D-Wave Receives Notice of Non-Compliance with NYSE Trading Share Price Listing Rule

Rhea-AI Summary

D-Wave Quantum Inc. (NYSE: QBTS) has received a notice from the New York Stock Exchange (NYSE) on October 2, 2024, stating that it is not in compliance with the NYSE Listed Company Manual due to its average closing stock price falling below $1.00 over a consecutive 30 trading-day period. The company has a six-month cure period to regain compliance by achieving a closing share price of at least $1.00 and an average closing share price of at least $1.00 over a 30 trading-day period.

D-Wave has notified the NYSE of its intention to cure the stock price deficiency and return to compliance. The company is considering various options, including a potential reverse stock split subject to shareholder approval. During this period, D-Wave's common stock will continue to be listed and traded on the NYSE, provided it complies with other NYSE continued listing standards.

Positive

• D-Wave has a six-month period to cure the stock price deficiency
• The company's stock continues to be listed and traded on the NYSE during the cure period

Negative

• D-Wave's stock price has fallen below $1.00, violating NYSE listing requirements
• The company may need to implement a reverse stock split to regain compliance
• Risk of potential delisting if compliance is not achieved within the cure period

Insights

Financial Analyst

This notice of non-compliance from the NYSE is a significant red flag for D-Wave Quantum. The company's inability to maintain a share price above $1.00 over 30 trading days indicates severe market skepticism about its value and future prospects. While D-Wave has a six-month grace period to rectify this issue, the situation underscores the company's precarious financial position.

The potential for a reverse stock split, while a common tactic to artificially boost share price, doesn't address the underlying issues causing the stock's decline. Investors should be wary of this as a cosmetic fix that doesn't improve the company's fundamental value or performance.

With a market cap of just $184.6 million, D-Wave is operating in a highly speculative and capital-intensive quantum computing sector. The risk of delisting, if not addressed, could further erode investor confidence and limit the company's access to capital markets, potentially impacting its ability to fund ongoing operations and R&D efforts critical in this emerging technology field.

Legal Expert

The NYSE's notice to D-Wave Quantum triggers several legal and compliance considerations. While not an immediate cause for delisting, it starts a critical six-month countdown for the company to regain compliance with the $1.00 minimum share price requirement. This situation could potentially lead to:

• Increased scrutiny from regulators and shareholders
• Potential shareholder lawsuits if the company fails to adequately address the issue
• The need for careful disclosure in all public communications and SEC filings regarding the company's plans to regain compliance

If D-Wave opts for a reverse stock split, it will require shareholder approval, necessitating a proxy statement filing with the SEC and a shareholder meeting. This process involves additional legal and regulatory hurdles, including ensuring all disclosures are complete and accurate to avoid potential securities law violations. The company must tread carefully to maintain transparency and comply with all NYSE and SEC regulations during this period.

Intends to cure the deficiency and return to compliance with NYSE standard

PALO ALTO, Calif.--(BUSINESS WIRE)-- D-Wave Quantum Inc. (NYSE: QBTS) (“D-Wave” or the “Company”), a leader in quantum computing systems, software, and services and the world’s first commercial supplier of quantum computers, today announced that it received notice from the New York Stock Exchange (the “NYSE”) on October 2, 2024 that it is not in compliance with Section 802.01C of the NYSE Listed Company Manual because, as of October 2, 2024, the average closing price of the Company’s common stock was less than $1.00 over a consecutive 30 trading-day period. The notice does not result in the immediate delisting of the Company’s common stock from the NYSE.

On October 4, 2024, the Company notified the NYSE that it intends to cure the stock price deficiency and to return to compliance with the NYSE continued listing standard. The Company can regain compliance at any time within the six-month period following receipt of the NYSE notice if on the last trading day of any calendar month during the cure period the Company has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month.

Under the NYSE’s rules, if the Company determines that, if necessary, it will cure the stock price deficiency by taking an action that will require stockholder approval, it must so inform the NYSE in the above referenced notification and the price condition will be deemed cured if the price promptly exceeds $1.00 per share, and the price remains above that level for at least the following 30 trading days. The Company intends to consider available alternatives, including but not limited to a reverse stock split, that are subject to shareholder approval.

The Company’s common stock will continue to be listed and trade on the NYSE during this period, subject to the Company’s compliance with other NYSE continued listing standards.

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 customers include Volkswagen, Mastercard, Deloitte, Davidson Technologies, ArcelorMittal, Siemens Healthineers, Unisys, NEC Corporation, Pattison Food Group Ltd., DENSO, Lockheed Martin, Forschungszentrum Jülich, University of Southern California, and Los Alamos National Laboratory.

Forward Looking Statements

Certain statements in this press release are forward-looking, as defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties, and other factors that may cause actual results to differ materially from the information expressed or implied by these forward-looking statements and may not be indicative of future results. These forward-looking statements are subject to a number of risks and uncertainties, including, among others, various factors beyond management’s control, including the risks set forth under the heading “Risk Factors” discussed under the caption “Item 1A. Risk Factors” in Part I of our most recent Annual Report on Form 10-K or any updates discussed under the caption “Item 1A. Risk Factors” in Part II of our Quarterly Reports on Form 10-Q and in our other filings with the SEC. Undue reliance should not be placed on the forward-looking statements in this press release in making an investment decision, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241004248200/en/

Investor Contact:

Kevin Hunt

ir@dwavesys.com

Media Contact:

Alex Daigle

media@dwavesys.com

Source: D-Wave Quantum Inc.

FAQ

Why did D-Wave Quantum (QBTS) receive a notice from the NYSE on October 2, 2024?

D-Wave received a notice because its average closing stock price was less than $1.00 over a consecutive 30 trading-day period, violating NYSE listing requirements.

How long does D-Wave Quantum (QBTS) have to regain compliance with NYSE listing standards?

D-Wave has a six-month cure period following the receipt of the NYSE notice to regain compliance with the stock price requirement.

What options is D-Wave Quantum (QBTS) considering to address the NYSE compliance issue?

D-Wave is considering various options, including a potential reverse stock split, which would be subject to shareholder approval.

Will D-Wave Quantum (QBTS) stock continue to trade on the NYSE during the cure period?

Yes, D-Wave's stock will continue to be listed and traded on the NYSE during the cure period, subject to compliance with other NYSE listing standards.