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The Open Offer only raised £52k out of the total £2.2m on offer as per today's RNS - retail investors had the common sense not to subscribe.

Not sure about everyone else, but for me it was getting tiring hearing them peddle the same story every year about needing more funds for attempting to accelerate growth through marketing/sales spending. And then the kicker was from last year's cash raise hearing messaging about them being close to cash generation and having cost mitigation options to avoid further fundraises before that point, yet now they have tried to go for possibly their biggest cash raise to date. Not to mention the repricing and reissue of options for founders - if they believe the current share prices are not a true reflection of the company value, how is it fair to retail investors that the founders get options issued and repriced relative to these levels, especially with it soon to become delisted with no quoted price to reference anyway. Don't recall the founders ever making a purchase of shares on the open market if the price represented such good value, seems like they just want all the upside through options and not willing to take on similar risk as other investors getting in at these prices.

CFO has also has exited with immediate effect in other recent news.

Barnacle and Jimmyr_83 - thanks for the reply regarding what happens to shares on delisting.

Anyone know what happens if you are holding your shares through a share trading platform like AJ BELL, Hargreaves Lansdown, Interactive Brokers, etc ?

What happens if you are holding the shares at delisting date - will they continue to hold unlisted shares in custody, or give you the option to transfer ownership into your personal capacity, or do they require you to sell prior to delisting ?

Thanks.

On the WeShop point, I think they are now able to offload their stake if they can find a buyer. I imagine it would be one of their priorities to offload non-core holdings to raise cash to fund their core BrandShield operations. If they wait for a full WeShop IPO on a main trading board then I imagine they will get locked into another period ( 1.5-2 years ? ) of not being able to sell as existing shareholders at IPO date. My interpretation is that there is no buyer at the price they want for that size stake of WeShop. In terms of early stage company, I think Brandshield have been in existence for 10 years, so I am not sure how long it takes to get our of that early stage label.

I think around $350,000 a year in director fees for each of their two co-CEOs. That seems a lot in a year for one CEO for a company of this size, stature and performance. The value of their shareholding is reducing with the share price, but just wait for the next batch of share incentive options to be issued to them. They seem to be big winners with the fees they have been taking out over many years, and I hope large shareholders like Currie/Leahy are pressing them. I think the original Brandshield company started around 2013, RNS's alluded to hitting cashflow positive territory next year. Let's see. Their product and industry reputation seems good, but no translation yet to shareholder value. I think they need place a bigger emphasis on achieving profitability and positive cashflow and then the market will react. They should have a relatively fixed cost base, and once that cash flow positive territory is reached then returns should increase exponentially as revenue grows. I wait and hope.

The final tranche of the long-term incentive plan options (RNS 19/04/2021) would have been assessed on ARR at end June 2023.

May 2023 ARR figure released as $9.3m (RNS 03/07/2023), compared to upper end of the incentive plan target as follows:

"The remaining 50% of the LTIP Options will vest should the Company have achieved an ARR figure of US$13,000,000 (the "Second ARR target") by 30 June 2023 (the "Second Milestone Options")."

They seem to be a long way off that ambition for the top end of the incentive plan ARR of $13m.

AGM on Wednesday, where they usually have a resolution to renew authority for another year to issue new shares. So maybe a fund raise soon after that authority being renewed.

The cash burn and available cash balance is a confusing one to me - why would Currie/Leahy purchase more shares on the open market in May if they expected to subscribe for another raise in the next few months ?

I think in May the bid price was languishing at about 5p and might have gone sub 5p, then the RNS in May about increased shareholdings from Currie/Leahy seemed to get the share price going up above 7p. Since then a gradual drift down and bids seem to be at the 5p level again.

Hopefully an RNS soon saying that they have gone over the $10m ARR mark. I think they published that they were at c$9.3m at end May.

I liked this under the "Going Concern" section on page 47:

"In addition, the directors have undertaken sensitivity reviews of the forecasts to model the effects of lower than budgeted growth and believe that cost reductions would be achievable if needed (albeit to the detriment of the Group’s long term strategy) if required to avoid the need for a fundraise within the next 12 months. These measures would

include if required the Directors deferring an element of their salaries.

There was a recent RNS in May that William Currie had increased their holdings in the company, and those shares presumably have been acquired through the open/secondary market. Hopefully that is also a good sign that the intention is for no further cash raise soon.

Negatives for me:

1) ARR growth of only c$900k to May 2023 from previous 2022 year end ($8.42m to $9.3m). This compared to ARR growth of c$1.1m to May 2022 from the previous 2021 year end ($5.22m to $6.3m). Sit this alongside the marketing spend and to me does not look great. Second half of the year has typically been better so hopefully can catch up there this year.

2) Directors fees look very large relative to the size of this company. I guess that is why they can reference and explicitly state that deferring directors salaries as a mitigating action under the going concern section.

I think shareholder value in terms of the share price increase will only start to come when this company starts to become cash flow positive, but hopefully not long now before that happens and hopefully no more fundraises until then. The William Currie increased holding in May did provide a nice upwards bump in the share price.

@shandypants2 - what do you make of the level of director remuneration with respect to level of cash burn and share price performance?
From 2021 report (assuming I have read this correctly):
Total Director Fees $859,303 (20.8%)
Yoav + Yuval (CEO, CTO) Total Fees $627,124

Surely large shareholders like Leahy/Currie would have an opinion on this ?

And what do you think the prospects are of Brandshield being able to offload their stake in WeShop in the forseeable future at something resembling its carrying value in the accounts ? I think the Weshop deal/acquisition at the back-end of 2021 had an 18-month lock-in for existing shareholders which theoretically means Brandshield could look to offload in 2023.

It looks like Frost & Sullivan are a business consulting provider.

So are Brandshield a paying customer of Frost & Sullivan's business consulting services ?

I actually found this more positive than I was expecting. Seems to have been a better pick up in new customer acquisition from May to August compared to the update of May figures. Hopefully they are able to accelerate this further, and it is not coming at too high a cost.

In terms of Brandshield doing something quite impactful, showing a stronger trend of new customer acquisition would be good.

They only managed to acquire 10 new customers for the Jan22-May22 period, which is only 2 new customers per month on average. This was disclosed in their RNS on 30 June 2022 for their final results.

If I had to speculate on why Currie/Leahy invested in Brandshield, I think they might have done a relative comparison of the valuations of Brandshield's competitors and viewed Brandshield as cheap on a relative basis. The market research on the size and growth of the brand protection market might also have played a factor. The specific competitor I think is of most relevance is Incopro, which is/was a British brand protection company that was acquired by Corsearch. I have not seen the purchase price disclosed, but it is possible that word may have got out within that level of investors and got people excited of the opportunities in the sector. There could also be information around on fundraises that other competitors might have done to gauge what their valuations could be. Currie/Leahy might not have been able to participate in the other companies, and Brandshield might have offered easiest access from a participation perspective to get invested.

Being cheap on a relative basis to your competitors is no guarantee of excess future returns, especially if the market was very frothy when the acquisitions/fund raises for competitors was taking place.

As an investor, I don't really want to keep hearing about how big the potential market opportunity is and how good your technology is, if that is not backed up with actual achieved sales. What makes it worse is when the cash burn and sales/marketing costs are ballooning with no corresponding proportionate increase in new sales. And for new sales I mean new customer acquisition, rather than cross and upselling to existing customers.

Just read an article about a company called Marqvision, established in 2020, that has recently secured funding of $20m.
They also have an AI powered platform that protects brands.

Brandshield, established around 2013, has a current market cap of about $14m as of today.

The last time there was an RNS for a new contract win was 6 April 2022, 4 months ago now.

Where are the new clients ?

If or when there is a new fundraise, will it be another message of funds being used to expand efforts in sales and marketing to take advantage of a significant market opportunity ?

How much will directors be awarded for their progress in 2022 ?

On the Brandshield website, if you click through the "Investors" menu item, then under "Results, Reports and Presentations" for 2022 you will be able to find a notification of the AGM.

There is an article on einnews.com from 1 July 2022 with heading "Delphi Infotech to become a value-added distributor for Brand Shield in APAC".

The article starts "In the hour of need" and goes on to announce the strategic partnership. Delphi Infotech are said to provide sales, marketing and technical support for Brand Shield's APAC-based customers. Delphi Infotech is a New Delhi based IT consulting services company.

Same Brandshield? If so, why no RNS? What do they mean by technical support - are Brandshield (assuming one and the same Brandshield) now starting to outsource some operational functions? If so, why? Cost pressures? Is that why the article starts "in the hour of need" ?

Interesting.

I made mention of this in an earlier post, but thought I would highlight this in a separate thread. I got this info from the Brandshield accounts (Directors Remuneration section), hopefully I have transcribed these correctly below.

Just consider these numbers in the context of a company which may be considered a startup and is unprofitable and cash burning. Also consider the share price performance. I think the Reverse Takeover share price in December 2020 was set at 20p per share, now trading around 7p per share.

Total remuneration could be both cash benefit and stock benefit. I assume the fees component is a cash benefit. I have combined Yoav and Yuval's figures into a total, but just divide by two to see what each is earning.

Just look at how much director fees could be contributing to cash burn and how well the directors could be considered to be doing out of Brandshield. I imagine it could be a similar story for 2022 when those full year results are revealed. I joke to myself that this is the reason Yoav and Yuval are now always smiling and look so happy in pictures.
I have put the % of total Brandshield revenue in brackets.

2020
Total Brandshield Revenue $2,589,370
Total Directors Remuneration $459,881 (17.8%)
Total Directors Fees $401,749 (15.5%)
Yoav + Yuval Total Remuneration $348,908 (13.5%)
Yoav + Yuval Fees $296,040 (11.4%)

2021
Total Brandshield Revenue $4,127,247
Total Director Remuneration $1,093,137 (26.5%)
Total Director Fees $859,303 (20.8%)
Yoav + Yuval Total Remuneration $840,328 (20.4%)
Yoav + Yuval Total Fees $627,124 (15.2%)

Increase from 2020 to 2021
Total Brandshield Revenue +$1,537,877 ; +59%
Total Directors Remuneration +$633,256 ; +138%
Total Directors Fees +$457,554 ; +114%
Yoav + Yuval Total Remuneration +$491,420 ; +141%
Yoav + Yuval Total Fees +$331,084 ; +112%

Only 10 new customers in the first 5 months of 2022 does not seem consistent with the message of a significant market opportunity/interest and in line with the large increase in expenditure on sales and marketing. The ARR growth for 2022 so far must have come primarily from cross/upselling to existing customers, and eventually this will get tapped out.

I also found the directors remuneration section of the financials interesting. In 2020, pre reverse take over, the cofounders/co-CEO's had total remuneration of $174k each. RTO in December 2020 with fund raise, total remuneration for them in 2021 has gone up to $420k each. $313k of the total was listed as fees so assume this part was a cash payment/outflow. Will be interesting to see what this will be for 2022.

These specific directors have large stakes in the company and obviously are being impacted by the share price, but they now seem to be benefiting quite substantially (in my opinion) from what they are now getting through fees. And as the share price drops they seem to get a new batch of options at lower exercise prices (using the last grant of options/warrants as an example). While their ownership stake is high, their downside risk in my opinion is mitigated through director fees and the potential for new option awards at lower exercise prices.

For the average shareholder at the moment, they are just getting hammered by the share price fall with no respite in sight.

Are directors delivering value to the average retail shareholder commensurate with their remuneration and award options ? This is a very closely held company in terms of ownership so I don't think the average retail shareholder voice will ever hold much sway.

If I had to make a prediction and based on pure speculation I think the following: the current goal is that they are trying to find a buyer to offload Brandshield and the price would be in the range of 10p-15p per share. Currie/Leahy will average down their purchase price over the next few years so that they can breakeven or profit slightly. While the hypothetical sale at that price would not be life changing amounts for the directors/co-founders, they would have derived additional benefits until sale through director fees. There may be no further money forthcoming from Currie/Leahy and this could be the only viable option they see as being left.