CLP.L Regulatory News (CLP)

18 October 2012

Brainspark plc

("Brainspark" or "the Company")

FINAL AUDITED RESULTS AND RESTORATION

For the Year Ended 31 December 2011

Brainspark plc (AIM: BSP), a fast growing international investment company, announces its final audited results for the year ended 31 December 2011.

The Company is today also announcing its interim results for the six months to 30 June 2012, which have been reviewed and approved by the Company's auditor. As a result of publication of the audited results and the interim results, the suspension of trading in the Company's shares on AIM is expected to be lifted and the shares are expected to resume trading at 3.30pm today.

Proposed Placing

The Company intends to raise additional funding through a placing of up to 70,000,000 at 4p per share to raise £2.8 million and has received offers to participate to the Placing from, among others, Mr Luke Johnson and two directors of the Company, including Alfredo Villa.

HIGHLIGHTS

·; NAV per share, as at 31 December 2011 of 29.6 pence

·; Reduction of loss before tax by 19.2% to £6.7m (2010: £8.3m)

The Board apologises for the prolonged delay in publishing these accounts, but certain factors, including the appointment of Welbeck Associates as new auditor, have allowed the Group to undertake a full audit of the Company results over the past two years. This work has been very detailed due to the many investments held by the Company and has required much translation work from Italian into English. The Board now believes the Company is in a position, both operationally and with regards to its new corporate governance measures now in place, to assure shareholders that future accounts will be posted before the appointed deadlines.

Finally, the 2012 financial reports will show a consolidated set of accounts for the first time, reflecting the turnover and profitability of the different companies which are more than 50 per cent owned by Brainspark.

Below is a summary of financial positions for the three key investee companies, for the 12 months to 30 June 2012, representing a 100 per cent contribution:

Mediapolis SpA and Bibop SpA have not been included as the Company is currently in negotiations in relation to their sale which are expected to be completed by the end of the year. The financial results of Mediapolis SpA and Bibop SpA are therefore not expected to impact the Company's consolidated results going forward.

For further information please contact:

Brainspark plc +39 02 525 051

Alfredo Villa, Chairman

Westhouse Securities +44 (0) 20 7601 6100

Antonio Bossi

Jonathan Haines

Leander PR +44 (0) 7795 168 157

Christian Taylor-Wilkinson

CHAIRMAN'S STATEMENT

Financial Review

The consolidated net asset value at 31 December 2011 was £13.6 million, slightly down from £13.9 million at 31 December 2010. At 31 December 2011, Brainspark's mid-market share price of £0.265p valued the Company at approximately £12.1 million.

The Group made a loss before tax in the period of £6.7 million, compared to the loss of £8.3 million in the year ended 31 December 2010. The audited figure for 2011 is substantially lower than the loss before tax of £11.7 million which had previously been reported in the Company's unaudited preliminary results, announced on 3 July 2012, due mainly to the reduction of the impairment charge provided in the unaudited report.

During the year under review, the Company has pursued its repositioning strategy, to establish Brainspark as a focused operator in the leisure sector, with operations located around the Mediterranean.

The impairment charge for the year was £3.0 million, compared to £6.2 in the previous year to December 2010.

With an outstanding fully diluted number of shares at 31 December 2011 of 45.8 million, the Equity Value per share, after loss and impairment charge was 29.6 pence per share (2010: 101.5 pence per share).

Operational Review

2011 was a year during which Brainspark consolidated and simplified its strategy in line with its existing investing policy. The Company has shifted direction from being an opportunistic investor across different sectors with a number of minority stakes, to becoming an investor in medium sized operational companies, mainly in the leisure business in the Mediterranean area.

To achieve this change in direction, Brainspark has sold some of its minority stakes and has increased its holdings in those companies that the Board wants to effect control over and manage directly. In line with its investing policy, the Company seeks to identify and acquire controlling stakes in companies focused in the leisure and media sectors; in addition to the Mediapolis project, current investments include: Ora Hotel Group S.p.A., Sipiem S.p.A. (Ondaland) and You Can Group S.r.l. (Sosushi).

This strategy has started to come to fruition. Before the year end the Company is expecting to complete all its contracted acquisitions, and to buy additional controlling stakes, if the Board considers them appropriate to the ongoing strategy of the Company, within its investing policy. The collateral needed to bring this strategy into full effect is expected to come from additional equity Placings and the sale of Mediapolis, which the Board hopes it will finalise in 2012.

Investment Portfolio as at 30 June 2012

Post Balance Sheet Events

The following events have taken place:

On 4 January 2012 the company announced that a large bond holder agreed to convert its holding of £3.5million, plus accrued interest of £449,000 (a total of £3,949,000), into 11 million Brainspark new ordinary shares, at a price of 36 pence per share, a 38 per cent. premium to the current share price.

On 23 February 2012 the Company announced that it had placed 13,125,000 new ordinary shares of 2.5p at a price of between 15 to 16 pence per share raising a total of approximately £2 million, before costs, via institutional investors and certain Directors of the Company. The proceeds will be used to fund new investments as well as for working capital purposes.

On 23 March 2012 the Company announced that further to the announcements of 28 June 2011, 19 October 2011, 8 November 2011 and 4 January 2012, the Company had issued a total of 29,690,000 new ordinary shares of 2.5p each to the vendors of You Can Group srl (the holding company for the Sosushi restaurant chain), ORH S.p.A (the holding company for the Ora Hotel Group) and to Regilco Srl (to purchase 10 villas on the Liscia di Vacca bay in Sardinia) and to a holder of Brainspark bonds. In addition, the Company announced that it has agreed with a bond holder to convert bonds worth £2,824,800 including accrued interest into 8,070,857 new Ordinary Shares at 35 pence per share. The Company also agreed to issue 150,000 new Ordinary Shares to a consultant to the Company in lieu of fees. In addition the Company had agreed with Argentaria srl to reverse the acquisition of an office building in Milan and will not therefore issue the 5,000,000 new Ordinary Shares referred to in the announcement of 8 November 2011.

On 3 April 2012 the Company announced that it had placed 5,750,000 new ordinary shares of 2.5p at a price of 10 pence per share raising a total of GBP 575,000 before costs, via institutional investors and a Director of the Company. The proceeds will be used for working capital purposes. Alfredo Villa, Chief Executive of the Company subscribed for a further 1,500,000 shares in the placing.

On 13 April 2012 the Company announced that it had allotted 3,440,000 new Ordinary Shares of 2.5p each to the vendors of You Can Group srl as consideration for the acquisition of SoSushi and 3,440,000 to You Can Group srl as increase in capital in You Can Group srl. In addition, the company has also allotted 6,306,667 new Ordinary Shares of 2.5p each to the vendors of Sipiem SpA.

On 4 May 2012 the Company announced announce the acquisition of 10 per cent. of Sixlove Group SpA for a total consideration of EUR 690,000, to be paid as follows: EUR 150,000 in cash, on or before 15 June 2012 and EUR 540,000 in exchange for 3,000,000 new Ordinary shares to be issued at 15 pence per share.

On 15 June 2012 the Company announced the acquisition of a 50.1%. equity interest in You Can Group S.r.l. was formally completed. The total consideration is EUR 751,500 (approx. GBP 608,715), which Brainspark has agreed to settle as follows:

(i) EUR 4,500 in cash, and

(ii) EUR 747,000 through the allocation of already-issued 5,190,000 Brainspark new ordinary shares, at an average price of 11.66 pence per share.

Brainspark also committed to contribute up to EUR 600,000 (approx. GBP 486,000) in development capital to You Can Group before 31 December 2012; out of this amount EUR 150,000 was paid on 23 March 2012 through the issue of 3,440,000 new ordinary shares in the Company to You Can Group. The residual funding commitment is therefore EUR 450,000.

On 2 August 2012 the Company announced that it had completed the first stage of its investment in Sipiem SpA ("Sipiem"), the construction and leisure company in Biella, Italy. Sipiem owns 66% of Ondaland, a reduction from the previously announced 90% as a result of a EUR 7 million investment from other investors. The EUR 7 million investment was secured to fund the construction of a new indoor theme park, "La Terra d'Endora", situated within the Ondaland complex. It is expected that this new attraction will be opened in time for Easter 2013 and will enable Ondaland to welcome visitors 12 months a year.

The initial investment in Sipiem has been made through the swap of the Company's 20% shareholding in Ondaland, as well as EUR 1.9 million, which has been settled through EUR 650,000 in cash, which was paid on 27 July 2012 and 6,306,667 ordinary shares in the Company, which were issued on 13 April 2012. As a result of the acquisition, Alfredo Villa has been appointed as a director of Sipiem. In addition, Brainspark has signed an agreement to subscribe for an additional 11 per cent. of Sipiem shares, for an amount of EUR 800,000 to be paid on or before 31 December 2012.

On 28 August, the Company issued 4,000,000 new ordinary shares of 2.5p at a price of 5 pence per share in relation to an investment in London based corporate broking firm, Ascend Capital plc. Brainspark acquired a 9.9 per cent. holding in Ascend Capital, which successfully completed two fundraisings for Brainspark, on 23 February 2012 and 3 April 2012, totalling £2.575 million. Alfredo Villa, Executive Chairman of Brainspark, has joined the board of Ascend Capital as a Non-Executive Director.

Update on Bibop SpA

The Company is committed to divesting Bibop and as announced on 7 March 2012, Bibop signed a letter of intent to sell its Mycast video platform to a US company for USD 3 million. The board has now been informed that negotiations have not reached a conclusion due to the difficulty in applying for a US patent to fully protect the MyCast technology. Therefore the Company has today entered into an agreement with Inventia srl, giving the right to use, promote and develop the MyCast platform, implement the patents and undertake commercial use, in exchange for meeting all future development and commercial costs related to these activities.

Bibop still remains the owner of the Mycast platform and will receive the proceeds from any future sale, but will not have the cost burden related to bringing the platform up to a level where a sale can be deemed profitable. Brainspark still owns 67.12 per cent of Bibop, but will not be required to pay any costs from 1 October 2012 related to the Mycast platform, which instead will be met by Inventia.

Inventia has the right at any time to buy the Mycast platform from Bibop for a minimum price of EUR 1.5 million, or if the buyer is a third party (ie, not Inventia), then the minimum selling price is EUR 2.5 million, with a proportionate earn-out for Inventia. Inventia srl, is a company related to Cambria Coinvestment Fund, the other shareholder of Bibop.

Board Appointments and key staff

On 29 February 2012 Justin Drummond was appointed as Executive Chairman but due to other interests and commitments resigned on 16 April 2012. In addition, Haresh Kanabar and Alessandro Malacart also resigned on 16 April 2012 to pursue other interests. Gabriele Gresta resigned on 7 March 2012.

On 30 April 2012 Enrico Petocchi was appointed as Chief Financial Officer and Dominic White was appointed as Non-Executive Director.

On 14 May 2012 Cesare Suglia was appointed as Chief Executive Officer.

On 29 May 2012 Francesco Emiliani was also appointed as Non-Executive Director.

Nilesh Jagatia was appointed Head of Finance on 3 September 2012, becoming Brainspark's first UK based employee. Nilesh is responsible for working with the external auditor and finance departments of the investee companies to ensure prompt delivery of financial statements

Outlook

The Board expects to complete its majority investments in ORH SpA (Ora Hotel Group) and Sipiem SpA (Ondland AquaPark) before the end of the year. Together with YouCan Group srl (SoSushi restaurants) the Company will then have three significant, majority owned assets in the leisure and real estate sectors, with combined annual revenues of EUR 60 million.

The Company will look to invest more of its resources, including cash, where needed, into these assets to allow them to follow their own programmes for expansion. With the Italian economy expected to stagnate for the next 12 months, the Company believes it is an excellent time to take advantage of cheap real estate prices and grow the assets of each of these subsidiaries.

Annual Report and Notice of General Meeting

A copy of the audited annual report for the year ended 31 December 2011 will today be posted to shareholders and is also available from the Group's website at www.brainsparkplc.com.

The Notice of General Meeting will be posted to shareholders today and the General Meeting will be held at 11am on 28 November 2012 at 1 Grosvenor Crescent, London, SW1X 7EF.

The Company is planning to change its name to Clear Leisure Plc at the General Meeting and will ask shareholders to vote in this regard.

Alfredo Villa

Executive Chairman

18 October 2012

Group Statement of Comprehensive Income for the year ended 31 December 2011

Group Statement of Financial Position at 31 December 2011

Group Statement of Changes in Equity

For the year ended 31 December 2010

Group Statement of Changes in Equity

For the year ended 31 December 2011

Group Statement of Cash Flows

For the year ended 31 December 2011

Notes

1. General

The financial information set out herein does not constitute the Group's statutory accounts within the meaning of section 435 of the Companies Act 2006 for the year ended 31 December 2011. The statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and the associated notes for the year then ended have been extracted from the Company's financial statements does not include any statement under section 498 of the Companies Act 2006. The audited accounts will be posted to all shareholders in due course and will be available on request in due course by contacting the Company Secretary at the Company's Registered Office. 

2. Basis of preparation

The financial statements of the Company and the Group have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with IFRSs adopted by the European Union (EU) and therefore the Group financial statements comply with Article 4 of the EU IAS Regulation.

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are stated at their fair values. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies have been consistently applied to all periods presented, except where stated.

3. Going Concern

The directors are satisfied that the group has sufficient resources, even though at the balance sheet date the group had extremely little liquidity, to meet its on-going operating costs and investment funding obligations. The directors are of the opinion that operational liabilities and contractual commitments can be settled from the timely disposal of investments, should the need arise, and from on-going future anticipated rounds of debt or equity funding. Whilst there are inherent uncertainties in relation to future events, and therefore no certainty over the outcome of the matters described, the directors consider that, based upon financial projections and dependent on the success of their efforts to complete these activities, the Company and the Group will be going concerns for twelve months from the date of approval of these financial statements. As a consequence, these financial statements are prepared on a going concern basis.

The projections for the year ended 31 December 2013 do not include any receipts from the sale of the investments held for sale.

4. Loss per share

The 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 period. Diluted earnings per share is computed using the same weighted average number of shares during the period adjusted for the dilutive effect of share options and convertible loans outstanding during the period.

The loss and weighted average number of shares used in the calculation are set out below:

IAS 33 requires presentation of diluted earnings per share when a company could be called upon to issue shares that would decrease earnings per share. Since it seems inappropriate that option holders and bondholders would act irrationally, no adjustment has been made to diluted earnings per share for out-of-the money options. There are no other diluting share issues, in either financial period, consequently diluted earnings per share equals basic earnings per share.

5. Called up share capital

The following shares were issued during the year:

On 7 March 2011 the Company issued 660,000 ordinary shares of 2.5p each at 37p being the investment in MobnotesS.r.l..

On 17 March 2011 the Company issued 440,000 ordinary shares of 2.5p each at 37p being the investments in Class FinanceS.r.l..

On 31 March 2011 the Company issued 2,015,000 ordinary shares of 2.5p each at 50p as further investments in MediapolisS.p.A..

On 4 April 2011 the Company issued 225,000 ordinary shares of 2.5p each at 50p to Mr Villa in lieu of his 2011 remuneration.

On 8 April 2011 the Company issued 310,000 ordinary shares of 2.5p each at 48p being the investment in Wall S.r.l..

On 26 May 2011 the Company issued 1,760,000 ordinary shares of 2.5p each at 50p being a further investment in BIBOPS.p.A..

On 28 June 2011 the Company issued 9,750,000 ordinary shares of 2.5p each at 40p being a further investment in ORH S.p.A. hotels.

During July 2011 the Company issued 8,035,856 ordinary shares of 2.5p each at 35p in respect of a bond holder converting £2.64 million of their bond into equity shares.

On 19 October 2011 the Company issued 1,750,000 ordinary shares of 2.5p each at 28p for an investment in You Can GroupS.r.l..

On 8 November 2011 the Company issued 7,150,000 ordinary shares of 2.5p each at 50p for a further investment in MediapolisS.p.A. for the acquisition of 10 villas.

6. Post balance sheet events

The following events have taken place:

On 4 January 2012 the company announced that a large bond holder agreed to convert its holding of £3.5million, plus accrued interest of £449,000 (a total of £3,949,000), into 11 million Brainspark new ordinary shares, at a price of 36 pence per share, a 38 per cent. premium to the current share price.

On 23 February 2012 the company announced that it has placed 13,125,000 new ordinary shares of 2.5p at a price of between 15 to 16 pence per share raising a total of approximately £2 million, before costs, via institutional investors and certain Directors of the Company. The proceeds will be used to fund new investments as well as for working capital purposes.

On 23 March 2012 the company agreed to issue 150,000 new Ordinary Shares to a consultant to the Company in lieu of fees at a price of 30 pence per share. In addition the company has agreed with Argentaria S.r.l. to reverse the acquisition of an office building in Milan and will not therefore issue the 5,000,000 new ordinary shares.

On 2 April 2012 the company announced that it has agreed with the vendors of You Can Group S.r.l. (the holding company of SoSushi) that cash consideration of EUR1.2 million due to it will now be satisfied by the issue of 6,880,000 new Brainspark ordinary shares at a price of 2.5 pence per share. This further investment in Sosushi will take the Company's holding from 20 per cent. to 51 per cent and it is expected to be completed on 4 April 2012.

On 3 April 2012 the company announced that it has placed 5,750,000 new ordinary shares of 2.5p at a price of 10 pence per share raising a total of £575,000 before costs, via institutional investors and a Director of the Company. The proceeds will be used to fund working capital purposes ahead of receiving funds from the sale of Mediapolis. Alfredo Villa, Chief Executive of the Company has subscribed for a further 1,500,000 shares in the placing and now has a beneficial holding of 10,029,039, representing 13.2% of the enlarged share capital.

On 13 April 2012 the company announced that the company has also allotted 6,306,667 new Ordinary Shares of 2.5p each to the vendors of Sipiem S.p.A..

On 4 May 2012 the company announced the acquisition of 10 per cent. of Sixlove Group S.p.A. for a total consideration of EUR 690,000, to be paid as follows: EUR 150,000 in cash, on or before 15 June 2012 and EUR 540,000 in exchange for 3,000,000 new Ordinary shares to be issued at 15 pence per share.

On 15 June 2012 the company announced the acquisition of a 50.1% equity interest in You Can Group S.r.l. was formally completed. The total consideration is EUR 751,500 (£608,715), which Brainspark has agreed to settle as follows:

(i) EUR 4,500 in cash, and

(ii) EUR 747,000 through the allocation of already-issued 5,190,000 Brainspark new ordinary shares to be issued at an average price of 11.66 pence per share.

On 26 June 2012 the Company announces that application has been made for admission to trading on AIM ("Admission") of 300,000 new ordinary shares of 2.5p each ("Ordinary Shares") which have been placed with Westhouse Securities at 4.67p each.

On 2 August 2012 the Company announced that it had completed the first stage of its investment in Sipiem SpA ("Sipiem"), the construction and leisure company in Biella, Italy. Sipiem owns 66% of Ondaland, a reduction from the previously announced 90% as a result of a EUR 7 million investment from other investors. The EUR 7 million investment was secured to fund the construction of a new indoor theme park, "La Terra d'Endora", situated within the Ondaland complex. It is expected that this new attraction will be opened in time for Easter 2013 and will enable Ondaland to welcome visitors 12 months a year.

The initial investment in Sipiem has been made through the swap of the Company's 20% shareholding in Ondaland, as well as EUR 1.9 million, which has been settled through EUR 650,000 in cash, which was paid on 27 July 2012 and 6,306,667 ordinary shares in the Company, which were issued on 13 April 2012. As a result of the acquisition, Alfredo Villa has been appointed as a director of Sipiem. In addition, Brainspark has signed an agreement to subscribe for an additional 11 per cent. of Sipiem shares, for an amount of EUR 800,000 to be paid on or before 31 December 2012. 

On 28 August, the Company issued 4,000,000 new ordinary shares of 2.5p at a price of 5 pence per share in relation to an investment in London based corporate broking firm, Ascend Capital plc. Brainspark acquired a 9.9 per cent. holding in Ascend Capital, which successfully completed two fundraisings for Brainspark, on 23 February 2012 and 3 April 2012, totalling £2.575 million. Alfredo Villa, Executive Chairman of Brainspark, has joined the board of Ascend Capital as a Non-Executive Director.

-ends-