Investment

RNS Number : 9462M

FastForward Innovations Limited

26 January 2016

 

26 January 2016

FastForward Innovations Limited

("FastForward" or the "Company")

Acquisition of 9.1% interest in College & Career Counselor App "Schoold"

Summary

The Board of AIM-traded FastForward Innovations Limited, trading under the symbol FFWD, ("FastForward", the "Company" or "FFWD"), is pleased to announce that the Company has today subscribed for a 9.1 per cent. interest (on a fully diluted basis) in Delaware, US incorporated private company Vested Finance Inc., ("VFI"), an education technology provider trading under the brand "Schoold", for a total consideration of US$1 million.  VFI is the developer and owner of the "Schoold" mobile technology application, a big-data driven College & career counsellor App focused on higher education and career options for students in US education system.

This brings the total investee companies in which FFWD has invested to seven as it continues to develop its exciting portfolio of venture businesses across a range of subsectors within the tech and bio-tech sectors.

Commenting on the investment Stephen Dattels said:

"Schoold is a new education technology application that the Board of FastForward believes has the potential to be the number one education and career focused app in the US, with particular popularity amongst overseas students wishing to study or work in the US.  Lorne Abony founded Schoold and VEMO Education Inc. (another FastForward investment). The Board approached Lorne who agreed that the Company could subscribe for a strategic stake in this exciting business."

About Schoold

Schoold transforms college and career planning by using technology to educate, inform and inspire users about their prospects for a successful future. Schoold is a big-data driven college and career counsellor mobile app with proprietary technologies that exploit leading data science. As a mobile app, Schoold owns and maintains all aspects of content and user experience while benefitting from increased utility among its target student demographic. Schoold features the tools and resources that it believes are most important to users including college, major and career discovery, individualised matching, predictive admissions chances, and financial aid support. Schoold's customised interface narrows the universe of college and career data to a manageable, relevant amount of information that can be easily navigated, explored, and outcomes assessed.

The US consumer spends more than US$1 trillion annually on education which includes the discretionary and retail spending of the students. Through its mobile app, Schoold intends to capture part of this market by providing higher education counselling and targeted marketing to help educational institutions meet their recruitment needs. Schoold's potential user base includes large numbers of foreign students, particularly from India and China where there is growing interest from students wishing to continue their studies in the US. Also, users are encouraged to refer the app and share information with parents and adult influencers, who play an advising role in student decision making.

Schoold is led by CEO, Sourabh Ahuja, previously VP Android & Cross-Platform Development at Glu Mobile where he led development of more than 50 Mobile Apps/Games with in excess of 300 million App installs under his management.

"The college and career planning process is in dire need of an innovation overhaul," says Mr Ahuja. "People have grown to expect organised, relevant information at their fingertips, yet data on schools and careers has remained imperfect and fragmented. The Schoold app is here to deliver students the information they need to make the decisions best for them."

Schoold management team boasts significant experience in Mobile, Gaming and Education industries together with award winning Data Scientists with PhDs in Educational Data Mining.

For the 11 months ended 30 November 2015, Schoold had revenue of US$19,422 and incurred a trading loss of US$1,565,055 for the period.  As at 30 November 2015, Schoold had total net assets of US$603,155.

Schoold is currently in a closed beta test period, and VFI are encouraged by the initial response and demand through its Facebook and Instagram ads, as well as during high school conferences that VFI has attended.  It is anticipated that beta testing will be completed shortly and that the international product launch will occur in early March 2016.

Investment summary

The Company has subscribed for 1,078,035 Seed Preferred Shares of Schoold ("VFI Shares") at a price of approximately US$0.92761 per VFI Share (the "Subscription"), for total cash consideration of US$1 million (the "Consideration"). The Company has funded the Subscription from its existing cash resources.

The terms of the Subscription are set out in a subscription agreement between VFI and the Company dated 25 January 2016 (the "Subscription Agreement").  Under the terms of the Subscription Agreement VFI has given to the Company customary warranties regarding the business and affairs of the Company (including as to the financial information disclosed), as well as VFI intellectual property rights and the Schoold app stage of development.  In addition, VFI has adopted a restated Certificate of Designation and all shareholders of VFI have signed a shareholders' agreement, together setting out the rights of holders of Seed Preferred Shares (including a liquidation and dividend preference (to the value of the subscription cost), a right of first refusal should other shareholders wish to transfer their shares, a right of pre-emption in relation to issue of new shares, and drag and tag along rights).  In addition, FFWD has been granted down-round protection whereby should VFI raise additional equity finance in the future at a lower valuation, the price per VFI Share paid by FFWD would be adjusted downward to a weighted average adjusted price per VFI Share.

The investment in Schoold follows the Company's investment in Vemo Education Inc. ("VEMO"), an education technology company working with U.S.-based colleges and universities to provide a platform for income-based student financing programmes, announced on 21 December 2015. Mr Abony is a substantial shareholder of VFI and VEMO.  Following completion of the investment in VFI, the Independent Directors have confirmed to the Company's nominated adviser that the Company has no intention currently to make any further investment in Schoold or VEMO.

Related Party Transaction

Mr Lorne Abony, a director of the Company, is interested in approximately 77 per cent. of VFI (on a fully diluted basis) prior to the Subscription.  Accordingly, the Subscription is a Related Party Transaction under Rule 13 of the AIM Rules for Companies. Mr Jim Mellon, Mr Stephen Dattels, Mr Ian Burns and Mr Bryan Smith are the independent directors of the Company for the purposes of the transaction (the "Independent Directors").  The Independent Directors confirm that, having consulted with the Company's Nominated Adviser, the terms of the Schoold Subscription are fair and reasonable insofar as the Company's shareholders are concerned. 

The Independent Directors and Mr Lorne Abony negotiated the terms of the Subscription on an arms-length basis. The Independent Directors conducted customary due diligence into VFI and given the early stage development of Schoold, procured an independent third party valuation from a US-based valuation expert in the technology sector. The Independent Directors have in particular noted that the valuation of Schoold implied by the Subscription is in line with this independent valuation. The Subscription Agreement also provides the Company with appropriate shareholder rights and contains representations and warranties in the Company's favour and any subsequent investment decisions regarding VFI, such as the exercise of any rights under the Subscription Agreement or Shareholders' Agreement will be solely taken by the Independent Directors.

As a result of the Subscription, Lorne Abony is now a director and substantial shareholder in two FFWD investee companies: VEMO and VFI (Schoold). As such, any subsequent investment decisions in respect of these two investments will be taken by the Independent Directors.

Further information regarding Schoold is available from its website at www.schoold.co. 

For further information on the Company and its investments please visit www.fstfwd.co or contact:

FastForward  Innovations Limited Tel: [phone] Elysium Fund Management Limited

Beaumont Cornish Limited (Nomad) Tel: [phone] James Biddle / Michael Cornish

Peterhouse Corporate Finance Limited (Broker) Tel: [phone] Guy Miller / Lucy Williams

DISCLAIMER

Beaumont Cornish Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as Nominated Adviser to FastForward Innovations Limited and no one else in connection with the Subscription and will not be responsible to anyone other than FastForward Innovations Limited for providing the protections afforded to clients of Beaumont Cornish Limited nor for providing advice in relation to the Subscription. Neither Beaumont Cornish Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Beaumont Cornish Limited in connection with this Announcement, any statement contained herein, including the valuation of Schoold in connection with the Subscription or otherwise.

CAUTIONARY STATEMENT

The AIM Market of London Stock Exchange plc does not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding potential values, the future plans and objectives of FastForward Innovations Ltd. There can be no assurance that such statements will prove to be accurate, achievable or recognizable in the near term.

Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. FastForward Innovations assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

 

END

 

 

MSCEAAFSADPKEAF