REG - Brandshield Systems - Final Results
30/06/2022 17:15
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RNS Number : 9042Q Brandshield Systems PLC 30 June 2022
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 +44 (0)20 3143 8300
Yoav Keren, CEO
Spark Advisory Partners Limited (Nominated Adviser) +44 (0)20 3368 3554
Neil Baldwin / Andrew Emmott / James Keeshan
Shore Capital (Joint Broker) +44 (0)20 7408 4090
Toby Gibbs / James Thomas / Liam Zabludowicz (Corporate Advisory)
Henry Willcocks (Corporate Broking)
Tennyson Securities (Joint Broker) +44 (0)20 3368 3554
Peter Krens
The full Group Annual Report and Financial Statements will be sent to
shareholders later today and is available at www.brandshield.com
(http://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 (http://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 2,589,370
4,127,247
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 - (170,724) - 2,883,513
3,054,050
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 - - - 17,543,504
16,666,329
Issue of share capital 214,054 - - - 4,082,416
3,868,362
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 - - - 385,956
332,995
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 - - 385,956
332,995
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 - 80,091
loss
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 (http://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.
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