By Dan O’Shea posted 15 Nov 2022
Rigetti Computing was scheduled to deliver its third quarter earnings report Monday afternoon, but moments before company officials began the firm’s third quarter earnings call Rigetti issued a statement saying there would no earnings report to discuss.
The company filed for an extension for the filing of its Form 10-Q for the third quarter and for the nine-month period that ended on September 30, and that delay was just the beginning of the surprises. In the same statement, Rigetti also is planning to eventually re-state its earnings for the earlier quarters that ended on March 31 and June 30 of this year.
In addition, the company discovered a previously unknown $1.6 million in operating expenses related to “electric utility fees” at its Berkley, California location going back to 2019 that had never been paid.
These revelations come less than a week after it was announced that Rigetti founder Chad Rigetti will be leaving the company as of Dec. 15, an announcement which itself came days after the company said the founder would be moving out of corporate leadership positions to focus on product development.
Alissa Fitzgerald, who described herself on the earnings call as Rigetti’s longest tenured board member, said during the call that Chad Rigetti’s imminent departure from the firm was his “personal decision to leave.” She also said the company is working on a separation agreement with Chad Rigetti, the details of which will be made public.
She added that Rigetti Computing has a firm belief that for the company to realize its potential it needs a “seasoned public company executive” to focus “on the time-consuming day-to-day demands of running a public company.” She said qualified candidates have been identified.
Rigetti’s interim President and CEO Rick Danis also spoke during the call, saying that Rigetti is not planning to make any changes to its technology roadmap. He also was upbeat about the company’s ongoing prospects.
To go into greater detail on all of the above issues, the following is what Rigetti CFO Brian Sereda said during the call, which appears to have been read directly from the company statement issued just prior to the call:
“The Company has historically used a valuation methodology to account for the earn-out liability related to SPAC sponsor shares that are subject to vesting following the completion of the Company’s business combination with Supernova Partners Acquisition Company II Ltd., which used a volatility assumption based on a weighted average of the volatilities of the trading price of common stock for a group of comparable public companies and the common stock of the Company and the trading price of the Company’s public warrants. In connection with the preparation of the financial statements for the third quarter of 2022, management evaluated the valuation assumptions utilized in estimating the fair value of these shares using a Monte Carlo simulation model and determined that the volatility assumption used in the valuation should be revised to include a greater weight for the volatility of the trading price of the Company’s public warrants and should have included such greater weighting in the preparation of the financial statements for the first and second quarters of 2022. Accordingly, the Company has determined that the financial statements for the quarters ended March 31, 2022 and June 30, 2022 are required to be restated and the Company intends to prepare and file with the SEC a Form 10-Q/A for each such period. In addition, the Company is completing its analysis with respect to the treatment of additional operating expenses estimated to total approximately $1.6 million in the aggregate relating to electrical utility fees for a portion of the electrical usage at its Berkeley location since 2019 that were not paid and recognized in prior periods. The Company is evaluating the accounting for these additional operating expenses, which is expected to include recording an accrual of the estimated additional electric utility fees to be paid to the utility provider in its financial statements for the quarters ended March 31, 2022 and June 30, 2022, and recording operating expenses in its financial statements for the quarter ended September 30, 2022.”
Dan O’Shea has covered telecommunications and related topics including semiconductors, sensors, retail systems, digital payments and quantum computing/technology for over 25 years.