This Management's Discussion and Analysis of Financial Condition and Results of
Operations section should be read in conjunction with the unaudited condensed
consolidated financial statements and notes thereto included elsewhere in this
Quarterly Report on Form 10-Q/A. 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," 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 we describe
under "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q/A 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.
For the purposes of this discussion, “Rigetti”, “the company”, “we”, “us” or “our” means
Restatement of previously published financial statements
As discussed in the Explanatory Note to this Quarterly Report on Form 10-Q/A and Note 1- Description of Business-Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q/A, certain items within this Part 1, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" have been updated to reflect the restatement of the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q/A. Except as described above, this Management's Discussion and Analysis of Financial Condition and Results of Operations does not substantively amend, update or change any other items or disclosures contained in the Original Form 10-Q filed with theSEC onMay 16, 2022 , and accordingly, this Management's Discussion and Analysis of Financial Condition and Results of Operations does not reflect or purport to reflect any information or events occurring afterMay 16, 2022 , the original filing date of the Original Form 10-Q, or modify or update those disclosures affected by subsequent events, except to reflect such restatement and its effects. Accordingly, the Company has not updated forward-looking statements or information to reflect events occurring after the filing of the Original Form 10-Q. Refer to Note 1 - Description of Business - Restatement of Condensed Consolidated Financial Statements and Immaterial Correction of Prior-Period Errors to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q/A for a description of the restatement.
Insight
OnMarch 2, 2022 (the "Closing Date"), we consummated the transactions contemplated by that certain Agreement and Plan of Merger dated as ofOctober 6, 2021 , as amended onDecember 23, 2021 andJanuary 10, 2022 (as amended, the "Merger Agreement"), by and amongSupernova Partners Acquisition Company II, Ltd. , aCayman Islands exempted company ("Supernova"),Supernova Merger Sub, Inc. , aDelaware corporation and a direct wholly owned subsidiary of Supernova (the "First Merger Sub"),Supernova Romeo Merger Sub, LLC , aDelaware limited liability company and a direct wholly owned subsidiary of Supernova (the "Second Merger Sub"), andRigetti Holdings, Inc. , aDelaware corporation ("Legacy Rigetti"). As contemplated by the Merger Agreement, onMarch 1, 2022 Supernova was domesticated as aDelaware corporation and changed its name to "Rigetti Computing, Inc. " (the "Domestication"). On the Closing Date, (i) First Merger Sub merged with and into Legacy Rigetti, the separate corporate existence of First Merger Sub ceased and Legacy Rigetti survived as a wholly owned subsidiary ofRigetti Computing, Inc. (the "Surviving Corporation" and, such merger, the "First Merger"), and (ii) immediately following the First Merger, theSurviving Corporation merged with and into the Second Merger Sub, the separate corporate existence of theSurviving Corporation ceased and Second Merger Sub survived as a wholly owned subsidiary ofRigetti Computing, Inc. and changed its name to "Rigetti Intermediate LLC " (such merger transaction, the "Second Merger" and, together with the First Merger, the "Merger", and, collectively with the Domestication, the "PIPE Financing" (as defined below) and the other transactions contemplated by the Merger Agreement, the "Business Combination"). The closing of the Business Combination is herein referred to as "the Closing." We build quantum computers and the superconducting quantum processors that power them. We believe our quantum computing represents one of the most transformative emerging capabilities in the world today. By leveraging quantum mechanics, we believe our quantum computers process information in fundamentally new, more powerful ways than classical computers. When scaled, it is anticipated that these systems will be poised to solve problems of staggering computational complexity at unprecedented speed. With the goal of unlocking this opportunity, we have developed the world's first multi-chip quantum processor for scalable quantum computing systems. We believe that this patented and patent pending, modular chip architecture is the building block for new generations of quantum processors that we expect to achieve a clear advantage over classical computers. 32
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Our long-term business model centers on revenue generated from quantum computing
systems made accessible via the cloud in the form of Quantum Computing as a
Service ("QCaaS") products. However, the substantial majority of our revenues is
derived from development contracts, and we anticipate this to persist over at
least the next several years as we work to ramp up our QCaaS business.
Additionally, we are working to further develop a revenue stream and forging
important customer relationships by entering into technology development
contracts with various partners.
We are a vertically integrated company. We own and operate Fab-1, a dedicated
and integrated laboratory and manufacturing facility, through which we own the
means of producing our breakthrough multi-chip quantum processor technology. We
leverage its chips through a full-stack product development approach, from
quantum chip design and manufacturing through cloud delivery. We believe this
full-stack development approach offers both the fastest and lowest risk path to
building commercially valuable quantum computers.
We have been generating revenue since 2018 through partnerships with government
agencies and commercial organizations; however, we have not yet generated
profits and have incurred significant operating losses since inception. Our net
losses were $17.6 million and $7.8 million for the three months ended March 31,
2022 , and 2021, respectively. As we expect to continue to invest in research and
development infrastructure, we expect to continue to incur additional losses for
the foreseeable future in line with its long-term business strategy. As of March
31, 2022 , we had an accumulated deficit of $224.8 million .
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Business Combination and PIPE Financing
OnOctober 6, 2021 , SNII entered into the Merger Agreement by and among Supernova, First Merger Sub, Second Merger Sub, and Legacy Rigetti. OnMarch 2, 2022 , the Business Combination was consummated. While the legal acquirer in the Merger Agreement was Supernova, for financial accounting and reporting purposes underUnited States generally accepted accounting principles ("U.S. GAAP"), Rigetti was the accounting acquirer and the Merger was accounted for as a "reverse recapitalization." A reverse recapitalization does not result in a new basis of accounting, and financial statements of Rigetti represent the continuation of the financial statements of Legacy Rigetti in many respects. Under this method of accounting, Supernova was treated as the "acquired" company for financial reporting purposes. For accounting purposes, Rigetti was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of Rigetti (i.e., a capital transaction involving the issuance of stock by Supernova for the stock of Rigetti). As a result of the Business Combination, each share of Legacy Rigetti common stock (including Legacy Rigetti common stock resulting from the Legacy Rigetti preferred stock conversion) was converted into the right to receive an aggregate of 78,959,579 shares of our common stock, par value$0.0001 per share ("Common Stock"). Additionally, each issued and outstanding shares of Supernova Class A and Class B common stock held by Supernova automatically converted to 20,209,462 shares of Common Stock (of which 3,059,273 shares are subject to vesting under certain conditions). Upon consummation of the Business Combination, the most significant change in our reported financial position and results of operations was an increase in cash of$208.9 million (as compared to Rigetti's balance sheet atDecember 31, 2021 ), including$225.6 million of proceeds from the Business Combination and PIPE Financing net against SNII transaction costs of$38.1 million . Additional direct and incremental transaction costs were also incurred by Rigetti in connection with the Business Combination. Generally, costs (e.g., SPAC shares) are recorded as a reduction to additional paid-in capital. Costs allocated to liability-classified instruments that are subsequently measured at fair value through earnings (e.g., certain SPAC warrants) are expensed. Rigetti's transaction costs totaled$20.65 million , of which$19.75 million was allocated to equity-classified instruments and recorded as a reduction to additional paid-in capital, and the remaining$0.9 million was allocated to liability-classified instruments that are subsequently measured at fair value through earnings and recognized as expense in the condensed consolidated statements of operations during the three months endedMarch 31, 2022 . As a result of the Business Combination, we became subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, and listing standards of the Nasdaq Capital Market, which will necessitate us to hire additional personnel and implement procedures and processes to address such public company requirements. We expect to incur additional ongoing expenses as a public company for, among other things, directors' and officers' liability insurance, director fees, and additional internal and external accounting, legal and administrative resources.
Our future consolidated results of operations and financial condition may not be comparable to historical results following the business combination.
COVID-19 Update
The COVID-19 pandemic continues to evolve rapidly and we intend to continue to monitor it closely.
The evolution of the virus is unpredictable and any resurgence may slow down our ability to develop our quantum computing products and related services. The COVID-19 pandemic could limit the ability of suppliers and business partners to perform, including third-party suppliers' ability to provide components, services and materials. We may also experience an increase in the cost of raw materials. The full impact of the COVID-19 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. Impacts of the COVID-19 pandemic, some of which we have already experienced, include those described throughout the "Risk Factors" included in this Quarterly Report on Form 10-Q/A, including the risk factor titled "A pandemic, epidemic or outbreak of an infectious disease inthe United States or worldwide could adversely affect our business." 34
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Change of exercise
InOctober 2021 , our board of directors approved a change to our fiscal year-end fromJanuary 31 to December 31 , effectiveDecember 31, 2021 . We believe the year-end change is important and useful to our financial statement users to allow for increased comparability with our industry peers. As a result of this change, our fiscal year now begins onJanuary 1 and ends onDecember 31 of each year, starting onJanuary 1, 2022 . Year-over-year quarterly financial data has been and will continue to be recast to be comparative with the new fiscal quarter ends in the new fiscal year.
Key elements of operating results
Revenue
We generate revenue through our development contracts, as well as from our QCaaS offerings and other services including training and provision of quantum computing components. Development contracts are generally multi-year, non-recurring arrangements pursuant to which we provide professional services regarding collaborative research in practical applications of quantum computing to technology and business problems within the customer's industry or organization and assists the customer in developing quantum algorithms and applications to assist customers in areas of business interest. QCaaS revenue is recognized on a ratable basis over the contract term or on a usage basis, which generally ranges from three months to two years. Revenue related to development contracts and other services is recognized as the related milestones are completed or over time, as the work required to complete these milestones is completed. Revenue related to the sale of custom quantum computing components is recognized at a point in time upon acceptance by the customer.
Revenue cost
Cost of revenue consists primarily of all direct and indirect cost associated with providing QCaaS offerings and development contracts and other services, including employee salaries and employee related costs, including compensation, bonuses, employee taxes and benefit costs of program management and personnel associated with the delivery of goods and services to customers. Cost of revenue also includes an allocation of facility costs, depreciation and amortization directly related to providing the QCaaS offerings and development contracts and other services. We expect cost of revenue to increase as we continue to expand on our operations, enhance our service offerings and expand our customer base.
Functionnary costs
Our operating expenses include selling and marketing expenses, general and administrative expenses, and research and development expenses.
Research and development
Research and development costs are expensed as incurred. Research and development expenses include compensation, employee benefits, stock- based compensation, outside consultant fees, allocation of facility costs, depreciation and amortization, materials and components purchased for research and development. We expect research and development expenses to increase as we invest in the enhancement of our product offerings. We do not currently capitalize any research and development expenditures.
Sales and Marketing
Sales and marketing expenses consist primarily of compensation including stock-based compensation, employee benefits of sales and marketing employees, outside consultants' fees, travel and marketing and promotion costs. We expect selling and marketing expenses to increase as we continue to expand on our operations, enhance our service offerings, expand our customer base, and implement new marketing strategies.
General and administrative
General and administrative expenses include compensation, employee benefits,
stock-based compensation, legal, insurance, finance administration and human
resources, an allocation of facility costs (including leases), bad debt costs,
professional service fees, and an allocation of other general overhead costs
including depreciation and amortization to support our operations, which consist
of operations other than associated with providing QCaaS offerings and
development contracts and other services. We expect our general and
administrative expenses to increase as we continue to grow our business. We also
expect to incur additional expenses as a result of operating as a public
company.
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Provision for income taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have recorded a full valuation allowance against our deferred tax assets. Results of Operations
Three months completed
(as rephrased)
The following tables set forth our results of operations for the periods
indicated:
March 31,
2022 2021 $ Change % Change
As restated (1)
( In thousands)
Revenue: $ 2,104 $ 2,360 $ (256 ) -11 %
Cost of revenue 414 273 141 52 %
Total gross profit 1,690 2,087 (397 ) -19 %
Operating expenses:
Research and development 13,927 6,934 6,993 101 %
Sales and marketing 1,475 312 1,163 373 %
General and administrative 11,560 2,521 9,039 359 %
Total operating expenses 26,962 9,767 17,195 176 %
Loss from operations (25,272 ) (7,680 ) (17,592 ) 229 %
Other (expense) income, net:
Interest expense (1,205 ) (77 ) (1,128 ) nm
Change in fair value of warrant
liabilities 3,771 - 3,771 nm
Change in fair value of earn-out
liability 5,991 - 5,991 nm
Transaction cost (927 ) - (927 ) nm
Other expense - (30 ) 30 -100 %
Total other income (expense),
net 7,630 (107 ) 7,737
Net loss before provision for
income taxes (17,642 ) (7,787 ) (9,855 )
Provision for income taxes - - -
Net loss $ (17,642 ) $ (7,787 ) $ (9,855 )
(1) For a discussion of restatement adjustments, see Note 1 – Description of
Activity – Restatement of condensed consolidated financial statements and
Immaterial correction of errors from the previous period
Revenue
Revenue decreased$0.3 million , or 11%, to$2.1 million for the three months endedMarch 31, 2022 , from$2.4 million for the three months endedMarch 31, 2021 . The period over period change is primarily attributable to the completion of the first phase of a large government agency project of$1.3 million in the three months endedMarch 31, 2021 , partially offset by the expansion in scope ofU.S. andU.K. government agency projects of$1.0 million for the three months endedMarch 31, 2022 . These development contracts are fixed price milestone or cost share-based contracts and the timing and amounts of revenue recognized in each quarter will therefore vary based on the delivery of the associated milestones and/ or the work performed. We expect to continue to generate the majority of our revenue from development contracts over at least the next several years and that revenue will be variable in timing and size, as we work to ramp up our QCaaS business for the longer term.
Revenue cost
Cost of revenue increased$0.1 million , or 52%, to$0.4 million for the three months endedMarch 31, 2022 , as compared to$0.3 million for the three months endedMarch 31, 2021 . The increase was mainly attributable to an increase in employee-related costs of$0.1 million in the three months endedMarch 31, 2022 . We expect the costs to increase as we seek to expand headcount and increase subcontract costs related to our collaborative development contract services work with government agencies. In addition, we expect to incur increased costs associated with equipment, system components and labor global economic conditions, including inflation, labor shortages and supply conditions. 36
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Functionnary costs
Research and development costs
Research and development expenses increased by$7.0 million , or 101%, to$13.9 million for the three months endedMarch 31, 2022 , from$6.9 million for the three months endedMarch 31, 2021 . The increase was primarily attributable to:
• a
ended
costs
stock-based compensation expense, and a one-time cumulative recognition of
previously deferred stock compensation expense of
satisfaction of the liquidity condition with respect to the outstanding
stock units recognized as a result of the close of the Business
Combination; and
• a
to continued and expanded investment in research and development efforts.
• A one-time correction during the three months ended March 31, 2022
representing estimated electrical utility fees for a portion of the
electrical usage at our Berkeley facility from February 2019 to
December 31, 2021 , which was an out-of-period adjustment. We have
cumulatively recorded an accrual of $1.5 million for the three months
ended
see note 1 of our unaudited condensed consolidated financial statements
for the three months ended
Quarterly report on Form 10-Q/A. The actual amount of charges we may be
required to pay to our electricity provider and any related costs,
expenses or penalties may be higher or more significant than the
estimates described above.
We expect research and development expenses to increase as we continue to invest
in the enhancement of our product offerings, including with respect to cost of
building QPU fridges, quantum chip fabrication costs and general salaries and
wages. In addition, we expect to incur increased research and development
expenses due to increasing costs of labor, equipment and components as a result
of inflation, labor shortages and supply conditions. As a result of these
factors, combined with lower than anticipated proceeds raised in the Business
Combination, we expect the timelines for the development of our 1,000 and 4,000
qubit systems to increase.
Sales and Marketing Expenses
Sales and marketing expenses increased by $1.2 million , or 373%, to $1.5 million
for the three months ended March 31, 2022 from $0.3 million for the three months
ended March 31, 2021 . The increase was primarily driven by a $1.1 million
increase in employee related costs of $0.7 million due to increase in headcount
and resulting wages and $0.4 million due to a one-time cumulative recognition of
previously deferred stock compensation expense of $1.6 million related to the
vested restricted stock units recognized as a result of the close of the
Business Combination.
We expect sales and marketing expenses to increase as we seek to expand our business, improve our service offerings, expand our customer base and implement new marketing strategies, including with respect to customer acquisition efforts and general marketing campaigns.
General and administrative expenses
General and administrative expenses increased by
• a single cumulative recognition of previously deferred shares
compensation charge of
liquidity condition relating to outstanding shares accounted for in
a result of the close of the Business Combination;
• one-time transaction bonuses awarded to employees in connection with the
closing of the Business Combination and associated taxes of $2.1 million ;
• $1.7 million increase in stock compensation expense;
•
public reporting requirements and other software acquisition costs; •$0.2 million due to executive incentive plan related bonuses; and
•
upgrade the resources to operate as a public company and to build out our
information security team.
This increase was partially offset by the gain on the change in fair value of the forward warrant contract of
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Table of Contents Other Income (Expense), net Interest Expense Interest expense was$1.2 million for the three months endedMarch 31, 2022 , increased from$77 thousand for the three months endedMarch 31, 2021 . The increase in expense was a result of the Loan Agreement we entered into with Trinity Capital Inc. ("Trinity") inMarch 2021 (as amended from time to time, the "Loan Agreement"). The period over period increase was primarily because for the three months endedMarch 31, 2022 , interest expense was calculated based on the overall borrowings under the Loan Agreement of$32.0 million for a three-month interest period, while for the same period in 2021, interest expense was based on borrowings under the Loan Agreement of$12.0 million for a shorter interest period of only 10 days.
Change in fair value of warrant liabilities
A discussion of change in fair value of warranty liabilities is included in Note 10 to our unaudited condensed consolidated financial statements for the three months period endedMarch 31, 2022 , included elsewhere to this Quarterly Report on Form 10-Q/A.
Change in fair value of earn-out liability
A discussion of change in fair value of earn-out liability is included in Note 2, Sponsor Earn-out Liability, to our unaudited condensed consolidated financial statements for the three months period endedMarch 31, 2022 , included elsewhere in this Quarterly Report on Form 10-Q/A.
Transaction costs
Transaction costs arose from the Business Combination allocated to liability-classified instruments that are subsequently measured at fair value through earnings must be expensed as incurred. We incurred a total transaction cost of$0.9 million allocated to liability-classified instruments for the three month period endedMarch 31, 2022 . We did not incur any transaction costs for the comparable three months endedMarch 31, 2021 .
Cash and capital resources
We have incurred net losses since inception, and experienced negative cash flows from operations. Prior to the Business Combination, we financed our operations primarily through the issuance of preferred stock, warrants, convertible notes and revenue. During the three months endedMarch 31, 2022 , we incurred a net loss of$17.6 million . As ofMarch 31, 2022 , we had an accumulated deficit of$224.8 million , and we expect to incur additional losses and higher operating expenses for the foreseeable future in line with our long-term business and investment strategy. In connection with the closing of the Business Combination onMarch 2, 2022 , we received a total of$225.6 million from the Business Combination andPIPE Investment , net against SNII transaction costs. We believe that our existing cash and cash equivalents, including net proceeds from the Business Combination, should be sufficient to meet our anticipated operating cash needs for at least the next 12 months based on our current business plan and expectations and assumptions in light of current macroeconomic conditions. We have based these estimates on assumptions that may prove to be wrong, and 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 titled "Risk Factors" in this Quarterly Report on Form 10-Q/A. Our primary uses of cash are to fund our operations as we continue to grow our business. We will require a significant amount of cash for expenditures as we invest in ongoing research and development and business operations. Until such time as we can generate significant revenue from sales of our development contracts and other services, we expect to finance our cash needs through borrowings under the Loan Agreement and equity or debt financings or other capital sources, including development contract revenue with government agencies and strategic partnerships. 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 common 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 are unable to raise additional funds through equity or debt financings when needed, 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 set forth in the section titled "Risk Factors" included in this Quarterly Report on Form 10-Q/A.
Loan and guarantee agreement
OnMarch 10, 2021 , we entered into the Loan Agreement with Trinity for term loans with a principal amount of$12.0 million , bearing an interest rate of the greater of 7.5% plus the prime rate published by theWall Street Journal or 11.0%. In addition, we are required to pay a final payment fee equal to 2.75% of the aggregate amount of all term loan advances. The term loans under the Loan Agreement are secured by all of our assets. The Loan Agreement contains customary representations, warranties and covenants, but does not include any financial covenants. The negative covenants include restrictions on the ability to incur indebtedness, pay dividends, execute fundamental change transactions, and other specified actions. In connection with entry into the Loan Agreement, we issued a warrant to purchase our shares of common stock to Trinity. The Guarantor of the loan isRigetti Holdings, Inc. and the loan is secured by substantially all of our assets. 38
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OnMay 18, 2021 , we entered into a first amendment to the Loan Agreement, which modified certain financial covenants, including an additional good faith deposit of$20,000 and adding a tranche B to the Loan Agreement in an aggregate amount of$15.0 million , consisting of two advances of$8.0 million and$7.0 million each. In connection with such amendment, the maturity date was modified to be the date equal to 48 months from the first payment date of each specific cash advance. In connection with such amendment, we cancelled the initial warrants and issued a warrant to purchase 995,099 shares of our common stock. OnOctober 21, 2021 , we entered into a second amendment to the Loan Agreement, which modified the date requiring us to deliver evidence of completion of the PIPE transaction and execution of a definitive merger agreement with a special purpose acquisition company toOctober 31, 2021 . Pursuant to the second amendment, the maturity date was modified to be the date equal to 48 months from the first payment date of each specific cash advance. Subject to an interest only period of 18 months following each specific cash advance date, the term loan incurs interest at the greater of a variable interest rate based on prime rate or 11% per annum, payable monthly. Interest-only payments are due monthly immediately following an advance for a period of 18 months and, beginning on the 19th month, principal and interest payments are due monthly. InJanuary 2022 , we entered into the third amendment to the Loan Agreement to increase the debt commitment by$5.0 million to$32.0 million . The amendment allows us to draw an additional$5.0 million immediately with an additional$8.0 million to be drawn at the sole discretion of the lender. We drew the additional$5.0 million upon signing the amendment. Other modifications per the amendment included an extension of the requirement to raise an additional$75 million of equity and a defined exit fee for the additional$5.0 million to be at 20% of the advanced funds under the amendment. In conjunction with the amendment, we also guaranteed payment of all monetary amounts owed and performance of all covenants, obligations and liabilities. As ofMarch 31, 2022 , the total principal amount outstanding under Loan Agreement was approximately$32.0 million . We use borrowings under the Loan Agreement for working capital purposes.
The loan agreement is secured by a first ranking charge on substantially all of our assets. As of the date of this quarterly report on Form 10-Q/A, we are in compliance with all the covenants of the loan agreement.
Our cash commitments as ofMarch 31, 2022 were primarily as follows (in thousands): Total Short-Term Long-Term (in thousands) Financing obligations$ 30,043 $ 2,365 $ 27,678 Operating lease obligations 4,180 1,314 2,866 Total$ 34,223 $ 3,679 $ 30,544 Financing obligations consist of principal and unamortized financing costs related to the Loan and Security Agreement. Operating lease obligations consist of obligations under non-cancelable operating leases for our offices and facilities. The cash requirements in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.
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