Crossword Admission to ISDX Growth Market

 
TIDMCCP 
 
Admission to ISDX Growth Market 
 
Crossword Cybersecurity PLC 
("Crossword" or the "Company") 
 
Admission to ISDX Growth Market 
 
Crossword  Cybersecurity plc is a cyber security focused technology transfer business  established  by  the 
Directors  to  build  a  new  European,  publicly  quoted,  research  driven  cyber  security  company   by 
commercialising  IP  relating  to  cyber  security  emerging  from  European  universities   and   research 
establishments. The Directors of the Company are delighted to announce that its Ordinary Share Capital  has 
today been admitted to trading on the ISDX Growth Market under the ticker symbol CCS. 
 
The Company has admitted 2,383,408 Ordinary Shares of GBP0.05 each 
 
PRINCIPAL ACTIVITIES 
 
Cyber  security  is  the  body  of  technologies, processes and practices  designed  to  protect  networks, 
computers, programs and data from attack, damage or unauthorised access. 
 
The cyber security challenge is growing rapidly and spend on cyber security is increasing. 
 
*   Carphone  Warehouse  was the victim of a cyber attack affecting 2.4m customers.  Personal  details 
    including names, addresses, dates of birth information, bank details and credit card data may have been 
    accessed. (FT, 14 August 2015) 
 
*   Ashley  Madison, the adult dating site, was the victim of a hacking attack resulting in the  theft 
    and subsequent exposure of the details of 37 million people worldwide. (FT 20 July 2015 & 19 August 2015) 
 
*   In  2014,  hackers  compromised eBay's database containing encrypted passwords  and  non-financial 
    data. eBay has 128 million active users. This has been described as "what is probably one of the biggest 
    data breaches in the history of the internet.there is no longer any excuse for bosses who mishandle this 
    area of their business. Companies must become far more serious about both preventing and tackling these 
    risks." (FT, 23 May 2014) 
 
*   "..[Heartbleed]..a  major security flaw at the heart of the internet may have been  exposing  users' 
    personal information and passwords to hackers for the past [two] years.one of the biggest security issues 
    to have faced the internet to date." (BBC News, 10 April 2014) 
 
*   Security  experts estimated in 2014 that information security breaches are costing the UK  economy 
    up to GBP27 billion a year. The cost to a large organisation of a security breach in UK can be in the range 
    GBP450,000 to GBP850,000. 93% of large organisations in the UK had a security breach last year. 
 
*   Number  of  companies reporting cyber security concerns to US regulators has more than doubled  in 
    the two years prior to 2014. In 2014, Chrysler reported cyber-attacks of "increasing.sophistication and 
    frequency". (FT, 21 May 2014) 
 
*   UK  cyber security spend is to be ring-fenced in 2013, George Osborne announced.describing  it  as 
    "the new frontier of defence", with GBP210 million to be invested in the National Cyber Security Programme. 
 
*   Pentagon  spending on cyber security operations could jump to USD4.7 billion in fiscal  2014  from 
    USD3.9 billion the prior year, US Defence Comptroller Robert Hale told reporters. In 2014, the US indicted 
    five Chinese military officers for alleged theft of trade secrets. 
 
*   Cyber  security is a hot investment area for venture capital firms. In 2014, VCs invested a record 
    USD1.77 billion in privately held cyber security companies, triple the amount invested five years earlier. 
    (WSJ 19 April 2015) 
 
Cyber security covers the following areas 
 
*   Threat assessment 
*   Vulnerabilities identification 
*   Asset protection 
*   Impact assessment 
 
 
THE BUSINESS 
 
Group Structure 
 
The  Company  established a wholly owned software engineering subsidiary in Poland, Crossword Cybersecurity 
Sp.  Zo.o,  in  October  2014. This subsidiary is based in Krakow and provides  specialist  cyber  security 
software  development capabilities to build the Company's products, which is based on research partnerships 
with a range of European universities. 
 
Strategy and market opportunities 
 
The  Directors  are  of  the  opinion that Europe's cyber security industry is highly  fragmented  and  led 
primarily by technical experts. 
 
The Company's model is to establish long term relationships with leading European University cyber security 
centres  of  expertise.  It  is  the  Directors' intentions that the Company's  specialist  cyber  security 
development  team  will build solutions based on emerging IP and the Company's commercial  team  will  take 
these solutions to market through partnerships and direct to end user companies. 
 
The  Company is in active discussions with a number of leading cyber security research universities and has 
to date, entered into a memorandum of understanding and two agreements, with three separate universities to 
further develop its business and a partnership to build and launch a comprehensive online database of cyber 
security projects taking place across UK universities, described in more detail below. 
 
 
An  analysis of exhibitors at InfoSec in April 2014, the industry trade show, revealed a cottage  industry. 
There  were  approximately  296 companies exhibiting in total, of which 129 were pure  software  companies, 
generally  small companies with a single product line, 30 were consultancy companies, offering  advice  and 
training and a number provide a combination of consultancy and product. The Directors believe this analysis 
would not have changed significantly since 2014. 
 
The  big  players  in  this  market tend to be US companies and there is  an  increase  in  deal-making  by 
mainstream technology companies: 
 
*   Palo  Alto  Networks, Fireye/Mandiant, both with multibillion Dollar market caps, are major  pure- 
    play cyber security companies. 
 
*   Cisco acquired Sourcefire for a reported USD2.7 billion in 2013.  In 2012 Dell spent a reported 
    USD1.25 billion on SonicWall and Intel bought McAfee for USD7.7 billion in 2010. 
 
The  Directors believe both the pure-plays and the mainstream technology companies are keen to  acquire  if 
they see high quality cyber security assets with strong IP. 
 
US venture capital firms are increasingly active in cyber security: 
 
*   Top  five  investors  in 2014: Fairhaven Capital, Andressen Horowitz, Bessemer  Venture  Partners, 
    Paladin Capital Group Partners and Khosla. 
 
*   Google Venture is very active as is KPCB. For example, Ionic Security raised USD25.5 million from 
    Google Venture, KPCB and Jafco; Shape Security raised USD40 million from Norwest and Sierra Ventures; and 
    Cylance raised USD20 million from Blackstone, Khosla and Fairhaven Capital. 
 
Competition 
 
The Directors believe that there are very few high quality, IP driven, growth stage European cyber security 
companies that investors can use to gain exposure to this rapidly growing market. 
 
The  Company's model is similar to IP Group PLC, Imperial Innovations Group PLC and Allied Minds  PLC,  but 
with a focus on cyber security and a delivery and execution capability. 
 
Research and Development 
 
The Company has had no specific research and development policies in place in respect of the last financial 
year  in  addition  to those adopted by the various number of leading cyber security research  universities 
that the Company has either been in active discussions with or has entered into agreements with. 
 
Trends 
 
Save  as  set out in the Company's Admission Document in the section entitled "Risk Factors", the Directors 
do  not  believe  that there are any known trends, uncertainties, demands, commitments or events  that  are 
reasonably  likely to have a material effect on the Company's prospects for at least the current  financial 
year. 
 
 
HISTORIC ACTIVITIES, CURENT TRADING AND FUTURE PROSPECTS 
 
 
The Company was incorporated in March 2014 and commenced trading shortly thereafter. 
 
Currently the Directors are building the relationships and structure to support the proposed activities and 
in  the  relatively short time since incorporation, the Company has managed to enter into a  memorandum  of 
understanding and two agreements with three different leading cyber security research universities. 
 
On  5  January  2015,  the  Company  entered into a memorandum of  understanding  with  Bristol  University 
Cryptography and Information Security Group to explore commercialisation opportunities. Bristol  University 
Cryptography and Information Security Group, led by Professor Nigel Smart, has an international  reputation 
for its cryptography. Multi-Party Computation is a sub-field of cryptography and Professor Smart's team has 
created  leading  edge  intellectual property in this highly specialised domain.  The  Company  is  working 
exclusively with the group to explore ways that it can be deployed in the high value arena of financial and 
non-financial trading. 
 
Furthermore, in January 2015, the Company informally partnered with the Partnership for Conflict,  Crime  & 
Security  ("PaCCS"), a Research Council UK initiative, to build and launch a comprehensive online  database 
of cyber security projects taking place across UK universities. CLUE, the cyber security research database, 
covers over 300 cyber security research projects from over 50 UK universities, representing over GBP150m of 
research  grant  investment since 2007. It provides the industry with a searchable view of the  UK's  cyber 
security academic research landscape to enable organisations to collaborate with academia more effectively. 
As  a  result  of  this  partnership,  the  Company and PaCCS are  making  CLUE  freely  available  to  all 
organisations  to  encourage and facilitate technology transfer and commercialisation of  research  in  the 
cyber security sector. 
 
In January 2015, the Company entered into an agreement with The Cyber Security Centre at WMG, University of 
Warwick  to  embark on a series of workshops to explore commercial opportunities leveraging  cryptocurrency 

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