11 unchanged sentences
Based on our evaluation, we have concluded that our internal control over financial reporting was effective as of December 31, 2023.
−Removed: Remediation of Previously Identified Material Weakness
−Removed: As previously disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2021, management concluded that there was a material weakness in our internal control over financial reporting
−Removed: specifically related to our financial statement close process.
−Removed: In response to the material weakness identified, management developed and implemented a remediation plan to address the underlying causes of the material weakness, which was subject to senior management review and oversight of the audit committee of the Board (the “Audit Committee”).
−Removed: The remediation plan included:
−Removed: hiring additional full-time accounting personnel with appropriate levels of experience, and augmenting skills gaps with external experts;
−Removed: establishing and implementing policies surrounding the approval of transactions, related to, but not limited to, account reconciliations and journal entries;
−Removed: implementing a financial accounting system that supports effective information technology general controls, as well as the anticipated growth of the business.
−Removed: Implementation of the remediation plan described above and the resulting improvements in controls have strengthened our internal control over financial reporting and have addressed the related material weakness that was identified as of December 31, 2021.
−Removed: As part of our assessment of internal control over financial reporting, management tested and evaluated all internal controls to assess whether they were designed and operating effectively as of December 31, 2022.
−Removed: Management determined that its internal controls over financial reporting were designed and operating effectively to prevent and detect a material misstatement due to error or fraud and therefore concluded that the material weakness was remediated.
−Removed: Attestation Report of the Registered Public Accounting Firm
−Removed: This Annual Report does not include an attestation report of our registered public accounting firm due to an exemption for “emerging growth companies.”
+Added: Attestation Report of the Independent Registered Public Accounting Firm
+Added: The report of our independent registered public accounting firm regarding internal control over financial reporting is set forth beginning on page F-1 of this Annual Report.
Changes in Internal Control over Financial Reporting
−Removed: Except as described above under “Remediation of Previously Identified Material Weakness,” there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Other Information.
+Added: Rule 10b5-1 Trading Plans
+Added: During the three months ended December 31, 2023 , none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted , terminated or modified the amount, pricing or timing provisions of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(c) of Regulation S-K.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
2 unchanged sentences
Directors, Executive Officers and Corporate Governance.
−Removed: Information About Our Directors
−Removed: Information regarding directors required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding Director Nominees and Current Directors,” and is hereby incorporated by reference.
−Removed: Information About Our Executive Officers
−Removed: The following table sets forth information regarding our executive officers who are not listed above as members of our Board as of March 15, 2023:
−Removed: Peter Chapman
−Removed: President & Chief Executive Officer and Director
−Removed: Chief Technology Officer and Director
−Removed: Christopher Monroe
−Removed: Chief Scientist
−Removed: Thomas Kramer
−Removed: Chief Financial Officer
−Removed: Rima Alameddine
−Removed: Chief Revenue Officer
−Removed: Laurie Babinski
−Removed: General Counsel and Secretary
−Removed: Peter Chapman has served as a member of our Board and president and chief executive officer since the closing of the Business Combination in September 2021.
−Removed: Chapman previously served as Legacy IonQ’s president and chief executive officer and a member of its board of directors since May 2019.
−Removed: From September 2014 to May 2019, Mr.
−Removed: Chapman served as a director of engineering for Amazon Prime at Amazon.com, Inc.
−Removed: prior to joining IonQ.
−Removed: Before that, Mr.
−Removed: Chapman was the president at Media Arc, Inc.
−Removed: We believe Mr.
−Removed: Chapman is well qualified to serve as a member of our Board because of his prior leadership and officer positions at technology and software companies.
−Removed: Jungsang Kim has served as a member of our Board and chief strategy officer since the closing of the Business Combination in September 2021.
−Removed: Kim is the co-founder of Legacy IonQ and served as its chief technology officer and a member of its board of directors since September 2015.
−Removed: Kim assumed the role of chief technology officer in May 2020.
−Removed: Kim has served as assistant/associate/full professor in the Department of Electrical and Computer Engineering, Department of Physics and Department of Computer Science at Duke University since June 2004.
−Removed: From August 2006 to February 2020, Dr.
−Removed: Kim was also the founder and president and chief executive officer of Applied Quantum Technologies, Inc.
−Removed: Kim received a B.S.
−Removed: in physics from Seoul National University and a Ph.D.
−Removed: in physics from Stanford University.
−Removed: We believe Dr.
−Removed: Kim is well qualified to serve as a member of our Board because of his extensive research in electrical and computer engineering and quantum mechanics.
−Removed: Christopher Monroe has served as our chief scientist since the closing of the Business Combination in September 2021.
−Removed: Monroe is the co-founder of Legacy IonQ and served as its chief scientist since September 2016.
−Removed: From August 2018 until May 2019, Dr.
−Removed: Monroe served as IonQ’s chief executive officer.
−Removed: Monroe has served as a Professor of Electrical Computer Engineering and Physics at Duke University since January 2021.
−Removed: Monroe held various positions at the University of Maryland, including from January 2021 to present as a College Park Professor, from 2015 to December 2020 as a Distinguished University Professor of Physics, from
−Removed: September 2018 to December 2020 as a Professor of Electrical and Computer Engineering, and from September 2007 to December 2020 as a Bice Zorn Professor of Physics.
−Removed: From 2014 to December 2020, Dr.
−Removed: Monroe was a Fellow at the Center for Quantum Information and Computer Science and from 2007 to December 2020, Dr.
−Removed: Monroe was a Fellow at the Joint Quantum Institute.
−Removed: Monroe also held various academic and research positions at the University of Michigan, Ann Arbor, University of Colorado, Boulder, and the National Institute of Standards and Technology.
−Removed: Monroe serves on advisory boards at several academic institutions, including the Max Planck Institute of Quantum Optics and the Center for Quantum Technology, National University of Singapore.
−Removed: Monroe received an S.B.
−Removed: in physics from Massachusetts Institute of Technology and a Ph.D.
−Removed: in physics from the University of Colorado, Boulder.
−Removed: Thomas Kramer has served as our chief financial officer since the closing of the Business Combination in September 2021, and as our secretary from September 2021 to March 2022.
−Removed: Kramer served as Legacy IonQ’s chief financial officer since February 2021.
−Removed: From February 2017 to February 2021, Mr.
−Removed: Kramer served as managing director of Remarque Advisory.
−Removed: From November 2011 to October 2016, Mr.
−Removed: Kramer also served as chief financial officer of Opower, Inc., a cloud-based enterprise software company in the utilities space.
−Removed: From 2000 to 2011, Mr.
−Removed: Kramer served as chief financial officer of Cvent, Inc., a cloud-based enterprise software company in the event-management space.
−Removed: From 1998 to 2000, Mr.
−Removed: Kramer served as a consultant at the Boston Consulting Group.
−Removed: Kramer holds an M.B.A.
−Removed: from Harvard Business School and an M.S.
−Removed: in economics from the Norwegian School of Economics.
−Removed: Rima Alameddine has served as our chief revenue officer since December 2022.
−Removed: Previously, Ms.
−Removed: Alameddine served as the Vice President, Enterprise Sales, Healthcare, Life Science and Manufacturing, Americas, of NVIDIA Corporation, a publicly listed company, from November 2018 to December 2022.
−Removed: From July 2016 to October 2018, Ms.
−Removed: Alameddine served as the Vice President, Enterprise Sales, East and Central United States, of NVIDIA.
−Removed: Prior to this, between September 1998 and July 2016, Ms.
−Removed: Alameddine served in various roles at Cisco Systems, Inc., a publicly listed company, including Director, Enterprise Sales, New York from August 2012 to 2016 and Director, Enterprise Sales, Financial Services, from November 2010 to July 2012.
−Removed: Alameddine holds an M.S.
−Removed: in computer engineering and a B.S.
−Removed: in computer and communications engineering from Syracuse University and the American University of Beirut, respectively.
−Removed: Laurie Babinski has served as our general counsel and secretary since March 2022.
−Removed: From December 2019 to March 2022, Ms.
−Removed: Babinski served as deputy general counsel at Credit Karma, LLC, a multinational personal finance company, where she also served in various roles from August 2015 to December 2019, including as the lead of numerous legal functions such as product, marketing, regulatory, privacy, litigation, employment and government relations in the United States, Canada and the United Kingdom.
−Removed: Prior to that, Ms.
−Removed: Babinski worked at the law firm Baker Hostetler LLP practicing in the Media, Technology and Intellectual Property group.
−Removed: Babinski received a J.D.
−Removed: from Northwestern University Pritzker School of Law and holds a B.A.
−Removed: in Journalism and Spanish from Pepperdine University.
−Removed: Identification of Audit Committee and Financial Experts
−Removed: Information regarding our Audit Committee required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding the Board of Directors and Corporate Governance,” and is hereby incorporated by reference.
−Removed: Material Changes to Procedures for Recommending Directors
−Removed: Information regarding procedures for recommending directors required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding the Board of Directors and Corporate Governance,” and is hereby incorporated by reference.
−Removed: Code of Business Conduct and Ethics
−Removed: Information regarding our Code of Business Conduct and Ethics ( the “Code of Conduct”), required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding the Board of Directors and Corporate Governance—Code of Conduct and Ethics,” and is hereby incorporated by reference.
−Removed: The full text of our Code of Conduct is available at the investors section of our website at www.ionq.com.
−Removed: The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this Annual Report.
−Removed: Delinquent Section 16(a) Reports
−Removed: Information regarding compliance with Section 16(a) of the Exchange Act required by this item will be contained in our 2023 Proxy Statement under the caption “Delinquent Section 16(a) Reports,” if any, and is hereby incorporated by reference.
+Added: The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Executive Compensation.
−Removed: Information regarding our executive compensation required by this item will be contained in our 2023 Proxy Statement under the captions “Executive Compensation,” “Director Compensation” and “Information Regarding the Board of Directors and Corporate Governance—Information Regarding Committees of the Board of Directors—Compensation Committee—Compensation Committee Interlocks and Insider Participation,” and is hereby incorporated by reference.
+Added: The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
−Removed: Ownership of Securities
−Removed: Information regarding ownership of our securities required by this item will be contained in our 2023 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management,” and is hereby incorporated by reference.
−Removed: Equity Compensation Plan Information
−Removed: Information regarding our equity compensation plans required by this item will be contained in our 2023 Proxy Statement under the caption “Equity Compensation Plan Information,” and is hereby incorporated by reference.
+Added: The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Certain Relationships and Related Transactions, and Director Independence.
−Removed: Information regarding related transactions and director independence required by this item will be contained in our 2023 Proxy Statement under the captions “Transactions with Related Persons” and “Information Regarding the Board of Directors and Corporate Governance—Independence of Our Board of Directors,” and is hereby incorporated by reference.
+Added: The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Principal Accountant Fees and Services.
−Removed: Information regarding accounting fees and services required by this item will be contained in our 2023 Proxy Statement in Proposal 2 under the captions “Principal Accountant Fees and Services” and “Pre-Approval Policies and Procedures” and is hereby incorporated by reference.
−Removed: Exhibit and Financial Statement Schedules.
−Removed: The financial statements schedules and exhibits filed as part of this Annual Report are as follows:
−Removed: (a)(1) Financial Statements
+Added: The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
+Added: Exhibit and Consolidated Financial Statements Schedules.
+Added: The consolidated financial statements schedules and exhibits filed as part of this Annual Report are as follows:
+Added: (a)(1) Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 42)
5 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: (a)(2) Financial Statement Schedules
−Removed: All other financial statement schedules are omitted because they are not required or the required information is included in the financial statements or notes thereto.
+Added: (a)(2) Consolidated Financial Statements Schedules
+Added: All other consolidated financial statements schedules are omitted because they are not required or the required information is included in the consolidated financial statements or notes thereto.
(a)(3) Exhibits
7 unchanged sentences
001-39694), filed with the SEC on October 4, 2021).
−Removed: Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No.
−Removed: 001-39694), filed with the SEC on October 4, 2021).
+Added: Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q (File No.
+Added: 001-39694), filed with the SEC on November 9, 2023).
Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-4/A (File No.
33 unchanged sentences
001-39694), filed with the SEC on October 4, 2021).
−Removed: Forms of Option Grant Notice and Option Agreement under 2021 Equity Incentive Plan.
+Added: Forms of Option Grant Notice and Option Agreement under 2021 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K (File No.
+Added: 001-39694), filed with the SEC on March 30, 2023).
Form of Restricted Stock Unit Grant Notice and Unit Award Agreement under 2021 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No.
52 unchanged sentences
6 to Exclusive License Agreement, dated January 23, 2023, between Duke University and IonQ, Inc.
+Added: (incorporated herein by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K (File No.
+Added: 001-39694), filed with the SEC on March 30, 2023).
+Added: Amendment No.
+Added: 7 to Exclusive License Agreement, dated February 2, 2024, between Duke University and IonQ, Inc.
Exclusive Option Agreement, dated July 15, 2016, between Duke University and IonQ, Inc.
9 unchanged sentences
001-39694), filed with the SEC on March 28, 2022).
−Removed: List of Subsidiaries of Company (incorporated herein by reference to Exhibit 21.1 to the Company’s Current Report on Form 8-K (File No.
−Removed: 001-39694), filed with the Commission on October 4, 2021).
+Added: Separation Agreement between IonQ, Inc.
+Added: and Laurie Babinski dated September 8, 2023 and executed September 11, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No.
+Added: 001-39694), filed with the SEC on November 9, 2023)
+Added: List of Subsidiaries of the Company
Consent of Ernst & Young LLP, an Independent Registered Public Accounting Firm.
4 unchanged sentences
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+Added: Incentive Compensation Recoupment Policy
Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document.
−Removed: Inline XBRL Taxonomy Extension Schema Document
−Removed: Inline XBRL Taxonomy Extension Calculation Linkbase Document
−Removed: Inline XBRL Taxonomy Extension Definition Linkbase Document
−Removed: Inline XBRL Taxonomy Extension Label Linkbase Document
−Removed: Inline XBRL Taxonomy Extension Presentation Linkbase Document
+Added: Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Document
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101).
3 unchanged sentences
The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
−Removed: Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(1)(5).
+Added: Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5).
The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
1 unchanged sentence
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
−Removed: March 30, 2023
+Added: February 28, 2024
/s/ Peter Chapman
6 unchanged sentences
/s/ Peter Chapman
−Removed: Peter Chapman
President and Chief Executive Officer and Director
+Added: February 28, 2024
+Added: Peter Chapman
(Principal Executive Officer)
−Removed: March 30, 2023
/s/ Thomas Kramer
−Removed: Thomas Kramer
Chief Financial Officer
+Added: February 28, 2024
+Added: Thomas Kramer
(Principal Financial and Accounting Officer)
−Removed: March 30, 2023
/s/ Craig Barratt
−Removed: Craig Barratt
Chair of the Board of Directors
−Removed: March 30, 2023
−Removed: /s/ Ronald Bernal
−Removed: Ronald Bernal
−Removed: March 30, 2023
+Added: February 28, 2024
+Added: Craig Barratt
+Added: /s/ Robert Cardillo
+Added: February 28, 2024
+Added: Robert Cardillo
/s/ Kathryn Chou
−Removed: March 30, 2023
+Added: February 28, 2024
/s/ Niccolo de Masi
+Added: February 28, 2024
Niccolo de Masi
−Removed: March 30, 2023
/s/ Jungsang Kim
−Removed: Co-Founder, Chief Technology Officer
−Removed: March 30, 2023
−Removed: March 30, 2023
+Added: February 28, 2024
+Added: /s/ William Scannell
+Added: February 28, 2024
+Added: William Scannell
+Added: February 28, 2024
/s/ Wendy Thomas
−Removed: March 30, 2023
+Added: February 28, 2024
/s/ Harry You
−Removed: March 30, 2023
+Added: February 28, 2024
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
13 unchanged sentences
generally accepted accounting principles.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
1 unchanged sentence
Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
1 unchanged sentence
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
−Removed: Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
2 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Capitalized internal-use software development costs
+Added: Description of the Matter
+Added: As discussed in Note 2 and Note 7 to the consolidated financial statements, the Company capitalizes certain costs related to internal-use software incurred during the application development stage.
+Added: The Company capitalized $8.0 million of internal-use software costs in the year ended December 31, 2023 and had total capitalized internal-use software costs, net of accumulated amortization, of $9.1 million as of December 31, 2023.
+Added: Capitalized internal-use software is recorded within intangible assets, net on the consolidated balance sheets.
+Added: Auditing the Company’s capitalization of internal-use software development costs was especially challenging because management’s determination of which development activities qualify for capitalization requires significant judgment, as only those costs incurred in certain stages of software development and which result in additional functionality can be capitalized in accordance with the applicable accounting standards.
+Added: How We Addressed the Matter in Our Audit
+Added: To test the Company’s capitalization of internal-use software development costs, we performed audit procedures that included, among others, testing a sample of capitalized internal-use software development costs related to upgrades and enhancements to existing internal-use software projects.
+Added: For each sample, we inspected underlying documentation to evaluate whether the development activities were capitalizable under
+Added: the applicable accounting standards.
+Added: In addition, we inquired of a sample of the individuals performing the internal-use software development activities regarding the specific nature, stage of development, and time incurred on the projects selected for testing.
/s/ Ernst & Young LLP
1 unchanged sentence
Tysons, Virginia
−Removed: March 30, 2023
+Added: February 28, 2024
+Added: Report of Independent Registered Public Accounting Firm
+Added: To the Stockholders and the Board of Directors of IonQ, Inc.
+Added: Opinion on Internal Control Over Financing Reporting
+Added: We have audited IonQ, Inc.
+Added: and subsidiaries’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
+Added: In our opinion, IonQ, Inc.
+Added: and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the years then ended, and the related notes and our report dated February 28, 2024 expressed an unqualified opinion thereon.
+Added: Basis for Opinion
+Added: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Annual Report on Internal Control over Financial Reporting.
+Added: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
+Added: Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
+Added: We believe that our audit provides a reasonable basis for our opinion.
+Added: Definition and Limitations of Internal Control Over Financial Reporting
+Added: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
+Added: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
+Added: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
+Added: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: /s/ Ernst & Young LLP
+Added: We have served as the Company’s auditor since 2020.
+Added: Tysons, Virginia
+Added: February 28, 2024
Consolidated Balance Sheets
(in thousands, except share and per share data)
+Added: As of December 31,
Current assets:
6 unchanged sentences
Property and equipment, net
−Removed: Operating lease right-of-use
+Added: Operating lease right-of-use assets
Intangible assets, net
18 unchanged sentences
1,000,000,000 shares authorized;
−Removed: 199,862,123 and 195,630,975 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively
−Removed: Additional paid-in
+Added: and 199,862,123 shares issued and outstanding as of December 31, 2023 and
+Added: December 31, 2022, respectively
+Added: Additional paid-in capital
Accumulated deficit
13 unchanged sentences
Loss from operations
−Removed: Change in fair value of warrant liabilities
+Added: Gain (loss) on change in fair value of warrant liabilities
Interest income, net
−Removed: Offering costs associated with warrants
Other income (expense), net
−Removed: Loss before benefit for income taxes
−Removed: Benefit for income taxes
−Removed: Net loss per share attributable to common stockholders—basic and diluted
−Removed: Weighted average shares used in computing net loss per share attributable to common
−Removed: stockholders—basic and diluted
+Added: Loss before income tax expense
+Added: Income tax benefit (expense)
+Added: Net loss per share attributable to common stockholders—
+Added: basic and diluted
+Added: Weighted average shares used in computing net loss per share
+Added: attributable to common stockholders—basic and diluted
The accompanying notes are an integral part of these consolidated financial statements.
1 unchanged sentence
(in thousands)
−Removed: Other comprehensive loss, net of reclassification adjustments:
−Removed: Change in unrealized loss on available-for-sale
−Removed: securities, net
−Removed: Total other comprehensive loss
+Added: Other comprehensive income (loss), net of reclassification adjustments:
+Added: Change in unrealized gain (loss) on available-for-sale securities, net
+Added: Currency translation adjustments
+Added: Total other comprehensive income (loss)
Total comprehensive loss
4 unchanged sentences
Comprehensive
+Added: Stockholders'
Balance, December 31, 2021
−Removed: Other comprehensive loss
−Removed: Equity instruments issued in consideration for intellectual property and research and development arrangements
+Added: Other comprehensive income (loss)
Stock options exercised
Vesting of restricted common stock
−Removed: Merger and PIPE transaction, net of transaction costs
+Added: Issuance of common stock from the
+Added: settlement of restricted stock units
Stock-based compensation
1 unchanged sentence
Balance, December 31, 2022
−Removed: Other comprehensive loss
+Added: Other comprehensive income (loss)
Stock options exercised
Vesting of restricted common stock
−Removed: Issuance of common stock from the settlement of restricted stock units
+Added: Issuance of common stock from the
+Added: settlement of restricted stock units
Stock-based compensation
7 unchanged sentences
Depreciation and amortization
−Removed: research and development arrangements
−Removed: Amortization of customer warrant
−Removed: Offering costs associated with warrants
+Added: Non-cash research and development arrangements
Stock-based compensation
−Removed: Change in fair value of warrant liabilities
+Added: (Gain) loss on change in fair value of warrant liabilities
+Added: Amortization of premiums and accretion of discounts on available-for-sale securities
Changes in operating assets and liabilities:
5 unchanged sentences
Other assets and liabilities
−Removed: Net cash used in operating activities
+Added: Net cash provided by (used in) operating activities
Cash flows from investing activities:
2 unchanged sentences
Intangible asset acquisition costs
−Removed: Purchases of available-for-sale
−Removed: Maturities and sales of available-for-sale
+Added: Purchases of available-for-sale securities
+Added: Maturities and sales of available-for-sale securities
Business acquired
−Removed: Net cash used in investing activities
+Added: Net cash provided by (used in) investing activities
Cash flows from financing activities:
Proceeds from stock options exercised
−Removed: Tax withholding receipts related to vested and released restricted stock units
−Removed: Tax withholding payments related to vested and released restricted stock units
−Removed: Proceeds from public warrants exercised
−Removed: Repurchase of early exercised stock options
−Removed: Proceeds from merger and PIPE transactions, net of transaction costs
−Removed: Net cash provided by financing activities
−Removed: Net change in cash ,
−Removed: cash equivalents and restricted cash
+Added: Other financing, net
+Added: Net cash provided by (used in) financing activities
+Added: Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
+Added: Net change in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at the beginning of the period
1 unchanged sentence
Supplemental disclosures of non-cash investing and financing transactions
−Removed: Issuance of common stock for intellectual property
−Removed: Issuance of common stock for research and development arrangement
Property and equipment purchases in accounts payable and accrued expenses
Intangible asset purchases in accounts payable and accrued expenses
+Added: Operating lease right-of-use assets subject to lease liability
+Added: Remeasurement of operating lease right-of-use assets due to lease modification
Noncash reclassification of warrant liabilities to equity upon exercise
Bonus settled in restricted stock units
+Added: Net share settled stock option exercises
The accompanying notes are an integral part of these consolidated financial statements.
8 unchanged sentences
Pursuant to the Merger Agreement, on September 30, 2021 (“the Closing Date”), the Merger Sub was merged with and into Legacy IonQ with Legacy IonQ continuing as the surviving corporation following the merger, becoming a wholly owned subsidiary of dMY and the separate corporate existence of the Merger Sub ceased (the “Business Combination”).
−Removed: Commensurate with the Business Combination, dMY changed its name to IonQ, Inc.
+Added: Contemporaneously with the Business Combination, dMY changed its name to IonQ, Inc.
and Legacy IonQ changed its name to IonQ Quantum, Inc.
−Removed: Unless otherwise indicated, references in this Annual Report on Form 10-K
−Removed: to the “Company” and “IonQ” refer to the consolidated operations of IonQ, Inc.
−Removed: and IonQ Quantum, Inc subsequent to the Business Combination.
+Added: Unless otherwise indicated, references in this Annual Report on Form 10-K to the “Company” and “IonQ” refer to the consolidated operations of IonQ, Inc.
+Added: subsequent to the Business Combination.
References to “dMY” refer to the company prior to the consummation of the Business Combination and references to “Legacy IonQ” refer to IonQ, Inc.
13 unchanged sentences
In accordance with guidance applicable to these circumstances, the equity structure has been retroactively restated in all comparative periods to reflect the number of shares of the Company’s common stock, $ 0.0001 par value per share, issued to Legacy IonQ’s stockholders in connection with the Business Combination.
−Removed: As such, the shares and corresponding capital amounts and earnings per share related to Legacy IonQ convertible redeemable preferred stock and warrants and Legacy IonQ common stock prior to the Business Combination have been
−Removed: retroactively restated as shares reflecting the exchange ratio established in the Business Combination.
+Added: As such, the shares and corresponding capital amounts and earnings per share related to Legacy IonQ convertible redeemable preferred stock and warrants and Legacy IonQ common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination.
Legacy IonQ’s convertible redeemable preferred stock and warrants previously classified as mezzanine equity were retroactively adjusted, converted into common stock, and reclassified to permanent equity because of the reverse recapitalization.
All exercise prices for stock options and customer warrants have similarly been retroactively restated to reflect the exchange ratio established in the Business Combination.
−Removed: At the Closing Date, the consummation of the Merger provided approximately $ 636.0 million of gross proceeds, including $ 345.0 million from the PIPE investment in common stock at $ 10.00 per share.
−Removed: In connection with the Business Combination, Legacy IonQ and dMY incurred direct and incremental costs of approximately $ 52.0 million related to the equity issuance, consisting primarily of banking, legal, accounting, and other professional fees, which were recorded to additional paid-in
−Removed: capital as a reduction of proceeds.
−Removed: Additionally, approximately $ 4.3 million in offering costs were allocated to liability-classified warrants assumed in the Merger and expensed upon the close of the Business Combination.
−Removed: Concurrently with the execution of the Merger Agreement, certain former dMY stockholders entered into a sponsor support agreement.
−Removed: Under the sponsor support agreement, and effective upon the consummation of the Business Combination, 10 % of the dMY Class B common stock (or 750,000 shares), which were converted into shares of common stock at the consummation of the Business Combination, were unvested and subject to certain vesting and forfeiture provisions (the “Vesting Shares”).
−Removed: The Vesting Shares are accounted for as equity classified instruments and were included as merger consideration as part of the reverse recapitalization and recorded in additional paid-in
−Removed: As of December 31, 2021, all of the Vesting Shares had vested and were released from any restrictions.
Segment Reporting
4 unchanged sentences
GAAP as determined by the Financial Accounting Standards Board (“FASB”).
−Removed: Such consolidated financial statements include the accounts
−Removed: of IonQ and its wholly owned subsidiaries.
+Added: Such consolidated financial statements include the accounts of IonQ and its wholly owned subsidiaries.
All intercompany transactions and balances have been eliminated in consolidation .
−Removed: Emerging Growth Company
−Removed: The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups
−Removed: Act of 2012 (the “JOBS Act”).
−Removed: Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.
−Removed: The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
−Removed: As a result, the Company’s consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
−Removed: The Company remains an emerging growth company until the earliest of (i) December 31, 2025, (ii) the last day of the fiscal year in which the Company has total annual gross revenue of at least $ 1.235 billion, (iii) the last day of the fiscal year in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates
−Removed: exceeds $ 700.0 million as of the prior June 30th or (iv) the date on which the Company has issued more than $ 1.0 billion in no
−Removed: n-convertible
−Removed: debt securities during the prior three-year period.
+Added: Emerging Growth Company and Smaller Reporting Company Status
+Added: Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.
+Added: As a result of the market value of the Company's common stock held by non-affiliates as of June 30, 2023, exceeding $ 700.0 million, the Company became a large accelerated filer under the Exchange Act as of December 31, 2023, and no longer qualifies as an emerging growth company.
+Added: Therefore, the Company is required to comply with new or revised accounting standards as of the effective dates applicable to public companies that are not emerging growth companies.
+Added: The Company was also a smaller reporting company as defined in the Exchange Act until June 30, 2023.
+Added: However, the Company may continue to use the scaled disclosures permitted for a smaller reporting company through this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and must begin providing non-scaled larger company disclosure in its first quarterly report in its next fiscal year (i.e., the quarterly report for the three-month period ended March 31, 2024).
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S.
−Removed: GAAP and regulations of the SEC requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes.
−Removed: Significant estimates and judgments are inherent in the analysis and measurement of items including, but not limited to:
−Removed: revenue recognition, capitalization of internally developed software and quantum computing costs, useful lives of long-lived assets, and fair value of available-for-sale
+Added: GAAP and the rules and regulations of the SEC require management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes.
+Added: Significant estimates and assumptions are inherent in the analysis and measurement of items including, but not limited to:
+Added: standalone selling price for revenue arrangements with multiple performance obligations, total expected costs for revenue arrangements recognized over time, capitalization of quantum computing system costs, useful lives for quantum computing systems, and stock-based compensation for awards with performance and market conditions.
Management bases its estimates and assumptions on historical experience, expectations, forecasts, and on various other factors that are believed to be reasonable under the circumstances.
Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ and be affected by changes in those estimates.
+Added: Foreign Currency
+Added: The reporting currency of the Company is the U.S.
+Added: Financial statements of subsidiaries whose functional currency is not the U.S.
+Added: dollar are translated at exchange rates in effect at the balance sheet date for assets and liabilities and at average exchange rates for revenues and expenses for the respective periods.
+Added: Translation adjustments are recorded in accumulated other comprehensive loss in the consolidated balance sheets.
+Added: The Company is exposed to foreign currency risk to the extent that it enters into transactions denominated in currencies other than its subsidiaries’ respective functional currencies.
+Added: Transactions denominated in currencies other than subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise.
+Added: Changes in exchange rates with respect to amounts recorded in the Company’s consolidated balance sheets related to these items will result in unrealized foreign currency transaction gains and losses based upon period-end exchange rates.
+Added: The Company also records realized foreign currency transaction gains and losses upon settlement of the transactions.
+Added: Foreign currency transaction gains and losses resulting from the conversion of the transaction currency to functional currency are included in other income (expense), net in the consolidated statements of operations.
Fair Value Measurements
8 unchanged sentences
Assets and liabilities that are measured using significant other observable inputs are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability.
−Removed: Assets and liabilities that are measured at fair value on a non-recurring
−Removed: basis include property and equipment, intangible assets, and goodwill.
−Removed: The Company recognizes these items at fair value when they are considered to be
−Removed: impaired or upon initial recognition when acquired through a business combination or an asset acquisition.
+Added: Assets and liabilities that are measured at fair value on a non-recurring basis include property and equipment, intangible assets, and goodwill.
+Added: The Company recognizes these items at fair value when they are considered to be impaired or upon initial recognition when acquired through a business combination or an asset acquisition.
The fair value of these assets and liabilities are determined with valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow models.
−Removed: Due to their short-term nature, the carrying amounts reported in the Company’s consolidated financial statements approximates the fair value for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses.
+Added: Due to their short-term nature, the carrying amounts reported in the Company’s consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses.
Cash, Cash Equivalents and Restricted Cash
−Removed: Cash and cash equivalents include cash in banks, checking deposits, money market funds, and certain commercial paper and U.S.
−Removed: government and agency securities.
+Added: Cash and cash equivalents include cash in banks, checking deposits, and money market funds.
The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents.
−Removed: Restricted cash collateralizing letters of credit is included in other noncurrent assets in the consolidated balance sheets
−Removed: The Company issues letters of credits in the ordinary course of business, including for lease arrangements.
−Removed: As of December 31, 2022, letters of credit totaling $ 2.0 million were outstanding.
−Removed: The following table provides a reconciliation of cash and restricted cash included in the consolidated balance sheets to the amounts included in the statements of cash flows (in thousands):
+Added: Restricted cash for collateralizing letters of credit and corporate credit cards is included in other noncurrent assets in the consolidated balance sheets.
+Added: The Company issues letters of credit in the ordinary course of business, including for lease arrangements.
+Added: As of December 31, 2023 and 2022, letters of credit totaling $ 2.1 million and $ 2.0 million were outstanding, respectively.
+Added: The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the consolidated balance sheets to the amounts included in the consolidated statements of cash flows (in thousands):
Cash and cash equivalents
Restricted cash
−Removed: Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows
−Removed: Accounts Receivable and Allowance for Doubtful Accounts
−Removed: Accounts receivable are non-interest
−Removed: bearing and represent amounts billed and currently due from customers at the gross invoiced amount as well as unbilled amounts related to unconditional rights for consideration to be received for services performed but not yet invoiced.
+Added: Total cash, cash equivalents and restricted cash in the
+Added: consolidated statements of cash flows
+Added: Accounts Receivable and Allowance for Credit Losses
+Added: Accounts receivable are non-interest bearing and represent amounts billed and currently due from customers at the gross invoiced amount as well as unbilled amounts related to unconditional rights for consideration to be received for services performed
+Added: but not yet invoiced.
A receivable is recorded when the Company has an unconditional right to receive payment.
−Removed: Accounts receivable consists of the following at December 31, 2022 and 2021 (in thousands):
+Added: Accounts receivable consists of the following (in thousands):
Billed accounts receivable
1 unchanged sentence
Total accounts receivable
−Removed: On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off.
−Removed: This assessment is based on management’s evaluation of the past due receivables, collectability of specific accounts, historical loss experience and overall economic conditions.
−Removed: The Company did no t have any allowance for doubtful accounts as of December 31, 2022 and 2021.
−Removed: Materials and Supplies
+Added: On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance for credit losses.
+Added: This assessment is based on management’s evaluation of relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the receivable.
+Added: The Company did no t have any allowance for credit losses as of either December 31, 2023 or 2022 .
+Added: Materials and Supplies, Net
Materials and supplies are carried at average cost and recorded in prepaid expenses and other current assets in the consolidated balance sheets.
Materials and supplies used in the production of quantum computing systems to be made commercially available are capitalized to property and equipment when installed.
−Removed: Materials and supplies used for maintenance or research and development efforts are expensed when consumed.
−Removed: The Company capitalized $ 1.3 million of materials and supplies to property and equipment for the year ended December 31, 2022.
+Added: Materials and supplies used for maintenance, research and development efforts or to service customer contracts are expensed when consumed.
+Added: The Company capitalized $ 3.6 million and $ 1.3 million of materials and supplies to property and equipment for the years ended December 31, 2023 and 2022, respectively.
+Added: Materials and supplies are evaluated regularly for excess quantities and obsolescence.
+Added: This evaluation includes analysis of the Company's current and future strategic plans, risk of technological obsolescence, and general market conditions.
+Added: During the years ended December 31, 2023 and 2022, excess and obsolescence charges were less than $ 0.1 million and zero , respectively.
Management determines the appropriate classification of investments at the time of purchase based upon management’s intent with regard to such investments.
−Removed: The Company primarily invests in debt securities and classifies its investments as available-for-sale
−Removed: at the time of purchase if they are available to support either current or future operations.
−Removed: This classification is re-evaluated
−Removed: at each balance sheet date.
+Added: The Company primarily invests in debt securities and classifies its investments as available-for-sale at the time of purchase if they are available to support either current or future operations.
+Added: This classification is re-evaluated at each balance sheet date.
Investments not considered cash equivalents, with remaining contractual maturities of one year or less from the balance sheet date are classified as short-term investments, and those with remaining contractual maturities greater than one year from the balance sheet date are classified as long-term investments.
−Removed: All investments are recorded at their estimated fair value, and any unrealized gains and losses are recorded in accumulated other comprehensive loss.
+Added: All investments are recorded at their estimated fair value, and any unrealized gains and losses are recorded in the consolidated balance sheets in accumulated other comprehensive loss.
Realized gains and losses on sales and maturities of investments are determined based on the specific identification method and are recognized in the consolidated statements of operations in other income (expense), net.
−Removed: The Company performs periodic evaluations to determine whether any declines in the fair value of investments below cost are other-than-temporary.
−Removed: The evaluation consists of qualitative and quantitative factors regarding the severity and duration of the unrealized loss, as well as the Company’s ability and intent to hold the investments until a forecasted recovery occurs.
−Removed: The impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the underlying securities will be sold prior to a full recovery of their cost basis.
−Removed: Other-than-temporary fair value impairments are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.
+Added: Accrued interest receivable on available-for-sale investments is recorded in the consolidated balance sheets in prepaid expenses and other current assets.
+Added: As of December 31, 2023 and 2022, accrued interest receivable was $ 2.1 million and $ 1.7 million, respectively.
+Added: The Company performs periodic evaluations to determine whether any declines in the fair value of investments below amortized cost are credit losses or impairments.
+Added: The evaluation consists of qualitative and quantitative factors regarding the severity of the unrealized loss, as well as the Company’s ability and intent to hold the investments until a forecasted recovery occurs.
+Added: Declines in fair value are considered to be credit losses if they are related to deterioration in credit risk or are considered impairments if it is likely that the underlying securities will be sold prior to a full recovery of their cost basis.
+Added: Credit losses and impairments are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.
Property and Equipment, Net
1 unchanged sentence
Historical cost of fixed assets is the cost as of the date acquired.
−Removed: Hardware and labor costs associated with the building of quantum computing systems are capitalized.
+Added: Hardware and labor costs associated with the building of quantum computing systems are capitalized in the period the costs are incurred when it is probable that the system will provide future economic benefit.
+Added: The costs of quantum computing systems that are used in research and development activities and have alternative future uses are capitalized.
Costs to maintain quantum computing systems are expensed as incurred.
6 unchanged sentences
Shorter of the lease term or the estimated useful life of the related asset
+Added: The Company evaluates the useful life of its assets periodically and whenever events or changes in circumstances indicate that the useful life may have changed.
+Added: In assessing useful lives, the Company considers, among other factors, the use of the asset, changes in technology, and the competitive environment.
Effective October 1, 2022, the Company revised the accounting useful life of quantum computing systems, which was determined to be a change in accounting estimate and is being applied prospectively.
−Removed: This change in accounting estimate is not material for the year ended December 31, 2022.
+Added: This change in accounting estimate was not material for the years ended December 31, 2023 and 2022 .
The estimated useful life for quantum computing systems was previously 2 years .
The Company determines if an arrangement is a lease at inception.
−Removed: Operating leases are included in operating lease right-of-use
−Removed: (“ROU”) assets and current operating lease liabilities and operating lease liabilities, net of current portion on the Company’s consolidated balance sheets.
+Added: Operating leases are included in operating lease right-of-use (“ROU”) assets and current operating lease liabilities and operating lease liabilities, net of current portion on the Company’s consolidated balance sheets.
As of December 31, 2023, the Company has no financing lease arrangements.
2 unchanged sentences
The Company’s lease portfolio is comprised primarily of real estate leases, which are accounted for as operating leases.
−Removed: The Company elected the practical expedient to not separate lease and non-lease
−Removed: components for all leases.
−Removed: ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term.
−Removed: Operating lease ROU assets also include the impact of any lease incentives.
−Removed: Amendments to a lease are assessed to determine if it represents a lease modification or a separate contract.
+Added: The Company elected the practical expedient to not separate lease and non-lease components for all leases.
+Added: ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future minimum lease payments, including the impact of any lease incentives, as applicable, over the lease term.
+Added: An amendment to a lease is assessed to determine if it represents a lease modification or a separate contract.
Lease modifications are reassessed as of the effective date of the modification using an incremental borrowing rate based on the information available at the commencement date.
4 unchanged sentences
The Company considers contractual-based factors such as the nature and terms of the renewal or termination, asset-based factors such as physical location of the asset and entity-based factors such as the importance of the leased asset to the Company’s operations to determine the lease term.
−Removed: The Company generally uses the base non-cancelable
−Removed: lease term when determining the ROU
−Removed: assets and lease liabilities.
+Added: The Company generally uses the base non-cancelable lease term when determining the ROU assets and lease liabilities.
Intangible Assets, Net
4 unchanged sentences
Capitalized Internally Developed Software
−Removed: Capitalized internally developed software, which is included in intangible assets, net, consists of costs to purchase and develop internal-use
−Removed: software, which the Company primarily uses to provide services to its customers.
−Removed: The costs to purchase and develop internal-use
−Removed: software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended, until the time the software is placed in service for its intended use.
+Added: Capitalized internally developed software consists of costs to purchase and develop internal-use software, which the Company primarily uses to provide services to its customers.
+Added: The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended, until the time the software is placed in service for its intended use.
Any costs incurred during subsequent efforts to upgrade and enhance the functionality of the software are also capitalized.
−Removed: Once this software is ready for its intended use, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is typically assessed to be 3 years.
−Removed: During the years ended December 31, 2022 and 2021, the Company capitalized $ 3.2 million and $ 1.7 million in internal-use
−Removed: software costs, respectively.
+Added: Once this software is ready for its intended use, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is typically assessed to be three years .
+Added: Capitalized internal-use software is recorded within intangible assets, net, in the consolidated balance sheets.
+Added: During the years ended
+Added: December 31, 2023 and 2022, the Company capitalized $ 8.0 million and $ 3.2 million in internal-use software costs, respectively.
The Company amortized $ 2.9 million and $ 1.5 million of capitalized internally developed software costs during the years ended December 31, 2023 and 2022 , respectively.
−Removed: Goodwill is the excess of the purchase price ove
−Removed: r the fai r values assigned to the net assets acquired in a business combination.
−Removed: The Company tests goodwill for impairment on an annual basis, which it has determined to be the first day of the fiscal fourth quarter, and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
+Added: Goodwill is the excess of the purchase price over the fair values assigned to the net assets acquired in a business combination.
+Added: The Company tests goodwill for impairment on an annual basis, which it has determined to be the first day of the fourth quarter, and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
The Company tests goodwill qualitatively, or quantitatively by comparing the fair value of the reporting unit with the unit’s carrying amount.
−Removed: No impairment loss was recognized for the year ended December 31,
+Added: No impairment loss was recognized for the years ended December 31, 2023 and 2022 .
Impairment of Long-Lived Assets
−Removed: Long-lived assets, such as property and equipment and other long-term assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
+Added: Long-lived assets, such as property and equipment and other long-term assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount.
If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent the carrying amount of the underlying asset exceeds its fair value.
−Removed: No impairment loss was recognized for the years ended December 31, 2022 or 2021.
+Added: No impairment loss was recognized for the years ended December 31, 2023 and 2022 .
Early Exercise of Stock Options
1 unchanged sentence
Early exercises of options are not deemed to be substantive exercises for accounting purposes and accordingly, amounts received for early exercises are recorded as a liability.
−Removed: These amounts are reclassified to common stock and additional paid-in
−Removed: capital as the underlying shares vest.
+Added: These amounts are reclassified to common stock and additional paid-in capital as the underlying shares vest.
Warrant Liabilities
−Removed: The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued
−Removed: upon exercise or at each reporting date for the unexercised warrants, with changes in the fair value reported in the consolidated statements of operations.
+Added: The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued upon exercise or at each reporting date for the unexercised warrants, with changes in the fair value reported in the consolidated statements of operations.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
−Removed: warrants of dMY assumed in the Business Combination are classified as liabilities and remeasured at each reporting period (as more fully described in Note 13).
−Removed: The determination of the fair value of the warrant liabilities may be subject to change as more current information becomes available and accordingly the actual results could differ significantly.
−Removed: Derivative warrant liabilities are classified as non-current liabilities as
−Removed: their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
+Added: The warrants of dMY assumed in the Business Combination are classified as liabilities and remeasured at each reporting period (as more fully described in Note 13).
+Added: Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Revenue Recognition
−Removed: The Company derives revenue from providing access to its QCaaS, consulting services related to co-developing
−Removed: algorithms on the quantum computing systems, and from contracts associated with the design, development, and construction of specialized quantum computing systems together with related services.
+Added: The Company derives revenue from the design, development, and construction of specialized quantum computing hardware together with related services, from providing access to its quantum-computing-as-a-service (“QCaaS”), and from consulting services related to co-developing algorithms on the quantum computing systems.
The Company applies the provisions of the FASB Accounting Standards Update (“ASU”), Revenue from Contracts with Customers (“ASC 606”), and all related applicable guidance.
6 unchanged sentences
Recognize revenue when (or as) the entity satisfies a performance obligation
−Removed: The Company has determined that its QCaaS contracts represent a combined, stand-ready performance obligation to provide access to its quantum computing systems together with related maintenance and support.
−Removed: transaction price may consist of a variable fee based on usage of its quantum computing systems or a fixed fee for a minimum volume of usage to be made available over a defined period of access.
−Removed: Fixed fee arrangements may also include a variable component whereby customers pay an amount for usage over contractual minimums contained in the contracts.
−Removed: The Company has determined that contracts that contain consulting services related to
−Removed: co-developing
−Removed: quantum computing algorithms and the ability to use its quantum computing systems to run such algorithms represent a combined performance obligation that is satisfied over-time with revenue recognized based on the efforts incurred to date relative to the total expected effort.
−Removed: For contracts with a fixed transaction price, the fixed fee is recognized on a straight-line basis over the access period or associated measure of progress for the Company’s consulting services contracts.
−Removed: For contracts without fixed fees, variable usage fees are billed and recognized during the period of such usage.
−Removed: Certain of the Company’s contracts contain multiple performance obligations, most commonly in contracts for specialized quantum computing systems together with related maintenance and support.
+Added: Certain of the Company’s contracts contain multiple performance obligations, most commonly in contracts for the sale of specialized quantum computing hardware together with related maintenance and support.
Such contracts may also include access to the Company’s QCaaS.
1 unchanged sentence
When there are multiple performance obligations in a contract, the Company allocates the transaction price to each performance obligation based on its standalone selling price when available.
−Removed: We determine standalone selling price based on the observable price of a product or service when we sell the products or services separately in similar circumstances and to similar customers.
−Removed: When the standalone selling price is not known, due to it being either highly variable or uncertain, the Company allocates the transaction price using the residual approach.
−Removed: Performance obligations are satisfied over time if the customer receives the benefits as we perform the work, if the customer controls the asset as it is being produced (continuous transfer of control), or if the product being produced for the customer has no alternative use and we have a contractual right to payment for performance to date.
−Removed: Revenue is recognized on performance obligations satisfied over time based on the efforts incurred to date relative to the total expected effort.
−Removed: As of December 31, 2022 and 2021, substantially all of the revenue recognized by the Company was recognized based on transfer of service over time.
+Added: The Company determines standalone selling price based on the observable price of a product or service when it sells the products or services separately in similar circumstances and to similar customers.
+Added: Certain products and services have limited or no history of being sold on a standalone basis, requiring the Company to estimate the standalone selling price.
+Added: To date, the Company has estimated the standalone selling price based on other contracts for similar products and services adjusted for differing terms than the contract being evaluated, as well as internal pricing guidelines and market factors.
+Added: In addition, the Company takes into consideration the estimated costs to be incurred to satisfy the performance obligation plus an appropriate profit margin.
+Added: In limited situations, for certain contracts executed in prior years, when the standalone selling price was not known, due to it being either highly variable or uncertain, the Company allocated the transaction price using the residual approach.
+Added: The Company has determined that its QCaaS contracts represent a combined, stand-ready performance obligation to provide access to its quantum computing systems together with related maintenance and support.
+Added: The transaction price generally consists of a fixed fee for a minimum volume of usage to be made available over a defined period of access.
+Added: Fixed fee arrangements may also include a variable component whereby customers pay an amount for usage over contractual minimums contained in the contracts.
+Added: The Company has determined that contracts that contain consulting services related to co-developing quantum computing algorithms and the ability to use its quantum computing systems to run such algorithms represent a combined performance obligation that is satisfied over-time.
+Added: Performance obligations are satisfied over time if the customer receives the benefits as the Company performs the work, if the customer controls the asset as it is being produced (continuous transfer of control), or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment for performance to date.
+Added: For performance obligations related to specialized quantum computing hardware and consulting services, revenue is recognized over time based on the efforts incurred to date relative to the total expected effort, primarily based on a cost-to-cost input measure.
+Added: The Company applies judgment to determine a reasonable method to measure progress and to estimate total expected effort.
+Added: Factors considered in these estimates include the Company's historical performance, the availability, productivity and cost of labor, the nature and complexity of work to be performed, the effect of change orders, availability and cost of materials, and the effect of any delays in performance.
+Added: For performance obligations related to providing QCaaS access, fixed fees are recognized on a straight-line basis over the access period.
+Added: Variable usage fees in excess of fixed minimums are recognized during the period of such usage.
+Added: For the years ended December 31, 2023 and 2022, substantially all revenue was recognized based on transfer of service over time.
Revenues recognized at a point in time were not material.
In arrangements with cloud service providers, the cloud service provider is considered the customer and IonQ does not have any contractual relationships with the cloud service providers’ end users.
−Removed: For these arrangements, revenue is recognized at the amount charged to the cloud service prov i
−Removed: der and does not reflect any mark-up
−Removed: to the end user.
+Added: For these arrangements, revenue is recognized at the amount charged to the cloud service provider and does not reflect any mark-up to the end user.
The Company may enter into multiple contracts with a single counterparty at or near the same time.
5 unchanged sentences
For arrangements that contain consideration payable to a customer, the Company uses judgment in determining whether such payments are a reduction of the transaction price or a payment to the customer for a distinct good or service.
−Removed: In 2019, the Company has entered into one revenue arrangement in which it granted warrants to the counterparty.
−Removed: Refer to Note 12 for further information on the customer warrants.
The variable fees associated with the QCaaS are generally billed a month in arrears.
1 unchanged sentence
If a contract exists under ASC 606, advance payments are recorded as a contract liability until services are delivered or obligations are met and revenue is earned.
−Removed: Contract liabilities to be recognized in the succeeding 12-month
−Removed: period are classified as current and the remaining amounts are classified as non-current
−Removed: liabilities in the Company’s consolidated balance sheets.
−Removed: As of December 31, 2022, approximately $ 30.5
−Removed: million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for non-cancelable
−Removed: contracts, including both funded (firm orders for which funding has been both authorized and appropriated by the customer) and unfunded (firm orders for which funding has not been appropriated) orders.
−Removed: The Company expects approximately 60 %
−Removed: of the remaining performance obligations to be recognized as revenue within the next twelve months .
+Added: Contract liabilities to be recognized in the succeeding 12-month period are classified as current and the remaining amounts are classified as non-current liabilities in the Company’s consolidated balance sheets.
+Added: As of December 31, 2023, approximately $ 69.1 million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied), including both funded (firm orders for which funding has been both authorized and appropriated by the customer) and unfunded (firm orders for which funding has not been appropriated) orders.
+Added: Unexercised contract options are not included in remaining performance obligations until the time the option is exercised.
+Added: The Company expects approximately 40 % of the remaining performance obligations to be recognized as revenue within the next twelve months .
The following table summarizes the changes in unearned revenue for the years ended December 31, 2023 and 2022 (in thousands):
3 unchanged sentences
Ending balance
−Removed: For contractual arrangements where consideration is paid up-front,
−Removed: the transfer of the quantum computing services is completed at the discretion of the customer as the customer chooses to use the services starting from the date of contract inception.
−Removed: As such, the up-front
−Removed: payment of consideration does not represent a significant financing component.
Assets Recognized from Costs to Obtain a Contract
3 unchanged sentences
Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets is one year or less.
−Removed: As of December 31, 2022 and 2021, total capitalized costs were $ 1.0 million and zero , respectively.
−Removed: Amortization expense was less than
−Removed: $ 0.1 million and zero for the years ended December 31, 2022 and 2021, respectively.
+Added: As of December 31, 2023 and 2022, total capitalized costs were $ 2.8 million and $ 1.0 million, respectively.
+Added: Amortization expense was $ 0.6 million and less than $ 0.1 million for the years ended December 31, 2023 and 2022 , respectively, and is included in sales and marketing in the consolidated statements of operations.
Cost of Revenue
−Removed: Cost of revenue primarily consists of expenses related to delivering the Company’s services, including direct labor costs, direct service costs and allocated shared resources.
−Removed: Cost of revenue excludes depreciation and amortization related to the Company’s quantum computing systems and related software and developed technology.
+Added: Cost of revenue primarily consists of expenses related to delivering the Company's services, including personnel-related expenses, allocated facility and other costs for customer facing functions, and costs associated with maintaining the Company's in-service quantum computing systems to ensure proper calibration as well as costs incurred for maintaining the cloud on which the QCaaS resides.
+Added: Cost of revenue also includes hardware costs for construction of specialized quantum computing hardware.
+Added: Personnel-related expenses include salaries, benefits, and stock-based compensation.
+Added: Cost of revenue excludes depreciation and amortization related to our quantum computing systems and related software.
Research and Development
−Removed: Research and development expenses consist of personnel costs, including stock-based compensation expense, and allocated shared resource costs for the Company’s hardware, software and engineering personnel who design and develop the Company’s quantum computing systems and research new quantum computing technologies.
+Added: Research and development expenses consist of personnel-related costs, including salaries, benefits and stock-based compensation expense, and allocated shared resource costs for the Company’s hardware, software and engineering personnel who design and develop the Company’s quantum computing systems and research new quantum computing technologies.
Unlike a standard computer, design and development efforts continue throughout the useful life of the Company’s quantum computing systems to ensure proper calibration and optimal functionality.
−Removed: Research and development expenses also include purchased hardware and software costs related to quantum computing systems constructed for research purposes that are not probable of providing future economic benefit and have no alternate future use.
−Removed: In December 2020, the Company amended its option agreement with Duke University (“Duke”), and under this amendment, the Company issued common shares to Duke in consideration for research and development services through July 15, 2026.
−Removed: The amended arrangement is considered a research and development service arrangement and recorded as a prepayment based on the fair value of the common stock issued on the effective date of the amendment and amortized over the term of the arrangement as services are received.
−Removed: In February 2021, the Company and the University of Maryland (“UMD”) amended the option agreement with UMD pursuant to which the Company issued shares of common stock to UMD as a nonrefundable upfront payment in exchange for research and development services by UMD and rights to any potential future intellectual property developed through July 2021.
−Removed: The amended arrangement is considered a research a nd
−Removed: development service arrangement and recorded as a prepayment based on the fair value of the common stock issued on the effective date of the amendment and amortized over the term of the arrangement as services are received.
−Removed: Refer to Note 8 for further information on the Duke and UMD agreements.
+Added: Research and development expenses also include purchased hardware and software costs related to quantum computing systems constructed for research purposes that are not probable of providing future economic benefit and have no alternate future use, as well as costs associated with third-party research and development arrangements.
+Added: Under an agreement with Duke University (“Duke”), the Company issued common shares to Duke in consideration for research and development services through July 15, 2026.
+Added: The agreement is considered a research and development service arrangement and recorded as a prepayment based on the fair value of the common stock issued and is amortized over the term of the arrangement as services are received.
+Added: Refer to Note 8 for further information on the Duke agreements.
Advertising Costs
4 unchanged sentences
The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period and uses the straight-line method to recognize stock-based compensation.
−Removed: The Company uses the Black-Scholes-Merton (“Black- Scholes”) option-pricing model to determine the fair value of stock awards and the estimated fair value for stock options.
−Removed: The Black-Scholes option- pricing model requires the use of subjective assumptions, which determine the fair value of share-based awards, including the fair value of the Company’s common stock, the option’s expected term, the price volatility of the underlying common stock, risk-free interest rates, and the expected dividend yield of the common stock.
−Removed: The assumptions used to determine the fair value of the stock awards represent management’s best estimates.
+Added: The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the estimated fair value for stock options.
+Added: The Black-Scholes option-pricing model requires the use of subjective assumptions, which determine the fair value of stock option awards, including the option’s expected term, the price volatility of the underlying common stock, risk-free interest rates, and the expected dividend yield of the common stock.
+Added: The assumptions used to determine the fair value of the stock options represent management’s best estimates.
These estimates involve inherent uncertainties and the application of management’s judgment.
The Company records forfeitures as they occur.
−Removed: Stock-based compensation cost for restricted stock units is measured based on the fair value of the Company’s common stock on the grant date.
−Removed: For awards with a performance-based vesting condition, the Company records stock-based compensation cost if it is probable that the performance condition will be achieved.
+Added: Stock-based compensation cost for restricted stock units and performance-based restricted stock units is measured based on the fair value of the Company’s common stock on the grant date.
+Added: The fair value of performance-based restricted stock units with a market condition is estimated on the date of grant using the Monte Carlo simulation model.
+Added: The Monte Carlo simulation model requires the use of subjective assumptions, which determine the fair value of these awards, including price volatility, contractual term, discount rate, risk-free interest rates, and the expected dividend yield of the common stock.
+Added: The assumptions used to determine the fair value of the performance-based restricted stock awards represent management’s best estimates.
+Added: These estimates involve inherent uncertainties and the application of management’s judgment.
+Added: For awards with a performance-based vesting condition, including those with a market condition, the Company records stock-based compensation cost if it is probable that the performance conditions will be achieved.
+Added: Stock-based compensation cost will be recognized if the performance condition is satisfied, even if the market condition is not met and the award does not vest.
+Added: At each reporting period, the Company reassesses the probability of the achievement of the performance conditions and any change in expense resulting from an adjustment in the estimated shares to be released is treated as a cumulative catch-up in the period of the adjustment.
The Company records stock-based compensation expense for incentive compensation liabilities based on estimated payments to employees for which the Company expects to settle the liability by granting restricted stock units.
For these awards, stock-based compensation expense is accrued commencing at the service inception date, which generally precedes the grant date, through the end of the requisite service period.
−Removed: The Company obtained third-party valuations to estimate the fair value of its common stock for awards granted prior to the Business Combination, for purposes of measuring stock-based compensation expense.
−Removed: The third-party valuations were prepared using methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants (“AICPA”) Accounting & Va
−Removed: luation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.
Income taxes are accounted for using the asset and liability method.
−Removed: Deferred income taxes are provided
−Removed: for temporary differences in recognizing certain income, expense and credit items for financial reporting purposes and tax reporting purposes.
+Added: Deferred income taxes are provided for temporary differences in recognizing certain income, expense and credit items for financial reporting purposes and tax reporting purposes.
Such deferred income taxes primarily relate to the difference between the tax bases of assets and liabilities and their financial reporting amounts.
Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized.
−Removed: Excess tax benefits or tax deficiencies from stock option exercises are recognized in the income
−Removed: tax provision in the period in which they occur.
−Removed: The Company records a valuation allowance when it determines, based on available positive and negative evidence, that it is more-likely-than-not
−Removed: that some portion or all of its deferred tax assets will not be realized.
−Removed: Company determines the realizability of its deferred tax assets primarily based on the reversal of existing taxable temporary differences and projections of future taxable income (exclusive of reversing temporary differences and carryforwards).
−Removed: In evaluating such projections, the Company considers its history of profitability, the competitive environment, and general economic conditions.
−Removed: In addition, the Company considers the time frame over which it would take to utilize the deferred tax assets prior to their expiration.
−Removed: For certain tax positions, the Company uses a more-likely-than-not
−Removed: threshold based on the technical merits of the tax position taken.
−Removed: Tax positions that meet the more-likely-than-not
−Removed: recognition threshold are measured at the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not
−Removed: to be realized upon ultimate settlement in the financial statements.
+Added: Excess tax benefits or tax deficiencies from stock option exercises are recognized in the income tax provision in the period in which they occur.
+Added: The Company records a valuation allowance when it determines, based on available positive and negative evidence, that it is more-likely-than-not that some portion or all of its deferred tax assets will not be realized.
+Added: The Company determines the realizability of its deferred tax assets primarily based on the reversal of existing taxable temporary differences and projections of future taxable income (exclusive of reversing temporary differences and carryforwards).
+Added: In evaluating such projections, the Company considers its history of profitability and the time frame over which it would take to utilize the deferred tax assets prior to their expiration.
+Added: For certain tax positions, the Company uses a more-likely-than-not threshold based on the technical merits of the tax position taken.
+Added: Tax positions that meet the more-likely-than-not recognition threshold are measured at the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the consolidated financial statements.
The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.
−Removed: However, there were no amounts recognized relating to interest and penalties in the consolidated statements of operations for the years ended December 31, 2022 and 2021.
−Removed: The Company had no uncertain income tax positions as of December 31, 2022 and 2021.
+Added: There were no amounts recognized relating to interest and penalties in the consolidated statements of operations for the years ended December 31, 2023 and 2022 .
+Added: The Company had no uncertain income tax positions as of either December 31, 2023 or 2022 .
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, investments, and trade accounts receivable.
−Removed: The Company maintains the majority of its cash, cash equivalents, restricted cash and investments with two financial institutions.
−Removed: The Company’s deposits periodically exceed amounts guaranteed by the Federal Deposit Insurance Corporation.
−Removed: While the Company has not experienced any losses in such accounts, the recent failure of Silicon Valley Bank (“SVB”), at which the Company held cash and cash equivalents in multiple accounts, exposed the Company to limited credit risk prior to the completion by the Federal Deposit Insurance Corporation of the resolution of SVB in a manner that fully protected all depositors.
+Added: The Company maintains the majority of its cash, cash equivalents, restricted cash and investments with three financial institutions.
+Added: The Company’s deposits routinely exceed amounts guaranteed by the Federal Deposit Insurance Corporation.
+Added: While the Company has not experienced any losses in such accounts, the
+Added: failure of Silicon Valley Bank (“SVB”), at which the Company held cash and cash equivalents in multiple accounts, exposed the Company to limited credit risk prior to the completion by the Federal Deposit Insurance Corporation of the resolution of SVB in a manner that fully protected all depositors.
The Company’s accounts receivable are derived from customers primarily located in the U.S.
−Removed: The Company performs periodic evaluations of its customers’ financial condition and generally does not require its customers to provide collateral or other security to support accounts receivable and maintains an allowance for doubtful accounts.
+Added: The Company performs periodic evaluations of its customers’ financial condition and generally does not require its customers to provide collateral or other security to support accounts receivable and maintains an allowance for credit losses.
Credit losses historically have not been material.
−Removed: Significant customers are those
−Removed: represent more than 10 % of the Company’s total revenue.
−Removed: The Company’s revenue was primarily from three significant customers for the year ended December 31, 2022, and from two significant customers for the year ended December 31, 2021.
+Added: Significant customers are those that represent more than 10 % of the Company’s total revenue.
+Added: For the year ended December 31, 2023 , the Company had two significant customers that accounted for 58 % of total revenue.
+Added: For the year ended December 31, 2022, the Company had three significant customers that accounted for 70 % of total revenue.
Earnings (Loss) Per Share
4 unchanged sentences
Net loss attributable to common stockholders
−Removed: Weighted average shares used in computing net loss per share attributable to common stockholders—basic and diluted
−Removed: Net loss per share attributable to common stockholders—basic and diluted
+Added: Weighted average shares used in computing net loss per share
+Added: attributable to common stockholders—basic and diluted
+Added: Net loss per share attributable to common stockholders—basic
In periods with a reported net loss, the effect of anti-dilutive stock options, unvested restricted stock units, unvested common stock (including unvested restricted common stock) and warrants are excluded and diluted loss per share is equal to basic loss per share.
2 unchanged sentences
Warrants to purchase common stock
−Removed: Public and private warrants
−Removed: Unvested Vesting Shares
+Added: Public warrants
Unvested restricted stock units
+Added: Unvested performance-based restricted stock units
Unvested common stock
−Removed: Recently Issued Accounting Standards Not Yet Adopted
−Removed: In June 2016, the FASB issued ASU 2016-13,
−Removed: Financial Instruments—Credit Losses, along with various updates and improvements.
+Added: Recently Adopted Accounting Standards
+Added: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses, along with various updates and improvements.
The standard, including subsequently issued amendments, requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.
−Removed: is effective for annual reporting periods beginning after December 15, 2022, with early adoption permitted.
−Removed: The Company will adopt this standard in the first quarter of 2023.
−Removed: Based on the composition of the Company’s trade receivables and other financial assets, current market conditions and historical credit loss activity, the adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.
−Removed: In August 2020, the FASB issued ASU 2020-06,
−Removed: Debt, Debt with Conversion and Other Options (Subtopic 470-20)
−Removed: and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic815-40)
+Added: The Company adopted this standard effective January 1, 2023, and it did not have a material effect on the consolidated financial statements and related disclosures.
+Added: In August 2020, the FASB issued ASU 2020-06, Debt, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.
3 unchanged sentences
The ASU also simplifies the diluted net income per share calculation in certain areas.
−Removed: The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted.
−Removed: The Company does not expect adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.
+Added: The Company adopted this standard effective January 1, 2023, in the consolidated financial statements.
+Added: The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures.
+Added: Recently Issued Accounting Standards Not Yet Adopted
+Added: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
+Added: ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.
+Added: Adoption of ASU 2023-07 should be applied on a retrospective basis, with early adoption permitted.
+Added: The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.
+Added: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures.
+Added: ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on a prospective basis, with early adoption permitted.
+Added: The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.
On December 30, 2022, the Company acquired the assets of Entangled Networks Ltd.
1 unchanged sentence
The acquisition supports the Company’s efforts to build large-scale quantum computers by enabling computation across multiple distributed quantum processors.
−Removed: As part of the preliminary
−Removed: purchase price allocation, the Company recorded $ 0.3 million in identifiable intangible assets and $ 0.7 million in goodwill .
−Removed: CASH EQUIVALENTS, RESTRICTED CASH AND INVESTMENTS
−Removed: The following table summarizes the Company’s unrealized gains and losses and estimated fair value of cash equivalents, restricted cash and investments in available-for-sale
−Removed: securities recorded in the consolidated balance sheets (in thousands):
+Added: As part of the final purchase price allocation, the Company recorded $ 0.3 million in identifiable intangible assets and $ 0.7 million in goodwill.
+Added: CASH, CASH EQUIVALENTS, RESTRICTED CASH AND INVESTMENTS
+Added: The following table summarizes the Company’s unrealized gains and losses and estimated fair value of cash, cash equivalents, restricted cash and investments in available-for-sale securities recorded in the consolidated balance sheets (in thousands):
As of December 31, 2023
As of December 31, 2022
−Removed: Cash and money market funds
+Added: Cash and money market
Commercial paper
2 unchanged sentences
US government and agency
−Removed: Total cash equivalents, restricted cash and investments
−Removed: Unrealized losses related to investments were primarily a result of interest rate fluctuations, and none of the investments held as of December 31, 2022, have been in a continuous unrealized loss position for greater than one year.
−Removed: As of December 31, 2022, the Company did not consider any of its available-for-sale
−Removed: investments to be other-than-temporarily impaired nor does the Company intend, or believe it is more likely than not, that it will be required to sell the investments in an unrealized loss position before the recovery of the associated amortized cost basis.
−Removed: The estimated fair value of the Company’s cash equivalents, restricted cash and investments in available-for-sale
−Removed: securities as of December 31, 2022, aggregated by investment category and classified by contractual maturity date, is as follows (in thousands):
+Added: Total cash, cash equivalents,
+Added: restricted cash and
+Added: Unrealized losses related to investments were primarily a result of interest rate fluctuations.
+Added: The following table presents information about the Company’s investments in available-for-sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position (in thousands):
+Added: As of December 31, 2023
+Added: Less than 12 Months
+Added: 12 Months or Longer
+Added: Gross Unrealized
+Added: Gross Unrealized
+Added: Gross Unrealized
+Added: Commercial paper
+Added: Corporate notes and bonds
+Added: Municipal bonds
+Added: US government and agency
+Added: There were no securities in a gross unrealized loss position for greater than twelve months as of December 31, 2022.
+Added: The Company did no t have any allowance for credit losses as of either December 31, 2023 or December 31, 2022.
+Added: The Company neither intends to nor believes that it is more likely than not that it will be required to sell the investments in an unrealized loss position before the recovery of the associated amortized cost basis.
+Added: The estimated fair value of the Company’s cash, cash equivalents, restricted cash and investments in available-for-sale securities as of December 31, 2023, aggregated by investment category and classified by contractual maturity date, is as follows (in thousands):
Cash and money market funds
9 unchanged sentences
Cash and money market funds (1)
+Added: US government and agency
Total cash, cash equivalents and restricted cash
7 unchanged sentences
Corporate notes and bonds
−Removed: Municipal bon ds
US government and agency
5 unchanged sentences
Cash and money market funds (1)
−Removed: Commercial paper
−Removed: US government and agency
Total cash, cash equivalents and restricted cash
7 unchanged sentences
Corporate notes and bonds
+Added: Municipal bonds
US government and agency
1 unchanged sentence
Public warrants
−Removed: Includes money market funds associated with the Company’s overnight investment sweep account and collateralizing letters of credit.
−Removed: The Company’s warrant liabilities are comprised of the public warrants.
−Removed: The private placement warrants were fully exercised as of December 31, 2021.
−Removed: Refer to Note 13 for further information.
+Added: (1) Includes money market funds associated with the Company’s overnight investment sweep account and cash collateralizing the Company's letter of credit and corporate credit cards.
Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period.
There were no transfers between levels during the years ended December 31, 2023 and 2022.
−Removed: As of December 31, 2022, the public warrants were publicly traded at
−Removed: $ 0.73 per warrant.
−Removed: The private placement warrants were marked to fair value on the date of exercise.
−Removed: The fair value of the private placement warrants was determined using Level 3 inputs.
−Removed: Management determined the fair value of the private placement warrants using unobservable inputs in the Black-Scholes valuation model.
−Removed: Inherent in the valuation were assumptions related to expected stock-price volatility, expected term, risk-free interest rate and dividend yield.
−Removed: The Company estimated the volatility of its common stock warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s common stock that matches the expected remaining
−Removed: life of the warrants.
−Removed: The risk-free interest rate was based on the U.S.
−Removed: Treasury zero-coupon
−Removed: yield curve on the grant date for a maturity similar to the expected remaining life of the warrants.
−Removed: The expected life of the warrants was assumed to be equivalent to their remaining contractual term.
−Removed: The dividend rate was based on the historical rate, which the Company anticipate d
−Removed: remaining at zero.
−Removed: The following table provides quantitative information regarding Level 3 fair value measurement inputs for the private placement warrants as of the date the private placement warrants were exercised.
−Removed: Exercise price
−Removed: Risk-free rate
−Removed: Dividend yield
−Removed: The Company did not have any Level 3 assets or liabilities as of December 31, 2022 or 2021, as the private placement warrants were fully exercised.
+Added: On December 31, 2023 , the closing trading price of the public warrants was $ 4.40 per warrant.
PROPERTY AND EQUIPMENT, NET
−Removed: Property and equipment, net as of December 31, 2022 and 2021, are composed of the following (in thousands):
+Added: Property and equipment, net is composed of the following (in thousands):
Computer equipment and acquired computer software
4 unchanged sentences
accumulated depreciation
−Removed: Property and equipment, net
+Added: Total property and equipment, net
Depreciation expense for the years ended December 31, 2023 and 2022 was $ 7.2 million and $ 4.0 million, respectively.
INTANGIBLE ASSETS, NET
−Removed: Intangible assets as of December 31, 2022 and 2021, are composed of the following (in thousands, except as otherwise noted):
+Added: Intangible assets, net is composed of the following (in thousands, except as otherwise noted):
December 31, 2023
4 unchanged sentences
Website and other
+Added: Developed technology
Internally developed software
2 unchanged sentences
Year ending December 31,
−Removed: AGREEMENTS WITH UMD AND DUKE
+Added: Total amortization expense
+Added: AGREEMENTS WITH UNIVERSITY OF MARYLAND AND DUKE UNIVERSITY
Exclusive License Agreement
−Removed: The Company entered into an exclusive license agreement (“License Agreement”) in July 2016 with UMD and Duke.
−Removed: The License Agreement grants to the Company an exclusive, perpetual license (“Initial Patents”) to certain patents, know-how
−Removed: and other intellectual property utilized in trapped-ion
−Removed: quantum computing systems.
−Removed: The license granted to the Company is exclusive for all patents (and non-exclusive
−Removed: for other types of intellectual property), subject to certain governmental rights and retained rights by UMD and Duke and other non-profit
−Removed: institutions to use and practice the Licensed Patents (as defined below) and technology for internal research and other non-profit
−Removed: In exchange for the Initial Patents, UMD and Duke received an aggregate of 142,886 common shares after giving effect to the recapitalization.
−Removed: On February 1, 2021, the Company and UMD executed two amendments to the License Agreement granting exclusive rights to license additional intellectual property in exchange for a total of 257,198
−Removed: common shares after
−Removed: giving effect to the recapitalization.
−Removed: Management evaluated the amendments and concluded that the arrangements qualify as equity-classified instruments and recorded an intangible asset and additional
−Removed: capital based on the fair value of the shares at the date the amendments were executed of $
+Added: The Company entered into an exclusive license agreement (“License Agreement”) in July 2016 with the University of Maryland (“UMD”) and Duke University (“Duke”).
+Added: The License Agreement grants to the Company an exclusive, perpetual license (“Initial Patents”) to certain patents, know-how and other intellectual property utilized in trapped-ion quantum computing systems.
+Added: The license granted to the Company is exclusive for all patents (and non-exclusive for other types of intellectual property), subject to certain governmental rights and retained rights by UMD and Duke and other non-profit institutions to use and practice the Licensed Patents (as defined below) and technology for internal research and other non-profit purposes.
+Added: In exchange for the Initial Patents, UMD and Duke received an aggregate of 142,886 shares of common stock.
+Added: On February 1, 2021, the Company and UMD executed two amendments to the License Agreement granting exclusive rights to license additional intellectual property in exchange for a total of 257,198 shares of common stock.
+Added: Management evaluated the amendments and concluded that the arrangements qualify as equity-classified instruments and recorded an intangible asset and additional paid-in capital based on the fair value of the shares at the date the amendments were executed of $ 1.6 million.
The shares for each executed amendment were issued during the year ended December 31, 2021.
Exclusive Option Agreements
−Removed: The Company also entered into an exclusive option agreement (“Option Agreement”) with each of UMD and Duke in 2016 whereby on the anniversary of the effective date of the License Agreement for a period of 5
−Removed: years, the Company has the right to exclusively license additional intellectual property developed by UMD and Duke (the “Additional Patents” and together with the Initial Patents, the “Licensed Patents”) by exercising an annual option and issuing common shares each to Duke and UMD in consideration for the Additional Patents.
−Removed: The amount issued to UMD and Duke pursuant to the option over the 5 -year
−Removed: term was equal to an aggregate of 642,995 common shares to each university after giving effect to the recapitalization.
+Added: The Company also entered into an exclusive option agreement (the “Option Agreement”) with each of UMD and Duke in 2016 whereby on the anniversary of the effective date of the License Agreement for a period of 5 years , the Company has the right to exclusively license additional intellectual property developed by UMD and Duke (the “Additional Patents” and together with the Initial Patents, the “Licensed Patents”) by exercising an annual option and issuing shares of common stock each to Duke and UMD in consideration for the Additional Patents.
+Added: The amount issued to UMD and Duke pursuant to the Option Agreement over the 5-year term was equal to an aggregate of 642,995 shares of common stock to each university.
The Company may elect not to exercise the option if there was not a minimum number of intellectual property developed in a given year and then the Option Agreement would extend another year .
−Removed: In December 2020, the Company amended its option agreement with Duke, and under this amendment, the Company issued 1,214,317 common shares after giving effect to the recapitalization, to Duke in consideration for research and development services through July 15, 2026.
+Added: In December 2020, the Company amended its Option Agreement with Duke, and under this amendment, the Company issued 1,214,317 shares of common stock to Duke in consideration for research and development services through July 15, 2026.
Under the terms of the amended Option Agreement, the issuance of shares is a nonrefundable upfront payment in exchange for research and development services by Duke whereby the Company will obtain rights to any potential future intellectual property developed during the term.
As such, the fair value of the shares of common stock was recorded as a prepaid expense and is being amortized over the term of the arrangement as services are received.
−Removed: The Company recognized $ 0.5 million
−Removed: of research and development expense related to the agreement with Duke during each of the years ended December 31, 2022 and 2021.
−Removed: In February 2021, the Company and UMD amended the UMD Option Agreement pursuant to which the Company issued the remaining 128,599 shares of common stock after giving effect to the recapitalization to UMD as a nonrefundable upfront payment in exchange for research and development services by UMD and rights to any potential future intellectual property developed through July 2021.
−Removed: The fair value of the shares issued to UMD was $ 0.8 million.
−Removed: The Company recognized $ 0.8 million of research and development expense associated with the UMD Option Agreement amendment for the year ended December 31, 2021.
−Removed: The UMD Option Agreement was fully amortized in 2021 and therefore no research and development expense was recognized for the year ended December 31, 2022.
−Removed: Additionally, under the terms of the License Agreement and Option Agreement, UMD was provided an exit guarantee if a sale or liquidation of the Company would occur that provides for the following:
−Removed: acceleration of the issuance of common stock as if exercised through the License Agreement,
−Removed: additional consideration equal to the consideration that
−Removed: a holder of one-half
−Removed: of one percent ( 0.5 %) of the common stock of the Company, on a fully-diluted basis, would have received in the sale to the extent it exceeds the amount UMD and Duke shall be entitled to as a result of ownership at the time of sale.
−Removed: The exit guarantee with UMD lapsed as a result of the Business Combination in September 2021.
+Added: The Company recognized $ 0.5 million of research and development expense related to the agreement with Duke during each of the years ended December 31, 2023 and 2022.
The useful life of the Licensed Patents derived from the License Agreement and the Option Agreement is the remaining legal life at the time of acquisition.
−Removed: The value of the Licensed Patents is based on the fair value of the
−Removed: common stock given as consideration on the effective date of each agreement and exercise of option.
−Removed: The asset is amortized
−Removed: over the useful life of the Licensed Patents.
−Removed: ACCRUED EXPENSES
−Removed: Accrued expenses as of December 31, 2022 and 2021, are composed of the following (in thousands):
+Added: The value of the Licensed Patents is based on the fair value of the common stock given as consideration on the effective date of each agreement and exercise of option.
+Added: The asset is amortized over the useful life of the Licensed Patents.
+Added: OTHER BALANCE SHEET ACCOUNTS
+Added: Prepaid expenses and other current assets are composed of the following (in thousands):
+Added: Materials and supplies
+Added: Prepaid expenses
+Added: Other current assets
+Added: Total prepaid expenses and other current assets
+Added: Accrued expenses are composed of the following (in thousands):
Accrued salaries and other payroll liabilities
−Removed: Accrued accounting and tax liabilities
+Added: Accrued professional services
+Added: Accrued equipment and services liabilities for research and development
Accrued expenses—other
4 unchanged sentences
The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe third- party intellectual property rights.
−Removed: To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the accompanying financial statements.
−Removed: Shareholder Lawsuit
+Added: To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.
+Added: Stockholder Lawsuit
In May 2022, a securities class action complaint captioned Leacock v.
−Removed: ., Case No.8:22-cv-01306,
−Removed: was filed by a stockholder of the Company in the United States District Court for the District of Maryland (the “Leacock Litigation”) against the Company and certain of the Company’s current officers.
+Added: et al., Case No.
+Added: 8:22-cv-01306, was filed by a stockholder of the Company in the United States District Court for the District of Maryland (the “Leacock Litigation”) against the Company and certain of the Company’s current officers.
In June 2022, a securities class action complaint captioned Fisher v.
−Removed: ., Case No.8:22-cv-01306-DLB
−Removed: (the “Fisher Litigation”) was filed by a stockholder against the Company and certain of the Company’s current officers (“IonQ Defendants”).
−Removed: Both the Leacock Litigation and Fisher Litigation, which have been consolidated into a single action, allege violations of Section 10(b) of the Exchange Act, and Rule 10b-5
−Removed: promulgated thereunder, and Section 20(a) of the Exchange Act and seek damages.
+Added: IonQ, Inc., Case No.
+Added: 8:22-cv-01306-DLB (the “Fisher Litigation”) was filed by a stockholder against the Company and certain of the Company’s current officers (“IonQ Defendants”).
+Added: Both the Leacock Litigation and Fisher Litigation, which have been consolidated into a single action, allege violations of Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act and seek damages.
In September 2022, the Court appointed lead plaintiffs and counsel for lead plaintiffs, and ordered lead plaintiffs to file a consolidated amended complaint.
2 unchanged sentences
On February 7, 2023, the IonQ Defendants and the Additional Defendants each filed a motion to dismiss the consolidated amended complaint.
−Removed: Both the IonQ Defendants and Additional Defendants believe that the allegations in the complaints are without merit and intend to defend the matters vigorously.
+Added: On March 23, 2023, lead plaintiffs filed their omnibus opposition to the motions to dismiss.
+Added: On April 26, 2023, the IonQ Defendants and the Additional Defendants each filed a reply in support of the motions to dismiss.
+Added: On September 28, 2023, the District Court of Maryland issued an order dismissing plaintiffs' claims against the IonQ Defendants and the Additional Defendants with prejudice and directed the clerk to close the case.
+Added: On October 26, 2023, the plaintiffs filed a motion for post-judgment relief, seeking to amend their consolidated amended complaint.
+Added: The IonQ Defendants and Additional Defendants filed oppositions to plaintiffs’ motion on December 1, 2023, and plaintiffs filed their reply on January 8, 2024.
+Added: Both the IonQ Defendants and Additional Defendants intend to defend the matters vigorously.
Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot reasonably estimate the possible loss or range of loss, if any, that may result from the associated suit.
1 unchanged sentence
On January 12, 2021, dMY Technology Group, Inc.
−Removed: II, dMY Sponsor II, LLC, dMY, and dMY Sponsor
−Removed: III, LLC (“Sponsor”) accepted service of a lawsuit where they were named as counterclaim defendants in an underlying action by and between GTY Technology Holdings, Inc.
+Added: II, dMY Sponsor II, LLC, dMY, and dMY Sponsor III, LLC (“Sponsor”) accepted service of a lawsuit where they were named as counterclaim defendants in an underlying action by and between GTY Technology Holdings, Inc.
(“GTY”), dMY Technology Holdings Inc., dMY Sponsor, LLC, dMY Sponsor II, LLC, dMY Technology Group Inc.
−Removed: II, dMY and Sponsor (collectively “dMY Defendants”)
−Removed: and Carter Glatt (“Glatt”) and Captains Neck Holdings LLC (“Captains Neck”), an entity of which Mr.
+Added: II, dMY and Sponsor (collectively “dMY Defendants”) and Carter Glatt (“Glatt”) and Captains Neck Holdings LLC (“Captains Neck”), an entity of which Mr.
Glatt is a member.
1 unchanged sentence
and dMY Sponsor, LLC, seeks a declaratory judgment that Glatt and Captains Neck are not entitled to membership units of dMY Sponsor LLC, which was formed by Harry L.
−Removed: You, the co-founder
−Removed: and former President and Chief Financial Officer of GTY when Glatt was still working at GTY.
+Added: You, the co-founder and former President and Chief Financial Officer of GTY when Glatt was still working at GTY.
The underlying lawsuit contains claims arising from Glatt’s termination of employment from GTY, including theft and misappropriation of confidential GTY information, breach of contract, breach of the duties of loyalty and fiduciary duty and conversion.
Glatt responded to the underlying lawsuit by adding members of the Sponsor and officers of dMY as additional counterclaim defendants (collectively with the dMY Defendants Glatt and Captains Neck, the “Counterclaim Defendants”) and adding Dune Acquisition Holdings LLC, a newly formed special purpose acquisition company, as a counterclaimant and asserting claims for breach of contract, fraudulent misrepresentation, negligent misrepresentation, tortious interference with business relations, quantum meruit and unjust enrichment.
−Removed: dMY, and now the Company, has never employed Glatt and has no business agreements with him.
−Removed: The Counterclaim Defendants have denied the claims against them and have filed a motion to dismiss the suit.
−Removed: Although the outcome of this matter cannot be predicted with certainty and the impact of the final resolution of this matter on the Company’s results of operations in a particular subsequent reporting period is not known, management does not believe that the resolution of this matter will have a material adverse effect on the Company’s future consolidated financial position, future results of operations or cash flows.
+Added: dMY and the Company have never employed Glatt nor maintained any business agreements with him.
+Added: The Counterclaim Defendants denied the claims against them and filed a motion to dismiss the suit.
+Added: During 2023, the court dismissed the claims against dMY Technology Group, Inc.
+Added: III (“dMY III”), the former legal registrant of IonQ, Inc and the case is now considered closed.
STOCKHOLDERS’ EQUITY
12 unchanged sentences
Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of common stock may be entitled to receive dividends out of legally available funds if the board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the board of directors may determine.
−Removed: We do not anticipate paying any cash dividends in the foreseeable
−Removed: In the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up,
−Removed: the holders of common stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of the holders of the preferred stock, if any, have been satisfied.
+Added: We do not anticipate paying any cash dividends in the foreseeable future.
+Added: In the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of common stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of the holders of the preferred stock, if any, have been satisfied.
Rights and Preference
2 unchanged sentences
Common Stock Reserved for Issuance
−Removed: The Company’s common stock reserved for future issuances after giving effect to the recapitalization are as follows:
+Added: The Company’s common stock reserved for future issuances are as follows:
As of December 31,
2 unchanged sentences
Public warrants outstanding
−Removed: Shares available for future grant
+Added: Restricted stock units outstanding
+Added: Performance-based restricted stock units grants
+Added: Shares available for grant under the 2021 Equity Incentive Plan
+Added: Shares available for issuance under the Employee Stock Purchase Plan
Total common stock reserved
1 unchanged sentence
In November 2019, contemporaneously with a revenue arrangement, the Company entered into a contract, pursuant to which the Company agreed to issue to a customer warrants to acquire shares of Legacy IonQ Series B-1 preferred stock (the “Warrant Shares”), subject to certain vesting events.
−Removed: Upon closing of the Business Combination, these warrants exercisable for Legacy IonQ Series B-1 preferred stock were assumed by the Company and converted into a warrant to purchase a number of shares of common stock equal to the product (rounded down to the nearest whole number) of (a) the number of shares of Legacy IonQ common stock issuable upon conversion of a share of Legacy IonQ Series B-1 preferred stock and(b) the Exchange Ratio (as defined in the Super 8-K filed with the SEC on October 4, 2021), at an exercise price per share (rounded up to the nearest whole cent) equal to (i) the exercise price per share of such Legacy IonQ Warrant Shares divided by (ii) the Exchange Ratio.
+Added: Upon closing of the Business Combination, these warrants exercisable for Legacy IonQ Series B-1 preferred stock were assumed by the Company and converted into a warrant to purchase shares of common stock.
Except as specifically provided in the Merger Agreement, the Warrant Shares will have the same terms and be subject to the same conditions (including applicable vesting conditions) as set forth in the Legacy IonQ warrant agreement.
−Removed: As of December 31, 2022, the contract allows for the customer to acquire up to
−Removed: 8,301,202 shares of common stock in the Company.
+Added: As of December 31, 2023 , the contract allows for the customer to acquire up to 8,301,202 shares of common stock in the Company.
As the Warrant Shares were issued in connection with an existing commercial agreement with a customer, the value of the Warrant Shares was determined to be consideration payable to the customer and consequently is treated as a reduction to revenue recognized under the corresponding revenue arrangement.
3 unchanged sentences
The fair value of the Warrant Shares at the date of issuance was determined to be $ 8.7 million.
−Removed: During 2020, Warrant Shares with a fair value of $ 0.6 million vested.
−Removed: This fair value of the unamortized warrants was recorded within other noncurrent assets and the Warrant Shares are amortized over time as the related customer revenue is earned.
−Removed: During the year ended December 31, 2021, $ 0.5 million of the warrant amortization was recorded as a reduction of the related customer revenue.
−Removed: As of December 31, 2021, the contract asset was fully amortized, and therefore no warrant amortization was recorded as a reduction of the related customer revenue during the year ended December 31, 2022.
WARRANT LIABILITIES
−Removed: The Company assumed 11,500,000 warrants, comprised of 7,500,000 public warrants and 4,000,000 private placement warrants, on September 30, 2021 as part of the Business Combination.
−Removed: here were 5,231,486
−Removed: 5,233,018 of public warrants to purchase common stock outstanding as of December 31, 2022 and 2021, respectively.
−Removed: There were no private placement warrants outstanding as of December 31, 2022 and 2021.
−Removed: Each warrant entitles the registered holder to purchase one share of common stock at a price of
−Removed: $ 11.50 per share.
+Added: The Company assumed 7,500,000 public warrants on September 30, 2021 as part of the Business Combination.
+Added: As of December 31, 2023 , there were 5,228,253 public warrants to purchase common stock outstanding.
+Added: Each warrant entitles the registered holder to purchase one share of common stock at a price of $ 11.50 per share.
Public warrants
7 unchanged sentences
• upon a minimum of 30 days’ prior written notice of redemption ;
−Removed: if, and only if, the closing price of common stock equals or exceeds $ 18.00 per share (as adjusted) for any 20 trading days within a
−Removed: period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
+Added: • if, and only if, the closing price of common stock equals or exceeds $ 18.00 per share (as adjusted) for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
Redemption of warrants for when the price per share of common stock equals or exceeds $ 10.00 :
3 unchanged sentences
and upon a minimum of 30 days’ prior written notice of redemption;
−Removed: if, and only if, the closing price of common stock equals or exceeds $ 10.00 per public share (as adjusted) for any 20 trading days within the
−Removed: day period ending three trading days before the Company sends notice of redemption to the warrant holders.
−Removed: No public warrants were redeemed by the Company as of December 31, 2022.
−Removed: Private placement warrants
−Removed: The private placement warrants were identical to the public warrants, except that the private placement warrants and the shares of common stock issuable upon exercise of the private placement warrants were not transferable, assignable, or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.
−Removed: Additionally, the private placement warrants were non-redeemable
−Removed: so long as they were held by dMY Sponsor III, LLC or its permitted transferees.
−Removed: Otherwise, the private placement warrants had terms and provisions that were identical to those of the public warrants, including as to exercise price, exercisability and exercise period.
−Removed: In December 2021, 4.0 million private placement warrants were exercised on a cashless basis, resulting in the net issuance of 2.2 million shares.
+Added: • if, and only if, the closing price of common stock equals or exceeds $ 10.00 per public share (as adjusted) for any 20 trading days within the 30 -trading day period ending three trading days before the Company sends notice of redemption to the warrant holders.
+Added: No public warrants have been redeemed by the Company as of December 31, 2023 .
STOCK-BASED COMPENSATION
2 unchanged sentences
Upon the closing of the Business Combination, no further awards were made pursuant to the 2015 Plan and all outstanding Legacy IonQ stock options under the 2015 Plan were assumed by the Company.
−Removed: Each Legacy IonQ stock option issued and outstanding immediately prior to the Business Combination was converted into an option to purchase shares of common stock of the Company equal to the product of (a) the number of shares of Legacy IonQ common stock subject to such Legacy IonQ stock option agreement immediately prior to the Business Combination and (b) the exchange ratio at an exercise price equal to the (i) the exercise price per share of such Legacy IonQ stock option divided by (ii) the exchange ratio.
−Removed: Such stock options will continue to be governed by the terms of the 2015 Plan and the stock option agreements thereunder, until such outstanding options are exercised or until they terminate or expire by their terms.
+Added: Such stock options granted under the 2015 Plan will continue to be governed by the terms of the 2015 Plan and the stock option agreements thereunder, until such outstanding options are exercised or until they terminate or expire by their terms.
For awards granted under the 2015 Plan, vesting generally occurs over four to five years from the date of grant.
−Removed: In August 2021, the Company’s board of directors adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which
−Removed: was subsequently approved by the Company’s stockholders in September 2021, and became effective upon the closing of the Business Combination.
+Added: In August 2021, the Company’s board of directors adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which was subsequently approved by the Company’s stockholders in September 2021, and became effective upon the closing of the Business Combination.
The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards (“RSU”), performance awards and other forms of awards to employees, directors, and consultants.
7 unchanged sentences
The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option.
−Removed: Expected Volatility
−Removed: —As the Company was privately held until 2021 and there has been limited
−Removed: history of a public market for its common stock prior to closing the Business Combination, the expected volatility is based on the average historical stock price volatility of comparable publicly-traded companies in its industry peer group, financial, and market capitalization data.
−Removed: Expected Term
−Removed: —The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding.
−Removed: The Company has estimated the expected term of its employee awards using the SAB Topic 14 Simplified Method allowed by the FASB and SEC, for calculating expected term as it has limited historical exercise data to provide a reasonable basis upon which to otherwise estimate expected term.
−Removed: Certain of the Company’s options began vesting prior to the grant date, in which case the Company uses the remaining vesting term at the grant date in the expected term calculation.
−Removed: Risk-Free Interest Rate
−Removed: —The Company estimates its risk-free interest rate by using the yield on actively traded non-inflation-indexed
+Added: Expected Volatility —As the Company was privately held until 2021 and there has been limited history of a public market for its common stock prior to closing the Business Combination, the expected volatility is based on the average historical stock price volatility of comparable publicly-traded companies in its industry peer group, financial, and market capitalization data.
+Added: Expected Term —The expected term of the Company’s options represents the period that the stock options are expected to be outstanding.
+Added: The Company has estimated the expected term of its employee stock option awards using the SAB Topic 14 Simplified Method allowed by the FASB and SEC, for calculating expected term as it has limited historical exercise data to provide a reasonable basis
+Added: upon which to otherwise estimate expected term.
+Added: Certain of the Company’s stock options began vesting prior to the grant date, in which case the Company uses the remaining vesting term at the grant date in the expected term calculation.
+Added: Risk-Free Interest Rate —The Company estimates its risk-free interest rate by using the yield on actively traded non-inflation-indexed U.S.
treasury securities with contract maturities equal to the expected term.
−Removed: Dividend Yield
−Removed: —The Company has not declared or paid dividends to date and does not anticipate declaring dividends.
+Added: Dividend Yield —The Company has not declared or paid dividends to date and does not anticipate declaring dividends.
As such, the dividend yield has been estimated to be zero .
−Removed: Fair Value of Underlying Common Stock
−Removed: —For options granted under the 2015 Plan, because the Company’s common stock was not yet publicly traded on the date of grant, the Company estimated the fair value of common stock prior to closing the Business Combination.
+Added: Fair Value of Underlying Common Stock —For stock options granted under the 2015 Plan, because the Company’s common stock was not yet publicly traded on the date of grant, the Company estimated the fair value of common stock prior to closing the Business Combination.
The board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved.
5 unchanged sentences
(v) current business conditions and projections;
−Removed: (vi) the likelihood of achieving a liquidity event, such as an initial
−Removed: public offering or sale of the Company, given prevailing market conditions;
+Added: (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions;
and (vii) precedent transactions involving the Company’s shares.
−Removed: For options granted under the 2021 Plan, the Company utilizes the closing stock price on the date of grant as the fair value of the common stock underlying such options.
−Removed: The assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2022 and 2021, are as follows:
+Added: For stock options granted under the 2021 Plan, the Company utilizes the closing stock price on the date of grant as the fair value of the common stock underlying such options.
+Added: The assumptions used to estimate the fair value of stock options granted are as follows:
Risk-free interest rate
12 unchanged sentences
Aggregate grant-date fair value of options vested
−Removed: Weighted-average grant date fair value per share for options granted
+Added: Weighted-average grant date fair value per share for
+Added: options granted
Early Exercised Stock Options
1 unchanged sentence
As of December 31, 2023 and 2022, the Company recorded a liability related to these shares subject to repurchase in the amount of $ 0.8 million and $ 2.0 million, respectively, in its consolidated balance sheets.
−Removed: During 2021, we exercised our right to repurchase 0.4 million shares related to the early exercise of stock options.
−Removed: The unvested shares were repurchased for $ 1.0 million from an employee in connection with the termination of their service.
Restricted Stock Units
The RSU activity is summarized in the following table:
+Added: (in millions)
Outstanding as of December 31, 2022
1 unchanged sentence
Expected to vest after December 31, 2023
−Removed: During the year ended December 31, 2022, the Company granted 81,134 RSUs related to the settlement of an accrued bonus liability.
+Added: During the years ended December 31, 2023 and 2022, the Company released 566,389 and 81,134 RSUs, respectively, related to the settlement of an accrued bonus liability.
+Added: Performance-Based Restricted Stock Units
+Added: During the year ended December 31, 2023 , the Company granted performance-based restricted stock unit awards (“PSU”) to certain officers and employees, which vest over approximately four years .
+Added: The target number of PSUs granted was 4,641,564 .
+Added: The number of shares that can be earned will range from 0 % to 300 % of the target number of shares, based on the Company's achievement of certain financial and technical goals, as well as a stock price hurdle requirement for a portion of the awards.
+Added: In the event that the stock price hurdle is not met at the time the PSUs vest, the maximum PSU opportunity shall be limited to target ( 100 %) performance.
+Added: The number of PSUs expected to vest and for which compensation cost has been recognized is based on the number of awards that the Company believes are probable of vesting as of December 31, 2023 .
+Added: No PSUs were granted during the year ended December 31, 2022.
+Added: For the portion of the PSUs subject to the stock price hurdle, the fair value was determined using a Monte Carlo simulation model.
+Added: The Monte Carlo simulation model requires estimates of highly subjective assumptions, which affect the fair value of each PSU.
+Added: Expected Volatility —As the Company was privately held until 2021 and there has been limited history of a public market for its common stock prior to closing the Business Combination, the expected volatility is based on the average historical stock price volatility of comparable publicly-traded companies in its industry peer group, financial, and market capitalization data.
+Added: Contractual Term —The Company utilizes the remaining performance period on the date of grant as the contractual term, which represents the period that the PSUs are expected to be outstanding.
+Added: Risk-Free Interest Rate —The Company estimates its risk-free interest rate by using the yield on actively traded non-inflation-indexed U.S.
+Added: treasury securities with contract maturities equal to the expected term.
+Added: Dividend Yield —The Company has not declared or paid dividends to date and does not anticipate declaring dividends.
+Added: As such, the dividend yield has been estimated to be zero .
+Added: Fair Value of Underlying Common Stock —The Company utilizes the closing stock price on the date of grant as the fair value of the common stock underlying such PSUs in the Monte Carlo simulation model.
+Added: The assumptions used to estimate the fair value of PSUs subject to the stock price hurdle are as follows:
+Added: Risk-free interest rate
+Added: Contractual term (in years)
+Added: Expected volatility
+Added: Dividend yield
+Added: The PSU activity is summarized in the following table, based on awards at target:
+Added: (in millions)
+Added: Outstanding as of December 31, 2022
+Added: Outstanding as of December 31, 2023
+Added: Expected to vest after December 31, 2023 (1)
+Added: (1) Represents the number of PSUs expected to vest, which may exceed the target number of shares, based on the Company's probability assessment of expected performance during the performance period.
Stock-Based Compensation Expense
−Removed: Total stock-based compensation expense for stock option awards and RSU awards, which are included in the consolidated financial statements, is as follows (in thousands):
+Added: Total stock-based compensation expense for stock option awards, RSUs and PSUs, which are included in the consolidated financial statements, is as follows (in thousands):
Cost of revenue
6 unchanged sentences
Unrecognized Stock-Based Compensation
−Removed: A summary of our remaining unrecognized compensation expense and the weighted-average remaining amortization period as of December 31, 2022, related to our non-vested
−Removed: stock options and RSU awards is presented below (in millions, except time period amounts):
+Added: A summary of the Company's remaining unrecognized compensation expense and the weighted-average remaining amortization period as of December 31, 2023, related to its non-vested stock option awards, RSUs and PSUs is presented below (in millions, except time period amounts):
Period (Years)
Restricted stock units
+Added: Performance-based restricted stock units
Stock options
9 unchanged sentences
As of December 31, 2023 , no shares of common stock had been issued under the ESPP and no offering period had been set by the board of directors.
−Removed: The current and deferred components of the provision for income taxes for both Federal, State and foreign jurisdictions
−Removed: are zero for both of the years ended December 31, 2022 and 2021.
+Added: The current and deferred components of the provision for income taxes for federal, state and foreign jurisdictions for the years ended December 31, 2023 and 2022 are as follows (in thousands):
+Added: Year Ended December 31,
+Added: Total current tax expense (benefit)
+Added: Total deferred tax expense (benefit)
+Added: Total tax expense (benefit)
The Company’s provision for income taxes differs from the amount determined by applying the applicable federal statutory tax rate to the loss before income taxes due to the valuation allowance for the net deferred income tax assets.
1 unchanged sentence
statutory tax rate to our effective tax rate is presented below:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
federal statutory income tax rate
8 unchanged sentences
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
−Removed: Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021, were as follows (in thousands):
+Added: Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
Deferred tax assets:
Accrued bonus
+Added: Unearned revenue
Stock-based compensation
−Removed: Accrued expenses
−Removed: Warrant expenses
Depreciation and amortization
+Added: Capitalized R&D costs
Lease liabilities
1 unchanged sentence
Net operating loss carryforwards
−Removed: Capitalized R&D costs
Total deferred tax assets
Valuation allowance
−Removed: Total deferred tax assets ,
−Removed: net of valuation allowance
+Added: Total deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Right of use assets
−Removed: Capitalized R&D costs
Total deferred tax liabilities
7 unchanged sentences
federal and state net operating loss carryforwards of approximately $ 143.4 million and $ 95.7 million, respectively, as of December 31, 2023 .
−Removed: The Company’s net operating loss carryforwards generated prior to January 1, 2018 of
−Removed: 1.1 million will begin to expire, if not utilized, in 2036.
+Added: The Company’s net operating loss carryforwards generated prior to January 1, 2018 of $ 1.1 million will begin to expire, if not utilized, in 2036.
The Company’s net operating loss carry forwards generated after December 31, 2017, will carryforward indefinitely.
As of December 31, 2023, the Company had U.S.
−Removed: federal and state tax credit carryforwards of $
+Added: federal and state tax credit carryforwards of $ 11.6 million.
The tax credit carryforwards will expire between 2025 and 2043 .
The deductibility of such credits and net operating losses (“NOL”) may be limited.
−Removed: Under Section s
−Removed: 383 and 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which generally occurs if the percentage of the corporation’s stock owned by 5 % stockholders increases by more than 50 % over a three-year period, the corporation’s ability to use its pre-change credits and NOL carryforwards and other pre-change tax attributes to offset its post-change income, may be limited.
+Added: Under Sections 383 and 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which generally occurs if the percentage of the corporation’s stock owned by 5 % stockholders increases by more than 50 % over a three-year period, the corporation’s ability to use its pre-change credits and NOL carryforwards and other pre-change tax attributes to offset its post-change income, may be limited.
The Company has not determined if it has experienced Section 383/382 ownership changes in the past and if a portion of its NOL and tax credit carryforwards are subject to an annual limitation.
In addition, the Company may experience ownership changes in the future as a result of subsequent shifts in its stock ownership, some of which may be outside of its control.
−Removed: If the Company determines that an ownership change has occurred and its ability to use its
−Removed: historical NOL and tax credit carryforwards is significantly limited, it would harm the Company’s future operating results by effectively increasing its future tax obligations.
+Added: If the Company determines that an ownership change has occurred and its ability to use its historical NOL and tax credit carryforwards is significantly limited, it would harm the Company’s future operating results by effectively increasing its future tax obligations.
The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets.
3 unchanged sentences
The Company is generally subject to a three-year statute of limitations by major tax jurisdictions.
−Removed: The current tax
−Removed: years that are subject for examination are tax years 201 9
−Removed: through 202 1
−Removed: , although tax years dating back to 2016 remain open up to the tax attribute amounts carried forward for future use.
−Removed: The Company has one operating lease for its corporate headquarters with UMD that is also used for its research and development functions.
−Removed: As of December 31, 2022 and 2021, the weighted-average remaining lease term was
−Removed: 9 years, respectively.
−Removed: The weighted-average discount rate was
−Removed: 11.9 % at both December 31, 2022 and 2021.
+Added: The current tax years that are subject for examination are tax years 2018 through 2022 , although tax years dating back to 2016 remain open up to the tax attribute amounts carried forward for future use.
+Added: The Company has operating leases for its various facilities, including its two primary locations in College Park, Maryland, and Bothell, Washington.
+Added: The College Park, Maryland facility is used for research and development, servicing customers and corporate functions and is leased from UMD.
+Added: Refer to Note 18 for further information.
+Added: The Bothell, Washington facility is used for manufacturing, research and development, and general office space.
+Added: Both the College Park, Maryland, and Bothell, Washington, leases expire in 2030 .
+Added: As of December 31, 2023 and 2022, the weighted-average remaining lease term was 6.5 years and 7.9 years, respectively, and the weighted-average discount rate was 9.0 % and 11.9 % , respectively.
+Added: The Bothell, Washington facility lease includes a landlord-provided tenant improvement allowance to offset a portion of the costs of the construction of leasehold improvements.
+Added: The Company determined that the leasehold improvements will be Company-owned, and as such, reflected the lease incentive as a reduction of lease payments used to measure the operating lease liability and ROU asset as of the lease commencement date.
The components of lease cost were as follows (in thousands):
8 unchanged sentences
General and administrative
+Added: Total operating lease cost
Supplemental cash flow and other information related to operating leases was as follows (in thousands):
−Removed: Cash payments included in the measurement of operating lease liabilities
+Added: Cash payments (receipts) included in the measurement of operating lease
+Added: liabilities, net
As of December 31, 2023, maturities of operating lease liabilities are as follows (in thousands):
2 unchanged sentences
imputed interest
+Added: lease incentives
Present value of operating lease liabilities
−Removed: In December 2022, the Company entered into a lease agreement for approximately 65,000 square feet in Bothell, Washington, which will commence in 2023 and expire in 2030 , with total future lease payments of approximately $ 9.7 million.
+Added: In December 2023, the Company amended the Bothell, Washington lease agreement to increase the rentable square feet by approximately 36,000 (the “Additional Space”), for a total of 101,000 square feet.
+Added: The lease amendment is accounted for as a lease modification in accordance with ASC 842, resulting in a $ 0.8 million reduction to the ROU asset and lease liability for the existing space.
+Added: The lease for the Additional Space will commence in 2024 and expire in 2030 .
+Added: The lease amendment provides for total future lease payments of approximately $ 4.3 million for the Additional Space.
+Added: In February 2024, the Company entered into a lease agreement for approximately 27,000 square feet in Arlesheim, Switzerland, which will commence in 2024 and expire in 2029 , with total future lease payments of approximately $ 4.3 million.
EMPLOYEE BENEFIT PLAN
−Removed: The Company has a 401(k) savings plan (the “401(k) Plan”), which qualifies
−Removed: as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code.
−Removed: Under the 401(k) Plan, participating employees may elect to contribute up to
−Removed: 100 % of their eligible compensation, subject to certain limitations.
+Added: The Company has a 401(k) savings plan (the “401(k) Plan”), which qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code.
+Added: Under the 401(k) Plan, participating employees may elect to contribute up to 100 % of their eligible compensation, subject to certain limitations.
The 401(k) Plan provides for a discretionary employer-matching contribution.
−Removed: The Company made a matching contribution of $
−Removed: 0.9 million and $
−Removed: 0.5 million to the 401(k) Plan for the years ended December 31, 2022 and 2021, respectively.
+Added: The Company made a matching contribution of $ 1.6 million and $ 0.9 million to the 401(k) Plan for the years ended December 31, 2023 and 2022 , respectively.
RELATED PARTY TRANSACTIONS
Transactions with UMD and Duke
−Removed: As described in Note 8, the Company entered into a License Agreement and Option Agreement with UMD and Duke whereby the Company, in the normal course of business, has licensed certain intellectual property and, in
−Removed: the case of the amendments to the Option Agreements, has purchased research and development services.
−Removed: The Company considers these agreements to be related party transactions because the Company’s Co-founder
−Removed: and Chief Technology Officer served as a professor at Duke and the Company’s Co-founder
−Removed: and Chief Scientist served as a professor at UMD.
−Removed: During 2021, the Company’s Chief Scientist moved to Duke and each, in their role as professors at Duke, are leading the research subject to the License Agreement and Option Agreement with Duke as of December 31, 2022.
−Removed: In addition, the Company has an operating lease for office space with UMD.
−Removed: tember 2021, the Company entered into a contract with UMD to provide certain quantum computing services and facility access (the “UMD Quantum Agreement”) related to the National Quantum Lab at UMD in exchange for payments totaling $
−Removed: Over the term of the contract, the Company estimates that it will make
−Removed: payments to UMD of approximately $
−Removed: million, including a pledge to establish the IonQ Endowed Professorship in the College of Computer, Mathematical and Natural Sciences at UMD with a
−Removed: contribution of $ 1.0 million.
+Added: As described in Note 8, the Company entered into a License Agreement and Option Agreement with UMD and Duke whereby the Company, in the normal course of business, has licensed certain intellectual property and, in the case of the amendments to the Option Agreements, has purchased research and development services.
+Added: The Company considers these agreements to be related party transactions because the Company’s Co-founder and Chief Technology Officer serves as a professor at Duke and the Company’s Co-founder and former Chief Scientist served as a professor at UMD.
+Added: During 2021, the Company’s former Chief Scientist moved to Duke and, in his role as a professor at Duke, co-lead the research subject to the License Agreement and Option Agreement with Duke, alongside the Company's Chief Technology Officer, until his departure from the Company.
+Added: The Company's Chief Technology Officer continues to lead the research subject to the License Agreement and Option Agreement with Duke as of December 31, 2023.
+Added: In addition, the Company has an operating lease for office space with UMD, which expires in 2030.
+Added: Future minimum lease payments as of December 31, 2023 are $ 5.7 million.
+Added: The lease costs and cash flow related to the operating lease were as follows (in thousands):
+Added: Fixed lease cost
+Added: Lease payments
+Added: A summary of the weighted-average remaining lease term and weighted-average discount rate is presented below:
+Added: Weighted-average remaining lease term (in years)
+Added: Weighted-average discount rate
+Added: In September 2021, the Company entered into a contract with UMD to provide certain quantum computing services and facility access (the “UMD Quantum Agreement”) related to the National Quantum Lab at UMD in exchange for payments totaling $ 14.0 million over three years .
+Added: Over the term of the contract, the Company estimates that it will make payments to UMD of approximately $ 1.4 million, including a contribution of $ 1.0 million to establish the IonQ Endowed Professorship in the College of Computer, Mathematical and Natural Sciences at UMD.
The pledge and other estimated payments to UMD will not be an exchange for distinct goods or services under the provisions of ASC 606 and therefore are considered a reduction of the transaction price for the UMD Quantum Agreement.
2 unchanged sentences
The Company’s results from transactions with related parties, as reflected in the consolidated statements of operations are detailed below.
−Removed: 0.5 million related to the amortization of a research and development arrangement with Duke for each of the years ended December 31, 2022 and 2021, all transactions in the table below relate to the Company’s arrangements with UMD (in thousands):
+Added: Except as noted below, all transactions in the table below relate to the Company’s arrangements with UMD (in thousands):
Cost of revenue
2 unchanged sentences
General and administrative (3)
−Removed: Included in research and development expenses is non-cash amortization associated with the Exclusive Option Agreements with UMD and Duke of $
−Removed: 0.5 million and $
−Removed: 1.3 million for the years ended December 31, 2022 and 2021, respectively.
−Removed: Also included in research and development expenses is $
−Removed: 0.6 million in allocated rent expense for each of the years ended December 31, 2022 and 2021.
+Added: (1) Included in research and development are expenses attributable to Duke of $ 0.5 million for each of the years ended December 31, 2023 and 2022.
+Added: (2) Included in sales and marketing are expenses attributable to Duke of less than $ 0.1 million and zero for the years ended December 31, 2023 and 2022, respectively.
+Added: (3) Included in general and administrative are expenses attributable to Duke of less than $ 0.1 million and zero for the years ended December 31, 2023 and 2022, respectively.
The Company has the following balances related to transactions with related parties, as reflected in the consolidated balance sheets.
−Removed: 0.5 million prepaid expenses and other current assets as of both December 31, 2022 and 2021, and $
−Removed: 1.3 million and $
−Removed: 1.8 million in other noncurrent assets as of December 31, 2022 and 2021, respectively, which relate to prepaid services to Duke under the Option agreement, all transactions in the table below relate to the Company’s arrangements with UMD (in thousands):
−Removed: Prepaid expenses and other current assets
−Removed: Operating lease right-of-use
−Removed: Other noncurrent assets
−Removed: Accounts payable
+Added: Except as noted below, all transactions in the table below relate to the Company’s arrangements with UMD (in thousands):
+Added: Prepaid expenses and other current assets ($ 520 and $ 520 attributable
+Added: Operating lease right-of-use asset
+Added: Other noncurrent assets ($ 805 and $ 1,325 attributable to Duke)
+Added: Accounts payable ($ 6 and zero attributable to Duke)
+Added: Accrued expenses ($ 6 and zero attributable to Duke)
Current operating lease liabilities
Unearned revenue
−Removed: operating lease liabilities
+Added: Non-current operating lease liabilities
GEOGRAPHIC INFORMATION
−Removed: Revenue generated for customers located in the United States was approximately
−Removed: 90 % of revenue for the years ended December 31, 2022 and 2021, respectively.
+Added: Revenue generated for customers located in the United States was approximately 85 % and 82 % of revenue for the years ended December 31, 2023 and 2022 , respectively.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.