CFOR 10-Q
CapForce Inc. (CFOR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark one)
For the quarterly period ended
or
For the transition period from __________ to __________
Commission File Number
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) | |
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: (
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbols | Name of each exchange on which registered | ||
| OTC Markets Group, Inc. |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
shares of the Company’s common stock, par value $0.01 per share, were outstanding as of June 10, 2026.
CAPFORCE INC.
TABLE OF CONTENTS FOR FORM 10-Q
i
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In this quarterly report, we refer to CapForce Inc. as the “Company”, “CapForce”, “we”, “our” or “us”. All statements, other than statements of historical facts contained herein, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “believe”, “may”, “will”, “estimate”, “continue”, “anticipate”, “design”, “intend”, “expect” or the negative version of these words and similar expressions are intended to identify forward-looking statements.
We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in Part I Item 1A “Risk Factors” of our most recent annual report on Form 10-K. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances included herein may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| ● | our liquidity and working capital requirements, including our cash requirements over the next 12 months; |
| ● | our ability to execute upon and achieve the benefits of the Company’s new strategic direction; |
| ● | our ability to identify and realize the benefits of potential strategic transactions, including our recent acquisition of iCapX Sdn. Bhd. (“iCapX”); |
| ● | adverse effects on our business condition and results of operations from general economic and market conditions and overall fluctuations in the United States and international markets, including deteriorating market conditions due to investor concerns regarding inflation; |
| ● | the development of a market for our common stock, which is currently quoted on the OTC Expert Market and eligible only for unsolicited quotes, resulting in the absence of market makers for our common stock; |
| ● | if, once we are current in our filings with the U.S. Securities and Exchange Commission, our common stock is traded on a market other than the OTC Expert Market and a market in our common stock develops, actions by third parties to either sell or purchase our common stock in quantities may have a significant effect on our stock price; |
| ● | our use of proceeds from capital financing transactions; |
| ● | compliance with U.S. and international regulations applicable to our business; and |
| ● | our expectations regarding future revenue and expenses. |
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. These factors should not be construed as exhaustive and should be read in conjunction with our other disclosures, including but not limited to the risk factors described in Part I Item 1A “Risk Factors” of our most recent annual report on Form 10-K. Other risks may be described from time to time in our filings made under the securities laws. New risks may emerge from time to time. It is not possible for our management to predict all risks. All forward-looking statements in this quarterly report speak only as of the date made and are based on our current beliefs and expectations. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
ii
Part I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
CapForce Inc.
Condensed Consolidated Balance Sheets
(unaudited)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Investment in equity securities | ||||||||
| Intangible assets, net | ||||||||
| Other non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued compensation and benefits | ||||||||
| Accrued liabilities | ||||||||
| Short-term insurance financing | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (Note 10) | ||||||||
| Stockholders’ equity: | ||||||||
| Series D Preferred Stock, $ par value; shares authorized; designated; shares issued and outstanding at March 31, 2026 and December 31, 2025 | ||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Common stock issuable | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Accumulated other comprehensive income | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
1
CapForce Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2026 | 2025 | |||||||
| Revenue | ||||||||
| Listing sponsorship services | $ | $ | ||||||
| Total revenue | ||||||||
| Operating expenses | ||||||||
| Cost of services | ||||||||
| Research and development, net | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( |
) | ( |
) | ||||
| Other income (expense) | ||||||||
| Interest and other income, net | ||||||||
| Interest expense | ( |
) | ( |
) | ||||
| Foreign currency transaction gains | ||||||||
| Total other income (expense) | ||||||||
| Loss before income taxes | ( |
) | ( |
) | ||||
| Provision for income taxes | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Net loss allocated to preferred stockholders | ||||||||
| Net loss available to common stockholders | $ | ( |
) | $ | ( |
) | ||
| Loss per share attributable to common stockholders | ||||||||
| Basic | $ | ( |
) | $ | ( |
) | ||
| Diluted | $ | ( |
) | $ | ( |
) | ||
| Weighted average shares outstanding | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Other comprehensive loss - foreign currency translation | ( |
) | ||||||
| Comprehensive loss | $ | ( |
) | $ | ( |
) | ||
See accompanying notes to unaudited condensed consolidated financial statements.
2
CapForce Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
| Common Stock | Preferred Stock | Additional | Common | Accumulated Other Comprehensive | ||||||||||||||||||||||||||||||||
| Number of Shares |
Amount | Number of Shares |
Amount | Paid-in Capital |
Stock Issuable |
Income (Loss) |
Accumulated Deficit |
Total | ||||||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
| Stock compensation expense | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of RSUs | - | ( |
) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Balances at March 31, 2025 | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
| Balances at December 31, 2025 | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
| Stock compensation expense | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of RSUs | - | ( |
) | |||||||||||||||||||||||||||||||||
| Common stock issuable for acquisition | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Balances at March 31, 2026 | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
CapForce Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock compensation expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ( |
) | ||||
| Prepaid expenses and other current assets | ||||||||
| Intangible assets | ( |
) | ||||||
| Accounts payable | ||||||||
| Accrued compensation and benefits | ( |
) | ||||||
| Accrued liabilities | ( |
) | ||||||
| Operating lease liabilities | ( |
) | ( |
) | ||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash used in investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Payments on short term insurance financing | ( |
) | ( |
) | ||||
| Net cash used in financing activities | ( |
) | ( |
) | ||||
| Effects of exchange rates on cash | ( |
) | ||||||
| Net decrease in cash, cash equivalents and restricted cash | ( |
) | ( |
) | ||||
| Cash and cash equivalents and restricted cash at beginning of period | ||||||||
| Cash and cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
CapForce Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2026
Note 1 – Organization
CapForce Inc. (“CapForce” or the “Company”, formerly known as OpGen, Inc.) was incorporated in Delaware in 2001. From inception through November 2023, the Company operated as a precision medicine company harnessing the power of molecular diagnostics and informatics to help combat infectious disease. In 2024, following the sale of control of the Company to AEI Capital Ltd. (“AEI Capital”), the Company scaled down legacy operations while repositioning itself to operate in the financial services and technology industry. In furtherance of such shift, the Company established a wholly-owned subsidiary, CapForce International Holdings Ltd. (“CapForce International”), which launched a new business line in 2024 offering listing sponsorship and consultancy services to international companies seeking to list their securities on securities exchanges.
As part of the Company’s strategic focus on capital markets advisory, in December 2025, the Company acquired all the issued and outstanding ordinary shares of Sun Investment Enterprises Limited (“SIE”), a company incorporated under the laws of the British Virgin Islands from AEI Capital. SIE is a holding company that owns all the equity interests of iCapX Sdn. Bhd. (“iCapX”), a private company limited by shares incorporated under the laws of Malaysia, which provides cap table management and related platform services to customers. The iCapX platform will provide customers with proprietary datasets of structured private company equity information in order to enhance due diligence capabilities, improve listing readiness assessments, and support pricing accuracy. The platform will also serve as a pipeline for business development by engaging private companies ahead of potential listing events. Ongoing development initiatives include AI-driven analytics for identifying listing-related and liquidity risks, optimizing exchange selection, and supporting predictive insights related to post-listing performance.
In February 2026, at the Company’s 2025 Annual Meeting of Stockholders, the Company’s stockholders voted to approve, among other proposals, an amendment to the Company’s Amended and Restated Certificate of Incorporation to change the Company’s name from OpGen, Inc. to CapForce Inc. and, in connection therewith, the Company changed its ticker symbol to “CFOR.” The amendment was filed with the Secretary of State of the State of Delaware in February 2026, and the Company also amended and restated its bylaws to reflect the name change.
As of March 31, 2026, the Company operates virtually in the United States and Singapore. The Company’s subsidiaries, CapForce International, SIE, and iCapX, occupy office space located in Kuala Lumpur, Malaysia, pursuant to an access and shared services agreement with AEI Capital, the Company’s controlling shareholder. The subsidiaries pay a nominal fee under this arrangement.
The Company operates in one business segment.
Note 2 – Going Concern and Management’s Plans
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Since inception, the Company has incurred significant losses from operations and negative operating cash flows. Historically, the Company has funded its operations primarily through external investor financing arrangements and strategic actions taken by the Company, but, in the near term, the Company anticipates funding its operations primarily through financing arrangements with AEI Capital until the Company’s operating business is able to sustain its operations. Through the Company’s financing efforts, which consisted of sales of Company common stock in private placements pursuant to securities purchase agreements, the Company received gross proceeds of approximately $
5
The Company has cash and cash equivalents of approximately $0.1 million as of March 31, 2026.
The Company is party to a securities purchase agreement, entered into in August 2024, with AEI Capital, pursuant to which the Company may sell, in its sole discretion, shares of common stock to AEI Capital. Through December 31, 2025, the Company received aggregate gross proceeds of $
On June 5, 2024, the Company received a letter from the listing staff of The Nasdaq Stock Market LLC (“Nasdaq”) that the Company was no longer in compliance with the minimum stockholders’ equity requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Rule”). The Stockholders’ Equity Rule requires companies listed on the Nasdaq Capital Market to maintain stockholders’ equity of at least $
The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
Note 3 – Summary of Significant Accounting Policies
Basis of Presentation
The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Commission and the standards of accounting measurement set forth in the Interim Reporting Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, although the Company believes that the disclosures made are adequate to make the information not misleading. The Company recommends that the unaudited condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest annual report on Form 10-K. In the opinion of management, all adjustments that are necessary for a fair presentation of the Company’s financial position for the periods presented have been reflected. All adjustments are of a normal, recurring nature, unless otherwise stated. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The December 31, 2025 consolidated balance sheet included herein was derived from the audited consolidated financial statements but does not include all disclosures including notes required by GAAP for complete financial statements.
6
The accompanying unaudited condensed consolidated financial statements consolidate the operations of all controlled subsidiaries; all intercompany activity is eliminated. The unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 include the balance sheet and income statement activity for CapForce International, the Company’s wholly-owned subsidiary. The unaudited condensed consolidated financial statements for the three months ended March 31, 2026 also include the activity of iCapX, the wholly-owned subsidiary of SIE which was acquired in December 2025, and CapForce Singapore, which was established in December 2025, both of which are wholly-owned subsidiaries of the Company.
Use of Estimates
In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the accompanying unaudited condensed consolidated financial statements, estimates are used for, but not limited to, liquidity assumptions, revenue recognition, stock-based compensation, allowances for credit losses and inventory obsolescence, discount rates used to discount unpaid lease payments to present values, deferred tax assets and liabilities and related valuation allowance, the estimated useful lives of long-lived assets, and the recoverability of long-lived assets. Actual results could differ from those estimates.
Segment Reporting
The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. The CODM is assisted in his responsibilities of making decisions regarding resource allocation and performance assessment by the leadership team.
The Company views its operations and manages its business as one operating segment. Following the Company’s repositioning, the Company offers listing sponsorship and consultancy services to international companies seeking to list their securities on securities exchanges and the Company is developing a digital investment banking platform to support cross-border securities trading, advanced computational model-enabled investment banking advisory, asset management services, and fintech-enabled capital table management. Segment profit or loss is measured as the Company’s net income (loss) as reported on the Company’s statement of operations. The Company monitors its cash and cash equivalents, as reported on the Company’s balance sheets, to determine funding for its activities.
The CODM assesses Company performance through the achievement of revenue goals, integration objectives and cost optimization initiatives. In addition to the Company’s Statement of Operations, the CODM is regularly provided with budgeted and forecasted expense information which is used to determine the Company’s liquidity needs and cash allocation.
Foreign Currency
iCapX and CapForce Singapore are located in Malaysia and Singapore, respectively, and each use a currency other than the United States dollar as its functional currency. As a result, all assets and liabilities of these entities are translated into United States dollars based on exchange rates at the end of the reporting period. Income and expense items are translated at the average exchange rates prevailing during the reporting period. Translation adjustments are reported in accumulated other comprehensive income (loss), a component of stockholders’ equity. Foreign currency transaction gains and losses, excluding gains and losses on intercompany balances where there is no current intent to settle such amounts in the foreseeable future, are included in the determination of net income (loss). Unless otherwise noted, all references to “$” or “dollar” refer to the United States dollar.
Fair Value of Financial Instruments
Financial instruments classified as current assets and liabilities (including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value, because of the short-term maturities of those instruments.
7
Cash and Cash Equivalents and Restricted Cash
The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. The Company has cash and cash equivalents deposited in financial institutions in which the balances occasionally exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit of $
At March 31, 2026 and December 31, 2025, the Company had funds totaling $
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and cash equivalents and restricted cash in the condensed consolidated statements of cash flows | $ | $ | ||||||
Accounts Receivable and Credit Concentration
The Company’s accounts receivable result from revenues earned but not yet collected from customers. Credit is extended based on an evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are due within
At March 31, 2026, the Company had accounts receivable from two customers that individually represented
Investments in Equity Securities
The Company currently has a single investment in equity securities issued by a privately held entity. In the fourth quarter of 2024, CapForce International performed part of its listing sponsorship and consulting services and completed the first performance obligation, pursuant to the agreement with its client, generating proceeds of $5.0 million in the client’s equity. During the second quarter of 2025, CapForce International completed the second performance obligation within the engagement agreement, earning proceeds of $
8
Inventory
Inventory is entirely comprised of the remaining Unyvero system instruments and components and is valued using the first in, first out cost method and stated at the lower of cost or net realizable value. The inventory of approximately $
Long-Lived Assets
Property and Equipment
Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Recoverability measurement and estimation of undiscounted cash flows is performed at the lowest possible level for which the Company can identify assets. If such assets are considered to be impaired, impairment is recognized as the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Leases
The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use (“ROU”) assets represent the Company’s right to use the underlying asset for the term of the lease and the lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date of the underlying lease arrangement to determine the present value of lease payments. The ROU asset also includes any prepaid lease payments and any lease incentives received. The lease term to calculate the ROU asset and related lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company’s lease agreements generally do not contain any material variable lease payments, residual value guarantees or restrictive covenants.
Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while expense for financing leases is recognized as depreciation expense and interest expense using the effective interest method of recognition. The Company has made certain accounting policy elections whereby the Company (i) does not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12 months or less) and (ii) combines lease and non-lease elements of our operating leases.
ROU assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Recoverability measurement and estimation of undiscounted cash flows is performed at the lowest possible level for which the Company can identify assets. If such assets are considered to be impaired, impairment is recognized as the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Intangible Assets
Intangible assets represent costs incurred related to the Company’s proprietary platform during the application development stage that are capitalized as finite-lived intangible assets. These costs include external direct costs for infrastructure and services, as well as personnel and related costs for consultants directly involved in the development effort. Once the project is substantially complete and available for use, capitalized costs will be amortized on a straight-line basis over the asset’s estimated useful life.
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
9
Revenue Recognition
The Company derives revenues primarily from offering listing sponsorship and consultancy services to international companies seeking to list their securities on securities exchanges.
The Company analyzes its contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers, (ii) identification of distinct performance obligations in the contract, (iii) determination of contract transaction price, (iv) allocation of contract transaction price to the performance obligations, and (v) determination of revenue recognition based on timing of satisfaction of the performance obligations. The Company recognizes revenues upon the satisfaction of its performance obligations (upon transfer of control of promised goods or services to our customers) in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.
The Company defers incremental costs of obtaining a customer contract and amortizes the deferred costs over the period that the goods and services are transferred to the customer. The Company had no material incremental costs to obtain customer contracts in any period presented.
Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of services being provided.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs primarily consist of fees to develop, expand and innovate the Company’s digital investment banking platform, salaries and related expenses for personnel, and fees paid to consultants and outside service providers.
Stock-based compensation expense is recognized at fair value. For stock options, the fair value of stock-based compensation to employees and directors is estimated on the date of grant using the Black-Scholes model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the award. For all time-vesting awards granted, expense is amortized using the straight-line attribution method. The Company accounts for forfeitures as they occur.
Option valuation models, including the Black-Scholes model, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant-date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility and the expected life of the award.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized.
Tax benefits are initially recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially, and subsequently, measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority, assuming full knowledge of the position and all relevant facts.
10
The Company had federal net operating loss (“NOL”) carryforwards of approximately $
In periods of net loss, basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. The Company’s Series D and E convertible preferred stock contain non-forfeitable rights to dividends, and are therefore considered to be participating securities in the periods in which each are outstanding; in periods of net income, the calculation of basic earnings per share excludes from the numerator net income attributable to the preferred stock and excludes the impact of those shares from the denominator.
In periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive. In periods of net income, diluted earnings per share is computed using the more dilutive of the “two class method” or the “treasury method.” Dilutive earnings per share under the “two class method” is calculated by dividing net income available to common stockholders as adjusted for the participating impacts of the preferred stock, by the weighted-average number of shares outstanding plus the dilutive impact of all other potential dilutive common shares, consisting primarily of common shares underlying common stock options and stock purchase warrants using the treasury stock method. Dilutive earnings per share under the “treasury stock method” is calculated by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the dilutive impact of all potential dilutive common shares, consisting primarily of common shares underlying common stock options and stock purchase warrants using the treasury stock method, and preferred stock using the if-converted method.
The number of anti-dilutive shares consisting of common shares underlying (i) common stock options, (ii) restricted stock units, (iii) preferred stock and (iv) stock purchase warrants, which have been excluded from the computation of diluted income (loss) per share because their effect was anti-dilutive, was
Recently Adopted Accounting Pronouncements
In 2025, the Company adopted ASU No. 2023-09: Income Taxes (Topic 740): Improvements to Income Tax Disclosures that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The adoption of ASU No. 2023-09 did not affect recognition or measurement in the Company’s unaudited condensed consolidated financial statements.
In 2026, the Company adopted ASU No. 2025-05: Financial Instruments-Credit Losses which amends topic 326. Specifically, the ASU provides a practical expedient whereby an entity can assume that current conditions as of the balance sheet date will not change for the remaining life of the asset (e.g., the account receivable). The adoption of ASU No. 2025-05 did not have a material impact on the Company’s unaudited condensed consolidated financial statements.
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Recently Issued Accounting Pronouncements
In September 2025, the FASB issued ASU No. 2025-06, which amends the guidance on ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. Specifically, the ASU modernized the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. The guidance is effective for the Company’s fiscal year ending December 31, 2028 and can be adopted early. The Company is in the process of evaluating the effects of this guidance on its unaudited condensed consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-07, which, among other things, provides scope clarification for share-based non-cash consideration from a customer in a revenue contract. Specifically, the ASU clarifies that share-based payments from customers in exchange for the transfer of goods or services should be accounted for as non-cash consideration within the scope of ASC 606 as opposed to as a derivative pursuant to ASC 815 or as an equity security pursuant to ASC 321. This guidance is effective for the Company’s fiscal year ending December 31, 2027 and can be adopted early. The Company is in the process of evaluating the effects of this guidance on its unaudited condensed consolidated financial statements.
The Company has evaluated all other issued and unadopted ASUs and believes the adoption of these standards will not have a material impact on its results of operations, financial position or cash flows.
Note 4 – Revenue from Contracts with Customers
The Company provides listing sponsorship and consulting services to growth-stage private companies. The Company did
Note 5 – Investment in Equity Securities
In January 2024, AEI Capital, the Company’s controlling stockholder, entered into an advisory engagement with a client, a privately held company, pursuant to which AEI Capital became entitled to advisory fees consisting of equity interests representing 3.5% of the client’s outstanding equity and cash consideration of $200,000. In October 2024, CapForce International entered into an assignment agreement with AEI Capital pursuant to which AEI Capital assigned to CapForce International a portion of AEI Capital’s rights and obligations under the engagement, including advisory fees consisting of equity interests representing 2.1% of the client’s outstanding equity and cash consideration of $120,000. Following the assignment, CapForce International satisfied the first performance obligation under the engagement during the fourth quarter of 2024 and earned equity consideration with a fair value of $
On December 1, 2025, the Company acquired all the issued and outstanding shares of Sun Investment Enterprises Limited, or SIE, a holding company that owns iCapX Sdn. Bhd. (“iCapX”), a Malaysia-based provider of cap table management fintech platform services and related corporate advisory services. Prior to the acquisition, iCapX had been assigned a portion of the advisory engagement described above, consisting of advisory fees equivalent to 1.4% of the client’s outstanding equity interests and cash consideration of $80,000. On December 30, 2025, iCapX assigned its rights and obligations under that portion of the engagement to CapForce International. During the fourth quarter of 2025,
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In connection with the Company’s advisory services for the client, pursuant to a services agreement between CapForce International and the European Credit Investment Bank (“ECIB”), CapForce International owes ECIB $3,020,000 in shares of the client’s equity for its investment banking services. Such amount remains accrued and unpaid as of March 31, 2026.
The CEO of AEI Capital and former CEO and current Chairman of the Board of Directors of CapForce Inc., serves as a member of the Board of Directors of the advisory engagement client, making the client a related party. The agreements between the client, AEI Capital, iCapX, and CapForce International were conducted in the ordinary course of business and on terms the Company believes are comparable to those with unrelated third parties. The Company’s management and Board of Directors have evaluated the relationship and concluded that appropriate governance and conflict of interest procedures were followed.
As of March 31, 2026 and 2025, the Company held an investment in the equity securities of the client valued at $
The Company estimated the fair value of the investment based on an anticipated initial public offering by the client expected to occur within the next twelve months. The estimated valuation is derived from pricing and valuation metrics provided by the issuer and underwriters in connection with the planned initial public offering. This estimate is subject to significant judgment and market risk and is not based on observable inputs. In the event the final initial public offering valuation results in proceeds to the Company of less than $35.0 million for these shares of equity securities, the client has contractually agreed to issue additional shares to the Company to ensure that the total value of the equity consideration received equals $35.0 million. The Company accounts for this investment under ASC 321, Investments – Equity Securities. Since the equity securities do not have a readily determinable fair value, the Company has elected the measurement alternative and, accordingly, it is carried at its estimated fair value calculated as its cost less any impairment charges until such time as there is evidence of an orderly transaction. As of March 31, 2026, no fair value adjustments have been recognized, nor have there been any impairment charges. This investment is considered a financial asset that is measured at fair value on a non-recurring basis.
Note 6 – Fair Value Measurements
The carrying value of short-term instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the relatively short period to maturity for these instruments. The Company has elected to account for its single investment using the measurement alternative and it is considered a financial instrument accounted for at fair value on a non-recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows:
| ● | Level 1 - defined as observable inputs such as quoted prices in active markets; |
| ● | Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
| ● | Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions such as expected revenue growth and discount factors applied to cash flow projections. |
For the three months ended March 31, 2026 and 2025, the Company has not transferred any assets between fair value measurement levels.
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Financial assets and liabilities measured at fair value on a recurring basis
The Company does not have any financial assets or liabilities measured at fair value on a recurring basis.
Financial assets and liabilities carried at fair value on a non-recurring basis
As disclosed in Note 5, as of March 31, 2026 and 2025, the Company held an investment in the equity securities valued at $
Non-financial assets and liabilities carried at fair value on a recurring basis
The Company does not have any non-financial assets or liabilities measured at fair value on a recurring basis.
Non-financial assets and liabilities carried at fair value on a non-recurring basis
The Company measures its long-lived assets, including property and equipment and lease assets, at fair value on a non-recurring basis when a triggering event requires such evaluation. During the three months ended March 31, 2026 and 2025, the Company did not record any impairment charges.
Note 7 – Short-Term Insurance Financing
In May 2025, the Company entered into an agreement to finance a portion of the premium for its directors and officers insurance policy for the policy period of May 2025 through May 2026. The agreement provides for financing of approximately $
In May 2024, the Company entered into an agreement to finance a portion of the premium for its directors and officers insurance policy for the policy period of May 2024 through May 2025. The agreement provided for financing of approximately $
Interest expense on short term insurance financing was $
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Note 8 – Accrued Liabilities
Accrued liabilities consisted of the following at March 31, 2026 and December 31, 2025:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accrued service fees | $ | $ | ||||||
| Accrued other | ||||||||
| Total accrued liabilities | $ | $ | ||||||
Note 9 – Stockholders’ Equity
Common Stock
As of March 31, 2026, the Company had shares of authorized common stock, of which shares were issued and outstanding.
Preferred Stock
As of March 31, 2026, the Company had shares of authorized preferred stock, of which 1,000 shares were designated as Series D Preferred Stock, of which shares were issued and outstanding.
In October 2023, the Company entered into a Preferred Stock Purchase Agreement (the “October 2023 Purchase Agreement”) with a single investor, pursuant to which the Company agreed to issue and sell to the investor in a private placement (the “Private Placement”) shares of the Company’s Series D Preferred Stock, par value $
Pursuant to the October 2023 Purchase Agreement, the Company filed a certificate of designation (the “Series D Certificate of Designation”) with the Secretary of State of the State of Delaware designating the rights, preferences and limitations of the shares of preferred stock. The Series D Certificate of Designation provides that the shares of preferred stock have a stated value of $1,000 per share and are convertible into shares of common stock, par value $0.01 per share, of the Company at a price of $ per share, subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications, or similar events affecting the common stock. The preferred stock may be converted at any time at the option of the holder. Notwithstanding the foregoing, the Series D Certificate of Designation provides that in no event will the preferred stock be convertible into common stock in a manner that would result in the holder, its permitted transferees and affiliates holding more than
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AEI Capital Transactions
In 2024, the Company entered into a Securities Purchase Agreement, as amended (the “2024 Securities Purchase Agreement”) with AEI Capital, pursuant to which the Company has the right, in its sole discretion, to sell to AEI Capital, shares of common stock, par value $0.01 per share, of the Company having an aggregate value of up to $
In December 2025, the Company entered into a Share Sale Agreement (the “Purchase Agreement”) with AEI Capital, the controlling stockholder of the Company, pursuant to which the Company acquired all the issued and outstanding ordinary shares of Sun Investment Enterprises Limited, a British Virgin Islands company (see Note 12). SIE is a holding company that owns all the equity interests of iCapX Sdn. Bhd., a Malaysia-based provider of cap table management fintech platform services and related corporate advisory services. The contractual purchase price for the acquisition was approximately $12.3 million. The aggregate purchase consideration was satisfied through the issuance of 2,028,867 shares of the Company’s common stock in January 2026. The number of shares was determined using the “Minimum Price” as defined under Nasdaq Listing Rule 5635(d), which was based on the average closing price of the Company’s common stock for the five trading days preceding execution of the Purchase Agreement, resulting in a reference price of $6.052 per share. As the shares had not yet been issued as of December 31, 2025, the fair value of the equity consideration was recorded as common stock issuable as of the acquisition date. The shares were subsequently issued in January 2026.
Stock Purchase Warrants
The Company has historically issued common stock purchase warrants in connection with various equity or debt offerings or development agreements. These issuances include entering into inducement agreements with holders of existing warrants whereby terms are amended or additional warrants are issued in order to induce exercise of the existing warrants. The Company did not issue any common stock warrants nor were any warrants exercised in the three months ended March 31, 2026 or the year ended December 31, 2025.
At March 31, 2026 and December 31, 2025, the following warrants to purchase shares of common stock were outstanding:
| Outstanding at | ||||||||||||||
| Exercise | March 31, | December 31, | ||||||||||||
| Issuance | Price | Expiration | 2026 | 2025 | ||||||||||
| November 2020 | $ | |||||||||||||
| February 2021 | $ | |||||||||||||
| May 2023 | $ | |||||||||||||
| October 2023 | $ | |||||||||||||
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Stock Compensation
2015 Equity Incentive Plan
In April 2015, the Company adopted, and the Company’s stockholders approved, the 2015 Equity Incentive Plan (the “2015 Plan”); the 2015 Plan became effective upon the execution and delivery of the underwriting agreement for the Company’s initial public offering in May 2015. The 2015 Plan provided for the granting of incentive stock options within the meaning of Section 422 of the Code to employees and the granting of non-qualified stock options to employees, non-employee directors and consultants. The 2015 Plan also provided for the grant of restricted stock, restricted stock units, stock appreciation rights, dividend equivalents and stock payments to employees, non-employee directors and consultants. Effective April 1, 2025, which was the ten (10) year anniversary of the adoption of the 2015 Plan, no additional grants may be made under the 2015 Plan.
2026 Stock Incentive Plan
In February 2026, the Company adopted, and the Company’s stockholders approved, the 2026 Stock Incentive Plan (the “2026 Plan”). Under the 2026 Plan, shares of the Company’s common stock were made available for issuance, subject to adjustments for stock dividends, stock splits, reverse stock splits, share combinations, recapitalizations, mergers, consolidations, spin-offs, split-ups, reorganizations, rights offerings, liquidations, or any similar change event by the Company. Under the 2026 Plan, the Company is authorized to grant stock options, stock appreciation rights, restricted stock and other stock-based awards. The 2026 Plan includes an evergreen provision providing for an automatic annual increase in the shares of common stock available for issuance under the 2026 Plan over the next
Share-Based Compensation
The Company recognized share-based compensation expense as follows:
| Three Months Ended March 31, |
||||||||
| 2026 | 2025 | |||||||
| Cost of services | $ | $ | ||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| $ | $ | |||||||
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Stock Options
As of March 31, 2026, the Company does t have any unrecognized expense related to its stock options.
The Company did t grant any options during the three months ended March 31, 2026 or 2025. During the three months ended March 31, 2026 and 2025, options were forfeited or expired.
The Company had stock options to acquire
Restricted Stock Units
During the fourth quarter of 2025, the Company entered into restricted stock unit agreements with certain officers and directors granting the recipients the right to receive an aggregate of shares of common stock upon vesting. Such grants were contingent upon stockholder approval of the Company’s 2026 equity plan. Since the 2026 equity plan was not approved until the Company’s 2025 Annual Meeting of Stockholders in February 2026, the Company did not record the awards as outstanding or recognize any related stock-based compensation expense as of December 31, 2025. Upon stockholder approval in February 2026, the awards were recognized as outstanding and the related cumulative stock-based compensation expense was recognized during the three months ended March 31, 2026.
During the three months ended March 31, 2026, no restricted stock units were granted, restricted stock units vested and restricted stock units were forfeited. During the three months ended March 31, 2025, restricted stock units were granted, restricted stock units vested, and restricted stock units were forfeited. The Company had restricted stock units outstanding as of March 31, 2026.
As of March 31, 2026, there was approximately $ of unrecognized compensation costs related to restricted stock units, which are expected to be recognized over a weighted average period of years.
Note 10 – Commitments and Contingencies
Registration and other stockholder rights
In connection with various of its investment transactions, the Company entered into registration rights agreements with stockholders, pursuant to which the investors were granted certain demand registration rights and/or piggyback and/or resale registration rights in connection with subsequent registered offerings of the Company’s common stock.
Leases
The Company has a continuing liability under its former headquarters’ office lease, which lease was assigned to a third party in April 2024 but for which it remains liable to the landlord. Maturities under this lease as of March 31, 2026 by year are as follows:
| Maturity of Lease Liabilities | Total | |||
| 2026 (April to December) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: interest | ( |
) | ||
| Present value of lease liabilities | $ | |||
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For the three months ended March 31, 2026 and 2025, lease costs of $
The remaining term of the lone operating lease as of March 31, 2026 is
Note 11 – Joint Venture
In April 2025, CapForce International entered into a Joint Venture Agreement (the “JV Agreement”) with the European Credit Investment Bank (“ECIB”), a full-fledged, global facing mid-shore investment bank in Labuan, Malaysia licensed by the Labuan Financial Services Authority, pursuant to which the parties agreed to form a joint venture company named CapForce EC Capital Markets Ltd. (the “Joint Venture”) for purposes of developing and operating a stock trading platform (the “Trading Platform”) and digital investment banking platform across Asia and the rest of the world (the “Digital IB Platform,” and together with the Trading Platform, the “Platforms”). The Platforms encompass (i) a community-focused cross-border stock trading platform; (ii) a fintech-enabled cap table management platform; and (iii) an advanced computational model-enabled investment banking advisory platform for public listing sponsorship and wealth management. Pursuant to the JV Agreement, CapForce International will own
Note 12 – iCapX Acquisition
On December 1, 2025, the Company entered into a Share Sale Agreement (the “Purchase Agreement”) with AEI Capital (the “Seller”), the controlling stockholder of the Company, pursuant to which the Company acquired all the issued and outstanding ordinary shares of Sun Investment Enterprises Limited, a British Virgin Islands company. SIE is a holding company that owns all the equity interests of iCapX Sdn. Bhd., a Malaysia-based provider of cap table management fintech platform services and related corporate advisory services. The acquisition was undertaken to expand the Company’s service offerings and strategic capabilities and to support the Company’s long-term growth strategy.
The contractual purchase price for the acquisition was approximately $
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The acquisition is deemed to be a reorganization of entities under common control. Consequently, the transaction is accounted for using the existing carrying value of the assets and liabilities iCapX as follows:
| Assets Acquired and Liabilities Assumed | Fair Value | |||
| Assets and liabilities | ||||
| Cash | $ | |||
| Other current and non-current assets | ||||
| Accounts payable | ( |
) | ||
| Other current liabilities | ( |
) | ||
| Total assets and liabilities | $ | |||
| Equity | ||||
| Share capital | $ | ( |
) | |
| Retained earnings | ||||
| Total equity | $ | ( |
) | |
Note 13 – Subsequent Events
The Company evaluates subsequent events and transactions that occur after the balance sheet date up to June 12, 2026, the date that the unaudited condensed consolidated financial statements are issued.
Other than as disclosed in this Note 13 and as may be disclosed elsewhere in the notes to the accompanying unaudited condensed consolidated financial statements, there have been no subsequent events that require adjustment or disclosure in the accompanying unaudited condensed consolidated financial statements.
In April 2026, pursuant to the 2024 Securities Purchase Agreement with AEI Capital that permits the Company, in its sole discretion, to sell shares of common stock to AEI Capital, the Company sold shares of common stock to AEI Capital for gross proceeds of approximately $
In May 2026, the Company entered into an agreement to finance a portion of the premium for its directors and officers insurance policy for the policy period of May 2026 through May 2027. The agreement provides for financing of approximately $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes thereto included in Part I, Item 1 of this quarterly report on Form 10-Q. This discussion contains forward-looking statements, based on current expectations and related to future events and our future financial performance, that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many important factors, including those set forth under Part II. Item 1A. “Risk Factors” of this quarterly report on Form 10-Q and Part 1. Item 1A of our annual report on Form 10-K for the year ended December 31, 2025.
Overview
CapForce Inc. (“CapForce”, “we” or the “Company,” formerly known as OpGen, Inc.) was incorporated in Delaware in 2001. From inception through November 2023, we operated as a precision medicine company harnessing the power of molecular diagnostics and informatics to help combat infectious disease. In 2024, following the sale of control of the Company to AEI Capital Ltd. (“AEI Capital”), we scaled down legacy operations while repositioning the Company to operate in the financial services and technology industry. In furtherance of such shift, we established a wholly-owned subsidiary, CapForce International Holdings Ltd. (“CapForce International”), which launched a new business line in 2024 offering listing sponsorship and consultancy services to international companies seeking to list their securities on securities exchanges.
As part of our strategic focus on capital markets advisory, in December 2025, we acquired all the issued and outstanding ordinary shares of Sun Investment Enterprises Limited, a company incorporated under the laws of the British Virgin Islands (“SIE”) from AEI Capital. SIE is a holding company that owns all the equity interests of iCapX Sdn. Bhd. (“iCapX”), a private company limited by shares incorporated under the laws of Malaysia providing cap table management fintech platform services to customers. The iCapX platform will provide customers with proprietary datasets of structured private company equity information in order to enhance due diligence capabilities, improve listing readiness assessments, and support pricing accuracy. The platform will also serve as a pipeline for business development by engaging private companies ahead of potential listing events. Ongoing development initiatives include AI-driven analytics for identifying listing-related and liquidity risks, optimizing exchange selection, and supporting predictive insights related to post-listing performance.
In February 2026, at our 2025 Annual Meeting of Stockholders, our stockholders voted to approve, among other proposals, an amendment to our Amended and Restated Certificate of Incorporation to change our name from OpGen, Inc. to CapForce Inc. In connection with the change of our name, we also changed our ticker symbol to “CFOR.” The amendment was filed with the Secretary of State of the State of Delaware in February 2026, and we also amended and restated our bylaws to reflect the name change.
Financial Overview
Revenue
We generate revenues from CapForce International’s listing sponsorship and consulting services, and we anticipate generating revenues from our other business ventures including cross-border securities trading, advanced computational model-enabled investment banking advisory and asset management services, and fintech-enabled capital table management solutions.
Cost of Sales and Operating Expenses
Our cost of sales are primarily subcontractor, advisor, and service provider fees and technology infrastructure costs associated with providing our services. Research and development expenses consist of fees to develop, expand and innovate our digital investment banking platform, and selling, general, and administrative expenses consist of public company costs, salaries, and related costs for administrative and business development purposes.
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Results of operations for the three months ended March 31, 2026 and 2025
Revenues
The Company did not generate any revenue during the three months ended March 31, 2026 or March 31, 2025.
Operating Expenses
| Three Months Ended March 31, |
||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Cost of services | $ | - | $ | - | $ | - | - | % | ||||||||
| Research and development | 2,451 | - | 2,451 | 100 | % | |||||||||||
| General and administrative | 797,597 | 513,344 | 284,253 | 55 | % | |||||||||||
| Sales and marketing | 4,756 | 9,502 | (4,746 | ) | -50 | % | ||||||||||
| Total operating expenses | $ | 804,804 | $ | 522,846 | $ | 281,958 | 54 | % | ||||||||
The Company’s total operating expenses for the three months ended March 31, 2026 increased from $0.5 million to $0.8 million, when compared to the same period in 2025. This increase is primarily attributable to:
| ● | General and administrative expenses increased for the quarter ended March 31, 2026 compared to the same period in 2025. The increase is primarily attributable to the recognition of Board of Directors compensation expense, compared to no such expense in the prior-year period, as well as costs associated with the Company’s stockholder meeting and increased legal expenses. The increase was further impacted by the reversal of a bonus accrual during the prior-year period, which reduced general and administrative expenses in the comparable period; and |
| ● | Research and development and sales and marketing experienced significant percentage changes for the quarter ended March 31, 2026 compared to the same period in 2025; however, the related dollar changes were not material and did not have a significant impact on our results of operations. |
Other Income (Expense)
| Three Months Ended March 31, |
||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Interest and other income | $ | 92,869 | $ | 117,845 | $ | (24,976 | ) | -21 | % | |||||||
| Interest expense | (995 | ) | (3,238 | ) | 2,243 | -69 | % | |||||||||
| Foreign currency transaction gains | 2,359 | 106 | 2,253 | 2125 | % | |||||||||||
| Total other income (expense) | $ | 94,233 | $ | 114,713 | $ | (20,480 | ) | -18 | % | |||||||
Our total other income for the three months ended March 31, 2026 decreased by approximately $20,000 when compared to the same period in 2025 primarily due to a decrease in interest income attributable to lower average cash balances and lower prevailing interest rates compared to the prior-year period.
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Liquidity and Capital Resources
As of March 31, 2026, we had cash and cash equivalents of $0.1 million compared to $0.5 million at December 31, 2025. Historically, we have funded our operations primarily through external investor financing arrangements and strategic actions taken by us. We generated $0.5 million and $5.0 million of gross proceeds from the sale of our securities in 2025 and 2024, respectively.
In the near term, we anticipate funding our operations primarily through financing arrangements with AEI Capital, including pursuant to the 2024 Securities Purchase Agreement, until our operating business is able to sustain our operations or until we are able to monetize our investments in equity securities from services performed for clients. As of March 31, 2026, we have the right, in our sole discretion, to sell to AEI Capital, at any time and from time to time prior to December 31, 2026, up to $6.5 million worth of additional shares of common stock under the 2024 Securities Purchase Agreement.
Sources and Uses of Cash
The following table summarizes the net cash and cash equivalents used in operating activities, investing activities and financing activities for the periods indicated:
| Three Months Ended March 31, |
||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Net cash used in: | ||||||||||||||||
| Operating activities | $ | (363,830 | ) | $ | (107,594 | ) | $ | (256,236 | ) | 238 | % | |||||
| Investing activities | - | - | - | - | % | |||||||||||
| Financing activities | (86,997 | ) | (90,278 | ) | 3,281 | -4 | % | |||||||||
| Net decrease in cash and cash equivalents | $ | (450,827 | ) | $ | (197,872 | ) | $ | (252,955 | ) | 128 | % | |||||
Net cash used in operating activities
Net cash used in operating activities for the three months ended March 31, 2026 consists primarily of our net loss of $0.7 million, partially offset by noncash share-based compensation expense of $0.1 million and changes in operating assets and liabilities of $0.2 million. Net cash used in operating activities for the three months ended March 31, 2025 consists primarily of our net loss of $0.4 million, partially offset by noncash share-based compensation expense of $0.1 million and changes in operating assets and liabilities of $0.2 million.
Net cash used in investing activities
There was no cash used in investing activities during the three months ended March 31, 2026 or 2025.
Net cash used in financing activities
Net cash used in financing activities for the three months ended March 31, 2026 and 2025 consists of scheduled repayments on our short-term insurance financing obligations.
Contractual Commitments
Other than the continuing liability under our former headquarters’ office lease, which lease was assigned to a third party in April 2024 but for which we still remain liable to the landlord, we have no other material contractual commitments as of March 31, 2026.
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Funding Requirements
Going forward, our primary use of cash is to fund the Company’s revenue growth and operating expenses, including those costs for general administrative, digital investment banking platform development and maintenance and corporate purposes. Our future funding requirements will depend on the costs associated with repositioning our business and complying with our obligations as a public company. We cannot provide any assurances that additional financing will not be required in the future to support our operations, but we intend to use financing opportunities strategically to continue strengthening our financial position and, in the near term, we anticipate funding our operations primarily through financing arrangements with AEI Capital, our controlling shareholder, until our operating business is able to sustain our operations.
Critical Accounting Estimates
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us 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 amount of revenues and expenses during the reporting period. In our unaudited condensed consolidated financial statements, estimates are used for, but not limited to, liquidity assumptions, revenue recognition, stock-based compensation, allowances for credit losses and inventory obsolescence, discount rates used to discount unpaid lease payments to present values, deferred tax assets and liabilities and related valuation allowance, the estimated useful lives of long-lived assets, and the recoverability of long-lived assets. Actual results could differ from those estimates.
A summary of our significant accounting policies is included in Note 3 “Summary of significant accounting policies” to the accompanying unaudited condensed consolidated financial statements. Certain of our accounting policies are considered critical, as these policies require significant, difficult or complex judgments by management, often requiring the use of estimates about the effects of matters that are inherently uncertain. Our critical policies are summarized in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2025.
Recently Issued Accounting Pronouncements
See Note 3 “Summary of significant accounting policies” in this quarterly report on Form 10-Q for a full description of recent accounting pronouncements, including the respective expected dates of adoption and effects on our unaudited condensed consolidated financial statements.
Off-Balance Sheet Arrangements
As of March 31, 2026 and December 31, 2025, we did not have any off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management evaluated, with the participation of our principal executive and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding disclosure. Based on their evaluation, management has concluded that our disclosure controls and procedures were effective as of March 31, 2026.
Changes in Internal Control over Financial Reporting
For the quarter ended March 31, 2026, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
To the best of our knowledge, we are not currently a party to any legal proceedings that, individually or in the aggregate, are deemed to be material to our financial condition or results of operations.
Item 1A. Risk Factors
Reference is made to the Risk Factors included in our annual report on Form 10-K for the year ended December 31, 2025. There have been no material changes from such Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
As previously disclosed in our Current Report on Form 8-K filed on January 16, 2026, we entered into a share sale agreement with AEI Capital, our controlling stockholder, pursuant to which we acquired all the issued and outstanding ordinary shares of Sun Investment Enterprises Limited (“SIE”). SIE is a holding company that owns all the equity interests of iCapX Sdn. Bhd. (“iCapX”). The contractual purchase price was $12,278,703.08, and we paid the purchase price in January 2026 through the issuance of 2,028,867 shares of common stock at a price of $6.052 per share.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
| * | Filed or furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CAPFORCE INC. | ||
| By: | /s/ Christian-Laurent Benoit Bonte | |
| Christian-Laurent Benoit Bonte | ||
| Chief Executive Officer (principal executive officer, principal financial officer, and principal accounting officer) | ||
| Date: | June 12, 2026 | |
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