TSI.L Regulatory News (TSI)

Two Shields Investments plc

("TSI", "Two Shields" or the "Company")

Investment into BrandShield

Two Shields Investments plc, the AIM-quoted investment company with a strategy to build a high-quality portfolio of investments in fast growing and scalable digital and technology enabled businesses, is pleased to announce that it has completed its proposed investment of US$500,000 (£388,350 at an exchange rate of £1=$1.2875)) in BrandShield Limited ("BrandShield"). TSI also has the right to invest a further $1,000,000 on the same terms under the BrandShield Option, as set out more fully in the announcement of 29 October 2019.

The investment has been made by way of subscription to a Convertible Loan Note ("CLN") in which the Company has already invested $300,000 as announced on 4 March 2019. The CLN has been extended to allow this further investment of $500,000, and to provide an option for TSI to invest up to a further $1,000,000 within 9 months of Monday 4 November 2019 (the "Closing Date").

TSI currently has a 11.34% shareholding in BrandShield in addition to the CLN subscriptions. Should TSI's $800,000 of CLN convert in to equity, TSI's holding in BrandShield will increase to approximately 16%, rising to approximately 21.5% in the event of the Company exercising its further $1,000,000 option at the same price.

As has been previously outlined, the CLN bears a coupon of 2.5% and will convert on the Maturity Date, that being the second anniversary of the Closing Date unless an accelerated conversion event occurs on an earlier date ("Accelerated Conversion Event"). An Accelerated Conversion Event shall include, inter alia, an IPO or sale of BrandShield or BrandShield undertaking a qualified fundraising round. The price at which the CLN converts into BrandShield shares will be the lower of (i) $59.54 per BrandShield share and (ii) at a 20% discount to the valuation per share at the conversion point.

TSI previously announced that BrandShield's preferred strategic trajectory would involve a public listing on a recognised Stock Exchange, preferably an AIM listing, in the early part of 2020. TSI is actively assisting BrandShield in such an undertaking and will seek to maximise the value gained to TSI shareholders should that liquidity event materialise.

BrandShield's latest accounts showed assets of 11,551,991 NIS (New Israeli Shekels) as at 31 December 2018 and a loss of 4,928,907 NIS for the period January to December 2018.

BrandShield

BrandShield was established by brand protection industry professionals with a goal to develop cutting-edge technology that will provide organisations a powerful solution to manage and protect their brand online. Backed by Israel's Innovation Authority and with an R&D centre based in Israel, the company is committed to a continuous development of a solution that meets the needs of all sizes of entities from small companies to large enterprises.

In calendar year 2018 BrandShield increased its Annual Recurring Revenue ("ARR") by 112%. This growth trend has continued strongly in 2019 with a year to date performance of approximately 50% ARR growth. Average revenue per client increased significantly in 2018 as a result of the introduction of BrandShield's new online threat hunting and social anti-phishing solutions, with 13% of the new business coming from existing customers' expansion. BrandShield has continued to win a number of high-profile global customers in 2019.

Yoav Keren, founder and CEO of BrandShield said, "Our continuing focus on Online Threat Hunting has generated excellent interest from a number of high-profile clients and potential customers throughout 2019. We have continued to acquire significant mandates from companies, many operating globally, including one of the world's largest online travel agencies. The pharmaceutical sector has also been a strong course of clients and one in which huge opportunities exist to penetrate further given the branded segmentation within and across the major players. Such clients add to the existing blue-chip customer base of customers such as Microsoft, New-Balance, Levi's and Abbott."

The additional funding provided by TSI will allow BrandShield to conduct more aggressive marketing as we seek to achieve ever more market share in the lead up to our intended public listing in 2020."

Andrew Lawley, Chairman of TSI said, "The Board is delighted to have been able to reinforce the investment in BrandShield following our recent fundraise. We see BrandShield as a pivotal value driver in the TSI portfolio and we very much look forward to assisting it reach its full potential. We endorse the management's strategy of seeking a public listing in the coming months and we will seek to continue to build our exposure to BrandShield in the anticipated build up to that event. We are hugely encouraged by the continued growth in all aspects of BrandShield, reflected through strong increases in Annual Recurring Revenue, sales pipeline size and average client deal size."

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (eu) 596/2014

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For further information please visit https://twoshields.co.uk/ or contact:

Notes to Editors:

Two Shields Investments plc, the AIM-quoted investment company with a strategy to build a portfolio of high-quality investments in fast growing, scalable digital and technology enabled businesses, including those in the cyber security, e-commerce services and consumer sectors. The Company has appointed an experienced Board of Directors with a proven pedigree in the origination, acquisition, development & sale of projects and creating value for shareholders. The investment mandate covers unquoted and quoted businesses, as well as direct project investment. Where appropriate the Board will apply its extensive combined experience to directly support investee businesses achieve their growth potential.