From Product to Pipeline

01 Quantum’s Next Phase of Commercialization

 

Recap 

Sophic Capital’s The (01) Quantum Window Is Fast Approaching report highlighted how quickly the post-quantum backdrop has evolved in 2026. Google, NVIDIA, Microsoft, and IBM have all announced developments that reinforce the pace of quantum progress, while the U.S. government has moved from broad migration guidance toward investments, concrete deadlines, procurement requirements, and cryptographic inventory.

Consequently, for Sophic Capital client 01 Quantum Inc. [TSXV: ONE, OTCQB: OONEF], the story has reached a different stage. The investment debate is becoming less about whether the Company can develop post-quantum technology, or whether there is a market for its solutions, and more about whether it can convert that technology and market demand into a repeatable commercial pipeline. That is the phase we think investors should focus on now.

The Story is Moving Beyond R&D

01 Quantum has spent years developing its IronCAP™ technology and building commercial applications around it.

Today, the Company has a quantum-safe remote-access product commercially available through Hitachi, qVAULT commercially available through qLABS, a market-ready email-security product, a demonstrated secure-AI platform, and an expanding IP portfolio.

The financials have shown product-market fit. Customers have paid 01 Quantum to develop and integrate its technology into real-world products, demonstrating both that the technology works and that counterparties see sufficient commercial potential to fund its deployment. Fiscal Q3 2026 also showed some initial, though still small, partner-driven royalties.

Revenue was $64,410 in the quarter as two customer-funded development projects moved into commercialization, while year-to-date revenue reached $1.08 million versus $333,269 a year earlier. The quarterly revenue decline is not an accurate gauge for the Company’s progress as it reflects the completion of one-time development and integration fees rather than a reversal in commercialization. The developed products are now in market, with 01 Quantum participating through royalties from its Japanese partner and qLABS as end-market adoption develops.

01 Quantum ended July with approximately $2.88 million of cash and cash equivalents, which, combined with a disciplined cash management philosophy, enables the Company to continue advancing R&D and product marketing.

In our view, the significance of the revenue to date is less about its absolute level and more about what it demonstrates: customers have been willing to spend meaningful capital to bring 01 Quantum’s technology into commercial applications. The next step is to scale.

The “Fire Alarm” Moment

One of the challenges with post-quantum cybersecurity is timing. Most large organizations understand the problem. Enterprises have been hearing about quantum risk for years. However, that does not necessarily mean procurement budgets appear immediately. What is less predictable is the point at which awareness turns into urgent spending.

Management uses the analogy of a crowded room where everyone has been told there may eventually be a fire. People understand the risk, but activity remains relatively normal until someone actually sounds the alarm. At that point, everyone moves at once. Post-quantum cryptography migration may progress in a similar way: while progress may be tough to see on the surface initially, past a certain point it translates into a large movement.

The exact catalyst that precipitates the volume move in post quantum cryptography adoption is impossible to predict. It could be another breakthrough in quantum hardware, a government deadline, a high-profile cybersecurity event, or simply an increasing realization among corporate boards and CISOs that migration cannot be completed overnight. The migration itself will likely take years, just as Y2K preparations took some decades ago. The opportunity is therefore not based on predicting one specific Q-Day. It is based on being positioned before enterprise spending on post quantum solutions broadly accelerates.

Management believes the market is already beginning to move, with increasing interest flowing through partners and early discussions with large financial institutions and other enterprise customers. The goal is to ensure that when enterprise customers move from planning to implementation, 01 Quantum is already embedded with the organizations they trust to execute that migration.

That distinction matters for investors. The thesis is not that a single event suddenly creates billions of dollars of spending. It is that the post-quantum migration cycle may be beginning now, and companies positioned early in customer and partner relationships could participate as spending expands.

Selling Into the Enterprise is a Distribution Problem, As Always

01 Quantum is a relatively small company targeting customers that include large enterprises, governments, financial institutions, and defence organizations. Trying to build a direct global enterprise-sales organization from scratch would be expensive and, in our view, risky, especially giving the timing unpredictability we previously highlighted. Management, therefore, pursued a partner-led revenue growth model.

Large organizations already have established relationships with systems integrators, cybersecurity vendors, consultants, and hardware providers. When a bank or government department begins a major initiative such as a cryptographic migration, it will typically rely on those existing suppliers to assess its infrastructure, manage implementation, and coordinate technology vendors.

01 Quantum’s objective is to become the PQC specialist behind that relationship. That distinction is central to the investment case. The Company does not need to build every component of a quantum-safe enterprise stack or own every customer relationship. It needs to provide technology and expertise that larger partners can incorporate into broader migration programs.

The Systems-Integrator Model is Now Public, With CGI

That strategy became more tangible in June and was clarified on 01 Quantum’s Q3 2026 earnings call. The previously unnamed Canadian global systems integrator is CGI, with management confirming the relationship on the call. Under the PQC Engineering Partnership Agreement, 01 Quantum serves as a core PQC subject-matter expert supporting the delivery, integration, and deployment of quantum-safe architectures for enterprise and government customers.

The scale of the channel matters. CGI generated $15.9 billion of revenue in fiscal 2025, employs approximately 94,000 consultants and professionals, serves roughly 5,500 clients, and operates from about 400 locations globally. That gives 01 Quantum potential access to an enterprise and government customer base that would be difficult and expensive to secure independently.

Importantly, CGI is already building a broader quantum-readiness practice. Its public offering includes executive quantum-readiness assessments, proof-of-concept development, quantum-safe cybersecurity strategy, and post-quantum migration planning. CGI’s PQC Essentials service specifically helps organizations discover vulnerable cryptography, prioritize exposures, and develop migration plans, and CGI says it is among the first NCSC-assured cybersecurity consultancies for PQC Discovery and Migration Planning.

This mirrors how larger consulting firms are approaching the market. IBM offers an end-to-end quantum-safe transformation model spanning cryptographic discovery, risk assessment, migration planning and remediation, while Accenture similarly positions its offering around strategy, discovery and crypto-agility. The takeaway for 01 Quantum is important: it does not necessarily need to compete with the large integrators for the entire migration mandate. It can provide specialized PQC technology and implementation expertise inside the broader programs those firms are already selling.

The CGI agreement goes beyond general cooperation. It creates a framework for multiple Statements of Work and allows CGI to resell, sublicense, and distribute 01 Quantum’s products and services. CGI can lead the broader customer relationship and systems integration, while 01 Quantum provides its technology, maintenance, technical support, and specialized PQC expertise.

For a company of 01 Quantum’s size, that is potentially a highly capital-efficient route to market. Rather than building a large direct enterprise sales force, the Company can be introduced into existing CGI relationships when specialized post-quantum or secure-AI capabilities are required. The key question now is not whether the channel exists, but how many customer engagements, Statements of Work and ultimately recurring revenue streams emerge from it.

The Partner Ecosystem is Broadening

The July partnership with Crypto4A Technologies added a quantum-safe HSM and secrets-management partner to 01 Quantum’s channel strategy.

Crypto4A brings expertise in cryptographic agility, secure key management, and high-assurance infrastructure, while 01 Quantum focuses on PQC software and application-level migration. The companies are collaborating on customer introductions, education, and market opportunities.

More recently, on September 15, 01 Quantum and Utimaco formalized a global PQC Technology Alliance aimed at helping governments and enterprises move from post-quantum planning toward implementation.

The fit is complementary: 01 Quantum contributes PQC software, cryptographic discovery, and application-migration expertise, while Utimaco brings HSMs, secure key management, cryptographic infrastructure, crypto-agility, and quantum-safe security.

The companies plan to collaborate on technical integration, joint solution design, pre-sales engineering, demonstrations, customer education, and customer opportunities, supported by joint go-to-market initiatives.

We think the significance is broader than another partnership announcement. Enterprise PQC migration spans discovery, assessment, application remediation, key management, secure infrastructure, and ongoing operations.

01 Quantum does not need to own every layer. Relationships with CGI, Crypto4A, and Utimaco increasingly give it a route to participate where its implementation expertise adds the most value.

The New U.S. Executive Order Makes the Channel Strategy More Relevant

The June U.S. Executive Order may also help explain why these partnerships matter. Among other requirements, the Order directs CISA and NIST to develop guidance defining minimum elements for a Cryptographic Bill of Materials, or CBOM. The objective is to make the cryptographic assets inside hardware and software easier to identify and assess.

This represents an important step in the migration process. An enterprise cannot remediate vulnerable cryptography if it does not know where that cryptography exists. But identifying it is only the beginning. A CBOM might tell an organization that a particular application, certificate, key-management system, or protocol is vulnerable. Someone still needs to determine the importance of that vulnerability, prioritize it, and implement a solution.

Management has used a useful analogy: the CBOM is the X-ray; the next step is interpreting the image and fixing the problem. That potentially creates a broader role for implementation-focused PQC vendors. The commercial chain could increasingly look like:

Discovery → Assessment → Migration Planning → Remediation → Integration → Ongoing Support

01 Quantum does not need to own the discovery tool. It can partner with the companies creating inventories and focus on the engineering work required once vulnerabilities have been identified.

Build the Channel Before Demand Accelerates

Management’s strategy is to build that ecosystem before the market reaches its most urgent phase.

The logic is straightforward. A major financial institution is unlikely to reach Q-Day and suddenly kickstart its strategy for a quantum-safe algorithm, and other quantum safe technologies. It will approach the integrators, HSM vendors, consultants, and technology providers already responsible for its infrastructure, in order to mitigate this risk ahead of time.

For 01 Quantum, being embedded with those organizations before migration budgets expand could be more valuable than trying to establish the relationship after demand has already accelerated. That is why we view the current partner-building phase as more than simply adding logos to an investor presentation. Partnership announcements provide credibility. Conversion provides value.

Hitachi Shows What the Model Can Look Like

Hitachi remains the clearest evidence that the partner-led model can work. Hitachi’s willingness to fund the initial development work suggests it saw sufficient commercial potential to justify investing in the product before launch.

01 Quantum was engaged to convert Hitachi Solutions Create’s existing DoMobile remote-access platform into a quantum-safe offering. DoMobile Ver.5 became commercially available in Japan in January 2026, and the Company receives engineering fees and ongoing royalties. In its Q3 update, management said deployment activity continued to expand across enterprise and regulated sectors.

The important part is not simply that Hitachi is a recognizable name. It is the structure. The partner owns the established product, customer base, and distribution. 01 Quantum provides the specialized post-quantum technology and engineering. If sales grow, 01 Quantum participates without carrying the full burden of selling the product itself.

That model is difficult to value based on one implementation. If it becomes repeatable across several partners and applications, the economics look substantially more interesting.

AI Creates Another Door into the Same Customers      

The channel opportunity is not limited to cryptographic migration. QAW gives 01 Quantum another reason to engage with many of the same financial, government, defence, and enterprise customers.

The Company’s collaboration with Carleton University and NC CIPSeR is designed to study data leakage in AI environments using a simulated financial-institution setting, with a later phase evaluating FHE as a potential privacy-preserving solution.

We continue to think AI could become the larger long-term opportunity. Unlike Q-Day, AI privacy is not dependent on a future technological event. Organizations already need to decide whether sensitive customer information, government data, intellectual property, and proprietary models can safely be used in AI workflows.

That gives 01 Quantum two related but distinct conversations with enterprise customers:

How do we make our existing cryptography quantum-safe?

and

How do we use AI without exposing our most sensitive information?

The same partner ecosystem could ultimately support both.

The AI Platform Opportunity is Attracting Strategic Value

The platform opportunity is also being validated externally. On September 3, NVIDIA agreed to acquire Hugging Face for approximately US$12.93 billion. Hugging Face has become a major distribution layer for AI, with more than 18 million developers, more than 3 million models and more than 200,000 companies using the platform.

01 Quantum is not directly comparable to Hugging Face, but the transaction is relevant to QAW’s longer-term marketplace thesis. 01 Quantum’s roadmap contemplates a secure AI model marketplace where model developers could distribute specialized models while protecting both model IP and customer data. NVIDIA’s willingness to commit nearly US$13 billion to a model distribution platform underscores the strategic value being placed on AI ecosystems that sit between model creators and enterprise users.

Large Financial Institutions are Beginning to Engage

Management has indicated that 01 Quantum is advancing opportunities with large financial institutions, a market where security requirements, procurement standards, and implementation hurdles are especially high. While these discussions remain early and should not be treated as contracted revenue, we think the level of engagement is notable.

More broadly, 01 Quantum has already demonstrated that customers and partners are willing to fund meaningful development work. Companies generally do not commit hundreds of thousands of dollars to custom engineering and integration unless they see a credible commercial use case and a potential path to deployment. In our view, those upfront development fees provide more than near-term revenue; they represent third-party validation that customers see enough potential economic value to invest alongside 01 Quantum in bringing these solutions to market.

The next step is converting that development work into the more scalable economics the Company is targeting: software licensing, royalties, managed services, and recurring revenue.

What the Pipeline Should Look Like

At this stage, we would not focus on trying to assign a dollar value to 01 Quantum’s pipeline. The Company has discussed growing government, defence, enterprise, and partner activity, but it has not publicly disclosed a total qualified pipeline value. Instead, we think investors should watch the progression of the funnel.

The model should increasingly move through several stages:

Partner established à Customer opportunity identified àTechnical assessment / proof of concept à Statement of Work à Paid implementation à Royalty, support, managed-service or recurring revenue.

The number of partnerships matters less than how many opportunities move down that funnel.

What We Would Watch Over the Next Several Quarters

The next phase should provide more evidence on whether the channel model is becoming repeatable.

We would watch for:

• additional Statements of Work and customer activity through CGI;
• customer engagements arising from Crypto4A, Utimaco, and other channel partners;
• additional Statements of Work through the global systems-integrator relationship;
• new paid migration and integration projects;
• growth in royalties from DoMobile;
• adoption and usage around qVAULT;
• the first meaningful commercial QAW engagement;
• government or defence pilots that progress into paid programs;
• increased professional or managed-services revenue; and
• repeat business from customers or partners already using 01 Quantum technology.

The most important signal would be repeatability. Hitachi has validated the technology. Several Hitachi-like relationships begin to validate the business model.

The Risks Have Also Changed

As 01 Quantum moves further into commercialization, the investment risks shift as well. The primary question is no longer simply whether the technology works. Enterprise sales cycles can be long. Partner relationships do not automatically translate into revenue. Proofs of concept can stall before procurement. Large partners may have competing priorities. And supporting multiple products across AI, digital assets, remote access, and email could stretch the resources of a small company.

There is also a revenue-quality question. Development fees are useful early validation, but the longer-term investment case becomes stronger if higher margin royalties, support agreements, managed services, and other recurring streams become a larger portion of the mix. Those are the metrics we think matter as 01 Quantum progresses on the revenue generation path.

Conclusion

01 Quantum appears to have reached an important point in its development. The Company has proven technology, commercially deployed products, early revenue, a growing IP portfolio, and a partner ecosystem capable of reaching customers substantially larger than 01 Quantum could pursue efficiently on its own. Year-to-date fiscal 2026 revenue reached approximately $1.08 million, while the partner network has expanded through CGI, Crypto4A, and now Utimaco.

The significance of the early development revenue is not simply the dollars themselves; it is that sophisticated counterparties have been willing to fund product development because they see a potential commercial market on the other side.

At the same time, the market backdrop is becoming more supportive. The U.S. government is forcing cryptographic inventory and migration planning deeper into federal agencies and procurement, while AI privacy creates a second commercial driver that does not depend on the timing of Q-Day.

The next chapter is therefore fairly straightforward. The technology has been built. The channel is taking shape. Now the pipeline needs to grow and convert into revenue over time.

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Disclosures

01 Quantum Inc. [TSXV: ONE, OTCQB: OONEF]  has contracted Sophic Capital for capital markets advisory and investor relations services.

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