Thank you, and I want to welcome everyone to the Quantum Computing Inc. Third Quarter 2025 Shareholder Update Call.

Before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements based on our current expectations and projections regarding future events and are subject to change based on various important factors. In light of these risks, uncertainties, and assumptions, you should not place undue reliance on these forward-looking statements, which speak only as of the date of this call.

For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission. On the call today, we have Dr.

Yuping Huang, Interim CEO and Chairman, and Chris Roberts, CFO. The team will provide an update on the business, followed by a question-and-answer session.

With that, I would like to turn the call over to management. Please go ahead, Yuping.

Thank you. Thank you, everyone, for joining us today to hear about QCI's progress in the third quarter of 2025.

The past few months have been pivotal for our company. We ended the quarter with a strengthened balance sheet, a growing portfolio of commercial relationships, and a clear disciplined strategy for scaling our technology.

To date in 2025, we have raised over $1.5 billion in capital, and we now have the resources to execute thoughtfully on our long-term vision, putting quantum technology into the hands of people. In the third quarter, we raised $500 million, and subsequent to the quarter, we raised another $750 million.

These raises put us in a very strong position to drive our roadmap forward and make strategic investments in engineering, manufacturing, and sales. As many of QCI's mission has always been centered around building quantum systems that are practical, scalable, and accessible.

We're not just developing quantum technologies for laboratories, we are working to make quantum useful for a broader community of industries and innovators, with the ultimate goal of having our technology as ingrained in society as cell phones. This is what sets QCI apart.

While many quantum players remain focused on theoretical advances or systems that require complex cryogenic environments, our integrated photonic approach enables room-temperature operation, compact form factors, and energy-efficient performance. These advantages not only reduce the cost and complexity of deployment, but also make it possible to scale quantum solutions to a wide range of real-world settings, from aerospace and defense to telecommunications, finance, and data security.

As the technology matures, we believe the key differentiator will not be who can build the most powerful quantum prototype in isolation, but who can scale quantum reliably and affordably. The challenge ahead is one of engineering and manufacturing execution, and that's where QCI's focus lies today.

Our long-term goal is to move from prototype and small-batch manufacturing toward volume production, and we see that transition taking shape by the end of this decade. To get there, our current three-year roadmap is focused on refining our processes, scaling small-batch production, and expanding our team and facility to position QCI for industrial-scale output.

In other words, the technology is there. Our quantum machines and photonic chips have been validated across multiple use cases.

The next step is to scale the engineering and manufacturing behind them, and we now have the team, resources, facility, and a plan to make that happen. Let me take a moment to highlight some of the key updates from the third quarter.

First, on the commercial front, we continue to see growing adoption of our quantum and photonic solutions across research, enterprise, and government sectors. During the quarter, we recorded revenue from our ongoing NASA LiDAR initiative, which uses our Dirac-3 quantum optimization machine to remove solar noise from space-based LiDAR data.

This project represents a significant technical achievement and underscores the real-world value of QCI's quantum computing technology for scientific and environmental applications, as well as our initiatives to drive strong relationships within government programs. We also saw meaningful momentum in our commercial engagements.

Following the sale of our emuCore reservoir computing device earlier this year to a global automotive manufacturer, in the third quarter, we completed a transaction with a major U.S. financial institute, making another important milestone in validating our quantum AI and security platforms in real-world settings.

Our foundry operations in Tempe, Arizona, also continue to progress. As we have shared previously, this facility, also known as Fab-1, is a small-scale manufacturing site designed to qualify processes and support early customer programs in thin-film lithium niobate photonic chips.

This is an important first step in our broader manufacturing strategy. Since launch, our team has been refining the production line, expanding our operations staff, and building relationships with early customers across research, government, and commercial sectors.

These engagements help us fine-tune both process quality and device yield. Importantly, we are already in the early stage of planning for Fab-2, which we expect to begin developing over the next three years.

Fab-2 will be designed to support higher-volume manufacturing and serve as a cornerstone for scaling production to meet growing demand in telecommunications, sensing, and quantum information systems. As we advance this manufacturing strategy, our hiring efforts are ramping accordingly.

Over the past quarter, we have added key technical and operations staff to strengthen our execution capabilities, and we expect that trend to continue as we prepare for higher production volumes. We have also continued to broaden awareness of QCI's capabilities within the quantum and photonics communities.

Over the past several months, we have been active participants at multiple industry events and conferences, presenting our work and engaging both public and private sector partners. Those events include the IEEE International Conference on Quantum Computing and Engineering, the NYC Quantum Computing Meetup, Quantum World Congress, the Dutch Photonics event, the 51st European Conference on Optical Communication, Quantum Tech Europe, and the Quantum Innovation and Readiness Forum.

We also recently joined the Quantum Economic Development Consortium and the Consumer Technology Association, aligning QCI with expanding network of technology leaders and innovators. This memberships enhance our visibility and influence in shaping the future of quantum computing, cyber, photonics, and AI-driven solutions across the consumer technology landscape.

In September, we deepened our thought leadership presence in the photonics and AI community through a webinar hosted by Optica titled Photonic Machine Learning for Time Series Problems. The session highlighted how our emuCore reservoir computing platform and next-generation photonic architecture address memory and power consumption bottlenecks in modern AI workloads, and underscored our thin-film lithium niobate foundry capability for high-performance photonic systems.

This engagement further expands our credibility in both academic and industry circles, and underscores QCI's increasing visibility as a practical quantum and photonics innovator. We have also been pleased with the increasing level of inbound interest from prospective customers and collaborators across academia and industry.

The conversations we are having today reflect the momentum building behind integrated photonics and quantum-ready devices, where QCI has a clear first-mover advantage. QCI's approach positions us uniquely for the next phase of industry evolution.

While the broader quantum computing sector continue to grapple with scalability and stability challenges, our integrated photonics platform operates at room temperature with significantly lower size, weight, and power, and cost requirement, the so-called SWaP-C advantages. This advantages are becoming increasingly relevant as global energy constraints and the computational demands of artificial intelligence push existing infrastructure to its limit.

We believe that energy-efficient, room-temperature quantum devices represent a critical piece for the next generation of computing, and QCI is positioned to deliver such solutions at scale. Over the next three years, our roadmap priority is small-scale, high-value manufacturing as we refine processes, demonstrate performance across customer application, and establish supply chain and design partnerships.

In parallel, we will be developing the foundation for Fab-2, which will enable volume manufacturing and allow us to bring quantum-enabled devices into wider use across multiple sectors. The quantum era is unfolding faster than most predicted, and our team is determined to ensure QCI remains at the center of transformation, delivering technologies that make quantum practical, scalable, and accessible to the world.

With that, I will now turn the call over to our Chief Financial Officer, Chris Roberts.

Thank you, Yuping. Now, let's review the financial results from the quarter.

Revenue during our third quarter totaled approximately $384,000, compared to $101,000 in the same period last year. The increase in revenue was primarily due to increases in the number of, size of, and level of effort on research and development services contracts and custom hardware contracts.

We also started to recognize some revenue for cloud-based access to the Dirac-3 quantum optimization system during the third quarter. Looking ahead, the company continues to build a healthy pipeline of sales and partnership opportunities, which we expect will support future growth as customer adoption of our products and technologies continues to increase.

Our gross margin for the third quarter increased to 33%, compared to 9% in the third quarter of 2024. However, it's important to keep in mind that with a small number of active contracts, some of which involve custom design work, gross margin is likely to be variable from one period to the next.

As Yuping mentioned earlier, we have been active in the capital markets and substantially strengthened our balance sheet during the third quarter, closing on a $500 million equity financing in September 2025. As a result, we entered the third quarter with cash and cash equivalents of $352 million and investments of $460 million on our balance sheet at the end of the quarter.

After the end of the third quarter, we also closed on an additional $750 million financing in October. As a result of the recent financings, we now have substantial resources to implement our TFLN fabrication and quantum machine development initiatives.

In addition to organic growth plans, a key element of our long-term strategy is to evaluate acquisition opportunities that could help us accelerate our vision of putting quantum technology in the hands of people. Operating expenses for the third quarter totaled $10.5 million, compared to $5.4 million in the same quarter last year.

The increase in operating expenses is the result of substantial growth in personnel for research and development, engineering, manufacturing, sales and marketing, and administration as we position the company for long-term growth. We are scaling our organization across the board to support this expansion plan, including all functional areas of the company.

As a result, SG&A expense is expected to grow in the near term as we invest in the necessary resources to advance our technology and execution capabilities. The company reported net income of $2.4 million for the third quarter, or approximately 1 cent per share, compared to a net loss of $5.7 million in the third quarter of 2024.

The increase in net income this quarter was primarily due to a gain of $9.2 million from the mark-to-market of a derivative liability plus interest income of $3.5 million. For the nine months ended September 30th, 2025, the company reported a net loss of $17.1 million, or 12 cents per share, compared to a net loss of $17.3 million, or 19 cents per share, in the first nine months of 2024.

As of September 30th, 2025, total assets stood at $898 million, up from $154 million at year-end 2024. Since the end of 2024, cash and cash equivalents have increased by $273 million to $352 million, and total investments have increased by $460 million.

Total liabilities at the end of the third quarter were $20 million, which is a decrease of approximately $26 million compared to year-end 2024. Now, this decrease in liabilities is driven primarily by a $25.8 million decrease in the derivative liability related to the QPhoton merger warrants.

Stockholders' equity rose to $878 million at the end of the third quarter, which also shows our strengthened financial position. Now, it's my pleasure to turn the meeting back over to Yuping.

Thank you, Chris. As we move into the final months of 2025, I wanted to take a moment to thank our employees, partners, and shareholders for the continued support.

The technological and strategic progress we have made this year positions QCI for what I believe will be a defining period ahead. Our technology is maturing rapidly, and our focus remain on scaling our engineering and manufacturing capabilities, advancing customer programs, and continue to strengthen our relationships across government, industry, and academia.

With a solid balance sheet, a growing team, and a clear roadmap, we are well positioned to drive this next phase of growth. Thank you for joining us today and for your continued confidence in our mission.

With that, we will now open the call for questions. Operator, please go ahead.

Hey, guys. Thanks for taking my questions.

A few here, kind of scatter around a couple different topics. First one is going to be, I noticed that press release about POET Technologies.

I was wondering if you could give maybe a little bit more detail on outside of just what was said in the press release and maybe think about sort of the long-term opportunity with them, and then maybe some other partnerships you have in the pipeline similar to that POET Technologies.

Sure. Thanks, Max.

On that front, we have actually been very actively talking with multiple parties on using our thin-film lithium niobate technology for the next generation high-speed transceiver technology. As you probably know, the industry is recognizing thin-film lithium niobate as the next-generation platform for much higher-speed internet.

This collaboration with POET is one of the agreement that we have discussed and has come to flourish, and we look forward to work with them, and also with others to explore thin-film lithium niobate for the telecom and the datacom applications at large.

Okay. My next one is just sort of around that top five US bank you guys secured, or purchase order you guys secured in the quarter around quantum security solutions.

Can you give some other sort of use cases you guys are having discussions with other large opportunities, I guess, or other large firms outside of just security solutions?

Yes. In fact, we have been talking with other firms, including the potential of putting our technology on photonic integrated chips, and so that we can really really shrink the size of our current quantum communication systems, our quantum PUF chips, and our quantum random number generators to an inch square chip, so that there are many sectors including the wireless or internet providers, they can easily adopt.

We have been in discussion also with some potential partners to see if we can apply our quantum communication technology to the aerospace platform, so that can solve the issue of the long-term quantum internet challenge.

Okay. Then, Chris, I think you mentioned inorganic opportunities around M&A, and sort of how have valuations and multiples trended in that space, as well as maybe adding on sort of the end markets or technologies you guys plan on going after when it comes to M&A?

The M&A market continues to be volatile and valuations depend in good part about how the stock market's going. Right now it's very unsettled.

We are looking actively for acquisition candidates and evaluating them as they come up. Nothing formal we can announce at this time, but we are working very hard in that direction.

As I mentioned before, we're looking at M&A as a way of doing two things. One is to acquire customers and revenue and product lines that can be moved forward and migrated forward with our technologies.

We're also looking to fill in some key aspects of our own technology roadmap so we can accelerate our commercialization. Does that help to answer your question, or did you have a different point in mind?

Nope, that's great. Thanks for taking my question, guys.

You're welcome, Max. Let me just add to what Yuping said about the POET project.

It's a perfect example of why we built Fab-1, because we have the only fabrication facility in the U.S. that can work with thin-film lithium niobate, and this gives us the ability to do this type of advanced prototyping of product concepts that we can then, if we're successful, move forward into Fab-2 and produce in collaboration with a firm like POET for a larger market.

This is a real validation of the idea behind the investment in Fab-1.

Okay. No, perfect.

Thanks, guys. Oh,

you're welcome, Max. Thanks for joining the call.

Hey, gentlemen. Congrats on all the progress here.

Maybe a couple quick ones for Chris first. Can you tell us, what is the remaining CapEx for Fab-1, roughly?

Fab-1 is a good question. Fab-1 is pretty much built out.

It is built out. We're always looking at new equipment, but Yuping, you might be a better one to answer on that.

I don't have anything I know of that's lined up near term.

Yep. Right now, Troy, Fab-1 is fully operational, and we actually are making chips to deliver the 10-plus foundry service orders that we have received so far.

We do have plan to install a very high-speed measurement equipment in the foundry so that we can quickly test the property of high-speed electro-optical modulations on the chip. There we are looking at additional CapEx of about $2 million to add this very high-speed testing equipment.

All right, it seems pretty modest. With respect to Fab-2, building that out, would you guys, obviously hopefully producing your own PICs, but is the idea to outsource capacity to other people that need thin-film lithium niobate capabilities?

Yes. We are scoping Fab-2 to both support our own quantum machine manufacture, and as well as to serve the increasing demand on thin-film lithium niobate chips as the industry is becoming more and more interested due to the many nice property of this interesting material for different applications beyond quantum.

Troy, our goal there is that, we hope that we can quickly establish a Fab-2 that can make hundreds to hundreds of millions of chips per year. That will both support our own need for our quantum machines, and also substantially send it from others on the thin-film lithium niobate manufacturing.

Great. Okay.

How about a quick one for Chris? Could you let us know what the share count will be exiting '26?

At the moment, we have 224 million shares outstanding and 250 million shares authorized. We're not expecting to do another financing, we'll probably end up with another couple of million shares potentially if options are exercised, but it would not be a large number.

Is that what you're asking? Does that include the offering that just happened?

If you include the offering that happened here in Q4, and you have 124... Yes, including the $750 million dollar offering that was included in October, we have 224 million shares outstanding.

There are several million outstanding warrants and stock options, which I have no way of predicting when they may be exercised, but that gives you a sense of the range of possible outcomes at the end of '26. Right.

For a share count that we should be modeling, it should be that 224 number for Q4? 224 for the Q4, yes, that's probably the best number I can provide.

The end of '26, that's a little harder because it really depends on market conditions and...

Yeah. No, that's good.

How about if I could toss in one more for Yuping here? I guess I'd love to hear stats on your QPU with respect to qubit count or fidelity, or maybe it's too early to talk about that now and maybe correct me if I'm wrong, but is the near-term opportunity more in the sensing and other applications that you guys are targeting right now versus kind of QPU-type sales?

Sure, I can talk about both. On the QPU front, in fact, we have been upgrading our current Dirac-3 system, where some of our external users, they actually start to find a real nice advantage over classical computers.

We have some pretty exciting results there. In the meanwhile, we are actually making very good progress in building the next version of that, which based on the same architecture and built for the optimization, but so we increase the speed by orders of magnitude.

We are making pretty good progress there for our quantum optimization machine. In the meanwhile, so as I reported last time that so we do have the roadmap of going to gate-based machines.

We have done a lot of theoretical work and proof of concept in the lab. We just got started on the hardware development, because the gate machine requires very high-quality thin-film lithium niobate chips.

As you know that, we just finished the construction of Fab-1 in March, and over the summer, we developed the recipe and set up the processes, and so the fun has just started. With that, we will quickly get to the hardware of the gate-based machine.

On the quantum sensor part, yes, and as we reported, we did sell one of our quantum photonic vibrometer, and so people are using it for different applications. We also sold a quantum communication system to a U.S.

bank, as we reported, and we have also made some sales on the AI front, and we continue to engage the community on thin-film lithium niobate, and we have recorded more sales on foundry services.

Gotcha. All right, guys.

Keep up the good work.

Thanks, Troy. Appreciate you calling in.

Thank you, Troy. Thank you.

Your next question is coming from John McPeake from Rosenblatt Securities. Your line is live.

Hey, guys. Congratulations, Dr.

Yuping and Chris, on the momentum in the business and the bank deal. Thank you, John.

Thank you. Recently, there's been some new implementations of Shor's algorithm that suggest that pretty soon we're going to be able to crack RSA 2048.

I guess when I say soon, we're talking about years, at least kind of over the career of a CISO at a large company so they can't just ignore it. I'm just wondering if that might be increasing the pipeline of potential security deals, particularly in the financial sector.

Yes, definitely. John, one thing that we all have to keep in mind that, if somebody somewhere has a very powerful quantum computer to crack our passwords, he or she will not make a public announcement on that, right?

We have to really deal with the cyber threat. We really have to think ahead and act fast and plan ahead.

Far, as I know, the only truly secure cyber solution against the attack of the quantum computers would be using quantum itself to secure our internet. At QCI, we are leveraging over 10 years of R&D work in quantum communication, quantum encryption, quantum authentication.

Now, we are pushing our engineering effort to put our technology in practical footprint. In fact, we have designed our technology that so it is fully compatible with existing fiber-based telecom infrastructure.

In order to use our technology, you can just buy some end units from us and hook onto the fiber portal in your garage, and you will be able to enjoy quantum-secured internet, and so you don't need to worry about if somebody has already a powerful quantum computer or not. Yes, John, in short to your question, I think it is time.

It is really, really time for us to start to adopt quantum-secured internet solutions.

Thank you. On the other side of the business, on the optimization, I guess the Dirac-3 just starting to have revenues recognized this past quarter, how is that market trending right now?

Is there more awareness of these solutions for optimization?

Yes, yes. I would like to put it in this way.

Quantum computing is a pretty disruptive technology, and just like how other disruptive technologies are commercialized, we must address three hurdles before we can see wide adoption and very meaningful revenue. The first is that the customers really need to know and understand at some levels the technology itself.

The second is that so they will need to see a clear path to be able to integrate and adopt the technology with their existing systems and solutions. The third is that we, as the technology providers, we must lower the entry level so that people can quickly get to the technology.

That includes so we make the device very compatible, we have very easy user interface, and so the price tag is reasonable. For the first one, we are ramping up our marketing communication, including pushing out more educational material on website, publishing open access journals, so that people can find the material to know and to understand our technology.

For the second, we are actually building and expanding our applications team to explore and help with potential customers to adopt our technology. Now, for the third, we are actually in the phase of transitioning ourselves from a technology innovation company to volume production so that we can reduce the unit cost of our quantum computing products.

Those are the three three measures that we are undertaking now in order to quickly get our technology into the hands of people.

Thank you, that's helpful.

Thank you, John. Thank you.

Congratulations on all the progress. I was just curious about international opportunities.

It seems like most of your focus now is in the U.S. Do you have plans to focus on international opportunities?

Yes. Yes.

In fact, quantum is also very hot outside U.S. We have been very active in looking for opportunities either partnering or providing our products and services to international institute.

For example, we actually sold our emuCore system, which is a AI device at edge, and we sold our vibrometer to TU Delft in Europe, and we are working with a distributor in South Korea to explore the market there. On our Dirac-3, we actually have users from Singapore.

Great. Thanks for answering my questions, and I wish you guys good luck.

Thank you.

Thanks, Ed.

Thank you, Ed.

Thank you, everyone, for joining and participating in today's call. I encourage you to follow us on our social media channels, including LinkedIn, where we regularly post updates and insights into our business and technology.

Should you have any questions, please do not hesitate to reach out to our investor relations. Have a great rest of your day.

Thank you, everybody.