01 Quantum Inc. (ONE) Earnings Call Transcript & Summary

Thank you for your question. This is in fact a very good question and also being very sensitive because we are not allowed to talk beyond a certain line when the partnership is not public yet. But we have been engaged -- since a year ago, we have been engaged into many discussion with various different businesses around the world. And those we have signed up and announced our public information, and we still have many that are in discussion at this point as we speak. We expect to have some other global massive consulting on board very, very shortly. And yes, I would say that I will recommend the shareholders to pay attention to our upcoming press release that will be coming up very shortly. And we are very much into those kind of discussions. So yes, you have a very, very good question. Let me -- okay, now -- yes, I have now another phone number ending 7613. [Operator Instructions]

Andrew, it's -- my name is [ John Howard ], I'm an investor. I've been reading a lot in the cyber news these days about phishing and the impact of phishing with COVID and so on. I'm just wondering if your product addresses this issue and how large the potential market is compared with phishing expeditions.

Well, thank you very much, [ John ], for your question. This is just another great question. Phishing is a huge issue because like 90% of all those ransomware or any kind of cyber attacks are starting from a simple phishing. And a phishing e-mail is like the cheapest way to get into corporations, like just sending you an e-mail looks like sending from someone, but it's really not from someone. And now you click on to it and then yes, they're in. So IronCAP X is specifically designed, one of the feature is to get rid of phishing, which is really shutting the main, like 90% of the engines for the ransomware. And this is because IronCAP X has a quantum state, not just encryption, but the digital signature. So that physically, when you receive an e-mail that looks like it's coming from andrew.cheung@01com.com, but you don't know whether this email is really coming from me or not, right? But with the digital signature only the andrew.cheung@01com.com will have that signature. So you see 2 e-mails coming in. One has the digital signature. The other one, although look exactly the same legitimacy, it doesn't have the digital signature. You can just ignore it. And that one is a phishing e-mail. So IronCAP X is specifically having a feature to shut that out. So yes, the market is extremely huge because there are 730 million business -- active business e-mail accounts. So the market size for e-mail encryption, by itself, is a $7.3 billion market that we're tapping into. So that alone, all other VPN, blockchain, credit card, financial transaction, blah, blah, blah, blah technology. And this e-mail encryption alone is a humongous market that we're tapping into. So yes, thank you for your question. This is a very good one.

Andrew, is a follow-up question allowed?

Yes, absolutely.

Yes. You mentioned blockchain. I'm also reading a lot about the potential for hacking of blockchain and also of Bitcoin, and people have been able to hack and steal Bitcoin. Is this something that is on your radar screen in terms of post-quantum encryption?

Yes, absolutely. I have to broadly say that here when Q-Day arrive, Bitcoin would be just like toasted. I think that is because any blockchain that is not quantum safe, any cryptocurrency that's not quantum safe will be toasted. Simply because -- it's not because of blockchain, like blockchain is still safe, but the endpoint is not safe, okay? And this is specifically the reason why Hitachi and the global consulting company in Montréal sign up with us because they want to secure their blockchain technologies also. And the endpoint is not safe, like the endpoint is making a digital signature to sign a block of data that they are creating, okay? And today, the endpoint is assumed to be safe because the digital signature technology they rely are being safe in the classic world. But then with quantum computers, they can render these digital signatures totally unreliable within seconds. So that means like the note that are signing the data block is no longer trustworthy. It can be just a fake transaction. So you can imagine that blockchain or Bitcoin, you can double spending, triple spending, you would just be -- just toasted completely. And they have to be quantum safe in order to move forward. Otherwise, the whole thing will be just completely useless. And yes, so IronCAP is definitely created with one of the many features to protect the blockchain/cryptocurrency market. [Operator Instructions] I have another question coming from phone number ending 2270. [Operator Instructions]

Just a question around the I'm InTouch. In Japan, the DoMobile is doing well. Are you selling the I'm InTouch in any other countries?

This is a very good question. A short answer to that is, yes, we are definitely selling I'm InTouch in other countries. And this is pointing to that the marketing outside Japan has been kind of stolen by Citrix and LogMeIn who we sued them in the last 12 years with our patented technology, but the jury said -- the American juries said they don't infringe. So we -- the market has been stolen by them in -- outside Japan. But the interesting thing here is that the remote access market was taking off like 15 years ago in North America. And it never took off in Japan, okay? So it's kind of like a shipping -- like a sleeping giant over there. And then if anyone who has been working with Japanese enterprise would know their working culture is different. They work in the office, day and night, and they don't need to work at home. So that remote access, remote working culture never ticked off in Japan. So suddenly now, COVID hits and they are forced to work at home. And then certainly, they say, it's not all bad. So 15 -- so what happened 15 years ago in North America is certainly now happening in Japan. So it has been delayed for 15 years. So that particular market is huge there, right? In North America here, there are 5 million users of remote access, okay? And in Japan, it's about half that market. So there is a potential 2.5 million users that are up for grab. And we are almost like by ourselves with Hitachi in Japan. So I have a lot of excitement about that fact that remote access is ticking off now after 15 years in Japan. And we are kind of like the -- not the only people, but the only one with a huge household name enterprise marketing for us over there. So it's really, really huge opportunity there for us, like 2.5 million user means $250 million a year of revenue and we have a third of the royalty rate belong to us. So it's a huge market that is opening for us.

Okay. But can you sell like in Germany or Europe or the U.S.?

Absolutely. There is no geographic limitation with that product. Okay. [Operator Instructions] I have another question from the phone number ending 6500. [Operator Instructions]

Yes. It's [ Brian McCleary ]. How are you doing?

Very good. Thank you.

When you've been mentioning the word toast, I'm using for my cellphone, that's why I was unable to get in earlier. And then you will use the toasted. When I think of that, I think that things just have to go right in the garbage. Can you tell me if that's what you mean by toast? Or is there some other meaning to toast in the high-tech world seriously?

Yes. I'm sorry, yes, this is like -- you kind of like the slang in the high-tech world. Basically, it just means that it is totally render like useless because the whole blockchain technology is based on the fact that nothing can be tended. It can be -- it is all self-regulated, self-monitored. So no one can create forged and fake transaction, okay? And -- but then this is all based on little technical, it's all based on digital signature. So that when someone is creating a transaction, say, I am buying someone or I am issuing a digital currency business transaction. You're creating a transaction, you have -- you digitally sign that transaction as a legitimate, right? But then with your digital signature, you imagine that you have your key or something that is -- it can be forged by someone. Anyone can enter your door. So anyone can create -- can forge a transaction, then the whole side -- the cryptocurrency is no longer trusted. Anyone can issue any kind of currency. So it is all render useless.

Is this the kind of thing that when you -- in the next month or so, that would be an international news headline? Is it this big? If you're -- always blockchain stuff and everything else is everywhere, is this the kind of stuff that would get people's attention? Or was it just sort of behind the scenes kind of a thing?

Well, wow, it won't be behind the scene. If someone managed to use quantum computers, they hack into the digital signature of a cryptocurrency note or cryptocurrency mine or something like that, it would be definitely on the news because that person can create any kind of transaction. Issue themselves like 10,000 Bitcoin right away. And it is going to be a pandemic within the cyber, it's going to be cyber pandemic.

So would you go to, for example, The Globe and Mail with this information to get things started? Or you just wait for someone to discover it and say, "Gee, look at what's happening."

Well, I couldn't do that. I'm not a hacker, but if a hacker wants to do that, they can simply...

No, I don't mean hack The Globe and Mail, I mean give them a telephone call, and tell them what you've got, that you could change the whole blockchain business, et cetera. And I think they'd be very happy with that.

I'm not 100% sure of your question. I mean, this is known already. When the Montréal company comes to us, when the Hitachi come to us asking about how we can help them in the blockchain technology, they already know about. They already know about what we can do.

So it might -- we're liable to appear in the Montréal duvet, first of all, then something like that?

Yes, yes, no, secret. Yes. [Operator Instructions] Okay, if I don't see any more question, I think I can -- I will take a pause and adjourn this teleconference, and I am really looking forward to the next conference call. And I keep saying that there was one person asking about what to expect for the partnerships to come. So yes, we expect something coming really shortly. So please pay attention and stay tuned for our announcement. So thank you very much for joining the telephone conference call. We're looking forward to the next one. Thank you very much.