Business Context and Reporting Period
D-Wave Quantum Inc. filed a Form 8-K reporting events beginning October 20, 2023, with the report dated October 24, 2023. The filing concerns NYSE continued-listing compliance and cancellation of 2022 annual cash incentive bonuses. D-Wave’s common stock and warrants trade on the NYSE under QBTS and QBTS.WT, respectively.
Financial and Operating Metrics
The filing does not provide revenue, profit, cash flow, margins, debt, liquidity, or other quantitative financial results.
- The company stated that its decision regarding employee bonuses considered its commitment to efficient and effective business management and its focus on achieving profitability.
- No specific savings, expense impact, or accounting treatment from the bonus cancellation was disclosed.
Material Changes Versus the Prior Comparable Period
- On October 20, 2023, the NYSE notified D-Wave that its common stock was not in compliance with Section 802.01C of the NYSE Listed Company Manual because its average closing price was below $1.00 over a consecutive 30-trading-day period.
- The deficiency did not result in immediate delisting. D-Wave notified the NYSE on October 24, 2023, that it intended to cure the deficiency.
- The Board approved cancellation of the 2022 annual cash incentive bonuses for all eligible employees, including bonuses previously disclosed as earned by named executive officers.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- D-Wave has up to six months following receipt of the NYSE notice to regain compliance. Generally, compliance requires a closing share price of at least $1.00 and a 30-trading-day average closing price of at least $1.00 on the last trading day of a calendar month during the cure period.
- If stockholder approval is required for the selected remedy, the company may inform the NYSE and potentially cure the deficiency through a transaction such as a reverse stock split. No specific action has been approved or completed.
- The company’s common stock will continue trading on the NYSE during the cure period, subject to compliance with other continued-listing standards.
- D-Wave cited profitability objectives, industry and technology-sector market conditions, and efficient cost management in cancelling the bonuses.
- Key risks include failure to regain compliance within the applicable cure period, continued noncompliance with NYSE listing standards, potential stockholder approval requirements, and the risks described in the company’s 2022 Form 10-K and other SEC filings.
Important Facts for Investors to Verify
- Confirm the applicable deadline and precise NYSE requirements for curing the price deficiency.
- Monitor the stock’s closing price and 30-trading-day average, as well as compliance with all other NYSE standards.
- Determine whether D-Wave proposes a reverse stock split or another stockholder-approved alternative.
- Assess the effect of cancelling the 2022 cash incentive bonuses on compensation expense, employee retention, and future incentive plans; the filing does not provide quantified effects.
- Review subsequent SEC filings for updates on NYSE compliance, delisting risk, liquidity, profitability, and capital needs.