ZPTAW Zapata Quantum, Inc.

Executive Summary

Zapata Quantum files an S-1 registration statement to register 56,816,391 shares of common stock for resale by selling stockholders. These shares are issuable upon conversion of Series C and Series D convertible preferred stock and exercise of warrants issued in private placements from June 2025 through April 2026. The company raised $15 million in gross proceeds from the Series D offering in April 2026, had $13.2 million cash as of June 1, 2026, and expects this to fund operations for at least 12 months. However, Zapata has no revenue since September 2024, a history of operating losses, a $9.4 million stockholders' deficit as of March 31, 2026, and the filing represents massive potential dilution with up to 56.8 million new shares registered on top of already outstanding 187.3 million shares.

Actionable Insight

Key Facts

• Registers up to 56,816,391 shares for resale by selling stockholders, representing ~30% of currently outstanding shares (187.3M).
• Company has generated no revenue since September 2024; net loss of $1.3M in Q1 2026.
• Stockholders' deficit of $9.4M as of March 31, 2026; cash balance was $642K before the April 2026 Series D raise.
• In April 2026, raised $15M gross ($13.8M net) from Series D convertible preferred and warrants; company claims ~$13.2M cash post-offering.
• Series D preferred ranks senior to common stock on liquidation, carries 8% annual dividend payable in common shares, and imposes restrictive covenants on incurring debt and paying common dividends.
• Material weaknesses in internal controls identified; sole officer (CEO/CFO) has limited public company management experience.
• Auditor's report includes going concern qualification.
• Outstanding convertible notes ($3M principal, 75M shares underlying at $0.04/sh) mature June 2027; Senior Secured Notes ($1M+ principal) mature December 2026.
• Over 85M warrants outstanding with weighted-average exercise price of $3.50; nearly all are out of the money at $0.90 stock price.
• Universal Resale and Registration Provisions lock up ~179.7M shares for 12 months after registration effective date, with gradual release: 10% in first 90 days, then 25% each subsequent 90 days.

Financial Impact

Up to 56.8M new shares registered for resale (30% dilution on 187.3M outstanding); $15M Series D raise with $13.8M net proceeds; Q1 2026 net loss $1.3M, cash burn $1.0M.

Risk Factors

• Massive dilution from registered resale shares and gradual lock-up releases over 12 months post-effectiveness.
• No revenue since September 2024; company may fail to re-establish revenue-generating operations.
• Going concern risk persists despite recent Series D raise; cash burn rate and need for additional capital.
• Material weaknesses in internal controls could cause reporting delays or misstatements.
• Stock is penny stock on OTC with limited liquidity; uplisting to national exchange faces challenges including $4.00 bid price requirement.
• Senior Secured Notes ($1.3M) mature December 2026; assets are pledged as collateral.

Market Snapshot

Documents Analyzed

This report is based on 7 SEC documents filed with EDGAR.

US Market Status

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