Engage XR Holdings (LSE:EXR) — Investor Presentation

0:03 Good afternoon, ladies and gentlemen, and welcome to the VR Education Holdings PLC Investor Presentation. Company may not be in a position to answer every question you receive during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd

0:36 like to submit the following poll. I would now like to hand you over to Dave Whelan, CEO and Seamus Larracy, CFO of VR Education Holdings PLC. Good afternoon. Afternoon, everybody. Welcome to this get to know company presentation. My name is David, and I am joined here by our CFO, Seamus. So we're gonna go through this short presentation today. It's gonna outline some of the origins of the company, and we'll we'll also be talking about some of the more recent news. I expect some of you have seen the RNS today that we've released ENGAGE in the Chinese market, which is a very, very big deal for the company. So just a bit of an overview of the company. We are an Irish based company. Hence, you can hear the really strong Irish accent coming from myself. We're not a very old company at all. We're going about five years. We've been on AIM two and a half years.

1:24 We've a staff currently of 51, and we are expanding. Very recently, this at the end of last year, we had 30 staff. And there's two main elements to the business. So on one side, we have our showcase experiences. These are edutainment type of games where and these are showcase products, And some of our more famous products would be the Apollo 11 experience and Titanic VR and Shuttle Commander, which actually we just released recently on the Oculus Quest. These are experiences which are one off purchases where users would purchase a piece of content for 10 or $20, and they get to keep it for good. But, really, the the large larger much larger parts of the company is the ENGAGE platform. And what ENGAGE it's what ENGAGE is, it's a communications platform, but its origins were really in education and corporate training where it was a virtual reality classroom.

2:19 So when you put on a VR headset and have controllers, there's a virtual version of you inside a virtual classroom. And you can do everything you can do in the virtual classroom, you can do in a real classroom. So you can stand up and give a PowerPoint presentation, you can draw on our virtual whiteboards, and you can shake hands with people from across the world, and you can have up to 70 people 70 virtual people in the room with you at the same time. And what was quite unique about the platform is that it is also a content creation tool. So when you're inside ENGAGE, it can record everything that you do and say. It can also record all your avatars, movements, and any objects that you've been in the environment. So very, very quickly, you could build up a suite of content for your users. However, with COVID nineteen, we've actually seen a huge demand in our services because many institutions and many corporations are now allowing all our workers to work from home, and they're needing better communication tools. And they're really coming up against this with video based communications where the conversation that we're having now is very typical of what would happen in these big corporations where if you have maybe 20 or 30 people and they're on a video based, call like Microsoft Teams or Zoom, very hard to do any collaboration work where the person who's presenting has full control of what's happening on screen. You can't interact with anybody else in the room. Whereas within the ENGAGE platform, if because we use spatial audio, if you want to lean over to the person next to you and whisper in their ear without disturbing anybody else, you can do that the same as you would in a real meeting room. If somebody is down presenting on the

3:50 screen in, say, in, say, an exhibition location, you can stand up, walk to a different exhibit, and have a chat with salesperson or getting a lot of events traction. So that's just a brief outline of the company. So the ENGAGE platform, again, it's real tour in training, development, and education. However, we're seeing very, very big demand now for team collaboration and also conferences and events. So we're just gonna play this short trailer, so if you could roll that, guys.

4:24 We all experience the world in unique ways. Hey. You? Through our senses, we gather information and build cognitive process to understand concepts. Hey. This is how we learn. But what if we could push these boundaries past our physical world? Fire. Fire. What if you could communicate with anyone in the world yet feel like you were in the same room? If you could meet and learn Why don't you put it up the highs sure you tell me when from teammates globally, sharing media, and ideas that's good news jump into a simulated training But the real test is being able to do the right thing in a stressful situation. To gain a deeper understanding of the task at hand. And when you're squeezing the trigger to squeeze the You have ventilated the baby, and now it's time to reassess.

5:13 Please fasten your seat belts, sir. Creating real world scenarios, improving employee knowledge and skills. Exactly. Plant another tree. And this time, we put it up the top. Imagine if quality education was accessible to all regardless of geographical location. Large hazard and increase the risk to these big cities. What if no field trip is too far or impossible? A world of immersive experiences. ENGAGE, COMMUNICATE, TEACH, LEARN. Okay. So I'm gonna pass over to Seamus, our CFO.

6:01 So just a a quick way of how we commercialize ENGAGE and how we get it the marketplace. We've three main routes into market. We have direct sales, which are sales that come through either our company website or through our business developers who are based in America and in Europe. We have our resellers of which HTCR won within the greater Chinese region. They have exclusivity. And we also have a number of other resellers across Europe, America, and other areas of Asia. And then finally, we have content and distribution providers who we've partnered with, who will create high quality content and will sell it through the platform where we would enter into a revenue share agreement. So how that translates into revenue is that we have customers who come and take software licenses to use the ENGAGE platform.

6:53 We have recently, since COVID nineteen, had a lot of interest in event specific licenses where large corporations have come to us to run virtual events, and we have offered tailored services to support them through this. And then we have the revenue share agreements with

7:12 content and distribution providers and also end users who want to come and commercialize on the ENGAGE platform where we'll enter into a revenue share agreement with them. Dave, you just click on there. You can see on the next slide, you can see that we have since our commercial launch of ENGAGE at the back end of twenty eighteen, we've signed up some high profile clients to work and use the platform. On the training and development side, we're Facebook have taken licenses to use the platform. Also, SNCF, who operates the French rail network, are using it for training development and for team collaboration. HCC, which is obviously very well known and the relationship with us is very well known, have used it for event hosting, which they will come to later, and also use it for team collaboration.

7:57 Within the education and learning space, some major players within the that space are using this. We've been working with Oxford University for a number of years. And also in the last nine to twelve months, we've started working with Stanford University, the University of Arizona, and also Colorado State University, some major players in the American market. On the conference and event hosting, which has been something that has presented itself this year, which we hadn't originally envisaged ENGAGE for, we are soon to host a major event for the United Nations, is coming up this weekend. We've successfully hosted events with Ericsson, Vodafone, European Commission, Yahoo, and HTC over the last few months. And it's testament to to the the quality of the ENGAGE platform, the the nature of the clients that are coming to use it for our events and to use it for the original purpose of training and development and team collaboration.

8:50 Now I'll just hand back to Dave who's going to run through some of the more detailed features of the platform. Hi, Seamus. So within the ENGAGE platform platform, I did state on the first slide that you can have up to 70 people in the same room at the same time from all over the world, and then each person is represented by an avatar, which is a digital person. That person looks exactly like the real life person because you can take a selfie of your face, photograph of your face, upload it to ENGAGE, and then our AI system will actually build the avatar based on that image, and it will look very much like you when you're inside the platform. Inside ENGAGE, we have media screens. These are Chromium based, so anything that will run on the Chrome browser will run inside the ENGAGE platform. So you connect it to OneDrive, Google Docs, SharePoint, any of these cloud based platforms with the documents that they have in their repositories. They can be shared on our virtual screens. You can also screencast your your screen just as I'm doing now for this presentation.

9:48 So any application that you might be running on your PC can run inside ENGAGE as well on the virtual screens, and they can be shared. You can build and share content. So not only use ENGAGE communications tool, it's also a very, very powerful content tool where if you're giving a class or a presentation or running an event, you can record everything you do and say inside the platform. You can also record all the members who are actually logged into the session at the same time, and we play that over again as a spatial recording. We call that system projected presence. And it's not what like watching a recording of a video where it's just a standard. You're looking straight out and you never change the angle. You can actually walk in a spatial recording. So you can get up out of your seat, walk around, go to a different seat. If somebody was whispering up the back, you can actually get up during the recording, sit down next to that person, you can hear what they were saying. And the file format that we use is is is quite unique to the ENGAGE platform. So if we were recording this presentation, and I assume we are recording this presentation on video, if this was an hour long piece of content, you're looking at about one to two gigabytes of data to have any type of quality video stream.

10:52 Inside ENGAGE, an hour long piece of content is less than a 100 megabytes because we're not transmitting video. What we're transmitting is positional data of three d objects in a virtual space because all the graphics are rendered on the on the platform itself, and all we're recording is m p three data of device communications. So it's a very, very small format. So even people have very low bandwidth Internet connections in some of the developing countries and try some places in China as well would have these limitations. ENGAGE is very, very suited. So what we say to people, if you can run an audio Skype call, you can actually run ENGAGE very, very nicely on on your headset, on your Internet connection. We also have over 1,203 d objects. So the great thing about ENGAGE is you don't need any prior programming skills. You don't need any any animation skills. It's literally a drag and drop. So you have a virtual iPad when you're inside. And if you want to select an object like an aircraft engine, you can drop that in the environments, and you also have a selection of locations within the platform. There's a web app associated with with ENGAGE as well. So you can log in. It's very similar to GoToMeeting. You can schedule any meeting that you want or events in our web app. You can also link files in our web app as well. So when you get into VR, you're not looking around for a keyboard. Everything is there in a in a very useful and easy manner.

12:14 And we also have our projected presence system. So I did say that 70 people can be in a room at any one time, but some of the events that we're hosting would have many thousands of people. And the way we run those events is you'd have a small set location and you might have 70 avatars in the room with you, but the presenters themselves the the virtual avatars of the presenters, they're duplicated and cloned into multiple rooms at the same time. So in reality, somebody who's giving a presentation to a room of 70 people, they can be cloned a million times and they can be presenting to 70,000,000 people at the same time. There's theoretically no limit to the amount of people that can actually attend these events. So we did allude to HTC earlier. So back in March so the first first three months of this year were very topsy-turvy for many, many, companies.

13:07 People didn't really know what was going on with COVID coming. Is this gonna be a two to four week thing, or is it gonna be longer? What are we gonna do with our staff? And it really hit China hard just before Christmas of last year. Now HTC, each year, they would have a developer conference called the Vive Ecosystem Conference where they would invite a couple of thousand developers to a physical location, show them all the new technology that HTC are working on, talk about what's coming, on the road map, and, try to get developers really enthusiastic about, using HTC products. Now that that conference this year was supposed to be held in China, and, obviously, that was canceled. And HTC came to us in February and said, look. Our our our our conference has been canceled. Can you guys help? And it's supposed to be it's it's gonna be held in March. So in a four week turnaround, we we transform ENGAGE to run events.

14:03 We put in custom locations, and you actually see one of the locations there just on the the video being played. It was a very, very successful event. So we had over a thousand people logged in virtual reality concurrently, and we had 1,100,000 people watching the livestream. And we had speakers from China Telecom. We had speakers from Qualcomm. We had speakers from NVIDIA. They were all really, really impressed with the platform, and HPC were so impressed. Straight after the conference, they said, look. We we wanna invest in the company. You have a really good platform. It's a very, very mature platform. How do we get involved? And we started discussions in earnest, and it was it was a really, really good event, and we were delighted to to host HTC.

14:46 Following on from that event, we've actually had other events. So each time we hold events, it always seems to spur more and more people coming to us. And, again, with a lot of these conferences in America and in Europe, they were all supposed to be held in the summer period, but they were all obviously canceled. And then a lot of these event organizers have been scrambling, looking for platforms to hold events. A lot of events have gone on video based platforms like Zoom and Teams. And, again, they call it a virtual event, but in reality, it's not a great user experience. And the user experience that people get at these events is exactly the same experience that you're getting now where you're just sitting and listening to a presentation. That's pretty much it, and you might be able to add a few questions on a form and it might get lost. That's pretty much what people call virtual events today, and it's not a great user experience.

15:36 The reason people go to events, physical events, is for networking and for those hallway conversations where you could go talk to a sales rep or you might meet somebody in the hallway. You strike up a conversation, and that's where business is done. It's not just watching the keynote talks, and that's really what's lacking. I remember when we went to the BET conference a couple of years ago, very big conference in London full of educators and educational companies, but, really, a lot of the business that we done was actually just talking to people.

16:09 Inside ENGAGE, we can offer that service. The way we offer this with spatial audios, we have exhibition halls, virtual exhibition halls where people can go walk around the area, talk to the sales reps, have those hallway conversations, and that's just something that video based platforms can provide. That this is one of the core reasons why we're so busy at the moment. And a lot of the events that were supposed to be held in the summer months are now only coming in the final month of this year because, obviously, there's some preparation work. Holding a virtual event, we say to people, is like holding a real event. If you need a location, the location needs to be built, needs to be designed. If you want people in there monitoring, like, that's an actual real person bringing people around. So it's not like just producing video. It there is a lot involved, but we can also charge a lot of money for these events as well. And we are incrementally increasing how much we charge for these events as we do more and more of them because we're actually seeing more and more demand, and we're we're trying to see exactly what the the market would bear.

17:07 So another use case is, just going back to the education and training aspects of ENGAGE. The United States Air Force are using ENGAGE at the moment for remote distance learning. So in education, especially in America and, not so much in in The United Kingdom, education is becoming the the pursuit of the rich and wealthy. You want to send your kids to university in America, a good university for four years. You're looking at about a $250,000 student debt at the end of that education. Really, that's pricing out middle income and lower income families. So what happens quite often is that a lot of parents or a lot of students, they will join the military, the US military, to get a good education. But what happens then is you have people dotted all over the country, all these cadets that will never get to see each other, and they have been using video based platforms for many, many years. But, again, they really do see the struggles where when you have 30 or 40 students all trying to collaborate on a platform, half the students will turn off their camera, the other half will turn off their their microphone. They'll all be on their phone. They're not engaged. They're not getting good results.

18:10 Whereas a platform like ENGAGE offers that real classroom experience where people do make peer structure groups, peer support structure groups. They feel like they're in a real class collaborating. And even the educators themselves, they can get all that nonverbal communication because their movements are being tracked in the headsets. Not only that, actually, ENGAGE this year, and I'll talk about it in a little bit, we are now available on mobile phones and tablets. So you're not limited just by having the headset on you. You can actually now try it out on a mobile phone and tablet. Then Seamus did mention them earlier. We are working with Oxford University and Stanford University. Actually, I thought I pressed play on that video. And they're using it for medical training. So one of their probably biggest revenue generators of any university would be their medical training program.

18:56 However, they are finding it very difficult to justify a lot of these costs over video based platforms and text text based assessments. However, when they're using virtual reality, giving them full simulations and they're also feeling like they're in a real classroom, again, it really justifies some of those costs. The example shown on the video here is Oxford University where you have to resource a baby with very limited equipment. And if you don't save the baby within four minutes, the baby will die. Quite often, what what when the office used to be open, any any visitors that we used to come come into the office, I would put them in this simulation because it really stresses them out. But that's exactly what you're trying to get from from this type of simulation. It's supposed to give you real world experience. And so we are cross platform. So we work on the majority of VR headsets even though HTC now are 20% stakeholder in the company will always be platform agnostic. So and we work on all the Windows mixed reality headsets.

19:52 We work on all the headsets from Steam and HTC, and we work on the Facebook headsets as well. And then there's a lot of Chinese headsets coming out. Just recently, last week, Facebook announced their new headset, the Quest two. It's £299. I don't know why they don't say £300.

20:09 Really, really good device, very strong device. It's gonna be one of the best sellers for Christmas, And and they've sold so many of those devices so far. We're actually seeing a big uptick take in in our showcase experiences on that device. And, really, we feel we're on the the kind of the the cliff edge of wider adoption of VR. And there's a few different reasons why that why why we feel that way, and we will talk about that later on.

20:35 And, again, this is this is ENGAGE. We do also run on standard desktop displays, and we also run on mobile phones. This is the mobile phone version you can see here on the right. Still Still a pretty good experience. People kids who maybe have played Fortnite on their phone, they would be they pick up the mobile phone phone version of it very, very easily and be able to move around. And the mobile phone version is by far one of the most popular versions for downloads, especially for events because not everybody has VR headsets. We'll also be out on Apple iOS and iPhones before the end of the year. So I know I'll pass back over to Seamus now. Thanks, Dave. So just for any of you who didn't hear our interim results presentation, I just want to bring through some quick operational highlights from the first half of the year and then some quick financial highlights from the same period.

21:27 So as Dave already mentioned, we held a hugely successful HTC by the ecosystem conference in March 2020, which followed on to a €3,000,000 investment from HTC

21:39 and a strategic partnership where we entered into a distribution agreement with them, where they have exclusive rights to resell ENGAGE within the Greater China region and also nonexclusive rights to resell across the world. As part of that deal, we entered into there's a revenue share agreement whereby we take a percentage of each euro that or each euro dollar dash HTC brings to the table. That percentage wasn't made public as part of the deal, we can't disclose that today. Over the first six months to year and continuing into the current period, there's been significant increase in demand for ENGAGE as communications tool and for event hosting. Separately, we entered into partnership agreements with content providers, which I had mentioned on in an earlier slide. We entered into one with US based Victory XR, who are a world leader in VR and augmented reality content creation for schools and education.

22:34 What they do is they offer

22:36 biology some some of the things they offer is, like, a biology lesson whereby you get to dissect an animal as part of the class, which is obviously a far more humane and easier for a school to obtain rather than having live animals. And we also entered into an MOU agreement with UK based Virtual College, who are an industry leading digital learning solutions provider, and we're hoping to provide better technology at enhanced learning solutions to them in The UK and also in The Middle East where they have a strong presence. If you just jump on to the next slide there, Dave. Thanks.

23:09 Financially, we've seen some we've seen significant increase in revenue. In the first half of the year, revenue grew to 681,000, which is up 37% on the prior year. More importantly for the group, ENGAGE revenue accelerated throughout the period. And currently, at the end of h one, comprised 33% of total group revenue and post period end, it has

23:32 gone beyond the 50% mark, and in some months, it's actually exceeded all other revenue streams. In line with management expectations, our EBITDA result was unchanged at a loss of 9,900,000. As mentioned already, we entered into the commercial agreement with HCC and had a successful fundraise of €3,000,000 which significantly underpinned external confidence in the group. Our net cash position at the June 30 was 3,200,000, and when the interim results were announced, 2,900,000. ENGAGE revenue post period end up to the end of September comprised 68% of total revenue for that period. I'll just hand back to Dave now who's going to run through the market opportunity. Yeah. So COVID nineteen really has been a game changer. I know we've been on AIM a couple of years, but we're we're starting only now to get some traction and become interesting, I think, in many investors' eyes.

24:28 And it it has been because of COVID nineteen. So if you look at Zoom, anybody who's going to be using Zoom is already on Zoom today. They've had five years of user number growth in the space of five weeks when COVID locked down most of the world. And and I think they're gonna have a difficult difficult time in in in the in the coming years to really grow the user base there because everybody's gonna use a video based platform who's already doing so. A lot of the people coming to us are large institutions, and we see events as

24:59 as as a gateway. So what typically happens with us is that a company will come to us and say, we were supposed to hold this event physically. Can you guys help us out? And then we will work with that company, and we'll charge them a fee for doing the events. But then as they're using the the ENGAGE platform for the events, what we're doing is we're actually upselling them then and going, okay. You're using this for an event, but actually, it's a very, very useful tool for a communicate a communications tool between between your employees and your company. And what happens then typically is after an

25:29 event, they'll sign up maybe a a couple of their departments to start using the ENGAGE platform. It could be a couple of 100 user accounts, and they use the platform for, typically, maybe a couple of months, and then we're trying to sign them up into bigger agreements. That's kind of how our sales cycle is that's the direct sales cycle. With HTC

25:51 coming on board and with the agreement that we have in place, literally, this morning, we announced that ENGAGE is now available in the in the Greater China region. This is a major, major milestone for the company, especially a small company in Ireland. For any company to to sell into the Chinese market, you have to deal with a registered Chinese company or companies who are already embedded in that market. And although HTC are a Taiwanese company, they have a lot of close ties with the with the Chinese governments

26:20 and the Chinese market over many, years of producing handsets in China and Taiwan. And because they're a telecom company as well, they work very closely with government agencies like the like China Telecom as an example. So we expect big things to come over coming months now that we're available. And I think the great thing about ENGAGE as well is it it's a communication bridge between China and the rest of the world. So when we had the HTC event as an example, the half the users were actually based in China and the rest were dotted all over the world. We actually got past the great Chinese firewall, and we connect people together naturally without using a a VPN. And that's something that is quite unusual, and it's something that my technicians are are constantly looking at. But I think we're in a very, very strong position, and we're in a very happy medium place being in Ireland because a lot of companies in China well, all companies in China, they can't use American made communication software such as BlueJeans from from from Facebook or

27:25 Microsoft Teams and vice versa. There's a lot of companies in America that just won't won't use Zoom communications because they might have security concerns, whereas we're here sitting in Europe and we are GDPR compliance. You know, there's no hang ups about using our platform, and we are going for full official security ISO certification at the moment as well, which will be a really nice tick tick the box approach for our marketing and our sales team going forward. If we go to the next page, so another thing that's really pushing us forward besides COVID nineteen is five g. So the telecommunications companies that we're dealing with, and we've had conversations at length with these telecommunications companies is they're really struggling to upsell customers on to five g accounts.

28:17 By and large, enterprise and even general public are very, very happy with their four g subscriptions. They can stream videos onto their phones. They can check their email. There's no real

28:27 need to have a five g gigabit connection on your phone. It it doesn't make a huge amount of difference. However, it makes a massive difference if you have a VR or AR headset where you can render the graphics, these very triple a quality graphics on a on a server at a remote location and then serve them onto the headset directly instead of processing on the headset itself. What that enables headset manufacturers to do is make the headset smaller and lighter. It'll make the batteries last longer as well, and it'll give people better, more realistic simulations. And even if you look at video based three sixty video or virtual reality video companies, like Melody VR as an example, they stream three sixty video, which is very, very high bandwidth. So even a three minute video could be four or five gigabytes, and having that streamed over four g is just not not not feasible. You need a really good Wi Fi connection.

29:22 However, the telecoms companies really see the benefit of pushing VR and AR headsets, and Deutsche Telekom are coming out with our own branded headset very, very soon. And besides that, you will be walking into telephone shops in the very, very near future. And when you sign up for a five g account, they'll give you the very nice brand new phone, but they'll also give you a very nice shiny VR, AR headset to consume lots more data. And that's really where we're gonna see that that that the massive ramp up in VR. Mark Zuckerberg himself has said that his plan is to have a billion people in a billion people in VR over the next three years. Even if he hits half that target, this is gonna be a very, very lucrative business for everybody involved. Now this graph actually this page is quite old. So before COVID nineteen, this is a a a graph from last year. You can see there was a massive uptake in software sales, and this was the release of standalone VR devices. So I've mentioned the Oculus Quest couple of times. HTC have their own version by focus, and then there's a Chinese company called Pico. These are standalone VR devices where you no longer need a desktop PC. So

30:31 when we released ENGAGE back in December 2018, you would have needed a PC, a powerful PC, and you would've needed a VR headset that was tethered to the computer to have a good experience. That's a really hard sell for anybody, for any business. You know, it's very cumbersome to get in and out of even if the experience is good. When standalone devices came out, you don't need a PC. Very easy setup. Very inexpensive as well. You just literally take it out of the the bag or take it off your desk and put it on your head, and you're you're ready to go. A lot of people then started jumping on board on VR. We were getting more and more queries coming in at the tail end of last year, and

31:07 the trend in that graph is actually it's even extended now with the quest two coming out. Very, very good device. They're gonna be like gold dust coming up to Christmas, but we expect to see millions of those devices out in people's hands over the next year to year and a half.

31:25 So yeah. Now we're at the appendices. I'm actually happy to take any questions. I don't know what the format will be. That that's fantastic, David Seamus. Thank you you very much indeed for that. I think probably what the best thing to do, ladies and gentlemen, is ask you to continue to submit your questions. Please do so by using the Q and A tab situated on the right hand side of the screen. Just simply type your question and press send. But just while the company take a few moments before those investor questions come through, I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard on the investor.me company platform.

32:02 Lastly, before I hand you back to David and Chairman, so I would like to remind you that your feedback is important to the company. Immediately after the presentation has ended, you will be redirected to the opportunity to provide feedback so the company can better understand your views and expectations.

32:17 David, Seamus, you've had a couple of pre submitted questions. Questions. Perhaps we could just start off with those, if that's okay? Yes, fine. And I guess this kind of ties into your update and announcement out this morning. The first question we've had is, in a recent trading update, you stated ENGAGE platform will be launched in China. Please can you provide further update including when this is happening, obviously, today's announcement, the target audience, competitive landscape, and how this may impact revenue? Yeah. So if we launched in China at 1AM last night, and then it was very successful. HTC ran an events a global event yesterday. So you you'll actually see some news about it on our Twitter Twitter feeds, and, obviously, the r n s went out today. Our competitors are Zoom and Microsoft Teams. This is what we're going after. Before COVID hit, I would have said, okay. Look. We're we're educational focused and training focused.

33:10 No longer we're a communications platform first and foremost,

33:15 and we want to be the next generation communications platform. And people I think many, many people, including myself, I I I do very much get video fatigue going after call after call after call. And I think there there's certainly something in going to a physical location and meeting somebody. I don't think we're going to be doing that anytime soon. And I think the next best thing would be the ENGAGE platform with people with headsets in, getting that that interaction. So yeah. Hopefully, that's answered that question. Was another part of that question as well, I believe. Yeah. There's another question we've got. Once there has been a surge in demand for the ENGAGE platform, are you able to be more I can't even say it, specific and provide any figures, particularly the number of companies signed up on the enterprise option? So just in relation to that, we can only discuss what's already out in the public domain.

34:05 What we can say is there's been a huge spike in the increase in the number of inbound requests and the number of signed up enterprise users. And as Dave and myself mentioned earlier, we've gone for marquee users of the plat on the platform, so the likes of the Facebooks and the American Air Force, Stanford University, people like that. So we've signed up some really high quality users. We haven't put that note in the public domain as yet in terms of the number of enterprise clients we have or in terms of the total value of those other than what's in the interim results to the end of June. That's great. Thank you very much indeed. I know perhaps we haven't had a huge amount of time to look at the questions that have just been submitted as we've gone through the live presentation. But perhaps I could ask you just to start at the top and read out those questions you can from investors.

34:55 And just to remind investors, all those questions submitted today will be reviewed by the company and answers delivered on the investment company platform. What I can do while while, Seamus, while you're reading through those questions, just give you some time, is maybe I can give you kind of an overview of my vision of what's gonna happen with the platform in the future from an educational sense and some of the interesting things that we're gonna be integrating into the platform. So within education, and again, it is going back to the education rules a small bit, we were looking at it in in a way that, okay, we wanna open up access to great institutions globally. And with students today, with the younger generation, everything is on demand with the younger generation. So when they're watching TV, they don't watch TV. What they do is they watch TikTok or YouTube or Netflix.

35:45 Straight away. The film is there instantly for them. Even when the younger generation order something online, it needs to be with them within twenty four hours, like Amazon as an example. They're very, very impatient bunch. And I think education is gonna go the same way in training where currently today, when you go to school or you go to college, you normally go to school or college in your own in a location close to you, and the educators that you have access to are the ones that are actually in that school. You don't have access to anybody else. Myself and my own background, I'm dyslexic. I never went to university or college, and it's not because I'm stupid. Far from it. But when I was going to school, I responded better to some educators than others, and it wasn't that I had bad educators. It was just that some of the educators were more visual visual teachers.

36:32 Now I think education is gonna go on demand as well where we'll have specialist specialist universities doing specialist subjects. And I think very soon in the future, what'll what'll happen is that you will have students who will tailor their education to their needs. They will do virtual physics in MIT in the morning and virtual English literature in virtual Oxford University in the afternoon. They pick and and choose their educators based on their needs. And I think a platform like ENGAGE can really free up educators as well instead of as a teacher saying the same thing over and over again in a class and presenting the same thing over and over again, they can prerecord it using our our recording system, our projected presence recording system in ENGAGE and tell the students, okay, do lessons one, two, and three, and it'll give them more time, more free time to do one on one with the students that might be struggling or the students that want to excel a bit more. So it opens up a lot of opportunities. And then integrating AI into the system in the future as well is certainly a plan with us where if you're watching a recorded presentation from one of the world's best lecturers, you can ask that recording a question and using voice recognition and AI. If the question the answer is in the database, that avatar can then give back the the answer to the student directly.

37:48 That's something that we will be actively looking at in the future. But all of these features that we've been developing in the background and and working on over the past four or five years, these are all the exact same tools that a lot of the industries, lot of the partners that are coming to us now, a lot of the bigger institutions and and and businesses, they're all looking for the same features where they wanna train up their staff or they wanna do kind of HR elements. And our platform lends itself very, very nicely to that. And the event stuff has just really come out with the blue and it's just we were as surprised as anybody, you know, the demand that we've had for it. So it's it's it's been a a very, very productive past six months, especially. Thanks, Dave. So just reading down through the questions, there's a there's a little bit of overlap on some of them. So I suppose the first one, Dave, that's come up is one for you. Who are our main competitors, and how do we differentiate from those competitors?

38:47 It depends on on which industry you're looking at. So, like, Zoom will be our main competitor on events. Zoom, Microsoft Teams, and for collaboration inter team collaboration in in companies as well. And they would be our main competitors currently. Then on the education side of things, MOOC platforms such as Coursera and edX, and they have a great repository of content. ENGAGE is a content tool perfectly suited to cater to that exact same market. And once we have more and more educators and get to a critical mass on the platform, I believe that that side of the business would grow. So it depends on which area. The the thing about ENGAGE and it it can be difficult, but it's also rewarding is that it's such an open platform that can do so many different things. What do you focus on? And as a company, we focus on where we're make money. Currently, where we're making money is events and then corporates using it for communications. That's where the money is right now, and that's what we're chasing after.

39:46 Thanks, Dave. The next one's one for myself. So with €3,000,000 of €3,200,000 of cash at the end of June and a running cash burn of 200,000 per month. How do you view your cost structure and cash runway? So as things stand, our cash runway is reducing month on month as revenue continues to grow. In the projections that are out in the marketplace at the moment, which are the only ones that can really talk about, we do foresee, reaching breakeven in the middle of twenty twenty two. So as things stand based on what's out in the marketplace, we wouldn't see ourselves running out of money or needing an additional raise prior to that. But, obviously, close to the end of the year, we'll be putting out revised projections taken onboard the impact of COVID nineteen and the impact of the HTC launch in China, and we'll advise the market accordingly at that time.

40:36 So then just on the next next question here is what is the limit for you to grow and scale this opportunity? There really isn't a limit to growing and scaling the platform in terms of the number of users. So enterprise licenses can be issued to any number of users. The platform is very scalable in that regard. For events, it's the same. The events can scale as required. I suppose the only the only limitation could be if if customers come looking for content developed for their events or for their enterprise licenses. There's obviously a human factor required on our side for that, but we're constantly growing the team, and we've got a very experienced team at the moment who are turning our content at a very high pace.

41:23 There's another question here that's what's happening with the headsets. I think David has covered that off in slide nine where he outlined that we're headset agnostic despite being having the agreement with HTC. We currently run on all the major headsets and will continue to do so into the future. Eventually, the headsets actually, sorry, Seamus. Eventually, the headsets will be gone. There's already companies out there working on contact lenses to get the same virtual experiences, but that's a little bit off at the moment. Cheers, Dave. So another one for you, Dave, is just in terms of HTC, what do they see as the opportunity in China, and how big do they feel it could be? They think that the opportunity could be massive.

42:08 So HCC are all in on VR. They used to be a manufacturer of mobile phones. They sold that business to Google, and they are a 100% into VR and AR. They need to make that a a success. Now they were working on their own platform similar to ENGAGE for a couple of years, but they came to us when they wanted to host the events, and they could see how mature and how developed the platform is. So they already have a lot of clients that they built over over many, many years. And even in the r and s today, Accenture is one of their their partners, and they're gonna be rolling out the the the platform and with HTC as well. So I think that puts a lot of a lot of weight behind us. They they are using all their sales and marketing team and support, which is fantastic because we are a very, very strong strong tech company where we may be a little bit at life as being the business development and sales support, having the might of a a large, large company like HTC. Even though they aren't as large as they used to be, they still have hundreds of staff there already and chopping up a bit to to resell engaged services.

43:13 Thanks, Dave. So how one that I can take here is how hard will it be for another smart team or company to replicate a platform like ENGAGE? So as things stand, there obviously are a number of other platforms being developed and in earlier stages than us in the marketplace, but none have the none that we've seen have the same professional outlook as ours. So Facebook have Facebook Horizons, which is more social platform. It's very cartoon in nature and isn't doesn't really lend itself to professional communications. HCC had other platforms that they had been developed in the background, but because of the the quality that they saw in the ENGAGE platform, they decided to come on board with us. I'm sure there are a number of others looking at this, but we're we've been developing this since 2015. We're very far ahead of the game. So even if somebody did throw a lot of money out of it and a bit with a big team, it would still take them quite a while to to get up to the standard that our platform is at.

44:08 Given the change in emphasis from education to meetings, are you intending on changing the name of the company? So I suppose in in well, I suppose, firstly, no, we're not planning on changing the name of the company. But in terms of the emphasis, we just took advantage of the opportunity that presented itself when COVID nineteen came along. And from the success of the HTC event, we were we showed that our development team was very quickly able to alter what ENGAGE was originally focused for to take advantage of this opportunity and the demand we're seeing in that area. So we do we are still focused on education and training, but events and meetings is just another string to the bow. What I would say just in relation to that, we're actually more known as the ENGAGE team than VR education. So quite often, anytime anybody contacts us, they kinda go, hey, ENGAGE team. So it's kinda the the VR education part of it is probably just more investor focused because our ticker is VRE.

45:06 So this is another one for you, Dave. What are the main objections you have to handle from potential customers when you're trying to sell them ENGAGE? It really depends on who we're dealing with. So quite often, the first people to reach out to us from a lot of these corporations would be a lot of the the real techy people that would have had VR headsets. They get exactly what we're doing. But then when you walk the chain to, say, CFOs and c level executives, they might never have tried VR before or they might have tried VR way back when where they put a phone in a cardboard box and thought that's what the experience, that's all they can give you, and it made them probably sick and ill. So it's kind of to coach people to try it out, meet me inside, and then we we we kinda sell it hard then when they're inside and give them a really, really good visual or visceral, sorry, experience.

45:58 There's not a huge kickback with the prices that we're charging, so that's why I think we're we're actually charging too little. We're always incrementally charging more and more for events. As an example, say, it like, large corporations, they would have a marketing budget where they go to physical events. And then let's say we use Microsoft as an example. When they attended the BET conference in 2018, they would have spent about a 250,000 on just the physical presence of a large, really nice laid out stand in the BET conference and then staff it. Now they would probably attend fifteen, twenty conferences a year, and they'd have a large budget for that. Every conference is off at the moment. They have no place to spend that budget, yet the budget is still there. We haven't had any kickback really on the the pricing that we've been charging, which, again, I I kinda kick my sales team because I I'm always going to them, well, if they happen to trade the high level for two or too low, let's let's go higher for the next one. Let's go higher for the next one.

46:55 Kind of easy use as well. It is it can be a little bit tricky for some of the older generation to get into it. So I think people in their forties are younger, maybe maybe 45 and younger, they have no issue using their mobile phone or tablets to move around. These are people that might have played video games back in the eighties and nineties. I think anybody above the the age of 45, and sorry for making a a massive generalization there for for everybody, they typically wanna do things more traditionally, and that's actually very true of the education market in Europe, especially where a lot of the the older generation would actually be in charge of the purse strings at these institutions. But in America, that doesn't happen. All the universities and colleges over there, they're all run like businesses, and they're pretty much run by a lot of younger people. And they're always looking at bottom line, how do we how do we charge more? And they see VR as a way of attracting more and more students to to their universities.

47:52 So it's it really depends on on who you're talking to, what their their perceived barriers are, but we haven't really hit any major stumbling blocks yet. And, again, I I can't emphasize enough that ENGAGE uses such little bandwidth that people with really, really poor Internet connections can actually have a perfectly normal meeting inside ENGAGE where they might be able to do it on a video based platform like Zoom. Thanks, Dave. So one that I can cover off here. Do you think the speed of hardware evolution could discourage some interested parties from purchasing headsets? For example, the Oculus Go recently being discontinued. I think we're in a similar cycle at the moment than what as what we would have seen in the earlier days of the maybe the iPhone development, where each iteration is becoming significantly better. But we are going to get to the stage soon where the changes are not as significant.

48:47 If you look at the Samsung s 10 compared to the Samsung s 20, there's very little changes, like and that once we get to that stage, the the there there shouldn't be any issue with the purchasing of hardware. But I think, as Dave already mentioned, we've covered that off really well by being available on all Android devices, on desktop machines as well, and in the next period, we'll be available on iOS as well. So even if people are put off from buying the headsets, we offer the we offer the ENGAGE platform on a wide variety of other platforms too. So then other than events, what other applications are you seeing most interest in from our customers? So I suppose in relation to that, team collaboration and meetings is obviously a key thing at the moment, especially in COVID nineteen world.

49:35 And also, distance training is is proven very popular at the moment from from customers, whereby you can have your entire workforce in a room getting trained very efficiently and for very very cost effectively through ENGAGE rather than having to be seated with paying somebody come into a into a classroom based environment. Obviously, that's not an option at the moment even if even if you are willing to to spend the money on it. Sorry. I'm just clicking through to some overlap, so I just don't want to be rehashing ourselves. So, again, I can look after this one. When you are currently setting up an event, what margin are you making, and how much bespoke work is typically required to set up an event for a new client? So in terms of margin, so if we look at a bit if I look at an event when I'm looking at the costing and the margin aspects of it, I looked at it twofold. So the first is just the the the stand alone license to actually run the event, which is just granting the user the customer x number of users that can access the event, and that is basically full full margin. There's no there's no cost to us on that.

50:40 It's just a matter of putting their email addresses into the system and setting them up for an event license. The only cost associated would be when we do bespoke work, but our bespoke work is is quite high margin. We haven't we haven't officially announced what we char what we our margin is per publicly, but our margin at the end of June, our gross margin was 70%, but that reflects the that reflects the showcase experience as well, like Apollo 11 and Titanic selling where the platforms take 30% of the cut off that. So then the next question is, of your 50 employees, how many are in sales, are supporting partners or resellers, and do you anticipate any change to that head count count over the next twelve to twenty four months?

51:32 Dave, I'll let you have that one if you want. Yeah. So the sales business development and support, we've 10 staff dedicated in that area. Everybody else is is really techy people, and we are gonna be growing that significantly. We're especially finding with some of the events as well, especially with the large corporations, they might want a little bit more hand holding. So we do expect to expand that. But, again, having HTC and their hundreds of employees all all looking after that side of the business, and we expect that that will really take some of the burden off us. But we are we're very slow to hire sales and marketing people. The best the best thing that they can sell is themselves. And then, like, the last thing you want is somebody who's sitting there for six months and not actually generating any any revenue. We're very particular in who we imply, and if they're not not generating revenue very, very quickly, we're very quick to get rid of them as well. So it is a slower process in getting those type of people involved in the company. But we are growing, and we have a number of a number of vacancies available at the moment. So if anybody is listening, I mean, they know it's a way for for them office.

52:41 So just a a question on the other aspect of our business. Is there a growing revenue line from the Apollo 11 game? So I suppose in terms of that, we have three main showcase experiences available across all the major platforms, PlayStation, Oculus, and Steam. That's Apollo 11, which was launched four four and a half years ago now, Titanic, was launched two and a half years ago, and Shuttle Commander, which was launched at the back end of last year and only recently launched on the Oculus Quest store. So we we do have a continuing revenue stream from them, and we expect it's a public in the public domain from our projections to to generate 0.75 to a million year to year from them. There had there the it's not the main focus of the business anymore, but we do foresee having one showcase experience every year depending on the depending on the the folks of the company at the time and what we see as the next suitable a suitable title for us.

53:41 So then one of the last questions I have here is what's the model you use for your pricing? Is it per user, per annum, or hours used? So for license agreements for enterprise clients, it's a per seat, so essentially per user fee per annum. For events, it's again, it's a per user to attend the specific event, and then we we charge a daily rate for any content that we create outside of the the license fee. So just let me scan through so some of the questions jump up and down depending on who upvotes them. That's fine. I I I was just scanning as well. What I would say on the events is we're actually gonna be doing a a quite a big marketing push towards the end of this year because a major event happening this weekend is the UN event. And part of that event, Pitbull, the rapper is performing in the events inside ENGAGE.

54:29 He's got over a 100,000,000 followers, and we expect that it's gonna get a lot a lot of press for us. And some of the other events that we've held in the past as well, like the XPRIZE events and some of the other stuff that probably hasn't been announced, it's all gonna be wrapped up into a nice little video and a marketing piece, and then we're gonna be pushing it aggressively at the end of this year because we we really wanna mop up all the major events for next year. Thanks, Dave. I I think I think we've covered off all of the answers, all the questions that have come up. Apologies if I haven't. We'll be reading through them afterwards, and we can answer any other ones by text after the presentation is finished. But I think we've covered off the the main ones. Yeah. I I think that's absolutely fantastic. So thanks thanks, David. Thanks, James, for doing that. I think you have pretty much addressed all those questions for investors. And as you say, the company will review all questions submitted by investors today, we'll publish those answers on the investment company platform.

55:22 Just before we wrap up, Dave, perhaps I could just ask you for a few last words before I redirect investors to to give you some feedback. Yeah. I think the the same goes, right place at right time. You know, obviously, like COVID nineteen, we didn't want to expand because of COVID nineteen, but we're certainly seeing, the opportunity, in in, the current situation where it presents, like, we're we're super busy. We're working super hard, and we're very, very cash efficient with how we spend our money as well. We don't just raise money for nothing, and we don't spend money for nothing either. We we've been kind of bootstrapping the business, but just to let let people know with the explosive growth that we've had in ENGAGE, there's only two staff at the moment who are dedicated on showcase experiences.

56:08 Every other person in the company is dedicated on ENGAGE. That's where the growth of the company is. That's where we see our future, and that's where we're seeing seeing strong strong growth right now. So I'd like to thank everybody for attending this presentation and happy to answer your questions after this video cast. That's fantastic. David, Seamus, thank you very much for updating investors today. Could I ask investors not to close this session as you will be automatically redirected for the opportunity to provide your feedback? If you accessed the meeting from our website, the feedback page will appear just a couple of seconds after the end of the webinar. If you've accessed via the link sent to you via an e mail, again, it would ask to in just to submit your feedback. So do please take a moment to do so. On behalf of the VR Education Holdings PLC team, we'd like to thank you for attending today's presentation. That concludes today's event. Thank you very much indeed for attending. Good afternoon.