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 |
(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 | ||
☐ | Large accelerated filer | ☐ | Accelerated filer | |||
☒ | Non-accelerated filer |
Smaller reporting company | ||||
Emerging growth company |
3 |
||||||
Item 1. |
Financial Statements | 3 | ||||
3 | ||||||
4 | ||||||
5 | ||||||
7 | ||||||
8 | ||||||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 | ||||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 37 | ||||
Item 4. |
Controls and Procedures | 37 | ||||
39 |
||||||
Item 1. |
Legal Proceedings | 39 | ||||
Item 1A. |
Risk Factors | 39 | ||||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 70 | ||||
Item 6. |
Exhibits | 71 | ||||
September 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Assets: |
||||||||
Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable ($ |
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Prepaid expenses and other current assets ($ |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use |
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Intangible assets, net |
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Other noncurrent assets ($ |
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Total Assets |
$ | $ | ||||||
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Liabilities, Convertible Redeemable Preferred Stock and Warrants, and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable ($ |
$ | $ | ||||||
Accrued expenses |
||||||||
Current portion of operating lease liabilities ($ |
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Unearned revenue ($ |
||||||||
Current portion of stock option early exercise liabilities |
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Total current liabilities |
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Operating lease liabilities, net of current portion ($ |
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Unearned revenue, net of current portion |
||||||||
Stock option early exercise liabilities, net of current portion |
||||||||
Warrant liabilities |
— | |||||||
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Total liabilities |
$ | $ | ||||||
Commitments and Contingencies |
||||||||
Convertible Redeemable Preferred Stock and Warrants: |
||||||||
Series A convertible redeemable preferred stock , $giving effect to the recapitalization there is |
||||||||
Series B convertible redeemable preferred stock , $giving effect to the recapitalization there is |
||||||||
Series B-1 convertible redeemable preferred stock, $giving effect to the |
||||||||
Warrants for Series B-1 convertible redeemable preferred stock; after giving effect to the recapitalization there are |
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Stockholders’ Equity: |
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Common stock $ per share ; at September 30, 2021 and December 31, 2020, respectively |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
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Total stockholders’ equity |
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Total Liabilities, Convertible Redeemable Preferred Stock, Warrants and Stockholders’ Equity |
$ | $ | ||||||
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|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenue |
$ | $ | — | $ | $ | — | ||||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
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Research and development |
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Sales and marketing |
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General and administrative |
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Depreciation and amortization |
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Total operating costs and expenses |
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Loss from operations |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Offering costs associated with warrants |
( |
) | — | ( |
) | — | ||||||||||
Other income |
||||||||||||||||
Loss before benefit for income taxes |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Benefit for income taxes |
||||||||||||||||
Net loss and comprehensive loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||
Net loss per share attributable to common stockholders - basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted |
||||||||||||||||
Convertible Redeemable Preferred Stock |
Stockholder s ’ Equity |
|||||||||||||||||||||||||||||||||||||||||||||||
Series A |
Series B |
Series B-1 |
Warrants |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholder s’ Equity |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 |
$ |
$ |
$ |
$ |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | |||||||||||||||||||||||||||||||||||
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Adjusted balance, beginning of period |
— | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Vesting of warrant issued to a customer |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock- based compensation |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
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Balance, September 30, 2020 |
$ |
$ |
$ |
$ |
( |
) |
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Convertible Redeemable Preferred Stock |
Stockholder s’ Equity |
|||||||||||||||||||||||||||||||||||||||||||||||
Series A |
Series B |
Series B-1 |
Warrants |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholder s’ Equity |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
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Adjusted balance, beginning of period |
— | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Merger and PIPE transaction, net of transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
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— |
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— |
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— |
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|
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— |
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|
Stock-based compensation |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||
Balance, September 30, 2021 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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|
Convertible Redeemable Preferred Stock |
Stockholder s ’ |
|||||||||||||||||||||||||||||||||||||||||||||||
Series A |
Series B |
Series B-1 |
Warrants |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholder s’ Equity |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 |
$ |
$ |
$ |
$ |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
|
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|||||||||||||||||||||||||
Adjusted balance, beginning of period |
— | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Vesting of warrant issued to a customer |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||
Balance, September 30, 2020 |
$ |
$ |
$ |
$ |
— |
( |
) |
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Convertible Redeemable Preferred Stock |
Stockholder s’ |
|||||||||||||||||||||||||||||||||||||||||||||||
Series A |
Series B |
Series B-1 |
Warrants |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholder s’ Equity |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||||||||||||||||
Balance, December 3 1 , 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||
Adjusted balance, beginning of period |
— | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Equity instruments issued in consideration for intellectual property and research and development arrangements |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Merger and PIPE transaction, net of transaction costs |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
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Balance, September 30, 2021 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Nine Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
||||||||
Non-cash research and development arrangements |
— | |||||||
Amortization of customer warrant |
||||||||
Offering costs associated with warrants |
— | |||||||
Stock-based compensation |
||||||||
Non-cash operating lease expense |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) |
( |
) | ||||
Prepaid expenses and other current assets |
( |
) |
( |
) | ||||
Other noncurrent assets |
( |
) |
||||||
Accounts payable |
( |
) |
||||||
Accrued expenses |
|
|
||||||
Operating lease liabilities |
( |
) |
||||||
Unearned revenue |
|
|
||||||
|
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|
|
|||||
Net cash used in operating activities |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
( |
) |
( |
) | ||||
Capitalized software development costs |
( |
) |
( |
) | ||||
Intangible asset acquisition costs |
( |
) |
( |
) | ||||
Proceeds from disposal of assets |
|
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|
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|
|||||
Net cash used in investing activities |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from stock options exercised |
||||||||
Repurchase of early exercised stock options |
( |
) | — |
|||||
Proceeds from merger and PIPE transaction, net of transaction costs |
— | |||||||
|
|
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|
|||||
Net cash provided by financing activities |
||||||||
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|
|||||
Net change in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at the beginning of the period |
||||||||
|
|
|
|
|||||
Cash and cash equivalents at the end of the period |
$ | $ | ||||||
Supplemental disclosures of non-cash investing and financing transactions: |
||||||||
Issuance of common stock for intellectual property |
$ | $ | — | |||||
Issuance of common stock for research and development arrangement |
$ | $ | — | |||||
Property and equipment purchases in accounts payable and accrued expenses |
$ | |
$ | |||||
Intangible asset purchases in accounts payable and accrued expenses |
$ | |
$ | |||||
Transaction costs in accounts payable and accrued expenses |
$ | — |
||||||
Vesting of warrants |
$ | — | $ |
September 30, 2021 |
December 31, 2020 |
|||||||
Billed accounts receivable |
$ | |
$ | |
||||
Unbilled accounts receivable |
||||||||
|
|
|
|
|||||
Total accounts receivable |
$ |
$ |
• | Level 1 — Observable inputs, which include unadjusted quoted prices in active markets for identical assets or liabilities. |
• | Level 2 — Observable inputs other than Level 1 inputs, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the 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 by using pricing models, discounted cash flow methodologies or similar techniques. |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
Numerator: |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net loss available to common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Denominator: |
||||||||||||||||
Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to common stockholders – basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Common stock options outstanding |
||||||||||||||||
Warrants to purchase common stock |
||||||||||||||||
Public and private warrants |
— | — | ||||||||||||||
Unvested founders’ shares |
— | — | ||||||||||||||
Unvested common stock |
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|
|||||||||
Total |
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|
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|
|
|
|
|
September 30, 2021 |
December 31, 2020 |
|||||||
Computer equipment and acquired computer software |
$ | $ | ||||||
Machinery, equipment, furniture, and fixtures |
||||||||
Leasehold improvements |
||||||||
Quantum computing systems |
||||||||
|
|
|
|
|||||
Gross p roperty and e quipment |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Property and e quipment, net |
$ |
$ |
||||||
|
|
|
|
Fair Value Measured as of September 30, 2021: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
|
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|
|||||||||
Liabilities : |
||||||||||||||||
Public w arrants |
||||||||||||||||
Private p lacement w arrants |
||||||||||||||||
Total liabilities |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
Fair Value Measured as of December 31, 2020: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
September 30, 2021 |
||||
Exercise Price |
$ | |
||
Stock Price |
$ | |||
Volatility |
% | |||
Term |
||||
Risk-free rate |
% | |||
Dividend yield |
% |
• | 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 ( |
• |
in whole and not in part; |
• |
|
• |
|
• |
if, and only if, the closing price of common stock equals or exceeds $18.00 per share (as adjusted) for any |
• |
in whole and not in part; |
• |
at $ 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 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Risk- Free Interest Rate |
% | % | % | % | ||||||||||||
Expected Term (in years) |
— | |||||||||||||||
Expected Volatility |
% | % | % | % | ||||||||||||
Dividend Yield |
% | % | % | % |
Number of Option Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value (in millions) |
|||||||||||||
Outstanding as of December 31, 2019 |
$ | |
|
|||||||||||||
Granted |
$ | |||||||||||||||
Exercised |
( |
) | $ | |||||||||||||
Cancelled/ Forfeited |
( |
) | $ | |||||||||||||
|
|
|||||||||||||||
Outstanding as of September 30, 2020 |
$ |
Number of Option Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value (in millions) |
|||||||||||||
Outstanding as of December 31, 2020 |
$ | |
||||||||||||||
Granted |
$ | |||||||||||||||
Exercised |
( |
) | $ | |||||||||||||
Cancelled/ Forfeited |
( |
) | $ | |||||||||||||
|
|
|||||||||||||||
Outstanding as of September 30, 2021 |
$ | |||||||||||||||
|
|
|||||||||||||||
Exercisable as of September 30, 2021 |
$ | |||||||||||||||
|
|
|||||||||||||||
Exercisable and expected to vest at September 30, 2021 |
$ | |
||||||||||||||
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Cost of revenue |
$ | $ | $ | $ | ||||||||||||
Research and development |
||||||||||||||||
Sales and marketing |
||||||||||||||||
General and administrative |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Stock-based compensation, net of amounts capitalized |
||||||||||||||||
Capitalized stock-based compensation – Intangibles and fixed assets |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total stock-based compensation |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenue |
— | — | ||||||||||||||
Cost of revenue |
— | — | ||||||||||||||
Research and development |
||||||||||||||||
Sales and marketing |
— | — | ||||||||||||||
General and administrative |
September 30, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Accounts receivable |
|
|
|
|
|
|
— |
|
Prepaid expenses and other current assets |
||||||||
Operating lease right-of-use |
||||||||
Other noncurrent assets |
||||||||
Liabilities |
||||||||
Accounts payable |
||||||||
Current operating lease liabilities |
||||||||
Unearned r evenue |
|
|
|
|
|
|
— |
|
Non-current operating lease liabilities |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Industry benchmarking by the Quantum Economic Development Consortium, a third-party industry group, demonstrated the superior power of IonQ hardware compared to key competitors. |
• | First team globally to show fault-tolerant error correction in practice in a peer-reviewed paper published in Nature , alongside researchers from Duke University, the University of Maryland and the Georgia Institute of Technology. |
• | Debuted the industry’s first Reconfigurable Multicore Quantum Architecture, creating a path to scale quantum computers with potentially hundreds of qubits on one chip. |
• | A partnership with The University of Maryland to create the National Quantum Lab at Maryland (Q-Lab), the nation’s first user facility that enables hands-on access to a commercial-grade quantum computer. |
• | Announced partnerships and collaborations with leading organizations such as Accenture, Goldman Sachs, Fidelity Center for Applied Research and GE Research. |
• | Continued our hiring of world-class talent with key positions filled by Tom Jones as Chief People Officer (Blue Origin, Microsoft, Honeywell), Ariel Braunstein as Senior Vice President of Product Management (Google, Lytro, Cisco), and Dean Kassmann as Vice President of Research and Development (Blue Origin, Amazon). |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenue |
$ | 233 | $ | — | $ | 451 | $ | — | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) (1) |
234 | 57 | 742 | 57 | ||||||||||||
Research and development (1) |
6,180 | 2,339 | 15,311 | 7,643 | ||||||||||||
Sales and marketing (1) |
1,286 | 81 | 2,384 | 263 | ||||||||||||
General and administrative (1) |
2,461 | 727 | 8,321 | 1,840 | ||||||||||||
Depreciation and amortization |
596 | 372 | 1,543 | 995 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating costs and expenses |
10,757 | 3,576 | 28,301 | 10,798 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(10,524 | ) | (3,576 | ) | (27,850 | ) | (10,798 | ) | ||||||||
Offering costs associated with warrants |
(4,259 | ) | — | (4,259 | ) | — | ||||||||||
Other income |
2 | 11 | 7 | 305 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before benefit for income taxes |
(14,781 | ) | (3,565 | ) | (32,102 | ) | (10,493 | ) | ||||||||
Benefit for income taxes |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (14,781 | ) | $ | (3,565 | ) | $ | (32,102 | ) | $ | (10,493 | ) | ||||
|
|
|
|
|
|
|
|
(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 September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenue |
$ | 15 | $ | — | $ | 46 | $ | — | ||||||||
Research and development |
1,181 | 76 | 2,351 | 349 | ||||||||||||
Sales and marketing |
22 | — | 47 | — | ||||||||||||
General and administrative |
837 | 105 | 3,485 | 332 |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Revenue |
$ | 233 | $ | — | $ | 233 | 100 | % |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 234 | $ | 57 | $ | 177 | 311 | % |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Research and development |
$ | 6,180 | $ | 2,339 | $ | 3,841 | 164 | % |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Sales and marketing |
$ | 1,286 | $ | 81 | $ | 1,205 | 1488 | % |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
General and administrative |
$ | 2,461 | $ | 727 | $ | 1,734 | 239 | % |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Depreciation and amortization |
$ | 596 | $ | 372 | $ | 224 | 60 | % |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Offering costs associated with warrants |
$ | 4,259 | $ | — | $ | 4,259 | 100 | % |
Three Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Other income |
$ | 2 | $ | 11 | $ | (9 | ) | (82 | )% |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Revenue |
$ | 451 | $ | — | $ | 451 | 100 | % |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 742 | $ | 57 | $ | 685 | 1202 | % |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Research and development |
$ | 15,311 | $ | 7,643 | $ | 7,668 | 100 | % |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Sales and marketing |
$ | 2,384 | $ | 263 | $ | 2,121 | 806 | % |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
General and administrative |
$ | 8,321 | $ | 1,840 | $ | 6,481 | 352 | % |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Depreciation and amortization |
$ | 1,543 | $ | 995 | $ | 548 | 55 | % |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Offering costs associated with warrants |
$ | 4,259 | $ | — | $ | 4,259 | 100 | % |
Nine Months Ended September 30, |
$ Change |
% Change |
||||||||||||||
2021 |
2020 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Other income |
$ | 7 | $ | 305 | $ | (298 | ) | (98 | )% |
Nine Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Net cash used in operating activities |
$ | (21,851 | ) | $ | (8,322 | ) | ||
Net cash used in investing activities |
$ | (6,914 | ) | $ | (9,091 | ) | ||
Net cash provided by financing activities |
$ | 579,939 | $ | 29 |
As of December 31, 2020 |
Payments Due by Period |
|||||||||||||||||||
Total |
Less than 1 Year |
1-3 Years |
3-5 Years |
More than 5 Years |
||||||||||||||||
( in thousands ) |
||||||||||||||||||||
Contractual Obligations: |
||||||||||||||||||||
Operating lease obligation (1) |
$ | 7,544 | $ | 561 | $ | 1,315 | $ | 1,522 | $ | 4,146 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 7,544 | $ | 561 | $ | 1,315 | $ | 1,522 | $ | 4,146 | ||||||||||
|
|
|
|
|
|
|
|
|
|
As of September 30, 2021 |
Payments Due by Period |
|||||||||||||||||||
Total |
Less than 1 Year |
1-3 Years |
3-5 Years |
More than 5 Years |
||||||||||||||||
( in thousands ) |
||||||||||||||||||||
Contractual Obligations: |
||||||||||||||||||||
Operating lease obligation (1) |
$ | 7,140 | $ | 639 | $ | 1,394 | $ | 1,556 | $ | 3,551 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 7,140 | $ | 639 | $ | 1,394 | $ | 1,556 | $ | 3,551 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) |
Includes future minimum payments for an operating lease of corporate office facilities. |
• | Expected Volatility |
• | Risk-Free Interest Rate traded non-inflation-indexed U.S. treasury securities with contract maturities equal to the expected term. |
• | Dividend Yield |
• | Expected Term |
• | Fair Value of Common Stock. |
• | Forfeitures |
• | contemporaneous valuations performed at periodic intervals by independent, third-party specialists; |
• | our actual operating and financial performance; |
• | our current business conditions and projections; |
• | our progress on research and development efforts; |
• | our stage of development; |
• | the prices, preferences, and privileges of shares of our convertible preferred stock relative to shares of common stock; |
• | likelihood of achieving a liquidity event for the underlying equity instruments, such as a business combination, given prevailing market conditions; |
• | lack of marketability of our common stock; and |
• | macroeconomic conditions. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
• | we lack sufficient accounting and financial reporting personnel with requisite knowledge and experience in the application of U.S. GAAP and SEC rules to facilitate accurate and timely financial reporting. The limited personnel also contributed to a lack of clearly established authorities and approvals and insufficient segregation of duties. |
• | 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. |
• | adding additional qualified accounting personnel, establishing defined policies for approval of transactions and segregating duties among accounting personnel; and |
• | upgrading our financial accounting system to one that can support effective information technology general controls as well as the anticipated growth of the business. |
• | 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 expects to incur significant expenses and continuing losses for the foreseeable future. |
• | We may not be able to scale our business quickly enough to meet customer and market demand, which could result in lower profitability or cause us to fail to execute on our business strategies. |
• | Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate. |
• | Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all. |
• | Our management has limited experience in operating a public company. |
• | We have identified a material weakness in our internal control over financial reporting. If we are unable to remediate this material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting, this may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations or cause our access to the capital markets to be impaired. |
• | We have not produced a scalable quantum computer and face significant barriers in our attempts to produce quantum computers. If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail. |
• | The quantum computing industry is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers. |
• | Our business is currently dependent upon our relationship with our cloud providers. There are no assurances that we will be able to commercialize quantum computers from our relationships with cloud providers. |
• | Even if we are successful in developing quantum computing systems and executing our strategy, competitors in the industry may achieve technological breakthroughs which render our quantum computing systems obsolete or inferior to other products. |
• | We may be unable to reduce the cost per qubit, which may prevent us from pricing our quantum systems competitively. |
• | The quantum computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solution does not drive commercial engagement, the growth of our business will be harmed. |
• | If our computers fail to achieve a broad quantum advantage, our business, financial condition and future prospects may be harmed. |
• | We could suffer disruptions, outages, defects and other performance and quality problems with our quantum computing systems or with the public cloud and internet infrastructure on which we rely. |
• | We may face unknown supply chain issues that could delay the introduction of our product and negatively impact our business and operating results. |
• | If we cannot successfully execute on our strategy, including in response to changing customer needs and new technologies and other market requirements, or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed. |
• | Our products may not achieve market success, but will still require significant costs to develop. |
• | We are highly dependent on our co-founders, and our ability to attract and retain senior management and other key employees, such as quantum physicists and other key technical employees, is critical to our success. If we fail to retain talented, highly-qualified senior management, engineers and other key employees or attract them when needed, such failure could negatively impact our business. |
• | Our future growth and success depend on our ability to sell effectively to large customers. |
• | We may not be able to accurately estimate the future supply and demand for our quantum computers, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays. |
• | Our systems depend on the use of a particular isotope of an atomic element that provides qubits for our ion trap technology. If we are unable to procure these isotopically enriched atomic samples, or are unable to do so on a timely and cost-effective basis, and in sufficient quantities, we may incur significant costs or delays which could negatively affect our operations and business. |
• | If our quantum computing systems are not compatible with some or all industry-standard software and hardware in the future, our business could be harmed. |
• | 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. |
• | We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws. |
• | 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. |
• | Licensing of intellectual property is of critical importance to our business. For example, we license patents (some of which are foundational patents) and other intellectual property from the University of Maryland and Duke University on an exclusive basis. If the license agreement with these universities terminates, or if any of the other agreements under which we acquired or licensed, or will acquire or license, material intellectual property rights is terminated, we could lose the ability to develop and operate our business. |
• | 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. |
• | we lack sufficient accounting and financial reporting personnel with requisite knowledge and experience in the application of accounting principles generally accepted in the United States of America (“U.S. GAAP”) and SEC rules to facilitate accurate and timely financial reporting. The limited personnel also contributed to a lack of clearly established authorities and approvals and insufficient segregation of duties. |
• | 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. |
• | adding additional qualified accounting personnel, establishing defined policies for approval of transactions and segregating duties among accounting personnel; and |
• | upgrading our financial accounting system to one that can support effective information technology general controls as well as the anticipated growth of the business. |
• | gate fidelity, error correction and miniaturization may not commercialize from the lab and scale as hoped or at all; |
• | it could prove more challenging and take materially longer than expected to operate parallel gates within a single ion trap and maintain gate fidelity; |
• | the photonic interconnect between ion traps could prove more challenging and take longer to perfect than currently expected. This would limit our ability to scale beyond a single ion trap of approximately 22 logical qubits; |
• | it could take longer to tune the qubits in a single ion trap, as well as preserve the stability of the qubits within a trap as we seek to maximize the total number of qubits within one trap; |
• | the gate speed in our technology could prove more difficult to improve than expected; and |
• | the scaling of fidelity with qubit number could prove poorer than expected, limiting our ability to achieve larger quantum volume. |
• | large, well-established tech companies that generally compete in all of our markets, including Honeywell, Google, Microsoft, Amazon, Intel and IBM; |
• | countries such as China, Russia, Canada, Australia and the United Kingdom, and those in the European Union as of the date of this prospectus 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; |
• | financial problems of either manufacturers or component suppliers; |
• | significantly increased freight charges, or raw material costs and other expenses associated with our business; |
• | other factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to deliver components to us on a timely basis; |
• | a failure to develop our supply chain management capabilities and recruit and retain qualified professionals; |
• | a failure to adequately authorize procurement of inventory by our contract manufacturers; or |
• | a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs. |
• | pricing and the perceived value of our systems relative to its cost; |
• | delays in releasing quantum computers with sufficient performance and scale to the market; |
• | failure to produce products of consistent quality that offer functionality comparable or superior to existing or new products; |
• | ability to produce products fit for their intended purpose; |
• | failures to accurately predict market or customer demands; |
• | defects, errors or failures in the design or performance of our quantum computing system; |
• | negative publicity about the performance or effectiveness of our system; |
• | strategic reaction of companies that market competitive products; and |
• | the introduction or anticipated introduction of competing technology. |
• | obtain expertise in relevant markets; |
• | obtain sales and marketing services or support; |
• | obtain equipment and facilities; |
• | develop relationships with potential future customers; and |
• | generate revenue. |
• | success and timing of development activity; |
• | customer acceptance of our quantum computing systems; |
• | breakthroughs in classical computing or other computing technologies that could eliminate the advantages of quantum computing systems rendering them less practical to customers; |
• | competition, including from established and future competitors; |
• | whether we can obtain sufficient capital to sustain and grow our business; |
• | our ability to manage our growth; |
• | our ability to retain existing key management, integrate recent hires and attract, retain and motivate qualified personnel; and |
• | the overall strength and stability of domestic and international economies. |
• | the scope of rights granted under the license agreement and other interpretation-related issues; |
• | whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
• | our right to sublicense patent and other rights to third parties; |
• | our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product and technology, and what activities satisfy those diligence obligations; |
• | the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and the company; |
• | our right to transfer or assign the license; and |
• | the effects of termination. |
• | cease selling or using solutions or services that incorporate the intellectual property rights that allegedly infringe, misappropriate or violate the intellectual property of a third party; |
• | make substantial payments for legal fees, settlement payments or other costs or damages; |
• | obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; |
• | redesign the allegedly infringing solutions to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible; or |
• | indemnify organizations using our platform or third-party service providers. |
• | variations in quarterly operating results or dividends, if any, to stockholders; |
• | additions or departures of key management personnel; |
• | publication of research reports about our industry; |
• | litigation and government investigations; |
• | changes or proposed changes in laws or regulations or differing interpretations or enforcement of laws or regulations affecting our business; |
• | adverse market reaction to any indebtedness incurred or securities issued in the future; |
• | changes in market valuations of similar companies; |
• | adverse publicity or speculation in the press or investment community; |
• | announcements by competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures, or capital commitments; and |
• | the impact of the COVID-19 pandemic on our management, employees, partners, customers, and operating results. |
• | labor availability and costs for hourly and management personnel; |
• | profitability of our products, especially in new markets and due to seasonal fluctuations; |
• | changes in interest rates; |
• | impairment of long-lived assets; |
• | macroeconomic conditions, both nationally and locally; |
• | 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 in the future, 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 |
• | any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the amended and restated 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 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
Period |
Total Number of Shares (or Units) Purchased |
Average Price Paid per Share (or Unit) |
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
||||||||||||
7/1/2021 – 7/31/2021 |
— | — | — | — | ||||||||||||
8/1/2021 – 8/31/2021 |
— | — | — | — | ||||||||||||
9/1/2021 – 9/30/2021 |
100,000 | 9.68 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
100,000 | 9.68 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
+ | 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. (Formerly Known as dMY Technology Group, Inc. III) | ||||||||
Date: November 15, 2021 | /s/ Peter Chapman | |||||||
Name: | Peter Chapman | |||||||
Title: | President and Chief Executive Officer (Principal Executive Officer) | |||||||
Date: November 15, 2021 | /s/ Thomas Kramer | |||||||
Name: | Thomas Kramer | |||||||
Title: | Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) |
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: November 15, 2021 | 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: November 15, 2021 | 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 September 30, 2021, 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: November 15, 2021
/s/ Peter Chapman |
/s/ Thomas Kramer | |||
Peter Chapman | Thomas Kramer | |||
President and Chief Executive Officer (Principal Executive Officer) |
Chief Financial Officer (Principal Financial Officer) |
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Revenue | $ 233 | $ 451 | ||
Costs and expenses: | ||||
Cost of revenue (excluding depreciation and amortization) | 234 | $ 57 | 742 | $ 57 |
Research and development | 6,180 | 2,339 | 15,311 | 7,643 |
Sales and marketing | 1,286 | 81 | 2,384 | 263 |
General and administrative | 2,461 | 727 | 8,321 | 1,840 |
Depreciation and amortization | 596 | 372 | 1,543 | 995 |
Total operating costs and expenses | 10,757 | 3,576 | 28,301 | 10,798 |
Loss from operations | (10,524) | (3,576) | (27,850) | (10,798) |
Offering costs associated with warrants | (4,259) | (4,259) | ||
Other income | 2 | 11 | 7 | 305 |
Loss before benefit for income taxes | (14,781) | (3,565) | (32,102) | (10,493) |
Benefit for income taxes | 0 | 0 | 0 | 0 |
Net loss and comprehensive loss | $ (14,781) | $ (3,565) | $ (32,102) | $ (10,493) |
Net loss per share attributable to common stockholders - basic and diluted | $ (0.12) | $ (0.03) | $ (0.27) | $ (0.09) |
Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted | 120,605,457 | 115,369,517 | 119,535,167 | 114,597,135 |
Condensed Consolidated Statements of Changes in Convertible Redeemable Preferred Stock, Warrants and Stockholders' Equity - USD ($) |
Total |
Stockholders' Equity [Member] |
Cumulative Effect, Period of Adoption, Adjustment [Member]
Stockholders' Equity [Member]
|
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Stockholders' Equity [Member]
|
Common Stock [Member]
Stockholders' Equity [Member]
|
Common Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Stockholders' Equity [Member]
|
Common Stock [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Stockholders' Equity [Member]
|
Additional Paid-In Capital [Member]
Stockholders' Equity [Member]
|
Additional Paid-In Capital [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Stockholders' Equity [Member]
|
Additional Paid-In Capital [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Stockholders' Equity [Member]
|
Accumulated Deficit [Member]
Stockholders' Equity [Member]
|
Accumulated Deficit [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Stockholders' Equity [Member]
|
Warrant [Member] |
Warrant [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
|
Series A Convertible Redeemable Preferred Stock [Member] |
Series A Convertible Redeemable Preferred Stock [Member]
Convertible Redeemable Preferred Stock [Member]
|
Series A Convertible Redeemable Preferred Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Convertible Redeemable Preferred Stock [Member]
|
Series B Convertible Redeemable Preferred Stock [Member] |
Series B Convertible Redeemable Preferred Stock [Member]
Convertible Redeemable Preferred Stock [Member]
|
Series B Convertible Redeemable Preferred Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Convertible Redeemable Preferred Stock [Member]
|
Series B-1 Convertible Redeemable Preferred Stock [Member] |
Series B-1 Convertible Redeemable Preferred Stock [Member]
Convertible Redeemable Preferred Stock [Member]
|
Series B-1 Convertible Redeemable Preferred Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Convertible Redeemable Preferred Stock [Member]
|
Series B-1 Warrants Relating To Redeemable Convertible Preferred Stock [Member] |
Series B-1 Warrants Relating To Redeemable Convertible Preferred Stock [Member]
Convertible Redeemable Preferred Stock [Member]
|
Series B-1 Warrants Relating To Redeemable Convertible Preferred Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Temporary Equity at Dec. 31, 2019 | $ 1,925,000 | $ (1,925,000) | $ 21,111,000 | $ (21,111,000) | $ 61,867,000 | $ (61,867,000) | ||||||||||||||||||||
Temporary Equity (in shares) at Dec. 31, 2019 | 2,000,000 | (2,000,000) | 9,753,798 | (9,753,798) | 11,166,941 | (11,166,941) | ||||||||||||||||||||
Balance at Dec. 31, 2019 | $ (20,917,000) | $ 84,903,000 | $ 63,986,000 | $ 1,000 | $ 2,000 | $ 3,000 | $ 3,263,000 | $ 84,901,000 | $ 88,164,000 | $ (24,181,000) | $ (24,181,000) | |||||||||||||||
Balance (in shares) at Dec. 31, 2019 | 5,098,562 | 108,336,247 | 113,434,809 | |||||||||||||||||||||||
Net loss | $ (10,493,000) | (10,493,000) | (10,493,000) | |||||||||||||||||||||||
Vesting of warrant issued to a customer | 566,000 | 566,000 | ||||||||||||||||||||||||
Stock Options Exercised | 30,000 | $ 0 | 30,000 | |||||||||||||||||||||||
Stock Options Exercised (in shares) | 235,887 | 235,887 | ||||||||||||||||||||||||
Vesting of Restricted Common Stock | 170,000 | 170,000 | ||||||||||||||||||||||||
Vesting of Restricted Common Stock (in shares) | 1,771,198 | |||||||||||||||||||||||||
Stock-based compensation | 612,000 | 612,000 | ||||||||||||||||||||||||
Balance at Sep. 30, 2020 | 54,871,000 | $ 3,000 | 89,542,000 | (34,674,000) | ||||||||||||||||||||||
Balance (in shares) at Sep. 30, 2020 | 115,441,894 | |||||||||||||||||||||||||
Temporary Equity at Sep. 30, 2020 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||
Temporary Equity (in shares) at Sep. 30, 2020 | 0 | 0 | 0 | |||||||||||||||||||||||
Temporary Equity at Jun. 30, 2020 | 0 | $ 0 | $ 1,925,000 | $ (1,925,000) | $ 21,111,000 | $ (21,111,000) | $ 61,867,000 | $ (61,867,000) | ||||||||||||||||||
Temporary Equity (in shares) at Jun. 30, 2020 | 2,000,000 | (2,000,000) | 9,753,798 | (9,753,798) | 11,166,941 | (11,166,941) | ||||||||||||||||||||
Balance at Jun. 30, 2020 | (27,287,000) | 84,903,000 | 57,616,000 | $ 1,000 | $ 2,000 | $ 3,000 | 3,821,000 | 84,901,000 | 88,722,000 | (31,109,000) | (31,109,000) | |||||||||||||||
Balance (in shares) at Jun. 30, 2020 | 5,527,749 | 109,644,604 | 115,172,353 | |||||||||||||||||||||||
Net loss | $ (3,565,000) | (3,565,000) | (3,565,000) | |||||||||||||||||||||||
Vesting of warrant issued to a customer | 566,000 | 566,000 | ||||||||||||||||||||||||
Stock Options Exercised | 3,000 | $ 16,513,000 | 3,000 | |||||||||||||||||||||||
Vesting of Restricted Common Stock | 24,000 | 24,000 | ||||||||||||||||||||||||
Vesting of Restricted Common Stock (in shares) | 253,028 | |||||||||||||||||||||||||
Stock-based compensation | 227,000 | 227,000 | ||||||||||||||||||||||||
Balance at Sep. 30, 2020 | 54,871,000 | $ 3,000 | 89,542,000 | (34,674,000) | ||||||||||||||||||||||
Balance (in shares) at Sep. 30, 2020 | 115,441,894 | |||||||||||||||||||||||||
Temporary Equity at Sep. 30, 2020 | 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||
Temporary Equity (in shares) at Sep. 30, 2020 | 0 | 0 | 0 | |||||||||||||||||||||||
Temporary Equity at Dec. 31, 2020 | $ 0 | $ 1,925,000 | $ (1,925,000) | $ 0 | $ 21,111,000 | $ (21,111,000) | $ 0 | $ 61,867,000 | $ (61,867,000) | $ 566,000 | $ (566,000) | |||||||||||||||
Temporary Equity (in shares) at Dec. 31, 2020 | 0 | 2,000,000 | (2,000,000) | 0 | 9,753,798 | (9,753,798) | 0 | 11,166,941 | (11,166,941) | |||||||||||||||||
Balance at Dec. 31, 2020 | 53,703,000 | (31,766,000) | 85,469,000 | 53,703,000 | $ 1,000 | $ 2,000 | $ 3,000 | 7,838,000 | 85,467,000 | 93,305,000 | (39,605,000) | (39,605,000) | ||||||||||||||
Balance (in shares) at Dec. 31, 2020 | 6,262,460 | 111,884,335 | 118,146,795 | |||||||||||||||||||||||
Net loss | $ (32,102,000) | (32,102,000) | (32,102,000) | |||||||||||||||||||||||
Equity instruments issued in consideration for intellectual property and research and development arrangements | 2,381,000 | 2,381,000 | ||||||||||||||||||||||||
Equity instruments issued in consideration for intellectual property and research and development arrangements (in shares) | 385,797 | |||||||||||||||||||||||||
Stock Options Exercised | 256,000 | 256,000 | ||||||||||||||||||||||||
Stock Options Exercised (in shares) | 3,308,594 | 974,013 | ||||||||||||||||||||||||
Vesting of Restricted Common Stock | 796,000 | 796,000 | ||||||||||||||||||||||||
Vesting of Restricted Common Stock (in shares) | 387,971 | |||||||||||||||||||||||||
Merger and PIPE transaction, net of transaction costs, Value | 526,505,000 | $ 7,000 | 526,498,000 | |||||||||||||||||||||||
Merger and PIPE transaction, net of transaction costs, Shares | 70,302,677 | |||||||||||||||||||||||||
Stock-based compensation | 6,128,000 | 6,128,000 | ||||||||||||||||||||||||
Balance at Sep. 30, 2021 | $ 557,667,000 | 557,667,000 | $ 10,000 | 629,364,000 | (71,707,000) | |||||||||||||||||||||
Balance (in shares) at Sep. 30, 2021 | 190,197,253 | |||||||||||||||||||||||||
Temporary Equity at Sep. 30, 2021 | 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||
Temporary Equity (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Temporary Equity at Jun. 30, 2021 | 566,000 | $ (566,000) | $ 1,925,000 | $ (1,925,000) | $ 21,111,000 | $ (21,111,000) | $ 61,867,000 | $ (61,867,000) | ||||||||||||||||||
Temporary Equity (in shares) at Jun. 30, 2021 | 2,000,000 | (2,000,000) | 9,753,798 | (9,753,798) | 11,166,941 | (11,166,941) | ||||||||||||||||||||
Balance at Jun. 30, 2021 | (42,060,000) | $ 85,469,000 | $ 43,409,000 | $ 1,000 | $ 2,000 | $ 3,000 | 14,865,000 | $ 85,467,000 | $ 100,332,000 | (56,926,000) | $ (56,926,000) | |||||||||||||||
Balance (in shares) at Jun. 30, 2021 | 6,635,988 | 113,023,018 | 119,659,006 | |||||||||||||||||||||||
Net loss | (14,781,000) | (14,781,000) | (14,781,000) | |||||||||||||||||||||||
Stock Options Exercised | 33,000 | $ 0 | 33,000 | |||||||||||||||||||||||
Stock Options Exercised (in shares) | 69,458 | |||||||||||||||||||||||||
Vesting of Restricted Common Stock | 380,000 | 380,000 | ||||||||||||||||||||||||
Vesting of Restricted Common Stock (in shares) | 166,112 | |||||||||||||||||||||||||
Merger and PIPE transaction, net of transaction costs, Value | 526,505,000 | $ 7,000 | 526,498,000 | |||||||||||||||||||||||
Merger and PIPE transaction, net of transaction costs, Shares | 70,302,677 | |||||||||||||||||||||||||
Stock-based compensation | 2,121,000 | 2,121,000 | ||||||||||||||||||||||||
Balance at Sep. 30, 2021 | $ 557,667,000 | $ 557,667,000 | $ 10,000 | $ 629,364,000 | $ (71,707,000) | |||||||||||||||||||||
Balance (in shares) at Sep. 30, 2021 | 190,197,253 | |||||||||||||||||||||||||
Temporary Equity at Sep. 30, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||
Temporary Equity (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | 0 | 0 |
Description of Business |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Description of Business | 1. Description of Business IonQ, Inc. (“IonQ” or “the Company”), formerly known as dMY Technology Group, Inc. III (“dMY”), was incorporated in the state of Delaware in September 2020 and formed as a special purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. IonQ Quantum, Inc. (formerly known as IonQ, Inc., and referred to as “Legacy IonQ” herein), was incorporated in the state of Delaware in September 2015 and is headquartered in College Park, Maryland. On March 7, 2021, Legacy IonQ entered into an Agreement and Plan of Merger (the “Merger Agreement”) with dMY and Ion Trap Acquisition Inc. (“Merger Sub”), a direct, wholly owned subsidiary of dMY. Pursuant to the Merger Agreement, on September 30, 2021 (“the Closing Date”), the Merger Sub was merged with and into Legacy IonQ with Legacy IonQ continuing as the surviving corporation following the Merger, becoming a wholly owned subsidiary of dMY and the separate corporate existence of the Merger Sub ceased (the “Business Combination”). Commensurate with the Business Combination, dMY changed its name to IonQ, Inc. and Legacy IonQ changed its name to IonQ Quantum, Inc. After the Business Combination, IonQ’s common stock and public warrants are traded on the New York Stock Exchange (“NYSE”) under the symbols “IONQ” and “IONQ WS,” respectively. Unless otherwise indicated, references in this Quarterly Report on Form 10-Q to the “Company” and “IonQ” refer to the consolidated operations of IonQ, Inc. and IonQ Quantum, Inc.. References to “dMY” refer to the company prior to the consummation of the Business Combination and references to “Legacy IonQ” refer to IonQ, Inc. prior to the consummation of the Business Combination. IonQ is engaged in quantum computing and develops general-purpose quantum computing systems designed to solve the world’s most complex problems, and transform business, society, and the planet for the better. Prior to 2019, the Company built certain quantum computing systems solely for research & development purposes. To operate the quantum computing systems, the Company has developed custom hardware, custom firmware, and an operating system to orchestrate the quantum computers. During 2019, the Company began to commercialize its quantum computing systems and entered into its first significant customer agreements. Currently, the Company permits customers to use the quantum computing systems through a quantum-computing-as-a-service Business Combination While the legal acquirer in the Merger Agreement is dMY, for financial accounting and reporting purposes under accounting principles generally accepted in the United States of America (“U.S. GAAP”), Legacy IonQ is the accounting acquirer and the merger is accounted for as a “reverse recapitalization” (i.e., a capital transaction involving the issuance of stock by dMY for the stock of Legacy IonQ). For accounting purposes, the Business Combination was treated as the equivalent of Legacy IonQ issuing stock for the net assets of dMY, accompanied by a recapitalization. The net assets of dMY are stated at historical cost, and no goodwill or other intangible assets were recorded. Because Legacy IonQ was deemed the accounting acquirer in the Business Combination, the historical financial statements of Legacy IonQ are the historical financial statements of the Company upon the consummation of the Business Combination. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy IonQ prior to the Business Combination; (ii) the combined results of dMY and Legacy IonQ following the close of the Business Combination on September 30, 2021; and (iii) the assets and liabilities of Legacy IonQ stated at their historical cost. In accordance with guidance applicable to these circumstances, the equity structure has been retroactively restated in all comparative periods up to the Closing Date to reflect the number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy IonQ’s stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to Legacy IonQ convertible redeemable preferred stock and warrants and Legacy IonQ common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination. Legacy IonQ’s convertible redeemable preferred stock and warrants previously classified as mezzanine equity were retroactively adjusted, converted into common stock , and reclassified to permanent equity because of the reverse recapitalization. At the Closing Date, the consummation of the Merger provided approximately $636.0 million of gross proceeds, including $345.0 million from the PIPE investment in common stock at $10.00 per share. In connection with the Business Combination , Legacy IonQ and dMY incurred direct and incremental costs of approximately $52 million related to the equity issuance, consisting primarily of banking, legal, accounting, and other professional fees, which were recorded to additional paid- capital as a reduction of proceeds.i nAdditionally, approximately $4.3 million in offering costs were allocated to liability-classified warrants assumed in the Merger and expensed upon the close of the Business Combination. Sponsor Support Agreement Concurrently with the execution of the Merger Agreement, certain former dMY sto entered into a sponsor support agreement. Under the sponsor support agreement, and effective upon the consummation of the Business Combination, 10% of the dMY Class B common stock (or 750,000 shares), which were converted into shares of common stock at the consummation of the Business Combination, were unvested and subject to certain vesting and forfeiture provisions (the “Vesting Shares”). ckholders These provisions provide that (i) one-third of the Vesting Shares shall vest at such time as (x) the closing price of common stock equals or exceeds $12.50 for any 20 trading days during any period of 30 consecutive trading days or (y) IonQ consummates a subsequent transaction (as defined) on or before the date that is five years after the consummation of the Business Combination, (ii) one-third of the Vesting Shares shall vest at such time as (x) the closing price of common stock equals or exceeds $15.00 for any 20 trading days during any period of 30 consecutive trading days or (y) IonQ consummates a subsequent transaction (as defined), on or before the date that is five years after the consummation of the Business Combination and (iii) one-third of the Vesting Shares shall vest at such time as (x) the closing price of common stock equals or exceeds $17.50 for any 20 trading days during any period of 30 consecutive trading days or (y) IonQ consummates a subsequent transaction (as defined), on or before the date that is five years after the consummation of the Business Combination. Vesting Shares that remain unvested on the first business day after five years from the closing of the Business Combination will be surrendered to IonQ without any consideration for such transfer. The Vesting Shares are accounted for as equity classified instruments and were included as merger consideration as part of the reverse recapitalization, and recorded in additional paid-in capital. Segment Reporting The Company operates as one operating segment as its chief executive officer, who is the chief operating decision maker, reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. |
Summary of Significant Accounting Policies |
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Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP as determined by the Financial Accounting Standards Board (“FASB”). Unaudited Interim Financial Information The interim condensed consolidated financial statements included in this quarterly report have been prepared by the Company and are unaudited, pursuant to the rules and regulations of the US Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures contained in this quarterly report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for a quarterly report and are adequate to make the information presented not misleading. The interim condensed consolidated financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. These interim condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2020 included in our final proxy statement/prospectus filed with the SEC on August 12 , 2021. The Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2021 or thereafter. All references to September 30, 2021 and 2020 in the notes to the condensed consolidated financial statements are unaudited. Emerging Growth Company The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company remains an emerging growth company until the earliest of (i) December , (ii) the last day of the fiscal year in which the Company has total annual gross revenue of at least $1.07 billion, (iii) the last day of the fiscal year in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by 31 , non-affiliates exceeds $700.0 million as of the prior June 30th or (iv) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Significant estimates and judgments are inherent in the analysis and measurement of items including, but not limited to revenue recognition, capitalization of internally developed software and quantum computing costs, useful lives of long-lived assets, commitments and contingencies, forecasts and assumptions used in determining the fair value of historically granted common stock and warrants prior to the Business Combination and forecasts and assumptions used in determining the fair value of warrant liabilities. Management bases its estimates and assumptions on historical experience, expectations, forecasts, and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ and be affected by changes in those estimates. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are non-interest bearing and stated at the gross invoiced amount. A receivable is recorded when the Company has an unconditional right to receive payment based on the satisfaction of performance obligations. Accounts Receivable are composed of the following (in thousands):
On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off. This assessment is based on management’s evaluation of past due receivables, collectability of specific accounts, historical loss experience and overall economic conditions. The Company did not have any allowance for doubtful accounts as of September 30, 2021 and December 31, 2020. Revenue Recognition The Company derives revenue from providing access to its QCaaS and professional services related to co-developing algorithms on the Quantum Computing Systems. In arrangements with the cloud service providers, the cloud service provider is considered the customer and IonQ does not have any contractual relationships with the cloud service providers’ end users. For these arrangements, revenue is recognized at the amount charged to the cloud service provider. For contracts with a fixed transaction price to provide stand-ready QCaaS access, the fixed fee is recognized as QCaaS subscription-based revenues on a straight-line basis over the access period. Any variable fees for usage over the contractual minimums are estimated at contract inception and recognized ratably over the access period unless such variable usage fees are probable of reversal in future periods. In those instances, variable usage fees are included in the determination of the transaction consideration once known. For contracts without fixed fees, variable usage fees are billed and recognized during the period of such usage. As of September 30, 2021, approximately $15.9 million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for non-cancelable contracts. The Company expects to recognize revenue of $1.1 million related to those remaining performance obligations during the remainder of 2021. The Company expects to recognize revenue of $4.5 million related to these remaining performance obligations in the year ending December 31, 2022 with the remainder recognized thereafter. The Company has not estimated the timing of revenue recognition for the remaining unsatisfied performance obligations related to usage-based contracts as the timing of customer usage cannot be predicted given the limited historical data. Early Exercise of Stock Options Stock options granted under the 2015 Equity Incentive Plan provide employee option holders, if approved by the Board, the right to exercise unvested options in exchange for restricted common stock, which is subject to a repurchase right held by the Company at the lower of (i) the fair market value of its common stock on the date of repurchase or (ii) the original purchase price. Early exercises of options are not deemed to be substantive exercises for accounting purposes and accordingly, amounts received for early exercises are recorded as a liability. In September 2021, we exercised our right to repurchase 100,000 shares related to the early exercise of stock options. The unvested shares were repurchased from an employee in connection with the termination of their service in exchange for $1.0 million. As of September 30, 2021, and December 31, 2020, there were 1,541,764 shares and no shares, respectively, subject to repurchase related to stock options early exercised and unvested. These amounts are reclassified to common stock and additional paid-in capital as the underlying shares vest. As of September 30, 2021, the Company recorded a liability related to these shares subject to repurchase in the amount of $3.4 million in its condensed consolidated balance sheet. The Company did not have any early exercises of stock options prior to 2021, and as a result there was no such balance as of December 31, 2020. , Property and Equipment, Net Property and equipment, net is stated at cost less accumulated depreciation. Historical cost of fixed assets is the cost as of the date acquired. Prior to 2019, we built certain quantum computing systems solely for research and development purposes and these quantum computing systems were deemed to have no alternative future use. In 2019, we began to commercialize our quantum computing systems via the offering of QCaaS and quantum computing systems built thereafter were determined to provide a probable future economic benefit. As a result, hardware and labor costs associated with the building of such quantum computing systems were capitalized. Costs to maintain quantum computing systems are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful life of two years for the quantum computing systems. Intangible Assets, Net The Company’s intangible assets include website domain costs, patents, intellectual property, and trademarks. Intangible assets with identifiable useful lives such as patents and intellectual property are initially valued at acquisition cost and are amortized over their estimated useful lives, which is generally 20 years, using the straight-line method. With respect to patents, acquisition costs include external legal and patent application costs. Intangible assets with indefinite useful lives are assessed for impairment at least annually. During the three months ended September 30, 2021 and 2020, the Company capitalized $0.2 million and $0.1 million, respectively, of intangible assets primarily related to intellectual property, and during the nine months ended September 30, 2021 and 2020, the Company capitalized $2.1 million and $0.3 million, respectively. Capitalized Internally Developed Software Capitalized internally developed software, which is included in intangible assets, net, consists of costs to purchase and develop internal-use software, which the Company uses to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended, until the time the software is placed in service for its intended use. Any costs incurred during subsequent efforts to upgrade and enhance the functionality of the software are also capitalized. Once this software is ready for use as part of the Company’s service offerings, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is typically assessed to be 3 years. During the three months ended September 30, 2021 and 2020, the Company capitalized $0.5 million and $0.3 million, respectively in , internal-use software costs, and during the nine months ended September 30, 2021 and 2020, the Company capitalized $1.3 million and $0.8 million, respectively, in internal-use software costs. The Company amortized $0.2 million and $0.1 million of capitalized internally developed software costs during the three months ended September 30, 2021 and 2020, respectively, and $0.5 million and $0.2 million of capitalized internally developed software costs during the nine months ended September 30, 2021 and 2020, respectively. Fair Value of Financial Instruments Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Due to their short-term nature, the carrying amounts reported in the Company’s financial statements approximates the fair value for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current liabilities. Cash and cash equivalents include cash in banks, checking deposits and money market funds. The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Warrant Liabilities The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. The warrants of dMY assumed in the Business Combination are classified as liabilities and remeasured at each reporting period (as more fully described in Note 10 ). The determination of the fair value of the warrant liabilities may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the United States . These deposits are typically in excess of insured limits.The Company’s accounts receivable are derived from revenue earned from customers primarily located in the United States . The Company performs periodic evaluations of its customers’ financial condition and generally does not require its customers to provide collateral or other security to support accounts receivable and maintains an allowance for doubtful accounts. Credit losses historically have not been material. Significant customers are those which represent more than 10% of the Company’s total revenue. The Company’s revenue was from 2 significant customers for the three months ended September 30, 2021 and from 3 significant customers for the nine months ended September 30, 2021. The Company did not have any revenue for the three and nine month periods ended September 30, 2020. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income ( by the weighted average number of shares of common stock during the period, plus common stock equivalents, outstanding during the period. If the Company reports a net loss, the computation of diluted loss per share excludes the effect of dilutive common stock equivalents, as their effect would be antidilutive. loss )Earnings (loss) per share calculations for all periods prior to the Business Combination have been retroactively restated to reflect the conversion of the Company’s convertible redeemable preferred stock and the equivalent number of shares reflecting the exchange ratio established in the reverse capitalization. The following table sets forth the computation of basic and diluted loss per share attributable to common stockholders (in thousands, except share and per share data):
In periods with a reported ne t loss, the effects of anti-dilutive stock options, unvested common stock (including unvested restricted common stock) and warrants are excluded and diluted loss per share is equal to basic loss per share. The following is a summary of the weighted average common stock equivalents for the securities outstanding during the respective periods that have been excluded from the computation of diluted net loss per common share, as their effect would be anti-dilutive:
Recently Issued Accounting Standards Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service ContractIn August 2020, the FASB issued ASU 2020-06, Debt, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . |
Property And Equipment, Net |
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Property And Equipment, Net | 3. PROPERTY AND EQUIPMENT, NET Property and equipment, net is composed of the following (in thousands):
Depreciation expense for the three months ended September 30, 2021 and 2020 was $0.4 million and $0.3 million, respective. Depreciation expense for the nine months ended September 30, 2021 and 2020 was $1.0 million and $0.8 million, respectively. |
Fair Value Measurement |
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Fair Value Measurement | 4. FAIR VALUE MEASUREMENT The Company follows the guidance in ASC Topic 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):
The Company’s warrant liabilities include both the p ublic w arrants and p rivate p lacement w arrants (see Note 10). Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period. As the warrants were assumed on September 30, 2021, there were no transfers between levels during the period. As of September 30, 2021, the p ublic w arrants were publicly traded at $3.46 per warrant. The estimated fair value of the p rivate p lacement w arrants is determined using Level 3 inputs. As of September 30, 2021, management determined the fair value of the p rivate p lacement w arrants using observable inputs in the Black-Scholes valuation model. Inherent in the valuation are assumptions related to expected stock-price volatility, expected term , risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. The following table provides quantitative information regarding Level 3 fair value measurement inputs for the p rivate p lacement w arrants as of September 30, 2021.
The Company did not have any Level 3 assets or liabilities as of December 31, 2020. |
Agreements With UMD And DUKE |
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Agreements With UMD And DUKE | 5. AGREEMENTS WITH UMD AND DUKE Exclusive License Agreement The Company entered into an exclusive license agreement (“License Agreement”) in July 2016 with the University of Maryland (“UMD”) and Duke University (“Duke”). The License Agreement grants to the Company an exclusive, perpetual license (“Initial Patents”) to certain patents, know-how and other intellectual property utilized in trapped-ion quantum computing systems. The license granted to the Company is exclusive for all patents (and non-exclusive for other types of intellectual property), subject to certain governmental rights and retained rights by UMD and Duke and other non-profit institutions to use and practice the Licensed Patents (as defined below) and technology for internal research and other non-profit purposes. On February 1, 2021, the Company and UMD executed two amendments to the License Agreement granting exclusive rights to license additional intellectual property in exchange for a total of 257,198 common shares after giving effect to the recapitalization. The shares had not been issued at the time the amendments were executed. Management evaluated the amendments and concluded that the arrangements qualify as equity-classified instruments and recorded an intangible asset and additional paid in capital based on the fair value of the shares at the date the amendments were executed of $1.6 million. The shares for each executed amendment were issued during the nine months ended September 30, 2021. Exclusive Option Agreements The Company also entered into an exclusive option agreement (“Option Agreement”) with each of UMD and Duke in 2016 whereby on the anniversary of the effective date of the License Agreement for a period of 5 years, the Company has the right to exclusively license additional intellectual property developed by UMD and Duke (the “Additional Patents” and together with the Initial Patents, the “Licensed Patents”) by exercising an annual option and issuing common shares each to Duke and UMD in consideration for the Additional Patents. The amount to be issued to UMD and Duke pursuant to the option over the 5-year term is equal to an aggregate of 642,995 common shares to each university after giving effect to the recapitalization. The Company may elect not to exercise the option if there was not a minimum number of intellectual property developed in a given year and then the Option Agreement would extend another year. As of December 31, 2020, the Company and Duke amended the Duke Option Agreement providing the remaining shares of common stock in consideration for research and development services through July 15, 2026. The Company recognized $0.1 million and $0.4 million of research and development expense related to the agreement with Duke during the three and nine months ended September 30, 2021, respectively. The agreements were not executed as of September 30, 2020 and therefore no research and development expense was recognized for the three and nine months ended September 30, 2020. On February 4, 2021, the Company and UMD amended the UMD Option Agreement to provide for the issuance of the remaining 128,599 shares of common stock after giving effect to the recapitalization to UMD as a nonrefundable upfront payment in exchange for research and development services by UMD and rights to any potential future intellectual property developed through July 2021. The fair value of the shares to be issued to UMD at the date the amendment was executed was $0.8 million. The shares were issued to UMD during the nine months ended September 30, 2021. The Company recognized $0.1 million and $0.8 million of research and development expense associated with the UMD Option Agreement amendment for the three and nine months ended September 30, 2021, respectively. The UMD Option Agreement was not executed as of September 30, 2020 and therefore no research and development expense was recognized for the three and nine months ended September 30, 2020. Additionally, under the terms of the License Agreement and Option Agreement, UMD was provided an exit guarantee if a sale or liquidation of the Company would occur that provides for the following:
The exit guarantee was not modified as a result of the amendment to the Option Agreement. The Business Combination did not trigger this provision as the UMD Option Agreement terminated in July 2021. |
Commitments and Contingencies |
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Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES Warranties and Indemnification The Company’s commercial services are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company’s documentation under normal use and circumstances. The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe third-party intellectual property rights. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the accompanying condensed consolidated financial statements. Litigation On January 12, 2021, dMY Technology Group, Inc. II, dMY Sponsor II, LLC, dMY, and dMY Sponsor III, LLC (“Sponsor”) accepted service of a lawsuit where they were named as counterclaim defendants in an underlying action by and between GTY Technology Holdings, Inc. (“GTY”), dMY Technology Holdings Inc., dMY Sponsor, LLC, dMY Sponsor II, LLC, dMY Technology Group Inc. II, dMY and Sponsor (collectively “dMY Defendants”) and Carter Glatt (“Glatt”) and Captains Neck Holdings LLC (“Captains Neck”), an entity of which Mr. Glatt is a member. The underlying lawsuit, filed by dMY Technology Group, Inc. and dMY Sponsor, LLC, seeks a declaratory judgment that Glatt and Captains Neck are not entitled to membership units of dMY Sponsor LLC, which was formed by Harry L. You, the co-founder and former President and Chief Financial Officer of GTY when Glatt was still working at GTY. The underlying lawsuit contains claims arising from Glatt’s termination of employment from GTY, including theft and misappropriation of confidential GTY information, breach of contract, breach of the duties of loyalty and fiduciary duty and conversion. Glatt responded to the underlying lawsuit by adding members of the Sponsor and officers of dMY as additional counterclaim defendants (collectively with the dMY Defendants Glatt and Captains neck, the “Counterclaim Defendants”) and adding Dune Acquisition Holdings LLC, a newly formed special purpose acquisition company, as a counterclaimant and asserting claims for breach of contract, fraudulent misrepresentation, negligent misrepresentation, tortious interference with business relations, quantum meruit and unjust enrichment. dMY, and now the Company, has never employed Glatt and has no business agreements with him. The Counterclaim Defendants have denied the claims against them and have filed a motion to dismiss the suit. |
Income Tax |
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Sep. 30, 2021 | |
Income Tax | 7. INCOME TAX The Company had no provision for income taxes in any period presented. The effective tax rate for each period differs from the statutory rate primarily as a result of not recognizing a deferred tax asset for losses due to having a full valuation allowance against deferred tax assets. The realization of tax benefits of deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence, the Company does not believe it is more likely than not that the net deferred tax assets will be realizable. Accordingly, the Company has provided a full valuation allowance against the net deferred tax assets as of
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Warrant Transaction Agreement |
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Sep. 30, 2021 | |
Warrant Transaction Agreement [Abstract] | |
Warrant Transaction Agreement | 8. WARRANT TRANSACTION AGREEMENT In November 2019, contemporaneously with a revenue arrangement, the Company entered into a contract, pursuant to which the Company agreed to issue to a customer, warrants to acquire shares of Legacy IonQ Series B-1 preferred stock (the “Warrant Shares”), subject to certain vesting events. Upon closing of the Business Combination, these warrants exercisable for Legacy IonQ Series B-1 preferred stock were assumed by the Company and converted into a warrant to purchase a number of shares of common stock equal to the product (rounded down to the nearest whole number) of (a) the number of shares of Legacy IonQ common stock issuable upon conversion of a share of Legacy IonQ Series B-1 preferred stock and (b) the Exchange Ratio (as defined in the Super 8-K filed with the SEC on October 4, 2021), at an exercise price per share (rounded up to the nearest whole cent) equal to (i) the exercise price per share of such Legacy IonQ Warrant Shares divided by (ii) the Exchange Ratio. Except as specifically provided in the merger agreement, the Warrant Shares will have the same terms and be subject to the same conditions (including applicable vesting conditions) as set forth in the Legacy IonQ warrant agreement. As of September 30, 2021, the contract allows for the customer to acquire up to 8,301,202 shares of common stock in the Company. As the Warrant Shares were issued in connection with an existing commercial agreement with a customer, the value of the Warrant Shares were determined to be consideration payable to the customer and consequently are treated as a reduction to revenue recognized under the corresponding revenue arrangement. As a result, $0.1 million and $0.02 million of warrant amortization was recognized against revenue in the three months ended September 30, 2021 and September 30, 2020, respectively, and $0.2 million and $0.02 million of warrant amortization was recognized against revenue in the nine months ended September 30, 2021 and September 30, 2020, respectively. Under the terms of the warrant agreement, 6.5% of the Warrant Shares will vest and be immediately exercisable on the date of the public announcement of the availability of the Company’s hardware on the cloud provider’s platform. The Warrant Shares have an exercise price of $1.38 per share and are exercisable through November 2029. The fair value of the Warrant Shares at the date of issuance was determined to be $8.7 million. As of September 30, 2021, Warrant Shares with a fair value of $0.6 million were vested. The fair value of the unamortized warrants as of September 30, 2021 is $0.3 million and is recorded within other noncurrent assets and will be amortized over time as the related customer revenue is earned. |
Stockholders' Equity |
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Sep. 30, 2021 | |
Stockholders' Equity | 9. STOCKHOLDERS’ EQUITY Our amended and restated certificate of incorporation authorizes us to issue up to 1,000,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of preferred stock, par value $0.0001 per share. No preferred stock has been issued as of September 30, 2021. Common Stock The terms, rights, preference, and privileges of the common stock are as follows: Voting Rights Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, each holder of common stock possess all voting power for the election of our directors and all other matters requiring stockholder action. Holders of common stock are entitled to one vote per share on matters to be voted on by stockholders. The Company’s certificate of incorporation and bylaws do not provide for cumulative voting rights. Dividends Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of common stock may be entitled to receive dividends out of legally available funds if the board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the board of directors may determine. We do not anticipate paying any cash dividends in the foreseeable future. Liquidation In the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of common stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of the holders of the preferred stock, if any, have been satisfied. Rights and Preference Holders of the Company’s common stock have no preemptive or other subscription rights, and there are no sinking fund or redemption provisions applicable to the common stock. The rights, preferences, and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of the Company’s preferred stock that are or may be issued. Currently no preferred stock has been issued as of September 30, 2021. Preferred Stock Under our amended and restated certificate of incorporation, our board of directors may, without further action by our stockholders, fix the rights, preferences, privileges and restrictions of up to an aggregate of 20,000,000 shares of preferred stock in one or more series and authorize their issuance. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. Any issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders would receive dividend payments and payments on liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deterring or preventing a change of control or other corporate action. No shares of preferred stock have been issued as of September 30, 2021. |
Warrant Liabilities |
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Warrant Liabilities [Abstract] | |||||||||||||||||||||||||||||
Warrant Liabilities | 10. WARRANT LIABILITIES As of September 30, 2021, there were 11,500,000 w arrants to purchase common stock outstanding, consisting of 7,500,000 p ublic w arrants and 4,000,000 p rivate p lacement w arrants. Each warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share.Public w arrants The p ublic w arrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering of dMY; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the p ublic w arrants and a current prospectus relating to them is available (or the Company permits holders to exercise their p ublic w arrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act).Redemption of warrants when the price per share of common stock equals or exceeds $18.00: Once the warrants become exercisable, the Company may redeem the outstanding warrants for cash:
Redemption of warrants for when the price per share of common stock equals or exceeds $10.00 Once the warrants become exercisable, the Company may redeem the outstanding warrants:
Private p lacement w arrants The private placement warrants are identical to the public warrants, except that the private placement warrants and the shares of common stock issuable upon exercise of the private placement warrants will not be transferable, assignable, or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the private placement warrants will be non-redeemable so long as they are held by dMY Sponsor III, LLC or its permitted transferees. Otherwise, the private placement warrants have terms and provisions that are identical to those of the public warrants, including as to exercise price, exercisability and exercise period. If the private placement warrants are held by holders other than the Sponsor or its permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the public warrants. |
Share Based Compensation |
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Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Based Compensation | 1 1 . SHARE BASED COMPENSATION The Company has a 2015 Equity Incentive Plan (the “2015 Plan”) which provides for the grant of share-based compensation in the form of awards of options, stock appreciation rights, restricted stock awards and restricted stock units, to certain officers, directors, employees, consultants, and advisors to purchase shares of the Company’s common stock. Upon the Closing of the Business Combination, outstanding Legacy IonQ stock options under the 2015 Plan were assumed by the Company. Each Legacy IonQ stock option issued and outstanding immediately prior to the Business Combination was converted into an option to purchase shares of common stock of the Company equal to the product of (a) the number of shares of Legacy IonQ common stock subject to such Legacy IonQ stock option agreement immediately prior to the Business Combination and (b) the exchange ratio at an exercise price equal to the (i) the exercise price per share of such Legacy IonQ stock option divided by (ii) the exchange ratio. Such stock options will continue to be governed by the terms of the 2015 Plan and the stock option agreements thereunder, until such outstanding options are exercised or until they terminate or expire by their terms. No further awards will be made pursuant to the 2015 Plan. For awards granted under the 2015 Plan, vesting generally occurs over four to five years from the date of grant and all options granted have a contractual term of 10 years. Vested options held at the date of an employee’s termination may be exercised within three months. The Company records forfeitures as they occur. In August 2021, the Company’s board of directors adopted the 2021 Equity Incentive Plan (the “2021 Plan”) and the stockholders approved the 2021 Plan in September 2021. The 2021 Plan became effective immediately upon the closing of the Business Combination. The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors, and consultants. Initially, a maximum of 26,235,000 shares of common stock may be issued under the 2021. The number of shares of the Company’s common stock reserved for issuance under the 2021 Plan automatically increases on January 1 of each year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by 5% of the Fully Diluted Common Stock (as defined in the 2021 Plan) outstanding on December 31 of the preceding year, or a lesser number of shares determined by the Company’s board of directors prior to such increase. No shares or awards were granted under the 2021 Plan as of September 30, 2021. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. Expected Volatility Expected Term The Company has estimated the expected term of its employee awards using the SAB Topic 14 Simplified Method allowed by the FASB and SEC, for calculating expected term as it has limited historical exercise data to provide a reasonable basis upon which to otherwise estimate expected term. Certain of the Company’s options began vesting prior to the grant date, in which case the Company uses the remaining vesting term at the grant date in the expected term calculation. Risk-Free Interest Rate non-inflation-indexed U.S. treasury securities with contract maturities equal to the expected term. Dividend Yield Fair Value of Underlying Common Stock b oard of d irectors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards are approved. The factors considered include, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of Legacy IonQ’s previously c onvertible r edeemable p referred s tock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares. The assumptions used to estimate the fair value of stock options granted during the three and nine months ended September 30, 2021 and 2020 are as follows:
A summary of the stock option activity is as follows:
The total intrinsic value of options exercised was $28.3 million and $0.1 million for the nine months ended September 30, 2021 and 2020, respectively. The weighted-average grant date fair value per share for the stock options granted during the nine months ended September 30, 2021 and 2020 was $5.83 and $0.35, respectively. The aggregate grant-date fair value of options vested during the nine months ended September 30, 2021 and 2020 was $5.04 million and $0.51 million, respectively. As of September 30, 2021, the total unrecognized compensation cost related to unvested stock option awards was $33.79 million, which the Company expects to recognize over a weighted-average period of approximately 2.11 Total stock-based compensation expense for both stock option awards and unvested restricted shares which is included in the condensed consolidated financial statements as follows (in thousands):
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Related Party Transactions |
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Related Party Transactions | 1 2 . RELATED PARTY TRANSACTIONS Transactions with UMD and Duke As described in Note 5 – Agreements with UMD and Duke Co- and Chief Technology Officer served as a professor at Duke and the Company’s F ounderCo- and Chief Scientist served as a professor at UMD. During the nine months ended September 30, 2021, the Company’s Chief Scientist moved to Duke and each, in their role as professors at Duke, are leading the research subject to the License Agreement and Option Agreement with Duke as of September 30, 2021. F ounderIn addition, the Company entered into an amendment to its operating lease for office space with UMD. The lease was amended with UMD in March 2020 to extend the terms of the agreement for the existing premise and lease additional expansion premise and was amended in December 2020 to provide additional rent adjustments. Refer to Note 12 of the audited financial statements for the year ended December 31, 2020 for additional information regarding the Company’s leases. In September 2021, the Company entered into a multiyear deal with UMD to provide certain quantum computing services and facility access related to the National Quantum Lab at UMD in exchange for payments totaling $14 million.The Company’s results from transactions with UMD and Duke, as reflected in the Condensed Consolidated Statements of Operations and Comprehensive Loss are detailed below (in thousands):
The Company has the following balances related to transactions with UMD and Duke, as reflected in the Consolidated Balance Sheets (in thousands):
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Summary of Significant Accounting Policies (Policies) |
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Basis of Presentation | Basis of Preparation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP as determined by the Financial Accounting Standards Board (“FASB”). |
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Unaudited Interim Financial Information | Unaudited Interim Financial Information The interim condensed consolidated financial statements included in this quarterly report have been prepared by the Company and are unaudited, pursuant to the rules and regulations of the US Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures contained in this quarterly report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for a quarterly report and are adequate to make the information presented not misleading. The interim condensed consolidated financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. These interim condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2020 included in our final proxy statement/prospectus filed with the SEC on August 12 , 2021. The Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2021 or thereafter. All references to September 30, 2021 and 2020 in the notes to the condensed consolidated financial statements are unaudited. |
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Emerging Growth Company | Emerging Growth Company The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company remains an emerging growth company until the earliest of (i)
December , (ii) the last day of the fiscal year in which the Company has total annual gross revenue of at least $1.07 billion, (iii) the last day of the fiscal year in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by 31 , non-affiliates exceeds $700.0 million as of the prior June 30th or (iv) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Significant estimates and judgments are inherent in the analysis and measurement of items including, but not limited to revenue recognition, capitalization of internally developed software and quantum computing costs, useful lives of long-lived assets, commitments and contingencies, forecasts and assumptions used in determining the fair value of historically granted common stock and warrants prior to the Business Combination and forecasts and assumptions used in determining the fair value of warrant liabilities. Management bases its estimates and assumptions on historical experience, expectations, forecasts, and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ and be affected by changes in those estimates. |
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Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are non-interest bearing and stated at the gross invoiced amount. A receivable is recorded when the Company has an unconditional right to receive payment based on the satisfaction of performance obligations. Accounts Receivable are composed of the following (in thousands):
On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off. This assessment is based on management’s evaluation of past due receivables, collectability of specific accounts, historical loss experience and overall economic conditions. The Company did not have any allowance for doubtful accounts as of September 30, 2021 and December 31, 2020. |
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Revenue Recognition | Revenue Recognition The Company derives revenue from providing access to its QCaaS and professional services related to co-developing algorithms on the Quantum Computing Systems. In arrangements with the cloud service providers, the cloud service provider is considered the customer and IonQ does not have any contractual relationships with the cloud service providers’ end users. For these arrangements, revenue is recognized at the amount charged to the cloud service provider. For contracts with a fixed transaction price to provide stand-ready QCaaS access, the fixed fee is recognized as QCaaS subscription-based revenues on a straight-line basis over the access period. Any variable fees for usage over the contractual minimums are estimated at contract inception and recognized ratably over the access period unless such variable usage fees are probable of reversal in future periods. In those instances, variable usage fees are included in the determination of the transaction consideration once known. For contracts without fixed fees, variable usage fees are billed and recognized during the period of such usage. As of September 30, 2021, approximately $15.9 million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for
non-cancelable contracts. The Company expects to recognize revenue of $1.1 million related to those remaining performance obligations during the remainder of 2021. The Company expects to recognize revenue of $4.5 million related to these remaining performance obligations in the year ending December 31, 2022 with the remainder recognized thereafter. The Company has not estimated the timing of revenue recognition for the remaining unsatisfied performance obligations related to usage-based contracts as the timing of customer usage cannot be predicted given the limited historical data. |
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Early Exercise of Stock Options | Early Exercise of Stock Options Stock options granted under the 2015 Equity Incentive Plan provide employee option holders, if approved by the Board, the right to exercise unvested options in exchange for restricted common stock, which is subject to a repurchase right held by the Company at the lower of (i) the fair market value of its common stock on the date of repurchase or (ii) the original purchase price. Early exercises of options are not deemed to be substantive exercises for accounting purposes and accordingly, amounts received for early exercises are recorded as a liability. In September 2021, we exercised our right to repurchase 100,000 shares related to the early exercise of stock options. The unvested shares were repurchased from an employee in connection with the termination of their service in exchange for $1.0 million. As of September 30, 2021, and December 31, 2020, there were 1,541,764
shares and no shares, respectively, subject to repurchase related to stock options early exercised and unvested. These amounts are reclassified to common stock and additional paid-in capital as the underlying shares vest. As of September 30, 2021, the Company recorded a liability related to these shares subject to repurchase in the amount of $3.4 million in its condensed consolidated balance sheet. The Company did not have any early exercises of stock options prior to 2021, and as a result there was no such balance as of December 31, 2020. , |
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Property and Equipment, Net | Property and Equipment, Net Property and equipment, net is stated at cost less accumulated depreciation. Historical cost of fixed assets is the cost as of the date acquired. Prior to 2019, we built certain quantum computing systems solely for research and development purposes and these quantum computing systems were deemed to have no alternative future use. In 2019, we began to commercialize our quantum computing systems via the offering of QCaaS and quantum computing systems built thereafter were determined to provide a probable future economic benefit. As a result, hardware and labor costs associated with the building of such quantum computing systems were capitalized. Costs to maintain quantum computing systems are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful life of two years for the quantum computing systems. |
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Intangible Asset, Net | Intangible Assets, Net The Company’s intangible assets include website domain costs, patents, intellectual property, and trademarks. Intangible assets with identifiable useful lives such as patents and intellectual property are initially valued at acquisition cost and are amortized over their estimated useful lives, which is generally 20 years, using the straight-line method. With respect to patents, acquisition costs include external legal and patent application costs. Intangible assets with indefinite useful lives are assessed for impairment at least annually. During the three months ended September 30, 2021 and 2020, the Company capitalized $0.2 million and $0.1 million, respectively, of intangible assets primarily related to intellectual property, and during the nine months ended September 30, 2021 and 2020, the Company capitalized $2.1 million and $0.3 million, respectively. |
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Capitalized Internally Developed Software | Capitalized Internally Developed Software Capitalized internally developed software, which is included in intangible assets, net, consists of costs to purchase and develop
internal-use software, which the Company uses to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended, until the time the software is placed in service for its intended use. Any costs incurred during subsequent efforts to upgrade and enhance the functionality of the software are also capitalized. Once this software is ready for use as part of the Company’s service offerings, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is typically assessed to be 3 years. During the three months ended September 30, 2021 and 2020, the Company capitalized $0.5 million and $0.3 million, respectively in , internal-use software costs, and during the nine months ended September 30, 2021 and 2020, the Company capitalized $1.3 million and $0.8 million, respectively, in internal-use software costs. The Company amortized $0.2 million and $0.1 million of capitalized internally developed software costs during the three months ended September 30, 2021 and 2020, respectively, and $0.5 million and $0.2 million of capitalized internally developed software costs during the nine months ended September 30, 2021 and 2020, respectively. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Due to their short-term nature, the carrying amounts reported in the Company’s financial statements approximates the fair value for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current liabilities. Cash and cash equivalents include cash in banks, checking deposits and money market funds. The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. |
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Warrant Liabilities | Warrant Liabilities The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is
then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. The warrants of dMY assumed in the Business Combination are classified as liabilities and remeasured at each reporting period (as more fully described in Note 10 ). The determination of the fair value of the warrant liabilities may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. |
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Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the United States . These deposits are typically in excess of insured limits.The Company’s accounts receivable are derived from revenue earned from customers primarily located in the United States . The Company performs periodic evaluations of its customers’ financial condition and generally does not require its customers to provide collateral or other security to support accounts receivable and maintains an allowance for doubtful accounts. Credit losses historically have not been material. Significant customers are those which represent more than 10% of the Company’s total revenue. The Company’s revenue was from 2 significant customers for the three months ended September 30, 2021 and from 3 significant customers for the nine months ended September 30, 2021. The Company did not have any revenue for the three and nine month periods ended September 30, 2020. |
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Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income ( by the weighted average number of shares of common stock during the period, plus common stock equivalents, outstanding during the period. If the Company reports a net loss, the computation of diluted loss per share excludes the effect of dilutive common stock equivalents, as their effect would be antidilutive. loss )Earnings (loss) per share calculations for all periods prior to the Business Combination have been retroactively restated to reflect the conversion of the Company’s convertible redeemable preferred stock and the equivalent number of shares reflecting the exchange ratio established in the reverse capitalization. The following table sets forth the computation of basic and diluted loss per share attributable to common stockholders (in thousands, except share and per share data):
In periods with a reported ne t loss, the effects of anti-dilutive stock options, unvested common stock (including unvested restricted common stock) and warrants are excluded and diluted loss per share is equal to basic loss per share. The following is a summary of the weighted average common stock equivalents for the securities outstanding during the respective periods that have been excluded from the computation of diluted net loss per common share, as their effect would be anti-dilutive:
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Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service ContractIn August 2020, the FASB issued ASU 2020-06, Debt, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . |
Summary of Significant Accounting Policies (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted loss per share attributable to common stockholders (in thousands, except share and per share data):
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Summary of Loans and Financing Receivable | Accounts Receivable are composed of the following (in thousands):
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Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following is a summary of the weighted average common stock equivalents for the securities outstanding during the respective periods that have been excluded from the computation of diluted net loss per common share, as their effect would be anti-dilutive:
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Property And Equipment, Net (Tables) |
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Summary Of Property And Equipment, Net | Property and equipment, net is composed of the following (in thousands):
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Fair Value Measurement (Tables) |
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Summary of fair value measurements on a recurring basis and the level of inputs | The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):
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Summary of fair value measurements inputs | The following table provides quantitative information regarding Level 3 fair value measurement inputs for the p rivate p lacement w arrants as of September 30, 2021.
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Share Based Compensation (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share Based Payment Award Stock Options Valuation Assumptions | The assumptions used to estimate the fair value of stock options granted during the three and nine months ended September 30, 2021 and 2020 are as follows:
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Summary of the Stock Option Activity | A summary of the stock option activity is as follows:
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Summary of Stock-based Compensation Expenses for Stock Options and Unvested Restricted Shares | Total stock-based compensation expense for both stock option awards and unvested restricted shares which is included in the condensed consolidated financial statements as follows (in thousands):
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Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The Company’s results from transactions with UMD and Duke, as reflected in the Condensed Consolidated Statements of Operations and Comprehensive Loss are detailed below (in thousands):
The Company has the following balances related to transactions with UMD and Duke, as reflected in the Consolidated Balance Sheets (in thousands):
|
Description of Business - Additional Information (Detail) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021
USD ($)
$ / shares
|
Sep. 30, 2021
USD ($)
segment
$ / shares
shares
|
Dec. 31, 2020
$ / shares
|
|
Organization Business And Basis Of Presentation [Line Items] | |||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Number of operating segment | segment | 1 | ||
Offering Costs Associated With Warrants | $ 4,259 | $ 4,259 | |
Sponsor Support Agreement [Member] | |||
Organization Business And Basis Of Presentation [Line Items] | |||
Vesting provisions of shares | These provisions provide that (i) one-third of the Vesting Shares shall vest at such time as (x) the closing price of common stock equals or exceeds $12.50 for any 20 trading days during any period of 30 consecutive trading days or (y) IonQ consummates a subsequent transaction (as defined) on or before the date that is five years after the consummation of the Business Combination, (ii) one-third of the Vesting Shares shall vest at such time as (x) the closing price of common stock equals or exceeds $15.00 for any 20 trading days during any period of 30 consecutive trading days or (y) IonQ consummates a subsequent transaction (as defined), on or before the date that is five years after the consummation of the Business Combination and (iii) one-third of the Vesting Shares shall vest at such time as (x) the closing price of common stock equals or exceeds $17.50 for any 20 trading days during any period of 30 consecutive trading days or (y) IonQ consummates a subsequent transaction (as defined), on or before the date that is five years after the consummation of the Business Combination. | ||
Dmy Technology Group, Inc [Member] | |||
Organization Business And Basis Of Presentation [Line Items] | |||
Business Combination, gross proceeds | $ 636,000 | ||
Business Combination Equity Interests Issued and Issuable | $ 345,000 | ||
Business Acquisition, Share Price | $ / shares | $ 10.00 | $ 10.00 | |
Business Acquisition, Transaction Costs | $ 52,000 | $ 52,000 | |
IONQDmy Technology Group Inc [Member] | |||
Organization Business And Basis Of Presentation [Line Items] | |||
Offering Costs Associated With Warrants | $ 4,300 | ||
Common Class B [Member] | Sponsor Support Agreement [Member] | Vesting Shares [Member] | |||
Organization Business And Basis Of Presentation [Line Items] | |||
Percentage of conversion of stock at the consummation of the business combination | 10.00% | ||
Number of shares converted into shares of common stock at the consummation of Business combination | shares | 750,000 |
Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Numerator: | ||||
Net loss available to common stockholders | $ (14,781) | $ (3,565) | $ (32,102) | $ (10,493) |
Denominator: | ||||
Weighted average shares used in computing net loss per share attributable to common stockholders – basic and diluted | 120,605,457 | 115,369,517 | 119,535,167 | 114,597,135 |
Net loss per share attributable to common stockholders – basic and diluted | $ (0.12) | $ (0.03) | $ (0.27) | $ (0.09) |
Summary of Significant Accounting Policies - Summary of Loans and Financing Receivable (Detail) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 4,082 | $ 390 |
Billed Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 4,080 | 390 |
Unbilled Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 2 | $ 0 |
Property And Equipment, Net - Summary Of Property And Equipment (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 19,441 | $ 13,691 |
Less: accumulated depreciation | (2,712) | (1,703) |
Property and equipment, net | 16,729 | 11,988 |
Computer equipment and acquired computer software | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 662 | 364 |
Machinery, equipment, furniture, and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 3,963 | 2,974 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 818 | 736 |
Quantum computing systems [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 13,998 | $ 9,617 |
Property And Equipment, Net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 0.4 | $ 0.3 | $ 1.0 | $ 0.8 |
Fair Value Measurements - Additional Information (Detail) |
Sep. 30, 2021
$ / shares
|
---|---|
Schedule Of Changes In The Fair Value Of Warrant Liabilities [Line Items] | |
Class of warrants, exercise price per share | $ 1.38 |
Public Warrants [Member] | |
Schedule Of Changes In The Fair Value Of Warrant Liabilities [Line Items] | |
Class of warrants, exercise price per share | $ 3.46 |
Income Tax - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Line Items] | ||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Warrant Transaction Agreement - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Warrant Transaction Agreement [Abstract] | ||||
Class of warrant or right, number of securities called by warrants or rights | 8,301,202 | 8,301,202 | ||
Warrant amortization | $ 100 | $ 20 | $ 200 | $ 20 |
Percent of warrant shares will vest and be immediately exercisable | 6.50% | 6.50% | ||
Class of warrant or right, exercise price of warrants or rights | $ 1.38 | $ 1.38 | ||
Fair value of the warrant shares | $ 8,700 | $ 8,700 | ||
Fair value of warrants vested | 600 | 600 | ||
Fair value of the unamortized warrants | $ 300 | $ 300 |
Stockholders' Equity - Additional Information (Detail) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Class of Stock [Line Items] | ||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Amended And Restated Certificate Of Incorporation [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock, par or stated value per share | $ 0.0001 | |
Preferred stock, shares authorized | 20,000,000 | |
Preferred stock, shares issued | 0 | |
Common stock, shares authorized | 1,000,000,000 | |
Common stock, par value | $ 0.0001 |
Share Based Compensation - Summary Of Share Based Payment Award Stock Options Valuation Assumptions (Detail) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Share-based Payment Arrangement [Abstract] | ||||
Risk- Free Interest Rate | 0.00% | 0.36% | 0.96% | 1.18% |
Expected Term (in years) | 6 years 4 months 13 days | 6 years 3 months 3 days | 6 years 2 months 12 days | |
Expected Volatility | 0.00% | 73.07% | 77.04% | 71.11% |
Dividend Yield | 0.00% | 0.00% | 0.00% | 0.00% |
Related Party Transactions - Additional Information (Detail) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2021
USD ($)
| |
UMD [Member] | |
Related Party Transaction [Line Items] | |
Related party transaction, amounts of transaction | $ 14 |
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