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• We are an early-stage company and have a limited operating history, which makes it difficult to forecast our future results of operations.
−Removed: • We have a history of operating losses and expect to incur significant expenses and continuing losses for the foreseeable future.
−Removed: • We may not be able to scale our business quickly enough to meet customer and market demand, which could result in lower profitability or cause us to fail to execute on our business strategies.
+Added: • We have a history of operating losses and expect to incur significant expenses and continuing losses for the near future.
+Added: • We may not be able to scale our business quickly enough to meet customer and market demand, which could adversely affect our financial condition and results of operations or cause us to fail to execute on our business strategies.
• We may not manage our growth effectively.
−Removed: • Our management has limited experience in operating a public company.
• Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
−Removed: • Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.
−Removed: • Our operating and financial results forecast relies in large part upon assumptions and analyses we developed.
+Added: • Our operating and financial results forecast relies in large part upon assumptions and analyses we have developed.
If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.
−Removed: • We may need additional capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances, and we cannot be sure that additional financing will be available.
• We have not produced a scalable quantum computer and face significant barriers in our attempts to produce quantum computers.
−Removed: • The quantum computing industry is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers.
−Removed: • We have experienced in the past, and could also suffer disruptions, outages, defects and other performance and quality problems with our quantum computing systems, our private cloud, our research and development activities, our testbeds, our facilities, or with the public cloud, internet, and other infrastructure on which they rely.
+Added: If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail.
+Added: • We have experienced in the past, and could also suffer future disruptions, outages, defects and other performance and quality problems with our quantum computing systems, our private cloud, or other information systems, our research and development activities, our facilities, our other fixed assets, or with the public cloud, internet, and other infrastructure on which they rely.
• Even if we are successful in developing quantum computing systems and executing our strategy, competitors in the industry may achieve technological breakthroughs that render our quantum computing systems obsolete or inferior to other products.
• We may be negatively impacted by any early obsolescence of our quantum computing technology.
−Removed: • We may be unable to reduce the cost per qubit sufficiently, which may prevent us from pricing our quantum systems competitively.
−Removed: • The quantum computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solution does not drive commercial engagement, the growth of our business will be harmed.
• If our computers fail to achieve a broad quantum advantage, our business, financial condition and future prospects may be harmed.
−Removed: • We have and may continue to face supply chain issues that could delay the introduction of our product and negatively impact our business and operating results.
−Removed: • If we cannot successfully execute on our strategy or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed.
−Removed: • Our products may not achieve market success, but will still require significant costs to develop.
−Removed: • We are highly dependent on our key employees who have specialized knowledge, and our ability to attract and retain senior management and other key employees is critical to our success.
+Added: • The quantum computing and networking industry is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers.
+Added: • The quantum computing and networking industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solution does not drive commercial engagement, the growth of our business will be harmed.
• We may not be able to accurately estimate the future supply and demand for our quantum computers, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue.
−Removed: • Much of our revenue is concentrated in a few customers, and if we lose any of these customers through contract terminations, acquisitions, or other means, our revenue may decrease substantially.
+Added: If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays.
• Our systems depend on the use of a particular isotope of an atomic element that provides qubits for our ion trap technology.
−Removed: If we are unable to procure these isotopically enriched atomic samples, or are unable to do so on a timely and cost-effective basis, and in sufficient quantities, we may incur significant costs or delays, which could negatively affect our operations and business.
−Removed: • If our quantum computing systems are not compatible with some or all industry-standard software and hardware in the future, our business could be harmed.
−Removed: • If we are unable to maintain our current strategic partnerships or we are unable to develop future collaborative partnerships, our future growth and development could be negatively impacted.
+Added: If we are unable to procure these isotopically enriched atomic samples, or are unable to do so on a timely and
+Added: cost-effective basis, and in sufficient quantities, we may incur significant costs or delays, which could negatively affect our operations and business.
+Added: • If we cannot successfully execute on our strategy, including in response to changing customer needs and new technologies and other market requirements, or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed.
• Our business depends on our customers’ abilities to implement useful quantum algorithms and sufficient quantum resources for their business.
−Removed: • Our future growth and success depend in part on our ability to sell effectively to government entities and large enterprises.
−Removed: • Contracts with government and state agencies are subject to a number of challenges and risks.
−Removed: • Our future growth and success depend on our ability to sell effectively to large customers.
+Added: If they are unable to do so, including due to their algorithmic challenge or other technical or personnel dilemmas, our growth may be negatively impacted.
+Added: • Much of our revenue is concentrated in a few customers, and if we lose any of these customers through contract terminations, acquisitions, or other means, our revenue may decrease substantially.
+Added: • Our future growth and success depends in part on our ability to sell effectively to government entities and large enterprises.
+Added: • Contracts with domestic and international government and state agencies are subject to a number of challenges and risks.
• If our information technology systems, data, or physical facilities, or those of third parties upon which we rely, are or were compromised, we could experience adverse business consequences resulting from such compromise.
−Removed: • Unfavorable conditions in our industry or the global economy, could limit our ability to grow our business and negatively affect our results of operations.
−Removed: • Government actions and regulations, such as tariffs and trade protection measures, may adversely impact our business, including our ability to obtain products from our suppliers.
• Because our success depends, in part, on our ability to expand sales internationally, our business will be susceptible to risks associated with international operations.
−Removed: • Licensing of intellectual property is of critical importance to our business.
+Added: • Contracts with government entities subject us to risks, including early termination, audits, investigations, sanctions and penalties.
• If we are unable to obtain and maintain patent protection for our products and technology, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our products and technology may be adversely affected.
Moreover, our trade secrets could be compromised, which could cause us to lose the competitive advantage resulting from these trade secrets.
−Removed: • We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies.
+Added: • We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs (including indemnification of third parties or costly licensing arrangements (if licenses are available at all)) and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies, which could result in a significant expenditure and otherwise harm our business.
• Some of our in-licensed intellectual property, including the intellectual property licensed from the University of Maryland and Duke University, has been conceived or developed through government-funded research and thus may be subject to federal regulations providing for certain rights for the U.S.
−Removed: government or imposing certain obligations on us and compliance with such regulations may limit our exclusive rights and our ability to contract with non-U.S.
+Added: government or imposing certain obligations on us, such as a license to the U.S.
+Added: government covered by such intellectual property, “march-in” rights, certain reporting requirements and a preference for U.S.-based companies, and compliance with such regulations may limit our exclusive rights and our ability to contract with non-U.S.
manufacturers.
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As a result of our limited operating history, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth.
−Removed: Our ability to generate revenues will largely be dependent on our ability to develop and produce quantum computers with increasing numbers of algorithmic qubits.
+Added: Our ability to generate revenues will largely be dependent on our ability to develop and produce quantum computers with increasing numbers of algorithmic qubits and to connect those quantum computers via quantum networks.
As a result, our scalable business model has not been formed and it is possible that neither our December 2020 forward-looking technical roadmap nor our latest technical roadmap will be realized as quickly as expected, or even at all.
−Removed: The development of our scalable business model will likely require the incurrence of a substantially higher level of costs than incurred to date, while our revenues will not substantially increase until more powerful, scalable computers are produced, which requires a number of technological advancements that may not occur on the currently anticipated timetable or at all.
+Added: The development of our scalable business model will likely require the incurrence of a substantially higher level of costs than incurred to date, while our revenues will not substantially increase until more powerful,
+Added: scalable computers are produced, which requires a number of technological advancements that may not occur on the currently anticipated timetable or at all.
As a result, our historical results should not be considered indicative of our future performance.
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There is no certainty these research and development milestones will be achieved as quickly as expected, or even at all.
−Removed: We have a history of operating losses and expect to incur significant expenses and continuing losses for the foreseeable future.
+Added: We have a history of operating losses and expect to incur significant expenses and continuing losses for the near future.
We have historically experienced net losses from operations.
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Even with significant production, such production may never become profitable.
−Removed: We expect the rate at which we will incur operating losses to be significantly higher in future periods as we, among other things, continue to incur significant expenses in connection with the design, development and construction of our quantum computers, and as we expand our research and development activities, invest in manufacturing capabilities, build up inventories of components for our quantum computers, increase our sales and marketing activities, develop our distribution infrastructure, and increase our general and administrative functions to support our growing operations and costs of being a public company.
+Added: We expect to continue to incur operating losses for the near future as we, among other things, continue to incur significant expenses in connection with the design, development and construction of our quantum computers, and as we expand our research and development activities, invest in manufacturing capabilities, build up inventories of components for our quantum computers, increase our sales and marketing activities, develop our distribution infrastructure, and increase our general and administrative functions to support our growing operations and costs of being a public company.
We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses.
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Our business model is unproven and may never allow us to cover our costs.
−Removed: We may not be able to scale our business quickly enough to meet customer and market demand, which could result in lower profitability or cause us to fail to execute on our business strategies.
+Added: We may not be able to scale our business quickly enough to meet customer and market demand, which could adversely affect our financial condition and results of operations or cause us to fail to execute on our business strategies.
In order to grow our business, we will need to continually evolve and scale our business and operations to meet customer and market demand.
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• maintain effective financial disclosure controls and procedures.
−Removed: Commercial production of quantum computers may never occur.
+Added: Commercial production of quantum computers or networks may never occur.
We have no experience in producing large quantities of our products and are currently constructing advanced generations of our products.
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We may not be able to cost-effectively manage production at a scale or quality consistent with customer demand in a timely or economical manner.
−Removed: Our ability to scale is dependent also upon components we must source from the optical, electronics and semiconductor industries.
+Added: Our ability to scale is dependent also upon components we must source from the optical, mechanical, electronics and semiconductor industries.
Shortages or supply interruptions in any of these components will adversely impact our ability to deliver revenues.
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Both of these factors would adversely impact scalability and costs of the ion trap system.
−Removed: If commercial production of our quantum computers commences, our products may contain defects in design and manufacture that may cause them to not perform as expected or that may require repair, recalls and design changes.
+Added: If commercial production of our quantum computers and networks commences, our products may contain defects in design and manufacture that may cause them to not perform as expected or that may require repair, recalls and design changes.
Our quantum computers are inherently complex and incorporate technology and components that have not been used for other applications and that may contain defects and errors, particularly when first introduced.
We have a limited frame of reference from which to evaluate the long-term performance of our products.
−Removed: There can be no assurance that we will be able to detect and fix any defects in our quantum computers prior to the sale to potential customers.
+Added: There can be no assurance that we will be able to detect and fix any defects in our quantum computers or networks prior to the sale to potential customers.
If our products fail to perform as expected, customers may delay deliveries, terminate further orders or initiate product recalls, each of which could adversely affect our sales and brand and could adversely affect our business, prospects and results of operations.
−Removed: If we cannot evolve and scale our business and operations effectively, we may not be able to execute our business strategies in a cost-effective manner and our business, financial condition, profitability and results of operations could be adversely affected.
−Removed: We may not manage growth effectively.
+Added: If we cannot evolve and scale our business and operations effectively, we may not be able to execute our business strategies in a cost-effective manner and our business, financial condition and results of operations could be adversely affected.
+Added: We may not manage our growth effectively.
If we fail to manage growth effectively, our business, results of operations and financial condition could be harmed.
9 unchanged sentences
Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities, which will result in less time being devoted to our management and growth.
−Removed: The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected.
−Removed: We have and we may be required to
−Removed: continue to expand our employee base and hire additional employees to support our operations as a public company, which will continue to increase our operating costs in future periods.
+Added: We have and we may be required to continue to expand our employee base and hire additional employees to support our operations as a public company, which will continue to increase our operating costs in future periods.
Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
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Our growth is dependent upon our ability to successfully scale up manufacturing of our products in sufficient quantity and quality, in a timely or cost-effective manner.
−Removed: Our growth is also dependent upon our ability to successfully market and sell quantum computing technology.
−Removed: We do not have experience with the mass distribution and sale of quantum computing technology.
+Added: Our growth is also dependent upon our ability to successfully market and sell quantum computing and networking technology.
+Added: We do not have experience with the mass distribution and sale of quantum computing and networking technology.
Our growth and long-term success will depend upon the development of our sales and delivery capabilities.
−Removed: Unforeseen issues associated with scaling up and constructing quantum computing technology at commercially viable levels, and selling our technology, could negatively impact our business, financial condition and results of operations.
+Added: Unforeseen issues associated with scaling up and constructing quantum computing and networking technology at commercially viable levels, and selling our technology, could negatively impact our business, financial condition and results of operations.
Moreover, because of our unique technology, our customers will require particular support and service functions, some of which are not currently available.
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There can be no assurance that our projections on which such targets are based will prove accurate or that the pace of growth or coverage of our customer infrastructure network will meet customer expectations.
−Removed: Failure to grow at rates similar to that of the quantum computing industry may adversely affect our operating results and ability to effectively compete within the industry.
+Added: Failure to grow at rates similar to that of the quantum computing and networking industry may adversely affect our operating results and ability to effectively compete within the industry.
Our operating and financial results forecast relies in large part upon assumptions and analyses we have developed.
3 unchanged sentences
• success and timing of development activity;
−Removed: • customer acceptance of our quantum computing systems;
−Removed: • breakthroughs in classical computing or other computing technologies that could eliminate the advantages of quantum computing systems rendering them less practical to customers;
+Added: • customer acceptance of our quantum computing and networking systems;
+Added: • breakthroughs in classical computing or other computing technologies that could eliminate the advantages of quantum computing and networking systems rendering them less practical to customers;
• competition, including from established and future competitors;
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Such financings may result in dilution to our stockholders, issuance of securities with priority as to liquidation and dividend and other rights more favorable than common stock, imposition of debt covenants and repayment obligations or other restrictions that may adversely affect our business.
−Removed: In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe that we have sufficient funds for current or future operating plans.
+Added: In addition, we may seek additional capital due to favorable market conditions or
+Added: strategic considerations even if we believe that we have sufficient funds for current or future operating plans.
Weakness and volatility in capital markets and the economy, in general or as a result of bank failures or macroeconomic conditions such as high inflation and interest rates, could limit our access to capital markets and increase our costs of borrowing.
3 unchanged sentences
We have incurred losses during our history, do not expect to become profitable in the near future and may never achieve profitability.
−Removed: To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all.
+Added: To the extent that we continue to generate losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all.
As of December 31, 2024, we had U.S.
federal and state net operating loss carryforwards of approximately $224.2 million and $148.1 million, respectively.
−Removed: Our net operating loss carryforwards are subject to review and possible adjustment by the Internal Revenue Service, and state tax authorities.
+Added: Our net operating loss carryforwards and other tax attributes are subject to review and possible adjustment by the Internal Revenue Service, and state tax authorities.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), our U.S.
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Producing quantum computers is a difficult undertaking.
−Removed: There are significant engineering challenges that we must overcome to build our quantum computers.
−Removed: We are still in the development stage and face significant challenges in completing development of our quantum computers and in producing quantum computers in commercial volumes.
−Removed: Some of the development challenges that could prevent the introduction of our quantum computers include, but are not limited to, failure to find scalable ways to flexibly manipulate qubits, failure to transition quantum systems to leverage low-cost, commodity optical technology, and failure to realize multicore quantum computer technology.
+Added: There are significant research, development, and manufacturing challenges that we must overcome to build our quantum computers.
+Added: We are still in the development stage and face significant challenges in developing quantum computers with sufficient performance and scale to meet the requirements of commercial use-cases and in producing quantum computers in commercial volumes.
+Added: Some of the development challenges that could prevent the introduction of our quantum computers include, but are not limited to, failure to find scalable ways to flexibly manipulate qubits, failure to increase their number, failure to transition quantum systems to leverage low-cost, commodity optical technology, and failure to realize multicore and multiple QPU quantum computer technology.
Additional development challenges we face include:
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• it could prove more challenging and take materially longer than expected to operate gates within a single ion trap with higher throughput while maintaining gate fidelity;
−Removed: • the photonic interconnect between ion traps could prove more challenging and take longer to perfect than currently expected.
−Removed: This would limit our ability to scale to a sufficiently large number of algorithmic qubits in a single system;
−Removed: • it could take longer to tune the qubits in a single ion trap, as well as preserve the stability of the qubits within a trap as we seek to maximize the total number of qubits within one trap;
+Added: • it could take longer to tune the qubits in a single ion trap, as well as preserve the stability of the qubits within a trap as we seek to optimize the total number of qubits within one trap;
• the gate speed in our technology could prove more difficult to improve than expected;
+Added: • the Reconfigurable Multi-Core Quantum Architecture (RMQA) could prove to be more challenging to develop than expected.
+Added: This would limit our ability to scale ion traps beyond single-core operation;
+Added: • the photonic interconnect technology used to connect ion traps could prove more challenging and take longer to perfect than currently expected.
+Added: This would limit our ability to scale to a sufficiently large number of qubits in a single system or network systems together;
• it could take longer to incorporate modular architectures for additional cross-processor computational strength than currently expected, limiting our ability to realize the benefits of multicore technology;
−Removed: • the scaling of fidelity with qubit number could prove poorer than expected, limiting our ability to achieve larger algorithmic qubits.
+Added: • the scaling of fidelity with qubit number could prove poorer than expected, limiting our ability to successfully run larger circuits or achieve commercial advantage.
In addition, we will need to develop the manufacturing process necessary to make these quantum computers in high volume.
−Removed: We have not yet validated a manufacturing process or acquired the tools or processes necessary to produce high volumes of our quantum computers that meet all commercial requirements.
+Added: We have not yet validated a manufacturing process nor acquired the tools, processes, or support functions necessary to produce high volumes of our quantum computers that meet all commercial requirements.
If we are not able to overcome these manufacturing hurdles in building our quantum computers, our business is likely to fail.
Even if we complete development and achieve volume production of our quantum computers, if the cost, performance characteristics or other specifications of the quantum computer fall short of our projections, our business, financial condition and results of operations would be adversely affected.
−Removed: The quantum computing industry is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers.
−Removed: The markets in which we operate are rapidly evolving and highly competitive.
−Removed: As these markets continue to mature and new technologies and competitors enter such markets, we expect competition to intensify.
−Removed: Our current competitors include (among others):
−Removed: • large, well-established tech companies that generally compete in all of our markets, including Google, Microsoft, Amazon, Intel and IBM;
−Removed: • countries such as China, Russia, Canada, Australia and the United Kingdom, and those in the European Union and we believe additional countries in the future;
−Removed: • less-established public and private companies with competing technology, including companies located outside the United States;
−Removed: • new or emerging entrants seeking to develop competing technologies.
−Removed: We compete based on various factors, including technology, price, performance, multi-cloud availability, brand recognition and reputation, customer support and differentiated capabilities, including ease of administration and use, scalability and reliability, data governance and security.
−Removed: Many of our competitors have substantially greater brand recognition, customer relationships, and financial, technical and other resources, including an experienced sales force and sophisticated supply chain management.
−Removed: They may be able to respond more effectively than us to new or changing opportunities, technologies, standards, customer requirements and buying practices.
−Removed: In addition, many countries are focused on developing quantum computing solutions either in the private or public sector and may subsidize quantum computers, which may make it difficult for us to compete.
−Removed: Many of these competitors do not face the same challenges we do in growing our business.
−Removed: In addition, other competitors might be able to compete with us by bundling their other products in a way that does not allow us to offer a competitive solution.
−Removed: Additionally, we must be able to achieve our objectives in a timely manner or quantum computing may lose ground to competitors, including competing technologies.
−Removed: Because there are a large number of market participants, including certain sovereign nations, focused on developing quantum computing technology, we must dedicate significant resources to achieving any technical objectives on the timelines established by our management team.
−Removed: Any failure to achieve objectives in a timely manner could adversely affect our business, operating results and financial condition.
−Removed: For all of these reasons, competition may negatively impact our ability to maintain and grow consumption of our platform or put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.
−Removed: We have experienced in the past, and could also suffer future disruptions, outages, defects and other performance and quality problems with our quantum computing systems, our private cloud, our research and development activities, our testbeds, our facilities, or with the public cloud, internet, and other infrastructure on which they rely.
+Added: We have experienced in the past, and could also suffer future disruptions, outages, defects and other performance and quality problems with our quantum computing systems, our private cloud, or other information systems, our research and development activities, our facilities, our other fixed assets, or with the public cloud, internet, and other infrastructure on which they rely.
Our business depends on our quantum computing systems to be available.
We have experienced, and may in the future further experience, disruptions, outages, defects and other performance and quality problems with our systems.
−Removed: We have also experienced, and may in the future further experience, disruptions, outages, defects and other performance and quality problems with the public cloud, internet, private data center providers, and other infrastructure like utility power, water supply, air conditioning, air compression, and other inputs on which our systems and their supporting services rely.
+Added: We have also experienced, and may in the future further experience, disruptions, outages, defects and other performance and quality problems with the public cloud, internet, private data center providers, facilities in which we build and deploy our systems and technology, and other infrastructure like utility power, water supply, air conditioning, air compression, and other inputs on which our systems and their supporting services rely.
These problems can be caused by a variety of factors, including software or firmware updates, vulnerabilities and defects in proprietary software and open-source software, hardware components, human error or misconduct, capacity constraints, design limitations, denial of service attacks or other security-related incidents, foreign objects or debris, weather, construction, supply chain events, or accidents and other force majeure.
We do not have a contractual right with our public cloud providers that compensates us for any losses due to availability interruptions in the public cloud.
−Removed: Any disruptions, outages, defects and other performance and quality problems with our quantum computing systems or with the public cloud, internet, and other infrastructure on which they rely, could result in reduced use of our systems, increased expenses, including service credit obligations, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.
+Added: Any disruptions, outages, defects and other performance and quality problems with our quantum computing systems or with the public cloud, internet, and other information systems and infrastructure on which they rely, could result in reduced use of our systems, increased expenses, delayed delivery under our contractual commitments, required provision of service credits, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.
Even if we are successful in developing quantum computing systems and executing our strategy, competitors in the industry may achieve technological breakthroughs that render our quantum computing systems obsolete or inferior to other products.
−Removed: Our continued growth and success depend on our ability to innovate and develop quantum computing technology in a timely manner and effectively market these products.
+Added: Our continued growth and success depend on our ability to innovate and develop quantum computing and networking technology in a timely manner and effectively market these products.
Without timely innovation and development, our quantum computing solutions could be rendered obsolete or less competitive by changing customer preferences or because of the introduction of a competitor’s newer technologies.
2 unchanged sentences
Any technological breakthroughs that render our technology obsolete or inferior to other products could have a material effect on our business, financial condition or results of operations.
−Removed: We may be negatively impacted by any obsolescence of earlier generations of our quantum computing technology.
+Added: We may be negatively impacted by any early obsolescence of our quantum computing technology.
We depreciate the cost of our quantum computing systems over their expected useful lives.
1 unchanged sentence
Moreover, we may need to alter the way in which we deliver our products due to changes in engineering and production expertise and efficiency.
+Added: If our quantum computing systems are not compatible with some or all industry-standard software and hardware in the future, our business could be harmed.
+Added: Programming for quantum computing requires unique tools, software, hardware, and development environments.
+Added: We have focused our efforts on creating quantum computing hardware, the system control platform for such hardware and a suite of low-level software programs that optimize execution of quantum algorithms on our hardware.
+Added: Further up the stack, we rely on third parties to create and advance software, standards, specifications, applications, hardware and services that enable these systems to integrate into
+Added: various environments and be utilized towards various customer use cases.
+Added: Full utilization of our quantum computing solutions may depend on these third-party software, standards, specifications, applications, hardware and services, which may not be compatible with our quantum computing solutions and their development, or may not be available to us or our customers on commercially reasonable terms, or at all, which could harm our business.
+Added: If our customers are unable to achieve compatibility between other software and hardware and our hardware, it could impact our relationships with such customers or with customers, generally, if the incompatibility is more widespread.
+Added: In addition, the mere announcement of an incompatibility problem relating to our products with higher level software tools could cause us to suffer reputational harm and/or lead to a loss of customers.
+Added: Any adverse impacts from the incompatibility of our quantum computing solutions could adversely affect our business, operating results and financial condition.
We may be unable to reduce the cost per qubit sufficiently, which may prevent us from pricing our quantum systems competitively.
2 unchanged sentences
If these cost savings do not materialize, the cost per qubit may be higher than projected, making our quantum computing solution less competitive than those produced by our competitors, which could have a material adverse effect on our business, financial condition or results of operations.
−Removed: An element of our business is currently dependent upon our relationship with our cloud providers.
−Removed: There are no assurances that we will be able to commercialize quantum computers from our relationships with cloud providers.
−Removed: We currently offer our QCaaS on public clouds provided by AWS’s Amazon Braket, Microsoft’s Azure Quantum, and the Google Cloud Marketplace.
−Removed: The companies that own these public clouds have internal quantum computing efforts that are competitive to our technology.
−Removed: There is risk that one or more of these public cloud providers could use their respective control of their public clouds to embed innovations or privileged interoperating capabilities in competing products, bundle competing products, provide us
−Removed: with unfavorable pricing, leverage their public cloud customer relationships to exclude us from opportunities, and treat us and our end users differently with respect to terms and conditions or regulatory requirements than they would treat their similarly situated customers.
−Removed: Further, they have the resources to acquire or partner with existing and emerging providers of competing technology and thereby accelerate adoption of those competing technologies.
−Removed: All of the foregoing could make it difficult or impossible for us to provide products and services that compete favorably with those of the public cloud providers.
−Removed: Any material change in our contractual and other business relationships with our public cloud providers could result in harm to our brand and reputation and reduced use of our systems, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: The quantum computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solution does not drive commercial engagement, the growth of our business will be harmed.
−Removed: The nascent market for quantum computers is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing customer demands and behaviors.
−Removed: If the market for quantum computers in general does not develop as expected, or develops more slowly than expected, our business, prospects, financial condition and operating results could be harmed.
−Removed: In addition, our growth and future demand for our products is highly dependent upon the adoption by developers and customers of quantum computers, as well as on our ability to demonstrate the value of quantum computing to our customers.
−Removed: Delays in future generations of our quantum computers or technical failures at other quantum computing companies could limit market acceptance of our solution.
−Removed: Negative publicity concerning our solution or the quantum computing industry as a whole could limit market acceptance of our solution.
−Removed: We believe quantum computing will solve many large-scale problems.
−Removed: However, such problems may never be solvable by quantum computing technology.
−Removed: If our clients and partners do not perceive the benefits of our solution, or if our solution does not drive customer engagement, then our market may not develop at all, or it may develop slower than we expect.
−Removed: If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations.
−Removed: If progress towards quantum advantage ever slows relative to expectations, it could adversely impact revenues and customer confidence to continue to pay for testing, access and “quantum readiness.” This would harm or even eliminate revenues in the period before quantum advantage.
If our computers fail to achieve a broad quantum advantage, our business, financial condition and future prospects may be harmed.
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If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations.
+Added: An element of our business is currently dependent upon our relationship with our cloud providers.
+Added: There are no assurances that we will be able to commercialize quantum computers from our relationships with cloud providers.
+Added: We currently offer our QCaaS on public clouds provided by AWS’s Amazon Braket, Microsoft’s Azure Quantum, and the Google Cloud Marketplace.
+Added: The companies that own these public clouds have internal quantum computing efforts that are competitive to our technology.
+Added: There is risk that one or more of these public cloud providers could use their respective control of their public clouds to embed innovations or privileged interoperating capabilities in competing products, bundle competing products, provide us with unfavorable pricing, leverage their public cloud customer relationships to exclude us from opportunities, and treat us and our end users differently with respect to terms and conditions or regulatory requirements than they would treat their similarly situated customers.
+Added: Further, they have the resources to acquire or partner with existing and emerging providers of competing technology and thereby accelerate adoption of those competing technologies.
+Added: All of the foregoing could make it difficult or impossible for us to provide products and services that compete favorably with those of the public cloud providers.
+Added: Any material change in our contractual and other business relationships with our public cloud providers could result in harm to our brand and reputation and reduced use of our systems, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: The quantum computing and networking industry is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers.
+Added: The markets in which we operate are rapidly evolving and highly competitive.
+Added: As these markets continue to mature and new technologies and competitors enter such markets, we expect competition to intensify.
+Added: Our current competitors include (among others):
+Added: • large, well-established tech companies that generally compete in all of our markets, including Amazon, Google, IBM, Intel, and Microsoft;
+Added: • countries such as China, Russia, Australia, Canada, the United Kingdom, and certain countries in the European Union;
+Added: • less-established public and private companies with competing technology, including companies located outside the United States;
+Added: • new or emerging entrants seeking to develop competing technologies.
+Added: We compete based on various factors, including technology, price, performance, multi-cloud availability, brand recognition and reputation, customer support and differentiated capabilities, including ease of administration and use, scalability and reliability, data governance and security.
+Added: Many of our competitors have substantially greater brand recognition, customer relationships, and financial, technical and other resources, including an experienced sales force and sophisticated supply chain management.
+Added: They may be able to respond more effectively than us to new or changing opportunities, technologies, standards, customer requirements and buying practices or to cross-subsidize their quantum offerings from their other higher margin operations.
+Added: In addition, many countries are focused on developing quantum solutions either in the private or public sector and may subsidize quantum computers or quantum networks, which may make it difficult for us to compete.
+Added: Many of these competitors do not face the same challenges we do in growing our business.
+Added: In addition, other competitors might be able to compete with us by bundling their other products in a way that does not allow us to offer a competitive solution.
+Added: Additionally, we must be able to achieve our objectives in a timely manner or quantum computing and networking may lose ground to competitors, including competing technologies.
+Added: Because there are a large number of market participants, including certain sovereign nations, focused on developing quantum computing and networking technology, we must dedicate significant resources to achieving any technical objectives on the timelines established by our management team.
+Added: Any failure to achieve objectives in a timely manner could adversely affect our business, operating results and financial condition.
+Added: For all of these reasons, competition may negatively impact our ability to maintain and grow consumption of our platform or put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.
+Added: The quantum computing and networking industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solution does not drive commercial engagement, the growth of our business will be harmed.
+Added: The nascent market for quantum computers and networks is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing customer demands and behaviors.
+Added: If the market for quantum computers and networks in general does not develop as expected, or develops more slowly than expected, our business, prospects, financial condition and operating results could be harmed.
+Added: In addition, our growth and future demand for our products is highly dependent upon the adoption of quantum computers and networks and commercially useful quantum algorithms to run on quantum computers by developers and customers, as well as on our ability to demonstrate the value of quantum computing to our customers.
+Added: Delays in future generations of our quantum computers or technical failures at other quantum computing and networking companies could limit market acceptance of our solution.
+Added: Negative publicity concerning our solution or the quantum computing and networking industry as a whole could limit market acceptance of our solution.
+Added: We believe quantum computing will solve many large-scale problems.
+Added: However, such problems may never be solvable by quantum computing technology, or may only be solvable by systems that are more technologically mature than we currently expect.
+Added: If our clients and partners do not perceive the benefits of our solution, or if our solution does not drive customer engagement, then our market may not develop at all, or it may develop slower than we expect.
+Added: If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations.
+Added: If progress towards quantum advantage ever slows relative to expectations, it could adversely impact revenues and customer confidence to continue to pay for testing, access and “quantum readiness.” This would adversely affect revenues in the period before quantum advantage.
We have and may continue to face supply chain issues that could delay the introduction of our product and negatively impact our business and operating results.
−Removed: We are reliant on third-party suppliers for components necessary to develop and manufacture our quantum computing solutions.
+Added: We are reliant on third-party suppliers, including sole source suppliers, for components necessary to develop and manufacture our quantum computing and networking solutions.
As our business grows, we must continue to scale and adapt our supply chain or it could have an adverse impact on our business.
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• our inability to enter into agreements with suppliers on commercially reasonable terms, or at all;
−Removed: • difficulties of suppliers ramping up their supply of materials to meet our requirements;
+Added: • inability of suppliers to mature their operations in line with our growth and to meet our evolving requirements;
• a significant increase in the price of one or more components, including due to industry consolidation occurring within one or more component supplier markets or as a result of decreased production capacity at manufacturers;
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• intentional sabotage by a malicious actor or actors;
−Removed: • significantly increased freight charges, or raw material costs and other expenses associated with our business;
+Added: • significantly increased raw material costs and other expenses associated with our business;
+Added: • difficulty obtaining raw materials that meet our quality standards;
+Added: • significantly increased freight charges, disruptions in shipping or reduced availability of freight transportation;
+Added: • imposition of, or increase in, tariffs, trade protection measures, or import and export controls by the United States or other countries;
+Added: • reduced access to raw materials due to suppliers entering into exclusivity arrangements with our competitors;
• other factors beyond our control or that we do not presently anticipate, could also affect our suppliers’ ability to deliver components to us on a timely basis;
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• a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs.
−Removed: We have experienced supply chain issues in the past as a result of COVID-19.
−Removed: If any of the aforementioned factors were to materialize, it could cause us to delay or halt production of our quantum computing solutions and/or entail higher manufacturing costs, any of which could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships.
−Removed: If we cannot successfully execute on our strategy, including in response to changing customer needs and new technologies and other market requirements, or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed.
−Removed: The quantum computing market is characterized by rapid technological change, changing user requirements, uncertain product lifecycles and evolving industry standards.
−Removed: We believe that the pace of innovation will continue to accelerate as technology changes and different approaches to quantum computing mature on a broad range of factors, including system architecture, error correction, performance and scale, ease of programming, user experience, markets addressed, types of data processed, and data governance and regulatory compliance.
−Removed: Our future success depends on our ability to continue to innovate and increase customer adoption of our quantum computer.
−Removed: If we are unable to enhance our quantum computing system to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, with better functionality, more conveniently, or more securely than our platform, our business, financial condition and results of operations could be adversely affected.
−Removed: Our products may not achieve market success, but will still require significant costs to develop.
−Removed: We believe that we must continue to dedicate significant resources to our research and development efforts before knowing whether there will be market acceptance of our quantum computing technologies.
−Removed: Furthermore, the technology for our products is new, and the performance of these products is uncertain.
−Removed: Our quantum computing technologies could fail to attain sufficient market acceptance, if at all, for many reasons, including:
−Removed: • pricing and the perceived value of our systems relative to its cost;
−Removed: • delays in releasing quantum computers with sufficient performance and scale to the market;
−Removed: • failure to produce products of consistent quality that offer functionality comparable or superior to existing or new products;
−Removed: • ability to produce products fit for their intended purpose;
−Removed: • failures to accurately predict market or customer demands;
−Removed: • defects, errors or failures in the design or performance of our quantum computing systems;
−Removed: • negative publicity about the performance or effectiveness of our systems;
−Removed: • strategic reaction of companies that market competitive products;
−Removed: • the introduction or anticipated introduction of competing technology.
−Removed: To the extent we are unable to effectively develop and market a quantum computing system to address these challenges and attain market acceptance, our business, operating results and financial condition may be adversely affected.
−Removed: In earlier stages of our life cycle, we were highly dependent on our key employees, including our founders.
−Removed: As we are evolving from being a science company to an engineering company, our ability to attract and retain senior management and other key employees, such as quantum physicists and other key technical employees, is critical to our success.
−Removed: If we fail to retain talented, highly-qualified senior management, engineers and other key employees or attract them when needed, such failure could negatively impact our business.
−Removed: Our future success is highly dependent on our ability to attract and retain our executive officers, key employees and other qualified personnel, including our employees who have specialized knowledge.
−Removed: As we build our brand and become more well known, there is increased risk that competitors or other companies may seek to hire our personnel.
−Removed: The loss of the services provided by these individuals could adversely impact the achievement of our business strategy.
−Removed: These individuals could leave our employment at any time, as they are “at will” employees.
−Removed: A loss of one of our key employees, particularly to a competitor, could also place us at a competitive disadvantage.
−Removed: Effective succession planning is important to our long-term success, and failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.
−Removed: Our future success also depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees.
−Removed: The market for highly skilled workers and leaders in the quantum computing industry is extremely competitive.
−Removed: In particular, hiring qualified personnel specializing in engineering, software development and sales, as well as other technical staff and research and development personnel is critical to our business and the development of our quantum computing systems.
−Removed: Some of these professionals are hard to find and we may encounter significant competition in our efforts to hire them.
−Removed: Many of the other companies with which we compete for qualified personnel have greater financial and other resources than we do.
−Removed: The effective operation of our supply chain, including the acquisition of critical components and materials, the development of our quantum computing technologies, the commercialization of our quantum computing technologies and the effective operation of our managerial and operating systems all depend upon our ability to attract, train and retain qualified personnel in the aforementioned specialties.
−Removed: Additionally, changes in immigration and work permit laws and regulations or the administration or interpretation of such laws or regulations could impair our ability to attract and retain highly qualified employees.
−Removed: If we cannot attract, train and retain qualified personnel, in this competitive environment, we may experience delays in the development of our quantum computing technologies and be otherwise unable to develop and grow our business as projected, or even at all.
+Added: We have experienced supply chain issues in the past.
+Added: If any of the aforementioned factors were to materialize, it could cause us to delay or halt production of our quantum computing and networking solutions and/or entail higher manufacturing costs, any of which could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships.
We may not be able to accurately estimate the future supply and demand for our quantum computers, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue.
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It is difficult to predict our future revenues and appropriately budget for our expenses, and we may have limited insight into trends that may emerge and affect our business.
−Removed: We anticipate being required to provide forecasts of our demand to our current and future suppliers prior to the scheduled delivery of products to potential customers.
−Removed: Currently, there is very little historical basis for making judgments on the demand for our quantum computers or our ability to develop, manufacture, and deliver quantum computers, or our profitability, if any, in the future.
+Added: From time to time we have been required to provide, and we anticipate being required to provide more consistently in the future, forecasts of our demand to our current and future suppliers prior to the scheduled delivery of products to potential customers.
+Added: Currently, there is very little historical basis for making judgments on the demand for our quantum computers or our ability to design, develop, manufacture, and deliver quantum computers, or our profitability, if any, in the future.
If we overestimate our requirements, our suppliers may have excess inventory, which indirectly would increase our costs.
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If we fail to order sufficient quantities of product components in a timely manner, the delivery of quantum computers and related compute time to our potential customers could be delayed.
−Removed: Additionally, if we fail to accurately forecast customer demand, we may experience an excess or obsolescence of materials and supplies.
+Added: We have previously failed, and may in the future fail, to accurately forecast customer demand, which resulted in, and may in the future result in, an excess or obsolescence of materials and supplies.
Excess or obsolete materials and supplies may result in write-downs or write-offs.
−Removed: Our inability to effectively manage our forecasted supply and demand and on hand materials and supplies could adversely impact our results of operations and financial condition, and could result in loss of revenue, increased costs, or delays that could adversely impact customer success.
+Added: If we fail to effectively manage our forecasted supply and demand and on hand materials and supplies, our results of operations and financial condition could be adversely impacted, and it could result in loss of revenue, increased costs, or delays that could adversely impact customer success.
Our systems depend on the use of a particular isotope of an atomic element that provides qubits for our ion trap technology.
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While we are currently looking to engage additional suppliers, there is no guarantee we will be able to establish or maintain relationships with such additional suppliers on terms satisfactory to us.
−Removed: Reliance on any single supplier
−Removed: increases the risks associated with being unable to obtain the necessary atomic samples because the supplier may have laboratory constraints, can be subject to unanticipated shutdowns and/or may be affected by natural disasters and other catastrophic events.
+Added: Reliance on any single supplier increases the risks associated with being unable to obtain the necessary atomic samples because the supplier may have laboratory constraints, can be subject to unanticipated shutdowns and/or may be affected by natural disasters and other catastrophic events.
Some of these factors may be completely out of our and our suppliers’ control.
Failure to acquire sufficient quantities of the necessary isotopically enriched atomic samples in a timely or cost-effective manner could materially harm our business.
−Removed: If our quantum computing systems are not compatible with some or all industry-standard software and hardware in the future, our business could be harmed.
−Removed: Programming for quantum computing requires unique tools, software, hardware, and development environments.
−Removed: We have focused our efforts on creating quantum computing hardware, the system control platform for such hardware and a suite of low-level software programs that optimize execution of quantum algorithms on our hardware.
−Removed: Further up the software stack, we rely on third parties to create and advance higher level quantum programming languages, SDKs, and application libraries.
−Removed: Such third-party software and programming is essential to operating our quantum computing products and services.
−Removed: Our quantum computing solutions are designed today to be compatible with most major quantum SDKs, including Qiskit, Cirq, Q# QDK, and OpenQASM, all of which are open source.
−Removed: If a proprietary (not open source) software toolset became the standard for quantum application development in the future by a competitor, usage of our hardware might be limited as a result, which would have a negative impact on us.
−Removed: Similarly, if a piece of hardware or other quantum tool became a necessary component for quantum computing (for instance, quantum networking) and we cannot integrate with it (as we have thus far), the result might have a negative impact on us and our anticipated growth.
−Removed: If our customers are unable to achieve compatibility between other software and hardware and our hardware, it could impact our relationships with such customers or with customers, generally, if the incompatibility is more widespread.
−Removed: In addition, the mere announcement of an incompatibility problem relating to our products with higher level software tools could cause us to suffer reputational harm and/or lead to a loss of customers.
−Removed: Any adverse impacts from the incompatibility of our quantum computing solutions could adversely affect our business, operating results and financial condition.
+Added: Our products may not achieve market success, but will still require significant costs to develop.
+Added: We believe that we must continue to dedicate significant resources to our research and development efforts before knowing whether there will be market acceptance of our quantum computing and networking technologies.
+Added: Furthermore, the technology for our products is new, and the performance of these products is uncertain.
+Added: Our quantum computing and networking technologies could fail to attain sufficient market acceptance, if at all, for many reasons, including:
+Added: • pricing and the perceived value of our systems relative to its cost;
+Added: • delays in releasing quantum computers with sufficient performance and scale to the market;
+Added: • failure to produce products of consistent quality that offer functionality comparable or superior to existing or new products;
+Added: • ability to produce products fit for their intended purpose;
+Added: • failures to accurately predict market or customer demands;
+Added: • defects, errors or failures in the design or performance of our quantum computing systems;
+Added: • negative publicity about the performance or effectiveness of our systems;
+Added: • strategic reaction of companies that market competitive products;
+Added: • the introduction or anticipated introduction of competing technology.
+Added: To the extent we are unable to effectively develop and market a quantum computing system to address these challenges and attain market acceptance, our business, operating results and financial condition may be adversely affected.
+Added: If we cannot successfully execute on our strategy, including in response to changing customer needs and new technologies and other market requirements, or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed.
+Added: The quantum computing and networking market is characterized by rapid technological change, changing user requirements, uncertain product lifecycles and evolving industry standards.
+Added: We believe that the pace of innovation will continue to accelerate as technology changes and different approaches to quantum computing mature on a broad range of factors, including system architecture, error correction, performance and scale, integration with classical computing resources, ease of programming, user experience, markets addressed, types of data processed, and data governance and regulatory compliance.
+Added: Our future success depends on our ability to continue to innovate and increase customer adoption of our quantum computers and networks.
+Added: If we are unable to enhance our quantum computing system to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, with better functionality, more conveniently, or more securely than our platform, our business, financial condition and results of operations could be adversely affected.
If we are unable to maintain our current strategic partnerships or we are unable to develop future collaborative partnerships, our future growth and development could be negatively impacted.
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Our business depends on our customers’ abilities to implement useful quantum algorithms and sufficient quantum resources for their business.
−Removed: If they are unable to do so due to the nature of their algorithmic challenge or other technical or personnel dilemmas, our growth may be negatively impacted.
+Added: If they are unable to do so, including due to their algorithmic challenge or other technical or personnel dilemmas, our growth may be negatively impacted.
We have entered into, and may enter into, contracts, partnerships and other arrangements with customers to develop, test and run quantum algorithms specific to their business.
1 unchanged sentence
These arrangements are also dependent on the availability of time and resources to develop and optimize these algorithms.
−Removed: The development and optimization of these algorithms is reliant on employing sufficient talent familiar with quantum computing, a unique skill that requires special training and education.
+Added: The development and optimization of these algorithms is reliant on employing sufficient talent familiar with quantum computing and quantum networking, unique skills that require special training and education.
If the market fails to train a sufficient number of engineers, researchers and other key quantum personnel, our customers may not find sufficient talent to partner with us to solve these problems.
To the extent our customers are unable to effectively develop or utilize resources to advance algorithmic-use cases, our business, operating results and financial condition may be adversely impacted.
−Removed: Much of our revenue is concentrated in a few customers, and if we lose any of these customers through contract terminations or acquisitions, our revenue may decrease substantially.
−Removed: We have a high degree of revenue concentration, and we expect to continue to experience significant revenue concentration for the foreseeable future.
+Added: We are highly dependent on our key employees who have specialized knowledge, and our ability to attract and retain senior management and other key employees is critical to our success.
+Added: Our future success is highly dependent on our ability to attract and retain our executive officers, key employees and other qualified personnel, including our employees who have specialized knowledge and our employees from acquired businesses.
+Added: We have experienced in the past, and as we build our brand and become more well known, there is increased risk that we may further experience in the future, competitors or other companies hiring our personnel.
+Added: The loss of the services provided by these individuals could adversely impact the achievement of our business strategy.
+Added: These individuals could leave our employment at any time, as they are “at will” employees.
+Added: A loss of one of our key employees, particularly to a competitor, could also place us at a competitive disadvantage.
+Added: Effective succession planning is important to our long-term success, and failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.
+Added: Our future success also depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees.
+Added: The market for highly skilled workers and leaders in the quantum computing industry is extremely competitive.
+Added: In particular, hiring qualified personnel specializing in engineering, software development and sales, as well as other technical staff and research and development personnel is critical to our business and the development of our quantum computing and networking systems.
+Added: Some of these professionals are hard to find and we may encounter significant competition in our efforts to hire them.
+Added: Many of the other companies with which we compete for qualified personnel have greater financial and other resources than we do.
+Added: The effective operation of our supply chain, including the acquisition of critical components and materials, the development of our quantum computing and networking technologies, the commercialization of our quantum computing and networking technologies and the effective operation of our managerial and operating systems all depend upon our ability to attract, train and retain qualified personnel in the aforementioned specialties.
+Added: Additionally, changes in immigration and work permit laws and regulations or the administration or interpretation of such laws or regulations, including changes following the recent U.S.
+Added: federal elections, could impair our ability to attract and retain highly qualified employees.
+Added: If we cannot attract, train and retain qualified personnel, in this competitive environment, we may experience delays in the development of our quantum computing and networking technologies and be otherwise unable to develop and grow our business as projected, or even at all.
+Added: Much of our revenue is concentrated in a few customers, and if we lose any of these customers through contract terminations, acquisitions, or other means, our revenue may decrease substantially.
+Added: We have a high degree of revenue concentration, and we expect to continue to experience significant revenue concentration for the foreseeable future, including increasing revenue concentration among our major customers in the near term.
Our customers’ demand for our products may fluctuate due to factors beyond our control.
A disruption in our relationship with any of our customers could adversely affect our business.
−Removed: Our inability to meet our customers’ requirements or to qualify our products with them could adversely impact our revenue.
+Added: Our inability to meet our customers’ requirements or to qualify our products with them could
+Added: adversely impact our revenue.
The loss of, or restrictions on our ability to sell to, one or more of our major customers, or any significant reduction in orders from customers could have a material adverse effect on our operating results and financial condition.
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These risks include, but are not limited to, (i) increased purchasing power and leverage held by such customers in negotiating contractual arrangements with us and (ii) longer sales cycles and the associated risk that substantial time and resources may be spent on a potential end-customer that elects not to purchase our solutions.
−Removed: Sales to government agencies are typically under fixed fee development contracts, which involve additional risks.
+Added: Sales to government agencies can be priced as fixed fee development contracts, which involve additional risks.
+Added: Cost-plus and time-and-materials contracts can adversely affect our results of operations and financial condition if our costs do not qualify as allowable costs under applicable regulations.
In addition, government contracts generally include the ability of government agencies to terminate early which, if exercised, would result in a lower contract value and lower than anticipated revenues generated by such arrangement.
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All of these factors can add further risk to business conducted with these potential customers and could lead to lower revenue results than originally anticipated.
−Removed: Additionally, changes in government defense spending could have adverse consequences on our financial position, results of operations and business.
−Removed: Certain current contracts and our anticipated future revenues from the U.S.
−Removed: government are expected to result from contracts awarded under various U.S.
+Added: Additionally, changes in government spending could have adverse consequences on our financial position, results of operations and business.
+Added: Our anticipated future revenues from the U.S.
+Added: government result from contracts awarded under various U.S.
government programs.
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government budget and appropriation decisions and processes, which are driven by numerous factors, including geo-political events and macroeconomic conditions.
−Removed: The overall level of U.S.
−Removed: defense spending increased in recent years for numerous reasons.
−Removed: Significant reduction in defense spending could have long-term consequences for our size and structure.
−Removed: In addition, reduction in government priorities and requirements could impact the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition.
+Added: Significant reduction in U.S.
+Added: government spending could have long-term consequences for our size and structure.
+Added: In addition, changes in government priorities and requirements could impact the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition.
Contracts with domestic and international government and state agencies are subject to a number of challenges and risks.
Contracts with domestic and international government and state agencies are subject to a number of challenges and risks.
−Removed: The bidding process for government contracts can be highly competitive, expensive and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate revenue.
+Added: The bidding process for government contracts can be highly competitive, expensive and time-consuming, often requiring significant up front time and expense without any assurance that these efforts will generate revenue.
We also must comply with both local and international laws and regulations relating to the formation, administration, and performance of contracts, which provide public sector customers rights, many of which are not typically found in commercial contracts.
−Removed: For example, in 2021, the U.S.
−Removed: House of Representatives introduced the Quantum Cybersecurity Preparedness Act, signaling fresh focus on the need for U.S.
−Removed: investment in quantum computing—both to protect against quantum-powered attacks from foreign actors and to develop quantum computing strength on the domestic front.
−Removed: In May 2022, the Biden administration announced directives to support U.S.
−Removed: leadership in quantum computing, and in September 2022, the National Security Administration (NSA) shared guidance on the importance of cybersecurity readiness against would-be adversaries developing quantum systems.
−Removed: In September 2023, the U.S.
−Removed: Department of Defense increased its funding for the CHIPS Act, which will directly advance U.S.
−Removed: technology in many areas, including quantum.
−Removed: Any changes to government regulations as a result of this demonstrated focus on quantum computing could affect our ability to enter into, or the profitability of, contracts with government entities.
−Removed: In addition, our perceived relationship with the U.S.
+Added: Any changes to the government regulations applicable to government contracts could affect our ability to enter into, or the profitability of, contracts with government entities.
+Added: In addition, other parties’ perceptions of our relationship with the U.S.
government could adversely affect our business prospects in certain non-U.S.
geographies or with certain non-U.S.
−Removed: Conversely, our perceived relationship with non-U.S.
+Added: Conversely, other parties’ perceptions of our relationship with non-U.S.
governments or government entities could adversely affect our business prospects with the U.S.
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• influence by, or competition from, third parties with respect to pending, new, or existing contracts with government customers;
−Removed: • changes in legal obligations or political or social attitudes with respect to security or data privacy issues;
+Added: • changes in legal obligations or political or social attitudes with respect to security or privacy issues;
• potential delays or changes in the government appropriations or procurement processes, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns;
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If our information technology systems, data, or physical facilities, or those of third parties upon which we rely, are or were compromised, we could experience adverse business consequences resulting from such compromise.
−Removed: In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “Processing”) personal data and other sensitive information, including intellectual property, proprietary and confidential business data, trade secrets, sensitive third-party data, business plans, transactions, and financial information of our own, our partners, our vendors and their own supply chains, our customers, or other third parties (collectively, “Sensitive Data”).
−Removed: We and the third parties upon which we rely may process Sensitive Data, and, as a result, we and the third parties upon which we rely face a variety of evolving threats to our information technology systems, data, and physical facilities (such as those where our quantum computers are stored), including but not limited to ransomware attacks or advanced persistent threats, which could cause security incidents.
−Removed: Additionally, Sensitive Data could be leaked, disclosed or revealed as a result of or in connection with our employee’s, personnel’s, or vendor’s use of generative AI technologies.
−Removed: Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our Sensitive Data and information
−Removed: technology systems, and those of the third parties upon which we rely.
+Added: In the ordinary course of business, we access, collect, receive, store, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, share, and otherwise process personal data and other sensitive information, including intellectual property, proprietary and confidential business data, trade secrets, sensitive third-party data, business plans, transactions, and financial information of our own, our partners, our vendors and their own supply chains, our customers, or other third parties (collectively, “Sensitive Data”).
+Added: We and the third parties upon which we rely process Sensitive Data, and, as a result, we and the third parties upon which we rely face a variety of evolving threats to our information technology systems, data, and physical facilities (such as those where our quantum computers are stored), including but not limited to ransomware attacks, advanced persistent threats, and other causes of security incidents.
+Added: Additionally, Sensitive Data could be leaked, disclosed or revealed as a result of or in connection with our employees', contractors', consultants', affiliates', or vendors' use of generative artificial intelligence (“AI”) technologies.
+Added: Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our Sensitive Data and information technology systems, and those of the third parties upon which we rely.
Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
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Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state and nation-state-supported actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
−Removed: During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to distribute our services.
−Removed: We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
−Removed: In particular, severe ransomware attacks are becoming increasingly prevalent and could lead to significant interruptions in our operations, loss of Sensitive Data and income, reputational harm, and diversion of funds.
+Added: During times of war and other geopolitical tensions or conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to distribute our services.
+Added: We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss or unavailability of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
+Added: In particular, severe ransomware attacks are becoming increasingly prevalent and could lead to significant interruptions in our operations, loss or unavailability of Sensitive Data and loss of income, reputational harm, and diversion of funds.
Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
−Removed: Additionally, we are incorporated into the supply chain of a large number of companies worldwide and, as a result, if our services are compromised, a significant number or, in some instances, all of our customers and their data could be simultaneously affected.
+Added: Additionally, we are incorporated into the supply chains of companies worldwide and, as a result, if our services are compromised, a significant number or, in some instances, all of our customers and their data could be simultaneously affected.
The potential liability and associated consequences we could suffer as a result of such a large-scale event could be catastrophic and result in irreparable harm.
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Our platform is built to be accessed through third-party cloud providers, such as AWS’s Amazon Braket, Microsoft’s Azure Quantum, and Google’s Cloud Marketplace, and we rely on these and other third-party service providers and technologies to operate critical business systems to process Sensitive Data in a variety of contexts, including, without limitation, other cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions.
−Removed: We may also rely on third-party service providers to provide other products, services, parts, or otherwise to operate our business.
−Removed: Our ability to monitor these third parties’ information security practices is limited.
−Removed: Although we understand our third-party cloud providers have implemented security measures designed to protect against various cybersecurity risks and vulnerabilities, these and other third parties may nevertheless not have adequate information security measures in place.
+Added: We also rely on third-party service providers to provide other products, services or parts, or otherwise to operate our business.
+Added: There can be no assurance that our third-party service providers’ security measures have been or will be effective to protect against various cybersecurity risks and vulnerabilities.
If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
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In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
−Removed: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our Sensitive Data (including proprietary information and intellectual property) or our information technology systems, or those of the
−Removed: third parties upon whom we rely.
+Added: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental access to, or acquisition, modification, destruction, loss, alteration, encryption, disclosure, or other processing of our Sensitive Data (including proprietary information and intellectual property) or our information technology systems, or those of the third parties upon whom we rely.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our services.
We may expend significant resources or modify our business activities to try to protect against security incidents.
−Removed: Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and Sensitive Data.
−Removed: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
+Added: Additionally, certain privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and Sensitive Data.
+Added: While we have implemented security measures designed to protect against security incidents and other interruptions, there can be no assurance that these measures will be effective.
We take steps to detect and remediate vulnerabilities in our information technology systems (including in our services), but we may not be able to detect and remediate all vulnerabilities because the threats and techniques used to exploit vulnerabilities change frequently and are often sophisticated in nature.
Therefore, such vulnerabilities could be exploited but may not be detected until after a security incident has occurred;
−Removed: and, we may not be able to anticipate or detect attacks or vulnerabilities, even after implementing these security measures.
+Added: and, we may not be able to anticipate or detect attacks or vulnerabilities.
These vulnerabilities pose material risks to our business.
Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.
−Removed: As a result, we may be unable to implement adequate preventative and responsive measures to stop or mitigate security breaches before or while they are occurring.
−Removed: Finally, incidents that may appear to be minor when assessed individually, may become material, at a later date, when considered in the aggregate.
−Removed: Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.
+Added: As a result, we may be unable to implement adequate preventative and responsive measures to stop or mitigate security incidents before or while they are occurring.
+Added: incidents that may appear to be minor when assessed individually, may become material, at a later date, when considered in the aggregate.
+Added: Applicable privacy and security obligations may require us to notify relevant stakeholders of security incidents.
Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
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These consequences may include:
−Removed: exposure of Sensitive Data (including intellectual property or confidential or proprietary information);
+Added: exposure, loss, unavailability, acquisition, or other unauthorized processing of Sensitive Data (including intellectual property or confidential or proprietary information);
government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
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Our efforts to prevent and overcome these challenges could increase our expenses and may not be successful.
−Removed: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
−Removed: We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
+Added: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our privacy and security obligations.
+Added: We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security obligations, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
−Removed: Unfavorable conditions in our industry or the global economy, could limit our ability to grow our business and negatively affect our results of operations.
+Added: Unfavorable conditions in our industry, the global economy, or other catastrophic events may disrupt our business, could limit our ability to grow, and negatively affect our results of operations.
Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers.
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We cannot predict the timing, location, strength or duration of any economic slowdown, instability or recovery, generally or within any particular industry.
−Removed: Government actions and regulations, such as tariffs and trade protection measures, may adversely impact our business, including our ability to obtain products from our suppliers.
−Removed: Political challenges between the United States and countries in which our suppliers are located, including China, and changes to trade policies, including tariff rates and customs duties, trade relations between the United States and China and other macroeconomic issues could adversely impact our business.
+Added: Furthermore, a disruption or failure of our systems or operations because of an earthquake, weather event, cyberattack, terrorist attack, pandemic, or other catastrophic event could cause delays in providing services or performing other critical functions, which could also delay commercial deals and the associated revenue recognition for those deals.
+Added: Our quantum computing manufacturing facility and a significant portion of our research and development activities, and certain other essential business operations are located in the Seattle, Washington area, which is a seismically active region.
+Added: A catastrophic event that results in the destruction or disruption
+Added: of any of our critical business or IT systems, or the infrastructure or systems they rely on could harm our ability to conduct normal business operations.
+Added: Government actions and regulations, such as tariffs and trade protection measures, especially in China and the United States, may adversely impact our business, including our ability to obtain products from our suppliers.
+Added: Political challenges between the United States and countries in our supply chain, including China, and changes to trade policies, including tariff rates and customs duties, trade relations between the United States and China and other macroeconomic issues could adversely impact our business.
Specifically, United States-China trade relations remain uncertain.
−Removed: The United States administration imposes tariffs on certain products imported into the United States with China as the country of origin, and China has imposed tariffs in response to the actions of the United States.
+Added: The United States administration has continued to impose tariffs on certain products imported into the United States with China as the country of origin, and China has imposed tariffs in response to the actions of the United States.
+Added: The likelihood of a further increase in tariffs on goods from China and the imposition of tariffs on goods sourced from other countries has materially increased in light of comments by the new U.S.
+Added: presidential administration, which has repeatedly communicated an intention to impose additional duties on imports from China, as well as on imports from other countries.
government continues to add additional entities, in China and elsewhere, to restricted party lists impacting the ability of U.S.
−Removed: companies to provide items, and, in certain cases, services, to these entities and, in some cases, to receive items or services from these entities.
−Removed: government also continues to increase end-use restrictions on the provision of items and service to China and other countries including end-uses related to advanced computing.
+Added: companies to provide products and technology, and, in certain cases, services, to these entities and, in some cases, to receive products, technology or services from these entities.
+Added: government also continues to increase end-use restrictions on the provision of products, technology and services to China and other countries including end-uses related to advanced computing.
+Added: presidential administration has signaled its intention to use U.S.
+Added: trade policy, including tariffs and other trade restrictions, as an important foreign policy tool presenting uncertainty regarding the impact of future trade policies on our business.
There is also a possibility of future tariffs, trade protection measures or other restrictions imposed on our products or on our customers by the United States, China or other countries that could have a material adverse effect on our business.
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Further, the Chinese government has responded to these U.S.
−Removed: actions by indicating its intention to develop an unreliable entity list, which may limit the ability of companies on the list to engage in business with Chinese counterparties.
+Added: actions by developing an unreliable entity list, which may limit the ability of companies on the list to engage in business with Chinese counterparties.
In June 2022, the import restrictions contained in the Uyghur Forced Labor Prevention Act (“UFLPA”) became effective.
The UFLPA creates a rebuttable presumption that any goods mined, produced or manufactured, wholly or in part, in the Xinjiang Uyghur Autonomous Region (“XUAR”) of China, or produced by a listed entity, were made with forced labor and would therefore not be entitled to entry at any U.S.
−Removed: Importers are required to present clear and convincing evidence that such goods are not made with forced labor.
+Added: Importers may be required to present clear and convincing evidence that such goods are not made with forced labor.
While we do not source items from the XUAR or from listed parties, and we have increased our supply chain diligence, there is risk that our ability to import components and products may be adversely affected by the UFLPA.
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If we are unable to obtain or use components for inclusion in our products, if component prices increase significantly or if we are unable to export or sell our products to any of our customers, our business, liquidity, financial condition and/or results of operations would be materially and adversely affected.
+Added: We are subject to governmental export and import controls and trade and economic sanctions that could impair our ability to compete in global markets and subject us to liability if we are not in full compliance with applicable laws and other controls.
+Added: Our products, technology, and services are subject to various restrictions under U.S.
+Added: export controls, import laws and regulations, and economic sanctions, including the U.S.
+Added: Export Administration Regulations administered by the U.S.
+Added: Department of Commerce, U.S.
+Added: Customs regulations, and trade and economic sanctions administered by the U.S.
+Added: Department of Treasury’s Office of Foreign Assets Control.
+Added: export controls and trade and economic sanctions include restrictions or prohibitions on the sale or supply of certain products, technologies, and services to U.S.
+Added: embargoed or sanctioned countries and governments of these countries, as well as other persons and entities.
+Added: Additionally, under these current and future laws and regulations, exports of our products, technology, and services as well as the underlying technology may require export authorizations, including by license, a license
+Added: exception, or other appropriate government authorizations, and the filing of a classification request or self-classification report to use a license exception, as applicable.
+Added: Customers may defer or decline their purchases of our products due to uncertainty about export controls, and as a result, our business could be materially adversely affected.
+Added: Should we violate existing or similar future export controls or sanctions, we may be subject to substantial monetary fines or suffer reputational damage and other penalties that could negatively impact our business.
+Added: If we need to obtain any necessary export licenses or other authorizations for a particular sale, the process may be time-consuming and may result in the delay or loss of opportunities to sell our products.
+Added: We take precautions to prevent our products and services and the underlying technology from being provided, deployed or used in violation of export controls and sanctions.
+Added: However, we cannot provide assurance that our policies and procedures relating to export control and sanctions compliance will prevent violations in the future by us or our partners or agents.
+Added: Any violation of U.S.
+Added: sanctions or export controls, including failure to obtain appropriate import, export, or re-export licenses or authorization, could result in significant penalties and government investigations, delays in approving or denials of export licenses, and reputational harm and loss of business.
+Added: In addition to the United States, various other countries regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our products, technologies, and services or could limit our clients’ ability to implement our products, technologies, and services in those countries.
+Added: The United States, United Kingdom, France, Spain, Germany, Denmark, Finland, Norway, Slovenia, Japan, Canada, and the Netherlands have recently enacted export controls on quantum computing hardware and related software and technology at specified levels of technological advancement.
+Added: We will continue to review our existing compliance measures to ensure compliance with any applicable regulatory changes.
+Added: Changes in our products, or future changes in export and import regulations, may create delays in the introduction of our products and the underlying technology in international markets, prevent our clients with global operations from deploying our products globally, adversely affect our ability to hire personnel from certain countries to work on our products, or, in some cases, prevent the export or import of our products to certain countries, governments, or persons altogether.
+Added: Any change in export or import controls, economic sanctions or related legislation, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential customers.
+Added: Any decreased use of our products or limitation on our ability to export or sell our products in major international markets could adversely affect our business, financial condition, and results of operations.
+Added: We expect to incur significant costs in complying with these regulations.
+Added: Regulations related to quantum computing are currently evolving and we may face additional risks associated with changes to these regulations as well as increased licensing requirements and other restrictions.
Acquisitions, divestitures, strategic investments and strategic partnerships could disrupt our business and harm our financial condition and operating results.
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If such strategic transactions require us to seek additional debt or equity financing, we may not be able to obtain such financing on terms favorable to us or at all, and such transactions may adversely affect our liquidity and capital structure.
+Added: To the extent we issue equity and/or convertible securities as consideration in such strategic transactions, our stockholders may experience substantial dilution.
Any strategic transaction might not strengthen our competitive position, may increase some of our risks, and may be viewed negatively by our customers, partners or investors.
−Removed: Even if we successfully complete a strategic transaction, we may not be able to effectively
−Removed: integrate the acquired business, technology, systems, control environment, solutions, personnel or operations into our business.
+Added: Even if we successfully complete a strategic transaction, we may not be able to effectively integrate the acquired business, technology, systems, control environment, solutions, personnel or operations into our business.
We may experience unexpected changes in how we are required to account for strategic transactions pursuant to U.S.
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Because our success depends, in part, on our ability to expand sales internationally, our business will be susceptible to risks associated with international operations.
−Removed: We currently maintain offices and/or have personnel in the United States, Canada, and Israel, and recently expanded into Germany and Switzerland.
−Removed: We expect to continue to expand our international operations by developing our sales and operations presence in these and other international markets, which may include opening offices in new jurisdictions.
+Added: We currently maintain offices and/or have personnel in the United States and other international locations.
+Added: We expect to continue to expand our international operations by developing our sales and operations presence internationally, which may include opening offices in new jurisdictions.
Any additional international expansion efforts that we are undertaking and may undertake may not be successful.
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• practical difficulties of enforcing intellectual property rights in countries with varying laws and standards and reduced or varied protection for intellectual property rights in some countries;
−Removed: • an evolving legal framework and additional legal or regulatory requirements for data privacy and cybersecurity, which may necessitate the establishment of systems to maintain data in local markets, requiring us to invest in additional data centers and network infrastructure, and the implementation of additional employee data privacy documentation (including locally compliant data privacy notices and policies), all of which may involve substantial expense and may cause us to need to divert resources from other aspects of our business, all of which may adversely affect our business;
+Added: • an evolving legal framework and additional legal or regulatory requirements for privacy and cybersecurity, which may necessitate the establishment of systems to maintain data in local markets, requiring us to invest in additional data centers and network infrastructure, and the implementation of additional employee privacy documentation (including locally compliant privacy notices and policies), all of which may involve substantial expense and may cause us to need to divert resources from other aspects of our business, all of which may adversely affect our business;
• unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;
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• global public health threats or geopolitical events such as tensions in and around Ukraine, Israel and other areas of the world;
+Added: • degradation in U.S.
+Added: relationships with targeted countries that could result in those countries disfavoring doing business with U.S.
• potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems, restrictions on the repatriation of earnings, and transfer pricing requirements;
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Violations of laws or key control policies by our employees, contractors, partners or agents could result in delays in revenue recognition, financial reporting misstatements, enforcement actions, reputational harm, disgorgement of profits, fines, civil and criminal penalties, damages, injunctions, other collateral consequences or the prohibition of the importation or exportation of our solutions and could harm our business, financial condition, revenues, results of operations or cash flows.
−Removed: Our international sales and operations subject us to additional risks and costs, including the ability to engage with customers in new geographies and exposure to foreign currency exchange rate fluctuations, that can adversely affect our business, financial condition, revenues, results of operations or cash flows.
+Added: Our international sales and operations subject us to additional risks and costs exposure to foreign currency exchange rate fluctuations, that can adversely affect our business, financial condition, revenues, results of operations or cash flows.
We are continuing to expand our international operations as part of our growth strategy.
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Additionally, fluctuations in the value of the U.S.
−Removed: dollar and foreign currencies may make our subscriptions more expensive for international customers, which could harm our business.
+Added: dollar and foreign currencies may make our products and services more expensive for international customers, which could harm our business.
Additionally, we incur expenses for employee compensation and other operating expenses for our non-U.S.
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Litigation and regulatory proceedings are inherently uncertain, and adverse rulings could occur, including monetary damages, or an injunction stopping us from engaging in certain business practices, or requiring other remedies, such as compulsory licensing of patents.
−Removed: For example, on January 12, 2021, dMY Technology Group, Inc.
−Removed: 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.
−Removed: (“GTY”), dMY Technology Holdings Inc., dMY Sponsor, LLC, dMY Sponsor II, LLC, dMY Technology Group Inc.
−Removed: II, dMY and Sponsor (collectively “dMY Defendants”) and Carter Glatt (“Glatt”) and Captains Neck Holdings LLC (“Captains Neck”), an entity of which Mr.
−Removed: Glatt is a member.
−Removed: The underlying lawsuit, filed by dMY Technology Group, Inc.
−Removed: 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 and former President and Chief Financial Officer of GTY when Glatt was still working at GTY.
−Removed: 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.
−Removed: 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 the Company have never employed Glatt nor maintained any business agreements with him.
−Removed: The Counterclaim Defendants denied the claims against them and filed a motion to dismiss the suit.
−Removed: During 2023, the court dismissed the claims against dMY Technology Group, Inc.
−Removed: III (“dMY III”), the former legal registrant of IonQ, Inc and the case is now considered closed.
In May 2022, a securities class action complaint captioned Leacock v.
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The IonQ Defendants and Additional Defendants filed oppositions to plaintiffs’ motion on December 1, 2023, and plaintiffs filed their reply on January 8, 2024.
−Removed: Both the IonQ Defendants and Additional Defendants intend to defend the matters vigorously.
−Removed: 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.
+Added: On July 10, 2024, the plaintiffs' motion for post-judgment relief was denied and the District Court of Maryland directed the clerk to close the case.
+Added: On July 26, 2024, the plaintiffs filed a Notice of Appeal with the Fourth Circuit Court of Appeals seeking to review the trial court's decision.
+Added: Plaintiffs filed their Opening Brief in the Fourth Circuit on September 9, 2024.
+Added: A response brief by IonQ Defendants was filed on October 8, 2024 and plaintiffs’ reply brief was filed on October 29, 2024.
+Added: Oral argument in the Fourth Circuit occurred on January 31, 2025.
+Added: Given the uncertainty of litigation and the legal standards that must be met for, among other things, success on the case merits, the Company cannot reasonably estimate the possible loss or range of loss, if any, that may result from the associated suit.
These proceedings and any additional investigations, inquiries or litigation by various regulators may harm our reputation regardless of the outcome of any such action.
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Negative perceptions of our business may result in additional regulation, enforcement actions by the government and increased litigation, or harm to our ability to attract or retain customers or strategic partners, any of which may affect our business.
−Removed: Any damage to our reputation, including from publicity from legal proceedings against us or companies that work within our industry, governmental proceedings, unfavorable media coverage or class action could adversely affect our business, financial condition and results of operations.
+Added: Any damage to our reputation, including from publicity related to legal proceedings against us or companies that work within our industry, governmental proceedings, unfavorable media coverage or class action could adversely affect our business, financial condition and results of operations.
An unfavorable outcome or settlement or any other legal, administrative and regulatory proceeding may result in a material adverse impact on our business, results of operations, financial position and overall trends.
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We may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we do face liability for our products and are forced to make a claim under our policy.
−Removed: Certain of our activities are subject to regulations relating to use of radioactive material, compliance with which may be costly, and a failure to comply with these regulations may materially and adversely affect our business.
−Removed: Various atomic species are used in trapped-ion systems in academic and commercial settings, including isotopes of elemental ions.
−Removed: Some of these atomic isotopes are radioactive.
−Removed: We use certain radioactive materials in our research, development, and production activities.
−Removed: As a result of our utilization of radioactive material, we and some of our suppliers and distributors are subject to regulation by United States governmental authorities, such as the FDA, the Nuclear Regulatory Commission (“NRC”), and state and local regulatory agencies, which is intended to ensure we remain in compliance with laws governing products and activities which emit, produce, or control radiation.
−Removed: These regulations govern, among other things, the design, development, testing, manufacturing, packaging, labeling, distribution, import/export, sale, marketing, and disposal of our activities and products.
−Removed: We are also subject to international laws and regulations that apply to the utilization of radioactive materials.
−Removed: These are often comparable to, if not more stringent than, the equivalent regulations in the United States.
−Removed: Although we believe that our safety procedures for handling such materials comply with the standards prescribed by such laws and regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated.
−Removed: In the event of such an accident, we could be held liable for any damages that result or penalized with fines, and any such liability could exceed our resources.
−Removed: We are subject to requirements relating to environmental and safety regulations and environmental remediation matters, which could adversely affect our business, results of operation and reputation.
−Removed: We are subject to numerous federal, state and local environmental laws and regulations governing, among other things, solid and hazardous waste storage, treatment and disposal, and remediation of releases of hazardous materials.
−Removed: There are significant capital, operating and other costs associated with compliance with these environmental laws and regulations.
−Removed: Environmental laws and regulations may become more stringent in the future, which could increase costs of compliance or require us to manufacture with alternative technologies and materials.
−Removed: Federal, state and local authorities also regulate a variety of matters, including, but not limited to, health, safety and permitting in addition to the environmental matters discussed above.
−Removed: New legislation and regulations may require us to make material changes to our operations, resulting in significant increases to the cost of production.
−Removed: Our manufacturing process will have hazards such as, but not limited to, hazardous materials, machines with moving parts, and high voltage and/or high current electrical systems typical of large manufacturing equipment and related safety incidents.
−Removed: There may be safety incidents that damage machinery or product, slow or stop production, or harm employees.
−Removed: Consequences may include litigation, regulation, fines, increased insurance premiums, mandates to temporarily halt production, workers’ compensation claims, or other actions that impact the company brand, finances, or ability to operate.
−Removed: Contracts with U.S.
−Removed: government entities subject us to risks, including early termination, audits, investigations, sanctions and penalties.
+Added: Contracts with government entities subject us to risks, including early termination, audits, investigations, sanctions and penalties.
As part of our business strategy, we have entered into and may enter into additional contracts with state and federal government entities, which subjects our business to statutes and regulations applicable to companies doing business with the government, including the Federal Acquisition Regulation.
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In addition, government contracts normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions.
−Removed: These requirements include, for example:
+Added: These requirements could include, for example:
• specialized disclosure and accounting requirements unique to government contracts;
−Removed: • financial and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the U.S.
+Added: • financial and compliance audits of our cost structure, accounting controls and procedures and adequacy of our policies and systems to meet Federal Acquisition Regulation requirements.
+Added: These audits may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the U.S.
• granting the U.S.
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• public disclosures of certain contract and company information;
+Added: • mandatory security and privacy framework compliance requirements, including the handling of controlled unclassified information;
• mandatory socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental compliance requirements.
−Removed: Government contracts are also generally subject to greater scrutiny by the government, which can initiate reviews, audits and investigations regarding our compliance with government contract requirements.
+Added: Government contracts are also generally subject to greater scrutiny by the government than commercial contracts are by commercial customers.
+Added: For example, government agencies can initiate reviews, audits and investigations regarding our compliance with government contract requirements.
In addition, if we fail to comply with government contracting laws, regulations and contract requirements, our contracts may be subject to termination, and we may be subject to financial and/or other liability under our contracts, the Federal Civil False Claims Act (including treble damages and other penalties), or criminal law.
In particular, the False Claims Act’s “whistleblower” provisions also allow private individuals, including present and former employees, to sue on behalf of the U.S.
−Removed: Any penalties, damages, fines, suspension, or damages could adversely affect our ability to operate our business and our financial results.
+Added: Any penalties, fines, suspension, or damages could adversely affect our ability to operate our business and our financial results.
+Added: Responding to any investigation or action relating to government contracts could result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.
+Added: Our customers also include non-U.S.
+Added: Similar procurement, budgetary, contract, and audit risks that apply in the context of U.S.
+Added: government contracting may also apply to our doing business with these entities.
+Added: In addition, compliance with complex regulations and contracting provisions in a variety of jurisdictions can be expensive and consume significant management resources.
+Added: Certain of our activities are subject to regulations relating to use of radioactive material, compliance with which may be costly, and a failure to comply with these regulations may materially and adversely affect our business.
+Added: Various atomic species are used in trapped-ion systems in academic and commercial settings, including isotopes of elemental ions.
+Added: Some of these atomic isotopes are radioactive.
+Added: We use certain radioactive materials in our research, development, and production activities.
+Added: As a result of our utilization of radioactive material, we and some of our suppliers, distributors, and customers are subject to regulation by United States governmental authorities, such as the Food and Drug Administration (“FDA”), the Nuclear Regulatory Commission (“NRC”), and state and local regulatory agencies, which regulate products and activities which emit, produce, or control radiation.
+Added: These regulations govern, among other things, the design, development, testing, manufacturing, packaging, labeling, distribution, import/export, sale, marketing, and disposal of our products.
+Added: We are also subject to international laws and regulations that apply to the utilization of radioactive materials.
+Added: These are often comparable to, if not more stringent than, the equivalent regulations in the United States.
+Added: Agency reviews of radioactivity-related applications that we are required to make in order to design, develop, test, manufacture, package, distribute, import, export, sell, market or dispose of radioactive materials may be lengthy or unsuccessful, and as a result our ability to sell our products or operate in certain jurisdictions may be impaired.
+Added: Although we believe that our safety procedures for handling such materials comply with the standards prescribed by such laws and regulations, the risk of accidental contamination or injury from these materials may not be completely eliminated, and as a result we could incur related liabilities or expenses.
+Added: We are subject to requirements relating to environmental and safety regulations and environmental remediation matters, which could adversely affect our business, results of operation and reputation.
+Added: We are subject to numerous federal, state and local environmental laws and regulations governing, among other things, solid and hazardous waste storage, treatment and disposal, and remediation of releases of hazardous materials.
+Added: There are significant capital, operating and other costs associated with compliance with these environmental laws and regulations.
+Added: Environmental laws and regulations may become more stringent in the future, which could increase costs of compliance or require us to manufacture with alternative technologies and materials.
+Added: Federal, state and local authorities also regulate a variety of matters, including, but not limited to, health, safety and permitting in addition to the environmental matters discussed above.
+Added: New legislation and regulations may require us to make material changes to our operations, resulting in significant increases to the cost of production.
+Added: Our manufacturing process will have hazards such as, but not limited to, hazardous materials, machines with moving parts, and high voltage and/or high current electrical systems typical of large manufacturing equipment and related safety incidents.
+Added: There may be safety incidents that damage machinery or product, slow or stop production, or harm employees.
+Added: Consequences may include litigation, regulation, fines, increased insurance premiums, mandates to temporarily halt production, workers’ compensation claims, or other actions that impact the company brand, finances, or ability to operate.
We are subject to stringent and evolving U.S.
−Removed: and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security.
+Added: and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to privacy, data protection and security.
Our actual or perceived failure to comply with such obligations could lead to adverse business consequences.
−Removed: Our data storage and processing activities, including the establishment and operation of future quantum data centers, may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements and other obligations relating to data privacy, data sovereignty and
+Added: Our data storage and processing activities, including the establishment and operation of future quantum data centers, may subject us to numerous privacy, data protection and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements and other obligations relating to privacy, data
+Added: localization and security.
Laws and regulations governing privacy, data protection and data sovereignty are rapidly evolving, extensive, complex, and include inconsistencies and uncertainties that may conflict with other rules or our practices.
−Removed: Further, new laws, rules, and regulations could be enacted with which we are not familiar or with which our current practices do not comply.
−Removed: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
−Removed: For example, the California Consumer Privacy Act of 2018 (“CCPA”) applies to personal information of California consumers, business representatives and employees, and requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights.
+Added: Further, new laws, rules, and regulations could be enacted with which we are not familiar or with which our practices do not comply.
+Added: In the United States, federal, state, and local governments have enacted numerous privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
+Added: For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act (collectively, the “CCPA”) applies to personal information of California consumers and imposes various requirements on businesses, including to provide specific disclosures in privacy notices and honor requests of California consumers to exercise certain privacy rights.
The CCPA provides for civil penalties of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages.
−Removed: In addition, the California Privacy Rights Act of 2020 (“CPRA”) expands the CCPA’s requirements, including by adding a new right for individuals to correct their personal information and establishing a new regulatory agency to implement and enforce the law.
−Removed: Other states, such as Virginia and Colorado, have also passed comprehensive privacy laws, and similar laws are being considered in several other states, as well as at the federal and local levels.
−Removed: Our employees and personnel use generative artificial intelligence (“AI”) technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various privacy laws and other privacy obligations.
+Added: Numerous other states have enacted, are in the process of enacting, are proposing to enact or are considering comprehensive state-level privacy laws.
+Added: Such laws are also being considered at the federal and local levels.
+Added: Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various evolving laws, regulations, guidance, industry standards, and other obligations.
Additionally, several states and localities have enacted measures related to the use of artificial intelligence and machine learning in products and services.
−Removed: These developments may further complicate compliance efforts, and may increase legal risk and compliance costs for us, the third parties upon whom we rely, and our customers.
−Removed: Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security.
+Added: Generally, we understand the use of AI for employee productivity also presents emerging ethical and social issues and may draw public scrutiny or controversy, and may also create or assist in producing output that appear correct but are factually inaccurate, incomplete, misleading, biased, or otherwise flawed, or produce other discriminatory or unexpected results, errors, or inadequacies, any of which may not be easily detectable.
+Added: These circumstances and developments may further complicate compliance efforts, and may increase legal risk and compliance costs for us, the third parties upon whom we rely, and our customers.
+Added: Outside the United States, an increasing number of laws, regulations, industry standards and other obligations may govern privacy, data protection and security.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s General Data Protection Regulation (“UK GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No.
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or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
−Removed: Additionally, we also target customers in Asia and may be subject to new and emerging data privacy regimes in Asia, including China’s PIPL, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act.
+Added: Additionally, we also target customers in Asia and may be subject to new and emerging data protection and privacy regimes in Asia, including China’s PIPL, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act.
In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.
Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
−Removed: In particular, the European Economic Area (“EEA”) and the United Kingdom (“UK”) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it believes are inadequate.
+Added: In particular, the European Economic Area (“EEA”) and the United Kingdom (“UK”) each has significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it believes are inadequate.
Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
−Removed: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
−Removed: If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
+Added: Although various mechanisms may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s and UK’s respective standard contractual clauses, the EU-U.S.
+Added: Data Privacy Framework, the United Kingdom extension to the EU-U.S.
+Added: Data Privacy Framework, and the Swiss-U.S.
+Added: Data Privacy Framework, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
+Added: If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our transferring or other processing of personal data necessary to operate our business.
Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigators, and activist groups.
Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.
−Removed: In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and may become subject to such obligations in the future.
−Removed: We are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
−Removed: For example, certain privacy laws, such as the EU GDPR, UK GDPR and CCPA, require our customers to impose specific contractual restrictions on their service providers.
+Added: In addition to privacy, data protection and security laws, we are contractually subject to industry standards adopted by industry groups and may become subject to additional obligations in the future.
+Added: We are also bound by other contractual obligations related to privacy, data protection and security, and our efforts to comply with such obligations may not be successful.
+Added: For example, certain laws
+Added: addressing privacy, data protection and security, such as the EU GDPR, Switzerland Federal Act on Data Protection (FADP), UK GDPR and CCPA, require our customers to impose specific contractual restrictions on their service providers.
Additionally, some of our customers may require us to host personal data locally.
−Removed: We publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
−Removed: If these policies, materials or statements are found to be deficient, lacking in
−Removed: transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
−Removed: Obligations related to data privacy and security are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.
+Added: We publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding privacy, data protection and security.
+Added: If these policies, materials or statements are or are perceived to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
+Added: Obligations related to privacy, data protection and security are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.
Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
−Removed: We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.
−Removed: Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.
−Removed: If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:
+Added: We may at times fail, or be perceived to have failed, in our efforts to comply with our privacy, data protection or security obligations.
+Added: Moreover, despite our efforts, our personnel or third parties on whom we rely may fail, or be perceived to have failed, to comply with such obligations, which could negatively impact our business operations.
+Added: If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable privacy, data protection or security obligations, we could face significant consequences, including but not limited to:
government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar events);
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Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, and their third-party intermediaries from authorizing, promising, offering, providing, soliciting, or accepting, directly or indirectly, improper payments or benefits to or from any person whether in the public or private sector.
−Removed: We may engage with partners and third-party intermediaries to market our services and to obtain necessary permits, licenses, and other regulatory approvals.
+Added: We may engage with partners and third-party intermediaries to conduct our business abroad, including marketing our services and obtaining necessary permits, licenses, and other regulatory approvals.
In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities.
We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, and of our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
+Added: These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions.
We cannot provide any assurance that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.
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In addition, noncompliance with anti-corruption or anti-bribery laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties, injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage, and other collateral consequences.
−Removed: We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.
−Removed: Our products and technologies are subject to U.S.
−Removed: export control and import laws and regulations, including the U.S.
−Removed: Export Administration Regulations, U.S.
−Removed: Customs regulations, and various economic and trade sanctions regulations administered by the U.S.
−Removed: Treasury Department’s Office of Foreign Assets Control.
−Removed: export control and economic sanctions laws include restrictions or prohibitions on the sale or supply of certain products, technologies, and services to U.S.
−Removed: government embargoed or sanctioned countries, governments, persons and entities.
−Removed: In addition, certain products and technology may be subject to export licensing or approval requirements.
−Removed: Exports of our products and technology must be made in compliance with export control and sanctions laws and regulations.
−Removed: If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges;
−Removed: fines, which may be imposed on us and responsible employees or managers;
−Removed: and, in extreme cases, the incarceration of responsible employees or managers.
−Removed: In addition, various countries regulate the import of certain encryption technology, including through import permit and license requirements and have enacted laws that could limit our ability to distribute our products and technologies or could limit our end customers’ ability to implement our services in those countries.
−Removed: Changes in our products or technologies or changes in applicable export or import laws and regulations also may create delays in the introduction and sale of our products and technologies in international markets or, in some cases, prevent the export or import of our products and technologies to certain countries,
−Removed: governments or persons altogether.
−Removed: Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons or technologies targeted by such laws and regulations, could also result in decreased use of our products and technologies, or in our decreased ability to export or sell our products and technologies to existing or potential customers.
−Removed: Any decreased use of our products and technologies or limitation on our ability to export or sell our products and technologies would likely adversely affect our business, financial condition and results of operations.
−Removed: We expect to incur significant costs in complying with these regulations.
−Removed: Regulations related to quantum computing are currently evolving and we may face additional risks associated with changes to these regulations.
+Added: Changes in tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
+Added: New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of our domestic and foreign financial results.
+Added: Any new taxes could adversely affect our domestic and international business operations, and our business and financial performance.
+Added: Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us.
+Added: For example, in August 2022, as part of the Inflation Reduction Act of 2022, the United States enacted a 1% excise tax on stock buybacks and a 15% alternative minimum tax on adjusted financial statement income.
+Added: Additionally, beginning in 2022, the Code eliminated the right to deduct research and development expenditures and instead requires taxpayers to capitalize and amortize U.S.
+Added: and foreign research and development expenditures over
+Added: five and 15 tax years, respectively.
+Added: To the extent applicable, we have accounted for these changes in accordance with our understanding of the guidance available as of the date of this filing and as described in more detail in our financial statements.
+Added: Many countries, as well as organizations such as the Organization for Economic Cooperation and Development, have implemented or proposed changes to existing tax laws, including a 15% global minimum tax.
+Added: Any of these developments or changes in U.S.
+Added: federal, state or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results.
+Added: There can be no assurance that our effective tax rates, tax payments or tax credits and incentives will not be adversely affected by these or other developments or changes in law.
Risks Related to our Intellectual Property
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In particular, our quantum computing technology is dependent on our license agreement with University of Maryland and Duke University, or the Universities.
−Removed: Significant intellectual property developed by our co-founders, Jungsang Kim, our Chief Technology Officer, and Christopher Monroe, has been and is required to be assigned to the Universities as a result of Dr.
−Removed: Monroe’s employment by the Universities, and certain such intellectual property is licensed pursuant to the license agreement with the Universities.
−Removed: Pursuant to the license agreement with the universities, we were granted an exclusive, worldwide, royalty-free, sublicenseable license for certain patents, know-how (on a non-exclusive basis) and other intellectual property to develop, manufacture and commercialize products for use in certain licensed fields, the scope of which includes the application of the licensed intellectual property in ion trap quantum computing.
+Added: Pursuant to the license agreement with the Universities, we were granted an exclusive, worldwide, royalty-free, sublicensable license for certain patents, know-how (on a non-exclusive basis) and other intellectual property to develop, manufacture and commercialize products for use in certain licensed fields, the scope of which includes the application of the licensed intellectual property in ion trap quantum computing.
Our existing license agreement with the Universities imposes, and we expect that any future license agreements will impose, upon us various commercial and development obligations.
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We rely upon a combination of the intellectual property protections afforded by patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary technologies.
−Removed: In addition, we seek to protect our intellectual property rights through nondisclosure and invention assignment agreements with our employees and consultants, and through non-disclosure agreements with business partners and other third parties.
+Added: In addition, we seek to protect our intellectual property rights through nondisclosure and invention assignment agreements with our employees and consultants, and through non-disclosure agreements with business partners and other third parties, however, our employees and consultants may not abide by, and not all of them have always abided by, their obligations under their nondisclosure and invention assignment agreements.
Our trade secrets may also be compromised, which could cause us to lose the competitive advantage from such trade secrets.
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In addition, patents issued to us may be infringed upon or designed around by others and others may obtain patents that we need to license or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating results.
−Removed: We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs (including indemnification of third parties or costly licensing arrangements (if licenses are available at all)) and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies, which could result in a significant expenditure and otherwise harm our business.
+Added: We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs (including indemnification of third parties or costly licensing arrangements (if licenses
+Added: are available at all)) and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies, which could result in a significant expenditure and otherwise harm our business.
We may become subject to intellectual property disputes.
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Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources.
−Removed: Some of our in-licensed intellectual property, including the intellectual property licensed from the Universities, has been conceived or developed through government-funded research and thus may be subject to federal regulations providing for certain rights for the U.S.
+Added: Some of our in-licensed intellectual property, including the intellectual property licensed from the University of Maryland and Duke University, has been conceived or developed through government-funded research and thus may be subject to federal regulations providing for certain rights for the U.S.
government or imposing certain obligations on us, such as a license to the U.S.
−Removed: government under such intellectual property, “march-in” rights, certain reporting requirements and a preference for U.S.-based companies, and compliance with such regulations may limit our exclusive rights and our ability to contract with non-U.S.
+Added: government covered by such intellectual property, “march-in” rights, certain reporting requirements and a preference for U.S.-based companies, and compliance with such regulations may limit our exclusive rights and our ability to contract with non-U.S.
manufacturers.
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The market price of shares of our common stock or public warrants may be volatile, which could cause the value of your investment to decline.
−Removed: If you purchase shares of our common stock, you may not be able to resell those shares at or above the price you paid.
+Added: If you purchase shares of our common stock or warrants to purchase common stock, you may not be able to resell those shares or warrants at or above the price you paid.
The market price of our common stock may be highly volatile and may fluctuate or decline significantly in response to numerous factors, some of which are beyond our control.
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The securities markets have experienced and continue to experience significant volatility.
−Removed: Market volatility, as well as general economic, market or political conditions, could reduce the market price of shares of our common stock regardless of our operating performance.
+Added: Market volatility, as well as general economic, market or political conditions, could reduce the market price of shares of our common stock or warrants to purchase common stock regardless of our operating performance.
Our operating results could be below the expectations of public market analysts and investors due to a number of potential factors, including:
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Any such guidance will consist of forward-looking statements, subject to the risks and uncertainties described in this filing and in our other public filings and public statements.
−Removed: Our actual results may not always be in line with or exceed any guidance we have provided, especially in times of economic uncertainty, such as the current global economic uncertainty being experienced.
+Added: Our actual results may not always be in line with or exceed any guidance we have provided, especially in times of economic uncertainty.
+Added: Further, our lengthy sales cycle may contribute to substantial fluctuations in our quarterly or annual operating results as significant sales can be delayed to subsequent periods.
If, in the future, our operating or financial results for a particular period do not meet any guidance provided or the expectations of investment analysts, or if we reduce our guidance for future periods, the market price of our common stock may decline as well.
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We cannot be certain when or if the operations of our business will generate sufficient cash to fund our ongoing operations or the growth of our business.
−Removed: We intend to make investments to support our current business and may require additional funds to respond to business challenges, including the need to develop or enhance our technology, improve our operating infrastructure or
−Removed: acquire complementary businesses and technologies.
+Added: We intend to make investments to support our current business and may require additional funds to
+Added: respond to business challenges, including the need to develop or enhance our technology, improve our operating infrastructure or acquire complementary businesses and technologies.
Additional financing may not be available on favorable terms, if at all.
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You may be unable to sell your securities unless a market can be established or sustained.
−Removed: If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of financial reports, and the market price of our common stock may decline.
+Added: If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of financial reports, and the market price of our common stock may decline.
We are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls.
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We face increased legal, accounting, insurance, administrative and other costs and expenses as a public company.
−Removed: Sarbanes-Oxley, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (“PCAOB”) and the securities exchanges, impose additional reporting and other obligations on public companies.
−Removed: Compliance with public company requirements will continue to increase costs and make
−Removed: certain activities more time-consuming.
−Removed: A number of those requirements require us to carry out activities we have not done previously.
−Removed: For example, we adopted new internal controls and disclosure controls and procedures.
+Added: Sarbanes-Oxley, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (“PCAOB”) and the securities exchanges, impose additional reporting
+Added: and other obligations on public companies.
+Added: Compliance with public company requirements will continue to increase costs and make certain activities more time-consuming.
If any issues in complying with SEC reporting requirements are identified (for example, if we identify a material weakness or significant deficiency in the internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could harm our reputation or investor perceptions of us.
−Removed: Further, the costs to maintain our director and officer liability insurance may continue to rise to unprecedented levels.
+Added: Further, the costs to maintain our director and officer liability insurance may rise.
Risks associated with our status as a public company may make it more difficult to attract and retain qualified persons to serve on our Board or as executive officers.
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Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.
−Removed: We no longer qualify as an emerging growth company as of December 31, 2023 and, as a result, we will no longer be able to avail ourselves of certain reduced reporting requirements applicable to emerging growth companies.
−Removed: As a result of the market value of our common stock held by non-affiliates as of June 30, 2023 (the last day of our second quarter) exceeding $700.0 million, we became a large accelerated filer under the Exchange Act as of December 31, 2023, and no longer qualify as an “emerging growth company.” We were also a smaller reporting company as defined in the Exchange Act until June 30, 2023.
−Removed: However, we may continue to use the scaled disclosures permitted for a smaller reporting company through our annual report on Form 10-K for the fiscal year ended December 31, 2023 and must begin providing non-scaled larger company disclosure in our first quarterly report in our next fiscal year (i.e., the quarterly report for the three-month period ended March 31, 2024).
−Removed: As a large accelerated filer, we are subject to certain disclosure and compliance requirements that apply to other public companies but did not previously apply to us due to our status as an emerging growth company.
−Removed: These requirements include, but are not limited to:
−Removed: • the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);
−Removed: • the requirement that we provide three years of audited financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”
−Removed: • compliance with any requirements that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or supplement to the auditors' report providing additional information about the audit and the financial statements;
−Removed: • the requirement that we provide more detailed disclosures regarding executive compensation;
−Removed: • compliance with the required public company effective dates for any new or revised accounting standards;
−Removed: • the requirement that we hold a non-binding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously approved.
−Removed: We expect that compliance with these additional requirements will substantially increase our legal and financial compliance costs.
−Removed: In addition, any failure to comply with these additional requirements in a timely manner, or at all, could have an adverse effect on our business and results of operations and could cause a decline in the price of our common stock.
We may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our common stock.
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• the market price of our common stock may decline.
−Removed: There is no guarantee that the public warrants will be in the money, and they may expire worthless.
+Added: There is no guarantee that the public warrants will be in the money at any specific point in time, and they may expire worthless.
The exercise price for our public warrants is $11.50 per share of common stock.
−Removed: There is no guarantee that the public warrants will be in the money prior to their expiration, and as such, the public warrants may expire worthless.
+Added: There is no guarantee that the public warrants will be in the money at any specific point in time prior to their expiration, and as such, the public warrants may expire worthless.
The public warrants expire on September 30, 2026.
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Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the public warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a public warrant.
−Removed: We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to warrantholders, thereby making such warrants worthless.
+Added: We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making such warrants worthless.
We have the ability to redeem outstanding public warrants prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met.
−Removed: If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: Redemption of the outstanding public warrants could force you (1) to exercise your public warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (2) to sell your public warrants at the then-current market price when you might otherwise wish to hold your public warrants or (3) to accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption, is likely to be substantially less than the market value of your public warrants.
−Removed: In addition, we may redeem the public warrants after they become exercisable for a number of shares of common stock determined based on the redemption date and the fair market value of our common stock.
+Added: While the public
+Added: warrants are redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
+Added: Redemption of the outstanding public warrants could force you (1) to exercise your public warrants and pay the exercise price at a time when it may be disadvantageous for you to do so, (2) to sell your public warrants at the then-current market price when you might otherwise wish to hold your public warrants or (3) to accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption, is likely to be substantially less than the market value of your public warrants.
+Added: In addition, we may redeem the public warrants prior to their expiration, at a price of $0.10 per warrant, provided that the last reported sales price of our common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we give proper notice of such redemption, provided that the warrants can be exercised on a cashless basis prior to redemption for a number of shares of common stock determined based on the redemption date and the fair market value of our common stock, and provided certain other conditions are met.
Any such redemption may have similar consequences to a cash redemption described above.
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Although these provisions are expected to benefit us by providing increased consistency in the application of applicable law in the types of lawsuits to which they apply, the provisions may have the effect of discouraging lawsuits against directors and officers.
−Removed: The enforceability of similar choice of forum provisions in other companies’ certificates of
−Removed: incorporation have been challenged in legal proceedings and there is uncertainty as to whether a court would enforce such provisions.
+Added: The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation have been challenged in legal proceedings and there is uncertainty as to whether a court would enforce such provisions.
In addition, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
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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.