Andrew Cheung, I think we can get started. Well, good morning and welcome to 01's presentation on our fourth quarter results and a business update. I'm Brian Stringer. I'm the Chief Financial Officer for 01 Quantum Inc., and with me is Andrew Cheung, our President and Chief Executive Officer. Before we get started, I'd just draw your attention to our forward-looking statements.
If you would just take a quick look through these as they form an integral part of the presentation. Before I turn it over to Andrew Cheung, I think we're just explaining the agenda for today. Andrew Cheung will give you a presentation on where we've been and where we're going. Hopefully, that explains why we believe 2023 is going to be the catalyst year and for what we've been doing in 2022 and prior.
As a matter of housekeeping, if you have a question you'd like tabled at the end of the presentation because we will have time for Q&A, please, at the bottom of the screen, you can see where and I think we've all used Zoom for quite some time now. Just click on the Q&A, and I'll gather them and present them to Andrew at the end of his presentation. I'll turn it over to Andrew. Andrew, over to you.
Thank you, Brian. Welcome, everyone. Again, my name is Andrew Cheung, President and CEO of 01 Quantum Inc. Welcome to our 2022 fourth quarter financial result and corporate update. When we met in September during our third quarter announcement, I have made a comment that quantum computing development is moving faster than light speed.
It turns out that was an understatement. I also said quantum threats are clearly written on the wall, the question is, can you see them? Only two months later, in November, IBM has fulfilled their promise delivering 433-qubit quantum computers called Osprey.
What does it mean? It means that quantum development is predictable. Just to reiterate IBM's public announcement of a roadmap, they plan to release 1,100 qubits and 1,400 qubits in 2023 and 2024, respectively. They also plan to follow by 4,000 qubits in 2025 and 100,000 qubits by 2026.
Please don't forget, this is just IBM, I always say. Their competitors like Google, Amazon, Honeywell, D-Wave, etc., etc., are all striving to beat IBM. After all, these are just announcements at commercial level, and the national level is usually 5-10 years ahead. Logically, they are already having what we will get in 2026 at least two years ago.
In 2021, it was publicly known that the FBI managed to crack the Bitcoin wallets of the Colonial Pipeline hackers within two weeks. Of course, they would never tell you how they did it. Earlier this month, only about two weeks ago, a group of Chinese crypto scientists have published a paper claiming the possibility of cracking RSA-2K with just 372 qubits. While this is still waiting to be proven, it is alarming. This kind of advancement can only be accelerated worldwide.
At this point, let's assume, temporarily, that this January 4th paper is a hoax. Let's focus on the general belief. With the exception of those who prefer to bury their heads in the sand, cybersecurity experts in the last few years have generally arrived at the conclusion that 1,000-qubit quantum computers can crack RSA-2K in a reasonable time.
Currently, the brute-force cracking using classical supercomputers requires over 150 years to accomplish the task. The cracking doesn't have to be within a few seconds to pose a security threat because the damage is already there good enough if the cracking can happen within a few days, even a few months. It is just unthinkable what would happen when we have 100,000 qubits in 2026. In other words, if IBM's roadmap is correct, 2023 will be the year when we cross the line of Q-Day.
If this is still not clear enough, please take a look at the announcement from various other government agencies. First of all, NIST, the National Institute of Standards and Technology. They are originally expected to announce their post-quantum cryptography recommendation in 2024.
All of a sudden, six months ago, in July last year, they rushed out a few recommendations and said they will continue to add more in 2024. This is a clear indicator that NIST sees some kind of urgency and needs to make some kind of an announcement to the world so that it will not be standing naked against the quantum threat tsunami. In addition to NIST, the U.S. National Security Memorandum, NSM-10, announced in May 2022, gave a clear deadline of October 18, 2023.
I don't know how they put up that specific date, but it's October 18 of 2023 for federal agencies to assess funding requirements to achieve quantum safety. Last but not least, around the same time, in June of last year, the Bank for International Settlements, the BIS, has announced their intention to assess use cases in quantum safety.
These are just the more outstanding, notable government agency announcements. IronCAP is formed to capitalize on this massive post-quantum cryptography market. The strategy of IronCAP has been reiterated year-over-year. Instead of waiting for NIST's recommendation, we jumped the gun using our deep knowledge in post-quantum cryptography to predict the final winners out of the 82 initial NIST candidates.
This means if we were correct, our global partners such as CGI, Thales, PwC, Hitachi will have something in lockstep with the NIST process without having to wait years for the development of the API around the NIST-approved algorithm from the day of the announcement.
A live example would be our integration project with Thales, Luna HSM. I will elaborate a little bit more later. The project started around March of last year, which was about four months before the NIST announcement of the initial four recommendations. We have already jumped the gun using the algorithm later proved to be approved by NIST in their July announcement. Similarly, the blockchain project completed in September was also using NIST-approved algorithms correctly predicted prior to the July announcement by NIST.
I have a lot of people asking me, "Who is Thales?" Let me give you a little bit more details about them. First of all, they are a French-based conglomerate in the cybersecurity space. The name is called Thales. A lot of my friends say, "Thales," they are called Thales in France. You may not have heard of the name because they are not a household name.
Everything you use in your everyday life depends on their military-grade product for cybersecurity, such as the bank, central bank, government, national defense, satellite communication, etc., etc. They have more than 80,000 staff with over EUR 20 billion in revenue. For a company of this size, they won't even answer our call if we don't have what they need.
This partnership was signed in March of last year, required us to integrate IronCAP technology, the post-quantum cryptography technology, as a functional module within their Luna HSM machine. This way, their clients can easily purchase the IronCAP FM additional option to upgrade their machine and infrastructure to become quantum-safe.
Since Thales Luna HSM has already been approved virtually by all the security-sensitive organizations, this is a shortcut for us to reach the highly secure, sensitive, end-user customers. The development has been completed, and we have just made a press release on Tuesday, two days ago, about the beginning of the co-marketing phase. We already said before that one of the major differentiations we have with our competitors is that not only that we're not a startup, but also that we are a product company by nature.
That means we are not only just providing an engine for our customer, but also we can help our customer in their post-quantum journey. A typical example of that is our proof-of-concept development project for Thales Summit. We have spent about seven months to successfully complete a practical demonstration of a quantum-safe wallet, having our we call QNT, Quantum Native Token, floating on the Solana blockchain.
Our method is so flexible that we can operate as a layer two technology on top of any layer one blockchain. In other words, in a non-technical point of view, the mechanism we have built can be applied to just about any private or public blockchain, such as Bitcoin, Ethereum, etc. This means a shortcut to provide a quantum-safe version of the light Bitcoin, Ethereum, etc., etc.
This puts us in a global leading position to help just about any blockchain, private or public, to become quantum-safe. As a result, as announced before, we ended up in a new patent application related to this technology that has been filed in November. The QNT demo is also publicly available in the following URL: qnt-demo.ironcap.ca.
In addition, with the exception of the unexpected NIST announcement in July, we have also decided to delay a little bit of the IronCAP X business version, the email product, to include the NIST-approved algorithm, which is kind of like a significant marketing value. This will be released in early 2023 as the first business email security product that is not only quantum-safe but also using NIST-approved algorithms.
It is a SaaS model, software as a service, charging $100 per year, per user, with a free personal usage version available at the same time. Besides end-to-end encryption, that means no one in the middle, no man in the middle can intercept and read the message. Its digital signature also ensures the authenticity of the sender. Now, what does it mean?
It means that it can effectively kill phishing emails because you know who are the true sender, who are not, which is this kind of thing can basically cure 91% of the source of ransomware attacks. As a result, I think it doesn't take a rocket scientist to figure out we have made a lot of progress, great progress, in the fourth quarter. Just to summarize a little bit of the achievement, the integration with Thales Luna HSM has been completed.
Therefore, we have entered into a co-marketing phase officially. A press release, again, had been issued on Tuesday, two days ago, about the status. Secondly, the quantum-safe wallet demo, as I just mentioned a little bit earlier, is publicly available at qnt-demo.ironcap.ca. This is a huge success whereby an international patent application has been filed.
Last but not least, we have also decided to include NIST-approved post-quantum cryptography PQC into the business version of IronCAP X. This can massively help the marketing of the product because it's kind of NIST-approved. Looking forward to 2023 and beyond, we expect 2023 is a very interesting year, as we briefly discussed before, that it will cross the critical line of Q-Day. Therefore, more enterprises will begin to adopt to quantum safety. Therefore, we'll engage more proof-of-concept and implementation projects with IronCAP.
As such, we are going to ensure our customers have a NIST-approved algorithm within IronCAP, as well as our related products such as IronCAP X, the I'm InTouch, and the blockchain project. Last but not least, we also expect more quantum-safe projects in the blockchain section, such as cryptocurrency, private blockchain, as well as CBDC, the central bank digital currencies.
All of the above, good development, have somewhat reflected in our Q4 quarterly and full-year results. While Q4 and full-year revenue were up 50% and 16%, respectively, from last year, we have only used CAD 570,000 cash in the last 12 months, despite all the additional R&D achievements. Operating loss remained under CAD 500,000, which is our investment in the post-quantum world. With this trajectory at zero debt moving forward, we are comfortable with our current cash position of about half a million.
As a result, I just cannot be happier, especially 2022 was, indeed, a very tough year globally. We are doing great. Let me give a quick summary before entering into the Q&A session. I'm very happy, again, with our achievement in fiscal 2022. It continues to exceed our plan.
Q-Day has arrived and has gathered serious attention. We expect to continue our technological leadership, which allows us to embrace the Q-Day multibillion-dollar market opportunity. The strategy we made five years ago, I have to say, has been proven correctly and also beginning to bear fruits.
This also dovetails into our expectation of a massive revenue and profitability growth between now and the next few years. Thank you again for all your support all the way from the beginning, just a quantum story several years ago, all the way to this critical inflection point.
At this point, I will like to take a pause and allow more time for question and answer. As earlier mentioned by Brian, if you have questions, please take advantage of the Q&A section, type in the questions. Brian will moderate that on a first-come, first-served basis. Here you go.
Okay, Andrew. Wait for a couple of seconds here. There are a couple of questions that have already come in. I'll get started with those. Andrew, the first one has to do with Thales. What type of joint marketing activities are taking place?
Yeah. That's a pretty good question about Thales, especially they are a huge conglomerate in the cybersecurity space. In fact, we have already done a few with Thales. Those include joint webinar and presentation and things like that.
The last one we did was in December when we jointly presented at ISACA, the educational event, where we're educating and presenting to the audience about the importance of quantum safety. We expect a lot more webinar, co-hosting webinar, seminar, and trade show activities to be happening from this point onward.
Okay. The next one, Andrew, has to do with quantum-safe blockchain. I thought you covered this very well. I think if you could just expand a bit, they want to know, can this apply to central bank digital currencies?
Yes, indeed. The short answer, it is applicable to central bank CBDC, central bank digital currency. The reason is very simple because CBDC is based on blockchain. Blockchain technology was a very good technology. It is very safe. It's unhackable, unbreakable.
The digital signature is based on elliptic curve, which is quantum vulnerable. In other words, the whole blockchain technology that CBDC is based on is only 100% safe in the pre-quantum world but not in the post-quantum world because of the digital signature.
You can imagine that if the transaction being signed can be forged, the whole trust of the blockchain, in other words, the CBDC, will be eliminated. They have to be upgraded to become quantum-safe in order to move forward. In other words, all the CBDC around the world, they must be 100% quantum-safe. Otherwise, it would be meaningless.
Okay, good. The next one, they're kind of combined together. Wants to know more about QNT and our patent that we recently filed in respect of when do you figure it would be received and how far along are you with it?
That is a loaded question. First of all, how long would a patent take to be examined and grant has a wide range. In our experience, the fastest one that we got was about a year and a half, like 18 months. The longest we had experience was like five and a half years. I would expect this one to be now, don't quote me. It's just kind of totally guessing.
It will be on the shorter time frame for this one rather than the longer because of the novelty of the technology. Also, we have spent more money in the filing for the fast track. There are two types of filing introduced by the government, the patent office, lately. There's expediting filing, which we pay more money for that. This would give us the first office action, in general, within six months.
We filed it in November. Basically, the first half of this year, we would expect to see the first office action from the patent office. Yeah, it's basically a long-winded word to say that there's no guarantee on the timeline for a patent process. I would guess it would be on the shorter time frame for this patent. This technology, another part of your question is, what exactly is the technology that we have filed?
Now, in our last meeting, I still cannot say it because we have not filed it yet. We were just preparing. Now, it has been filed. That means it is officially public. The technology we have filed is a method that we can apply quantum safety on top of an existing blockchain by operating a second set of validator to validate the transaction.
The existing blockchains still go on the same way. We don't change it. They're just happening at the same time. Every transaction will be secondly signed by a quantum-safe signature, which is the IronCAP, the quantum-safe signature.
Then moving forward with a second set of validator validating, we call quantum-safe validator to validate the transaction. In other words, this would allow a very easy route of applying quantum safety on any existing blockchain technology.
From a high-level point of view, as trying not to be too technical, we can create, for example, quickly a quantum-safe Bitcoin, for example. You can call it QSBTC. We can create a quantum-safe Bitcoin or a quantum-safe Ethereum in a relatively short time to take advantage of this technology. Yeah, that is exactly how it works.
Anyone reaching the patent office can basically print out our invention in the application paper also.
Okay. Andrew, we got time for this is the last question. It's a general one. It has to do with there's an interesting article about the Canadian government's quantum initiative where they're making investments in quantum computer. The question is, have we looked into it? If so, do you think there is anything here that applies to 01?
Yeah, absolutely. We heard about this program that the Canadian government has committed CAD 360 million to help Canadian quantum technology companies and talent growth. This is a major investment. It is an area that they have been keen on to develop, not just on quantum computing but also quantum safety because they also recognize the potential problem if powerful quantum computing technology falls into the hand of bad actors.
We also probably heard, if you have been in the industry, the Canadian government is also investigating CBDC, central bank digital currency. They also recognize that it is quantum vulnerable. It is an area that is very important to them.
The fact that they recognize the quantum technology and quantum safety and willing to commit $360 million into this sector helping to grow the Canadian quantum-related company is a very encouraging sign for the whole industry, not just, as I said, not just quantum computing but also the shield side, which is us providing technology to guard against quantum threat. We always call it the quantum tsunami. That is coming hard in our way.
Okay. Thank you, Andrew. That about wraps up the questions. Now, I'll turn it back to Andrew. Andrew?
Yes. Thank you. Thank you, Brian. Thank you also for all these intelligent questions. Thank you for joining our 2022 fourth-quarter announcement and business update. We are completely prepared to capitalize on Q-Day, which, again, as I said in the summary that we expect 2023 will be the year that is crossing the line of quantum safety.
If you want to look at the facts, I think the most simple thing to look at is the public roadmap of IBM. That couldn't be more clear written on the wall. Stay tuned. I hope to see you soon in our next meeting. Thank you again. Bye for now. Have a great day.