QUCY 10-Q
Quantum Cyber N.V. (QUCY)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
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)
(Issuer’s telephone number)
(Former name or former address, if changed since last report.)
1501 Belvedere Road, Suite 500, West Palm Beach, Fl. 33406
Securities registered pursuant to Section 12(b) of the Act: None.
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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). Yes ☐
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 ☐ No
As of August 13, 2026,
QUANTUM CYBER N.V.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS
| Page | ||
| Part I. Financial Information | 1 | |
| Item 1. | Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 |
| Item 3. | Quantitative and Qualitative Disclosures Regarding Market Risk | 33 |
| Item 4. | Controls and Procedures | 33 |
| Part II. Other Information | 34 | |
| Item 1. | Legal Proceedings | 34 |
| Item 1A. | Risk Factors | 34 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 35 |
| Item 3. | Defaults Upon Senior Securities | 35 |
| Item 4. | Mine Safety Disclosures | 35 |
| Item 5. | Other Information | 35 |
| Item 6. | Exhibits | 37 |
| Signatures | 38 | |
i
PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements.
Quantum Cyber N.V.
(formerly Mainz Biomed N.V.)
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Assets of discontinued operations, held for sale | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accounts payable and accrued liabilities - related party | ||||||||
| Loan payable | ||||||||
| Intellectual property acquisition liability | ||||||||
| Liabilities of discontinued operations, held for sale | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 10) | ||||||||
| Shareholders’ equity | ||||||||
| Preferred share (convertible), a par value of € | ||||||||
| Series A Preferred shares, a par value of € | ||||||||
| Series B Preferred shares, a par value of € | ||||||||
| Series C Preferred shares, a par value of € | ||||||||
| Series D Preferred share, a par value of € | ||||||||
| Series E Preferred shares, a par value of € | ||||||||
| Ordinary shares, a par value of € | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
Quantum Cyber N.V.
(formerly Mainz Biomed N.V.)
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Research and development | ||||||||||||||||
| In-process research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Change in fair value of convertible debt | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision | ||||||||||||||||
| Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Comprehensive loss | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ||||||||||
| Reclassification of translation adjustment related to liquidation of foreign subsidiary | ||||||||||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted loss per ordinary share | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss from discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of ordinary shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
Quantum Cyber N.V.
(formerly Mainz Biomed N.V.)
Condensed Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
| Preferred shares | Ordinary shares | Additional | Accumulated Other |
Total | ||||||||||||||||||||||||||||
| Number of | Number of | paid-in | Accumulated | comprehensive | Shareholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | loss | Equity | |||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Sale of preferred shares | ||||||||||||||||||||||||||||||||
| Sale of ordinary shares | ||||||||||||||||||||||||||||||||
| Share-based expense | - | |||||||||||||||||||||||||||||||
| Stock option expense | - | - | ||||||||||||||||||||||||||||||
| Preferred shares payable | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Preferred shares issued | ( | ) | ||||||||||||||||||||||||||||||
| Ordinary shares issued for exercise of warrants | ||||||||||||||||||||||||||||||||
| Share-based expense | - | - | ||||||||||||||||||||||||||||||
| Ordinary shares issued for in-process research and development | ||||||||||||||||||||||||||||||||
| Stock option expense | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock payable for acquisition of intellectual property | - | - | ||||||||||||||||||||||||||||||
| Share-based expense payable | - | - | ||||||||||||||||||||||||||||||
| Reclassification of translation adjustment related to liquidation of foreign subsidiary | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Ordinary shares | Additional | Accumulated Other |
Total | |||||||||||||||||||||
| Number of | paid-in | Accumulated | comprehensive | Shareholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Loss | Equity | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Share issuance for exercise of pre- funded warrants | ( | ) | ||||||||||||||||||||||
| Sale of ordinary shares | ||||||||||||||||||||||||
| Share-based expense | ||||||||||||||||||||||||
| Stock option expense | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Share issuance for exercise of pre- funded warrants | ( | ) | ||||||||||||||||||||||
| Sale of ordinary shares and warrants and prefunded warrants. | ||||||||||||||||||||||||
| Share-based expense | ||||||||||||||||||||||||
| Stock option expense | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Quantum Cyber N.V.
(formerly Mainz Biomed N.V.)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Realized foreign currency translation | ||||||||
| Share-based compensation | ||||||||
| Stock option expense | ( | ) | ||||||
| Depreciation and amortization | ||||||||
| Bad debt expense | ||||||||
| Inventory write-down | ||||||||
| Accretion expense | ||||||||
| Gain on sale of intellectual property – related party | ( | ) | ||||||
| Change in fair value of convertible debt | ( | ) | ||||||
| Gain on settlement of note payable - silent partnership | ( | ) | ( | ) | ||||
| Gain on sale and disposal of assets | ( | ) | ||||||
| Non-cash lease expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts and other receivable, net | ( | ) | ( | ) | ||||
| Accounts receivable - related party | ||||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Accounts payable and accrued expense - related party | ( | ) | ||||||
| License fee payable | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Payment for intangible asset | ( | ) | ( | ) | ||||
| Payment for intangible asset - related party | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Proceeds from sales of assets | ||||||||
| Other investing cash flows | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from exercise of pre-funded warrants | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from issuance of preferred shares | ||||||||
| Proceeds from issuance of ordinary shares | ||||||||
| Repayments of convertible debt | ( | ) | ( | ) | ||||
| Proceeds from silent partnerships | ( | ) | ||||||
| Payments on silent partnerships | ( | ) | ||||||
| Payments on loan payable | ( | ) | ( | ) | ||||
| Payments of lease obligations | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of changes in exchange rates | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Cash at end of period - continuing operations | $ | $ | ||||||
| Cash at end of period - discontinued operations | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Interest expense | $ | $ | ||||||
| Income tax | $ | $ | ||||||
| Non-Cash Investing and Financing Activities | ||||||||
| Right-of-use asset additions | $ | $ | ||||||
| Acquisition of intangible assets for structured payments | $ | $ | ||||||
| Stock payable for acquisition of intellectual property | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Quantum Cyber N.V.
(formerly Mainz Biomed N.V.)
Notes to the Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Organization and Operations
Quantum Cyber N.V. (the “Company”) is domiciled in the Netherlands. The Company’s registered office is at 200 Connecticut Ave. Suite 400, Norwalk, Connecticut. Prior to May 2026, substantially all of the Company’s operations were in Germany. The Company (f/k/a Mainz Biomed N.V.) was formed in 2021 to acquire the business of Mainz Biomed Germany GmbH. On April 22, 2026, the Company’s shareholders approved change of its name, to Quantum Cyber N.V. In conjunction with the name change the Company changed its Nasdaq ticker symbol to QUCY.
Through February 2026, the Company was engaged in developing and selling in-vitro diagnostic (“IVD”) tests for the early detection of cancer. The Company’s ColoAlert product was being marketed and sold in European markets and was developing its next-generation colorectal cancer screening product. During the six months ending June 30, 2026 the Board of the Company made the decision to exit the colorectal cancer screening business and focus its effort on the development of its pancreatic cancer screening products and to explore new business opportunities in the post-quantum cyber field.
During the three months ended June 30, 2026 the Company’s Board made a decision to enter into its first business in line with its expansion strategy. The Company launched its business focused on an autonomous defense platform in May 2026 and in both May and June entered into two worldwide exclusive fully paid licenses to support a line of drone products. Further, in June the Company entered into an agreement to acquire a plant and operating business to support the manufacture of those drones (the plant and company acquisition closed in July 2026).
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company prepares its financial statements in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“GAAP”) in the United States of America. The accompanying interim financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the Company’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2026, are not necessarily indicative of the results for the full year. While management of the Company believes that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction with the audited financial statements and the footnotes thereto for the year ended December 31, 2025, contained in the Company’s Form 10-K filed with the SEC on March 31, 2026.
The Company’s unaudited consolidated financial statements are expressed in United States dollars.
Consolidation Policy
Throughout these consolidated financial statements, Quantum Cyber N.V. and its directly and indirectly wholly owned subsidiaries, Quantum Drones Corp., Mainz Biomed USA, Inc., and Mainz Biomed GmbH are referred to, collectively and individually as the “Company”).
All significant intercompany balances and transactions have been eliminated in consolidation.
5
Going concern
The Company’s consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.
As of June 30, 2026, the Company had an accumulated deficit of approximately $
The Company has incurred recurring losses from operations and does not yet have an established source of revenues sufficient to cover its operating costs. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management evaluated conditions and events that raise substantial doubt and the Company’s plans to mitigate those conditions over the one-year look-forward period from the date these consolidated financial statements are issued.
The Company’s ability to continue as a going concern depends on its ability to successfully execute its business plan and eventually achieve profitable operations. During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business and maintaining its good standing in the industry. The Company may experience a cash shortfall and be required to raise additional capital.
Historically, the Company has relied upon funds from its shareholders and loans from third parties. Management may raise additional capital through future public or private offerings of the Company’s share or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon its operations and its shareholders.
Management’s plans may also include reducing or deferring certain discretionary expenditures and pursuing strategic partnerships and/or revenue-generating contracts, however, there can be no assurance these plans will be effectively implemented or be successful.
The Company believes that its currently available cash on hand, together with additional financing described above, will be sufficient to meet its planned expenditures and obligations for at least the one-year period following the issuance of its consolidated financial statements.
These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities, the reported revenues and expenses, and the statement of financial position classifications used, that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates are contained in the accompanying consolidated financial statements for the valuation of debt, leases, useful life of equipment, impairment analysis, warrants and stock options and other financial instruments.
6
Foreign Currency Translation
The Company translates its foreign operations to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”.
The functional currency of Mainz Biomed GmbH is the Euro (EUR, €). These subsidiary financial statements are translated into U.S. dollars using the period-end exchange rates for assets and liabilities, average exchange rates during the corresponding period for revenue and expenses, and historical rates for equity. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive income (loss).
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
As of June 30, 2026 and December 31, 2025, the Company did have cash equivalents.
Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $
Intangible Assets
Intangible assets consist primarily of exclusive license agreements acquired from third parties. Acquired intangible assets with a finite life are initially recognized at fair value as of the acquisition date and are subsequently amortized on a straight-line basis over their estimated useful lives. Acquired indefinite-lived intangible assets are not amortized and are tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired.
The Company reviews the estimated useful lives of acquired intangible assets with a finite life at least annually.
Impairment of Long-Lived Assets and Definite-Lived Intangible Assets
Long-lived assets with finite lives, primarily, property and equipment and operating lease right-of-use assets, and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.
7
Financial Instruments
The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value 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. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
| ● | Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
| ● | Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The carrying values of the Company’s financial instruments include: cash, accounts receivable, prepaid and other current assets, accounts payable, accrued liabilities and other current liabilities, loan payable, convertible notes, notes payable and due from/to related parties. These financial instruments approximate their fair values due to their short-term maturities.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due to related parties due to their related party nature.
Revenue Recognition
Revenue is recognized upon the satisfaction of performance obligations. Performance obligations are satisfied at the point at which control of the goods or services are transferred to customers, in an amount that reflects the consideration the Company is entitled to receive for those goods and services.
Amounts collected from customers on behalf of third parties (e.g., sales and value-added taxes) are excluded from the transaction price and, therefore, from revenue under ASC 606. Such amounts are recorded as a liability until remitted to the respective authorities.
During the period ended June 30, 2026, the Company sold its genetic diagnostic testing kits to both laboratory partners and directly to patients who are the end users of the product. Upon the delivery of the Company’s products to laboratory partners the Company has completed its performance obligations and as such revenue is recorded upon delivery. Sales to patients, or end users, where samples are sent to the Company’s diagnostic lab for testing and evaluation, are recognized when they are delivered to the end user, returned to the Company’s laboratory, and testing results have been delivered. Until there is recognition from these sales, it is presented as deferred revenue on the Company’s statement of financial position.
8
During the six months ended June 30, 2026, the Company did not generate any revenue from continuing operations. Prior revenue-generating operations are now classified as discontinued.
Research and Development (R&D)
R&D expenses consist primarily of costs related to personnel expenses, clinical studies and outside services, in process research and development (IPR&D) projects acquired via asset acquiring that have no alternative future use and other R&D expenses. Clinical studies and outside services costs relate primarily to services performed by clinical research organizations and related clinical or development manufacturing costs, materials, and supplies, filing fees, regulatory support, and other third-party fees. Personnel expenses relate primarily to salaries and benefits. R&D expenditures are charged to operations as incurred.
Share-Based Compensation
The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock option awards at the date of grant, which requires the input of highly subjective assumptions, including expected volatility and expected life. Changes in these inputs and assumptions can materially affect the measure of estimated fair value of the Company’s share-based compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. When estimating fair value, some of the assumptions will be based on, or determined from, external data and other assumptions may be derived from the Company’s historical experience with share-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances. The Company accounts for stock option forfeitures as they occur.
The Black-Scholes model, which requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The current stock price is based on the Company’s Nasdaq-listed share price. Expected volatility is based on the historical stock price volatility of the Company’s common stock. Risk-free interest rates were obtained from U.S. Treasury rates for the applicable periods. The Company uses a simplified method for stock options in the expected term.
Net Income (Loss) Per Ordinary Share
Net loss per share requires presentation of basic and diluted earnings per ordinary share on the face of the Statements of Comprehensive Loss for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation to diluted earnings per share. In the accompanying financial statements, basic net loss per share is computed by dividing net loss by the weighted average number of shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares and potentially dilutive outstanding shares during the period to reflect the potential dilution that could occur from ordinary shares issuable through contingent share arrangements and warrants unless the result would be antidilutive.
The dilutive effect of share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase ordinary shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares are included in the denominator of the diluted calculation for the entire period being presented.
9
For the six months ended June 30, 2026 and 2025, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result was anti-dilutive.
| Six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Stock options | ||||||||
| Preferred Stock | ||||||||
| Warrants | ||||||||
| Convertible debt | ||||||||
Recently issued accounting pronouncements not yet adopted
In November 2024, the FASB issued ASU 2024-03 Final Standard on Income Statement: Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance will be effective for us on January 1, 2027. The Company is currently evaluating the impact of adopting ASU 2024-03.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-10.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company’s financial statements.
10
NOTE 3 – DISCONTINUED OPERATIONS
In February 2026, the Board made the decision to close the Company’s colorectal cancer line of business to focus on the pancreatic screening line of business. As a result of that decision, the Board marketed for sale the two groups of assets related to the ColoAlert and NextGen product lines, including the related intellectual property. The decision also resulted in the termination of all employees in the Company’s subsidiary in Germany, with substantially all termination dates between February and May 2026.
The following is a summary of discontinued operations for the three and six months ended June 30, 2026 and 2025:
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Revenue - related party | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Research and development | ||||||||||||||||
| Research and development - related party | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Gain on sales and disposal of assets | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income taxes provision | ||||||||||||||||
| Realized foreign currency translation | ( | ) | ( | ) | ||||||||||||
| Loss from discontinued operation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
11
The following is a summary of the assets and liabilities held for sale as of June 30, 2026 and December 31, 2025:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Trade receivables, net | ||||||||
| Trade receivables - related party | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Total current assets held for sale | ||||||||
| Total assets of discontinued operations held for sale | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accounts payable and accrued expense - related party | ||||||||
| Convertible debt | ||||||||
| Silent partnership | ||||||||
| Intellectual property acquisition liability - related party | ||||||||
| Lease liabilities | ||||||||
| Total current liabilities held for sale | ||||||||
| Total liabilities of discontinued operations held for sale | $ | $ | ||||||
The assets and liabilities are expected to be settled during 2026.
12
The following is a summary of discontinued operations cash flows for the six months ended June 30, 2026 and 2025:
| Six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows From Discontinued Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Realized foreign currency translation | ||||||||
| Depreciation and amortization | ||||||||
| Bad debt expense | ||||||||
| Inventory write-down | ||||||||
| Accretion expense | ||||||||
| Gain on settlement of intellectual property acquisition liability - related party | ( | ) | ||||||
| Gain on settlement of Note payable - silent partnership | ( | ) | ( | ) | ||||
| Gain on sale and disposal of assets | ( | ) | ||||||
| Non-cash lease expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts and other receivable, net | ( | ) | ( | ) | ||||
| Accounts receivable - related party | ||||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Accounts payable and accrued expense - related party | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Proceeds from sales of intellectual properties | ||||||||
| Payment for intangible asset - related party | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Other investing cash flows | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from inter-company loans | ||||||||
| Repayments of convertible debt | ( | ) | ||||||
| Payments on silent partnerships | ( | ) | ) | |||||
| Net cash provided by financing activities | ||||||||
| Effect of changes in exchange rates | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
Sales of IP
On March 28, 2026 the Company closed the sale of the ColoAlert assets to UTR, which included the ColoAlert intellectual property, customer located instrumentation, and certain consumables, and included the transfer of two equipment lease obligations. The purchase price for the assets was $
On April 9, 2026, the Company entered into an asset purchase agreement (the “Agreement”) for the sale of its Next Gen IP to a third-party purchaser incorporated in Italy. Pursuant to the Agreement, the Company sold the Next Gen IP to the buyer for a payment of $
13
NOTE 4 – PREPAID AND OTHER CURRENT ASSETS
Prepaid and other current assets at June 30, 2026 and December 31, 2025, consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid marketing | ||||||||
| Other prepaid expense | ||||||||
| Prepaid stock-based payments | ||||||||
| Security deposit | ||||||||
| VAT receivable | ||||||||
| Prepaid technology support | ||||||||
| $ | $ | |||||||
NOTE 5 – INTANGIBLE ASSETS
Intangible assets at June 30, 2026 and December 31, 2025, consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| BP United license | $ | $ | ||||||
| Pancreatic cancer intellectual property | ||||||||
| Accumulated amortization | ) | |||||||
| $ | $ | |||||||
During the six months ended June 30, 2026 and 2025, the Company recorded amortization expense from continuing operations of $
Licensed Technology
BP United
On May 12, 2026, as amended, the Company entered into a license agreement with BP United for an exclusive, sublicensable, perpetual, fully paid-up, worldwide license (unrestricted field of use) to BP United’s patents, trademarks, trade secrets, and know-how, together with a worldwide non-compete covenant from BP United. The licensed technology is applicable to multiple fields of use and applications, including, without limitation, drones, cyber technology, and other applications as the Company may determine. Consideration for the transaction was $
The Company recognized Licensed Technology of $
14
Pancreatic Cancer Biomarker and Algorithm License Agreement
In March 2025, the Company entered into a license agreement with Liquid Biosciences (“Liquid”) to access and use a portfolio of novel mRNA biomarkers and related algorithms for the detection of pancreatic cancer through blood-based testing. Total consideration for the license is $
The Company capitalized the license costs and recorded the license as an intangible asset, with a corresponding liability for amounts unpaid.
As of December 31, 2025, the impairment assessment did not indicate any impairment of an indefinite -lived intangible asset, and the Company concluded that the recoverability of an indefinite -lived intangible asset was not affected.
During the six months ended June 30, 2026, the Company paid $
NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities at June 30, 2026 and December 31, 2025, consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Payroll liabilities | ||||||||
| $ | $ | |||||||
Retirement and Pension Plans
The Company maintains a defined contribution plan in the United States under Section 401(k) of the Internal Revenue Code. The plan covers eligible employees, and participants may elect to make contributions subject to applicable limits. The Company does not make employer contributions to the plan. Accordingly, expense was recognized for employer contributions for the three and six months ended June 30, 2026 and 2025.
In Germany, the Company participates in government-mandated pension and social security programs. Contributions to these plans are required by law and are based on a percentage of employee compensation. The Company’s obligation is limited to the statutory contributions, which are recognized as expense in the period in which the related payroll costs are incurred. The Company has no further obligations beyond these contributions.
Total pension and related expense for the six months ended June 30, 2026 and 2025 was approximately $
NOTE 7– LOAN PAYABLE
In April 2026, the Company entered into premium finance agreement to pay Director and Officer insurance. The loan repayment is $
15
In November 2025, the Company entered into premium finance agreement to pay Director and Officer insurance. The loan repayment is $
In November 2024, the Company entered into premium finance agreement to pay Director and Officer insurance. The loan repayment is $
The Company repaid $
NOTE 8 – SHAREHOLDERS’ EQUITY
Authorized shares
In February 2026, the Company’s authorized shares increased to
On April 22, 2026, the Company’s authorized shares increased to
As of June 30, 2026, the Company’s authorized shares consists of
Preferred shares
The Company designates the preferred shares with a par value of €
| ● |
| ● |
| ● |
| ● |
| ● |
16
On February 13, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Mr. David Lazar that provides for the sale in a private placement of
Simultaneous to entering into the Purchase Agreement, the First Closing Shares were issued at a price of $
In connection with the investment, the Board appointed Mr. Lazar a temporary non-executive director and the Chair of the Board for a term ending on the date of the Company’s first general meeting held after the date of the Purchase Agreement. In connection with the Investment, the Company entered into a Settlement Agreement and General and Mutual Releases (collectively, the “Settlement Agreements”) with two of the Company’s officers and three of the Company’s directors. The Settlement Agreements provide that upon the Final Closing, (i) the applicable director or officer shall generally release the Company from any claims, actions, or losses that such person may have against them and (ii) the Company shall similarly release such officer or director from any claims, action or losses that the Company may have against such person, provided that the Company remain obligated pursuant to maintain D&O insurance coverage, or a D&O tail policy, a that the Company make a payment to such person for any and all accrued and unpaid salary, Board approved bonus, twelve months healthcare continuation and such person’s contractual severance payment. The aggregate payments that the Company made in connection with the Settlement Agreements to officers and directors of the Company are approximately $
The Company evaluated the preferred shares under ASC 480 and ASC 815-40 and determined they meet permanent equity because they are not redeemable and do not embody an unconditional obligation to deliver cash or other assets. Further, the conversion features were determined to be indexed to its own stock and are to be classified in shareholders’ equity. In March 2026, Mr. Lazar advanced $
17
The following table summarizes the preferred share transactions, as disclosed on our Condensed Consolidated Statement of Changes in Shareholders’ Equity:
| Three months ended | Six months ended | |||||||||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
| Series A Preferred Share | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Sale of preferred shares | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Series B Preferred Share | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Sale of preferred shares | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Series C Preferred Share | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Sale of preferred shares | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Series D Preferred Share | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Sale of preferred shares | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Series E Preferred Share | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Sale of preferred shares | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ||||||||||||||||||||||||||||
18
Voting and Dividends
Holders of ordinary and preferred shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. The Company has not declared any dividends as of June 30, 2026 and December 31, 2025.
Equity Distribution Agreement
On October 3, 2025, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”) with Maxim Group LLC (the “Sales Agent”), pursuant to which the Company may elect to sell, from time to time through the Sales Agent, the Company’s ordinary shares, having an aggregate offering amount of up to $
During the six months ended June 30, 2026, the Company issued ordinary shares and ordinary shares to be issued as follows:
| ● |
| ● |
| ● |
| ● |
| ● |
| ● |
During the six months ended June 30, 2025, the Company issued ordinary shares as follows:
| ● |
| ● |
| ● |
Carve out plan
On February 22, 2024, the Company’s Compensation Committee approved the carve-out plan (the “COP”) of Mainz Biomed USA, Inc. (“Mainz USA”) and the Board of Directors of Mainz USA approved the COP. The purpose of the COP is to promote the interests of Mainz USA by providing a payment opportunity to individuals providing services to Mainz USA upon the consummation of a corporate transaction or series of transactions resulting in a change of control of Mainz USA or the Company (a “Change of Control” and the completion of a Change of Control, the “Closing”).
19
Payment under the COP is based principally upon the carve-out pool amount which is equal to
Under the COP, participants may receive transaction carve-out equal to the carve-out pool amount multiplied by each participant’s carve-out percentage specified in such participant’s participation acknowledgment less that participant’s equity offset, as defined under the COP. Subject to the terms of the COP, payments under the COP will generally be paid in the same form (or forms) as the consideration received by shareholder of the Company in respect of their Company equity securities due to the change of control. The Compensation Committee had allocated
Stock options
In 2021, the Company’s shareholders adopted the Company’s 2021 Omnibus Incentive Plan (the “2021 Plan”). Under the 2021 Plan, the Company are authorized to issue equity incentives in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units, share appreciation rights, performance units or performance shares under separate award agreements. Under the 2021 Plan, the aggregate number of shares underlying awards that the Company could issue cannot exceed
In 2022, the Company’s shareholders adopted the Company’s 2022 Omnibus Incentive Plan (the (“2022 Plan”). Under the 2022 Plan, the Company are authorized to issue equity incentives in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units, share appreciation rights, performance units or performance shares under separate award agreements. Under the 2022 Plan, the aggregate number of shares underlying awards that the Company could issue cannot exceed
In 2025, the Company’s shareholders adopted the Company’s 2025 Omnibus Incentive Plan (“the 2025 Plan”). Under the 2025 Plan, the Company are authorized to issue equity incentives in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units, share appreciation rights, performance units or performance shares under separate award agreements. Under the 2025 Plan, the aggregate number of shares that may be issued under all awards under the 2025 Plan will automatically increase on a quarterly basis on the first day of each quarter beginning on July 1, 2025 such that the aggregate number of Shares that may be issued under all awards under the Plan equals
During the three months ended June 30, 2026 and 2025, the Company recorded stock option expense (recapture of expense) of ($
20
A summary of activity during the six months ended June 30, 2026, as follows:
| Stock options | Weighted- Average | Weighted- Average | ||||||||||
| Outstanding | Exercise Price | Life (years) | ||||||||||
| Balance as of December 31, 2025 | $ | |||||||||||
| Grants | - | |||||||||||
| Forfeited | ( | ) | - | |||||||||
| Cancelled | ( | ) | - | |||||||||
| Expired | - | |||||||||||
| Balance as of June 30, 2026 | $ | |||||||||||
| Exercisable as of June 30, 2026 | $ | |||||||||||
| Expected to vest | $ | |||||||||||
Warrants
A summary of activity regarding warrants excluding pre-funded warrants issued as follows:
| Warrant | Weighted- Average | Weighted- Average | ||||||||||
| Outstanding | Exercise Price | Life (years) | ||||||||||
| Balance as of December 31, 2025 | $ | |||||||||||
| Grants | - | |||||||||||
| Exercised | ) | - | ||||||||||
| Expired | - | |||||||||||
| Balance as of June 30, 2026 | $ | |||||||||||
NOTE 9 - RELATED PARTY TRANSACTIONS
Accounts payable
At June 30, 2026 and December 31, 2025, the Company recorded accounts payable – related party of $ and $
During the period ended June 30, 2026 the Company issued
On March 28, 2026 the Company closed the sale of the ColoAlert assets to UTR, which included the ColoAlert intellectual property, customer located instrumentation, and certain consumables, and included the transfer of two equipment lease obligations. The purchase price for the assets was $
21
NOTE 10 – COMMITMENTS AND CONTINGENCIES
From time to time, the Company is involved in legal proceedings. The Company records a liability for those legal proceedings when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred, however, the amount cannot be reasonably estimated. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.
On March 22, 2024, the Company filed a complaint in the Supreme Court of the State of New York against Boustead Securities, LLC, for breach of contract, unjust enrichment, and a declaratory judgment. Several weeks later, Boustead brought an arbitration against Mainz seeking to collect alleged unpaid compensation for financial services plus shares and warrants pursuant to two agreements. Mainz made an application to the Arbitration Panel requesting an order staying the Arbitration proceeding pending the courts’ final determination of the issues raised in the Supreme Court case, which was granted on September 12, 2024. Prior to the Court’s determination of which venue (the Supreme Court or FINRA Dispute Resolution) is proper to hear the dispute, Boustead agreed to withdraw the arbitration. During 2024 the Company had recorded an accrual for a potential arbitration loss. With the withdrawal of the arbitration the Company reversed that accrual in 2025. Boustead then moved to dismiss Mainz’s claims but has not yet raised any claims in the court action against the Company. Thus, at this time there are no pending claims against the Company related to this action. Should Boustead eventually file claims against the Company, the Company would vigorously defend against all claims. Given that there are no pending claims, there is nothing to predict regarding a possible loss or range of loss that may result from this action. The Company does not believe that any outcome in this matter will have a material impact to its balance sheet or statement of operations in the future.
NOTE 11 – OPERATING EXPENSES
For the three and six months ended June 30, 2026 and 2025, operating expenses consisted of the following:
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| Sales and marketing | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Professional and consulting fees | $ | $ | $ | $ | ||||||||||||
| Share-based Compensation – professional and consulting fees | ||||||||||||||||
| Office expenses | ||||||||||||||||
| Travel and entertainment | ||||||||||||||||
| Marketing and advertising | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| Research and development | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Professional fees | $ | $ | $ | $ | ||||||||||||
| Other expenses | ( | ) | ( | ) | ||||||||||||
| Technology Expense | ||||||||||||||||
| Amortization | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| In-process research and development | ||||||||||||||||
22
On June 11, 2026, the Company entered into a license agreement with LightShift granting an exclusive, worldwide license to LightShift’s patent-protected quantum photonic array (“quantum antenna”) technology to develop, manufacture, and commercialize quantum antenna systems for UAV/drone platforms in defense and national-security applications. Consideration consists of $
The Company recognized IPR&D expense of $
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| General and administrative | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Salaries and benefits | $ | $ | $ | $ | ||||||||||||
| Share-based compensation – salary and benefits | ( | ) | ||||||||||||||
| Professional and consulting fees | ||||||||||||||||
| Stock-based compensation – professional and consulting fees | ||||||||||||||||
| Office expenses | ||||||||||||||||
| Insurance | ||||||||||||||||
| Travel and entertainment | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
NOTE 12 - SEGMENT
Segment reporting
The Company applies the provisions of ASC 280, Segment Reporting. Operating segments are comprised of the components of an entity for which separate information is available to the Company’s chief operating decision maker, or group of decision makers, in determining how to allocate resources and evaluate performance. During the period ending June 30, 2026, the Company consists of reporting segments: genetic diagnostic testing and Quantum Drones.
The Company’s chief operating decision maker (“CODM”) is its .
The accounting policies of the Diagnostic segment and Quantum Drones segment are as described in the summary of significant accounting policies.
23
The following performance measures were used by the CODM:
| Quantum Drones | Genetic Diagnostic | Total | ||||||||||||||||||||||
| Three months ended | Three months ended | Three months ended | ||||||||||||||||||||||
| June 30, | June 30, | June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Sales and marketing | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Research and development | ||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||
| Other expense | ||||||||||||||||||||||||
| Loss from discontinued operations | ||||||||||||||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||
| Quantum Drones | Genetic Diagnostic | Total | ||||||||||||||||||||||
| Six months ended | Six months ended | Six months ended | ||||||||||||||||||||||
| June 30, | June 30, | June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Sales and marketing | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Research and development | ||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||
| Other expense | ||||||||||||||||||||||||
| Loss from discontinued operations | ||||||||||||||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||
| Quantum Drones | Genetic Diagnostic | Corporate | Total | |||||||||||||||||||||||||||||
| June 30, | December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | December 31, | |||||||||||||||||||||||||
| Balance Sheet | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
24
NOTE 13 – SUBSEQUENT EVENTS
Effective as of July 1, 2026, the Board of the Company appointed Louis Buffalino to serve as an independent director until the annual general meeting of the Company to be held in 2027 or until Mr. Buffalino’s successor is duly elected and qualified, or his earlier death, resignation or removal. Mr. Buffalino has also been appointed to each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee of the Board. Mr. Buffalino will receive the Company’s standard compensation for non-employee directors, which is described in the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on June 1, 2026.
Effective as of July 6, 2026, the Board of Directors (the “Board”) of Quantum Cyber N.V.(the “Company”) approved, and Quantum Drones Corporation (“Quantum Drones”), a wholly owned subsidiary of the Company, entered into, an executive employment agreement with Peter O’Rourke (the “Employment Agreement”), effective as of July 1, 2026, pursuant to which Mr. O’Rourke shall serve as the President of Quantum Drones. The Employment Agreement provides for an initial term of twelve months commencing on the Effective Date, followed by six automatic renewal periods unless either party provides at least
On July 15, 2026, Quantum Drones Corporation (“Quantum Drones”), a wholly-owned subsidiary of Quantum Cyber N.V., closed both an Asset Purchase Agreement (the “APA”) and a Purchase and Sale Agreement (the “PSA”) with Arcade Technology LLC and Arcade Realty LLC, Connecticut limited liability companies (“Arcade Technology”). Pursuant to the APA, Quantum Drones purchased from Arcade Technology substantially all the assets of Arcade Technology used in Arcade Technology’s business of providing precision metal stamping services as well as tool design and manufacturing services under the trade name Arcade Metal Stamping (the “Business”), including the trade name “Arcade Metal Stamping,” inventory, furniture, equipment, intellectual property, customer contracts and lists, permits and licenses, phone numbers and email lists, assigned contracts, and goodwill (collectively, the “Acquired Assets”), excluding cash, accounts receivable, and all liabilities (the “Arcade Technology Acquisition”). Pursuant to the PSA the Company also acquired the plant and land on which the Arcade business is located. The Company’s intention is to build out the manufacturing capabilities at the plant for its Quantum Drones platform.
The closing consideration paid by Quantum Drones for the APA and PSA assets was $
On August 5, 2026 the holder of Series A, Series B, Series C and Series D preferred stock converted
During the period from July 1, 2026 to August 13, 2026 the Company issued the following shares and options:
| ● | The Company issued |
| ● | The Company issued |
| ● | The Company issued |
| ● | The Board granted |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes. Some of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to its plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties and assumptions. You may read the “Forward-Looking Statements” section in this quarterly report and the sections entitled “Risk Factors” in other documents that we have filed with the U.S. Securities and Exchange Commission for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
The following discussion refers to our financial results for the three and six months ended June 30, 2026 and 2025. For purposes of this following discussion the terms “we”, ’our” or “us” or “the Company” and similar references refers to Quantum Cyber N.V. (f/k/a Mainz Biomed N.V.) and its affiliates.
Organization and Overview of Operations
We are a technology company focused on developing intelligent, scalable platforms that integrate artificial intelligence (“AI”) and quantum computing to power next-generation control systems for unmanned vehicles, aerial vehicles and underwater vehicles, such as drones, self-driving cars and robotic fleets.
Our platforms are designed to address the fundamental limitations of classical computing approaches to autonomous vehicle control, specifically the inability to solve high-dimensional, multi-objective optimization problems in real time. By pairing AI-driven adaptive perception and decision-making with quantum computing’s capacity to explore vast solution spaces simultaneously, we believe that our systems enable capabilities that are not achievable through conventional approaches alone. We anticipate investing in research and development to power ultimate commercialization of our drone technology.
Our core mission is to accelerate the convergence of AI and quantum technologies to deliver safer, more capable, and more efficient autonomous systems for defense, commercial logistics, disaster response, and critical infrastructure operations. We believe this convergence represents a significant technological frontier of the coming decade.
Historically we had focused on developing and selling in-vitro diagnostic tests for the early detection of cancer. During 2025 and early 2026, our legacy ColoAlert product was marketed and sold in European markets. Since 2020, we have also been developing both a blood and stool test for the early detection of pancreatic cancer. From 2022 to February 2026, we were developing our next generation colorectal cancer screening product, with the intention to launch these products in the future in the United States and in Europe.
In February 2026, the Company’s Board of Directors made the decision to close our colorectal cancer line of business to focus on the pancreatic screening line of business.
On February 13, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Mr. David Lazar that provides for the sale in a private placement of 1,000,000 each of Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares, Series D Preferred Shares and Series E Preferred Shares in two closings, with the second closing completed on April 22, 2026.
In March 2026, the Company announced the appointment of Robert Liscouski as its non-executive Chairman, with David Lazar assuming the position of director and CEO. These changes were made to align the Company’s strategy to expand its business focus in the area of post-quantum cybersecurity, while continuing to pursue the commercialization of its blood-based pancreatic cancer detection product candidate. Effective with its Shareholder meeting in April 2026, the Company changed its name, from Mainz Biomed N.V., to Quantum Cyber N.V. In conjunction with the name change the Company changed its NASDAQ ticker symbol to QUCY.
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Recent Developments
Name and Ticker Symbol Change
In April 2026, the Company changed its name, from Mainz Biomed N.V., to Quantum Cyber N.V. In conjunction with the name change, the Company changed its NASDAQ ticker symbol to “QUCY”.
Business Strategy Expansion
The Company intends to expand its focus to developing intelligent, scalable platforms that integrate artificial intelligence (“AI”) and quantum computing to power next-generation control systems for unmanned vehicles, aerial vehicles and underwater vehicles, such as drones, self-driving cars and robotic fleets. The Company’s aims to accelerate the convergence of AI and quantum technologies to deliver safer, more capable, and more efficient autonomous systems for defense, commercial logistics, disaster response, and critical infrastructure operations.
Colorectal Cancer Screening Divestiture
On March 28, 2026 the Company closed the sale of the ColoAlert assets to UTR, which included the ColoAlert intellectual property, customer-located instrumentation, and certain consumables, and included the transfer of two equipment lease obligations. The purchase price for the assets was $348,966, which reduced the debt owed to UTR of $648,966, resulting in a net payment to UTR of $300,000 at closing.
On April 9, 2026, we entered into an asset purchase agreement (the “Agreement”) for the sale of the Next Gen IP to a third-party purchaser incorporated in Italy. Pursuant to the Agreement, we sold the Next Gen IP to the buyer for a payment of $1.25 million. The sale of the Next Gen IP closed on April 20, 2026.
The transaction represents a strategic shift that has a major effect on the Company’s operations and financial results. Effective January 1, 2025, the colorectal cancer screening business’ financial results are reflected in the Company’s consolidated financial statements as discontinued operations for all periods presented.
Results of Continuing Operations
Comparison of the Three Months Ended June 30, 2026 and 2025
The following table provides certain selected financial information for the periods presented, from our continuing operations:
| Three months ended | ||||||||||||||||
| June 30, | % | |||||||||||||||
| 2026 | 2025 | Change | Change | |||||||||||||
| Revenue | $ | - | $ | - | $ | - | - | |||||||||
| Sales and marketing | $ | 1,458,470 | $ | 857,847 | $ | 600,623 | 70 | % | ||||||||
| Research and development | $ | 4,553,021 | $ | 101,278 | $ | 4,451,743 | 4,396 | % | ||||||||
| General and administrative | $ | 3,877,442 | $ | 670,950 | $ | 3,206,492 | 478 | % | ||||||||
| Total operating expenses | $ | 9,888,933 | $ | 1,630,075 | $ | 8,258,858 | 507 | % | ||||||||
| Loss from operations | $ | (9,888,933 | ) | $ | (1,630,075 | ) | $ | (8,258,858 | ) | (507 | )% | |||||
| Other expense | $ | 183,387 | $ | 51,910 | $ | 131,477 | 253 | % | ||||||||
| Loss from continuing operations | $ | (10,072,320 | ) | $ | (1,681,985 | ) | $ | (8,390,335 | ) | (499 | )% | |||||
| Loss from discontinued operations | $ | (944,160 | ) | $ | (1,797,848 | ) | $ | 853,688 | 47 | % | ||||||
| Net loss | $ | (11,016,480 | ) | $ | (3,479,833 | ) | $ | (7,536,647 | ) | (217 | )% | |||||
| Total comprehensive loss | $ | (11,047,163 | ) | $ | (3,619,959 | ) | $ | (7,427,204 | ) | (205 | )% | |||||
| Basic and dilutive loss per ordinary share | $ | (0.62 | ) | $ | (0.80 | ) | $ | 0.18 | 23 | % | ||||||
| Weighted average number of ordinary shares outstanding | 17,851,499 | 4,369,699 | ||||||||||||||
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Revenue
The Company did not report any revenues for the three months ended June 30, 2026 and the three months ended June 30, 2025.
Research and Development Expenses
Research and development expenses for the three months ended June 30, 2026 were $4,553,021 compared to $101,278 for the three months ended June 30, 2025, an increase of $4,451,743. This increase was the result of $4,258,449 recorded as in-process R&D related to the acquisition of technology for quantum antenna from Project LightShift in June 2026.
Sales and Marketing Expenses
Sales and marketing expenses for the three months ended June 30, 2026, were $1,458,470 compared to $857,847 for the three months ended June 30, 2025, an increase of $600,623. This increase was related to an increase in our marketing, advertising and brand awareness expenses in support of the launch of our quantum drones business.
General and Administrative Expenses
General and administrative expenses for the three months ended June 30, 2026 were $3,877,442 compared to $670,950 for the three months ended June 30, 2025, an increase of $3,206,492. The increased expenses were primarily the result of stock based compensation of $1.5 million and compensation charges of $1.4 million, both related to the recruitment of the management team and staffing for our quantum drones business.
Other Expense
Other expense, net for the three months ended June 30, 2026 was $183,387 compared to $51,910 for the three months ended June 30, 2025, resulting in increased other expenses of $131,477. This increase was primarily the result of decreased interest expense offset by increased other expense for the three months ended June 30, 2026 compared to the same period in 2025.
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table provides certain selected financial information for the periods presented, from our continuing operations:
| Six months ended | ||||||||||||||||
| June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % Change | |||||||||||||
| Revenue | $ | - | $ | - | $ | - | - | |||||||||
| Sales and marketing | $ | 1,740,373 | $ | 2,018,422 | $ | (278,049 | ) | (14 | )% | |||||||
| Research and development | $ | 4,579,321 | $ | 190,026 | $ | 4,389,295 | 2,310 | % | ||||||||
| General and administrative | $ | 6,032,282 | $ | 2,167,152 | $ | 3,865,130 | 178 | % | ||||||||
| Total operating expenses | $ | 12,351,976 | $ | 4,375,600 | $ | 7,976,376 | 182 | % | ||||||||
| Loss from operations | $ | (12,351,976 | ) | $ | (4,375,600 | ) | $ | (7,976,376 | ) | (182 | )% | |||||
| Other expense | $ | (205,939 | ) | $ | (73,842 | ) | $ | (132,097 | ) | (179 | )% | |||||
| Loss from continuing operations | $ | (12,557,915 | ) | $ | (4,449,442 | ) | $ | (8,108,473 | ) | (182 | )% | |||||
| Loss from discontinued operations | $ | (3,540,547 | ) | $ | (4,033,282 | ) | $ | 492,735 | 12 | % | ||||||
| Net loss | $ | (16,098,462 | ) | $ | (8,482,724 | ) | $ | (7,615,738 | ) | (90 | )% | |||||
| Total comprehensive loss | $ | (16,164,241 | ) | $ | (8,459,001 | ) | $ | (7,705,240 | ) | (91 | )% | |||||
| Basic and dilutive loss per ordinary share | $ | (1.08 | ) | $ | (2.17 | ) | $ | 1.09 | 50 | % | ||||||
| Weighted average number of ordinary shares outstanding | 14,842,125 | 3,902,910 | ||||||||||||||
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Revenue
The Company did not report any revenues for the six months ended June 30, 2026 and the six months ended June 30, 2025.
Research and Development Expenses
Research and development expenses for the six months ended June 30, 2026 were $4,579,321 compared to $190,026 for the six months ended June 30, 2025, an increase of $4,389,295. This increase was the result of $4,258,449 recorded as in-process R&D related to the acquisition of technology for quantum antenna from Project LightShift in June 2026.
Sales and Marketing Expenses
Sales and marketing expenses for the six months ended June 30, 2026, were $1,740,373 compared to $2,018,422 for the six months ended June 30, 2025, a decrease of $278,049. This decrease was related to a decrease in our marketing and advertising expenses in line with our decision to exit our colorectal cancer business.
General and Administrative Expenses
General and administrative expenses for the six months ended June 30,
2026 were $6,032,282 compared to $2,167,152 for the six months ended June 30, 2025, an increase of $3,865,130. The increased expenses
were primarily the result of stock based compensation of $1.6 million and compensation charges of $2.0 million, both related to the recruitment
of the management team and staffing for our Quantum Drones business.
Other Expense
Other expense, net for the six months ended June 30, 2026 was $205,939 compared to $73,842 for the six months ended June 30, 2025, resulting in increased other expenses (net) of $132,097. This increase was primarily the result of decreased interest expense offset by increased other expense for the six months ended June 30, 2026 compared to the same period in 2025.
Results of Discontinued Operations
Comparison of the Six Months Ended June 30, 2026 and 2025
| 2026 | 2025 | |||||||
| Revenue | $ | 184,670 | $ | 286,717 | ||||
| Cost of revenue | 63,951 | 97,128 | ||||||
| Gross profit | 120,719 | 189,589 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 405,791 | 330,583 | ||||||
| Research and development | 1,704,714 | 2,865,062 | ||||||
| General and administrative | 1,398,512 | 872,908 | ||||||
| Total operating expenses | 3,509,017 | 4,068,553 | ||||||
| Loss from discontinued operations | (3,388,298 | ) | (3,878,964 | ) | ||||
| Other income (expense) | (152,249 | ) | (154,318 | ) | ||||
| Loss from discontinued operation | $ | (3,540,547 | ) | $ | (4,033,282 | ) | ||
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Total Revenue
Total revenue for the six months ended June 30, 2026 was $184,670 as compared to $286,717 for the six months ended June 30, 2025, a decrease of $102,047. This decrease was attributable to our decision to exit our colorectal cancer screening business in February 2026.
Cost of Revenue and Gross Profit
Cost of revenue for the six months ended June 30, 2026 was $63,951 as compared to $97,128 for the six months ended June 30, 2025, a decrease of $33,177. This decrease was attributable to our decision to exit our colorectal cancer screening business in February 2026. As a result, gross profit decreased by $68,870.
Research and Development Expenses
Research and development expenses for the six months ended June 30, 2026 were $1,704,714 compared to $2,802,258 for the six months ended June 30, 2025, a decrease of $1,097,544. This decrease was driven by a reduction of costs resulting from the wind down of the eAArly Detect 2 clinical study.
Sales and Marketing Expenses
Sales and marketing expenses for the six months ended June 30, 2026, were $405,791 compared to $330,583 for the six months ended June 30, 2025, an increase of $75,208. This increase was related to severance related to the termination of our colorectal cancer screening sales and marketing team.
General and Administrative Expenses
General and administrative expenses for the six months ended June 30, 2026 were $1,398,512 compared to $872,908 for the six months ended June 30, 2025, an increase of $525,604. The increased expenses were primarily the result of severance payments for administration and accounting personnel.
Other Expense
Other expense, net for the six months ended June 30, 2026 was $152,249 compared to $154,318 for the six months ended June 30, 2025, resulting in decreased other expense (net) of $2,069. This decreased other expense was primarily the result of the gain on sale of the NextGen colorectal cancer assets, net of contractual payments and a $683,433 realization of the foreign currency translation adjustment resulting from the wind up of our German subsidiary.
Liquidity and Capital Resources
Our principal liquidity requirements are for working capital and funding operations. We fund our liquidity requirements primarily through cash on hand, and, debt and equity financing. As of June 30, 2026, we had $13,454,652 of cash and cash equivalents, compared to $889,091 as of December 31, 2025.
| June 30, 2026 | December 31, 2025 | |||||||
| Cash | $ | 13,454,652 | $ | 889,091 | ||||
| Cash - continuing operations | $ | 13,376,044 | $ | 701,602 | ||||
| Cash - discontinued operations | $ | 78,608 | $ | 187,489 | ||||
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Lazar Transactions
On February 13, 2026, we entered into a Purchase Agreement with David E. Lazar that provides for the sale in a private placement of:
● (a) 1,000,000 of our series A preferred shares, with a nominal value of €0.01 per share (the “Series A Preferred Shares”), convertible into an aggregate of up to 9 million of our ordinary shares, with a nominal value of €0.01 per share (the “Ordinary Shares”), (b) 1,000,000 of our series B preferred shares, with a nominal value of €0.01 per share (the “Series B Preferred Shares”), convertible into an aggregate of up to 9 million Ordinary Shares and (c) 1,000,000 of our series C preferred shares, with a nominal value of €0.01 per share (the “Series C Preferred Shares” and together with the Series A Preferred Shares and the Series B Preferred Shares, the “First Closing Shares”), convertible, subject to shareholder approval, into an aggregate of up to 9 million Ordinary Shares in exchange for $3 million; and
● (a) 1,000,000 of our series D preferred shares, with a nominal value of €0.01 per share (the “Series D Preferred Shares”), convertible into an aggregate of up to 225 million Ordinary Shares and (b) 1,000,000 of our series E preferred shares, with a nominal value of €0.01 per share (the “Series E Preferred Shares”, together with the Series D Preferred Shares, the “Second Closing Shares”), convertible, subject to shareholder approval, into an aggregate of up to 225 million Ordinary Shares in exchange for an additional $3 million (collectively, the “Investment”).
Simultaneous to entering into the Purchase Agreement on February 13, 2026, Mr. Lazar purchased the First Closing Shares at a price of $1.00 per share for aggregate gross proceeds of $3 million (the “First Closing”). The Purchase Agreement provided that Mr. Lazar will purchase and acquire the Second Closing Shares at a price of $1.50 per share for aggregate gross proceeds of $3 million (the “Second Closing”), subject to the satisfaction of certain conditions to closing as provided in the Purchase Agreement. In March 2026, Mr. Lazar prepaid the $3 million for the Second Closing, with the Second Closing consummating on April 22, 2026, following the receipt of requisite shareholder approval. Pursuant to the Purchase Agreement, the net proceeds of the Investment will be used for our operations, including for general corporate and working capital purposes, for expenses related to the Investment and to satisfy certain agreed upon obligations.
We do not disclose cash flow from discontinued operations separately in the statement of cash flows and disclose cash flow from discontinued operations in the footnotes to the financial statements. The following table summarizes our cash flows from continuing operations, for the six months ended June 30, 2026 and 2025:
| Six months ended | ||||||||||||||||
| June 30, | % | |||||||||||||||
| 2026 | 2025 | Change | Change | |||||||||||||
| Cash used in operating activities | $ | (5,828,696 | ) | $ | (2,277,445 | ) | $ | (3,551,251 | ) | (156 | )% | |||||
| Cash provided by (used in) investing activities | $ | (636,799 | ) | $ | (200,000 | ) | $ | (436,799 | ) | (218 | )% | |||||
| Cash provided by (used in) financing activities | $ | 19,139,937 | $ | (1,868,153 | ) | $ | 21,008,090 | 1,125 | % | |||||||
| Net change in cash during period | $ | 12,674,443 | $ | (4,345,566 | ) | $ | 17,020,009 | 392 | % | |||||||
Cash Flow from Operating Activities
For the six months ended June 30, 2026, cash flows used in operating activities was $5,828,696 compared to $2,277,445 used during the six months ended June 30, 2025. The increase in cash flows used in operating activities of $3,551,251 was primarily the result of increased losses resulting from the investment in operating expenses and working capital to fund the ramp-up of our Quantum Drones business.
Cash Flows from Investing Activities
During the six months ended June 30, 2026, cash flows used in investing activities was $636,799 in investing activities compared to $200,000 used during the six months ended June 30, 2025. The increase in cash flows from investing activities of $436,799 was primarily the result of increased capital expenditures to fund the ramp up of our Quantum Drones business.
Cash Flows from Financing Activities
During the six months ended June 30, 2026, we had cash flow provided by financing activities of $19,139,937 compared to cash flow used in financing activities of $1,868,153 for the six months ended June 30, 2025, an increase of $21,008,090. This increase was primarily the result of the Company’s sale of preferred stock for $6 million and $15.2 million from the exercise of warrants.
The following table summarizes our cash flows from discontinued operations:
| Six months ended | ||||||||||||||||
| June 30, | % | |||||||||||||||
| 2026 | 2025 | Change | Change | |||||||||||||
| Cash used in operating activities | $ | (4,068,404 | ) | $ | (4,346,784 | ) | $ | 278,380 | 6 | % | ||||||
| Cash provided by (used in) investing activities | $ | 899,342 | $ | (248,042 | ) | $ | 1,147,384 | 463 | % | |||||||
| Cash provided by financing activities | $ | 3,091,143 | $ | 4,631,779 | $ | (1,540,636 | ) | (33 | )% | |||||||
| Net change in cash during period | $ | (108,881 | ) | $ | 20,966 | $ | (129,847 | ) | (619 | )% | ||||||
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Cash Flow from Operating Activities
For the six months ended June 30, 2026, cash flows used in operating activities was $4,068,404 compared to $4,346,784 used during the six months ended June 30, 2025. The improvement in cash flows used in operating activities is attributable to a reduction of costs resulting from the wind down of the eAArly Detect 2 clinical study.
Cash Flows from Investing Activities
During the six months ended June 30, 2026, generated net cash flow of $899,342 from investing activities compared to $248,042 used during the six months ended June 30, 2025. The improvement in cash flows from investing activities was the result of the sale of our NextGen colorectal cancer screening assets in April 2026.
Cash Flows from Financing Activities
During the six months ended June 30, 2026, we had cash flow provided by financing activities of $3,091,143 compared to cash flow provided by financing activities of $4,631,779 for the six months ended June 30, 2025, a decrease of $1,540,636. This decrease was primarily the result of the decreased need for intercompany financing to fund operating losses, in line with the Company’s decision to wind down its German subsidiary.
Working Capital Discussion
We had recurring losses, an accumulated deficit totaling $121.0 million and negative cash flows used in operating activities of $9.9 million as of and for the six months ended June 30, 2026. We also had $13.4 million of cash on hand on June 30, 2026, and working capital of $13.7 million.
Historically, the Company has relied upon funds from its stockholders and loans from third parties. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing.
We plan to fund our cash flow and working capital needs through current cash on hand and future debt and/or equity financings which we may obtain through one or more public or private equity offerings, debt financings, government or other third-party funding, strategic alliances or collaboration agreements. During the first half of 2026, the Company completed a $6 million preferred stock offering and received proceeds from the exercise of outstanding stock warrants of $15.2 million.
The Company believes that its currently available cash on hand, together with additional financing described above, will be sufficient to meet its planned expenditures and obligations for at least the one-year period following the issuance of its consolidated financial statements.
Our consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities, the reported revenues and expenses, and the statement of financial position classifications used, that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which require management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
For a discussion of our critical accounting estimates, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 31, 2026 (the “Annual Report”). There have been no material changes to our critical accounting estimates as described in that Annual Report.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.
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Item 3. Quantitative and Qualitative Disclosures about Market Risks
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based on such evaluation, due to a material weakness in our internal control over financial reporting described below, our principal executive officer and principal financial officer concluded our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of such date to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Material Weakness in Internal Control over Financial Reporting
We have not designed written policies and procedures at a sufficient level of precision to support the operating effectiveness of the controls to prevent and detect potential errors, including review of financial reporting. We also did not maintain adequate documentation to evidence the operating effectiveness of certain control activities. Lastly, we did not maintain appropriate access to certain systems and did not maintain appropriate segregation of duties related to processes associated with those systems.
Historically, these control deficiencies resulted in several misstatements to the preliminary financial statements that were corrected and/or deemed immaterial in the aggregate prior to issuance of the financial statements. These control deficiencies create a reasonable possibility that a material misstatement to the financial statements will not be prevented or detected on a timely basis, and therefore we concluded that the deficiencies represent material weaknesses in our internal control over financial reporting and our internal control over financial reporting was not effective as of June 30, 2026.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, we expect to make changes to our internal control over financial reporting in the future to remediate the material weakness identified above.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Since our annual report on Form 10-K for the year ended December 31, 2025 filed on March 31, 2026, we have not been named as a party to any additional legal proceedings, and there are no material updates to any previously disclosed legal proceedings.
Item 1A. Risk Factors
Although we are a smaller reporting company and are not required to provide this information, the following risk factors supplement the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 and in the risk factor disclosure included in our Current Report on Form 8-K filed on May 26, 2026.
We may not successfully execute our strategic transition into AI-enabled autonomous systems, drone technologies, and quantum-related applications.
Our current business strategy involving AI-enabled autonomous systems, drone technologies, cybersecurity applications, quantum optimization technologies, and defense-related operational systems is relatively new and evolving. We have entered into license arrangements and acquisition transactions intended to support our new strategy, including arrangements relating to drone products, manufacturing capabilities, and quantum antenna systems. Our ability to execute this strategy will depend on our ability to develop, integrate, manufacture, commercialize, and sell products and services in markets in which we have limited operating history. We may encounter technological, operational, regulatory, competitive, manufacturing, financing, or integration challenges that delay or prevent commercialization, increase our costs, divert management attention, or prevent us from achieving expected revenue or strategic benefits. If we are unable to execute our strategic transition successfully, our business, financial condition, results of operations, and prospects could be materially adversely affected.
Our business depends on rights obtained from third-party license arrangements, and those arrangements may not produce commercially viable products or may limit our flexibility.
We have entered into license arrangements with third parties, including BP United and Project LightShift, to support our development and commercialization plans. The value of these arrangements depends on, among other things, the validity, enforceability, scope, technical performance, development status, commercial readiness, and market acceptance of the licensed technology. Certain licensed technologies remain subject to development milestones, reporting obligations, field-of-use limitations, funding conditions, sublicensing restrictions, exclusivity conditions, termination provisions, and change-of-control or assignment restrictions. If the licensed technologies do not perform as expected, if required prototypes or development milestones are delayed or not achieved, if exclusivity is lost or narrowed, if we cannot obtain required consents for sublicensing or strategic transactions, or if disputes arise under the license arrangements, our ability to commercialize products, enter into strategic relationships, or complete future transactions could be impaired. Any such impairment could materially adversely affect our business, financial condition, results of operations, and prospects.
We may be unable to establish, scale, or integrate manufacturing capabilities needed to support our new business strategy.
Our amended arrangement with BP United contemplates that we will undertake manufacturing of licensed products ourselves, with BP United providing technical assistance and consulting services related to the manufacturing process. We also pursued the acquisition of manufacturing-related assets and a related property to support our drone products and manufacturing plans. Manufacturing operations can involve substantial risks, including delays in ramp-up, difficulty sourcing components or qualified personnel, quality control issues, equipment or facility limitations, integration challenges, supplier disruptions, cost overruns, and failure to satisfy customer or regulatory requirements. If we are unable to establish, scale, or integrate manufacturing capabilities on a timely and cost-effective basis, our commercialization plans could be delayed or impaired, and our business, financial condition, results of operations, and prospects could be materially adversely affected.
Our recent strategic transactions require significant cash expenditures and share issuances, and we may need additional capital to execute our business plan.
Our license, advisory, acquisition, manufacturing, and commercialization activities require significant cash expenditures, share issuances, and other consideration. We also expect that substantial additional capital may be required to fund research and development, technology acquisitions, commercialization efforts, manufacturing scale-up, hiring, regulatory compliance, and general corporate operations. Future equity issuances, including shares issued as transaction consideration, may dilute existing shareholders and create market overhang, while debt financing could impose restrictive covenants, repayment obligations, or other limitations on our business. If additional capital is not available on acceptable terms or at all, we may be required to delay, reduce, or abandon development, commercialization, manufacturing, acquisition, or strategic initiatives, which could materially adversely affect our business, financial condition, results of operations, and prospects.
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Contractual restrictions, governance arrangements, and third-party consent rights may limit our strategic flexibility.
Our agreements may contain restrictions, consent rights, voting arrangements, or other provisions that affect our ability to operate, commercialize technology, sublicense rights, assign agreements, complete strategic transactions, or respond to changes in our business or market conditions. In addition, certain share issuances may be subject to voting arrangements that increase the voting support available to proposals recommended by our Board of Directors and reduce the relative influence of other shareholders over those proposals. If these restrictions, consent rights, or governance arrangements limit our flexibility, delay transactions, complicate financings or strategic alternatives, or affect the outcome of shareholder votes, our business, corporate governance, financial condition, results of operations, and prospects could be adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
There have been no sales of unregistered equity securities that we have not previously disclosed in filings with the U.S. Securities and Exchange Commission.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Annual Meeting Results
On June 29, 2026, the Company held an annual general meeting of shareholders (the “AGM”).
A total of 13,244,033 of the Company’s ordinary shares, nominal value €0.01 per share (“Ordinary Shares”) and Preferred Shares (as defined below), were present in person or represented by proxy at the AGM. As of the close of business on June 1, 2026, the record date for the AGM, there were (i) 22,767,254 Ordinary Shares, (ii) 1,000,000 Series A Preferred Shares, nominal value €0.01 per share (the “Series A Preferred Shares”), (iii) 1,000,000 Series B Preferred Shares, nominal value €0.01 per share (the “Series B Preferred Shares”), (iv) 1,000,000 Series C Preferred Shares, nominal value €0.01 per share (the “Series C Preferred Shares”), (v) 1,000,000 Series D Preferred Shares, nominal value €0.01 per share (the “Series D Preferred Shares”) and (vi) 1,000,000 Series E Preferred Shares, nominal value €0.01 per share (the “Series E Preferred Shares” and together with the Series A Preferred Shares, the Series B Preferred Shares, the Series C Preferred Shares, and the Series D Preferred Shares, the “Preferred Shares”) issued and outstanding, with each share entitled to one vote. The matters described below were submitted to a vote of the holders of the Ordinary Shares at the AGM. Each proposal is described in detail in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on June 1, 2026 (the “Proxy Statement”). All proposals were approved by the Company’s shareholders at the AGM.
| (1) | To ratify the selection by the board of directors of the Company (the “Board”) and the Audit Committee thereof of Kreston Lentink Audit B.V. (“Kreston Lentink”) to serve as our Dutch independent registered public accounting firm for the fiscal year ending December 31, 2026: |
| For | Against | Abstain | Broker Non-Votes | |||
| 12,696,563 | 368,222 | 179,248 | nil |
| (2) | To adopt the statutory annual accounts for the fiscal year ended December 31, 2025: |
| For | Against | Abstain | Broker Non-Votes | |||
| 6,255,025 | 45,724 | 58,811 | 6,884,473 |
| (3) | To discharge from liability the directors for their management and supervision during the fiscal year ended December 31, 2025: |
| For | Against | Abstain | Broker Non-Votes | |||
| 6,185,697 | 141,402 | 32,461 | 6,884,473 |
| (4) | To extend the authorization of the Board to resolve to issue shares and to grant rights to subscribe for shares: |
| For | Against | Abstain | Broker Non-Votes | |||
| 5,981,752 | 350,705 | 27,103 | 6,884,473 |
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| (5) | To extend the authorization of the Board to limit or exclude pre-emption rights in respect of Ordinary Shares: |
| For | Against | Abstain | Broker Non-Votes | |||
| 5,970,039 | 363,244 | 26,277 | 6,884,473 |
| (6) | To extend the authorization of the Board to acquire Ordinary Shares or depositary receipts thereof: |
| For | Against | Abstain | Broker Non-Votes | |||
| 5,974,960 | 359,377 | 25,223 | 6,884,473 |
| (7) | To extend the authorization of the Board to acquire preferred shares or depositary receipts thereof: |
| For | Against | Abstain | Broker Non-Votes | |||
| 5,969,501 | 363,598 | 26,461 | 6,884,473 |
| (8) | To approve the resolutions of the Board: |
| For | Against | Abstain | Broker Non-Votes | |||
| 6,204,537 | 135,211 | 19,812 | 6,884,473 |
| (9) | To amend the Articles of Association and to authorize the Deed of Amendment of Articles of Association: |
| For | Against | Abstain | Broker Non-Votes | |||
| 6,252,673 | 82,186 | 24,701 | 6,884,473 |
| (10) | To appoint Peter O’Rourke to serve as a non-executive director of the Board of Directors of the Company for a term ending at the close of the annual general meeting of the Company to be held in 2027: |
| For | Against | Abstain | Broker Non-Votes | |||
| 6,266,732 | 80,316 | 12,512 | 6,884,473 |
| (11) | To approve amendments to the Company’s Remuneration Policy: |
| For | Against | Abstain | Broker Non-Votes | |||
| 5,987,057 | 346,254 | 26,249 | 6,884,473 |
For more information about the foregoing proposals, see the Proxy Statement, the relevant portions of which are incorporated herein by reference.
The results reported above are final voting results. No other matters were considered or voted upon at the AGM.
Board of Directors Resignation
On August 11, 2026, Robert Liscouski, a director of the Company, notified the Company of his resignation as a member of the Company’s
Board of Directors (the “Board”) and all committees of the Board thereto, effective as of the same date. Mr. Liscouski’s
resignation from the Board was not in connection with any disagreement with the Company on any matter relating to the Company’s
operations, policies or practices.
Rule 10b5-1 Trading Arrangements
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished herewith. |
| # | Management contract or compensatory plan or arrangement. |
| + | Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the SEC; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 under the Exchange Act for any exhibits or schedules so furnished. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Quantum Cyber N.V. | ||
| Date: August 14, 2026 | By: | /s/ David Lazar |
| Name: | David Lazar | |
| Title: | Chief Executive Officer | |
| Date: August 14, 2026 | By: | /s/ William Caragol |
| Name: | William Caragol | |
| Title: | Chief Financial Officer |
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