TIDMVRE
RNS Number : 0204Q
VR Education Holdings PLC
16 June 2020
For immediate release 16 June 2020
VR Education Holdings plc
('VR Education' or the 'Group')
Final Results
VR Education (AIM: VRE; ESM: 6VR), a leading virtual reality
('VR') technology company focused on the education and virtual
meeting space, today announces its audited final results for the
year ended 31 December 2019 ('FY 2019').
Financial Highlights
-- Revenue up 43% to EUR1.0m (FY 2018: EUR0.7m)
-- In line with management expectations the EBITDA loss was EUR1.4m (FY 2018: loss of EUR1.5m)
-- In line with management expectations the loss before tax was EUR1.9m (FY 2019: loss EUR4.9m)
-- Net cash at 31 December 2019 was EUR1.3m with no debt.
Following subscription funds from HTC post period end, net cash
position is c. EUR3.4m
-- Loss per share of EUR0.01 (FY 2018: EUR0.03)
Operational Highlights
-- Continued sales of Showcase Experiences, the Group's
award-winning standalone content, with Raid on the Ruhr and Shuttle
Commander launched during the year and Apollo 11 selected as a
launch title for the new Oculus Quest
-- ENGAGE platform selected by Facebook to become part of its ISV programme
-- Commercial agreement with U.S. Space and Rocket Centre extended until 19 December 2020
Post Period End Highlights
-- Partnership agreement with US-based VictoryXR, a world leader
in VR and augmented reality content creation for schools and
education
-- HTC Vive Ecosystem Conference held virtually inside the
ENGAGE platform in conjunction with HTC Corporation
-- EUR3m investment from HTC Corporation and strategic
partnership agreed for the distribution and licence of the Group's
ENGAGE platform globally through HTC enterprise sales channels
David Whelan, CEO of VR Education, said: " VR Education has
positioned itself well in 2019 to identify and overcome many
hurdles which had subdued growth to date and during the year ENGAGE
became available on standalone devices such as the Oculus Quest,
Pico VR and Vive Focus. The availability of standalone devices is
of paramount importance to potential customers and, with these now
in the market and ENGAGE being platform agnostic, I believe the
Group is now well placed to become a leader in immersive
communications.
"The COVID-19 pandemic has transformed the Group's fortunes as
businesses, corporations and educational institutes globally are
now seeking better alternatives to video-based communications due
to limitations with collaborative tasks and the drawbacks of larger
group communications via video as a medium. Our recently announced
strategic partnership and investment from HTC places the Group in a
strong position to accelerate the global adoption of the ENGAGE
platform and create value for shareholders."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Analyst Meeting
A meeting for analysts hosted by David Whelan (CEO) and Séamus
Larrissey (CFO) will be held at 3pm today via Zoom. Please contact
Buchanan at vre@buchanan.uk.com if you would like to receive the
dial in details.
Final Results Presentation
A copy of the Final Results presentation with audio commentary
from the management team will shortly be available on the Company's
website, http://www.vreducationholdings.com
- Ends -
For further information, please contact:
VR Education Holdings plc Tel: +353 87 665 6708
David Whelan, CEO contact@vreducationholdings.com
Séamus Larrissey, CFO
Sandra Whelan, COO
Cairn Financial Advisers LLP (Nominated Tel: +44 (0) 20 7213
Adviser) 0880
James Caithie / Liam Murray / Ludovico
Lazzaretti
Shard Capital Partners LLP (Joint Tel: +44 (0) 20 7186
Broker) 9952
Damon Heath / Erik Woolgar
Davy (Joint Broker & Euronext Growth Tel: +353 1 679 6363
Advisor)
Fergal Meegan / Ronan Veale / Barry
Murphy
Buchanan (Financial PR) Tel: +44 (0)20 7466 5000
Henry Harrison-Topham / Chris Lane VRE@buchanan.uk.com
/ Tilly Abraham
Notes to Editors
VR Education, together with its wholly owned subsidiary, is an
early stage VR software and technology group based in Waterford,
Ireland, dedicated to transforming the delivery methods of
education and corporate training by utilising VR technologies to
deliver fully immersive virtual learning experiences. The Group's
core focus is the development and commercialisation of its online
virtual social learning and presentation platform called ENGAGE,
which provides a platform for creating, sharing and delivering
proprietary and third-party VR content for educational and
corporate training purposes.
In addition to the ongoing development of the ENGAGE platform,
the Group has also built two downloadable showcase VR experiences,
being the award-winning Apollo 11 VR experience and the Titanic VR
experience.
On 12 March 2018, VR Education listed on the AIM market of the
London Stock Exchange and on the Enterprise Securities Market, a
market regulated by Euronext Dublin. For further information,
please visit www.vreducationholdings.com .
CHAIRMAN'S STATEMENT
I am pleased to present the Annual Report and Financial
Statements of VR Education Holdings PLC, a company incorporated in
the Republic of Ireland, for the year ended 31 December 2019
('FY-2019').
Overview of the year
This is the second set of Financial Statements I am proud to
present to shareholders following the successful fundraising and
IPO in March 2018.
Revenues in FY-2019 grew by 43% to EUR1.0 million (FY-2018:
EUR0.7 million) generating a gross profit margin of 61% and gross
profit of EUR622k (FY-2018: EUR476k).
Review of the business
VR Education is dedicated to transforming education globally by
providing new tools to educators and corporate trainers allowing
them to provide high quality, low cost content in a virtual
networked social learning environment.
Following the commercial launch of the ENGAGE platform (the
Group's proprietary VR education platform), in December 2018, the
Group has actively developed and promoted this against
technological and commercial headwinds, the latter mainly
associated with Brexit in the UK. Nevertheless, the perseverance of
the management team has led the Group to recently sign, among
others, two partnerships with HTC Corporation and Victory XR, based
in Taiwan and the US respectively.
The Group also continues to produce award winning standalone
content to showcase the potential of Virtual Reality / Augmented
Reality ('VR/AR') as a tool for educational purposes. The first
release (Apollo 11 VR) has won multiple awards including a Time
Warner award and was one of virtual reality's first big hits when
it was released on the Oculus Rift and the HTC Vive back in 2016. A
High Definition version of this experience was subsequently
launched in November 2018. This title has generated in excess of
EUR1.6 million in revenues since its launch to the year end, one of
the few VR titles that has broken the EUR1.0 million revenue mark.
Titanic VR and Shuttle Commander, launched in Q4 2018 and Q4 2019
respectively, continue to perform well and have together generated
EUR0.6 million in revenues since their launch.
COVID-19
COVID-19 has had a significant impact on many companies across
the globe and the Group is still feeling the effects of this. Prior
to the mandated lockdown put in place in the Republic of Ireland,
the Group made the prudent decision for all of its employees to
work remotely to ensure their safety. This action has not had any
negative effect on productivity within the Group as all our
employees have remained dedicated and professional throughout this
difficult period.
The global COVID-19 pandemic has generated significant demand
for VR solutions and there have been high levels of interest for
conferencing and collaboration tools. The ENGAGE platform is the
ideal tool to meet the needs of the remote working world and the
Group has been working hard since the year end to ensure the
platform is available to those who want to use it.
Future developments in the business
Since the year end, the Group has largely focused on expanding
its distribution of the ENGAGE platform into the US and Asian
markets. A number of deals have been closed in the US with many
more at varying stages in the sales cycle. Most progress has been
made in the Asian market, where the HTC Vive Ecosystem Conference
was held virtually inside the ENGAGE platform in conjunction with
HTC Corporation ('HTC') on 19 March 2020 and the success of this
event has created a significant number of further opportunities for
the Group.
Following the HTC Vive Ecosystem Conference, a commercial
agreement was entered into with HTC to grant them exclusive rights
to resell the ENGAGE platform in Greater China on a revenue share
basis, with a guaranteed minimum revenue each year for the Group
from HTC. Separately, in June 2020, HTC invested EUR3.0 million at
a EUR12.0 million pre-money valuation to further the development of
ENGAGE and to facilitate increased sales and marketing of the
platform.
Demand for the Group's VR showcase experiences, comprising
Apollo 11 VR, Titanic VR and Shuttle Commander, remain in line with
management's expectations with a new experience expected to launch
in H2-2020.
The recent impetus in global demand for the Group's core product
coupled with a strengthening of our balance sheet following our
strategic partnership with HTC, provides the Board with confidence
about the Group's prospects for FY-2020 and beyond.
Your executive directors have done an outstanding job in
maturing the company, upselling its products and securing vital
commercial partnerships. They have of course been greatly aided by
the tireless efforts of a talented pool of staff, and I would like
to extend my thanks to all of them.
Richard Cooper
Chairman
15 June 2020
CHIEF EXECUTIVE'S REVIEW
Review of the Year
2019 has allowed VR Education to identify and overcome many
hurdles which had subdued growth to date. I believe the Group is
now well placed to become a leader in immersive communications. The
COVID-19 pandemic has transformed the Group's fortunes as
businesses, corporations and educational institutes globally are
now seeking better alternatives to video-based communications due
to limitations with collaborative tasks and the drawbacks of larger
group communications via video as a medium. Our recently announced
strategic partnership with HTC will ensure that the Group has
continued support for marketing, sales and business development as
HTC will sell the ENGAGE platform exclusively in Greater China and
non-exclusively in the rest of the world. This partnership will
serve to further both companies' objectives and goals.
ENGAGE Hardware Milestone
2019 was also a transformative year for the Group as some key
hardware hurdles were overcome. ENGAGE became available on
standalone devices such as the Oculus Quest, Pico VR and Vive
Focus. This was of critical importance as the previous two years
proved that pitching a virtual training solution or communications
tool to corporations using PC based equipment would not succeed as
a major limiting issue for most companies is the ease of use of the
VR device.
Up to recently, demos would involve setting up a PC or laptop
with multiple cables before ENGAGE could be used. This often proved
cumbersome for potential customers with the perception that users
would need some technical knowledge to achieve a good end-user
experience. During early 2019, the ENGAGE development team gained
access to multiple standalone devices which allowed them to port
ENGAGE to work cross- platform across all standalone devices and
PC-based devices. For the first time our business developers could
simply pull a headset out of their bag and place the customer into
the experience with minimum fuss.
XR Finally Becoming Mainstream
In my opinion, it cannot be understated how important standalone
devices are to the success of the Extended Reality "XR" industry as
a whole and manufacturers like Facebook/Oculus have not been able
to keep up with demand. Sales of the Oculus Quest headset have
suffered from retail shortages since its release in March 2019 and
continued shortages due to manufacturing issues caused by COVID-19
as many components are manufactured in China. The Facebook/Oculus
headset has sold extremely well and could possibly have sold more
but sales were limited to one per person at retail stores and
devices were not made available to business or education users as
almost all stock was diverted to retail stores for the 2019 holiday
period. The impact of Covid-19 on global questioning of outsourcing
manufacturing to China remains uncertain, but a wider manufacturing
base is regarded by us as highly positive.
Facebook/Oculus ISV Programme
In October 2019, the Group's ENGAGE platform was selected by
Facebook to become part of its ISV programme which works with
enterprise developers and software companies to engage with Oculus
in order to accelerate customer adoption of VR solutions built for
Oculus enterprise products. As a result, following the roll-out of
Oculus for Business which was scheduled for early 2020, VR
Education's ENGAGE platform will, for the first time, be available
via a special portal for Oculus enterprise clients to access and
connect with. In addition, the Group will be one of only a few
select developers who will be able to provide services using
Facebook equipment as well as receiving additional support from
them. This programme was originally set for release in early 2020
however due to the effect of COVID-19 on manufacturing and the
limited number of devices available for enterprise users we have
not seen a full deployment of this programme to date and dependent
on progress by Facebook we hope it will now happen in H2-2020.
Platform Agnostic
Facebook/Oculus was not the only hardware manufacturer to
release standalone devices during 2019 with HTC and Pico seeing
releases of comparable headsets in mid-2019 and early 2020
respectively. The ENGAGE team worked hard to support both the HTC
Vive Focus Plus and Pico Neo 2 and the platform now has parity
across all devices. Being platform agnostic, ENGAGE has mitigated
some of the key challenges with resourcing devices however, stock
is still limited across the world as manufacturing is only starting
to recommence as China's factories return to work post COVID-19
lockdown.
Showcase Experiences
During 2019 the Group continued to see strong sales of its
showcase experiences Apollo 11 VR and Titanic VR on various VR
platforms. In the second half of 2019 the Group released its third
showcase experience on PlayStation VR named "Shuttle Commander"
which puts you in control for some of the Shuttle's most famous
missions.
Sales continued strongly across all platforms and the Group
plans to release Shuttle Commander on PC- based VR devices and the
Oculus Quest later in FY20.
In May 2019 the Group announced the signature of a deal with the
US Rocket and Space Centre in Alabama for the installation of
Apollo 11 VR as a ticketed exhibit. This exhibit proved immensely
popular with visitors and on conclusion of a successful trial
period, the Group secured a twelve month extension of this deal
which was signed in December 2019.
POST YEAR HIGHLIGHTS
COVID-19 Effect
Throughout 2019 the ENGAGE platform became more popular with
educators and corporations using it for small meetings and events.
The ENGAGE user base grew significantly in the latter part of 2019
as users got access to standalone devices and attended events held
inside ENGAGE. In the early part of 2020, as the COVID-19 pandemic
took hold in China and Italy, the president of HTC China, Alvin
Wang Graylin, attended one such event being held inside the ENGAGE
platform and decided to contact VR Education.
At the time, HTC had just recently cancelled its annual Vive
Developer Conference, which was due to be held on the Chinese
mainland in March 2020 and HTC was seeking a way to provide the
event virtually without the limitations of standard video-based
platforms. The ENGAGE team worked very closely with the HTC team in
China for several weeks and on 19 March 2020 the complete HTC Vive
Ecosystem Conference was held inside the ENGAGE platform with over
one thousand attendees logged into the platform and over 1.1
million viewers watching the live stream throughout China. The HTC
Vive Ecosystem Conference was a great success as ENGAGE allowed
users from within China to connect with the outside world in a
fully networked virtual environment with keynote speakers from
Qualcomm, China Mobile, Nvidia, X Prize and HTC to name a few.
Since this event, the Group has been inundated with requests for
virtual events from various corporations and event groups and it is
anticipated that the Group will see a growing market for this type
of service in the future.
A huge number of large physical events have been cancelled due
to the worldwide COVID-19 pandemic and, as a result of this
continued disruption, the Group expects that the event space will
evolve to a scenario where smaller groups will attend the physical
event and there will be increased demand for virtual services.
Further opportunity for these types of services will arise with
global business travel anticipated to reduce significantly, remote
worker employment to become more normalised and the ever-increasing
home school market to see accelerated growth in life under
COVID-19. The world has been forced online to complete simple tasks
such as meetings, classes and events and people are now seeing the
limitations of using current communication systems which broadcast
video and audio.
Running a video conference call with more than six people is
difficult as participants talk over each other quite often and
users can become disengaged with the format as they sit and watch
video. Running virtual meetings and events inside the ENGAGE
platform is as close as you can get to real life by sitting in a
virtual room with virtual people interacting in a natural way.
ENGAGE also has major benefits with very low bandwidth
requirements and its spatial recording systems allowing for the
replay of events as if they were happening live and allowing users
to move within the recording if needed. As a comparison, an
hour-long piece of content with up to 50 users all inside the
ENGAGE platform being spatially recorded is only 80MB in size,
whereas, an hour-long video recording from competitors like Zoom or
Skype will be over 1GB for any type of quality recording.
Overall, it is the Group's strong belief that following
COVID-19, the world will be a very different place with business
travel becoming less common, increasing numbers of remote workers
and a sharp increase in the home school market. The Group also
believes the ENGAGE platform provides users with a better
alternative to services like Microsoft Teams, Skye, Zoom and Adobe
Connect and VR Education is now in a strong place to implement its
plans, with strategic partnerships being made which place the Group
in a prime position for this new era of global communications.
HTC Investment / Partnership
Due to the success of the virtual Vive Ecosystem Conference in
March, HTC wanted to create a stronger relationship with VR
Education and offered the Group a partnership which included not
only investment but a strategic commercial agreement. HTC has been
one of the global leaders in the VR hardware space over the past
five years, releasing many products in the VR industry. VR
Education believes that working alongside a leading VR technology
Company such as HTC, achieving closer integration between teams on
hardware and software development, means that the Group and the
ENGAGE platform will stay ahead of the curve and its competitors
when it comes to the latest in innovation and incorporating the
next generation technologies.
The commercial partnership ensures that VR Education, which has
primarily been a software technology company, now has sales,
marketing and business development support from HTC with HTC having
exclusivity in China and a non-exclusive agreement in place for the
rest of the world. This agreement includes a revenue share model
for revenue generated globally with a fixed minimum quarterly
payment amount of EUR75,000 per quarter, commencing from Q1
2021.
Victory XR Content Partnership
In April 2020, VR Education and VictoryXR agreed terms of a
revenue share agreement, in which VictoryXR will import its
extensive content library onto the ENGAGE platform and provide its
services remotely to school children across the US. VictoryXR
specialises in US-based science curriculum content and virtual
animal dissections, both in the VR and AR space. To date VictoryXR
has created more than 240 unique VR and AR learning experiences
spanning more than 50 different learning units.
Students using the ENGAGE platform will be both in physical
schools and home schooled, including those whose access to
traditional schooling has been impacted by COVID-19 due to
lockdown. Qualified educators will run live virtual classes via
ENGAGE and additional educational content produced by VictoryXR
will be available for replay via the ENGAGE platform.
Future Trading and Outlook
Many different aspects have come together over the past six
months to accelerate the adoption of the ENGAGE platform. Some
aspects were expected and planned for. However, COVID-19 has
accelerated all areas of the business in a way no one could have
predicted just a few months ago.
When the Group looks at what has happened over the past six
months, we see that VR mass adoption is finally starting to take
place due to standalone devices becoming increasingly popular.
Telecommunications companies are also taking a vested interest
in pushing XR to the masses as they seek to upsell their 4G
customers to 5G subscriptions and see XR as a way to push this
forward. To this end VR Education has been working with Deutsche
Telekom and Qualcomm Technologies with a partnership announced in
December 2019 as new devices are set to be introduced to the market
soon.
The Group now has a content partner with VictoryXR in the
education space and a strong strategic partnership with HTC.
The COVID-19 pandemic has caused global disruption in all walks
of life and forced the world to work online. We expect companies
and educational institutes will seek to drastically reduce costs
post COVID-19 with physical events, workplaces and even schools
becoming fully digital in the months and years to come. The Group
believes the ENGAGE platform is perfectly positioned to meet the
needs of this new world as the seeds which were planted over the
previous three years are now starting to grow and bear fruit. We
are confident for the future prospects of the Group and look
forward to further updating shareholders as we progress through
2020.
David Whelan
Chief Executive Officer
15 June 2020
CHIEF FINANCIAL OFFICER'S REVIEW
I am pleased to report that revenue for the year was up 43% on
the prior year from EUR716k to EUR1,024k, driven by the continued
success of the showcase experiences on the PlayStation, Oculus and
Steam platforms coupled with revenue generated from our newly
released ENGAGE platform and our exhibition in the US Space and
Rocket Center in Alabama.
EBITDA loss was EUR1.4 million compared to a loss of EUR1.5
million in the prior year, in line with management
expectations.
Loss before tax was EUR1.9 million, in line with management
expectations, compared to a loss in the prior year of EUR4.9
million.
Operating cashflows were a net outflow of EUR1.2 million for the
period. The current run-rate of staff costs and other ongoing costs
is approximately EUR250k per month.
At the balance sheet date, trade and other receivables were
EUR205k, marginally ahead of trade and other payables at EUR193k.
Trade receivables represented an average of 52 debtor days (2018:
92 days).
The Group's cash position at 31 December 2019 was EUR1.3 million
with no debt. Following the receipt of subscription funds from HTC,
the Group's cash position was approximately EUR3.4m.
Séamus Larrissey
Chief Financial Officer
15 June 2020
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
for the Year Ended 31 December 2019
Note 2019 2018
Continuing Operations EUR EUR
Revenue 3 1,024,148 716,345
Cost of Sales 5 (401,487) (239,701)
------------ ------------
Gross Profit 622,661 476,644
Administrative Expenses 5 (2,555,449) (2,247,337)
Operating Loss (1,932,788) (1,770,693)
Fair value (loss)/gain arising on
derivative financial liabilities 10 - (2,638,063)
Extinguishment Costs 8 - (267,971)
IPO Transaction Costs 9 - (237,202)
Finance Costs 10 (6,998) (29,977)
------------ ------------
Loss before Income Tax (1,939,786) (4,943,906)
Income Tax credit 11 - -
------------ ------------
Total comprehensive loss for the
year attributable to owners of the
parent (1,939,786) (4,943,906)
------------ ------------
Earnings per Share (EPS) attributable
to owners of the parent
Basic from continuing operations 12 (0.010) (0.026)
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2019
Note 2019 2018
EUR EUR
Non-Current Assets
Property, Plant & Equipment 13 115,930 59,541
Intangible Assets 14 1,433,733 956,550
------------- -------------
1,549,663 1,016,091
Current Assets
Trade and other receivables 16 204,904 394,113
Cash and short-term deposits 17 1,292,852 3,485,186
------------- -------------
1,497,756 3,879,299
------------- -------------
Total Assets 3,047,419 4,895,391
------------- -------------
Equity and Liabilities
Equity Attributable to Shareholders
Issued share capital 18 193,136 193,136
Share premium 18 21,587,539 21,587,539
Other reserves 19 (11,287,395) (11,314,729)
Retained earnings 20 (7,705,536) (5,765,750)
------------- -------------
Total Equity 2,787,744 4,700,196
------------- -------------
Non-Current Liabilities
Lease liabilities 34,057 -
------------- -------------
Current Liabilities
Trade and other payables 22 192,893 195,195
Lease liabilities 32,725 -
------------- -------------
225,618 195,195
------------- -------------
Total Liabilities 259,675 195,195
------------- -------------
Total Equity and Liabilities 3,047,419 4,895,391
------------- -------------
The accompanying notes form an integral part of these financial
statements.
COMPANY STATEMENT OF FINANCIAL POSITION
at 31 December 2019
Note 2019 2018
EUR EUR
Non-Current Assets
Investment in subsidiaries 15 15,028,809 15,028,809
------------ -----------
15,028,809 15,028,809
Current Assets
Trade and other receivables 16 5,353,433 5,136,849
Cash and short-term deposits 17 166,411 753,090
------------ -----------
5,519,844 5,889,939
------------ -----------
Total Assets 20,548,653 20,918,748
------------ -----------
Equity and Liabilities
Equity Attributable to Shareholders
Issued share capital 18 193,136 193,136
Share premium 18 21,587,539 21,587,539
Other reserves 19 (194,087) (212,363)
Retained earnings 20 (1,173,957) (687,587)
------------ -----------
Total Equity 20,412,631 20,880,725
------------ -----------
Current Liabilities
Trade and other payables 22 136,022 38,023
------------ -----------
Total Liabilities 136,022 38,023
------------ -----------
Total Equity and Liabilities 20,548,653 20,918,748
------------ -----------
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the Year Ended 31 December 2019
Share Share Other Reserves Retained Total
Capital Premium Earnings
EUR EUR EUR EUR EUR
Balance at 1 January
2018 - - 157,280 (821,844) (664,564)
--------- ----------- --------------- ------------ -------------
Total comprehensive
income
Loss for the year - - - (4,943,906) (4,943,906)
Total comprehensive
income - - - (4,943,906) (4,943,906)
--------- ----------- --------------- ------------ -------------
Transactions with owners
recognised directly in equity
Issue of ordinary
shares 193,136 21,587,539 - - 21,780,675
Share Issue Costs - - (596,212) - (596,212)
Acquisition of a
subsidiary - - (11,263,644) - (11,263,644)
Share option expense - - 387,847 - 387,847
--------- ----------- --------------- ------------ -------------
Balance at 31 December
2018 193,136 21,587,539 (11,314,729) (5,765,750) 4,700,196
--------- ----------- --------------- ------------ -------------
Share Share Other Reserves Retained Total
Capital Premium Earnings
EUR EUR EUR EUR EUR
Balance at 1 January
2019 193,136 21,587,539 (11,314,729) (5,765,750) 4,700,196
--------- ----------- --------------- ------------ ------------
Total comprehensive
income
Loss for the year - - - (1,939,786) (1,939,786)
--------- ----------- --------------- ------------ ------------
Total comprehensive
income - - - (1,939,786) (1,939,786)
--------- ----------- --------------- ------------ ------------
Transactions with owners
recognised directly in equity
Share option expense - - 27,334 - 27,334
--------- ----------- --------------- ------------ ------------
Balance at 31 December
2019 193,136 21,587,539 (11,287,395) (7,705,536) 2,787,744
--------- ----------- --------------- ------------ ------------
The accompanying notes form an integral part of these financial
statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
for the Year Ended 31 December 2019
Share Share Other Retained Total
Capital Premium Reserves Earnings
EUR EUR EUR EUR EUR
Balance at 1 January - - - - -
2018
--------- ----------- ---------- ---------- -----------
Total comprehensive
income
Loss for the year - - - (687,587) (687,587)
--------- ----------- ---------- ---------- -----------
Total comprehensive
income - - - (687,587) (687,587)
--------- ----------- ---------- ---------- -----------
Transactions with owners
recognised directly in equity
Issue of ordinary
shares 193,136 21,587,539 - - 21,780,675
Share Issue Costs - - (596,212) - (596,212)
Share option expense - - 383,849 - 383,849
--------- ----------- ---------- ---------- -----------
Balance at 31 December
2018 193,136 21,587,539 (212,363) (687,587) 20,880,725
--------- ----------- ---------- ---------- -----------
Share Share Other Retained Total
Capital Premium Reserves Earnings
EUR EUR EUR EUR EUR
Balance at 1 January
2019 193,136 21,587,539 (212,363) (687,587) 20,880,725
--------- ----------- ---------- ------------ -----------
Total comprehensive
income
Loss for the year - - - (486,370) (486,370)
--------- ----------- ---------- ------------ -----------
Total comprehensive
income - - - (486,370) (486,370)
--------- ----------- ---------- ------------ -----------
Transactions with owners
recognised directly in equity
Share option expense - - 18,276 - 18,276
--------- ----------- ---------- ------------ -----------
Balance at 31 December
2019 193,136 21,587,539 (194,087) (1,173,957) 20,412,631
--------- ----------- ---------- ------------ -----------
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the Year Ended 31 December 2019
Note 2019 2018
Continuing Operations EUR EUR
Loss before income tax (1,939,786) (4,943,906)
Adjustments to reconcile loss before
tax to net cash flows:
Depreciation of fixed assets 5 81,108 49,984
Amortisation of intangible assets 5 412,976 175,300
Fair value loss/(gain) arising on
derivative financial liabilities 10 - 2,638,063
Non-cash element of extinguishment
costs - 174,651
Non-cash element of advisor warrants - 112,381
Other non-cash items - 1,944
Finance Costs 10 6,998 29,977
Share Option Expense 27,334 30,145
Movement in trade & other receivables 189,210 (155,798)
Movement in trade & other payables (2,302) (187,824)
------------ ------------
(1,224,462) (2,075,083)
Bank interest & other charges paid (6,998) (29,977)
------------ ------------
Net Cash used in Operating Activities (1,231,460) (2,105,060)
------------ ------------
Cash Flows from Investing Activities
Purchases of property, plant & equipment 13 (35,793) (52,225)
Payments to develop Intangible Assets 14 (890,159) (696,059)
------------ ------------
Net cash used in investing activities (925,952) (748,284)
------------ ------------
Cash Flows from Financing Activities
Proceeds from issuance of ordinary
shares - 6,234,953
Payment of lease liabilities (34,922) -
------------ ------------
Net cash generated from financing
activities (34,922) 6,234,953
------------ ------------
Net (decrease) / increase in cash
and cash equivalents (2,192,334) 3,381,609
Cash and cash equivalents at beginning
of year 17 3,485,186 103,577
Cash and cash equivalents at end
of year 17 1,292,852 3,485,186
------------ ------------
The non-cash element of extinguishment costs and non-cash
element of advisor warrants in the year ended 31 December 2018
reflect the fact that the group issued warrants to loan note
holders, cumulative redeemable preference shareholders and advisors
as part of the acquisition of Immersive VR Education Limited and
the subsequent IPO transaction.
The accompanying notes form an integral part of these financial
statements.
COMPANY STATEMENT OF CASH FLOWS
for the Year Ended 31 December 2019
Note 2019 2018
Continuing Operations EUR EUR
Loss before income tax (486,370) (687,587)
Adjustments to reconcile loss before
tax to net cash flows:
Non-cash element of extinguishment
costs - 174,651
Non-cash element of advisor warrants - 112,381
Non-cash element of redemption of
redeemable shares - (18,750)
Finance Costs 348 276
Share Option Expense 18,276 17,518
Movement in trade & other receivables (216,584) (5,118,099)
Movement in trade & other payables 97,999 38,023
---------- ------------
(586,331) (5,481,587)
Bank interest & other charges paid (348) (276)
---------- ------------
Net Cash used in Operating Activities (586,679) (5,481,863)
---------- ------------
Cash Flows from Investing Activities - -
Cash Flows from Financing Activities
Redemption of redeemable shares - (6,250)
Proceeds from issuance of ordinary
shares - 6,234,953
Net cash generated from financing
activities - 6,228,703
---------- ------------
Net (decrease) / increase in cash
and cash equivalents (586,679) 746,840
Cash and cash equivalents at beginning
of year 17 753,090 6,250
Cash and cash equivalents at end
of year 17 166,411 753,090
---------- ------------
The non-cash element of extinguishment costs and non-cash
element of advisor warrants in the year ended 31 December 2018
reflect the fact that the company issued warrants to loan note
holders, cumulative redeemable preference shareholders and advisors
as part of the acquisition of Immersive VR Education Limited and
the subsequent IPO transaction.
The non-cash element of redemption of redeemable shares relates
to the accounting treatment for the cancellation of unpaid
redeemable shares during the year.
The accompanying notes form an integral part of these financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
VR Education Holdings plc ("the Company") is publicly traded on
the Alternative Investment Market ("AIM") of the London Stock
Exchange and on the Euronext Growth Market ("Euronext Growth"), a
market regulated by Euronext Dublin. The Company is incorporated
and domiciled in the Republic of Ireland. The registered office is
Unit 9, Cleaboy Business Park, Old Kilmeaden Road, Waterford and
the registered number is 613330.
The Company is the parent company of Immersive VR Education
Limited ("IVRE"). IVRE is incorporated and domiciled in the
Republic of Ireland with the same registered office as the Company.
On 12 March 2018 the Company acquired Immersive VR Education
Limited and contemporaneously listed on London's AIM market and
Dublin's Euronext Growth market. As part of the Admission process,
the Group raised GBP6 million before expenses, through an
oversubscribed placing of 60,000,000 new ordinary shares at a
placing price of 10p each.
The Group is principally engaged in the development of the
educational Virtual Reality platform 'ENGAGE. The Company also
develops and sells Virtual Reality experiences for the education
market.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of
the Financial Statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
Basis of Consolidation
The consolidated financial statements incorporate those of VR
Education Holdings plc and its subsidiary Immersive VR Education
Limited.
All financial statements are made up to 31 December 2019. Where
necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with
those used by other members of the group.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Subsidiaries are fully consolidated from the date on which
control is transferred to the group. They are deconsolidated from
the date on which control ceases. Control is achieved when the
group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee.
The Group re-assess whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the elements of control.
Business Combination
Acquisition of Immersive VR Education Limited
The Company entered into an agreement to acquire the entire
issued share capital of Immersive VR Education Limited on 12 March
2018. The acquisition was effected by way of issue of shares. Due
to the relative size of the companies, Immersive VR Education's
shareholders became the majority shareholders in the enlarged
capital of the Company. The transaction fell outside of IFRS 3
("Business Combinations") and as such has been treated as a group
reconstruction.
Therefore, although the Group reconstruction did not become
unconditional until 12 March 2018, these consolidated financial
statements are presented as if the Group structure has always been
in place, including the activity from incorporation of the Group's
subsidiaries.
Furthermore, as VR Education Holdings plc was incorporated on 13
October 2017, while the enlarged group began trading on 12 March
2018, the Statement of Comprehensive Income and consolidated
Statement of Changes in Equity and consolidated Cash Flow
Statements are presented as though the Group was in existence for
the whole year. On this basis, the Directors have decided that it
is appropriate the reflect the combination using merger accounting
principles as the transaction falls outside the scope of IFRS 3 and
as such has been treated as a Group reconstruction. No fair value
adjustments have been made as a result of the combination.
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future
periods.
Judgments
In the process of applying the Group's accounting policies,
management has made the following judgements, which have the most
significant effect on the amounts recognised in the financial
statements:
Capitalised development costs
In applying the requirements of IAS 38 Intangible Assets, the
Group assessed various development projects against the criteria
required for capitalisation. Certain projects that did not meet the
criteria regarding the ability to determine whether those projects
would generate sufficient future economic benefits were expensed.
The judgements reflect the early stage of the VR/AR market and will
change over time.
Estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are described below. The Group based its assumptions and estimates
on parameters available when the financial statements were
prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or
circumstances arising that are beyond the control of the Group.
Such changes are reflected in the assumptions when they occur.
Capitalised development costs impairment review
The Group's impairment review undertaken to assess the carrying
value of capitalised development costs includes certain assumptions
on future revenues and costs associated with the underlying
technology. Those cashflows are discounted at an appropriate
discount rate. These estimates and assumptions are reviewed on an
on-going basis. Changes in accounting estimates may be necessary if
there are changes in the circumstances on which the estimate was
based or as a result of new information or more experience. Such
changes are recognised in the period in which the estimate is
revised.
Derivative financial instruments
The Group has assessed in 2018 the fair value of the derivative
financial liabilities arising on the conversion feature of
convertible secured loan notes and the cumulative redeemable
preference shares. This calculation includes assumptions on the
expected period of exercise, risk free interest rate and share
price volatility. The Group engaged third party valuations experts
to assist them in the selection of such assumptions.
Going Concern
The financial statements are presented on a going concern basis.
In forming this opinion, the Directors have considered all the
information available to them. This includes management prepared
forecasts, due consideration of the ability to raise funds on the
open market in respect of the dual listing on the Alternative
Investments Market on the London Stock Exchange and on the
Enterprise Securities Market, a market regulated by Euronext Dublin
and the timing as to when such funds will be received. Based on
their consideration of these matters and the receipt of EUR3m
subscription for ordinary shares from HTC on 12 June 2020 the
Directors believe the Group and Company to be a going concern.
In response to the significant impact that the coronavirus
pandemic is having on the global economy, that Group has reviewed
the potential impact upon on its business and revenue generation.
The Directors anticipate experience sales will be relatively
unaffected both during and immediately after the lockdown period,
however there is scope to adjust levels of expenditure in the
longer term, if required.
These financial statements do not include adjustments relating
to the recoverability and classification of recorded asset amounts
nor to the amounts and classification of liabilities that might be
necessary should the group not continue as a going concern. Thus,
the Directors continue to adopt the going concern basis of
accounting in preparing the financial statements.
Foreign Currency Translation
(a) Functional and Presentation Currency
Items included in the Financial Statements of the Group are
measured using the currency of the primary economic environment in
which the entity operates ("functional currency").
The Financial Statements are presented in euro (EUR), which is
the Group's functional and presentation currency.
(b) Transactions and Balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement, except when deferred in
other comprehensive income as qualifying cash flow hedges and
qualifying net investment hedges. Foreign exchange gains and losses
that relate to borrowings and cash and cash equivalents are
presented in the income statement within 'finance income or costs'.
All other foreign exchange gains and losses are presented in the
income statement within Administrative Expenses.
Current versus non-current classification
The Group presents assets and liabilities in the statement of
financial position based on current/non-current classification. An
asset is current when it is:
-- Expected to be realised or intended to be sold or consumed in the normal operating cycle
-- Held primarily for the purpose of trading
-- Expected to be realised within twelve months after the reporting period; or
-- Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting period
All other assets are classified as non-current.
A liability is current when:
-- It is expected to be settled in the normal operating cycle
-- It is held primarily for the purpose of trading
-- It is due to be settled within twelve months after the reporting period Or
-- There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period
The Group classifies all other liabilities as non-current.
Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors that makes
strategic decisions.
Fair value measurement
The Group measures financial instruments such as derivatives at
fair value at each balance sheet date. The Company has applied IFRS
9 for all periods presented.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability Or
-- In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must be accessible
by the Group. The fair value of an asset or a liability is measured
using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants
act in their economic best interest.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable, and represents amounts receivable for goods
and services supplied, stated net of discounts, returns and
Value-Added Taxes (VAT).
Under IFRS 15, Revenue from Contracts with Customers, five key
points to recognise revenue have been assessed:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the
contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance
obligations in the contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation.
The Group recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity, and specific criteria have been met for
each of the Group's activities, as described below. The Group bases
its estimates on historical results, taking into consideration the
type of customer, the type of transaction and the specifics of each
arrangement.
Where the Group makes sales relating to a future financial
period, these are deferred and recognised under 'deferred revenue'
on the Statement of Financial Position. The Group currently has two
revenue streams:
Firstly, the Group is primarily focused on developing
proprietary educational VR content which is sold through licences.
This is considered "Showcase Experience Revenue" for reporting
purposes. Revenue is recognised when the license key is delivered
to the customer, or when all performance obligations have been
achieved.
Revenue is received net of commission from the platforms where
the Group licenses their content. The gross amount of revenue is
recognised in revenue with the corresponding commission portion
recognised in cost of sales.
Secondly, the Group develops educational VR content on behalf of
customers based on specific customer requirements. This is
considered "Other Revenue" for reporting purposes. Such revenue is
recognised on a percentage completion basis unless there are
significant performance obligations that would require deferral
until such obligations are delivered. Stage of completion is
measured by reference to labour hours incurred to date as a
percentage of total estimated labour hours for each contract. When
the contract outcome cannot be measured reliably, revenue is
recognised only to the extent that the expenses incurred are
eligible to be recovered. This is generally during the early stages
of development where the specifications need to pass through the
customer's approval as part of the development.
The disaggregation of revenue, required under IFRS 15, has been
prepared on the basis of the two revenue streams outlined above and
is included in Note 3.
Government Grants
Government grants are recognised where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an
expense item, it is recognised as income on a systematic basis over
the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful life
of the related asset.
Property, Plant and Equipment
All property, plant and equipment is stated at historical cost
less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Cost may
also include transfers from equity of any gains/losses on
qualifying cash flow hedges of foreign currency purchases of
property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to the income
statement during the financial period in which they are
incurred.
Depreciation on assets is calculated using the straight-line
method to allocate their cost less residual value over their
estimated useful lives, as follows:
Office equipment - 3 - 5 years
Furniture, fittings and equipment - 5 years
Leasehold improvements - over the life of the leased asset
Right-of-use assets are depreciated over the shorter of the
asset's useful life and the lease term on a straight line
basis.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period. Gains
and losses on disposals are determined by comparing the proceeds
with the carrying amount, and are recognised in the income
statement.
Intangible Assets
Research costs are expensed as they are incurred. Development
costs that are directly attributable to the design and testing of
identifiable and unique commercial software controlled by the Group
are recognised as intangible assets when the following criteria are
met:
-- it is technically feasible to complete the software product
so that it will be available for use and sale;
-- management intends to complete the software product and use or sell it;
-- there is an ability to use or sell the software product;
-- it can be demonstrated how the software product will generate future economic benefits;
-- adequate technical, financial and other resources to complete
the development and use or sell the software product are available;
and
-- the expenditure attributable to the software product during
its development can be reliably measured.
Directly attributable costs that are capitalised as part of the
software product include the software development employee costs
and subcontracted development costs.
Other development expenditure that does not meet these criteria
is recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset
in a subsequent period.
Computer software development costs recognised as assets are
amortised over their estimated useful lives, which do not exceed 3
years and commences after the development is complete and the asset
is available for use. Intangible assets are amortised over their
estimated useful lives based on the pattern of consumption of the
underlying economic benefits. Amortisation is included in
Administrative Expenses.
Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an
indication that an asset may be impaired. If any indication exists,
or when annual impairment testing for an asset is required, the
Group estimates the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's or CGU's fair value
less costs of disposal and its value in use. The recoverable amount
is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from
other assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
The Group bases its impairment calculation on detailed budgets
and forecast calculations, which are prepared separately for each
of the Group's CGUs to which the individual assets are allocated.
These budgets and forecast calculations generally cover a period of
five years. A long-term growth rate is calculated and applied to
project future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in the
statement of profit or loss in expense categories consistent with
the function of the impaired asset.
For assets, an assessment is made at each reporting date to
determine whether there is an indication that previously recognised
impairment losses no longer exist or have decreased. If such
indication exists, the Group estimates the asset's or CGU's
recoverable amount.
A previously recognised impairment loss is reversed only if
there has been a change in the assumptions used to determine the
asset's recoverable amount since the last impairment loss was
recognised. The reversal is limited so that the carrying amount of
the asset does not exceed its recoverable amount, nor exceed the
carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset
in prior years.
Trade Receivables
Trade receivables are amounts due from customers for licenses
sold or services performed in the ordinary course of business. If
collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as
current assets. If not they are presented as non-current
assets.
Trade receivables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. The Group holds the
trade receivables with the objective of collecting the contractual
cash flows.
The Group provides for known bad debts and other accounts over a
certain age in line with Group policy. The realisation of the asset
may differ from the provision estimated by management.
Cash and Cash Equivalents
In the Statement of Cash Flows, cash and cash equivalents
comprise cash in hand and short-term deposits. Bank overdrafts are
shown within borrowings in current liabilities on the Statement of
Financial Position.
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax,
from the proceeds. Where the issuance of the new shares or options
occurs in a subsequent period from when the incremental costs are
incurred these costs are prepaid until the issuance takes
place.
Share Based Payments
The Group has an equity settled employee incentive plan. The
cost of equity settled transactions with employees is measured by
reference to the fair value at the date at which they are granted
and is recognised as an expense over the vesting period, which ends
on the date on which the relevant employees become fully entitled
to the award. Fair value is determined using an appropriate pricing
model. In valuing equity-settled transactions, no account is taken
of any vesting conditions, other than conditions linked to the
price of the shares of the Group. No expense is recognised for
awards that do not ultimately vest.
At each reporting date before vesting, the cumulative expense is
calculated, representing the extent to which the vesting period has
expired and management's best estimate of the achievement or
otherwise of non-market conditions number of equity instruments
that will ultimately vest. The movement in cumulative expense since
the previous reporting date is recognised in the profit and loss
within administration expenses, with a corresponding entry in the
balance sheet in share options reserve.
Where the terms of an equity-settled award are modified or a new
award is designated as replacing a cancelled or settled award, the
cost based on the original award terms continues to be recognised
over the original vesting period. In addition, an expense is
recognised over the remainder of the new vesting period for the
incremental fair value of any modification, based on the difference
between the fair value of the original award and the fair value of
the modified award, both as measured on the date of the
modification. No reduction is recognised if this difference is
negative. Where an equity-settled award is cancelled, it is treated
as if it had vested on the date of cancellation, and any cost not
yet recognised in the Statement of Comprehensive Income for the
award is expensed immediately.
Trade Payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade payables are recognised
initially at fair value, and subsequently measured at amortised
cost using the effective interest method.
Leases
The Group leases office premises and motor vehicles under rental
contracts for fixed periods but may contain extension options.
Lease terms are negotiated on an individual basis and contain
different terms and conditions. The lease agreements entered into
by the Group do not impose any covenants other than the security
interests in the leased assets that are held by the lessor.
From 1 January 2019 leases are recognised as a right-of-use
asset and a corresponding liability at the date at which the leased
asset is available for use by the Group. Assets and liabilities
arising from a lease are initially measured on a present value
basis. Lease liabilities include the net present value of the
following lease payments:
-- Fixed payments less any lease incentives receivable;
-- Variable lease payments that are based on an index or a rate;
-- The exercise price of a purchase option if the Group is
reasonably certain to exercise that option; and
-- Payments of penalties for terminating the lease.
Lease payments to be made under reasonably certain extension
options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined
the lessee's incremental borrowing rate is used. Lease payments are
allocated between principal and finance cost. The finance charge is
charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the
liability.
Payments associated with short-term leases (12 months or less)
and leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss.
Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings, using the
effective interest method.
Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. To the extent
that there is no evidence that it is probable that some or all of
the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services, and amortised over the period of
the facility to which it relates.
Borrowings are classified as current liabilities, unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the end of the reporting
period.
Borrowing costs
General and specific borrowing costs directly attributable to
the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to the cost
of those assets, until such time as the assets are substantially
ready for their intended use or sale.
Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation. All
other borrowing costs are recognised in the income statement within
finance costs in the period in which they are incurred.
Convertible Financial Instruments
Convertible financial instruments issued by the Group comprise
convertible loan notes and convertible redeemable Preference Shares
that can be converted to ordinary share capital at the option of
the holder. The number of shares to be issued may vary with changes
in their fair value.
The derivative component arising from the conversion option is
recognised at fair value. The debt component is recognised
initially as the difference between the fair value of the
convertible financial instrument as a whole and the fair value of
the derivative. Any directly attributable transaction costs are
allocated against the liability.
Subsequent to initial recognition, the debt component of the
convertible instrument is measured at amortised cost using the
effective interest rate method. The derivative component is
re-measured at fair value at each subsequent balance sheet
date.
Current and Deferred Income Tax
The tax expense for the period comprises current and deferred
tax. Tax is recognised in the income statement, except to the
extent that it relates to items recognised directly in equity. In
this case the tax is also recognised directly in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Group operates and
generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the Financial
Statements. However, the deferred tax is not accounted for if it
arises from initial recognition of an asset or liability in a
transaction other than a business combination that, at the time of
the transaction, affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted, or substantially enacted, by the end of the
reporting period and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised. Deferred
income tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against
current tax liabilities, and when the deferred income tax assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Research and development tax credit
The Group undertakes certain research and development activities
that qualify for the receipt of a research and development
(R&D) tax credit from the Irish tax authorities. Such grants
are
New standards, interpretations and amendments adopted by the
Group and Company
The Group and Company have applied the following standards and
amendments for the first time from 1 January 2019:
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatments
Annual Improvements to IFRS Standards 2015-2017 Cycle
The Group adopted all of the requirements of IFRS 16 - Leases
retrospectively from 1 January 2019, but has not restated
comparatives for the 2018 reporting period as permitted under the
transition provisions in the standard. The reclassifications and
the adjustments arising from the new leasing rules are therefore
recognised in the opening balance sheet on 1 January 2019.
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been categorised as
operating leases. These liabilities were measured at the present
value of the remaining lease payments. The change in policy
increased right-of-use assets and lease liabilities by
EUR77,370.
Other than as described above, there has been no material impact
on the financial statements as a result of the adoption of the new
and amended standards.
The Group and Company have not applied the following new and
revised IFRSs that have been issued but are not yet effective:
Amendments to references to the conceptual framework in IFRS
standards - effective 1 January 2020
Amendments to IFRS 3 Business Combinations - effective 1 January
2020
Amendments to IAS 1 and IAS 8: Definition - effective 1 January
2020
The Directors believe that these new and amended standards are
not expected to have a material impact on the Group and
Company.
3. Segment Reporting
2019 2018
Revenue by Type EUR EUR
Showcase experience revenue 806,408 592,362
ENGAGE revenue 92,141 -
Other revenue 125,599 123,983
--------- -------
Total Revenue 1,024,148 716,345
--------- -------
4. Capital Management
For the purpose of the Company's capital management, capital
includes issued capital, convertible preference shares, share
premium and all other equity reserves. The primary objective of the
Group's capital management is to maximise the shareholder
value.
Group 2019 2018
EUR EUR
Lease liabilities (66,782) -
Trade and other payables (192,893) (195,194)
Less: cash and short-term deposits 1,292,852 3,485,186
--------- ---------
Net Funds 1,033,177 3,289,992
--------- ---------
Equity 2,787,744 4,700,196
--------- ---------
Total Equity 2,787,744 4,700,196
--------- ---------
Capital and net funds 3,820,921 7,990,188
--------- ---------
5. a. Expenses by nature
2019 2018
EUR EUR
Depreciation charges 81,108 49,984
Amortisation expense 412,976 175,300
Operating Lease Payments 7,709 36,839
Foreign Exchange Gain (12,184) (35,027)
Other Expenses 3,357,486 2,956,001
--------- ---------
3,847,095 3,183,097
--------- ---------
Wages and salaries capitalised (811,205) (586,937)
Other expenses capitalised (78,954) (109,122)
--------- ---------
Total cost of sales and administrative
expenses 2,956,936 2,487,038
--------- ---------
Disclosed as:
Cost of sales 401,487 239,701
Administrative expenses 2,555,449 2,247,337
--------- ---------
Total cost of sales and administrative
expenses 2,956,936 2,487,038
--------- ---------
b. Auditor Remuneration
Services provided by the Company's auditor
During the year, the Company obtained the following services
from the Company's auditor:
2019 2018
EUR EUR
Fees payable to the Company's auditor
for the audit of the financial statements
Tax 47,509 42,173
Other - corporate finance services 4,213 11,688
- 40,776
------- --------
6. Employees
Employee Benefit Expense 2019 2018
EUR EUR
Wages and salaries 1,846,750 1,380,687
Social security costs 188,440 136,910
Defined contribution pension costs 16,811 8,961
Share option expense 27,334 30,145
Capitalised employee costs (811,205) (586,937)
--------- ---------
Total Employee Benefit Expense 1,268,130 969,766
--------- ---------
Average Number of People Employed 2019 2018
Average number of people (including
executive Directors)
employed:
Operations 30 22
Administration 3 3
Marketing 4 2
--------- ---------
Total Average Headcount 37 27
--------- ---------
7. Directors remuneration
Below is the Directors' remuneration for the year ended 31
December 2019 and for the year ended 31 December 2018
31 December 2019
---------------------------------------
Directors' Pension Options Total
Group fee benefits issued
EUR EUR EUR EUR
Executive Directors
David Whelan 161,500 3,025 - 164,525
Sandra Whelan 127,500 3,150 - 130,650
Séamus Larrissey
Non-executive Directors 122,551 4,250 1,576 128,377
Richard Cooper 51,724 - 16,700 68,424
Michael Boyce 76,760 - - 76,760
Tony Hanway 27,429 - - 27,429
567,464 10,425 18,276 596,165
---------- --------- ------- -------
31 December 2018
-----------------------------------------
Pension Options Total
Group Directors' benefits issued
fees
EUR EUR EUR EUR
Executive Directors
David Whelan 114,181 2,017 - 116,198
Sandra Whelan 85,807 2,100 - 87,907
Séamus Larrissey
Non-executive Directors 86,500 2,833 4,779 94,112
Richard Cooper 96,077 - 13,917 109,994
Michael Boyce 37,143 - - 37,143
Tony Hanway 23,807 - - 23,807
At 31 December 2018 443,515 6,950 18,696 469,191
------------ --------- ------- -------
The options issued are a non-cash amount and are accounted for
in line with the treatment of the other share options issued to
employees under IFRS 2. Further notes on Share Based Payments are
included in Note 21.
During the year ended 31 December 2018, Richard Cooper received
a fee in relation to the IPO transaction of GBP50,000.
During the year ended 31 December 2019, Michael Boyce received a
fee in relation to consultancy services provided to the Company,
separate to his role as a Non-Executive Director, of GBP43,549
(2018: GBP12,031).
8. Extinguishment Costs
2019 2018
EUR EUR
Legal and professional fees paid on
behalf of redeemable secured loan
note holders and cumulative redeemable
preference shares holders - 51,500
Monitoring fee and interest paid post
conversion - 41,820
Warrant costs - 174,651
------ --------
Total Extinguishment Costs - 267,971
------ --------
As part of the reorganisation process which occurred prior to
the IPO in 2018 all loan note holders and cumulative redeemable
preference share note holders converted their holdings into
ordinary shares. During this process the Group agreed to pay:
- all interest that would have accrued on these loan notes for
the 12-month period from the date of Admission had such loan notes
remained in issue.
- all monitoring fees that would have accrued for the 12-month
period from the date of Admission had such agreements not been
terminated.
The group also issued warrants to the loan note holders and
cumulative redeemable preference shareholders over such number of
new Ordinary Shares in the Company as is equal to 3 per cent. of
the issued Ordinary Shares at Admission, exercisable at a 50 per
cent. premium to the Issue Price expiring 36 months from
Admission.
9. IPO Transaction Costs
2019 2018
EUR EUR
Legal and professional fees - 237,202
---- -------
Total IPO Transaction Costs - 237,202
---- -------
Included in Other Reserves - 596,212
---- -------
The transaction costs relate to the admission of the Group to
the AIM market of the London Stock Exchange and the Euronext Growth
market of Euronext Dublin on 12 March 2018.
10. Finance Costs
2019 2018
EUR EUR
Interest expense:
- Interest payable on convertible
loan notes - 27,105
- Dividend on redeemable convertible
preference shares - 1,356
- Lease interest 4,988 -
- Bank charges 2,010 1,516
----- -----------
Total finance costs 6,998 29,977
----- -----------
Fair value (loss) / gain on derivative
financial liability - (2,638,063)
----- -----------
The fair value loss on derivative financial liabilities arose in
2018 from the conversion of convertible debt and preference shares
to ordinary equity in Immersive VR Education Limited prior to its
acquisition by the Group.
11. Income Tax
2019 2018
EUR EUR
Current tax:
Current tax on loss for the year - -
---- ----
Total current tax - -
---- ----
Deferred tax (Note 23) - -
---- ----
Income Tax - -
---- ----
The tax assessed for the year differs from that calculated using
the standard rate of corporation tax in Ireland (12.5%). The
differences are explained below:
2019 2018
EUR EUR
Loss Before Tax (1,939,786) (4,943,906)
----------- -----------
Tax calculated at domestic tax rates
applicable to loss in
Ireland of 12.5% (242,473) (617,988)
Tax effects of:
- Depreciation in excess of capital
allowances 7,364 4,033
- Expenses not deductible for tax
purposes 45,449 406,488
- Tax losses for which no deferred
tax asset was recognised 189,660 207,467
----------- -----------
Total tax - -
----------- -----------
12. Earnings per share (EPS)
2019 2018
Loss attributable to equity holders EUR EUR
of the Group:
Continuing Operations (1,939,786) (4,943,906)
----------- -----------
Weighted average number of shares
for Basic EPS 193,136,406 193,136,406
Basic loss per share from continuing
operations (0.010) (0.026)
----------- -----------
13. Property, Plant & Equipment
Fixtures,
Leasehold fittings Office Right of
Group improvements and equipment Equipment use Total
assets
EUR EUR EUR EUR EUR
Cost of Valuation
At 1 January
2018 15,601 5,610 84,168 - 105,379
Additions 4,740 1,415 46,070 - 52,225
-------------- -------------- ----------- ---------- -------
At 31 December
2018 20,341 7,025 130,238 - 157,604
-------------- -------------- ----------- ---------- -------
IFRS 16 Adjustment - - - 118,820 118,820
Additions - - 35,793 26,882 62,675
-------------- -------------- ----------- ---------- -------
At 31 December
2019 20,341 7,025 166,031 145,702 339,099
-------------- -------------- ----------- ---------- -------
Depreciation
At 1 January
2018 3,284 2,127 42,668 - 48,079
Charge (note
5) 4,607 1,405 43,972 - 49,984
------ ----- ------- ------ -------
At 31 December
2018 7,891 3,532 86,640 - 98,063
------ ----- ------- ------ -------
IFRS 16 Adjustment - - - 43,998 43,998
Charge (note
5) 4,607 1,405 40,175 34,921 81,108
------ ----- ------- ------ -------
At 31 December
2019 12,498 4,937 126,815 78,919 223,169
------ ----- ------- ------ -------
Net Book Amount
At 31 December
2018 12,450 3,493 43,598 - 59,541
--------- -------- -------- ------- ---------
At 31 December
2019 7,843 2,088 39,216 66,783 115,930
--------- -------- -------- ------- ---------
Depreciation expense of EUR81,108 (2018: EUR49,984) has been
charged in 'Administrative Expenses'.
14. Intangible Assets
Software
in development
Group costs Total
EUR EUR
Cost
At 1 January 2018 435,791 435,791
Additions 696,059 696,059
--------------- ---------
At 31 December 2018 1,131,850 1,131,850
--------------- ---------
Additions 890,159 890,159
--------------- ---------
At 31 December 2019 2,022,009 2,022,009
--------------- ---------
Amortisation
At 1 January 2018 - -
Charge 175,300 175,300
------- -------
At 31 December 2018 175,300 175,300
------- -------
Charge 412,976 412,976
------- -------
At 31 December 2019 588,276 588,276
------- -------
Net Book Value
At 31 December 2018 956,550 956,550
--------- ---------
At 31 December 2019 1,433,733 1,433,733
--------- ---------
The software being developed relates to the creation of virtual
reality experiences and an online virtual learning and corporate
training platform.
ENGAGE is an online virtual learning and corporate training
platform currently in development by the Company. A desktop version
was released in December 2018 and the mobile version was released
in December 2019. Amortisation commenced when the mobile version
launched.
Titanic VR which is available for sale across all major VR
capable platforms since November 2018 has commenced being amortised
in the period. Raid on the Ruhr launched during 2019 and
amortisation commenced during the period. Space Shuttle was
developed during 2019 remains in development for the Oculus Quest
and PC platforms at 31 December 2019. Amortisation will commence
when Space Shuttle is launched on Oculus Quest and PC in H1
2020.
Amortisation expense of EUR412,976 (2018: EUR175,300) has been
charged in 'Administrative Expenses'.
An impairment review was carried out at the balance sheet date.
No impairment arose.
15. Investments in Subsidiaries
Company EUR
At 1 January 2018 -
Additions 15,028,809
----------
At 31 December 2018 15,028,809
----------
Additions -
----------
At 31 December 2019 15,028,809
----------
Investments in subsidiaries are recorded at cost, which is the
fair value of the consideration paid.
On 12 March 2018, the Company has acquired all of the issued
capital of Immersive VR Education Limited for a consideration of
EUR15,000,000 which was settled by issuing 133,089,739 Ordinary
Shares in the Company. The Company incurred expenses totalling
EUR28,809 as part of the transaction.
Country of Proportion
incorporation of equity shares
Name and residence Nature of business held by the
company
Immersive VR Education Virtual Reality
Limited Ireland Technology 100%
This subsidiary undertaking is included in the consolidation.
The proportion of the voting rights in the subsidiary undertaking
held directly by the Parent Company does not differ from the
proportion of ordinary shares held.
16. Trade and Other Receivables
Group Company
2019 2018 2019 2018
EUR EUR EUR EUR
Trade receivables 146,649 180,129 - -
Less: provision for - - - -
impairment of receivables
------- ------- --------- ---------
Trade receivables
- net 146,649 180,129 - -
Amounts due from related
parties - - 5,337,389 5,058,589
Prepayments 53,047 178,650 16,044 53,062
Other debtors 3,775 4,991 - -
VAT 1,433 30,343 - 25,198
------- ------- --------- ---------
204,904 394,113 5,353,433 5,136,849
------- ------- --------- ---------
As at 31 December 2019, trade receivables of EUR146,649 (2018:
EUR180,129) were fully performing and deemed fully recoverable. No
bad debt provision charge was incurred during 2019 (2018:
EURNil).
The carrying amounts of the Company's trade and other
receivables are denominated in the following currencies:
Group Company
2019 2018 2019 2018
EUR EUR EUR EUR
Euro - Neither past
due nor impaired 35,828 53,028 - -
Dollar - Neither past
due nor impaired 110,821 127,101 - -
------- ------- ---- ----
146,649 180,129 - -
------- ------- ---- ----
17. Cash and short-term deposits
Group Company
2019 2018 2019 2018
EUR EUR EUR EUR
Cash at bank and on
hand 1,292,852 3,485,186 166,411 753,090
--------- --------- ------- -------
1,292,852 3,485,186 166,411 753,090
--------- --------- ------- -------
18. Issued Share Capital and Premium
Number of Ordinary
shares shares Share premium Total
EUR EUR EUR
At 1 January 2018 1 - - -
Shares issued as consideration
for reverse merger 133,089,739 133,090 14,866,910 15,000,000
Ordinary Shares Issued 60,046,666 60,046 6,720,629 6,780,675
----------- -------- ------------- ----------
At 31 December 2018
and at 31 December
2019 193,136,406 193,136 21,587,539 21,780,675
----------- -------- ------------- ----------
On 12 March 2018 the Company acquired Immersive VR Education Ltd
for a purchase price of EUR15 million through the issue 133,089,739
new ordinary shares of EUR0.001 and became the legal parent of the
Group. On 12 March 2018 the Company listed on London's AIM market
and Dublin's Euronext Growth market. As part of the Admission
process, the Group raised GBP6 million (EUR6,772,773) before
expenses, through an oversubscribed placing of 60,000,000 new
ordinary shares at a placing price of GBP0.10 (EUR0.1127) per
share.
19. Other Reserves
Group Company
EUR EUR
At 1 January 2018 157,280 -
Share issue costs (596,212) (596,212)
Acquisition of a subsidiary (11,263,644) -
Share option expense 387,847 383,849
------------ ---------
At 31 December 2018 (11,314,729) (212,363)
------------ ---------
At 1 January 2019 (11,314,729) (212,363)
Share option expense 27,334 18,276
------------ ---------
At 31 December 2019 11,287,395 194,087
------------ ---------
20. Retained Earnings
Group Company
EUR EUR
At 1 January 2018 (821,844) -
Loss for the year (4,943,906) (687,587)
----------- ---------
At 31 December 2018 (5,765,750) (687,587)
----------- ---------
At 1 January 2019 (5,765,750) (687,587)
Loss for the year (1,939,786) (486,370)
----------- -----------
At 31 December 2019 (7,705,536) (1,173,957)
----------- -----------
21. Share Based Payments
During the year ended 31 December 2018, VR Education Holdings
plc introduced a share-based payment scheme for employee
remuneration ("the 2018 Scheme") to replace the scheme previously
in operation within Immersive VR Education Limited ("the 2016
Scheme"). The 2018 Scheme and the 2016 schemes are classified
equity settled share based payment plans. Recipients under the
scheme are awarded options over ordinary shares of the Company.
On 12 March 2018, the options under the 2016 Scheme were
cancelled as part of the Capital Restructure and Listing process
and replaced with options under the 2018 Scheme under the
equivalent terms and conditions as the 2016 scheme, and a stock
split which gave rise to the issue of 740 shares for every 1 share
held. The options granted under the 2016 Scheme had vesting periods
of up to 36 months. The replacement of the options did not give
rise to any additional income statement expense in 2018.
There were 133,089 (2018: 311,108) employee options granted
during 2019 at an exercise price of EUR0.10 (2018: EUR0.135) per
share and these vest subject to continued service by the employee
over a period of 3 years. Options expire at the end of a period of
7 years from the Grant Date or on the date on which the option
holder ceases to be an employee.
Share-based payment expense with Director
On 12 March 2018, VR Education Holdings plc granted options to
purchase 1m ordinary shares to Richard Cooper, the Chairman of the
Company. The options vest if the market capitalisation of the
Company equals 2.5 times the market capitalisation on admission to
listing for a consecutive period of 30 days. Except in the event of
a change in control (see below) the options, which are exercisable
at a price of GBP0.0001, cannot be exercised for a period of two
years and expire on 12 March 2023. The market capitalisation
requirement is a "market condition" under IFRS 2 and the valuation
of the option, which amounted to EUR0.668, takes this market
condition into account.
In the event of a change in control, in the two years after
admission to listing, the options are exercisable at prices ranging
from GBP0.0001 to GBP0.10. The change in control scenarios gave
rise to option values of EUR0.018 - EUR0.112.
The movement in employee share options and weighted average
exercise prices are as follows for the reporting periods
presented:
2018 Scheme 2016 Scheme
2019 2018 2019 2018
At 1 January 4,425,028 - - 4,208
Capital restructure
and Listing process - 3,113,920 - (4,208)
Granted during
period 133,089 1,311,108 - -
Forfeited during (92,591) - - -
period
At 31 December 4,465,526 4,425,028 - -
Options outstanding
at 31 December
Number of shares 4,465,526 4,425,028 - -
Weighted average
remaining contractual
life 2.79 years 3.75 years
Weighted average
exercise price
per share EUR0.028 EUR0.028
Range of exercise EUR0.0001 EUR0.0001-EUR0.135
price - EUR0.135
Exercisable at
31 December
Number of shares 2,658,450 1,997,556
Weighted average
exercise price
per share EUR0.028 EUR0.026
No options were exercised during the period. The weighted
average exercise price of options granted during the period was
EUR0.11 (2018: EUR0.032). The expense recognised in respect of
employee share based payment expense and credited to the share
based payment reserve in equity was EUR27,334 (2018:
EUR30,144).
Advisor Warrants
During 2018, as part of the listing process and as set out in
the admission document, the Company issued warrants over 5,018,328
shares at an exercise price of GBP0.15, subject to expiry on
various dates up to 12 March 2023. The warrants were valued under
the Black Scholes model. The expense recognised during the period
was EURNil (2018: EUR162,871).
Investor Warrants
During 2018, as part of the arrangements for the listing process
and as set out in the admission document, the Company issued
warrants over 5,794,092 shares at an exercise price of GBP0.15,
subject to expiry on 12 March 2023. The warrants were valued under
the Black Scholes model. An expense of EURNil (2018: EUR174,651)
was recognised in the income statement during the period.
The Company has measured the fair value of the services received
as consideration for equity instruments of the Company, indirectly
by reference to the fair value of the equity instruments. The table
below sets out the options and warrants that were issued during the
period and the principal assumptions used in the valuation.
Employee
Number of options / warrants 133,089
Grant date 1 Jan 2019
Vesting period 3 years
Share price at date of grant GBP0.11
Exercise price EUR0.1127
Volatility 57%
Option life 7 years
Dividend yield 0%
Risk free investment rate 0.14%
Fair value per option at grant date EUR0.071
Weighted average remaining contractual life in
years 6.0
22. Trade and Other Payables
Group Company
2019 2018 2019 2018
EUR EUR EUR EUR
Trade Payables 25,709 28,263 10,109 9,169
PAYE/PRSI 45,739 46,923 13,276 16,362
VAT - - 101,126 -
Accrued Expenses 121,445 120,009 11,511 12,492
------- ------- ------- ------
192,893 195,195 136,022 38,023
------- ------- ------- ------
Terms and conditions of the above financial liabilities:
-- Trade payables are non-interest bearing and are normally settled on 30-day terms
-- PAYE/PRSI payables are non-interest bearing and are normally settled on 30-day terms
-- VAT payables are non-interest bearing and are normally settled on 60-day terms
-- Accrued expenses are non-interest bearing are settled over varying terms throughout the year
23. Deferred Tax
Deferred income tax assets are recognised for tax loss
carry-forwards to the extent that the realisation of the related
tax benefit through future taxable profits is probable. The Company
did not recognise deferred income tax assets of EUR556,688 (2018:
EUR410,683) in respect of losses and depreciation in excess of
capital allowances amounting to EUR4,453,504 (2018: EUR3,285,467)
that can be carried forward against future taxable income.
24. Related Parties
During the year the Directors received the following
emoluments:
Group Company
2019 2018 2019 2018
Directors EUR EUR EUR EUR
Aggregate emoluments 549,181 450,465 549,181 406,787
Share option expense 18,276 18,696 18,276 18,696
------- ------- ------- -------
567,457 469,161 567,457 425,483
------- ------- ------- -------
Included in the above is an amount of EUR51,516 (2018:
EUR96,077) paid to Luclem Estates and Advisory Limited, a company
in which Richard Cooper, a director of the Company, is also a
director. These fees relate to Richard Cooper's consultancy
services to the Company. As at 31 December 2019 EURNil was
outstanding.
25. Events after the reporting date
On 12 June 2020, the Company issued 48,284,102 ordinary shares
at a EUR0.0621 (GBP0.0547) per share to HTC Corporation raising
EUR3,000,000 before costs are deducted. The proceeds will be
primarily used to further develop and enhance the Company's
proprietary ENGAGE platform and build out its sales and marketing
capability. The proceeds will also be used to a lesser extent to
produce additional showcase experiences which support the uptake of
the ENGAGE platform and clearly demonstrate its potential.
The assessment of the COVID-19 pandemic will need continued
attention and will evolve over time. COVID-19 is considered to be a
non-adjusting post statement of financial position event and no
adjustment is made or required in these financial statements as a
result. The development and duration of the COVID-19 pandemic make
it difficult to predict the ultimate impact on the Group and
Company at this stage. This will have some implications for the
operations of the Group and Company in the future however the
Directors consider the impact will be minimal. Management will
continue to assess the impact of COVID-19 on the Group and Company,
however, it is not possible to quantify the impact at this
stage.
26. Ultimate controlling party
The Directors believe that there is no ultimate controlling
party as no one shareholder has control of the Company.
- Ends -
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
FR KKPBKABKDKAD
(END) Dow Jones Newswires
June 16, 2020 02:00 ET (06:00 GMT)
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