Executive Summary / Key Takeaways

• Quantum Energy Corporation (FLCX) has undergone a profound strategic pivot, transforming from a customer-business communications entity into a vanguard in distributed direct electrical energy systems, driven by proprietary, patent-pending technologies.
• The company's innovative suite of technologies, including Harvested and Thermal Electrical Energy Collection and Transmission (EET) and Photon Engines, offers tangible benefits such as significant energy savings and reduced construction costs, establishing a strong competitive moat.
• FLCX demonstrated robust revenue growth in 2024, reaching $8.00 million from $6.50 million in 2023, primarily through the sale of Licensed Distributorships, signaling increasing market adoption.
• A substantial pipeline of future work is emerging, with projections for over $150 million in potential installation fees and more than $100 million in recurring revenue contracts for fiscal year 2025, supported by recent multi-million dollar licensing and installation agreements in Mexico, the Philippines, and Western Canada.
• While the company faces a "going concern" risk due to limited cash and an accumulated deficit, its unique funding model, which relies on customer and investor capital for installations, aims to mitigate this challenge and fuel its ambitious growth trajectory.

The Dawn of Distributed Energy: Quantum's Strategic Transformation

Quantum Energy Corporation, operating as flooidCX Corp. (FLCX), stands at the forefront of a significant paradigm shift in global energy. The company has strategically pivoted from its origins in customer-business communications to become a leader in revolutionizing 100% distributed direct electrical energy systems. This transformation, solidified by a change in control in July 2022 and a formal name change in February 2024, underscores a deep commitment to sustainable design, consumer-owned energy, and enhanced energy security. The rapidly increasing worldwide demand for sustainable and efficient energy solutions, coupled with global efforts to reduce carbon emissions, provides a fertile ground for Quantum's innovative approach.

At the core of Quantum's investment thesis lies its suite of exclusively licensed and patent-pending technologies, developed by research engineer Dennis M. Danzik. These technological differentiators are not merely incremental improvements but represent fundamental advancements in energy generation and conservation. The Harvested and Thermal Electrical Energy Collection and Transmission (EET) technology, for instance, boasts the patent-pending ability to transmit harvested electrical energy through standard USB or Ethernet cables, ranging from 80 Watts to several hundred Watts per channel. This low-voltage protocol can eliminate the need for conduit and standardized electrical cable in many installations, dramatically lowering both new and remodeling construction costs. A compelling example is the SAFEwatt ethernet power adapter, which reduces the power consumption of typical laptop adapters from 140-200 Watts (AC) to an average of 60 Watts (DC), representing approximately one-third of the power consumption.

Beyond EET, Quantum's Photon Lighting Systems transform existing and new lighting fixtures into energy-harvesting power generators, functioning across diverse light sources and in both active and ambient light conditions, indoors and outdoors. Its unique Photovoltaic Systems are significantly lighter than conventional solar systems, with some models offering self-cleaning and protective features. The company is also pioneering the application of thermal heat and cold wasted energy for heat-to-light and heat-to-electricity conversion. Perhaps most innovative are the Photon Engines, which convert minimal input power (typically less than 12 volts DC) into stored mechanical energy, then into conditioned and clean electrical energy (typically 48 volts DC). This efficiency is achieved through Danzik's Magnetic Propulsion discoveries, enabling a single low-speed flywheel to multiply the speed of subsequent flywheels to over 5000 rpm using magnetic levitation and zero-contact permanent magnet drives, eliminating traditional mechanical connections.

These technological advantages collectively form Quantum's competitive moat, offering superior energy efficiency, substantial cost reductions, and enhanced sustainability. This positions the company to capitalize on the urgent global shift towards renewable energy sources and the impact of escalating energy costs, driving market adoption and potentially leading to higher margins. The company's mission further extends to the recycling and processing of rare earth materials, including magnets, in facilities in Wyoming and Missouri, securing essential components for its high-grade magnets and assemblies, which are crucial for various industries.

Financial Momentum and Strategic Expansion

Quantum Energy Corporation's financial performance in 2024 reflects a company in an aggressive ramp-up phase, strategically investing in its operational capabilities to meet anticipated demand. Revenue for the year ended December 31, 2024, grew to $8.00 million, a notable increase from $6.50 million in 2023. This 23.08% growth was primarily driven by the sale of ten Licensed Distributorships in 2024, compared to five in the prior year, indicating a growing acceptance and expansion of its distribution network.

However, this growth was accompanied by a significant increase in operating expenses. General and administrative expenses surged by approximately $3.41 million to $3.90 million in 2024, largely attributed to a "ramp up in operations" to prepare for product installations. Similarly, research and development expenses climbed to approximately $2.32 million in 2024 from zero in 2023, reflecting the company's intensified focus on technological advancement and product development. Depreciation expense also emerged at approximately $391,000 in 2024, following the purchase and deployment of about $4.70 million in equipment, furniture, fixtures, vehicles, and computers during the second quarter of 2024. Despite these increased investments, the company reported a net income of $1.78 million in 2024, a substantial improvement from $793,677 in 2023. This was achieved despite an increase in other expenses to $388,000 in 2024, primarily due to a $5.09 million loss on debt settlement incurred in 2023.

A significant strategic asset recognized in 2024 was an $8.50 million cross-license, granting Quantum rights to critical technologies. This license was acquired through the issuance of approximately 22.98 million common shares and 915,000 Preferred B class shares, with a total common share equivalent of approximately 50.44 million shares valued at $0.23 per share. The company recorded this at the lower contract value of $8.50 million, underscoring the strategic importance of intellectual property to its long-term growth.

Competitive Landscape and Strategic Positioning

Quantum Energy Corporation operates in the highly dynamic and competitive sustainable energy market. Its competitive edge is firmly rooted in its proprietary technologies, environmental commitment, and the scalability of its solutions. The company's standout offerings, such as the Photon Lighting Systems and Photon Engines, developed by Dennis M. Danzik and his team, exemplify technological leadership. These systems not only demonstrate energy efficiency but also align with global sustainability goals, setting Quantum apart in the marketplace.

The company prioritizes eco-friendly practices across all operations, from rare earth mining to the development of its recyclable Quantum SAFE Iron-Air battery technology, underscoring its dedication to advancing green energy solutions. Quantum's products are designed for wide-ranging applications, from industrial to residential settings, ensuring adaptability to various consumer needs. This flexibility enhances market reach and consumer empowerment, driving the adoption of renewable energy. By forging strategic alliances and engaging in collaborative innovation, Quantum strengthens its market position and accelerates technology adoption. The company is proactive in addressing competitive challenges such as pricing pressures and technological evolution, guiding its path forward in the sustainable energy sector.

While direct quantitative comparisons with all competitors in the nascent distributed energy sector are challenging to ascertain, Quantum's focus on proprietary, cost-reducing, and energy-efficient technologies provides a distinct advantage. Its unique licensing model, where distributors handle sales and service under 240-month contracts with no upfront cost to the purchaser, allows Quantum to concentrate on manufacturing and timely supply, differentiating its go-to-market strategy.

Outlook, Guidance, and Risk Considerations

Quantum's forward-looking statements paint a picture of significant expansion. The company projects a substantial increase in potential installation fees during its 2025 fiscal year, exceeding $150 million, with potential recurring revenue contracts projected to surpass $100 million. This ambitious growth would necessitate funding of approximately $35 million in 2025 for manufacturing and product placement. The company's capital demands are carefully managed by limiting installations to fully funded customer projects, ensuring that no capital is expended on design, engineering, permitting, or manufacturing until financing is secured. This system is designed to prevent an unmanageable demand on cash resources.

Recent developments underscore this growth trajectory. From the first quarter of 2024, an exclusive Licensed Distributorship was sold to Arc Energy of the Philippines for $3 million, coupled with a $20 million minimum manufacturing commitment. On October 6, 2025, Quantum closed a significant $23 million deal for exclusive licensing rights in Mexico to Constructora Electrica Latinoamerica, S.A de C.V., with $13 million in cash due by December 31, 2025, and an additional $10 million for manufacturing within 220 days. Further, a Standstill Agreement for $6.50 million for exclusive licensing rights in Western Canada was executed in May 2025, with payment due in the last quarter of 2025.

The company has also initiated large-scale installations, including a contract for Karmali Holdings in Houston, Texas, valued between $17.50 million and $23.20 million, with an estimated $14 million in recurring revenue over a twenty-year term. Additional large-scale projects are underway at Hilton Home2Suites (HLT) and Embassy Suites in Texas. As of October 2024, Letters of Intent and Energy Surveys have been completed for over 5.00 million square feet of commercial and industrial facilities, representing approximately $170 million in potential installation fees.

Despite this promising outlook, investors must consider the company's current liquidity position. As of December 31, 2024, Quantum had cash and cash equivalents of $0 and an accumulated deficit of approximately $54.40 million. These factors raise substantial doubt regarding the company's ability to continue as a going concern. Management, however, asserts that its current ability to obtain customer and investor capital for system installations is adequate to meet demand, and anticipates available cash will increase during the 2025 fiscal year, contingent on this external funding. The company has limited plans to offer equity or take on additional debt for customer installations.

Operational risks also include identified material weaknesses in internal controls over financial reporting as of December 31, 2024, stemming from a lack of proper segregation of duties, absence of a formal multi-level review process, and insufficient written policies. Management is actively addressing these by utilizing third-party specialists, increasing independent reconciliations, and planning to appoint independent directors and an audit committee by the September 30, 2025, Form 10Q filing.

Conclusion

Quantum Energy Corporation is undergoing a transformative period, repositioning itself as a key innovator in the burgeoning distributed direct electrical energy market. Its proprietary technologies offer compelling advantages in efficiency and cost reduction, addressing critical global demands for sustainable power. The company's strategic shift is gaining traction, evidenced by significant revenue growth in 2024 and a robust pipeline of multi-million dollar licensing and installation contracts extending into 2025.

While the "going concern" risk and internal control challenges warrant careful monitoring, Quantum's unique funding model, which aligns capital deployment with secured customer and investor financing, provides a strategic pathway to manage liquidity. The substantial projected installation fees and recurring revenue streams, coupled with an aggressive international expansion strategy, underscore the potential for significant long-term value creation. For discerning investors, Quantum Energy Corporation represents a compelling, albeit high-risk, opportunity to participate in the revolution of consumer-owned, sustainable energy systems, driven by a clear technological edge and a rapidly expanding market presence.