TAMPA, Fla. — British cybersecurity software program developer Arqit is trying to promote a partly constructed satellite tv for pc after scrapping plans for a space-based quantum encryption community.
Arqit stated Dec. 14 it not wants satellites to ship encryption keys that may resist assaults from quantum computer systems.
As a substitute, the corporate stated it has developed a terrestrial distribution methodology that allows symmetric key cryptography with out the chance and prices of constructing out a quantum communications community in area.
“The safety of encryption keys created on the top factors [such as customer devices and data centers] utilizing our light-weight software program agent is as sturdy with a terrestrial methodology as with the satellite tv for pc methodology,” Arqit founder and CEO David Williams stated throughout the firm’s Dec. 14 earnings name.
The choice doesn’t have an effect on the development of a satellite tv for pc that Qinetiq is presently constructing beneath a contract partly funded by the European House Company.
SEC probe
The technique pivot got here as Arqit disclosed that the U.S. Securities and Alternate Fee is investigating its merger with Centricus Acquisition, a particular function acquisition firm (SPAC) that catapulted the startup to the NASDAQ inventory trade in September 2021.
Arqit stated in a regulatory submitting that it’s cooperating with the investigation, together with by voluntarily producing paperwork.
“The SEC has knowledgeable Arqit that this can be a fact-finding inquiry,” the corporate stated with out offering further particulars.
Arqit recorded income for its fiscal yr to the top of September that’s decrease than it projected in August 2021, throughout an investor presentation a month earlier than the SPAC merger to draw investor curiosity.
The corporate launched business operations this yr and recorded $7.2 million in income for its fiscal yr 2022, or $20 million when together with different revenue, together with funds from ESA.
Within the August 2021 presentation, Arqit stated it anticipated to generate $14 million in income for the 2021 calendar yr, and $32 million in 2022.
The corporate’s ESA contract was not too long ago reclassified as different revenue in Arqit’s accounts, as a substitute of income, partly as a result of the corporate doesn’t think about this work to be its main output.
Arqit stated in a regulatory submitting that additionally it is conscious of a putative class motion lawsuit in opposition to the corporate, filed in early Could, which alleges “materially false and deceptive statements referring to Arqit’s enterprise prospects and projections.”
Whereas Arqit stated it has not been served the grievance, and has no data about whether or not the lawsuit will proceed, it “intends to vigorously defend in opposition to these claims” if obligatory.
SPACs provide corporations a fast-track to the general public markets with out the extent of due diligence that accompanies conventional inventory market listings, enabling them to make optimistic progress projections to garner investor assist.
The recognition of SPACs amongst area and different corporations has been declining amid stricter rules, weakening financial situations, and the poor inventory efficiency of post-SPAC corporations.
Arqit’s satellite tv for pc pivot
Arqit stated there may be nonetheless demand for quantum encryption satellites, together with from authorities protection departments trying to keep away from sending knowledge visitors throughout worldwide cables.
As a substitute of constructing its personal satellites, Arqit intends to license the know-how it has developed for them to different organizations.
There are discussions with “quite a lot of potential clients” to purchase the satellite tv for pc that’s presently beneath development, in accordance with Arqit, and for licenses to make use of its quantum satellite tv for pc mental property.
Arqit had beforehand lined up Virgin Orbit, which had invested within the firm’s SPAC deal, to launch the satellite tv for pc in 2023.
“By means of innovation we now have simplified our know-how and eliminated important future capital expenditures,” Williams added.
Arqit not too long ago introduced buyer contracts with cybersecurity agency Fortinet, laptop developer Dell Applied sciences, and cloud large Amazon Internet Providers to make use of its safety software program.
The corporate’s shares closed at $5.15 Dec. 14, down 17% from the day earlier than, after falling from a excessive of $37.41 in December 2021.
