STATEMENT OF FINANCIAL POSITION

The accompanying notes form part of these financial statements.

STATEMENT OF CASHFLOWS

There were no cashflows from investing activities during the period.

STATEMENT OF CHANGES IN EQUITY

The accompanying notes form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED 31 DECEMBER 2020

1          GENERAL INFORMATION

The principal activity of Cyba Plc (the "Company'') is to identify potential companies, businesses or asset(s) in the Cyber Security sector that will increase shareholder value.

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          ACCOUNTING POLICIES

2.1          Basis of preparation

The Financial Statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee ("IFRS IC") as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS.

The Financial Statements have been prepared under the historical cost convention unless otherwise stated. The principal accounting policies are set out below and have, unless otherwise stated, been applied consistently. The Financial Statements are prepared in pounds Sterling and presented to the nearest pound.

2.2          Going concern

The financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operational existence for the foreseeable future.

The Company had a net cash outflow from operating activities for the period of £998,685 and at 31 December 2020 had cash and cash equivalents balance of £1,261,997. The Directors are confident that costs will be managed in line with expectations until a target company is acquired. The Directors have considered the management forecasts, post period-end fund raises, current working capital levels and utilisation of funds until an appropriate acquisition target has been identified, based on these factors the Directors consider that the entity is a going concern.

The Directors have considered the implications on the going concern status of the Company should the proposed transaction with Narf complete in the next 12 months. They have assessed that the Company would remain a going concern in this event due to the expected significant funds to be raised in conjunction with the completion of the transaction ensuring that the Company will have sufficient cash reserves to meet the enlarged Group's obligations as they fall due during the going concern period.

The Directors consider that the continued adoption of the going concern basis is appropriate having reviewed the forecasts for the 12 months from the date of signing the financial statements and the accounts do not reflect any adjustments that would be required if they were to be prepared on any basis and assessing the adverse impact that COVID-19 will have on the global economy. The Directors believe that the Company is in a strong working capital position that will mitigate any negative macroeconomic shocks.  

2.3          Foreign currency translation

The financial information is presented in Sterling which is the Company's functional and presentational currency.

Transactions in currencies other than the functional currency are recognised at the rates of exchange on the dates of the transactions.  At each balance sheet date, monetary assets and liabilities are retranslated at the rates prevailing at the balance sheet date with differences recognised in the Statement of comprehensive income in the period in which they arise.

2.4          Cash and cash equivalents

Cash and cash equivalents comprise cash at hand and current and deposit balances at banks.

2.5          Trade and other receivables

Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.

2.6          Trade and other payables

Trade payables are recognised initially at their fair value and subsequently measured at amortised cost.

2.7          Financial instruments

Initial recognition

A financial asset or financial liability is recognised in the statement of financial position of the Company when it arises or when the Company becomes part of the contractual terms of the financial instrument.

Classification

Financial assets at amortised cost

The Company measures financial assets at amortised cost if both of the following conditions are met

·    the asset is held within a business model whose objective is to collect contractual cash flows; and

·    the contractual terms of the financial asset generating cash flows at specified dates only pertain to capital and interest payments on the balance of the initial capital.

Financial assets which are measured at amortised cost, are measured using the Effective Interest Rate Method (EIR) and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Financial liabilities at amortised cost

Financial liabilities measured at amortised cost using the effective interest rate method include current borrowings and trade and other payables that are short term in nature. Financial liabilities are derecognised if the Company's obligations specified in the contract expire or are discharged or cancelled.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate ("EIR"). The EIR amortisation is included as finance costs in profit or loss. Trade payables other payables are non-interest bearing and are stated at amortised cost using the effective interest method.

Derecognition  

A financial asset is derecognised when:

·    the rights to receive cash flows from the asset have expired, or

·    the Company has transferred its rights to receive cash flows from the asset or has undertaken the commitment to fully pay the cash flows received without significant delay to a third party under an arrangement and has either (a) transferred substantially all the risks and the assets

of the asset or (b) has neither transferred nor held substantially all the risks and estimates of the asset but has transferred the control of the asset.

Impairment

The Company recognises a provision for impairment for expected credit losses regarding all financial assets. Expected credit losses are based on the balance between all the payable contractual cash flows and all discounted cash flows that the Company expects to receive. Regarding trade receivables, the Company applies the IFRS 9 simplified approach in order to calculate expected credit losses. Therefore, at every reporting date, provision for losses regarding a financial instrument is measured at an amount equal to the expected credit losses over its lifetime without monitoring changes in credit risk. To measure expected credit losses, trade receivables and contract assets have been grouped based on shared risk characteristics.

2.8          Equity

Share capital is determined using the nominal value of shares that have been issued.

The Share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the Share premium account, net of any related income tax benefits.

Equity-settled share-based payments are credited to a warrants reserve as a component of equity until related options or warrants are exercised or lapse.

The warrant reserve includes share warrants issued to shareholders in connection with share capital issues that are measured at fair value at the date of issue and treated as a separate component of equity.

Retained earnings includes all current and prior period results as disclosed in the income statement.

2.9          Earnings per share

Basic earnings per share is calculated by dividing:

The loss attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares.

By weighting the average number of ordinary shares outstanding during the financial period.

2.10        Share-based payments

The Company has issued warrants to the initial investors and certain counter parties and advisers.

Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at date of grant. The fair value so determined is expensed on a straight-line basis over the vesting period, based on the Company's estimate of the number of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

Fair value is measured using the Black Scholes pricing model. The key assumptions used in the model have been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

2.11        Taxation

Tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

2.12        Critical accounting judgements and key sources of estimation uncertainty

In the process of applying the entity's accounting policies, management makes estimates and assumptions that have an effect on the amounts recognised in the financial information. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. The Directors consider that there are no critical accounting judgements or key sources of estimation uncertainly relating to the financial information of the Company. 

2.13        Standards, amendments and interpretations to existing standards that are not yet effective

New standards, amendments to standards and interpretations:

No new standards, amendments or interpretations, effective for the first time for the financial period beginning on or after 1 April 2020 have had a material impact on the Company.

Standards issued but not yet effective:

At the date of authorisation of these financial statements, the following standards and interpretations relevant to the Company and which have not been applied in these financial statements, were in issue but were not yet effective. In some cases, these standards and guidance have not been endorsed for use in the European Union.

The directors are evaluating the impact that these standards will have on the financial statements of the Company but it is not anticipated that they will have a material impact on the company.

2.14        Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board as a whole.

Given the current operations of the Company there are no reportable segments.

2.14        Financial Risk Management Objectives and Policies

The Company does not enter into any forward exchange rate contracts.

The main financial risks arising from the Company's activities are market risk, interest rate risk, foreign exchange risk, credit risk, liquidity risk and capital risk management. Further details on the risk disclosures can be found in Note 15.

3.         REVENUE

There was no revenue generated in the period.

4.         ADMINISTRATIVE EXPENSES

This is stated after charging:

5.         DIRECTORS AND STAFF COSTS

During the period the only staff of the Company were the Directors and as such key management personnel. Management remuneration, other benefits supplied and social security costs to the Directors during the period was as follows:

The average number of staff during the period, including Directors was 4.

The remuneration and associated social security costs per Director was all short term in nature and was as follows:

For the comparative period to 31 March 2020:

6.         TAXATION

Estimated tax losses of £286,016 (31 March 2020: £162,688) are available for relief against future profits. No relating deferred tax asset has been provided for in the accounts based on the uncertainty as to when profits will be generated against which to relieve said asset

Factors affecting the future tax charge

The standard rate of corporation tax in the UK is 19%. Accordingly, the Company's effective tax rate for the period was 19%.

7.         EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

The calculation of the earnings per share is based on the loss for the financial period after taxation of £1,201,334 and on the weighted average of 374,933,182 ordinary shares in issue during the period.

The warrants outstanding at 31 December 2020 are considered to be non-dilutive as a loss was made for the period. The diluted loss per share is therefore equal to the non-diluted loss per share

8.         TRADE AND OTHER RECEIVABLES

The Directors consider that the carrying value amount of trade and other receivables approximates to their fair value. 

9.         CASH AND CASH EQUIVALENTS

Cash at bank comprises balances held by the Company in current bank accounts. The carrying value of these approximates to their fair value. The cash is held in a bank with a BBB credit rating.

10.       TRADE AND OTHER PAYABLES

Trade payables and accruals principally comprise amounts outstanding for trade purchases and continuing costs. The Directors consider that the carrying value amount of trade and other payables approximates to their fair value. Refer Note 15.

11.       SHARE CAPITAL / SHARE PREMIUM

The Company has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the distribution of dividends and repayment of capital. As at 31 December 2020 the Company's issued and outstanding capital structure comprised 524,525,000 shares and there were no other securities in issue and outstanding.

On 28 November 2018 the Company was incorporated and issued 2 ordinary shares of £0.001 each.

On 1 December 2018 the Company issued 115,249,998 ordinary shares of £0.0001 each in lieu of consulting fees. The shares rank pari passu in all respects to the existing ordinary shares.

From 1 January 2019 to March 2020 the Company issued 190,025,000 ordinary shares of £0.0001 each at a place price of £0.01 per placing share. The shares rank pari passu in all respects to the existing ordinary shares.

On 28 February 2020 the Company issued 4,500,000 ordinary shares of £0.0001 each at a placing price of £0.01 per placing share in settlement of consulting fees of a sum of £45,000 owed to a creditor. The shares rank pari passu in all respects to the existing ordinary shares.

From 1 April 2020 to 31 December 2020 the Company issued 214,750,000 ordinary shares of £0.0001 each at a place price of £0.01 per placing share. The shares rank pari passu in all respects to the existing ordinary shares.

At 31 March 2020, there were warrants over 12,000,000 unissued ordinary shares.

12.       WARRANT RESERVE

Details of the warrants outstanding are as follows:

The Company issued 12,000,000 warrants during the period on 20 October 2019.

The estimated fair value of the warrants granted in October 2019 was calculated by applying the Black-Scholes option pricing model. The assumptions used in the calculation were as follows:

Share price at date of grant                         1.00 pence

Exercise price                                                  1.00 pence

Expected volatility                                          35%

Expected dividend                                          Nil

Vesting criteria                                                 Exercisable on date of grant

Contractual life                                                 2 years

Risk free rate                                                     0.70%

Estimate fair value of each warrant              0.20 pence

The warrants outstanding at the period end have a weighted average remaining contractual life of 1.25 years. The exercise prices of the warrants are £0.01 per share. 

13.       CAPITAL COMMITMENTS

There were no capital commitments at 31 December 2020.

14.       CONTINGENT LIABILITIES

There were no contingent liabilities at 31 December 2020.

15.       FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company's financial instruments comprise primarily cash and various items such as trade debtors and trade payables which arise directly from operations. The main purpose of these financial instruments is to provide working capital for the Company's operations. The Company does not utilise complex financial instruments or hedging mechanisms.

Financial assets by category

The categories of financial assets are as follows:

Financial liabilities by category

The categories of financial liabilities are as follows:

All amounts are short term and payable in 0 to 3 months.

Credit risk

The maximum exposure to credit risk at the reporting date by class of financial asset was:

Interest rate risk

The maximum exposure to interest rate risk at the reporting date by class of financial asset was:

The nature of the Company's activities and the basis of funding are such that the Company has significant liquid resources. The Company uses these resources to meet the cost of operations.

The Company is not financially dependent on the income earned on these resources and therefore the risk of interest rate fluctuations is not significant to the business and the Directors have not performed a detailed sensitivity analysis.

All deposits are placed with main clearing banks to restrict both credit risk and liquidity risk. The deposits are placed for the short term, between one and three months, to provide flexibility and access to the funds.

Credit and liquidity risk

Credit risk is the risk of an unexpected loss if a counter party to a financial instrument fails to meet its commercial obligations. The Company's maximum credit risk exposure is limited to the carrying amount of cash of £1,261,997 and trade and other receivables of £nil. Credit risk is managed on a Company basis. Funds are deposited with financial institutions with a credit rating equivalent to, or above, the main UK clearing banks. The Company's liquid resources are invested having regard to the timing of payment to be made in the ordinary course of the Company's activities. All financial liabilities are payable in the short term (between 0 to 3 months) and the Company maintains adequate bank balances to meet those liabilities.

Currency risk

The Company operates in a global market with income and costs possibly arising in a number of currencies. The majority of the operating costs are incurred in £GBP. The Company does not hedge potential future income or costs, since the existence, quantum and timing of such transactions cannot be accurately predicted. The Company did not have foreign currency exposure at period end.

16.       CAPITAL MANAGEMENT

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the balance between debt and equity.

The capital structure of the Company as at 31 December 2020 consisted of equity attributable to the equity holders of the Company, totalling £920,288.

The Company reviews the capital structure on an on-going basis. As part of this review, the directors consider the cost of capital and the risks associated with each class of capital. The Company will balance its overall capital structure through the payment of dividends, new share issues and the issue of new debt or the repayment of existing debt.

17.       RELATED PARTY TRANSACTIONS

The compensation payable to Key Management personnel comprised £205,900 paid by the Company to the Directors in respect of services to the Company. Full details of the compensation for each Director are provided in the Directors' Remuneration Report. At period end, an amount of £38,804 (31 March 2020: £112,903) was due to the Directors in respect of Directors remuneration.

Rory Heier is the sole Director of Harpers Capital Limited that received £76,500 during the period for the provision of consulting, marketing and business development services. At the period end, an amount of £Nil was due to Harpers Capital Limited.

Steve Bassi is a Director of Narf Industries LLC, a company that received $250,000 USD during the period for the agreed payment of legal and due diligence services in connection with the signed letter of intent between Narf Industries LLC and Cyba plc. At the period end, an amount of £Nil was due to Narf Industries LLC.

18.       EVENTS SUBESQUENT TO PERIOD END

On 8 March 2021, the Company commenced trading its ordinary shares on the Main Market for listed securities of the London Stock Exchange plc under the TDIM 'CYBA'

On 13 May 2021, the Company completed a placement of 100 million ordinary shares of 0.0001p each at a price of 2p er ordinary share to raise £2 million before expenses to new and existing shareholders of Cyba plc.

On 21 June 2021, the Company announced a proposed acquisition of Narf Industries LLC and Narf Industries PR LLC and has entered into legally binding heads of agreement to acquire the entire issued share capital of Narf, an established provider of cutting edge cyber security R&D to the US Government and Industry, for a total consideration of US$25.6 million, of which $2.0m is payable by way of deposit to the sellers.

On 21 June 2021, the Company announced that it had secured an extension of the exclusivity period set out in the Letter of Intent entered into on 6 October 2020 in relation n to the Company's possible acquisition of Swarm Industries Inc. and Swarm Technologies Inc up to 30 September 2021.

19.       CONTROL

In the opinion of the Directors there is no single ultimate controlling party.