TIDMDVRG
RNS Number : 9514D
Deepverge PLC
25 October 2022
25 October 2022
DeepVerge PLC
("DeepVerge" or "Company")
Historical Related Party Transactions
DeepVerge (AIM: DVRG), the 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, provides the following disclosure with
regard to two historical related party transactions ("RPTs") dating
back to 2018 and 2019 respectively.
Under AIM Rule 13 both of these transactions were required to
have been notified at the time each was entered into. The Board
regrets the unintentional oversight resulting in these disclosures
not being made on a timely basis and has implemented relevant,
improved internal controls to prevent this happening in the
future.
Historical RPT - 2018 - Background
The original business of the Company was established in 2016 and
it was admitted to trading AIM in April 2017, at which time it
owned several businesses which had been acquired in late 2016 and
early 2017. These businesses were acquired from their owners by the
Company in return for shares in the Company. One of these parties
was MediNova AG, which had sold TSPro GmbH to the Company in
December 2016 and which resulted in MediNova AG becoming a
substantial shareholder in the Company. A director and shareholder
of MediNova, Helmut Schlieper, also became a director of the
Company.
Ahead of the Company's admission to trading on 5 April 2017, and
as disclosed in the Company's Admission Document, the Company (then
called Integumen plc) entered into an agreement ("MediNova Services
Agreement") with MediNova AG on 27 March 2017 to provide various
services to the Group (to the Company's subsidiary TSPro) for fees
of EUR21,000 per month. These services provided by MediNova related
to the development and commercialisation of technologies in the
oral health arena which were initially set out in a work order
between the parties dated 29 March 2017 (the "MediNova Work
Order"). The MediNova Work Order continued until 31 December 2018.
The MediNova Work Order provided that MediNova would, inter alia,
assist the Company with product development, intellectual property,
media, advertising, sales, strategy, finance and regulatory
management services.
In February 2018, a further Work Order ("Further Work Order")
was signed between the Company and MediNova AG which increased the
monthly payment from EUR21,000 to EUR30,000 with effect from April
2017, and extended the arrangement until 31 December 2020.
MediNova was a related party under the AIM Rules by virtue of
its shareholding, and the Company's agreement to the further Work
Order constituted a related party transaction under AIM Rule 13.
Accordingly, the directors at that time should have notified the
Nominated Adviser, should have opined on whether the agreement was
fair and reasonable insofar as its shareholders were concerned and
made a notification in compliance with AIM Rule 13 at the time it
was entered into.
It appears that the agreement for the Further Work Order was not
presented to the Board for consideration,, and that there was a
failure by the Company to identify the requirements of AIM Rule 13.
Additionally, the Company did not consult with its Nominated
Adviser on this matter nor notify as required under AIM Rule
13.
In the year ended 31 December 2017, MediNova AG charged
EUR270,000 (GBP237,000) to TSpro GmbH (then a subsidiary of the
Group).
In the year ended 31 December 2018, MediNova AG charged
EUR360,000 (GBP319,000) to TSpro GmbH.
In December 2018 the Company entered into a disposal agreement
("Disposal Agreement") whereby TSpro was sold to MediNova AG
("Disposal"). As part of the Disposal Agreement the Group's
obligations under the MediNova Services Agreement and the Work
Order were terminated, and the Group was no longer responsible for
amounts owing to creditors of TSpro. This included amounts due from
TSpro to MediNova which the Directors, based on their enquiries,
have estimated at cGBP223k. Under the Disposal Agreement the
Company received consideration of EUR1, and was released from short
and long term liabilities (owed by TSpro) of EUR1.34m (GBP1.19m).
This transaction was treated as a related party transaction under
AIM Rule 13 and notified on 18 December 2018.
The composition of the Board of the Company has changed
significantly since the Further Work Order was signed in February
2018. Gerard Brandon and Camillus Glover joined the Board of the
Company in August 2018, with Fionan Murray joining in May 2019 and
Nigel Burton in November 2020.
The current Board has reviewed the evidence that has been
available to it. However, as TSpro is no longer part of the Group,
the current Board has not been able to access all the information
that may have been available to assess and justify the terms of the
Further Work Order at the time it was entered into. Whilst the
current Board presumes that there would have been bona fide reasons
for entering into the Further Work Order, the lack of detailed
information has made it impossible to confirm this. All the current
Board members are independent of MediNova AG.
For the period April 2017 to December 2018, EUR630k (cGBP556k)
was charged by MediNova AG to TSpro, of which EUR441k (GBP390k)
would have been due under the MediNova Services Agreement (with the
balance of EUR189k (cGBP165k) charged as a result of the Further
Work Order).
The Directors estimate that EUR247k (cGBP223k) remained
outstanding (from TSpro GmbH to MediNova AG) at the time of the
Disposal, and was effectively written off as part of the Disposal.
In addition, the Group was no longer responsible for paying any
additional monthly charges resulting from the extension of the
period covered under the MediNova Services Agreement to 31 December
2020.
As such, to the extent that the Further Work Order resulted in
increased charges to the Group, in practice these were not
physically paid (and were written off as part of the Disposal).
Given that the Further Work Order in practice did not result in an
increase in cash costs to the Group the current Directors (all of
whom are independent) consider, having consulted with SPARK
Advisory Partners, its nominated adviser, that the terms of the
Further Work Order were fair and reasonable insofar as its
shareholders are concerned.
Historical RPT - 2019 - Background
On 1 January 2019 the Company entered into an agreement ("the
Agreement") with Mrs Dagmara Brandon, the wife of Mr Gerard
Brandon, the Company's Chief Executive, to provide professional
services relating to administration and management of the Group's
intellectual property portfolio.
The remuneration for provision of these services was at a tariff
of EUR2,500 per month, with a notice period (by either party) of
two months. This engagement was intended to provide short term
support to the Company. The expectation at the time was that the
arrangement would be temporary and there would not be ongoing work
that would necessitate a longer engagement. The Company was
invoiced for work undertaken in January 2019 for EUR1,250, in April
2019 for EUR2,500, in each of May, June and July 2019 for EUR1,250
per month). Ross Andrews and Camillus Glover the independent
directors at the time (as Gerard Brandon was not regarded as
independent) considered and approved this engagement at the time it
was signed. The Nominated Adviser was not consulted at this
time.
As time progressed Mrs Brandon's support was used more
consistently and since August 2019 the Company has paid EUR2,500
per month for her services. There have been no variation to the
terms of the Agreement.
As at 30 September 2019, the aggregate of (i) the amounts
already due to be paid to Mrs Brandon for services provided since 1
January 2019 and (ii) the minimum additional amounts that would be
contractually due to Mrs Brandon in relation to the two months'
notice period exceeded the threshold for treating these
transactions as related party transactions under AIM Rule 13, using
the principle of the aggregation of transactions with the same
party in AIM Rule 16.
As such, under AIM Rule 13 these transactions were required to
have been notified as at that date.
The composition of the Board of DeepVerge has changed since the
Company entered into the Agreement (in January 2019), with Fionan
Murray joining the Board in May 2019 and Nigel Burton in November
2020.
Notwithstanding the original approval of the then Board in
December 2018 the current Board, excluding Gerard Brandon who is
not considered independent, ("Independent Directors") have
considered the terms of the related party transaction having
consulted with the Company's nominated adviser in compliance with
AIM Rule 13. The Independent Directors consider, having consulted
with SPARK Advisory Partners, its nominated adviser, that the terms
of the Agreement are fair and reasonable insofar as its
shareholders are concerned.
Enquiries:
DeepVerge plc Ross Andrews, Chairman +44 (0) 1904 40 4036
SPARK Advisory Partners
Limited
(Nominated Adviser) Neil Baldwin +44 (0) 113 370 8974
Turner Pope Investments
(TPI) Limited Andy Thacker/James
(Broker) Pope +44 (0) 20 3657 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 AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCMIBTTMTATTRT
(END) Dow Jones Newswires
October 25, 2022 02:00 ET (06:00 GMT)
Integumen (LSE:SKIN)
Historical Stock Chart
From Oct 2024 to Nov 2024
Integumen (LSE:SKIN)
Historical Stock Chart
From Nov 2023 to Nov 2024
