What happened
Horizon Quantum Holdings Ltd. (NASDAQ: HQ) reported third-quarter net income of $33.4 million, but a non-cash warrant gain produced the profit. The quarter ended Sept. 30. A year earlier the company lost money, so the swing is $38.6 million. Per ordinary share, the company earned $0.61 against a loss of $0.13 in the third quarter of 2025.
The company's Nov. 10 release says the result included a $43.1 million gain from remeasuring warrant-related derivative liabilities. A lower share price during the quarter cut the fair value of those liabilities. The gain is larger than the profit and did not touch cash.
Horizon Quantum also said it completed pulse-level integration of its Triple Alpha development environment with the 32-qubit Toshiko processor of Oxford Quantum Circuits (OQC). It signed a non-binding letter of intent to buy Entropica Labs Pte. Ltd., a Singapore-based quantum software company focused on error correction and fault tolerance. The anticipated price is $27 million of Horizon Quantum Class A ordinary shares. The deal still needs due diligence, related audits, definitive agreements and other customary conditions.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Net income (Q3 2026) | $33.4 million | from -$5.2 million, +$38.6 million | SEC 6-K, Exhibit 99.1 |
| Net income per ordinary share (basic) | $0.61 | from -$0.13 | SEC 6-K, Exhibit 99.1 |
| Non-cash gain on derivative liabilities (Q3 2026) | $43.1 million | SEC 6-K, Exhibit 99.1 | |
| Operating loss (Q3 2026) | $10.5 million | from $4.9 million, +$5.6 million | SEC 6-K, Exhibit 99.1 |
| Adjusted EBITDA loss (Q3 2026) | $6.3 million | from $3.0 million | SEC 6-K, Exhibit 99.1 |
| Cash and cash equivalents (Sept. 30, change versus June 30, 2026) | $102.8 million | -$10.5 million | SEC 6-K, Exhibit 99.1 |
Read more: Horizon Quantum (HQ) company research
Operating costs are climbing
Beneath the gain, the business spent more and booked no revenue in either third quarter. Operating loss was $10.5 million, up $5.6 million from $4.9 million in the third quarter of 2025. The release blames mainly the costs of becoming a public company and more research and development staff.
Research and development spending rose 122% to $4.5 million from $2.0 million. General and administrative costs rose 127% to $5.2 million from $2.3 million. Adjusted EBITDA, which strips out the derivative gain and share-based pay, was a loss of $6.3 million against $3.0 million a year earlier.
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Cash and the balance sheet
Cash and cash equivalents ended September at $102.8 million, down from $113.3 million at the end of June. Over nine months, operations used $16.4 million and equipment purchases took $11.0 million. Financing brought in $130.1 million. That included $98.2 million from the merger and PIPE transaction, net of costs, and $28.7 million from warrant exercises.
That financing changed the balance sheet. Stockholders' equity was $84.1 million at Sept. 30, against a deficit of $4.7 million at Dec. 31, 2025. Total liabilities were $34.7 million, of which $32.4 million were warrant derivative liabilities.
Fair-value swings cut both ways. Changes in the value of derivative liabilities cost $62.2 million over the nine months, and the net loss for the period was $85.4 million.
Why it matters
OptimistFi has argued that Horizon Quantum's equity value depends on new financing or a restructuring because the company was balance-sheet insolvent. The filing shows the merger financing has put equity back in positive territory. That weakens the insolvency premise.
The caveat is that the business is not yet paying its own way. The profit comes from an accounting gain, the operating loss is widening and cash fell in the quarter. The release adds that the remaining warrants are remeasured each quarter, so share-price moves could bring further non-cash gains or losses.
What's next
Entropica stays a letter of intent until Horizon Quantum completes due diligence and audits and signs definitive agreements. Signing would make the proposed share payment a binding deal.
The next quarterly report will show whether cash keeps falling from the September level and how warrant remeasurement moves reported earnings again.
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Sources
- Horizon Quantum Announces Third Quarter 2026 Financial Results (Exhibit 99.1) — Press release dated Nov. 10, 2026, with unaudited financial statements and non-GAAP reconciliation.
- Form 6-K, Report of Foreign Private Issuer — Cover filing for the month of November 2026, signed Nov. 10, 2026.
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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
