Quantum Computing Inc Announces Full Year 2022 Financial Results
Quantum Computing Inc. (QUBT) has successfully integrated its merger with QPhoton, significantly enhancing its capabilities in quantum hardware production and doubling its size. The company is transitioning from an R&D focus to commercialization, with guidance indicating EBITDA breakeven at $30 million in revenue within two years. In 2022, QCI reported first revenues of approximately $136,000, driven by professional services, amid rising operating expenses of $36.7 million, largely due to increased personnel and merger costs. The firm plans to roll out quantum products including the Entropy Quantum Computer and Quantum LiDAR, aiming for substantial revenue growth within 2023.
- Successful integration of QPhoton merger, doubling company size and enhancing quantum hardware capabilities.
- Guidance indicates EBITDA breakeven at approximately $30 million in revenue within two years.
- First revenue recorded in 2022 of approximately $136,000 with a gross margin of 55%.
- Plans to launch multiple quantum products in 2023, targeting significant revenue growth.
- Operating expenses increased 114% to $36.7 million due to higher salaries, stock-based compensation, and merger costs.
- Net loss for 2022 was $38.6 million, a 38% increase year-over-year.
- Average monthly cash burn increased to approximately $1.46 million, with ongoing costs affecting cash flow.
Quantum Computing Inc completes integration of QPhoton merger, more than doubling the size of the company and establishing its quantum hardware production capability.Quantum Computing Inc. QPhoton merger strengthens QCI as the first pure play public company based on proven photonic quantum technology offering commercially available, ready-to-run anywhere, full-stack quantum products and services, from quantum computing to quantum-based solutions that include quantum cyber security, quantum networks, quantum sensing and quantum imaging.Quantum Computing Inc. begins prototype fabrication of its own quantum photonic microchips and plans to expand into full scale manufacturing to support its quantum technologies in the marketplace.Quantum Computing Inc. transitions from a developing R&D technology company to commercialization at start of 2023.Quantum Computing Inc. offers guidance on revenue breakeven – at approximately in revenue, the company anticipates EBITDA breakeven which it plans to deliver within 2 years.$30 million
"In 2022, we completed our product preparation and have entered the commercialization phase. Combined with QCI's technical success prior to, and as a result of, the merger with QPhoton, we doubled our technical personnel expertise, acquired unique patent assets and IP, and importantly, added photonic hardware and systems capability to our software expertise thereby becoming a full stack, comprehensive quantum enabling company," commented
Full-Year 2022 Financial Highlights
- Revenue during 2022, the company's first revenues, totaled approximately
($136,000 55% gross margin) and is attributed to multi-month, professional services contracts with several commercial and government customers. The services were paid proof of concepts engagements, which QCI utilized as a means to build customer awareness to solve operational needs with quantum-based solutions. The Company enters product commercialization in 2023. - Operating Expenses increased
114% during 2022 to due primarily to an increase in salaries and benefits totaling approximately$36.7 million and non-cash stock-based compensation expense of$3.2 million . The total expenses incurred from the QPhoton merger, which resulted in the Company doubling in size and quantum engineering personnel, included$8.4 million of non-recurring, non-cash, stock-based compensation expense and$9.4 million in SG&A of non-recurring legal, audit and other related fees.$6.6 million
The Company's average monthly cash burn during 2022 was approximately , an increase of approximately$1.46 million over the prior year's average primarily due to additional quantum engineers and other related merger closing costs. The current monthly cash burn is expected to hold steady as spending on the transition from R&D to commercialization is expected to offset the decrease in non-recurring, merger-related costs.$0.9 million - Net loss for full year 2022 was
, an increase of$38.6 million 38% year-over-year, which included in non-recurring merger-related operating expenses and$16.0 million of interest and financing costs, offset by decreases of$2.0 million in interest expense related to issuance of warrants in 2021 and$10.7 million forgiveness of the SBA PPP 2021 loan.$226,000 - Total Assets on
December 31, 2022 were , an increase of approximately$89.3 million over the prior year due primarily to$72 million Goodwill and Intangibles, including IP, from the QPhoton merger. - Cash at year-end 2022 totaled approximately
. As of$5.3 million March 27, 2023 , the Company's current cash totals .$7.5 million - Total Liabilities at year-end 2022 were
compared to$14.4 million the prior year-end. The$1.1 million increase was primarily attributed to$13.3 million of unsecured debt as well as approximately$8.4 million increase in accounts payable and non-cash accrued expenses related to the QPhoton merger, and a$3.6 million Right-of-Use (ROU) operating lease liability expense for the addition of the QPhoton R&D facility.$1.3 million - Debt totaled
as of$8.4 million December 31, 2022 , of which was short-term, compared to no debt at prior year-end 2021.$536,000 - Shareholders' Equity totaled
at year-end 2022, compared to$74.9 million the prior year-end.$16.2 million - Capitalization as of
December 31, 2022 , QCI had approximately 56.0 million shares of common stock outstanding, an increase of approximately 26.8 million shares from the prior year-end 2021. This is almost entirely attributed to the closing of the QPhoton merger.
QCI's fully diluted shares total approximately 74.3 million, including 9.6 million stock options of which approximately70% have vested (average exercise price ), 1.6 million warrants (average exercise price$3.35 ), 5.0 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 exercise, the Company would receive an additional$6.93 in cash.$43.2 million
Subsequent First Quarter 2023 Financial Developments: - The Company secured net proceeds totaling
from the sale of 3.0 million shares through an At-The-Market (ATM) facility managed by$6.4 million Ascendiant Capital .
Full-Year 2022 Operational Highlights
- Merger:
- QPhoton relationship with QCI began in
February 2022 as an exclusive marketing agreement. ByMay 2022 , QCI announced a definitive agreement to merge with QPhoton, led by Dr.Yuping Huang , the Director of the Quantum Science and Engineering Center atStevens Institute of Technology , whose ground-breaking quantum research over the last decade had gained the support fromDARPA , NSF, NASA,DoD , and other prestigious federal funding agencies. OnJune 16, 2022 , the merger closed and by year-end the two companies, who shared a common vision of democratizing quantum computing, were fully integrated and mission aligned. The combination of the two companies creates the first pure play commercially available, ready-to-run anywhere, affordable, full-stack quantum computing products and services designed to be easily deployed (turn-key), and accessible to operate seamlessly alongside classical computing technology. - Leadership Announcements:
Michael C. Turmelle , a public technology company C-Suite executive with extensive background in finance and operations proven to drive innovative go-to-market and product strategies, joins the QCI Board of Directors. Previously, Chairman of Ideal Power; Managing Director ofHayward Tyler (performance-critical electric motors); Chairman ofImplant Sciences Corp ; and CFO & COO of SatCon.- R&D Advancements and Product Launch
Quantum Computing Inc. launched QAmplify, a suite of quantum software technologies that expands the processing power of current quantum computers by as much as 20 times. Currently, there are two primary technology approaches that deliver a wide range of capabilities spanning the current Quantum Processing Unit ("QPU") hardware landscape; gate model (e.g., IBM, IonQ, Rigetti, etc.) and annealing (e.g., D-Wave) quantum computers. Both are limited in the size of problems that can be processed (i.e., the number of variables and complexity of computations). Currently, gate models can typically process from 10-120 data variables, and annealing machines can process approximately 400 variables in a simple problem set. By contrast, it is important to note that QCI's photonic quantum can process over 11,000 simultaneous variables – which are inherently coherent. This capability has proven to solve business relevant problems today in autonomous driving sensor placement, supply chain logistics and energy optimization applications.- QCI launched its subscription service for its Dirac-1 Entropy Quantum Computer (EQC), the Company's first commercially available photonic EQC system to solve real world business problems with over 11,000 variables. Dirac-1 focuses on solving binary optimization problems. The Company plans to launch Dirac-2 during 2023, which will enable customers to run much larger integer-number optimization problems with a 64-qudit machine. QCI offers subscriptions to the EQC at various levels, from several hours per month to a fully dedicated system.
- Important to note that in addition to solving real world problems that other quantum technologies cannot yet address, QCI's photonic quantum computer, the Dirac-1, operates at much lower energy consumption levels than gate model quantum computers or other quantum annealers. For example, running a problem such as the BMW sensor optimization problem (see below) was done both using 96 core (GPUs) which consumed over 500 watts and did NOT yield an optimal solution. QCI ran the same problem on its Dirac-1 to achieve an optimal solution power consumption of less than 80 watts of power – a 6-fold reduction. QCI Dirac-1 is not just better computing performance, it is also more efficient power utilization and at scale would have significant cost and power savings.
- Paid Proof of Concept and Beta-tests
- BMW - Using its Entropy Quantum Computing System QCI Achieved Superior Results in BMW Sensor Optimization Challenge by solving a complex problem consisting of 3,854 variables containing over 500 constraints in 6 minutes.
- VIPC (
Virginia Innovation Partnership Corporation ) 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 Entropy Quantum Computing systems. -
Rabobank – QCI is currently engaged in a project withRabobank to demonstrate multiple strategies for the application of photonic quantum information technologies, including the Dirac-1 to detect fraudulent banking transactions. QCI's Entropy Quantum Computer system and its application to machine learning processes have the potential improve fraud detection techniques through faster computation and increased accuracy. - The Company is engaged in a number of beta-tests to demonstrate the effectiveness of its Dirac-1 to include:
- 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 prediction using the Reservoir Quantum Computer
- General Interest
June 27, 2022 ,Quantum Computing Inc announced inclusion in the Russell Microcap Index.- Subsequent First Quarter 2023 Operational Developments and Outlook
New Subsidiary Announcement Quantum Computing Inc. launched a wholly owned subsidiary,QI Solutions, Inc. , to deliver quantum products and services to the US government and defense markets. Strategically headquartered inArizona , the new initiative will be headed by Sean Gabeler, a 30-yearUS 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 to test quantum photonic sensing solutions for monitoring climate change. Under 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 Announcement
- 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 a contract lab facility at
CUNY inNew York City . The recent US government's announcement of the CHIPs and Science Act, funding to re-shore and develop new microchip technologies to increase and maintain US competitiveness, offers QCI the opportunity to obtain US government funding for its quantum photonic chip development. QCI and Qi Solutions are aggressively pursuing this opportunity and anticipates funding in 2023 to establish its fabrication facility.$52 billion - Product Roadmap and Product Development
- The Company continues to develop its Dirac-2 Entropy quantum computer to focus on integer-based problems using QUDITS (n=0-63 variables) for a 2023 launch.
- The Company continues to develop its Reservoir Quantum Computer (RQC) which will address machine learning and AI problems for a 2023 launch.
- The Company finalized its production of its Quantum Random Number Generator (uniform, arbitrary and correlated) to apply to cyber security and financial simulations for launch in 2023.
- The Company continues to develop related quantum photonic capabilities for quantum imaging, quantum sensing, and quantum networks for commercialization in 2023.
Quantum Workforce Development – key to developing and applying quantum technologies across industries is the development of a prepared workforce capable of both developing quantum technologies as well as applying the technologies to real world problems. QCI is dedicated to developing the US quantum workforce by partnering with educational institutions at the university level but also at the community college and high school levels. QCI has developed curriculum to teach students in quantum technologies to enable US students to move into this new technology to maintain a competitive US workforce.- Leadership Announcements
- 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 withBall 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 leadQCI's Technical Advisory Board as the Company commences product sales. A key role of theTechnical Advisory Board is to help maintain a balance between competitive, technological development and profitable growth. - Dr.
Brian LaMacchia , a recently retired Distinguished Engineer and head of the Security and Cryptography team withinMicrosoft Research , has joined theTechnical Advisory Board . - Guidance
- The Company has completed its discovery and research phase and is now transitioning to commercialization. QCI has developed and released several products in late 2022 and into early 2023 with a number of additional product rollouts planned this year. As the Company ramps up its sales and marketing efforts, it expects revenues to gradually increase in the first half of the year and progressively accelerate during the second half of 2023.
- The Company estimates that it achieves EBITDA breakeven at roughly
in annual revenue and projects cashflow breakeven within 2 years.$30 million
For additional information on the company's suite of solutions, please visit our website or contact our team directly.
About
QCI is a full-stack quantum software and hardware 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 is on a path to delivering an accessible and affordable full-stack solution with real-world industrial applications, using quantum entropy, which can be used anywhere and with little to no training. QCI's experts in finance, computing, security, mathematics and physics have over a century of experience with complex technologies ranging from leading edge supercomputing to precision sensors and imaging technology, to the security that protects nations. For more information about QCI, visit www.quantumcomputinginc.com.
About Quantum Innovative Solutions
QIS, a wholly owned subsidiary of
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
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
*** Financial Statements Follow ***
Condensed Consolidated Balance Sheet (audited) | ||||||||
December 31, 2022 | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ 3,794,734 | $ 16,738,657 | ||||||
Account receivable | 12,774 | - | ||||||
Prepaid expenses | 224,302 | 482,998 | ||||||
Other current assets | 42,105 | - | ||||||
Subtotal current assets | 5,587,647 | 17,221,855 | ||||||
Fixed assets (net of depreciation) | 975,169 | 41,348 | ||||||
Other Assets | ||||||||
Lease right-of-use | 1,327,746 | 18,084 | ||||||
Security deposits | 60,271 | 3,109 | ||||||
Intangible assets | 22,223,725 | - | ||||||
| 59,125,773 | - | ||||||
Subtotal Other assets | 82,737,515 | 21,193 | ||||||
Total assets | $ 89,300,331 | $ 17,284,196 | ||||||
Liabilities and Stockholders' Equity (Deficit) | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ 871,887 | $ 464,870 | ||||||
Accrued expenses | 3,559,981 | 478,505 | ||||||
Dividends payable-preferred | 219,844 | 117,454 | ||||||
Loans payable-short term | 535,684 | - | ||||||
Lease liability | 1,357,924 | 18,084 | ||||||
Other current liabilities | - | 3,385 | ||||||
Current liabilities - subtotal | 6,545,320 | 1,082,298 | ||||||
Long term liabilities | ||||||||
Loans payable-long term | 7,632,998 | - | ||||||
Accrued interest – long term | 225,282 | - | ||||||
Long term liabilities - subtotal | 7,858,280 | - | ||||||
Total Liabilities | 14,403,600 | 1,082,298 | ||||||
Stockholders' Equity (Deficit) | ||||||||
Common stock, | 5,596 | 2,916 | ||||||
29,156,815 shares issued and outstanding as of | ||||||||
Preferred stock, Authorized; 1,500,004 and 1,545,459 shares issued and outstanding as of | ||||||||
And | ||||||||
Authorized, 0 and 0 shares issued and outstanding as of | 150 | 154 | ||||||
Additional paid-in capital | 151,163,909 | 67,396,618 | ||||||
APIC-Beneficial Conversion Feature in Equity | 4,898,835 | 4,898,835 | ||||||
APIC-Stock Based Compensation | 38,816,022 | 25,297,456 | ||||||
Accumulated deficit | (119,987,781) | (81,394,081) | ||||||
Total Stockholders' Equity (deficit) | 74,896,731 | 16,201,898 | ||||||
Total Liabilities and Stockholders' Equity | $ 8 9,300,331 | $ 17,284,196 |
Statements of Operations | |||||
(Audited) | |||||
Twelve Months Ended | |||||
2022 | 2021 | ||||
Total revenues | $ 135,648 | $ - | |||
Cost of revenues | 60,934 | - | |||
Gross profit | 74,714 | ||||
Operating expenses | |||||
Salaries and Benefits | 4,326,733 | 2,488,877 | |||
Consultants | 1,278,170 | 1,076,901 | |||
Research & development | 4,561,794 | 2,585,796 | |||
Stock based compensation | 17,761,467 | 9,401,345 | |||
Selling General and administrative - other | 8,725,892 | 1,577,174 | |||
Total operating expenses | 36,654,056 | 17,130,093 | |||
Loss from operations | (36,579,342) | (17,130,093) | |||
Other income (expenses) | |||||
Interest income – Money Market | 46,891 | 7,378 | |||
Misc. Income – Government Grants | - | 218,371 | |||
Interest expense – Promissory Notes | (225,282) | - | |||
Interest Expense - Warrants | - | (10,715,799) | |||
Interest expense – Preferred dividends | (889,219) | (117,454) | |||
Interest Expense – Financing expenses | (946,748) | (161,250) | |||
Other income (expenses), net | (2,014,358) | (10,768,754) | |||
Income tax provision | - | - | |||
Net loss | $ (38,593,700) | ||||
Per-share data | |||||
Basic and diluted loss per share | $ (0.69) | $ (0.96) | |||
Weighted average number of common shares outstanding | 55,963,334 | 29,156,815 |
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