RNS Number : 1353B
Brandshield Systems PLC
29 September 2022
 

29 September 2022

BrandShield Systems plc

 

("BrandShield," the "Company," or the "Group")

 

Half year results for the six months ended 30 June 2022

 

Average Recurring Revenue, up 71% in H1 2022, continues to underpin operational progress

 

BrandShield Systems plc (AIM: BRSD), a leading provider of cybersecurity solutions for brand oriented digital risk protection, announces its results for the six months ended 30 June 2022.

 

Financial highlights

 

 

·    H1 2022 Annual Recurring Revenue1 ("ARR") up 71% to $6.67m (H1 2021: $3.89m)

 

·    Strong momentum continued with the August 2022 ARR figure reaching $7.26m, up 68% vs. August 2021 and up 39% vs. December 2021

 

·    Delivered revenue growth of 59.9% to $2.83m in H1 2022 (H1 2021: $1.77m)

 

·    Cash of $2.18m at period end (31 Dec 2021: $2.07m)

 

·    Raised £2.5m (gross) in the period to further accelerate sales and marketing activities, expansion of advertising, sales promotion and digital marketing campaigns and ongoing B2B public relations and brand building activities

 

 

1Annual Recurring Revenue is a non GAAP measure and an industry specific measure

 

 

Operational highlights

 

·    Strong new business momentum achieved in the first half of 2022, increasing by 23 customers in the period to 153 customers, with growth continued to 163 customers by the end of August 2022.

 

22% increase in Full Time Employees to 60 at end of June 2022 (December 2021: 49). Ongoing investment in the operational and sales and marketing functions, to broaden the Company's sales footprint and drive additional ARR growth

 

·    Secured a number of contracts in the period with clients from a broad range of sectors, including new or extended contracts with companies operating in the financial services, pharmaceutical, fashion, crypto, entertainment, sports, and cosmetics sectors, including:

One of the world's largest international consumer electronics businesses

An online gaming client that focuses on the crypto gaming sub-sector

A further leading global pharmaceutical company

 

·    BrandShield 3.0 launched in January 2022 to help increase levels of customer interaction and ultimately detect levels of online threats

 

Post period-end and Outlook

 

·    Conversion rates from the new business pipeline continue to be very high and, as the impact of our expanded sales team globally delivers results, the size of the pipeline is growing strongly 

 

·    Announced formal partnership with The Sandbox, decentralised gaming virtual world and a subsidiary of Animoca Brands, which was formed to ensure the safety and security of crypto wallets and NFT assets bought and sold over the marketplace

 

·    Well placed to deliver ongoing sales growth in H2 2022, including Q4 which is traditionally the quarter which delivers the greatest growth for the Company

 

·    The Company remains confident of trading in line with expectations for FY 2022 and in its growth prospects in the medium-term

 

Broking Arrangements

 

With effect from 1 October 2022 Shore Capital will be the Company's sole broker (having previously been the Company's joint broker) following the end of Tennyson Securities' engagement as joint broker.  

 

Yoav Keren, Chief Executive Officer of BrandShield, commented:

 

"We are delighted to report that trading has remained strong, building on the significant sales traction highlighted in our full year results published in July. The tangible impact of our expanded sales team, particularly in the United States, is now having a positive impact of our ability to deliver improved levels of ARR, our key performance metric. 

 

"We are exceptionally proud of our growing client list both in terms of numbers and their leading position in their respective sectors. There is a growing realisation amongst brands of all sizes of the threat posed to their reputation and financial performance from illicit activity online and outside of their influence. BrandShield continues to offer cutting edge protection that they simply would not be able to achieve from within their own resources or from inside-the-perimeter cybersecurity solutions."

 

 

 

Enquiries:

 

BrandShield Systems plc

Yoav Keren, CEO

 

 

+44 (0)20 3143 8300

Spark Advisory Partners Limited (Nominated Adviser)

Neil Baldwin / Andrew Emmott / James Keeshan

 

+44 (0)20 3368 3554

Shore Capital (Broker)

Toby Gibbs / James Thomas (Corporate Advisory)

Henry Willcocks (Corporate Broking)

 

 

+44 (0)20 7408 4090



Vigo Consulting (Financial Public Relations)

Jeremy Garcia / Antonia Pollock

brandshield@vigoconsulting.com

+44 (0)20 7390 0237

 

About BrandShield

BrandShield is a leading cybersecurity company founded in Israel by cybersecurity experts that protect the world's largest brands and consumers from phishing attacks, online fraud, and other online threats posed by dangerous cybercriminals. Through its AI/ML platform, BrandShield identifies, tracks, and eliminates online threats for global brands and organizations, including Bristol Myers Squibb, Levi's, NewBalance, Swisscom, and the Pharmaceutical Security Institute. BrandShield is quoted on the London Stock Exchange AIM under ticker symbol BRSD. To learn more about BrandShield, please visit the company website at www.BrandShield.com.

 

 



 

Chief Executive Officer's review

 

Introduction

 

The focus for the first half of 2022 remained on continuing the rapid expansion of BrandShield's offering worldwide and in turn driving growth of the Company's Annual Recurring Revenue ("ARR") to $6.67m representing 28% growth relative to December 2021, and 71% growth versus the same period in the prior year, the key KPI for the Group. This was underpinned by the conversion of clients across a number of sectors and the ongoing investment in and expansion of the Company's marketing and sales functions. This positive trend has continued through August 2022, with ARR up 68% from August 2021, to $7.26m.  Traditionally Q4 is the quarter which delivers the greatest growth for the Company.

 

Revenues for the six months ended 30 June 2022 increased 59.9% to $2.83m compared to H1 2021 ($1.77m), with the Group reporting a loss for the period of $4.11m (H1 2021: loss of $1.77m), which was in-line with management's expectations. As at 30 June 2022, the Group had cash of $2.2 million (31 Dec 2021: $1.2m).

 

As at 30 June 2022, the loss includes Share Based Payments of $1.2m; the Company recognised the expense in the income statement according to the fair value of the share options and warrants determined using Black Scholes valuation model.

 

The Company secured several additional contracts in the period with clients from a broad range of sectors. These have included new or extended contracts with companies operating in the financial services, pharmaceutical, fashion, crypto, entertainment, sports, cosmetics and other sectors.

 

Market dynamics

 

It has been widely reported that the Covid-19 pandemic has accelerated digitisation with the growth in e-commerce being a clear example of this. Alongside this growth, there has been a significant increase in associated fraudulent activity as cyber criminals seek to exploit individuals through phishing scams, impersonation and counterfeiting.

 

Therefore, the opportunity for BrandShield is significant, and growth in our key target markets is showing no signs of abating and is apparent across myriad sectors - as demonstrated by the diverse nature of our new business wins in H1 2021 - including pharmaceutical companies engaged in the development of vaccines.

 

Our unique proposition

 

We believe that our technology is well-placed to lead this transition to a more digitised economy as enterprises increase their online protection and move from focusing on internal cyber security to requiring solutions for external threats, providing comprehensive digital risk protection solutions. BrandShield's market leading solutions are underpinned by:

 

·    A mature product, creating higher barriers to entry

·    Ongoing investment in R&D to ensure market leadership is maintained

·    AI/ML powered technology

·    Strong threat network detection capabilities

·    Unique image recognition and Optical Character Recognition (OCR) - focusing on detection of emerging threats on social media and ecommerce marketplaces

·    Big data investigation tools with multi-brand and platform capabilities

·    Strong takedown capabilities across all digital threats

 

In addition, BrandShield adopts a multi-layered approach to the detection and mitigation of online threats, which includes: Data, Analysis, Prioritisation, Interface and Action.

 

Strategy

 

The Company remains in a strong growth phase in which the focus continues to be on client conversion and driving Annual Recurring Revenue. The growth to 153 clients at the end of H1 is strong evidence of both the Company's ability to convert new clients and to retain and indeed secure upsells to existing clients who have remained with BrandShield for several years. 

 

In February, the Company announced a contract with one of the world's largest international consumer electronics businesses. This was followed by announcing a win with an online gaming client that focuses on the crypto gaming sub-sector. This is an increasingly strong sector of growth given its propensity to be targeted by fraudulent attacks. A further leading global pharmaceutical company agreed a contract in April and the Company announced its formal partnership with The Sandbox in July, post-period end. The Sandbox is a leading, decentralised gaming virtual world and a subsidiary of Animoca Brands, which was formed to ensure the safety and security of crypto wallets and NFT assets bought and sold over the marketplace.

 

Securing new clients remains the result of a mixture of inbound enquiries, referrals from existing clients and our expanding outbound sales and marketing teams around the globe. The Company is actively expanding our USA based sales team and will be in a position to announce new and leading hires in this area in the near future. 

 

In the period a total of £2.5m funds were raised prior to associated costs. This has allowed the Company to continue to focus on driving new client acquisition.  In the period the following initiatives have been undertaken:

 

·    Continue to invest in and grow the sales and marketing teams

·    Specific expansion of the sales teams in the US and UK

·    Establishing a broader marketing footprint

·    Expansion of advertising, sales promotion and digital marketing campaigns

·    Ongoing B2B public relations and brand building activities

 

BrandShield 3.0 was launched in early 2022. It was developed in accordance with the latest market requirements and to meet the most recent digital risk protection and brand protection challenges. The Software-as-a-Service ("SaaS") technology includes a completely new and robust infrastructure and its innovative user interface is both intuitive and enables more ways to detect threat networks and carry out immediate takedowns whilst covering more threats in less time.

 

BrandShield 3.0 provides both new and existing customers with the following benefits: 

 

·    Ease of use: complete responsiveness and customisation, unification of system processes and pages, and intuitive step by step detections and takedowns

 

·    Greater speed: new technologies have been implemented, significant upgrades of databases and servers, improved coding and machine processes, which have added to a much faster solution 

 

·      Superior automation: increased levels of automation for detection, analysis and takedowns

 

Key hires

 

The US accounts for the majority of the Company's client base and new business pipeline, and as such remains a key focus of our expanding sales footprint. The Company is currently undertaking a recruitment process in the US which will further expand our pipeline of opportunity in this key region for BrandShield. 

 

Outlook

 

Growth in client numbers and associated ARR remains incredibly encouraging and the Board is resolute in its strategy of reinforcing this as the market opportunity continues to present itself. The Company looks forward to updating the market in our full year results building on what is traditionally a very strong final quarter of the year and the foundations laid in our recently expanded sales and marketing efforts. 

 

The Company remains confident in trading in line with management expectations  for the full year 2022 and in the growth prospects in the medium-term.

 

 

 

Yoav Keren

Chief Executive Officer

29 September 2022

 



 

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION ON BRANDSHIELD SYSTEMS PLC FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2022

 

 

CONSOLIDATED INCOME STATEMENT

For the periods ended 30 June

 



Unaudited Period ended 30 June 2022


Unaudited Period ended 30 June 2021


Note

$


$






Revenue

2

2,828,073


1,770,298






Cost of sales


(1,469,009)


(831,575)






Gross profit


1,359,064


938,723






Research and Development expenses

3

 

(1,648,081)


 

(751,843)

Sales and Marketing expenses

3

(1,810,787)


(926,462)

Operating expenses

3

(2,044,349)


(1,138,926)



(5,503,217)


(2,817,231)






Loss from operations


(4,144,153)


(1,878,508)






Net finance income


30,376


112,169






Loss before tax


(4,113,777)


(1,766,339)






Tax expense


-


-






Loss for the period


(4,113,777)


(1,766,339)






Basic and diluted loss per share (cent)

4

 

(0.032)


 

(0.015)






 




 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the periods ended 30 June

 



Unaudited Period ended 30 June 2022


Unaudited Period ended 30 June 2021



$


$






Loss for the period


(4,113,777)


(1,766,339)

Other comprehensive income:





Items that will or may be reclassified to profit or loss:





Other comprehensive(loss) / income


(222,714)


84,612

Total comprehensive loss


(4,336,491)


(1,681,727)






 



 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June

 



Unaudited Period ended 30 June 2022


Audited Year ended December 31, 2021


Note

$


$






Non-current assets





Property, plant and equipment


231,832


47,839

Financial assets at fair value through profit or loss

12

 

3,681,806


4,112,107



3,913,638


4,159,946






Current assets





Trade and other receivables

5

1,576,268


825,066

Financial assets at fair value through profit or loss


 

18,385


20,534

Other financial assets


136,346


16,218

Cash and cash equivalents

6

2,178,349


1,194,275

Restricted cash


370,401


191,770

Assets classified as held for sale


302,514


337,870



4,582,263


2,585,733






Total assets


8,495,901


6,745,679






Current liabilities





Short term loan and bank overdraft

7

2,003,493


1,626,357

Trade and other payables

8

4,043,629


2,807,924



6,047,122


4,434,281

Non-current liabilities





Other payables


25,914


32,230



25,914


32,230

Total liabilities


6,073,036


4,466,511






Net assets


2,422,865


2,279,168






Equity attributable to owners of the parent





Share capital

11

9,600,030


9,299,228

Share premium

11

30,663,129


27,686,289

Reverse acquisition reserve


(20,653,597)


(20,653,597)

Other reserves


5,320,606


4,340,773

Retained earnings


(22,507,303)


(18,393,526)

Total equity


2,422,865

 

2,279,168

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Unaudited

 



Share capital

 

Share premium

Reverse acquisition reserve

 

Other reserves

Retained earnings

Total



$

$


$

$

$

Balance as at 1 January 2021


9,246,267

27,353,294

(20,653,597)

3,101,442

(12,646,446)

6,400,960








Loss for the period ended 30 June  2021


-

 

                      -

 

-

 

-

(1,766,339)

(1,766,339)

Share based payments


-

-

-

56,436

-

56,436

Issue of shares in relation to warrants and options exercise


52,968

 

332,995

 

-

 

(608,630)

608,630

385,963

Exchange differences on translation


-

 

-

 

-

 

(366,441)

451,060

84,612

Balance as at 30 June 2021


9,229,228

27,686,289

(20,653,597)

2,182,807

(13,353,095)

5,161,632



 

 






                                                          


Share capital

 

Share premium

Reverse acquisition reserve

 

Other reserves

Retained earnings

Total



$

$

$

$

$

$

Balance as at 1 January 2022


9,299,228

27,686,289

(20,653,597)

4,340,774

(18,393,526)

2,279,168
















Loss for the period ended 30 June  2022


-

 

-

 

-

 

-

(4,113,777)

(4,113,777)

Issue of share capital


300,803

2,976,840

-

-

-

3,277,642

Share based payments


-

-

-

1,202,546

-

1,202,546

Exchange differences on translation


-

 

-

 

-

 

(222,714)

-

(222,714)

Balance as at 30 June 2022


9,600,031

30,663,129

(20,653,597)

5,320,606

(22,507,303)

2,422,865
































 

 

 



 

UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS

For the periods ended 30 June

 



Unaudited Period ended 30 June 2022


Unaudited Period ended 30 June 2021



$


$

Cash flows from operating activities





Loss for the year


(4,113,777)


(1,766,339)

Adjustments for:





Depreciation


15,615


4,946

Share based payment expense


1,202,546


56,436

Foreign exchange on operations


245,090


-

Increase in trade and other receivables


(751,202)


(523,934)

Increase in other financial assets


(120,128)


-

Increase in restricted cash


(178,631)


-

Increase in trade and other payables


1,229,390


732,148

Net cash flows from operating activities


(2,471,097)

 

(1,496,743)






Investing activities





Purchase of property, plant and equipment


(199,607)


(37,103)

Net cash used in investing activities


(199,607)

 

(37,103)






Financing activities





Proceeds from loans and borrowings


377,136


-

Proceeds from exercised warrants


-


387,610

Proceeds from issue of ordinary shares


3,277,642


-

Net cash used in financing activities


3,654,778

 

387,610






Net (decrease) /  increase  in cash and cash equivalents


 

984,074


 

(1,146,236)

Cash and cash equivalents at beginning of period


1,194,275


3,198,525

Foreign exchange differences on cash


-


14,558

Cash and cash equivalents at end of period


 

2,178,349


 

2,066,847

 

Non-cash transactions

 

The Company operates an equity-settled, share-based scheme under which the Company receives services from employees as consideration for equity instruments (options) of the Company. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted, calculated using the Black Scholes model. In the period to 30 June 2022 4,433,552 options were issued at a fair value of 0.08 USD per option.

 



 

NOTES TO THE FINANCIAL INFORMATION

 

1.      General information and basis of preparation

 

The principal activity of BrandShield Systems plc (the 'Company') is the development of a brand protection and online threat hunting solution to prevent, detect and remove online threats, through its research and development centre in Israel.

 

Basis of preparation

 

The condensed consolidated interim financial statements ("Interim Financial Statements") of the Group have been prepared in accordance with the AIM Rules for Companies and UK adopted international accounting standards and the Companies Act 2006. They have been prepared under the assumption that the Group operates on a going concern basis. As permitted, the Group has chosen not to fully adopt IAS 34 in preparing the Interim Financial Statements. The Interim Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss.

 

The Interim Financial Information has been prepared under the same basis of preparation and accounting policies as adopted in the audited annual financial statements for the period to 31 December 2021, which were authorised by the Board on 30 June 2022. The Interim Financial Statements should be read in conjunction with these annual financial statements.

 

The interim financial information is presented in US Dollars.

 

Going concern

 

The financial statements have been prepared on the assumption that the group will continue as going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.

 

The wording included in the going concern policy and relevant disclosures within the Annual Report for the year ended 31 December 2021 is still applicable to the group as at 30 June 2022.

 

 

Critical accounting estimates

 

The preparation of Interim Financial Statements 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 Company's accounting policies. The key assumptions used in preparation of the Interim Financial Information are in conformity with the assumptions used in the annual financial statements unless otherwise stated.

 

Accounting policies

 

The same accounting policies, presentation and methods of computation have been followed in the Interim Financial Statements as were applied in the Company's audited annual financial statements. No new standards were adopted in the period. There are no new standards issued but not yet effective that have been early adopted or are expected to have a material impact on the Company.

 

2.      Revenue

 

Revenue is generated from the sale of online monitoring services. In the period ended 30 June 2022, 96% of sales were made overseas (The period ended 30 June 2021: 94.8%). The majority of overseas sales are made in the USA.

 

3.      Research and Development expenses

 


Unaudited Period ended 30 June 2022


Unaudited Period ended 30 June 2021


$


$

Salaries

(817,191)


(617,893)

Share based payment

(488,592)


-

Other expenses

(342,298)


(133,950)


(1,648,081)


(751,843)

 

Sales and marketing expenses


Unaudited Period ended 30 June 2022


Unaudited Period ended 30 June 2021


$


$

Salaries

(658,121)


(479,457)

Advertising and Marketing

(950,831)


(447,005)

Share based payment

(201,835)


-


(1,810,787)


(926,462)

 

Operation expenses


Unaudited Period ended 30 June 2022


Unaudited Period ended 30 June 2021


$


$

Salaries

(523,567)


(342,319)

Share based payment

(493,692)


-

Rent and utilities

(258,891)


(138,150)

Office and miscellaneous

(16,578)


(135,108)

Other expenses

(751,621)


(523,349)


(2,044,349)


(1,138,926)

 

 

 

 

 

 

 

 

 

 

 

 

 

4.      Loss per share

 

Basic loss per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

 

 


Unaudited Period ended 30 June 2022


Unaudited Period ended 30 June 2021


$


$

Loss attributable to equity holders of the Company

4,113,777


1,766,339

Weighted average number of shares

129,171,159


116,043,727

Loss per share (cents)

(0.032)


(0.015)

 

Since the Company is loss making, the share options, warrants and convertible loans currently in issue are non-dilutive.

 

 

5.      Trade and other receivables

 


Unaudited

Period ended 30 June 2022


Audited Year ended 31 December 2021


$


$

Trade receivables

1,557,957


647,551

Other receivables and prepaid expenses

18,385


177,515


1,576,268


825,066

 

 

6.      Cash and cash equivalents

 


Unaudited Period ended 30 June 2022


Audited Year ended 31 December 2021


$


$

Cash and cash equivalents

2,178,349


1,194,275


2,178,349


1,194,275

 

 

 

7.      Short term loan and bank overdraft

 

BrandShield Ltd has entered into an agreement with Leumi Bank to provide a revolving credit line facility of up to 8 million NIS (c. $2.3 million) for 24 months. The credit line bears a competitive interest rate. The facility allows drawdown of up to four times Monthly Revenue (net of churn) and includes covenants of a type typical of such an agreement.

 

 

8.      Trade and other payables

 

 


Unaudited Period ended 30 June 2022


Audited Year ended 31 December 2021


$


$

Trade payables

452,035


642,801

Amounts due to related parties

60,664


94

Salaries, accruals and taxes

1,153,186


777,366

Royalties Payable

-


346,306

Deferred revenue

2,377,744


1,041,357


4,043,629


2,807,924

 

 

 

9.    Related party transactions 

 

BrandShield Limited is connected to its predecessor Domain the Net Technologies Limited (the "Related Party"), a company registered in Israel. BrandShield Limited demerged from the Related Party in 2013 and has directors in common. Furthermore, the two parties share several operational costs, including sharing rental costs. There is a formal agreement between the Company and its related party (signed 17 May  2020).

 

BrandShield Limited is connected to its parent company BrandShield Systems plc. There is a formal service agreement between the two companies (signed 25 July 2021).

 

BrandShield Limited is connected to its subsidiary BrandShield Inc.

 

 

10.  Share based payments

 

The Company operates an equity-settled, share-based scheme under which the Company receives services from employees as consideration for equity instruments (options and warrants) of the Company. The fair value of the third-party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:

 

·          including any market performance conditions.

·          excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

·          including the impact of any non-vesting conditions (for example, the requirement for employees to save).

 

The fair value of the share options and warrants are determined using the Black Scholes valuation model at the date of grant.

 

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

 

When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

 

 

11.  Share capital and share premium

 

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 


Number of Ordinary shares

Number of Deferred shares

Share

capital

 

 

Share premium

Total




$

$

$

As at 1 January 2021

114,136,532

32,385,056

9,246,267

27,353,294

36,599,561

Issue of shares for warrants

3,814,389

 

-

52,968

 

332,995

385,956

As at 30 June 2021

117,950,921

32,385,056

9,299,228

27,686,289

36,985,517













As at 1 January 2022

117,950,921

32,385,056

9,299,228

27,686,289

36,985,517

Issue of shares

23,214,286

-

300,803

2,976,839

3,277,642

As at 30 June 2022

141,165,207

32,385,056

9,600,031

30,663,128

40,263,159

 

 

12. Financial assets at fair value through profit and loss

 

The Company reviews the fair value of its unquoted equity instruments at each Statement of Financial Position date. This requires management to make an estimate of the value of the unquoted securities in the absence of an active market.

 

The Company follows the guidance of IFRS 9 to determine when an investment at fair value through profit or loss is impaired. This determination requires significant judgement. In making this judgement, the Company evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow. Management also considers external indicators such as technological advances and trends, commodity prices, investment performance and demand for the underlying commodity. Financial assets held at fair value through profit or loss are assessed individually.






Unaudited Period ended 30 June 2022


Audited Year ended 31 December 2021


$


$

Opening balance

4,112,107


4,112,107

Foreign exchange

(430,301)


(41,495)

Closing balance

3,681,806


4,112,107

 

 

Financial assets include the following:

 

Unlisted securities

Unaudited Period ended 30 June 2022


Audited Year ended 31 December 2021


$


$

UK

3,681,806


4,112,107


3,681,806


4,112,107

 

At 30 June 2022, the Directors' view of fair value of the Company's investment in WeShop Ltd is $3,681,806 ($4,216,526 at 31 December 2021). This remains in line with the aggregate cost of investment. While WeShop remains pre-revenue, the Directors continue to believe that social commerce represents an exciting and authentic digital shopping opportunity, particularly post Covid-19 which has driven more traffic online and away from the high street. While the Directors are hopeful of a deliverable transaction at an attractive valuation, they consider it prudent to continue to fair value the asset at cost.

 

13. Subsequent events

 

No subsequent events were identified between the reporting period and issue of the interim financial information.

 

14.Availability of Interim Report

 

The interim report is available on www.brandshield.com

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