A class action lawsuit was filed against Quantum Computing Inc. (QUBT), also known as QCI, by Levi & Korsinsky on February 25, 2025. The plaintiffs (shareholders) alleged that they bought QUBT stock at artificially inflated prices between March 30, 2020, and January 15, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Quantum Computing stock during that period can click here to learn about joining the lawsuit.
Quantum Computing is an integrated photonics company focused on delivering “accessible and affordable” quantum machines. QCI claims that its technology and products offer advanced capabilities for application in high-performance computing, artificial intelligence, cybersecurity, and remote sensing.
QCI is also building a first-of-its-kind chip fabrication facility in Tempe, Arizona, optimized for Thin-Film Lithium Niobate (TFLN) device fabrication. According to QCI, this facility is designed to manufacture both passive and active TFLN components and integrated circuits. The company’s tall claims about the TFLN offering are at the heart of the current complaint.
Quantum Computing’s Misleading Claims
According to the lawsuit, QCI and four of its current and/or former senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the capabilities of QCI’s quantum computing technologies, products, and/or services; QCI’s progress in developing a TFLN foundry; and ancillary issues from SEC filings and related material.
For instance, during the Class Period, in its annual report filed on March 18, 2021, QCI noted that its Qatalyst product was the industry’s first publicly available Quantum Application Accelerator. The company further claimed that Qatalyst enabled developers to create and execute quantum-ready applications on traditional computers, as well as run them on quantum computers.
Moreover, in a May 2023 press release, QCI noted that it had received a follow-on task order to support NASA in remote sensing and climate change monitoring. Finally, in a September 2023 press release QCI mentioned that it had identified and secured a five-acre land in the ASU Research Park for constructing a “Quantum Photonic Chip Foundry” for manufacturing TFLN chips. QCI was expected to begin operations in first half of 2024 and mass production of quantum photonics chips by late 2024/early 2025.
However, subsequent events (discussed below) revealed that Quantum Computing allegedly misled investors about the effectiveness of its products and technology, as well as the exact progress of its TFLN factory.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business practices and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the capabilities of QCI’s quantum computing technologies, the scope of its contracts with NASA, and the progress of its TFLN foundry.
The information started becoming clear through partial disclosures made by various publications. On November 27, 2024, and December 9, 2024, Iceberg Research issued reports alleging QCI of misleading investors about its business operations and future prospects. Additionally, on January 16, 2025, Capybara issued a report accusing QCI of overstating its relationship with NASA and pointing out its fake products. Surprisingly, Capybara also accused QCI of lying about the TFLN foundry, stating that the company never purchased any land for its construction. Following the news, QUBT stock lost a cumulative 15.5% over January 16 and 17.
To conclude, the defendants allegedly misled investors about the performance of its quantum computing products and technology, its business contracts with NASA, and the progress of the TFLN foundry. Owing to these challenges, QUBT stock has lost 56.9% so far this year.
