Ladies and gentlemen, greetings and welcome to the Quantum Computing, Inc. First Quarter 2026 Shareholder Update Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Following management's remarks, the call line will open for questions. It is now my pleasure to introduce your host, John Nesbeth, with IMS Investor Relations.

Thank you, and I want to welcome everyone to the Quantum Computing, Inc. first quarter 2026 shareholder update call. Before we begin, please note that today's remarks may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected results, operational plans, strategy, and market opportunities. These statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act and Section 21E of the Exchange Act and are based on current assumptions and expectations. Forward-looking statements are neither promises nor guarantees and involve risks and uncertainties that could cause actual results to differ materially. Important factors are discussed in our annual report on Form 10-K for the year ended December 31, 2025, and in subsequent SEC filings, including the quarterly report on Form 10-Q for the quarter ended March 31, 2026. We undertake no obligation to update these statements, except as required by law. On the call today, we have Dr. Yu Ping Huang, Chief Executive Officer and Chairman, and Chris Roberts, Chief Financial Officer. The team will provide an update on the business, followed by a question-and-answer session. With that, I would now like to turn the call over to management. Please go ahead, Yupeng.

Good afternoon, and thank you for joining us for Quantum Computing, Inc.'s first quarter of 2026 earnings call. We made meaningful progress in the first quarter of 2026, executing our strategic initiatives and furthering our mission of delivering accessible, scalable, and cost-effective quantum machines and photonic solutions for practical use across high-growth market that include high-performance computing, artificial intelligence, cybersecurity, aerospace and defense, and advanced sensing and imaging. We completed two key transactions during the quarter, closing the acquisitions of Luminar Semiconductor Inc. and the NewCrip LLC. Luminar Semiconductor, which I will refer to as LSI going forward, represents a significant milestone in QCI's strategy to build a vertically integrated product-driven photonics and a quantum technology platform. AOSI brings established capabilities in lasers, detectors, advanced packaging, and testing, has a strong photonics customer base, and has a broad R&D and manufacturing capabilities is that we believe strength our ability to move from small batch to higher volume production. Included in LSI's portfolio are three key subsidiaries. The first is Freedom Photonics. Freedom Photonics is a leading-edge R&D and manufacturing facility that provides unique botanic components, modules, and systems, and is recognized for world-class semiconductor laser technology with approximately 25 issued and pending patents. The second is EN4. EN4 is a class 10,000 certified humidity controlled clean room facility and a leading provider of subsystem design and manufacturing offering comprehensive photonic and fiber optical module solutions the em4 facility is a major supplier to several u.s government programs and the european defense and space markets and finally optogration has a chip manufacturing facility and a device assembly and a testing facility specialized in design, assembling, testing, and low-volume component production. We are currently integrating LSI, and we're excited to onboard their experienced team of operators, engineers, and scientists to expand our depth of talent and execution capacity. We are focused on serving and expanding LSI's existing client base and utilizing their technology and the products to drive quantum commercialization in our target markets. The second acquisition completed in the quarter is Nucrib. NUCRIP's primary patent portfolio spans quantum optics, RF photonics, and photonic signal processing, which can generate, measure, and distribute intangible photons over fiber optical cables. Organizations such as NASA, the U.S. Army Research Lab, and major global research universities and customers have used Neucrypt's technology. Neucrypt's suite of quantum communications systems and product will enable us to further advance our technology roadmap while bolstering our product and solutions portfolio with the goal of further improving the performance, robustness, and the scalability of our technology. We announced a key partnership with Quantum Corridor, which placed a QCAD Direct 3 quantum optimization machine on Quantum Corridor's network, an interstate quantum safe commercial communication network in North America. The optimization machine is intended to provide enhanced, secure, and on-demand directory access for institutions and commercial customers on Quantum Corridors Network. We believe this is the first data center installation of a directory machine and the first installation of its kind in a commercial data center environment this collaboration marked a significant step forward in our commercial deployment strategy expanding practical access to a quantum infrastructure for both academic and enterprise users and reflecting our commercial strategy to make high-performance quantum solutions readily available in IT ecosystems. On the foundry front, our TIFLAN chip R&D and the manufacturing facility in Tempe, Arizona, also known as our FAP1, has been ramping up small batch manufacturing. The foundry's capabilities include nanofabrication and inspection, multiphysics simulation, in-house design and the dicing and the prototype packaging why the facility has begun generating early revenue is important to know that its primary use is as a research and development facility we are actively in the planning phase and assessing options for a step two facility a second much larger foundry which can support higher volume production to extend our long-term manufacturing capacity and enable widespread deployment of quantum powered hardware it is our intent that fab 2 facility will be where quantum manufacturing becomes scalable we look forward to keeping you apprised concerning our Fab-2 strategy and timelines as it progresses. We have made progress on our technology roadmap as we work toward our commercial strategy of bringing quantum products to a broad market by evolving from a technology innovator into a full-scale manufacturer capable of delivering quantum-enabled systems at industry scale. It is becoming increasingly clear that we are well positioned in the marketplace. We believe we have strong quantum optics and integrated photonics foundation that enables affordable and deployable quantum hardware. By focusing on quantum photonics, our technology has the ability to operate at room temperature, dramatically reducing system footprint, complexity, cost, and power requirements. We're following a strategy focused on manufacturing built for scale as we further refine our Fab 1 facility and advance planning on Fab 2. and finally we believe we are getting traction across strategic partnerships and government collaboration our guiding principles of practicality first scalability by design accessibility for all and innovation with a purpose remain at the core of everything we do as we build the future of quantum for everyone. I will now turn the call over to Chris Roberts, our Chief Financial Officer, to discuss our first quarter 2026 financials.

Thank you, Yuping. I'm pleased to announce that revenue for the first quarter totaled $3.7 million compared to $39,000 in the prior year quarter. The year-over-year increase in revenue was driven primarily by the acquisition of Luminar Semiconductor in early February and, to a lesser extent, revenue from the acquisition of NuCrypt in early March. Excluding the LSI and NuCrypt contributions, QCI revenue for the first quarter totaled $204,000, consisting primarily of deliveries of foundry orders and work on an R&D subcontract for NASA. Operating expenses for the first quarter totaled $19.8 million compared to $8.3 million in the same quarter last year. The increase in operating expenses was due to a substantial increase in staff, including administrative, technicians, engineering, and scientific, which resulted in increased R&D expenses, product development, and sales and marketing expenses. Sales and marketing expenses for the quarter were $1.6 million compared to $0.7 million in the prior year, increasing primarily as a result of employee compensation costs, customer lead generation activities, trade show participation, advertising, and other marketing and selling costs. General and administrative expenses for the quarter were $11.3 million compared to $4.6 million in the prior year, increasing primarily due to substantial M&A transaction expenses in the quarter for the new Crypt and LSI transactions. We reported a net loss of $4.1 million for the first quarter, or $0.02 per share, compared to net income of $17 million in the first quarter of 2025, or $0.13 per share. To put this change in the proper context, as previously reported, the $17 million net income in the first quarter of 2025 was primarily attributable to a $23.6 million non-cash gain on the mark-to-market of the company's derivative liability, which relates to warrants issued for our merger with Q-Photon in June of 2022. Our balance sheet continues to be strong. We reported cash, cash equivalents, and investments of $1.4 billion at March 31, 2026, compared to $1.5 billion at December 31, 2025. Interest income in the first quarter of 26 was $13.5 million, up from $1.7 million in the prior year period. At March 31, 2026, total assets were $1.6 billion, relatively unchanged compared to December 31 of 2025. Stockholders' equity was also $1.6 billion at March 31, 2026, again, essentially unchanged compared to year-end 2025. Our contract backlog as of March 31 was strong at $16 million. dollars. And now I'll turn the call back over to you, Peng.

Thank you, Chris. As we move through the remainder of the year, so we are intently focused on investing in our team across engineering, research, and production, converting a growing pipeline of commercial and government engagement into recurrent revenue, strengthening our fabrication capabilities, and executing on both organic and inorganic growth opportunities to drive long-term value creation. We have a very strong balance sheet and healthy backlog, and we are energized by the path in front of us as we continue advancing our mission of putting quantum-enabled solutions into the hands of people. As always, thank you for your ongoing support. We look forward to keeping you apprised of our progress as we continue to move through the year. With that, we will now open the call for the questions. Operator, please go ahead.

Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like 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 pull for questions. The first question today is coming from John McPeak from Rosenblatt Securities. John, your line is live.

Oh, thank you. And congrats on completing the acquisitions, Chris and Yuping. Thank you.

Thank you, John.

One question kind of forks into two. Where are we with the R&D effort on the next Iraq and then also your gate-based quantum computer? Maybe you could just talk a little bit about that, Yuping.

Yep, we have made very good progress on the next version of the Dirac machine. In fact, we are in the phase of internal testing and in fact, every day. So when I come to the lab, people are telling me some exciting new results. I hope that we will be able to complete the last steps and put this in front of some early users this is on the direct machines for the gate based we are making good progress on two fronts one front is that we continue our engineering designs so that we can push up our gate fidelity on the theoretical front and now as we talked before John so we actually have spent quite a few years on this and we believe that we figured everything out on the theoretical and engineering side to construct gate based machine on the other hand to realize photon photon interaction gates is crucial for us to get extremely high quality on photonic circuits in something this and I bait and based on our patent technology so on the fab side we have made a good progress in optimizing our recipe so that we can meet those very high requirements for the photons to interact strongly with each other so yep on the gate based machines we have made a good progress but there is still some way for us some way some ahead of us for us to test our prototypes. We have not started to make the prototypes yet. Instead, we are testing our photonic integrated circuits at this time.

Well, that modality looks like it's the other companies that are attempting to produce gate-based photonic computers. You know, they're talking a fair ways out, right, because of the technology issues you're talking about. Do you feel like you'll be in the mix when other companies are starting to deliver theirs?

Let me put it this way, John. so we chose our gate based approach to be scalable so instead of trying to demonstrate as some proof of concept from the very beginning we have designed our gate based machines so that once we can test the principle on the prototype we can quickly scale up in terms both of the gate circuit depth and the number of qubits so right now we are looking at overcoming the last final hurdle on the engineering side and with that overcome so we should be able to quickly ramp up so this is why although we started relatively later than some other players on the skate base machine but I'm confident that as we figure out the final steps of engineering so we can quickly catch up and remember that the advantage of our approach is that is very scalable and it runs at room temperature and everything is chip integrated all right well I look forward to hearing more in the future thank you I'll get back in the queue thank you John thank you the next question is coming from Max Michaelis from Lake Street Capital Max your line is live hey guys thanks for taking my questions just a few thanks for sharing some of the data around backlog so I was 16 million at

the end of the quarter is there any way you can give us sort of any insight on how that's trended now that we're a little deeper into Q2 no you guys aren't given specific guidance but maybe a little bit help on how that backlogs trended throughout the past couple weeks?

Well, what we're finding, Max, is that the customer community is very pleased with the combination of the companies. Some of the risks that was associated with the Luminar bankruptcy has dissipated. We are pursuing a lot of... There's nothing I can specifically announce today, but what I will say is that We are seeing a pickup in our business development activity and the pipeline. And I think we'll have a lot going forward. But, yes, the reaction of the market has been positive, and our sales activity reflects that.

Awesome. And then the last one from me. So Luminar and then NewCrypt were the two acquisitions. Give us an idea on what some of the areas you guys are probably headed towards next. Probably can't share a lot, but give us sort of an idea on what's kind of at the top of mind for you guys in terms of importance in filling out your platform.

Yeah, I can answer this question, Max. I have announced that over the next few years we focus on transition from a tech innovation company to a volume production company. So we have been very happy with the acquisition of Lumina Semi and the new CRIB really enhanced our depth and also the breadth of the technology engineering and manufacturing capabilities. Going forward, so we will continue to execute our roadmap as we published our website last year. so we are looking to execute our FAP2 plan and I did make a promise that we will get our FAP2 started and this is what we're focusing on now and it looks like we have some pretty exciting development on that front as well so we

hope to to keep the community updated on that as we make progress all right thanks guys and once again it will be star 1 on your phone at any time if you wish to ask a question today and the next question is coming from Antoine Legault from Wedbush Securities. Antoine, your line is live.

Thank you, and thanks for taking my questions. I need to add on to what Max was asking about LSI and UCRIP. On those integrations, you mentioned that these companies bring established capabilities in lasers, detectors, advanced packaging, broad R&D manufacturing capabilities.

Can you give us a sense of the financial synergies, and more importantly, the technical synergies that you expect to realize with these two recent acquisitions and just how are the integrations coming along if you can share a bit more on that thank you uh sure let me answer the question on the tax energy and chris can answer the financial synergy so on the tax side on the tech side um as we discussed in the past our goal is to give it up complete quantum product and solutions and for such we needed to have not only our core quantum non optical technology and circuits but also photonics products and the controlling electronics for example With Lumina Semi, so they have various jointing on the lasers, photo diodes, and on optical packaging and testing. We in fact have launched a handful of initiatives leveraging their team and manufacturing capabilities to advance our quantum device and the systems development and in the meanwhile so now we are working with them to develop and commercialize photonics for quantum as many of you know quantum technology requires some specialty photonic component in the circuits and now we have a team who understand both photonics and quantum so I think we are in a very unique position to provide solutions and become a supply for photonics for quantum so this is on the on the tax energy side from ways and lumina semiconductor and the new crib actually so we already have very high synergy in the areas of quantum communications technology and assistance in fact our approach to quantum communication are complementary to each other with NUCRIP we offer a complete toolbox and a whole suite of quantum communications technology that should be able to meet the needs of the majority of the customers Chris would to talk about the synergy on the on the other side sure there's a really good question and yeah the short answer is that companies are all small so there's

not like there's a big back office processing center that we can consolidate with another one however now that we are close to 200 people we're able to get better bids on things like point benefits insurance is a little bit more cost-effective there are some things that benefit from scale the other part that sort of touches on finance but also rolls into what you pay was talking about is that the you know there are some synergies in the business development area, where as a combined entity, we're able to go after some very interesting opportunities by combining either the core QCI technology with the NuGRIP technology or with the LSI technology or some combination of those, and we're able to go after more business than we were before. So there is a synergy there. You don't anticipate a lot of direct cost savings from redundancies, if that's really what you're driving at. All the companies were operating with a fairly lean back office staff, but we are finding that there's some synergistic activity between the different teams and it's going to help us grow and integrate the skill sets of the financial and legal and contract staff of the different companies are complementary. They work well together, and they're making us more effective. So I hope that answers your question.

It does, and thank you both for the very comprehensive answers. The last quick one for me, on Fab One, you mentioned, you know, you're ramping small batch manufacturing, and it's begun to generate early revenue. Can you give us a sense of the expected ramp in revenue from here through the rest of the year and, you know, into 2026? You know, can you just compare and contrast that, compared to the revenue you expected to generate from the LSI acquisition, which I believe had been, you had pointed to 20 to 25 million in annual run rate.

But beyond that, is there any other you know contribution from your your fab one manufacturing revenue thank you you can let me take that one as we disclosed in the press release and I tend to our of our 200 and some odd thousand revenue 120 some odd thousand was directly from boundary related sales which is a four or five fold increase over fourth quarter of 25 and as we get better at processing these these advanced circuit designs we're confident that that is going to continue to grow probably not at a dramatic pace but we're we're getting better at it and putting together a chip fabrication facility is something that is not just a matter of plugging in the machines and you know turning them on there's a lot of know-how and skill that goes into putting together these advanced prototype show sets the contribution of the fab is several orders of magnitude below what we're seeing from Luminar and it probably will remain a small this considerably smaller but we are expecting at that to grow as we're able

to successfully deliver these prototype chips and interact with the the customers hopefully get follow-on orders and take it from there yeah I I just wanted to add that we did not applying for that one to become an engine of revenue so instead is in our strategic strategic plan so we are looking at that one as our engine for innovation and chip production validation as a necessary and very helpful step to our fact too so we are using that one to understand better what it takes for us to get into the volume production of the chips because we needed to first develop and stabilize lots of recipe as Chris set. It is not just to turn the machine and you will automatically get a lot of the chips, a lot of work to do to develop the know-how and later transfer this know-how to all FAP2.

Understood. Thank you so much.

Thank you, Tony.

Thank you. The next question will be from Troy Jensen from Encounter Fitzgerald.

Troy your line is live hey gentlemen thanks for sneaking me in here a couple questions for Chris first of all just gross margins I'm just thinking I made them some one-time stuff in the March quarter I mean kind of going forward as LSI is more fully integrated we have a full quarter our gross margins more in like the 25 to 30 35 percent range or any help on that great sure I appreciate sure you're picking up on that.

Yeah, gross margins came in pretty low, and what's driving that is underutilization. As you probably understand, the chip business is very capital intensive, and the capital equipment, once you turn it on and start using it, you have to amortize that. And when the utilization of the facility falls below a certain point, You used to have a lot of costs with relatively little revenue to offset it, and that was what affected the gross margins in Q1. We started recognizing revenue in Fab 1, but that required us to recognize a lot of the production overhead costs, which is just part of accounting. Same thing with Luminar. They're coming out of the Luminar technology bankruptcy, going through a phase where the production volume was a little on the low side, so there's a lot of unabsorbed costs that hit the gross margins. We should be able to get back to 20%, 30% as volume picks up, but I can't really tell you exactly how long it's going to take to get there.

Understood. That was helpful enough. Also, can you just give us a little color on the OpEx lines? You mentioned a lot of M&A-related expense in G&A. So, I mean, if you strip that out and think of kind of a normal G&A quarter, and on the flip side, I think R&D should go up because you've got a full quarter of LSI here. Just thoughts on kind of OpEx sequentially here.

Okay. Yeah, M&A costs were close to $6 million just in the first quarter. There's a lot of legal fees and due diligence fees and banker fees. So it's just an expensive process. And that did cause a spike in the G&A. In terms of other run rate, keep in mind that in the first quarter, we added the management costs or G&A cost of two other, Luminar and LSI and Duke Crypt to the total. So there was just more people and more G&A-related expenses. The increase was in line with what we would expect, given that QCI's core staff was 75 people and brought on another 100 people in the first quarter. So most of the costs, other than the M&A-related external costs, really are driven by the increase in headcount.

All right, guys. Thanks. Good luck going forward.

Thank you. Appreciate your joining the call. Thank you, Julie.

Thank you. The next question will be from Nihal Chokshi from Northland Capital. Nihal, your line is live.

Yeah, thank you, and congrats on the acquisitions, especially the Lubera one. I really like that one. Very nice. So, just to put a point on it, can you just explicitly say what is the new quarterly OpEx run rate with these acquisitions now folded in?

I don't really have that number at this point. So, I'm going to dodge that question for the moment. All right. That's fine.

Can you describe the final engineering hurdle in more detail that's being currently worked on in response to one of the questions that was asked earlier today here?

You're talking about the Dirac 3 capability hurdle or the gate model hurdle? Okay. Okay.

Okay. So, get model hurdle. Very good question, Nihao. So, you know that I've been thinking about this question of how to build a room temperature quantum computer for over 10 years. In fact, it's close to 15 years. I have I believe that figured out everything on the technology and the physics side but the last remaining hurdle is really on the engineering side in fact through our validated simulation and is based on many of our proof of concept experiments we have identified that we have to achieve five pretty extreme conditions for the photons to interact strongly with each other so that is really to bring the non-linear optics optics to the single photon level and so far so we have achieved four and a half the other half is that we needed to increase the quality factor of our micro ring resonators to be about 10 million and I can tell you that right now so we are at a mark of 2 million and of course we have the recipe and then we also have done a lot of tests to have find a way to get it to the 10 million thinking right now this is something that I'm pretty confident that we can achieve and but just I needed to get get our engineers and in our fat one a little bit more time so that they can consistently achieve over 10 million on the chips that we make because eventually it is not that we needed just one gate we needed to integrate tens of hundreds of gates on a single inch square chip so this is the last engineer heard bone that's great thank you for that detail and then you also mentioned that there are some specialty photonics components for quantum which particular components are you talking about that that's specific quantum yep for example so the way that we create on the entanglement in photonics is by using a laser to drive what people call spontaneous parametric down-conversion process and in order to have very high purity in the generated entangled photon pairs you have to start with very high quality laser with narrow language and with almost zero phase noise especially especially in the wavelength channels of the entangled photons so you have to make sure that the laser itself is a very clean and this requirement is very strong and oftentimes say it is only pertaining to such quantum entanglement generation process and another is that as you know for quantum we have to minimize the losses and because if a photon is lost is lost and the game is over so we really needed to minimize the loss all the way through the transmission line And this is hard, and this is also a unique requirement for quantum. There are other special requirements for photonic devices suitable for quantum applications. Okay.

Thank you very much for the explanation.

Thank you, Nihao.

Thank you.

And the next question will be from Ed Wu from Ascendian Capital. at your line of life congratulations on all the progress my question is you know quantum typically focused on domestic opportunities now with the acquisition of new crypt and LSI that diversify your potential revenue a geographic reach yes in fact new crib was one of the very first companies in the U.S. to have started commercializing quantum communication technology so they have sold the product to quite a few countries in the world and we certainly plan to tap on the successes and use the pipeline to expand our overseas commercial presence and EM4 they already have strong base in the defense and aerospace not only in the US but also in Europe so this is also an area that we will continue to support and potentially grow and also you utilize those pipelines and to quickly expand our quantum product market thanks for answering my questions and I wish you guys good luck thank you thank you much thank you this does conclude today's Q&A session I will now turn the call over to management for final remarks thank you for your time really appreciate you join our call and those questions should they you have any further question please feel free to reach out to our investor relations I wish everybody a great rest of your day thank you thank you This does conclude today's conference.

You may disconnect your lines at this time. Thank you for your participation.