REG - Crossword Cybersec - Interim Results & Notice of Investor Presentation
29/09/2022 07:00
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RNS Number : 0740B Crossword Cybersecurity PLC 29 September 2022
Crossword Cybersecurity Plc
Interim Results & Notice of Investor Presentation
29 September 2022 - London, UK Crossword Cybersecurity Plc
(http://www.crosswordcybersecurity.com/) (AIM:CCS, "Crossword", the "Company"
or the "Group"), the cybersecurity solutions company focused on cyber strategy
and risk, today announces its unaudited interim results for the 6 months ended
30 June 2022.
Crossword continued its strong growth in the first half of 2022. In the period
to 30 June 2022 both product and services revenue grew rapidly. Group revenue
grew by 85% to £1.53m compared with H1 2021 (112% higher excluding
discontinued operations). The Company made and successfully integrated
another important acquisition during the period - Threat Status Limited
("Threat Status"), the provider of the Trillion and Arc software products.
Post period, in September 2022, the Company completed an oversubscribed £3.6m
fund raise. The outlook for 2022 remains at circa 75% revenue growth to £4m
and the Company is confident of delivering further revenue growth of 50% in
2023, taking revenue to £6m.
The interim report will shortly be available on the Company's website
https://www.crosswordcybersecurity.com/annual-reports
Financial Highlights
· ARR (Annual Recurring Revenue) growth of 48% since 31 December 2021
to £1.97m
o Successful acquisition and integration of 3 companies with strong
underlying SaaS and services recurring revenue
o Growth in Consulting vCISO recurring revenue to £1m
· Following the period and as announced on 23 September 2022, the
Company completed an oversubscribed £3.6m fund raise
· Gross margin improvement in Consulting
· Cross-selling of products and services from acquisitions into client
base continues to increase
· Expansion of engagement with FTSE 100 client company
· Successful completion of the Rizikon pilot with a global aerospace,
defence and security company that has over 6,000 suppliers
Operational Highlights
· Successful integration of Threat Status Limited, following its
acquisition in March 2022. Size of Trillion's sales deals being secured since
the acquisition is noticeably larger than before acquisition.
· On track to achieve 1,000 users of Rizikon by the end of 2022, from
500 at the end of 2021, with the continued growth in the membership body
programme
· Launched new integrated Supply Chain Cyber practice in response to
client demand and the substantial increase in supply chain cyber threat levels
· Local Omani team engaging with government agencies to support driving
cyber security maturity across the Sultanate of Oman
· Expansion into two new overseas jurisdictions, within one of which
Crossword is working with a government institution
Outlook
· Projected revenue growth of circa 75% to £4m in 2022, driven by
organic growth and already completed acquisitions, in line with market
expectations
· Focus on optimisation of cross-sell opportunities is yielding
improved results
· Continued focus on acquisition strategy
· Crossword's full range of cyber security products and services will
be used to help companies in the Gulf region improve their cyber security
preparedness
· Growing a team in Singapore as part of the continued investment in
Nightingale, part of our threat detection and response services, to enable
conversion of the pipeline of larger clients, which has been driven by
cross-selling
· Taking Identiproof to market together with continuing product
development on verifiable credentials technology
· Investment in Sales with the introduction of the MEDDICC (sales
qualification methodology) framework
Tom Ilube, CEO, Crossword Cybersecurity, commented:
"Crossword's services and products are experiencing strong revenue growth, in
a sector where spend is not discretionary, driven by the quality of its
offering and the rising number and constantly evolving nature of cyberattacks.
Crossword's three acquisitions completed in the last 18 months have been
successfully integrated and are already delivering strong results, thanks to
higher cross-selling opportunities to our growing client base and improved
operational efficiencies. We are very encouraged by the outlook for both our
services and products and look forward to updating shareholders on progress."
Investor Call
Crossword is pleased to announce that members of the Executive Team will
provide a live presentation relating to Interim Results via the Investor
Meet Company platform on 6(th) Oct 2022 at 12:00pm BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
9:00am the day before the meeting or at any time during the live
presentation. Investors can sign up to Investor Meet Company for free and
add to meet CROSSWORD CYBERSECURITY PLC via:
https://www.investormeetcompany.com/crossword-cybersecurity-plc/register-investor
(https://www.investormeetcompany.com/crossword-cybersecurity-plc/register-investor)
Investors who already follow Crossword on the Investor Meet Company platform
will automatically be invited.
- Ends -
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
Contacts
Crossword Cybersecurity plc - Tel: +44 (0) 333 090 2587
Email: info@crosswordcybersecurity.com
Tom Ilube, Chief Executive Officer
Mary Dowd, Chief Financial Officer
Grant Thornton (Nominated Adviser) - Tel: +44 (0) 20 7383 5100
Colin Aaronson / Jamie Barklem / Daphne Zhang / Ciara Donnelly
Hybridan LLP (Broker) - Tel: +44 (0)203 764 2341
Claire Louise Noyce
For media enquiries contact:
Financial PR:
David Hothersall, Kinlan Communications
davidh@kinlan.net - Tel: +44 (0) 207 638 3435
General:
Duncan Gurney, GingerPR
duncan@gingerpr.co.uk - Tel: +44 (0)1932 485 300
About Crossword Cybersecurity plc
Crossword offers a range of cyber security solutions to help companies
understand and reduce cyber security risk. We do this through a combination of
people and technology, in the form of SaaS and software products, consulting,
and managed services. Crossword's areas of emphasis are cyber security
strategy and risk, supply chain cyber, threat detection and response, and
digital identity and the aim is to build up a portfolio of cyber security
products and services with recurring revenue models in these four areas. We
work closely with UK universities and our products and services are often
powered by academic research-driven insights. In the area of cybersecurity
strategy and risk our consulting services include cyber maturity assessments,
industry certifications, and virtual chief information security officer
(vCISO) managed services.
Crossword's end-to-end supply chain cyber standard operating model (SCC SOM)
is supported by our best-selling SaaS platform, Rizikon Assurance, along with
cost-effective cyber audits, security testing services and complete managed
services for supply chain cyber risk management. Threat detection and response
services include our Nightingale AI-based network monitoring, Nixer to protect
against application layer DDoS attacks, our Trillion and Arc breached
credentials tracking platforms, and incident response. Crossword's work in
digital identity is based on the World Wide Web Consortium W3C verifiable
credentials standard and our current solution, Identiproof, enables secure
digital verification of individuals to prevent fraud.
Crossword serves medium and large clients including FTSE 100, FTSE 250 and
S&P listed companies in various sectors, such as defence, insurance,
investment and retail banks, private equity, education, technology and
manufacturing and has offices in the UK, Poland and Oman. Crossword is traded
on the AIM market of the London Stock Exchange.
Visit Crossword at https://www.crosswordcybersecurity.com/
(https://www.crosswordcybersecurity.com/)
CROSSWORD CYBERSECURITY PLC
Crossword Cybersecurity keeps organisations secure in the digital world
through a combination of software products and expert-led cybersecurity
services.
Since admission to AIM in 2018, Crossword has grown revenues 4-fold from
£0.39 million (excluding discontinued operations) in H1 2019 to £1.53
million, through a combination of organic growth and acquisitions.
Crossword's services have gained a strong reputation in the market thanks to a
deep expertise in cyber security and a hands-on approach. Crossword's
full-service consulting team provides strategy, assessment and risk management
services. The constantly evolving nature and increasing number of cyberattacks
means that demand for our consulting services keeps growing strongly. Our May
2022 report "Strategy and collaboration: a better way forward for effective
cybersecurity (https://www.crosswordcybersecurity.com/crossword-report) "
showed that over 40% of respondents believed their existing cyber strategy
will be outdated in two years, and a further 37% in three years. This dynamic
creates growing demand for the expert consulting that Crossword provides.
Crossword's products are driven by research from some of the UK's leading
universities and other research-driven insights. Crossword has developed
strong and extensive research and development relationships with many of the
19 UK university academic centres of excellence in cyber security. Crossword
offers a portfolio of cyber security software products, having successfully
integrated three acquisitions since its admission to AIM. Crossword's products
serve some of the fastest growing sectors in cyber security, including supply
chain risks, threat intelligence and credentials breaches.
Cyber security industry drivers
Several inter-connected factors are driving the growth in cyber security
software and services. The accelerating pace of digitalisation due to the
COVID-19 pandemic and the shift in our working habits are the main motivator
for improving cyber resilience, with 84% of C-level executives agreeing that
cyber resilience is a business priority for their organisations in 2022,
according to the WEF Global Cybersecurity Outlook Report 2022
(https://www.weforum.org/reports/global-cybersecurity-outlook-2022/) .
In addition, the constantly increasing number and growing sophistication of
cyberattacks means that spending on cyber security defence is a key priority
for business and governments. In 2021, the average number of cyberattacks and
data breaches increased by 15.1% from the previous year. Over the next two
years, security executives from over 1,200 companies polled by ThoughtLab
(https://thoughtlabgroup.com/cyber-solutions-riskier-world/) see a rise in
attacks from social engineering and ransomware as nation-states and
cybercriminals grow more sophisticated. As a result, Gartner
(https://www.gartner.com/document/4016190?ref=algobottomrec&refval=4004647)
predicts end-user spending for the information security and risk management
market will grow from $172.5 billion in 2022 to $267.3 billion in 2026,
attaining a compound annual growth rate (CAGR) of 11%.
The UK is home to the largest, most concentrated and accessible cyber security
market in Europe, worth over £10bn, growing 14% in 2021 representing twice
the growth on the previous year. The UK's reputation as a centre of cyber
security excellence means it is the third largest exporter of cyber security
services globally, worth £4.2bn in 2020. As one of the UK's leading cyber
security commercialisation specialists, Crossword is well positioned to
benefit from sector growth, both in the UK and internationally.
The above cyber security industry drivers, combined with a strong set of
products and services, mean that Crossword is well positioned to keep growing
strongly.
CHIEF EXECUTIVE OFFICER'S REVIEW
Crossword continued its strong growth in the first half of 2022. In the period
to 30 June 2022, both product and services revenue grew rapidly. Group revenue
grew by 85% compared with H1 2021 to £1,525,234 (112% higher excluding
discontinued operations). Consulting revenue in particular grew 72% compared
with the same period last year. The Company completed another important
acquisition during the period - Threat Status Limited, the provider of the
Trillion and Arc software products.
Trillion and Arc are already making strong revenue progress in their new
Crossword home and showing good promise. This is the third acquisition
Crossword has made and successfully integrated in the past 18 months,
strengthening Crossword's reputation in the market as a business in which high
quality products and their teams can grow. During the period, Crossword was
also delighted to formally launch its joint venture in Oman with its partner,
Al-Rawahy Holdings LLC and progress towards securing its first cyber security
projects in the region.
Despite the Covid-19 Omicron wave, the demand for cyber security products and
advice continues to grow. Crossword was well positioned to respond to its
clients' needs. The Company released a major research report, "Strategy and
Collaboration: A better way forward for effective cyber security", based on
interviews with over 200 Chief Information Security Officers, which
highlighted the continuing cyber security risks and challenges facing major
organisations.
Services
Crossword's consulting services delivered outstanding results in the first
half of 2022, achieving 72% growth versus the equivalent period in 2021. We
secured our first FTSE100 client project and carried out international
projects in new territories such as Bermuda, a major global reinsurance hub,
as well as the Caribbean and West Africa.
Crossword's Nightingale monitoring and cyber incident response services,
acquired in August 2021, supported the growth in revenues. Nightingale was
deployed to a major insurance company in dual testing, new investment
management clients were signed up and a major cyber security incident response
undertaken for a top ten law firm. Crossword is investing in Nightingale's
capacity to support larger firms on a global basis and therefore established a
team in Singapore in August this year to provide around the clock monitoring
capability.
Products
Rizikon Assurance, Crossword's flagship SaaS product, addresses supply chain
risks. These are a rapidly growing challenge for organisations across all
sectors. Rizikon's user base more than doubled compared to the end of the
previous period, growing 116% and on track to achieve a target of 1,000 user
organisations by the end of 2022. Rizikon completed a successful trial for a
global aerospace, defence and security company and is in the process of
concluding a contract to roll out Rizikon to the same company's 6,000
suppliers. Crossword's partnerships with membership bodies are yielding
positive results, with new partners signed including the Chartered Insurance
Institute, British Computer Society, International Federation of Consulting
Engineers, techUK and the British Educational Suppliers Association.
In March 2022, Crossword completed the acquisition of Threat Status Limited, a
threat intelligence company with an excellent team and an impressive set of
clients both in the UK and overseas in North America and Spain. This
acquisition added two new products (Trillion and Arc) to Crossword's portfolio
of products. Cross-selling Trillion into existing Crossword clients commenced
immediately post acquisition. Trillion's outstanding product features and
Crossword's targeted sales approach means that the size of deals being secured
since the acquisition is noticeably larger than pre-acquisition. Trillion is
also being sold into managed service providers (MSPs) through the continued
development of a channels partner programme.
Identiproof is the credentials verification wallet technology product acquired
in 2021 as part of the acquisition of Verifiable Credentials Ltd. Good
progress has been made with developing Identiproof, preparing to pilot
Identifproof with a UK chartered institute for their digital professional
qualifications and submitting a proposal to a large UK skills and
qualifications body for digital credentials.
Crossword has now acquired and successfully integrated three first class cyber
security product and services companies over the past 18 months and continues
to be on the lookout for an acquisition that can accelerate its growth.
On the corporate front, following the period and as announced on 23 September
2022, Crossword completed an oversubscribed fundraising of £3.6 million at a
price of 21.7 pence per share. This funding round ensures the Group's path to
deliver on its aggressive organic growth plans.
Outlook
Strong demand for our cyber security services and products, an able leadership
team and a strengthened balance sheet, will drive Crossword's growth and we
expect to meet market expectations of 75% revenue growth in 2022, taking
revenue to £4 million for the year as a whole. Additionally, the Board is
confident of delivering 50% revenue growth in FY 2023 taking revenues to £6
million, in line with market expectations.
OPERATIONAL REVIEW
Services
Services experienced very strong growth of 125% compared to the previous
period in 2021.
Consulting
Demand for our expert consulting services keeps growing strongly as a result
of the constantly evolving and increasing number and types of cyber-attacks.
During the period Crossword won its first FTSE 100 client project and carried
out international work in new territories: Bermuda, the Caribbean and West
Africa.
The Consulting division now numbers 16 specialists. With higher staffing
levels we have been able to improve our consulting methodologies and develop a
more scalable model to provide our services. This is leading to work with
larger clients with multi-faceted and more complex needs.
To increase the scalability of our consulting services, we have developed
services that integrate recurring revenues from several other Crossword's
products, namely from Nightingale and Rizikon. As part of this drive, we were
successful in cross-selling Nightingale, Crossword's comprehensive security
monitoring service, into consulting clients. This is increasing the level of
recurring revenues that the Consulting division generates.
During the period we also launched the Supply Chain Cyber practice, which
offers consulting services wrapped around a new set of strategic Rizikon
modules with a recurring revenue proposition. This proposition targets the
needs of large organisations regarding their third party supplier cyber risk
and has been well received by major clients.
Nightingale
The integration of Nightingale is delivering on expectations and saw
significant successes in the period. These include new investment management
clients, deployment to a major insurance company in a dual running assessment
and carrying out a cyber incident response at a top ten law firm.
To service the needs of global clients, Nightingale's capabilities were
increased and we opened an office in Singapore employing a Singapore regional
manager and our first SOC (security operations centre) analyst.
Products
Crossword made strong progress across all products in the first half of 2022,
both in terms of product development and improvement as well as sales and
business development.
Rizikon
Rizikon is Crossword's flagship product and is strongly positioned in the
market as a leading product for supply chain risk management.
Preventing cyber risk attacks in supply chains is a fast growing market. The
European Union Agency for Cybersecurity (ENISA) reported in 2021
(https://www.enisa.europa.eu/news/enisa-news/understanding-the-increase-in-supply-chain-security-attacks)
that it expected supply chain attacks to quadruple over the following 12
months. Simultaneously, supply chains are going through a period of digital
transformation
(https://www.gartner.co.uk/en/supply-chain/insights/supply-chain-digital-transformation)
, with automation increasing efficiencies, whilst at the same time introducing
possible vulnerabilities to businesses. As a result, industries including but
not limited to banking, retail and manufacturing are under mounting financial,
reputational and regulatory pressure to take control of supply chain
cybersecurity risks.
To ensure Rizikon remains strongly positioned we made substantial progress in
re-engineering Rizikon, by moving our coding from Java to ReactJS + Java.
This will speed up future development and enable Rizikon to keep quickly
addressing emerging supply chain cyber security needs. Other notable product
developments for Rizikon included the completion of analysis & designs for
new higher value modules, a number of improved features for Rizikon as well as
a new ESG assurance question set.
For organisations of any size, the greatest threats to cybersecurity are
suppliers, third parties and connected technologies because they are so hard
to control. Recent research
(https://www.crosswordcybersecurity.com/crossword-report) independently
conducted for Crossword of over 200 Chief Information Security Officers
(CISOs) found that 83 per cent. of CISOs viewed "ensuring that the entire
supply chain is water-tight in its ability to defend and recover against
threat actors" as a challenge.
To address this increased demand for consulting and product in supply chain
cyber risk, during the period we launched the Supply Chain Cyber practice,
which offers consulting services wrapped around a new set of strategic Rizikon
modules with a recurring revenue proposition. The proposition targets the
needs of large organisations regarding their third party supplier cyber risk
and has been well received by major clients.
Trillion
Following the acquisition of Threat Status Limited in March this year,
Crossword is continuing to successfully integrate its Trillion and Arc
software products. This is leading to higher sales volumes of Trillion in
particular, compared to prior to the acquisition. We continued with our sales
strategy of seeking to include Trillion into third-party MSPs (managed service
providers) and are currently exploring a Trillion opportunity with a large
network operator. On the development side, we improved product functionality
to support much larger multi-organisational clients as well as multi-tiered
SAAS providers. This has dramatically increased the revenue universe which
Trillion can target.
ARC/Nixer Cyber ML
Arc validates customer credential pairs (username and password) against
databases of known leaked usernames/passwords. It does so quickly and
efficiently without harming the user experience.
Nixer CyberML operates in the same sector as Arc, using machine learning to
match application credentials against a list of 555M leaked username/password
combinations, making recommendations if matches are made. As with Arc, it does
so with zero friction to user experience.
ARC and Nixer Cyber ML operate in similar focus areas and we have started work
on merging the two products in order to provide a best in class proposition to
clients.
Identiproof
The advantages of being able to easily access and share qualifications through
digital wallets is driving strong demand worldwide for verifiable credentials
software. During the period we made good progress on both product development
and go-to-market plans for Identiproof, which is our credentials verification
wallet technology.
A new demo portal was made available enabling demos of Identiproof to
potential customers. It covers both flows in which the verifier requests
credentials to the mobile wallet, and in which users want to share their
credentials as badges. Experimental R&D proof of concept work continued
with grant funded development in the areas of interoperability and
trustability.
The JFF Plugfest 1 project (up to $30,000) attested that Identiproof can issue
credentials in the Open Badge v3 standard. The DOOR project (€25,000) allows
issuers and verifiers to verify the wallet's device was not tampered by using
TPM hardware. Crossword was awarded an EU NGI Atlantic research project,
which commenced in September 2022 (€45,250), to lead a project to test the
OpenID Foundation's protocols for transferring verifiable credentials.
Progress was made on the second major version of the Identiproof suite of
products. The new versions will have a new architecture and use later
versions of the development stack for better scalability, reliability and
resilience.
In parallel to product development, we made good progress on Identiproof's
go-to-market strategy. We submitted proposals to two large UK skills and
qualifications bodies for their digital credentials, and prepared a pilot
programme with a UK chartered Institute for professional qualifications.
Sales & Business Development
The customer success team is ensuring high retention rates and increased
contract value by demonstrating the value of products to clients. We saw this
markedly in the case of Rizikon, leading to high levels of contract renewals
as supply chain risks increase and become more widely recognised.
During the period, Crossword's sales team was restructured into direct and
indirect/channel sales with the objective of sharpening our focus on driving
results. As part of this restructure, for direct sales we are placing more
focus on sector focused sales campaigns, e.g. targeting sectors such as large
clients facing supply chain risks with Rizikon. For indirect/channel sales
we are expanding channel sales via resellers and distributors. To generate a
better sales pipeline and results overall we also implemented the
MEDDICC sales methodology, whilst continuing to further develop CRM and sales
reporting/automation.
We were pleased to establish several new sales partnerships during the period.
Sales partnerships are part of Crossword's indirect/channel sales and enable
Crossword to reach large audiences quickly and effectively. The new
partnerships included BESA (British Educational Suppliers Association), the
SWCRC (South West Cyber Resilience Centre
(https://www.bing.com/ck/a?!&&p=ddf4ba0d4d63c8efJmltdHM9MTY2NDE1MDQwMCZpZ3VpZD0wNTMzM2UyOC03NjU3LTY3YjktMjVhNS0yZmIzNzI1NzYxNGUmaW5zaWQ9NTE3OQ&ptn=3&hsh=3&fclid=05333e28-7657-67b9-25a5-2fb37257614e&u=a1aHR0cHM6Ly93d3cuc3djcmMuY28udWsv&ntb=1)
), techUK, (the UK digital technology trade association), the Chartered
Insurance Institute and the International Federation of Consulting Engineers.
We were also delighted that the IASME Consortium Limited, a UK Government
Cyber Essentials Partner, selected Rizikon Assurance as the core platform to
support a new Maritime Security certification, taking the number of
certifications it delivers via Rizikon to three.
CROSSWORD CYBERSECURITY SERVICES - OVERVIEW
Crossword's Services help organisations become more resilient to cyber-attacks
& align to best practice standards
Crossword's team of expert consultants provides bespoke cyber security
consulting advice tailored to clients' business needs. The team leverages
years of experience in
national security, defence and commercial cyber intelligence and operations.
Crossword's full-service cyber security consulting team provides strategy,
assessment and risk management services.
Crossword's consultants work with over 100 clients across multiple sectors,
including insurance, professional services, financial services, nuclear energy
and technology. Consulting clients include one of the world's largest, global
S&P500 insurance brokers, several FTSE 250 companies and a FTSE 100
company.
Crossword's consulting services play a strategic role in its growth, in
addition to currently being its main source of revenue. By consulting on
clients' needs and challenges, Crossword gains valuable market insights that
help inform its product development. In turn, the products business provides
consulting opportunities, such as the many third party, risk consulting
opportunities that have arisen out of Rizikon Assurance product sales.
In August 2021, Crossword acquired Stega UK Limited ("Stega"), the threat
intelligence and monitoring company, and its sophisticated in-house platform,
Nightingale. In doing so, circa 30 new clients were added, primarily financial
sector organisations. This took the total number of fee-paying consulting
clients to over 100.
Nightingale, Crossword's world class platform, is a comprehensive security
monitoring service. It brings together multiple facets to identify
organisational assets, users, traffic, networks and endpoints in order to
mitigate the threats and vulnerabilities an organisation faces.
Crossword's consulting services continue to grow from strength to strength.
This growth is driven by a holistic approach to delivering our consulting
services and meeting clients' needs in ways that work best for them. We do
this by providing clients with specialist offerings e.g. the Virtual Chief
Information Security Officer (vCISO) service, as well as by capitalising on
other Crossword assets, e.g. the launch of the Supply Chain Cyber practice in
May 2022, which leverages the Rizikon Platform.
CASE STUDY - ADDING RECURRING REVENUE TO SERVICES VIA NIGHTINGALE MONITORING
PLATFORM (Acquisition of Stega UK Limited)
In August 2021, Crossword completed the acquisition of Stega UK Limited, the
threat intelligence and monitoring company.
The acquisition has provided Crossword with additional threat intelligence and
monitoring services, thanks to Nightingale, Stega's sophisticated managed
services platform. The acquisition brought circa 30 new clients to Crossword,
primarily financial sector organisations, taking the total number of
fee-paying services clients to over 100.
At the time of the acquisition, Stega was breaking even on an annualised
basis, with £605,000 revenue in the full financial year ended 30 November
2020, 75% of which was recurring revenue.
The Nightingale offering has been successfully integrated into Crossword,
leading to several combined consulting and Nightingale projects with
investment management clients and cross selling of Nightingale services into
several Consulting clients. Further cross-sell opportunities are being
explored, alongside operating synergies.
"The integration into Crossword has enabled Nightingale to rapidly globalise
and grow to support larger clients and expand its client base; this could only
have been done with the investment from Crossword.
The synergies between the consulting and Nightingale services are already
bearing fruit, having been afforded the opportunity to demonstrate the
advantages of Nightingale over a traditional security operation centre (SOC)
to existing consulting clients. This is an exciting period for Nightingale as
we evaluate new services to protect clients whilst also gaining operational
efficiencies." Global Security Operations Director.
CROSSWORD CYBERSECURITY PRODUCTS - OVERVIEW
Crossword's product portfolio addresses some of the most pressing needs in the
cyber security sector, including supply chain security, credential attacks,
account breaches and account protection.
Crossword's product portfolio currently numbers five products and is the
result of both internal development and acquisitions. For products developed
internally, Crossword's specialist product development and software
engineering teams develop the initial concept into a fully-fledged commercial
product that Crossword then takes to market.
Crossword has an established tradition in commercialising cyber security
research from leading UK universities. Rizikon, Crossword's flagship product
focused on supply chain risk management, was based on research by the Centre
for Cyber Security Sciences at City University, London, under the leadership
of Professor David Stupples, whilst Nixer Cyber ML was developed in
collaboration with Imperial College, University of London. Nixer CyberML
applies machine-learning to user behaviour analysis to detect and prevent
credential stuffing and other account takeover attacks.
The acquisitions undertaken to date are Trillion and Arc (acquisition of
Threat Status Ltd completed in March 2022) and Identiproof (acquisition of
Verifiable Credentials Limited completed in May 2021).
CASE STUDY - RIZIKON PRO & RACING POST
The problem
Spotlight Sports Group is the owner of Racing Post, the home of horse racing
in the UK and internationally since launching as a newspaper in 1986.
As part of a heavily regulated industry, Spotlight Sports Group invests huge
amounts of time and effort to ensure it, and its 40+ suppliers, meet the
governance, regulatory and compliance requirements of its industry.
In 2021, Spotlight Sports Group wanted to automate its supplier management and
onboarding processes, so that it could improve the experience for both staff
and suppliers. A typical onboarding process requires a supplier to complete a
host of forms about every aspect of its business operations. They are time
consuming to manage for all parties, leading to delays, complications, and
poor visibility of risks. One critical area that Spotlight Sports Group
assesses suppliers for is the ISO 27001 Information Security Management
certification, and the team could see a clear opportunity for this to be more
efficiently managed.
A rapid implementation with 50% time saving
Implemented in a matter of weeks, using 'out-of-the-box' questionnaires and
very little customisation, Spotlight Sports Group was able to move quickly
from a trial to a live solution, with immediate efficiency gains for
day-to-day process.
A new supplier can be added to the Rizikon Pro platform in under five minutes,
by sending out questionnaires for supplier completion via a Spotlight Sports
Group branded, encrypted secure portal.
Supplier onboarding has been greatly improved in part by Rizikon Pro's
integration with CreditSafe, which combines questionnaire responses with data
on over 320 million companies worldwide, including their credit risk scores,
saving staff a huge amount of time.
All the information and discussions about questionnaires is kept in one place
and we can clearly see when and by whom forms were completed, removing any
non-repudiation risk.
Recurring savings and increased efficiency
Spotlight Sports Group can now easily and transparently demonstrate to
auditors its compliance processes, which are reinforced by Rizikon Pro. For
example, the team can identify suppliers that need encouragement or support to
complete questionnaires, which is an important step to ensuring compliance.
Spotlight Sports Group predicts even greater time savings in the future,
because the anniversaries on which suppliers must review and update their
compliance data will be automated by Rizikon Pro. This will further reduce the
risk of non-compliance and remove administrative overheads.
"We considered a range of solutions, from simple cloud-based forms, through to
well-known third-party risk management platforms, which were expensive and
over-complicated. Rizikon Pro, which is aimed at SMEs, offers us by far the
best fit for our supplier management needs with its balance between
functionality, collaboration features and flexibility." Victor Mihăilescu,
Head of Security at Spotlight Sports Group
CROSSWORD'S ACQUISITION STRATEGY - OVERVIEW
Crossword's growth strategy is based on growing its organic revenues,
successfully integrating its acquisitions and acquiring further outstanding
cyber security companies that complement and diversify its revenue base to
build a portfolio of subscription-based, enterprise-class products and
services.
Crossword enters into acquisitions with the objective of achieving win-win
outcomes for both Crossword and the acquired companies, resulting in improved
cross-selling, client customer experience and increased operational efficiency
as a company.
Crossword places a special emphasis in leveraging its reputation in the market
as an excellent home for the best in cyber security technology and expert
teams, and ensuring that acquired companies are successfully integrated into
Crossword.
Since May 2021, Crossword has successfully integrated three acquisitions. In
May 2021, we acquired Verifiable Credentials Limited, adding IdentiProof
(credentials verification wallet technology) to our product portfolio. In
August 2021, we acquired Stega and integrated Nightingale, its sophisticated,
in-house monitoring platform. In March 2022 we acquired Threat Status Limited,
the threat intelligence company and provider of Trillion, the cloud based SaaS
platform for enterprise-level credential breach intelligence. Threat Status's
more recently released product, Arc, protects the users of customer-facing
applications from the threat of account takeovers. Trillion and Arc form part
of Crossword's portfolio of cyber security products, alongside its consulting
and managed services offerings: vCISO Virtual Chief Information Security
Officer and Nightingale monitoring.
Following the successful integration of the three companies above, Crossword
is continuing its acquisition strategy to acquire companies that will help
drive its growth ambitions, focusing on making revenue enhancing acquisitions
of quality companies that increase Crossword's access to larger addressable
markets and leverage Crossword's reputation in the market.
"Crossword's acquisition ambition is to provide clients with a portfolio of
subscription-based, enterprise-class products and services." Tom Ilube, CEO,
Crossword Cybersecurity
CASE STUDY - PRODUCT ACQUISITION OF ARC AND TRILLON (THREAT STATUS LIMITED)
Cutting edge cyber security products
Threat Status's platform enables businesses and managed service providers to
monitor data that has been stolen and shared on the dark web and criminal
forums which could harm the security of their business or that of their
customers.
Threat Status developed its subscription-based, enterprise-class services to
be turnkey, highly scalable, very secure and ready to go. The platform is
quick for onboarding new clients, with no complex integrations needed and
rapidly delivers customer value. Threat Status (https://www.threatstatus.com/)
was founded in 2017 by Jon Inns, who became the CEO of the business, and was
joined by Ian Nice, CTO, receiving investment from a third-party fund.
Its two products are Trillion and Arc. Trillion is a breached account mining
platform that continuously tracks, correlates and analyses billions of stolen
usernames and passwords, searching for digital identities that could belong to
client's customers.
Arc provides account protection for eCommerce platform owners, querying for
access attempts in real time, using username and password pairs already known
to criminals. This enables clients to instantly step in and avoid losses.
Finding a home in which to grow
Threat Status wanted to expand its reach and was looking for an established
home that would be able to leverage its sales outreach and found in Crossword
its perfect home.
Upon completion of the acquisition in March 2022, Jon, Ian and their team of
developers and apprentices joined Crossword to drive the continued
commercialisation and development of Threat Status products. At the time of
acquisition, Threat Status was reaching breakeven, with 90% recurring
revenue.
"Threat Status has developed one of the strongest and most advanced credential
leak monitoring services in the market and we are working intensively on
leveraging the opportunities and synergies the acquisition by Crossword
represents. The combination of Crossword's experienced sales team and
growing client base with our proven and trusted technology is a powerful one.
We have already begun to see the benefits of technical and business
development collaborations arising from successful integration. We expect
market penetration to accelerate, increasing revenue and client
protection." Jon Inns, Product Director at Crossword
Condensed Consolidated Statement of Unaudited 6 Months to 30 June 2022 Audited 12 Months to 31 December 2021 Unaudited 6 Months to 30 June 2021
Comprehensive Income
£ £ £
Revenue 1,525,234 2,171,137 824,923
Cost of Sales (1,493,707) (1,957,178) (812,889)
Gross Profit 31,527 213,959 12,035
Administrative expenses (2,148,026) (3,260,139) (1,478,595)
Other operating income - 358,727 27,288
Finance income-bank interest income and foreign exchange - 4,956 57
Finance costs-other interest expense (156,487) (220,545) (94,858)
Gain on revaluation of financial assets - 456,803 -
Loss for the year/period before taxation (2,272,986) (2,446,239) (1,534,073)
Tax credit / (expense) 393,810 172,615 (2,427)
Loss for the Period / Year (1,879,176) (2,273,624) (1,536,500)
Other Comprehensive Income
Items that may be reclassified to profit or loss:
Foreign Exchange Translation Loss (146) (13,220) (9,687)
Other Comprehensive Income (146) (13,220) (9,687)
Total Comprehensive Loss (1,879,322) (2,286,844) (1,546,188)
Loss for the period attributable to:
Owners of the parent (1,861,609) (2,229,296) (1,542,060)
Non-controlling interests (17,567) (44,328) 5,560
Total Loss for the Year / Period (1,879,177) (2,273,624) (1,536,500)
Total comprehensive loss for the period attributable to:
Owners of the parent (1,861,755) (2,242,516) (1,551,748)
Non-controlling interests (17,567) (44,328) 5,560
Total Comprehensive Loss (1,879,322) (2,286,844) (1,546,188)
Loss Per Share (basic) (0.02) (0.03) (0.03)
Loss Per Share (diluted) (0.02) (0.03) (0.03)
All results are derived from continuing operations
Unaudited Group Audited Unaudited Group
Group
Condensed Consolidated Statement of
Financial Position as at 30 June 2022
30 June 2022 31 December 2021 30 June 2021
£ £ £
Non-Current Assets
Goodwill 875,277 875,277 -
Intangible assets 2,761,202 1,103,679 594,801
Tangible assets 21,146 5,460 7,145
Unlisted investment 456,834 456,834 31
Total non-current assets 4,114,459 2,441,251 601,978
Current Assets
Trade and other receivables 1,570,310 1,066,076 653,808
Cash and cash equivalents 579,444 3,373,062 682,407
Total current assets 2,149,755 4,439,138 1,336,215
TOTAL ASSETS 6,264,214 6,880,388 1,938,193
EQUITY
Attributable to the owners of the Company
Share Capital 377,325 374,786 290,213
Share premium account 15,118,699 14,971,221 10,195,388
Other reserves 313,262 240,310 208,191
Retained earnings (13,688,960) (11,827,351) (11,140,116)
Translation of foreign operations (15,138) (14,992) (11,459)
Attributable to owners of the parent 2,105,188 3,743,974 (457,783)
Non-controlling interests (156,695) (139,127) (89,239)
Total equity 1,948,493 3,604,847 (547,021)
LIABILITIES
Current Liabilities
Trade and other payables 2,282,919 1,413,658 1,014,462
Other current liabilities 1,381,594 1,368,638 -
Total current liabilities 3,664,512 2,782,296 1,014,462
Long Term Liabilities
Other non-current liabilities 651,208 493,245 1,470,752
Total long term liabilities 651,208 493,245 1,470,752
Total Liabilities 4,315,720 3,275,541 2,485,214
Total Equity & Liabilities 6,264,214 6,880,388 1,938,193
Condensed Consolidated Statement of
Changes in Equity
£ Share Capital Share Premium Equity Reserve Retained Earnings Translation Reserve Non- Total
controlling
interests
Unaudited - six months ended 30 June 2022
At 1st January 374,786 14,971,221 240,310 (11,827,351) (14,992) (139,126) 3,604,847
Issue of shares 2,539 147,478 - - - - 150,017
Employee share schemes - value of employee services - - 72,952 - - - 72,952
Loss for the period - - - (1,861,609) - (17,567) (1,879,177)
Other comprehensive loss for the period - - - - (146) - (146)
At 30th June 377,325 15,118,699 313,262 (13,688,960) (15,138) (156,695) 1,948,493
Audited - year ended 31 December 2021
At 1st January 256,605 8,518,391 181,618 (9,598,056) (1,772) (94,799) (738,013)
Issue of shares 118,181 6,770,954 - - - - 6,889,135
Transaction costs - (318,124) - - - - (318,124)
Employee share schemes - value of employee services - - 58,692 - - - 58,692
Loss for the period - - - (2,229,296) - (44,328) (2,273,624)
Other comprehensive loss for the period - - - (13,220) (13,220)
At 31th December 374,786 14,971,221 240,310 (11,827,351) (14,992) (139,126) 3,604,847
Unaudited - six months ended 30 June 2021
At 1st January 256,605 8,518,391 181,618 (9,598,056) (1,772) (94,799) (738,012)
Issue of shares 33,609 1,676,997 - - - - 1,710,606
Employee share schemes - value of employee services - - 26,573 - - - 26,573
Loss for the period - - - (1,542,060) - 5,560 (1,536,500)
Other comprehensive loss for the period - - - - (9,687) - (9,687)
At 30th June 290,213 10,195,388 208,191 (11,140,116) (11,459) (89,239) (547,021)
Condensed Consolidated Statement of Cashflows Unaudited 6 Months to 30 June 2022 Audited 12 Months to 31 December 2021 Unaudited 6 Months to 30 June 2021
Cashflows From Operating Activities £ £ £
Loss for the period / year (1,879,176) (2,273,624) (1,536,500)
Movement in trade and other receivables (279,314) (412,005) (86,357)
Movement in trade and other payables 217,315 86,231 (133,142)
Depreciation and amortisation 135,636 104,124 62,340
Finance Costs 156,487 220,545 94,858
Gain on measurement of financial assets - (456,803) -
Employee share schemes 72,952 58,692 26,573
Tax (credit) / expense (393,810) (172,615) 2,427
Tax paid (2,907) (5,396) (2,427)
Net Cashflow from Operating Activities (1,972,817) (2,850,850) (1,572,228)
Cashflow From Investing Activities
Purchase of tangible assets (17,061) - -
Investment in intangible assets (96,291) (183,796) (88,788)
Acquisition of subsidiary, net of cash acquired (625,408) (645,390) (62,316)
Net Cashflow from Investing Activities (738,760) (829,185) (151,104)
Cashflows From Financing Activities
Proceeds from issue of ordinary shares - 6,639,135 1,560,606
Share issuance costs - (318,124) -
Interest paid on convertible loan notes (81,896) (168,000) (83,385)
Payments for right of use assets - (43,734) (19,537)
Interest paid - (1,638) (600)
Net Cashflow from Financing Activities (81,896) 6,107,639 1,457,084
Net (Decrease) / Increase in Cash & Cash Equivalents (2,793,473) 2,427,602 (266,248)
Foreign Currency Translation Difference (145) (12,881) (9,687)
Cash and Cash Equivalent at the beginning of the period 3,373,062 958,341 958,342
Cash and Cash Equivalent at the end of the period 579,444 3,373,062 682,407
Notes to the Financial Information
1. Accounting policies
1.1 The group and its operations
Crossword Cybersecurity plc (the "Company") is a company incorporated on 6
March 2014 in the United Kingdom under the Companies Act 2006. The Company is
the parent company of the Crossword group of Companies focusing on the
cybersecurity sector. The principal activities are the development and
commercialisation of university research-based cyber security related software
and cybersecurity consulting.
The financial information includes the results of the Company and its
subsidiaries (together referred to as the "Group" and individually as "Group
entities".
1.2 Basis of preparation of financial information
The financial information has been prepared in accordance with the
requirements of the London Stock Exchange plc AIM Rules for Companies ("AIM
Rules") and in accordance with International Financial Reporting Standards
("IFRS") adopted by the UK in conformity with the requirements of the
Companies Act 2006 applicable to companies reporting under IFRS. As permitted,
this Half Yearly Financial Report has been prepared in accordance with the AIM
Rules and not in accordance with IAS 34 'Interim Financial Reporting'. The
financial information has been prepared on the historical cost basis, except
for accounting for business combinations and certain financial assets and
liabilities. The preparation of financial information in conformity with IFRS
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's
accounting policies. Changes in assumptions may have a significant impact on
the financial information in the year the assumptions changed. Management
believes that the underlying assumptions are appropriate.
The financial information does not comprise statutory accounts within the
meaning of section 435 of the Companies Act 2006. The financial information
together with the comparative information for the six months ended 30 June
2021 are unaudited with the audited information included for the 12 month
period ended 31 December 2021. The audited information received an audit
report which was unmodified and did not include a statement under section
498(2) or section 498(3) of the Companies Act 2006. The audit report for the
12 month period ended 31 December 2021 included an emphasis of matter relating
to going concern.
The financial information was approved by the Board of Directors on 28
September 2022 and authorised for issue on 28 September 2022.
The accounting policies used in the preparation of the financial information
for the six months ended 30 June 2022 are in accordance with the recognition
and measurement criteria of the International Financial Reporting Standards in
conformity with the requirements of the Companies Act 2006 and are consistent
with those which will be adopted in the annual financial statements for year
ending 31 December 2022.
These Interim Financial Statements have been prepared in accordance with the
accounting policies, methods of computation and presentation adopted in the
financial statements for the year ended 31 December 2021.
1.3 Going concern
The financial information has been prepared on a going concern basis. The
Group's business model has been enhanced following the three acquisitions in
2021 and early 2022. The Group's operations have incurred a loss in the
financial period whilst the Group's products and services continue to be
enhanced, developed and brought to market. The Directors forecast for the full
year 2022 show a trading loss with net cash outflows as the business continues
to develop and enhance its products and services and grows revenue. The Groups
operations in 2022 have been largely supported by cash inflows from customers
and funds from fundraises in 2021.
The Directors have considered the Group's forecast business and cash
requirements. On 23 September 2022 the company completed an equity raise of
circa £3.6M to provide liquidity to the group. The Directors have assessed
the group business model and the required levels of investment in its growth
plans. The liquidity raised is at a level to support the group strategy and
business model in the short term.
In July 2022, out of the total value of loan notes in issue of £1.4m, the
holders of £0.8m have agreed to extend their loan notes for three years until
June 2025 and further £0.8m of new or increased convertible loan notes have
been issued. Loans to the value of £325,000 were prepaid in July. The outcome
of the net issue and settlement of the convertible loan notes is therefore a
cash inflow of £0.475m. Of the total of £1,875,000 loan notes currently
outstanding, £225,000 is expected to be repaid in December 2022 and January
2023.
The Group had approximately £0.6m as cash and cash equivalents at 15 August
2022.
The Directors have concluded that the current position could give rise to a
material uncertainty arising from events or conditions that may cast
significant doubt on the entity's ability to continue as a going concern if
cash flows varied significantly from those expected to be generated by the
approved business model. However, based on the business model, the Directors
are confident that they can continue to adopt the going concern basis in
preparing the financial statements.
1.4 Basis of consolidation
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. Control exists when then the Group has:
− the power over the investee;
− exposure, or rights, to variable returns from its involvement with the
investee; and
− the ability to use its power over the investee to affect the amount of the
investor's returns.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation. Uniform accounting policies are applied by the Group entities
to ensure consistency.
1.5 Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method.
The cost of the acquisition is measured as the aggregate of the fair values,
at the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the Group in exchange for control of
the acquiree. Acquisition related costs are recognised in the income statement
as incurred.
Any contingent consideration to be transferred by the Group is recognised at
fair value at the acquisition date. Subsequent changes to the fair value of
the contingent consideration that is deemed to be an asset or liability is
recognised in the consolidated income statement. Contingent consideration that
is classified as equity is not remeasured, and its subsequent settlement is
accounted for within equity.
Goodwill arising on acquisition is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination
over the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to the cash generating unit ("CGU") that is
expected to benefit from the synergies of the combination. CGU to which
goodwill has been allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired. Any
impairment loss is recognised directly in the income statement.
1.6 Revenue
Revenue comprises the fair value of consideration received or receivable for
licence income and the rendering of services in the ordinary course of the
Group's activities. Revenue is shown net of value added tax and trade
discounts. Income is reported as follows:
(a) Licence income
Technology and product licensing revenue represents amounts earned for
licences granted under licensing agreements and recognized over time. Revenues
relating to up-front payments are recognised when the obligations related to
the revenues have been completed. Revenues for maintenance and support
services are recognised in the accounting periods in which the services are
rendered.
(b) Rendering of Services
Services relate to implementation and deployment fees for the technology and
products licensed to customers. Revenue is recognised in the accounting
periods in which the services are rendered.
(c) Consulting
Consulting revenue is recognised when the performance obligation is met,
primarily at a point of time. Contracts are structured to support the revenue
recognition process by stating what the objectives and deliverables are for
each part of the project, and the revenue attributable to each deliverable.
2. Revenue and segmental information
An analysis of the Group's revenue for each period for its continuing
operations, is as follows:
£ Unaudited Audited Unaudited
6 Months to
12 Months ended
6 Months to
30 June 2022
31 December 2021
30 June 2021
Revenue from the sale of goods/licences 179,679 189,252 91,998
Revenue from software development services - Byzgen Limited - 137,823 105,033
Revenue from Consulting 1,337,835 1,660,207 584,975
Other revenue 7,719 183,855 42,918
Total Revenue 1,525,234 2,171,137 824,923
The IFRS 8 Operating segments requires the Group to determine its operating
segments based on information which is provided internally. Based on the
internal reporting information and management structures within the Group, it
has been determined that there are two operating segments established in
accordance to differences between products and services - Software products
and Cybersecurity services.
These operating segments are based on the internal reports that are reviewed
and used by the Board of Directors (who are identified as the Chief Operating
Decision Makers ('CODM')) in assessing performance and in determining the
allocation of resources. There is no aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and
amortisation). The accounting policies adopted for internal reporting to the
CODM are consistent with those adopted in the financial statements. The
information regarding the Group's reportable segments is presented below:
Unaudited - six months ended Software products Cybersecurity services Eliminations Total
30 June 2022
£ £ £ £
Revenue 187,399 1,407,320 (69,485) 1,525,234
Cost of Sales (272,275) (1,221,432) - (1,493,707)
Gross Profit (84,876) 185,888 (69,485) 31,527
Administrative expenses (1,924,501) (293,009) 69,485 (2,148,026)
Other operating income - -
Financial income and expenses (67,134) (89,353) - (156,487)
Loss for the period before taxation (2,076,512) (196,474) - (2,272,986)
Tax credit / (expense) 393,810 - - 393,810
Loss for the Period (1,682,703) (196,474) - (1,879,176)
Total Comprehensive Loss (1,682,849) (196,474) - (1,879,322)
Segment assets 7,630,989 1,113,659 (2,480,434) 6,264,214
Segment liabilities 3,970,879 2,107,083 (1,762,242) 4,315,719
EBITDA (1,870,851) (111,135) - (1,981,985)
Audited - year ended Software products Cybersecurity services Eliminations Total
31 December 2021
£ £ £ £
Revenue 462,108 1,784,309 (75,280) 2,171,137
Cost of Sales (358,333) (1,598,845) - (1,957,178)
Gross Profit 103,775 185,464 (75,280) 213,959
Administrative expenses (2,703,009) (632,410) 75,280 (3,260,139)
Other operating income 358,727 - - 358,727
Financial income and expenses 323,725 (82,512) - 241,213
Loss for the year before taxation (1,916,782) (529,457) - (2,446,239)
Tax credit / (expense) 172,615 - - 172,615
Loss for the Year (1,744,167) (529,457) - (2,273,624)
Total Comprehensive Loss (1,757,387) (529,457) - (2,286,844)
Segment assets 8,178,282 1,029,509 (2,327,403) 6,880,388
Segment liabilities 2,924,439 1,762,053 (1,410,951) 3,275,541
EBITDA (2,168,462) (414,866) - (2,583,328)
Software products Cybersecurity services Eliminations Total
Unaudited - six months ended
30 June 2021
£ £ £ £
Revenue 267,237 619,114 (61,428) 824,923
Cost of Sales (175,313) (637,575) - (812,889)
Gross Profit 91,924 (18,461) (61,428) 12,035
Administrative expenses (1,328,964) (211,058) 61,428 (1,478,595)
Other operating income 27,288 - - 27,288
Financial income and expenses 73,608 (168,409) - (94,801)
Loss for the period before taxation (1,136,145) (397,929) - (1,534,073)
Tax credit / (expense) (2,427) - - (2,427)
Loss for the Period (1,138,571) (397,929) - (1,536,500)
Total Comprehensive Loss (1,148,259) (397,929) - (1,546,188)
Segment assets 3,359,772 263,770 (1,685,350) 1,938,193
Segment liabilities 2,513,168 1,156,162 (1,184,116) 2,485,214
EBITDA (1,089,636) (282,223) - (1,371,859)
3. Business combinations
On 14 March 2022 the Company announced its acquisition of the whole of the
share capital of Threat Status Limited (TSL), the threat intelligence company
and provider of Trillion, the cloud-based software as a service platform for
enterprise-level credential breach intelligence.
The Share Purchase Agreement establishes a total consideration of up to
£1.53m for TSL, structured as an initial payment of £500k cash, followed by
an additional deferred consideration of £1.03m payable in cash and shares on
the first and second anniversaries of the transaction.
The initial accounting for the business has recognised Intangible assets
acquired as a difference between the amount of purchase consideration with the
deferred element discounted at the rate of 14% per annum, and the book value
of net assets on acquisition. The provisional amounts will be reassessed
within twelve months of the date of the business combination.
4. Share Options
10,000 of share options were issued by Crossword Cybersecurity plc in the
period up to 30 June 2022, with total options issued amounted to 2,303,653.
The fair value of these share options is calculated by the Company using the
binomial model and Monte Carlo simulation model. The expense, where material,
is recognised on a straight-line basis over the period from the date of award
to the date of vesting, based on the Company's best estimate of the number of
shares that will eventually vest.
5. Loss per Share
Earnings per share is calculated by dividing the loss for the period
attributable to ordinary equity shareholders of the parent by the weighted
average number of ordinary shares outstanding during the year. During the
period the calculation was based on the loss for the period of £1,861,609
(full year 2021: £2,229,296) divided by the weighted average number of
ordinary shares of 75,060,369 (full year 2021: 64,491,462).
6. Subsequent events
Convertible loan notes to the value of £1.4m that were issued by the Company
in December 2019 and January 2020 are due to expire in December 2022 and
January 2023. Loan note holders of £0.8m have agreed to extend their loan
notes for three years until June 2025 and several loan notes holders are
increasing their loans by a total of £150,000. Additional loan notes of
£650,000 expiring in July 2025 have also been issued. Loans to the value of
£325,000 were prepaid in July. Accordingly, the value of convertible loan
notes is now £1,875,000, with £225,000 of that expected to be repaid in
December 2022 and January 2023.
On 23 September 2022 the Company announced that it had placed 16,761,407
ordinary shares in an oversubscribed fundraising of circa £3.6M.
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. END IR PPUBABUPPGMRRecent news on Crossword Cybersecurity
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