Item 1.01 |
Entry into a Material Definitive Agreement. |
Purchase Agreement and Registration Rights Agreement.
As previously disclosed, on February 7, 2022, DPCM Capital, Inc., a Delaware corporation (SPAC), D-Wave Quantum Inc., a Delaware corporation and a direct, wholly-owned subsidiary of SPAC (NewCo), DWSI Holdings Inc., a Delaware corporation and a direct, wholly-owned subsidiary of NewCo
(Merger Sub), DWSI Canada Holdings ULC, a British Columbia unlimited liability company and a direct, wholly-owned subsidiary of NewCo (CallCo), D-Wave Quantum Technologies
Inc., a British Columbia corporation and a direct, wholly-owned subsidiary of CallCo (ExchangeCo) and together with SPAC, NewCo, Merger Sub and CallCo, (the SPAC Parties), and
D-Wave Systems Inc., a British Columbia company (the Company), entered into a transaction agreement (the Transaction Agreement) relating to a business combination between
SPAC and the Company (the Proposed Transaction) pursuant to which, among other things, NewCo will continue as the surviving corporation and the parent of SPAC and the Company.
On June 16, 2022, NewCo, the Company, and SPAC entered into a Purchase Agreement (the Purchase Agreement) with Lincoln
Park Capital Fund, LLC (Lincoln Park), pursuant to which Lincoln Park has agreed to purchase from NewCo up to $150,000,000 of NewCo common stock (subject to certain limitations contained in the Purchase Agreement) from time to
time over a 36-month period following the Commencement Date (as defined below). In connection with the Purchase Agreement, NewCo, the Company, the SPAC also entered into a registration rights agreement with
Lincoln Park (the Lincoln Park Registration Rights Agreement) whereby NewCo has agreed to file with the U.S. Securities and Exchange Commission (the SEC) within thirty (30) days following the consummation
of the Proposed Transaction, a new registration statement covering the shares of NewCo common stock that may be issued to Lincoln Park under the Purchase Agreement (the Lincoln Park Registration Statement).
After (i) the consummation of the Proposed Transaction and (ii) upon the satisfaction of certain other conditions set forth in the
Purchase Agreement (the Commencement Date), NewCo shall have the right, but not the obligation, from time to time to direct Lincoln Park to purchase shares of NewCo common stock having a value of up to $250,000 on any business day
(the Purchase Date), which may be increased to up to $1,000,000 depending on certain conditions as set forth in the Purchase Agreement (and subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the Purchase Agreement) (each, a Regular Purchase). The purchase price per share for a Regular
Purchase will be the lower of: (i) the lowest trading price for shares of NewCo common stock on the applicable Purchase Date and (ii) the average of the three lowest closing sale prices for NewCo common stock during the ten consecutive
business days ending on the business day immediately preceding such Purchase Date. The purchase price per share will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, forward
or reverse stock split, or other similar transaction as provided in the Purchase Agreement.
From and after the Commencement Date, NewCo
shall also have the right, but not the obligation, to direct Lincoln Park on each Purchase Date to make accelerated purchases on the following business day (the Accelerated Purchase Date) up to the lesser of (i) 300%
of the number of shares purchased pursuant to a Regular Purchase or (ii) 30% of the trading volume on such Accelerated Purchase Date (during a time period specified in the Purchase Agreement) at a purchase price equal to the lesser of 95% of
(x) the closing sale price of NewCos common stock on the Accelerated Purchase Date and (y) of the volume weighted average price of NewCos common stock on the Accelerated Purchase Date (during a time period specified in the
Purchase Agreement) (each, an Accelerated Purchase). NewCo shall have the right in its sole discretion to set a minimum price threshold for each Accelerated Purchase in the notice provided with respect to such Accelerated
Purchase, and NewCo may direct multiple Accelerated Purchases in a day provided that delivery of shares has been completed with respect to any prior Regular and Accelerated Purchases that Lincoln Park has purchased.
In consideration for entering into the Purchase Agreement, NewCo will issue to Lincoln Park $875,000 of shares of NewCo common stock as a
commitment fee on the date of the closing of the Proposed Transaction. NewCo is also obligated to issue up to an additional $1,750,000, payable in of shares of NewCo common stock or cash at Newcos discretion, as a commitment fee on or before
the business day prior to the filing of the Lincoln Park Registration Statement.
The Purchase Agreement may be terminated by NewCo at any
time after the Commencement Date, at its sole discretion, without any cost or penalty, by giving one business day notice to Lincoln Park.
Actual sales of shares of NewCo common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined
by NewCo from time to time, including (among others) market conditions, the trading price of NewCo common stock and determinations by NewCo as to available and appropriate sources of funding for NewCo and its operations. The Purchase Agreement
prohibits NewCo from issuing or selling and Lincoln Park from acquiring any shares of NewCo common stock if those shares of NewCo common stock, when aggregated with all other shares of NewCo common stock then beneficially owned by Lincoln Park and
its affiliates, would result in Lincoln Park having beneficial ownership of more than 9.9% of the then total outstanding shares of NewCo common stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Rule 13d-3 promulgated thereunder.
The Purchase Agreement contains customary representations, warranties, covenants, closing conditions
and indemnification provisions by, among and for the benefit of the parties. Lincoln Park has agreed that neither it nor any of its agents, representatives or affiliates will enter into or effect, directly or indirectly any short selling or hedging,
which establishes a net short position with respect to the NewCo common stock. There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on NewCos ability to
enter into a similar type of agreement or equity line of credit during the term of the Purchase Agreement, excluding an at-the-market transaction with a registered
broker-dealer), rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement.