Rigetti Computing (RGTI) risk factors, FY2024 10-K

Risks Related to Our Financial Condition and Status as an Early-Stage Company

1. 01We have a history of operating losses and expect to incur significant expenses and continuing losses for the foreseeable future
2. 02Our operating results may be adversely affected by unfavorable economic and market conditions. In the future we may be required to record significant charges for impairment of our long-lived assets, other assets or investments
3. 03We 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
4. 04Our success will depend upon our ability to expand, scale our operations, and increase our sales and support capability. Even if the market in which we compete meets the size estimates and growth forecasted, our business could fail to grow at similar rates, if at all
5. 05We may not manage growth effectively, including with respect to our employee base, and managing our operations successfully
6. 06Our ability to use net operating loss carryforwards and other tax attributes may be limited

Risks Related to Our Business and Industry

1. 07We have not produced quantum computers with high qubit counts or at volume and we face significant barriers in our attempts to produce quantum computers, including the need to invent and develop new technology. If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail
2. 08Any future generations of hardware and software developed to demonstrate narrow quantum advantage and broad quantum advantage, each of which is an important anticipated milestone for our technology roadmap and commercialization, may not occur on our anticipated timeline or at all
3. 09If our computers fail to achieve quantum advantage, our business, financial condition and future prospects may be harmed. Moreover, the standards by which we measure our progress may be based on assumptions and expectations that are not accurate or that may change as quantum computing evolves
4. 10There may be other measures that are utilized in the future to measure our progress and the progress of others in the industry and therefore undue reliance should not be placed on our current performance measures
5. 11The 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
6. 12We depend on a limited number of customers for a significant percentage of our revenue and the loss or temporary loss of a major customer for any reason could harm our financial condition
7. 13A significant portion of our revenue currently depends on contracts with the public sector, and our failure to receive and maintain government contracts or changes in the contracting or fiscal policies of the public sector could have a material adverse effect on our business
8. 14Our ability to commercialize our quantum computers in the future may be dependent upon our relationships with cloud providers
9. 15Our QCS incorporates high performance classical computing through public clouds to provide services to end users and our partners. These services are predominantly on AWS
10. 16We depend on certain suppliers to source products. Failure to maintain our relationship with any of these suppliers, or a failure to replace any of these suppliers, could have a material adverse effect on our business, financial position, results of operations and cash flows
11. 17We may face unknown supply chain issues that could delay the development or introduction of our products and negatively impact our business and operating results
12. 18Even 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
13. 19We may be unable to reduce the cost of developing our quantum computers, which may prevent us from pricing our quantum systems competitively
14. 20We could suffer disruptions, outages, defects and other performance and quality problems with our quantum computing systems, our production technology partners or with the public cloud, data centers and internet infrastructure on which we rely
15. 21If we cannot successfully execute our strategy, including in response to changing customer needs and new technologies and other market requirements, or achieve our objectives in a timely manner, our business, financial condition and results of operations could be harmed
16. 22Our future growth and success depends on our ability to sell effectively to government entities and large enterprises
17. 23Our quantum computing systems may not be compatible with some or all industry-standard software and hardware in the future, which could harm our business
18. 24If our customers are unable to achieve compatibility between other software and hardware and our hardware, it could impact our relationships with such customers or with customers, generally, if the incompatibility is more widespread
19. 25If we are unable to maintain our current strategic partnerships or we are unable to develop future collaborative partnerships, our future growth and development could be negatively impacted
20. 26Unfavorable conditions in our industry or the global economy could limit our ability to grow our business and negatively affect our results of operations
21. 27Furthermore, uncertain economic conditions may make it more difficult for us to raise funds through borrowings or private or public sales of debt or equity securities. We cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular industry
22. 28Unstable market and economic conditions have had and may continue to have serious adverse consequences on our business, financial condition and share price
23. 29If our cost and time estimates for fixed fee arrangements do not accurately anticipate the cost of servicing those arrangements, we could experience losses on these arrangements and our profitability could be reduced
24. 30Our facilities or operations could be damaged or adversely affected as a result of prolonged power outages, natural disasters and other catastrophic events

Risks Related to Our International Expansion

1. 31Because our success depends, in part, on our ability to expand sales internationally, our business will be susceptible to risks associated with international operations
2. 32Additionally, operating in international markets also requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required in establishing operations in other countries will produce desired levels of revenue or profitability
3. 33Our international sales and operations subject us to additional risks and costs, including the ability to engage with customers in new geographies, exposure to foreign currency exchange rate fluctuations, that can adversely affect our business, financial condition, revenues, results of operations or cash flows
4. 34Our international operations may subject us to greater than anticipated tax liabilities

Risks Related to Litigation and Government Regulation

1. 35Contracts with U.S. government entities subject us to risks including early termination, audits, investigations, sanctions and penalties
2. 36We are subject to U.S. and foreign anti-corruption, anti-bribery and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business
3. 37We are subject to government export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws
4. 38Our business is exposed to risks associated with litigation, investigations and regulatory proceedings
5. 39We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims
6. 40We are subject to requirements relating to environmental and safety regulations and environmental remediation matters, which could adversely affect our business, results of operations and reputation
7. 41Changes in tax laws or regulations that are applied adversely to us may have a material adverse effect on our business, cash flow, financial condition, or results of operations

Risks Related to Intellectual Property

1. 42Any failure to obtain, maintain and protect our intellectual property rights could impair our ability to protect and commercialize our proprietary products and technology and cause us to lose our competitive advantage
2. 43Our inability to secure patent protection or enforce our patent rights could have a material adverse effect on our ability to prevent others from commercializing similar products or technology
3. 44We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards, or limit our ability to use certain key technologies in the future, all of which could harm our business
4. 45We rely on certain open-source software in our quantum systems. If licensing terms change, our business may be adversely affected

Risks related to an Investment in our Securities and other General Matters

1. 46The market price of our Common Stock and Public Warrants has been and may continue to be volatile
2. 47We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act, which could result in sanctions or other penalties that would adversely impact our business
3. 48We have incurred and will continue to incur substantial costs as a result of operating as a public company, and our management will continue to devote substantial time to new compliance initiatives
4. 49We do not intend to pay cash dividends for the foreseeable future
5. 50Our quarterly operating results have and may fluctuate significantly and could fall below the expectations of securities analysts and investors due to many factors, some of which are beyond our control, resulting in a decline in our stock price
6. 51Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our securities
7. 52Sales of our securities, or the perception of such sales, by us or holders of our securities in the public market or otherwise could cause the market price for our securities to decline, and even in such case, certain holders of our securities may still have an incentive to sell our securities
8. 53Future issuances of our securities may adversely affect us, including the price of our securities and may be dilutive to existing securities holders
9. 54We have filed registration statements on Form S-8 under the Securities Act registering the issuance of shares of Common Stock subject to options or other equity awards issued or reserved for future issuance under our equity incentive plans and employee stock purchase plan
10. 55Delaware law and our Certificate of Incorporation and Bylaws contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable
11. 56These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or management
12. 57This choice of forum provision in our Certificate of Incorporation may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims
13. 58Our warrants, including our Public Warrants, Private Warrants and other warrants we have issued, and our Sponsor Vesting Shares are accounted for as liabilities and the changes in value of our Warrants and Sponsor Vesting Shares could have a material effect on our financial results
14. 59No assurance can be given that additional guidance or new regulations or accounting principles and interpretations will not be released that would require a restatement of our financial statements with respect to treatment of the Warrants or the Sponsor Vesting Shares
15. 60Our warrants are exercisable for Common Stock, the exercise of which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders
16. 61The terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment
17. 62We may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to the holder, thereby making such Public Warrants worthless
18. 63None of the Private Warrants will be redeemable by us, subject to certain circumstances, so long as they are held by the Supernova Partners II LLC (“Supernova Sponsor”) or its permitted transferees
19. 64We may be subject to securities litigation, which is expensive and could divert management attention
20. 65Information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to the Company and may not be reliable or accurate