8-K: D-Wave Quantum Inc. Announces At-the-Market Equity Offering of up to $75 Million

D-Wave Quantum Inc. has entered into a sales agreement to potentially sell up to $75 million of its common stock through an at-the-market offering.

Summary

• D-Wave Quantum Inc. has entered into a sales agreement with several agents, including Needham & Company, Roth Capital Partners, B. Riley Securities, and Craig-Hallum Capital Group.
• The agreement allows D-Wave to sell shares of its common stock from time to time, at its discretion.
• The total offering price of the shares is capped at $75 million.
• The sales will be conducted through an at-the-market equity offering, which may include direct sales on the New York Stock Exchange.
• The agents will use commercially reasonable efforts to sell the shares based on D-Wave's instructions.
• The agents will receive compensation of up to 3.0% of the gross sales price of the shares sold.
• D-Wave will also reimburse the agents for certain expenses and provide indemnification against certain liabilities.
• The company is not obligated to sell any shares under this agreement.
• The offering can be terminated by either party with five business days' notice or by mutual agreement.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive. It outlines a standard financial transaction that provides the company with flexibility to raise capital, but also introduces potential dilution for existing shareholders. The sentiment is not overly positive or negative, reflecting a typical corporate finance activity.

Positives

• The at-the-market offering provides D-Wave with a flexible way to raise capital.
• The company has the option to sell shares when market conditions are favorable.
• The agreement allows for sales directly on the New York Stock Exchange, potentially reaching a wide range of investors.
• The company retains control over the timing and amount of shares sold.

Negatives

• The offering could dilute existing shareholders' ownership.
• The company will incur expenses related to the offering, including agent fees and reimbursements.
• There is no guarantee that the company will be able to sell all $75 million of shares.
• The company is subject to market risk and may not be able to sell shares at desired prices.

Risks

• The company's stock price could be negatively impacted by the increased supply of shares.
• The company may not be able to raise the full $75 million if market conditions are unfavorable.
• The company is subject to the risk of adverse events that could lead to the termination of the offering.
• The company is subject to the risk of not being able to sell shares at the minimum price authorized by the board of directors.

Future Outlook

The company may sell shares of its common stock from time to time, at its option, through the agents. The offering will terminate upon certain adverse events, five business days' notice from either party, or by mutual agreement.

Management Comments

• The company is not obligated to make any sales of shares of common stock under the Sales Agreement.

Industry Context

At-the-market offerings are a common method for companies to raise capital, providing flexibility and control over the timing and amount of shares sold. This approach is often used by companies seeking to take advantage of favorable market conditions.

Comparison to Industry Standards

• The use of an at-the-market offering is a standard practice for companies looking to raise capital without a traditional underwritten offering.
• The 3.0% commission is within the typical range for such offerings.
• The $75 million offering size is significant but not unusual for a company of D-Wave's size and stage of development.
• The involvement of multiple agents is also a common practice to ensure broad market access.

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 its operations and growth.
• The offering may increase the company's visibility and liquidity in the market.
• The agents will earn fees from the sales of shares.

Next Steps

• The company may begin selling shares of its common stock through the agents.
• The agents will use commercially reasonable efforts to sell the shares based on the company's instructions.
• The company will monitor market conditions and determine the timing and amount of shares to sell.
• The company will file a prospectus supplement with the SEC to disclose the details of any sales.

Key Dates

Keywords

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