TIDMNARF
RNS Number : 7522N
Narf Industries PLC
27 September 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
27 September 2023
NARF INDUSTRIES PLC
INTERIM RESULTS
Narf Industries plc ("Narf", the "Company", or the "Group"),
(LSE: NARF) (OTCQB: NFIN.F) the cybersecurity group specializing in
high-end threat intelligence and critical infrastructure security,
today announces its unaudited results for the six months ended 30
June 2023 ("HY2023").
HY 2023 Highlights
-- Record revenue growth increasing by 125% to $3.26m (HY2022: $1.45m)
-- Management maintains full year guidance of at least $5.8 million revenue
-- EBITDA moves into positive territory of $190,000 (HY2022: loss $1.28m)
-- Operating expenses reduced by 11% to $2.39m (HY2022: $2.69m)
-- Cash and receivables at period end of $1.85m (HY2022: $2.04m)
Post Period End
-- Suspension lifted and trading of the Company's shares recommenced on 14 July
-- Awarded new Task Orders of $1.2 million under US Government
"Omnibus Contract" announced on 4 September
-- Adoption of employee share option plan to reward and
incentivize employees and directors announced on 11 September
-- Financial organization has matured with changes to accounting
systems providing prompt financial reporting and ongoing
strengthening of corporate governance
-- Challenges experienced in the 2022 audit have been addressed,
most significantly enabling auditor's access to all Company
contracts
-- Confident that full year revenue will be at least $5.8 million
Executive Chairman John Herring said: " Since assuming the role
of Executive Chairman earlier this year, I have worked to establish
clear financial expectations that are both realistic and aligned to
reflect the progress and milestone successes of our business
strategy.
"In my annual report statement in July, I set out specific
objectives we had set ourselves regarding revenue growth, expense
reduction and EBITDA performance. I am pleased to report that, at
the half-year point, our financial performance has met or exceeded
these targets resulting in the Company reporting record revenue
growth, reduced expenses, and positive EBITDA performance. We
therefore remain confident in our 2023 guidance of at least $5.8
million in revenue. This will be achieved through the growth we are
experiencing in both our Government Solutions and Services
(GS&S) and Government Research & Development (GR&D)
business.
"This performance and growth are driven and sustained
responsibly through internal cash generation and current credit
facilities and is being achieved, in part, by our CEO Steve Bassi
working to instill a culture of accountability, ambition and
diligence throughout the organization, and through the dedication
of our team of cybersecurity professionals working hard to deliver
cutting-edge capabilities and products that continue to gain
traction across an expanding customer base. I extend my thanks to
them all.
"Accompanying this growth, we have advanced the organization's
financial policies and processes to achieve consistent and
comprehensive record keeping that enables prompt financial
reporting. These actions, alongside enabling auditors' access to
all Company contracts, overcome the key challenges we faced in
timely completion of our 2022 audit.
"Looking ahead, we will uphold our dedication to responsible
growth and continue to share our progress and challenges openly
with our shareholders, who I thank for their continued
support."
S
For further information on the Group please visit
www.narfgroup.com or contact:
John Herring NARF jh@narfgroup.com
Catherine Leftley/Paul St Brides Partners narf@stbridespartners.co.uk
Dulieu /Isabel de Salis
------------------- ---------------------------
Peter Krens Tennyson Securities Tel: +44 (0)207 186 9030
------------------- ---------------------------
About NARF Industries plc
Narf Industries (LSE: NARF)(OTCQB: NFIN.F) is a US based cyber
security group specialising in high-end threat intelligence and is
commercialising a portfolio of products. The Group aims to further
strengthen its portfolio organically and via acquisition; its team
of highly qualified cyber security experts is well placed to
identify opportunities.
DIRECTORS REPORT AND STATEMENT OF DIRECTORS' RESPONSIBILITIES IN
RESPECT OF THE CONDENSED INTERIM REPORT AND CONDENSED FINANCIAL
STATEMENTS
The results of the Group have been addressed above in the
Chairman's statement. The total comprehensive loss for the
six-month period was $156,200 (interim period to 30 June 2022 :
restated loss of $16,661,899) and the Group's unaudited net assets
as at 30 June 2023 were $1,830,678 (30 June 2022: $3,584,056).
Directors
The following directors held office during the period:
Steven Bassi Chief Executive Officer
John Herring Executive Chairman
Rory Heier Non-Executive Director
Robert Mitchell Non-Executive Director (resigned 23 April 2023)
Responsibility Statement
The Directors confirm that to the best of their knowledge:
a) the condensed set of financial statements has been prepared
in accordance with International Accounting Standard 34 'Interim
Financial Reporting';
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R - namely an indication of
important events that have occurred during the first six months and
their impact on the condensed interim financial information, and a
description of principal risks and uncertainties for the remaining
six months of the financial year; and
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R - disclosure of material related
parties' transactions in the first six months and any material
changes therein).
Cautionary Statement
This Interim Management Report (IMR) has been prepared solely to
provide additional information to shareholders to assess the
Group's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party or for
any other purpose.
Going Concern
The Directors' assessment of going concern is detailed in Note
2.
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the business
activities of the Group remain those detailed in the annual report
and accounts 2022, a copy of which is available on the Company
website at
https://narfgroup.com/investor-relations/corporate-documents . By
order of the Board
Steve Bassi
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year
Ended Ended Ended
30.6.2023 30.6.2022 31.12.2022
(Unaudited) (Unaudited (Unaudited)
and restated)
Notes US$ US$ US$
Continuing operations
Contract revenue 3,261,179 1,446,032 2,547,125
Sub-contractors (685,087) (39,676) (126,199)
Operating expenses (2,386,994) (2,687,650) (5,006,271)
Profit/(loss) before depreciation
and software licence amortisation,
share based payments, interest
and taxes 189,098 (1,281,294) (2,585,345)
Depreciation and software license
amortisation (329,735) - (329,999)
Other share based payment expense - - (147,580)
Operating loss (140,637) (1,281,294) (3,062,924)
RTO share based payment expense - (15,355,123) (15,355,123)
Interest receivable and other
finance income 299 - 3,376
Finance costs (3,862) (274) (3,197)
Loss before taxation (144,200) (16,636,691) (18,417,868)
Taxation (12,000) (7,839) (7,839)
Loss for the period (156,200) (16,644,530) (18,425,707)
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on foreign 306,915 - -
operations
Total comprehensive income/(loss)
for the period attributable
to the owners of the company 150,715 (16,644,530) (18,425,707)
------------------------------------- ------ ------------ --------------- -------------
Earnings per share
Earnings per share (basic and
diluted) attributable to the
equity holders (cents) 3 (0.01) (1.3) (1.2)
------------------------------------- ------ ------------ --------------- -------------
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at As at As at
30.6.2023 30.6.2022 31.12.2022
(Unaudited) (Unaudited (Unaudited)
and restated)
Note US$ US$ US$
NON-CURRENT ASSETS
Intangible assets 2,465,009 3,001,212 2,697,076
Tangible assets - 32,755 15,990
Investments - - -
2,465,009 3,033,967 2,713,066
CURRENT ASSETS
Trade and other receivables 1,486,482 557,751 756,481
Cash and cash equivalents 361,045 1,477,764 442,751
1,847,527 2,035,515 1,199,232
----------------------------- ----- ------------- --------------- -------------
TOTAL ASSETS 4,312,536 5,069,482 3,912,298
CURRENT LIABILITIES
Trade and other payables 1,229,859 382,726 595,962
NON-CURRENT LIABILITIES
Loans from directors 1,252,000 1,102,700 1,513,727
TOTAL LIABILITIES 2,481,859 1,485,426 2,109,689
NET ASSETS 1,830,678 3,584,056 1,802,609
----------------------------- ----- ------------- --------------- -------------
EQUITY
Share capital 4 204,012 204,012 204,012
Share premium 4 34,951,415 35,074,061 35,074,061
Reverse acquisition reserve (16,747,959) (16,747,959) (16,747,959)
Foreign exchange reserve 263,504 (43,411) (43,411)
Share based payment reserve 229,185 229,185 229,185
Retained deficit (17,069,479) (15,131,832) (16,913,279)
TOTAL EQUITY 1,830,678 3,584,056 1,802,609
----------------------------- ----- ------------- --------------- -------------
Company number: 11701224
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Share FX Share-based Reverse Retained Total
Capital Premium Reserve Payment Acquisition Deficit
Reserve Reserve
US$ US$ US$ US$ US$ US$ US$
AS AT 1 JULY
2022
(Unaudited
and restated) 204,012 35,074,061 (43,411) 229,185 (16,747,959) (15,131,832) 3,584,056
Loss for the
period - - - - - (1,781,447) (1,781,447)
Total
comprehensive
loss
for the
period - - - - - (1,781,447) (1,781,447)
AS AT 31
DECEMBER 2022
(Unaudited) 204,012 35,074,061 (43,411) 229,185 (16,747,959) (16,913,279) 1,802,609
Loss for the
period - - - - - (156,200) (156,200)
Foreign
exchange gain
on conversion
of subsidiary - - 306,915 - - - 306,915
Total
comprehensive
income
for the
period - - 306,915 - - (156,200) 150,715
Shares issue
costs - (122,646) - - - - (122,646)
AS AT 30 JUNE
2023
(Unaudited) 204,012 34,951,415 263,504 229,185 (16,747,959) (17,069,479) 1,830,678
--------------- -------- ----------- --------- ------------ ------------- ------------- ------------
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months Year
Ended Ended Ended
30.6.2023 30.6.2022 31.12.2022
(Unaudited) (Unaudited (Unaudited)
and restated)
US$ US$ US$
OPERATING ACTIVITIES
Loss for the period before taxation (144,200) (16,636,691) (18,417,868)
Adjusted for:
Depreciation and software license
amortisation 216,266 16,765 329,999
Software development amortisation 113,469 216,021 226,938
Unrealised foreign exchange
adjustment 225,237 (4,864) -
RTO and other share based payment
expenses - 15,355,123 15,502,703
Operating cash inflow/(outflow)
before movements in working
capital: 410,772 (1,053,646) (2,358,228)
Decrease in trade and other
receivables (730,001) (509,677) (701,723)
Increase in trade and other
payables 633,897 188,742 67,140
Net cash generated from/(used
in) operating activities 314,668 (1,374,581) (2,992,811)
------------------------------------- ------------ --------------- -------------
INVESTING ACTIVITIES
Net amounts paid to former members
to acquire control - (3,615,433) (3,615,433)
Licence fee expenditure - (500,000) (500,000)
Net cash outflow from investing
activities - (4,115,433) (4,115,433)
------------------------------------- ------------ --------------- -------------
FINANCING ACTIVITIES
Proceeds on the issue of shares - 7,650,881 7,650,881
Costs related to share issues (122,646) (1,145,814) (1,145,814)
Loan from former member - 270,388 702,000
Loan repayment (261,727) - (20,292)
Drawings by former members - (75,000) (75,000)
Net interest received - 180 180
Net cash (outflow)/inflow from
financing activities (384,373) 6,700,635 7,111,955
------------------------------------- ------------ --------------- -------------
Taxation paid (12,000) (7,839) (7,839)
------------------------------------- ------------ --------------- -------------
Net (decrease)/increase in
cash and cash equivalents (81,705) 1,202,782 (4,128)
Cash and cash equivalents at
beginning of period 442,751 274,982 446,879
Cash and cash equivalents at
end of period 361,045 1,477,764 442,751
------------------------------------- ------------ --------------- -------------
Notes to the CONSOLIDATED Financial Statements
interim results to 30 june 2023
1. Organisation and Trading Activities
The principal activity of Narf Industries plc (the "Company")
together with its operating subsidiaries (together, the "Group") is
high-end threat intelligence. Its strategy is focussed on building
a group capable of offering cybersecurity solutions in the US and
beyond. The Company is domiciled in the United Kingdom and
incorporated and registered in England and Wales as a public
limited company. The Company's registered office is 5 Fleet Place,
London EC4M 7RD. The Company's registered number is 11701224.
2. Summary of Significant Accounting Policies
The principal accounting policies adopted and applied in the
preparation of these interim Group Financial statements are set out
below.
These have been consistently applied to all the periods
presented unless otherwise stated:
B asis of accounting
These interim financial statements of Narf Industries plc (the
"Group") have been prepared in accordance with UK adopted
international accounting standards ("UK-adopted IAS") applied in
accordance with the provisions of the Companies Act 2006.
The interim financial statements have been prepared under the
historical cost convention on the basis of the accounting policies
as set out in the Group's audited annual financial statements and
are presented in US Dollars the presentational and functional
currency of the Group. The Group has applied IAS 34 in the
preparation of these interim financial statements.
The interim financial statements have been prepared to reflect
the acquisition of Narf Industries LLC and Narf Industries PR LLC
via a reverse takeover on 15 March 2022, which resulted in the
Company becoming the ultimate holding company of the Group. The
prior year interim numbers have been restated to reflect the
treatment as a reverse takeover whereas previously the numbers had
been reported under the acquisition method.
This announcement was approved and authorised by the Board of
directors on 27 September 2023. Copies of this interim report can
be found on the Company's website at
https://narfgroup.com/investor-relations/corporate-documents .
These condensed interim financial statements for the six months
ended 30 June 2023 are unaudited and do not constitute fully
prepared statutory accounts. The comparative figures for the year
ended 31 December 2022 are extracted from the 2022 consolidated
financial statements of the Company. The independent auditor's
report on the 2022 financial statements disclaimed opinion due to
the inability to gain sufficient and appropriate audit evidence in
respect of a number of areas and accordingly those numbers are
stated as being unaudited.
G oing concern
Any consideration of the foreseeable future involves making a
judgement, at a particular point in time, about future events which
are inherently uncertain. The Directors have prepared cash flow
forecasts covering the period to 31 December 2024 and those
forecasts indicate that the Group will have sufficient cash
resources to meet all foreseeable liabilities through to a period
which is at least twelve months after the issue of these condensed
interim financial statements.
Accordingly, the Directors have a reasonable expectation that
the Group will be able to achieve the above in order to meet any
future obligations and thus to continue operating for the
foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the interim financial
statements.
2. Summary of Significant Accounting Policies (contiNUED)
Basis of consolidation
The Financial Statements consolidate the financial information
of the Company and companies controlled by the Group (its
subsidiaries) at each reporting date following the acquisition in
March 2022.
Control is achieved where the Company has the power to govern
the financial and operating policies of an investee entity, has the
rights to variable returns from its involvement with the investee
and has the ability to use its power to affect its returns. The
results of subsidiaries acquired or sold are included in the
financial information from the effective date of acquisition or up
to the effective date of disposal, as appropriate. Where necessary,
adjustments are made to the results of acquired subsidiaries to
bring their accounting policies into line with those used by the
Group. All intra-Group transactions, balances, income and expenses
are eliminated on consolidation. The financial statements of all
Group companies are adjusted, where necessary, to ensure the use of
consistent accounting policies.
The Financial Statements consolidate the financial information
of the Company and companies controlled by the Group (its
subsidiaries) at each reporting date. For commentary on how the
acquisitions of Narf Industries US LLC and Narf Industries PR LLC,
which falls outside the scope of IFRS 3, was accounted for, see
note 8 to the consolidated financial statements for the year to 31
December 2022.
3. EARNINGS per Share
The basic earnings per share is based on the loss for the period
divided by the weighted average number of shares in issue during
the period. The weighted average number of ordinary shares for the
Company the period ended 30 June 2022 assumes that all shares have
been included in the computation based on the weighted average
number of days since issue. Since the Group has made a loss in the
current and each of the prior periods, the warrants in issue are
not dilutive.
Six months Six months Year to
to to 31 Dec 2022
30 June 2023 30 June US$
US$ 2022
US$
-------------------------------------- -------------- -------------- --------------
Loss attributable to owners
of the Group : (156,200) (16,644,530) (18,425,707)
Weighted average number of ordinary
shares in issue for basic earnings 1,697,381,100 1,243,631,762 1,475,948,904
Weighted average number of shares
in issue for fully diluted earnings 1,697,381,100 1,243,631,762 1,475,948,904
LOSS PER SHARE (CENTS PER SHARE) (0.01) (1.3) (1.2)
BASIC AND FULLY DILUTED:
- from continuing and total
operations (cents) (0.01) (1.3) (1.2)
-------------------------------------- -------------- -------------- --------------
4. Share capital AND SHARE PREMIUM
The following table is presented in US Dollar equivalents:
Ordinary shares
of GBP0.0001 Share Share
each Capital Premium
Number $ $
--------------------- ---------------- --------- -----------
At 1 July 2022 1,697,381,000 204,012 35,074,061
--------------------- ---------------- --------- -----------
At 31 December 2022 1,697,381,000 204,012 35,074,061
--------------------- ---------------- --------- -----------
At 30 June 2023 1,697,381,000 204,012 34,951,415
--------------------- ---------------- --------- -----------
5. Post period end events
There were no significant events subsequent to the balance sheet
date which have any bearing on these interim financial statements
but readers of these accounts should be aware that the Company
announced it had granted 391,214,900 employee share options in
September 2023 and this will impact on losses as well as the share
based payment reserve in the 2023 accounts.
ENDS
For further information on the Group please visit
www.narfgroup.com or contact:
John Herring NARF Tel: +44 (0) 20 3468
2212
Catherine Leftley/Charlotte St Brides Partners narf@stbridespartners.co.uk
Page/Isabel de Salis
------------------- ---------------------------
Peter Krens Tennyson Securities Tel: +44 (0)207 186 9030
------------------- ---------------------------
About NARF Industries plc
Narf Industries (LSE: NARF)(OTCQB: NFIN.F) is a US based cyber
security group specialising in high-end threat intelligence with a
focus on critical infrastructure. The Group leads commissioned
cyber security R&D and is commercialising a portfolio of
products including a DARPA-backed product (an agency within the US
Department of Defence) that can be used by utilities and cyber
first responders to restore power to electric grids and protecting
other key infrastructure that have suffered a cyber-attack. The
Group aims to further strengthen its portfolio organically and via
acquisition; its team of highly qualified cyber security experts is
well placed to identify opportunities.
Important notice
The content of this announcement has not been approved by an
authorised person within the meaning of the Financial Services and
Markets Act 2000 (FSMA). This announcement has been issued by and
is the sole responsibility of the Company. The information in this
announcement is subject to change. This announcement is not an
offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the Securities Act),
and may not be offered or sold, directly or indirectly, in or into
the United States, except pursuant to an applicable exemption from
registration. No public offering of securities is being made in the
United States. This announcement is not for release, publication or
distribution, directly or indirectly, in or into Australia, the
Republic of South Africa, Japan or any jurisdiction where to do so
might constitute a violation of local securities laws or
regulations (a Prohibited Jurisdiction). This announcement and the
information contained herein are not for release, publication or
distribution, directly or indirectly, to persons in a Prohibited
Jurisdiction unless permitted pursuant to an exemption under the
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