IonQ, Inc.: Form 10-Q for the period ended Mar 31, 2026

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believes,” “expects,” “intends,” “estimates,” “projects,” “anticipates,” “will,” “plan,” “may,” “should,” “could,” or similar language are intended to identify forward-looking statements.

It is routine for our internal projections and expectations to change throughout the year, and any forward-looking statements based upon these projections or expectations may change prior to the end of the next quarter or year. Readers of this Quarterly Report on Form 10-Q are cautioned not to place undue reliance on any such forward-looking statements. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Risks and uncertainties are identified under “Risk Factors” in Part II, Item 1A herein and in our other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements included herein are made only as of the date hereof. Unless otherwise required by law, we do not undertake, and specifically disclaim, any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise after the date of such statement.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, and our audited consolidated financial statements and related notes for the year ended December 31, 2025, filed with the SEC on February 25, 2026.

Overview

We are developing quantum computers designed to solve some of the world’s most complex problems and transform business, society and the planet for the better. We believe that our proprietary technology, our architecture and the technology exclusively available to us through license agreements will offer us advantages both in research and development and in the commercial value of our product offerings.

Today, we sell specialized quantum computing hardware, together with complementary products and services, such as quantum networking, quantum sensing and quantum security products and associated maintenance and support. We also sell access to several quantum computers of various qubit capacities and are in the process of researching and developing technologies for quantum computers with increasing computational capabilities. We currently make access to our quantum computers available through three major cloud platforms, Amazon Web Services’, or AWS’s, Braket, Microsoft’s Azure Quantum and Google’s Cloud Marketplace, and also to select customers via our own cloud service. This cloud-based approach enables the broad availability of quantum-computing-as-a-service, or QCaaS.

We supplement our offerings with professional services focused on assisting our customers in applying quantum computing and our quantum networking, quantum sensing and quantum security solutions to their businesses. We also sell full quantum computing systems to customers, either over the cloud or on premises. Additionally, through a network of satellites, we offer data-as-a-service products to customers, including synthetic-aperture radar imaging, and through combining our satellite platform with our quantum sensing products, we intend to offer advanced quantum positioning, navigation and timing services in the future.

We are still in the early stages of commercial growth. Since our inception we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend heavily on the successful development and further commercialization of our quantum computing systems and networks. Our losses from operations were $271.5 million and $75.7 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $388.7 million. We expect to continue to incur significant losses for the foreseeable future as we prioritize reaching the technical milestones necessary to achieve an increasingly higher number of stable qubits and higher levels of fidelity than presently exists—prerequisites for quantum computing to reach broad quantum advantage.

From time to time, we have acquired or invested in complementary businesses, and intend to continue to consider making such acquisitions and investments. For more information on recent acquisitions and investments and their impact on our business, refer to

Note 3, Business Combinations and Note 5, Fair Value Measurements in the notes to our condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q.

On January 25, 2026, we entered into an Agreement and Plan of Merger with SkyWater Technology, Inc., Iris Merger Subsidiary 1 Inc. and Iris Merger Subsidiary 2 LLC, pursuant to which, following completion of the proposed mergers, SkyWater will become a wholly owned subsidiary of IonQ. We believe the proposed acquisition will advance our quantum computing technology roadmap by providing access to SkyWater’s U.S.-based semiconductor foundry capabilities, advanced packaging expertise and Technology as a Service platform. Completion of the proposed transaction remains subject to customary closing conditions, including approval by SkyWater stockholders, expiration or termination of the waiting period under the HSR Act, applicable regulatory approvals and the satisfaction or waiver of the other conditions set forth in the merger agreement. The Mergers are expected to be completed in the second or third quarter of 2026, subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction (or waiver) of other customary closing conditions.

Impact of the Macroeconomic Climate on Our Business

Inflationary factors, interest rates and overhead costs may adversely affect our operating results. High interest and inflation rates also present a challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. These inflationary effects may be exacerbated by new tariffs and evolving trade policy. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the future on our operating costs, including due to supply chain constraints, consequences associated with bank failures, trade wars and the effect of recently heightened, scheduled, and threatened tariffs by the U.S. or its trading partners, geopolitical tensions in and around Ukraine, Israel and other areas of the world, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Key Components of Results of Operations

Revenue

We derive revenue from the design, development, construction and sale of quantum ecosystem hardware together with related maintenance and support, from providing access to our quantum-computing-as-a-service (“QCaaS” services), from consulting services related to co-developing algorithms and other services related to our quantum products, and from providing satellite imagery and data from our constellation of satellites through our online platform. We apply the provisions of the FASB Accounting Standards Update (“ASU”), Revenue from Contracts with Customers (“ASC 606”), and all related applicable guidance. The core principle of ASC 606 is that an entity shall recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

To support this core principle, we apply the following five step approach:

1. Identify the contract with the customer

2. Identify the performance obligations

3. Determine the transaction price

4. Allocate the transaction price to the performance obligations

5. Recognize revenue when (or as) the entity satisfies a performance obligation

Certain of our contracts contain multiple promised goods and services, most commonly in contracts for the sale of quantum computers, together with related on-site maintenance and support, technical training, consulting services, and QCaaS. We evaluate the promised goods and services in each contract to determine whether they are distinct performance obligations based on whether the customer can benefit from the good or service on its own or together with other readily available resources and whether the promise is separately identifiable from other promises in the contract. Consistent with the guidance in ASC 606, in identifying performance obligations, we consider the nature of the promised goods and services, the degree of integration between promises, whether any good or service significantly modifies or customizes another promised good or service, or whether the goods and services are highly interdependent or interrelated. In these arrangements, revenue related to the sale of quantum computers is recognized over time, based on when control transfers to the customer. Consistent with ASC 606, revenue related to the other performance obligations, such as maintenance, is recognized over time on a straight line basis over the contractual service periods, consistent with the stand ready nature of these obligations. Fees are generally billed over the course of the arrangement based on an agreed upon billing schedule, and may have terms that are considered variable consideration, as well as financing components.

The transaction price represents the amount of consideration we expect to be entitled to in exchange for transferring the promised goods or services to the customer, including estimates of variable consideration. We estimate variable consideration using either the expected value or most likely amount method, depending on the nature of the arrangement, and includes such amounts in the transaction price only to the extent it is probable that a significant revenue reversal will not occur. We apply judgment and take into account historical experience, contractual terms, and expected customer behavior to best predict the amount of consideration to which it expects to be entitled under these contracts.

When there are multiple performance obligations in a contract, we allocate the transaction price to each performance obligation based on relative standalone selling prices. We determine standalone selling price based on the observable price of a product or service when we sell the products or services separately in similar circumstances and to similar customers. Certain products and services have limited or no history of being sold on a standalone basis, requiring us to estimate the standalone selling price. We estimate the standalone selling price based on other contracts for similar products and services adjusted for differing terms than the contract being evaluated, as well as internal pricing guidelines and market factors. In addition, we take into consideration the estimated costs to be incurred to satisfy the performance obligation plus an appropriate profit margin.

Performance obligations are satisfied over time if the customer receives the benefits as we perform the work, if the customer controls the asset as it is being produced (continuous transfer of control), or if the product being produced for the customer has no alternative use and we have a contractual right to payment for performance to date. For performance obligations related to specialized quantum hardware and consulting services as well as customer solutions for specialized satellite development capabilities, revenue is recognized over time based on the efforts incurred to date relative to the total expected effort, primarily based on a cost-to-cost input measure. We apply judgment to determine a reasonable method to measure progress and to estimate total expected effort. Factors considered in these estimates include our historical performance, the availability, productivity and cost of labor, the nature and complexity of work to be performed, the effect of change orders, availability and cost of materials, and the effect of any delays in performance. We believe that the cost-to-cost input method faithfully depicts our performance in transferring control of the related goods and services because costs incurred are directly correlated with our efforts to satisfy the performance obligation. For performance obligations related to certain quantum networking and sensing products and related services, revenue is recognized at the point in time when control passes to the customer, which is generally at the shipping point based on customary incoterms, or upon completion of the required services.

We have determined that our QCaaS contracts represent a combined, stand-ready performance obligation to provide access to our quantum computing systems. Additionally, we have determined that our contracts to provide satellite imagery and data also represent a stand-ready performance obligation. The transaction price generally consists of a fixed fee for a minimum volume of usage to be made available over a defined period of access. Fixed fee arrangements may also include a variable component whereby customers pay an amount for usage over contractual minimums contained in the contracts. For performance obligations related to providing QCaaS access, fixed fees are recognized on a straight-line basis over the access period. Variable usage fees are recognized in the period they occur.

We may enter into multiple contracts with a single counterparty at or near the same time. We will combine contracts and account for them as a single contract when one or more of the following criteria are met: (i) the contracts are negotiated as a package with a single commercial objective; (ii) consideration to be paid in one contract depends on the price or performance of the other contract; and (iii) goods or services promised are a single performance obligation.

Consideration payable to a customer includes cash amounts that an entity pays, or expects to pay, to the customer, or equity instruments granted to a customer in connection with selling goods or services. For arrangements that contain consideration payable to a customer, we use judgment in determining whether such payments are a reduction of the transaction price or a payment to the customer for a distinct good or service. Where we conclude that such payments are in exchange for a distinct good or service, we account for the transaction as a purchase of that good or service, provided the amount does not exceed the fair value of the distinct good or service received.

Certain of our arrangements include provisions that allow customers to sell QCaaS access to us for fixed amounts paid over time. We have determined that the QCaaS purchased from customers is distinct from the goods or services that we have promised to our customers because the customer can benefit from the computer without selling QCaaS to us and we can satisfy our obligation to sell the computer independent from our contingent obligation to purchase QCaaS. To the extent a customer sells QCaaS to us, we recognize the cost of purchases ratably as expense over the term of the access.

The majority of revenue was recognized based on transfer of service over time. In arrangements with cloud service providers, the cloud service provider is considered the customer and we do not have any contractual relationships with the cloud service providers’ end users. For these arrangements, revenue is recognized at the amount charged to the cloud service provider and does not reflect any mark-up to the end user.

The fees associated with the QCaaS and satellite imagery and data contracts are generally billed a month in arrears. Customers also have the ability to make advance payments. Advance payments are recorded as a contract liability until services are delivered or obligations are met and revenue is earned. Contract liabilities to be recognized in the succeeding 12-month period are classified as current and the remaining amounts are classified as non-current liabilities in our condensed consolidated balance sheets.

Operating Costs and Expenses

Cost of revenue

Cost of revenue primarily consists of expenses related to the delivery of our quantum hardware products and delivery of our services, including personnel-related expenses, hardware costs, allocated overhead costs for customer facing functions, and costs associated with maintaining the Company’s in-service quantum computing systems and satellites to ensure proper calibration as well as costs incurred for maintaining the cloud on which the Company delivers its services. Personnel-related expenses include salaries, benefits, and stock-based compensation. Cost of revenue excludes depreciation and amortization.

Research and development

Research and development expenses consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated overhead costs for our research and development functions. Research and development is attributable to the advancing technology research, platform and infrastructure development, and the research and development of new product iterations, including quantum products and satellites. Design and development efforts continue throughout the useful life of our quantum computing systems and satellites to ensure proper calibration and optimal functionality. Research and development expenses also include purchased hardware and software costs for research purposes that are not probable of providing a future economic benefit and have no alternate future use as well as costs associated with third-party research and development arrangements.

Sales and marketing

Sales and marketing expenses consist of personnel-related expenses, including salaries, commissions, benefits and stock-based compensation, costs for direct advertising, marketing and promotional expenditures and allocated overhead costs for our sales and marketing functions. We expect to continue to make the necessary sales and marketing investments to enable us to increase our market penetration and expand our customer base.

General and administrative

General and administrative expenses consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated overhead costs for our corporate, executive, finance, and other administrative functions. General and administrative expenses also include expenses for outside professional services, including legal, auditing and accounting services, recruitment expenses, information technology, travel expenses, certain non-income taxes, insurance, changes in fair value of contingent consideration, and other administrative expenses. We expect our general and administrative expenses to increase for the foreseeable future as we scale our support functions with the growth of our business.

Depreciation and amortization

Depreciation and amortization expense results from depreciation and amortization of our property and equipment, including our quantum computing systems and satellites, and intangible assets that are recognized over their estimated lives.

Nonoperating Costs and Expenses

Gain (loss) on change in fair value of warrant liabilities

The gain (loss) on change in fair value of warrant liabilities consists of mark-to-market fair value adjustments recorded associated with the public warrants and Series A and Series B prefunded and private warrants.

Interest income, net

Interest income, net primarily consists of income earned on our money market funds and other available-for-sale investments.

Other income (expense), net

Other income (expense), net consists of gains and losses that arise from changes in fair value of investments, fluctuations in foreign currency exchange rates, and certain other nonoperating expenses.

Income tax benefit (expense)

Income tax benefit (expense) consists of income tax benefits related to deferred taxes and income tax benefit (expense) related to foreign jurisdictions in which we conduct business, as well as impacts on our valuation allowances as a result of acquisitions.

Results of Operations

The following table sets forth our condensed consolidated statements of operations for the periods indicated:

(in thousands)

(1) Cost of revenue, research and development, sales and marketing, and general and administrative expenses for the periods include stock-based compensation expense as follows:

(in thousands)

Comparison of the Three Months Ended March 31, 2026 and 2025

Revenue

(in thousands)

37

Revenue increased by $57.1 million, or 755%, to $64.7 million for the three months ended March 31, 2026, from $7.6 million for the three months ended March 31, 2025. The increase was primarily driven by progress on our arrangements to build specialized quantum computing hardware, as well as increased revenue as a result of acquisitions.

Cost of revenue

(in thousands)

Cost of revenue increased by $44.9 million, or 1,041%, to $49.3 million for the three months ended March 31, 2026, from $4.3 million for the three months ended March 31, 2025. The increase was driven primarily by an increase in labor costs to service contracts for the three months ended March 31, 2026, as well as an increase in materials costs related to quantum products.

Research and development

(in thousands)

Research and development expense increased by $85.8 million, or 215%, to $125.7 million for the three months ended March 31, 2026, from $40.0 million for the three months ended March 31, 2025. The increase was primarily driven by an increase of $53.1 million in payroll-related expenses, including an increase in stock-based compensation of $35.3 million, as a result of increased headcount and new equity grants, and $24.8 million increase in materials, supplies and equipment costs.

Sales and marketing

(in thousands)

Sales and marketing expense increased by $20.8 million, or 242%, to $29.4 million for the three months ended March 31, 2026, from $8.6 million for the three months ended March 31, 2025. The increase was primarily driven by an increase of $16.3 million of payroll-related expenses, including an increase in stock-based compensation of $10.3 million, as a result of increased headcount and new equity grants, as well as increased costs to promote our products and services and other marketing initiatives.

General and administrative

(in thousands)

General and administrative expenses increased by $64.8 million, or 272%, to $88.6 million for the three months ended March 31, 2026, from $23.8 million for the three months ended March 31, 2025. The increase was primarily driven by an increase of $45.2 million of payroll-related expenses, including an increase in stock-based compensation of $33.9 million, as a result of increased headcount and new equity grants, an increase of $18.9 million in professional service fees and allocated overhead costs, including an increase of $11.9 million in acquisition transaction and integration costs.

Depreciation and amortization

(in thousands)

Depreciation and amortization expenses increased by $36.6 million, or 557%, to $43.1 million for the three months ended March 31, 2026, from $6.6 million for the three months ended March 31, 2025. The increase was primarily driven by an increase of $29.4 million in amortization expense associated with acquired intangible assets, and an increase of $5.9 million in depreciation expense associated with capitalized satellites and leasehold improvements.

Gain (loss) on change in fair value of warrant liabilities

(in thousands)

NM—Not Meaningful

The change in the fair value of the warrant liabilities was primarily due to the mark-to-market gain recognized on the Series A and Series B warrants, driven by changes in our stock price.

Interest income, net

(in thousands)

Interest income, net increased by $23.3 million, or 477%, to $28.2 million for the three months ended March 31, 2026, from $4.9 million for the three months ended March 31, 2025. The increase was primarily driven by an increase in the available-for-sale investments balance.

Other income (expense), net

(in thousands)

NM—Not Meaningful

Other income (expense), net increased by $16.2 million to $16.1 million for the three months ended March 31, 2026, from less than $0.1 million for the three months ended March 31, 2025. The increase was primarily driven by changes in fair value of strategic investments.

Income tax benefit (expense)

(in thousands)

39

NM—Not Meaningful

Income tax benefit (expense) increased by $6.4 million to a benefit of $6.4 million for the three months ended March 31, 2026, from an expense of less than $0.1 million for the three months ended March 31, 2025. The increase was primarily driven by a tax benefit recognized on foreign operating losses.

Liquidity and Capital Resources

As of March 31, 2026, we had cash, cash equivalents and available-for-sale securities of $3,091.9 million. Excluded from our available liquidity is $7.8 million of restricted cash, which is primarily recorded in other noncurrent assets in our condensed consolidated balance sheets. We believe that our cash, cash equivalents and investments as of March 31, 2026, will be sufficient to meet our working capital and capital expenditure needs for the next 12 months. We believe we will meet longer term expected future cash requirements and obligations through a combination of available funds from our cash, cash equivalents and investment balances and cash flows from operating activities. However, this determination is based upon internal projections and is subject to changes in market and business conditions. We have incurred significant losses since our inception and as of March 31, 2026, we had an accumulated deficit of $388.7 million. During the three months ended March 31, 2026, we incurred a loss from operations of 271.5. We expect to incur significant losses and higher operating expenses for the foreseeable future.

On January 25, 2026, we entered into a definitive agreement to acquire SkyWater Technology, Inc. (“SkyWater”) for total consideration of approximately $1.8 billion in a cash-and-stock transaction (the “SkyWater Acquisition”). The SkyWater Acquisition is expected to require approximately $1.0 billion in cash, including approximately $0.8 billion related to purchase consideration and approximately $0.2 billion related to debt repayment and other transaction costs. The transaction is expected to close within the second or third quarter of 2026, subject to customary closing conditions, including approval by SkyWater’s shareholders and regulatory approval.

Future Funding Requirements

We expect our principal sources of liquidity will continue to be our cash, cash equivalents and short-term and long-term investments and any additional capital we may obtain through additional equity or debt financings. Our future capital requirements will depend on many factors, including investments in growth and technology. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, and technologies, which may require us to seek additional equity or debt financing.

Our primary uses of cash, cash equivalents, and short-term and long-term investments are to fund our operations as we continue to grow our business and our investing activities, including capital expenditures, potential acquisitions, and strategic investments. We require a significant amount of cash for expenditures as we invest in ongoing research and development and commercialization of our products. Until such time as we can generate significant revenue from commercializing our products and services, if ever, we expect to finance our liquidity needs through our cash, cash equivalents, and short-term and long-term investments, as well as equity or debt financings or other capital sources, including potential collaborations and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our quantum computing and networking technology on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our quantum computing and networking development efforts. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “Risk Factors” in this Quarterly Report on Form 10-Q and other our other filings with the Securities and Exchange Commission.

Our material contractual commitments as of March 31, 2026, primarily relate to operating lease commitments and certain supplier purchase commitments. As of March 31, 2026, we have total operating lease obligations of $35.8 million, with $10.0 million payable within 12 months, and a remaining short-term supplier purchase commitment related to quantum chip development of approximately $40.9 million. Other than these commitments, cash requirements for the next 12 months are expected to consist primarily of operating expenses and continued investment in our quantum products, as well as the acquisition of SkyWater. The SkyWater Acquisition is expected to require approximately $1.0 billion in cash, including approximately $0.8 billion related to purchase consideration and approximately $0.2 billion related to debt repayment and other transaction costs.

Cash flows

The following table summarizes our cash flows for the periods indicated:

(in thousands)

Cash flows from operating activities

Our cash flows from operating activities are significantly affected by the growth of our business, primarily related to research and development, sales and marketing, and general and administrative activities. Our operating cash flows are also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in accounts payable and other current assets and liabilities.

Net cash used in operating activities during the three months ended March 31, 2026, was $151.0 million, resulting primarily from net income of $804.6 million, adjusted for non-cash activity, primarily related to the gain recorded as a result of mark-to-market activity for our warrants, stock-based compensation, depreciation and amortization, deferred income taxes, and other working capital activities. The increase in net cash used in operations from the prior year period was primarily related to increased compensation costs and costs for materials and supplies to support the production of quantum computing systems and satellites, customer contracts, and other research and development activities.

Net cash used in operating activities during the three months ended March 31, 2025, was $33.0 million, resulting primarily from a net loss of $32.3 million, adjusted for non-cash activity, primarily related to stock-based compensation, the gain recorded as a result of mark-to-market activity for our public warrants, depreciation and amortization, and other working capital activities.

Cash flows from investing activities

Net cash used in investing activities during the three months ended March 31, 2026, was $391.9 million, primarily resulting from purchases of available-for-sale securities and strategic investments, cash paid for acquired businesses, net of cash acquired, and additions of property and equipment, offset by cash received from maturities of available-for-sale securities.

Net cash used in investing activities during the three months ended March 31, 2025, was $230.2 million, primarily resulting from purchases of available-for-sale securities and additions of property and equipment primarily related to the development of our quantum computing systems and other supporting equipment, offset by cash received from maturities of available-for-sale securities.

Cash flows from financing activities

Net cash provided by financing activities during the three months ended March 31, 2026, was $6.9 million, primarily resulting from proceeds from stock options exercised and warrants exercised.

Net cash provided by financing activities during the three months ended March 31, 2025, was $368.7 million, primarily resulting from proceeds from the 2025 ATM Offering Program and warrants exercised.

Critical Accounting Estimates

This discussion and analysis of financial condition and results of operations is based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions on revenue generated and reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. Within our Annual Report on Form 10-K, we have disclosed our critical accounting estimates that we believe to have the greatest potential impact on our consolidated financial statements. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results.

There have been no material changes to our critical accounting estimates from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K.

Recently Issued and Adopted Accounting Standards

See Note 2, Summary of Significant Accounting Policies, in the notes to our condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.

We are exposed to market risk related to changes in interest rates and concentration of credit. For a discussion of quantitative and qualitative disclosures about market risk, see Item 7A of Part II of our Annual Report on Form 10-K. No material changes related to our market risks have occurred since December 31, 2025.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to the risk factors previously disclosed in Item 1A “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider those risk factors, which could materially and adversely affect our business, financial condition and results of operations. Those risks and uncertainties are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, financial condition and results of operations.