8-K: D-Wave Quantum Inc. Announces At-the-Market Equity Offering of Up to $150 Million

D-Wave Quantum Inc. has entered into a sales agreement for an at-the-market equity offering, potentially raising up to $150 million through the sale of its common stock.

Summary

• D-Wave Quantum Inc. has entered into a sales agreement with several agents, including Needham & Company, LLC, Stifel, Nicolaus & Company, Incorporated, and others, to sell shares of its common stock from time to time.
• The company may offer and sell shares of its common stock having an aggregate offering price of up to $150.0 million.
• Sales will be made through or to the agents as sales agent or principal, in an at-the-market equity offering as defined in Rule 415(a)(4) under the Securities Act of 1933.
• The agents will use commercially reasonable efforts to sell the shares based upon the company's instructions.
• The compensation payable to the agents will be up to 3.0% of the gross sales price of the shares sold.
• The company will reimburse the agents for certain expenses and provide indemnification against certain liabilities.
• The company is not obligated to make any sales of shares under the agreement.
• The offering will terminate upon the election of the agents due to adverse events, five days' notice from either party, or by mutual agreement.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The announcement is a standard financial transaction (an at-the-market offering). While it provides the company with potential capital, it also carries the risk of dilution for existing shareholders.

Positives

• The at-the-market offering provides D-Wave with flexibility in raising capital.
• The company is not obligated to sell shares if market conditions are unfavorable.
• The sales agreement includes indemnification for the agents, providing them with protection against certain liabilities.

Negatives

• The offering could dilute existing shareholders' equity.
• The company will incur expenses related to the offering, including agent compensation and legal fees.
• There is no guarantee that the company will be able to sell all $150.0 million of its common stock.

Risks

• Market conditions may not be favorable for selling shares.
• The company's stock price could decline, making it more difficult to raise capital.
• The offering could be terminated early due to adverse events or other factors.
• The company's reliance on agents to sell shares could impact the timing and amount of capital raised.

Future Outlook

The company may sell shares of its common stock from time to time, at its option, through or to the agents, as sales agent or principal, subject to market conditions and the company's capital needs.

Industry Context

At-the-market offerings are a common way for companies to raise capital, providing flexibility and control over the timing and amount of the offering. This type of offering is often used by companies seeking to fund growth initiatives or strengthen their balance sheet.

Comparison to Industry Standards

• Comparable companies such as Rigetti Computing and IonQ have also utilized equity offerings to raise capital.
• The 3.0% commission is within the typical range for at-the-market offerings.
• The $150 million offering size is significant but not uncommon for companies in the quantum computing space seeking to fund ongoing research and development.

Stakeholder Impact

• Shareholders may experience dilution of their ownership if the company sells a significant number of shares.
• The company may use the proceeds from the offering to fund growth initiatives, which could benefit stakeholders in the long term.
• The offering could strengthen the company's balance sheet, providing greater financial stability.

Next Steps

• D-Wave may issue Placement Notices to the Designated Agent to initiate sales of Placement Shares.
• The Designated Agent will use commercially reasonable efforts to sell the Placement Shares according to the terms of the Placement Notice.
• Settlement for sales of Placement Shares will occur on the second Trading Day following the date on which such sales are made.

Key Dates