TIDMCCS
RNS Number : 9866M
Crossword Cybersecurity PLC
27 September 2021
Crossword Cybersecurity plc
Interim Results
27 September 2021 - London, UK - Crossword Cybersecurity Plc
(AIM:CCS, "Crossword", the "Company" or the "Group"), the
technology commercialisation company focused solely on cyber
security and risk, today announces its unaudited interim results
for the 6 months ended 30 June 2021.
Financial Highlights:
-- Total revenue increased by 22% to GBP824,923.
-- Product and Consulting revenue increased by 30% over the same period in the prior year.
-- Consulting recurring revenue increased by more than 85% over
the same period in the prior year.
-- Total comprehensive loss for the period was GBP1,546,188, an
increase of GBP152,995 over the same period in the prior year. The
increase is due to additional overheads, particularly for legal and
professional fees, as a result of corporate activities such as fund
raise, acquisition, and share split, during the period.
-- Cash and Cash Equivalents at 30 June 2021 were GBP682,407.
Operational Highlights:
-- Launched Rizikon to the 10,000 Chartered Institute of Information Security members.
-- Continued the roll out of Rizikon with our membership body
program, to increase Rizikon market penetration.
-- Tenfold increase in number of Rizikon users, c300, assessing nearly 4,000 suppliers.
-- Commenced work with University of Glasgow on Privacy Governance Software.
-- Launched the InnovateUK funded project to investigate
Manufacturing Supply Chain Risk with Liverpool John Moores
University.
-- Crossword's cyber security consulting division continued to
grow in a range of high-profile sectors and to drive recurring
revenue.
-- Crossword completed GBP1.6m equity fundraise through a
placing and subscription of Crossword Ordinary Shares at a price of
260 pence per share.
-- Completed a 10:1 share split to support share liquidity
giving the Company a post share split price of 42 pence.
-- Tara Cemlyn-Jones and Robert Coles joined the board of the
Company as non-executive directors.
-- Acquired Verifiable Credentials Limited, adding 'Identiproof' to the product portfolio.
-- Signed HOTs with Al-Rawahy Holdings to partner with Crossword in the Gulf region.
Outlook:
-- Continuing to drive growth and meet market expectations of 50% revenue growth in 2021.
-- Looking ahead the Board is confident of delivering strong
revenue growth in FY 2022 taking revenues to GBP4m.
-- In July 2021, undertook an oversubscribed fundraising of
approximately GBP5.0 million at a price of 30 pence per share.
-- In August 2021, Crossword acquired Stega UK Limited ("Stega")
, the threat intelligence and monitoring company.
-- Commenced a pilot of Rizikon with a global Aerospace, Defence
and Security company that has over 6,000 suppliers.
-- Target over 1,000 organisations using Rizikon to assess over 10,000 suppliers by end 2022.
-- Launch Crossword in Oman in H2 2021 in partnership with Al-Rawahy Holdings.
-- Taking Identiproof to market as well as continuing product development.
- Ends -
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (withdrawal) Act 2018. 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) 20 3953 8460
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 / Lukas Girzadas
Hybridan LLP (Broker) - Tel: +44 (0)203 764 2341
Claire Louise Noyce
For media enquiries contact:
Duncan Gurney, GingerPR
duncan@gingerpr.co.uk - Tel: +44 (0)1932 485 300
About Crossword Cybersecurity plc
Crossword Cybersecurity plc focuses on the development and
commercialisation of university research-based cyber security and
risk management related software and cyber security consulting. The
Group's specialist cyber security product development and software
engineering teams work with its university partners to develop the
research concept into a fully-fledged commercial product that it
will then take to market. The Group's aim is to build up a
portfolio of revenue generating, intellectual property based, cyber
security products. Rizikon Assurance, Crossword's leading product,
is a SaaS platform that enables medium to large companies to assess
and manage all risks from their suppliers. Nixer CyberML, another
Crossword product, is a new tool for businesses that want to solve
advanced security and cybercrime problems, such as detecting and
dealing with compromised accounts, fraud, and in-application denial
of service attacks. Identiproof, Crossword's most recent product,
is the World Wide Web Consortium (W3C) verifiable credentials
compatible middleware and wallet technology. Crossword's team of
expert cyber security consultants leverages years of experience in
national security, defence and commercial cyber intelligence and
operations to provide bespoke advice tailored to its clients'
business needs, including threat monitoring.
Chief Executive Officer's review
Crossword Cybersecurity plc ("Crossword", "the Company" or "the
Group") got off to a strong start in the first half of 2021 as the
economy and society more broadly started to bounce back after the
challenges of 2020.
In the period to 30 June 2021, Crossword continued to grow both
product and consulting revenue. As well as making one important
acquisition during the period and one shortly after, Crossword
progressed plans to expand internationally and strengthened its
balance sheet to ensure that the Group is properly funded to
support future growth. In the period under review, Group revenue
grew by 22% compared with H1 2020, with product and consulting
revenue increasing by 30% compared with the same period last
year.
Both throughout the pandemic and as the economy recovers, cyber
security challenges continue to drive demand for Crossword's
products. Over recent years, the cost of breaches has consistently
risen in parallel with the growth of cyber security incidents,
which has in turn driven demand for Crossword's products. Whilst
discretionary expenditure has been cut back by many organisations,
there are still aspects of cyber security that are not considered
discretionary, and investment continues in these areas.
The UK Government highlighted in the Department for Digital,
Culture, Media and Sport's, Cyber Security Breaches Survey, the
increasing importance of cyber security to organisations, reporting
that 77% of businesses say cyber security is a high priority for
their senior management boards. 39% of businesses that took part in
the survey, completed in March 2021, identify breaches or attacks,
and of these, one in five (21%) have experienced a loss of money,
material assets or data. The level of risk, however, has possibly
increased as a result of COVID-19 as businesses have found it
harder to administer cyber security measures during the pandemic.
The recent SolarWinds attack where hackers gained sprawling remote
access to monitor business and government computer networks, cost
at least $18m in the first quarter of 2021. The Microsoft warning
to Office365 customers of a widespread credential phishing campaign
targeting passwords using Google reCAPTCHA pages, highlights the
threat and sophistication of such cybercrime realities.
Rizikon Assurance, our Software as a Service (SaaS) supplier
risk assessment platform based on a recurring revenue model,
addresses supply chain risks which is a rapidly growing challenge
for organisations across all sectors. The European Union Agency for
Cyber Security concluded in a recent report that supply chain cyber
security attacks are expected to quadruple in 2021 compared to last
year. The report analysed 24 supply chain attacks and found that
'attackers are exploring new potential highways to infiltrate
organisations by targeting their suppliers'. Attackers focused on
suppliers' software in about 66% of the reported incidents and for
about 58% of the incidents, the assets targeted were predominantly
customer data and intellectual property. Rizikon helps
organisations mitigate these supply chain risks.
Following the launch of Rizikon Pro in the second half of 2020,
Crossword entered into a number of partnership agreements to roll
out Rizikon at scale. This has been extremely successful with the
number of organisations using Rizikon growing tenfold to over 300.
These businesses are currently using the platform to assess nearly
4,000 suppliers between them. Partnerships with membership bodies,
such as the Chartered Institute of Information Security with 10,000
members, are yielding positive results and ensuring that Rizikon is
one of the leading platforms in this rapidly growing area.
Crossword continues to collaborate with leading security
reseller and managed security services provider Satisnet Limited ,
as well as with Leonardo MW, the global aerospace, defence and
security contractor and NCC Group, the leading information
assurance group to provide Rizikon to their clients. Through our
partners we have added new Rizikon clients both within and outside
the UK, including as far afield as Australia.
In the first half of the year, we completed our first
acquisition, Verifiable Credentials Ltd, adding its product
'Identiproof' to Crossword's product portfolio. Verifiable
Credentials Ltd was founded by Professor David Chadwick, a global
authority in the domain of digital credentials and certificates and
the co-author of the W3C's international veritable credential
standard. Identiproof increases Crossword's cybersecurity portfolio
to three products alongside Rizikon and Nixer. Nixer is Crossword's
machine learning based product designed to defend against cyber
attack tools such as credential stuffing. Our aim is to assemble a
portfolio of five cyber security products by the end of 2022.
Crossword commenced work with the University of Glasgow on a new
software product aimed at Privacy Governance, based on academic
research at that university. Crossword also commenced a major
project with Liverpool John Moores University, funded by
InnovateUK, to investigate manufacturing supply chain risk. This
project is being very well received by industry as it transforms
the understanding of risk in complex cross-sector supply chains and
has the potential to become a significant area of development in
2022.
Crossword's Consulting division's strong franchise in the
insurance, legal and financial services sectors continues to
deliver excellent results. Its recurring revenue vCISO service
(virtual Chief Information Security Officer) offering has driven
Consulting's overall recurring revenue up by more than 85% over the
same period last year. As well as a developing a range of high
growth clients, the Consulting team is building long term, trusted
relationships with a number of larger, Fortune 500 and FTSE 250
companies.
As part of its plans to expand outside of the UK, Crossword
signed Heads of Terms with a major Oman based industrial group,
Al-Rawahy Holdings, to partner with Crossword in Oman and the wider
Gulf region.
On the corporate front, in February Crossword completed a
GBP1.6m equity fundraise through a placing and subscription of
Crossword Ordinary Shares at a price of 260 pence per share and
carried out a 10:1 share split to support liquidity at a post split
price of 42 pence.
With two directors, Professor David Stupples and Gordon Matthew
stepping down from the Board, we were delighted to welcome Tara
Cemlyn-Jones and Dr Robert Coles to the Board. Tara is an
experienced investment banker, M&A specialist and corporate
strategist and Robert is an industry leading CISO, who has been
involved with Crossword for several years, chairing its fast
growing Consulting business as well as its Advisory Board.
Following his appointment to Crossword's Board, Dr Coles stepped
down from his role as Chair of the Advisory Board. Alison Dyer,
Chief Information Security Officer at URENCO and former Director at
GlaxoSmithKline (GSK), has since joined the Crossword Advisory
Board as Chair.
Following the period, in July 2021, Crossword completed an
oversubscribed fundraising of GBP5 million at a price of 30 pence
per share, a price 15% higher than the GBP1.6m fundraise executed
in February. This latest funding round puts the Group in a strong
position to deliver on its future organic growth plans.
In August, Crossword completed its second acquisition of the
year, acquiring Stega UK Limited, the threat intelligence and
monitoring company with a specialist technical team, a unique
monitoring and managed services platform and a range of financial
services clients. Along with integrating Stega, the Group is busy
taking its new product, Identiproof, to market.
Having successfully acquired and integrated two complementary
product and services cyber security companies, Crossword will be
actively looking for opportunities to execute more deals of this
type in the future. In the meantime, the Group is working to
deliver significant expansion of the Rizikon user base, with a
target of over 1,000 organisations using Rizikon to assess over
10,000 suppliers by the end of 2022. Rizikon is currently being
trialled by a global Aerospace, Defence and Security company that
itself has over 6,000 suppliers. Before the end of 2021, Crossword
also expects to launch Rizikon and the full range of the Group's
products and services in Oman with its partner, Al-Rawahy Holdings
LLC, with a view to rolling out both in Oman and the wider Gulf
region.
Outlook
Cash at 31 August was GBP4.1 million. With the team we have in
place and a strengthened balance sheet, Crossword will continue to
drive growth and expects to meet market expectations of 50% revenue
growth in 2021. Looking towards 2022, the Board is confident of
delivering further growth, taking revenue to GBP4m for that
year.
Condensed Consolidated Statement Unaudited Audited 12 Unaudited
of 6 Months Months to 6 Months
Comprehensive Income to 30 June 31 December to 30 June
2021 2020 2020
GBP GBP GBP
Revenue 824,923 1,627,611 674,008
Cost of Sales (812,889) (1,582,194) (791,237)
----------------------- ----------------------
Gross Profit (Loss) 12,035 45,416 (117,229)
Other operating income-research - 209,647 -
& development tax credits
Grant income 27,288 - -
Administrative expenses (1,478,595) (2,320,675) (1,174,628)
Finance income-bank interest
receivable 57 (3,205) 1,079
Finance costs-other interest
payable and foreign exchange (94,858) (204,679) (106,269)
Loss for the year/period before
taxation (1,534,073) (2,273,497) (1,397,047)
Tax expense (2,427) (4,840) (2,410)
Loss for the Year / Period (1,536,500) (2,278,336) (1,399,457)
Other Comprehensive Income
Items that may be reclassified
to profit or loss:
Foreign Exchange Translation
Gain (Loss) (9,687) 9,595 6,264
Total Comprehensive Loss (1,546,188) (2,268,741) (1,393,193)
======================= ============= ======================
Loss for the period attributable
to:
Owners of the parent (1,542,060) (2,249,707) (1,374,575)
Non-controlling interests 5,560 (28,629) (24,882)
Total Loss for the Year / Period (1,536,500) (2,278,336) (1,399,457)
----------------------- ------------- ----------------------
Total comprehensive loss for
the period attributable to:
Owners of the parent (1,551,748) (2,240,112) (1,368,311)
Non-controlling interests 5,560 (28,629) (24,882)
Total Comprehensive Loss (1,546,188) (2,268,741) (1,393,193)
----------------------- ------------- ----------------------
Earnings Per Share (EPS)* (0.03) (0.05) (0.03)
All results are derived from
continuing operations
*EPS for prior periods restated
following sub-division of shares
Condensed Consolidated Statement
of
Financial Position as at Unaudited Audited Unaudited
30 June 2021 Group Group Group
30 June 31 December 30 June
2021 2020 2020
GBP GBP GBP
Non-Current Assets
Intangible assets 594,801 - -
Tangible assets 3,882 6,699 11,775
Right to Use Asset 3,264 63,365 133,688
Investments in other unlisted
investment 31 31 31
Total non-current assets 601,978 70,095 145,494
------------------- -------------------- -------------------
Current Assets
Trade and other receivables 653,808 497,912 450,170
Cash and cash equivalents 682,407 958,341 1,550,317
Total current assets 1,336,215 1,456,253 2,000,487
------------------- -------------------- -------------------
TOTAL ASSETS 1,938,193 1,526,348 2,145,981
=================== ==================== ===================
EQUITY
Share Capital 290,213 256,605 256,605
Share premium account 10,195,388 8,518,391 8,518,391
Other reserves 208,191 181,618 155,434
Retained earnings (11,140,116) (9,598,055) (8,722,924)
Translation of foreign
operations (11,459) (1,772) (5,103)
------------------- -------------------- -------------------
Attributable to owners
of the parent (457,783) (643,213) 202,402
Non-controlling interests (89,239) (94,799) (91,051)
Total E quity (547,021) (738,012) 111,352
------------------- -------------------- -------------------
LIABILITIES
Current Liabilities
Trade and other payables 1,014,462 929,038 713,350
Total C urrent L iabilities 1,014,462 929,038 713,350
------------------- -------------------- -------------------
Long Term Liabilities
Loan 1,351,471 1,335,322 1,321,279
Other payables 119,281 - -
Total L ong T erm L iabilities 1,470,752 1,335,322 1,321,279
------------------- -------------------- -------------------
Total Liabilities 2,485,214 2,264,360 2,034,629
------------------- -------------------- -------------------
Total Equity & Liabilities 1,938,193 1,526,348 2,145,981
=================== ==================== ===================
Condensed Consolidated Statement
of
Changes in Equity
Unaudited Audited Unaudited
As At 6 Months 12 Months 6 Months
to 30 June to 31 December to 30 June
2021 2020 2020
Share Capital GBP GBP GBP
At 1st January 256,605 234,061 234,061
Issue of shares 33,609 22,543 22,543
At Period/Year End 290,213 256,605 256,605
------------------ -------------------- -------------------
Share Premium
At 1st January 8,518,391 7,515,744 7,515,744
Issue of shares 1,676,997 1,002,647 1,002,647
At Period/Year End 10,195,388 8,518,391 8,518,391
------------------ -------------------- -------------------
Equity Reserve
At 1st January 181,618 128,826 128,826
Employee share schemes -
value of employee services 26,573 52,792 26,608
At Period/Year End 208,191 181,618 155,434
------------------ -------------------- -------------------
Retained Earnings
At 1st January (9,598,055) (7,428,818) (7,428,818)
Loss for the period (1,542,060) (2,249,707) (1,374,575)
Gain from issue of shares
to non-controlling interest - 14,300 14,300
Transfer on issue of shares
to non-controlling interest - 66,169 66,169
At Period/Year End (11,140,116) (9,598,055) (8,722,924)
------------------ -------------------- -------------------
Translation of Foreign Operations
At 1st January (1,772) (11,367) (11,367)
Translation of Foreign Operations (9,687) 9,595 6,264
At Period/Year End (11,459) (1,772) (5,103)
------------------ -------------------- -------------------
Non-controlling interests
At 1st January (94,799) - -
Transfer on acquisition by
non-controlling interests - (66,169) (66,169)
Total Comprehensive loss
for the period 5,560 (28,629) (24,882)
At Period/Year End (89,239) (94,799) (91,051)
------------------ -------------------- -------------------
Total
At 1st January (738,012) 438,447 438,447
Total Comprehensive loss
for the Period (1,546,188) (2,268,741) (1,393,193)
Issue of shares 1,710,606 1,025,190 1,025,190
Share based Payments 26,573 52,792 26,608
Gain from issue of shares
to non-controlling interest - 14,300 14,300
At Period/Year End (547,021) (738,012) 111,352
------------------ -------------------- ===================
Condensed Consolidated Statement Unaudited Audited Unaudited
of Cashflows 6 Months 12 Months 6 Months
to 30 June to 31 December to 30 June
2021 2020 2020
Cashflows From Operating Activities GBP GBP GBP
Loss for the period / year (1,536,500) (2,278,336) (1,399,457)
Movement in trade and other
receivables (86,357) 128,385 176,128
Movement in trade and other
payables (133,142) 457,260 100,039
Depreciation and amortisation 62,340 150,437 73,037
Finance Costs 94,858 204,681 14,043
Non cash employee benefits 26,573 52,792 26,608
Tax expense 2,427 4,840 -
Tax paid (2,427) (4,840) -
Net Cashflow from Operating
Activities (1,572,228) (1,284,780) (1,009,601)
------------------- -------------------- -------------------
Cashflow From Investing Activities
Purchase of tangible assets - (2,001) -
Investment in intangible assets (88,788) - -
Acquisition of subsidiary,
net of cash acquired (62,316) - -
Net Cashflow from Investing
Activities (151,104) (2,001) -
------------------- -------------------- -------------------
Cashflows From Financing Activities
Proceeds from issue of ordinary
shares 1,560,606 1,025,190 1,025,190
Interest paid on convertible
loan notes (83,385) (168,000) -
Proceeds from issue of shares
in subsidiary to non-controlling
interests - 14,300 14,300
Payments for right of use
assets (19,537) (148,536) -
Interest paid (600) (1,592) -
Net Cashflow from Financing
Activities 1,457,084 721,362 1,039,490
------------------- -------------------- -------------------
Net (Decrease) / Increase
in Cash & Cash Equivalents (266,248) (565,419) 29,889
Foreign Currency Translation
Difference (9,687) 9,595 6,264
Cash and Cash Equivalent at
the beginning of the period 958,342 1,514,166 1,514,165
Cash and Cash Equivalent at
the end of the period 682,407 958,342 1,550,318
=================== ==================== ===================
Notes to the Financial Information
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 principle 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".
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") 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. 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 2020 are unaudited with the audited
information included for the 12 month period ended 31 December
2020. 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 2020 included an emphasis of
matter relating to going concern.
The financial information was approved by the Board of Directors
on 24 September 2021 and authorised for issue on 27 September
2021.
The accounting policies used in the preparation of the financial
information for the six months ended 30 June 2021 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 2021.
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 2020.
During the period the Group has developed a new accounting
policy in relation to capitalisation and amortisation of intangible
assets. Expenditure on research is written off in the period in
which it is incurred. Development expenditure incurred on specific
projects is capitalised where the Board is satisfied that the
following criteria have been met:
-- it is technically feasible to complete the software product
so that it will be available for use;
-- management intends to complete the software product and use
or sell it;
-- there is an ability to use or sell the software product;
-- it can be demonstrated how the software product will generate
probable future economic benefits;
-- adequate technical, financial and other resources to complete
the development and to use or sell the software product are
available; and
-- the expenditure attributable to the software product during
its development can be reliably measured.
Directly attributable costs that are capitalised as part of the
software product include the software development employee costs
and an appropriate portion of relevant overheads.
Other development expenditures that do not meet these criteria
are recognised as an expense as incurred.
Computer software development expenditure recognised as assets
is amortised on a straight-line basis over their estimated useful
lives, which does not exceed 5 years.
Following a completion of a successful fundraise in July 2021,
the directors have concluded that the group has sufficient cash
resources for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the half-yearly
consolidated unaudited financial statements.
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, directly or indirectly, to govern the
financial and operating policies of an entity so as to obtain
benefits from its activities.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation. Uniform accounting policies are
applied by the Group entities to ensure consistency.
Business combinations
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of acquisition
is measured at fair value, which is calculated as a sum of the
acquisition date fair values of the assets transferred, liabilities
incurred or assumed, and equity instruments issued by the Group in
exchange for control in the acquiree.
On 26 May 2021 the Company announced its acquisition of the
whole of the share capital of Verifiable Credentials Limited (VCL),
the provider of Identiproof(TM), the World Wide Web Consortium
(W3C) verifiable credentials compatible middleware and wallet
technology.
The Share Purchase Agreement establishes a total consideration
of up to GBP2.75m for VCL, structured as an initial payment of
GBP100k cash and GBP300k in Company shares - GBP150k issued on
completion and GBP150k due on the first anniversary of completion,
followed by an additional contingent consideration payable on the
first and second anniversaries of the transaction, subject to
achieving various revenue targets and signing a commercial licence
deal, capped at GBP2.35m.
The initial accounting for the business combination has been
recorded using provisional amounts due to the commercial
exploitation of Identiproof being in its early stages and
difficulties in determination of reliable forecasts of future cash
flows of the product. The Group has recognised Intangible assets
acquired as a sum of book value of GBP127k and a fair value uplift
of GBP382k, which takes into account consideration paid and
deferred (the latter discounted at the rate of 15% per annum), but
not a contingent consideration. The provisional amounts will be
reassessed within twelve months of the date of the business
combination
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 licenses granted under licensing agreements, including
up-front payments. 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.
Revenue and segmental information
An analysis of the Group's revenue for each period for its
continuing operations, is as follows:
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 geographic operating segments (UK and Poland)
supported by one centralised cost segment (UK and Poland) and one
revenue segment (UK). Reporting on this basis is reviewed by the
Board of directors which is the chief operating decision-maker and
is responsible for the strategic decision-making of the Group. No
analysis of net assets by geographic segment is provided as the net
assets are principally all within the UK.
Share sub-division
On 25 May 2021 the Shareholders of the Company passed a
resolution to sub-divide each existing Ordinary Share of 5p into 10
new ordinary shares of 0.5p each.
Share Options
5,650 share options were issued by Crossword Cybersecurity plc
in the period up to 30 June 2021, with total options issued
amounted to 2,033,880. The fair value of these share options is
calculated by the Company using the binomial option valuation
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.
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 GBP1,542,060 (full year 2020: GBP2,249,707)
divided by the weighted average number of ordinary shares of
56,225,376 (full year 2020: 49,819,800 (restated following a share
sub-division in 2021)).
Subsequent events
On 28 July 2021 the Company announced that it had undertaken an
oversubscribed fundraising of approximately GBP5.0 million through
a placing and subscription of Crossword ordinary shares of 0.5p
each at a price of 30 pence per share.
Following the placing of 16,083,331 Ordinary Shares and
subscription of 583,333 Ordinary Shares from new and existing
institutional shareholders, the Company intends to apply the
proceeds of the fundraising to increase sales and marketing
resource, for product development and support and for general
working capital purposes. The placing price represents a 23%
discount to the closing mid-price on 27 July 2021.
On 9 August 2021 the Company announced acquisition of the whole
of the share capital of Stega UK Limited, the threat intelligence
and monitoring company. The acquisition brings the additional
capability of threat intelligence and monitoring services, using
its sophisticated in-house platform. The Company has agreed to pay
a total consideration of up to GBP1.8m for Stega, subject to
achieving revenue growth targets.
On 10 August 2021 the Company announced that it had granted
277,923 options comprising 172,500 options under the Company's
Enterprise Management Incentive Scheme and 105,423 options under
the Non-Tax Advantaged Plan to acquire ordinary shares of 0.5p each
in the Company at an exercise price of 35.5p per share. The options
vest in three equal tranches on the first, second and third
anniversary of the date of grant.
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END
IR XQLLLFKLFBBQ
(END) Dow Jones Newswires
September 27, 2021 02:00 ET (06:00 GMT)
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