TIDMEVRH
RNS Number : 6475M
EVR Holdings PLC
30 April 2018
For immediate release
30 April 2018
EVR Holdings plc
('EVR' or the 'Company')
AUDITED FINAL RESULTS FOR THE YEARED 31 DECEMBER 2017
EVR Holdings plc (AIM: EVRH), a leading creator of music virtual
reality ('VR') content, announces its results for the year ended 31
December 2017.
Operational Highlights
-- Partnership with Universal Music Group and completion of a VR
content creation and distribution agreement in March 2017;
-- Global marketing and Windows mixed reality collaboration
partnership agreement with Microsoft Corporation in June 2017;
-- Partnership with Sony Music Entertainment and completion of a
VR content creation and distribution agreement in July 2017;
-- Arrangements with numerous European music publishers,
collection societies and performance rights organizations;
-- Partnership with Roc Nation LLC and completion of a VR
content creation and distribution agreement together and a
publishing agreement with Rock Nation Publishing LLC in October
2017;
-- Management supplemented by exceptionally talented individuals
from top tier technology and music companies.
Chairman's Statement
Introduction
I am pleased to present my first report as Executive-Chairman of
EVR Holdings plc ("the Company") for the year ended 31 December
2017, a period in which the group made significant progress across
all facets of its business. In combination with further operational
improvements our MelodyVR business continued to secure positive
critical recognition and endorsement, which in combination with a
strengthening of its balance sheet have laid the foundations for
the successful launch the MelodyVR platform in the near future.
Financial Review
Having secured global licencing and distribution agreements with
all three of the world's largest record labels; Warner Music Group,
Universal Music Group and Sony Computer Entertainment, in
conjunction with further rights holder agreements with publishers
and collection societies, MelodyVR is well-poised to monetise its
content across multiple territories. Our principal operational
focus for the period under review has been to further refine and
hone its technology platform in preparation for the forthcoming
launch of the MelodyVR product. In order to broaden and strengthen
its management and resource base, we have sought to recruit
experienced talent in both in the UK and the US from respected
organisations such as Universal Music Group, Spotify, Sony Computer
Entertainment and Microsoft Corporation, with staff numbers
(including contractors) as at 31 March 2018 totalling 64
worldwide.
We have been cautious to ensure that the timing of the launch of
the Melody VR platform coincides with sufficient VR headset
adoption, in order to ensure a broad level of accessibility to our
original music content. Our platform development has been the
subject of rigorous testing with high levels of user research
conducted during the software's nascency, in order to craft a
polished user experience that adequately showcases the premium VR
content that we have created over the course of the last 4 years.
Improvements and additions to the platform will continue
post-launch and into the foreseeable future, as our user base
becomes more established, with ongoing R&D taking place to
broaden both platform functionality and appeal. We believe that we
have laid the foundations required to launch a scalable technology
platform, created to satisfy consumer demand for what we believe
will be a new, exciting and compelling form of digital music
consumption.
The results for the year ended reflect these key initiatives
outlined above together with the continued expansion of our music
library with some of the world's most high profile artists.
Operating loss before non-recurring and non-cash items totalled
GBP5.168m (2016: Loss GBP1.64m). After non-recurring and non-cash
items, net financing charges and taxation, the Group reported a
loss of GBP6.23m (2016: GBP2.64m). At the balance sheet date the
Group had cash reserves of GBP12.41m (2016: GBP3.34m) reflecting
the successful fundraising initiatives completed during the
year.
Fundraises
On 7 June 2017, the Company announced the successful placing of
62,500,000 new ordinary shares of 1p each generating GBP5.0 million
of additional funds. In addition, on 25 October 2017 the Company
issued a further 125,000,000 new ordinary shares of 1p each
generating GBP10m before expenses. These funds are being used to
further expand the content library and enhance the MelodyVR music
platform prior to its imminent launch. The fundraisings also
presented the opportunity to welcome new institutions, from both
the United Kingdom and the United States, to the register of
shareholders.
Outlook
Despite the increasing investment in R&D and the heightened
marketing spend as we build towards launch, we continue to manage
our costs prudently in line with both our working capital and
growth aspirations post launch. The support from our technology
partners has consistently endorsed the MelodyVR product and
supports our continuing confidence of the opportunity for
monetizing our significant library of original music content. Your
Board is encouraged with its trading in the period to date, and is
confident of a successful product launch for MelodyVR and of the
exciting future of its music platform.
Anthony Matchett
Executive Chairman
For more information please contact
EVR Holdings plc
Anthony Matchett, Executive Chairman and CEO Tel: +44 (0) 203
289 7430
Sebastian Theron, Chief Financial Officer
email@evrholdings.com
Investec Bank plc: Nominated Advisor, Financial Advisor and Tel:
+44 (0) 207 597 5970
Corporate Broker
Corporate Finance: David Anderson / Junya Iwamoto
Corporate Broking: Sara Hale / Rob Baker
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.
PRIMARY FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2017
2017 2016
GBP GBP
Continuing operations:
Administrative expenses (6,192,145) (2,630,922)
------------------ ------------------
OPERATING LOSS (6,192,145) (2,630,922)
(5,168,043)
Operating loss before non-recurring (1,640,175)
and non-cash items (141,607) (53,631)
Depreciation - (492,139)
Readmission costs (882,495) (444,977)
Share based payments ------------------ ------------------
OPERATING LOSS (6,192,145) (2,630,922)
------------------------------------------- -------------------- --------------------
Finance income 2,988 2,212
Finance costs (6,348) (7,847)
Foreign exchange gain (36,377) -
------------------ ------------------
LOSS FOR THE YEAR BEFORE
TAXATION (6,231,882) (2,636,557)
Taxation - -
------------------ ------------------
NET LOSS AND TOTAL COMPREHENSIVE
INCOME
FOR THE YEAR (6,231,882) (2,636,557)
Attributable to:
Owners of the parent company
Non - controlling interest (6,231,882) (2,584,414)
- (52,143)
------------------ ------------------
LOSS PER SHARE - basic and
diluted from continuing
operations (0.61)p (0.044)p
======== ========
Consolidated Statement of Financial Position
As at 31 December 2017
2017 2016
GBP GBP
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 638,429 229,732
Intangible assets 603,476 603,476
------------------ ------------------
TOTAL NON-CURRENT ASSETS 1,241,905 833,208
------------------ ------------------
CURRENT ASSETS
Trade and other receivables 227,748 112,602
Cash and cash equivalents 12,409,820 3,369,693
--------------------- ---------------------
TOTAL CURRENT ASSETS 12,637,568 3,482,295
------------------ ------------------
TOTAL ASSETS 13,879,473 4,315,503
======== ========
CURRENT LIABILITIES
Trade and other payables (613,351) (232,283)
------------------ ------------------
NET ASSETS/(LIABILITIES) 13,266,122 4,083,220
======== ========
EQUITY
Share capital 12,184,391 10,067,861
Share premium reserve 18,308,854 5,903,289
Retained Earnings (9,002,854) (2,770,972)
Share option reserve 1,327,472 444,977
Merger relief reserve 486,611 486,611
Non-controlling interests (46,003) (46,003)
Currency Translation Reserve 10,194 -
Reverse takeover reserve (10,002,543) (10,002,543)
------------------ ------------------
TOTAL EQUITY 13,266,122 4,083,220
========= ==========
Consolidated Statement of Changes in Equity
For the year ended 31 December 2017
Share Share Merger Share Retained Reverse Non-Controlling Currency Total
capital premium Relief Option Losses Takeover Interest Translation Equity
Reserve Reserve Reserve Reserve
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance
at 1
January
2016 9,500 148,500 - - (186,558) - - - (28,558)
Warrants
and
option
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
Losses
for
the
year - - - - (2,584,414) - (52,143) - (2,636,557)
Balance
at 31
December
2016 10,067,861 5,903,289 486,611 444,977 (2,770,972) (10,002,543) (46,003) - 4,083,220
------------------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------
Share
issue 2,116,530 12,405,565 - - - - - - 14,522,095
Grant
of share
options/warrants - - - 882,495 - - - - 882,495
Loss
for
the
year
and
total
comprehensive
loss
for
the
year - - - - (6,231,882) - - - (6,231,882)
Currency
transaction
reserve - - - - - - - 10,194 10,194
Balance
at 31
December
2017 12,184,391 18,308,854 486,611 1,327,472 (9,002,854) (10,002,543) (46,003) 10,194 13,266,122
========================= ========================= ========================= ========================= ========================= ========================= ========================= ========================= ========================
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES GBP GBP
Loss from continuing operations (6,231,882) (2,636,557)
Adjustments for:
Depreciation of fixed assets 141,607 53,631
Share based payment expense 882,495 444,977
Increase/(decrease) in trade and other
receivables (241,392) 112,575
Increase in trade and other payables 508,120 475,576
_____ _____
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (4,941,052) (1,549,798)
_______ _______
Investing activities
Purchase of property, plant and equipment (550,278) (243,469)
Acquisition of subsidiary - 1,401,905
_____ _____
NET CASH INFLOW FROM INVESTING ACTIVITIES (550,278) 1,158,436
Financing activities
Proceeds from issue of ordinary share
capital 14,174,918 3,328,988
Proceeds from the exercise of warrants 347,176 418,952
Loans from directors - -
_____ _____
NET CASH GENERATED FROM FINANCING
ACTIVITIES 14,522,094 3,747,940
_____ _____
Increase in cash and cash equivalents 9,030,764 3,356,578
Effect of changes in foreign exchange
rates 9,363 -
Cash and cash equivalents brought
forward 3,369,693 13,115
_____ _____
CASH AND CASH EQUIVALENTS CARRIED
FORWARD 12,409,820 3,369,693
_____ _____
ABRIDGED NOTES TO THE PRIMARY FINANCIAL STATEMENTS
For the 12 months ended 31 December 2017
The financial statements of the Group for the 12 months ended 31
December 2017 and 2016 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 2017
or 2016 as defined by section 435 of the Companies Act 2006 but is
derived from those accounts. Statutory accounts for 2016 have been
delivered to the Registrar of Companies, and those for 2017 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 2017. In the prior year, the Company
completed the acquisition of 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.
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date on which control
commences until the date on which control ceases. Consolidated
within these financial statements are results from subsidiaries:
MelodyVR Ltd (100% ownership), MelodyVR inc (100% ownership) and
Immersive Construction Ltd (51% ownership).
Going Concern
The Financial Statements have been prepared on the going concern
basis. The Directors have prepared cash flow forecasts through to
30 June 2019, covering the 12 month period beyond the signing date
of these financial statements. These forecasts take into account
the intended launch timetable within the year ending December 2018,
as well as projecting potential revenue profiles based on hardware
adoption estimates. As there are sufficient existing resources to
operate for the foreseeable future the Board has concluded that the
going concern assumption is appropriate in preparing these
financial statements.
1. LOSS FROM OPERATIONS
This has been arrived at after charging: 2017 2016
Group Company Group Company
GBP GBP GBP GBP
Depreciation of property, plant and equipment 141,607 - 53,631 -
========= ========= ========= =========
2. AUDITORS REMUNERATION
2017 2016
Group Company Group Company
GBP GBP GBP GBP
During the year the Company obtained the following
service from the Company's auditors:
Fees payable to the
Company's auditors
for the audit of the
Company's
annual accounts 29,800 13,500 28,250 13,000
Fees payable to the
Company's auditors
for other services:
Tax services 3,582 3,582 4,000 4,000
Other services 5,820 5,820 55,000 55,000
------------------- ------------------- ------------------- -------------------
39,202 22,902 87,250 72,000
========= ========= ========= =========
3. DIRECTORS' AND EMPLOYEE REMUNERATION
2017 2016
Group Company Group Company
The amount paid to GBP GBP GBP GBP
directors and employees,
is as follows:
Short-term employee
benefits 2,080,020 559,974 691,302 268,124
Share based payment
costs 277,136 63,686 358,497 31,009
------------------- ------------------- ------------------- -------------------
2,357,156 623,660 1,049,799 299,133
========= ========= ========= =========
2017 2016
Group Company Group Company
The average number of No. No. No. No.
employees for the year
was as follows:
Directors 6 6 4 2
Senior Management 1 - 1 1
Staff 23 - 9 -
------------------- ------------------- ------------------- -------------------
30 6 14 3
========= ========= ========= =========
Details for directors' remuneration is as follows:
Total Total
Fees 2017 2016
Director GBP GBP GBP
Sean Nicolson 25,000 25,000 25,000
Peter Read 8,333 8,333 25,000
Anthony Matchett 165,077 165,077 75,000
Steven Hancock 153,846 153,846 75,000
Simon Cole 25,000 25,000 15,624
Sebastian Theron 136,179 136,179 -
Ian Hanson 16,955 16,955 -
------------------- ------------------- -------------------
530,390 530,390 215,624
4. 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 2017 assumes that all shares have been
included in the computation based on the weighted average number of
days since issue.
2017 2016
Group Group
GBP GBP
Loss attributable to equity holders
of the Company:
Continuing and total operations (6,231,882) (2,584,414)
------------------- -------------------
No. of No. of
shares shares
Weighted average number of ordinary
shares in issue for basic and fully
diluted earnings 1,022,052,742 588,269,184
----------------------- -----------------------
Pence Pence
per per
Share Share
Loss per share
Basic and diluted:
Continuing and total operations (0.61)p (0.44)p
========== ==========
5. 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 volatility input used in the Black Scholes pricing model is
based on expected volatility of the relevant share price over the
length of the option. In determining the correct volatility input
into the Black Scholes model, the directors have used their own
judgment, whilst also taking into account the expectations of the
market, regarding the current and future circumstances in the VR
market generally, and the particular circumstances of the Company
internally.
The following table sets out the details of these options
granted:
Warrants Warrants Warrants
in parent issued at
at in the
31-Dec year 31-Dec Exercise Issue Expiry
Option 2016 2017 price date date
holder
Simon Cole 4,615,090 - 4,615,090 1.1p 16.05.201 17.05.2019
6
Anthony
Matchett 11,537,725 - 11,537,725 1.1p 16.05.2016 17.05.2019
Steven
Hancock 11,684,713 - 11,684,713 1.1p 16.05.2016 17.05.2019
Sebastian
Theron 3,640,830 - 3,640,830 1.1p 13.10.2016 13.10.2019
- 1,023,279 1,023,279 8.125p 17.07.2017 17.07.2020
Ian Hanson - 4,615,090 4,615,090 8.125p 17.07.2017 17.07.2020
--------------------- --------------------- ---------------------
31,478,358 5,638,369 37,116,727
================ ========== ==========
No warrants issued to directors have lapsed 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
2017 expire on the tenth anniversary from the grant date and are
subject to vesting criteria.
SHARE OPTIONS AND DIRECTOR 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 Group's
estimate of shares that will eventually vest and adjusted for the
effect of non-market based vesting conditions.
DIRECTOR WARRANTS AND OPTIONS
On 13 October 2016 the Group issued 3,640,830 options to
Sebastian Theron (appointed as Director: 26 April 2017). The fair
value of these options was determined using the Black-Scholes
option pricing model and was 0.259p per option.
On 17 July 2017 the Group issued 1,023,279 and 4,615,090 options
respectively to Sebastian Theron and Ian Hanson (appointed as
Director: 26 April 2017). The fair value of these options was
determined using the Black-Scholes option pricing model and was
4.5p per option.
The significant inputs to the model in respect of the options
and warrants granted were as follows:
2017 2016
Grant date share price 7.8p 1.1p
Exercise share price 8.125p 1.1p
No. of share options 5,638,369 59,777,856
Risk free rate 0.5% 0.5%
Expected volatility 40% 40%
Expected option life 3 years 3 years
Calculated fair value per share 0.38p 0.4p
The total share-based payment expense recognised in the income
statement for the year ended 31 December 2017 in respect of
warrants granted was GBP32,677 (2016: 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 per
share of 8.125p. The market value per share at the date of grant
was 9.15p.
EMPLOYEE OPTIONS
During the year ended 31 December 2017, the Group issued a total
of 10,018,362 share options to employees under the approved
enterprise incentive share option scheme, subject to vesting
conditions. The fair value of these options was determined using
the Black-Scholes pricing model. The options, and all significant
inputs to the model in respect of the options granted as summarised
below:
Issue Grant Exercise Number Risk Expected Expected Calculated Total expense
date date price of options free volatility option fair recognised
share rate life value in Comprehensive
price per share Income during
the year
GBP GBP GBP
2nd
February
2017 10.13p 10.25p 1,300,000 0.50% 40% 10 years 4.9p 17,085
2nd
February
2017 10.13p 3.3p 1,350,000 0.50% 40% 10 years 7.6p 31,108
2nd
February
2017 10.13p 9.63p 1,250,000 0.50% 40% 3 years 3.0p 37,500
17th
July
2017 7.88p 8.13p 4,118,362 0.50% 40% 10 years 4.0p 55,698
17th
July
2017 7.88p 8.13p 2,000,000 0.50% 40% 10 years 3.8p 11,591
In the year ended 31 December 2017, options issued by the Group
to employees under the approved enterprise management incentive
share option scheme for which the vesting criteria were no longer
satisfied, causing the options to lapse totalled 2,125,496 options.
The total share-based payment release recognised in the income
statement for the year ended 31 December 2017 in respect of lapsed
options issued in the year ended 31 December 2016, was
GBP13,954.
WARRANTS ISSUED TO COMMERCIAL PARTNERS
On 20 March 2017 the Group issued 43,239,926 options to
Universal Music Group. These warrants may be exercised at any time
on or before 20 March 2022 and entitle the warrant holder to
subscribe 12.375p 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 1.3p per option. The inputs to the
model were as follows:
The significant inputs to the model in respect of the options
granted were as follows:
2017
Grant date share price 11.13p
Exercise share price 12.375p
No. of share options 43,239,926
Risk free rate 0.5%
Expected volatility 40%
Expected option life 1 year
Calculated fair value per share 1.3p
The total share-based payment expense recognised in the income
statement for the year ended 31 December 2017 in respect of these
options granted was GBP562,119.
On 17 July 2017 the Group issued 43,239,926 options to Sony
Music Entertainment. These warrants may be exercised at any time on
or before 17 July 2022 and entitle the warrant holder to subscribe
14.2p 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 0.1p per option.
The significant inputs to the model in respect of the options
granted were as follows:
2017
Grant date share price 7.88p
Exercise share price 14.2p
No. of share options 43,239,926
Risk free rate 0.5%
Expected volatility 40%
Expected option life 1 year
Calculated fair value per share 0.1p
The total share-based payment expense recognised in the income
statement for the year ended 31 December 2017 in respect of these
options granted was GBP43,240.
As at 31 December 2017, the number of warrants still in issue
and available to be exercised totalled 64,749,775, as detailed
below:
Number of warrants 2016 Exercised during the year Number of warrants 2017 Exercise Price Expiry Date
21,927,298 (6,958,173) 14,969,125 1.4p 31-Jul-18
27,472,224 (8,483,620) 18,988,604 1.1p 16-May-19
30,273,062 (8,711,196) 21,561,866 1.85p 16-Oct-19
9,230,180 - 9,230,180 1.2p 31-Jul-20
------------------- ------------------- -------------------
88,902,764 (24,152,989) 64,749,775
6. RELATED PARTY TRANSACTIONS
At the balance sheet date amounts owed from subsidiary
undertaking MelodyVR Ltd totalled GBP7,221,737 (2016:
GBP1,935,347). There were no other related party transactions
during the year to 31 December 2017.
7. POST BALANCE SHEET EVENTS
There have been no material events since the reporting date.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAKLEDDEPEFF
(END) Dow Jones Newswires
April 30, 2018 12:40 ET (16:40 GMT)
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