Half year results for 6 months ended 30 June 2023
19 September 2023
BrandShield Systems plc
("BrandShield," the "Company," or the "Group")
Half year results for the six months ended 30 June 2023
Annualised Recurring Revenue, up 45% in H1 2023, continues to underpin operational progress
BrandShield Systems plc (AIM: BRSD), a leading provider of cybersecurity solutions for brand oriented digital risk protection ("DRP"), announces its results for the six months ended 30 June 2023 ('H1 2023').
Financial highlights
· H1 2023 Annualised Recurring Revenue1 ("ARR") up 46% to $9.71m (H1 2022: $6.67m)
· Positive momentum continued with the August 2023 ARR figure reaching $9.85m, up 36% vs. $7.26m in August 2022.
· Delivered revenue growth of 56.3% to $4.42m in H1 2023 (H1 2022: $2.83m)
· Loss for the period decreased by 53% to $2.05m in H1 2023 (H1 2022: $4.37m)
· As part of operational improvements Gross profit increased from 48% in H1 2022 and 54% in December 2022 to 68% in H1 2023
· Cash of $1.35m at period end (31 Dec 2022: $2.60m)
1Annualised Recurring Revenue is a non-GAAP measure and an industry specific measure
Operational highlights
· Strong new business momentum achieved in the first half of 2023, with the Company securing 45 new customer wins in the period to take its total number of customers to 209. This growth continued post-period end, and as at end of August 2023, BrandShield services 214 customers
· Ongoing sales and marketing initiatives continues to support the growth in the Company's customer footprint, expanding the Group's presence across in key growth sectors such as pharmaceutical, retail, ecommerce and finance
· BrandShield consolidated its position as one of the leading Digital Risk Protection ("DRP") Provider
o BrandShield named the third best DRP service provider globally in a 2022 review by Frost & Sullivan ("F&S") the global business consultancy group.
o BrandShield recognised with the 2023 Global Digital Risk Protection New Product Innovation and Best Practices Award by F&S
Post period-end and Outlook
· The Company has made a solid start to H2 2023 and looks forward to reporting another period of both operational and financial progress
· Recent focus on reducing cash burn is having a marked impact on gross margins as the Company continues to grow towards becoming cash flow positive
Yoav Keren, Chief Executive Officer of BrandShield, commented:
"I am pleased to report another solid six months of trading from BrandShield, in which we continue to deliver record levels of ARR, up 46% to $9.7 million p.a., underpinning our confidence in the business.
Our ongoing sales and marketing efforts, alongside the growing reputation that BrandShield continues to build across the industry for innovation and product excellence, as highlighted by Frost & Sullivan earlier in the year, continues to drive customer growth.
We have made a solid start to H2 2023 and look forward to reporting another period of both operational and financial progress."
Enquiries:
|
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 (Broker) Toby Gibbs / James Thomas / Rachel Goldstein (Corporate Advisory) Henry Willcocks (Corporate Broking)
|
+44 (0)20 7408 4090 |
|
Vigo Consulting (Financial Public Relations) Jeremy Garcia / Kendall Hill / Peter Jacob brandshield@vigoconsulting.com |
+44 (0)20 7390 0237 |
About BrandShield
Brandshield is a provider of cybersecurity solutions from brand protection to online threat hunting. BrandShield detects online threats and takes them down. The Company's client base is a growing list of organisations including Fortune 500 and FTSE100 companies. By utilising AI and big-data analysis, BrandShield monitors, detects, and removes online threats facing companies. These threats include social phishing, executive impersonation, fraud, brand abuse, and counterfeits.
Chief Executive Officer's Review
Introduction
Given that the Company continues to grow quickly, the focus for the first half of 2023 remained on continuing the rapid expansion of BrandShield's offering worldwide. The Company's Annualised Recurring Revenue ("ARR") grew to $9.71m, representing a 15% increase relative to December 2022, and 46% higher than the same period in the prior year. ARR is the key performance indicator ("KPI") for the Group, however there has been a concurrent effort to reduce cash burn which has increased gross profits markedly and continues to propel the BrandShield towards becoming cash flow positive. Consequently, Gross profit increased from 48% in H1 2022 and 54% in December 2022 to 68% in H1 2023, and Loss for the period decreased by 53% to $2.05m in H1 2023 (H1 2022: $4.37m).
As in previous periods, the Company's growth was underpinned by the conversion of clients across a broad range of sectors and the ongoing investment in and expansion of the Company's marketing and sales functions. It is anticipated this will continue to impact strong growth in client capture in H2 of 2023 which traditionally shows the highest increases in new business.
Revenues for the six months ended 30 June 2023 increased 56.3% to $4.42m (H1 2022: $2.83m). As at 30 June 2023, the Group had cash of $1.35 million (31 Dec 2022: $2.60m).
As at 30 June 2023, the loss includes Share Based Payments of $0.81m; the Company recognised the expense in the income statement according to the fair value of the share options and warrants determined using the Black-Scholes valuation model.
BrandShield's unique proposition
BrandShield's technology is well-placed to lead the ongoing transition to a more digitised economy as enterprises continue to recognise the importance of increasing their online protection by securing comprehensive DRP solutions from external providers to complement internal cybersecurity operations. Frost and Sullivan ("F&S") recognised the strong performance and dynamic capabilities of BrandShield's solutions in its 2022 Digital Risk Protection Services Report in which it awarded the Company 3rd place globally. F&S highlighted BrandShield's innovation, growth and its ease of use for clients, whilst commending the Company for its extensive brand protection capabilities and effectiveness in detecting and eliminating a wide range of cyberthreats from phishing to brand impersonation.
F&S expects the DRP market to reach $917.7m in 2026, expanding at a compound growth rate of 39.7%, and BrandShield is uniquely placed to exploit this significant market size expansion through leveraging the following key strengths:
· A mature product, creating higher barriers to entry
· Ongoing investment in R&D to ensure market leadership is maintained
· AI/ML powered technology
· Strong threat network detection capabilities
· Unique image recognition and Optical Character Recognition ("OCR") - focusing on detection of emerging threats on social media and ecommerce marketplaces
· Big data investigation tools with multi-brand and platform capabilities
· Strong takedown capabilities across all digital threats
· Multi-layered approach to detection and successful takedown of online threats
· BrandShield 3.0 user interface which F&S described as enabling legal, marketing and cyber-security teams to collaborate more efficiently and mitigate threats on all fronts
Strategy
The Company remains in a strong growth phase in which the focus continues to be on client conversion and driving ARR but set within the context of driving gross margins through a reduction in cash burn. The growth to 209 clients at the end of H1 2023 is strong evidence of the Company's ability to convert new clients whilst retaining, and also delivering upsells to, existing clients who have remained with BrandShield for several years. Retention of existing clients is an ever-increasing focus of the team and an area of strategic importance for the Company given the well-publicised global financial headwinds and macroeconomic pressures facing corporates.
Product innovation is a key pillar of the Company's overarching growth strategy, as evidenced by the launch of 'BrandShield 3.0' in 2022 which has helped elevate BrandShield's DRP offering, increase its operational efficiency and improve gross margins. The Company invests considerably in R&D, boasting a highly experienced team dedicated to developing cutting-edge products and innovative add-on features, as well as creating ongoing automations to improve efficiencies. This has not only helped the Company generate significant cross-sell and upsell opportunities but continues to underpin new customer engagement. Concurrently, BrandShield continues to monitor the evolution of AI technology, ensuring it responds rapidly to industry trends, so its solutions remain at the forefront of market innovation.
Although BrandShield is primarily focused on its core US and European client base, it is becoming increasingly recognised as a leading global player in DRP across Asia. The business is set up to scale on a global basis and is able to service brands across all geographies without the requirement to incur additional operating expenses in those regions.
Outlook
The Company has executed on its plan to reinforce sales and marketing teams across the globe and at the same time re-structured a number of operational functions to increase gross margin. These initiatives have laid the foundation for continued expansion into a rapidly growing market and the transition to becoming cash flow generative. The opportunity to seize market share in a fast-growing sector remains the overriding focus and the Board looks forward to reporting on full year trading after what it believes will be a strong H2 2023 performance.
Yoav Keren
Chief Executive Officer
20 September 2023
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION ON BRANDSHIELD SYSTEMS PLC FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2023
CONSOLIDATED INCOME STATEMENT
For the periods ended 30 June
|
|
|
Unaudited Period ended 30 June 2023 |
|
Unaudited Period ended 30 June 2022 |
|
|
Note |
$ |
|
$ |
|
|
|
|
|
|
|
Revenue |
2 |
4,420,266 |
|
2,828,073 |
|
|
|
|
|
|
|
Cost of sales |
|
(1,400,761) |
|
(1,469,009) |
|
|
|
|
|
|
|
Gross profit |
|
3,019,505 |
|
1,359,064 |
|
|
|
|
|
|
|
Research and Development expenses |
3 |
(1,512,988) |
|
(1,648,081) |
|
Sales and Marketing expenses |
3 |
(2,506,113) |
|
(1,810,787) |
|
Operating expenses |
3 |
(1,497,047) |
|
(2,044,349) |
|
|
|
(5,516,148) |
|
(5,503,217) |
|
|
|
|
|
|
|
Loss from operations |
|
(2,496,643) |
|
(4,144,153) |
|
|
|
|
|
|
|
Net finance income (expense) |
|
351,634 |
|
30,376 |
|
|
|
|
|
|
|
Loss before tax |
|
(2,848,277) |
|
(4,113,777) |
|
|
|
|
|
|
|
Tax expense |
|
- |
|
- |
|
|
|
|
|
|
|
Loss for the period |
|
(2,848,277) |
|
(4,113,777) |
|
|
|
|
|
|
|
Basic and diluted loss per share (cent) |
4 |
(0.017) |
|
(0.032) |
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the periods ended 30 June
|
|
|
Unaudited Period ended 30 June 2023 |
|
Unaudited Period ended 30 June 2022 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Loss for the period |
|
(2,848,288) |
|
(4,113,777) |
|
Other comprehensive income: |
|
|
|
|
|
Items that will or may be reclassified to profit or loss: |
|
|
|
|
|
Other comprehensive(loss) / income |
|
799,615 |
|
(222,714) |
|
Total comprehensive loss |
|
(2,048,673) |
|
(4,336,491) |
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June
|
|
|
Unaudited Period ended 30 June 2023 |
|
Audited Year ended December 31, 2022 |
|
|
Note |
$ |
|
$ |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
176,843 |
|
180,777 |
|
Right of use asset-office lease |
|
904,515 |
|
1,080,599 |
|
Financial assets at fair value through profit or loss |
12 |
3,840,920 |
|
3,663,072 |
|
|
|
4,922,278 |
|
4,924,448 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables |
5 |
2,170,011 |
|
2,791,518 |
|
Financial assets at fair value through profit or loss |
|
19,180 |
|
18,220 |
|
Other financial assets |
|
15,148 |
|
14,447 |
|
Cash and cash equivalents |
6 |
1,352,922 |
|
2,605,605 |
|
Restricted cash |
|
425,471 |
|
372,707 |
|
Assets classified as held for sale |
|
266,356 |
|
254,023 |
|
|
|
4,249,088 |
|
6,056,520 |
|
|
|
|
|
|
|
Total assets |
|
9,171,366 |
|
10,980,968 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Short term loan and bank overdraft |
7 |
2,166,560 |
|
2,278,645 |
|
Trade and other payables |
8 |
5,721,156 |
|
5,969,822 |
|
Lease liability- current |
|
314,758 |
|
321,727 |
|
|
|
8,202,474 |
|
8,570,194 |
|
Non-current liabilities |
|
|
|
|
|
Lease liability - non-current |
|
596,250 |
|
795,557 |
|
Other payables |
|
28,560 |
|
30,079 |
|
|
|
624,850 |
|
825,636 |
|
Total liabilities |
|
8,827,324 |
|
9,395,830 |
|
|
|
|
|
|
|
Net assets |
|
344,042 |
|
1,585,138 |
|
|
|
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
|
Share capital |
11 |
9,929,842 |
|
9,929,842 |
|
Share premium |
11 |
32,060,989 |
|
32,060,989 |
|
Reverse acquisition reserve |
|
(20,653,597) |
|
(20,653,597) |
|
Other reserves |
|
6,292,217 |
|
4,685,025 |
|
Retained earnings |
|
(27,285,409) |
|
(24,437,121) |
|
Total equity |
|
344,042 |
|
1,585,138 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited
|
|
|
Share capital |
Share premium |
Reverse acquisition reserve |
Other reserves |
Retained earnings |
Total |
|
|
|
$ |
$ |
|
$ |
$ |
$ |
|
Balance as at 1 January 2022 |
|
9,299,228 |
27,686,289 |
(20,653,597) |
4,340,744 |
(18,393,526) |
2,279,168 |
|
|
|
|
|
|
|
|
|
|
Prior year adjustment |
|
- |
- |
- |
(1,125,999) |
1,125,999 |
- |
|
Loss for the period ended 30 June 2022 |
|
- |
- |
- |
- |
(4,113,777) |
(4,113,777) |
|
Share based payments |
|
- |
- |
- |
1,202,546 |
- |
1,202,546 |
|
Issue of share capital |
|
300,803 |
2,976,840 |
- |
- |
- |
3,277,642 |
|
Exchange differences on translation |
|
- |
- |
- |
(222,714) |
- |
(222,714) |
|
Balance as at 30 June 2022 |
|
9,600,031 |
30,663,129 |
(20,653,597) |
4,194,607 |
(21,381,304) |
2,422,866 |
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Reverse acquisition reserve |
Other reserves |
Retained earnings |
Total |
|
|
|
$ |
$ |
$ |
$ |
$ |
$ |
|
Balance as at 1 January 2023 |
|
9,929,842 |
32,060,989 |
(20,653,597) |
4,685,025 |
(24,437,121) |
1,585,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period ended 30 June 2023 |
|
- |
- |
|
|
(2,848,288) |
(2,848,288) |
|
Issue of share capital |
|
- |
- |
|
|
- |
|
|
Share based payments |
|
- |
- |
|
807,577 |
- |
807,577 |
|
Exchange differences on translation |
|
- |
- |
|
799,615 |
- |
799,615 |
|
Balance as at 30 June 2023 |
|
9,929,842 |
32,060,989 |
(20,653,597) |
6,292,217 |
(27,285,409) |
344,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS
For the periods ended 30 June
|
|
|
Unaudited Period ended 30 June 2023 |
|
Unaudited Period ended 30 June 2022 |
|
|
|
$ |
|
$ |
|
Cash flows from operating activities |
|
|
|
|
|
Loss for the year |
|
(2,848,288) |
|
(4,113,777) |
|
Adjustments for: |
|
|
|
|
|
Depreciation |
|
13,513 |
|
15,615 |
|
Depreciation of the right of use |
|
176,084 |
|
- |
|
Share based payment expense |
|
807,577 |
|
1,202,546 |
|
Foreign exchange on operations |
|
503,711 |
|
245,090 |
|
Decrease (Increase) in trade and other receivables |
|
620,806 |
|
(751,202) |
|
Increase in other financial assets |
|
- |
|
(120,128) |
|
Increase in restricted cash |
|
(52,764) |
|
(178,631) |
|
Increase (Decrease) in trade and other payables |
|
(248,665) |
|
1,229,390 |
|
Net cash flows from operating activities |
|
(1,028,026) |
|
(2,471,097) |
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Purchase of property, plant and equipment |
|
(18,382) |
|
(199,607) |
|
Net cash used in investing activities |
|
(18,382) |
|
(199,607) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from loans and borrowings |
|
- |
|
377,136 |
|
Repayment of right of use lease obligation |
|
(206,275) |
|
- |
|
Proceeds from issue of ordinary shares |
|
- |
|
3,277,642 |
|
Net cash (used in)/generated from financing activities |
|
(206,275) |
|
3,654,778 |
|
|
|
|
|
|
|
Net (decrease) / increase in cash and cash equivalents |
|
(1,252,683) |
|
984,074 |
|
Cash and cash equivalents at beginning of period |
|
2,605,605 |
|
1,194,275 |
|
Foreign exchange differences on cash |
|
- |
|
- |
|
Cash and cash equivalents at end of period |
|
1,352,922 |
|
2,178,349 |
Non-cash transactions
The Company operates an equity-settled, share-based scheme under which the Company receives services from employees as consideration for equity instruments (options) of the Company. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted, calculated using the Black-Scholes model.
NOTES TO THE FINANCIAL INFORMATION
1. General information and basis of preparation
The principal activity of BrandShield Systems plc (the 'Company') is the development of a digital risk protection solution to prevent, detect and remove online threats, through its research and development centre in Israel.
Basis of preparation
The condensed consolidated interim financial statements ("Interim Financial Statements") of the Group have been prepared in accordance with the AIM Rules for Companies and UK adopted international accounting standards and the Companies Act 2006. They have been prepared under the assumption that the Group operates on a going concern basis. As permitted, the Group has chosen not to fully adopt IAS 34 in preparing the Interim Financial Statements. The Interim Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss.
The Interim Financial Information has been prepared under the same basis of preparation and accounting policies as adopted in the audited annual financial statements for the period to 31 December 2022, which were authorised by the Board on 2 July 2023. The Interim Financial Statements should be read in conjunction with these annual financial statements.
The interim financial information is presented in US Dollars.
Going concern
The financial statements have been prepared on the assumption that the group will continue as 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.
The wording included in the going concern policy and relevant disclosures within the Annual Report for the year ended 31 December 2022 is still applicable to the group as at 30 June 2023.
Critical accounting estimates
The preparation of Interim 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 key assumptions used in preparation of the Interim Financial Information are in conformity with the assumptions used in the annual financial statements unless otherwise stated.
Accounting policies
The same accounting policies, presentation and methods of computation have been followed in the Interim Financial Statements as were applied in the Company's audited annual financial statements.
The company started implementing IFRS 16 for a new leasing agreement (starting FY2022 reports).
There are no new standards issued but not yet effective that have been early adopted or are expected to have a material impact on the Company.
2. Revenue
Revenue is generated from the sale of Digital Risk Protection solutions. In the period ended 30 June 2023, 93% of sales were made overseas (The period ended 30 June 2022: 96%). The majority of overseas sales are made in the USA.
3. Research and Development expenses
|
|
Unaudited Period ended 30 June 2023 |
|
Unaudited Period ended 30 June 2022 |
|
|
$ |
|
$ |
|
Salaries |
(854,478) |
|
(817,191) |
|
Share based payment |
(322,210) |
|
(488,592) |
|
Other expenses |
(336,300) |
|
(342,298) |
|
|
(1,512,988) |
|
(1,648,081) |
Sales and marketing expenses
|
|
Unaudited Period ended 30 June 2023 |
|
Unaudited Period ended 30 June 2022 |
|
|
$ |
|
$ |
|
Salaries |
(1,348,390) |
|
(658,121) |
|
Advertising and Marketing |
(1,008,436) |
|
(950,831) |
|
Share based payment |
(149,287) |
|
(201,835) |
|
|
(2,506,113) |
|
(1,810,787) |
Operation expenses
|
|
Unaudited Period ended 30 June 2023 |
|
Unaudited Period ended 30 June 2022 |
|
|
$ |
|
$ |
|
Salaries |
(513,128) |
|
(523,567) |
|
Share based payment |
(320,170) |
|
(493,692) |
|
Rent and utilities |
- |
|
(258,891) |
|
Depreciation of the right of use |
(176,084) |
|
- |
|
Other expenses |
(487,665) |
|
(768,199) |
|
|
(1,497,047) |
|
(2,044,349) |
4. Loss per share
Basic loss per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.
|
|
Unaudited Period ended 30 June 2023 |
|
Unaudited Period ended 30 June 2022 |
|
|
$ |
|
$ |
|
Loss attributable to equity holders of the Company |
2,848,288 |
|
4,113,777 |
|
Weighted average number of shares |
170,331,874 |
|
129,171,159 |
|
Loss per share (cents) |
(0.017) |
|
(0.032) |
Since the Company is loss making, the share options, warrants and convertible loans currently in issue are non-dilutive.
5. Trade and other receivables
|
|
Unaudited Period ended 30 June 2023 |
|
Audited Year ended 31 December 2022 |
|
|
$ |
|
$ |
|
Trade receivables |
2,092,412 |
|
2,607,551 |
|
Other receivables and prepaid expenses |
77,599 |
|
183,967 |
|
|
2,170,011 |
|
2,791,518 |
6. Cash and cash equivalents
|
|
Unaudited Period ended 30 June 2023 |
|
Audited Year ended 31 December 2022 |
|
|
$ |
|
$ |
|
Cash and cash equivalents |
1,325,922 |
|
2,605,605 |
|
|
1,325,922 |
|
2,605,605 |
7. Short term loan and bank overdraft
BrandShield Ltd has an agreement with Leumi Bank to provide a revolving credit line facility of up to 8 million NIS (c. $2.2 million) for 24 months, ending on 26 September 2023, the renewal of which is in the process of being negotiated by the Company. The credit line bears a competitive interest rate. The facility allows drawdown of up to four times Monthly Revenue (net of churn) and includes covenants of a type typical of such an agreement.
8. Trade and other payables
|
|
Unaudited Period ended 30 June 2023 |
|
Audited Year ended 31 December 2022 |
|
|
$ |
|
$ |
|
Trade payables |
837,713 |
|
671,657 |
|
Salaries, accruals and taxes |
907,697 |
|
1,068,291 |
|
Royalties Payable |
394,030 |
|
426,706 |
|
Deferred revenue |
3,581,716 |
|
3,581,903 |
|
|
5,721,156 |
|
5,969,822 |
9. Related party transactions
BrandShield Limited is connected to its predecessor Domain the Net Technologies Limited (the "Related Party"), a company registered in Israel. BrandShield Limited demerged from the Related Party in 2013 and has directors in common. Furthermore, the two parties share several operational costs, including sharing rental costs. There is a formal agreement between the Company and its related party (signed 17 May 2020).
BrandShield Limited is connected to its parent company BrandShield Systems plc. There is a formal service agreement between the two companies (signed 25 July 2021).
BrandShield Limited is connected to its subsidiary BrandShield Inc.
10. Share based payments
The Company operates an equity-settled, share-based scheme under which the Company receives services from employees as consideration for equity instruments (options and warrants) of the Company. The fair value of the third-party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:
· including any market performance conditions.
· excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example, the requirement for employees to save).
The fair value of the share options and warrants are determined using the Black-Scholes valuation model at the date of grant.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.
When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.
11. Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
|
|
Number of Ordinary shares |
Number of Deferred shares |
Share capital |
Share premium |
Total |
|
|
|
|
$ |
$ |
$ |
|
As at 1 January 2022 |
117,950,921 |
32,385,056 |
9,299,228 |
27,686,289 |
36,985,517 |
|
Issue of shares |
23,214,286 |
- |
300,803 |
2,976,839 |
3,277,642 |
|
As at 30 June 2022 |
141,165,207 |
32,385,056 |
9,600,031 |
30,663,128 |
40,263,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2023 |
170,331,874 |
32,385,056 |
9,929,842 |
32,060,989 |
41,990,831 |
|
Issue of shares |
- |
- |
- |
- |
- |
|
As at 30 June 2023 |
170,331,874 |
32,385,056 |
9,929,842 |
32,060,989 |
41,990,831 |
12. Financial assets at fair value through profit and loss
The Company reviews the fair value of its unquoted equity instruments at each Statement of Financial Position date. This requires management to make an estimate of the value of the unquoted securities in the absence of an active market.
The Company follows the guidance of IFRS 9 to determine when an investment at fair value through profit or loss is impaired. This determination requires significant judgement. In making this judgement, the Company evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow. Management also considers external indicators such as technological advances and trends, commodity prices, investment performance and demand for the underlying commodity. Financial assets held at fair value through profit or loss are assessed individually.
|
|
|
|
|
|
|
Unaudited Period ended 30 June 2023 |
|
Audited Year ended 31 December 2022 |
|
|
$ |
|
$ |
|
Opening balance |
3,663,072 |
|
4,112,107 |
|
Foreign exchange |
177,848 |
|
(449,035) |
|
Closing balance |
3,840,920 |
|
3,663,072 |
Financial assets include the following:
|
Unlisted securities |
Unaudited Period ended 30 June 2023 |
|
Audited Year ended 31 December 2022 |
|
|
$ |
|
$ |
|
UK |
3,840,920 |
|
3,663,072 |
|
|
3,840,920 |
|
3,663,072 |
At 30 June 2023, the Directors' view of fair value of the Company's investment in WeShop Ltd is $3,840,920 ($3,663,072 at 31 December 2022). This remains in line with the aggregate cost of investment. While WeShop remains pre-revenue, the Directors continue to believe that social commerce represents an exciting and authentic digital shopping opportunity, particularly post Covid-19 which has driven more traffic online and away from the high street. While the Directors are hopeful of a deliverable transaction at an attractive valuation, they consider it prudent to continue to fair value the asset at cost.
13. Subsequent events
No subsequent events were identified between the reporting period and issue of the interim financial information.
14.Availability of Interim Report
The interim report is available on www.brandshield.com
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