01 Quantum Inc.

Okay, it's time to get going. Good morning, everyone. And welcome to our first quarter 2026 results and a business update. I'm Brian Stringer. I'm Chief Financial Officer for Zero One Quantum. And with me today is Andrew Chung, our Chief Executive Officer. The agenda today will be Andrew will give a presentation of the company, of the results, a business update on how we're progressing. And that'll be wrapped up by a Q&A. I'll moderate the Q&A at the end. And everybody knows, I think by now, on Zoom calls, how to use the Q&A. There's a button at the bottom where a Q&A, just click it. Send me the question and we'll get to it, time permitting, at the end of the presentation. Now, if you notice, we have our disclaimer, which forms an integral part of this presentation. Take a few seconds to look it over, please. And with that, I'll now turn it over to Andrew for the presentation.

Thank you, Brian. How are you doing? I'm Andrew, the president and CEO of Zero One Quantum. We specialize in making everything quantum safe, which is guarding against hackers who are using quantum computers to do the dirty works. So we started doing this about seven years ago, maybe more than seven years ago, invested over seven million dollars to reach where we are today. We are the first one in the post quantum cybersecurity space that has crossed into revenue generations last year. We are carrying over this advantage into 2026 and beyond. So I'm going to give you all the details later. Our value proposition is very simple. I won't go into the details about how quantum computer works, what they are, you know, quantum annealing or whatever. All I want to say is that their excessive computing power has created an unprecedented cybersecurity threat for the world. or a.k.a. kill date, which is the day when the bad guys are using quantum computers to do the dirty works. So on and after kill date, essentially everything under the sun that is protected by today's cryptographic technology, such as RSA, elliptic curve, will become totally naked in front of a quantum computer. QDA concerns everyone not only because it is mathematically proven by Shor's algorithm that it can crack those RSA and elliptic curve algorithms, but it is also affecting everything from email to financial to medical, AI, cryptocurrencies, just to name a few. So major enterprises like Apple, Google, Microsoft have already started their PQC conversion, the post-quantum cryptography conversion journey already. So if you don't believe in how business people handle QA, You should at least listen to the government. First of all, the U.S. President's Office back in 2022 had already issued an official letter, NSM-10, warning that the agencies to be very mindful of a famous attack called HNDL, Harvest Now, Decrypt Later. whereby the hackers are obtaining the encrypted data. They hold on to it and wait until they get hold of a quantum computer that is powerful enough, then do the hacking. So the problem is not a problem of tomorrow, but a problem today or even yesterday. So no wonder why Howard Ludnick, the U.S. Secretary of Commerce on a CNBC interview about eight months ago, openly said that the worldwide cybersecurity will be totally broken by quantum computers if we don't act immediately. In addition to that, Jensen Quang of NVIDIA also said that we are now in an inflection point, while Vitalik Buterin of Ethereum also said that there is a 20% chance that QDA would arrive by 2029. And this is dovetailed by the announcement from IBM that they expect to have a full thought-tolerant quantum computer by 2029. But the most concerning fact to me is that all these writings on the wall are only from the open world. There are some closed worlds such as Russia and China whose vendor never published their roadmap. So my biggest worry is kind of like a deep sea like event in the quantum world that one day a company you never heard of the name suddenly announced a quantum computer that beats everything. And if you are not prepared by that day, basically you're toasted. So the bottom line is that You have to act now before it's too late because the difference between two years too early versus one day too late is basically anything. So I keep reiterating that unlike most of our competitors who aim to license their PQC technology for others to do the PQC journey conversion, we are doing it differently. Instead, we are giving it away for free as long as our customers are using us to help them doing the conversion journey. So, for example, you know, they can say that, yeah, we give you a quantum vulnerable product and all we want is that you guys spit out on the other side a quantum state version. So this kind of business model has proven early success versus our competitors who are still largely in pre-money stage. And we have already generated revenue and created some solutions for our customers already. So the the first like of these type of product we have created was for Hitachi head office in Japan. Earlier last year, they asked us to kind of like the the what I just mentioned, they asked us to help them converting their remote access offering to become quantum safe. We spent about six or seven months going through a very tough software engineering process, successfully completed the task, and a joint press release has been issued about two months ago. Now, remote access is very susceptible to HOD and HarvestNow decrypt later attack because your encrypted communication session can be recorded. by hackers, which is kind of like a history book of all your corporate activities that would become naked when the hackers eventually get hold of the quantum computers, right, that they can do the hacking. So being quantum safe gives Hitachi a huge edge, and they are now actively selling this in Japan. Hitachi is selling a server version which is starting price about $6,000 US and a SaaS software as a service subscription model for about $15 per month. So we typically receive a one time engineering fee plus ongoing revenue sharing. So we don't need to spend. The beauty is that we don't need to spend a dime doing sales and marketing. We just sit back, being the SME subject matter expert and collect royalties. A risk-free business. The second application that we have created was to help a crypto foundation. we have started working on crypto, um, uh, POC proof of concept more than like three years ago, because we believe cryptocurrencies will likely be the, the, the probably the lowest hanging fruit for quantum attack because of the heavy financial incentive, as well as the total open nature of cryptocurrencies slash blockchain technologies. So essentially, um, Crypto is a perfect storm for HNDL attack because hackers can easily obtain the public key of any crypto wallet. And they simply hold on to the list of public key and then up to their mercy of which wallet they want first when they get hold of a powerful enough quantum computer. So QLabs Foundation asked us to create for them a truly quantum safe token. And despite the bear market, they called it the token Q1. They went through a successful ICO in February about a month ago. And we are currently in the final stage before commercial launching at the end of April, allowing the token Q1 to be used as a quote-unquote quantum gas fee for crypto users to pay to protect their layer 1 asset like Hyperliquid, the Hype token, the Ethereum token, Solana token, etc. against QDA threats, of course. So this exercise, throughout this exercise, we have applied three patents protection. One was granted and two more in the patent pending stage. And the market size is huge because the whole $4 trillion digital asset market must be protected against due date threat. And similar to Hitachi, we are also receiving a one-time engineering fee plus $22 million number of these Q1 token as the compensation. So a simple math is that for every dollar worth of these PQC gas fee that it would eventually achieve, it would represent 22 and a half million worth, you know, for us. So again, we don't need to spend sales and marketing dollar. We just sit back being their subject matter expert and collect royalties. So another risk-free business. Now the third one is our own product, which is the world first truly quantum safe end-to-end email security product, INCAP-X. It complies with NIST FIPS 203 and 204 encryptions and digital signature standard. So with the quantum safe digital signature, it basically guarantees the authenticity of the sender, hence effectively plugging the whole of phishing email, which is 91% the source of ransomware attack. is end-to-end encryption guarantees privacy, which is a big blind spot, in my opinion, in the usage of email since day one, especially for the highly confidential professional industries, such as financial, legal, accounting, etc. And most importantly, we made it operating as a plug-in of Microsoft Office Outlook, which is the de facto standard in corporate emails. In other words, we are mainstream ready, pending proper marketing budgets. The market size is huge, like the total addressable market. It's very simple that there are 730 million business email addresses in the world. So if only 10% of them are serious and wanting some quantum protection and paying $3 a month, that's a potential $2.6 billion annual revenue offer grab for us. So after that, right, besides all these three revenue generators that we have already created, we are also cooking another, I would call it bigger than the combination of all these three in this year and next year. We have a unique invention that is kind of like a crossover between AI and quantum safety. if there are if there's one single obstacle that prevent ai from doing its full potential is privacy because ai operations today are performed in unencrypted fashion totally and the privacy applies not only on the user data that breaches Business confidentiality, compliance, national securities, etc. But also the AI model itself can be pirated. So there's a huge market need for privacy preserved AI operations. And we have these solutions. Now, during the most of 2024 and last year, we have invested heavily in creating a patent pending technology that we call quantum AI wrappers, QAW technology. And this is basically using full homomorphic encryption technology to encrypt. both the user data and the AI model before performing AI inference. Together with quantum safe communication, we have essentially protected the privacy of both the user data and the AI model while at the same time operating everything in a quantum safe fashion. So this year and next year would largely be our market building stage for the QAW market as professional services and managed services. So the total addressable market is huge, growing from 0.9 billion because basically it's paralyzed, as I mentioned earlier by privacy, last year to 5.4 billion by 2032. And the full homomorphic encryption subset alone has a size of 850 million by 2028 already, while the subsegment of finance, government, and healthcare alone has a size of 650 million. So it's a very sizable addressable market that we are diving into. So our value proposition is very straightforward, which is to protect the user data and the IP of the AI model. User data protection allows compliance and national security related users to take full advantage of public AI without worrying about privacy. And this also opens for dedicated and on-premise deploy business. And finally, we are also creating an Amazon or eBay alike AI marketplace where we allow AI model vendors to list their model for users to search and use in a total quantum secure fashion. So we simply, in this kind of a marketplace, again, similar to Amazon and eBay, we simply share 15% to 25% of the usage revenue, and we will bill for the AI model and deposit for them and taking a percentage as our commission. And these value prepositions also allow us to open to government funding and procurement opportunities. And market channels are very typical PR, public relation, demand generations, partner events, and market events, et cetera, which the sales channel would be typical, direct channel, government procurement, channel partners, and et cetera. So we have created a very tight timeline that the first target is Q1 2026, which is right now that we already have an optimized FHE full homomorphic encryption model, which is ready for demo to various potential customers already that we are currently doing that. And we will have a private AI in the Q2 few months from now this year and followed by a hybrid FHD in the Q1 of next year. then the ai marketplace for private ai will be there by q2 of the of next year and then the optimized version would be by q3 and then culminated with an ai marketplace that is slashed between premium and hybrid fhe by the end of 2027 the end of the next year so So that is a very tight timeline that we are achieving as we speak right now for the crossover between AI and quantum safety. So all of the above are kind of reflected by our Q1 result with 350,000 of engineering revenue. And this is actually up more than 400% from last year. And most importantly, despite ramping up our marketing investor relation, R&D, et cetera, we spent less than $300,000 in the quarter and ended with a cash position of about $3.3 million, which is increased by more than $2.3 million from last year. And we expect income starting from additional area on top of what we already produce, which I think is likely coming from the AI and other service providing. I'd like to take a quick pause here, reserving some time for Q&A, because I think you would have a lot of questions that you would like to ask me, so I'd like to reserve more time for that. So again, as mentioned by Brian, I assume that everyone by now is very familiar with how to use the Q&A section with Zoom. So please do that. And Brian, again, as usual, will moderate your questions. Back to you, Brian.

Okay. Thank you, Andrew. Let me just grab several of them here. Okay. The first one, Andrew, has to do with the Q1 token. And as common as these On the 22.5 million Q1s, he says, how are you reflecting these on the balance sheet? I'll take the first part, and then Andrew can elaborate on the valuation. But with respect to the balance sheet, remember, these were received subsequent to the end of the quarter, so it's a subsequent event. So, no, they're not reflected on the Q1 balance sheet. And going forward, it'll be a matter of we'll disclose in the notes as which follow proper IFRS and GAAP reporting. And I'll turn it over to Andrew now to answer the second part of the question was how do you feel about the value?