Mr. Ted Carefoot reports

QSE ENTERS SOUTH AMERICA: SIGNS 3-YEAR SECURITY DEAL WITH BRAZILIAN GOVERNMENT FOR 4,500 USER LICENSES

Quantum Secure Encryption Corp. has entered into a three-year agreement supporting three Brazilian government end clients for the deployment of QSE's secure enterprise access platform.

This agreement marks a meaningful step forward in QSE's international expansion strategy, establishing an initial commercial footprint in South America while creating a scalable foundation for broader adoption of QSE's postquantum security services over time.

Investor highlights:

• New region expansion: establishes QSE's initial commercial presence in South America, beginning with Brazil;
• Public-sector validation: engagement spans three Brazilian government end clients;
• Three-year term: multiyear structure supports long-duration rollout and expansion;
• Initial scale plus growth trajectory: approximately 4,500 seats in year one, with expectations for significant growth over the contract term;
• Platform upside: creates a bridge for adoption of additional postquantum security solutions across the QSE portfolio.

Contract scope and initial economics

The initial phase of the agreement includes approximately 4,500 user seats/licences in year one, representing an initial contract value of approximately $150,000 (U.S.) for the three-year term, with clear potential for expansion over the full term.

QSE expects the deployment footprint to expand over the three-year term as additional users, departments and use cases are on-boarded across the participating government organizations.

This agreement reflects growing demand from public-sector organizations for modern, scalable identity infrastructure that is encryption-ready today and positioned for postquantum security requirements as they emerge.

Initial deployment focus: enterprise single sign-on

The current contract scope is focused on QSE's single sign-on services, delivering centralized secure authentication across government systems and user environments.

By standardizing secure access at the identity layer, QSE is establishing a scalable foundation that can be broadened into deeper cryptographic and quantum-resilient capabilities over time.

Expansion path: seats and services over a three-year rollout

While the agreement begins with 4,500 seats in year one, the structure provides a clear pathway for the deployment to expand significantly over the full three-year term, subject to continued rollout, adoption and client requirements.

This structure supports QSE's land-and-expand commercialization model, where growth is driven by:

• Seat expansion as adoption widens across participating organizations; and
• Service expansion as additional platform modules are introduced.

Bridging opportunity for QSE's postquantum platform services

In parallel with the SSO rollout, QSE and the government end clients are engaged in discussions regarding potential expansion into additional QSE platform services, including:

• Quantum preparedness assessments;
• qREK on-demand entropy key services;
• QSE.API integrations to enable secure enterprise workflows and broader platform adoption.

These services represent incremental, modular opportunities to expand contract value over time as requirements evolve and quantum-readiness initiatives accelerate.

Management commentary

"Entering Brazil with three government clients under a three-year agreement is a strong step forward in our international growth strategy and a clear validation of QSE's secure access platform in the public sector," said Ted Carefoot, chief executive officer of QSE.

"Starting with an initial 4,500-seat deployment gives us an immediate foundation, and we see a clear trajectory to expand well beyond that -- both through seat growth and through the adoption of additional QSE services, including quantum preparedness, entropy delivery and our broader postquantum security capabilities."

About Quantum Secure Encryption Corp.

Quantum Secure is a Canadian technology company specializing in postquantum data security, encryption and secure data infrastructure. Built around quantum-delivered entropy and zero-knowledge architecture, QSE's solutions help protect sensitive data from current cyber threats and future quantum-enabled attacks. QSE serves organizations across commercial, enterprise and public-sector environments requiring long-term data confidentiality and resilience.

We seek Safe Harbor.