☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Delaware |
85-2992192 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
4505 Campus Drive College Park, 20740 |
20740 | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Stock, $0.0001 par value per share Warrants, each exercisable for one share of common stock for $11.50 per share |
IONQ WS |
New York Stock Exchange New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ |
Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Page |
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Item 1. |
1 |
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Item 1A. |
16 |
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Item 1B. |
50 |
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Item 2. |
50 |
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Item 3. |
50 |
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Item 4. |
50 |
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Item 5. |
51 |
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Item 6. |
51 |
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Item 7. |
52 |
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Item 7A. |
64 |
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Item 8. |
64 |
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Item 9. |
65 |
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Item 9A. |
65 |
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Item 9B. |
66 |
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Item 9C. |
66 |
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Item 10. |
67 |
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Item 11. |
72 |
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Item 12. |
78 |
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Item 13. |
81 |
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Item 14. |
86 |
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Item 15. |
88 |
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Item 16. |
91 |
• |
our financial and business performance, including financial projections and business metrics; |
• |
changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; |
• |
the implementation, market acceptance and success of our business model and growth strategy; |
• |
our expectations and forecasts with respect to market opportunity and market growth; |
• |
the ability of our products and services to meet customers’ compliance and regulatory needs; |
• |
our ability to attract and retain qualified employees and management; |
• |
our ability to adapt to changes in consumer preferences, perception and spending habits and develop and expand our product offerings and gain market acceptance of our products, including in new geographies; |
• |
our ability to develop and maintain our brand and reputation; |
• |
developments and projections relating to our competitors and industry; |
• |
our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; |
• |
the impact of health epidemics, including the COVID-19 pandemic, or geopolitical tensions, such as Russia’s recent incursion into Ukraine, on our business and the actions we may take in response thereto; |
• |
the impact of the COVID-19 pandemic on customer demands for cloud services; |
• |
expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”); |
• |
the volatility in the global economy and the credit and financials markets, including market disruptions and significant inflation and interest rate fluctuations; |
• |
our future capital requirements and sources and uses of cash; |
• |
our ability to obtain funding for our operations and future growth; and |
• |
our business, expansion plans and opportunities. |
Item 1. |
Business. |
• | Leveraging Our Technology |
• | Offering QCaaS |
• | Selling Direct Access to Quantum Computers |
• | Continuing to Enhance Our Proprietary Position |
• | Further Developing Our Quantum Computing Partner Ecosystem |
• | Noisy and intermediate-scale quantum (NISQ) computers |
• | Broad quantum advantage |
• | Full-scale fault tolerance |
• | Atoms |
• | Photons |
• | Spins in semiconductors |
• | Superconducting circuits |
• | Atomic qubits are nature’s qubits |
• | Trapped ion qubits are well-isolated from environmental influences |
• | Lower overhead for quantum error-correction |
• | Trapped ion quantum computers can run at room temperature -273.15° C, or -459.67° F) to minimize external interference and noise levels. Maintaining the correct temperature requires the use of large and expensive dilution refrigerators, which can hamper a system’s long-term scalability because the cooling space, and hence the system space, is limited. Trapped ion systems, on the other hand, can operate at room temperature. This is because the qubits themselves are not in thermal contact with the environment, as they are electromagnetically confined in free space inside a vacuum chamber. The laser-cooling of the qubits themselves is extremely efficient because the atomic ions have very little mass and this requires just a single low-power laser beam (microwatts). This allows us to minimize the system size as technology progresses, while scaling the compute power and simultaneously reducing costs. |
• | All-to-all in-between. In the trapped ion approach, however, qubits are connected by electrostatic repulsion rather than through physical wires. As a result, qubits in our existing systems can directly interact with any other qubit in the system. Our modular architecture benefits from this flexible connectivity, significantly reducing the complexity of implementing a given quantum circuit. |
• | Ion traps require no novel manufacturing capabilities |
quantum materials. They simply provide the conditions for the ion qubits to be trapped in space, and in their current state, they can be fabricated with existing conventional and standard silicon or other micro-fabrication technologies. By contrast, solid-state qubits, such as superconducting qubits or solid- state silicon spins, require exotic materials and fabrication processes that demand atomic perfection in the structures of the qubits and their surroundings; fabrication with this level of precision is an unsolved challenge. |
• | Complex laser systems component-by-component |
• | Ultra-high vacuum (UHV) technology |
• | Executing high fidelity gates with all-to-all |
• | Slow gate speeds |
• | During the development stage, our experts will assist customers in developing an algorithm to solve their business challenges. Customers may be expected to pay for quantum compute usage, in addition |
to an incremental amount for the consulting and development services provided in the creation of algorithms. We may choose to sell this computing time to customers in a variety of ways. In this stage, we expect revenue to be unevenly distributed, with individual customers potentially contributing to peaks in bookings. |
• | During the application stage, once an algorithm is fully developed for a market, we anticipate that customers would be charged to run the algorithm on our hardware. Given the mission critical nature of the use cases we anticipate quantum computing will attract, we believe a usage-based revenue model will result in a steady stream of revenue while providing the incremental ability to grow with customers as their algorithm complexity and inputs scale. |
• | Co-development of quantum applications with strategic partners.co-develop end-to-end co-development agreements with Hyundai Motor Company to pursue solutions for battery chemistry and with GE Research to apply quantum computing to risk management. |
• | Preferred compute agreements with clients |
• | Cloud access to quantum computing |
• | Dedicated hardware |
• | Delivery of a full-scale quantum compute platform in-house technical expertise in quantum computing capabilities at the time quantum advantage is achieved for the customer’s application, our preferred compute agreements, cloud offerings, and dedicated hardware sales are expected to offer sufficient quantum computational capacity. |
• | Packaged solution offerings in-house quantum expertise. |
• | Accelerated high-impact applications development |
Item 1A. |
Risk Factors. |
• | We are an early-stage company and have a limited operating history, which makes it difficult to forecast our future results of operations. |
• | We have a history of operating losses and expect to incur significant expenses and continuing losses for the foreseeable future. |
• | 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. |
• | Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate. |
• | Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all. |
• | Our management has limited experience in operating a public company. |
• | We have identified a material weakness in our internal control over financial reporting. If we are unable to remediate this material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting, this may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations or cause our access to the capital markets to be impaired. |
• | We may need additional capital 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. |
• | We have not produced a scalable quantum computer and face significant barriers in our attempts to produce quantum computers. If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail. |
• | Our 32-qubit system, which is an important milestone for our technical roadmap and commercialization, is not yet available for customers and may never be available. |
• | The quantum computing industry 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. |
• | Our business is currently dependent upon our relationship with our cloud providers. There are no assurances that we will be able to commercialize quantum computers from our relationships with cloud providers. |
• | 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. |
• | We may be unable to reduce the cost per qubit, which may prevent us from pricing our quantum systems competitively. |
• | 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. |
• | If our computers fail to achieve a broad quantum advantage, our business, financial condition and future prospects may be harmed. |
• | We could suffer 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. |
• | We may face unknown supply chain issues that could delay the introduction of our product and negatively impact our business and operating results. |
• | 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. |
• | Our products may not achieve market success, but will still require significant costs to develop. |
• | We are highly dependent on our co-founders, and our ability to attract and retain senior management and other key employees, such as quantum physicists and other key technical employees, is critical to our success. 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. |
• | Our future growth and success depend on our ability to sell effectively to large customers. |
• | We may not be able to accurately estimate the future supply and demand for our quantum computers, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays. |
• | Our systems depend on the use of a particular isotope of an atomic element that provides qubits for our ion trap technology. If we are unable to procure these isotopically enriched atomic samples, 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. |
• | If our quantum computing systems are not compatible with some or all industry-standard software and hardware in the future, our business could be harmed. |
• | If we are unable to maintain our current strategic partnerships or we are unable to develop future collaborate partnerships, our future growth and development could be negatively impacted. |
• | Our business depends on our customer’s abilities to find useful quantum algorithms and sufficient quantum resources for their business. If they are unable to do so due to the nature of their algorithmic challenge or other technical or personnel dilemmas, our growth may be negatively impacted. |
• | System security and data protection breaches, as well as cyber-attacks, could disrupt our operations, which may damage our reputation and adversely affect our business. |
• | Unfavorable conditions in our industry or the global economy, could limit our ability to grow our business and negatively affect our results of operations. |
• | Government actions and regulations, such as tariffs and trade protection measures, may limit our ability to obtain products from our suppliers. |
• | Our operating and financial results forecast relies in large part upon assumptions and analyses we developed. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results. |
• | We have been, and may in the future be, adversely affected by the global COVID-19 pandemic, its various strains or future pandemics. |
• | We are subject to requirements relating to environmental and safety regulations and environmental remediation matters which could adversely affect our business, results of operation and reputation. |
• | Licensing of intellectual property is of critical importance to our business. For example, we license patents (some of which are foundational patents) and other intellectual property from the University of |
Maryland and Duke University on an exclusive basis. If the license agreement with these universities terminates, or if any of the other agreements under which we acquired or licensed, or will acquire or license, material intellectual property rights is terminated, we could lose the ability to develop and operate our business. |
• | If we are unable to obtain and maintain patent protection for our products and technology, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our products and technology may be adversely affected. Moreover, our trade secrets could be compromised, which could cause us to lose the competitive advantage resulting from these trade secrets. |
• | We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs (including indemnification of third parties or costly licensing arrangements (if licenses are available at all)) and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies, which could result in a significant expenditure and otherwise harm our business. |
• | Some of our in-licensed intellectual property, including the intellectual property licensed from the University of Maryland and Duke University, has been conceived or developed through government-funded research and thus may be subject to federal regulations providing for certain rights for the U.S. government or imposing certain obligations on us, such as a license to the U.S. government under such intellectual property, “march-in” rights, certain reporting requirements and a preference for U.S.-based companies, and compliance with such regulations may limit our exclusive rights and our ability to contract with non-U.S. manufacturers. |
• | effectively manage organizational change; |
• | design scalable processes; |
• | accelerate and/or refocus research and development activities; |
• | expand manufacturing, supply chain and distribution capacity; |
• | increase sales and marketing efforts; |
• | broaden customer-support and services capabilities; |
• | maintain or increase operational efficiencies; |
• | scale support operations in a cost-effective manner; |
• | implement appropriate operational and financial systems; and |
• | maintain effective financial disclosure controls and procedures. |
• | Although we recently added accounting and financial reporting personnel with requisite knowledge and experience in the application of U.S. GAAP and SEC rules, the Company is still in process of |
formalizing its processes and procedures, establishing clear authorities and approvals and segregating duties to facilitate accurate and timely financial reporting. |
• | Our financial accounting system has limited functionality and does not facilitate effective information technology general controls relevant to financial reporting. Additionally, elements of our close process are managed and processed outside the accounting system, increasing the risk of error. |
• | Hired additional full-time accounting personnel with appropriate levels of experience, and augmented skills gaps with external experts; |
• | Established and implemented policies surrounding the approval of transactions, related to, but not limited to, account reconciliations and journal entries; and |
• | Selected and began implementing a financial accounting system that can support effective information technology general controls as well as the anticipated growth of the business. |
• | gate fidelity, error correction and miniaturization may not commercialize from the lab and scale as hoped or at all; |
• | it could prove more challenging and take materially longer than expected to operate parallel gates within a single ion trap and maintain gate fidelity; |
• | the photonic interconnect between ion traps could prove more challenging and take longer to perfect than currently expected. This would limit our ability to scale beyond a single ion trap of approximately 22 logical qubits; |
• | it could take longer to tune the qubits in a single ion trap, as well as preserve the stability of the qubits within a trap as we seek to maximize the total number of qubits within one trap; |
• | the gate speed in our technology could prove more difficult to improve than expected; and |
• | the scaling of fidelity with qubit number could prove poorer than expected, limiting our ability to achieve larger quantum volume. |
• | large, well-established tech companies that generally compete in all of our markets, including Honeywell, Google, Microsoft, Amazon, Intel and IBM; |
• | countries such as China, Russia, Canada, Australia and the United Kingdom, and those in the European Union and we believe additional countries in the future; |
• | less-established public and private companies with competing technology, including companies located outside the United States; and |
• | new or emerging entrants seeking to develop competing technologies. |
• | our inability to enter into agreements with suppliers on commercially reasonable terms, or at all; |
• | difficulties of suppliers ramping up their supply of materials to meet our requirements; |
• | 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; |
• | any reductions or interruption in supply, including disruptions on our global supply chain as a result of the COVID-19 pandemic, which we have experienced, and may in the future experience; |
• | any supply chain disruptions due to Russia’s recent incursion in the Ukraine and any indirect effects thereof which could further complicate existing supply chain constraints; |
• | financial problems of either manufacturers or component suppliers; |
• | significantly increased freight charges, or raw material costs and other expenses associated with our business; |
• | other factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to deliver components to us on a timely basis; |
• | a failure to develop our supply chain management capabilities and recruit and retain qualified professionals; |
• | a failure to adequately authorize procurement of inventory by our contract manufacturers; or |
• | a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs. |
• | pricing and the perceived value of our systems relative to its cost; |
• | delays in releasing quantum computers with sufficient performance and scale to the market; |
• | failure to produce products of consistent quality that offer functionality comparable or superior to existing or new products; |
• | ability to produce products fit for their intended purpose; |
• | failures to accurately predict market or customer demands; |
• | defects, errors or failures in the design or performance of our quantum computing system; |
• | negative publicity about the performance or effectiveness of our system; |
• | strategic reaction of companies that market competitive products; and |
• | the introduction or anticipated introduction of competing technology. |
• | obtain expertise in relevant markets; |
• | obtain sales and marketing services or support; |
• | obtain equipment and facilities; |
• | develop relationships with potential future customers; and |
• | generate revenue. |
• | success and timing of development activity; |
• | customer acceptance of our quantum computing systems; |
• | breakthroughs in classical computing or other computing technologies that could eliminate the advantages of quantum computing systems rendering them less practical to customers; |
• | competition, including from established and future competitors; |
• | whether we can obtain sufficient capital to sustain and grow our business; |
• | our ability to manage our growth; |
• | our ability to retain existing key management, integrate recent hires and attract, retain and motivate qualified personnel; and |
• | the overall strength and stability of domestic and international economies. |
• | the scope of rights granted under the license agreement and other interpretation-related issues; |
• | whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
• | our right to sublicense patent and other rights to third parties; |
• | our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product and technology, and what activities satisfy those diligence obligations; |
• | the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and the company; |
• | our right to transfer or assign the license; and |
• | the effects of termination. |
• | cease selling or using solutions or services that incorporate the intellectual property rights that allegedly infringe, misappropriate or violate the intellectual property of a third party; |
• | make substantial payments for legal fees, settlement payments or other costs or damages; |
• | obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; |
• | redesign the allegedly infringing solutions to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible; or |
• | indemnify organizations using our platform or third-party service providers. |
• | variations in quarterly operating results or dividends, if any, to stockholders; |
• | additions or departures of key management personnel; |
• | publication of research reports about our industry; |
• | litigation and government investigations; |
• | changes or proposed changes in laws or regulations or differing interpretations or enforcement of laws or regulations affecting our business; |
• | adverse market reaction to any indebtedness incurred or securities issued in the future; |
• | changes in market valuations of similar companies; |
• | adverse publicity or speculation in the press or investment community; |
• | announcements by competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures, or capital commitments; and |
• | the impact of the COVID-19 pandemic on our management, employees, partners, customers, and operating results. |
• | labor availability and costs for hourly and management personnel; |
• | profitability of our products, especially in new markets; |
• | changes in interest rates; |
• | impairment of long-lived assets; |
• | macroeconomic conditions, both nationally and locally; |
• | size and scope of our revenue arrangements with our customers; |
• | negative publicity relating to products we serve; |
• | changes in consumer preferences and competitive conditions; |
• | expansion to new markets; and |
• | fluctuations in commodity prices. |
• | existing stockholders’ proportionate ownership interest in us will decrease; |
• | the amount of cash available per share, including for payment of dividends, if any, may decrease; |
• | the relative voting strength of each previously outstanding common stock may be diminished; and |
• | the market price of our common stock may decline. |
• | a classified board; |
• | advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; |
• | certain limitations on convening special stockholder meetings; |
• | limiting the persons who may call special meetings of stockholders; |
• | limiting the ability of stockholders to act by written consent; |
• | restrictions on business combinations with interested stockholder; |
• | in certain cases, the approval of holders representing at least 66 2/3% of the total voting power of the shares entitled to vote generally in the election of directors will be required for stockholders to adopt, amend or repeal the Bylaws, or amend or repeal certain provisions of the Certificate of Incorporation; |
• | no cumulative voting; |
• | the required approval of holders representing at least 66 2/3% of the total voting power of the shares entitled to vote at an election of the directors to remove directors; and |
• | the ability of the board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions. |
• | any derivative action or proceeding brought on behalf of us; |
• | any action asserting a claim of breach of fiduciary duty owed by any director, officer, agent or other employee or stockholder to us or our stockholders; |
• | any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), the Certificate of Incorporation or Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; |
• | any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws; or |
• | any action asserting a claim governed by the internal affairs doctrine, in each case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. It further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act. The exclusive forum clauses described above shall not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, or any other claim for which the federal courts have exclusive jurisdiction. Although these provisions are expected to benefit us by providing increased consistency in the application of applicable law in the types of lawsuits to which they apply, the provisions may have the effect of discouraging lawsuits against directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation have been challenged in legal proceedings and there is uncertainty as to whether a court would enforce such provisions. In addition, investors cannot waive compliance with the federal securities laws and the |
rules and regulations thereunder. It is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our Certificate of Incorporation to be inapplicable or unenforceable in such action. If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition or results of operations. |
Item 1B. |
Unresolved Staff Comments. |
Item 2. |
Properties. |
Item 3. |
Legal Proceedings. |
Item 4. |
Mine Safety Disclosures. |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Item 6. |
[Reserved]. |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Revenue |
$ | 2,099 | $ | — | ||||
Costs and expenses: |
||||||||
Cost of revenue (excluding depreciation and amortization) (1) |
1,040 | 143 | ||||||
Research and development (1) |
20,228 | 10,157 | ||||||
Sales and marketing (1) |
3,233 | 486 | ||||||
General and administrative (1) |
13,737 | 3,547 | ||||||
Depreciation and amortization |
2,548 | 1,400 | ||||||
|
|
|
|
|||||
Total operating costs and expenses |
40,786 | 15,733 | ||||||
|
|
|
|
|||||
Loss from operations |
(38,687 | ) | (15,733 | ) | ||||
Change in fair value of warrant liabilities |
(63,332 | ) | — | |||||
Offering costs associated with warrants |
(4,259 | ) | — | |||||
Other income (expense), net |
92 | 309 | ||||||
|
|
|
|
|||||
Loss before benefit for income taxes |
(106,186 | ) | (15,424 | ) | ||||
Benefit for income taxes |
— | — | ||||||
|
|
|
|
|||||
Net loss |
$ | (106,186 | ) | $ | (15,424 | ) | ||
|
|
|
|
(1) | Cost of revenue, research and development, sales and marketing, and general and administrative expenses for the periods include stock- based compensation expense as follows: |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Cost of revenue |
$ | 62 | $ | — | ||||
Research and development |
2,841 | 716 | ||||||
Sales and marketing |
67 | — | ||||||
General and administrative |
4,778 | 508 |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Revenue |
$ | 2,099 | $ | — | $ | 2,099 | 100 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 1,040 | $ | 143 | $ | 897 | 627 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Research and development |
$ | 20,228 | $ | 10,157 | $ | 10,071 | 99 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Sales and marketing |
$ | 3,233 | $ | 486 | $ | 2,747 | 565 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
General and administrative |
$ | 13,737 | $ | 3,547 | $ | 10,190 | 287 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Depreciation and amortization |
$ | 2,548 | $ | 1,400 | $ | 1,148 | 82 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Change in fair value of warrant liabilities |
$ | 63,332 | $ | — | $ | 63,332 | 100 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Offering costs associated with warrants |
$ | 4,259 | $ | — | $ | 4,259 | 100 | % |
Year Ended December 31, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
( in thousands ) |
||||||||||||||||
Other income (expense), net |
$ | 92 | $ | 309 | $ | (217 | ) | (70 | )% |
Material Cash Requirements |
||||||||||||||||||||
Total |
Less than 1 Year |
1 - 3 Years |
3 - 5 Years |
More than 5 Years |
||||||||||||||||
Operating lease obligations (1) |
$ | 6,984 | $ | 644 | $ | 1,421 | $ | 1,568 | $ | 3,351 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 6,984 | $ | 644 | $ | 1,421 | $ | 1,568 | $ | 3,351 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Amounts include direct lease obligations, excluding any taxes, insurance and other related expenses. |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Net cash used in operating activities |
$ | (26,537 | ) | $ | (12,007 | ) | ||
Net cash used in investing activities |
(213,785 | ) | (11,676 | ) | ||||
Net cash provided by financing activities |
603,227 | 276 |
• | contemporaneous valuations performed at periodic intervals by independent, third-party specialists; |
• | our actual operating and financial performance; |
• | our current business conditions and projections; |
• | our progress on research and development efforts; |
• | our stage of development; |
• | the prices, preferences, and privileges of shares of Legacy IonQ convertible preferred stock relative to shares of common stock; |
• | likelihood of achieving a liquidity event for the underlying equity instruments, such as a business combination, given prevailing market conditions; |
• | lack of marketability of Legacy IonQ common stock; and |
• | macroeconomic conditions. |
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk. |
Item 8. |
Financial Statements and Supplementary Data. |
Item 9. |
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
Item 9A. |
Controls and Procedures. |
• | Although we recently added accounting and financial reporting personnel with requisite knowledge and experience in the application of U.S. GAAP and SEC rules, the Company is still in process of formalizing its processes and procedures, establishing clear authorities and approvals and segregating duties to facilitate accurate and timely financial reporting. |
• | Our financial accounting system has limited functionality and does not facilitate effective information technology general controls relevant to financial reporting. Additionally, elements of our close process are managed and processed outside the accounting system, increasing the risk of error. |
• | Hired additional full-time accounting personnel with appropriate levels of experience, and augmented skills gaps with external experts; |
• | Established and implemented policies surrounding the approval of transactions, related to, but not limited to, account reconciliations and journal entries; and |
• | Selected and began implementing a financial accounting system that can support effective information technology general controls as well as the anticipated growth of the business. |
Item 9B. |
Other Information. |
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Item 10. |
Directors, Executive Officers and Corporate Governance. |
Name |
Age |
Term Expires |
Position | |||
Peter Chapman |
61 | 2024 | President & Chief Executive Officer and Director | |||
Jungsang Kim |
52 | 2024 | Chief Technology Officer and Director | |||
Craig Barratt |
59 | 2024 | Chairman of the Board | |||
Blake Byers |
37 | 2022 | Director | |||
Ronald Bernal |
66 | 2023 | Director | |||
Niccolo de Masi |
41 | 2022 | Director | |||
Inder M. Singh |
63 | 2022 | Director | |||
Harry You |
62 | 2023 | Director |
Name |
Age* |
Position | ||||
Executive Officers |
||||||
Christopher Monroe |
56 | Chief Scientist | ||||
Thomas Kramer |
51 | Chief Financial Officer | ||||
Laurie Babinski |
40 | General Counsel and Secretary |
• | helping the board of directors oversee corporate accounting and financial reporting processes; |
• | managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit the financial statements; |
• | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, the interim and year-end operating results; |
• | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
• | reviewing related person transactions; |
• | obtaining and reviewing a report by the independent registered public accounting firm at least annually that describes internal quality control procedures, any material issues with such procedures and any steps taken to deal with such issues when required by applicable law; and |
• | approving or, as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm. |
Item 11. |
Executive Compensation. |
Name and Principal Position |
Year |
Salary ($) |
Option Awards ($) (1) |
All Other Compensation ($) (2) |
Total ($) |
|||||||||||||||
Peter Chapman |
2021 | 350,000 | — | 14,500 | 364,500 | |||||||||||||||
President and Chief Executive Officer |
2020 | 350,000 | — | 14,250 | 364,250 | |||||||||||||||
Jungsang Kim |
2021 | 280,000 | 2,973,049 | — | 3,253,049 | |||||||||||||||
Chief Technology Officer |
2020 | 213,533 | 1,177,277 | — | 1,390,810 | |||||||||||||||
Thomas Kramer (3) |
2021 | 175,769 | 17,067,337 | 8,788 | 17,251,894 | |||||||||||||||
Chief Financial Officer |
||||||||||||||||||||
Niccolo de Masi (4) |
2021 | 11,000 | (5) |
— | — | 11,000 | ||||||||||||||
Former Chief Executive Officer |
(1) | The amounts in this column reflect the aggregate grant date fair value of the shares underlying option awards granted in the applicable year, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 for stock-based compensation transactions. The assumptions we used in valuing these awards are described in Note 13 to our consolidated financial statements included elsewhere in this Annual Report. These amounts do not reflect the actual economic value that will be realized by the named executive officer upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options. |
(2) | Amounts in this column represent 401(k) matching contribution for Mr. Chapman and Mr. Kramer. |
(3) | Mr. Kramer began employment with us on February 15, 2021. |
(4) | Mr. de Masi resigned as the chief executive officer upon closing of the business combination. |
(5) | Amount represents annual fees paid to Mr. de Masi for his service on our board of directors. |
Option Awards (5) |
Stock Awards (5) |
|||||||||||||||||||||||||||||||
Name |
Grant Date |
Vesting Commencement Date |
Number of securities underlying unexercised options (#) exercisable |
Number of securities underlying unexercised options (#) unexercisable |
Option exercise price ($) |
Option expiration date |
Number of shares or units of stock that have not vested (#) |
Market value of shares of units of stock that have not vested ($) |
||||||||||||||||||||||||
Peter Chapman |
5/17/2019 | 5/17/2019 | 4,183,402 | 3,913,503 | (1) |
$ | 0.13 | 5/16/2029 | — | — | ||||||||||||||||||||||
Jungsang Kim |
11/3/2020 | 12/31/2020 | 222,677 | 951,374 | (2) |
$ | 0.69 | 11/2/2030 | — | — | ||||||||||||||||||||||
3/4/2021 | 4/30/2021 | 60,714 | 344,131 | (2) |
$ | 2.39 | 3/3/2031 | — | — | |||||||||||||||||||||||
Thomas Kramer |
2/19/2021 | 2/15/2021 | — | 2,251,538 | (1) |
$ | 2.39 | 2/18/2031 | 225,158 | (3) |
3,760,139 | (4) | ||||||||||||||||||||
Niccolo de Masi |
— | — | — | — | — | — | — | — |
(1) | 10% of the shares of common stock underlying the option vested on the six month anniversary of the vesting commencement date and 1/54 th of the remaining shares shall vest on the last day of each month thereafter, subject to the holder remaining in continuous service with the Company on each vesting date. |
(2) | The shares of common stock underlying the option vested or shall vest 1/54 th on the last day of each month commencing on the Vesting Commencement Date, subject to the holder remaining in Continuous Service with the Company on each vesting date. |
(3) | Consists of shares of restricted stock issued pursuant to the early exercise of Mr. Kramer’s option award granted in February 2021 and that remain subject to our repurchase right in accordance with the vesting schedule of the option. |
(4) | The market value of unvested shares is calculated by multiplying the number of unvested shares by the closing market price of our common stock on NYSE on December 31, 2021, the last trading day of the year, which was $16.70 per share. |
(5) | If a named executive officer experiences a covered termination during a change in control period, any then outstanding unvested shares of common stock subject to this option will become fully vested and exercisable. See the section below titled “—Change in Control Severance Plan” below for additional information. |
• | each chair of our audit, compensation and nominating and corporate governance committees receives an additional annual retainer of $20,000, $12,000 and $8,000, respectively; and |
• | each other member of our audit, compensation and nominating and corporate governance committees receives an additional annual retainer of $8,000, $6,000 and $4,000, respectively. |
Name |
Fees Earned or Paid in Cash ($) |
Option Awards (1)(5) ($) |
Total ($) |
|||||||||
Darla Anderson (3) |
— | — | — | |||||||||
Craig Barratt |
16,500 | 3,108,925 | (2) |
3,125,425 | ||||||||
Blake Byers |
10,500 | — | 10,500 | |||||||||
Ronald Bernal |
11,000 | — | 11,000 | |||||||||
Francesca Luthi (3) |
— | — | — | |||||||||
Inder M. Singh (4) |
1,900 | — | 1,900 | |||||||||
Charles E. Wert (3) |
— | — | — | |||||||||
Harry You |
12,500 | — | 12,500 |
(1) | The amounts reported in this column reflect the aggregate grant date fair value of the shares underlying option awards granted to our directors as computed in accordance with ASC Topic 718. See Note 13 to our consolidated financial statements included elsewhere in this Annual Report for a discussion of assumptions made us in determining the aggregate grant date fair value of our option awards. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the directors upon the vesting of the stock options, the exercise of the stock options or the sale of the common stock underlying such stock options. |
(2) | In connection with Mr. Barratt’s appointment to Legacy IonQ, he was granted a stock option to purchase 926,347 shares of our common stock. The shares of common stock underlying the option vested or shall vest 1/36 th on the last day of each month commencing on December 30, 2020, subject to the holder remaining in Continuous Service with the Company on each vesting date. The option contains an early exercisable provision and was fully exercised by Mr. Barratt. |
(3) | Resigned from our board of directors upon completion of the business combination on September 30, 2021. |
(4) | In January 2022, Mr. Singh received a Stock Option Award of 33,570 shares of our common stock and an RSU Award of 11,190 shares of our common stock in connection with his appointment to our board of directors in December 2021. |
(5) | The following table provides information regarding the aggregate number of equity awards granted to our non-employee directors that were outstanding as of December 31, 2021: |
Name |
Restricted Stock Outstanding at Year-End (#) |
Option Awards Outstanding at Year-End (#) |
||||||
Darla Anderson |
— | — | ||||||
Craig Barratt |
617,567 | (1) |
— | |||||
Blake Byers |
— | — | ||||||
Ronald Bernal |
— | — | ||||||
Francesca Luthi |
— | — | ||||||
Inder M. Singh |
— | — | ||||||
Charles E. Wert |
— | — | ||||||
Harry You |
— | — |
(1) | Consists of shares of restricted stock issued pursuant to the early exercise of the stock option granted to Mr. Barratt in connection with this appointment to Legacy IonQ that remain subject to our repurchase right in accordance with the vesting schedule of the stock option. |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
Name and Address of Beneficial Owner (1) |
Amount & Nature of Beneficial Ownership |
Percent of Class (Common Stock) |
||||||
5% Stockholders: |
||||||||
Entities affiliated with New Enterprise Associates (2) |
29,277,852 | 14.7 | % | |||||
Entities affiliated with GV (3) |
21,907,038 | 11.0 | % | |||||
Named Executive Officers and Directors: |
||||||||
Peter Chapman (4) |
4,723,194 | 2.3 | % | |||||
Jungsang Kim (5) |
7,623,390 | 3.4 | % | |||||
Thomas Kramer (6) |
675,464 | * | ||||||
Craig Barratt (7) |
926,347 | * | ||||||
Blake Byers |
300,000 | * | ||||||
Ronald Bernal (2) |
— | * | ||||||
Niccolo de Masi (8) |
— | * | ||||||
Inder M. Singh |
— | * | ||||||
Harry L. You (8) |
7,425,000 | 3.8 | % | |||||
All executive officers and directors as a group (11 persons) |
28,639,364 | 14.1 | % |
* | Less than 1%. |
(1) | Unless otherwise noted, the business address of each of the beneficial owners is c/o IonQ, Inc., 4505 Campus Drive, College Park, MD 20740. |
(2) | Consists of (i) 29,229,659 shares of common stock held by New Enterprise Associates 15, L.P. (“NEA 15”) and (ii) 48,193 shares of common stock held by NEA Ventures 2016, L.P (“NEA Ventures”). The shares directly held by NEA 15 are indirectly held by NEA Partners 15, L.P. (“NEA Partners 15”), the sole general partner of NEA 15, NEA 15 GP, LLC (“NEA 15 LLC”), the sole general partner of NEA Partners 15 and each of the individual managers of NEA 15 LLC. The individual Managers of NEA 15 LLC (collectively, the “Managers”) are Forest Baskett, Anthony A. Florence, Mohamad Makhzoumi, Peter Sonsini and |
Scott D. Sandell. The shares directly held by NEA Ventures are indirectly held by Karen P. Welsh, the general partner of NEA Ventures. NEA Partners 15, NEA 15 LLC and the Managers share voting and dispositive power with regard to the securities directly held by NEA 15. Ms. Welsh has voting and dispositive power with regard to the securities directly held by NEA Ventures. Ron Bernal, a member of our board of directors, and a Venture Partner at New Enterprise Associates, Inc. (“NEA”), has no voting or investment control over any of the shares held by NEA 15 and NEA Ventures. All indirect holders of the above referenced securities disclaim beneficial ownership therein except to the extent of their actual pecuniary interest. |
(3) | Consists of (i) 4,556,532 shares of common stock held by GV 2019, L.P. and (ii) 17,350,506 shares of common stock held by GV 2016, L.P. GV 2019 GP, L.P. (the general partner of GV 2019, L.P.), GV 2019 GP, L.L.C., (the general partner of GV 2019 GP, L.P.), Alphabet Holdings LLC (the managing member of GV 2019 GP, L.L.C.), XXVI Holdings Inc. (the managing member of Alphabet Holdings LLC) and Alphabet Inc. (the controlling stockholder of XXVI Holdings Inc.) may each be deemed to have sole voting and investment power over the securities held by GV 2019, L.P. GV 2016 GP, L.P. (the general partner of GV 2016, L.P.), GV 2016 GP, L.L.C. (the general partner of GV 2016 GP, L.P.), Alphabet Holdings LLC (the managing member of GV 2016 GP, L.L.C.), XXVI Holdings Inc. (the managing member of Alphabet Holdings LLC) and Alphabet Inc. (the controlling stockholder of XXVI Holdings Inc.) may each be deemed to have sole voting and investment power over the securities held by GV 2016, L.P. The principal business address of GV 2019, L.P., GV 2019 GP, L.P., GV 2019 GP, L.L.C., GV 2016, L.P., GV 2016 GP, L.P., GV 2016 GP, L.L.C., Alphabet Holdings LLC, XXVI Holdings Inc. and Alphabet Inc. is 1600 Amphitheatre Parkway, Mountain View, California 94043. |
(4) | Reflects shares of common stock issuable to Mr. Chapman pursuant to options exercisable within 60 days of March 15, 2022. |
(5) | Consists of (i) 6,422,352 shares of common stock held by Mr. Kim, (ii) 391,347 shares of common stock issuable to Mr. Kim pursuant to options exercisable within 60 days of March 15, 2022, and (iii) 809,691 shares of common stock held by the Jungsang Kim Irrevocable Trusts For Children, dated January 27, 2021. |
(6) | Consists of 675,464 shares of common stock held by Mr. Kramer, a portion of which are subject to a repurchase right. |
(7) | Consists of 926,347 shares of common stock held by the Barratt-Oakley Trust dated November 29, 2004, of which Mr. Barratt is a trustee. A portion of these shares are subject to a repurchase right. |
(8) | Consists of 7,425,000 shares of common stock held by dMY Sponsor III, LLC (the “Sponsor”). Each of Mr. You and Mr. de Masi are members of the Sponsor, and Mr. You is the manager of the Sponsor. Accordingly, Mr. You has voting and investment discretion with respect to the common stock held of record by the Sponsor. Mr. di Masi has no voting or investment control over any of the shares and disclaims any beneficial ownership of any securities held by the Sponsor. |
Plan Category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights ($) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
(a) |
(b) |
(c) |
||||||||||
Equity compensation plans approved by stockholders: |
||||||||||||
2015 Equity Incentive Plan (1) |
22,133,210 | $ | 0.64 | — | ||||||||
2021 Equity Incentive Plan |
— | — | 26,235,000 | (2) | ||||||||
2021 Employee Stock Purchase Plan |
— | — | 5,354,000 | (3) | ||||||||
Equity compensation plans not approved by stockholders |
— | — | — | |||||||||
Total |
22,133,210 | $ | 0.64 | 31,589,000 |
(1) | Following the adoption of the 2021 Plan, no additional equity awards have been or will be granted under the 2015 Plan. |
(2) | The number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year, beginning on January 1, 2022 and continuing through and including January 1, 2031, in an amount equal to (1) 5% of the fully-diluted common stock on December 31 of the preceding year (as defined in the 2021 Plan), or (2) a lesser number of shares of common stock determined by the board of directors prior to the date of the increase (which may be zero). Pursuant to the terms of the 2021 Plan, the number of shares available under the 2021 Plan was increased by 12,947,703 shares effective January 1, 2022. |
(3) | The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1% of the fully-diluted common stock on December 31 of the preceding calendar year (inclusive of the share reserve for the ESPP and of the 2021 Plan), (2) a number of shares equal to two times the initial share reserve, or (3) such lesser number of shares of common stock as determined by the board (which may be zero). Pursuant to the terms of the ESPP, no shares were added to the reserve on January 1, 2022. |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
• |
the risks, costs, and benefits to us; |
• |
the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
• |
the terms of the transaction; |
• |
the availability of other sources for comparable services or products; and |
• |
the terms available to or from, as the case may be, unrelated third parties. |
• |
the amounts involved exceeded or will exceed $120,000; and |
• |
any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest. |
Shares of Series B-1 Preferred Stock |
Total Purchase Price |
|||||||
New Enterprise Associates 15, L.P. (1) |
896,748 |
$ |
4,999,998 |
|||||
GV 2019, L.P. (2) |
1,076,098 |
$ |
6,000,000 |
(1) |
Ronald Bernal, a member of our board of directors, is a partner of New Enterprise Associates 15, L.P., a beneficial owner of greater than 5% of our capital stock. |
(2) |
Blake Byers, a member of our board of directors, was previously a partner of GV 2019, L.P., a beneficial owner of greater than 5% of our capital stock. |
Stockholder |
Shares of dMY common stock |
Total Purchase Price |
||||||
Blake Byers (1) |
300,000 |
$ |
3,000,000 |
|||||
New Enterprise Associates 15, L.P. (2) |
200,000 |
$ |
2,000,000 |
|||||
GV 2016, L.P. (1) |
200,000 |
$ |
2,000,000 |
(1) |
Blake Byers, a member of our board of directors, was previously a partner of GV 2016, L.P., a beneficial owner of greater than 5% of our capital stock. |
(2) |
Ronald Bernal, a member of our board of directors, is a partner of New Enterprise Associates 15, L.P., a beneficial owner of greater than 5% of our capital stock. |
• |
sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, any shares of common stock held by it immediately after closing (including common stock acquired as part of the PIPE investment or issued in exchange for, or on conversion or exercise of, any securities issued as part of the PIPE investment), any shares of common stock issuable upon the exercise of options to purchase shares of common stock held by it immediately after closing, or any securities convertible into or exercisable or exchangeable for common stock held by it immediately after closing (the “Lock-Up Shares”), |
• |
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or |
• |
publicly announce any intention to effect any transaction specified in the foregoing clauses. |
Item 14. |
Principal Accountant Fees and Services. |
Fiscal Year |
||||||||
2021 |
2020 |
|||||||
Audit fees (1) |
$ |
1,510,000 |
$ |
425,000 |
||||
Audit-related fees |
$ |
— |
$ |
— |
||||
Tax fees |
$ |
— |
$ |
— |
||||
All other fees |
$ |
— |
$ |
— |
||||
|
|
|
|
|||||
Total fees |
$ |
1,510,000 |
$ |
425,000 |
||||
|
|
|
|
(1) |
Audit fees in 2021 consisted of fees billed for professional services rendered for the audit of IonQ, Inc.’s 2021 consolidated financial statements, the reviews of 2021 interim condensed consolidated financial statements, audit services in connection with the accounting for the business combination, and audit services provided in connection with other regulatory filings and offerings, including the regulatory filings associated with the business combination and related financings. Audit fees for 2020 consisted of fees billed for professional services rendered for the audit of Legacy IonQ’s consolidated financial statements (2019 and 2020), the reviews of the applicable historical interim condensed consolidated financial statements, and audit services provided in connection with other regulatory filings and offerings, including the regulatory filings associated with the business combination and related financings. |
Fiscal Year |
||||||||
2021 |
2020 |
|||||||
Audit fees (1) |
$ |
86,000 |
$ |
40,000 |
||||
Audit-related fees |
$ |
— |
$ |
— |
||||
Tax fees (2) |
$ |
8,000 |
$ |
— |
||||
All other fees |
$ |
— |
$ |
— |
||||
|
|
|
|
|||||
Total fees |
$ |
94,000 |
$ |
40,000 |
||||
|
|
|
|
(1) |
Audit fees in 2021 consisted of fees billed for professional services rendered for the audit of dMY’s restated 2020 annual financial statements, interim reviews of dMY’s quarterly financial statements, and services that were normally provided by Withum in connection with regulatory filings. Audit fees in 2020 include fees billed for professional services rendered for the audit of dMY’s annual financial statements and other required filings with the SEC. |
(2) |
Tax fees consisted of fees billed for professional services relating to tax compliance services. |
• |
all such services do not, in the aggregate, amount to more than 5% of the total fees paid by us to Ernst & Young during the fiscal year in which the services are provided; |
• |
such services were not recognized as non-audit services at the time of the relevant engagement; and |
• |
such services are promptly brought to the attention of and approved by the Audit Committee (or its delegate) prior to the completion of the annual audit. |
Item 15. |
Exhibit and Financial Statement Schedules. |
F-2 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
||||
F-8 |
Exhibit Number |
Description | |
2.1 |
||
3.1 |
||
3.2 |
||
4.1 |
||
4.2 |
||
4.3 |
||
10.1 |
* | Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing. |
+ | Indicates a management contract or compensatory plan. |
† | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(10)(iv). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
Item 16. |
Form 10-K Summary |
IonQ, Inc. | ||||
March 28, 2022 | B Y : |
/s/ Peter Chapman | ||
Peter Chapman | ||||
President and Chief Executive Officer ( Principal Executive Officer |
Name |
Title |
Date | ||
/s/ Peter Chapman Peter Chapman |
President and Chief Executive Officer and Director (Principal Executive Officer) |
March 28, 2022 | ||
/s/ Thomas Kramer Thomas Kramer |
Chief Financial Officer (Principal Financial and Accounting Officer) |
March 28, 2022 | ||
/s/ Craig Barratt Craig Barratt |
Chairman of the Board of Directors |
March 28, 2022 | ||
/s/ Ronald Bernal Ronald Bernal |
Director |
March 28, 2022 | ||
/s/ Blake Byers Blake Byers |
Director |
March 28, 2022 | ||
/s/ Niccolo de Masi Niccolo de Masi |
Director |
March 28, 2022 |
/s/ Jungsang Kim Jungsang Kim |
Co-Founder, Chief Technology Officerand Director |
March 28, 2022 | ||
/s/ Inder M. Singh Inder M. Singh |
Director |
March 28, 2022 | ||
/s/ Harry You Harry You |
Director |
March 28, 2022 |
F-2 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
||||
F-8 |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 399,025 | $ | 36,120 | ||||
Short-term investments |
123,443 | — | ||||||
Accounts receivable |
707 | 390 | ||||||
Prepaid expenses and other current assets ($612 and $1,013 attributable to related parties) |
6,442 | 2,069 | ||||||
Total current assets |
529,617 | 38,579 | ||||||
Long-term investments |
80,110 | — | ||||||
Property and equipment, net |
18,870 | 11,988 | ||||||
Operating lease right-of-use |
4,032 | 4,296 | ||||||
Intangible assets, net |
5,841 | 2,687 | ||||||
Other noncurrent assets ($1,845 and $2,365 attributable to related parties) |
3,558 | 2,928 | ||||||
Total Assets |
$ |
642,028 |
$ |
60,478 |
||||
Liabilities, Convertible Redeemable Preferred Stock and Warrants, and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 1,882 | $ | 538 | ||||
Accrued expenses |
2,647 | 608 | ||||||
Current portion of operating lease liabilities ($568 and $495 attributable to related parties) |
568 | 495 | ||||||
Unearned revenue ($2,821 and zero attributable to related parties) |
3,430 | 240 | ||||||
Current portion of stock option early exercise liabilities |
1,164 | — | ||||||
Total current liabilities |
9,691 | 1,881 | ||||||
Operating lease liabilities, net of current portion ($3,643 and $3,776 attributable to related parties) |
3,643 | 3,776 | ||||||
Unearned revenue, net of current portion |
1,533 | 1,118 | ||||||
Stock option early exercise liabilities, net of current portion |
1,969 | — | ||||||
Warrant liabilities |
33,962 | — | ||||||
Total liabilities |
$ | 50,798 | $ | 6,775 | ||||
Commitments and contingencies (see Note 9) |
||||||||
Convertible Redeemable Preferred Stock and Warrants: |
||||||||
Series A convertible redeemable preferred stock; $0.0001 par value per share; 2,000,000 shares authorized; after giving effect to the recapitalization there is no convertible redeemable preferred stock issued or outstanding as of December 31, 2021 and 2020 |
— | — | ||||||
Series B convertible redeemable preferred stock; $0.0001 par value per share; 9,753,798 shares authorized; after giving effect to the recapitalization there is no convertible redeemable preferred stock issued or outstanding as of December 31, 2021 and 2020 |
— | — | ||||||
Series B-1 convertible redeemable preferred stock; $0.0001 par value per share; 13,217,404 shares authorized; after giving effect to the recapitalization there is no convertible redeemable preferred stock issued or outstanding as of December 31, 2021 and 2020 |
— | — | ||||||
Warrants for Series B-1 convertible redeemable preferred stock; after giving effect to the recapitalization there are no warrants for convertible redeemable preferred stock issued or outstanding as of December 31, 2021 and 2020 |
— | — | ||||||
Stockholders’ Equity: |
||||||||
Common stock $0.0001 par value; 1,000,000,000 and 160,318,719 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 195,630,975 and 118,146,795 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively |
19 | 3 | ||||||
Additional paid-in capital |
737,150 | 93,305 | ||||||
Accumulated deficit |
(145,791 | ) | (39,605 | ) | ||||
Accumulated other comprehensive loss |
(148 | ) | — | |||||
Total stockholders’ equity |
591,230 | 53,703 | ||||||
Total Liabilities, Convertible Redeemable Preferred Stock and Warrants, and Stockholders’ Equity |
$ |
642,028 |
$ |
60,478 |
||||
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Revenue |
$ | 2,099 | $ | — | ||||
Costs and expenses: |
||||||||
Cost of revenue (excluding depreciation and amortization) |
1,040 | 143 | ||||||
Research and development |
20,228 | 10,157 | ||||||
Sales and marketing |
3,233 | 486 | ||||||
General and administrative |
13,737 | 3,547 | ||||||
Depreciation and amortization |
2,548 | 1,400 | ||||||
|
|
|
|
|||||
Total operating costs and expenses |
40,786 |
15,733 |
||||||
|
|
|
|
|||||
Loss from operations |
(38,687 |
) |
(15,733 |
) | ||||
Change in fair value of warrant liabilities |
(63,332 | ) | — | |||||
Offering costs associated with warrants |
(4,259 | ) | — | |||||
Other income (expense), net |
92 | 309 | ||||||
|
|
|
|
|||||
Loss before benefit for income taxes |
(106,186 |
) |
(15,424 |
) | ||||
Benefit for income taxes |
— | — | ||||||
|
|
|
|
|||||
Net loss |
$ |
(106,186 |
) |
$ |
(15,424 |
) | ||
|
|
|
|
|||||
Net loss per share attributable to common stockholders—basic and diluted |
$ | (0.77 | ) | $ | (0.13 | ) | ||
|
|
|
|
|||||
Weighted average shares used in computing net loss per share attributable to common stockholders—basic and diluted |
137,609,620 | 115,045,097 | ||||||
|
|
|
|
Year Ended December 31, | ||||||||
2021 | 2020 | |||||||
Net loss |
$ | (106,186 | ) | $ | (15,424 | ) | ||
Other comprehensive loss, net of reclassification adjustments: |
||||||||
Unrealized loss on available-for-sale |
(148 | ) | — | |||||
|
|
|
|
|||||
Total other comprehensive loss |
(148 | ) | — | |||||
|
|
|
|
|||||
Total comprehensive loss |
$ |
(106,334 |
) |
$ |
(15,424 |
) | ||
|
|
|
|
Convertible Redeemable Preferred Stock |
Stockholders’ Equity |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Series A |
Series B |
Series B-1 |
Common Stock |
Additional Paid - in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity/(Deficit) |
|||||||||||||||||||||||||||||||||||||||||||||
Shares (1) |
Amount |
Shares (1) |
Amount |
Shares (1) |
Amount |
Shares (1) |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 |
2,000,000 |
$ |
1,925 |
9,753,798 |
$ |
21,111 |
11,166,941 |
$ |
61,867 |
5,098,562 |
1 |
3,263 |
(24,181 |
) |
(20,917 |
) | ||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization |
(2,000,000 | ) | (1,925 | ) | (9,753,798 | ) | (21,111 | ) | (11,166,941 | ) | (61,867 | ) | 108,336,247 | 2 | 84,901 | — | 84,903 | |||||||||||||||||||||||||||||||||||
Adjusted balance, beginning of period |
— | — | — | — | — | — | 113,434,809 | 3 | 88,164 | (24,181 | ) | 63,986 | ||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | (15,424 | ) | (15,424 | ) | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock in consideration for research and development arrangement |
— | — | — | — | — | — | 1,214,317 | — | 2,903 | — | 2,903 | |||||||||||||||||||||||||||||||||||||||||
Vesting of warrant issued to a customer |
— | — | — | — | — | — | — | — | 566 | — | 566 | |||||||||||||||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | 1,726,471 | — | 293 | — | 293 | |||||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock |
— | — | — | — | — | — | 1,771,198 | — | 170 | — | 170 | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | 1,209 | — | 1,209 | |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
118,146,795 |
3 |
93,305 |
(39,605 |
) |
53,703 |
|||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(106,186 |
) |
— |
(106,186 |
) | ||||||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(148 |
) |
(148 |
) | ||||||||||||||||||||||||||||||||||||||
Equity instruments issued in consideration for intellectual property and research and development arrangements |
— |
— |
— |
— |
— |
— |
385,797 |
— |
2,381 |
— |
— |
2,381 |
||||||||||||||||||||||||||||||||||||||||
Stock options exercised |
— |
— |
— |
— |
— |
— |
1,044,199 |
— |
288 |
— |
— |
288 |
||||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock |
— |
— |
— |
— |
— |
— |
1,259,074 |
— |
1,068 |
— |
— |
1,068 |
||||||||||||||||||||||||||||||||||||||||
Merger and PIPE transaction, net of transaction costs |
— |
— |
— |
— |
— |
— |
70,300,768 |
16 |
526,296 |
— |
— |
526,312 |
||||||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
— |
8,023 |
— |
— |
8,023 |
|||||||||||||||||||||||||||||||||||||||||
Warrants exercised |
— |
— |
— |
— |
— |
— |
4,494,342 |
— |
105,789 |
— |
— |
105,789 |
||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
195,630,975 |
$ |
19 |
$ |
737,150 |
$ |
(145,791 |
) |
$ |
(148 |
) |
$ |
591,230 |
||||||||||||||||||||||||||||||
(1) |
The shares of the Company’s common and convertible redeemable preferred stock and warrants, prior to the Business Combination (as defined in Note 1) have been retroactively restated to reflect the exchange ratio established in the Business Combination. Legacy IonQ’s convertible redeemable preferred stock and warrants previously classified as mezzanine equity were retroactively adjusted, converted into common stock, and reclassified to permanent equity because of the reverse recapitalization as described in Note 1. |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (106,186 | ) | $ | (15,424 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
2,548 | 1,400 | ||||||
Non-cash research and development arrangements |
1,335 | — | ||||||
Amortization of customer warrant |
528 | 38 | ||||||
Offering costs associated with warrants |
4,259 | — | ||||||
Stock-based compensation |
7,748 | 1,224 | ||||||
Change in fair value of warrant liabilities |
63,332 | — | ||||||
Other, net |
101 | 77 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(317 | ) | (290 | ) | ||||
Prepaid expenses and other current assets |
(3,790 | ) | (699 | ) | ||||
Other noncurrent assets |
(1,678 | ) | (11 | ) | ||||
Accounts payable |
763 | 96 | ||||||
Accrued expenses |
1,259 | 374 | ||||||
Operating lease liabilities |
(44 | ) | (150 | ) | ||||
Unearned revenue |
3,605 | 1,358 | ||||||
Net cash used in operating activities |
(26,537 | ) | (12,007 | ) | ||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(7,783 | ) | (10,032 | ) | ||||
Capitalized software development costs |
(1,621 | ) | (1,131 | ) | ||||
Purchases of available-for-sale |
(203,761 | ) | — | |||||
Intangible asset acquisition costs |
(620 | ) | (513 | ) | ||||
Net cash used in investing activities |
(213,785 | ) | (11,676 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from stock options exercised |
5,457 | 276 | ||||||
Repurchase of early exercised stock options |
(968 | ) | — | |||||
Proceeds from public warrants exercised |
26,070 | — | ||||||
Proceeds from merger and PIPE transaction, net of transaction costs |
572,668 | — | ||||||
Net cash provided by financing activities |
603,227 | 276 | ||||||
Net change in cash and cash equivalents |
362,905 | (23,407 | ) | |||||
Cash and cash equivalents at the beginning of the period |
36,120 | 59,527 | ||||||
Cash and cash equivalents at the end of the period |
$ | 399,025 | $ | 36,120 | ||||
Supplemental disclosures of non-cash investing and financing activities |
||||||||
Issuance of common stock for intellectual property |
$ | 1,567 | $ | — | ||||
Issuance of common stock for research and development arrangement |
$ | 814 | $ | 2,903 | ||||
Property and equipment purchases in accounts payable and accrued expenses |
$ | 553 | $ | — | ||||
Intangible asset purchases in accounts payable and accrued expenses |
$ | 83 | $ | — | ||||
Noncash reclassification of warrant liabilities to equity upon exercise |
$ | 79,719 | $ | — | ||||
Vesting of customer warrants |
$ | — | $ | 566 |
• |
Level 1—Observable inputs, which include quoted prices in active markets; |
• |
Level 2—Observable inputs other than the quoted prices in active markets that are observable either directly or indirectly, such as quoted prices in markets that are not active, or other inputs such as broker quotes, benchmark yield curves, credit spreads and market interest rates for similar securities that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; |
• |
Level 3—Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined using pricing models, discounted cash flow methodologies or similar techniques. |
2021 |
2020 |
|||||||
Billed accounts receivable |
$ | 261 | $ | 390 | ||||
Unbilled accounts receivable |
446 | — | ||||||
|
|
|
|
|||||
Total |
$ | 707 | $ | 390 |
Computer equipment and acquired computer software |
3 – 5 years | |
Machinery, equipment, furniture and fixtures |
5 – 7 years | |
Quantum computing systems |
2 years | |
Leasehold improvements |
Shorter of the lease term or the estimated useful life of the related asset |
1. | Identify the contract with the customer |
2. | Identify the performance obligations |
3. | Determine the transaction price |
4. | Allocate the transaction price to the performance obligations |
5. | Recognize revenue when (or as) the entity satisfies a performance obligation |
Year Ended December 31, |
||||||||
Numerator: |
2021 |
2020 |
||||||
Net loss attributable to common stockholders |
$ | (106,186 | ) | $ | (15,424 | ) | ||
Denominator: |
||||||||
Weighted average shares used in computing net loss per share attributable to common stockholders—basic and diluted |
137,609,620 | 115,045,097 | ||||||
Net loss per share attributable to common stockholders—basic and diluted |
$ | (0.77 | ) | $ | (0.13 | ) |
Year Ended December 31 |
||||||||
2021 |
2020 |
|||||||
Common stock options outstanding |
24,206,373 | 9,033,927 | ||||||
Warrants to purchase common stock |
8,301,202 | 8,301,202 | ||||||
Unvested common stock |
1,407,500 | 553,196 | ||||||
Public and private warrants |
2,359,179 | — | ||||||
Unvested founders’ shares |
129,452 | — | ||||||
|
|
|
|
|||||
Total |
36,403,706 |
17,888,325 |
||||||
|
|
|
|
AS OF DECEMBER 31, 2021 |
AS OF DECEMBER 31, 2020 |
|||||||||||||||||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||||||||||||||
Money market funds |
$ | 123,690 | $ | — | $ | — | $ | 123,690 | $ | 36,120 | $ | — | $ | — | $ | 36,120 | ||||||||||||||||
Commercial paper |
$ | 203,628 | $ | — | $ | (21 | ) | $ | 203,607 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Corporate notes and bonds |
80,060 | 2 | (109 | ) | 79,953 | — | — | — | — | |||||||||||||||||||||||
Municipal bonds |
2,000 | — | — | 2,000 | — | — | — | — | ||||||||||||||||||||||||
US government and agency |
193,347 | 1 | (20 | ) | 193,328 | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total cash equivalents and investments |
$ |
602,725 |
$ |
3 |
$ |
(150 |
) |
$ |
602,578 |
$ |
36,120 |
$ |
— |
$ |
— |
$ |
36,120 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Year or Less |
1 Year or Greater |
Total |
||||||||||
Money market funds |
$ | 123,690 | $ | — | $ | 123,690 | ||||||
Commercial paper |
203,607 | — | 203,607 | |||||||||
Corporate notes and bonds |
14,818 | 65,135 | 79,953 | |||||||||
Municipal bonds |
2,000 | — | 2,000 | |||||||||
US government and agency |
178,353 | 14,975 | 193,328 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ |
522,468 |
$ |
80,110 |
$ |
602,578 |
||||||
|
|
|
|
|
|
Fair Value Measured as of December 31, 2021: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds (1) |
$ | 123,690 | $ | — | $ | — | $ | 123,690 | ||||||||
Commercial paper |
— | 125,335 | — | 125,335 | ||||||||||||
US government and agency |
— | 150,000 | — | 150,000 | ||||||||||||
Total cash equivalents |
123,690 | 275,335 | 399,025 | |||||||||||||
Short-term investments: |
||||||||||||||||
Commercial paper |
— | 78,272 | — | 78,272 | ||||||||||||
Corporate notes and bonds |
— | 14,818 | — | 14,818 | ||||||||||||
Municipal bonds |
2,000 | 2,000 | ||||||||||||||
US government and agency |
— | 28,353 | — | 28,353 | ||||||||||||
Total short-term investments |
— | 123,443 | — | 123,443 | ||||||||||||
Long-term investments |
||||||||||||||||
Corporate notes and bonds |
— | 65,135 | — | 65,135 | ||||||||||||
US government and agency |
— | 14,975 | — | 14,975 | ||||||||||||
Total long-term investments |
— | 80,110 | — | 80,110 | ||||||||||||
Total Assets |
$ | 123,690 | $ | 478,888 | — | $ | 602,578 | |||||||||
Liabilities: |
||||||||||||||||
Public warrants |
$ | 33,962 | $ | — | $ | — | $ | 33,962 |
Fair Value Measured as of December 31, 2020: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Cash and cash equivalents (1) |
$ | 36,120 | $ | — | $ | — | $ | 36,120 | ||||||||
|
|
|
|
|
|
|
|
(1) | Includes money market funds associated with the Company’s overnight investment sweep account. |
December 3, 2021 |
||||
Exercise price |
$ | 11.50 | ||
Stock price |
$ | 18.78 | ||
Volatility |
74.10 | % | ||
Term |
4.83 | |||
Risk-free rate |
1.10 | % | ||
Dividend yield |
— | % |
Private placement warrants |
||||
Fair value as of December 31, 2020 |
$ |
— |
||
Assumed as part of the Business Combination |
24,412 | |||
Change in valuation inputs |
27,523 | |||
Exercise of private placement warrants |
(51,935 | ) | ||
|
|
|||
Fair Value as of December 31, 2021 |
$ |
— |
||
|
|
2021 |
2020 |
|||||||
Computer equipment and acquired computer software |
$ | 840 | $ | 364 | ||||
Machinery, equipment, furniture and fixtures |
5,497 | 2,974 | ||||||
Leasehold improvements |
827 | 736 | ||||||
Quantum computing systems |
15,151 | 9,617 | ||||||
|
|
|
|
|||||
Gross property and equipment |
22,315 |
13,691 |
||||||
Less: accumulated depreciation |
(3,445 | ) | (1,703 | ) | ||||
|
|
|
|
|||||
Net property and equipment |
$ |
18,870 |
$ |
11,988 |
||||
|
|
|
|
December 31, 2021 |
||||||||||||||
Weighted Average Useful Life (Years) |
Gross Carrying Amount |
Accumulated Amortization |
Net Amount |
|||||||||||
Patents |
20 | $ | 3,555 | $ | (51 | ) | $ | 3,504 | ||||||
Trademark |
Indefinite | 82 | — | 82 | ||||||||||
Website and other |
10-20 |
51 | (11 | ) | 40 | |||||||||
Internally developed software |
3 | 3,297 | (1,082 | ) | 2,215 | |||||||||
|
|
|
|
|
|
|||||||||
Total |
$ |
6,985 |
$ |
(1,144 |
) |
$ |
5,841 |
|||||||
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||
Weighted Average Useful Life (Years) |
Gross Carrying Amount |
Accumulated Amortization |
Net Amount |
|||||||||||
Patents |
20 | $ | 1,307 | $ | (10 | ) | $ | 1,297 | ||||||
Trademark |
Indefinite | 60 | — | 60 | ||||||||||
Website and other |
10-20 |
51 | (7 | ) | 44 | |||||||||
Internally developed software |
3 | 1,608 | (322 | ) | 1,286 | |||||||||
|
|
|
|
|
|
|||||||||
Total |
$ |
3,026 |
$ |
(339 |
) |
$ |
2,687 |
|||||||
|
|
|
|
|
|
Year ending December 31, |
||||
2022 |
$ | 1,116 | ||
2023 |
885 | |||
2024 |
401 | |||
2025 |
62 | |||
2026 |
63 | |||
Thereafter |
3,232 | |||
|
|
|||
Total |
$ |
5,759 |
• | acceleration of the issuance of common stock as if exercised through the License Agreement, |
• | additional consideration equal to the consideration which a holder of one-half of one percent (0.5%) of the common stock of the Company, on a fully-diluted basis, would have received in the sale to the extent it exceeds the amount UMD and Duke shall be entitled to as a result of ownership at the time of sale. |
2021 |
2020 |
|||||||
Accrued salaries and other payroll liabilities |
$ | 1,025 | $ | 46 | ||||
Accrued accounting and tax liabilities |
700 | 115 | ||||||
Accrued expenses - other |
922 | 447 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ |
2,647 |
$ |
608 |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Stock options outstanding |
22,133,210 | 21,863,368 | ||||||
Warrants to acquire common stock |
8,301,202 | 8,301,202 | ||||||
Public warrants outstanding |
5,233,018 | — | ||||||
Shares available for future grant |
31,589,000 | 7,294,016 | ||||||
Total common stock reserved |
67,256,430 | 37,458,586 | ||||||
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption; and |
• | if, and only if, the closing price of common stock equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
• |
in whole and not in part; |
• |
at $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 on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the fair |
market value (as defined within the warrant agreement) of the common stock except as otherwise described within the warrant agreement; and upon a minimum of 30 days’ prior written notice of redemption; and |
• | if, and only if, the closing price of common stock equals or exceeds $10.00 per public share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends notice of redemption to the warrant holders. |
2021 |
2020 |
|||||||
Risk-free interest rate |
0.96 | % | 0.9 | % | ||||
Expected term (in years) |
6.26 | 6.46 | ||||||
Expected volatility |
77.04 | % | 72.50 | % | ||||
Dividend yield |
— | % | — | % |
Number of Option Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value (in millions) |
|||||||||||||
Outstanding as of December 31, 2019 |
13,933,956 | $ | 0.13 | 8.80 | $ | 5.00 | ||||||||||
Granted |
9,875,293 | 0.61 | ||||||||||||||
Exercised |
(1,726,471 | ) | 0.17 | |||||||||||||
Cancelled/ Forfeited |
(219,410 | ) | 0.13 | |||||||||||||
Outstanding as of December 31, 2020 |
21,863,368 | 0.34 | 8.67 | 44.80 | ||||||||||||
Granted |
6,492,540 | 2.39 | ||||||||||||||
Exercised |
(3,378,782 | ) | 1.62 | |||||||||||||
Cancelled/ Forfeited |
(2,843,916 | ) | 1.19 | |||||||||||||
Outstanding as of December 31, 2021 |
22,133,210 | 0.64 | 7.84 | 377.58 | ||||||||||||
Exercisable as of December 31, 2021 |
8,726,504 | $ | 0.29 | 7.27 | $ | 151.91 | ||||||||||
Exercisable and expected to vest at December 31, 2021 |
22,133,210 | $ | 0.64 | 7.84 | $ | 377.58 |
Number of Unvested Restricted Shares |
Weighted- Average Grant Date Fair Value per Share |
|||||||
Unvested Balance as of December 31, 2019 |
1,771,198 | 0.10 | ||||||
Vested |
(1,771,198 | ) | 0.10 | |||||
|
|
|
|
|||||
Unvested Balance as of December 31, 2020 |
— | $ | — | |||||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cost of revenue |
$ | 62 | $ | — | ||||
Research and development |
2,841 | 716 | ||||||
Sales and marketing |
67 | — | ||||||
General and administrative |
4,778 | 508 | ||||||
|
|
|
|
|||||
Stock-based compensation, net of amounts capitalized |
7,748 | 1,224 | ||||||
Capitalized stock-based compensation—Intangibles and fixed assets |
275 | 110 | ||||||
Capitalized stock-based compensation—Other current assets |
— | 45 | ||||||
|
|
|
|
|||||
Total stock-based compensation |
$ | 8,023 | $ | 1,379 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
U.S federal statutory income tax rate |
21.0 |
% |
21.0 | % | ||||
State and local income taxes |
1.2 |
% |
6.3 | % | ||||
R&D tax credits |
1.7 |
% |
7.2 | % | ||||
Stock-based compensation |
-0.6 |
% |
-0.7 | % | ||||
Warrant expense |
-12.5 |
% |
— |
|||||
Change in tax rates |
-2.1 | % | — | |||||
Valuation allowance |
-8.1 |
% |
-33.8 | % | ||||
Other |
-0.6 |
% |
— | |||||
Effective tax rate |
0.0 |
% |
0.0 | % |
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Accrued bonus |
310 |
— |
||||||
Deferred revenue |
281 |
— |
||||||
Non-qualified stock compensation |
1,002 |
124 |
||||||
Accrued expenses |
119 |
— |
||||||
Warrant expenses |
138 |
— | ||||||
Depreciation and amortization |
170 | — | ||||||
Other |
809 |
8 | ||||||
Lease liabilities |
1,023 |
1,176 | ||||||
R&D credit carryforwards |
3,781 |
1,733 | ||||||
Net operating loss carryforwards |
14,148 |
13,516 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
21,781 |
16,557 |
||||||
Valuation allowance |
(20,388 |
) | (11,747 | ) | ||||
|
|
|
|
|||||
Total deferred tax assets net of valuation allowance |
1,393 |
4,810 |
||||||
|
|
|
|
|
|
|
|
|
Deferred tax liabilities: |
||||||||
Depreciation and amortization |
— |
(173 | ) | |||||
Right of use assets |
(979 |
) |
(1,135 | ) | ||||
Capitalized patents |
— |
(181 | ) | |||||
Internally developed software |
— |
(354 | ) | |||||
Capitalized R&D costs |
(414 |
) |
(2,967 | ) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
(1,393 |
) |
(4,810 |
) | ||||
|
|
|
|
|||||
Net deferred tax assets (liabilities) |
— |
— |
||||||
|
|
|
|
2021 |
2020 |
|||||||
Operating lease cost (1) |
||||||||
Fixed lease cost |
$ | 763 | $ | 278 | ||||
Short-term cost |
13 | 35 | ||||||
|
|
|
|
|||||
Total operating lease cost |
$ | 776 | $ | 313 | ||||
|
|
|
|
(1) | The lease costs are reflected in the consolidated statements of operations as follows (in thousands): |
Years Ended December 31, |
||||||||
2021 | 2020 | |||||||
Cost of revenue |
$ |
45 | $ |
— | ||||
Research and development |
613 | 263 | ||||||
Sales and marketing |
8 | — | ||||||
General and administrative |
110 | 50 | ||||||
Total |
$ |
776 | $ |
313 |
Year Ended December 31 |
||||||||
2021 |
2020 |
|||||||
Cash payments included in the measurement of operating lease liabilities |
$ |
561 | $ |
178 | ||||
Operating lease right-of-use assets recognized in exchange for new operating lease obligations |
— | 3,565 |
Amount |
||||
Year Ending December 31, |
||||
2022 |
$ |
644 | ||
2023 |
671 | |||
2024 |
750 | |||
2025 |
772 | |||
2026 |
796 | |||
Thereafter |
3,351 | |||
|
|
|||
Total lease payments |
6,984 | |||
Less: imputed interest |
(2,773 | ) | ||
|
|
|||
Present value of operating lease liabilities |
$ |
4,211 | ||
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Revenue |
1,179 | — | ||||||
Cost of Revenue |
35 | — | ||||||
Research and Development |
1,949 | 247 | ||||||
Sales and Marketing |
8 | — | ||||||
General and administrative |
218 | 35 |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Prepaid expenses and other current assets |
612 | 1,013 | ||||||
Operating lease right-of-use |
4,032 | 4,296 | ||||||
Other noncurrent assets |
1,845 | 2,365 | ||||||
Liabilities |
||||||||
Accounts payable |
54 | 5 | ||||||
Current operating lease liabilities |
568 | 495 | ||||||
Unearned revenue |
2,821 | — | ||||||
Non-current operating lease liabilities |
3,643 | 3,776 |
Exhibit 4.3
DESCRIPTION OF SECURITIES
The following is a summary of the rights of our common stock and preferred stock. This summary is qualified by reference to the complete text of i) our second amended and restated certificate of incorporation (certificate of incorporation) ii) bylaws and iii) Warrant Agreement (as defined below) which are filed as exhibits to this Annual Report on Form 10-K.
General
Our certificate of incorporation authorizes us to issue up to 1,000,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of preferred stock, par value $0.0001 per share.
Common Stock
Voting Rights
Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, each holders of common stock possess all voting power for the election of our directors and all other matters requiring stockholder action. Holders of common stock are entitled to one vote per share on matters to be voted on by stockholders.
Dividend Rights
Subject to preferences that may apply to any then-outstanding preferred stock, the holders of common stock may be entitled to receive dividends out of legally available funds if the board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the board of directors may determine. We do not anticipate paying any cash dividends in the foreseeable future.
Liquidation Rights
In the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of common stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of the holders of the preferred stock, if any, have been satisfied.
Preemptive or Similar Rights
Our stockholders have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to our common stock.
Preferred Stock
Under our certificate of incorporation, our board of directors may, without further action by our stockholders, fix the rights, preferences, privileges and restrictions of up to an aggregate of 20,000,000 shares of preferred stock in one or more series and authorize their issuance. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. Any issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders would receive dividend payments and payments on liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deterring or preventing a change of control or other corporate action. We have no present plans to issue any shares of preferred stock.
Transfers
The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes or series owned by such stockholders in any manner not prohibited by the DGCL.
Warrants
Public Warrants
Each outstanding Public Warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share. The Public Warrants will expire five years after the completion of the business combination (the Business Combination), at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any shares of common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No Public Warrant will be exercisable and we will not be obligated to issue shares of common stock upon exercise of a Public Warrant unless the common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Public Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Public Warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In the event that a registration statement is not effective for the exercised Public Warrants, the purchaser of a Public Unit containing such Public Warrant will have paid the full purchase price for the unit solely for the share of common stock underlying such Public Unit.
We filed with the U.S. Securities and Exchange Commission (the SEC) and have an effective registration statement for covering the issuance, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants, until the expiration of the Public Warrants. Notwithstanding the above, if the common stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per share of the common stock equals or exceeds $18.00. Once the Public Warrants become exercisable, we may call the Public Warrants for redemption:
| in whole and not in part; |
| at a price of $0.01 per Public Warrant; |
| upon not less than 30 days prior written notice of redemption to each warrant holder; and |
| if, and only if, the reported last sale price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrant holders. |
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.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the Public Warrants, each warrant holder will be entitled to exercise its Public Warrant prior to the scheduled redemption date. However, the price of the common stock may fall below the $18.00 redemption trigger price as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption of warrants when the price per share of the common stock equals or exceeds $10.00. Once the Public Warrants become exercisable, we may call the Public Warrants for redemption:
| in whole and not in part; |
| at $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 on a cashless basis prior to redemption and receive that number of shares determined by reference to the table in the Warrant Agreement, as described under the heading Redemption, based on the redemption date and the fair market value (as defined below) of the common stock except as otherwise described below; and upon a minimum of 30 days prior written notice of redemption; and |
| if, and only if, the closing price of the common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders. |
We can redeem the Public Warrants when the shares of common stock are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with fair value (in the form of common stock). If we choose to redeem the Public Warrants when the common stock is trading at a price below the exercise price of the Public Warrants, this could result in the warrant holders receiving fewer common stock than they would have received if they had chosen to wait to exercise their warrants for common stock if and when such shares of common stock were trading at a price higher than the exercise price of $11.50.
No fractional shares of common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of common stock to be issued to the holder.
Redemption Procedures and Cashless Exercise. If we call the Public Warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise its Public Warrant to do so on a cashless basis. In determining whether to require all holders to exercise their warrants on a cashless basis, our management will consider, among other factors, our cash position, the number of Public Warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of our Public Warrants. If our management takes advantage of this option, all holders of Public Warrants would pay the exercise price by surrendering their Public Warrants for that number of shares of common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the Fair Market Value (defined below) by (y) the fair market value and (B) 0.361. The Fair Market Value shall mean the average reported last sale price of the 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 Public Warrants. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of common stock to be received upon exercise of the
Public Warrants, including the fair market value in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the Public Warrants following the consummation of the Business Combination. If we call our Public Warrants for redemption and our management does not take advantage of this option, the Sponsor and its permitted transferees would still be entitled to exercise their Private Warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their Public Warrants on a cashless basis, as described in more detail below.
A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such persons affiliates), to the warrant agents actual knowledge, would beneficially own in excess of 4.9% or 9.8% (as specified by the holder) of the common stock outstanding immediately after giving effect to such exercise.
Anti-Dilution Adjustments. If the number of outstanding shares of common stock is increased by a stock dividend payable in shares of common stock, or by a split-up of shares of common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of common stock issuable on exercise of each Public Warrant will be increased in proportion to such increase in the outstanding shares of common stock. A rights offering to holders of common stock entitling holders to purchase shares of common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of Class A Stock equal to the product of (a) the number of shares of common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for common stock) multiplied by (b) 1 minus the quotient of (x) the price per share of common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for common stock, in determining the price payable for common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of common stock as reported during the 10 trading day period ending on the trading day prior to the first date on which the shares of common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
If the number of outstanding shares of our common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of common stock issuable on exercise of each Public Warrant will be decreased in proportion to such decrease in outstanding shares of common stock.
Whenever the number of shares of common stock purchasable upon the exercise of the Public Warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of common stock purchasable upon the exercise of the Public Warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of common stock so purchasable immediately thereafter.
In case of any reclassification or reorganization of the outstanding shares of common stock (other than those described above or that solely affects the par value of such shares of common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the Public Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Public Warrants and in lieu of the shares of our common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Public Warrants would have received if such holder had exercised their Public Warrants immediately prior to such event. If less than 70% of the consideration received by the holders of common stock in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the Public Warrant properly exercises the Public Warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the Continental Warrant Agreement based on the Black-Scholes value (as defined in the Continental Warrant Agreement) of the Public Warrant.
The Public Warrants have been registered form under the Continental Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The Continental Warrant Agreement provides that the terms of the Public Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, 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 Warrant.
The Public Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of Public Warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the Public Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No fractional shares will be issued upon exercise of the Public Warrants. If, upon exercise of the Public Warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number of shares of common stock to be issued to the warrant holder.
Anti-Takeover Provisions
Section 203 of the Delaware General Corporation Law
We are subject to Section 203 of the DGCL, which prohibits a publicly held Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
| before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
| upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, those shares owned (1) by persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
In general, Section 203 defines a business combination to include the following:
| any merger or consolidation involving the corporation and the interested stockholder; |
| any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
| subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or |
| the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation. |
In general, Section 203 defines an interested stockholder as an entity or person who, together with the persons affiliates and associates, beneficially owns or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
A Delaware corporation may opt out of these provisions with an express provision in its original certificate of incorporation or an express provision in its amended and restated certificate of incorporation or amended and restated bylaws resulting from a stockholders amendment approved by at least a majority of the outstanding voting shares. We have not opted out of these provisions. As a result, mergers or other takeover or change in control attempts of us may be discouraged or prevented.
Certificate of Incorporation and Bylaws
Among other things, our Certificate of Incorporation and Bylaws:
permit our board of directors to issue up to 20,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate, which may include the right to approve an acquisition or other change of control; |
provide that the authorized number of directors may be changed only by resolution of our board of directors; |
provide that, subject to the rights of any series of preferred stock to elect directors, directors may only be removed with cause, which removal may be effected, subject to any limitation imposed by law, by the holders of at least 66 2/3% of the voting power of all of our then-outstanding shares of the capital stock entitled to vote generally at an election of directors; |
provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent or electronic transmission; |
provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholders notice; |
provide that special meetings of our stockholders may be called by the chairperson of our board of directors, our Chief Executive Officer, or by the board of directors pursuant to a resolution adopted by the majority of the Board; and |
not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose. |
The amendment of any of these provisions would require approval by the holders of at least 66 2/3% of the voting power of all of our then-outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class.
The combination of these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.
These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock.
The Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for actions or proceedings brought under Delaware statutory or common law: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a breach of fiduciary duty owed by any of our current or former directors, officers or stockholders, to us or our stockholders; (3) any action asserting a claim against us arising under the Delaware General Corporation Law; (4) any action regarding the certificate of incorporation or our Bylaws (as either may be amended from time to time); (5) any action as to which the Delaware General Corporate Law confers jurisdiction to the Court of Chancery of the State of Delaware; (6) any action asserting a claim against us that is governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court having personal jurisdiction over the indispensable parties named as defendants. The Certificate of Incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision of our Certificate of Incorporation will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder and therefore bring a claim in another appropriate forum. Additionally, we cannot be certain that a court will decide that this provision is either applicable or enforceable, and if a court were to find the choice of forum provision contained in the certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Exhibit 10.18
Form of RSU Agreement (Sell to Cover)
IONQ, INC.
RSU AWARD GRANT NOTICE
(2021 EQUITY INCENTIVE PLAN)
IonQ, Inc. (the Company) has awarded to you (the Participant) the number of restricted stock units specified and on the terms set forth below in consideration of your services (the RSU Award). Your RSU Award is subject to all of the terms and conditions as set forth herein and in the IonQ, Inc. 2021 Equity Incentive Plan (the Plan) and the Award Agreement (the Award Agreement), which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Award Agreement shall have the meanings set forth in the Plan or the Award Agreement.
Participant:
Date of Grant:
Vesting Commencement Date:
Number of Restricted Stock Units:
Vesting Schedule: | [ ] | |
Issuance Schedule: | One share of Common Stock will be issued at the time set forth in Section 5 of the Award Agreement for each restricted stock unit which vests. | |
Participant Acknowledgements: |
By the Participants signature below or by electronic acceptance or authentication in a form authorized by the Company, the Participant understands and agrees that: |
| The RSU Award is governed by this Restricted Stock Unit Grant Notice, and the provisions of the Plan and the Award Agreement, all of which are made a part of this document. Unless otherwise provided in the Plan, this Restricted Stock Unit Grant Notice and the Award Agreement (together, the Agreement) may not be modified, amended or revised except in a writing signed by the Participant and a duly authorized officer of the Company. |
| To the fullest extent permitted under the Plan and applicable law, any Withholding Taxes (as defined in the Award Agreement) applicable to the RSU Award will be satisfied through the sale of a number of the shares of Common Stock issuable in settlement of the RSU Award as determined in accordance with Section 4 of the Award Agreement and the remittance of the cash proceeds to the Company. Under the Agreement, the Company or, if different, the Participants employer is authorized and directed by the Participant to make payment from the cash proceeds of this sale directly to the appropriate tax or social security authorities in an amount equal to the taxes required to be remitted. The Participant acknowledges and agrees that, as a result of the Participants authorization, the Company will have the authority to administer the Mandatory Sell to Cover (as defined in the Award Agreement) in connection with the Participants receipt of this RSU Award. |
| You acknowledge that you are familiar with and agree to continued compliance with the mutual promises and covenants contained in the Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement that you were required, as a condition of your employment by the Company, to execute. |
| The Agreement sets forth the entire understanding between the Participant and the Company regarding the acquisition of Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of (i) other equity awards previously granted to you, and (ii) any written employment agreement, offer letter, severance agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this RSU Award. |
By accepting this RSU Award, the Participant acknowledges having received and read the Restricted Stock Unit Grant Notice, the Award Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. The Participant consents to receive Plan and related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
IONQ, INC.: | PARTICIPANT: | |||||||
By: |
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Signature | Signature | |||||||
Title: |
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Date: |
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Date: |
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ATTACHMENTS: Award Agreement, 2021 Equity Incentive Plan
ATTACHMENT I
IONQ, INC.
AWARD AGREEMENT
(2021 EQUITY INCENTIVE PLAN)
As reflected by your RSU Award Grant Notice (Grant Notice), IonQ, Inc. (the Company) has granted you a RSU Award under the IonQ, Inc. 2021 Equity Incentive Plan (the Plan) for the number of restricted stock units as indicated in your Grant Notice (the RSU Award). The terms of your RSU Award as specified in this Award Agreement for your RSU Award (this Award Agreement) and the Grant Notice constitute your Agreement. Defined terms not explicitly defined in this Award Agreement but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or Plan, as applicable.
The general terms applicable to your RSU Award are as follows:
1. GOVERNING PLAN DOCUMENT. Your RSU Award is subject to all the provisions of the Plan, including but not limited to the provisions in:
(a) Section 6 of the Plan regarding the impact of a Capitalization Adjustment, dissolution, liquidation, or Corporate Transaction on your RSU Award;
(b) Section 9(e) of the Plan regarding the Companys retained rights to terminate your Continuous Service notwithstanding the grant of the RSU Award; and
(c) Section 8 of the Plan regarding the tax consequences of your RSU Award.
Your RSU Award is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the Agreement and the provisions of the Plan, the provisions of the Plan shall control.
2. GRANT OF THE RSU AWARD. This RSU Award represents your right to be issued on a future date the number of shares of the Companys Common Stock that is equal to the number of restricted stock units indicated in the Grant Notice as modified to reflect any Capitalization Adjustment and subject to your satisfaction of the vesting conditions set forth therein (the Restricted Stock Units). Any additional Restricted Stock Units that become subject to the RSU Award pursuant to Capitalization Adjustments as set forth in the Plan and the provisions of Section 3 below, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units covered by your RSU Award.
3. NO STOCKHOLDER RIGHTS. Unless and until such time as shares of Common Stock are issued in settlement of vested RSUs, you will have no ownership of the shares allocated to the RSUs and will have no right to vote such shares. You shall receive no benefit or adjustment to this RSU Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment; provided, however, that this sentence will not apply with respect to any shares of Common Stock that are delivered to you in connection with your RSU Award after such shares have been delivered to you.
4. WITHHOLDING OBLIGATION.
(a) You acknowledge that, regardless of any action taken by the Company, or if different, the Affiliate employing or engaging you (the Employer), the ultimate liability for all income tax (including U.S. federal, state, and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (the Tax-Related Items)
is and remains your responsibility and may exceed the amount, if any, actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSU Award, including, but not limited to, the grant of the RSU Award, the vesting of the RSU Award, the issuance of shares in settlement of vesting of the RSU Award, the subsequent sale of any shares of Common Stock acquired pursuant to the RSU Award and the receipt of any dividends or dividend equivalent; and (ii) do not commit to and are under no obligation to reduce or eliminate your liability for Tax-Related Items. Further, if you become subject to taxation in more than one country, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one country.
(b) On or before the time you receive a distribution of the shares underlying your Restricted Stock Units, and at any other time as reasonably requested by the Company in accordance with applicable law, you agree to make adequate provision for any sums required to satisfy the withholding obligations of the Company, the Employer or any Affiliate in connection with any Tax-Related Items that arise in connection with the RSU Award (the Withholding Taxes). The Company shall arrange a mandatory sale (on your behalf pursuant to your authorization under this section and without further consent) of the shares of Common Stock issued in settlement upon the vesting of your Restricted Stock Units in an amount necessary to satisfy the Withholding Taxes and shall satisfy the Withholding Taxes by withholding from the proceeds of such sale (the Mandatory Sell to Cover). You hereby acknowledge and agree that the Company shall have the authority to administer the Mandatory Sell to Cover arrangement in its sole discretion with a registered broker-dealer that is a member of the Financial Industry Regulatory Authority as the Company may select as the agent (the Agent) who will sell on the open market at the then prevailing market price(s), as soon as practicable on or after each date on which your Restricted Stock Units vest and the shares underlying such Restricted Stock Units are distributed, the number (rounded up to the next whole number) of the shares of Common Stock to be delivered to you in connection with the vesting and settlement of the Restricted Stock Units sufficient to generate proceeds to cover (i) the Withholding Taxes that you are required to pay pursuant to the Plan and this Agreement as a result of the vesting and settlement of the Restricted Stock Units and (ii) all applicable fees and commissions due to, or required to be collected by, the Agent with respect thereto any remaining funds shall be remitted to you.
(c) If, for any reason, such Mandatory Sell to Cover does not result in sufficient proceeds to satisfy the Withholding Taxes, or if such Mandatory Sell to Cover is not permitted by applicable law, the Company or an Affiliate may, in its sole discretion, satisfy all or any portion of the Withholding Taxes relating to the RSU Award by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company or the Employer; (ii) causing you to tender a cash payment (which may be in the form of a check, electronic wire transfer or other method permitted by the Company); or (iii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with your Restricted Stock Units with a fair market value (measured as of the date shares of Common Stock are issued to you) equal to the amount of such Withholding Taxes; provided, however, that shares of Common Stock shall not be withheld with a value exceeding the maximum amount of tax required to be withheld by applicable law (or such lesser amount as may be necessary to avoid classification of the RSU Award as a liability for financial accounting purposes); and to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or Compensation Committee of the Board.
(d) Unless the tax withholding obligations of the Company and/or any Affiliate with respect to the Tax-Related Items are satisfied, the Company shall have no obligation to deliver to you any Common Stock.
(e) In the event the Companys obligation to withhold arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Tax-Related Items was greater than the amount withheld by the Company or your Employer, you agree to indemnify and hold the Company and your Employer harmless from any failure by the Company or your Employer to withhold the proper amount.
(f) You acknowledge and agree that, as a result of your authorization under this section and without further consent, the Company will have the authority to administer the Mandatory Sell to Cover pursuant to the terms of the RSU Award.
(g) The Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts, or other applicable withholding rates, including maximum applicable rates in your jurisdiction(s). If the maximum rate is used, any over-withheld amount may be refunded to you in cash by the Company or Employer (with no entitlement to the equivalent in shares of Common Stock), or if not refunded, you may seek a refund from the local tax authorities. You must pay to the Company and/or the Employer any amount of Tax-Related Items that the Company and/or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described.
5. DATE OF ISSUANCE.
(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner. Subject to the satisfaction of the Tax-Related Items set forth in Section 4 of this Award Agreement, in the event one or more Restricted Stock Units vests, the Company shall issue to you one (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any different provisions in the Grant Notice). Each issuance date determined by this paragraph is referred to as an Original Issuance Date.
(b) Notwithstanding the foregoing, if (i) selling shares of the Common Stock in the public market on the Original Issuance Date to satisfy your tax withholding obligation in accordance with Section 4 of this Award Agreement is prohibited for any reason, and (ii) the Company elects not to instead satisfy its tax withholding obligations by withholding shares from your distribution, then such shares shall not be delivered on such Original Issuance Date and shall instead be delivered to you on the earliest of: (1) the first date that you are not prohibited from selling shares of the Common Stock in the open market, or (2) such earlier date that the Company elects to satisfy its tax withholding obligation by withholding shares from your distribution; provided, however, that notwithstanding the foregoing, in no event will the shares be delivered to you any later than: (A) December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or (B) if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Award are no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulations Section 1.409A-1(d).
(c) In addition and notwithstanding the foregoing, no shares of Common Stock issuable to you under this Section 5 as a result of the vesting of one or more Restricted Stock Units will be delivered to you until any filings that may be required pursuant to the Hart-Scott-Rodino (HSR) Act in connection with the issuance of such shares have been filed and any required waiting period under the HSR Act has expired or been terminated (any such filings and/or waiting period required pursuant to HSR, the HSR Requirements). If the HSR Requirements apply to the issuance of any shares of Common Stock issuable to you under this Section 5 upon vesting of one or more Restricted Stock Units, such shares of Common Stock will not be issued on the Original Issuance Date and will instead be issued on the first business day on or following the date when all such HSR Requirements are satisfied and when you are permitted to sell shares of Common Stock on an established stock exchange or stock market, as determined by the Company in accordance with the Companys then-effective policy on trading in Company securities. Notwithstanding the foregoing, the issuance date for any shares of Common Stock delayed under this Section 5(c) shall in no event be later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), unless a later issuance date is permitted without incurring adverse tax consequences under Section 409A of the Code or other applicable law.
(d) The form of delivery (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
6. TRANSFERABILITY. Except as otherwise provided in the Plan, your RSU Award is not transferable, except by will or by the applicable laws of descent and distribution.
7. CORPORATE TRANSACTION. Your RSU Award is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.
8. NO LIABILITY FOR TAXES. As a condition to accepting the RSU Award, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the RSU Award or other Company compensation and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the RSU Award and have either done so or knowingly and voluntarily declined to do so.
9. SEVERABILITY. If any part of this Award Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Award Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Award Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
10. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Companys Trading Policy.
11. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your RSU Award, including a summary of the applicable federal income tax consequences please see the Prospectus.
Attachment II
2021 EQUITY INCENTIVE PLAN
Exhibit 10.29
Certain identified information marked with [***] has been excluded from the exhibit because it is both not material and is the type that the registrant treats as private or confidential.
AMENDMENT # 5 TO EXCLUSIVE LICENSE AGREEMENT
BETWEEN IONQ, INC. DUKE UNIVERSITY AND UNIVERSITIY OF MARYLAND
This Amendment #5 to the Exclusive License Agreement entered into by and between Duke University, a nonprofit educational and research institution organized under the laws of North Carolina (DUKE) and IonQ, Inc. (Licensee) is effective as of the date of last signature below.
Background: UMD and Licensee executed an Exclusive License Agreement dated effective July 19, 2016 and amended September 22, 2017, October 4, 2018, and April 27, 2021 (collectively Exclusive License Agreement). In connection with the Exclusive License Agreement, DUKE and Licensee executed an Exclusive Option Agreement, effective July 15, 2016, which was amended on December 18, 2020 (Option Agreement). Under the terms and conditions of the Option Agreement, DUKE granted Licensee, and Licensee accepted, an exclusive option during the Option Period (as defined in the Option Agreement) to obtain a worldwide exclusive license, with the right to sublicense, under the Exclusive License Agreement to DUKEs rights in Option IP (the Option). DUKE has disclosed certain Option IP to Licensee and Licensee elects to exercise its Option to license such Option IP by executing this Amendment #5 to the Exclusive License Agreement. To that end, DUKE and Licensee hereby agree that the Exclusive License Agreement is amended as follows:
1. The definition of Licensed Inventions in Section 1.09 is modified to add at the end of the definition: and [***] and the related detailed descriptions.
2. Appendix A to the Exclusive License Agreement shall be replaced with the attached Appendix A.
3. All other terms and conditions of the Exclusive License Agreement shall apply to the Option Intellectual Property (as that term is defined in the Option Agreement) optioned by Licensee pursuant to the Option Agreement and identified in this Amendment as if such intellectual property had been included in the scope of the Exclusive License Agreement as of its Effective Date.
4. Except for the amendments set forth herein, all other terms and conditions of the Exclusive License Agreement remain in full force and effect.
ACCEPTED AND AGREED TO
DUKE UNIVERSITY | IONQ, INC. | |||||||
BY | /s/ Eric F. Wagner, Ph.D., J.D. |
BY | s/ Francisco Castro | |||||
NAME: Eric F. Wagner, Ph.D., J.D. | NAME: Francisco Castro, Ph.D. | |||||||
Title: Director Legal Affairs | Title: Chief IP Counsel | |||||||
Office of Translation & Commercialization | ||||||||
DATE: 9/10/2021 | DATE: 9/10/2021 |
APPENDIX A Duke Patents and IP
[***]
Page 2 of 2
Exhibit 10.30
Certain identified information marked with [***] has been excluded from the exhibit because it is both not material and is the type that the registrant treats as private or confidential.
AMENDMENT #5 TO EXCLUSIVE LICENSE AGREEMENT
BETWEEN IONQ, INC. AND UNIVERSITY OF MARYLAND
This Amendment #5 to the Exclusive License Agreement (Amendment) entered into by and between the University of Maryland (UMD) and ionQ, Inc. (Licensee) is effective as of the date of last signature below.
Background: UMD and Licensee executed an Exclusive License Agreement dated effective July 19, 2016 (Exclusive License Agreement). In connection with the Exclusive License Agreement, UMD and Licensee executed an Exclusive Option Agreement, effective July 19, 2016 (Option Agreement). Under the terms and conditions of the Option Agreement, UMD granted Licensee and Licensee accepted an exclusive option during the Option Period to obtain a worldwide exclusive license, with the right to sublicense, under the Exclusive License Agreement to UMDs rights in Option IP (the Option). UMD has disclosed certain Option IP to Licensee and Licensee elects to exercise its Option to license such Option IP by executing this Amendment #5 to the Exclusive License Agreement. To that end, UMD and Licensee hereby agree that the Exclusive License Agreement is amended as follows:
1. | The definition of Licensed Inventions in Section 1.11 is modified to add at the end of the definition: and [***], and the related detailed descriptions. |
2. | Appendix A to the Exclusive License Agreement is modified by adding the following to the list of Patent Rights: [***]. |
3. | All other terms and conditions of the Exclusive License Agreement shall apply to the Option Intellectual Property (as that term is defined in the Option Agreement) optioned by Licensee pursuant to the Option Agreement and identified in this Amendment as if such intellectual property had been included in the scope of the Exclusive License Agreement as of its Effective Date. |
4. | Except for the amendments set forth herein, all other terms and conditions of the Exclusive License Agreement remain in full force and effect. |
ACCEPTED AND AGREED TO:
UNIVERSITY OF MARYLAND | IONQ, INC. | |||
BY /s/ Kenneth Porter |
BY /s/ Francisco Castro | |||
Kenneth Porter, Director | Francisco Castro, Ph.D., Chief IP Counsel | |||
DATE: 9/24/2021 | DATE: 9/24/2021 |
Exhibit 10.34
IONQ, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
Each member of the Board of Directors (the Board) who is not also serving as an employee of or consultant to IonQ, Inc. (the Company) or any of its subsidiaries (each such member, an Eligible Director) will receive the compensation described in this Non-Employee Director Compensation Policy for his or her Board service following the closing of the transactions contemplated by the Agreement and Plan of Merger, dated March 7, 2021, by and among IonQ Quantum, Inc., a Delaware corporation (formerly known as IonQ, Inc.), dMY Technology Group, Inc. III, a Delaware corporation, and IonQ Trap Acquisition, Inc., a Delaware corporation and a direct, wholly owned subsidiary of dMY (the Effective Date). This policy is effective as of the Effective Date and may be amended at any time in the sole discretion of the Board or a designated committee of the Board. Unless otherwise defined herein, capitalized terms used in this policy will have the meaning given to such terms in the Companys 2021 Equity Incentive Plan or any successor equity incentive plan (the Plan).
I. | Annual Cash Compensation |
Each Eligible Director will be entitled to receive the following annual cash retainers for service on the Board:
Annual Board Service Retainer:
| All Eligible Directors: $30,000 |
| Lead Director (additional retainer): $15,000 |
| Non-Executive Chair (additional retainer): $20,000 |
Annual Committee Chair Service Retainer (in lieu of Annual Committee Member Service Retainer):
| Chair of the Audit Committee: $20,000 |
| Chair of the Compensation Committee: $12,000 |
| Chair of the Nominating and Corporate Governance Committee: $8,000 |
Annual Committee Member Service Retainer:
| Member of the Audit Committee: $8,000 |
| Member of the Compensation Committee: $6,000 |
| Member of the Nominating and Corporate Governance Committee: $4,000 |
The annual cash retainers set forth above will be payable in equal quarterly installments, payable in arrears on the last day of each fiscal quarter (each such date, a Retainer Accrual Date) in which the service occurred, prorated for any partial quarter of service (based on the number of days served in the applicable position divided by the total number of days in the quarter). All annual cash fees are vested upon payment.
II. | Election to Receive Shares of Common Stock in Lieu of Cash Retainer |
A. | Retainer Grant. Each Eligible Director may elect to convert all of his or her cash compensation under Section I for the first calendar quarter that commences after the Effective Date and any subsequent calendar quarter into an RSU Award (each, a Retainer Grant) in accordance with this Section II(A) (such election, a Retainer Grant Election). If an Eligible Director timely makes a Retainer Grant Election pursuant to Section II(B) below, on the first business day following the applicable Retainer Accrual Date to which the Retainer Grant Election applies, and without any further action by the Board or designated committee of the Board, such Eligible Director automatically will be |
granted an RSU Award covering a number of shares of common stock equal to (a) the aggregate amount of cash compensation otherwise payable to such Eligible Director on the Retainer Accrual Date to which the Retainer Grant Election applies divided by (b) the closing sales price per share of the common stock on the applicable Retainer Accrual Date (or, if such date is not a business day, on the first business day thereafter), rounded down to the nearest whole share. Each Retainer Grant will be fully vested on the applicable grant date. |
B. | Election Mechanics. Each Retainer Grant Election must be submitted to the Companys Chief Financial Officer (or such other individual as the Company designates) in writing at least 20 business days in advance of the applicable Retainer Accrual Date, and subject to any other conditions specified by the Board or designated committee of the Board. An Eligible Director may only make a Retainer Grant Election during a period in which the Company is not in a quarterly or special blackout period and the Eligible Director is not aware of any material non-public information. Once a Retainer Grant Election is properly submitted, it will be in effect for the next Retainer Accrual Date and will remain in effect for successive Retainer Accrual Dates unless and until the Eligible Director revokes it in accordance with Section II(C) below. An Eligible Director who fails to make a timely Retainer Grant Election will not receive a Retainer Grant and instead will receive the cash compensation set forth under Section I. |
C. | Revocation Mechanics. The revocation of any Retainer Grant Election must be submitted to the Companys Chief Financial Officer (or such other individual as the Company designates) in writing at least 20 business days in advance of the applicable Retainer Accrual Date, and subject to any other conditions specified by the Board or designated committee of the Board. An Eligible Director may only revoke a Retainer Grant Election during a period in which the Company is not in a quarterly or special blackout period and the Eligible Director is not aware of any material non-public information. Once the revocation of the Retainer Grant Election is properly submitted, it will be in effect for the next Retainer Accrual Date and will remain in effect for successive Retainer Accrual Dates unless and until the Eligible Director makes a new Retainer Grant Election in accordance with Section (II)(B). |
III. | Equity Compensation |
All grants of equity awards to Eligible Directors pursuant to this policy will be automatic and nondiscretionary (without the need for any additional corporate action by the Board or designated committee of the Board) and will be made in accordance with the following provisions:
A. | Initial Grant: For each Eligible Director who is first elected or appointed to the Board following the Effective Date, on the date of such Eligible Directors initial election or appointment to the Board (or, if such date is not a market trading day, the first market trading day thereafter), the Eligible Director will be granted a restricted stock unit award (RSU Award) and an option to purchase shares of common stock (Stock Option Award) with an aggregate Fair Market Value as of the grant date equal to $400,000 (the Initial Grant), with such value split equally between the RSU Award and Stock Option Award. The Initial Grant will vest over a three-year period, with one-third of the Initial Grant vesting on each anniversary of the grant date, such that the Initial Grant is fully vested on the third anniversary of the date of grant, subject to the Eligible Directors continued service as a member of the Board through each such vesting date. |
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B. | Annual Grant: On the first business day following each annual stockholder meeting of the Company (each, an Annual Meeting) held after the Effective Date, each Eligible Director who continues to serve as a non-employee member of the Board following such Annual Meeting (excluding any Eligible Director who is first appointed or elected by the Board at the Annual Meeting) will be granted an RSU Award and an Stock Option Award with an aggregate Fair Market Value as of the grant date equal to $200,000 (the Annual Grant), with such value split equally between the RSU Award and Stock Option Award. The Annual Grant will vest in full on the earlier of (i) the date of the following years Annual Meeting (or the date immediately prior to the next Annual Meeting if the Non-Employee Directors service as a director ends at such Annual Meeting due to the directors failure to be re-elected or the director not standing for re-election), or (ii) the one-year anniversary measured from the date of grant, subject in all cases to the Eligible Directors continued service as a member of the Board through such vesting date. With respect to an Eligible Director who, following the Effective Date, was first elected or appointed to the Board on a date other than the date of the Annual Meeting, upon the first Annual Meeting following such Eligible Directors first joining the Board, such Eligible Directors first Annual Grant will be pro-rated to reflect the time between such Eligible Directors election or appointment date and the date of such first Annual Meeting. |
C. | Calculation of RSU Awards and Option Awards. The number of shares subject to each RSU Award granted pursuant to the Initial Grant or Annual Grant shall be the total RSU Award value, divided by the average closing market price of our common stock over the 22 trading days ending the business day before the date of grant. The number of shares subject to each Option Award granted pursuant to the Initial Grant or Annual Grant shall be determined using a Black-Scholes option pricing model based on the average closing market price of our common stock over the 22 trading days ending the business day before the date of grant. |
D. | Settlement of RSUs: The common stock to be issued upon settlement of vested RSUs under Initial Grant and Annual Grant will be delivered on the applicable vesting date, or as soon as practicable thereafter, subject to the terms and conditions of the applicable form of RSU grant notice and agreement approved by the Board, provided, that such common stock shall be delivered no later than the date that is the 15th day of the third calendar month of the year following the year in which such shares are no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulations Section 1.409A-1(d). |
E. | Acceleration: Notwithstanding the foregoing vesting schedules and subject to the Eligible Directors Continuous Service (as defined in the Plan), through the closing of a Change in Control (as defined in the Plan), all outstanding and unvested equity awards held by such Eligible Director, whether granted under this policy or otherwise, will vest in full immediately prior to, but conditioned upon, the closing of a Change in Control. |
F. | Additional Provisions: All Option Awards granted under this policy will be nonstatutory stock options, with an exercise price per share equal to 100% of the Fair Market Value of the underlying common stock on the date of grant, and a term of 10 years from the date of grant (subject to earlier termination in connection with a termination of Continuous Service or a Corporate Transaction as provided in the Plan). All provisions of the Plan not inconsistent with this policy will apply to awards granted to Eligible Directors. Eligible Directors will be required to execute an restricted stock unit and option award agreement in a form satisfactory to the Company prior to receipt of an Initial Grant or Annual Grant. |
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IV. | Non-Employee Director Compensation Limit |
Notwithstanding the foregoing, the aggregate value of all compensation granted or paid, as applicable, to any individual for service as a Nonemployee Director (as defined in the Plan) shall in no event exceed the limits set forth in Section 3(d) of the Plan.
V. | Ability to Decline Compensation |
An Eligible Director may decline all or any portion of his or her compensation by giving notice to the Company prior to the date cash may be paid or equity awards are to be granted, as the case may be.
VI. | Expenses |
The Company will reimburse Eligible Directors for ordinary, necessary and reasonable out-of-pocket travel expenses to cover in-person attendance at and participation in Board and committee meetings; provided, that the Eligible Director timely submit to the Company appropriate documentation substantiating such expenses in accordance with the Companys travel and expense policy, as in effect from time to time.
Approved: December 14, 2021
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-261737) pertaining to the IonQ, Inc. 2021 Equity Incentive Plan, the IonQ, Inc. 2021 Employee Stock Purchase Plan and the IonQ, Inc. 2015 Equity Incentive Plan of our report dated March 28, 2022, with respect to the consolidated financial statements of IonQ, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2021.
Tysons, Virginia
March 28, 2022
Exhibit 31.1
CERTIFICATIONS
I, Peter Chapman, certify that:
1. | I have reviewed this Annual Report on Form 10-K of IonQ, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 28, 2022
/s/ Peter Chapman |
Peter Chapman |
Chief Executive Officer |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Thomas Kramer, certify that:
1. | I have reviewed this Annual Report on Form 10-K of IonQ, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 28, 2022
/s/ Thomas Kramer |
Thomas Kramer |
Chief Financial Officer |
(Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the Exchange Act) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Peter Chapman Chief Executive Officer of IonQ, Inc. (the Company), and Thomas Kramer Chief Financial Officer of the Company, each hereby certifies that, to the best of his or her knowledge:
1. | The Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2021, to which this Certification is attached as Exhibit 32.1 (the Annual Report), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and |
2. | The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 28th day of March 2022.
/s/ Peter Chapman |
/s/ Thomas Kramer | |||
Peter Chapman | Thomas Kramer | |||
Chief Executive Officer | Chief Financial Officer |