Final Results

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

				Notes	Year ended 31 December 2021 £	9 month period ended 31 December 2020 £
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 of the company					(1,454,412)	(1,201,334)
Earnings per share (basic and diluted) attributable to the equity holders (pence)				7	(0.2)	(0.3)

The above results relate entirely to continuing activities.

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

	Notes	As at 31 December 2021	As at 31 December 2020 (Restated)
		£	£
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
	Notes	Year ended 31 December 2021 £	Period ended 31 December 2020 £
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 Non-current		TBC
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 2021 £	31 December 2020 (Restated) £
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 (Restated) £	Total  £
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 and  narfindustries.com   or contact: 

Robert Mitchell	CYBA plc	Tel: [phone]
Peter Krens	Tennyson Securities	Tel: [phone]
Catherine Leftley / Charlotte Page / Isabel de Salis	St Brides Partners Ltd	[e-mail]

 

END

 

 

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