United States securities and exchange commission logo
June 9, 2022
Emil Michael
President
D-Wave Quantum Inc.
3033 Beta Avenue
Burnaby, British Columbia V5G 4M9
Canada
Re: D-Wave Quantum Inc.
Amendment No. 2 to
Registration Statement on Form S-4
Filed May 27, 2022
File No. 333-263573
Dear Mr. Michael:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our May
10, 2022 letter.
Amendment No. 2 to Registration Statement on Form S-4
What interests does the Sponsor and DPCM's officers and directors have
in the Transaction?,
page 9
1. We note your response
to prior comment 1 and reissue our comment in part. Please
clearly state whether
there are any fees or out-of-pocket expenses due to affiliates of the
Sponsor upon
consummation of the Transaction.
Emil Michael
FirstName LastNameEmil Michael
D-Wave Quantum Inc.
Comapany
June 9, 2022NameD-Wave Quantum Inc.
June 9,
Page 2 2022 Page 2
FirstName LastName
Material U.S. Federal Income Tax Considerations, page 111
2. We note you have filed a short-form tax opinion as Exhibit 8.1 to your
registration
statement. Accordingly, please remove any statement in your disclosure
that assumes the
material tax consequences at issue (e.g., "Assuming the DPCM Merger so
qualifies. . . a
U.S. holder that exchanges DPCM Class A Shares for D-Wave Quantum
Common Shares
in the DPCM Merger should not recognize any gain or loss on such
exchange."). State
clearly that the DPCM Merger will qualify as an exchange governed by
Section 351 of the
U.S. Tax Code and whether U.S. holders who exchange DPCM Class A
Shares for D-
Wave Quantum Common Shares in the merger will recognize gain or loss
on such an
exchange. For further guidance see Staff Legal Bulletin No. 19
(October 14, 2011) and
Item 601(b)(8) of Regulation S-K. If there is uncertainty regarding
the tax treatment of
the business combination, counsel s opinion should discuss the
degree of uncertainty.
Further, please clearly state in your disclosure that the statements
set forth under the
captions Material U.S. Federal Income Tax Considerations U.S.
Holders Redemption
of DPCM Class A Shares and Material U.S. Federal Income Tax
Considerations U.S.
Holders The DPCM Merger" constitute the opinion of Greenberg
Traurig, P.A.
Unaudited Pro Forma Combined Financial Information
Description of the Transaction, page 146
3. We note on page F-56 that D-Wave Systems, Inc. has nearly 5.5 million
unvested options
as of March 31, 2022. Please describe how these options are expected
to be impacted by
this Transaction. To the extent that vesting will be accelerated and
additional stock based
compensation expense will be recognized, please revise your pro formas
to give effect to
the expected charge and provide quantified disclosure in MD&A, if
material.
Unaudited Pro Forma Condensed Combined Balance Sheet, page 151
4. Please revise to correct the placement of pro forma adjustment (f). It
appears this
adjustment pertains to accounts payable, accrued expenses and other
current liabilities
rather than trade accounts payable.
Information about D-Wave, page 181
5. We note your response to prior comment 5. We further note the public
press release
published on July 6, 2021, announcing that Quantum Blockchain
Technologies Plc would
use D-Wave's Leap quantum cloud service to develop cryptography
algorithms for crypto
currency mining. Please advise if this customer engagement is
currently in effect, and, if
so, address prior comment 5.
Emil Michael
FirstName LastNameEmil Michael
D-Wave Quantum Inc.
Comapany
June 9, 2022NameD-Wave Quantum Inc.
June 9,
Page 3 2022 Page 3
FirstName LastName
D-Wave Management's Discussion and Analysis of Financial Condition and Results
of
Operations
The Transaction Agreement and PIPE Financing, page 200
6. You disclose on page 201 that after consummation of the Transaction
and PIPE financing,
you expect cash balances of approximately $128.2 million, assuming the
Maximum
Redemption Scenario, or $318.3 million, assuming the No Redemption
Scenario. These
figures do not appear consistent with pro forma cash balances
presented on page 151.
Please revise as appropriate to clarify the reason for this apparent
discrepancy.
Comparison of the Three Months Ended March 31, 2022 and 2021
Revenue, page 204
7. We note your response to prior comments 7 and 11. We note that QCaaS
revenue
comprised 80-81% of total revenues for the quarters ended March 31,
2021 and 2022,
83% of total revenues for the year ended December 31, 2020 and 70% of
total revenues
for the year ended December 31, 2021. Your discussion of projections
on page 286
indicates that you expect QCaaS revenue to be only 45% of total
revenue for 2022. Please
tell us and revise your filing to explain the reason for this
discrepancy. If you anticipate a
significant reduction in QCaaS revenue as a percentage of total
revenue in 2022 as
compared to 2021, please revise your MD&A to explain the reasons for
this expected
change in trends.
Related Party Loans, page 255
8. We note your disclosure that the Sponsor of DPCM issued an unsecured
promissory note
to an affiliate of the Sponsor for purposes of providing working
capital to DPCM.
Identify the affiliate of the Sponsor that is the counterparty and
file a copy of the
promissory note as an exhibit to your registration statement.
Background of the Transaction, page 277
9. We note your response to prior comment 9 and revised disclosure on
page 282. Please
revise to state when the projections incorporating such adjustments
were subsequently
disseminated to the DPCM Board and clarify the date the projections
included in your
registration statement on page 289 were prepared. If the assumed
closing date was
considered a "key assumption" in preparing the financial projections,
please include it in
your list of assumptions on page 286 or advise.
Certain Benefits of DPCM's Directors and Officers and Others in the
Transaction, page 293
10. We note your response to prior comment 12 and reissue our comment in
part. We further
note your revised disclosure stating that DPCM does not believe its
fiduciary duties or
contractual obligations or waiver of corporate opportunity materially
affected its search
for a business combination. Please clearly state whether the "search"
for a business
Emil Michael
FirstName LastNameEmil Michael
D-Wave Quantum Inc.
Comapany
June 9, 2022NameD-Wave Quantum Inc.
June 9,
Page 4 2022 Page 4
FirstName LastName
combination includes DPCM's negotiation and recommendation of the
business
combination or advise.
General
11. We note your disclosure that UBS Securities LLC, Morgan Stanley & Co.
LLC, and
Citigroup Global Markets Inc. (collectively referred to herein as the
"Firms") resigned
from their respective roles in connection with the Transaction. Please
disclose how you
received notice from the Firms, the amount of any fees that have
already been paid to the
Firms, and why each waiver was agreed to. Separately state the amount
of fees waived by
each Firm, not solely in the aggregate.
In addition, with respect to each such resignation:
Please clarify the role that each Firm played in any part of
the Transaction (i.e., the
identification or evaluation of business combination targets) as
well as the current
relationship between the Firms and the merger parties (i.e.
whether there are other
relationships with any of the Firms after the resignations).
Disclose both the extent of
the work already performed and the work agreed to be performed by
each Firm prior
to its resignation. Revise the background of the Transaction to
clearly note when any
of the Firms were present in discussions or at board meetings and
qualify their
presence by noting they subsequently resigned.
Discuss the potential impact on the Transaction related to the
resignation of the
Firms, including, but not limited to, any impact on the PIPE
financing. For example,
if any of the Firms would have played a role in the closing,
please revise to identify
the party who will be filling any such role.
Disclose in the forepart of the filing that the Firms claim no
remaining role in
your business combination transaction and have affirmatively
disclaimed any
responsibility for any of the disclosure in this registration
statement.
Please disclose whether any of the Firms were involved in the
preparation of any
disclosure that is included in the Form S-4 registration
statement, including but not
limited to any analysis underlying disclosure in the registration
statement. If so,
clarify the involvement of any such Firm, whether it has
retracted any work product
associated with the transaction, and the risk of such withdrawal
and reliance on such
Firm's expertise.
Disclose whether any of the Firms provided you with any reasons
for its respective
resignation or why it was unable to complete its respective
engagement. If there was
no dialogue and/or you did not seek out the reasons why such Firm
was resigning
(and waiving deferred fees, as applicable) or unable to complete
its respective
engagement, despite already providing and/or completing their
services, please
indicate so in your registration statement.
Emil Michael
FirstName LastNameEmil Michael
D-Wave Quantum Inc.
Comapany
June 9, 2022NameD-Wave Quantum Inc.
June 9,
Page 5 2022 Page 5
FirstName LastName
Please advise if you are aware of any disagreements with any of
the Firms regarding
the scope of their respective engagement or their ability to
complete their respective
engagement prior to resigning.
Please advise whether you are aware of any disagreements with
any of the Firms
regarding the disclosure in your registration statement.
Revise your risk factor on page 80 to note whether each Firm
was to be compensated,
in part, for services already rendered. As applicable, address
that the Firms will
waive such fees and disclaim responsibility for the Form S-4
registration statement
despite already rendering such services. Clarify the unusual
nature of each fee
waiver and the impact of it on the evaluation of the Transaction.
12. Please disclose what consideration the DPCM Board has given to
reconsidering its
assessment of the Transaction given the subsequent resignation of the
Firms. Expand
your disclosure to address the DPCM Board's consideration of the
Transaction without the
advice of the Firms and disclose the impact this will have on
investors.
13. We note your risk factor on page 80 addressing the resignation of
Morgan Stanley, Citi
and UBS in their advisory roles in connection with the Transaction.
Please disclose
whether UBS advised it has resigned in every capacity in which they
were described in the
registration statement. If so, please expand your disclosure to
address this fact. In that
regard, we note your disclosure on page 110 that UBS "has an interest
in DPCM
completing a business combination that will result in the payment of
the deferred
underwriting commission." Explain how UBS is ceasing to act in every
capacity or
relationship with respect to the Transaction, yet will maintain an
interest in the
Transaction and receive its deferred underwriting commissions upon
consummation of the
Transaction. Further, please clarify the relationship between UBS and
DPCM after the
IPO. Describe any role UBS had in the Transaction, including, but not
limited to, any
involvement UBS had in identifying potential business combination
targets.
14. Please supplementally provide us with the engagement letter with each
Firm and other
agreements, if any, entered into by DPCM or D-Wave with the Firms or
any of their
affiliates. Please disclose any ongoing obligations of the parties
pursuant to the
engagement letter that will survive termination of the engagement,
such as
indemnification provisions, rights of first refusal, and lockups, and
discuss the impacts of
those obligations on the company in the registration statement. Please
also provide us with
any correspondence between each Firm and DPCM and/or D-Wave relating
to such Firm's
resignation.
15. Please provide us with a letter from each Firm stating whether it
agrees with the
statements made in your proxy statement/prospectus related to their
resignation and, if
not, stating the respects in which they do not agree. Please revise
your disclosure
accordingly to reflect that you have discussed the disclosure with
such Firm and it either
Emil Michael
D-Wave Quantum Inc.
June 9, 2022
Page 6
agrees or does not agree with the conclusions and the risks associated
with such outcome.
If any such Firm does not respond, please revise your disclosure to
indicate you have
asked and not received a response and disclose the risks to investors.
Additionally, please
indicate that such Firm withdrew from its respective role(s) in your
transaction and
forfeited its fees, if applicable, and that such Firm refused to discuss
the reasons for its
resignation and forfeiture of fees, if applicable, with management. The
disclosure should
clarify whether each Firm performed substantially all the work to earn
its fees.
16. Please revise your disclosure to highlight for investors that each Firm
s withdrawal
indicates that it does not want to be associated with the disclosure or
underlying business
analysis related to the transaction. In addition, your disclosure should
caution investors
that they should not place any reliance on the fact that the Firms have
been previously
involved with the transaction.
You may contact Lisa Etheredge, Senior Staff Accountant, at (202)
551-3424 or Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Patrick Faller, Staff
Attorney, at (202) 551-4438 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
FirstName LastNameEmil Michael
Division of
Corporation Finance
Comapany NameD-Wave Quantum Inc.
Office of
Technology
June 9, 2022 Page 6
cc: Adam M. Givertz
FirstName LastName