TIDMCCS
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
(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 GBP1.53m 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 GBP3.6m fund raise. The outlook for 2022 remains at
circa 75% revenue growth to GBP4m and the Company is confident of
delivering further revenue growth of 50% in 2023, taking revenue to
GBP6m.
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 GBP1.97m
o Successful acquisition and integration of 3 companies with
strong underlying SaaS and services recurring revenue
o Growth in Consulting vCISO recurring revenue to GBP1m
-- Following the period and as announced on 23 September 2022,
the Company completed an oversubscribed GBP3.6m 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 GBP4m 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
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/
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 GBP0.39 million (excluding discontinued operations) in
H1 2019 to GBP1.53 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 " 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 .
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
see a rise in attacks from social engineering and ransomware as
nation-states and cybercriminals grow more sophisticated. As a
result, Gartner 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 GBP10bn, 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
GBP4.2bn 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
GBP1,525,234 (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 GBP3.6 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 GBP4 million for the year
as a whole. Additionally, the Board is confident of delivering 50%
revenue growth in FY 2023 taking revenues to GBP6 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 that it expected supply chain attacks to quadruple
over the following 12 months. Simultaneously, supply chains are
going through a period of 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
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 (EUR25,000) 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 (EUR45,250), 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 ), 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 GBP605,000 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 Mih ilescu, 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 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 Unaudited Audited Unaudited
Statement 6 Months 12 Months 6 Months
of to 30 June to 31 December to 30 June
Comprehensive Income 2022 2021 2021
GBP GBP GBP
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
Condensed Consolidated Statement
of
Financial Position as at 30 Unaudited Audited Unaudited
June 2022 Group Group Group
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
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
Non-
Share Equity Retained Translation controlling
GBP Capital Share Premium Reserve Earnings Reserve interests Total
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 Unaudited Audited Unaudited
of Cashflows 6 Months 12 Months 6 Months
to 30 June to 31 December to 30 June
2022 2021 2021
Cashflows From Operating Activities GBP GBP GBP
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 GBP3.6M 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
GBP1.4m, the holders of GBP0.8m have agreed to extend their loan
notes for three years until June 2025 and further GBP0.8m of new or
increased convertible loan notes have been issued. Loans to the
value of GBP325,000 were prepaid in July. The outcome of the net
issue and settlement of the convertible loan notes is therefore a
cash inflow of GBP0.475m. Of the total of GBP1,875,000 loan notes
currently outstanding, GBP225,000 is expected to be repaid in
December 2022 and January 2023.
The Group had approximately GBP0.6m 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:
GBP Unaudited Audited Unaudited
6 Months 12 Months 6 Months
to ended to
30 June 31 December 30 June
2022 2021 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 Software Cybersecurity Eliminations Total
months ended products services
30 June 2022
GBP GBP GBP GBP
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 Cybersecurity Eliminations Total
31 December 2021 products services
GBP GBP GBP GBP
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 Cybersecurity Eliminations Total
Unaudited - six products services
months ended
30 June 2021
GBP GBP GBP GBP
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 GBP1.53m for TSL, structured as an initial payment of
GBP500k cash, followed by an additional deferred consideration of
GBP1.03m 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 GBP1,861,609 (full year 2021: GBP2,229,296)
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 GBP1.4m 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 GBP0.8m
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 GBP150,000. Additional loan notes of GBP650,000 expiring
in July 2025 have also been issued. Loans to the value of
GBP325,000 were prepaid in July. Accordingly, the value of
convertible loan notes is now GBP1,875,000, with GBP225,000 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 GBP3.6M.
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END
IR PPUBABUPPGMR
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