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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-03-04 compared with 2025-03-07 · 245 added, 272 removed, 770 unchanged (40% of the section changed)

Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule12b-2 of the Exchange Act and are not required to provide the information required under this item.

We are utilizing scaled disclosures for a smaller reporting company as defined by Rule12b-2 of the Exchange Act and are not required to provide the information required under this item.

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Consolidated Statements of Comprehensive Loss

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

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Current portion of deferred revenue

Current portion of debt

Current portion of operating lease liabilities

Total current liabilities

Debt, less current portion

Deferred revenue, less current portion

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Selling, general and administrative

Restructuring

Total operating expenses

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Net loss per share attributable to common stockholders – basic and diluted

Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted

Weighted average shares used to compute net loss per share attributable to common stockholders – basic and diluted

See accompanying notes to consolidated financial statements.

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Year Ended December 31,

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments

Unrealized gains on available-for-sale debt securities

Total other comprehensive (loss) income before income taxes

Total other comprehensive (loss) income after income taxes

Unrealized gain on available-for-sale debt securities

Total other comprehensive income (loss) before income taxes

Total other comprehensive income (loss) after income taxes

Total comprehensive loss

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Income (Loss)

Balance at December 31, 2022

Balance, December 31, 2023

Issuance of common stock upon exercise of stock options

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Proceeds from sale of common stock pursuant to the Common Stock Purchase Agreement - B.

Net proceeds from sale of common stock through At-The-Market ("ATM") Offering

Proceeds from sale of common stock through registered direct offering

Capitalization of deferred costs to equity upon share issuance

Stock-based compensation

Foreign currency translation gain

Foreign currency translation loss

Change in unrealized gains on available-for-sale securities

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Issuance of common stock upon release of RSUs

Proceeds from sale of common stock pursuant to the Common Stock Purchase Agreement - B.

Proceeds from sale of common stock through At-The-Market (ATM) Offering

Proceeds from sale of common stock through registered direct offering

Capitalization of deferred costs to equity upon share issuance

Proceeds from sale of common stock from Quanta private placement transaction

Net proceeds from sale of common stock through ATM Offering

Vesting of Promote Sponsor Vesting Shares

Vesting of Sponsor Redemption-Based Vesting Shares

Capitalization of offering costs to equity upon share issuance

Stock-based compensation

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Change in fair value of derivative warrant liabilities

Change in fair value of forward contract

Impairment of deferred offering costs

Accretion of available-for-sale securities

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Maturities of available-for-sale securities

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Principal repayments and prepayment and final payment fees of notes payable

Net payments of tax withholdings on sell-to-cover equity award transactions

Payments of principal of notes payable

Proceeds from sale of common stock through Common Stock Purchase Agreement

Proceeds from sale of common stock through At-The-Market (ATM) Offering

Proceeds from sale of common stock through ATM Offerings

Proceeds from sale of common stock through registered direct offering

Proceeds from sale of common stock from Quanta private placement transaction

Payments of offering costs

Proceeds from issuance of common stock upon exercise of stock options and warrants

Net proceeds (payments) from tax withholdings on sell-to-cover equity award transactions

Proceeds from issuance of common stock upon exercise of stock options

Proceeds from issuance of common stock upon exercise of warrants

Net cash provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents – beginning of period

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Non-cash investing and financing activities:

Capitalization of deferred costs to equity upon share issuance

Purchases of property and equipment recorded in accounts payable

Purchases of property and equipment recorded in accrued expenses

Non-cash addition to operating lease right-of-use assets and lease liability

Non-cash addition to operating lease right-of-use asset and liability

Reclassification of earn-out liabilities to additional paid-in capital for vesting of Sponsor Vesting Shares

Reclassification of derivative liabilities to additional paid-in capital due to exercise of Public Warrants

Unrealized gain on short term investments

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and its subsidiaries (collectively, the “Company” or “Rigetti”), builds quantum computers and the superconducting quantum processors that power them .

The Company markets a 9-qubit quantum processing unit (QPU) under the Novera™ QPU trade name.

Through the Company’s Quantum Computing as a Service (“QCaaS”) platform, the Company’s machines can be integrated into any public, private or hybrid cloud.

The Company sells 9-qubit to 108-qubit quantum computing systems under the Novera™ and Cepheus ™ trade names .

Through the Rigetti Quantum Cloud Services (QCS®) platform, the Company’s machines can be integrated into any public, private or hybrid cloud.

The Company is located and headquartered in Berkeley, California.

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London, United Kingdom;

Adelaide, Australia and British Columbia, Canada.

Adelaide, Australia;

British Columbia, Canada and Mumbai, India.

The Company’s revenue is derived primarily from operations in the United States and the United Kingdom.

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The primary asset acquired from SNII was cash that was assumed at historical costs.

Separately, the Company also assumed warrants that were deemed to be derivatives and meet liability classification subject to fair value adjustment measurements upon closing of the Business Combination (the “Closing”).

No goodwill or other intangible assets were recorded because of the Business Combination.

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The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the potential need for additional capital (or financing) in the future, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology.

Based on the Company’s forecasts, the Company believes that its existing cash and cash equivalents and available for sale investments should be sufficient to meet its anticipated operating cash needs for at least the next 12 months from the issuance date of these financial statements based on the Company’s current business plan and expectations and assumptions considering current macroeconomic conditions.

Based on the Company’s forecasts, the Company believes that its existing cash and cash equivalents and available for sale investments will be sufficient to meet its anticipated operating cash needs for at least the next twelve months from the issuance date of these financial statements based on the Company’s current business plan and expectations and assumptions considering current macroeconomic conditions.

Macroeconomic Conditions

Results of the Company’s operations have varied and may continue to vary based in part on the impact of changes in the domestic or global economy.

Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, financial and credit market fluctuations, international trade relations and tariffs, pandemics, political turmoil, natural catastrophes, warfare, and terrorist attacks in the United States or elsewhere, could negatively affect the Company’s business, including progress toward the development of quantum computing.

Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, financial and credit market fluctuations, supply chain constraints, international trade policies including tariffs and export controls, national security interests, pandemics, political turmoil, government shutdowns, natural catastrophes, warfare, and terrorist attacks in the United States or elsewhere, could negatively affect the Company’s business, including progress toward the development of quantum computing by increasing the cost of materials and components and our operating costs.

It is not possible at this time to estimate the long-term impact that these and related events could have on the Company’s business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

If these conditions persist and deepen, the Company could experience an inability to access additional capital if needed, or its liquidity could otherwise be impacted.

If the Company is unable to raise capital when needed and on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs and other efforts.

Principles of Consolidation

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The JOBS Act permits companies with EGC status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they apply to private companies.

The Company intends to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date the Company (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

The Company intends to use this extended transition period to enable it to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date the Company (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, the consolidated financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates.

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Accordingly, our CODM uses consolidated net loss to measure segment profit or loss, allocate resources and assess performance.

Further, the CODM reviews and utilizes natural expenses such as employee wages and benefits at a consolidated level and capital expenditures including asset additions to manage the Company’s operations and strategic growth initiatives.

Other segment items include restructuring costs, write-offs of the Ampere Computing forward warrant agreement asset and deferred offering costs, changes in fair value of derivative warrant liabilities and earnout liabilities and other operational expenses which are reflected in the consolidated statements of operations.

Further, the CODM reviews and utilizes natural expenses such as employee wages and benefits at a consolidated level to manage the Company’s operations and strategic growth initiatives.

Other segment items include interest income, changes in fair value of derivative warrant liabilities and earnout liabilities and other operational expenses which are reflected in the consolidated statements of operations.

Foreign Currency Translation and Transactions

The Company’s reporting currency is the US dollar.

The functional currencies of the Company’s foreign subsidiaries are their respective local currencies (UK pounds sterling, Australian dollar and Canadian dollar), which are the monetary unit of account of the principal economic environment in which the Company’s foreign subsidiaries operate.

The functional currencies of the Company’s foreign subsidiaries are their respective local currencies (UK pounds sterling, Australian dollar, Canadian dollar and Indian Rupee), which are the monetary unit of account of the principal economic environment in which the Company’s foreign subsidiaries operate.

Assets and liabilities of the foreign subsidiaries are translated into US dollars at exchange rates in effect at each period end.

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Comprehensive Loss

Comprehensive loss consists of two components including net loss and total other comprehensive (loss) income after taxes.

The Company’s total other comprehensive (loss) income consists of foreign currency translation adjustments that result from consolidation of its foreign subsidiaries and unrealized gains on available-for-sale debt securities.

Comprehensive loss consists of two components including net loss and total other comprehensive income (loss) after taxes.

The Company’s total other comprehensive income (loss) consists of foreign currency translation adjustments that result from consolidation of its foreign subsidiaries and unrealized gains on available-for-sale debt securities.

Cash and Cash Equivalents

The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents.

Cash and cash equivalents consist of funds maintained in demand deposit accounts, money market accounts and a U.S.

treasury security.

Cash and cash equivalents consist of funds maintained in demand deposit accounts, money market accounts and U.S.

treasury securities.

Cash and cash equivalent balances, at times, may exceed federally insured limits.

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See Note 4 for further information regarding fair value.

For purposes of identifying and measuring impairment, the policy election was made to exclude the applicable accrued interest pertaining to available-for-sale securities from both the fair value and amortized cost basis.

Applicable accrued interest, net of the allowance for credit losses (if any) of $ 3.1 million and $ 0.3 million, is recorded in other current assets in the consolidated balance sheets as of December 31, 2025 and December 31, 2024, respectively

Interest income and dividends are recognized in interest income on an accrual basis.

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Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets include prepaid software, prepaid insurance, other prepaid expenses and other current assets, all of which are expected to be recognized or realized within the next 12 months.

Deferred Offering Costs

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When such events or changes in circumstances occur, the Company performs an undiscounted cash flow analysis to determine if an impairment exists and, if so, an impairment loss would be recorded based on the excess of the carrying amount of the asset (asset group) over its fair value.

During each of the years ended December 31, 2024 and December 31, 2023, the Company determined there were triggering events related to share price declines or expected near term losses and an undiscounted cash flow analysis was performed.

During each of the years ended December 31, 2025 and December 31, 2024, the Company determined there were triggering events related to expected near term losses and an undiscounted cash flow analysis was performed.

Based on the results of this analysis, the Company’s long-lived assets were not impaired and no impairment charges were recorded.

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Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

Lease payments consist primarily of the fixed payments under the arrangement.The Company generally uses an incremental borrowing rate estimated based on the information available at the lease commencement date to determine the present value of lease payments unless the implicit rate is readily determinable.

Lease payments consist primarily of the fixed payments under the arrangement.

The Company generally uses an incremental borrowing rate estimated based on the information available at the lease commencement date to determine the present value of lease payments unless the implicit rate is readily determinable.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

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Lease and non-lease components for all other leases are generally accounted for separately.

Additionally, the Company does not record leases on the balance sheet that, at the lease commencement date, have a lease term of 12 months or less.

Additionally, the Company does not record leases on the balance sheet that, at the lease commencement date, have a lease term of twelve months or less.

Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities, and operating lease liabilities, less current portion in the accompanying consolidated balance sheets.

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Therefore, the Private Warrants are not considered indexed to the Company’s stock and should be classified as a liability.

Since the Private Warrants meet the definition of a derivative, the Company records the Private Warrants as liabilities in the consolidated balance sheet at fair value upon, with subsequent changes in the fair value recognized in the consolidated statements of operations at each reporting date.

Since the Private Warrants meet the definition of a derivative, the Company records the Private Warrants as liabilities in the consolidated balance sheet at fair value, with subsequent changes in the fair value recognized in the consolidated statements of operations at each reporting date.

The fair value of the Private Warrants are measured using the Black-Scholes option-pricing model.

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Earn-Out Liabilities

At the closing of the Business Combination, the Sponsor subjected the Sponsor Vesting Shares to forfeiture and vesting conditions as of the Closing Date, with vesting occurring only if thresholds related to the weighted average price of Common Stock are met for the duration of various specified consecutive day trading periods during the five-year period following the Closing as described in Note 10 (the “Earn-Out Triggering Events”).

Any such shares held by the Sponsor that remain unvested after the fifth anniversary of the Closing will be forfeited.

These Sponsor Vesting Shares are accounted for as liability classified instruments because the Earn-Out Triggering Events that determine the number of Sponsor Vesting Shares to be earned back by the Sponsor include outcomes that are not solely indexed to the Common Stock of the Company.

The aggregate fair value of the Sponsor Vesting Shares on the Closing Date was estimated using a Monte Carlo simulation model.

The earn-out liabilities are adjusted to fair value each reporting period using the Monte Carlo simulation model until such time as the Earn-Out Triggering Events are achieved or the Sponsor Vesting Shares are forfeited.

As of December 31, 2024, the Earn-Out Triggering Events were not achieved for any of the tranches of Sponsor Vesting Shares.

The Sponsor subjected the Sponsor Vesting Shares to vesting conditions and forfeiture, with vesting only occurring if thresholds related to the weighted average price of the Company’s Common Stock were met for various specified consecutive day trading periods during the five-year period following the closing of the Business Combination as described in Note 9 (the “Earn-Out Triggering Events”).

Any Sponsor Vesting Shares unvested after the fifth anniversary of the closing of the Business Combination were to be forfeited.

The Sponsor Vesting Shares were accounted for as liability classified instruments because the Earn-Out Triggering Events that determined the number of Sponsor Vesting Shares to be earned back by the Sponsor included outcomes that were not solely indexed to the Common Stock of the Company.

The aggregate fair value of the Sponsor Vesting Shares on the Closing Date were estimated using a Monte Carlo simulation model.

The earn-out liabilities were adjusted to fair value each reporting period using the Monte Carlo simulation model until such time as the Earn-Out Triggering Events were achieved and the Sponsor Vesting Shares became vested.

As of December 31, 2025, all of the Sponsor Vesting Shares were vested and the earn-out liabilities balance was zero .

See Note 9 for further information regarding the earn-out liabilities.

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● Recognize revenue when (or as) performance obligations are satisfied

The Company generates revenue through its Quantum Computing as a Service (“QCaaS”), sales of QPUs and custom computing components, and development contracts and other services.

The Company generates revenue from sales of QPUs, quantum computing systems, custom computing components, QCaaS, development contracts and other services.

Revenue related to the sale of QPUs, quantum computing systems, including Novera™ and Cepheus ™ , and custom quantum computing components is recognized at a point in time when obligations under the terms of the contract are satisfied and control is transferred to the customer, generally upon shipment for sales of QPUs and quantum computing systems, and upon customer acceptance for sales of custom quantum computing components.

Access to Rigetti quantum computing systems can be purchased as a quantum computing subscription, or on a usage basis for a specified quantity of hours.

Revenue related to subscription-based access to (“QCaaS”) is recognized over time as access to the systems is provided on a ratable basis over the subscription term, which can range from monthly to two years .

Revenue related to subscription-based access to QCaaS is recognized over time as access to the systems is provided on a ratable basis over the subscription term.

This time-based input measure of progress provides a faithful depiction of the transfer of the services because the benefits the customer obtains generally equals the benefit from its access to the systems throughout the subscription term.

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The Company believes this output method provides a faithful depiction of the transfer of the services because the customer has purchased a specified quantity of hours of usage that diminishes each time an hour is expended and therefore each hour of access to the systems is considered a discrete delivery of underlying services in these arrangements.

Revenue related to the sale of QPUs, including Novera™ , and custom quantum computing components is recognized at a point in time when obligations under the terms of the contract with our customer are satisfied, generally with the transfer of control upon shipment for sales of QPUs, and upon customer acceptance for sales of custom quantum computing components.

Development contracts are generally multi-year, non-recurring arrangements in which the Company provides professional services regarding practical applications of quantum computing to technology and business problems within the customer’s industry or organization and assists the customer in developing quantum algorithms and applications that will provide commercial value to the customer in areas of business interest.

Development contracts are generally fixed fee arrangements invoiced on a milestone basis but may also be invoiced on a time and materials or cost reimbursement basis in certain cases.

Revenue related to development contracts and other services is recognized over time based on completed milestones or hours or costs incurred as appropriate.

Revenue for partially completed milestones deemed probable of being met is recognized using an input measure based on actual labor hours incurred to date relative to total estimated labor hours needed to complete the milestone.

The Company believes this input measure of progress provides a faithful depiction of the transfer of the services because it closely depicts the Company’s efforts or inputs to the satisfaction of the performance obligation.

Development contracts are generally invoiced on a time and materials or cost-share basis or as fixed fee arrangements invoiced on a milestone basis.

Revenue related to development contracts and other services is recognized over time based on hours or costs incurred The Company believes these input measures of progress provide a faithful depiction of the transfer of the services because it closely depicts the Company’s efforts or inputs to the satisfaction of the performance obligation.

When the Company’s contracts with customers contain multiple performance obligations, the transaction price is allocated on a relative standalone selling price basis to each performance obligation.

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Payment terms on invoiced amounts are typically net 30 days.

The Company does not offer rights of return for its products and services in the normal course of business, and contracts generally do not include service-type warranties that provide any incremental service to the customer beyond providing assurance that the goods and services conform to applicable specifications or customer-specific or subjective acceptance provisions.

The Company does not offer rights of return for its products and services in the normal course of business, and contracts generally do not include significant service-type warranties that provide any incremental service to the customer beyond providing assurance that the goods and services conform to applicable specifications or customer-specific or subjective acceptance provisions.

The Company also excludes from revenue government-assessed and imposed taxes on revenue-generating activities that are invoiced to customers.

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The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.

Balance Sheet Reclassifications

Certain balance sheet accounts from the prior period have been reclassified to conform with the current period presentation.

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2020-06, Debt - (Topic 815) (“ASU No.

2020-06”), which simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity.

2020-06 was effective for the Company as of January 1, 2024.

The Company determined that the adoption of this standard did not have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures” (“ASU No.

2023-07 updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

2023-07 also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

2023-07 was effective for the Company for the year ended December 31, 2024, and interim periods within fiscal years beginning after December 15, 2024.

As a result of the Company’s adoption of ASU No.

2023-07, additional disclosures were included in Note 2 “Summary of Significant Accounting Policies” and Note 16 “Segments, Geographical Information, Concentrations and Significant Customers”.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.

In June 2022, the Financial Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2022-03- Fair Value Measurement (Topic 820):

“Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.

The FASB issued this update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.

ASU 2022-03 is effective for the Company for annual periods beginning after December 15, 2024, and interim periods within those fiscal years, with early adoption permitted.

The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.

ASU 2022-03 was effective for the Company for annual periods beginning after December 15, 2024, and interim periods within those fiscal years, with early adoption permitted.

The Company determined that the adoption of this standard did not have an impact on the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes – Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid.

ASU 2023-09 is effective for the Company for annual periods beginning after December 15, 2024 on a prospective basis.

Retrospective application is also permitted.

The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.

ASU 2023-09 was effective for the Company for annual periods beginning after December 15, 2024 on a prospective basis.

Retrospective application was also permitted.

The Company adopted this standard on a prospective basis.

As a result, the adoption of this standard did not have a material impact on the consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures:

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The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.

In May 2025, the FASB issued ASU 2025-04, “Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):

Clarifications to Share-Based Consideration Payable to a Customer,” which provides clarifying guidance on the accounting for share-based consideration payable to a customer.

ASU 2025-04 is effective for the Company for annual periods beginning after December 31, 2026.

Early adoption is permitted using either a full retrospective or modified retrospective transition method.

The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05 “Financial Statements – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets,” which provides practical expedients for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606 (revenue from contracts with customers).

ASU 2025-05 is effective for the Company for the interim and annual periods beginning after December 31, 2025.

Early adoption is permitted using either a full retrospective or modified retrospective transition method.

The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, “Accounting for Government Grants Received by Business Entities,” to establish guidance on the recognition, measurement, and presentation of government grants received by business entities.

The new guidance leverages the principles in the accounting framework for government assistance in the International Financial Reporting Standards, specifically International Accounting Standard No.

20, “Accounting for Government Grants and Disclosure of Government Assistance,” makes certain targeted improvements and modifies certain of the existing disclosure requirements in ASU 832, “Government Assistance”.

ASU 2025-10 is effective for public business entities in annual periods beginning after December 31, 2028 (including interim periods within) and one year later for all other entities with early adoption in any period for which financial statements have not been issued.

The guidance can be applied on a modified prospective basis, a modified retrospective basis, or a full retrospective basis.

The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.

(3) Investments

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Money market funds

treasury security

Cash equivalents

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Available-for-sale investments-long-term:

treasury security

treasury securities

Available-for-sale investments – long-term

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Money market funds

treasury security

Cash equivalents

Available-for-sale investments-short-term:

treasury securities

government agency bonds

Corporate bonds

Available-for-sale investments – short-term

Available-for-sale investments-long-term:

treasury security

Available-for-sale investments – long-term

The Company invests in highly rated investment grade debt securities.

All of the Company’s available-for-sale securities have final maturities of one year or less, except for one U.S.

treasury security classified as long-term which matures on March 31, 2026.

As of December 31, 2025, all of the Company’s available-for-sale securities have final maturities of one year or less, except for four U.S.

treasury securities classified as long-term with final maturities extending through May 15, 2027.

The Company reviews the individual securities that have unrealized losses on a regular basis.

The Company evaluates whether it has the intention to sell any of these investments and whether it is more likely than not that it will be required to sell any of them before recovery of the amortized cost basis.

Neither of these criteria were met as of December 31, 2024 or December 31, 2023, respectively.

The Company additionally evaluates whether the decline in fair value of the securities below their amortized cost basis is related to credit losses or other factors.

Based on this evaluation, the Company determined that the unrealized losses for its available-for-sale securities were primarily attributable to changes in interest

rates and non-credit-related factors.

Accordingly, the Company determined that none of the unrealized losses were other-than-temporary, and that recognition of an impairment charge was not required as of December 31, 2024 or December 31, 2023, respectively.

As of December 31, 2024, there was one security in an unrealized loss position with a market value of $ 24.4 million.

The amount of the loss on this security was inconsequential.

None of the Company’s available-for-sale securities have been in an unrealized loss position for more than one year.

No available-for-sale securities were sold during the years ended December 31, 2024 or December 31, 2023, respectively.

None of the Company’s available-for-sale securities were in an unrealized loss position as of December 31, 2025.

With respect to its available-for-sale securities in an unrealized loss position as of December 31, 2024, the Company determined that it would not need to sell any of them prior to recovery of the amortized cost basis.

The Company also determined that the unrealized losses for its available-for-sale securities as of December 31, 2024 were primarily attributable to changes in interest rates and non-credit-related factors.

Accordingly, the Company determined that none of the unrealized losses were other-than-temporary, and that recognition of an impairment charge was not required as of December 31, 2024.

No available-for-sale securities were sold during the years ended December 31, 2025 or December 31, 2024.

See Note 4 for additional information regarding the fair value of the Company’s investments.

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Money market funds

treasury security

Short-term investments:

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Long-term investments:

treasury security

treasury securities

Derivative warrant liability – Public Warrants

Derivative warrant liability – Private Warrants

Earn-out liabilities

Total Liabilities

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Money market funds

treasury security

Short-term investments:

U.S treasury securities

government agency bonds

Corporate bonds

treasury securities

Long-term investments:

treasury security

Derivative warrant liability – Public Warrants

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1) Derivative warrant liabilities—Public Warrants and Private Warrants, 2) Money Market Funds, 3) U.S.

treasury securities, 4) U.S.

government agency bonds and 5) Earn-out liabilities.

The Company had long-term debt with a variable interest which was repaid in full prior to December 31, 2024.

The carrying value of the long-term debt as of December 31, 2023 consisted of the original principal amounts borrowed, accretion of final payment fees, less principal payments and unamortized debt issuance costs.

The fair value of the Public Warrants has been measured based on the observable listed prices for such warrants, a Level 1 measurement.

treasury securities and 4) Earn-out liabilities.

The fair value of the Public Warrants and money market funds have been measured based on their observable listed prices, a Level 1 measurement.

The fair value of the Company’s Level 2 financial assets are determined by using inputs based on quoted market prices for similar instruments.

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The Private Warrants are measured at fair value using a Black Scholes model.

The fair value of the Earn-out liabilities are estimated using a Monte Carlo simulation model.

The Company estimates the volatility of its Private Warrants and Earn-out liabilities based on the historical volatility of the Company’s common stock.

The Company estimated the fair value of a Forward Warrant Agreement that was in place throughout most of 2023 using a forward analysis with unobservable inputs which included selected risk-free rate and probability outcomes.

During the year ended December 31, 2023, the Company reduced the estimated probability of occurrence for the Forward Warrant Agreement from 50 % to 0 % because Ampere’s obligation to make the additional payment under the Forward Warrant Agreement expired in October 2023 without taking effect.

See Note 5 for further discussion regarding the Forward Warrant Agreement.

Previously, the Company used the implied volatility of its Public Warrants in its valuation models for the Private Warrants and Earn-out liabilities.

As of December 31, 2024, the Company used the historical volatility of its common stock for these valuation models because the implied volatility of the Public Warrants was no longer meaningful due to the rapid increase in the price of the Public Warrants during the fourth quarter of 2024.

The fair value of the Earn-out liabilities as of December 31, 2024 were estimated using a Monte Carlo simulation model.

The Company estimated the volatility of its Private Warrants and Earn-out liabilities based on the historical volatility of the Company’s Common Stock.

As of December 31, 2025 and December 31, 2024, the Company used the historical volatility of its Common Stock for the applicable valuation models because the implied volatility of the Public Warrants was no longer meaningful due to the rapid increase in the price of the Public Warrants during the fourth quarter of 2024.

There were no other changes in fair value measurement techniques during the years ended December 31, 2025 or December 31, 2024.

There were no transfers in or out of Level 3 of the fair value hierarchy during the years ended December 31, 2024 or December 31, 2023, except for the conversion of Private Warrants, a Level 3 measurement, to Public Warrants, a Level 1 measurement.

During the years ended December 31, 2024 and December 31, 2023, Private Warrants converted to Public Warrant totaled 1,280,732 and 1,177,166 , respectively.

During the years ended December 31, 2024, and December 31, 2023, the favorable impact of the conversion on the Company’s net loss was $ 2.4 million and $ 0.5 million, respectively.

Current estimates of fair value may differ from the amounts presented.

During the year ended December 31, 2025, the vesting conditions for the Sponsor Redemption-Based Vesting Shares and the Promote Sponsor Vesting Shares (collectively the “Sponsor Vesting Shares” as defined in Note 9 below) were satisfied, and the underlying earn-out liabilities (Refer to Note 9 for Earn-out liabilities) were adjusted to fair value using the closing market price of the Company’s Common Stock on their respective vesting dates.

The earn-out liability for the Sponsor Redemption-Based Vesting Shares as of their August 14, 2025 vesting date was $ 10.4 million.

The earn-out liability for the Promote Sponsor Vesting Shares as of their February 6, 2025 vesting date was $ 32.9 million.

The earn-out liabilities for the Sponsor Redemption-Based Vesting Shares and the Promote Sponsor Vesting Shares were recorded to additional paid-in capital on their respective vesting dates.

As of December 31, 2025, all of the Sponsor Vesting Shares were vested and the earn-out liabilities balance was zero .

During the years ended December 31, 2025 and December 31, 2024, the number of Private Warrants (a Level 3 measurement) converted to Public Warrants (a Level 1 measurement) were 991,428 and 1,280,732 , respectively.

As of the date of conversion, the favorable impact of the transfer of the Private Warrants to Public Warrants on the Company’s net loss for the years ended December 31, 2025 and December 31, 2024, was $ 5.8 million and $ 2.4 million, respectively.

There were no transfers in or out of Level 3 of the fair value hierarchy during the years ended December 31, 2025 and December 31, 2024, other than conversion of Private Warrants to Public Warrants and the vesting of the Sponsor Vesting Shares as described above.

A summary of the changes in the fair value of the Company’s Level 3 financial instruments during the years ended December 31, 2025, and December 31, 2024, respectively, is as follows (in thousands):

3 unchanged sentences

Change in fair value during the year

Vesting of Sponsor Vesting Shares

Transfer from Private Warrants to Public Warrants

4 unchanged sentences

Balance – December 31, 2024

(5) Forward Warrant Agreement

In connection with the execution of the Merger Agreement in October 2021 (See Note 2), Rigetti entered into a warrant subscription agreement (“Forward Warrant Agreement”) with a strategic partner, Ampere Computing LLC (“Ampere”) for the purchase of a warrant for an aggregate purchase price (including amounts from exercise) of $ 10.0 million.

The Forward Warrant Agreement provided for the issuance of a warrant for the purchase of up to an aggregate of 1,000,000 shares of Common Stock at an exercise price of $ 0.0001 .

The purchase of the warrant was conditioned upon, among other things, the consummation of the Business Combination and the entry into a collaboration agreement between Rigetti and Ampere.

The parties entered into the collaboration agreement in January 2022.

Ampere was required to pay $ 5.0 million to Rigetti no later than the later of (i) the Closing and (ii) June 30, 2022.

On June 30, 2022, pursuant to the Forward Warrant Agreement, the Company issued the warrant to Ampere upon receipt of an aggregate of $ 5.0 million (including the exercise price), and upon such payment and issuance, 500,000 shares of the Company’s Common Stock vested under the warrant and were immediately exercised by Ampere pursuant to the terms of the warrant.

Ampere was required to pay an additional $ 5.0 million to Rigetti no later than the closing date of the listing of Ampere’s capital stock on a stock exchange, provided that if the listing had not occurred by the second anniversary of the Forward Warrant Agreement (October 2023), Ampere was not obligated to make the additional payment.

Ampere’s obligation to make the additional $ 5.0 million payment has now expired.

The Company filed a registration statement, pursuant to a Registration Rights Agreement with Ampere, registering the resale of the initial 500,000 shares issued under the warrant which was declared effective during the year ended December 31, 2022.

The Company evaluated the Forward Warrant Agreement as a derivative in conjunction with the guidance of ASC 480, “Distinguishing Liabilities from Equity”.

The Company calculated the fair value of the Forward Warrant Agreement at inception using the Forward Contract Pricing methodology.

The Forward Warrant Agreement was subsequently re-measured at each reporting period using the Forward Contract Pricing methodology with the change in fair value recorded in selling, general and administrative expense in the condensed consolidated statement of operations.

As a result, the Forward Warrant Agreement had no value as of December 31, 2024 or December 31, 2023.

(5) Property and Equipment, Net

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Accrued expenses and other current liabilities consist of the following (in thousands):

Property and other taxes

Property and equipment

Payroll and other payroll costs

Subcontractor cost

Accrued interest

Professional and subscription fees

Subcontractor cost

Property and other taxes

Property and equipment

( 7) Financing Arrangements

Loan and Security Agreement

On June 21, 2024, (the “Amendment Date”), the Company entered into the Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”), by and between Trinity Capital Inc., as lender (the “Lender”), and Rigetti & Co, LLC and Rigetti Intermediate LLC, as borrowers, which amended and restated in its entirety the Company’s existing loan and security agreement, dated as of March 10, 2021 (as amended from time to time, the “Existing Loan Agreement”).

The economic terms and cash flows of the Term Loans (defined below) remain unchanged under the Amended Loan Agreement.

Under the Existing Loan Agreement, the Company drew $ 12.0 million in March 2021, $ 8.0 million in May 2021, $ 7.0 million in November 2021 and $ 5.0 million in January 2022 (collectively, the “Term Loans”).

The outstanding principal balance of the Term Loans as of the Amendment Date was $ 16.2 million.

Each Term Loan was to be amortized in equal monthly installments through 48 months following the disbursement date of each Term Loan (each, a “Maturity Date”), with interest at a rate equal to the greater of 11 % or the US Prime Rate plus 7.50 % per annum, payable monthly.

The Company had the right to prepay the outstanding Term Loans, in whole or in part, subject to a prepayment premium that remains unchanged from the Existing Loan Agreement.

In addition, the Company was required to pay on the respective Maturity Date, or the date of an earlier prepayment, a final payment fee equal to 2.75 % of the aggregate original principal amount of the Term Loans, which remains consistent with the Existing Loan Agreement.

The final payment fees were being accreted and amortized into interest expense using the effective interest rate method over the term of the loan.

On June 21, 2024, (the “Amendment Date”), the Company entered into the Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”), by and between Trinity Capital Inc., as lender, and Rigetti & Co, LLC and Rigetti Intermediate LLC, as borrowers, which amended and restated in its entirety the Company’s existing loan and security agreement, dated as of March 10, 2021 (as amended from time to time, the “Existing Loan Agreement”).

The outstanding principal balance of the terms loans as of the Amendment Date was $ 16.2 million, and the economic terms and cash flows of the outstanding term loans remained unchanged under the Amended Loan Agreement.

Each term loan was to be amortized in equal monthly installments through 48 months following the disbursement date of each term loan, with interest at a rate equal to the greater of 11 % or the US Prime Rate plus 7.50 % per annum, payable monthly.

The Company had the right to prepay the outstanding term loans, in whole or in part, subject to a prepayment premium that remained unchanged from the Existing Loan Agreement.

In addition, the Company was required to pay on the respective maturity dates, or the date of an earlier prepayment, a final payment fee equal to 2.75 % of the aggregate original principal amount of the term loans, which remained consistent with the Existing Loan Agreement.

The final payment fees were being accreted and amortized into interest expense using the effective interest rate method over the terms of the loans.

On December 9, 2024, the Company prepaid in full all amounts owed under the Amended Loan Agreement.

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During the year ended December 31, 2024, the Company recorded a $ 0.4 million loss on the prepayment and extinguishment of the outstanding principal balance owed under the Amended Loan Agreement.

Long term debt and the unamortized discount balances as of December 31, 2023 were as follows (in thousands):

December 31, 2023

Outstanding principal amount

accreted liability of final payment fee

unamortized debt discount, long-term

current portion of long-term debt principal

Debt – net of current portion

Current portion of long-term debt – principal

current portion of unamortized debt discount

Debt – current portion

During the years ended December 31, 2024 and December 31, 2023, the Company recorded interest expense of $ 3.3 million and $ 5.8 million, respectively.

During the years ended December 31, 2024 and December 31, 2023, interest expense includes accretion of final payment fees, amortization of the underlying commitment fee and amortization of debt issuance costs totaling $ 0.8 million and $ 1.5 million, respectively.

The effective interest rate for all tranches of the debt was approximately 23.1 % and 22.5 % as of December 31, 2024 and December 31, 2023, respectively.

During the year ended December 31, 2024, the Company recorded interest expense of $ 3.3 million, which includes accretion of final payment fees, amortization of the underlying commitment fee and amortization of debt issuance costs totaling $ 0.8 million.

The effective interest rate for all tranches of the debt was approximately 23.1 % as of December 31, 2024.

( 8) Warrants

17 unchanged sentences

The fair value of the Public Warrants is measured at each reporting period based on the listed price for the warrants, with subsequent changes in the fair value recognized in the consolidated statement of operations at each reporting date.

During the year ended December 31, 2025, a total of 4,346,386 Public Warrants were exercised, each for one share of Common Stock in exchange for cash proceeds of $ 11.50 per share.

The proceeds from the warrant exercises totaled $ 50.0 million, and the underlying derivative liabilities for the Public Warrants on their respective exercise dates totaled $ 141.1 million.

The proceeds from the warrant exercises and the underlying derivative liabilities for the Public Warrants on their exercise dates were recorded to par value of Common Stock and additional paid-in capital.

No Public Warrants were exercised during the year ended December 31, 2024.

The calculated fair value of the derivative liability for the Public Warrants as of December 31, 2025 and December 31, 2024, was $ 85.8 million and $ 70.3 million, respectively.

3 unchanged sentences

If the Private Warrants are held by someone other the initial purchasers or such purchasers permitted transferees, then the Private warrants become Public Warrants and are redeemable by the company and exercisable by such holders on the same basis as the Public Warrants.

As of December 31, 2024 and December 31, 2023, Private Warrants issued and outstanding were 1,992,102 and 3,272,834 , respectively (Refer to Note 4 for fair value measurement).The Private Warrants are accounted for as a derivative liability.

During the years ended December 31, 2025 and December 31, 2024, the number of Private Warrants that converted to Public Warrants as a result of transfer from the initial purchaser (or such purchaser’s permitted transferees) to other holders were 991,428 and 1,280,732 , respectively.

As of December 31, 2025, and December 31, 2024, Private Warrants issued and outstanding were 1,000,674 and 1,992,102 , respectively (Refer to Note 4 for fair value measurement).

The Private Warrants are accounted for as a derivative liability.

The fair value of the Private Warrants is determined using the Black-Scholes option-pricing model, with subsequent changes in the fair value recognized in the consolidated statements of operations at each reporting date.

The calculated fair value of the derivative liability for the Private Warrants as of December 31, 2025 and December 31, 2024 was $ 16.8 million and $ 22.8 million, respectively.

The change in the fair value of the Private Warrants included in the consolidated statements of operations during the years ended December 31, 2024 and December 31, 2023 was a loss of $ 26.8 million and loss of $ 0.5 million, respectively.

The change in the fair value of the Private Warrants included in the consolidated statements of operations during the years ended December 31, 2025 and December 31, 2024 was a loss of $ 8.2 million and a loss of $ 26.8 million, respectively.

Significant inputs into the Black-Scholes option-pricing models used to value the Private Warrants at December 31, 2025 and December 31, 2024 are as follows:

6 unchanged sentences

Dividend yield (%)

During the years ended December 31, 2024 and December 31, 2023, Private Warrants converted to Public Warrants because of transfer from the initial purchasers or such purchasers permitted transferees to other holders were 1,280,732 and 1,177,166 , respectively.

Equity Classified Warrants

8 unchanged sentences

Customer Warrant

In February 2020, the Company issued a warrant to purchase 2,680,607 shares of Class A Common Stock to a customer in conjunction with a revenue arrangement (the “Customer Warrant”).

In February 2020, the Company issued a warrant to purchase shares of its Class A Common Stock to a customer in conjunction with a revenue arrangement (the “Customer Warrant”).

The Customer Warrant was assumed by the Company in connection with the Business Combination and converted into a warrant to purchase 2,680,607 shares of its Common Stock.

The Customer Warrant has an exercise price of $ 1.152 per share and has a 10 -year term to expiration.

1 unchanged sentence

The Customer Warrant can be exercised for cash or on a cashless basis.

The Customer Warrant was assumed by the Company in connection with the Business Combination and converted into a warrant to purchase shares of Common Stock.

The Company followed the guidance in ASC 718 and ASC 606 for the accounting of non-cash consideration payable to a customer.

8 unchanged sentences

(9) Earn-out Liabilities

Upon the closing of the Business Combination on March 2, 2022, SNII, Supernova Partners II LLC (the “Sponsor”) and SNII’s directors and officers (collectively the “Sponsor Holders”) subjected certain shares of Common Stock that they own (the “Sponsor Vesting Shares”) to forfeiture for a five-year period following the closing of the Business Combination, with vesting occurring only if thresholds related to the weighted average price of Common Stock are met as described below (the “Earn-out Triggering Events”).

Any such shares held by the Sponsor Holders that have not vested by the fifth anniversary of the closing of the Business Combination will be forfeited.

Upon the closing of the Business Combination on March 2, 2022, SNII, Supernova Partners II LLC (the “Sponsor”) and SNII’s directors and officers (collectively the “Sponsor Holders”) subjected certain shares of Common Stock (the “Sponsor Vesting Shares”) to forfeiture for a five-year period following the closing of the Business Combination, with vesting occurring only if thresholds related to the weighted average price of the Company’s Common Stock were met as described below (the “Earn-out Triggering Events”).

Any Sponsor Vesting Shares that were not vested by the fifth anniversary of the closing of the Business Combination were to be forfeited.

Sponsor Vesting Shares – Vesting Provisions:

(i) 2,479,000 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the closing of the Business Combination and will only vest if, during the five year period following the closing of the Business Combination, the volume weighted average price of Common Stock equals or exceeds $ 12.50 for any twenty trading days within a period of thirty consecutive trading days (such shares, the “Promote Sponsor Vesting Shares”), and

(ii) 580,273 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the closing of the Business Combination and will only vest if, during the five year period following the closing of the Business Combination, the volume weighted average price of Common Stock equals or exceeds $ 15.00 for any twenty trading days within a period of thirty consecutive trading days (such shares, the “Sponsor Redemption-Based Vesting Shares,” and, collectively with the Promote Sponsor Vesting Shares, the “Sponsor Vesting Shares”).

Any such shares held by the Sponsor Holders that remain unvested after the fifth anniversary of the closing of the Business Combination will be forfeited.

The $ 12.50 vesting condition with respect to the 2,479,000 shares of Common Stock held by the Sponsor Holders was satisfied in February 2025.

The Earn-out liabilities are adjusted to fair value each reporting period using the Monte Carlo simulation model until such time as the Earn-Out Triggering Events are achieved or the Sponsor Vesting Shares are forfeited.

The calculated fair value of the Earn-out liabilities with respect to the Sponsor Vesting Shares as of December 31, 2024 and December 31, 2023 was $ 45.9 million and $ 2.2 million, respectively.

The change in the fair value of the Earn-out liabilities included in the consolidated statements of operations for years ended December 31, 2024 and December 31, 2023 was a loss of $ 43.7 million and a loss of $ 0.9 million, respectively.

Significant inputs into the Monte Carlo simulation models as of December 31, 2024 and December 31, 2023 are as follows:

(i) 2,479,000 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the closing of the Business Combination and will only vest if, during the five year period following the closing of the Business Combination, the volume weighted average price of the Company’s Common Stock equals or exceeds $ 12.50 for any twenty trading days within a period of thirty consecutive trading days (such shares, the “Promote Sponsor Vesting Shares”), and

(ii) 580,273 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the closing of the Business Combination and will only vest if, during the five year period following the closing of the Business Combination, the volume weighted average price of the Company’s Common Stock equals or exceeds $ 15.00 for any twenty trading days within a period of thirty consecutive trading days (such shares, the “Sponsor Redemption-Based Vesting Shares,” and, collectively with the Promote Sponsor Vesting Shares, the “Sponsor Vesting Shares”).

During the year ended December 31, 2025, the Earn-out Triggering Events for each of the Sponsor Redemption-Based Vesting Shares and the Promote Sponsor Vesting Shares were satisfied, and the underlying earn-out liabilities were adjusted to fair value using the closing market price of the Company’s Common Stock on their respective vesting dates.

The earn-out liability for the Sponsor Redemption-Based Vesting Shares as of their August 14, 2025 vesting date was $ 10.4 million.

The earn-out liability for the Promote Sponsor Vesting Shares as of their February 6, 2025 vesting date was $ 32.9 million.

The earn-out liabilities for the Sponsor Redemption-Based Vesting Shares and the Promote Sponsor Vesting Shares were recorded to additional paid-in capital on their respective vesting dates.

As of December 31, 2025, all of the Sponsor Vesting Shares were vested and the earn-out liabilities balance was zero .

Prior to vesting, the Earn-out liabilities were adjusted to fair value each reporting period using the Monte Carlo simulation model.

The change in the fair value of the Earn-out liabilities included in the consolidated statements of operations during the years ended December 31, 2025 and December 31, 2024 was a gain of $ 2.5 million and a loss of $ 43.7 million, respectively.

The calculated fair value of the Earn-out liabilities with respect to the Sponsor Vesting Shares as of December 31, 2024 was $ 45.9 million.

Significant inputs into the Monte Carlo simulation model as of December 31, 2024 were as follows:

Valuation Assumptions

December 31, 2024

December 31, 2023

Simulated trading days

7 unchanged sentences

The Company did not include the five year option as part of its right-of-use assets and lease liabilities because exercise of the option was deemed unlikely.

The Company remeasured the lease liability for its Berkeley headquarters facility over the remaining lease term of 4.1 years using an incremental borrowing rate of 6.32 %.

During the year ended December 31, 2024, the Company remeasured the lease liability for its Berkeley headquarters facility over the remaining lease term of 4.1 years using an incremental borrowing rate of 6.32 %.

The effect of the lease amendment increased the Company’s operating lease right-of-use assets and operating lease liabilities by $ 2.3 million.

2 unchanged sentences

Operating lease cost

Variable lease cost

Short-term lease cost

Sub-lease income

Total lease cost

Total cash paid for amounts included in the measurement of operating lease liabilities was $ 2.2 million and $ 2.1 million for the years ended December 31, 2024 and December 31, 2023, respectively.

During the year ended December 31, 2024, there were no new operating leases with a lease term greater than 12 months except for the lease amendment for the Berkeley headquarters facility mentioned above.

Total cash paid for amounts included in the measurement of operating lease liabilities was $ 2.2 million for each of the years ended December 31, 2025 and December 31, 2024.

During the year ended December 31, 2025, there were no new operating leases with a lease term greater than 12 months.

As of December 31, 2025 and December 31, 2024 the weighted-average remaining lease term is approximately 3.46 years and 4.44 years, respectively, and the weighted-average discount rate is 7.68 % and 7.65 %, respectively.

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Stock-Based Awards—Options Outstanding

At-the-Market Offering Agreement

May 2025 Sales Agreement with Jefferies, LLC

On May 29, 2025, the Company entered into an Open Market Sale Agreement SM (the “Sales Agreement”) with Jefferies, LLC (the “Agent”) with respect to an At-the-Market offering program, pursuant to which the Company sold, from time to time at its sole discretion, shares of its Common Stock having an aggregate offering price of $ 350 million (the “ATM Offering”).

The shares offered and sold in the ATM Offering were issued and sold pursuant to the Company’s automatic shelf registration statement on Form S-3 and the related prospectus supplement, which the Company filed with the SEC on May 29, 2025.

The Company paid the Agent a commission of up to 3 % of the gross proceeds of the shares sold under the Sales Agreement, and the Company agreed to provide the Agent with customary indemnification rights.

The Sales Agreement contained customary representations and warranties and conditions to the sale of the shares pursuant thereto.

During the year ended December 31, 2025, the Company raised gross proceeds of $ 350 million from the sale of 30,309,780 shares of its Common Stock pursuant to the Sales Agreement, at a weighted average price of $ 11.55 per share, which represented the full amount of shares available for sale under the Sales Agreement.

The net proceeds from the Sales Agreement during the year ended December 31, 2025 were $ 346.7 million, after deducting Agent commissions totaling $ 3.3 million.

As of December 31, 2025, there were no remaining shares available for sale pursuant to the Sales Agreement.

March 2024 Sales Agreement with B.

Riley Securities, Inc.

and Needham & Company, LLC

On March 15, 2024, the Company entered into the Prior ATM Agreement with B.

Riley Securities, Inc.

and Needham & Company, LLC pursuant to which the Company sold, from time to time at its sole discretion, shares of its Common Stock having an aggregate offering price of $ 100 million.

During the year ended December 31, 2024, the Company raised gross proceeds of $ 100 million from the sale of 68,809,485 shares of its Common Stock pursuant to the Prior ATM Agreement at a weighted average price of $ 1.45 per share.

The net offering proceeds from the Prior ATM Agreement during the year ended December 31, 2024 were $ 97.5 million, after deducting sales agent commissions of $ 2.5 million.

As of December 31, 2025, there were no remaining shares available for sale under the Prior ATM Agreement.

Registered Direct Offering

1 unchanged sentence

During the year ended December 31, 2024, the Company raised gross proceeds of $ 100.0 million from the registered direct offering and received net proceeds of $ 96.0 million, after deducting sales agent commissions of $ 4.0 million.

At-the-Market Offering Agreement

On March 15, 2024, the Company entered into an At-the-Market (“ATM”) Sales Agreement (the “ATM Agreement”) with B.

Riley Securities, Inc.

and Needham & Company, LLC, pursuant to which the Company sold, from time to time at its sole discretion, shares of its Common Stock having an aggregate offering price of $ 100,000,000 .

The shares offered and sold in the ATM offering were issued pursuant to the Company’s effective shelf registration statement on Form S-3 and the related prospectus supplement.

The Company paid the sales agents a commission rate of up to 3 % of the gross sales proceeds and has agreed to provide the sales agents with customary indemnification, contribution and reimbursement rights.

The ATM Agreement contains customary representations and warranties and conditions to the placements of the shares pursuant thereto.

During the year ended December 31, 2024, the Company raised gross proceeds of $ 100 million pursuant to the ATM offering from the sale of 68,809,485 shares of its Common Stock at a weighted average price of $ 1.45 per share.

The net proceeds from the ATM offering during the year ended December 31, 2024 were $ 97.5 million, after deducting sales agent commissions of $ 2.5 million.

As of December 31, 2024, there were no remaining shares available for sale under the ATM offering agreement.

Common Stock Purchase Agreement

The Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B.

Riley Principal Capital II, LLC (“B.

The Company entered into the Purchase Agreement with B.

Riley on August 11, 2022 pursuant to which the Company was able to issue and sell to B.

9 unchanged sentences

as a result, the Purchase Agreement has terminated.

The Company was not able to sell shares of Common Stock under the Purchase Agreement for an extended period in early 2023 while its share price was trading below $ 1.00 per share.

As a result, the Company recognized impairment charges during the year ended December 31, 2023 of $ 0.8 million for previously deferred offering costs primarily related to the Purchase Agreement, which were recorded as selling, general and administrative expense in the accompanying condensed consolidated statement of operations.

(12) Stock-Based Compensation

16 unchanged sentences

Life (in years)

Value (in thousands)

Outstanding, December 31, 2024

( 2,350,771 )

Forfeited and expired

3 unchanged sentences

The vesting condition with respect to the market-based stock option grants was satisfied in January 2025.

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2024 and December 31, 2023 was $ 1.27 and $ 1.03 per share, respectively.

There were no stock options granted during the year ended December 31, 2025.

The weighted-average grant date fair value of stock options granted during the year ended December 31, 2024, was $ 1.27 .

The intrinsic value of a stock option is the amount by which the market price of the underlying Common Stock exceeds the option’s exercise price.

1 unchanged sentence

The Company received proceeds from stock option exercises during the years ended December 31, 2025 and December 31, 2024 of $ 2.0 million and $ 0.6 million, respectively.

Stock-based compensation expense related to stock options for the years ended December 31, 2024 and December 31, 2023 was $ 1.9 million and $ 1.5 million, respectively.

Stock-based compensation expense related to stock options was $ 1.9 million for each of the years ended December 31, 2025 and December 31, 2024.

As of December 31, 2025, the unrecognized compensation expense related to unvested stock options was $ 2.3 million, which is expected to be recognized over a weighted-average period of 1.64 years.

4 unchanged sentences

The implied volatility from the Company’s Public Warrants was excluded because the calculation did not produce a meaningful result.

The Company has not been public for a sufficient length of time to derive expected volatility solely from trading in its Common Stock.

The Company had not been public for a sufficient length of time to derive expected volatility solely from trading in its Common Stock.

The expected term of stock options granted was calculated using the simplified method, which represents the average of the contractual term and the weighted-average vesting period of the option.

The Company uses the simplified method because it does not have sufficient historical exercise data for its options to provide a reasonable basis upon which to estimate the expected term.

The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future.

The risk-free rate is based upon the U.S.

The assumed dividend yield was based upon the Company’s expectation of not paying dividends in the foreseeable future.

The risk-free rate was based upon the U.S.

Treasury yield curve in effect at the time of grant for the period equivalent to the expected term of the stock option.

1 unchanged sentence

Before the Business Combination, the fair value of the Common Stock had been determined by the board of directors at each award grant date based upon a variety of factors, including the results obtained from an independent third-party valuation, the Company’s financial position and historical financial performance, the status of technological developments within the Company, the composition and ability of the current engineering and management team, an evaluation or benchmark of the Company’s competition, the current business climate in the marketplace, the illiquid nature of the Company’s Common Stock, arm’s-length sales of the Company’s capital stock, the effect of the rights and preferences of the preferred shareholders, and the prospects of a liquidity event, among others.

The range of valuation assumptions used as inputs to the Black-Scholes option-pricing model to value service-based stock options granted during the years ended December 31, 2024 and December 31, 2023 were as follows:

The range of valuation assumptions used as inputs to the Black-Scholes option-pricing model to value service-based stock options granted during the year ended December 31, 2024 were as follows:

Valuation Assumptions

December 31, 2024

December 31, 2023

$ 0.98 - $ 2.03

$ 0.60 - $ 2.09

Annual volatility (%)

2 unchanged sentences

4.18 %- 4.45 %

3.63 %- 4.54 %

Expected term (years)

5 unchanged sentences

( 7,224,826 )

( 1,279,384 )

Non-vested at December 31, 2025

The Company’s RSUs generally have service-based vesting conditions ranging from 1 - 4 years, except that 3,850,000 RSUs granted in 2023 have a market-based vesting condition tied to the Company’s stock price.

Based upon the terms of such awards, 50 % of the shares vest if the Company’s Common Stock trades at or above $ 2.00 per share and the other 50 % of the shares vest if the Company’s Common Stock trades at or above $ 4.00 per share, for 20 out of 30 trading days through the fifth anniversary of the grant date.

As of December 31, 2025, all of the Company’s non-vested RSUs have a service-based vesting condition ranging from 1 - 4 years.

During the year ended December 31, 2023, the Company granted 3,850,000 RSUs with a market-based vesting condition tied to the Company’s stock price.

Based upon the terms of such awards, 50 % of the shares became vested when the Company’s Common Stock traded at or above $ 2.00 per share and the other 50 % of the shares became vested when the Company’s Common Stock traded at or above $ 4.00 per share, for 20 out of 30 trading days through the fifth anniversary of the grant date.

The $ 2.00 per share vesting condition was satisfied in December 2024, and the $ 4.00 per share vesting condition was satisfied in January 2025.

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The fair value of the Company’s service-based RSUs was calculated based on the fair market value of the Company’s Common Stock on the date of grant.

The 3,850,000 market-based RSUs granted in 2023 vest over the requisite service period and require continuous employment.

The fair value of the market-based RSUs granted during 2023 was based on the fair market value of the Company’s Common Stock on the date of grant using a Monte Carlo simulation model.

The weighted-average grant date fair value of the market-based RSUs granted during the year ended December 31, 2023 was $ 0.56 per RSU.

Significant inputs into the Monte Carlo simulation model used to value market-based RSUs granted during the year ended December 31, 2023 were as follows:

Valuation Assumptions

Simulated trading days

Annual volatility (%)

Risk- free rate (%)

Estimated time to expiration (years)

Stock-based compensation expense related to RSUs was $ 15.7 million and $ 11.2 million for the years ended December 31, 2025 and December 31, 2024, respectively.

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Net loss per share - basic and diluted

There are 3,059,273 Sponsor Vesting Shares that were not included in the computations of basic and diluted net loss per share for the years ended December 31, 2024 and December 31, 2023 because the contingencies for the issuance of these shares have not been met.

The vesting condition for all 2,479,000 Promote Sponsor Vesting Shares was satisfied on February 6, 2025, and the vesting condition for all 580,273 Sponsor Redemption-Based Vesting Shares was satisfied on August 14, 2025.

For the year ended December 31, 2025, the Promote Sponsor Vesting Shares and the Sponsor Redemption-Based Vesting Shares have been included in the computations of basic and diluted net loss per share from their respective vesting dates.

The Promote Sponsor Vesting Shares and the Sponsor Redemption-Based Vesting Shares were not included in the computations of basic and diluted net loss per share for the year ended December 31, 2024, because the vesting conditions related to these shares had not been met.

The weighted-average common shares outstanding for the years ended December 31, 2025 and December 31, 2024 include 682,939 and 963,297 weighted-average shares for warrants having an exercise price of $ 0.01 per share each, respectively.

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Restricted Stock Units

(1) The number of outstanding warrants does not include unvested customer warrants for 1,340,310 shares as of December 31, 2024 and December 31, 2023.

(1) The number of outstanding warrants does not include unvested customer warrants for 1,340,310 shares as of each of December 31, 2025 and December 31, 202 4.

(14) Revenue Recognition

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Deferred revenue, less current portion

Amounts recognized as revenue from beginning contract liabilities during the years ended December 31.

2024 and December 31, 2023 totaled $ 0.2 million and $ 0.8 million, respectively.

Amounts recognized as revenue from beginning contract liabilities during the years ended December 31, 2025 and December 31, 2024 totaled $ 0.1 million and $ 0.2 million, respectively.

Remaining performance obligations represent the portion of the transaction price that has not yet been satisfied or achieved.

As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 3.8 million.

The Company expects to recognize estimated revenues related to performance obligations that are unsatisfied (or partially satisfied) during the next twelve months, except for the non-current portion of deferred revenue of $ 0.7 million.

The Company expects to recognize estimated revenues related to performance obligations that are unsatisfied (or partially satisfied) during the next twelve months , except for remaining performance obligations totaling $ 0.8 million.

The Company has not identified any costs that are incremental to the acquisition of customer contracts that would be capitalized as deferred costs on the balance sheet in accordance with ASC 340-40.

Accordingly, the Company does not have any capitalized contract fulfillment costs as of December 31, 2024 or December 31, 2023, respectively.

Accordingly, the Company did not have any capitalized contract fulfillment costs as of December 31, 2025 or December 31, 2024.

(15) Segments, Geographical Information, Concentrations and Significant Customers

In addition to consolidated net loss, our CODM reviews and utilizes natural expenses such as employee wages and benefits at a consolidated level and capital expenditures including fixed asset additions to manage the Company’s operations and strategic growth initiatives.

In addition to consolidated net loss, our CODM reviews and utilizes natural expenses such as employee wages and benefits at a consolidated level to manage the Company’s operations and strategic growth initiatives.

The measure of segment assets is reported in the balance sheet as total consolidated assets.

The following table sets forth our segment information of revenue, expenses and net loss (in thousands):

The following table sets forth our segment information of revenue, significant segment expenses and net loss (in thousands):

Year Ended December 31,

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Segment and net loss

(1) Other segment items include interest income, restructuring costs, write-off of Ampere forward agreement and deferred offering costs, changes in fair value of derivative warrant liabilities and earnout liabilities and other operational expenses which are reflected in the consolidated statements of operations.

The following table presents a summary of our segment fixed asset additions (in thousands):

Year Ended December 31,

Quantum computing fridges

Process equipment

Leasehold improvements

Construction in progress and other assets

Total property and equipment

(1) Other segment items include interest income, changes in fair value of derivative warrant liabilities and earnout liabilities and other operational expenses which are reflected in the consolidated statements of operations .

The following table presents a summary of revenue by geography (in thousands):

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(16) Income Taxes

Domestic and foreign components of loss before income taxes are as follows:

Domestic and foreign components of loss before income taxes are as follows (in thousands):

Year Ended December 31,

The Company did not pay any income taxes for the years ended December 31, 2024 or December 31, 2023, respectively.

The Company did not pay any income taxes for the years ended December 31, 2025 or December 31, 2024.

All components of the Company’s current and deferred income tax provisions for the years ended December 31, 2025 and December 31, 2024 were zero .

The effective tax rate differs from the statutory rate, primarily due to the Company’s history of incurring losses which have not been benefited, write-off of federal and state net operating loss carryforwards and research and development tax credit carryforwards under Internal Revenue Code (IRC) section 382 limitation, stock-based compensation and other permanent differences.

On July 4, 2025, new federal tax and budget legislation, known as the “One Big Beautiful Bill Act” (“OBBA”) was signed into law.

The Company evaluated the impact of the OBBA and determined that its provisions did not have a material impact on the consolidated financial statements.

Upon adoption of ASU 2023-09, Improvement to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, the reconciliation of taxes at the federal statutory rate to the Company’s provision for income taxes for the year ended December 31, 2025, was as follows (in thousands, except for percentages):

Income taxes at the U.S.

federal statutory tax rate

State and local income taxes, net of federal income tax benefit

Foreign tax effects, foreign tax impacts

Changes in valuation allowances

Nontaxable or nondeductible items

Stock-based compensation

Executive compensation - IRC 162M

Fair market value adjustments

Significant components of the differences between the statutory tax rate and the Company’s effective tax rate for the year ended December 2024 are as follows:

Total pre-tax book income

State and local income taxes

Executive compensation - IRC 162M

Net operating loss limitation ownership change

Stock-based compensation

Fair market value adjustments

Change in valuation allowance

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the deferred income tax assets and liabilities as of December 31, 2024 and December 31, 2023, are as follows:

Significant components of the deferred income tax assets and liabilities as of December 31, 2025 and December 31, 2024, are as follows (in thousands):

Year Ended December 31,

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Net deferred tax assets

Significant components of the differences between the statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2024 and December 31, 2023 are as follows:

Year Ended December 31,

Total pre-tax book income

State and local income taxes

Executive Compensation - IRC 162M

Net operating loss limitation ownership change

Stock-based compensation

Fair market value adjustments

Change in valuation allowance

Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain.

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federal and state deferred tax assets have been fully offset by a valuation allowance.

The net change in total valuation allowance increased by approximately $ 17.9 million and decreased by $ 1.2 million for the years ended December 31, 2024 and December 31, 2023, respectively.

The net change in total valuation allowance increased by approximately $ 33.2 million and $ 17.9 million for the years ended December 31, 2025 and December 31, 2024, respectively.

As of December 31, 2025, the Company had net operating loss carryforwards for federal income tax purposes of $ 455.3 million, of which $ 453.9 million does not expire;

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Such annual limitations could result in the expiration of the net operating loss carryforwards and research and development tax credit carryforwards before their utilization.

During the year ended December 31, 2023, the Company assessed whether an ownership change, as defined by Section 382, occurred from its formation through December 31, 2022.

Based upon this assessment, the Company reduced the gross deferred tax assets related to its federal and state net operating loss carryforwards and federal research and development tax credit carryforwards.

For financial statement purposes, the Company previously included the federal and state net operating loss carryforwards and research and development tax credit carryforwards in deferred tax assets with a full valuation allowance.

Due to the valuation allowance, the reduction in the net operating loss carryforwards and research and development tax credit carryforwards did not have an impact on the Company’s net loss for the year ended December 31, 2023.

During the year ended December 31, 2024, the Company again assessed whether an ownership change, as defined by Section 382, occurred during the period from January 1, 2023 through December 31, 2024.

Based upon the updated assessment conducted in 2024, the Company concluded that an additional ownership change occurred in November of 2024;

however, based on the annual limitation from the November 2024 ownership change, none of the net operating losses or research and development tax credits are expected to expire prior to their potential use, as such there was no additional reduction to the gross deferred tax assets during the year ended December 31, 2024.

During the year ended December 31, 2024, the Company assessed whether an ownership change, as defined by Section 382, occurred during the period from January 1, 2023 through December 31, 2024.

Based upon the assessment conducted in 2024, the Company concluded that an ownership change occurred in November of 2024;

however, based on the annual limitation from the November 2024 ownership change, none of the net operating losses or research and development tax credits are expected to expire prior to their potential use, as such there was no reduction to the gross deferred tax assets during the year ended December 31, 2024.

The Company also assessed whether an ownership change occurred during the year ended December 31, 2025.

Based on the results of this assessment, the Company determined that an ownership change as defined by Section 382 did not occur during the year ended December 31, 2025.

The Company files U.S.

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The Company had unrecognized tax benefits of $ 24.1 million as of December 31, 2025, all of which are offset by a full valuation allowance.

These unrecognized tax benefits, if recognized, would no t affect the effective tax rate.

These unrecognized tax benefits, if recognized, would not affect the effective tax rate.

There were no interest or penalties accrued as of December 31, 2025.

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Ending balance

(18) Restructuring and severance

In February 2023, the Company announced an updated business strategy, including revisions to the Company’s technology roadmap.

In connection with this updated strategy, the Company implemented a workforce reduction to focus the organization and its resources on nearer-term strategic priorities.

The reduction in the workforce impacted approximately 50 employees or approximately 28 % of the Company’s then workforce.

Affected employees were offered separation benefits, including severance payments and temporary healthcare coverage assistance.

The Company began implementing activities with respect to the revised business plan, updated technology roadmap and reduction in workforce in February 2023 and incurred a restructuring charge of $ 1.0 million which was paid in full during 2023.

Work activities regarding the revised business plan and updated technology roadmap are ongoing.

In addition to the charge for restructuring, the Company also incurred $ 1.0 million for contractual severance benefits related to executive officers of the Company that were terminated in the year ended December 31, 2023.

The remaining balance in the Company’s accrual for contractual severance benefits related to executive officers as of December 31, 2023 of $ 0.2 million was paid out monthly through February 2024.

(17) Collaborative Arrangements

On February 27, 2025, the Company entered into a Collaboration Agreement (the “Collaboration Agreement”) with Quanta Computer Inc., a Taiwan corporation (“Quanta”).

The term of the Collaboration Agreement is for five years , subject to cancellation under certain circumstances.

Pursuant to the Collaboration Agreement, during the five year period following February 27, 2025, the Company has agreed it will invest at least $ 250.0 million in the field of quantum computing, in furtherance of its product roadmap, and Quanta has agreed it will invest at least $ 250.0 million in the field of quantum computing, and the investment by Quanta will be towards personnel and capital expenditures for developing products and services and manufacturing capability in furtherance of the Company’s product roadmap.

No equity or joint venture was formed under the Collaboration Agreement.

Costs incurred by the Company under the Collaboration Agreement, consisting of its expenditures for research and development and related capital, will be accounted for in accordance with GAAP as incurred.

Under the Collaboration Agreement, the Company will retain all rights, title and ownership to all QPU Technology (as defined in the Collaboration Agreement) and related intellectual property (IP) rights created in the course of activities specified in a statement of work under the Collaboration Agreement.

Other than the QPU Technology and IP rights described above, to the extent there is any jointly created, invented or other developed technology in the course of the performance of activities specified in a statement of work under the Collaboration Agreement, the Company and Quanta will jointly own, and each party will hold a one -half undivided interest in, all such joint project technology and all newly-created or newly-arising IP rights with respect thereto.

In connection with the Collaboration Agreement, on February 27, 2025, the Company entered into a securities purchase agreement with Quanta, pursuant to which the Company agreed to sell and issue to Quanta in a private placement transaction 3,020,412 shares of its Common Stock at a price per share of approximately $ 11.59 , for an aggregate value of approximately $ 35.0 million.

The price per share was based on the volume weighted-average price of the Company’s Common Stock for the 15 trading days prior to February 27, 2025.

The private placement transaction, which was subject to regulatory clearance, closed on April 29, 2025.

In connection with the private placement transaction, Quanta entered into a board observer and confidentiality agreement under which it has the option and right to appoint a single representative to attend certain meetings of the board of directors of the Company, subject to exceptions, in a non-voting observer capacity.

The securities purchase agreement also contains a lock-up provision prohibiting Quanta from selling any of the shares of the Company’s Common Stock acquired in the securities purchase agreement for a three year period following the closing of the private placement transaction.

(18) Accumulated Other Comprehensive Income (Loss)

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Balances at December, 2023

Other comprehensive income

Other comprehensive income (loss)

Balances at December, 2024

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There are no reclassification adjustments or income taxes associated with any of the components of accumulated other comprehensive income (loss).

(20) Contingencies

(19) Commitments and Contingencies

Legal Proceedings

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The Company has not incurred any costs as a result of such indemnification obligations and has not recorded any liabilities related to such obligations in the consolidated financial statements .

(21) Subsequent Event

On February 27, 2025, the Company entered into a Collaboration Agreement (the “Collaboration Agreement”) with Quanta Computer Inc., a Taiwan corporation (“Quanta”).

The term of the Collaboration Agreement is for five years , subject to cancellation under certain circumstances, including as a result of the failure to obtain the BIS Clearance (as defined below) by December 31, 2025.

The closing of the securities purchase agreement and private placement transaction referred to above is subject to (i) the expiration of a 30-day waiting period after the Company’s submission of a classification request to the Bureau of Industry and Security of the Department of Commerce (the “BIS Clearance”), (ii) the effectiveness of the Collaboration Agreement as of the closing, and (iii) the entry into a board observer and confidentiality agreement immediately prior to the private placement closing.

Quanta will have the option and right to appoint a single representative to attend certain meetings of the board of directors of the Company, subject to exceptions, in a non-voting observer capacity.

The securities purchase agreement also contains a lock-up provision prohibiting Quanta from selling any of the shares of the Company’s Common Stock acquired in the private placement transaction for a three year period following the closing of the private placement transaction.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 7A. Quantitative and Qualitative Disclosures About Market Risk