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 AMENDED. ON PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION
IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
25 January 2024
NARF INDUSTRIES PLC
Corporate Update
Six month & 12 Month unaudited financial
results ending December 31, 2023
Key Appointments & Other
Matters
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, is pleased to provide an update with
regards to its corporate activities.
OVERVIEW
Financials
·
Year Over Year revenue growth of 130%
·
Up from $2.5 million in CY22 to $6.0 million in
CY23
·
EBITDA positive, improving from CY22 loss of $2.6
million
·
Ending cash and short-term receivables $1.4
million, up from $1.2 million prior year
Appointments
●
Nick Davis as COO
●
Neil Warrender as CFO
●
Albert Hawk as a Non-executive Director
●
Haysmacintyre LLP as auditor
Other Matters
●
Change of fiscal year end
●
Board member and auditor resignation
John Herring,
Executive Chairman of Narf said: "We've successfully worked the past nine
months to complete the transition from a private and
entrepreneurial led venture to the main operating business of an
LSE listed company. Our financial results exceeded our market
guidance, and we enter CY24 with strong business momentum and
upside potential. My thanks to the entire NARF
team.
"The appointments
made here acknowledge those who did the heavy lifting during the
transition and those joining who set a solid foundation for our
corporate governance and financial accountability in this exciting
new phase.
Prior to co-founding NARF, our COO Nick Davis led the Threat
Analysis and Network Forensics Department at the Navy Cyber Defense
Operations Command where he managed and coordinated a team of over
a hundred employees and contractors responsible for the defense of
the Navy's global IT infrastructure.
Our CFO Neil Warrender brings multi-decade experience as a UK
qualified chartered accountant, a non-executive director and
company secretary for main market LSE listed
companies.
We are pleased to
have Mr. Albert "Bud" Hawk join our Board. He leads a
globally diversified and strategic advisory US firm with funds
under management and transactions exceeding $1 billion and has
extensive board and leadership experience in publicly traded and
private equity businesses.
We are also pleased
to welcome Haysmacintyre LLP as our new auditors. Throughout the
selection process its team showed a profound understanding of our
high-tech business and the sensitivity of customer information, a
priority in our criteria for a trusted auditing
partner."
Steve Bassi, CEO of
Narf said:
"I would like to thank John for
stepping in the past year to help me drive this transition. It
enabled me and the team to stay laser focused on meeting our
customer mission and research needs and delivering on these
aggressive growth objectives. Importantly, we are leveraging
these non-dilutive funds to fuel next-gen products as we move to
expand into commercial markets."
OTHER
MATTERS
Change of Accounting
Period
The Company has changed its Accounting Period from
the calendar year to a fiscal year ending on 31 March. This avoids
the peak period when auditors prioritize larger accounts and
ensures we have access to high-quality resources for an efficient
and thorough audit process.
Resignations
Rory Heier resigns from the Board concurrent with
this announcement. The Board wishes to thank Rory for his
work as a founding board member as he was instrumental in the
initial listing of the Company, the acquisition of the Narf Group
in 2022, as well as his support during this transition period.
PKF Littlejohn LLP resigned as auditors and advised
there are no circumstances connected with its resignation which it
considers should be brought to the attention of the members or
creditors of the Company.
ENDS
For further information visit www.narfgroup.com or
contact:
|
John Herring
|
Executive Chairman
Narf Industries plc
|
E: jh@narfgroup.com
|
|
Paul Dulieu
Isabel de Salis
|
Financial PR, UK
St Brides Partners
|
E: narf@stbridespartners.co.uk
|
|
Peter Krens
|
Broker, UK
Tennyson Securities
|
T: +44 (0)207 186 9030
|
About Narf
Industries plc
Narf Industries (LSE: NARF) (OTCQB: NFIN.F) is a US
based leading provider of cybersecurity research, solutions, and
services to government entities. With a steadfast commitment to
protecting national security and critical infrastructure, it offers
comprehensive expertise in addressing the evolving cyber threats
faced by its clients.
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 year was $1,152,024 (YE 2022 $18,425,707) and the Group's
unaudited net assets as at 31 December 2023 were $1,364,849 (31
December 2022: $1,802,609).
Directors
The following directors held office during the
period:
Steven Bassi
Chief Executive Officer
John
Herring
Executive Chairman
Rory Heier
Non-Executive Director (resigned 25 January 2024)
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 year and their impact on the condensed interim
financial information, and a description of principal risks and
uncertainties for the remaining three months of the extended
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 year 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
consolidated report and accounts 2022, a copy of which is available
on the Company website at https://narfgroup.com/investor-relations/corporate-documents.
The Board considers that these remain a current reflection of the
risks and uncertainties facing the business for the remaining three
months of the extended financial year.
By order of the Board
Steve
Bassi
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
|
Year
|
Year
|
|
|
|
Ended
|
Ended
|
|
|
|
31.12.23
|
31.12.2022
|
|
|
|
(Unaudited)
|
(Unaudited)
|
|
|
Notes
|
US$
|
US$
|
|
Continuing operations
|
|
|
|
|
GR &D Revenue
|
|
3,786,889
|
1,705,294
|
|
GS & S Revenue
|
|
2,169,047
|
841,831
|
|
Commercial Revenue
|
|
49,000
|
-
|
|
Total revenue
|
|
6,004,936
|
2,547,125
|
|
Sub-contractors
|
|
(1,061,776)
|
(126,199)
|
|
Operating expenses
|
|
(4,900,090)
|
(5,006,271)
|
|
Profit/(loss) before depreciation and software licence
amortisation, share based payments, interest and
taxes
|
|
43,069
|
(2,585,345)
|
|
|
|
|
|
|
Depreciation and software license
amortisation
|
|
(639,444)
|
(329,999)
|
|
Other share-based payment
expense
|
|
(836,910)
|
(147,580)
|
|
|
|
|
|
|
Operating loss
|
|
(1,433,285)
|
(3,062,924)
|
|
|
|
|
|
|
RTO share based payment
expense
|
|
-
|
(15,355,123)
|
|
Interest receivable and other
finance income
|
|
13
|
3,376
|
|
Finance costs
|
|
(5,802)
|
(3,197)
|
|
|
|
|
|
|
Loss before taxation
|
|
(1,439,074)
|
(18,417,868)
|
|
|
|
|
|
|
Corporate tax
|
|
(15,261)
|
(7,839)
|
|
|
|
|
|
|
Loss for the year
|
|
(1,454,335)
|
(18,425,707)
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
|
Exchange differences on foreign
operations
|
|
302,311
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the year attributable to the
owners of the Company
|
|
(1,152,024)
|
(18,425,707)
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
Earnings per share (basic and
diluted) attributable to the equity holders (cents)
|
3
|
(0.09)
|
(1.2)
|
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
|
|
|
As at
|
As
at
|
|
|
|
31.12.2023
|
31.12.2022
|
|
|
|
(Unaudited)
|
(Unaudited)
|
|
|
Note
|
US$
|
US$
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
Intangible assets
|
|
2,158,824
|
2,697,076
|
|
Tangible assets
|
|
-
|
15,990
|
|
|
|
2,158,824
|
2,713,066
|
|
CURRENT ASSETS
|
|
|
|
|
Trade and other
receivables
|
|
1,236,767
|
756,481
|
|
Cash and cash equivalents
|
|
268,742
|
442,751
|
|
|
|
1,505,509
|
1,199,232
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
3,664,333
|
3,912,298
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
1,016,485
|
595,962
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
Loans from directors
|
|
1,283,000
|
1,513,727
|
|
TOTAL LIABILITIES
|
|
2,299,485
|
2,109,689
|
|
|
|
|
|
|
NET
ASSETS
|
|
1,364,849
|
1,802,609
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Share capital
|
4
|
204,012
|
204,012
|
|
Share premium
|
4
|
34,951,415
|
35,074,061
|
|
Reverse acquisition
reserve
|
|
(16,747,959)
|
(16,747,959)
|
|
Foreign exchange reserve
|
|
258,900
|
(43,411)
|
|
Share based payment
reserve
|
|
951,502
|
229,185
|
|
Retained deficit
|
|
(18,253,021)
|
(16,913,279)
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
1,364,849
|
1,802,609
|
Company number: 11701224
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
Year
|
Year
|
|
|
Ended
|
Ended
|
|
|
31.12.2023
|
31.12.2022
|
|
|
(Unaudited)
|
(Unaudited)
|
|
|
US$
|
US$
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
Loss for the year before
taxation
|
(1,439,074)
|
(18,417,868)
|
|
Adjusted for:
|
|
|
|
Depreciation and software license
amortisation
|
15,990
|
329,999
|
|
Amortisation of
intangibles
|
623,454
|
226,938
|
|
Unrealised foreign exchange
adjustment
|
102,516
|
-
|
|
RTO and other share-based payment
expenses
|
836,910
|
15,502,703
|
|
Operating cash inflow/(outflow)
before movements in working capital:
|
139,796
|
(2,358,228)
|
|
|
|
|
|
Decrease in trade and other
receivables
|
(480,286)
|
(701,723)
|
|
Increase in trade and other
payables
|
420,523
|
67,140
|
|
|
|
|
|
Net
cash generated from/(used in) operating
activities
|
80,033
|
(2,992,811)
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
Net amounts paid to former members
to acquire control
|
-
|
(3,615,433)
|
|
Licence fee
expenditure
|
-
|
(500,000)
|
|
|
|
|
|
Net
cash outflow from investing activities
|
-
|
(4,115,433)
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
Proceeds on the issue of
shares
|
-
|
7,650,881
|
|
Costs related to share
issues
|
(122,646)
|
(1,145,814)
|
|
Loan from former member
|
-
|
702,000
|
|
Loan repayment
|
(230,727)
|
(20,292)
|
|
Drawings by former
members
|
-
|
(75,000)
|
|
Net interest received
|
-
|
180
|
|
|
|
|
|
Net
cash (outflow)/inflow from financing activities
|
(353,373)
|
7,111,955
|
|
|
|
|
|
Taxation paid
|
99,332
|
(7,839)
|
|
|
|
|
|
Net
decrease in cash and cash equivalents
|
(174,009)
|
(4,128)
|
|
Cash and cash equivalents at beginning of
year
|
442,751
|
446,879
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
268,742
|
442,751
|
Notes to the CONSOLIDATED Financial
Statements
interim results to 31 DECEMBER 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:
Basis 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 24 January 2024. 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 twelve months ended 31 December 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.
Going
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.
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 year ended 31 December 2023
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 the prior period, the warrants
in issue are not dilutive.
|
|
|
Year to
31 Dec 2023
US$
|
Year to
31 Dec
2022
US$
|
|
Loss attributable to owners of the Group
:
|
|
(1,454,335)
|
(18,425,707)
|
|
Weighted average number of ordinary shares in
issue for basic earnings
|
|
1,697,381,100
|
1,475,948,904
|
|
Weighted average number of shares in issue for
fully diluted earnings
|
|
1,697,381,100
|
1,475,948,904
|
|
LOSS PER SHARE (CENTS PER SHARE)
|
|
(0.09)
|
(1.2)
|
|
BASIC AND FULLY DILUTED:
|
|
|
|
|
- from continuing and total operations
(cents)
|
|
(0.09)
|
(1.2)
|
4. Share capital AND SHARE
PREMIUM
The following table is presented in US Dollar
equivalents:
|
|
Ordinary shares of £0.0001
each
Number
|
Share Capital
$
|
Share Premium
$
|
|
At 31 December
2022
|
1,697,381,000
|
204,012
|
35,074,061
|
|
At 31 December
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.
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 relevant local law or
regulation in any such jurisdiction.
