Half-year Results

Braveheart Investment Group plc (AIM: BRH), announces its interim results for the six months ended 30 September 2023.

Highlights:

• Loss of £732,000 in the six months ended 30 September 2023 (six months ended 30 September 2022*: £561,000), loss per share of 1.15p
• Net Asset Value ("NAV") of £9,826,816 at 30 September 2023 (30 September 2022*: £8,374,878), NAV per share of 15.42p
• Decision to seek a cash buyer for Paraytec with the objective of realising near term shareholder value.

*restated

Financial Review

• Valuation of Portfolio Investments: £157,000 (31 March 2023: £154,000)*
• Valuation of unconsolidated Strategic Investments: £8,684,000 (31 March 2023: £9,304,000)**

* these are the historic investments made by Braveheart up to 2015

** these are the new investments made by Braveheart since 2015

Therefore, the total unaudited value of our unconsolidated investment portfolio as at 30 September 2023 is £8,841,000 (31 March 2023: £9,458,000). As at 30 September 2022, the comparable total valuation of our investments was £5,348,000.

Net asset value ("NAV") of £9.8 million as at 30 September 2023 (30 September 2022: £8.3 million, 31 March 2023: £10.5 million). This resulted in a reduction in net asset value per share from 17 pence as at 31 March 2023 to 15.42 pence as at 30 September 2023.

The Group reports a loss after tax for the period under review of £732,000 (September 2022: loss of £561,000). This equates to a loss per share of 1.15 pence (September 2022: 0.88 pence).

The loss and the reduction in Strategic Investments in the half-year came principally from the reduction in the valuation of Phasefocus Holdings, details provided in the narrative below.

The Directors believe that the Strategic Investments continue to be the most likely drivers of growth in shareholder value over the remainder of the current year and so have concentrated the remainder of this CEO Statement on their operations and prospects.

Strategic Investments Overview

Paraytec Limited (Braveheart owns 100% per cent of the company)

Paraytec develops high performance specialist detectors for the analytical and life sciences instrumentation markets. Its rapid test instrument ("CX300") is being developed for identifying cancer and pathogens, including viruses.

The CX300 instrument has been successfully CE marked and tested in the in the detection of Adeno-associated viruses, which are used in gene therapy. An instrument has been delivered to the Gene Therapy Innovation and Manufacturing Centre ("GTIMC") in Sheffield, for 'industrial' testing in GTIMC's research and development lab.

The first sale of its CX300 instrument has been made to Nottingham Trent University (NTU) for the laboratory of Professor Elisabetta Verderio Edwards, who's work focuses on the role of extracellular factors in cell survival in conditions of neurodegeneration and tissue repair. The CX300 instrument will be used to further NTU's research in Alzheimer's, Dementia and Parkinson's diseases.

Paraytec has agreed a further sales contract with the University of Nottingham (UoN) for a CX300 instrument. The instrument is to be installed in the laboratory under the leadership of Professor Snow Stolnik. Her research centres on design and development of nano-sized drug delivery systems and their interactions with cells, in the context of cell targeting, trafficking, and drug exposure. The CX300 instrument is to be used to advance and further develop UoN's understanding of nano-system properties, as well as their association with cells.

In July 2023, Paraytec's COVID-19 test completed a very successful clinical study at Sheffield Teaching Hospitals NHS Foundation Trust, in which it proved highly effective in detecting the presence of SARS-CoV-2 in recently infected participants.

Several important conclusions were made on the basis of the statistical analysis of data arising from the clinical trial. Primarily, this analysis confirmed the clear utility of Paraytec's Covid test as a potential point-of-care test for the detection of SARS-Cov2 in swab samples taken from people with symptoms of respiratory illness.

The trial compared the CX300-based test to either qPCR or viral culture as a means to detect people who were infected with SARS-Cov2, as well as utilising the CX300 to identify the best location - nose, throat or saliva - from which to obtain swab samples for analysis. Paraytec's test detects the presence of viral particles, PCR determines the number of viral genomes, while viral culture detects viruses by determining their ability to kill animal cells growing in a laboratory - each a different measure of the presence of virus in a sample.

Viral culture was poor at identifying people who were infected with SARS-Cov2, correctly identifying people 30% of the time. This likely reflects the limitations of the culture conditions to facilitate the growth of viral particles that normally only infect epithelial cells present in the nasal passage, mouth and throat. Paraytec's test identified people who were positive by PCR around 93% of the time. This value rose to 100% in people with a very low viral load indicating the particular efficacy of the Paraytec test in identifying infected individuals at the very beginning of the infection cycle when viral particles present are relatively few in number, but at the point where from a clinical perspective, it is most important to identify infected individuals to facilitate isolation to prevent spread of disease, and to provide early intervention in vulnerable patients.

The trial demonstrated that, compared with taking samples uniquely from the nasal cavity, or from saliva, a combined sample from nose and throat was the optimal sampling regimen, as the former were successful at detecting viral particles in SARS-Cov2 positive participants 84% and 76% of the time, respectively. These data likely indicate a preference of the viral variants in circulation over the course of the trial, for cells in the throat compared to the nose and or mouth.

Importantly, from a research perspective, the data obtained in the trial revealed the absence of correlation between viral particle numbers estimated by Paraytec's test and the number of genomes detected by PCR. The cellular processes by which viral genomes and viral coat components are generated, are different. The trial finding indicates that cells produce viral genomes and coat components in varying relative amounts throughout the early stages of an infection, and this explains why some samples (about 7%) tested positive by PCR but negative in Paraytec's test. These likely reflect people who are no longer infectious but whose samples contain remnants of viral genomes that were not assembled into functional viral particles.

The results successfully demonstrate the efficacy of Paraytec's COVID-19 test and Professor Carl Smythe from the University of Sheffield's School of Bioscience, who led the work with Paraytec, commented: "We are particularly impressed that this technology has the potential to be used in a point-of-care setting to rapidly detect the presence of viral particles in people with early symptoms of infection, WITHOUT the need for sophisticated and expensive centralised laboratory-based PCR testing. Of particular note is its ability to detect viral particles at low viral loads indicating the particular efficacy of the Paraytec test in identifying infected individuals at the very beginning of the infection cycle when viral particles present are relatively few in number. It thus provides an opportunity to identify infected individuals to facilitate their isolation to prevent spread of disease, and to provide early intervention in vulnerable patients."

Paraytec now offers the CX300 instrument and ParaySelect™ separation technology for sale to research laboratories, as a very effective means for researchers to investigate mechanisms of viral infection in patient populations as well as in model cell systems, whilst engaging with partners wishing to produce a point of care instrument.

Paraytec has now applied its CX300 instrument and ParaySelect™ separation technology to Covid-19, sepsis detection and a growing list of further applications. The Board of Braveheart believes that it is in the best interests of the Company's shareholders to seek a cash buyer for this investment, in which Braveheart has a 100% interest. The Company has engaged an M&A specialist to market Paraytec in order to seek acquirers for the business, products and technology portfolio. This process is at an early stage but many of the potential acquirers are already familiar with the business and have been awaiting results from the sepsis Proof of Concept.

Phasefocus Holdings Limited (Braveheart owns 48.3% of the company)

Phasefocus' patented imaging and analysis technology uses a novel computational method for high fidelity Quantitative Phase Imaging ("QPI") and advanced microscopy, known in the scientific literature as "ptychography". The technology is useful for a wide range of applications including live cell imaging, engineering metrology and electron microscopy.

On 14 August 2023, Phasefocus announced the launch of its revolutionary new T-Cell Killing Assay for the Livecyte® cell imaging platform https://www.phasefocus.com/about/news-events/news/t-cell-assay-announcement. The new assay quantifies interactions between immune cells and cancer cells, addressing a major unmet need for researchers developing the latest novel cancer therapies. In the assay, the characteristics of T cell interactions in the period immediately preceding target cell death, can be measured independently from cytotoxicity. Livecyte's T-Cell Killing Assay offers unparalleled insights at the single-cell level, empowering researchers to unlock new frontiers in cancer therapy development and evaluation.

The company shipped two Livecyte systems to China in October and made two further system sales to the Far East, with shipment expected in December.

As reported on 21 August 2023, Braveheart made a further investment of £150,000, taking its total interest to 48.3% of the issued share capital of Phasefocus.

Kirkstall Limited (Braveheart owns 86.11% of the company)

As reported on 8 September 2023, Kirkstall, in conjunction with the Biomedical Ultrasonics, Biotherapy and Biopharmaceutical Laboratory within the Institute of Biomedical Engineering at the University of Oxford, has developed an "organ on a chip" model of an innovative, milli-fluidic system, human blood-brain barrier which has been used to map the interaction between the blood-brain barrier and brain cancer.

This is the first time a dynamic milli-fluidic model has been developed where the interactions between the blood-brain barrier and medulloblastoma brain cancer spheroids have been demonstrated. The model uses the Kirkstall's Quasi Vivo® platform, a unique milli-fluidic system. This innovation will enable the observation of the in vitro performance of drugs designed for treating brain cancer and central nervous system diseases such as Alzheimer's.

On December 6th, Kirkstall presented its QV1200 products and provide training workshops for prospective users at the 3R-days conference in Innsbruck, Austria.

Kirkstall's research team at University of Sheffield has now developed its initial batch of toxicity test assays for liver, lung and gut cells and will offer these to its customers. In parallel work, researchers at Oxford University have developed a blood-brain barrier assay for Kirkstall. The aim is to provide customers with data to prove that QV1200 system replicates the human physiology more effectively than other flow systems.

Other investments

At 30 September 2023, Braveheart held investments in the following AIM listed companies:

Aukett Swanke Group plc (Braveheart held 11.49% of the company (31 March 2023: 12.96%)): a professional services group that principally provides architectural and interior design services in the primary international market sectors of offices, residential, education, industrial, hospitality and mixed use or 'hybrid' developments. Post period, Braveheart has sold 1,650,000 shares and hence reduced its holding to 32,032,351 shares (10.93% of the company).

Autins Group plc (Braveheart held 16.09% of the company (31 March 2023: 15.98%)): an industry-leading designer, manufacturer and supplier of acoustic and thermal insulation solutions for the automotive industry and other sectors.

Image Scan Group plc (Braveheart held 8.06% of the company (31 March 2023: 7.05%)): a specialist supplier of X-ray screening systems to the security and industrial inspection markets. Post period, Braveheart purchased 250,000 shares and hence increased its holding to 11,283,276 shares (8.24% of the company).

A total of 460,614 shares in Velocity Composites plc were sold during the period. No shares were held in Velocity Composites plc at the end of the period.

Your Board believes these technology-driven companies each has a significant opportunity to build sales and deliver profit. As always, Braveheart is an active investor, regularly communicating with their boards and seeking to introduce opportunities that help deliver shareholder returns.

The Company also has a number of portfolio investments that are smaller scale legacy investments which we continue to manage and seek exits where appropriate.

Outlook

The decision to seek a buyer for Paraytec is considered to be the most effective way for Braveheart shareholders to realise value from their considerable investment and the significant technological progress made by the Company over recent years. There can be no guarantee of concluding a sale but interest has already been received from credible and well known operators in the sector and we will keep shareholders abreast of events as the develop.

Trevor Brown

Chief Executive Officer

Condensed consolidated statement of comprehensive income

for the six months ended 30 September 2023

Adjustments to reconcile profit before tax to net cash flows from operating activities

Notes to the interim financial statements

1 Basis of preparation

The financial information presented in this half-yearly report constitutes the condensed consolidated financial statements (the interim financial statements) of Braveheart Investment Group plc ("Braveheart" or "the Company"), a company incorporated in the United Kingdom and registered in Scotland, and its subsidiaries (together, "the Group") for the six months ended 30 September 2023. The interim financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 March 2023 and have been prepared in accordance with UK-adopted international accounting standards in accordance with the requirements of the Companies Act 2006. The financial information in this half-yearly report, which was approved by the Board and authorised for issue on 13 December 2023 is unaudited.

Going Concern

• New and amended standards adopted by the Group
• New accounting policies adopted by the Group

2 (Loss)/Earnings per share

• Level 1 - valued using quoted prices in active markets for identical assets;

The fair values of quoted investments are based on bid prices in an active market at the reporting date. All unquoted investments have been classified as Level 3 within the fair value hierarchy, their respective valuations having been calculated using a number of valuation techniques and assumptions, notwithstanding that the basis of the valuation methodology used most commonly by the Group is 'price of most recent investment'. When using the DCF valuation method, reasonably possible alternative assumptions could have a material effect on the fair valuation of investments. The valuation of PhaseFocus Holdings Limited has been amended to be in line with market feedback our board received during Phasefocus' search for potential acquirers. The impact on the fair value of investments if the discount rate and provision shift by 1% is £88,415 (2022: £53,479).

4 Share capital

5 Availability of Interim Results

Shareholder communications

A copy of this report is available on request from the Company's registered office: 1 George Square, Glasgow, G2 1AL. A copy has also been posted on the Company's website: www.braveheartinvestmentgroup.co.uk.