TIDMEVRH
RNS Number : 4945Y
EVR Holdings PLC
22 August 2018
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
For Immediate Release 22 August 2018
EVR Holdings plc
('EVR', the 'Group' or the 'Company')
Half-yearly Results
EVR Holdings (AIM: EVRH), the leading creator of virtual reality
music ('VR') content and operator of the MelodyVR platform, is
pleased to announce its Half-yearly Results for the six months
ended 30 June 2018.
Highlights
-- Major multi-year agreements with Warner/Chappell Music and Big Machine Label Group
-- Further six multi-year agreements with multiple publishers and record labels
-- The official launch of the MelodyVR music platform in the US, UK and 8 European territories.
-- First sales recorded of VR content, with encouraging initial data points.
-- Completion of a successful equity placing to raise GBP20 million (before costs).
-- As at 30 June 2018 the Group had cash and cash equivalents of
approximately GBP26.1 million for future expansion and
development.
-- Post period end, MelodyVR has entered exclusive multi-year
partnerships to deliver virtual access to selected live events
signed with major UK venues.
For further information please contact:
EVR Holdings plc
Anthony Matchett, Executive Chairman Tel: +44 (0) 203 289 7430
& CEO
Sebastian Theron, Chief Financial www.evrholdings.com
Officer
Tel: +44 (0) 207 597 5970
Investec Bank plc: Nominated Adviser,
Financial Adviser and Corporate
Broker
Corporate Finance: David Anderson
/ Junya Iwamoto
Corporate Broking: Sara Hale /
Helene Comitis
Chairman's Statement
Overview
I am pleased to be able to present our report on what has been
an important phase in the Group's development; one which culminated
in the successful launch of the MelodyVR platform in both the US
and in Europe, in conjunction with the release of Facebook's Oculus
Go VR device.
A further strengthening of our balance sheet following a
successful fundraise in May 2018, combined with the addition of
experienced individuals to the management team and positive
critical recognition of our MelodyVR platform, have helped to lay
stable foundations for future success.
Financial Results
With the launch of the MelodyVR platform occurring only a matter
of weeks prior to the end of this reporting period, in tandem with
the launch with the world's first commercially viable standalone VR
device, Facebook's Oculus Go, revenue during the period has been
influenced by the initially limited distribution and accessibility
of Facebook's VR Headset. Whilst the MelodyVR platform has been
available for only a limited period, I am pleased to report that
our early metrics regarding user engagement and conversion rates
are extremely encouraging and remain on track with management
expectations; with over 72% of MelodyVR's install base, now having
utilised the platform to consume our content.
Gross profit at a loss of GBP0.2 million has been calculated
after the deduction of content creation costs as well as amounts
due to all rights holders. These amounts include commissions and
revenue share arrangements due to app stores, record labels,
artists, publishers, songwriters and exclusive event/venue
partners.
Adjusted operating loss before non-cash and recurring items was
GBP3.8 million (H1 2017: GBP1.8 million), and is stated after the
costs associated with significant original content creation,
expansion of internal resources, development/operation and launch
of the MelodyVR platform as well as the associated costs leading up
to the successful launch of MelodyVR.
Operations
Our principle focus for the period under review concentrated our
operational activities on the release of the Melody VR app, which
officially launched in the US and UK on 1 May 2018 and in a further
8 countries throughout Europe on the 26 June 2018. The release
followed a period of significant engineering and R&D, which
included the development of unique proprietary software, IP, tools
and workflows. Each have enabled MelodyVR to maintain a market
leading advantage in both content delivery, user experience and
platform architecture. In addition, our Company has continued to
create engaging exclusive VR music content with the world's most
recognisable artists, in partnership with the world's major music
companies, which further cemented our commitment to building the
next medium for global music consumption. Following the launch of
the MelodyVR platform and a limited subset of our content, we have
been re-assured by the platform's stability and scalability, as
well as by user engagement, usage and adoption from those customers
currently able to access the platform via the Oculus storefront, in
Europe and the US.
Our innovation within the marketplace has been equally well
received by major news outlets and press, including features in GQ,
Billboard, VICE, The Daily Telegraph, The Financial Times, Wired,
CrunchBase, Sky News, Fox News and BBC News, amongst others. As we
move through the initial stages of commercialisation of our
service, we seek to broaden the reach and breadth of our platform
as currently, we are largely dependent upon VR hardware
manufacturers such as Oculus, and the proliferation and adoption of
their VR devices as the principal conduit for access to our
service. We will continue to extend the reach of our MelodyVR
platform across new territories and via new channels, as well as
via a broader range of VR hardware.
Analysing the post launch metrics available to us at the time of
writing this report, we are encouraged by the number of consumers
who, having purchased a VR headset device, have installed the
MelodyVR app, also of those who having downloaded the app, have
utilised MelodyVR content. Whilst it is too early to draw any
meaningful conclusions from the data reconciled over the two month
period following launch, we are encouraged by the engagement and
conversion metrics experienced to date when measured against both
our own expectations and when benchmarked against other leading
music and technology products. In addition, having launched
successfully with a limited subset of our exclusive original
content, as the VR market develops over the coming months we intend
to widen the depth of available content, adding further experiences
from our vast library of VR experiences.
As part of a series of new and innovative initiatives, MelodyVR
will introduce live-streamed VR content which will enable music
fans the opportunity to experience live real-time performances from
internationally recognised artists direct from sold-out concerts
and venues. We intend to launch this new functionality with a
showcase offering, featuring a live performance of a globally
recognised artist in partnership with an equally prominent global
media channel. Users will be able to experience live VR content via
the MelodyVR platform, by purchasing a virtual ticket. Given the
partnerships already in place with the key stakeholders in the
music industry, fans will subsequently be able to re-live these
experiences at a later date, as part of our ever-broadening library
of original content.
Our exclusive partnership agreements which provide access,
capture and live stream arrangements with numerous partners,
including recent additions such as the NEC Group and Alexandra
Palace, join over 70 individual festival and event brands, which
will soon provide users with the opportunity to access a rich
calendar of live performances and events, which feature many of the
major recording artists from around the world. Artists billed to
perform at our partners events and venues over the coming 12 months
include the vast majority of the world's current top 50
artists.
These initiatives, in combination with the introduction of
platform advertising and sponsorship will further broaden
MelodyVR's monetisation model, increase revenue generation
capabilities and further stimulate growth of the service.
Ansco Arena Limited
In addition, we are pleased to today announce that MelodyVR has
also entered into an agreement with Ansco Arena Limited, operator
of the O2 arena London. Our companies will share revenue from
live-streamed and recorded VR content, made available via the
MelodyVR platform.
Funding
On 1 May 2018, the Company announced that it had successfully
raised a further GBP20m of additional funds (before costs) via the
issue of 125 million new ordinary shares at a placing price of 16p
per share further strengthening the balance sheet. The net proceeds
of the fundraise are being used to further expand the Group,
including on a global basis. The placing also presented the
opportunity to welcome new institutions to the register of
shareholders. As at the balance sheet date of 30 June 2018 cash
reserves totalled GBP26 million which at the current anticipated
rate of burn will provide the Group with in excess of 24 months of
funding.
Outlook
Our primary focus during the next twelve months is to drive
awareness of the MelodyVR platform, in turn developing our user
base in order to further monetise our recorded, live and
interactive original VR content. With the development and
successful launch of a robust and proven technology platform behind
us, backed by global licensing agreements with all of the major
record labels and exclusive rights of capture at a significant
number of the leading music venues and festivals from around the
world, our Company has never been better positioned for on-going
success.
Operationally, we will continue to expand on a global basis,
whilst managing our costs prudently. Over the coming months we look
forward to the benefit of receiving additional user data from our
platform, which will enable our team to secure greater insight into
consumer behaviour and engagement with the MelodyVR platform. As
with any mass-market consumer technology, data and analytics not
only provide significant opportunity to improve our product itself
but also provide significant data points relating to key metrics
such as user engagement, retention and conversion. It is our
intention to maximise the performance of these metrics over the
coming year, enhancing the lifetime value of our customers and
increasing revenues from our MelodyVR platform.
The consumer reaction to the launch of the Oculus Go headset has
been very positive, yet we are keen to accelerate the growth of
MelodyVR's user base beyond the reach of the 324 million VR devices
the market forecasts by the end of 2021. In order for the rate of
MelodyVR user acquisition to surpass the expectation of VR hardware
sales and adoption, we intend to extend the accessibility of our
services to Android and iOS device users worldwide, which are
currently in excess of 3 billion. With this in mind, we are
currently evaluating a number of initiatives which will enable
users to access content with their smartphone devices. I look
forward to providing further updates on this, as well as our other
initiatives, in due course.
The introduction of live stream events, launches of new VR
hardware devices and platform sponsorship will accelerate the
awareness and accessibility of MelodyVR to millions of more users
worldwide over the next year. We intend to further capitalise on
this by launching in numerous additional territories, including
Canada and the AsiaPac region, where many countries are displaying
signs of rapid VR adoption.
These developments provide us with great opportunities in the
near term as we move in to the next phase of our Company's
development and growth. A strong balance sheet and validation from
the music industry and technology sectors, provide us with not only
great confidence in being able to successfully execute on this
exciting opportunity, but also in realising our goal of building
the world's next major global music service.
Anthony Matchett
Chairman & CEO
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR EVR
HOLDINGS PLC
for the six months ended 30th June 2018
Unaudited Unaudited Audited
Six months Six months Year to
to to
30th June 30th June 2017 31st December
2018 2017
Notes GBP GBP GBP
Revenue 6,831 - -
Cost of Sales (225,028) - -
Gross Profit (218,197) - -
Administrative expenses (4,183,675) (2,626,042) (6,192,145)
_______ ________ _______
OPERATING LOSS (4,401,872) (2,626,042) (6,192,145)
---------------------------------------------------------------------------------------- ------------------- ------------------- -------------------
Operating loss before non-recurring
and non-cash items (3,899,947) (1,866,788) (5,168,043)
Depreciation and Amortisation (221,872) (61,659) (141,607)
Share based payments (280,053) (697,595) (882,495)
------------------ ------------------ ------------------
OPERATING LOSS (4,401,872) (2,626,042) (6,192,145)
---------------------------------------------------------------------------------------- ------------------- ------------------- -------------------
Finance income 2,182 2,988
Finance costs (12,121) - (6,348)
Foreign exchange gain 27,725 (36,377)
_____ _____
LOSS FOR THE PERIOD BEFORE TAXATION (4,386,268) (2,623,860) (6,231,822)
Taxation - - -
_____ _____ _____
NET LOSS AND TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD (4,386,268) (2,623,860) (6,231,882)
Attributable to:
Owners of the parent company (4,386,268) (2,623,860) (6,231,882)
Non - controlling interest - - -
_____ _____ _____
Loss per share
Basic and Diluted from Continuing
Operations 5 (0.37)p (0.12)p (0.61)p
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR EVR
HOLDINGS PLC
for the six months ended 30th June 2018
(unaudited)
Share Merger Share Reverse Non- Currency
Share Premium Relief Option Retained Takeover Controlling Translation
Capital Reserve Reserve Reserve Losses Reserve Interest Reserve Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 30th June 2017 10,824,508 10,035,478 486,611 1,142,572 (5,394,832) (10,002,543) (46,003) - 7,045,791
Total comprehensive loss for
the period - - - - (3,608,022) - - - (3,608,022)
Grant of share options 184,900 184,900
Issue of new shares 1,359,883 8,273,376 - - - - - - 9.633,259
Currency Translation Reserve 10,194 10.194
______ ______ _____ _____ _____ _____ _____ _____ _______
Balance at 31st 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
Shares issued in year 1,338,438 17,843,829 - - - - - - 19,182,267
Grant of share options 280,053 - 280,053
Net loss for the period - - - - (4,386,268) - - -
Currency translation reserve - - - - - - - (26,975) (4,386,268) (26,975)
_____ _______ ______ _____ _______ _______ _____ _____ _______
Balance at 30th June 2018 13,522,829 36,152,683 486,611 1,607,525 (13,389,122) (10,002,543) (46,003) (16,781) 28,315,199
CONSOLIDATED STATEMENT OF FINANCIAL POSISITON FOR EVR HOLDINGS
PLC
as at 30th June 2018
Unaudited Unaudited Audited
as at as at as at
30th June 30th June 31st December
2018 2017 2017
Notes GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1,045,244 322,938 638,429
Intangible assets 6 1,754,077 603,476 603,476
_____ _____ _____
TOTAL NON-CURRENT ASSETS 2,799,321 926,414 1,241,905
_____ _____ _____
CURRENT ASSETS
Trade and other receivables 506,422 181,780 227,748
Cash and cash equivalents 26,089,548 6,554,556 12,409,820
_____ _____ _____
TOTAL CURRENT ASSETS 26,595,970 6,736,336 12,637,568
______ ______ _____
TOTAL ASSETS 29,395,291 7,662,750 13,879,473
______ ______ ______
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (1,080,092) (616,959) (613,351)
______ ______ ______
TOTAL CURRENT LIABILITIES (1,080,092) (616,959) (613,351)
______ ______ _____
TOTAL LIABILITIES (1,080,092) (616,959) (613,351)
______ ______ _____
TOTAL NET ASSETS 28,315,199 7,045,791 13,266,122
______ ______ _____
EQUITY
Share capital 8 13,522,829 10,824,508 12,184,391
Share premium reserve 36,152,683 10,035,478 18,308,854
Retained losses (13,389,122) (5,394,832) (9,002,854)
Share Option Reserve 1,607,525 1,142,572 1,327,472
Merger Relief Reserve 486,611 486,611 486,611
Non-controlling interests (46,003) (46,003) (46,003)
Currency Translation Reserve (16,781) - 10,194
Reverse takeover reserve (10,002,543) (10,002,543) (10,002,543)
_______ _______ _______
TOTAL EQUITY 28,315,199 7,045,791 13,266,122
_____ _____ _____
CONSOLIDATED CASH FLOW STATEMENT FOR EVR HOLDINGS PLC
for the six months ended 30th June 2018
Unaudited Unaudited Audited
Six months Six months Year to
to to
30th June 30th June 31st December
2018 2017 2017
GBP GBP GBP
Loss from continuing operations (4,386,268) (2,623,860) (6,231,882)
Adjustments for:
Amortisation of intangible assets 56,216 141,607
Depreciation of fixed assets 165,656 61,659 882,495
Share based payment expense 280,053 697,595 (241,392)
Increase/(decrease) in trade
and other receivables (278,181) (79,922) 508,120
Increase in trade and other payables 428,667 395,419 _____
_____ _____ ______
Net cash outflow from operating
activities (3,733,857) (1,549,109) (4,941,052)
______ ______ _______
Investing activities
Purchase of property, plant and
equipment (1,778,301) (154,863) (550,278)
Acquisition of subsidiary - - -
_____ _____ _____
Net cash generated from/(used
in) investing activities (1,778,301) (154,863) (550,278)
Financing activities
Proceeds from issue of ordinary
share capital 19,053,561 4,888,835 14,174,918
Proceeds from the exercise of
warrants 128,706 - 347,176
_____ _____ _____
Net cash generated from financing
activities 19,182,267 4,888,835 14,522,094
_____ _____ _____
Increase in cash and cash equivalents 13,670,109 3,184,863 9,030,764
Effect of changes in foreign
exchange 9,619 - 9,363
Cash and cash equivalents brought
forward 12,409,820 3,369,693 3,369,693
__ _____
Cash and cash equivalents carried
forward 26,089,548 6,554,556 12,409,820
_____ _____ _____
NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR EVR HOLDINGS
PLC
for the six months ended 30th June 2018
1. Basis of preparation of interim financial information
The consolidated interim financial statements have been prepared
in accordance with the recognition and measurement principles of
International Financial Reporting Standards as endorsed by the
European Union ("IFRS") and expected to be effective at the
year-end of 31 December 2017.
New accounting policies adopted during the year are detailed in
Notes 3 and 4 while all other accounting policies remain unchanged
from the financial statements for the year ended 31 December
2017.
The interim financial statements are unaudited and do not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31
December 2017, prepared in accordance with IFRS, have been filed
with the Registrar of Companies. The Auditors' Report on these
accounts was unqualified, did not include any matters to which the
Auditors drew attention by way of emphasis without qualifying their
report and did not contain any statements under section 498 of the
Companies Act 2006.
The consolidated interim financial statements are for the 6
months to 30 June 2018.
The interim consolidated financial information do not include
all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the
group's annual financial statements for the year ended 31 December
2017, which were prepared in accordance with IFRS's as adopted by
the European Union.
Going Concern
The directors have prepared detailed cash flow forecasts and are
of the opinion that it is appropriate to prepare these financial
statements on a going concern basis. In making this assessment
management has considered:
a) The current working capital position and operational requirements
b) The sensitivities associated with projected expenditure
c) The timing and magnitude of planned capital expenditure
d) The strategic exploitation of the company's significant resources
e) The timing of launch within new territories and on new Virtual Reality (VR) platforms
The conclusion of this assessment and having regard to the
existing working capital position the Directors are of the opinion
that the Group will have adequate resources to enable it to
undertake its planned activities for the next twelve months.
2. Accounting Policies
Standards and amendments and interpretations to published
standards not yet effective.
Certain new standards, amendments and interpretations to
existing standards have been published that are mandatory for the
group's accounting period beginning on or after 1 July 2017 or
later periods and which the group has decided not to adopt early
are:
-- Amendments to IFRS 2 Share Based Payment (effective for
accounting periods beginning on or after 1 January 2018)
-- IFRS 15 Clarification of Revenue from Contracts with
Customers (effective for accounting periods beginning on or after 1
January 2018)
-- IFRS 16 Leases (effective for accounting periods beginning on
or after 1 January 2019)
3. Revenue
Revenue represents amounts receivable for goods and services
provided in the normal course of business, and excludes intra-group
sales, Value Added Tax and trade discounts.
Revenue comprises of the sale of content with the value of goods
and services supplied being recognised on delivery of content.
Management considers the detailed criteria for the recognition
of revenue from the sale of goods and services set out in IAS 18
Revenue, in particular whether the Group had transferred to the
buyer the significant risks and rewards of ownership of the
goods.
4. Capitalisation of Development and Content creation costs
The Group recognises both internal development costs as well as
VR content creation costs as intangible assets only when the
following criteria are met: the technical feasibility of completing
the intangible asset exists, there is an intent to complete and an
ability to use or sell the intangible asset, the intangible asset
will generate probable future economic benefits, there are adequate
resources available to complete the development and to use or sell
the intangible asset, and there is the ability to reliably measure
the expenditure attributable to the intangible asset during its
development.
Intangible assets with finite lives are amortised on a
straight-line basis over their estimated useful lives and are
assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset are reviewed at least
annually. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the
asset is accounted for by changing the amortisation period or
method, as appropriate, and are treated as changes in accounting
estimates. The amortisation of intangible assets is recognised in
the consolidated statement of comprehensive income/costs in the
expense category consistent with the function of the intangible
assets.
Amortisation rates applicable to internal development is
typically between 2 and 5 years and;
Amortisation rates applicable to VR content is as follows:
-- Year 1: 80%
-- Year 2: 15%
-- Year 3: 5%
5. Loss per share
Loss attributable Unaudited Unaudited Audited
to equity holders 30th June 2018 30th June 2017 Year to
of the Company: 31st December
GBP GBP 2017
GBP
Continuing
and total operations (4,386,268) (1,161,954) (6,231,882)
No. of shares No. of shares No. of shares
Weighted average
number of ordinary
shares in issue
for basic and
fully 1,199,050,729 966,583,028 1,022,052,742
diluted earnings
Pence per Pence per Pence per
Share share share
Loss per share (0.37)p (0.12)p (0.61)p
Basic and diluted: (0.37)p (0.12)p (0.61)p
6. Intangible assets
Cost Development Goodwill Content Content
costs Assets Assets
- in production - released
As at 30 June - 603,476 - -
2017
Additions - - - -
_______ _______ _______ _______
As at 31 December - 603,476 - -
2017
Additions 667,819 - 317,511 221,487
_______ _______ _______ _______
As at 30 June
2018 667,819 603,476 317,511 221,487
Amortisation
As at 30 June - - - -
2017
_______ _______ _______ _______
As at 31 December - - - -
2017
_______ _______ _______ _______
As at 30 June
2018 36,612 - - 19,604
_______ _______ _______ _______
Net Book Value
As at 30 June - 603,476 - -
2017
_______ _______ _______ _______
As at 31 December - 603,476 - -
2017
_______ _______ _______ _______
As at 30 June
2018 631,207 603,476 317,511 201,883
_______ _______ _______ _______
Goodwill has been calculated as the fair value of the EVR
Holdings plc ordinary shares pre reverse takeover less the net
asset value of the Company at the time of take over.
7. Share options and Directors 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.
On 12(th) March 2018 the Company granted options under the
Company's Option Scheme to purchase ordinary shares of 1p each of
EVR ("Ordinary Shares") over 8,311,724 Ordinary Shares to
employees. The exercise prices of the options granted range between
GBP0.0625 and GBP0.09. These options have an expiry date of the
10th anniversary of the date of grant (subject to vesting
conditions).
The pertinent information with respect of these options is as
follows:
Issue Grant Exercise Number of Risk Expected Expected option Calculated fair Total expense
date date price options free volatility life value per share recognised in period
share rate
price
GBP GBP
12
March
2018 9p 8.13p 6,661,724 0.50% 40% 10 years 4.6p 70,916
12
March
2018 6.75p 8.13p 500,000 0.50% 40% 10 years 3.0p 4,337
12
March
2018 6.5p 8.13p 500,000 0.50% 40% 10 years 2.8p 2,987
8. Share Capital
30 June 2018 30 June
(unaudited) 2017 (unaudited)
Number Number
Ordinary shares of 1.1 pence each 486,611,833
Ordinary shares of 1.16 pence each 495,095,455 231,750,344
Ordinary shares of 1.4 pence each 231,750,344 25,639,198
Ordinary shares of 1.7 pence each 26,264,198 205,232,810
Ordinary shares of 1.85 pence each 205,232,810 9,891,661
Ordinary shares of 8 pence each 11,771,458 187,500,000 62,500,000
Ordinary shares of 16 pence each 125,000,000 -
Deferred shares of 0.24p each 150,520,616 150,520,616
Deferred shares of 0.95p each 26,000,000 26,000,000
------------------------ ------------------
Total 1,459,134,881 1,198,146,462
======================== ==================
Further copies of this document are available both at the
registered office of the Company. The statement will also be
available to download on the Company's website at
http://evrholdings.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FKDDQDBKBQFB
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