Q4 2024 Quantum Computing Inc Earnings Call

Operator: Greetings. Welcome to the Quantum Computing Inc. Q4 2024 Shareholder Update Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Rosalyn Christian. You may begin.

Rosalyn Christian: Thank you. I want to welcome everyone to the Quantum Computing Inc. Q4 2024 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. William McGann, CEO of QCI, and Chris Boehmler, CFO. Bill will provide an update on the business, followed by a question and answer session hosted by both Bill and Chris.

Rosalyn Christian: With that, I would like to turn the call over to management. Please go ahead, Bill.

Bill: Please go ahead, Bill. Well, thank you, Rosalind, and everyone out there for joining us today. We're extremely excited to share our progress with you after what has been a very, very busy fourth quarter with a lot of significant operational and financial progress to report to you all. With a transformed balance sheet and critical advancements across both our quantum solutions and foundry services business, we are really well positioned to scale and accelerate the commercialization of our technology in 2025. QCI has been living and breathing quantum for years now. But one change since we last spoke together is that the broader world has definitely started to take notice to the importance of quantum.

William McGann: Well, thank you, Rosalyn, and everyone out there for joining us today. We're extremely excited to share our progress with you after what has been a very, very busy Q4 with a lot of significant operational and financial progress to report to you all. With a transformed balance sheet and critical advancements across both our quantum solutions and foundry services business, we are really well-positioned to scale and accelerate the commercialization of our technology in 2025. QCI has been living and breathing quantum for years now. One change since we last spoke together is that the broader world has definitely started to take notice to the importance of quantum. This is a really exciting momentum in the industry and especially here at QCI.

Well, thank you Roslyn and everyone out there for joining US today, we're extremely excited to share our progress with you. After what has been a very very busy fourth quarter with a lot of significant operational and financial progress to report to you all with a transformed balance sheet and critical advancements across both our quantum solutions and foundry services business, we are really well positioned.

To scale and accelerate the commercialization of our technology in 2025, GCI has been living and breathing quantum for years now, but one change since we last spoke together is it the broader world has definitely started to take notice to the importance of quantum is a really exciting momentum in the industry.

Bill: There's a really exciting momentum in the industry and especially here at QCI. For those that are new to our story, QCI is a nanophotonics company, and we leverage the nonlinear quantum optical properties of a material called thin film lithium niobate to build high performance computing solutions for real world applications today. That's a differentiator. Our approach is unique in the quantum industry because our technology is available and useful today. While many of the quantum players continue to work on that ultimate challenge of a large-scale fault-tolerance system that may remain years away, our focus is in delivering accessible and affordable solutions for quantum-enhanced solutions today and right now.

And especially here at UCI. So those are new to our story.

William McGann: For those that are new to our story, QCI is a nanophotonics company. We leverage the nonlinear quantum optical properties of a material called thin-film lithium niobate to build high-performance computing solutions for real-world applications today. That's a differentiator. Our approach is unique in the quantum industry because our technology is available and useful today. While many of the quantum players continue to work on that ultimate challenge of a large-scale fault-tolerant system that may remain years away, our focus is in delivering accessible and affordable solutions for quantum-enhanced solutions today and right now. We'll talk about some of those in a moment. One of the differentiators for our core technology is so-called SWaP-C, which is our ability to deliver superior size, weight, power, and cost advantages. Our Dirac-3 quantum optimization machine operates at room temperature, requires no cryogenic cooling.

And a photonics company and we leveraged the nonlinear quantum optical properties of a material call thin film lithium niobate to build high performance computing solutions for real world applications today, that's a differentiator.

Our approach is unique in the quantum industry, because our technology is available and useful today.

Well many of the quantum players continue to work on that Ultimate challenge of a large scale fault tolerant system. You know that may remain years away, our focus isn't delivering accessible and affordable solutions for quantum enhanced solutions today and right now so we'll talk about some of those that are at the moment one of the Differentiators for our core technology is so called swaps.

Bill: So we'll talk about some of those in a moment. One of the differentiators for our core technology is so-called SWAP-C, which is our ability to deliver superior size, weight, power, and cost advantages. And our DIRAC-III quantum optimization machine operates at room temperature, requires no cryogenic cooling, it fits within a standard data rack in a server room, and consumes less than 100 watts, which is a fraction of the power required by many competing systems. So these together are advantages critical as the industries that seek, you know, important solutions that seamlessly integrate into existing infrastructure while also simultaneously improving computational efficiency.

<unk>, which is our ability to deliver a superior size weight power and cost advantages.

And our direct three quantum optimization machine operates at room temperature requires no cryogenic cooling it fits within our standard data rack in the server room in consumes less than 100 watts, which is a fraction of the power required by many competing systems. So these together our advantages.

William McGann: It fits within a standard data rack in a server room and consumes less than 100W, which is a fraction of the power required by many competing systems. These together are advantages are critical as the industries that seek important solutions that seamlessly integrate into existing infrastructure while also simultaneously improving computational efficiency. That's kind of our mission. We're addressing two very primary market needs right now. The first is our Dirac-3 quantum machine is aimed at solving complex optimization problems in transportation, finance, healthcare, fraud detection, and even in improving the optimization of AI algorithms. The second focus has been advancing our photonic chip technology, which we talked about last time. We'll talk a little bit more about that today.

How critical is the industries that seek you know important solutions that seamlessly integrate into existing infrastructure. While also simultaneously improving computational efficiency, that's kind of our mission. So we're addressing two very primary market needs right. Now. The first is our direct III quantum machine is aimed at solving.

Bill: That's kind of our mission. So we're addressing two very primary market needs right now. The first is our DIRAC-3 quantum machine is aimed at solving complex optimization problems in transportation, finance, healthcare, fraud detection, and even in improving the optimization of AI algorithms. The second focus has been advancing our photonic chip technology, which we talked about last time. We'll talk a little bit more about that today. And our foundry will provide the building blocks for not only the next generation of our quantum applications, but also for adjacencies in data com and telecom markets.

Complex optimization problems in transportation finance health care fraud detection and even in an improving the optimization of AI algorithms.

Second focus has been on advancing our photonic chip technology, which we talked about last time, we'll talk a little bit more about that today and our foundry.

William McGann: Our foundry will provide the building blocks for not only the next generation of our quantum applications, but also for adjacencies in data comm and telecom markets. I'll give you a little bit of an update on some of the operational highlights for Q4 2024. What we did there is we really continued to make a lot of progress across our key initiatives, validating both the demand for our quantum computing solutions and for our chip foundry services. One of the major highlights was an expansion of our partnership with NASA. Many of you have heard that we've had numerous contracts with them. On 17 October, we secured our 5th task order with NASA for developing quantum modeling and removal of solar noise from spaceborne LIDAR missions using our Dirac-3 machine.

We will provide the building blocks for not only the next generation of our quantum applications, but also for Adjacencies in Datacom and telecom markets.

Bill: So I'll give you a little bit of an update on some of the operational highlights for the fourth quarter of 2024. What we did there is we really continued to make a lot of progress across our key initiatives, validating both the demand for our quantum computing solutions and for our chip foundry services. One of the major highlights was an expansion of our partnership with NASA. Many of you have heard that we've had numerous contracts with them. On October 17th, we secured our fifth task order with NASA for developing quantum modeling and removal of solar noise from space-borne LIDAR missions using our DIRAC-3 machine.

I'll give you a little bit of an update on some of the operational highlights for the fourth quarter of 2024.

What we did there is we really continues to make a lot of progress across our key initiatives validating both the demand for our quantum computing solutions and for our chip foundry services. One of the major highlights was an expansion of our partnership with NASA.

Many of you have heard that we've had numerous contracts with them.

17th we secured our fifth task order with NASA for developing quantum modeling and removal of solar noise from spaceborne Lidar missions using our direct three machine. The goal of this project is to reduce costs associated with climate monitoring missions, while significantly improving the data collection capabilities and results that again on December 7th.

William McGann: The goal of this project is to reduce costs associated with climate monitoring missions while significantly improving the data collection capabilities and results. Again, on 17 December, we announced an additional contract with NASA to support an initiative for doing what so-called phase unwrapping using our Dirac-3 machine optimization solver. These are exciting opportunities that demonstrate how our technology can enhance data accuracy and efficiency in large-scale imaging applications. More importantly, our ongoing work with NASA over the years has always been laying the groundwork for continued collaboration, not only with NASA, but also with other great government agencies and research institutions looking to leverage our quantum solutions for complex computational challenges. We've made a lot of progress in this area.

Bill: The goal of this project is to reduce costs associated with climate monitoring missions while significantly improving the data collection capabilities and results. Then again, on December 17th, we announced an additional contract with NASA to support an initiative for doing what's so-called phase unwrapping using our DIRAC-3 machine optimization solver. These are exciting opportunities that demonstrate how our technology can enhance data accuracy and efficiency in large-scale imaging efforts. So more importantly, our ongoing work with NASA over the years has always been laying the groundwork for continued collaboration, not only with NASA, but also with other great government agencies and research institutions looking to leverage our quantum solutions for complex computational challenges.

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It's an additional contract with NASA to support initiatives, we're doing with the so called phase on wrapping using our directory machine optimization solver. These.

These are exciting opportunities that demonstrate how our technology can enhance data accuracy inefficiency in large scale imaging applications. So more importantly, our ongoing work with NASA over the years always been laying the groundwork for continued collaboration not only with NASA, but also with other grades government agencies and research institutions looking to.

To leverage our quantum solutions for complex computational challenges. So we've made a lot of progress in this area. We turned a moment now to our quantum photonic chip foundry in Tempe, Arizona. We're in the final stage of commissioning that facility and we remain on schedule to begin production in early Q2, but construction is substantially complete as of today and we are.

Bill: We've made a lot of progress in this area. If we turn a moment now to our Quantum Photonic Chip Foundry in Tempe, Arizona, we're in the final stage of commissioning that facility and remain on schedule to begin production in early Q2. The construction is substantially complete as of today and we are now establishing our design process kits and will be fulfilling customer orders in Q2. Throughout the quarter, we strengthened our industry relationships by signing a couple of memorandums of understanding with Spark Photonics Design and Alcyon Photonics to broaden our collaboration efforts. As part of our 2024 pilot launch, we secured multiple pre-orders through the opening of the fab and subsequent to the fourth quarter, we announced a total of five purchase orders for our Tiflin photonic chips.

William McGann: If we turn a moment now to our quantum photonic chip foundry in Tempe, Arizona, we're in the final stage of commissioning that facility and remain on schedule to begin production in early Q2. The construction is substantially complete as of today. We are now establishing our design process kits and will be fulfilling customer orders in Q2. Throughout the quarter, we strengthened our industry relationships by signing a couple of memorandums of understanding with Spark Photonics Design and Alcyon Photonics to broaden our collaboration efforts. As part of our 2024 pilot launch, we secured multiple pre-orders through the opening of the fab. Subsequent to Q4, we announced a total of five purchase orders for our TIFLIN photonic chips.

Now, establishing our design process kids, it will be fulfilling customer orders in Q2s.

Throughout the quarter, we strengthened our industry relationships by signing a couple of memorandums of understanding with spark photonics design and the LC and photonics to broaden our collaboration efforts as part of our 'twenty 'twenty four pilot launch we secured multiple pre orders through the opening of the fab.

Subsequent to the fourth quarter, we announced a total of five purchase orders for our <unk> chips.

William McGann: These milestones reinforce our strategy and the growing industry demand for high-performance, energy-efficient photonic integrated circuits or PICs, and QCI's position as a leader in the emerging US-based TIFLIN market, which we feel even more secure about today than we did the last time we spoke. From a sales and market expansion perspective, we've been actively engaged with commercial and government partners in Q4, and we've attended numerous, up to 10 industry trade shows and conferences, making numerous presentations, presenting quantum optimization and our photonic chip solutions to some of the key decision makers and a long list of potential customers. This focused outreach is really helping us drive better adoption, visibility, and strengthening our customer relationships to expand our presence across multiple sectors we try to serve.

Bill: These milestones reinforce our strategy and the growing industry demand for high performance, energy efficient, photonic integrated circuits or PICs. And QCI's position as a leader in the emerging US-based Tiflin market, which we feel even more secure about today than we did the last time we spoke. So from a sales and market expansion perspective, we've been actively engaged with commercial and government partners in Q4, and we've attended numerous, up to 10 industry trade shows and conferences, making numerous presentations, presenting quantum optimization or our photonic chip solutions to some of the key decision makers and then one list of potential customers.

Milestones reinforce our strategy and the growing industry demand for high performance energy efficient photonic integrated circuits or pics and QC is positioned as a leader in the emerging U S based tier one market, which we feel even more secure about today than we did the last time, we spoke so from a sales and market expansion perspective, we've been.

Actively engaged with commercial and government partners in Q4, and we've attended numerous up to 10 industry trade shows and conferences, making numerous presentations presenting quantum optimization are our photonic chip solutions to some of the key decision makers in one list of potential customers. This focus outreach is really helping us drive better adoption.

Bill: This focus outreach is really helping us drive better adoption, visibility, and strengthening our customer relationships to expand our presence across multiple sectors we try to serve.

Visibility and strengthening our customer relationships to expand our presence across multiple sectors. We tried to serve one additional examples that we had the opportunity in November of last year to present that the quantum of Frontiers conference that was Alamos National laboratories. This is a key moment for us because we get to sit and talk with key thought leaders on pales to.

William McGann: One additional example is that we had the opportunity in November of last year to present at the Quantum Frontiers conference at Los Alamos National Laboratory. This is a key moment for us because we get to sit and talk with key thought leaders that are on panels to discuss how quantum optimization solutions, particularly associated with our Dirac machine, today are solving real-world problems. While there's been some debate in the industry about the timeline for quantum computing adoption, our model is different and our approach is different. Our photonic quantum machines are already demonstrating tangible value in important government and commercial applications, and it was a nice opportunity to be able to talk about some of those with a very small focus group of thought leaders in the industry.

Bill: One additional example is that we had the opportunity in November of last year to present at the Quantum Frontiers Conference at Los Alamos National Laboratories. This is a key moment for us because we get to sit and talk with key thought leaders and on panels to discuss how quantum optimization solutions, particularly associated with our interactive machine, today are solving real-world problems. While there's been some debate in the industry about the timeline for quantum computing adoption, our model is different and our approach is different. Our photonic quantum machines are already demonstrating tangible value in important government and commercial applications, and it was a nice opportunity to be able to talk about some of those with a very small focus group of thought leaders in the industry.

Gus how quantum optimization solutions, particularly associated with our direct machine today are solving real world problems and while there's been some debate in the industry about the timeline for quantum computing adoption. Our model is different than our approach is different our photonic quantum machines are already demonstrating tangible valley.

Speaker Change: <unk>, an important government and commercial applications and it was a nice opportunity to be able to talk about some of those with a with a very small focus group of thought leaders in the industry all work with NASA and our expanding foundry services underscore. This proving quantum technologies are not just theoretical concepts, but they are here now and ready to deployed Chris who's going to talk.

William McGann: Our work with NASA and our expanding foundry services underscore this, proving quantum technologies are not just theoretical concepts, but they are here now and ready to deploy. Chris is going to talk to you in a moment if I can get over my cold here, I apologize for that, and discuss our financial progress in more detail. Another key highlight of the quarter was bolstering our balance sheet. With a significantly stronger financial position this year versus last, we're really well positioned like never before, really to scale the operations at QCI and execute and accelerate our commercial strategy to expand the industry adoption of its quantum photonic solutions. As we move into 2025, we're going to remain really focused on driving revenue from that foundry and our quantum machines.

Bill: Our work with NASA and our expanding foundry services underscore this, proving quantum technologies are not just theoretical concepts, but they are here now and ready to deploy.

Bill: Chris is going to talk to you in a moment, if I can get over my cold hair, I apologize for that, and discuss our financial progress in more detail. But another key highlight of the quarter was bolstering our balance sheet. With a significantly stronger financial position this year versus last, we're really well positioned like never before, really, to scale the operations at QCI and execute and accelerate our commercial strategy to expand the industry adoption of its quantum photonic solutions. As we move into 2025, we're going to remain really focused on driving revenue from that foundry and our quantum machines.

In a moment if I can get off of my cold here apologize and.

Speaker Change: And discuss our financial progress in more detail, but another key highlight of the quarter was bolstering our balance sheet with a significantly stronger financial position. This year versus last we're really well positioned like never before really to scale the operations of QC eye and executing accelerate our commercial strategy to expand the industry.

Speaker Change: Adoption of its quantitative products solutions and as we move into 2025, we're going to remain really focused on driving revenue from that foundry and a quantum machines, we will expand our industry partnerships like he gave you a few examples of our customer base were to continue as always our R&D innovation to push the boundaries of what is possible and photonic computing.

William McGann: We're going to expand our industry partnerships, like I gave you a few examples of, and our customer base. We want to continue, as always, our R&D innovation to push the boundaries of what is possible in photonic computing. With that, I'm going to turn over the call now to our CFO, Chris Boehmler, who will walk us through some of the financials. Over to you, Chris Boehmler.

Bill: We're going to expand our industry partnerships like we gave you a few examples of in our customer base. We're going to continue, as always, our R&D innovation to push the boundaries of what is possible in photonic computing.

Chris: So with that, I'm going to turn over the call now to our CFO, Chris Bemler, who will walk her through some of the financials. Over to you, Chris. Thanks, Bill. Today I'm going to provide a brief overview of our financial performance for the fourth quarter 2024. Our results in the quarter reflect a significantly strengthened cash position and advancement of our strategic initiatives. key initiatives that will drive long-term growth in both our offerings for foundry services of Tiflin photonic chips and quantum solutions that use our machines. Fourth quarter, 2024 revenues totaled approximately $62,000 compared to $75,000 in the prior year quarter.

Speaker Change: So with that I'm going to turn over the call not up to our CFO, Chris Behmer Who'll walk us through some of the financials over to you Chris.

Chris Boehmler: Thanks, William McGann. Today, I'm going to provide a brief overview of our financial performance for Q4 2024. Our results in the quarter reflect a significantly strengthened cash position in advancement of our strategic initiatives, key initiatives that will drive long-term growth in both our offerings for foundry services of TIFLIN photonic chips and quantum solutions that use our machines. Q4 2024 revenues totaled approximately $62,000 compared to $75,000 in the prior year quarter. Our gross margin improved significantly to 55%, up from 13% in Q4 2023. This improvement was largely driven by our focus on reducing our direct costs of goods sold. Operating expenses for Q4 totaled $8.9 million, compared to $6.6 million in the same quarter last year.

Chris Behmer: Thanks, Bill today, I'm going to provide a brief overview of our financial performance for the fourth quarter 2024.

Chris Behmer: Our results in the quarter reflect a significantly strengthened cash position and advancement of our strategic initiatives.

Chris Behmer: Key initiatives that will drive long term growth and built our offerings for foundry services are typically photonic chips in quantum solutions that use our machines.

Chris Behmer: Fourth quarter 2024 revenues totaled approximately 62000 compared to 75000 in the prior year quarter.

Chris: Our gross margin improved significantly to 55%, up from 13% in the fourth quarter of 2023. This improvement was largely driven by our focus on reducing our direct costs of goods sold. Operating expenses for the fourth quarter totaled $8.9 million, compared to $6.6 million in the same quarter last year. The year-over-year increase was primarily driven by higher employee-based expenses, including stock-based compensation, and increased depreciation in support of bringing our photonics chip foundry online, offset by lower non-recurring legal services expenses. Further, for the full year ended 2024, our cash used in operations decreased by $2.1 million, reflecting management's disciplined strategy to minimize general and administrative expenses.

Chris Behmer: Our gross margin improved significantly to 55% up from 13% in the fourth quarter of 2023. This.

Chris Behmer: This improvement was largely driven by our focus on reducing our direct cost of goods sold.

Chris Behmer: Operating expenses for the fourth quarter totaled $8 9 million compared to $6 6 million in the same quarter last year.

Chris Boehmler: The year-over-year increase was primarily driven by higher employee-based expenses, including stock-based compensation and increased depreciation in support of bringing our photonics chip foundry online, offset by lower non-recurring legal services expenses. Further, for the full year ended 2024, our cash used in operations decreased by $2.1 million, reflecting management's disciplined strategy to minimize general and administrative expenses. The company reported a net loss attributable to common stockholders of $51.2 million, or $0.47 per basic share, compared to a net loss of $6.8 million in the prior year quarter. The higher net loss this quarter was primarily due to non-cash charges attributable to the mark-to-market of the company's warrant liability as a result of our merger with QPhoton back in June 2022. As of 31 December 2024, total assets stood at $153.6 million, up from $74.4 million at year-end 2023.

Chris Behmer: The year over year increase was primarily driven by higher employee based expenses, including stock based compensation.

Chris Behmer: And increased depreciation and supportive, bringing our photonics chip foundry online.

Chris Behmer: Offsetting by lower nonrecurring legal services expenses.

Chris Behmer: Further for the full year ended 2024, our cash used in operations.

Chris Behmer: Decreased by $2 1 million, reflecting management's disciplined strategy to minimize general and administrative expenses.

Chris: The company reported a net loss attributable to common stockholders of $51.2 million or $0.47 per basic share compared to a net loss of $6.8 million in the prior year quarter. The higher net loss this quarter was primarily due to non-cash charges attributable to the mark-to-market of the company's warrant liability as a result of our merger with Qfoton back in June of 2022. As of December 31st, 2024, total assets stood at $153.6 million, up from $74.4 million at year-end 2023. Cash and cash equivalents. notably increased by $76.9 million to $78.9 million at year-end, bolstered by total net proceeds of $92.1 million raised in the fourth quarter through offerings of common stock.

Chris Behmer: The company reported a net loss attributable to common stockholders of $51 2 million or <unk> 47 cents per basic share compared to a net loss of $6 8 million in the prior year quarter.

Chris Behmer: The higher net loss this quarter was primarily due to noncash charges.

Chris Behmer: <unk> to the Mark to market of the company's warrant liability as a result of our merger with Q photon back in June of 2022.

Chris Behmer: As of December 31, 2024, total assets stood at $153 6 million up from $74 4 million at year end 2023.

Chris Boehmler: Cash and cash equivalents notably increased by $76.9 million to $78.9 million at year-end, bolstered by total net proceeds of $92.1 million raised in Q4 through offerings of common stock. Subsequent to the quarter, the company announced an additional private placement of common stock for an additional $100 million of gross proceeds, further strengthening our balance sheet. Total liabilities at year-end were $46.3 million, an increase of approximately $41 million compared to year-end 2023, driven primarily by the previously disclosed non-cash mark-to-market adjustment for the QPhoton warrant liability I mentioned. Stockholders' equity rose to $107.3 million, reflecting our strengthened capital position. Looking ahead, our focus remains on executing our commercialization strategy while prudently managing our financial resources.

Chris Behmer: Cash and cash equivalents, notably increased by $76 9 million to $78 9 million at year end.

Chris Behmer: Bolstered by total net proceeds of $92 1 million raised in the fourth quarter through our offerings of common stock.

Chris Behmer: Subsequent to the quarter the company announced an additional private placement of common stock for an additional $100 million of gross proceeds.

Chris: Subsequent to the quarter, the company announced an additional private placement of common stock for an additional 100 million of gross proceeds. further strengthening our balance sheet. Total liabilities at year-end were $46.3 million, an increase of approximately $41 million compared to year-end 2023, driven primarily by the previously disclosed non-cash mark-to-market adjustment for the QFW liability I mentioned. Stockholders' equity rose to $107.3 million, reflecting our strengthened capital position. Looking ahead, our focus remains on executing our commercialization strategy by prudently managing our financial resources. With our foundry on track to be operational by the end of this month, March 2025, with deliveries of pre-orders early next quarter, Q2 2025, coupled with our continued momentum with our go-to-market strategy to deliver quantum machines.

Chris Behmer: Further strengthening our balance sheet.

Chris Behmer: Total liabilities at year end were $46 3 million, an increase of approximately 41 million compared to year end 2023.

Chris Behmer: Driven primarily by the previously disclosed noncash mark to market adjustment for the Q4 ton warrant liability I mentioned.

Chris Behmer: Stockholders equity rose to $107 3 million, reflecting our strengthened capital position.

Looking ahead, our focus remains on executing our commercialization strategy by prudently managing our financial resources.

Chris Boehmler: With our foundry on track to be operational by the end of this month, March 2025, with deliveries of pre-orders early next quarter, Q2 2025, coupled with our continued momentum with our go-to-market strategy to deliver quantum machines, we are very well-positioned to drive revenue growth and work toward sustainable cash flow. I'll now turn it back over to Bill for closing remarks.

Chris Behmer: With our foundry on track to be operational by the end of this month March 2025.

Chris Behmer: With deliveries of preorders.

Chris Behmer: Early next quarter Q2, 'twenty twenty-five coupled with our continued momentum with our go to market strategy to deliver quantum machines.

Chris: We are very well positioned to drive revenue growth and work toward sustainable cash flow.

Chris Behmer: We are very well positioned to drive revenue growth and work toward sustainable cash flow.

Bill: I'll now turn it back over to Bill for closing remarks.

Bill: I'll now turn it back over to Bill for closing remarks.

William McGann: Thank you, Chris. 2024 has been a year of significant progress for QCI, with key advancements in our quantum machines, photonic chip foundry, and strategic partnerships. As we move into 2025, we are well-positioned to drive revenue growth and expand the adoption of our quantum technologies. Our strong financial position and continued focus on innovation will enable us to capitalize on the growing demand for scalable quantum solutions. I'm excited for what lies ahead as we begin to execute our strategy and continue to put photons to work. With that, we'll open it up for questions. Operator, please go ahead with that. Thanks.

Bill: Thank you, Chris. 2024 has been a year of significant progress for QCI with key advancement in our quantum machines and photonic chip foundry and strategic partnerships. As we move into 2025, we are well positioned to drive revenue growth and expand the adoption of our quantum technology. Our strong financial position and continued focus on innovation will enable us to capitalize on the growing demand for scalable quantum solutions. And I'm excited for what lies ahead as we begin to execute our strategy and continue to put photons to work.

Bill: Thank you Chris.

Speaker Change: 24 has been a year of significant progress for <unk> with key advancements in our quantum machines and photonic chip foundry and strategic partnerships as we move into 2025, we are well positioned to drive revenue growth and expand the adoption of a quantum technologies.

Speaker Change: Our strong financial position and continued focus on innovation will enable us to capitalize on the growing demand for scalable quantum solutions and I'm excited for what lies ahead as we begin to execute our strategy continue to put photons to work so with that we'll open it up for questions. Operator. Please go ahead with that thanks.

Operator: So with that, we'll open it up for questions. And operator, please go ahead with that. Thanks. Thank you.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Once again, please press star one if you have a question or a comment. Our first question is from Edward Woo with Ascendiant Capital Markets. Please proceed.

Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.

Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star 2. One moment please while we poll for questions. Once again, please press star 1 if you have a question or a comment.

Speaker Change: Pressing the star Keys, one moment, please while we poll for questions. Once again. Please press star one if you have a question or a comment.

Ed Woo: And our first question is from Ed Woo with <unk> capital. Please proceed.

Ed Wu: The first question is from Ed Wu with Ascendant Capital, please proceed. Yeah, congratulations on all the progress and congratulations on getting those recognitions. My question is, you know, the opportunities in international, is most of your focus now domestic business or are you focused just on worldwide opportunities? Yeah, thanks, Ed. It is currently a big focus in the US with some commercial entities. Those entities are global companies. And with some of the U.S. government initiatives with our DIRAC 3s, particularly in the areas of fraud detection and sort of portfolio analysis, payment analysis. We do have, I will say, a couple of orders for our photonic chips that are offshore, both in Europe and in Asia.

Edward Woo: Yeah. Congratulations on all the progress, and congratulations on getting these recognitions. My question is, the opportunities in international, is most of your focus now domestic business, or are you focused just on worldwide opportunities?

Speaker Change: Yeah, congratulations on all the progress.

Speaker Change: Our delicious like getting does recognitions. All my question is you know are the opportunities and international is most of your focus now domestic business or are you focused just on worldwide us opportunities.

William McGann: Yeah. Thanks, Edward Woo. It is currently a big focus in the US with some commercial entities. Those entities are global companies. With some of the US government initiatives with our Dirac-3, particularly in the areas of fraud detection and sort of portfolio analysis, payment analysis. We do have, I will say, a couple of orders for our photonic chips that are offshore, both in Europe and in Asia. It's a mix. For the commercial products, the Dirac machine in particular, there are, I will say, orders in our pipeline that we have not been able to capture as an order and deliver as a sale yet that are offshore. Right now, we're pretty much focused on closing orders that are largely domestic for the quantum machines, and we've got a decent mix onshore, offshore for the chips.

Ed Woo: Yeah. Thanks, Ed.

Speaker Change: It is currently a big focus in the U S with some commercial entities both of those vectors are global companies and with some of the U S government initiatives without directories, particularly in the areas of.

Speaker Change: Fraud detection and a sort of a portfolio analysis payment analysis, we do have I will say a couple of orders for our photonic chips that are offshore.

Speaker Change: In Europe and in Asia, So, it's a mix for the commercial.

Bill: So it's a mix for the commercial products, the DIRAC machine in particular. There are, I will say, orders in our pipeline that we have not been able to capture as an order and deliver as a sale yet that are offshore. But right now, we're pretty much focused on closing orders that are largely domestic for the quantum machines, and we've got a decent mix onshore, offshore for the chips. That sounds good.

Speaker Change: <unk> products are the direct machine in particular, there are there I will say orders in our pipeline that we have not been able to capture as an order and deliver as a sale yet or offshore but right now we're pretty much focused on closing orders that are largely domestic for the for the quantum machines and we've got a decent mix onshore off.

Speaker Change: Sure for the for the chips.

Edward Woo: That sounds good. Just my last question on the foundry business. Congratulations on starting orders in early Q2.

Speaker Change: That sounds good and then just my last question on the foundry business curricular options on starting orders in early Q2 are going to be operating at a ramped up 100% operational efficiency right away or will it take time to ramp up.

Bill: And just my last question on the foundry business. Congratulations on starting orders in early Q2. Are you going to be operating at a ramped 100 percent operational efficiency right away or will it take time to ramp up? Well, of course, there's a startup time, right? Because what you have to do, I'm sure you're aware, is we have to get what's called our PDKs, our process design kits going, and we have that going. So we'll be delivering chips, proof of concept chips to customers in Q2. And those are most of the orders we secured. I mean, we are a new foundry.

William McGann: Thank you.

Edward Woo: Are you going to be operating at a ramped 100% operational efficiency right away, or will it take time to ramp up?

William McGann: Well, of course, there's a startup time, right? What you have to do, I'm sure you're aware, is we have to get what's called our PDKs, our process design kits going, and we have that going. We'll be delivering proof of concept chips to customers in Q2, and those are most of the orders we secured. We are a new foundry, so most customers rightly would say, Hey, build us a handful of these modulator devices or ring resonators or various components. That leads to a scaled-up for a sort of a multi-project wafer platform, which is what we're looking to drive as quickly as possible. Yeah, there's going to be a ramp, as you would expect, commissioning the equipment, getting our PDKs lined up.

Speaker Change: Well of course, there's a startup time right because of what what you have to do I'm sure you're aware because we have to get what's called PTK as a process design kit is going and we have that going.

Speaker Change: So we'll be delivering chips, a proof of concept chips to customers in Q2 and those are most of the orders. We secured I mean, we are a new foundry. So most customers lately would say hey, you know build us.

Bill: So most customers rightly would say, hey, build us a handful of these modulator devices or ring resonators or various components. And that leads to a scaled up for a sort of a multi-project wafer platform, which is what we're looking to drive as quickly as possible. So yeah, there's gonna be a ramp, as you would expect, you know, commissioning the equipment, you know, getting our PDKs lined up. And we have some partnerships that I mentioned in the call that will be helping us and working with us on some of those. Great. Well, thank you, and I wish you guys congratulations again.

Speaker Change: Handful of these modulator devices or ring resonators are various various components and that leads to a scaled up for sort of a multi project wafer.

Speaker Change: Platform, which is what we're looking to drive as quickly as possible. So yeah. This is gonna be a ramp as you would expect you know commissioning the equipment you know getting getting our PDK has lined up but we have some partnerships that I mentioned in the in the call that will be helping us in working with us on some of those things.

William McGann: We have some partnerships that I mentioned in the call that will be helping us and working with us on some of those things.

Edward Woo: Great. Well, thank you, and I wish you guys congratulations again. Thank you.

Speaker Change: Great well, thank you and I wish you guys. Congratulations again, thank you.

Bill: Thank you. You're welcome. Thank you.

William McGann: You're welcome. Thank you.

Speaker Change: You're welcome thank you.

Operator: Okay, we have no further questions in queue, and I'd like to turn the floor back to management for closing remarks.

Speaker Change: Okay. We have no further questions in queue and I'd like to turn the floor back to management for closing remarks.

Operator: Okay, we have no further questions in queue and I'd like to turn the floor back to management for closing remarks. Okay, well, thank you, Operator, and thank you out there, everybody. I see there's about 30 people.

William McGann: Well, thank you, operator, thank you out there, everybody. I see there's about 30 people. Listen, please, I really appreciate the support and taking the time to listen to our story today and the things we've done, we're very much looking forward to keeping you up to date in 2025. I would ask that to really keep in daily contact with us. You can look at our website. We try to keep that very relevant. We worked very hard in 2024 to make that a good reflection of who we are and what we do, not just from a press release perspective, but our knowledge base, the events that we share on our LinkedIn website. We've really tried to get our message out there and be as transparent as we possibly can with our shareholders and with the world and the market.

Speaker Change: Okay, well, thank you operator, and thank you out there everybody I see there's about 30 people. So listen please I really appreciate the support and taking the time to listen to our story today and the things we've done and we're very much looking forward to keeping you up to date in 2025 I would ask that.

Bill: So, listen, please, I really appreciate the support and taking the time to listen to our story today and the things we've done, and we're very much looking forward to keeping you up to date in 2025. I would ask that To really keep in daily contact with us, you can look at our website. We try to keep that very relevant. We work very hard in 2024 to make that a good reflection of who we are and what we do, not just from a press release perspective, but our knowledge base, the events that we share on our LinkedIn website.

Speaker Change: To really keep in daily contact with US you can look at our website, we try to keep that very relevant we worked very hard in 'twenty 'twenty four to make that a good reflection of who we are and what we do are not just from our press release perspective, but our knowledge base.

Speaker Change: You know the events that we share on a linked in website. We've really tried to you know get our message out there and be as transparent as we possibly can with our shareholders and with the world when the market. So I would ask that if you really want to stay in daily Touchless, We'd love to hear from you and please always feel free to reach out to Ross.

Bill: We really try to get our message out there and be as transparent as we possibly can with our shareholders and with the world and the market. So I would ask that if you really wanna stay in daily touch with us, we'd love to hear from you. And please always feel free to reach out to Rosalynn, our investor relations. contact here on the call with us today.

William McGann: I would ask that if you really want to stay in daily touch with us, we'd love to hear from you, and please always feel free to reach out to Rosalyn, our investor relations contact here on the call with us today. Thank you all very much once again, and I hope you all have a good rest of the remaining day.

Speaker Change: On our Investor Relations.

Speaker Change: Contact here on the call with US today. Thank you all very much once again and I hope you all have a good a restaurant meeting day.

Bill: Thank you all very much once again and I hope you all have a good rest of the meeting day.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.