TIDMICON
RNS Number : 8922R
Iconic Labs PLC
31 October 2019
31 October 2019
Iconic Labs Plc ("Iconic Labs" or the "Company")
Preliminary Results
Iconic Labs (LSE:ICON), a multi-divisional new media and
technology business, is pleased to announce its unaudited
preliminary results for the 18 month period ending 30 June 2019. A
copy of the full report will be available on the Company's website
www.iconiclabs.co.uk/investor-relations.
Chairman's Statement:
I am pleased to report these report and accounts which cover the
eighteen-month period to 30 June 2019, during which profound change
has occurred at the Company. The new team lead by John Quinlan has
spent significant energy in cleaning up liabilities attached to
Widecells Group Plc, the previous operational business, and
securing a platform from which to implement the new strategy of
building a multi-divisional new media and technology business.
The previous business
The Company was originally founded to pursue an opportunity
relating to stem cell storage and evolved into planning to promote
an insurance product related to the stem cell activity. It never
achieved any commercial traction, with total revenues for the
period of just GBP21,000, set against administrative expenses for
the discontinued business of GBP5,801,450 together with substantial
accrued liabilities.
Clearly this was unsustainable, and even with the convertible
secured debenture facility that they entered into with the European
High Growth Opportunities Securitization Fund ('EHGOSF'), and which
we inherited, it is hard to see how the business could have
survived. As if that were not bad enough, the actual number for
administrative expenses could have been much higher as prior to
taking control, we negotiated with many large creditors to
substantially reduce liabilities.
On taking control, we made available a modest sum to the
existing team to see if they could gain traction on revenues, but
after a short period they communicated that they were not confident
about taking that business forward and so we took the decision to
shut it down to focus entirely on the new media strategy.
The bulk of the legacy liabilities have now been paid off, with
some remaining debts being settled on a termed basis. These amount
to approximately GBP400,000 as at the date of this letter. Without
the work of the team and the funding that was put in place to deal
with these debts there would inevitably have been a catastrophic
loss for both shareholders and creditors.
New business and management team
As part of the plan, the board put in place a new team to
develop a multi divisional new media and technology business within
the Company. The team have an excellent background, having been
instrumental in building UNILAD into the largest social media
publisher in the world, all on the back of just two hundred pounds
of share capital.
Unfortunately, for the first months the team had to spend more
time dealing with unexpected legacy issues and liabilities, which
have impacted the implementation of the new strategy. However, I
believe over the last few months we have begun to see traction for
the services and execution of the model. The acquisition of Gay
Star News, a top three UK LGBTI publisher and the management
agreement with The Tab, the UK's leading youth and student culture
focussed publisher, have played a major part in this, and the team
continues to seek out publishers and platforms to work with or even
acquire.
Capital Structure
We are very aware that the capital structure of the Company is a
source of frustration to shareholders, albeit the convertible
facility with EHGOSF is one that we inherited. Our aim as a board
is to move the Company towards a conventional, simplified capital
structure with no convertible or other facilities. While we need to
keep all options open while we resolve the final parts of the
legacy issues and the overhang of securities held by EHGOSF, we are
confident that once through these final issues, we will be in a
position to finance the growth of the Company from conventional
debt and equity issuance if needed.
Outlook
We have a team in place that has a track record of building
social media focussed businesses. The implementation of the
strategy has been slower than we anticipated, and we have been
constrained by capital being diverted to legacy issues. However, I
believe we have turned the corner and we ask that shareholders bear
with us while we complete the final parts of the transition and
move the Company to where we and you want to go, that being a
leading profitable new media and technology business.
David Sefton
Chairman
31 October 2019
Chief Executive's Statement
Dear Shareholder
Our plans and strategy remain to build a leading new media and
technology division and we are now beginning to see real progress.
The restructuring and ultimately winding down of the legacy stem
cell and insurance operations took more of our focus over the last
months than we had originally planned, but with this process now
close to completion, I am delighted that the team are now able to
focus on the new media and technology business that is Iconic
Labs.
Our plan for the business has two related elements: organic
growth based upon deploying the team's skills and commercial
experience in the sector alongside acquiring publishing platforms
which we can leverage to sell those skills. As such, the critical
first steps have been to acquire control (whether through a
management contract or outright acquisition) of strategic
publishing platforms.
The first of these has been through the acquisition of leading
LGBTI publisher Gay Star News ('GSN'), and we have also agreed
heads of terms for the acquisition of social media agency Social
Alchemist Limited. Finally, we have entered into an agreement with
Medium Channel Media Limited ("MCM") a media focussed investment
company, to provide management services to The Tab, the largest
social media publisher in the student market.
The acquisition of GSN is the first part of Iconic Labs'
strategy to build critical mass and in particular expand its
proprietary targeted distribution channels that the Company can
utilise under the Iconic Labs brand offering. This strategy of
acquiring digital brands and audiences will help contribute
revenues in the short and medium term but also build capital value
in the long term through the further development of these brands
and the revenue potential they bring.
We believe GSN represents excellent value at GBP33,000 having
generated revenues of over GBP500,000 last year. After careful due
diligence we concluded that it is possible to achieve the similar
levels of revenue but with a fraction of the historical cost base.
We are currently working hard at relaunching GSN and this will
immediately allow us to generate revenue from on-site digital
advertising. However, we believe the greater revenue long term will
come from combining the access to the GSN audience and data with
the consulting services that the central Iconic Labs team offer;
importantly we have already booked revenues in excess of the
purchase price.
We see the GSN acquisition as representing a model for many
future acquisitions. Buying established digital brands which have
substantial revenue potential and then using our skills, experience
and contacts to increase the Company's profitability and grow its
long-term value as a brand while also crucially contributing to the
central Iconic Labs business.
Our progress on organic revenue generation logically trails the
work on publishing platforms but we are fully focused on business
development. We are now seeing success in developing a pipeline and
beginning to close on a variety of revenue contracts. The contract
with MCM is due to be worth a minimum of GBP25,000 a month as soon
as they conclude their acquisition of The Tab and we are looking
forward to closing more contracts in Q4 which is traditionally a
busy and profitable period for the industry.
While there has been no formal launch or trade PR around Iconic
Labs, we have already had significant interest and a pipeline of
opportunities for a variety of contracts that we are looking to
close and execute. The current pipeline and interest give us
confidence that our strategy and offering of creative fee-based
services to potential clients is the right one. As previously
announced, we have negotiated a marketing consultancy engagement
with a Fintech company on a long-term retainer basis, and although
this has yet to be formally signed, we believe that this model will
become increasingly in demand across the industry.
I believe the future looks positive as we execute our plans and
focus on building a pipeline of organic revenues as well as making
good value acquisitions and investments. The media and advertising
industries are in a state of flux and the opportunities for a
disruptive new business like ours that combines owning valuable
audiences with being able to offer a unique product suite and
content creation to clients puts us in a great position for the
future.
Overall, we are seeing some real signs of progress on both the
revenue generation and acquisition parts of the business and we are
looking forward to building on this in the future.
John Quinlan
Chief Executive
31 October 2019
Strategic Report:
Introduction
Iconic Labs PLC is a company domiciled in England. The Company
was incorporated on 24 May 2016 and this is the third set of
financial statements prepared by the Company. The Company has
raised from a variety of means in the past, including a number of
equity placings and debt facilities.
During this financial year the company has evolved from a stem
cell and insurance company called Widecells Group PLC into a media
and technology company, and has been renamed Iconic Labs PLC.
Change in Business Model
The business model for the Company has changed dramatically from
the original Widecells business to the new Iconic labs business.
The original Widecells company was founded to pursue an opportunity
relating to stem cell storage and evolved into planning to promote
an insurance product related to the stem cell activity. This has
now been shut down and the business discontinued.
The new Iconic Labs is a media and technology business focused
on providing online marketing, content and technology driven
products. The Company plans to create complimentary divisions that
will allow it to provide a broad-based, all-encompassing offering
allowing clients to build their online branding and awareness,
generate significant revenues as well as building its own brand
platforms and products that have long term capital value.
Principal Activities and Business Review
The Market Opportunity
The directors believe that years of sustained technological
innovation across the globe has fundamentally changed consumer
buying habits; the way they interact with each other; and the way
they consume content. This sets the scene for fundamentally changed
market, not only for content producers and publishers; commerce and
advertisers; but for all.
This change has been driven by, and capitalised upon, by key
technological companies, primarily focused on online advertising
and other internet related services, software and hardware but have
a much wider reaching impact on our everyday lives. Google,
Facebook, Amazon, Apple, Microsoft, Samsung, Snapchat, Netflix
& Tencent are the notable companies in the space, and will be
for the foreseeable future, with entire business ecosystems reliant
on their services and key influence and impact in policy and
regulation at the highest level.
Digital Publishing
The demand for online content and entertainment services is
increasing with people spending more time online and consuming more
content than ever before. Social media usage across the UK
continues to increase, alongside overall internet use which has
doubled in the last 10 years from 12 hours a week in 2007 to 24
hours a week in 2017. Despite a sizeable and staunch audiences, it
is clear traditional content creators have failed to adapt to the
technological changes and effectively monetise on digital
distribution channels and platforms. Social Media platforms such as
Facebook & Twitter have transformed the way content in
particular news is discovered, disseminated, and digested. In this
new era a key component in building an engaged audience and
effectively monetising it, is understanding and navigating the
ever-changing social media landscape.
Advertising
As audiences continue to shift online, so too does advertising
revenue, as the WARC Expenditure report states, "at GBP13.4 billion
in 2018, it now accounts for 57% of the UK's total advertising
expenditure of GBP23.6 billion." Behind search, the largest slice
of online advertising is display advertising, and an increasing
amount is spent on social media, with spend on social platforms
increasing more than three-fold from GBP861m in 2015 to GBP3
billion in 2018.
Current Business Strategy
The directors believe that there is a significant opportunity in
the publishing and advertising market because of technological and
structural changes. The directors feel a staged roll-out of
complementary divisions that work together and as standalone
propositions will allow the Company to take advantage of a number
of industry trends with the scale to service the biggest clients
but also the flexibility to work with a variety of partners in the
industry.
The directors believe the planned structure of Iconic labs is an
example of a new operating model of that will be desirable to
partners and clients, and critical to establishing a successful
modern media company.
Current Business
Online Media Brands and Complimentary Agency and Consultancy
Services
The Consultancy and Agency:
The first phase of the Company's strategy has been launching the
agency and consultancy offering. This has already been soft
launched to some clients and has achieved a promising
reception.
This is a product based on the teams unique expertise and
experience that is in high demand in the industry that involves a
consulting approach to advise clients on their businesses but also
with the agency capabilities to actually deliver campaigns and
creative services in line with a client's needs.
Monthly Insights
Data analysis enables the brand to have a better understanding
of what was working on their own digital and social channels whilst
also being prepared to react to their competitors' content
Content Creation & Distribution
Work closely with insights to produce content that can be
distributed across various social channels
Post Campaign Analysis
Analysis to establish sentiment & content performance to
ensure insightful, creative and efficient future campaigns
Combining with Online Media Brands
This is a powerful offering in its own right but we believe that
its effectiveness and demand is multiplied many times by being used
in conjunction with the ownership and access to established online
media brands and their access to consumer data, talent and
audience.
The ability to offer potential clients and partners unique
access to audience, data and insights with the backing and
credibility of an established and trusted brand is a unique selling
point to brands and the company believes this will be best way of
establishing a strong client base and selling numerous products and
services.
Future Growth and Potential Roll Up Opportunity
The directors believe that a result of this model of pairing an
online media brand with a consultancy offering the company will
need to be selective in which brands and markets the Company looks
to target and have strict criteria for any growth in this area.
The Company is targeting established brands in high growth
markets that complement the skill and experience of its team. While
these involve the development of new brands in areas in line but
will be predominantly based around a 'roll up' of available brands
in the sector. The desire to own and operate established brands is
a crucial part of the reasoning behind a 'roll up'.
Additional Business Divisions:
The directors are confident in achieving success with the first
parts of the business and then will look to add in additional
business divisions and revenue streams over time:
-- E commerce - Work in collaboration with online media brands
division and utilise the feedback loops to inform production and
sale of consumer products
-- Content Studio - Create original video formats that are
piloted on social media and further developed for viewing on TV and
platforms such as Netflix
-- Content Licensing - License User Generated Content ('UGC')
created by users who have posted it to social media and resell
brands, & production houses internationally
-- Tech Product Development - Use insights gained from owned and
operated media audiences to drive development of innovative &
forward-thinking products
Key strengths of Team and Strategy:
Team:
The Directors believe the biggest strength of the Company is the
team. They have a unique set of skills, experience and contacts,
having established UNILAD in 2014 and developing it into the
world's largest social media publisher. UNILAD showed year-on-year
annual revenue growth in excess of 100% with revenues reaching more
than GBP10 million and the Directors believe the team can help
Iconic Labs grow substantial revenues.
Strategy:
-- To compete effectively in a competitive advertising space
achieving some consolidation of similar businesses and scale is
very important:
-- This allows the company to be of a size and offer enough
relevant services that it becomes a viable proposition in terms of
its ability to deliver for larger brands with significant
budgets.
-- Opportunity for cross and up selling to the different
business units with client portfolios and pipelines
-- Cost synergies across all the businesses with an ability to centralise finance, tech,
-- Increased efficiency and effectiveness with shared access to
single tech, data and insights platform
-- Legacy Issues
Legacy Issues:
Upon taking control, a modest sum of funding was made available
to the existing Widecells team to see if they could get some
traction on revenues. However, after a short period of time they
communicated that they were not confident about taking the business
forward and so we shut it down.
There were significant legacy issues, some of which were not
known to the new management upon taking control of the business. An
audit of the true creditor position of the company was taken and an
assessment made of how to restructure the company's debts and its
subsidiaries. The Company has received legal and professional
advice at every stage is fully confident that it is in control of
the liabilities and any processes required to manage them.
The management negotiated with creditors, some of whom were
former directors and secured legally binding settlement agreements
to substantially reduce the debt position of PLC.
There were some debts, such as to HMRC, the pensions regulator
and the LSE that the company has paid or plans to pay in full.
There are still around GBP400k of legacy debts that the Company is
in the final stage of discharging in accordance with agreed payment
plans.
There were and are a number of subsidiaries that had incurred
significant debts. The Company has taken substantial legal and
professional advice and is confident it is not responsible for
these debts and does not intend to pay them.
Status of Subsidiaries:
-- Widecells Brazil - Dissolved April 2018
-- Widecells Limited - Has entered liquidation process; Antony
Batty and Co appointed liquidator
-- WideAcademy - Dormant
-- Widecells Espana - Dormant
-- Widecells Portugal - Directors are absent but are responsible
for producing accounts. Company is working to produce these in
their absence.
-- Cellplan International LDA - Directors are absent but are
responsible for producing accounts. Company is working to produce
these in their absence.
-- Cellplan Limited - Shareholder of Cellplan International LDA. Dormant
-- Widecells International Limited - Dormant
Key Performance Indicators:
Given the change of business in the period the historic KPIs are
no longer relevant as they form part of the Widecells business and
are will not be brought forward from the prior year. The new Iconic
labs business is at an early stage of development and will be
focused on the areas of cash management and operating results.
The board is focused on increasing revenues and increasingly
getting towards profitability over time, so these will be key
operating performance indicators in the future.
Financial Review:
Financial Review of Widecells Group PLC
The Widecells Group PLC business has been discontinued and the
group had administrative expenses of GBP5,801,450 and a total loss
for the period ending June 30 2019 of GBP5,809,942.
Financial review of Ionic Labs
On March 18th 2019 a new media and technology division of the
business called Iconic Labs was formed and which became the main
division of the business.
The administration expenses of Iconic Labs were GBP303,902 till
the end of the period. These costs are related to cleaning up to
time of management and team in restructuring old business as well
as the launch of the new media and technology business.
Iconic Labs had yet to record any revenue by the end of the
period and the total loss was GBP307,952.
Notes Period Period ended
ended 30 June
30 June 2019
2019 Discontinuing
Continuing GBP
GBP
Revenue - 21,081
Administrative expenses 5 (303,902) (5,801,450)
------------ ---------------
Loss from operating activities (303,902) (5,780,369)
Finance
income 7 - 2,174
Finance
costs 7 (4,050) (31,747)
------------ ---------------
Loss before taxation (307,952) (5,809,942)
Taxation 8 - -
------------ ---------------
Loss for the period (307,952) (5,809,942)
Exchange translation on - -
foreign operations
Total comprehensive loss
for the period (307,952) (5,809,942)
============ ===============
The results for 2017 relate entirely to discontinued
operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODED 30 JUNE 2019
Notes Period Period ended Period Year ended
ended 30 June ended 31 December
30 June 2019 30 June 2017
2019 Discontinuing 2019 GBP
Continuing GBP Total
GBP GBP
Revenue - 21,081 21,081 50,765
Administrative expenses 5 (303,902) (5,801,450) (6,105,352) (2,840,228)
------------ ---------------
Loss from operating activities (303,902) (5,780,369) (6,084,271) (2,789,463)
Finance
income 7 - 2,174 2,174 -
Finance
costs 7 (4,050) (31,747) (35,797) (17,264)
------------ --------------- ------------ -------------
Loss before taxation (307,952) (5,809,942) (6,117,894) (2,806,727)
Taxation 8 - - - (2,126)
------------ --------------- ------------ -------------
Loss for the period (307,952) (5,809,942) (6,117,894) (2,808,853)
Exchange translation on
foreign operations - - - (32,798)
Total comprehensive loss
for the period (307,952) (5,809,942) (6,117,894) (2,841,651)
============ =============== ============ =============
Loss per ordinary share
Basic and diluted 9 - (0.02) (0.02) (0.05)
============ =============== ============ =============
The results for 2017 relate entirely to discontinued operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
30 June 31 December
2019 2017
Notes GBP GBP
Non-current assets
Property, plant and equipment 10 7,093 466,591
Intangible assets 11 - 139,106
7,093 605,697
------------- ------------
Current assets
Stock 13 - 27,850
Trade and other receivables 14 - 9,551
VAT recoverable 14 15,922 173,703
Cash and cash equivalents 15 15,597 615,219
------------- ------------
31,519 826,323
------------- ------------
Total assets 38,612 1,432,020
============= ============
Equity
Share capital 19 3,498,257 162,053
Share premium 20 5,124,900 3,460,854
Merger reserve 20 - (185,728)
Translation reserve 20 - (32,798)
Share-based payment reserve 20 - 331,975
Retained deficit 20 (10,297,770) (4,305,132)
------------- ------------
(1,674,613) (568,776)
Non-current liabilities
Loans and borrowings 17 11,141 207,551
------------- ------------
11,141 207,551
------------- ------------
Current liabilities
Trade and other payables 16 1,633,806 935,536
Loans and borrowings 17 68,278 857,709
1,702,084 1,793,245
------------- ------------
Total liabilities 1,713,225 2,000,796
------------- ------------
Total equity and liabilities 38,612 1,432,020
============= ============
.............................................
John Quinlan
Director
31 October 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2019
Share-
based
Share Share Merger Translation payment Retained Total
capital premium reserve reserve reserve deficit Equity
GBP GBP GBP GBP GBP GBP GBP
Balance at 31
December 2016 135,145 2,159,000 (185,728) - 211,513 (1,496,279) 823,651
------------ ------------ ------------ -------------- ---------- -------------- --------------
Loss for the
period - - - - - (2,808,853) (2,808,853)
Foreign
exchange
translation - - - (32,798) - - (32,798)
------------ ------------ ------------ -------------- ---------- -------------- --------------
Total
comprehensive
loss for the
period - - - (32,798) - (2,808,853) (2,841,651)
------------ ------------ ------------ -------------- ---------- -------------- --------------
Transactions
with
owners:
Share-based
payment
charges - - - - 120,462 - 120,462
Issue of shares 26,908 1,371,789 - - - - 1,398,697
Costs of
placings - (69,935) - - - - (69,935)
------------ ------------ ------------ -------------- ---------- -------------- --------------
Total
contribution
by and
distribution
to owners 26,908 1,301,854 - - 120,462 - 1,449,224
------------ ------------ ------------ -------------- ---------- -------------- --------------
Balance at 31
December 2017 162,053 3,460,854 (185,728) (32,798) 331,975 (4,305,132) (568,776)
------------ ------------ ------------ -------------- ---------- -------------- --------------
Loss for the
period - - - - - (6,117,894) (6,117,894)
Foreign
exchange - - - - - - -
translation
------------ ------------ ------------ -------------- ---------- -------------- --------------
Total
comprehensive
loss for the
period - - - - - (6,117,894) (6,117,894)
------------ ------------ ------------ -------------- ---------- -------------- --------------
Transactions
with
owners:
Share-based
payment
charges - - - - 11,807 - 11,807
Issue of shares 3,336,204 1,894,621 - - - - 5,230,825
Costs of
placings - (230,575) - - - - (230,575)
------------ ------------ ------------ -------------- ---------- -------------- --------------
Total
contribution
by and
distribution
to owners 3,336,204 1,664,046 - - 11,807 - 5,012,057
------------ ------------ ------------ -------------- ---------- -------------- --------------
Transfer
between
reserves - - 185,728 32,798 (343,782) 125,256 -
Balance at 30
June 2019 3,498,257 5,124,900 - - - (10,297,770) (1,674,613)
============ ============ ============ ============== ========== ============== ==============
The currency translation reserve comprises all foreign currency
adjustments arising from the translation of the financial
statements of the foreign operation. During the year, the Board
decided that a number of the reserves related to historic balances
which are no longer relevant given the changes in the group during
the period. The merger reserve, translation reserve and share-based
payment reserve have been transferred to retained deficit during
the period.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODED 30 JUNE 2019
Period
ended Year ended
30 June 31 December
2019 2017
Notes GBP GBP
Cash flows from operating activities
Total comprehensive loss for
the period (6,117,894) (2,808,853)
Depreciation and amortisation 5 417 113,191
Impairment of assets 5 629,616 -
Share-based payment charge 22 11,807 120,462
Net interest expense 7 33,623 17,264
(5,442,431) (2,557,936)
Decrease/(Increase) in stock 27,850 (24,963)
Decrease/(Increase) in trade
and other receivables 167,333 (101,133)
Increase/(decrease) in trade
and other payables 698,270 543,205
Net cash used in operating
activities (4,548,978) (2,140,827)
---------------- -------------
Cash flows from investing
activities
Purchase of tangible fixed
assets 10 (31,429) (323,989)
Net cash used in investing
activities (31,429) (323,989)
Cash flows from financing
activities
Issue of share capital 5,230,825 1,398,697
Costs of issuing share capital (230,575) (69,935)
Interest received 7 2,174 -
Interest paid 7 (35,797) (17,264)
Convertible debt issued - 50,000
Issue of finance leases - 153,003
Repayment of finance leases (174,787) -
Proceeds from borrowings - 150,000
Repayment of borrowings (313,877) (198,604)
Net cash flows from financing
activities 4,477,963 1,465,897
Net decrease in cash and cash
equivalents (102,444) (998,919)
Cash and cash equivalents
at beginning of period 118,041 1,149,758
Effect of foreign exchange
rate changes - (32,798)
------------ -------------
Cash and cash equivalents
at period end 15 15,597 118,041
------------ -------------
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
30 June 31 December
2019 2017
Notes GBP GBP
Non-current assets
Property, plant and equipment 10 7,093 42,477
Investments - 76,000
Non-current assets 7,093 118,477
------------- ------------
Current assets
Trade and other receivables 14 - 1,696,772
Cash and cash equivalents 15 4,339 -
------------- ------------
4,339 1,696,772
------------- ------------
Total assets 11,432 1,815,249
============= ============
Equity
Share capital 19 3,498,257 162,053
Share premium 20 5,124,900 3,460,854
Share-based payment reserve 20 - 331,975
Retained deficit 20 (10,162,141) (3,352,643)
------------- ------------
(1,538,984) 602,239
Non-current liabilities
Loans and borrowings 17 11,141 113,321
------------- ------------
11,141 113,321
------------- ------------
Current liabilities
Trade and other payables 16 1,470,997 833,805
Bank debt and commercial loans 17 - 25,000
Directors loans 17 - 100,000
Loans and borrowings 17 68,278 140,884
------------- ------------
1,539,275 1,099,689
------------- ------------
Total liabilities 1,550,416 1,213,010
------------
Total equity and liabilities 11,432 1,815,249
============= ============
The Company's loss and total comprehensive loss for the period
ended 30 June 2019 was GBP7,153,280 (December 2017: GBP2,310,506
)
................................................
John Quinlan
Director
31 October 2019
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2019
Share-based
Share Share payments Retained Total
capital premium reserve deficit equity
GBP GBP GBP GBP GBP
Balance at 31 December
2016 135,145 2,159,000 211,513 (1,042,137) 1,463,521
---------- ------------ ------------ ------------- ------------
Loss for the year - - - (2,310,506) (2,310,506)
---------- ------------ ------------ ------------- ------------
Total comprehensive loss
for period - - - (2,310,506) (2,310,506)
---------- ------------ ------------ ------------- ------------
Transactions with owners
Share-based payment charge - - 120,462 - 120,462
Issue of shares 26,908 1,371,789 - - 1,398,697
Cost of placings - (69,935) - - (69,935)
---------- ------------ ------------ ------------- ------------
Total contributions by
and distributions to
owners 26,908 1,301,854 120,462 - 1,449,224
---------- ------------ ------------ ------------- ------------
Balance at 31 December
2017 162,053 3,460,854 331,975 (3,352,643) 602,239
Loss for the period - - - (7,153,280) (7,153,280)
---------- ------------ ------------ ------------- ------------
Total comprehensive loss
for period - - - (7,153,280) (7,153,280)
---------- ------------ ------------ ------------- ------------
Transactions with owners
Share-based payment charge - - 11,807 - 11,807
Issue of shares 3,336,204 1,894,621 - - 5,230,825
Cost of placings - (230,575) - - (230,575)
---------- ------------ ------------ ------------- ------------
Total contributions by
and distributions to
owners 3,336,204 1,664,046 11,807 - 5,012,057
---------- ------------ ------------ ------------- ------------
Transfer between reserves - - (343,782) 343,782 -
Balance at 30 June 2019 3,498,257 5,124,900 - (10,162,141) (1,538,984)
========== ============ ============ ============= ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2019
1. Accounting Policies
Basis of preparation and going concern
Iconic Labs plc is a public company incorporated and domiciled
in England and Wales. The address of the Company's registered
office is 27-28 Eastcastle Street, London, W1W 8DH. The
consolidated financial statements of the Group as at and for the
period ended 30 June 2019 comprise the financial statements of the
Company and its subsidiary undertakings.
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
('IFRS') as issued by the International Accounting Standards Board
and as adopted by the European Union.
The Company's individual statement of comprehensive income has
been omitted from the Group's annual financial statements having
taken advantage of the exemption not to disclose under Section
408(3) of the Companies Act 2006.
The consolidated financial statements have been prepared on the
historical cost basis.
These consolidated financial statements are presented in Pounds
Sterling ('GBP'), which is considered by the directors to be the
functional and most appropriate presentation currency.
The directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for
the foreseeable future, which is defined as twelve months from the
signing of this report. For this reason, the directors continue to
adopt the going-concern basis of accounting in preparing the
financial statements.
New standards and interpretations not yet adopted
Certain standards, amendments to published standards and
interpretations have been issued that are mandatory for accounting
periods beginning on or after 1 January 2019 or later periods, but
which the Group has not early adopted.
IFRS 16 - Leases
The standard has been developed to provide information to the
users of the financial statements on the lease transactions
undertaken by the entity, in order for them to assess the amount,
timing and uncertainty of cash flows arising from leases.
The standard is effective for periods beginning on or after 1
January 2019.
On application of the standard, the company will be required to
recognise assets and liabilities for all leases with a term of more
than 12 months, unless the underlying asset is of low value.
The directors consider that the effect of IFRS16 will be that
some of the Group's leases will be capitalised and recognised on
the balance sheet. The effect has not yet been fully documented by
the directors.
Basis of consolidation
The Group financial statements consolidate those of the parent
company and all of its subsidiaries. Subsidiaries are entities
controlled by the Group. The parent company controls a subsidiary
if it has power over the investee to significantly direct the
activities, exposure, or rights, to variable returns from its
involvement with the investee, and the ability to use its power
over the investee to affect the amount of the investors returns.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements.
The consolidated financial statements consist of the results of
the following entities:
Entity Summary description
------------------------------------------------- -------------------------------------------
Iconic Labs plc (previously Widecells Ultimate holding company
Group plc)
WideCells International Limited Holding company of subsidiaries
WideCells Limited Trading company
WideCells Portugal SA Trading company
WideCells Espana SL Trading company
WideAcademy Limited Trading company
CellPlan Limited Holding company
CellPlan International Lda Trading company
Revenue
The Group recognises the introduction of IFRS 15 for the
accounting period under review and does not consider that it has a
material impact on the Group's income.
Revenue represents the fair value of consideration received or
receivable in the period, net of discounts and sales taxes.
Sales income derives from the procurement and marketing of cord
blood stem cell storage. Revenue is recognised as detailed
below:
Revenue is recognised when it is probable that the economic
benefits associated with a transaction will flow to the Group and
the amount of revenue and associated costs can be measured
reliably. Where the work has been carried out and it is certain
that the income is due, appropriate adjustments are made through
deferred and accrued income on a percentage of completion basis.
Deferred income comprises of income received in advance of the
consideration being due and has been included within current
liabilities on the basis that the revenue becomes due within 12
months from the balance sheet date. Accrued income includes the
value of work performed during the period and where a right to
consideration has arisen, which was not invoiced until after the
period end.
Interest is recognised, in profit and loss, using the
effective-interest rate method.
Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at exchange
rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date
are retranslated to the functional currency at the exchange rate at
that date. .
Non-monetary items in a foreign currency that are measured based
on historical cost are translated using the exchange rate at the
date of the transaction.
Foreign currency differences arising on retranslation are
recognised in the statement of comprehensive income.
The adjustment in 'Other comprehensive income' arises because of
the difference between the value of the assets and liabilities of
foreign operations (including goodwill and the fair-value
adjustments arising on acquisition) when acquired compared to the
value when translated to GBP at exchange rates at the reporting
date. The income and expenditure earned and incurred by the Group's
overseas operations are translated to GBP at the average exchange
rate at the date of each transaction.
Financial assets
The group does not have any financial assets which it would
classify as fair value through profit or loss, available for sale
or held to maturity. Therefore, all financial assets are classed as
loans and receivables as defined below:
Loans and receivables
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition,
loans and receivables are measured at amortised cost using the
effective interest method, less any impairment losses.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance
against loans and receivables. Interest on the impaired asset
continues to be recognised. When an event occurring after the
impairment was recognised causes the amount of impairment loss to
decrease, the decrease in impairment loss is reversed through
profit or loss.
Loans and receivables comprise trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in their fair value. These are
initially and subsequently recorded at fair value.
Bank overdrafts are shown within loans and borrowings in current
liabilities on the statement of financial position.
Financial liabilities
The group does not have any financial liabilities that would be
classified as fair value through profit or loss. Therefore, these
financial liabilities are classified as financial liabilities at
amortised cost, as defined below:
Other financial liabilities include the following items:
-- Borrowings are initially recognised at fair value net of any
transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are subsequently
measured at amortised cost using the effective interest method,
which ensures that any interest expense over the period to
repayment is at a constant rate on the balance of the liability
carried in the statement of financial position. Interest expense in
this context includes initial transaction costs and premium payable
on redemption, as well as any interest or coupon payable while the
liability is outstanding.
-- Trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
Share capital
The group's ordinary shares are classified as equity
instruments.
Tangible fixed assets
Items of plant and equipment are initially recognised at cost.
As well as purchase price, cost includes directly attributable
costs.
Depreciation is provided on all other items of property, plant
and equipment, so as to write off their carrying value over their
expected useful economic lives. It is provided at the following
rates:
Plant & machinery 33% straight line basis
-
Leasehold improvements 33% straight line basis
-
Computer hardware 33% straight line basis
-
Intangible fixed assets
Intangible assets comprise capitalised computer software and are
initially recognised at cost.
Amortisation is provided so as to write off their carrying value
over their expected useful economic lives. It is provided at the
following rates:
Computer software 33% straight line basis
-
Leased assets
Where substantially all of the risks and rewards incidental to
the ownership of a leased asset have been transferred to the group,
the asset is treated as if it had been purchased outright. The
amount initially recognised as an asset is the lower of the fair
value of the leased property and the present value of the minimum
lease payments payable over the term of the lease. The
corresponding lease commitment is shown as a liability. Lease
payments are analysed between capital and interest. The interest
element is charged to the statement of comprehensive income over
the period of the lease and is calculated so that it represents a
constant proportion of the lease liability. The capital element
reduces the balance owed by the lessor.
Where substantially all of the risks and rewards incidental to
ownership are not transferred to the group, the total rentals
payable under the lease are charged to the statement of
consolidated income on a straight-line basis over the lease
term.
Inventories
Inventories are initially recognised at cost, and subsequently
at the lower of cost or net realisable value. Cost comprises all
costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and
condition.
Share-based payments
Where equity settled share-based payments are awarded to
employees, the fair value of the options at the date of grant is
charged to the statement of comprehensive income over the vesting
period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options that eventually vest. Non-vesting conditions and market
vesting conditions are factored into the fair value of the options
granted. As along as all other vesting conditions are satisfied, a
charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative expense is not adjusted
for failure to achieve a market vesting condition or where a
non-vesting condition is not satisfied.
Where terms and conditions of options are modified before they
vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
the statement of consolidated income over the remaining vesting
period.
2. Critical Accounting estimates and judgements
The group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. There are no estimates or
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial period.
3. Revenue
Revenue in all periods principally arises from the provision of
services. In 2016 this was from the planning phase of an R&D
contract with Qiginex, which ran through 2017 and 2018 in the UK.
Revenues also include sales of Cellplan and INDUS products.
4. Segment Information
Operating segments are components of the entity that:
-- Engages in business activity from which it earns revenues and incurs expenses;
-- Of which discrete financial information is available;
-- Whose operating results are reviewed regularly by the chief operating decision maker
Until sales begin in the new operating divisions of CellPlan and
Wideacademy, the group has 3 main operating segments, all of which
have the same intended source of revenue from the WideCells
division:
-- United Kingdom
-- Portugal
-- Spain
The group's reportable segments are geographical business units
that offer WideCells products and services into different markets.
They are managed separately as each business is operated from a
different location.
Measurement of operating segment profit or loss, assets and
liabilities
The accounting policies of the operating segments are the same
as those described in the summary of significant accounting
policies.
The group evaluates performance on the basis of profit or loss
from operations but excluding non-recurring losses and the effects
of share-based payments.
UK Portugal Spain Cellplan Wideacademy Total
2019 GBP GBP GBP GBP GBP GBP
Sales and services
provided 20,761 - - 320 - 21,081
Total revenue
from external
customers 20,761 - - 320 - 21,081
Total gross profit 20,761 - - 320 - 21,081
Segment EBITDA (5,050,075) (34,885) (9,003) (292,258) (68,019) (5,454,240)
Depreciation,
amortisation and
impairment (466,504) - - (163,529) - (630,033)
Loss from operations (5,516,579) (34,885) (9,003) (455,786) (68,019) (6,084,272)
Finance income/(expense) (27,778) 1,297 - - (7,141) (33,622)
Tax - - - - - -
------------ --------- -------- ------------ ------------ ------------
Group loss after
tax (5,544,357) (33,588) (9,003) (455,786) (75,160) (6,117,894)
------------ --------- -------- ------------ ------------ ------------
Total assets 34,712 621 580 2,699 - 38,612
Total liabilities 1,650,050 - - 63,175 - 1,713,225
All of the activities outside of the UK have been discontinued.
The results of the UK operation relate to continuing and
discontinued operations as follows:
2019 UK UK UK
Continuing Discontinued Total
GBP GBP GBP
Sales and services provided - 20,761 20,761
Total revenue from external
customers - 20,761 20,761
Total gross profit - 20,761 20,761
Segment EBITDA (303,485) (4,746,590) (5,050,075)
Depreciation, amortisation
and impairment (417) (466,087) (466,504)
Loss from operations (303,902) (5,212,677) (5,516,579)
Finance income/(expense) (4,050) (23,728) (27,778)
Tax - - -
------------ -------------- ------------
Group loss after tax (307,952) (5,236,405) (5,544,357)
------------ -------------- ------------
UK Portugal Spain Cellplan Wideacademy Total
2017 GBP GBP GBP GBP GBP GBP
Sales and services
provided 49,501 1,264 - - - 50,765
Total revenue
from external
customers 49,501 1,264 - - - 50,765
Total gross profit 49,501 1,264 - - - 50,765
Segment EBITDA (2,311,794) (352,110) (12,368) - - (2,676,272)
Depreciation and
amortisation (107,555) (5,636) - - - (113,191)
Loss from operations (2,419,349) (357,746) (12,368) - - (2,789,463)
Finance expense (17,185) (80) 1 - - (17,264)
Tax - (2,126) - - - (2,126)
------------ ---------- --------- --------- ------------ ------------
Group loss after
tax (2,436,534) (359,952) (12,367) - - (2,808,853)
------------ ---------- --------- --------- ------------ ------------
Total assets 1,341,263 82,690 8,067 - - 1,432,020
Total liabilities 1,913,128 80,691 6,977 - - 2,000,796
The results for 2017 relate entirely to discontinued
operations.
5. Loss from Operations
Period ended Year ended
30 June 31 December
2019 2017
GBP GBP
The loss for the period is stated after charging/(crediting):
Depreciation 417 113,721
Impairment of assets 629,616 -
Auditors remuneration - group 42,000 44,427
Auditors remuneration - company - 25,149
Operating lease - property 81,473 114,152
Share-based payments expense 11,807 120,462
Foreign exchange gains 6,273 (54,881)
Expenses by nature: GBP GBP
Supplies and external services 2,425,820 1,568,974
Other expenses 1,366,623 (46,938)
Staff costs 1,682,876 1,205,001
---------- ----------
Total operating expenses 5,475,319 2,727,037
---------- ----------
Depreciation, amortisation and impairment
of assets 630,033 113,191
---------- ----------
6,105,352 2,840,228
---------- ----------
6. Staff Costs
Period ended Year ended
30 June 31 December
2019 2017
GBP GBP
Staff costs (including directors) comprise:
Wages and salaries 1,473,681 900,811
Defined contribution pension cost 53,315 44,427
Benefits - 25,149
Social security contributions and similar
taxes 144,073 114,152
Share-based payments expense 11,807 120,462
1,682,876 1,205,001
-------------
Employee Numbers 2019 2017
The average number of staff employed by the
group during the period amounted to:
General and administration 15 17
----- -----
15 17
----- -----
Key management personnel compensation
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the
activities, and are the directors of the company.
Remuneration of the directors and highest paid director is shown
in the corporate governance report. In addition to the amounts
disclosed in the corporate governance report, the full share-based
payment charge of GBP11,807 (2017: GBP120,462) relates to key
management personnel.
7. Finance Income and Expense
Period ended Year ended
30 June 31 December
2019 2017
GBP GBP
Finance income
Other interest received 2,174 -
------------- -------------
Total finance income 2,174 -
------------- -------------
Finance expense
Bank loans and overdrafts 35,797 17,264
------------- -------------
Total finance expense 35,797 17,264
------------- -------------
8. Taxation
Period ended Year ended
30 June 31 December
2019 2017
GBP GBP
Current tax
Overseas taxation payable on profits for
the period - 2,126
-------------- -------------
Total current tax and tax credit - 2,126
-------------- -------------
The reason for the difference between the actual tax charge for
the period and the standard rate of corporation tax in the United
Kingdom applied to losses for the period are as follows:
2019 2017
GBP GBP
Loss before taxation (6,117,894) (2,806,727)
Tax using the parent company's domestic tax
rate of 19% (2017: 19,25%) (1,162,400) (540,295)
Effects of:
Unrelieved tax losses and other deductions
arising in the period 693,403 463,295
Expenses not deductible for taxation purposes 468,997 77,000
Local overseas taxes - (2,126)
------------ ------------
Total tax charged in the income statement - (2,126)
------------ ------------
The deferred taxation of GBP1,154,625 (2017: GBP534,212)
attributable to losses arising in the period and for losses carried
forward has not been recognised in these accounts due to the
uncertainty over whether this will be recovered.
9. Loss per share
Period ended Year ended
30 June 31 December
2019 2017
GBP GBP
Numerator
Loss for the period (6,117,894) (2,808,853)
Denominator
Weighted average number of ordinary shares
used in basic EPS 282,378,357 59,993,454
Effects of:
Employee share options 2,808,454 3,485,518
Conversion share warrants - 205,479
Broker share warrants - 727,272
------------- -------------
Weighted average number of ordinary shares
used in diluted EPS 285,186,811 64,411,723
------------- -------------
Basic and diluted loss per share (0.02) (0.05)
------------- -------------
10. Tangible Assets
Group
Plant & Leasehold Computer
Machinery Improvements Hardware Total
GBP GBP GBP GBP
Cost
Balance at 1 January 2017 225,708 154,620 27,715 408,043
Additions 119,782 29,130 32,788 181,700
Effect of foreign exchange - 2,099 1,445 3,544
----------- -------------- ---------- --------
Balance at 31 December 2017 345,490 185,849 61,948 593,287
----------- -------------- ---------- --------
Additions 10,282 - 21,147 31,429
----------- --------------
Balance at 30 June 2019 355,772 185,849 83,095 624,716
----------- -------------- ---------- --------
Amortisation
Balance at 1 January 2017 - 10,077 3,068 13,145
Charge for the year 43,868 53,103 16,220 113,191
Effect of foreign exchange - 21 339 360
----------- --------------
Balance at 31 December 2017 43,868 63,201 19,627 126,696
----------- -------------- ---------- --------
Charge for the period - - 417 417
Impairment in the period 311,904 122,648 55,958 490,510
----------- -------------- ---------- --------
Balance at 30 June 2019 355,772 185,849 76,002 617,623
----------- -------------- ---------- --------
Carrying amounts
Balance at 30 June 2019 - - 7,093 7,093
=========== ============== ========== ========
Balance at 31 December 2017 301,622 122,648 42,321 466,591
=========== ============== ========== ========
Company
Computer
Hardware Total
GBP GBP
Cost
Balance at 1 January 2017 16,659 16,659
Additions 46,031 46,031
---------- --------
Balance at 31 December 2017 62,690 62,690
---------- --------
Additions 14,231 14,231
Balance at 30 June 2019 76,921 76,921
---------- --------
Amortisation
Balance at 1 January 2017 473 473
Charge for the year 19,741 19,741
Balance at 31 December 2017 20,214 20,214
---------- --------
Charge for the period 417 417
Impairment in period 49,197 49,197
---------- --------
Balance at 30 June 2019 69,828 69,828
---------- --------
Carrying amounts
Balance at 30 June 2019 7,093 7,093
========== ========
Balance at 31 December 2017 42,477 42,477
========== ========
11. Intangible Assets
Computer
software Total
GBP GBP
Cost
Balance at 1 January 2017 - -
Additions 139,106 139,106
----------
Balance at 31 December 2017 and at 30
June 2019 139,106 139,106
---------- --------
Amortisation
Balance at 1 January 2017 - -
Charge for the year - -
Balance at 31 December 2017 - -
---------- --------
Impairment 139,106 139,106
Balance at 30 June 2019 139,106 139,106
---------- --------
Carrying amounts
Balance at 30 June 2019 - -
========== ========
Balance at 31 December
2017 139,106 139,106
========== ========
12. Subsidiaries
Country of Nature of
Entity Incorporation business Notes
--------------------------------- --------------------------------- --------------------------- -------------------
WideCells United Kingdom Holding company (c)
International Limited
WideCells Limited United Kingdom Trading company (a)
WideCells Portugal SA Portugal Trading company (a)
WideCells Espana SL Spain Trading company (a)
WideAcademy Limited United Kingdom Trading company (a)
CellPlan Limited United Kingdom Holding company (a)
CellPlan Portugal Trading company (b)
International Lda
Iconic Labs UK United Kingdom Trading company (c)
Limited
Iconic Labs IP United Kingdom Trading company (c)
Limited
Notes: (a) 100% owned by WideCells International Limited (b)
100% owned by CellPlan Limited
(c) 100% owned by Iconic Labs plc
Iconic Labs UK Limited was incorporated on 14(th) June 2019 and
Iconic Labs IP Limited was incorporated on 19(th) June 2019. The
companies did not trade in the period ended 30 June 2019.
13. Inventories
Group
30 June 31 December
2019 2017
GBP GBP
Raw materials and consumables - 27,850
========= ============
14. Trade and other receivables
Group
30 June 31 December
2019 2017
GBP GBP
Trade receivables - 2,029
Other receivables - 7,522
-------- ------------
Trade and other receivables - 9,551
VAT recoverable 15,922 173,703
-------- ------------
Total receivables 15,922 183,254
======== ============
Trade and other receivables do not contain any impaired assets.
The group does not hold any collateral as security and the maximum
exposure to credit risk at the consolidated statement of financial
position date is the fair value of each class of receivable. No
trade receivables are overdue but not impaired.
Book values approximate to fair value at 30 June 2019 and 31
December 2017.
Company
30 June 31 December
2019 2017
GBP GBP
Amounts due from group companies - 1,580,016
Other receivables - 116,756
--------- ------------
- 1,696,772
============================================ ============
15. Cash and cash equivalents
Group
30 June 31 December
2019 2017
GBP GBP
Cash at bank available on demand 15,694 615,219
Bank overdraft (97) (497,178)
-------- ------------
Total cash and cash equivalents 15,597 118,041
-------- ------------
Company
30 June 31 December
2019 2017
GBP GBP
Cash at bank available on demand 4,339 615,219
Bank overdraft - (497,178)
-------- ------------
Total cash and cash equivalents 4,339 118,041
-------- ------------
16. Trade and other payables
Group
30 June 31 December
2019 2017
GBP GBP
Trade payables 544,558 634,310
Other payables and accruals 884,687 234,713
Tax and social security 204,561 66,434
Deferred revenue - 79
---------- ------------
Total 1,633,806 935,536
---------- ------------
Book values approximate to fair values at 30 June 2019 and 31
December 2017.
Company
30 June 31 December
2019 2017
GBP GBP
Trade payables 381,749 601,276
Other payables and accruals 884,687 188,313
Tax and social security 204,561 44,216
---------- ------------
1,470,997 833,805
---------- ------------
Book values approximate to fair values at 30 June 2019 and 31
December 2017.
17. Loans and borrowings
Group
30 June 31 December
2019 2017
Non-current GBP GBP
Bank loans - 66,667
Other loans - -
Finance leases 11,141 140,884
-------- ------------
Total 11,141 207,551
-------- ------------
30 June 31 December
2019 2017
Current GBP GBP
Bank overdraft - 497,178
Bank loans - 72,210
Other loans - 25,000
Finance leases 68,278 113,321
Directors' loans - 100,000
Convertible loans - 50,000
-------- ------------
Total 68,278 857,709
-------- ------------
Book values approximate to fair values at 30 June 2019 and 31
December 2017.
The convertible loans converted to equity following the share
placing in June 2018.
Finance leases are secured on the relevant assets.
Company
30 June 31 December
2019 2017
Non-current GBP GBP
Other loans - -
Finance leases 11,141 113,321
-------- ------------
Total 11,141 113,321
-------- ------------
30 June 31 December
2019 2017
Current GBP GBP
Other loans - -
Bank debt and commercial loans - 25,000
Directors' loans - 100,000
Finance leases 68,278 140,884
Total 68,278 265,884
--------
18. Financial Instruments - Risk Management
The group is exposed through its operations to the following
financial risks:
-- Credit risk
-- Market risk
-- Liquidity risk
In common with other businesses, the group is exposed to risks
that arise from use of financial instruments. This note describes
the group's objectives, policies and processes for managing those
risks and the methods used to measure them.
The principal financial instruments used by the group, from
which the financial instrument risks arise, are as follows:
-- Trade receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Loans and borrowings
A summary of the financial instruments held by category is
provided below:
-- Financial assets - loans and receivables
-- Financial liabilities - amortised cost
Group:
2019 2017
GBP GBP
Cash and cash equivalents 15,599 615,219
Trade receivables - 2,029
------- --------
Total financial assets 15,599 617,248
------- --------
2019 2017
GBP GBP
Trade and other payables 1,429,245 869,023
Loans and borrowings 79,419 1,065,260
---------- ----------
Total liabilities - amortised cost 1,508,664 1,934,283
---------- ----------
Company:
2019 2017
GBP GBP
Cash and cash equivalents 4,339 -
Trade receivables - -
------ -----
Total financial assets 4,339 -
------ -----
2019 2017
GBP GBP
Trade and other payables 1,266,436 789,589
Loans and borrowings 79,419 379,205
---------- ----------
Total liabilities - amortised cost 1,345,855 1,168,794
---------- ----------
The Board has overall responsibility for the determination of
the group's risk management objectives and policies and, whilst
retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the
Group's Management Committee. The Board received quarterly reports
from the Management Committee.
The overall objective of the Board is to set policies that seek
to reduce risk as far as possible without unduly affecting the
groups' competitiveness and flexibility. Further details regarding
these policies are set out below:
Credit risk
Credit risk is the risk of financial loss to the group if a
development partner or a counterparty to the financial instrument
fails to meet its contractual obligations. The group is mainly
exposed to credit risk from credit sales. It is group policy,
implemented locally, to assess the credit risk of new customers
before entering into contracts.
Credit risk also arises from cash and cash equivalents and
deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties with high
credit status are accepted.
The group does not enter into derivatives to manage credit
risk.
Cash in bank
Group
2019 2017
GBP GBP
Cash held at HSBC - S&P Rating AA 11,444 610,707
Cash held at Santander - S&P rating A 4,153 4,512
------- --------
Total financial assets 15,597 615,219
------- --------
Company
2019 2017
GBP GBP
Cash held at HSBC - S&P Rating AA 4,339 -
Cash held at Santander - S&P rating A - -
------ -----
Total financial assets 4,339 -
------ -----
The group is continually reviewing the credit risk associated
with holding money on deposit in banks and seeks to mitigate this
risk by holding deposits with banks with high credit status.
Market risk
Cash flow interest rate risk
The group is exposed to cash flow interest rate risk from short
term borrowings at variable rate.
It is group policy that all borrowings are approved by the
directors to ensure that it is not taking on significant risk
related to possible movements in interest rates. Although the Board
accepts that this policy neither protects the group entirely from
the risk of paying rates in excess of current market rates nor
eliminates fully cash flow risk associated with variability in
interest payments, it considers that it achieves appropriate
balance of exposure to these risks.
During the period, the Groups borrowings at variable rate were
denominated in sterling.
Foreign exchange risk
Foreign exchange risk arises because the group has operations in
Portugal and Spain, whose functional currency is not the same as
the functional currency of the group. The group's net assets
arising from such overseas operations are exposed to currency risk
resulting in gains or losses on retranslation into sterling. Given
the levels of materiality, the group does not hedge its net
investments in overseas operations as the cost of doing so is
disproportionate to the exposure.
Foreign exchange risks also arise when individual group entities
enter into transactions denominated in a currency other than their
functional currency; the group has several customers and a regular
supplier who are invoiced in currency other than sterling. These
transactions are not hedged because the cost of doing so is
disproportionate to the risk.
As of 30 June 2019 and 31 December 2017 the group's exposure to
foreign exchange risk was not material.
Liquidity risk
Liquidity risk arises from the group's management of working
capital. It is the risk that the group will encounter difficulty in
meeting its financial obligations as they fall due.
It is the group's aim to settle balances as they become due.
The Board will continue to monitor long term cash projections in
light of its development plan and will consider raising funds as
required to fund long term development projects. Development
expenditure can be curtailed as necessary to preserve
liquidity.
The following table sets out the contractual maturities
(representing undiscounted contractual cash-flows) of financial
liabilities:
Group:
Between Between Between Over
Up to 3 and 1 and 2 and 5 years
3 months 12 2 5 years GBP
2019 GBP months years GBP
GBP GBP
Trade and other payables 1,463,818 169,988 - - -
Finance leases 32,127 36,151 11,141 - -
Total 1,495,945 206,139 11,141 - -
----------- -------- -------- ---------
Between Between Between Over
Up to 3 and 1 and 2 and 5 years
3 months 12 2 5 years GBP
2017 GBP months years GBP
GBP GBP
Trade and other payables 869,023 - - - -
Bank loans and overdrafts 514,890 53,137 70,749 - -
Finance leases 35,237 88,167 115,359 37,223 -
Directors' and other loans 114,037 10,963 - - -
Convertible loans - 54,000 - - -
----------- -------- -------- --------- ---------
Total 1,533,187 206,267 186,108 37,223 -
----------- -------- -------- --------- ---------
More details in regard to the line items are included in the
respective notes:
-- Trade and other payables - note 16
-- Loan and borrowings - note 17
Capital risk management
The group monitors capital which comprises all components of
equity (i.e. share capital, share premium and accumulated
deficit).
The group's objectives when maintaining capital are:
-- To safeguard the entity's ability to continue as a going
concern and continue to provide returns for shareholders and
benefits for other stakeholders
-- To provide an adequate return to shareholders by pricing
products and services commensurably with the level of risk.
At present the directors do not intend to pay dividends but will
reconsider the position in future periods, as the group becomes
profitable.
19. Share Capital
30 June 2019 31 December
2017
Number GBP Number GBP
Authorised, allotted and fully
paid - classified as equity
Ordinary shares of GBP0.0025 each 1,399,302,698 3,498,257 64,821,010 162,053
------------------------- ---------- -------------- ---------
Total 1,399,302,698 3,498,257 64,821,010 162,053
------------------------- ---------- -------------- ---------
The following shares issues took place during the period:
-- 28 June 2018 - 68,698,355 shares issued at a premium of 2.75p per shares
-- 26 October 2018 - 2,500,000 shares issued in respect of a
conversion of a convertible band, at a premium of 0.15p per
share
-- 26 October 2018 - 3,333,333 shares issued in respect of a
conversion of a convertible band, at a premium of 0.5p per
share
-- 6 November 2018 - 2,000,000 shares issued in respect of a
conversion of a convertible band, at par
-- 12 November 2018 - 10,000,000 shares issued in respect of a
conversion of a convertible band, at par
-- 11 March 2019 - 60,000,000 shares issued in respect of a
conversion of a convertible band, at par
-- 12 March 2019 - 80,000,000 shares issued in respect of a
conversion of a convertible band, at par
-- 18 March 2019 - 115,000,000 shares issued in respect of a
conversion of a convertible band, at par
-- 21 March 2019 - 150,000,000 shares issued in respect of a
conversion of a convertible band, at par
-- 21 March 2019 - 19,200,000 shares issued in respect of
settlement of outstanding fees with a supplier, at par
-- 21 March 2019 - 210,000,000 shares issued, at par
-- 2 April 2019 - 5,000,000 shares issued in respect of
settlement of outstanding fees with a supplier, at par
-- 29 April 2019 - 200,000,000 shares issued, at par
-- 21 May 2019 - 100,000,000 shares issued in respect of a
conversion of a convertible band, at par
-- 31 May 2019 - 108,750,000 shares issued in respect of a
conversion of a convertible band, at par
-- 19 June 2019 - 200,000,000 shares issues, at par
In accordance with the Companies Act 2006, the company has no
limit on its authorised share capital.
Pursuant to a resolution passed on 16 June 2016, the Company
resolved that:
-- The directors be generally authorised in accordance with the
Articles to exercise all powers of the company to allot Ordinary
shares, or grant rights to subscribe for, or convert any security
into Ordinary shares, up to a maximum aggregate nominal value of
GBP500,000, provided always that such authority conferred on the
directors shall (unless previously renewed, varied or revoked prior
to that time) expire at the conclusion of the company's next annual
general meeting or on the date falling 18 months after the date of
the passing of the resolution, whichever is the sooner. The company
may make an offer or agreement which would or might require
Ordinary shares to be allotted pursuant to the resolution referred
to in paragraph 3.6.1 of the listing prospectus before the expiry
of their authority to do so, but allot the Ordinary shares pursuant
to any such offer or agreement after that expiry date.
-- All pre-emption rights in the Articles to be waived; (i) for
the purposes of, or in connection with, the Placing, the issue of
the Conversion shares and the issue of the Warrant shares; (ii)
generally for such purposes as the directors may think fit
(including the allotment of equity securities for cash) up to a
maximum aggregate amount of GBP40,543.54; and (iii) for the
purposes of the issue of securities offered (by way of a rights
issue, open offer or otherwise) to existing holders of Ordinary
share, but subject to the directors having a right to make such
exclusions or other arrangements in connection with the offering as
they deem necessary or expedient; (A) to deal with the equity
securities representing fractional entitlements; and (B) to deal
with legal or practical problems in the laws of any territory, or
the requirements of any regulatory body; on the basis that the
authorities conferred under the resolution referred to in paragraph
3.6.2 of the listing prospectus shall (unless previously renewed,
varied or revoked prior to that time) expire at the conclusion of
the company's next annual general meeting or on the date falling 18
months after the date of the passing of the resolution, whichever
is the sooner. The company may make an offer or agreement which
would or might require equity securities to be issued before the
expiry of its power to do so, but allot the equity securities
pursuant to any such offer or agreement after that expiry date.
The holders of Ordinary shares have full voting dividend and
capital distribution rights.
They do not confer any rights of redemption.
On or following the occurrence of a change of control the
receipts from the acquirer shall be applied to the holders of the
Ordinary shares pro rata to their respective holdings.
Ordinary shares are recorded as equity.
20. Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital
in excess of nominal value
Merger reserve Amounts arising on acquisition
of non-controlling interest and
share for share exchange
Translation reserve Reserve related to translation
of foreign currency assets and
liabilities
Share-based payment reserve Reserve related to share options
Retained deficit All other net gains and losses
and transactions with owners (e.g.
dividends) not recognised elsewhere
21. Retirement Benefits
The group operates a defined contribution pension scheme for the
benefit of its employees. The assets of the scheme are to be
administered by trustees in funds independent from those of the
group. The pension costs charges for each period are 10% for
directors and 5% for staff and included in staff costs.
22. Share-Based Payment
The group has issued options over ordinary shares under the
Widecells Group Limited 2015 approved Enterprise Incentive scheme.
Exercise of an option is subject to continued employment.
The options that existed at the period end are as follows:
2019 2017
Weighted Weighted
average average
exercise 2019 exercise 2017
price Number price Number
GBP GBP
Outstanding
at
beginning
of
accounting
period 0.0490 3,610,870 0.0025 2,200,000
Options
granted in
WideCells
Group plc - - 0.1215 1,410,870
Options
cancelled
in period 0.0490 (3,610,870)
--------------------- ----------------------- --------------------- ---------------------
Outstanding
at period
end - - 0.0490 3,610,870
--------------------- ----------------------- --------------------- ---------------------
The directors' interests in the share options are as
follows:
Outstanding Granted Cancelled Outstanding
at 1 January in period in period at 30 June
2018 (Number) (Number) 2019
(Number) (Number)
Peter
Hollands 1,600,000 - (1,600,000) -
David
Bridgland 1,200,000 - (1,200,000) -
Marilyn
Orcharton 270,290 - (270,290) -
Alan
Greenberg 540,580 - (540,580) -
------------------------ --------------------- ----------------------- -----------------------
3,610,870 - (3,610,870) -
------------------------ --------------------- ----------------------- -----------------------
23. Leases
Finance Leases
The group is leasing the more expensive pieces of laboratory
equipment for the stem cell processing and storage facility in
Manchester. These finance leases are over 3 years and the future
payments are as follows:
Group:
Minimum
lease payments Present
GBP Interest value
2019 GBP GBP
Not later than one year 70,978 2,700 68,278
Between one year and five
years 11,773 632 11,141
Later than five years - - -
--------------------------- ---------------------- ---------------------
82,751 3,332 79,419
--------------------------- ---------------------- ---------------------
Current liabilities 68,278
Non-current liabilities 11,141
Minimum
lease payments Present
GBP Interest value
2017 GBP GBP
Not later than one year 123,404 10,083 113,321
Between one year and five
years 152,582 11,698 140,884
Later than five years - - -
--------------------------- ---------------------- ---------------------
275,986 21,781 254,205
--------------------------- ---------------------- ---------------------
Current liabilities 113,321
Non-current liabilities 140,884
Company:
Minimum
lease payments Present
GBP Interest value
2019 GBP GBP
Not later than one year 70,978 2,700 68,278
Between one year and five
years 11,773 632 11,141
Later than five years - - -
--------------------------- ---------------------- ---------------------
82,751 3,332 79,419
--------------------------- ---------------------- ---------------------
Current liabilities 68,278
Non-current liabilities 11,141
Minimum
lease payments Present
GBP Interest value
2017 GBP GBP
Not later than one year 123,404 10,083 113,321
Between one year and five
years 152,582 11,698 140,884
Later than five years - - -
--------------------------- ---------------------- ---------------------
275,986 21,781 254,205
--------------------------- ---------------------- ---------------------
Current liabilities 113,321
Non-current liabilities 140,884
Operating Leases
The group had commitments under non-cancellable operating leases
as set out below:
2019 2019 2017 2017
Property Equipment Property Equipment
GBP GBP GBP GBP
Not later
than one
year - - 82,882 587
Between
one year
and five
years - - 41,261 587
Later than - - - -
five years
---------------------- ----------------------- --------------------- ----------------------
- - 124,143 1,174
---------------------- ---------------------------------------------- --------------------- ----------------------
24. Capital Commitments
The group had no capital commitments at 30 June 2019 or 31
December 2017.
25. Related party Transactions
At 1 January 2018, the former directors of the company had
loaned GBP100,000 to the company. During the period, the company
was loaned a further GBP330,325 by the former directors and
GBP158,832 was repaid to the former directors. The company also
loaned GBP34,658 to the former directors. Upon resignation of
directorships, the former directors confirmed that they had no
outstanding claims against the Group and therefore the balances
owed to them at the date of their resignation have been written off
to the income statement in the 2019 financial period.
The company received GBP2,166 interest on loans that it provided
to the former directors in the period. The company also paid
GBP2,150 of interest to former directors.
Vivian Andrade, Joao Andrade's wife, received GBP1,987 (2017 -
GBP2,655) of professional fees for providing the services of
Quality Manager to WideCells Portugal SA. GBPnil (2017 - GBPnil)
was due to Vivian Andrade at the period end.
Luis Andrade, Joao Andrade's brother, received GBP6,001 (2017 -
GBP6,049) of professional fees for providing the services of Group
IT Manager to Iconic Labs plc. GBPnil (2017 - GBPnil) was due to
Luis Andrade at the period end.
There are no other related party transactions.
26. Contingent Liabilities
The group had no contingent liabilities at 30 June 2019 or 31
December 2017.
27. Post Balance Sheet Events
On 4 September 2019, Widecells Limited appointed liquidators in
order for the company to be voluntarily wound up.
On 5 September 2019, the Group acquired 24% of the issued share
capital of Student Media Ventures Limited.
On 9 September 2019, the Group acquired 100% of the issued share
capital of Nuuco Media Limited.
On 10 September 2019, the Group acquired 24% of the issued share
capital of Medium Channel Media Limited
28. Ultimate Controlling Party
The directors do not consider that there is an ultimate
controlling party of the group.
**ENDS**
For further information, please visit the Company's website
www.iconiclabs.co.uk, email IR@iconiclabs.co.uk or contact:
John Quinlan Iconic Labs Plc c/o SBP Tel: +44 (0) 20
7236 1177
Damon Heath Shard Capital Partners Tel: +44 (0) 20 7186 9950
LLP
Erik Woolgar Shard Capital Partners Tel: +44 (0) 20 7186 9950
LLP
Hugo de Salis St Brides Partners Tel: +44 (0) 20 7236 1177
Limited
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BIBDGDGXBGCB
(END) Dow Jones Newswires
October 31, 2019 14:28 ET (18:28 GMT)
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