For anyone who has been following the financial markets, one area that has had tremendous difficulty this year is the market for Special Purpose Acquisition Companies (SPAC). As of August 2022, only 74 companies have been able to go public via a SPAC transaction versus 613 that were able to do so in 2021. So the recent completion of the SPAC merger between D-Wave and DPCM capital which was originally announced in February 2022, required surmounting a whole bunch of challenges. In order to make it work, the companies did need to amend the original deal to reduce transaction expenses and also enter into a special purchase agreement with Lincoln Park Capital, LLC to have them purchase up to $150,000,000 of common stock over a 36-month period.
Nonetheless, the parties were able to complete the deal and D-Wave had the honor of ringing the opening bell at the New York Stock Exchange (NYSE) on August 8, 2022. This has been a very long road for D-Wave which has first founded in 1999 and has been though many challenging times between then and now. We interviewed Alan Baratz, CEO, of the public company now named D-Wave Quantum about what some of the secrets were to complete the SPAC under these difficult conditions and what’s in store for D-Wave as it becomes a public company. You can view the questions we posed (labelled QCR) to Alan and his answers (labelled AB) below.
QCR: We realize that the SPAC process was very difficult recently due to the overall economic conditions in the past few months and we’re impressed with D-Wave’s efforts to get this through. Our readers would be interested in your views on how D-Wave was able to complete thus transaction and whether you think this transaction will be the last to involve a quantum computing company for a while.
AB: While we’re living in an unprecedented time and facing an unpredictable market, we’re a company that has never shied away from tackling complex challenges. After all, we commercialized the first quantum computer when no one thought it was possible. We approached the SPAC process with the same pragmatic vision, obsessive problem solving, and boundless tenacity we bring to our business every day. While I can’t speculate on other SPACs, I can tell you that closing the deal was an incredibly hard and dynamic process. Most important was not getting distracted from our real jobs: running the business, creating demand for quantum computing, delivering products like the CQM solver, new systems in the US, and the next-generation experimental Advantage2 prototype, while continuing development on the next-generation Advantage2 product, developing our gate model quantum computer, and developing new quantum hybrid use cases with customers. Keeping that focus on business and product delivery was central to ensuring value to investors and ultimately unlocking access to capital markets to increase our ability to fund and accelerate growth.
QCR: We also noticed that the SPAC redemptions were probably a little more than they expected and would like to know if D-Wave will be doing anything to adjust their business plans because of this.
AB: You know the data around redemptions – we’re in line with the few others that are closing deals. We planned for that, ensuring we had other capital vehicles in addition to the business combination. Moving forward, we are well-positioned to accelerate our growth strategy, and our new access to the capital available in the public markets will advance the production of our quantum computing solutions and continue to help our customers harness the power of quantum to solve their most complex business challenges.
August 11, 2022