TIDMDVRG
RNS Number : 4959I
Deepverge PLC
19 April 2022
19 April 2022
DeepVerge PLC
("DeepVerge" or "the Company" or "the Group")
Trading Update - Q1 2022 Sales up 84% to GBP2.38m (Q1 2021:
GBP1.29m)
DeepVerge signs manufacturing services framework with Microsaic
Systems plc
Post covid market and sales activity intensifies across all
international markets
DeepVerge plc (AIM: DVRG), is pleased to announce increased
sales (unaudited) across all divisions delivering GBP2.38m (Q1
2021: GBP1.29m unaudited) in the best first quarter in the history
of the Company. Post-covid marketing and sales activity has been
intensified across all international markets with existing
solutions as well as high profile R&D projects progressing on
all fronts, generating enquiries and deep engagement from large
corporate entities that are both potential partners and
customers.
Manufacturing Services Framework Agreement :
In addition, DeepVerge's subsidiary Innovenn UK Limited has
signed a Manufacturing Service Framework Agreement ("MSFA") with
Microsaic Systems plc ("Microsaic") to further develop Modern
Water's scientific instruments range. These include the optofluidic
based Microtox(R) PD for wastewater and Microtox(R) BT Breath Test
solutions., the Microtox (R) LX and (R) FX photosensitivity range
for toxicity detection and the voltammetry based Microtrace range
for heavy metals detection.
Fin Murray, DeepVerge COO, commented:
"The combined skillset of chemists, physicists and engineers
within Microsaic that has delivered a complex and world beating
mass spectroscopy range of equipment will advance the ambitious
Modern Water development programme to create a last mile solution
of interconnected sensors to detect a comprehensive range of bad
actors in water from toxins to pathogens to PFAS in real time and
to take detection to population centres with miniaturised and
ruggedised mobile units. This agreement also progresses our supply
chain strategy of working with local trusted partners to create
certainty over developments and deliveries in an uncertain
world"
Gerard Brandon CEO DeepVerge plc, commented:
"This quarter has been the best first quarter in the history of
the DeepVerge Group with new products and services delivering
increased sales across every division. Growth remains on track to
achieve triple digit percentage revenue growth year-on-year,
similar to the last 3 and a half years."
The MSFA sets out the terms and conditions for Microsaic to
improve and manufacture these complex instruments and to provide
the design, assembly, quality, and project management functions
necessary to produce and ship equipment based on DeepVerge approved
specifications, design, and quality requirements.
The MSFA extends the parties' existing relationship which was
formalised in the 3-year framework agreement announced on 24 March
2021 [i] , under which Microsaic supplies its own miniaturised mass
spectrometry equipment and services on a non-exclusive basis across
DeepVerge's global sales, marketing and distribution channels, for
healthcare diagnostic and environmental health applications.
Further manufacturing services contracts with Microsaic may
follow under the new MSFA, subject to satisfactory execution of the
initial contract and mutual agreement.
The mutual goals under the MSFA include ensuring the timely
availability of quality products, in the desired quantities, as
well as meeting high workmanship and quality standards and ensuring
delivery needs are met. Furthermore, DeepVerge and Microsaic will
jointly strive to achieve value pricing consistent with prudent
practices to balance costs and the availability of services
materials.
The MSFA has a one year term, and shall automatically renew for
successive one year increments, unless either party requests within
90 days prior to the anniversary its intention not to renew.
An initial order of GBP400,000 has been placed for multi-sensor
upgrades of the Microtox PD and Microtox BT ranges which are Modern
Water's optofluidic based sensors designed to identify pathogens in
realtime.
Additional disclosure is made below in relation to AIM Rule
13.
Other Partner Project Development:
A recent framework agreement with Abingdon Health plc adds
further scientific knowledge especially in the area of Lateral Flow
Tests ("LFT") specifically involving the integration of the use of
LFTs into the Modern Water optofluidic units to increase the volume
of recurring consumable tests each piece of equipment can do.
Commercial Update:
On the marketing front, two years of being unable to demonstrate
divisional capabilities and engage face to face with stakeholders
is now being made up with attendances at multiple international
cosmetic, beauty and environmental events with shows on the west
coast of America, in particular San Diego and San Francisco.
Skin Trust Club sparks interest of Silicon Valley:
Skin Trust Club with its mix of microbiology, microbiome data
and AI delivered via the Skin Trust Club app with the capability of
addressing a mass worldwide skincare market has resonated in
Silicon Valley. Large US cosmetics retailers consider Skin Trust
Club as the next level of science based skin product
recommendations and have expressed interest in a minimum test order
of 5,000 units to be trialled online and through retail outlets
across the USA and Europe. Multiple global skin care organisations
have invited Skin Trust Club to engage with their innovation teams
both in the US and Europe. Discussions with Tier 1 cosmetic brands
to add their product lines to the Skin Trust Club App product
recommendations are underway. Collaboration discussions are also
underway with multiple Silicon Valley VC backed skin care
organisations. Health executives from top 3 Nasdaq internet
corporations who attended Skin Trust Club presentations on AI have
indicated a desire for follow up meetings. Multiple high tech and
high end beauty journalists that cover 'next wave' technologies
have expressed interest and have interviewed senior DeepVerge
scientists, AI and technology specialists.
Labskin expansion in US
Labskin has successfully demonstrated its sales growth
capabilities as well as exhibiting new products and service
developments at conferences in San Diego, San Francisco, London and
Paris. Major existing and a number of Tier 1 customers are urging
the Labskin division to expand laboratories in the USA for skin
testing services. As part of the expansion plans, the life science
division is discussing order guarantees for new business in the US
market. While discussions are underway on a framework agreement
outlining terms for R&D, exclusivities and revenues, no
guarantees are given as to the outcome of these negotiations.
Labskin also unveiled new products and services including a new
scalp model and has received demand for a very strong pipeline of
new business across the hair care and shampoo sector.
Engagement with US cities for pathogen detection
Modern Water is at the forefront of the British Government's
Sentinel wastewater project and is now engaging at US local and
national government programme levels after showcasing the
Microtox(R) PD optofluidics offering at the Cincinnati, Ohio, USA,
Wastewater Conference. A number of US cities including existing
Modern Water customers are engaging for first trials of the
solution.
Medium Ticket (GBP1m+) installations bids:
On the sales front Modern Water is bidding for multiple medium
ticket (potential order size of GBP1m plus) deals for site
installations in the Middle East and South Asia. These are
consortium projects where local companies lead and Modern Water
provides equipment and support as part of bigger solutions. Should
any of these bids be successful, the main obstacle to these deals
completing is supply chain issues, primarily with China, where
other consortium members are experiencing delay roll-outs due to a
shortfall of key components for their parts of the projects.
Supply Chain Management:
To the extent Modern Water can control its own supply chain in
this environment, it is working closely with partners and recent
acquisitions to internalise as much as its supply chain as it can.
The agreement announced with Microsaic is part of this. In
addition, the Glanaco site in Ireland is up and running and
producing equipment including the fitting out of the first mobile
laboratories to showcase the extent of the real time water tests
the Group can offer. The recent Glanaco acquisition has also
increased capacity as a logistics hub with both equipment and
reagents for Europe and the Rest of the World now being carried out
from this site.
Related Party Transaction:
As set out above, Innovenn UK Limited, a wholly-owned subsidiary
of DeepVerge, has entered into the MSFA, and an initial work order
for GBP 400,000 has been placed in accordance with the terms of the
MSFA under an agreed statement of work covering the specified
supply of services and product.
The MSFA and associated work order constitute a related party
transaction for the Company under AIM Rule 13, as DeepVerge
directors Gerard Brandon (CEO) and Nigel Burton (Non-executive
Director) are also Acting Executive Chairman and non-executive
director, respectively, of Microsaic. The directors of DeepVerge
who have considered the related party transaction are Ross Andrews,
Camillus Glover and Fionan Murray ("Independent Directors").
The MSFA includes provisions requiring each party to comply with
their respective obligations under AIM Rule 13 and 16 which
includes future work orders under the MSFA.
The Independent Directors of DeepVerge consider, having
consulted with SPARK Advisory Partners Limited, the Company's
nominated adviser, that the terms of the MSFA and associated work
order are fair and reasonable insofar as shareholders are
concerned.
+44 (0) 7340 055
DeepVerge plc Gerard Brandon, CEO 648
SPARK Advisory Partners Limited Neil Baldwin/Andrew +44 (0) 113 370
(Nominated Adviser) Emmott 8974
--------------------- -----------------
Turner Pope Investments (TPI) Andy Thacker/James +44 (0) 20 3657
Limited (Broker) Pope 0050
--------------------- -----------------
Market Abuse Regulation (MAR) Disclosure
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
About DeepVerge plc (www.deepverge.com)
DeepVerge is an environmental and life science group of
companies that develops and applies AI and IoT technology to
analytical instruments for the analysis and identification of
bacteria, virus and toxins; Utilising artificial intelligent data
analytics to scientifically prove the impact of skincare product
claims on skin.
[i]
https://www.londonstockexchange.com/news-article/DVRG/3-year-technology-comm-l-agreem-t-with-microsaic/14911231
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