StreetInsider.com

News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.


 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

 

 

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

 

Filed by the Registrant ☒

 

Filed by a Party other than the Registrant ☐

 

Check the appropriate box:

 

Preliminary Proxy Statement
   
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
   
Definitive Proxy Statement
   
Definitive Additional Materials
   
Soliciting Material Pursuant to §240.14a-12

 

QUANTUM COMPUTING, INC.

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

Fee paid previously with preliminary materials

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

PROXY SUPPLEMENT TO
THE PROXY STATEMENT

FOR THE ANNUAL MEETING
OF STOCKHOLDERS OF

QUANTUM
COMPUTING, INC.

TO BE HELD ON WEDNESDAY,
SEPTEMBER 21, 2022

 

Explanatory Note

 

The following supplemental information supplements
the definitive proxy statement on Schedule 14A of Quantum Computing, Inc. (the “Company”) originally filed with the Securities
and Exchange Commission (the “SEC”) on August 12, 2022 (the “Proxy Statement”) relating to the Company’s
2022 Annual Meeting of Stockholders to be held at 215 Depot Court SE, Suite 215, Leesburg, VA 20175 on Wednesday, September 21,
2022, at 10:00 a.m. local time.

 

This supplemental information is being provided
to reflect certain updates that occurred after the date the Company filed the Proxy Statement with the SEC. Except as described in this
supplement, the information provided in the Proxy Statement continues to apply. If information in this supplement differs from or updates
information contained in the Proxy Statement, then the information in this supplement is more current and supersedes the different information
contained in the Proxy Statement. Terms used in this supplement that are not defined in this supplement have the meanings given to them
in the Proxy Statement.

 

THE PROXY STATEMENT CONTAINS IMPORTANT ADDITIONAL
INFORMATION AND THIS SUPPLEMENTAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE PROXY STATEMENT.

 

Supplemental Information

 

On August 29, 2022 the Company hired a proxy solicitor,
and on September 8, 2022 the proxy solicitor coordinated with Broadridge Financial Solutions to send a notice by email and regular mail
(the “Notice”) to certain investors in connection with outreach regarding our 2022 Annual Meeting of Stockholders. The Full
Text of the Notice is as follows:

 

From: [email protected] Date: September
8, 2022 To: [Shareholder Name] Subject: Vote now! QUANTUM COMPUTING INC. Annual Meeting

 

 

Your Vote Counts!

 

QUANTUM COMPUTING INC.

 

2022‌ ‌Annual
Meeting‌

 

September 21, 2022

 

 

You are receiving this email because either the company has supplied
additional information for your review or we have not yet received your voting instructions. If you have already voted and do not wish
to change your instructions, there is no need to resubmit your vote.

 

As
an investor in this security, you have the right to vote on important issues.
Make your voice heard now!

 

Vote
Common Shares by:

September 20, 2022

 

Control
Number
:
‌0123456789012345‌

Ways to Vote
Go to ProxyVote.com

 

 

 

Call ‌1-800-690-6903

 

This email represents the following share(s):

 

QUANTUM COMPUTING INC. – PREFERRED A 123,456,789,012.00000
QUANTUM COMPUTING INC 123,456,789,012.00000
QUANTUM COMPUTING INC 123,456,789,012.00000
QUANTUM COMPUTING INC 123,456,789,012.00000
QUANTUM COMPUTING INC. 123,456,789,012.00000
QUANTUM COMPUTING INC 123,456,789,012.00000

 

 

Important Materials:
Proxy Statement
10-K Report

 

For holders as of ‌July
29, 2022‌

 

 

 

ProvyVote

(c) ‌1‌9‌9‌7‌-‌2022‌ Broadridge
Financial Solutions Inc.
P.O. Box 1310, Brentwood, NY 11717
ProxyVote and Broadridge are trademarks of Broadridge Financial Solutions Inc. CUSIP is a registered trademark of the American Bankers
Association. All other registered marks belong to their respective owners.

 

Email Settings | Terms and Conditions
| Privacy Statement

 

 

On August 19, 2022 the Company filed a Current
Report on Form 8-K to report that BV Advisory Partners, LLC (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 “BV 8-K”).

 

On August 25, 2022 the Company filed a Current
Report on Form 8-K to report that the Company issued an update to shareholders in the form of a
letter (the “Shareholder Letter”) and press release in connection therewith (the “Shareholder Update 8-K”).

 

On September 2, 2022 the Company filed an amended
Current Report on Form 8-K/A to amend and supplement the Current Report on Form 8-K filed on June 21, 2022 in order to provide financial
statements of QPhoton, Inc. and the pro forma financial statements of the Company required by Item 9.01 of Form 8-K (the “QPhoton
Financial Statement 8-K/A”).

 

The Full text of the BV 8-K, the Shareholder Update
8-K and the QPhoton Financial Statement 8-K/A, respectively, are included herewith.

 

 

Voting Matters

 

This supplement does not change the proposals
to be acted upon at the Annual Meeting, which are described in the Proxy Statement. If you have already submitted your proxy, you do not
need to take any action unless you wish to change your vote. Information regarding how to vote your shares and revoke already submitted
proxies is available in the Proxy Statement.

 

 

UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

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

 

Date of Report (Date of earliest
event reported): August 19, 2022

 

QUANTUM COMPUTING INC.

(Exact name of registrant
as specified in its charter)

 

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) (Zip Code)

 

(703) 436-2161

(Registrant’s telephone
number, including area code)

 

(Former Name or Address,
if Changed Since Last Report)

 

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 communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  Pre-commencement 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. ☐

 

 

Item
8.01 Other Events.

 

On August 15, 2022, BV Advisory Partners, LLC (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.

 

 

SIGNATURES

 

Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.

 

  QUANTUM COMPUTING INC.
     
Dated: August 19, 2022 By: /s/ Christopher Roberts
   

Christopher Roberts

Chief Financial Officer

   

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities
and Exchange Act of 1934

 

Date of Report (Date of earliest event reported):
August 25, 2022

 

QUANTUM COMPUTING, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware   000-56015   82-4533053

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

215 Depot Court SE, Suite 215

Leesburg, VA 20175

(Address of principal executive offices, including
zip code)

 

(703) 436-2161

(Registrant’s telephone number, including
area code)

 

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

 

Written
communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement
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 

 

Indicate by check mark whether the registrant is an
emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange
Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark
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. ☐

 

 

Item 8.01 Other Events.

 

On August 25, 2022, the Company issued an update to
shareholders in the form of a letter (the “Shareholder Letter”) and press release in connection therewith. A copy of the Shareholder
Letter and the press release is filed hereto as Exhibit 99.1 and 99.2, respectively, and is incorporated herein by reference. 

 

Item 9.01. Exhibits.

 

(d) Exhibits

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

  QUANTUM COMPUTING INC.
     
Dated: August 25, 2022 By: /s/ Christopher Roberts
   

Christopher Roberts

Chief Financial Officer

   

 

Exhibit 99.1

 

Quantum Computing Inc. Releases Shareholder
Letter with Quantum Roadmap

 

QCI’s Real Entropy Quantum Computer,
the Dirac-1 Photonic Quantum System, is Able to Solve Multiplex Business Problems Today

 

LEESBURG, Va., August 25, 2022 — Quantum Computing Inc.
(“QCI’’ or the “Company”) (NASDAQ:
QUBT), a leader in accessible quantum computing, today announced that it has issued
a letter to shareholders pertaining to QCI’s vision and state of the industry. The letter recaps QCI’s many achievements since
the June 2021 shareholder letter and offers a roadmap for the coming year and beyond.

 

The capstone to this extraordinary year was QCI’s acquisition
of QPhoton. This enabled QCI to combine its deep expertise and experience in quantum computing with QPhoton’s research efforts to
develop photonic-based quantum systems. QCI has developed a room-temperature Entropy Quantum System for solving real world business problems
today. This game-changing computational capability surpasses anything currently available in the industry, but operates without costly
and impractical infrastructure such as cryogenic cooling and specially environmentally engineered rooms that do not scale.

 

QCI has evolved into a full stack quantum solutions company offering
customers the ability to run optimization problems in excess of 5,000 variables (Qubits), on a room temperature, desktop quantum system.

 

“The other leading quantum hardware companies do not expect to
match this achievement for another three to five years, and we believe they are not likely to ever realize quantum results using methods
such as gate models,” said Robert Liscouski, CEO of QCI. “Quantum information processing for solving real-world problems is
available now and this is only the beginning. World class talent will be at the center of making QCI a real force in the quantum information
industry. In addition to Dr. Yuping Huang joining QCI as Chief Quantum Officer, we have attracted Dr. William McGann as our CTO and COO.
This combination of Dr. Huang, Dr. McGann, and the expanded engineering team will spearhead QCI’s next growth phase.”

 

2021-2022 Summary:

 

 

Developed and released QAmplify, an enhancement to the company’s Qatalyst™ platform that amplifies the quantum effects
of existing quantum computers by 5x – 20x of their qubit count

 

Continued to hire world class talent

 

Expanded the Board of Directors

 

Completed an additional funding of the company through the sale of preferred equity

 

Successfully completed the acquisition of QPhoton

 

 

In mid-2022, QCI created its Quantum Solutions division, which is focused
on bridging the gap between state of the art quantum computing technologies and real-world business problems. The team comprises professionals
with backgrounds in data science, solutions architecture, and management consulting who work with forward-thinking companies to help them
define, demonstrate, and implement quantum-based technology solutions to their business-relevant problems today.

 

Logistics optimization is a key technology application for which quantum
computing can readily show value.  In July, QCI’s Quantum Solutions team was selected by a State Government Innovation Center
to evaluate quantum technology applications that support logistics use cases. In this partnership, QCI will use its Entropy Quantum Computing
(EQC) technologies to demonstrate optimization use cases in support of advanced air mobility applications, such as air-based drone delivery
networks.

 

In addition to logistics applications, the Quantum Solutions team is
developing and demonstrating solutions for various other applications, including:

 

Energy: Improving the design of wind power plants by optimizing configurations of wind turbines to maximize power generation
efficiency while accounting for turbine wake effects

 

Manufacturing: Supporting the design of autonomous vehicles by optimizing the placement of vehicle sensors to maximize coverage
of surrounding areas while minimizing costs

 

Artificial Intelligence: Enhancing machine learning processes by optimizing the selection of features for AI/ML models

 

Financial Services: Helping banks more accurately detect and identify fraudulent activity within their transactions’
data streams

 

Cybersecurity: Creating secure transport layers (quantum networks) and quantum authentication, which will contribute greatly
to the cybersecurity domain beyond encryption

 

QCI’s goals for 2022-2023 are focused on generating and increasing
sales of its quantum technology’s existing capabilities represented in the Quantum Ecosystem. The company expects to accomplish
the following over the next 12 months:

 

Offer subscription access to Dirac-1 and -2

 

Expand its technical solutions offerings to other domains that will benefit from Dirac-1

 

Commercialize and sell its Quantum LiDAR

 

Deploy its quantum cybersecurity solutions by commercializing its quantum network and authentication capabilities

 

Deploy its quantum solutions to U.S. government clients

 

Expand the deployment of its quantum solutions to state government clients

 

Expand its technical team

 

Expand its Technical Solutions and Sales Teams

 

“These are ambitious goals for sure, but well within our reach,
based on our current trajectory,” added Liscouski. “Our combined technical team is continually working to provide greater
computational capabilities to our clients, as well as completing the development of other quantum solutions for the marketplace. The challenge
we have is keeping up with the pace of the engineering team’s development, which is a good problem to have.”

 

 

QCI’s Path to the Future – The Quantum Ecosystem

 

QCI’s vision is to develop democratized quantum solutions that
will have a positive impact on business, industry, government and society. QCI’s technology roadmap is based on the company’s
Quantum Ecosystem, representing the technologies in its portfolio that will be brought to market. Highlights include:

 

Quantum Optical Chips:

 

Optical chips will ultimately provide the greatest scalability
and performance advantages for quantum information processing, sensing and imaging. The company expects to benefit from the recently authorized
CHIPS Act and will begin to establish a U.S.-based chip facility in 2023.

 

Quantum Imaging:

 

One of the most exciting opportunities on the 3-5 year horizon
involves leveraging the ability to count single photons and filter their associated wave functions precisely to obtain optical imaging
through otherwise opaque and dense materials. At a minimum, quantum imaging will be a powerful supplement to modern reconstructed CT imaging
applications, where tissue damage from high energy radiation can and needs to be avoided.

 

To read the complete 2022 shareholder letter or learn more about QCI,
visit www.quantumcomputinginc.com.

 

About Quantum Computing Inc.

 

Quantum Computing Inc. (QCI) (NASDAQ: QUBT) is a full-stack quantum
software and hardware company on a mission to accelerate the value of quantum computing for real-world business solutions, delivering
the future of quantum computing, today. The company recently acquired QPhoton, a quantum photonics innovation company that has developed
a series of quantum photonic systems (QPS). The combination of QCI’s flagship ready-to-run software product, Qatalyst, with QPhoton’s
QPS, sets QCI on a path to delivering a broadly accessible and affordable full-stack quantum solution that can be used by non-quantum
experts, anywhere, for real-world industry applications. QCI’s expert team in finance, computing, security, mathematics and physics
has over a century of experience with complex technologies; from leading edge supercomputing, to precision sensors and imaging technology,
to the security that protects nations. For more information about QCI, visit www.quantumcomputinginc.com.

 

 

Important Cautions Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forwardlooking,
including, but not limited to, statements regarding the future performance of Quantum Computing, Inc. and its consolidated subsidiaries
(the “Company” or “QCI”), including its financial outlook; the other expectations described under “QCI’s
Roadmap to Quantum Future”, “QCI Quantum EcoSystem”, “QUBT-U and Workforce Development”. QCI’s Path
to the Future”, Goals for 2022-23”, 2022-2023 Pipeline”, “Explore New Partnerships”, and Establish A Senior
Technology Advisory Group” above; and the Company’s business strategy, plans, and objectives for future operations. In some
cases, forward-looking statements can be identified by terms such as “may,” “will,” “appears,” “should,”
“expects,” “plans,” “anticipates,” “could,” “outlook,” “intends,”
“target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,”
“potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern
our expectations, strategy, plans, or intentions. Such statements are subject to a number of known and unknown risks, uncertainties, assumptions,
and other factors that may cause the Company’s actual results, performance, or achievements to differ materially from results expressed
or implied in this letter. Investors are cautioned not to place undue reliance on these statements, and reported results should not be
considered as an indication of future performance. Risks that contribute to the uncertain nature of the forward-looking statements include,
among others, the effects of the COVID-19 pandemic on the Company’s business, including as a result of new strains or variants of
the virus, and the global economy generally; litigation, and other proceedings related to the Company’s business in a variety of
areas; the effectiveness of the Company’s strategy and business initiatives; the Company’s lack of liquidity; and changes
in political, business, and economic conditions; as well as other risks listed or described from time to time in the Company’s filings
with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2021, the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June
30, 2022, and any subsequent filings, which are or will be on file with the SEC and available on the investor relations page of the Company’s
website. All forward looking statements are based on information and estimates available to the Company at the time of this letter and
are not guarantees of future performance. Except as required by law, the Company assumes no obligation to update any of the statements
in this letter.

 

The information that can be accessed through hyperlinks or website
addresses included herein is deemed not to be incorporated in or part of this letter.

 

Qatalyst™ and QikStart™ are trademarks of Quantum Computing
Inc. All other trademarks are the property of their respective owners.

 

Company Contact:

 

Robert Liscouski, CEO

Quantum Computing, Inc.

+1 (703) 436-2161

Email Contact

 

Investor Relations Contact:

 

Ron Both or Grant Stude

CMA Investor Relations

+1 (949) 432-7566

Email Contact

 

Media Relations Contact:

 

Seth Menacker

Fusion Public Relations

+1 (201) 638-7561

[email protected]

 

# # #

 

Exhibit 99.2

 

 

Fellow Shareholders,

 

I hope you are all well. It is hard to believe that a year ago we were
coming out of the pandemic and looking forward to getting back to business. It has truly been an absolutely amazing and extraordinary
year. Since my last letter we have:

 

 

Released QAmplify, our enhancements to our Qatalyst platform that now amplifies the quantum effects of existing quantum computers
by 5x – 20x of their qubit count,

 

Continued to hire world class talent,

 

Expanded our Board of Directors,

 

Completed an additional funding of the company through the sale of preferred equity, and,

 

Successfully completed the acquisition of QPhoton.

 

Last year, I stated that QCI’s committed vision is “to
be the democratizing force that enables subject matter experts (SMEs) and end users to get critical answers to business problems right
now, using the computing mix that best delivers those results.” We have not only remained committed to that vision but we have accelerated
the achievement of delivering those results.

 

The capstone to this extraordinary year was the acquisition of QPhoton.
This enabled QCI to combine its deep expertise and experience in quantum computing with QPhoton’s research efforts to develop photonic
based quantum systems. QCI has developed a room-temperature Entropy Quantum System (EQC) for solving real world business problems –
TODAY.
This is game changing because the computational capability surpasses anything available in the industry, but operates without
all the costly and impractical infrastructure such as cryogenic cooling and specially environmentally engineered rooms to operate that
do not scale.

 

QCI has evolved into a full stack Quantum Solutions Company offering
customers the ability to run optimization problems in excess of 5000 variables (Qubits), on a room temperature, desk top quantum system.

 

We believe this achievement is something most other quantum hardware
companies only hope to do in the next three to five years at a computational level and are likely never to achieve using gate model or
other methods to achieve quantum results. QCI’s Entropy Quantum Computer, the quantum information processing system for solving
real-world problems, is available now and this is only the beginning of our commercialization of quantum solutions.

 

As exciting as that statement is, it is only one part of QCI’s
portfolio. We offer solutions ranging from quantum LiDAR, quantum intelligence, quantum sensing and imaging, quantum-secured networks,
and nanophotonic chips.

 

 

 

We all know that developing
a world class company requires world class talent. In addition to Dr. Huang joining as QCI’s Chief Quantum Officer and a Director,
we have attracted Dr. William McGann as our CTO and COO. Dr. McGann most recently was Leidos’ CTO of Security and Detection Technologies
with a long successful history as a scientist and entrepreneur with proven abilities to take technologies out of the lab and into the
commercial market. We believe that the combination of Dr. Huang and Dr. McGann, and the expanded engineering team they lead, make QCI
a real force in the quantum information industry.

 

QCI has an unwavering commitment to bring real world quantum solutions
to world to have a positive impact on business and society – at scale. That is why the acquisition of QPhoton makes more than just
business sense. Dr. Huang’ vision (which we share) is to bring quantum technologies to the industry and make it available for anyone
in any industry that needs to solve complex or world changing problems; business, research, education, and, government. Not only are we
perfectly aligned technically to achieve that goal, but we are philosophically aligned as well. That is why the integration of the two
companies has been seamless and easy – we all have had the same goal in mind – to build a company that has a meaningful positive
impact on our world and to create great value for our shareholders. That is why QCI has evolved to much beyond a quantum software company.

 

QCI truly is an Innovative Quantum Solutions Company
– providing both the industry’s leading quantum hardware and software.

 

The State of Quantum Computing

 

Last year when I wrote about the state of quantum computing I referred
to a lot of the hype in the industry. That is still true today in many ways but there have been some recent statements by hardware makers
downsizing expectations of what current quantum hardware can deliver. In large part those statements are based on the various approaches
to building a quantum computer, including gate models and annealers. These approaches have promises for the future but still require significant
investment and a lot of expensive supporting infrastructure to eventually reach those goals. And – it is unlikely that they will
be able to scale to be an “on premises quantum computer”, let alone a machine that can be easily deployed in an enterprise.
While the industry and market have focused on proving that quantum computing will eventually scale to be able to solve real world problems,
today they are solving science experiments and problems to claim to achieve quantum advantage but frankly have little meaning in the real
world.

 

For quantum computing to deliver real and scalable value to businesses
and the academic world, it will have to be accessible, capable, affordable, and widely deployable. It cannot be constrained by the limitations
of cryogenic cooling and sound and vibration proof infrastructures that make it a solution for only the most elite companies in the business
community. Said more specifically, regardless of the future technical advances in these technologies, they are not likely to ever achieve
practical levels of SWAP-C (Size / Weight and Power – Cost).

 

 

 

QCI is Changing the Current State of Quantum Computing:

 

Our first step into the world of quantum computing
hardware is our Entropy Quantum Computing (EQC) platform. Using the EQC we produced landmark results for a real-world problem –
BMW’s autonomous vehicle sensor optimization challenge which we highlighted in our presentation to BMW on July 20, 2022 (link
to the video
). As a result of the presentation, we had so many people reaching out with questions, and we wanted to share
some highlights about EQC, especially how it differs from today’s Noisy Intermediate Scale Quantum (NISQ) computers – the
more common quantum computer.

 

Quantum and Today’s NISQ Computers

 

First, here is a brief introduction to how quantum systems in nature
really work. Quantum systems are naturally “open”, meaning, they inevitably interact with the many degrees of freedom subtended
in their surrounding environment. As a result of this interaction, the wavefunctions describing those systems collapse, which is the point
where quantum information is lost.

 

That’s why today’s NISQ computers are designed to produce
closed quantum systems in pristine quantum states that are isolated from the environment. Their goal is to minimize this interaction since
it causes significant processing challenges for these architectures.

 

You see, to create and maintain stability of the pristine closed system,
there is a significant engineering cost in the design requirements to protect quantum information from the environment (aka noise). This
is why quantum computers usually require cryogenic cooling, pure vacuum, and zero electromagnetic background. Those requirements introduce
high cost, complex maintenance, and ongoing stability issues, thus the SWAP-C challenge of NISQ systems.

 

We’ve all heard the questions about whether quantum computing
is real (it is) as a result of the limitations of these early architectures. That’s due to the reality facing these NISQ computers:
they have limited qubit scale, which restricts the size and complexity of the problems they can process; they are extremely expensive
to build and maintain due to the extreme environmental demands; they are error prone even at small scale; they lack stability due to decoherence,
which collapses the quantum space.

 

As of today, these systems have been able to process small “toy”
problems up to 127 variables for gate-model systems and up to 400 variables for sparse matrix problems on a quantum annealer. The computations
can take hours to complete and may be interrupted as the systems lose coherence. Additionally, these closed systems are still extremely
prone to errors. One paper estimates that every logical qubit will require 1,000 to 10,000 qubits for error correction alone, which means
that the best NISQ computer today contains effectively less than one error-corrected qubit, and it will take decades to reach ten, if
at all possible.

 

EQC in Action – A Full Quantum Solution – The BMW
Sensor Problem Submission Summary

 

As demonstrated as part of the BMW Quantum Challenge presentations,
QCI’s first EQC prototype delivered truly landmark results. We solved a sensor optimization problem for autonomous vehicles FOR
THE FIRST TIME on a fully-quantum system. The computations included 3,854 variables and 500 constraints. The EQC delivered a superior,
feasible solution in six minutes. Following is a summary of this landmark result.

 

 

 

The BMW sensor challenge was designed to
test the abilities of quantum technologies. Its focus was to find an optimal configuration of vehicle sensors for autonomous driving.
Optimality was defined as maximal coverage of the vehicle’s surroundings, at minimal economic cost.

 

Today’s NISQ architectures have only
been able to process problems with very limited variable sizes, around 127 variables (Qubits). This is due to the limitations noted above
as the number of qubits available to represent problem variables are extremely limited. Plus the lack of connectivity and coherence between
these qubits to account for the volume of constraints. The size and complexity of the BMW Challenge highlighted the limitations caused
by the extreme system requirements needed in NISQ architectures.

 

Note that in 2021, Quantum Computing Inc. (QCI), took on the BMW sensor
optimization challenge and generated a solution, leveraging a variational approach, Variational Analog Quantum Oracle (VAQO) that enables
QPUs to contribute to solving problems larger than the number of qubits available. It was applied to a D-Wave quantum annealer that solved
the BMW problem (see the table below.) That demonstration provided a good example of how software can be used to extend the capabilities
of current quantum computing hardware. This software, QAmplify, includes VAQO and can be used to extend the qubit capacity of both gate-model
systems and quantum annealers.

 

With the recent acquisition of QPhoton, a quantum photonics systems
company, QCI has established a toolbox of new quantum hardware technologies, including Entropy Quantum Computing (EQC) that we applied
to the BMW optimization problem.

 

This year, we presented a 2022 solution based on EQC to directly solve
a problem with 3,854 variables. Using an initial EQC prototype, a superior, feasible solution was obtained in six minutes of total runtime.

 

EQC Results

 

The 2022 sensor challenge problem taken on with the EQC consists of
n = 3, 854 variables (Qubits) and 501 constraints. The problem (including constraints) was submitted directly to an EQC prototype in the
form of an n–by–(n + 1) Hamiltonian matrix. Through the controlled interaction with the engineered environment, the system
relaxed to a ground state, where the objective function and all of the optimality conditions were captured and subsequently analyzed.

 

The EQC result achieved optimality, provided a sensor configuration
consisting of 15 sensors yielding 96% coverage of the criticality space. This practical solution demonstrates a clear advantage when compared
with best alternatives as described below.

 

First, using QCI’s classical solver CSample,
the problem resulted in a significantly lower 62.8% coverage area for the same number of sensors (15).

 

Second, using the VAQO approach
demonstrated in our 2021 solution, we generated a result with a higher 99.8% sensor coverage, but at significantly higher costs using
373 sensors. (Table 1 summarizes this data.)

 

Table 1

 

Performance Parameters   EQC     VAQO     CSample  
Coverage     96 %     99.4 %     62.8 %
Number of Sensors     15       373       15  
Runtime (seconds)     363       26373       197  

 

Table 1: Comparison of best results obtained by each solver.
The Hamiltonian used was properly designed to take into account the physical constraints of the EQC system. Metrics meeting the practical
feasibility bar are marked in green, and

 

The Bottom Line

 

We all see the hype and concerns about the value of quantum computing,
arising from limited scale, high cost, lack of stability, overall complexity, and a significant error correction challenge. The EQC is
designed to address the significant challenges that current NISQ computers are facing. QCI has successfully demonstrated a scalable, error-free
and cost-effective computing prototype using quantum photonics. The future systems are designed to be deployable anywhere, require no
special environments, and be readily usable by non-quantum experts.

 

 

 

QCI’s Roadmap to the Quantum Future

 

Those of you who know me and QCI, know that we are a company that doesn’t
believe in hype, hyperbole or raising expectations that we cannot deliver on. If anything, we believe in underselling our capabilities
and over delivering on expectations, because candidly, that is how you build a solid reputation and successful business over time. As
I stated QCI aspires to be the leading innovation quantum solutions company. It is our vision that we will develop democratized quantum
solutions that will have a positive impact to business, industry, government and society. I would like to share our roadmap and explain
where we are going and how we will get there.

 

QCI’s technology roadmap is based on our Quantum EcoSystem; Quantum
Computing, Quantum Intelligence, Quantum Remote Sensing, Quantum Cyber Security, and Quantum Imaging and the lynchpin – Quantum
Optical Chips. This Quantum EcoSystem represent the technologies we have in our portfolio that we will be bringing to market.

 

QCI is now a full stack quantum computing company and is much more
than just quantum computing business. Our quantum technologies, which are either protected by our patents or are in the patent process,
allow us to go to market in the most important areas where this technology can make a difference – today:

 

 

o Our first Entropy Quantum Computer, Dirac 1, can run problems of over 5000 variables.

 

o Next quarter we will be providing subscription access to Dirac-1 capable of running complex optimization problems such as the BMW
sensor optimization problem and others. Our subscription service along with our professional services have been successfully beta testing
with a limited set of clients in preparation for our commercial release.

 

o The complete family of EQC products will be released in 2023 – These include next generations of EQC that further expand the
scale and capabilities of the Dirac-1 to broader, larger, and more complex optimization problems. As part of this progression of technology,
we are introducing a “high-dimensional” EQC that will operate with Quantum Digits (Qudits) vs. Quantum Bits (Qubits).

 

Quantum Intelligence – Reservoir Quantum Computing (RQC)

 

o Reservoir Quantum Computing (RQC) will also be released in late Q4 of 2022 and be made available through the Qatalyst platform. RQC
is a hardware configuration for quantum optical machine learning and will offer substantial increase in throughput over current convoluted
neural network (CNN) approaches today, by improving the data training rates by as much as 100X.

 

 

 

 

o Optical chips will ultimately provide the greatest scalability and performance advantages for quantum information processing, sensing
and imaging. When all of the critical optical components can be “embedded” on a fully integrated chip, the efficiency and
fidelity of the photonic quantum technologies will be fully realized. This will represent the ultimate SWAP-C capable system and will
serve as a common core technology for ALL of the product developments on the future (3 years) QCI product road maps.

 

Cybersecurity – Quantum Networks and Quantum Authentication

 

o The Cybersecurity domain has been awakened to the benefits and the threat of quantum computing resulting from the expectation that
quantum can break any RSA and non-quantum based encryption. However, effective cybersecurity goes well beyond encryption for protection.
Effective cybersecurity requires a holistic approach to protecting the enterprise. QCI believes that our quantum computing capabilities
have applications in encryption. However, we are applying our quantum technologies to create secure transport layers (quantum networks)
and authentication (quantum authentication) which will contribute greatly to the cybersecurity domain, beyond encryption.

 

Quantum Remote Sensing – QLiDAR

 

o Our QLiDAR capability has the ability to see through dense fog and provide image fidelity at great distances and through difficult
environments such as snow, ice, and water. Once again, by leveraging the power of quantum mechanics and single photon detection, LiDAR
systems can be greatly enhanced in their ability to measure at improved resolution and distances as well as extend these photonic signals
to applications in vibrometry for material stress analysis, particle size analysis, and potential remote sensing from satellites

 

 

o One of the most exciting opportunities in the 3-5 year horizon is to leverage the ability to count single photons and filter their
associated wavefunctions precisely to obtain optical imaging through otherwise opaque and dense materials.

 

Goals for 2022-2023

 

The past couple of years have certainly been tumultuous
ones. We face the uncertainty of the capital markets and an economy that is still reeling from the pandemic, inflation, an uncertain supply
chain, a strained workforce and other economic and political challenges. QCI has managed to thrive in these uncertain times. However,
one of the greatest challenges I face as CEO of QCI is getting the market to believe that this modest start-up company actually has the
technology to make the claims we are making while the largest technology companies in the world are still struggling to achieve scalable
quantum performance. We view that as a high class problem. We have the benefit of being able to prove and back up the claims we are making
and we are eager to accept problems from the industry to prove we can solve them at our cost, not theirs. I have always said that we will
build a company based on fundamentals – execution and operational excellence. And that is the path we are on – we will continue
to build a company that will deliver on the promise of quantum computing – today.

 

 

 

QCI arguably has the best and proven quantum technology along with
a broad portfolio of quantum technology in the marketplace. Our goals for 2022-23 are focused on generating and increasing sales of our
quantum technology’s existing capabilities represented in our roadmap. We expect to do the following over the next 12 months:

 

Offer subscription access to Dirac 1 and 2
     
Expand our Technical Solutions offerings to other domains that will benefit from our Dirac-1
     
Commercializing and selling our Quantum LiDAR
     
Deploying our Quantum Cybersecurity Solutions by commercializing our quantum Network and Authentication capabilities
     
Developing our Quantum Chip manufacturing capability
     
Deploying our quantum solutions to US Government clients
     
Expanding the deployment our quantum solutions to State Government clients
     
Expanding our technical team
     
Expanding our Technical Solutions and Sales Team
     
Establishing our Senior Technical Advisory Group
     
Increasing market awareness of QCI

 

These are ambitious goals for sure but well within our reach based
on our current trajectory. Our combined technical team is continually working to provide greater computational capabilities to our clients
as well as completing the development of other quantum solutions in the market place. The challenge we have is keeping up with the pace
of the engineering team’s development – it is a good problem to have.

 

2022-2023 Pipeline

 

In mid-2022 QCI created its Quantum Solutions division, which is focused
on bridging the gap between state of the art quantum computing technologies and real-world business problems. Our Quantum Solutions team
comprises professionals with backgrounds in data science, solutions architecture, and management consulting. We work with forward-thinking
companies to help them define, demonstrate, and implement quantum-based technology solutions to their business-relevant problems today.

 

Logistics optimization is a key technology application where quantum
computing can readily show value.  In July, QCI’s Quantum Solutions team was selected by a State Government Innovation Center
as a partner to evaluate quantum technology applications that support logistics use cases. In this partnership, QCI will use our Entropy
Quantum Computing (EQC) technologies to demonstrate optimization use cases to support advanced air mobility applications, such as air-based
drone delivery networks. QCI is honored to be selected by our State partner for this opportunity.

In addition to logistics applications, the Quantum Solutions team is
developing and demonstrating solutions for various other applications including:

 

· Energy: Improving the design of wind power plants by optimizing configurations of wind turbines to maximize power generation
efficiency while accounting for turbine wake effects
     
· Manufacturing: Supporting the design of autonomous vehicles by optimizing the placement of vehicle sensors to maximize coverage
of surrounding areas while minimizing costs
     
· Artificial Intelligence: Enhancing machine learning processes by optimizing the selection of features for AI/ML models
     
· Financial Services: Helping banks more accurately detect and identify fraudulent activity within their transactions data streams

 

 

 

QUBT-U and Workforce Development

 

It is often stated that children are our future.
We at QCI believe the education of the American workforce is critical to the advancement of high technology across industry and academics.
QCI is dedicated to ensuring that quantum computing is accessible to the academic community at every level, from high schools to graduate
levels. That is why we established QUBT-U (https://www.quantumcomputinginc.com/qubt-u/) which gives academic institutions free access
to our Qatalyst platform to allow students to learn how to use quantum computers in their areas of study. We have partnered with a number
of universities this past year to provide access to quantum computers via Qatalyst and will expand that program with additional universities.
But we are most excited about including high schools in QUBT-U to further attract students to quantum computing. In this next year we
will be working at the state and federal levels to expand our QUBT-U program to further reach students in every part of our community
to give them the opportunities to participate in the future of quantum computing.

 

Explore New Partnerships

 

Last year QCI announced a technology collaboration with Amazon Web
Services (AWS), with Qatalyst now available as a software-as-a-service (SaaS) on AWS Braket Qatalyst accesses quantum computers from D-Wave,
Ion-Q, and Rigetti via AWS Braket. The availability of Qatalyst on AWS Braket positions QCI directly in the middle of a global value chain
for AWS business users. This partnership has helped us as much as we have helped the users of AWS Braket achieve their objectives.

 

QCI is a small company with big technology and big ideas. We know that
we need to advance rapidly into markets with our innovative technologies and we need solid partnerships with established market leaders
to do so successfully. Fortunately we have the leadership on board that has done that before and we are working aggressively to establish
partners in the LiDAR, Cybersecurity, chip manufacturing and medical imaging domains to get our technologies into the market.

 

Establish a Senior Technology Advisory Group

 

Early on we established a group of very talented and accomplished executives to help shape the company’s strategy. We will be
expanding on this idea modeled after a very successful panel on which I served during my time with the US Government, the Intelligence
Science Board. We know that we have an excellent management team, but day to day execution does not leave much time to focus on some of
the higher level challenges the team often faces. To assist our management team, we have begun assembling a highly esteemed group of technology,
business, former government and academic professionals to help QCI deal with the challenges of its growth and expansion into the market.
This august and diverse group will allow us to think out of the box on issues that every rapidly growing faces to ensure that we are asking
the hard questions, continually innovating, and being aware of market changes and conditions that could potentially threaten QCI or offer
opportunities for growth.

 

 

 

Building Shareholder Value

 

We are building shareholder value by focusing on the needs of our customers
and delivering value today. The acquisition of QPhoton and the addition of top industry talent to our team are great examples of that.
We are better positioned and more focused on delivering value – providing solutions to real world problems through the application
of our technology, than we have ever been. As a shareholder of QCI, you should be excited by the opportunities this company has to not
just make a difference in the marketplace, but the world. I recently received a message from one of our original investors in QCI that
only knew of the company through his research in the quantum computing market. He invested in QCI because at the time, his wife was suffering
from multiple sclerosis, because he believed that quantum computing one day might contribute to the discovery of a cure of that and other
horrible diseases. Regrettably, she passed away before quantum computing could contribute to that goal. However, upon learning of the
acquisition of QPhoton and the capabilities the combined companies we now have, he reiterated his commitment to QCI and his belief that
we will one day enable researchers to find a cure for diseases that took his wife and countless others, way too early in their lives.
His story is fundamentally why we are doing what we do – we want to create the best technology to put into the hands of researchers,
students, business people, our government and anyone who is dedicated to making this world better. We believe quantum computing will do
that and we thank you for giving us the opportunity to contribute to that outcome.

 

Respectfully,  
   
/s/ Robert
Liscouski
 
Robert Liscouski  
Chairman, Chairman and CEO  

 

 

 

Important Cautions Regarding Forward-Looking Statements

 

This letter contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could
be deemed forwardlooking, including, but not limited to, statements regarding the future performance of Quantum Computing, Inc. and its
consolidated subsidiaries (the “Company” or “QCI”), including its financial outlook; the other expectations described
under “QCI’s Roadmap to Quantum Future”, “QCI Quantum EcoSystem”, “QUBT-U and Workforce Development”.
QCI’s Path to the Future”, Goals for 2022-23”, 2022-2023 Pipeline”, “Explore New Partnerships”, and
Establish A Senior Technology Advisory Group” above; and the Company’s business strategy, plans, and objectives for future
operations. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “appears,”
“should,” “expects,” “plans,” “anticipates,” “could,” “outlook,”
“intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,”
“predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions
that concern our expectations, strategy, plans, or intentions. Such statements are subject to a number of known and unknown risks, uncertainties,
assumptions, and other factors that may cause the Company’s actual results, performance, or achievements to differ materially from
results expressed or implied in this letter. Investors are cautioned not to place undue reliance on these statements, and reported results
should not be considered as an indication of future performance. Risks that contribute to the uncertain nature of the forward-looking
statements include, among others, the effects of the COVID-19 pandemic on the Company’s business, including as a result of new strains
or variants of the virus, and the global economy generally; litigation, and other proceedings related to the Company’s business
in a variety of areas; the effectiveness of the Company’s strategy and business initiatives; the Company’s lack of liquidity;
and changes in political, business, and economic conditions; as well as other risks listed or described from time to time in the Company’s
filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2021, the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022
and June 30, 2022, and any subsequent filings, which are or will be on file with the SEC and available on the investor relations page
of the Company’s website. All forward looking statements are based on information and estimates available to the Company at the
time of this letter and are not guarantees of future performance. Except as required by law, the Company assumes no obligation to update
any of the statements in this letter.

 

The information that can be accessed through hyperlinks
or website addresses included herein is deemed not to be incorporated in or part of this letter.

 

Qatalyst™ and QikStart™ are trademarks
of Quantum Computing Inc. All other trademarks are the property of their respective owners.

 

 

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 Securities
and 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 its
charter)

 

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) (Zip
Code)

 

(703) 436-2161

(Registrant’s telephone number, including
area code)

 

(Former Name or Address, if Changed Since Last
Report)

 

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
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement
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 funds
acquired.

 

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.

 

 

 

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
Principal Accounting Officer

 

Exhibit 23.1

 

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 

 

 

 

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

  

 

 

Report of Independent Registered Public Accounting
Firm

 

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’s
Ability 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

 

 

QPHOTON, INC.

Balance Sheets

(Audited)

 

    December 31,     December 31,  
    2021     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  

 

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

 

 

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 part
of these unaudited consolidated financial statements.

 

 

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 part
of these audited financial statements.

 

 

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 part
of these audited financial statements.

 

  

QPHOTON, INC.

Statement of Cash Flows

For the Twelve Months Ended December 31, 2021

(Audited)

 

    Twelve Months Ended
December 31,
2021
    Twelve Months Ended
December 31,
2020
 
CASH FLOWS FROM OPERATING ACTIVITIES            
Net loss   $ (1,409,118 )     (844,552 )
Adjustments to reconcile net income (loss) to net cash                
Accounts Receivable                
Prepaid Expenses     (3,538 )      
Depreciation     8,713        
Accounts Payable     (73,780 )     160,041  
Accrued Expenses     (595,913 )     672,223  
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 )     (14,788 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Fixed Assets – Property and Equipment     (65,540 )        
Security Deposit     (151 )     (2,500 )
CASH USED IN INVESTING ACTIVITIES     (65,691 )     (2,500 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Contribution from related party             14,788  
Proceeds from loans     500,592        
CASH PROVIDED BY FINANCING ACTIVITIES     500,592       14,788  
                 
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     $  

 

The accompanying notes are an integral part
of these consolidated financial statements.

 

 

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.

 

 

Note
2. 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.

 

 

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, Earnings
Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain
Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments
of 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, 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.

 

 

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 17th, 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.

 

 

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,
2021
    December 31,
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  

 

Note
6. Debt

 

Convertible Notes Payable – BV Advisory
Partners, LLC

 

On March 1, March 14th, and July 9th,
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.

 

 

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, 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 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.

 

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            

 

 

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.

 

Exhibit
99.2

 

QPHOTON,
INC.

Unaudited
Condensed Financial Statements

Three
Months ended March 31, 2022 and 2021

 

CONTENTS

  

 

 

QPHOTON,
INC.

Balance
Sheets

(Unaudited)

 

    March 31,     December 31,  
    2022     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  

 

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

 

 

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 )

 

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

 

 

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 )

 

The
accompanying notes are an integral part of these audited financial statements.

 

 

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 )

 

The
accompanying notes are an integral part of these audited financial statements.

 

 

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   $          

 

The
accompanying notes are an integral part of these consolidated financial statements.

 

 

QPHOTON,
INC.

Notes
to Financial Statements

March
31, 2022

(Unaudited)

   

Note
1. 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.

 

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 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
$2,761,993 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.

 

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. 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 March 31, 2022,

 

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.

 

 

Note
2. 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.

 

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, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives
and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite
Deferral for Mandatorily Redeemable Financial Instruments of 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, 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.

 

 

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 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.

 

Note
4. License Agreement – Stevens Institute of Technology

 

Effective
December 17th, 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, 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.

 

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.

 

 

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.

 

Note
5. 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  

 

Note
6. Debt

 

Convertible
Notes Payable – BV Advisory Partners, LLC

 

On
March 1, March 14th, and July 9th, 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 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.

 

 

Note
Purchase 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.

 

Note
7. 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.

 

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 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.

 

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 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.

 

 

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)   $     $  

 

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 March 31, 2022.

 

Note
10. 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.

 

 

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.

 

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
statements of the Company for the three months ended March 31, 2022 included in the Company’s Quarterly Report on Form 10-Q filed
with the SEC on May 23, 2022;

 

the historical audited consolidated financial
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
SEC on March 15, 2022.

 

the historical unaudited condensed consolidated
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
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

  

 

 

QUANTUM COMPUTING INC.

Pro Forma Combined Balance Sheets

December 31, 2021

(Unaudited)

 

    Quantum
Computing Inc.
    QPhoton, Inc.     Eliminations     Notes     Pro Forma
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 part
of these unaudited consolidated financial statements.

 

 

QUANTUM COMPUTING INC.

Pro Forma Combined Balance Sheets

March 31, 2022

(Unaudited)

 

    Quantum
Computing Inc.
    QPhoton, Inc.     Eliminations     Notes   Pro Forma
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 part
of these unaudited consolidated financial statements.

 

 

QUANTUM COMPUTING INC.

Pro Forma Combined Statement of Operations

For the Twelve Months Ended December 31, 2021

(Unaudited)

 

    Quantum
Computing Inc.
    QPhoton, Inc.     Eliminations     Notes     Pro Forma
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 )

 

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

 

 

QUANTUM COMPUTING INC.

Pro Forma Combined Statement of Operations

For the Three Months Ended March 31, 2022

(Unaudited)

 

    Quantum
Computing Inc.
    QPhoton,
Inc.
    Eliminations     Notes     Pro
Forma
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 part
of these unaudited consolidated financial statements.

 

 

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.

 

 

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

 

Leave a Reply

Your email address will not be published.