BrandShield : Report and Accounts 31 DECEMBER 2020

Company Number: 02956279

ANNUAL REPORT AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

FOR

BRANDSHIELD SYSTEMS PLC

(FORMERLY TWO SHIELDS INVESTMENTS PLC)

BRANDSHIELD SYSTEMS PLC

CONTENTS OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

	Page
Company Information	1
Chairman's Statement	2
Board of Directors	7
Strategic Report and Corporate Governance Report	9
Report of the Directors	22
Statement of Directors' Responsibilities	27
Report of the Independent Auditor	28
Consolidated Statement of Comprehensive Income	34
Consolidated Statement of Financial Position	35
Company Statement of Financial Position	36
Consolidated Statement of Changes in Equity	37
Company Statement of Changes in Equity	38
Consolidated Statement of Cash Flows	39
Company Statement of Cash Flows	40
Notes to the Financial Statements	42

BRANDSHIELD SYSTEMS PLC

COMPANY INFORMATION

FOR THE YEAR ENDED 31 DECEMBER 2020

DIRECTORS:	A Moscovici (Non-Executive Chairman)
	Y Keren (Chief Executive Officer)
	Y Zantkeren (Chief Technical Officer)
	R Freedman (Chief Financial Officer)
	Dr. Z Amrolia (Non-Executive Director)
	J Taylor (Non-Executive Director)
COMPANY SECRETARY:	Orana Corporate LLP
	Eccelston Yards, 25 Eccleston Place
	London SW1W 9NF
REGISTERED OFFICE:	Hyde Park House
	5 Manfred Road
	London SW15 2RS
REGISTERED NUMBER:	02956279 (England and Wales)
INDEPENDENT AUDITOR:	PKF Littlejohn LLP
	Statutory Auditor
	15 Westferry Circus
	Canary Wharf
	London E14 4HD
BANKER:	Barclays Bank Plc
	1 Churchill Place
	London E14 5HP
NOMINATED ADVISER:	Spark Advisory Partners Limited
	5 St John's Lane
	London EC1M 4BH
REGISTRAR:	Link Asset Services
	Northern House, Woodsome Park
	Fenay Bridge, Huddersfield
	West Yorkshire HD8 0LA
JOINT BROKERS:	Shore Capital Stockbrokers Limited
	Cassini House, 57 St. James's Street
	London SW1A 1LD
	Tennyson Securities
	65 Petty France
	London SW1H 9EU

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BRANDSHIELD SYSTEMS PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2020

BrandShield Systems Plc is the 100% owner of BrandShield Limited, an Israeli based online threat hunting, cyber security business. BrandShield specialises in the monitoring, detection and removal of online threats such as phishing attempts, executive impersonation, counterfeit products, trademark infringements and more. BrandShield was established to revolutionise the way companies can protect their digital assets outside their security perimeter. Ever since launch BrandShield has introduced groundbreaking innovative technologies for online brand protection powered by artificial intelligence, machine learning and big data analysis to provide the most automated and relevant solutions for the 21st century.

BrandShield Systems Plc also 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). The Company is focused on the orderly disposal of the legacy mining investments where value can be released for our shareholders.

Strategy

Since the completion of the RTO transaction with Two Shields Investments Plc which completed in December 2020, the Board is almost entirely focused on the expansion and development of BrandShield. To be clear, on the completion of the RTO the Company ceased to be an investing company and is now an operating company with BrandShield at its absolute core.

Therefore, any other investments that the Company holds are viewed as tangential and the focus will be on releasing those investments at the appropriate time to extract maximum value for our shareholders. The new Board, which was constituted in December 2020, has been established to drive the continued rapid expansion of BrandShield's offering globally. The acquisition of further clients is the priority as the Company seeks to increase Annual Recurring Revenue ("ARR") from clients in a variety of sectors. This is being achieved through the expansion of the marketing and sales functions within the Company, fuelled by the fundraise achieved at the RTO point and ongoing strong Revenue Growth from our expanding customer base.

In line with the Company's strategy for its legacy mining assets, BrandShield Systems Plc will look to realise those investments as liquidity options emerge. These options include partnering with operators that the Board feels can extract more optimal value from existing holdings or selling our holdings for cash.

BrandShield Limited

Clearly, the highlight of the period was the acquisition of 100% of the share capital of BrandShield Limited, the re-naming of the Company to BrandShield Systems Plc and an associated fundraise of $3.96m (£3.2m) to be focused on the expansion of sales and marketing activities to expand the customer base.

The ARR as at year end stood at $3.278m a 71% increase from 2019 and continues the very strong growth trend. This coincided with an 85% increase in new business ARR in the period. That strong growth trend has continued in to 2021 with the May ARR figure standing at $3.826m, a 93% increase in the ARR relative to May 2020.

The impact of the Covid pandemic on global eCommerce has been profound with eCommerce representing some 21.3% of all purchases in the US in 2020, up from 15.8% prior to the outbreak in 2019. This unprecedented level of growth, which the Company warned about in an announcement of 25 March 2020, has brought with it a huge increase in associated fraudulent activity as criminals seek to exploit individuals through the use of phishing scams, impersonation and

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BRANDSHIELD SYSTEMS PLC

CHAIRMAN'S STATEMENT - continued

FOR THE YEAR ENDED 31 DECEMBER 2020

counterfeiting. This has been across all sectors and also targeted at the pharmaceutical companies engaged in the development of vaccines.

BrandShield is a fast-growing provider of cyber solutions, delivering an end-to-end digital brand protection and online threat hunting 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 SaaS (Software as a Service) 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 PPC ads. The AI (Artificial Intelligence) and machine learning nature of the software means that it is improving itself continually as it adds new datapoints and identifies new types of threats. In response to customer demand, BrandShield has also 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.

In January 2021, the Company announced the deployment of cutting edge Image Recognition and Optical Character Recognition ("OCR") on its online threat hunting platform. The image recognition technology detects images similar to or identical to those copyrighted by the Company's customers. The technology is able to link these images to global networks of fraudulent activity across hundreds of e-commerce marketplaces. Once a single infringement is identified the technology will link it to other fraudulent uses on the web, and then process their collective takedowns at the click of a button. Traditionally, image infringement identification involves the manual review of thousands of individual listings across platforms. BrandShield's enhanced technology reduces this process exponentially.

In March 2021 these capabilities were extended to cover social media platforms ensuring that BrandShield's product offering remains at the very cutting edge of the sector. BrandShield's OCR capability for brand protection on social media platforms allows text to be interrogated that lies within images on fraudulent social media posts or pages. This adds a further layer of abuse identification for use against those fraudsters that attempt to hide brand names and product descriptions within an image of posts or profile photos rather than in separate, purely textual fields.

BrandShield currently works with many global brands and has an international blue-chip client base including Fortune 100 companies. Fraudsters and counterfeiters are sector agnostic and BrandShield's customers therefore cover a wide variety of sectors including financial services, pharmaceuticals, fashion, online, sports, entertainment, travel and more.

Throughout 2020 BrandShield added customers from a variety of sectors. These have included the Pharmaceuticals Security Institute ("PSI") which was announced in November 2020. 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 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

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