Quantum Deception: A $2 Billion fraud built on fake products, fake revenue, and fake partnerships

We believe QUBT is a rampant fraud and shareholders will likely be left with nothing. From inception, the company has defrauded investors by fabricating revenue, misrepresenting their products, and issuing a steady stream of false press releases. To conceal their fraud, QUBT even included a clause in employee separation agreements prohibiting them from talking to the SEC.

Initial Disclosure: After extensive research, we have taken a short position in shares of Quantum Computing Inc (NASDAQ: QUBT). This report represents our opinion and is not financial advice. Do your own due diligence and don't take financial advice from strangers on the internet. Please read our full disclaimer at the bottom of this report.

Fake Products

“They insinuated that there were products that were farther along than they were, to lead the public to believe they had quantum capabilities that they didn’t and products that were in customers hands when they weren’t.” - Former QUBT employee

[it] would take a small army quite some time to make what they currently have work or be a viable product. There’s been no evidence from the company. There’s been no progress. They haven’t even entered the game. No validation that they can run with any interesting results. Until they do that it’s just a glorified University project. - Former QUBT executive

False and Misleading Press Releases

Former employees and people associated with QUBT say it was common knowledge among employees that the CEO was doing anything he could to pump the share price, including issuing false press releases that lied about their products, revenue deals, and partnerships.

• QUBT claims to have a “longstanding relationship” with NASA, but NASA personnel and government contract records confirm this is false.
• QUBT has a single contract with NASA, valued at $26,000. The contract was for generic “computer programming” and QUBT was the sole bidder.
• QUBT falsely claims to have won two contracts directly with NASA and at least 4 subcontracts “awarded by NASA”.
• NASA confirmed to us that they have no relationship with QUBT beyond the single $26,000 “computer programming” contract noted above.
• We spoke with NASA and the prime contractors named in QUBT’s PRs and we found that all the PRs are deliberately misleading or include outright lies.
• The evidence suggests that QUBT bids on low-value, NASA-related contracts for the sole purpose of pumping their stock via misleading press releases.
• In several cases, QUBT bid on small subcontracts from companies that do work with NASA. In each case, the prime contractor confirmed that QUBT was the sole bidder and the contracts were for small amounts. NASA confirmed that they played no role in the issuing of the subcontracts.
• QUBT promoted each of these subcontracts as significant and related to quantum computing. In reality, the contracts were very small, unrelated to quantum computing, and were awarded to QUBT because they were the only bidder.
• In a transparent attempt to hide their fraud, QUBT recently removed some false and misleading PRs from their website.

Fake Deals and Fake Revenue

For years QUBT has struggled to generate revenue because of their lack of real products. QUBT’s solution to this problem was to sign fake deals with undisclosed related parties. The sole purpose for these deals was to deceive investors through promotional press releases containing outright lies.

• QUBT is currently being sued by a former partner for breach of contract and fraud. The plaintiff claims QUBT’s first three revenue deals were completely fake and that QUBT never even sent invoices for the deals.
• One of these deals was with Millionways Inc, a purported AI company. Undisclosed to investors, Millionways Inc was a related party. One of QUBT’s founders was involved with Millionways.
• QUBT later announced a LOI to acquire Millionways. As part of the deal, QUBT paid Millionways $500k via an unsecured note. The deal was never completed and QUBT has been quietly marking down the value of the note because they will never be paid back.
• In 2022, QUBT announced a deal with Quad M Solutions Inc, an OTC listed company with ties to multiple stock frauds.
• Undisclosed to investors, Quad M was a related party. QUBT’s CEO served as a director of Quad M and the co-founders of QUBT were deeply involved in Quad M and are long-time business associates of Quad M insiders and investors.
• In 2022, QUBT signed an MOU with Quad M claiming that they would generate 5-10 dollars per employee per month for QUBT. Unsurprisingly, the deal never materialized and generated no revenue.

Foundry Deception

• In Sep. 2023 QUBT claimed to have chosen a site for their new fab, a 5-acre plot in the ASU Research Park. Park management confirmed that QUBT inquired about the 5-acre parcel but never followed up and never attempted to purchase the property. Now, more than a year after QUBT’s announcement, the 5-acre parcel remains empty, and it still belongs to the orignal owner.
• In Oct. 2024, QUBT claimed to have opened the foundry they announced in September the prior year. However, the company didn’t open a fully operational foundry, instead they opened a small R&D lab in a leased office space.
• QUBT’s R&D lab is in an office building not suitable for industrial use cases.
• QUBT’s R&D space does not have a cleanroom, which is required to produce commercial quality TFLN chips.

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