REG - Engage XR Holdings - Unaudited Interim Results
19/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240919:nRSS7622Ea&default-theme=true
RNS Number : 7622E Engage XR Holdings PLC 19 September 2024
19 September 2024
ENGAGE XR Holdings Plc
("ENGAGE XR", the "Company", or the "Group")
Unaudited Interim Results
ENGAGE XR Holdings Plc, a leading Metaverse / Spatial Computing technology
company, is pleased to announce its unaudited interim results for the six
months ended 30 June 2024.
Financial Highlights:
· Revenue of c.€2.2 million, up 5% (H1 2023: €2.1 million) with
€0.8m of contracted revenue due to be recognised in the second half
· In addition, as at 30 June 2024 the Group had €0.8m of contracted
revenue that is due to be recognised in the latter part of the current
financial year
· ENGAGE revenue of c.€2.1 million, up 11% (H1 2023: €1.9m)
· Gross margin in H1 2024 down 4% to 89% (H1 2023: 93%), due to one-off
hardware purchases for a key customer in early 2024
· EBITDA loss was €1.8m (H1 2023: loss of €2.2m)
· Loss before tax was €1.8m, in line with management's expectations,
compared to a loss in H1 2023 of €2.2m
· Cash balance at 30 June 2024 of €5.5m (31 December 2023: €7.9m)
Operational Highlights:
· ENGAGE's total licensed Education and Enterprise users grew to
approximately 18,000 users (31 December 2023: c.15,000)
· The Group signed a seven-figure contract with a large Middle
East-based company Working in partnership with PWC Middle East, ENGAGE XR is
developing a private MetaWorld to deliver language learning programmes and
professional development.
· The Group agreed six-figure contracts with Bank of America, and world
leading private educational provider InspiredED
(https://www.inspirededu.com/news/inspired-education-expands-virtual-reality-and-metaverse-pilot)
, to extend existing relationships
· In March 2024, the Group announced the launch of the "School of AI" a
new offering that creates an immersive learning environment, in which students
can speak to notable figures of history, powered by AI. School of AI is
expected to roll out in September
Post-period end Highlight:
· Karthik Manimozhi became the Group's non-Executive Chairman from 1
July 2024
Outlook
· The Group signed a six figure renewal with Optima Ed, a US based
Education organisation with a 400% increase in license numbers
· Release of AI Bot Builder and School of AI driving pipeline growth
and a key focus for new and renewing customers.
· The Company continues to see positive engagement with potential
customers with a strong pipeline of opportunities, particularly in North
America and the Middle East;
· The Company remains focused on deepening its relationships with its
platform partners such as Meta.
David Whelan, CEO of ENGAGE XR, said: "ENGAGE XR has delivered a resilient
performance in the first half, despite a continued reduction in global
spending on remote events and immersive marketing, post-lockdown. We have made
good progress within the Corporate Learning & Development sectors,
validated by new deals with Bank of America, and a large Middle Eastern
enterprise, via PwC, to develop a private MetaWorld for them.
"With the additional contracted revenue yet to be recognised and the strength
of the pipeline, the Board remains confident about delivering against its
expectations for the year. Looking further ahead, as platform partners, such
as Meta and Lenovo, look to build recurring revenues in the education,
training and development sectors, we are confident that ENGAGE XR is in a
prime position to capitalise on this nascent, but growing market."
Investor Meet Company Presentation
CEO David Whelan and CFO Séamus Larrissey will provide a live presentation
relating to the Group's interim results via the Investor Meet Company platform
on 19 September 2024 at 09:00am (BST).
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
9:00am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet ENGAGE
XR Holdings Plc via:
https://www.investormeetcompany.com/engage-xr-holdings-plc/register-investor
(https://www.investormeetcompany.com/engage-xr-holdings-plc/register-investor)
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
- Ends -
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
finnCap Ltd (Nominated Adviser & Broker) Tel: +44 (0) 20 7220 0500
Marc Milmo / Seamus Fricker / (Corporate finance)
Sunila de Silva (ECM)
SEC Newgate (Financial Communications) Tel: +44 (0)7540 106 366
Robin Tozer / Tom Carnegie / Naz Zandi engage@secnewgate.co.uk
About ENGAGE XR
ENGAGE XR Holdings plc (AIM: EXR) is a leading Metaverse / Spatial Computing
technology company focused on becoming a leading global provider of virtual
communications solutions through its new fully featured corporate metaverse,
ENGAGE Link. A demonstration can be viewed here: ENGAGE The Spatial Computing
Platform for Enterprise (https://youtu.be/2OHtimtFY3M?si=qe-lcxvau1sPjbk8)
The Company also has a proprietary software platform, ENGAGE. ENGAGE provides
users with a platform for creating, sharing, and delivering VR content for
education, training, and online events through its three solutions: Virtual
Campus, Virtual Office, and Virtual Events.
For further information, please visit: www.engagexrholdings.com (LinkedIn:
@Engage XR Holdings plc Twitter: @engage_xr)
Chief Executive's Review
Overview
Our progress in the first half of 2024 resulted from more traction within the
corporate education, training and development sectors. This continues the
trend we saw in 2023, with these sectors being the primary sources of growth.
Notably, we signed a seven-figure contract with a major Middle Eastern
enterprise in the corporate education, training, and development sector.
Working alongside PwC Middle East, we are developing a private MetaWorld for
the enterprise to support language learning and professional development.
Furthermore, we expanded our relationship with Bank of America, securing an
additional six-figure contract that builds on our 2023 agreement, and
reinforces our partnership. The additional work using the ENGAGE platform
focuses on employee onboarding and continued platform development (further
details here
(https://www.linkedin.com/feed/update/urn:li:activity:7219964038972145664/) )
We also extended our collaboration with InspiredED, a leading global education
provider, with a new mid-six-figure contract for education licenses to a
portion of their 80,000 students worldwide. This represents a ten-fold
increase in contracted revenue with InspiredEd, highlighting the scalability
of our platform and the growing demand for immersive learning solutions in the
global education sector.
In the period, ENGAGE's total licensed Education and Enterprise users grew to
approximately 18,000 users (31 December 2023: c.15,000)
Product Development
In March 2024, we launched the "School of AI" to a select group of educational
clients. ENGAGE XR's educational clients include the Kentucky Department of
Education, Optima Domi, and Lobaki.
This innovative product leverages conversational and generative AI to create
immersive environments where students can interact with historical figures in
authentic historic locations, such as Marie Curie's lab or the Hall of
Independence with Benjamin Franklin.
School of AI will be available on all leading VR/AR devices, PCs, Phones and
Tablets, with 12 AI-powered characters, including Neil Armstrong, Rosa Parks,
and Nikola Tesla, available on release, with more arriving later this year.
A full roll-out is scheduled later this month, further strengthening our
educational offering. (more details here (https://engagevr.io/school-of-ai/)
)
Board & Committee Changes
In a notable post-period development, we welcomed Karthik Manimozhi as the
Group's new non-Executive Chairman, effective from 1 July 2024. Karthik is a
distinguished global executive renowned for orchestrating three separate
billion-dollar exits, securing over $250M in capital, and scaling
multi-billion-dollar SAAS software revenues. A proven rainmaker, he has
demonstrated exceptional skill in scaling tech ventures, driving innovation,
and fostering collaboration. His appointment marks a significant step forward
for the company as we continue to scale.
As Chair, Karthik replaces Richard Cooper, who had headed the Board since the
Group's IPO. Richard remains on the board as Senior Independent Director,
Chair of the Audit Committee and a member of the Remuneration
Committee. Alongside his role as Chair of the ENGAGE XR Board, Karthik is
also Chair of the Company's Nominations Committee, alongside Richard Cooper
and Marc Metis. 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 served as non-Executive director from 6 July 2020 to 8 December
2023, until he retired from HTC.
Furthermore, Kenny Jacobs, Non-executive director, replaced Richard as Chair
of the Remuneration Committee.
Following the appointment of both Karthik and Marc, the ENGAGE XR board
comprises seven directors, of which Karthik Manimozhi, Richard Cooper and
Kenny Jacobs are considered to be independent.
Outlook
Looking ahead, despite a cautious environment as enterprises reduce spending
on immersive marketing post-lockdown, I am confident in our ability to
continue delivering value in the Corporate Learning & Development sector.
Our recent successes with Bank of America and the Middle Eastern enterprise
highlight our strong market position.
With our platform partners such as Meta and Lenovo expanding their focus on
recurring revenue in education, training, and development, ENGAGE XR is
well-positioned to take advantage of the growing demand for immersive learning
solutions.
With a strong pipeline within North America and the Middle East, I remain
optimistic about the future, and confident in our ability to meet our goals
for the year.
David Whelan
Chief Executive Officer
19 September 2024
Financial Review
Revenue for the half year is up 5% on the prior half year to €2.2m (H1 2023:
€2.1m), driven by a continued acceleration in revenue from the ENGAGE
platform.
ENGAGE revenue as a percentage of total revenue grew significantly in the
period and comprised 95% of total revenue in the period (H1 2023: 91%).
ENGAGE revenue from Education customers grew in the period to €0.8 million
(H1 2023: €0.4m) driven by significant renewals in the period and new
customer wins primarily in North America and UK.
ENGAGE revenue from Enterprise grew in the period to €0.9 million (H1 2023:
€0.6m) driven predominantly by the large contract in the Middle East and
continued traction with our customers in North America. A further €0.8
million of contracted Enterprise revenue was recorded in the period which is
expected to be recognised in the latter part of the current financial year.
ENGAGE revenue from Content and Events fell to €0.4m (H1 2023: €0.9m) in
line with management expectations as the Group's focus was centred on renewing
license revenue from Enterprise and Education customers.
EBITDA loss was €1.8m (H1 2023: loss of €2.1m). The primary cost driver
for the EBITDA loss is salary and associated costs, currently approximately
€0.5m per month.
Gross margin in H1 2024 down 4% to 89% (H1 2023: 93%), due to one-off hardware
purchases for a key customer.
Loss before tax was €1.8m, in line with management expectations, compared to
a loss in the prior year of €2.2m.
The combination of operating cashflows and capital expenditure in H1 2024 were
€2.3m compared to €2.8m in H1 2023. The cash balance at 30 June 2023 was
€5.5m (30 June 2023: €9.4m). The management team are fully focused on
managing the cash position of the Group and remain very cost conscious as the
Group focuses on delivering cash flow profitability in the future.
Séamus Larrissey
Chief Financial Officer
19 September 2024
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2024
Unaudited Unaudited
Six months Six months
ended ended
Note 30 June 2023 30 June 2023
€ €
Continuing Operations
Revenue 2,206,780 2,075,015
Cost of Sales (251,643) (139,080)
Gross Profit 1,955,137 1,935,935
Administrative Expenses (3,894,365) (4,149,813)
Operating Loss (1,939,228) (2,213,878)
Finance Costs (1,779) (876)
Finance Income 125,461 27,112
Loss before Income Tax (1,815,546) (2,187,642)
Income Tax Credit - -
Loss for the Year from continuing operations (1,815,546) (2,187,642)
Loss per share
Basic from continuing operations 4 (0.003) (0.005)
Consolidated Statement of Financial Position
As at 30 June 2024
Unaudited Unaudited Audited
as at as at as at
30 June 2023 30 June 2023 31 Dec 2023
Note € € €
Non-Current Assets
Property, Plant & Equipment 100,630 103,976 123,728
Intangible Assets 2 - 12,298 -
100,630 116,274 123,728
Current Assets
Trade and other receivables 1,744,012 1,444,904 1,195,333
Cash and short-term deposit 5,524,869 9,446,893 7,911,079
7,268,881 10,891,797 9,106,412
Total Assets 7,369,511 11,008,071 9,230,140
Equity and Liabilities
Equity Attributable to Shareholders
Issued share capital 5 524,826 524,826 524,826
Share premium 5 43,910,062 43,910,062 43,910,062
Other reserves (12,219,118) (12,346,163) (12,292,523)
Retained earnings (25,430,276) (21,748,294) (23,614,730)
Total Equity 6,785,494 10,340,431 8,527,635
Non-Current Liabilities
Operating lease liabilities 8,176 19,076 34,540
Current Liabilities
Trade and other payables 523,113 634,080 615,237
Operating lease liabilities 52,728 14,484 52,728
575,841 648,564 667,965
Total Liabilities 584,017 667,640 702,505
Total Equity and Liabilities 7,369,511 11,008,071 9,230,140
Consolidated Statement of Changes in Equity
At 30 June 2024
Attributable to Equity Shareholders
Share Share Other Retained
Capital Premium Reserves Earnings Total
€ € € € €
Balance at 1 January 2023 290,451 33,503,300 (11,752,741) (19,560,652) 2,480,358
Loss for the period - - - (2,187,642) (2,187,642)
Issue of ordinary shares 234,375 10,406,762 - - 10,641,137
Issue costs - - (601,361) - (601,361)
Share option expense - - 7,939 - 7,939
Balance at 30 June 2023 524,826 43,910,062 (12,346,163) (21,748,294) 10,340,431
Share Share Other Retained
Capital Premium Reserves Earnings Total
€ € € € €
Balance at 1 January 2024 524,826 43,910,062 (12,292,523) (23,614,730) 8,527,635
Loss for the period - - - (1,815,546) (1,815,546)
Share option expense - - 73,405 - 73,405
Balance at 30 June 2024 524,826 43,910,062 (12,219,118) (25,430,276) 6,785,494
Consolidated Statement of Cash Flows
For six month period ended 30 June 2024
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2024 2023
Note € €
Cash Flows from Operating Activities
Loss before income tax (1,815,546) (2,187,642)
Adjustments to reconcile loss before tax to net cash flows:
Depreciation 44,894 40,246
Amortisation - 27,194
Finance Income (125,461) (27,112)
Finance Costs 1,779 876
Share Option Expense 73,406 7,939
Movement in Trade & Other Receivables (548,679) (78,922)
Movement in Trade & Other Payables (92,124) (588,408)
(2,461,731) (2,805,829)
Bank interest & other charges paid (1,779) (876)
Bank interest received 125,461 27,112
Net cash used in operating activities (2,338,049) (2,779,593)
Cash Flows from Investing Activities
Purchases of property, plant & equipment (21,795) (15,435)
Net cash used in investing activities (21,795) (15,435)
Cash Flows from Financing Activities
Proceeds from issuance of ordinary shares 5 - 10,039,778
Payment of operating lease liabilities (26,366) (7,026)
Net cash (used)/generated from financing activities (26,366) 10,032,752
Net (decrease)/increase in cash and cash equivalents (2,386,210) 7,237,724
Cash and cash equivalents at beginning of period 7,911,079 2,209,169
Cash and cash equivalents at the end of period 5,524,869 9,446,893
Notes to the Interim Report
1. Basis of Preparation
The consolidated interim financial statements have been prepared in accordance
with the recognition and measurement principles of International Financial
Reporting Standards as endorsed by the European Union ("IFRS") and expected to
be effective at the year-end of 31 December 2024.
The accounting policies are unchanged from the financial statements for the
year ended 31 December 2023. The interim financial statements are unaudited
and do not constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31 December
2023, prepared in accordance with IFRS, have been filed with the Companies
Registration Office. The Auditors' Report on these accounts was unqualified.
The consolidated interim financial statements are for the 6 months to 30 June
2024.
The interim consolidated financial information does not include all the
information and disclosures required in the annual financial statements and
should be read in conjunction with the Group's annual financial statements for
the year ended 31 December 2023, which were prepared in accordance with IFRS's
as adopted by the European Union.
2. Summary of Significant Accounting Policies
New standards, interpretations and amendments adopted by the Company
No new standards or amendments have been adopted for the first time in these
financial statements.
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 Company are recognised as intangible
assets when the following criteria are met:
- it is technically feasible to complete the software
product so that it will be available for use and sale;
- management intends to complete the software product and
use or sell it;
- there is an ability to use or sell the software product;
- it can be demonstrated how the software product will
generate future economic
benefits;
- adequate technical, financial, and other resources to
complete the development and use or
- sell the software product are available; and
- the expenditure attributable to the software product
during its development can be reliably
- measured.
Directly attributable costs that are capitalised as part of the software
product include the software development employee costs and subcontracted
development costs.
Other development expenditure that does not meet these criteria is recognised
as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an
asset in a subsequent period.
Computer software development costs recognised as assets are amortised over
their estimated useful lives, which do not exceed 3 years and commences after
the development is complete and the asset is available for use. Intangible
assets are amortised over their estimated useful lives based on the pattern of
consumption of the underlying economic benefits. Amortisation is included in
'Administrative Expenses'.
2. Intangible Assets
Software
in development
Costs Total
€ €
Cost or Valuation
At 1 January 2024 2,136,231 2,136,231
Additions - -
At 30 June 2024 2,136,231 2,136,231
Amortisation
At 1 January 2024 2,123,933 2,123,933
Charge - -
At 30 June 2024 2,123,933 2,123,933
At 30 June 2024 - -
At 31 December 2023 - -
Software
in development
Costs Total
€ €
Cost or Valuation
At 1 January 2023 2,136,231 2,136,231
Additions - -
At 30 June 2023 2,136,231 2,136,231
Amortisation
At 1 January 2023 2,096,739 2,096,739
Charge 27,194 27,194
At 30 June 2023 2,123,933 2,123,933
At 30 June 2023 12,298 12,298
At 31 December 2022 39,492 39,492
The software being developed relates to the creation of three 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.
Amortisation expense of €Nil (H1 2022: €27,194) has been charged in
'Administrative Expenses'.
3. Share Based Payments
Share-based payment schemes with employees
Following the successful completion of the equity placing in H1 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 also assists 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 will provide 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 38,493,393 employee options granted
during H2 2023 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:
2023 Scheme
Half-Year Half-Year
2024 2023
At 1 January 38,493,393 -
Granted during period 200,000 -
Forfeited during period (250,000) -
At 30 June 38,443,393 -
Options outstanding at 30 June
Number of shares 38,443,393 -
Weighted average remaining contractual life 6.10 -
Weighted average exercise price per share €0.046 -
Range of exercise price €0.046 -
Exercisable at 30 June
Number of shares - -
Weighted average exercise price per share - -
Old Scheme
There were no employee options granted under the old scheme during H1 2024 (H1
2023: Nil). Options expire at the end of a period of 7 years from the Grant
Date or on the date on which the option holder ceases to be an employee.
Share-based payment expense with Directors
There were no share options granted during H1 2024 (H1 2023: Nil) to
Directors.
The movement in employee share options and weighted average exercise prices
are as follows for the reporting periods presented:
2018 Scheme
Half-Year Half-Year
2024 2023
At 1 January 3,585,080 4,404,127
Granted during period - -
Forfeited during period - (248,148)
At 30 June 3,585,080 4,155,979
Options outstanding at 30 June
Number of shares 3,585,080 4,155,979
Weighted average remaining contractual life 0.85 1.10
Weighted average exercise price per share €0.022 €0.041
Range of exercise price €0.0001 - €0.135 €0.0001 - €0.20
Exercisable at 30 June
Number of shares 3,585,080 2,670,265
Weighted average exercise price per share €0.022 €0.029
The expense recognised in respect of employee share based payment expense and
credited to the share based payment reserve in equity was €73,405 (H1 2023:
€7,939)
4. Loss per share
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2024 2023
Loss attributable to equity holders of the Group: € €
Continuing Operations (1,815,546) (2,187,642)
Weighted average number of shares for Basic EPS 524,826,146 446,584,479
Basic loss per share from continuing operations (0.003) (0.005)
5. Share Capital
Number of shares Ordinary Share Total
shares premium
€ € €
At 1 January 2024 and 30 June 2024 524,826,146 524,826 43,910,062 44,434,888
Forward-Looking Statements
Certain statements made in this announcement are forward-looking statements.
These forward-looking statements are not historical facts but rather are based
on the Company's current expectations, estimates, and projections about its
industry; its beliefs; and assumptions. Words such as 'anticipates,'
'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties, and other factors, some of which are beyond
the Company's control, are difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements.
The Company cautions security holders and prospective security holders not to
place undue reliance on these forward-looking statements, which reflect the
view of the Company only as of the date of this announcement. The
forward-looking statements made in this announcement relate only to events as
of the date on which the statements are made. The Company will not undertake
any obligation to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or unanticipated
events occurring after the date of this announcement except as required by law
or by any appropriate regulatory authority.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR SFFFMAELSEEURecent news on ENGAGE XR Holdings
See all newsRCS - Engage XR Holdings - ASU+GSV Summit, Launch of Titanic VR & ENGAGE 4.0
AnnouncementRCS - Engage XR Holdings - ENGAGE XR attending Leap 2025 with PwC Middle East
AnnouncementRCS - Engage XR Holdings - Launch of Education Offering at Bett 2025
AnnouncementREG - Engage XR Holdings - Pre-Close Trading Update
AnnouncementRCS - Engage XR Holdings - Update on School of AI
Announcement