QuSecure had another exceptional quarter, with commercial enterprise and government leaders increasingly recognizing the quantum threat and taking steps to protect their data. This is due primarily to the Quantum Cybersecurity Preparedness Act, which passed in December and mandates that all Federal agencies begin the post-quantum cybersecurity upgrade journey. In addition, various global whitepapers demonstrate how significant investments in ultra-efficient, focused quantum computers and hybrid classical/quantum approaches may speed up the timeline to Q-Day (when a quantum computer breaks current encryption). We are also seeing more commercial traction. Our conversations with enterprise leaders are about how, when, and where to implement quantum resiliency in their organizations and less about if and why.
As a result, QuSecure’s market traction and brand positioning have increased significantly. In this past quarter, QuSecure was mentioned in over 50 thought leadership and industry articles via various publications, including Forbes, Time, IEEE, CSO, SecurityWeek, Dark Reading, and a customer case study in ITPro Today. QuSecure surpassed a media reach of three billion potential readers in the first quarter alone, underscoring the growing awareness and demand. We have a full slate of customers and partners and a robust pipeline.
We made substantial progress on our product suite. QuProtect TM and QuEverywhereTM are gearing up for an exciting partnership launch next month, where we will bundle our product with the world’s leading provider of enterprise open-source solutions. Also, with Accenture, we successfully tested the world’s first multi-orbit quantum-secure satellite communications uplink/downlink. This remarkable feat from low earth orbit (LEO) to geostationary orbit (GEO) was accomplished without software installation on the existing in-flight satellites. QuSecure focuses not only on the quantum threat but also on providing cryptographic agility and network-wide security for servers and endpoints. Lastly, financing for cybersecurity remains robust even in these tumultuous times.
We thank all of you for supporting us as we help our customers and partners secure their organizations for today and tomorrow. Read on for more details.
Last quarter we centered on product maturation and creating a user experience to inform and empower organizations. This milestone truly puts control in the hands of the cybersecurity leader. Some of our most exciting developments that will impact our products across the board include:
Control Plane, UI, and Crypto Protocol Framework: these are our features that comprise the command center for customer deployments.
In the past quarter, QuSecure has secured incredible partnerships with super-scale companies helping us address commercial and federal markets. We could not be happier with these industry-leading organizations recognizing the quantum threat and choosing QuSecure as their go-to-market partner.
The QuSecure Federal Operations team has been busy in the first quarter of 2023, fulfilling a contract with the Army, conducting demonstrations, submitting proposals, and fielding new opportunities while strengthening our existing Federal Operations solution. QuSecure is utilizing available resources to pursue solutions for emerging technology and modernizing cybersecurity. These solutions are meant to be applicable across various environments and classification levels. We have matured and developed our channel partnerships and customer pipeline so that QuSecure’s solution will soon be implemented across land, air, sea, and space.
As mentioned, we are excited to announce that QuSecure has successfully demonstrated multi-orbit post-quantum communications channels in space. Recognizing the world’s growing reliance on satellite communications, QuSecure and Accenture teamed to deliver a crypto-agile quantum-resilient channel from earth to a low earth orbit (LEO) satellite. From there, the breakthrough transmission included switching from LEO to a geosynchronous orbit (GEO) satellite and back down to earth as a model for redundancy in case of a breach, failure, or threat to satellites in a single orbit. This is a tremendous breakthrough in satellite communications and has implications for the US Government across all departments and commercial satellite agencies. The US Army and other DoD branches have shown interest in QuSecure’s on-orbit capabilities. This successful demonstration of our technology will allow us to reach many more government customers quickly.
QuSecure completed an SBIR Phase III contract last summer with NORAD/NORTHCOM (ARCTIC Innovation). This effort demonstrated the first use of a post-quantum resilient communications channel using a Quantum Random Number Generator (QRNG) to create a post-quantum resilient symmetric session key with randomized key rotation, delivered via the NIST-approved CRYSTALS-Kyber post-quantum algorithm.
A new SBIR Phase III contract was also awarded by ARCTIC Innovation and funded by the Office of Naval Research. QuSecure is the prime contractor for this demonstration and will subcontract to another small business to perform real-time acoustic monitoring of a deployed buoy sensor for contact detection and identification (i.e., ship, air, other) and generate operator alerts for hypersonic, supersonic, and other airborne or surface threats. Additionally, QuSecure will assess the small business’ architecture interfaces for integration with QuSecure technology as risk reduction for joint demonstration during future Global Information Dominance Experiments (GIDEs). QuSecure has also prepared an IATT (Interim Authority to Test) package to allow the deployment of QuSecure solutions at higher classification levels.
QuSecure completed a Phase I SBIR performance with the U.S. Army ASA(ALT) after six months of analysis and technical discussions with numerous Army customers interested in procuring QuSecure technology. Our findings were compiled into a feasibility report detailing our technology’s suitability for Army use cases. Phase I participation warranted an invitation from the Army ASA(ALT) to submit a proposal for a Phase II SBIR with a maximum contract value of $1.7M. The proposal was submitted in early April, and we anticipate an award announcement in the early Q3 timeframe. If awarded, this Phase II opportunity provides a natural pathway to further mature our technology for improved suitability across the Army customer base.
We started this year by dramatically accelerating our federal go-to-market strategy with several new channel relationships. We are optimizing our channel ecosystem with strategic partnerships, allowing us to scale rapidly and open more doors in the federal marketplace. These relationships include access to vast sales forces, test demonstration opportunities, new product capabilities, and new contracting vehicles. These well-cultivated relationships will help us maximize the remaining fiscal year and help secure the US Government with quantum resilience.
To safeguard our corporate security, we adopted a “Just Right” improvement strategy that leverages our existing framework of policies and tools while also considering the functional needs of the business as well as various compliance controls.
For example –
Fulfilling these activities is needed for most compliance standards, constituting expected business practices.
During the first quarter of 2023, we continued focusing on strengthening and streamlining our team. We now have 50 full-time employees and three contractors. This summer, we will host six interns across the business. Some of our latest new hires/moves include:
Aaron Moore, who had been serving as an advisor, joined us as Executive Vice President of Engineering. He leads a best-in-class organization that continues developing industry-leading quantum-resilient encryption technology. We have also upgraded many technical positions in architecture, testing, and development.
Meg Gleason, another member of the QuSecure team who has been creating content for users, marketing, and employees, moved from a contractor role to a full-time employee.
Bert Race, another contractor-turned-employee, is now the Senior Director of Program Management in our FedOps group.
Noah Mesel adds Human Resources to his responsibilities; he has served as our Chief Legal Officer since October 2022.
As we look ahead to our many opportunities in 2023, we are working on upgrading and updating the organization’s systems and processes to support our people more effectively. These upgrades will also enable us to document our compliance with government and private-sector regulatory requirements, which are essential to our military and financial services customers. Our plan for 2023 includes the following:
Aligning our corporate and people strategies will improve business performance and give QuSecure a competitive advantage.
We entered 2023 with notable accomplishments in building intellectual property protection for the business. We have 11 pending patent applications, including filings with the U.S. Patent and Trademark Office and the World Intellectual Property Organization’s Patent Cooperation Treaty (PCT) office.
Our latest three PCT applications focused on innovations in QuProtect for web application implementations. Significantly, PCT clearance on these and our prior applications will allow us to move to national-stage filings with the U.S. Patent and Trademark Office and the patent offices in Australia, Canada, Japan, and the European Patent Office (EPO), as well as the U.S. Upon approval by the EPO. We plan to convert the EPO patents to national patents in the U.K., Germany, and other European countries. In other words, our PCT applications will lead to patent families with over 30 patents worldwide when approved. This work continues to deepen the moat protecting our critical assets.
Our three U.S. trademark applications, filed at the end of 2022, are still pending.
In December, our trademark work resulted in three new trademark applications – for QuSecureTM, QuProtectTM, and QuEverywhereTM. Our branding efforts will solidify our customers’ association with first-of-a-kind quantum encryption technology with QuSecure. We expect action on these applications in the second half of 2023.
2023 is a pivotal year for QuSecure. Ensuring we have a strong brand is fundamental to cementing our leadership position this year. Building upon the solid foundation created in 2022, Marketing’s role in the new year is to establish brand dominance in cybersecurity and craft compelling revenue enablement tools to grow our customer base.
We proudly announce that our media reach topped three billion in Q1, with a record number of press mentions for the quarter. This all-time high for QuSecure demonstrates how powerful the QuSecure brand is in the marketplace. This count increased 4X from one to four billion in the last three months vs. the prior eight months combined. Quarter over quarter, social media mentions increased by 26%. We had terrific media traction in the past quarter, demonstrating that the quantum threat is becoming more mainstream daily.
In March, QuProtect won the 2023 Globee(R) Gold Cybersecurity Award in the Quantum Computing category.
Our continuing efforts to bolster our leadership position in quantum cybersecurity were enhanced last quarter by refreshing our website and adding new podcasts and social media campaigns.
QuSecure continued to build its thought leadership via numerous articles written and published to showcase our intellectual prowess and technical expertise in crypto modernization solutions, including:
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