Final Results
30/06/2022 07:00
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RNS Number : 7414Q CYBA PLC 30 June 2022
CYBA plc / Index: LSE / Epic: CYBA / Sector: X
30 June 2022
CYBA plc ('CYBA' or the 'Company')
Final Results
CYBA plc (LSE: CYBA), the cybersecurity group specialising in high-end threat
intelligence and critical infrastructure security, is pleased to announce its
audited results for the year ended 31 December 2021.
CHAIRMAN'S STATEMENT
I am pleased to present the financial statements for the year to 31 December
2021 - a period in which CYBA plc successfully joined the Official List of the
London Stock Exchange.
CYBA was formed to acquire a controlling interest in companies disrupting the
cyber security sector. In pursuance of that strategy the Company entered into
a binding heads of terms in June 2021 to acquire Narf Industries LLC and Narf
Industries PR LLC (collectively "Narf"). As part of this process, we announced
in October 2021 that all required US regulatory approvals for the proposed
transaction of Narf were obtained from the Committee on Foreign Investment in
the United States "CFIUS". This was a major undertaking, given Narf's customer
base and the sensitivity of its activities and passing this hurdle paved the
way to completing the Acquisition on 14 March 2022 for a total consideration
of $25.6million.
Further disclosures are provided in Note 18 to the accounts regarding the post
year end completion, and a description of Narf can be found on the Company's
website. www.cybaplc.com.
Following the completion of the Narf transaction, the Company announced
earlier this month Steve Bassi, founder and CEO of Narf, would become the
Chief Executive Officer of the Company and also that CYBA would change its
name to Narf Industries plc.
Outlook
The reverse takeover of the Company by Narf marks the completion of its
mission as an investment company and the start of its future as an operating
company.
A full operational update of Narf Industries plc will be provided shortly.
Robert Mitchell
Chairman
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR TO 31 DECEMBER 2021
Year ended 31 December 2021 9 month period ended 31
£ December 2020
Notes £
Administrative expenses 4 (1,454,440) (1,201,272)
Operating loss (1,454,440) (1,201,272)
Interest receivable 28 -
Finance costs - (62)
Loss on ordinary activities before taxation (1,454,412) (1,201,334)
Tax on loss on ordinary activities 6 - -
Loss and total comprehensive income for the period attributable to the owners (1,454,412) (1,201,334)
of the company
Earnings per share (basic and diluted) attributable to the equity holders 7 (0.2) (0.3)
(pence)
The above results relate entirely to continuing activities.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
As at As at
31 December 2021 31 December 2020 (Restated)
Notes
£ £
CURRENT ASSETS
Trade and other receivables 8 1,441,202 165,037
Cash and cash equivalents 9 203,734 1,261,997
1,644,936 1,427,034
TOTAL ASSETS 1,644,936 1,427,034
CURRENT LIABILITIES
Trade and other payables 10 230,478 365,745
TOTAL LIABILITIES 230,478 365,745
NET ASSETS 1,414,458 1,061,289
EQUITY
Share capital 11 62,453 52,453
Share premium 11 5,406,629 3,609,048
Warrant reserve 12 24,137 24,137
Retained deficit (4,078,761) (2,624,349)
TOTAL EQUITY 1,414,458 1,061,289
STATEMENT OF CASHFLOWS
FOR THE YEAR TO 31 DECEMBER 2021
Year ended 31 December 2021 Period ended
£ 31 December 2020
£
Notes
Cash flow from operating activities
Loss for the period (1,454,412) (1,201,334)
Adjustments for:
Decrease in trade and other receivables 159,688 20,449
(Decrease)/increase in trade and other payables (135,267) 157,450
Share based payments - 24,750
Net cash outflow from operating activities (1,429,991) (998,685)
Cash flow from investing activities
Increase in prepaid consideration 8 (1,435,853) -
Net cash outflow from investing activities (1,435,853) -
Cashflow from financing activities
Proceeds on the issue of shares 1,999,295 1,920,558
Costs related to share issues (191,714) (212,883)
Net cash inflow from financing activities 1,807,851 1,707,705
Net (decrease)/increase in cash and cash equivalents (1,058,263) 709,020
Cash and cash equivalents at the beginning of the period 1,261,997 552,977
Cash and cash equivalents at the end of the period 203,734 1,261,997
There were no cashflows from investing activities during the period.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR TO 31 DECEMBER 2021
Share Capital Share Premium Warrant reserve Retained Deficit Total
£ £ £ £ £
Balance at 1 April 2020 30,978 1,757,068 24,137 (1,423,016) 920,288
Total comprehensive loss for the period - - - (1,201,334) (1,201,334)
Shares issued during the period 21,375 1,923,863 - - 1,945,338
Costs related to share issues - (212,883) - - (212,883)
Balance at 31 December 2020 52,453 3,468,048 24,137 (2,624,349) 920,289
Prior period adjustment - 141,000 - - 141,000
Balance at 31 December 2020 (adjusted) 52,453 3,609,048 24,137 (2,624,349) 1,061,289
Total comprehensive loss for the period - - - (1,454,412) (1,454,412)
Shares issued during the period 10,000 1,990,000 2,000,000
Costs related to share issues - (192,419) - - (192,419)
Balance at 31 December 2021 62,453 5,406,629 24,137 (4,078,761) 1,414,458
Definitions:
Share capital - the ordinary issued share capital of the Company.
Share premium - consideration less nominal value of issued shares and costs
directly attributable to the issue of new shares.
Warrant reserve - the value of equity settled share-based payments provided to
employees, including key management personnel, and third parties for services
provided.
Retained deficit - Cumulative net gains and losses recognised in the Statement
of Comprehensive Income
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR TO 31 DECEMBER 2021
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
UK-adopted international accounting standards.
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
£1,429,991 and at 31 December 2021 had cash and cash equivalents balance of
£203,734. Subsequent to the year end the Company raised £6 million in a
placing of which over £3 million was for the working capital needs of the
Enlarged Group. Accordingly, the Directors are confident that costs will be
managed such that they can be maintained within the working capital raised and
the Company has already announced an agreement with SRI international which is
a major stepping stone towards Narf Industries and the Enlarged Group becoming
profitable. The Directors have considered the management forecasts, post
period-end fund raises, current working capital levels and utilisation of
funds until Narf Industries becomes cash generative, based on these factors
the Directors consider that the entity is a going concern.
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 do not consider there to be any critical
accounting estimates or judgement made in the preparation of these financial
statements.
2.13 Standards, amendments and interpretations to existing
standards that are not yet effective
New standards, amendments to standards and interpretations:
The Company has adopted all of the new and revised Standards and
Interpretations that are relevant to their operations and effective for
accounting periods beginning 1 January 2021. The Company has not adopted any
standards or interpretations in advance of the required implementation dates.
The adoption of the Standards and Interpretations which became effective this
year did not have a material impact on these Financial Statements.
Standards not yet applied
At the date of authorisation of these financial statements, the following
relevant Standards and Interpretations, which have not been applied in these
financial statements, were in issue but not yet effective (and in some cases
have not yet been adopted by the UK Endorsements Board):
Standard Impact on initial application Effective date
IAS 1 Amendments - Presentation and Classification of Liabilities as Current or TBC
Non-current
IAS 16 Amendments - Property, Plant and Equipment 1 January 2022
IAS 37 Provisions, Contingent Liabilities and Contingent Assets 1 January 2022
IAS 8 Amendments - Definition of Accounting Estimates 1 January 2023
IAS 1 Amendments - Disclosure of Accounting Policies 1 January 2023
IFRS 3 Amendments - Business Combinations - Conceptual Framework 1 January 2022
IFRS 17 Insurance contracts 31 December 2023
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.
2.15 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:
31 December 2021 31 December 2020
£
£
Auditor's remuneration
- audit of the Company 18,000 15,000
- non-audit services
corporate finance services 35,000 12,500
Directors' remuneration 328,888 205,900
Legal, professional and consultancy fees 279,354 355,115
Other expenses 783,698 612,819
5. DIRECTORS AND STAFF COSTS
During the year the only staff of the Company were the Directors and as such
the Directors are the key management personnel. Management remuneration, other
benefits supplied and social security costs to the Directors during the period
was as follows:
31 December 2021 31 December 2020
£
£
Directors' fees 328,888 205,900
328,888 205,900
The average number of staff during the period, including Directors was 4.
The remuneration and associated social security costs per Director for the
year ended 31 December 2021 was all short term in nature and are as stated in
the remuneration report on page 13.
6. TAXATION
31 December 2021 31 December 2020
£
£
The charge / credit for the period is made up as follows:
Corporation taxation on the results for the period - -
Deferred tax - -
Taxation charge / credit for the period - -
A reconciliation of the tax charge / credit appearing in the income statement
to the tax that would result from applying the standard rate of tax to the
results for the period is:
Loss per accounts (1,454,412) (1,201,334)
Tax credit at the standard rate of corporation tax in the UK of 19% (276,338) (228,253)
Impact of costs disallowed for tax purposes 20,874 104,925
Impact of unrelieved tax losses carried forward 255,464 123,328
- -
Estimated tax losses of £2,850,000 (31 December 2020: £1,505,000 ) 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.
31 December 2021 31 December
£ 2020
£
Loss from continuing operations attributable to equity holders of the company (1,454,412) (1,201,334)
Weighted average number of ordinary shares in issue 588,086,644 374,933,182
Basic and fully diluted loss per share from continuing operations (pence) (0.2) (0.3)
The calculation of the earnings per share is based on the loss for the
financial period after taxation of £1,454,412 and on the weighted average of
588,086,644 ordinary shares in issue during the period.
The warrants outstanding at 31 December 2021 are considered to be non-dilutive
as a loss was made for the year. The diluted loss per share is therefore equal
to the non-diluted loss per share
8. TRADE AND OTHER RECEIVABLES
31 December 31 December 2020 (Restated)
£
2021
£
Prepaid consideration 1,435,853 -
Amount unpaid on share capital - 141,000
Prepayments and other receivables 5,349 24,037
1,441,202 161,037
The prepaid consideration represents two non-refundable advances of US$1
million to each of Narf Industries LLC and Narf Industries PR LLC in
accordance with heads of terms agreed between the Company and Narf whereby it
was agreed, subject to legal diligence, that the Company would agree to
acquire the entire equity capital of Narf. As detailed in Note 18 the
acquisition of Narf was completed post year end. As such, the balance has been
held at cost and been classified as current.
The Directors consider that the carrying value amount of trade and other
receivables approximates to their fair value.
9. CASH AND CASH EQUIVALENTS
31 December 2021 31 December 2020
£
£
Cash at bank 203,734 1,261,997
203,734 1,261,997
Cash at bank comprises balances held by the Company in current bank accounts,
instant access deposit account and electronic wallets. The carrying value of
these approximates to their fair value. The majority of cash is held in a bank
with a BBB credit rating.
10. TRADE AND OTHER PAYABLES
31 December 2021 31 December 2020
£
£
Accrued liabilities 148,888 279,745
Trade and other payables 81,590 86,000
230,478 365,745
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
Number of shares on issue Share capital £ Share premium Total £
(Restated) £
Balance as at 1 April 2020 309,775,000 30,978 1,756,068 1,788,046
Shares issued during the period to 31 December 2020 (net of issue costs) 214,750,000 21,475 1,852,980 1,873,455
Balance as at 31 December 2020 524,525,000 52,453 3,609,048 3,661,501
Shares issued during the year to 31 December 2021 (net of issue costs) 100,000,000 10,000 1,797,581 1,807,581
Balance as at 31 December 2021 624,525,000 62,453 5,406,629 5,469,082
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 2021 the Company's issued and outstanding capital
structure comprised 624,525,000 shares and there were no other securities in
issue and outstanding.
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.
From 1 January 2021 to 31 December 2021 the Company issued 100,000,000
ordinary shares of £0.0001 each at a price of £0.02 per placing share.
At 31 December 2021 and 31 December 2020, there were warrants over 12,000,000
unissued ordinary shares exercisable as detailed in Note 12 below.
12. WARRANT RESERVE
Details of the warrants outstanding at 31 December 2021 and 31 December 2020
are as follows:
Issued Exercisable from Expiry date Number outstanding Exercise price
20 October 2019 Anytime until 8 March 2022 12,000,000 £0.01
31 December 2021 31 December 2020
£
£
At beginning of period 24,137 24,137
Fair value of warrants granted and vested during the period - -
At end of period 24,137 24,137
No warrants were issued during the year or prior period and no warrants have
been exercised to date. All warrants were either exercised or lapsed after the
year end.
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*
* No share-based payment has been recognised in respect of these warrants
during the current year as the full costs of the warrants was recognised in
prior periods.
The warrants outstanding at the year-end have a weighted average remaining
contractual life of 0.25 years. The exercise prices of the warrants are £0.01
per share.
13. CAPITAL COMMITMENTS
There were no capital commitments at 31 December 2021 (2020: £nil).
14. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 December 2021 (2020; £nil).
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:
31 December 2021 31 December
£ 2020 (Restated)
£
Current Assets at amortised cost:
Unpaid amount on share capital - 141,000
Cash and cash equivalents 203,734 1,261,997
203,734 1,402,997
Financial liabilities by category
The categories of financial liabilities are as follows:
31 December 2021 31 December 2020
£
£
Current Liabilities at amortised cost:
Trade and other payables 230,478 365,745
Categorised as financial liabilities measured at amortised cost 230,478 365,745
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:
31 December 2021 31 December 2020
£
£
Trade and other receivables - -
Cash and cash equivalents 203,734 1,261,997
Interest rate risk
None of the Company's assets or liabilities are subject to any material
interest rate risk since only £100,000 earns interest at a negligible
interest rate and none are subject to interest charges. All deposits are
placed with main clearing banks or held in cash wallets to facilitate
non-sterling payments or expense payments. The deposits are placed in current
accounts or instant access deposit accounts to provide flexibility and access
to the funds.
The nature of the Company's activities and the basis of funding are such that
the Company seeks to maintain liquid resources to meet its expenses for at
least twelve months although the delay in issuing a prospectus ahead of
readmission has meant that at the year-end date the liquid resources were less
then normal. Subsequent to the year end the prospectus was issued and shares
readmitted to trading such that cash resources are now more than sufficient to
meet anticipated outgoings for a year. The Company will utilise these
resources to meet the cost of operations of the Enlarged Group.
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
£203,734. As the prepaid consideration is non-refundable it is not subject to
credit risk. Credit risk is managed by depositing surplus funds with financial
institutions with a credit rating equivalent to, or above, the main UK
clearing banks and by keeping amounts in electronic wallets to the minimum
required for day-to-day operations. 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.
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 2021 consisted of
equity attributable to the equity holders of the Company, totalling
£1,414,458.
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 and new share issues. The
Company has no plans to take on debt capital.
17. RELATED PARTY TRANSACTIONS
The compensation payable to Key Management personnel, who comprise the
Non-executive Directors, comprised £328,888 (2020: £205,900) paid by the
Company in respect of services to the Company. Full details of the
compensation for each Director are provided in the Directors' Remuneration
Report. At year-end, an amount of £98,888 (31 December 2020: £38,804) was
due to the Directors in respect of Directors remuneration.
Rory Heier is the sole Director of Harpers Capital Limited, a company that
received £59,000 (2020: £76,500) during the year for the provision of
consulting, marketing and business development services. At the year end, an
amount of £Nil (2020: £Nil) was due to Harpers Capital Limited.
Steve Bassi is a Member of Narf Industries LLC and Narf Industries PR LLC,
which each received £767,916 during the year as an advance payment in
connection with a heads of terms between Narf Industries LLC, Narf Industries
PER LLC and Cyba plc. At the year end, an amount of £1,435,853 of prepaid
consideration is included in the Statement of Financial Position (see Note 8).
17. EVENTS SUBSEQUENT TO YEAR END
On 16 February 2022, the Company created and issued to Hadron Master Series II
Warrants over 13,000,000 ordinary shares. The Warrants vested immediately with
an exercise price of £0.02p, and expire on 15 February 2023.
On 14 March 2022 at a general meeting the Company's shareholders approved the
acquisition of Narf Industries LLC and Narf Industries PR LLC (collectively
"Narf") for a combined consideration of US$25.6 million of which US$2 million
was settled from the prepaid consideration referred to in Note 8, US$4.17
million in cash from the proceeds of the placing and the remaining US$19.43
million from the allotment of 699.6 million Ordinary shares to the former
members of Narf at an effective price of £0.02. Following these approvals
and the issue of a prospectus the Enlarged Group was readmitted to trading on
the London Stock Exchange and the Company issued shares for gross cash
proceeds of £6 million of which £3 million is to meet working capital needs
for the Enlarged Group. The reasons for the acquisition are set out in detail
on pages 34 and 35 of the Company's prospectus dated 17 February 2022 and are
summarised by Narf offering the Company an exposure to an exciting specialist
within the cyber security sector.
The provisional fair values of the identifiable assets and liabilities of Narf
at the date of acquisition were as follows:
Fair value on acquisition date
£
Cash and cash equivalents 235,798
Trade receivables 382,964
Other receivables 177,305
Property and equipment 103,232
Total assets 899,299
Trade payables 13,541
Amounts due to former members 203,427
Amounts due to the Company 191,823
Other creditors 413,026
Total liabilities 821,817
Total identifiable net assets at fair value 77,482
Goodwill arising on acquisition 19,567,958
Purchase consideration transferred 19,645,440
All receivables and payables are due within one year.
The estimated value of financial assets acquired at the acquisition date is
£899,299.
The goodwill of £19,567,958 comprises the expected value of potential future
cybersecurity contracts that the Company expects Narf to win based on its due
diligence. A purchase price allocation exercise has not yet been undertaken
and therefore the fair values are subject to change.
The costs of the acquisition amount to approximately £1,000,000 and have
largely been accounted for in the statement of comprehensive income for the
current year.
On 16 March 2022, the Company signed an agreement with SRI International
("SRI") regarding the licensing of its intellectual property and patents
relating to the Threat Intelligence for Grid Recovery ("TIGR").
On 16 May 2022, the Company issued 59,856,100 ordinary shares at a price of
£0.02p each to its partner SRI as part of the aforementioned agreement,
signed on 16 March 2022.
18. PRIOR PERIOD ADJUSTMENT
Since the approval of the prior period financial statements the Directors have
identified an error relating to the period ended 31 December 2020.
It was noted that unpaid share capital in respect of shares issued in the
period ended 31 December 2020 was not accounted for as at 31 December 2020.
This unpaid share capital amounted to £141,000 and was recovered in the year
ended 31 December 2021.
This error resulted in both trade and other receivables and share premium
being understated by £141,000. The prior period trade and other receivables
and share premium have both been adjusted to reflect this adjustment. This
prior period adjustment had no impact on the loss for the period or net assets
and does not impact the prior period opening balances.
19. CONTROL
Although the Narf Concert Party own 41.96% following the RTO post year end, in
the opinion of the Directors there is no single ultimate controlling party.
**ENDS**
For further information on the Group please visit www.cybaplc.com
(http://www.cybaplc.com/) and narfindustries.com
(http://www.narfindustries.com/) or contact:
Robert Mitchell CYBA plc Tel: +44 (0) 20 3468 2212
Peter Krens Tennyson Securities Tel: +44 (0)207 186 9030
Catherine Leftley / Charlotte Page / Isabel de Salis St Brides Partners Ltd cyba@stbridespartners.co.uk
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. END FR URUSRUAUNORR