Rank One Computing acquires Zuccaro Technical Consulting
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rank One Computing Corporation (ROC) completed its acquisition of all outstanding membership interests of Zuccaro Technical Consulting LLC (ZTC) on August 31, 2026. Consideration included a $500,000 base cash payment adjusted for estimated closing indebtedness, transaction expenses and net working capital; 416,666 restricted shares with a stated value of $2,500,000, using a $6.00-per-share floor; and a payable to the seller for ZTC cash at closing. Of the shares, 145,833 vested at closing and 270,833 remain subject to forfeiture based on continued service. The agreement provides quarterly payments to Anthony J. Zuccaro and Emily J. Sverchek equal to 15% of ROC Evidence Advanced Revenue for seven years, capped at $7,000,000; a payment is forfeited if the applicable Owner is terminated for Cause or resigns without Good Reason and is not employed on the payment date.
ZTC's Customer A contract, representing approximately 74% of its 2025 revenue, expired May 31, 2026; Customer C represented approximately 20% of ZTC's revenue in the six months ended June 30, 2026, and its services ceased in August 2026. Management cannot reasonably estimate the ultimate financial effect of Customer A's expiration. Unaudited pro forma combined results show net losses of $3,363,659 for 2025 and $4,140,886 for the six months ended June 30, 2026; these figures are illustrative and not necessarily indicative of actual results.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointZTC's Customer A contract (74% of 2025 revenue) expired May 31, 2026.
- Moderate pointZTC's Customer C services (20% of first-half 2026 revenue) ceased in August 2026.
Filing Explained
ZTC reported $2,024,417 in revenue and $299,795 in net income for the six months before ROC closed the acquisition.
This Form 8-K/A adds ZTC’s audited 2025 and unaudited first-half 2026 financial statements and pro forma information to the report of ROC’s acquisition, which closed
ZTC reported
The filing identifies delivery of the final adjustment statement within 60 days after closing, a valuation specialist’s report, and a final acquisition-date tax analysis as items needed to complete the acquisition accounting.
8-K Event Classification
Key Figures
Key Terms
Revenue Share Payments financial
post-combination compensation financial
purchase price allocation financial
multi-period excess earnings method financial
replacement cost method financial
fair value hierarchy financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How was ROC's acquisition of ZTC consideration structured?
What were ROC and ZTC's pro forma combined net losses?
How are the revenue share payments to ZTC's owners calculated?
Which intangible assets were included in ROC's preliminary allocation for ZTC?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
(Exact name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s
Telephone Number, Including Area Code: (
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Explanatory Note
The pro forma financial information included in this Amendment No. 1 been prepared in accordance with Article 11 of Regulation S-X and is presented for illustrative purposes only. It does not purport to represent the actual results of operations or financial position that ROC and ZTC would have achieved had the companies been combined during the periods presented in the pro forma financial information and is not intended to project the future results of operations that the combined company may achieve after completion of the Transaction. Except as described above, this Amendment No. 1 does not otherwise amend, modify or update the disclosures contained in the Original 8-K.
| 1 |
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The audited financial statements of Zuccaro Technical Consulting LLC as of December 31, 2025 and 2024 and for the years then ended, together with the related independent auditor’s report, are filed as Exhibit 99.1 hereto and incorporated herein by reference.
The unaudited condensed financial statements of Zuccaro Technical Consulting LLC as of June 30, 2026 and December 31, 2025 and for the six months ended June 30, 2026 are filed as Exhibit 99.2 hereto and incorporated herein by reference.
(b) Pro forma financial information.
The unaudited pro forma condensed combined balance sheet of ROC as of June 30, 2026, giving effect to the Transaction as if it had occurred on June 30, 2026, and the unaudited pro forma condensed combined statements of operations of ROC for the year ended December 31, 2025 and the six months ended June 30, 2026, in each case giving effect to the Transaction as if it had occurred on January 1, 2025, are filed as Exhibit 99.3 hereto and incorporated herein by reference.
(d) Exhibits.
| Exhibit No. | Description | |
| 23.1 | Consent of Rosenberg Rich Baker Berman, P.A., independent auditor of Zuccaro Technical Consulting LLC | |
| 99.1 | Audited financial statements of Zuccaro Technical Consulting LLC as of and for the years ended December 31, 2025 and 2024, and the related notes thereto, together with the report of the independent auditor thereon. | |
| 99.2 | Unaudited condensed financial statements of Zuccaro Technical Consulting LLC as of June 30, 2026 and December 31, 2025 and for the six months ended June 30, 2026, and the related notes thereto. | |
| 99.3 | Unaudited pro forma condensed combined financial information of Rank One Computing Corporation as of June 30, 2026 and for the year ended December 31, 2025 and the six months ended June 30, 2026, and the related notes thereto. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Rank One Computing Corporation | ||
| Date: November 12, 2026 | By: | /s/ B. Scott Swann |
| B. Scott Swann, Chief Executive Officer | ||
| 3 |
Exhibit 99.1
ZUCCARO TECHNICAL CONSULTING, LLC
Financial Statements
December 31, 2025 and 2024
(With Independent Auditor’s Report Thereon)
Index to Financial Statements
| Independent Auditor’s Report | 1 |
| Balance Sheets | 2 |
| Statements of Operations | 3 |
| Changes in Members’ Equity | 4 |
| Statements of Cash Flows | 5 |
| Notes to the Financial Statements | 6 |
i
Independent Auditor’s Report
To the Members
of Zuccaro Technical Consulting LLC
Opinion
We have audited the accompanying financial statements of Zuccaro Technical Consulting LLC (a Maryland s-corporation), which comprise the balance sheets as of December 31, 2025 and 2024, and the related statements of operations, changes in member’s equity and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Zuccaro Technical Consulting LLC as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Zuccaro Technical Consulting LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Zuccaro Technical Consulting LLC’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
| ● | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| ● | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. |
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Zuccaro Technical Consulting LLC’s internal control. Accordingly, no such opinion is expressed. |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. |
| ● | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Zuccaro Technical Consulting LLC’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
/s/ Rosenberg Rich Baker Berman, P.A.
Somerset, NJ
September 8, 2026
1
ZUCCARO TECHNICAL CONSULTING, LLC
Balance Sheets
December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 816,987 | 1,094,145 | ||||||
| Marketable Securities | 1,601,803 | 1,000,816 | ||||||
| Accounts receivable, net of allowance for credit losses of $0 | 357,296 | 427,973 | ||||||
| Other receivables | 3,357 | 3,357 | ||||||
| Total Current Assets | 2,779,443 | 2,526,291 | ||||||
| Property and Equipment, Net | 39 | 54 | ||||||
| Total Assets | 2,779,481 | 2,526,345 | ||||||
| LIABILITIES AND MEMBERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts Payable, Accrued Liabilities | 136,001 | 106,255 | ||||||
| Total Current Liabilities | 136,001 | 106,255 | ||||||
| Members’ Equity | 2,643,480 | 2,420,090 | ||||||
| Total Liabilities and Members’ Equity | 2,779,481 | 2,526,345 | ||||||
2
ZUCCARO TECHNICAL CONSULTING, LLC
Statements of Operations
Years Ended December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| Revenue | 4,329,012 | 4,514,914 | ||||||
| Cost of revenue | 3,394,238 | 3,495,622 | ||||||
| Gross profit | 934,775 | 1,019,292 | ||||||
| General and administrative expenses | 347,011 | 319,161 | ||||||
| Income from operations | 587,764 | 700,131 | ||||||
| Other income (expense) | ||||||||
| Dividend, interest and Other Income | 76,977 | 44,435 | ||||||
| Unrealized gain on investments | 27,644 | 26,608 | ||||||
| Investment expenses and foreign taxes | (3,656 | ) | (3,290 | ) | ||||
| Total other income | 100,966 | 67,753 | ||||||
| Net income | 688,729 | 767,884 | ||||||
3
ZUCCARO TECHNICAL CONSULTING, LLC
Changes in Members’ Equity
Years Ended December 31, 2025 and 2024
| MEMBERS’ EQUITY | Total | |||||||
| Beginning Balance at January 1, 2024 | 2,032,734 | 2,032,734 | ||||||
| Net Income (Loss) | 767,884 | 767,884 | ||||||
| Distributions | (380,528 | ) | (380,528 | ) | ||||
| Ending Balance at December 31, 2024 | 2,420,090 | 2,420,090 | ||||||
| Beginning Balance at January 1, 2025 | 2,420,090 | 2,420,090 | ||||||
| Net Income (Loss) | 688,729 | 688,729 | ||||||
| Distributions | (465,339 | ) | (465,339 | ) | ||||
| Ending Balance at December 31, 2025 | 2,643,480 | 2,643,480 | ||||||
4
ZUCCARO TECHNICAL CONSULTING, LLC
Statements of Cash Flows
Years Ended December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | 688,729 | 767,884 | ||||||
| Adjustments reconciling net income to net cash provided by operating activities: | ||||||||
| Depreciation | 1,552 | 22 | ||||||
| Net appreciation in fair value of investments | (53,880 | ) | (39,799 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 70,677 | (1,768 | ) | |||||
| Marketable Securities | ||||||||
| Other current assets | - | 33,826 | ||||||
| Accounts payable and liabilities | 29,746 | (50,273 | ) | |||||
| Net cash provided by operating activities | 736,824 | 709,892 | ||||||
| Cash flows from investing activities | ||||||||
| Net (purchases) sales of investments | (547,107 | ) | 75,864 | |||||
| Purchases of property and equipment | (1,537 | ) | - | |||||
| Net cash (used in) provided by investing activities | (548,643 | ) | 75,864 | |||||
| Cash flows from financing activities | ||||||||
| Distributions to members | (465,339 | ) | (380,528 | ) | ||||
| Net cash used in financing activities | (465,339 | ) | (380,528 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (277,158 | ) | 405,228 | |||||
| Cash and cash equivalents, beginning of year | 1,094,145 | 688,917 | ||||||
| Cash and cash equivalents, end of year | 816,987 | 1,094,145 | ||||||
5
ZUCCARO TECHNICAL CONSULTING, LLC
Notes to the Financial Statements
December 31, 2025 and 2024
1. Nature of Operations
Zuccaro Technical Consulting, LLC is a Maryland limited liability company founded in April of 2004 that provides digital forensics software design and development services as a subcontractor to prime contractors on U.S. federal government contracts. The Company’s services are provided primarily on a time-and-materials basis, with labor billed at contractually established hourly rates and allowable travel costs reimbursed under the related subcontracts. The Company’s operations and customers are located in the United States, and services are performed from the Company’s offices in Virginia and at federal government customer sites.
2. Summary of Significant Accounting Policies
Basis of Presentation. The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash. Cash consists of amounts held in demand deposit and savings accounts. Cash balances may, at times, exceed federally insured limits. See Concentrations (Note 8).
Accounts Receivable and Allowance for Credit Losses. Accounts receivable represents amounts due from prime contractors for labor hours performed and approved under the Company’s subcontracts, together with applicable reimbursable travel costs. Accounts receivable is stated at the amount to which the Company is entitled for approved labor hours and reimbursable costs, net of an allowance for credit losses, if applicable. The Company evaluates expected credit losses on accounts receivable in accordance with ASC 326, Financial Instruments—Credit Losses. In estimating expected credit losses, management considers historical credit loss experience, the creditworthiness of its prime contractor customers, the aging and delinquency status of outstanding balances, and current conditions.
During 2025, the Company early adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, and applied its provisions prospectively. The Company elected the practical expedient applicable to current accounts receivable arising from transactions accounted for under ASC 606, under which the Company assumes that current conditions existing as of the balance sheet date will remain unchanged for the remaining contractual life of the receivables. The Company also elected the accounting policy available to entities other than public business entities to consider collection activity occurring after the balance sheet date when estimating expected credit losses. For the year ended December 31, 2025, subsequent collection activity was considered through September 8, 2026. The Company has not experienced credit losses on accounts receivable since inception. All accounts receivable outstanding at December 31, 2025 were subsequently collected in full through the date specified above. Accounts receivable outstanding at December 31, 2024 were also subsequently collected in full. Based on management’s assessment, no allowance for credit losses was recorded at December 31, 2025 or 2024. The early adoption of ASU 2025-05 did not have a material effect on the Company’s financial statements.
Fair Value of Financial Instruments. The Company’s investments in marketable securities are stated at fair value, determined using a fair value hierarchy that prioritizes observable market inputs over unobservable inputs. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are categorized within a three-tier hierarchy based on the observability of inputs: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable inputs other than quoted prices, either directly or indirectly; and Level 3 inputs are unobservable and reflect the Company’s own assumptions.
6
Investments. Investments consist of exchange-traded funds, closed-end funds, and mutual funds, including a money market mutual fund, held in Company brokerage accounts. Investments are measured at fair value with changes in fair value recognized in net income. Dividends and interest are recognized as earned and reported in other income.
Property and Equipment. Equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally as follows: furniture, 7 years; equipment, 5 years. Any repairs or maintenance expenditures that do not extend the life of the related asset are expensed as incurred. A detailed list of property and equipment can be found in Note 4.
The Company’s owned equipment is limited because the majority of the hardware used by Company personnel is government-furnished equipment. See Note 4.
Compensated Absences. The Company provides employees with paid time off for vacation and sick leave.
Revenue Recognition. The Company’s sole revenue stream is time-and-materials labor services, together with reimbursed travel costs, recognized under ASC 606, Revenue from Contracts with Customers. The Company’s performance obligation is to provide technical consulting services through qualified personnel at contractually specified hourly rates, and the Company acts as principal. Performance obligations are satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance as labor is provided.
The Company recognizes revenue using an output method, applying the practical expedient in ASC 606-10-55-18, under which revenue is recognized in the amount of consideration to which the Company has a right to invoice. The Company’s right to consideration becomes fixed and enforceable when approved hours are entered into the applicable prime contractor’s timekeeping system.
Reimbursable travel costs are recovered in accordance with the terms of the applicable subcontract, which limit reimbursement to prevailing U.S. General Services Administration per diem and lodging rates, plus applicable lodging taxes. The Company has determined that these costs are incurred in fulfilling its performance obligation to provide labor services rather than in transferring a separate good or service and accordingly are included in the transaction price.
Payment terms range from net 30 to net 45 depending on the subcontract. The Company’s contracts do not contain a significant financing component, as the period between performance and payment is less than one year, and do not contain variable consideration or provisions for returns, refunds, or warranties.
The Company has elected the nonpublic entity disclosure practical expedients under ASC 606. Revenue is recognized over time and consists of a single revenue stream from time-and-materials services performed for prime contractors on U.S. federal government contracts.
Contract Balances. Receivables from contracts with customers, consisting of amounts due from prime contractors for labor services and reimbursable travel costs, are recorded within accounts receivable.
Accounts receivable balances were as follows:
| Date | Amount | |||
| January 1, 2024 | 552,300 | |||
| December 31, 2024 | 427,973 | |||
| December 31, 2025 | 357,296 | |||
The Company did not have material contract assets or contract liabilities as of January 1, 2024, December 31, 2024, or December 31, 2025.
7
Leases. The Company’s only leases are short-term office space leases. All lease arrangements have initial terms of 12 months or less and do not include a purchase option that the Company is reasonably certain to exercise. The Company has elected the short-term lease recognition exemption under ASC 842 for leases with an initial term of 12 months or less. Accordingly, the Company does not recognize right-of-use assets or lease liabilities for these leases, and lease payments are recognized as lease expense on a straight-line basis over the lease term.
Short-term lease expense was $43,425 and $55,595 for the years ended December 31, 2025 and 2024, respectively,
Income Taxes. The Company has elected, with the consent of its members, to be treated as an S corporation for federal and state income tax purposes. In lieu of entity-level corporate income taxes, the members report their proportionate shares of the Company’s taxable income on their individual income tax returns. Accordingly, no provision for federal or state corporate income taxes has been recorded.
Recently Issued Accounting Pronouncements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, effective for the Company for fiscal years beginning after December 15, 2025, with early adoption permitted. As substantially all of the Company’s receivables are due from prime contractors under U.S. federal government contracts, with no history of credit losses, management does not expect adoption to have a material impact on its financial statements. The Company early adopted the standard during the year ended December 31, 2025, applying its provisions prospectively.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories within the effective tax rate reconciliation that meet a quantitative threshold, as well as disaggregation of income taxes paid by jurisdiction. The amendments are effective for the Company for fiscal years beginning after December 15, 2025, with early adoption permitted. Given the Company’s pass-through tax status and limited state tax exposure, management does not expect adoption to have a material impact on its financial statements.
3. Investments and Fair Value Measurements
The Company’s investments, short-term investments, money market mutual funds, mutual funds, and ETFs, are classified within Level 1 of the fair value hierarchy under ASC 820, Fair Value Measurement, as they are valued using quoted prices in active markets for identical assets. The Company had no Level 2 or Level 3 inputs in either period presented.
| December 31, 2025 | ||||||||||||
| Asset Type | Level 1 | Level 2 | Level 3 | Total | ||||||||
| Short term investments | $ | 2,519 | $ | 2,519 | ||||||||
| Money market mutual funds | 1,068,152 | 1,068,152 | ||||||||||
| Mutual funds | 467,715 | 467,715 | ||||||||||
| ETFs | 63,417 | 63,417 | ||||||||||
| Total assets measured at fair value | $ | 1,601,803 | $ | 1,601,803 | ||||||||
| December 31, 2024 | ||||||||||||
| Asset Type | Level 1 | Level 2 | Level 3 | Total | ||||||||
| Short term investments | 532,745 | 532,745 | ||||||||||
| Mutual funds | 468,071 | 468,071 | ||||||||||
| ETFs | ||||||||||||
| Total assets measured at fair value | $ | 1,000,816 | $ | 1,000,816 | ||||||||
The Company recognized net unrealized gains on investments of $27,644 and $26,608, net realized gains on investments of $26,236 and $13,191, and interest and dividend income of $49,022 and $31,134, for the years ended December 31, 2025 and 2024, respectively.
8
4. Property and Equipment
Property and equipment consist of computer equipment and machinery, stated at cost less accumulated depreciation.
| Asset Group | 2025 | 2024 | ||||||
| Furniture & Fixtures | $ | 1,379 | $ | 1,379 | ||||
| Computer Equipment | 48,856 | 47,319 | ||||||
| Total, at Cost | 50,235 | 48,698 | ||||||
| Accumulated Depreciation | (50,196 | ) | $ | (48,644 | ) | |||
| Property & Equipment, Net | $ | 39 | $ | 54 | ||||
Depreciation expense was $1,552 and $22 for the years ended December 31, 2025 and 2024, respectively.
5. Accounts Payable & Accrued Liabilities
Accounts payable and accrued liabilities consist of the following at December 31:
| 2025 | 2024 | |||||||
| Accounts Payable | $ | 2,966 | $ | 9,176 | ||||
| 401(k) contributions payable | 70,002 | 36,499 | ||||||
| Health savings account contributions payable | 11,500 | 6,679 | ||||||
| Accrued compensated absences | 51,533 | 53,901 | ||||||
| Total accrued liabilities | $ | 136,001 | $ | 106,255 | ||||
6. Members’ Equity
The Company is a limited liability company organized under the laws of the State of Maryland. The liability of each member is limited to the member’s capital contribution. The Company has two members holding membership interests of 65% and 35%, President and Vice President, respectively. The membership interests constitute a single class with identical rights to distributions and to liquidation proceeds, allocated in proportion to each member’s ownership percentage, and net income is allocated in the same proportions. The operating agreement does not provide for redemption of membership interests, and the Company has perpetual existence with no stated termination date.
Distributions are made at the discretion of the members in proportion to their respective ownership interests and totaled $465,339 and $380,528 for the years ended December 31, 2025 and 2024, respectively.
7. Retirement Plan
The Company sponsors a 401(k) defined contribution retirement plan covering substantially all employees, under which it makes a safe harbor matching contribution funded with each monthly payroll. The Company’s contributions to the plan totaled $164,899 and $171,050 for the years ended December 31, 2025 and 2024, respectively.
9
8. Concentrations
The Company maintains its cash in two accounts at a single financial institution. Amounts on deposit in excess of federally insured limits totaled approximately $566,987 and $844,145 at December 31, 2025 and 2024, respectively. Investments are held in brokerage accounts at a single institution. The Company has not experienced any losses in these accounts.
For the year ended December 31, 2025, “Customer A” and “Customer B” represented approximately 74% and 26%, respectively, of the Company’s revenue. For the year ended December 31, 2024 “Customer A” and “Customer B” represented approximately 75% and 24%, respectively, of the Company’s revenue.
“Customer A” and “Customer B” represented approximately 57% and 43%, respectively, of gross accounts receivable as of December 31, 2025, and approximately 65% and 35%, respectively, as of December 31, 2024.
The loss of one of its prime contractor relationships could have a material adverse effect on the Company’s operations.
9. Subsequent Events
Management has evaluated subsequent events through September 8, 2026, the date the financial statements were available to be issued.
In June 2026, the Company’s members entered into a definitive purchase agreement with Rank One Computing Corporation (“ROC”) providing for the sale of all of the outstanding membership interests of the Company. The transaction closed on August 31, 2026.
In May 2026, the Company’s contract with Customer A, which represented approximately 74% of revenue for the year ended December 31, 2025, reached its scheduled expiration. The Company has reassigned certain personnel who had performed services under that contract to other customer contracts and to services under a Professional Services Agreement entered into with ROC in March 2026. Management is continuing to evaluate the financial effect of the expiration of the Customer A contract and cannot reasonably estimate the ultimate impact at this time.
Prior to closing, and as permitted by the purchase agreement, the Company will liquidate the marketable securities held in its investment accounts, which had a carrying amount of $1,601,803 at December 31, 2025, will close those accounts, and distribute the proceeds to its members. The marketable securities and related proceeds are excluded from the assets to be acquired by ROC.
10
Exhibit 99.2
ZUCCARO TECHNICAL CONSULTING, LLC
Condensed Financial Statements
Six Months Ended June 30, 2026
(Unaudited)
Index to Financial Statements
| Condensed Balance Sheets | 1 |
| Condensed Statement of Operations | 2 |
| Condensed Statement of Changes in Members’ Equity | 3 |
| Condensed Statement of Cash Flows | 4 |
| Notes to the Condensed Financial Statements | 5 |
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ZUCCARO TECHNICAL CONSULTING, LLC
Condensed Balance Sheets
June 30, 2026 (unaudited) and December 31, 2025
| June 30, 2026 (unaudited) | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 446,449 | $ | 816,987 | ||||
| Marketable Securities | 1,653,596 | 1,601,803 | ||||||
| Accounts receivable, net of allowance for credit losses of $0 | 599,975 | 357,295 | ||||||
| Other receivables | 3,357 | 3,357 | ||||||
| Total Current Assets | $ | 2,703,377 | $ | 2,779,442 | ||||
| Property and Equipment, Net | - | 39 | ||||||
| Total Assets | $ | 2,703,377 | $ | 2,779,481 | ||||
| LIABILITIES AND MEMBERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts Payable and accrued liabilities | $ | 98,349 | $ | 136,001 | ||||
| Total Current Liabilities | $ | 98,349 | $ | 136,001 | ||||
| Members’ Equity | $ | 2,605,028 | $ | 2,643,480 | ||||
| Total Liabilities and Members’ Equity | $ | 2,703,377 | $ | 2,779,481 | ||||
1
ZUCCARO TECHNICAL CONSULTING, LLC
Condensed Statement of Operations
Six Months Ended June 30, 2026 (Unaudited)
| 2026 | ||||
| Revenue | $ | 2,024,417 | ||
| Cost of revenue | 1,579,330 | |||
| Gross profit | $ | 445,087 | ||
| General and administrative expenses | 197,203 | |||
| Income from operations | $ | 247,884 | ||
| Other income (expense) | ||||
| Dividend, interest and Other Income | $ | 30,878 | ||
| Unrealized gain on investments | 22,830 | |||
| Investment expenses and foreign taxes | (1,797 | ) | ||
| Total other income | $ | 51,911 | ||
| Net income | $ | 299,795 | ||
2
ZUCCARO TECHNICAL CONSULTING, LLC
Condensed Statement of Changes in Members’ Equity
Six Months Ended June 30, 2026 (Unaudited)
| MEMBERS’ EQUITY | ||||
| Beginning Balance at January 1, 2026 | $ | 2,643,480 | ||
| Net Income | 299,795 | |||
| Distributions | (338,247 | ) | ||
| Ending Balance at June 30, 2026 | $ | 2,605,028 | ||
3
ZUCCARO TECHNICAL CONSULTING, LLC
Condensed Statement of Cash Flows
Six Months Ended June 30, 2026 (Unaudited)
| 2026 | ||||
| Cash flows from operating activities | ||||
| Net income | $ | 299,795 | ||
| Adjustments reconciling net income to net cash used in operating activities: | ||||
| Depreciation | 39 | |||
| Net appreciation in fair value of investments | (22,830 | ) | ||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | (242,680 | ) | ||
| Accounts payable and accrued liabilities | (37,652 | ) | ||
| Net cash used in operating activities | (3,328 | ) | ||
| Cash flows from investing activities | ||||
| Net (purchases) sales of investments | (28,963 | ) | ||
| Net cash used in investing activities | (28,963 | ) | ||
| Cash flows from financing activities | ||||
| Distributions to members | (338,247 | ) | ||
| Net cash used in financing activities | (338,247 | ) | ||
| Net decrease in cash and cash equivalents | (370,538 | ) | ||
| Cash and cash equivalents, beginning of period | 816,987 | |||
| Cash and cash equivalents, end of period | $ | 446,449 | ||
4
ZUCCARO TECHNICAL CONSULTING, LLC
Notes to the Condensed Financial Statements
June 30, 2026 (Unaudited)
1. Nature of Operations and Acquisition
Acquisition by Rank One Computing Corporation (“ROC”). On June 23, 2026, ZTC Holdco, Inc., the sole member of Zuccaro Technical Consulting, LLC (the “Company”), entered into a Purchase Agreement with ROC providing for the sale of all of the outstanding membership interests of the Company. The transaction closed on August 31, 2026, resulting in ROC’s acquisition of the Company. These condensed financial statements reflect the Company’s financial position and results of operations for the six months ended June 30, 2026, a period prior to the closing of the transaction. See Note 7.
Nature of Operations. Zuccaro Technical Consulting, LLC is a Maryland limited liability company founded in April of 2004 that provides digital forensics software design and development services as a subcontractor to prime contractors on U.S. federal government contracts. The Company’s services are provided primarily on a time-and-materials basis, with labor billed at contractually established hourly rates and allowable travel costs reimbursed under the related subcontracts. The Company’s operations and customers are located in the United States, and services are performed from the Company’s offices in Virginia and at federal government customer sites.
On June 18, 2026, the Company’s members contributed all of their outstanding membership interests in the Company to ZTC Holdco, Inc., a Maryland corporation formed by the members for that purpose, in exchange for all of its outstanding common stock. Effective as of that date, ZTC Holdco, Inc. elected to treat the Company as a qualified subchapter S subsidiary, and effective June 19, 2026 the Company elected to be classified as an entity disregarded as separate from its owner (collectively, the “Reorganization”). The Reorganization was a transaction among entities under common control and did not change the historical carrying amounts of the Company’s assets, liabilities or members’ equity. ZTC Holdco, Inc. has been the sole member of the Company since June 18, 2026.
2. Basis of Presentation
The accompanying condensed financial statements are unaudited and have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed balance sheet as of December 31, 2025 has been derived from the Company’s audited financial statements as of that date.
In the opinion of management, the accompanying condensed financial statements include all adjustments, consisting of normal recurring accruals, considered necessary for a fair statement of the Company’s financial position as of June 30, 2026 and its results of operations and cash flows for the six months ended June 30, 2026. Results of operations for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
These condensed financial statements should be read in conjunction with the Company’s audited financial statements and the related notes for the years ended December 31, 2025 and 2024. There have been no material changes to the Company’s significant accounting policies from those described in those audited financial statements.
Allowance for Credit Losses. The Company evaluates its trade accounts receivable for expected credit losses under ASC 326, Financial Instruments—Credit Losses. The Company early adopted ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, effective for the year ended December 31, 2025, and has elected both the practical expedient to assume that current conditions as of the balance sheet date do not change over the remaining life of its receivables and the accounting policy election to consider collection activity occurring after the balance sheet date but before the financial statements are available to be issued. Management identified no history of write-offs, no disputes, and no indicators of credit deterioration, and evaluated subsequent collection activity through the date these condensed financial statements were available to be issued (see Note 7). Based on this evaluation, no allowance for credit losses was required as of June 30, 2026.
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Revenue Recognition. The Company generates substantially all of its revenue from time-and-materials labor services provided as a subcontractor to Prime contractors on U.S. federal government contracts, recognized over time as the services are performed in accordance with ASC 606, Revenue from Contracts with Customers. Because the Company operates within a single line of business and its contracts share similar economic characteristics and risk profiles, management has concluded that no further disaggregation of revenue by category or contract type would provide useful information beyond what is presented.
Income Taxes. Through June 18, 2026, the Company was treated as an S corporation for federal and state income tax purposes. In connection with the Reorganization described in Note 1, the Company became a qualified subchapter S subsidiary of ZTC Holdco, Inc. effective June 18, 2026 and elected to be classified as an entity disregarded as separate from its owner effective June 19, 2026. The Company was not subject to entity-level federal or state corporate income taxes either before or after the change in tax status, and taxable income continues to be reported by the owners on their individual income tax returns. Accordingly, no provision for federal or state corporate income taxes has been recorded, and the change in tax status had no effect on these condensed financial statements.
Recently Adopted Accounting Pronouncements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, effective for the Company for fiscal years beginning after December 15, 2025, with early adoption permitted. The standard requires enhanced income tax disclosures, including additional disaggregation within the effective tax rate reconciliation and income taxes paid by jurisdiction. The Company adopted the standard on January 1, 2026, and its adoption did not have a material impact on the Company’s financial statements given the Company’s pass-through tax status and limited state tax exposure.
3. Investments and Fair Value Measurements
The Company’s investments, short-term investments, money market mutual funds, mutual funds, and ETFs, are classified within Level 1 of the fair value hierarchy under ASC 820, Fair Value Measurement, as they are valued using quoted prices in active markets for identical assets. The Company had no Level 2 or Level 3 inputs in either period presented.
| June 30, 2026 | ||||
| Asset Type | Level 1 | |||
| Short term investments | $ | 634 | ||
| Money market mutual funds | 1,087,331 | |||
| Mutual funds | 497,421 | |||
| ETFs | 68,210 | |||
| Total assets measured at fair value | $ | 1,653,596 | ||
| December 31, 2025 | ||||
| Asset Type | Level 1 | |||
| Short term investments | $ | 2,519 | ||
| Money market mutual funds | 1,068,152 | |||
| Mutual funds | 467,715 | |||
| ETFs | 63,417 | |||
| Total assets measured at fair value | $ | 1,601,803 | ||
The Company recognized net unrealized gains on investments of $22,830, no net realized gains or losses, and interest and dividend income of $30,878, for the six months ended June 30, 2026.
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4. Accounts Payable & Accrued Liabilities
Accounts payable and accrued liabilities consist of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Accounts Payable | $ | 3,565 | $ | 2,966 | ||||
| 401(k) contributions payable | 33,583 | 70,002 | ||||||
| Health savings account contributions payable | 6,068 | 11,500 | ||||||
| Other accrued expenses | 3,600 | - | ||||||
| Accrued compensated absences | 51,533 | 51,533 | ||||||
| Total accounts payable and accrued liabilities | $ | 98,349 | $ | 136,001 | ||||
5. Members’ Equity
The Company is a limited liability company organized under the laws of the State of Maryland. The liability of each member is limited to the member’s capital contribution. As described in Note 1, on June 18, 2026 the Company’s two members contributed all of their membership interests to ZTC Holdco, Inc., and ZTC Holdco, Inc. has been the Company’s sole member since that date. The membership interests constitute a single class with identical rights to distributions and to liquidation proceeds, and net income is allocated in proportion to ownership percentage. The operating agreement does not provide for redemption of membership interests, and the Company has perpetual existence with no stated termination date.
Distributions are made at the discretion of the member and totaled $338,247 for the six months ended June 30, 2026.
6. Concentrations
The Company maintains its cash in two accounts at a single financial institution. Amounts on deposit in excess of federally insured limits totaled approximately $196,449 and $566,987 at June 30, 2026 and December 31, 2025, respectively. Investments are held in brokerage accounts at a single institution. The Company has not experienced any losses in these accounts.
For the six months ended June 30, 2026, “Customer A,” “Customer B” and “Customer C” represented approximately 51%, 29% and 20%, respectively, of the Company’s revenue. The Company’s contract with “Customer A” reached its scheduled expiration on May 31, 2026. “Customer C” represents services performed under a professional services agreement entered into in March 2026, and those services ceased in August 2026.
“Customer A,” “Customer B” and “Customer C” represented approximately 1%, 65% and 34%, respectively, of gross accounts receivable as of June 30, 2026. “Customer A” and “Customer B” represented approximately 57% and 43%, respectively, of gross accounts receivable as of December 31, 2025.
The loss of one of its prime contractor relationships could have a material adverse effect on the Company’s operations.
7. Subsequent Events
Management has evaluated subsequent events through October 29, 2026, the date the condensed financial statements were available to be issued.
The sale of all the outstanding membership interests of the Company to ROC, described in Note 1, closed on August 31, 2026.
In August 2026, prior to closing and as permitted by the Purchase Agreement, the Company liquidated all the marketable securities held in its investment accounts, closed those accounts, and distributed the proceeds to its member. The marketable securities and related proceeds were excluded from the assets acquired by ROC.
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Exhibit 99.3
RANK ONE COMPUTING CORPORATION
Unaudited Pro Forma Condensed Combined Financial Information
On June 23, 2026, Rank One Computing Corporation (“ROC” or the “Company”) entered into a Purchase Agreement (the “Purchase Agreement”) with ZTC Holdco, Inc. (the “Seller”), Anthony J. Zuccaro and Emily J. Sverchek (together, the “Owners”) and Zuccaro Technical Consulting LLC (“ZTC”), providing for the purchase by ROC of all of the issued and outstanding membership interests of ZTC (the “Acquisition”). ZTC provides digital evidence, federal digital forensics, data exploitation and related engineering and technical consulting services, principally as a subcontractor to prime contractors on U.S. federal government contracts. The Acquisition closed on August 31, 2026. Consideration consisted of a cash payment based on a base amount of $500,000, adjusted for estimated closing indebtedness, estimated closing transaction expenses and the amount by which estimated net working capital differs from a $300,000 target, a payable to the Seller of ZTC’s cash at Closing, and restricted shares of ROC common stock with an aggregate stated value of $2,500,000 under the Purchase Agreement (416,666 shares, determined using the $6.00 per share floor price), of which shares with a stated value of $875,000 (145,833 shares) vested at Closing and shares with a stated value of $1,625,000 (270,833 shares) remain subject to forfeiture based on the Owners’ continued service. For accounting purposes, the vested shares are included in consideration transferred at fair value based on ROC’s closing stock price on the Closing Date, and the forfeitable shares are accounted for as post-combination compensation. See Note 3.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and presents the Transaction Accounting Adjustments necessary to reflect the Acquisition under the acquisition method of accounting in Accounting Standards Codification (“ASC”) 805, Business Combinations, with ROC as the accounting acquirer.
The unaudited pro forma condensed combined financial information was derived from, and should be read together with, (i) ROC’s audited consolidated financial statements as of and for the year ended December 31, 2025 and its unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2026, and (ii) ZTC’s audited financial statements as of and for the years ended December 31, 2025 and 2024 and its unaudited interim financial statements as of and for the six months ended June 30, 2026, included as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K/A. Both ROC and ZTC prepare their financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and report in U.S. dollars; accordingly, no conversion or currency translation adjustments were required.
The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of what the combined company’s results of operations or financial position would have been had the Acquisition been completed on the dates indicated, nor is it indicative of the future results of operations or financial position of the combined company. The pro forma adjustments are based on currently available information and on assumptions that management believes are reasonable. The purchase price allocation reflected herein is preliminary and has been made solely for the purpose of preparing this pro forma financial information; the final allocation will be determined after completion of the valuation of the assets acquired and liabilities assumed and may differ materially. See Note 3.
Unaudited Pro Forma Condensed Combined Balance Sheet
June 30, 2026
| ROC Historical | ZTC Historical | Transaction Accounting Adjustments | Notes | Pro Forma Combined | ||||||||||||||
| ASSETS | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash | $ | 11,913,463 | $ | 446,449 | $ | (845,913 | ) | (a)(h) | $ | 11,513,999 | ||||||||
| Accounts receivable, net of allowance for credit losses | 5,590,579 | 599,975 | (203,992 | ) | (i) | 5,986,562 | ||||||||||||
| Marketable securities | — | 1,653,596 | (1,653,596 | ) | (c) | — | ||||||||||||
| Prepaid expenses and other current assets | 694,910 | 3,357 | — | 698,267 | ||||||||||||||
| Total current assets | 18,198,952 | 2,703,377 | (2,703,501 | ) | 18,198,828 | |||||||||||||
| Property and equipment, net | 1,030,318 | — | — | 1,030,318 | ||||||||||||||
| Intangible assets, net | 4,759 | — | 693,000 | (d) | 697,759 | |||||||||||||
| Operating lease right-of-use asset | 945,954 | — | — | 945,954 | ||||||||||||||
| Capitalized software | 1,755,147 | — | — | 1,755,147 | ||||||||||||||
| Other assets | 35,643 | — | — | 35,643 | ||||||||||||||
| Goodwill | — | — | 115,124 | (f) | 115,124 | |||||||||||||
| Total non-current assets | 3,771,821 | — | 808,124 | 4,579,945 | ||||||||||||||
| Total assets | $ | 21,970,773 | $ | 2,703,377 | $ | (1,895,377 | ) | $ | 22,778,773 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable and accrued expenses | $ | 2,117,986 | $ | 98,349 | $ | (203,992 | ) | (i) | $ | 2,012,343 | ||||||||
| Deferred revenue | 954,360 | — | — | 954,360 | ||||||||||||||
| Acquisition consideration payable | — | — | 446,449 | (e) | 446,449 | |||||||||||||
| Operating lease liabilities, short term | 312,328 | — | — | 312,328 | ||||||||||||||
| Total current liabilities | 3,384,674 | 98,349 | 242,457 | 3,725,480 | ||||||||||||||
| Operating lease liabilities | 755,967 | — | — | 755,967 | ||||||||||||||
| Other long-term liabilities | 8,879 | — | — | 8,879 | ||||||||||||||
| Deferred tax liability | 13,703 | — | — | 13,703 | ||||||||||||||
| Total long-term liabilities | 778,549 | — | — | 778,549 | ||||||||||||||
| Total liabilities | $ | 4,163,223 | $ | 98,349 | $ | 242,457 | $ | 4,504,029 | ||||||||||
| Stockholders’ equity (deficit): | ||||||||||||||||||
| Common stock | 190,801 | — | 4,167 | (b) | 194,968 | |||||||||||||
| Shareholder distributions | — | (338,247 | ) | 338,247 | (g) | — | ||||||||||||
| Additional paid-in capital | 26,140,399 | — | 603,957 | (b) | 26,744,356 | |||||||||||||
| Accumulated deficit | (8,523,650 | ) | 2,943,275 | (3,084,205 | ) | (g)(h) | (8,664,580 | ) | ||||||||||
| Total stockholders’ equity (deficit) | $ | 17,807,550 | $ | 2,605,028 | $ | (2,137,834 | ) | $ | 18,274,744 | |||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | 21,970,773 | $ | 2,703,377 | $ | (1,895,377 | ) | $ | 22,778,773 | |||||||||
| 2 |
Unaudited Pro Forma Condensed Combined Statement of Operations
Year Ended December 31, 2025
| ROC Historical | ZTC Historical | Transaction Accounting Adjustments | Notes | Pro Forma Combined | ||||||||||||||
| Sales | $ | 16,979,679 | $ | 4,329,012 | $ | (12,500 | ) | (gg) | $ | 21,296,191 | ||||||||
| Cost of sales | 3,868,297 | 3,394,237 | (12,500 | ) | (gg) | 7,250,034 | ||||||||||||
| Gross profit | 13,111,382 | 934,775 | — | 14,046,157 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling, general and administrative | 8,338,815 | 347,011 | 1,168,677 | (bb)(ee)(ff) | 9,854,503 | |||||||||||||
| Amortization | — | — | 105,900 | (cc) | 105,900 | |||||||||||||
| Research and development | 6,771,614 | — | — | 6,771,614 | ||||||||||||||
| Income (loss) from operations | (1,999,047 | ) | 587,764 | (1,274,577 | ) | (2,685,860 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest income | 1 | 76,977 | (76,977 | ) | (aa) | 1 | ||||||||||||
| Interest expense | (80,982 | ) | — | — | (80,982 | ) | ||||||||||||
| Other expense | (2,020 | ) | (3,656 | ) | 3,656 | (aa) | (2,020 | ) | ||||||||||
| Unrealized gain on investments | — | 27,644 | (27,644 | ) | (aa) | — | ||||||||||||
| Other income | 20,281 | — | — | 20,281 | ||||||||||||||
| Total other income (expense) | (62,720 | ) | 100,965 | (100,965 | ) | (62,720 | ) | |||||||||||
| Income (loss) before income taxes | (2,061,767 | ) | 688,729 | (1,375,542 | ) | (2,748,580 | ) | |||||||||||
| Provision for income taxes | 615,079 | — | — | 615,079 | ||||||||||||||
| Net income (loss) | $ | (2,676,846 | ) | $ | 688,729 | $ | (1,375,542 | ) | $ | (3,363,659 | ) | |||||||
| Net loss per share – basic | $ | (0.18 | ) | $ | (0.22 | ) | ||||||||||||
| Net loss per share – diluted | $ | (0.18 | ) | $ | (0.22 | ) | ||||||||||||
| Weighted average shares – basic | 15,007,089 | 145,833 | (dd) | 15,152,922 | ||||||||||||||
| Weighted average shares – diluted | 15,007,089 | 145,833 | (dd) | 15,152,922 | ||||||||||||||
| 3 |
Unaudited Pro Forma Condensed Combined Statement of Operations
Six Months Ended June 30, 2026
| ROC Historical | ZTC Historical | Transaction Accounting Adjustments | Notes | Pro Forma Combined | ||||||||||||||
| Sales | $ | 7,641,624 | $ | 2,024,417 | $ | (374,284 | ) | (gg) | $ | 9,291,757 | ||||||||
| Cost of sales | 1,069,267 | 1,579,330 | (7,419 | ) | (gg) | 2,641,178 | ||||||||||||
| Gross profit | 6,572,357 | 445,087 | (366,865 | ) | 6,650,579 | |||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling, general and administrative | 6,205,656 | 197,203 | 114,248 | (bb)(ee)(ff) | 6,517,107 | |||||||||||||
| Amortization | — | — | 52,950 | (cc) | 52,950 | |||||||||||||
| Research and development | 4,157,535 | — | — | 4,157,535 | ||||||||||||||
| Income (loss) from operations | (3,790,834 | ) | 247,884 | (534,063 | ) | (4,077,013 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest income (expense) | (8,712 | ) | 30,878 | (30,878 | ) | (aa) | (8,712 | ) | ||||||||||
| Unrealized gain on investments | — | 22,830 | (22,830 | ) | (aa) | — | ||||||||||||
| Other expense | — | (1,796 | ) | 1,796 | (aa) | — | ||||||||||||
| Other income | (55,161 | ) | — | — | (55,161 | ) | ||||||||||||
| Total other income (expense) | (63,873 | ) | 51,912 | (51,912 | ) | (63,873 | ) | |||||||||||
| Income (loss) before income taxes | (3,854,707 | ) | 299,796 | (585,975 | ) | (4,140,886 | ) | |||||||||||
| Provision for income taxes | — | — | — | — | ||||||||||||||
| Net income (loss) | $ | (3,854,707 | ) | $ | 299,796 | $ | (585,975 | ) | $ | (4,140,886 | ) | |||||||
| Net loss per share – basic | $ | (0.22 | ) | $ | (0.23 | ) | ||||||||||||
| Net loss per share – diluted | $ | (0.22 | ) | $ | (0.23 | ) | ||||||||||||
| Weighted average shares – basic | 17,859,295 | 145,833 | (dd) | 18,005,128 | ||||||||||||||
| Weighted average shares – diluted | 17,859,295 | 145,833 | (dd) | 18,005,128 | ||||||||||||||
| 4 |
RANK ONE COMPUTING CORPORATION
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1 — Description of the Transaction
Pursuant to the Purchase Agreement, ROC acquired from the Seller all of the issued and outstanding membership interests of ZTC. Prior to Closing, the Owners contributed their membership interests in ZTC to the Seller in exchange for all of the outstanding capital stock of the Seller, the Seller made a qualified subchapter S subsidiary election with respect to ZTC, and ZTC elected to be classified as an entity disregarded as separate from its owner (collectively, the “Reorganization”). The Reorganization was intended to qualify as a reorganization under the Internal Revenue Code. As a result, ROC’s purchase of the membership interests of a disregarded entity is treated for U.S. federal income tax purposes as a purchase of the underlying assets, with the purchase price allocated among the assets acquired and a corresponding step-up in tax basis. Goodwill and intangible assets arising in the Acquisition are amortizable for tax purposes over 15 years.
Consideration under Section 2.2 of the Purchase Agreement consisted of (i) a cash payment equal to $500,000, minus estimated closing indebtedness, minus estimated closing transaction expenses, plus the amount (positive or negative) by which estimated net working capital exceeded or was less than a $300,000 working capital target (the “Closing Cash Payment”), and (ii) $2,500,000 in restricted shares of ROC common stock issued to the Seller under Section 2.9 (the “Restricted Stock Consideration”). The number of restricted shares was determined by dividing $2,500,000 by the greater of the volume-weighted average closing price of ROC common stock for the 20 trading days immediately preceding the Closing Date and a floor price of $6.00 per share. The $6.00 floor price was greater than the 20-trading-day VWAP and, therefore, was used to determine the number of shares issued.
The Closing Cash Payment is subject to a post-closing true-up under Sections 2.7 and 2.8 of the Purchase Agreement based on a Final Adjustment Statement to be delivered within 60 days after Closing. Section 2.6(a) of the Purchase Agreement also requires ROC to distribute ZTC’s Estimated Closing Cash to the Seller. That amount was not remitted at Closing and remains payable to the Seller.
The Purchase Agreement also provides for (i) quarterly Revenue Share Payments to the Owners under Section 2.10 equal to 15% of ROC Evidence Advanced Revenue for each fiscal quarter during a seven-year Revenue Share Term, subject to an aggregate cap of $7,000,000, and (ii) restricted stock unit grants to continuing ZTC employees. As described in Note 3, these arrangements, together with the portion of the Restricted Stock Consideration that remains subject to forfeiture, are accounted for as post-combination compensation cost rather than as consideration transferred.
The Acquisition has been accounted for as a business combination under the acquisition method in ASC 805, with ROC as the accounting acquirer.
Note 2 — Basis of Presentation
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and reflects Transaction Accounting Adjustments as defined in S-X 11-02(a)(6)(i), which depict the accounting for the Acquisition required by U.S. GAAP. Autonomous Entity Adjustments under S-X 11-02(a)(6)(ii) are not applicable because the Acquisition does not effect a change in ROC’s status as an autonomous entity. Management’s Adjustments under S-X 11-02(a)(7) have not been presented; see Note 7.
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The Acquisition was consummated on August 31, 2026. The pro forma condensed combined balance sheet is presented as of June 30, 2026 and gives effect to the Acquisition as if it had been consummated on that date. The pro forma condensed combined statements of operations for the year ended December 31, 2025 and the six months ended June 30, 2026 give effect to the Acquisition as if it had been consummated on January 1, 2025. Transaction Accounting Adjustments that are nonrecurring are accordingly reflected only in the year ended December 31, 2025 and are not repeated in the interim period presented; see Note 6.
Two elements of the purchase price are determined under the Purchase Agreement by reference to ZTC’s balance sheet at Closing: the net working capital adjustment included in the Closing Cash Payment and the distribution of Estimated Closing Cash to the Seller. Consistent with the assumption that the Acquisition occurred on June 30, 2026, the pro forma condensed combined balance sheet reflects those elements calculated using ZTC’s historical balance sheet as of June 30, 2026. ZTC’s net working capital at June 30, 2026 was $504,983, an excess of $204,983 over the $300,000 target, and its cash was $446,449. The effective settlement of the preexisting trade balance between ROC and ZTC is likewise measured at its June 30, 2026 amount of $203,992. All other elements of consideration transferred, and the fair values of the identifiable intangible assets acquired, are measured as of August 31, 2026, the acquisition date. On that basis, consideration transferred reflected in the pro forma condensed combined balance sheet is $1,555,564, compared with $1,337,988 at the acquisition date; the difference is reconciled in Note 3. Because each of these elements changes the purchase price dollar for dollar with the related assets acquired and liabilities assumed, the difference has no effect on goodwill, and goodwill in the pro forma condensed combined balance sheet equals goodwill in the preliminary purchase price allocation in Note 3.
Accounting policies and presentation. ZTC’s historical financial information was derived from financial statements prepared in accordance with U.S. GAAP applicable to public business entities. Management performed a preliminary review of ZTC’s financial statement presentation and significant accounting policies and identified no accounting policy differences that would have a material effect on the pro forma financial information. ZTC’s historical financial statement captions are consistent with ROC’s presentation, and no reclassifications were required to conform ZTC’s historical presentation to ROC’s. Certain ZTC captions that have no corresponding ROC caption, principally those related to the brokerage accounts that were liquidated and distributed prior to Closing, are eliminated in their entirety by the transaction accounting adjustments described below. ROC is continuing its review of ZTC’s accounting policies and presentation and may identify additional differences that, when conformed, could have a material effect on ROC’s consolidated financial statements.
Items for which no Transaction Accounting Adjustment has been reflected. No adjustment has been reflected for the following, in each case because the estimated acquisition-date fair value approximates the historical carrying amount, because no adjustment is required by U.S. GAAP, or because the amount is not significant to the pro forma financial information:
| ● | Property and equipment. ZTC’s property and equipment consists of computer equipment and furniture that is substantially fully depreciated and de minimis in amount. Estimated acquisition-date fair value approximates net book value, and no adjustment to property and equipment or to depreciation expense has been reflected. |
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| ● | Accounts receivable. ZTC’s receivables consist of amounts due from prime contractors for approved labor hours and reimbursable travel costs under time-and-materials subcontracts, with payment terms of net 30 to net 45 and no history of credit losses. Estimated acquisition-date fair value approximates the historical carrying amount. |
| ● | Accounts payable and accrued liabilities. Assumed liabilities are short-term in nature and estimated acquisition-date fair value approximates the historical carrying amount. |
| ● | Assembled workforce. The value of ZTC’s assembled workforce is not recognized as a separately identifiable intangible asset under ASC 805 and is subsumed within goodwill. |
| ● | Revenue Share Payments. Under the Purchase Agreement, ROC will pay the Owners quarterly amounts equal to 15% of ROC Evidence Advanced Revenue over a seven-year Revenue Share Term, subject to an aggregate cap of $7,000,000. As described in Note 3, the Revenue Share Payments are post-combination compensation for services rather than contingent consideration, and no contingent consideration liability has been recognized in the Acquisition accounting. ROC Evidence is a recently introduced offering; ROC Evidence Advanced Revenue was not material in either period presented, and the resulting compensation expense is not material to the pro forma statements of operations. Accordingly, no adjustment has been reflected. |
| ● | Forgone interest income. ROC funded the cash disbursed at Closing from cash on hand and did not incur indebtedness in connection with the Acquisition. The interest income forgone on those funds is not material to the pro forma statements of operations, and no adjustment has been reflected. |
| ● | Deferred income taxes. As a result of the Reorganization, ROC’s purchase of the ZTC membership interests is treated as a purchase of assets for U.S. federal income tax purposes, and the tax bases of the assets acquired are stepped up to their allocated purchase price under the Internal Revenue Code. The tax bases of the assets acquired and liabilities assumed approximate the amounts recognized for financial reporting purposes, and no deferred tax liability arises in the Acquisition. To the extent the tax bases exceed the amounts recognized for financial reporting purposes, including any tax-deductible goodwill in excess of goodwill recognized for financial reporting purposes, the resulting deferred tax assets would be offset in full by a valuation allowance, consistent with ROC’s existing full valuation allowance against its net deferred tax assets. Because no deferred tax liabilities were assumed, the Acquisition does not provide a source of future taxable income that would support realization of ROC’s pre-existing deferred tax assets, and no change in ROC’s valuation allowance has been reflected. |
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Note 3 — Preliminary Consideration Transferred and Purchase Price Allocation
The following table summarizes the preliminary consideration transferred at the acquisition date and as reflected in the pro forma condensed combined balance sheet, and how each component was measured.
| Pro forma (June 30, 2026) | Acquisition date (August 31, 2026) | |||||||
| Cash payment at Closing, base purchase price (1) | $ | 500,000 | $ | 500,000 | ||||
| Net working capital adjustment against the $300,000 target (2) | 204,983 | (6,498 | ) | |||||
| Consideration payable to the Seller (3) | 446,449 | 385,976 | ||||||
| Fair value of 145,833 shares of common stock vested at Closing (4) | 608,124 | 608,124 | ||||||
| Less: effective settlement of ROC’s preexisting accounts payable to ZTC (5) | (203,992 | ) | (149,614 | ) | ||||
| Total consideration transferred | $ | 1,555,564 | $ | 1,337,988 | ||||
| (1) | Includes $126,518 paid by ROC on behalf of ZTC for Seller transaction expenses. No closing indebtedness was outstanding. |
| (2) | ZTC’s net working capital less the $300,000 Working Capital Target. The pro forma amount is calculated on ZTC’s net working capital at June 30, 2026 of $504,983. The acquisition-date amount is based on the Estimated Closing Statement. |
| (3) | ZTC’s cash distributable to the Seller, which had not been remitted at Closing and is presented as a liability. The pro forma amount is ZTC’s cash at June 30, 2026. The acquisition-date amount is Estimated Closing Cash of $402,618 less an estimated net working capital true-up of $16,642 in ROC’s favor, which reflects the difference between net working capital in the Estimated Closing Statement ($293,502) and ZTC’s net working capital at Closing ($276,860). |
| (4) | Measured at ROC’s quoted closing price of $4.17 per share on August 31, 2026. |
| (5) | Settled at carrying amount, with no gain or loss recognized. See adjustment (i) in Note 4. |
Pro forma consideration transferred exceeds acquisition-date consideration transferred by $217,576 because of differences between June 30, 2026 and the Closing in three balances: ZTC’s cash was $43,831 higher, ZTC’s net working capital was $228,123 higher, and the preexisting trade balance, which reduces consideration, was $54,378 higher ($203,992 at June 30, 2026 compared with $149,614 at the Closing). Each of these elements changes the purchase price dollar for dollar with the related assets acquired and liabilities assumed, so the difference has no effect on goodwill.
Restricted Stock Consideration. ROC issued 416,666 restricted shares of common stock to the Seller at Closing. Of that amount, 145,833 shares (stated value of $875,000) were not subject to forfeiture and vested at Closing. The remaining 270,833 shares (stated value of $1,625,000) are subject to forfeiture and are allocated 65% to the continued service of Mr. Zuccaro and 35% to the continued service of Ms. Sverchek. Of the forfeitable shares, 187,500 shares vest on August 31, 2027, the first anniversary of the vesting commencement date, and the remaining 83,333 shares vest in substantially equal quarterly installments over the following two years, in each case subject to continued service.
Only the shares that vested at Closing are included in consideration transferred. The forfeitable shares are forfeited and cancelled without consideration if the applicable Owner ceases to be employed by, or a consultant to, ROC or its subsidiaries for any reason other than death or disability. A share-based payment arrangement in which payment is automatically forfeited on termination of employment is compensation for post-combination services rather than consideration transferred in the business combination. Accordingly, the fair value of the forfeitable shares is recognized as compensation cost over the requisite service period; see adjustment (bb).
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The shares that vested at Closing were measured at ROC’s quoted closing price of $4.17 on August 31, 2026. No discount was applied for the contractual restrictions on sale of the shares, because a contractual restriction on the sale of an equity security is not a characteristic of the security itself and therefore is not considered in measuring fair value.
Revenue Share Payments. The Revenue Share Payments payable to the Owners under Section 2.10 of the Purchase Agreement are not contingent consideration and are not included in consideration transferred because each quarterly payment is forfeited if the applicable Owner is terminated for Cause or resigns without Good Reason and is not employed on the payment date. Accordingly, no contingent consideration liability has been recognized, and the payments will be recognized as compensation expense as the related services are rendered.
Preliminary purchase price allocation. The preliminary allocation of the total consideration transferred to the assets acquired and liabilities assumed, measured at estimated acquisition-date fair value except where another measurement basis is required by ASC 805, is as follows, both as reflected in the pro forma condensed combined balance sheet and as of the acquisition date:
| Pro forma (June 30, 2026) | Acquisition date (August 31, 2026) | |||||||
| Cash | $ | 446,449 | $ | 402,618 | ||||
| Accounts receivable, net | 395,983 | 281,904 | ||||||
| Prepaid expenses and other current assets | 3,357 | 3,357 | ||||||
| Intangible assets | 693,000 | 693,000 | ||||||
| Goodwill | 115,124 | 115,124 | ||||||
| Accounts payable and accrued expenses | (98,349 | ) | (158,015 | ) | ||||
| Total consideration transferred | $ | 1,555,564 | $ | 1,337,988 | ||||
Accounts receivable excludes ZTC’s receivable from ROC that is effectively settled in the Acquisition ($203,992 at June 30, 2026 and $149,614 at the acquisition date). ZTC’s marketable securities, which were liquidated and distributed to the Seller before Closing, were not acquired and are excluded from both columns (see adjustment (c) in Note 4 below).
The accounting for the Acquisition is incomplete. The consideration transferred remains subject to revision upon finalization of the Final Adjustment Statement under Sections 2.7 and 2.8 of the Purchase Agreement. The significant assets acquired and liabilities assumed that are subject to revision during the measurement period include the fair values assigned to identifiable intangible assets and their estimated useful lives, the resulting goodwill, accrued compensated absences and other assumed liabilities, and the acquisition-date income tax positions. To complete the accounting, ROC requires the final report of its third-party valuation specialist, the final Adjustment Statement and closing balance sheet, and the final acquisition-date income tax analysis.
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Note 4 — Transaction Accounting Adjustments to the Pro Forma Condensed Combined Balance Sheet
The preliminary allocation of consideration transferred presented in Note 3 is based on management’s estimates of the acquisition-date fair values of the assets acquired and liabilities assumed as of August 31, 2026. The pro forma condensed combined balance sheet has been prepared as if the Acquisition had occurred on June 30, 2026, using ZTC’s historical June 30, 2026 balance sheet as the starting point. Consideration transferred reflected in the pro forma condensed combined balance sheet is measured as described in Note 2, using ZTC’s June 30, 2026 net working capital, cash and preexisting trade balance, and totals $1,555,564 (Note 3). The letters below correspond to the note references in the pro forma condensed combined balance sheet.
(a) Cash consideration and closing disbursements. Reflects the aggregate cash disbursed by ROC in connection with the Acquisition, comprising the Closing Cash Payment under the Purchase Agreement and amounts paid by ROC on behalf of ZTC in respect of Estimated Closing Indebtedness and Estimated Closing Transaction Expenses under Sections 2.6(c) and 2.6(d), in each case presented as a reduction of cash and cash equivalents. Amounts constituting consideration transferred are reflected in the assets acquired and liabilities assumed and in goodwill (adjustments (d) through (f)). Amounts constituting ROC’s own acquisition-related transaction costs are expensed as incurred and are not a component of consideration transferred; see adjustment (h). The adjustment decreases cash and cash equivalents by $704,983 as of June 30, 2026, consisting of the $500,000 base purchase price (including $126,518 paid on behalf of ZTC for Seller transaction expenses) and the $204,983 net working capital adjustment calculated on ZTC’s June 30, 2026 balance sheet. ZTC’s cash distributable to the Seller was not remitted at Closing and is reflected as a liability in adjustment (e).
(b) Restricted stock consideration issued at Closing. Reflects the issuance of 416,666 restricted shares of ROC common stock to the Seller. Of those shares, 145,833 shares (stated value of $875,000) vested at Closing and are included in consideration transferred at their acquisition-date fair value of $608,124, based on ROC’s quoted closing price of $4.17 per share on August 31, 2026. The adjustment increases common stock by $4,167, representing the $0.01 par value of all 416,666 shares issued at Closing, and additional paid-in capital by $603,957, for a total of $608,124. The remaining 270,833 shares (stated value of $1,625,000) are subject to forfeiture based on the Owners’ continued service and are not included in consideration transferred. Because no post-combination service had been rendered as of the pro forma balance sheet date, no compensation cost for these shares is reflected in the pro forma condensed combined balance sheet; the related compensation cost is reflected in the pro forma condensed combined statements of operations in adjustment (bb). See Note 3 and Note 7.
(c) Assets not acquired. Reflects the removal of ZTC’s marketable securities held in brokerage accounts, which were liquidated and the proceeds distributed to the Seller prior to the Effective Time and therefore were not acquired by ROC. The corresponding reduction of ZTC’s historical members’ equity is reflected in adjustment (g). The related investment income and investment expenses are eliminated from the pro forma statements of operations in adjustment (aa). The adjustment decreases marketable securities by $1,653,596 as of June 30, 2026.
(d) Identifiable intangible assets. Reflects recognition at estimated acquisition-date fair value of the identifiable intangible assets acquired, consisting of developed technology and customer relationships. The basis for the related amortization is reflected in adjustment (cc). The adjustment increases intangible assets, net by $693,000 as of June 30, 2026.
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(e) Consideration payable based on estimated closing adjustments. Reflects a liability of $446,449 payable to the Seller for ZTC’s cash at June 30, 2026, which is distributable to the Seller under the Purchase Agreement. Consistent with the actual transaction, in which Estimated Closing Cash was not remitted at Closing, the amount is presented as a liability and is included in consideration transferred; see Note 3. At the acquisition date, this liability was $385,976, consisting of Estimated Closing Cash of $402,618 less an estimated net working capital true-up of $16,642 in ROC’s favor. In the pro forma condensed combined balance sheet, the net working capital adjustment is instead reflected in the cash paid at Closing (adjustment (a)). The adjustment increases acquisition consideration payable by $446,449 as of June 30, 2026.
(f) Goodwill. Reflects goodwill measured as the excess of the consideration transferred over the preliminary estimated fair value of the identifiable net assets acquired as of June 30, 2026. Because consideration transferred is measured as described in Note 2, pro forma goodwill equals the goodwill in the preliminary purchase price allocation in Note 3. The adjustment increases goodwill by $115,124 as of June 30, 2026.
(g) Elimination of ZTC historical members’ equity. Reflects the elimination of ZTC’s historical members’ equity in connection with the application of the acquisition method, including the effect of the pre-closing distribution of the liquidated brokerage account proceeds described in adjustment (c). The adjustment decreases total equity by $2,605,028 as of June 30, 2026.
(h) Acquisition-related transaction costs. Reflects the payment of acquisition-related transaction costs incurred by ROC after June 30, 2026. Acquisition-related costs are expensed in the periods in which the costs are incurred and are not a component of consideration transferred. Transaction costs already recognized in ROC’s historical statements of operations for the periods presented have been neither removed nor reclassified to another period, and transaction costs incurred by ZTC are not reflected because they are not part of ROC’s accounting for the Acquisition. These costs are nonrecurring; see adjustment (ee) and Note 6. The adjustment decreases cash and cash equivalents, and increases accumulated deficit by $140,930 as of June 30, 2026.
(i) Effective settlement of the preexisting trade balance arising from development services ZTC provided to the Company before the Acquisition. At June 30, 2026, ZTC’s accounts receivable from the Company, and the Company’s corresponding accounts payable to ZTC, were $203,992. The Acquisition effectively settles this balance, which is accounted for separately from the business combination. Because the balance is settled at its carrying amount, no gain or loss is recognized. The adjustment reduces accounts receivable and accounts payable and accrued expenses by $203,992 each. It also reduces consideration transferred by the same amount, so it has no net effect on goodwill. The balance at the August 31, 2026 acquisition date is $149,614. The related revenue and cost of revenue are eliminated in the pro forma condensed combined statements of operations (see (gg)).
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Note 5 — Transaction Accounting Adjustments to the Pro Forma Condensed Combined Statements of Operations
The letters below correspond to the note references in the pro forma condensed combined statements of operations. Except as described in Note 6, each adjustment is reflected in both periods presented.
(aa) Elimination of income and expenses on assets not acquired. Reflects the elimination of dividend and interest income, net realized gains, net unrealized gains and investment expenses associated with the ZTC brokerage accounts that were liquidated and distributed prior to Closing and therefore were not acquired (adjustment (c)). ZTC measured these investments at fair value with changes in fair value recognized in net income. The adjustment decreases other income, net by $100,965 for the year ended December 31, 2025 and $51,912 for the six months ended June 30, 2026.
(bb) Post-combination share-based compensation – Restricted Stock Consideration. Reflects compensation cost for the 270,833 shares of the Restricted Stock Consideration (stated value of $1,625,000) that remain subject to forfeiture based on the Owners’ continued service and are accounted for as post-combination compensation rather than as consideration transferred. The shares are measured at their grant-date fair value of $1,129,374, based on ROC’s quoted closing price of $4.17 per share on August 31, 2026. The forfeitable shares consist of 187,500 shares that vest on the first anniversary of the grant date and 83,333 shares that vest in quarterly installments over the following two years, in each case subject to continued service. Compensation cost is recognized separately for each vesting tranche over its requisite service period. For purposes of the pro forma condensed combined statements of operations, compensation cost has been computed as if the shares had been granted on January 1, 2025, using the grant-date fair value measured on August 31, 2026. The adjustment increases operating expenses by $959,081 for the year ended December 31, 2025 and $79,915 for the six months ended June 30, 2026.
(cc) Amortization of acquired identifiable intangible assets. Reflects amortization of the identifiable intangible assets recognized at estimated acquisition-date fair value (adjustment (d)), computed on a straight-line basis over the estimated useful lives set out below. Amortization for each period presented is calculated using the fair value of each asset measured at the acquisition date; those fair values have not been remeasured as if the Acquisition had occurred at the beginning of the earliest period presented.
| Estimated fair value | Estimated useful life (years) | Amortization for the year ended December 31, 2025 | Amortization for the six months ended June 30, 2026 | |||||||||||
| Developed technology | $ | 366,000 | 5 | $ | 73,200 | $ | 36,600 | |||||||
| Customer relationships | 327,000 | 10 | 32,700 | 16,350 | ||||||||||
| Total | $ | 693,000 | 105,900 | 52,950 | ||||||||||
| Less: ZTC historical amortization | — | — | ||||||||||||
| Transaction accounting adjustment | $ | 105,900 | $ | 52,950 | ||||||||||
The fair values above are preliminary. The fair value of developed technology was estimated using the cost approach, specifically the replacement cost method, under which fair value is measured as the estimated cost to recreate software of equivalent utility. The fair value of customer relationships was estimated using the multi-period excess earnings method, which measures value based on the present value of the future economic benefits attributable to the customer relationships.
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The useful life assigned to customer relationships reflects the expected pattern of attrition of ZTC’s prime contractor relationships, including the scheduled expiration of the subcontract representing approximately 74% of ZTC’s 2025 revenue with Customer A. The final purchase price allocation will be completed as additional information becomes available and may result in adjustments to the estimated fair values and useful lives of the identifiable intangible assets, the related amortization expense, and goodwill. The adjustment increases amortization expense by $105,900 for the year ended December 31, 2025 and $52,950 for the six months ended June 30, 2026.
(dd) Earnings (loss) per share and weighted average number of shares. A portion of the consideration transferred consisted of restricted shares of ROC common stock. Pro forma basic weighted average shares outstanding for each period presented have been adjusted to reflect the shares issued in connection with the Acquisition as if such shares had been outstanding since the beginning of the period presented. Only the 145,833 shares that vested at Closing are included in pro forma weighted average shares outstanding. The remaining 270,833 restricted shares are unvested share-based payment awards subject to the Owners’ continued service and are excluded from earnings per share until the requisite service period has been rendered.
Pro forma basic and diluted earnings (loss) per share are computed by dividing pro forma net income (loss) attributable to ROC by the applicable weighted average shares outstanding. Because pro forma net loss was reported for each period presented, diluted earnings (loss) per share is the same as basic earnings (loss) per share, and diluted weighted average shares outstanding equals basic weighted average shares outstanding, as the effect of potential common shares is anti-dilutive.
(ee) Acquisition-related transaction costs. Reflects the acquisition-related transaction costs described in adjustment (h). Because the Acquisition is assumed to have been consummated on January 1, 2025 for purposes of the pro forma statements of operations, the adjustment is reflected only in the year ended December 31, 2025 and no corresponding adjustment is reflected in the interim period presented. These costs will not recur in the income of ROC beyond 12 months after the Acquisition; see Note 6. The adjustment increases general and administrative expense by $140,930 for the year ended December 31, 2025.
(ff) Retention awards to continuing employees. Reflects compensation cost for the restricted stock units granted to continuing ZTC employees in connection with the Acquisition. These awards relate entirely to post-combination service and are recognized as compensation cost over the requisite service period; they are not part of consideration transferred. The adjustment increases operating expenses by $68,666 for the year ended December 31, 2025 and $34,333 for the six months ended June 30, 2026.
(gg) Elimination of intercompany sales from ZTC to ROC. Prior to the Acquisition, ZTC sold software development services to ROC in the ordinary course of business. Because these sales represent intercompany transactions of the combined company for purposes of the pro forma condensed combined statements of operations, the adjustment eliminates revenue recognized by ZTC on sales to ROC and the corresponding cost of sales recognized by ROC on its purchases of development services from ZTC for the year ended December 31, 2025 and the six months ended June 30, 2026. The adjustment decreases revenue by $12,500 for the year ended December 31, 2025 and $374,284 for the six months ended June 30, 2026, and decreases cost of sales by $12,500 for the year ended December 31, 2025 and $7,419 for the six months ended June 30, 2026. The revenue and cost of sales elimination amounts do not equal for the six months ended June 30, 2026 as ROC capitalized a portion of the amounts paid to ZTC as software development costs when the applicable capitalization criteria were met.
Note 6 — Nonrecurring Adjustments
The following Transaction Accounting Adjustments, and the related tax effects, are not expected to recur in the income of ROC beyond 12 months following the Acquisition: acquisition-related transaction costs of $140,930, for which no income tax effect has been reflected because ROC maintains a full valuation allowance against its deferred tax assets (adjustments (h) and (ee)). Because the Acquisition is assumed to have been consummated as of January 1, 2025 for purposes of the pro forma statements of operations, these amounts are reflected solely in the year ended December 31, 2025 and are not reflected in the six months ended June 30, 2026. Transaction costs recognized in the historical results of ROC for the periods presented remain in those periods and have not been removed or reclassified.
Note 7 — Management’s Adjustments
Management has elected not to present Management’s Adjustments. If presented, any such adjustments would be disclosed in these notes in the form of a reconciliation of pro forma net income (loss) from continuing operations attributable to the controlling interest, and the related per share amounts, to such amounts after giving effect to Management’s Adjustments, together with the basis for and material limitations of each adjustment.
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