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Zapata Computing Holdings (ZPTA) Risk Analysis
Risk Overview Q2, 2026
Risk Change Over Time
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 57
- Share Price & Shareholder Rights - Risk 1We are an "emerging growth company," and a "smaller reporting company," and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an "emerging growth company," as defined in the JOBS Act, and for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of over $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Common Stock held by non-affiliates exceeds $700 million as of the last business day of the second fiscal quarter of such year and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We cannot predict if investors will find our Common Stock less attractive if we choose to rely on these exemptions. If some investors find our Common Stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our Common Stock, and our stock price may be more volatile. Further, we are a "smaller reporting company" as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and any non-voting Common Stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our voting and any non-voting Common Stock held by non-affiliates was less than $700 million measured on the last business day of our second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
- Share Price & Shareholder Rights - Risk 2Delaware law and provisions in our Certificate of Incorporation and Bylaws might discourage, delay or prevent a change in control of the Company or changes in our management and, therefore, depress the trading price of our Common Stock.
Our status as a Delaware corporation and the anti-takeover provisions of the DGCL may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder without the approval of holders of two-thirds of the voting power of our stockholders other than the interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our Certificate of Incorporation and Bylaws contain provisions that may make the acquisition of the Company more difficult, including the following: - our Board is classified into three classes of directors with staggered three-year terms, and directors can only be removed from office for cause (which is not defined) by the affirmative vote of holders of at least a majority of the voting power of our then-outstanding capital stock;- certain amendments to our Certificate of Incorporation will require the approval of stockholders holding two-thirds of the voting power of its then-outstanding capital stock;- our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter;- vacancies on our Board will be able to be filled only by our Board and not by stockholders;- certain litigation against us can only be brought in Delaware;- our Certificate of Incorporation authorizes undesignated preferred stock, the terms of which may be established by our Board, which shares may be issued without the approval of the holders of our capital stock; and - advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders. These anti-takeover defenses could discourage, delay, or prevent a transaction involving a change in control of the Company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing or to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of Common Stock.
- Share Price & Shareholder Rights - Risk 3Our Certificate of Incorporation designates a state or federal court located within the State of Delaware as the exclusive forum for certain disputes between our stockholders and us, and also provides that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders' ability to choose the judicial forum for disputes with us or our directors, officers, stockholders, or employees.
Our Certificate of Incorporation provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any internal or intra-corporate claim or any action asserting a claim governed by the internal affairs doctrine, including, but not limited to, (i) any derivative action brought by a stockholder on our behalf, (ii) any claim of breach of a fiduciary duty owed by any of our directors, officers, stockholders, or employees and (iii) any claim against us arising under our Certificate of Incorporation, Bylaws or the DGCL. The Certificate of Incorporation designates the United States District Court for the District of Delaware as the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. This exclusive forum provision will not apply to claims under the Exchange Act, but will apply to other state and federal law claims including actions arising under the Securities Act. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. This choice of forum provision may have the effect of increasing costs for investors to bring a claim against us and our directors and officers and of limiting a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage (but not prevent) lawsuits with respect to such claims.
- Share Price & Shareholder Rights - Risk 4Our Board may authorize and issue shares of new series of preferred stock that could be superior to or adversely affect current holders of our Common Stock.
Our Board has the power to authorize and issue shares of classes of stock, including preferred stock that have voting powers, designations, preferences, limitations and special rights, including preferred distribution rights, conversion rights, redemption rights and liquidation rights without further stockholder approval which could adversely affect the rights of the holders of our Common Stock. In addition, our Board could authorize the issuance of a series of preferred stock that is convertible into our Common Stock, which could result in dilution to our existing Common Stockholders. Any of these actions could significantly adversely affect the investment made by holders of our Common Stock. Holders of Common Stock could potentially not receive dividends that they might otherwise have received. In addition, holders of our Common Stock could receive less proceeds in connection with any future sale of the Company, in liquidation or on any other basis.
- Share Price & Shareholder Rights - Risk 5If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Common Stock, the market price and trading volume of our Common Stock could decline.
The trading market for our Common Stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our business. We have limited research coverage by industry or financial analysts. If no, or few, additional analysts commence coverage of us, the trading price of our Common Stock would likely decrease. If one or more of the analysts covering our business downgrade their evaluations of our Common Stock, the price of our Common Stock could decline. If one or more of these analysts cease to cover our Common Stock, we could lose visibility in the market for our Common Stock, which in turn could cause our stock price to decline.
- Share Price & Shareholder Rights - Risk 6We may be unable to successfully uplist to a national securities exchange within a reasonable period of time or at all, in which event investors' ability to sell shares of our Common Stock will be materially hindered.
Our Common Stock was previously listed on The Nasdaq Global Market until it was delisted in March 2025 following our operational cessation in October 2024. Following a period of inactivity, we recently became current in our SEC filings by filing Quarterly Reports on Form 10-Qs and an Annual Report on Form 10-K for the fiscal periods from December 31, 2024 through September 30, 2025, and thereafter our Common Stock became quoted on the OTCID Basic Market. Subject to compliance with applicable initial listing standards, which as described below is subject to uncertainty, the Company intends to seek uplisting of its Common Stock on a national securities exchange such as an exchange operated by The Nasdaq Stock Market, LLC (as applicable, an "Exchange"). Before then, the Company may seek to become quoted on the OTCQB or OTCQX, which are higher tiered quotation systems operated by the OTC Markets Group, Inc. Based on the initial listing standards and related rules and policies of the Exchanges and circumstances surrounding the Company and its Common Stock, the Company anticipates facing significant challenges in its ability to achieve uplisting to an Exchange in the near term. The initial listing standards each Exchange generally require certain minimum criteria be met with respect to the bid price, market capitalization and financial performance of the Company and its Common Stock. Further, given our operational cessation in 2024 we may be unable to qualify in the near term for potential standards for listing which require two years of operating history, which could significantly delay our ability to become listed on an Exchange. Further, one potential standard for listing requires us to maintain a closing bid price of at least $4.00 for at least 90 trading days, among other required criteria. In addition to the fact that given our current stock price this would require us to effect a reverse stock split in an effort to achieve that minimum price, there is substantial uncertainty as to our ability to maintain that minimum closing bid price for a prolonged period of time, particularly given our quotation on the OTCID Basic Market and the volatility of our stock price. We may be unable to successfully navigate or address these challenged, which could significantly delay or prevent us from uplisting to an Exchange. If the Company is unable to uplist to an Exchange, it would negatively impact both investors' ability to sell their shares and the market for such shares, and the Company's ability to raise capital.
- Share Price & Shareholder Rights - Risk 7Our Common Stock is a "penny stock" and thereby be subject to additional sale and trading regulations that may depress the price of our Common Stock.
Our Common Stock is a "penny stock" if it does not qualify for one of the exemptions from the definition of "penny stock" under Section 3a51-1 of the Exchange Act. The principal result or effect of being designated a penny stock is that securities broker-dealers participating in sales of our Common Stock are discouraged from soliciting purchases of our Common Stock by the SEC's rules which generally results in low prices and limited trading volume. For example, SEC Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our Common Stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise. In addition, clearing firms, which hold retail accounts dislike penny stocks and through extra compliance efforts and costs they impose, make it hard to sell penny stocks.
- Share Price & Shareholder Rights - Risk 8There is currently a limited trading market for the Company's Common Stock.
Our Common Stock is currently quoted on the OTCID Basic Market under the symbol "ZPTA." Because of our quotation on the OTCID Basic Market, there has been and we expect that there will continue to be a limited trading market in our Common Stock with sporadic and volatile changes in the volume and prices of trades, rendering trading in our Common Stock at any given time speculative and risky. We cannot assure you that a consistent, active trading market or price or volume stability will develop or be maintained. Trading on the OTCID Basic Market is less liquid than the leading national securities exchanges and higher tier OTC quotation systems. The lack of an active market and other aspects of trading in our Common Stock as described above may impair your ability to sell your shares at the time you wish to sell them or at a price or quantity that enables you to realize a profit on your investment or that you otherwise consider reasonable.
- Share Price & Shareholder Rights - Risk 9The market price of our shares of Common Stock is subject to volatility.
The market price of our Common Stock has been and may continue to be volatile and fluctuate substantially, which could cause the value of your investment to decline. Factors that could cause fluctuations in the trading price of our Common Stock include the following: - price and volume fluctuations in the overall stock market from time to time;- volatility in the trading prices and trading volumes of technology industry stocks;- changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;- sales of shares of our Common Stock or Common Stock equivalents by stockholders or by us, including sales by the various creditors we exchanged equity for liabilities in 2025;- the timing and impact of developments related to contractual agreements we have entered into or may in the future enter into with respect to our securities, including with respect to the Resale Provisions described above an any capital raising or strategic transactions we pursue in the future;- failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors;- the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections;- announcements by us or our competitors of new offerings;- the public's reaction to our press releases, other public announcements and filings with the SEC, including the registration statement of which this prospectus is a part;- rumors and market speculation involving us or other companies in our industry;- actual or anticipated changes in our results of operations or fluctuations in our results of operations;- actual or anticipated developments in our business, our competitors' businesses or the competitive landscape generally;- litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;- developments or disputes concerning our intellectual property or other proprietary rights;- announced or completed acquisitions of businesses, services or technologies by us or our competitors;- new laws or regulations or new interpretations of existing laws or regulations applicable to our business;- changes in accounting standards, policies, guidelines, interpretations or principles;- any significant change in our management;- economic instability in the global financial markets and slow or negative growth of our markets; and - other factors described in this "Risk Factors" section. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company's securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management's attention and resources.
- Share Price & Shareholder Rights - Risk 10Because of the number of shares of Common Stock issuable upon conversion and exercise of outstanding securities, holders of our Common Stock will experience substantial future dilution and downward price pressure on our Common Stock.
There are 172,293,506 shares of our Common Stock issued and outstanding as of the date of March 23, 2026. We will be obligated to issue all or very many of the following shares of Common Stock which will dilute our current stockholders: (1) 78,316,074 shares of Common Stock issuable upon exercise of convertible notes, (2) 67,299,982 shares of Common Stock issuable upon exercise of outstanding warrants, (4) 26,983,000 shares of Common Stock issuable upon conversion of our Series A Convertible Preferred Stock and Series C Convertible Preferred Stock, and (5) 39,003,451 shares of Common Stock issuable upon exercise of outstanding stock options. In addition, we expect to issue additional securities in the near future in order to raise capital and to hire and retain personnel, and also may issue additional securities including potentially in the short term to raise capital or engage in strategic transactions. Of the securities described above, 67,507,667 shares of Common Stock are subject certain Universal Resale and Registration Provisions (the "Resale Provisions") pursuant to which such recipients agreed to certain lock-up provisions restricting and limiting their sale, transfer, pledge, or disposal of any shares of Common Stock held by or issuable to such recipients for a period ending 12 months following the date of a resale registration statement with respect to the Common Stock comprising or underlying such securities is declared effective by the Securities and Exchange Commission ("SEC") (such period, the "Lock-Up Period"). The Resale Provisions provide that up to 10% of each holder's shares may be sold or transferred during the first 90 days following such effective date, and up to 25% of such holder's shares may be sold or transferred in each subsequent 90 day period thereafter for the remainder of the Lock-Up Period; and that during each of the third and fourth ninety 90 day periods referred to above, each holder may sell or transfer up to an additional 10% of its shares, but only to the extent such amount represents shares that were eligible for sale or transfer in prior periods but were not sold or transferred by such holder. The Resale Provisions also contains certain additional limitations and exceptions with respect to such lock-up provisions, including a volume limitation on the holders' sales of shares pursuant to which the holders collectively may not sell more than 10% of the shares in a given trading day, and the cessation of the Lock-Up Period and termination of such lock-up provisions if certain events do not occur within a specified time and as more particularly set forth therein. Pursuant to the Resale Provisions the Company also agreed to provide the holders with registration rights pursuant to which, if the Company closes a securities offering resulting in gross proceeds of at least $5 million, the holders shall have "piggy back" registration rights for the inclusion for resale of their shares to be registered on any subsequent registration statement filed with the SEC in connection with such offering. The Company also agreed to file a registration statement for the holders' sales of shares by June 8, 2026, and to cause such registration statement to be declared effective within 90 days thereafter. The Company also agreed to provide the holders with certain indemnification rights in connection with such registration rights. Further, under the Resale Provisions, if the Company fails to close an offering of securities resulting in gross proceeds of at least $5 million by April 8, 2026, the Lock-Up Period immediately ends and the Resale Provisions cease to be in effect, in which case all 67,507,667 shares of Common Stock which are subject to the Resale Provisions will become immediately sellable by the holders without any contractual restrictions. Such event could result in a high volume of sales in a short period of time, which could result is significant downward pressure on our stock price and volatility in the trading of our Common Stock. In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt (subject to the limitations under the existing agreements) or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our then-existing stockholders, reduce the market price of our Common Stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Common Stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond its control, which may adversely affect the amount, timing, or nature of its future offerings. As a result, holders of our Common Stock bear the risk that our future offerings may reduce the market price of our Common Stock and dilute their percentage ownership.
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