SCHEDULE 13D/A: Evolution Technology Fund II Reports Reduced Stake in Arqit Quantum Below 5% Threshold Following Dilution and Reverse Split

Sentiment:

Beneficial Ownership Amendment 10 February 2025 9:38 PM

The Evolution Technology Fund II SCSP and Evolution Equity Partners II SARL have reported a decrease in their beneficial ownership of Arqit Quantum Inc. ordinary shares to 3.1%, falling below the 5% threshold due to share dilution and a reverse stock split.

Capital raiseThe document references 'dilution caused by the Issuer's sales of additional shares of its Ordinary Shares from time to time,' indicating past or ongoing capital raising activities through share issuance.

Worse than expectedThe Reporting Persons' aggregate percentage ownership decreased by over 1%, indicating a significant reduction in their relative stake.The decrease was caused by dilution from the Issuer's sales of additional shares, which negatively impacts existing shareholders' proportional ownership.The Issuer conducted a 25-for-1 Reverse Share Split, which is often a sign of a struggling stock price and can be viewed negatively by the market as it does not fundamentally improve company value.

Summary

The filing is Amendment No. 2 to a Schedule 13D, updating the beneficial ownership of Arqit Quantum Inc. by The Evolution Technology Fund II SCSP and Evolution Equity Partners II SARL (the "Reporting Persons").
As of the filing date, the Reporting Persons beneficially own 397,259 Ordinary Shares of Arqit Quantum Inc., representing 3.1% of the outstanding class.
The decrease in ownership percentage, which fell below the 5% threshold, is attributed to dilution from Arqit Quantum Inc.'s sales of additional shares and a 25-for-1 reverse share split that became effective on September 25, 2024.
The Reporting Persons ceased to be beneficial owners of more than five percent (5%) of Arqit Quantum Inc.'s Ordinary Shares on September 30, 2024.
The percentage ownership is based on 12,746,713 Ordinary Shares of Arqit Quantum Inc. outstanding as of January 27, 2025, as reported in the Issuer's Prospectus Supplement filed on January 29, 2025.

Sentiment

Score: 3

Explanation: The document reports a significant reduction in a major holder's stake, driven by share dilution and a reverse stock split. While a regulatory filing, the underlying events (dilution, reverse split) are generally viewed negatively by the market, indicating potential challenges for the company's stock performance and shareholder value.

Negatives

The Reporting Persons' aggregate percentage ownership decreased by over one percent (1%) due to dilution from the Issuer's sales of additional shares.
The Issuer conducted a 25-for-1 Reverse Share Split effective September 25, 2024, which can often be a negative signal indicating a low share price or efforts to meet listing requirements.

Risks

Shareholders face dilution risk due to the Issuer's ongoing sales of additional Ordinary Shares.
The reverse stock split may be perceived negatively by the market, potentially indicating underlying financial challenges or a struggle to maintain a sufficient share price.

Future Outlook

Industry Context

Stakeholder Impact

Shareholders: Experience dilution from new share sales and a reverse stock split, which can negatively impact per-share value and market perception. The reduction in a significant holder's stake might also be seen as a negative signal regarding institutional confidence.

Key Dates

Date	Description
2021-09-21	Original Schedule 13D filed by the Reporting Persons.
2024-02-13	Amendment No. 1 to Schedule 13D filed by the Reporting Persons.
2024-09-25	Effective date of Arqit Quantum Inc.'s 25-for-1 Reverse Share Split.
2024-09-30	Date Reporting Persons ceased to be beneficial owners of more than 5% of Arqit Quantum Inc.'s Ordinary Shares.
2025-01-27	Date as of which 12,746,713 Ordinary Shares of Arqit Quantum Inc. were outstanding, as reported in the Prospectus.
2025-01-29	Date Arqit Quantum Inc.'s Prospectus Supplement was filed with the SEC.
2025-02-10	Date of filing of this Amendment No. 2 to Schedule 13D.

Recommendation

hold

Keywords

Arqit Quantum Inc., Evolution Technology Fund II SCSP, Evolution Equity Partners II SARL, Schedule 13D, Beneficial Ownership, Reverse Stock Split, Share Dilution, SEC Filing, Quantum Technology, Cybersecurity

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