Q/C Technologies, Inc. (QCLS) - 10-Q Summary for Period Ended September 30, 2025
Business Context and Reporting Period
This is a Quarterly Report (Form 10-Q) for Q/C Technologies, Inc. (formerly TNF Pharmaceuticals, Inc.), covering the period ended September 30, 2025. The Company recently executed a strategic pivot from pharmaceutical development (Isomyosamine and Supera-CBD) to energy-efficient blockchain and cryptocurrency infrastructure using laser-based computing (qc-LPU100). On September 2, 2025, the Company acquired 100% of LPU Holdings LLC and entered into an exclusive global licensing agreement with LightSolver Ltd. to deploy laser processing units. The Company changed its name and ticker symbol to Q/C Technologies, Inc. (QCLS) effective September 25, 2025.
Key Financial Metrics
| Metric | Q3 2025 (Three Months) | YTD 2025 (Nine Months) | YTD 2024 (Nine Months) |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(2,811,388) | $(5,732,326) | $(21,295,080) |
| Net Loss Attributable to Common Stockholders | $(3,713,290) | $(8,424,093) | $(24,025,339) |
| Operating Expenses | $1,788,652 | $6,133,109 | $7,979,907 |
| Cash and Cash Equivalents (Sept 30, 2025) | $6,904,185 | ||
| Marketable Securities (Sept 30, 2025) | $3,091,772 | ||
| Working Capital (Sept 30, 2025) | $4,612,746 | ||
| Stockholders' Equity (Sept 30, 2025) | $14,320,390 |
Material Changes vs. Prior Period
- Strategic Pivot: The Company shifted focus from pharmaceuticals to laser-based computing, resulting in the acquisition of LPU Holdings and a $14.1 million technology license asset (including $9.4 million contingent consideration).
- Capital Structure: Significant equity activity occurred in Q3 2025. The Company raised approximately $6.7 million through the issuance of Series H Preferred Stock and $2.7 million from warrant exercises. Series F and Series F-1 Preferred Stock were fully converted to common stock during the quarter.
- Loss Reduction: Net loss for the nine months ended September 30, 2025, decreased significantly to $5.7 million compared to $21.3 million in the prior year period. This improvement is largely due to the absence of large non-cash losses on the issuance of preferred stock and changes in fair value of warrant liabilities that impacted the 2024 results.
- Operating Expenses: Total operating expenses decreased by approximately $1.8 million year-over-year (YTD), driven by reduced personnel costs and lower stock-based compensation.
Guidance, Outlook, and Risks
Outlook: Management believes current financial resources ($10 million in cash and marketable securities) are sufficient to fund operations for the next 12 months, alleviating the "substantial doubt about going concern" previously noted as of June 30, 2025. The Company plans to finalize qc-LPU100 prototypes, conduct benchmarking, and seek strategic partnerships over the next 12 months, with beta unit launches anticipated in the second half of 2026.
Risks and Contingencies:
- Technology Validation: The new laser-based computing technology is in early-stage development. There is no assurance that prototypes will meet performance targets or achieve commercial adoption.
- Licensing Dependency: The business model relies entirely on an exclusive license with LightSolver Ltd. Termination or disputes regarding this agreement would materially impair operations.
- Capital Requirements: Significant additional capital will be required for prototype development, certification, and commercialization. Failure to raise funds could force delays or cessation of operations.
- Preferred Stock Obligations: The Company has outstanding Series G, H, and I Preferred Stock with dividend obligations (7-15% annually) and potential redemption features that could strain liquidity if triggering events occur.
- Regulatory Environment: The Company faces regulatory risks related to cryptocurrency, blockchain, and hardware export controls (ITAR/EAR).
Key Facts for Investor Verification
- Going Concern Status: Verify the Company's ability to maintain liquidity given the high burn rate and the need for future capital raises to fund the new technology strategy.
- Acquisition Valuation: Review the $14.1 million purchase price for the LPU acquisition, specifically the $9.4 million contingent consideration liability and the indefinite-lived intangible asset classification.
- Preferred Stock Terms: Examine the terms of Series G, H, and I Preferred Stock, including dividend rates, conversion prices (subject to full ratchet anti-dilution), and redemption triggers.
- Revenue Timeline: Assess the feasibility of the management's timeline for generating revenue from laser-based computing, noting that no revenue is expected in the near term.
- Legal Proceedings: Monitor the status of the "Second Raymond Akers Action" whistleblower lawsuit, which remains in the discovery phase.