15 Jul 2008 16:46
FOR IMMEDIATE RELEASE 14 July 2008
BRAINSPARK PLC
("Brainspark" or the "Company")
Sale of investment
Brainspark nets profit from Easyart Holdings Ltd share and debt sale
Brainspark on 30th June has sold its 17.5% holding in Easyart Holdings Ltd (UK) 100% owner of Easyart Limited - engaged in the online sale of framed posters - along with a £300,000 loan.
Brainspark has sold 54,690 'A' ordinary shares, or 17.5% stake in Easyart and 1490 warrants for £150,000 in cash to the owners of Svenska Konstbolaget AB, being inter alia the Nordic venture capital company Verdane Capital, valuing Easyart at £857,000.
Brainspark has also sold its £300,000 loan (granted to Easyart in June 2000) for £50,000 in cash. The loan was only repayable in the event that Easyart had a valuation of £10 million.
As part of the transaction Easyart and Svenska Konstbolaget AB are merging, creating the largest group engaged in framed poster and limited edition artwork in Europe with a combined turnover of £3.5 million. In the event that, within three years of this sale of the Easyart shares, these shares are sold onto a third party, Brainspark will have the right to receive, after subtraction of £200,000, from the new purchaser, ten per cent of the proceeds of a sale made within one year, seven per cent of the proceeds of a sale made between one and two years, and four percent of a sale made between two and three years.
Brainspark plans to use the proceeds as additional working capital.
In the Brainspark accounts, the book value of Easyart is nil. The transaction will therefore generate a profit of £200,000 for the current 2008 Brainspark fiscal year. However, because of Brainspark's substantial level of carried-forward losses, the deal will not result in a tax charge. In the accounts for Easyart Holdings Limited at 31 December 2007, the net assets for Easyart were shown as £535,242, with loss on ordinary activities as £25,328.
'We are pleased about this transaction and we will use the proceeds as additional working capital and to provide funds for new investments, in particular for the international growth of the Company,' says Francesco Gardin, Chairman of Brainspark.
For enquiries, please contact:
Dennis Bailey, Brainspark plc 01628 477785
Roland Cornish, Beaumont Cornish Limited 020 7628 3396