D-Wave Quantum Inc 10-Q/A for FY2023 Q3

D-Wave Quantum Inc. (QBTS)

10-Q/A 2024-03-18 For: 2023-09-30

Added on April 12, 2026

About this 10-Q/A

D-Wave Quantum Inc filed this 10-Q/A on March 18, 2024, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.56M; up 51.2% from $1.7M a year earlier
Net loss: $16.11M; compared with a net loss of $11.65M a year earlier
Diluted EPS: -$0.12; compared with -$0.10 a year earlier

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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)


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


		Page

Part I. Financial Information
Item 1.	D-Wave Quantum Inc. Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Operations and Comprehensive Loss	7
	Condensed Consolidated Statement of Changes in Stockholders’ (Deficit) Equity	8
	Condensed Consolidated Statements of Cash Flows	12
	Notes to Condensed Consolidated Financial Statements	13
Item 2.	D-Wave Quantum Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

Part II. Other Information
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		46


	As of
	September 30,		December 31,
	2023		2022
(In thousands, except share and per share data)	(As Restated)		(As Restated)
Assets
Current assets:
Cash	$	53,317	$	7,065
Trade accounts receivable, net	763		757
Inventories	2,244		2,196
Prepaid expenses and other current assets	1,870		3,907
Total current assets	58,194		13,925
Property and equipment, net	1,879		2,294
Operating lease right-of-use assets	8,560		9,133
Intangible assets, net	195		244
Other noncurrent assets	1,351		1,351
Total assets	$	70,179	$	26,947
Liabilities and stockholders' deficit
Current liabilities:
Trade accounts payable	$	1,541	$	3,756
Accrued expenses and other current liabilities	9,604		8,640
Loans payable, net, current	30,199		1,863
Deferred revenue, current	2,177		1,781
Total current liabilities	43,521		16,040
Warrant liabilities	1,971		1,892
Operating lease liabilities, net of current portion	6,884		7,301
Loans payable, net, noncurrent	32,830		31,168
Deferred revenue, noncurrent	92		9
Total liabilities	$	85,298	$	56,410
Commitments and contingencies (Note 12)
Stockholders' deficit:
Common stock par value $0.0001 per share; 675,000,000 shares authorized at September 30, 2023 and December 31, 2022; 155,288,763 shares and 113,335,530 shares issued and outstanding as of September 30, 2023 and December 31, 2022.	$	15	$	11
Additional paid-in capital	462,385		381,274
Accumulated deficit	(467,047)		(400,346)
Accumulated other comprehensive loss	(10,472)		(10,402)
Total stockholders' deficit	(15,119)		(29,463)
Total liabilities and stockholders’ deficit	$	70,179	$	26,947


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
(In thousands, except share and per share data)	(As Restated)		(As Restated)		(As Restated)		(As Restated)
Revenue	$	2,562	$	1,695	$	5,852	$	4,778
Cost of revenue	1,033		654		3,197		1,858
Total gross profit	1,529		1,041		2,655		2,920
Operating expenses:
Research and development	9,459		7,507		29,922		21,799
General and administrative	8,003		5,925		28,875		13,566
Sales and marketing	2,474		2,773		7,862		5,982
Total operating expenses	19,936		16,205		66,659		41,347
Loss from operations	(18,407)		(15,164)		(64,004)		(38,427)
Other income (expense), net:
Interest expense	(1,035)		(633)		(1,822)		(2,252)
Change in fair value of warrant liabilities	1,433		2,603		(79)		2,603
Government assistance	—		—		—		—
Change in fair value of Term Loan	1,701		—		1,356		—
Term Loan debt issuance costs	(725)		—		(2,118)		—
Lincoln Park Purchase Agreement issuance costs	—		(629)		—		(629)
Other income (expense), net	927		2,173		(34)		2,782
Total other income (expense), net	2,301		3,514		(2,697)		2,504
Net loss	$	(16,106)	$	(11,650)	$	(66,701)	$	(35,923)
Net loss per share, basic and diluted	$	(0.12)	$	(0.10)	$	(0.51)	$	(0.29)
Weighted-average shares * used in computing net loss per share, basic and diluted	133,222,318		116,256,805		131,373,959		122,337,727
Comprehensive loss:
Net loss	$	(16,106)	$	(11,650)	$	(66,701)	$	(35,923)
Foreign currency translation adjustment, net of tax	15		56		(70)		18
Net comprehensive loss	$	(16,091)	$	(11,594)	$	(66,771)	$	(35,905)


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


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


		Stockholders’ Equity (Deficit)
	Common stock
(In thousands, except share data)		Shares	Amount		Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total stockholders' equity (deficit)
Balances at June 30, 2023 (as reported)		128,028,658	$	12	$	409,885	$	(427,303)	$	(10,487)	$	(27,893)
Cumulative restatement adjustments		—	—		—		(23,638)		—		(23,638)
Balances at June 30, 2023 (as restated)		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 Purchase Agreement		26,247,450	3		45,660		—		—		45,663
Issuance of common stock in connection with the ESPP		226,453	—		273						273
Stock-based compensation		—	—		5,884		—		—		5,884
Foreign currency translation adjustment, net of tax		—	—		—		—		15		15
Net loss		—	—		—		(16,106)		—		(16,106)
Balance at September 30, 2023 (as restated)		155,288,763	$	15	$	462,385	$	(467,047)	$	(10,472)	$	(15,119)


	Stockholders’ Equity (Deficit)
	Non-redeemable convertible preferred stock				Common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total stockholders' equity (deficit)
(In thousands, except share data)	Shares		Amount		Shares	Amount
Balances at June 30, 2022 (as reported)	137,765,828		$	189,881	3,341,327	$	2,811	$	147,754	$	(350,697)	$	(10,481)	$	(20,732)
Cumulative restatement adjustments	—		—		—	—		—		(20,220)		—		(20,220)
Balances at June 30, 2022 (as restated)	137,765,828		189,881		3,341,327	2,811		147,754		(370,917)		(10,481)		(40,952)
Retroactive application of Merger	(15,201,495)		—		(368,692)	(2,811)		2,811		—		—		—
Adjusted Balances, beginning of period*	122,564,333		189,881		2,972,635	—		150,565		(370,917)		(10,481)		(40,952)
Issuance of common stock upon conversion of D-Wave Systems preferred stock in connection with the Merger	(122,564,333)		(189,881)		96,764,117	10		189,871		—		—		—
Issuance of common stock in connection with the Lincoln Park Purchase Agreement (Note 2)	—	—	—		381,540	—		3,271		—		—		3,271
Merger, net of redemptions and transaction costs	—	—	—		4,327,512	—		(16,242)		—		—		(16,242)
Issuance of common stock in connection with the PIPE Investment	—	—	—		5,816,528	1		39,999		—		—		40,000
Exercise of warrants	—	—	—		115,025	—		910		—		—		910
Stock-based compensation	—	—	—			—		1,781		—		—		1,781
Foreign currency translation adjustment, net of tax	—		—		—	—		—		—		56		56
Net loss	—		—		—	—		—		(11,650)		—		(11,650)
Balances at September 30, 2022 (as restated)	—		$	—	110,377,357	$	11	$	370,155	$	(382,567)	$	(10,425)	$	(22,826)


	Nine months ended September 30,
	2023		2022
(in thousands)	(As Restated)		(As Restated)
Cash flows from operating activities:
Net loss	$	(66,701)	$	(35,923)
Adjustments to reconcile net loss to cash used in by operating activities:
Depreciation and amortization	828		1,038
Stock-based compensation	17,362		3,355
Amortization of operating right-of-use assets	573		493
Non-cash interest expense	1,745		280
Non-cash final fee payment for Venture Loan	—		1,808
Non-cash Lincoln Park Purchase Agreement issuance costs	—		629
Change in fair value of Warrant liabilities	79		(2,603)
Change in fair value of Term Loan	(1,356)		—
Debt issuance costs expensed for loans recorded under the fair value option	993		—
Government assistance	—		—
Unrealized foreign exchange loss (gain)	(40)		(2,707)
Other non-cash activities	35		266
Change in operating assets and liabilities:
Trade accounts receivable	7		1
Research incentives receivable	—		1,448
Inventories	(235)		(684)
Deferred offering costs	—		1,250
Prepaid expenses and other current assets	2,035		(3,815)
Trade accounts payable	(2,267)		614
Accrued expenses and other current liabilities	965		1,704
Deferred revenue	479		(1,051)
Operating lease liabilities, net of current portion	(412)		(442)
Net cash used in operating activities	(45,910)		(34,339)
Cash flows from investing activities:
Purchase of property and equipment	(141)		(249)
Purchase of software	(35)		(67)
Net cash used in investing activities	(176)		(316)
Cash flows from financing activities:
Proceeds from issuance of common stock from the PIPE investment (Note 4)	—		40,000
Merger, net of redemption and transaction costs (Note 4)	—		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
Payment on directors and officers financing arrangement	(1,449)		(864)
Proceeds from Lincoln Park Purchase Agreement	61,346		—
Proceeds from issuance of common stock in connection with ESPP	273		—
Proceeds from government assistance	1,487		3,124
Proceeds from issuance of common stock upon exercise of stock options	1,890		141
Proceeds from debt financing	29,007		19,870
Debt payments	(390)		(20,000)
Venture Loan interest and final payment fee	—		(1,808)
Government loan payment	—		(398)
Short swing profit settlement	244		—
Net cash provided by financing activities	92,408		38,967
Effect of exchange rate changes on cash and cash equivalents	(70)		(31)
Net increase in cash and cash equivalents	46,252		4,281
Cash and cash equivalents at beginning of period	7,065		9,483
Cash and cash equivalents at end of period	$	53,317	$	13,764

Supplemental disclosure of noncash investing and financial activities:

Transfer from inventory to property and equipment	$	152	$	—
Purchases of property and equipment included in accounts payable	53		—
Non-cash directors and officers insurance	—		2,893
Initial warrant liabilities recognized in connection with closing of the Merger	—		8,101
Non-cash Merger financing	—		5,713
Issuance of shares for payment of Lincoln Park Purchase Agreement commitment fee	—		3,271
Conversion of convertible preferred stock to common stock	—		189,871


Description	Level	September 30, 2023
Liabilities:
Warrant Liabilities – Public Warrants	1	$	1,091
Warrant Liabilities – Private Placement Warrants	2	$	880
Term Loan	3	$	29,800


	As of September 30, 2023
(In thousands)	As Previously Reported		Restatement Adjustments		As Restated
Loans payable, net, current	$	30,006	$	193	$	30,199
Total current liabilities	43,328		193		43,521
Loans payable, net, noncurrent	9,108		23,722		32,830
Total liabilities	61,383		23,915		85,298
Accumulated deficit	(443,132)		(23,915)		(467,047)
Total stockholders' equity (deficit)	8,796		(23,915)		(15,119)
Total liabilities and stockholders’ equity (deficit)	70,179		—		70,179


	Three Months Ended September 30,
	2023						2022
(In thousands, except share and per share data)	As Previously Reported		Restatement Adjustments		As Restated		As Previously Reported		Restatement Adjustments		As Restated
Loss from operations	$	(18,407)	$	—	$	(18,407)	$	(15,164)	$	—	$	(15,164)
Other income (expense), net:
Interest expense	(1,247)		212		(1,035)		(1,069)		436		(633)
Government assistance	1,051		(1,051)		—		—		—		—
Other income (expense), net	365		562		927		948		1,225		2,173
Total other income (expense), net	2,578		(277)		2,301		1,853		1,661		3,514
Net loss	(15,829)		(277)		(16,106)		(13,311)		1,661		(11,650)
Net loss per share, basic and diluted	(0.12)		—		(0.12)		(0.11)		0.01		(0.10)
Weighted-average shares * used in computing net loss per share, basic and diluted	133,222,318		—		133,222,318		116,256,805		—		116,256,805



Net comprehensive loss	(15,814)		(277)		(16,091)		(13,255)		1,661		(11,594)


	Nine months ended September 30, 2023
Balance at beginning of period	$	1,790
Deferral of revenue	4,353
Recognition of deferred revenue	(3,874)
Balance at end of period	$	2,269


	Interest Rate	September 30,		December 31,
		2023		2022
Loans payable, current:		(As Restated)		(As Restated)
Term Loan 1	11.00%	$	29,800	$	—
TPC Loan, due 2024	Interest free	399		399
Financing of directors and officers insurance, due 2023	4.24%	—		1,449
Other loans payable, current, due 2023		—		15
Total loans payable, current		$	30,199	$	1,863
Loans payable, noncurrent:
SIF Loan 1		$	32,462	$	30,434
TPC Loan, due 2025	Interest free	368		734
Total loans payable, noncurrent		$	32,830	$	31,168


	Three months ended September 30,
	2023		2022
United States	$	1,083	$	951
Japan	299		293
Germany	287		237
Switzerland	311		—
Other	582		214
Total revenue	$	2,562	$	1,695


	September 30,		December 31,
	2023		2022
Quantum computer systems	$	13,711	$	13,714
Lab equipment	6,838		6,666
Computer equipment	3,614		3,545
Leasehold improvements	1,075		1,075
Furniture and fixtures	372		319
Construction-in-progress	119		86
Total property and equipment	25,729		25,405
Less: Accumulated depreciation	(23,850)		(23,111)
Total Property and equipment, net	$	1,879	$	2,294


	Number of options outstanding	Weighted average exercise price ($)		Weighted average remaining contractual term (years)	Aggregate intrinsic value ($)
Balance as of December 31, 2022	15,387,546	$	1.76	7.12	$	8,763
Granted	—	—		—	—
Exercised	(2,329,067)	0.81		—	144
Forfeited	(1,019,743)	3.57		—	—
Expired	(388,956)	2.36		—	—
Balance as of September 30, 2023	11,649,780	$	1.66	7.32	$	1,618
Options exercisable as of September 30, 2023	9,809,565	$	1.24	7.13	$	1,438
Options unvested as of September 30, 2023	1,840,072	$	3.89	8.35	$	180


	Number of Outstanding	Weighted average Grant Date Fair Value ($)
Unvested as of December 31, 2022	8,143,304	$	5.69
Granted	4,423,933	0.89
Forfeited	(1,446,883)	4.63
Vested	(167,605)	4.02
Unvested as of September 30, 2023	10,952,749	$	3.93
Expected to vest as of September 30, 2023	10,436,290	$	3.97


	As of September 30,
	2023	2022
Public Warrants as converted to Common Shares (Note 9)	14,420,064	14,426,301
Private Warrants as converted to Common Shares (Note 9)	11,633,061	11,633,060
D-Wave Systems Warrant Shares as converted to Common Shares (Note 9)	1,155,713	2,889,282
Options to purchase common stock as converted to Common Shares1	9,419,509	13,532,543
Options to purchase Common Shares under the 2022 Equity Incentive Plan	1,061,981	1,500,081
Unvested restricted stock unit awards	10,952,749	—
Total	48,643,077	43,981,267


	Three Months Ended September 30,				Change
(In thousands, except percentages)	2023		2022		Amount		%
Research and development	$	9,459	$	7,507	$	1,952	26	%


	D-Wave Quantum Inc.

March 15, 2024	By:	/s/ John M. Markovich
		John M. Markovich
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


Dated: March 15, 2024	By:	/s/ Alan Baratz
		Alan Baratz
		President and Chief Executive Officer
		(Principal Executive Officer)