Business context and reporting period
This is Supernova Partners Acquisition Company II, Ltd.’s unaudited Form 10-Q for the quarter ended September 30, 2021—not a standalone Rigetti Computing filing. Supernova was a blank-check company formed to pursue a business combination and had not begun operating activities. On October 6, 2021, it announced a merger agreement with Rigetti Holdings, Inc.; the proposed transaction and PIPE financing are subsequent events disclosed in this filing.
Financial results and position
- Revenue: No operating revenue. Supernova stated it would not generate operating revenue until after a business combination.
- Profit: Net income was $4.66 million for the third quarter and $1.06 million for the nine months ended September 30, 2021. The quarter’s result primarily reflected a $5.23 million noncash gain from the change in fair value of warrant liabilities; nine-month results included a $2.75 million gain, $1.20 million of general and administrative expense, and $0.50 million of offering costs related to warrant liabilities.
- Cash flow: Cash used in operating activities was $0.65 million for the nine-month period. Cash at September 30 was $0.93 million. The filing reports $345.0 million deposited in the Trust Account.
- Liquidity: Working capital was approximately $0.3 million. Management said sponsor funds were available to cover working-capital needs, but also concluded the cash-flow deficit raised substantial doubt about the company’s ability to continue as a going concern within one year after issuance.
- Debt and liabilities: Total liabilities were $23.53 million, including $12.08 million of deferred underwriting commissions and $10.46 million of derivative warrant liabilities. The $275,000 sponsor note was repaid in March; no working-capital loans were outstanding at quarter-end.
- Equity and redeemable shares: All 34.5 million Class A shares, with a recorded redemption amount of $345.0 million, were classified as temporary equity. Shareholders’ equity was negative $22.25 million.
Changes, outlook, and risks
- The filing restated previously issued financial statements to classify all redeemable Class A shares as temporary equity and record accretion to their redemption value. It also revised prior-period earnings-per-share allocations between Class A and Class B shares.
- Disclosure controls were deemed ineffective due to a material weakness in accounting for complex financial instruments. The weakness led to the restatement; management described additional analysis and remediation work.
- The announced Rigetti transaction contemplated aggregate equity consideration of $1.041 billion, subject to the merger agreement’s terms, and a $102.51 million PIPE commitment. Closing conditions included shareholder approvals, regulatory clearances, listing approval, at least $5 million of net tangible assets, and at least $165 million of available cash at closing for Rigetti’s obligation to close. Completion was not assured.
- If no business combination were completed by March 4, 2023, Supernova would be required to redeem public shares and liquidate; warrants could expire worthless. Management also noted uncertainty from COVID-19, whose specific impact was not determinable.
- No operating guidance was provided. The reported profit was substantially affected by warrant fair-value movements and should not be read as operating performance.
Important facts for investors to verify
- Confirm the filing entity and period: this is Supernova’s 2021 Q3 10-Q, not Rigetti’s standalone financial statements.
- Review the restatement disclosures and the material weakness in internal controls, including subsequent remediation updates.
- Check later filings for the merger’s completion, shareholder redemptions, PIPE funding, and actual cash available at closing.
- Distinguish noncash warrant remeasurement gains from cash generation and operating results.
- Assess the going-concern disclosure and the company’s reliance on sponsor funding while pursuing a transaction.