REG - Engage XR Holdings - Final Results
03/06/2025 07:00
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RNS Number : 0869L Engage XR Holdings PLC 03 June 2025
3 June 2025
ENGAGE XR Holdings Plc
("ENGAGE XR", the "Company", or the "Group")
Final Results
ENGAGE XR Holdings Plc (AIM: EXR), a leading provider of immersive
communications technology, announces its audited results for the year ended 31
December 2024.
Financial Highlights:
· Total revenue of €3.4 million (2023: €3.7 million), reflecting an
8% decline due to delayed contract closures (expected in 2025) and reduced
one-off enterprise activity.
· Education revenue grew to €1.3 million (2023: €1.1 million),
driven by strong renewals and expansion from key partners including OptimaED
(USA) and InspiredED (UK).
· Gross margin of 86% (2023: 90%).
· EBITDA loss narrowed slightly to €3.9 million (2023: €4.0
million), reflecting disciplined cost control.
· Cash position of €3.6 million at 31 December 2024 (2023: €7.9
million), with no debt.
Operational Highlights:
· Continued pivot to education and training: Education and corporate
training now represent over 50% of revenue YTD 2025, up from 38% in FY24.
· Partnership with OptimaED has shown significant growth, increasing
its licenses sixfold from 500 at the start of 2023 to over 3,000 licenses
currently, with plans to double again this year.
· Delivered the Group's largest ever contract with major client in
Middle East in partnership with PwC. Renewed contracts with Bank of America,
KPMG, and PWC.
· "School of AI" initiative now live enabling immersive, AI-powered
learning experiences. Thousands of students engage daily.
Current trading and Outlook:
· The first five months of the current financial year has seen the
Company make good progress in broadening its opportunities, but the Company is
still being impacted by delays in the pipeline converting into signed
contracts.
· Operating cost base reduced significantly in Q2 2025 with monthly
run-rate of costs now approx.€0.2 million.
· Expect progress in the sales pipeline throughout 2025 and 2026 as
Group works closely with Meta, Lenovo and a host of global resellers who
already have a large potential client base to sell to.
David Whelan, CEO of ENGAGE XR, commented: "2024 was a year of transition and
strategic change. While headline revenue declined, our pivot to education and
training is delivering tangible results. With strong partnerships, a growing
reseller network, and a leaner cost base, we are well positioned to scale
recurring revenue and deliver long-term value."
For further information, please contact:
ENGAGE XR Holdings Plc Tel: +353 87 665 6708
David Whelan, CEO info@engagexr.co
Séamus Larrissey, CFO
Sandra Whelan, COO
Cavendish Capital Markets Limited Tel: +44 (0) 20 7220 0500
(Nominated Adviser & Broker)
Marc Milmo/ Seamus Fricker (Corporate finance)
Sunila de Silva (ECM)
SEC Newgate (Financial Communications) Tel: +44 (0)7540 106366
Robin Tozer engage@secnewgate.co.uk
About ENGAGE XR
ENGAGE XR Holdings plc (AIM: EXR) has developed ENGAGE, an immersive training,
education and collaboration platform, offering cutting-edge VR/AR tools and
environments that elevate employee training and student outcomes. Trusted by
enterprise and educational clients worldwide, ENGAGE leverages the
transformative power of spatial computing to revolutionize onboarding, sales
meetings, product demos and a host of other vital business operations.
For further information, please visit: https://engagevr.io/
(https://engagevr.io/)
CHAIRMAN'S STATEMENT
This has been a year of significant challenge and transformation for Engage XR
as we navigated macroeconomic volatility and adapted to changes in enterprise
demand.
2024 Performance and Strategic Progress
Revenue declined by 8% to €3.4 million, with 2024 seeing continued reduction
in enterprise spending and renewals and reduced one-off event activity.
Furthermore, a significant contract was also expected to be finalised pre year
end in the Middle East which would have led to the Group's revenue target
being comfortably achieved but unfortunately this has been delayed into H2
FY25. While this delay resulted in the Group's headline revenue being behind
market expectations, the Group's EBITDA and Cash are broadly in-line for FY24.
While enterprise revenue declined due in part to post-pandemic workplace
shifts as more people returned to the office, we believe churn has stabilised.
However, the revenue decline masks a pivotal shift in the business mix.
Revenue from the education and corporate training sectors rose 60%, driven by
partnerships with institutions such as PWC in the Middle East and leading
private education organisations in the US and UK. This aligns with our
strategic pivot toward sectors offering sustainable, recurring revenues and
measurable ROI. Our presence in the Middle East and expanding AI-led education
offerings will drive revenue in the future.
Gross margin held firm at 86% (2023: 90%), and cost discipline reduced our
EBITDA loss slightly to €3.9 million (2023: €4.0m). We closed the year
with €3.6 million in cash and remain debt-free, giving us the flexibility to
invest in future growth.
Outlook and Board Confidence
During the first five months of the current financial year, the Company has
made solid progress in expanding its pipeline of opportunities in the Middle
East and in North America. However, it continues to be impacted by delays in
converting pipeline prospects into signed contracts. As a result, revenues in
the period were below the corresponding period in FY24. In response, the Board
has implemented measures to better align the Company's cost base with its
current revenue profile. These measures will ensure the Company has the cash
to ensure it can capitalise on the opportunities in progress.
We continue to develop opportunities through our strategic partnerships with
Lenovo, Meta and other key partners in the Education and Corporate Training
space, with contributions expected by year-end. The launch of our School of AI
initiative and forthcoming AI-based enterprise training tools reinforces our
position at the intersection of immersive technology and scalable learning.
The Board is confident that this focus will drive long-term, recurring revenue
growth and value creation.
Looking forwards, the Board continues to see significant growth opportunities
for the Group through working with partners in the Middle East throughout the
remainder of 2025 and beyond in both education and training verticals. The
Group's strong pipeline is evidence of the progress being made with partners
in the Middle East and in the USA. This pipeline gives the Board the continued
confidence in the market opportunity for the Group and delivering results that
benefit not just ENGAGE XR but also its partners and stakeholders. The key
focus for the Board is to capitalise on the strength of the pipeline by
converting more of its opportunities into contracts with the Board remaining
confident in its strategic objective to become cash flow breakeven which it
now expects to occur in FY26.
Board Governance and Acknowledgments
We were pleased to welcome Marc Metis to the Board as a Non-Executive Director
in May 2024. As permitted by the shareholder agreement, Marc joined the Board
as the representative of HTC which owns 11.96% of the total issued share
capital of ENGAGE XR. Marc replaced Praveen Gupta who retired from HTC. Marc
brings extensive global experience in immersive tech and strategic growth,
including leadership roles at HTC.
I joined the Board as the Group's new non-Executive Chairman on 1 July 2024,
replacing Richard Cooper, who had led the Board since the Group's IPO. Richard
remains on the board as Senior Independent Director, Chair of the Audit
Committee, and on the Remuneration Committee. Non-executive director, Kenny
Jacobs, replaced Richard as Chair of the Remuneration Committee.
I thank my fellow Directors for their guidance and the management team for
their resilience and execution. To our shareholders, thank you for your
continued confidence and support as we advance our vision for Engage XR.
Karthik Manimozhi
Non-Executive Chairman
3 June 2025
CHIEF EXECUTIVE'S REVIEW
Overview
2024 has been a challenging year. While revenue declined, our revenue mix
shows that our one-off project-based enterprise revenue streams were being
replaced by recurring educational sector license-based revenue streams. We
have signed up with several global resellers in partnership with Meta and
Lenovo to go head-to-head with the market leaders in the immersive hardware
and software education space.
ENGAGE was originally founded with a focus on the education sector and
operated under the name Immersive VR Education. The company rebranded during
the COVID lockdowns to better reflect the growing split between enterprise and
education revenue, as we saw increased demand from corporations supporting
remote teams. However, towards the end of 2023 and into the first half of
2024, I made the strategic decision to refocus the company on education and
training services. This was driven by consistently strong renewal rates in
that area, in contrast to declining demand in other segments of the business,
such as one-off event services and remote collaboration post pandemic.
This is a key reason we have partnered with Meta and Lenovo, who are working
together as a strategic collective, to sell Meta Quest 3 and 3S headsets into
the education and enterprise space, via resellers such as TD Synnex, SHI,
Insight, Mace Virtual Labs and others. Since the start of the year, we have
secured distribution agreements in preparation for the busy mid-summer to
mid-autumn educational buying season.
Middle East Growth
Last year, we announced a significant initial agreement with a major client in
the Middle East, secured through our partners at PwC. I'm proud to share that,
following some delays, we have successfully delivered the project creating a
fully immersive learning environment for professional students. Client
acceptance was received earlier this month, and we hope to see strong future
growth in licenses once results from the first student cohort are available.
Education Partners
During 2024, many of our key educational partners not only renewed their
agreements with us but a number also expanded their user bases. Two standout
partnerships delivered in the year were with Florida-based OptimaED and
UK-based InspiredED, both of which have renewed and increased their license
commitments.
Our partnership with OptimaED has shown significant growth, increasing its
licenses sixfold from 500 at the start of 2023 to over 3,000 licenses
currently, with plans to double again this year. OptimaED has developed over
200 educational modules on ENGAGE tailored to the United States curriculum.
While their primary focus has been the homeschool market, they have begun
expanding into traditional brick-and-mortar schools. This summer, ENGAGE and
OptimaED are teaming up to offer bundled pricing options for resellers.
The AI Effect
Over the past year, one of the most significant trends in the enterprise
landscape has been the rapid acceleration of AI adoption, particularly in
roles traditionally filled by human workers. This has been especially evident
across major tech companies we've historically supported through onboarding
and professional development services. As AI becomes more prevalent, the tech
industry has experienced widespread layoffs, directly affecting enterprise
investment in the XR space.
This shift has led to a decreased demand for ENGAGE XR's independent studio
development team, which had focused on delivering custom onboarding
experiences and enterprise events. In response, we've streamlined the team and
implemented a series of cost-saving measures across the organisation. At the
same time, we are integrating AI-driven processes to maintain consistent
service delivery.
While enterprise clients once relied heavily on us for content creation, most
of our educational partners now use the platform's built-in tools to develop
their own content. This is precisely the goal these tools were designed to
support. To scale effectively, it's essential to empower clients to become
self-sufficient. We are now reaching a pivotal point in this transition, as we
shift our focus toward Annual Recurring Revenue from license sales.
AI Integration in the Platform
Last year, we introduced the School of AI within the platform, an initiative
that enables students to engage with virtual representations of historical
figures and create personalised AI tutors. This feature has been well received
and is now being used by thousands of students daily. With the United States
government mandating AI education in schools, we see this as a major driver of
future sales. We are expanding our AI capabilities in collaboration with Meta,
integrating them into our broader reseller offerings.
Current trading and outlook
The first five months of the current financial year has seen the Company make
good progress in broadening its opportunities but with the company still being
impacted by delays in the pipeline converting into signed contracts. As
noted above, we have exciting opportunities in the education space, especially
in the Middle East but the delivery of revenues from these opportunities still
require work, from both the Company and our customers. The delivery of the
pipeline will prove crucial to the Company as the Board seeks to meet its
expectations for the year. The Board has taken measures to ensure that the
Company's cost base is more aligned to the current revenue profile of the
Group.
Conclusion
2024 was a challenging year for enterprise sales, however we still landed our
largest ever deal in the Middle East and renewed contracts with Bank of
America, KPMG, and PWC. We continue to work with several US based insurance
companies building out onboarding experiences for their clients.
The refocus on education and professional training has taken several months
and we expect progress in the sales pipeline throughout 2025 and 2026 as we
work closely with Meta, Lenovo and a host of global resellers who already have
a large potential client base to sell to.
David Whelan
Chief Executive Officer
3 June 2025
CHIEF FINANCIAL OFFICER'S REVIEW
Revenue was down 8% on the prior year from €3.7 million to €3.4 million,
driven by a delay in closing some significant contracts in the final quarter
of the year which are expected to close in 2025. ENGAGE platform revenue was
down 3% on the prior year from €3.3 million to €3.2 million.
ENGAGE revenue from education customers was €1.3 million up from €1.1
million in FY23. This was bolstered by significant growth of two long term
partners of the company, OptimaED in the USA and InspiredED in the United
Kingdom.
ENGAGE revenue from Professional Services declined to €0.7 million from
€1.1 million driven by a reduction in one off VR events supported by the
ENGAGE Event team while ENGAGE revenue from Enterprise customers increased
from €1.0 million to €1.2 million, bolstered by the significant
education/training related deal signed in partnership with PWC in Saudi Arabia
in early 2024.
ENGAGE revenue declined in the North American market with 35% of total ENGAGE
revenue being generated in North America (2023: 60%). This is due to a shift
in focus towards the Middle East where significant opportunities have appeared
which the Company is seeking to capitalise on. Revenue from the Middle East
was 28% of total ENGAGE revenue (2023: 0%).
EBITDA loss was €3.9 million compared to a loss of €4.0 million in the
prior year and loss before tax was €4.0 million compared to a loss in 2024
of €4.1 million. This reduced EBITDA loss is primarily driven by reductions
in headcount and a disciplined approach to cost control across the Group,
offsetting the reduction in revenue in the period.
Operating cashflows resulted in a net outflow of €4.3 million for the
period. Following recently undertaken cost reductions in Q2 2025, the
current run-rate of staff costs and other ongoing costs is expected to be
approximately €0.2 million per month for the remainder of 2025 into 2026.
At the balance sheet date, trade and other receivables were €1.8 million,
ahead of trade and other payables at €0.7 million. Trade receivables
represented an average of 57 debtor days (2023: 59 days).
The Group's cash position on 31 December 2024 was €3.6 million (2023: €7.9
million) with no debt.
Séamus Larrissey
Chief Financial Officer
3 June 2025
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
for the Year Ended 31 December 2024
Note 2024 2023
Continuing Operations € €
Revenue 3 3,397,251 3,690,697
Cost of Sales 5 (476,728) (379,640)
Gross Profit 2,920,523 3,311,057
Administrative Expenses 5 (7,104,692) (7,551,774)
Operating Loss (4,184,169) (4,240,717)
Finance Income 9 216,122 193,605
Finance Costs 8 (6,449) (6,966)
Loss before Income Tax (3,974,496) (4,054,078)
Income Tax credit 10 - -
Loss for the financial year (3,974,496) (4,054,078)
Other comprehensive income - -
Total comprehensive loss for the year attributable to owners of the parent (3,974,496) (4,054,078)
Earnings per Share (EPS) attributable to owners of the parent
Basic earnings per share 11 (0.008) (0.008)
Diluted earnings per share 11 (0.007) (0.008)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2024
Note 2024 2023
€ €
Non-Current Assets
Property, Plant & Equipment 12 56,417 123,728
Intangible Assets 13 - -
56,417 123,728
Current Assets
Trade and other receivables 15 1,786,684 1,195,333
Cash and short-term deposits 16 3,566,927 7,911,079
5,353,611 9,106,412
Total Assets 5,410,028 9,230,140
Equity and Liabilities
Equity Attributable to Shareholders
Issued share capital 17 524,826 524,826
Share premium 17 43,910,062 43,910,062
Other reserves 18 (12,128,790) (12,292,523)
Retained earnings 19 (27,589,226) (23,614,730)
Total Equity 4,716,872 8,527,635
Non-Current Liabilities
Lease liabilities 21 - 34,540
Current Liabilities
Trade and other payables 22 658,616 615,237
Lease liabilities 21 34,540 52,728
693,156 667,965
Total Liabilities 693,156 702,505
Total Equity and Liabilities 5,410,028 9,230,140
COMPANY STATEMENT OF FINANCIAL POSITION
at 31 December 2024
Note 2024 2023
€ €
Non-Current Assets
Investment in subsidiaries 14 3,635,844 12,366,593
3,635,844 12,366,593
Current Assets
Trade and other receivables 15 12,930 25,424
Cash and short-term deposits 16 3,226,157 5,791,641
3,239,087 5,817,065
Total Assets 6,874,931 18,183,658
Equity and Liabilities
Equity Attributable to Shareholders
Issued share capital 17 524,826 524,826
Share premium 17 43,910,062 43,910,062
Other reserves 18 (1,119,279) (1,246,172)
Retained earnings 19 (36,503,224) (25,081,249)
Total Equity 6,812,385 18,107,467
Current Liabilities
Trade and other payables 22 62,546 76,191
Total Liabilities 62,546 76,191
Total Equity and Liabilities 6,874,931 18,183,658
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the Year Ended 31 December 2024
Share Share Other Reserves Retained Total
Capital Premium Earnings
€ € € € €
Balance at 1 January 2023 290,451 33,503,300 (11,752,741) (19,560,652) 2,480,358
Total comprehensive income
Other comprehensive income - - - - -
Loss for the year - - - (4,054,078) (4,054,078)
Total comprehensive income 290,451 33,503,300 (11,752,741) (23,614,730) (1,573,720)
Transactions with owners
recognised directly in equity
New Shares Issued 234,375 10,406,762 - - 10,641,137
Share Issue Costs - - (601,362) - (601,362)
Share option expense - - 61,580 - 61,580
Balance at 31 December 2023 524,826 43,910,062 (12,292,523) (23,614,730) 8,527,635
Share Share Other Reserves Retained Total
Capital Premium Earnings
€ € € € €
Balance at 1 January 2024 524,826 43,910,062 (12,292,523) (23,614,730) 8,527,635
Total comprehensive income
Other comprehensive income - - - - -
Loss for the year - - - (3,974,496) (3,974,496)
Total comprehensive income 524,826 43,910,062 (12,292,523) (27,589,226) 4,553,139
Transactions with owners
recognised directly in equity
Share option expense - - 163,733 - 163,733
Balance at 31 December 2024 524,826 43,910,062 (12,128,790) (27,589,226) 4,716,872
COMPANY STATEMENT OF CHANGES IN EQUITY
for the Year Ended 31 December 2024
Share Share Other Reserves Retained Total
Capital Premium Earnings
€ € € € €
Balance at 1 January 2023 290,451 33,503,300 (691,272) (14,001,259) 19,101,220
Total comprehensive income
Other comprehensive income - - - - -
Loss for the year - - - (11,079,990) (11,079,990)
Total comprehensive income 290,451 33,503,300 (691,272) (25,081,249) 8,021,230
Transactions with owners
recognised directly in equity
New Shares Issued 234,375 10,406,762 - - 10,641,137
Share Issue Costs - - (601,362) - (601,362)
Share option expense - - 46,462 - 46,462
Balance at 31 December 2023 524,826 43,910,062 (1,246,172) (25,081,249) 18,107,467
Share Share Other Reserves Retained Total
Capital Premium Earnings
€ € € € €
Balance at 1 January 2024 524,826 43,910,062 (1,246,172) (25,081,249) 18,107,467
Total comprehensive income
Other comprehensive income - - - - -
Loss for the year - - - (11,421,975) (11,421,975)
Total comprehensive income 524,826 43,910,062 (1,246,172) (36,503,224) 6,685,492
Transactions with owners
recognised directly in equity
Share option expense - - 126,893 - 126,893
Balance at 31 December 2024 524,826 43,910,062 (1,119,279) (36,503,224) 6,812,385
CONSOLIDATED STATEMENT OF CASH FLOWS
for the Year Ended 31 December 2024
Note 2024 2023
Continuing Operations € €
Loss before income tax (3,974,496) (4,054,078)
Adjustments to reconcile loss before tax to net cash flows:
Depreciation of fixed assets 5 91,398 106,179
Amortisation of intangible assets 5 - 39,492
Finance Costs 8 6,449 6,966
Finance Income 9 (216,122) (193,605)
Share Option Expense 163,733 61,579
Movement in trade & other receivables (591,351) 170,649
Movement in trade & other payables 43,379 (607,251)
(4,477,010) (4,470,069)
Bank interest received 216,122 193,605
Bank interest & other charges paid (6,449) (6,966)
Net Cash used in Operating Activities (4,267,337) (4,283,430)
Cash Flows from Investing Activities
Purchases of property, plant & equipment 12 (24,087) (17,465)
Net cash used in investing activities (24,087) (17,465)
Cash Flows from Financing Activities
Proceeds from issuance of ordinary shares - 10,039,775
Payment of lease liabilities 21 (52,728) (36,970)
Net cash generated from / (used in) financing activities (52,728) 10,002,805
Net increase / (decrease) in cash and cash equivalents (4,344,152) 5,701,910
Cash and cash equivalents at beginning of year 16 7,911,079 2,209,169
Cash and cash equivalents at end of year 16 3,566,927 7,911,079
COMPANY STATEMENT OF CASH FLOWS
for the Year Ended 31 December 2024
Note 2024 2023
Continuing Operations € €
Loss before income tax (11,421,975) (11,079,990)
Adjustments to reconcile loss before tax to net cash flows:
Finance Costs 722 792
Finance Income (212,386) (192,971)
Share Option Expense 126,893 46,463
Impairment of Investment in Subsidiaries 10,698,215 10,157,911
Movement in trade & other receivables 12,494 (21,932)
Movement in trade & other payables (13,645) (77,354)
(809,682) (1,167,081)
Bank interest received 212,386 192,971
Bank interest & other charges paid (722) (792)
Net cash used in Operating Activities (598,018) (974,902)
Cash Flows from Investing Activities
Capital contribution (1,967,466) (3,759,402)
Net cash (used) / generated in investing activities (1,967,466) (3,759,402)
Cash Flows from Financing Activities
Proceeds from issuance of ordinary shares - 10,039,775
Net cash generated from financing activities - 10,039,775
Net increase / (decrease) in cash and cash equivalents (2,565,484) 5,305,471
Cash and cash equivalents at beginning of year 16 5,791,641 486,170
Cash and cash equivalents at end of year 16 3,226,157 5,791,641
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
ENGAGE XR Holdings plc ("the Company") is publicly traded on the Alternative
Investment Market ("AIM") of the London Stock Exchange. 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 was previously known as VR Education
Holdings plc.
The Company is the parent company of ENGAGE XR Limited, previously known as
Immersive VR Education Limited. ENGAGE XR Limited is incorporated and
domiciled in the Republic of Ireland with the same registered office as the
Company.
The Company is also the parent company of ENGAGE XR LLC. ENGAGE XR LLC is
incorporated and domiciled in USA with a registered office of 251 Little Falls
Drive, Wilmington, Delaware, 19808-1674, USA.
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. The consolidated
Financial Statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union issued
by the International Accounting Standards Board ("IASB") including related
interpretations issued by the International Financial Reporting
Interpretations Committee ("IFRIC").
Basis of Consolidation
The consolidated financial statements incorporate those of ENGAGE XR Holdings
plc and its subsidiaries ENGAGE XR Limited and ENGAGE XR LLC.
All financial statements are made up to 31 December 2024. 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 ENGAGE XR Limited
The Company entered into an agreement to acquire the entire issued share
capital of ENGAGE XR Limited on 12 March 2018. The acquisition was effected by
way of issue of shares. Due to the relative size of the companies, ENGAGE XR'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 ENGAGE XR 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 to 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.
Judgements
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.
Going Concern
The financial statements have been prepared on a going concern basis which
assumes that the group will continue in operational existence for at least one
year from the date of approval of these financial statements.
At 31 December 2024 the group had a loss for the year of €3,974,496 and at
that date net assets amounted to €4,716,872.
The group's ability to continue as a going concern is dependent on its ability
to trade profitably in the future.
In forming this opinion, the Directors have considered all the information
available to them. This includes management prepared forecasts, cost saving
exercises, finalisation of significant contracts, due consideration of the
ability to raise funds on the open market in respect of the listing on the
Alternative Investment Market on the London Stock Exchange and the timing as
to when such funds will be received.
However, the Directors acknowledge that, in the current climate, assumptions
used in financial forecasting are highly dependent on unpredictable future
events.
Throughout 2025 the Group has continued to work on several significant
opportunities in both the Middle East and North America. However, the timing
for concluding these deals remains uncertain.
As a result of this uncertainty, during May 2025, the Group undertook a
restructuring which resulted in a reduction in the size of the team. Together
with other costs being eliminated this has resulted in significant savings for
the Group. With these cost savings we expect that the Group has sufficient
funding for at least 12 months from the date of signing the financial
statements and until one or more of the significant opportunities close which
will further bolster the cash position of the Group.
However, notwithstanding the foregoing, the directors believe that the above
circumstances still represent significant challenges and uncertainties which
may cast doubt on the company and group's ability to continue as a going
concern and therefore it may be unable to realise its assets
and discharge its liabilities in the normal course of business for a period of
at least one year from the date of the approval of these financial statements.
However, the Board remain optimistic that all actions that have been and
continue to be taken will mitigate against these uncertainties.
While the directors believe that it is appropriate for the financial
statements to be prepared on the going concern basis, the financial statements
do not include any adjustments that would result from a situation where the
company failed to achieve the projected financial results.
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 (€), 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:
ENGAGE Revenue
The Group is primarily focused on developing a proprietary VR platform which
is sold through licences and professional services revenue. This is considered
"ENGAGE Revenue" for reporting purposes. Revenue is recognised when the
license is delivered to the customer, or when all performance obligations have
been achieved.
Showcase Experiences
The Group also develops 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.
Other Revenue
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 in relation to Showcase Experiences are amortised over their estimated
useful lives based on the pattern of consumption of the underlying economic
benefits. The ENGAGE platform is amortised on a straight line basis over 3
years. Amortisation is included in Administrative Expenses.
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.
Capital Contributions
A capital contribution represents irrevocable, non-repayable amounts
contributed from connected parties. Capital contributions are accounted for as
a contribution when they are approved, through the profit and loss account
reserve.
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.
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 recognised as a credit against related
costs on a cash receipts basis.
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial Assets
Initial Recognition and Measurement
In accordance with IFRS9, 'Financial Instruments' the Group has classified its
financial assets as 'Financial assets at amortised cost'. The Group determines
the classification of its financial assets at initial recognition. All
financial assets are recognised initially at fair value plus, in the case of
assets not at fair value through the Statement of Comprehensive Income,
transaction costs that are attributable to the acquisition of the financial
asset and expected credit losses based on historical collection experience of
similar assets.
Subsequent Measurement
The subsequent measurement of financial assets depends on their classification
as described below:
Financial Assets Carried at Amortised Cost
This category applies to trade and other receivables due from customers in the
normal course of business. All amounts which are not interest bearing are
stated at their recoverable amount, being invoice value less provision for any
expected credit losses. These assets are held at amortised cost. The group
classifies its financial assets as at amortised cost only if both of the
following criteria are met:
I. the asset is held within a business model with the objective of
collecting the contractual cash flows; and
II. the contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal outstanding.
Financial assets at amortised cost comprise current trade and other
receivables due from customers in the normal course of business and cash and
cash equivalents. The Group does not hold any material financial assets at
fair value through other comprehensive income or at fair value through the
Statement of Comprehensive Income. The Group does not hold any derivatives and
does not undertake any hedging activities.
Trade receivables are initially recognised at their transaction price. The
group does not expect to have any contracts where the period between the
transfer of the promised goods or services to the customer and payment by the
customer exceeds one year. As a consequence, the group does not adjust any of
the transaction prices for the time value of money. Other financial assets are
recognised initially at fair value plus transaction costs that are directly
attributable to the acquisition of the financial asset. Trade and other
receivables are subsequently measured at amortised cost less provision for
expected credit losses.
Impairment of Financial Assets
The Group assesses on a forward looking basis the expected credit losses
associated with its financial assets measured at amortised cost. The Group
applies the simplified approach to providing for expected credit losses
prescribed by IFRS 9, which permits the use of the lifetime expected loss
provision for all trade receivables. To measure the expected credit losses,
trade receivables have been grouped based on shared credit risk
characteristics and the days past due. For other financial assets at amortised
cost, the Group determines whether there has been a significant increase in
credit risk since initial recognition. The Group recognises twelve month
expected credit losses if there has not been a significant increase in credit
risk and lifetime expected credit losses if there has been a significant
increase in credit risk.
Expected credit losses incorporate forward looking information, take into
account the time value of money when there is a significant financing
component and are based on days past due; the external credit ratings of its
customers; and significant changes in the expected performance and behaviour
of the borrower.
Financial assets are written off when there is no reasonable expectation of
recovery. Where receivables have been written off, the Group continues to
engage in enforcement activity to attempt to recover the receivable due. Where
recoveries are made, these are recognised in the Statement of Comprehensive
Income.
Financial Liabilities
Initial Recognition and Measurement
All financial liabilities are recognised initially at fair value net of
directly attributable transaction costs.
The Group's financial liabilities include trade and other payables.
After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate
method (EIR). Gains and losses are recognised in the Statement of
Comprehensive Income when the liabilities are derecognised as well as through
the (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in finance costs in the Statement of Comprehensive
Income. This category generally applies to interest-bearing loans and
borrowings.
Derecognition of Financial Assets and Liabilities
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is derecognised when: (1) The rights
to receive cash flows from the asset have expired, or (2) The Group has
transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a
third party under a 'pass-through' arrangement, and either (a) the Group has
transferred substantially all the risks and rewards of the asset, or (b) the
Group has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the assets.
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the Statement of Comprehensive
Income.
New Standards, amendments, and interpretations not adopted by the group
The group did not adopt any new standards, amendments or interpretations in
year as they did not have a material impact on the financial statements.
New standards, amendments, and interpretations issued but not effective for
the period ended 31 December 2024, and not early adopted
There are several amendments to IFRS Accounting Standards that became
applicable from 1 January 2024:
- Classification of Liabilities as Current or Non-current and
Non-current liabilities with covenants - Amendments to IAS1;
- Lease Liability in a Sale and Leaseback - Amendments to IFRS 16;
- Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7.
None of these is expected to have a significant effect on the financial
statements of the Group or Parent Company.
3. Segment Reporting
2024 2023
Revenue by Type € €
ENGAGE revenue
Education License Revenue 1,256,165 1,165,294
Enterprise License Revenue 1,202,819 1,007,204
Professional Services Revenue 735,228 1,133,483
Total ENGAGE Revenue 3,194,212 3,305,981
Showcase experience revenue 203,039 324,924
Other revenue - 59,792
Total Revenue 3,397,251 3,690,697
Education License Revenue is comprised of license revenue derived from
customers with an education focus.
Enterprise License Revenue is comprised of licence revenue derived from
customers with an enterprise focus.
Professional Services Revenue includes revenue from custom development work
performed by the ENGAGE Studio team and also revenue generated from one off VR
events.
Showcase Experience Revenue includes revenue from the sale of our showcase
experiences including Apollo 11 VR, Titanic VR and Shuttle Commander on the
Oculus, Steam and PlayStation Stores.
Other Revenue includes revenue from VR installations within museums.
Total revenue recognised in the reporting period from performance obligations
satisfied (or partially satisfied) in previous periods was €432,029 (2023:
€446,103)
4. Capital Management
For the purpose of the Company's capital management, capital includes issued
capital, share premium and all other equity reserves. The primary objective of
the Group's capital management is to maximise the shareholder value.
Group 2024 2023
€ €
Lease liabilities (34,540) (87,268)
Trade and other payables (658,616) (615,237)
Less: cash and short-term deposits 3,566,927 7,911,079
Net Funds 2,873,771 7,208,574
Equity 4,716,872 8,527,635
Total Equity 4,716,872 8,527,635
Capital and net funds 7,590,643 15,736,209
5. a. Expenses by nature
2024 2023
€ €
Depreciation charges 91,398 106,179
Amortisation expense - 39,492
Operating Lease Payments 15,926 26,848
Foreign Exchange Loss / (Gain) (153,556) 103,229
Staff Costs 5,066,103 5,272,155
Contractor Costs 1,128,931 1,250,703
Research & Development Tax Credit Received - (435,954)
Other Expenses 1,432,618 1,568,762
Total cost of sales and administrative expenses 7,581,420 7,931,414
Disclosed as:
Cost of sales 476,728 379,640
Administrative expenses 7,104,692 7,551,774
Total cost of sales and administrative expenses 7,581,420 7,931,414
The aggregate amount of research and development expenditure recognised as an
expense within cost of sales and administrative expenses was €2,041,049
(2023: €1,583,220)
b. Auditor Remuneration
Services provided by the Company's auditor
During the year, the Company obtained the following services from the
Company's auditor:
2024 2023
€ €
Fees payable to the Company's auditor for the audit of the financial
statements
53,000 51,000
6. Employees
Employee Benefit Expense 2024 2023
€ €
Wages and salaries 4,425,136 4,690,144
Social security costs 409,515 458,064
Defined contribution pension costs 67,719 62,368
Share option expense 163,733 61,579
Total Employee Benefit Expense 5,066,103 5,272,155
Average Number of People Employed 2024 2023
Average number of people (including executive Directors)
employed:
Operations 48 53
Administration 4 4
Sales, Marketing and Customer Support 6 10
Total Average Headcount 58 67
7. Directors remuneration
Below is the Directors' remuneration for the Year Ended 31 December 2024 and
for the year ended 31 December 2023
31 December 2024
Salaries and fees Pension benefits Options / Warrants issued Total
Group
€ € € €
Executive Directors
David Whelan 215,250 4,641 52,038 271,929
Sandra Whelan 167,750 4,594 52,038 224,382
Séamus Larrissey 162,250 6,563 12,809 181,622
Non-executive Directors
Richard Cooper 97,711 - - 97,711
Kenny Jacobs 28,500 - - 28,500
Karthik Manimozhi 83,868 - 10,007 93,875
Marc Metis - - - -
755,329 15,798 126,892 898,019
31 December 2023
Salaries and fees Pension benefits Options / Warrants issued Total
Group
€ € € €
Executive Directors
David Whelan 235,875 6,445 20,686 263,006
Sandra Whelan 183,792 5,870 20,686 210,348
Séamus Larrissey 157,750 6,380 5,092 169,222
Non-executive Directors
Richard Cooper 90,981 - - 90,981
Praveen Gupta - - - -
Kenny Jacobs 29,688 - - 29,688
698,086 18,695 46,464 763,245
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 20.
8. Finance Costs
2024 2023
€ €
Interest expense:
- Lease interest 3,950 4,305
- Bank charges 2,499 2,661
Total finance costs 6,449 6,966
9. Finance Income
2024 2023
€ €
Bank Interest Received 216,122 193,605
Total finance income 216,122 193,605
10. Income Tax
2024 2023
€ €
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:
2024 2023
€ €
Loss Before Tax (3,974,496) (4,054,078)
Tax calculated at domestic tax rates applicable to loss in
Ireland of 12.5% (496,812) (506,760)
Tax effects of:
- Depreciation in excess of capital allowances 5,595 7,166
- Expenses not deductible for tax purposes 65,779 (52,917)
- Tax losses for which no deferred tax asset was recognised 425,438 552,511
Total tax - -
11. Earnings per share (EPS)
2024 2023
Loss attributable to equity holders of the Group: € €
Continuing Operations (3,974,496) (4,054,078)
Weighted average number of shares for Basic EPS 524,826,146 484,149,493
Effects of dilution from share options and warrants 43,241,898 19,404,283
Weighted average number of ordinary shares adjusted for the effect of dilution 568,068,044 503,553,776
Basic loss per share from continuing operations (0.008) (0.008)
Diluted loss per share from continuing operations (0.007) (0.008)
12. Property, Plant & Equipment
Fixtures,
Leasehold fittings and equipment Office Right of use
Group improvements Equipment assets Total
€ € € € €
Cost of Valuation
At 1 January 2023 20,341 7,025 369,040 156,031 552,437
Additions - - 17,465 116,357 133,822
Disposals - - - (145,702) (145,702)
At 31 December 2023 20,341 7,025 386,505 126,686 540,557
Additions - - 24,087 - 24,087
At 31 December 2024 20,341 7,025 410,592 126,686 564,644
Depreciation
At 1 January 2023 20,341 7,025 280,838 148,148 456,352
Charge (note 5) - - 69,207 36,972 106,179
Disposals - - - (145,702) (145,702)
At 31 December 2023 20,341 7,025 350,045 39,418 416,829
Charge (note 5) - - 38,670 52,728 91,398
At 31 December 2024 20,341 7,025 388,715 92,146 508,227
Net Book Amount
At 31 December 2023 - - 36,460 87,268 123,728
At 31 December 2024 - - 21,877 34,540 56,417
Depreciation expense of €91,398 (2023: €106,179) has been charged in
'Administrative Expenses'.
Right of use asset relates to properties and vehicles
held under lease.
13. Intangible Assets
Software in development costs
Group Total
€ €
Cost
At 31 December 2023 and 31 December 2024 2,136,231 2,136,231
Amortisation
At 31 December 2023 and 31 December 2024 2,136,231 2,136,231
Net Book Value
At 31 December 2023 and 31 December 2024 - -
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 launched during 2020 and amortisation commenced during the period.
An impairment review was carried out at the balance sheet date. No impairment
arose.
14. Investments in Subsidiaries
Company €
At 1 January 2023 18,765,102
Capital contributions 3,759,402
Impairment Adjustment (10,157,911)
At 31 December 2023 12,366,593
Capital contributions 1,967,466
Impairment Adjustment (10,698,215)
At 31 December 2024 3,635,844
Investments in subsidiaries are recorded at cost, which is the fair value of
the consideration paid.
On 12 March 2018, the Company acquired all of the issued capital of ENGAGE XR
Limited for a consideration of €15,000,000 which was settled by issuing
133,089,739 Ordinary Shares in the Company. The Company incurred expenses
totalling €28,809 as part of the transaction.
On 31 December 2021 the Company resolved to enter into a capital contribution
agreement with ENGAGE XR Limited to facilitate the funding of the wholly owned
subsidiary. An amount of €1,967,466 was forwarded (2023: €3,759,402) to
ENGAGE XR Limited to the Company during 2024. A repayment arises if ENGAGE XR
Limited holds excess funds in a particular currency that is required by ENGAGE
XR Holdings PLC to meet its liabilities as they fall due.
On 14 July 2022 the Company acquired all of the issued share capital of ENGAGE
XR LLC for a consideration of $100,000.
The Board have recognised an impairment adjustment of €10,698,215 (2023:
€10,157,911) in the current year to reflect the market capitalisation of the
group at 31 December 2024.
Country of incorporation and residence Proportion of equity shares held by the company
Name Nature of business
Virtual Reality Technology
ENGAGE XR Limited Ireland 100%
Virtual Reality Technology
ENGAGE XR LLC USA 100%
This subsidiary undertakings are included in the consolidation. The proportion
of the voting rights in the subsidiary undertakings held directly by the
Parent Company does not differ from the proportion of ordinary shares held.
15. Trade and Other Receivables
Current Group Company
2024 2023 2024 2023
€ € € €
Trade receivables 531,100 591,665 - -
Less: provision for impairment of receivables - - - -
Trade receivables - net 531,100 591,665 - -
Prepayments 197,089 156,820 12,494 24,603
Accrued income 1,045,282 432,029 - -
Other debtors 937 3,100 - -
VAT 12,276 11,719 436 821
1,786,684 1,195,333 12,930 25,424
As at 31 December 2024, trade receivables of €531,100 (2023: €591,665)
were fully performing and deemed fully recoverable. No bad debt provision
charge was incurred during 2024 (2023: €Nil).
The Group assesses exposure to credit risk arising from outstanding
receivables on an annual basis. The maximum exposure to credit risk at the
reporting date is the carrying value of each of the receivables above. The
Group does not consider the credit risk of any receivable has increased post
recognition.
The Group does not expect any losses from outstanding receivables in the
current year.
The carrying amounts of the Company's trade and other receivables are
denominated in the following currencies:
Group Company
2024 2023 2024 2023
€ € € €
Euro - Neither past due nor impaired 110,205 186,075 - -
Pound Sterling - Neither past due nor impaired 41,793 - - -
Dollar - Neither past due nor impaired 379,102 405,590 - -
531,100 591,665 - -
16. Cash and short-term deposits
Group Company
2024 2023 2024 2023
€ € € €
Cash at bank and on hand 3,566,927 7,911,079 3,226,157 5,791,641
3,566,927 7,911,079 3,226,157 5,791,641
17. Issued Share Capital and Premium
Number of shares Ordinary shares Share premium Total
€ € €
At 1 January 2024 and at 31 December 2024 524,826,146 524,826 43,910,062 44,434,888
As at 31 December 2024 the number of shares authorised for issue were
524,826,146 (2023: 524,826,146). The par value of the shares authorised for
issue were €0.001 each (2023: €0.001 each).
18. Other Reserves
Group Company
€ €
At 1 January 2023 (11,752,741) (691,272)
Share issue costs (601,362) (601,362)
Share option expense 61,580 46,462
At 31 December 2023 (12,292,523) (1,246,172)
At 1 January 2024 (12,292,523) (1,246,172)
Share option expense 163,733 126,893
At 31 December 2024 12,128,790 1,119,279
19. Retained Earnings
Group Company
€ €
At 1 January 2023 (19,560,652) (14,001,259)
Loss for the year (4,054,078) (11,079,990)
At 31 December 2023 (23,614,730) (25,081,249)
At 1 January 2024 (23,614,730) (25,081,249)
Loss for the year (3,974,496) (11,421,975)
At 31 December 2024 (27,589,226) (36,503,224)
Capital contributions represent irrevocable, non-repayable amounts contributed
from connected parties.
20. Share Based Payments
Following the successful completion of the equity placing in 2023, the
Remuneration Committee evaluated appropriate solutions to put in place
suitable longer-term incentives aimed at aligning the interests of employees
and shareholders. The option grant was also to assist with the retention and
motivation of key employees of the Company as the Company looks to deliver
against the strategic opportunity outlined at the time of the placing. The
Options provided the potential for rewards only if shareholders benefit from
sustained growth in shareholder value over the coming years.
New Scheme
Under this new option grant there were 2,700,000 (2023: 38,493,393) employee
options granted during 2024 at an exercise price of €0.046 per share.
The Options were granted at a price of GBP£0.04 each (€0.046) and cannot be
exercised for at least three years from the date of grant (other than on a
change of control).
The Options have performance criteria linked to the future share price
performance of the Company with:
- One third of the Options being capable of exercise if the five day
volume-weighted average price preceding the date of such exercise was 12 pence
or higher; and
- One third of the Options being capable of exercise if the five day
volume-weighted average price preceding the date of such exercise was 16 pence
or higher; and
- One third of the Options being capable of exercise if the five day
volume-weighted average price preceding the date of such exercise was 20 pence
or higher.
The Options will vest in full on a change of control provided a minimum price
threshold of 10 pence per share is met. 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.
The movement in employee share options under the new option grant and weighted
average exercise prices are as follows for the reporting periods presented:
2024 2023
At 1 January 38,493,393 -
Granted during period 2,700,000 38,493,393
Exercised during period - -
Forfeited during period (290,000) -
At 31 December 40,903,393 38,493,393
Options outstanding at 31 December
Number of shares 40,903,393 38,493,393
Weighted average remaining contractual life 5.65 6.59
Weighted average exercise price per share €0.046 €0.046
Range of exercise price €0.046 €0.046
Exercisable at 31 December
Number of shares - -
Weighted average exercise price per share - -
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 Monte Carlo valuation model.
Employee Non-Executive
Director
Number of options 200,000 2,500,000
Grant date 1 January 1 July
Vesting period 3 years 3 years
Share price at date of grant €0.024 €0.015
Exercise price €0.046 €0.046
Option life 7 years 7 years
Dividend yield 0% 0%
Staff Retention Rate 90% 90%
Risk free investment rate 4.47% 4.47%
Fair value per option at grant date €0.0235 €0.0235
Weighted average remaining contractual life in years 6.01 6.50
The expected life is based on historical data and current expectations and is
not necessarily indicative of exercise patterns that may occur. The expected
volatility reflects the assumptions that the historical volatility over a
period similar to the life of the options is indicative of future trends,
which may not necessarily be the actual outcome.
Old Scheme
No new options were granted in 2024 under the old scheme (2023: Nil).
The existing options from the old scheme 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.
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 using the Black Scholes valuation
model.
The movement in employee share options and weighted average exercise prices
are as follows for the reporting periods presented:
2024 2023
At 1 January 3,585,080 4,404,127
Granted during period - -
Exercised during period - -
Forfeited during period - (819,047)
At 31 December 3,585,080 3,585,080
Options outstanding at 31 December
Number of shares 3,585,080 3,585,080
Weighted average remaining contractual life 0.35 1.63
Weighted average exercise price per share €0.022 €0.022
Range of exercise price €0.0001 - €0.135 €0.0001 - €0.135
Exercisable at 31 December
Number of shares 3,585,080 3,585,080
Weighted average exercise price per share €0.022 €0.022
The total expense recognised in respect of all employee share-based payments
and credited to the share-based payment reserve in equity was €163,733
(2023: €61,579).
21. Leases
Amounts recognised in the Statement Of Financial Position
The Statement Of Financial Position shows the following amounts relating to
leases:
Group Company
Right of Use Assets 2024 2023 2024 2023
€ € € €
Buildings 20,913 62,741 - -
Vehicles 13,627 24,527 - -
34,540 87,268 - -
Group Company
Lease Liabilities 2024 2023 2024 2023
€ € € €
Current 34,540 52,728 - -
Non-current - 34,540 - -
34,540 87,268 - -
Amounts recognised in the Consolidated Statement Of Total Comprehensive Income
The Consolidated Statement Of Total Comprehensive Income shows the following
amounts relating to leases:
Depreciation charge of right-of-use assets 2024 2023
€ €
Buildings 41,828 20,914
Vehicles 10,900 16,058
52,728 36,972
Interest expense (included in finance cost) 3,950 4,305
22. Trade and Other Payables
Group Company
2024 2023 2024 2023
€ € € €
Trade Payables 107,454 113,622 6,960 5,107
Amounts Due to Related Parties - - - -
PAYE/PRSI 106,700 133,622 12,482 25,850
VAT - - - -
Deferred Income 152,060 115,902 - -
Accrued Expenses 292,402 252,091 43,104 45,234
658,616 615,237 62,546 76,191
Terms and conditions of the above financial
liabilities:
· Trade payables are non-interest bearing and are normally settled on
30-day terms
· Amounts Due to Related Parties are non-interest bearing and are
settled over varying terms throughout the year
· 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
· Deferred income is non-interest bearing and are settled over varying
terms throughout the year
· 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 €2,924,257 (2023: €2,525,356) in respect of losses and depreciation in
excess of capital allowances amounting to €23,394,055 (2023: €20,202,845)
that can be carried forward against future taxable income.
24. Related Parties
During the year the Directors received the following emoluments:
Group Company
2024 2023 2024 2023
Directors € € € €
Aggregate emoluments 771,127 716,781 771,127 716,781
Share option expense 126,893 46,463 126,893 46,463
898,020 763,244 898,020 763,244
Included in the above is an amount of €97,711 (2023: €90,981) 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 2024 €Nil
was outstanding.
25. Capital Management
The capital of the company is managed as part of the capital of the group as a
whole. Full details, are contained in note 4 to the consolidated financial
statements.
26. Events after the reporting date
The Company has evaluated all events and transactions that occurred after 31
December 2024 up to the date of signing of the financial statements.
No material subsequent events have occurred that would require adjustment to
or disclosure in the financial statements.
27. Contingent Liabilities
The company has indicated that it will guarantee the liabilities (as defined
in Section 397 of the
Companies Act 2014) of €590,915 (2023: €681,023) its Irish subsidiary,
ENGAGE XR Limited for the Year Ended 31 December 2024.
28. Ultimate controlling party
The Directors believe that there is no ultimate controlling party as no one
shareholder has control of the Company.
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