Quantum Computing Inc. initiates
commercialization of its technology during first quarter of 2023
and commenced multiple product launches to date,
including:
- Dirac series entropy quantum computer.
- Zero-trust cyber security protection solution.
- Non-repeatable Quantum Random Number Generator.
- Reservoir photonics computing (machine learning/predictive)
capability to enhance Artificial Intelligence systems.
LEESBURG, Va., May 11, 2023
/PRNewswire/ -- Quantum Computing Inc. ("QCI" or the "Company")
(NASDAQ: QUBT), a first-to-market full-stack photonic-based quantum
computing and solutions company, today reports its financial
results for the first quarter ended March
31, 2023.
"We have been building toward this quarter. QCI is prioritizing
top-line growth as we roll out our leading-edge quantum computing
product line throughout 2023 and beyond. We are establishing
ourselves as a leader in photonic quantum information processing,
which has proven to be a distinctly superior methodology featuring
greater processing capability, higher-speed, superior accuracy and
security at less cost with lower power requirements than the
alternative quantum approaches," commented Robert Liscouski, co-Founder, CEO & Chairman
of QCI. "The Dirac series, our photonic-based quantum
entropy computing flagship product line, delivers solutions for
both binary (processing at 11,000+ qubits) and integer-based (qudit
processing) optimization problems. To further leverage the
Company's core technology and expanding capabilities, we recently
announced a joint R&D project to develop a quantum AI
application using reservoir computing and launched a unique Quantum
Random Number Generator as part of our quantum cybersecurity
offering. I am pleased to report that interest is growing
quickly."
Mr. Liscouski continued, "Our product roll-out schedule for the
second half of 2023 is exciting. We are in the planning
stages and eagerly anticipating hybrid computing capability, the
world's first fully integrated quantum and classical combination.
This computer has the potential to be a game-changer.
It is well understood that there are material deficiencies in
standalone classical computing that are solved through quantum
computing and, conversely, the classical computer has an advantage
in data capture and storage. The introduction of a hybrid
computer would revolutionize AI and take it to the next
level." Mr. Liscouski concluded, "We are also actively
working on the specification and design for a dedicated quantum
chip fabrication facility to develop and produce lithium niobate
optical chips. The development of a proprietary photonic
quantum chip will enable us to take our products to a next
generation level, stay tuned."
First Quarter 2023 Financial Highlights
- Revenue: First quarter revenues totaled approximately
$121,000 (53.3% gross margin)
compared to $31,000 (63.0% gross
margin) generated in the first quarter 2022. Revenue was
derived from a mix of commercial and government contracts.
The Company commenced technology commercialization during the
first quarter.
- Operating Expenses: First quarter operating
expense increased 16.7% year-over-year to $7.9 million due primarily to an increase in
salary expense partly offset by a decrease in consulting and
professional services as the Company builds its internal team and
shifts several core responsibilities in-house.
The Company's average monthly cash burn during
first quarter 2023 was approximately $1.57
million, an increase of $0.17
million or roughly 12% over the prior year's monthly
average, primarily due to additional quantum engineering hires as a
result of the QPhoton merger and a focus on marketing to support an
increase in product launches. The level of cash expenditure
is expected to hold relatively steady for the foreseeable
future.
- Net Results: The Company reported a net loss of
$8.5 million for the first quarter of
2023, which included approximately $985,000 in non-recurring, merger-related
operating expenses and financing costs. This represents an
increase of approximately $1.1
million or 19.2% when compared to the same period of the
previous year,
- Total Assets: During the first quarter total assets
increased $227,000 (0.25%) to
$89.5 million as compared with year
end at on December 31, 2022.
-
- Cash increased $1.5 million
during first quarter 2023 to approximately $6.8 million.
- Total Liabilities: For the first three months of 2023,
total liabilities decreased $1.8
million to approximately $12.6
million as the Company began repayment of its debt and
associated interest as well as satisfied final expenses related to
the QPhoton merger.
- Shareholders' Equity: During the three months of
the quarter, shareholder equity increased $2.0 million (2.7%) to $76.9 million.
- Capitalization: As of March 31,
2023, QCI had approximately 60.5 million shares of common
stock outstanding, an increase of approximately 4.5 million shares
from year-end 2022. This increase is attributed to the
sale of shares through an At-The-Market (ATM) facility and the
shares issued as compensation for services related to the QPhoton
merger. As of May 9, 2023, the
Company has $93.3 million remaining
on its shelf registration that went effective November 8, 2022.
QCI's fully diluted shares total approximately
79.5 million, including 10.2 million stock options of which
approximately 68% have vested (average exercise price $3.33), 1.6 million warrants (average exercise
price $6.93), 5.1 million cashless
warrants to pre-merger shareholders of QPhoton, and 1.5 million
shares underlying Series A Preferred stock. In the event that all
options and warrants were to be exercised, the Company would
receive an additional $45.1 million
in cash.
Subsequent Financial Developments:
- The Company has repaid $750,000
of principal and accrued interest on the Company's unsecured Note
for a cumulative total repayment of $1
million as of May 9, 2023.
- The Company issued 853,600 shares of restricted common stock
with a two-year vesting period to thirty-five employees as payment
in lieu of cash for 2022 performance bonuses.
First Quarter 2023 Operational Highlights
Leadership Appointments:
- Dr. Carl Weimer, a 30-year
veteran of the aerospace industry focused on advanced technologies,
including laser remote sensing and LiDAR, joins QCI Board of
Directors as an independent member. Dr. Weimer currently serves as
CTO at Ball Aerospace & Technologies Corp within the Ball Civil
Business Unit. Previously, Dr. Weimer was the Principal
Investigator for the NASA Earth Science Technology Office.
- The Honorable James (Jim) Simon, Jr., a seasoned US
intelligence community leader was appointed to create and lead
QCI's Technical Advisory Board as the Company commences product
sales. A key role of the Technical Advisory Board is to help
maintain QCI's balance between competitive, technological
development and profitable growth.
- Dr. Brian LaMacchia, a recently
retired Distinguished Engineer and head of the Security and
Cryptography team within Microsoft Research, has joined the
Technical Advisory Board.
New Subsidiary Announcement:
- The Company launched a wholly owned subsidiary, QI Solutions,
Inc., to deliver quantum products and services to the US government
agencies and defense markets. Strategically headquartered in
Arizona, the new initiative will
be headed by Sean Gabeler, a 30-year US Army and Special Operations
officer and highly decorated multi war combat veteran with a proven
applied technology expertise in adapting commercial technology to
government solutions.
Contract Announcement:
- The Company received a subcontract award from SSAI to support
NASA's testing of quantum photonic sensing solutions for monitoring
climate change. Under the terms of the subcontract, QCI will test
an existing LiDAR system designed to remotely measure the physical
properties of different types of snowpacks, including the density,
particle size and depth. Upon successful completion of this
testing, QCI may proceed with airborne testing with the ultimate
goal to position the QCI LiDAR units on satellites to create a
network for monitoring snow levels globally.
New Product Launch:
- The Company commenced its cyber security product launch
as international patents were awarded addressing unconditional
network security, including a method for quantum authentication.
This breakthrough patent fills a critical security breach
vulnerability by offering a way to effectively protect information
in a zero-trust environment and thereby safeguarding the entire
network at all points of slippage.
- The Company announced its plans to manufacture its own photonic
quantum computing microchips, which it currently produces in
contract fab facilities at CUNY and Columbia in New York
City. QCI is working to obtain funding from the recent US
government's announcement of the CHIPs and Science Act $52 billion funding to re-shore and develop new
microchip technologies with the objective to increase and maintain
US competitiveness. This program offers QCI the opportunity to
apply for US government funding for its quantum photonic chip
development. QCI and QI Solutions are aggressively pursuing this
opportunity and anticipate funding in 2023 to establish its
fabrication facility.
Paid Proof of Concept and Beta-tests:
- Virginia Innovation Partnership Corporation (VPIC) selected QCI
as its partner for risk-based flight trajectories. QCI successfully
identified the optimal time, speed, and route for drone aircraft to
traverse among destinations, while satisfying airspace constraints
and minimizing risks related to weather, obstacles, and other
aircraft through the use of QCI's Dirac-1 system.
- Rabobank engaged QCI to demonstrate the application of QCI's
quantum computing capabilities to fraud detection in assessing bank
transactions. QCI successfully demonstrated four separate
applications of our Dirac-1 towards different types of machine
learning classification tasks using Rabobank's fraud detection
data.
- The Company is engaged in a number of beta-tests to demonstrate
the effectiveness of its computing capabilities, including:
-
- Portfolio Optimization to demonstrate the optimization of stock
portfolios for trading.
- Optimization of windmill placement for energy production.
- Optimization of nuclear fuel rods for cost efficient
replacement of fuel rods for nuclear power plants.
- Stock performance predictive modeling.
Consortium Membership Invitation:
- QI Solutions joined the University of
Arizona's Center for Quantum Networking (CQN). In addition
to QI Solutions, CQN partners include Harvard
University, MIT, Yale as well as Cisco, Lockheed Martin,
L3Harris, and Raytheon.
- QI Solutions joined the Arizona Defense and Industry Coalition
(AZDIC) as a non-traditional defense company that offers a suite of
quantum services, ranging from quantum computing to quantum
sensing, imaging, and cybersecurity. AZDIC unites a massive defense
community that includes six military installation, four national
guard operations and 1,250 defense contractors collectively
generating $10 billion in economic
impact.
Subsequent Operational Developments and Outlook
New Product Launch:
- The Company announced its reprogrammable and non-repeatable
Quantum Random Number Generator (QRNG), a patented
technology that is crucial to mitigate security vulnerabilities and
provides customers with trustworthy data. The QRNG is available
through a cloud-based subscription on the Company website followed
by an option to purchase the hardware later in 2023.
- The Company announced its reservoir photonics computing
capability through an MOU with artificial intelligence company
millionways, Inc. The partnership represents a significant
development for QCI as it enters into the AI market to demonstrate
the value of quantum computing for AI. The partnership will
highlight the value of processing millionways' AI algorithms
through QCI's existing RQC systems that can uniquely assess audio
files to produce an emotional scoring capability and demonstrate an
enhanced capability for AI systems in general. If the data
processing project is successful, the companies will develop a
joint marketing and business development plan to pursue commercial
opportunities.
Leadership Announcement:
- Lewis Shepherd, an emerging and
disruptive technologies specialist within both Silicon Valley
(VMware, Microsoft) and government service (U.S. Department o
Defense, Federal Communications Commission, Intelligence Committee
of AFCEA International, Defense Intelligence Agency), has joined
the QCI Technical Advisory Board to provide industry advice, market
intelligence, and QCI product visibility into his extensive
network.
Consortium Membership Invitation:
- QI Solutions joined the Center for Quantum Technologies (CQT).
CQT is a National Science Foundation sponsored initiative with
engineers and scientists from Purdue
University, Indiana University,
the University of Notre Dame, and
Indiana University Purdue University
Indianapolis (IUPUI). QI Solutions and these four
universities are joined by industry leaders, such as Air Force
Research Laboratory, Amazon Web Services, Eli Lilly, Cummins,
Toyota, Northrup Grumman, and IBM
Quantum, to explore novel quantum technologies that address
industry and defense challenges.
Guidance:
- The Company has completed its discovery and research phase of
its core technology and has now transitioned to commercializing
applications through its various product lines. Year-to-date, QCI
has released several products in the first four months of 2023 with
a number of additional product launches planned during the
remainder of this year. The Company is actively increasing its
sales and marketing efforts, anticipating gradual revenue increase
mid year with acceleration to occur in the second half of
2023.
For additional information on the company's suite of solutions,
please visit our website or contact our team directly.
About Quantum Computing Inc. (QCI)
Quantum Computing Inc. is a full-stack quantum hardware and
software company on a mission to accelerate the value of quantum
computing for real-world business solutions, delivering the future
of quantum computing, today. The company delivers accessible and
affordable full-stack solutions with real-world industrial
applications, using photonic-based quantum entropy, which
can be used anywhere and with little to no training, operates at
normal room temperatures, low power and is not burdened with unique
environmental requirements. QCI is competitively advantaged
delivering its quantum solutions at greater speed, accuracy, and
security at less cost QCI's core entropy computing
capability, the Dirac series, delivers solutions for both binary
and integer-based optimization problems using over 11,000 qubits
for binary problems and over 1000 (n=64) qudits for integer-based
problems, each of which are the highest number of variables and
problem size available in quantum computing today. Using the
Company's core quantum methodologies, QCI has also developed
specific quantum applications for AI, cybersecurity and remote
sensing, including its Reservoir Quantum Computing, reprogrammable
and non-repeatable Quantum Random Number Generator and LiDAR
products. For more information about QCI, visit
www.quantumcomputinginc.com.
About QI Solutions, Inc. (QIS)
QI Solutions, Inc., a wholly owned subsidiary of Quantum
Computing Inc., is a supplier of quantum technology solutions and
services to the government and defense industries. With a team of
qualified and cleared staff, QIS delivers a range of solutions from
entropy quantum computing to quantum communications and sensing,
backed by expertise in logistics, manufacturing, R&D and
training. The company is exclusively focused on delivering tailored
solutions for partners in various government departments and
agencies. For more information about QIS, visit
https://qiwerx.com/.
Important Cautions Regarding Forward-Looking
Statements
This press release contains forward-looking statements as
defined within Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. By their nature, forward-looking statements and forecasts
involve risks and uncertainties because they relate to events and
depend on circumstances that will occur in the near future. Those
statements include statements regarding the intent, belief or
current expectations of Quantum Computing Inc. (the "Company"), and
members of its management as well as the assumptions on which such
statements are based. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual
results may differ materially from those contemplated by such
forward-looking statements.
The Company undertakes no obligation to update or revise
forward-looking statements to reflect changed conditions.
Statements in this press release that are not descriptions of
historical facts are forward-looking statements relating to future
events, and as such all forward-looking statements are made
pursuant to the Securities Litigation Reform Act of 1995.
Statements may contain certain forward-looking statements
pertaining to future anticipated or projected plans, performance,
and developments, as well as other statements relating to future
operations and results. Any statements in this press release that
are not statements of historical fact may be considered to be
forward-looking statements. Words such as "may," "will," "expect,"
"believe," "anticipate," "estimate," "intends," "goal,"
"objective," "seek," "attempt," "aim to," or variations of these or
similar words, identify forward-looking statements. These risks and
uncertainties include, but are not limited to, those described in
Item 1A in the Company's Annual Report on Form 10-K, which is
expressly incorporated herein by reference, and other factors as
may periodically be described in the Company's filings with the
SEC.
*** Financial Statements
Follow ***
|
|
Quantum Computing
Inc.
Consolidated Balance
Sheet
(Unaudited)
|
|
|
|
March 31, 2023
|
|
December 31, 2022
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
6,764,866
|
|
$
5,308,466
|
|
|
Account
receivable
|
63,005
|
|
12,774
|
|
|
Prepaid
expenses
|
224,333
|
|
224,302
|
|
|
Other current
assets
|
42,388
|
|
42,105
|
|
|
Subtotal current
assets
|
7,094,592
|
|
5,587,647
|
|
Fixed assets (net of
depreciation)
|
1,309,100
|
|
975,169
|
|
Other Assets
|
|
|
|
|
|
Lease
right-of-use
|
1,212,918
|
|
1,327,746
|
|
|
Security
deposits
|
60,271
|
|
60,271
|
|
|
Intangible assets-net
of amortization
|
20,724,419
|
|
22,223,725
|
|
|
Goodwill
|
59,125,773
|
|
59,125,773
|
|
|
Subtotal Other
assets
|
81,123,381
|
|
82,737,515
|
|
Total Assets
|
$
89,527,073
|
|
$
89,300,331
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
(Deficit)
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Accounts
payable
|
$
922,031
|
|
$
871,887
|
|
|
Accrued
expenses
|
1,718,823
|
|
3,559,981
|
|
|
Lease
liability
|
1,245,861
|
|
1,357,924
|
|
|
Dividends
payable-preferred
|
215,119
|
|
219,844
|
|
|
Loans payable-short
term
|
8,287,969
|
|
535,684
|
|
|
Accrued interest –
short term
|
182,046
|
|
-
|
|
|
Current liabilities -
subtotal
|
12,571,850
|
|
6,545,320
|
|
Long term liabilities
|
|
|
|
|
|
Loans payable-long
term
|
4,114
|
|
7,632,998
|
|
|
Accrued interest – long
term
|
7,759
|
|
225,282
|
|
|
Long term
liabilities - subtotal
|
11,873
|
|
7,858,280
|
|
Total Liabilities
|
12,583,723
|
|
14,403,600
|
Stockholders' Equity
(Deficit)
|
|
|
|
|
|
Common stock, $0.0001
par value, 250,000,000 shares authorized: 60,496,062
and 55,963,334 shares issued and outstanding as of March 31, 2023
and December 31,
2022, respectively.
|
6,049
|
|
5,596
|
|
|
Preferred stock,
$0.0001par value, 1,550,000 shares Series A convertible
preferred
Authorized; 1,490,004 and 1,500,004 shares issued and outstanding
as of March 31,
2023 And December 31, 2022, respectively; 3,079,864 shares of
Series B Preferred
Stock Authorized, 0 and 0 shares issued and outstanding as of March
31, 2023 and
December 31, 2022, respectively.
|
149
|
|
150
|
|
|
Additional paid-in
capital
|
157,348,323
|
|
151,163,909
|
|
|
APIC-Beneficial
Conversion Feature in Equity
|
4,898,835
|
|
4,898,835
|
|
|
APIC-Stock Based
Compensation
|
43,183,914
|
|
38,816,022
|
|
|
Accumulated
deficit
|
(128,493,920)
|
|
(119,987,781)
|
|
|
Total Stockholders' Equity
(deficit)
|
76,943,350
|
|
74,896,731
|
|
|
Total Liabilities and Stockholders'
Equity
|
$
89,527,073
|
|
$
89,300,331
|
Quantum Computing
Inc.
Consolidated Statement
of Operations
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2023
|
|
2022
|
|
|
|
|
Total
revenues
|
$
120,530
|
|
$
31,240
|
Cost of
revenues
|
56,239
|
|
11,568
|
Gross
profit
|
64,291
|
|
19,672
|
|
|
|
|
Operating
expenses
|
|
|
|
Salaries
and Benefits
|
1,453,634
|
|
1,116,228
|
Consulting
|
225,040
|
|
370,881
|
Research
& development
|
1,534,597
|
|
1,024,587
|
Stock
based compensation
|
1,968,814
|
|
3,079,803
|
Selling
General and administrative
|
2,669,716
|
|
1,137,104
|
Total
operating expenses
|
7,851,801
|
|
6,728,603
|
Loss from
operations
|
(7,787,510)
|
|
(6,708,931)
|
|
|
|
|
Other income
(expenses)
|
|
|
|
Interest
income
|
31,845
|
|
10,864
|
Misc.
Income – Government Grants
|
-
|
|
-
|
Interest
expense – Promissory Notes
|
(214,523)
|
|
-
|
Interest
expense - Warrants
|
-
|
|
-
|
Interest
expense – Preferred dividends
|
(215,715)
|
|
(223,125)
|
Interest
expense – Financing expenses
|
(320,236)
|
|
(212,500)
|
Other
income (expenses), net
|
(718,629)
|
|
(424,761)
|
|
|
|
|
Income tax
provision
|
-
|
|
-
|
Net
loss
|
$
(8,506,139)
|
|
$
(7,133,692)
|
|
|
|
|
Per-share
data
|
|
|
|
Weighted average shares - basic
|
60,496,162
|
|
29,156,815
|
Weighted average shares - diluted
|
78,817,239
|
|
38,135,094
|
|
|
|
|
Loss per
share - basic
|
$
(0.14)
|
|
$
(0.24)
|
Loss per
share - diluted
|
$
(0.11)
|
|
$
(0.19)
|
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SOURCE Quantum Computing Inc.