Quantum Computing to acquire QPhoton

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Quantum Computing Inc. of Leesburg, Va., announced May 24 it entered into a definitive agreement to acquire Hoboken-based QPhoton, a quantum photonics innovation company founded by Yuping Huang, an associate professor at Stevens Institute of Technology.

According to the announcement, the acquisition of QPhoton, which has developed a series of quantum photonic systems (QPS), advances QCI into a full-spectrum quantum software and hardware company.

Huang — whose full title at Stevens Institute is Gallagher Associate Professor of Physics and the founding director of the Center for Quantum Science and Engineering — has developed quantum techniques based on more than $18 million in investments from federal agencies including the Department of Defense, the National Science Foundation and NASA. The announcement said his research has led to the development of practical quantum and photonic technologies ranging from quantum networking, quantum biomedical imaging, and quantum processing on a chip to quantum remote sensing.

QPhoton’s QPS, including those for AI and optimization, operate at room temperature and maintain stability in various environments, avoiding costly and sometimes complicated environments required by other technology.

“This acquisition is key to QCI delivering on its commitment to be the democratizing force that empowers non-quantum experts to realize quantum value,” Robert Liscouski, CEO of QCI, said in a statement. “The combination of QPhoton’s powerful quantum processing technology and systems with QCI’s Qatalyst software significantly accelerates accessibility to quantum solutions for real business problems. Just a year ago this quantum functionality seemed far off. QCI, with QPhoton’s technology, will be launching ready-to-run anywhere, full-stack quantum systems that can deliver affordable, user-friendly solutions for real business problems to a much larger audience.”

Huang added, “Joining forces with QCI is a momentous occasion in achieving my life’s work in delivering real quantum value to industry. [The combination of QPhoton’s QPS and QCI’s Qatalyst software] lays the groundwork for scalable quantum solutions to be incorporated into critical business activities and will operate seamlessly alongside classical technology today.”

Paul Nashawaty, senior analyst at Enterprise Strategy Group, said combining these innovations will be useful in industries such as “optimization and drug discovery.”

“This is the same process that drove value in classical computing and we’re seeing it now in quantum,” Nashawaty said.

Under the agreement, QPhoton will be a wholly owned subsidiary of QCI; Huang is expected to join the company as a director and officer. He will also continue to lead Stevens Institute’s Center for Quantum Science and Engineering. Therefore, the partnership will provide educational opportunities for the university’s physics students, Liscouski said.

“Stevens Institute of Technology is immensely proud that Professor Yuping Huang, QPhoton and QCI have reached this exciting point in their goal to make quantum capabilities broadly accessible to many industries,” said Nariman Farvardin, president of Stevens Institute. “Dr. Huang is a talented researcher and entrepreneur and a product of the fertile environment at Stevens that supports faculty in creating new technologies that have the potential to be major disruptors in industry and society.”

At the close of the transaction, expected in the third or fourth quarter of 2022 and subject to certain conditions, QCI will issue to QPhoton’s stockholders aggregate merger consideration consisting of: 5,802,206 shares of QCI’s common stock; 2,377,028 shares of a new series of QCI’s preferred stock, convertible into 23,770,280 shares of common stock (subject to receipt of the approval of QCI’s stockholders); and warrants exercisable, at a purchase price of $0.0001 per share, to purchase up to 7,028,337 shares of common stock (subject to receipt of the approval of QCI’s stockholders).