TIDMEVRH
RNS Number : 3276Z
EVR Holdings PLC
14 March 2017
For immediate release 14 March 2017
EVR Holdings plc
('EVR' or the 'Company')
AUDITED FINAL RESULTS FOR THE YEARED 31 DECEMBER 2016
EVR Holdings plc (AIM: EVRH), a leading creator of music virtual
reality ('VR') content, announces its results for the year ended 31
December 2016.
Operational Highlights
-- Beta version of the MelodyVR app launched on 22 December 2016;
-- MelodyVR's multi-year exclusive partnership agreements with
venues and promoters have increased by over 550% and now cover 64
worldwide events and music festivals;
-- MelodyVR partnered with Warner Music Group and entered a VR
content creation and distribution agreement in December 2016;
-- A warrant was granted to Warner Music Group giving it a potential equity interest in EVR;
-- Marketing, licensing and development teams have been
strengthened with the addition of significant hires;
-- MelodyVR partnered with Telefonica to deploy a 'lite' version
of the MelodyVR in over 600 O2 stores in Germany.
Anthony Matchett, Chief Executive Officer of EVR said:
"As we prepare for the forthcoming worldwide launch of our VR
music platform, the virtual reality industry continues to grow at
an exponential rate. Following a recently announced partnership
with Warner Music Group, I believe that MelodyVR is increasingly
well placed to dominate the VR content ecosystem given the limited
offering of entertainment content that is currently available to
consumers. As the VR market develops, fuelled predominantly by
promotional campaigns from Samsung, HTC and Google, as well as the
recent release of PlayStation VR, we expect the demand and appetite
for high-quality VR content to increase from both consumers and
hardware manufacturers alike. With the world's leading technology
companies, such as Facebook, Samsung, Google and Sony all battling
for market share, we expect that promotional activities involving
low-cost, or free of charge VR devices and featuring exclusive
content, will become more commonplace. With VR hardware sales
rapidly increasing and user adoption continuing to accelerate, we
look forward to the worldwide launch of our VR music platform and
substantial content library."
-Ends-
For more information please contact
EVR Holdings plc
Sean Nicolson, Chairman Tel: +44 (0) 20 7466 5000
Anthony Matchett, Chief Executive Officer www.evrholdings.com
SPARK Advisory Partners Limited (Nominated Adviser) Tel: +44 (0) 203 368 3550
Neil Baldwin / Sean Wyndham-Quin www.sparkadvisorypartners.com
Peterhouse Corporate Finance Limited (Broker) Tel: +44 (0) 20 7469 0930
Eran Zucker / Lucy Williams www.pcorpfin.com
Media enquiries:
Buchanan
Ben Romney / Jamie Hooper Tel: +44 (0)
Stephanie Watson / Catriona 20 7466 5000
Flint
EVR@buchanan.uk.com www.buchanan.uk.com
About EVR Holdings plc
EVR Holdings plc ('EVR') is a company that is quoted on the AIM
market of the London Stock Exchange (EVRH.L). EVR, a creator of
virtual reality content, joined AIM on 16 May 2016 following a
reverse takeover of Armstrong Ventures plc. MelodyVR Ltd is a
wholly owned subsidiary of EVR.
Further information can be viewed at www.evrholdings.com
Chairman's Statement
Introduction
I am pleased to present my report as Chairman of EVR Holdings
plc ("the Company") for the year ended 31 December 2016.
Financial Review
In 2015 the Company changed the scope of its investing policy to
focusing on opportunities in the media, technology and healthcare
sectors. On 16 May 2016 the Company acquired MelodyVR Ltd,
("Melody") and its subsidiary company Immersive Construction ltd
(hereinafter referred to as the "Group") for a total consideration
of GBP5.12 million. This transaction has been accounted for in the
financial statements below as a reverse acquisition in accordance
with IFRS 3, hence the consolidated results contained herein treat
Melody as the acquiring company and the historical comparatives are
the comparatives of Melody, as opposed to those of the Company.
On 20 September 2016, the Company announced the oversubscribed
placing of 200,000,005 new ordinary shares of 1p each to new and
existing investors, at an issue price of 1.7p per share. This
generated GBP3.4 million (before expenses) with the shares being
issued on 11 October 2016.
As at 31 December 2016 the operating losses before one off or
non-cash items were GBP1,640,175 (2015: GBP179,145), this adds back
non cash and non-recurring items GBP990,747 (2015: GBP7,413).
Operating losses of the Group were GBP2,630,922 (2015 operating
losses: GBP186,558), it is anticipated that the Group will begin
generating revenue once the MelodyVR application is launched.
Cash and cash equivalents as at 31 December 2016 were
GBP3,369,693 (2015: GBP13,115).
Business Review
I am pleased to report that EVR's executive team has delivered
upon a number of strategic goals as outlined in the Company's
Admission Document dated 27 April 2016.
In the nine months following readmission to AIM, the Group has
successfully released a beta version of its VR music platform,
secured a global content creation and distribution agreement with
one of the world's largest record labels, increased its number of
exclusive partnerships with venues and promoters by over 550% and
has significantly strengthened its marketing, licensing and
development teams in London.
Over the next 12 months, the Group will continue to follow an
aggressive expansion strategy, focusing heavily on content creation
and product development as well as areas of interest such as
content analytics, augmented reality and interactive advertising.
In addition, it will also seek to strengthen its Board by the
appointment of new directors who bring additional commercial,
corporate and strategic experience.
Feedback from beta testing of Melody's application which
commenced in December 2016 has proven to be extremely positive and
has provided numerous insights into consumer behaviour, leading to
several refinements to the platform's user experience.
The executive team intends to leverage further insights as even
more users are invited to participate in the beta programme ahead
of our wider commercial launch, which will occur at a time that is
strategically aligned with the long term goals of the Company and
our partners. Our team continues to work closely with hardware
manufacturers such as Facebook's Oculus and Sony PlayStation,
refining both launch strategy and marketing plans.
Future Developments
In order to further increase worldwide production capabilities
and in-line with our 2017 growth strategy, the Group intends to
open a series of satellite offices throughout Europe, North America
and Asia. The offices, opening initially in Los Angeles and New
York, will enable the Group to better serve its partners, such as
record labels, hardware manufacturers and artists. Following a
series of key hires in areas such as marketing, licensing and
engineering, Melody now intends to grow its global presence,
attracting world-class talent from both the music and technology
industries, at both management and director level.
As the VR market matures, Melody will launch its free-of-charge
app across the leading VR hardware and devices. The Board believes
that the Melody platform, featuring exclusive content and
performances from world-renowned artists and musicians will cater
to the growing consumer demand for VR entertainment content and in
turn, generate significant revenues for the Company post-launch. To
date, Melody has created thousands of interactive VR experiences
with over 500 international recording artists. Over the coming
months, Melody will pursue its goal of launching what the Board
believes will be the leading destination for virtual reality music
experiences and the world's next major music platform.
Sean Nicolson
Chairman
PRIMARY FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
2016 2015
GBP GBP
Continuing operations:
Administrative expenses (2,630,922) (186,558)
------------------ ------------------
OPERATING LOSS (2,630,922) (186,558)
Operating loss before non-recurring
and non-cash items (1,640,175) (179,145)
------------------ ------------------
Depreciation (53,631) (7,413)
Readmission costs (492,139) -
Share based payments (444,977) -
------------------ ------------------
OPERATING LOSS (2,630,922) (186,558)
------------------------------------------- -------------------- --------------------
Finance income 2,212 -
Finance costs (7,847) -
------------------ ------------------
LOSS FOR THE YEAR BEFORE
TAXATION (2,636,557) (186,558)
Taxation - -
------------------ ------------------
NET LOSS AND TOTAL COMPREHENSIVE
INCOME
FOR THE YEAR (2,636,557) (186,558)
Attributable to:
Owners of the parent company (2,584,414) -
Non - controlling interest (52,143) -
------------------ ------------------
LOSS PER SHARE - basic and
diluted from continuing operations (0.028)p (0.04)p
======== ========
Consolidated Statement of Financial Position
As at 31 December 2016
2016 2015
GBP GBP
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 229,732 39,894
Intangible assets 603,476 2,150
------------------ -------------------
TOTAL NON-CURRENT ASSETS 833,208 42,044
------------------ -------------------
CURRENT ASSETS
Trade and other receivables 112,602 17,510
Cash and cash equivalents 3,369,693 13,115
--------------------- ---------------------
TOTAL CURRENT ASSETS 3,482,295 30,625
------------------ ---------------------
TOTAL ASSETS 4,315,503 72,669
======== ===========
CURRENT LIABILITIES
Trade and other payables (232,283) (101,227)
------------------ ---------------------
NET ASSETS/(LIABILITIES) 4,083,220 (28,558)
======== ==========
EQUITY
Share capital 10,067,861 9,500
Share premium reserve 5,903,289 148,500
Retained Earnings (2,770,972) (186,558)
Share option reserve 444,977 -
Merger relief reserve 486,611 -
Non-controlling interests (46,003) -
Reverse takeover reserve (10,002,543) -
------------------ ---------------------
TOTAL EQUITY 4,083,220 (28,558)
========= ==========
Consolidated Statement of Changes in Equity
For the year ended 31 December 2016
Share Share Merger Share Retained Reverse Non-Controlling Total
Capital Premium Relief Option Losses Takeover Interest Equity
Reserve Reserve Reserve
GBP GBP GBP GBP GBP GBP GBP GBP
Balance
at 1 January
2015
Issue
of new
shares 9,500 148,500 - - 158,000
Comprehensive
loss for
the year - - - - (186,558) - (186,558)
------------------ -------------------- ---------------- ------------------ --------------------- ----------------- ----------------- -----------------
Balance
at 31
December
2015 9,500 148,500 - - (186,558) - - (28,558)
Warrants
and options
issued - - - 444,977 - - - 444,977
Company's
reserve/(deficit)
prior
to reverse
acquisition 2,925,753 4,523,392 - - (5,679,926) - - 1,769,219
Shares
issued
by the
Company
on acquisition 4,866,118 486,611 - - - - 5,352,729
Reverse
acquisition
adjustment (9,597) (240,457) - - 5,679,926 (10,002,543) - (4,572,671)
Share
issue 2,276,087 1,471,854 - - - - - 3,747,941
Non-controlling
interest - - - - - - 6,140 6,140
Loss for
the year - - - - (2,584,414) - (52,143) (2,636,557)
------------------ -------------------- ---------------- ------------------ --------------------- -------------------- ------------------ -----------------
Balance 10,067,861 5,903,289 486,611 444,977 (2,770,972) (10,002,543) (46,003) 4,083,220
at 31 ======== ======== ======= ======== ======== ======== ======== ========
December
2016
Consolidated Statement of Cash Flows
For the year ended 31 December 2016
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES GBP GBP
Loss from continuing operations (2,636,557) (186,558)
Adjustments for:
Depreciation of fixed assets 53,631 7,413
Share based payment expense 444,977 -
Increase/(decrease) in trade
and other receivables 112,575 (17,510)
Increase in trade and other
payables 475,576 23,949
_____ _____
NET CASH OUTFLOW FROM OPERATING
ACTIVITIES (1,549,798) (172,706)
_______ _____
Investing activities
Purchase of property, plant
and equipment (243,469) (47,307)
Purchase of intangible assets - (2,150)
Acquisition of subsidiary 1,401,905 -
_____ ____
NET CASH INFLOW FROM INVESTING
ACTIVITIES 1,158,436 (49,457)
Financing activities
Proceeds from issue of ordinary
share capital 3,328,988 158,000
Proceeds from the exercise of 418,952 -
warrants
Loans from directors - 77,278
_____ _____
NET CASH GENERATED FROM FINANCING
ACTIVITIES 3,747,940 235,278
_____ _____
Increase in cash and cash equivalents 3,356,578 13,115
Cash and cash equivalents brought 13,115 -
forward
_____ _____
CASH AND CASH EQUIVALENTS CARRIED
FORWARD 3,369,693 13,115
_____ _____
ABRIDGED NOTES TO THE PRIMARY FINANCIAL STATEMENTS
For the 12 months ended 31 December 2016
The financial statements of the Group for the 12 months ended 31
December 2016 and 2015 have been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRS) issued
by the International Accounting Standards Board (IASB) as adopted
by European Union.
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2016
or 2015 as defined by section 435 of the Companies Act 2006 but is
derived from those accounts. Statutory accounts for 2015 have been
delivered to the Registrar of Companies, and those for 2016 will be
delivered in due course. The auditors have reported on those
accounts; their reports were (i) unqualified, and (ii) did not
include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006 in respect of the accounts.
Basis of Consolidation
Where the Group has the power, either directly or indirectly, to
govern the financial and operating policies of another entity or
business so as to obtain benefits from its activities, it is
classified as a subsidiary. The consolidated financial statements
present the results of the Company and its subsidiaries ("the
Group") as if they formed a single entity. Intercompany
transactions and balances between Group companies are therefore
eliminated in full.
Business Combinations
The Consolidated Financial Statements comprise the period for
the 12 months to 31 December 2016. During the year, the Company
completed the acquisition of MelodyVR Ltd ("Melody"). The Directors
determined that the transaction was akin to a reverse acquisition
as per IFRS 3, Business Combinations. However, in order to fall
under the category of a Business Combination under IFRS 3, the
purchase needs to be of a business. The Directors have determined
that the Company constitutes an investment business and therefore
the transaction falls under the scope of IFRS 3.
Consequently, it is appropriate to apply the guidance in
paragraphs B19-B27 of IFRS 3 for reverse acquisitions. Application
of the reverse acquisitions guidance results in the non-listed
operating entity being identified as the accounting acquirer, and
the listed investment business being identified as the accounting
acquiree. Therefore for accounting purposes Melody should account
as if it purchased the Company. Any difference between the fair
value of the assets acquired and the fair value of the shares
issued should be recognised as goodwill, in accordance with IFRS
3.
Therefore the results contained herein treat Melody as the
acquiring company and the historical comparatives are the
comparatives of Melody, as opposed to the Company.
Going Concern
The Financial Statements have been prepared on the going concern
basis. The Directors have prepared cash flow forecasts through to
30 June 2018. These forecasts take into account the intended launch
timetable within the year ending December 2017, as well as
projecting potential revenue profiles based on hardware adoption
estimates. The Directors have performed sufficient sensitivity
analysis including what the impact may be of significant delays to
launching the MelodyVR app, not securing sufficient licencing or
insufficient global hardware adoption. As significant progress has
been made in securing the necessary exploitation rights and there
being very positive initial indicators on hardware adoption to
date, the intended launch timetable is considered achievable. As
there are sufficient existing resources to operate for the
foreseeable future irrespective of launch the Board has concluded
that the going concern assumption is appropriate in preparing these
financial statements.
1. LOSS FROM OPERATIONS
This has been arrived 2016 2015
at after charging:
Group Company Group Company
GBP GBP GBP GBP
Depreciation of property,
plant and equipment 53,631 - 7,413 -
Auditors' remuneration:
Audit fees 17,750 13,000 - -
Audit of accounts of
associates of the company
pursuant to legislation 10,500 - 5,000 10,000
Non audit fees: 1,180
Taxation advisory services 4,000 4,000 - -
Other advisory services 55,000 55,000 - -
======== ======== ======== ========
2. ACQUISITIONS DURING THE YEAR
On 15 May 2016, the Company acquired 100% of the ordinary shares
in Melody and its 51% owned subsidiary Immersive Construction Ltd,
by share for share exchange. This was determined to be a reverse
takeover acquisition. The breakdown of assets and liabilities below
are that of EVR Holdings plc.
A breakdown of assets and liabilities acquired is as
follows:
Book Value Fair Value Fair Value
Adjustment to Group
GBP GBP GBP
Debtors 676,379 - 676,379
Cash at bank 1,401,905 - 1,401,905
Creditors (132,507) - (132,507)
_____ _____ _____
Net assets
on acquisition 1,945,777 - 1,945,777
Goodwill
on acquisition 603,476
_____
Consideration 2,549,253
_____
Discharged
by:
Share for
share exchange 2,549,253
_____
The Goodwill calculation per the interim financial statements
has been recalculated from GBP2,549,704 to GBP603,476 to coincide
with the fair value of the consideration paid.
3. AUDITOR'S REMUNERATION
2016 2015
Group Company Group Company
GBP GBP GBP GBP
During the year the
Company obtained the
following services
from the Company's
auditors:
Fees payable to the
Company's auditors
for the audit of the
Company's
annual accounts 17,750 13,000 5,000 10,000
Fees payable to the
Company's auditors
for other services:
Tax services 4,000 4,000 - 1,180
Other services 55,000 55,000 - -
------------------- ------------------- ------------------- -------------------
76,750 72,000 5,000 11,180
========= ========= ========= =========
4. DIRECTORS' AND EMPLOYEE REMUNERATION
2016 2015
Group Company Group Company
The amount paid to GBP GBP GBP GBP
directors and employees,
is as follows:
Short-term employee
benefits 691,302 268,124 - 121,516
Share based payment
costs 358,497 31,009 - 110,762
------------------- ------------------- ------------------- -------------------
1,049,799 299,133 - 232,278
========= ========= ========= =========
2016 2015
Group Company Group Company
The average number No. No. No. No.
of employees for the
year was as follows:
Directors 4 2 2 2
Senior Management 1 1 - -
Staff 9 - - -
------------------- ------------------- ------------------- -------------------
14 3 2 2
========= ========= ========= =========
Details for directors'
remuneration is as
follows:
Total Total
Director Fees 2016 2015
GBP GBP GBP
Sean Nicolson 25,000 25,000 11,458
Peter Read 25,000 25,000 11,458
Anthony Matchett 75,000 75,000 -
Steven Hancock 75,000 75,000 -
Simon Cole 15,624 15,624 -
Haresh Kanabar - - 35,600
Manish Kotecha - - 29,000
Peter Redmond - - 34,000
------------------- ------------------- -------------------
215,624 215,624 121,516
5. EARNINGS PER SHARE
The basic earnings per share is based on the loss for the year
divided by the weighted average number of shares in issue during
the year. The weighted average number of ordinary shares for the
year ended 31 December 2016 assumes that all shares have been
included in the computation based on the weighted average number of
days since issue.
2016 2015
Group Group
GBP GBP
Loss attributable to equity holders
of the Company:
Continuing and total operations (2,584,414) (186,558)
------------------- ------------------
No. of No. of
shares shares
Weighted average number of ordinary
shares in issue for basic and
fully
diluted earnings 9,113,642,478 486,611,833
----------------------- ---------------------------
Pence Pence per
per
Share share
Loss per share
Basic and diluted:
Continuing and total operations (0.028)p (0.04)p
========== ==========
6. SHARE OPTIONS AND DIRECTOR WARRANTS
EQUITY-SETTLED SHARE OPTION SCHEME
The Group operates share-based payment arrangements to
remunerate directors and key employees in the form of options and
warrants. Equity-settled share-based payments are measured at fair
value (excluding the effect of non-market based vesting conditions)
at the date of grant. The fair value determined at the grant date
of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Company's
estimate of shares that will eventually vest and adjusted for the
effect of non-market based vesting conditions.
The following table sets out the details of these options
granted:
Warrants in parent at 31-Dec Warrants in parent converted Warrants issued in Warrants at 31-Dec Exercise Issue date Expiry
2015 1 for every 100 In year the year 2016 price date
Option
holder
Simon
Cole 4,615,090 4,615,090 1.1p 16.05.2016 17.05.2019
Anthony
Matchett 11,537,725 11,537,725 1.1p 16.05.2016 17.05.2019
Steven
Hancock 11,537,725 11,537,725 1.1p 16.05.2016 17.05.2019
Sean
Nicolson 4,615,090 4,615,090 1.1p 16.05.2016 17.05.2019
Peter
Read 4,615,090 4,615,090 1.1p 16.05.2016 17.05.2019
Sean
Nicolson 461,509,020 (456,893,930) 4,615,090 1.2p 31.07.2015 31.07.2020
Peter
Read 461,509,020 (456,893,930) 4,615,090 1.2p 31.07.2015 31.07.2020
------------------------------ ----------------------------- --------------------- ---------------------
923,018,040 (913,787,860) 36,920,720 46,150,900
================ ============== ========== ==========
No warrants have lapsed nor been exercised during the year. This
calculation takes into account warrants and options awarded to
directors in the performance of their duties
The Group operates an approved enterprise management incentive
scheme under which employees have been granted options to purchase
shares in EVR Holdings plc. The unexercised options at 31 December
2016 expire on the tenth anniversary from the grant date and are
subject to vesting criteria.
Equity-settled share-based payments are measured at fair value
(excluding the effect of non-market based vesting conditions) at
the date of grant. The fair value determined at the grant date of
the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest and adjusted for the
effect of non-market based vesting conditions
On 31 July 2015 the Group issued 461,509,020 warrants for 0.01p
ordinary shares to both Sean Nicolson and Peter Read as part of
their remuneration terms. These warrants have an expiry date of 31
July 2020 and following the consolidation of the Group's ordinary
shares on 13 May 2016 the warrants were consolidated into a total
of 9,230,180 warrants each exercisable at 1.2p. (0.012p prior to
the 1 for 100 shares consolidation).
On 16 May 2016 the Group issued 11,537,725 warrants to both
Anthony Matchett and Steven Hancock, with a further 4,615,090
issued to each of Simon Cole, Sean Nicolson and Peter Read. These
warrants have an expiry date of 16 May 2019 and are exercisable at
1.1p. The fair value of these warrants was determined using the
Black-Scholes option pricing model and was 0.4p per warrant.
The significant inputs to the model in respect of the options
and warrants granted were as follows
2016 2015
Grant date share price 1.1p 0.012p
Exercise share price 1.1p 0.012p
No. of share options 59,777,856 923,018,040
Risk free rate 0.5% 0.5%
Expected volatility 50% 50%
Expected option life 3 years 5 years
Calculated fair value per share 0.4p 0.012p
The total share-based payment expense recognised in the income
statement for the year ended 31 December 2016 in respect of
warrants granted was GBP239,111.
The fair value of the options is based on the market value at
the date of grant of the number of shares for which the performance
criteria have been met for the year less the exercise price of 1.1p
per share. The market value per share at the date of grant was
3.3p.
On 13 October 2016 the Company issued 13,828,472 options to the
employees of the Group under the approved enterprise management
incentive share option scheme and subject to vesting criteria.
The significant inputs to the model in respect of the options
granted were as follows:
2016
Grant date share price 3.3p
Exercise share price 1.1p
No. of share options 13,828,472
Risk free rate 0.5%
Expected volatility 50%
Expected option life 10 years
Calculated fair value per share 2.59p
The total share-based payment expense recognised in the income
statement for the year ended 31 December 2016 in respect of share
options granted was GBP119,386.
On 22 December 2016 the Group issued 43,239,926 options to
Warner Music Inc. These warrants may be exercised at any time on or
before 21 December 2021 and entitle the warrant holder to subscribe
4.25p for one ordinary share for each warrant held. The fair value
of these warrants was determined using the Black-Scholes option
pricing model and was 0.002p per option. The inputs to the model
were as follows:
2016
Grant date share price 3.3p
Exercise share price 4.25p
No. of share options 43,239,926
Risk free rate 0.4%
Expected volatility 40%
Expected option life 1 year
Calculated fair value per share 0.002p
The total share-based payment expense recognised in the income
statement in relation to these warrants was GBP86,479.
7. RELATED PARTY TRANSACTIONS
There were no related party transactions during the year
8. POST BALANCE SHEET EVENTS
During the period 1 January 2017 to 28 February 2017 12,453,574
warrants were exercised for a total of 12,453,574 ordinary shares
for a cash consideration in aggregate of GBP201,891.
Other than the above, the Directors were not aware of any other
material events since the reporting date.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAXDDFLLXEFF
(END) Dow Jones Newswires
March 14, 2017 03:00 ET (07:00 GMT)
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