8-K: D-Wave Quantum Inc. Enters $100 Million At-The-Market Equity Offering Agreement

D-Wave Quantum Inc. has entered into a sales agreement to potentially sell up to $100 million of its common stock through an at-the-market offering.

Summary

• D-Wave Quantum Inc. has signed a sales agreement with Needham & Company, LLC, B. Riley Securities, Inc., and Roth Capital Partners, LLC, allowing the company to sell up to $100 million of its common stock.
• The sales will be conducted through an at-the-market equity offering, which means shares will be sold at prevailing market prices.
• The agents will receive a commission of up to 3.0% of the gross sales price of the shares sold.
• The company is not obligated to sell any shares under this agreement, and the offering can be terminated by either party with a five-day notice or by mutual agreement.
• The shares will be sold under an existing registration statement on Form S-3, which became effective on April 12, 2024.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive. It outlines a standard capital-raising activity, which is generally positive for a company's growth prospects, but also carries the risk of dilution. The lack of specific details on the timing and amount of sales makes it difficult to assess the full impact.

Positives

• The agreement provides D-Wave with a flexible way to raise capital as needed.
• The at-the-market structure allows the company to sell shares at current market prices, potentially maximizing proceeds.
• The company is not obligated to sell shares, giving them control over the timing and amount of capital raised.
• The agreement can be terminated with a five-day notice, providing flexibility for both parties.

Negatives

• The company will incur fees of up to 3.0% of the gross sales price of shares sold, reducing the net proceeds.
• The offering could potentially dilute existing shareholders if a large number of shares are sold.
• The company is not guaranteed to raise the full $100 million, as sales depend on market conditions and demand.

Risks

• The company's stock price could be negatively impacted by the announcement of a potential share offering.
• Market conditions could make it difficult to sell shares at desired prices.
• The company may not be able to raise the full $100 million if demand is low.
• The offering could dilute existing shareholders if a large number of shares are sold.

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, up to an aggregate offering price of $100 million. The timing and amount of sales will depend on market conditions and the company's needs.

Industry Context

At-the-market offerings are a common method for publicly traded companies to raise capital, providing flexibility and potentially minimizing market impact compared to traditional underwritten offerings. This approach is often used by companies in growth phases or those with fluctuating capital needs.

Comparison to Industry Standards

• The 3.0% commission is within the typical range for at-the-market offerings.
• The $100 million offering size is significant but not unusual for a company of D-Wave's size and stage.
• The use of multiple agents (Needham, B. Riley, and Roth) is a common practice to broaden the distribution of shares.
• The at-the-market structure is a standard approach for companies seeking flexible access to capital markets, similar to other tech companies.

Stakeholder Impact

• Shareholders may experience dilution if a large number of shares are sold.
• The company may have more capital to invest in its business.
• The offering could impact the company's stock price.

Next Steps

• D-Wave may begin selling shares of its common stock through the agents.
• The company will need to monitor market conditions and demand for its shares.
• The company will need to file prospectus supplements with the SEC as shares are sold.
• The company will need to comply with all terms and conditions of the sales agreement.

Key Dates

Keywords

at-the-market offering, equity offering, common stock, capital raise, sales agreement, D-Wave Quantum Inc., Needham & Company, B. Riley Securities, Roth Capital Partners