8-K/A - QUBT - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment No.1

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securitiesand Exchange Act of 1934

Date of Report (Date of earliest event reported): June 16, 2022

QUANTUM COMPUTING INC.

(Exact name of registrant as specified in itscharter)

Delaware	001-40615	82-4533053
(State or Other Jurisdiction	(Commission File Number)	(I.R.S. Employer
of Incorporation)		Identification No.)

215 Depot Court SE, Suite 215

Leesburg, VA 20175

(Address of Principal Executive Office) (ZipCode)

(

703) 436-2161

(Registrant’s telephone number, includingarea code)

(Former Name or Address, if Changed Since LastReport)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written<br>communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting<br>material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
---	---
☐	Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement<br>communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
---	---

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.0001	QUBT	The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

On June 21, 2022, Quantum Computing Inc. (the “Company”) filed a Current Report on Form 8-K (the “Initial Report”) to report the closing of a merger agreement dated June 16, 2022 (the “Merger Agreement”), by and among the Company, Project Alpha Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), Project Alpha Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), QPhoton, Inc., a Delaware corporation (“QPhoton”), and Yuping Huang, the principal stockholder of QPhoton (“Mr. Huang”), whereby the Company agreed to acquire QPhoton through a series of merger transactions (collectively with the other transactions contemplated by the Merger Agreement, the “Transactions”).

This Current Report on Form 8-K/A (this “Amendment”) amends and supplements the Initial Report to provide financial statements of QPhoton, and the pro forma financial statements of the Company required by Item 9.01 of Form 8-K. No other modifications to the Initial Report are being made by this Amendment. This Amendment should be read in connection with the Initial Report, which provides a more complete description of the Purchase Agreement and transactions contemplated thereby.

Item 9.01. Exhibits.

(a) Financial statements of businesses or fundsacquired.

The audited financial statements of QPhoton as of and for the years ended December 31, 2021 and 2020, together with the related notes to the financial statements, are included as Exhibit 99.1 to this Current Report.

The unaudited condensed financial statements of QPhoton as of March 31, 2022 and December 31, 2021 and, together with the related unaudited notes to the financial statements, are included as Exhibit 99.2 to this Current Report and are incorporated herein by reference.

(b) Pro Forma Financial Information.

The unaudited pro forma combined financial statements of the Company and QPhoton as of March 31, 2022 and for the year ended December 31, 2021, together with the related notes to the unaudited pro forma condensed combined financial information, are included as Exhibit 99.3 to this Current Report and are incorporated herein by reference.

(d) Exhibits*.*

Exhibit Number	Description
23.1	Consent of BF Borgers CPA PC
99.1	Audited consolidated financial statements of QPhoton, Inc. as of and for the years ended December 31, 2021 and 2020, together with the related notes to the consolidated financial statements.
99.2	Unaudited condensed consolidated financial statements of QPhoton, Inc. as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2021 and 2020 together with the related unaudited notes to the condensed financial statements.
99.3	Unaudited Pro Forma Combined Financial Statements of Quantum Computing Inc. as of March 31, 2022 and for the year ended December 31, 2021.
104	Cover Page Interactive<br> Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	QUANTUM COMPUTING INC.
Dated: September 1, 2022	By:	/s/ Christopher Roberts
		Christopher Roberts
		Principal Financial Officer and<br><br>Principal Accounting Officer

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

We hereby consent to the incorporation in this Form 8-K-A of our reports dated September 1, 2022, relating to the financial statements of QPhoton, Inc. as of December 31, 2021 and 2020 and to all references to our firm included in this 8-K-A.

Certified Public Accountants

Lakewood, CO

September 1, 2022

Exhibit 99.1

QPHOTON, INC.

Consolidated Financial Statements

Years ended 2021 and 2020

And Independent Auditors’ Report

CONTENTS

Description	Page
Independent Auditors’ Report	F-2
Audited Balance Sheets as of December 31, 2022 and 2021	F-3
Audited Statement of Operations for the Twelve Months Ended December 31, 2021 and 2020	F-4
Audited Statement of Stockholders’ Deficit for the Twelve Months Ended March 31, 2021	F-5
Audited Statement of Stockholders’ Deficit for the Twelve Months Ended March 31, 2020	F-6
Audited Statement of Cash Flows for the Twelve Months Ended December 31, 2021 and 2020	F-7
Notes to the Audited Financial Statements	F-8

F-1

Report of Independent Registered Public AccountingFirm

To the shareholders and the board of directors of QPhoton, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of QPhoton, Inc. (the “Company” or “QPhoton”) as of December 31, 2021 and 2020, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Substantial Doubt about the Company’sAbility to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company’s auditor since 2022

Lakewood, CO

May 10, 2022

F-2

QPHOTON, INC.

Balance Sheets

(Audited)

			December 31,
			2020
ASSETS
Current assets
Cash and cash equivalents	105,204		$	-
Accounts Receivable	-			-
Prepaid expenses	3,538			2,500
Fixed assets (net of depreciation)	56,827			-
Other Assets
Security Deposits	2,652			-
Total assets	168,221		$	2,500
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	86,263		$	160,041
Accrued expenses	55,288			672,223
Other liabilities
Promissory notes	209,151
Derivative liability	615,193
Accrued interest	21,572
Total liabilities	987,467			832,264
Stockholders’ equity (deficit)
Common stock, 0.0001 par value, 10,000,000 shares authorized; 6,172,842 shares issued and outstanding as of December 31, 2021	618			-
Additional paid-in capital	1,433,806			14,788
Accumulated deficit	(2,253,670	)		(844,552	)
Total stockholders’ equity (deficit)	(819,246	)		(829,764	)
Total liabilities and stockholders’ equity (deficit)	168,221		$	2,500

All values are in US Dollars.

The accompanying notes are an integral partof these unaudited consolidated financial statements.

F-3

QPHOTON, INC.

Statement of Operations

(Audited)

	Twelve Months Ended
	December 31,
	2021			2020
Total revenue	$	-		$	-
Cost of revenue		-
Gross profit
Salaries and Benefits		120,035			-
Research & Development		76,431			832,264
Stock Based Compensation		747,414			-
Selling General & Administrative -Other		119,362			12,288
Operating expenses		1,063,242			844,552
Loss from Operations		(1,063,242	)		(844,552	)
Other Income and Expense
Interest Income		-			-
Interest Expense – Promissory Notes		21,802			-
Interest Expense - Beneficial conversion feature		208,922			-
Interest Expense – Derivatives mark-to-market		115,152			-
Interest Expense – Financing expenses		-			-
Net Other income (expense)		(345,876	)		-
Federal income tax expense		-			-
Net loss	$	(1,409,118	)	$	(844,552	)
Weighted average shares - basic and diluted		5,214,964			-
Loss per share – basic and diluted	$	(0.27	)		-

The accompanying notes are an integral partof these unaudited consolidated financial statements.

F-4

QPHOTON, INC.

Statement of Stockholders’ Deficit

For the Twelve Months Ended December 31, 2021

(audited)

	Common Stock				Additional		Accumulated
	Shares		Amount		Paid in Capital		Deficit			Total
BALANCES, December 31, 2020		-	$	-	$	14,788	$	(844,552	)	$	(829,764	)
Contribution from related party		-		-		-		-			-
Merger consideration		5,000,000		500		-		-			500
Issuance of shares for license agreement		555,556		56		672,166		-			672,222
Issuance of shares for services		617,284		62		746,852		-			746,914
Net loss		-		-		-		(1,409,118	)		(1,409,118	)
BALANCES, December 31, 2021		6,172,840	$	618	$	1,433,806	$	(2,253,670	)	$	(819,246	)

The accompanying notes are an integral partof these audited financial statements.

F-5

QPHOTON, INC.

Statement of Stockholders’ Deficit

For the Twelve Months Ended December 31, 2020

(Audited)

****	Common Stock				Additional		Accumulated		****	****		****
****	Shares		Amount		Paid in Capital		Deficit		****	Total		****
BALANCES, December 31, 2019		-	$	-		-	$	-		$	-
Contribution from related party		-		-		14,788		-			14,788
Issuance of shares for services		-		-		-		-			-
Net loss		-		-		-		(844,552	)		(844,552	)
BALANCES, December 31, 2020		-	$	-	$	14,788	$	(844,552	)	$	(829,764

The accompanying notes are an integral partof these audited financial statements.

F-6

QPHOTON, INC.

Statement of Cash Flows

For the Twelve Months Ended December 31, 2021

(Audited)

	Twelve Months Ended <br> December 31, <br> 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,409,118	)	)
Adjustments to reconcile net income (loss) to net cash
Accounts Receivable
Prepaid Expenses		(3,538	)
Depreciation		8,713
Accounts Payable		(73,780	)
Accrued Expenses		(595,913	)
Stock-based compensation		1,419,636
Convertible loan derivative – mark to market		115,152
Convertible loan discount		209,151
CASH USED IN OPERATING ACTIVITIES		(329,697	)	)
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed Assets – Property and Equipment		(65,540	)
Security Deposit		(151	)	)
CASH USED IN INVESTING ACTIVITIES		(65,691	)	)
CASH FLOWS FROM FINANCING ACTIVITIES
Contribution from related party
Proceeds from loans		500,592
CASH PROVIDED BY FINANCING ACTIVITIES		500,592
Net increase (decrease) in cash		105,204
Cash, beginning of period		-
Cash, end of period	$	105,204
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$	-
Cash paid for income taxes	$	-
NON-CASH FINANCING ACTIVITIES
Debt discount on convertible notes	$	500,592

All values are in US Dollars.

The accompanying notes are an integral partof these consolidated financial statements.

F-7

QPHOTON, INC.

Notes to Financial Statements

December 31, 2021 and 2020

(Audited)

Note 1. Nature of Operations and Going Concern

QPhoton, Inc., (formerly QPhoton, LLC, hereinafter the “Company”), headquartered in Hoboken, New Jersey, was incorporated in the state of Delaware on February 18, 2021. The Company was originally formed as a Limited Liability Corporation (“LLC”) on January 23, 2020 in the state of New Jersey. On February 23, 2021, Pursuant to the Agreement and Plan of Merger (“the Merger”) with QPhoton, Inc. the Company was converted from a New Jersey LLC into a Delaware corporation. The Company was formed to develop and commercialize a nanophotonic quantum-powered platform that will transform numerous critical areas of industry, including defense, healthcare, finance, network communications, and computer vision.

On March 1, 2021, the Company, entered into an assignment and assumption of the license agreements with the Trustees of Stevens Institute of Technology, (“Stevens”, “the University”) a non-profit university of the State of New Jersey. QPhoton, LLC originally entered their respective license agreements with the University in December of 2020. The members of the QPhoton LLC into and consummated transactions pursuant to a stock purchase agreement (the “Agreement”), whereby the Company agreed to issue to the University 555,556 shares (see Note 8) of the Company’s common stock. Pursuant to the agreement, the Company assumed in full, all rights, privileges and preferences associated with both the licensed technology.

Pursuant to the merger agreement, effective February 18, 2021, the Company’s board of directors (“Board”) authorized 10,000,000 shares of common stock, at a $0.0001 par value per share. The sole member of QPhoton, LLC in exchange for his membership interest, received 5,000,000 shares of common stock as part of the merger. Accordingly, all share and per share data appearing in the financial statements have been adjusted to reflect the merger on a retroactive basis.

Going Concern and Management’s Plan

Since inception, the Company has incurred significant losses from operations and has not generated positive cash flows from operations. In addition, as of December 31, 2021, the Company does not have any revenue stream to support its cost structure. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of approximately $2,254,000 and $845,000 as of December 31, 2021 and 2020, respectively. As of December 31, 2021, the Company had a working capital deficiency of a $32,809, and as of December 31, 2020, the Company had a working capital deficiency of $832,264.

The Company’s loss from operations has been funded with the proceeds of equity financings and notes payables from related parties. We expect to operate at a loss for the foreseeable future while we execute our business plan to obtain regulatory approval and commercially launch the product in the United States and foreign jurisdictions. We have limited capital resources and operations have been funded by the proceeds of equity offerings and related party debt. We will require additional financing to implement our business plan. We believe that we have access to capital resources through the sale of equity securities; however, we have not secured any commitments for new financing at this time. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern over the next 12 months from the issuance date of these financial statements. The financial statements do not include any adjustments that might result from this uncertainty. Subsequent to year end, the Company received $2.500,000 as part of bridge financing with Quantum Computing, Inc. (“Quantum”), a registered public company with the Securities and Exchange Committee (“SEC”), see note 10, subsequent events for more information.

COVID-19

COVID-19, which was declared a global health pandemic by the World Health Organization in March 2020, has driven the implementation and continuation of significant government-imposed measures to prevent or reduce its spread, including travel restrictions, “shelter in place” orders, and business closures. Although to date, the Company has not been adversely affected by COVID-19, the measures taken by the governments of countries affected could adversely affect the Company’s business, financial condition, and results of operations.

The U.S. has recently seen decreases in total new COVID-19 infections; however, it is unknown whether such decreases will continue, new strains of the virus will cause numbers to increase, currently projected vaccine efficacy numbers will hold, or new strains of the virus will become dominate in the future, and/or whether jurisdictions in which we operate, will issue new or expanded stay-at-home orders, or how those orders, or others, may affect our operations.

F-8

Note2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC, involves the use of estimates and assumptions that affect the recorded amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the accounts payable and accrued expenses, equity related transactions and deferred taxes. Actual results may differ substantially from these estimates.

Property and Equipment

Property and Equipment are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which for all property is five years. Maintenance and repairs are charged against expense as incurred.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal depository insurance coverage (“FDIC”) of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts*.*

Fair Value Measurements

The carrying amount of the Company’s financial instruments classified as current assets and current liabilities approximate fair values based on the short-term nature of the accounts.

Stock Based Compensation

The Company has adopted Accounting Standards Update (“ASU”) No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards, and that Topic 718 does not apply to share based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers

Stock-based compensation expense is recorded for all option grants and awards of non-vested stock and recognized in the financial statements based on the grant date fair value of the awards granted. Stock-based compensation is recognized as expense over the requisite service period, which generally represents the vesting period. The Company calculates the fair value of stock options using the Black-Scholes option-pricing model at grant date. There were no options or warrants granted during the years ended December 31, 2021 and 2020 and no options outstanding at December 31, 2021 and 2020.

Research and Development Costs

Research and development costs include costs directly attributable to the conduct of research and development programs, including the cost of services provided by outside contractors, acquiring work-in-progress intellectual property, development, and mandatory compliance fees and contractual obligations. All costs associated with research and development are expensed as incurred.

F-9

Income Taxes

Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in the valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties, which allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. The Company has not incurred any interest and penalties, however when incurred in potential future period, the Company will include in income tax expense in the accompanying statements of operations in the period they become determinable.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its financial position or results of operations upon adoption.

In February 2016, FASB issued ASU No. 2016-02, Leases(Topic 842) which supersedes FASB Topic 840, Leases and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The Company adopted this standard on January 1, 2019. There was no impact from adoption as the Company has no long-term leases.

In July 2017, the FASB issued ASU 2017-11, EarningsPer Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for CertainFinancial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instrumentsof Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, (ASU 2017-11). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2017-11 on its financial statements as of January 1, 2020. There was no material impact to the financial statements as a result of the adoption.

In August 2020, the FASB issued ASU 2020-06, Accountingfor Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company is currently evaluating the impact the adoption of ASU 2020-06 will have on its financial position, results of operations and disclosures.

F-10

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the impact of this standard on its financial statements and related disclosures.

Note 3. Property and Equipment

Property and equipment consisted of the following:

	As of December 31,
	2021		2020
Property and equipment	$	65,540	$	-
Less accumulated depreciation		8,713		-
Property and equipment, net	$	56,827	$	-

Depreciation expense was $8,713 and $0 for the fiscal years ended December 31, 2021 and 2020, respectively, and is classified in general and administrative expenses in the Statements of Operations.

Note 4. License Agreement – Stevens Institute of Technology

Effective December 17^th^, 2020, the Company signed a License Agreement with the University. The agreement enables the Company to commercially use technology such as licensed patents, licensed patent applications and licensed “Know-How”. The Company is also able to issue sublicenses for the technology under the agreement. The agreement is effective until the later of: (i) the 30-year anniversary of the effective date, or (ii) the expiration of the licensed patent or licensed patent application that is last to expire.

During the term of the agreement and prior to any commercialization or sublicensing of the technology by the Company, the Company shall be required to submit annual reports to the University reporting on all research, development, and efforts toward commercialization and/or sublicensing made during the year. Once any commercialization and/or sublicensing has been initiated, the Company shall deliver quarterly reports to the University reporting on the revenue received by the Company, all sublicenses derived from the sale of licensed products, and the net sales price associated with each transaction.

Upon execution of the agreement the Company paid Stevens $125,041 as reimbursement for patent prosecution expenses incurred by Stevens in prior periods. For the year ending December 31, 2021, the Company accrued an additional $48,431 in reimbursable expenses for patent costs incurred by Stevens between February 2021 and October 2021. The Company is also responsible for reimbursing Stevens for any costs associated with the prosecution and maintenance of the licensed patents and licensed patent applications.

Consideration for the agreement

As consideration for the license and other rights granted under the agreement, the company agreed to pay the following: (i) $35,000 within 30 days of execution of the agreement, (ii) $28,000 within 30 days of each annual anniversary of the effective date, (iii) equity in the Company equivalent to nine percent of the membership units of the Company within 30 days of the execution of the agreement, and (iv) royalties of 3.5% of the Net Sales Price of each licensed product sold or licensed by the company during the quarter then-ended, for which it also received payment, concurrent with the delivery of the relevant quarterly report.

F-11

The company has recorded all consideration related to the costs associated with the maintenance and prosecution of the patents as Patents Fees. The remaining consideration associated with the University agreement is recorded as License Fees. Patent Fees and License Fees are considered a part of Research and Development expenses. Accounts Payable related to cash-based License Fees for the years ended December 31, 2020 and December 31, 2021 were $832,264 and $28,000, respectively. The company recognized $672,223 of License Fees and Stock to be issued for the year ended December 31, 2020, which fully satisfied the equity consideration owed to the University. The equity was issued under a Stock Purchase agreement during 2021. See Note 8 – Stock Owner’s (Deficit) Equity for information related to this stock issuance.

As of December 31, 2021, the Company has not yet begun to commercialize or sublicense any of the licensed technology and therefore does not owe the University any royalties.

Note 5. Accounts Payable and Accrued Expenses

Accrued expenses consist of the following:

	As of
	December 31, <br><br>2021		December 31,<br><br> 2020
Legal and Professional Fees	$	65,120	$	-
Accrued License Fees – Stevens		28,000		35,000
License Fee Acquisition Costs		-		672,223
Accrued Patent Fees - Stevens		48,431		125,041
Total	$	141,551	$	832,264

Note6. Debt

Convertible Notes Payable – BV AdvisoryPartners, LLC

On March 1, March 14^th^, and July 9^th^, 2021, the Company and BV Advisory Partners, LLC (“BV”), a related party shareholder, entered into three various convertible debt agreements for $200,592, $150,000, and $150,000, respectively, for a total $500,592 in the aggregate. The notes all bear interest at a rate of 6% per annum and mature 2 years from the grant date. Accordingly, the Company only received approximately $375,000 in cash proceeds as $125,041 was paid by BV Advisor directly to the University on behalf of the Company, to satisfy the Company’s obligations to reimburse costs incurred under by the terms of the License agreement with the University. See Note 4 – License Agreement – Stevens Institute of Technology.

On March 1, 2021, the Company entered into a Note Purchase Agreement with BV. Under the Note Purchase Agreement, the Company would issue a series of preferred stock in which BV is the lead investor. The Company would receive as consideration at least $2.5 million in gross proceeds excluding the aggregate amounts of notes, simple agreements for future equity, and any other convertible promissory notes or other indebtedness which convert into equity securities issued under the Note Purchase Agreement to BV. Pursuant to the Note Purchase Agreement the Company issued 617,284 shares of common stock to BV Advisory, See Note 8 – Stockholders’ (Deficit) Equity for information related to this stock issuance.

As of December 31, 2021, the Company had total principal outstanding related to the convertible notes payable balance of $500,591 and $0 as of December 31, 2021, and December 31, 2020, respectively. Additionally, the Company accrued interest on the loans of $21,572 and $0 as of December 31, 2021 and December 31, 2020, respectively. As of December 31, 2021, there was $522,164 in total outstanding principal and interest.

F-12

The note is convertible into shares of preferred stock at a conversion price of 75% of the per share offering price of a qualified financing event which the agreement defines as “a transaction or series of transactions with the principal purpose of raising capital pursuant to the which the Company issues and sells shares of its preferred stock for aggregate gross proceeds of at least $5,000,000 (excluding all proceeds from the incurrence of indebtedness, including the Notes, that is convertible into such preferred stock, or otherwise canceled in consideration for the issuance of such preferred stock). Management evaluated the accounting guidance for embedded conversion features and determined that the embedded conversion feature requires to be bifurcated under ASC Topic 815 Derivatives and Hedging and therefore, the convertible debt instrument includes accounting for a derivative liability. The Company calculated the fair value of the derivative liability at $677,576 using the Black-Scholes pricing model at the Note Purchase Agreement date. As of December 31, 2021, the Company realized a derivative liability gain of $62,383, reducing the balance of the convertible note derivative liability to $615,192.

Note 7. Contractual Obligations, Commitmentsand Contingencies

Legal

Periodically, the Company reviews the status of any significant matters that exist and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. As of December 31, 2021 and 2020 there are no pending claims or litigation that could materially affect the Company results going forward.

Note 8. Stockholders’ (Deficit) Equity

Common Stock

The Company’s Certificate of Incorporation stated on February 18, 2021 provides that the Company is authorized to issue 10,000,000 million shares of Common Stock. Holders of Common Stock are entitled to one vote per share. As of December 31, 2021 and 2020, the Company had shares of common stock outstanding of 6,172,840. As explained in Note 1 on the financial statements, on February 18, 2021, the Board and stockholders of the Company approved the merger of QPhoton, LLC into QPhoton, Inc.

Pursuant to the merger, and because of common control as the sole shareholder in the LLC, during the year ended December 31, 2021, the Company issued 5,000,000 shares of common stock, to a related party, in exchange for 100% of the outstanding membership interest of the LLC. The shares were issued at par value and resulted in $500 in stock-based compensation to be expensed during the year ended December 31, 2021.

During the year ended December 31, 2021, the Company issued 555,556 shares in consideration for the Company’s right to obtain intangible property related to QPhoton, LLC to the University (See Note 4). At the time of transfer, the fair value of the right to obtain the license was determined to have a have a $1.21 per share. As such, the Company expensed the costs of the intangible assets as research in development in the amount of $672,223. As of December 31, 2020, the Company had yet to issue the common stock, as a result, the Company recognized a liability as Stock to be issued in the amount of $672,223 (see Note 4), which was included in the Accounts payable and accrued expenses on the balance sheet.

During the year ended, the Company issued 617,284 shares of common stock to BV Advisory, a related party. The stock was issued under a Stock Purchase Agreement dated as of March 1, 2021 (see Note 6). The stock was valued at $1.21 per share and the Company recognized $746,914, in stock-based compensation costs during the year ended December 31, 2021.

Note9. Income Taxes

A reconciliation of the statutory U.S. Federal rate to the Company’s effective tax rate is as follows:

	Year Ended December 31,
	2021			2020
Federal income tax benefit at statutory rate		21.00	%		21.00	%
State income tax, net of federal benefits		5.14	%		5.14	%
Permanent items		-	%		-	%
Change in valuation allowance		(26.14	)%		(26.14	)%
Provision from income taxes		-			-

F-13

The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2021 and 2020 is as follows:

	Year Ended December 31,
	2021			2020
Income before Income taxes	$	(1,409,118	)	$	(844,552	)
Taxes under statutory US tax rates		(295,915	)		(177,356	)
Increase (decrease) in taxes resulting from:
Increase in valuation allowance		379,405			227,396
State Taxes		(83,490	)		(50,040	)
Income tax (expense) benefit	$	-		$	-

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consist of the following:

	Year Ended December 31,
	2021			2020
Deferred tax assets
Net Operating Loss Carryforwards	$	588,997		$	220,724
Total Deferred tax assets		588,997			220,724
Valuation allowance		(588,997	)		(220,724	)
Net deferred tax assets (liabilities)	$	-		$	-

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the utilization of the deductible temporary difference carryforwards. At this time, based on current facts and circumstances, management believes that is not likely that the Company will realize the benefits for its deferred tax assets, and a valuation allowance has been recorded on the same.

The Company does not have any recorded unrecognized tax benefit for uncertain tax positions as of December 31, 2021 and 2020.

Note 10. Subsequent Events

The Company has completed an evaluation of all subsequent events through May 10, 2022, the date the audit opinion was issued, to ensure that this report includes appropriate disclosure of events both recognized in the December 31, 2021 and 2020 financial statements and events which have occurred but were not recognized in the financial statements.

On February 9, 2022, the Company and Quantum Computing Inc. (“QCI”) entered into a letter agreement (the “Exclusivity Agreement”), pursuant to which the Company agreed to negotiate exclusively with QCI regarding a potential sale of the Company or its assets (or similar transaction) for an initial period of 14 days (the “Initial Period”). On February 18, 2022, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with QCI, which automatically extended the Initial Period by 45 days (the “Second Period”). Pursuant to the Note Purchase Agreement, QCI agreed to purchase from the Company two unsecured promissory notes (each, a “Note”), each in the principal amount of $1,250,000, subject to the terms and conditions of the Note Purchase Agreement. Also on February 18, 2022, pursuant to the terms of the Note Purchase Agreement, QCI purchased the first Note from the Company and loaned the principal amount of $1,250,000 to the Company. On April 1, 2022, pursuant to the terms of the Note Purchase Agreement, QCI purchased the second Note from the Company and loaned the principal amount of $1,250,000 to the Company, which automatically extended the Second Period by an additional 30 days, pursuant to the terms of the Note Purchase Agreement.

The Notes issued under the Note Purchase Agreement provide that the indebtedness evidenced by the applicable Note bears simple interest at the rate of 6% per annum (or 15% per annum during the occurrence of an event of default, as defined in the Notes), and becomes due and payable in full on the earlier of (i) March 1, 2023, subject to extension by one year at the option of the Company, (ii) a change of control (as defined in the Notes) of the Company or (iii) an event of default.

There are no other events of a subsequent nature that in management’s opinion are reportable.

F-14

Exhibit99.2

QPHOTON,INC.

Unaudited Condensed Financial Statements

Three Months ended March 31, 2022 and 2021

CONTENTS

Description	Page
Unaudited Balance Sheets as of March 31, 2022 and December 31,2021	F-2
Unaudited Statement of Operations for the Three Months Ended March 31, 2022 and 2021	F-3
Unaudited Statement of Stockholders’ Deficit for the Three Months Ended March 31, 2022	F-4
Unaudited Statement of Stockholders’ Deficit for the Three Months Ended March 31, 2021	F-5
Unaudited Statement of Cash Flows for the Three Months Ended March 31, 2022 and 2021	F-6
Notes to the Unaudited Financial Statements	F-7

F-1

QPHOTON,INC.

Balance Sheets

(Unaudited)

			December 31,
			2021
ASSETS
Current assets
Cash and cash equivalents	1,114,978		$	105,204
Accounts Receivable	-			-
Prepaid expenses	-			3,538
Fixed assets (net of depreciation)	45,911			56,827
Other Assets
Security Deposits	2,652			2,652
Total assets	1,163,541		$	168,221
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	294,731		$	86,261
Accrued expenses	-			55,288
Promissory notes	1,520,868
Derivative liability	632,379
Accrued interest	37,863
Other liabilities
Promissory notes				209,151
Derivative liability				615,193
Accrued interest				21,572
Total liabilities	2,485,841			987,465
Stockholders’ equity (deficit)
Common stock, 0.0001 par value, 10,000,000 shares authorized; 6,172,842 shares issued and outstanding as of March 31, 2022	618			618
Additional paid-in capital	1,439,075			1,433,807
Accumulated deficit	(2,761,993	)		(2,253,669	)
Total stockholders’ equity (deficit)	(1,322,300	)		(819,244	)
Total liabilities and stockholders’ equity (deficit)	1,163,541		$	168,221

All values are in US Dollars.

Theaccompanying notes are an integral part of these unaudited consolidated financial statements.

F-2

QPHOTON,INC.

Statement of Operations

(Unaudited)

	Three Months Ended
	March 31,
	2022			2021
Total revenue	$	-		$	-
Cost of revenue		-
Gross profit		-
Salaries and Benefits		11,560			-
Research & Development		144,832			1,184
Stock Based Compensation		-			747,414
Selling General & Administrative -Other		256,758			36,297
Operating expenses		413,150			784,895
Loss from Operations		(413,150	)		(784,895	)
Other Income and Expense
Interest Income		22			-
Interest Expense – Promissory notes		16,359			1,267
Interest Expense – Beneficial conversion feature		61,649			20,550
Interest Expense – Derivatives mark to market		17,187			173,660
Interest Expense – Financing expenses
Net Other income (expense)		(95,173	)		(195,477	)
Federal income tax expense		-			-
Net loss	$	(508,323	)	$	(980,372	)
Weighted average shares – basic and diluted		5,214,964			5,214,964
Loss per share – basic and diluted	$	(0.10	)		(0.19	)

Theaccompanying notes are an integral part of these unaudited consolidated financial statements.

F-3

QPHOTON,INC.

Statement of Stockholders’ Deficit

For the Three Months Ended March 31, 2022

(Unaudited)

	Common Stock				Additional		Accumulated
	Shares		Amount		Paid in Capital		Deficit			Total
BALANCES, December 31, 2021		6,172,840	$	618	$	1,433,806	$	(2,253,670	)	$	(819,246	)
Issuance of shares for cash		-		-		-		-			-
Contribution from related party		-		-		5,269		-			5,269
Net loss								(508,323	)		(508,323	)
BALANCES, March 31, 2022		6,172,840	$	618	$	1,439,075	$	(2,761,993	)	$	(1,322,300	)

Theaccompanying notes are an integral part of these audited financial statements.

F-4

QPHOTON,INC.

Statement of Stockholders’ Deficit

For the Three Months Ended March 31, 2021

(Unaudited)

	Common Stock				Additional		Accumulated
	Shares		Amount		Paid in Capital		Deficit			Total
BALANCES, December 31, 2020		-	$	-	$	14,788	$	(844,552	)	$	(829,764	)
Issuance of shares for cash		-		-		-		-			-
Merger consideration		5,000,000		500		-		-			500
Issuance of shares for license agreement		555,556		56		672,166		-			672,222
Issuance of shares for services		617,284		62		746,852		-			746,914
Net loss								(980,372	)		(980,372	)
BALANCES, March 31, 2021		6,172,840	$	618	$	1,433,806	$	(1,824,924	)	$	(390,500	)

Theaccompanying notes are an integral part of these audited financial statements.

F-5

QPHOTON,INC.

Statement of Cash Flows

For the Three Months Ended March 31, 2022

(Unaudited)

	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(508,323	)	$	(980,372	)
Adjustments to reconcile net income (loss) to net cash
Prepaid Expenses		3,538
Depreciation		767
Accounts Payable		208,468			(111,322	)
Accrued Expenses		(38,997	)		(671,530	)
Stock-based compensation		-			1,419,637
Convertible loan derivative – mark to market		17,187			173,661
Convertible loan discount		61,717			20,572
CASH USED IN OPERATING ACTIVITIES		(255,643	)		(149,354	)
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed Assets – Property and Equipment		10,149			(44,040	)
CASH USED IN INVESTING ACTIVITIES		10,149			(44,040
CASH FLOWS FROM FINANCING ACTIVITIES
Contribution from related party		5,268
Proceeds from loans		1,250,000			350,592
CASH PROVIDED BY FINANCING ACTIVITIES		1,255,268			350,592
Net increase (decrease) in cash		1,009,775			157,198
Cash, beginning of period		105,204			-
Cash, end of period	$	1,114,978			157,198
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$	-
Cash paid for income taxes	$	-

Theaccompanying notes are an integral part of these consolidated financial statements.

F-6

QPHOTON,INC.

Notes to Financial Statements

March 31, 2022

(Unaudited)

Note1. Nature of Operations

QPhoton, Inc., (the “Company” or “QPhoton”), headquartered in Hoboken, New Jersey, was incorporated in the state of Delaware on February 18, 2021. The Company was originally formed as a Limited Liability Corporation (“LLC”) on January 23, 2020 in the state of New Jersey. On February 23, 2021, Pursuant to the Agreement and Plan of Merger (“the Merger”) with QPhoton, Inc. the Company was converted from a New Jersey LLC into a Delaware corporation. The Company was formed to develop and commercialize a nanophotonic quantum-powered platform that will transform numerous critical areas of industry, including defense, healthcare, finance, network communications, and computer vision.

Pursuant to merger agreement, effective February 18, 2021, the Company’s board of directors (“Board”) authorized 10,000,000 shares of common stock, at a $0.0001 par value per share. The sole member of QPhoton, LLC in exchange for his membership interest, received 5,000,000 shares of common stock as part of the merger. Accordingly, all share and per share data appearing in the financial statements have been adjusted to reflect the merger on a retroactive basis.

GoingConcern and Management’s Plan

Since inception, the Company has incurred significant losses from operations and has not generated positive cash flows from operations. In addition, as of December 31, 2021, the Company does not have any revenue stream to support its cost structure. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of approximately $2,761,993 and $1,824,924 as of March 31, 2022 and 2021, respectively. As of March 31, 2022, the Company had a working capital deficiency of a $1,370,860.

COVID-19

We face continued risks related to Novel Coronavirus (COVID-19) which could significantly disrupt our research and development, operations, sales, and financial results. The COVID-19 global health pandemic which started in March 2020, continues to present business challenges in 2022, primarily in coronavirus related costs, travel delays and restrictions, and delays in supplier deliveries. The COVID 19 pandemic has driven the implementation and continuation of significant government-imposed measures to prevent or reduce its spread, including travel restrictions, “shelter in place” orders, and business closures. Although to date, the Company has not been adversely affected by COVID-19, the measures taken by the governments of countries affected could adversely affect the Company’s business, financial condition, and results of operations. The long term impact of COVID-19 on our operations and financial performance in future periods, including our ability to meet expected schedules, remains uncertain and will depend on future pandemic related developments, including the duration of the pandemic, potential subsequent waves of COVID-19 infections, including new variants, the effectiveness and adoption of COVID-19 vaccines and medicines, and government actions to manage the spread of the disease, which could include vaccine mandates and travel restrictions, are uncertain and cannot be predicted.

F-7

Note2. Significant Accounting Policies

Useof Estimates

Propertyand Equipment

Concentrationof Credit Risk

FairValue Measurements

The carrying amount of the Company’s financial instruments classified as current assets and current liabilities approximate fair values based on the short-term nature of the accounts.

StockBased Compensation

The Company has adopted Accounting Standards Update (“ASU”) No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvementsto Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards, and that Topic 718 does not apply to share based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers

Researchand Development Costs

IncomeTaxes

F-8

RecentAccounting Pronouncements

In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB Topic 840, Leases and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The Company adopted this standard on January 1, 2019. There was no impact from adoption as the Company has no long-term leases.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivativesand Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the IndefiniteDeferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable NoncontrollingInterests with a Scope Exception, (ASU 2017-11). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2017-11 on its financial statements as of January 1, 2020. There was no material impact to the financial statements as a result of the adoption.

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company is currently evaluating the impact the adoption of ASU 2020-06 will have on its financial position, results of operations and disclosures.

F-9

Note3. Property and Equipment

Property and equipment consisted of the following:

	As of March 31,
	2022		2021
Property and equipment	$	55,391	$	65,540
Less accumulated depreciation		9,480		8,713
Property and equipment, net	$	45,911	$	56,827

Depreciation expense was $767 and $0 for the quarters ended March 31, 2022 and 2021, respectively, and is classified in general and administrative expenses in the Statements of Operations.

Note4. License Agreement – Stevens Institute of Technology

Upon execution of the agreement the Company paid Stevens $125,041 as reimbursement for patent prosecution expenses incurred by Stevens in prior periods. For the year ending December 31, 2021, the Company accrued an additional $48,431 in reimbursable expenses for patent costs incurred by Stevens between February 2021 and October 2021, which the Company paid in March 2022. The Company is also responsible for reimbursing Stevens for any costs associated with the prosecution and maintenance of the licensed patents and licensed patent applications.

Considerationfor the agreement

F-10

The company has recorded all consideration related to the costs associated with the maintenance and prosecution of the patents as Patents Fees. The remaining consideration associated with the University agreement is recorded as License Fees. Patent Fees and License Fees are considered a part of Research and Development expenses. Accounts Payable related to cash-based License Fees for the year ended December 31, 2021 was $28,000, which was an outstanding payable as of March 31, 2022. The Company recognized $672,223 of License Fees and Stock to be issued for the year ended December 31, 2020, which fully satisfied the equity consideration owed to the University. The equity was issued under a Stock Purchase agreement during 2021. See Note 8 – Stock Owner’s (Deficit) Equity for information related to this stock issuance.

As of March 31, 2022, the Company has not yet begun to commercialize or sublicense any of the licensed technology and therefore does not owe the University any royalties.

Note5. Accounts Payable and Accrued Expenses

Accrued expenses consist of the following:

	As of
	March 31, 2022		March 31, 2021
Legal and Professional Fees	$	266,731	$	33,649
Accrued License Fees – Stevens		28,000		-
Accrued R&D Costs		-		13,748
–Accrued Rent		-		1,324
Total	$	294,731	$	48,721

Note6. Debt

ConvertibleNotes Payable – BV Advisory Partners, LLC

On March 1, 2021, the Company entered into a Note Purchase Agreement with BV. Under the Note Purchase Agreement, the company would issue a series of preferred stock in which BV is the lead investor. The company would receive as consideration at least $2.5 million in gross proceeds excluding the aggregate amounts of notes, simple agreements for future equity, and any other convertible promissory notes or other indebtedness which convert into equity securities issued under the Note Purchase Agreement to BV. Pursuant to the Note Purchase Agreement the Company issued 617,284 shares of common stock to BV Advisory, See Note 8 – Stockholders’ (Deficit) Equity for information related to this stock issuance.

As of March 31, 2022, the Company had total principal outstanding related to the convertible notes payable balance of $500,591 compared with $500,591 as of December 31, 2021. Additionally, the Company accrued interest on the loans of $29,233 and $21,572 as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, there was $529,825 in total outstanding principal and interest.

The note is convertible into shares of preferred stock at a conversion price of 75% of the per share offering price of a qualified financing event which the agreement defines as “a transaction or series of transactions with the principal purpose of raising capital pursuant to the which the Company issues and sells shares of its preferred stock for aggregate gross proceeds of at least $5,000,000 (excluding all proceeds from the incurrence of indebtedness, including the Notes, that is convertible into such preferred stock, or otherwise canceled in consideration for the issuance of such preferred stock). Management evaluated the accounting guidance for embedded conversion features and determined that the embedded conversion feature requires to be bifurcated under ASC Topic 815 Derivatives and Hedging and therefore, the convertible debt instrument includes accounting for a derivative liability. The Company calculated the fair value of the derivative liability at $677,576 using the Black-Scholes pricing model at the Note Purchase Agreement date. As of March 31, 2022, the Company realized a derivative liability gain of $45,197, reducing the balance of the convertible note derivative liability to $632,379.

F-11

NotePurchase Agreement – Quantum Computing Inc.

On February 18, 2022, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Quantum Computing Inc. (“QCI”), pursuant to which QCI agreed to purchase from QPhoton two unsecured promissory notes (each, a “Note”), each in the principal amount of $1,250,000, subject to the terms and conditions of the Note Purchase Agreement. Also on February 18, 2022, pursuant to the terms of the Note Purchase Agreement, QCI purchased the first Note from QPhoton and loaned the principal amount of $1,250,000 to QPhoton. As a subsequent event, on April 1, 2022, pursuant to the terms of the Note Purchase Agreement, QCI purchased the second Note from QPhoton and loaned the principal amount of $1,250,000 to QPhoton.

The Note Purchase Agreement contains customary representations and warranties by QPhoton and QCI, as well as a “most favored nations” provision for the benefit of QCI. The Notes issued under the Note Purchase Agreement provides that the indebtedness evidenced by the applicable Note bears simple interest at the rate of 6% per annum (or 15% per annum during the occurrence of an event of default, as defined in the Notes), and becomes due and payable in full on the earlier of (i) March 1, 2023, subject to extension by one year at the option of QPhoton, (ii) a change of control (as defined in the Notes) of QPhoton or (iii) an event of default.

Note7. Contractual Obligations, Commitments and Contingencies

Legal

Periodically, the Company reviews the status of any significant matters that exist and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. As of March 31, 2022 there were no pending claims or litigation that could materially affect the Company results going forward.

Note8. Stockholders’ (Deficit) Equity

CommonStock

The Company’s Certificate of Incorporation stated on February 18, 2021 provides that the Company is authorized to issue 10,000,000 million shares of Common Stock. Holders of Common Stock are entitled to one vote per share. As of March 31, 2022, the Company had shares of common stock outstanding of 6,172,840. As explained in Note 1 on the financial statements, on February 18, 2021, the Board and stockholders of the Company approved the merger of QPhoton, LLC into QPhoton, Inc.

During the year ended December 31, 2021, the Company issued 617,284 shares of common stock to BV Advisory, a related party. The stock was issued under a Stock Purchase Agreement dated as of March 1, 2021 (see Note 6). The stock was valued at $1.21 per share and the Company recognized $746,914, in stock-based compensation costs during the year ended December 31, 2021.

F-12

Note 9. Income Taxes

A reconciliation of the statutory U.S. Federal rate to the Company's effective tax rate is as follows:

	Year Ended December 31,
	2021			2020
Federal income tax benefit at statutory rate		21.00	%		21.00	%
State income tax, net of federal benefits		5.14	%		5.14	%
Permanent items		-	%		-	%
Change in valuation allowance		(26.14	)%		(26.14	)%
Provision from income taxes		-			-

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following:

	Period Ended March 31,
	2022			2021
Deferred tax assets
Net Operating Loss Carryforwards	$	643,301		$	423,986
Total Deferred tax assets		643,301			423,986
Valuation allowance		(643,301	)		(423,986	)
Net deferred tax assets (liabilities)	$	-		$	-

The Company does not have any recorded unrecognized tax benefit for uncertain tax positions as of March 31, 2022.

Note10. Subsequent Events

On April 1, 2022, pursuant to the terms of the Note Purchase Agreement, QCI purchased the second Note from the Company and loaned the principal amount of $1,250,000 to the Company, which automatically extended the Second Period by an additional 30 days, pursuant to the terms of the Note Purchase Agreement.

F-13

On May 19, 2022, QCI, Project Alpha Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), Project Alpha Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), QPhoton, and Yuping Huang, the principal stockholder of QPhoton (“Mr. Huang”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which QCI agreed to acquire QPhoton through a series of merger transactions (collectively with the other transactions contemplated by the Merger Agreement, the “Transactions”).

On June 16, 2022, QCI, the Merger Subs, QPhoton and Mr. Huang, having met or waived all conditions precedent, consummated the closing for the Transactions pursuant to the terms of the Merger Agreement (the “Closing”). At the Closing, Merger Sub I merged with and into QPhoton, with QPhoton surviving the merger as a wholly-owned subsidiary of QCI, immediately after which QPhoton merged with and into Merger Sub II, with Merger Sub II surviving the merger as a wholly-owned subsidiary of QCI (the “Surviving Company”). The merger consideration paid to the stockholders of QPhoton (the “Merger Consideration”) consisted of (i) 5,802,206 shares of QCI’s common stock, par value $0.0001 per share (“Common Stock”), (ii) 2,377,028 shares of the newly created Series B convertible preferred stock of QCI, par value $0.0001 per share (“Series B Preferred Stock”), with 175,035 of the shares of Series B Preferred Stock being held in escrow as described below, and (iii) warrants to purchase up to 7,028,337 shares of Common Stock (the “Warrants”), with up to 702,834 shares of the Series B Preferred Stock being issuable upon the exercise of Warrants in lieu of the issuance of shares of Common Stock to comply with QCI’s obligations under the Nasdaq listing rules if the Warrants are exercised prior to the receipt of the Stockholder Approval (as defined below).

On July 1, 2022, QCI entered into an amended five-year lease agreement with Hoboken Associates, L.P. for a facility in Hoboken, New Jersey, to be used for QPhoton operations. The amended lease replaces a lease entered into between QPhoton and Hoboken Associates, L.P. on May 5, 2022.

On July 5, 2022 Yuping Huang tendered the required documents pursuant to the Merger Agreement to exchange his shares in QPhoton for equity in QCI. QCI issued to Yuping Huang 4,699,786 shares of Common Stock, 1,750,357 shares of Series B Convertible Preferred Stock and a Warrant for 5,692,952 shares of Common Stock.

On June 16, 2022 QPhoton tendered a cashier’s check BV Advisory in the amount of $535,6844, representing the full principal balance of the BV Notes and accrued interest through June 16, 2022. On July 14, 2022 BV Advisory returned the cashier’s check and disputed the calculation of the amount paid to settle the Notes.

On June 21, 2022, BV Advisory informed the Company that it intends to seek an appraisal of the shares of Common Stock of QPhoton (which shares represented 10% of the shares of Common Stock of QPhoton outstanding immediately prior to QCI’s acquisition of QPhoton) pursuant to Section 262 of the General Corporation Law of the State of Delaware. QCI does not have sufficient information to assess the potential impact of the appraisal demand at this time.

On August 2, 2022, QCI filed a preliminary proxy statement with the SEC with respect to an annual meeting of the stockholders of QCI to be held to elect directors and conduct other routine business of QCI. In addition, pursuant to the Merger Agreement, in the proxy, QCI stated that at the annual meeting QCI will seek approval and adoption of (i) the issuance of the shares of Common Stock underlying the Series B Preferred Stock and the Warrants, (ii) the election of three people to the Board of Directors of QCI designated by Mr. Huang (or, if Mr. Huang holds less than a specified number of shares of Common Stock, other key QPhoton stockholders and certain transferees thereof) as contemplated by that certain stockholders agreement to be entered into by QCI, the key QPhoton stockholders and the key QCI stockholders and (iii) any other proposals QCI and QPhoton deem necessary or appropriate to effectuate the Transactions (the “Stockholder Approval”).

On August 15, 2022, BV Advisory (the “Plaintiff”) filed a complaint in the Court of Chancery of the State of Delaware naming the Company and certain of its directors and officers (among others) as defendants (the “Lawsuit”). BV Advisory Partners, LLC v. Quantum Computing Inc., et al., C.A. No. 2022-0719-VCG (Del. Ch.). The Plaintiff is seeking, among other relief, monetary damages for an alleged breach of the Note Purchase Agreement between the Plaintiff and QPhoton, Inc., the predecessor in interest to QPhoton, LLC, a wholly-owned subsidiary of the Company, as well as monetary damages for breach of an alleged binding letter of intent among Barksdale Global Holdings, LLC, Inference Ventures, LLC and QPhoton, Inc. The Company believes that the Plaintiff’s claims have no merit and intends to defend itself vigorously. Moreover, the Company believes that numerous alleged facts and characterizations set forth in the Plaintiff’s complaint are false, misleading and intentionally designed to damage the Company’s reputation, and the Company categorically rejects those alleged facts and characterizations. The Plaintiff’s key principal, Keith Barksdale, misrepresented his role with QPhoton, Inc. during the early stages of the Company’s negotiations with respect to the acquisition of QPhoton. The Company believes that Mr. Barksdale misrepresented his role in order to arrogate to Plaintiff and related parties an undue portion of the consideration payable to QPhoton’s stockholders. In addition to defending itself vigorously against the allegations in the Lawsuit, the Company is evaluating its rights and remedies against the Plaintiff and related parties.

There are no other events of a subsequent nature that in management’s opinion are reportable.

F-14

Exhibit 99.3

QUANTUM COMPUTING INC.

Unaudited Pro Forma Combined Financial Information

On June 21, 2022, Quantum Computing Inc. (the “Company”) filed a Current Report on Form 8-K (the “Initial Report”) to report the closing of a merger agreement (the “Merger Agreement”), by and among the Company, Project Alpha Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), Project Alpha Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), QPhoton, Inc., a Delaware corporation (“QPhoton”), and Yuping Huang, the principal stockholder of QPhoton (“Mr. Huang”), whereby the Company agreed to acquire QPhoton through a series of merger transactions (collectively with the other transactions contemplated by the Merger Agreement, the “Transactions”). On August 5, 2022, Merger Sub II amended and restated its certificate of formation to change its name to QPhoton, LLC.

The accompanying unaudited pro forma condensed combined financial statements (“pro forma financial information”) has been prepared based on the historical financial statements of the Company and QPhoton after giving effect to the Transactions. The pro forma financial information is intended to provide information about how the acquisition of QPhoton may have affected the Company’s historical financial statements. The unaudited pro forma condensed combined financial statements for the twelve months ended December 31, 2021 and 2020, combines the historical audited financial information of the Company for these periods, derived from the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 15, 2022, with the respective historical audited financial statements of QPhoton as if the acquisition of QPhoton had occurred on January 1, 2020.

The historical unaudited pro forma condensed financial statements for the three months ended March 31, 2022 combines the Company’s historical unaudited financial information for the three months ended March 31, 2022, derived from the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on May 23, 2022, with the respective historical audited financial statements of QPhoton as if the acquisition of QPhoton had occurred on January 1, 2020 .

The fiscal year end of the Company and QPhoton is December 31

The unaudited pro forma condensed combined financial information should be read in conjunction with the accompanying notes to the unaudited pro forma financial information and:

●	the historical unaudited condensed financial<br>statements of the Company for the three months ended March 31, 2022 included in the Company’s Quarterly Report on Form 10-Q filed<br>with the SEC on May 23, 2022;
●	the historical audited consolidated financial<br>statements of the Company for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the<br>SEC on March 15, 2022.
---	---
●	the historical unaudited condensed consolidated<br>financial statements of QPhoton for the three months ended March 31, 2022 as filed in this Current Report on Form 8-K/A;
---	---
●	the historical audited consolidated financial<br>statements of QPhoton for the years ended December 31, 2021 and 2020, as filed in this Current Report on Form 8-K/A.
---	---

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition of QPhoton occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma transaction accounting adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

CONTENTS

Description	Page
Unaudited Pro Forma Combined Balance Sheets as of December 31,2021	F-2
Unaudited Pro Forma Combined Balance Sheets as of March 31,2022	F-3
Unaudited Pro Forma Combined Statement of Operations for the Twelve Months Ended December 31, 2021 and 2020	F-4
Unaudited Pro Forma Combined Statement of Operations for the Three Months Ended March 31, 2022 and 2021	F-5
Notes to the Unaudited Financial Statements	F-6

F-1

QUANTUM COMPUTING INC.

Pro Forma Combined Balance Sheets

December 31, 2021

(Unaudited)

	Quantum <br><br>Computing Inc.			QPhoton, Inc.			Eliminations		Pro Forma<br><br> Combined
ASSETS
Current assets
Cash and cash equivalents	$	16,738,657		$	105,204		$	-	$	16,843,861
Accounts Receivable		-			-			-		-
Prepaid expenses		482,998			3,538			-		486,536
Other current assets		-			-			-		-
Fixed assets (net of depreciation)		41,348			56,827			-		98,175
Other Assets
Lease right of use		18,084			-			-		18,084
Security Deposits		3,109			2,652			-		5,761
Total assets	$	17,284,196		$	168,221		$	-	$	17,452,417
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	464,870		$	86,263		$	-	$	551,133
Accrued expenses		478,505			55,288			-		533,793
Lease liability		18,084			-			-		18,084
Dividends payable		117,454			-			-		117,454
Other current liabilities		3,385			-			-		3,385
Other liabilities
Promissory notes		-			209,151			-		209,151
Derivative liability		-			615,193			-		615,193
Accrued interest		-			21,572			-		21,572
Total liabilities		1,082,298			987,467			-		2,069,765
Stockholders’ equity (deficit)								-
Common stock		2,916			618			-		3,534
Preferred stock		154			-			-		154
Additional paid-in capital		67,396,618			1,433,806			-		68,830,424
APIC-Beneficial Conversion Feature in Equity		4,898,835			-			-		4,898,835
APIC-Stock Based Compensation		25,297,456			-			-		25,297,456
Subscription Receivable		-			-			-		-
Accumulated deficit		(81,394,081	)		(2,253,670	)		-		(83,647,751	)
Total stockholders’ equity (deficit)		16,201,898			(819,246	)		-		15,382,652
Total liabilities and stockholders’ equity (deficit)	$	17,284,196		$	168,221		$	-	$	17,452,417

The accompanying notes are an integral partof these unaudited consolidated financial statements.

F-2

QUANTUM COMPUTING INC.

Pro Forma Combined Balance Sheets

March 31, 2022

(Unaudited)

	Quantum<br><br> Computing Inc.			QPhoton, Inc.			Eliminations			Pro Forma<br><br> Combined
ASSETS
Current assets
Cash and cash equivalents	$	11,513,369		$	1,114,978		$	-		$	12,628,347
Accounts Receivable		25,047			-			-			25,047
Prepaid expenses		452,584			-			-			452,584
Loans Receivable		1,258,630			-			(1,258,630	)		-
Fixed assets (net of depreciation)		41,689			45,911			-			87,600
Other Assets
Lease right of use		8,657			-			-			8,657
Security Deposits		3,109			2,652			-			5,761
Total assets	$	13,303,085		$	1,163,541		$	(1,258,630	)	$	13,207,996
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	797,005		$	294,729		$	-		$	1,091,734
Accrued expenses		8,140			-			-			8,140
Lease liability		8,656			-			-			8,656
Dividends payable		223,125			-			-			223,125
Promissory notes		-			1,520,868			(1,250,000	)		270,868
Derivative liability		-			632,379			-			632,379
Accrued interest		-			37,863			(8,630	)		29,233
Other current liabilities		-			-			-			-
Other liabilities		-			-			-			-
Total liabilities		1,036,926			2,485,839			(1,258,630	)		2,264,135
Stockholders’ equity (deficit)								-
Common stock		2,916			618			-			3,534
Preferred stock		154			-			-			154
Additional paid-in capital		67,609,119			1,439,075			-			69,048,194
APIC-Beneficial Conversion Feature in Equity		4,898,835			-			-			4,898,835
APIC-Stock Based Compensation		28,282,908			-			-			28,282,908
Subscription Receivable		-			-			-			-
Accumulated deficit		(88,527,773	)		(2,761,991	)		-			(91,289,764	)
Total stockholders’ equity (deficit)		12,266,159			(1,322,298	)		-			10,952,491
Total liabilities and stockholders’ equity (deficit)	$	13,303,085		$	1,163,541		$	(1,258,630	)	$	13,207,996

The accompanying notes are an integral partof these unaudited consolidated financial statements.

F-3

QUANTUM COMPUTING INC.

Pro Forma Combined Statement of Operations

For the Twelve Months Ended December 31, 2021

(Unaudited)

	Quantum<br><br> Computing Inc.			QPhoton, Inc.			Pro Forma<br><br> Combined
Total revenue	$	-		$	-		$	-
Cost of revenue		-			-			-
Gross profit		-			-			-
Salaries and Benefits		2,489,506			120,035			2,609,541
Consulting		1,067,901			-			1,067,901
Research & Development		2,594,796			76,431			2,671,227
Stock Based Compensation		9,401,345			747,414			10,148,759
Related Party Marketing
Selling General & Administrative - Other		1,576,545			119,362			1,695,907
Operating Expenses		17,130,093			1,063,242			18,193,335
Loss from Operations		(17,130,093	)		(1,063,242	)		(18,193,335	)
Other Income and Expense
Interest Income – Money Market		7,378			-			7,378
Misc. Income – Legal Settlements		-			-			-
Misc. Income – Government Grants		218,371			-			218,371
Interest Expense – Promissory Notes		-			21,802			21,802
Interest Expense – Beneficial conversion feature		-			208,922			208,922
Interest Expense –Warrants		10,715,799						10,715,799
Interest Expense – Derivatives mark to market		-			115,152			115,152
Interest Expense – Preferred dividends		117,454			-			117,454
Interest Expense – Financing expenses		161,250			-			161,250
Net Other income (expense)		(10,768,754	)		(345,876	)		(11,114,630	)
Federal income tax expense		-			-			-
Net loss	$	(27,898,847	)	$	(1,409,118	))	$	(29,307,965	)
Weighted average shares - basic and diluted		29,156,815			5,214,964			34,371,779
Loss per share - basic and diluted	$	(0.96	)	$	(0.27	)	$	(0.85	)

All values are in US Dollars.

The accompanying notes are an integral partof these unaudited consolidated financial statements.

F-4

QUANTUM COMPUTING INC.

Pro Forma Combined Statement of Operations

For the Three Months Ended March 31, 2022

(Unaudited)

	QuantumComputing Inc.			QPhoton,Inc.			Eliminations			ProForma Combined
Total revenue	$	31,240		$	-		$	-		$	31,240
Cost of revenue		11,568			-			-			11,568
Gross profit		19,672			-			-			19,672
Salaries and Benefits		1,116,228			11,560			-			1,127,788
Consulting		370,881			-			-			370,881
Research & Development		1,024,587			144,832			-			1,169,419
Stock Based Compensation		3,079,803			-			-			3,079,803
Related Party Marketing		-			-			-			-
Selling General & Administrative -Other		1,137,104			256,758			-			1,393,862
Operating Expenses		6,728,603			413,150			-			7,141,753
Loss from Operations		(6,708,931	)		(413,150	)		-			(7,122,081	)
Other Income and Expense
Interest Income		10,864			22			(8,630	)		2,256
Misc. Income – Legal Settlements		-			-			-			-
Misc. Income – Government Grants		-			-			-			-
Interest Expense – Promissory Notes		-			16,359			(8,630	)		7,729
Interest Expense – Beneficial conversion feature		-			61,649			-			61,649
Interest Expense –Warrants		-			17,187			-			17,187
Interest Expense – Derivatives mark to market
Interest Expense – Preferred dividends		223,125			-			-			223,125
Interest Expense – Financing expenses		212,500			-			-			212,500
Net Other income (expense)		(424,761	)		(95,173	)		-			(519,934	)
Federal income tax expense		-			-			-			-
Net loss	$	(7,133,692	)	$	(508,323	)	$	-		$	(7,642,015	)
Weighted average shares - basic and diluted		29,156,815			5,214,964			-			34,371,779
Loss per share - basic and diluted	$	(0.24	)	$	(0.10	)	$	-		$	(0.22	)

The accompanying notes are an integral partof these unaudited consolidated financial statements.

F-5

QUANTUM COMPUTING INC.

Notes to the Pro Forma Combined Financial Statements

December 31, 2021 and March 31, 2022

(Unaudited)

Note 1 - Description of Transaction

On May 19, 2022 the Company, Project Alpha Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), Project Alpha Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), QPhoton, and Yuping Huang, the principal stockholder of QPhoton (“Mr. Huang”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company agreed to acquire QPhoton through a series of merger transactions (collectively with the other transactions contemplated by the Merger Agreement, the “Transactions”).

On June 16, 2022, the Company, the Merger Subs, QPhoton and Mr. Huang, having met or waived all conditions precedent, consummated the closing for the Transactions pursuant to the terms of the Merger Agreement (the “Closing”). At the Closing, Merger Sub I merged with and into QPhoton, with QPhoton surviving the merger as a wholly-owned subsidiary of the Company, immediately after which QPhoton merged with and into Merger Sub II, with Merger Sub II surviving the merger as a wholly-owned subsidiary of the Company (the “Surviving Company”). The merger consideration paid to the stockholders of QPhoton (the “Merger Consideration”) consisted of (i) 5,802,206 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), (ii) 2,377,028 shares of the newly created Series B convertible preferred stock of the Company, par value $0.0001 per share (“Series B Preferred Stock”), with 175,035 of the shares of Series B Preferred Stock being held in escrow as described below, and (iii) warrants to purchase up to 7,028,337 shares of Common Stock (the “Warrants”), with up to 702,834 shares of the Series B Preferred Stock being issuable upon the exercise of Warrants in lieu of the issuance of shares of Common Stock to comply with the Company’s obligations under the Nasdaq listing rules if the Warrants are exercised prior to the receipt of the Stockholder Approval (as defined below).

The Company has agreed, following the Closing and QPhoton’s delivery of its required financial statements, to prepare and file with the SEC a proxy statement with respect to a meeting of the stockholders of the Company to be held to seek approval and adoption of (i) the issuance of the shares of Common Stock underlying the Series B Preferred Stock and the Warrants, (ii) the election of three people to the Company’s board of directors (the “Board”) designated by Mr. Huang (or, if Mr. Huang holds less than a majority of the shares of Common Stock issued in the transaction, the holders of a majority of the shares of Common Stock issued in the transaction) as contemplated by the Stockholders Agreement (as defined below) and (iii) any other proposals the Company and QPhoton deem necessary or appropriate to effectuate the Transactions (the “Stockholder Approval”).

The Warrants will have an exercise price of $0.0001 per share and will be exercisable for cash or on a cashless basis. The number and kind of shares issuable upon exercise of the Warrants and the exercise price of the Warrants will be subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. Unless and until the Stockholder Approval is obtained, no shares of Common Stock may be issued upon exercise of the Warrants to the extent that such issuance, taken together with the issuance of all other shares of Common Stock pursuant to the Merger Agreement, would breach the Company’s obligations under the Nasdaq listing rules and an appropriate number of shares of Series B Preferred Stock would instead be issued upon exercise of the Warrants to the extent of such limitation. In addition, no shares of Common Stock or Series B Preferred Stock may be issued under the Warrant until certain vesting terms set forth in the Warrant and Merger Agreement are satisfied.

F-6

175,035 of the shares of Series B Preferred Stock issued to Mr. Huang as part of the Merger Consideration will be held in escrow for six months following the Closing to secure Mr. Huang’s indemnification obligations under the Merger Agreement, pursuant to an escrow agreement entered into at the Closing by and among the Company, Mr. Huang and Worldwide Stock Transfer, LLC (the “Escrow Agreement”).

Note 2 - Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial statements give effect to the acquisition of QPhoton as if the acquisition occurred on January 1, 2020.

The acquisition accounting summarized in Note 4 was not included in the unaudited pro forma condensed combined financial statements as the purchase accounting entries are preliminary and could differ from the final acquisition accounting as estimates of purchase consideration and the fair values of identifiable intangible assets acquired are subject to review and audit. As a result, differences between the preliminary estimates in Note 4 and the final acquisition accounting could be material.

Note 3 - Accounting Policies

The accounting policies of the Company may vary materially from those of QPhoton. During preparation of the unaudited pro forma condensed combined financial information, the Company has performed an analysis and is not aware of any material differences in accounting policies, and accordingly, this unaudited pro forma condensed combined financial information assumes no material differences in accounting policies between the two companies.

Note 4 - Estimated Preliminary Purchase Consideration

The table below presents the total estimated preliminary purchase consideration:

Cash consideration paid at closing	$	0
Equity consideration paid at closing:
Common shares		13,171,008
Preferred shares		49,985,241
Warrants		15,954,325
		79,110,574
Preferred shares in escrow		3,973,294
Total purchase consideration	$	83,083,868

F-7