RNS Number : 3144B
Narf Industries PLC
30 September 2022
 

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.

 

30 September 2022

 

NARF INDUSTRIES PLC

 

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2022

 

Narf Industries plc ("Narf", the "Company", or the "Group") (LSE: NARF)(OTCQB: NFIN.F) the cybersecurity group specialising in high-end threat intelligence and critical infrastructure security, announces its unaudited interim results for the six months ending 30 June 2022.

 

 

CHAIRMAN'S STATEMENT

I am pleased to present the results for the interim period to 30 June 2022.

Financial review

The Company's primary focus during the period was the funding and completion of the acquisition of Narf Industries LLC and Narf Industries PR LLC for a total consideration of $25.6 million which was announced to the market in March 2022. These results therefore mainly reflect the costs of the transaction and only include the results of our operating Group for the quarter ended 30 June 2022. Accordingly, the comparative numbers, both for the previous interim period and the prior audited accounts show the results of the Company prior to those acquisitions.

On 20 June 2022, the Company announced the change of its name to Narf Industries plc and the appointment of Steve Bassi as its Chief Executive Officer and I would refer shareholders to yesterday's corporate update for a more detailed description of the Company and its main revenue streams as well as this year's revenue expectations and next year's forecast.

Immediately following the completion of the acquisitions, the Company announced the signing of a licensing agreement with one of the world's largest research institutes, SRI International ("SRI"). This agreement related to its suite of cyber defence technologies for industrial control systems which form part of the Company's flagship product TIGR. TIGR is a hardware and software product developed to apply continual integrity monitoring and detect even stealthy cyberattacks deep inside critical infrastructure Industrial Control System ("ICS") devices. As a result of the agreement SRI became a significant shareholder in Narf and we are delighted to have them as our partner as we commence the commercialisation of TIGR In the Industrial Control System Market, in particular within the US Oil & Gas and Electricity distribution utilities sector.

Outlook

Narf is poised to become a market-leading supplier of cybersecurity products at a time when the need couldn't be clearer. The board is excited about the potential of the opportunities available to the Company and looks forward to delivering further news as events unfold.

We look forward to updating shareholders on our progress in due course.

 

Robert Mitchell

Chairman



 

 

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 loss for the interim period was $168,073 (interim period to 30 June 2021 (unconsolidated): $1,178,529) and the Group's unaudited net assets as at 30 June 2022 were $26,248,878 (30 June 2021 (unconsolidated); $2,721,468).

Directors

The following directors held office during the period:

Robert Mitchell
Rory Heier
Steven Bassi
John Herring

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 Prospectus dated 17 February 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 six months of the financial year.

By order of the Board

 

 

Rory Heier

Director

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 


Notes

(Consolidated)

Six months ended
30 June 2022
(Unaudited)
US$

(Unconsolidated)

Six months ended
30 June 2021
(Unaudited)
*US$

(Unconsolidated)

Year ended
31 December 2021
(Unaudited)
**US$

Continuing operations


 

 

 

Revenue


990,750



Operating expenses


(3,859,703)

(1,178,455)

(2,003,637)

Operating Loss


(2,868,953)

(1,178,455)

(2,003,637)

Foreign exchange gain on investments


2,701,006

-

-

Finance costs


(126)

(74)

39

Loss before taxation


(168,073)

(1,178,529)

(2,003,598)

Income tax expense


-

-

-

Loss for the period attributable to equity holders of the parent company


(168,073)

(1,178,529)

(2,003,598)

 


 



Earnings per share


 

 

 

Earnings per share (basis and diluted) attributable to the equity holders (pence)

3

(0.01c)

 (0.2c)

(0.3c)

 

The Group has no items of other comprehensive income.

* - Previously reported numbers have been converted from GBP£ to USD$ at the average exchange rate for the period of 0.7205

** - Previously reported numbers have been converted from GBP£ to USD$ at the average exchange rate for the period of 0.7409



 

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

Notes

(Consolidated)

30 June 2022
(Unaudited)
US$

(Unconsolidated)

30 June 2021
(Unaudited)
*US$

(Unconsolidated)

31 Dec 2021
(Unaudited)

**US$

Non-current assets


 

 


Intangible assets


23,053,842

-

-

Tangible assets


1,218,714

-

-

Total Non-current assets


24,272,556

-

-

Current assets


 



Trade and other receivables


1,207,847

2,038,980

1,945,204

Cash and cash equivalents


1,511,152

1,227,878

274,982

Total current assets


2,718,999

3,266,858

2,220,186

Total assets


26,991,555

3,266,858

2,220,186

 


 



Liabilities


 



Current liabilities


 



Trade and other payables


742,677

545,390

311,078

Total current liabilities


742,677

545,390

311,078

Net current assets


1,976,322

2,721,468

1,909,108

Total liabilities


742,677

545,390

311,078

 


 



Capital and reserves attributable to shareholders


 



Share capital

4

204,286

86,225

84,293

Share premium

4

31,167,428

7,397,554

7,297,380

Warrants reserve


-

33,325

32,578

Accumulated losses


(5,122,836)

(4,795,636)

(5,505,143)

Total capital and reserves


26,248,878

2,721,468

1,909,108

Total equity and liabilities


26,991,555

3,266,858

2,220,186

 

Company number: 11701224

* - Previously reported numbers have been converted from GBP£ to USD$ at the spot exchange rate of 0.7243

** - Previously reported numbers have been converted from GBP£ to USD$ at the spot exchange rate of 0.7409

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 

 

 

Share capital

Share premium

Warrant reserve

*Forex reserve

Accumulated losses

Total


US$

US$

US$

US$

US$

US$

At 1 July2021 (Unaudited)/(Unconsolidated)

86,225

7,397,554

33,325

-

(4,795,636)

2,721,468

Loss for the period

-

-

-

-

(825,069)

(825,069)

Foreign exchange movement

(1,932)

(100,174)

(747)

-

115,562

12,709

At 31 December 2021 (Unaudited)/(Unconsolidated)

84,293

7,297,380

32,578

-

(5,505,143)

1,909,108

Loss for the period

-

-

-

-

(168,073)

(168,073)

Issue of shares

128,420

25,531,334

(6,110)

-

-

25,653,644

Share issue costs

-

(931,726)

-

-

-

(931,726)

Warrants expired

-

-

(23,212)

-

-

(23,212)

Foreign exchange movement

(8,427)

(729,560)

(3,256)

-

550,380

(190,863)

At 30 June 2022

(Unaudited)/(Consolidated)

204,286

31,167,428

-

-

(5,122,836)

26,248,878

 

*Full analysis of the impact of the foreign exchange movements will be provided for the audited annual accounts for the period ended 31 December 2022

 

 

 



 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 


(Consolidated)

Six Months

Ended

30 June 2022

(Unaudited)

US$

(Unconsolidated)

Six Months

 Ended

30 June 2021

(Unaudited)

US$

(Unconsolidated)

Year

Ended

31 Dec 2021

(Unaudited)

US$

OPERATING ACTIVITIES

 



Loss for the period before taxation

(168,073)

(1,178,529)

(2,003,598)

(Increase)/decrease in trade and other receivables

(495,296)

(10,408)

219,986

(Decrease)/increase in trade and other payables

241,877

40,638

(186,344)

Share based payment

(23,212)

-

-

Foreign exchange movements

(26,167)

34,462

30,539

Depreciation and amortisation

  585,123

-

-

Net cash generated from/(used in) operating activities

114,252

(1,113,837)

(1,939,417)

FINANCING ACTIVITIES

 



Proceeds from share issues

5,053,644

2,755,200

2,755,200

Costs related to share issue

(931,726)

(137,760)

(265,076)

Net cash inflow from financing activities

4,121,918

2,617,440

2,490,124

INVESTING ACTIVITIES

 



Increase in prepaid consideration

-

(2,000,000)

(2,000,000)

Investment in subsidiary

(3,000,000)

-

-

Net cash outflow from investing activities

(3,000,000)

(2,000,000)

(2,000,000)

Net increase/(decrease) in cash and cash equivalents

1,236,170

(496,397)

(1,449,293)

Cash and cash equivalents at beginning of period

274,982

 1,724,275

1,724,275

Cash and cash equivalents at end of period

1,511,152

1,227,878

274,982

 

 



 

 

Notes to the CONSOLIDATED Financial Statements

interim results to 30 june 2022

 

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 Cyber and 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.

This announcement was approved and authorised by the Board of directors on 29 September 2022. 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 2022 are unaudited and do not constitute fully prepared statutory accounts. The comparative figures for the year ended 31 December 2021 are extracted from the 2021 audited unconsolidated financial statements of the Company. The independent auditor's report on the 2021 financial statements was not qualified.

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 ability of the Group to carry out its planned business objectives is dependent on its continuing ability to raise adequate financing from equity investors and/or the achievement of profitable operations.

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 Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

 

2.    Summary of Significant Accounting Policies (contiNUED)

Basis of consolidation (continued)

The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

3.   LOSS 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 to

30 June 2022

US$

six months to

30 June 2022

US$

Year to

31 Dec 2021

US$

Loss attributable to owners of the Group (unaudited):

168,073

1,178,529

2,003,598

Weighted average number of ordinary shares in issue for basic earnings

1,243,631,762

548,969,444

588,086,664

Weighted average number of shares in issue for fully diluted earnings

1,243,631,762

548,969,444

588,086,664

LOSS PER SHARE (CENTS PER SHARE)

0.01

0.2

0.3

BASIC AND FULLY DILUTED:

 



- from continuing and total operations (cents)

0.01

0. 2

0.3

 

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 1 July 2021

 

624,525,000

86,225

7,397,554

At 31 December 2021

624,525,000

84,293

7,297,380

On 14 March 2022 the Company issued 300 million ordinary shares of £0.0001 each at a price of 2p per share under a placing

300,000,000

33,707

5,815,000

On 14 March 2022 the Company issued 699.6 million ordinary shares of £0.0001 each at a price of 2p per share in partial payment for Narf industries LLC and Narf Industries PR LLC

699,600,000

78,606

16,609,000

On 1 April 2022 the Company issued 7.5 million ordinary shares of £0.0001 each at a price of 1.0p per share on exercise of warrants

7,500,000

843

82,890

On 16 May 2022 the Company issued 59,856,100 ordinary shares of £0.0001 each at a price of 2.0p per share as part of the SRI International subscription

59,856,100

6,725

1,341,089

27 May 2022 the Company issued 1,000,000 ordinary shares of £0.0001 each at a price of 2.0p per share as settlement of fees

1,000,000

112

22,069

At 30 June 2022

1,692,481,100

204,286

31,167,428

 

5.   BUSINESS COMBINATIONs

On 17 March 2022, the Company acquired 100% of Narf Industries LLC and Narf Industries PR LLC. These acquisitions were made at a combined acquisition price of $25.6 million and were financed through prepaid investment consideration of $2 million, a cash payment to the former owners of $3 million and $20.6 million in Ordinary shares at an effective issue price of 2p per share. This is a transformative deal for Narf Industries plc and represents a significant building block in the Company's continued evolution. The deal adds substantial intellectual property and high quality individuals to the Group and will be earnings accretive from the second half of 2022.

The assets acquired have been restated within the measurement period, in accordance with IFRS, however the Directors are still considering the treatment of the subsidiaries under IFRS and the treatment is subject to change.  


Amount recognised on acquisition

$

Total intangible fixed assets in acquired businesses

17,563,918

Total tangible fixed assets in acquired businesses

1,293,761

Total current assets in acquired businesses

981,298

Total liabilities in acquired business

(238,977)

Identifiable assets less liabilities

19,600,000

Goodwill

6,000,000

Consideration

25,600,000

Satisfied by:


Cash

3,000,000

Prepaid investment consideration

2,000,000

Shares

20,600,000


25,600,000

 

 

6.   post period end events

There were no significant events subsequent to the balance sheet date.

 

 

 

 

 

ENDS

For further information on the Group please visit www.narfgroup.com or contact:

Robert Mitchell

NARF

Tel: +44 (0) 20 3468 2212

Catherine Leftley/Charlotte Page/Isabel de Salis

St Brides Partners

narf@stbridespartners.co.uk

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 relevant local law or regulation in any such jurisdiction.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR QBLBXLKLBBBE