Q/C Technologies, Inc. (QCLS) 10-K Summary
Business Context and Reporting Period
Reporting Period: Fiscal year ended December 31, 2025.
Company Overview: Q/C Technologies, Inc. (formerly TNF Pharmaceuticals, Inc.) is a Delaware corporation that recently pivoted from a legacy pharmaceutical business to a focus on energy-efficient blockchain and cryptocurrency infrastructure via quantum-class laser-based computing.
Strategic Shift: In September 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 (LPUs), specifically the qc-LPU100. The Company is evaluating the divestiture of its legacy pharmaceutical assets (Isomyosamine and Supera-CBD) to fund this new strategy.
Operational Status: The Company is pre-revenue with only two full-time employees as of December 31, 2025. It relies heavily on third-party contractors and consultants.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(11,627,122) | $(23,359,334) |
| Net Loss Attributable to Common Stockholders | $(14,984,446) | $(27,161,219) |
| Operating Expenses | $9,847,357 | $10,168,790 |
| Cash and Cash Equivalents (Year End) | $986,996 | $173,154 |
| Marketable Securities (Year End) | $14,801,267 | $8,345,082 |
| Working Capital | $11,048,516 | $2,710,626 |
| Stockholders' Equity | $21,751,675 | $9,789,740 |
| Accumulated Deficit | $(144,122,733) | $(129,138,286) |
Liquidity: Management believes current resources are sufficient to fund operations for at least the next twelve months, though the Company has a history of operating losses and relies on equity financing.
Material Changes vs. Prior Period
- Net Loss Reduction: Net loss decreased by approximately 50% to $11.6 million in 2025 compared to $23.4 million in 2024. This improvement was driven by a reduction in non-cash losses related to warrant liabilities and preferred stock issuance expenses, which were significant in 2024 but absent or reduced in 2025.
- Acquisition of LPU Holdings: In September 2025, the Company acquired LPU Holdings LLC for a total purchase price of approximately $14.1 million (cash, Series I Preferred Stock, and contingent consideration). This created a new "Computing Technology" segment.
- Impairment Charges: The Company recorded a $1.5 million impairment loss on its investment in Oravax Medical, Inc., and a $1.5 million loss on the change in fair value of contingent consideration related to the LPU acquisition.
- Stock-Based Compensation: Increased by 105% to $2.17 million in 2025, primarily due to new grants of restricted stock units (RSUs) and options to directors, staff, and service providers.
- Capital Structure: The Company completed a 1-for-100 reverse stock split in September 2025. It also issued Series H Preferred Stock in a private placement raising approximately $7 million gross proceeds.
Guidance, Outlook, and Risks
Outlook: The Company does not anticipate generating revenue in the near term. Future revenue is expected to come from hardware sales, leasing arrangements, and service-based offerings related to the qc-LPU100. The Company plans to pursue beta deployments and hardware certifications in the intermediate term.
Management Commentary: Management emphasizes the strategic transition to laser-based computing to address energy consumption and scalability issues in blockchain and AI. The legacy pharmaceutical assets are being evaluated for divestiture.
Key Risks:
- Going Concern: While management believes it has sufficient liquidity for 12 months, the Company has a history of losses and requires substantial additional funding to commercialize its technology.
- Technology Execution: The qc-LPU100 is in early-stage prototype development. There is no assurance it will achieve performance targets, gain market acceptance, or be manufactured at scale.
- Regulatory Environment: The Company faces evolving regulations regarding cryptocurrency, blockchain, export controls (ITAR/EAR), and AI. Legacy pharmaceutical assets face FDA regulatory hurdles.
- Intellectual Property: The business relies heavily on an exclusive license from LightSolver Ltd. Disputes or termination of this license would materially impair operations.
- Preferred Stock Obligations: Outstanding Series G and Series H Preferred Stock carry dividends (7% to 10% annually) and complex conversion/redemption features that could result in significant dilution or cash outflows.
Investor Verification Checklist
- Capital Runway: Verify the sufficiency of the $15.8 million in liquid assets (cash + marketable securities) against the projected burn rate for prototype development and commercialization.
- Preferred Stock Terms: Review the specific conversion prices, dividend rates, and redemption triggers for Series G and Series H Preferred Stock to assess potential dilution and cash obligations.
- LightSolver License: Confirm the terms of the exclusive global licensing agreement with LightSolver Ltd., including royalty obligations and termination clauses.
- Contingent Consideration: Monitor the $10.9 million contingent consideration liability related to the LPU acquisition and the milestones required to trigger payments.
- Legacy Asset Divestiture: Track progress on the potential sale or licensing of Isomyosamine and Supera-CBD assets to fund the new strategy.
- Stock Volatility: Note the history of reverse stock splits and the impact of full-ratchet anti-dilution provisions on existing warrant and preferred stock holders.