CID Holdco, Inc. (DAIC) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. CID Holdco, Inc. (formerly SEE ID Inc., dba Dot AI) is an emerging growth company and smaller reporting company focused on Industrial IoT, asset tracking, and AI-driven enterprise solutions. The company consummated a business combination with ShoulderUp Technology Acquisition Corp. on June 18, 2025. Operations include hardware manufacturing in Puerto Rico and software development teams in the U.S. and India.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 (Revised) |
|---|---|---|
| Revenue | $12,214 | $352,498 |
| Gross Profit | $9,548 | $335,420 |
| Gross Margin | 78.2% | 95.2% |
| Net Loss | $(4,465,168) | $(1,284,558) |
| Loss Per Share (Basic/Diluted) | $(0.15) | $(0.11) |
| Cash and Equivalents | $853,728 | $344,902 |
| Working Capital Deficit | $(5,828,944) | Not Reported |
| Total Debt (Short-term) | $1,477,285 | N/A |
Note: Total Short-term debt includes $1,127,289 in third-party debt and $349,996 in related party loans.
Material Changes vs. Prior Period
- Revenue Collapse: Revenue decreased 96.5% to $12,214, driven by the absence of one-time product specification development fees ($250,000) and exclusivity agreement amortization ($98,161) recognized in Q1 2025.
- Operating Expense Surge: Total operating expenses increased 98.3% to $4.1 million. General and Administrative (G&A) expenses rose 291.2% to $2.4 million, primarily due to $1.28 million in incremental costs associated with operating as a public company (legal, audit, board fees).
- Loss Expansion: Net loss increased 247.6% to $4.47 million, reflecting higher operating costs and interest expense ($365k) without the offsetting gain from the change in fair value of SAFE notes seen in the prior year.
- Balance Sheet Deterioration: The company moved from positive shareholders' equity ($239k) at year-end 2025 to a deficit of $(4.09 million) by March 31, 2026. Accounts receivable dropped significantly from $3.6M to $102k, while inventory increased by $892k.
Outlook, Risks, and Subsequent Events
- Going Concern Warning: Management has raised substantial doubt about the company's ability to continue as a going concern within one year due to recurring losses, a working capital deficit, and the need for additional financing.
- Subsequent Financing (White Lion): On April 17, 2026, the company entered into a $10M equity purchase facility and a $2.875M senior secured convertible note agreement with White Lion Capital. As of May 7, 2026, two closings totaling $460,000 in proceeds have occurred. Proceeds are restricted to servicing existing debt to J.J. Astor & Co.
- SEPA Termination: The company terminated its $50M Standby Equity Purchase Agreement with New Circle Principal Investment LLC in May 2026.
- Internal Control Weaknesses: The company identified material weaknesses in internal controls over financial reporting, specifically regarding accounting personnel sufficiency and fair value calculation reviews.
- Litigation: The company is defending a lawsuit filed by a former founder alleging breach of employment agreement and tortious interference. No loss has been accrued as the outcome is not probable.
Investor Verification Checklist
- Liquidity Runway: Verify the sufficiency of the $853k cash balance against the $5.8M working capital deficit and upcoming debt service obligations.
- Debt Covenants: Review the terms of the J.J. Astor & Co. loan and the new White Lion notes, specifically the requirement to use new financing proceeds to pay down senior debt.
- Revenue Sustainability: Assess the ability to generate recurring revenue without the one-time fees that comprised the majority of Q1 2025 revenue.
- Dilution Risk: Evaluate the potential dilution from the White Lion equity facility, convertible notes, and outstanding warrants (15.6M warrants).
- Internal Controls: Monitor the remediation plan for the identified material weaknesses in financial reporting and fair value calculations.