RGTI 10-K & 10-Q changes, risk factors and insider trading

Our business was founded in 2013 and has operated quantum computers over the cloud since 2017. As a result of our limited operating history, our ability to accurately forecast the future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. 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. 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.testing) and 36-qubit quantum computer with a 99.6% two-qubit median gate fidelity (based on internal testing) which utilizes our modular chip architecture. We are still in the technology development phase. 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. We have in the past changed our technology roadmap, including the anticipated milestones and timing thereof, including in each of the years ended December 31, 2018, 20222022, 2023 and 2023.2025. We may further update theour technology roadmap in the future, including anticipated milestones and anticipated timeline for milestones. 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. 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 incurred net losses of $201.0$216.2 million and $75.1$201.0 million for the years ended December 31, 20242025, and December 31, 2023,2024, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $554.7$771.0 million. We believe that we will continue to incur operating and net losses each quarter until at least the time we begin generating significant revenue fromif ourwe narroware able to achieve quantum advantage or broad quantum advantage quantum computers,LFTQC, which may never occur. Even if our quantum computers were to achieve narrow quantum advantage or broad quantum advantage,LFTQC, we may never become profitable.

We may incur significantly higher losses in future periods as we, among other things,things: continue to incur significant expenses in connection with the design, development and manufacturing of our quantum computers; and as we expand our research and development activities; invest in manufacturing capabilities; build up inventories of components for our quantum computers; increase our sales and marketing activities; develop our infrastructure; and increase our general and administrative functions to support our growing operations and our being a public company.

Commercial traction of quantum computing technology may never occur. 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. We may not be able to cost effectively manage production at a scale or quality consistent with customer demand in a timely or economiccost-effective manner.

Our ability to scale is dependent also upon components we must source from multiple industries including: from the electronics and semi-conductor industries with low-noise microwave components, CPUs, GPUs, FPGAs; from the cryogenic industry with dilution refrigerators and associated helium gas products; and from the semiconductor industry with silicon wafers and other specialty materials, tooling and measurement equipment. Shortages or supply interruptions in any of these components will have an adverse impact on our ability to deliver revenues.business.

Our growth is dependent upon our ability to successfully market and sell quantum computers,computers and quantum computing services and solutions, expand our solutions and services, retain customers, bring in new customers and retain critical talent. We do not have experience with the large-scale production and sale of quantum computing technology. Our growth and long-term success will depend upon the development of our sales and retention capabilities. 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.

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. If we experience delays in adding such support capacity or servicing our customers efficiently or experiencingexperience 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. Failure to adequately support and service our customers may inhibit our growth and ability to expand.

We may not manage growth effectively, including with respect to our employee base,base and managing our operations successfully.

Our failure to manage growth effectively could harm our business, results of operations and financial condition. We anticipate that a period of significant expansion will be required to address potential growth. This expansion will place a significant strain on our management, operational and financial resources. For example, expansion of and upgrades to our Fab 1Fab-1 facility is continual and ongoing, and we may not complete the expansion and upgrades on terms originally anticipated, in a timely manner or at all, or we may decide to construct a new fabrication facility, both of which could have a material impact on our business, financial condition or results of operations. Expansion and upgrades requireor construction of a new fabrication facility requires significant cash investments and management resources and there is no guarantee that they will generate additional sales of our products or services, or that we will be able to avoid cost overruns or be able to hire additional personnel to support us. In addition, we also need to ensure our compliance with regulatory requirements in various jurisdictions applicable to the sale, installation and servicing of our products.

To manage the growth of our operations and personnel, we must establish,establish and maintain appropriate and scalable operational and financial systems,systems and procedures and controlscontrols, and establish and maintain a qualified finance, administrative and operations staff. 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.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), our federal net operating loss carryforwards, federal research and development tax credit carryforwards and other tax attributes are subject to annual limitations because of prior cumulative changes in our ownership and may be further limited in the future if additional ownership changes occur. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules apply under state tax laws. 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 1716 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.

Producing quantum computers is a difficult undertaking.undertaking, Thereand there are significant engineering challenges that we must overcome to build our quantum computers. We are still in the development stage and face significant challenges in completing development of our quantum computers and in producing quantum computers in sufficient volumes. 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.

The quantum computing industry is in its early stages and volatile and is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers.

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. 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. In addition, many countries are focused on developing quantum computing solutions either in the private or public sector and may subsidize quantum computers which may make it difficult for us to compete. Many of these competitors do not face the same challenges we do in growing our business. 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. Further, our competitors may win government contracts, and we may not.

Additionally, we must be able to achieve our objectives in a timely manner such that we don’tdo not 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. Because there are a large number of market participants, including certain sovereign nations, focused on developing quantum computing technology, we must dedicate significant resources to achieving any technical objectives on the timelines established by our management team. Any failure to achieve objectives in a timely manner could adversely affect our business, operating results and financial condition.

For all of these reasons, the development of the market for quantum computers and competition may have a negative impact on our ability to maintain and grow consumptiondemand offor 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 have historically generated most of our revenue from a limited number of customers. Revenue from U.S. government entities accounted for 54.2%48.0% and 74.2%54.2% of our total revenue for the years ended December 31, 2024,2025 and December 31, 2023,2024, respectively. 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. For further information regarding our customer concentration, refer to Note 1615 of our audited consolidated financial statements for the year ended December 31, 2024,2025, included elsewhere in this Annual Report on Form 10-K.

We derive a significant portion of our revenue from contracts with U.S. federal and foreign governments and government agencies, and we believe that the success and growth of our business will continue to depend on our successful procurement of government contracts. We have historically derived, and expect to continue to derive, a significant portion of our revenue from contracts with agencies of the U.S. federal and foreign governments, either directly by us or through other government contractors. For the yearyears ended December 31, 20242025, and 2023, respectively,2024, sales to government entities comprised 89.4%90.2% and 80.9%89.4% of our total revenue, respectively.

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 (“QCS”) and indirectly to end users through public cloud providers such as Amazon Braket (“AWS”) and Microsoft Azure Quantum (“Azure”), who integrate our QCS into their own quantum computing platforms. These public cloud partnersproviders operate a service in direct competition with our providing direct access to QCS. In addition, we intend to partner with additional partnersproviders to provide access to our QCaaS. Cloud computing partnerships could be terminated, or not scale as anticipated, or even at all.

There is risk that one or more of the public cloud providers, such as AWS and Azure, could use their respective control of their public clouds to control market pricing of the services, restrict access, embed innovations or privileged interoperating capabilities in competing products, bundle competing products and leverage their public cloud customer relationships to exclude us from opportunities. Further, theythese public cloud providers have the resources to acquire or partner with existing and emerging providers of competing technology and thereby accelerate adoption of those competing technologies.technologies, Allall of the foregoingwhich could make it difficult or impossible for us to provide products and services that compete favorably with those of the public cloud providers.

Any material change in our contractual and other business relationships with our 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.

Currently, our customer agreement with AWS remains in effect until (i) terminated for convenience, which we may do for any reason by providing AWS notice and closing our account and which AWS may do for any reason by providing us at least 30 days’ notice or (ii) terminated for cause, which either party may do if the other party has an uncured material breach and which AWS may do immediately upon notice. Although alternative data center providers could host our business on a substantially similar basis to AWS, transitioning the cloud infrastructure currently hosted by AWS to alternative providers could potentially be disruptive, and we could incur significant one-time costs. If we are unable to renew our agreement with AWS on commercially acceptable terms, our agreement with AWS is prematurely terminated, or it adds additional infrastructure providers, we may experience costs or downtime in connection with the transfer to, or the addition of, new data center providers. If AWS or other infrastructure providers increase the costs of their services, our business, financial condition, or results of operations could be materially and adversely affected.

With the goal of unlocking this opportunity, we have developed the world’s first multi-chip quantum processor for scalable quantum computing systems. We believe that this patented and patent pending, modular chip architecture is the building block for new generations of quantum processors that we expect to achieve a clear advantage over classical computers. Our long-term business model centers on revenue generated from sales of quantum processing units (“QPUs”) and quantum computing systems madeand accessibleproviding access to quantum computing systems via the cloud in the form of Quantum Computing as a Service (“QCaaS’) products.. However, the substantial majority of our current revenues are derived from development contracts, and we anticipate this market opportunity will continue to represent an important source of revenue for at least the next several years as we work to ramp up sales of QPUsQPUs, quantum computing systems and our QCaaS business.QCaaS. Additionally, we are working to further develop a revenue stream and forging important customer relationships by entering into technology development contracts with various partners.

We are a vertically integrated company. We operate Fab-1, a wafer fabrication facility dedicated to prototyping and producing our quantum processors. Through Fab-1, we own the means of production of our breakthrough multi-chip quantum processor technology. We leverage our chips through a full-stack product development approach, from quantum chip design and manufacturing through cloud delivery. We believe this full-stack development approach offers both the fastest and lowest risk path to building commercially valuable quantum computers. We have been generating revenue since 2018 through partnerships with government agencies and commercial organizations; however, we have not yet generated profits. We have incurred significant operating losses since inception. Our net losses were $216.2 million and $201.0 million for the years ended December 31, 2025 and December 31, 2024, respectively. We expect to continue to incur additional losses for the foreseeable future as we invest in research and development and infrastructure in line with our long-term business strategy. As of December 31, 2025, we had an accumulated deficit of $771.0 million.

WeBased have been generating revenue since 2018 through partnerships with government agencies and commercial organizations; however, we have not yet generated profits. We have incurred significant operating losses since inception. Our net losses were $201.0 million and $75.1 million for the years ended December 31, 2024 and December 31, 2023, respectively. We expect to continue to incur additional losses for the foreseeable future as we invest in research and development and infrastructure in line withon our long-term business strategy. As of December 31, 2024,forecasts, we had an accumulated deficit of $554.7 million. We believe that our existing cash, cash equivalents and marketable securities shouldwill be sufficient to meet our anticipated operating cash needs for at least the next threetwelve years and possibly longermonths 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 financing or other sources, such as strategic collaborations or other transactions. In addition, we may seek additional capital even if we believe that we have sufficient funds for current or future operating plans.

Key achievements includeIn the fourth quarter of 2024, we announced the public launch of our 84-qubit Ankaa-3 system, ourwhich newest flagship quantum computer featuringfeatured an extensive hardware redesign. We also achieved majora key two-qubit gate fidelity milestonesmilestone with Ankaa-3: successfully halving error rates in 2024 to achieve a 99.0% median two-qubit iSWAPgate fidelity based on our internal testing. For information on gate fidelity, assee well“—Our asTechnology—Our demonstratingSuperconducting aQuantum 99.5% median two-qubit fidelity with fSim gates.Processors—Fidelity.”

In February 2025, our wholly-owned subsidiary, Rigetti Sub,subsidiary entered into the Collaboration Agreement with Quanta, whereby the parties may enter into written statements of work from time to time pursuant to which Quanta will develop Covered Components listed in such statement of work that meet theour specifications and requirements provided by Rigetti Sub.requirements. “Covered Components” may include control systems, dilution refrigerators, flexible cables, and select other non-QPU components suitable for Rigetti Sub’sour quantum computing products. No statements of work were entered into by the parties in connection with the entry into the Collaboration Agreement. In addition, the parties have each 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 Subour product roadmap). InNo connectionequity withor joint venture was formed under the Collaboration Agreement and costs incurred by us under the Collaboration Agreement, onconsisting Februaryof 27,expenditures 2025,for weresearch enteredand intodevelopment aand Securitiesrelated Purchasecapital, Agreementwill be accounted for in accordance with Quanta,GAAP pursuantas 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 approximately $11.59, for an aggregate value of approximately $35.0 million. The closing of the private placement transaction is subject to regulatory clearance.incurred.

Results of our operations have varied and may continue to vary based on the impact of changes in the domestic or global economy. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, interest rates, financial and credit market fluctuations, supply chain constraints, international trade relationspolicies including tariffs and tariffs,export controls, national security interests, pandemics, political turmoil, government shutdowns, natural catastrophes, warfare, and terrorist attacks in the United States or elsewhere, could negatively affect our business, including progress toward the development of quantum computing.computing by increasing the cost of materials and components and our operating costs. It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. If these conditions persist and deepen, we could experience an inability to access additional capital if needed, or our liquidity could otherwise be impacted, and the trading price of our Common Stock could decline.

For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors,” including the risk factor titled “UnfavorableUnstable or unfavorable market and economic conditions in our industry and or the global economy couldhave limithad and may continue to have serious adverse consequences on our abilitybusiness, financial condition and share price. In the future, we may be required to growrecord significant charges for impairment of our businesslong-lived andassets, negativelyother affectassets ouror results of operations.investments.”

We generate revenue through our development contracts, as well as from our sales of QPUs, quantum computing systems and our QCaaS offerings and other services including training and provision of quantum computing components. Development contracts are generally multi-year, non-recurring arrangements pursuant to which we provide professional services regarding collaborative research in practical applications of quantum computing to technology and business problems within the customer’s industry or organization and assists the customer in developing quantum algorithms and applications to assist customers in areas of business interest.

Cost of revenue consists primarily of all direct and indirect costs associated with sales of QPUs, quantum computing systems, QCaaS offerings and development contracts and other services, including materials, employee costs for program management and personnel associated with the delivery of goods and services to customers, and sub-contract costs for work performed by third parties. Cost of revenue also includes an allocation of facility costs, depreciation and amortization directly related to the development contracts and QCaaS offerings and other services.

Selling, general and administrative expenses include compensation, employee benefits, stock-based compensation, insurance, facility costs, professional service fees, and other general overhead costs other than those associated with research and development or sales of QPUsQPUs, quantum computing systems and providing development contracts, QCaaS offerings and other services. We expect selling, general and administrative expenses to increase as we grow our business, particularly to the extent we achieveare narrowable to demonstrate the usefulness of quantum computers and broadachieve quantum advantage, and subsequently enhance our product and service offerings, expand our customer base, and implement new marketing strategies.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have recorded a full valuation allowance against our deferred tax assets.

Revenue decreased by $1.2$3.7 million for the year ended December 31, 2024,2025, when compared to the year ended December 31, 2023.2024. The decrease was primarilymainly due to a $2.0$1.4 million reduction in QCaaSrevenue from collaborative research and professional services contracts, and a $2.4 million reduction in revenue forfrom sales of collaborative research materials and quantum computers. During the year ended December 31, 2025, there were no Novera ™ sales. During the year ended December 31, 2024, offset in part by higher revenue from developmentNovera contractssales totaled $1.6 million. Our revenue has been negatively impacted by expiration of the National Quantum Initiative Act in September 2023 and salesits ofpending QPUs.reauthorization in the United States Congress.

Our development contracts are typicallytypically, time and materials, cost-share based or fixed price milestone or cost share-based contracts and the timing and amounts of revenue recognized in any given period will vary significantly based on the deliverywork of the associated milestonesperformed and/or thesatisfaction workof performed.performance obligations. The timing and delivery of sales of QPUsQPUs, quantum computing systems and QCaaS will also vary and impact revenue in any given quarterly or annual period. Revenue is expected to vary in terms of timing and size, resulting in significant fluctuations in revenue levels in future periods.

For the next few years, we expect much of our revenue to be generated from development contracts and anticipated sales of on-premises QPUs.QPUs and quantum computing systems.

Cost of revenue increased by $2.3 million for the year ended December 31, 2024, when compared to the year ended December 31, 2023. The increase inOur cost of revenue wasand primarilygross duemargins toare aimpacted change inby the composition of our revenue and variability in the pricing and terms of our sales and development contracts. During the year ended December 31, 2024,2025, we enteredrecognized intorevenue aand newcost contractof revenue from contracts to deliver a24-qubit 24-qubitand 36-qubit quantum computing systemsystems, havingwhich have higher costs and a lower gross margin profile than most of our other contracts. The increase in cost of revenue resulting from the unfavorable mix was partially offset by the impact of lower revenue.

We expect that cost of revenue and total gross profit as a percentage of revenue will vary in future quarterly and annual periods due to changes in the composition of our revenue and variability in the pricing and terms of our sales and development contracts.

Research and development expenses decreasedincreased by $3.0$11.6 million for the year ended December 31, 2024,2025, when compared to the year ended December 31, 2023.2024.

Selling, general and administrative expenses decreasedincreased by $3.3$0.9 million for the year ended December 31, 2024,2025, when compared to the year ended December 31, 2023.2024.

We expect to incur additional selling, general and administrative expenses to support the growth of our business. Further, we expect selling, general and administrative expenses to increase over the longer term, particularly after we potentially achieve quantum advantage, and plan to subsequently enhance our sales and service offerings, expand our customer base, and implement new marketing strategies.

AInterest discussionexpenses regardingdecreased by $3.2 million for the year ended December 31, 2025, when compared to the year ended December 31, 2024. The reduction in interest expense was due to the prepayment of our outstanding debt with Trinity Capital Inc. (“Trinity Capital”) in December 2024. A discussion regarding the debt prepayment is included in Note 87 to our consolidated financial statements for the year ended December 31, 2024,2025, included elsewhere in this Annual Report on Form 10-K.

Interest income remainedwas consistent$16.6 atmillion for the year ended December 31, 2025, compared to $5.1 million for each of the yearsyear ended December 31, 20242024. andThe December 31, 2023. Slight changesincrease in interest income during the yearsyear ended December 31, 20242025 and December 31, 2023 werewas due to fluctuationsan increase in the balances of our invested cash and available-for-sale investments resulting from our equity offerings during late 2024 and the year ended December 31, 2025. Fluctuations in the rates of interest earned on our investments.investments also had an impact on interest income during the year.

A discussion of the change in the fair value of the warrant liabilities is included in Note 98 to our consolidated financial statements for the year ended December 31, 2024,2025, included elsewhere in this Annual Report on Form 10-K.

The change in fair value of warrant liabilities for the year ended December 31, 20242025 was a loss of $90.2$150.6 million, compared to a loss of $1.2$90.2 million for the year ended December 31, 2023.2024. The increasechange in lossfair value for the year ended December 31, 2025 was primarily due to fluctuations in our stock price, while the change in fair value for the year ended December 31, 2024 was primarily due to the changefluctuations in our stock price and related share price volatility.

The change in fair value of our earn-out liabilities for the year ended December 31, 20242025 was a gain of $2.5 million, compared to a loss of $43.7 million, compared a loss of $0.9 million for the year ended December 31, 2023.2024. The increasechange in lossfair value for the year ended December 31, 2025 was primarily due to fluctuations in our stock price, while the change in fair value for the year ended December 31, 2024 was primarily due to the changefluctuations in our stock price and related share price volatility.

On December 9, 2024, we prepaid in full all amounts owed under our Amended Loan Agreement with Trinity Capital Inc. We prepaid an aggregate of $9.5 million in outstanding principal balance, final payment fees of $0.9 million, plus accrued interest and a prepayment premium aggregating $0.1 million. During the year ended December 31, 2024, the Companywe recorded a $0.4 million loss on the prepayment and extinguishment of the outstanding principal balance owed under the Amended Loan Agreement.

We have incurred net losses and negative cash flows from operations since inception. Historically, we have financed our operations primarily through the sale and issuance of commonCommon stockStock, preferred stock, warrants, convertible notes, debt and revenues. During the years ended December 31, 20242025 and December 31, 2023,2024, we incurred net losses of $201.0$216.2 million and $75.1$201.0 million, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $554.7$771.0 million, and we expect to incur additional losses for the foreseeable future.

We believe that our existing balances of cash, cash equivalents and available-for-sale investments shouldwill be sufficient to meet our anticipated operating cash needs for at least the next threetwelve yearsmonths based on our current business plan, and expectations and assumptions considering current macroeconomic conditions. Our operating plan may change because of factors currently unknown, including factors described herein, 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. In addition, we may seek additional capital even if we believe that we have sufficient funds for current or future operating plans. We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors including those described in the section titled “Risk Factors” in this Annual Report on Form 10-K. If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or market corrections resulting from the impact of macroeconomic conditions could materially affect our business and the value of our securities.

We build quantum computers and the superconducting quantum processors that power them. We believe quantum computing represents one of the most transformative emerging capabilities in the world today. By leveraging quantum mechanics, we believe our quantum computers process information in fundamentally new, more powerful ways than classical computers. When scaled, it is anticipated that these systems will be poised to solve problems of staggering computational complexity at unprecedented speed. We are located and headquartered in Berkeley, California. We also operate in Fremont, California; London, United Kingdom; Adelaide, Australia; British Columbia, Canada; and Mumbai,Thane, India. Our revenue is derived primarily from operations in the United States and the United Kingdom.

We are a vertically integrated company. We operate Fab-1, a wafer fabrication facility dedicated to prototyping and producing our quantum processors. Through Fab-1, we own the means of production of our breakthrough multi-chip quantum processor technology. We leverage our chips through a full-stack product development approach, from quantum chip design and manufacturing through cloud delivery. We believe this full-stack development approach offers both the fastest and lowest risk path to building commercially valuable quantum computers. We have been generating revenue since 2018 through partnerships with government agencies and commercial organizations; however, we have not yet generated profits. We have incurred significant operating losses since inception. Our net loss was $216.2 million for the year ended December 31, 2025. We incurred an operatinga loss from operations of $54.0 million for the threesix months ended MarchJune 31,30, 2026. We expect to continue to incur additional losses for the foreseeable future as we invest in research, development, and infrastructure consistent with our long-term business strategy. As of MarchJune 31,30, 2026, we had an accumulated deficit of $737.8$790.5 million.

Selling, general and administrative expenses include compensation, employee benefits, stock-based compensation, insurance, facility costs, professional service fees, and other general overhead costs other than those associated with research and development or sales of QPUs, quantum computing systems and providing development contracts, QCaaS offerings and other services. We expect selling, general and administrative expenses to increase as we grow our business, particularly to the extent we are able to demonstrate the usefulness of quantum computers and achieve broad quantum advantage, and subsequently enhance our product and service offerings, expand our customer base, and implement new marketing strategies.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025

Revenue increased by $2.9$3.3 million and $6.3 million for the three and six months ended MarchJune 31,30, 2026, when compared to the three and six months ended MarchJune 31,30, 2025, respectively. The increaseincreases waswere mainly due to higher sales of 9-qubit Novera™ quantum computing systems and related products.

Cost of revenue increased by $2.0$1.7 million duringand $3.7 million for the three and six months ended MarchJune 31,30, 2026, when compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increaseincreases in cost of revenue waswere mainly due to the impact of higher revenue levels during thisthese period.periods.

Research and development expenses increased by $4.5$7.2 million duringand $11.7 million for the three and six months ended MarchJune 31,30, 2026, respectively, when compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively.

We anticipate that research and development expenditures will grow in the future as we continue to focus on our technology roadmap and goals of achieving quantum advantage and large-scale fault tolerant quantum computing. In the future, we may seek to significantly increase our capital expenditures, including to upgrade our current chip fabrication facility, purchase additional dilution refrigeration equipment, and possibly invest in a new quantum chip fabrication facility, which would require a significant amount of cash for capital expenditures and increase our depreciation expense in future years.

Other income (expenses), net

Interest income was $5.4$5.1 million and $10.4 for the three and six months ended June 30, 2026, respectively, compared to $3.0 million and $5.2 million for the three monthsand ended March 31, 2026, compared to $2.2 million for the threesix months ended MarchJune 31,30, 2025.2025, respectively. The increase in interest income during the three and six months ended MarchJune 31,30, 2026, when compared to the three and six months ended MarchJune 31,30, 2025, was due to an increase in the balances of our invested cash and available-for-sale investments resulting from an equity offering and the Quanta private placement investment during the second quarter of 20252025, and cash proceeds from warrant exercises in the fourth quarter of 2025. Fluctuations in the rates of interest earned on our investments also had an impact on interest income during these periods.

A discussion of the change in the fair value of the warrant liabilities is included in Note 6 “Warrants” to our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026, included elsewhere in this Quarterly Report on Form 10-Q.

The change in fair value of our warrant liabilities for the three and six months ended MarchJune 31,30, 2026 was a loss of $29.6 million and a gain of $53.7$24.1 million.million, respectively. The change in fair value of our warrant liabilities for the three and six months ended MarchJune 31,30, 20252025, was a loss of $20.6 million and a gain of $53.3$32.7 million.million, respectively. The change in fair value for the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 was primarily due to fluctuations in our stock price.

A discussion of the change in the fair value of the earn-out liabilities is included in Note 7 “Earn-out Liabilities” to our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026, included elsewhere in this Quarterly Report on Form 10-Q.

As of December 31, 2025 all of the earn-out liabilities were satisfied and the remaining liability balance was zero. The earn-out liabilities had no impact on our condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026, and we do not expect the earn-out liabilities to have any impact on the consolidated financial statements in future periods.

The change in fair value of our earn-out liabilities for the three and six months ended MarchJune 31,30, 2025 was a loss of $2.3 million and gain of $8.8$6.6 million.million, respectively. The gainchange in fair value for the three and six months ended MarchJune 31,30, 2025 was primarily due to the changefluctuations in our stock price and related share price volatility.price.

We have incurred a cumulative pre-tax loss for the past three years. We expect to continue to incur losses for income tax purposes for the foreseeable future and will continue to carry a full valuation allowance for our deferred tax assets. Accordingly, we did not record a provision for income taxes for either the three and six months ended MarchJune 31,30, 2026 or the three and six months ended MarchJune 31,30, 2025.

We have incurred net losses and negative cash flows since inception. Historically, we have financed our operations primarily through the sale and issuance of Common Stock, preferred stock, warrants, convertible notes, debt and revenues. During the year ended December 31, 2025, we incurred net a loss of $216.2 million. We incurred an operatinga loss from operations of $54.0 million for the threesix months ended MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had an accumulated deficit of $737.8$790.5 million, and we expect to incur additional losses for the foreseeable future.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2026 was $16.2$32.0 million, primarily resulting from our net incomeloss of $33.1$19.5 million, further reduced by non-cash income totaling $46.2$6.9 million. Changes in operating assets and liabilities had a $3.2$5.6 million negativeunfavorable impact on the net cash used in operating activities during the threesix months ended MarchJune 31,30, 2026.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2025 was $13.7$29.8 million, primarily resulting from our net income of $42.6$3.0 million, reduced by non-cash income totaling $57.1$30.5 million. Changes in operating assets and liabilities had a $0.9$2.3 million positiveunfavorable impact on the net cash used in operating activities during the threesix months ended MarchJune 31,30, 2025.

Cash used in operating activities increased by $2.5$2.2 million to $16.2$32.0 million during the threesix months ended MarchJune 31,30, 2026, from $13.7$29.8 million during the threesix months ended MarchJune 31,30, 2025. The $9.5$22.5 million decreaseincrease in our net incomeloss for the threesix months ended MarchJune 31,30, 2026, when compared to our net income for the threesix months ended MarchJune 31,30, 2025, was mostly due to highera operatingreduction expenses during the three months ended March 31, 2026 and higherin non-cash income during the threesix months ended MarchJune 31,30, 2025.2026. Non-cash income favorably impacting our net incomeloss decreased by $10.9$23.5 million to $53.7$6.9 million during the threesix months ended MarchJune 31,30, 2026, when compared to the threesix months ended MarchJune 31,30, 2025. Higher operating expenses, offset in part by an increase in total gross profit and interest income also negatively impacted our net loss. Operating assets and liabilities had a $2.3$3.3 million negativeunfavorable impact on the change in cash used in operating activities during the threesix months ended MarchJune 31,30, 2026, when compared to the threesix months ended MarchJune 31,30, 2025.

Cash Flows UsedProvided by (used in) Investing Activities

Cash provided by investing activities during the threesix months ended MarchJune 31,30, 2026 totaled $19.8$15.0 million, resulting from $125.0$221.0 million of maturities of available-for-sale securities, partially offset by $100.8$189.6 million of purchases of available-for-sale securities and $4.4$16.4 million of purchases of property and equipment.

Cash used in investing activities during the threesix months ended MarchJune 31,30, 2025 totaled $23.6$369.7 million, resulting from $44.1$438.5 million of purchases of available-for-sale securities and $2.5$8.2 million of purchases of property and equipment, partially offset by $23.0$77.0 million of maturities of available-for-sale securities.

Net cash provided by investing activities during the threesix months ended MarchJune 31,30, 2026 increased by $43.4$384.7 million, when compared to the threesix months ended MarchJune 31,30, 2025, primarily due to a reduction in purchases of available-for-sale securities and higher maturities of available-for-sale securities, offset in part by higher purchases of available-for-saleproperty securities.and equipment.

Cash provided by financing activities during the threesix months ended MarchJune 31,30, 2026 totaled less than $0.1$0.5 million, consisting of proceeds from the exercise of stock options and common stock warrants.

Cash provided by financing activities during the threesix months ended MarchJune 31,30, 2025 totaled $6.9$389.1 million. We received net proceeds of $346.7 million from the sale of 30,309,780 shares of common stock pursuant to our ATM offering that was completed in the six months ended June 30, 2025. We received proceeds of $35.0 million from the sale of 3,020,412 shares of common stock from the private placement transaction with Quanta. We received proceeds of $6.3 million from tax withholdings on sell-to-cover tax equity award transactions, proceeds of $0.3$1.4 million from the exercise of stock options and proceeds of $0.4$0.5 million from the exercise of warrants. We also paid $0.1$0.8 million for deferred offering costs.

Cash provided by financing activities decreased by $6.9$388.6 million during the threesix months ended MarchJune 31,30, 2026, when compared to the threesix months ended MarchJune 31,30, 2025. The decrease was primarily due to the receipt of $6.3 million oflower proceeds from taxthe withholdingssale onof sell-to-covercommon equitystock. award transactions duringDuring the threesix months ended MarchJune 31,30, 2025, we received significant net proceeds from the sale of shares of common stock pursuant to an ATM offering and lowerto Quanta. Lower proceeds from the exercise of stock options and common stock warrants and from tax withholdings on sell-to-cover tax equity award transactions during the threesix months ended MarchJune 31,30, 2026.2026, when compared to the six months ended June 30, 2025, also contributed to the decrease.

We have purchase commitments in the form of open purchase orders, primarily for property and equipment. As of MarchJune 31,30, 2026, the total of these purchase commitments was $25.8$35.0 million, of which approximately $23.2$21.0 million is related to property and equipment. These amounts are primarily short-term in nature and are expected to be satisfied within the next year. In certain circumstances, the amount of our purchase commitments may change based on the expected timing of order fulfillment from our suppliers. For information regarding our non-cancellable lease obligations, see the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ending December 31, 2025.2025, and Note 15 “Leases” to our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q. For information regarding the risks related to our manufacturing and supply chain and other risks, see the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as updated under Part II “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 of our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 included elsewhere in this Quarterly Report on Form 10-Q.

We will remain an EGC under the JOBS Act until the earliest of (a) December 31, 2026, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years. Under the current rules of the SEC, we were no longer eligible to take advantage of the scaled disclosures available to smaller reporting companies beginning with this Quarterly Report on Form 10-Q.