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Risks Related to Our Financial Condition and Status as an Early-Stage Company
−Removed: Based on our estimates and current business plan, we expect that we will need to raise additional capital by early in the third quarter of 2025 in order to continue our research and development efforts and achieve our business objectives.
We will require a significant amount of cash for expenditures as we invest in ongoing research and development and business operations and may need additional capital sooner than planned to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances, and we cannot be sure that additional financing will be available.
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For example, in addition to our continuing investment in our technology roadmap we continue to invest in the expansion of and upgrades to our Fab-1 facility.
−Removed: We have incurred and expect to incur costs related to, among other things, remediation of our material weaknesses in internal controls over financial reporting.
The actual amounts we may be required to spend on these and other matters may be greater and more significant than our expectations.
−Removed: We believe that our existing cash, cash equivalents and marketable securities should be sufficient to meet our anticipated operating cash needs into early in the third quarter of 2025 based on our current business plan, and expectations and assumptions considering current macroeconomic conditions.
−Removed: Accordingly, based on our estimates and current business plan, we expect that we will need to obtain additional capital by early in the third quarter of 2025 in order to continue our research and development efforts and achieve our business objectives.
+Added: Further, pursuant to the Collaboration Agreement with Quanta, we agreed to invest at least $250 million in the field of quantum computing, in furtherance of our technology roadmap, over a five-year period commencing in February 2025.
+Added: In connection with the Collaboration Agreement, we entered into a Securities Purchase Agreement with Quanta, pursuant to which we agreed to sell and issue to Quanta in a private placement transaction 3,020,412 shares of our Common Stock at a price per share of $11.58782, for an aggregate value of approximately $35.0 million.
+Added: The closing of the private placement transaction is subject to regulatory clearance.
+Added: If such regulatory clearance is not obtained by December 31, 2025, the Securities Purchase Agreement may be terminated by either party;
+Added: in the event of such termination, the Collaboration Agreement may also be terminated by either party.
+Added: If any of the termination events were to occur, we may never close the private placement with Quanta and/or we may never realize the anticipated benefits of the Collaboration Agreement, which may have a materially adverse impact on our business operations and our financial position or results of operations.
+Added: See also “ We have and may in the future enter into collaboration agreements and similar arrangements with third parties for the manufacturing of our products, and these agreements and similar arrangements may never achieve their anticipated goals, which may have a materially adverse impact on our business operations and our financial position or results of operations.
+Added: We believe that our existing cash, cash equivalents and marketable securities should be sufficient to meet our anticipated operating cash needs for at least the next three years based on our current business plan, and expectations and assumptions considering current macroeconomic conditions.
Our operating plan may change because of factors currently unknown, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations or other transactions.
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Any funds we raise may not be sufficient to enable us to continue to implement our long-term business strategy.
−Removed: Further, our ability to raise additional capital may be adversely impacted by worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from disruptions in access to bank deposits or lending commitments due to bank failures, the military conflict with Russia and Ukraine and the related sanctions imposed against Russia and the state of war between Israel and Hamas and the related risk of a larger regional conflict.
−Removed: There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.
+Added: Further, our ability to raise additional capital may be adversely impacted by worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and current and future military conflicts and wars around the world including related sanctions and tariffs and trade protection measures.
+Added: There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur.
A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our products and services and our ability to raise additional capital when needed on acceptable terms, if at all.
−Removed: If the equity and credit markets continue to deteriorate, it may make any necessary financing more difficult, more costly, and more dilutive.
+Added: If the equity and credit markets deteriorate, it may make any necessary financing more difficult, more costly, and more dilutive.
Failure to secure any necessary financing in a timely manner and on favorable terms could impair our ability to achieve our growth strategy, could harm our financial performance and stock price, could require us to delay or abandon our business plans, and could require us to delay, limit, or substantially reduce our quantum computing development efforts.
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This could potentially cause us to cease operations and result in a complete or partial loss of your investment in our securities.
−Removed: We cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.
+Added: We cannot anticipate all of the ways in which the economic climate and financial market and geopolitical conditions could adversely impact our business.
There can be no assurance that financing will be available to us on favorable terms, or at all.
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We are in our early stages and have a limited operating history, which makes it difficult to forecast the future results of our operations.
+Added: We have in the past failed to meet publicly announced milestones and may fail to meet projected technological milestones in the future.
+Added: In addition, we have in the past changed our technology roadmap, including the anticipated milestones and timing thereof.
Our business was founded in 2013 and has operated quantum computers over the cloud since 2017.
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Our ability to generate revenues will largely be dependent on our ability to develop and produce quantum computers with increasing numbers of quantum bits (“qubits”) and with increasing levels of performance.
−Removed: As of the date hereof, the highest number of qubits we have externally deployed is a quantum computer with 84 qubits with 98.0% median fidelities As a result, our scalable business model has not been formed and our technology roadmap may not be realized as quickly as hoped, or even at all.
+Added: As of the date hereof, we have deployed a quantum computer having 84 qubits with a 99.0% two-qubit gate fidelity utilizing iSWAP gates and 99.5% median two-qubit gate fidelity utilizing fSim gates based on internal testing.
+Added: We are still in the technology development phase.
+Added: Our scalable business model has not been formed as of yet and our technology roadmap may not be realized as quickly as hoped, or even at all.
We have in the past failed to meet publicly announced milestones and may fail to meet projected technological milestones in the future.
−Removed: In addition, we have in the past changed our technology roadmap, including anticipated milestones and timing thereof.
We have in the past changed our technology roadmap, including the anticipated milestones and timing thereof, including in each of the years ended 2018, 2022 and 2023.
We may further update the technology roadmap in the future, including anticipated milestones and anticipated timeline for milestones.
−Removed: Furthermore, we may be unable to achieve the milestones in our technology roadmap on their announced anticipated timeline or at all.
+Added: Furthermore, we may be unable to achieve the milestones in our technology roadmap on their announced anticipated timeline or at all, including our next generation of modular system architecture, targeted qubit counts and fidelities.
The development of our scalable business model will likely require the incurrence of a substantially higher level of costs than incurred to date, while our revenues will not substantially increase unless and until more powerful, scalable, higher performing computers are produced, which requires a number of technological advancements which may not occur on the currently anticipated timetable or at all.
As a result, our historical results should not be considered indicative of our future performance.
−Removed: Further, in future periods, our growth could slow or decline for a number of reasons, including but not limited to slowing demand for our QCS, increased competition, changes to technology, inability to scale up or improve performance of our technology, a decrease in the growth of the market, or our failure, for any reason, to continue to take advantage of growth opportunities.
+Added: Further, in future periods, our growth could slow or decline for a number of reasons, including but not limited to slowing demand for sales of our on-premise quantum computers, QCaaS or QCS, increased competition, changes to technology, inability to scale up or improve performance of our technology, a decrease in the growth of the market, or our failure, for any reason, to continue to take advantage of growth opportunities.
We have also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries.
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As of December 31, 2024, we had an accumulated deficit of $554.7 million.
−Removed: We believe that we will continue to incur operating and net losses each quarter until at least the time we begin generating significant revenue from our narrow or broad quantum advantage quantum computers, which may never occur.
−Removed: Even with significant production, our services may never become profitable.
+Added: We believe that we will continue to incur operating and net losses each quarter until at least the time we begin generating significant revenue from our narrow quantum advantage or broad quantum advantage quantum computers, which may never occur.
+Added: Even if our computers achieve narrow quantum advantage or broad quantum advantage, we may never become profitable.
We may incur significantly higher losses in future periods as we, among other things, continue to incur significant expenses in connection with the design, development and manufacturing of our quantum computers;
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Our operating results may be adversely affected by unfavorable economic and market conditions.
−Removed: We have recorded a charge for goodwill impairment and may in the future be required to record significant charges for impairment of other assets or investments.
+Added: In the future we may be required to record significant charges for impairment of our long-lived assets, other assets or investments.
An adverse change in market conditions, including a sustained decline in our stock price, negative changes to the Company’s position in the market, or lack of growth in demand for our products and services could be considered to be an impairment triggering event.
−Removed: Such changes in the future could impact valuation assumptions relating to the recoverability of assets and may result in impairment charges to our long-lived assets, other assets or investments, which would negatively impact our operating results and harm our business.
−Removed: There are inherent uncertainties in management’s estimates, judgments and assumptions used in assessing recoverability of goodwill, intangible, and other long-lived assets.
+Added: Such changes in the future could impact valuation assumptions relating to the recoverability of assets and may result in impairment charges to our long-lived assets, other assets or investments, which would have a negative impact on our operating results and harm our business.
+Added: There are inherent uncertainties in management’s estimates, judgments and assumptions used in assessing recoverability of intangible, and other long-lived assets.
Any material changes in key assumptions, including failure to meet business plans, a deterioration in the U.S.
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From time to time, we may be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our long-lived assets is determined, which might have a materially adverse impact on our business operations and our financial position or results of operations.
−Removed: For example, in assessing our goodwill in connection with the preparation of the financial statements for the fourth quarter and fiscal year ended December 31, 2022, we concluded indicators of impairment were present due to the current macroeconomic conditions, including continued declines in our stock price.
−Removed: Based upon the results of the impairment test, we recorded a goodwill impairment charge of $5.4 million within the consolidated statement of operations for the year ended December 31, 2022.
We may not be able to scale our business quickly enough to meet customer and market demand, which could result in lower profitability or cause us to fail to execute on our business strategies.
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● implement appropriate operational and financial systems;
−Removed: ● establish and maintain effective financial disclosure controls and procedures and remediate material weaknesses thereof.
+Added: ● establish and maintain effective financial disclosure controls and procedures.
Commercial traction of quantum computing technology may never occur.
−Removed: As noted above, there are significant technological challenges associated with developing, producing, marketing and selling services in the advanced technology industry, including our services, and we may not be able to resolve all of the difficulties that may arise in a timely or cost-effective manner, or at all.
−Removed: We may not be able to cost effectively manage production at a scale or quality consistent with customer demand in a timely or economical manner.
+Added: As noted above, there are significant technological challenges associated with developing, producing, marketing and selling products and services in the advanced technology industry, including our products and services, and we may not be able to resolve all of the difficulties that may arise in a timely or cost-effective manner, or at all.
+Added: We may not be able to cost effectively manage production at a scale or quality consistent with customer demand in a timely or economic manner.
Our ability to scale is dependent also upon components we must source from multiple industries including:
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We have a limited frame of reference from which to evaluate the long-term performance of our computers.
−Removed: There can be no assurance that we will be able to detect and fix any defects in our quantum computers in a timely manner that does not disrupt our services to our customers.
+Added: There can be no assurance that we will be able to detect and fix any defects in our quantum computers in a timely manner that does not disrupt our sales of products and services to our customers.
If our technology fails to perform as expected, customers may seek out a competitor or turn away from quantum computing entirely, each of which could adversely affect our sales and brand and could adversely affect our business, prospects and results of operations.
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Our growth is dependent upon our ability to successfully sell quantum computers, expand our solutions and services, retain customers, bring in new customers and retain critical talent.
−Removed: Unforeseen issues associated with scaling up and constructing quantum computing technology at commercially viable levels could negatively impact our business, financial condition and results of operations.
+Added: Unforeseen issues associated with scaling up and constructing quantum computing technology at commercially viable levels could have a negative impact on our business, financial condition and results of operations.
Our growth is dependent upon our ability to successfully market and sell our quantum computers, and quantum computing services and solutions.
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Moreover, because of our unique technology, our customers will require particular support and service functions, some of which are not currently available, and may never be available.
−Removed: If we experience delays in adding such support capacity or servicing our customers efficiently, or experience unforeseen issues with the reliability of our technology, we could overburden our servicing and support capabilities.
+Added: If we experience delays in adding such support capacity or servicing our customers efficiently or experiencing unforeseen issues with the reliability of our technology, we could overburden our servicing and support capabilities.
Similarly, increasing the number of our products and services would require us to rapidly increase the availability of these services.
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To manage the growth of our operations and personnel, we must establish, and maintain appropriate and scalable operational and financial systems, procedures and controls and establish and maintain a qualified finance, administrative and operations staff.
−Removed: The reduction in workforce that we announced in February 2023 may impair our ability to manage growth and maintain operations effectively, due to factors such as loss of institutional knowledge and expertise, employee attrition beyond our intended reduction in force, and the risk that we may not achieve the benefits from the restructuring to the extent we anticipated, all of which may have a material adverse effect on our business, results of operations or financial condition.
We may be unable to acquire the necessary capabilities and personnel required to manage growth or to identify, manage and exploit potential strategic relationships and market opportunities.
−Removed: Our business plan and our 2023 workforce reduction may not have the anticipated benefits and we may incur additional costs or other difficulties.
−Removed: In February 2023, we announced an updated business plan and implemented a workforce reduction.
−Removed: The objective of these initiatives was to focus our organization and its resources on nearer-term strategic priorities.
−Removed: We believe these changes were needed to streamline our organization and reallocate our resources to better align with our current strategic goals.
−Removed: However, the changes to our business strategy and the reduction in workforce may yield unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond our intended reduction-in-force, and the risk that we may not achieve the anticipated benefits, all of which may have an adverse effect on our development activities, ability to progress our technology roadmap, and results of operations or financial condition.
−Removed: We may also incur other charges, costs, future cash expenditures or impairments not currently contemplated due to events that may occur as a result of, or in connection with, the revised business plan and reduction in workforce.
−Removed: In addition, we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees.
−Removed: In addition, our management may need to divert a disproportionate amount of its attention away from our day-to-day strategic and operational activities and devote a substantial amount of time to managing these organizational changes.
−Removed: We may also discover that the reductions in workforce and cost cutting measures will make it difficult for us to pursue new opportunities and initiatives and require us to hire qualified replacement personnel, which may require us to incur additional and unanticipated costs and expenses.
−Removed: Moreover, there is no assurance we will be successful in our pursuit of any of our goals.
−Removed: Our failure to successfully accomplish any of the above activities and goals may have a material adverse impact on our business, financial condition, and results of operations.
−Removed: We have a credit facility secured by substantially all of our assets under which we have borrowed and may in the future borrow additional amounts;
−Removed: any indebtedness thereunder could adversely affect our financial position and our ability to raise additional capital and prevent us from fulfilling our obligations.
−Removed: On March 10, 2021, we entered into a Loan and Security Agreement (as amended from time to time, the “Loan Agreement”) with Trinity Capital Inc.
−Removed: The Loan Agreement had an available borrowing capacity of $32.0 million.
−Removed: As of December 31, 2023, we had total outstanding indebtedness of approximately $22.4 million consisting of outstanding borrowings under the Loan Agreement.
−Removed: Any future additional borrowings under this agreement are at the sole discretion of the lender.
−Removed: This and future indebtedness incurred under the Loan Agreement may:
−Removed: ● limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other general business purposes;
−Removed: ● require us to use a portion of our cash flow from operations to make debt service payments instead of other purposes, thereby reducing the amount of cash flow available for future working capital, capital expenditures, acquisitions, or other general business purposes;
−Removed: ● expose us to the risk of increased interest rates and higher interest payments as borrowings under the Loan Agreement are subject to interest at the greater of (i) a floating per annum rate equal to 7.5% above the prime rate, or (ii) a fixed per annum rate equal to 11.0%, also paid on a monthly basis.
−Removed: Because of this provision, we paid more for interest expense in 2023 due to increases in interest rates throughout the year;
−Removed: ● limit our flexibility to plan for, or react to, changes in our business and industry;
−Removed: ● increase our vulnerability to the impact of adverse economic, competitive and industry conditions;
−Removed: ● increase our cost of borrowing.
−Removed: The Loan Agreement is secured by substantially all of our assets.
−Removed: In addition, the Loan Agreement contains, and the agreements governing our future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interest.
−Removed: These restrictive covenants include, among others, financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, investments (including acquisitions) and transactions with affiliates.
−Removed: Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our debt and potentially the foreclosure on our assets in the event we are unable to repay all amounts owed.
Our ability to use net operating loss carryforwards and other tax attributes may be limited.
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Similar rules apply under state tax laws.
−Removed: Our ability to utilize our federal net operating loss carryforwards, federal research and development tax credit carryforwards and other tax attributes to offset future taxable income or tax liabilities is limited because of prior ownership changes, including changes in connection with the Business Combination or other transactions, and may be further limited in the future if additional ownership changes occur.
+Added: Our ability to utilize our federal net operating loss carryforwards, federal research and development tax credit carryforwards and other tax attributes to offset future taxable income or tax liabilities is limited because of prior ownership changes, including changes in connection with the Business Combination (as described in Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K) and other transactions, and may be further limited in the future if additional ownership changes occur.
See Note 17 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our federal net operating loss carryforwards, federal research and development tax credit carryforwards and other tax attributes.
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Some of the development challenges that could prevent the introduction of our quantum computers include, but are not limited to, failure to find scalable ways to manipulate qubits, failure to reduce error rates, failure to transition quantum systems to leverage low-cost components, and failure to realize multi-chip quantum computer technology.
−Removed: Even if we complete development and achieve volume production of our quantum computers, if the cost, accuracy, performance characteristics or other specifications of the quantum computer fall short of our expectations, our business, financial condition and results of operations would be adversely affected.
−Removed: Any future generations of hardware and software developed to demonstrate narrow quantum advantage and broad quantum advantage, and the potential release of a 336 qubit system, each of which is an important anticipated milestone for our technology roadmap and commercialization, may not occur on our anticipated timeline or at all.
−Removed: Our successful execution of our technology roadmap is based on the development of multiple generations of quantum computing systems, including hardware that demonstrates narrow quantum advantage and broad quantum advantage, and the potential release of a 336 qubit system, and the achievement of our targeted fidelities, each of which is an important anticipated milestone for our technology roadmap and commercialization.
−Removed: The future success of our technology roadmap will depend upon our ability to continue to increase the number of qubits and decrease error rates in each subsequent generation of our quantum computer.
+Added: Even if we complete development and achieve volume production of our quantum computers, if the cost, accuracy, performance characteristics or other specifications of our quantum computers fall short of our expectations, our business, financial condition and results of operations would be adversely affected.
+Added: Any future generations of hardware and software developed to demonstrate narrow quantum advantage and broad quantum advantage, each of which is an important anticipated milestone for our technology roadmap and commercialization, may not occur on our anticipated timeline or at all.
+Added: Our successful execution of our technology roadmap is based on the development of multiple generations of quantum computing systems and the achievement of our targeted qubit counts and fidelities, including hardware that demonstrates narrow quantum advantage and broad quantum advantage, each of which is an important anticipated milestone for our technology roadmap and commercialization.
+Added: The future success of our technology roadmap will depend upon our ability to continue to increase the number of qubits and decrease error rates in subsequent generations of our quantum computers.
If we are unable to achieve the increase in the number of qubits or decrease in error rates on the timeframe that we anticipate, the availability of future generations of quantum computer systems may be materially delayed or may never occur.
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If our computers fail to achieve quantum advantage, our business, financial condition and future prospects may be harmed.
+Added: Moreover, the standards by which we measure our progress may be based on assumptions and expectations that are not accurate or that may change as quantum computing evolves.
Quantum advantage refers to the moment when a quantum computer can compute faster than traditional computers, while quantum supremacy is achieved once quantum computers are powerful enough to complete calculations that traditional supercomputers cannot perform at all.
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Quantum computing technology, including narrow quantum advantage and broad quantum advantage, may take years or decades to be realized, if ever.
+Added: In addition, the standards by which we measure our progress may be based on assumptions and expectations that are not accurate or that may change as quantum computing evolves.
+Added: For example, we measure the performance of our systems by gate fidelity and median gate speed, among other ways, and utilized iSWAP gates and fSIM gates as part of our internal testing.
+Added: To the extent others utilize the same gates in fidelity testing, they may apply the test differently and therefore there may be no comparability between such results.
+Added: There may be other measures that are utilized in the future to measure our progress and the progress of others in the industry and therefore undue reliance should not be placed on our current performance measures.
If we cannot develop quantum computers that have quantum advantage, customers may not continue to purchase our products and services.
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For example, although we currently believe that quantum machine learning for finance is poised to be an early domain of quantum advantage through rapid value capture from quick integration, the risks associated with developing a product that can compute algorithms that scale efficiently to real-world size applications and will be applicable to multiple use cases and competition in creating such a product, among others, could outweigh the benefits.
−Removed: In addition, in February 2023, we announced an updated business strategy and revisions to our technology roadmap reflecting a nearer term reprioritization and focus on higher fidelities and lower qubit systems than our prior business strategy and technology roadmap.
We may fail to capitalize on the products, designs, sectors, or investments we choose to pursue, and our resource allocation decisions may cause us to forego viable or more profitable products, designs, sectors or investments, which would have an adverse effect on our business, prospects and financial results.
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Our current competitors include:
−Removed: ● large, well-established tech companies that generally compete across our products, including Quantinuum, Google, Microsoft, Amazon, Intel and IBM;
+Added: ● large, well-established tech companies that generally compete across our products, including Google, Microsoft, Amazon and IBM;
● large research organizations funded by sovereign nations such as China, Russia, Canada, Australia and the United Kingdom, and those in the European Union as of the date of this Annual Report on Form 10-K and we believe additional countries in the future;
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● new or emerging entrants seeking to develop competing technologies.
−Removed: We compete based on various factors, including technology, performance, multi-cloud availability, brand recognition and reputation, customer support and differentiated capabilities, including ease of administration and use, scalability and reliability, data governance and security.
−Removed: Many of our competitors have substantially greater brand recognition, customer relationships, and financial, technical and other resources, including an experienced sales force and sophisticated supply chain management.
+Added: We compete based on various factors, including technology, performance, open architecture, multi-cloud availability, brand recognition and reputation, customer support and differentiated capabilities, including ease of administration and use, scalability and reliability, data governance and security.
+Added: Many of our competitors have substantially greater brand recognition, customer relationships, and financial, technical and other resources, including an experienced sales force and customer service organization and sophisticated supply chain management.
They may be able to respond more effectively than us to new or changing opportunities, technologies, standards, customer requirements and buying practices.
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In addition, other competitors might be able to compete with us by bundling their other products in a way that does not allow us to offer a competitive solution.
−Removed: Additionally, we must be able to achieve our objectives in a timely manner lest quantum computing lose ground to competitors, including competing technologies.
+Added: Additionally, we must be able to achieve our objectives in a timely manner such that we don’t lose ground to competitors, including competing technologies.
For example, our competitors may achieve certain narrow and/or broad quantum milestones faster than us, which may negatively impact our business and prospects.
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Any failure to achieve objectives in a timely manner could adversely affect our business, operating results and financial condition.
−Removed: For all of these reasons, competition may negatively impact our ability to maintain and grow consumption of our platform or put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.
+Added: For all of these reasons, competition may have a negative impact our ability to maintain and grow consumption of our platform or put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.
We depend on a limited number of customers for a significant percentage of our revenue and the loss or temporary loss of a major customer for any reason could harm our financial condition.
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Because of the concentrated nature of our customer base, our quarterly revenue and results of operations may fluctuate from quarter to quarter and are difficult to estimate, and any delay, reduction or cancellation of orders or services rendered or any acceleration or delay in anticipated purchases or grants and awards by our larger customers could materially affect our revenue and results of operations in any quarterly period.
−Removed: For further information regarding our customer concentration, refer to Note 18 of our audited consolidated financial statements for the years ended December 31, 2023, included elsewhere in this Annual Report on Form 10-K.
+Added: For further information regarding our customer concentration, refer to Note 16 of our audited consolidated financial statements for the year ended December 31, 2024, included elsewhere in this Annual Report on Form 10-K.
We may be unable to sustain or increase our revenue from our larger customers, grow revenues with new or other existing customers, or offset the discontinuation of concentrated purchases by our larger customers with purchases by new or existing customers.
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● Changes in government fiscal or procurement policies, or decreases in government funding available for procurement of goods and services generally, or for our federal government contracts specifically;
+Added: ● Government entities exercising termination for convenience rights on our existing government contracts with such government entities;
● Changes in government programs or applicable requirements;
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● Increased or unexpected costs or unanticipated delays caused by other factors outside of our control.
−Removed: For example, following the second quarter 2022, we experienced lower-than-expected new government contract opportunities and slower than anticipated timing of government funding and appropriations with respect to relevant projects in 2022.
−Removed: Any such of the foregoing events or activities, among others, could cause governments and governmental agencies to delay or refrain from entering into contracts with us and/or purchasing our computers in the future, reduce the size or timing of payments with respect to our services to, or purchases from, existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition, and growth prospects.
−Removed: Our business is currently dependent upon our relationship with our cloud providers.
−Removed: There are no assurances that we will be able to commercialize quantum computers from our relationships with cloud providers.
+Added: Any of the foregoing events or activities, among others, could cause governments and governmental agencies to delay or refrain from entering into contracts with us and/or purchasing our computers in the future, reduce the size or timing of payments with respect to our services to, or purchases from, existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition, and growth prospects.
+Added: Our ability to commercialize our quantum computers in the future may be dependent upon our relationships with cloud providers.
We currently offer access to quantum computing as a service (“Quantum Computing as a Service” or “QCaaS”), both directly to our end users with our own Quantum Cloud Services and indirectly to end users through public cloud providers such as Amazon Braket and Microsoft Azure Quantum who integrate our QCS into their own quantum computing platforms.
These public cloud partners operate a service in direct competition with our providing direct access to QCS.
−Removed: Currently, a majority of our QCaaS business is run through the AWS service, and we intend to partner with additional partners to provide access to our QCaaS.
+Added: In addition, we intend to partner with additional partners to provide access to our QCaaS.
Cloud computing partnerships could be terminated, or not scale as anticipated, or even at all.
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These services are predominantly on AWS.
−Removed: Any material change in our contractual and other business relationships with AWS or other cloud provider, could result in reduced use of our systems, increased expenses, including service credit obligations, and harm our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.
+Added: Any material change in our contractual and other business relationships with AWS or other cloud providers, could result in reduced use of our systems, increased expenses, including service credit obligations, and harm our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.
Further, if our contractual and other business relationships with our partners are terminated, either by the counterparty or by us, suspended or suffer a material change to which we are unable to adapt, such as the elimination of services or features on which we depend, we would be unable to provide our QCaaS business at the same scale and would experience significant delays and incur additional expense in transitioning customers to a different public cloud provider.
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Our ability to identify and develop relationships with qualified suppliers and enter into exclusive or restrictive distribution rights agreements with suppliers who can satisfy our standards for quality and our need to access products and supplies in a timely and efficient manner is a significant challenge.
−Removed: Any failure to maintain our relationship with any of our top ten largest suppliers, or a failure to replace any such supplier that is lost, could have a material adverse effect on our business, financial position, results of operations and cash flows.
+Added: Any failure to maintain our relationship with any of our key suppliers, or a failure to replace any such supplier that is lost, could have a material adverse effect on our business, financial position, results of operations and cash flows.
We may be required to replace a supplier if their products do not meet our quality or safety standards.
In addition, our suppliers could discontinue selling products at any time for reasons that may or may not be in our control or the suppliers’ control, including shortages of raw materials, environmental and social supply chain issues, pandemic, labor disputes or weather conditions.
−Removed: Disruptions in transportation lines or the ongoing military conflict involving Russia and Ukraine or the state of war between Israel and Hamas may also cause global supply chain issues that affect us or our suppliers.
+Added: Disruptions in transportation lines or ongoing military conflicts and wars around the world, including related sanctions, may also cause global supply chain issues that affect us or our suppliers.
We generally have multiple sources of supply, however, in some cases, materials are provided by a single supplier.
−Removed: For example, our small and mid-size cryogenic refrigerators have been provided by a single supplier and we have begun to source from a second supplier.
−Removed: In addition, we expect that larger cryogenic refrigerators required in connection with the potential development of systems greater than 100 qubits will be provided by a single supplier, at least for an initial period of time.
−Removed: We cannot assure you that any of our suppliers or potential suppliers will have the capacity to supply larger cryogenic refrigerators on the terms, timing or scale that we expect.
The loss of, or substantial decrease in the availability of, products from our suppliers, or the loss of a key supplier, temporarily or permanently, could result in a material shortage of products, which could lead to price escalations that we may be unable to offset by our prices to our customers.
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Although we seek to have alternate sources and recover increases in input costs through price increases in our products, shortages, supply chain interruptions or regulatory changes or other governmental actions could result in the need to change suppliers or incur cost increases that cannot, in the short term, or in some cases even in the long-term, be offset by our prices.
+Added: We have and may in the future enter into collaboration agreements and similar arrangements with third parties for the manufacturing of our products, and these agreements and similar arrangements may never achieve their anticipated goals, which may have a materially adverse impact on our business operations and our financial position or results of operations.
+Added: We may enter into agreements with third parties for the manufacture and development of components for our current and future quantum computers.
+Added: For example, in February 2025, one of our wholly-owned subsidiaries entered into the Collaboration Agreement with Quanta for the development of certain components to be incorporated into our current and future quantum computers.
+Added: However, no statements of work were entered into by the parties in connection with the entry into the Collaboration Agreement, and there can be no assurance that we will ever enter into a statement of work with Quanta pursuant to the Collaboration Agreement.
+Added: If no statement of work has been entered into by December 31, 2025, either party may terminate the Collaboration Agreement.
+Added: In that instance, or if statements of work are entered into but do not achieve the anticipated results, we may never realize the anticipated benefits of the Collaboration Agreement.
+Added: In addition, pursuant to the Collaboration Agreement, each of the parties agreed to invest at least $250 million over the next five years in the field of quantum computing (and Quanta’s investment will be towards personnel and capital expenditures for developing products and services and manufacturing capability in furtherance of the Rigetti Sub product roadmap).
+Added: If the Collaboration Agreement is terminated before Quanta fulfills any or all of its investment commitment, we may not receive the anticipated benefits from the Collaboration Agreement.
+Added: Further, we also entered into the Securities Purchase Agreement with Quanta in connection with the Collaboration Agreement, pursuant to which Quanta agreed to purchase in a private placement transaction certain shares of our common stock for an aggregate value of approximately $35 million (the “Private Placement”).
+Added: However, the closing of the Private Placement is subject to, among other things, the expiration of a 30-day waiting period after our submission of a classification request to the Bureau of Industry and Security of the Department of Commerce (the “BIS Clearance”).
+Added: If the BIS Clearance is not obtained by December 31, 2025, the Securities Purchase Agreement may be terminated by either party;
+Added: in the event of such termination, the Collaboration Agreement may also be terminated by either party.
+Added: If any of the termination events were to occur, we may never close the Private Placement and/or we may never realize the anticipated benefits of the Collaboration Agreement, which may have a materially adverse impact on our business operations and our financial position or results of operations.
We may face unknown supply chain issues that could delay the development or introduction of our products and negatively impact our business and operating results.
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● a significant increase in the price of one or more components, including due to industry consolidation occurring within one or more component supplier markets or as a result of decreased production capacity at manufacturers;
−Removed: ● any reductions or interruption in supply, including disruptions on our global supply chain as a result of the ongoing military conflict between Russia and Ukraine and sanctions related thereto and the state of war between Israel and Hamas and the potential larger regional conflict) (including as a result of disruptions in global shipping, the transport of products, energy supply, cybersecurity incidents and banking systems as well as our ability to control input costs) or otherwise;
+Added: ● any reductions or interruption in supply, including disruptions to our global supply chain as a result of the ongoing military conflicts and wars around the world and sanctions related thereto (including as a result of disruptions in global shipping, the transport of products, energy supply, cybersecurity incidents and banking systems as well as our ability to control input costs) or otherwise;
● financial problems of either manufacturers or component suppliers;
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● a failure to appropriately cancel, reschedule or adjust our requirements based on our business needs.
−Removed: If any of the aforementioned factors were to materialize, it could cause us to halt production of our quantum computing solutions and/or entail higher manufacturing costs, any of which could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships.
−Removed: Our systems depend on the use of certain development tools, supplies, equipment and production methods.
−Removed: If we are unable to procure the necessary tools, supplies and equipment to build our quantum systems, or are unable to do so on a timely and cost-effective basis, and in sufficient quantities, we may incur significant costs or delays which could negatively affect our operations and business.
−Removed: There are limited suppliers to sources of materials which may be necessary for the production of our technology.
−Removed: We are currently reliant on a single or small number of suppliers for certain resources.
−Removed: While we are currently looking to engage additional suppliers, there is no guarantee we will be able to establish or maintain relationships with such additional suppliers on terms satisfactory to us.
−Removed: Reliance on any single supplier increases the risks associated with being unable to obtain the necessary components because the supplier may have manufacturing constraints, can be subject to unanticipated shutdowns and/or may be affected by natural disasters and other catastrophic events.
−Removed: Some of these factors may be completely out of our and our suppliers’ control.
−Removed: Failure to acquire sufficient quantities of the necessary components in a timely or cost-effective manner could materially harm our business.
+Added: If any of the aforementioned factors were to materialize, it could negatively impact our research and development efforts or cause us to halt production of our quantum computing solutions and/or entail higher manufacturing costs, any of which could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships.
Even if we are successful in developing quantum computing systems and executing our strategy, competitors in the industry may achieve technological breakthroughs which render our quantum computing systems obsolete or inferior to other products.
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If we do not achieve economies of scale or if the anticipated cost savings do not materialize, we may be unable to achieve a lower cost per qubit, which would make our quantum computing solution less competitive than those produced by our competitors and could have a material adverse effect on our business, financial condition or results of operations.
−Removed: Due to macroeconomic headwinds, we have experienced and may continue to experience increased costs, including with respect to labor and products.
+Added: Due to macroeconomic headwinds, including inflation, we have experienced and may continue to experience increased costs, including with respect to labor and products.
The quantum computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solution does not drive commercial engagement, the growth of our business will be harmed.
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In addition, our growth and future demand for our products is highly dependent upon the adoption by developers and customers of quantum computers, as well as on our ability to demonstrate the value of quantum computing to our customers.
−Removed: Delays in future generations of our quantum computers or technical failures at other quantum computing companies could limit acceptance of our solution.
−Removed: Negative publicity concerning our solution or the quantum computing industry as a whole could limit acceptance of our solution.
+Added: Delays in future generations of our quantum computers or technical failures at other quantum computing companies could limit acceptance of our solutions.
+Added: Negative publicity concerning our solutions or the quantum computing industry as a whole could limit acceptance of our solutions.
We believe quantum computing will solve many large-scale problems.
However, such problems may never be solvable by quantum computing technology.
−Removed: If our clients and partners do not perceive the benefits of our solution, or if our solution does not drive member engagement, then demand for our products may not develop at all, or it may develop slower than we expect.
+Added: If our clients and partners do not perceive the benefits of our solutions, or if our solutions do not drive member engagement, then demand for our products may not develop at all, or it may develop slower than we expect.
If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations.
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Our business depends on our quantum computing systems being available.
−Removed: We have experienced, and may in the future further experience, disruptions, outages, defects and other performance and quality problems with our systems.
−Removed: We have also experienced, and may in the future further experience, disruptions, outages, defects and other performance and quality problems with the public cloud and internet infrastructure on which our systems rely.
+Added: We have experienced and may in the future experience, disruptions, outages, defects and other performance and quality problems with our systems.
+Added: We have also experienced and may in the future experience, disruptions, outages, defects and other performance and quality problems with the public cloud and internet infrastructure on which our systems rely.
These problems can be caused by a variety of factors, including failed introductions of new functionality, vulnerabilities and defects in proprietary and open-source software, hardware components, human error or misconduct, capacity constraints, design limitations, or denial of service attacks or other security-related incidents.
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Any disruptions, outages, defects and other performance and quality problems with our quantum computing systems or with the public cloud and internet infrastructure on which we rely, could result in reduced use of our systems, increased expenses, including service credit obligations, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: If we cannot successfully execute on our strategy, including in response to changing customer needs and new technologies and other market requirements, or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed.
+Added: If we cannot successfully execute our strategy, including in response to changing customer needs and new technologies and other market requirements, or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed.
The quantum computing market is characterized by rapid technological change, changing user requirements, uncertain product lifecycles and evolving industry standards.
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Our future success depends on our ability to continue to innovate and increase customer adoption of our quantum solutions.
−Removed: If we are unable to enhance our quantum computing system to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, with better functionality, more conveniently, or more securely than our platform, our business, financial condition and results of operations could be adversely affected.
+Added: If we are unable to enhance our quantum computing systems to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, with better functionality, more conveniently, or more securely than our platform, our business, financial condition and results of operations could be adversely affected.
We are highly dependent on our ability to attract and retain senior executive leadership and other key employees, such as quantum physicists, software engineers and other key technical employees, which is critical to our success.
−Removed: If we fail to retain talented, highly qualified senior management, engineers and other key employees or attract them when needed, such failure could negatively impact our business.
+Added: If we fail to retain talented, highly qualified senior management, engineers and other key employees or attract them when needed, such a failure could negatively impact our business.
Our future success is highly dependent on our ability to attract and retain our executive officers, key employees and other qualified personnel.
−Removed: As we build our brand and become more well known, there is increased risk that competitors or other companies may seek to hire our personnel.
−Removed: The loss of the services provided by these individuals will adversely impact the achievement of our business strategy.
+Added: As we build our brand and become more well known, there is an increased risk that competitors or other companies may seek to hire our personnel.
+Added: The loss of the services provided by these individuals will have an adverse impact on the achievement of our business strategy.
These individuals could leave our employment at any time, as they are “at will” employees.
A loss of a member of senior management, or an engineer or other key employee particularly to a competitor, could also place us at a competitive disadvantage.
−Removed: Effective succession planning is also important to our long-term success and may cause disruption to our business due to, among other things, diverting management’s attention away from the operations of the business or causing a deterioration to morale.
+Added: Effective succession planning is also important to our long-term success and may cause disruption to our business due to, among other things, diverting management’s attention away from the operations of the business or causing a deterioration in morale.
Failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.
−Removed: For example, our former President and Chief Executive Officer, Dr.
−Removed: Chad Rigetti, resigned in the fourth quarter of 2022 and was replaced by our current President and Chief Executive Officer, Dr.
−Removed: Subodh Kulkarni, following a transition period with an interim President and Chief Executive Officer.
−Removed: In addition, in the first quarter of 2023, we announced the departure of our former Chief Financial Officer, Brian Sereda, and the appointment of Jeffrey Bertelsen as our current Chief Financial Officer.
−Removed: Furthermore, the reduction in workforce that we announced in February 2023 may yield unintended consequences and costs, such as the loss of institutional knowledge and expertise, employee attrition beyond our intended reduction in force, and the risk that we may not achieve the benefits from the restructuring to the extent or as quickly as we anticipate, all of which may have a material adverse effect on our business, results of operations or financial condition.
−Removed: In addition, we may discover that the workforce reduction and other restructuring efforts will make it difficult for us to pursue new opportunities and initiatives and require us to hire qualified replacement personnel, which may require us to incur additional and unanticipated costs and expenses.
Our future success also depends on our continuing ability to attract, develop, motivate, and retain highly qualified and skilled employees.
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Many of the other companies with which we compete for qualified personnel have greater financial and other resources than we do.
−Removed: The effective operation of our supply chain, including the acquisition of critical components and materials, the development of our quantum computing technologies, the commercialization of our quantum computing technologies and the effective operation of our managerial and operating systems all depend upon our ability to attract, train and retain qualified personnel in the aforementioned specialties.
+Added: The effective operation of our supply chain, including the acquisition of critical components and materials, the development and commercialization of our quantum computing technologies and the effective operation of our managerial and operating systems all depend upon our ability to attract, train and retain qualified personnel in the aforementioned specialties.
Additionally, changes in immigration and work permit laws and regulations or the administration or interpretation of such laws or regulations could impair our ability to attract and retain highly qualified employees.
−Removed: If we cannot attract, train and retain qualified personnel in this competitive environment, we may experience delays in the development of our quantum computing technologies and be otherwise unable to develop and grow our business as projected, or even at all.
+Added: If we cannot attract, train and retain qualified personnel in this competitive environment, we may experience delays in the development of our quantum computing technologies and otherwise be unable to develop and grow our business as projected, or even at all.
Our future growth and success depends on our ability to sell effectively to government entities and large enterprises.
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These risks include, but are not limited to, (i) increased purchasing power and leverage held by such customers in negotiating contractual arrangements with us and (ii) longer sales cycles and the associated risk that substantial time and resources may be spent on a potential end-customer that elects not to purchase our solutions.
−Removed: Sales to government agencies are typically under fixed fee development contracts, which involve additional risks.
+Added: Sales to government agencies are often fixed fee development contracts, which involve additional risks.
See “- If our cost and time estimates for fixed fee arrangements do not accurately anticipate the cost of servicing those arrangements, we could experience losses on these arrangements or our profitability could be reduced.
−Removed: In addition, government contracts generally include the ability of government agencies to terminate early which, if exercised, would result in a lower contract value and lower than anticipated revenues generated by such arrangement.
+Added: In addition, government contracts generally include the ability of government agencies to terminate early which, if exercised, would result in a lower contract value and lower than anticipated revenues generated by such arrangements.
See “ Contracts with U.S.
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If we overestimate our requirements, our suppliers may have excess inventory, which indirectly would increase our costs.
−Removed: If we underestimate our requirements, our suppliers may have inadequate inventory, which could interrupt manufacturing of our products and result in delays in shipments and revenues.
−Removed: In addition, lead times for materials and components that our suppliers order may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at a given time.
−Removed: If we fail to order sufficient quantities of product components in a timely manner, the delivery of quantum computers and related compute time to our potential customers could be delayed, which would harm our business, financial condition and operating results.
+Added: If we underestimate our requirements, our suppliers may have inadequate inventory, which could interrupt the manufacturing of our products and result in delays in shipments and revenues.
+Added: In addition, the lead times for materials and components that our suppliers order may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at a given time.
+Added: If we fail to order sufficient quantities of product components in a timely manner, the delivery of quantum computers, QcaaS or QCS to our potential customers could be delayed, which would harm our business, financial condition and operating results.
Our quantum computing systems may not be compatible with some or all industry-standard software and hardware in the future, which could harm our business.
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● generate revenue.
−Removed: We may not be successful in establishing or maintaining suitable partnerships, and we may not be able to negotiate collaboration agreements having terms satisfactory to the Company, or at all.
+Added: We may not be successful in establishing or maintaining suitable partnerships, and we may not be able to negotiate collaboration agreements having satisfactory terms to the Company, or at all.
Failure to make or maintain these arrangements or a delay or failure in a collaborative partner’s performance under any such arrangements could harm our business and financial condition.
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loss of customers or sales;
+Added: loss of intellectual property or other confidential business information;
and other adverse consequences, which may adversely affect our business.
In the ordinary course of our business, we and the third parties upon which we rely, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process), proprietary, confidential, and sensitive data, including personal data, intellectual property, controlled unclassified information and trade secrets (collectively, sensitive information).
−Removed: Cyber-attacks, malicious internet-based activity, online and offline fraud, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, viruses, and social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks) and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
+Added: Cybersecurity incidents such as malicious internet-based activity, online and offline fraud, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, viruses, and social engineering (including through deep fakes or other attacks using artificial intelligence which may be increasingly more difficult to identify as fake, and phishing attacks) as well as natural disasters and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
Such threats are prevalent in the technology industry and our customers’ industries and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
−Removed: The techniques may be used to sabotage or to obtain unauthorized access to our platform, systems, networks, or physical facilities where our quantum computers are stored, and we may be unable to implement adequate preventative measures or stop security breaches while they are occurring.
−Removed: law enforcement agencies have indicated to us that quantum computing technology is of particular interest to certain malicious cyber threat actors.
+Added: The techniques may be used to sabotage or to obtain unauthorized access to our platform, systems, networks, or physical facilities where our quantum computers are stored, and we may be unable to implement adequate preventative measures or stop cybersecurity incidents from occurring or expanding in scope.
+Added: law enforcement agencies have indicated to us that quantum computing technology is of particular interest to certain malicious cyber threat actors, including nation-state-supported actors.
In addition, our cybersecurity risk could be increased as a result of the ongoing military conflict between Russia and Ukraine and the related sanctions imposed against Russia.
−Removed: Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
−Removed: During times of war and other major conflicts, we, the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
+Added: During times of war and other major conflicts, we, the third parties upon which we rely, may be vulnerable to a heightened risk of cybersecurity incidents, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, our third-party information systems, supply chain, and ability to produce, sell and distribute our goods and services.
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
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Our platform is built to be accessed through third-party public cloud providers such as AWS.
−Removed: These providers may also experience breaches and attacks to their products which may impact our systems.
−Removed: Data security breaches may also result from non-technical means, such as actions by an employee with access to our systems.
+Added: These providers may also experience cybersecurity incidents and attacks to their products which may impact our systems.
+Added: Cybersecurity incidents may also result from non-technical means, such as actions by an employee with access to our systems.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
−Removed: If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
+Added: If our third-party service providers experience a cybersecurity incident or other interruption, we could experience adverse consequences.
While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
We may expend significant resources or modify our business activities to try to protect against security incidents.
−Removed: Certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information.
−Removed: While we and our third-party cloud providers have implemented security measures designed to protect against security breaches, can be of no assurance that these measures will be effective and these measures could fail or may be insufficient, resulting in the unauthorized disclosure, modification, misuse, destruction, or loss of sensitive or confidential information.
−Removed: We take steps designed to detect, mitigate, and remediate vulnerabilities, in our information systems (such as our hardware and/or software, including that of third parties upon which we rely), but we may not be able to detect and remediate all vulnerabilities on a timely basis because the threats and techniques used to exploit the vulnerability change frequently and are often sophisticated in nature.
−Removed: Therefore, such vulnerabilities could be exploited but may not be detected until after a security incident has occurred.
−Removed: Any unremediated vulnerabilities pose material risks to our business.
−Removed: Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.
−Removed: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.
−Removed: A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our platform, products , and services.
−Removed: Certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information.
−Removed: In addition, applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors of security incidents.
+Added: Certain data privacy and security obligations may require us to implement and maintain specific security measures to protect our information technology systems and sensitive information.
+Added: While we and our third-party cloud providers have implemented security measures designed to protect against cybersecurity incidents, there can be no assurance that these measures will be effective and these measures could fail or may be insufficient.
+Added: Although we take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely), but we may not be able to detect and remediate all vulnerabilities on a timely basis because the threats and techniques used to exploit the vulnerability change frequently and are often sophisticated in nature.
+Added: Therefore, such vulnerabilities could be exploited but may not be detected until after a cybersecurity incident has occurred.
+Added: In addition, applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors of cybersecurity incidents.
Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
−Removed: Actual or perceived breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about the Company, our partners, our customers or third parties could expose us and the parties affected to a risk of loss or misuse of this information, resulting in litigation and potential liability, paying damages, regulatory inquiries or actions, damage to our brand and reputation or other harm to our business.
+Added: Actual or perceived cybersecurity incidents affecting sensitive information about the Company, our partners, our customers or third parties could expose us and the parties affected to a risk of loss or misuse of this information, resulting in litigation and potential liability, paying damages, regulatory inquiries or actions, damage to our brand and reputation or other harm to our business.
Our efforts to prevent and overcome these challenges could increase our expenses and may not be successful.
−Removed: If we fail to detect or remediate a security breach in a timely manner, or a breach otherwise affects our customers, or if we suffer a cyber-attack that impacts our ability to operate our platform, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
+Added: If we fail to detect or remediate a cybersecurity incident in a timely manner, or it otherwise affects our customers or impacts our ability to operate our platform, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
additional reporting requirements and/or oversight;
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and other similar harms.
−Removed: Security incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
+Added: Cybersecurity incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
+Added: Cybersecurity incidents also may result in current or future competitors obtaining sensitive information, including proprietary information.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
−Removed: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
+Added: In addition to experiencing a cybersecurity incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveal competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Unfavorable conditions in our industry or the global economy could limit our ability to grow our business and negatively affect our results of operations.
−Removed: Our results of operations have varied and may continue to vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers.
−Removed: Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, international trade relations, pandemics, political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States or elsewhere, could cause a decrease in business investments, including the progress on development of quantum technologies, and negatively affect the growth of our business.
+Added: Our results of operations have varied and may continue to vary based in part on the impact of changes in our industry or the global economy on us or our customers and potential customers.
+Added: Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, financial and credit market fluctuations, international trade relations and tariffs, pandemics, political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States or elsewhere, could cause a decrease in business investments, including the progress on development of quantum technologies, and negatively affect the growth of our business.
In addition, in challenging economic times, our current or potential future customers may experience cash flow problems and as a result may modify, delay or cancel plans to purchase our products and services.
−Removed: Additionally, if our customers are not successful in generating sufficient revenue or are unable to secure financing, they may not be able to pay, or may delay payment of, accounts receivable due to it.
−Removed: Moreover, our key suppliers may reduce their output or become insolvent, thereby adversely impacting our ability to manufacture our products.
+Added: Additionally, if our customers are not successful in generating sufficient revenue or are unable to secure financing, they may not be able to pay, or may delay payment of, accounts receivable.
+Added: Moreover, our key suppliers may reduce their output or become insolvent, thereby adversely impacting our ability to execute our research and development plans or manufacture our products .
Furthermore, uncertain economic conditions may make it more difficult for us to raise funds through borrowings or private or public sales of debt or equity securities.
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Unstable market and economic conditions have had and may continue to have serious adverse consequences on our business, financial condition and share price.
−Removed: The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates, higher interest rates, bank failures and uncertainty about economic stability.
−Removed: For example, recent bank failures have resulted in volatility in the capital markets.
−Removed: Similarly, the ongoing military conflict between Russia and Ukraine, and the war between Israel and Hamas, have created extreme volatility in the global capital markets and is expected to have further global economic consequences, including disruptions of the global supply chain and energy markets.
−Removed: Any volatility and disruptions may have adverse consequences on us or the third parties on whom we rely.
−Removed: If general economic conditions were to deteriorate or remain uncertain for an extended period, our liquidity and ability to repay our outstanding debt may be harmed and the trading price of our Common Stock could decline.
−Removed: A significant decline of stock price has caused, and may cause in the future, a triggering event for impairment testing of fair-valued assets and long-lived assets.
−Removed: For example, in assessing our goodwill in connection with the preparation of the financial statements for the fourth quarter and fiscal year ended December 31, 2022, we concluded indicators of impairment were present due to the current macroeconomic conditions, including continued declines in our stock price.
−Removed: Based upon the results of the impairment test, we recorded a goodwill impairment charge of $5.4 million within the consolidated statement of operations for the twelve months ended December 31, 2022.
−Removed: If the equity and credit markets further deteriorate, including as a result of political unrest or war, it may make any necessary financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive, and we could be forced to delay, reduce or eliminate our research and development programs and other efforts.
+Added: At times in the past, the global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates, higher interest rates, bank failures and uncertainty about economic stability.
+Added: Any volatility or disruptions in market and economic conditions may have adverse consequences on us or the third parties on whom we rely.
+Added: If general economic conditions were to deteriorate or remain uncertain for an extended period, our liquidity may be harmed and the trading price of our Common Stock could decline.
+Added: If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive, and we could be forced to delay, reduce or eliminate our research and development programs and other efforts.
Increased inflation rates have and are expected to adversely affect us by increasing our costs, including labor and employee benefit costs, and costs for equipment and system components associated with system development.
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If our cost and time estimates for fixed fee arrangements do not accurately anticipate the cost of servicing those arrangements, we could experience losses on these arrangements and our profitability could be reduced.
−Removed: Our development contracts are typically fixed fee arrangements invoiced on a milestone basis.
+Added: Our development contracts are often fixed fee arrangements invoiced on a milestone basis.
If we underestimate the amount of effort required to deliver on a contract and/or the period of time required to achieve the milestone, our profitability could be reduced.
If the actual costs of completing the contract exceed the agreed upon fixed price, we would incur a loss on the arrangement.
−Removed: We have identified material weaknesses in our internal control over financial reporting related to the lack of effective review controls over the accounting for complex financial instruments and to the design and operation of our overall closing and financial reporting processes, and we may identify additional material weaknesses in the future.
−Removed: The material weakness over accounting for complex financial instruments has resulted in errors in financial statements for prior periods.
−Removed: If we fail to remediate such material weaknesses, if we identify additional material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, it may adversely affect our ability to accurately and timely report our financial results in the future, and may adversely affect investor confidence, our reputation, our ability to raise additional capital and our business operations and financial condition.
+Added: In the past we identified material weaknesses in our internal control over financial reporting, leading to a restatement of our financial statements for prior periods.
+Added: These material weaknesses were subsequently remediated following implementation and testing of a series of new controls and procedures.
+Added: If we identify additional material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, it may adversely affect our ability to accurately and timely report our financial results in the future, and may adversely affect investor confidence, our reputation, our ability to raise additional capital and our business operations and financial condition.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: As previously disclosed, in connection with our unaudited condensed consolidated financial statements for the nine months ended October 31, 2021, we identified a material weakness in our internal control over financial reporting related to the lack of effective review controls over the accounting for complex financial instruments.
−Removed: Specifically, the controls failed to identify an error in the accounting for complex warrant instruments.
−Removed: The error related to the Company not properly accounting for the liability associated with the warrants to purchase common stock issued to Trinity Capital Inc.
−Removed: that was subsequently cancelled and reissued for a new warrant in connection with an amendment to the Loan Agreement.
−Removed: In addition, in connection with the preparation of the financial statements for the second quarter of 2022, we also identified and corrected an immaterial error related to the revaluation of the liability associated with the same warrants issued to Trinity Capital.
−Removed: The error was made in the previously issued unaudited condensed consolidated financial statements as of and for the period ended March 31, 2022.
−Removed: We corrected the immaterial error in our condensed consolidated financial statements as of and for the period ended June 30, 2022 and restated our financial statements for the quarters ended March 31, 2022 and June 30, 2022 as described below, and reversed such prior correction and instead reflected such correction in the restated financial statements for the quarter ended March 31, 2022.
−Removed: In connection with the preparation of the financial statements for the third quarter of 2022, we discovered that the previously identified material weakness led to additional material errors related to the valuation of the Earn-out liabilities and the Private Warrant liability that affected the previously issued unaudited condensed consolidated financial statements as of and for the periods ended March 31, 2022 and June 30, 2022.
−Removed: These errors were corrected in the unaudited condensed consolidated financial statements as of and for the periods ended March 31, 2022 and June 30, 2022 through a restatement of previously filed financial statements for such periods.
−Removed: Our management previously concluded that this material weakness in our internal control over financial reporting was due to the fact that at the time we initially identified the material weakness, we did not have sufficient accounting resources and did not have the necessary business processes and related internal controls formally designed and implemented to address the accounting and financial reporting requirements related to these complex instruments.
−Removed: This material weakness continued to exist as of December 31, 2023 because the controls that were implemented as part of our plan to remediate this material weakness have not been operating for a sufficient period of time to allow management to conclude through testing that the controls are effective.
−Removed: Additionally, in connection with the preparation of the financial statements for the year ended December 31, 2022, we identified a material weakness in our internal control over financial reporting related to the design and operation of our overall closing and financial reporting processes, including the timely preparation of account reconciliations, effective segregation of duties, particularly with respect to IT systems and a lack of timely review over the financial statement close process.
−Removed: We concluded that this material weakness is due to the fact that, between the date the Company went public pursuant to the Business Combination and December 31, 2022, the Company had limited resources and did not have the necessary business processes and related internal controls formally designed and implemented coupled with the appropriate resources with the appropriate level of experience and technical expertise to oversee our closing and financial reporting processes.
−Removed: This material weakness continued to exist as of December 31, 2023 because the necessary controls to remediate the material weaknesses have only been partially implemented and have not yet been sufficiently tested.
−Removed: The material weaknesses will not be considered remediated until such time as management designs and implements effective controls that operate for a sufficient period of time and concludes through testing, that these controls are effective.
−Removed: Our management will continue to monitor the effectiveness of our remediation plan and will make the changes it determines to be appropriate.
−Removed: Although we intend to complete this remediation process as quickly as practicable, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating the material weaknesses.
−Removed: Furthermore, we cannot ensure that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate in a timely manner or at all the control deficiencies that led to our material weaknesses in our internal controls over financial reporting or that they will prevent or avoid potential future material weaknesses due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls.
−Removed: In addition, even if we are successful in strengthening our controls and procedures, in the future these controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.
−Removed: Any failure to remediate the material weaknesses or otherwise develop or maintain effective controls or any difficulties encountered in their implementation or improvement could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in additional material misstatements of our annual or interim financial statements.
+Added: In the past we identified material weaknesses in our internal control over financial reporting, leading to a restatement of our financial statements for prior periods.
+Added: These material weaknesses were subsequently remediated following implementation and testing of a series of new controls and procedures.
+Added: We cannot ensure that the measures we have taken to date, and actions we may take in the future, will prevent or avoid potential future material weaknesses due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls.
+Added: In addition, in the future our controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.
+Added: Any failure to maintain effective controls could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in additional material misstatements of our annual or interim financial statements.
In such a case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to the listing requirements of the Nasdaq.
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As a result, our ability to obtain any additional financing, or additional financing on favorable terms, could be materially and adversely affected, which in turn, could materially and adversely affect our business, financial condition and the market value of our common stock and require us to incur additional costs to improve our internal control systems and procedures.
−Removed: In addition, perceptions of the Company among customers, suppliers, lenders, investors, securities analysts and others could also be adversely affected.
+Added: In addition, the perceptions of the Company among customers, suppliers, lenders, investors, securities analysts and others could also be adversely affected.
Our facilities or operations could be damaged or adversely affected as a result of prolonged power outages, natural disasters and other catastrophic events.
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Because our success depends, in part, on our ability to expand sales internationally, our business will be susceptible to risks associated with international operations.
−Removed: We currently maintain offices and have sales personnel in the United States, the United Kingdom, Australia and Canada.
+Added: We currently maintain offices and have personnel in the United States, the United Kingdom, Australia and Canada.
In the years ended December 31, 2024 and December 31, 2023, our non-U.S.
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These developments further complicate compliance efforts, and increase legal risk and compliance costs for us, and the third parties upon whom we rely.
+Added: Our employees and personnel use generative artificial intelligence (“AI”) technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various privacy laws and other privacy obligations.
+Added: Additionally, several states and localities have enacted measures related to the use of AI and machine learning in products and services.
+Added: These developments may further complicate compliance efforts, and may increase legal risk and compliance costs for us, the third parties upon whom we rely, and our customers.
Outside of the United States, foreign governments are raising similar privacy and data security concerns.
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government entities subject us to risks including early termination, audits, investigations, sanctions and penalties.
−Removed: We have several contracts with various government entities, including contracts with NASA, the Defense Advanced Research Project Agency, and the Department of Energy, among others, and we may enter into additional contracts with U.S.
+Added: We have several contracts with various government entities, including contracts with the Defense Advanced Research Project Agency and the Department of Energy, among others, and we may enter into additional contracts with U.S.
government entities in the future, which subjects our business to statutes and regulations applicable to companies doing business with the government, including the Federal Acquisition Regulation.
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● specialized disclosure and accounting requirements unique to government contracts;
+Added: ● cybersecurity safeguards and assessments beyond what are typically required by commercial equivalents;
● financial and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the U.S.
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In addition, noncompliance with anti-corruption or anti-bribery laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties, injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage, and other collateral consequences.
−Removed: We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.
+Added: We are subject to government export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.
Our products and technologies are subject to U.S.
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Government embargoed or sanctioned countries, governments, persons and entities.
−Removed: In addition, certain products and technology may be subject to export licensing or approval requirements.
+Added: In addition, certain of our products and technology are subject to export licensing or approval requirements.
Exports of our products and technology must be made in compliance with export control and sanctions laws and regulations.
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Any decreased use of our products and technologies or limitation on our ability to export or sell our products and technologies would likely adversely affect our business, financial condition and results of operations.
+Added: Further, the operation of our products within a fully operational quantum system may depend on products and technologies supplied by third parties.
+Added: Changes in third party products or technologies or changes in applicable export or import laws and regulations may create delays in the introduction and sale of our products and technologies to customers or, in some cases, prevent sales of our products and technologies to certain countries, governments or persons altogether.
+Added: Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons or technologies targeted by such laws and regulations, could also result in decreased use of our products and technologies, or in our decreased ability to sell our products and technologies to existing or potential customers.
+Added: Any decreased use of our products and technologies or limitation on our ability to sell our products and technologies would likely adversely affect our business, financial condition and results of operations.
We expect to incur significant costs in complying with these regulations.
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We may be required to incur significant expense to comply with changes in, or remedy violations of, these laws and regulations.
−Removed: Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable.
+Added: Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on recoverable amounts.
Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our recovery.
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We may become subject to product liability claims, even those without merit, which could harm our business prospects, operating results, and financial condition.
−Removed: We may face inherent risk of exposure to claims in the event our quantum computers do not perform as expected or malfunction.
+Added: We may face an inherent risk of exposure to claims in the event our quantum computers do not perform as expected or malfunction.
A successful product liability claim against us could require us to pay a substantial monetary award.
−Removed: Moreover, a product liability claim could generate substantial negative publicity about our quantum computers and business and inhibit or prevent commercialization of other future quantum computers, which would have material adverse effects on our brand, business, prospects and operating results.
+Added: Moreover, a product liability claim could generate substantial negative publicity about our quantum computers and business and inhibit or prevent the commercialization of other future quantum computers, which would have material adverse effects on our brand, business, prospects and operating results.
Any insurance coverage might not be sufficient to cover all potential product liability claims.
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The intellectual property rights of others could bar us from licensing and exploiting any patents that issue from our pending applications, and the claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours.
−Removed: In addition, patents issued to us may be infringed upon or designed around by others and others may obtain patents that it needs to license or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating results.
+Added: In addition, patents issued to us may be infringed upon or designed around by others and others may obtain patents that require license or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating results.
We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards, or limit our ability to use certain key technologies in the future, all of which could harm our business.
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Risks related to an Investment in our Securities and other General Matters
−Removed: The market price of our Common Stock and Public Warrants has been and may continue to be volatile, which could cause the value of your investment to decline.
+Added: The market price of our Common Stock and Public Warrants has been and may continue to be volatile.
The price of our Common Stock and Public Warrants has been and may continue to be volatile and has and may fluctuate or decline significantly in response to numerous factors, some of which are beyond our control.
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Further, as a result of this volatility it may be difficult for us to attract new investments, including additional offerings of our securities, on terms we consider reasonable, or at all.
−Removed: In the twelve-month period ended December 31, 2023, the market price of our Common Stock varied between a high of $3.25 on August 1, 2023 and a low of $0.375 on May 3, 2023 and the market price of our Public Warrants varied between a high of $0.53 on August 2, 2023 and a low of $0.05 on April 27, 2023.
+Added: In the twelve-month period ended December 31, 2024, the market price of our Common Stock varied between a high of $19.35 on December 27, 2024 and a low of $0.66 on September 9, 2024 and the market price of our Public Warrants varied between a high of $8.60 on December 27, 2024 and a low of $0.06 on September 23, 2024.
Market volatility, as well as general economic, market or political conditions, could reduce the market price of shares of our Common Stock or Public Warrants regardless of our operating performance.
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● variations in our operating performance and the performance of our competitors in general;
−Removed: ● material and adverse impact of the ongoing military conflict between Russia and Ukraine and sanctions related thereto and the state of war between Israel and Hamas and the potential for larger regional conflict and the broader global economy;
+Added: ● material and adverse impact of military conflicts and wars around the world;
● actual or anticipated fluctuations in our quarterly or annual operating results;
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If we are involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
+Added: The volatility in our stock price can also affect the listing of our Common Stock on the Nasdaq Capital Market.
+Added: To maintain such listing, we are required to meet certain listing requirements, including a minimum closing bid price of $1.00 per share.
+Added: In September 2024, we received a letter from the Listing Qualifications Department of the Nasdaq Stock Market, LLC, indicating that, based on the closing bid price for the previous 30 days, the listing of our Common Stock was not in compliance with Nasdaq Listing Rule 5550(a)(2) to maintain a minimum bid price of $1.00 per share.
+Added: While we regained compliance in November 2024, there can be no assurance that we will be able to maintain compliance with the Nasdaq Capital Market continued listing requirements in the future or regain compliance with respect to any future deficiencies.
+Added: This could impair the liquidity and market price of our common stock.
+Added: In addition, the delisting of our common stock from a national exchange would have a material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the price of our common stock because of that delisting would adversely affect our ability to raise capital on terms acceptable to us, or at all.
+Added: The filing of this Annual Report on Form 10-K will render us a “well-known seasoned issuer” as defined in Rule 405 of the Securities Act because our non-affiliated common stock public float was above $700.0 million as of the relevant determination date.
+Added: We are therefore currently able to take advantage of the benefits associated with being a well-known seasoned issuer, such as filing a new shelf registration statement on Form S-3ASR that would be automatically effective upon filing (a “Form S-3ASR”).
+Added: If at a specific measurement time in the future, our public float is below $700.0 million, we may no longer qualify as a well-known seasoned issuer and suffer negative consequences.
+Added: If we do not qualify as a well-known seasoned issuer, we will not be able to file automatic shelf registration statements on Form S-3ASR and enjoy the benefits associated with such registration statements, such as automatic effectiveness immediately upon filing, permitting companies to omit more information from the base prospectus than permitted for other shelf registration statements, allowing companies to register unspecified amounts of securities and doing so without allocating among securities or between primary and secondary offerings, and permitting companies to pay filing fees on a “pay-as-you-go” basis at the time of each takedown from the shelf registration statement.
+Added: We would also need to convert any Form S-3ASR to a non-automatic shelf registration statement.
+Added: Not qualifying as a well-known seasoned issuer could also impact the views or perceptions of investors and analysts and may influence investors’ willingness to purchase or hold our securities or analysts’ recommendations regarding our securities.
We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act, which could result in sanctions or other penalties that would adversely impact our business.
As a public company, and particularly after we are no longer an “emerging growth company,” we have and will continue to incur significant legal, accounting, and other expenses that we did not incur as a private company, including costs resulting from public company reporting obligations under the Securities Act or the Exchange Act, and regulations regarding corporate governance practices.
−Removed: The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of the Nasdaq, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
−Removed: We hired, and plan to hire in the future, additional accounting, finance, and other personnel in connection with our becoming, and our efforts to comply with the requirements of being, a public company, and our management and other personnel devote a substantial amount of time towards maintaining compliance with these requirements.
+Added: The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of the Nasdaq, and other applicable securities rules and regulations that impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
+Added: We have hired additional accounting, finance, and other personnel in connection with our efforts to comply with the requirements of being a public company and our management and other personnel devote a substantial amount of time towards maintaining compliance with these requirements.
These requirements have increased our legal and financial compliance costs and made some activities more time-consuming and costly.
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Pursuant to Sarbanes-Oxley Act Section 404, we are required to furnish a report by our management on our internal control over financial reporting in our Annual Reports on Form 10-K with the SEC.
−Removed: In order to achieve effective internal controls to support growth and public company requirements, we will need additional financial personnel, systems and resources.
However, while we remain an emerging growth company, we are not required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
−Removed: To achieve compliance with Sarbanes-Oxley Act Section 404, we have engaged in a process to enhance our documentation and evaluate our internal control over financial reporting, which was both costly and challenging.
−Removed: Despite our efforts, we have not been able to conclude, and there is a risk that we will not be able to conclude in the future, that our internal control over financial reporting is effective as required by Sarbanes-Oxley Act Section 404.
−Removed: We have identified material weaknesses with respect to our internal control over financial reporting.
−Removed: In this regard, we will need to continue to dedicate internal and external resources, continue steps to improve control processes as appropriate, and validate through testing that controls are functioning as documented.
−Removed: See We have identified material weaknesses in our internal control over financial reporting related to the lack of effective review controls over the accounting for complex financial instruments and to the design and operation of our overall closing and financial reporting processes, and we may identify additional material weaknesses in the future.
−Removed: The material weakness over accounting for complex financial instruments has resulted in errors in financial statements for prior periods.
−Removed: If we fail to remediate such material weaknesses, if we identify additional material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, it may adversely affect our ability to accurately and timely report our financial results in the future, and may adversely affect investor confidence, our reputation, our ability to raise additional capital and our business operations and financial condition .
+Added: To achieve compliance with Sarbanes-Oxley Act Section 404, we engaged in a process to enhance our internal control over financial reporting, which was both costly and challenging.
+Added: Despite our efforts, there is a risk that we will not be able to conclude in the future, that our internal control over financial reporting is effective as required by Sarbanes-Oxley Act Section 404.
+Added: See In the past we identified material weaknesses in our internal control over financial reporting, leading to a restatement of our financial statements for prior periods.
+Added: These material weaknesses were subsequently remediated following implementation and testing of a series of new controls and procedures.
+Added: If we identify additional material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, it may adversely affect our ability to accurately and timely report our financial results in the future, and may adversely affect investor confidence, our reputation, our ability to raise additional capital and our business operations and financial condition.
We have incurred and will continue to incur substantial costs as a result of operating as a public company, and our management will continue to devote substantial time to new compliance initiatives.
−Removed: In addition, key members of our management team have limited experience managing a public company.
As a public company, we incur substantial legal, accounting, and other expenses that we did not incur as a private company.
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In addition, as a public company, we may be subject to shareholder activism, which can lead to additional substantial costs, distract management and impact the manner in which we operate our business in ways we cannot currently anticipate.
−Removed: As a result of disclosure of information in this Annual Report on Form 10-K and in filings required of a public company, our business and financial condition are more visible, which may result in threatened or actual litigation, including by competitors.
−Removed: Certain members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.
−Removed: Our management team may not successfully or efficiently manage the transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
+Added: As a result of the disclosure of information in this Annual Report on Form 10-K and in filings required of a public company, our business and financial condition are more visible, which may result in threatened or actual litigation, including by competitors.
+Added: Our management team may not successfully or efficiently manage the significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
These obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of the business, which could adversely affect our business, financial condition, and results of operations.
−Removed: Concentration of ownership among our executive officers, directors and their respective affiliates may limit other stockholders’ ability to influence corporate matters and delay or prevent a third party from acquiring control over us.
−Removed: Our current executive officers and directors and their respective affiliates beneficially own, in the aggregate, approximately 16.3% of our outstanding Common Stock as of March 1, 2024.
−Removed: This significant concentration of ownership may have a negative impact on the trading price for our Common Stock because investors often perceive disadvantages in owning stock in companies where there is a concentration of ownership in a small number of stockholders.
−Removed: In addition, these stockholders will be able to exercise influence over all matters requiring stockholder approval, including the election of directors and approval of corporate transactions, such as a merger or other sale of us or our assets.
−Removed: This concentration of ownership could limit other stockholders’ ability to influence corporate matters and may have the effect of delaying or preventing a change in control, including a merger, consolidation or other business combination, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change in control would benefit the other stockholders.
We do not intend to pay cash dividends for the foreseeable future.
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Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.
−Removed: Our quarterly operating results have and may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.
+Added: Our quarterly operating results have and may fluctuate significantly and could fall below the expectations of securities analysts and investors due to many factors, some of which are beyond our control, resulting in a decline in our stock price.
Our quarterly operating results have and may fluctuate significantly because of several factors, including:
4 unchanged sentences
● macroeconomic conditions, both nationally and locally;
−Removed: ● negative publicity relating to products we serve;
+Added: ● negative publicity relating to our products;
● changes in consumer preferences and competitive conditions;
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Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline.
−Removed: If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline.
+Added: If one or more of these analysts fails to publish reports on us regularly, our share price or trading volume could decline.
If analysts cease coverage of us, the market price and volume for our securities could be adversely affected.
−Removed: There can be no assurance that we will maintain compliance with the continued listing standards of Nasdaq.
−Removed: If we fail to maintain compliance with the listing requirements of the Nasdaq Capital Market or fail to cure any future deficiencies, we may be delisted and the price of our common stock and our ability to access the capital markets would be negatively impacted.
−Removed: Our common stock is currently listed for quotation on the Nasdaq Capital Market.
−Removed: To maintain the listing of our common stock on the Nasdaq Capital Market, we are required to meet certain listing requirements, including, among others:
−Removed: ● a minimum closing bid price of $1.00 per share, and
−Removed: ● a market value of publicly held shares (excluding shares held by our officers, directors and 10% or more stockholders) of at least $1.0 million.
−Removed: In addition to the above requirements, we must meet at least one of the following requirements:
−Removed: ● stockholders’ equity of at least $2.5 million;
−Removed: ● a market value of listed securities of at least $35 million;
−Removed: ● net income from continuing operations of $500,000.
−Removed: In January 2023 we received a letter from the Listing Qualifications Department of the Nasdaq Stock Market, LLC, indicating that, based on the closing bid price for the previous 30 days, the listing of our Common Stock was not in compliance with Nasdaq Listing Rule 5550(a)(2) to maintain a minimum bid price of $1.00 per share.
−Removed: While we regained compliance in July 2023, there can be no assurance that we will be able to maintain compliance with the Nasdaq Capital Market continued listing requirements in the future or regain compliance with respect to any future deficiencies.
−Removed: This could impair the liquidity and market price of our common stock.
−Removed: In addition, the delisting of our common stock from a national exchange would have a material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the price of our common stock because of that delisting would adversely affect our ability to raise capital on terms acceptable to us, or at all.
−Removed: “Penny stock” rules may make buying or selling our securities difficult which may make our stock less liquid and make it harder for investors to buy and sell our securities.
−Removed: Trading in our securities is subject to the SEC’s “penny stock” rules and it is anticipated that trading in our securities will continue to be subject to the penny stock rules for the foreseeable future.
−Removed: The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions.
−Removed: These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction.
−Removed: Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market.
−Removed: In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer.
−Removed: The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities.
Sales of our securities, or the perception of such sales, by us or holders of our securities in the public market or otherwise could cause the market price for our securities to decline, and even in such case, certain holders of our securities may still have an incentive to sell our securities.
The sale of our securities in the public market or otherwise, or the perception that such sales could occur, could harm the prevailing market price of shares of our securities.
−Removed: These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell securities in the future at a time and at a price that it deems appropriate.
+Added: These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell securities in the future at a time and price which we deem appropriate.
Resales of our securities may cause the market price of our securities to drop significantly, even if our business is doing well.
−Removed: The market price of our Common Stock could decline if holders of our shares sell them, including pursuant to the resale registration statements, or are perceived by the market as intending to sell them.
+Added: The market price of our Common Stock could decline if holders of our shares sell them, including pursuant to resale registration statements, or are perceived by the market as intending to sell them.
As such, sales of a substantial number of shares of our Common Stock in the public market could occur at any time.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Stock.
−Removed: Pursuant to registration rights we have with certain holders of our securities, we filed a resale shelf registration statement covering the resale of up to an aggregate of 96,941,181 shares of our Common Stock.
−Removed: We also filed a resale registration statement covering the resale of 500,000 shares of our Common Stock that were issued upon exercise of the Ampere Warrant.
−Removed: As of March 1, 2024, the number of shares of our Common Stock that have been registered for resale by these holders represented approximately 54.6% of our shares outstanding (after giving effect to the issuance of shares upon exercise of outstanding Public Warrants, Private Warrants, the exercise or settlement of outstanding warrants, options or restricted stock units of Legacy Rigetti assumed in the Business Combination and the 500,000 Ampere Shares).
−Removed: In addition, on August 11, 2022, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with B.
−Removed: Riley Principal Capital II, LLC (“B.
−Removed: Pursuant to the Purchase Agreement, subject to the satisfaction of the conditions set forth in the Purchase Agreement, we had the right to sell shares of our common stock in an aggregate amount up to the lesser of (i) $75.0 million and (ii) an amount not to exceed 23,648,889 shares of our common stock, subject to certain limitations and conditions.
−Removed: As of February 15, 2024, we had sold the maximum 23,648,889 shares allowed under the Purchase Agreement (inclusive of 171,008 shares issued to B.
−Removed: Riley in 2022 as consideration for the Purchase Agreement) and received net proceeds of $33.4 million.
−Removed: Accordingly, there are no shares remaining to be sold under the Purchase Agreement;
−Removed: the agreement has terminated.
−Removed: We filed a registration statement to register the resale of shares of common stock sold pursuant to the Purchase Agreement.
−Removed: Given this substantial number of shares available for resale, the sale of shares by such holders, or the perception in the market that holders of a large number of shares intend to sell shares, could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock.
−Removed: Even if our trading price is significantly below $10.00, the offering price for the units offered in Supernova’s IPO, certain holders of our securities may still have an incentive to sell shares of our common stock because they purchased the shares at prices lower than the public investors or the current trading price of our common stock.
−Removed: In addition, B.
−Removed: Riley may resell all, some, or none of the shares purchased from us under our prior Purchase Agreement with B.
−Removed: Riley at any time or from time to time in its discretion.
Future issuances of our securities may adversely affect us, including the price of our securities and may be dilutive to existing securities holders.
−Removed: We expect that significant additional capital will be needed in the near future to continue our planned operations.
In the future, we may incur debt or issue equity ranking senior to our Common Stock.
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● may adversely affect prevailing market prices for our securities.
−Removed: Furthermore, we currently have on file with the SEC an effective shelf registration statement on Form S-3, which allows us to offer and sell up to an aggregate amount of $250.0 million of any combination of common stock, common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon exercise of warrants from time to time, which may be dilutive to existing securities holders and could cause the price of our securities to decline.
+Added: Furthermore, we currently have on file with the SEC an effective shelf registration statement on Form S-3 with a remaining available balance as of March 1, 2025 of $50 million (original balance of $250 million), which allows us to offer and sell any combination of common stock, common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon exercise of warrants from time to time (the “Form S-3”).
+Added: Upon filing this Annual Report on Form 10-K, we now qualify as a “well-known seasoned issuer” as defined in Rule 405 of the Securities Act.
+Added: For so long as we qualify as a “well-known seasoned issuer,” we may also issue an unspecified amount of shares of our common stock, preferred stock, debt securities and warrants pursuant to the Form S-3ASR.
+Added: Sales of such securities under the Form S-3 or Form S-3ASR may be dilutive to existing securities holders and could cause the price of our securities to decline.
We are currently an “emerging growth company” and “smaller reporting company” within the meaning of the Securities Act, and to the extent we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
2 unchanged sentences
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of June 30, in which case we would no longer be an emerging growth company as of the following fiscal year.
−Removed: We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
+Added: We do not know if investors find our securities less attractive because we rely on these exemptions.
If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
1 unchanged sentence
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
−Removed: We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private
−Removed: companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
+Added: We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
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● the ability of the Board to issue up to 10,000,000 shares of preferred stock, including “blank check” preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change of control;
−Removed: ● provide that the authorized number of directors may be changed only by resolution of the Board;
+Added: ● provide that the authorized number of directors may be changed only by the resolution of the Board;
● provide that, subject to the rights of the holders of any series of preferred stock, any individual director or directors may be removed only with cause by the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class;
6 unchanged sentences
The Certificate of Incorporation designates the Court of Chancery of the State of Delaware or the United States federal district courts as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, stockholders, employees or agents.
−Removed: The Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for state law claims for (i) any derivative action or proceeding brought on our behalf;
−Removed: (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee, or stockholder of Rigetti to Rigetti or our stockholders, (iii) any action or claim against the Company or any current or former director, officer or other employee or stockholder of the Company, arising out of or pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws, (iv) any action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws;
+Added: The Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for state law claims for:
+Added: (i) any derivative action or proceeding brought on our behalf;
+Added: (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee, or stockholder of Rigetti to Rigetti or our stockholders;
+Added: (iii) any action or claim against the Company or any current or former director, officer or other employee or stockholder of the Company, arising out of or pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws;
+Added: (iv) any action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws;
(v) any action or claim as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware;
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Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statements of operations.
−Removed: As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors which are outside of our control.
−Removed: Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our Warrants each reporting period and that the amount of such gains or losses could be material.
+Added: Our balance sheets as of December 31, 2024 and December 31, 2023 also include liabilities for Sponsor Vesting Shares, which are remeasured to fair value at each balance sheet date, with the resulting non-cash gain or loss related to the change in fair value being recognized in earnings in the consolidated statements of operations.
+Added: As a result of the recurring fair value measurements, our financial statements and results of operations may fluctuate quarterly, based on factors which are outside of our control.
+Added: Due to the recurring fair value measurements, we expect that we will recognize non-cash gains or losses on our Warrants and Sponsor Vesting Shares each reporting period and that the amount of such gains or losses could be material.
The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities.
8 unchanged sentences
● cause our stock price to decline.
−Removed: For example, in connection with the preparation of our Report on Form 10-Q for the quarterly period ended September 30, 2022, the audit committee of our board of directors, based on the recommendation of, and after consultation with, our management, and as discussed with our independent registered public accounting firm, concluded that our previously issued unaudited interim condensed consolidated financial statements for the quarters ended March 31, 2022 and June 30, 2022 could no longer be relied upon and require restatement in order to revise the volatility assumption in the valuation methodology with respect to Sponsor Vesting Shares, revise the fair value for our Private Warrants and correct an immaterial error related to the valuation of the warrant liability with respect to the warrants issued to Trinity Capital Inc., in addition to other matters.
Our warrants are exercisable for Common Stock, the exercise of which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
−Removed: As a result of the Business Combination being consummated, outstanding Warrants to purchase an aggregate of 13,074,972 shares of Common Stock became exercisable in accordance with the terms of the warrant agreement.
−Removed: These Warrants became exercisable on April 1, 2022.
−Removed: The exercise price of these Warrants is $11.50 per share, or approximately $150.4 million, assuming none of the Warrants are exercised through “cashless” exercise.
−Removed: To the extent such Warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders of Common Stock and increase the number of shares eligible for resale in the public market.
+Added: As of December 31, 2024, the following warrants were outstanding:
+Added: ● Public Warrants and Private Warrants to purchase an aggregate of 13,074,972 shares of Common Stock with an exercise price of $11.50 per share.
+Added: ● Series C Warrants (as defined herein) to purchase 793,800 shares of Common Stock with an exercise price of $0.01.
+Added: ● Other Warrants to purchase 2,715,755 shares of our common stock, including a Customer Warrant (as defined herein) to purchase an aggregate of 2,680,607 shares of Class A Common Stock with an exercise price of $1.152 per share.
+Added: To the extent the aforementioned warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders of Common Stock and increase the number of shares eligible for resale in the public market.
We believe the likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock.
1 unchanged sentence
On March 5, 2025, the last reported sales price of our Common Stock was $8.18 per share.
−Removed: Sales of substantial numbers of such shares in the public market or the fact that such Warrants may be exercised could adversely affect the market price of Common Stock.
−Removed: However, there is no guarantee that the Public Warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.
+Added: Sales of substantial shares in the public market or the fact that warrants may be exercised could adversely affect the market price of our Common Stock.
+Added: There is no guarantee that the Public Warrants or Private Warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.
See “ The warrants may never be in the money, and they may expire worthless and the terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment .”
−Removed: The Warrants may never be in the money, and they may expire worthless and the terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment.
−Removed: The exercise price for our Warrants is $11.50 per share of Common Stock.
−Removed: We believe the likelihood that warrant holders will exercise their Public Warrants and Private Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock.
−Removed: If the trading price for our Common Stock is less than $11.50 per share, we believe warrant holders will be unlikely to exercise their Warrants.
−Removed: There is no guarantee that the warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless.
−Removed: Our Warrants became exercisable on April 1, 2022.
+Added: The terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment.
The warrants were issued in registered form under a warrant agreement (the “warrant agreement”) between American Stock Transfer & Trust Company, as warrant agent, and Supernova.
−Removed: The warrant agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or correct any mistake, but requires the approval by the holders of at least 50% of the then-outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
+Added: The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or correct any mistake but requires the approval by the holders of at least 50% of the then-outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of the Public Warrants.
Accordingly, we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding Public Warrants approve of such amendment and, solely with respect to any amendment to the terms of the Private Warrants or any provision of the warrant agreement with respect to the Private Warrants, 50% of the number of the then outstanding Private Warrants.
−Removed: Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of the then-outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, convert the Warrants into cash, shorten the exercise period or decrease the number of shares of Common Stock purchasable upon exercise of a Warrant.
−Removed: We may redeem your unexpired Warrants prior to their exercise at a time that is disadvantageous to the holder, thereby making such Warrants worthless.
−Removed: We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the Common Stock equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders.
−Removed: If and when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: Redemption of the outstanding Warrants could force you to:
−Removed: (i) exercise your Warrants and pay the exercise price therefore at a time when it may be disadvantageous for you to do so;
−Removed: (ii) sell your Warrants at the then-current market price when you might otherwise wish to hold your Warrants;
−Removed: or (iii) accept the nominal redemption price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of your Warrants.
−Removed: In addition, we may redeem your Warrants at any time after they become exercisable and prior to their expiration at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their Warrants prior to redemption for a number of shares of Common Stock determined based on the redemption date and the fair market value of our Common Stock.
−Removed: The value received upon exercise of the Warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the Warrants, including because the number of shares of Common Stock received is capped at 0.361 per share of Common Stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
−Removed: None of the Private Warrants will be redeemable by us, subject to certain circumstances, so long as they are held by Supernova Partners II LLC (“Supernova Sponsor”) or its permitted transferees.
+Added: Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of the then-outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Public Warrants, convert the Public Warrants into cash, shorten the exercise period or decrease the number of shares of Common Stock purchasable upon exercise of a Public Warrant.
+Added: We may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to the holder, thereby making such Public Warrants worthless.
+Added: When the price per share of our Common Stock equals or exceeds $18.00, we may redeem the outstanding warrants in whole and not in part, at a price of $0.01 per warrant as follows:
+Added: ● upon a minimum of 30 days’ prior written notice of redemption to each warrant holder;
+Added: ● if, and only if, the closing price of the shares of our Common Stock equals or exceeds $18.00 per share on the trading day prior to the date on which we send the notice of redemption to the warrant holders.
+Added: If the foregoing conditions are satisfied, we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date.
+Added: Any such exercise would not be done on a “cashless” basis and would require the exercising warrant holder to pay the exercise price in cash for each warrant being exercised.
+Added: The price of the shares of our Common Stock may fall below the $18.00 redemption trigger price as well as the $11.50 warrant exercise price after the redemption notice is issued.
+Added: If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
+Added: Redemption of the outstanding Public Warrants could force you to:
+Added: (i) exercise your Public Warrants and pay the exercise price therefore at a time when it may be disadvantageous for you to do so;
+Added: (ii) sell your Public Warrants at the then-current market price when you might otherwise wish to hold your warrants;
+Added: or (iii) accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, is likely to be substantially less than the market value of your warrants.
+Added: When the price per share of our Common Stock equals or exceeds $10.00, we may redeem the outstanding warrants in whole and not in part, at a price of $0.10 per warrant as follows:
+Added: ● upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption as described below;
+Added: ● if, and only if, the closing price of our Common Stock equals or exceeds $10.00 per share on the trading day prior to the date on which we send the notice of redemption to the warrant holders.
+Added: Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis and could potentially receive up to a maximum of 0.361 shares of Common Stock per warrant or a minimum of 0.034 shares of Common Stock per warrant.
+Added: The number of shares of Common Stock that a warrant holder will ultimately receive upon a cashless exercise in connection with a redemption by us, is based on the fair market value of our Common Stock on the redemption date, determined based on the volume weighted average price of our Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of the warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, as set forth in a table in the warrant agreement.
+Added: The value received upon exercise of the Warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying shares price is higher and (2) may not compensate the holders for the value of the Warrants, including because the number of shares of Common Stock received is capped at 0.361 per share of Common Stock per warrant (subject to adjustment) irrespective of the remining life of the warrants.
+Added: None of the Private Warrants will be redeemable by us, subject to certain circumstances, so long as they are held by the Supernova Partners II LLC (“Supernova Sponsor”) or its permitted transferees.
The warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us.
11 unchanged sentences
Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
+Added: Information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to the Company and may not be reliable or accurate.
+Added: We have received, and may continue to receive, a high degree of media coverage that is published or otherwise disseminated by third parties, including blogs, articles, message boards and social and other media.
+Added: This includes coverage that is not attributable to statements made by our officers.
+Added: Information provided by third parties may not be reliable or accurate and could materially impact the trading price of our Common Stock which could cause stockholders to lose their investments.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.