Rigetti Agrees to Issue 7.74 Million Shares to U.S. Commerce Under $100 Million CHIPS Award

Rigetti Computing entered a securities issuance agreement with the U.S. Department of Commerce on September 8 that calls for the quantum-computing company to issue 7,739,938 common shares to the federal government. The shares carry an implied issuance price of $12.92 each, corresponding to the equity component of a CHIPS research award worth up to $100 million.

The September 8 agreement is distinct from the underlying award agreement signed by Rigetti’s wholly owned subsidiary, Rigetti & Co, LLC, on September 4. That earlier agreement established the federal funding commitment for superconducting quantum-computing research. The new securities agreement sets the size and terms of Commerce’s equity position, giving investors a clearer view of how the government’s stake is linked to the award.

The equity structure links Commerce’s stake to the award

Rigetti said in its September 8 Form 8-K that it will issue the 7,739,938 shares under the securities agreement and that the issuance was expected to occur the same day. The common stock has a par value of $0.0001 per share, while the contract uses an implied $12.92 issuance price. The company said the sale relies on the private-placement exemption in Section 4(a)(2) of the Securities Act rather than a registered public offering.

Commerce does not receive unrestricted rights to dispose of the entire stake immediately. Without Rigetti’s prior written consent, the Department may transfer only the portion of the shares corresponding to award funds that have been disbursed and not returned. The agreement also bars privately negotiated sales to a competitor identified under the contract and requires certain private transferees to accept the agreement’s continuing obligations.

Voting rights are constrained as well. While the shares remain owned by a U.S. governmental entity, Commerce generally will not vote them, apart from limited matters involving changes that could adversely affect the rights of the common stock and certain merger or consolidation proposals. Rigetti also agreed to provide resale-registration rights, including commercially reasonable efforts to have a shelf registration statement covering eligible resale shares filed within six months of the September 8 agreement.

The contract contains another mechanism designed to keep the government’s economic exposure aligned with the funding actually provided. If Commerce terminates the award for convenience, Rigetti can, subject to the agreement’s procedures, repurchase for an aggregate $1 the portion of the shares tied to award money that was not received or was returned before being used for eligible project costs.

For scale, Rigetti reported 333,768,747 common shares outstanding as of August 3. The 7.74 million-share issuance is about 2.3% of that reported count before issuance, although the exact ownership percentage at closing depends on the company’s then-current share count. Commerce had already described its planned interest as a minority, non-controlling stake, and Rigetti’s filing separately identifies dilution to existing shareholders as a risk associated with the issuance.

Federal funding arrives in three stages tied to quantum R&D

The $100 million headline amount is not scheduled to arrive all at once. Under the award agreement, $43.9 million is to be made available on or as soon as practicable after the September 4 award date. Two later tranches, $29.9 million and $26.2 million, depend on Commerce determining that Rigetti has met the applicable project milestones and success criteria by the required dates.

Rigetti is expected to use the money for three defined research areas. The first is compressing quantum readout electronics into an integrated, miniaturized package. The second aims to expand cryogenic capacity by orders of magnitude through a new cryostat architecture. The third focuses on fabrication capabilities for high-connectivity chip architectures. Together, the projects target hardware bottlenecks that become more difficult as superconducting quantum systems grow in qubit count and complexity.

The final award terms give Rigetti a period of performance that ends when the required milestones are completed or on the fifth anniversary of the September 4 award date, unless the agreement ends earlier. Federal payments must be used only for eligible project costs. If Rigetti fails to complete required project activities, subject to applicable cure or forbearance provisions, Commerce can seek recovery of payments already made as a debt payable to the Department.

The agreement also reaches beyond simple project financing. It includes U.S. government rights involving data and intellectual property developed with award funds, domestic control and production requirements, research-security obligations, restrictions involving certain foreign entities and countries, and reporting and certification requirements. Those conditions mean the award should not be treated as unrestricted corporate cash even though its maximum value is material to Rigetti.

Rigetti ended the second quarter with $541.3 million of cash, cash equivalents and available-for-sale investments and said it had no debt. Second-quarter revenue was $5.1 million, while operating loss was $28.1 million and GAAP net loss was $52.6 million. The full $100 million award would equal roughly 18% of the company’s June 30 cash and investment balance, but the comparison is only a measure of scale because the federal money is staged and restricted to eligible R&D costs.

The projects also line up with technical objectives Rigetti has been discussing with investors. In August, the company said its current roadmap targets a path toward systems with approximately 1,000 qubits, approximately 99.9% two-qubit gate fidelity and gate speeds below 50 nanoseconds over roughly a three-year horizon. Those are company targets rather than guaranteed outcomes, and the September filing cautions that future award payments depend on milestone achievement.

Rigetti is part of a wider CHIPS quantum portfolio

Commerce’s equity stake in Rigetti was telegraphed months before the final contracts. In a May 21 announcement published by the National Institute of Standards and Technology, the Department described letters of intent covering $2.013 billion of proposed incentives for nine companies, including two quantum foundries and seven quantum-computing companies. Rigetti was listed for up to $100 million to work on next-generation superconducting quantum technology, including readout electronics and cryostat architectures.

The same announcement said Commerce would receive a minority, non-controlling equity stake in each company receiving the quantum-computing funds as a condition of support. The policy was presented as a way to give taxpayers a financial interest in companies receiving federal incentives while the CHIPS Research and Development Office funds technical work across several quantum-computing approaches.

Rigetti’s September 8 agreement turns that earlier policy outline into specific securities terms for the company. The government stake is sized at 7,739,938 shares, its transfer flexibility is linked to money actually disbursed, and later federal payments remain conditional on technical performance. That structure leaves two separate things for investors to track: the dilution and resale rights attached to the equity issuance, and Rigetti’s ability to satisfy the milestones needed to unlock the remaining $29.9 million and $26.2 million award tranches.