Braveheart Inv Regulatory News (BRH)

18 August 2010

BRAVEHEART INVESTMENT GROUP plc

('Braveheart' or 'the Group')

Acquisition of Envestors LLP ('Envestors')

Braveheart (AIM: BRH), the investment management and technology commercialisation company, announces that it has agreed to acquire the business and assets of Envestors LLP. Established in 2004, Envestors is a specialist corporate finance advisory business that matches high growth companies with private investors. The acquisition is subject to the approval of the Financial Services Authority ("FSA") and the satisfaction of a number of completion formalities including the transfer of the Envestors business to a newly incorporated limited company immediately prior to the transaction.

The consideration comprises six tranches of Braveheart shares over the next five years, subject to a maximum consideration value ("the Consideration") of £2.45 million. The number of shares to be issued will be based on Group turnover which is directly attributable to Envestors. All shares will be issued at a value of 33.87p, being a premium of 25% over the mid-market share price on or about the day terms were agreed. Full details of the consideration are set out below.

About Envestors

Envestors specialises in helping young dynamic companies raise funding from business angels or early stage venture funds. Over the past three years, the firm has helped more than 60 companies raise in excess of £22 million. Envestors runs business angel networks in London and the Home Counties, Jersey/the Channel Islands and has associate or franchise operations in Manchester and Dubai. Envestors was voted best Private Investor Network of the year in 2009 at the annual Investor Allstars Awards. Turnover for the year ending 31 March 2010 was £495,346 and its profit available for division among members was £254,006. As at that date it had net assets of £23,542.

Rationale for the Acquisition

• A broader service offering to investors;

• A wider range of funding options for companies;

• Large database of private investors, family offices and entrepreneurs;

• Executive and non-executive director placements;

• Increased deal flow from a broader geographic base;

• Greater presence in London and the South of England. Associate/franchise offices in the Channel Islands, Manchester and Dubai;

• Access to an FSA authorised corporate finance advisory resource; and

• Reduced aggregate overhead costs.

The acquisition creates an enlarged entity that will provide a comprehensive offering across the early stage venture capital market in the UK:

To the company looking to raise funds, the Group will be interested in investments ranging from £100,000 for an early stage business to £5 million for a later stage/pre-exit company. In the latter situation the Group will syndicate with other institutional investors.

A new placement service will be provided, matching High Net Worth ('HNW') investors and others to executive or non-executive positions in businesses which look to the Group for assistance or which are within the Group's portfolio of interests (currently around 45 companies).

The Group will also offer advisory services ranging from corporate finance to investor readiness and general business consultancy.

To the investor, the Group will offer three key investor products to HNW investors, all of which will encompass tax breaks provided under the Enterprise Investment Scheme ('EIS'):

·; Business Angel Service. The first is a Business Angel matching service, where investors will be offered access to investment opportunities which have been screened at a high level. The HNW or a group of HNW's will carry out their own due diligence, run the deal process themselves and manage the investment through to exit. Assistance will be available from the Group on an as-needs basis. This service is aimed at the pro-active business angel who has the requisite knowledge, experience and expertise to build and manage his or her own investment portfolio.

·; Assisted Service. The second is an assisted portfolio service where HNW's will be offered a small number of heavily screened opportunities each year. These will be 'best of breed' and will be accompanied by a full suite of due diligence documentation prepared by the Group. Investors will choose which businesses to invest in and how much they wish to invest. The Group will manage all aspects of the investment completion process. Once an investment has been made, reports and valuations will be provided on a regular basis and the Group will take an active role in managing the investment through to exit. This service is aimed at the HNW who prefers to make his or her investment decisions but who prefers to let others carry out the specialist work of completing transactions, managing and valuing portfolios and driving investments to exit.

·; Managed Fund. The third is a fully managed fund service where the HNW will commit capital over a pre-agreed period and where the Group will construct a portfolio to a mandate. This service is for the passive investor who may wish to own an unquoted portfolio of tax efficient investments but who might, for a variety of reasons, have difficulty in selecting and managing a portfolio of investments.

Consideration

Total Consideration will be based on Group turnover for the years ending 31 March 2011, 31 March 2012 and 31 March 2013 which is directly attributable to Envestors together with certain run-off fund management income for the years ending 31 March 2014 and 31 March 2015, all subject to a maximum Consideration value of £2.45 million irrespective of any over performance of Envestors' targets.

Consideration will be satisfied by the issue of Braveheart shares valued at a price of 33.87p, representing a 25% premium to the average closing price of each Braveheart share on the five days prior to 11 March 2010, being the date on which non-binding heads of agreement were signed ('Consideration Shares'). As an advance against Consideration, an Initial Consideration of £150,000 comprising 442,870 Consideration Shares is payable, subject only to their admission to trading on AIM. Thereafter, five further tranches of Consideration net of the Initial Consideration are payable following each anniversary of completion ('Deferred Consideration'). In the event that payment of any Deferred Consideration would result in the aggregate number of Consideration Shares then issued or issuable exceeding 29.9% of the Group's enlarged equity, such excess Deferred Consideration will be settled in cash.

The Consideration Shares will be subject to trading restrictions: None of the vendors are permitted to dispose of any shares received in respect of the Initial Consideration prior to the first anniversary of Completion, nor in the following year without the consent of Braveheart and its nominated adviser and broker. None of the vendors are permitted to dispose of any shares received in respect of Deferred Consideration for a period of two years following the date of issue without the consent of Braveheart and its nominated adviser and broker.

Key members of the Envestors management team will also be awarded share options in the Group's option scheme. The Board of Braveheart will announce further details in connection with the option scheme and final FSA approval in due course.

Commenting, Chief Executive of Braveheart, Geoffrey Thomson, said, "This is our third acquisition since we listed on AIM in 2007. In our recently published annual report, I noted that our ongoing strategy is to continue to build shareholder value by way of both portfolio development and growth of our investment management business - this acquisition demonstrably scales our investment management business.

"It gives us greater geographical reach, including a bridgehead into the expatriate market, and a unique and comprehensive suite of tax efficient products to offer high net worth investors. It also reinforces our position in the growing angel investment market, a market in which the Coalition Government is particularly interested (as evidenced by the recent HM Treasury publication 'Financing a Private Sector Recovery').

"The team at Envestors are first rate - I welcome them to the Group and look forward to working with them to consolidate and grow our position in the market."

Oliver Woolley, Managing Director of Envestors added, "We are delighted to announce this deal. Since 2004 we have been building the Envestors brand and we had arrived at the point where it made sense to be part of a larger, more diverse organisation. The marriage with Braveheart creates a strong and positive combination in the early stage venture capital market across the UK. The combined group will provide a more extensive offering to our 700 private investor and family office members, as well as additional services and funding opportunities for high growth companies. We look forward to working with the Braveheart team."

For further information please visit www.braveheartinvestmentgroup.co.uk and www.envestors.co.uk or contact:

Notes to Editors

Braveheart

Braveheart Investment Group is an investment management and technology commercialisation and company headquartered in Perth, Scotland. It was founded in 1997 by a small group of investors in order to encourage and syndicate investments in privately held companies that offered opportunities for significant growth. Fourteen years on, Braveheart is a public company with offices in Perth, London and Yorkshire, and a demonstrable track record in early stage technology investing as well as an established client base of high net worth individuals. Service offerings include bespoke EIS portfolios, fund management, investment facilitation and management services.

Investments are made in young, emerging, unlisted companies where there is potential for significant growth through successful commercialisation of IP. Through close relationships with a number of leading universities and innovation centres Braveheart has access to a wide variety of emerging commercial opportunities at early stages. There are currently around 45 companies in Braveheart's diverse portfolio (includes all companies where the Group has a financial interest) and it has completed over 80 deals in its 14 year history.

Envestors

Established in 2004, Envestors LLP, which is authorised and regulated by the Financial Services Authority, comprises Envestors Private Investor Club, a network of 700+ private individuals and family offices looking to invest between £20,000 and £5m in high-growth businesses, and Envestors Corporate Finance, which acts for companies seeking finance of up to £20m and ensures businesses are fully investment ready before marketing proposals to investment funds, VCTs and banks, as well as our investor base. We review over 100 business proposals a month, of which we select 2-3 to present to our investors. We have offices in London, Manchester, Jersey and Dubai and in 2009 we won "Private Investor Network of the Year" at Investor Allstars.