NARF Narf Industries Plc

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

30 December 2024

NARF INDUSTRIES PLC

INTERIM RESULTS

Narf Industries plc ("Narf", the "Company", or the "Group") (LSE: NARF), the cybersecurity group specializing in high-end threat intelligence and critical infrastructure security, today announces its unaudited results for the six months ended 30 September 2024 ("HY2024").

HY2024 Overview

·    As previously outlined (see RNS dated 7 November 2024), the Company experienced a decline in revenues, reflecting temporary U.S. government budget delays and a strategic focus on accelerating the development and commercialization of the innovative SocialCyber platform.

·   Revenue for the period was $1.18 million (HY2023: $3.11 million) representing a shift in focus toward long-term growth initiatives.

·      Proactive measures were implemented to optimize costs and ensure financial flexibility:

o  A restructured team achieved annual base salary savings of $900k, aligning resources to drive SocialCyber business growth.

o  Senior management contributed to $500,000 in cash flow savings through salary waivers and cost deferrals.

·      Financial stability was maintained, with cash at period end totalling $135,725 (HY2023: $341,543).

·      Secured a significant $1.3 million DARPA SocialCyber contract (see RNS dated 27 August 2024).

Post-period highlights

·   Notified by current government customer of selection for $5+ million multi-year contract award, negotiations pending, with award anticipated in Q1 2025.

·     Strengthened liquidity by agreeing to increase the CEO's working capital loan facility from $2.5 million to $3 million, ensuring continued operational support.

Executive Chairman John Herring said: "Despite the challenges, we successfully transitioned to a higher-value business model centred around our SocialCyber platform with recurring revenue potential. With significant contract wins and promising opportunities ahead, the Company is well-positioned to deliver exceptional value through this innovative approach while maintaining disciplined financial management."

ENDS

For further information visit www.narfgroup.com or contact:

About NARF Industries plc

Narf Industries (LSE: NARF) is a U.S. based leading provider of cybersecurity research, solutions, and services to government entities. With a steadfast commitment to protecting national security and critical infrastructure, it offers comprehensive expertise in addressing the evolving cyber threats faced by its clients.

DIRECTORS REPORT AND STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE CONDENSED INTERIM REPORT AND CONDENSED FINANCIAL STATEMENTS

The results of the Group have been addressed above in the Chairman's statement. The total comprehensive loss for the six-month period was $1,831,773 (interim period to 30 September 2023:  loss of $376,815) and the Group's unaudited net liabilities as at 30 September 2024 were $1,508,974 (30 September 2023: $61,126).

Directors

The following directors held office during the period:

Steven Bassi                       Chief Executive Officer

John Herring                      Executive Chairman

Albert Hawk                       Non-Executive Director

Responsibility Statement

The Directors confirm that to the best of their knowledge:

a)    the condensed set of financial statements has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting';

b)    the interim management report includes a fair review of the information required by DTR 4.2.7R - namely an indication of important events that have occurred during the first six months and their impact on the condensed interim financial information, and a description of principal risks and uncertainties for the remaining six months of the financial year; and

c)    the interim management report includes a fair review of the information required by DTR 4.2.8R - disclosure of material related parties' transactions in the first six months and any material changes therein).

Cautionary Statement

This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.

Going Concern

The Directors' assessment of going concern is detailed in Note 2.

Principal Risks and Uncertainties

The principal risks and uncertainties affecting the business activities of the Group remain those detailed in the consolidated report and accounts for the fifteen month period ended 31 March 2024, a copy of which is available on the Company website at https://narfgroup.com/investor-relations/corporate-document. The Board considers that these remain a current reflection of the risks and uncertainties facing the business for the remaining six months of the financial year.

By order of the Board

Steve Bassi

Chief Executive

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

Notes to the CONSOLIDATED Financial Statements

interim results to 30 SEPTEMBER 2024

1.     Organisation and Trading Activities

The principal activity of Narf Industries plc (the "Company'') together with its operating subsidiaries (together, the "Group") is high-end threat intelligence. Its strategy is focussed on building a group capable of offering cybersecurity solutions in the US and beyond. The Company is domiciled in the United Kingdom and incorporated and registered in England and Wales as a public limited company. The Company's registered office is 5 Fleet Place, London EC4M 7RD. The Company's registered number is 11701224.

Summary of Significant Accounting Policies

The principal accounting policies adopted and applied in the preparation of these interim Group Financial statements are set out below.

These have been consistently applied to all the periods presented unless otherwise stated:

Basis of accounting

These interim financial statements of Narf Industries plc (the "Group") have been prepared in accordance with UK adopted international accounting standards ("UK-adopted IAS") applied in accordance with the provisions of the Companies Act 2006.

The interim financial statements have been prepared under the historical cost convention on the basis of the accounting policies as set out in the Group's audited annual financial statements and are presented in US Dollars, the presentational and functional currency of the Group. The Group has applied IAS 34 in the preparation of these interim financial statements.

This announcement was approved and authorised by the Board of directors on 18 December 2024. Copies of this interim report can be found on the Company's website at https://narfgroup.com/investor-relations/corporate-document

These condensed interim financial statements for the six months ended 30 September 2024 are unaudited and do not constitute fully prepared statutory accounts. The comparative figures for the fifteen-month period ended 31 March 2024 are extracted from the 2024 consolidated financial statements of the Company. The independent auditor's report on the 2024 financial statements  opinion was qualified principally due to the inability to gain sufficient and appropriate audit evidence in respect of the opening balances at 1 January 2023.

Going concern

Any consideration of the foreseeable future involves making a judgement, at a particular point in time, about future events which are inherently uncertain. The Directors have prepared cash flow forecasts covering the period to 31 December 2025. The Chief Executive has agreed not to demand repayment of his loan until the Group has sufficient cash resources to repay it, whilst those members of senior management who have accepted salary deferrals have agreed to defer until revenues are sufficient for the Group to settle the outstanding amounts. The forecasts, accordingly, indicate that the Group will have sufficient cash resources to meet all foreseeable liabilities, other than those relating to the loan to the Chief Executive and salary deferrals, through to a period which is at least twelve months after the issue of these condensed interim financial statements.

Accordingly, the Directors have a reasonable expectation that the Group will be able to meet any future obligations and thus to continue operating for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the interim financial statements.  

Basis of consolidation

The Financial Statements consolidate the financial information of the Company and companies controlled by the Group (its subsidiaries) at each reporting date following the acquisition in March 2022.

Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity, has the rights to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. The results of subsidiaries acquired or sold are included in the financial information from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the results of acquired subsidiaries to bring their accounting policies into line with those used by the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation. The financial statements of all Group companies are adjusted, where necessary, to ensure the use of consistent accounting policies.

The Financial Statements consolidate the financial information of the Company and companies controlled by the Group (its subsidiaries) at each reporting date.

2.     EARNINGS PER SHARE

The basic earnings per share is based on the loss for the period divided by the weighted average number of shares in issue during the period. The weighted average number of ordinary shares for the Company the period ended 30 September 2024 assumes that all shares have been included in the computation based on the weighted average number of days since issue. Since the Group has made a loss in the current and each of the prior periods, the options in issue are not dilutive. 

3.     SHARE CAPITAL AND SHARE PREMIUM

The following table is presented in US Dollar equivalents:

4.     POST PERIOD END EVENTS

There were no significant events subsequent to the balance sheet date which have any bearing on these interim financial statements.

Important notice

The content of this announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (FSMA). This announcement has been issued by and is the sole responsibility of the Company. The information in this announcement is subject to change. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold, directly or indirectly, in or into the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States. This announcement is not for release, publication or distribution, directly or indirectly, in or into Australia, the Republic of South Africa, Japan or any jurisdiction where to do so might constitute a violation of local securities laws or regulations (a Prohibited Jurisdiction). This announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.