Quantum Computing Inc. Reports Second Quarter and First Half 2024 Financial Results
HOBOKEN, N.J., Oct. 2, 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 six-month periods ended June 30, 2024, which contain restated financial results for the quarterly periods ended June 30, 2023.
Dr William McGann, Chief Executive Officer of QCi, commented, "During the first half of 2024, we strengthened our position in the quantum computing landscape. Our progress on establishing our U.S.-based Thin Film Lithium Niobate (TFLN) foundry is proceeding well, marking a critical step toward positioning QCi as a leader in the growing optical chip market. Our partnerships continued to evolve, highlighted by our successful product sale to Johns Hopkins University and ongoing collaboration with NASA. I'm also pleased to announce that with the filing of these financial results, we have taken key steps to regain compliance with Nasdaq and are now caught up with our Securities and Exchange Commission (SEC) reporting requirements. Like some other companies that experienced delays due to forced auditor transitions, we've navigated this process effectively while ensuring adherence to best practices. We are now well-positioned to continue advancing our mission."
Second Quarter 2024 Financial Highlights:
- Second quarter 2024 revenues totaled approximately $183,000 (32% gross margin) compared to $112,000 (54% gross margin) generated in the second quarter 2023. The increase in revenues was due to increased contractual sales. The decrease in gross margin was nearly entirely the result of revenue in the current period being primarily comprised of customized research and development as compared to consulting services revenue in the prior period.
- Second quarter 2024 operating expenses totaled $5.3 million compared to the previous year's second quarter operating expenses of $7.0 million. The 24% period-over-period decrease is primarily a result of the Company's disciplined strategy to minimize general and administrative expenses as well as net reductions in stock-based compensation.
- The Company reported a net loss available to common stockholders of $5.2 million, or $(0.06) per basic share for the second quarter of 2024, compared to a net loss available to common stockholders of $7.6 million or $(0.12) per basic share for the same period of the previous year.
- Total assets at June 30, 2024 were $76.0 million, increasing from $74.4 million at December 31, 2023. Cash and cash equivalents at June 30, 2024 increased $0.5 million from year-end 2023 to $2.5 million. Subsequent to the close of the quarter, the Company raised net proceeds of $7.0 million in a secured convertible debt financing.
- Total liabilities at June 30, 2024 were $3.6 million, a decrease of approximately $2.1 million compared to year-end 2023, driven primarily by the Company's monthly repayment of its unsecured debt, which was paid in full in the first quarter of 2024, and sizable reduction in accrued expenses reflecting the issuance of restricted stock grants.
- As of June 30, 2024, the Company had shareholders' equity totaling $65.5 million.
Second Quarter 2024 Operational Highlights
- Successful Quantum LiDAR Prototype Sale: QCi executed the sale of a quantum LiDAR prototype to Johns Hopkins University for $200,000. This sale marked a significant advancement in underwater LiDAR technology and showcases the commercial potential of QCi's quantum solutions across diverse applications.
- Enhanced Sales Strategy: QCi appointed Richard Nelson as Senior Vice President of Business Development and Pouya Dianet as Director of TFLN Optical Chip Sales to accelerate market penetration and expand global sales of QCi's quantum technologies.
- TFLN Foundry Progress: The Company continues to advance its strategic initiative to establish the first U.S.-based TFLN fabrication facility in Tempe, Arizona, a key element of QCi's long-term strategy to become a leader in the optical chip market, and to secure offtake agreements for future chip sales from the foundry.
- Subsequent to the Quarter: In line with the Company's initiative to expand its partnerships with government agencies and laboratories, QCi announced the extension of its Cooperative Research and Development Agreement (CRADA) with the Los Alamos National Laboratory (LANL). This strategic collaborative agreement focuses on QCi's new entropy quantum optimization machine, Dirac-3, and its capabilities to quickly and efficiently solve highly complex problems associated with quantum simulations, social networks, protein structure prediction, and telecommunications.
Additionally, the Company filed with the SEC its Form 10-Q for the quarterly period ending March 31, 2024, which contains restated financial results for the three-month period ended March 31, 2023. As previously disclosed, following the entry of a cease-and-desist order by the SEC against the Company's former auditor, BF Borgers CPA PC, the Company engaged a new independent registered public accounting firm, BPM LLP, to reaudit 2023 and 2022 financial results and the quarterly financial results released today. While the auditor transition was the primary reason for the delay in our March 31, 2024 and June 30, 2024, quarterly filings, we do not expect any further delays going forward.
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.
QUANTUM COMPUTING INC. Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value data)
| ||||||||
June 30, | December 31, | |||||||
2024 | 2023 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 2,526 | $ | 2,059 | ||||
Accounts receivable | 56 | 65 | ||||||
Inventory | 266 | 73 | ||||||
Loans receivable, net of provision for credit losses of $295 and $279 | 295 | 279 | ||||||
Prepaid expenses and other current assets | 272 | 180 | ||||||
Total current assets | 3,415 | 2,656 | ||||||
Property and equipment, net | 5,387 | 2,870 | ||||||
Operating lease right-of-use assets | 923 | 1,051 | ||||||
Intangible assets, net | 10,524 | 12,076 | ||||||
Goodwill | 55,573 | 55,573 | ||||||
Other non-current assets | 133 | 129 | ||||||
Total assets | $ | 75,955 | $ | 74,355 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 1,672 | $ | 1,462 | ||||
Accrued expenses | 327 | 639 | ||||||
Financial liabilities, net of issuance costs | - | 1,925 | ||||||
Deferred revenue | 104 | - | ||||||
Other current liabilities | 790 | 786 | ||||||
Total current liabilities | 2,893 | 4,812 | ||||||
Operating lease liabilities | 708 | 840 | ||||||
Total liabilities | 3,601 | 5,652 | ||||||
Contingencies (see Note 10) | ||||||||
Mezzanine equity | 6,829 | - | ||||||
Stockholders' equity | ||||||||
Preferred stock, $0.0001 par value, 1,550 shares Series A Preferred authorized; 1,241 | ||||||||
and 1,490 shares issued and outstanding as of June 30, 2024 and December 31, | ||||||||
2023, respectively; 3,080 shares of Series B Preferred Stock authorized; no shares | ||||||||
issued and outstanding as of June 30, 2024 and December 31, 2023 | - | - | ||||||
Common stock, $0.0001 par value, 250,000 shares authorized; 94,416 and 77,451 | ||||||||
shares issued and outstanding as of June 30, 2024 and December 31, 2023, | ||||||||
respectively | 9 | 8 | ||||||
Additional paid-in capital | 209,086 | 200,635 | ||||||
Accumulated deficit | (143,570) | (131,940) | ||||||
Total stockholders' equity | 65,525 | 68,703 | ||||||
Total liabilities and mezzanine and stockholders' equity | $ | 75,955 | $ | 74,355 | ||||
QUANTUM COMPUTING INC. Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(Restated) | (Restated) | |||||||||||||||
Total revenue | $ | 183 | $ | 112 | $ | 210 | $ | 233 | ||||||||
Cost of revenue | 125 | 51 | 141 | 107 | ||||||||||||
Gross profit | 58 | 61 | 69 | 126 | ||||||||||||
Research and development | 2,094 | 2,466 | 4,315 | 4,650 | ||||||||||||
Sales and marketing | 429 | 385 | 880 | 812 | ||||||||||||
General and administrative | 2,802 | 4,168 | 6,459 | 7,718 | ||||||||||||
Operating expenses | 5,325 | 7,019 | 11,654 | 13,180 | ||||||||||||
Loss from operations | (5,267) | (6,958) | (11,585) | (13,054) | ||||||||||||
Non-operating income (expense) | ||||||||||||||||
Interest and other income | 73 | 61 | 110 | 93 | ||||||||||||
Interest expense, net | - | (537) | (155) | (963) | ||||||||||||
Change in value of warrant liability | - | 17 | - | 370 | ||||||||||||
Loss before income tax provision | (5,194) | (7,417) | (11,630) | (13,554) | ||||||||||||
Income tax provision | - | - | - | - | ||||||||||||
Net loss | (5,194) | (7,417) | (11,630) | (13,554) | ||||||||||||
Less: Series A convertible preferred stock dividends | - | (215) | - | (431) | ||||||||||||
Net loss available to common stockholders | $ | (5,194) | $ | (7,632) | $ | (11,630) | $ | (13,985) | ||||||||
Loss per share – basic and diluted | $ | (0.06) | $ | (0.12) | $ | (0.13) | $ | (0.23) | ||||||||
Weighted average shares used in computing net loss per | ||||||||||||||||
common share – basic and dilutive | 93,550 | 62,667 | 87,185 | 60,832 | ||||||||||||
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SOURCE Quantum Computing Inc.