SeeQC, Inc. 10-Q

Item 1. Financial Statements. SEEQC, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash $ 18,116 $ 27,967 Accounts receivable 1,143 789 Contract assets 261 121 Prepaid expenses and other current assets 234 111 Total current assets 19,754 28,988 Property and equipment, net 5,190 4,084 Finance right-of-use assets 524 961 Operating right-of-use assets 1,433 1,436 Deferred offering costs 2,650 858 Other assets 288 190 Total assets $ 29,839 $ 36,517 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,218 $ 1,048 Accrued expenses and other current liabilities 2,086 1,602 Contract liabilities 349 — Current portion of finance lease liabilities 139 223 Total current liabilities 4,792 2,873 Finance lease liabilities, net of current portion 225 489 Operating lease liabilities 1,752 1,579 Deferred tax liability — 92 Total liabilities $ 6,769 $ 5,033 Commitments and contingencies (Note 14) Stockholders’ equity: Series X convertible preferred stock, $ 0.0001 par value per share; 1,012,625 shares authorized as of June 30, 2026 and December 31, 2025; 779,240 and 769,114 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively (aggregate liquidation preference $ 19,238 and $ 18,988 as of June 30, 2026 and December 31, 2025, respectively) — — Series A-2 convertible preferred stock, $ 0.0001 par value per share; 3,184,572 shares authorized, issued, and outstanding as of June 30, 2026 and December 31, 2025 (aggregate liquidation preference $ 22,568 as of June 30, 2026 and December 31, 2025) — — Series SA-2 convertible preferred stock, $ 0.0001 par value per share; 1,745,625 shares authorized, issued, and outstanding as of June 30, 2026 and December 31, 2025 (aggregate liquidation preference $ 9,896 as of June 30, 2026 and December 31, 2025) — — Series A-1 convertible preferred stock, $ 0.0001 par value per share; 1,059,058 shares authorized, issued and outstanding as of June 30, 2026 and December 31, 2025 (aggregate liquidation preference $ 5,362 as of June 30, 2026 and December 31, 2025) — — 1 SEEQC, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued) (In thousands, except share and per share amounts) June 30, 2026 December 31, 2025 Series A convertible preferred stock, $ 0.0001 par value per share; 2,652,734 shares authorized, issued and outstanding as of June 30, 2026 and December 31, 2025 (aggregate liquidation preference $ 17,220 as of June 30, 2026 and December 31, 2025) — — Series Seed-2 convertible preferred stock, $ 0.0001 par value per share; 1,099,412 shares authorized, issued and outstanding as of June 30, 2026 and December 31, 2025 (aggregate liquidation preference $ 4,033 as of June 30, 2026 and December 31, 2025) — — Series Seed-1 convertible preferred stock, $ 0.0001 par value per share; 1,536,006 shares authorized, issued and outstanding as of June 30, 2026 and December 31, 2025 (aggregate liquidation preference $ 2,827 as of June 30, 2026 and December 31, 2025) — — Common stock, $ 0.0001 par value per share; 28,487,198 shares authorized as of June 30, 2026 and December 31, 2025; 10,761,714 and 10,670,829 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 1 1 Additional paid-in capital 88,669 87,273 Accumulated other comprehensive loss ( 329 ) ( 129 ) Accumulated deficit ( 65,271 ) ( 55,661 ) Total stockholders’ equity 23,070 31,484 Total liabilities and stockholders’ equity $ 29,839 $ 36,517 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 SEEQC, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 937 $ 472 $ 1,793 $ 1,450 Operating costs and expenses: Cost of revenue 609 426 1,207 1,288 Research and development 2,595 2,845 4,837 4,678 Selling, general and administrative 3,108 1,512 6,175 2,369 Grant income ( 574 ) ( 683 ) ( 648 ) ( 1,100 ) Total operating costs and expenses 5,738 4,100 11,572 7,234 Loss from operations $ ( 4,801 ) $ ( 3,628 ) $ ( 9,778 ) $ ( 5,785 ) Other expenses (income): Interest income ( 126 ) ( 108 ) ( 282 ) ( 213 ) Finance leases interest expense 12 28 35 57 Other expense (income), net - 22 - 16 Loss before income tax expense $ ( 4,688 ) $ ( 3,570 ) $ ( 9,531 ) $ ( 5,645 ) Income tax expense 50 - 79 - Net loss $ ( 4,738 ) $ ( 3,570 ) $ ( 9,610 ) $ ( 5,645 ) Other comprehensive income (loss): Foreign currency translation adjustment, net of taxes 54 87 ( 200 ) 118 Total other comprehensive income (loss) 54 87 ( 200 ) 118 Total comprehensive loss $ ( 4,684 ) $ ( 3,483 ) $ ( 9,810 ) $ ( 5,527 ) Net loss per share attributable to common stockholders – basic and diluted $ ( 0.44 ) $ ( 0.34 ) $ ( 0.90 ) $ ( 0.53 ) Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted 10,697,159 10,620,333 10,684,069 10,613,166 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 SEEQC, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (In thousands, except share amounts) Series X Series A-2 Series SA-2 Series A-1 Series A Series Seed-2 Series Seed-1 Common Stock Additional Accumulated Other Total Stockholders’ Shares Value Shares Value Shares Value Shares Value Shares Value Shares Value Shares Value Shares Par Value Paid-in Capital Comprehensive Loss Accumulated Deficit Equity (Deficit) Balance as of December 31, 2024 - - 1,773,460 - 1,745,625 - 1,059,058 - 2,652,734 - 1,099,412 - 1,536,006 - 10,577,374 $ 1 $ 56,382 $ ( 247 ) $ ( 43,462 ) $ 12,674 Issuance of Series A-2 preferred stock, net of $ 10 issuance costs - - 1,270,001 - - - - - - - - - - - - - 8,990 - - 8,990 Stock options exercised - - - - - - - - - - - - - - 34,717 - 52 - - 52 Stock-based compensation expense - - - - - - - - - - - - - - - - 55 - - 31 Foreign currency translation adjustment, net of taxes - - - - - - - - - - - - - - - - - 31 - 31 Net loss - - - - - - - - - - - - - - - - - - ( 2,075 ) ( 2,075 ) Balance as of March 31, 2025 - - 3,043,461 - 1,745,625 - 1,059,058 - 2,652,734 - 1,099,412 - 1,536,006 - 10,612,091 $ 1 $ 65,479 $ ( 216 ) $ ( 45,537 ) $ 19,727 Issuance of Series A-2 preferred stock - - 141,111 10 - - - - - - - - - - - - 1,000 - - 1,010 Stock options exercised - - - - - - - - - - - - - - 37,500 - 23 - - 23 Stock-based compensation expense - - - - - - - - - - - - - - - - 1,184 - - 1,184 Foreign currency translation adjustment, net of taxes - - - - - - - - - - - - - - - - - 87 - 87 Net loss - - - - - - - - - - - - - - - - - - ( 3,570 ) ( 3,570 ) Balance as of June 30, 2025 - - 3,184,572 10 1,745,625 - 1,059,058 - 2,652,734 - 1,099,412 - 1,536,006 - 10,649,591 $ 1 $ 67,686 $ ( 129 ) $ ( 49,107 ) $ 18,461 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Series X Series A-2 Series SA-2 Series A-1 Series A Series Seed- 2 Series Seed- 1 Common Stock Additional Accumulated Other Total Stockholders’ Shares Value Shares Value Shares Value Shares Value Shares Value Shares Value Shares Value Shares Par Value Paid-in Capital Comprehensive Loss Accumulated Deficit Equity (Deficit) Balance as of December 31, 2025 769,114 - 3,184,572 - 1,745,625 - 1,059,058 - 2,652,734 - 1,099,412 - 1,536,006 - 10,670,829 $ 1 $ 87,273 $ ( 129 ) $ ( 55,661 ) $ 31,484 Issuance of Series X preferred stock, net of $ 0 issuance costs 10,126 - - - - - - - - - - - - - - - 257 - - 257 Stock options exercised - - - - - - - - - - - - - - 10 - - - - - Stock-based compensation expense - - - - - - - - - - - - - - - - 333 - - 333 Foreign currency translation adjustment, net of taxes - - - - - - - - - - - - - - - - - ( 254 ) - ( 254 ) Net loss - - - - - - - - - - - - - - - - - - ( 4,872 ) ( 4,872 ) Balance as of March 31, 2026 779,240 - 3,184,572 - 1,745,625 - 1,059,058 - 2,652,734 - 1,099,412 - 1,536,006 - 10,670,839 $ 1 $ 87,863 $ ( 383 ) $ ( 60,533 ) $ 26,948 Issuance of Series X preferred stock, net of $ 0 issuance costs - - - - - - - - - - - - - - - - - - - - Stock options exercised - - - - - - - - - - - - - - 49,737 - 40 - - 40 Vesting of restricted stock - - - - - - - - - - - - - - 41,138 - - - - - Stock-based compensation expense - - - - - - - - - - - - - - - - 766 - - 766 Foreign currency translation adjustment, net of taxes - - - - - - - - - - - - - - - - - 54 - 54 Net loss - - - - - - - - - - - - - - - - - - ( 4,738 ) ( 4,738 ) Balance as of June 30, 2026 779,240 - 3,184,572 - 1,745,625 - 1,059,058 - 2,652,734 - 1,099,412 - 1,536,006 - 10,761,714 $ 1 $ 88,669 $ ( 329 ) $ ( 65,271 ) $ 23,070 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 SEEQC, INC. AND SUBSIDIARIES UNAUDITED CONSENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 9,610 ) $ ( 5,645 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 674 484 Amortization of finance lease right-of-use assets 47 44 Stock-based compensation expense 1,099 1,239 Non-cash operating lease expense 3 86 Non-cash finance lease interest expense 30 51 Deferred tax asset ( 163 ) — Change in operating assets and liabilities: Accounts receivable ( 362 ) 636 Contract assets ( 140 ) ( 38 ) Prepaid expenses and other current assets ( 124 ) ( 395 ) Other assets ( 27 ) ( 120 ) Accounts payable 667 56 Accrued expenses and other current liabilities ( 262 ) ( 16 ) Deferred revenue 349 ( 59 ) Operating lease liabilities 173 ( 128 ) Net cash used in operating activities $ ( 7,646 ) $ ( 3,805 ) Cash flows from investing activities: Purchases of property and equipment $ ( 1,410 ) $ ( 359 ) Net cash flow used in investing activities $ ( 1,410 ) $ ( 359 ) Cash flows from financing activities: Proceeds from issuance of Series A-2 preferred stock $ — $ 9,990 Proceeds from issuance of Series X preferred stock 257 — Payment of deferred offering costs ( 1,240 ) — Proceeds from the exercise of stock options 40 76 Principal payment on finance leases ( 280 ) ( 150 ) Net cash (used in) provided by financing activities $ ( 1,223 ) $ 9,916 Effect of exchange rate changes on cash 428 104 Net (decrease) increase in cash ( 9,851 ) 5,856 Cash at beginning of year 27,967 9,584 Cash at end of period $ 18,116 $ 15,440 Supplemental disclosure of cash flow information: Deferred financing costs in accrued expenses $ 1,410 $ 10 Reclassification of finance right-of-use asset to property and equipment upon purchase $ 298 $ — Property and equipment in accrued expenses $ 6 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 6 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 1. Description of the Business and Basis of Presentation Description of the Business SeeQC, Inc. and its consolidated subsidiaries (“SEEQC”, or the “Company”) were formed to address the central challenge of realizing the significant commercial potential of quantum computing: building scalable systems capable of fault-tolerant operation. The Company’s chip-based solutions represent a digital infrastructure layer within the quantum computing value chain, designed to enable hardware developers and integrators across multiple qubit modalities to advance their systems toward scalable, fault-tolerant architectures. The Company’s technology tightly integrates quantum and classical computing environments. The Company is headquartered in Elmsford, New York, and has subsidiaries located in the United Kingdom and Italy. SEEQC, Inc was incorporated as a Delaware corporation in 2018 by Hypres, Inc. (“Hypres” or the “Former Parent”), a leading developer of superconductor electronics. On April 22, 2019 (the “Effective Date”), the Company entered into an asset transfer agreement (or the “ATA Agreement”) with Hypres, pursuant to which Hypres agreed to transfer and assign to the Company certain intellectual property and other related assets in exchange for 6,400,000 shares of SEEQC Inc.’s common stock, par value $ 0.0001 per share, which was distributed to Hypres stockholders and warrant holders on a pro rata basis according to the fair value of the equity held in Hypres (the “Asset Transfer”). The Company determined that the Asset Transfer represented a transaction between entities under common control. As a result, the assets and liabilities were transferred from Hypres to the Company at Hypres’ carrying amounts on the Effective Date. As part of the ATA Agreement, the Company acquired $ 0.3 million of fixed assets and assumed a liability of $ 0.4 million due to Hypres for organizational expenses incurred as part of the formation of the Company. Liquidity and Going Concern Since its inception, the Company has funded its operations primarily with proceeds from issuances of its convertible preferred stock. The Company has incurred recurring losses and negative operating cash flows since its inception, including a net loss of $ 4.7 million and $ 3.6 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and $ 9.6 million and $ 5.6 million for the six months ended June 30, 2026 and June 30, 2025, respectively. As of June 30, 2026 and December 31, 2025, the Company had an accumulated deficit of $ 65.3 million and $ 55.7 million, respectively. The Company expects to incur additional losses as it invests in the research and development of its digital quantum computing platform for commercial businesses. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company currently does not have sufficient resources to meet its obligations and sustain operations for the twelve month period following the issuance of these unaudited condensed consolidated financial statements, which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s plans include obtaining additional equity financing from new investors, such as an initial public offering, to meet its ongoing business objectives and its working capital and capital expenditure needs for at least the next twelve months from the date of issuance of the unaudited condensed consolidated financial statements. The Company will ultimately need to obtain additional equity financing to support its operations. However, additional funds may not be available on terms favorable to the Company or at all. Should the Company be unable to obtain adequate financing in the near term, the Company’s business, results of operations, liquidity and financial condition would be materially and negatively affected. There is no assurance that additional financing will be available when needed or that management of the Company will be able to obtain financing on terms acceptable to the Company. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 7 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information. These consolidated financial statements include the accounts of SEEQC, Inc., and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2025, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s condensed consolidated balance sheet as of June 30, 2026, the condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2026 and 2025, condensed consolidated statements of shareholders’ equity (deficit) for the six months ended June 30, 2026 and 2025 and the condensed consolidated statements of cash flows for the six months ended June 30, 2026 and 2025. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended December 31, 2025. The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in unaudited condensed financial statements prepared in accordance with US GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. The results for the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period. The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2025. There have been no changes to its significant accounting policies. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which is intended to enhance transparency into the nature and function of expenses. The amendments require that on an annual and interim basis, entities disclose disaggregated operating expense information about specific categories, including purchases of inventory, employee compensation, depreciation, amortization and depletion. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company will evaluate the impact of the guidance on its financial statements in advance of the adoption date. In June 2025, the FASB issued ASU 2025-03 — Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in a Variable-Interest Entity . This standard clarifies that when a business combination is effected primarily by exchanging equity interests and the legal acquiree is a variable-interest entity (“VIE”) that meets the definition of a business, entities must identify the accounting acquirer using the factors in ASC 805-10-55-12 through 55-15, rather than relying solely on the VIE consolidation model. The ASU is effective for years beginning after December 15, 2026, but early adoption is permitted. This ASU should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of this standard on its financial statements and disclosures. 8 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 3. Revenue Recognition The Company’s revenue from contracts with customers by type of contract is summarized as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Fixed price $ 819 $ 472 $ 1,393 $ 1,405 Cost-reimbursable 118 — 400 45 Total revenue from customers $ 937 $ 472 $ 1,793 $ 1,450 The following table summarizes the timing of revenue recognition from contracts with customers (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue recognized at a point in time $ 741 $ 360 $ 1,157 $ 1,092 Revenue recognized over time 196 112 636 358 Total revenue from customers $ 937 $ 472 $ 1,793 $ 1,450 Contract Balances from Contracts with Customers As of June 30, 2026 and December 31, 2025, the Company recognized $ 0.3 million and $ 0.1 million of contract assets, respectively. The contract asset is reclassified to accounts receivable when the customer is invoiced based on the contractual billing schedule. Contract liabilities represent the dollar value of funded orders for work which has been invoiced or paid for and has not been performed. Contract liabilities activities are summarized as follows (in thousands): As of June 30, 2026 As of June 30, 2025 Balance at beginning of period $ — $ 579 Recognition of revenue — — Deferral of revenue 349 ( 59 ) Balance at end of period $ 349 $ 520 As of June 30, 2026, the Company had $ 0.3 million of deferred revenue recorded as a contract liability on its condensed consolidated balance sheet. As of December 31, 2025, the Company had no deferred revenue recorded on its condensed consolidated balance sheet. 9 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 4. Property and Equipment Property and equipment, net consists of the following as of the following periods (in thousands): As of June 30, 2026 As of December 31, 2025 Machinery and equipment $ 11,936 $ 11,505 Furniture and fixtures 108 108 Computer network equipment 36 36 Leasehold improvements 1,091 1,108 Construction in progress 2,258 921 Total property and equipment 15,429 13,678 Less: accumulated depreciation ( 10,239 ) ( 9,594 ) Property and equipment, net $ 5,190 $ 4,084 Depreciation expense for the three months ended June 30, 2026 and June 30, 2025 was $ 0.4 million and $ 0.3 million, respectively. Depreciation expense for the six months ended June 30, 2026 and June 30, 2025 was $ 0.7 million and $ 0.5 million, respectively, and has been allocated and recognized within cost of revenue, research and development, and selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. 5. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following for the periods below (in thousands): As of June 30, 2026 As of December 31, 2025 Professional expenses $ 68 $ 296 Utilities 36 46 Deferred financing costs 1,410 787 Legal 2 67 Employee compensation 342 131 Other 228 275 Total accrued expenses and other current liabilities $ 2,086 $ 1,602 10 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 6. Convertible Preferred Stock The Company has issued Series Seed-1 Preferred Stock, Series Seed-2 Preferred Stock, Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series SA-2 Preferred Stock, and Series X Preferred Stock (collectively the “Preferred Stock”). During the first half of 2025, the Company issued and sold 1,411,112 shares of Series A-2 Preferred Stock at $ 7.09 per share for gross proceeds of $ 10.0 million. On November 25, 2025 the Company entered into a Series X Preferred Stock Purchase Agreement to issue Series X Preferred Stock with new and existing investors. The initial closing on November 25, 2025 consisted of the issuance and sale of 319,753 shares of Series X Preferred Stock at $ 24.6883 per share for an aggregate purchase price of $ 7.9 million. During November and December 2025, the Company completed additional closings for the issuance and sale of 449,361 shares of its Series X preferred stock at $ 24.6883 per share for an aggregate purchase price of $ 11.1 million. In January 2026, the Company issued and sold an additional 10,126 shares of its Series X preferred stock, at a price of $ 24.6883 per share for an aggregate purchase price of $ 0.3 million. Preferred Stock consisted of the following as of the periods below: June 30, 2026 Preferred Stock Shares Authorized Shares Issued and Outstanding Per share Liquidation Preference Aggregate Liquidation Preference Series Seed-1 1,536,006 1,536,006 $ 1.84 $ 2,827,019 Series Seed-2 1,099,412 1,099,412 $ 3.67 4,032,973 Series A-1 1,059,058 1,059,058 $ 5.06 5,362,328 Series A 2,652,734 2,652,734 $ 6.49 17,219,957 Series SA-2 1,745,625 1,745,625 $ 5.67 9,896,472 Series A-2 3,184,572 3,184,572 $ 7.09 22,567,788 Series X 1,012,625 779,240 $ 24.69 19,238,111 12,290,032 12,056,647 $ 81,144,648 December 31, 2025 Preferred Stock Shares Authorized Shares Issued and Outstanding Per share Liquidation Preference Aggregate Liquidation Preference Series Seed-1 1,536,006 1,536,006 $ 1.84 $ 2,827,019 Series Seed-2 1,099,412 1,099,412 $ 3.67 4,032,973 Series A-1 1,059,058 1,059,058 $ 5.06 5,362,328 Series A 2,652,734 2,652,734 $ 6.49 17,219,957 Series SA-2 1,745,624 1,745,625 $ 5.67 9,896,472 Series A-2 3,184,572 3,184,572 $ 7.09 22,567,788 Series X 1,012,265 769,114 $ 24.69 18,988,117 12,290,032 12,046,521 $ 80,894,654 Voting Each share of Preferred Stock has voting rights equal to an equivalent number of shares of common stock into which it is convertible and votes together as a single class with the common stock of the Company. 11 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 6. Convertible Preferred Stock (cont.) Dividends The holders of Preferred Stock are entitled to noncumulative dividends in preference to any dividend on the common stock when, as, and if declared by the Company’s board of directors and participate pro rata in any dividends paid on the common stock on an as-if-converted basis. Liquidation Preference In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Preferred Stock are also entitled to receive in preference to the holders of the common stock the greater of: a) a per share amount equal to their respective original purchase price plus any dividend declared but unpaid; or b) the amount to be paid on the common stock on an as-if-converted basis (the “Liquidation Amount”). The remaining assets would be distributed to the common stockholders. If the assets to be paid to the holders of Preferred Stock in a liquidation event are insufficient to cover the full Liquidation Amount of each class of Preferred Stock, each class of Preferred Stock would share ratably in the proceeds available for distribution. Conversion Each share of Preferred Stock is convertible, at the option of the holder, at any time after the date of issuance of such share, into shares of common stock as is determined by dividing the original purchase price of preferred stock by the conversion price in effect at the time of conversion for such series of preferred stock. Upon either (a) the closing of the sale of shares of common stock to the public at a price per share of at least $ 21.2598 in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $ 40 million of gross proceeds to the Company or (b) at such time when at least 66.67 % of the holders of Preferred Stock have specified by vote or written consent, the shares of Preferred Stock are also subject to mandatory conversion into shares of common stock, at the then effective conversion rate. As of June 30, 2026 and December 31, 2025, the conversion ratio for the Preferred Stock was one-to-one, as the conversion rate is based on the initial issuance price. The Company must keep available for issuance such number of common stock necessary to effect such conversion of all outstanding shares of the Preferred Stock. 7. Common Stock Holders of the Company’s convertible preferred stock and common stock are entitled to one vote per share . The voting, dividend, and liquidation rights of the holders of the common stock are subject to and qualified by the rights, powers and preferences of the holders of the Company’s convertible preferred stock. The Company had reserved shares of common stock for issuance in connection with the following, as of the below periods: As of June 30, 2026 As of December 31, 2025 Conversion of Series Seed-1 1,536,006 1,536,006 Conversion of Series Seed-2 1,099,412 1,099,412 Conversion of Series A-1 1,059,058 1,059,058 Conversion of Series A 2,652,734 2,652,734 Conversion of Series SA-2 1,745,625 1,745,625 Conversion of Series A-2 3,184,572 3,184,572 Conversion of Series X 779,240 769,114 Exercise of stock options 3,256,084 3,307,849 Common stock reserved for issuance 15,312,731 15,354,370 8. Stock-Based Compensation Effective April 3, 2019, the 2019 Equity Incentive Plan (the “Plan”) was established for the purpose of furthering the growth and success of the Company by enabling directors, officers, employees, and consultants to acquire shares of common stock of the Company. The Plan provides for the Company to grant incentive stock options or nonqualified stock options, restricted stock awards, and other stock-based awards. 12 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 8. Stock-Based Compensation (cont.) The maximum number of shares authorized for issuance under the Plan is 5,050,895 . The number of shares of common stock reserved for issuance under the Plan at any time is the maximum number of shares which may be purchased pursuant to outstanding options at that specific point in time. Shares that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards. As of June 30, 2026, 223,633 shares were available for future grants under the Plan. The Company typically grants stock options to employees and non-employees at exercise prices deemed by the Board to be equal to the fair value of the common stock at the time of grant. For accounting purposes, a retrospective fair value assessment of the common stock was performed for stock option grants to determine the fair value of the Company’s common stock and to calculate stock-based compensation expense. The reassessed values were based, in part, upon third-party valuations of the Company’s common stock prepared as of each grant date on a retrospective basis. Stock Options The stock options vest in accordance with specific option agreements and have a ten-year contractual term. The following table is a summary of activity for stock options for the six months ended June 30, 2026 (in thousands, except share and per share amounts): Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding as of January 1, 2026 3,307,849 $ 1.45 6.16 $ 37,188 Exercised ( 49,747 ) 0.78 $ 962 Forfeited ( 2,018 ) 1.69 Outstanding as of June 30, 2026 3,256,084 $ 1.46 5.69 $ 110,291 Exercisable or vested as of June 30, 2026 1,935,015 $ 1.28 5.14 $ 65,887 The aggregate intrinsic value represents the difference between the fair value of the Company’s common stock at the end of the year and the exercise price, multiplied by the quantity of the options. The 2025 Performance Options will vest in full upon either a change of control event, as defined within the Plan, or in the event of a transaction or series of transaction in which the Company completes a significant combination, acquisition or merger. Total compensation cost not yet recognized related to unvested stock options was $ 3.6 million as of June 30, 2026, of which $ 1.3 million is related to service based awards and is expected to be recognized over a weighted average period of 0.6 years and $ 2.3 million is related to the performance based awards which will not be recognized until either a change of control event or a transaction or series of transactions in which the Company completes a significant combination, acquisition or merger occurs. There were no options granted for the three and six months ended June 30, 2026 and 2025. 13 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 8. Stock-Based Compensation (cont.) Restricted Common Stock Awards The Company has granted restricted common stock awards with service and performance based vesting conditions to employees of the Company. Unvested shares of restricted common stock may not be sold or transferred by the holder, except for transfers for estate planning purposes in which the transferee agrees to remain bound by all restrictions set forth in the original common stock purchase agreement. These restrictions lapse over the vesting term of each award. On October 28, 2020, two of the Company’s Founders purchased 485,527 shares of the Company’s common stock at a purchase price of $ 1.45 per share, under the terms of a restricted stock award granted under the 2019 Plan (the “Founders Awards”). The Founders Awards are to vest in equal monthly installments over four years. In exchange for the shares, the Company received two partial-recourse promissory notes (the “Partial Recourse Notes”) from the Founders, whereby 50 % of the unpaid principal balance and accrued interest is collateralized by the Founders’ personal assets with the remaining half of the unpaid principal balance and accrued interest being collateralized by the underlying shares. The Partial Recourse Notes had a total principal amount of $ 0.7 million, equivalent to the fair value of the awards issued, with an annual interest rate of 0.38 %. The Company has accounted for the Partial Recourse Notes as non-recourse in their entirety. As such, the Partial Recourse Notes received by the Company as consideration for the issuance of the Founders Awards have been considered a stock option for accounting purposes, as the substance is similar to the grant of an option until the note is settled. The fair value of the Founder Awards issued in exchange for the Partial Recourse Notes was estimated on the grant date using the Black-Scholes option pricing model. The exercise price is the principal due on the Partial Recourse Note. In 2024 the Founders Awards fully vested and all related stock-based compensation expense was fully recognized. In October 2025, the Company granted 329,104 restricted common stock awards to an employee of which 164,552 shares are subject to service based vesting over four years and 164,552 are subject to vesting based on certain performance criteria. Of the 164,552 performance based restricted stock awards, 25 % are subject to vesting upon execution of two new commercial contracts and the remaining 75 % are subject to vesting upon the completion of certain liquidity events. As of June 30, 2026 and December 31, 2025, one of the performance criteria related to one of the awards has been achieved and the remainder are not deemed probable of being achieved, and as $ 0.4 million has been recorded as stock-based compensation expense associated with the performance awards. During the six months ended June 30, 2026 the Company recognized $ 0.2 million of stock based compensation expense associated with the service based portion of the award. In the first half of 2026, the Company granted 543,488 shares of restricted common stock which contain both performance and service-based vesting conditions, whereby the shares are subject to a four year service-based vesting schedule that does not commence until an exit event, defined as the expiration of the lockup period following an effective initial public offering. A summary of the activity of the restricted common stock under the Plan during the six months ended June 30, 2026 is as follows: Number of Shares Weighted Average Grant Date Fair Value Unvested as of January 1, 2026 $ 329,104 $ 10.60 Granted 543,488 20.41 Vested ( 41,138 ) 10.60 Forfeited ( 21,990 ) 33.90 Unvested as of June 30, 2026 $ 809,464 $ 12.82 Stock-based compensation expense for the three and six months ended June 30, 2026 and 2025, respectively, consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Research and development $ 164 $ 912 $ 331 $ 947 Selling, general, and administrative 603 271 768 292 Total stock-based compensation expense $ 767 $ 1,183 $ 1,099 $ 1,239 14 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 9. Leases The Company leases facilities for its fabrication, lab and office space, and equipment under its various lease agreements. The Company’s leases include fixed lease payments which may include escalation terms based on a fixed percentage or may vary based on an inflation index or other market adjustments. Escalations resulting from changes in inflation indices and market adjustments, as well as other lease costs that depend on the use of the underlying asset, are not considered lease payments when calculating the lease liability or ROU asset. Instead, such payments are accounted for as variable lease cost when the condition that triggers the variable payment becomes probable. Variable lease cost includes contingent rent payments for office space based on the percentage occupied by the Company in addition to common area charges and other charges that are variable in nature. Summary of Lease Cost The components of lease cost under ASC 842 are as follows for the below periods (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Finance lease cost: Amortization of finance lease right-of-use asset $ 19 $ 90 $ 52 $ 146 Interest on finance lease liabilities 12 32 30 64 Operating lease costs: Lease cost 114 41 227 89 Total lease cost $ 145 $ 163 $ 309 $ 299 Supplemental disclosure of cash flow information related to leases is as follows for the below periods (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 29 $ 42 $ 53 $ 90 Operating cash flows from finance leases $ 12 $ 32 $ 30 $ 64 Financing cash flows from finance leases $ 223 $ 126 $ 298 $ 241 The weighted-average remaining lease term and discount rate were as follows for the below periods: Six Months Ended June 30, 2026 2025 Weighted-average remaining lease term Finance leases 1.8 years 3.3 years Operating leases 9.6 years 0.8 years Weighted-average discount rate Finance leases 13.9 % 11.8 % Operating leases 15.3 % 10.3 % 15 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 9. Leases (cont.) The following table summarizes the minimum lease payments of the Company’s operating and finance lease liabilities as of June 30, 2026 (in thousands): Operating Finance Remaining in 2026 $ ( 122 ) $ 88 2027 369 176 2028 380 152 2029 391 — 2030 403 — Thereafter 2,359 — Total future minimum lease payments $ 3,780 $ 416 Less: tenant improvement allowance — — Less: imputed interest ( 2,028 ) ( 52 ) Present value of lease liability 1,752 364 In December 2024, the Company executed a 3 -year lease of equipment expecting to commence in 2026 with expected future payments of approximately $ 1.3 million. As of June 30, 2026, the lease has not yet commenced. 10. Income Taxes For the three and six months ended June 30, 2026, the income tax provision recorded was $ 0.1 million, and for the three months and six months ended June 30, 2025, the income tax provision was de minimis and not recorded. The tax provision is primarily attributed to the uncertain tax position recorded in the foreign UK subsidiary. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates. The Company recorded a full valuation allowance as of June 30, 2026 and December 31, 2025. The Company expects that income tax expense will be due to operations in profitable foreign subsidiaries and its uncertain tax position. 11. Net Loss per Share The following table sets forth the computation of net loss per common share (in thousands except share and per share amounts): Three Months Ended June 30 Six Months Ended June 30 2026 2025 2026 2025 Net loss per share Numerator Net loss $ ( 4,738 ) $ ( 3,570 ) $ ( 9,610 ) $ ( 5,645 ) Numerator for basic and diluted net loss per share $ ( 4,738 ) $ ( 3,570 ) $ ( 9,610 ) $ ( 5,645 ) 16 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 11. Net Loss per Share (cont.) Three Months Ended June 30 Six Months Ended June 30 2026 2025 2026 2025 Denominator Weighted average common shares outstanding 10,697,159 10,620,333 10,684,069 10,613,166 Denominator for basic and diluted loss per share 10,697,159 10,620,333 10,684,069 10,613,166 Net loss per share Basic and diluted $ ( 0.44 ) $ ( 0.34 ) $ ( 0.90 ) $ ( 0.53 ) The Company’s convertible preferred stock are participating securities, which requires the application of the two-class method to calculate basic and diluted earnings per share. The two-class method does not apply during periods of net loss since preferred stockholders are not contractually obligated to share in net losses of the Company. Accordingly, no allocation of net loss was made to preferred stockholders during the three and six months ended June 30, 2026 and 2025. The Company’s potentially dilutive securities, which include convertible preferred stock and stock options to purchase common stock, have been excluded from the computations of diluted net loss per share as the effect would be antidilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: June 30, 2026 2025 Series Seed-1 (as converted to common stock) 1,536,006 1,536,006 Series Seed-2 (as converted to common stock) 1,099,412 1,099,412 Series A-1 (as converted to common stock) 1,059,058 1,059,058 Series A (as converted to common stock) 2,652,734 2,652,734 Series SA-2 (as converted to common stock) 1,745,625 1,745,625 Series A-2 (as converted to common stock) 3,184,572 3,184,572 Series X (as converted to common stock) 779,240 — Stock options to purchase common stock 3,256,084 3,362,773 Unvested restricted common stock 809,464 — 16,122,195 14,640,180 12. 401K Plan The Company sponsors a defined contribution plan under Section 401(k) of the Internal Revenue Code for its employees (the “401k Plan”). Participants can make voluntary contributions subject to certain Internal Revenue Code limitations. The Company matches 100 % of each employee’s contributions up to 4 % of an individual’s compensation or the limits set by the Internal Revenue Service. The Company’s contributions to the 401k Plan were $ 0.1 million for each of the three months ended June 30, 2026 and 2025. The Company’s contributions to the 401k Plan were $ 0.2 million for each of the six months ended June 30, 2026 and 2025, which is allocated and recognized within cost of revenue, research and development and selling, general and administrative of the condensed consolidated statements of operations and comprehensive loss. 17 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 13. Related-Party Transactions Partial Recourse Notes from the Founders On October 28, 2020, the Company entered into the Partial Recourse Notes with two of the Company’s Founders for an amount of $ 0.7 , million, which was used to allow the Founders to purchase 485,527 shares of common stock granted in the form of a restricted stock award under the 2019 Plan. The Partial Recourse Notes have a stated interest rate of 0.38 %, which is compounded annually, and matures upon the earlier of (i) the ninth anniversary from the date of the Partial Recourse Notes; (ii) a continuation of default for more than thirty days; (iii) the sale, transfer, or disposition of the shares; and (iv) a change in control of the Company. Further, the principal and accrued but unpaid interest of the Promissory Note is to be repaid prior to the Company becoming an issuer within the meaning of the Sarbanes-Oxley Act of 2022. As of June 30, 2026, the entire amount of the Partial Recourse Notes remained outstanding. See Note 8. 14. Commitments and Contingencies Leases The Company’s non-cancellable lease commitments are described in Note 9. Legal Proceedings The Company may, from time to time, become involved in ordinary and routine litigation incidental to its business. Management presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material effect on the Company’s consolidated financial position, results of operations or cash flows. Nevertheless, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include money damages and, in such event, could result in a material impact on the Company’s consolidated financial position, results of operations or cash flows for the period in which the ruling occurs. The Company is not currently aware of any indemnification or other claims and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements as of June 30, 2026 and December 31, 2025. Indemnification agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any indemnification arrangements that could have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of June 30, 2026 and December 31, 2025. 15. Segment Reporting The Company operates and tracks its results in one reportable segment. The Company’s CODM is its Chief Executive Officer . The CODM utilizes financial information presented on a consolidated basis to assess performance and to make key operating decisions such as the determination of resource allocations. The CODM also utilizes the Company’s consolidated long-range plan, which includes product development roadmaps and long-range consolidated financial models, as a key input to resource allocation, and monitors budget versus actual results using consolidated total income (loss) from operations. The CODM reviews consolidated measures of financial results with consolidated total income (loss) from operations as the primary measure of segment performance. The CODM does not review any measures of financial results beyond what is presented in the accompanying condensed consolidated statements of operations and comprehensive loss. 18 SEEQC, INC. AND SUBSIDIARIES Notes to the Unaudited Condensed Consolidated Financial Statements 15. Segment Reporting (cont.) Significant expenses within income (loss) from operations include cost of revenue, research and development, and selling, general and administrative expenses, which are each separately presented on the Company’s condensed consolidated statements of operations. The Company’s long-lived assets consist primarily of property, plant and equipment, net and right-of-use assets. The Company’s geographic information of revenue and long-lived assets is as follows: Revenue Revenue Long-Lived Assets Three Months Ended June 30, Six Months Ended June 30, As of June 30, As of December 31, 2026 2025 2025 2025 2026 2025 United States $ 937 $ 472 $ 1,793 $ 1,114 $ 6,602 $ 5,583 United Kingdom — — — 336 193 367 Italy — — — — 353 531 Total $ 937 $ 472 $ 1,793 $ 1,450 $ 7,147 $ 6,481 16. Subsequent Events The Company has evaluated subsequent events through the date these unaudited condensed consolidated financial statements were available to be issued, and determined there were no subsequent events reportable except as noted below. On August 25, 2026, the Company entered into the Settlement, Termination and Release Agreement (the “Settlement Agreement”) with Allegro Merger Corp., a Delaware corporation (“Allegro”) , SEEQC Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub”) and certain stockholders of Allegro pursuant to which the Company terminated the Agreement and Plan of Merger, dated January 16, 2026, by and among the Company, Allegro and Merger Sub (the “Merger Agreement”). Pursuant to the Settlement Agreement, if the Company consummates a “Trigger Event” (as defined in the Settlement Agreement, and generally covering certain equity financing and business combination transactions), the Company has agreed to (i) remit to Allegro up to $ 2.0 million for documented, reasonable third-party transaction expenses actually incurred by Allegro and (ii) issue shares of the Company’s common stock equal to $ 6.0 million in the aggregate based on a $ 1.3 billion pre-money valuation of the Company following the expiration of the lock-up restrictions applicable to the Company’s stockholders in connection with its initial public offering. 19