Rigetti Computing Inc

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations section should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” “will,” “continue,” “project,” “forecast,” “goal,” “should,” “could,” “would,” “potential,” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those described under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and elsewhere in this Quarterly Report on Form 10-Q that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. See “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations section should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” “will,” “continue,” “project,” “forecast,” “goal,” “should,” “could,” “would,” “potential,” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those described under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated under Part II “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. See “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

We have been generating revenue since 2018, primarily through partnerships with government agencies and commercial organizations; however, we have not yet generated profits. We have incurred significant operating losses since inception. Our net losses were $75.1 million and $71.5 million for the years ended December 31, 2023 and 2022, respectively, and our net loss was$33.2 million for the six months ended June 30, 2024. We expect to continue to incur additional losses for the foreseeable future as we invest in research, development, and infrastructure consistent with our long-term business strategy. As of June 30, 2024, we had an accumulated deficit of $387.0 million.

Current wording

We have been generating revenue since 2018, primarily through partnerships with government agencies and commercial organizations; however, we have not yet generated profits. We have incurred significant operating losses since inception. Our net losses were $75.1 million and $71.5 million for the years ended December 31, 2023 and 2022, respectively, and our net loss was$48.0 million for the nine months ended September 30, 2024. We expect to continue to incur additional losses for the foreseeable future as we invest in research, development, and infrastructure consistent with our long-term business strategy. As of September 30, 2024, we had an accumulated deficit of $401.8 million.

Previous wording

We believe that our existing cash, cash equivalents and marketable securities should be sufficient to meet our anticipated operating cash needs until midway through the first quarter of 2026, based on our current business plan, and expectations and assumptions considering current macroeconomic conditions. Accordingly, based on our estimates and current business plan, we expect that we will need to obtain additional capital to fund our research and development efforts and business objectives as currently planned. Our estimate does not assume any additional financing, and there is no assurance that additional financing will be available.

Current wording

Accordingly, based on our estimates and current business plan, we expect that we will need to obtain additional capital to fund our research and development efforts and business objectives as currently planned. Our estimate does not assume any additional financing, and there is no assurance that additional financing will be available.

Previous wording

Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and have affected our results of operations. For example, macroeconomic events, including rising inflation, the U.S. Federal Reserve raising interest rates, recent and potential bank failures, the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel and Hamas and the related risk of a larger conflict have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in the results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, including the risk factor titled“Unstable market and economic conditions have had and may continue to have serious adverse consequences on our business, financial condition and share price.”

Current wording

Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and have affected our results of operations. For example, macroeconomic events, including rising inflation, the U.S. Federal Reserve raising interest rates, the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel, Hamas and Hezbollah and the related risk of a larger conflict have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in the results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, including the risk factor titled“Unstable market and economic conditions have had and may continue to have serious adverse consequences on our business, financial condition and share price.”

Previous wording

We have experienced and may experience further increases in the cost of raw materials, component parts, and labor, which we largely attribute to inflation, the U.S. Federal Reserve raising interest rates, high demand, and supply chain restraints. Rising costs and supply chain constraints have been further exacerbated by the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel and Hamas and the related risk of a larger conflict.

Current wording

We have experienced and may experience further increases in the cost of raw materials, component parts, and labor, which we largely attribute to inflation, the U.S. Federal Reserve raising interest rates, high demand, and supply chain restraints. Rising costs and supply chain constraints have been further exacerbated by the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel, Hamas and Hezbollah and the related risk of a larger conflict.

Previous wording

Economic conditions in some parts of the world have been worsening, with disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide resulting from the effects of inflation and increases in interest rates. It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

Current wording

Economic conditions in some parts of the world have been worsening, with disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide resulting from uncertainty in the levels of future economic activity, inflation and interest rates. It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

Previous wording

of QPUs and providing development contracts, QCaaS offerings and other services. We expect selling, general and administrative expenses to increase as we grow our business, particularlyto the extent we achieve narrow and broad quantum advantage, and anticipate subsequently enhancing our product and service offerings, expanding our customer base, and implementing new marketing strategies.

Current wording

Selling, general and administrative expenses include compensation, employee benefits, stock-based compensation, insurance, facility costs, professional service fees, and other general overhead costs other than those associated with sales of QPUs and providing development contracts, QCaaS offerings and other services. We expect selling, general and administrative expenses to increase as we grow our business, particularlyto the extent we achieve narrow and broad quantum advantage, and anticipate subsequently enhancing our product and service offerings, expanding our customer base, and implementing new marketing strategies.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Revenue decreased by $0.2 million and increased by $0.6 million for the three and six months ended June 30, 2024, when compared to the three and six months ended June 30, 2023, respectively. Increases in revenue from development contracts and sales of QPUs for the three and six months ended June 30, 2024 were mostly offset by a decrease in QCaaS revenue. Our development contracts are typically fixed price milestone or cost share-based contracts and the timing and amounts of revenue recognized in any given period will vary significantly based on the delivery of the associated milestones and/or the work performed. The timing and delivery of sales of QPUs and QCaaS will also vary and impact revenue in any given quarterly or annual period. Revenue is expected to vary in terms of timing and size, resulting in significant fluctuations in revenue levels in future periods.

Current wording

Revenue decreased by $0.7 million and $0.1 million for the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively. The decreases were due to lower QCaaS revenue for the three and nine months ended September 30, 2024 of $0.8 million and $1.8 million, respectively, offset in part by higher revenue from development contracts and sales of QPUs. Our development contracts are typically fixed price milestone or cost share-based contracts and the timing and amounts of revenue recognized in any given period will vary significantly based on the delivery of the associated milestones and/or the work performed. The timing and delivery of sales of QPUs and QCaaS will also vary and impact revenue in any given quarterly or annual period. Revenue is expected to vary in terms of timing and size, resulting in significant fluctuations in revenue levels in future periods.

Previous wording

Cost of revenue increased by $0.5 million and $1.5 million for the three and six months ended June 30, 2024, when compared to the three and six months ended June 30, 2023, respectively. Theincreasein cost of revenue during the three and six months ended June 30, 2024 is primarily due to changes in the composition of our revenue and variability in the pricing and terms of our development contracts. During the three and six months ended June 30, 2024, we entered into a new contract to deliver a 24-qubit quantum computing system with higher costs and a lower gross margin profile than most of our other contracts, contributing to the increase in cost of revenue and lower gross margin percentage for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023.

Current wording

Cost of revenue increased by $0.3 million and $1.9 million for the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively. Theincreasesin cost of revenue are primarily due to changes in the composition of our revenue and variability in the pricing and terms of our development contracts. During the nine months ended September 30, 2024, we entered into a new contract to deliver a 24-qubit quantum computing system having higher costs and a lower gross margin profile than most of our other contracts. The increase in cost of revenue resulting from the unfavorable mix was partially offset by the impact of lower revenue.

Previous wording

We anticipate that R&D expenditure will grow in the future as we continue to focus on our technology roadmap and long-term goal of achieving broad quantum advantage.

Current wording

We anticipate that R&D expenditures will grow in the future as we continue to focus on our technology roadmap and long-term goal of achieving broad quantum advantage.

Previous wording

The decrease in the six months ended June 30, 2024 was due to a $1.4 million reduction in salaries and employee related costs, primarily related to our February 2023 restructuring. Costs mostly related to public company compliance decreased by $0.6 million, because many of these activities were either performed more efficiently or have been brought in house. The Ampere Forward Agreement which expired in October 2023 and an impairment charge for deferred offering costs added $2.0 million to selling, general and administrative expenses for the six months ended June 30, 2023. These decreases were partially offset by an increase in stock compensation expenses of $0.9 million for the six months ended June 30, 2024. Stock compensation expenses were favorably impacted during the six months ended June 30, 2023 due to forfeitures resulting from the February 2023 restructuring. Spending for cybersecurity and other IT related initiatives increased by $0.6 million. All other expenses increased by $0.6 million for the six months ended June 30, 2024, when compared to six months ended June 30, 2023.

Current wording

The decrease for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023, is primarily due to $2.2 million of expense recognized in the nine months ended September 30, 2023 for the Ampere Forward Agreement and an impairment charge of $0.8 million for deferred offering costs in the nine months ended September 30, 2023. This decrease was partially offset by an increase in stock-based compensation expenses of $1.3 million for the nine months ended September 30, 2024. Stock compensation expenses were favorably impacted during the nine months ended September 30, 2023 due to forfeitures resulting from the February 2023 restructuring. All other expenses decreased by a cumulative $0.4 million for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023.

Previous wording

Our outstanding debt carries a variable rate of interest. Interest expenses decreased by $0.6 million and $1.0 million during the three and six months ended June 30, 2024, when compared to the three and six months ended June 30, 2023, respectively. The reduction in interest expense was due to the lower outstanding balance of principal at June 30, 2024, when compared to June 30, 2023, due to principal repayments, offset in part by the impact of increases in the prime interest rate that occurred throughout 2023.

Current wording

Our outstanding debt carries a variable rate of interest. Interest expenses decreased by $0.7 million and $1.7 million during the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively. The reduction in interest expense was due to principal repayments and the lower outstanding principal throughout the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023.

Previous wording

Interest income was $1.2 million and $2.3 million for the three and six months ended June 30, 2024, down from $1.2 million and $2.5 million for the three and six months ended June 30, 2023, respectively. The decrease in interest income is due to lower balances of invested cash and available-for-sale investments during the three and six months ended June 30, 2024, when compared to the three and six months ended June 30, 2023, offset in part by higher rates of interest earned on our investments.

Current wording

Interest income was $1.2 million and $3.6 million for the three and nine months ended September 30, 2024, down from $1.3 million and $3.7 million for the three and nine months ended September 30, 2023, respectively. The decrease in interest income during the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, is due to lower balances of invested cash and available-for-sale investments, offset in part by higher rates of interest earned on our investments.

Previous wording

A discussion of the change in the fair value of the warrant liabilities is included in Note 8 to our condensed consolidated financial statements for the three and six months ended June 30, 2024, included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

A discussion of the change in the fair value of the warrant liabilities is included in Note 8 to our condensed consolidated financial statements for the three and nine months ended September 30, 2024, included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

The change in fair value of our warrant liabilities for the three and six months ended June 30, 2024 was a gain of $2.1 million and a loss $0.5 million, respectively. The change in fair value of our warrant liabilities for the three and six months ended June 30, 2023 wasminimal and a loss of $0.9 million, respectively The change in fair value for the three and six months ended June 30, 2024 was primarily due to the change in our stock price and related share price volatility.

Current wording

The change in fair value of our warrant liabilities for the three and nine months ended September 30, 2024 was a gain of $1.2 million and $0.7 million, respectively. The change in fair value of our warrant liabilities for the three and nine months ended September 30, 2023 wasa loss of $3.4 million and $4.3 million, respectively. The change in fair value for the three and nine months ended September 30, 2024 was primarily due to the change in our stock price and related share price volatility.

Previous wording

A discussion of the change in the fair value of the earn-out liabilities is included in Note 9 to our condensed consolidated financial statements for the three and six months ended June 30, 2024, included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

A discussion of the change in the fair value of the earn-out liabilities is included in Note 9 to our condensed consolidated financial statements for the three and nine months ended September 30, 2024, included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

The change in fair value of our earn-out liabilities for the three and six months ended June 30, 2024 was a gain of $1.3 million and a loss of $0.3 million, respectively. The change in fair value of our earn-out liabilities for three and six months ended June 30, 2023 was a loss of $0.4 million and $0.6 million, respectively. The change in fair value for the three and six months ended June 30, 2024 was primarily due to the change in our stock price and related share price volatility.

Current wording

The change in fair value of our earn-out liabilities for the three and nine months ended September 30, 2024 was a gain of $0.8 million and $0.5 million, respectively. The change in fair value of our earn-out liabilities three and nine months ended September 30, 2023 was a loss of $1.7 million and $2.4 million, respectively. The change in fair value for the three and nine months ended September 30, 2024 was primarily due to the change in our stock price and related share price volatility.

Previous wording

We did not record income tax expense during the three and six months ended June 30, 2024 or 2023 due to the Company’s loss position and full valuation allowance.

Current wording

We did not record income tax expense during the three and nine months ended September 30, 2024 or 2023 due to the Company’s loss position and full valuation allowance.

Previous wording

We have incurred net losses and negative cash flows since inception. Historically, we have financed our operations primarily through proceeds from the Business Combination (see Note 2 to our condensed consolidated financial statements for the three and six months ended June 30, 2024), issuance of common stock, preferred stock, warrants, convertible notes, venture backed debt and revenues. Our net losses were $75.1 million and $71.5 million for the years ended December 31, 2023 and 2022, respectively, and our net loss was$33.2 million for the six months ended June 30, 2024. We expect to continue to incur additional losses for the foreseeable future as we invest in research, development, and infrastructure consistent with our long-term business strategy. As of June 30, 2024, we had an accumulated deficit of $387.0 million.

Current wording

We have incurred net losses and negative cash flows since inception. Historically, we have financed our operations primarily through proceeds from the Business Combination (see Note 2 to our condensed consolidated financial statements for the three and nine months ended September 30, 2023), issuance of common stock, preferred stock, warrants, convertible notes, venture backed debt and revenues. Our net losses were $75.1 million and $71.5 million for the years ended December 31, 2023 and 2022, respectively, and our net loss was$48.0 million for the nine months ended September 30, 2024. We expect to continue to incur additional losses for the foreseeable future as we invest in research, development, and infrastructure consistent with our long-term business strategy. As of September 30, 2024, we had an accumulated deficit of $401.8 million.

Previous wording

We received net proceeds of $225.6 million from the closing of the Business Combination on March 2, 2022. During the three months ended March 31, 2024, we received proceeds of $12.8 million, from the sale of 10,056,799 shares of our common stock to B. Riley under a Purchase Agreement which has since terminated, because there are no remaining shares available for sale under the agreement. On March 15, 2024, we entered into an ATM Sales Agreement pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to $100,000,000, subject to certain limitations as set forth in the ATM Sales Agreement. During the six months ended June 30, 2024, we received net proceeds of $26.8 million from the sale of 19,423,375 shares of our common stock under the ATM sales agreement. During the month of July 2024, we received an additional $12.0 million of net proceeds from the sale of 11,294,746 shares of common stock under the ATM sales agreement.

Current wording

We received net proceeds of $225.6 million from the closing of the Business Combination on March 2, 2022. During the three months ended March 31, 2024, we received proceeds of $12.8 million, from the sale of 10,056,799 shares of our common stock to B. Riley under a Purchase Agreement which has since terminated, because there are no remaining shares available for sale under the agreement. On March 15, 2024, we entered into an ATM Sales Agreement pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to $100,000,000, subject to certain limitations as set forth in the ATM Sales Agreement. During the nine months ended September 30, 2024, we received net proceeds of $38.8 million from the sale of 30,718,121 shares of our common stock under the ATM sales agreement.

Previous wording

We believe that our existing balances of cash, cash equivalents and available-for-sale investments should be sufficient to meet our anticipated operating cash needs for at least the next 12 months, and to midway through the first quarter of 2026, based on our current business plan, and expectations and assumptions considering current macroeconomic conditions. Based on our estimates and current business plan, we expect that we will need to obtain additional capital to fund our research and development efforts and business objectives as currently planned. Our estimate does not assume any additional financing and we cannot be sure that additional financing will be available. If we are unable to raise additional funding when needed and on attractive terms, we may be required to delay, limit or substantially reduce our quantum computing development efforts. We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

We believe that our existing balances of cash, cash equivalents and available-for-sale investments should be sufficient to meet our anticipated operating cash needs for at least the next 12 months, and to midway through the first quarter of 2026, based on our current business plan, and expectations and assumptions considering current macroeconomic conditions. Based on our estimates and current business plan, we expect that we will need to obtain additional capital to fund our research and development efforts and business objectives as currently planned. Our estimate does not assume any additional financing and we cannot be sure that additional financing will be available. If we are unable to raise additional funding when needed and on attractive terms, we may be required to delay, limit or substantially reduce our quantum computing development efforts. We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated under Part II “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q.

Previous wording

These conditions have been further exacerbated by recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel and Hamas and the related risk of a larger conflict.

Current wording

These conditions have been further exacerbated by recent and potential future disruptions due to the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel, Hamas and Hezbollah and the related risk of a larger conflict.

Previous wording

If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or additional market corrections resulting from the impact of difficult macroeconomic conditions or disruptions in the banking system could materially affect our business and the value of our securities.

Current wording

If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or additional market corrections resulting from the impact of difficult macroeconomic conditions or disruption could materially affect our business and the value of our securities.

Previous wording

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed and on attractive terms, we may be required to delay, limit, or substantially reduce our quantum computing development efforts. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. Furthermore, we currently have on file with the SEC an effective shelf registration statement on Form S-3, which allows us to offer and sell up to an aggregate amount of $250.0 million of any combination of common stock, common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon exercise of warrants from time to time, pursuant to which we have entered into an ATM offering for the sale of up to an aggregate amount of $100 million of common stock from time to time, of which $60.2 million of common stock remains available for sale as of the date hereof.

Current wording

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed and on attractive terms, we may be required to delay, limit, or substantially reduce our quantum computing development efforts. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated under Part II “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q. Furthermore, we currently have on file with the SEC an effective shelf registration statement on Form S-3, which allows us to offer and sell up to an aggregate amount of $250.0 million of any combination of common stock, common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon exercise of warrants from time to time, pursuant to which we have entered into an ATM offering for the sale of up to an aggregate amount of $100 million of common stock from time to time, of which $60.2 million of common stock remains available for sale as of the date hereof.

Previous wording

As of June 30, 2024, the total principal amount outstanding under the Amended Loan Agreement was $16.2 million. The Amended Loan Agreement bears interest at a rate equal to the greater of 11% or the US Prime Rate plus 7.50% per annum, payable monthly, and is secured by a first-priority security interest in substantially all of our assets.

Current wording

As of September 30, 2024, the total principal amount outstanding under the Amended Loan Agreement was $12.9 million. The Amended Loan Agreement bears interest at a rate equal to the greater of 11% or the US Prime Rate plus 7.50% per annum, payable monthly, and is secured by a first-priority security interest in substantially all of our assets.

Previous wording

Net cash used in operating activities during the six months ended June 30, 2024 was $26.7 million, primarily resulting from our net loss of $33.2 million, partially offset by non-cash expenses totaling $10.0 million. Changes in operating assets and liabilities had a $3.4 million negative impact on net cash used in operating activities during the six months ended June 30, 2024.

Current wording

Net cash used in operating activities during the nine months ended September 30, 2024 was $42.1 million, primarily resulting from our net loss of $48.0 million, partially offset by non-cash expenses totaling $13.2 million. Changes in operating assets and liabilities had a $7.2 million negative impact on net cash used in operating activities during the nine months ended September 30, 2024.

Previous wording

Net cash used in operating activities during the six months ended June 30, 2023 was $33.6 million, primarily resulting from our net loss of $40.3 million, partially offset by non-cash expenses totaling $12.7 million. Changes in operating assets and liabilities had a $6.0 million negative impact on net cash used in operating activities during the six months ended June 30, 2023.

Current wording

Net cash used in operating activities during thenine months ended September 30, 2023 was $38.2 million, primarily resulting from our net loss of $62.5 million, partially offset by non-cash charges totaling $24.9 million. Changes in operating assets and liabilities had a minimal impact on net cash used in operating activities during the nine months ended September 30, 2023.

Previous wording

Cash used in operating activities was reduced by $6.9 million to $26.7 million duringthe six months ended June 30, 2024, from $33.6 million for the six months ended June 30, 2023. Our net loss from operations decreased by $7.1 million to $33.2 million for the six months ended June 30, 2024. Non-cash charges impacting our net loss from operations decreased by $2.7 million to $10.0 million during the six months ended June 30, 2024, from $12.7 million during the six months ended June 30, 2023. Operating assets and liabilities had a $2.6 million favorable impact on the change in cash used in operating activities during the six months ended June 30, 2024, compared to the three months ended June 30, 2023.

Current wording

Cash used in operating activities increased by $3.9 million to $42.1 million duringthe nine months ended September 30, 2024, from $38.2 million during the nine months ended September 30, 2023. Our net loss decreased by $14.5 million to $48.0 million for the nine months ended September 30, 2024. Non-cash charges impacting our net loss decreased by $11.8 million to $13.2 million during the nine months ended September 30, 2024, from $24.9 million during the nine months ended September 30, 2023. Operating assets and liabilities had a $6.7 million unfavorable impact on the change in cash used in operating activities during nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Previous wording

Cash Flows Used in Investing Activities

Current wording

Cash Flows (Used in) Provided by Investing Activities

Previous wording

Cash used in investing activities during the six months ended June 30, 2024 totaled $7.0 million, resulting from $76.0 million of purchases of available-for-sale securities and $7.5 million of purchases of property and equipment, offset in part by $76.5 million of maturities of available-for-sale securities.

Current wording

Cash used in investing activities during thenine months ended September 30, 2024 totaled $0.8 million, resulting from $98.5 million of purchases of available-for-sale securities and $9.8 million of purchases of property and equipment, offset in part by $107.5 million of maturities of available-for-sale securities.

Previous wording

Cash used in investing activities during the six months ended June 30, 2023 totaled $2.8 million, resulting from $57.6 million of purchases of available-for-sale securities and $5.7 million of purchases of property and equipment, offset in part by $60.6 million of maturities of available-for-sale securities.

Current wording

Cash provided by investing activities during the nine months ended September 30, 2023 totaled $11.5 million, resulting from $98.1 million of maturities of available-for -sale securities, partially offset by $7.5 million of purchases of property and equipment and $79.0 million of purchases of available-for-sale securities.

Previous wording

Net cash used in investing activities during the six months ended June 30, 2024 increased by $4.2 million when compared to the six months ended June 30, 2023, primarily due to an increase in purchases of property and equipment and fluctuations in the level of investment in available-for-sale securities.

Current wording

Net cash used in investing activities during the nine months ended September 30, 2024 increased by $12.3 million when compared to the nine months ended September 30, 2023, primarily due to an increase in purchases of property and equipment and fluctuations in the level of investment in available-for-sale securities.

Previous wording

Cash provided by financing activities during the six months ended June 30, 2024 totaled $33.1 million. We received net proceeds of $12.8 million from the sale of 10,056,799 shares of common stock to B. Riley through our prior Purchase Agreement and net proceeds of $26.8 million from the sale of 19,423,375 shares of common stock pursuant to our ATM program. Proceeds from the sale of common stock were offset in part by principal payments of $6.2 million under the Amended Loan Agreement with Trinity Capital and payments of $0.4 million for deferred offering costs.

Current wording

Cash provided by financing activities during thenine months ended September 30, 2024 totaled $41.8 million. We received net proceeds of $12.8 million from the sale of 10,056,799 shares of common stock to B. Riley through our prior Purchase Agreement and net proceeds of $38.8 million from the sale of 30,718,121 shares of common stock pursuant to our ATM program. Proceeds from the sale of common stock were offset in part by principal payments of $9.5 million under the Amended Loan Agreement with Trinity Capital and payments of $0.5 million for deferred offering costs.

Previous wording

Cash provided by financing activities during the six months ended June 30, 2023 totaled $0.3 million, reflecting $2.3 million of proceeds from the sale of 1,869,419 shares of common stock to B. Riley through the Purchase Agreement and $0.9 million of proceeds from the exercise of stock options and warrants, offset in part by principal payments of $2.9 million under the Amended Loan Agreement with Trinity Capital and payments of $0.1 million for deferred financing costs.

Current wording

Cash provided by financing activities during the nine months ended September 30, 2023 totaled $10.5 million, reflecting $15.1 million of proceeds from the sale of 8.2 million shares of common stock to B. Riley through the Purchase Agreement, and $1.0 million of proceeds from the exercise of stock options and warrants, offset in part by principal payments of $5.4 million under the Amended Loan Agreement and payments of $0.1 million for deferred financing costs.

Previous wording

Net cash provided by financing activities during the six months ended June 30, 2024 increased by $32.8 million when compared to thesix months ended June 30, 2023, primarily due to the sale of common stock through our prior Purchase Agreement with B. Riley and our ATM program in the six months ended June 30, 2024. We expect to satisfy our cash needs primarily through on-hand cash, cash equivalents and available-for-sale investments, the sale of common stock through the ATM Agreement, subject to market and other conditions, and other potential securities financings or capital sources.

Current wording

We expect to satisfy our cash needs primarily through on-hand cash, cash equivalents and available-for-sale investments, the sale of common stock through the ATM Agreement, subject to market and other conditions, and other potential securities financings or capital sources.