29th Jun 2007 07:30
Brainspark PLC29 June 2007 FOR IMMEDIATE RELEASE 29 June 2007 BRAINSPARK PLC ("BRAINSPARK" OR THE "COMPANY") ANNUAL AUDITED RESULTS ANNNOUNCEMENT FOR THE YEAR TO DECEMBER 2006 CHAIRMAN'S STATEMENT I am pleased to present the Company report for the year ended 31 December 2006. The results show a profit of £18,000 compared to a loss of £151,000 for thefinancial year to 31 December 2005. The result is due to the combination ofreduction in running costs of the Company, profit from sales of assets andincrease in profit from associates. These results are presented in accordance with IFRS. We hope that the result represents a turnaround for the Group. This is the firstprofitable year since going public in 2000 and confirms that the strategyimplemented by the Board so far is heading in the right direction. Company background Brainspark's core business is identifying early stage investment opportunitiesand to monitor, manage and facilitate a profitable exit strategy. Since I become Chairman of Brainspark in early 2002, we have concentrated onmainly managing our existing portfolio, reducing costs and securing funding forthe company. During 2006 we were again in a position to make new investments,whilst exiting with a profit from sales of existing portfolio companies. Thishas allowed us to make recent new investments in China. New Investments The first investment made during 2006 was Polarizonics, a US company which hasdeveloped a new method of potentially increasing the data storage capacity andread-rate of both red and blue laser DVDs by up to three times. This isdescribed as Polar High-definition DVD (PH-DVD) Technology. This technologyexploits the polarization element contained in all current DVD formats not beingused for the physical encoding of the information on the disc to significantlyincrease both the speed and capacity of DVDs. Applications have been made forpatents in respect of this technology. The second investment was in Mediapolis SpA and was a second stage round offunding in the largest planned amusement park in the North of Italy. Although itis substantially different from the historic Brainspark technology investments,namely in a real estate development, this project is very familiar to one of thedirectors of the Company. This director is also an investor alongsideBrainspark, which gives access to the network of relationships associated withthis investment. On 31 July 2006 Brainspark participated in the £250,000 new financing round inMetapack Ltd. Metapack is the leading UK provider of delivery software formulti-Channel home delivery. Investors in this round included existinginvestors, Cross Atlantic Capital Partners, Brainspark as well as existingmanagement and Directors of the company. Brainspark held 10.72% of the companyfollowing the funding round. Exits On 6th July 2006 Brainspark completed the disposal Kerb Limited and its entireholding of 30,167 1p ordinary shares, which represented 25% of the issued sharecapital of the company, for a cash consideration of £205,000. Kerb reportedrevenues for the year ended February 2006 of approximately £600,000 with pre-taxprofits of around £13,000. The holding was purchased by the company.Brainspark'sbook value of Kerb was £79,000. This resulted in a profit of £126,000 On 8 August 2005, Brainspark granted a call option to Exprivia SpA (formerlyAiSoftw@re SpA) over the entire issued share capital of Brainspark's whollyowned subsidiary, Infusion 2002 Limited which in turn held a 16.21% investmentin Advanced Computer Systems SpA ("ACS"), an Italian Company. This optionoriginally expired on 31 July 2006 but this was extended to 31 October 2006.Brainspark received a £300,000 non-refundable deposit which was settled by atri-partite intercompany settlement arrangement between GeoSim, Brainspark andExprivia. During the option extension period, for which Brainspark received £25,000, byway of an inter-company settlement agreement, management were in discussionswith Exprivia, as a result of which Infusion 2002 Limited sold 197,233 shares inACS to Exprivia, representing a 7.68% interest for a consideration ofUS$1,000,000, and the £300,000 non-refundable deposit. This gave rise to a gainon disposal of £174,000. The US$1,000,000 consideration has been satisfied bytransferring a secured commercial debt in Geosim from Exprivia to Brainspark.Brainspark continues to hold 8.52% of ACS. Summary Financial Results The Group's cash reserves at 31 December 2006 stood at £410,000 compared with£446,000 at 31 December 2005. The Group's net asset value (NAV) was £3.51million at 31 December 2006, compared with £3.46 million at 31 December 2005. Transition to IFRS The results and net equity are represented in accordance with IFRS. ForBrainspark this requirement would have become compulsory for our Interim Reportto 30 June 2007. We have adopted IFRS earlier than required. All fullreconciliation of the net equity and loss for the year ended 31 December 2005 aspresented previously under UK GAAP and now under IFRS is given in note 24 tothese financial statements. The principal effect of this implementation has been to carry our investments inassociates at cost adjusted for our share of profits less any impairmentcharges. This has resulted in the partial reversal of previous goodwillamortisation charges, and share of losses resulting in a net improvement intheir carrying value and consequently in net assets of £987,000. The biggest component of this has been the revision in the carrying value ofGeoSim, our largest portfolio company. As part of the IFRS transitionalarrangements we reviewed the carrying value at 31 December 2004 and eachsubsequent year thereafter testing for impairment each time. Market Environment The market environment in the IT sector has shown signs of growth and some ofour existing portfolio companies are finally operating profitably. In order tomaximise our return on sale from our investments Brainspark may be required toprovide further support to some of our current portfolio companies over theshort to medium term. The emergence of China and India in the IT sector, together with the extensionto the membership of the EU to the New European Countries has opened the ITlabour market. This has made it easier to supply services to old EuropeanCountries. This has reshaped the overall sector and led to major challenges andopportunities for the companies. Operational Changes Following the appointment of Mr. D. Bailey in January 2006 as a CompanyDirector, there are now two Executive Directors, including the Chairman. Thishas led to the efficient implementation and execution of the strategies of theBoard. Investment Committee Changes No changes have been made to the Investment Committee during the year. TheCommittee is currently represented by Prof. F. Gardin, Chairman of the Company,Mr. D.Meacher, an Independent Director, and an external advisor, Prof. John A.Campbell. Business Strategy At the outset, Brainspark's strategy was to take a role in the initial stages offinancing new business ideas. It would find and develop businesses, then look toexit relatively quickly through a trade sale or flotation. Inevitably, the investment market has changed and whilst we have remainedcommitted to this strategy we have had to adapt the way in which we have soughtto implement it. Specifically, we have focused more recently (as set out below)on developing opportunities for "spin-outs" from Science Parks and Incubators inChina, whilst at the same time seeking to develop exit strategies for ourexisting investments. Brainspark continues to monitor and rationalise itsoperational infrastructure and leverage the knowledge and market potential ofits investment portfolio. Brainspark's Directors will consider, from time to time, co-investing in some ofthe Company's initiatives. Portfolio Companies An update on the Group's portfolio companies held at 31 December 2006 is asfollow: GeoSim (www.geosim.co.il) established itself as the world leader in buildingcomplete and photorealistic 3D virtual cities and in delivering them through theInternet for use in local searching and real estate, city planning and homelandsecurity, tourism and entertainment. Whilst the geo-spatial visualization solutions offered by Google, Microsoft andothers feature satellite photographs, street photographs and more recentlycoarse 3D-models with limited visual quality and interactivity, GeoSim delivershighly detailed, fully interactive city models, which the user can explore fromthe land or the air. GeoSim's city models are not only addictive and immersive (i.e. conveying theexperience of "being there"), they are also "intelligent" - one can click on anybuilding, bus stop or shop to find out more information about it or even goinside. By combining GeoSim's virtual cities with business information ("3D-YellowPages"), tourist/what's-on information and introducing human interaction betweenthe concurrent users, GeoSim provides a ground-breaking solution for localsearch, social networking and entertainment applications related to the citymetaphor. Together with the Philadelphia Convention and Visitors Bureau and the CenterCity District, GeoSim is about to complete Virtual Philadelphia, which will beits first full-scale virtual city. Online beta-testing of Virtual Philadelphiawill start in early July 2007 - two months later (Sept. 2007) it will be readyfor public launch. In the second half of 2007, GeoSim is planning to start the Virtual Parisproject, which is likely to have a dramatic impact on its market penetrationefforts. Polarizonics has developed a novel method of encoding information on opticaldiscs. While present DVD's use only the modulation of light intensity,Polarizonics succeeded in manipulating light polarization in a controlled way.This opened up a new dimension of physical encoding of information on opticaldiscs. The Polarizonics technology can both increase the capacity of eachstorage layer of DVD discs, and increase disc copy protection through a specialencoding method which cannot be replicated in common DVD write drivers. In 2007,Polarizonics has initiated contact with Chinese representatives to engage in aneffort to incorporate Polarizonics technology in the next generation of Chinesedisc formats. ACS SpA (www.acsys.it) processing stations have become a reference point in bothNational and International remote sensing markets. In previous years ACS consolidated its role in environmental applications ofEarth Observation, participating in important research projects focused onclimate change and natural risk management. The aim is to enlarge ACS offering, targeting new clients and proposing newoff-the-shelf services, focusing on environmental risk management andenvironmental policy making support. ACS is continuing its technology transferto the bio-medical market and exploiting its image processing expertise. Thisstrategy has increased the order backlog which should ensure that the companyhas a steady flow of work in forthcoming years. Easyart.com (www.easyart.com) recorded its first year of profits in 2006. Duringthe year the company completed the integration of WorldGallery.co.uk, a rivalsite acquired at the end of 2005 and also launched a new art brand directed atwomen www.passionart.com. The company continues to make progress and hasextended its range of art-related products to over 70,000 unique prints. Easyartalso launched The Easyart Academy www.easyart.com/academy, which allows artistsand photographers to upload and sell their own images and signed a distributiondeal with Christie's Images, the image licensing arm of the world-famous AuctionHouse. Fortune Cookie (www.fortunecookie.co.uk) designs and builds findable,accessible, beautiful websites for some of Britain's best known brands includingAmnesty International, Small Luxury Hotels and National Express. The company hasestablished long-term strategic relationships with Legal & General, FT Businessand Kuoni. In a 2006 survey of over 395 UK digital agencies the readers ofRevolution, Marketing and Marketing Direct ranked Fortune Cookie number 5 fordelivery of ROI, 4 for creativity and 3 for use of technology. In March 2007Media Momentum ranked Fortune Cookie one of the UK's 50 fastest growing digitalmedia companies. MetaPack (www.metapack.com) MetaPack's Delivery Management Solution (DMS)provides integration to all UK parcel carriers. Through its intelligentstreaming functionality, MetaPack DMS allows goods to be despatched using themost suitable carrier network, depending on customer delivery requirements, thetype of parcel and the carrier or own fleet operation best able to deliver it.The customer base of leading retailers continue to grow, and the company hasrecently launched an ASP or software as a service (SaaS) version of our deliverysoftware. The addition of new capital funds will help us to promote the newproduct into the B2C and B2B markets as well as develop a C2C product. Metapack's on-line presence continues to be strong, with a 70% year on yeargrowth in deliveries for many of their clients, meaning an increasing proportionof their ongoing revenues is guaranteed through support & maintenance ortransactional payments, as opposed to one-off licence or implementation fees. Mediapolis Management continues to monitor the performance of this holding. Tax Losses The Group has no tax charge for the year due to losses incurred and has apotential deferred tax asset arising from unutilised management expensesavailable for carry forward and relief against future taxable profits. Thedeferred tax asset has not been recognised in the financial statements inaccordance with the Group's accounting policy for deferred tax. The Group's unutilised management expenses and capital losses carried forward at31 December 2006 amount to approximately £11 million (2005: £11 million) and £4million (2005: £4 million) respectively. All such losses rest in BrainsparkAssociates Limited and are available for future utilisation against profits ofthe business. The possibility is that Brainspark will need to acquire aprofitable business in order to utilise the excess management expenses that havearisen from accumulated investment activities to date, which would ultimatelyenable Brainspark to distribute dividends to its shareholders. 2007 Developments China Developments Brainspark has developed a China strategic investment plan which couldultimately secure Brainspark approximately a 25% share in a company that willmake investments in China, both on 6-12 months returns, in pre-IPO situations,and in 3-5 year return with high growth small- to medium- sized technologycompanies. The company, China IPO Group, has entered into first refusalrelationships with some of the most significant Chinese Science Parks andIncubators in China. China IPO Group is managed in Jersey and the Directors are the Rt. Hon. Earl ofCromer, Non-Executive Chairman, Professor F. Gardin, Executive Director, Mr. E.Burman, Executive Director, and as Non-Executive Directors Mr. D. B. Bailey andProfessor Liu Man Hong. Bedell Trust in Jersey act as company secretary. Allen &Overy in Beijing has been retained as the law firm. Lord Cromer has extensive experience of China where he worked for almost 20years as Managing Director and Director of several companies. He is alsoChairman of JF China Region Fund, Japan High Yield Property Fund and PedderStreet Asia Absolute Return Fund, and is on the boards of the Cambridge Asia,Chairman of Cromer Associates Limited, a company which advises foreign companiesinvesting in China and Chinese companies investing overseas. Prof. F. Gardin, Mr. E. Burman and Mr. D. Bailey are Chairman and Directors ofBrainspark Plc. Mr Edward Burman lives in Beijing, where he moved in 2003 andwill be responsible for the China activities. Prof. Liu Man Hong is Director of the Venture Capital R&D Centre at RenminUniversity and Honorary Vice-Chairman of the Chinese Venture CapitalAssociation, she holds a Ph.D. in Economics from Columbia University. The main subsidiary is China IPO Management Ltd incorporated as a Wholly ForeignOwned Enterprise in China, located in Beijing, acting as the local managementcompany. In April 2007 China IPO Group signed an exclusive contract with Xi'anInternational Business Incubator (XIBI) with more than 350 companies beingincubated. XIBI is part of the Xi'an High Tech Zone, which hosts around 8,000companies. Xi'an is one of the main Chinese centres for the Military Aerospace industry,with 50 universities and research centres. Xi'an has a population of 8 millionpeople and is the capital of Shaanxi Province, which has a total population ofapproximately 30 million. The contract gives China IPO Group first-refusal rights on investment in the 350companies currently incubated in XIBI, for an initial period of 2 yearsrenewable for up to 10 years. Business sectors of the 350 companies range fromalternative energies to advanced sensor technologies and added value servicesfor mobile communications. Under the terms of the agreement, China IPOManagement Limited will open an office within the incubator provide training toentrepreneurs of the companies on capital markets, investment principles andinternational marketing. In addition the company will identify and monitorinvestment opportunities among the initial 350 incubated companies. China IPO Group is currently engaged in negotiations with further selectedScience Parks in China. Investment On 2nd April 2007 China IPO Group made its first pre-IPO investment in ET-ChinaHoldings Ltd ("ET-China"), a travel company with its main operations inGuangzhou (Guangdong Province). ET-China is primarily engaged in serving theleisure market in South China through the sale of air tickets, hotel rooms,packaged group tours and associated products and services to corporate entitiesand to individual travellers. In addition, ET-China, through a joint venturewith China Southern Airlines, provides the e-ticketing service and back officesupport services for China Southern Airlines. South China covers nine provinceswith a total population of 450 million people, and is considered the 16thlargest economy in the world by GDP. China IPO Group has invested $200,000 (£100,000) as part of a $7,000,000(£3,500,000) unsecured convertible loan note for pre-IPO funding. The minimuminvestment unit to be entitled to the best terms of the loan note is $500,000(£250,000). The unit was offered to China IPO Group but the current capitalstructure of the company prevented it from subscribing the minimum investment.Two directors of China IPO Group, as well as Prof. F. Gardin and Mr D. Bailey,agreed to subscribe the remaining $300,000 (£150,000) to match the minimum unit.The independent Directors of Brainspark confirmed that the investment by Prof. FGardin and Mr Bailey is on no more favourable terms than the investment by ChinaIPO Group. Mr. L. Fogliani, an 8.89% investor in Brainspark, has agreed tosubscribe an additional $100,000 (£50,000) under the same terms as China IPOGroup. The total investment therefore amounted to $600,000 (£300,000). Exits On 17 February 2007 - The Group sold its 34.6% holding in Traderserve, for animmediate cash consideration of £75,000, to existing shareholders of the companyand their associates. Traderserve Limited ("Traderserve") are a software vendorand consultancy firm focused on real-time trading applications for brokers,traders and fund managers. Under the terms of the sale, in the event of a sale of Traderserve Shares withina 24 month period Brainspark will retain the right to receive a full 34.6% ofthe gain made from such a sale. Subsequently; during the following 60 months, inthe event of a sale of Traderserve shares the 34.6% gain received by Brainsparkwill be decreased by straight line depreciation to an irreducible 5% of thegain. In the Brainspark's books Traderserve was fully written down a number of yearsago. The transaction will therefore generate a profit of £75,000 in 2007. Board Changes On 2 May 2007 D Caldwell resigned as Director of Brainspark to pursue otherbusiness activities in America. D. Caldwell served as Chairman in the past andmore recently as a Director of the Company. The Board would like to expresstheir appreciation for his continued support and invaluable contribution. Stock Option Plan The two Executive Directors, Prof F. Gardin and Mr. Bailey will be paid fees,from 1 March 2007, of £80,000 and £20,000 per annum respectively. This reflectstheir administration and other duties in developing Brainspark. Prof F. Gardinhas not received any fees for some years and Mr Bailey has not previously beenin receipt of fees. On 1 March 2007 the Company issued options to the Directors, the issue ofoptions was treated as a Related Party transaction under AIM Rules. Mr. D.Caldwell, the only Independent Director at that time, having consulted theCompany's Nominated Adviser, considered that the terms of the Unapproved ShareOption Scheme and the issue of options to Directors were fair and reasonable inso far as the Company's shareholders were concerned. Further details areprovided in the Remuneration Committee Report. Other Events In February 2007, Cotterford Ltd., an investment company in the UK, subscribed£400,000 for an issue of new Metapack shares repesenting 17.78 per cent. of theenlarged issued share capital. Brainspark holds 30,000 shares in Metapack, whichnow represents 8.23% of the enlarged capital. On 2 May 2007 Brainspark announced that GeoSim has raised additional finance forworking capital and development. Private investors in America subscribed$980,000 to complete the second $1,280,000 tranche of financing at a pre-moneyvaluation of $20,000,000 for Geosim. The first $720,000 tranche at pre-moneyvaluation of $10,000,000 was closed in September 2006. As a result of this $2,000,000 funding, the exercise of approved ESOP optionsand post conversion by Crash LLC of their options and "Bonus Warrants",Brainspark's (fully diluted) interest is 39.53% of Geosim. At a Geosim valuation of $20,000,000 Brainspark's 39.53% equity holding isvalued at $7,900,000 (£ 3,950,000). This alone is equivalent to 1.19 p a share. Co Investment by Directors and Key Shareholders of Brainspark One or more of the Directors and key shareholders may occasionally co-investpersonally in companies with Brainspark, its associates or its investmentcompanies ("the Group") though the Group will always have "first refusal" in anysuch circumstances. In such circumstances the Directors concerned or keyshareholders will make a full declaration of his personal investment and willnot participate in the vote on any Board resolution in respect of the relevantinvestment. As, when, and if this happens the Director or key shareholderconcerned will co-invest on terms which are no more favourable than those whichthe Group is investing. Any such investments will be subject to compliance withthe Stock Exchange rules of the AIM market. Investments Review At the end of December 2006 Brainspark had holdings in 8 companies, 4 in the UK,2 in Italy, 1 in Israel and 1 the United States. Its stake range from nearly 5%to nearly 43.28% of the relevant portfolio companies. The portfolio covers awide range of business sectors, including Web Services, application serviceproviders and advanced IT solutions. At 29 December 2006, Brainspark's mid-market price per share of 0.575p valuedthe Company at £ 1,901,507 Prof. Francesco GardinChairman28 June 2007 Consolidated Income Statement for the year ended 31 December 2006 Note 31 December 2006 31 December 2005 £'000 £'000Continuing operations Investment revenue 9 -Gain on disposal of investments 300 -Reversal of provision - 122Share of profits of associates 92 104Finance charges (31) -Other operating expenses (196) (258)Impairment of available forsale investments (156) (119) ----------- -----------Profit /(Loss) before tax 18 (151) Tax - - ----------- -----------Profit/(Loss) for the year fromcontinuing operations 18 (151) =========== =========== Attributable to:Equity holders of the parent 18 (151) =========== =========== Earnings per shareBasic and diluted earnings per0.01p ordinary share 2 0.005p (0.08)p =========== =========== Balance sheets at 31 December 2006 Notes Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Non-current assetsProperty, plant and equipment - 9 - -Investments in subsidiaries - - 1,430 1,180Investments in associates 2,023 2,010 - -Available for sale investments 718 1,130 - - ------- ------- -------- --------Total non-current assets 2,741 3,149 1,430 1,180 ------- ------- -------- -------- Current assetsTrade and other receivables 626 327 1,915 2,242Cash and cash equivalents 410 446 - - ------- ------- -------- --------Total current assets 1,036 773 1,915 2,242 ------- ------- -------- -------- Current liabilitiesTrade and other payables (266) (461) (181) (245) ------- ------- -------- --------Total current liabilities (266) (461) (181) (245) ------- ------- -------- -------- Net current assets 770 312 1,734 1,997-------------------------- ------- ------- ------- -------- --------Net assets 3,511 3,461 3,164 3,177-------------------------- ------- ------- ------- -------- -------- EquityShare capital 1,936 1,936 1,936 1,936Share premium account 29,186 29,186 29,186 29,186Other reserves 6,813 6,813 - -Equity component of convertibleinstrument 32 - 32 -Retained losses (34,456) (34,474) (27,990) (27,945)-------------------------- ------- ------- ------- -------- --------Equity attributable to equityholders of the parent 3,511 3,461 3,164 3,177-------------------------- ------- ------- ------- -------- -------- Statement of changes in equityFor the year ended 31 December 2006 Group Equity component Profit and Share Share Other of convertible loss capital premium reserve instrument account Total £'000 £'000 £'000 £'000 £'000 £'000---------- ------- -------- ------- ------------ --------- ------ At 1January 1,936 29,186 6,813 - (34,474) 3,4612006 Profit forthe year - - - - 18 18 Equitycomponentofconvertible - - - 32 - 32loan ---------- ------- -------- ------- ------------ --------- ------At 31December 1,936 29,186 6,813 32 (34,456) 3,5112006 ---------- ------- -------- ------- ------------ --------- ------ Company At 1January 1,936 29,186 - - (27,945) 3,1772006 Loss forthe year - - - - (45) (45) Equitycomponentofconvertible - - - 32 - 32loan ---------- ------- -------- ------- ------------ --------- ------At 31December 1,936 29,186 - 32 (27,990) 3,1642006 ---------- ------- -------- ------- ------------ --------- ------ Cash flow statementsFor the year ended 31 December 2006 ---------------------- ------ -------- ------- -------- -------- Note Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000---------------------- ------ -------- ------- -------- -------- Net cash used in operatingactivities (183) (297) - (666) Cash flows from investingactivitiesInterest received 9 - - -Proceeds from sale of investmentsin associates 230 105 - -Purchase of investments (92) - - -Loans to associates - (56) - ----------------------- ------ -------- ------- -------- --------Net cash generated from investingactivities 147 49 - ----------------------- ------ -------- ------- -------- -------- Cash flows from financingactivitiesInterest paid on shareholder loan - (11) - (11)Proceeds from convertible loanissue - 850 - 850Repayment of loans to majorshareholders and others - (173) - (173)---------------------- ------ -------- ------- -------- --------Net cash generated from financingactivities - 666 - 666---------------------- ------ -------- ------- -------- -------- (Decrease)/increase in net cashfor the year (36) 418 - ----------------------- ------ -------- ------- -------- -------- Cash and cash equivalents atbeginning of year 446 28 - ----------------------- ------ -------- ------- -------- -------- Cash and cash equivalents at endof year 410 446 - ----------------------- ------ -------- ------- -------- -------- Notes 1. ACCOUNTING POLICIES Basis of preparation The financial information has been prepared in accordance with InternationalFinancial Reporting Standard ("IFRS") for the first time. The disclosuresrequired by IFRS 1 concerning the transition from UK GAAP to IFRS are given innote 24. The financial statements have been prepared in accordance with IFRS asadopted by the European Union applied in accordance with the provisions of theCompanies Act 1985. The financial statements have been prepared under the historical costconvention. 2. EARNINGS PER SHARE The basic earnings/(loss) per share is calculated by dividing the earningsattributable to ordinary shareholders by the weighted average number of ordinaryshares outstanding during the period. Diluted earnings per share is computedusing the same weighted average number of shares during the period adjusted forthe dilutive effect of share warrants and convertible loans outstanding duringthe period. The profit/ (loss) and weighted average number of shares used in the calculationare set out below: -------------------------------------------------------------------------------- 2006 Per 2005 Per Weighted share Weighted share average no Amount average no Amount Profit of shares pence (Loss) of shares pence £'000 000's £'000 000's-------------------------------------------------------------------------------- Earnings/(loss) pershareBasic and Diluted 18 330,697 0.005 (151) 193,091 (0.08) IAS 33 requires presentation of diluted earnings per share when a company couldbe called upon to issue shares that would decrease earnings per share orincrease net loss per share. For a loss making company with outstanding shareoptions and warrants, net loss per share would only be increased by the exerciseof out-of-the money options and warrants. Since it seems inappropriate thatoption holders would act irrationally, no adjustment has been made to dilutedearnings per share for out-of-the money options and warrants in thecomparatives. There are no other diluting share issues, in either financialperiod, consequently diluted earnings per share equals basic earnings per share. 3. FINANCIAL INFORMATION The above financial information comprises non-statutory accounts within themeaning of section 240 of the Companies Act 1985. The financial information forthe year ended 31 December 2006 has been extracted from published auditedaccounts for the year ended December 2006 that will be delivered to theRegistrar of Companies and on which the report of the auditors was unqualifiedand did not contain statements under s237 (2) or (3) of the Companies Act 1985. 4. REPORT AND ACCOUNTS The Report and Accounts is being posted to shareholders today. Copies may beobtained during normal office hours from the Company's registered office, TheLightwell, 12 - 16 Laystall Street, Clerkenwell, London, EC1R 4PF or from thecompany's website, www.brainspark.com. For further information please contact:- Brainspark plc 00 39 335 296573Francesco Gardin Beaumont Cornish Limited 0207 628 3396Roland Cornish This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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