Braveheart Inv Regulatory News (BRH)

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

4 August 2020

Braveheart Investment Group plc

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

Final Results for the year ended 31 March 2020 & Notice of AGM

Braveheart Investment Group plc (AIM: BRH), the fund management and strategic investor group, announces its audited annual results for the financial year ended 31 March 2020, highlights of which are set out below:

· Loss per share of 2.01 pence per share (2019: loss of 6.40 pence per share)

· One additional Strategic Investment now consolidated into these accounts - Pharm 2 Farm

· Share-for-share exchange in Paraytec

· Funds raised of £625K before expenses post period end

· Additional investment into Phase Focus

· The Ridings Early Growth Investment Company now consolidated following revenue agreement with British Business Bank

· Acquisition of 25.8% of Remote Monitored Systems Plc post year end

For further information:

Braveheart Investment Group plc +44 (0) 1738 587555

Trevor Brown, Chief Executive

Allenby Capital Limited (Nominated Adviser and Broker) +44 (0) 20 3328 5656

David Worlidge / James Hornigold

Chief Executive Officer's Report

I am pleased to report to shareholders for the year ended 31 March 2020.

Overview

Our Group strategy continues to be to apply the Board's expertise and financial resources, (at the year-end we held £685K cash on the balance sheet), to those businesses which the Board consider have the greatest potential for outperformance. We have increased our investments into Kirkstall, Paraytec and Pharm 2 Farm over the past year and have provided significant management resource to these companies. During the year under review our holding in Pharm 2 Farm rose to greater than 50% of the issued share capital of Pharm 2 Farm and as we are also providing significant management resource to it we are deemed to have 'control'. The consequence of this is that we have had to consolidate the accounts of this company, which forms a part of our Strategic Investments, into our Group accounts.

In the period under review and since the year end we have continued to develop and expand our Strategic Investments. In particular, we have increased our holding in Phasefocus Holdings Limited by investing new funds into the company and the purchase of existing shares so that we now own 42.7% of this company and we have acquired a strategic stake in AIM-quoted Monitored Systems plc ("RMS"), a company that Mr Trevor Brown is also a director of, by purchasing existing ordinary shares and by subscribing for an additional £200,000 in new shares in the company so that our stake in this company is now 25.8% of the issued share capital. We have classified our holding in RMS to be a Strategic Investment and therefore, as at the date of this report, now hold investments in seven Strategic Investments (including Paraytec, Kirkstall and Pharm 2 Farm) as follows:

· Phasefocus Holdings Limited;

· Paraytec Limited;

· Sentinel Medical Limited;

· Kirkstall Limited;

· Gyrometric Systems Limited;

· Pharm2Farm Limited; and

· Remote Monitored Systems plc.

We have provided details of these investments together with operational updates about each of these companies below. We regard this growing portfolio of Strategic Investments as the primary way forward for generating significant value for our shareholders. This CEO Report seeks to reflect that fact by focusing on these companies and their development.

During the year, a dividend of 0.5p per share was paid to the shareholders.

On 29 April 2020, the Company placed 1,617,647 new ordinary shares at a price of 17p to raise £275,000 before expenses. On 1 May 2020, the Company placed a further 1,590,909 new ordinary shares at a price of 22 pence per share, raising £350,000 before expenses.

Portfolio and Strategic Investments

As in previous years we have continued to divide our investments into two categories, namely our Strategic Investments, of which there were six at the end of the year under review and with one further investment added after year under review, and our Portfolio Investments. Each of the Strategic Investments is summarised below in this annual report. The Portfolio Investments are direct investments into third party companies that were made by Braveheart from 2002 until the summer of 2015 (the 'Portfolio Investments'). There are investments into a total of 14 different companies within the Portfolio Investments as at 31 March 2020. Therefore, at the end of the period under review there were investments into a total of 20 companies.

We will continue to manage the Portfolio Investments with a view to seeking exits wherever possible.

Strategic Investments Overview

Phasefocus Holdings Limited

Since the end of the period under review Braveheart invested further in PhaseFocus, subscribing for new shares and separately also acquired shares from another shareholder. As a result, Braveheart now owns 42.67 per cent. of the issued share capital of PhaseFocus.

PhaseFocus, a spin-out from the University of Sheffield, has developed a series of patented computational imaging techniques that have a wide range of applications including live cell imaging, engineering metrology and electron microscopy. The PhaseFocus Virtual Lens™ is a novel method for high fidelity quantitative imaging and microscopy. It is known in the scientific literature as "ptychography". It works equally well in both transmitted light and reflected light applications and, given suitable illumination sources and detectors, it can operate using any wavelength in the electromagnetic spectrum, as well as electron and other particle waves. The technology produces images with significantly higher contrast than other forms of imaging; it is particularly powerful for imaging transparent objects and for measuring physical properties. No focusing devices are required, so the PhaseFocus Virtual Lens is an inherently 'lensless' imaging method. There are therefore no associated lens-related aberrations or limitations. However, the method can also be integrated with conventional microscopes that already possess a variety of lenses and these can be used to provide optical or geometric flexibility, or for conventional imaging.

In June 2019, the company launched the second generation of its flagship product, Livecyte™, and shipped the first unit in August. Aimed at cancer and stem cell researchers, Livecyte continuously quantifies and compares dynamic live cell behaviour over many days. Powered by PhaseFocus's computational imaging technology, Livecyte™ produces high-contrast videos of precious human cells, without the use of fluorescent labels that can affect the behaviour of cells. Integrated analysis software uses proprietary image analysis algorithms to automatically track individual cells to unlock multi-parametric data and enable users to explore and compare cellular phenotypes under defined conditions, long-term, in micro-titre plates.

Livecyte™ combines gentle imaging, high contrast images and tangible outputs to provide users with deeper insights previously unattainable without dyes or labels. Over the last year, the company has significantly increased its distributor network to accelerate sales of Livecyte™ globally. The new Livecyte™ system represents such a significant advance over the previous generation system that over half of the company's existing Livecyte™ customers have ordered upgrades. The live cell imaging market was worth $1.8bn globally in 2018, (source: Live Cell Imaging Market by Product by MarketsandMarkets Research Private Ltd, published February 2019), and is forecast to grow at 8.9% per annum, (source: Live Cell Imaging Market by Product by MarketsandMarkets Research Private Ltd, published February 2019).

PhaseFocus's technology is also finding increasing use in electron microscopy for improving microscope performance, contrast and resolution. Recently a collaborator at Cornell University was awarded the Guinness World Record for the highest resolution image ever recorded, (0.39 ångströms is 3.9X10^-11 metres) using PhaseFocus technology. The company continues to work with several leading electron microscope manufacturers to adapt the technology for routine use in their microscopes. 

Paraytec Limited

During the year, Braveheart acquired the remaining shares in Paraytec, and the Company became a wholly owned subsidiary of Braveheart.

Post period end, the Company has commenced a programme with University of Sheffield to develop a rapid test for the pandemic pathogen, COVID-19. The test involves the deployment of a DNA aptamer - a short, single-stranded DNA molecule that adopts a shape that is complementary to that of the virus surface protein. By coating a test surface with millions of copies of the aptamer molecule, our capture module can trap Covid-19 virus particles from a swab sample, as they flow over the test surface. Trapped viruses are then instantaneously coated with the signal generation module, a synthetic chimaeric protein, that both recognises the viral surface as well as being highly fluorescent. The resultant fluorescent signal is measured by the detection module using a version of Paraytec's patented Actipix area imaging technology configured for fluorescence detection.

In this project, Paraytec is working with Professor Carl Smythe's group at the University of Sheffield - which has expertise in the field of synthetic bio-molecular sensors. Formerly Academic Director of the Sheffield Cancer Centre, Prof Smythe's research is focused on cellular quality control systems monitoring chromosomal DNA. With 35 years' research experience, he has, together with collaborators in academia and industry, developed a wide range of sensor systems with applications in disease testing.

The objective of the project is to develop a portable test, which can generate a result in a matter of minutes from a swab provided at the test location and which requires no specialist skills for its operation. If successful, it could be used in airports, transport hubs, large workplaces and similar settings, where rapid screening of large numbers of people for presence of COVID-19 or any future emerging pandemic is required.

The NEXUS project has now been successfully completed. End user tests with major biopharmaceutical players have been looking at both therapeutic proteins and 'virus like particles' (VLPs) that are used to deliver new gene therapy drugs. In a VLP, the active part of a virus is removed, and the outer 'shell' is filled with a 'cargo' of the DNA/RNA which constitutes the gene therapy. Biopharma companies need to characterise formulations, to assess critical quality attributes including levels of aggregation and the empty/full ratios of VLPs with nucleic acid cargo. Paraytec is engaging with both instrumentation and biopharma partners to commercialise this technology, through licensing and development agreements to create a new instrument. Paraytec are in early discussions with one of the end user consortium members to assess the applicability of its instrumentation across wider aspects of their production processes.

Paraytec's work with a pan-European consortium of three companies, a University and a hospital, to deploy Paraytec's technology in the field of Alzheimer's disease (AD) diagnosis is progressing but delayed due to the COVID-19 restrictions on lab working. The project intends to develop a prototype instrument to test blood and cerebrospinal fluid for protein biomarkers. By measuring and monitoring these proteins, clinicians aim to more accurately diagnose patients and monitor their treatment. As previously reported, the ability to forecast the likely rate of mental decline for a given AD patient will be a major advance.

Sentinel Medical Limited

Braveheart owns 38.40% of this company, which was formed in order to provide a focus on the exploitation of bladder cancer detection and monitoring that has historically been developed within Paraytec.

Testing of a prototype instrument to detect bladder cancer from urine samples has been underway in collaboration with Sheffield University. Following testing of the initial batch of 'live' samples, provided by bladder cancer patients undergoing treatment for their condition, it was concluded that further enhancements to the sensitivity of the test method were needed. This work is ongoing, with Professor Carl Smythe, and will utilise some of the techniques and protocols which will be developed in the COVID-19 project described above. 

If the sensitivity improvement steps are successful, the Company will launch its plans to develop a point-of-care instrument for the diagnosis and monitoring of bladder cancer from urine samples.

Kirkstall Limited

As reported on 3 March 2020, Braveheart now owns 80 percent of Kirkstall Limited ("Kirkstall"), which has developed Quasi Vivo™, a system of interconnected chambers for cell and tissue culture in laboratories. Its patented technology is used by researchers in the growing 'organ-on-a-chip' market, where academia and drug development companies need to maintain living cells in a nutrient flow.

Kirkstall is collaborating with Animal Free Research UK, the UK's leading non-animal medical research charity, who award grants to research scientists to implement new and existing techniques to replace the use of animal in trials and research. Animal Free Research UK's assessment panel has awarded the first three projects that will use Kirkstall's Quasi Vivo® products in efforts to understand COVID-19 as it affects humans. As part of this programme, Kirkstall has provided cutting-edge human relevant technology to scientists at three leading UK research institutes - Imperial College London, Johns Hopkins Bloomberg School of Public Health, and Coventry University.

Deployment of the Quasi Vivo® system will contribute to the development of novel strategies for the

prevention and treatment of COVID-19 infection.

During the year, Kirkstall has been selling its products directly and is now receiving orders direct from end customers that were previously supplied via ex-distributor Lonza, as well as new customers. It has also appointed new distributors in South Korea and China. These distributors have completed their product training and although associated promotional plans were delayed due to COVID-19, they are now being recommenced.

Kirkstall's annual conference, Advances in Cell and Tissue Culture ("ACTC") 2020, due to be held in June 2020 at Cardiff University (www.theACTC.com) has been delayed due to the COVID-19 pandemic. Plans are now underway for a series of 'virtual' conferences online.

The €4.7m EU grant funded project, CyGenTiG, where Kirkstall is part of a European consortium to develop new techniques for the production of engineered tissues by optogenetics, is progressing well. If this project is successful, it could lead the way to building replacement human organs, by controlling individual cell growth and differentiation. Kirkstall's experience will be used in the design, manufacture and testing of new cell culture chambers, which may ultimately become a new product range.

Gyrometric Systems Limited

Gyrometric Systems Limited ("Gyrometric"), in which the Company owns an 18% interest, continued to make sales in its established marine drives market, having received further orders from a global leader in developing, producing and marketing innovative system solutions for marine propulsion systems. The client, Vulcan Couplings, is a market and technology leader in the development of highly flexible couplings, shaft systems and elastic mounts. The orders demonstrate commercial rollout of the Gyrometric product with a market leader and is a testament to the quality of the Gyrometric offering.

Gyrometric had expected to conduct trials for two major wind turbine manufacturers however, progress on these projects has been significantly slower than expected as the priorities of these manufacturers changed.

To reduce dependence on projects with long lead times, Gyrometric refocused its sales efforts to develop new markets, where the lead times are expected to be shorter and the opportunities more immediate. As a result, Gyrometric announced contracts with several companies including Tarmac and Clarke Energy.

In addition, the Company made new offerings, including a Universal Bearing Monitor, a Laser Sensor and the Absolute Dynamic Shaft Alignment ("ADSA") system. ADSA enables any builder or owner of large rotating equipment to install Gyrometric's equipment, use it to align the shafts initially, and then leave it in place to monitor conditions during the life of the asset, and when misalignment occurs, use it to measure and correct the shaft alignment absolutely.

The Memorandum of Understanding with Turkish company Gani Gemi Ve Is Makinaları Tic. Ltd ("Gani") is now bringing Gyrometric's products to the marine market in Turkey and neighbouring countries, where Gani is a leading installer of engines and other heavy equipment for both ship and rail industries.

Pharm2Farm Limited (P2F)

In the past year, Braveheart invested further in this company, taking its holding to 52%. P2F produce nanoparticles by a patented a process. These materials have a wide range of industrial and biological applications.

Their patented coating technology is used to functionalise the surface of particles. These materials increase the bioavailability of trace minerals in plant feeds, which can dramatically improve productivity and trace element take-up in both flower and crop farming. Marketed under their nSitu™ brand, P2F is selling these products both directly and through distributors.

Huanglongbing, commonly referred to as Citrus Greening, is one of the contributing factors to the demise in citrus production; devastating citrus crops around the world. P2F is trialling its proprietary nanotechnology with citrus farms in both the UK and USA in an effort to hold the ongoing citrus greening epidemic. Preliminary studies have shown that zinc can kill off the Candidatus Liberibacter asiaticus bacteria associated with citrus greening, something unachievable with current commercial bactericides. Pharm2Farm's technology enables the zinc to be applied as drench or foliar spray to the plant, effectively and efficiently translocating the zinc to the site of infection. If successful, this new nSitu™ technology will sit alongside the P2F's growing portfolio of nano-agritech designed materials to support commercial farmers around the world.

Post period end, P2F secured a grant from Innovate UK to fund the development of an enhanced anti-viral face mask to help protect people during the COVID-19 pandemic and beyond. P2F's patented process can produce coated nanoparticles with a highly active surface which can provide anti-viral properties to extend the life and capacity of a face mask. The project will combine P2F's nanoparticle manufacturing capabilities with filter materials, which are also nanotechnology based, made by its partner. Early stage proof of principle trials to integrate P2F's nanoparticle technology into face mask material have been successful. As a result, P2F's anti-viral face mask project is on schedule to produce a pre-commercial prototype anti-viral face mask on their UK their production line by November 2020.

If successful, P2F will seek both to manufacture disposable face masks in-house and to licence its technology to major face mask producers, in order to supply a global market which generated global revenues of $1.52 billion in 2019 and is estimated to reach $2.45 billion by 2027, registering a compound annual growth rate (CAGR) of 4.4% from 2021 to 2027 (Source: Allied Market Research report May 2020).

More recently, P2F has recently installed a new manufacturing plant at MediCity in Nottingham, which has increased production capacity for the continuous production of a wide range of nano-materials that can be used for many applications.

Ref. https://www.grandviewresearch.com/industry-analysis/disposable-face-masks-market

Remote Monitored Systems plc

Since the end of the period under review the Company has purchased existing shares in Remote Monitored Systems plc ("RMS"), an AIM quoted operating company, and subscribed for an additional £200,000 of shares in RMS in a recent fundraising. As at the date of this report the Company owns 25.8% of the issued share capital of RMS. RMS has two trading subsidiaries, GyroMetric Systems Limited ("GyroMetric"), in which it owns a 58 per cent. interest (and in which Braveheart has a separate 18 per cent. interest), which develops and manufactures digital monitoring and safeguarding systems for rotating shafts and Cloudveil Limited ("Cloudveil"), an intelligence services and security risk management business, which was acquired in September 2019.

Outlook and Strategy

There have been exciting and promising developments in all of our businesses during the year and we expect this pace of change to continue into the current year and beyond, as our past endeavours begin to bear fruit.

Financial Review

During the year we continued the comprehensive review of our cost base and continued to reduce the central costs.

Income Statement

Fee-based revenue was generated by Braveheart Investment Group Plc. The principal revenue from the Group's operations comprises investment management fees, with total revenue during the year being £60,000 (2019: £574,000). Revenue derived from strategic subsidiary undertakings has increased by £302,000 from £95,000 in 2019 to £397,000 in 2020. Finance income was £Nil (2019: £3,000), this being interest on outstanding loan notes within the directly held portfolio.

As at 31 March 2020, the total number of directly held investments in the portfolio of Strategic Investments and the Portfolio Investments was 20 companies (2019: 16), of which three have been consolidated into Braveheart's accounts. The fair value of the directly held portfolio, excluding the three companies now consolidated into the Company's accounts, was £724,402 (2019: £688,059). During the year the Group made investments of £100,000 into two portfolio companies, PhaseFocus Holdings Limited (£86,000) and Gyrometric Systems (£14,000). This excludes investments made into investments that are controlled by the Group. Three investments (Being Kirkstall, Paraytec and Pharm 2 Farm) that are considered as Strategic Investments by the Board are now deemed to be 'controlled' by the Company and as a result of this those companies have been consolidated into Braveheart's accounts (but remain categorised by management as Strategic Investments). At the year end, the value of these three investments was £588,318 (2019: 444,169), although the value in the consolidation in terms of goodwill stands at £399,677 (2019: £340,426). Therefore, the fair value of the directly held portfolio (Strategic Investments and Portfolio Investments and including the three investments that have now been consolidated into the Company's accounts) was £1,124,079 (2019: £1,028,426). 

Total income for the year ended 31 March 2020, including realised gains and unrealised revaluation gains and losses, was £307,000 (2019: £231,000).

The average number of employees remained at 7 during the period under review. This is due to three employees in Viking Fund Managers (sold during the year) not being included and the employees of Kirkstall and Pharm 2 Farm being added. The number of employees working within the Group, excluding employees of Kirkstall, Paraytec and Pharm 2 Farm, remained at 3 during the year under review. Employee benefits expense was £356,000 (2019: £428,000). Other operating and finance costs decreased to £450,000 (2019: £379,000). 

The total loss after tax decreased to £563,000 (2019: loss of £1,733,000), equivalent to a basic loss per share of 2.01 pence (2019: loss per share of 6.40 pence). This decrease is largely due to an impairment of goodwill in the previous year of £1,451,000.

Financial Position

The Group's net assets of £1,777,000 (2019: £2,281,000), include goodwill of £399,000 (2019: £340,000). The carrying value of goodwill was reviewed during the year, the goodwill on the acquisition of Pharm 2 Farm Limited amounted to £131,000. The value of Pharm 2 Farm is considered to be higher than this and so no impairment was deemed necessary. The income method was not deemed appropriate for the companies under review due to the difficulty of projecting the future income of these companies, so market value approach was considered more appropriate. As a result of this, goodwill has been reduced to £72,000 for Paraytec and the other investments were valued higher than the goodwill amount, meaning that no impairment was required.

At the year end the Group had cash balances of £685,000 (2019: £1,207,000 (including discontinued operations)). There were no material borrowings.

A summary analysis of the Group's performance is as follows:

Key Performance Indicators (KPIs)

The KPIs we use to monitor business performance have been changed in order to better reflect the emphasis that the Board has placed upon the development of the Strategic Investments as the best way to increase shareholder value over the short and medium term. Given the nature of our business these KPI's remain as, primarily, financial measures. They are:

Principal Risks and Uncertainties

Through its operations the Group is exposed to a number of risks. The Group's risk management objectives and policies are described in the Corporate Governance Statement. Braveheart is monitoring closely the rapid development of events in relation to the COVID-19 pandemic and all necessary steps have been taken to maintain the integrity of the Company's assets and the health and well-being of our employees. 

Section 172 Statement

Section 172 (1) of the Companies Act obliges the Directors to promote the success of the Company for the benefit of the Company's members as a whole. This section specifies that the Directors must act in good faith when promoting the success of the Company and in doing so have regard (amongst other things) to:

a. the likely consequences of any decision in the long term,

b. the interests of the Company's employees,

c. the need to foster the Company's business relationship with suppliers, customers and others,

d. the impact of the Company's operations on the community and environment,

e. the desirability of the Company maintaining a reputation for high standards of business conduct, and

f. the need to act fairly as between members of the Company.

The Board of Directors is collectively responsible for formulating the Company's strategy, which is to provide advisory services to SMEs and invest in businesses where prospects appear to be exceptional and deliver growth to its shareholders.

Some key decisions were taken by the Board since April 2019 which were aimed to deliver on this strategy. These included:

· Increased investments in Kirkstall, Paraytec and Pharm 2 Farm;

· Providing significant management resources to Pharm 2 Farm;

· Increased the holdings in Phasefocus Holdings Limited; and

· Acquired a strategic interest in AIM quoted company Remote Monitored Systems plc.

The Board places equal importance on all shareholders and strives for transparent and effective external communications, within the regulatory confines of an AIM-listed company. The primary communication tool for regulatory matters and matters of material substance is through the Regulatory News Service, ("RNS"). The Company's website is also updated regularly, and provides further details on the business as well as links to helpful content such as our latest investor presentations. We also hold regular investor events which are open to all shareholders and provide an environment where shareholders can interact with the Board and management, ask questions and raise their concerns.

Our employees are one of the primary assets of our business and will be critical to the future success of the Company. First and foremost, the Directors strive to ensure a safe working environment for all its staff and contractors, and we are proud of our safety achievements in 2019/20. We also seek to reward employees with remuneration packages which align the interests of the Company and its shareholders with those of employees. Employees are also provided with challenging work and external training opportunities to ensure their continual development.

The Directors believe they have acted in the way they consider most likely to promote the success of the Company for the benefit of its members as a whole, as required by Section 172 (1) of the Companies Act 2006.

On behalf of the Board

Trevor E Brown

Chief Executive Officer

3 August 2020

Consolidated Statement of comprehensive INCOME

The accompanying accounting policies and notes form part of these financial statements.

consolidated statement of financial position

Consolidated Statement of CAsh flows

Consolidated and company Statement of ChAnges in Equity

Notes to the financial statements

1 Corporate information

While the financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group has also published full financial statements that comply with IFRSs available on its website and to be circulated shortly.

The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 31 March 2020 or 2019. The financial information for the year ended 31 March 2019 is derived from the statutory accounts for that year, which were prepared under IFRSs, on which the auditors gave a qualified report, and which have been delivered to the Registrar of Companies.

The financial information for the year ended 31 March 2020 is derived from the statutory accounts for that year, which were prepared under IFRSs, on which the auditors have given an unqualified report that did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006, and which will be delivered to the Registrar of Companies.

 2 Accounting policies

Basis of preparation

The Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations (IFRS IC) as adopted by the European Union as they apply to financial statements for the year ended 31 March 2020 and as applied in accordance with the provisions of the Companies Act 2006. The principal accounting policies adopted by the Group and by the Company are set out in the following notes.

The consolidated financial statements have been prepared on a historical cost basis, except where otherwise indicated. The financial statements are presented in sterling and all values are rounded to the nearest pound (£) except where otherwise indicated.

The Group's business activities (together with the factors likely to affect its future development, performance and position) and its financial position is set out in the Chief Executive Officer's Report. The Group's risk management objectives and policies are described in the Corporate Governance Statement. Further information regarding the Group's financial risk management objectives and policies, including those in relation to credit risk, liquidity risk and market risk, is provided in the financial statements.

3 Revenue from contracts with customers

Revenue is attributable to the principal activities of the Group. In 2020 and 2019, all revenue arose within the United Kingdom.

The business is regarded as one segment due to the nature of services provided and the methods used to provide these services. The business is managed and financial performance is reported to the Board on this basis.

Of the revenue stated above, £60,377 (2019: £84,246) related to The Lachesis Seed Fund Limited Partnership.

The group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:

4 Earnings per share

Basic earnings per share has been calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the year.

The calculations of profit per share are based on the following profit and numbers of shares in issue:

Dilutive earnings per share adjusts for share options granted where the exercise price is less than the average price of the ordinary shares during the period. At the current year end there were 32,431 (2019: 75,675) potentially dilutive ordinary shares.

The diluted loss per Ordinary Share is calculated by adjusting the weighted average number of Ordinary shares outstanding to consider the impact of options, warrants and other dilutive securities. As the effect of potential dilutive Ordinary Shares would be anti-dilutive, they are not included in the above calculation of diluted earnings per Ordinary Share.

5 Investments at fair value through profit or loss

Included in the balance above are investments that would be owed to the British Business Bank through the Revenue Share Agreement. At the year end, an amount of £56,461 would be due to the British Business Bank on disposal. This liability is shown in the accounts within other creditors.

As at 31 March 2020, the group total value of investments in companies was £724,402 (2019: £688,058). The group total change in fair value during the year was a loss of £139,859 (2019: gain £177,030). During the year, investments that were valued at £25,000 were transferred to investment in subsidiaries.

Investments, which is made up of equity investments, are designated on initial recognition as financial assets at fair value through profit or loss. This measurement basis is consistent with the fact that the Group's performance in respect of its portfolio investments is evaluated on a fair value basis in accordance with an established investment strategy. When investments are recognised initially, they are measured at fair value.

After initial recognition the fair value of listed investments is determined by reference to bid prices at the close of business on the reporting date. Unlisted equity investments are measured at fair value by the directors in compliance with the principles of the International Private Equity and Venture Capital Guidelines, updated and effective December 2015, as recommended by the European Venture Capital Association. The fair value of unlisted equity investments is determined using the most appropriate of the valuation methodologies set out in the guidelines. These include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; earnings or profit multiples; indicative offers; discounted cash flow analysis and pricing models.

The Group classifies its investments using a fair value hierarchy. Classification within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant investment as follows:

· Level 1 - valued using quoted prices in active markets for identical assets;

· Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1; and

· Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

The fair values of quoted investments are based on bid prices in an active market at the reporting date. All unquoted investments have been classified as Level 3 within the fair value hierarchy, their respective valuations having been calculated using a number of valuation techniques and assumptions, notwithstanding that the basis of the valuation methodology preferred by the Group is 'price of most recent investment'.  To reflect the potential impact of alternative assumptions and a lack of liquidity in these holdings, a discount of 15% has been applied to all Level 3 valuations. When using the DCF valuation method, reasonably possible alternative assumptions could have a material effect on the fair valuation of investments.

The methodologies used in the year are broken down as follows:

Details of investments where the nominal value of the holding in the undertaking is 20% or more of any class of share are as follows:

Caledonia Portfolio Realisations Limited ('CPR') holds a 20% aggregate shareholding in Verbalis Limited ('Verbalis'), a design and production of automated language translation systems company. Neither CPR nor the Company is represented on the Board or within management of Verbalis and in the opinion of the directors, this shareholding does not entitle the Company to exert a significant or dominant influence over Verbalis. The carrying value of Verbalis is £nil (2019: £nil).

The Company holds an 18% aggregate holding on Gyrometric Systems Limited, this company has developed a patent protected system of hardware and software to accurately monitor the vibrations in rotating shafts. The Company is represented on the Board and in the opinion of the directors, this shareholding nor the representative entitles the Company to exert a significant or dominant influence over Gyrometric. The carrying value of Gyrometric is £211,420 (2019: £203,895).

The Company holds a 25% aggregate holding on Phase Focus Holdings Limited, has developed a series of patented computational imaging techniques that have a wide range of applications including live cell imaging, engineering metrology and electron microscopy. The Company is represented on the Board and in the opinion of the directors, this shareholding nor the representative entitles the Company to exert a significant or dominant influence over Phase Focus. The carrying value of Phase Focus is £203,287 (2019: £51,000).

The Company holds a 38% aggregate holding on Sentinel Medical Limited, this company is developing a point of care diagnostic device for bladder cancer detection and monitoring. The Company is represented on the Board and in the opinion of the directors, this shareholding nor the representative entitles the Company to exert a significant or dominant influence over Sentinel. The carrying value of Sentinel is £29 (2019: £29).

The registered addresses for these entities are as follows:

Verbalis Limited Frostineb Cottage, Fala, Pathhead, Midlothian, EH37 5TB

Gyrometric Systems Limited Dockholme Lock Cottage, 380 Bennett Street, Long Eaton, Nottingham, NG10 4JF

Phase Focus Holdings Limited 125 Wood Street, London, United Kingdom, EC2V 7AW

Sentinel Medical Limited York House, Outgang Lane, Osbaldwick, York, England, YO19 5UP

6 Goodwill

At the end of the previous year, the Group assessed the recoverable amount of the above goodwill associated with Neon's cash-generating unit and determined that goodwill would be moved to assets held for sale as a result of the company being sold after the year end.

The income approach was not deemed a reliable method for valuing the goodwill of Paraytec, Kirkstall and Pharm 2 Farm. Therefore, the market value method was used in order to ascertain the value of goodwill at the year end.

7 Posting of audited results for the year ended 31 March 2020 and Notice of AGM

The Company is pleased to announce that it expects to post its audited report and accounts for the year ended 31 March 2020 to shareholders shortly. It is also posting notice of its annual general meeting ("Notice of AGM"), to be held on 8 September 2020 at 10.30 am. Copies of the final report and accounts and the Notice of AGM will also be available to view on the Company's website shortly, at http://www.braveheartgroup.co.uk/.

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