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LONDON, May 12, 2022 (GLOBE NEWSWIRE) -- Arqit Quantum Inc. (Nasdaq: ARQQ, ARQQW) (Arqit), a global leader in quantum encryption technology, today announced its operational and financial results for the first half of its fiscal year ending (FYE) 30 September 2022.

Recent Operational Highlights

Management Commentary

Arqit has made significant progress in the commercialisation of our QuantumCloudTM product in the first six months of this fiscal year, said David Williams, Arqits Founder, Chairman and Chief Executive Officer. In the period we signed and fulfilled contracts with leading enterprises in our key identified market sectors, including Virgin Orbit and AUCloud. We also began the process of demonstrating our stronger, simpler encryption in demonstration projects with numerous customers. As a result of our commercial sales and other activities, we are pleased to deliver $12.3 million in revenue and other operating income for the six-month period.

Our contract wins, other announced activity, such as our participation in the UK Ministry of Defence multi-domain integration project and UK 5G Open RAN, and prospective customer dialogues confirm our belief that telecoms, defence, financial institutions and IoT are the early adopter markets that understand the issues with todays public key infrastructure and the future threat posed by quantum computers.

Our symmetric key agreement service is increasingly being recognised as a solution that meets the moment it is computationally light, quantum safe, available in the instant needed as a single use key or in unlimited group sizes and does not require changes to the existing AES256 encryption infrastructure.

We are pleased to have hired a significant cohort of new senior sales executives in the first half of the fiscal year to complement our team. All have deep relationships within their respective geographies and industry verticals. As our focus is on driving sales, top sales talent is a must.

The confidence in Arqit is shared by our investors. Today, we also announced that shareholders holding 105.9 million of the 108.6 million shares currently subject to lock-up agreements that were due to expire in connection with this results announcement were approached to voluntarily extend their lock-up agreements until September. All approached shareholders agreed to participate, which is a strong statement of support.

We will look to continue the momentum we have created in H1 as we drive toward our fiscal year end in September.

First Half of Fiscal Year 2022 Financial Highlights

Arqit commenced commercialisation and began generating revenue in the second half of the fiscal year ended 30 September 2021. Therefore, comparison of our results for the six months ended 31 March 2022 to prior periods may not be meaningful for all financial metrics.

1 Administrative expenses are equivalent to operating expenses.

2 Adjusted loss before tax is a non-IFRS measure. For a discussion of this measure, how its calculated and a reconciliation to the most comparable measure calculated in accordance with IFRS, please see Use of Non-IFRS Financial Measures below.

Conference Call Information

Date: Thursday, May 12, 2022Time: 11:00 a.m. Eastern time (8:00 a.m. Pacific time) Webcast Event: Link U.S. dial-in: (877) 356-5689International dial-in: (630) 652-5960Conference ID: 4652829

The conference call will be available via the webcast link located in the Investor Relations section of Arqits website at arqit.uk.

For the conference call, please dial-in 5-10 minutes prior to the start time and an operator will register your name and organisation, or you can register here. If you have any difficulty with the conference call, please contact Gateway at (949) 574-3860.

A telephonic replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through 2:00 p.m. Eastern time on May 19, 2022.

Toll-free replay number: (855) 859-2056International replay number: (404) 537-3406Replay ID: 4652829

About Arqit

Arqit supplies a unique quantum encryption platform-as-a-service which makes the communications links of any networked device secure against current and future forms of attack even from a quantum computer.Arqits product, QuantumCloud, enables any device to download a lightweight software agent, which can create encryption keys in partnership with any other device.The keys are computationally secure, optionally one-time use and zero trust.QuantumCloud can create limitless volumes of keys in limitless group sizes and can regulate the secure entrance and exit of a device in a group.The addressable market for QuantumCloud is every connected device.

Media relations enquiries:Arqit: contactus@arqit.ukFTI Consulting: scarqit@fticonsulting.com

Investor relations enquiries:Arqit: investorrelations@arqit.uk Gateway: arqit@gatewayir.com

Use of Non-IFRS Financial Measures

Arqit presents adjusted loss before tax, which is a financial measure not calculated in accordance with IFRS. Although Arqit's management uses this measure as an aid in monitoring Arqit's on-going financial performance, investors should consider adjusted loss before tax in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with IFRS. Adjusted loss before tax is defined as loss before tax excluding change in fair value of warrants, which is a non-cash expense. There are limitations associated with the use of non-IFRS financial measures, including that such measures may not be comparable to similarly titled measures used by other companies due to potential differences among calculation methodologies. There can be no assurance whether (i) items excluded from the non-IFRS financial measures will occur in the future, or (ii) there will be cash costs associated with items excluded from the non-IFRS financial measures. Arqit compensates for these limitations by using adjusted loss before tax as a supplement to IFRS loss before tax and by providing the reconciliation for adjusted loss before tax to IFRS loss before tax, as the most comparable IFRS financial measure.

IFRS and Non-IFRS loss before tax

Arqit presents its consolidated statement of comprehensive income according to IFRS and in line with SEC guidance. Consequently, the changes in warrant values are included within that statement in arriving at profit before tax. The changes in warrant values are non-cash expenses. After this adjustment is made to Arqits IFRS profit before tax of $58.0 million, Arqits non-IFRS adjusted loss before tax is $14.4 million, as shown in the reconciliation table below.

The change in fair value of warrants arises as IFRS requires our outstanding warrants to be carried at fair value within liabilities with the change in value from one reporting date to the next being reflected against profit or loss in the period. It is non-cash and will cease when the warrants are exercised, are redeemed or expire.

Other Accounting Information

As of March 31, 2022, we had $87.4 million of total liabilities, $55.6 million of which related to our outstanding warrants, which are classified as liabilities rather than equity according to IFRS and SEC guidance. The warrant liability amount reflected in our consolidated statement of financial position is calculated as the fair value of the warrants as of March 31, 2022. Our liabilities other than warrant liabilities were $31.8 million, and we had total assets of $143.2 million including cash of $82 million.

Caution About Forward-Looking Statements

This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These forward-looking statements are based on Arqits expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Arqits control. Forward-looking statements in this communication or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Arqit to predict these events or how they may affect it. Except as required by law, Arqit does not have any duty to, and does not intend to, update or revise the forward-looking statements in this communication or elsewhere after the date this communication is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this communication may not occur. Uncertainties and risk factors that could affect Arqits future performance and cause results to differ from the forward-looking statements in this release include, but are not limited to: (i) the outcome of any legal proceedings that may be instituted against the Arqit related to the business combination, (ii) the ability to maintain the listing of Arqits securities on a national securities exchange, (iii) changes in the competitive and regulated industries in which Arqit operates, variations in operating performance across competitors and changes in laws and regulations affecting Arqits business, (iv) the ability to implement business plans, forecasts, and other expectations, and identify and realise additional opportunities, (v) the potential inability of Arqit to convert its pipeline into contracts or orders in backlog into revenue, (vi) the potential inability of Arqit to successfully deliver its operational technology which is still in development, (vii) the risk of interruption or failure of Arqits information technology and communications system, (viii) the enforceability of Arqits intellectual property, and (ix) other risks and uncertainties set forth in the sections entitled Risk Factors and Cautionary Note Regarding Forward-Looking Statements in Arqits annual report on Form 20-F (the Form 20-F), filed with theU.S. Securities and Exchange Commission(the SEC) onDecember 16, 2021and in subsequent filings with theSEC. While the list of factors discussed above and in the Form 20-F and other SEC filings are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realisation of forward-looking statements.

Arqit Quantum Inc.Condensed Consolidated Statement of Comprehensive Income For the period ended 31 March 2022

Unauditedsix monthperiod ended31 March 2022

Unauditedsix monthperiod ended31 March 2021

All of the Groups activities were derived from continuing operations during the above financial periods.

Arqit Quantum Inc.Condensed Consolidated Statement of Financial Position As at 31 March 2022

Arqit Quantum Inc.

Condensed Consolidated Statement of Cash FlowsFor the period ended 31 March 2022

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Arqit Quantum Inc. Announces Financial and Operational Results for the First Half of Fiscal Year 2022 - GlobeNewswire