Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References in this report (the “Quarterly Report”) to “we,” “us,” “our” or the “Company” refer to DPCM Capital, Inc. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to CDPM Sponsor Group, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Transaction (as defined and described below), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Transaction are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of this Quarterly Report and the Company’s Annual Report on Form
10-K
filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 15, 2022 (the “Form
10-K”).
The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
We are a blank check company formed under the laws of the State of Delaware on March 24, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”).
We intend to effectuate our initial Business Combination using cash from the proceeds of our initial public offering (“Initial Public Offering”) and the sale of the private placement warrants (the “Private Placement Warrants”) that occurred simultaneously with the completion of the Initial Public Offering (the “Private Placement”), our capital stock, debt or a combination of cash, stock and debt. We are incurring and expect to continue to incur significant costs in the pursuit of our acquisition plans, including in connection with the Proposed Transaction. We cannot assure you that our plans to complete the Proposed Transaction, or any other initial Business Combination, will be successful.
On February 7, 2022, we entered into a transaction agreement (the “Transaction Agreement”) with
D-Wave
Quantum Inc., a Delaware corporation and our direct, wholly-owned subsidiary (“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
D-Wave
Systems Inc., a British Columbia company
(“D-Wave”),
relating to a proposed Business Combination between the Company and
D-Wave
(the “Proposed Transaction”).
In connection with the Proposed Transaction, NewCo filed a registration statement on Form
S-4
(File
No. 333-263573)
with the SEC on March 15, 2022 (the “NewCo Form
S-4”)
that includes a preliminary prospectus with respect to NewCo’s securities to be issued in connection with the Proposed Transaction and a preliminary proxy statement with respect to the meeting of our stockholders to vote on the Proposed Transaction. There can be no assurance as to whether or when the Proposed Transaction will be completed.
Pursuant to the Transaction Agreement, among other things, (a) on the date of the closing of the Proposed Transaction (the “Closing”, and such date, the “Closing Date”), Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving company after the Merger, as a result of which we will become a direct, wholly owned subsidiary of NewCo, with our stockholders receiving shares of NewCo common stock, par value $0.01 per share (“NewCo Common Shares”), in the Merger; and (b) immediately following the Merger, by means of a statutory plan of arrangement under the
Business Corporations Act
(British Columbia) (the “Plan of Arrangement”), (i) CallCo will acquire a portion of the issued and outstanding share capital of
D-Wave
(“D-Wave
Shares”) from certain holders in exchange for NewCo Common Shares (the “NewCo Share Exchange”), (ii) CallCo will contribute such
D-Wave
Shares to ExchangeCo in exchange for shares of ExchangeCo’s
non-par
value common stock (“ExchangeCo Common Shares”), (iii) following the NewCo Share Exchange, ExchangeCo will acquire the remaining issued and outstanding
D-Wave
Shares from the remaining holders of
D-Wave
Shares in exchange for the exchangeable shares in the capital of ExchangeCo (the “Exchangeable Shares”) and (iv) as a result of the foregoing,
D-Wave
will become a wholly-owned subsidiary of ExchangeCo. The holders of the Exchangeable Shares will have certain rights as specified in the Exchangeable Share Term Sheet (as defined in the Transaction Agreement), including the right to exchange Exchangeable Shares for NewCo Common Shares.
The Proposed Transaction is structured to provide our public stockholders that do not redeem their shares of our Class A common stock with a pro rata right to a pool of an additional 5,000,000 NewCo Common Shares, subject to a redemption cap of 63.3%. None of the holders of the Founder Shares (as defined below) will get the benefit of such additional shares. Upon the Closing, the public stockholders that do not elect to redeem their shares of our Class A common stock in connection with the Proposed Transaction will receive a number of NewCo Common Shares for each share of Class A common stock equal to the to the lower of: (A) 1.4541326; and (B) (1) (x) the Post-Redemption DPCM Share Number (as defined below), plus (y) 5,000,000 divided by (2) the Post-Redemption DPCM Share Number (the lower of (A) and (B), the “Exchange Ratio”). Additionally, upon the Closing, all of our outstanding warrants will be converted into the right to receive warrants of NewCo (“NewCo Warrants”). Each such NewCo Warrant will be exercisable for a number of NewCo Common Shares equal to the Exchange Ratio, at any time commencing 30 days after the Closing. As used herein, the “Post-Redemption DPCM Share Number” means the aggregate number of shares of our Class A common stock outstanding (other than any Excluded Shares (as defined in the Transaction Agreement)) at the Closing after giving effect to any redemptions by our public stockholders.