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EVRH Evr Holdings Plc

4.75
0.00 (0.00%)
24 Apr 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Evr Holdings Plc LSE:EVRH London Ordinary Share GB00BD2YHN21 ORD GBP0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 4.75 4.70 4.80 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

EVR Holdings PLC Final Results (3276Z)

14/03/2017 7:00am

UK Regulatory


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TIDMEVRH

RNS Number : 3276Z

EVR Holdings PLC

14 March 2017

 
For immediate release  14 March 2017 
 

EVR Holdings plc

('EVR' or the 'Company')

AUDITED FINAL RESULTS FOR THE YEARED 31 DECEMBER 2016

EVR Holdings plc (AIM: EVRH), a leading creator of music virtual reality ('VR') content, announces its results for the year ended 31 December 2016.

Operational Highlights

   --     Beta version of the MelodyVR app launched on 22 December 2016; 

-- MelodyVR's multi-year exclusive partnership agreements with venues and promoters have increased by over 550% and now cover 64 worldwide events and music festivals;

-- MelodyVR partnered with Warner Music Group and entered a VR content creation and distribution agreement in December 2016;

   --     A warrant was granted to Warner Music Group giving it a potential equity interest in EVR; 

-- Marketing, licensing and development teams have been strengthened with the addition of significant hires;

-- MelodyVR partnered with Telefonica to deploy a 'lite' version of the MelodyVR in over 600 O2 stores in Germany.

Anthony Matchett, Chief Executive Officer of EVR said:

"As we prepare for the forthcoming worldwide launch of our VR music platform, the virtual reality industry continues to grow at an exponential rate. Following a recently announced partnership with Warner Music Group, I believe that MelodyVR is increasingly well placed to dominate the VR content ecosystem given the limited offering of entertainment content that is currently available to consumers. As the VR market develops, fuelled predominantly by promotional campaigns from Samsung, HTC and Google, as well as the recent release of PlayStation VR, we expect the demand and appetite for high-quality VR content to increase from both consumers and hardware manufacturers alike. With the world's leading technology companies, such as Facebook, Samsung, Google and Sony all battling for market share, we expect that promotional activities involving low-cost, or free of charge VR devices and featuring exclusive content, will become more commonplace. With VR hardware sales rapidly increasing and user adoption continuing to accelerate, we look forward to the worldwide launch of our VR music platform and substantial content library."

-Ends-

For more information please contact

 
EVR Holdings plc 
Sean Nicolson, Chairman                                Tel: +44 (0) 20 7466 5000 
Anthony Matchett, Chief Executive Officer              www.evrholdings.com 
 
 
  SPARK Advisory Partners Limited (Nominated Adviser)      Tel: +44 (0) 203 368 3550 
Neil Baldwin / Sean Wyndham-Quin                         www.sparkadvisorypartners.com 
 
 
Peterhouse Corporate Finance Limited (Broker)            Tel: +44 (0) 20 7469 0930 
Eran Zucker / Lucy Williams                              www.pcorpfin.com 
 
 

Media enquiries:

 
Buchanan 
Ben Romney / Jamie Hooper            Tel: +44 (0) 
 Stephanie Watson / Catriona         20 7466 5000 
 Flint 
EVR@buchanan.uk.com           www.buchanan.uk.com 
 

About EVR Holdings plc

EVR Holdings plc ('EVR') is a company that is quoted on the AIM market of the London Stock Exchange (EVRH.L). EVR, a creator of virtual reality content, joined AIM on 16 May 2016 following a reverse takeover of Armstrong Ventures plc. MelodyVR Ltd is a wholly owned subsidiary of EVR.

Further information can be viewed at www.evrholdings.com

Chairman's Statement

Introduction

I am pleased to present my report as Chairman of EVR Holdings plc ("the Company") for the year ended 31 December 2016.

Financial Review

In 2015 the Company changed the scope of its investing policy to focusing on opportunities in the media, technology and healthcare sectors. On 16 May 2016 the Company acquired MelodyVR Ltd, ("Melody") and its subsidiary company Immersive Construction ltd (hereinafter referred to as the "Group") for a total consideration of GBP5.12 million. This transaction has been accounted for in the financial statements below as a reverse acquisition in accordance with IFRS 3, hence the consolidated results contained herein treat Melody as the acquiring company and the historical comparatives are the comparatives of Melody, as opposed to those of the Company.

On 20 September 2016, the Company announced the oversubscribed placing of 200,000,005 new ordinary shares of 1p each to new and existing investors, at an issue price of 1.7p per share. This generated GBP3.4 million (before expenses) with the shares being issued on 11 October 2016.

As at 31 December 2016 the operating losses before one off or non-cash items were GBP1,640,175 (2015: GBP179,145), this adds back non cash and non-recurring items GBP990,747 (2015: GBP7,413). Operating losses of the Group were GBP2,630,922 (2015 operating losses: GBP186,558), it is anticipated that the Group will begin generating revenue once the MelodyVR application is launched.

Cash and cash equivalents as at 31 December 2016 were GBP3,369,693 (2015: GBP13,115).

Business Review

I am pleased to report that EVR's executive team has delivered upon a number of strategic goals as outlined in the Company's Admission Document dated 27 April 2016.

In the nine months following readmission to AIM, the Group has successfully released a beta version of its VR music platform, secured a global content creation and distribution agreement with one of the world's largest record labels, increased its number of exclusive partnerships with venues and promoters by over 550% and has significantly strengthened its marketing, licensing and development teams in London.

Over the next 12 months, the Group will continue to follow an aggressive expansion strategy, focusing heavily on content creation and product development as well as areas of interest such as content analytics, augmented reality and interactive advertising. In addition, it will also seek to strengthen its Board by the appointment of new directors who bring additional commercial, corporate and strategic experience.

Feedback from beta testing of Melody's application which commenced in December 2016 has proven to be extremely positive and has provided numerous insights into consumer behaviour, leading to several refinements to the platform's user experience.

The executive team intends to leverage further insights as even more users are invited to participate in the beta programme ahead of our wider commercial launch, which will occur at a time that is strategically aligned with the long term goals of the Company and our partners. Our team continues to work closely with hardware manufacturers such as Facebook's Oculus and Sony PlayStation, refining both launch strategy and marketing plans.

Future Developments

In order to further increase worldwide production capabilities and in-line with our 2017 growth strategy, the Group intends to open a series of satellite offices throughout Europe, North America and Asia. The offices, opening initially in Los Angeles and New York, will enable the Group to better serve its partners, such as record labels, hardware manufacturers and artists. Following a series of key hires in areas such as marketing, licensing and engineering, Melody now intends to grow its global presence, attracting world-class talent from both the music and technology industries, at both management and director level.

As the VR market matures, Melody will launch its free-of-charge app across the leading VR hardware and devices. The Board believes that the Melody platform, featuring exclusive content and performances from world-renowned artists and musicians will cater to the growing consumer demand for VR entertainment content and in turn, generate significant revenues for the Company post-launch. To date, Melody has created thousands of interactive VR experiences with over 500 international recording artists. Over the coming months, Melody will pursue its goal of launching what the Board believes will be the leading destination for virtual reality music experiences and the world's next major music platform.

Sean Nicolson

Chairman

PRIMARY FINANCIAL STATEMENTS

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2016

 
                                                     2016                  2015 
                                                      GBP                   GBP 
 
 Continuing operations: 
 Administrative expenses                              (2,630,922)             (186,558) 
                                               ------------------    ------------------ 
 OPERATING LOSS                                       (2,630,922)             (186,558) 
 
 Operating loss before non-recurring 
  and non-cash items                                  (1,640,175)             (179,145) 
                                               ------------------    ------------------ 
  Depreciation                                           (53,631)               (7,413) 
  Readmission costs                                     (492,139)                     - 
  Share based payments                                  (444,977)                     - 
                                               ------------------    ------------------ 
  OPERATING LOSS                                      (2,630,922)             (186,558) 
-------------------------------------------  --------------------  -------------------- 
 
   Finance income                                           2,212                     - 
 Finance costs                                            (7,847)                     - 
                                               ------------------    ------------------ 
 LOSS FOR THE YEAR BEFORE 
  TAXATION                                            (2,636,557)             (186,558) 
 
 Taxation                                                       -                     - 
                                               ------------------    ------------------ 
 NET LOSS AND TOTAL COMPREHENSIVE 
  INCOME 
 FOR THE YEAR                                         (2,636,557)             (186,558) 
 
 Attributable to: 
 
  Owners of the parent company                        (2,584,414)                     - 
  Non - controlling interest                             (52,143)                     - 
                                               ------------------    ------------------ 
 LOSS PER SHARE - basic and 
  diluted from continuing operations                     (0.028)p         (0.04)p 
                                                         ========              ======== 
 

Consolidated Statement of Financial Position

As at 31 December 2016

 
                                           2016                    2015 
                                            GBP                     GBP 
 ASSETS 
 NON-CURRENT ASSETS 
 
 Property, plant and equipment                   229,732                  39,894 
 Intangible assets                               603,476                   2,150 
                                      ------------------     ------------------- 
 TOTAL NON-CURRENT ASSETS                        833,208                  42,044 
                                      ------------------     ------------------- 
 
 CURRENT ASSETS 
 
 Trade and other receivables                     112,602                  17,510 
 Cash and cash equivalents                     3,369,693                  13,115 
                                   ---------------------   --------------------- 
 TOTAL CURRENT ASSETS                          3,482,295                  30,625 
                                      ------------------   --------------------- 
 TOTAL ASSETS                                  4,315,503                  72,669 
                                                ========             =========== 
 
 CURRENT LIABILITIES 
 
 Trade and other payables                      (232,283)               (101,227) 
                                      ------------------   --------------------- 
 NET ASSETS/(LIABILITIES)                      4,083,220                (28,558) 
                                                ========              ========== 
 
 EQUITY 
 
 Share capital                                10,067,861                   9,500 
 Share premium reserve                         5,903,289                 148,500 
 Retained Earnings                           (2,770,972)               (186,558) 
 Share option reserve                            444,977                       - 
 Merger relief reserve                           486,611                       - 
 Non-controlling interests                      (46,003)                       - 
 Reverse takeover reserve                   (10,002,543)                       - 
                                      ------------------   --------------------- 
 TOTAL EQUITY                                  4,083,220                (28,558) 
                                               =========              ========== 
 

Consolidated Statement of Changes in Equity

For the year ended 31 December 2016

 
                            Share                 Share                Merger              Share                Retained                Reverse           Non-Controlling           Total 
                            Capital               Premium              Relief              Option                 Losses                Takeover              Interest              Equity 
                                                                       Reserve             Reserve                                       Reserve 
                             GBP                   GBP                  GBP                 GBP                    GBP                    GBP                   GBP                  GBP 
 
 Balance 
  at 1 January 
  2015 
 Issue 
  of new 
  shares                           9,500                148,500                  -                                                                                        -             158,000 
 Comprehensive 
  loss for 
  the year                             -                      -                  -                    -               (186,558)                                           -           (186,558) 
                      ------------------   --------------------   ----------------   ------------------   ---------------------      -----------------    -----------------   ----------------- 
 Balance 
  at 31 
  December 
  2015                             9,500                148,500                  -                    -               (186,558)                      -                    -            (28,558) 
 
 Warrants 
  and options 
  issued                               -                      -                  -              444,977                       -                      -                    -             444,977 
 Company's 
  reserve/(deficit) 
  prior 
  to reverse 
  acquisition                  2,925,753              4,523,392                  -                    -             (5,679,926)                      -                    -           1,769,219 
 Shares 
  issued 
  by the 
  Company 
  on acquisition               4,866,118                                   486,611                    -                       -                      -                    -           5,352,729 
 Reverse 
  acquisition 
  adjustment                     (9,597)              (240,457)                  -                    -               5,679,926           (10,002,543)                    -         (4,572,671) 
 Share 
  issue                        2,276,087              1,471,854                  -                    -                       -                      -                    -           3,747,941 
 Non-controlling 
  interest                             -                      -                  -                    -                       -                      -                6,140               6,140 
 Loss for 
  the year                             -                      -                  -                    -             (2,584,414)                      -             (52,143)         (2,636,557) 
                      ------------------   --------------------   ----------------   ------------------   ---------------------   --------------------   ------------------   ----------------- 
 Balance                      10,067,861              5,903,289            486,611              444,977             (2,770,972)           (10,002,543)             (46,003)           4,083,220 
  at 31                         ========               ========            =======             ========                ========               ========             ========            ======== 
  December 
  2016 
 

Consolidated Statement of Cash Flows

For the year ended 31 December 2016

 
 
                                             2016            2015 
 CASH FLOWS FROM OPERATING ACTIVITIES         GBP             GBP 
 
 Loss from continuing operations          (2,636,557)   (186,558) 
 
 Adjustments for: 
 Depreciation of fixed assets                  53,631       7,413 
 Share based payment expense                  444,977           - 
 Increase/(decrease) in trade 
  and other receivables                       112,575    (17,510) 
 Increase in trade and other 
  payables                                    475,576      23,949 
                                                _____       _____ 
 
 NET CASH OUTFLOW FROM OPERATING 
  ACTIVITIES                              (1,549,798)   (172,706) 
                                              _______       _____ 
 Investing activities 
 Purchase of property, plant 
  and equipment                             (243,469)    (47,307) 
 Purchase of intangible assets                      -     (2,150) 
 Acquisition of subsidiary                  1,401,905           - 
                                                _____        ____ 
 NET CASH INFLOW FROM INVESTING 
  ACTIVITIES                                1,158,436    (49,457) 
 
 Financing activities 
 Proceeds from issue of ordinary 
  share capital                             3,328,988     158,000 
 Proceeds from the exercise of                418,952           - 
  warrants 
 Loans from directors                               -      77,278 
                                                _____       _____ 
 NET CASH GENERATED FROM FINANCING 
  ACTIVITIES                                3,747,940     235,278 
                                                _____       _____ 
 
 Increase in cash and cash equivalents      3,356,578      13,115 
 Cash and cash equivalents brought             13,115           - 
  forward 
                                                _____       _____ 
 
 CASH AND CASH EQUIVALENTS CARRIED 
  FORWARD                                   3,369,693      13,115 
                                                _____       _____ 
 

ABRIDGED NOTES TO THE PRIMARY FINANCIAL STATEMENTS

For the 12 months ended 31 December 2016

The financial statements of the Group for the 12 months ended 31 December 2016 and 2015 have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by European Union.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2016 or 2015 as defined by section 435 of the Companies Act 2006 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies, and those for 2016 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, and (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts.

Basis of Consolidation

Where the Group has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

Business Combinations

The Consolidated Financial Statements comprise the period for the 12 months to 31 December 2016. During the year, the Company completed the acquisition of MelodyVR Ltd ("Melody"). The Directors determined that the transaction was akin to a reverse acquisition as per IFRS 3, Business Combinations. However, in order to fall under the category of a Business Combination under IFRS 3, the purchase needs to be of a business. The Directors have determined that the Company constitutes an investment business and therefore the transaction falls under the scope of IFRS 3.

Consequently, it is appropriate to apply the guidance in paragraphs B19-B27 of IFRS 3 for reverse acquisitions. Application of the reverse acquisitions guidance results in the non-listed operating entity being identified as the accounting acquirer, and the listed investment business being identified as the accounting acquiree. Therefore for accounting purposes Melody should account as if it purchased the Company. Any difference between the fair value of the assets acquired and the fair value of the shares issued should be recognised as goodwill, in accordance with IFRS 3.

Therefore the results contained herein treat Melody as the acquiring company and the historical comparatives are the comparatives of Melody, as opposed to the Company.

Going Concern

The Financial Statements have been prepared on the going concern basis. The Directors have prepared cash flow forecasts through to 30 June 2018. These forecasts take into account the intended launch timetable within the year ending December 2017, as well as projecting potential revenue profiles based on hardware adoption estimates. The Directors have performed sufficient sensitivity analysis including what the impact may be of significant delays to launching the MelodyVR app, not securing sufficient licencing or insufficient global hardware adoption. As significant progress has been made in securing the necessary exploitation rights and there being very positive initial indicators on hardware adoption to date, the intended launch timetable is considered achievable. As there are sufficient existing resources to operate for the foreseeable future irrespective of launch the Board has concluded that the going concern assumption is appropriate in preparing these financial statements.

1. LOSS FROM OPERATIONS

 
 This has been arrived                2016                    2015 
  at after charging: 
                                   Group      Company      Group      Company 
                                    GBP         GBP         GBP         GBP 
 
 Depreciation of property, 
  plant and equipment             53,631         -         7,413         - 
 Auditors' remuneration: 
 Audit fees                       17,750      13,000         -           - 
 Audit of accounts of 
  associates of the company 
  pursuant to legislation         10,500         -         5,000      10,000 
 Non audit fees:                                                       1,180 
  Taxation advisory services        4,000       4,000         -          - 
 Other advisory services          55,000      55,000         -           - 
                                  ========   ========     ========   ======== 
 
 

2. ACQUISITIONS DURING THE YEAR

On 15 May 2016, the Company acquired 100% of the ordinary shares in Melody and its 51% owned subsidiary Immersive Construction Ltd, by share for share exchange. This was determined to be a reverse takeover acquisition. The breakdown of assets and liabilities below are that of EVR Holdings plc.

A breakdown of assets and liabilities acquired is as follows:

 
                    Book Value   Fair Value   Fair Value 
                                 Adjustment   to Group 
                    GBP          GBP          GBP 
 
 Debtors            676,379      -            676,379 
 Cash at bank       1,401,905    -            1,401,905 
 Creditors          (132,507)    -            (132,507) 
                    _____        _____        _____ 
 Net assets 
  on acquisition    1,945,777    -            1,945,777 
 Goodwill 
  on acquisition                              603,476 
                                              _____ 
 Consideration                                2,549,253 
                                              _____ 
 Discharged 
  by: 
  Share for 
  share exchange                              2,549,253 
                                              _____ 
 

The Goodwill calculation per the interim financial statements has been recalculated from GBP2,549,704 to GBP603,476 to coincide with the fair value of the consideration paid.

 
 3. AUDITOR'S REMUNERATION 
                                                 2016                                        2015 
                                      Group                Company                Group                Company 
                                       GBP                   GBP                   GBP                   GBP 
 During the year the 
  Company obtained the 
  following services 
  from the Company's 
  auditors: 
 Fees payable to the 
  Company's auditors 
  for the audit of the 
  Company's 
 annual accounts                            17,750                13,000                 5,000                10,000 
 Fees payable to the 
  Company's auditors 
  for other services: 
  Tax services                               4,000                 4,000                     -                 1,180 
 Other services                             55,000                55,000                     -                     - 
                               -------------------   -------------------   -------------------   ------------------- 
                                            76,750                72,000                 5,000                11,180 
                                         =========             =========             =========             ========= 
 
 
 
 4. DIRECTORS' AND EMPLOYEE REMUNERATION 
                                                 2016                                        2015 
                                      Group                Company                Group                Company 
 The amount paid to                            GBP                   GBP                   GBP                   GBP 
  directors and employees, 
  is as follows: 
 
 Short-term employee 
  benefits                                 691,302               268,124                     -               121,516 
 Share based payment 
  costs                                    358,497                31,009                     -               110,762 
                               -------------------   -------------------   -------------------   ------------------- 
                                         1,049,799               299,133                     -               232,278 
                                         =========             =========             =========             ========= 
 
                                                 2016                                        2015 
                                      Group                Company                Group                Company 
 The average number                            No.                   No.                   No.                   No. 
  of employees for the 
  year was as follows: 
 
 Directors                                       4                     2                     2                     2 
 Senior Management                               1                     1                     -                     - 
 Staff                                           9                     -                     -                     - 
                               -------------------   -------------------   -------------------   ------------------- 
                                                14                     3                     2                     2 
                                         =========             =========             =========             ========= 
 
 
 Details for directors' 
  remuneration is as 
  follows: 
 
                                                                                         Total                 Total 
 Director                                                           Fees                  2016                  2015 
                                                                     GBP                   GBP                   GBP 
 
 Sean Nicolson                                                    25,000                25,000                11,458 
 Peter Read                                                       25,000                25,000                11,458 
 Anthony Matchett                                                 75,000                75,000                     - 
 Steven Hancock                                                   75,000                75,000                     - 
 Simon Cole                                                       15,624                15,624                     - 
 Haresh Kanabar                                                        -                     -                35,600 
 Manish Kotecha                                                        -                     -                29,000 
 Peter Redmond                                                         -                     -                34,000 
                                                     -------------------   -------------------   ------------------- 
                                                                 215,624               215,624               121,516 
 

5. EARNINGS PER SHARE

The basic earnings per share is based on the loss for the year divided by the weighted average number of shares in issue during the year. The weighted average number of ordinary shares for the year ended 31 December 2016 assumes that all shares have been included in the computation based on the weighted average number of days since issue.

 
                                                  2016                        2015 
                                                  Group                       Group 
                                                   GBP                         GBP 
  Loss attributable to equity holders 
   of the Company: 
  Continuing and total operations                    (2,584,414)                     (186,558) 
                                             -------------------            ------------------ 
 
                                                 No. of                      No. of 
                                                  shares                      shares 
 
  Weighted average number of ordinary 
   shares in issue for basic and 
   fully 
  diluted earnings                                 9,113,642,478                   486,611,833 
                                         -----------------------   --------------------------- 
 
                                                  Pence                     Pence per 
                                                   per 
                                                  Share                       share 
  Loss per share 
 
  Basic and diluted: 
  Continuing and total operations                       (0.028)p                       (0.04)p 
                                                      ==========                    ========== 
 

6. SHARE OPTIONS AND DIRECTOR WARRANTS

EQUITY-SETTLED SHARE OPTION SCHEME

The Group operates share-based payment arrangements to remunerate directors and key employees in the form of options and warrants. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

The following table sets out the details of these options granted:

 
               Warrants in parent at 31-Dec    Warrants in parent converted      Warrants issued in      Warrants at 31-Dec   Exercise   Issue date       Expiry 
                                       2015         1 for every 100 In year                the year                    2016      price                      date 
    Option 
    holder 
     Simon 
      Cole                                                                                4,615,090               4,615,090       1.1p   16.05.2016   17.05.2019 
   Anthony 
  Matchett                                                                               11,537,725              11,537,725       1.1p   16.05.2016   17.05.2019 
    Steven 
   Hancock                                                                               11,537,725              11,537,725       1.1p   16.05.2016   17.05.2019 
      Sean 
  Nicolson                                                                                4,615,090               4,615,090       1.1p   16.05.2016   17.05.2019 
     Peter 
      Read                                                                                4,615,090               4,615,090       1.1p   16.05.2016   17.05.2019 
      Sean 
  Nicolson                      461,509,020                   (456,893,930)                                       4,615,090       1.2p   31.07.2015   31.07.2020 
     Peter 
      Read                      461,509,020                   (456,893,930)                                       4,615,090       1.2p   31.07.2015   31.07.2020 
             ------------------------------   -----------------------------   ---------------------   --------------------- 
                                923,018,040                   (913,787,860)              36,920,720              46,150,900 
                           ================                  ==============              ==========              ========== 
 

No warrants have lapsed nor been exercised during the year. This calculation takes into account warrants and options awarded to directors in the performance of their duties

The Group operates an approved enterprise management incentive scheme under which employees have been granted options to purchase shares in EVR Holdings plc. The unexercised options at 31 December 2016 expire on the tenth anniversary from the grant date and are subject to vesting criteria.

Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions

On 31 July 2015 the Group issued 461,509,020 warrants for 0.01p ordinary shares to both Sean Nicolson and Peter Read as part of their remuneration terms. These warrants have an expiry date of 31 July 2020 and following the consolidation of the Group's ordinary shares on 13 May 2016 the warrants were consolidated into a total of 9,230,180 warrants each exercisable at 1.2p. (0.012p prior to the 1 for 100 shares consolidation).

On 16 May 2016 the Group issued 11,537,725 warrants to both Anthony Matchett and Steven Hancock, with a further 4,615,090 issued to each of Simon Cole, Sean Nicolson and Peter Read. These warrants have an expiry date of 16 May 2019 and are exercisable at 1.1p. The fair value of these warrants was determined using the Black-Scholes option pricing model and was 0.4p per warrant.

The significant inputs to the model in respect of the options and warrants granted were as follows

 
                                           2016          2015 
 
  Grant date share price                   1.1p        0.012p 
  Exercise share price                     1.1p        0.012p 
  No. of share options               59,777,856   923,018,040 
  Risk free rate                           0.5%          0.5% 
  Expected volatility                       50%           50% 
  Expected option life                  3 years       5 years 
  Calculated fair value per share          0.4p        0.012p 
 

The total share-based payment expense recognised in the income statement for the year ended 31 December 2016 in respect of warrants granted was GBP239,111.

The fair value of the options is based on the market value at the date of grant of the number of shares for which the performance criteria have been met for the year less the exercise price of 1.1p per share. The market value per share at the date of grant was 3.3p.

On 13 October 2016 the Company issued 13,828,472 options to the employees of the Group under the approved enterprise management incentive share option scheme and subject to vesting criteria.

The significant inputs to the model in respect of the options granted were as follows:

 
                                          2016 
 
 Grant date share price                   3.3p 
 Exercise share price                     1.1p 
 No. of share options               13,828,472 
 Risk free rate                           0.5% 
 Expected volatility                       50% 
 Expected option life                 10 years 
 Calculated fair value per share         2.59p 
 

The total share-based payment expense recognised in the income statement for the year ended 31 December 2016 in respect of share options granted was GBP119,386.

On 22 December 2016 the Group issued 43,239,926 options to Warner Music Inc. These warrants may be exercised at any time on or before 21 December 2021 and entitle the warrant holder to subscribe 4.25p for one ordinary share for each warrant held. The fair value of these warrants was determined using the Black-Scholes option pricing model and was 0.002p per option. The inputs to the model were as follows:

 
                                                    2016 
 
 Grant date share price                             3.3p 
 Exercise share price                              4.25p 
 No. of share options                         43,239,926 
 Risk free rate                                     0.4% 
 Expected volatility                                 40% 
 Expected option life                             1 year 
 Calculated fair value per share                  0.002p 
 

The total share-based payment expense recognised in the income statement in relation to these warrants was GBP86,479.

7. RELATED PARTY TRANSACTIONS

There were no related party transactions during the year

8. POST BALANCE SHEET EVENTS

During the period 1 January 2017 to 28 February 2017 12,453,574 warrants were exercised for a total of 12,453,574 ordinary shares for a cash consideration in aggregate of GBP201,891.

Other than the above, the Directors were not aware of any other material events since the reporting date.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR EAXDDFLLXEFF

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March 14, 2017 03:00 ET (07:00 GMT)

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