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Quantum eMotion Corp V.QNC

Alternate Symbol(s):  QNCCF

Quantum eMotion Corp. is a Canada-based developer of cryptographic solutions. The Company is developing quantum random number generators (QRNG). It offers QRNG2, an USB key that delivers pure entropy at 1.8 Gb/s. Its QRNG2 technology is the quantum random number generator, which is used in consumer electronics. QNG2 provides security to mobile and Internet transactions, Internet of Things (IoT) communication, machine-to- machine connections, networking equipment and cloud-based applications. The Company offers Entropy-as-a-Service (EaaS) concept where a service provider delivers on-demand entropy through a cloud network. Its random number generator (QRNG2) utilizes quantum electron tunneling to produce truly random and unpredictable numbers. By integrating QRNG2 into the QxEaaS platform, it offers a range of on-demand entropy and IT security services for authorized devices. The platform distributes cryptographically secured keys and strings.


TSXV:QNC - Post by User

Post by lscfaon Jan 07, 2025 2:25pm
150 Views
Post# 36392809

CEO rebuttal to seeking alpha basher

CEO rebuttal to seeking alpha basherThis is my structured rebuttal to the sensationalist and unsubstantiated article recently published in Seeking Alpha by Mandela Amoussou on January 5, 2025.

Valuation Argument Lacks Depth
The article boldly declares QeM to be overvalued but conveniently sidesteps providing an "acceptable value." In valuation, referencing industry comparables, discounted cash flow analysis, or even a sum-of-parts analysis is essential to justify claims. Instead, the author leans heavily on the price-to-book (P/B) ratio, which is laughably inadequate for valuing a pre-revenue tech company focused on intangible assets like patents and intellectual property.

Misguided Use of Accounting Data
Using short-term accounting data, such as cash burn and book value, to evaluate the long-term potential of an R&D-focused tech company is a gross misrepresentation of its growth trajectory. For companies like QeM, whose valuation hinges on near- and long-term future potential, methods like discounted cash flow (DCF) using expected product revenues are far more appropriate.

Controversial TerraNova Partnership
The reliance on comments from TerraNova, which were retracted shortly after release, further undermines the credibility of the claims. Highlighting unsubstantiated accusations adds more sensationalism than substance to the analysis.

Superficial Mention of Patents
While the article acknowledges QeM’s patents, it fails spectacularly to evaluate their value, market potential, or the company's efforts in innovation.

Inadequate Consideration of the Sector
The author overlooks the broader context of the quantum technology sector, where speculative investments are driven by high growth expectations in the face of future cybersecurity threats.

Recommendations for Seeking Alpha
Publishing speculative articles without sufficient substantiation damages credibility. A proper valuation and critique of QeM should include detailed financial modeling, insights into quantum technology trends, and acknowledgment of the challenges inherent in evaluating pre-revenue deep-tech companies. A better understanding of basic financial valuation would greatly benefit the author in future analyses.
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