# EDGAR Filing Document

**Accession Number:** 0001843714
**File Stem:** 0001079973-25-001840
**Filing Date:** 2025-12
**Character Count:** 176318
**Document Hash:** 808d328f00698ad8d583ccc4596df89a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001079973-25-001840.hdr.sgml**: 20251209

**ACCESSION NUMBER**: 0001079973-25-001840

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 90

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251209

**DATE AS OF CHANGE**: 20251209

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Zapata Quantum, Inc.
- **CENTRAL INDEX KEY:** 0001843714
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 981578373
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41218
- **FILM NUMBER:** 251559822

**BUSINESS ADDRESS:**
- **STREET 1:** 6 LIBERTY SQUARE
- **STREET 2:** #2488
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02109
- **BUSINESS PHONE:** 857-367-9002

**MAIL ADDRESS:**
- **STREET 1:** 6 LIBERTY SQUARE
- **STREET 2:** #2488
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02109

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Zapata Computing Holdings Inc.
- **DATE OF NAME CHANGE:** 20240328

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Andretti Acquisition Corp.
- **DATE OF NAME CHANGE:** 20210201

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q** 

**☒** **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended **September 30, 2025**

Or

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from ___________ to ___________

Commission file number: **000-41218**

---

| |
|:---|
| **Zapata Quantum, Inc.** |
| *(Exact name of registrant as specified in charter)* |

---

---

| | |
|:---|:---|
| **Delaware** | **98-1578373** |
| *(State or other jurisdiction of<br> incorporation or organization)* | *(I.R.S. Employer<br> Identification No.)* |
| **6 Liberty Square, #2488**<br> **Boston, MA** | **02109** |
| *(Address of principal executive offices)* | *(Zip Code)* |

---

---

| |
|:---|
| **(857) 367-9002** |
| *(Registrant's telephone number, including area code)* |

---

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by checkmark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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 (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by checkmark 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 the 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 ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> 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 standard 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 Act). Yes ☐ No☒

As of November 30, 2025, the issuer had 162,580,506 shares of its common stock, $0.0001 par value per share, outstanding.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
|  | **PART I - Financial Information** |  |
| Item 1 | [Financial Statements](#a_001) | 1 |
|  | [Condensed Consolidated Balance Sheets – As of September 30, 2025 (Unaudited) and December 31, 2024](#a_002) | 1 |
|  | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) – For the Three and Nine Months Ended September 30, 2025 and 2024](#a_003) | 2 |
|  | [Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit (Unaudited) – For the Nine Months Ended September 30, 2025 and 2024](#a_004) | 3 |
|  | [Condensed Consolidated Statements of Cash Flows (Unaudited) – For the Nine Months Ended September 30, 2025 and 2024](#a_005) | 4 |
|  | [Notes to Condensed Consolidated Financial Statements (Unaudited)](#a_016) | 5 |
| Item 2 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_006) | 23 |
| Item 3 | [Quantitative and Qualitative Disclosures About Market Risk](#a_007) | 33 |
| Item 4 | [Controls and Procedures](#a_008) | 33 |
|  | **Part II - Other Information** |  |
| Item 1 | [Legal Proceedings](#a_009) | 35 |
| Item 1A | [Risk Factors](#a_0111) | 35 |
| Item 2 | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_010) | 35 |
| Item 3 | [Defaults Upon Senior Securities](#a_011) | 35 |
| Item 4 | [Mine Safety Disclosures](#a_012) | 35 |
| Item 5 | [Other Information](#a_013) | 35 |
| Item 6 | [Exhibits](#a_014) | 35 |
|  |  | 35 |
| [Signatures](#a_015) | [Signatures](#a_015) | 36 |

---

i

**PART I—FINANCIAL INFORMATION** 

**Item 1. Financial Statements.** 

**ZAPATA QUANTUM, INC.** 

**CONDENSED CONSOLIDATED BALANCE SHEETS** 

**(In thousands, except share and per share amounts)** 

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** |  |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $919 | $359 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable ($1,567 and $1,567 from related parties, respectively) | 1595 | 1595 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 323 | 229 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 2837 | 2183 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets | 464 | 550 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $3301 | $2733 |
| **Liabilities, Convertible Preferred Stock and Stockholders' Deficit** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable ($5,504 and $5,504 to related parties, respectively) | $12238 | $13966 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 2442 | 2611 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred legal fees |  | 2620 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 406 | 406 |
| &nbsp;&nbsp;&nbsp;&nbsp;Forward purchase agreement settlement liability |  | 2436 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible promissory notes, current | 3037 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Note payable - related party, current |  | 1618 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 18123 | 23657 |
| &nbsp;&nbsp;&nbsp;&nbsp;Senior secured notes | 1234 | 2237 |
| &nbsp;&nbsp;&nbsp;&nbsp;Note payable - related party, non-current |  | 312 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 19357 | 26206 |
| Commitments and contingencies (Note 16) |  |  |
| Stockholders' deficit: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible preferred stock (Series C), $0.0001 par value; 13,000 and 0 shares authorized at September 30, 2025 and December 31, 2024, respectively; 11,983 and 0 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value; 600,000,000 and 600,000,000 shares authorized at September 30, 2025 and December 31, 2024, respectively; 101,086,506 and 43,589,506 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | 10 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 106551 | 104301 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (143) | (109) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (122474) | (127669) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' deficit | (16056) | (23473) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities, convertible preferred stock and stockholders' deficit | $3301 | $2733 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**ZAPATA QUANTUM, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)**

**(UNAUDITED)** 

**(In thousands, except share and per share amounts)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenue ($0, ($302), $0, and $1,300 from related parties, respectively) | $— | $657 | $— | $3876 |
| Cost of revenue |  | 913 |  | 3241 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit |  | (256) |  | 635 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing ($0, $696, $0 and $2,087 from related parties, respectively) | 6 | 2069 | 6 | 5910 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development |  | 1371 |  | 4378 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 1023 | 3926 | 2287 | 10415 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1029 | 7366 | 2293 | 20703 |
| Loss from operations | (1029) | (7622) | (2293) | (20068) |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (136) | (55) | (379) | (917) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on issuance of forward purchase agreement derivative liability |  |  |  | (4935) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of forward purchase agreement derivative liability |  | 11376 |  | 3148 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on issuance of senior secured notes |  |  |  | (9776) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of senior secured note |  |  | (134) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of forward purchase agreement settlement liability |  |  | 2357 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of liabilities | 4417 |  | 5614 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 13 | (210) | 30 | (1846) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | 4294 | 11111 | 7488 | (14326) |
| Net income (loss) before income taxes | 3265 | 3489 | 5195 | (34394) |
| Provision for income taxes |  | (7) |  | (20) |
| Net income (loss) | $3265 | $3482 | $5195 | $(34414) |
| Net income (loss) per share attributable to common stockholders, basic | $0.03 | $0.09 | $0.08 | $(1.37) |
| Net income (loss) per share attributable to common stockholders, diluted | $0.02 | $0.09 | $0.05 | $(1.37) |
| Weighted-average common shares outstanding, basic | 96159322 | 39400332 | 63669253 | 25060758 |
| Weighted-average common shares outstanding, diluted | 214805649 | 39425636 | 107973714 | 25060758 |
| Net income (loss) | $3265 | $3482 | $5195 | $(34414) |
| Foreign currency translation adjustment | (12) | (12) | (34) | (46) |
| Comprehensive income (loss) | $3253 | $3470 | $5161 | $(34460) |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**ZAPATA QUANTUM, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT** 

**(UNAUDITED)** 

**For the nine months ended September 30, 2025 and 2024** 

**(In thousands, except share amounts)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Convertible Preferred<br> Stock ($0.0001 par<br> value)** | **Convertible Preferred<br> Stock ($0.0001 par<br> value)** | **Common Stock<br> ($0.0001 par value)** | **Common Stock<br> ($0.0001 par value)** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated<br> Other<br> Comprehensive**<br>**Loss** | **Accumulated**<br>**Deficit** | **Total<br> Stockholders'**<br>**Deficit** |
| **Balances at December 31, 2023** | 14222580 | $64716 | 5118553 | $— | $14633 | $(49) | $(89526) | $(74942) |
| Retroactive application of reverse recapitalization | (1221466) |  | (439603) |  |  |  |  |  |
| Adjusted balance, beginning of period | 13001114 | 64716 | 4678950 |  | 14633 | (49) | (89526) | (74942) |
| Issuance of common stock resulting from exercise of stock options |  |  | 47183 |  | 68 |  |  | 68 |
| Stock-based compensation expense |  |  |  |  | 191 |  |  | 191 |
| Loss on issuance of senior secured notes |  |  |  |  | 9776 |  |  | 9776 |
| Issuance of common stock pursuant to the forward purchase agreement |  |  | 500000 |  | (10986) |  |  | (10986) |
| Issuance of common stock related to the conversion of Senior Secured Notes (856,202 shares or $3,853 to related parties) |  |  | 3257876 |  | 14660 |  |  | 14660 |
| Issuance of common stock in connection with debt issuance costs related to senior secured notes and capital markets advisory agreements |  |  | 42372 |  | 352 |  |  | 352 |
| Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization | (13001114) | (64716) | 13001114 | 1 | 64715 |  |  | 64716 |
| Issuance of common stock upon the reverse recapitalization |  |  | 7596206 | 1 | 4477 |  |  | 4478 |
| Issuance costs in connection with the reverse recapitalization |  |  |  |  | (7058) |  |  | (7058) |
| Net loss |  |  |  |  |  |  | (22320) | (22320) |
| Cumulative translation adjustment |  |  |  |  |  | (15) |  | (15) |
| **Balances at March 31, 2024** |  | $— | 29123701 | $2 | $90828 | $(64) | $(111846) | $(21080) |
| Issuance of common stock pursuant to the equity line of credit |  |  | 5419287 | 2 | 5300 |  |  | 5302 |
| Commitment shares issued pursuant to the equity line of credit |  |  | 712025 |  | 1688 |  |  | 1688 |
| Partial early termination of the forward purchase agreement |  |  |  |  | 2500 |  |  | 2500 |
| Stock-based compensation expense |  |  |  |  | 229 |  |  | 229 |
| Net loss |  |  |  |  |  |  | (15576) | (15576) |
| Cumulative translation adjustment |  |  |  |  |  | (19) |  | (19) |
| **Balances at June 30, 2024** |  | $— | 35255013 | $4 | $100545 | $(83) | $(127422) | $(26956) |
| Issuance of common stock pursuant to the equity line of credit |  |  | 7059493 |  | 3112 |  |  | 3112 |
| Commitment shares issued pursuant to the equity line of credit |  |  | 500000 |  | 268 |  |  | 268 |
| Issuance of common stock under the 2024 Plan |  |  | 150000 |  | 85 |  |  | 85 |
| Stock-based compensation expense |  |  |  |  | 199 |  |  | 199 |
| Net loss |  |  |  |  |  |  | 3482 | 3482 |
| Cumulative translation adjustment |  |  |  |  |  | (12) |  | (12) |
| **Balances at September 30, 2024** |  | $— | 42964506 | $4 | $104209 | $(95) | $(123940) | $(19822) |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Convertible Preferred<br> Stock ($0.0001 par<br> value)** | **Convertible Preferred<br> Stock ($0.0001 par<br> value)** | **Common Stock<br> ($0.0001 par value)** | **Common Stock<br> ($0.0001 par value)** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated<br> Other<br> Comprehensive**<br>**Loss** | **Accumulated**<br>**Deficit** | **Total<br> Stockholders'**<br>**Deficit** |
| **Balances at December 31, 2024** |  | $— | 43589506 | $4 | $104301 | $(109) | $(127669) | $(23473) |
| Vesting of restricted stock units |  |  | 25000 |  |  |  |  |  |
| Stock-based compensation expense |  |  |  |  | 44 |  |  | 44 |
| Net income |  |  |  |  |  |  | (770) | (770) |
| Cumulative translation adjustment |  |  |  |  |  | (14) |  | (14) |
| **Balances at March 31, 2025** |  | $— | 43614506 | $4 | $104345 | $(123) | $(128439) | $(24213) |
| Issuance common stock resulting from the Consent agreement |  |  | 34000000 | 3 | 7 |  |  | 10 |
| Issuance common stock resulting from the Conversion Agreements |  |  | 15347000 | 2 | 2116 |  |  | 2118 |
| Stock-based compensation expense |  |  |  |  | 30 |  |  | 30 |
| Net income |  |  |  |  |  |  | 2700 | 2700 |
| Cumulative translation adjustment |  |  |  |  |  | (8) |  | (8) |
| **Balances at June 30, 2025** |  | $— | 92961506 | $9 | $106498 | $(131) | $(125739) | $(19363) |
| Vesting of restricted stock |  |  | 8125000 | 1 | (1) |  |  |  |
| Issuance of Series C Convertible Preferred Stock | 11983 |  |  |  | 12 |  |  | 12 |
| Stock-based compensation expense |  |  |  |  | 42 |  |  | 42 |
| Net income |  |  |  |  |  |  | 3265 | 3265 |
| Cumulative translation adjustment |  |  |  |  |  | (12) |  | (12) |
| **Balances at September 30, 2025** | 11983 | $— | 101086506 | $10 | $106551 | $(143) | $(122474) | $(16056) |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**ZAPATA QUANTUM, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(UNAUDITED)** 

**(In thousands)** 

---

| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended<br> September 30,** | **For the Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net income (loss) | $5195 | $(34414) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest expense | 333 | 816 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash vendor payments |  | 150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on issuance of forward purchase agreement derivative liability |  | 4935 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on issuance of senior secured notes |  | 9776 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of forward purchase agreement derivative liability |  | (3148) |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 116 | 704 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash lease expense |  | 241 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of senior secured note | 134 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of forward purchase agreement settlement liability | (2357) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of liabilities | (5614) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity line of credit commitment expense |  | 1956 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable |  | (43) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current and non-current assets | (7) | (912) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 206 | 6611 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 1009 | (1279) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue |  | 329 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred legal fees |  | (678) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities |  | (252) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (985) | (15099) |
| **Cash flows from investing activities:** |  |  |
| Purchases of property and equipment |  | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities |  | (34) |
| **Cash flows from financing activities:** |  |  |
| Payment of deferred offering costs |  | (2929) |
| Proceeds from the exercise of stock options |  | 68 |
| Issuances of common stock under equity line of credit |  | 8414 |
| Proceeds from the reverse recapitalization |  | 12637 |
| Proceeds from the partial early termination of the forward purchase agreement |  | 2500 |
| Payment of note payable - related party |  | (635) |
| Prepayment for forward purchase agreement |  | (10986) |
| Proceeds from senior and senior secured notes, net |  | 5877 |
| Proceeds from convertible notes, net | 2925 |  |
| Payment of senior secured notes | (1343) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 1582 | 14946 |
| **Effect of exchange rate changes on cash and cash equivalents** | (37) | (43) |
| **Net increase (decrease) in cash and cash equivalents** | 560 | (230) |
| Cash and cash equivalents and restricted cash at beginning of period | 359 | 3469 |
| Cash and cash equivalents and restricted cash at end of period | $919 | $3239 |
| **Supplemental disclosures** |  |  |
| Issuance of common stock in connection with conversion of senior secured notes ($3,853 and $0 from related parties, respectively) | $— | $14660 |
| Issuance of common stock in connection with debt issuance costs related to senior secured notes and capital markets advisory agreements | $— | $352 |
| Issuance of senior secured notes in lieu of payments for offering costs and capital markets advisory agreements | $— | $1150 |
| Deferred offering costs included in accounts payable and accrued expenses and other current liabilities | $— | $2793 |
| Debt issuance costs in included in accrued expenses and other current liabilities | $— | $35 |
| Conversion of convertible preferred stock upon the reverse recapitalization | $— | $64716 |
| Issuance of common stock in connection with the equity line of credit commitment shares | $— | $7561180 |
| Issuance of common stock under 2024 Equity and Incentive Plan | $— | $150000 |
| Issuance of common stock in connection with settlement of liability | $2039 | $— |
| Issuance of common stock in connection with settlement of obligation | $79 | $— |
| Issuance of series C preferred stock in connection with settlement of liability | $4427 | $— |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**ZAPATA QUANTUM, INC.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

**(Dollar amounts in thousands, except per share and share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Nature of the Business and Basis of Presentation** 

Zapata Quantum, Inc., formerly known as Zapata Computing Holdings Inc. and, prior to that as, as Andretti Acquisition Corp. ("AAC") was incorporated as a Cayman Islands exempted company on January 20, 2021. Effective August 21, 2025, Zapata Computing Holdings, Inc. changed its name to Zapata Quantum, Inc. On March 28, 2024, AAC filed an application for deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which AAC was domesticated and continues as a Delaware corporation and changed its name to Zapata Computing Holdings Inc. AAC was formed for the purpose of effecting a merger, consolidation share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. On March 28, 2024 (the "Closing Date" or "Closing"), AAC consummated a business combination with Zapata Computing, Inc. ("Legacy Zapata") pursuant to the Business Combination Agreement by and among AAC, Tigre Merger Sub, Inc. and Legacy Zapata entered into on September 6, 2023 (the "Business Combination Agreement").

Zapata Quantum, Inc. is a holding company whose principal asset is its ownership interest in Legacy Zapata and operates and controls all of the businesses and operations of Legacy Zapata and its subsidiaries. Zapata Quantum, Inc. and its predecessor, AAC, are collectively referred to herein as "Zapata" or the "Company". On the Closing Date, AAC and Legacy Zapata, consummated a business combination (the "Merger") (Note 3) pursuant to the Business Combination Agreement. In connection with the Closing of the Merger, AAC changed its name to Zapata Computing Holdings Inc. The Company's common stock and warrants commenced trading on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the new trading symbols "ZPTA" and "ZPTAW", respectively, on April 1, 2024. The Merger was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, AAC, which was the legal acquirer, was treated as the "acquired" company for financial reporting purposes and Legacy Zapata, a direct wholly owned subsidiary of AAC, was treated as the accounting acquirer.

The Company's equity structure has been restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company's common stock, par value $0.0001, issued to Legacy Zapata's stockholders in connection with the recapitalization transaction. As such, the Company's common stock and the corresponding capital amounts and earnings per share related to Legacy Zapata's common stock prior to the Merger have been retrospectively restated as shares reflecting the conversion upon the closing of the Merger calculated in accordance with the Business Combination Agreement by multiplying each share of Convertible Preferred Stock (as defined below) by 0.9141 (the "Exchange Ratio").

On October 7, 2024, the Board of Directors of the Company approved the cessation of its operations (the "Operational Cessation") due to insufficient financial resources to continue funding ongoing operations and meet existing obligations. In connection with the Operational Cessation, the Company terminated all employees, except for a limited number of personnel retained for a short transitional period to assist with the wind-down of business activities. Following the Operational Cessation, the Company maintained minimal day-to-day operations.

In 2025, the Company undertook restructuring activities aimed at restarting certain aspects of its core business (Note 19).

As of October 31, 2025, following a strategic realignment to refocus on its core quantum mission, the Company will deliver subscription-based solutions to efficiently deploy and accelerate the development of quantum and hybrid quantum-classical computing applications. These solutions include software and software tools supported by services. Its software platform is based on patented technology and supports a wide range of use cases in cryptography, pharmaceuticals, manufacturing, materials discovery and defense. These planned operations are subject to the Company raising sufficient capital. The Company has worked with Fortune 500 enterprises and government agencies to unlock the potential of quantum computing. Prior to October 31, 2025, the Company also offered specialized generative AI solutions which used techniques inspired by quantum physics and were tailored to solving complex industrial problems. These solutions combined software and related services and were subscription-based.

***Going Concern***

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The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. The Company has incurred significant losses and negative cash flows from operations since the inception of Legacy Zapata in November 2017 and expects to continue to incur losses and negative cash flows for the foreseeable future as the Company expands its penetration of the quantum computing application development market.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

The Company is subject to risks and uncertainties similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, risks associated with changes in information technology, and the ability to raise additional capital to fund operations. The Company's long-term success is dependent upon its ability to successfully market, deliver, and scale its quantum computing application development solutions, increase revenue, meet its obligations, obtain additional capital when needed and, ultimately, achieve profitable operations.

Since inception through September 30, 2025, the Company has financed its operations primarily through sales of its Convertible Preferred Stock, as defined below, and common stock and with issuances of Senior Notes and Senior Secured Notes, as defined below. The Company has generated net income of $5,195 for the nine months ended September 30, 2025. As of September 30, 2025 and December 31, 2024, the Company had an accumulated deficit of $122,474 and $127,669, respectively.

The Company's ability to continue as a going concern is dependent upon the Company's ability to raise capital through future equity or debt financing and generate profits from its operations. The Company is pursuing all available options for funding, which include seeking public or private investments and funding through the sale of equity or debt securities .

In 2025, the Company raised an aggregate of $3,000 through the issuance of Convertible Notes and $1,500 through the sale of Series A Convertible Preferred Stock. The proceeds from the Convertible Notes were used to repay one of the Company's outstanding Senior Secured Notes. In addition, in 2025, the Company entered into conversion agreements with certain creditors to settle approximately $9,222 of accounts payable, accrued expenses, and notes payable to related parties. The Company also settled its obligation of $2,436 under the Forward Purchase Agreement through the issuance of shares of the Company's common stock. These activities were undertaken as part of the Company's ongoing efforts to improve the Company's capital structure and provide the liquidity necessary to support restarting certain aspects of its core business (Note 19).

Although Management believes that it will be able to continue to raise funds by sale of its securities to provide the additional cash needed to meet the Company's obligations, the restructuring activities aimed at restarting certain aspects of its core business require substantial funds to implement and there is no assurance that the Company will be able to continue raising the additional capital necessary to continue operations and execute on the Company's business plan.

These factors raise substantial doubt about the Company's ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In addition, the Company's independent registered public accounting firm, in its report on the Company's December 31, 2024 financial statements, has expressed substantial doubt about the Company's ability to continue as a going concern. The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. The Company has incurred significant losses and negative cash flows from operations since the inception of Legacy Zapata in November 2017 and expects to continue to incur losses and negative cash flows for the foreseeable future as the Company expands its penetration of the quantum computing application development solutions market.

**2. Summary of Significant Accounting Policies** 

The Company's significant accounting policies are detailed in "Note 2. Summary of Significant Accounting Policies" of the Company's Annual Report. The Company uses the same accounting policies in preparing its quarterly and annual consolidated financial statements. There have been no material changes to significant accounting policies during the nine months ended September 30, 2025, except as noted below.

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***Use of Estimates***

The preparation of the Company's unaudited condensed 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 the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected within these condensed consolidated financial statements include, but are not limited to, revenue recognition, the Forward Purchase Agreement derivative liability, the valuation of the Company's common stock, and the fair value of stock-based awards. The Company's estimates are based on historical information available as of the date of the unaudited condensed consolidated financial statements and various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ materially from those estimates or assumptions.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

***Convertible Promissory Notes***

The Company accounted for the Convertible Promissory Note (as defined in Note 8) at amortized cost. The Company noted that none of the optional conversion features are required to be bifurcated and separately accounted for as a derivative. Costs incurred related to the issuance of the Convertible Note were recorded as a debt discount, amortized over the term of the Convertible Note and were accounted for as interest expense in other income (expenses) within the condensed consolidated statements of operations and comprehensive income (loss) using the effective interest method.

***Warrant Instruments***

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments' specific terms and applicable authoritative guidance. The assessment considers whether the instruments are freestanding financial instruments, meet the definition of a liability, and whether the instruments meet all of the requirements for equity classification, including whether the instruments are indexed to the Company's own common stock and whether the instrument holders could potentially require net cash settlement in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and, for liability-classified warrants, at each reporting period end date while the warrants are outstanding. As of September 30, 2025 and December 31, 2024, the Company's warrants qualify for equity classification. Accordingly, the warrants were initially measured at fair value and recorded within additional paid-in capital with no subsequent remeasurement.

***Recently Issued Accounting Pronouncements Not Yet Adopted***

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures*, which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

In March 2024, the FASB issued ASU 2024-02, *Codification Improvements—Amendments to Remove References to the Concepts Statements*, which amends the Codification to remove references to various concepts statements and impacts various topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. The guidance in this update is effective for fiscal years beginning after December 15, 2024. The Company is currently in the process of evaluating the effects of this pronouncement on its related disclosures.

In November 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)*: *Disaggregation of Income Statement Expenses*. This ASU requires more detailed disclosures, on an annual and interim basis, about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. This ASU may be applied either prospectively or retrospectively. The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

 **3. Merger** 

On March 28, 2024, the Company completed its planned Merger with Legacy Zapata, pursuant to which Legacy Zapata became a wholly owned subsidiary of the Company.

In connection with the Merger, AAC filed an application for deregistration with the Cayman Islands Registrar of Companies and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the state of Delaware, under which AAC was domesticated and continues as a Delaware corporation (the "Domestication"), changing its name to Zapata Computing Holdings Inc. At the effective time of the Domestication, existing holders of ordinary shares of AAC received 7,596,206 shares of the Company's common stock in exchange for their Class A and Class B ordinary shares held immediately prior to the consummation of the Merger.

With the Closing of the Merger, holders of shares of Legacy Zapata common stock and Legacy Zapata Convertible Preferred Stock received an aggregate of 17,696,425 shares of the Company's common stock, and holders of Legacy Zapata Options received options to purchase an aggregate of 3,016,409 shares of the Company's common stock, determined by giving effect of the Exchange Ratio of 0.9141.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

For accounting purposes, the Merger was accounted for as a reverse recapitalization whereby Legacy Zapata was treated as the accounting acquirer and AAC was treated as the acquired company. This determination was primarily based on the following factors: (i) Legacy Zapata's existing stockholders had the majority of the voting interest in the combined entity with an approximate 63% voting interest; (ii) the combined company's board of directors consisted of seven board members with one board member designated by AAC, and each of the remaining six board members were members of the board of directors of Legacy Zapata and one additional independent board member; (iii) Legacy Zapata's senior management comprised all the senior management of the combined company; and (iv) Legacy Zapata's existing operations comprised the ongoing operations of the combined company. In accordance with guidance applicable to these circumstances, the Merger was treated as the equivalent of Legacy Zapata issuing stock for the net assets of AAC, accompanied by a recapitalization. The net assets of AAC were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger were those of Legacy Zapata.

On April 1, 2024, in connection with the consummation of the Merger, the Company's common stock was listed on the Nasdaq Global Market, and the Public Warrants and the Private Placement Warrants were listed on the Nasdaq Capital Market, under the new trading symbols "ZPTA" and "ZPTAW," respectively. Costs paid by the Company directly attributable to the Merger were $7,058 and were treated as issuance costs and netted against additional paid-in-capital in the condensed consolidated balance sheet of the Company. Additionally, upon the consummation of the Merger, the holders of certain outstanding Senior Secured Notes elected to convert the principal of their notes and accrued interest thereon into 3,257,876 shares of the Company's common stock (856,202 shares to related parties) in accordance with their terms, at a conversion price of $4.50 per share. Aggregate principal and accrued interest of $1,234 on the Senior Secured Notes remains outstanding as of September 30, 2025.

***Merger Consideration***

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The following table reconciles the elements of the Merger to the condensed consolidated statement of cash flows and the condensed consolidated statement of convertible preferred stock and stockholders' deficit. Upon the Closing of the Merger, the Company assumed liabilities of $8,159 from AAC, which was comprised of $223 of accounts payable, $1,987 of accrued expenses and other current liabilities, $2,619 of note payable – related party, and $3,330 of deferred legal fees.

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| | |
|:---|:---|
|  | **March 28, 2024** |
| Cash - AAC Trust (net of redemptions) | $20283 |
| Less: AAC costs paid at Closing | (7317) |
| Less: Notes payable - related party paid at Closing | (330) |
| Net proceeds from the Merger | 12636 |
| Less: Liabilities obtained from AAC | (8159) |
| &nbsp;&nbsp;&nbsp;Merger consideration | $4477 |

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The number of shares of the Company's common stock outstanding immediately following the consummation of the Merger was as follows:

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| | |
|:---|:---|
|  | **Share<br> Ownership** |
| Legacy Zapata equityholders | 17696425 |
| AAC public shareholders | 1846206 |
| AAC Sponsor shares | 5750000 |
| Senior Secured Note holders | 3257876 |
| Additional Shares issued pursuant to the Forward Purchase Agreement | 500000 |
| Capital markets advisors | 42372 |
| &nbsp;&nbsp;&nbsp;Total shares of common stock immediately after the Merger | 29092879 |

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**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

**4. Revenue From Contracts With Customers** 

All revenue from contracts with customers was generated in the U.S. during the three and nine months ended September 30, 2024. No revenue was recognized for the three and nine months ended September 30, 2025 due to the Operational Cessation (Note 1) in the fourth quarter of 2024. Revenue from contracts with customers recognized for the three and nine months ended September 30, 2025 and 2024 consists of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Point in time | $— | $(735) | $— | $— |
| Over time |  | 1392 |  | 3876 |
| Total | $— | $657 | $— | $3876 |

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The Company's balances resulting from contracts with customers include the following:

**Contract Acquisition Costs—** No deferred transaction costs were recorded as of September 30, 2025 or December 31, 2024. There was $0 and $10 of amortization of contract acquisition costs recognized in the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended September 30, 2025 and 2024, respectively, and $0 and $29 recognized in the condensed consolidated statements of operations and comprehensive income (loss) for the nine months ended September 30, 2025 and 2024.

**Accounts Receivable—**As of September 30, 2025 and December 31, 2024, there were accounts receivable due from related parties amounting to $1,567 and $1,567, respectively. As of September 30, 2025 and December 31, 2024, the Company had zero 0 allowance for credit losses.

**Deferred Revenue—**Balances from contracts with customers for the nine months ended September 30, 2025, consist of the following:

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| | | |
|:---|:---|:---|
|  | **End of Period** | **Beginning of<br> Period** |
| Accounts receivable (including $1,567 and $1,567 from related parties at September 30, 2025 and December 31, 2024, respectively) | $1567 | $1567 |
| Unbilled accounts receivable (including $0 and $0 from related parties at September 30, 2025 and December 31, 2024, respectively) | 28 | 28 |
| Deferred revenue | 406 | 406 |

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Balances from contracts with customers for the year ended December 31, 2024, consist of the following:

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| | | |
|:---|:---|:---|
|  | **End of Year** | **Beginning of<br> Year** |
| Accounts receivable (including $562 and $0 from related<br> parties at December 31, 2024 and 2023, respectively) | $1567 | $1341 |
| Unbilled accounts receivable (including $267 and $534 from<br> related parties at December 31, 2024 and 2023, respectively) | 28 | 597 |
| Deferred revenue | 406 | 744 |

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The following table summarizes customers who represent greater than 10% of the Company's total revenue during the three and nine months ended September 30, 2025, as well as customers who represent greater than 10% of the Company's total accounts receivable as of September 30, 2025 and December 31, 2024:

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Percentage of Revenue** | **Percentage of Revenue** | **Percentage of Revenue** | **Percentage of Revenue** | **Percentage of Revenue** | **Percentage of Revenue** | **Percentage of Revenue** | **Percentage of Accounts Receivable** | **Percentage of Accounts Receivable** | **Percentage of Accounts Receivable** | **Percentage of Accounts Receivable** |
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **September 30,<br> 2025** | **September 30,<br> 2025** | **December 31,<br> 2024** | **December 31,<br> 2024** |
|  | **2025** | **2025** | **2024** | **2025** | **2025** | **2024** | **2024** | |  | |  |
| Customer A\* | N/A | \*\* | -46% | N/A | \*\* | 34 | % | 98 | % | 79 | % |
| Customer B | N/A | \*\* | 37% | N/A | \*\* | 23 | % | N/A | \*\* | N/A | \*\* |
| Customer C | N/A | \*\* | 41% | N/A | \*\* | 17 | % | N/A | \*\* | 19 | % |
| Customer D | N/A | \*\* | 16% | N/A | \*\* | 12 | % | N/A | \*\* | N/A | \*\* |
| Customer E | N/A | \*\* | 38% | N/A | \*\* | N/A | \*\* | N/A | \*\* | N/A | \*\* |

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\*Related party

\*\*Less than 10% of total revenue or accounts receivable

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

**5. Fair Value Measurements** 

The following tables present the Company's fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value as of December 31, 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fair Value Measurements at December 31, 2024** | **Fair Value Measurements at December 31, 2024** | **Fair Value Measurements at December 31, 2024** | **Fair Value Measurements at December 31, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash equivalents: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Money market mutual funds | $38 | $— | $— | $38 |
|  | $38 | $— | $— | $38 |

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There were no assets or liabilities measured at fair value on a recurring basis as of September 30, 2025.

For the nine months ended September 30, 2025 and 2023, there were no transfers between Level 1, Level 2 and Level 3.

**6. Accrued Expenses and Other Current Liabilities** 

Accrued expenses and other current liabilities consisted of the following:

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| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| Accrued employee compensation and benefit | $77 | $77 |
| Accrued professional fees | 201 | 1312 |
| Refunds payable | 750 | 750 |
| Accrued contract obligations | 717 |  |
| Other | 697 | 472 |
| Accrued expenses and other current liabilities | $2442 | $2611 |

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**Refund Payable—**The third party purchased a one-year subscription to the Company's Orquestra Enterprise Solution on June 27, 2024, and prepaid $1,000 fee. Following the Company's Operational Cessation (Note 1) and early termination of the subscription, the third party is entitled to a prorated refund of $750 for services it will no longer receive.

**Accrued contract obligations—**On February 12, 2024, the Company entered into Leap Cloud Subscription Agreement. As of September 30, 2025, the Company accrued $717 related to the agreement (Note 16).

**7. Forward Purchase Agreement**

On March 25, 2024, the Company entered into a forward purchase agreement with Sandia. The Forward Purchase Agreement contains (i) an Optional Early Termination provision, which is considered an in-substance put option (the "Optional Early Termination") and (ii) a Variable Maturity Consideration which is the amount of the Settlement Amount Adjustment in excess of the Settlement Amount (the "Variable Maturity Consideration"). The Optional Early Termination and the Variable Maturity Consideration, as combined, are considered a freestanding financial instrument as the Optional Early Termination and the Variable Maturity Consideration cannot be legally detachable and separately exercisable from each other and together, meet the definition of a derivative instrument. Pursuant to the Forward Purchase Agreement, the Seller has the option to early terminate the arrangement in whole or in part by providing written notice to the Company, and the Seller will pay the Company an amount equal to the product of the number of shares that are early terminated and the reset price then in effect. If the Seller exercises an Optional Early Termination, then the Settlement Amount and the Settlement Amount Adjustment to be paid at the Valuation Date will be reduced in proportion to the number of shares subject to the Optional Early Termination. Additionally, the Company may be obligated to pay consideration to the Seller in cash or, under certain circumstances, in shares of the Company's common stock, if the Settlement Amount Adjustment exceeds the Settlement Amount.

The Company recorded the derivative instrument as a liability on its condensed consolidated balance sheets and measured it at fair value with the initial value of the derivative instrument recorded as a loss on issuance of forward purchase agreement derivative liability in the condensed consolidated statements of operations and comprehensive income (loss). The forward purchase agreement derivative liability was subsequently remeasured to fair value at each reporting period, with changes in fair value recognized in the condensed consolidated statements of operations and comprehensive income (loss).

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

Upon the occurrence of the VWAP Trigger Event, which was met when the Company's common stock traded below $1.00 per share for 20 trading days within any 30 consecutive trading-day period, Sandia exercised its right to accelerate the Valuation Date to October 8, 2024. The Company received notice from Sandia accelerating the Valuation Date to October 8, 2024. As a result, the forward purchase agreement was settled and the Company became obligated to pay Sandia $2,436 in cash or shares.

In June 2025, the Company entered into the Conversion Agreement with Sandia. Pursuant to the Conversion Agreement the Company settled its obligation under the Forward Purchase Agreement by issuing 6,591,000 shares of the Company's common stock to Sandia. The Company and Sandia also entered into Universal Resale and Registration Provisions, which include lock-up restrictions limiting the sale, transfer, pledge, or other disposition of the common shares issued. As a result of the conversion, the Company derecognized $2,436 of forward purchase agreement settlement obligation, recorded the issuance of 6,591,000 shares of common stock, and recognized a gain on extinguishment of liabilities of $2,357.

**8. Debt** 

The aggregate principal amount of debt outstanding as of September 30, 2025 and December 31, 2024 consisted of the following:

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| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| Senior secured notes | $1234 | $2237 |
| Convertible promissory notes | 3037 |  |
| Note payable - related parties |  | 1930 |
| Total Debt | $4271 | $4167 |

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Current and non-current debt obligations reflected in the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 consisted of the following:

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| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Note payable - related parties | $— | $1618 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible promissory notes | 3037 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt, current portion | 3037 | 1618 |
| Non-current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Note payable - related parties |  | 312 |
| &nbsp;&nbsp;&nbsp;&nbsp;Senior secured notes | 1234 | 2237 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt, net of current portion | 1234 | 2549 |
| Total Debt | $4271 | $4167 |

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***Senior Secured Notes***

As of December 31, 2023, Legacy Zapata had an outstanding balance of Senior Secured Notes of $8,900, which was netted with $158 of unamortized debt issuance costs. From January 2024 through March 2024, Legacy Zapata issued $7,150 in additional aggregate principal amount of Senior Secured Notes, which includes certain Senior Secured Notes with an aggregate principal amount of $1,150 that were issued to third party advisors in lieu of cash payment for services rendered to Legacy Zapata related to the Merger (Note 3). The Senior Secured Notes issued from January 2024 to March 2024 totaling $6,150 were issued at a substantial premium. Accordingly, the Company accounted for the issuance of these Senior Secured Notes under the amortized cost model, which is the principal plus accrued interest. The remaining Senior Secured Note issued to a third-party advisor totaling $1,000 is carried at redemption value, which is the principal plus accrued interest. The Company issued a Senior Secured Note to a third party for capital market advisory services that vested contingently with the Merger. Upon the satisfaction of the performance condition as described in the agreement, the Company accounted for the Senior Secured Note as a stock-based award granted to a non-employee and measured the award based on the fair value on the Merger date, with the liability portion of the award recorded as Senior Secured Notes at the redemption value, and the excess fair value recorded as a loss on issuance of convertible note within total other expense, net in the condensed consolidated statements of operations and comprehensive income (loss).

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

Upon the Closing of the Merger, a portion of the aggregate outstanding the Senior Secured Notes converted into 3,257,876 shares of the Company's common stock (856,202 shares to related parties). Upon the conversion of the Senior Secured Notes, the principal balance of the debt of $14,207 and associated accrued interest of $453 were converted, resulting in an increase in common stock and additional paid-in capital of $14,660. Certain holders of the Senior Secured Notes, holding $2,000 in aggregate principal, did not convert their Senior Secured Notes into shares of the Company's common stock.

In January 2025, one of the Senior Secured Notes of $1,000 and related accrued and unpaid interest of $158 was assigned from its original note holder to Sandia. The transfer did not modify the terms of the note or its accounting treatment.

In June 2025 the Company repaid the other Senior Secured Notes, which had an original principal amount of $1,000 and accrued interest of $209. In connection with the repayment, the Company recognized a loss on debt extinguishment of $134 during the nine months ended September 30, 2025.

The Company recognizes the remaining Senior Secured Note at amortized cost. As of September 30, 2025, the $1,234 of aggregate principal and accrued interest on the outstanding Senior Secured Notes did not include any associated costs that are being recorded as a debt discount and amortized over the remaining term of the outstanding Senior Secured Notes. The $1,234 of aggregate principal and accrued interest on the outstanding Senior Secured Notes mature on December 15, 2026.

***Consent Agreement***

In June 2025, the Company entered into a consent agreement (the "Consent Agreement") with Sandia. Under the Consent Agreement, Sandia agreed to waive certain rights under its outstanding Senior Secured Note agreement, including default under the Senior Secured Note agreement arising from, or in connection with, the issuance of Convertible Promissory Notes described below, as well as any defaults existing as of the date of the Consent. In exchange for this waiver, the Company issued 34,000,000 shares of its common stock to Sandia. In addition, the Company entered into an intercreditor agreement with the collateral agent and Sandia providing for the relative rights with respect to the secured obligations of the Company.

The Consent was accounted for as a modification of the Senior Secured Note. The fair value of the issued shares of $10 would have been recorded as an increase to the existing debt discount and amortized over the remaining term of the Senior Secured Note. Due to immateriality, the amount was expensed in the nine months ended September 30, 2025.

***Convertible Promissory Notes***

In June 2025 the Company entered into a security purchase agreement with accredited investors pursuant to which the Company sold and issued secured convertible promissory notes ("Convertible Promissory Notes") and warrants to purchase 37,500,000 shares of Common Stock ("Warrants") for total gross proceeds of $3,000.

The Convertible Promissory Notes bear simple interest at a rate of 10.00% per annum and mature in June 2026, unless earlier converted or repaid in accordance with its terms. Interest accrues daily based on a 360-day year and will not be paid in cash prior to maturity unless the Convertible Promissory Notes are repaid before conversion.

The Convertible Promissory Notes may not be prepaid before the maturity date without the written consent of the holder and is secured pursuant to a Security Agreement entered into concurrently with the issuance.

The Convertible Promissory Notes are convertible into 75,000,000 shares of the Company's common stock at the option of the holder at any time prior to repayment. The conversion price is $0.04 per share, subject to customary anti-dilution adjustments for stock splits, stock dividends, combinations, or recapitalizations (the "Conversion Price"). Upon conversion, any unpaid accrued interest is automatically forgiven.

The outstanding principal balance under the Convertible Promissory Notes automatically convert into common stock upon the closing of a Qualified Financing with aggregate gross proceeds of at least $5,000, at the Conversion Price. In the event of a Change of Control prior to maturity, the holder may elect to (i) have the outstanding principal and accrued interest repaid in full or (ii) convert the principal into shares of common stock at the Conversion Price. Accrued interest is forgiven upon such conversion.

Upon the occurrence of an Event of Default and written notice from the holder (or automatically upon certain bankruptcy-related events), the Convertible Promissory Notes become immediately due and payable, together with all accrued interest. Events of Default include (i) failure to pay principal or interest when due, (ii) breaches of covenants in the Convertible Promissory Notes or the Securities Purchase Agreement, (iii) bankruptcy or insolvency events, and (iv) defaults under other indebtedness exceeding $200.

In connection with the issuance of the Convertible Promissory Notes, the Company incurred debt issuance costs totaling $75. These costs were recorded as a reduction to the carrying value of the Convertible Promissory Notes and are amortized to interest expense over the one-year term using the effective interest method. The effective interest rate on the Convertible Note is 12.64%.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

The Company accounts for its Convertible Promissory Notes at amortized cost. No portion of the proceeds was allocated to the conversion features, as the embedded conversion options did not require separate derivative accounting and the notes were not issued at a premium subject to ASC 470. The fair value of the warrants issued in connection with the notes was not material.

The Company recognized approximately $77 and $91 of interest expense for the three and nine months ended September 30, 2025, respectively, which is included within interest expense in the condensed consolidated statements of operations and comprehensive income (loss). Interest expense attributable to the amortization of debt issuance costs incurred with third-party financing arrangements was immaterial for the three and nine months ended September 30, 2025.

***Notes Payable - Related Parties***

 

To finance transaction costs related to the Merger, the Sponsor and certain AAC officers and directors provided working capital loans (the "Notes Payable – Related Party") prior to Closing. These notes were repayable at the Merger Closing without interest or, at AAC's discretion, up to $1,500 could be converted into Private Placement Warrants at $1.00 per warrant (Note 11).

On March 28, 2024, the Notes Payable – Related Party were amended to defer repayment of the outstanding principal and accrued interest of $2,619. The amended terms require repayment in monthly installments, beginning thirty days after the Lincoln Park Registration Statement became effective on April 18, 2024 (Note 10). No note holders elected to convert their loans into warrants at Closing. The notes bear interest at 4.5% per annum and are accounted for at amortized cost.

In June 2025, the Company entered into Conversion Agreements with the note holders of the Notes Payable – Related Party. Pursuant to the Conversion Agreements the Company settled its Notes Payable – Related Party by issuing 5,407,000 shares of the Company's common stock to the note holders. As a result of the conversion, the Company derecognized Notes Payable – Related Party of $1,998, and recorded the issuance of 5,407,000 shares of common stock. As of September 30, 2025, the outstanding balance was $0, with no unamortized debt discount.

As of September 30, 2025, future minimum payments required on the Senior Secured Note and the Convertible Promissory Notes are as follows:

---

| | |
|:---|:---|
| **Year Ending** |<br>**Amount** |
| 2025 (remaining) | $— |
| 2026 | 4271 |
| Total future minimum payments | 4271 |
| Less: imputed interest |  |
| Total Debt | $4271 |

---

 **9. Convertible Preferred Stock**

In connection with the Merger on March 28, 2024, each holder of the Convertible Preferred Stock was converted into the right to receive 0.9141 shares of the Company's common stock. The Company determined that the Merger constituted a deemed liquidation under its charter and, as such, the holders of the Convertible Preferred Stock were entitled to receive an amount per share equal to the greater of i) the applicable original issue price of the applicable series of the Convertible Preferred Stock, plus any dividends declared but unpaid thereon (the "Preference"), or ii) such amount per share as would have been payable had all shares of the Convertible Preferred Stock been converted into common stock immediately prior to the Merger (the "As Converted Amount"). Upon the Closing of the Merger, the Company determined that the As Converted Amount was greater than the Preference and converted 14,222,580 shares of Convertible Preferred Stock into 13,001,114 shares of the Company's common stock. The Company's capital amounts prior to the Merger have been retrospectively restated as shares reflecting the conversion ratio of 0.9141 established in the Merger. Following the Closing, the Company has no shares of Convertible Preferred Stock outstanding.

***Series C Convertible Preferred Stock***

 

In June 2025, the Company entered into a series of conversion agreements (the "Conversion Agreements") with certain creditors. Pursuant to the Conversion Agreements, certain creditors agreed to exchange $4,429 of accounts payable and accrued expenses for the issuance of 11,983 shares of the Company's Series C Convertible preferred stock.

On July 18, 2025, the Company filed the Certificate of Designations of Preferences, Rights and Limitations of the Series C Convertible Preferred Stock of the Company designating and authorizing the issuance of up to 13,000 shares of Series C Convertible Preferred Stock. Subsequently, on November 4, 2025, the Company filed a Certificate of Amendment to the Certificate of Designations to increase the number of authorized and designated shares of Series C Convertible Preferred Stock to 23,000 shares.

On July 22, 2025, the Company issued a total of 11,983 shares of the Company's Series C Convertible Preferred Stock (convertible into 11,983,000 shares of common stock) to two creditors in settlement of $4,429 of accounts payable and accrued expenses pursuant to the Conversion Agreements As a result of the issuance of the Series C Convertible preferred stock, the Company recognized a gain on extinguishment of liabilities of $4,417.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

As of September 30, 2025, the authorized, issued, and outstanding Series C Convertible Preferred Stock and their principal were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  |<br>**Par Value** | **Preferred<br> Stock<br> Authorized** | **Preferred<br> Stock Issued<br> and Outstanding** | **Carrying<br> Value** | **Liquidation<br> Preference** | **Common Stock<br> Issuable Upon<br> Conversion** |
| Series C Preferred Stock | 0.0001 | 13000 | 11983 | $4429 | $— | 11983000 |
|  |  | 13000 | 11983 | $4429 | $— | 11983000 |

---

Each share of Series C Convertible Preferred Stock is convertible into 1,000 shares of common stock of the Company at the election of the holder, subject to certain adjustments and to beneficial ownership limitations. Each share of Series C Convertible Preferred Stock shall be entitled to vote with the Company's common stock on an as-converted basis, subject to beneficial ownership limitations. The holders of Series C Convertible Preferred Stock shall rank pari passu with the holders of common stock with respect to any liquidation, dissolution or winding up of the Company. The Series C Convertible Preferred Stock are not redeemable.

**10. Common Stock**

As of September 30, 2025 and December 31, 2024, the Company had authorized 600,000,000 shares of $0.0001 par value common stock. Each share of common stock entitles the holder to one vote, together with the holders of the Series C Convertible Preferred Stock (on an as-converted basis), on all matters submitted to the stockholders for a vote. The holders of common stock are entitled to receive dividends, if any, as declared by the Company's Board of Directors.

Under the terms of the Company's certificate of incorporation, the Company's Board of Directors is authorized to direct the Company, without any action or vote by its stockholders (except as may be provided by the terms of any class or series of Company preferred stock then outstanding), to issue shares of preferred stock in one or more series without the approval of the Company's stockholders. The Company's Board of Directors has the discretion to determine the rights, powers, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

***Unvested Shares***

 ****

In connection with the Closing on March 28, 2024, 1,129,630 shares of Sponsor Shares became unvested and are subject to the forfeiture pursuant to the closing available cash provisions as described in the sponsor support agreement in contemplation of the Merger. All of the Unvested Shares will become vested if, within three years of the Closing, the volume-weighted average price of the Company's common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period, or if there is a change of control of the Company. If neither of these events occur within three years of the Closing, then the Unvested Shares will be forfeited and shall be transferred by the sponsor and the sponsor co-investor to the Company, without any consideration for such transfer. The Unvested Shares are indexed to the Company's own stock and are therefore classified as equity in the Company's condensed consolidated financial statements. No Unvested Shares vested during the nine months ended September 30, 2025.

***Lincoln Park Purchase Agreement***

 

The Company entered into two equity purchase agreements with Lincoln Park Capital Fund, LLC ("Lincoln Park") on December 19, 2023 (the "2023 Purchase Agreement") and August 13, 2024 (the "2024 Purchase Agreement"). Under the 2023 Purchase Agreement, Lincoln Park committed to purchase up to $75,000 of the Company's common stock over a 36-month period following the Merger Closing. The Company issued 712,025 shares as a $1,688 Commitment Fee on April 11, 2024. A related registration statement covering the shares issuable under the agreement was filed on April 12, 2024 and declared effective on April 18, 2024. As of September 30, 2025, the Company had issued 10,378,780 shares for total proceeds of $7,700 (excluding Commitment Shares).

Under the 2024 Purchase Agreement, Lincoln Park committed to purchase up to $10,000 of common stock over a 24-month period. The Company issued 500,000 Commitment Shares upon execution. The related registration statement was filed on September 3, 2024 and declared effective on September 9, 2024. As of September 30, 2025, the Company had issued 2,700,000 shares for total proceeds of $862 (excluding Commitment Shares).

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

***Restricted Awards***

 ****

During the nine months ended September 30, 2025, 25,000 RSUs and 8,125,000 restricted stock vested. The related shares were issued upon vesting (Note 12).

***Consent Agreement***

In June 2025, the Company entered into Consent Agreement with Sandia under which Sandia waived certain rights and existing defaults under the Senior Secured Note agreement related to the issuance of Convertible Promissory Notes. The Company issued 34,000,000 shares of common stock in exchange for such waiver (Note 8).

***Conversion Agreements***

 ****

In June 2025, pursuant to the Conversion Agreements (Note 9), the Company issued 3,349,000 shares of common stock to certain creditors in settlement of $1,238 of accounts payable and accrued expenses, resulting in a gain on extinguishment of $1,198.

***Settlement of Forward Purchase Agreement***

 ****

In June 2025, the Company issued 6,591,000 shares to Sandia to settle its $2,436 obligation under the Forward Purchase Agreement, resulting in a gain on extinguishment of $2,357 (Note 7).

***Settlement of Notes Payable – Related Party***

In June 2025, the Company issued 5,407,000 shares of common stock to related parties in settlement of notes payable of $1,998 (Notes 8 and 18). The Company and note holders also entered into Universal Resale and Registration Provisions, which include lock-up restrictions limiting the sale, transfer, pledge, or other disposition of the common shares issued.

**11. Warrants** 

***Public Warrants and Private Placement Warrants***

 

As part of AAC's IPO, AAC issued Public Warrants to third-party investors where each whole warrant entitles the holder to purchase one share of AAC's common stock at an exercise price of $11.50 per share. Simultaneously with the closing of the IPO, AAC completed the private sale of Private Placement Warrants to the sponsor, where each warrant allows the holder to purchase one share of AAC's common stock at $11.50 per share. Additionally, pursuant to AACs' sponsor working capital loan agreement, the sponsor may convert up to $1,500 of the outstanding Notes Payable – Related Party into up to an additional 1,500,000 Private Placement Warrants at the price of $1.00 per warrant upon the Closing Date (Note 8). Upon the Closing Date, the option to convert up to $1,500 of the outstanding Notes Payable – Related Party amount into and up to an additional 1,500,000 Private Placement Warrants was not exercised. As of September 30, 2025, 11,499,982 Public Warrants and 13,550,000 Private Placement Warrants remained outstanding.

The Warrants expire on the fifth anniversary of the Merger or earlier upon redemption or liquidation and are exercisable commencing 30 days after the Merger, provided that the Company has an effective registration statement under the Securities Act covering the shares of the Company's common stock issuable upon exercise of the Warrants and a current prospectus relating to them is available or a valid exemption is available.

Public Warrants and Private Placement Warrants are exercisable to purchase one share of the Company's common stock at $11.50 per share. Public Warrants may be redeemed, in whole and not in part, at $0.01 per warrant with 30 days' notice if the Company's common stock trades at or above $18.00 for 20 out of 30 trading days. The Company may require holders to exercise Public Warrants on a cashless basis if the warrants are called for redemption. Private Placement Warrants are substantially identical to the Public Warrants except that (i) they cannot be redeemed by the Company, (ii) they are permanently exercisable on a cashless basis, and (iii) they are not transferable, assignable, or salable until 30 days after the Closing Date, except to permitted transferees. Private Placement Warrants also provide for an alternative issuance in the event of a tender offer or other change-of-control transaction, consistent with the warrant agreement.

As of September 30, 2025 and December 31, 2024, there were 48,999,982 and 11,500,000 Public Warrants outstanding, respectively. As of September 30, 2025 and December 31, 2024, there were 13,550,000 and 13,550,000 Private Placement Warrants outstanding, respectively. The Public Warrants and Private Placement Warrants qualify for equity classification in accordance with ASC 815-40, *Derivatives and Hedging*. Accordingly, the Warrants were initially measured at fair value and recorded within equity with no subsequent measures of changes in fair value.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

***Warrants on Convertible Promissory Notes***

In June 2025 the Company entered into a securities purchase agreement with accredited investors pursuant to which the Company sold and issued secured Convertible Promissory Notes and Warrants to purchase 37,500,000 shares of Common Stock for total gross proceeds of $3,000. The Warrants have a term of five years. The Warrants have an exercise price of $0.04 per share, subject to certain adjustments. At any time when a registration statement registering the resale of shares issuable upon exercise of the Warrants is not effective, the Warrants can be exercised on a cashless basis by the holders.

The Warrants on Convertible Promissory Notes qualify for equity classification in accordance with ASC 815-40, Derivatives and Hedging. Accordingly, the Warrants were initially measured at fair value and recorded within equity with no subsequent measures of changes in fair value.

***August 2025 Warrant***

 ****

On August 29, 2025, the Company issued 1,200,000 warrants with an exercise price of $0.04 per share. The warrants are subject to service conditions and vest monthly over twenty-four months. The warrants are classified as equity, and their fair value was measured using the Black-Scholes option-pricing model. The fair value of the warrants on the date of issuance was immaterial.

**12. Compensation Plans**

In March 2024, the Company adopted the 2024 Equity and Incentive Plan (the "2024 Plan") and there were not material changes to the plan during the nine months ended September 30, 2025. Under the 2024 Plan, the initial maximum number of shares of common stock reserved and available for issuance is 3,491,146 shares, subject to an annual increase on January 1 of each year, beginning January 1, 2025, equal to up to 5% of the total number of shares of common stock outstanding as of the immediately preceding December 31. Pursuant to the plan's annual evergreen provision, the share pool was automatically increased by 5% of the Company's outstanding common stock as of December 31, 2024, resulting in an additional 2,178,225 shares reserved effective January 1, 2025.

As of September 30, 2025, a total of 5,669,371 shares of common stock were reserved for issuance under the 2024 Plan, of which 200,000 shares of common stock were issued and outstanding, 25,000 shares of common stock were issuable upon the vesting of restricted awards, and 5,444,371 shares remained available for future grants.

***Stock Options***

 ****

The Company uses the Black-Scholes option-pricing model to value stock option awards; the following table presents the assumptions used in the Black-Scholes option-pricing model to determine the fair value of stock options granted during the nine months ended September 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| Risk-free interest rate | 3.76% - 3.97% | 4.32% - 4.50% |
| Expected term (in years) | 5.26 - 6.08 | 6.00 |
| Expected volatility | 46.18% - 48.50% | 60.00% |
| Expected dividend yield | 0% | 0% |

---

Stock option activity during the nine months ended September 30, 2025 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of<br> Shares** | **Weighted-<br> Average<br> Exercise Price** | **Weighted-Average<br> Remaining<br> Contractual Term<br> (Years)** | **Aggregate<br> Intrinsic Value** |
| Balance at December 31, 2024 | 2956748 | $2.34 | 6.01 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 24650000 | 0.01 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Forfeited and expired | (1853297) | 2.07 |  |  |
| Balance at September 30, 2025 | 25753451 | $0.08 | 9.78 | $1476 |
| Options vested and exercisable at September 30, 2025 | 703515 | $1.67 | 5.31 | $— |
| Options vested and expected to vest at September 30, 2025 | 25753451 | $0.08 | 10 | $1476 |

---

As of September 30, 2025, there was $376 of total unrecognized compensation cost related to unvested stock options. The Company expects to recognize the unrecognized compensation amount over a remaining weighted-average period of 3.9 years. The fair value of stock options that vested during the nine months ended September 30, 2025 and 2024 was $30 and $91, respectively.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

***Restricted Stock Units ("RSU")***

Nonvested RSU activity during the nine months ended September 30, 2025, is as follows:

---

| | | |
|:---|:---|:---|
|  |<br>**Number of<br> Shares** |<br>**Weighted-<br> Average<br> Grant Date Fair Value** |
| Unvested restricted stock units at December 31, 2024 | 50000 | $0.57 |
| &nbsp;&nbsp;&nbsp;&nbsp;Vested | (25000) | 0.57 |
| Unvested restricted stock units at September 30, 2025 | 25000 |  |

---

As of September 30, 2025, the total unrecognized compensation cost related to unvested restricted common stock was $7. The Company expects to recognize the unrecognized compensation amount over a remaining weighted-average period of 0.25 years. The fair value of RSU that vested during the nine months ended September 30, 2025 was $14.

***Awards Granted outside the Company's Equity Incentive Plan***

 ****

The Company issued 65,000,000 shares of restricted stock in June 2025, which vest monthly over a two-year period from the grant date. The grant-date fair value equals the fair value of the underlying common stock on the grant date.

Nonvested restricted common stock activity during the nine months ended September 30, 2025, is as follows:

---

| | | |
|:---|:---|:---|
|  |<br>**Number of<br> Shares** |<br>**Weighted-<br> Average<br> Grant Date Fair Value** |
| Unvested restricted common stock at December 31, 2024 |  | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 65000000 | 0.0004 |
| &nbsp;&nbsp;&nbsp;&nbsp;Vested | (8125000) | 0.0004 |
| Unvested restricted common stock at September 30, 2025 | 56875000 |  |

---

As of September 30, 2025, the total unrecognized compensation cost related to unvested restricted common stock was $22. The Company expects to recognize the unrecognized compensation amount over a remaining weighted-average period of 1.7 years. The fair value of the restricted stock that vested during the nine months ended September 30, 2025 was $3.

***2024 Employee Stock Purchase Plan ("2024 ESPP")***

The Company adopted the 2024 ESPP in March 2024, and there were no material changes to the plan during the nine months ended September 30, 2025.

***Stock-Based Compensation***

The following table below summarizes the classification of the Company's stock-based compensation expense related to stock options and restricted common stock in the condensed consolidated statements of operations and comprehensive income (loss):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Research and development | $— | $32 | $— | $109 |
| Sales and marketing |  | (6) |  | 27 |
| General and administrative | 41 | 254 | 115 | 546 |
| Cost of revenue | 1 | 4 | 1 | 22 |
|  | $42 | $284 | $116 | $704 |

---

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

**13. Leases** 

***Operating leases***

As a lessee, the Company leases certain office spaces under non-cancelable operating leases located in the United States and Canada. All of the Company's long-term lease agreements expired prior to and as of December 31, 2024. On May 7, 2024, the Company entered into a month-to-month lease in Canada that commenced on June 1, 2024, which was terminated in connection with the Operational Cessation (Note 1).

On July 19, 2024, the Company entered into a six-month office lease for office space in the United States that qualifies as a short-term lease. Operating lease payments are expensed using the straight-line method as an operating expense over the lease term. Lease expense for the nine months ended September 30, 2025 was $3.

**14. Segment Information**

The Company operates and manages its business activities on a consolidated basis and operates in a single reportable and operating segment. The Company's Chief Executive Officer, serving as the Chief Operating Decision Maker ("CODM"), oversees operations on an aggregated basis to allocate resources effectively. In assessing the Company's financial performance, the CODM regularly reviews consolidated net income (loss). Significant expense categories are not presented, as the expense information regularly provided to the CODM is presented on the same basis as the condensed consolidated statements of operations and comprehensive income (loss). The CODM relies on consolidated net loss as a comprehensive measure of the Company, considering all revenues and expenses, including cost of revenue, research and development expenses, general and administrative expenses and sales and marketing expenses, to assess the Company's overall performance and inform strategic decisions on cost control, pricing and investments. Additionally, the CODM also reviews total assets to assess the Company's financial position and resource allocation. The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets. The Company's long-lived assets consist primarily of property and equipment, net. As of September 30, 2025 the Company does not have material long-term assets outside the U.S.

**15. Income Taxes**

For the three and nine months ended September 30, 2025, the Company did not record an income tax provision as it expects to continue generating net operating losses during the year. For the three and nine months ended September 30, 2024, the Company recorded an income tax provision of $7 and $20, respectively. The Company's annual estimated effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the U.S. valuation allowance and the foreign rate differential related to the United Kingdom, Canada, Japan, and Spain.

**16. Commitments and Contingencies**

***Andretti Agreements***

On February 10, 2022, Legacy Zapata entered into a sponsorship agreement for marketing services to be provided by Andretti Autosport Holding Company, LLC (f/k/a Andretti Autosport Holding Company, Inc., "Andretti Global"). The total commitment under the sponsorship agreement is $8,000 and is due and payable over the period of February 2022 through December 2024. Through December 31, 2024, the Company has paid $3,500 under the agreement and for the three and nine months ended September 30, 2025 and 2024, the Company recorded $0, $696, $0 and $2,087 in sales and marketing expense related to the sponsorship agreement. There was $4,500 included in accounts payable as of September 30, 2025 related to the sponsorship agreement.

On March 28, 2024, Legacy Zapata entered into a sponsorship agreement with Andretti Autosport 1, LLC, an affiliate of Andretti Global. The agreement expired on December 31, 2024. Subject to the agreement, Legacy Zapata is responsible for payments under the sponsorship agreement in an amount totaling $1,000.

***Advisory and Other Agreements***

In connection with the Merger, on September 13, 2023, the Company entered into an agreement with a third party for advisory services. In March 2024, the payment terms were amended to provide for a fee of $1,250, to be paid by the issuance of a Senior Secured Note with a principal amount of $1,000 and the remaining $250 in six monthly installments in cash of $42 per month commencing on May 15, 2024. From May 2024 through September 2024 the Company paid $209 to the third party. The Company ceased making payments in the fourth quarter of 2024 due to the Operational Cessation (Note 1), and the remaining balance was subsequently converted into the Company's common stock in the second quarter of 2025.

On February 9, 2024, the Company entered into an engagement letter with an additional third party, as amended on February 27, 2024. The Company agreed to pay the third party a non-refundable cash fee of $1,800, payable by the Company in monthly payments of $113 over the Term (as defined in Note 3) with $300 of such payment waivable if the Company voluntarily prepays $1,500 to the third party prior to December 31, 2024. Upon the Closing of the Merger, the Company recognized $1,800 as transaction costs, which recorded as a reduction in additional paid-in capital. From May 2024 through September 2024 the Company paid $563 to the third party. The Company ceased making payments in the fourth quarter of 2024 due to the Operational Cessation (Note 1), and the remaining balance was subsequently converted into the Company's common stock in the second quarter of 2025.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

The following table reflects the Company's obligations in connection with the aforementioned advisory and other agreements recorded in accounts payable, accrued expenses and other current liabilities, and non-current liabilities within the condensed consolidated balance sheet as of September 30, 2025.

---

| | |
|:---|:---|
| **Year ending** |<br>**Amount** |
| 2025 (remaining) | $1128 |
| Total | $1128 |

---

In the fourth quarter of 2024, due to the Operational Cessation (Note 1), the Company ceased making payments on the advisory and other agreements described above and the remaining balance was subsequently converted into the Company's common stock in the second and fourth quarters of 2025.

***Collaborative Research Agreement*** 

On February 12, 2024, the Company entered into a collaborative research agreement with a third party, pursuant to which the Company and the third party partnered to develop a quantum generative AI application and a hybrid solver over a three-month term. The Company led the development of the application. The third party also contributed $1,000 to the project in the form of a Senior Secured Note, which it did not elect to convert into the Company's common stock upon the Closing of the Merger and remains outstanding.

The collaborative research agreement was effectively terminated in October 2024 in connection with the Company's Operational Cessation (Note 1).

***Quantum Cloud Service Agreement***

On February 12, 2024, the Company entered into an agreement with a third party under which the third party will host the Company's quantum generative AI application on its cloud service and will provide support services for a period of 24 months. The Company has agreed to make payments in an aggregate amount equal to $2,063 to the third party over the agreement term as consideration for services rendered pursuant to the agreement, which will be due and payable from April 2024 to February 2027. On June 27, 2024, the agreement was amended to extend the services through November 2028, and the aggregate fees payable from the Company increased to $4,063 over the extended term. As of September 30, 2025, the Company accrued $717 in accrued expense and the remaining purchase commitment for the cloud services is $3,115.

The cloud service agreement was effectively terminated in October 2024 in connection with the Company's Operational Cessation (Note 1).

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

**17. Net Income (Loss) per Share**

The following table sets forth the computation of basic and diluted net loss per common share attributable to stockholders:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Numerator: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) | $3265 | $3482 | $5195 | $(34414) |
| &nbsp;&nbsp;&nbsp;&nbsp;Undistributed earnings allocated to participating preferred stock | (286) |  | (240) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) attributable to common stockholders, basic | $2979 | $3482 | $4955 | $(34414) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of dilutive securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion of participating preferred stock | 286 |  | 240 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After-tax interest expense on convertible notes | 95 |  | 109 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) attributable to common stockholders, diluted | $3360 | $3482 | $5304 | $(34414) |
| Denominator: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding, basic | 96159322 | 39400332 | 63669253 | 25060758 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of dilutive securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible notes | 75000000 |  | 30330882 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted stock | 35455167 |  | 11233154 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock options | 8191160 | 12881 | 2740425 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs |  | 12423 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding, diluted | 214805649 | 39425636 | 107973714 | 25060758 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) per share attributable to common stockholders, |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.03 | $0.09 | $0.08 | $(1.37) |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.02 | $0.09 | $0.05 | $(1.37) |

---

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated, since their inclusion would be anti-dilutive:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Senior Secured Notes, including accrued interest | 145205 | 253956 | 145205 | 253956 |
| Warrants to purchase common stock | 63749982 | 25049982 | 63749982 | 25049982 |
| Unvested Shares | 1129630 | 1129630 | 1129630 | 1129630 |
| Stock options to purchase common stock | 1253451 | 3527334 | 1253451 | 3606584 |
| Restricted stock units | 25000 |  | 25000 | 450000 |
|  | 66303268 | 29960902 | 66303268 | 30490152 |

---

**18. Related Party Transactions** 

A former member of the Board of Directors of Legacy Zapata that left the Board of Directors in March 2024 also provided consulting services to the Company. For each of the nine months ended September 30, 2025 and 2024, the Company remitted fees of $0 and $15 to the member of its Board of Directors for these services.

One of AAC's affiliates, Andretti Global, has preexisting contractual relationships with Legacy Zapata. In February 2022, Andretti Global entered into i) an enterprise solution subscription agreement and ii) a sponsorship agreement with Legacy Zapata (Note 16), both of which expire on December 31, 2024. During the three and nine months ended September 30, 2025 and 2024, the Company recorded $0, ($302), $0 and $1,300 in revenue related to the enterprise solution subscription agreement.

For the three and nine months ended September 30, 2025 and 2024, the Company recorded $0, $696, $0 and $2,087 in sales and marketing expense related to the sponsorship agreement. The Company recognizes expense for the agreement over the period of service. The remaining committed future payments under the sponsorship agreement at September 30, 2025 include $4,500 in accounts payable at September 30, 2025. There was $1,567 and $1,567 due from related parties as of September 30, 2025 and December 31, 2024 and $5,504 and $5,504 of payables due to related parties in connection with these agreements as of September 30, 2025 and December 31, 2024, respectively.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

On March 28, 2024, Legacy Zapata entered into a sponsorship agreement with Andretti Autosport 1, LLC, an affiliate of Andretti Global, which expires on December 31, 2024. Legacy Zapata is responsible for payments under the sponsorship agreement total $1,000.

On March 28, 2024, Legacy Zapata entered into an Order Form under the February 2022 enterprise solution subscription agreement with Andretti Global. Pursuant to the agreement, Andretti Global agreed to pay Legacy Zapata a total of $1,000, subject to Legacy Zapata's payment of the sponsorship fee to Andretti Autosport 1, LLC. Following the Operational Cessation (Note 1), the agreement was terminated and no payments were made.

In January 2025, a Senior Secured Note with $1,157 of principal and accrued interest was assigned to Sandia with no change to its terms. In June 2025, the Company issued 34,000,000 shares under a Consent Agreement in exchange for Sandia's waiver of certain rights and defaults under the Senior Secured Note agreement. In June 2025, the Company issued 6,591,000 shares to Sandia to settle its $2,436 obligation under the Forward Purchase Agreement, resulting in a gain on extinguishment of $2,357.

**19. Subsequent Events**

The Company has evaluated all events subsequent to September 30, 2025 and through December 9, 2025, which represents the date these unaudited condensed consolidated financial statements were available to be issued.

***Appointment of Certain Officers and Compensatory Agreements of Certain Officers***

 ****

On October 8, 2025, the Company appointed Mr. William Klitgaard to the Board of Directors and named him as the sole member of the Audit Committee. In connection with his appointment, the Company granted Mr. Klitgaard the following compensation: (i) a grant of 1,000,000 five-year stock options, vesting in equal monthly increments over a two-year period, subject to continued services to the Company as of each applicable vesting date, with an exercise price of $0.08, (ii) cash compensation of $100 per year for services as director, and (iii) additional cash compensation of $25 per year for services as a chair of the Audit Committee of the Company, with both cash grants subject to Mr. Klitgaard's continued service to the Company as of each applicable payment date.

On October 9, 2025, the Company appointed Mr. Clark Golestani, a director, to serve as Chairman of the Board of Directors. In connection with his appointment, the Company granted Mr. Golestani 1,000,000 five-year stock options with an exercise price of $0.08, vesting in equal monthly increments over a two-year period, subject to Mr. Golestani's continued service to the Company as of each applicable vesting date.

On October 9, 2025, the Company appointed Mr. Sumit Kapur, Chief Executive Officer of the Company, to the Board of Directors. In connection with his appointment, the Company granted Mr. Kapur 1,000,000 five-year stock options with an exercise price of $0.08, vesting in equal monthly increments over a two-year period, subject to Mr. Kapur's continued service to the Company as of each applicable vesting date. On October 9, 2025, in connection with Mr. Kapur's services as Chief Executive Officer, the Company also granted Mr. Kapur 5,000,000 five-year stock options with an exercise price of $0.08, vesting in equal monthly installments over four years, subject to his continued services to the Company as of each applicable vesting date.

***Conversion Agreements and Universal Resale and Registration Provisions***

 

In October 2025, the Company entered into a series of conversion agreements with certain of its creditors. Pursuant to the Conversion Agreements certain creditors agreed to exchange an aggregate of approximately $1,558 of accounts payable and accrued expenses into 4,619,000 shares of the Company's common stock.

*Universal Resale and Registration Provisions*

In connection with the Conversion Agreements, the Company and counterparties who received common stock or preferred stock entered into certain Universal Resale and Registration Provisions pursuant to which such recipients agreed to certain lock-up provisions restricting and limiting their sale, transfer, pledge, or disposal of any shares of common stock held by or issuable to such recipients.

***Series A Convertible Preferred Stock***

 ****

In October and November 2025, the Company entered into securities purchase Agreements with accredited investors, pursuant to which the Company offered and sold 15,000 shares of the Company's Series A Convertible Preferred Stock at a purchase price of $100 per share for total gross proceeds of $1,500.

**ZAPATA QUANTUM, INC.**<br>**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**<br>**(UNAUDITED)**<br>**(Dollar amounts in thousands, except per share and share amounts)**<br>

On October 23, 2025, the Company filed the Certificate of Designations of Preferences, Rights and Limitations (the "Certificate of Designations") of the Series A with the Delaware Secretary of State designating and authorizing the issuance of up to 15,000 shares of Series A Convertible Preferred Stock.

Each share of Series A is convertible into 1,000 shares of common stock of the Company at the election of the holder, subject to certain adjustments and to beneficial ownership limitations. Each share of Series A shall be entitled to vote with the Company's common stock on an as-converted basis, subject to beneficial ownership limitations. All shares of capital stock of the Company, both common stock and any other series of preferred stock, shall be junior in rank to all shares of Series A with respect to payments upon the liquidation, dissolution, and winding up of the Company.

***Forbearance Agreement***

On October 22, 2025, the Company entered into a forbearance agreement (the "Forbearance Agreement") with a third-party creditor related to outstanding invoices totaling approximately $3,168 (the "Overdue Amount"). Pursuant to the Forbearance Agreement, 50% of the Overdue Amount (approximately $1,584) was extinguished and replaced with contingent obligations (the "Contingent Obligations"). The Company agreed to pay up to two contingent payments, each equal to 25% of the Overdue Amount (approximately $792), upon the completion of capital-raising transactions generating at least $45 million and $55 million, respectively, in aggregate proceeds. If the specified financing thresholds are not achieved, the corresponding contingent payments will not become due, and the related obligations will be permanently extinguished.

The remaining 50% of the Overdue Amount (approximately $1,584) (the "Remaining Overdue Amount," and together with the Contingent Obligations, the "Obligations") will continue to be owed, and the creditor has agreed to temporarily forbear from enforcing collection during the forbearance period.

Beginning May 1, 2025, any unpaid portion of the Obligations will accrue a late charge at a rate equal to the lesser of 0.8% per month or the maximum rate permitted by law. The forbearance period will terminate—and the Remaining Overdue Amount, together with any accrued late charges, will become immediately due and payable—upon the occurrence of certain "Forbearance Termination Events," including specified capital-raising or asset-sale transactions, defaults, or insolvency events.

**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 unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties and assumptions. You should read the "Forward-Looking Statements" and "Risk Factors" sections of this Quarterly Report on Form 10-Q, which describe factors or events that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For periods prior to the closing of the Merger (as defined below), the use of "our," "we", the "Company" and words of similar import in this Item 2 refer to Zapata Quantum, Inc. ("Zapata", or "Legacy Zapata") or Andretti Acquisition Corp. ("AAC"), as the context requires.*

 

**Cautionary Note Regarding Forward-Looking Statements**

This Report contains forward-looking statements, including statements regarding our expectations for prospective future growth, operating results and financial condition, potential future trends and developments within our industry and the U.S. and global economies generally, plans and expectations for our future business plan and capital raising efforts, expectations and plans with respect to our products and services including the potential market for, timing, features, and demand for such products and services, and liquidity and sources of capital. Forward-looking statements are prefaced by words such as "anticipate," "expect," "plan," "could," "may," "will," "should," "would," "intend," "seem," "potential," "appear," "continue," "future," believe," "estimate," "forecast," "project," and similar words. We have based these forward-looking statements largely on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. We caution you, therefore, against relying on any of these forward-looking statements.

Our actual results may differ materially from those contemplated by the forward-looking statements for a variety of reasons, including, without limitation, the possibility that estimates, projections and assumptions on which the forward-looking statements are based prove to be incorrect, our ability to raise the necessary capital to re-establish material operations and generate revenue and the terms and timing of any related transactions, central bank interest rates and future interest rate changes, the risks arising from the impact of inflation, tariffs, the deterioration of the labor market of the United States, a recession which may result on the Company's business, prospective customers, and on the national and global economy, our ability to attract homeowners to our products and services, the potential for regulatory changes impacting quantum computing, artificial intelligence, data privacy and other areas that impact the Company's business, and the ability of us and third parties on which we depend to comply with applicable regulatory requirements, the risk that software and technology infrastructure on which we depend fail to perform as designed or intended, and the risks and uncertainties disclosed in our other reports and documents filed with the SEC. Any forward-looking statement made by us in this presentation speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

**Overview** 

Zapata Quantum, Inc., formerly known as Zapata Computing Holdings Inc., is a leading pure-play hardware-agnostic quantum software company. Following a strategic realignment in 2025, the Company will deliver subscription-based solutions to efficiently deploy and accelerate the development of quantum and hybrid quantum-classical computing applications. Founded in 2017 by researchers from a Harvard University Quantum Computing Lab, Zapata has built one of the industry's most robust intellectual property portfolios in quantum and hybrid quantum-classical computing and algorithmic methods, with over 60 patents, granted and pending, developed over eight years.

Zapata's software platform for quantum computing applications is based on our patented technology and supports a wide range of use cases in cryptography, pharmaceuticals, manufacturing, materials discovery and defense. The Company is the only organization to have participated across all technical areas of the Defense Advanced Research Projects Agency's ("DARPA")'s Quantum Benchmarking program and has worked with Fortune 500 enterprises and government agencies to unlock the potential of quantum computing.

Following a period of broader AI exploration, the Company undertook, in 2024 and 2025, a strategic realignment to refocus on its core quantum mission: developing the software and tooling layer that enables enterprises, governments, and researchers to harness quantum computing for economically meaningful outcomes.

In late 2024 the Company voluntarily elected to temporarily suspend its operations due to its limited capital resources and inability to access adequate liquidity to continue to fund its operations and meet its outstanding debt obligations. In June 2025, the Company commenced debt restructuring and capital raising transactions and the reinstatement of operations by (1) entering into exchange agreements with unsecured creditors pursuant to which such creditors agreed to exchange outstanding obligations payable to them for common stock and certain rights related thereto, and (2) the Company sold convertible notes and warrants for gross proceeds of $3 million. The Company has since been continuing efforts to negotiate and restructure outstanding obligations and raise capital. In the furtherance of recommencing operations, the Company has also entered into advisory agreements with third parties and agreed to compensate such parties in the form of equity and/or cash compensation. See Note 19, Subsequent Events in the notes to the unaudited condensed consolidated financial statements contained in this Report.

Zapata's hardware-agnostic approach and proprietary technology address the "software bottleneck" that limits quantum adoption. The Company's products - Orquestra, Bench-Q, Quantum Graph, and Quantum Pilot - provide the infrastructure and workflow tools that connect problem discovery, algorithm design, and hardware execution. These tools are supported by professional services, partnerships, and licensing programs that collectively form the Company's business model.

**Recent Developments**

***Merger with Andretti Acquisition Corp. ("AAC")***

 ****

On March 28, 2024, we completed our business combination with AAC, pursuant to which, among other things, Legacy Zapata became a wholly owned subsidiary of AAC (the "Merger"). For accounting purposes, the Merger was accounted for as a reverse recapitalization whereby Legacy Zapata was treated as the accounting acquirer and AAC was treated as the acquired company. For additional information regarding the Merger, refer to Note 3 in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

***Forward Purchase Agreement***

 

On March 25, 2024, we entered into the Forward Purchase Agreement with Sandia Investment Management LP, pursuant to which Sandia purchased, prior to the closing of the Merger, 1,000,000 shares of AAC's Class A Ordinary Shares from third parties through a broker in the open market (the "Recycled Shares") and, concurrently with the closing of the Merger, 500,000 shares of our common stock at a purchase price of $10.99 per share (the "Additional Shares").

In April 2024, Sandia exercised their optional early termination rights under the Forward Purchase Agreement, pursuant to which 250,000 shares were terminated and we received payments totaling $2.5 million under the early termination obligation prescribed in the Forward Purchase Agreement.

On October 8, 2024, we received notice from Sandia accelerating the Valuation Date to October 8, 2024. As a result, we became obligated to pay Sandia $2.4 million in cash or shares. In June 2025, we satisfied our obligations under the Forward Purchase Agreement through the issuance of 6,591,000 shares of common stock to Sandia.

For additional information regarding the Forward Purchase Agreement, refer to Note 7 in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

 **

***Enterprise Solution and Sponsorship Agreements with Andretti Global***

 **

One of AAC's affiliates, Andretti Autosport Holding Company, LLC ("Andretti Global") has preexisting contractual relationships with the Company. In February 2022, we entered into i) an enterprise solution subscription agreement and ii) a sponsorship agreement with Andretti Global, both of which expired on December 31, 2024. We considered that these agreements were executed prior to the business combination and were not executed in contemplation of the business combination. Accordingly, Andretti Global was not considered a related party prior to the consummation of the Merger.

On March 28, 2024, we entered into a sponsorship agreement with Andretti Autosport 1, LLC, an affiliate of Andretti Global. The agreement expired on December 31, 2024. Our committed future payments under the sponsorship agreement total $1.0 million.

On March 28, 2024, we entered into an Order Form under the February 2022 enterprise solution subscription agreement with Andretti Global. Pursuant to the agreement, Andretti Global agreed to pay us a total of $1.0 million, subject to our payment of the sponsorship fee to Andretti Autosport 1, LLC. Following the Operational Cessation, the agreement was terminated, and no payments were made.

For additional information regarding the Enterprise Solution and Sponsorship Agreements with Andretti Global, refer to Note 18 in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

***Purchase Agreements with Lincoln Park***

On December 19, 2023, we entered into a purchase agreement (the "2023 Purchase Agreement") with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which Lincoln Park agreed to purchase from us, at our option, an aggregate of up to $75.0 million of our common stock from time to time over a 36-month period following the Commencement Date, subject to certain limitations contained in the 2023 Purchase Agreement.

On August 13, 2024, we entered into a purchase agreement (the "2024 Purchase Agreement") with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us, at our option, an aggregate of up to $10.0 million of shares of our common stock from time to time over a 24-month period upon the satisfaction of certain conditions contained in the 2024 Purchase Agreement. In connection with the Operational Cessation described below, the registration statement in connection with the Purchase Agreement is no longer effective (which is a condition to transactions under the Purchase Agreement).

For additional information regarding the Purchase Agreements with Lincoln Park, refer to Note 10 in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

***Operational Cessation***

On October 7, 2024, our board of directors approved the cessation of our operations (the "Operational Cessation") due to insufficient financial resources to continue funding ongoing operations and meet existing obligations. In connection with the Operational Cessation, our board of directors approved the termination of all our employees, except for a small number of employees retained to administer termination business activities, including Sumit Kapur, our Chief Financial Officer. All such employees were terminated effective October 9, 2024. Following the Operational Cessation, we maintained minimal day-to-day operations.

On October 25, 2024, trading of our common stock and warrants was suspended and removed from the listing and registration on Nasdaq.

***Operations Prior to Operational Cessation***

Prior to the Operational Cessation, we offered specialized generative AI solutions which used techniques inspired by quantum physics and were tailored to solving complex industrial problems. These solutions combined software and related services and were subscription-based. Our approach utilized mathematical techniques from the quantum physics community to make computation more efficient and to create models that have other advantages over conventional methods. Our primary target customers were enterprise organizations, which generally consist of large businesses that have high revenue, the size and resources to dominate a specific market and a significant number of employees.

We had a suite of three subscription-based specialized generative AI offerings that included software and software tools supported by services. These offerings consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Zapata AI Sense ("Sense"): A suite of algorithms and complex mathematical models to enhance analytics and other data-driven applications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Zapata AI Prose ("Prose"): Our set of generative AI solutions based on large language models ("LLMs"), similar to widely used generic chatbot applications but customized to an enterprise's industry and its unique problems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Orquestra: The Company's specialized generative AI application development platform on which it provides Sense and Prose to customers.

***Restructuring Efforts***

As noted above, since the Operational Cessation, we have had minimal day-to-day operations. Management has since concentrated its efforts on restructuring activities aimed at restarting certain aspects of its core business, including capital-raising activities to improve our capital structure and to support the anticipated recommencement of business operations. For additional information regarding these restructuring activities, refer to Note 19, Subsequent Events, in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Since our inception through September 30, 2025, we have financed our operations primarily through sales of our Convertible Preferred Stock and common stock and with issuances of Senior Notes, Senior Secured Notes and Convertible Notes. For the nine months ended September 30, 2025, we generated net income of $5.2 million. As of September 30, 2025 and December 31, 2024, we had an accumulated deficit of $122.5 million and $127.7 million, respectively.

Our ability to continue as a going concern is dependent upon our ability to raise capital through future equity or debt financing and generate profits from our operations. We are pursuing all available options for funding, which include seeking public or private investments and funding through the sale of equity or debt securities.

In 2025, we raised an aggregate of $3.0 million through the issuance of Convertible Notes and $1.5 million through the sale of Series A Convertible Preferred Stock.The proceeds from the Convertible Notes were used to repay one of our outstanding Senior Secured Notes. In addition, in 2025, we entered into conversion agreements with certain creditors to settle approximately $11.7 million of liabilities through the issuance of shares of our common stock. These activities were undertaken as part of our ongoing efforts to improve the Company's capital structure and provide the liquidity necessary to support restarting certain aspects of our core business.

Although we believe that we will be able to continue to raise funds through the sale of our securities to provide the additional funding needed to meet our obligations, the restructuring activities aimed at restarting certain aspects of our core business will require substantial additional funding and there is no assurance that we will be able to continue raising the additional capital necessary to continue operations and execute on our business plan.

These factors raise substantial doubt about our ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. We have evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. We have incurred significant losses and negative cash flows from operations since the inception of Legacy Zapata in November 2017 and expects to continue to incur losses and negative cash flows for the foreseeable future as we expand our penetration of the quantum computing application development solutions market.

See "Liquidity and Capital Resources" below for additional information.

**Components of Our Results of Operations**

***Revenue***

Our revenue is generated primarily from sales of subscriptions to our software platform and related services. Subscriptions to our software platform are offered as stand-ready access to our cloud environment on an annual or multi-year basis. We may also offer consulting services in the form of stand-ready scientific and software engineering services, which are typically only offered in conjunction with our software platform. We evaluate our contracts at inception to determine if the terms represent a single, combined performance obligation or multiple performance obligations.

Under our consulting contracts, our deliverables may include integrated quantum, classical or hybrid quantum-classical computing solutions to our customers or to provide research and development services regarding the potential benefits of these solutions to use cases specified by our customer. Our subscription-based solutions consist of our commitment to provide access to our hosted software platform throughout the contract term along with stand-ready scientific and software engineering services.

Revenue from subscriptions to our software platform to date have only been sold as access to the platform in our hosted environment and are therefore recognized over the contract term on a ratable basis, as the commitment represents a stand-ready performance obligation.

Revenue from consulting services is generally recognized over the contract term as performance is completed on the performance obligations identified. Revenue from stand-ready scientific and engineering services are recognized over the contract term on a ratable basis, as the obligation represents a stand-ready obligation.

From time to time, we may enter into arrangements to build license applications that can be used in conjunction with our software platform. To date, the license application built has been delivered as a perpetual license with associated post-contract support. We recognize the license at the time of deployment, and the related post-contract support over the contracted service period on a ratable basis, as it is provided as a stand-ready service.

Our revenue recognition policies are discussed below under the heading "Critical Accounting Policies and Significant Judgments and Estimates" and Note 2, "Summary of Significant Accounting Policies" to our condensed consolidated financial statements, included elsewhere in this Quarterly Report.

***Cost of Revenue***

Cost of revenue includes expenses related to supporting product offerings. Our primary cost of revenue is personnel costs, including salaries and other personnel-related expense. Cost of revenue also includes costs relating to our information technology and systems, including depreciation, network costs, data center maintenance, database management and data processing costs. We allocate these overhead expenses based on headcount, and thus are reflected in cost of revenue and each operating expense category.

***Sales and Marketing***

Sales and marketing expenses consist primarily of personnel-related costs, including salaries and wages, benefits, commissions, bonuses and stock-based compensation expense for our employees engaged in sales and sales support, business development, marketing, corporate partnerships, and customer service functions. Sales and marketing expenses also include costs incurred for market research, tradeshows, branding, marketing, promotional expense, and public relations, as well as facilities and other supporting overhead costs, including depreciation and amortization. Sales and marketing expenses are primarily driven by investments in the growth of our business. We expect sales and marketing expenses, expressed as a percentage of revenue, to vary from period to period for the near future.

Advertising expenses, which are included in sales and marketing expense, primarily include promotional expenditures, and are expensed as incurred. The amounts incurred for advertising expenses for the three and nine months ended September 30, 2025 and 2024 were $0, $1.0 million, $0 and $2.8 million, respectively.

***Research and Development***

Research and development expenses consist primarily of personnel-related costs, including salaries and wages, benefits, bonuses, and stock-based compensation expense for our scientists, engineers and other employees engaged in the research and development of our products. In addition, research and development expenses include third party software subscription costs, facilities and other supporting overhead costs, including depreciation and amortization. Research and development costs are expensed as incurred.

***General and Administrative Expenses***

General and administrative expenses consist primarily of personnel-related costs, including salaries and wages, bonuses, benefits, and stock-based compensation expense for our finance, legal, information technology, human resources, and other administrative personnel. General and administrative expenses also include facilities and supporting overhead costs, including depreciation and amortization, and external professional services.

***Other Income (Expense), Net***

Other income (expense), net consists primarily of fair value adjustments related to our Senior Secured Notes and derivative contract in connection with our Forward Purchase Agreement, loss associated with amendments to capital markets advisory agreements, gain on extinguishment of our Forward Purchase Agreement, and extinguishment of liabilities pursuant to our Conversion Agreements, interest income, interest expense and foreign exchange gains and losses from our international operations.

***Income Taxes***

For the three and nine months ended September 30, 2025, the Company did not record an income tax provision. For the three and nine months ended September 30, 2024, the Company recorded an income tax provision of $7 and $20, respectively. These are related to income taxes from our foreign operations with pre-tax income generated from intercompany activities. We recorded a full valuation allowance of our net deferred tax asset position as of September 30, 2025, as we believe it was more likely than not that we would not be able to utilize our deferred tax assets.

**Results of Operations** 

***Comparison of the Three months Ended September 30, 2025 and 2024***

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | | |
|  | **2025** | **2024** |<br>**Change** | **%** |
|  | **(in thousands)** | **(in thousands)** | | |
| Revenue ($0, and ($302) from related parties, respectively) | $— | $657 | $(657) | -100% |
| Cost of revenue |  | 913 | (913) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit |  | (256) | 256 | (100) |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing ($0 and $696 from related parties, respectively) | 6 | 2069 | (2063) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development |  | 1371 | (1371) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 1023 | 3926 | (2903) | (74) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1029 | 7366 | (6337) | (86) |
| Loss from operations | (1029) | (7622) | 6593 | (86) |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (136) | (55) | (81) | 147 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of forward purchase agreement derivative liability |  | 11376 | (11376) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of liabilities | 4417 |  | 4417 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 13 | (210) | 223 | (106) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income, net | 4294 | 11111 | (6817) | (61) |
| Net income before income taxes | 3265 | 3489 | (224) | (6) |
| Provision for income taxes |  | (7) | 7 | (100) |
| Net income | $3265 | $3482 | $(217) | -6% |

---

***Revenue***

Revenue was $0 for the three months ended September 30, 2025, as compared to $0.7 million for the three months ended September 30, 2024. The decrease reflects the Operational Cessation.

***Cost of Revenue***

Cost of revenue was $0 for the three months ended September 30, 2025, as compared to $0.9 million for the three months ended September 30, 2024. The decrease reflects the Operational Cessation.

***Operating Expenses***

*Sales and Marketing Expenses* 

Sales and marketing expense was immaterial for the three months ended September 30, 2025, as compared to $2.1 million for the three months ended September 30, 2024. The decrease reflects the Operational Cessation.

*Research and Development Expenses* 

Research and development expense was $0 for the three months ended September 30, 2025, as compared to $1.4 million for the three months ended September 30, 2024. The decrease reflects the Operational Cessation.

*General and Administrative Expenses* 

General and administrative expenses were $1.1 million for the three months ended September 30, 2025, compared to $3.9 million for the three months ended September 30, 2024. The decrease of $2.9 million reflects the Operational Cessation. Expenses for the current quarter mainly consisted of insurance, software costs, salaries and benefits for remaining personnel, and legal and professional fees.

***Other Income (Expense), Net***

Other income, net was $4.3 million for the three months ended September 30, 2025, compared to $11.1 million for the three months ended September 30, 2024. The $6.8 million decrease was primarily driven by the absence of an $11.4 million gain recognized in the prior-year quarter related to changes in the fair value of the Forward Purchase Agreement liability, partially offset by the $4.4 million gain recognized in the current quarter related to the extinguishment of liability.

***Provision for income taxes***

There was no provision for income taxes during the three months ended September 30, 2025. The provision for income taxes during the three months ended September 30, 2024 was not material and was related to our foreign operations.

***Comparison of the Nine months Ended September 30, 2025 and 2024***

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | | |
|  | **2025** | **2024** |<br>**Change** |<br>**%** |
|  | **(in thousands)** | **(in thousands)** | | |
| Revenue ($0 and $1,300 from related parties, respectively) | $— | $3876 | $(3876) | -100% |
| Cost of revenue |  | 3241 | (3241) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit |  | 635 | (635) | (100) |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing ($0 and $2,087 from related parties, respectively) | 6 | 5910 | (5904) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development |  | 4378 | (4378) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 2287 | 10415 | (8128) | (78) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 2293 | 20703 | (18410) | (89) |
| Loss from operations | (2293) | (20068) | 17775 | (89) |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (379) | (917) | 538 | (59) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on issuance of forward purchase agreement derivative liability |  | (4935) | 4935 | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of forward purchase agreement derivative liability |  | 3148 | (3148) | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on issuance of senior secured notes |  | (9776) | 9776 | (100) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of senior secured note | (134) |  | (134) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of forward purchase agreement settlement liability | 2357 |  | 2357 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of liabilities | 5614 |  | 5614 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 30 | (1846) | 1876 | (102) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | 7488 | (14326) | 21814 | (152) |
| Net income (loss) before income taxes | 5195 | (34394) | 39589 | (115) |
| Provision for income taxes |  | (20) | 20 | (100) |
| Net income (loss) | $5195 | $(34414) | $39609 | -115% |

---

***Revenue***

Revenue was $0 for the nine months ended September 30, 2025, as compared to $3.9 million for the nine months ended September 30, 2024. The decrease reflects the Operational Cessation.

***Cost of Revenue***

Cost of revenue was $0 for the nine months ended September 30, 2025, as compared to $3.2 million for the nine months ended September 30, 2024. The decrease reflects the Operational Cessation.

***Operating Expenses***

*Sales and Marketing Expenses* 

Sales and marketing expense was immaterial for the nine months ended September 30, 2025, as compared to $5.9 million for the nine months ended September 30, 2024. The decrease reflects the Operational Cessation.

*Research and Development Expenses* 

Research and development expense was $0 for the nine months ended September 30, 2025, as compared to $4.4 million for the nine months ended September 30, 2024. The decrease reflects the Operational Cessation.

*General and Administrative Expenses* 

General and administrative expenses were $2.3 million for the nine months ended September 30, 2025, compared to $10.4 million for the nine months ended September 30, 2024. The decrease of $8.1 million reflects the Operational Cessation. Expenses for the current period mainly consisted of insurance, software costs, salaries and benefits for remaining personnel, and legal and professional fees.

***Other Income (Expense), Net***

Other income, net was $7.5 million for the nine months ended September 30, 2025, compared to other expense, net of $14.3 million for the nine months ended September 30, 2024. The $21.8 million favorable variance was primarily attributable to the nonrecurrence in the current period of the following prior period charges: (i) $9.8 million loss related to the issuance of Senior Secured Notes, (ii) a $4.9 million loss on issuance of Forward Purchase Agreement, and (iii) $1.8 million in transaction costs incurred related to the Lincoln Park Purchase Agreement, partially offset by a $3.1 million gain resulting from the change in fair value of the Forward Purchase Agreement. Additionally, interest expense decreased by $0.5 million, primarily due to the conversion of a majority of the Senior Notes to equity upon closing of the merger in the first quarter of 2024.

Other income, net for the nine months ended September 30, 2025 includes a $2.4 million gain on extinguishment of the Forward Purchase Agreement liability and a $5.6 million gain on extinguishment of liabilities, partially offset by a $0.1 million loss on extinguishment of Senior Secured Note.

***Provision for income taxes***

There was no provision for income taxes during the nine months ended September 30, 2025. The provision for income taxes during the nine months ended September 30, 2024 was not material and was related to our foreign operations.

**Liquidity, Going Concern and Capital Resources** 

Since our inception, we have financed our operations primarily with proceeds from sales of Convertible Preferred Stock and common stock and the issuance of Convertible Notes. As of September 30, 2025, we had cash and cash equivalents of $0.9 million. Since our inception through September 30, 2025, we have sold 14,222,580 shares of our Convertible Preferred Stock for aggregate net proceeds of $64.7 million, received $14.5 million from the issuance of Senior Notes and Senior Secured Notes, $8.6 million in proceeds under an equity line of credit and $3.0 million in proceeds from the issuance of Convertible Promissory Notes. Our principal use of cash is to fund our operations and platform development to support our growth.

As of November 30, 2025, we had approximately $2.1 million in cash. We do not have sufficient capital to meet our working capital needs for the 12 months following the date we file this Report.

 ****

***Senior Secured Notes***

The Senior Secured Notes bear interest at the compound rate of 15% per annum and are convertible at the option of each noteholder in connection with the Merger at a conversion price of (i) $4.50 per share at the closing of the Merger or (ii) $8.50 per share at any time after the closing of the Merger. The outstanding principal amount of the Senior Secured Notes and all accrued but unpaid interest will be due and payable at the maturity date, December 15, 2026, unless otherwise converted. Upon the closing of the Merger, a portion of the aggregate outstanding Senior Secured Notes with an aggregate principal amount of $14.2 million and associated accrued interest of $0.5 million were converted into shares of our common stock. While any Senior Secured Notes are outstanding, we cannot incur additional indebtedness for borrowed funds, except additional Senior Secured Notes, substantially similar notes or other debt instruments that are pari passu with or subordinate to the Senior Secured Notes.

In June 2025, we repaid a portion of our Senior Secured Notes, which had an original principal amount of $1.0 million and accrued interest of $0.2 million. In connection with the repayment, we recognized a loss on debt extinguishment of $0.1 million during the nine months ended September 30, 2025. As of September 30, 2025, the aggregate principal and accrued interest outstanding under the Senior Secured Notes totaled $1.2 million.

***Notes Payable – Related Parties***

To finance transaction costs in connection with the Merger, the sponsor of AAC and certain of AAC's officers and directors made working capital loans (the "Notes Payable – Related Party") to AAC prior to the closing of the Merger. The Notes Payable – Related Party would either be repaid upon the consummation of the Merger, without interest, or at AAC's discretion, up to $1.5 million of such Notes Payable – Related Party could be converted into Private Placement Warrants at a price of $1.00 per warrant on the date of the Merger.

On March 28, 2024, the terms of the Notes Payable – Related Party were amended, pursuant to which the outstanding principal balance plus the accrued interest of $2.6 million, which was also due per its terms at the closing of the Merger was deferred and became due in monthly installments (including interest accruing from the closing of the Merger through the payment date) for twelve months thereafter beginning thirty days following the effectiveness of the Lincoln Park Registration Statement. The Lincoln Park Registration Statement was declared effective on April 18, 2024. Upon the closing of the Merger, none of the note holders elected to exercise their option of converting their respective loans into warrants. The Notes Payable – Related Party bear interest at a rate of 4.5% per annum. As of September 30, 2025, the outstanding balance of the Notes Payable – Related Party was $1.9 million within our condensed consolidated balance sheet.

In June 2025, we entered into Conversion Agreements with the note holders of the Notes Payable – Related Party. As a result of the conversion, we derecognized Notes Payable – Related Party of $2.0 million, and recorded the issuance of 5,407,000 shares of common stock. As of September 30, 2025, there was no outstanding balance under the Notes Payable – Related Party.

 ****

***Lincoln Park Purchase Agreement***

On December 19, 2023, prior to the Merger, we entered into a Purchase Agreement with Lincoln Park pursuant to which Lincoln Park agreed to purchase from us, an aggregate of up to $75.0 million of common stock from time to time over a 36-month period following the closing of the Merger.

On August 13, 2024, we entered into the 2024 Purchase Agreement with Lincoln Park pursuant to which Lincoln Park agreed to purchase from us, an aggregate of up to $10.0 million shares of common stock from time to time over a 24-month period upon the satisfaction of certain conditions contained in the 2024 Purchase Agreement.

In connection with the Operational Cessation described above, the registration statement in connection with the Purchase Agreement is no longer effective (which is a condition to transactions under the Purchase Agreement).

***Forward Purchase Agreement***

On March 25, 2024, we entered into the Forward Purchase Agreement with Sandia, pursuant to which Sandia purchased, from the open market, 1,000,000 Recycled Shares and 500,000 Additional Shares. In April 2024, Sandia elected to terminate the transaction in part by exercising the Optional Early Termination provision under the Forward Purchase Agreement, pursuant to which 250,000 shares were terminated. We received payments totaling $2.5 million under the Optional Early Termination provision prescribed in the Forward Purchase Agreement.

On October 8, 2024, we received notice from Sandia accelerating the Valuation Date to October 8, 2024. As a result, we became obligated to pay Sandia $2.4 million in cash or shares. In June 2025, we satisfied our obligation under the Forward Purchase Agreement through the issuance of 6,591,000 shares of our common stock to Sandia and recognized a gain on extinguishment of the Forward Purchase Agreement liability of $2.4 million.

***Convertible Promissory Notes***

In June 2025, we entered into a security purchase agreement with accredited investors pursuant to which we sold and issued secured Convertible Promissory Notes and warrants to purchase 37,500,000 shares of Common Stock ("Warrants") for total gross proceeds of $3,000. The Convertible Promissory Notes bear simple interest at a rate of 10.00% per annum and mature in June 2026, unless earlier converted or repaid in accordance with its terms. Interest accrues daily based on a 360-day year and will not be paid in cash prior to maturity unless the Convertible Promissory Notes are repaid before conversion.

The Convertible Promissory Notes are convertible into 75,000,000 shares of our common stock at the option of the holder at any time prior to repayment. The conversion price is $0.04 per share, subject to customary anti-dilution adjustments for stock splits, stock dividends, combinations, or recapitalizations. Upon conversion, any unpaid accrued interest is automatically forgiven.

***Cash Flows***

The following table summarizes our sources and uses of cash for each of the periods presented:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
|  | **(in thousands)** | **(in thousands)** |
| Net cash used in operating activities | $(985) | $(15099) |
| Net cash used in investing activities |  | (34) |
| Net cash provided by financing activities | 1582 | 14946 |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (37) | (43) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in cash, cash equivalents and restricted cash | $560 | $(230) |

---

*Operating Activities* 

Net cash used in operating activities was $1.0 million for the nine months ended September 30, 2025. Operating cash flows reflected net income of $5.2 million and a $1.2 million net increase in working capital, partially offset by offset by $7.4 million in net non-cash charges. Changes in working capital were primarily driven by a $1.0 million increase in accrued expenses and other current liabilities, and a $0.2 million increase in accounts payable. Non-cash charges included $5.6 million gain on extinguishment of liabilities, and a $2.4 million gain on extinguishment of Forward Purchase Agreement settlement liability, partially offset by $0.3 million in non-cash interest expense, $0.2 million in stock-based compensation and $0.1 million loss on extinguishment of Senior Secured Note. As previously disclosed, we ceased operations in October 2024, resulting in limited activities during the current period.

Net cash used in operating activities was $15.1 million for the nine months ended September 30, 2024. The factors affecting our operating cash flows during this period were our net loss of $34.4 million, partially offset by a net change in our operating assets and liabilities of $3.8 million and non-cash charges of $15.5 million. The non-cash charges primarily consisted of $9.8 million in the loss on issuance of Senior Secured Notes, $2.0 million in equity line of credit commitment expense, $4.9 million in the loss on the forward purchase contract, $0.8 million in non-cash interest expense, $0.7 million in stock-based compensation expense, $0.2 million in non-cash vendor payments, $0.2 million in non-cash lease expense, and $0.1 million in depreciation and amortization expense, partially offset by $3.1 million in change in fair value of forward purchase contract. The change in operating assets and liabilities was driven by a $6.6 million increase in accounts payable and $0.3 million increase in deferred revenue, partially offset by a $1.3 million decrease in accrued expenses and other current liabilities, a $0.9 million increase in prepaid expenses and other current and non-current assets, a $0.7 million decrease in deferred legal fees and a $0.3 million decrease in operating lease liabilities. The increase in accounts payable was primarily related to the increase in transaction costs and the timing of invoicing and payments of sponsorship fees and professional services fees. The increase in deferred revenue is due to the timing of billings related to customer contracts and the recognition of revenue from customer contracts. The decrease in accrued expenses and other current liabilities was primarily due to the payment of legal and audit fees. The increase in prepaid expenses and other current and non-current assets was primarily due to the timing of vendor invoicing and payments for sponsorship fees. The decrease in deferred legal fees resulted from payments of fees. The decrease in operating lease liabilities resulted primarily from lease payments.

*Investing Activities* 

There were no cash flows from investing activities during the nine months ended September 30, 2025.

Net cash used in investing activities was $34 thousand during the nine months ended September 30, 2024, primarily attributable to purchases of property and equipment, consisting mainly of computer equipment.

*Financing Activities* 

Net cash provided by financing activities was $1.6 million for the nine months ended September 30, 2025. This amount primarily reflects $2.9 million in net proceeds received from the issuance of Convertible Promissory Notes, partially offset by the repayment of $1.3 million of Senior Secured Notes.

Net cash provided by financing activities was $14.9 million during the nine months ended September 30, 2024. This amount primarily reflects $12.6 million in proceeds received in connection with the closing of the Merger, $6.0 million from the issuance of Senior Secured Notes, $8.4 million from issuances of common stock under the equity line of credit, $2.5 million from the partial early termination of the Forward Purchase Agreement and $0.1 million from exercises of stock options. These inflows were partially offset by the payment of $0.1 million debt discount, payment of $0.6 million of notes payable to related parties, payment of $2.9 million of deferred offering costs payment and $11.0 million prepayment under the Forward Purchase Agreement.

**Recent Financing and Restructuring Transactions**

For a description of certain capital raising and restructuring activities we have conducted in 2025, see Note 19, Subsequent Events in the notes to the unaudited condensed consolidated financial statements contained in this Report.

**Off-Balance Sheet Financing Arrangements** 

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements during the periods presented. Zapata and Legacy Zapata have not entered into any off-balance sheet financing agreements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

**Contractual Obligations and Other Commitments** 

As of September 30, 2025, there have been no material changes with regard to contractual obligations from those disclosed in our "Management's Discussion and Analysis on Financial Condition and Results of Operations—Contractual Obligations and Other Commitments" in our Annual Report on Form 10-K for the year ended December 31, 2024.

**Critical Accounting Policies and Significant Judgments and Estimates**

There have been no material changes to our critical accounting policies from those disclosed in the "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates" section of our Annual Report on Form 10-K for the year ended December 31, 2024.

**Recently Issued and Adopted Accounting Pronouncements** 

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements, which are included elsewhere in this Report.

**Emerging Growth Company Status** 

Zapata Quantum Inc. qualifies as an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by Financial Accounting Standards Board ("FASB") or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We intend to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. Accordingly, the information contained herein may be different than the information you receive from other public companies. We also intend to take advantage of some of the reduced regulatory and reporting requirements applicable to emerging growth companies pursuant to the JOBS Act so long as it qualifies as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

Not applicable.

**Item 4. Controls and Procedures.**

**Disclosure Controls and Procedures**

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the "SEC"). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2025, have concluded that, based on such evaluation, our disclosure controls and procedures were not effective due to the material weaknesses described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of September 30, 2025, our disclosure controls and procedures were not effective:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company does not have sufficient segregation of duties within accounting functions, as its Chief
Executive Officer is the sole officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company does not have sufficient or complete written documentation of our internal controls policies
and procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A substantial portion of the Company's financial reporting is carried out by an outside accounting
firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's human resources, processes and systems are not sufficient to enable the production
of timely and accurate financial statements in accordance with US GAAP.

**Plans for Remediation of Material Weaknesses**

Management has taken actions to remediate the deficiencies in its internal controls over financial reporting and implemented additional processes and controls designed to address the underlying causes associated with the above-mentioned material weaknesses. Management is committed to finalizing the remediation of the material weaknesses. Management's internal control remediation efforts include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are currently in the process of identifying and engaging
internal control consultants to assist us in performing a risk assessment as well as identifying and designing a system of internal controls
necessary to mitigate the risks identified, including preparation of written documentation and testing of our internal control policies
and procedures, such that we are able to perform a Section 404 analysis of our internal control over financial reporting when and as required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We plan to increase our personnel resources and technical
accounting expertise within the accounting function to replace our outside service providers; until we have sufficient technical accounting
and financial reporting capabilities, we have retained an accounting consulting firm to provide support and to assist us in our evaluation
of more complex applications of U.S. GAAP and assist us with financial reporting.

**Changes in Internal Control Over Financial Reporting**

Other than with respect to the ongoing remediation efforts on the material weaknesses, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Limitations of the Effectiveness of Internal Controls**

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

**PART II—OTHER INFORMATION** 

**Item 1. Legal Proceedings.** 

From time to time, we may be involved in litigation that arises through the normal course of business. As of the date of this filing, we are not aware of any material legal proceedings to which we or any of our subsidiaries is a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or any such proceedings known to be contemplated by governmental authorities. We are not aware of any material proceedings in which any of our directors, officers, or affiliates or any registered or beneficial stockholder of more than 5% of our common stock, or any associate of any of the foregoing, is a party adverse to or has a material interest adverse to, us or any of our subsidiaries.

**Item 1A. Risk Factors.** 

Not applicable for smaller reporting companies.

**Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.**

None

**Item 3. Defaults Upon Senior Securities.**

During the fourth quarter of 2024, an event of default occurred under the Company's Senior Secured Promissory Notes issued pursuant to the Senior Secured Note Purchase Agreement dated December 15, 2023. Under the terms of these notes, the Company's Current Report on Form 8-K filed on October 11, 2024, in which the Company disclosed that, at that time, it was unable to, and unlikely to become able to, satisfy all of its financial obligations, constituted an event of default. As a result, all amounts outstanding under the Senior Secured Promissory Notes became immediately due and payable.

As of November 30, 2025, the Company has repaid approximately $1 million of principal, together with accrued interest, and has cured the event of default with respect to the remaining principal balance and accrued interest under the Senior Secured Promissory Notes. No Senior Secured Promissory Notes, or other Senior Securities, remain in default as of the filing date of this report.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

During the nine months ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any "non-Rule 10b5-1 arrangement" as defined in Item 408(c) of Regulation S-K.

**Item 6. Exhibits.** 

**EXHIBIT INDEX** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| <br>**Exhibit**<br> **No.** | <br>**Description** | <br>**Filed/Furnished**<br> **Herewith** | **Form** | **Exhibit**<br> **No.** | **Filing**<br> **Date** |
| 2.1 | [Business Combination Agreement, dated as of September 6, 2023, by and among the Company, Tigre Merger Sub, Inc. and Legacy Zapata](https://www.sec.gov/Archives/edgar/data/1843714/000119312523229092/d539142dex21.htm) |  | 8-K | 2.1 | 9/6/23 |
| 3.1 | [Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/1843714/000119312524085161/d13242dex31.htm) |  | 8-K | 3.1 | 4/3/24 |
| 3.1(a) | [Certificate of Amendment to Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001390/ex3x1.htm) |  | 8-K | 3.1 | 8/27/25 |
| 3.2 | [Bylaws of Zapata Computing Holdings Inc.](https://www.sec.gov/Archives/edgar/data/1843714/000119312524085161/d13242dex32.htm) |  | 8-K | 3.2 | 4/3/24 |
| 3.3 | [Certificate of Designations, of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001650/ex4x1.htm) |  | 8-K | 4.1 | 10/28/25 |
| 3.4 | [Certificate of Designations of Preferences, Rights and Limitations of the Series C Convertible Preferred Stock](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001182/ex4x1.htm) |  | 8-K | 4.1 | 7/24/25 |
| 3.4(a) | [Certificate of Amendment to the Certificate of Designation of Preferences, Rights and Limitations of the Series C Convertible Preferred Stock](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001665/ex4x1.htm) |  | 8-K | 4.1 | 11/6/25 |
| 10.1 | [Form of Forbearance Agreement+](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001650/ex10x1.htm) |  | 8-K | 10.1 | 10/28/25 |
| 10.2 | [Form of Securities Purchase Agreement+](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001650/ex10x2.htm) |  | 8-K | 10.2 | 10/28/25 |
| 10.3 | [Form of Stock Option Agreement](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001613/ex10x1.htm) |  | 8-K | 10.1 | 10/15/25 |
| 10.4 | [Form of Stock Option Agreement](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001378/ex10x1.htm) |  | 8-K | 10.1 | 8/22/25 |
| 16.1 | [Letter from Deloitte](https://www.sec.gov/Archives/edgar/data/1843714/000107997325001177/ex16x1.htm) |  | 8-K | 16.1 | 7/23/25 |
| 31.1 | [Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31x1.htm) | (1) |  |  |  |
| 31.2 | [Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31x2.htm) | (1) |  |  |  |
| 32.1 | [Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32x1.htm) | (2) |  |  |  |
| 101.INS | Inline XBRL Instance Document | (1) |  |  |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema | (1) |  |  |  |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | (1) |  |  |  |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | (1) |  |  |  |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | (1) |  |  |  |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | (1) |  |  |  |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | (1) |  |  |  |

---

---

| | |
|:---|:---|
| +<br>| Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC Staff upon request.<br>|
| # | Indicates management contract or compensatory plan, contract or agreement. |
| (1) | Filed herein |
| (2) | Furnished herein. |

---

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **ZAPATA QUANTUM, INC.** | **ZAPATA QUANTUM, INC.** |
| December 9, 2025 | By: | */s/ Sumit Kapur* |
|  |  | Sumit Kapur |
|  |  | Chief Executive Officer, Chief Financial Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

I, Sumit Kapur, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zapata Quantum, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: December 9, 2025

---

| |
|:---|
| */s/ Sumit Kapur* |
| Sumit Kapur |
| Chief Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

I, Sumit Kapur, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zapata Quantum, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: December 9, 2025

---

| |
|:---|
| */s/ Sumit Kapur* |
| Sumit Kapur |
| Chief Financial Officer |
| (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report of Zapata Quantum, Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof, I, Sumit Kapur, certify, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

2. The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| */s/ Sumit Kapur* |
| Sumit Kapur |
| Chief Executive Officer and Chief Financial Officer |
| (Principal Executive Officer and Principal Financial Officer) |

---

Dated: December 9, 2025