30 Jun 2022 17:07
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
BrandShield Systems Plc
("BrandShield" or the "Company")
Final Results for the year ended 31 December 2021
BrandShield Systems plc (AIM: BRSD), is one of the leading cyber security companies that provides brand oriented digital risk protection. The Company specialises in the monitoring, detection and removal of online threats such as phishing attempts, scams, impersonation, fraud, counterfeit products and trademark infringements. The business was established to revolutionise the way companies can protect their digital assets outside their security perimeter. Ever since launch, BrandShield has introduced ground-breaking innovative technologies for online brand protection powered by artificial intelligence ("AI"), machine learning and big data analysis to provide the most automated and relevant solutions for the 21st century.
Financial highlights
· 59% increase in revenues to $4.13m ($2.6m in 2020)
· 59% increase in ARR to $5.22m ($3.28m in 2020)
· Cash of $1.194m ($3.198m in 2020)
Operational highlights
· 53 new customers signed in 2021 (77 clients in 2020)
· Partnership with Coinmama, a leading cryptocurrency exchange, achieving the identification and takedown of 30 phishing and over 100 fraudulent websites seeking to impersonate Coinmama
· 20 additional employees hired during 2021, including sales directors in the US and UK
· Signed an agreement with a merchandising company of a celebrity franchise to mitigate online abuse of its brand and sales of counterfeit merchandise
· Secured a mandate with a customer in the personal care industry and one of a fast-growing number of small and medium enterprises ("SMEs") who are identifying the need to source online brand protection solutions as they seek to grow through online channels such as TikTok and Instagram
· BrandShield deployed cutting-edge Image Recognition and Optical Character Recognition ("OCR") on its online brand protection platform in 2021, which has been well received with clients.
Post Period End
· 10 new customers contracted between Jan and May 2022
· Strong growth trend has continued into 2022 with the May 2021 ARR figure standing at $6.3m, a 66.7% increase in ARR relative to May 2020.
Outlook
The Group is looking forward to the continuing rapid expansion of BrandShield as a leading brand orientated digital risk protection company that is deployed globally. The increasing awareness of cyber related crimes and other threats to brands is leading to an acceptance that external threat prevention and eradication is an essential capability that every company must have, in the same way that protecting internal systems is viewed.
In January 2022, the Company completed a £1,500,000 raise of gross investment funds to continue to execute the strategy of aggressively targeting client and ARR growth. In May, the Company raised an additional £1,000,000 from William Currie Investments and Sir Terry Leahy.
This investment will allow BrandShield to expand its marketing and sales efforts and to continue to drive ARR forwards. The platform is built to scale and, therefore, a focus on the top line and customer conversion continues to be the over-riding priority for 2022.
Yoav Keren, Chief Executive Officer of BrandShield, commented :
"The Company delivered a strong performance across 2021, and, pleasingly, that momentum has continued into 2022, with BrandShield having already secured a number of new mandates with companies across a wide array of sectors. Revenue growth and new business development continues to be a focused strategy for management alongside expanding the Group market share and profile.
The increasing awareness of cyber related crimes and other threats to brands is driving further demand for digital risk protection solutions, such as those BrandShield offers. The Board is confident in the Group's future prospects and to its ongoing rapid expansion.
The Company remains confident in trading in line with the expectations for the full year 2022 and in the growth prospects in the medium-term."
For further information please visit https://www.brandshield.com/ or contact:
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 (Joint Broker) Toby Gibbs / James Thomas / Liam Zabludowicz (Corporate Advisory) Henry Willcocks (Corporate Broking)
| +44 (0)20 7408 4090 |
Tennyson Securities (Joint Broker) Peter Krens
| +44 (0)20 3368 3554 |
The full Group Annual Report and Financial Statements will be sent to shareholders later today and is available at www.brandshield.com.
The annual general meeting will be held at the offices of Edwin Coe LLP, 2 Stone Buildings, Lincoln's Inn, London, WC2A 3TH on 26 July 2022 at 1 pm. The Notice of AGM and Notice of Availability will be available at www.brandshield.com.
Extracts from the Annual Report are set out below:
Chairman's Statement
Introduction
BrandShield Systems Plc. ("BrandShield", "The Company") is one of the leading cyber security companies that provides brand oriented digital risk protection. The Company specialises in the monitoring, detection and removal of online threats such as phishing attempts, scams, impersonation, fraud, counterfeit products and trademark infringements. The business was established to revolutionise the way companies can protect their digital assets outside their security perimeter. Ever since launch, BrandShield has introduced ground-breaking innovative technologies for online brand protection powered by artificial intelligence ("AI"), machine learning and big data analysis to provide the most automated and relevant solutions for the 21st century.
During the period, the Group delivered revenues of USD $4.13m, up 59% from USD $2.6m in 2020, driven by strong customer traction across a number of key industries. The business generated an expected loss of USD $5.28m, (2020: USD $2.84m), which reflects the growth phase the Company is currently undergoing.
Our focus has been entirely centred on the expansion of BrandShield's underlying client base and the growth of the Annual Recurring Revenue ("ARR") from those clients, a key performance indicator. This has been achieved primarily through the application of funds into the sales and marketing functions within the Company. We have also hired 20 additional employees, including sales directors in the US and UK, to accelerate client growth in those regions. The Company has also hired a sales director with the primary responsibility of developing partnership distribution channels to scale the client base.
The ARR as at year end stood at $5.22m, a 59% increase from 2020 ($3.28m) and continues the very strong growth trend. That strong growth trend has continued into 2022 with the May ARR figure standing at $6.3m (unaudited), a 66.7% increase in the ARR relative to May 2021. I am pleased to report that the client numbers increased significantly in 2021 from 77 to 130, fuelled by additional investment in the sales and marketing functions. Given a very strong Life Time Value to Customer Acquisition Cost ("LTV to CAC") ratio, the Board has been clear in its desire for the Company to continue to focus on aggressive growth rather than profitability at this stage. BrandShield offers a superior product in a largely unserved market and, therefore, the priority must be on marketplace consolidation and achieving a leading position in the online brand protection competitive environment.
In addition, BrandShield has minority interests in other assets, inherited as a result of the Reverse Takeover ("RTO") transaction conducted with Two Shields Investments Plc in December 2020. These include holdings in WeShop and legacy mining assets, namely Kalahari Key Mineral Exploitation Company (Pty) Ltd, Leopard Lithium Pty Ltd and International Geosciences Limited ("IGS"). Each of these assets are considered non-core and we remain focused on the orderly disposal of these legacy investments where value can be realised for our shareholders.
BrandShield
BrandShield is a fast-growing provider of cyber solutions, delivering an end-to-end brand oriented digital risk protection solution to its global customer base. Its software protects customers from the financial costs and reputational damage caused by an increasing number of online threats including phishing, social phishing, impersonation, and sale of counterfeit goods. Unlike traditional solutions, BrandShield's Software as a Service ("SaaS") delivered software operates outside of an organisation's perimeter and therefore requires no integration. BrandShield's highly developed software works by detecting potential threats, analysing them, prioritising them and then taking them down. BrandShield has developed a suite of proprietary AI-powered software that largely automates the analysis and prioritisation of online fraud cases. The technology uses big data and algorithms to find networks of fraudulent online activity and clusters of counterfeiters.
BrandShield's software monitors millions of datapoints across many types of online platforms including websites, marketplaces, social media, mobile apps and Pay Per Click ads. The AI and machine learning nature of the software means that it is continually improving as it adds new datapoints and identifies new types of threats. In response to customer demand, BrandShield established its own in-house online hunting and enforcement team consisting mostly of qualified lawyers, with particular experience in IP law. The service is customised to the requirements of BrandShield's customers and experiences high success rates.
Strategy
The Board's strategic priority, as outlined in our previous annual report published in June 2021, was to drive the continued and rapid expansion of BrandShield's offering globally. Furthermore, this was to be achieved through the acquisition of clients from a variety of sectors through innovative marketing activities. As highlighted above, the number of clients increased from 77 at end December 2020 to 130 at end December 2021, representing a significant period of growth. The associated ARR figure increased from $3.28m for 2020 to $5.22m, a 59% increase year on year. New clients have been gained from a variety of sectors including pharmaceutical, financial, crypto, e-commerce, fashion and celebrity brand merchandising. That growth trend has continued through the start of 2022 with the May 2022 ARR standing at $6.3m.
The Company remained well positioned to react to the unique challenges posed by the Covid-19 pandemic and its aftermath. It had already invested in its online marketing processes which assisted in the strong growth of our client base. Sales cycles became shorter, particularly from small and medium sized clients, some of which signed annually recurring subscription contracts within a matter of days from the initial contact.
The successes of 2021 have validated the existing strategy and the focus remains very much on expanding our client base and growing our associated ARR through 2022. The additional funding secured in 2022 will assist in this endeavour.
In line with our stated strategy, the Board also remains focused on the orderly disposal of legacy assets held. There have been significant developments in some of these holdings which we believe brings the realisation of the value contained closer to fruition.
Outlook
The Group is looking forward to the continuing rapid expansion of BrandShield as a leading brand orientated digital risk protection company that is deployed globally. The increasing awareness of cyber related crimes and other threats to brands is leading to an acceptance that external threat prevention and eradication is an essential capability that every company must have, in the same way that protecting internal systems is viewed.
In January 2022, the Company completed a £1,500,000 raise of gross investment funds to continue to execute the strategy of aggressively targeting client and ARR growth. In May, the Company raised an additional £1,000,000 from William Currie Investments and Sir Terry Leahy.
This investment will allow BrandShield to expand its marketing and sales efforts and to continue to drive ARR forwards. The platform is built to scale and, therefore, a focus on the top line and customer conversion continues to be the over-riding priority for 2022.
Azriel Moscovici - Chairman
29 June 2022
WeShop Ltd
WeShop is an innovative, digital social network platform focused on the rapidly growing and highly valuable social e-commerce sector forecast to become a US$350 billion market over the mid-term. WeShop's digital platform is designed to enhance online shopping experiences by combining social media's assets of reviews, likes and shares with an engaging retail e-commerce offering, specifically tailored to the individual user. Users benefit from gaining access to thousands of brands and millions of products on one platform plus a two-way sharing of ideas with friends to participate in a rewards system; brands/retailers benefit from increased sales and awareness.
BrandShield holds 508,508 shares in WeShop Limited. This represents around 10.5% of the currently issued share capital in WeShop Limited. Should a £9m convertible loan note in WeShop Limited convert then the Company's holding would reduce to around 5.3%. WeShop Holdings Limted is currently trading on the JP Jenkins matched bargain trading platform with most recent trades being at £3.50 per share. Taking this share price then the Net Asset Value of WeShop Limited would be £116m and the potential NAV per share would be £24.05 for currently issued shares or £12.09 for shares issued following conversion of the CLNs. The value of BrandShield's holding could be derived at £12.2m or £6.2m respectively in those scenarios, however the Board does not believe that it is prudent to attach such a valuation at this stage given the relatively small trading volume of WeShop Holdings on JP Jenkins, the fact that the WeShop app has not been fully launched yet and the fact that there are likely to be some taxation liabilities and administrative costs associated with WeShop Limited which will be deducted from any shares issued to underlying shareholders in specie. The lock in period to May 2023 would also require a discount to be applied to any derived valuation. As such the Board has continued to hold the value of the investment in WeShop Limited at cost, that being $4,112,107.
Other Investments
BrandShield also holds minority interests in some legacy mining focused assets. These were impaired in the previous year's accounts to an aggregate value of £250,000. Despite positive developments in all of these investments the Board feels it prudent to retain this valuation. Further details of these investments can be found in Note 19 to these accounts.
Financials
Revenues for FY2021 increased 59% to $4.13m, compared to FY2020 $2.6m, with the Group reporting a loss for the period of $5.28m (FY2020: loss of $2.84m), which was in-line with management's expectations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
|
| 31 December 2021 |
| 31 December 2020 (*) |
|
| Note | $ |
| $ |
|
| |||||
Revenue from contracts with customers | 5 |
4,127,247 |
| 2,589,370 |
|
Cost of sales | (1,864,512) | (992,083) | |||
Gross profit | 2,262,735 |
| 1,597,287 |
| |
Research and Development expenses | 7 | (2,721,553) | (1,423,287) | ||
Sales and Marketing expenses | 7 | (2,950,617) | (1,260,516) | ||
Operating expenses | 7 | (2,818,102) | (1,714,074) | ||
(8,490,272) | (4,397,877) | ||||
Operating loss |
| (6,227,537) |
| (2,800,590) |
|
| |||||
Depreciation | (42,464) | (9,454) | |||
Net finance (expense)/ income | 11 | (33,372) | 126,232 | ||
Reverse acquisition expense | 4 | - | (612,294) | ||
Loss before income tax |
| (6,303,373) |
| (3,296,106) |
|
| |||||
Income tax expense | 12 | - | - | ||
| |||||
Loss from continuing operations attributable to owners |
| (6,303,373) |
| (3,296,106) |
|
Other comprehensive income: |
|
|
|
|
|
Items that will or may be reclassified to profit or loss: |
|
|
|
|
|
Exchange differences on translation |
| 1,023,680 | 451,756 |
| |
Total comprehensive loss attributable to owners |
| (5,279,693) |
| (2,844,350) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share attributable to owners | 13 | (0.05) |
| (0.08) |
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
31 December 2021 |
| 31 December 2020 | ||
| Note | $ |
| $ |
NON-CURRENT ASSETS |
| |||
Property, plant and equipment | 14 | 47,839 | 35,872 | |
Financial assets at fair value through profit or loss | 15 | 4,112,107 | 4,153,602 | |
4,159,946 | 4,189,474 | |||
CURRENT ASSETS |
| |||
Trade and other receivables | 16 | 825,066 | 465,911 | |
Financial assets at fair value through profit or loss | 17 | 20,534 | 20,741 | |
Other financial assets | 16,218 | 18,373 | ||
Cash and cash equivalents | 18 | 1,194,275 | 3,198,525 | |
Restricted cash | 191,770 | - | ||
Assets classified as held for sale | 19 | 337,870 | 341,279 | |
2,585,733 | 4,044,829 | |||
TOTAL ASSETS |
| 6,745,679 | 8,234,303 | |
CURRENT LIABILITIES |
| |||
Short term loan and bank overdraft |
| 1,626,357 | - | |
Trade and other payables | 24 | 2,807,924 | 1,557,587 | |
|
| 4,434,281 | 1,557,587 | |
NON-CURRENT LIABILITIES |
| |||
Convertible loans | 25 | - | - | |
Other payables | 32,230 | 275,756 | ||
|
| 32,230 | 275,756 | |
TOTAL LIABILITIES |
| 4,466,511 | 1,833,343 | |
NET ASSETS |
| 2,279,168 | 6,400,960 | |
|
| |||
EQUITY |
| |||
Share capital | 22 | 9,299,228 | 9,246,267 | |
Share premium | 22 | 27,686,289 | 27,353,294 | |
Reverse acquisition reserve | 4 | (20,653,597) | (20,653,597) | |
Other reserves | 23 | 4,340,773 | 3,101,442 | |
Retained earnings | (18,393,526) | (12,646,446) | ||
TOTAL EQUITY | 2,279,168 | 6,400,960 |
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
31 December 2021 |
| 31 December 2020 | ||
| Note | $ |
| $ |
ASSETS |
| |||
NON-CURRENT ASSETS |
| |||
Financial assets at fair value through profit or loss | 15 | 4,112,107 | 4,153,602 | |
Investment in subsidiary | 20 | 25,772,709 | 26,032,781 | |
Property, plant and equipment | 2,072 | - | ||
29,886,888 | 30,186,383 | |||
CURRENT ASSETS |
| |||
Other receivables and prepayments | 16 | 215,827 | 12,573 | |
Loans to related parties | 21 | 216,240 | 208,022 | |
Financial assets at fair value through profit or loss | 17 | 20,534 | 20,741 | |
Other financial assets | 16,218 | 18,372 | ||
Cash and cash equivalents | 18 | 68,721 | 327,034 | |
Assets classified as held for sale | 19 | 337,870 | 341,279 | |
875,410 | 928,021 | |||
TOTAL ASSETS |
| 30,762,298 | 31,114,404 | |
EQUITY |
| |||
Share capital | 22 | 9,299,228 | 9,246,267 | |
Share premium | 22 | 27,686,289 | 27,353,294 | |
Other reserves | 23 | 3,863,028 | 3,949,949 | |
Retained earnings | (10,257,078) | (9,586,843) | ||
TOTAL EQUITY |
| 30,591,467 | 30,962,667 | |
CURRENT LIABLILITIES |
| |||
Trade and other payables | 24 | 170,831 | 151,737 | |
TOTAL LIABILITIES |
| 170,831 | 151,737 | |
TOTAL EQUITY AND LIABILITIES |
| 30,762,298 | 31,114,404 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
| |||||||||
Share capital | Share premium | Reverse acquisition reserve | Other reserves | Retained earnings | Total equity |
| |||
$ | $ | $ | $ | $ | $ |
| |||
Balance at 1 January 2020 | 678 | 5,859,765 | - | 921,982 | (9,350,340) | (2,567,915) | |||
Loss for the year | - | - | - | - | (3,296,106) | (3,296,106) | |||
Other comprehensive income | |||||||||
Exchange differences on translation | - | - | - | 451,756 | - | 451,756 | |||
Total comprehensive income for the year | - | - | - | 451,756 | (3,296,106) | (2,844,350) | |||
Conversion of loans | 187 |
3,054,050 | - | (170,724) | - | 2,883,513 | |||
Transfer to reverse acquisition reserve | (865) | (8,913,815) | 8,914,680 | - | - | - | |||
Recognition of BrandShield Systems PLC equity at reverse acquisition | 8,155,038 | 7,197,504 | (29,568,277) | 404,230 | - | (13,811,505) | |||
Issue of shares on acquisition of subsidiary | 877,175 |
16,666,329 | - | - | - | 17,543,504 | |||
Issue of share capital | 214,054 |
3,868,362 | - | - | - | 4,082,416 | |||
Fair value of broker warrants | - | (386,388) | - | 386,388 | - | - |
| ||
Grant of warrants and options | - | - | - | 963,693 | - | 963,693 | |||
Expiry/cancellation of warrants | - | 7,487 | - | (7,487) | - | - | |||
Exchange differences on translation | - | - | - | 151,604 | - | 151,604 | |||
Total transactions with owners, recognised directly in equity | 9,245,589 | 21,493,529 | (20,653,597) | 1,727,704 | - | 11,813,225 | |||
Balance at 31 December 2020 | 9,246,267 | 27,353,294 | (20,653,597) | 3,101,442 | (12,646,446) | 6,400,960 | |||
Loss for the year | - | - | - | - | (6,303,373) | (6,303,373) | |||
Exchange differences on translation | - | - | - | 1,023,680 | - | 1,023,680 | |||
Total comprehensive income for the year | - | - | - | 1,023,680 | (6,303,373) | (5,279,693) | |||
Exercise of options | (648,132) | 648,132 | - | ||||||
Expiry of options | (1,034,160) | 1,034,160 | - | ||||||
Share based payments | 1,897,944 | 1,897,944 | |||||||
Issue of share capital | 52,961 |
332,995 | - | - | - | 385,956 | |||
Balance at 31 December 2021 | 9,299,228 | 27,686,289 | (20,653,597) | 4,340,774 | (18,393,526) | 2,279,168 |
| ||
Share capital | Share premium | Other reserves | Retained earnings | Total equity |
| |
$ | $ | $ | $ | $ |
| |
| ||||||
Balance at 1 April 2020 | 8,155,038 | 7,197,504 | 1,234,088 | (8,492,270) | 8,094,360 | |
Loss for the period | - | - | - | (1,094,573) | (1,094,573) | |
Other comprehensive income | ||||||
Exchange differences on translation | - | - | 1,373,267 | - | 1,373,267 | |
Total comprehensive income for the year | - | - | 1,373,267 | (1,094,573) | 278,694 | |
Issue of share capital for acquisition of subsidiary | 877,175 | 16,666,329 | - | - | 17,543,504 | |
Issue of share capital | 214,054 | 4,067,031 | - | - | 4,281,085 | |
Share issue costs | - | (198,669) | - | - | (198,669) | |
Share based payments | - | - | 963,693 | 963,693 | ||
Grant of warrants and options | - | (386,388) | 386,388 | - | - |
|
Expiry/cancellation of warrants | - | 7,487 | (7,487) | - | - | |
Total transactions with owners, recognised directly in equity | 1,091,229 | 20,155,790 | 1,342,594 | - | 22,589,613 | |
| ||||||
Balance at 31 December 2020 | 9,246,267 | 27,353,294 | 3,949,949 | (9,586,843) | 30,962,667 | |
Loss for the year | - | - | (2,352,527) | (2,352,527) | ||
Exchange differences on translation | - | - | (302,573) | (302,573) | ||
Total comprehensive income for the year | - | - | (302,573) | (2,352,527) | (2,655,100) | |
Exercise of options | (648,132) | 648,132 | - | |||
Expiry of options | (1,034,160) | 1,034,160 | - | |||
Issue of share capital | 52,961 |
332,995 | - | - | 385,956 | |
Share based payments | - | - | 1,897,944 | - | 1,897,944 | |
Balance at 31 December 2021 | 9,299,228 | 27,686,289 | 3,863,028 | (10,257,078) | 30,591,467 |
|
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
|
| Year ended 31 December 2021 |
| Year ended 31 December 2020 |
| Note | $ |
| $ |
Cash flows from operating activities | ||||
Loss for the year | (6,303,373) | (3,296,106) | ||
Adjustments for: |
|
|
|
|
Depreciation | 14 | 42,464 | 9,454 | |
Share based payment expense | 27 | 1,897,944) | 945,421 | |
Reverse acquisition expense | 4 | - | 612,294 | |
Net finance expense | 11 | - | (856) | |
Foreign exchange on operations | (56,515) | - | ||
(Increase) / Decrease in trade and other receivables | (550,924) | 232,315 | ||
Increase / (Decrease) in trade and other payables | 1,006,810 | (672,113) | ||
Net cash outflow from operating activities | (3,963,594) |
| (2,169,591) | |
| ||||
Investing activities | ||||
Cash acquired on acquisition | 4 | - | 254,673 | |
Purchase of property, plant and equipment | 14 | (52,970) | (16,201) | |
Net cash (outflow) / inflow/ from investing activities | (52,970) |
| 238,472 | |
Financing activities |
|
|
| |
Proceeds from issue of exercising warrants and options | 25 | 385,957 | - | |
Proceeds from issue of ordinary shares | 22 | - | 4,120,545 | |
Share issue costs | - | (198,669) | ||
Proceeds from loans and borrowings | 1,626,357 | 893,267 | ||
Interest paid | - | - | ||
Net cash inflow from financing activities | 2,012,314 |
| 4,815,143 | |
Net (Decrease) / Increase in cash and cash equivalents | (2,004,250) |
| 2,884,024 | |
Cash and cash equivalents at beginning of year | 3,198,525 |
| 360,641 | |
Foreign exchange differences on cash | - | (46,140) | ||
Cash and cash equivalents at end of year | 18 | 1,194,275 |
| 3,198,525 |
Period ended 31 December 2021 |
| Period ended 31 December 2020 | ||
| Note | $ |
| $ |
Cash flows from operating activities |
|
|
| |
Loss before income tax | (2,352,527) | (1,094,573) | ||
Adjustment for: |
|
| ||
Finance income | - | (33,514) | ||
Gain on disposal of financial assets at fair value through profit or loss | 15 | - | (37,197) | |
Fair value adjustment of financial assets | - | 100,814 | ||
Share based payments | 27 | 1,897,944 | 64,192 | |
Foreign exchange on operations | 4,768 | - | ||
(Increase) / Decrease in trade and other receivables | (203,256) | 16,157 | ||
Increase in trade and other payables | 10,873 | 71,676 | ||
Net cash outflow from operating activities |
| (642,198) | (912,445) | |
Cash flows from investing activities |
|
| ||
Proceeds from the sale of financial assets at fair value through profit or loss | - | 80,091 | ||
Proceeds from the sale of other financial assets | - | 336,047 | ||
Purchase of property, plant and equipment | (2,072) | - | ||
Loans to related parties | - | (3,733,860) | ||
Net cash outflow from investing activities |
| (2,072) | (3,317,722) | |
Cash flows from financing activities |
|
| ||
Proceeds from issue of exercising warrants and options | 22 | 385,957 | 4,281,085 | |
Share issue expenses paid | 22 | - | (198,669) | |
Proceeds from exercise of warrants | 22 | - | - | |
Interest received | - | 8 | ||
Net cash inflow from financing activities |
| 385,957 | 4,082,424 | |
Net decrease in cash and cash equivalents |
| (258,313) | (147,743) | |
Cash and cash equivalents at beginning of year |
| 327,034 |
| 359,034 |
Foreign exchange differences on cash | - | 115,743 | ||
Cash and cash equivalents at end of year | 18 | 68,721 |
| 327,034 |
There were no significant non-cash transactions in the year.
Earnings per Share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.
In accordance with IAS 33 the share options and warrants in issue do not have a dilutive impact on the earnings per share for the year ended 31 December 2021 and the year ended 31 December 2020. The total number of potentially dilutive securities are 36,786,285 (2020*:20,551,307).
The weighted average number of shares is adjusted for the impact of the reverse acquisition as follows:
- Prior to the reverse takeover, the number of shares is based on BrandShield Limited, adjusted using the share exchange ratio arising on the reverse takeover; and
- From the date of the reverse takeover, the number of shares is based on the Company
On January 2022, the company issued 10,714,286 ordinary shares at 1pence per share by way of placement raising £1.500,000.
On May 2022, an additional 12,500,000 Ordinary Shares at 1 pence per share were issued by placement raising of £1,000,000.
Reconciliations are set out below:
31 December 2021 | |||||
Weighted | |||||
average | Per-share | ||||
Earnings | number of | amount | |||
$ | shares | $ | |||
Basic and Diluted EPS | (6,303,373) | 116,812,529 | (0.05) | ||
| |||||
| |||||
| 31 December 2020 | ||||
| Weighted | ||||
| average | Per-share | |||
| Earnings | number of | amount | ||
| $ | shares | $ | ||
| |||||
Basic and Diluted EPS | (3,296,106) | 41,839,773 | (0.08) |
*prior year numbers restated following share consolidation (200 existing shares consolidated to 1 new share)
NOTES TO THE FINANCIAL STATEMENTS
The notes to the Financial Statement are available in full in the Group Annual Report and Financial Statements which will be available shortly on the Company website: www.brandshield.com
Basis of preparation
The consolidated financial statements of BrandShield Systems Plc have been prepared in accordance with UK-adopted international accounting standards in accordance with the requirements of the Companies Act 2006
The preparation of 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 areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
The financial statements present the results for the Group for the year ended 31 December 2021. The comparative period is for the year to 31 December 2020 and are the numbers for the BrandShield Limited, being the trading Company. The Parent Company financial statements comprise the twelve months ended 31 December 2021. The comparative period for the Parent Company is the year nine months ended 31 December 2020.
The principal accounting policies are set out below and have, unless otherwise stated, been applied consistently in the financial statements. Following completion of the reverse takeover, the Group's presentation currency has been changed from Pounds Sterling to US Dollars and the consolidated financial statements are prepared in US Dollars. The change in presentation currency is to bring the Group into line with the subsidiary's presentation currency. The functional currency of the parent and the subsidiary is Pounds Sterling and New Israeli Shekel respectively.
Going concern
The financial statements have been prepared on the assumption that the Group will continue as a 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. In assessing whether the going concern assumption is appropriate, the Directors take into account all available information for the foreseeable future, in particular for the twelve months from the date of approval of the financial statements.
Following the review of ongoing performance and cash flows, the Directors have a reasonable expectation that the Group has adequate resources to continue operational existence for the foreseeable future.
In January 2022 the Company completed a £1,500,000 raise of gross investment funds to continue to execute the strategy of aggressively targeting client and ARR growth. This was followed by an additional £1,000,000, both were subscribed for by existing and new investors.
Given the pace of growth within the Company and the Board's stated strategy of continuing to aggressively target client conversion and ARR growth, it is likely that the Company will engage in further fundraising activity within the next accounting period. This will be tailored to opportunities to expand as they present themselves. The Board is confident that access to such funding will be available from recent strategic investors should that need arise. As such, the Directors are confident that this funding will continue and consider that the Group will have access to adequate resources to meet operational requirements for at least 12 months from the date of approval of these financial statements. On this basis, the Directors have formed a judgement, at the time of approving the Financial Statements, that there is a reasonable expectation that the Group has access to adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing the Financial Statements.