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. Concentration of Credit Risk and Other Risks and Uncertainties At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company has not previously experienced any losses related to these balances. The uninsured cash balance as of March 31, 2026, and December 31, 2025, was $ 16.1 and $ 0.0 million, respectively. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents. The Company’s customers are primarily concentrated in the United States. The table below details (1) the percentage of overall Accounts Receivable for customers that represented 10% or more of the total as of the end of each period and (2) the percentage of overall Revenue for customers that represented 10% or more of the total during each period. % of Total Accounts Receivable % of Total Revenue As of Three months ended March 31, March 31, 2026 December 31, 2025 2026 2025 Customer A 22 % - 26 % - Customer B 22 % - 22 % - Customer C 14 % 11 % - - Customer D - 16 % - - Customer E - 15 % - 14 % Customer F - - - 10 % Customer G - - - 18 % Prior-year customer concentration information has been reclassified to include unbilled accounts receivable to conform to the current-year presentation. This reclassification had no impact on the Company’s consolidated balance sheets, statements of operations, or cash flows. Reclassifications Certain amounts in the prior year’s condensed consolidated financial statements have been reclassified to conform to the current year’s presentation. These reclassifications were immaterial to the financial statements and had no impact on previously reported net loss, total assets, total liabilities, stockholders’ equity, or the previously reported net decrease in cash and cash equivalents. Cash Cash includes cash-on-hand with financial institutions and is subject to an insignificant risk. See Concentration of Credit Risk and Other Risks and Uncertainties above. Accounts Receivable and Allowance for Credit Losses The Company sells its services to customers on an open credit basis. Accounts receivable are uncollateralized, non-interest-bearing customer obligations and are typically due within 30 days. ASC 326 requires the recognition of lifetime estimated credit losses expected to occur for trade accounts receivable. The guidance also requires the Company to pool assets with similar risk characteristics and consider current economic conditions when estimating losses. Allowance for credit losses is based on the Company’s best estimate of probable losses inherent in its accounts receivable portfolio and is determined based on expectations of the customer’s ability to pay by considering factors such as customer type (commercial or government), historical experience, financial position of the customer, age of the accounts receivable, current economic conditions, and reasonable and supportable forward-looking factors about its portfolio and future economic conditions. F- 8 Changes in the allowance for expected credit losses for trade accounts receivable are presented in the table below: Three months ended March 31, 2026 Year ended December 31, 2025 Beginning balance $ 161,723 $ 60,040 Provision ( 36,343 ) 101,683 Write-offs (1) ( 65,000 ) - Ending Balance $ 60,380 $ 161,723 (1) Amounts written off as of March 31, 2026 were fully reserved as of December 31, 2025. Property and Equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives or the term of the lease using the straight-line method for financial statement purposes. Estimated useful lives for property and equipment are five to seven years. Additions, betterments and replacements are capitalized, while expenditures for repairs and maintenance are charged to operations when incurred. As units of property are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in other income or expense in the consolidated statements of income. Loss Contingencies The Company accrues for loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When the reasonably possible loss or range of loss can be estimated, the Company discloses the estimate; otherwise, the Company discloses that an estimate cannot be made. Legal costs incurred in connection with loss contingencies are expensed as incurred. Revenue Recognition The Company’s 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 U.S. government and commercial contracts. In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company applies the following five-step revenue recognition model in accounting for its revenue arrangements: ● Identification of the contract(s) with the customer, including whether collectability of the consideration is probable by considering the customers’ ability and intention to pay; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company generates revenue from several offerings. ROC SDK consists of software development kits that allow customers to integrate the Company’s biometric and recognition technology into their own applications. ROC Watch is a software platform that provides real-time monitoring and analytics for video and camera feeds. ROC ABIS is an automated biometric identification system designed for large-scale identity matching and verification. ROC Enroll is an enrollment application used to capture and manage biometric data for use with the Company’s platforms. In addition, the Company performs work under R&D contracts, primarily with U.S. government agencies, which may include software licenses and professional services. F- 9 In the following tables, revenue is disaggregated by major product line, geographic area based on customer location, and the timing of revenue recognition for the three months ended March 31, 2026, and 2025. Three Months Ended March 31, 2026 2025 ROC SDK $ 1,322,301 $ 1,677,506 ROC Watch 889,480 502,648 ROC ABIS 69,821 19,667 ROC Enroll 41,896 237,645 Total Product Revenue 2,323,498 2,437,466 R&D Contracts 225,144 736,056 Total Revenue $ 2,548,642 $ 3,173,522 United States Other Total Revenue for the three months ended March 31, 2026 $ 2,274,762 $ 273,880 $ 2,548,642 Revenue for the three months ended March 31, 2025 $ 2,695,723 $ 477,799 $ 3,173,522 2026 2025 Timing of revenue recognition Products transferred at a point in time $ 1,779,752 $ 1,896,365 Products and services transferred over time 768,890 1,277,157 Total Revenue $ 2,548,642 $ 3,173,522 Each of the Company’s significant performance obligations and the Company’s application of ASC 606 to its revenue arrangements is discussed in further detail below. Standalone Software License and Support The Company sells software licenses that include post-contract support (“PCS”) to customers for its Vision AI products, including ROC SDK, ROC Watch, ROC ABIS, and ROC Enroll. The Company’s software license arrangements are sold as perpetual or time-based, and in both cases software license revenue is recognized at a point in time when the license key is provided to the end user. Certain license arrangements include consumption-based pricing under which the customer pays a fixed minimum license fee, recognized at a point in time upon delivery of the license key, with incremental fees for usage above the minimum (typically measured on a per-identity-match or per-scan basis). These usage-based overages represent a sales- or usage-based royalty promised in exchange for a license of intellectual property and are recognized in the period in which the underlying usage occurs. Perpetual software license sales include PCS for an initial 12-month period following license delivery, with customers able to renew PCS annually thereafter. Time-based licenses include PCS for the duration of the license term. PCS is recognized on a straight-line basis over the contract term, once the related Software license has been recognized. PCS is accounted for as a distinct performance obligation because it provides ongoing updates, maintenance, and technical support services that are separately identifiable from the functional intellectual property conveyed in the software licenses. Accordingly, the Company allocates the transaction price between the license and PCS based on their respective standalone selling prices. F- 10 Software-as-a-Service (SaaS) Subscription Arrangements The Company offers certain Vision AI products on a hosted basis, in which the Company hosts the software in its or a third-party provider’s cloud environment and provides the customer with continuous access over a stated subscription term. When the customer does not have the contractual right to take possession of the software at any time during the hosting period without significant penalty, or when it is not feasible for the customer to run the software on its own hardware or to contract with an unrelated third party to host the software, the arrangement is accounted for as a service rather than a software license. For the Company’s hosted arrangements, access to the hosted software, the related ongoing technical support and software updates, and the underlying hosting infrastructure are not capable of being distinct from one another and are accounted for as a single combined performance obligation satisfied over time. Revenue is recognized ratably over the subscription term beginning on the date the customer is granted access to the hosted environment. Implementation and other professional services that do not significantly modify or customize the hosted functionality are accounted for as separate performance obligations and recognized as the services are performed. Bundled Security Solutions The Company sells bundled security solutions consisting of hardware (including cameras and computing devices), software licenses, installation services, and post-contract support (“PCS”), which are deployed at customer locations to monitor activity and identify people, vehicles, and other objects. Hardware and software license revenue is recognized at a point in time upon delivery to the customer site, installation services revenue is recognized over time as the services are performed, and PCS revenue is recognized ratably over the support period. R&D Contracts The Company enters into research and development contracts with customers (predominantly U.S. Government agencies and prime contractors, along with select commercial customers) under which the Company provides a license to use the software as part of a stated project, together with professional services to perform custom development, simulations, integration, testing, or other applications of the software in support of the customer’s research or development objectives. Most R&D Contracts are priced on a fixed-fee basis, with certain contracts billed on a usage or “time-and-materials” basis. Hardware and software license revenue is recognized at a point in time upon delivery to the customer site, and professional services revenue is recognized over time, as the services are performed over the contract period. Contract Receivables Contract receivables are recorded at the invoiced amount and are uncollateralized, non-interest-bearing client obligations. Provisions for estimated uncollectible accounts receivable are made for individual accounts based upon specific facts and circumstances including criteria such as their age, amount, and client standing. The Company records contract receivables when revenue recognized on a contract exceeds the billings. Contract receivables were $ 1,131,556 as of March 31, 2026, as compared to $ 1,216,073 as of December 31, 2025, and are included in accounts receivable, net on the condensed consolidated balance sheets. Costs to Obtain Contracts The Company accounts for incremental costs of obtaining customer contracts (sales commissions) in accordance with ASC 340-40, Other Assets and Deferred Costs — Contracts with Customers . Under the practical expedient permitted by ASC 340-40-25-4, the Company expenses such costs as incurred for contracts with an expected amortization period of one year or less. For contracts with an expected amortization period greater than one year, the Company capitalizes eligible incremental costs if recovery is expected and amortizes the resulting asset on a straight-line basis over the expected period of benefit. The portion of the asset expected to be amortized within twelve months of the balance sheet date is presented within Prepaid expenses and other current assets, with the remainder presented within Other assets on the condensed consolidated balance sheets. As of March 31, 2026 and December 31, 2025, total capitalized commission costs were $ 48,478 and $ 32,940 , respectively, of which $ 10,131 and $ 2,745 are classified as current and $ 38,347 and $ 30,195 are classified as long-term. The long-term balances have remaining amortization periods extending through 2030. Contract Liabilities Sales are generally recorded in the month the service is provided. For clients who are billed on an annual basis, deferred revenue is recorded and amortized over the life of the contract in accordance with the prescribed revenue recognition method. During the three months ended March 31, 2026 and 2025, the Company recognized $ 509,280 and $ 638,485 in sales that was recorded as deferred revenue as of December 31, 2025 and 2024, respectively. Deferred revenue for customer contracts represents amounts collected from, or invoiced to, customers in advance of revenue recognition. The balance of Deferred revenue will increase or decrease based on the timing of invoices and recognition of revenue. Significant changes in our Deferred Revenue liability balances during the three months ended March 31, 2026 and March 31, 2025 were as follows: March 31, 2026 March 31, 2025 Beginning balance $ 1,382,995 $ 1,490,949 Revenue Recognized ( 509,280 ) ( 638,485 ) Amounts Collected or Invoiced 419,067 141,846 Ending Balance $ 1,292,782 $ 994,310 F- 11 Determining the Standalone Selling Price (SSP) for Post Contract Support (PCS) Services Contracts with customers often include multiple performance obligations that are distinct and accounted for separately. These typically include licensed software and post-contract support (“PCS”) services, such as maintenance, technical support, and software updates. The Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. Standalone selling price is estimated at contract inception using all reasonably available information, including observable renewal rates, historical pricing relationships, market conditions, and industry data. Judgment is required when standalone selling price is not directly observable. For time-based license contracts (up to one year), PCS services are bundled with the license and provided throughout the contract term. For perpetual license contracts, PCS services are included for the initial 12-month period following license delivery. Customers may subsequently purchase extended PCS services annually as outlined in the contracts, typically priced at 20 % of the original perpetual license fee. Based on the results of the Company’s standalone selling price analysis, a specific percentage of the transaction price is allocated to each performance obligation. For both time-based and perpetual license contracts, 20 % of the transaction price is allocated to PCS services, using the observable annual renewal rate as the basis for SSP. The remaining 80 % is allocated to the software license, reflecting the pricing relationship between the license and PCS and maximizing the use of observable inputs. Revenue is recognized in accordance with the timing of satisfaction of each performance obligation. For time-based license contracts, the portion allocated to the software license is recognized at the time of delivery, while the PCS portion is recognized ratably over the contract term. For perpetual license contracts, the software license portion is recognized upon delivery, and the PCS portion is recognized ratably over the initial 12-month coverage period. Revenue from extended PCS services is recognized ratably over the applicable renewal term, consistent with the period of service delivery. Determining the Standalone Selling Price (SSP) for Bundled Security Solutions and R&D Contracts The Company’s contracts for bundled solutions and R&D contracts can contain multiple performance obligations, including a combination of software licenses and related PCS, hardware, installation services, and professional services. The Company determines the SSP for each performance obligation using observable inputs, as follows: - Hardware is generally purchased from third parties and resold to customers, with SSP established using a cost-plus-margin approach. - Installation and professional services are priced based on hourly rates that approximate market rates for similar services. Where the Company engages third parties to perform such tasks, SSP is approximated using cost-plus-margin. - Software licenses and related PCS are allocated consistent with the methodology described above, with 20 % of the transaction price assigned to annual PCS based on observable renewal pricing, and 80 % assigned to the software license. Contract and Payment Terms The typical terms of software license contracts range from 12 to 36 months, with auto-renew options extending the contract for an additional term. Payment amounts are generally due within 30 days of invoice, and can range from 30 to 90 day terms. Significant Judgment The Company applies judgment in identifying performance obligations in contracts that include multiple promised goods and services, such as software licenses, hosting arrangements, implementation services, customer support, and other related offerings. In accordance with ASC 606, promised goods or services are evaluated to determine whether they are distinct and therefore accounted for as separate performance obligations, considering the nature of the promise and how the offerings are bundled and delivered to the customer. In instances where contracts include multiple performance obligations, the Company exercises judgment in determining the standalone selling price for each obligation. Standalone prices are established by evaluating market data for comparable services and considering the Company’s historical pricing practices. The aggregate standalone price of all performance obligations is calculated, and each individual obligation’s proportionate share of the total is determined. This ratio is then applied to the overall contract price to allocate the transaction price among the performance obligations accordingly. F- 12 Significant Financing Component The Company has elected the practical expedient in ASC 606-10-32-18 and does not adjust the transaction price for the effects of a significant financing component if the period between transfer of goods or services and customer payment is one year or less. The Company evaluated whether any of its contracts contain a significant financing component and concluded that no significant financing component exists in its contracts. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying value exceeds the fair value, is recognized if the carrying amount exceeds estimated un-discounted future cash flows. During the three months ended March 31, 2026, and 2025, the Company recognized no impairment charges on long-lived assets. Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred $ 43,809 and $ 24,997 for advertising costs for the three months ended March 31, 2026, and 2025, respectively. Advertising costs are included within selling, general and administrative expenses in the consolidated statements of income. Research and Development Costs Research and development costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in performing the activities to develop and refine the Company’s platforms and products services and other IT-related costs, travel costs, and allocated overhead. Research and development costs are expensed as incurred. During the three months ended March 31, 2026, and 2025, the Company recorded approximately $ 2.1 million and $ 1.6 million, respectively, in Research and Development expense on the consolidated statements of income. Software Development Costs Beginning in 2025, the Company commenced development of a new software project comprising multiple modular components, each with its own development cycle, for which technological feasibility was established prior to general release. For this project, eligible development costs incurred subsequent to the establishment of technological feasibility for specific modules and enhancements are being capitalized in accordance with ASC 985-20. Capitalized amounts are presented as capitalized software within the condensed consolidated balance sheets and will be amortized to cost of sales over the estimated economic life of the related product once available for general release. As of March 31, 2026 and December 31, 2025, the Company had approximately $ 1.1 million and $ 0.7 million, respectively relating to capitalized software development costs. No amortization expense related to the project was recorded for the three months ended March 31, 2026 or 2025. The Company expects amortization to commence during the second quarter of 2026 over the estimated useful lives of the project components placed in service. No write-downs to net realizable value were recorded during the three months ended March 31, 2026 or 2025. Stock-Based Compensation The Company follows the requirements of FASB ASC 718-10-10, Share-Based Payments with regards to stock-based compensation issued to employees and non-employees. The Company has agreements and arrangements that call for stock to be awarded to employees and consultants at various times as compensation and periodic bonuses. The expense for this stock-based compensation is equal to the fair value of the stock price on the day the stock was awarded multiplied by the number of shares awarded. The Company utilized a 409A valuation to determine the value of the Company’s common stock on the date of issuance. The Company has a relatively low forfeiture rate of stock-based compensation, and forfeitures are recognized as they occur. The valuation methodology used to determine the fair value of options issued during the period is the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including the volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options. Due to the Company’s limited historical data related to employee share option exercise behavior, the Company has elected to use the “simplified” method as permitted by Staff Accounting Bulletin No. 110 for its “plain vanilla” stock option grants. Risk-free interest rates are calculated based on continuously compounded risk-free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common Stock. The expected forfeiture rate is estimated based on management’s best assessment. Estimated volatility is a measure of the amount by which the Company’s asset price is expected to fluctuate each year during the expected life of the award. ROC does not yet have sufficient history of public trading and therefore utilizes the volatility of peer companies. F- 13 Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment. Benefit Plans We sponsor a defined contribution retirement savings plan for employees who meet certain eligibility requirements. Under the plan, the Company makes a non-elective contribution equal to 3 % of each eligible employee’s compensation, regardless of whether the employee elects to contribute. There is no matching component. Employer contributions vest immediately. Total employer contributions were $ 96,531 for the three months ended March 31, 2026, and $ 68,073 for the three months ended March 31, 2025. Net Loss Per Common Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share (“Diluted EPS”) reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Diluted EPS includes the effect of stock options and warrants using the treasury stock method, and convertible instruments using the if converted method, when dilutive. Potential common shares are excluded from the calculation if their effect would be antidilutive. The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income per share because their effect was anti-dilutive: Three Months Ended March 31, 2026 2025 Options 9,376,716 8,929,991 Warrants 284,093 - Total 9,660,809 8,929,991 Note 3 – Prepaids and other current assets Prepaids and other current assets consist of the following: March 31, December 31, 2026 2025 Prepaid Expenses $ 169,663 $ 105,394 Prepaid Insurance 233,157 33,941 Inventory 34,470 26,563 Deposits 25,344 25,344 Deferred Offering Costs - 226,798 Deferred Commission Expense 10,131 2,745 Total prepaids and other current assets $ 472,765 $ 420,785 Offering costs related to the initial public offering completed in February 2026 were deferred and, at closing, offset against gross proceeds and recorded as a reduction of additional paid-in capital (Note 8 – Stockholders’ Equity). F- 14 Note 4 – Property and Equipment Property and equipment, at cost, consist of the following: March 31, December 31, 2026 2025 Computers $ 909,118 $ 693,750 Furniture and fixtures 92,269 92,269 Gross Property and equipment 1,001,387 786,019 Less: Accumulated depreciation ( 556,417 ) ( 517,450 ) Net property and equipment $ 444,970 $ 268,569 Depreciation expense for the three months ended March 31, 2026 and 2025 was $ 38,967 and $ 34,269 . Note 5 – Intangible Assets Intangible assets consisted of the following: March 31, December 31, 2026 2025 Software $ 10,966 $ 10,966 Less: Accumulated amortization ( 5,827 ) ( 5,447 ) Net intangible assets $ 5,139 $ 5,519 Amortization expense was $ 380 for both the three months ended March 31, 2026, and 2025. Note 6 – Leases Operating Leases The Company’s significant operating leases include the following at March 31, 2026: The Company leases approximately 6,600 square feet of office space in Morgantown, West Virginia. The lease requires payments of $ 799,956 over the five-year term. The lease expires in November 2029, subject to extension. The Company leases approximately 5,892 square feet of office space in Denver, Colorado. The lease requires payments of $ 1,221,363 over the eight-year term. The lease expires in June 2029, subject to extension. The Company leases approximately 1,546 square feet of office space in Grand Rapids, Michigan. The lease requires payments of $ 98,558 over the three year term. The lease expires in February 2027, subject to extension. The Company’s lease agreements do not contain material variable lease payments, residual value guarantees, or restrictive covenants. Renewal and termination options are not included in the lease term unless the Company is reasonably certain to exercise such options. As of March 31, 2026, the Company had no renewal or termination options that were reasonably certain to be exercised, and therefore none are reflected in the lease term or related lease liabilities. The Company determines if an arrangement is a lease at inception. An arrangement is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If a lease is identified, classification is determined at lease commencement. Operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company’s leases do not provide an implicit interest rate and therefore the Company estimates its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the interest rate that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term. Operating lease right-of-use (“ROU”) assets are based on the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct costs, and lease incentives. Renewals or early terminations are not accounted for unless the Company is reasonably certain to exercise these options. Operating lease expense is recognized, and the ROU asset is amortized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for separately. For short-term leases, defined as leases with a term of twelve months or less, the Company elected the practical expedient to not recognize an associated lease liability and ROU asset. Lease payments for short-term leases are expensed on a straight-line basis over the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, and operating lease liabilities, non-current on the Company’s consolidated balance sheets. The Company has not entered into any Finance leases. F- 15 Operating lease expense, including short term leases, is recognized within cost of sales, selling, general and administrative expense, and research and development expense in the consolidated statements of income, based on the nature of the activities supported by the leased space. The components of lease expense for the three months ended March 31, 2026 and 2025 were as follows: Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Operating lease: Fixed lease cost $ 87,713 $ 87,751 Short-term lease cost 18,426 9,353 Total operating lease cost $ 106,139 $ 97,104 Supplemental balance sheet information related to leases was as follows: March 31, 2026 December 31, 2025 Operating Leases: Operating lease right-of-use asset $ 1,017,640 $ 1,088,181 Current operating lease liabilities $ 312,403 $ 306,113 Noncurrent operating lease liabilities 831,488 912,229 Total operating lease liabilities $ 1,143,891 $ 1,218,342 Supplemental cash flow and other information related to leases were as follows: Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 91,622 $ 86,646 Weighted average remaining lease term (in years): Operating leases 3.39 4.35 Weighted average discount rate: Operating leases 5.92 % 5.96 % At March 31, 2026, the future minimum lease payments under these operating leases are as follows: Fiscal Years Ending December 31, 2026 (1) $ 276,226 December 31, 2027 354,991 December 31, 2028 363,640 December 31, 2029 267,346 December 31, 2030 - Total lease payments 1,262,203 Less: Amounts representing interest ( 118,312 ) Total lease obligations 1,143,891 Less: short-term obligations ( 312,403 ) Total long-term $ 831,488 (1) Represents scheduled payments for the remaining nine-month period ending December 31, 2026. As of March 31, 2026, the Company had no additional significant operating or finance leases that had not yet commenced. F- 16 Note 7 – Commitments and Contingencies Line of Credit The Company maintains a revolving demand line of credit with a bank, collateralized by the Company’s assets, which may be cancelled by either party at any time upon written notice. As amended on December 31, 2025, the facility provides for maximum advances of $ 2,500,000 at an adjustable rate equal to the Prime Rate plus two percent per annum. At March 31, 2026, the total interest rate was at 8.25 %. The line of credit balance outstanding as of March 31, 2026 and December 31, 2025, was $ 237,812 and $ 1,839,891 , respectively. Litigation In March 2026, Eye Corp IT Solutions LLC filed a claim in the High Court of England and Wales (Case No. CL-2026-000062) that named Rank One Computing Corporation and certain other defendants. The claim generally relates to alleged commercial matters, and seeks damages and other relief. The Company was served with the claim form in March 2026, and the matter remains in its preliminary stages. The Company believes the claim is without merit and intends to defend the matter vigorously. Given the early stage of the proceedings, the Company is unable to predict the outcome or estimate a range of reasonably possible loss, if any, that may result from the matter. No accrual for loss contingencies related to this matter has been recorded as of March 31, 2026. While the Company does not currently believe the claim will result in a material adverse effect on its financial condition, results of operations, or cash flows, litigation is inherently uncertain and an unfavorable outcome could differ from this expectation. The Company is currently not involved in any other litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company, threatened against or affecting the company, its common stock, any of the Company’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. From time to time, we may become involved in legal proceedings and claims that arise in the ordinary course of business. The outcome of litigation is inherently uncertain. An unfavorable resolution of one or more proceedings could materially impact our future business, operating results, or financial condition. In addition, regardless of the outcome, litigation may result in significant costs, diversion of management attention, and other adverse effects. Note 8 – Stockholders’ Equity Capital Stock The Company has 100,000,000 authorized shares of Common Stock, par value $ 0.01 . Initial Public Offering 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 “Offering”). On February 23, 2026, the Company consummated the closing of the Offering, consisting of 4,000,000 shares of common stock at a public offering price of $ 6.00 per share. The Company received gross proceeds of approximately $ 24.0 million and paid approximately $ 2.9 million in transaction costs. This includes $ 226,798 of deferred offering costs as of December 31, 2025. See Note 3 for additional information. The Company’s common stock began trading on the Nasdaq Capital Market on February 20, 2026, under the ticker symbol “ROC”. Pursuant to the Underwriting Agreement, the Company granted the Representative a 30 -day option (the “Over-Allotment Option”) to purchase up to an additional 600,000 shares of common stock at the offering price, less the underwriting discount, to cover over-allotments. On March 26, 2026, the Representative exercised a partial overallotment option, resulting in the issuance of an additional 58,477 shares and additional gross proceeds of approximately $ 0.4 million. In addition, as partial compensation for services rendered in connection with the Offering, the Company issued to the Representative warrants (the “Representative Warrants”) to purchase an aggregate of 284,093 shares of common stock at an exercise price of $ 7.50 per share, representing 125 % of the public offering price. The Representative Warrants are exercisable beginning August 22, 2026 (for the 280,000 warrants issued at the IPO closing) and August 24, 2026 (for the 4,093 warrants issued at the over-allotment closing), subject to the 180-day lock-up under FINRA Rule 5110(e), and expire on February 19, 2031. The warrants had a fair value of $ 936,042 at the time of issuance. F- 17 Option Plan Details On January 8, 2026, our Board adopted and our shareholders approved the 2026 Equity Incentive, which will terminate automatically on January 7, 2036, unless terminated earlier by the Company, and no grants may be granted under the 2026 Plan following such termination. The 2026 Plan provides for (a) the grant of incentive stock options, (b) nonstatutory stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) restricted stock unit awards, (f) performance awards and (g) other stock awards. The total number of shares of common stock reserved and available for issuance pursuant to the 2026 Plan will not exceed the initial share reserve of 1,000,000 shares plus an annual automatic increase on January 1, 2027 and each year thereafter equal to the lesser of (i) 3 % of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year, or (ii) such lesser number of shares of common stock as may be determined by the Board. If any equity incentive under the 2026 Plan (i) expires or otherwise terminates without all of the shares of common stock having been issued or (ii) is settled in cash, such expiration, termination or settlement will not reduce the number of shares available for issuance under the 2026 Plan. If any shares of common stock issued pursuant to any form of stock award under the 2026 Plan are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares, then the shares that are forfeited or repurchased will revert to and again become available for issuance under the 2026 Plan. Any shares reacquired by or withheld by the Company in satisfaction of tax withholding obligations on any form of stock award or as consideration for the exercise or purchase price of any form of stock award will again become available for issuance under the 2026 Plan. During the three months ended March 31, 2026 and 2025, there were no stock options exercised into shares of Common Stock. Common Stock Options Options granted under the Plan vest over three or five years, with 33 % or 20 % vesting on the first anniversary of the grant date, respectively, and the remainder vesting in equal monthly installments thereafter, subject to the recipient’s continued service. Options have a maximum term of 10 years and become exercisable as they vest. The exercise price equals the grant-date fair value of the Company’s common stock, which was based on an independent Section 409A valuation before the initial public offering and the quoted market price on the grant date after the initial public offering. A summary of the Company’s stock option activity and related information follows: Number of Weighted Weighted Shares Average Average Under Exercise Contractual Options Price Life Options Outstanding at January 1, 2026 9,376,716 $ 2.16 6.81 Options Granted — — — Exercised — — — Expired/Cancelled — — — Options Outstanding at March 31, 2026 9,376,716 $ 2.16 6.56 Options Exercisable at March 31, 2026 5,674,780 $ 1.98 6.18 Share-based compensation expense recognized for stock options granted totaled $ 142,470 and $ 89,819 for the three months ended March 31, 2026 and 2025, respectively. The intrinsic value of outstanding stock options as of March 31, 2026 and December 31, 2025 was $ 45,309,086 and $ 4,801,673 , respectively. F- 18 Warrants In connection with the Company’s initial public offering completed in February 2026 and the subsequent exercise of the underwriters’ over-allotment option in March 2026, the Company issued an aggregate of 284,093 Representative’s Warrants to The Benchmark Company, LLC as compensation pursuant to the underwriting agreement. The Representative’s Warrants have an exercise price of $ 7.50 per share ( 125 % of the $ 6.00 IPO offering price), are exercisable beginning August 22, 2026 for the 280,000 warrants issued at the IPO closing and August 24, 2026 for the 4,093 warrants issued at the over-allotment closing, in each case subject to the 180-day lock-up under FINRA Rule 5110(e), and expire February 19, 2031. Unexercised warrants are subject to automatic cashless exercise on the termination date. The Representative’s Warrants include a 9.99% beneficial ownership limitation, one demand registration right, and piggyback registration rights. The Company concluded that the Representative’s Warrants qualify for equity classification under ASC 480 and ASC 815-40. The warrants were measured at fair value on their respective issuance dates using the Black-Scholes option pricing model with the assumptions shown below. The aggregate fair value of $ 936,042 was recorded as a non-cash issuance cost with an offsetting credit to additional paid-in capital, resulting in no net impact on stockholders’ equity. As equity-classified instruments, the Representative’s Warrants are not remeasured after initial recognition. IPO Closing Over-allotment Closing Date of issuance February 23, 2026 March 26, 2026 Warrants issued 280,000 4,093 Exercise price $ 7.50 $ 7.50 Risk-free rate 3.59 % 4.08 % Volatility 69 % 69 % Aggregate fair value $ 918,860 $ 17,182 As the exercise price of $ 7.50 exceeded the Company’s average stock price during the three months ended March 31, 2026, the Representative’s Warrants were antidilutive and excluded from diluted earnings per share. All 284,093 Representative’s Warrants remain outstanding and unexercised as of March 31, 2026. Note 9 – Income Taxes The Company computes its provision for (benefit from) income taxes for interim periods by applying an estimated annual effective tax rate to its year-to-date pretax results, adjusted for discrete items recognized during the period. For the three months ended March 31, 2026, the Company determined that an estimated annual effective tax rate could not be reliably calculated because relatively small changes in projected pretax results produce significant changes in the estimated annual effective rate. Accordingly, the Company computed its income tax provision using the actual year-to-date results. For the three months ended March 31, 2026, the Company recorded no provision for or benefit from income taxes, compared to a benefit of $ 290,813 for the three months ended March 31, 2025. No tax benefit was recognized on the pretax loss for the current period because the Company maintains a full valuation allowance against its U.S. federal and state net deferred tax assets, as more fully described in Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Management continues to evaluate the realizability of its deferred tax assets each reporting period; the valuation allowance will be reduced when management concludes it is more likely than not that some or all of the deferred tax assets will be realized. The deferred tax liability of $ 13,703 at March 31, 2026 and December 31, 2025 represents the residual net position of taxable temporary differences (primarily depreciation and accrual-to-cash adjustments) that exceed the deductible temporary differences supportable by reversal scheduling, after application of the valuation allowance. No material changes occurred during the three months ended March 31, 2026 in the Company’s positions with respect to unrecognized tax benefits. Note 10 – Related Party Transactions The Company has evaluated its relationships and transactions in accordance with ASC 850, Related Party Disclosures, and has determined that there were no material related party transactions or balances requiring disclosure in the accompanying financial statements. F- 19 Note 11 – Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the Chief Operating Decision Maker (the “CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer (CEO). While the Company generates revenue in multiple ways (sale of access to its software platforms, maintenance services, and professional services), these services are often bundled and difficult to assess individually. The CODM manages the business activities and receives financial reporting information on a consolidated basis as a single operating segment. While the CODM reviews sales by product offering, no profit measures are provided at that level. Accordingly, the Company has determined it has one operating segment, which is its only reportable segment. Resource allocation and performance evaluation are based on consolidated net income as reported in the consolidated statements of income, with supplemental consideration of sales by product offering, as well as consolidated gross profit and operating income or loss. Sales are monitored at the individual product offering level to gauge growth and market penetration, and to ensure timely execution of the Company’s sales contracts, but profit measures are not available at the product level. The Company does not have any intercompany sales or transfers. The CODM reviews only the expense captions presented in the consolidated statements of income (cost of sales; selling, general and administrative; research and development; and interest and other expense) and receives no further disaggregated expense information. The CODM does not review segment asset information in assessing performance or allocating resources. Accordingly, the Company does not present segment asset disclosures below the consolidated balance sheet level. All assets considered by the CODM in assessing the single reportable segment performance and allocating resources are included in the consolidated balance sheet and are located in the United States. The Company’s total revenue for the single reportable segment is presented at Note 2, which includes a disaggregation of revenue by product, revenue by geographic location, and significant revenue concentrations for the three months ended March 31, 2026 and 2025, respectively. March 31, March 31, 2026 2025 Total Revenue $ 2,548,642 $ 3,173,522 Products and services The Company generates revenue from the following major product and service categories: Three Months Ended March 31, 2026 2025 ROC SDK $ 1,322,301 $ 1,677,506 ROC Watch 889,480 502,648 ROC ABIS 69,821 19,667 ROC Enroll 41,896 237,645 Total Product Revenue 2,323,498 2,437,466 R&D Contracts 225,144 736,056 Total Revenue $ 2,548,642 $ 3,173,522 Note 12 – Subsequent Events The Company has evaluated subsequent events through the date these condensed consolidated financial statements were issued and has determined that no events or transactions have occurred subsequent to March 31, 2026 that would require recognition or disclosure in these condensed consolidated financial statements. F- 20 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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. Overview 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. Factors and Trends Affecting Our Business and Results of Operations 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. Financial Considerations and Strategic Investments We are making strategic investments to capitalize on market opportunities. ROC’s expenses reflect these investments, which are aimed at driving future growth and enabling us to provide a platform that supports a wide range of identity-related needs. Government Policy and Geopolitical Factors 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. The Growing Importance of Identity Solutions Identity is becoming a critical global currency, with increasing recognition that robust identity management is essential for security, efficiency, and trust. The increasing focus on digital identity initiatives highlights the growing significance of effective and comprehensive identity management systems. This trend increases the demand for effective and comprehensive identity management systems. Evolution of Biometric Technologies While specific biometric modalities are becoming more commoditized, the focus is shifting towards efficiency, plug-and-play capabilities, and multi-biometric systems. The differentiators around specific accuracy algorithms are becoming less important, with efficiency and the ability to integrate various technologies becoming key. This shift favors companies like us that offer versatile, data-agnostic, and privacy-protecting solutions. We believe that our ability to provide a “Swiss Army knife” of identity solutions, capable of addressing diverse use cases, positions us for success in this evolving market. 1 Poison AI “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. Our Strategic Response ROC’s strategy is aligned with these trends. We recognize that having a great algorithm alone is no longer sufficient. Customers demand a full stack of capabilities, the ability to turn features on and off, and accommodation of complex demands. Our approach involves: ● 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 Watch, and ROC Enroll. ● 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. ● 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. ● 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. Revenue 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. Cost of Sales Cost of sales consists primarily of personnel-related costs (including salaries, benefits, and stock-based compensation) for employees who provide customer support and deliver research and development services under customer contracts, the cost of cameras, hardware devices, and installation services for our bundled security solutions, and technology infrastructure costs. 2 Operating Expenses Operating expenses consist of selling, general and administrative expenses, and research and development. Research and Development Research and development expenses consist primarily of personnel-related costs for our research and engineering personnel, fees paid to third-party contractors and consultants supporting our research and development activities, costs of research supplies and software development tools, and allocated facilities and information technology costs. Research and development costs are expensed as incurred, except for software development costs that qualify for capitalization under ASC 985-20, Costs of Software to Be Sold, Leased, or Marketed. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of personnel-related costs, including salaries, benefits and stock-based compensation expense, for our personnel in executive, finance and accounting, human resources, business operations and other administrative functions, investor relations activities, legal fees related to corporate matters, fees paid for accounting and tax services, consulting fees and facility-related costs. Recent Developments Initial Public Offering 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. 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. 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. Results of Operations Comparison of the three months ended March 31, 2026 and 2025 Revenue 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. Management uses Product Revenue as an indicator of the commercial adoption of our software offerings and to evaluate the performance of our go-to-market activities. Product Revenue isolates revenue generated from productized software from revenue earned under research and development contracts, which are generally project-specific and non-recurring in nature. Product Revenue should be considered in conjunction with, and not as a substitute for, total revenue and other measures presented in accordance with U.S. GAAP. 3 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. Three Months Ended March 31, Change 2026 2025 Amount % ROC SDK $ 1,322,301 $ 1,677,506 $ (355,205 ) (21 )% ROC Watch 889,480 502,648 386,832 77 % ROC ABIS 69,821 19,667 50,154 255 % ROC Enroll 41,896 237,645 (195,749 ) (82 )% Total Product Revenue 2,323,498 2,437,466 (113,968 ) (5 )% R&D Contracts 225,144 736,056 (510,912 ) (69 )% Total Revenue $ 2,548,642 $ 3,173,522 $ (624,880 ) (20 )% Cost of sales 542,994 659,738 (116,744 ) (18 )% Gross Profit $ 2,005,648 $ 2,513,784 $ (508,136 ) (20 )% Gross Margin 79 % 79 % Revenue decreased by $624,880, or 20%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. 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. 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. 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. Operating Expenses 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. Three Months Ended March 31, Change 2026 2025 Amount % Selling, general and administrative $ 2,933,221 $ 1,976,717 $ 956,504 48 % Research and development 2,087,767 1,554,246 533,521 34 % Operating Expenses $ 5,020,988 $ 3,530,963 $ 1,490,025 42 % 4 Selling, General and Administrative Expenses 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. Research and Development 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. Other Income and Expenses Three months ended March 31, Change 2026 2025 Amount % Interest expense (19,418 ) (10,200 ) (9,218 ) 90 % Other expense (3,436 ) — (3,436 ) — Total Other Income (Expense) $ (22,854 ) $ (10,200 ) $ (12,654 ) 124 % 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. Income Tax Provision (Benefit) 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. 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. 5 Net Loss Attributable to Common Stockholders 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. Net Loss per Share 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. Liquidity and Capital Resources 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. 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. 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. Our future capital requirements will depend on many factors, including our rate of revenue growth, the timing and extent of our product development and sales and marketing activities, the pace of customer acquisition, and general market conditions. We may seek additional equity or debt financing in the future to fund our growth strategy, though there can be no assurance that such financing will be available on acceptable terms, or at all. Material Cash Requirements Our material cash requirements as of March 31, 2026 consist primarily of the following: 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. 6 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. 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. Off-balance sheet arrangements: We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources that is material to investors. We expect to fund these obligations from our existing cash, cash generated from operations, and, if necessary, borrowings under our line of credit. Cash flow activity below is a vital financial metric that represents the net amount of cash moving into and out of a business. The table below provides details about cash flow performance for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Three months ended March 31, Change 2026 2025 Amount % Net cash (used in) provided by: Operating activities $ (2,878,872 ) $ (423,755 ) $ (2,455,117 ) 579 % Investing activities (622,199 ) (206,250 ) (415,949 ) 202 % Financing activities 19,847,363 108,481 19,738,882 18,196 % Net increase (decrease) in cash $ 16,346,292 $ (521,524 ) $ 16,867,816 Operating Activities 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. Investing Activities 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. 7 Financing Activities 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. Emerging Growth Company and Smaller Reporting Company Status We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and a “smaller reporting company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934. As an emerging growth company, we are eligible to take advantage of certain reduced reporting and other requirements otherwise applicable to public companies, including, but not limited to, an exemption from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. Section 102(b)(1) of the JOBS Act permits emerging growth companies to delay adoption of new or revised financial accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period, and this election is irrevocable. As a result, our consolidated financial statements may not be comparable to those of public companies that comply with new or revised financial accounting standards as of the effective dates applicable to non-emerging growth companies. There have been no changes to our status as an emerging growth company or smaller reporting company, or to our election to use the extended transition period, since the filing of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Critical Accounting Policies and Estimates 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. Recent Accounting Pronouncements See Note 2 of the Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q. Item 3. Quantitative and Qualitative Disclosures About Market Risk As a “smaller reporting company”, we are not required to provide the information required by this Item. Item 4. Controls and Procedures Disclosure Controls and Procedures We maintain “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e), promulgated by the SEC pursuant to the Exchange Act. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of March 31, 2026, our disclosure controls and procedures were effective. Changes in Internal Control There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings. In March 2026, Eye Corp IT Solutions LLC filed a claim in the High Court of England and Wales (Case No. CL-2026-000062) that named Rank One Computing Corporation and certain other defendants. The claim generally seeks damages and other relief related to commercial dealings with the plaintiff. The Company believes the claim is without merit and intends to defend it vigorously. Given the early stage of the proceedings, the Company is unable to predict the outcome or estimate a range of reasonably possible loss, if any, that may result from the matter. No accrual for loss contingencies related to this matter has been recorded as of March 31, 2026. While the Company does not currently believe the claim will result in a material adverse effect on its financial condition, results of operations, or cash flows, litigation is inherently uncertain and an unfavorable outcome could differ from this expectation. The Company is currently not involved in any other litigation. Other than as discussed above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company, threatened against or affecting the company, its common stock, any of the Company’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. From time to time, we may become involved in legal proceedings and claims that arise in the ordinary course of business. The outcome of litigation is inherently uncertain. An unfavorable resolution of one or more proceedings could materially impact our future business, operating results, or financial condition. In addition, regardless of the outcome, litigation may result in significant costs, diversion of management attention, and other adverse effects. Item 1A. Risk Factors In addition to the information set forth in this quarterly report, you should carefully consider the risk factors disclosed under the heading “Risk Factors” in Part I, Item 1A of the Annual Report. There have been no material changes to our risk factors from those included in the Annual Report. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Recent Sales and Issuances of Unregistered Securities The Company has not sold any securities within the period covered by this quarterly report that were not registered under the Securities Act. Use of Proceeds from Registered Securities On February 23, 2026, we closed our IPO in which we issued and sold 4,000,000 shares of common stock, and on March 26, 2026, as part of our IPO, we closed on a partial exercise of overallotment option in which we issued and sold 58,477 shares of common stock. The shares sold in our IPO were registered under the Securities Act pursuant to (i) our Registration Statement on Form S-1, as amended (File No. 333-291913), which was declared effective by the SEC on January 30, 2026, and (ii) our Registration Statement on Form S-1MEF (File No. 333-293601), which became effective automatically upon filing (collectively, the “Registration Statements”). Our shares of common stock were sold at an IPO price of $6.00 per share, which generated net proceeds of approximately $21.5 million after deducting underwriting discounts and commissions of approximately $1.7 million, expenses paid to or for underwriters of approximately $0.4 million, and other expenses of approximately $0.8 million. We incurred offering expenses of approximately $2.9 million. From the effectiveness of the Registration Statements to March 31, 2026, we used approximately $4.9 million of the net proceeds to fund operating expenses, including personnel-related costs and product development, repay outstanding indebtedness, and for working capital and general corporate purposes. There has been no material change in our planned use of net proceeds from our IPO as described under the heading “Use of Proceeds” in our final prospectus, filed with the SEC on February 20, 2026 pursuant to Rule 424(b)(4) under the Securities Act. The Benchmark Company, LLC acted as representative of the underwriters. Issuer Purchases of Equity Securities We have not performed any stock repurchases on our capital stock in any month within the quarter covered by this quarterly report. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information None . 9 Item 6. Exhibits The following is a list of exhibits filed as a part of this quarterly report: Exhibit Number Description of Document 3.1 Second Amended and Restated Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement on Form S-1/A filed with the SEC on January 26, 2026) 3.2 Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.5 to the Company’s Registration Statement on Form S-1/A filed with the SEC on January 26, 2026) 10.1 2026 Equity Incentive Plan, dated January 8, 2026 (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1/A filed with the SEC on January 26, 2026) 31.1* Certification of our Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of our Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of our Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File - The cover page XBRL tags are embedded within the Inline XBRL document and contained in Exhibit 101. * Filed herewith. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 14th day of May 2026. RANK ONE COMPUTING CORPORATION By: /s/ B. Scott Swann Name: B. Scott Swann Title: Chief Executive Officer (Principal Executive Officer) By: /s/ Cody Barnes Name: Cody Barnes Title: Chief Financial Officer (Principal Financial and Accounting Officer) 11