What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-28 compared with 2021-03-25 · 485 added, 200 removed, 1 unchanged (100% of the section changed)

We are a blank check company formed as a

Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the business combination).

We have neither

engaged in any operations nor generated any revenue to date.

Based on our business activities, the Company is a shell company as defined under the Exchange Act of 1934 (the Exchange Act) because we have no operations and

nominal assets consisting almost entirely of cash.

On November 17, 2020, we consummated our initial public offering (the initial public

offering) of 30,000,000 units (the units), including the issuance of 2,500,000 units as a result of the underwriters exercise of their over-allotment option in full.

Each unit consists of one share of Class A common

stock and one-fourth of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share.

The units were sold at a price of $10.00 per unit, generating gross

proceeds of $300,000,000.

Simultaneously with the consummation of the initial public offering, we completed the private sale (the private

placement) of an aggregate of 4,000,000 warrants (the private placement warrants) to the Sponsor at a purchase price of $2.00 per warrant, generating gross proceeds of $8,000,000.

Prior to the consummation of the initial public offering, on September 14, 2020, we issued an aggregate of 7,187,500 shares (the founder

shares) of our Class B common stock to the Sponsor for an aggregate purchase price of $25,000 in cash.

On November 12, 2020, dMY effected a 1:1.1 stock split of the Class B common stock, resulting in an aggregate of 7,906,250

founder shares outstanding.

The initial stockholders agreed to forfeit up to 1,031,250 founder shares to the extent that the over-allotment option was not exercised in full by the underwriters in the initial public offering.

The forfeiture would be

adjusted to the extent that the over-allotment option was not exercised in full by the underwriters so that the founder shares would represent 20.0% of the common stock after the initial public offering.

The underwriters partially exercised their

over-allotment option;

thus, 406,250 founder shares were forfeited, resulting in an aggregate of 7,500,000 founder shares outstanding.

$300,000,000, comprised of $294,000,000 of the proceeds from the initial public offering (which amount includes $10,500,000 of the underwriters deferred discount) and $6,000,000 of the proceeds of the sale of the private placement warrants,

was placed in a U.S.-based trust account (the trust account) at J.P.

Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee.

The funds held in the trust account are invested in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment

Company Act of 1940, as amended (the Investment Company Act), with a maturity of 185 days or less or in money market funds meeting the conditions of Rule 2a-7 of the Investment Company Act which

invest only in direct U.S.

government treasury obligations, until the earlier of:

(i) the consummation of an initial business combination or (ii) the distribution of the trust account, as described below.

As of December 31, 2020, there was $300,030,565 in investments and cash held in the trust account, which includes interest income available to us for

franchise and income tax obligations of approximately $30,500 and $1,569,739 of cash held outside the trust account.

As of December 31, 2020, we have not withdrawn any of interest earned from the trust account to pay taxes.

On March 7, 2021, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Ion Trap Acquisition Inc., a Delaware

corporation and a direct, wholly owned subsidiary of dMY (Merger Sub) and IonQ, Inc., a Delaware corporation (IonQ), as disclosed in a Form 8-K filed on March 7, 2021.

additional information regarding the agreement, see the Companys Form 8-K filed by us on March 7, 2021.

Other than as specifically discussed, this report does not assume the closing of the merger.

Effecting Our Initial Business Combination

We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time.

We intend to effectuate our initial

business combination using cash held in the trust account, the proceeds of the sale of our shares in connection with our initial business combination (including pursuant to forward purchase agreements or backstop agreements we may enter into),

shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

We may seek to complete our initial business combination with a company or business that may be

financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment

of the consideration in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including

for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working

Selection of a target business and structuring of our initial business combination

While we may pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management team to

identify, acquire and operate a business or businesses that can benefit from our management teams established global relationships and operating experience.

Our management team has extensive experience in identifying and executing strategic

investments globally and has done so successfully in a number of sectors.

Our amended and restated certificate of incorporation (as amended on November 12, 2020, our amended and restated certificate of incorporation) prohibits us

from effectuating a business combination with another blank check company or similar company with nominal operations.

The New York Stock Exchange (the

NYSE) listing rules require that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of

amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions).

Our board of directors will make the determination as to the fair market value of our initial business

If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation

or appraisal firm with respect to the satisfaction of such criteria.

While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may

be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of the targets assets or prospects.

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or

acquire 100% of the equity interests or assets of the target business or businesses.

We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of

the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the

outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment

Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company,

depending on valuations ascribed to the target and us in the business combination transaction.

For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a

In this case, we would acquire a 100% controlling interest in the target.

However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than

a majority of our outstanding shares subsequent to our initial business combination.

If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such

business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above.

If the business combination involves more than one target business, the 80% of net assets test will be

based on the aggregate value of all of the target businesses.

In evaluating a prospective target business, we expect to conduct a due diligence review which may

encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as reviewing financial and other information which will be made available to

The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated

with this process, are not currently ascertainable with any degree of certainty.

Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately

completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.

We are not prohibited from

pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor,

executive officers or directors.

In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an

opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view.

Redemption rights for holders of public shares upon consummation of the initial business combination

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our

initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the

initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations and on the

conditions described herein.

The amount in the trust account is approximately $10.00 per public share as of December 31, 2020.

The per-share amount we will distribute to investors who properly redeem

their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters.

The Sponsor, our officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their

redemption rights with respect to any founder shares and any public shares they may hold in connection with the completion of our initial business combination.

Conduct of redemptions pursuant to tender offer rules

If we conduct redemptions pursuant to the tender offer rules of the U.S.

Securities and Exchange Commission (the SEC), we will, pursuant to our

amended and restated certificate of incorporation:

(a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers;

and (b) file tender

offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation

14A of the Exchange Act, which regulates the solicitation of proxies.

Submission of our initial business combination to a stockholder vote

In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection

therewith, provide our public stockholders with the redemption rights described above upon completion of the business combination.

If we seek stockholder approval, we will complete our initial business combination only if a majority of the

outstanding shares of common stock are voted in favor of the initial business combination.

In such case, our initial stockholders, Sponsor, officer and directors have agreed to vote any founder shares they hold and any public shares purchased during

or after the initial public offering, in favor of our initial business combination.

Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were a

stockholder on the record date for the stockholder meeting held to approve the transaction.

In addition, our initial stockholders have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any

public shares they may hold in connection with the consummation of the initial business combination.

If we seek stockholder approval of our initial

business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may

purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination.

There is no limit on the number of shares our initial stockholders,

directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the NYSE rules.

However, they have no current commitments, plans or intentions to engage in such transactions and have

not formulated any terms or conditions for any such transactions.

None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions.

If they engage in such transactions, they will be restricted from

making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.

currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act;

however, if the

purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.

We expect any such purchases will be reported pursuant to Section 13 and

Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.

The purpose of any such purchases of shares

could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that

requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met.

The purpose of any such purchases of public warrants could be to

reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination.

Any such purchases of our securities may result in the

completion of our initial business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public float of our shares of Class A common stock or warrants may be reduced and the number of

beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

Limitation on Redemption upon Completion of Our Initial Business Combination if We Seek Stockholder Approval

Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our

initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder

is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in our initial public offering,

which we refer to as the Excess Shares. Such restriction shall also be applicable to our affiliates.

We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such

holders to use their ability to exercise their redemption rights against a proposed initial business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other

undesirable terms.

Absent this provision, a public stockholder holding more than an aggregate of 20% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holders shares are not purchased by

us, our Sponsor or our management at a premium to the then-current market price or on other undesirable terms.

By limiting our stockholders ability to redeem no more than 20% of the shares sold in our initial public offering without our prior

consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with an initial business combination with a target

that requires as a closing condition that we have a minimum net worth or a certain amount of cash.

However, we would not be restricting our stockholders ability to vote all of their shares (including Excess Shares) for or against our initial

business combination.

Redemption of Public Shares and Liquidation if no Initial Business Combination

Our amended and restated certificate of incorporation provides that we will have until twenty-four (24) months from the closing of our initial public

offering, or November 17, 2022, to complete our initial business combination.

If we are unable to complete our initial business combination by November 17, 2022, we will:

(i) cease all operations except for the purpose of winding up,

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in

the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public

shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such

redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other

applicable law.

There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by November 17, 2022.

In identifying, evaluating and

selecting a target business for our initial business combination, we may encounter competition from other entities having a business objective similar to ours, including other special purpose acquisition companies, private equity groups and

leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions.

Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through

Moreover, many of these competitors possess greater financial, technical, human and other resources than us.

Our ability to acquire larger target businesses will be limited by our available financial resources.

This inherent limitation

gives others an advantage in pursuing the acquisition of a target business.

Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our

initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses.

Either of these factors may place us at a competitive disadvantage in

successfully negotiating an initial business combination.

We currently have two executive officers:

Niccolo de Masi and Harry L.

Our officers are appointed by the board of directors and serve at the discretion of

the board of directors, rather than for specific terms of office.

Our board of directors is authorized to appoint officers as it deems appropriate pursuant to our amended and restated certificate of incorporation.

These individuals are not obligated

to devote any specific number of hours to our matters, but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination.

The amount of time they will devote in any time

period will vary based on whether a target business has been selected for our initial business combination and the stage of the initial business combination process we are in.

We do not intend to have any full-time employees prior to the completion

of our initial business combination.

We are developing quantum computers designed to solve the world’s most complex problems, and transform business, society and the planet for the better.

We believe that our proprietary technology, its architecture and the technology exclusively available to us through license agreements will offer us advantages both in terms of research and development, as well as the commercial value of our intended product offerings.

Today, we sell access to several quantum computers of various qubit capacities and are in the process of researching and developing technologies for quantum computers with increasing computational capabilities.

We currently make access to our quantum computers available via three major cloud platforms, Amazon Web Services’ (“AWS”) Amazon Braket, Microsoft’s Azure Quantum and Google’s Cloud Marketplace, and also to select customers via our own cloud service.

This cloud-based approach enables the broad availability of quantum computing as a service (“QCaaS”).

We are is still in the early stages of commercial growth.

Since our inception, we have incurred significant operating losses.

Our ability to generate revenue sufficient to achieve profitability will depend heavily on the successful development and further commercialization of our quantum computing systems.

Our net losses were $106.2 million and $15.4 million for the years ended December 31, 2021 and 2020, respectively, and we expect to continue to incur significant losses for the foreseeable future.

As of December 31, 2021, we had an accumulated deficit of $145.8 million.

We expect that trend to continue for the next few years as we prioritize reaching the technical milestones necessary to achieve an increasingly higher number of stable qubits and higher levels of fidelity than that which presently exists—prerequisites for quantum computing to reach broad quantum advantage.

The Quantum Opportunity

Throughout human history, technological breakthroughs have dramatically transformed society and altered the trajectory of economic productivity.

century, it was the industrial revolution, powered by the scientific advances that brought us steam-powered machines, electricity, and advanced medicine.

These technologies drastically improved human productivity and lengthened life expectancy.

century, computing—arguably the greatest of all human inventions—leveraged human intelligence to run complex calculations, paving the way for profound advances in virtually every realm of human experience, including information processing, communication, energy, transportation, biotechnology, life sciences, agriculture and industry.

Since classical computing emerged in the mid-twentieth

century, there has been exponential progress in computer design, with processing power roughly doubling every few years (Moore’s law).

The true economic and social impact of computing is difficult to measure because it has so thoroughly permeated every aspect of life, altering the trajectory of society.

However, as transformative as computing has been, many classes of problems strain the ability of classical computers, and some will never be solvable with classical computing.

In this traditional binary approach to computing, information is stored in bits that are represented logically by either a 0 (off) or a 1 (on).

Quantum computing uses information in a fundamentally different way than classical computing.

Quantum computers are based on quantum bits (qubits), a fundamental unit that can exist in both states 0 and 1 simultaneously

(superposition).

As a result, we believe that quantum computers can address a set of hard problems classical computing may never solve.

The types of problems that currently defeat classical computing include:

the simulation of quantum systems (e.g., in materials science or pharmaceuticals);

number factoring for decryption;

and complex optimization problems.

Many of these problems are fundamental, involving society’s most pressing needs, such as how to live sustainably on our planet, how to cure diseases, and how to efficiently move people and goods.

Classical computers cannot solve these problems because the calculations would take far too long (i.e., millions to trillions of years) or because the problems involve quantum systems that are far too complex to be represented on a classical computer, even if their remarkable pace of development were to continue indefinitely.

While these problems are not solvable by today’s quantum computers, we believe that a quantum computer currently offers the best possibility for computational power that could be used to solve them.

The future success of quantum computing will be based on the development of a computer with a substantially higher number of qubits than our current computers.

We believe that we will find solutions to these challenges and that our proprietary technology and architecture and the technology exclusively available to us through exclusive license agreements will offer advantages both in terms of research and development as well as the ultimate product we wish to offer customers.

There are certainly thousands, if not millions, of important and fundamental unanswered questions about how the universe works and opportunities associated with the answers to those questions.

We envision a future powered by quantum computing and believe the 21 st

century is poised to be the dawn of this era.

Our mission is to be the leading quantum computing company enabling the new era of quantum computing.

We intend to fulfill our mission by:

Leveraging Our Technology

We believe that our technology offers substantial technological advantages compared to other competing quantum computing systems.

We intend to build upon our technological lead by leveraging our world-class team of leaders and engineers who are pioneers in quantum computing, with proven track records in innovation and technical leadership.

To date, we have developed and assembled six generations of quantum computer prototypes and systems, have constructed quantum operating systems and software tools, and have worked with leading cloud vendors, quantum programming languages and quantum software development kits.

Offering QCaaS

We intend to provide QCaaS, complemented by access to quantum experts and algorithm development capabilities.

We plan to manufacture, own and operate quantum computers, with compute units offered on a usage basis.

Our quantum computing solution is currently delivered via AWS Amazon Braket, Microsoft’s Azure Quantum and Google’s Cloud Marketplace.

We believe that by offering QCaaS, we can accelerate the adoption of our quantum computing solutions, while efficiently promoting quantum computing across our partner ecosystems.

Selling Direct Access to Quantum Computers

We intend to sell direct access to the quantum computers we manufacture, with units offered on a whole system or usage basis.

We believe that by offering direct access to quantum computing, we can assist select customers in deepening their application of quantum solutions.

Continuing to Enhance Our Proprietary Position

We have exclusively licensed our core technology from the University of Maryland and Duke University, and our complex technology is protected by an extensive patent portfolio.

We intend to continue to drive innovation in quantum computing and seek intellectual property protection where appropriate to enhance our proprietary technology position.

Further Developing Our Quantum Computing Partner Ecosystem

We believe our relationships with leading technology enterprises and university research institutes will accelerate innovation, distribution and monetization of our quantum capabilities.

Market Opportunity:

A Future Driven by Quantum Computing

The potential uses for quantum applications are widespread and address a number of problems that would be impossible to solve using classical computing technology.

According to a 2020 report from P&S Intelligence, the

total addressable market of quantum computing is expected to be approximately $65 billion by 2030.

Below are a few of the use cases in which we believe quantum computers, if they are successfully developed, will become an important tool for businesses to remain competitive in the market over the coming years.

Quantum Simulations in Chemistry

We believe that there are thousands of problems that could benefit from these quantum algorithms across the pharmaceutical, chemical, energy and materials industries.

An example of such a simulation problem is modeling the core molecule in the nitrogen fixation process to make fertilizer.

Nature is able to fixate nitrogen (i.e., turn atmospheric nitrogen into more useful ammonia) at room temperature.

Scientists, however, have only been able to achieve fixation using a resource-intensive, high-temperature, high-pressure process, called the Haber-Bosch process.

A cornerstone of the global agriculture industry, the Haber-Bosch process consumes about one percent of the world’s energy and produces about one percent of the world’s carbon dioxide.

Agronomists have attempted to model the core molecule in nature’s nitrogen fixation process, but the molecule is too large for today’s classical supercomputers to simulate.

Understanding the quantum process used in nature to fixate nitrogen could lead directly to more efficient ways for scientists to do the same.

Quantum chemistry simulation is expected to impact multiple markets and become an essential tool in chemical industries.

For example, computer-aided drug discovery in the pharmaceutical industry is limited by the computing time and resources required to simulate a large enough chemical system with sufficient accuracy to be useful.

If future generations of more powerful quantum computers are successfully developed, we believe that we could improve the speed and accuracy of virtual high-throughput screening and improve the molecular docking predictions used in structure-based drug discovery, dramatically reducing the development cost of new drugs and reducing the time to market.

Quantum Algorithms for Monte Carlo Simulations

Monte Carlo simulations are probability simulations used to calculate the expected distribution of possible outcomes in hard-to-predict

processes involving random variables.

Such simulations are used pervasively in finance, banking, logistics, economics, engineering and applied sciences.

A key parameter of Monte Carlo simulations is the degree of accuracy desired to attain with the result.

To obtain 99.9% accuracy, a classical computer requires around one million simulations.

Quantum algorithms, however, can achieve the same accuracy using only one thousand simulations, thereby significantly reducing the time it takes to perform Monte Carlo simulations.

This is especially important when running these simulations is expensive.

One application of the quantum Monte Carlo algorithm is to price options for the financial industry.

Simple options models are used ubiquitously in finance, the most famous of these being the Black-Scholes model.

However, these models fail to capture the complexities of real markets, and financiers use more sophisticated simulations to obtain better model predictions.

Currently, many of these models are limited by the number of simulations required to reach the desired accuracy within a fixed time budget.

Quantum algorithms for Monte Carlo simulations could give some financial firms a competitive advantage by enabling them to price options more quickly.

Quantum Algorithms for Optimization

Optimization problems have enormous economic significance in many industries, and they often cannot be solved with classical computers due to their daunting complexity.

Quantum algorithms are naturally suited for problems in which an exponential number of possibilities must be considered before an optimized output can be identified.

It is widely believed that quantum computers will be able to arrive at a better approximate optimization solution than classical computers can, and with reduced computational cost and time.

One method of quantum optimization is a hybrid method called the Quantum Approximate Optimization Algorithm, in which layers of quantum computations are executed within circuit parameters optimized using classical high-

performance computers.

Because optimization issues bedevil so many complicated processes in industries ranging from logistics to pharmaceutical drug design to climate modeling, the application of quantum algorithms to optimization problems could have far-reaching

impacts on society.

Quantum Machine Learning

Quantum computers can generate probability distributions that cannot be efficiently simulated on a classical computer.

Similarly, there are probability distributions that can only be efficiently distinguished from each other using a quantum computer.

In other words, quantum computers can “learn” things that are beyond the capabilities of classical computers.

Quantum computing is likely to offer new machine-learning modalities, greatly improving existing classical machine learning when used in tandem with it.

Examples of areas where quantum machine learning could have an impact are risk analysis in finance, natural language processing, and classification of multivariate chemical data.

Machine learning is used broadly in industry today, and we believe quantum machine learning could have a similarly broad impact.

As with any completely new technology, the use cases imagined by us today are only a subset of the opportunities that will emerge if future generations of more powerful quantum computers are successfully developed, as users understand the power of quantum algorithms.

Remaining Challenges in Quantum Computing Evolution

One can compare any particular quantum algorithm’s performance to the best classical algorithm for the same problem.

The point at which a quantum computer is able to perform a particular computation that exceeds its classical counterpart in speed or reduces its cost to solution is known as the point of “quantum advantage.”

Given the substantial research and development required to build a modern quantum computer that is both functional and practical, industry experts describe the remaining challenges in quantum computing to achieve quantum advantage as being solved in three phases.

Although none of these challenges have yet been fully solved, we believe that we are well positioned to do so.

A 2019 publicly available report by a leading third-party consulting firm describes these phases—and the associated technical barriers—as paraphrased below:

Noisy and intermediate-scale quantum (NISQ) computers

The earliest stage of development will see component demonstrations and intermediate-scale system development with limited commercial application.

The main technical barrier involves the mitigation of errors through improved fabrication and engineering of underlying qubit devices and advanced control techniques for the qubits.

These devices are used for developing and validating fundamentally new quantum approaches to tackling difficult problems, but are not expected to generate substantial commercial revenues.

Broad quantum advantage

In this stage, quantum computers are expected to provide an advantage over classical computers with a meaningful commercial impact.

The main technical barrier is the deployment of quantum error-correcting codes that allow bigger applications to be executed.

If this barrier can be overcome, we believe that quantum computing will offer practical solutions to meaningful problems superior to those provided by classical computers.

Full-scale fault tolerance

This last stage will see large modular quantum computers with enough power to tackle a wide array of commercial applications relevant to many sectors of the economy.

At this stage, classical computers are expected to no longer compete with quantum computers in many fields.

The technical barrier will be the adoption of a modular quantum computer architecture that allows the scalable manufacturing of large quantum computer systems.

Building a Quantum Computer

Requirements for Building Useful Quantum Computers

Quantum computers are difficult to build and operate because the physical system of qubits must be nearly perfectly isolated from its environment to faithfully store quantum information.

Yet the system must also be

precisely controlled through the application of quantum gate operations, and it must ultimately be measured with high accuracy.

A practical quantum computer requires well-isolated, near-perfect qubits that are cheap, replicable, and scalable, along with the ability to initialize, control, and measure their states.

Breakthroughs in physics, engineering, and classical computing were prerequisites for building a quantum computer, which is why for many decades the task was, and in some cases remains, beyond the limits of available technology.

To execute computational tasks, a quantum computer must be able to (i) initialize and store quantum information in qubits, (ii) operate quantum gates to modify information stored in qubits and (iii) output measurable results.

Each of these steps must be accomplished with sufficiently low error rates to produce reliable results.

Moreover, to be practical, a quantum computer must be economical in cost and scalable in compute power (i.e., the number of qubits and the number of gate operations) to handle real world problems.

The development of large-scale quantum computing systems is still in early stages, and several potential engineering architectures for how to build a quantum computer have emerged.

We are developing quantum computers based on individual atoms as the core qubit technology, which we believe has key advantages in scaling.

The ability to produce cheap error-corrected qubits at scale in a modular architecture is one of the key differentiators of our approach.

Today, we have achieved many engineering firsts in this field and we believe that, with our focus on achieving additional technical milestones over the next few years, we are well positioned to bring quantum computing advantage to the commercial market.

Scientific Approaches to Quantum Computing

There are a variety of different approaches to (or architectures for) building a quantum computer, each of which involves tradeoffs in meeting the three functional and practical requirements outlined above.

Roughly, approaches to performing a quantum computation fall into one of three categories:

natural quantum bits, solid state or classical computer simulation.

Natural quantum bits

In natural qubit-based quantum computers, a system is built around naturally-occurring substrates exhibiting quantum properties.

In atomic-based quantum computers, the qubits are represented by internal states of individual atoms trapped and isolated in a vacuum.

There are two categories within this approach:

the use of ionized (charged) atoms and the use of neutral atoms.

In this approach, the state of a photon, a particle of light, is used as the qubit.

Various aspects of a photon, such as presence/absence, polarization, frequency (color) or its temporal location can be used to represent a qubit.

In solid-state-based quantum computers, the qubits are engineered into the system.

Spins in semiconductors

This approach uses the spins of individual electrons or atomic nuclei in a semiconductor matrix.

There are two categories within this approach:

(1) the use of electrons trapped in quantum dot structures fabricated by lithographic techniques and (2) the use of atomic defects (or dopants) that capture single electrons.

The nuclear spin of the dopant atoms, or the nearby atoms to defects, are often used to store qubits.

Superconducting circuits

This approach uses circuits fabricated using superconducting material that features quantum phenomena at cryogenic temperatures.

Two states of the circuit, either charge states or states of circulating current, are used as the qubit.

Classical computer simulation

Classical computers in a data center can be used to simulate quantum computers.

Although useful for small-scale quantum experiments, quantum simulation on classical computers is still bound by the same limitations of classical computing and would require an impractical number of data centers to tackle meaningful quantum problems.

Our Technology Approach

Our Approach to Quantum Computing:

We have adopted the atom-based approach described above and use trapped atomic ions as the foundational qubits to construct practical quantum computers.

We are pursuing a modular computing architecture to scale their quantum computers, meaning that, if successful, individual quantum processing units will be connected to form increasingly powerful systems.

We believe that the ion trap approach offers the following advantages over other approaches:

Atomic qubits are nature’s qubits

Using atoms as qubits means that every qubit is exactly identical and perfectly quantum.

This is why atomic qubits are used in the atomic clocks that do the precise timekeeping for mankind.

Many other quantum systems rely upon fabricated qubits, which bring about imprecisions such that no single qubit is exactly the same as any other qubit in the system.

For example, every superconducting qubit comes with a different frequency (or must be tuned to a frequency) due to manufacturing imprecision.

Overall, we believe that systems relying upon fabrication of their qubits are more susceptible to error.

Trapped ion qubits are well-isolated from environmental influences

When a quantum system interacts with its environment, the quantum state loses coherence and is no longer useful for computing.

For example, in a superconducting qubit, the qubit tends to lose its coherence within approximately 10 to 50 microseconds.

Even neutral atoms are perturbed to some extent when they are trapped in space.

In contrast, trapped ion qubits are confined via electric fields in an ultra-high vacuum environment, and their internal qubits are hence perfectly isolated.

As a result, the coherence of trapped ions can be preserved for about an hour, and may be able to be preserved for longer if isolation technology improves.

Longer coherence times mean more computations can be performed before noise overwhelms the quantum calculation and are key to minimizing the overhead of error correction needed for large-scale quantum computers.

Lower overhead for quantum error-correction

Quantum error-correction will likely be necessary to reduce the operational errors in any large-scale quantum computations relevant to commercial problems.

Quantum error-correction uses multiple physical qubits to create an error-corrected qubit with lower levels of operational errors.

For solid-state architectures, we estimate that it may take at least 1,000 physical qubits to form a single error-corrected qubit, while for near-term applications with ion traps the ratio is closer to 16:1.

Trapped ion quantum computers can run at room temperature

Solid-state qubits currently require temperatures close to absolute zero (i.e., -273.15°

C, or -459.67°

F) to minimize external interference and noise levels.

Maintaining the correct temperature requires the use of large and expensive dilution refrigerators, which can hamper a system’s long-term scalability because the cooling space, and hence the system space, is limited.

Trapped ion systems, on the other hand, can operate at room temperature.

This is because the qubits themselves are not in thermal contact with the environment, as they are electromagnetically confined in free space inside a vacuum chamber.

The laser-cooling of the qubits themselves is extremely efficient because the atomic ions have very little mass and this requires just a single low-power

laser beam (microwatts).

This allows us to minimize the system size as technology progresses, while scaling the compute power and simultaneously reducing costs.

In superconducting and other solid-state architectures, individual qubits are connected via physical wires, hence a particular qubit can only communicate with a further-removed qubit by going through the qubits that lie in-between.

In the trapped ion approach, however, qubits are connected by electrostatic repulsion rather than through physical wires.

As a result, qubits in our existing systems can directly interact with any other qubit in the system.

Our modular architecture benefits from this flexible connectivity, significantly reducing the complexity of implementing a given quantum circuit.

Ion traps require no novel manufacturing capabilities

Ion trap chips consist of electrodes and their electrical connections, which are built using existing technologies.

The trap chips themselves are not

quantum materials.

They simply provide the conditions for the ion qubits to be trapped in space, and in their current state, they can be fabricated with existing conventional and standard silicon or other micro-fabrication technologies.

By contrast, solid-state qubits, such as superconducting qubits or solid- state silicon spins, require exotic materials and fabrication processes that demand atomic perfection in the structures of the qubits and their surroundings;

fabrication with this level of precision is an unsolved challenge.

Technological Complexity Creates Significant Barriers to Entry

Alongside the benefits of the trapped ion approach, there are several challenges inherent in it that serve as barriers-to-entry,

strengthening the advantages of our systems.

These key challenges include:

Complex laser systems

One of the challenges of trapped ion quantum computing is the set of lasers required and the degree to which they must be stable to operate the system.

Traditionally, these laser systems were assembled on an optical table on a component-by-component

basis, which led to serious stability and reliability issues.

We believe that we have resolved this issue from an engineering standpoint and that our future roadmap will further improve manufacturability.

Ultra-high vacuum (UHV) technology

The conventional method to achieve UHV conditions for ion trapping experiments involves using vacuum chamber designs with carefully chosen materials, assembly procedures with cumbersome electrical connections, and a conditioning procedure to prepare and bake the chamber at elevated temperatures for extended periods of time.

We have developed new approaches that we believe will substantially reduce the time and cost to prepare the UHV environment to operate the quantum computer.

Executing high fidelity gates with all-to-all

While trapped ion qubits feature the highest fidelity entangling gates, it is nevertheless a major technical challenge to design a control scheme that enables all qubits in a system to form gates with each other under full software control.

Through innovation in gate-implementation protocols, we believe that we have developed laser delivery and control systems that will allow us to implement fully programmable, fully connected gate schemes in our system.

Slow gate speeds

Compared to their solid-state counterparts, trapped ions are widely believed to have slow gate speeds.

While slow gate speeds are the case for many systems in operation today, both theoretical analyses and experimental demonstrations suggest this may not be a fundamental limit of trapped ion qubits (although this has not yet been demonstrated in commercial applications).

In fact, high-fidelity gates with speeds comparable to those of solid-state qubits have been realized in several research laboratories.

We expect that our future quantum computers based on barium ions will be faster, more powerful, more easily interconnected, and that feature more uptime for customers.

Moreover, we believe that as systems with other qubit technologies scale up, their restricted connectivity and high error-correction overhead will significantly slow down their overall computation time, which we believe will make the trapped ion approach more competitive in terms of operational speed.

Our Trapped Ion Implementation

The specific implementation of our trapped ion systems leverages the inherent advantages of the substrate and creates what we believe is a path for building stable, replicable and scalable quantum computers.

Trapped Ion Infrastructure

Our systems are built on individual atomic ions that serve as the computer’s qubits.

Maintaining identical, replicable, and cost-effective qubits is critical to our potential competitive advantage, and we have developed a process to produce, confine and manipulate atomic ion qubits.

To create trapped atomic ion qubits using our approach, a solid source containing the element of interest is either evaporated or laser-ablated to create a vapor of atoms.

Laser light is then used to strip one electron selectively from each of only those atoms of a particular isotope, creating an electrically charged ion.

Ions are then confined in a specific configuration of electromagnetic fields created by the trapping structure ( i.e.

, the ion trap), to which their motion is confined due to their charge.

The trapping is done in an UHV chamber to keep the ions well-isolated from the environment.

Isolating and loading a specific isotope of a specific atomic species ensures each qubit in the system is identical.

Two internal electronic states of the atom are selected to serve as the qubit for each ion.

The two atomic states have enough frequency separation that the qubit is easy to measure through fluorescence detection when an appropriate laser beam is applied.

To build quantum computers, many atomic ions are held in a single trap, and the repulsion from their charges naturally forces them into a stable linear crystal (or chain) of qubits.

The qubits are highly isolated in the UHV chamber, only perturbed by occasional collisions with residual molecules in the chamber, which provides near-perfect quantum memory that lasts much longer than most currently envisioned quantum computing tasks require.

The qubits are initialized and measured through a system of external gated laser beams.

An additional set of gated laser beams applies a force to selected ions and modulates the electrical repulsion between the ions.

This process allows the creation of quantum logic gates between any pair of qubits, regardless of their distance within the crystal, which can be arbitrarily reconfigured in software.

System Modularity and Scalability

Today, all qubits in our systems are stored on a single chip, referred to as a quantum processing unit (“QPU”).

QPUs can have several cores, or zones for trapping chains of ions, comparable to multicore central processing unit (“CPU”) chips in classical computing.

Each core can contain up to about 100 qubits in a linear crystal, and dozens of cores can potentially be co-located

in a single QPU.

Within a QPU, some qubits can be physically moved between cores to accommodate quantum communication between the cores.

This process of moving ions within a QPU is called “shuttling” and is achieved by modifying the electromagnetic fields that form the trap.

In addition to increasing the number of qubits per QPU, we believe we have identified, and we are currently developing, the technology needed to connect qubits between trapped ion QPUs, which may be commercially viable in the future.

This technology, known as a photonic interconnect, uses light particles to communicate between qubits while keeping information stored stably on either end of the interconnect.

The basic protocol for this photonic interconnect between ion traps in two different vacuum chambers was first realized by our co-founder

Christopher Monroe’s research team in 2007.

We believe this protocol can be combined with all-optical

switching technology to enable multi-QPU

quantum computers at large scale.

We have deep expertise in photonics;

while at Bell Labs, co-founder

Jungsang Kim led a team to build the world’s largest optical switch.

Photonic interconnects are designed to allow our systems to compute with entangled qubits spanning multiple QPUs, which we believe can open up the possibility of scaling quantum computers indefinitely, similar to how high-performance computers and data centers have been scaled.

Our quantum architecture is modular, meaning that if development of this architecture is successful, the number of qubits in a QPU, or the number of QPUs in a system, could be adjusted.

Also, by allowing for each qubit in a system to entangle with any other qubit in that system, we believe that a system’s number of quantum gates could increase rapidly with each additional qubit added.

This all-to-all

connectivity is one of the key reasons we believe our systems will be computationally powerful.

Gate Configuration

Our qubits are manipulated (for initialization, detection, and forming quantum logic gates) by shining specific laser beams onto the trapped ions.

Our systems employ a set of lasers and a sophisticated optical system to deliver beams precisely tailored to achieve this manipulation.

The laser beams are tailored by programming

radio frequency (“RF”) signals using state-of-the-art

digital chipsets, which are custom-configured to generate the signals for qubit manipulation.

An operating system manages the quantum computer, maintaining the system in operation.

It includes software toolsets for converting quantum programs from users into a set of instructions the computer hardware can execute to yield the desired computational results.

To support system access from the cloud, we offer cloud management tools and application programming interfaces (“APIs”) that permit programming jobs to run remotely.

Our quantum gates are fully programmable in software;

there is no “hard-wiring” of qubit connections in the quantum computing hardware.

The structure of a quantum circuit or algorithm can therefore be optimized in software, and the appropriate laser beams can then be generated, switched, or modulated to execute any pattern of gate interactions.

Our programmable gate configurations make our systems adaptable.

Unlike quantum computer systems that are limited to a single class of problems due to their architecture, we believe that any computational problem with arbitrary internal algorithmic structure could be optimized to run on our system (although this has not been demonstrated at scale).

Quantum Error Correction

A key milestone in building larger quantum computers is achieving fault-tolerant quantum error-correction.

In quantum error-correction, individual physical qubits prone to errors are combined to form an error-corrected qubit (sometimes referred to as a logical qubit) with a much lower error rate.

Determining how many physical qubits are needed to form a more reliable logical qubit (the resource “overhead”) depends on both the error rate of the physical qubits and the specific error-correcting codes used.

In 2020, our co-founder

Monroe’s research team at the University of Maryland demonstrated the first error-corrected qubit using 13 trapped ion qubits.

With our unique architecture, we believe quantum error-correction can be completely coded in software, allowing varying levels and depths of quantum error-correction to be deployed as needed.

Because the ion qubits feature very low idle and native error rates and are highly connected, we expect the error-correction overhead to be about 16:1 to achieve the first useful quantum applications.

This contrasts with other approaches, for which we estimate the overhead to be in the range of 1,000:1 to 100,000:1.

We believe our architectural decisions will make our systems uniquely capable of achieving scale.

We have published a roadmap for scaling to larger quantum computing systems, with concrete technological innovations designed to significantly shrink the physical size of the systems and their cost per qubit.

For example, we recently announced that through our partnership with the U.S.

Department of Energy’s Pacific Northwest National Laboratory (“PNNL”), we were able to shrink the barium source material down to a microscopic scale.

We believe this is significant because it will allow us to reduce the size of core system components, an important step in the creation of quantum computers small enough to be networked together.

However, meeting future milestones included in our roadmap is not guaranteed and is dependent on various technological advancements, which could take longer than expected to realize or turn out to be impossible to achieve.

We believe that, with engineering advancements and firsts yet to be achieved, our quantum computers will become increasingly compact and transportable, opening up future applications of quantum computing at the edge.

Our Forward-Looking Roadmap

In December 2020, we publicly released a forward-looking technical roadmap for the next eight years.

Our technical roadmap was designed to provide transparent guidance to our quantum computer users regarding when we expect certain quantum computing capabilities to become available.

As part of this roadmap, we introduced the notion of “algorithmic qubits” as a metric to measure progress.

The number of algorithmic qubits (#AQ) represents the total number of qubits that can be used to perform a quantum computational task that involves of order ~(#AQ) 2

entangling gate operations.

This metric provides a simple and effective measure to estimate the computational power of each generation of quantum computers.

At low #AQ, the size of the problem the quantum computer can tackle is limited by the error rate of the entangling gate operations, rather than by the number of physical qubits available in the computer.

The aggressive push for improving the power of quantum

computers, including the early introduction of quantum error-correction, is intended to significantly compress the time required for reaching the point when we expect quantum computers may become commercially impactful at scale.

We believe that many of the technological components needed to accomplish the performance goals of the roadmap, such as high-fidelity gate operations, photonic interconnects and quantum error-correction, have been realized in proof-of-concept

demonstrations in trapped ion systems.

Given our track record of engineering and technology development, we believe that, over time, we will be able to successfully translate these technology components into products, which may enable successful deployment of our quantum computers and deliver material commercial value to customers.

Our Modular Architecture is Designed to Scale with Smaller, Cheaper Systems for Each Generation

The scaling of classical computer technology, which unlocked continuously growing markets over many decades, was driven by exponential growth in computational power coupled with exponential reduction in the cost of computational power for each generation (Moore’s law).

The key economic driver permitting the expansion of digital computer applications to new segments of the market was this very phenomenon of capability doubling in each generation with costs rising only modestly.

We believe the scaling of quantum computing may follow a similar trajectory:

if the #AQ available in each generation scales dramatically, the per-AQ

cost would need to be reduced exponentially to enable true scaling of quantum computers.

Our systems have benefitted from years of architectural focus on scalability that addresses both #AQ and per-AQ

cost and, as such, we believe that if we are able to successfully solve remaining scalability challenges, these systems may become increasingly powerful and accessible in tandem.

At the heart of our approach is the modular architecture that may enable such growth.

We expect our future systems to be modular networks of many QPUs working together as a large quantum computer, similar to how classical data centers are designed, constructed and operated today.

Our engineering effort is focused on reducing the size, weight, cost and power consumption of the QPUs that will be the center of each generation of the modular quantum computer, while increasing the number of QPUs manufactured each year.

We intend to focus on achieving these engineering efforts over the next several years.

If successful, we expect that we may be able to achieve compact, lightweight and reliable quantum computers, which can be deployed at the edge, similarly to how personal computers have enabled new applications for both government and commercial use.

Our Business Model

Quantum Computing and the Software-as-a-Service

As quantum hardware matures, we expect the quantum computing industry to increasingly focus on practical applications for real-world problems, known as quantum algorithms.

Today, we believe that there are a large number of quantum algorithms widely thought to offer advantages over classical algorithms in that each of these algorithms can solve a problem more efficiently, or in a different manner, than a classical algorithm.

Our business model is premised on the belief that businesses with access to quantum computers will likely have a competitive advantage in the future.

We envision providing QCaaS, complemented by access to quantum experts and algorithm development capabilities, to solve the most challenging issues facing corporations, governments and other large-scale entities today.

We intend to manufacture, own and operate quantum computers, with compute units being offered to potential customers on a QCaaS basis.

We expect our target markets to experience two stages of quantum algorithm deployment:

the development stage and the application stage.

We expect our involvement in these two stages, to the extent they will take place, to be as follows:

During the development stage, our experts will assist customers in developing an algorithm to solve their business challenges.

Customers may be expected to pay for quantum compute usage, in addition

to an incremental amount for the consulting and development services provided in the creation of algorithms.

We may choose to sell this computing time to customers in a variety of ways.

In this stage, we expect revenue to be unevenly distributed, with individual customers potentially contributing to peaks in bookings.

During the application stage, once an algorithm is fully developed for a market, we anticipate that customers would be charged to run the algorithm on our hardware.

Given the mission critical nature of the use cases we anticipate quantum computing will attract, we believe a usage-based revenue model will result in a steady stream of revenue while providing the incremental ability to grow with customers as their algorithm complexity and inputs scale.

Our Customer Journey

In each new market that stands to benefit from quantum computing, we intend to guide our customers and partners through two stages:

the development phase and the application phase.

Development Phase:

This first stage focuses on quantum algorithm development and we expect it to involve deep partnerships between us and our customers to lay the groundwork for applying quantum solutions to the customer’s industry.

We also anticipate uneven revenue for this period given that the quantum computing market is still nascent.

We expect the development phase for each market to be characterized by the following go-to-market

Co-development

of quantum applications with strategic partners.

We intend to form long-term partnerships with select industry-leading companies (aligned with our technology roadmap) to co-develop

solutions for the partner and to provide an early-adopter advantage to the partner in their industry.

IonQ has announced co-development

agreements with Hyundai Motor Company to pursue solutions for battery chemistry and with GE Research to apply quantum computing to risk management.

Preferred compute agreements with clients

We expect our preferred offerings to give the customer’s application engineers direct access to our cutting-edge quantum systems, as well as technical support to pursue their solution development.

Cloud access to quantum computing

Our current and future cloud partnerships with AWS’s Amazon Braket, Microsoft’s Azure Quantum, Google’s Cloud Marketplace and other cloud providers are or will be designed to make access to quantum computing hardware available to a broader community of quantum programmers.

Dedicated hardware

We anticipate manufacturing and selling complete quantum systems for dedicated use by a single customer, to be hosted on premises by the customer or remotely by us.

Application Phase

This second phase is expected to commence if we are successful in demonstrating the commercial viability of quantum advantage in the industry and can therefore commence with developing commercial applications and applying that advantage broadly throughout the market with new customers.

Delivery of a full-scale quantum compute platform

For customers who have worked alongside us in the development phase to curate deep in-house

technical expertise in quantum computing capabilities at the time quantum advantage is achieved for the customer’s application, our preferred compute agreements, cloud offerings, and dedicated hardware sales are expected to offer sufficient quantum computational capacity.

Packaged solution offerings

When appropriate, we may develop full-stack quantum solutions that can be provided directly to customers, regardless of their in-house

quantum expertise.

Accelerated high-impact applications development

We intend to provide opportunities for accelerated applications development to customers seeking compressed development timelines to solve their biggest problems and drive efficiencies.

We expect the technical complexity of the solutions required for quantum algorithms to address each application area will impact the timing of that market’s inflection point and transition from the development phase to the application phase.

During the NISQ computing era, we expect quantum machine learning to be the first solution to transition into broadly available applications.

Additional markets taking advantage of quantum material science research and optimization speed-ups

may come online next if broad-scale quantum advantage becomes accessible.

If our quantum computers achieve full-scale fault tolerance, a diverse array of industries, ranging from quantum chemistry to deeper optimization, may be able to be transitioned to the application phase.

We sell access to our quantum computing solutions via AWS’s Amazon Braket, Microsoft’s Azure Quantum, and Google’s Cloud Marketplace, and directly to select customers via our own cloud service.

Making systems available through the cloud in both cases enables wide distribution.

Through our cloud service providers, potential customers across the world in industry, academia and government can access our quantum hardware with just a few clicks.

These platforms serve an important purpose in the quantum ecosystem, allowing virtually anyone to try our systems without an upfront commitment or needing to integrate with our platform.

Direct Access Customers

By directly integrating with us, customers can reserve dedicated execution windows, receive concierge-level application development support, gain early access to next-generation hardware, or host their own quantum computer.

Such access is currently limited to a select group of end-users.

We expect our standard offerings will include additional bundled value-add

services in exchange for an annual commitment, such as usage-based access to our cloud platform, reserved system time, consultations with solution scientists, and other application and integration support.

Agreements with the University of Maryland and Duke University

Exclusive License Agreement

In July 2016, we entered into a license agreement with the University of Maryland and Duke University, which was subsequently amended in September 2017, October 2017, October 2018, February 2021, April 2021 and September 2021 (as amended, the “License Agreement”), under which it obtained a worldwide, royalty-free, sublicensable license under certain patents, know-how

and other intellectual property to develop, manufacture and commercialize products for use in certain licensed fields, the scope of which would include the application of the licensed intellectual property in ion trap quantum computing.

The License Agreement provides an exclusive license under the universities’ interest in all patents (and non-exclusive

for other types of intellectual property), subject to certain governmental rights and retained rights by the universities and other non-profit

institutions to use and practice the licensed patents and technology for internal research and other non-profit

We can add patents and other intellectual property to the License Agreement through the UMD Option Agreement and Duke Option Agreement (each as defined below).

We are obligated to use commercially reasonable efforts to commercialize the inventions covered by the licensed patent rights and achieve certain milestones, including the hiring of a Chief Executive Officer, obtaining equity financing by specified times and such other milestones that we may specify in a development plan provided by us to the universities.

We have met all existing milestones as provided for in the License Agreement, have not included any additional milestones in any development plan provided to the universities, and no longer have any obligation to submit any future development plans to the universities.

We are also responsible for the prosecution and maintenance of the licensed patents, at our expense and using commercially reasonable efforts.

We have the sole right to enforce the licensed patents, at our expense.

We may terminate the License Agreement at any time for any reason with at least 90 days’ written notice to the University of Maryland.

The University of Maryland and Duke University may terminate the License Agreement if we enter into an insolvency-related event or in the event of our material breach of the agreement or other specified obligations therein, in each case, that remains uncured for 90 days after the date that it is provided with written notice of such breach by either university.

In consideration for the rights granted to us under the License Agreement, we issued the University of Maryland and Duke University shares of our common stock.

Pursuant to the University of Maryland policy, Christopher Monroe, our Chief Scientist, may receive renumeration from the University of Maryland relating to any stock we have issued to the University of Maryland.

Pursuant to Duke University’s policy, Christopher Monroe and Jungsang Kim, our Chief Technology Officer and Director, may receive renumeration from Duke University relating to any stock we have issued to Duke University.

Option Agreement with the University of Maryland

In July 2016, we entered into an option agreement with the University of Maryland, which was subsequently amended in February 2021 (as amended, the “UMD Option Agreement”), under which we obtained the right to add the University of Maryland’s interests in certain intellectual property to the License Agreement including if the intellectual property was developed by Christopher Monroe or by individuals under his supervision and such intellectual property relates to the field of ion trap quantum information processing devices.

We have added patents and other intellectual property to the License Agreement pursuant to the UMD Option Agreement.

The UMD Option Agreement provided that in the event of a sale or liquidation of us during the term of the agreement, the University of Maryland could receive additional consideration from such sale or liquidation to the extent that a holder of 0.5% of our common stock would receive more than the University of Maryland would otherwise receive based on its then current holdings of our common stock.

This provision was not triggered as a result of our business combination and lapsed at the closing of the business combination in September 2021.

Option Agreement with Duke University

In July 2016, we entered into an option agreement with Duke University, which was subsequently amended in December 2020 (as amended, the “Duke Option Agreement”), under which it obtained the right to add Duke University’s interests in certain patents or other intellectual property to the License Agreement, including if they were developed by Jungsang Kim, Christopher Monroe or Kenneth Brown, a professor at Duke University, or by individuals under their respective supervision and such patents or intellectual property relates to the field of quantum information processing devices.

We have added patents and other intellectual property to the License Agreement through the Duke Option Agreement.

Pursuant to the terms of the Duke Option Agreement, we issued Duke University shares of common stock, including shares of common stock issued pursuant to the amendment of the Duke Option Agreement.

The Duke Option Agreement terminates in July 2026.

Lease with the University of Maryland

In March 2020, we entered into an amended and restated office lease with the University of Maryland for the lease of our corporate headquarters and our research and development and manufacturing facility.

The lease expires on December 31, 2030.

We may terminate the lease with not less than 120 days written notice beginning in year six.

Any early termination will result in a termination fee ranging from $2.5 million in year six to $500,000 in year ten, with each year subject to a reduction of $0.5 million.

Annual base rent starts at $684,472 and increases approximately 3.0% each subsequent year.

There are many other approaches to quantum computing that use qubit technology besides the trapped ion approach we are taking.

In some cases, conflicting marketing messages from these competitors can lead to

confusion among our potential customer base.

Large technology companies such as Google and IBM, and startup companies such as Rigetti Computing, are adopting a superconducting circuit technology approach, in which small amounts of electrical currents circulate in a loop of superconducting material (usually metal where the electrical resistance vanishes at low temperatures).

The directionality of the current flow, in such an example, can represent the two quantum states of a qubit.

An advantage of superconducting qubits is that the microfabrication technology developed for silicon devices can be leveraged to make the qubits on a chip;

however, a disadvantage of superconducting qubits is that they need to be operated in a cryogenic environment at near absolute-zero temperatures, and it is difficult to scale the cryogenic technology.

Compared to the trapped ion approach, the qubits generated via superconducting suffer from short coherence times, high error rates, limited connectivity, and higher estimated error-correction overhead (ranging from 1,000:1 to 100,000:1 to realize the error-corrected qubits from physical qubits).

There are companies pursuing photonic qubits, such as PsiQuantum and Xanadu, among others.

PsiQuantum uses photons (i.e., individual particles of light) as qubits, whereas Xanadu uses a combination of photons and a collective state of many photons, known as continuous variable entangled states, as the qubits.

Each company’s approach leverages silicon photonics technology to fabricate highly integrated on-chip

photonic devices to achieve scaling.

The advantages to this approach are that photons are cheap to generate, they can remain coherent depending on the property of the photons used as the qubit, and they integrate well with recently-developed silicon photonics technology;

however, the disadvantages of photonic qubit approaches include the lack of high-quality storage devices for the qubits (photons move at the speed of light) and weak gate interactions (photons do not interact with one another easily).

Both of these problems lead to photon loss during computation.

Additionally, this approach requires quantum error correcting protocols with high overhead (10,000:1 or more).

Several other companies use a trapped ion quantum computing approach similar to ours, including Quantinuum Ltd.

and Alpine Quantum Technologies GmbH.

These companies share the fundamental advantages of the atomic qubit enjoyed by our approach.

The differences between our technology and that of these companies lies in our processor architecture, system design and implementation and our strategies to scale.

Based on publicly available information, Quantinuum processors operate with the application circuits broken down to two qubits at a time, with a bus width of two, and the ion qubits are shuffled between each gate operation.

Our processor core involves a wide-bus

architecture, where the interaction among a few dozens of atomic ion qubits can be controlled using programmable laser pulses.

This typically allows quantum logic gates between all possible pairs of qubits in the processor core without extraneous operations, which will enable us to operate some quantum gates that are not possible on other quantum architectures.

We have also demonstrated the ability to shuttle multiple processor cores on the same chip, increasing the potential qubit capacity of a system.

At scale, we believe these architectural features will confer benefits in the speed and efficiency of running algorithms.

At a higher level, our scaling architecture will exploit optical interconnects among multiple QPUs in a way that allows full connectivity between any pair of qubits across the entire system.

The modular scaling of multiple QPUs with photonic interconnects is unique in our architecture.

Lastly, there are alternative approaches to quantum computing being pursued by other private companies as well as the research departments at major universities or educational institutions.

To our knowledge, none of these alternative approaches has produced a commercial-grade quantum computer.

Intellectual Property

We protect our intellectual property rights via a combination of patent, trademark and trade secret laws in the United States and other jurisdictions, as well as with contractual protections, to establish, maintain and enforce rights in its proprietary technologies.

Unpatented research, development, know-how

and engineering skills make an important contribution to our business.

We pursue patent protection only when it is consistent with our overall strategy for safeguarding intellectual property.

In addition, we seek to protect our intellectual property rights through non-disclosure

and invention assignment agreements with our employees and consultants and through non-disclosure

agreements with business partners and other third parties.

We have accumulated a broad patent portfolio, both owned and exclusively licensed, across the range of technological fronts that make up our systems and will continue to protect our innovative inventions in the United States and other countries.

Our patent portfolio is deepest in the area of devices, methods and algorithms for controlling and manipulating trapped ions for quantum computing.

Our trade secrets primarily cover the design, configuration, operation and testing of its trapped-ion

quantum computers.

As of March 1, 2022, we own or license, on an exclusive basis, 34 issued U.S.

patents and 99 U.S.

pending or allowed patent applications, 74 foreign patent applications, 5 pending U.S.

trademark applications, and 7 registered U.S.

Our issued patents expire between 2029 and 2040.

Human Capital Management

Our employees are critical to our success.

As of December 31, 2021, we had a 97 person-strong team of quantum hardware and software developers, engineers, and general and administrative staff.

Approximately 62% of our full-time employees are based in the greater Washington, D.C.

metropolitan area.

We also engage a small number of consultants and contractors to supplement our permanent workforce.

A majority of our employees are engaged in research and development and related functions, and more than half of our research and development employees hold advanced engineering and scientific degrees, including many from the world’s top universities.

To date, we have not experienced any work stoppages and maintain good working relationships with our employees.

None of our employees are subject to a collective bargaining agreement or are represented by a labor union at this time.

Corporate Information

IonQ, formerly known as dMY Technology Group, Inc.

III (“dMY”) was incorporated in the state of Delaware in September 2020 and formed as a special purpose acquisition company.

Our wholly owned subsidiary, IonQ Quantum, Inc.

(formerly known as IonQ, Inc., and referred to as “Legacy IonQ” herein), was incorporated in the state of Delaware in September 2015.

On March 7, 2021, Legacy IonQ entered into an Agreement and Plan of Merger (the “Merger Agreement”), with dMY and Ion Trap Acquisition Inc., a direct, wholly owned subsidiary of dMY (the “Merger Sub”).

Pursuant to the Merger Agreement, on September 30, 2021, the Merger Sub was merged with and into Legacy IonQ with Legacy IonQ continuing as the surviving corporation following the Merger, becoming a wholly owned subsidiary of dMY and the separate corporate existence of the Merger Sub ceased.

Commensurate with the closing of the business combination, dMY changed its name to IonQ, Inc.

and Legacy IonQ changed its name to IonQ Quantum, Inc.

Our principal executive offices are located at 4505 Campus Drive, College Park, MD 20740, and our telephone number is (301) 298-7997.

corporate website address is www.ionq.com.

Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only.

Available Information

We are required to file Annual Reports on Form 10-K and Quarterly Reports on Form

10-Q with the SEC on a regular basis, and are required to disclose certain material events in a Current Report on Form 8-K.

The SEC maintains an Internet website that

contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

The SECs Internet website is located at www.sec.gov.

In addition, the Company will provide copies of these

documents without charge upon request from us in writing at 1180 North Town Center Drive, Suite 100, Las Vegas, Nevada 89144 or by telephone at (702) 781-4313.

Our website address is www.ionq.com

We make available on our website, free of charge, our Annual Reports, our Quarterly Reports on Form 10-Q

and our Current Reports on Form 8-K

and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange

Commission (the “SEC”).

The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov

The information found on our website is not incorporated by reference into this Annual Report or any other report we file with or furnish to the SEC.

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.

What changed 10-K

Item 1. Business