11 January 2022

DeepVerge PLC

("DeepVerge" or "the Company")

Trading Update

DeepVerge unaudited 2021 revenue growth exceeds 108% to £9.33m

Skin Trust Club to launch video medical consultations and diagnostic service

DeepVerge (LSE:DVRG.L), the environmental and life science AI company, today announces launch of Skin Trust Medical, an extension to the successful roll out of Skin Trust Club, launched in Q2 2021, and a post-31 December 2021 year end trading update and outlook for 2022.

·      Unaudited 2021 group revenues increased 108% to £9.33m (2020: £4.48m - audited).

o  Orders exceeded £10m but supply chain delays and COVID infected staff requiring isolation in Q4 pushed some shipments and backlog of reagent supplies into Q1 2022.

o  In addition, installation of Government National Infrastructure trial equipment with a value of £480,000 was installed before year end, but not included in 2021 revenues. Project is ongoing and expected to complete late in Q1 2022.

o  Strong unaudited H2 revenues of £6m (2020: £3.4m) delivered first profitable EBITDA half year, excluding exceptional items.

o  Full year 2021 is expected to show an EBITDA loss of c£0.22m (2020: £0.86m) and loss before tax c£3.50m (2020: £2.87m) respectively. While the losses may exceed market expectations, it is primarily due to delayed execution of 2021 orders.

o  June: Completed Placing of Ordinary Shares at 30 pence per share, raising £10 million.

o  Order books continue to grow across all divisions. 

Gerard Brandon, CEO of DeepVerge, comments:

"DeepVerge has delivered another year of triple digit percentage revenue growth, with higher margins and an increase in recurring revenues despite supply chain delays and reduced production staff due to COVID infection and isolation in Q4. The injection of capital from the £10m placing in June prepared the Group for an increase in staff, upgraded laboratories, and expansion of our offering of innovative products and services across all divisions. The Group has the strongest balance sheet in its history and a solid foundation for continued strong growth through 2022." 

·      Labskin - Skin Trust Club - Skin Trust Medical:

o  Skin Trust Medical offers an opt-in remote medical consultation and diagnostic service as an additional revenue extension to the consumer based Skin Trust Club, incorporating the Skin Trust Club Artificial Intelligence Skincare App and Home Test Kit. This service is to be rolled out in Q2 2022.

§  Video consultants will include dermatologists, General Practitioners and Clinical Nursing personnel

o  Skin Trust Club now has over 30,000 registered consumer users.

o  58% of the 30,000+ Skin Trust Club members have underlying skin conditions.

o  Home Test processing capacity heading into 2022 is 20,000 per month in each of the UK, Ireland and US laboratories.

o  Skin Trust Club members have begun to purchase skincare products, recommended for their personalised daily skincare routines, through a new Skin Trust Club marketplace service. This new in-app and web-based sales channel promotes skin care manufacturers, Labskin partners and consumer test clients, generating wholesale revenue for Labskin on products sold through this platform.

·      Modern Water - Testing for COVID 19 and other pathogens in communities:

o  Modern Water Mobile Services launching in Q1 2022 is a critical new component in the armoury of national and provincial government response protocol. It allows utilities to extend their reach into smaller sites for more granular 'last mile' surveillance, enabling local authorities and private companies to protect citizens and customers by monitoring for COVID and a range of additional pathogens, including forever chemicals. Benefits include:

1.     Real-time detection of the virus in the community at source,

2.     Zero transport costs of non-virus confirmed samples, and

3.     Variant testing only on confirmed virus at the laboratory.

o  Microtox^®PD equipment, with AI and pathogen detection systems being deployed in multiple jurisdictions with data aggregated for real-time detection in wastewater.

o  Microtox^®BT equipment was re-designed to deliver a portable medical device, mobile testing unit to process breath tests at point of care. Regulatory approvals for human diagnostic equipment are evaluated on final test equipment that will be used on humans. Therefore, roll out of the breath test is subject to meeting the satisfactory requirements of EU Regulatory approvals which will be carried out on the latest version of the Microtox® BT units. Further information will be provided in a future update.

o  Collaboration with Microsaic Systems plc contributes portable real-time sewage monitoring for "organics" such as drugs of abuse and active pharmaceutical ingredients front line water analysis portfolio. Both companies are engaged in a collaboration to deliver complete solutions, with a backbone of analytics delivered to end users powered by AI techniques provided by the Modern Water division.

·      Modern Water - equipment production and assembly:

o  The €2.7m project, with a €750,000 grant provided by Enterprise Ireland is part of the assembly line for 200 miniaturised Microtox^®PD units per month, based in Ireland, with first assembly production units expected in Q2 2022.

§  Multiplex chips are produced in Ireland,

§  Pathogen binding agents produced in the UK, and

§  Off the shelf electronic components supplied from Asia suppliers.

·      Bioluminescent Microtox^® reagent has seen additional demand with production increased to meet order backlog following investment for laboratory equipment upgrade and additional staff in the Newcastle, Delaware, US facilities.

·      Microtox^® CTM, LX, FX, Microtrace equipment continues to be in demand following recent CTM and FX installations in Beijing China, ahead of the Winter Olympics, making this nine out of the last 10 Olympic Games monitored for drinking water contamination by Modern Water's Microtox Toxicity testing.

·      China Resources Environmental Technology negotiations continue. Orders in China are increasing for Modern Water's multiple award-winning equipment and reagent consumables with provincial and municipal governments. Further information will be provided in a future update.

For further information please contact:

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 microbiome for most of the top 20 global cosmetic company clients and remotely detect and identify in real-time, dangerous pathogens in wastewater treatment plants, drinking water, rivers, lakes and reservoirs.

Labskin (Life Science Division)

Labskin is a 3D human skin equivalent test platform that scientifically proves the impact of skincare product claims in healthcare, life sciences, skin microbiome clinical trials, pharmaceutical and cosmetics industries. Labskin have been pioneering the development of a laboratory grown human skin platform for 15 years and is the only commercially available lab-grown full thickness human skin model that naturally mimic the skins' microbiome. Labskin's virtual clinical trials with remote collection of human volunteers' skin microbiome provides a solution for the collection of volunteer microbiomes to allow for lab-controlled trials of advanced skin models and human microbiomes. As the data bank of remote volunteers grow, the higher the accuracy and increased reliability of virtual product testing that can be provided to clients, eliminating early human trial and error testing and resulting in a faster time to market. The Labskin test platform and protocols help clients maintain an optimum real-world environment, when testing their new ingredients and existing products, that shows the positive or negative impact on skin's natural microflora.

Skin Trust Club

Skin Trust Club incorporates an artificial intelligence Skincare App and Home Test Kit that provide simple, at-home skin microbiome testing for personalised skincare and skin health tracking. The self-administered skin swab is a remote trial and allows the participant to conduct each stage of the trial without interaction. Skin Trust Club's DNA Test generates a report that consumers can use to manage their custom skincare regime. Analysis of skin attributes provides information to create hundreds of different product combinations to suit a person's unique skin microbiome.

Modern Water (Environmental Health Division)

Modern Water is a pioneering and innovative technology subsidiary, and over a 30 year period, with installations in more than 60 countries, this division has built core expertise in the development of analytical instruments and technology for monitoring toxicity in water, soil, food and industry. The core systems use bioluminescent bacteria to perform biosensor testing that detects the presence of toxic substances. New systems incorporate multiple pathogen detection including SARS-CoV-2 in wastewater.