Confidential, Board Use Only
Q2 2026 Board Meeting
Q2 2026 Board Meeting
July 28, 2026 · Capitol Headquarters · Shaun Modi, CEO
Five board-ready facts. If you read only this , you have the quarter.
| # | Fact | Key Figure |
|---|---|---|
| 1 | Committed ARR reached $3.1M, up 50% from $2.1M at the start of the year, and it is now built on signed contracts rather than projections. EY remains the anchor: it signed a one-time $750K inference purchase order this quarter, and a further $1M expansion is in progress, with $400K out for signature and $600K to be papered in Q3. | $3.1M committed ARR, up 50% |
| 2 | Open pipeline stands at $37.8M ($9.8M weighted) across 76 deals, up from 57, with nine deals now advanced into Pricing / Negotiation. | $37.8M pipeline, $9.8M weighted |
| 3 | We submitted our CENTCOM proposal for the $1.8M pilot and expect a decision within about two weeks. If awarded, it converts to a $5.0M total opportunity. | $1.8M pilot, $5.0M if awarded |
| 4 | Product engagement deepened sharply: sessions per active user rose to 3.85 in June (from 1.81 a year earlier, 2.1×) and cumulative users passed 14,354. | 3.85 sessions/user, 14,354 users |
| 5 | We were awarded a $125K DC Growth Fund grant. Non-dilutive capital that helps our cash position. | $125K non-dilutive grant |
Short runway and a ramping sales function are the primary near-term risks. Mitigations are concrete: $3.1M of committed ARR, an EY expansion commitment ($400K out for signature, $600K to be papered in Q3), a $1.8M CENTCOM pilot proposal submitted and awaiting decision, partner-led GTM, and a bank-led process to sell or raise (after collecting $853K of first SAFE checks in May).
Spend like the runway is short, because it is, and chase every open deal like it closes this quarter. We are cutting what does not work, holding headcount flat, and putting the team behind EY, CENTCOM, Booz Allen, and the rest of the pipeline. Tight on cost, aggressive on revenue.
ARR is an exit-rate: the annualized run-rate of contracts in force at year-end. GAAP revenue is only what is delivered and recognized within the calendar year. Because most of this pipeline signs in H2 and ramps, a ~$12.9M ARR exit-rate reconciles with the $5.4M 2026 GAAP revenue forecast. The balance of that annualized value is recognized in 2027, not 2026.
| Action | Status | Details |
|---|---|---|
| Exited VP of Partnerships | Complete | A performance decision. The role was hired too senior and too early. Going forward we hire closer to the work and prove the sales motion before adding senior GTM leadership. |
| Two additional underperformers exiting | In Progress | We identified two more team members below the bar and are moving them out. We hold the team to clear output expectations and act quickly when they are not met. |
| Ongoing productivity review | Continuous | We monitor output and cost per head every month and size the team to what the business needs, not to a plan set at the start of the year. |
| Founding AE hire | Search in Progress | Backfilling the departed VP with a Founding AE, not a VP. Closer to the deals and hands-on. |
| Interim pipeline coverage | In Place | Founders are covering active deals during the transition. |
Team-level shipping metrics, benchmarked against the LinearB 2025/26 cohort (8.1M pull requests across 4,800 engineering teams).
| Benchmark | Capitol (Q2) | Industry Median | Elite Bar | Standing |
|---|---|---|---|---|
| Code changes merged per engineer per month | 29.2 | 12.4 | >20 | Top decile (above p90 of 26.3) |
| Cycle time, work opened to shipped (median) | 1.4 hours | ~83 hours | <25 hours | Elite, ~60× faster than median org |
| Time to first code review | Minutes (AI first-pass) | 4–24 hours | <7 hours | Elite |
| Engineers shipping at the elite cadence (>2 merges/week) | 13 of 17 (76%) | — | — | Zero engineers below the industry “fair” bar |
| Share of delivery handled by automation | 24% of merges | 5–15% typical | — | ~2× a typical org, built out this quarter |
| Stage | Deals | Total Value | Weighted Value | Wtd % |
|---|---|---|---|---|
| Intro / Discovery | 43 | $15.9M | $1.6M | 10% |
| Pitch / Hypothesis | 22 | $12.8M | $2.5M | 20% |
| Paid POC | 2 | $1.1M | $0.8M | 70% |
| Pricing / Negotiation | 9 | $8.1M | $4.8M | 59% |
| Total | 76 | $37.8M | $9.8M | 26% |
With EY in full production, the partner model is now bringing in established primes and global integrators. New this quarter: a downselected Booz Allen IC bid (award still pending), plus DXC and Atos joining as systems-integrator partners.
DXC and Atos join the ecosystem as global systems-integrator partners, giving us reach into large enterprise and public-sector accounts through their existing delivery channels.
If awarded, this would be our first federal program led by an established prime and our first route into the Intelligence Community.
| Period | Rec. Revenue | ARR | Contracted Rev. | Cash | Qtrly Burn* | Runway |
|---|---|---|---|---|---|---|
| Q3 2025 | $0.2M | $1.0M | $2.2M | $6.5M | $1.5M | ~2028 |
| Q4 2025 | $0.4M | $2.1M | $3.5M | $4.6M | $1.9M | ~2028 |
| 2025 Full Year | $0.9M | $2.1M | $3.5M | $4.6M | $5.3M | ~2028 |
| Q1 2026 | $0.5M | $1.6M | $2.1M | $3.0M | $1.6M | ~Oct 2026 † |
| Q2 2026 | $0.9M | $2.1M | $3.5M | $1.5M | $1.5M | ~Oct 2026 |
* Does not assume the next funding round.
† Runway compressed from "~2028" to months after burn methodology moved to pure-quarterly basis (excluding one-time Series A $1.4M in Q3-25). A more conservative, realistic accounting.
* Q2 $1.5M quarterly cash burn includes $853K of SAFE funds collected in May; without this inflow, burn would be ~$2.4M.
* $125K awarded from the DC Growth Fund; to be collected in a subsequent month.
* Reported ARR held at $2.1M while committed ARR is $3.1M. The delta is the EY expansion commitment that is not yet fully live in ARR.
Does not assume the next funding round. 2026 includes $883K in EY Inference Cost Reimbursement Revenue.
Forecast revised down from $7.1M to $5.4M this quarter. We reset it to reflect realistic close timing.
This $5.4M is recognized GAAP revenue, not ARR. The base-case $12.9M EOY ARR is an annualized exit-rate; most of it signs in H2 and is recognized in 2027.
Steady ramp through H1 2026, with re-forecast acceleration through H2 toward the $5.4M revised full-year target. Monthly recognized revenue grows from $0.43M in June to $0.80M by December.
| Period | Recognized Revenue | Notes |
|---|---|---|
| Apr 2025 | $0.07M | Early ramp |
| Sep 2025 | $0.13M | EY ramp underway |
| Dec 2025 | $0.14M | Q4 2025 close |
| Mar 2026 | $0.15M | Q1 2026 close |
| Jun 2026 | $0.43M | Last confirmed actual; EY production scaling |
| Dec 2026 (Forecast) | $0.80M | Re-forecast to reach $5.4M FY total; does not assume next round |
| Category | Q1 2026 | Q2 2026 | Change | Commentary |
|---|---|---|---|---|
| Hosting / AI / SaaS | $22K | $796K | +$774K | EY inference production at scale; majority reimbursed by customer |
| Payroll | +$198K (+24%) | +$126K (+12%) | Moderated | Hiring pace slowed |
| Marketing & Sales | $153K | $153K | Flat | In-kind marketing offset |
| Quarterly Cash Burn (reported) | $1.6M | $1.5M | −$0.1M | Includes $853K SAFE funds collected in May; ex-SAFE burn ≈ $2.4M |
Methodology: average monthly cash burn excludes cloud and inference cost reimbursements from customers.
The $4M SAFE did not come together as planned. We collected $853K in first checks but the round stalled, so we no longer view the SAFE as the answer to our near-term cash needs. We are changing the approach.
| Item | Detail |
|---|---|
| SAFE | $4M target at $80M post-money cap. $853K collected in May, then stalled. No longer the near-term cash plan. |
| New process | Engaging investment bankers to run a formal process. |
| Path A: Sale | Run a sale process for the company if the terms create more value for shareholders. |
| Path B: Raise | Use a term sheet from the process to raise a larger round than the SAFE would have delivered. |
| Rationale | The SAFE proved too slow and too small for our cash needs. A bank-led process gives us a real market test and a stronger outcome on either path. |
| Board action | Support the decision to engage bankers and run the process. |