Conditional Placing & BrandShield Investment

03 February 2020

Two Shields Investments plc

("TSI" or the "Company")

Conditional Placing and proposed investment in BrandShield

Appointment of Joint Broker

Two Shields Investments plc, the AIM-quoted company focused on building a portfolio of investments in fast-growing markets including cybersecurity, e-commerce and technology-enabled businesses, is pleased to announce that it has raised £1,400,000 (gross) via a placing (the "Placing").

The Placing was with existing and new investors of 1,400,000,000 new ordinary shares in the Company (the "Placing Shares") at a price of 0.1p pence per Placing Share ("the Placing Price"). 

The Placing was undertaken by the Company's newly appointed joint broker, Optiva Securities Ltd ("Optiva Securities"), and is subject to the Directors being granted authority by shareholders to allot the Placing Shares at a General Meeting.

Overview

·; £1,400,000 (gross) raised via a placing of 1,400,000,000 new ordinary shares at 0.1p per share.

·; Investment from existing and new shareholders.

·; Placing proceeds will support the development of portfolio company BrandShield Limited ("BrandShield"), whereby TSI intends to exercise its option to invest a further US$1,000,000 by way of subscription to a Convertible Loan Note, detailed below, as was announced on 5 November 2019. BrandShield is an anti-counterfeiting, anti-phishing and online brand protection solution.

The Placing

Undertaken with both existing and new shareholders, the proceeds of the Placing will be invested in line with the Company's strategy, and to provide working capital. The Company's strategy is to build a portfolio of investments in digital and technology-enabled assets, and disruptive technologies.

From net proceeds of approximately £1,300,000, the Company expects to invest up to US$1,000,000 in BrandShield in which TSI currently has an 11.34% shareholding. The Company invested US$300,000 into BrandShield on 29 March 2019 and US$500,000 on 5 November 2019 via a Convertible Loan dated 29 March 2019 ("Closing Date"). The Convertible Loan will convert into equity on the Maturity Date, being the second anniversary of the Closing Date unless an accelerated conversion event occurs on an earlier date ("Accelerated Conversion Event"). The Convertible Loan has a 2.5% coupon. An Accelerated Conversion Event, shall include, inter alia, an IPO or sale of BrandShield or BrandShield undertaking a qualified fundraising round. 

Pursuant to the Convertible Loan the Company had the right to make a further investment of US$1,000,000 in BrandShield within a period of 9 months from 5 November 2019 under the same terms of the Convertible Loan. 

Should TSI's existing US$800,000 and proposed US$1,000,000 of Convertible Loan convert into equity, TSI's holding in BrandShield will increase to approximately 20.5%. 

BrandShield has indicated an intention to list on the AIM Market of the London Stock Exchange. The listing is expected to take place in Q2 2020. The Company continues to advise BrandShield on its strategic trajectory and has introduced BrandShield to stakeholders providing assistance towards the AIM listing.

About BrandShield

BrandShield provides a solution from brand protection to online threat hunting. BrandShield detects online threats and takes them down. The company's system monitors the web and detects various online threats such as: web and social phishing, executive impersonation, fraud, counterfeits and brand abuse. BrandShield has an increasing international blue-chip client base including Fortune 500 and FTSE 100 companies.

After a successful 2018, in which BrandShield increased its Annual Recurring Revenue ("ARR") by 112%, it has made excellent progress in 2019. ARR has risen by a further 70%, and it has acquired new customers from a broad range of industries. Sectors now covered by BrandShield include financial services, pharmaceuticals, fashion, software, sports, entertainment, consumer products, and industrials. 

There has been continued expansion in existing accounts, creating another growth engine for the business. BrandShield will continue to invest in the iterative optimisation of its proprietary technology for threat intelligence and online threat hunting, particularly in social media anti-phishing, brand protection and anti-counterfeiting. The primary focus of further investment will be aimed at increasing marketing and sales efforts. Growth over the last three years has been undertaken with a very small marketing budget. Given the scalability of the platform, an increased investment in sales is expected to help BrandShield rapidly grow. 

Corporate Broking Appointment

Optiva Securities has been appointed joint broker to the Company with immediate effect, working alongside Turner Pope Investments Limited. 

Broker Warrants

In connection with the Placing, the Company has agreed to award Optiva Securities warrants over 70,000,000 Ordinary Shares (the "Placing Warrants") valid for two years from the date of issue, which shall give Optiva Securities the right to acquire 70,000,000 Ordinary Shares of the Company at the Placing Price.

Shareholders' approval of share capital authorities and General Meeting

The issue of the Placing Shares and the Placing Warrants is conditional upon the approval of shareholders of the Company in general meeting of the share capital authorities required.

A circular and Notice of meeting is currently being prepared and is expected to be published in the week commencing 3 February 2020. Publication of the circular and Notice will be notified at that time and sent to shareholders. Copies will also be published on the Company's website.

Admission and Total Voting Rights

Subject to the outcome of the General Meeting resolutions, application will be made for the admission of the new Ordinary Shares to trading on AIM ("Admission"), with Admission expected to take place shortly after the General Meeting.

Following Admission, the Company's issued share capital will comprise 5,861,422,896 Ordinary Shares, each with voting rights. The above figure of 5,861,422,896 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014.

CEO and Founder of BrandShield, Yoav Keren, said:

"We are very pleased to continue our close relationship with TSI as a leading investor and appreciate its continued support in BrandShield. The anticipated investment in BrandShield will support our plans for continued penetration in to the rapidly growing market we are active in."

Chairman of TSI, Andrew Lawley, said:

"This fundraising will enable TSI, in line with our strategy, to take advantage of the investment opportunity that still exists on the same terms as previous subscriptions by the Company. I would like to welcome our new investors and thank existing investors for their continued support. Given the excellent growth that BrandShield is delivering, and the progress it is making towards its AIM listing, we believe this investment is structured on attractive terms for our shareholders. BrandShield will have the capacity to increase customer acquisition, and support material value enhancement."

-Ends-

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.