Brainspark to raid Infusion

Brainspark posted a loss of £811,000 against last year's £8.32m deficit, while net assets fell by £800,000 to £6.2m. It did not generate any turnover due to the depressed market conditions that are preventing it from cashing in on its investments, though it said "a few" companies are ready to IPO once conditions improve.

The company said it would proceed with the acquisition of a number of Infusion's investments once its own share price had reached a level of at least 3.75p. In the last six weeks, shares have soared from 2.25p to today's price of 4p, enabling the group to make a move, which was given shareholder approval at its AGM in late July.

At the start of the year, Brainspark pledged to reduce headcount in order to pare costs, while evolving its business model. The company now has just two employees and cash burn diminished to less than £80,000 per month during the second-quarter, and is set to fall further once operating costs are rationalised following the Infusion deal.

Brainspark chairman Francesco Gardin said that the sole incubator approach had clearly not worked, given the adverse market conditions that have plagued the sector for more than two years.

The group subsequently decided to diversify by offering a range of financial services in order to generate revenues from fees, and two deals under Brainspark's management have been formally approved and are awaiting sign off, proving that there is life beyond incubation.

Cash balances fell by around £2.2m in the past year, but by just £418,000 in the first-half. At 30 June the company had £4.6m in the bank, although a £1m loan to Infusion in mid-August will have reduced this.

It expects investee companies EasyArt and The Usability Company to reach positive cashflow by the fourth-quarter and has stopped supporting businesses that are not attracting any third-party funding, so its cash pile should only be immediately affected by ongoing costs and any fees incurred from the prospective Infusion deal.





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