RGTI filing — read by section

Item 1. Financial Statements

Item 1. Financial Statements (Unaudited) 

 RIGETTI COMPUTING, INC 

 CONDENSED CONSOLIDATED BALANCE SHEETS 

 (UNAUDITED) 

 (In thousands, except share and per share amounts) 

 June 30,

 December 31,

 2022

 2021

 As Restated (1)

 Assets

 Current assets:
 
 Cash
 
 $ 
 184,020 
 
 $ 
 11,729 
 
 Accounts receivable
 
 2,572 
 
 1,543 
 
 Prepaid expenses and other current assets
 
 4,248 
 
 1,351 
 
 Forward contract - assets
 
 1,543 
 
 — 
 
 Deferred offering costs
 
 — 
 
 3,449 
 
 Total current assets
 
 192,383 
 
 18,072 
 
 Property and equipment, net
 
 30,583 
 
 22,497 
 
 Restricted cash
 
 117 
 
 317 
 
 Other assets
 
 130 
 
 165 
 
 Goodwill
 
 5,377 
 
 5,377 
 
 Total assets

 $ 
 228,590 
 
 $ 
 46,428 
 
 Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 Current liabilities:
 
 Accounts payable
 
 $ 
 1,517 
 
 $ 
 1,971 
 
 Accrued expenses and other current liabilities
 
 6,018 
 
 3,806 
 
 Deferred revenue
 
 1,108 
 
 985 
 
 Debt - current portion
 
 4,226 
 
 575 
 
 Forward contract - liabilities
 
 — 
 
 230 
 
 Total current liabilities
 
 12,869 
 
 7,567 
 
 Debt - net of current portion
 
 25,201 
 
 24,216 
 
 Derivative warrant liabilities
 
 12,148 
 
 4,355 
 
 Earn-out
 liabilities
 
 7,856 
 
 — 
 
 Other liabilities
 
 416 
 
 295 
 
 Total liabilities
 
 58,490 
 
 36,433 
 
 Commitments and contingencies (Note 5)
 
 Redeemable convertible preferred stock (2), par value $ 0.0001 per share; 0 shares and 80,974,757 shares authorized at June 30, 2022 and December 31, 2021, respectively; 0 shares and 77,696,679 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
 
 — 
 
 81,523 
 
 Stockholders’ (deficit) equity:
 
 Preferred Stock, par value $ 0.0001 per share; 10,000,000 shares and 0 shares authorized at June 30, 2022 and December 31, 2021, respectively; 0 shares and 0 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
 
 — 
 
 — 
 
 Common stock (2), par value $ 0.0001 per share; 1,000,000,000 shares and 134,050,472 shares authorized at June 30, 2022 and December 31, 2021, respectively; 117,102,735 shares and 18,221,069 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
 
 11 
 
 2 
 
 Additional paid-in
 capital
 
 407,015 
 
 135,549 
 
 Accumulated other comprehensive gain
 
 99 
 
 52 
 
 Accumulated deficit
 
 ( 237,025 
 ) 
 
 ( 207,131 
 ) 

 Total stockholders’ equity (deficit)
 
 170,100 
 
 ( 71,528 
 ) 

 Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 $ 
 228,590 
 
 $ 
 46,428 
 
 (1)
 
 For discussion on the restatement adjustments, see Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 (2)
 
 Shares of legacy Redeemable Convertible Series C Preferred Stock, Redeemable Convertible Series C-1
 Preferred Stock, legacy Class A common stock, and legacy Class B common stock have been retroactively restated to give effect to the Business Combination. 

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 
 
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 RIGETTI COMPUTING, INC 

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 

 (In thousands, except for share and per share amounts) 

 Three Months Ended

 Six Months Ended

 June 30,

 June 30,

 2022

 2021

 2022

 2021

 As Restated (1)

 As Restated (1)

 Revenue
 
 $ 
 2,134 
 
 $ 
 1,540 
 
 $ 
 4,238 
 
 $ 
 3,900 
 
 Cost of revenue
 
 873 
 
 365 
 
 1,287 
 
 637 
 
 Total gross profit
 
 1,261 
 
 1,175 
 
 2,951 
 
 3,263 
 
 Operating expenses:
 
 Research and development
 
 12,747 
 
 7,496 
 
 26,673 
 
 14,431 
 
 Sales and marketing
 
 1,487 
 
 644 
 
 2,963 
 
 957 
 
 General and administrative
 
 12,785 
 
 2,711 
 
 24,345 
 
 5,232 
 
 Total operating expenses
 
 27,019 
 
 10,851 
 
 53,981 
 
 20,620 
 
 Loss from operations
 
 ( 25,758 
 ) 
 
 ( 9,676 
 ) 
 
 ( 51,030 
 ) 
 
 ( 17,357 
 ) 

 Other (expense) income , net:
 
 Interest expense, net of interest income
 
 ( 1,040 
 ) 
 
 ( 405 
 ) 
 
 ( 2,244 
 ) 
 
 ( 481 
 ) 

 Change in fair value of derivative warrant liabilities
 
 7,980 
 
 — 
 
 11,750 
 
 — 
 
 Change in fair value of earn-out
 liability
 
 6,566 
 
 — 
 
 12,557 
 
 — 
 
 Transaction costs
 
 — 
 
 — 
 
 ( 927 
 ) 
 
 — 
 
 Other income (expense)
 
 — 
 
 7 
 
 — 
 
 ( 23 
 ) 

 Total other income (expense), net
 
 13,506 
 
 ( 398 
 ) 
 
 21,136 
 
 ( 504 
 ) 

 Net loss before provision for income taxes
 
 ( 12,252 
 ) 
 
 ( 10,074 
 ) 
 
 ( 29,894 
 ) 
 
 ( 17,861 
 ) 

 Provision for income taxes
 
 — 
 
 — 
 
 — 
 
 — 
 
 Net loss

 $ 
 ( 12,252 
 ) 
 
 $ 
 ( 10,074 
 ) 
 
 $ 
 ( 29,894 
 ) 
 
 $ 
 ( 17,861 
 ) 

 Net loss per share attribute to common stockholders - basic and diluted
 
 ( 0.11 
 ) 
 
 $ 
 ( 0.46 
 ) 
 
 ( 0.36 
 ) 
 
 $ 
 ( 0.82 
 ) 

 Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted (2)
 
 114,096,390 
 
 21,977,123 
 
 84,060,966 
 
 21,912,665 
 
 (1)
 
 For discussion on the restatement adjustments, see Note 1 —Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 (2)
 
 Weighted-average shares have been retroactively restated to give effect to the Business Combination. 

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 
 
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 RIGETTI COMPUTING, INC. 

 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) 

 (In thousands) 

 Three Months Ended

 Six Months Ended

 June 30,

 June 30,

 2022

 2021

 2022

 2021

 As Restated (1)

 As Restated (1)

 Net loss
 
 $ 
 ( 12,252 
 ) 
 
 $ 
 ( 10,074 
 ) 
 
 $ 
 ( 29,894 
 ) 
 
 $ 
 ( 17,861 
 ) 

 Other comprehensive gain (loss):
 
 Foreign currency translation gain (loss)
 
 38 
 
 ( 2 
 ) 
 
 47 
 
 50 
 
 Comprehensive loss

 $ 
 ( 12,214 
 ) 
 
 $ 
 ( 10,076 
 ) 
 
 $ 
 ( 29,847 
 ) 
 
 $ 
 ( 17,811 
 ) 

 (1)
 
 For discussion on the restatement adjustments, see Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 
 
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 RIGETTI COMPUTING, INC. 

 CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY (UNAUDITED) 

 (In thousands) 

 Accumulated
 Other

 Comprehensive

 Gain

 Redeemable Convertible Preferred Stock

 Common Stock

 Additional Paid-In

 Capital

 Accumulated

 Deficit

 Total Stockholders’

 (Deficit) Equity

 Shares

 Amount

 Shares

 Amount

 As Restated (1)

 As Restated (1)

 As Restated (1)

 (In thousands, except share and per share data)

 Balance, December 31, 2021

 98,726,505 
 
 $ 
 81,523 
 
 23,153,127 
 
 $ 
 — 
 
 $ 
 135,551 
 
 $ 
 52 
 
 $ 
 ( 207,131 
 ) 
 
 $ 
 ( 71,528 
 ) 

 Retroactive application of Business Combination (Note 3)
 
 ( 21,029,826 
 ) 
 
 — 
 
 ( 4,932,058 
 ) 
 
 2 
 
 ( 2 
 ) 
 
 — 
 
 — 
 
 — 
 
 Adjusted balance, beginning of period (2)

 77,696,679 
 
 81,523 
 
 18,221,069 
 
 2 
 
 135,549 
 
 52 
 
 ( 207,131 
 ) 
 
 ( 71,528 
 ) 

 Issuance of common stock upon conversion of legacy Series C and Series C-1
 preferred stock in connection with the Business Combination (Note 3)
 
 ( 77,696,679 
 ) 
 
 ( 81,523 
 ) 
 
 57,380,563 
 
 6 
 
 81,517 
 
 — 
 
 — 
 
 81,523 
 
 Issuance of common stock upon exercise of legacy Rigetti stock options
 
 — 
 
 — 
 
 1,123,539 
 
 — 
 
 574 
 
 — 
 
 — 
 
 574 
 
 Issuance of common stock upon exercise of legacy Rigetti common stock warrants
 
 — 
 
 — 
 
 2,234,408 
 
 — 
 
 28 
 
 — 
 
 — 
 
 28 
 
 Issuance of common stock through Business Combination and PIPE financing, net of transaction costs and derivative liabilities (Note 3) (1)
 
 — 
 
 — 
 
 34,850,706 
 
 3 
 
 159,535 
 
 — 
 
 — 
 
 159,538 
 
 Stock-based compensation
 
 — 
 
 — 
 
 — 
 
 — 
 
 11,481 
 
 — 
 
 — 
 
 11,481 
 
 Foreign currency translation gain
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 9 
 
 — 
 
 9 
 
 Net loss (1)
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 17,642 
 ) 
 
 ( 17,642 
 ) 

 Balance, March 31, 2022

 — 
 
 $ 
 — 
 
 113,810,285 
 
 $ 
 11 
 
 $ 
 388,684 
 
 $ 
 61 
 
 $ 
 ( 224,773 
 ) 
 
 $ 
 163,983 
 
 Issuance of common stock upon exercise of stock options
 
 — 
 
 — 
 
 229,606 
 
 — 
 
 62 
 
 — 
 
 — 
 
 62 
 
 Issuance of common stock upon exercise of common stock warrants
 
 — 
 
 — 
 
 1,702,210 
 
 — 
 
 5,011 
 
 — 
 
 — 
 
 5,011 
 
 Issuance of common stock upon release of RSUs
 
 — 
 
 — 
 
 1,360,634 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Reclassification of loan and security agreement warrants to equity
 
 — 
 
 — 
 
 — 
 
 — 
 
 6,370 
 
 6,370 
 
 Settlement of the first tranche of forward contract
 
 — 
 
 — 
 
 ( 3,305 
 ) 
 
 ( 3,305 
 ) 

 Stock-based compensation
 
 — 
 
 — 
 
 — 
 
 — 
 
 11,041 
 
 — 
 
 — 
 
 11,041 
 
 Capitalization of deferred costs to equity upon share issuance
 
 ( 848 
 ) 
 
 ( 848 
 ) 

 Foreign currency translation gain
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 38 
 
 — 
 
 38 
 
 Net loss (1)
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 12,252 
 ) 
 
 ( 12,252 
 ) 

 Balance, June 30, 2022

 — 
 
 $ 
 — 
 
 117,102,735 
 
 $ 
 11 
 
 $ 
 407,015 
 
 $ 
 99 
 
 $ 
 ( 237,025 
 ) 
 
 $ 
 170,100 
 
 (1)
 
 For discussion on the restatement adjustments, see Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 (2)
 
 Shares of legacy Redeemable Convertible Series C Preferred Stock, Redeemable Convertible Series C-1
 Preferred Stock, legacy Class A common stock, and legacy Class B common stock have been retroactively restated to give effect to the Business Combination. 

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 
 
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 RIGETTI COMPUTING, INC. 

 CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY (UNAUDITED) (CONTINUED) 

 (In thousands) 

 Redeemable Convertible Preferred Stock

 Common Stock

 Additional Paid-In

 Capital

 Accumulated Other

 Comprehensive

 Gain (Loss)

 Accumulated

 Deficit

 Total Stockholders’

 (Deficit) Equity

 Shares

 Amount

 Shares

 Amount

 (In thousands, except share and per share data)

 Balance, December 31, 2020

 98,726,505 
 
 $ 
 81,523 
 
 20,975,317 
 
 $ 
 — 
 
 $ 
 133,144 
 
 $ 
 5 
 
 $ 
 ( 165,405 
 ) 
 
 $ 
 ( 32,256 
 ) 

 Retroactive application of Business Combination (Note 3)
 
 ( 21,029,826 
 ) 
 
 — 
 
 ( 4,467,972 
 ) 
 
 2 
 
 ( 2 
 ) 
 
 — 
 
 — 
 
 — 
 
 Adjusted balance, beginning of period (2)

 77,696,679 
 
 81,523 
 
 16,507,345 
 
 2 
 
 133,142 
 
 5 
 
 ( 165,405 
 ) 
 
 ( 32,256 
 ) 

 Issuance of common stock upon exercise of stock options
 
 — 
 
 — 
 
 118,566 
 
 — 
 
 26 
 
 — 
 
 — 
 
 26 
 
 Stock-based compensation
 
 — 
 
 — 
 
 — 
 
 — 
 
 597 
 
 — 
 
 — 
 
 597 
 
 Foreign currency translation gain
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 52 
 
 — 
 
 52 
 
 Net loss
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 7,787 
 ) 
 
 ( 7,787 
 ) 

 Balance, March 31, 2021

 77,696,679 
 
 $ 
 81,523 
 
 16,625,911 
 
 $ 
 2 
 
 $ 
 133,765 
 
 $ 
 57 
 
 $ 
 ( 173,192 
 ) 
 
 $ 
 ( 39,368 
 ) 

 Issuance of common stock upon exercise of stock options
 
 — 
 
 — 
 
 338,979 
 
 — 
 
 90 
 
 — 
 
 — 
 
 90 
 
 Issuance of common stock upon exercise of common stock warrants
 
 — 
 
 — 
 
 111,229 
 
 — 
 
 1 
 
 — 
 
 — 
 
 1 
 
 Stock-based compensation
 
 — 
 
 — 
 
 — 
 
 — 
 
 521 
 
 — 
 
 — 
 
 521 
 
 Foreign currency translation loss
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 2 
 ) 
 
 — 
 
 ( 2 
 ) 

 Net loss
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 10,074 
 ) 
 
 ( 10,074 
 ) 

 Balance, June 30, 2021

 77,696,679 
 
 $ 
 81,523 
 
 17,076,119 
 
 $ 
 2 
 
 $ 
 134,377 
 
 $ 
 55 
 
 $ 
 ( 183,266 
 ) 
 
 $ 
 ( 48,832 
 ) 

 (2) 
 Shares of legacy Redeemable Convertible Series C Preferred Stock, Redeemable Convertible Series C-1
 Preferred Stock, legacy Class A common stock, and legacy Class B common stock have been retroactively restated to give effect to the Business Combination. 
 
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 
 
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 RIGETTI COMPUTING, INC. 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 

 (In thousands) 

 Six Months Ended

 June 30,

 2022

 2021

 As Restated (1)

 Cash flows from operating activities

 Net loss
 
 $ 
 ( 29,894 
 ) 
 
 $ 
 ( 17,861 
 ) 

 Adjustments to reconcile net loss to net cash used in operating activities:
 
 Depreciation and amortization
 
 2,978 
 
 2,362 
 
 Stock-based compensation
 
 22,522 
 
 1,118 
 
 Change in fair value of earnout liability
 
 ( 12,557 
 ) 
 
 — 
 
 Change in fair value of derivative warrant liabilities
 
 ( 11,750 
 ) 
 
 — 
 
 Change in fair value of forward contract
 
 ( 5,077 
 ) 
 
 — 
 
 Amortization of debt issuance costs
 
 667 
 
 — 
 
 Changes in operating assets and liabilities:
 
 Accounts receivable
 
 ( 1,030 
 ) 
 
 ( 241 
 ) 

 Prepaid expenses and other current assets
 
 ( 2,898 
 ) 
 
 ( 530 
 ) 

 Other assets
 
 34 
 
 ( 36 
 ) 

 Deferred revenue
 
 123 
 
 ( 119 
 ) 

 Accounts payable
 
 ( 882 
 ) 
 
 709 
 
 Accrued expenses and other current liabilities
 
 2,557 
 
 692 
 
 Other liabilities
 
 122 
 
 ( 192 
 ) 

 Net cash used in operating activities

 ( 35,085 
 ) 
 
 ( 14,098 
 ) 

 Cash flows from investing activities

 Purchases of property and equipment
 
 ( 10,636 
 ) 
 
 ( 3,744 
 ) 

 Net cash used in investing activities

 ( 10,636 
 ) 
 
 ( 3,744 
 ) 

 Cash flows from financing activities

 Proceeds from Business Combination, net of transaction costs paid
 
 225,604 
 
 — 
 
 Transaction costs paid directly by Rigetti
 
 ( 17,428 
 ) 
 
 — 
 
 Proceeds from issuance of notes payable
 
 5,000 
 
 20,000 
 
 Payments on debt issuance costs
 
 ( 85 
 ) 
 
 — 
 
 Payment on loan and security agreement exit fees
 
 ( 1,000 
 ) 
 
 — 
 
 Proceeds from issuance of common stock upon exercise of stock options and warrants
 
 5,675 
 
 117 
 
 Net cash provided by financing activities

 217,766 
 
 20,117 
 
 Effect of changes in exchange rate on cash and restricted cash

 46 
 
 41 
 
 Net increase in cash and restricted cash

 172,091 
 
 2,316 
 
 Cash and restricted cash at beginning of period

 12,046 
 
 24,394 
 
 Cash and restricted cash at end of period

 $ 
 184,137 
 
 $ 
 26,710 
 
 Supplemental disclosure of cash flow information:

 Cash paid for interest
 
 $ 
 1,708 
 
 $ 
 488 
 
 Supplemental disclosure of non-cash
 financing activity:

 Fair value of earn-out
 liability
 
 $ 
 20,413 
 
 $ 
 — 
 
 Fair value of private placement and public warrants liability
 
 $ 
 22,932 
 
 $ 
 — 
 
 Reclassification of loan and security agreement warrants to equity
 
 $ 
 6,370 
 
 $ 
 — 
 
 Settlement of the first tranche of forward contract
 
 $ 
 3,305 
 
 $ 
 — 
 
 Capitalization of deferred costs to equity upon share issuance
 
 $ 
 848 
 
 $ 
 — 
 
 Purchases of property and equipment recorded in accounts payable
 
 $ 
 428 
 
 $ 
 664 
 
 (1)
 
 For discussion on the restatement adjustments, see Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 
 
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 RIGETTI COMPUTING, INC. 

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

 (UNAUDITED) 

 1. DESCRIPTION OF BUSINESS 

 Rigetti Computing Inc. and its subsidiaries (collectively, the “Company” or “Rigetti”), builds quantum computers and the superconducting quantum processors that power them. 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 offers product types of Platform, Research and Software Tools usage in application areas of benchmarking, chemical simulation, education/entertainment, machine learning, and optimization. 
 The Company is located and headquartered in Berkeley, California. The Company also operates in Fremont, California, London, United Kingdom, Adelaide, Australia, British Columbia, Canada and Munich, Germany. The Company’s revenue is derived primarily from operations in the United States and the United Kingdom. 
 Basis of Presentation 

 On March 2, 2022 (the “Closing Date”), a merger transaction between Rigetti Holdings, Inc. (“Legacy Rigetti”) and Supernova Partners Acquisition Company II, Ltd. (“SNII”) was completed (the “Business Combination”, see Note 3). In connection with the closing of the Business Combination, the Company changed its name to Rigetti Computing, Inc. and all of SNII Class A ordinary shares and SNII Class B ordinary shares automatically converted into shares of common stock, par value $ 0.0001 , of the Company (the “Common Stock”) on a one-for-one

 basis. The SNII Public Warrants and the Private Warrants held by SNII became warrants for Common Stock. The Company’s common stock and Public Warrants trade on the Nasdaq Capital Market under the ticker symbols “RGTI” and “RGTIW,” respectively. For more information on this transaction, see Note 3. 
 The Company determined that Legacy Rigetti was the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification (ASC) 805, Business Combination. 
 The determination was primarily based on the following facts: 
 
 • 
 
 Former Legacy Rigetti stockholders have a controlling voting interest in the Company; 
 
 • 
 
 The Company’s board of directors as of immediately after the closing is comprised of eight board members, six seats occupied by previous Rigetti board members and one seat being occupied by a previous Supernova representative. The final eighth seat was filled by an individual who did not have ties to either Rigetti or Supernova pre-merger;
 and 
 
 • 
 
 Legacy Rigetti management continues to hold executive management roles for the post-combination company and be responsible for the day-to-day

 operations. 
 
 Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Rigetti issuing stock for the net assets of SNII, accompanied by a recapitalization. The primary asset acquired from SNII was related to the cash amounts 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 as a result of the Business Combination. 
 While SNII was the legal acquirer in the Business Combination, because Legacy Rigetti was deemed the accounting acquirer, the historical financial statements of Legacy Rigetti became the historical financial statements of the combined company, upon the consummation of the Business Combination. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy Rigetti prior to the Business Combination; (ii) the combined results of SNII and Legacy Rigetti following the closing of the Business Combination; (iii) the assets and liabilities of Legacy Rigetti at their historical cost; and (iv) the Company’s equity structure for all periods presented. 
 The equity structure has been retroactively restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company’s common stock, $ 0.0001 par value per share, issued to Legacy Rigetti shareholders and Legacy Rigetti convertible preferred shareholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Rigetti redeemable convertible preferred stock and Legacy Rigetti common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination. 

 11 

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 The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. All intercompany transactions and balances have been eliminated in consolidation. All dollar amounts, except share and per share amounts, in the notes are presented in thousands, unless otherwise specified. The condensed consolidated balance sheet as of December 31, 2021, included herein, was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included as Exhibit 99.1 to the Company’s Current Report on Form 8-K,
 dated March 7, 2022. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company’s financial position as of June 30, 2022 and results of operations for the three and six months ended June 30, 2022 and 2021. 

 Risks and Uncertainties —

 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 need for additional capital (or financing) to fund operating losses, 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. 
 COVID-19—

 As of June 30, 2022 and December 31, 2021, the Company’s financial position was not significantly impacted due to the effects of COVID-19.
 However, the duration and intensity of the COVID-19
 pandemic and any resulting disruption to the Company’s operations remains somewhat uncertain, and the Company will continue to assess the impact of the COVID-19
 pandemic on its financial position. 
 Change in Fiscal Year —

 In October 2021, the board of directors of Rigetti approved a change to Rigetti’s fiscal year-end
 from January 31 to December 31, effective December 31, 2021. The Company believes the year-end
 change is important and useful to its financial statement users to allow for increased comparability with its industry peers. As a result of this change, the Company’s fiscal year now begins on January 1 and ends on December 31 of each year, starting on January 1, 2022. Year-over-year quarterly financial data has been and will continue to be recast to be comparative with the new fiscal quarter ends in the new fiscal year. 
 Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 On November 14, 2022, the audit committee of the Company’s board of directors (the “Audit Committee” ), based on the recommendation of, and after consultation with, the Company’s management, concluded that the Company’s previously issued unaudited interim condensed consolidated financial statements for the quarters ended March 31, 2022 and June 30, 2022 (the “Affected Financials”), as previously filed with the SEC, should no longer be relied upon and should be restated due to the matters described below. The unaudited condensed consolidated financial statements for the quarter ended June 30, 2022 are restated in this Quarterly Report on Form 10-Q/A,
 and the Company has restated the unaudited condensed consolidated financial statements and related information for the quarter ended March 31, 2022 in a separate amendment to the Quarterly Report on Form 10-Q
 for such period. 
 
 Earn-out
 Liability Valuation 

 At the closing of the Company’s business combination with Supernova Partners Acquisition Company II Ltd. on March 2, 2022 (the “Closing”), (i) 2,479,000 shares of the Company’s “Common Stock, held by Supernova Partners II LLC (the “SPAC Sponsor”) (such shares, the “Promote Sponsor Vesting Shares”) became subject to vesting and are considered unvested and will only vest if, during the five year period following the Closing, the volume weighted average price of the Common Stock equals or exceeds $ 12.50 for any twenty trading days within a period of thirty consecutive trading days , and (ii) 580,273 shares of Common Stock held by the SPAC Sponsor (“Sponsor Redemption-Based Vesting Shares”) became subject to vesting and considered unvested and will only vest if, during the five year period following the Closing, the volume weighted average price of the Common Stock equals or exceeds $ 15.00 for any twenty trading days within a period of thirty consecutive trading days (collectively, the Promote Sponsor Vesting Shares and Sponsor Redemption-Based Vesting Shares, “Sponsor Vesting Shares”). Any Sponsor Vesting Shares that remain unvested after the fifth anniversary of the Closing will be forfeited. 
 The 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 SPAC Sponsor include outcomes that are not solely indexed to the Common Stock. As part of the Company’s accounting for the earn-out
 liability related to the Sponsor Vesting Shares in connection with the preparation of the financial statements for the three months ended September 30, 2022, the Company evaluated the valuation assumptions utilized in estimating the fair value of the Sponsor Vesting Shares using a Monte Carlo simulation model. During this evaluation, it was determined that the volatility assumption used in the valuation of the earn-out
 liability related to the Sponsor Vesting Shares, which is based on a weighted average of the volatilities of the trading price of the common stock for a group of comparable public companies, the trading price of the Company’s common stock and the trading price of the Company’s Public Warrants (as defined below), should be revised to include a greater weight for the volatility of the trading price of the Company’s Public Warrants and should have included such greater weighting in calculating the values of the earn-out
 liability used in preparation of the Affected Financials. 
 
 12 

 Table of Contents 

 The Company assessed the materiality of the error, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin No. 99, and concluded that the error is material to the Affected Financials based upon quantitative aspects of the error. The revised weighting used for the volatility assumption in the estimation of the fair value of the Sponsor Vesting Shares had the following impact on the unaudited condensed consolidated financial statements of the Company for the three and six months ended June 30, 2022 included in the Affected Financials: 
 
 • 
 
 a decrease in the Earn-out
 Liabilities recorded on the unaudited condensed consolidated balance sheet as of June 30, 2022 included in the Affected Financials; 
 
 • 
 
 a decrease in the gain from Change in the Fair Value of Earn-out
 Liability recorded in the unaudited condensed consolidated statement of operations for the period ended June 30, 2022 included in the Affected Financials; 
 
 • 
 
 an increase in Net Loss and Net Loss per Share recorded in the unaudited condensed consolidated statement of operations for the period ended June 30, 2022 included in the Affected Financials; and 
 
 • 
 
 a decrease in the Change in the Fair value of Earn-out
 Liability recorded in the unaudited condensed consolidated statements of cash flows as supplemental disclosure of non-cash
 financing activities for the period ended June 30, 2022 included in the Affected Financials (the Earn-out
 Liabilities related adjustments are marked with an “(a)” in the table below). 
 
 Private Warrant Valuation 

 Prior to the Business Combination, SNII issued 4,450,000 private placement warrants (“Private Warrants”). Each whole warrant entitles the holder to purchase one share of the Company’s Common Stock at a price of $ 11.50 per share, subject to adjustments and will expire five years after the Business Combination or earlier upon redemption or liquidation. The Company reassessed the calculations of fair value for its Private Warrants that are treated as derivative warrant liabilities for the periods ended March 31, 2022 and June 30, 2022. 
 As part of the Company’s accounting for the derivative warrant liability related to the Private Warrants in connection with the preparation of the financial statements for the three months ended September 30, 2022, the Company evaluated the valuation assumptions used in estimating the fair value of the Private Warrants. During this evaluation, it was determined that the calculated volatility used in the valuation of the derivative warrant liability related to the Private Warrants was based on the assumption that such warrants were not subject to redemption at $ 10 per share but were subject to redemption at $ 18 per share. The Private Warrants, however, are not redeemable at either of these prices as long as the warrants are held by either the Sponsor or its permitted transferees. During the first two quarters of the 2022 fiscal year, the Private Warrants were held by the Sponsor; therefore, the Private Warrants were not redeemable at either price during such periods. The Company revised this assumption in the calculation of the volatility of the Private Warrants, which impacted the valuation of the liability related to the Private Warrants included in the Affected Financials. 
 The Company assessed the materiality of the error, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin No. 99, and concluded that the error is material to the Affected Financials based upon quantitative aspects of the error. The revised assumption used for the calculation of the volatility in the estimation of the fair value of the Private Warrants had the following impact on the unaudited condensed consolidated financial statements of the Company for the three and six months ended June 30, 2022 included in the Affected Financials: 
 
 • 
 
 an increase in the Derivative Warrant Liabilities recorded on the unaudited condensed consolidated balance sheet as of June 30, 2022 included in the Affected Financials; 
 
 • 
 
 an increase in the gain from the Change in the Fair Value of Derivative Warrant Liabilities for the three months ended June 30, 2022 and a decrease in the gain from the Change in the Fair Value of Derivative Warrant Liabilities for the six months ended June 30, 2022 included in the Affected Financials; 
 
 • 
 
 a decrease in Net Loss and Net Loss per Share for the three months ended June 30, 2022 and an increase in Net Loss and Net Loss per Share for the six months ended June 30,2022 included in the Affected Financials; and 
 
 • 
 
 a decrease in the Change in Fair value of Derivatives Liability recorded in the unaudited condensed consolidated statements of cash flows as supplemental disclosure of non-cash
 financing activities for the period ended June 30, 2022 included in the Affected Financials (the Private Warrant adjustments are marked with an “(d)” in the table below). 
 
 Additional Operating Expenses 

 In addition, in connection with the preparation of the financial statements for the three months ended September 30, 2022, the Company completed its analysis with respect to the treatment of additional operating expenses relating to electrical utility fees for a portion of the electrical usage at its Berkeley location since 2019 that were not paid and recognized in prior periods. The Company has cumulatively recorded an accrual of $ 1.6 million as of June 30, 2022, which includes an accrual of $ 1.5 million recorded for the three months ended March 31, 2022, reflecting an out-of-period

 adjustment of $ 1.3 million in relation to expenses incurred in 2019 through 2021, and an additional $ 0.1 million accrual for the three months ended June 30, 2022. The expenses have been recorded as research and development expenses in the financial statements for the respective periods. The impact of the additional operating expenses recorded increased accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheet and research and development expenses, operating expenses, operating loss and net loss recorded in the unaudited condensed consolidated statement of operations in the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022 included in the Affected Financials (the additional operating expense adjustments are marked with a “(b)” in the table below). 
 
 13 
 
 Table of Contents 
 Trinity Warrant Valuation 

 As part of the restatement of the financial statements for the quarters ended March 31, 2022 and June 30, 2022, the Company also recorded the correction of an immaterial error related to the valuation of the liability associated with the warrants issued to Trinity Capital Inc. in the restated financial statements for the quarter ended March 31, 2022, and reversed the out-of-period

 adjustment it had previously recorded for such immaterial error in the financial statements for the quarter ended June 30, 2022 in the restated unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022. The Company reduced Derivative Warrant Liabilities by $ 1.3 million in the condensed consolidated balance sheet as of March 31, 2022 and increased the Change in Fair Value of Derivative Warrant Liabilities by $ 1.3 million in the restated unaudited condensed consolidated statement of operations for the period ended March 31, 2022 for the revaluation of the liability associated with the warrants issued to Trinity Capital. The increase to the Change in Fair Value of Derivative Warrant Liabilities increased total other income (expense) and decreased net loss recorded in the unaudited condensed consolidated statement of operations for the period ended March 31, 2022. The reversal of the out of period adjustment from the financial statements for the quarter ended June 30, 2022 decreased total other income (expense) and increased net loss recorded in the restated unaudited condensed consolidated statement of operations for the period ended June 30, 2022 (the Trinity Warrant adjustments are marked with a “(c)” in the table below). 
 The Company recorded the following adjustments to correct the prior period errors in the financial statements as of and for the period ended June 30, 2022 such that the consolidated balance sheet and the year-to-date

 consolidated statement of operations appropriately reflect the accounting impacts of the related transactions (in thousands): 
 Restated Condensed Consolidated Balance Sheet (unaudited) 

 As of June 30, 2022

 As reported

 As adjusted - (a)

 As adjusted - (b)

 As adjusted - (c)

 As adjusted - (d)

 As adjusted - Total

 As restated

 Accrued expenses and other current liabilities
 
 $ 
 4,428 
 
 $ 
 — 
 
 $ 
 1,590 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 1,590 
 
 $ 
 6,018 
 
 Total current liabilities
 
 11,279 
 
 — 
 
 1,590 
 
 — 
 
 — 
 
 1,590 
 
 12,869 
 
 Derivative warrant liabilities
 
 8,944 
 
 — 
 
 — 
 
 — 
 
 3,204 
 
 3,204 
 
 12,148 
 
 Earn-out
 liabilities
 
 8,925 
 
 ( 1,069 
 ) 
 
 — 
 
 — 
 
 ( 1,069 
 ) 
 
 7,856 
 
 Total liabilities
 
 54,765 
 
 ( 1,069 
 ) 
 
 1,590 
 
 — 
 
 3,204 
 
 3,725 
 
 58,490 
 
 Additional paid-in
 capital
 
 401,290 
 
 6,170 
 
 — 
 
 — 
 
 ( 445 
 ) 
 
 5,725 
 
 407,015 
 
 Accumulated deficit
 
 ( 227,575 
 ) 
 
 ( 5,101 
 ) 
 
 ( 1,590 
 ) 
 
 — 
 
 ( 2,759 
 ) 
 
 ( 9,450 
 ) 
 
 ( 237,025 
 ) 

 Total stockholders’ equity (deficit)
 
 173,825 
 
 1,069 
 
 ( 1,590 
 ) 
 
 — 
 
 ( 3,204 
 ) 
 
 ( 3,725 
 ) 
 
 170,100 
 
 Restated Condensed Consolidated Statements of Operations (unaudited) 

 For the Three Months Ended

 June 30, 2022

 As reported

 As adjusted - (a)

 As adjusted - (b)

 As adjusted - (c)

 As adjusted - (d)

 As adjusted - Total

 As restated

 Research and development
 
 $ 
 12,634 
 
 $ 
 — 
 
 $ 
 113 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 113 
 
 $ 
 12,747 
 
 Total operating expenses
 
 26,906 
 
 — 
 
 113 
 
 — 
 
 — 
 
 113 
 
 27,019 
 
 Loss from operations
 
 ( 25,645 
 ) 
 
 — 
 
 ( 113 
 ) 
 
 — 
 
 — 
 
 ( 113 
 ) 
 
 ( 25,758 
 ) 

 Change in fair value of derivate warrant liabilities
 
 8,687 
 
 — 
 
 — 
 
 ( 1,331 
 ) 
 
 624 
 
 ( 707 
 ) 
 
 7,980 
 
 Change in fair value of earn-out
 liability
 
 8,024 
 
 ( 1,458 
 ) 
 
 — 
 
 — 
 
 — 
 
 ( 1,458 
 ) 
 
 6,566 
 
 Total other income (expense), net
 
 15,671 
 
 ( 1,458 
 ) 
 
 — 
 
 ( 1,331 
 ) 
 
 624 
 
 ( 2,165 
 ) 
 
 13,506 
 
 Net loss
 
 $ 
 ( 9,974 
 ) 
 
 $ 
 ( 1,458 
 ) 
 
 $ 
 ( 113 
 ) 
 
 $ 
 ( 1,331 
 ) 
 
 $ 
 624 
 
 $ 
 ( 2,278 
 ) 
 
 $ 
 ( 12,252 
 ) 

 Net loss per share attributed to common stockholders - basic and diluted
 
 $ 
 ( 0.09 
 ) 
 
 $ 
 ( 0.02 
 ) 
 
 $ 
 ( 0.11 
 ) 

 For the Six Months Ended

 June 30, 2022

 As reported

 As adjusted - (a)

 As adjusted - (b)

 As adjusted - (c)

 As adjusted - (d)

 As adjusted - Total

 As restated

 Research and development
 
 $ 
 25,083 
 
 $ 
 — 
 
 $ 
 1,590 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 1,590 
 
 $ 
 26,673 
 
 Total operating expenses
 
 52,391 
 
 — 
 
 1,590 
 
 — 
 
 — 
 
 1,590 
 
 53,981 
 
 Loss from operations
 
 ( 49,440 
 ) 
 
 — 
 
 ( 1,590 
 ) 
 
 — 
 
 — 
 
 ( 1,590 
 ) 
 
 ( 51,030 
 ) 

 Change in fair value of derivate warrant liabilities
 
 14,509 
 
 — 
 
 — 
 
 — 
 
 ( 2,759 
 ) 
 
 ( 2,759 
 ) 
 
 11,750 
 
 Change in fair value of earn-out
 liability
 
 17,658 
 
 ( 5,101 
 ) 
 
 — 
 
 — 
 
 ( 5,101 
 ) 
 
 12,557 
 
 Total other income (expense), net
 
 28,996 
 
 ( 5,101 
 ) 
 
 — 
 
 — 
 
 ( 2,759 
 ) 
 
 ( 7,860 
 ) 
 
 21,136 
 
 Net loss
 
 $ 
 ( 20,444 
 ) 
 
 $ 
 ( 5,101 
 ) 
 
 $ 
 ( 1,590 
 ) 
 
 $ 
 — 
 
 $ 
 ( 2,759 
 ) 
 
 $ 
 ( 9,450 
 ) 
 
 $ 
 ( 29,894 
 ) 

 Net loss per share attributed to common stockholders - basic and diluted
 
 $ 
 ( 0.24 
 ) 
 
 $ 
 ( 0.12 
 ) 
 
 $ 
 ( 0.36 
 ) 

 14 
 
 Table of Contents 

 Restated Condensed Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholder’s (Deficit) Equity (unaudited) as of June 30, 2022

 For the Six Months Ended
 June 30, 2022

 As reported

 As adjusted - (a)

 As adjusted - (b)

 As adjusted - (c)

 As adjusted - (d)

 As adjusted - Total

 As Restated

 Additional Paid-In
 Capital
 
 $ 
 401,290 
 
 $ 
 6,170 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 ( 445 
 ) 
 
 $ 
 5,725 
 
 $ 
 407,015 
 
 Accumulated deficit
 
 ( 227,575 
 ) 
 
 ( 5,101 
 ) 
 
 ( 1,590 
 ) 
 
 — 
 
 ( 2,759 
 ) 
 
 ( 9,450 
 ) 
 
 ( 237,025 
 ) 

 Total Stockholders’ (Deficit) Equity
 
 173,825 
 
 1,069 
 
 ( 1,590 
 ) 
 
 — 
 
 ( 3,204 
 ) 
 
 ( 3,725 
 ) 
 
 170,100 
 
 Restated Condensed Consolidated Statement of Cash Flows (unaudited) 

 For the Six Months Ended
 June 30, 2022

 As reported

 As adjusted - (a)

 As adjusted - (b)

 As adjusted - (c)

 As adjusted - (d)

 As adjusted - Total

 As restated

 Net loss
 
 $ 
 ( 20,444 
 ) 
 
 $ 
 ( 5,101 
 ) 
 
 $ 
 ( 1,590 
 ) 
 
 $ 
 — 
 
 $ 
 ( 2,759 
 ) 
 
 $ 
 ( 9,450 
 ) 
 
 $ 
 ( 29,894 
 ) 

 Accrued expenses and other current liabilities
 
 967 
 
 — 
 
 1,590 
 
 — 
 
 — 
 
 1,590 
 
 2,557 
 
 Change in fair value of derivative warrant liabilities
 
 ( 14,509 
 ) 
 
 — 
 
 — 
 
 — 
 
 2,759 
 
 2,759 
 
 ( 11,750 
 ) 

 Change in fair value of earnout liability
 
 ( 17,658 
 ) 
 
 5,101 
 
 — 
 
 — 
 
 — 
 
 5,101 
 
 ( 12,557 
 ) 

 Net cash used in operating activities
 
 ( 35,085 
 ) 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 35,085 
 ) 
 
 The cumulative impact of the error correction s
 on the Company’s accumulated deficit 

was 

$ 9.5 million, and the impact on stockholders’ equity (deficit) was 
$ 3.7 million as of and for the period ended June 30, 2022. The impact on net loss was 

$ 2.3 

 million for the three months ended June 30, 2022.

 The cumulative impact of the error correction on the Company’s net loss for the six months ended June 30, 2022 was $ 9.5 million. There was no impact to net cash used in operating activities for the six months ended June 30, 2022. 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 Emerging Growth Company —

 Following the Business Combination, the Company qualifies as an emerging growth company (‘‘EGC’’) as defined in the Jumpstart our Business Startups (‘‘JOBS’’) Act. 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 would 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. 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. 
 The Company anticipates that it will remain an EGC under the JOBS Act until the earliest of (a) the last day of Rigetti’s first fiscal year following the fifth anniversary of the completion of SNII’s initial public offering, (b) the last date of Rigetti’s fiscal year in which Rigetti has total annual gross revenue of at least $ 1.07 billion, (c) the date on which Rigetti is deemed to be a “large accelerated filer” under the rules of the SEC with at least $ 700.0 million of outstanding securities held by non-affiliates
 or (d) the date on which Rigetti has issued more than $ 1.0 billion in non-convertible
 debt securities during the previous three years . 
 Use of Estimates —
 The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Such management estimates include, but are not limited to, the fair value of share-based awards, the fair value of the convertible preferred stock warrants, fair value of the Forward Warrant Agreement (as defined below), the fair value of derivative warrant liabilities, the fair value of Sponsor Vesting Shares issued in connection with the business combination (See Note 3), goodwill and intangible assets, accrued liabilities and contingencies, depreciation and amortization periods, revenue recognition and accounting for income taxes. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates. 
 Reclassifications —
 Certain amounts reported previously have been reclassified to conform to the current quarter presentation, with no effect on stockholders’ equity or net loss as previously presented. 
 
 15 
 
 Table of Contents 
 Deferred Offering Costs —

 The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with the Business Combination or issuance of shares under a registration statement filed with the SEC. After consummation of the Business Combination or issuance of shares, costs allocated to equity-classified instruments are recorded as a reduction to additional paid-in
 capital. Costs allocated to liability-classified instruments are expensed. 
 The Company incurred $ 0.8 million and $ 0 of offering costs for both the three and six months ended June 30, 2022 and 2021, respectively, which related to filing new registration statements with the SEC after the close of the Business Combination. These costs are incremental to those disclosed in Note 3. As the shares for which the registration statements were filed were issued as of June 30, 2022, the Company recorded the costs as a reduction to additional paid-in
 capital. 
 Deferred Financing Costs —
 The incremental cost, including the fair value of warrants, directly associated with obtaining debt financing is capitalized as deferred financing costs upon the issuance of the debt and amortized over the term of the related debt agreement using the effective-interest method with such amortized amounts included as a component of interest expense in the consolidated statement of operations. Unamortized deferred financing costs are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt obligation. 
 Segments —
 Operating segments are defined as components of an entity for which discrete financial information is available and that information is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer is its CODM, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocating resources and evaluating financial performance. As such, the Company has determined that it operates in one operating and one reportable segment. 
 Foreign Currency —
 The Company’s reporting currency is the US dollar. The functional currencies of the Company’s foreign subsidiaries are the local currencies (UK pounds sterling and Australian dollars), as it is the monetary unit of account of the principal economic environment in which the Company’s foreign subsidiaries operate. All assets and liabilities of the foreign subsidiaries are translated at the current exchange rate as of the end of the period, and revenue and expenses are translated at average exchange rates in effect during the period. The gain or loss resulting from the process of translating foreign currency financial statements into US dollars is reflected as a foreign currency cumulative translation adjustment and reported as a component of accumulated other comprehensive gain (loss). Foreign currency transaction gains and losses resulting from or expected to result from transactions denominated in a currency other than the functional currency are recognized in other income (expense), net in the consolidated statements of operations. 
 Comprehensive Loss —
 Comprehensive loss consists of net loss and changes in equity during a period from transactions and other equity and circumstances generated from non-owner
 sources. Comprehensive loss consists of two components including, net loss and other comprehensive loss. The Company’s other comprehensive gain/(loss) consists of foreign currency translation adjustments that result from consolidation of its foreign entities. 
 Cash and Restricted Cash —

 The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of June 30, 2022 and December 31, 2021, cash consists primarily of checking and savings deposits. The Company’s restricted cash balance classifies all cash whose use is limited by contractual provisions. As of June 30, 2022, restricted cash consists of cash secured as collateral for letters of credit in favor of the Company’s landlord. The Company may not access these funds until it vacates this office space (leases expire in 2029). 
 As of December 31, 2021, restricted cash consists of cash secured as collateral for letters of credit in favor of the Company’s landlord and its corporate credit card program. 
 
 16 
 
 Table of Contents 
 
 The following table provides a reconciliation of cash and restricted cash in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows for the six months ended June 30, 2022: (In thousands) 
 
 June 30,
 2022

 December 31,
 2021

 Cash
 
 $ 
 184,020 
 
 $ 
 11,729 
 
 Restricted cash
 
 117 
 
 317 
 
 Total cash and restricted cash
 
 $ 
 184,137 
 
 $ 
 12,046 
 
 Accounts Receivable —
 Accounts receivable are recorded at invoice value, net of allowance for doubtful accounts. Unbilled receivables are included in accounts receivable and include amounts that were invoiced subsequent to the period end for which revenue was recognized in advance of the right to invoice. On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off based on a past history of write-offs,
 collections, and current credit conditions. A receivable is considered past due if the Company has not received payments based on agreed-upon terms. As of June 30, 2022 and December 31, 2021, the Company does not have any allowances for doubtful accounts. 
 Public and Private Warrants —

 Prior to the Business Combination, SNII issued 4,450,000 Private Warrants and 8,625,000 public warrants (“Public Warrants” and collectively, “Warrants”). Each whole warrant entitles the holder to purchase one share of the Company’s Common Stock at a price of $ 11.50 per share, subject to adjustments and will expire five years after the Business Combination or earlier upon redemption or liquidation. 
 The Private Warrants do not meet the derivative scope exception and are accounted for as derivative liabilities. Specifically, the Private Warrants contain provisions that cause the settlement amounts to be dependent upon the characteristics of the holder of the warrant which is not an input into the pricing of a fixed-for-fixed
 option on equity shares. 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 recorded the Private Warrants as liabilities on the condensed consolidated balance sheet at fair value upon the Closing, with subsequent changes in the fair value recognized in the condensed consolidated statements of operations at each reporting date. The fair value of the Private Warrants was measured using the Black-Scholes option-pricing model at each measurement date. The Public Warrants also fail to meet the indexation guidance in ASC 815 and are accounted for as liabilities as the Public Warrants include a provision whereby in a scenario on which there is not an effective registration statement, the warrant holders have a cap, 0.361 common stock per warrant (subject to adjustment), on the issuable number of shares in a cashless exercise. 
 Subsequent to the separate listing and trading of the Public Warrants the fair value of the Public Warrants has been measured based on the observable listed prices for such warrants and the fair value of the Private Warrants are measured using an option pricing model. 
 On the consummation of the Business Combination, the Company recorded a liability related to the Private Warrants of $ 9.6 million (as restated and discussed in Note 1), with an offsetting entry to additional paid-in
 capital. On June 30, 2022, the fair value of the Private Warrants decreased to $ 6.5 million (as restated and discussed in Note 1), with the gain on the change in fair value recorded in the condensed consolidated statement of operations for the three and six months ended June 30, 2022. See Note 9 and 11, for further information on fair value. 
 Similarly, on consummation of the Business Combination, the Company recorded a liability related to the Public Warrants of $ 16.3 million, with an offsetting entry to additional paid-in
 capital. On June 30, 2022, the fair value of the Public Warrants decreased to $ 5.6 million with the gain on fair value change recorded in the condensed consolidated statement of operations for the three and six months ended June 30, 2022. See Note 9 and 11, for further information on fair value. 
 Derivative Warrant Liabilities —

 The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 815, “Derivatives and Hedging” (“ASC 815”) at the initial recognition. 
 Other than the Public and Private Warrants noted above, the Company also has other warrants issued and outstanding which are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period until exercised. The fair value of the warrant liabilities issued were initially measured using the Black- Scholes model and will be subsequently remeasured at each reporting period with changes recorded as a component of other income in the Company’s consolidated statement of operations. Derivative warrant liabilities are classified as non-current
 as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. 
 
 17 
 
 Table of Contents 
 Earn-Out
 Liability —

 At the Closing, the SPAC Sponsor subjected certain Sponsor Vesting Shares to forfeiture and vesting as of the Closing Date if thresholds related to the weighted average price of Common Stock are not met for the duration of various specified consecutive day trading periods during the five-year period following the Closing (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. See Note 3, Business Combination for more detail on terms of Sponsor Vesting Shares. 
 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 and was determined to be $ 20.4 million (as restated and discussed in Note 1) at the Closing Date. 
 As of June 30, 2022, the Earn-Out
 Triggering Events were not achieved for any of the tranches, and as such, the Company adjusted the carrying amount of the liability to its estimated fair value of $ 7.9 million (as restated and discussed in Note 1). The change in the fair value of $ 6.6 million and $ 12.6 million (as restated and discussed in Note 1) are included in gain on fair value change, net in the condensed consolidated statements of operations for the three and six months ended June 30, 2022. 
 Significant inputs into the respective models at the March 2, 2022 (the initial recognition) and June 30, 2022 are as follows: 
 
 Valuation Assumptions

 Initial Recognition
 on March 2, 2022

 June 30, 2022

 As Restated (1)

 As Restated (1)

 Stock Price
 
 $ 
 9.43 
 
 $ 
 3.67 
 
 Simulated trading days
 
 1,198.00 
 
 1,177.00 
 
 Volatility (annual) (1)
 
 30.50 
 % 
 
 79.20 
 % 

 Risk-free rate
 
 1.74 
 % 
 
 2.98 
 % 

 Estimated time to expiration (years)
 
 5 
 
 4.67 
 
 (1)
 
 As restated and discussed in Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 Revenue Recognition —
 The Company generates revenue through its Quantum Computing as a Service (“QCaaS”) and development contracts and other services. 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 six months to two years. This time-based input measure of progress provides a faithful depiction of the transfer of the services because the customer obtains generally equal benefit from its access to the systems throughout the subscription term. Revenue related to usage-based access to Rigetti quantum computing systems is recognized over time as the systems are accessed using an output method based on compute credit hours expended. 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. 
 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 typically 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 as the services are provided using an input measure based on actual labor hours incurred to date relative to total estimated labor hours needed to complete the program or total contracted hours over the program period. 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. Revenue related to the sale of custom quantum computing components is recognized at a point in time upon acceptance by the customer. 
 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. The Company typically determines standalone selling price based on observable selling prices of our products and services. In instances where standalone selling price is not directly observable, standalone selling price is determined using information that may include market conditions and other observable inputs. Standalone selling price is typically established as a range. In situations in which the stated contract price for a performance obligation is outside of the applicable standalone selling price range and has a different pattern of transfer to the customer than the other performance obligations in the contract, the Company will reallocate the total transaction price to each performance obligation based on the relative standalone selling price of each. 
 The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods and services to the customer. Revenue is recorded based on the transaction price, which includes fixed consideration and estimates of variable consideration. The amount of variable consideration included in the transaction price is constrained and is included only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. 
 
 18 
 
 Table of Contents 

 Net income (loss) per share —
 Basic net loss per common share is computed by dividing the net loss available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Diluted net loss per common share is computed by dividing the net loss available to common stockholders adjusted by any preferred stock dividends declared during the period by the weighted average number of common shares and potential common shares outstanding when the impact is not antidilutive. Potential common shares from stock options, unvested restricted stock units and common stock warrants are computed using the treasury stock method, while those from convertible Series C and C-1
 Preferred Stock are computed using the if-converted
 method. Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued. Shares issuable for little or no cash consideration shall be considered outstanding common shares and included in the computation of basic EPS. 
 Stock-Based Compensation —

 The Company accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation. The Company’s share-based compensation awards are all equity-classified and consist of stock options, restricted stock units (“RSU”) and restricted stock awards (“RSA”). Stock options have service vesting conditions ranging from 1 to 5 years. RSAs are fully vested on grant date. RSUs granted under the Rigetti & Co, Inc. 2013 Equity Incentive Plan (the “2013 Plan”) have a 4 -year
 service vesting condition and a performance condition linked to the occurrence of a liquidity event defined as a change-in-control

 event, successful initial public offering or successful merger with a special purpose acquisition company, which was satisfied at the Closing. RSUs granted under the Rigetti Computing, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) have service vesting condition only. 
 Compensation expenses are based on the grant-date fair value of the awards and recognized over the requisite service period using a straight-line method for stock options and RSUs granted under the 2022 Plan. Compensation expense for RSUs granted under the 2013 Plan are recognized using a graded vesting method. Compensation expense for RSAs are recognized fully on grant date. The Company has elected to account for forfeitures of employee stock awards as they occur. 
 Concentrations of Credit Risk —

 Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and trade accounts receivable. The Company’s cash is placed with high-credit-quality financial institutions, and at times exceeds federally insured limits. To date, the Company has not experienced any credit loss relating to its cash. 
 Significant customers that represent 10% or more of revenue are set forth in the following tables: 
 
 For the Six Months Ended June 30,
 
 Customer
 
 2022
 
 2021
 
 Customer A
 
 33 
 
 % 
 
 *
 
 Customer B
 
 28 
 
 % 
 
 25 
 
 % 
 
 Customer C
 
 16 
 
 % 
 
 30 
 
 % 
 
 Customer D
 
 10 
 
 % 
 
 *
 
 Customer E
 
 *
 
 36 
 
 % 
 
 For the Three Months Ended June 30,
 
 Customer
 
 2022
 
 2021
 
 Customer A
 
 32 
 
 % 
 
 30 
 
 % 
 
 Customer B
 
 22 
 
 % 
 
 64 
 
 % 
 
 Customer C
 
 19 
 
 % 
 
 *
 
 Customer D
 
 19 
 
 % 
 
 *
 
 * 
 Customer accounted for less than 10% of revenue in the respective period 
 
 19 

 Table of Contents 
 Significant customers that represent 10% or more of accounts receivable are set forth in the following tables: 
 
 Customer
 
 June 30, 
 
 December 31, 
 
 2022 
 
 2021 
 
 Customer A
 
 25 
 % 
 
 35 
 % 

 Customer B
 
 24 
 % 
 
 34 
 % 

 Customer C
 
 16 
 % 
 
 29 
 % 

 Customer D
 
 16 
 % 
 
 * 
 
 Customer E
 
 11 
 % 
 
 * 
 
 * 
 Customer accounted for less than 10% of accounts receivable in the respective period 
 
 For the three and six months ended June 30, 2022, sales to government entities comprised 67.8 % and 72.0 % of the Company’s total revenue, respectively. For the three and six months ended June 30, 2021, sales to government entities comprised 69.7 % and 74.9 % of the Company’s total revenue, respectively. 
 Recently Issued Accounting Pronouncements —

 In June 2022, the FASB issued ASU 2022-03,
 ASC Subtopic 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. The ASU is effective for the Company 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. 
 In February 2016, the FASB issued ASU 2016-02,
 Leases (Topic 842). ASU 2016-02
 is amended by ASU 2018-01,
 ASU2018-10,
 ASU 2018-11, ASU 2018-20
 and ASU 2019-01,
 which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively (collectively, the amended ASU 2016-02).
 The amended ASU 2016-02
 requires lessees to recognize on the balance sheet a right-of-use

 asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. The amended ASU 2016-02
 retains a distinction between finance leases (i.e., capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended ASU 2016-02
 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02,
 which includes a number of optional practical expedients that entities may elect to apply. The Company plans to adopt the ASC Topic 842 on December 31, 2022 with an effective date of January 1, 2022. The Company is still in the process of evaluating the impact of the adoption of ASC Topic 842 on the consolidated financial statements. 
 No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements. 
 3. BUSINESS COMBINATION 

 As discussed in Note 1, on March 2, 2022, the Business Combination was completed. Pursuant to the Company’s certificate of incorporation, as amended on March 2, 2022, the Company is authorized to issue 1,000,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $ 0.0001 , of the Company (the “Preferred Stock”). The holders of shares of Common Stock are entitled to one 
 vote for each share of common stock held. The Preferred Stock is non-voting.
 No 
 shares of Preferred Stock were issued and outstanding as of June 30, 2022. 
 On March 1, 2022, prior to the Closing, as contemplated by the Merger Agreement and following approval by SNII’s shareholders at an extraordinary general meeting of shareholders held on February 28, 2022 (the “Extraordinary General Meeting”), SNII filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation (the “Certificate of Incorporation”) and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which SNII was domesticated and continues as a Delaware corporation, changing its name to “Rigetti Computing, Inc.” 
 As a result of and upon the effective time of the Domestication (which occurred on March 1, 2022), among other things:(1) each then issued and outstanding Class A ordinary share, par value $ 0.0001 per share, of SNII (“SNII Class A ordinary share”) converted automatically, on a one-for-one
 basis, into a share of Common Stock; (2) each then issued and outstanding Class B ordinary share, par value $ 0.0001 per share, of SNII (“SNII Class B ordinary share”) converted automatically, on a one-for-one
 basis, into a share of Common Stock; (3) each then issued and outstanding whole warrant of SNII to purchase one SNII Class A ordinary shares converted automatically into a Public Warrant to acquire one share of Common Stock at an exercise price of $ 11.50 per share pursuant to the Warrant Agreement, dated March 1, 2021, between SNII and American Stock Transfer & Trust Company, as warrant agent; (4) and each then issued and outstanding unit of SNII (the “SNII Units”) was separated and converted automatically into one share of Common Stock and one-fourth
 of one Warrant. 
 
 20 

 Table of Contents 

 Immediately prior to the effective time of the Business Combination, each share of Legacy Rigetti’s Series C preferred stock and Series C-1
 preferred stock (collectively, the “Legacy Rigetti Preferred Stock”) with Par Value of $ 0.000001 converted into shares of common stock of Legacy Rigetti (“Legacy Rigetti Common Stock”) in accordance with the Amended and Restated Certificate of Incorporation of Legacy Rigetti (such conversion, the “Legacy Rigetti Preferred Conversion”). 
 As a result of the Business Combination, among other things (1) all outstanding shares of Legacy Rigetti Common Stock as of immediately prior to the Closing (including Legacy Rigetti Common Stock resulting from the Legacy Rigetti Preferred Stock Conversion), were exchanged at an exchange ratio of 0.7870 (the “Exchange Ratio”) for an aggregate of 78,959,579 shares of Common Stock; (2) each warrant to purchase Legacy Rigetti Common Stock converted into a warrant to purchase shares of Common Stock (“Assumed Warrant”), with each Assumed Warrant subject to the same terms and conditions as were applicable to the original Legacy Rigetti warrant and having an exercise price and number of shares of Common Stock purchasable based on the Exchange Ratio and other terms contained in the Merger Agreement; (3) each option to purchase Legacy Rigetti Common Stock converted into an option to purchase shares of Common Stock (“Assumed Option”), with each Assumed Option subject to the same terms and conditions as were applicable to the original Legacy Rigetti option and with an exercise price and number of shares of Common Stock purchasable based on the Exchange Ratio and other terms contained in the Merger Agreement, and; (4) each Legacy Rigetti restricted stock unit award converted into a restricted stock unit award to receive shares of Common Stock (“Assumed RSU Award”), with each Assumed RSU Award subject to the same terms and conditions as were applicable to the Legacy Rigetti restricted stock unit award, and with the number of shares of Common Stock to which the Assumed RSU Award converted based on the Exchange Ratio and other terms contained in the Merger Agreement. 
 In connection with the execution of the Merger Agreement, SNII entered into a sponsor support agreement (the “Sponsor Support Agreement”) with the Sponsor, Legacy Rigetti and SNII’s directors and officers. Pursuant to the Sponsor Support Agreement, the Sponsor and SNII’s directors and officers (“Sponsor Holders”), among other things, agreed to vote all of their shares of SNII capital stock in favor of the approval of the Business Combination. In addition, pursuant to the Sponsor Support Agreement, (i) 2,479,000 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the Closing and will only vest if, during the five year period following the Closing, 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 , and (ii) 580,273 shares of Common Stock held by the Sponsor Holders became unvested and subject to forfeiture as of the Closing and will only vest if, during the five year period following the Closing, 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 . Any such shares held by the Sponsor Holders that remain unvested after the fifth anniversary of the Closing will be forfeited. (Refer to Note 2 for related significant accounting policy for Sponsor Earn-Out
 Liability) 
 Concurrently with the execution of the Merger Agreement, SNII entered into Subscription Agreements (the “Initial Subscription Agreements”) with certain investors (together, the “Initial PIPE Investors”), pursuant to which the Initial PIPE Investors agreed to subscribe for and purchase, and SNII agreed to issue and sell to the Initial PIPE Investors, an aggregate of 10,251,000 shares of Common Stock at a price of $ 10.00 per share, for aggregate gross proceeds of $ 102.5 Million (the “Initial PIPE Financing”). On December 23, 2021, SNII entered into Subscription Agreements (the “Subsequent Subscription Agreements”, and together with the Initial Subscription Agreements, the “Subscription Agreements”) with two “accredited investors” (as such term is defined in Rule 501 of Regulation D) (the “Subsequent PIPE Investors”, and together with the Initial PIPE Investors, the “PIPE Investors”) pursuant to which the Subsequent PIPE Investors agreed to subscribe for and purchase, and SNII agreed to issue and sell to the Subsequent PIPE Investors, an aggregate of 4,390,244 shares of Common Stock at a price of $ 10.25 per share, for aggregate gross proceeds of $ 45.0 Million (the “Subsequent PIPE Financing”, and together with the Initial PIPE Financing, the “PIPE Financing”). Pursuant to the Subscription Agreements, Rigetti agreed to provide the PIPE Investors with certain registration rights with respect to the shares purchased as part of the PIPE Financing. The PIPE Financing was consummated immediately prior to the Merger. 
 
 21 

 Table of Contents 
 The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, SNII was treated as the “acquired” company for financial reporting purposes. 
 In accounting for the Business Combination and after redemptions, net proceeds received by the Company totaled $ 225.6 million. The table below shows the net proceeds from business combination and PIPE financing (in thousands): 
 
 Amount (in thousands)

 Cash - SNII trust and cash (net of redemption)
 
 $ 
 77,769 
 
 Cash - PIPE
 
 147,510 
 
 Cash - SNII operating account
 
 325 
 
 Net Proceeds from Business Combination and PIPE

 $

 225,604 

 Transaction costs consist of direct legal, accounting and other fees relating to the consummation of the Merger. Legacy Rigetti transaction costs specific and directly attributable to the business combination totaled $ 20.65 million. These costs were initially capitalized as incurred in deferred offering assets on the consolidated balance sheets. Upon the Closing, transaction costs related to the issuance of shares were recognized in stockholders’ equity (deficit) while costs associated with the Public Warrants, Private Warrants and Sponsor Vesting Shares were expensed in the consolidated statements of operations. Of the total transaction cost of $ 20.65 million, $ 19.75 million was recorded to additional paid-in
 capital as a reduction of proceeds and the remaining $ 0.9 million was recognized in the condensed consolidated statements of operations during the six months ended June 30, 2022. Transaction cost paid through cash during the six months ended June 30, 2022 equals $ 16.7 million with no amounts paid during the three months ended June 30, 
 2022. For the six months ended June 30, 2022, the Company also paid a one-time
 bonus to certain employees related to the business combination of $ 2.1 million with no amounts paid during the three months ended June 30, 2022. 
 The amount recorded to additional paid-in-capital

 was $ 159.55 million (as restated and discussed in Note 1), comprised of $ 225.6 million net proceeds less $ 19.75 million transaction costs, $ 16.3 million recognized for the Public Warrant liabilities, $ 9.6 million (as restated and discussed in Note 1), recognized for the Private Warrant liabilities, and $ 20.4 million (as restated and discussed in Note 1) recognized for the earn-out
 liabilities. 
 The number of shares of common stock issued immediately following the consummation of the Business Combination was as follows: 
 
 Common Stock—SNII Class A, outstanding prior to Business Combination
 
 34,500,000 
 
 Less: redemption of SNII Class A ordinary shares
 
 ( 22,915,538 
 
 ) 
 
 Common Stock—SNII Class A ordinary shares
 
 11,584,462 
 
 Common Stock—SNII Class B ordinary shares*
 
 8,625,000 
 
 Shares issued in PIPE
 
 14,641,244 
 
 Business Combination and PIPE shares
 
 34,850,706 
 
 Common stock—Legacy Rigetti**
 
 18,221,069 
 
 Common stock—exercise of Legacy Rigetti stock options immediately prior to the closing**
 
 1,123,539 
 
 Common stock—exercise of Legacy Rigetti warrants immediately prior to the closing**
 
 2,234,408 
 
 Common stock—upon conversion of Legacy Rigetti Series C preferred stock**
 
 54,478,261 
 
 Common stock—upon conversion of Legacy Rigetti Series C-1
 preferred stock**
 
 2,902,302 
 
 Total shares of common stock immediately after Business Combination
 
 113,810,285 
 
 * 
 Includes (i) 2,479,000 shares of Common Stock held by the Sponsor (the “Promote Sponsor Vesting Shares”) and (ii) 580,273 shares of Common Stock held by the Sponsor (“Sponsor Redemption-Based Vesting Shares”). 
 
 ** 
 (i) all outstanding shares of Legacy Rigetti Common Stock as of immediately prior to the Closing (including Legacy Rigetti Common Stock resulting from the Legacy Rigetti Preferred Stock Conversion), were exchanged at an exchange ratio of 0.7870 (the “Exchange Ratio”). (ii) the conversion ratio to Legacy Rigetti Common Stock for the Legacy Series C Preferred Stock was one-for- one 
 and for Legacy Series C-1 Preferred Stock was eight -for-one.
 
 22 

 Table of Contents 

 4. REVENUE RECOGNITION 

 The following tables depict the disaggregation of revenue according to the type of good or service and timing of transfer of goods or services for the three and six months ended June 30, 2022 and June 30, 2021: 
 
 Three Months Ended

 Three Months Ended

 Six Months Ended

 Six Months Ended

 June 30,

 June 30,

 June 30,

 June 30,

 2022

 2021

 2022

 2021

 (In thousands)

 (In thousands)

 Type of Goods or Service

 Collaborative research and other professional services
 
 $ 
 1,477 
 
 $ 
 944 
 
 $ 
 2,992 
 
 $ 
 2,547 
 
 Access to quantum computing systems
 
 657 
 
 596 
 
 1,246 
 
 1,353 
 
 $ 
 2,134 
 
 $ 
 1,540 
 
 $ 
 4,238 
 
 $ 
 3,900 
 
 Timing of Revenue Recognition

 Revenue recognized at a point in time
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 — 
 
 Revenue recognized over time
 
 2,134 
 
 1,540 
 
 4,238 
 
 3,900 
 
 $ 
 2,134 
 
 $ 
 1,540 
 
 $ 
 4,238 
 
 $ 
 3,900 
 
 Selected condensed consolidated balance sheet line items that reflect accounts receivable, contract assets and liabilities as of June 30, 2022 and December 31, 2021 were as follows: 
 
 June 30,

 December 31,

 2022

 2021

 (In thousands)

 Trade receivables
 
 $
 
 2,350 
 
 $
 
 961 
 
 Unbilled receivables
 
 $
 
 222 
 
 $
 
 582 
 
 Deferred revenue
 
 $
 
 ( 1,108 
 
 ) 
 
 $
 
 ( 985 
 
 ) 
 
 23 
 
 Table of Contents 
 Changes in deferred revenue from contracts with customers were as follows: 
 
 Six Months Ended
 June 30,

 2022

 (In thousands)

 Balance at beginning of period
 
 $ 
 ( 985 
 ) 

 Deferral of revenue
 
 ( 673 
 ) 

 Recognition of deferred revenue
 
 550 
 
 Balance at end of period
 
 $ 
 ( 1,108 
 ) 

 Remaining performance obligations represent the portion of the transaction price that has not yet been satisfied or achieved. As of June 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 9.5 million. The Company expects to recognize estimated revenues related to performance obligations that are unsatisfied (or partially satisfied) in the amounts of approximately $ 3.8 million during the remainder of the year ended December 31, 2022, and $ 5.7 million during the years ended December 31, 2023 and December 31, 2024. 
 Deferred Contract Acquisition and Fulfillment Costs—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.
 Incremental costs incurred to fulfill the Company’s contracts that meet the capitalization criteria in ASC 340-40
 have historically been immaterial. Accordingly, the Company has not capitalized any contract fulfillment costs as of June 30, 2022 and December 31, 2021. 
 5. COMMITMENTS AND CONTINGENCIES 

 Leases — The Company leases office spaces under noncancelable operating lease agreements, which expire through 2029. The Company is required to pay property taxes, insurance, and normal maintenance costs for certain of these facilities and will be required to pay any increases over the base year of these expenses on the remainder of the Company’s facilities. The Company recognizes rent expense on a straight-line basis over the lease term. Rent expense for operating leases for the three months ended June 30, 2022 and 2021 was $ 0.5 million and $ 0.4 million, respectively. Rent expense for operating leases for the six months ended June 30, 2022 and 2021 was $ 1.0 million and $ 0.8 million, respectively. The Company has accrued $ 0.4 million in deferred rent as of June 30, 2022 and December 31, 2021, respectively, primarily relating to one of its office spaces. Deferred rent that will be recognized within the 12 months after the balance sheet date is included within accrued expenses and other current liabilities, the remaining balance is recorded within other liabilities on the Company’s consolidated balance sheets. 
 Future minimum lease payments under non-cancelable
 operating leases as of June 30, 2022 are as follows (in thousands): 
 
 As of June 30, 2022 (in thousands)

 Remainder of 2022
 
 $
 
 879 
 
 2023
 
 1,262 
 
 2024
 
 1,299 
 
 2025
 
 1,338 
 
 2026
 
 1,379 
 
 Thereafter
 
 4,006 
 
 Total minimum future lease payments
 
 $
 
 10,163 
 
 Litigation — The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business. Management believes that the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows. 
 6. FINANCING ARRANGEMENTS 

 Loan and Security Agreement 

 In March 2021, the Company entered into an agreement (the “Loan Agreement”) with Trinity Capital Inc. (“Trinity”) to secure a debt commitment of $ 12.0 million (the “Tranche A”) which was drawn at the closing. The term loan is collateralized by a first-priority, senior secured interest in substantially all of the Company’s assets. In conjunction with the Loan Agreement, the Company issued Trinity a warrant to purchase shares of common stock (the “Trinity Warrants”) which is recorded at fair value using the Black-Scholes model, see Note 9 for the fair value assumptions. 
 
 24 
 
 Table of Contents 
 
 The Loan Agreement contains customary representations, warranties and covenants; however, the debt agreement does not include any financial covenants. In May 2021, the debt agreement was modified to increase the overall debt commitment by $ 15.0 million (the “Tranche B” or the “Amendment”) and $ 8.0 million of the additional commitment was drawn at the closing and the remaining commitment of $ 7.0 million was available at the Company’s option at any time through March 10, 2022 subject to certain conditions. The Company drew the $ 7.0 million in November 2021. In conjunction with the Amendment, the Company cancelled the Initial Warrants and issued 995,099 ( 783,129 shares post conversion upon the closing of the Business Combination) warrant shares to purchase the common stock which was an incremental cost allocated between Tranche A and Tranche B, see Note 9 for further information on these warrants. The Amendment to the debt agreement was considered a modification for accounting purposes. The Company capitalized $ 2.8 million of debt issuance costs which consist of incremental costs incurred for the lenders and third-party
 legal firms as well as the fair value of the warrant issued in conjunction with the term loan. 
 Under the Amendment, the maturity date was modified to be the date equal to 48 months from the first payment date of each specific cash advance. Subject to an interest only period of 19 months following each specific cash advance date, the term loan incurs interest at a rate of the of greater of 11 % and the US Prime Rate plus 7.50 % per annum , payable monthly . The Term Loan includes certain negative covenants, primarily consisting of restrictions on the Company’s ability to incur indebtedness, pay dividends, execute fundamental change transactions, and other specified actions. 
 In addition, the Company is required to pay a final payment fee equal to 2.75 % of the aggregate amount of all term loan advances. The final payment fee is being accreted and amortized into interest expense using the effective interest rate method over the term of the loan. The effective interest was between 17.83 – 23.70 % for all tranches of the debt as of June 30, 2022. 
 In January 2022, the debt agreement was modified to increase the overall debt commitment by $ 5.0 million (the “Tranche C” or the “Third Amendment”) which was drawn on January 27, 2022. Subject to an interest only period of 19 months , Tranche C incurs interest at a rate of the greater of 11 % and the US Prime Rate plus 7.50 % per annum , payable monthly , until the maturity date, February 1, 2026 . Other modifications per the amendment included an extension of the requirement to raise an additional $ 75 million of equity and a defined exit fee for the additional $ 5.0 million to be at 20 % of the advanced funds under the amendment. The Company paid an exit fee of $ 1.0 million which is 20 % of the Tranche C amount upon the consummation of a merger. The exit fee is not applicable to Tranche A and Tranche B. In conjunction with the amendment, the Company also guaranteed payment of all monetary amounts owed and performance of all covenants, obligations and liabilities. 
 The book value of debt approximates its fair value given its maturity and variable interest rate. Long term debt and the unamortized discount balances are as follows (in thousands): 
 
 June 30,

 December 31,

 2022

 2021

 (in thousands)

 Outstanding principal amount
 
 $ 
 32,000 
 
 $ 
 27,000 
 
 Add: accreted liability of final payment fee
 
 256 
 
 125 
 
 Less: unamortized debt discount, long term
 
 ( 2,117 
 ) 
 
 ( 1,618 
 ) 

 Less: current portion of long term debt-principal
 
 ( 4,938 
 ) 
 
 ( 1,291 
 ) 

 Debt-net of current portion
 
 $ 
 25,201 
 
 $ 
 24,216 
 
 Current portion of long term debt - principal
 
 $ 
 4,938 
 
 $ 
 1,291 
 
 Less: current portion of unamortized debt discount
 
 ( 712 
 ) 
 
 ( 716 
 ) 

 Debt-current portion
 
 $ 
 4,226 
 
 $ 
 575 
 
 For the three and six months ended June 30, 2022, the Company has recorded interest expense of $ 1.2 million and $ 2.4 million, which includes the accretion of the end of term liability of $ 88.9 thousand and $ 134.8 thousand, the amortization of commitment fee asset of $ 68 thousand and $ 116.3 thousand and the amortization of debt issuance cost of $ 179.7 thousand and $ 415.6 thousand, respectively. The unamortized issuance cost of $ 2.8 million at June 30, 2022 is offset against the carrying value of the term loan in the accompanying condensed consolidated balance sheet. See Deferred Financing Cost policy at Note 2. 
 
 25 

 Table of Contents 
 Scheduled principal payments on total outstanding debt, as of June 30, 2022, are as follows (in thousands): 
 
 June 30,

 December 31,

 2022

 2021

 (in thousnds)

 2022
 
 $ 
 702 
 
 $ 
 702 
 
 2023
 
 9,273 
 
 8,682 
 
 2024
 
 12,914 
 
 11,008 
 
 2025
 
 8,734 
 
 6,608 
 
 2026
 
 377 
 
 — 
 
 $ 
 32,000 
 
 $ 
 27,000 
 
 7. REDEEMABLE CONVERTIBLE PREFERRED STOCK 

 Legacy Rigetti was authorized to issue 73,389,000 shares of Series C preferred stock and 62,537,577 shares of Series C-1
 Preferred Stock with a par value of $ 0.000001 per share for each class of preferred Stock. Legacy Rigetti’s board of directors is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, option or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Immediately prior to the effective time of the Business Combination (Note 3), all Legacy Rigetti preferred stock outstanding converted into shares of common stock of Legacy Rigetti (the shares in this Note do not factor in the exchange ratio). 
 8. COMMON STOCK 

 As discussed in Note 3, on March 2, 2022, the Company consummated a Business Combination which has been accounted for as a reverse capitalization. Pursuant to the certificate of incorporation as amended on March 2, 2022, the Company is authorized to issue 1,000,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. The holders of shares of Common Stock are entitled to one vote for each share of common stock held. The Preferred Stock is non-voting.
 No shares of Preferred Stock were issued and outstanding as of June 30, 2022. 
 In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, and after payment to the holders of shares of Preferred Stock of their liquidation preferences, the holders of the common stock are entitled to the entire remaining assets of the Company on a pro rata basis. 
 As a result of the Business Combination (see Note 3), the Company has retroactively adjusted the warrants and stock-based awards outstanding prior to March 2, 2022 to give effect to the Exchange Ratio used to determine the number of shares of common stock into which they were converted. 
 As of June 30, 2022, the Company has reserved the following shares of common stock for issuance upon the conversion, exercise or vesting of the underlying instruments: 
 
 Common Stock

 Common Stock Warrants
 
 18,126,014 
 
 Stock-Based Awards - RSUs Outstanding
 
 11,850,526 
 
 Stock-Based Awards - Options Outstanding
 
 9,482,711 
 
 Total

 39,459,251 

 9. WARRANTS 

 As a result of the Business Combination (see Note 3), the Company has retroactively adjusted the Rigetti warrants outstanding and corresponding strike price prior to March 2, 2022 to give effect to the Exchange Ratio used to determine the number of shares of common stock into which they were converted. 
 
 26 

 Table of Contents 

 Liability Classified Warrants 

 Public Warrants 

 Each Public Warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $ 11.50 per share. No fractional shares will be issued upon exercise of the Public Warrants. The Company may elect to redeem the Public Warrants subject to certain conditions, in whole and not in part, at a price of $ 0.01 per Public Warrant if (i) 30 days’ prior written notice of redemption is provided to the holders, and (ii) the last reported sale price of the Company’s common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -trading
 day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis. As of June 30, 2022, there were 8,625,000 Public Warrants issued and outstanding (Refer to Note 11 for fair value measurement). 
 Private Warrants 
 The Private Warrants may not be redeemed by the Company so long as the Private Warrants are held by the initial purchasers, or such purchasers’ permitted transferees. The Private Warrants have terms and provisions identical to those of the Public Warrants, including as to exercise price, exercisability and exercise period, except if the Private Warrants are held by someone other than the initial purchasers’ permitted transferees, then the Private Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of June 30, 2022, there were 4,450,000 Private Warrants issued and outstanding. 
 The fair value of the Private Warrant was measured using the Black Scholes model approach. Significant inputs into the respective models at March 2, 2022 (the initial recognition) and June 30, 2022 are as follows: 
 
 Valuation Assumptions

 Initial Recognition on March 2,
 2022

 June 30, 2022

 As Restated (1)

 As Restated (1)

 Stock Price
 
 $ 
 9.43 
 
 $ 
 3.67 
 
 Strike Price
 
 $ 
 11.50 
 
 $ 
 11.50 
 
 Volatility (annual) (1)
 
 30.66 
 % 
 
 79.03 
 % 

 Risk-free rate
 
 1.74 
 % 
 
 3.01 
 % 

 Estimated time to expiration (years)
 
 5 
 
 4.672 
 
 Dividend yield
 
 — 
 % 
 
 — 
 % 
 
 (1)
 
 As restated and discussed in Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 Trinity Warrants 

 The Trinity Warrants were issued in March of 2021 for warrants to purchase 313,252 shares of common stock, and additional warrants to purchase 469,877 shares of common stock were issued in connection with the Tranche B Amendment, see Note 6. Therefore, there were total of 783,129 common stock warrants issued in conjunction with the Loan and Security Agreement in 2021. The Company utilized Black-Scholes model to determine grant fair value of the warrants which was approximately $ 2.7 million which was recorded as part of the Debt Issuance Cost. The outstanding common stock warrants were recognized as liabilities on the consolidated balance sheet and were measured at their inception date fair value using the Black-Scholes model and were subsequently remeasured at each reporting period with change recorded as a component of other income in the Company’s consolidated statement of operations. 
 The warrant liability balance was $ 6.4 million as of June 2, 2022, at which time all outstanding Trinity Warrants of 783,129 were exercised into shares of the Company’s Common Stock and the warrant liability reclassified to equity upon such exercise. The fair value of the warrant liability of $ 6.4 million was reclassified to equity upon such exercise. The Company recorded a total loss of $ 1.5 million 

 and 
$ 2.0 million to Change in Fair Value of Warrant Liability as a component of other income in the condensed consolidated statement of operations for the three and six months ended June 30, 2022, respectively, after applying the revised valuation inputs as described in Note 1. 

 The warrant issued in conjunction with the Loan and Security Agreement is classified as a liability under ASC 480, “Distinguishing Liabilities from Equity”. See Deferred Financing Cost disclosure at Note 2 Summary of Significant Accounting Policies.
 
 27 
 
 Table of Contents 
 The fair value of the Trinity Warrant liabilities presented above were measured using the Black Scholes model approach. Significant inputs into the respective models at June 2, 2022, the exercise date of the Trinity Warrants, are as follows: 
 
 Valuation Assumption - 
 Common Stock Warrants

 June 2 2022

 Stock price
 
 $ 
 8.23 
 
 Strike price
 
 $ 
 0.27 
 
 Volatility (annual)
 
 105.10 
 % 

 Risk-free rate
 
 2.94 
 % 

 Estimated time to expiration (years)
 
 9 
 
 Dividend yield
 
 — 
 % 
 
 Equity Classified Warrants 

 Series C Preferred Stock Financing Warrants 

 In conjunction with the Series C Preferred Stock Financing (see Note 7), the Company issued a total of 5,248,183 Warrants to purchase Class A Common Stock to the Series C investors. The Warrants have a $ 0.01 exercise price per share and have a 10 -year
 term to expiration. The Warrants can be exercised for cash or on a cashless basis. The Company determined that the Warrants met the requirements for equity classification under ASC 480 and ASC 815. The Company estimated the fair value of the Warrants using the Black-Scholes model (see below for key inputs) and allocated approximately $ 1.2 million in proceeds from the Series C Preferred Stock to the value of the Warrants on a relative fair value basis, which was recorded to additional paid in capital. 
 Customer Warrants 

 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”). The Customer Warrants have a $ 1.152 exercise price per share and have a 10 -year
 term to expiration. The Warrants vest upon the achievement of certain performance conditions (i.e., sales milestones) defined in the agreement, and upon a change of control, either 50 % or 100 % of the then unvested Customer Warrants will become fully vested, dependent on the acquiring party in the change of control transaction. The Warrants can be exercised for cash or on a cashless basis. 
 The Company followed the guidance in ASC 718 and ASC 606 for the accounting of non-cash
 consideration payable to a customer. The Company determined that the Customer Warrants met the requirements for equity classification under ASC 718 and measured the Customer Warrants based on their grant date fair value, estimated to be $ 0.2 million. The Company recorded this amount as a deferred asset and additional paid in capital as of the issuance date, as the Company believes it is probable that all performance conditions (i.e., sales milestones) in the Customer Warrants will be met. During the three and six months ended June 30, 2022, the Company recorded a reduction of revenue related to the arrangement with the customer totaling $ 2.4 thousand and $ 3.9 thousand, respectively, as of June 30, 2022, the deferred asset balance outstanding is $ 91.2 thousand, which will be recognized as a reduction in revenue in future periods. 
 The vesting status of the Customer Warrant is as follows at June 30, 2022 and December 31, 2021: 
 
 June 30,
 2022

 December 31,
 2021

 Vested Customer warrants
 
 1,072,237 
 
 1,072,237 
 
 Unvested Customer warrants
 
 1,608,370 
 
 1,608,359 
 
 2,680,607 
 
 2,680,596 
 
 10. FORWARD WARRANT AGREEMENT 

 In connection with the execution of the Merger Agreement in October 2021 (See Note 1), 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 provides for the issuance of a warrant for the purchase of 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. 
 
 28 
 
 Table of Contents 
 
 On June 30, 2022, pursuant to the Warrant Subscription 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 is required to pay an additional $ 5.0 million to Rigetti no later than the closing date of the listing of Ampere’s capital stock, provided that if the listing has not occurred by the second anniversary of the warrant subscription agreement, Ampere is not obligated to make the additional payment and the Company is not obligated to issue the warrants. The warrant subscription agreement further provides that the Company will use commercially reasonable efforts to file a registration statement to register the resale of the shares issued or issuable pursuant to the warrant and upon such payment the warrant will vest and be exercisable by Ampere with respect to 500,000 shares of Common Stock pursuant to the terms of the warrant. 
 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 by using the Forward Contract Pricing methodology at inception and at the end of June 30, 2022. The fair value of the Forward Warrant Agreement was estimated based on the following key inputs and assumptions 1) Assumed holding period 2) Related risk-free rate and 3) Likelihood of the outcome of the various contingencies outlined below. Based on these inputs and assumption, the Company calculated the fair value of the Forward Warrant Agreement to be a $ 1.5 million derivative asset and a ($ 0.2 million) derivative liability at June 30, 2022 and December 31, 2021, respectively. The Company has included the derivative asset as a forward contract asset and the derivative liability separately in other liabilities (current) on the balance sheet line in the accompanying consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively. The change in fair value is recorded as part of the general and administrative operating activities in the Company’s condensed consolidated statements of operations. The following table represents key valuation assumptions as of the quarter ended June 30, 2022. 
 
 Key Valuation Assumptions

 Holding period (in years)
 
 0.000 - 0.628 
 
 Risk free rate
 
 0.00 % - 2.57 %
 
 Probability of contingency occurrence
 
 50 % - 100 %
 
 Underlying value per share
 
 $ 3.39 - $ 3.67 
 
 The fair value of the Forward Purchase Agreement was determined prior to vesting and exercise of the 500,000 warrants into shares of Company Common Stock upon Ampere’s payment of $ 5.0 million on June 30, 2022 using the share value at opening market price on June 30, 2022. The fair value of the unexercised Forward Award Agreement was determined using the market close value on June 30, 2022. 
 11. FAIR VALUE MEASUREMENTS 

 The Company reports all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: 
 Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. 
 Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. 
 Level 3—Inputs are unobservable inputs for the asset or liability. 
 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. 
 
 29 
 
 Table of Contents 
 The fair value measurements of financial assets and liabilities that are measured at fair value at June 30, 2022 and December 31, 2021 are as follows: 
 
 June 30, 2022

 Level 1

 Level 2

 Level 3

 As Restated (1)

 (in thousands)

 Assets:

 Forward Warrant Agreement
 
 $
 
 — 
 
 $
 
 — 
 
 $
 
 1,543 
 
 Total Assets

 $

 — 

 $

 — 

 $

 1,543 

 Liabilities:

 Derivative warrant liability-Private Warrants, as restated (1)
 
 — 
 
 — 
 
 6,542 
 
 Derivative warrant liability-Public Warrants
 
 5,606 
 
 — 
 
 — 
 
 Earn-out
 liability, as restated (1)
 
 — 
 
 7,856 
 
 Total liabilities, as restated (1)

 $

 5,606 

 $

 — 

 $

 14,398 

 December 31, 2021

 Level 1

 Level 2

 Level 3

 (in thousands)

 Liabilities:
 
 Derivative warrant liability - Trinity Warrants
 
 — 
 
 4,355 
 
 Forward warrant agreement
 
 — 
 
 — 
 
 230 
 
 Total liabilities

 $

 — 

 $

 — 

 $

 4,585 

 (1)
 
 For discussion on the restatement adjustments, see Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 As of June 30, 2022, the Company has recorded the following financial instruments subject to fair value measurements: 1) Derivative warrant liabilities— Public Warrants liability and Private Warrants, 2) Forward Warrant Agreement, and 3) Earn-out liability. 
 The fair value of the Public Warrants has been measured based on the observable listed prices for such warrants, a Level 1 measurement. All other financial instruments are classified as Level 3 liabilities as they all include unobservable inputs. 
 The Private Warrants were initially measured at fair value using a Black Scholes model. The Company estimated the fair value of the Forward Warrant Agreement using a forward analysis with unobservable inputs which included selected risk-free rate and probability outcomes. The Company has further discussed the key aspects of the fair value measurements described above in Notes 9 and 10 to the financial statements. 
 The aggregate fair value of the Sponsor Vesting Shares on the Closing date was estimated using a Monte Carlo simulation model. The Company has further discussed the key aspect of the valuation inputs in Note 2 significant accounting policy for Sponsor Earn-Out
 Liability. 
 As of December 31, 2021, the Company recorded a derivative warrant liability – Trinity Warrants which was fair valued based on a Black-Scholes option model with unobservable inputs which included volatility. The Company estimates the volatility of its ordinary share warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s ordinary shares that matches the expected remaining life of the warrants. On June 2, 2022, all outstanding Trinity Warrants were exercised into shares of the Company’s common stock. 
 
 30 
 
 Table of Contents 

 There have been no changes in fair value measurement techniques (other than the change in valuation assumptions described in Note 1) during the three and six months ended June 30, 2022. There were no transfers between Level 1 or Level 2, or transfers in or out of Level 3 of the fair value hierarchy during the three and six months ended June 30, 2022. 
 A summary of the changes in the fair value of the Company’s Level 3 financial instruments as of June 30, 2022 and December 31, 2021 are as follows: 

 Derivative warrant
liability - Trinity
Warrants

 Derivative warrant
liability-Private
Warrants, as
restated (1)

 Forward
Warrant
Agreement
Liability (Asset)

 Earn-out Liability,

as restated (1)

 (in thousands)

 Balance - December 31, 2021
 
 $

 4,355 

 $

 — 

 $

 230 

 $

 — 

 Initial measurement on March 2, 2022 upon Business Combination, as restated (Note 3) (1)
 
 9,612 
 
 20,413 
 
 Change in fair values, as restated (1)
 
 2,015 
 
 ( 3,070 
 ) 
 
 ( 5,078 
 ) 
 
 ( 12,557 
 ) 

 Extinguishment due to exercise of the warrants
 
 ( 6,370 
 ) 
 
 — 
 
 3,305 
 
 — 
 
 Balance - June 30, 2022, as restated (1)
 
 $

 — 

 $

 6,542 

 $

 ( 1,543 

 ) 

 $

 7,856 

 (1)
 
 For discussion on the restatement adjustments, see Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 12. EQUITY PLANS 

 2013 Equity Incentive Plan 

 In 2013, the Company adopted the 2013 Plan which provides for the grant of qualified incentive stock options (“ISO”) and nonqualified stock options (“NSO”), restricted stock, restricted stock units (“RSU”) or other awards to the Company’s employees, officers, directors, advisors, and outside consultants. After the Closing Date and consummation of the Business Combination effective March 2, 2022, no additional awards are being made pursuant to the 2013 Plan. Awards outstanding under the 2013 Plan will continue to be governed by such plan; however, the Company will not grant any further awards under the 2013 Plan. 
 2022 Equity Incentive Plan 

 In connection with the Business Combination (Note 3), the shareholders approved the Rigetti Computing, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) in February, 2022, which became effective immediately upon the Closing Date. The 2022 Plan provides for the grant of ISOs, NSOs, stock appreciation rights, restricted stock awards (“RSA”), restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of Company’s affiliates. The aggregate number of shares of common stock reserved for future issuance under the 2022 Plan is 18,332,215 shares. The number of shares reserved for issuance under the 2022 Plan will automatically increase on January 1st of each year for a period of nine years commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to 5 % of the common stock of all classes outstanding on December 31 of the preceding year; provided, however, that the board of directors of the Company may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock. 
 Stock Options 

 A summary of activity related to stock option is summarized as below (in thousands, except for share and per share data): 
 
 Number of

 Options

 Weighted-Average

 Exercise Price

 Weighted-average

 contractual life
 (in years)

 Aggregate
 Intrinsic
 value

 Outstanding – December 31, 2021
 
 11,468,275 
 
 $ 
 0.36 
 
 8.1 
 
 $ 
 46,839 
 
 Granted
 
 — 
 
 Exercised
 
 ( 1,353,145 
 ) 
 
 $ 
 0.27 
 
 7,104 
 
 Forfeited and expired
 
 ( 632,419 
 ) 
 
 $ 
 0.27 
 
 Outstanding - June 30, 2022
 
 9,482,711 
 
 $ 
 0.35 
 
 7.7 
 
 $ 
 31,454 
 
 Exercisable - June 30, 2022
 
 5,874,426 
 
 $ 
 0.39 
 
 7.7 
 
 $ 
 19,258 
 
 The weighted-average grant date fair value of options granted during the six months ended June 30, 2021 was $ 0.09 per share. No new option grants were issued during the six months ended June 30, 2022. The total intrinsic value of options exercised during the six months ended June 30, 2022 and June 30, 2021 is $ 7.1 million and $ 0.5 million, respectively. 
 As of June 30, 2022, there was $ 1.9 million of unrecognized compensation cost related to non-vested
 stock options granted under the Plan, which is expected to be recognized over a weighted-average period of approximately 1.7 years. 
 
 31 
 
 Table of Contents 
 Restricted Stock Units 

 A summary of activity related to RSUs is summarized as below: 
 
 RSUs

 Weighted Average
 Fair Value
 Per Share

 Balance at December 31, 2021
 
 5,388,455 
 
 Granted
 
 9,885,413 
 
 $ 
 4.89 
 
 Vested
 
 ( 2,630,699 
 ) 
 
 Forfeited
 
 ( 792,643 
 ) 
 
 Balance at June 30, 2022
 
 11,850,526 
 
 On March 2, 2022, the performance condition of all outstanding RSUs was met due to the closing of the Business Combination. As a result, the Company recorded a cumulative catch-up
 compensation expense for the vesting period that has been satisfied as of March 2, 2022 and continues amortizing compensation expenses for unvested RSUs over their remaining vesting period. 
 Total fair value of the RSUs vested during the six months ending June 30, 2022 and 2021 was $ 12.9 million and $ 0 respectively. 
 Stock-based compensation expense related to RSUs granted to employees was $ 10.7 million and $ 21.9 million for the three and six months ended June 30, 2022, respectively. Stock-based compensation expense was $ 0 for the three and six months ended June 30, 2021. As of June 30, 2022, the unrecognized compensation expense related to unvested RSUs was approximately $ 49.1 million which is expected to be recognized over a weighted- average period of approximately 2.24 years. 
 Restricted Stock Awards 

 During the first six months ended June 30, 2022, 120,000 restricted stock awards (“RSAs”) were issued and vested immediately on the grant date as part of transaction bonuses in recognition of efforts in connection with the Business Combination. The total compensation expense related to RSAs was $ 623 thousand for the three and six months ended June 30, 2022, respectively. The compensation expense was $ 0 for the three and six months ended June 30, 2021. 
 The table below summarizes the total stock compensation expenses for the three and six months ended June 30, 2022 and 2021 (in thousands): 
 
 3 Months Ended

 6 Months Ended

 June 30,

 June 30,

 2022

 2022

 Research and development
 
 $ 
 2,209 
 
 $ 
 4,598 
 
 Sales and marketing expenses
 
 256 
 
 697 
 
 General and administrative expenses
 
 8,576 
 
 17,227 
 
 Total Stock Compensation Expenses
 
 $ 
 11,041 
 
 $ 
 22,522 
 
 3 Months Ended

 6 Months Ended

 June 30,

 June 30,

 2021

 2021

 Research and development
 
 $ 
 299 
 
 $ 
 638 
 
 Sales and marketing expenses
 
 29 
 
 61 
 
 General and administrative expenses
 
 193 
 
 419 
 
 Total Stock Compensation Expenses
 
 $ 
 521 
 
 $ 
 1,118 
 
 32 
 
 Table of Contents 
 
 Fair Value of Common Stock and Options 

 The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model that uses the assumptions noted in the table below. Expected volatility for the Company’s common stock was determined based on an average of the historical volatility of a peer group of similar public companies. The expected term of options granted was calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate 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. Treasury yield curve in effect at the time of grant for the period equivalent to the expected life of the option. 
 In determining the exercise prices for options granted, the Company’s board of directors has considered the fair value of the common stock as of the grant date. The fair value of the common stock has 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’s products, 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 common stock, arm’s-length
 sales of the Company’s capital stock (including redeemable convertible preferred stock), the effect of the rights and preferences of the preferred shareholders, and the prospects of a liquidity event, among others. 
 The Company did not grant any stock option awards during the six months ended June 30, 2022. The range of assumptions used in the Black-Scholes option-pricing model for options issued to employees during the six months ended June 30, 2021, are as follows: 
 
 June 30,

 2021

 Expected volatility
 
 46.8 
 % 

 Weighted-average risk-free interest rate
 
 1.07 
 % 

 Expected dividend yield
 
 0 
 % 

 Expected term (in years)
 
 6.1 years 
 
 Exercise price
 
 $ 
 0.21 
 
 13. NET LOSS PER SHARE 

 As a result of the Business Combination (see Note 3), the Company has retroactively adjusted the weighted average shares outstanding prior to March 2, 2022 to give effect to the Exchange Ratio used to determine the number of shares of common stock into which they were converted. 
 The following table sets forth the computation of basic and diluted net loss per share of common stock for the three and six months ended June 30, 2022, and 2021 (in thousands, except for share and per share data): 
 
 Three Months Ended June 30,

 2022

 2021

 As Restated (1)

 Net Loss(1)
 
 $ 
 ( 12,252 
 ) 
 
 $ 
 ( 10,074 
 ) 

 Basic and diluted shares

 Weighted-average Class A Common Stock outstanding
 
 114,096,390 
 
 21,977,123 
 
 Loss per share for Class A Common Stock
 
 — Basic (1)
 
 $ 
 ( 0.11 
 ) 
 
 $ 
 ( 0.46 
 ) 

 — Diluted(1)
 
 $ 
 ( 0.11 
 ) 
 
 $ 
 ( 0.46 
 ) 
 
 33 
 
 Table of Contents 
 
 Six Months Ended June 30,

 2022

 2021

 As Restated (1)

 Net Loss (1)
 
 $ 
 ( 29,894 
 ) 
 
 $ 
 ( 17,861 
 ) 

 Basic and diluted shares

 Weighted-average Class A Common Stock outstanding
 
 84,060,966 
 
 21,912,665 
 
 Loss per share for Class A Common Stock
 
 — Basic (1)
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 ( 0.82 
 ) 

 — Diluted (1)
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 ( 0.82 
 ) 
 
 (1)
 
 For discussion on the restatement adjustments, see Note 1 — Description of Business — Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors 

 There are 3,059,273 shares of contingently issuable common stock pursuant to the earn-out
 arrangement that were not included in the computation of basic net loss per share since the contingencies for the issuance of these shares have not been met as of June 30, 2022. The weighted-average common shares outstanding for the three and six months ended June 30, 2022 and 2021 include 2,683,830 and 3,326,508 warrants with an exercise price of $ 0.01 for the three and six months ended June 30, 2022, respectively, and 5,237,367 and 5,245,876 warrants with an exercise price of $ 0.01 for the three and six months ended June 30, 2021, respectively. 
 The Company’s potential dilutive securities, which include stock options, restricted stock units, convertible preferred stock and warrants have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. 
 The Company excluded the following weighted average potential common shares from the computation of diluted net loss per share as of June 30, 2022 and June 30, 2021: 
 
 June 30,

 2022

 2021

 Convertible Series C-1
 Preferred Stock (1)
 
 — 
 
 23,218,418 
 
 Convertible Series C Preferred Stock (1)
 
 — 
 
 54,478,261 
 
 Common Stock Warrants (1)(2)
 
 14,176,066 
 
 1,890,514 
 
 Stock Options (1)
 
 9,482,711 
 
 12,795,605 
 
 Restricted Stock Units (1)
 
 11,850,526 
 
 — 
 
 35,509,303 
 
 92,382,798 
 
 (1) 
 The number of outstanding shares as of June 30, 2021 have been retrospectively adjusted to reflect the Exchange Ratio. 
 
 (2) 
 The number of outstanding warrants as of June 30, 2022 and June 30, 2021 does not include 1,608,370 shares of Unvested Customer Warrants. 
 
 14. INCOME TAXES 

 The Company did not record income tax expense for the three and six months ended June 30, 2022 or the three and six months ended June 30, 2021 due to the Company’s loss position and full valuation allowance. 
 The effective tax rate differs from the statutory rate, primarily due to the Company’s history of incurring losses, which have not been benefited, the foreign rate differential related to subsidiary earnings, and other permanent differences. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. 
 
 34 
 
 Table of Contents 
 
 15. SEGMENTS 

 The following table presents a summary of revenue by geography for the three and six months ended June 30, 2022 and 2021 (in thousands): 
 
 Three Months Ended June 30,

 2022

 2021

 Amount

 %

 Amount

 %

 (In Thousands)

 (In Thousands)

 United States
 
 $ 
 1,649 
 
 77.3 
 % 
 
 $ 
 593 
 
 38.5 
 % 

 United Kingdom
 
 485 
 
 22.7 
 % 
 
 947 
 
 61.5 
 % 

 $ 
 2,134 
 
 100.0 
 % 
 
 $ 
 1,540 
 
 100.0 
 % 

 Six Months Ended June 30,

 2022

 2021

 Amount

 %

 Amount

 %

 (In Thousands)

 (In Thousands)

 United States
 
 $ 
 3,550 
 
 83.8 
 % 
 
 $ 
 2,783 
 
 71.4 
 % 

 United Kingdom
 
 688 
 
 16.2 
 % 
 
 1,117 
 
 28.6 
 % 

 $ 
 4,238 
 
 100.0 
 % 
 
 $ 
 3,900 
 
 100.0 
 % 

 Revenues from external customers are attributed to individual countries based on the physical location in which the services are provided or the particular customer location with whom the Company has contracted. 
 16. SUBSEQUENT EVENTS 

 The Company entered into a Common Stock Purchase Agreement with B. Riley Principal Capital II, LLC (“B. Riley”) on August 11, 2022 pursuant to which the Company may issue and sell to B. Riley the lesser of i) $ 75.0 
 million in aggregate gross purchase price of newly issued shares of the Company’s common stock or ii) an amount not to exceed 23,648,889 shares of Common Stock (such number of shares equal to approximately 19.99 % of the aggregate number of shares of Common Stock issued and outstanding immediately prior to the execution of the agreement and inclusive of 171,008 shares of common stock issued to B. Riley as consideration for entering into the Common Stock Purchase Agreement). In consideration of the parties entering into the foregoing agreement, the parties also entered into a Registration Rights Agreement on August 11, 2022 pursuant to which the Company provides B.Riley with registration rights with respect to such Common Stock and pursuant to which the Company will file a registration statement covering the resale of such Common Stock. 

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 Table of Contents
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Rigetti Computing, Inc. 10-Q/A

Item 1. Financial Statements
