TIDMDEV
RNS Number : 9192J
Dev Clever Holdings PLC
16 December 2022
16 December 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
NOT FOR PUBLICATION OR RELEASE IN OR INTO THE UNITED STATES OR
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR
THE REPUBLIC OF SOUTH AFRICA, OR ANY PROVINCE OR TERRITORY THEREOF
OR TO OR FOR THE ACCOUNT OF ANY NATIONAL, RESIDENT OR CITIZEN OF
THE UNITED STATES OR ANY PERSON RESIDENT IN AUSTRALIA, CANADA,
JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF
SOUTH AFRICA.
Dev Clever Holdings plc
("Dev Clever" or the "Company")
Intended cancellation of Listing
Rebranding as Veative Group plc
The Board of Dev Clever announces today that the Company intends
to submit a request to the Financial Conduct Authority ("FCA") for
the cancellation of the listing of the Company's ordinary shares
("DevClever Shares") on the Official List and trading on the London
Stock Exchange ("Cancellation").
A copy of this announcement which explains the background to the
Cancellation and the reasons why the Board of Directors unanimously
consider the Cancellation to be in the best interests of the
Company and its shareholders as a whole will be posted to the
Company's shareholders in the coming days.
The announcement will also be available on the investors'
section of the Company's website accessible at
devcleverholdingsplc.com.
Background to intended Cancellation
The Company's shares have been suspended since December 2021 and
while the Board and the Company's advisers have continued to work
toward readmission and satisfaction of the requirements of the FCA,
this process is still to be concluded.
Against this backdrop, the Board has considered the benefits and
drawbacks of currently being a listed company
The Board believes that the Company is unlikely to attract the
necessary material investment from investors to execute its growth
strategy in these current market conditions if it remains suspended
pending re-admission to the London Stock Exchange. The Board is of
the view that, right now, the considerable cost, management time
and the legal and regulatory obligations associated with
maintaining a listing are materially disproportionate to the
benefits to the Company.
It also believes there is currently reduced investment
'appetite' for smaller UK listed companies and pre-profit
technology companies generally and particularly those where
significant capital for growth is required and that it would be
easier to access private market finance. With the planned
cancellation in mind, management has begun discussions with third
parties regarding provision of finance to fund the unlisted
Group.
Following careful consideration, for the above reasons and
having consulted with certain shareholders, the Board has concluded
that it is in the best interests of the Company and shareholders to
request Cancellation to be effected in January 2023.
Future plans
The Board is focused on a period of strategic investment,
restructuring, cost reduction in certain areas of operations and
revenue growth for the Group that should benefit all shareholders
in the longer term.
Following this planned period of restructuring and growth, the
Board will then be able to seek a re-listing of the Company in the
future, in London or on an alternative international exchange which
fairly values the Group's business and its exciting global
prospects.
Rebranding
Steps have begun to complete a rebranding exercise of the
Company and its subsidiaries (the "Group") under the "Veative"
banner and the Company's name will change to Veative Group plc. A
new corporate website will be imminently launched following
Cancellation.
Future strategy
The Group will be a dedicated international education technology
(Ed-Tech) group with the delivery of impactful immersive content at
its core. Its operations will be focused on the provision of:
(i) immersive learning delivered in VR, WebXR and AR formats to
enhance and improve learning outcomes for students leveraging the
Group's position as the owner of an extensive library of
interactive immersive learning content with users in over 25
countries and delivered through strategic partners such as Lenovo
and an international reseller network;
(ii) career discovery offerings to support students and teachers
that are primarily delivered through Launch My Career, an
innovative career discovery focused platform for young people,
launched in India and being rolled out to schools in the NISA
association of c.100,0000 budget private schools of with a version
tailored to the UK and US market in development for 2023; and
(iii) immersive experiences delivered through the Group's
"Future of Work" that allow enterprises to (a) showcase their
organisations and offerings in a revolutionary career metaverse to
school-going students and (b) offer immersive learning and
development content for professional or workplace training,
enabling tomorrow's workforce, and augmenting their ability to
visualise and conceptualise, thereby greatly enhancing productivity
and workplace harmony. The Future of Work leverages the Group's
history and in-house capabilities in delivering immersive
content.
The Group will therefore provide an immersive ecosystem that can
support a learner in making key career impacting decisions through
a tailored journey of learning from the classroom to the
workplace.
In the UK, the Group will continue to deliver the National
Careers Challenge ("NCC") a physically delivered competition that
allow the Group to engage with students and schools and build links
to employers for students from Year 6 to Year 13. The NCC therefore
provides a relationship framework for the Group to increase UK
sales of its immersive learning subscriptions and career discovery
products to schools and its immersive experiences for
employers.
Overview of Group operations
Further information on each of the Enlarged Group's business
segments and strategy is provided below:
(a) Immersive learning
The Directors believe that the Group is positioned to be a
leading provider of online and immersive learning to the global
education sector through ownership of an extensive library of
interactive, curriculum-aligned VR and WebXR modules for
education.
Following the acquisition of the immersive education materials
(including STEM content) and the Indian IP from Veative Singapore,
the Group has a proprietary leading interactive immersive VR-based
education library. Its content includes a substantial library of
science, technology, engineering and mathematics (STEM) modules and
content for learning the English language (ELL), created since
2016.
In addition to STEM and ELL materials, other content includes
virtual tours that enable users thousands of miles away from Paris
or Rome to take an immersive trip to the Colosseum or the Eiffel
Tour illustrating the potential for technology to overcome
socio-economic hurdles encountered by the world's children,
especially those in less developed economies.
In 2018, Veative received funding from the UNICEF Innovation
Fund to support making its content also available in WebVR format
which can be experienced with a laptop or Chromebook rather than a
VR headset thereby allowing the Group's content to be used remotely
outside of the school environment.
At its development centre in the Noida, Uttar Pradesh region of
India Veative India now employs more than 100 staff members engaged
in developing immersive learning content. Veative's immersive VR
content has also been developed to allow it to be used with a
number of different types of VR hardware.
However, in order to optimise learning outcomes but also to
maintain student data privacy and facilitate broader geographic
reach Veative developed its own customised VR headset - the
Edupro.
The EduPro has been developed specifically for education
purposes rather than gaming and entertainment. The EduPro has also
been designed to incorporate significant internal storage capacity
which enables it to store large quantities of learning content and
to be used offline making it more attractive in places where
problems with stable internet connectivity pose a barrier to online
learning.
The Group's VR technology equally attends to the needs of
teachers through its accompanying learning management system which
allows them to easily track students' learning progress, outcomes
and gaps through the provision of detailed activity data.
The Group's curriculum aligned content is being utilised in many
countries around the world including not only G20 countries such as
India, USA, South Africa and Canada but also major and developing
economies such as Poland, Nigeria, Colombia and Mexico.
The Group's content is currently available with commentary in
English, Simplified Chinese, Arabic, Spanish and Vietnamese with
certain modules available in French, Japanese, Traditional Chinese
(Taiwan/HK), Hindi, and Polish.
The coding architecture of Veative's content library was
intentionally designed to reduce the future cost of translation of
audio and text content into additional languages.
Market access risks and overhead costs are reduced by operating
through master distribution and reseller arrangements in many
markets where the Group carefully selects third-party organisations
with strong commercial relationships in the local education
procurement market to proactively market its products.
The in-house commercial team works closely with the global
master distributor and reseller network to support them as
necessary in cultivating key commercial relationships. Douglas
Stewart act as a master distributor in US with a reseller network
of 4,500 resellers. Direct sales activity is focused on securing
bulk order contracts from governmental and other educational
bodies.
As of 31 October 2022, Veative STEM content is currently being
used in over 600 schools around the world with over 300,000
users.
In recent months, the Group has been engaged in some key
regional tender discussions in India and continues to see
significant new opportunities in other international markets. In
Nagaland, a small remote mountainous region in India, the Group has
recently created 42 VR labs where offline learning by students
using VR content has been made possible.
(b) Career Discovery
There are over 600 million children in schools across the world
with projections suggesting that 65% of current school children
will be applying for jobs that don't yet exist.
Contemporary properly structured career guidance for students is
now recognised as a major challenge by students and parents:
-- 47% of school children say any career advice they have
received was not personalised to them and 70% of school children
fear their future because of career uncertainty; and
-- 7 out of 10 parents say they want better career guidance for
their children but 75% of parents feel it's impossible to provide
their children with relevant careers advice in such a rapidly
changing job market.
The Directors believe that current guidance does not typically
align learning with careers to prepare students for the future
world of work or help guide students towards fields and roles that
will interest them, energise them and ultimately substantially
increase their likelihood to have stable long, fulfilling and
successful careers.
In many countries, students are obliged at an early stage of
their development to make crucial choices regarding curriculum
subjects, further education and training and career choices that
impact upon their career direction - decisions that may if made
unsoundly jeopardise their opportunity to have rewarding and
fulfilling futures.
Launch My Career (LMC), has been developed as an innovative
immersive youth-centric career discovery platform that the
Directors believe is a world's first in providing users with a
transformative approach to career discovery, exploration combined
with immersive experiences.
It has been designed to support a user's careers journey in a
personalised and entertaining manner. The embedded tools and
services intelligently identify interests, skills, personality
types and personal attributes in order to dynamically match and
connect young people with future learning objectives, the right
career path and in turn with potential employers.
This journey will be recorded in a comprehensive skills and
career passport that reflects each student's development, growth
and motivation.
The commercial strategy for LMC is focused on maximising
lifetime revenue from customers building a user base funded through
school-based and strategic engagements. The Group is carefully
managing sales and marketing budgets including headcount to reduce
customer acquisition costs.
The Group's key relationships include NISA budget schools and
CSC Academies.
Through its collaboration with NISA, the Group is targeting the
100,000 budget private schools in India affiliated with NISA
through school led bulk user subscription arrangements for the
circa 20,000,000 pupils attending these schools.
The Group intends in the future to explore extending its reach
to the wider private school sector in India representing a further
300,000 establishments. Since the official launch of the LMC
platform in 2022, circa 2,000 NISA affiliated schools have now
joined up.
User build-up through schools creates the opportunity to
generate additional direct-from-consumer subscription revenue from
premium follow-on offerings including personal counselling packages
delivered online and study abroad advice and support. Available
research suggests that there are approximately 1.1 million Indian
students studying overseas in over 85 different countries.
Management will evaluate how to incorporate some of the key
aspects of LMC into its UK career discovery offerings for a launch
in 2023 and how it may be adapted for other markets. It will also
evaluate how the 'Careers Curriculum' product developed in the UK
as a teaching resource for schools to support improved careers
guidance delivery can be adapted for other markets.
(c) Future of Work
Just as developing an immersive career discovery offering was a
natural progression from the Group's immersive learning activities,
the development of immersive workplace focused engagement and
education builds on the Group's competency in the development of
engaging immersive content and experiences for learning and
development.
By 2030, more than 23 million global jobs are expected to be
enhanced by VR. AR/VR have the potential to add $1.4 trillion to
the global economy by 2030, The Group's immersive technology
solutions have an incredible ability to bring together employers
and employees (both current and potential) and educate and train
individuals to help solve real-world problems.
They enable tomorrow's workforce, augmenting their ability to
visualise and conceptualise, thereby greatly enhancing productivity
and workplace harmony.
The Group's development capabilities will empower enterprises to
build customized AR/VR and metaverse applications including:
-- immersive work experiences for engaging, training, skilling, and upskilling their workforce;
-- employer interactions with school-going learners, university
graduates and potential employees;
-- solutions to create, showcase, and customize product and Company walkthroughs
-- virtual work experiences will be available where young people
can demonstrate their developed skills and employability for future
employers to grant apprenticeship placements and provide guaranteed
jobs.
Companies can, in turn, receive analytics that will help them
reach candidates that are the best fit for their future
opportunities.
Employers will have the ability to emphasise and highlight their
future workforce requirements and are able to incentivise young
people to develop their skills via education. This helps to match
the future demands of the employer and delivers significant future
benefits for the youth of today, enabling a smooth transition to
employment after education.
The Group is developing a disruptive integrated career metaverse
that will connect school-going learners with enterprises, enabling
meaningful employer engagements with the workforce and helping to
bridge the skills gap.
To date, the Group has delivered VR deployments across public
and private sectors to enterprise clients including Accenture,
Lenovo, Honeywell, Britvic and NTPC (India's largest power utility)
and the Indian Oil Corporation and generated more than USD 2
million in revenue from metaverse and immersive content development
projects during the quarter ending 31 October 2022.
Group revenue growth
The Group's strategy for delivering revenues from immersive
learning and career success is primarily to grow the number of
active users through its international master distributor and
reseller network, strategic relationships such as Lenovo and NISA
and key school and enterprise engagement initiatives such as the
Career Metaverse and National Careers Challenge in the UK.
The Group is focused on accelerating the roll out of its
offerings to enhance the Group's rate of market penetration and
utilisation of its position in the relevant markets.
This is being achieved by:
-- expansion of its international distributor and reseller network;
-- taking advantage of the opportunity to customise its products
for roll out into further geographies in line with Lenovo's global
ambitions;
-- collaborating with NISA to extend the adoption of
Launchmycareer.com and exploring other opportunities to expand the
user base more widely across the Indian sub-continent,
-- expanding enterprise business globally through metaverse and
AR/VR learning and development solutions;
-- in due course adapting the Group's platforms for additional
verticals including primary education and young people who have
fallen out of education and training.
Overall, the Directors believe that the Enlarged Group has the
potential to transform the way the world educates, trains, and
prepares young people for the world of work and has created a
significant first mover advantage having developed and established
its content and platforms for immersive learning and career
discovery.
It has significantly de-risked and paved the way for rapid entry
into new markets with the ability to on-board significant numbers
of users quickly through the creation of an international master
distributor and reseller network and its exclusive, strategic
partnerships with NISA and Lenovo.
Veative's strategic partnership with Lenovo automatically renews
in January 2023 for a further 12 months. Under this agreement
Veative receives an attractive global royalty fee for each Lenovo
headset deployed with a limited Veative content library. Lenovo has
recently committed to pre-purchase 4,000 licenses. Veative's
content will form a core part of the Lenovo VR Classroom 3 school
offering.
The Group's focus is on leveraging these relationships rather
than pursuing direct-to-consumer revenues potentially requiring
significant investment in sales personnel and marketing
expenditure. The Directors believe that this is a key component of
managing its rate of cash burn and accelerating its pathway to
profitability.
Reducing the administrative costs of the Group through
cancellation of its listing will enable additional cost
savings.
Board and management team changes
Following cancellation and as planned as part of the rebranding
and repositioning of the Company to the Veative Group, Chris
Jeffries will step down as executive chairman and joint CEO and
Ankur Aggarwal will solely take on the role of Group CEO.
The Group is in advanced negotiations to appoint Feilim McCole
as Chief Financial Officer. The Group's current CFO, Nick Ydlibi
has agreed to support the Group with an orderly transition of
responsibilities. Feilim has extensive experience as CFO and
Finance Director in a number of businesses across different
sectors. He previously worked in the corporate finance departments
of Arthur Andersen and Deloitte in London and spent a number of
years working in a London private equity advisory boutique. He is
an Irish qualified chartered accountant (through Ernst & Young)
and a graduate of University College Dublin (B.Comm).
In addition, Ankita Dabas has been promoted to Chief Growth
Officer. Ankita has significant experience in marketing and
strategic planning. She was a Co-Founder and CEO of FabFurnish.com,
a leading Indian online home store and has been involved with a
number of other start-ups and growth capital ventures. She also has
a diverse range of experience in venture capital, private equity
and investment banking with leading private equity fund, AIF
Capital and investment banks including J P Morgan and Merrill
Lynch. She holds a Master's Degree in Business Administration from
University of Rochester, New York and a B.A Economics degree from
Shri Ram College of Commerce, Delhi.
Current trading
As per the unaudited management accounts for the year ended 31
October 2022 the Group recorded consolidated revenue of GBP6.8m.
This compares with revenue for the comparable twelve month period
of GBP7.4m which included GBP3.6m of revenues from the terminated
Aldebaron partnership.
For the six months to October 2022 revenues were GBP3.4m
including immersive learn sales of GBP0.7m, GBP0.9m from Launch My
Career in India and GBP1.3m from Veative India (which was only
consolidated from 19 July 2022).
The Group had cash balances of GBP0.2m at 31 October 2022. It
had consolidated debtors of GBP4.0m of and a corporation tax refund
due in relation to research and development expenditure of GBP0.6m.
The Group has experienced a delay in collecting receivables from
China due to the prevailing Covid related lock-downs. However a
payment plan has been agreed so that this cash should be received
during in the first half of 2023.
The Group had consolidated trade creditors of GBP2.4m and
accruals of GBP2.8m at 31 October 2022. In addition, as readmission
to trading on LSE has not happened, the Group has not yet issued
the consideration shares due for the IP acquisition from Veative
Singapore but in light of the planned Cancellation is in advanced
discussions to agree a revised settlement arrangement for this
consideration.
The Group had only GBP0.05m of external borrowings at 31 October
2022.
During the six months to October 2022, management has taken
steps to significantly reduce the cost base of the Group reflecting
the revised commercial strategy in place to move away from building
a direct to consumer offering in India following termination of the
Aldebaron commercial partnership.
Changes have been necessary to reduce marketing expenditure and
the headcount infrastructure created for a consumer focused
operation. Management continues to evaluate areas for further
reduction.
Impact of Cancellation
Shareholders should note that following Cancellation becoming
effective:
1. The regulatory regime which applies solely to companies with
shares admitted to the Official List and to trading on the London
Stock Exchange's main market for listed securities will no longer
apply, including disclosure of shareholdings, obtaining shareholder
approval under the Listing Rules for transactions out of the
ordinary course of business or with related parties.
2. The Cancellation may significantly reduce the liquidity and
marketability of any DevClever Shares and their value may be
affected in consequence.
3. The Cancellation may have taxation consequences for shareholders.
4. There will no longer be a public market mechanism for
shareholders to trade in DevClever Shares, no price will be
publicly quoted for DevClever Shares and it may be more difficult
for shareholders to determine the market value of their investment
in the Company at any given time.
The above considerations are not exhaustive and shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
Taxation
Shareholders and prospective investors should consult their own
professional advisers on whether continuing to hold shares
following the Cancellation is suitable for them or whether the
Cancellation has any tax consequences for them.
Tax rules can change and the precise tax implications for
shareholders will depend on their particular circumstances. If you
are in any doubt as to your tax position, you should consult your
own independent professional adviser.
Transactions in DevClever Shares following the Cancellation
The Board is aware that the proposed Cancellation would make it
more difficult for shareholders to buy and sell shares should they
wish to do so and that Shareholders may still wish to acquire
further or dispose of DevClever Shares.
Accordingly, the Board intends to use reasonable endeavours to
create and maintain a matched bargain secondary market trading
facility to assist shareholders to trade in DevClever Shares
following Cancellation. A further announcement providing further
details of this facility will be released before cancellation.
Contact details for the matched bargain trading facility
provider once arranged will be made available to shareholders on
the Group's website.
Shareholder communications
As an unlisted public limited Company, the Company will still be
required to produce its accounts within six months following the
end of its financial year and then to circulate copies of the
accounts to Shareholders.
The Company will still be required to circulate annual reports
and accounts to shareholders and to hold an Annual General Meeting
but the Company will no longer be required to prepare or publish
interim accounts.
The Board intends to continue to maintain a corporate website
(currently devcleverholdingsplc.com) but there will be no
obligation on the Company to provide all the information required
under the Listing Rules or the Disclosure Rules.
Takeover Code
Shareholders should note that following the Cancellation, the
Company will remain subject to the provisions of the Code.
The Company will remain registered with the Registrar of
Companies in England and Wales in accordance with and subject to
the Companies Act 2006, notwithstanding the Cancellation.
Shareholders should also note that the Takeover Code (the
'Code') will continue to apply to the Company for the period of 10
years from the date of Cancellation.
Shareholders should note that after the expiry of 10 years from
the date of the Cancellation they will not receive the protections
afforded by the Code in the event that there is a subsequent offer
to acquire their shares.
Option Holders
The Cancellation will not affect the terms of existing options
over DevClever Shares. However, following the Cancellation, since
there will be no ready market in DevClever Shares, option holders
will need to take this into account when deciding to exercise or
not to exercise their options in the future to the extent that such
options have not previously lapsed.
Warrants
The Cancellation will not affect the terms of any warrant in
issue over DevClever Shares. However, following the Cancellation,
since there will be no ready market in DevClever Shares,
warrantholders will need to take this into account when deciding to
exercise or not to exercise warrants before they lapse.
Holding DevClever Shares in CREST
Whilst the Company's CREST facility will remain in place
following the Cancellation, the Company's CREST facility may be
cancelled at some point in the future and, at that point although
the Shares would remain transferable, they may cease to be
transferable through CREST. In this instance, Shareholders who hold
Shares in CREST would receive share certificates.
Expected timetable of principal events
Under the Listing Rules, as a Standard List Company, the
Cancellation can be effected without securing approval of
shareholders at a general meeting
Under the London Stock Exchange's admission and disclosure
standards, Dev Clever must advise the London Stock Exchange of the
Cancellation not less than 20 Business Days before the date it
intends trading in the DevClever Shares to be discontinued.
It is therefore anticipated that the Cancellation will take
effect 20 Business Days following the making of the application on
or around 18 January 2023.
Key dates:
Expected date of cancellation of listing and trading on the main market 18 January 2023
Notes:
1. References to times in this announcement are to London time unless otherwise stated.
2. If any of the above times and/or dates change, the revised
times and/or dates will be notified to Shareholders by an
announcement through a regulatory information service recognised by
the London Stock Exchange.
Ankur Aggarwal, CEO of Dev Clever, commented:
"We understand the concerns of shareholders in relation to the
protracted process to seek re admission to the London Stock
Exchange.
However in light of current market conditions, and having
canvassed key shareholders, the board is unanimous that
Cancellation and advancing the Group's potential in an unlisted
environment is right now in the best commercial interests of all
shareholders".
We will continue to serve the best interests of shareholder to
ultimately deliver value for them".
For more information:
Dev Clever Holdings plc
Ankur Aggarwal
Joint Chief Executive
Officer
Nicholas Ydlibi
Chief Financial Officer +44 (0) 1827 930 408
Novum Securities Limited
- Financial Adviser & Joint
Broker
Colin Rowbury
David Coffman +44 (0) 20 7399 9400
finnCap Limited - Joint
Broker
Jonny Franklin-Adams +44 (0) 20 7220 0500
Buchanan Communications
Chris Lane / Toto Berger +44 (0) 207 466 5105
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