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We are delighted to present our interim results for the period 1st January 2018 to 30th June 2018. Crossword Cybersecurity plc (“Crossword”) continues to invest in sales and marketing and in the first half of 2018 we saw an uplift in revenue of 37% compared to the first half of 2017. For the first time, Crossword achieved a gross profit as our revenue growth outpaced expansion in our cost base. A huge amount of effort is going into building up our sales pipeline with Crossword’s bid pipeline currently standing at £1.4m across over 30 companies in a wide range of sectors.

Cyber security incidents continue to plague business, government and the population at large. The 2018 Cyber Security Breaches Survey released in April revealed that seven in ten of large businesses have reported being a victim of a cyber-attack and a similar number of large charities have been hit too. In April 2018, the National Crime Agency pointed to their success in taking down a hacking site that had disrupted the operations of seven major international banks. In the recent British Airways hack, 380,000 card payments were compromised. There were reports of Russian probing of a USA power company grid. In the USA the Department of Justice indicted a group of Iranian hackers for attacking 144 US universities plus 176 universities in 21 other countries. The approach was to “spearfish” university professors, gaining access to their accounts. Millions of pounds worth of valuable intellectual property was exposed in the process. MyFitnessPal, a fitness app was compromised with 150 million emails and passwords put at risk.

Crossword works with universities to commercialise technology based on their extensive cyber research. By mid-2018 we had engaged or explored projects with a group of ten universities including Imperial College, Edinburgh University, EPFL in Switzerland and MIT in the USA as well as Bristol, Warwick, Coventry, Surrey, South Wales and, City, University of London.

Following the implementation of GDPR (General Data Protection Regulation) in May 2018, Crossword is seeing strong interest in Rizikon Assurance, our Software-as-a-Service (SaaS) supplier risk assessment solution based on a recurring revenue model. We invested rapidly in our product sales team and held over two hundred meetings with potential commercial clients during the first half of 2018, building up a healthy sales pipeline. We estimate that the UK market alone for Rizikon Assurance is worth £300m per annum. In addition to rolling out Rizikon, we are enhancing our second product, Nixer, with a focus on identifying attack tools such as credential stuffing and aim to introduce Nixer v1.5 to prospective clients in the coming months.

Crossword completed phase one of its CyberAI initiative, exploring where to apply leading edge Artificial Intelligence and Machine Learning techniques to real world cyber security challenges. CyberAI brought together world leading academic researchers from MIT, Imperial College and Edinburgh University with four major companies: a global investment bank, a FTSE 100 retail bank, a multinational insurance company and a big four professional services firm. In 2018 we started work on refining the specific AI based cyber security idea that emerged from this initial phase into a proof of concept.

Meanwhile, we are seeing continued positive revenue growth from our consulting business, building on its experienced team of ex-military, intelligence and corporate cybersecurity professionals.

CyberOwl, the spin out from Coventry University funded by Mercia Fund Management, launched its product, Medulla, a platform for cyber-risk prioritisation, at European InfoSec 2018. It also appointed Peter Jaco, former Chairman of BeCrypt and an early investor in Digital Shadows, as its Chairman. ByzGen, the spin out based on blockchain work conducted at the University of Warwick and EPFL Switzerland, is making very good progress working with the Ministry of Defence and ATOS amongst others. In September 2018, it received a further £1.5m investment from Regulatory Finance Solutions Limited.

On the corporate front, Crossword appointed Mary Dowd as Finance Director and a Board member. Mary has over 20 years’ experience, working with established companies with turnover of £170m as well as small start-ups. In February 2018, Ruth Anderson joined the Board as a Non-Executive Director. Ruth has over 15 years of experience in the field of security, intelligence, cybercrime and risk management. She is currently Head of IT and Cyber Risk at Lloyds Banking Group and was previously a director of Cyber in the Financial Service Department of KPMG. Ruth previously held senior roles at the Child Exploitation and Online Protection Centre and served in intelligence and security in the British Army, following a degree in Arabic and Modern Middle Eastern Studies from Oxford University. In March 2018, Crossword strengthened its balance sheet with an oversubscribed funding round, raising £2.16m from existing and new investors, including the Chief Executive and other senior Crossword executives.

Crossword Cybersecurity plc was delighted to be awarded NEX Exchange Company of the Year in June 2018. the-year/

After the end of the half year, Crossword signed a Memorandum of Understanding (MoU) with IP Group, the major main market listed technology transfer company. The MoU sets up an understanding between IP Group and Crossword to commercialise intellectual property originating from university research projects leveraging Crossword’s cybersecurity expertise and IP Groups commercial and financial capability.


The management of the business and the nature of the Group’s strategy are subject to a number of risks. The Directors have set out below the principal risks facing the business:

  1. Intellectual property acquisition & development. Crossword acquires intellectual property (IP) rights from universities via licensing and IP transfer arrangements and then develops this IP into commercial products. Failure to secure good quality IP deals will make it difficult for us to generate new products. Crossword has in-house expertise on IP arrangements and will make use of external law firms where assistance is required.

  2. Reputational risk. As a cybersecurity company. Crossword is very conscious of its external reputation. If we are compromised as a result of a cyber incident it would impact our client’s confidence. Crossword has an experienced Chief Information Security Officer (CISO) and a strong technical team who actively mitigate threats.

  3. Working capital management. Crossword needs to manage its working capital tightly to ensure that its funds are properly controlled. Failure to do so could cause problems with cash flow. Crossword has robust internal procedures to ensure that working capital is managed carefully on an ongoing basis.

  4. Creating commercially viable propositions. The Group’s strategy is to convert interesting academic cybersecurity ideas into commercially viable products. Failure to develop appropriate commercial opportunities for its emerging products represents a major risk. The Group is managing this risk by constantly reviewing the market to position our emerging products and investing in a strong, professional sales, marketing and product management team.

  5. Maintaining university partnerships. Crossword needs to establish and maintain relationships with leading cybersecurity universities. Failure to establish commercialisation partnerships with leading research universities will limit our ability to generate new products. Over the past year we have been able to expand our set of relationships to ten leading universities.

  6. Competition from established tech transfer businesses. The Group faces competition from existing IP transfer businesses seeking to engage in cybersecurity commercialisation activity. Crossword ensures that we know the main players in the UK technology transfer sector and we cooperate with them rather than compete as evidence by our MoU with IP Group and Mercia investing in the spin out, CyberOwl. We have deep cybersecurity sector knowledge and they have considerable financial resources to deploy, so the relationships are largely complimentary.

  7. Attracting and retaining cybersecurity talent. The market for experienced cyber security experts is highly competitive. Crossword relies on having real expertise in our teams. We go out of our way to create a positive working environment that is attractive to talented individuals and we adopt flexible working practices to fit in with individual’s lifestyles in contrast to many large corporates and consultancies. We also have incentives in place, such as share options.

At present the Directors are pleased with progress in these areas and consider these risks are sufficiently mitigated.

T Ilube Director

Further information, please contact:

Tom Ilube CEO, Crossword Cybersecurity Tel: +44 (0) 20 8973 2350 Email:

NEX Corporate Advisor Nick Michaels and Jon Isaacs, Alfred Henry Corporate Finance Limited Tel: +44 (0) 203 772 0021

NEX Corporate Broker Claire Louise Noyce – CEO, Hybridan LLP Tel: +44 (0) 203 764 2341 Email:

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2018NoteUnaudited 6 months to 30 June 2018 GBPAudited Year ended 31 December 2017 GBPUnaudited 6 months to 30 June 2017 GBPTURNOVER544,052736,546396,652Cost of sales(453,638)(1,062,350)(452,382)GROSS PROFIT / (LOSS)90,414(325,804)(55,730)Other operating income – research and development tax credits–97,716–Administrative expenses(896,208)(956,126)(485,247)Share-based payments(18,903)(50,875)(44,536)Finance income – bank interest receivable1,9589762,882Finance costs – other interest payable(1,032)(1,402)(1,203)NET LOSS BEFORE TAXATION(823,772)(1,235,515)(583,834)Tax expense(2,900)(4,730)(2,133)LOSS FOR THE PERIOD/YEAR(826,672)(1,240,245)(585,967)OTHER COMPREHENSIVE INCOME Items that will not be classified to profit or loss Foreign Exchange Translation Gain/(Loss)(4,212)4,2652,726TOTAL COMPREHENSIVE LOSS(830,884)(1,235,980)(583,241)EARNINGS PER SHARE1(£0.23)(£0.39)(£0.19)

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018NoteUnaudited Group £ 30 June 2018Audited Group £ 31 Dec 2017Unaudited Group £ 30 June 2017ASSETSNON-CURRENT ASSETSProperty, plant and equipment15,05712,4087,703Intangible assets––624Investment in other unlisted investment and subsidiary313131Total non-current assets15,08812,4398,358CURRENT ASSETSTrade and other receivables355,001175,813264,745Cash and cash equivalents1,751,798490,0901,067,869Total current assets2,106,799665,9031,332,614TOTAL ASSETS2,121,887678,3421,340,972EQUITYAttributable to the owners of the companyShare capital199,506159,173159,173Share premium account5,627,2023,555,5223,555,522Retained earnings(4,013,831)(3,186,833)(2,532,788)Translation of foreign operations3,4107,5295,990Equity Reserve69,77850,87544,536TOTAL EQUITY1,886,065586,2661,232,433LIABILITIESCURRENT LIABILITIESTrade and other payables235,82292,076108,539Total current liabilities235,82292,076108,539TOTAL LIABILITIES235,82292,076108,539TOTAL EQUITY & LIABILITIES2,121,887678,3421,340,972


Share Capital

Share Premium

Retained EarningsTranslation of Foreign

OperationsEquity Reserve

Total££££££At 1 January 2018159,1733,555,522(3,187,159)7,62350,875586,033Total comprehensive loss for the period––(826,672)(4,212)–(830,884)Issue of shares40,3332,071,680–––2,112,013Share-based payments––––18,90318,903Balance at 30 June 2018199,5065,627,202(4,013,831)3,41069,7781,886,065

Share Capital

Share Premium

Retained EarningsTranslation of Foreign


ReserveTotal££££££At 1 January 2017156,0153,413,416(1,946,821)3,264–1,625,874Total comprehensive loss for the period––(1,240,245)4,265–(1,235,890)Issue of shares3,158142,106–––145,264Share-based payments––––50,87550,875Balance at 31 December 2017159,1733,555,522(3,187,066)7,52950,875586,033

Share Capital

Share Premium

Retained EarningsTranslation

of Foreign OperationsEquity

ReserveTotal££££££At 1 January 2017156,0153,413,416(1,946,821)3,264–1,625,874Total comprehensive loss for the period––(585,967)2,726–(583,241)Issue of shares3,158142,106–––145,264Share-based payments––––44,53644,536Balance at 30 June 2017159,1733,555,522(2,532,788)5,99044,5361,232,433


Unaudited 30 June

2018Audited 31 Dec

2017Unaudited 30 June


Cash generated by operations



(621,805)      NET CASH OUTFLOW FROM OPERATING ACTIVITIES         (841,173)         (1,192,688)       (621,805)      CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment(4,920)(15,657)(7,222)Purchase of shares in other unlisted investment–––NET CASH OUTFLOW FROM INVESTING ACTIVITIES             (4,920)             (15,657)          (7,222) CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares2,112,013145,264145,264NET CASH INFLOW FROM INVESTING ACTIVITIES2,112,013145,264145,264NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS














Cash and cash equivalents relate solely to amounts held on demand at recognised financial institutions.


ACCOUNTING POLICIESThe Group and its operationsCrossword Cybersecurity plc’s condensed consolidated interim financial statements (the interim financial statements) are presented in pounds sterling (£), which is also the functional currency of the parent company. These interim financial statements were approved for issue by the Board of Directors on 27 September 2018.

The financial information set out in these interim financial statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2017 have been filed with the Registrar of Companies. The auditor’s report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006.

The interim results have not been reviewed by the auditors of the Company.Basis of preparation of financial statementsThese interim financial statements are for the six month period ended 30 June 2018. They have been prepared following the recognition and measurement principles of IFRS. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2017.

These interim financial statements have been prepared on a going concern basis, under the historical cost convention.

These interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2017.

Notes1.Earnings per share

The calculation of earnings per share is based on the loss attributable to ordinary shareholders divided by the average number of shares in issue during the period.


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