BTQ — Q2 2026 Financial Report Analysis

Overview

BTQ Technologies builds post-quantum cryptography (PQC). Most of today's encryption, including the signatures that secure Bitcoin and online banking, relies on maths problems that ordinary computers cannot solve in any practical time. A large enough quantum computer could solve some of them, so PQC replaces those problems with new ones believed to resist quantum attack. BTQ's three product lines are a PQC security chip (QCIM), a quantum-safe fork of Bitcoin ("Bitcoin Quantum") and a quantum-secure settlement layer for stablecoins (QSSN). None of them earned revenue in the second quarter of 2026.

In the three months to June 30, 2026, BTQ reported no revenue, against C$65,497 a year earlier. Its net loss was C$16.75 million, up from C$1.95 million, or C$0.12 a share against C$0.01. The loss was smaller than the first quarter's C$19.93 million. That improvement came from lower share-based compensation and a C$1.78 million paper gain on a Korean stock holding. Cash spending rose. Cash fell to C$9.73 million at June 30, from C$20.94 million at December 31. The statements carry a formal going-concern warning. All figures are in Canadian dollars, as BTQ reports them.

At a glance

• C$0 revenue (Q2 2025: C$65,497). The only revenue a year ago came from a one-year licence with ZKP Corp., a company controlled by BTQ's former COO, which ended in May 2025. BTQ has had no revenue for four straight quarters.
• About C$10.5 million of quarterly cash-type spending. Total expenses were C$18.31 million. Taking out share-based pay (C$7.76 million) and depreciation (C$0.06 million) leaves roughly C$10.49 million, up from about C$6.81 million in Q1 2026 and C$1.49 million in Q2 2025.
• C$9.73 million cash at quarter-end. Raising C$12.63 million in net proceeds after June 30 and paying C$3.31 million cash for QPerfect leaves about C$19 million before any spending after June 30. That is less than two quarters at Q2's spending pace.

Results

Revenue was nil in both 2026 quarters and tiny a year ago, and the loss grew nearly ninefold. YoY percentages on figures like these say little, so the table shows the change in dollars. Operating margin (the share of revenue left after running costs) is not meaningful with zero revenue.

Where the money went

Spending grew in four main areas. Management's discussion (MD&A) gives the reason for each:

• Research and development: C$2.94 million (Q2 2025: C$0.42 million). The MD&A attributes the rise to "the acceleration of research and development activities starting in the last quarter of 2025 including the hiring of additional US employees for the development of QCIM." C$592,058 of the six-month R&D bill went to QPerfect, the French quantum-software company BTQ partly owned during the quarter and has now bought outright.
• Professional fees: C$4.41 million (C$0.54 million). This was the second-largest cost line, ahead of R&D. The MD&A cites tighter reporting standards after the Nasdaq listing (Q3 2025) and "prospective corporate development activities." It also cites "legal fees related to the pursuit of legal actions against a former director and officer." The risk section describes a US federal lawsuit in which the court granted BTQ a preliminary injunction against that person.
• Business development, marketing and promotion: C$2.11 million (C$0.17 million). This went to new marketing and promotion initiatives aimed at raising awareness of the company's products.
• Share-based compensation: C$7.76 million (C$0.54 million). This is stock options, restricted share units (RSUs) and performance share units (PSUs) granted to new hires and consultants, plus amended contracts for key personnel. It made up 42% of the quarter's expenses. It does not use cash, but it is paid in new shares, which shrinks existing shareholders' slice of the company. Over the six months, C$3.36 million of share-based pay went to key management, against C$35,610 a year earlier.

General and administrative costs rose to C$0.68 million from C$0.19 million. The MD&A cites new office leases and much higher liability insurance since the Nasdaq listing.

Takeaway: BTQ is spending about C$10 million a quarter in cash-type costs and earns no revenue. More of that went to lawyers, accountants and marketing (C$6.5 million combined) than to R&D (C$2.9 million). The company's own use-of-proceeds table shows the same pattern: C$16.7 million has gone to general and administrative costs against C$3.0 million planned, and C$4.9 million to the QCIM chip against C$20 million planned. Management says this "impacts our ability to achieve our business objectives" for QCIM and that it "will need to obtain additional financing."

What the headline numbers hide

• The quarter's net loss looks better than the spending was. Q2's loss of C$16.75 million beat Q1's C$19.93 million. That is because share-based pay fell (C$7.76 million vs C$11.60 million in Q1) and BTQ booked a C$1.78 million unrealized gain on its 452,058 shares of ICTK Co., a Korean listed company. That holding was marked up to C$7.51 million from C$5.73 million at March 31. The gain is on paper only: the shares are under a two-year lock-up, so BTQ cannot sell them to fund operations. Without it, the pre-tax loss would have been about C$18.52 million.
• Cash burn was cushioned by unpaid bills. Cash used in operations was C$13.91 million for the six months. Accounts payable and accrued liabilities rose by C$3.33 million, from C$2.15 million to C$5.48 million. Without that build-up, operating cash outflow would have been about C$17.2 million. Those bills still have to be paid. Working capital (current assets minus bills due within a year) fell to C$5.30 million from C$20.24 million in December.
• Dilution is ongoing. Weighted shares outstanding were 141.4 million, up 6.8% from 132.5 million a year earlier. After quarter-end BTQ issued about 4.7 million more shares: 2.27 million sold under its shelf prospectus for C$12.63 million net, 2.20 million as part of the QPerfect purchase, and the rest from options and RSUs. Equity awards still to vest sit in large reserves: C$9.86 million of RSUs, C$3.88 million of PSUs and C$5.74 million of options. In the first-half share sale, issuance costs were C$0.87 million on C$4.47 million raised, about 20%.
• Going-concern warning. Note 1 states there is "a material uncertainty that may cast significant doubt on the ability of the Company to continue as a going concern." That is the formal flag that survival depends on raising money. The accumulated deficit is C$101.9 million.
• Commitments exceed cash. BTQ lists C$8.95 million of R&D obligations due within a year and C$13.21 million in total, plus C$1.45 million of leases. That is about C$9.25 million due within 12 months, nearly equal to June 30 cash.
• Last year's revenue was a related-party deal. The C$315,497 of six-month revenue in 2025 came from the ZKP licence with a company controlled by the former COO. It was not an arm's-length customer, so the drop to zero does not mean a commercial customer was lost.

Outlook

BTQ gives no financial guidance. Its stated product timetable is:

• QCIM chip: initial hardware for design partners to test on circuit boards "during 2026," with certification and broader commercialization after that. Validation in silicon is planned with Taiwan's ITRI.
• Bitcoin Quantum: a public testnet launched January 12, 2026, with mainnet and migration tools expected in the second half of 2026.
• QSSN: after the quarter, BTQ announced (September 30) a three-year agreement with the Kaia DLT Foundation. It is QSSN's first recurring deployment and includes LINE NEXT's Unifi Wallet. BTQ receives a share of transaction fees and says it expects "six-figure first-year revenue in USD." On October 9 it was named security partner for MoonPay Korea's won-stablecoin infrastructure, with no financial terms disclosed.

Our read: The Kaia deal would be BTQ's first real recurring revenue. But six figures in US dollars a year is small next to roughly C$10 million of quarterly cash-type spending. Funding will depend on share sales for the foreseeable future. Two things to check in the Q3 2026 filing (likely mid-November, based on the Q2 filing landing on August 14):

1. Whether cash spending stabilizes or keeps rising now that QPerfect's costs are fully consolidated.
2. Whether professional and marketing fees start to fall relative to R&D.

Expect further dilution: the July raise covers roughly two quarters at the current pace.