4 April 2025

NARF INDUSTRIES PLC

("Narf", the "Company", or the "Group")

Narf Leverages Government Funding and AI Advancements to Achieve Market Entry

Narf Industries plc (LSE: NARF), a leading U.S.-based cybersecurity group specializing in advanced threat intelligence and software system security, is pleased to provide an update on its progress in turning government-funded research into commercial products, integrating AI, and accelerating strategic growth through its Social Cyber product and emerging Software Supply Chain Security (SSCS) platform.

Key Highlights

·     Accelerated Product Development: Narf secured new government contract awards and leveraged advancements in Agentic AI and LLM infrastructure to integrate AI and its Social Cyber solution far faster and at less cost than originally projected and without reliance on outside partner investments. 

·     First Commercial Product Launch:  Backed by nearly $4 million in government development funding, Narf brings to market its Social Cyber software and services offering this summer which targets the growing threat of compromised open source software.

·     Strategic Entry in the SSCS Market: By successfully productizing Social Cyber, Narf establishes a foundation for further transforming its deep government-funded IP portfolio into a scalable, Software-as-a-Service (SaaS), SSCS platform.

·   Focus to Cybersecurity Industry Partnerships:  Narf's rapid commercialization, including AI integration, has enhanced its position in strategic go-to-market options, including a shift toward cybersecurity partners with direct market access and platform alignment - moving away from earlier emphasis on AI-first collaborations.

Steve Bassi, CEO of Narf commented:  "A year ago, we believed partnering with an AI specialist would be essential to stay competitive. But our direct work with the latest Agentic AI and LLM tools has proven otherwise-small, expert teams like ours can now deliver advanced capabilities that once required significant investment and headcount. This hands-on success allowed us to move beyond AI-first partnerships and instead focus on aligning with cybersecurity industry leaders who offer direct market access and platform synergy. With our self-sustained commercialization progress to date, Narf is now engaging with top-tier partners on its own terms-driven by strategy, not necessity."

"We're now focused on product roadmap that builds our deep IP portfolio into a scalable platform that finds and remediates software vulnerabilities early in the development lifecycle-before they become operational risks. Social Cyber represent the first of many Narf innovations to tackle the rise in open source software threats, where attacks have surged by over 700% in the past three years."

The Company has accelerated its product development by using government-funded research programs and advances in Generative AI infrastructure, particularly in the following areas:

·      Agentic AI: This suite of new tools allows Narf's cybersecurity experts to turn their knowledge into AI agents without needing deep AI expertise.

·      LLM: Advanced reasoning capabilities and small LLM models allows Narf to develop AI- cybersecurity solutions, improving effectiveness and reducing costs.

The result for Narf over the past 12 months has been faster product cycles, minimal reliance on external AI talent, and less required investment. 

Social Cyber Productization and Beyond

Narf's commercialization launch is anchored in its Defense Advanced Research Project Agency ("DARPA") backed Social Cyber program, which targets the growing threat of compromised open source software (OSS)-a risk brought into sharp focus by the high-profile XZ exploit in March 2024 (see RNS dated 1 May 2024).

The latest government award under this program (see RNS dated August 2024) brings total Social Cyber funding to nearly $4 million. In coordination with a key early government user, Narf is scheduled to complete the final phase of development in June 2025, culminating in delivery of a solution ready for release and broader deployment across both government and commercial markets.

Social Cyber is a discrete product offering that creates an immediate go-to-market opportunity, delivering near-term customer value and establishing Narf's foothold in the broader Software Supply Chain Security (SSCS) market. It also marks the starting point for Narf's broader platform strategy: to commercialize its full IP portfolio-developed through years of government-funded research across multiple advanced software security programs-into a next-generation SSCS platform.

While Narf continues its transition from research to commercialization, its growth strategy centers on strategic partnerships that offer market access, product integration opportunities, and operational scale. These partnerships may also include co-investment or financing aligned with deeper technology collaboration. 

Capital Requirements
With new government contract awards secured (see RNS dated 6 March 2025), Narf has the momentum and resources to sustain development and commercialization efforts without near-term reliance on outside capital or partnerships. Notably, these projections exclude any upside from anticipated revenue tied to the Social Cyber product or broader commercialization initiatives which the Company fully expects to realize.

While ongoing shifts in government funding priorities led by the U.S. Department of Government Efficiency (DOGE) have affected the timing of certain programs and overall impacts are still not settled, Narf's existing contract backlog provides sufficient runway to absorb these impacts over the next several quarters without requiring additional awards. The Company also notes its strategy is increasingly aligned with these shifting government priorities - favoring more near-term deployable solutions over longer-term basic research.

ENDS

For further information visit www.narfgroup.com or contact:

About NARF Industries plc

Narf Industries (LSE: NARF) is a U.S. 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.