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Arqit Quantum (ARQQ) - 2023 Q4 - Annual Report
ARQQArqit Quantum (ARQQ)2023-11-21 11:52

Cash Flow Activities - Arqit's cash used in operating activities was 32.825millionfortheyearendedSeptember30,2023,primarilyduetoanetlossof32.825 million for the year ended September 30, 2023, primarily due to a net loss of 74.049 million and non-cash adjustments of 37.708million[311]−Netcashusedininvestingactivitieswas37.708 million[311] - Net cash used in investing activities was 16.082 million for the year ended September 30, 2023, a decrease from 24.432millionin2022duetolowercapitalexpenditureandstaffcosts[313][315]−Netcashgeneratedfromfinancingactivitieswas24.432 million in 2022 due to lower capital expenditure and staff costs[313][315] - Net cash generated from financing activities was 44.853 million for the year ended September 30, 2023, primarily from share issuances under the ATM Program and registered direct offerings[316][318] Share Issuances and Offerings - Arqit issued 7,814,459 shares under its ATM Program in 2023, generating proceeds of approximately 11.5millionbeforefeesandexpenses[306]−InFebruary2023,Arqitcompletedaregistereddirectoffering,selling10,000,000ordinarysharesandwarrants,generatingproceedsofapproximately11.5 million before fees and expenses[306] - In February 2023, Arqit completed a registered direct offering, selling 10,000,000 ordinary shares and warrants, generating proceeds of approximately 20.0 million[307] - In September 2023, Arqit completed another registered direct offering, selling 20,755,677 ordinary shares and warrants, generating proceeds of approximately 16.2million[309]FinancialInstrumentsandRiskManagement−Arqit′sfinancialinstrumentsprimarilyconsistofcashandcashequivalents,withnosignificantexposuretointerestrateriskorcreditrisk[295][296][297]−ArqitisexposedtoforeignexchangeriskprimarilywithrespecttoBritishpoundssterlingandEuro,andmanagesthisriskbyholdingmulti−currencybankaccounts[298]RegulatoryandReportingStatus−Arqitqualifiesasan"emerginggrowthcompany"undertheJOBSAct,allowingittorelyonreducedreportingrequirementsuntilSeptember3,2026[302][303]ResearchandDevelopmentCosts−Arqit′sresearchcostsareexpensedasincurred,whiledevelopmentcostsarecapitalizedaftertechnicalandcommercialfeasibilityareestablished[319]−CapitalizeddevelopmentcostsasofSeptember30,2023,were16.2 million[309] Financial Instruments and Risk Management - Arqit's financial instruments primarily consist of cash and cash equivalents, with no significant exposure to interest rate risk or credit risk[295][296][297] - Arqit is exposed to foreign exchange risk primarily with respect to British pounds sterling and Euro, and manages this risk by holding multi-currency bank accounts[298] Regulatory and Reporting Status - Arqit qualifies as an "emerging growth company" under the JOBS Act, allowing it to rely on reduced reporting requirements until September 3, 2026[302][303] Research and Development Costs - Arqit's research costs are expensed as incurred, while development costs are capitalized after technical and commercial feasibility are established[319] - Capitalized development costs as of September 30, 2023, were 3.414 million, down from 40.291millionin2022and40.291 million in 2022 and 18.235 million in 2021[327] Compensation and Valuation Models - Share-based compensation fair value is estimated using the Black Scholes model, with assumptions disclosed in audited financial statements[328] - Compensation expense for RSUs is based on the market price of shares at grant date and expensed over a one to five-year vesting period[329] Tax and Asset Valuation - Deferred tax assets recognition depends on the likelihood of generating sufficient taxable earnings in future periods[330] - Assets held for sale are recognized at fair value less costs to sell, with potential revisions due to changes in the economic environment[331]