☒ | QUARTERLY 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 |
Delaware |
85-2992192 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common stock, par value $0.0001 per share |
IONQ |
The New York Stock Exchange | ||
Warrants, each exercisable for one share of common stock for $11.50 per share |
IONQ WS |
The New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
June 30, |
December 31, |
|||||||
2022 |
2021 |
|||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 43,968 | $ | 399,025 | ||||
Short-term investments |
379,383 | 123,443 | ||||||
Accounts receivable |
1,782 | 707 | ||||||
Prepaid expenses and other current assets |
5,113 | 6,442 | ||||||
|
|
|
|
|||||
Total current assets |
430,246 | 529,617 | ||||||
Long-term investments |
147,992 | 80,110 | ||||||
Property and equipment, net |
24,872 | 18,870 | ||||||
Operating lease right-of-use assets |
3,894 | 4,032 | ||||||
Intangible assets, net |
6,839 | 5,841 | ||||||
Other noncurrent assets |
3,149 | 3,558 | ||||||
|
|
|
|
|||||
Total Assets |
$ | 616,992 | $ | 642,028 | ||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 3,680 | $ | 1,882 | ||||
Accrued expenses |
4,019 | 2,647 | ||||||
Current portion of operating lease liabilities |
577 | 568 | ||||||
Unearned revenue |
4,885 | 3,430 | ||||||
Current portion of stock option early exercise liabilities |
1,130 | 1,164 | ||||||
|
|
|
|
|||||
Total current liabilities |
14,291 | 9,691 | ||||||
Operating lease liabilities, net of current portion |
3,556 | 3,643 | ||||||
Unearned revenue, net of current portion |
616 | 1,533 | ||||||
Stock option early exercise liabilities, net of current portion |
1,404 | 1,969 | ||||||
Warrant liabilities |
4,447 | 33,962 | ||||||
|
|
|
|
|||||
Total liabilities |
$ | 24,314 | $ | 50,798 | ||||
Commitments and Contingencies (see Note 7) |
||||||||
Stockholders’ Equity: |
||||||||
Common stock $0.0001 par value per share; 1,000,000,000 shares authorized; 198,003,162 and 195,630,975 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively |
20 | 19 | ||||||
Additional paid-in capital |
751,259 | 737,150 | ||||||
Accumulated deficit |
(151,672 | ) | (145,791 | ) | ||||
Accumulated other comprehensive loss |
(6,929 | ) | (148 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
592,678 | 591,230 | ||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ Equity |
$ | 616,992 | $ | 642,028 | ||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Revenue |
$ | 2,608 | $ | 93 | $ | 4,561 | $ | 218 | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
742 | 327 | 1,310 | 508 | ||||||||||||
Research and development |
9,653 | 5,477 | 16,990 | 9,131 | ||||||||||||
Sales and marketing |
2,132 | 871 | 4,002 | 1,098 | ||||||||||||
General and administrative |
7,558 | 2,904 | 16,752 | 5,860 | ||||||||||||
Depreciation and amortization |
1,451 | 502 | 2,717 | 947 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating costs and expenses |
21,536 |
10,081 |
41,771 |
17,544 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(18,928 |
) |
(9,988 |
) |
(37,210 |
) |
(17,326 |
) | ||||||||
Change in fair value of warrant liabilities |
16,061 | — | 29,509 | — | ||||||||||||
Interest income, net |
1,259 | — | 1,867 | — | ||||||||||||
Other income (expense), net |
(46 | ) | 2 | (47 | ) | 5 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before benefit for income taxes |
(1,654 |
) |
(9,986 |
) |
(5,881 |
) |
(17,321 |
) | ||||||||
Benefit for income taxes |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ |
(1,654 |
) |
$ |
(9,986 |
) |
$ |
(5,881 |
) |
$ |
(17,321 |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to common stockholders - basic and diluted |
$ | (0.01 | ) | $ | (0.08 | ) | $ | (0.03 | ) | $ | (0.15 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares used in computing net loss per share attributable to common stockholders - basic and diluted |
197,214,022 | 119,253,873 | 196,708,008 | 118,991,152 | ||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net loss |
$ | (1,654 | ) | $ | (9,986 | ) | $ | (5,881 | ) | $ | (17,321 | ) | ||||
Other comprehensive loss, net of reclassification adjustments: |
||||||||||||||||
Change in unrealized loss on available-for-sale securities |
(2,241 | ) | — | (6,781 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive loss |
(2,241 | ) | — | (6,781 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive loss |
$ |
(3,895 |
) |
$ |
(9,986 |
) |
$ |
(12,662 |
) |
$ |
(17,321 |
) | ||||
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||
Balance, March 31, 2022 |
196,393,948 |
$ |
20 |
$ |
744,469 |
$ |
(150,018 |
) |
$ |
(4,688 |
) |
$ |
589,783 |
|||||||||||
Net loss |
— | — | — | (1,654 | ) | — | (1,654 | ) | ||||||||||||||||
Other comprehensive loss |
— | — | — | — | (2,241 | ) | (2,241 | ) | ||||||||||||||||
Stock options exercised |
1,219,451 | — | 435 | — | — | 435 | ||||||||||||||||||
Vesting of restricted common stock |
125,341 | — | 282 | — | — | 282 | ||||||||||||||||||
Issuance of common stock from the settlement of restricted stock units |
264,422 | — | 473 | — | — | 473 | ||||||||||||||||||
Stock-based compensation |
— | — | 5,600 | — | — | 5,600 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2022 |
198,003,162 |
$ |
20 |
$ |
751,259 |
$ |
(151,672 |
) |
$ |
(6,929 |
) |
$ |
592,678 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||
Balance, March 31, 2021 |
119,027,058 |
$ |
3 |
$ |
96,803 |
$ |
(46,940 |
) |
$ |
— |
$ |
49,866 |
||||||||||||
Net loss |
— | — | — | (9,986 | ) | — | (9,986 | ) | ||||||||||||||||
Equity instruments issued in consideration for intellectual property and research and development arrangements |
385,797 | — | 737 | — | — | 737 | ||||||||||||||||||
Stock options exercised |
101,484 | — | 29 | — | — | 29 | ||||||||||||||||||
Vesting of restricted common stock |
144,667 | — | 231 | — | — | 231 | ||||||||||||||||||
Stock-based compensation |
— | — | 2,532 | — | — | 2,532 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2021 |
119,659,006 |
$ |
3 |
$ |
100,332 |
$ |
(56,926 |
) |
$ |
— |
$ |
43,409 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||
Balance, December 31, 2021 |
195,630,975 |
$ |
19 |
$ |
737,150 |
$ |
(145,791 |
) |
$ |
(148 |
) |
$ |
591,230 |
|||||||||||
Net loss |
— | — | — | (5,881 | ) | — | (5,881 | ) | ||||||||||||||||
Other comprehensive loss |
— | — | — | — | (6,781 | ) | (6,781 | ) | ||||||||||||||||
Stock options exercised |
1,672,676 | 1 | 566 | — | — | 567 | ||||||||||||||||||
Vesting of restricted common stock |
264,852 | — | 598 | — | — | 598 | ||||||||||||||||||
Issuance of common stock from the settlement of restricted stock units |
433,172 | — | 473 | — | — | 473 | ||||||||||||||||||
Stock-based compensation |
— | — | 12,448 | — | — | 12,448 | ||||||||||||||||||
Warrants exercised |
1,487 | — | 24 | — | — | 24 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2022 |
198,003,162 |
$ |
20 |
$ |
751,259 |
$ |
(151,672 |
) |
$ |
(6,929 |
) |
$ |
592,678 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||
Balance, December 31, 2020 |
118,146,795 |
$ |
3 |
$ |
93,305 |
$ |
(39,605 |
) |
$ |
— |
$ |
53,703 |
||||||||||||
Net loss |
— | — | — | (17,321 | ) | — | (17,321 | ) | ||||||||||||||||
Equity instruments issued in consideration for intellectual property and research and development arrangements |
385,797 | — | 2,381 | — | — | 2,381 | ||||||||||||||||||
Stock options exercised |
904,555 | — | 223 | — | — | 223 | ||||||||||||||||||
Vesting of restricted common stock |
221,859 | — | 416 | — | — | 416 | ||||||||||||||||||
Stock-based compensation |
— | — | 4,007 | — | — | 4,007 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2021 |
119,659,006 |
$ |
3 |
$ |
100,332 |
$ |
(56,926 |
) |
$ |
— |
$ |
43,409 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (5,881 | ) | $ | (17,321 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
2,717 | 947 | ||||||
Non-cash research and development arrangements |
260 | 1,001 | ||||||
Amortization of customer warrant |
— | 125 | ||||||
Stock-based compensation |
12,556 | 3,874 | ||||||
Change in fair value of warrant liabilities |
(29,509 | ) | — | |||||
Other, net |
(1,618 | ) | 122 | |||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(801 | ) | (30 | ) | ||||
Prepaid expenses and other current assets |
3,576 | (2,710 | ) | |||||
Accounts payable |
1,156 | 3,025 | ||||||
Accrued expenses |
484 | 913 | ||||||
Unearned revenue |
264 | 275 | ||||||
Other assets and liabilities |
(133 | ) | (42 | ) | ||||
|
|
|
|
|||||
Net cash used in operating activities |
(16,929 | ) | (9,821 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(7,022 | ) | (2,994 | ) | ||||
Capitalized software development costs |
(982 | ) | (764 | ) | ||||
Intangible asset acquisition costs |
(370 | ) | (241 | ) | ||||
Purchases of available-for-sale securities |
(403,899 | ) | — | |||||
Maturities and sales of available-for-sale securities |
73,090 | — | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(339,183 | ) | (3,999 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from stock options exercised |
567 | 5,392 | ||||||
Tax withholding receipts related to vested and released restricted stock units |
|
|
472 |
|
|
|
— |
|
Proceeds from public warrants exercised |
16 | — | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
1,055 | 5,392 | ||||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
(355,057 | ) | (8,428 | ) | ||||
Cash and cash equivalents at the beginning of the period |
399,025 | 36,120 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at the end of the period |
$ | 43,968 | $ | 27,692 | ||||
|
|
|
|
|||||
Supplemental disclosures of non-cash investing and financing transactions: |
||||||||
Issuance of common stock for intellectual property |
$ | — | $ | 1,567 | ||||
Issuance of common stock for research and development arrangement |
$ | — | $ | 815 | ||||
Property and equipment purchases in accounts payable and accrued expenses |
$ | 1,284 | $ | 1,121 | ||||
Intangible asset purchases in accounts payable and accrued expenses |
$ | 73 | $ | 121 | ||||
Noncash reclassification of warrant liabilities to equity upon exercise |
$ | 8 | $ | — | ||||
Bonus settled in restricted stock units |
$ | 473 | $ | — |
• | 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. |
June 30, 2022 |
December 31, 2021 |
|||||||
Billed accounts receivable |
$ | 794 | $ | 261 | ||||
Unbilled accounts receivable |
988 | 446 | ||||||
|
|
|
|
|||||
Total accounts receivable |
$ | 1,782 | $ | 707 | ||||
|
|
|
|
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 |
Total |
||||
Balance as of December 31, 2021 |
$ | 4,963 | ||
Revenue recognized |
(2,663 | ) | ||
Payments from customers, net |
3,201 | |||
|
|
|||
Balance as of June 30, 2022 |
$ | 5,501 | ||
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
Numerator: |
2022 |
2021 |
2022 |
2021 |
||||||||||||
Net loss available to common stockholders |
$ | (1,654 | ) | $ | (9,986 | ) | $ | (5,881 | ) | $ | (17,321 | ) | ||||
Denominator: |
||||||||||||||||
Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted |
197,214,022 | 119,253,873 | 196,708,008 | 118,991,152 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to common stockholders – basic and diluted |
$ | (0.01 | ) | $ | (0.08 | ) | $ | (0.03 | ) | $ | (0.15 | ) | ||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Common stock options outstanding |
20,918,181 | 24,884,016 | 21,011,863 | 24,375,498 | ||||||||||||
Warrants to purchase common stock |
8,301,202 | 8,301,202 | 8,301,202 | 8,301,202 | ||||||||||||
Public warrants |
5,231,531 | — | 5,231,999 | — | ||||||||||||
Unvested restricted stock units |
2,635,880 | — | 1,970,311 | — | ||||||||||||
Unvested common stock |
1,218,477 | 2,170,715 | 1,285,399 | 1,527,769 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
38,305,271 | 35,355,933 | 37,800,774 | 34,204,469 | ||||||||||||
|
|
|
|
|
|
|
|
As of June 30, 2022 |
As of December 31, 2021 |
|||||||||||||||||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||||||||||||||
Cash and money market funds |
$ | 43,968 | $ | — | $ | — | $ | 43,968 | $ | 123,690 | $ | — | $ | — | $ | 123,690 | ||||||||||||||||
Commercial paper |
203,133 | — | (924 | ) | 202,209 | 203,628 | — | (21 | ) | 203,607 | ||||||||||||||||||||||
Corporate notes and bonds |
236,142 | — | (4,846 | ) | 231,296 | 80,060 | 2 | (109 | ) | 79,953 | ||||||||||||||||||||||
Municipal bonds |
11,846 | — | (213 | ) | 11,633 | 2,000 | — | — | 2,000 | |||||||||||||||||||||||
US government and agency |
83,183 | — | (946 | ) | 82,237 | 193,347 | 1 | (20 | ) | 193,328 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total cash equivalents and investments |
$ | 578,272 | $ | — | $ | (6,929 | ) | $ | 571,343 | $ | 602,725 | $ | 3 | $ | (150 | ) | $ | 602,578 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Year or Less |
1 Year or Greater |
Total |
||||||||||
Cash and money market funds |
$ | 43,968 | $ | — | $ | 43,968 | ||||||
Commercial paper |
202,209 | — | 202,209 | |||||||||
Corporate notes and bonds |
102,099 | 129,197 | 231,296 | |||||||||
Municipal bonds |
1,997 | 9,636 | 11,633 | |||||||||
US government and agency |
73,078 | 9,159 | 82,237 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 423,351 | $ | 147,992 | $ | 571,343 | ||||||
|
|
|
|
|
|
Fair Value Measured as of |
||||||||||||||||
June 30, 2022 |
||||||||||||||||
Assets: |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
Cash equivalents: |
||||||||||||||||
Cash and money market funds (1) |
$ | 43,968 | $ | — | $ | — | $ | 43,968 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cash equivalents |
43,968 | — | — | 43,968 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Short-term investments: |
||||||||||||||||
Commercial paper |
— | 202,209 | — | 202,209 | ||||||||||||
Corporate notes and bonds |
— | 102,099 | — | 102,099 | ||||||||||||
Municipal bonds |
— | 1,997 | — | 1,997 | ||||||||||||
US government and agency |
— | 73,078 | — | 73,078 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total short-term investments |
— | 379,383 | — | 379,383 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Long-term investments |
||||||||||||||||
Corporate notes and bonds |
— | 129,197 | — | 129,197 | ||||||||||||
Municipal bonds |
— | 9,636 | — | 9,636 | ||||||||||||
US government and agency |
— | 9,159 | — | 9,159 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total long-term investments |
— | 147,992 | — | 147,992 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Assets |
$ | 43,968 | $ | 527,375 | $ | — | $ | 571,343 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Public warrants |
$ | 4,447 | $ | — | $ | — | $ | 4,447 | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measured as of |
||||||||||||||||
December 31, 2021 |
||||||||||||||||
Assets: |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
Cash equivalents: |
||||||||||||||||
Cash and 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 | ||||||||
|
|
|
|
|
|
|
|
(1) |
Includes money market funds associated with the Company’s overnight investment sweep account. |
June 30, 2022 |
December 31, 2021 |
|||||||
Computer equipment and acquired computer software |
$ | 1,474 | $ | 840 | ||||
Machinery, equipment, furniture, and fixtures |
7,688 | 5,497 | ||||||
Leasehold improvements |
958 | 827 | ||||||
Quantum computing systems |
20,222 | 15,151 | ||||||
|
|
|
|
|||||
Gross property and equipment |
30,342 | 22,315 | ||||||
Less: accumulated depreciation |
(5,470 | ) | (3,445 | ) | ||||
|
|
|
|
|||||
Property and equipment, net |
$ | $ | 18,870 | |||||
|
|
|
|
• | 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 shall be entitled to as a result of ownership at the time of sale. |
• | 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. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Risk-Free Interest Rate |
2.72 |
% | — | % |
2.12 |
% | 0.96 | % | ||||||||
Expected Term (in years) |
5.50 |
— | 5.58 |
6.26 | ||||||||||||
Expected Volatility |
78.40 |
% | — | % |
77.82 |
% | 77.04 | % | ||||||||
Dividend Yield |
— | % | — | % |
— | % | — | % |
Number of Option Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term (Years) |
Aggregate Intrinsic Value (in millions) |
|||||||||||||
Outstanding as of December 31, 2021 |
22,133,210 | $ | 0.64 | 7.84 | $ | 377.58 | ||||||||||
Granted |
1,544,470 | 11.98 | ||||||||||||||
Exercised |
(1,672,676 | ) | 0.34 | |||||||||||||
Cancelled/Forfeited |
(103,540 | ) |
0.73 | |||||||||||||
Outstanding as of June 30, 2022 |
21,901,464 | $ | 1.46 |
7.54 |
$ | 75.63 |
||||||||||
Exercisable as of June 30, 2022 |
11,278,172 | $ | 0.75 | 7.16 |
$ | 41.34 | ||||||||||
Exercisable and expected to vest as of June 30, 2022 |
21,901,464 | $ | 1.46 | 7.54 |
$ | 75.63 | ||||||||||
Number of Option Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value (in millions) |
|||||||||||||
Outstanding as of December 31, 2020 |
21,863,368 |
$ |
0.34 |
8.67 |
$ |
44.79 |
||||||||||
Granted |
6,492,540 |
2.39 |
||||||||||||||
Exercised |
(3,239,136 |
) |
1.66 |
|||||||||||||
Cancelled/ Forfeited |
(342,191 |
) |
0.70 |
|||||||||||||
Outstanding as of June 30, 2021 |
24,774,581 |
$ |
0.70 |
8.44 |
$ |
204.88 |
||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Total intrinsic value of options exercised |
$ | 4.9 | $ | 0.9 | $ | 6.8 | $ | 23.7 | ||||||||
Aggregate grant-date fair value of options vested |
$ | 2.7 |
$ | 1.2 | $ | 4.9 |
$ | 1.9 | ||||||||
Weighted-average grant-date fair value per share for options granted |
$ | 3.82 |
$ | — | $ | 8.10 |
$ | 5.83 |
Number of RSUs |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term (Years) |
Aggregate Fair Value (in millions) |
|||||||||||||
Outstanding as of December 31, 2021 |
— | $ | — | — | $ | — | ||||||||||
Granted |
4,021,559 | 9.58 | ||||||||||||||
Vested |
(433,172 | ) | 11.16 | |||||||||||||
Forfeited |
(27,838 | ) | 12.77 | |||||||||||||
Outstanding as of June 30, 2022 |
3,560,549 | $ | 9.36 | 3.25 | $ | 33.33 | ||||||||||
Expected to vest after June 30, 2022 |
3,499,049 | $ | 9.30 | 3.31 | $ | 32.54 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Cost of revenue |
$ | 247 | $ | 31 | $ | 351 | $ | 31 | ||||||||
Research and development |
2,368 |
717 | 4,066 |
1,170 | ||||||||||||
Sales and marketing |
503 |
25 | 576 |
25 | ||||||||||||
General and administrative |
2,766 |
1,670 | 7,563 |
2,648 | ||||||||||||
Stock-based compensation, net of amounts capitalized |
5,884 |
2,443 | 12,556 |
3,874 | ||||||||||||
Capitalized stock-based compensation - Intangibles and fixed assets |
471 |
89 | 647 |
133 | ||||||||||||
Total stock-based compensation |
$ | 6,355 |
$ | 2,532 | $ | 13,203 |
$ | 4,007 |
Unrecognized Expense |
Weighted- Average Amortization Period (Years) |
|||||||
Restricted stock units |
$ | 30.1 | 1.7 | |||||
Stock options |
$ | 37.1 | 1.8 |
June 30, 2022 |
December 31, 2021 |
|||||||
Accrued payroll expenses and related benefits |
$ | 2,219 | $ | 1,025 | ||||
Accrued expenses - other |
1,800 | 1,622 | ||||||
Total accrued expenses |
$ | $ | 2,647 | |||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Revenue |
$ |
1,002 | $ |
— | $ |
1,994 | $ |
— | ||||||||
Cost of revenue |
12 | — | 26 | — | ||||||||||||
Research and development (1) |
269 | 796 | 540 | 1,336 | ||||||||||||
Sales and marketing |
37 | — | 69 | — | ||||||||||||
General and administrative |
29 | 61 | 58 | 130 |
(1) |
Included in research and development expenses is non-cash amortization associated with the Exclusive Option Agreements with UMD and Duke of $0.2 |
June 30, 2022 |
December 31, 2021 |
|||||||
Assets |
||||||||
Prepaid expenses and other current assets |
$ | 562 | $ | 612 | ||||
Operating lease right-of-use asset |
3,894 | 4,032 | ||||||
Other noncurrent assets |
1,585 | 1,845 | ||||||
Liabilities |
||||||||
Accounts payable |
2 | 54 | ||||||
Current operating lease liabilities |
577 | 568 | ||||||
Unearned revenue |
3,302 | 2,821 | ||||||
Non-current operating lease liabilities |
3,556 | 3,643 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | IonQ announced a paid contract with Airbus, who is using Aria to explore optimization problems that are core to their aerospace business, such as how to efficiently load cargo on aircraft. IonQ expects that the quantum algorithm it is developing with Airbus will account for a number of critical aviation variables that make this problem particularly difficult for classical algorithms to solve. |
• | IonQ announced a paid contract with Dow, a global leader in chemistry and material science, who is using Aria to explore the boundaries of quantum computing in materials discovery research. They join other customers who are partnering with IonQ to explore the intersection of quantum machine learning, material science, and chemistry. |
• | IonQ announced the results of a partnership with GE Research to develop a quantum algorithm that manages financial risk exposure. The work used a large data set to generate risk models across up to four variables and is broadly applicable to industries which have risk-management needs, such as finance, insurance, and supply chain management. |
• | Aria, which IonQ believes to be the most powerful commercial quantum computer in the world with 23 algorithmic qubits, which will be available tomorrow to all users of Microsoft Azure Quantum. This announcement furthers IonQ’s commitment to making its industry-leading hardware publicly accessible to current and future generations of quantum programmers . |
• | IonQ signed a formal agreement to collaborate with the University of Maryland on a project for the National Science Foundation. For this, IonQ will build and host a quantum router as a part of a new quantum network–the Mid-Atlantic Region Quantum Internet—spanning UMD’s campus and surrounding area. The work is not only important for quantum communications, but also continues IonQ’s work towards connecting multiple quantum computers together to form even more powerful systems. |
• | IonQ finalized a subcontract with Zapata Computing to collaborate on a multi-million dollar DARPA project. |
• | Aria has increased its computational power by approximately 8x, now reaching #AQ 23, up from #AQ 20. Aria will become IonQ’s newest cloud offering, representing more than a 130,000x increase in computational power from the existing offering. |
• | IonQ announced an 8x increase in the computation power of IonQ Harmony, which has achieved up to #AQ 9, up from a previous benchmark of #AQ 6. Harmony systems are available to customers via all three major cloud partners, including Microsoft Azure, Amazon Web Services, and Google Cloud. |
• | IonQ is investing in cutting-edge research on natural language processing, or NLP. IonQ created quantum NLP algorithms to represent linguistic qualities like ambiguity, vagueness, and novelty which are notoriously difficult to represent in classical compute. No previously published work has demonstrated ambiguity resolution or language generation working on live quantum hardware. IonQ believes quantum techniques of this nature can dramatically improve NLP performance. |
• | IonQ has identified a facility in Seattle, Washington to host its first assembly lines for manufacturing quantum computers. |
• | IonQ announced the hire of Dave Mehuys as Vice President of Product Engineering to support its production plans. Dr. Mehuys comes to IonQ after serving as Vice President of Systems Engineering at PsiQuantum and brings with him a deep understanding of quantum hardware. |
• | IonQ announced the creation of IonQ GmbH and IonQ Israel Ltd in support of growing regional investments in quantum computing. |
• | IonQ welcomed Kathy Chou to the IonQ Board of Directors in July 2022. Ms. Chou is currently the Senior Vice President of SaaS Engineering at Nutanix, and brings a wealth of experience in go-to-market strategy and developing and deploying SaaS applications. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenue |
$ | 2,608 | $ | 93 | $ | 4,561 | $ | 218 | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) (1) |
742 | 327 | 1,310 | 508 | ||||||||||||
Research and development (1) |
9,653 | 5,477 | 16,990 | 9,131 | ||||||||||||
Sales and marketing (1) |
2,132 | 871 | 4,002 | 1,098 | ||||||||||||
General and administrative (1) |
7,558 | 2,904 | 16,752 | 5,860 | ||||||||||||
Depreciation and amortization |
1,451 | 502 | 2,717 | 947 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating costs and expenses |
21,536 | 10,081 | 41,771 | 17,544 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(18,928 | ) | (9,988 | ) | (37,210 | ) | (17,326 | ) | ||||||||
Change in fair value of warrant liabilities |
16,061 | — | 29,509 | — | ||||||||||||
Interest income, net |
1,259 | — | 1,867 | — | ||||||||||||
Other income (expense), net |
(46 | ) | 2 | (47 | ) | 5 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before benefit for income taxes |
(1,654 | ) | (9,986 | ) | (5,881 | ) | (17,321 | ) | ||||||||
Benefit for income taxes |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (1,654 | ) | $ | (9,986 | ) | $ | (5,881 | ) | $ | (17,321 | ) | ||||
|
|
|
|
|
|
|
|
(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: |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenue |
$ | 247 | $ | 31 | $ | 351 | $ | 31 | ||||||||
Research and development |
2,368 | 717 | 4,066 | 1,170 | ||||||||||||
Sales and marketing |
503 | 25 | 576 | 25 | ||||||||||||
General and administrative |
2,766 | 1,670 | 7,563 | 2,648 |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenue |
$ | 2,608 | $ | 93 | $ | 2,515 | 2,704 | % |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 742 | $ | 327 | $ | 415 | 127 | % |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Research and development |
$ | 9,653 | $ | 5,477 | $ | 4,176 | 76 | % |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Sales and marketing |
$ | 2,132 | $ | 871 | $ | 1,261 | 145 | % |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
General and administrative |
$ | 7,558 | $ | 2,904 | $ | 4,654 | 160 | % |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Depreciation and amortization |
$ | 1,451 | $ | 502 | $ | 949 | 189 | % |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Change in fair value of warrant liabilities |
$ | 16,061 | $ | — | $ | 16,061 | NM |
Three Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Interest income, net |
$ | 1,259 | $ | — | $ | 1,259 | NM |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenue |
$ | 4,561 | $ | 218 | $ | 4,343 | 1,992 | % |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 1,310 | $ | 508 | $ | 802 | 158 | % |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Research and development |
$ | 16,990 | $ | 9,131 | $ | 7,859 | 86 | % |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Sales and marketing |
$ | 4,002 | $ | 1,098 | $ | 2,904 | 264 | % |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
General and administrative |
$ | 16,752 | $ | 5,860 | $ | 10,892 | 186 | % |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Depreciation and amortization |
$ | 2,717 | $ | 947 | $ | 1,770 | 187 | % |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Change in fair value of warrant liabilities |
$ | 29,509 | $ | — | $ | 29,509 | NM |
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
(in thousands) |
||||||||||||||||
Interest income, net |
$ | 1,867 | $ | — | $ | 1,867 | NM |
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Net cash used in operating activities |
$ | (16,929 | ) | $ | (9,821 | ) | ||
Net cash used in investing activities |
$ | (339,183 | ) | $ | (3,999 | ) | ||
Net cash provided by financing activities |
$ | 1,055 | $ | 5,392 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
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 |
• | completed the design and testing phases of our financial accounting system implementation. We selected a system that can support effective information technology general controls as well as the anticipated growth of the business. |
Item 1. |
Legal Proceedings. |
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. |
• | We may not manage our growth effectively. |
• | Our management has limited experience in operating a public company. |
• | 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 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 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. |
• | 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 they 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 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. |
• | 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. |
• | 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 collaborative partnerships, our future growth and development could be negatively impacted. |
• | Our future growth and success depend in part on our ability to sell effectively to government entities and large enterprises. |
• | Contracts with government and state agencies are subject to a number of challenges and risks. |
• | Our business depends on our customers’ abilities to implement useful quantum algorithms and sufficient quantum resources for their business. |
• | 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. |
• | Public health threats could have an adverse effect on our business and financial results. |
• | Licensing of intellectual property is of critical importance to 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 and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies. |
• | 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. |
• | 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. |
• | 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. |
• | 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 to a sufficiently large number of algorithmic qubits in a single system; |
• | 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 the Russia-Ukraine war 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. |
• | changes in government fiscal or procurement policies, or decreases in government funding available for procurement of goods and services generally, or for our federal government contracts specifically; |
• | changes in government programs or applicable requirements; |
• | restrictions in the grant of personnel security clearances to our employees; |
• | ability to maintain facility clearances required to perform on classified contracts for U.S. federal government and foreign government agencies, as applicable; |
• | changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding; |
• | changes in the government’s attitude towards us as a company or our technology; |
• | appeals, disputes, or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government; |
• | the adoption of new laws or regulations or changes to existing laws or regulations; |
• | budgetary constraints, including automatic reductions as a result of “sequestration” or similar measures and constraints imposed by any lapses in appropriations for the federal government or certain of its departments and agencies; |
• | influence by, or competition from, third parties with respect to pending, new, or existing contracts with government customers; |
• | changes in legal obligations or political or social attitudes with respect to security or data privacy issues; |
• | potential delays or changes in the government appropriations or procurement processes, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns; and |
• | increased or unexpected costs or unanticipated delays caused by other factors outside of our control. |
• | lack of familiarity and burdens of complying with foreign laws, legal standards, privacy and cybersecurity standards, regulatory requirements, tariffs and other barriers, and the risk of penalties to our customers and individual members of management or employees if our practices are deemed to not be in compliance; |
• | practical difficulties of enforcing intellectual property rights in countries with varying laws and standards and reduced or varied protection for intellectual property rights in some countries; |
• | an evolving legal framework and additional legal or regulatory requirements for data privacy and cybersecurity, which may necessitate the establishment of systems to maintain data in local markets, requiring us to invest in additional data centers and network infrastructure, and the implementation of additional employee data privacy documentation (including locally compliant data privacy notice and policies), all of which may involve substantial expense and may cause us to need to divert resources from other aspects of our business, all of which may adversely affect our business; |
• | unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions; |
• | difficulties in managing systems integrators and partners; |
• | differing technology standards; |
• | different pricing environments, longer sales cycles, longer accounts receivable payment cycles and difficulties in collecting accounts receivable; |
• | increased financial accounting and reporting burdens and complexities; |
• | difficulties in managing and staffing international operations including the proper classification of independent contractors and other contingent workers, differing employer/employee relationships and local employment laws; |
• | increased costs involved with recruiting and retaining an expanded employee population outside the United States through cash and equity-based incentive programs and unexpected legal costs and regulatory restrictions in issuing our shares to employees outside the United States; |
• | global political and regulatory changes that may lead to restrictions on immigration and travel for our employees; |
• | fluctuations in exchange rates that may decrease the value of our foreign-based revenue; |
• | potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems, restrictions on the repatriation of earnings, and transfer pricing requirements; and |
• | permanent establishment risks and complexities in connection with international payroll, tax and social security requirements for international employees. |
• | specialized disclosure and accounting requirements unique to government contracts; |
• | financial and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the U.S. government; |
• | public disclosures of certain contract and company information; and |
• | mandatory socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental compliance requirements. |
• | 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; |
• | rumors and market speculation involving us or other companies in our industry, which may include short seller reports; |
• | 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; |
• | announcements by competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures, or capital commitments; |
• | the impact of the COVID-19 pandemic or other geopolitical events such as Russia’s incursion into Ukraine; and |
• | the impact of any of the foregoing 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 6. |
Exhibits. |
+ | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601. The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
# | Indicates a management contract or compensatory plan, contract or arrangement. |
* | Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act (whether made before or after the date of this Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing. |
IonQ, Inc. | ||||||
Date: August 15, 2022 | /s/ Peter Chapman | |||||
Name: | Peter Chapman | |||||
Title: | President and Chief Executive Officer (Principal Executive Officer) | |||||
Date: August 15, 2022 | /s/ Thomas Kramer | |||||
Name: | Thomas Kramer | |||||
Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit 10.1
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, including any appendices attached thereto (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: | [ ] Notwithstanding the foregoing, vesting shall terminate upon the Participants termination of Continuous Service. | |
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, including any appendices attached hereto, 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.
Appendix Canada
This Appendix includes special terms and conditions that govern the RSU Award granted to you under the Plan and Agreement if you reside and/or work in Canada.
The information contained herein is general in nature and may not apply to your particular situation. Accordingly, you are advised to seek appropriate professional advice as to how the relevant Canadian laws may apply to your situation.
Withholding Obligations. Section 4(c)(iii) of the Agreement shall have no application.
Data Privacy. You hereby authorize the Company and its representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. You further authorize the Company, its Affiliates and any stock plan service provider that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. You further authorize the Company and its Affiliates to record such information and to keep such information in your employee file.
Language Consent. The parties to the Agreement acknowledge that it is their express wish that the Agreement, as well as all documents, notices, and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
Consentement relatif à la langue utilisée
Les parties reconnaissent avoir exigé que cette convention («Agreement») soit rédigée en anglais, ainsi que tous les documents, avis et procédures judiciaires, éxécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à la présente.
Continuous Service. Notwithstanding anything else in the Plan or the Agreement, your Continuous Service will be deemed to end on the date when you cease to be actively providing services to the Company or an Affiliate (or your employer, if different), regardless of whether the cessation of your employment was lawful, and shall not include any period of statutory, contractual, common law, civil law or other reasonable notice of termination of employment or any period of salary continuance or deemed employment; provided, however, that where any greater period is expressly required by applicable employment or labor standards legislation (if such legislation is applicable), your Continuous Service will be deemed to end immediately following the minimum prescribed period under that legislation. As a result, if you receive notice of termination, and the Company or its Affiliate (or your employer, if different) does not require you to continue to attend at work and/or elects to provide you with a payment in lieu of notice, your Continuous Service will end on the date you receive such notice, as opposed any later date when severance payments to you cease, unless otherwise expressly required by applicable employment or labour standards legislation (if such legislation is applicable).
Employment Matters.
The definition of Cause is modified such that the following supersedes the existing definition in the Plan:
Cause has the meaning ascribed to such term in any written agreement between a Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) the Participants dishonest statements or acts with respect to the Company or any Affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business; (ii) the Participants commission of: (A) a felony or indictable offence, or (B) any misdemeanor or summary conviction offence involving moral turpitude, deceit, dishonesty or fraud; (iii) the Participants failure to perform the Participants assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, after written notice given to the Participant by the Company; (iv) the Participants gross negligence, willful misconduct or insubordination with respect to the Company or any affiliate of the Company; (v) the Participants material violation of any provision of any agreement(s) between the Participant and the Company relating to noncompetition, nonsolicitation, nondisclosure
and/or assignment of inventions; or (vi) any other serious act or omission that amounts to just cause at law; provided, however, that for Employees in Ontario, Cause means wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned. The determination that a termination of the Participants Continuous Service is either for Cause or without Cause will be made by the Board with respect to Participants who are executive officers of the Company and by the Companys Chief Executive Officer with respect to Participants who are not executive officers of the Company. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
References to at will employment in the Plan are deleted.
No Fractions. No fractional shares of Common Stock shall be issued under the Agreement and no cash amount shall be payable in respect thereof.
Voluntary Participation. Participants participation in the Plan is voluntary.
Securities Law Information.
The following definitions in Section 14 of the Plan are modified such that the following modifications supplement the existing definitions as follows:
| Affiliate - For purposes of issuances of securities under the Plan to Employees and Consultants in Canada, an Affiliate means a person (which includes a corporation) that controls the Company or is controlled by the Company or is controlled by the same person that controls the Company. For this purpose, a person (first person) is considered to control a person (second person) if the first person, directly or indirectly, has the power to direct the management and policies of the second person by virtue of ownership of or direction over voting securities in the second person (over 50%); or a written agreement or indenture; and |
| Consultant - For purposes of issuances of securities under the Plan to Consultants in Canada, a Consultant means a person, other than an employee, executive officer or director of the Company or an Affiliate that (a) is engaged to provide services to the Company, Parent, Subsidiary or an Affiliate, other than services provided in relation to a distribution; (b) provides the services under a written contract with the Company or an Affiliate; and (c) spends or will spend a significant amount of time and attention on the affairs and business of the Company or an Affiliate and includes (d) for an individual consultant, a corporation of which the individual consultant is an employee or shareholder, and a partnership of which the individual consultant is an employee or partner, and (e) for a consultant that is not an individual, an employee, executive officer, or director of the consultant, provided that the individual employee, executive officer, or director spends or will spend a significant amount of time and attention on the affairs and business of the Company or an Affiliate. |
Participant understands that, subject to any applicable contractual restrictions, Participant is permitted to sell shares of Common Stock acquired pursuant to the Plan, provided that the Company is a foreign issuer that is not a public company in any jurisdiction of Canada and the sale of the shares of Common Stock acquired pursuant to the Plan takes place: (i) through an exchange, or a market, outside of Canada on the distribution date; or (ii) to a person or company outside of Canada. For purposes hereof, in addition to not being a reporting issuer in any jurisdiction of Canada, a foreign issuer is an issuer that: (i) is not incorporated or existing pursuant to the laws of Canada or any jurisdiction of Canada; (ii) does not have its head office in Canada; and (iii) does not have a majority of its executive officers or directors ordinarily resident in Canada. If any designated broker is appointed under the Plan, Participant shall sell such securities through the designated broker.
Foreign Asset/Account Reporting Information. Canadian residents are required to report any foreign property on form T1135 (Foreign Income Verification Statement) if the total cost of such property exceeds a certain threshold (CDN$100,000) at any time in the year. It is Participants responsibility to comply with these reporting obligations, and Participant should consult with Participants own personal tax advisor in this regard.
Right to acquire shares of Common Stock. Section 10(a) of the Plan shall only have application in the event applicable laws prohibit, in the reasonable opinion of the Company, any particular action or transaction contemplated in the Agreement or Plan. Furthermore, and notwithstanding any other provision of the Agreement or Plan, Participants RSU Award shall entitle Participant, upon fulfillment of the requisite conditions, to acquire newly issued shares of Common Stock, and may not be cash-settled (or otherwise settled) without Participants consent.
Attachment II
2021 EQUITY INCENTIVE PLAN
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Peter Chapman, certify that:
1. | I have reviewed this Form 10-Q 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)) 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; |
(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. |
Dated: August 15, 2022 | By: | /s/ Peter Chapman | ||||
Peter Chapman | ||||||
President and Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas Kramer, certify that:
1. | I have reviewed this Form 10-Q 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)) 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; |
(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. |
Dated: August 15, 2022 | By: | /s/ Thomas Kramer | ||||
Thomas Kramer | ||||||
Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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, President and 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 Quarterly Report on Form 10-Q for the period ended June 30, 2022, to which this Certification is attached as Exhibit 32.1 (the Periodic 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 Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 15, 2022
/s/ Peter Chapman |
/s/ Thomas Kramer | |||
Peter Chapman | Thomas Kramer | |||
President and Chief Executive Officer (Principal Executive Officer) |
Chief Financial Officer (Principal Financial Officer) |