Quantum Computing Inc. Reports Third Quarter 2024 Financial Results

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Nov 06, 2024, 16:05 ET

HOBOKEN, N.J., Nov. 6, 2024 /PRNewswire/ -- Quantum Computing Inc. ("QCi" or the "Company") (Nasdaq: QUBT), an innovative, integrated photonics and quantum optics technology company, today released financial results for the three and nine-month periods ended September 30, 2024.

Dr William McGann, Chief Executive Officer of QCi, commented, "Throughout the third quarter of 2024, we continued to make strategic progress across multiple fronts. Our ongoing development of our U.S.-based Thin Film Lithium Niobate (TFLN) foundry in Tempe remains on schedule and we are in the final stage of commissioning, marking a critical step toward scaling our capabilities and expanding into new markets. Our recent sales efforts, led by new leadership, have begun to translate into tangible results as we progress on securing offtake agreements for our chips and orders for our machines. We are excited by the interest we've seen from potential partners and customers, and we look forward to delivering on the promise of high-performance photonics technology in early 2025. I remain confident in our team's ability to execute on our vision of delivering accessible, affordable, and scalable quantum solutions, and I am excited about the opportunities ahead."

Third Quarter 2024 Financial Highlights

Third quarter 2024 revenues totaled approximately $101,000 (9% gross margin) compared to $50,000 (52% gross margin) generated in the third quarter 2023. The increase in revenues and decrease in gross margin was primarily the result of progress executing our contract with Johns Hopkins University to deliver a customized quantum LiDAR prototype.
Third quarter 2024 operating expenses totaled $5.4 million compared to the previous year's second quarter operating expenses of $6.6 million. The 18% period-over-period decrease is primarily a result of the Company's disciplined strategy to minimize general and administrative expenses, including reductions in both employee and consultant costs.
The Company reported a net loss attributable to common stockholders of $5.7 million, or $(0.06) per basic share for the third quarter of 2024, compared to a net loss attributable to common stockholders of $7.1 million or $(0.10) per basic share for the same period of the previous year.
Total assets at September 30, 2024 were $76.8 million, increasing from $74.4 million at December 31, 2023. Cash and cash equivalents at September 30, 2024 increased by $1.0 million to $3.1 million from year-end 2023. During the third quarter, the Company raised net proceeds of $7.0 million in a secured convertible debt financing.
Total liabilities at September 30, 2024 were $10.9 million, an increase of approximately $5.3 million compared to year-end 2023, driven primarily by the Company's aforementioned secured convertible debt financing, offset by repayment of the Company's unsecured debt financing in the first quarter 2024.
As of September 30, 2024, the Company had shareholders' equity totaling $60.4 million.

Third Quarter 2024 Operational Highlights

Extension of CRADA with Los Alamos National Laboratory: QCi renewed its Cooperative Research and Development Agreement (CRADA) with Los Alamos National Laboratory (LANL) to further explore the capabilities of the Dirac-3 quantum optimization machine. This extension will support the development of advanced quantum solutions in fields such as energy grid management, social networks, and telecommunications.
Progress on TFLN Chip Foundry: QCi advanced to the final phase of commissioning its U.S.-based TFLN foundry in Tempe, Arizona. The facility remains on track to begin production in early 2025, positioning QCi as a leader in the high-performance, TFLN-based optical chip market.
Key Industry Engagements: QCi actively participated in major industry events, including the Quantum World Congress 2024 and Quantum.Tech Europe, where the Company presented the capabilities of its Dirac-3 platform and began initial conversations on its planned foundry services. These engagements raised the profile of QCi's technology among key government and commercial stakeholders, driving further interest and partnerships.
Continued Development of Entropy Quantum Computing Solutions: The Company's Dirac-3 platform continued to gain traction, with benchmark studies conducted in collaboration with National Laboratories such as Oak Ridge and Lawrence Berkeley to demonstrate its efficiency in solving complex computational problems.
Progress with NASA: Subsequent to the end of the quarter, QCi secured a fifth task order with NASA, focused on developing quantum remote sensing technology for spaceborne LiDAR missions. This contract aims to reduce the cost of climate-monitoring missions and enhance data collection capabilities, reinforcing QCi's strategic partnership with NASA.

Earnings Conference Call

The Company will host a conference call on Wednesday, November 6, 2024, at 4:30 p.m., to discuss its financial results for the third quarter of 2024. To access the live webcast of the conference call, log onto the QCi website at https://quantumcomputinginc.com/ and click on the Investor Relations page. Investors may also access the webcast via the following link:
https://www.webcaster4.com/Webcast/Page/3051/51497

To participate in the call by phone, dial (888) 506-0062 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0011. Callers should use access code: 894466.

A replay of the teleconference will be available until November 20, 2024, and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 51497

About Quantum Computing Inc.

Quantum Computing Inc. (QCi) (Nasdaq: QUBT) is an innovative, integrated photonics company that provides accessible and affordable quantum machines to the world today. QCi products are designed to operate at room temperature and low power at an affordable cost. The Company's portfolio of core technology and products offer unique capabilities in the areas of high-performance computing, artificial intelligence and cybersecurity as well as remote sensing applications.

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. These forward-looking statements, generally identified by terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "intends," "goal," "objective," "seek," "attempt," "aim to," or variations of these or similar words, involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Those statements include statements regarding the intent, belief or current expectations of QCi 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, including the timing of commencing production at our TFLN fabrication facility, and the outcome of ongoing collaborations and demonstration projects with certain U.S. government agencies, and that actual results may differ materially from those contemplated by such forward-looking statements. Except as required by federal securities law, QCi undertakes no obligation to update or revise forward-looking statements to reflect changed conditions.

IMPORTANT NOTICE TO USERS (summary only, click here for full text of notice): All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information. All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our Forms 10-Q and 10-K.

QUANTUM COMPUTING INC. Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value data)

	September 30,		December 31,
	2024		2023
Assets
Current assets
Cash and cash equivalents	$	3,064	$	2,059
Accounts receivable		63		65
Inventory		241		73
Loans receivable, net		306		279
Prepaid expenses and other current assets		238		180
Total current assets		3,912		2,656
Property and equipment, net		5,826		2,870
Operating lease right-of-use assets		1,622		1,051
Intangible assets, net		9,748		12,076
Goodwill		55,573		55,573
Other non-current assets		129		129
Total assets	$	76,810	$	74,355

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	923	$	1,462
Accrued expenses		539		639
Financial liabilities, net of issuance costs		-		1,925
Deferred revenue		48		-
Other current liabilities		921		786
Total current liabilities		2,431		4,812
Financial liabilities, net of issuance costs		7,180		-
Operating lease liabilities		1,297		840
Total liabilities		10,908		5,652
Mezzanine equity		5,463		-
Stockholders' equity
Preferred stock, $0.0001 par value, 1,550 shares Series A Preferred authorized; 993
thousand and 1,490 thousand shares issued and outstanding as of September 30,
2024 and December 31, 2023, respectively; 3,080 thousand shares of Series B
Preferred Stock authorized; no shares issued and outstanding as of September 30,
2024 and December 31, 2023		-		-
Common stock, $0.0001 par value, 250,000 thousand shares authorized; 94,416
thousand and 77,451 thousand shares issued and outstanding as of September 30,
2024 and December 31, 2023, respectively		9		8
Additional paid-in capital		209,675		200,635
Accumulated deficit		(149,245)		(131,940)
Total stockholders' equity		60,439		68,703
Total liabilities and mezzanine and stockholders' equity	$	76,810	$	74,355

QUANTUM COMPUTING INC. Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share data)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
			(Restated)				(Restated)
Total revenue	$	101	$	50	$	311	$	283
Cost of revenue		92		24		233		131
Gross profit		9		26		78		152
Research and development		2,244		2,328		6,560		6,977
Sales and marketing		363		584		1,243		1,397
General and administrative		2,840		3,725		9,298		11,442
Operating expenses		5,447		6,637		17,101		19,816
Loss from operations		(5,438)		(6,611)		(17,023)		(19,664)
Non-operating income (expense)
Interest and other income		70		126		180		219
Interest expense, net		(307)		(369)		(462)		(1,334)
Change in value of warrant liabilities		-		13		-		384
Loss before income tax provision		(5,675)		(6,841)		(17,305)		(20,395)
Income tax provision		-		-		-		-
Net loss		(5,675)		(6,841)		(17,305)		(20,395)

Less: Series A convertible preferred stock dividends		-		(215)		-		(646)
Net loss attributable to common stockholders	$	(5,675)	$	(7,056)	$	(17,305)	$	(21,041)

Loss per share – basic and diluted	$	(0.06)	$	(0.10)	$	(0.19)	$	(0.33)
Weighted average shares used in computing net loss per
common share – basic and dilutive		93,048		71,588		89,063		64,246