Interim results for the six months to 30 Sept 2020

26 November 2020

TWO SHIELDS INVESTMENTS PLC

("TSI" or "the Company")

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020

CHAIRMAN'S STATEMENT

Two Shields Investments plc ("TSI" or "the Company") has a stated strategy to build a portfolio of investments in fast-growing markets including cybersecurity, e-commerce and technology-enabled businesses.

Strategy and Highlights

During the period, the Board has continued to execute on its stated strategy to focus on the higher growth technology enabled businesses within the portfolio while opportunistically realising value from the legacy mining exploration assets.

The period has seen a number of significant and exciting developments for our investee companies which the Board believes will position the business well for a period of attractive growth for its shareholders:

1) On 11 November 2020, it was announced that TSI had entered into a contract and placing and subscription agreements to acquire in full, on a share for share basis, the remaining shares in issue of BrandShield Limited ("BrandShield") and simultaneously raise £3.2m of growth capital ("BrandShield Acquisition"). The Directors believe that BrandShield is a very exciting value proposition and will benefit greatly from a public listing in order to execute its development roadmap to enable it to win more customers. 

2) On 27 August 2020, WeShop Limited ("WeShop") announced that it had raised £9m by way of issue of a convertible loan note to support the continued development and launch of that business as it progresses towards it stated aim of a public listing. 

3) Meaningful progress in Kalahari Key Mineral Exploration Company (Pty) Ltd ("Kalahari Key") exploration in the Molopo Farms development, Botswana as the project moved to physical drilling.

The Company will conduct a General Meeting on 27 November 2020 for shareholders to approve the BrandShield Acquisition. As a consequence, should our shareholders vote in favour, we will welcome a new board and the Company shall cease to be an investing company and instead convert to an operating business under the new name of BrandShield Systems Plc.

BrandShield Ltd

The Company announced on 11 November 2020 that it had conditionally agreed to acquire the shares in BrandShield not currently held by TSI for an aggregate consideration of approximately £13.15 million. It was also announced that the Company had at the same time raised approximately £3.2 million by way of a Placing and Subscription from institutional and private investors to finance growth of the Enlarged Group. Subject to shareholders' approval in General Meeting, Admission will become effective, and dealings in the Enlarged Ordinary Share Capital will commence on AIM, on or around 1 December 2020. Full details are set out in the Admission Document published on 11 November. 

BrandShield Key Strengths

BrandShield provides an end-to-end digital brand protection and online threat hunting solution to protect its customers from the financial costs and reputational damage suffered from phishing attacks, online fraud, executive impersonation or the sale of counterfeit goods online. Key strengths of the business include:

· End-to end SaaS delivered solution which detects potential threats, analyses them, prioritises them and is then able to take them down. 

· Proprietary, AI-powered solution is constantly self-improving, using big data and algorithms to detect networks of fraudulent activity and counterfeiters.  

· Products cover many types of online platforms including websites, marketplaces, social media, mobile apps and PPC ads. 

· Extensive and growing list of clients, including Fortune 500 global brands, which present increasing cross-selling opportunities. Clients are from diverse range of sectors including financial services, pharmaceuticals, fashion, online, sports and entertainment. 

· A fast-growing subscription business, BrandShield grew annual recurring revenue ("ARR") from $0.57 million at 31 December 2017 to $1.92 million at 31 December 2019, a CAGR of 83%. 

· ARR from new business signed in H1 2020 almost equivalent to that signed in full year 2019. As of 30 September 2020, ARR was $2.5m. 

· BrandShield emerging stronger from COVID-19 which has led to a significant increase in on-line traffic and a corresponding increase in phishing and online fraud. 

· The market in which BrandShield operates is experiencing rapid growth, from $5.3bn in 2018 to an estimated $12.9 billion in 2023, representing a 19.7% CAGR* 

· The product is now highly developed and BrandShield is entering a marketing phase, funded by the £3.2 million placing and subscription, in order to accelerate growth and capture what the Board believes to be an exceptional opportunity.

*Source: MarketsandMarkets November 2018

Acquisition Highlights

· Conditional acquisition of shares in BrandShield not currently held by TSI for an aggregate consideration of approximately £13.15 million, to be satisfied by the issue of the Consideration Shares to the Vendors and the other BrandShield Shareholders. 

· £3.2 million raised from institutional and private investors 

· The Acquisition, if completed, constitutes a reverse takeover of the Company under the AIM Rules for Companies. 

· Proposed change of name from Two Shields Investments plc to BrandShield Systems Plc to reflect the business of the Enlarged Group. 

· Proposed consolidation and subdivision of every 200 existing ordinary shares of £0.001 each into one New Ordinary Share of £0.01 each and one Deferred Share of £0.19 each.

· Subject to shareholders' approval, admission will become effective, and dealings in the Enlarged Ordinary Share Capital will commence on AIM, on or around 1 December 2020.

Since the Coronavirus crisis began, BrandShield's online threat detection system revealed a surge in fraudulent online activity, with key sectors being targeted including pharmaceuticals, medical supplies, banking, foreign exchange, loan providers, entertainment, online gaming and delivery companies.

Some of the biggest threats are cybercriminals who are trying to capitalise on fears around the disease, and in many cases using the identities of known companies or brands to trick worried consumers. Attacks have included increased phishing taking advantage of additional home working, fraudulent ecommerce sites and fake medicine often related to COVID-19 products. BrandShield has increased its media presence due to this heightened concern over online risks with interviews on radio stations such as LBC and coverage in national newspapers including the Daily Mail and Daily Express.

On 17 November 2020, BrandShield announced that it had signed a contract with the Pharmaceutical Security Institute ("PSI").

Based in Washington, D.C, PSI was set up in 2002 by the Security Directors from fourteen major pharmaceutical companies. Working with its members, PSI has developed improved systems to identify the extent of the problem of counterfeit medicinal products and to assist in coordinating international inquiries.

BrandShield has entered into a contract with PSI on a joint programme to focus on helping to detect and remove online threats on behalf of several of PSI's members, such as rogue pharmacies, counterfeit sales of drugs on online marketplaces, and social media phishing campaigns, and other fraudulent online activities. These members include some involved in developing COVID-19 vaccines.

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 enhances 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.

Led by highly experienced and proven technology and retail professionals including Paul Ellerbeck (formerly of Easyproperty and DMGT) and non-executive Chairman, Matthew Hammond who is Group Managing Director and CFO of mail.ru, one of the largest internet companies in the Russian speaking market.

On 27 August 2020, WeShop provided its investors with a significant update:

Highlights included:

· £9,000,000 fundraise completed through the issue of a convertible loan note

· Option granted for a further £2,777,777 cash investment

· Board changes including appointment of Yoav Keren, CEO of BrandShield to the Board of WeShop

WeShop has patiently developed its own proprietary, and globally scalable, e-commerce platform and established links with key partners to be able to offer its users an unparalleled selection of product within a personalised, highly interactive and rewarding social commerce model. The business is now ready to launch more fully and this significant investment is not only a robust endorsement of the quality of the business but will also ensure that the launch, future growth and its plans to set up give it the best possible outcomes in terms of success.

Kalahari Key Mineral Exploration Company (Pty) Ltd ("Kalahari Key") 

Kalahari Key is a special purpose company set up by an experienced team of explorers to explore for Nickel, Copper and Platinum Group Metals in a highly prospective region in southern Botswana, Africa. TSI has 17.8% of the shares in Kalahari Key. On 16 November 2020,

TSI updated the market on a drilling update confirming completion of the first drilling hole:

Highlights

· The first hole (KKME 1-14) of a planned 2,505 metre four-hole programme has been completed successfully and achieved target depth of 520 metres with near 100% core recovery.

· The suite of rocks encountered in KKME 1-14 has successfully confirmed the proposition that the geology at the MFC Project is that of a feeder zone.

· About 167 metres of ultramafic rock, a potential host for PGMs and nickel, has been encountered below an altered contact around 41 metres down hole. Samples to be prepared and assay tested.

· Downhole geophysics to be undertaken at the end of hole to identify and clarify the conductive structures around and below the 520 metre hole depth.

Financial Review

The Company's financial results for the six months ended 30 September 2020 show a loss of £271,202 (2019: loss of £228,191). Revenues of £nil (2019: £nil) and net realised and unrealised gains of £27,672 (2019: loss £13,534), administrative costs of £324,390 (2019: £203,035), transaction costs of £nil (2019: £14,551) and net interest costs of £nil (2019: £nil).

As at 30 September 2020, the Company's had cash reserves of £169,307 (2019: £42,264).

Outlook

The Company is looking forward to completing the all share for share acquisition of BrandShield and we believe this investment will prove very attractive for all shareholders. The management team at BrandShield, led by Yoav Keren, has consistently demonstrated its ability to grow the business rapidly, delivering material value enhancement.

Furthermore, the recent fund raise by WeShop puts this business in a strong position and TSI looks forward to the launch and roll out of the app and proposition to consumers more widely.

The next 12 months should prove to be an exciting time for TSI. I would like to take this opportunity to thank my fellow directors, advisers, stakeholders and all our shareholders for their continued support.

A Lawley

Chairman

26 November 2020

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

TWO SHIELDS INVESTMENTS PLC

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED

30 SEPTEMBER 2020

STATEMENT OF COMPREHENSIVE INCOME

TWO SHIELDS INVESTMENTS PLC

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED

30 SEPTEMBER 2020

STATEMENT OF FINANCIAL POSITION

TWO SHIELDS INVESTMENTS PLC

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED

30 SEPTEMBER 2020

STATEMENT OF CASH FLOWS

TWO SHIELDS INVESTMENTS PLC

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED

30 SEPTEMBER 2020

STATEMENT OF CHANGES IN EQUITY

TWO SHIELDS INVESTMENTS PLC

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED

30 SEPTEMBER 2020

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

1. GENERAL INFORMATION

The principal activity of the Company is to establish strategic and portfolio investments in listed and unlisted entities, the ongoing focus in high growth potential digital assets, financial technologies, services, consumer focused businesses and technology enabled businesses as well as monitoring historic projects in the natural resource sector.

Two Shields Investments plc is a public limited company incorporated in England and Wales under the Companies Act (registered number 02956279). The Company is domiciled in the United Kingdom and its registered address is Hyde Park House, 5 Manfred Road, London, SW15 2RS.

2. BASIS OF PREPARATION

These condensed interim financial statements for the period ended 30 September 2020 have been prepared in accordance with the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2020, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

The interim financial information set out above does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union. Statutory financial statements for the year ended 31 March 2020 were approved by the Board of Directors on 28 September 2020 and delivered to the Registrar of Companies. The report of the independent auditor on those financial statements was unqualified.

The 2020 interim financial report of the Company has not been audited or reviewed by the Company's auditor, PKF Littlejohn LLP.

Going concern

The Directors consider that adequate financial resources exist for the Company to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the condensed interim financial statements for the period ended 30 September 2020.

Risks and uncertainties

The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Company's medium-term performance and the factors that mitigate those risks have not substantially changed from those set out in the Company's 2020 Annual Report and Financial Statements, a copy of which is available on the Company's website: www.twoshields.co.uk.

Critical accounting estimates

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in note 3 of the 2020 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed during the interim period.

Accounting policies

The same accounting policies, presentation and methods of computation have been followed in these condensed interim financial statements as were applied in the preparation of the Company's financial statements for the year ended 31 March 2020.

Changes in accounting policy and disclosures

(a) New standards, amendments and interpretations adopted by the Company

As of 1 April 2019, the Company has adopted IFRS 16.

IFRS 16 became effective for all periods beginning on or after 1 January 2019 and as such is relevant for the year ended 31 March 2020. IFRS 16 provides for a new model of lessee accounting in which all leases, other than short-term and low value leases, will be accounted for by the recognition on the balance sheet of a right-to-use asset and an associated lease liability, with the subsequent amortisation of the right-to-use asset over the lease term. As at 31 March 2019 and 2020, the Company does not have any leases. There is no impact on the adoption of IFRS 16.

There are no other IFRS's or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.

(b) New standards, amendments and interpretations not yet adopted by the Company

The standards and interpretations that are relevant to the Company, issued but not yet effective, up to the date of issuance of the Financial Statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

Standard Effective Date

IFRS 3 (Amendments) Business Combinations *1 January 2020

IAS 1/8 (Amendments) Definition of Material 1 January 2020

Revised Conceptual Framework for Financial Reporting 1 January 2020

IAS 1 (Amendments) Presentation of financial statements *1 January 2020

*Subject to EU endorsement

The Directors are actively considering the effects upon the financial statements and at the time of approval do not consider that the financial statements will be subject to material changes.

3. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to shareholders by the weighted average number of ordinary shares ("WANS") outstanding in the period. Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Basic earnings per share is considered to be the same as the diluted earnings per share as any dilutive share options and warrants in issue are considered to be 'out of the money' and therefore have a nil dilutive effect.

4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Below are the additional funds the Company has committed to the various classes of investments in the respective periods.

No impairment of the value of the non-current financial assets at fair value through profit or loss has been provided for in respect of this reporting period. The fair values of all current financial assets at fair value through profit or loss are based on their bid prices in an active market in the case of assets that are listed on a recognised exchange.

In April, May and June 2020, TSI sold its entire holding in Power Metal Resources plc. The Company received proceeds of £59,583 with a realised gain on sale of £27,672.

5. SHARE CAPITAL

As at the end of the reporting period the issued share capital in the Company was as follows:

5. SHARE CAPITAL - continued

6. OTHER RESERVES

7. SHARE BASED PAYMENTS

The table below represents the weighted average exercise price (WAEP) of, and the movements in, share options and warrants during the period:

8. POST BALANCE SHEET EVENTS

On 11 November 2020, the Company announced that it has conditionally agreed to acquire the shares in BrandShield Limited not currently held by TSI for an aggregate consideration of approximately £13.15 million. It also announces that the Company has at the same time raised approximately £3.2 million by way of a Placing from institutional and private investor and Subscriptions at 20p per share (following a proposed 200:1 share consolidation) to finance growth of the Enlarged Group. Subject to shareholders' approval in General Meeting, Admission will become effective, and dealings in the Enlarged Ordinary Share Capital, will commence on AIM on or around 1 December 2020.

The interim financial information document will also be available on the Company's website www.twoshields.co.uk.