Filed Pursuant to Rule 424(b)(3)
Registration No. 333-267126
PROSPECTUS SUPPLEMENT NO. 2
(to Prospectus dated October 26, 2022)
D-WAVE QUANTUM INC.
COMMON SHARES
This prospectus supplement updates, amends and supplements the prospectus contained in our Registration Statement on Form S-1, effective as of October 26, 2022 (as supplemented or amended from time to time, the “Prospectus”) (Registration No. 333-267126).
This prospectus supplement is being filed to update, amend and supplement the information included in the Prospectus with the information contained in our Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on November 10, 2022 (the “Form 8-K”). Accordingly, we have attached the Form 8-K to this prospectus supplement.
This prospectus supplement is not complete without the Prospectus. This prospectus supplement should be read in conjunction with the Prospectus, which is to be delivered with this prospectus supplement, and is qualified by reference thereto, except to the extent that the information in this prospectus supplement updates or supersedes the information contained in the Prospectus. Please keep this prospectus supplement with your Prospectus for future reference.
Our shares of common stock, par value $0.0001 (“Common Shares”), are listed on the New York Stock Exchange (the “NYSE”) under the symbol “QBTS”. On November 9, 2022, the last reported sales price for the Common Shares on the NYSE was $2.53.
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 21 of the Prospectus for a discussion of applicable information that should be considered in connection with an investment in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is November 10, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 10, 2022
D-Wave Quantum Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41468 | 84-1068854 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 3033 Beta Avenue Burnaby, British Columbia Canada |
V5G 4M9 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (604) 630-1428
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange | ||
| Common stock, par value $0.0001 per share | QBTS | New York Stock Exchange | ||
| Warrants, each whole warrant exercisable for 1.4541326 shares of common stock at an exercise price of $11.50 | QBTS.WT | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 10, 2022, D-Wave Quantum Inc. issued a press release announcing its financial results for its third quarter ended September 30, 2022. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information contained in this Current Report on Form 8-K and in the accompanying exhibit are “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number |
Description | |
| 99.1 | Press Release dated November 10, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| D-Wave Quantum Inc. | ||||||
| Date: November 10, 2022 | By: | /s/ Alan Baratz | ||||
| Alan Baratz | ||||||
| President & Chief Executive Officer | ||||||
Exhibit 99.1
D-Wave Reports Third Quarter Results
Q3 Revenue up 30% Year-Over-Year
Number of commercial customers increased by 34% to 63 during the first nine months of fiscal 2022
BURNABY, B.C. & PALO ALTO, Calif. – November 10, 2022 – D-Wave Quantum Inc., (NYSE: QBTS) (“D-Wave” or the “Company”) a leader in quantum computing systems, software, and service, and the only provider building both annealing and gate-model quantum computers, today announced financial results for its third quarter ended September 30, 2022.
“Our third quarter results reflect continued progress in our mission to help customers realize real value by using quantum computing for practical business applications, today. The era of commercialized quantum computing is here, and that is evident in the momentum we’re seeing in terms of our expanded customer footprint, accelerated application development, and revenue growth. With a 34% increase in the number of commercial customers year-to-date and a 30% increase in year-over-year quarterly revenue, it’s clear that customers are seeing the impact of our quantum-hybrid solutions in unlocking competitive advantage and fueling growth,” said Alan Baratz, CEO of D-Wave. “In addition, we remain laser focused on relentless product development and delivery. We’re advancing quantum innovation through continued progress on our gate model development efforts, launching solutions that solve important client needs like support for weighted constraints, and furthering the science as shown by our coherent annealing research results, which bring us one step closer to demonstrating practical quantum advantage.”
Recent Commercial / Business Highlights
| • | Signed a number of new and expanded customer engagements with Forbes Global 2000 companies, as well as industry leaders such as ArcelorMittal, BASF, and Deloitte |
| • | Continued expansion of our commercial customer base with 63 commercial customers in the first nine months of the year, a 34% year-over-year increase |
| • | Worked with customers on a variety of new and expanded quantum hybrid applications; including 3D bin packing, customer offer allocation, employee scheduling, feature selection for machine learning, job shop scheduling, and manufacturing optimization |
| • | Created a new, streamlined pricing structure for our QCaaS offering, shifting from a consumption, time-based approach to a seat-based and application-based collection of offerings designed to better meet the needs of customers and deliver business value |
| • | Launched D-Wave in AWS Marketplace, introducing access to the Leap quantum cloud service and three professional service quantum computing offerings to AWS customers |
Recent Technical Highlights
| • | Continued progress on our gate model development work, reaching several milestones this quarter, including the fabrication of our first gate model qubits in the multilayer stack, the start of benchmarking for one- and two-qubit gates with these devices, and demonstration of a scalable approach to readout for our gate model architecture |
| • | Published research results in Nature Physics that demonstrated large-scale coherence in annealing quantum computers, representing an important step toward practical quantum advantage and providing definitive evidence that D-Wave’s systems perform coherent quantum annealing, which cannot be classically simulated |
| • | Launched an update to the CQM hybrid solver, enabling businesses to run quadratic optimization problems with weighted constraints and benefit from presolve techniques that streamline and simplify problem formulation |
Financial Results for the Third Quarter ended September 30, 2022
| • | Revenue for the third quarter of fiscal 2022 was $1.7 million, an increase of $388,000, or 30%, from $1.3 million in the third quarter of fiscal 2021 and an increase of $324,000, or 24%, from the immediately prior fiscal 2022 second quarter revenue of $1.4 million |
| • | Gross profit for the third quarter of fiscal 2022 was $1.1 million, an increase of $86,000, or 9%, from $1.0 million in the third quarter of fiscal 2021 and an increase of $301,000, or 38%, from the immediately prior fiscal 2022 second quarter gross profit of $785,000 |
| • | Gross margin for the third quarter was 64.1%, a decrease of 12.4% from 76.5% in the third quarter of fiscal 2021 and an increase of 6.8% from the immediately prior fiscal 2022 second quarter gross margin of 57.3% |
| • | Operating expenses for the third quarter of fiscal 2022 were $16.4 million, an increase of $5.6 million, or 52%, from $10.8 million in the third quarter of fiscal 2021 |
| • | Adjusted operating expenses1 for the third quarter of fiscal 2022 were $13.6 million, an increase of $3.4 million or 33%, from $10.2 million in the third quarter of fiscal 2021 |
| • | Net loss for the third quarter of fiscal 2022 was $13.1 million, or $0.11 per share, compared with $4.2 million, or $0.03 per share, in the third quarter of fiscal 2021 |
| • | Adjusted EBITDA2 for the third quarter of fiscal 2022 was negative $12.4 million, a $3.3 million or 36% increase, from negative $9.2 million in the third quarter of fiscal 2021 |
We are providing adjusted operating expenses and Adjusted EBITDA as we believe these metrics improve investors’ ability to evaluate our underlying performance. Non-GAAP measures do not have any standardized meaning under GAAP, and therefore may not be comparable to similar measures employed by other companies.
| 1 | Adjusted operating expenses is a non-GAAP financial measure. For a description of adjusted operating expenses and a reconciliation to operating expenses, the closest comparable GAAP financial measure, refer to “Non-GAAP Financial Measures” below and the reconciliation table at the end of this release. |
| 2 | Adjusted EBITDA is a non-GAAP financial measure. For a description of Adjusted EBITDA and a reconciliation to net loss, the closest comparable GAAP financial measure, refer to “Non-GAAP Financial Measures” below and the reconciliation table at the end of this release |
Financial Results for the Nine Months of Fiscal Year 2022
| • | Revenue for the nine months ended September 30, 2022, was $4.8 million, an increase of $925,000, or 24%, from $3.9 million in the nine months ended September 30, 2021 |
| • | During the nine months ended September 30, 2022, D-Wave had 63 commercial customers, an increase of 16, or 34%, from 47 commercial customers in the nine months ended September 30, 2021 |
| • | During the nine months ended September 30, 2022, D-Wave had 105 total customers, an increase of 24, or 30%, from 81 total customers in the nine months ended September 30, 2021 |
| • | Gross profit for the nine months ended September 30, 2022, was $3 million, a small increase from $2,980,000 in the nine months ended September 30, 2021 |
| • | Operating expenses for the nine months ended September 30, 2022 were $40.9 million, an increase of $9.8 million, or 32%, from $31.1 million in the nine months ended September 30, 2021 |
| • | Adjusted operating expenses for the nine months ended September 30, 2022 were $35.8 million, an increase of $6.4 million, or 22%, from $29.4 million in the nine months ended September 30, 2021 |
| • | Net loss for the nine months ended September 30, 2022, was $ 37.9 million, or $0.31 per share, compared with $17.7 million, or $0.14 per share, in the nine months ended September 30, 2021 |
| • | Adjusted EBITDA for the nine months ended September 30, 2022 was negative $32.7 million, an increase of $6.3 million, or 24%, from negative $26.4 million for the nine months ended September 30, 2021 |
Committed Equity Facility
As previously disclosed, on June 16, 2022, D-Wave entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Under the agreement, the Company has the right, but not the obligation, to issue and sell up to $150 million of shares of its common stock to Lincoln Park, subject to certain limitations and satisfaction of certain conditions, over a 3-year period. Further details have been provided in the Company’s related Form S-1 Registration Statement and in the Company’s Form 10-Q for the quarter ended September 30, 2022, each filed with the Securities and Exchange Commission.
Fiscal Year 2022 Outlook
Based on information available as of November 10, 2022, D-Wave is maintaining its fiscal 2022 Revenue and Adjusted EBITDA guidance as follows:
| • | Revenue is expected to be in the range of $7.0 million to $9.0 million |
| • | Adjusted EBITDA is expected to be less than negative $49 million1 |
| 1. | We are not able to reconcile guidance for Adjusted EBITDA to its most directly comparable GAAP measure, net loss, and cannot provide an estimated range of net loss for such period without unreasonable efforts because certain items that impact net loss, including foreign exchange and stock-based compensation, are not within our control or cannot be reasonably predicted. |
Third Quarter 2022 Conference Call
In conjunction with this announcement, D-Wave will host a conference call on Thursday, November 10, 2022, at 8:00 a.m. (Eastern Time), to discuss such financial results and its business outlook. The live dial-in number is 1-877-300-8521 (domestic) or 1-412-317-6026 (international), conference ID code 10171956. A live webcast and subsequent replay of the call will also be available on the “Investors” page of the Company’s website at: http://ir.dwavesys.com/.
About D-Wave Quantum Inc.
D-Wave is a leader in the development and delivery of quantum computing systems, software, and services, and is the world’s first commercial supplier of quantum computers—and the only company building both annealing quantum computers and gate-model quantum computers. Our mission is to unlock the power of quantum computing today to benefit business and society. We do this by delivering customer value with practical quantum applications for problems as diverse as logistics, artificial intelligence, materials sciences, drug discovery, scheduling, cybersecurity, fault detection, and financial modeling. D-Wave’s technology is being used by some of the world’s most advanced organizations, including NEC Corporation, Volkswagen, DENSO, Lockheed Martin, Forschungszentrum Jülich, University of Southern California, and Los Alamos National Laboratory.
Non-GAAP Financial Measures
To supplement the financial information presented in accordance with GAAP, we use non-GAAP measures of certain components of financial performance. Each of Adjusted EBITDA and adjusted operating expenses is a financial measure that is not required by or presented in accordance with GAAP. Management believes that this measure provides investors an additional meaningful method to evaluate certain aspects of such results period over period. Adjusted EBITDA is defined as net loss before interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation, remeasurements of liability-classified warrants, and other nonrecurring nonoperating income and expenses. We use Adjusted EBITDA to measure the operating performance of our business, excluding specifically identified items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations. Adjusted operating expenses is defined as operating expenses before depreciation and amortization expense and stock-based compensation expense. We use adjusted operating expenses to measure our operating expenses, excluding items we do not believe directly reflect our core operations. The presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the financial results prepared in accordance with GAAP, and our presentation of non-GAAP measures may be different from non-GAAP measures used by other companies. For a reconciliation of each of Adjusted EBITDA and adjusted operating expenses to its most directly comparable GAAP measure, please refer to the reconciliations below.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. We caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, which are subject to a number of risks. Forward-looking statements in this press release include, but are not limited to, statements regarding the company’s future growth and innovations; the increased adoption of quantum computing solutions and expansion of related market opportunities and use cases and our customer base; and our expectations relating to revenue and Adjusted EBITDA for fiscal 2022. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward-looking statements are subject to a number of risks and uncertainties, including, among others, various factors beyond management’s control, including general economic conditions and other risks, our ability to expand our customer base and the customer adoption of our solutions, and the uncertainties and factors set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the registration statement on Form S-1 (SEC File No. 333-267124), initially filed by the Company with the SEC on August 29, 2022 and which was declared effective by the SEC on October 26, 2022, as well as factors associated with companies, such as D-Wave, that are engaged in the business of quantum computing, including anticipated trends, growth rates, and challenges in those businesses and in the markets in which they operate; the outcome of any legal proceedings that may be instituted against us; risks related to the performance of our business and the timing of expected business or financial milestones; unanticipated technological or project development challenges, including with respect to the cost and or timing thereof; the performance of the our products; the effects of competition on our business; the risk that we will need to raise additional capital to execute our business plan, which may not be available on acceptable terms or at all; the risk that we may never achieve or sustain profitability; the risk that we are unable to secure or protect our intellectual property; volatility in the price of our securities; and the risk that our securities will not maintain the listing on the NYSE. Furthermore, if the forward-looking statements contained in this press release prove to be inaccurate, the inaccuracy may be material. In addition, you are cautioned that past performance may not be indicative of future results. In light of the significant uncertainties in these forward-looking statements, you should not place undue reliance on these statements in making an investment decision or regard these statements as a representation or warranty by any person we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.
D-Wave Quantum Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, | December 31, | |||||||
| (In thousands of U.S. dollars, except share and per share data) |
2022 | 2021 | ||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash |
$ | 13,764 | $ | 9,483 | ||||
| Trade accounts receivable, net |
740 | 421 | ||||||
| Receivable research incentives |
1,052 | 4,774 | ||||||
| Inventories |
2,533 | 2,114 | ||||||
| Prepaid expenses and other current assets |
8,190 | 1,116 | ||||||
| Deferred offering costs |
— | 1,250 | ||||||
|
|
|
|
|
|||||
| Total current assets |
$ | 26,279 | $ | 19,158 | ||||
| Property and equipment, net |
2,537 | 3,249 | ||||||
| Operating lease right-of-use assets |
8,066 | 8,578 | ||||||
| Intangible assets, net |
262 | 272 | ||||||
| Other noncurrent assets |
1,345 | 1,353 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 38,489 | $ | 32,610 | ||||
|
|
|
|
|
|||||
| Liabilities and stockholders’ (deficit) equity |
||||||||
| Current liabilities: |
||||||||
| Trade accounts payable |
3,158 | 2,109 | ||||||
| Accrued expenses and other current liabilities |
5,318 | 3,614 | ||||||
| Current portion of operating lease liabilities |
1,461 | 1,687 | ||||||
| Loans payable, current |
2,232 | 220 | ||||||
| Deferred revenue, current |
1,989 | 2,665 | ||||||
| Promissory note - related party |
420 | — | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
14,578 | 10,295 | ||||||
| Warrant liabilities |
5,498 | — | ||||||
| Operating lease liabilities, net of current portion |
6,211 | 6,990 | ||||||
| Loans payable, noncurrent |
12,912 | 12,233 | ||||||
| Deferred revenue, noncurrent |
— | 54 | ||||||
| Other noncurrent liabilities |
— | 18 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
$ | 39,199 | $ | 29,590 | ||||
|
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|
|
|
|||||
| Commitments and contingencies (Note 10) |
||||||||
| Stockholders’ (deficit) equity: |
||||||||
| Non-redeemable convertible preferred stock*, no par value; nil shares and 122,564,333 shares authorized as of September 30, 2022 and December 31, 2021, respectively; nil shares and 122,564,333 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. |
— | 189,881 | ||||||
| Common stock*, par value $0.0001 per share; 675,000,000 shares and unlimited shares authorized at September 30, 2022 and December 31, 2021, respectively; 110,377,357 shares and 2,817,498 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. |
11 | — | ||||||
| Additional paid-in capital |
372,840 | 148,850 | ||||||
| Accumulated deficit |
(363,136 | ) | (325,268 | ) | ||||
| Accumulated other comprehensive loss |
(10,425 | ) | (10,443 | ) | ||||
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| Total stockholders’ (deficit) equity |
$ | (710 | ) | $ | 3,020 | |||
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| Total liabilities and stockholders’ equity |
$ | 38,489 | $ | 32,610 | ||||
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| * | Shares of legacy non-redeemable convertible preferred stock and legacy common stock have been retroactively restated to give effect to the Business Combination. |
D-Wave Quantum Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
| For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
| (In thousands, except share and per share data) |
2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenue |
$ | 1,695 | $ | 1,307 | $ | 4,778 | $ | 3,853 | ||||||||
| Cost of revenue |
609 | 307 | 1,778 | 873 | ||||||||||||
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| Total gross profit |
1,086 | 1,000 | 3,000 | 2,980 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
7,334 | 6,313 | 20,933 | 19,268 | ||||||||||||
| General and administrative |
6,921 | 2,801 | 14,527 | 7,831 | ||||||||||||
| Sales and marketing |
2,099 | 1,679 | 5,438 | 3,975 | ||||||||||||
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| Total operating expenses |
16,354 | 10,793 | 40,898 | 31,074 | ||||||||||||
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|
|||||||||
| Loss from operations |
(15,268 | ) | (9,793 | ) | (37,898 | ) | (28,094 | ) | ||||||||
| Other income (expense), net: |
||||||||||||||||
| Interest expense |
(1,336 | ) | (205 | ) | (3,874 | ) | (590 | ) | ||||||||
| Government assistance |
— | 4,560 | — | 9,146 | ||||||||||||
| Gain on investment in marketable securities |
— | 1,164 | — | 1,164 | ||||||||||||
| Change in fair value of warrant liabilities |
2,603 | — | 2,603 | — | ||||||||||||
| Other income, net |
948 | 65 | 1,301 | 669 | ||||||||||||
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| Total other income, net |
2,215 | 5,584 | 30 | 10,389 | ||||||||||||
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|||||||||
| Net loss |
$ | (13,053 | ) | $ | (4,209 | ) | $ | (37,868 | ) | $ | (17,705 | ) | ||||
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| Net loss per share, basic and diluted |
$ | (0.11 | ) | $ | (0.03 | ) | $ | (0.31 | ) | $ | (0.14 | ) | ||||
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|
|||||||||
| Weighted-average shares * used in computing net loss per share, basic and diluted |
116,256,805 | 125,362,390 | 122,337,727 | 125,331,065 | ||||||||||||
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| Comprehensive loss: |
||||||||||||||||
| Net loss |
$ | (13,053 | ) | $ | (4,209 | ) | $ | (37,868 | ) | $ | (17,705 | ) | ||||
| Foreign currency translation adjustment, net of tax |
56 | 29 | 18 | 40 | ||||||||||||
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|||||||||
| Net comprehensive loss |
$ | (12,997 | ) | $ | (4,180 | ) | $ | (37,850 | ) | $ | (17,665 | ) | ||||
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| * | Weighted-average shares have been retroactively restated to give effect to the Business Combination |
D-Wave Quantum Inc.
Condensed consolidated statements of cash flows
(Unaudited)
| Nine months ended September 30, | ||||||||
| (in thousands) |
2022 | 2021 | ||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (37,868 | ) | $ | (17,705 | ) | ||
| Adjustments to reconcile net loss to cash used in by operating activities: |
||||||||
| Depreciation and amortization |
1,038 | 1,135 | ||||||
| Allowance for doubtful accounts |
1 | — | ||||||
| Stock-based compensation |
3,695 | 555 | ||||||
| Amortization of operating right of use assets |
590 | 764 | ||||||
| Provision for excess and obsolete inventory |
265 | 215 | ||||||
| Non-cash interest expense on government payable |
1,902 | 601 | ||||||
| Venture Loan interest and final payment fee |
1,808 | — | ||||||
| Grant income |
— | (9,135 | ) | |||||
| Change in fair value of public warrant liability |
(1,483 | ) | — | |||||
| Change in fair value of private warrant liability |
(1,120 | ) | — | |||||
| Non-cash lease expense |
— | (756 | ) | |||||
| (Gain) loss on marketable securities |
— | (1,164 | ) | |||||
| Unrealized foreign exchange loss (gain) |
(1,226 | ) | 15 | |||||
| Change in operating assets and liabilities: |
||||||||
| Trade accounts receivable |
(320 | ) | (334 | ) | ||||
| Research incentives receivable |
579 | (10,374 | ) | |||||
| Inventories |
(684 | ) | (29 | ) | ||||
| Deferred offering costs |
1,250 | — | ||||||
| Prepaid expenses and other current assets |
(7,074 | ) | (929 | ) | ||||
| Trade accounts payable |
1,049 | (1,081 | ) | |||||
| Right of use assets |
(97 | ) | — | |||||
| Accrued expenses and other current liabilities |
1,704 | (313 | ) | |||||
| Deferred revenue, current |
(730 | ) | (148 | ) | ||||
| Loan program payable |
— | 11,068 | ||||||
| Current portion of long-term debt |
2,893 | — | ||||||
| Operating lease liability |
(442 | ) | — | |||||
|
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|
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|
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| Net cash used in operating activities |
$ | (34,270 | ) | $ | (27,615 | ) | ||
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|
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| Cash flows from investing activities: |
||||||||
| Purchase of property and equipment |
(249 | ) | (1,493 | ) | ||||
| Purchase of software |
(67 | ) | (214 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
$ | (316 | ) | $ | (1,707 | ) | ||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Proceeds from issuance of common stock from the PIPE investment |
40,000 | — | ||||||
| Business Combination, net of redemption and transaction costs |
4,100 | — | ||||||
| Transaction costs paid directly by D-Wave Systems |
(6,528 | ) | — | |||||
| Proceeds from exercise of public warrants |
910 | — | ||||||
| Proceeds from promissory note - related party |
420 | — | ||||||
| Proceeds from government assistance |
3,124 | 16,346 | ||||||
| Proceeds from issuance of common stock upon exercise of stock options |
72 | 66 | ||||||
| Proceeds from debt financing |
19,870 | — | ||||||
| Payment for Directors and Officers Insurance |
(864 | ) | — | |||||
| Debt payments |
(20,000 | ) | (23 | ) | ||||
| Venture Loan interest and final payment fee |
(1,808 | ) | — | |||||
| Government loan payment |
(398 | ) | (399 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by financing activities |
$ | 38,898 | $ | 15,990 | ||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash and cash equivalents |
(31 | ) | 42 | |||||
| Net (decrease) increase in cash and cash equivalents |
4,281 | (13,290 | ) | |||||
|
|
|
|
|
|||||
| Cash and cash equivalents at beginning of period |
$ | 9,483 | $ | 21,335 | ||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 13,764 | $ | 8,045 | ||||
|
|
|
|
|
|||||
| Supplemental disclosure of noncash investing and financial activities: |
||||||||
| Initial warrant liabilities recognized in connection with closing of Business Combination |
$ | 8,101 | $ | — | ||||
|
|
|
|
|
|||||
| Non-cash Business Combination financing |
$ | (11,400 | ) | $ | — | |||
|
|
|
|
|
|||||
| Issuance of shares for payment of ELOC commitment fee |
$ | 3,271 | $ | — | ||||
|
|
|
|
|
|||||
| Conversion of convertible preferred stock to common stock |
$ | 189,871 | $ | — | ||||
|
|
|
|
|
D-Wave Quantum Inc.
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
For the Three and Nine Months Ended September 30, 2022 and 2021
(In thousands)
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Operating expenses |
$ | 16,354 | $ | 10,793 | $ | 40,898 | $ | 31,074 | ||||||||
| Excluding: |
||||||||||||||||
| Depreciation and Amortization (1) |
(298 | ) | (392 | ) | (923 | ) | (1,127 | ) | ||||||||
| Stock based compensation |
(2,027 | ) | (225 | ) | (3,695 | ) | (555 | ) | ||||||||
| Non-recurring one time expenses (2) |
(456 | ) | — | (456 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP Operating Expenses |
$ | 13,573 | $ | 10,176 | $ | 35,824 | $ | 29,392 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Depreciation and Amortization reflects the Depreciation and Amortization incorporated in the Operating Expenses only, which differs from the Total Depreciation and Amortization set forth in the Condensed consolidated statement of cash flows that also includes Depreciation and Amortization recorded in Cost of Revenue. |
| (2) | Non-recurring one time expenses related to legal, consulting, and accounting fees associated with the August 5, 2022 Business Combination. |
D-Wave Quantum Inc.
Reconciliation of Net Loss to Adjusted EBITDA
For the Three and Nine Months Ended September 30, 2022 and 2021
(In thousands)
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net loss |
$ | (13,053 | ) | $ | (4,209 | ) | $ | (37,868 | ) | $ | (17,705 | ) | ||||
| Excluding: |
||||||||||||||||
| Depreciation and Amortization |
338 | 393 | 1,038 | 1,135 | ||||||||||||
| Stock based compensation |
2,027 | 225 | 3,695 | 555 | ||||||||||||
| Interest expense (1) |
1,336 | 205 | 3,874 | 590 | ||||||||||||
| Government assistance (2) |
— | (4,560 | ) | — | (9,146 | ) | ||||||||||
| Gain on investment in marketable securities |
— | (1,164 | ) | — | (1,164 | ) | ||||||||||
| Other Income (expense), net (3) |
(948 | ) | (65 | ) | (1,301 | ) | (669 | ) | ||||||||
| Change in fair value of warrant liabilities |
(2,603 | ) | — | (2,603 | ) | — | ||||||||||
| Non-recurring one time expenses (4) |
456 | — | 456 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | (12,447 | ) | $ | (9,175 | ) | $ | (32,709 | ) | $ | (26,404 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Interest expense primarily reflects the accrued interest associated with the below market interest rate government loans as if they were interest-bearing at market rates of interest, and the interest and amortization of the final fee associated with the Venture Loan with PSPIB Unitas Investments II Inc. that was entered into on March 3, 2022. |
| (2) | Government Assistance reflects the imputed benefit arising from the difference between the market rate of interest and the rate of interest charged on the government loans. |
| (3) | Other Income (expense), net consists primarily of foreign exchange gains and losses, and , it is included in the above table to facilitate the reconciliation of Adjusted EBITDA to Net loss. |
| (4) | Non-recurring one time expenses related to legal, consulting, and accounting fees associated with the August 5, 2022 Business Combination. |
Contacts
Investor Contact:
Kevin Hunt
ir@dwavesys.com
Media Contact:
Jill Wroblewski
AxiCom
media@dwavesys.com