IonQ, Inc. - Annual Report: 2021 (Form 10-K)

☒	ANNUAL 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 FOR THE TRANSITION PERIOD FROM                 TO

Delaware		85-2992192
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
4505 Campus Drive College Park, MD 20740		20740
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share Warrants, each exercisable for one share of common stock for $11.50 per share		IONQ WS		New York Stock Exchange New York Stock Exchange

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☒
Emerging growth company		☒

Table of Contents 

Since classical computing emerged in the century, there has been exponential progress in computer design, with processing power roughly doubling every few years (Moore’s law). The true economic and social impact of computing is difficult to measure because it has so thoroughly permeated every aspect of life, altering the trajectory of society.

Monte Carlo simulations are probability simulations used to calculate the expected distribution of possible outcomes in processes involving random variables. Such simulations are used pervasively in finance, banking, logistics, economics, engineering and applied sciences. A key parameter of Monte Carlo simulations is the degree of accuracy desired to attain with the result. To obtain 99.9% accuracy, a classical computer requires around one million simulations. Quantum algorithms, however, can achieve the same accuracy using only one thousand simulations, thereby significantly reducing the time it takes to perform Monte Carlo simulations. This is especially important when running these simulations is expensive.

performance computers. Because optimization issues bedevil so many complicated processes in industries ranging from logistics to pharmaceutical drug design to climate modeling, the application of quantum algorithms to optimization problems could have impacts on society.

: In natural qubit-based quantum computers, a system is built around naturally-occurring substrates exhibiting quantum properties.

: In solid-state-based quantum computers, the qubits are engineered into the system.

: Classical computers in a data center can be used to simulate quantum computers. Although useful for small-scale quantum experiments, quantum simulation on classical computers is still bound by the same limitations of classical computing and would require an impractical number of data centers to tackle meaningful quantum problems.

Alongside the benefits of the trapped ion approach, there are several challenges inherent in it that serve as strengthening the advantages of our systems. These key challenges include:

To create trapped atomic ion qubits using our approach, a solid source containing the element of interest is either evaporated or laser-ablated to create a vapor of atoms. Laser light is then used to strip one electron selectively from each of only those atoms of a particular isotope, creating an electrically charged ion. Ions are then confined in a specific configuration of electromagnetic fields created by the trapping structure (, the ion trap), to which their motion is confined due to their charge. The trapping is done in an UHV chamber to keep the ions well-isolated from the environment. Isolating and loading a specific isotope of a specific atomic species ensures each qubit in the system is identical. Two internal electronic states of the atom are selected to serve as the qubit for each ion. The two atomic states have enough frequency separation that the qubit is easy to measure through fluorescence detection when an appropriate laser beam is applied.

Today, all qubits in our systems are stored on a single chip, referred to as a quantum processing unit (“QPU”). QPUs can have several cores, or zones for trapping chains of ions, comparable to multicore central processing unit (“CPU”) chips in classical computing. Each core can contain up to about 100 qubits in a linear crystal, and dozens of cores can potentially be in a single QPU. Within a QPU, some qubits can be physically moved between cores to accommodate quantum communication between the cores. This process of moving ions within a QPU is called “shuttling” and is achieved by modifying the electromagnetic fields that form the trap.

In addition to increasing the number of qubits per QPU, we believe we have identified, and we are currently developing, the technology needed to connect qubits between trapped ion QPUs, which may be commercially viable in the future. This technology, known as a photonic interconnect, uses light particles to communicate between qubits while keeping information stored stably on either end of the interconnect. The basic protocol for this photonic interconnect between ion traps in two different vacuum chambers was first realized by our Christopher Monroe’s research team in 2007. We believe this protocol can be combined with switching technology to enable quantum computers at large scale. We have deep expertise in photonics; while at Bell Labs, Jungsang Kim led a team to build the world’s largest optical switch. Photonic interconnects are designed to allow our systems to compute with entangled qubits spanning multiple QPUs, which we believe can open up the possibility of scaling quantum computers indefinitely, similar to how high-performance computers and data centers have been scaled.

Our quantum architecture is modular, meaning that if development of this architecture is successful, the number of qubits in a QPU, or the number of QPUs in a system, could be adjusted. Also, by allowing for each qubit in a system to entangle with any other qubit in that system, we believe that a system’s number of quantum gates could increase rapidly with each additional qubit added. This connectivity is one of the key reasons we believe our systems will be computationally powerful.

radio frequency (“RF”) signals using digital chipsets, which are custom-configured to generate the signals for qubit manipulation. An operating system manages the quantum computer, maintaining the system in operation. It includes software toolsets for converting quantum programs from users into a set of instructions the computer hardware can execute to yield the desired computational results. To support system access from the cloud, we offer cloud management tools and application programming interfaces (“APIs”) that permit programming jobs to run remotely.

A key milestone in building larger quantum computers is achieving fault-tolerant quantum error-correction. In quantum error-correction, individual physical qubits prone to errors are combined to form an error-corrected qubit (sometimes referred to as a logical qubit) with a much lower error rate. Determining how many physical qubits are needed to form a more reliable logical qubit (the resource “overhead”) depends on both the error rate of the physical qubits and the specific error-correcting codes used. In 2020, our Dr. Monroe’s research team at the University of Maryland demonstrated the first error-corrected qubit using 13 trapped ion qubits. With our unique architecture, we believe quantum error-correction can be completely coded in software, allowing varying levels and depths of quantum error-correction to be deployed as needed. Because the ion qubits feature very low idle and native error rates and are highly connected, we expect the error-correction overhead to be about 16:1 to achieve the first useful quantum applications. This contrasts with other approaches, for which we estimate the overhead to be in the range of 1,000:1 to 100,000:1.

computers, including the early introduction of quantum error-correction, is intended to significantly compress the time required for reaching the point when we expect quantum computers may become commercially impactful at scale. We believe that many of the technological components needed to accomplish the performance goals of the roadmap, such as high-fidelity gate operations, photonic interconnects and quantum error-correction, have been realized in demonstrations in trapped ion systems. Given our track record of engineering and technology development, we believe that, over time, we will be able to successfully translate these technology components into products, which may enable successful deployment of our quantum computers and deliver material commercial value to customers.

The scaling of classical computer technology, which unlocked continuously growing markets over many decades, was driven by exponential growth in computational power coupled with exponential reduction in the cost of computational power for each generation (Moore’s law). The key economic driver permitting the expansion of digital computer applications to new segments of the market was this very phenomenon of capability doubling in each generation with costs rising only modestly. We believe the scaling of quantum computing may follow a similar trajectory: if the #AQ available in each generation scales dramatically, the cost would need to be reduced exponentially to enable true scaling of quantum computers. Our systems have benefitted from years of architectural focus on scalability that addresses both #AQ and cost and, as such, we believe that if we are able to successfully solve remaining scalability challenges, these systems may become increasingly powerful and accessible in tandem.

This first stage focuses on quantum algorithm development and we expect it to involve deep partnerships between us and our customers to lay the groundwork for applying quantum solutions to the customer’s industry. We also anticipate uneven revenue for this period given that the quantum computing market is still nascent. We expect the development phase for each market to be characterized by the following channels:

: This second phase is expected to commence if we are successful in demonstrating the commercial viability of quantum advantage in the industry and can therefore commence with developing commercial applications and applying that advantage broadly throughout the market with new customers.

We expect the technical complexity of the solutions required for quantum algorithms to address each application area will impact the timing of that market’s inflection point and transition from the development phase to the application phase. During the NISQ computing era, we expect quantum machine learning to be the first solution to transition into broadly available applications. Additional markets taking advantage of quantum material science research and optimization may come online next if broad-scale quantum advantage becomes accessible. If our quantum computers achieve full-scale fault tolerance, a diverse array of industries, ranging from quantum chemistry to deeper optimization, may be able to be transitioned to the application phase.

By directly integrating with us, customers can reserve dedicated execution windows, receive concierge-level application development support, gain early access to next-generation hardware, or host their own quantum computer. Such access is currently limited to a select group of

We expect our standard offerings will include additional bundled services in exchange for an annual commitment, such as usage-based access to our cloud platform, reserved system time, consultations with solution scientists, and other application and integration support.

In July 2016, we entered into a license agreement with the University of Maryland and Duke University, which was subsequently amended in September 2017, October 2017, October 2018, February 2021, April 2021 and September 2021 (as amended, the “License Agreement”), under which it obtained a worldwide, royalty-free, sublicensable license under certain patents, and other intellectual property to develop, manufacture and commercialize products for use in certain licensed fields, the scope of which would include the application of the licensed intellectual property in ion trap quantum computing. The License Agreement provides an exclusive license under the universities’ interest in all patents (and for other types of intellectual property), subject to certain governmental rights and retained rights by the universities and other institutions to use and practice the licensed patents and technology for internal research and other purposes. We can add patents and other intellectual property to the License Agreement through the UMD Option Agreement and Duke Option Agreement (each as defined below).

There are companies pursuing photonic qubits, such as PsiQuantum and Xanadu, among others. PsiQuantum uses photons (i.e., individual particles of light) as qubits, whereas Xanadu uses a combination of photons and a collective state of many photons, known as continuous variable entangled states, as the qubits. Each company’s approach leverages silicon photonics technology to fabricate highly integrated photonic devices to achieve scaling. The advantages to this approach are that photons are cheap to generate, they can remain coherent depending on the property of the photons used as the qubit, and they integrate well with recently-developed silicon photonics technology; however, the disadvantages of photonic qubit approaches include the lack of high-quality storage devices for the qubits (photons move at the speed of light) and weak gate interactions (photons do not interact with one another easily). Both of these problems lead to photon loss during computation. Additionally, this approach requires quantum error correcting protocols with high overhead (10,000:1 or more).

Several other companies use a trapped ion quantum computing approach similar to ours, including Quantinuum Ltd. and Alpine Quantum Technologies GmbH. These companies share the fundamental advantages of the atomic qubit enjoyed by our approach. The differences between our technology and that of these companies lies in our processor architecture, system design and implementation and our strategies to scale. Based on publicly available information, Quantinuum processors operate with the application circuits broken down to two qubits at a time, with a bus width of two, and the ion qubits are shuffled between each gate operation. Our processor core involves a architecture, where the interaction among a few dozens of atomic ion qubits can be controlled using programmable laser pulses. This typically allows quantum logic gates between all possible pairs of qubits in the processor core without extraneous operations, which will enable us to operate some quantum gates that are not possible on other quantum architectures. We have also demonstrated the ability to shuttle multiple processor cores on the same chip, increasing the potential qubit capacity of a system. At scale, we believe these architectural features will confer benefits in the speed and efficiency of running algorithms. At a higher level, our scaling architecture will exploit optical interconnects among multiple QPUs in a way that allows full connectivity between any pair of qubits across the entire system. The modular scaling of multiple QPUs with photonic interconnects is unique in our architecture.

We protect our intellectual property rights via a combination of patent, trademark and trade secret laws in the United States and other jurisdictions, as well as with contractual protections, to establish, maintain and enforce rights in its proprietary technologies. Unpatented research, development, and engineering skills make an important contribution to our business. We pursue patent protection only when it is consistent with our overall strategy for safeguarding intellectual property.

In addition, we seek to protect our intellectual property rights through and invention assignment agreements with our employees and consultants and through agreements with business partners and other third parties. We have accumulated a broad patent portfolio, both owned and exclusively licensed, across the range of technological fronts that make up our systems and will continue to protect our innovative inventions in the United States and other countries. Our patent portfolio is deepest in the area of devices, methods and algorithms for controlling and manipulating trapped ions for quantum computing. Our trade secrets primarily cover the design, configuration, operation and testing of its quantum computers.

Our principal executive offices are located at 4505 Campus Drive, College Park, MD 20740, and our telephone number is corporate website address is www.ionq.com. Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only.

Our website address is . We make available on our website, free of charge, our Annual Reports, our Quarterly Reports on and our Current Reports on and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange

Commission (the “SEC”). The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at . The information found on our website is not incorporated by reference into this Annual Report or any other report we file with or furnish to the SEC.

Prior to the closing of our business combination, dMY common stock, units and warrants were listed on the NYSE under the symbols DMYI,” and respectively. On September 30, 2021, our common stock and public warrants began trading on the NYSE under the symbols “IONQ” and “IONQ WS,” respectively. We no longer have any outstanding units.

We are still in the early stages of generating revenue with our quantum computer. We have incurred significant operating losses since our inception. Our net losses were $106.2 million for the year ended December 31, 2021. As of December 31, 2021, we had an accumulated deficit of $145.8 million. We expect to continue to incur losses for the foreseeable future as we prioritize reaching the technical milestones necessary to achieve increasingly higher number of stable qubits and higher levels of fidelity than that which presently exists—prerequisites for quantum computing to reach broad quantum advantage.

Upon the closing of the merger and the concurrent private placement of 34,500,000 shares of common stock (the “PIPE”), the most significant change in our financial position and results of operations was an increase in cash (as compared to our balance sheet as of December 31, 2020) of approximately $363 million, which included $345 million in gross proceeds from the PIPE. Total direct and incremental transaction costs of dMY and Legacy IonQ were approximately $52 million, substantially all of which were offset to as costs related to the reverse recapitalization.

In March 2020, the outbreak was declared a pandemic by the World Health Organization. There are many uncertainties regarding the ongoing pandemic, and we are closely monitoring its impact on all aspects of our business, including how it impacts our employees, suppliers, vendors, and business partners. The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, or orders, and business shutdowns. These measures may adversely impact our employees and operations and the operations of suppliers and business partners. In addition, various aspects of our business cannot be conducted remotely. These measures by government authorities may continue to remain in place for a significant period of time and could adversely affect our development plans, sales and marketing activities, and business operations.

The evolution of the virus is unpredictable at this point and any resurgence may slow down our ability to develop our quantum computing program. The ongoing pandemic could limit the ability of suppliers and business partners to perform, including third-party suppliers’ ability to provide components and materials. We may also experience an increase in the cost of raw materials. The full impact of the pandemic continues to evolve. As such, the full magnitude of the pandemic’s effect on our financial condition, liquidity and future results of operations is uncertain. Management continues to actively monitor our financial condition, liquidity, operations, suppliers, industry, and workforce.

We have generated limited revenues since our inception. We derive revenue from providing access to quantum computing as a service (“QCaaS”) and professional services related to algorithms on our

General and administrative expenses consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated facility and other costs for our corporate, executive, finance, and other administrative functions. General and administrative expenses also include expenses for outside professional services, including legal, auditing and accounting services, recruitment expenses, information technology, travel expenses and certain taxes, insurance, and other administrative expenses.

The change in fair value of warrant liabilities consists of fair value adjustments recorded associated with the public and private placement warrants assumed as part of the business combination.

Revenue increased by $2.1 million, or 100%, to $2.1 million for the year ended December 31, 2021 from zero for the year ended December 31, 2020. The increase was primarily driven by four revenue contracts under which we provided services during the year ended December 31, 2021. While we generated revenue in 2020, we executed an arrangement with a customer for the issuance of a warrant to purchase shares of Legacy IonQ Series convertible redeemable preferred stock. The warrant was evaluated and considered to represent consideration provided to a customer and as such, the recognition of the warrant expense is recorded as a reduction in revenue as revenue is earned under the contract. The increase in revenue in 2021 was also partially due to the contract asset related to the warrant being fully amortized during the year. See Note 11—Warrant Transaction Agreement to our consolidated financial statements for additional information.

Cost of revenue increased by $0.9 million, or 627%, to $1.0 million for the year ended December 31, 2021 from $0.1 million for the year ended December 31, 2020. The increase was driven by the increase in costs to service active contracts for the year ended December 31, 2021.

Research and development expense increased by $10.1 million, or 99%, to $20.2 million for the year ended December 31, 2021 from $10.2 million for the year ended December 31, 2020. The increase was primarily driven

by a $4.9 million increase in expenses, including stock-based compensation of $2.1 million, as a result of increased headcount, a $1.3 million increase due to amortization of the Duke and UMD research and development arrangements, a $1.3 million increase in materials, supplies and equipment costs, and a $2.6 million increase in miscellaneous other research and development expenses.

Sales and marketing expense increased by $2.7 million, or 565%, to $3.2 million for the year ended December 31, 2021 from $0.5 million for the year ended December 31, 2020. The increase was primarily due to increased costs to promote service offerings and other marketing initiatives of approximately $2.0 million and an increase of $0.8 million of payroll-related expenses as a result of increased headcount.

General and administrative expenses increased by $10.2 million, or 287%, to $13.7 million for the year ended December 31, 2021 from $3.5 million for the year ended December 31, 2020. The increase was primarily driven by an increase of $6.3 million in payroll-related expenses, including an increase in stock-based compensation of $4.3 million, due to increased headcount to support the growth of our business, an increase of $1.2 million in legal fees, an increase of $1.1 million in directors and officers insurance costs as a result of becoming a public company, an increase of $0.8 million in auditing and accounting fees, and an increase of $0.7 million in rent and utilities costs due to expansion of headquarters office space in the fourth quarter of 2020.

Depreciation and amortization expenses increased by $1.1 million, or 82%, to $2.5 million for the year ended December 31, 2021 from $1.4 million for the year ended December 31, 2020. The increase was primarily driven by an increase of $0.5 million due to amortization of capitalized internally developed software, an increase of $0.6 million in depreciation expense associated with capitalized quantum computing system costs and capitalized research and development equipment.

The change in fair value of warrant liabilities increased $63.3 million as a result of expense adjustments recorded for the public and private placement warrants assumed as part of the business combination.

In connection with the business combination, $4.3 million of transaction costs were allocated and expensed related to the liability-classified public and private warrants.

Other income (expense), net decreased by $0.2 million, or 70%, for the year ended December 31, 2021, from $0.3 million for the year ended December 31, 2020. The decrease was due to a $0.2 million decrease in short-term dividend income.

Our primary uses of cash are to fund our operations as we continue to grow our business. We require a significant amount of cash for expenditures as we invest in ongoing research and development, and commercialization of our products. Until such time as we can generate significant revenue from sales of our QCaaS, if ever, we expect to finance our cash needs through our cash, cash equivalents and investments as well as equity or debt financings or other capital sources, including potential collaborations and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. 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 raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our quantum computing technology on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our quantum computing development efforts. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “.”

The following table summarizes current and long-term material cash requirements as of December 31, 2021, which we expect to fund primarily with cash and cash equivalents ():

Net cash used in operating activities during year ended December 31, 2021 was $26.5 million, resulting primarily from a net loss of $106.2 million, adjusted for charges of $63.3 million in fair value adjustments associated with our warrant liabilities, $7.7 million in stock-based compensation, $4.3 million in offering costs associated with warrants, $2.5 million in depreciation and amortization, and $1.3 million in costs associated with research and development arrangements. The increase in net cash used in operations from the prior year was primarily related to noncash expenses as well as our increased research and development activities and hiring of personnel to support the growth of our business and being a public company.

Net cash used in operating activities during the year ended December 31, 2020 was $12.0 million, resulting primarily from a net loss of $15.4 million, adjusted for charges of $1.4 million in depreciation and amortization and $1.2 million in stock-based compensation. The increase in net cash used in operations from the prior year was primarily related to our increased research and development activities and hiring of personnel.

We derive revenue from our QCaaS arrangements as well as from professional services related to and running algorithms on our quantum computing systems.

Capitalized internally developed software, which is included in intangible assets, net, on the consolidated balance sheet, consists of costs to purchase and develop software, which we use to provide services to our customers.

Judgement is used to determine when costs to develop software for a specific project should be capitalized and whether or not the costs represent activities necessary to enhance the functionality of the software or maintain the performance of the software, and whether it is considered probable that the software will be used to perform the function intended. Judgement is also used to determine when the software is available for use as well as the estimated useful life of the software.

Our private placement warrant liabilities are financial instruments that were initially recorded at fair value on the issuance date and were upon exercise or at each reporting date. All private placement warrants were exercised as of December 31, 2021.

Estimates were used to determine the fair value of the private placement warrants, specifically, when assumed as part of the business combination and then again upon exercise during the year. The fair value of the private placement warrants was determined using the Black-Scholes valuation model. Inherent in the valuation were assumptions related to expected stock-price volatility, expected term, risk- free interest rate and dividend yield. We estimated the volatility of the private placement warrants based on implied volatility from our publicly traded warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the private placement warrants. The risk-free interest rate was based on the U.S. Treasury yield curve on the measurement date for a maturity similar to the expected remaining life of the private placement warrants. The expected life of the private placement warrants was assumed to be equivalent to their remaining contractual term. The dividend rate was based on the historical rate, which we anticipated remaining at zero.

The assumed expected stock-price volatility, expected term, risk-free interest rate, and dividend yield have a significant impact on the amounts recorded as adjustments for the private placement warrants. We believe the estimates applied were based on reasonable assumptions, but which were inherently uncertain. As a result, actual results may differ from the assumptions and judgments used to determine the fair value of the private placement warrants.

Prior to the business combination, the fair value of our equity instruments and the associated stock-based compensation charges for stock options granted was determined based upon information available at the time of grant. Given the absence of a public trading market for our capital stock at the time of grant for awards granted prior to the business combination, and in accordance with the American Institute of Certified Public Accountants Practice Aid, , our management exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our equity instruments at each grant date.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to growth companies, and any such election to not take advantage of the extended transition period is irrevocable. During the extended transition period, it may be difficult or impossible to compare our financial results with the financial results of another public company that complies with public company effective dates for accounting standard updates because of the potential differences in accounting standards used.

We will remain an emerging growth company under the JOBS Act until the earliest of (a) December 31, 2025, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.07 billion, (c) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by or (d) the date on which we have issued more than $1.0 billion in debt securities during the previous three years.

We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and common stock held by nonaffiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and common stock held by is less than $700.0 million measured on the last business day of our second fiscal quarter.

The financial statements, together with the report of our independent registered public accounting firm, required by this item are set forth beginning on page of this Annual Report.

We maintain “disclosure controls and procedures,” as defined in Rules and under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules and under the Exchange Act), as of the end of the period covered by this Annual Report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2021, our disclosure controls and procedures were not effective at a reasonable assurance level as a result of the material weakness that existed in our internal control over financial reporting as described below, and which continues to exist.

This Annual Report does not include an attestation report of our registered public accounting firm due to an exemption for “emerging growth companies.”

Except as described above under Remediation Plan, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by the Exchange Act that occurred during the period covered by this Annual Report on has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

has served as a member of our board of directors and president and chief executive officer since the closing of the business combination in September 2021. Mr. Chapman previously served as Legacy IonQ’s president and chief executive officer and a member of its board of directors since May 2019. From September 2014 to May 2019, Mr. Chapman served as a director of engineering for Amazon Prime at Amazon.com, Inc. prior to joining IonQ. Before that, Mr. Chapman was the president at Media Arc, Inc. We believe Mr. Chapman is well qualified to serve as a member of our board of directors because of his prior leadership and officer positions at technology and software companies.

has served as a member of our board of directors and chief strategy officer since the closing of the business combination in September 2021. Dr. Kim is the of Legacy IonQ and served as its chief strategy officer and a member of its board of directors since September 2015. Dr. Kim assumed the role of chief technology officer in 2020. Dr. Kim has served as assistant/associate/full professor in the Department of Electrical and Computer Engineering, Department of Physics and Department of Computer Science at Duke University since June 2004. From 2006 to 2020, Dr. Kim was also the founder and president and chief executive officer of Applied Quantum Technologies, Inc. Dr. Kim received a B.S. in physics from Seoul National University and a Ph.D. in physics from Stanford University. We believe Dr. Kim is well qualified to serve as a member of our board of directors because of his extensive research in electrical and computer engineering and quantum mechanics.

has served as a member of our board of directors and chairman of the board since the closing of the business combination in September 2021. Dr. Barratt served as a member of Legacy IonQ’s board of directors since January 2021. Until May 2020, Dr. Barratt served as senior vice president and general manager of the Connectivity Group of Intel Corporation, a semiconductor company, since its acquisition of Barefoot Networks, Inc., a computer networking company, in July 2019, where he previously served as president and chief executive officer since April 2017. From June 2013 to January 2017, Dr. Barratt held several different roles at Google, including senior vice president, access and energy and advisor. Dr. Barratt previously served as president of Qualcomm Atheros, the networking and connectivity subsidiary of Qualcomm Inc., and as president, chief executive officer and a director of Atheros Communications, Inc., a fabless semiconductor company, until its acquisition by Qualcomm. Dr. Barratt has also served as a member of the board of directors of Intuitive Surgical, Inc., a robotic-assisted surgery company, since April 2011 and as chairman of the board of directors since April 2020. Dr. Barratt received a B.E. in electrical engineering and a B.S. in pure mathematics and physics from the

has served as a member of our board of directors since the closing of the business combination in September 2021. Mr. Bernal served as a member of Legacy IonQ’s board of directors since February 2017. Mr. Bernal has served as a venture partner at New Enterprise Associates since February 2010. From May 2006 to February 2010, Mr. Bernal was a partner at Sequel Venture Partners prior to joining New Enterprise Associates. Prior to that, Mr. Bernal was a partner at Sutter Hill Ventures and was vice president of operations and chief development officer at Cisco Systems, Inc. Mr. Bernal currently serves on the board of directors of Cohere Technologies, Inc., and Tigera Inc. Mr. Bernal received a B.S. in electrical engineering from DeVry Institute of Technology. We believe Mr. Bernal is qualified to serve as a member of our board of directors because of his integral involvement in the technology industry, generally, and management roles at global venture capital firms.

has served as a member of our board of directors since the closing of the business combination in September 2021. Dr. Byers served as a member of Legacy IonQ’s board of directors since February 2017. In March 2021, Dr. Byers founded Byers Capital, a venture capital investment firm. Prior to founding Byers Capital, Dr. Byers was a general partner at GV (formerly Google Ventures), a venture capital investment firm, from April 2010 to March 2021. Dr. Byers has served as a member of the board of directors of Magenta Therapeutics since April 2017, and is currently Chairman of the board of directors of Pact Pharma, Inc. and previously served as their president from February 2018 to October 2018. Dr. Byers also serves on the board of directors of several private companies, including Spotlight Therapeutics. Prior to joining GV, Dr. Byers helped start two companies, led research projects on biomedical engineering at Stanford University and was an angel investor. Dr. Byers received a Ph.D. and M.S. in bioengineering from Stanford University and holds a B.S in biomedical engineering and a B.S in economics from Duke University. We believe Dr. Byers is qualified to serve as a member of our board of directors because of his substantial involvement with venture capital investment firms and prior board positions at various biotechnology companies.

has served as a member of our board of directors since the closing of the business combination in September 2021, and was the chief executive officer and board member of our predecessor, dMY Technology Group, Inc. III, since inception. Since June and December 2020, respectively, Mr. de Masi has also served as the chief executive officer and director of dMY Technology Group, Inc. II and dMY Technology Group, Inc. IV. He has also been the of the board of directors of AdMY Technology Group, Inc. since January 2021. From January 2020 to December 2020, Mr. de Masi served as Chief Executive Officer of dMY Technology Group, Inc. and has served as director of Rush Street Interactive, Inc. since December 2020, following its business combination with dMY Technology Group, Inc. Since January 2010, Mr. de Masi has been a member of the board of directors of Glu Mobile Inc., a publicly traded mobile gaming company. Since December 2014, he has served as chairman and he served as interim chairman from July 2014 to December 2014. From January 2010 to November 2016, he served as its president and chief executive officer. From February 2019 to March 2020, Mr. de Masi was the chief innovation officer at Resideo Technologies, Inc., a publicly traded securities solutions company. From October 2018 to January 2020, he served as a member of its board of directors and from February 2019 until January 2020 he served as its president of products and solutions. From November 2016 until October 2018, Mr. de Masi previously served as the president of Essential Products, Inc. Mr. de Masi served on the board of directors of Xura, Inc. and its audit committee from November 2015 until August 2016. Mr. de Masi was also previously the chief executive officer and Director of Mobile and Monstermob Ltd. Since November 2015, Mr. de Masi has served on the Leadership Council of the UCLA Grand Challenge. Mr. de Masi received a B.A. and an MSci. in physics from Cambridge University. We believe Mr. de Masi is qualified to serve as a member of our board of directors because of his breadth of experience as both an officer and board member at a variety of publicly traded technology companies.

has served as a member of our board of directors since December 2021. Since April 2019, Mr. Singh has served as Executive Vice President and Chief Financial Officer of Arm Limited, a British

has served as a member of our board of directors since the closing of the business combination in September 2021, and was the chief financial officer and chairman of the board of directors of our predecessor, dMY Technology Group, Inc. III, since inception. Since April 2021, Mr. You has served on the board of directors of Genius Sports Ltd., a publicly traded sports data and technology company, after its acquisition of dMY Technology Group II, where Mr. You had served as a director since June 2020. Since March 2021, Mr. You has served on the board of directors of Coupang, Inc, a south Korean publicly traded company. Since December 2020, Mr. You has also served as the chairman of dMY Technology Group, Inc. IV. From January 2020 to December 2020, Mr. You served as chairman of the board of directors of dMY Technology Group, Inc. and has served as director of Rush Street Interactive, Inc. since December 2020, following its business combination with dMY Technology Group, Inc. Since January 2019, Mr. You has served as a member of the board of directors of Broadcom Inc., a publicly traded semiconductor and software company. In September 2016, Mr. You founded GTY Technology Holdings, Inc. (“”), a publicly traded technology company. From September 2016 until February 2019, Mr. You served as its president, chief financial officer and director when GTY consummated its initial business combination. From February 2019 to May 2019, he served as its president and from February 2019 through August 2019 he served as its chief financial officer. Since May 2019, he has served as its vice chairman of the board of directors. From May 7, 2019 to May 20, 2019, Mr. You also served as GTY’s president. From February 2008 to September 2016, Mr. You served as the executive vice president of EMC Corporation (formerly NYSE: EMC) in the office of the chairman. Mr. You was chief executive officer at BearingPoint (formerly KPMG Consulting, Inc.) as well as chief financial officer of Oracle and Accenture. Mr. You also previously spent 14 years on Wall Street, including serving as a managing director in the Investment Banking Division of Morgan Stanley, where he headed the Computer and Business Services Group. From 2004 to October 2016, Mr. You served as a director of Korn/Ferry International. From 2004 to 2005, he served as a director of Oracle Japan, Since August 2016, Mr. You has been a trustee of the U.S. Olympic Committee Foundation. Mr. You received a B.A. in economics from Harvard College and an M.A. in economics from Yale University. We believe Mr. You is qualified to serve as a member of our board of directors because of his extensive and varied experience as both a senior executive and board member at a variety of publicly traded technology and software companies.

has served as our chief scientist since the closing of the business combination in September 2021. Dr. Monroe is the of Legacy IonQ and served as its chief scientist since September 2016. From August 2018 until May 2019, Dr. Monroe served as IonQ’s chief executive officer. Dr. Monroe has served as a Professor of Electrical Computer Engineering and Physics at Duke University since January 2021. Dr. Monroe held various positions at the University of Maryland, including from January 2021 to present as a College Park Professor, from 2015 to December 2020 as a Distinguished University Professor of Physics, from September 2018 to December 2020 as a Professor of Electrical and Computer Engineering, and from September 2007 to December 2020 as a Bice Zorn Professor of Physics. From 2014 to December 2020, Dr. Monroe was a Fellow at the Center for Quantum Information and Computer Science and from 2007 to December 2020, Dr. Monroe was a Fellow at the Joint Quantum Institute. Dr. Monroe also held various academic and research positions at the University of Michigan, Ann Arbor, University of Colorado, Boulder, and the National Institute of Standards and Technology. Dr. Monroe serves on advisory boards at several academic institutions, including the Max Planck Institute of Quantum Optics (since 2018), the CalTech Institute for Quantum Information (since 2018), the Center for Quantum Technology, National University of Singapore (since 2018). Dr. Monroe received an S.B. in physics from Massachusetts Institute of Technology and a Ph.D. in physics from the University of Colorado, Boulder.

has served as our chief financial officer since the closing of the business combination in September 2021, and as our secretary from September 2021 to March 2022. Mr. Kramer served as Legacy IonQ’s chief financial officer since February 2021. From February 2017 to February 2021, Mr. Kramer served as managing director of Remarque Advisory. From November 2011 to October 2016, Mr. Kramer also served as chief financial officer of Opower, Inc., a cloud-based enterprise software company in the utilities space. From 2000 to 2011, Mr. Kramer served as chief financial officer of Cvent, Inc., a cloud-based enterprise software company in the event-management space. From 1998 to 2000, Mr. Kramer served as a consultant at the Boston Consulting Group. Mr. Kramer holds an M.B.A. from Harvard Business School and an M.S. in economics from the Norwegian School of Economics.

has served as our general counsel and secretary since March 2022. From December 2019 to March 2022, Ms. Babinski served as deputy general counsel at Credit Karma, LLC, a multinational personal finance company, where she also served in various roles from August 2015 to December 2019, including as the lead of numerous legal functions such as product, marketing, regulatory, privacy, litigation, employment and government relations in the United States, Canada and the United Kingdom. Prior to that, Ms. Babinski worked at the law firm Baker Hostetler LLP practicing in the Media, Technology and Intellectual Property group. Ms. Babinski received a J.D. from Northwestern University Pritzker School of Law and holds a B.A. in Journalism and Spanish from Pepperdine University.

The audit committee consists of Messrs. Blake Byers, Niccolo de Masi, Inder Singh and Harry You, each of whom our board of directors has determined satisfies the independence requirements under NYSE listing standards and the Exchange Act. The chair of the audit committee is Mr. You. Our board has determined that Mr. You is an “audit committee financial expert” within the meaning of SEC regulations. Each member of the audit committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, our board has examined each audit committee member’s scope of experience and the nature of their employment.

We have adopted a Code of Business Conduct and Ethics, or the Code of Conduct, applicable to all of our employees, executive officers and directors. The Code of Conduct is available at the investors section of our website at  Any amendments to the Code of Conduct, or any waivers of its requirements, are expected to be disclosed on our website to the extent required by applicable rules and exchange requirements. The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this Annual Report.