qbts-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q

________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ and ____________

Commission file number 001-41468

________________________

D-WAVE QUANTUM INC.

(Exact name of registrant as specified in its charter)

________________________


Delaware			88-1068854
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

2650 East Bayshore Road, Palo Alto, California			94303
(Address of Principal Executive Offices)			(Zip Code)

(604) 630-1428

Registrant's telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report)

________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of November 13, 2024, there were outstanding 180,252,641 shares of the registrant’s common stock, par value $0.0001 per share. In addition, there were 43,762,188 exchangeable shares outstanding as of November 13, 2024, which are convertible into shares of common stock on a one for one basis at any time for no consideration.

Table of Contents


		Page

Part I. Financial Information		3
Item 1.	D-Wave Quantum Inc. Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets (Unaudited)
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
	Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited)
	Condensed Consolidated Statements of Cash Flows (Unaudited)
	Notes to Condensed Consolidated Financial Statements (Unaudited)
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

Part II. Other Information		37
Item 1 .	Legal Proceedings	37
Item 1A .	Risk Factors	37
Item 2 .	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3 .	Defaults Upon Senior Securities	37
Item 4 .	Mine Safety Disclosures	37
Item 5 .	Other Information	37
Item 6 .	Exhibits and Financial Statement Schedules	37
Signatures		39

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q (this “Report”) may constitute “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Our forward-looking statements include, but are not limited to, statements regarding D-Wave Quantum Inc.’s and D-Wave Quantum Inc.’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “believe,” “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “trend,” “believe,” “estimate,” “predict,” “project,” “potential,” “seem,” “seek,” “future,” “outlook,” “forecast,” “projection,” “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. Factors that might cause or contribute to a material difference include those risks discussed below and in Part I, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission (the "SEC”). You should not place undue reliance on these forward-looking statements in making an investment decision with respect to the securities offered under this Report. These forward-looking statements are not intended to serve as, and must not be relied on as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability regarding future performance, events or circumstances. Many of the factors affecting actual performance, events and circumstances are beyond the control of D-Wave Quantum. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. All forward-looking statements set forth in this Report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The following discussion should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto included our most recent Annual Report on Form 10-K. These forward-looking statements are based on information available as of the date of this Report, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties and are not predictions of actual performance. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Part I - Financial Information

Item 1. Financial Statements

D-Wave Quantum Inc.

Condensed Consolidated Balance Sheets


	September 30,		December 31,
	2024		2023
(In thousands, except share and per share data)	(Unaudited)
Assets
Current assets:
Cash	$	29,274	$	41,307
Trade accounts receivable, net of allowance for doubtful accounts of $225 and zero	1,456		1,652
Inventories	1,903		2,078
Prepaid expenses and other current assets	2,447		2,009
Total current assets	35,080		47,046
Property and equipment, net	3,414		2,551
Operating lease right-of-use assets	7,642		8,223
Intangible assets, net	436		179
Other non-current assets	2,989		1,357
Total assets	$	49,561	$	59,356

Liabilities and stockholders' deficit
Current liabilities:
Trade accounts payable	$	696	$	1,465
Accrued expenses and other current liabilities	6,573		5,343
Current portion of operating lease liabilities	1,580		1,374
Loans payable, net, current (including $13,700 and $— as of September 30, 2024 and December 31, 2023, respectively, at fair value)	14,070		399
Deferred revenue, current	2,910		2,669
Total current liabilities	25,829		11,250
Warrant liabilities	1,611		1,630
Operating lease liabilities, net of current portion	6,966		7,028
Loans payable, net, non-current (including $— and $31,400 as of September 30, 2024 and December 31, 2023, respectively, at fair value)	32,013		63,850
Deferred revenue, non-current	57		79
Total liabilities	$	66,476	$	83,837

Commitments and contingencies (Note 10)

Stockholders' deficit:
Common stock, par value $0.0001 per share; 675,000,000 shares authorized at both September 30, 2024 and December 31, 2023; 207,963,593 shares and 161,113,744 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.	20		16
Additional paid-in capital	534,527		469,081
Accumulated deficit	(540,863)		(483,061)
Accumulated other comprehensive loss	(10,599)		(10,517)
Total stockholders' deficit	(16,915)		(24,481)
Total liabilities and stockholders’ deficit	$	49,561	$	59,356

The accompanying notes are an integral part of these condensed consolidated financial statements.

D-Wave Quantum Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share and per share data)	2024		2023		2024		2023
Revenue	$	1,870	$	2,562	$	6,518	$	5,852
Cost of revenue	827		1,033		2,428		3,197
Total gross profit	1,043		1,529		4,090		2,655
Operating expenses:
Research and development	8,668		9,459		25,548		29,922
General and administrative	9,259		8,003		24,296		28,875
Sales and marketing	3,752		2,474		11,237		7,862
Total operating expenses	21,679		19,936		61,081		66,659
Loss from operations	(20,636)		(18,407)		(56,991)		(64,004)
Other income (expense), net:
Interest expense	(1,180)		(1,035)		(3,480)		(1,822)
Change in fair value of Term Loan	(1,559)		1,701		(635)		1,356
Term Loan debt issuance costs	—		(725)		—		(2,118)
Gain (loss) on investment in marketable equity securities	(8)		—		1,495		—
Change in fair value of warrant liabilities	476		1,433		19		(79)
Other income (expense), net	195		927		1,790		(34)
Total other income (expense), net	(2,076)		2,301		(811)		(2,697)
Net loss	$	(22,712)	$	(16,106)	$	(57,802)	$	(66,701)
Net loss per share, basic and diluted	$	(0.11)	$	(0.12)	$	(0.32)	$	(0.51)
Weighted-average shares used in computing net loss per share, basic and diluted	201,585,533		133,222,318		178,406,948		131,373,959

Comprehensive loss:
Net loss	$	(22,712)	$	(16,106)	$	(57,802)	$	(66,701)
Foreign currency translation adjustment	(151)		15		(82)		(70)
Net comprehensive loss	$	(22,863)	$	(16,091)	$	(57,884)	$	(66,771)

The accompanying notes are an integral part of these condensed consolidated financial statements.

D-Wave Quantum Inc.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended September 30, 2024

(Unaudited)


	Common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total stockholders' deficit
(In thousands, except share data)	Shares	Amount
Balance at June 30, 2024	186,073,087	$	18	$	507,067	$	(518,151)	$	(10,448)	$	(21,514)
Issuance of common stock in connection with the Lincoln Park Purchase Agreement	10,621,447	1		11,898		—		—		11,899
Issuance of common stock in at-the-market offerings, net of issuance costs of $223	11,058,026	1		11,586		—		—		11,587

Issuance of common stock in connection with exercise of stock options and vesting of RSUs	211,033	—		41		—		—		41
Stock-based compensation	—	—		4,054		—		—		4,054
Tax withholding related to vesting of restricted stock units	—	—		(119)		—		—		(119)
Foreign currency translation adjustment, net of tax	—	—		—		—		(151)		(151)
Net loss	—	—		—		(22,712)		—		(22,712)
Balances at September 30, 2024	207,963,593	$	20	$	534,527	$	(540,863)	$	(10,599)	$	(16,915)

The accompanying notes are an integral part of these condensed consolidated financial statements.

D-Wave Quantum Inc.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended September 30, 2023

(Unaudited)


	Common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total stockholders' deficit
(In thousands, except share data)	Shares	Amount
Balance at June 30, 2023	128,028,658	$	12	$	409,885	$	(450,941)	$	(10,487)	$	(51,531)
Exercise of stock options	786,202	—		683		—		—		683
Issuance of common stock in connection with the Lincoln Park Purchase Agreement	26,247,450	3		45,660		—		—		45,663
Issuance of common stock in connection with the Employee Stock Purchase Plan	226,453	—		273		—		—		273
Stock-based compensation	—	—		5,884		—		—

SEC Form 10-Q filed by D-Wave Quantum Inc.