Rank One Computing Corp 10-Q

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