Rigetti Computing Inc. Warrants

Company Overview

Business Model: Rigetti Computing, Inc. is a vertically integrated quantum computing company focused on building and operating superconducting quantum computers. The Company designs and manufactures its quantum processors at Fab-1, a dedicated wafer fabrication facility, and employs a full-stack product development approach from chip design to cloud delivery. Revenue is primarily generated from technology development contracts with partners, with a long-term vision to shift towards Quantum Processing Unit (QPU) sales and recurring revenues from Quantum Computing as a Service (QCaaS) via its Rigetti Quantum Cloud Services (QCS®) platform and public cloud providers.

Market Position: Rigetti Computing, Inc. positions itself at the forefront of superconducting quantum computing, a modality it believes leads in gate speeds and scalability. The Company's quantum computers achieve gate speeds of 50-70 nanoseconds, approximately 1,000 times faster than other modalities like trapped ions or pure atoms, based on publicly available information. It has developed the world’s first multi-chip quantum processor for scalable systems and launched Cepheus-1-36Q, which it believes is the industry’s largest multi-chip quantum computer. Rigetti Computing, Inc. was also the first company to build a dedicated and integrated fab for quantum processor production in 2017.

Recent Strategic Developments:

• Product Launches & Performance:
  • December 2023: Launched the Novera™ QPU, its first commercially available QPU, featuring a 9-qubit chip and a 5-qubit chip for testing.
  • Fourth Quarter 2024: Publicly launched the 84-qubit Ankaa-3 system, achieving a 99.0% median two-qubit gate fidelity.
  • Second Quarter 2025: Publicly launched the 36-qubit Cepheus-1-36Q system, utilizing modular chip architecture and achieving a 99.6% median two-qubit gate fidelity as of January 2026.
  • January 2026: Announced achievement of a median two-qubit gate fidelity of 99.7% on its 9-qubit system, 99.6% on its 36-qubit system, and 99.0% on its 108-qubit system (Cepheus-1-108Q).
  • Achieved a two-qubit gate fidelity as high as 99.9% at 28 nanosecond gate speed on a prototype platform using a new proprietary adiabatic CZ scheme, maintaining 99.9% one-qubit gate fidelity.
• Commercial Sales & Orders:
  • December 2024: Sold a Novera QPU to Montana State University, its first QPU delivered to an academic institution.
  • 2025: Received purchase orders for two Novera systems totaling approximately $5.7 million, with expected delivery in the first half of 2026.
  • January 2026: Rigetti Computing India P L received an $8.4 million purchase order to deliver a 108-qubit quantum computer to Centre for Development of Advanced Computing (C-DAC) in Bengaluru, expected deployment in the second half of 2026.
• Strategic Partnerships:
  • February 2025: Entered into a Collaboration Agreement with Quanta Computer Inc., committing each party to invest at least $250 million over five years in quantum computing. Quanta Computer Inc.'s investment will focus on personnel and capital expenditures for developing products and services and manufacturing capability in furtherance of Rigetti Computing, Inc.'s product roadmap.
  • April 2025: Quanta Computer Inc. purchased approximately $35 million of Rigetti Computing, Inc. Common Stock at approximately $11.59 per share.
  • April 2025: Rigetti UK Limited was selected as a winner of Innovate UK’s Quantum Missions Pilot Competition to advance quantum error correction capabilities, involving an upgrade of its UK National Quantum Computing Centre quantum computer to a 36-qubit QPU and integration with Riverlane Ltd.’s quantum error correction stack.

Geographic Footprint: Rigetti Computing, Inc. maintains offices and personnel in the United States, the United Kingdom, Australia, Canada, and Mumbai, India. Its principal executive offices are in Berkeley, California, and its Fab-1 facility is in Fremont, California.

• Revenue Distribution (2025):
  • United States: 47.3% of total revenue
  • Europe: 44.7% of total revenue
  • Asia and others: 8.0% of total revenue

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 29.6%
• Operating Margin: -1192.9%
• Net Margin: -3050.7%

Investment in Growth:

• R&D Expenditure: $61.3 million (863.9% of revenue)
• Capital Expenditures: $18.7 million
• Strategic Investments: Rigetti Computing, Inc. committed to invest at least $250 million over five years (commencing February 2025) in quantum computing as part of the Collaboration Agreement with Quanta Computer Inc.

Business Segment Analysis

Rigetti Computing, Inc.'s Chief Operating Decision Maker manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Therefore, detailed segment-specific financial and operational metrics are not presented.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Not disclosed.
• Dividend Payments: Rigetti Computing, Inc. has never declared or paid cash dividends and does not intend to do so in the foreseeable future, prioritizing retention of funds for operations and business growth.
• Future Capital Return Commitments:
  • During 2025, Rigetti Computing, Inc. completed an At-the-Market (ATM) offering program, raising gross proceeds of $350 million from the sale of 30,309,780 shares of Common Stock.
  • In April 2025, Quanta Computer Inc. purchased 3,020,412 shares of Common Stock for approximately $35.0 million in a private placement.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $44.9 million
• Total Debt: $0 (debt with Trinity Capital Inc. was prepaid in full in December 2024)
• Net Cash Position: $44.9 million
• Credit Rating: Not disclosed.
• Debt Maturity Profile: No outstanding debt as of December 31, 2025.

Cash Flow Generation (2025):

• Operating Cash Flow: $(58.5) million
• Free Cash Flow: $(77.2) million (Operating Cash Flow - Capital Expenditures)
• Cash Conversion Metrics: Not explicitly detailed, but operating cash flows are significantly affected by research and development and selling, general and administrative expenditures.

Operational Excellence

Production & Service Model: Rigetti Computing, Inc. operates a vertically integrated model, encompassing quantum chip design, manufacturing, and cloud delivery. The Company owns and operates Fab-1, a dedicated wafer fabrication facility in Fremont, California, for prototyping and producing its superconducting quantum processors. It deploys its quantum computers to end-users via its Rigetti Quantum Cloud Services (QCS®) platform, which offers a hybrid quantum-classical computing environment. The Company also sells Quantum Processing Units (QPUs) directly to customers.

Supply Chain Architecture: Rigetti Computing, Inc. sources components from multiple industries. Key Suppliers & Partners:

• Electronics & Semiconductor Industries: Low-noise microwave components, CPUs, GPUs, FPGAs, silicon wafers, and other specialty materials, tooling, and measurement equipment.
• Cryogenic Industry: Dilution refrigerators and associated helium gas products.
• Strategic Collaboration: Quanta Computer Inc. is a partner for the development of Covered Components, which may include control systems, dilution refrigerators, flexible cables, and other non-QPU components.

Facility Network:

• Manufacturing: Fab-1 in Fremont, California (approximately 53,800 square feet, lease expires September 30, 2029). Fab-1 has enough wafer capacity to supply all of Rigetti Computing, Inc.'s chip needs for at least the next three years.
• Research & Development: Integrated within the full-stack development approach, leveraging Fab-1 for rapid design-fab-test cycles.
• Distribution: Cloud-based delivery via Rigetti QCS platform and public cloud service providers.
• Offices: Principal executive offices in Berkeley, California (approximately 15,625 square feet, lease expires October 31, 2028). Leased office spaces for international operations in the United Kingdom and Australia.

Operational Metrics:

• Gate Speeds: 50-70 nanoseconds (general), 76 nanoseconds (Cepheus-1-36Q universal CZ gates), 28 nanoseconds (prototype platform with adiabatic CZ scheme).
• One-Qubit Gate Fidelity: 99.9% (as of January 2026).
• Median Two-Qubit Gate Fidelity (as of January 2026):
  • 9-qubit system: 99.7%
  • 36-qubit system (Cepheus-1-36Q): 99.6%
  • 108-qubit system (Cepheus-1-108Q): 99.0%
• Error Rate Reduction: Successfully halved error rates in 2024 with Ankaa-3 (to 99.0% fidelity) and again with Cepheus-1-36Q (to 99.6% fidelity from Ankaa-3).

Market Access & Customer Relationships

Go-to-Market Strategy: Rigetti Computing, Inc.'s strategy focuses on leadership in key market segments driving early quantum computing adoption, primarily through technology development and distribution partnerships.

Distribution Channels:

• Direct Sales: Through its Rigetti QCS platform, directly engaging with enterprises and government organizations for quantum computing research, algorithm development, benchmarking, and software development.
• Channel Partners:
  • Amazon Web Services (Braket service)
  • Microsoft (Azure Quantum Service)
  • Strangeworks
• Digital Platforms: Rigetti QCS platform provides cloud access to its quantum computers.

Customer Portfolio: Rigetti Computing, Inc. cultivates relationships and partnerships across commercial enterprises and government entities.

• Enterprise Customers: Amazon Web Services, Standard Chartered Bank, Moody’s, HSBC.
• Strategic Partnerships: Fermilab, U.S. Department of Energy’s Superconducting Quantum Materials and Systems Center, Air Force Research Laboratory, Defense Advanced Research Projects Agency, National Aeronautics and Space Administration, Innovate UK, Quanta Computer Inc., Riverlane Ltd.
• Customer Concentration: Sales to government entities comprised 90.2% of total revenue in 2025 and 89.4% in 2024. Customer D accounted for 42% of total revenue in 2025 and 27% in 2024. Customer E accounted for 16% of total revenue in 2024. Customer B accounted for 17% of total revenue in 2025 and 11% in 2024. Customer C accounted for 18% of total revenue in 2025.

Geographic Revenue Distribution (2025):

• United States: 47.3% of total revenue
• Europe: 44.7% of total revenue
• Asia and others: 8.0% of total revenue

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The quantum computing market is in its early stages, characterized by rapid technological change, evolving user requirements, and uncertain product lifecycles. Classical computing is experiencing a plateauing of Moore's Law and diminishing returns from parallelization, leading to increasing demand for computational power to solve intractable problems. Quantum computers are expected to offer greater speed and lower cost for complex computational problems. Qubits can be manufactured using older lithography nodes (1990s era), decoupling performance from shrinking chip manufacturing costs.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: Major companies developing quantum hardware and software include IBM, Google, Microsoft, IonQ, D-Wave, Quantinuum, and PsiQuantum. Large public cloud providers and traditional chip makers are also investing in quantum computing initiatives. Emerging Competitive Threats: New entrants, disruptive technologies, and alternative solutions are expected to increase competition. Sovereign nations are also focused on developing quantum computing solutions, potentially subsidizing competitors. Competitive Response Strategy: Rigetti Computing, Inc.'s strategy involves:

1. Developing superconducting gate-based quantum computers.
2. Creating high-performance quantum computing systems.
3. Utilizing an open modular architecture.
4. Providing broad access to its quantum computers.
5. Developing deep partnerships to accelerate technology development.
6. Advancing its technology leadership position.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: The quantum computing industry is in its early stages, volatile, and highly competitive. There is no certainty that quantum advantage (solving practical problems impossible for classical computers) or Large-Scale Fault Tolerant Quantum Computing (LFTQC) will be achieved as quickly as hoped, or at all.
• Technology Disruption: Risk of competitors achieving technical milestones faster or developing breakthroughs that render Rigetti Computing, Inc.'s technology obsolete.
• Customer Concentration: High dependence on a limited number of customers, particularly U.S. government entities (90.2% of 2025 revenue), creates significant revenue fluctuation risk and vulnerability to changes in funding cycles or policies.
• Business Model Unproven: Limited operating history makes future results difficult to forecast; the scalable business model is not yet fully formed, and profitability is not guaranteed even if quantum advantage is achieved.
• Inability to Scale: Challenges in scaling business and operations to meet demand, including manufacturing, supply chain capacity, and customer support.
• Dependence on Cloud Providers: Reliance on public cloud providers (e.g., Amazon Web Services, Microsoft Azure) for QCaaS distribution, with risks of termination, market pricing control, or competition from these providers.

Operational & Execution Risks

• Supply Chain Vulnerabilities: Dependence on certain suppliers for critical components (electronics, semiconductors, cryogenic equipment), with risks of shortages, interruptions, or supplier insolvency.
• Defects: Quantum computers are complex and may contain defects in design and manufacture, leading to performance issues, customer dissatisfaction, and potential liability.
• Capacity Constraints: Potential bottlenecks in production or service delivery if growth outpaces operational capacity.
• Talent Acquisition & Retention: High dependence on attracting and retaining highly skilled employees (quantum physicists, engineers, sales staff) in a competitive market.
• Compatibility Issues: Risk that quantum computing systems may not be compatible with future industry-standard software and hardware, limiting adoption.
• Cybersecurity Incidents: Threats to information technology systems and data (including intellectual property) from various actors, with potential for disruptions, data loss, litigation, and reputational harm.
• Facility Damage: Risk of damage to facilities (e.g., Fab-1, research labs) from natural disasters or power outages, causing operational delays.

Financial & Regulatory Risks

• Operating Losses & Capital Requirements: History of significant operating losses ($216.2 million in 2025) and an accumulated deficit ($771.0 million as of December 31, 2025), requiring substantial cash for ongoing R&D and operations, with no assurance of future financing availability on favorable terms.
• Net Operating Loss Limitations: Federal net operating loss carryforwards ($455.3 million as of December 31, 2025) and tax credits are subject to annual limitations under Section 382 of the Internal Revenue Code due to prior ownership changes.
• Internal Control Weaknesses: Past material weaknesses in internal control over financial reporting (since remediated) indicate a risk of future control failures, impacting financial reporting accuracy and investor confidence.
• Product Liability: Potential exposure to product liability claims if quantum computers malfunction or do not perform as expected.
• Environmental & Safety Regulations: Compliance costs and risks associated with stringent environmental and safety laws, and potential for operational disruptions from safety incidents.
• Changes in Tax Laws: Adverse impacts from new or revised tax laws or interpretations.
• Warrant Liabilities: Public Warrants and Private Warrants are accounted for as derivative liabilities, leading to non-cash gains or losses from fair value fluctuations that can materially affect financial results.

Geopolitical & External Risks

• International Operations: Risks associated with expanding international sales and operations, including compliance with foreign laws, intellectual property enforcement challenges, currency exchange rate fluctuations, and potential for increased tax liabilities.
• Trade & Export Controls: Subject to U.S. export control and import laws (e.g., Export Administration Regulations, OFAC sanctions), which can restrict sales to certain countries or entities and require licensing.
• Government Contracts: U.S. government contracts are subject to specific regulations (e.g., FAR) and risks, including unilateral termination for convenience, audits, investigations, and penalties.
• Anti-Corruption Laws: Exposure to U.S. and foreign anti-corruption and anti-bribery laws (e.g., FCPA), with potential for criminal or civil liability from non-compliance by employees or third parties.

Innovation & Technology Leadership

Research & Development Focus: Rigetti Computing, Inc. is dedicated to advancing superconducting quantum computing, focusing on developing scalable multi-chip quantum processors and a full-stack product development approach. Its R&D efforts span quantum chip design and manufacturing, quantum computing systems architecture, quantum software, and quantum algorithms and applications, including quantum error correction.

Core Technology Areas:

• Superconducting Qubits: Utilizes transmon-style superconducting qubits, which are silicon-based electronic devices engineered through semiconductor industry techniques.
• Multi-Chip Quantum Processor Technology: Proprietary, patented, and patent-pending architecture that leverages superconducting multi-chip bonding, through-silicon via process technology, and interchip coupling for high-fidelity two-qubit logic gates between different silicon dies.
• Fab-1: An in-house wafer fabrication facility enabling rapid design-fab-test cycles for quantum processors.
• Quantum Operating System Software: A distributed operating system supporting hybrid quantum-classical computing environments, including parametric code compilation for faster hybrid algorithms.

Innovation Pipeline:

• Qubit Count & Performance: Aims to achieve Quantum Advantage (QA) with over 1,000 qubits, two-qubit gate fidelity above 99.9%, and gate speeds less than 50 nanoseconds.
• Scaling: The modular chip architecture demonstrated in Cepheus-1-36Q (four 9-qubit chiplets) and Cepheus-1-108Q (twelve 9-qubit chiplets) provides a pathway to scale to hundreds of logical qubits for Large-Scale Fault Tolerant Quantum Computing (LFTQC), which is anticipated to require 10,000 to 1,000,000 physical qubits.
• Error Correction: Actively developing quantum error correction capabilities, including a project with Riverlane Ltd. to integrate their error correction stack.

Intellectual Property Portfolio: As of December 31, 2025, Rigetti Computing, Inc. holds 121 issued patents and 160 pending patents. These cover a broad range of its full-stack technology, including quantum computing systems, software, access, quantum processor hardware, algorithms and applications, and chip design and fabrication.

• Patent Strategy: Focuses on protecting current developments and future technology roadmap.
• Trademark Registrations: "Rigetti" is registered in the U.S., U.K., and E.U.

Technology Partnerships: Rigetti Computing, Inc. engages in multi-year development partnerships to accelerate key technologies and explore high-value use cases. Partners include Fermilab, U.S. Department of Energy’s Superconducting Quantum Materials and Systems Center, Air Force Research Laboratory, Defense Advanced Research Projects Agency, National Aeronautics and Space Administration, Innovate UK, Quanta Computer Inc., and Riverlane Ltd.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company emphasizes the importance of attracting and retaining senior executive leadership and other key employees, such as quantum physicists and software engineers, for its future success. Board Composition: The Board of Directors includes Thomas J. Iannotti (Chair), Michael Clifton, Alissa Fitzgerald, Ray Johnson, and H. Gail Sandford. The audit committee of the board of directors is responsible for overseeing the Company’s cybersecurity risk management processes.

Human Capital Strategy

Workforce Composition: As of March 1, 2026, Rigetti Computing, Inc. employs 164 people globally, with 162 being full-time employees. The majority of employees are specialized in quantum physics, chip and hardware engineering, and software development. Employees are primarily based in the United States, with others in the United Kingdom, Australia, and Canada. Talent Management: The Company's future success is highly dependent on its ability to attract, develop, motivate, and retain highly qualified and skilled employees, particularly in specialized technical roles within the competitive quantum computing industry. Diversity & Development: Not explicitly detailed in the provided text.

Environmental & Social Impact

No material information explicitly stated in the filing regarding specific environmental commitments, climate strategy, supply chain sustainability, or social impact initiatives.

Business Cyclicality & Seasonality

Demand Patterns: Rigetti Computing, Inc.'s revenue is subject to significant fluctuations due to the timing and amounts of work performed under development contracts, satisfaction of performance obligations, and variability in QPU and quantum computing system sales. The expiration of the National Quantum Initiative Act in September 2023 and its pending reauthorization have negatively impacted revenue. Economic Sensitivity: The Company's operations are sensitive to domestic and global macroeconomic conditions, including changes in GDP growth, inflation, interest rates, and financial market fluctuations. Increased inflation rates are expected to raise costs (labor, employee benefits, equipment), potentially reducing customer budgets and demand.

Planning & Forecasting: Revenue is expected to vary significantly in future periods due to the nature of development contracts and sales cycles.

Regulatory Environment & Compliance

Regulatory Framework: Rigetti Computing, Inc. operates under a complex regulatory landscape:

• Industry-Specific Regulations: U.S. government contracts are subject to Title 2 of the Code of Federal Regulations, Other Transaction Authority, and the Federal Acquisition Regulation (including DFARS and DOEAR).
• International Compliance: Subject to U.S. export control and import laws (e.g., Export Administration Regulations, U.S. Customs regulations, OFAC sanctions), which may restrict sales or require licensing. Also subject to anti-corruption and anti-bribery laws (e.g., FCPA, U.S. domestic bribery statute, U.S. Travel Act) in countries where it conducts activities.
• Data Privacy: Subject to stringent and evolving U.S. state, federal, and foreign laws (e.g., UK GDPR, PIPEDA, CASL, CCPA) related to privacy, data use, and security, with risks of regulatory actions, fines, and litigation for non-compliance.
• Environmental & Safety: Subject to numerous federal, state, and local environmental laws and regulations concerning waste, hazardous materials, health, safety, and permitting.

Trade & Export Controls: U.S. export control and economic sanctions laws impose restrictions or prohibitions on the sale or supply of certain products, technologies, and services to embargoed or sanctioned countries, governments, persons, and entities. Compliance with these laws, including licensing requirements, is critical for international market access.

Legal Proceedings: Rigetti Computing, Inc. is not currently a party to any material legal proceedings that would have a material adverse effect on its business, financial position, results of operations, or cash flows.

Tax Strategy & Considerations

Tax Profile: Rigetti Computing, Inc. has incurred cumulative pre-tax losses and expects to continue incurring losses, maintaining a full valuation allowance against its deferred tax assets.

• Net Operating Loss Carryforwards (as of December 31, 2025):
  • U.S. Federal: $455.3 million ($453.9 million does not expire)
  • State: $193.3 million (start to expire in 2038)
• Research & Development Tax Credits (as of December 31, 2025):
  • Federal: $14.1 million (start to expire in 2044)
  • State: $12.6 million (do not expire)
• Effective Tax Rate (2025): 0% (due to full valuation allowance). Tax Reform Impact: The "One Big Beautiful Bill Act" signed into law on July 4, 2025, did not have a material impact on the consolidated financial statements.

Insurance & Risk Transfer

Risk Management Framework: Rigetti Computing, Inc. maintains insurance coverage for certain potential liabilities, including cybersecurity incidents and general liability. However, coverage may not be adequate for all claims or types of liabilities. The Company also uses vendor management processes to address cybersecurity risks associated with third-party service providers.