Exhibit 99.1

 

Arqit Quantum Inc.

 

Unaudited Condensed Consolidated Interim Financial Statements

 

As of and for the period ended 31 March 2023

 

 

 

Arqit Quantum Inc.

Unaudited Condensed Consolidated Interim Financial Statements

as of and for the period ended 31 March 2023

 

Contents   Page
     
Condensed Consolidated Statement of Comprehensive Income (unaudited)   2
     
Condensed Consolidated Statement of Financial Position   3
     
Condensed Consolidated Statement of Changes in Equity (unaudited)   4
     
Condensed Consolidated Statement of Cash Flows (unaudited)   5
     
Condensed Notes to the Financial Statements (unaudited)   6-9

 

1

 

 

Arqit Quantum Inc.
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the period ended 31 March 2023

 

       Unaudited six
month
   Unaudited six
month
 
       period ended   period ended 
   Note   31 March 2023   31 March 2022 
       $'000   $'000 
Revenue        19    5,293 
Other operating income        2,570    6,959 
Administrative expenses   2    (24,963)   (26,600)
Impairment loss on trade receivables and contract assets        (12,203)    
Operating loss        (34,577)   (14,348)
Change in fair value of warrants        12,910    72,464 
Finance costs        (169)   (69)
Finance income             
(Loss)/ profit before tax        (21,836)   58,047 
Income tax             
(Loss)/ profit for the financial year attributable to equity holders        (21,836)   58,047 
                
Other comprehensive (loss)/income :               
Items that may be reclassified to profit or loss               
Currency translation differences        (2,503)   258 
Total comprehensive (loss)/ profit for the year attributable to equity holders        (24,339)   58,305 
                
Earnings per ordinary share from continuing operations attributable to equity holders               
                
Basic earnings per share        (0.17409)   0.48212 
Diluted earnings per share        (0.17409)   0.47999 

 

All of the Group’s activities were derived from continuing operations during the above financial periods.

 

2

 

 

Arqit Quantum Inc.  
Condensed Consolidated Statement of Financial Position
As at 31 March 2023  

 

       Unaudited   Audited 
       31 March   30 September 
   Note   2023   2022 
       $'000   $'000 
ASSETS               
Non-current assets               
Property, plant and equipment        2,435    2,206 
Right of use asset        7,106    6,139 
Intangible assets   3    57,221    40,291 
Fixed asset investments        31    28 
Trade and other receivables   4    1,918    18,565 
Total non-current assets        68,711    67,229 
                
Current assets               
Trade and other receivables   4    4,252    7,677 
Cash and cash equivalents        41,504    48,966 
Total current assets        45,756    56,643 
Total assets        114,467    123,872 
                
LIABILITIES               
Current liabilities               
Trade and other payables   5    19,203    22,655 
Lease liabilities        1,580    1,154 
Total current liabilities        20,783    23,809 
                
Non-current liabilities               
Trade and other payables   5    5,293    4,183 
Lease liabilities        7,595    6,681 
Warrants liability        633    10,644 
Total non-current liabilities        13,521    21,508 
Total liabilities        34,304    45,317 
Net assets        80,163    78,555 
                
EQUITY               
Share capital   6    13    12 
Share premium   7    109,195    92,306 
Other reserves   7    166,804    166,804 
Foreign currency translation reserve   7    854    3,357 
Share-based payment reserve   7    32,272    23,216 
Retained earnings   7    (228,975)   (207,140)
Total Equity        80,163    78,555 

 

3

 

 

Arqit Quantum Inc.

Condensed Consolidated Statement of Changes in Equity (Unaudited)

For the period ended 31 March 2023

 

  

Share
Capital

  

Share
Premium

  

Other
reserves

   Foreign
currency
translation
   Share
option
reserve
   Retained earnings   Total 
   $'000 $'000 $'000 $'000 $'000 $'000 $'000 
Balance at 1 October 2021   11    70,999    166,805    256    303    (272,215)   (33,841)
Profit for the year                       58,046    58,046 
Other comprehensive income               258            258 
Total comprehensive income               258        58,046    58,304 
Transactions with owners in their capacity as owners:                                   
Share option charge                   10,134        10,134 
Earnout shares   1        (1)                
Exercise of warrants       21,279                    21,279 
Balance at 31 March 2022 attributable to owners of the Group   12    92,278    166,804    514    10,437    (214,169)   55,876 
                                    
Balance at 1 October 2022   12    92,306    166,804    3,357    23,216    (207,140)   78,555 
Loss for the period                       (21,835)   (21,835)
Other comprehensive income               (2,503)           (2,503)
Total comprehensive income               (2,503)       (21,835)   (24,338)
Issuance of ordinary shares   1    16,889                    16,890 
Transactions with owners in their capacity as owners:                                   
Share option charge                   9,056        9,056 
Balance at 31 March 2023 attributable to owners of the Group   13    109,195    166,804    854    32,272    (228,975)   80,163 

 

4

 

 

Arqit Quantum Inc.

Condensed Consolidated Statement of Cash Flows (Unaudited)

For the period ended 31 March 2023

 

   Unaudited
six month
period ended
   Unaudited
six month
period ended
 
   31 March
2023
   31 March
2022
 
   $'000   $'000 
Cash flows from operating activities          
Cash used in operations   (9,356)   (13,221)
           
Net cash used in operating activities   (9,356)   (13,221)
           
Cash flows from investing activities          
Capital expenditure on property, plant and equipment   (207)   (609)
Capital expenditure on intangibles   (16,930)   (12,883)
           
Net cash used in investing activities   (17,137)   (13,492)
           
Cash flows from financing activities          
Shares issued on exercise of warrants       21,279 
Proceeds from issue of shares, net of issue costs   19,788     
Payments of lease liabilities   (558)   (205)
Payments of interest portion of lease liabilities   (99)   (73)
Proceeds from government grants   508     
           
Net cash generated from financing activities   19,639    21,001 
           
Net decrease in cash and cash equivalents   (6,854)   (5,712)
Cash and cash equivalents at beginning of period   48,966    86,966 
Foreign exchange on cash and cash equivalents   (608)   904 
           
Cash and cash equivalents at end of period   41,504    82,158 

 

5

 

 

 

Arqit Quantum Inc.

Condensed Consolidated Notes to the Financial Statements (Unaudited)

For the period ended 31 March 2023

 

1.    General information and significant accounting policies

 

General information

 

Arqit Quantum Inc. (the “Company”) is a Cayman Islands exempted limited liability company with registered number 374857. The address of its registered office and its principal place of trading is c/o Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

 

These unaudited condensed consolidated financial statements comprise the Company and its subsidiaries (together referred to as the “Group”).

 

The principal activity of the Group is provision of cybersecurity services via satellite and terrestrial platforms.

 

Basis of preparation

 

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB, including IAS 34 ‘Interim Financial Reporting’. They do not include all of the information required in annual financial statements, and should be read in conjunction with the consolidated financial statements for the year ended September 30, 2022. The report of the auditors on those financial statements was unqualified. The comparative balance sheet figures for the year ended September 30, 2022 were derived from the audited consolidated financial statements.

 

The unaudited condensed consolidated financial statements have been presented in United States Dollars “USD” which is also the Group’s functional currency. All values are rounded to the nearest units (USD '000), except when otherwise indicated.

 

Information on the accounting policies applied can be found in the Group’s latest annual audited financial statements. The unaudited interim financial statements are prepared on the historical cost basis, other than investor warrants held at fair value through profit or loss, The preparation of the unaudited interim financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.

 

New and amended standards adopted by the Group

 

There have been no new or amended standards adopted by the Group for the first time during the interim period.

 

2.    Expenses by Nature

 

   Period ended   Period ended 
   31 March   31 March 
   2023   2022 
   $'000   $'000 
Employee benefit expense and other staff costs   15,557    9,628 
Capitalised within intangible assets   (3,149)   (2,474)
Legal and professional   4,828    2,441 
Foreign exchange   (9,294)   989 
Property costs   1,363    374 
Share based compensation   9,004    10,133 
Depreciation
   469    91 
Depreciation of right of use asset   693    225 
Other expenses   5,492    5,193 
Total administrative expenses   24,963    26,600 

 

6

 

 

Arqit Quantum Inc.

Condensed Consolidated Notes to the Financial Statements (Unaudited) (continued)

For the period ended 31 March 2023

 

3.    Intangible fixed assets

 

   Development 
   Costs 
   $'000 
Cost     
At 1 October 2021   18,235 
Additions   25,294 
Foreign exchange on translation   (3,238)
At 30 September 2022   40,291 
Additions   12,144 
Foreign exchange on translation   4,786 
At 31 March 2023   57,221 
Amortisation     
At 1 October 2021    
Charge    
At 30 September 2022    
Charge    
At 31 March 2023    
Net Book Value     
At 31 March 2023   57,221 
At 31 September 2022   40,291 

 

The Group’s intangible assets under development are internally generated and the Group has not yet begun amortisation of these finite useful economic life assets. $1.0 million (2022: $0.201 million) of these capitalised costs relate to QuantumCloud™. An impairment test was performed for the period ended March 31, 2023, which considered the value of existing contracts and forecasted revenues. No impairment was deemed necessary. The Group will begin amortisation when the intangible assets are available for use.

 

4.    Trade and other receivables

 

  

31 March

2023

  

30 September

2022

 
   $'000   $'000 
Current assets          
Trade debtors   1,116    5,924 
Other debtors   736    892 
Prepayments and accrued income   2,400    861 
Total   4,252    7,677 

 

An allowance for doubtful debts has been made in relation to balances with Virgin Orbit LLC. Please see note 8 for more details.

 

The directors consider that the carrying amount of financial assets recorded at amortised costs in the financial statements approximate their fair value.

 

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.

 

7

 

 

Arqit Quantum Inc.

Condensed Consolidated Notes to the Financial Statements (Unaudited) (continued)

For the period ended 31 March 2023

 

  

31 March

2023

  

30 September

2022

 
   $'000   $'000 
Non-current Assets          
Prepayments       15,873 
Trade debtors       975 
Other debtors   1,918    1,717 
Total   1,918    18,565 

 

In the prior period, non-current prepayments comprise the payment of a non-refundable deposit towards the cost of the first satellite launch service, which was expected to be more than one year from the accounting reference date.

 

5.    Trade and other payables

 

   31 March   30 September 
   2023   2022 
   $'000   $'000 
Current liabilities          
Trade payables   13,286    17,478 
Other tax and social security   815    633 
Other creditors
   620    516 
Accruals   4,482    3,803 
Deferred income       225 
Total   19,203    22,655 

 

Trade payables and accruals relate to amounts payable at the balance sheet date for services received during the period. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. The directors consider that the carrying amount of financial liabilities recorded at amortised costs in the financial statements approximate their fair value.

 

  

31 March

2023

  

30 September

2022

 
   $'000   $'000 
Non-current Liabilities          
Deferred government grants   5,293    4,183 
    5,293    4,183 

 

6.    Share capital

 

As of March 31, 2023, the total number of ordinary shares of the Company outstanding is 134,078,493 with a par value of $0.0001.

 

   Number of ordinary   Share capital 
   shares   $ 
September 30, 2022 – par value $0.0001   121,926,166    12,192 
           
Shares issued in direct offering   10,000,000    1,000 
Shares issued in ATM   472,396    47 
EMI exercised   1,196,981    120 
Grants vested   482,950    48 
March 31, 2023 – par value $0.0001   134,078,493    13,408 

 

8

 

 

Arqit Quantum Inc.

Condensed Consolidated Notes to the Financial Statements (Unaudited) (continued)

For the period ended 31 March 2023

 

7.    Reserves

 

Share premium

 

Includes the difference in price between the par value of shares, and the total price the Group received for those shares, net of expenses.

 

Foreign currency translation reserve

 

Includes other comprehensive income relating to the translation of subsidiaries into the presentational currency of the group.

 

Share based payment reserve

 

Cumulative charges in respect of share options issued.

 

Retained earnings

 

Includes cumulative profit and loss and all other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.

 

Other reserves

 

Other reserve includes the IFRS 2 deemed acquisition cost and other reserves assumed as part of the reverse acquisition.

 

8.    Post balance sheet events

 

On April 4, 2023 Virgin Orbit LLC (‘Virgin Orbit’) filed for Chapter 11 bankruptcy protection and Arqit Limited was listed as the largest creditor. On May 24, 2023 it was announced that Virgin Orbit has shut down operations. An impairment provision has been made for the balances outstanding with Virgin Orbit, with the related expenses recorded in the Statement of Other Comprehensive Income.

 

9