Quantum Computing Inc. Fair Value Disclosure

Note 4 – Fair Value Measurements

 

The carrying amount of certain financial instruments held by the Company, such as cash equivalents, accounts receivable, contract assets and liabilities, accounts payable, and accrued and other current liabilities, approximate fair value due to their short maturities. The carrying amount of the liabilities for the convertible preferred stock warrants represent their fair value. The carrying amounts of the Company’s borrowings and lease liabilities approximate fair value due to the market interest rates that these obligations bear and interest rates currently available to the Company.

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

 

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities;

 

Level 2

Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

 

Level 3

Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

 

See Note 12, Capital Stock, for a full discussion of the warrant liability.

 

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

 

		December 31, 2025
						Quoted Prices in Active Markets for				Significant Other				Significant
		Aggregate Estimated Fair Value				Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)
Assets classified as cash equivalents:
Mutual funds		$	720,579			$	720,579			$	-			$	-
		$	720,579			$	720,579			$	-			$	-
Assets classified as marketable securities: available-for-sale debt securities
U.S. Treasuries		$	426,446			$	426,446			$	-			$	-
Corporate debt securities			356,096				-				356,096				-
		$	782,542			$	426,446			$	356,096			$	-

 

		December 31, 2024
						Quoted Prices in Active Markets for				Significant Other				Significant
		Aggregate Estimated Fair Value				Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)
Assets classified as cash equivalents:
Mutual funds		$	78,945			$	78,945			$	-			$	-
		$	78,945			$	78,945			$	-			$	-

 

The Company estimates the fair value of available-for-sale debt securities using actual trade and indicative prices sourced from third-party providers on a daily basis to estimate the fair value. If observed market prices are not available (for example securities with short maturities and infrequent secondary market trades), the securities are priced using a valuation model maximizing observable inputs, including market interest rates.

 

As of December 31, 2025 and 2024, the Company did not have any non-financial assets measured at fair value on a recurring basis. During the years ended December 31, 2025, 2024 and 2023, there were no transfers between levels.