Quantum Computing Inc.

Previous wording

QCi is a development stage company with limited operations and revenue. The Company is developing quantum and ancillary non-quantum products for high-performance computing, sensing, and networking applications based on proprietary photonics technology. QCi’s products are designed to operate at room temperature and low power at an affordable cost in the areas of high-performance computing, sensing, and quantum cybersecurity. The Company has generated some revenue based on sales of products and related services to date and is expanding its sales and marketing efforts. The Company’s development team includes optical engineers, technicians, mathematicians, physicists, and software developers.

Current wording

QCi is a growth stage company with expanding operations and revenue following the LSI and NuCrypt acquisitions. The Company is developing and marketing quantum and ancillary non-quantum products for high-performance computing, artificial intelligence, networking and sensing applications based on proprietary photonics technology, as well as optical components including lasers and photo detectors. QCi’s products are designed to operate at room temperature and low power at an affordable cost in the areas of high-performance computing, sensing, and quantum cybersecurity. The Company’s development team includes optical engineers, technicians, mathematicians, physicists, and software developers. Our go-to-market strategy emphasizes scalability, accessibility, and affordability, and is supported by a professional services offering to help customers implement applications in optimization, sensing, imaging, and cybersecurity.

Previous wording

QCi’s proprietary core technology rests in our ability to condition, manipulate, and measure single photons (particles of light). Specifically, our integrated photonics approach exploits the non-linear capabilities of photons (our “Core Photonics Technology”). Our Entropy Quantum Computer (“EQC”) is a quantum application of our Core Photonics Technology, designed to solve complex optimization problems. EQC is based on a patent-pending methodology that utilizes the energy in the environment to drive controlled feedback through energy loss in a photonic circuit architecture. The EQC’s use of the environment as an integral part of the system is in sharp contrast to competing quantum approaches, including the aforementioned superconducting, trapped-ion, and annealing architectures, which seek to establish stable quantum states by the complete elimination of environmental effects. As a result, the EQC consumes less power than these competing methods and operates at room temperature making it compatible with an ordinary server room environment. We anticipate that our EQC will enable us to develop and produce multiple generations of quantum machines with increasing computational power, scalability, and speed.

Current wording

QCi’s proprietary core technology is our integrated photonics approach, which allows us to condition, manipulate, and measure single and entangled photons (particles of light) and gives us the ability to exploit the non-linear capabilities of photons (our “Core Photonics Technology”). Our Entropy Quantum Computer (“EQC”) is a quantum application of our Core Photonics Technology, designed to solve complex optimization problems. EQC is based on a patent-pending methodology that uses controlled feedback through energy loss in a photonic loop architecture to drive photonic states to their least lossy configurations. The EQC’s involvement of the changing environment as an integral part of the system is in sharp contrast to competing quantum approaches, including superconducting, trapped-ion, and annealing architectures, which seek to establish stable quantum states by the complete elimination of environmental effects. As a result, the EQC can consume less power than these competing methods and operates at room temperature making it compatible with an ordinary server room environment. We anticipate that our EQC may enable us to develop and produce multiple generations of quantum machines with increasing computational power, scalability, and speed.

Previous wording

In addition to our EQC technology, we have leveraged QCi’s core photonics technology to demonstrate powerful quantum sensing use cases in LIDAR (light detection and ranging) (a technology that uses pulsed laser light to measure distances to objects by calculating the time it takes for the reflected light to return), reservoir computing (a form of neural network that can be used in machine learning applications and quantum cyber authentication (a method for highly secure communication within a network). Several of these technologies are in the early stages of commercialization and several are available to customers through our research & development offerings.

Current wording

In addition to our EQC technology, we have leveraged QCi’s core photonics technology to demonstrate powerful quantum sensing use cases in LiDAR (light detection and ranging), a technology that uses pulsed laser light to measure distances to objects by calculating the time it takes for the reflected light to return, reservoir computing, a form of neural network that can be used in machine learning applications, and a quantum cyber solution, a method for highly secure communication within a network. Several of these technologies are in the early stages of commercialization and several are available to customers through our research and development offerings.

Previous wording

Our longer-term product development plan is to migrate product designs based on discrete components, including EQC’s current design, to a set of optical integrated circuits built on wafers using a crystalline material called lithium niobate (“Thin Film Lithium Niobate” or “TFLN”). The Company believes that TFLN is an excellent material for optical integrated circuit design, given its advantageous optical properties (both linear and non-linear) and its compatibility with silicon-based semiconductor fabrication methods. In March 2025, the Company substantially completed the buildout of a state-of-the-art TFLN chip manufacturing facility in a leased space within Arizona State University’s Research Park in Tempe, Arizona (the “AZ Chips Facility”).

Current wording

Our longer-term product development plan is to migrate product designs based on discrete components, including EQC’s current designs, to a set of optical integrated circuits built on wafers using a crystalline material called thin film lithium niobate (“TFLN”). The Company believes that TFLN is an excellent material for optical integrated circuit design, given its advantageous optical properties (linear, non-linear ferroelectric, and electro-optic) and its compatibility with silicon-based semiconductor fabrication methods. In March 2025, the Company substantially completed the buildout of its state-of-the-art TFLN chip research and development, prototyping and small-batch manufacturing facility in a leased space within Arizona State University’s Research Park in Tempe, Arizona (the “AZ Chips Facility”). Additional details about our Tempe, AZ and Hoboken, NJ facilities are discussed in Liquidity and Capital Resources in this report and in our 2025 Annual Report on Form 10-K. In addition, the Company is in the planning stages for another higher volume manufacturing facility, which we sometimes refer to as “FAB 2.”

Previous wording

Our results of operations for the three and nine months ended September 30, 2025 and 2024 are as follows (in thousands, except percentages, with non-meaningful percentage changes labeled as “NM”):

Current wording

Our results of operations for the three months ended March 31, 2026 and 2025 are as follows (in thousands, except percentages, with non-meaningful percentage changes labeled as “NM”):

Previous wording

Research and development expenses consist primarily of labor expenses for employees that primarily engage in research and development efforts and non-labor expenses for the development of hardware products and supporting software. We focus the bulk of our research and development activities on the continued development of existing products and the development of new offerings for emerging market opportunities. Research and development costs were $4.5 million and $13.5 million for the three and nine months ended September 30, 2025, compared to $2.2 million and $6.6 million, respectively for the three and nine months ended September 30, 2024. Research and development expenses increased $2.3 million and $6.9 million, respectively, for the three and nine months ended September 30, 2025. These increases were due to higher headcount and related payroll costs and stock based compensation expense, higher recurring lab equipment and consumables costs, and higher depreciation for long-lived laboratory equipment, partially offset by hosting services. The Company is aggressively pursuing its technology roadmap and has hired additional scientists, engineers and technicians in order to accelerate the development of key technologies and products.

Current wording

Research and development expenses consist primarily of labor expenses for employees that primarily engage in research and development efforts and non-labor expenses for the development of hardware products and supporting software. We focus the bulk of our research and development activities on the continued development of existing products and the development of new offerings for emerging market opportunities. Research and development costs were $7.0 million for the three months ended March 31, 2026, compared to $3.0 million for the three months ended March 31, 2025. Research and development expenses increased $4.0 million for the three months ended March 31, 2026. Acquisitions, including our LSI and NuCrypt acquisitions, contributed to $0.7 million of the increase with the remaining increase primarily due to higher headcount and related payroll costs, higher recurring lab equipment and consumables costs, and higher depreciation for long-lived laboratory equipment, partially offset by lower stock based compensation expense. The Company is aggressively pursuing its technology roadmap and has hired additional scientists, engineers and technicians in order to accelerate the development of key technologies and products.

Previous wording

Selling and marketing expenses consist primarily of employee compensation as well as customer lead generation activities, tradeshow participation, advertising and other marketing and selling costs. Sales and marketing expenses were $787 thousand and $2.1 million for the three and nine months ended September 30, 2025 as compared to $363 thousand and $1.2 million for the three and nine months ended September 30, 2024. Selling and marketing expenses increased 117% and 72% for the three and nine months ended September 30, 2025, respectively, as compared to the prior comparable period, primarily due to increases in the sales staff, higher tradeshow and travel-related costs and increased marketing program costs. During 2025 the sales and marketing team has participated in 1or 2 conferences and trade shows per month, compared to 1 or 2 trade shows per quarter during 2024, including greater participation in international quantum technology events, resulting in higher travel expenses.

Current wording

Sales and marketing expenses consist primarily of employee compensation as well as customer lead generation activities, tradeshow participation, advertising and other marketing and selling costs. Sales and marketing expenses were $1.6 million for the three months ended March 31, 2026 as compared to $0.7 million for the three months ended March 31, 2025, a 138% increase. Acquisitions added $0.3 million of selling and marketing expenses. The remaining increase is primarily due to increases in the sales staff, higher tradeshow and travel-related costs and increased marketing program costs.

Previous wording

General and administrative expenses consist primarily of compensation expenses for employees performing administrative functions and professional fees incurred for legal, auditing and other consulting services. General and administrative expenses were $5.2 million and $13.4 million for the three and nine months ended September 30, 2025 compared to $2.8 million and $9.3 million for the three and nine months ended September 30, 2024. General and administrative expenses increased 84% for the three months ended and increased 44% for the nine months ended September 30, 2025, compared to the comparable prior year periods primarily due to higher employee and advisor-related expenses relating to development and implementation of internal financial controls, expansion of accounting staff, increased recruiting fees and legal expenses related to multiple financings and ongoing litigation.

Current wording

General and administrative expenses consist primarily of compensation expenses for employees performing administrative functions and professional fees incurred for legal, auditing and other consulting services. General and administrative expenses were $11.3 million for the three months ended March 31, 2026 compared to $4.6 million for the three months ended March 31, 2025. General and administrative expenses increased 143% for the three months ended March 31, 2026, compared to the comparable prior year period primarily due to acquisitions ($0.9 million), acquisition-related transaction expenses ($5.6 million) and ongoing litigation ($0.1 million).

Previous wording

The Company recognized a gain of $9.2 million during the three months ended September 30, 2025 as a result of the change in fair value of the QPhoton Warrant liability. During the nine months ended September 30, 2025, the Company recognized a gain of $4.8 million related to the change in fair value of the QPhoton Warrant liability. The change in value of the warrant liability is comprised of mark-to-market adjustments for the QPhoton Warrants. Future mark-to-market adjustments may result in losses if the Company’s stock price increases above the Company’s closing bid price of $18.41 per share on September 30, 2025. No gains or losses were recorded in the comparable periods ended September 30, 2024.

Current wording

The Company recognized a gain of $3.2 million during the three months ended March 31, 2026 as a result of the change in fair value of the QPhoton Warrant liability. The change in value of the warrant liability is comprised of mark-to-market adjustments for the QPhoton Warrants. Future mark-to-market adjustments may result in losses if the Company’s stock price increases above the Company’s closing bid price of $6.85 per share on March 31, 2026.

Previous wording

We have incurred net losses and experienced negative cash flows from operations since inception. During the three and nine months ended September 30, 2025, the Company raised $474.9 million and $756.5 million, respectively, through the private placement of equity. The Company has no lines of credit or short-term debt obligations outstanding when excluding the remaining debt issuance costs. We expect to incur additional losses and higher operating expenses for the foreseeable future as we continue to invest in research and development and go-to-market programs. As of September 30, 2025, the Company had cash and cash equivalents of $352.4 million and investments of $460.6 million.

Current wording

We have incurred net losses and experienced negative cash flows from operations since inception. During the three months ended March 31, 2026, the Company raised $3.5 million through the exercise of stock options. The Company has no lines of credit or short-term debt obligations outstanding. We expect to incur additional losses and higher operating expenses for the foreseeable future as we continue to invest in research and development and go-to-market programs. As of March 31, 2026, the Company had cash and cash equivalents of $257.7 million and investments of $1.2 billion.

Previous wording

Our primary uses of cash are to fund and invest in our operations as we continue to grow our business. We will require a significant amount of cash for continued investment in our Foundry Services offering, including but not limited to any future-identified space for expansion of our AZ Chips Facility, as well as ongoing research and development for our non-linear quantum optical products and photonics chips. Until such time as we can generate significant revenue from sales or subscriptions of our hardware offerings, we expect to finance our operating and investing needs through our cash and cash equivalents and, equity and/or debt financings or other capital sources, including but not limited to U.S. government grant and loan programs. We may, however, be unable to raise sufficient funds or enter into such other arrangements, when needed, on favorable terms, or at all. In particular, uncertain and unfavorable conditions in the United States and global macroeconomic environment, including inflationary pressures, rising interest rates, bank failures, and financial and credit market fluctuations, could reduce our ability to access capital on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, or substantially reduce our product development and go-to-market efforts. There can be no assurances that the Company will be able to secure additional equity and/or debt investments or achieve an adequate sales level. We believe, however, that the Company’s existing cash and cash equivalents, together with any cash generated from operations and the proceeds from any additional equity or debt issuances will be sufficient to meet the Company’s liquidity needs for at least the next 12 months.

Current wording

Our primary uses of cash are to fund and invest in our operations as we continue to grow our business. We will require a significant amount of cash for continued investment in our TFLN chip contract manufacturing business run out of the AZ Chips Facility, or our Foundry Services offering, including but not limited to future-identified space for expansion of our AZ Chips Facility, as well as ongoing research and development for our non-linear quantum optical products and photonics chips. Until such time as we can generate significant revenue from sales or subscriptions of our hardware offerings, we expect to finance our operating and investing needs through our cash and cash equivalents and, equity and/or debt financings or other capital sources, including but not limited to U.S. government grant and loan programs. We may, however, be unable to raise sufficient funds or enter into such other arrangements, when needed, on favorable terms, or at all. In particular, uncertain and unfavorable conditions in the United States and global macroeconomic environment, including inflationary pressures, interest rates, bank failures, and financial and credit market fluctuations, could reduce our ability to access capital on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, or substantially reduce our product development and go-to-market efforts. There can be no assurances that the Company will be able to secure additional equity and/or debt investments or achieve an adequate sales level. We believe, however, that the Company’s existing cash and cash equivalents, together with any cash generated from operations and the proceeds from any additional equity or debt issuances will be sufficient to meet the Company’s liquidity needs for at least the next 12 months.

Previous wording

The following table summarizes total consolidated current assets, liabilities and working capital at September 30, 2025, compared to December 31, 2024 (in thousands):

Current wording

The following table summarizes total condensed consolidated current assets, liabilities and working capital at March 31, 2026, compared to December 31, 2025 (in thousands):

Previous wording

At September 30, 2025, we had working capital of $559.2 million as compared to working capital of $74.6 million at December 31, 2024, an increase of $484.6 million. The increase in working capital is primarily attributable to an increase in cash and available-for-sale debt securities from the net proceeds of our sales of 49.1 million shares of common stock for an aggregate of $756.5 million during the nine months ended September 30, 2025, offset by the use of cash to pay for operating expenses and capital investments in property and equipment.

Current wording

At March 31, 2026, we had working capital of $990.0 million as compared to working capital of $1.1 billion at December 31, 2025, a decrease of $133.0 million. The decrease in working capital is primarily attributable to the use of cash to finance acquisitions.

Previous wording

The following table summarizes our cash flow for the nine months ended September 30, 2025 and 2024 (in thousands).

Current wording

The following table summarizes our cash flow for the three months ended March 31, 2026 and 2025 (in thousands).

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was $466.2 million and $3.1 million, respectively, and was attributable to our purchase of computer hardware, laboratory and TFLN Chips manufacturing equipment as well as the purchase of $460.6 million in available-for-sale debt securities.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026 and 2025 was $474.3 million and $1.7 million, respectively, and was attributable to net purchases of available for sale securities of $372.5 million, cash paid for acquisitions of $99.9 million and capital expenditures of $1.8 million.

Previous wording

Net cash provided by financing activities was $758.9 million and $16.6 million, respectively, for the nine months ended September 30, 2025 and 2024. Cash flows provided by financing activities during the nine months ended September 30, 2025 were primarily attributable to net proceeds from our stock issuances.

Current wording

Net cash provided by financing activities was $3.5 million and $93.6 million, respectively, for the three months ended March 31, 2026 and 2025. Cash flows provided by financing activities during the three months ended March 31, 2026 were attributable to net proceeds for our stock issuances.

Previous wording

There have been no material changes to our critical accounting estimates since our Form 10-K for the year ended December 31, 2024.

Current wording

There have been no material changes to our critical accounting estimates since our Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026 (the “2025 Form 10-K”).