Document and Entity Information
Document and Entity Information | 12 Months Ended |
Sep. 30, 2021shares | |
Entity Registrant Name | ARQIT QUANTUM INC. |
Entity Central Index Key | 0001859690 |
Document Type | 20-F |
Document Period End Date | Sep. 30, 2021 |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-40777 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 1st Floor, 3 More London Riverside |
Entity Address, City or Town | London |
Entity Address, Postal Zip Code | SE1 2RE |
Entity Address, Country | GB |
Current Fiscal Year End Date | --09-30 |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Document Accounting Standard | International Financial Reporting Standards |
Entity Shell Company | false |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Business Contact [Member] | |
Contact Personnel Name | David Williams |
Entity Address, Address Line One | 1st Floor, 3 More London Riverside |
Entity Address, City or Town | London |
Entity Address, Postal Zip Code | SE1 2RE |
Entity Address, Country | GB |
Ordinary shares | |
Title of 12(b) Security | Ordinary shares |
Trading Symbol | ARQQ |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 110,073,430 |
Warrants | |
Title of 12(b) Security | Warrants |
Trading Symbol | ARQQW |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 14,891,640 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statement of Comprehensive Income | |||
Revenue | $ 47,910 | ||
Other operating income | $ 1,250,056 | $ 1,963,670 | |
Administrative expenses | (887,995) | (14,559,321) | (2,772,642) |
Reverse acquisition expense | (155,459,939) | ||
Nasdaq listing expenses | (2,589,611) | ||
Operating (loss)/profit | 362,061 | (172,560,961) | (808,972) |
Fair value movement on loss in warrant valuation | (98,090,070) | ||
Finance costs | (88,466) | (1,078,070) | (392,783) |
Finance income | 510,252 | 64,902 | |
(Loss)/profit before tax | 783,847 | (271,729,101) | (1,136,853) |
Income tax credit | 253,718 | 568,534 | |
(Loss)/profit for the financial year attributable to equity holders | 1,037,565 | (271,729,101) | (568,319) |
Items that may be reclassified to profit or loss | |||
Currency translation differences | (38,897) | 384,664 | 52,614 |
Total comprehensive loss for the year attributable to equity holders | $ 998,668 | $ (271,344,437) | $ (515,705) |
Basic and diluted earnings per ordinary share from continuing operations attributable to equity holders | $ 0.0175 | $ (3.9769) | $ (0.0096) |
Consolidated Statement of Finan
Consolidated Statement of Financial Position | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Non-current assets | |||
Property, plant and equipment | $ 198,848 | $ 26,774 | $ 5,084 |
Intangible assets | 18,235,034 | 8,776,530 | 4,047,138 |
Fixed asset investments | 33,685 | 32,301 | |
Other receivables | 5,000,000 | ||
Total non-current assets | 23,467,567 | 8,835,605 | 4,052,222 |
Current assets | |||
Trade and other receivables | 3,292,310 | 280,590 | 897,425 |
Cash and cash equivalents | 86,965,789 | 194,602 | 4,226,524 |
Total current assets | 90,258,099 | 475,192 | 5,123,949 |
Total assets | 113,725,666 | 9,310,797 | 9,176,171 |
Current liabilities | |||
Trade and other payables | 17,068,656 | 2,385,777 | 3,798,286 |
Borrowings | 5,459,972 | ||
Total current liabilities | 17,068,656 | 7,845,749 | 3,798,286 |
Non-current liabilities | |||
Trade and other payables | 2,459,413 | 534,074 | 206,696 |
Borrowings | 3,297,468 | ||
Deferred tax | 550,718 | ||
Warrants liability | 128,038,432 | ||
Total non-current liabilities | 130,497,845 | 534,074 | 4,054,882 |
Total liabilities | 147,566,501 | 8,379,823 | 7,853,168 |
Net (liabilities)/assets | (33,840,835) | 930,974 | 1,323,003 |
EQUITY | |||
Share capital | 11,007 | 158 | 158 |
Share premium | 70,999,290 | ||
Convertible loan notes treated as equity | 1,411,034 | 1,411,034 | |
Other reserve | 166,804,775 | ||
Foreign currency translation reserve | 255,212 | (129,452) | (182,066) |
Share-based payment reserve | 303,476 | 134,728 | 11,052 |
Retained earnings | (272,214,595) | (485,494) | 82,825 |
Total Equity | $ (33,840,835) | $ 930,974 | $ 1,323,003 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) | Share CapitalRestated total equity | Share Capital | Share premium | CLNs treated as equityRestated total equity | CLNs treated as equity | Other Reserves | Foreign currency translation reserveRestated total equity | Foreign currency translation reserve | Share option reserveRestated total equity | Share option reserve | Retained EarningsRestated total equity | Retained Earnings | Restated total equity | Total |
Balance at the beginning at Dec. 31, 2018 | $ 158 | $ 1,411,034 | $ (143,169) | $ (954,740) | $ 313,283 | |||||||||
Profit (loss) for the period | 1,037,565 | 1,037,565 | ||||||||||||
Other comprehensive income | (38,897) | (38,897) | ||||||||||||
Total comprehensive income | (38,897) | 1,037,565 | 998,668 | |||||||||||
Transactions with owners in their capacity as owners: | ||||||||||||||
Share option charge | $ 11,052 | 11,052 | ||||||||||||
Balance at the end attributable to owners of the company at Sep. 30, 2019 | $ 158 | 158 | $ 1,411,034 | 1,411,034 | $ (182,066) | (182,066) | $ 11,052 | 11,052 | $ 82,825 | 82,825 | $ 1,323,003 | 1,323,003 | ||
Profit (loss) for the period | (568,319) | (568,319) | ||||||||||||
Other comprehensive income | 52,614 | 52,614 | ||||||||||||
Total comprehensive income | 52,614 | (568,319) | (515,705) | |||||||||||
Transactions with owners in their capacity as owners: | ||||||||||||||
Share option charge | 123,676 | 123,676 | ||||||||||||
Balance at the end attributable to owners of the company at Sep. 30, 2020 | $ 158 | 158 | $ 1,411,034 | 1,411,034 | $ (129,452) | (129,452) | $ 134,728 | 134,728 | $ (485,494) | (485,494) | $ 930,974 | 930,974 | ||
Profit (loss) for the period | (271,729,101) | (271,729,101) | ||||||||||||
Other comprehensive income | 384,664 | 384,664 | ||||||||||||
Total comprehensive income | 384,664 | (271,729,101) | (271,344,437) | |||||||||||
Transactions with owners in their capacity as owners: | ||||||||||||||
Share option charge | 168,748 | 168,748 | ||||||||||||
Conversion of convertible loan notes | 98 | $ 20,784,802 | (1,411,034) | 19,373,866 | ||||||||||
Effect of the capital reorganisation | 10,751 | 50,214,488 | $ 166,804,775 | 217,030,014 | ||||||||||
Balance at the end attributable to owners of the company at Sep. 30, 2021 | 11,007 | 70,999,290 | 166,804,775 | $ 255,212 | 303,476 | $ (272,214,595) | (33,840,835) | |||||||
Transactions with owners in their capacity as owners: | ||||||||||||||
Transactions with owners in their capacity as owners | $ 10,849 | $ 70,999,290 | $ (1,411,034) | $ 166,804,775 | $ 168,748 | $ 236,572,628 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | |||
Cash (used in)/generated from operations | $ 3,948,953 | $ (24,303,586) | $ (2,139,679) |
Movement on foreign exchange | (117,673) | 268,814 | (27,689) |
Tax received | 833,301 | ||
Net cash (used in)/generated from operating activities | 3,831,280 | (24,034,772) | (1,334,067) |
Cash flows from investing activities | |||
Capital expenditure on property, plant and equipment | (5,383) | (222,654) | (26,306) |
Capital expenditure on intangibles | (3,616,538) | (9,082,456) | (4,544,397) |
Net cash (used in) investing activities | (3,621,921) | (9,305,110) | (4,570,703) |
Cash flows from financing activities | |||
Proceeds from issue of convertible loans | 3,706,686 | 14,147,700 | 646,020 |
Proceeds from borrowing | 5,041,971 | 1,033,632 | |
Repayments of borrowing | (6,119,891) | ||
Funds acquired on reverse acquisition | 107,035,478 | ||
Net cash generated from financing activities | 3,706,686 | 120,105,258 | 1,679,652 |
Foreign exchange on cash and cash equivalents | 5,811 | 193,196 | |
Net (decrease)/increase in cash and cash equivalents | 3,916,045 | 86,765,376 | (4,225,118) |
Cash and cash equivalents at beginning of period | 310,479 | 194,602 | 4,226,524 |
Cash and cash equivalents at end of period | $ 4,226,524 | $ 86,965,789 | $ 194,602 |
General information and signifi
General information and significant accounting policies | 12 Months Ended |
Sep. 30, 2021 | |
General information and significant accounting policies | |
General information and significant accounting policies | 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. The principal activity of the Group is provision of cybersecurity services via satellite and terrestrial platforms. The Company is an “emerging growth company,” as defined in the Securities Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and reduced disclosure obligations regarding executive compensation. Basis of preparation These financial statements have been prepared in accordance with international accounting standards as issued by the IASB. The financial statements are prepared on the historical cost basis, other than investor warrants held at fair value through profit or loss, and the accounting policies set out below have been consistently applied. The preparation of the 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. On September 3, 2021, the Company acquired Arqit Limited through a share for share exchange. As this is a reverse acquisition, Arqit Limited becomes the accounting acquirer who acquired the assets and liabilities in the Company at fair value. As the acquisition is not a business combination (refer to note 9), the transaction falls within IFRS 2 ‘Share-based Payments’. In line with the IFRIC guidance, the transaction is accounted for as follows: a. The assets and liabilities of the accounting acquirer are recognised and measured in the consolidated financial statements at their pre-combination carrying amounts. b. The identifiable net assets of the Company, as legal acquirer, is recognised in accordance with paragraph 10 of IFRS 2 at their fair value at grant date. A reverse acquisition does not constitute a business combination. The Company has become the legal parent and is required to apply IFRS 10 and prepare consolidated financial statements. These financial statements have been prepared using the reverse acquisition methodology, but rather than recognising goodwill, the difference between the equity given up by the Arqit Limited shareholders and the share of the fair value of net assets acquired is charged to the Consolidated Statement of Comprehensive Income as a share-based payment, and represents in substance the cost of acquiring a Nasdaq listing. Basis of consolidation The Group financial statements consolidate the Company’s financial statements of Arqit Quantum Inc. and its subsidiaries (the “Group”) following the business combination which took place on September 3, 2021 (see note 9). Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The subsidiaries are fully consolidated from the date on which control is transferred to the Group and deconsolidated from the date that control ceases. 1. General information and significant accounting policies (continued) The financial statements of the subsidiaries are prepared for the same financial year as the parent company, applying consistent accounting policies throughout the Group. Inter-company balances and transactions, including unrealised profits or losses are eliminated on consolidation. Comparative information The Group’s accounting treatment for the business combination, as described in full within note 9 to these financial statements, is to account for a reverse acquisition along with a share based payment. Therefore, the comparative figures for September 30, 2020 and September 30, 2020 are those of the legal subsidiary, Arqit Limited, and do not include the results of the Company, which is in accordance with reverse acquisition accounting in IFRS 3 Business Combinations. The Arqit Limited financial statements have been translated into USD in accordance with IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’. This standard requires that assets and liabilities be translated using the exchange rate at year end, and income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions (i.e. the average rate for the year). The foreign exchange differences on translation of Arqit Limited are recognised in other comprehensive income. Going Concern The directors believe that it is appropriate to prepare the financial statements on the going concern basis. In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the current and future position of the Company. As part of their assessment, the Directors have also taken into account the ability to raise additional funding whilst maintaining sufficient cash resources to meet all commitments. Following the close of the De-SPAC transaction in September 2021 the Company had $8 Based on the above, the Directors have a reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future, such that it will be able to realise its assets and discharge its liabilities in the normal course of business for a period of at least 12 months from the date of signing these financial statements, and beyond. Therefore, the financial statements are prepared on the going concern basis. Standards, interpretations and amendments to published standards The Group has adopted the following standards and amendments to standards for the first time for their annual reporting period commencing 1 October 2020, none of which had a material impact : ● Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform ● IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment – Definition of Material) ● IFRS 3 Business Combinations (Amendment – Definition of Business) ● Revised Conceptual Framework for Financial Reporting The Group has not early adopted the following new and amended standards that have been issued but are not yet effective: ● Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022); 1. General information and significant accounting policies (continued) ● Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) (effective for periods commencing on or after 1 January 2022); ● Amendments to IAS 1: Presentation of Financial Statements – Classification of Liabilities as Current or Non-current (effective for periods commencing on or after 1 January 2023); ● Provisions, Contingent Liabilities and Contingent Assets (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022); ● Amendments to IAS 1: Presentation of Financial Statements – Disclosure of Accounting Policies (effective for periods commencing on or after 1 January 2022); ● Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates (effective for periods commencing on or after 1 January 2022); ● Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41) (effective for periods commencing on or after 1 January 2022); and ● References to Conceptual Framework (Amendments to IFRS 3) (effective for periods commencing on or after 1 January 2022). The directors of the Company anticipate that the application of all new and amended standards will have no material impact on the future results of the Group in the foreseeable future. Operating Segments The Directors consider the Group to operate within one operating segment, being the provision of cybersecurity services via satellite and terrestrial platforms. Government grants Government grants are recognised only when there is reasonable assurance that (a) the entity will comply with any conditions attached to the grant and (b) the grant will be received. Grants related to research and development are included in non-current or current liabilities as deferred income and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. The grants will be systematically amortised to profit or loss over a period matching the useful life of the acquired asset. Intangible assets - Research and development expenditure Research costs are expensed through the income statement as they are incurred. Under IAS 38, development costs are only capitalised after technical and commercial feasibility of the asset for sale or use have been established. The Company must intend and be able to complete the asset and either use it or sell it and be able to demonstrate how the asset will generate future economic benefit. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. Intangible assets not yet subject to amortisation are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. An impairment loss is recognised for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. 1. General information and significant accounting policies (continued) Current and deferred income tax The current income tax expense or credit is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the Company operates and generates taxable income, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Management periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The research and development (“R&D”) tax credit is calculated using the current rules as prescribed by HMRC. The estimation is based on the actual UK R&D projects that qualify for the scheme that have been carried out in the period. This is treated on a accruals basis when the R&D tax credit has been calculated for the relevant period. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Revenue and other operating income The Company adopts IFRS 15 ‘Revenue from contracts with customers’ for revenue including other income which is recognised in accordance with this standard. Revenue from services related to the Quantum Cloud product has been recognised in the year once the service has been performed and accepted by the customer. Other income represents income derived from contracts for the provision of goods and services by the Company to customers in exchange for consideration in the ordinary course of the Company’s activities. Other operating income is recognised at the point in time when the relevant performance obligation is satisfied. There are no contracts for other operating income whose performance obligations are satisfied over time. Revenue is measured at the transaction price, being the fair value of the consideration received or receivable. Performance obligations Upon approval by the parties to a contract, the contract is assessed to identify each promise to transfer either a distinct good or service or a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. Goods and services are distinct and accounted for as separate performance obligations in the contract if the customer can benefit from them either on their own or together with other resources that are readily available to the customer and they are separately identifiable in the contract. Other operating income is recognised on meeting the design milestones and acceptance by the contracting party of the specified deliverables within the contract. Each milestone is considered to be a separate performance obligation. 1. General information and significant accounting policies (continued) Transaction price At the start of the contract, the total transaction price is estimated as the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods and services to the customer, excluding sales taxes. The transaction price does not include estimates of consideration resulting from contract modifications, such as change orders, until they have been approved by the parties to the contract. The total transaction price is allocated to the performance obligations identified in the contract in proportion to their relative standalone selling prices. Given the bespoke nature of many of the Company’s products and services, which are designed and/or manufactured under contract to the customer’s individual specifications, there are sometimes no observable standalone selling prices. Instead, standalone selling prices are typically estimated based on expected costs. Contract liabilities Contract liabilities represent the obligation to transfer goods or services to a customer for which consideration has been received, or consideration is due, from the customer. Accounting for Joint Ventures An entity is treated as a joint venture where the Company is a party to a contractual agreement with one or more parties from outside the Company to undertake an economic activity that is subject to joint control. This is initially recognised as an investment at cost and subsequently accounted for using the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures. Financial instruments A financial instrument is any contract that gives rise to a financial asset of on entity and a financial liability or equity instrument of another. (a) Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income, or fair value through profit or loss. The classification of financial assets at initial recognition that are debt instruments depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. The Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. 1. General information and significant accounting policies (continued) Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: ● Financial assets at amortised cost (debt instruments) ● Financial assets at fair value through other comprehensive income with recycling of cumulative gains and losses (debt instruments) ● Financial assets designated at fair value through other comprehensive income with no recycling of cumulative gains and losses upon derecognition (equity instruments) ● Financial assets at fair value through profit or loss Financial assets at amortised cost (debt instruments) This category is the most relevant to the Company. The Company measures financial assets at amortised cost if both of the following conditions are met: ● The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and ● The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment. Interest received is recognised as part of finance income in the statement of profit or loss and other comprehensive income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Company’s financial assets at amortised cost include trade receivables (not subject to provisional pricing) and other receivables. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e., removed from the Company’s consolidated statement of financial position) when: ● The rights to receive cash flows from the asset have expired; or ● The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Impairment of financial assets The Company recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value. For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Company applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Company does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date. 1. General information and significant accounting policies (continued) The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity. At each reporting date, the Company assesses whether financial assets carried at amortised cost are impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. (b) Financial liabilities Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other payables and loans. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income. Loans and borrowings and trade and other payables After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of comprehensive income. This category generally applies to trade and other payables. Derecognition A financial liability is derecognised when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income. 1. General information and significant accounting policies (continued) Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised costs. Any difference between the proceeds (net of transaction costs) and the redemption value are recognised in the income statement over the period of the borrowings using the effective interest rate method. Borrowing costs are expensed in the period in which they are incurred. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Convertible loan notes Convertible loan notes are assessed on inception and classified as either a liability, equity or a compound financial instrument in accordance with IAS 32. When a convertible loan note is assessed to be wholly equity it is recognised immediately in other reserves. When a convertible loan note is assessed a liability, it is treated as a hybrid instrument containing a host debt contract and an embedded derivative liability (written call option over own shares). The embedded derivative is measured at fair value with changes in fair value recognised in profit or loss. Should it be concluded that the equity component of the combined instrument may be sufficiently significant to preclude it from obtaining a reliable estimate of the fair value of the entire instrument, the combined instrument is measured at cost less impairment. When a convertible loan note is assessed as a compound financial instrument, the net proceeds received from the issue of convertible bonds are split between a liability element and an equity component at the date of issue. The fair value of the liability component is estimated using the prevailing market interest rate for similar nonconvertible debt. The difference between the proceeds of issue of the convertible bonds and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the Company, is included in equity and is not remeasured. The liability component is carried at amortised cost. Any difference between the carrying amount of the financial liability that has been extinguished and the consideration paid is recognised in profit or loss as other income or finance costs. As per note 15, the convertible loan note B and Future Fund liability converted to equity. The interest expense on the liability component is calculated by applying the prevailing market interest rate, at the time of issue, for similar non-convertible debt to the liability component of the instrument. The difference between this amount and the interest paid is added to the carrying amount of the convertible bonds. Share based payments Where share options are awarded to employees, the fair value of the options at grant date is charged to the Statement of Comprehensive Income over the vesting period. Nonmarket vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options or warrants that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition. The fair value of the award also considers non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Statement of Comprehensive Income over the remaining vesting period. 1. General information and significant accounting policies (continued) Where equity instruments are granted to persons other than employees, the Statement of Comprehensive Income is charged with fair value of goods and services received. The share option charge was calculated using the Black Scholes Option pricing model which requires the use of various estimates and assumptions (note 18). When share options lapse, any amounts credited to the share-based payments reserve are released to the retained earnings reserve. Warrants Warrants are classified as derivatives and are initially recognised at their fair value on the date of inception of the contract. The Company’s warrants are subsequently re-measured at each reporting date with changes in fair value recognised in profit or loss. The warrants are valued using the Binomial Option Pricing Model. As the fair value of the warrants fluctuate with movement in the underlying Arqit Quantum Inc share price, these warrants are considered a derivative as a variable amount of cash will be settled on exercise. Foreign currencies Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The functional currency of Arqit Quantum Inc. is U.S. dollars. The Group financial statements are presented in U.S Dollars which is considered to be the Group’s presentation currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Group companies The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated as follows: a) assets and liabilities at the balance sheet date are translated at the closing rate as at that balance sheet date; b) income and expenses for each income statement are translated at average exchange rates; and c) all resulting exchange differences are recognised in other comprehensive income Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks and all other cash amounts with maturities of three months or less. Property, plant and equipment Property, plant and equipment are stated at historic cost less accumulated depreciation and impairment losses, if any. 1. General information and significant accounting policies (continued) Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are between three The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and years of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Costs also comprise the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group are obligated to incur when the asset is acquired, if applicable. The Group as lessee has elected not to apply the requirements under IFRS 16 to short-term leases held. The lease payments associated with those leases are recognised as an expense on a straight-line basis over the lease term. Share capital Ordinary shares are classified as equity. Any incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Financial risk management The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. Risk management is overseen by the Board of Directors. The Board provides written principles for overall risk management, as well as w |
Revenue
Revenue | 12 Months Ended |
Sep. 30, 2021 | |
Revenue | |
Revenue | 2. Revenue Nine months Year ended 30 Year ended 30 ended 30 September September September 2021 2020 2019 $ $ $ Quantum Cloud – provision of services 47,910 — — All revenue was earnt within the United Kingdom to a total of 1 customer and is recognised over time. |
Other operating income
Other operating income | 12 Months Ended |
Sep. 30, 2021 | |
Other operating income | |
Other operating income | 3. Other operating income Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ European Space Agency (ESA) Contract — 1,963,670 1,250,056 |
Expenses by Nature
Expenses by Nature | 12 Months Ended |
Sep. 30, 2021 | |
Expenses by Nature | |
Expenses by Nature | 4. Expenses by Nature Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ Employee benefit expense and other staff costs 10,935,570 3,090,091 455,661 Capitalised within intangible assets (3,478,034) (1,533,915) (417,158) Legal and professional 4,733,186 424,626 185,217 Foreign exchange 623,184 (9,854) 60,247 Property costs 187,739 158,568 58,261 Share option charge 165,570 121,597 11,392 Depreciation 52,550 4,787 308 Other expenses 1,339,556 516,742 534,067 Total administrative expenses 14,559,321 2,772,642 887,995 |
Finance costs
Finance costs | 12 Months Ended |
Sep. 30, 2021 | |
Finance costs | |
Finance costs | 5. Finance costs Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ Interest payable on convertible loan notes 1,078,070 392,783 88,466 |
Finance income
Finance income | 12 Months Ended |
Sep. 30, 2021 | |
Finance income | |
Finance income | 6. Finance income Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ Initial recognition difference of convertible loan notes — 64,902 510,252 |
Income tax
Income tax | 12 Months Ended |
Sep. 30, 2021 | |
Income tax | |
Income tax | 7. Income tax 2021 2020 2019 $ $ $ The tax (charge)/credit on the profit/(loss) on ordinary activities for the year was as follows: Current tax Current tax credit/(charge) – R&D — — 821,350 Deferred Tax — 568,534 (567,632) Income tax credit — 568,534 253,718 7. Income tax (continued) Factors affecting tax charge/credit for the year The tax assessed for the period is higher than (2020 - lower than; 2019 - lower than) the standard rate of corporation tax in the United Kingdom of 19% (2020 - 19%; 2019 - 19%). The differences are explained below: 2021 2020 2019 $ $ $ (Loss) / Profit from continuing operations (271,729,101) (1,136,853) 783,847 Tax at the applicable rate of 19% (2020 – 19%, 2019 – 19%) (51,628,512) (216,002) 148,931 Tax effect of income and expenses that are not taxable / deductible in determining profit Disallowable expenditure 754,359 24,013 60,122 Fixed asset timing differences — (852,403) (708,247) Unutilised losses 3,103,171 1,420,938 140,615 Tax losses surrendered for R&D credit — — (209,053) Unutilised tax losses on which deferred tax is not recognised 1,990,522 191,988 — R&D tax credit 33,251 — 821,350 Additional deduction for R&D (1,104,676) — — Remeasurement of R&D (1,322,616) — — Fair valuation of warrants 18,637,113 — — Reverse acquisition expense 29,537,388 — — Total tax credit — 568,534 253,718 |
Earnings per share
Earnings per share | 12 Months Ended |
Sep. 30, 2021 | |
Earnings per share | |
Earnings per share | 8. Earnings per share Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to shareholders by the weighted average number of ordinary shares in issue during the period. Weighted average number of Per share Basic EPS Earnings shares amount $ $ 2021 (271,729,101) 68,326,365 (3.9769) 2020 (568,319) 59,260,796 (0.0096) 2019 1,037,565 59,260,796 0.0175 8. Earnings per share (continued) Prior to the reverse recapitalisation, the EPS of the combined company is presented on the basis of Arqit Limited shares outstanding, adjusted using the share exchange ratio of 46.06. Diluted EPS is equal to basic EPS in 2019 as the potentially diluted instruments were not in the money and therefore not dilutive. Diluted EPS is not relevant for 2020 and 2021 due to the loss for the year. |
Business combination agreement
Business combination agreement | 12 Months Ended |
Sep. 30, 2021 | |
Business combination agreement | |
Business combination agreement | 9. Business combination agreement On May 12, 2021, Centricus Acquisition Corp. (“Centricus”/ “CAC”), Arqit Limited (“AL”), and the shareholders of AL entered into a Business Combination Agreement whereby: (i) on September 2, 2021, Centricus merged with and into Arqit Quantum Inc (“the Company” / “AQI”), with the Company surviving the merger, and the security holders of Centricus became security holders of the Company, and (ii) on September 3, 2021, the Company acquired all of the issued and outstanding share capital of AL from the shareholders of AL in exchange for ordinary shares of the Company, such that AL is a direct wholly owned subsidiary of the Company. In consideration for the merger between the Company and Centricus, each Centricus shareholder received one ordinary share and one warrant of the Company for each ordinary share and warrant they held in Centricus, respectively. Each ordinary share of AL was acquired by the Company in exchange for 46.06 ordinary shares of AQI. Prior to the merger of the Company with Centricus, Heritage Assets SCSp purchased 2,200,000 Class A Ordinary Shares of Centricus in open-market transactions for a cash consideration of $22,000,000 and, as an incentive to Heritage Assets SCSp for such purchase, Centricus and certain shareholders of AL transferred to Heritage Assets SCSp an aggregate of 1,825,096 Ordinary Shares in the Company as part of the recapitalisation. The merger of the Company and Centricus does not meet the definition of an IFRS 3 business combination. At the date of the merger, Centricus did not meet the definition of a business under IFRS 3 and as such the merger constitutes a reverse acquisition as opposed to a business combination. Concurrently with the execution of the Business Combination Agreement, the Company and Centricus entered into subscription agreements with PIPE Investors who agreed to subscribe for and purchase an aggregate of 7,100,000 ordinary shares in the Company at $10.00 per share for gross proceeds of $71,000,000 . After market close on September 3, 2021, Centricus’ ordinary shares, units and warrants ceased trading on The Nasdaq Stock Market LLC, and beginning on September 7, 2021, the Company’s ordinary shares and warrants began trading on Nasdaq under the symbols "ARQQ" and “ARQQW”, respectively. Please see note 17 for further detail on the valuation of the warrants. 9. Business combination agreement (continued) The acquisition of the share capital of AL by the Company whereby AL becomes a wholly owned subsidiary of the Company, constitutes a reverse acquisition as the previous shareholders of AL own a substantial majority of the Ordinary Shares of the Company. As the Company previously had no investment activities and was engaged in acquiring AL and raising equity financing to provide the required funding for the operations of the acquisition and re-listing on the NASDAQ exchange, it did not meet the definition of a business as prescribed in IFRS 3. Accordingly, this reverse acquisition does not constitute a business combination and is accounted for in accordance with IFRS 2 Share-based Payments and associated IFRIC guidance. Although, the reverse acquisition is not a business combination, the Company has become a legal parent and is required to apply IFRS 10 and prepare consolidated financial statements. The Directors have prepared these financial statements using the reverse acquisition methodology, but rather than recognising goodwill, the difference between the equity value given up by the AL shareholders and the share of the fair value of net assets gained by the AL shareholders is charged to the statement of profit or loss as a share based payment charge on reverse acquisition (the deemed acquisition cost), and represents in substance, the cost of acquiring a NASDAQ quoted listing. In accordance with reverse acquisition accounting principles, these consolidated financial statements represent a continuation of the financial statements of AL and include: a) The assets and liabilities of AL at their pre-acquisition carrying amounts and the results for both years; and b) The assets and liabilities of the Company as at September 3,2021, and its results from September 3, 2021 to September 30 2021. Included in group profit/ (loss) for the year is a loss of $651,973 generated by the Company for the period September 3, 2021 to September 30, 2021. On September 3, 2021 the Company issued 90,000,000 ordinary shares to acquire 1,954,174 shares of AL. However, as AL is determined to be the accounting acquirer, the fair value of the shares deemed to have been issued by AL to acquire the Company is determined at $223,517,945. The fair value is based on an enterprise valuation of Arqit Limited using a market approach. The number of shares deemed issued by Arqit Limited to Arqit Quantum Inc. is 485,326 and represents the number of shares that would need to be issued to acquire the same percentage equity interest in the combined entity that results from the reverse acquisition. The fair value of Arqit Limited shares deemed issued at September 3, 2021 is determined using the following level 3 fair value inputs: Valuation Fair value technique Unobservable input Range 485,326 Ordinary Shares in Arqit Limited deemed issues in reverse acquisition $ 223,517,945 Market comparable companies Revenue multiple 12-17 x EBITDA multiple 20-30 x uFCF multiple 20-25 x Revenue growth rate (CAGR) 9.1 % Discount 20 % The fair value of net assets of Arqit Quantum Inc at September 3, 2021 was $68,049,006 as follows: $ Cash and cash equivalents 107,035,478 Trade and other receivables 1,961,889 Warrant liabilities (29,948,361) Trade and other payables (11,000,000) Net assets 68,049,006 9. Business combination agreement (continued) Due to the short-term nature of cash and cash equivalents and trade and other payables, the carrying value approximates the fair value at September 3, 2021. The fair value of the Company warrants is based on a binomial tree valuation approach, reflecting the contractual exercise period, warrant price, redemption provisions, and prevailing market data as at the Valuation Dates. This technique is used based on the terms of the warrants. In the case of the Private Warrants, a discount for lack of marketability (“DLOM”) is applied since these may only be transferred to a specified group of permitted transferees, therefore limiting the depth of the market. The difference between the deemed cost and the fair value of the net assets acquired therefore amounts to $155,459,939 and has been expensed in accordance with IFRS 2 as the deemed reverse acquisition cost to profit or loss. Any transaction costs associated with the issuing of shares are deducted directly from equity. Mixed costs that relate to both share issuance and listing on the stock exchange are apportioned based on the number of new shares issued to the total shares. $16,914,223 was directly attributable to the share issuance and deducted from equity. Other reserves arise as a result of the reverse acquisition: $ Pre-acquisition losses of AQI (18,237,443) Pre-acquisition reserves of AQI 26,285,329 AL share capital at acquisition 269 AL share premium at acquisition 20,210,904 Reverse acquisition expense 155,459,939 Transaction costs (16,914,223) 166,804,775 Included in Group profit/ (loss) for the year is a loss of $651,973 generated by the Company (accounting acquiree) for the period September 3, 2021 to September 30, 2021. As additional consideration for the shares in AL, earnout shares may be granted if an earnout condition is met. The earnout condition being if at any time during the three years following the share acquisition closing date, the closing price of the ordinary shares of the Company during such period is equal to or exceeds $12.50 per share for any twenty thirty The exceptional costs within the Consolidated Statement of Comprehensive Income for the year ended 30 September 2021 comprised: $ Reverse acquisition expense 155,459,939 Other listing expenses 2,589,611 158,049,550 |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Sep. 30, 2021 | |
Property, plant and equipment | |
Property, plant and equipment | 10. Property, plant and equipment Computer equipment $ Cost At 1 January 2019 — Additions 5,383 Foreign exchange on translation — At 30 September 2019 5,383 At 1 October 2019 5,383 Additions 26,306 Foreign exchange on translation 246 At 30 September 2020 31,935 At 1 October 2020 31,935 Additions 222,654 Foreign exchange on translation 1,369 At 30 September 2021 255,958 Depreciation At 1 January 2019 — Charge (308) Foreign exchange on translation 9 At 30 September 2019 (299) At 1 October 2019 (299) Charge (4,787) Foreign exchange on translation (75) At 30 September 2020 (5,161) At 1 October 2020 (5,161) Charge (52,550) Foreign exchange on translation 601 At 30 September 2021 (57,110) Net Book Value At 30 September 2021 198,848 At 30 September 2020 26,774 At 30 September 2019 5,084 |
Intangible fixed assets
Intangible fixed assets | 12 Months Ended |
Sep. 30, 2021 | |
Intangible fixed assets | |
Intangible fixed assets | 11. Intangible fixed assets Development Costs $ Cost At 1 January 2019 441,856 Additions 3,616,538 Foreign exchange on translation (11,256) At 30 September 2019 4,047,138 Additions 4,554,397 Foreign exchange on translation 184,995 At 30 September 2020 8,776,530 Additions 9,082,456 Foreign exchange on translation 376,048 At 30 September 2021 18,235,034 Amortisation At 1 January 2019 — Charge — At 30 September 2019 — Charge — At 30 September 2020 — Charge — At 30 September 2021 — Net Book Value At 30 September 2021 18,235,034 At 30 September 2020 8,776,530 At 30 September 2019 4,047,138 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. The Group will begin amortisation when the intangible assets are available for use. |
Fixed asset investments
Fixed asset investments | 12 Months Ended |
Sep. 30, 2021 | |
Fixed asset investments | |
Fixed asset investments | 12. Fixed asset investments Investment in Joint Venture $ Cost At 1 January 2019 — Additions — At 30 September 2019 — Additions 32,301 At 30 September 2020 32,301 Additions — Foreign exchange on translation 1,384 At 30 September 2021 33,685 12. Fixed asset investments (continued) Joint venture Quantum Keep Limited is a joint venture of Arqit Limited, which is a 100% owned subsidiary of Arqit Quantum Inc.. The registered office is One Fleet Place, London, England, EC4M 7WS. Arqit Ltd jointly holds 50% of shares for the entity. The nature of Quantum Keep Limited’s activities is that of business and domestic software development. Quantum Keep Limited was incorporated on 12 August 2020 with Arqit Ltd. taking a 50% investment in incorporation. Quantum Keep Limited has no activity relating to continuing or discontinued operations within the year. There was no total comprehensive income. Subsidiaries Details of the company’s subsidiaries at 30 September 2021 are as follows: Name of undertaking Registered office Domicile % held Arqit Limited 1st Floor, 3 More London Riverside, More London Place, London, England, SE1 2RE U.K. 100 Arqit Inc. 1209 Orange Street, Wilmington, County of Newcastle, Delaware 19801 U.S. 100 Arqit LLC 1209 Orange Street, Wilmington, County of Newcastle, Delaware 19801 U.S. 100 |
Trade and other receivables
Trade and other receivables | 12 Months Ended |
Sep. 30, 2021 | |
Trade and other receivables. | |
Trade and other receivables | 13. Trade and other receivables 2021 2020 2019 $ $ $ Current assets Trade debtors 56,591 — — Other debtors 856,591 151,895 883,522 Prepayments and accrued income 2,379,128 128,695 13,903 Total 3,292,310 280,590 897,425 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. 2021 2020 2019 $ $ $ Non-current Assets Prepayments 5,000,000 — — Total 5,000,000 — — Non-current prepayments comprise the payment of a non-refundable deposit towards the cost of the first satellite launch service, which is expected to be more than one year from the accounting reference date. |
Trade and other payables
Trade and other payables | 12 Months Ended |
Sep. 30, 2021 | |
Trade and other payables | |
Trade and other payables | 14. Trade and other payables 2021 2020 2019 $ $ $ Current liabilities Trade payables 9,748,069 256,830 252,768 Other tax and social security 410,022 331,495 69,578 Other creditors 1,018,816 41,640 2,182 Accruals 3,235,742 195,715 1,981,858 Deferred income 2,656,007 1,560,097 1,491,900 Total 17,068,656 2,385,777 3,798,286 Trade payables and accruals relate to amounts payable at the balance sheet date for services received during the year. 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. Within other creditors, a total of $961,268 (2020: $nil; 2019: $nil) relates to interest owed on convertible loan notes which converted within the year. Deferred income consists of amounts received by the Group under its agreement with ESA. Such amounts are received in stages during each phase of the project and are deferred until fulfilment of each milestone is complete and certified by ESA, following which it is recognised as other operating income within profit or loss. Deferred income of $nil as at 30 September 2019 was recognised in other operating income in the year ended 30 September 2020. Deferred income of $nil as at 30 September 2020 was recognised in other operating income in the year ended 30 September 2021. The deferred income as at 30 September 2021 is expected to be fully recognised in other operating income in the year ending 30 September 2022. 2021 2020 2019 $ $ $ Non-current Liabilities Deferred government grants 2,459,413 534,074 206,696 2,459,413 534,074 206,696 |
Borrowings
Borrowings | 12 Months Ended |
Sep. 30, 2021 | |
Borrowings | |
Borrowings | 15. Borrowings 2021 2020 2019 $ $ $ Current liabilities Bridging finance — 1,033,632 — Convertible loan notes B — 4,426,340 — — 5,459,972 — Non-current Liabilities Convertible loan notes B — — 3,297,468 2021 2020 2019 $ $ $ Fair value Bridging finance — 1,033,632 — Convertible loan notes A (treated as equity) — 1,411,034 1,411,034 Convertible loan notes B — 4,426,340 3,297,468 — 6,871,006 4,708,502 15. Borrowings (continued) Bridging Finance The Group received a £800,000 ($1,033,632) loan from Evolution Equity Capital Limited in the year ended 30 September 2020. The loan attracted interest at 0% and was fully repaid within 2021. Convertible loan notes A (“CLNA”) The Group issued £1,000,000 ($1,411,034) CLNAs on 22 March 2018. The CLNAs have a 0% interest rate and are not redeemable unless otherwise agreed in writing by the Group and Lender. As the CLNA attract no interest and are not redeemable without the written agreement of the Group, the Group has no obligation to deliver cash or another financial asset to the loan holder. Therefore, the CLNAs have been treated as equity in accordance with IAS 32. CLNAs converted to ordinary shares within Arqit Quantum Inc. on 3 September 2021. Convertible loan notes B (“CLNB”) The Group issued £3,000,000 ($3,876,120) CLNBs on 21 June 2019 and issued a further £500,000 ($646,020) in the year ended 30 September 2020. The CLNBs have a 0% interest rate and are redeemable at the principal amount plus an amount equal to 20% of such principal amount at any time on or after the maturity date. The CLNBs are convertible at any time after the maturity date or upon an exit event for a variable number of ordinary shares. As the CLNB are redeemable at the want of the note holders and convert into a variable number of equity instruments, they have been treated as a financial liability in accordance with IAS 32. CLNBs converted to ordinary shares within Arqit Quantum Inc. on 3 September 2021. Future Fund Loan The Group received an unsecured convertible loan of £8,500,000 ($11,452,900) relating to the future fund on 31 October 2020. An additional £2,000,000 ($2,694,800) unsecured convertible loan was received on 5 January 2021. Interest accrues annually at a rate of 8%. The loan matures in 3 years after the date of the agreement. The loan automatically converted into a variable number of shares following the Group’s qualifying financing event. As the unsecured convertible loan notes convert into a variable number of equity instruments, they have been treated as a financial liability in accordance with IAS 32. The future fund loan converted to ordinary shares within Arqit Quantum Inc. on 3 September 2021. A total of $961,268 was owed relating to interest at year end, which is included within other creditors. |
Cash generated from operations
Cash generated from operations | 12 Months Ended |
Sep. 30, 2021 | |
Cash generated from operations | |
Cash generated from operations | 16. Cash generated from operations 2021 2020 2019 $ $ $ (Loss) / profit before tax (271,729,101) (1,136,853) 783,847 Adjustments for: Depreciation 52,550 4,787 308 Change in trade and other receivables (6,131,559) (173,204) (57,608) Change in trade and other payables (1,289,125) (1,283,887) 3,632,800 Share option charge 165,570 121,597 11,392 Finance income — (64,902) (510,252) Interest payable 1,078,070 392,783 88,466 Change in fair value of warrants 98,090,070 — — IFRS 2 adjustment relating to reverse acquisition 155,459,939 — — Cash (used in)/generated from operations (24,303,586) (2,139,679) 3,948,953 Reconciliation of net cashflow to movements in net debt: Opening net cash/(debt) (5,265,371) 929,056 310,479 Convertible facilities received (14,147,700) (1,679,652) (3,706,686) Borrowings received (5,041,971) — — Net interest charge (99,904) 332,124 409,218 Facilities converted 18,863,600 — — Repayment of borrowings 6,119,891 — — Movement in cash 86,765,376 (4,225,118) 3,916,045 Movement on foreign exchange (228,132) 42,468 — Movement in net cash/ (debt) 92,231,160 (6,194,427) 618,577 Closing net cash/(debt) 86,965,789 (5,265,371) 929,056 Composition of closing net cash/(debt) Cash 86,965,789 194,602 4,226,524 Bank loans — (1,033,632) — Convertible loans — (4,426,340) (3,297,468) Net cash/(debt) 86,965,789 (5,265,371) 929,056 |
Warrant Liability
Warrant Liability | 12 Months Ended |
Sep. 30, 2021 | |
Warrant Liability | |
Warrant Liability | 17. Warrant Liability Warrants are classified as financial liabilities at fair value through profit and loss. The warrants are valued at the acquisition date September 3, 2021, for the purpose of determining the deemed acquisition cost. At this date, Arqit Limited (accounting acquiree) acquired all the assets and liabilities of the Company at their fair value. A further valuation of the warrants is performed at September 30, 2021, for the year end. The key terms of the warrants are: Warrant exercise Warrants are exercisable: − In the period from 8 February 2022 (“First Exercise Date”), being the later of one year from the closing of Centricus’ the Initial Public Offering or 30 days after the Business Combination; − to 3 September 2026 (“Expiry Date”), being the date five years after the Business Combination (“the Exercise Period”); and 17. Warrant Liability (continued) − in exchange for one ordinary AQI Share (NASDAQ: ARQQ) (“Share”) for a price of $11.50 (“Exercise Price”). Public warrant redemption The following terms apply to Public Warrants only: − AQI may redeem the Public Warrants in whole and not in part during the Exercise Period for $0.10 per Warrant if the Shares trade at or above $10.00 but less than $18.00 per share for a 20 out of 30 trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and − AQI may redeem the Public Warrants in whole and not in part during the Exercise Period for $0.01 per Warrant if the Shares trade above $18.00 for a 20 out of 30 trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders. Private warrant redemption The following terms apply to Private Warrants only: − AQI may redeem the Private Warrants in whole and not in part during the Exercise Period for $0.10 per Warrant if the Shares trade at or above $10.00 but less than $18.00 per share for a 20 out of 30 trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders. − AQI may not redeem the Private Warrants in whole and not in part if the Shares trade above $18.00; and − Private Warrant holders may not transfer their warrants to any party not defined as a permitted transferee. Exercise after redemption notice The Company is required to provide investors with 30 days’ notice of intention to redeem the Warrants (the “Redemption Notice Period”). During the Redemption Notice Period, warrant holders may elect to exercise their Warrants on a cash basis (i.e. by paying the Exercise Price of $11.50 for a Share). If redemption is triggered by the Shares trading between $10.00 and $18.00 per share, warrant holders may elect for a “Make Whole Exercise” in exchange for a pre-determined number of Shares on a cashless basis. The number of Make Whole shares is determined on the basis of: (1) the 10-day volume-weighted average price of the Shares in the 10 trading days following the notice of redemption, and (2) the number of months elapsed since the business combination. 17. Warrant Liability (continued) IFRS 13 Fair Value prescribes a fair value hierarchy made up of 3 levels of inputs based on the reliability of the underlying data used in establishing the fair value. Public warrant liabilities at fair value through profit and loss are level 2 instruments. Level 2 of the hierarchy includes instruments that are not traded in an active market and is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. Private warrant liabilities are classified as level 3 instruments. The fair value is determined using the fair value of the public warrants, adjusted for a lack of marketability discount because these warrants may only be transferred to a specified group of permitted transferees, therefore limiting the depth of the market (refer to note 24). The key inputs into the Binomial Option Pricing Model were as follows: dividend yield (nil %), volatility (40%) and risk-free rate (0.98%). Volatility was calculated using a set of comparable companies. Number of Number of Fair value of Private Public warrant warrants warrants liability $ At date of acquisition (3 September 2021) 6,266,667 8,624,973 29,948,361 Change in fair value 6,266,667 8,624,973 98,090,071 Balance at 30 September 2021 6,266,667 8,624,973 128,038,432 |
Share-based payments
Share-based payments | 12 Months Ended |
Sep. 30, 2021 | |
Share-based payments | |
Share-based payments | 18. Share-based payments The Group has share option schemes for employees of the Group. Options are exercisable at the price agreed at the time of the issue of the share option. The vesting periods are consistent between employees. Options are typically forfeited if the employee leaves the Group before the options vest. Details of the share options granted during the period are as follows: 2021 2020 2019 Weighted Weighted Weighted Average Average Average Number of Exercise Number of Exercise Number of exercise Share options Price (£) Share options Price (£) Share options Price (£) Outstanding at beginning of period 161,250 0.0001 72,700 0.0001 8,700 0.0001 Granted during the period 55,210 0.0001 88,550 0.0001 64,000 0.0001 Forfeited/lapsed during the period (32,963) 0.0001 — — — — Exercised during the period — — — — — — Outstanding at end of period 183,497 0.0001 161,250 0.0001 72,700 0.0001 Exercisable at end of period 17,167 — — 18. Share-based payments (continued) The options outstanding at 30 September 2021 had a weighted average exercise price of £0.0001 ($0.0001) pence, and a weighted average remaining contractual life of 4 years. Share options were issued within Arqit Limited, and therefore the share price and exercise price have been stated in pound sterling due to this being the currency which the instrument relates to. Volatility is based on management’s best estimate given that no historical share price is available. The inputs into the Black-Scholes model are as follows: 2021 2020 2019 Weighted average share price (£) 3.30 3.30 2.95 Weighted average exercise price (£) 0.0001 0.0001 0.0001 Expected volatility 50 % 50 % 50 % Expected life 5 years 5 years 5 years Risk-free rate 0.1 % 0.1 % 0.1 % Expected dividend yield 0 % 0 % 0 % 2021 2020 2019 $ $ $ Share option charge included in administrative expenses 165,570 121,597 11,392 165,570 121,597 11,392 |
Staff costs and average number
Staff costs and average number of employees | 12 Months Ended |
Sep. 30, 2021 | |
Staff costs and average number of employees | |
Staff costs and average number of employees | 19. Staff costs and average number of employees 2021 2020 2019 $ $ $ The aggregate remuneration comprised: Wages and salaries 9,531,933 2,620,476 377,383 Social security costs 1,238,459 336,076 37,639 Pension costs 165,178 133,539 40,639 Share option charge 165,570 121,597 11,392 11,101,140 3,211,688 467,053 A total of $3,478,034 (2020: $1,533,915; 2019: $417,157) relating to staff costs was capitalised as relating to development costs within intangibles within the year. The average monthly number of professional employees (including executive directors) during the year was 59 (2020 - 16,2019 - 6). Total remuneration for key management personnel for 2021 was $3,330,858 (2020 - $1,258,504; 2019 - $486,764). Total pension contributions of key management personnel totalled $86,062 (2020 - $118,519; 2019 - $40,835) and is included within the total remuneration for key management personnel. A total of 15,000 (2020: 32,500; 2019: 12,500) share options were granted to key management personnel in the year. During the year remuneration payable to directors was as follows: 2021 2020 2019 $ $ $ Directors’ remuneration 1,971,580 1,012,864 486,764 The highest paid Directors remuneration totalled $699,325 (2020: $377,168; 2019: $203,930). |
Deferred Tax
Deferred Tax | 12 Months Ended |
Sep. 30, 2021 | |
Deferred Tax | |
Deferred Tax | 20. Deferred Tax 2021 2020 2019 $ $ $ At the beginning of the period — 550,718 — Movement in the year recognised in profit or loss — (568,534) 567,632 Foreign exchange on translation — (17,816) (16,914) At the end of the year — — 550,718 The deferred tax liability/(asset) is made up as follows: Intangible asset timing differences 4,685,158 1,581,987 — Unrelieved tax losses (4,685,158) (1,581,987) — — — — |
Share capital
Share capital | 12 Months Ended |
Sep. 30, 2021 | |
Share capital | |
Share capital | 21. Share capital The annual financial statements are prepared as a continuation of the financial statements of Arqit Limited, except where equity is adjusted to reflect the legal capital structure of the Company. On September 2, 2021, the Company had 12,973,270 ordinary shares in issue with a par value of $0.0001. Immediately following the above transaction, the Company closed a series of subscription agreements with accredited investors (“PIPE Investors”) for a private placement of 7,100,000 ordinary shares. PIPE financing led to an increase in share premium of $70,999,290. As of September 30, 2021, the total number of ordinary shares of the Company outstanding is 110,073,430 with a par value of $0.0001. Movements in the year in the issued share capital of Arqit Limited and the Company are as follows: Arqit Limited Number of Number of Share capital Share capital ordinary shares deferred shares* £ $ equivalent At 1 October 2020 – par value £0.0001 1,286,600 — 129 158 Conversion of convertible loan notes 710,074 — 71 98 Deferred shares issued (42,500) 42,500 — — Exchanged for shares in the Company in reverse acquisition 1,954,174 42,500 200 256 * Deferred shares are non-redeemable and have no voting rights and no rights to dividends. On a distribution on a winding up, the holders of the shares shall receive a total of £1.00 for the entire class of deferred shares. Arqit Quantum Inc. Number of ordinary Share capital shares $ Inception, April 26, 2021 – par value $1 1 1 Treasury shares (1) (1) Shares issued in merger with Centricus 12,973,430 1,297 Shares issued in exchange for Arqit Limited shares 90,000,000 9,000 Shares issued to PIPE investors 7,100,000 710 September 30, 2021 – par value $0.0001 110,073,430 11,007 |
Retained earnings
Retained earnings | 12 Months Ended |
Sep. 30, 2021 | |
Retained earnings | |
Retained earnings | 22. Retained earnings 2021 2020 2019 $ $ $ At 1 October (485,494) 82,825 (954,740) Profit/(Loss) for the year (271,729,101) (568,319) 1,037,565 Dividends paid — — — At 30 September (272,214,595) (485,494) 82,825 Included in profit / (loss) for the year is a loss of $651,973 generated by the Company (accounting acquiree) for the period September 3, 2021 to September 30,2021. |
Reserves
Reserves | 12 Months Ended |
Sep. 30, 2021 | |
Reserves | |
Reserves | 23. 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. Convertible loan notes treated as equity Included cumulative portion of 1,000,000 £1 convertible A loan notes treated as equity within 2020. This was removed within the current year as the convertible loan notes converted on 3 rd Foreign currency translation reserve Includes other comprehensive income relating to the translation of subsidiaries into the functional 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. |
Financial instruments and fair
Financial instruments and fair value disclosures | 12 Months Ended |
Sep. 30, 2021 | |
Financial instruments and fair value disclosures | |
Financial instruments and fair value disclosures | 24. Financial instruments and fair value disclosures Capital management The Group’s policy is to maintain a strong balance sheet for the business and to have an appropriate funding structure. Shareholders’ equity and long-term debt are used to finance assets under construction. The Group is not subject to any externally imposed capital requirements. 24. Financial instruments and fair value disclosures (continued) Financial assets and financial liabilities Categories of financial assets and financial liabilities are as follows: Financial assets at amortised cost Carrying value Fair value $ 30 September 2021 30 September 2021 Cash and cash equivalents 86,965,789 86,965,789 Trade and other receivables 56,591 56,591 87,022,380 87,022,380 Carrying value Fair value $ 30 September 2020 30 September 2020 Cash and cash equivalents 194,602 194,602 Trade and other receivables 215,835 215,835 410,437 410,437 Carrying value Fair value 30 September 2019 30 September 2019 Cash and cash equivalents 4,226,524 4,226,524 Trade and other receivables 883,522 883,522 5,110,046 5,110,046 The Directors consider the carrying amounts of financial assets and financial liabilities recorded at amortised costs in the consolidated financial statements to approximate their fair value. Financial liabilities at amortised cost Carrying value Fair value $ 30 September 2021 30 September 2021 Trade and other payables 16,658,633 16,658,633 Deferred government grants 2,459,413 2,459,413 19,118,046 19,118,046 Carrying value Fair value $ 30 September 2020 30 September 2020 Trade and other payables 2,054,281 2,054,281 Deferred government grants 534,074 534,074 Bridging finance 1,033,632 1,033,632 Convertible loans 4,426,340 4,426,340 8,048,327 8,048,327 Carrying value Fair value $ 30 September 2019 30 September 2019 Trade and other payables 3,728,707 3,728,707 Deferred government grants 206,696 206,696 Convertible loans 3,297,468 3,297,468 7,232,871 7,232,871 24. Financial instruments and fair value disclosures (continued) The Directors consider the carrying amounts of financial assets and financial liabilities recorded at amortised costs in the financial statements to approximate their fair value. Financial liabilities at fair value through profit or loss IFRS 15 Fair Value prescribes a fair value hierarchy made up of 3 levels of inputs based on the reliability of the underlying data used in establishing the fair value. The fair value of public warrants is determined using level 2 inputs. Level 2 of the hierarchy includes instruments that are not traded in an active market and is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. Private warrants are classified as a level 3 financial instrument. The fair value is determined using the fair value of the public warrants, adjusted for a lack of marketability discount of 7.5% because these warrants may only be transferred to a specified group of permitted transferees, therefore limiting the depth of the market Fair value Fair value Carrying value Level 2 Level 3 30 September 30 September 30 September $ 2021 2021 2021 Warrant liability 128,038,431 75,899,762 52,138,669 128,038,431 75,899,762 52,138,669 Market risk It is, and has been throughout the period under review, the Group’s policy not to use or trade in derivative financial instruments. The Group’s financial instruments comprise its cash and cash equivalents and various items such as trade debtors and creditors that arise directly from its operations. The main purpose of the financial assets and liabilities is to provide finance for the Group’s operations in the period. Interest rate risk management The Group would be exposed to interest rate risk if the Group borrows funds, when required, at variable interest rates. There is currently no exposure to interest rate risk. Credit risk Credit risk is the risk of financial loss where counterparties are not able to meet their obligations. Group policy is that surplus cash, when not used to repay borrowings, is placed on deposit with the Group’s main relationship banks and with other banks or money market funds based on a minimum credit rating of A3/A- and maximum exposure. There is no significant concentration of risk to any single counterparty. Management consider that the credit quality of the various receivables is good in respect of the amounts outstanding and therefore credit risk is considered to be low. There is no significant concentration of risk. The carrying amount of financial assets, as detailed above, represents the Group’s maximum exposure to credit risk at the reporting date assuming that any security held has no value. Having considered the Group’s exposure to bad debts and the probability of default by customers, no expected credit losses have been recognised in accordance with IFRS 9. 24. Financial instruments and fair value disclosures (continued) Foreign Exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to Sterling (“£”) and Euro (“€”). The Group holds sterling, US dollar and euro bank accounts in order to limit its exposure. The Group is also exposed to foreign exchange risk to the extent that its ultimate parent entity has a US dollar functional currency. This is limited to the parent consolidated accounts. The table below summarises the FX exposure on the net monetary position of each group entity against its respective functional currency, expressed in the group’s presentation currency. Year ended 30/09/2021 ’000 /£ Parent — UK subsidiary 23,019 Total 23,019 The reasonable shifts in exchange rates below are based on historic volatility. If the $/£ rates moved by +/- 5.88% then the effect on loss would be as follows: Year ended 30/09/2021 ’000 $ Reasonable shift 5.88 % Total effect on Loss of +ve movements (1,353) Total effect on Loss of -ve movements 1,353 Liquidity risk Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations as they fall due. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows, matching the expected cash flow timings of financial assets and liabilities with the use of cash and cash equivalents, borrowings, overdrafts and committed revolving credit facilities with a minimum of 12 months to maturity. Future borrowing requirements are forecast on a monthly basis and funding headroom is maintained above forecast peak requirements to meet unforeseen events. The maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Group can be required to pay financial liabilities on an undiscounted basis, is as follows: Trade and Deferred 2021 other government $ payables grants Total On demand — — — Within one year 17,068,655 — 17,068,655 More than one year but less than two years — — — More than two year but less than five years — 2,459,413 2,459,413 More than five years — — — 17,068,655 2,459,413 19,528,068 24. Financial instruments and fair value disclosures (continued) Trade and Deferred 2020 other government Convertible $ payables grants Loans loan notes Total On demand — — — — — Within one year 2,385,777 — 1,033,632 4,426,340 7,845,749 More than one year but less than two years — — — — — More than two year but less than five years — 534,074 — — 534,074 More than five years — — — — — 2,385,777 534,074 1,033,632 4,426,340 8,379,823 Trade and Deferred 2019 other government Convertible $ payables grants Loans loan notes Total On demand — — — — — Within one year 3,798,286 — — — 3,798,286 More than one year but less than two years — — — 3,297,468 3,297,468 More than two year but less than five years — 206,696 — — 206,696 More than five years — — — — — 3,798,286 206,696 — 3,297,468 7,302,450 |
Ultimate controlling party
Ultimate controlling party | 12 Months Ended |
Sep. 30, 2021 | |
Ultimate controlling party | |
Ultimate controlling party | 25. Ultimate controlling party The Directors consider there to be no ultimate controlling party. |
Post balance sheet events
Post balance sheet events | 12 Months Ended |
Sep. 30, 2021 | |
Post balance sheet events | |
Post balance sheet events | 26. Post balance sheet events Pursuant to the terms of the Business Combination, if at any time during the three years following the closing of the Business Combination, the closing price of the Company’s ordinary shares during such period was equal to or exceeded $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days during a 30 consecutive trading day period (the “Earnout Condition”), the Arqit Limited Shareholders were entitled to be issued a further 10,000,000 ordinary shares of the Company (the “Earnout Shares”). On October 5, 2021, the Earnout Condition was met, and therefore on October 6, 2021, the Earnout Shares were issued to the Arqit Limited Shareholders. The Earnout Shares are subject to the Amended and Restated Lock-Up Agreements. |
Related party transactions
Related party transactions | 12 Months Ended |
Sep. 30, 2021 | |
Related party transactions | |
Related party transactions | 27. Related party transactions In the year ended September 30, 2021, Arqit Limited paid $11,679 (2020: $7,982) for the Company secretarial and accounting costs of Arqit PTE, a Company owned 50% by D Williams and 50% by D Bestwick. All related party transactions were on an arm’s length basis. On August 20, 2021, Arqit Limited entered into a loan agreement whereby D Williams, a director of the Group, loaned the company £2,000,000 at an interest rate of 8%. The loan was repaid on September 17, 2021. During the year ended September 30, 2021 interest of $14,401 and fees of $88,800 were charged on the loan. On August 20, 2021 Arqit Limited entered into a loan agreement whereby D Bestwick, a director of the Group, loaned the company £2,000,000 at an interest rate of 8%. The loan was repaid on September 17, 2021. During the year ended September 30, 2021 interest of $14,401 and fees of $88,800 were charged on the loan. As at September 30, 2020, there was a receivable of $20,673 relating to an advance on commission paid to D Williams, a director of the Group. This was fully repaid in December 2020. 27. Related party transactions (continued) In the year ended September 30, 2021, Arqit Limited paid $103,861 (2020: $Nil) for the director services of Lt General VL Jamieson who is a director of AQI. All related party transactions were on an arm’s length basis. In the year ended September 30, 2021, Arqit Limited paid $73,398 (2020: $Nil) for the director services of General S Wilson who is a director of AQI. All related party transactions were on an arm’s length basis. There were no further related party transactions. |
General information and signi_2
General information and significant accounting policies (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
General information and significant accounting policies | |
General information | 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. The principal activity of the Group is provision of cybersecurity services via satellite and terrestrial platforms. The Company is an “emerging growth company,” as defined in the Securities Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and reduced disclosure obligations regarding executive compensation. |
Basis of preparation | Basis of preparation These financial statements have been prepared in accordance with international accounting standards as issued by the IASB. The financial statements are prepared on the historical cost basis, other than investor warrants held at fair value through profit or loss, and the accounting policies set out below have been consistently applied. The preparation of the 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. On September 3, 2021, the Company acquired Arqit Limited through a share for share exchange. As this is a reverse acquisition, Arqit Limited becomes the accounting acquirer who acquired the assets and liabilities in the Company at fair value. As the acquisition is not a business combination (refer to note 9), the transaction falls within IFRS 2 ‘Share-based Payments’. In line with the IFRIC guidance, the transaction is accounted for as follows: a. The assets and liabilities of the accounting acquirer are recognised and measured in the consolidated financial statements at their pre-combination carrying amounts. b. The identifiable net assets of the Company, as legal acquirer, is recognised in accordance with paragraph 10 of IFRS 2 at their fair value at grant date. A reverse acquisition does not constitute a business combination. The Company has become the legal parent and is required to apply IFRS 10 and prepare consolidated financial statements. These financial statements have been prepared using the reverse acquisition methodology, but rather than recognising goodwill, the difference between the equity given up by the Arqit Limited shareholders and the share of the fair value of net assets acquired is charged to the Consolidated Statement of Comprehensive Income as a share-based payment, and represents in substance the cost of acquiring a Nasdaq listing. |
Basis of consolidation | Basis of consolidation The Group financial statements consolidate the Company’s financial statements of Arqit Quantum Inc. and its subsidiaries (the “Group”) following the business combination which took place on September 3, 2021 (see note 9). Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The subsidiaries are fully consolidated from the date on which control is transferred to the Group and deconsolidated from the date that control ceases. 1. General information and significant accounting policies (continued) The financial statements of the subsidiaries are prepared for the same financial year as the parent company, applying consistent accounting policies throughout the Group. Inter-company balances and transactions, including unrealised profits or losses are eliminated on consolidation. |
Comparative information | Comparative information The Group’s accounting treatment for the business combination, as described in full within note 9 to these financial statements, is to account for a reverse acquisition along with a share based payment. Therefore, the comparative figures for September 30, 2020 and September 30, 2020 are those of the legal subsidiary, Arqit Limited, and do not include the results of the Company, which is in accordance with reverse acquisition accounting in IFRS 3 Business Combinations. The Arqit Limited financial statements have been translated into USD in accordance with IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’. This standard requires that assets and liabilities be translated using the exchange rate at year end, and income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions (i.e. the average rate for the year). The foreign exchange differences on translation of Arqit Limited are recognised in other comprehensive income. |
Going Concern | Going Concern The directors believe that it is appropriate to prepare the financial statements on the going concern basis. In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the current and future position of the Company. As part of their assessment, the Directors have also taken into account the ability to raise additional funding whilst maintaining sufficient cash resources to meet all commitments. Following the close of the De-SPAC transaction in September 2021 the Company had $8 Based on the above, the Directors have a reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future, such that it will be able to realise its assets and discharge its liabilities in the normal course of business for a period of at least 12 months from the date of signing these financial statements, and beyond. Therefore, the financial statements are prepared on the going concern basis. |
Standards, interpretations and amendments to published standards | Standards, interpretations and amendments to published standards The Group has adopted the following standards and amendments to standards for the first time for their annual reporting period commencing 1 October 2020, none of which had a material impact : ● Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform ● IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment – Definition of Material) ● IFRS 3 Business Combinations (Amendment – Definition of Business) ● Revised Conceptual Framework for Financial Reporting The Group has not early adopted the following new and amended standards that have been issued but are not yet effective: ● Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022); 1. General information and significant accounting policies (continued) ● Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) (effective for periods commencing on or after 1 January 2022); ● Amendments to IAS 1: Presentation of Financial Statements – Classification of Liabilities as Current or Non-current (effective for periods commencing on or after 1 January 2023); ● Provisions, Contingent Liabilities and Contingent Assets (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022); ● Amendments to IAS 1: Presentation of Financial Statements – Disclosure of Accounting Policies (effective for periods commencing on or after 1 January 2022); ● Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates (effective for periods commencing on or after 1 January 2022); ● Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41) (effective for periods commencing on or after 1 January 2022); and ● References to Conceptual Framework (Amendments to IFRS 3) (effective for periods commencing on or after 1 January 2022). The directors of the Company anticipate that the application of all new and amended standards will have no material impact on the future results of the Group in the foreseeable future. |
Operating Segments | Operating Segments The Directors consider the Group to operate within one operating segment, being the provision of cybersecurity services via satellite and terrestrial platforms. |
Government grants | Government grants Government grants are recognised only when there is reasonable assurance that (a) the entity will comply with any conditions attached to the grant and (b) the grant will be received. Grants related to research and development are included in non-current or current liabilities as deferred income and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. The grants will be systematically amortised to profit or loss over a period matching the useful life of the acquired asset. |
Intangible assests - Research and development expenditure | Intangible assets - Research and development expenditure Research costs are expensed through the income statement as they are incurred. Under IAS 38, development costs are only capitalised after technical and commercial feasibility of the asset for sale or use have been established. The Company must intend and be able to complete the asset and either use it or sell it and be able to demonstrate how the asset will generate future economic benefit. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. Intangible assets not yet subject to amortisation are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. An impairment loss is recognised for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. |
Current and deferred income tax | Current and deferred income tax The current income tax expense or credit is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the Company operates and generates taxable income, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Management periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The research and development (“R&D”) tax credit is calculated using the current rules as prescribed by HMRC. The estimation is based on the actual UK R&D projects that qualify for the scheme that have been carried out in the period. This is treated on a accruals basis when the R&D tax credit has been calculated for the relevant period. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. |
Revenue and other operating income | Revenue and other operating income The Company adopts IFRS 15 ‘Revenue from contracts with customers’ for revenue including other income which is recognised in accordance with this standard. Revenue from services related to the Quantum Cloud product has been recognised in the year once the service has been performed and accepted by the customer. Other income represents income derived from contracts for the provision of goods and services by the Company to customers in exchange for consideration in the ordinary course of the Company’s activities. Other operating income is recognised at the point in time when the relevant performance obligation is satisfied. There are no contracts for other operating income whose performance obligations are satisfied over time. Revenue is measured at the transaction price, being the fair value of the consideration received or receivable. Performance obligations Upon approval by the parties to a contract, the contract is assessed to identify each promise to transfer either a distinct good or service or a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. Goods and services are distinct and accounted for as separate performance obligations in the contract if the customer can benefit from them either on their own or together with other resources that are readily available to the customer and they are separately identifiable in the contract. Other operating income is recognised on meeting the design milestones and acceptance by the contracting party of the specified deliverables within the contract. Each milestone is considered to be a separate performance obligation. 1. General information and significant accounting policies (continued) Transaction price At the start of the contract, the total transaction price is estimated as the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods and services to the customer, excluding sales taxes. The transaction price does not include estimates of consideration resulting from contract modifications, such as change orders, until they have been approved by the parties to the contract. The total transaction price is allocated to the performance obligations identified in the contract in proportion to their relative standalone selling prices. Given the bespoke nature of many of the Company’s products and services, which are designed and/or manufactured under contract to the customer’s individual specifications, there are sometimes no observable standalone selling prices. Instead, standalone selling prices are typically estimated based on expected costs. Contract liabilities Contract liabilities represent the obligation to transfer goods or services to a customer for which consideration has been received, or consideration is due, from the customer. |
Accounting for Joint Ventures | Accounting for Joint Ventures An entity is treated as a joint venture where the Company is a party to a contractual agreement with one or more parties from outside the Company to undertake an economic activity that is subject to joint control. This is initially recognised as an investment at cost and subsequently accounted for using the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures. |
Financial instruments | Financial instruments A financial instrument is any contract that gives rise to a financial asset of on entity and a financial liability or equity instrument of another. (a) Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income, or fair value through profit or loss. The classification of financial assets at initial recognition that are debt instruments depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. The Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. 1. General information and significant accounting policies (continued) Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: ● Financial assets at amortised cost (debt instruments) ● Financial assets at fair value through other comprehensive income with recycling of cumulative gains and losses (debt instruments) ● Financial assets designated at fair value through other comprehensive income with no recycling of cumulative gains and losses upon derecognition (equity instruments) ● Financial assets at fair value through profit or loss Financial assets at amortised cost (debt instruments) This category is the most relevant to the Company. The Company measures financial assets at amortised cost if both of the following conditions are met: ● The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and ● The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment. Interest received is recognised as part of finance income in the statement of profit or loss and other comprehensive income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Company’s financial assets at amortised cost include trade receivables (not subject to provisional pricing) and other receivables. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e., removed from the Company’s consolidated statement of financial position) when: ● The rights to receive cash flows from the asset have expired; or ● The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Impairment of financial assets The Company recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value. For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Company applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Company does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date. 1. General information and significant accounting policies (continued) The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity. At each reporting date, the Company assesses whether financial assets carried at amortised cost are impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. (b) Financial liabilities Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other payables and loans. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income. Loans and borrowings and trade and other payables After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of comprehensive income. This category generally applies to trade and other payables. Derecognition A financial liability is derecognised when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income. 1. General information and significant accounting policies (continued) Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised costs. Any difference between the proceeds (net of transaction costs) and the redemption value are recognised in the income statement over the period of the borrowings using the effective interest rate method. Borrowing costs are expensed in the period in which they are incurred. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Convertible loan notes Convertible loan notes are assessed on inception and classified as either a liability, equity or a compound financial instrument in accordance with IAS 32. When a convertible loan note is assessed to be wholly equity it is recognised immediately in other reserves. When a convertible loan note is assessed a liability, it is treated as a hybrid instrument containing a host debt contract and an embedded derivative liability (written call option over own shares). The embedded derivative is measured at fair value with changes in fair value recognised in profit or loss. Should it be concluded that the equity component of the combined instrument may be sufficiently significant to preclude it from obtaining a reliable estimate of the fair value of the entire instrument, the combined instrument is measured at cost less impairment. When a convertible loan note is assessed as a compound financial instrument, the net proceeds received from the issue of convertible bonds are split between a liability element and an equity component at the date of issue. The fair value of the liability component is estimated using the prevailing market interest rate for similar nonconvertible debt. The difference between the proceeds of issue of the convertible bonds and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the Company, is included in equity and is not remeasured. The liability component is carried at amortised cost. Any difference between the carrying amount of the financial liability that has been extinguished and the consideration paid is recognised in profit or loss as other income or finance costs. As per note 15, the convertible loan note B and Future Fund liability converted to equity. The interest expense on the liability component is calculated by applying the prevailing market interest rate, at the time of issue, for similar non-convertible debt to the liability component of the instrument. The difference between this amount and the interest paid is added to the carrying amount of the convertible bonds. |
Share-based payments | Share based payments Where share options are awarded to employees, the fair value of the options at grant date is charged to the Statement of Comprehensive Income over the vesting period. Nonmarket vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options or warrants that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition. The fair value of the award also considers non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Statement of Comprehensive Income over the remaining vesting period. 1. General information and significant accounting policies (continued) Where equity instruments are granted to persons other than employees, the Statement of Comprehensive Income is charged with fair value of goods and services received. The share option charge was calculated using the Black Scholes Option pricing model which requires the use of various estimates and assumptions (note 18). When share options lapse, any amounts credited to the share-based payments reserve are released to the retained earnings reserve. Share-based payments Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity settled transactions with employees at the grant date, the Group uses a Black Scholes valuation. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 18. |
Warrants | Warrants Warrants are classified as derivatives and are initially recognised at their fair value on the date of inception of the contract. The Company’s warrants are subsequently re-measured at each reporting date with changes in fair value recognised in profit or loss. The warrants are valued using the Binomial Option Pricing Model. As the fair value of the warrants fluctuate with movement in the underlying Arqit Quantum Inc share price, these warrants are considered a derivative as a variable amount of cash will be settled on exercise. |
Foreign currencies | Foreign currencies Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The functional currency of Arqit Quantum Inc. is U.S. dollars. The Group financial statements are presented in U.S Dollars which is considered to be the Group’s presentation currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Group companies The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated as follows: a) assets and liabilities at the balance sheet date are translated at the closing rate as at that balance sheet date; b) income and expenses for each income statement are translated at average exchange rates; and c) all resulting exchange differences are recognised in other comprehensive income |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks and all other cash amounts with maturities of three months or less. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment are stated at historic cost less accumulated depreciation and impairment losses, if any. 1. General information and significant accounting policies (continued) Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are between three The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and years of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Costs also comprise the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group are obligated to incur when the asset is acquired, if applicable. The Group as lessee has elected not to apply the requirements under IFRS 16 to short-term leases held. The lease payments associated with those leases are recognised as an expense on a straight-line basis over the lease term. |
Share capital | Share capital Ordinary shares are classified as equity. Any incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. |
Financial risk management | Financial risk management The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. Risk management is overseen by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. Please see note 24 for financial instruments and fair value disclosures. |
Expected credit losses | Expected credit losses Management assess recoverability of balances at year end. Balances that are considered doubtful are provided for within the period which management first deem this necessary. Balances which are deemed not fully recoverable are written off. |
Critical accounting judgements and key sources of estimation uncertainty | Critical accounting judgements and key sources of estimation uncertainty In the application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods. The directors consider the below to be the critical judgements in respect of the period. 1. General information and significant accounting policies (continued) Warrants valuation Estimating the fair value of warrants requires a determination of the most appropriate valuation model, which depends on the terms and conditions of the warrant. This estimate also requires determination of the most appropriate inputs to the valuation model including equity value, exercise price, volatility, dividend yield, risk free rate and exercise period and making assumptions about them. For the measurement of the fair value of warrants at both the acquisition and the reporting date, the Group uses a Binomial Option Pricing Model. The assumptions and models used for this estimation are disclosed in note 17. Deemed acquisition cost A ‘reverse acquisition’ is a business combination in which the legal acquirer - i.e. the entity that issues the securities (listed entity) becomes the acquiree for accounting purposes and the legal acquiree becomes the acquirer for accounting purposes. A reverse acquisition is accounted for under IFRS 2 “Share-based Payments” whereby the legal acquiree Arqit Limited is deemed to have issued shares in exchange for the net assets and listing status of Arqit Quantum Inc. The deemed consideration is the fair value of the shares that Arqit Limited would have had to issue to Arqit Quantum Inc to acquire the same percentage equity interest in the combined entity that results from the reverse acquisition. The deemed acquisition cost is recognised in profit or loss and is the difference between the fair value of the deemed consideration and the fair value of the net assets acquired. It represents the premium paid for obtaining the public listing. Detail on the reverse acquisition of Arqit Quantum Inc. is included in note 9. |
Capitalisation of development costs | Capitalisation of development costs The Group capitalises costs for product development projects. Initial capitalisation of costs is based on management’s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model, and all other recognition criteria within IAS 38 can be demonstrated. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits. At 30 September 2021, the carrying amount of capitalised development costs were $18,235,034 (2020: $8,776,530, 2019: $4,047,138). |
Accounting treatment of income from European Space Agency ("ESA") | Accounting treatment of income from European Space Agency (“ESA”) There are mixed indicators whether the arrangement is in scope of IAS 20 or IFRS 15, and this assessment is a key management judgement. In 2019 the Group entered in an agreement with the ESA whereby the Group has undertaken to carry out all work necessary to design, develop, manufacture, assemble, integrate, verify, obtain licenses and launch a satellite (“QKDSat”), and to deploy and pilot the operations of the QKDSat system. ESA has undertaken to pay specified amounts upon the achievement of specific milestones related to this undertaking, as set out in the agreement. QKDSat is constituted under the ARTES 33-11 programme line which ESA has created with the objective of validating Quantum Key Distribution technologies. 1. General information and significant accounting policies (continued) Based on our analysis, Arqit is providing specific deliverables (intellectual property) and services (satellite design) to ESA, which in our view it is a reasonable judgement that IAS 20 is not applicable and Arqit is providing services to ESA in its capacity as a customer. The primary output of the Group is the provision of Quantum Key Distribution rather than satellite design services and the sale of intellectual property. Whilst the performance obligations in the ESA Agreement are not the primary output of the Group, the sale of satellite design services and intellectual property is an ordinary output of the Group. Given the judgement associated with the above, and whether the provision of such services is ‘revenue’ from the ordinary activities of the business, presentation as ‘Other Income’ is concluded as appropriate and reflects the substance of the ESA Agreement. |
Market rate of interest used in accounting for convertible loan notes | Market rate of interest used in accounting for convertible loan notes Management have deemed the interest to be 10%. This assessment was made on the basis of informal opinions sought from advisers, and management’s own experience of similar instruments from prior engagements in other businesses. |
Deferred tax asset | Deferred tax asset Judgement is required to determine whether deferred tax assets are recognised in the statement of financial position. Deferred tax assets, arising from unutilised tax losses, require the Group to assess the likelihood it will generate sufficient taxable earnings in future periods, in order to utilise recognised deferred tax assets. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date could be impacted. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Revenue | |
Schedule of the revenue | Nine months Year ended 30 Year ended 30 ended 30 September September September 2021 2020 2019 $ $ $ Quantum Cloud – provision of services 47,910 — — |
Other operating income (Tables)
Other operating income (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Other operating income | |
Summary of other operating income | Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ European Space Agency (ESA) Contract — 1,963,670 1,250,056 |
Expenses by Nature (Tables)
Expenses by Nature (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Expenses by Nature | |
Summary of expenses by Nature | Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ Employee benefit expense and other staff costs 10,935,570 3,090,091 455,661 Capitalised within intangible assets (3,478,034) (1,533,915) (417,158) Legal and professional 4,733,186 424,626 185,217 Foreign exchange 623,184 (9,854) 60,247 Property costs 187,739 158,568 58,261 Share option charge 165,570 121,597 11,392 Depreciation 52,550 4,787 308 Other expenses 1,339,556 516,742 534,067 Total administrative expenses 14,559,321 2,772,642 887,995 |
Finance costs (Tables)
Finance costs (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Finance costs | |
Summary of finance costs | Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ Interest payable on convertible loan notes 1,078,070 392,783 88,466 |
Finance income (Tables)
Finance income (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Finance income | |
Summary of finance income | Nine months Year ended Year ended ended 30 September 30 September 30 September 2021 2020 2019 $ $ $ Initial recognition difference of convertible loan notes — 64,902 510,252 |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Income tax | |
Summary of income tax | 2021 2020 2019 $ $ $ The tax (charge)/credit on the profit/(loss) on ordinary activities for the year was as follows: Current tax Current tax credit/(charge) – R&D — — 821,350 Deferred Tax — 568,534 (567,632) Income tax credit — 568,534 253,718 |
Summary of factors affecting tax charge/credit for the year | 2021 2020 2019 $ $ $ (Loss) / Profit from continuing operations (271,729,101) (1,136,853) 783,847 Tax at the applicable rate of 19% (2020 – 19%, 2019 – 19%) (51,628,512) (216,002) 148,931 Tax effect of income and expenses that are not taxable / deductible in determining profit Disallowable expenditure 754,359 24,013 60,122 Fixed asset timing differences — (852,403) (708,247) Unutilised losses 3,103,171 1,420,938 140,615 Tax losses surrendered for R&D credit — — (209,053) Unutilised tax losses on which deferred tax is not recognised 1,990,522 191,988 — R&D tax credit 33,251 — 821,350 Additional deduction for R&D (1,104,676) — — Remeasurement of R&D (1,322,616) — — Fair valuation of warrants 18,637,113 — — Reverse acquisition expense 29,537,388 — — Total tax credit — 568,534 253,718 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Earnings per share | |
Summary of earnings per share | Weighted average number of Per share Basic EPS Earnings shares amount $ $ 2021 (271,729,101) 68,326,365 (3.9769) 2020 (568,319) 59,260,796 (0.0096) 2019 1,037,565 59,260,796 0.0175 |
Business combination agreement
Business combination agreement (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Business combination agreement | |
Schedule of fair value of deemed shares issued | Valuation Fair value technique Unobservable input Range 485,326 Ordinary Shares in Arqit Limited deemed issues in reverse acquisition $ 223,517,945 Market comparable companies Revenue multiple 12-17 x EBITDA multiple 20-30 x uFCF multiple 20-25 x Revenue growth rate (CAGR) 9.1 % Discount 20 % |
Schedule of fair value of net assets acquired | $ Cash and cash equivalents 107,035,478 Trade and other receivables 1,961,889 Warrant liabilities (29,948,361) Trade and other payables (11,000,000) Net assets 68,049,006 |
Schedule of other reserves arise as a result of the reverse acquisition | $ Pre-acquisition losses of AQI (18,237,443) Pre-acquisition reserves of AQI 26,285,329 AL share capital at acquisition 269 AL share premium at acquisition 20,210,904 Reverse acquisition expense 155,459,939 Transaction costs (16,914,223) 166,804,775 |
Summary of exceptional costs disclosed within the consolidated statement of comprehensive income | $ Reverse acquisition expense 155,459,939 Other listing expenses 2,589,611 158,049,550 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Property, plant and equipment | |
Summary of property, plant and equipment | Computer equipment $ Cost At 1 January 2019 — Additions 5,383 Foreign exchange on translation — At 30 September 2019 5,383 At 1 October 2019 5,383 Additions 26,306 Foreign exchange on translation 246 At 30 September 2020 31,935 At 1 October 2020 31,935 Additions 222,654 Foreign exchange on translation 1,369 At 30 September 2021 255,958 Depreciation At 1 January 2019 — Charge (308) Foreign exchange on translation 9 At 30 September 2019 (299) At 1 October 2019 (299) Charge (4,787) Foreign exchange on translation (75) At 30 September 2020 (5,161) At 1 October 2020 (5,161) Charge (52,550) Foreign exchange on translation 601 At 30 September 2021 (57,110) Net Book Value At 30 September 2021 198,848 At 30 September 2020 26,774 At 30 September 2019 5,084 |
Intangible fixed assets (Tables
Intangible fixed assets (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Intangible fixed assets | |
Summary of intangible fixed assets | Development Costs $ Cost At 1 January 2019 441,856 Additions 3,616,538 Foreign exchange on translation (11,256) At 30 September 2019 4,047,138 Additions 4,554,397 Foreign exchange on translation 184,995 At 30 September 2020 8,776,530 Additions 9,082,456 Foreign exchange on translation 376,048 At 30 September 2021 18,235,034 Amortisation At 1 January 2019 — Charge — At 30 September 2019 — Charge — At 30 September 2020 — Charge — At 30 September 2021 — Net Book Value At 30 September 2021 18,235,034 At 30 September 2020 8,776,530 At 30 September 2019 4,047,138 |
Fixed asset investments (Tables
Fixed asset investments (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Fixed asset investments | |
Summary of fixed asset investments | Investment in Joint Venture $ Cost At 1 January 2019 — Additions — At 30 September 2019 — Additions 32,301 At 30 September 2020 32,301 Additions — Foreign exchange on translation 1,384 At 30 September 2021 33,685 |
Schedule of details of the subsidiaries | Name of undertaking Registered office Domicile % held Arqit Limited 1st Floor, 3 More London Riverside, More London Place, London, England, SE1 2RE U.K. 100 Arqit Inc. 1209 Orange Street, Wilmington, County of Newcastle, Delaware 19801 U.S. 100 Arqit LLC 1209 Orange Street, Wilmington, County of Newcastle, Delaware 19801 U.S. 100 |
Trade and other receivables (Ta
Trade and other receivables (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Trade and other receivables. | |
Schedule of trade and other receivables | 2021 2020 2019 $ $ $ Current assets Trade debtors 56,591 — — Other debtors 856,591 151,895 883,522 Prepayments and accrued income 2,379,128 128,695 13,903 Total 3,292,310 280,590 897,425 2021 2020 2019 $ $ $ Non-current Assets Prepayments 5,000,000 — — Total 5,000,000 — — |
Trade and other payables (Table
Trade and other payables (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Trade and other payables | |
Schedule of trade and other payables | 2021 2020 2019 $ $ $ Current liabilities Trade payables 9,748,069 256,830 252,768 Other tax and social security 410,022 331,495 69,578 Other creditors 1,018,816 41,640 2,182 Accruals 3,235,742 195,715 1,981,858 Deferred income 2,656,007 1,560,097 1,491,900 Total 17,068,656 2,385,777 3,798,286 2021 2020 2019 $ $ $ Non-current Liabilities Deferred government grants 2,459,413 534,074 206,696 2,459,413 534,074 206,696 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Borrowings | |
Schedule of borrowings | 2021 2020 2019 $ $ $ Current liabilities Bridging finance — 1,033,632 — Convertible loan notes B — 4,426,340 — — 5,459,972 — Non-current Liabilities Convertible loan notes B — — 3,297,468 2021 2020 2019 $ $ $ Fair value Bridging finance — 1,033,632 — Convertible loan notes A (treated as equity) — 1,411,034 1,411,034 Convertible loan notes B — 4,426,340 3,297,468 — 6,871,006 4,708,502 |
Cash generated from operations
Cash generated from operations (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Cash generated from operations | |
Summary of cash generated from operations | 2021 2020 2019 $ $ $ (Loss) / profit before tax (271,729,101) (1,136,853) 783,847 Adjustments for: Depreciation 52,550 4,787 308 Change in trade and other receivables (6,131,559) (173,204) (57,608) Change in trade and other payables (1,289,125) (1,283,887) 3,632,800 Share option charge 165,570 121,597 11,392 Finance income — (64,902) (510,252) Interest payable 1,078,070 392,783 88,466 Change in fair value of warrants 98,090,070 — — IFRS 2 adjustment relating to reverse acquisition 155,459,939 — — Cash (used in)/generated from operations (24,303,586) (2,139,679) 3,948,953 Reconciliation of net cashflow to movements in net debt: Opening net cash/(debt) (5,265,371) 929,056 310,479 Convertible facilities received (14,147,700) (1,679,652) (3,706,686) Borrowings received (5,041,971) — — Net interest charge (99,904) 332,124 409,218 Facilities converted 18,863,600 — — Repayment of borrowings 6,119,891 — — Movement in cash 86,765,376 (4,225,118) 3,916,045 Movement on foreign exchange (228,132) 42,468 — Movement in net cash/ (debt) 92,231,160 (6,194,427) 618,577 Closing net cash/(debt) 86,965,789 (5,265,371) 929,056 Composition of closing net cash/(debt) Cash 86,965,789 194,602 4,226,524 Bank loans — (1,033,632) — Convertible loans — (4,426,340) (3,297,468) Net cash/(debt) 86,965,789 (5,265,371) 929,056 |
Warrant Liability (Tables)
Warrant Liability (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Warrant Liability | |
Schedule of Fair value of warrant liability | Number of Number of Fair value of Private Public warrant warrants warrants liability $ At date of acquisition (3 September 2021) 6,266,667 8,624,973 29,948,361 Change in fair value 6,266,667 8,624,973 98,090,071 Balance at 30 September 2021 6,266,667 8,624,973 128,038,432 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Share-based payments | |
Summary of share options granted during the period | 2021 2020 2019 Weighted Weighted Weighted Average Average Average Number of Exercise Number of Exercise Number of exercise Share options Price (£) Share options Price (£) Share options Price (£) Outstanding at beginning of period 161,250 0.0001 72,700 0.0001 8,700 0.0001 Granted during the period 55,210 0.0001 88,550 0.0001 64,000 0.0001 Forfeited/lapsed during the period (32,963) 0.0001 — — — — Exercised during the period — — — — — — Outstanding at end of period 183,497 0.0001 161,250 0.0001 72,700 0.0001 Exercisable at end of period 17,167 — — |
Summary of inputs into the Black-Scholes model | 2021 2020 2019 Weighted average share price (£) 3.30 3.30 2.95 Weighted average exercise price (£) 0.0001 0.0001 0.0001 Expected volatility 50 % 50 % 50 % Expected life 5 years 5 years 5 years Risk-free rate 0.1 % 0.1 % 0.1 % Expected dividend yield 0 % 0 % 0 % |
Summary of share option charge | 2021 2020 2019 $ $ $ Share option charge included in administrative expenses 165,570 121,597 11,392 165,570 121,597 11,392 |
Staff costs and average numbe_2
Staff costs and average number of employees (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Staff costs and average number of employees | |
Summary of staff costs | 2021 2020 2019 $ $ $ The aggregate remuneration comprised: Wages and salaries 9,531,933 2,620,476 377,383 Social security costs 1,238,459 336,076 37,639 Pension costs 165,178 133,539 40,639 Share option charge 165,570 121,597 11,392 11,101,140 3,211,688 467,053 |
Summary of remuneration payable to directors | 2021 2020 2019 $ $ $ Directors’ remuneration 1,971,580 1,012,864 486,764 |
Deferred Tax (Tables)
Deferred Tax (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Deferred Tax | |
Summary of deferred Tax | 2021 2020 2019 $ $ $ At the beginning of the period — 550,718 — Movement in the year recognised in profit or loss — (568,534) 567,632 Foreign exchange on translation — (17,816) (16,914) At the end of the year — — 550,718 The deferred tax liability/(asset) is made up as follows: Intangible asset timing differences 4,685,158 1,581,987 — Unrelieved tax losses (4,685,158) (1,581,987) — — — — |
Share capital (Tables)
Share capital (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Share capital | |
Summary of Share capital | Arqit Limited Number of Number of Share capital Share capital ordinary shares deferred shares* £ $ equivalent At 1 October 2020 – par value £0.0001 1,286,600 — 129 158 Conversion of convertible loan notes 710,074 — 71 98 Deferred shares issued (42,500) 42,500 — — Exchanged for shares in the Company in reverse acquisition 1,954,174 42,500 200 256 * Deferred shares are non-redeemable and have no voting rights and no rights to dividends. On a distribution on a winding up, the holders of the shares shall receive a total of £1.00 for the entire class of deferred shares. Arqit Quantum Inc. Number of ordinary Share capital shares $ Inception, April 26, 2021 – par value $1 1 1 Treasury shares (1) (1) Shares issued in merger with Centricus 12,973,430 1,297 Shares issued in exchange for Arqit Limited shares 90,000,000 9,000 Shares issued to PIPE investors 7,100,000 710 September 30, 2021 – par value $0.0001 110,073,430 11,007 |
Retained earnings (Tables)
Retained earnings (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Retained earnings | |
Summary of retained earnings | 2021 2020 2019 $ $ $ At 1 October (485,494) 82,825 (954,740) Profit/(Loss) for the year (271,729,101) (568,319) 1,037,565 Dividends paid — — — At 30 September (272,214,595) (485,494) 82,825 |
Financial instruments and fai_2
Financial instruments and fair value disclosures (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Financial instruments and fair value disclosures | |
Summary of financial assets at amortised cost | Carrying value Fair value $ 30 September 2021 30 September 2021 Cash and cash equivalents 86,965,789 86,965,789 Trade and other receivables 56,591 56,591 87,022,380 87,022,380 Carrying value Fair value $ 30 September 2020 30 September 2020 Cash and cash equivalents 194,602 194,602 Trade and other receivables 215,835 215,835 410,437 410,437 Carrying value Fair value 30 September 2019 30 September 2019 Cash and cash equivalents 4,226,524 4,226,524 Trade and other receivables 883,522 883,522 5,110,046 5,110,046 |
Summary of financial liabilities at amortised cost | Carrying value Fair value $ 30 September 2021 30 September 2021 Trade and other payables 16,658,633 16,658,633 Deferred government grants 2,459,413 2,459,413 19,118,046 19,118,046 Carrying value Fair value $ 30 September 2020 30 September 2020 Trade and other payables 2,054,281 2,054,281 Deferred government grants 534,074 534,074 Bridging finance 1,033,632 1,033,632 Convertible loans 4,426,340 4,426,340 8,048,327 8,048,327 Carrying value Fair value $ 30 September 2019 30 September 2019 Trade and other payables 3,728,707 3,728,707 Deferred government grants 206,696 206,696 Convertible loans 3,297,468 3,297,468 7,232,871 7,232,871 |
Schedule of Financial liabilities at fair value through profit or loss | Fair value Fair value Carrying value Level 2 Level 3 30 September 30 September 30 September $ 2021 2021 2021 Warrant liability 128,038,431 75,899,762 52,138,669 128,038,431 75,899,762 52,138,669 |
Disclosure of Foreign exchange Risk | Year ended 30/09/2021 ’000 /£ Parent — UK subsidiary 23,019 Total 23,019 The reasonable shifts in exchange rates below are based on historic volatility. If the $/£ rates moved by +/- 5.88% then the effect on loss would be as follows: Year ended 30/09/2021 ’000 $ Reasonable shift 5.88 % Total effect on Loss of +ve movements (1,353) Total effect on Loss of -ve movements 1,353 |
Summary of maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | Trade and Deferred 2021 other government $ payables grants Total On demand — — — Within one year 17,068,655 — 17,068,655 More than one year but less than two years — — — More than two year but less than five years — 2,459,413 2,459,413 More than five years — — — 17,068,655 2,459,413 19,528,068 24. Financial instruments and fair value disclosures (continued) Trade and Deferred 2020 other government Convertible $ payables grants Loans loan notes Total On demand — — — — — Within one year 2,385,777 — 1,033,632 4,426,340 7,845,749 More than one year but less than two years — — — — — More than two year but less than five years — 534,074 — — 534,074 More than five years — — — — — 2,385,777 534,074 1,033,632 4,426,340 8,379,823 Trade and Deferred 2019 other government Convertible $ payables grants Loans loan notes Total On demand — — — — — Within one year 3,798,286 — — — 3,798,286 More than one year but less than two years — — — 3,297,468 3,297,468 More than two year but less than five years — 206,696 — — 206,696 More than five years — — — — — 3,798,286 206,696 — 3,297,468 7,302,450 |
General information and signi_3
General information and significant accounting policies - Going Concern (Details) | 12 Months Ended | |||
Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
General information and significant accounting policies | ||||
Number of operating segment | segment | 1 | |||
Cash | $ | $ 86,965,789 | $ 194,602 | $ 4,226,524 | $ 310,479 |
General information and signi_4
General information and significant accounting policies - Capitalisation of development costs (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | |
Disclosure of detailed information about intangible assets [line items] | ||||
Intangible assets other than goodwill | $ 18,235,034 | $ 8,776,530 | $ 4,047,138 | |
Minimum | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Written off period | 3 years | |||
Maximum | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Written off period | 5 years | |||
Development costs | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Intangible assets other than goodwill | $ 18,235,034 | 8,776,530 | 4,047,138 | |
Computer equipment | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Written off period | 3 years | |||
Cost | Development costs | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Intangible assets other than goodwill | $ 18,235,034 | $ 8,776,530 | $ 4,047,138 | $ 441,856 |
General information and signi_5
General information and significant accounting policies - Market rate of interest used in accounting for convertible loan notes (Details) | Sep. 30, 2021 |
General information and significant accounting policies | |
Market rate of interest used in accounting for the interest free convertible loan notes | 10.00% |
Revenue (Details)
Revenue (Details) | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Revenue | |
Quantum Cloud - provision of services | $ 47,910 |
Other operating income (Details
Other operating income (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Sep. 30, 2020 | |
Other operating income | ||
European Space Agency (ESA) Contract | $ 1,250,056 | $ 1,963,670 |
Expenses by Nature (Details)
Expenses by Nature (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Expenses by Nature | |||
Employee benefit expense and other staff costs | $ 455,661 | $ 10,935,570 | $ 3,090,091 |
Capitalised within intangible assets | (417,158) | (3,478,034) | (1,533,915) |
Legal and professional | 185,217 | 4,733,186 | 424,626 |
Foreign exchange | 60,247 | 623,184 | (9,854) |
Property costs | 58,261 | 187,739 | 158,568 |
Share option charge | 11,392 | 165,570 | 121,597 |
Depreciation | 308 | 52,550 | 4,787 |
Other expenses | 534,067 | 1,339,556 | 516,742 |
Total administrative expenses | $ 887,995 | $ 14,559,321 | $ 2,772,642 |
Finance costs (Details)
Finance costs (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Finance costs | |||
Interest payable on convertible loan notes | $ 88,466 | $ 1,078,070 | $ 392,783 |
Finance income (Details)
Finance income (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Sep. 30, 2020 | |
Finance income | ||
Initial recognition difference of convertible loan notes | $ 510,252 | $ 64,902 |
Income tax (Details)
Income tax (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Sep. 30, 2020 | |
Current tax | ||
Current tax credit - R&D | $ 821,350 | |
Deferred Tax | (567,632) | $ 568,534 |
Income tax credit | $ 253,718 | $ 568,534 |
Income tax - Factors affecting
Income tax - Factors affecting tax charge/credit for the year (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Factors affecting tax charge/credit for the year | |||
(Loss) / Profit from continuing operations | $ 783,847 | $ (271,729,101) | $ (1,136,853) |
Tax at the applicable rate of 19% (2020 - 19%, 2019 - 19%) | 148,931 | (51,628,512) | (216,002) |
Disallowable expenditure | 60,122 | 754,359 | 24,013 |
Fixed asset timing differences | (708,247) | (852,403) | |
Unutilised losses | 140,615 | 3,103,171 | 1,420,938 |
Tax losses surrendered for R&D credit | (209,053) | ||
Unutilised tax losses on which deferred tax is not recognised | 1,990,522 | 191,988 | |
R&D tax credit | 821,350 | 33,251 | |
Additional deduction for R&D | (1,104,676) | ||
Remeasurement of R&D | (1,322,616) | ||
Fair valuation of warrants | 18,637,113 | ||
Reverse acquisition expense | $ 29,537,388 | ||
Income tax credit | $ 253,718 | $ 568,534 | |
Applicable rate | 19.00% | 19.00% | 19.00% |
Earnings per share (Details)
Earnings per share (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2021USD ($)item$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | |
Earnings per share | ||||
Profit (loss) for the period | $ | $ 651,973 | $ 1,037,565 | $ (271,729,101) | $ (568,319) |
Weighted average number of shares | shares | 59,260,796 | 68,326,365 | 59,260,796 | |
Per share amount | $ / shares | $ 0.0175 | $ (3.9769) | $ (0.0096) | |
Share exchange ratio | item | 46.06 |
Business combination agreemen_2
Business combination agreement - Fair value of deemed shares issued (Details) | Sep. 03, 2021USD ($)shares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2021USD ($)item$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 02, 2021$ / shares | Apr. 25, 2021$ / shares | Sep. 30, 2020€ / shares |
Disclosure of detailed information about business combination [line items] | ||||||||
Share Exchange Ratio | item | 46.06 | |||||||
Price per share | (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 1 | € 0.0001 | |||
Profit / (loss) for the year | $ | $ 651,973 | $ 1,037,565 | $ (271,729,101) | $ (568,319) | ||||
Business Combination Agreement | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Number of ordinary shares agreed to subscribe | 90,000,000 | |||||||
Shares issued | 90,000,000 | |||||||
Arqit Limited | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Profit / (loss) for the year | $ | $ 651,973 | |||||||
Arqit Limited | Business Combination Agreement | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Share Exchange Ratio | item | 46.06 | |||||||
Number of shares issued as incentive | 1,825,096 | 1,825,096 | ||||||
Exchanged for shares in the Company in reverse acquisition | 1,954,174 | |||||||
Fair value of the shares issued | $ | $ 223,517,945 | |||||||
Number of deemed shares issued representing same percentage of equity interest acquired | 485,326 | |||||||
Centricus Acquisition Corp. | Business Combination Agreement | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Number of ordinary shares for each ordinary share held | 1 | 1 | ||||||
Number of warrants for each warrant held | 1 | 1 | ||||||
Number of shares purchased prior to merger | 2,200,000 | 2,200,000 | ||||||
Consideration for shares purchased prior to merger | $ | $ 22,000,000 | $ 22,000,000 | ||||||
Centricus Acquisition Corp. | Subscription Agreements | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Number of ordinary shares agreed to subscribe | 7,100,000 | |||||||
Price per share | $ / shares | $ 10 | $ 10 | ||||||
Gross proceeds | $ | $ 71,000,000 | |||||||
Shares issued | 7,100,000 |
Business combination agreemen_3
Business combination agreement - Fair value shared deemed (Details) - Business Combination Agreement - Arqit Limited | Sep. 03, 2021USD ($)shares |
Disclosure of detailed information about business combination [line items] | |
Number of deemed shares issued representing same percentage of equity interest acquired | shares | 485,326 |
Fair value of the shares issued | $ | $ 223,517,945 |
Revenue multiple | Minimum | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 12 |
Revenue multiple | Maximum | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 17 |
EBITDA multiple | Minimum | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 20 |
EBITDA multiple | Maximum | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 30 |
uFCF multiple | Minimum | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 20 |
uFCF multiple | Maximum | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 25 |
Revenue growth rate (CAGR) | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 9.1 |
Discount | |
Disclosure of detailed information about business combination [line items] | |
Unobservable inputs | 20 |
Business combination agreemen_4
Business combination agreement - Fair value of net assets (Details) - USD ($) | Sep. 30, 2021 | Sep. 03, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Disclosure of detailed information about business combination [line items] | ||||
Trade and other current receivables | $ 3,292,310 | $ 280,590 | $ 897,425 | |
Arqit Quantum Inc | ||||
Disclosure of detailed information about business combination [line items] | ||||
Fair value of net assets acquired | $ 68,049,006 | $ 68,049,006 | ||
Cash and cash equivalents | 107,035,478 | |||
Trade and other current receivables | 1,961,889 | |||
Warrant liabilities | (29,948,361) | |||
Trade and other payables recognised as of acquisition date | $ (11,000,000) |
Business combination agreemen_5
Business combination agreement - Deemed cost (Details) - Arqit Quantum Inc | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Disclosure of detailed information about business combination [line items] | |
Deemed acquisition cost | $ 155,459,939 |
Share issuance costs | $ 16,914,223 |
Business combination agreemen_6
Business combination agreement - Reverse acquisition (Details) | Sep. 30, 2021USD ($) |
Business combination agreement | |
Pre-acquisition losses of AQI | $ (18,237,443) |
Pre-acquisition reserves of AQI | 26,285,329 |
AL share capital at acquisition | 269 |
AL share premium at acquisition | 20,210,904 |
Reverse acquisition expense | 155,459,939 |
Transaction costs | (16,914,223) |
Other reserves | $ 166,804,775 |
Business combination agreemen_7
Business combination agreement - Exceptional costs (Details) | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Business combination agreement | |
Reverse acquisition expense | $ 155,459,939 |
Other listing expenses | 2,589,611 |
Exceptional costs | $ 158,049,550 |
Business combination agreemen_8
Business combination agreement - Additional information (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disclosure of detailed information about business combination [line items] | ||||
Profit / (loss) for the year | $ 651,973 | $ 1,037,565 | $ (271,729,101) | $ (568,319) |
Arqit Limited | ||||
Disclosure of detailed information about business combination [line items] | ||||
Profit / (loss) for the year | $ 651,973 | |||
Period for earnout consideration | 3 years | |||
Minimum share price for earnout consideration | $ 12.50 | |||
Threshold trading days for closing price of shares, earnout consideration | 20 days | |||
Threshold consecutive trading days for closing price of shares, earnout consideration | 30 days | |||
Number of earnout shares | 10,000,000 |
Property, plant and equipment_2
Property, plant and equipment (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment at beginning of period | $ 26,774 | $ 5,084 | |
Property, plant and equipment at end of period | $ 5,084 | 198,848 | 26,774 |
Computer equipment | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment at beginning of period | 26,774 | 5,084 | |
Property, plant and equipment at end of period | 5,084 | 198,848 | 26,774 |
Cost | Computer equipment | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment at beginning of period | 31,935 | 5,383 | |
Additions | 5,383 | 222,654 | 26,306 |
Foreign exchange on translation | 1,369 | 246 | |
Property, plant and equipment at end of period | 5,383 | 255,958 | 31,935 |
Amortisation | Computer equipment | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment at beginning of period | (5,161) | (299) | |
Foreign exchange on translation | 9 | 601 | (75) |
Charge | (308) | (52,550) | (4,787) |
Property, plant and equipment at end of period | $ (299) | $ (57,110) | $ (5,161) |
Intangible fixed assets (Detail
Intangible fixed assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reconciliation of changes in intangible assets other than goodwill [abstract] | |||
Beginning balance | $ 8,776,530 | $ 4,047,138 | |
Ending balance | $ 4,047,138 | 18,235,034 | 8,776,530 |
Development costs | |||
Reconciliation of changes in intangible assets other than goodwill [abstract] | |||
Beginning balance | 8,776,530 | 4,047,138 | |
Ending balance | 4,047,138 | 18,235,034 | 8,776,530 |
Development costs | Cost | |||
Reconciliation of changes in intangible assets other than goodwill [abstract] | |||
Beginning balance | 441,856 | 8,776,530 | 4,047,138 |
Additions | 3,616,538 | 9,082,456 | 4,554,397 |
Foreign exchange on translation | (11,256) | 376,048 | 184,995 |
Ending balance | $ 4,047,138 | $ 18,235,034 | $ 8,776,530 |
Fixed asset investments (Detail
Fixed asset investments (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Disclosure of joint ventures [line items] | ||
Balance at the beginning | $ 32,301 | |
Balance at the end | 33,685 | $ 32,301 |
Cost | ||
Disclosure of joint ventures [line items] | ||
Balance at the beginning | 32,301 | |
Additions | 32,301 | |
Foreign exchange on translation | 1,384 | |
Balance at the end | $ 33,685 | $ 32,301 |
Fixed asset investments - Joint
Fixed asset investments - Joint venture (Details) | Aug. 12, 2020 | Sep. 30, 2021 |
Arqit Limited | ||
Disclosure of joint ventures [line items] | ||
Percentage of ownership interest in subsidiary | 100.00% | |
Arqit Inc. | ||
Disclosure of joint ventures [line items] | ||
Percentage of ownership interest in subsidiary | 100.00% | |
Arqit LLC | ||
Disclosure of joint ventures [line items] | ||
Percentage of ownership interest in subsidiary | 100.00% | |
Quantum Keep Limited | ||
Disclosure of joint ventures [line items] | ||
Ownership interest in joint venture | 50.00% | 50.00% |
Fixed asset investments - Subsi
Fixed asset investments - Subsidiaries (Details) | 12 Months Ended |
Sep. 30, 2021 | |
Arqit Limited | |
Disclosure of joint ventures [line items] | |
Percentage of ownership interest in subsidiary | 100.00% |
Arqit Inc. | |
Disclosure of joint ventures [line items] | |
Percentage of ownership interest in subsidiary | 100.00% |
Arqit LLC | |
Disclosure of joint ventures [line items] | |
Percentage of ownership interest in subsidiary | 100.00% |
Trade and other receivables (De
Trade and other receivables (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets | |||
Trade debtors | $ 56,591 | ||
Other debtors | 856,591 | $ 151,895 | $ 883,522 |
Prepayments and accrued income | 2,379,128 | 128,695 | 13,903 |
Total | 3,292,310 | $ 280,590 | $ 897,425 |
Non-current Assets | |||
Prepayments | 5,000,000 | ||
Total | $ 5,000,000 |
Trade and other payables (Detai
Trade and other payables (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Trade and other payables | |||
Trade payables | $ 9,748,069 | $ 256,830 | $ 252,768 |
Other tax and social security | 410,022 | 331,495 | 69,578 |
Other creditors | 1,018,816 | 41,640 | 2,182 |
Accruals | 3,235,742 | 195,715 | 1,981,858 |
Deferred income | 2,656,007 | 1,560,097 | 1,491,900 |
Total trade and other current payables | 17,068,656 | 2,385,777 | 3,798,286 |
Non-current Liabilities | |||
Deferred government grants | 2,459,413 | 534,074 | 206,696 |
Total trade and other non-current payables | 2,459,413 | 534,074 | $ 206,696 |
Interest on convertible loan notes | 961,268 | ||
Deferred income recognised during the period | $ 0 | $ 0 |
Borrowings (Details)
Borrowings (Details) | Jan. 05, 2021USD ($) | Jan. 05, 2021GBP (£) | Oct. 31, 2020USD ($) | Oct. 31, 2020GBP (£) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020GBP (£) | Sep. 30, 2019USD ($) | Jun. 21, 2019USD ($) | Jun. 21, 2019GBP (£) | Mar. 22, 2018USD ($) | Mar. 22, 2018GBP (£) |
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Current liabilities | $ 5,459,972 | |||||||||||
Non-current Liabilities | $ 3,297,468 | |||||||||||
Fair Value | 6,871,006 | 4,708,502 | ||||||||||
Interest rate (in percent) | 8.00% | |||||||||||
Proceeds from loan | $ 5,041,971 | 1,033,632 | ||||||||||
Loan maturity term | 3 years | |||||||||||
Interest on convertible loan notes | $ 961,268 | |||||||||||
Bridging finance | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Current liabilities | 1,033,632 | |||||||||||
Fair Value | 1,033,632 | |||||||||||
Amount of loans issued | 1,033,632 | £ 800,000 | ||||||||||
Interest rate (in percent) | 0.00% | |||||||||||
Convertible loan notes A (treated as equity) | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Fair Value | 1,411,034 | 1,411,034 | ||||||||||
Amount of loans issued | $ 1,411,034 | £ 1,000,000 | ||||||||||
Interest rate (in percent) | 0.00% | 0.00% | ||||||||||
Redemption percentage on principal amount | 0.00% | |||||||||||
Convertible loan notes B | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Current liabilities | 4,426,340 | |||||||||||
Non-current Liabilities | 3,297,468 | |||||||||||
Fair Value | 4,426,340 | $ 3,297,468 | ||||||||||
Amount of loans issued | $ 646,020 | £ 500,000 | $ 3,876,120 | £ 3,000,000 | ||||||||
Interest rate (in percent) | 0.00% | |||||||||||
Redemption percentage on principal amount | 20.00% | |||||||||||
Unsecured convertible loan | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Proceeds from loan | $ 2,694,800 | £ 2,000,000 | $ 11,452,900 | £ 8,500,000 |
Cash generated from operation_2
Cash generated from operations (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2018 | Sep. 30, 2018 | |
Cash generated from operations | |||||
(Loss) / profit before tax | $ 783,847 | $ (271,729,101) | $ (1,136,853) | ||
Adjustments for: | |||||
Depreciation | 308 | 52,550 | 4,787 | ||
Change in trade and other receivables | (57,608) | (6,131,559) | (173,204) | ||
Change in trade and other payables | 3,632,800 | (1,289,125) | (1,283,887) | ||
Share option charge | 11,392 | 165,570 | 121,597 | ||
Finance income | (510,252) | (64,902) | |||
Interest payable | 88,466 | 1,078,070 | 392,783 | ||
Change in fair value of warrants | 98,090,070 | ||||
IFRS 2 adjustment relating to reverse acquisition | 155,459,939 | ||||
Cash (used in)/generated from operations | 3,948,953 | (24,303,586) | (2,139,679) | ||
Reconciliation of net cashflow to movements in net debt: | |||||
Opening net cash/(debt) | (5,265,371) | 929,056 | |||
Convertible facilities received | 3,706,686 | 14,147,700 | 1,679,652 | ||
Borrowings received | (5,041,971) | ||||
Net interest charge | 409,218 | (99,904) | 332,124 | ||
Facilities converted | 18,863,600 | ||||
Repayments of borrowings | 6,119,891 | ||||
Movement in cash | 3,916,045 | 86,765,376 | (4,225,118) | ||
Movement on foreign exchange | (228,132) | 42,468 | |||
Movement in net cash/ (debt) | 618,577 | 92,231,160 | (6,194,427) | ||
Closing net cash/(debt) | 929,056 | 86,965,789 | (5,265,371) | ||
Composition of closing net cash/(debt) | |||||
Cash | 4,226,524 | 86,965,789 | 194,602 | $ 310,479 | |
Bank loans | (1,033,632) | ||||
Convertible loans | (3,297,468) | (4,426,340) | |||
Net cash/(debt) | $ 929,056 | $ 86,965,789 | $ (5,265,371) | $ 310,479 |
Warrant Liability (Details)
Warrant Liability (Details) | 1 Months Ended |
Sep. 30, 2021USD ($)shares | |
Warrant Liability | |
At date of acquisition (3 September 2021) | $ | $ 29,948,361 |
Change in fair value of warrant liability | $ | 98,090,071 |
Balance at 30 September 2021 | $ | $ 128,038,432 |
Public Warrants | |
Warrant Liability | |
Number of warrants | 8,624,973 |
Change in number of warrants | 8,624,973 |
Number Of Warrant Issued | 8,624,973 |
Private Warrants | |
Warrant Liability | |
Number of warrants | 6,266,667 |
Change in number of warrants | 6,266,667 |
Number Of Warrant Issued | 6,266,667 |
Warrant Liability - Additional
Warrant Liability - Additional Information (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021D$ / sharesshares | Sep. 30, 2019 | Sep. 30, 2021$ / sharesshares | Sep. 30, 2020 | |
IFRS Class of Warrant or Right [Line Items] | ||||
Warrants exercisable term from the closing of the initial public offering | 1 year | |||
Warrants exercisable term from business combination | 30 days | |||
Warrants expiration term | 5 years | |||
Number of shares issuable per warant | shares | 1 | 1 | ||
Exercise price | $ / shares | $ 11.50 | $ 11.50 | ||
Redemption notice period | 30 days | |||
Number of days of volume-weighted average price of the shares | 10 | |||
Threshold trading days following the notice of redemption | 10 | |||
Dividend yield (as percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Volatility (as percent) | 40.00% | 50.00% | 50.00% | 50.00% |
Risk-free rate (as percent) | 0.98% | 0.10% | 0.10% | 0.10% |
Redemption Of Warrants When Price Per Share Of Class Common Stock Equals Or Exceeds 10.00 But Less Than 18.00 | ||||
IFRS Class of Warrant or Right [Line Items] | ||||
Stock price trigger for redemption of warrants (in dollars per share) | $ / shares | $ 10 | |||
Public Warrants | Redemption Of Warrants When Price Per Share Of Class Common Stock Equals Or Exceeds 10.00 But Less Than 18.00 | ||||
IFRS Class of Warrant or Right [Line Items] | ||||
Redemption price per warrant (in dollars per share) | $ / shares | 0.10 | |||
Stock price trigger for redemption of warrants (in dollars per share) | $ / shares | $ 10 | |||
Threshold trading days for redemption of warrants | 20 | |||
Threshold consecutive trading days for redemption of warrants | 30 | |||
Threshold trading days for sending notice of redemption | 3 | |||
Public Warrants | Redemption Of Warrants When Price Per Share Of Class Common Stock Exceeds 18.00 | ||||
IFRS Class of Warrant or Right [Line Items] | ||||
Redemption price per warrant (in dollars per share) | $ / shares | $ 0.01 | |||
Stock price trigger for redemption of warrants (in dollars per share) | $ / shares | $ 18 | |||
Threshold trading days for redemption of warrants | 20 | |||
Threshold consecutive trading days for redemption of warrants | 30 | |||
Threshold trading days for sending notice of redemption | 3 | |||
Private Warrants | Redemption Of Warrants When Price Per Share Of Class Common Stock Equals Or Exceeds 10.00 But Less Than 18.00 | ||||
IFRS Class of Warrant or Right [Line Items] | ||||
Redemption price per warrant (in dollars per share) | $ / shares | $ 0.10 | |||
Stock price trigger for redemption of warrants (in dollars per share) | $ / shares | $ 10 | |||
Threshold trading days for redemption of warrants | 20 | |||
Threshold consecutive trading days for redemption of warrants | 30 | |||
Threshold trading days for sending notice of redemption | 3 | |||
Private Warrants | Redemption Of Warrants When Price Per Share Of Class Common Stock Exceeds 18.00 | ||||
IFRS Class of Warrant or Right [Line Items] | ||||
Stock price trigger for not redeeming of warrants (in dollars per share) | $ / shares | $ 18 |
Share-based payments (Details)
Share-based payments (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019item€ / shares | Sep. 30, 2021item€ / shares | Sep. 30, 2021item$ / shares | Sep. 30, 2020item€ / shares | |
Share-based payments | ||||
Outstanding at beginning of period (in shares) | 8,700 | 161,250 | 161,250 | 72,700 |
Granted during the period (in shares) | 64,000 | 55,210 | 55,210 | 88,550 |
Forfeited/lapsed during the period (in shares) | (32,963) | (32,963) | ||
Outstanding at end of period (in shares) | 72,700 | 183,497 | 183,497 | 161,250 |
Exercisable at end of period (in shares) | 17,167 | 17,167 | ||
Outstanding at beginning of period (in dollars per share) | € / shares | € 0.0001 | € 0.0001 | € 0.0001 | |
Granted during the period (in dollars per share) | € / shares | 0.0001 | 0.0001 | 0.0001 | |
Forfeited/lapsed during the period (in dollars per share) | € / shares | 0.0001 | |||
Outstanding at end of period (in dollars per share) | (per share) | € 0.0001 | € 0.0001 | $ 0.0001 | € 0.0001 |
Share-based payments - Addition
Share-based payments - Additional information (Details) | 12 Months Ended | ||||
Sep. 30, 2021€ / shares | Sep. 30, 2021$ / shares | Sep. 30, 2020€ / shares | Sep. 30, 2019€ / shares | Dec. 31, 2018€ / shares | |
Share-based payments | |||||
Weighted average exercise price | (per share) | € 0.0001 | $ 0.0001 | € 0.0001 | € 0.0001 | € 0.0001 |
Weighted average remaining contractual life | 4 years |
Share-based payments - Inputs i
Share-based payments - Inputs into black scholes model (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2019€ / shares | Sep. 30, 2021Y€ / shares | Sep. 30, 2020Y€ / shares | Sep. 30, 2019Y | |
Share-based payments | |||||
Weighted average share price () | € 2.95 | € 3.30 | € 3.30 | ||
Weighted average exercise price () | € 0.0001 | € 0.0001 | € 0.0001 | ||
Expected volatility | 40.00% | 50.00% | 50.00% | 50.00% | |
Expected life | Y | 5 | 5 | 5 | ||
Risk-free rate | 0.98% | 0.10% | 0.10% | 0.10% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Share-based payments - Share op
Share-based payments - Share option charge included in administrative expenses (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based payments | |||
Share option charge included in administrative expenses | $ 11,392 | $ 165,570 | $ 121,597 |
Staff costs and average numbe_3
Staff costs and average number of employees (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
The aggregate remuneration comprised: | |||
Wages and salaries | $ 377,383 | $ 9,531,933 | $ 2,620,476 |
Social security costs | 37,639 | 1,238,459 | 336,076 |
Pension costs | 40,639 | 165,178 | 133,539 |
Share option charge | 11,392 | 165,570 | 121,597 |
Staff costs | $ 467,053 | $ 11,101,140 | $ 3,211,688 |
Staff costs and average numbe_4
Staff costs and average number of employees - Additional information (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($)Y | Sep. 30, 2021USD ($)Y | Sep. 30, 2020USD ($)Y | |
Staff costs and average number of employees | |||
Total staff costs capitalised as relating to development costs within intangibles within the year | $ 417,157 | $ 3,478,034 | $ 1,533,915 |
Average monthly number of professional employees | Y | 6 | 59 | 16 |
Total remuneration for key management personnel | $ 486,764 | $ 3,330,858 | $ 1,258,504 |
Total pension contributions of key management personnel | 40,835 | 86,062 | 118,519 |
Total share options were granted to key management personnel | $ 12,500 | $ 15,000 | $ 32,500 |
Staff costs and average numbe_5
Staff costs and average number of employees - Remuneration payable to directors (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Staff costs and average number of employees | |||
Directors' remuneration | $ 486,764 | $ 1,971,580 | $ 1,012,864 |
Highest paid Director's remuneration | $ 203,930 | $ 699,325 | $ 377,168 |
Deferred Tax (Details)
Deferred Tax (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Sep. 30, 2020 | |
Deferred Tax | ||
At the beginning of the period | $ 550,718 | |
Movement in the year recognised in profit or loss | $ 567,632 | (568,534) |
Foreign exchange on translation | (16,914) | $ (17,816) |
At the end of the year | $ 550,718 |
Deferred Tax - Deferred tax lia
Deferred Tax - Deferred tax liability (asset) (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax | $ 550,718 | ||
Intangible asset timing differences | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax | $ 4,685,158 | $ 1,581,987 | |
Unrelieved tax losses | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Deferred tax | $ (4,685,158) | $ (1,581,987) |
Share capital - issued share ca
Share capital - issued share capital of Arqit Limited (Details) | Sep. 02, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021EUR (€)shares | Apr. 25, 2021$ / shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2020EUR (€)€ / sharesshares | Sep. 30, 2019USD ($) |
Disclosure of classes of share capital [line items] | |||||||
Number of ordinary shares | 12,973,270 | 110,073,430 | |||||
Par value per share | (per share) | $ 0.0001 | $ 0.0001 | $ 1 | € 0.0001 | |||
Increase in share premium | $ | $ 70,999,290 | ||||||
At 1 October 2020 - par value 0.0001 | 12,973,270 | 110,073,430 | |||||
Share capital | $ 11,007 | $ 158 | € 129 | $ 158 | |||
Conversion of convertible loan notes | 98 | € 71 | |||||
Exchanged for shares in the Company in reverse acquisition | $ 256 | 200 | |||||
Distribution of amount to holders for holding of deferred shares on winding up | € | € 1 | ||||||
Ordinary shares | |||||||
Disclosure of classes of share capital [line items] | |||||||
Number of ordinary shares | 1,286,600 | 1,286,600 | |||||
At 1 October 2020 - par value 0.0001 | 1,286,600 | 1,286,600 | |||||
Conversion of convertible loan notes | 710,074 | 710,074 | |||||
Deferred shares issued | (42,500) | (42,500) | |||||
Exchanged for shares in the Company in reverse acquisition | 1,954,174 | 1,954,174 | |||||
Deferred shares | |||||||
Disclosure of classes of share capital [line items] | |||||||
Deferred shares issued | 42,500 | 42,500 | |||||
Exchanged for shares in the Company in reverse acquisition | 42,500 | 42,500 | |||||
Private placement | |||||||
Disclosure of classes of share capital [line items] | |||||||
Number of ordinary shares | 7,100,000 | ||||||
At 1 October 2020 - par value 0.0001 | 7,100,000 |
Share capital - share capital (
Share capital - share capital (Details) | 5 Months Ended | |||
Sep. 30, 2021USD ($)$ / sharesshares | Sep. 02, 2021$ / shares | Apr. 25, 2021$ / shares | Sep. 30, 2020€ / shares | |
Disclosure of detailed information about business combination [line items] | ||||
Par value per share | (per share) | $ 0.0001 | $ 0.0001 | $ 1 | € 0.0001 |
Arqit Quantum Inc | ||||
Disclosure of detailed information about business combination [line items] | ||||
Inception, April 26, 2021 - par value $1 | 1 | |||
Treasury shares | shares | (1) | |||
Shares issued | shares | 90,000,000 | |||
September 30, 2021 - par value $0.0001 | 110,073,430 | |||
Inception, April 26, 2021 - par value $1 | $ 1 | |||
Treasury shares | (1) | |||
Shares issued | 9,000 | |||
September 30, 2021 - par value $0.0001 | $ 11,007 | |||
Centricus [Member] | ||||
Disclosure of detailed information about business combination [line items] | ||||
Shares issued | shares | 12,973,430 | |||
Shares issued | $ 1,297 | |||
PIPE investors [Member] | ||||
Disclosure of detailed information about business combination [line items] | ||||
Shares issued | shares | 7,100,000 | |||
Shares issued | $ 710 |
Retained earnings (Details)
Retained earnings (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Retained earnings | ||||
Balance at the beginning | $ (954,740) | $ (485,494) | $ 82,825 | |
Profit / (loss) for the year | $ 651,973 | 1,037,565 | (271,729,101) | (568,319) |
Balance at the end | $ (272,214,595) | $ 82,825 | $ (272,214,595) | $ (485,494) |
Reserves (Details)
Reserves (Details) | Sep. 30, 2021GBP (£) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Reserves | |||
Convertible loan notes treated as equity | £ 1,000,000 | $ 1,411,034 | $ 1,411,034 |
Financial instruments and fai_3
Financial instruments and fair value disclosures (Details) - Financial assets at amortised cost - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Disclosure of financial assets [line items] | |||
Carrying value | $ 87,022,380 | $ 410,437 | $ 5,110,046 |
Fair value | 87,022,380 | 410,437 | 5,110,046 |
Cash and cash equivalents | |||
Disclosure of financial assets [line items] | |||
Carrying value | 86,965,789 | 194,602 | 4,226,524 |
Fair value | 86,965,789 | 194,602 | 4,226,524 |
Trade and other receivables | |||
Disclosure of financial assets [line items] | |||
Carrying value | 56,591 | 215,835 | 883,522 |
Fair value | $ 56,591 | $ 215,835 | $ 883,522 |
Financial instruments and fai_4
Financial instruments and fair value disclosures - Financial liabilities at amortised cost (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Disclosure of financial liabilities [line items] | |||
Fair value | $ 6,871,006 | $ 4,708,502 | |
Financial liabilities at amortised cost | |||
Disclosure of financial liabilities [line items] | |||
Carrying value | $ 19,118,046 | 8,048,327 | 7,232,871 |
Fair value | 19,118,046 | 8,048,327 | 7,232,871 |
Trade and other payables | Financial liabilities at amortised cost | |||
Disclosure of financial liabilities [line items] | |||
Carrying value | 16,658,633 | 2,054,281 | 3,728,707 |
Fair value | 16,658,633 | 2,054,281 | 3,728,707 |
Deferred government grants | Financial liabilities at amortised cost | |||
Disclosure of financial liabilities [line items] | |||
Carrying value | 2,459,413 | 534,074 | 206,696 |
Fair value | $ 2,459,413 | 534,074 | 206,696 |
Bridging finance | Financial liabilities at amortised cost | |||
Disclosure of financial liabilities [line items] | |||
Carrying value | 1,033,632 | ||
Fair value | 1,033,632 | ||
Convertible loans | Financial liabilities at amortised cost | |||
Disclosure of financial liabilities [line items] | |||
Carrying value | 4,426,340 | 3,297,468 | |
Fair value | $ 4,426,340 | $ 3,297,468 |
Financial instruments and fai_5
Financial instruments and fair value disclosures - Financial liabilities at fair value through profit or loss (Details) | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Disclosure of fair value measurement of assets [line items] | |
Discount rate of fair value of public warrant | 7.50% |
Warrant liability | |
Disclosure of fair value measurement of assets [line items] | |
Financial liabilities at fair value through profit or loss | $ 128,038,431 |
Fair Value | Warrant liability | Level 2 | |
Disclosure of fair value measurement of assets [line items] | |
Financial liabilities at fair value through profit or loss | 75,899,762 |
Fair Value | Warrant liability | Level 3 | |
Disclosure of fair value measurement of assets [line items] | |
Financial liabilities at fair value through profit or loss | $ 52,138,669 |
Financial instruments and fai_6
Financial instruments and fair value disclosures - Foreign Exchange risk (Details) £ in Thousands | Sep. 30, 2021GBP (£) |
Disclosure of sensitivity analysis to changes in risk exposures that arise from contracts within scope of IFRS 17 [line items] | |
Amount of exposure on net monetary position | £ 23,019 |
Reasonable shift | |
Disclosure of sensitivity analysis to changes in risk exposures that arise from contracts within scope of IFRS 17 [line items] | |
Percentage of reasonably possible increase decrease in effect of loss | 5.88% |
Effect on Loss of +ve movements | |
Disclosure of sensitivity analysis to changes in risk exposures that arise from contracts within scope of IFRS 17 [line items] | |
Financial Instruments effect of loss of Positive movements | £ (1,353) |
Effect on Loss of -ve movements | |
Disclosure of sensitivity analysis to changes in risk exposures that arise from contracts within scope of IFRS 17 [line items] | |
Financial Instruments effect of loss of negative movements | 1,353 |
UK subsidiary | |
Disclosure of sensitivity analysis to changes in risk exposures that arise from contracts within scope of IFRS 17 [line items] | |
Amount of exposure on net monetary position | £ 23,019 |
Financial instruments and fai_7
Financial instruments and fair value disclosures - Liquidity risk (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | $ 19,528,068 | $ 8,379,823 | $ 7,302,450 |
Within one year | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 17,068,655 | 7,845,749 | 3,798,286 |
More than one year but less than two years | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 3,297,468 | ||
More than two years but less than five years | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 2,459,413 | 534,074 | 206,696 |
Trade and other payables | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 17,068,655 | 2,385,777 | 3,798,286 |
Trade and other payables | Within one year | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 17,068,655 | 2,385,777 | 3,798,286 |
Deferred government grants | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 2,459,413 | 534,074 | 206,696 |
Deferred government grants | More than two years but less than five years | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | $ 2,459,413 | 534,074 | 206,696 |
Loans | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 1,033,632 | ||
Loans | Within one year | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 1,033,632 | ||
Convertible loans | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | 4,426,340 | 3,297,468 | |
Convertible loans | Within one year | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | $ 4,426,340 | ||
Convertible loans | More than one year but less than two years | |||
Disclosure of maturity analysis for derivative financial liabilities [line items] | |||
Maturity profile of the anticipated future cash flows including interest, using the latest applicable relevant rate, based on the earliest date on which the Company can be required to pay financial liabilities on an undiscounted basis | $ 3,297,468 |
Post balance sheet events (Deta
Post balance sheet events (Details) - Arqit Limited | 12 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Disclosure of non-adjusting events after reporting period [line items] | |
Period for earnout consideration | 3 years |
Minimum share price for earnout consideration | $ / shares | $ 12.50 |
Threshold trading days for closing price of shares, earnout consideration | 20 days |
Threshold consecutive trading days for closing price of shares, earnout consideration | 30 days |
Number of earnout shares | shares | 10,000,000 |
Earnout Condition | |
Disclosure of non-adjusting events after reporting period [line items] | |
Period for earnout consideration | 3 years |
Minimum share price for earnout consideration | $ / shares | $ 12.50 |
Threshold trading days for closing price of shares, earnout consideration | 20 days |
Threshold consecutive trading days for closing price of shares, earnout consideration | 30 days |
Number of earnout shares | shares | 10,000,000 |
Related party transactions (Det
Related party transactions (Details) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Aug. 20, 2021GBP (£) |
Disclosure of transactions between related parties [line items] | ||||
Borrowings interest rate | 8.00% | 8.00% | ||
Arqit PTE | ||||
Disclosure of transactions between related parties [line items] | ||||
Amount paid to related party | $ 11,679 | $ 7,982 | ||
Arqit PTE | David Williams | ||||
Disclosure of transactions between related parties [line items] | ||||
Percentage of ownership interest held | 50 | |||
Amount receivable | 20,673 | |||
Related party transaction loans | £ | £ 2,000,000 | |||
Borrowings interest rate | 8.00% | |||
Interest paid on borrowings | $ 14,401 | |||
Fee charged on borrowings | 88,800 | |||
Arqit PTE | David Bestwick | ||||
Disclosure of transactions between related parties [line items] | ||||
Percentage of ownership interest held | 50 | |||
Related party transaction loans | £ | £ 2,000,000 | |||
Borrowings interest rate | 8.00% | |||
Interest paid on borrowings | 14,401 | |||
Fee charged on borrowings | $ 88,800 | |||
Arqit PTE | Lt General VL Jamieson | ||||
Disclosure of transactions between related parties [line items] | ||||
Amount paid to Director | $ 103,861 | 0 | ||
Arqit PTE | General S Wilson | ||||
Disclosure of transactions between related parties [line items] | ||||
Amount paid to Director | $ 73,398 | $ 0 |