Quantum Computing Inc.

Item 1. Legal Proceedings.

Except as listed below, there is no action, suit, or proceeding by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or our subsidiaries, threatened against or affecting the Company, our common stock, our subsidiaries, or the Company’s or its subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect on the Company.

QCi v. BV Advisory Injunction Lawsuit

On January 31, 2025, the Company filed a complaint in Delaware Chancery Court against BV Defendants (BV Advisory and its principal Keith Barksdale) asserting claims for defamation, breach of contract, conversion, aiding and abetting conversion, and misappropriation of trade secrets based on the BV Defendants’ unauthorized possession and dissemination of certain of the Company’s confidential and privileged documents. The Company seeks, among other relief, injunctive relief and damages. On February 11, 2025, the Court granted the Company’s motion for temporary restraining order and instructed the parties to negotiate an expedited case schedule. On February 13, 2025, the Court entered a stipulated case schedule that set a trial for April 8 and 9, 2025 on the Company’s claims for conversion, aiding and abetting conversion, and misappropriation of trade secrets. On March 19, 2025 the Court granted the Company’s motion to vacate the scheduling order to allow the parties additional time for completion of discovery. The parties are currently engaged in discovery, and the Company does not believe it is necessary to accrue a litigation reserve at this time.

Securities Class Action Lawsuit

On February 25, 2025, a class action lawsuit was filed against the Company and certain of its current and past officers in the New Jersey District Court, by a plaintiff seeking to represent a class of all persons who purchased the Company’s securities between March 30, 2020 and January 15, 2025, alleging violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that the Company made false and/or misleading statements and/or failed to disclose material information about the Company’s customers, contracts and business operations. To date, the New Jersey District Court has not certified a class or designated a lead plaintiff. The Company believes the allegations in the complaint have no merit, intends to vigorously defend against the claims asserted, and does not believe it is necessary to accrue a litigation reserve at this time.

Shareholder Derivative Action Lawsuit

On March 31, 2025, a shareholder derivative action (the “March 2025 Derivative Action”) was filed against certain of the Company’s current and past officers and directors, on behalf of the Company as a nominal defendant, in the United States District Court for the District of New Jersey, for alleged breaches of fiduciary duties, unjust enrichment, abuse of control, waste of corporate assets, and violations of the Securities Exchange Act of 1934 by the named officers and directors. The March 2025 Derivative Action seeks to remedy wrongdoing committed by the named officers and directors between March 30, 2020 and January 15, 2025. The Company believes that the allegations in the complaint have no merit, intends to vigorously defend against the asserted claims, and does not believe it is necessary to accrue a litigation reserve at this time.

Arbitration over Stock Options

In February 2025, the Company entered into arbitrations with Former Consultants (two individuals) regarding forfeiture of stock options. The Company had issued stock options to the consultants in 2020 and 2021 pursuant to their respective consulting agreements. The Company terminated the Former Consultants’ consulting agreements in March 2024, at which time the Company informed the Former Consultants that any vested options had to be exercised within three months of the termination date, per the Company’s Equity and Incentive Plans. The Former Consultants did not exercise their vested options, and the options were duly forfeited. In December 2024, the Former Consultants claimed that they still retained the right to exercise the options, which the Company has rejected. The Company believes these claims are without merit, intends to defend itself vigorously, and does not believe it is necessary to accrue a litigation reserve at this time.