Both D-Wave (NYSE: QBTS) and Rigetti (Nasdaq: RGTI) are again facing stock delisting. This is a third time for D-Wave, which issued a press release today following notification by the SEC. Rigetti was notified of delisting threat in mid-September. This is Rigetti’s second time facing delisting, the first time in late 2023.
Notices of potential delisting are issued after a company’s stock falls below $1 for 30 consecutive days. Some of the boilerplate from the companies’ recent filing is shown below.
Raising money in public markets is always risky, perhaps more so for quantum computer developers since the time-to-payoff (broad commercialization) remains unclear and is hotly debated. D-Wave, at least, has a couple customers using D-Wave systems in a production setting. CEO Alan Baratz has maintained D-Wave is open for business now.
D-Wave systems are quantum annealing devices – akin to analog computing – and have demonstrated solid performance on optimizations. The challenge is to grow the customer base (build revenue stream) with its approach. D-Wave reported non-compliance (delisting) notices in March and October of 2023 and today.
D-Wave filing:
On October 2, 2024, D-Wave Quantum Inc. (the “Company,” “we,” “us” or “our”) was notified by the New York Stock Exchange (the “NYSE”) that it is not in compliance with Section 802.01C of the NYSE Listed Company Manual because 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.
Rigetti is pursuing amore traditional gate-based quantum computing strategy based on superconducting qubits. Last year, it became the first quantum system developer to offer its QPUs on a piecemeal basis and in conjunction with a partner program including suppliers of other system components (control systems, dilution refrigerators, software.) Whether this is the start of “merchant”market for build-your-own quantum systems bears watching.
Here’s an excerpt from Rigetti’s filing.
On September 16, 2024, Rigetti Computing, Inc. (the “Company”) received a letter from the Listing Qualifications Department of The Nasdaq Stock Market, LLC (“Nasdaq”), indicating that, based on the closing bid price for the previous 31 consecutive business days, the listing of the Company’s common stock was not in compliance with Nasdaq Listing Rule 5550(a)(2) to maintain a minimum bid price of $1.00 per share (the “Bid Price Rule”).
Nasdaq Listing Rule 5810(c)(3)(A) provides a compliance period of 180 calendar days, or until March 17, 2025 (the “Compliance Date”), to regain compliance. If at any time during this 180-day period the closing bid price of the Company’s common stock is at least $1.00 for a minimum of ten consecutive business days, the Company will regain compliance. If the Company is unable to regain compliance before the Compliance Date, the Company may be eligible for an additional 180 calendar days to satisfy the Bid Price Rule. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market with the exception of the Bid Price Rule and will need to provide written notice of its intention to cure the deficiency during such additional compliance period, by effecting a reverse stock split, if necessary. However, if it appears to Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for the additional compliance period, and the Company does not regain compliance by the Compliance Date, the Nasdaq Capital Market will provide written notification to the Company that its common stock is subject to delisting. At that time, the Company may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules. However, there can be no assurance that, if the Company does appeal the delisting determination by Nasdaq to the panel, such appeal would be successful.
The Company intends to actively monitor the closing bid price of its common stock and, as appropriate, will consider available options to regain compliance with the Bid Price Rule, including potentially seeking to effect a reverse stock split. At the Company’s 2024 Annual Meeting of Stockholders held on June 18, 2024, the Company’s stockholders approved a proposed amendment to the Company’s Certificate of Incorporation that would allow the Company to effect a reverse stock split of shares of the Company’s common stock at a ratio of 1-for-10, without further action by the stockholders. The Board of Directors of the Company has discretion to decide whether to cause such proposed amendment to become effective and implement such a reverse stock split. There can be no assurance that the Company will be able to regain compliance with Nasdaq’s Listing Rule 5550(a)(2) or will otherwise be in compliance with other Nasdaq listing criteria and that the Company will be able to maintain its listing with Nasdaq.
D-Wave stock price at the time of writing, $1.00
Rigetti stock price at the time writing, $0.78
Read More: Quantum Companies D-Wave and Rigetti Again Face Stock Delisting