TIDMICON
RNS Number : 1413I
Iconic Labs PLC
10 December 2020
Iconic Labs Plc ("Iconic Labs" or the "Company")
Full Year Results 2020
Iconic Labs Plc (LSE:ICON), a multi-divisional new media and
technology business, today announces its audited financial results
for the year ended 30 June 2020.
Copies of the Report and Accounts for the year ended 30 June
2020 are available to view on the Company's website
www.iconiclabs.co.uk.
Chief Executive and Interim Chairman's Report
I am pleased to introduce the audited accounts for the twelve
months to 30 June 2020. This is the final set of accounts which
covers both the shutting down of the old Widecells business as well
as setting the operational platform from which we have built the
Iconic Labs business. During this period, the core building blocks
of the Company's new media and technology business were put in
place, albeit it is only in the period since the balance sheet date
that the commercial results have begun to accelerate. More
specifically, the Company was able to build upon the acquisition of
GSN with a contract to manage TheLondonEconomic, which is a
successful digital newspaper with a very high reach into a key
young, affluent, urban demographic.
However, the most significant event occurred after the balance
sheet date with the contract to manage the JOE and Her Media
businesses, under a contract now worth a minimum of GBP125,000 per
month plus a 25% share of profits after certain revenue and
profitability targets are met. With the more recent management
contract for Lovin Media, not only is the Company is close to being
profitable on an operational basis but the sheer scale and reach of
JOE and Her makes it the perfect foundation stone upon which to
grow.The owned and operated properties of GSN, TLE and, JOE and Her
are all examples of the company's strategy of identifying websites
and digital brands that have a valuable audience and brand but have
yet to fully monetise that potential. Since taking over the
management of JOE the Company has not only secured several major
sponsorship contracts but has increased programmatic advertising
revenue by 300%. The company has also significantly increased
revenues at TLE, with programmatic advertising revenue more than
doubling in recent months. The company believes that this model is
scalable and believes there are considerable further digital media
brands that fit the profile of strong brands that would benefit
from the increased revenues that Iconic Labs can facilitate.
Finally, importantly, the Company was fully aware of members
views of the convertible facility with European High Growth
Opportunities Securitization Fund (EHGOSF) that we had in place as
at the balance sheet date. The company had previously had a
facility with EHGOSF prior to the current board's involvement and
it had been a long term strategy and ambition to replace it when
the Company was able to do so. That facility has been terminated
post year-end and the Company is now funded by the conventional
routes of equity, debt and revenues. It is also unfortunate but
important that we continue to recognise and take account of the
current Coronavirus Covid-19 pandemic. It has had an effect on some
branded contract delays and cancellations in Q2 2020, particularly
amongst live events and travel clients, but more broadly the plans
we have had for each managed or owned company have been at least in
line with expectations. More generally, however, as more people
spend time at home the Group remains confident that it will see a
long term increase in demand for its online publishing content. The
Group believes that many content and technological trends may
accelerate as a result, and the Group aims to be best positioned to
benefit from the long term. Finally, we hope that all of you and
your families continue to stay safe during this period and our
thoughts go out to all of those who are suffering hardship or have
lost family members and loved ones.
Strategic Report
INTRODUCTION
This is the fourth set of financial statements prepared by the
Group. The Strategic Report should also be read in conjunction with
the Chief Executive and Interim Chairman's statement which is
included within the Annual Report. During the previous year the
Group evolved from a stem cell and prospective insurance
intermediary called Widecells Group PLC into a media and technology
Group, and was renamed Iconic Labs PLC.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
Iconic Labs is a media and technology business focused on
providing online marketing, content and technology driven products.
The Company's principal activity within this sector is in digital
and social media publishing. The Company owns certain publishers,
such as GSN, and manages other publishers, such as
TheLondonEconomic, JOE and Her and Lovin' Media, through management
services contracts ("MSCs"). These MSCs provide for the payment of
a fixed monthly management fee together with a percentage of the
profits. For example, the MSC in respect of JOE and Her provides
for a GBP125,000 monthly management fee plus external costs
together with a 25% share of the profits after certain revenue and
profitability targets are met. There are advantages to both owned
and managed assets. With owned assets the Company seeks to build
asset value as well as income, whereas with managed assets the
Company does not have an up-front capital cost and can also access
assets whose open market price exceeds the amount that the Company
can afford. With respect to both owned and managed assets, the
Company seeks to use the skills and experience of the management
team to increase revenues and profits by increasing both
programmatic advertising revenues and sponsorship or branded
content revenues. In conjunction with increasing revenues, by
centralising core functions and then applying them across all of
the assets, costs can be set against larger revenues thereby
increasing profits.
PRINCIPAL RISKS AND UNCERTAINTIES
The following risks are considered by the Board to be the most
significant risks to the business:
The Group cannot be certain that it will achieve and sustain
revenues and profitability
The Company is still at an early stage of development. Since the
balance sheet date, there has been a significant increase in
revenues. However, were revenues to decline then it would have an
immediate adverse effect on the Company's business, operating
results and financial condition. The business has a flexible cost
base and will be able to introduce identified cost savings to
mitigate this but it remains an inherent risk of a business at this
stage of development.
Dependence on a key contract
At this stage, the revenues from the JOE and Her MSC comprise a
significant majority of the Company's revenues and the loss of this
contract would materially adversely affect the business. However,
the MSC entered into with Greencastle has an initial term of one
year which rolls over automatically unless both parties agree to
terminate. The effect of this is that the consent of the Company is
required to terminate the agreement, thereby significantly
mitigating this risk. There are only limited other grounds for
termination, such as Greencastle's sole right to be able to
terminate the MSC on one weeks' notice in the event that: (i) two
or more of Liam Harrington, John Quinlan and/or Sam Asante cease to
be directors of the Company; or (ii) more than three other
directors are appointed; or (iii) the existing executive directors
cease to exercise day to day management of the Company. As at the
date of these accounts, no such events have occurred and the MSCs
remain in place and are continued to be carried out in accordance
with their terms in the ordinary course of business. However,
should any such events transpire in the future then it is possible
that Greencastle may exercise its right to terminate the MSCs by
serving such notice.
Employee Risk
Failure to retain key executives could adversely affect the
Group's operating and financial performance. Retaining and
motivating key executives is a critical
component of the future success of the business. The company has
a total of seven employees and the departure of any of the
company's very small number of
executive officers or other key employees could have a
significant negative impact on its operations. The ex-UNILAD team
are one of biggest strengths of the
business and the performance of the company depends, to a
significant extent, upon their abilities and continued efforts as
its senior management. The loss of the services of any of the key
management personnel will adversely affect the Group's ability to
maintain or improve its operating and financial performance.
Funding Risk
The company is at an early stage of development and is not
currently profitable. Despite strong confidence in its business
plan and forecasts, the Directors recognise there is a risk that it
may require more funding but not be able to find agreement with a
funding partner. The Directors have sought to mitigate this risk by
identifying a number of options for funding, including both equity
and debt.
Market risk
The digital media and advertising industry is continually
changing and has a significant amount of competition. The company
believes that it has a strong and competitive business strategy but
the operational and financial results of the company could be
materially affected by the actions of competitors, partners and
suppliers. The company competes with a large number of people as
the business spans several sectors, notably digital publishing and
advertising. As a company at an early stage of development the
company's competitors could offer superior scale and put pressure
on prices which could affect the Company's revenues and profit
margins.
Global Economic Risk
The advertising industry is susceptible to adverse developments
in the global economy and particularly the UK economy where the
company operates. The continual uncertainty over Brexit, for
example, may continue to delay advertising spending by potential
clients which may have a negative effect on the demand for services
or the delay of campaigns which could affect the revenues of the
company.
Potential unrecorded legacy liabilities
There were significant legacy issues, some of which were not
known to the new management upon taking control of the business. A
review of the true creditor position of the company was taken along
with an assessment made of how to restructure the company's debts
and its subsidiaries. There were and are a number of subsidiaries
that had incurred significant debts under the old business. The
management negotiated with creditors to substantially reduce the
debt position of PLC. The directors believe it is highly unlikely
that there are any material unknown liabilities of Iconic Labs Plc.
In making this statement, the directors have placed particular
reliance on the public announcement prior to the commencement of
the Iconic Labs business that the company had been recapitalised.
This prompted a considerable number of creditors to come forward
and the directors consider it unlikely that any material creditor
would not have sought repayment at that stage. In addition, the
directors worked with the former Widecells Finance Controller to
conduct a forensic exercise to assess and list all potential
liabilities arising from the former business activity. This process
was carried out was extremely thorough, took place over several
months and involved the senior management team. The Group has
received legal and professional advice at every stage and, whilst
there is a risk of unrecorded liabilities, the Board is fully
confident that it is in control of the liabilities and any
processes required to manage them.
The current status of the old Widecells subsidiaries is as
follows:
-- Widecells Limited - Has entered liquidation process; Antony
Batty and Co appointed liquidator
-- WideAcademy - Dormant
-- Widecells Espana - Has entered liquidation process.
DIRECTORSHIP CIBELES, SL, a subsidiary of Gestiona-t, appointed
liquidator.
-- Widecells Portugal - Following the decision to cease
operations and in the absence of local directors the UK Board have
been taking legal advice and are in the process of instructing a
local liquidator to formalise the cessation of this company and
discharge any identified obligations.
-- Cellplan Limited - Shareholder of Cellplan International LDA.
Dormant
-- Widecells International Limited - Holding Company
Financial Risk Management
The Board monitors the internal risk management function across
the Group and advises on all relevant risk issues. There is regular
communication with internal departments, external advisors and
regulators. The Group's policies on financial instruments and the
risks pertaining to those instruments are set out in the accounting
policies in note 1.
FINANCIAL REVIEW - LEGACY STEM CELL AND PROSPECTIVE INSURANCE
BUSINESS
During the period, the stem cell and insurance business earned
income of GBPnil (2019 - GBP21,081). However a number of potential
liabilities included in the 2019 financial period have been
realised, leading to a write back of administrative expenses
totalling GBP450,062 in the 2020 financial year (2019 -
GBP3,472,771 administrative expense were incurred) and impairment
of non-current assets of GBPnil (2019 - GBP629,616). The overall
impact of the legacy business on the Group's results for the year
is a profit on discontinued activities of GBP450,062 (2019 -
GBP4,113,879) and an increased finance cost relating to conversion
penalties and make whole settlements of GBP349,380 (2019 -
GBP1,814,563).
FINANCIAL REVIEW - MEDIA AND TECHNOLOGY BUSINESS
In March 2019, the media and technology business was launched.
As the launch took place only a few months prior to the end of the
prior financial period, no revenues arose relating to this business
prior to 30 June 2019. Revenues and other operating income
generated in the current financial year totalled GBP132,303. Since
the balance sheet date, the Company has entered into several
further management service contracts, most notably in respect of
JOE and Her Media. These have now increased base monthly recurring
revenues to GBP125,000. The administration expenses relating to the
media and technology business totalled GBP2,357,366 (2019 -
GBP327,902) in the year. However, within those administration
expenses there are approximately GBP1,000,000 of expenses relating
to the financing arrangements for the Company and legal and
professional fees. Actual operating expenses were therefore
approximately GBP1,600,000. Further the largest element of that sum
was salaries, and the number includes more than GBP200,000 of
salaries, fees and expenses due to senior employees and directors
that have been accrued but are unpaid. The directors and senior
employees have since the balance sheet date continued to defer part
of their salaries, fees and expenses. The Company hopes that with
increased revenues and the recent refinancing of the Company that
it may be able to resume full salary payments early in 2021. The
overall loss attributable to the new business for the period
totalled GBP2,840,183 (2019 - GBP2,146,515). The loss includes a
redemption penalty of GBP349,380 (2019 - GBP1,814,563) on
convertible loan notes and make whole settlements. At the balance
sheet date, the Group had assets totalling GBP360,722 (2019 -
GBP38,612) and liabilities totalling GBP3,473,388 (2019 -
GBP1,855,725).
Key Performance Indicators:
The business is focused on the areas of cash management and
operating results. The Company has identified the following key
performance indicators which the directors will use to measure
success against the business plan:
-- Gross revenue growth
-- EBITDA growth
-- GP%
-- % Client retention
-- Publisher network (% audience size growth)
-- Publisher page views (% growth)
FUTURE DEVELOPMENT AND STRATEGY
Market Trends
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 a 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, at present, 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 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 and 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.
Company Strategy
The directors believe that there is a huge opportunity in the
publishing and advertising market because of technological and
structural changes. The directors consider 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 highly
desirable to partners and clients, and critical to establishing a
successful modern media company.
Online Media Brands and Complimentary Agency and Consultancy
Services
The first phase of the company's strategy has been launching the
agency and consultancy offering. This was formally launched in the
early 2020 and has achieved a very promising reception. This is a
product 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. The directors believe that the Company's consultancy
offering brings a unique benefit to clients due to the company's
access to the data, audience and the content capabilities of the
Groups' online media brands.
Additional Business Divisions:
The directors 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
GOING CONCERN
The board's assessment of going concern and the key
considerations thereto are set out in the Corporate Governance
Report in the Accounts.
CAPITAL STRUCTURE
Details of the ordinary shares of the Company are shown in note
14. The Company has a class of ordinary shares of GBP0.00001 per
share and a class of deferred shares of GBP0.00249 per share, both
of which carry no fixed income. Each holder of ordinary shares is
entitled to receive the Group's Annual Report and audited financial
statements, to attend and speak or appoint proxies and to exercise
voting rights at the general meetings of the Company. The Company's
Articles of Association (the 'Articles') do not have any specific
restrictions on the transfer of shares, restrictions on voting
rights nor are there limitations on the holding of such shares. The
Board are not aware of any agreement between holders of the
Company's shares that may result in restrictions on the transfer of
securities or on voting rights. No person has any special rights of
control over the Company's share capital and all issued shares are
fully paid. The appointment and replacement of directors and the
powers of the directors are governed by the Articles, the UK
Corporate Governance Code, the Companies Act 2006 and related
legislation. The powers of the directors are described in the
Corporate Governance Report on pages 10 to 16 of the Accounts.
ENVIRONMENTAL ISSUES
As far as the directors are aware the Company's business
activates not cause a direct and disproportionate adverse effect on
the environment.
EMPLOYEE MATTERS
The current business is model is dependent on the current
employees skills and although the directors believe this will
decrease over time the Company uses all reasonable endeavours to
keep the employees safe, incentivised and motivated. As of 30 June
2020 the Company had 6 FTE's of whom 5 were male and 1 female.
There were 3 male and 1 female senior members of the Board.
Social, community and human rights issues
The Group seeks to achieve the highest ethical standards and
behaviours in conducting its business, with integrity, openness,
diversity and inclusiveness being high priority from the Board to
senior management and throughout the workforce. We have adopted a
formal equal opportunities policy which is contained in our
employee handbook. The aim of the policy is to ensure no job
applicant, employee or worker is discriminated against either
directly or indirectly on the grounds of race, sex, disability,
sexual orientation, gender reassignment; marriage or civil
partnership; pregnancy or maternity; religion or belief or age.
SECTION 172 STATEMENT
Section 172 of the Companies Act 2006 requires Directors to take
into consideration the interests of stakeholders and other matters
in their decision making. The Directors continue to have regard to
the interests of the Company's employees and other stakeholders,
the impact of its activities on the community, the environment and
the Company's reputation for good business conduct, when making
decisions. In this context, acting in good faith and fairly, the
Directors consider what is most likely to promote the success of
the Company for its members in the long term. We explain in this
annual report, and below, how the Board engages with stakeholders.
Relations with key stakeholders such as employees, shareholders and
suppliers are considered in more detail on page 9. The Directors
are fully aware of their responsibilities to promote the success of
the Company in accordance with section 172 of the Companies Act
2006. To ensure the Company was operating in line with good
corporate practice, all Directors received refresher training on
the scope and application of section 172 in writing. This
encouraged the Board to reflect on how the Company engages with its
stakeholders and opportunities for enhancement in the future and
was considered at the Company's summer board meeting in June. A
section 172 notice has been included with the board papers since
this date. As required, the Senior Legal Counsel and Company
Secretary will provide support to the Board to help ensure that
sufficient consideration is given to issues relating to the matters
set out in s172(1)(a)-(f). The Board regularly reviews the
Company's principal stakeholders and how it engages with them. This
is achieved through information provided by management and also by
direct engagement with stakeholders themselves. We aim to work
responsibly with our stakeholders, including suppliers. The Board
has recently reviewed its anti-corruption and anti-bribery, equal
opportunities and whistleblowing policies.
The key Board decisions made in the year are set out below:
Significant events/decisions Key s172 matter(s) Actions and impact
affected
Acquisition of GayStarNews Shareholders, employees -- Decisions were made
by the executive team
in
consultation with the
Board.
-- The Company's product
offering has been
diversified to generate
more revenue from
programmatic revenue
and branded content
deals.
------------------------ -----------------------------
Issuance of Prospectus Shareholders, employees -- Decisions were made
and by the executive team
Financing Agreement in
consultation with the
Board after carefully
considering the Group
wide impact.
-- The Company secured
funding for working
capital and also formed
part of the Company
ambition to work towards
a clean balance sheet.
------------------------ -----------------------------
Management Services Shareholders, employees -- Decisions were made
Agreement by the executive team
regarding in
TheLondonEconomicNewspaper consultation with the
Board.
-- The new contract
provided the Company
with a
new revenue source
but one which relies
on the
skills and existing
experience of the Company
in
running digital publishers.
------------------------ -----------------------------
Consolidated Statement of Comprehensive Income
FOR THE YEARED 30 JUNE 2020
18 Month
Year ended period
ended
30 June 30 June
2020 2019
Notes GBP GBP
=============================================== ===== ============ =============
Continuing operations
Revenue 107,303 -
=============================================== ===== ============ =============
Gross pro t 107,303 -
=============================================== ===== ============ =============
Administrative expenses 3 (2,357,366) (327,902)
=============================================== ===== ============ =============
Direct costs incurred in connection with
EHGOF nancing facility 3 (262,000)
=============================================== ===== ============ =============
Other operating income 25,000
=============================================== ===== ============ =============
Operating loss (2,487,063) (327,902)
=============================================== ===== ============ =============
Finance costs 6 (353,120) (1,818,613)
=============================================== ===== ============ =============
Loss before taxation (2,840,183) (2,146,515)
=============================================== ===== ============ =============
Taxation 7 - -
=============================================== ===== ============ =============
Loss for the period from continuing operations (2,840,183) (2,146,515)
=============================================== ===== ============ =============
Pro t/(loss) for the period from discontinued
operations 5 450,062 (4,113,879)
=============================================== ===== ============ =============
Loss for the period (2,390,121) (6,260,394)
Total comprehensive loss for the period (2,390,121) (6,260,394)
=============================================== ===== ============ =============
Loss per ordinary share 8
=============================================== ===== ============ =============
Basic and diluted (pence)
=============================================== ===== ============ =============
- from continuing operations (0.11) (0.75)
=============================================== ===== ============ =============
- from discontinued operations 0.00 (0.01)
=============================================== ===== ============ =============
The loss for the year and total comprehensive loss for the year
are wholly attributable to the equity holders of the parent.
Consolidated Statement of Financial Position
AS AT 30 JUNE 2020
30 June 30 June
2020 2019
Notes GBP GBP
============================== ======= ============= =============
Assets
Non-current assets
============================== ======= ============= =============
Property, plant and equipment 9 22,590 7,093
============================== ======= ============= =============
Intangible assets 10 21,600 -
============================== ======= ============= =============
Total non-current assets 44,190 7,093
============================== ======= ============= =============
Current assets
============================== ======= ============= =============
Trade and other receivables 12 136,135 -
============================== ======= ============= =============
VAT recoverable 12 - 15,922
============================== ======= ============= =============
Cash and cash equivalents 13 180,397 15,597
============================== ======= ============= =============
316,532 31,519
Total assets 360,722 38,612
============================== ======= ============= =============
Equity
============================== ======= ============= =============
Share capital 14 4,138,936 3,498,257
============================== ======= ============= =============
Share premium 15 5,578,789 5,124,900
============================== ======= ============= =============
Retained de cit 15 (12,830,391) (10,440,270)
============================== ======= ============= =============
(3,112,666) (1,817,113)
============================== ======= ============= =============
Liabilities
============================== ======= ============= =============
Non-current liabilities
============================== ======= ============= =============
Loans and borrowings 17 - 11,141
============================== ======= ============= =============
- 11,141
============================== ======= ============= =============
Current liabilities
============================== ======= ============= =============
Trade and other payables 16 1,699,794 1,736,306
============================== ======= ============= =============
Loans and borrowings 17 1,739,594 68,278
============================== ======= ============= =============
Provisions 18 34,000 40,000
============================== ======= ============= =============
3,473,388 1,844,584
============================== ======= ============= =============
Total liabilities 3,473,388 1,855,725
Total equity and liabilities 360,722 38,612
============================== ======= ============= =============
Consolidated Statement of Changes in Equity
FOR THE YEARED 30 JUNE 2020
Share-based
Share Share Merger Translation payments Retained Total
capital premium reserve reserve reserve de cit equity
==============
GBP GBP GBP GBP GBP GBP GBP
============== =============== =============== ============ ============ =========== ============== ===============
Balance at
31 December
2017 162,053 3,460,854 (185,728) (32,798) 331,975 (4,305,132) (568,776)
============== =============== =============== ============ ============ =========== ============== ===============
Loss for the (6,260,394)
period - - - - - (6,260,394)
Total
comprehensive
loss for the (6,260,394)
period - - - - - (6,260,394)
============== ========================================================================= ===============================
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 32,978 (343,782) 125,256 -
=============================== =============== ============ ============ =========== ============== ===============
Balance at 30 June 2019 3,498,257 5,124,900 - -
- (10,440,270) (1,817,113)
Loss for the year - - - - - (2,390,121) (2,390,121)
============================= ========= ============================== =============
Foreign exchange translation - - - - - -
-
Total comprehensive loss
for the year - - - - - (2,390,121) (2,390,121)
============================= ========= ============================== =============
Transactions with owners:
============================= ========= ============================== =============
Share-based payment charges - - - - - -
-
============================= ========= ============================== =============
Issue of shares 640,679 453,889 - - - - 1,094,568
Total contribution by
and
distribution to owners
640,679 453,889 - - - - 1,094,568
============================= ========= ============================== =============
Balance at 30 June 2020 4,138,936 5,578,789 - -
- (12,830,391) (3,112,666)
The currency translation reserve comprised all foreign currency
adjustments arising from the translation of the nancial statements
of the foreign operation. During the period to 30 June 2019, the
Board decided that a number of the reserves related to historic
balances are no longer relevant given the changes in the group
during the period. The merger reserve, translation reserve and
share-based payment reserve were
transferred to retained de cit in the period ended 30 June 2019.
Consolidated Statement of Cash Flows
FOR THE YEARED 30 JUNE 2020
Year ended Period ended
30 June 30 June
2020 2019
Notes GBP GBP
============================================== ======= =========== =============
Cash ows from operating activities
============================================== ======= =========== =============
Total comprehensive loss for the period (2,390,121) (6,260,394)
============================================== ======= =========== =============
(Pro t)/Loss from discontinued operations 5 (450,062) 4,137,879
============================================== ======= =========== =============
Depreciation 3 2,503 417
============================================== ======= =========== =============
Finance costs 6 353,120 1,818,613
============================================== ======= =========== =============
(2,484,560) (303,485)
============================================== ======= =========== =============
Increase in trade and other receivables (120,213) -
============================================== ======= =========== =============
(Decrease)/increase in trade and other
payables 1,212,679 66,000
============================================== ======= =========== =============
(Decrease) in provisions (6,000) -
============================================== ======= =========== =============
Operating cash ows used by continuing
activities (1,398,094) (237,485)
============================================== ======= =========== =============
Operating cash ows generated from/(used
by) discontinued operations (204,561) (3,241,618)
============================================== ======= =========== =============
Net cash used in operating activities (1,602,655) (3,479,103)
============================================== ======= =========== =============
Cash ows from investing activities
============================================== ======= =========== =============
Purchase of property, plant and equipment 9 (18,000) (7,510)
============================================== ======= =========== =============
Purchase of intangible assets 10 (21,600) -
============================================== ======= =========== =============
Investing cash ows used by continuing
activities (39,600) (7,510)
============================================== ======= =========== =============
Investing cash ows used by discontinued
operations - (23,919)
============================================== ======= =========== =============
Net cash used in investing activities (39,600) (31,429)
============================================== ======= =========== =============
Cash ows from nancing activities
============================================== ======= =========== =============
Interest paid 6 (353,120) (604,050)
============================================== ======= =========== =============
Repayment of leases (47,438) (88,747)
============================================== ======= =========== =============
Loan from director 16,613 -
============================================== ======= =========== =============
Repayment of loan from director (4,340) -
============================================== ======= =========== =============
Issue of share capital - 2,060,950
============================================== ======= =========== =============
Costs of issuing shares - (230,575)
============================================== ======= =========== =============
Issue of convertible loan notes 2,195,000 2,700,000
============================================== ======= =========== =============
Financing cash ows from continuing activities 1,807,055 3,837,578
============================================== ======= =========== =============
Financing cash ows used by discontinued
operations - (429,490)
============================================== ======= =========== =============
Net cash ows from nancing activities 1,807,055 3,408,088
============================================== ======= =========== =============
Net increase/(decrease) in cash and cash
equivalents 164,800 (102,444)
============================================== ======= =========== =============
Cash and cash equivalents at beginning
of period 15,597 118,041
============================================== ======= =========== =============
Effect of foreign exchange rate changes - -
============================================== ======= =========== =============
Cash and cash equivalents at period end 13 180,397 15,597
============================================== ======= =========== =============
Company Statement of Financial Position
AS AT 30 JUNE 2020
30 June 31 December
2020 2019
Notes GBP GBP
============================== ===== ============ =============
Non-current assets
============================== ===== ============ =============
Property, plant and equipment 9 4,590 7,093
============================== ===== ============ =============
Investments 11 2 -
============================== ===== ============ =============
Non-current assets 4,592 7,093
============================== ===== ============ =============
Current assets
============================== ===== ============ =============
Trade and other receivables 12 9,116 -
============================== ===== ============ =============
Cash and cash equivalents 13 144,138 4,339
============================== ===== ============ =============
153,254 4,339
Total assets 157,846 11,432
============================== ===== ============ =============
Equity
============================== ===== ============ =============
Share capital 14 4,138,936 3,498,257
============================== ===== ============ =============
Share premium 15 5,578,789 5,124,900
============================== ===== ============ =============
Share-based payment reserve - -
============================== ===== ============ =============
Retained de cit 15 (12,524,595) (10,186,141)
============================== ===== ============ =============
(2,806,870) (1,562,984)
============================== ===== ============ =============
Non-current liabilities
============================== ===== ============ =============
Loans and borrowings 17 - 11,141
============================== ===== ============ =============
- 11,141
============================== ===== ============ =============
Current liabilities
============================== ===== ============ =============
Trade and other payables 16 1,225,122 1,494,997
============================== ===== ============ =============
Loans and borrowings 17 1,739,594 68,278
============================== ===== ============ =============
2,964,716 1,563,275
============================== ===== ============ =============
Total liabilities 2,964,716 1,574,416
Total equity and liabilities 157,846 11,432
============================== ===== ============ =============
The Company's loss and total comprehensive loss for the year
ended 30 June 2020 was GBP2,338,454 (Period to 30 June 2019:
GBP7,177,280).
Company Statement of Changes in Equity
FOR THE YEARED 30 JUNE 2020
Share-based
Share capital Share payments Retained Total
premium reserve de cit equity
=========================
GBP GBP GBP GBP GBP`
========================= ======================== ================ =========== ================ ================
Balance at 31 December
2017 162,053 3,460,854 331,975 (3,352,643) 602,239
========================= ======================== ================ =========== ================ ================
Loss for the period - - - (7,177,280) (7,177,280)
Total comprehensive loss
for
period - - - (7,177,280) (7,177,280)
========================= ======================== ================ =========== ================ ================
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
========================= ======================== ================ =========== ================ ================
Balance at 30 June 2019 3,498,257 5,124,900 - (10,186,141) (1,562,984)
========================= ======================== ================ =========== ================ ================
Loss for the year - - - (2,338,454) (2,338,454)
========================= ======================== ================ ===============================================
Total comprehensive loss
for
year - - - (2,338,454) (2,338,454)
========================= ======================== ================ ===============================================
Transactions with owners
========================= ======================== ================ ===============================================
Share-based payment - - - - -
charge
========================= ======================== ================ ===============================================
Issue of shares 640,679 453,889 - - 1,094,568
========================= ======================== ================ ===============================================
Cost of placings - - - - -
Total contributions by
and
distributions to owners 640,679 453,889 - - 1,094,568
========================= ======================== ================ ===============================================
Balance at 30 June 2020 4,138,936 5,578,789 - (12,524,595) (2,806,870)
========================= ======================== ================ ===============================================
FOR THE YEARED 30 JUNE 2020
1. ACCOUNTING POLICIES
Basis of preparation
These nancial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("adopted IFRS") and with those parts of the
Companies Act 2006 applicable to companies preparing their accounts
under adopted IFRS.
On 18 March 2019, a new Board was appointed to lead the Group in
a new direction. In order to give the new Board the necessary time
to prepare the nancial statements and resolve legacy issues that
they inherited from their predecessors, the decision was made to
extend the prior accounting period of the Group by 6 months from 31
December to 30 June. The comparative nancial statements cover the
18 month period from 1 January 2018 to 30 June 2019. As these
nancial statements cover a 12 month period, they are not entirely
comparable to the previous period.
These consolidated nancial statements are presented in Pounds
Sterling ('GBP'), which is considered by the directors to be the
functional and presentation currency.
The Company's individual statement of comprehensive income has
been omitted from the Group's annual nancial statements having
taken advantage of the exemption not to disclose under Section
408(3) of the Companies Act 2006.
Going concern
The Directors consider it is appropriate to prepare the Group
and Parent Company's nancial statements on the basis that they are
able to continue to operate for a period of at least 12 months from
the date of approving these nancial statements.
As noted in the Strategic Report on page 7 when making this
assessment the directors have prepared forecasts which consider the
expected level of expenditure over the course of the review period
together with the anticipated revenues arising from the new
business and acquisitions completed shortly after the period end.
Key to the compilation of the forecasts central to the Directors'
assessment of going concern are the following factors:
-- The company is at an early stage of development and is not
currently pro table. Despite strong con dence in its business plan
and forecasts, the Directors recognise there is a risk that it may
require more funding but not be able to nd agreement with a funding
partner. The Company completed a placing in November 2020 which
provided new funds via equity and debt to secure the medium-to-long
term future of the business. As well as the existing management
services agreements, the Company also signed a signi cant contract
with Greencastle MM LLP, a digital media business, the proceeds of
which allow the Company to continue to operate as a going
concern.
-- The Company has, like most, been affected by the COVID-19
pandemic and has lost some revenue as discussed above however the
Company is con dent that its risk to the pandemic has been
mitigated. The Company has completed fundraising which will reduce
the reliance of the Company on revenue. More importantly, the
overriding business model is to procure or manage digital
publishers and the Company has not seen, nor does it foresee, a
decrease in online audiences or a behavioural change as a result of
the pandemic. The Company therefore has con dence in its ability to
continue to recognise revenue. It is important to note that
advertising as an industry will be affected and there has been a
decrease in certain media budgets although through its management
services agreements, the Company has still been able to secure
sizeable contracts despite this.
While the Directors remain satis ed that the assumptions they
have used in the forecasts to assess that the Group and Parent
Company are a going concern, there does remain a fundamental
uncertainty around the future funding, should it be required.
Notes to the Consolidated Financial Statements
Basis of consolidation
The Group nancial 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 signi cantly 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 nancial statements of subsidiaries are included in the
consolidated nancial statements from the date that control
commences until the date that control ceases.
The results of subsidiaries acquired or disposed in the period
are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
The results and net assets of subsidiaries whose accounts are
denominated in foreign currencies are retranslated into Sterling at
average rates and year-end rates respectively.
Where the Group has the power to participate in (but not
control) the nancial and operating policy decisions of another
entity, it is classi ed as an associate. Associates are initially
recognised in the consolidated statement of nancial position at
cost. Subsequently associates are accounted for using the equity
method, where the Group's share of post-acquisition pro ts and
losses and other comprehensive income is recognised in the
consolidated statement of pro t and loss and other comprehensive
income (except for losses in excess of the Group's investment in
the associate unless there is an obligation to make good those
losses).
Business combinations
The Group applies the acquisition method of accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition date fair values of assets transferred, liabilities
incurred and equity interests issued by the Group. Acquisition
costs are expensed as incurred.
Revenue recognition
Revenue represents the amount of consideration to which the
Group expects to be entitled in exchange for the provision of it's
services to the client, net of discounts and sales taxes.
For the year ended 30 June 2020, the Group used the ve-step
model as prescribed under IFRS15 on the Group's revenue
transaction. This included the identi cation of the contract,
identi cation of the performance obligations, determination of the
transaction price, allocation of the transaction price to the
performance obligations and recognition of revenue. The point of
recognition arises when the Group satis es the performance
obligation by transferring control of a promised service to the
customer which could occur over time or at a point in time.
Provision is made for all foreseeable losses where the Company
believes that a contract will deem to be unpro table, or a client
fails to remunerate the Company for services provided.
During the year, 84% of total revenue arose from the contract
with one customer.
Sale of Services
During the year the company entered into a contract to deliver
management services to a digital and social publisher. With regards
to the provision of said services, a price is agreed in advance and
these services are provided over the term of the contract. Revenue
is recognised on a straight line basis over the term of the
contract and the client is billed monthly in arrears. The contract
also contains a variable element of revenue. The company is
entitled to a pro t share on a rolling 3 month basis. The company
would invoice the customer for the pro t share on a quarterly
basis. The income would be recognised in the period that the pro t
was made by the customer. Any pro t share due for the period which
was not invoiced until after the period end will be included in
accrued income.
Revenue that has been billed to the client, but which is yet to
be paid is accrued within trade receivables.
Discontinued operations
Discontinued operations represent major operations of the
business that the Group have decided to terminate. The post-tax pro
t or loss of the discontinued operations is presented as a single
line on the face of the consolidated income statement. The
presentation of discontinued operations within prior periods is
restated to re ect consistent classi cation of discontinued
operations across all periods presented.
1. ACCOUNTING POLICIES (continued) 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.
Retirement bene t costs
The Group operates de ned contribution retirement bene t scheme.
Payments to these schemes are charged as an expense in the period
to which they relate. The assets of the scheme are held separately
from those of the Group in independently administered funds.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. The tax currently payable is based on taxable pro
t for the year. Taxable pro t differs from net pro t as reported in
the income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible.
Deferred tax is the tax expected to be payable or recoverable on
temporary differences between the carrying amounts of assets and
liabilities in the nancial statements and the corresponding tax
bases used in the computation of taxable pro t, and is accounted
for using the balance sheet liability method. Deferred tax
liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable pro ts will be available against
which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a
transaction that affects neither the tax pro t nor the accounting
pro t.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable pro ts will be available to allow
all or part of the asset to be recovered.
Deferred tax is measured on an undiscounted basis using the tax
rates that are expected to apply in the period when the liability
is settled or the asset is realised. Deferred tax is charged or
credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred
tax is also dealt with in equity.
Property, plant and equipment
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 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 xed assets
Intangible assets comprise capitalised computer software which
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
Intangible assets also comprise intellectual property which is
initially measured at cost. The useful economic life of the asset
is considered to be such that any amortisation charge would be
immaterial to the nancial statements. The directors have therefore
decided that an annual impairment review rather than an systematic
amortisation is more appropriate for this asset.
Impairment of non-current assets
At each reporting date the Group reviews the carrying amounts of
its property, plant and equipment and intangible assets to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised
as an expense immediately, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Financial assets
Financial assets are recognised when the Group becomes a party
to the contractual provisions of the nancial asset.
Financial assets are derecognised when the contractual rights to
the cash ows from the nancial assets expire, or when the nancial
asset and substantially all of the risks and rewards are
transferred.
The nancial assets of the Group are initially measured at fair
value adjusted for transaction costs (where applicable). Financial
assets are classi ed into the following categories:
- Amortised cost
- Fair value through pro t or loss (FVTPL)
- Fair value through other comprehensive income (FVOCI) The
classi cation is determined by both:
- The Group's business model for managing the nancial asset
- The contractual cash ow characteristics of the nancial asset
All income and expenses relating to nancial assets that are
recognised in pro t or loss are presented within nance costs and
nance income.
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as
FVTPL):
- They are held within a business model whose objective is to
hold the nancial assets and collect its contractual cash ows
- The contractual terms of the nancial assets give rise to cash
ows that are solely payments of principal and interest on the
principal amount outstanding
After initial recognition, these are measured at amortised cost
using the effective interest method. Discounting is omitted where
its effect is immaterial. The Group's cash and cash equivalents,
trade and other receivables fall into this category.
An impairment loss in respect of a nancial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash ows
discounted at the asset's original effective interest rate. Losses
are recognised in pro t or loss and re ected in an allowance
against trade and other receivables. 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
pro t or loss.
1. ACCOUNTING POLICIES (continued)
Trade and other receivables
The group makes use of a simpli ed approach in accounting for
trade and other receivables and records the loss allowance as
lifetime expected credit losses. These are the expected shortfalls
in contractual cash ows, considering the potential for default at
any point during the life of the nancial instrument. In
calculating, the Group uses its historical experience, external
indicators and forward-looking information to calculate the
expected credit losses using a provision matrix.
The Group assesses impairment of trade and other receivables on
a collective basis.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. These are initially and subsequently recorded at fair
value.
Financial liabilities
The Group's principal nancial liabilities include trade and
other payables, leases and convertible debt none of which would be
classi ed as fair value through pro t or loss.
Therefore, these nancial liabilities are classi ed as nancial
liabilities at amortised cost, as de ned below: Other nancial
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 nancial 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.
Convertible loan notes
Convertible loan notes issued by the Group comprise loan notes
that can be converted to ordinary shares at the option of the
holder.
The liability component of the convertible loan notes is
recognised on the date of inception and is determined using a
market interest rate for an equivalent non-convertible instrument.
The equity element is recognised as the difference between the
value of the nancial instrument as a whole and the value of the
liability component. Any directly attributable transaction costs
are allocated to the equity and liability components in proportion
to their initial carrying amounts.
Subsequently, the liability component of a compound nancial
instrument is measured at amortised cost using the effective
interest rate method.
Leased assets
The company has elected not to recognise right-of-use assets and
lease liabilities for short-term leases that have a lease term of
12 months or less, or for leases of low-value assets. The payments
associated with these leases are recognised in pro t or loss on a
straight-line basis over the lease term.
Share capital
The group's ordinary shares are classi ed as equity
instruments.
New standards adopted
The following new and revised Standards and Interpretations have
been issued and are effective for the current nancial year of the
Group:
IFRS 16 was adopted on 1 July 2019 without restatement of
comparative gures. No transitional adjustments were required upon
adoption.
New standards, interpretations and amendments not yet
effective
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the group has decided
not to adopt early:
-- AS 1 Presentation of Financial Statements and IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
(Amendment - De nition of Material) (effective 1 January 2020)
-- IFRS 3 Business Combinations (Amendment - De nition of
Business) (effective 1 January 2020)
-- Revised Conceptual Framework for Financial Reporting
(effective 1 January 2020) Amendments to IFRS 9, IAS 39 and IFRS 7:
Interest Rate Benchmark Reform (effective 1 January 2020)
-- Amendments to IAS 1: Classi cation of Liabilities as Current
or Non-current (effective 1 January 2022).
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.
Signi cant management judgements are as follows:
Legacy Issues
-- Due to the change in the Board, key management and operations
of the Group that took place in March 2019, it is possible that
there are unrecorded liabilities relating to the now discontinued
activities about which the Board are unaware. The Board have
undertaken, to the extent possible, a thorough review of the
creditor position of the Parent Company and the Group, with a core
focus on the legacy business operations. Notwithstanding the
Board's assessment, there is a residual risk unforeseen liabilities
may arise. However, due to the publicity around the new business,
shutting down the old one and drawing down on the EHGOS facility, a
number of claims were made against the company. Since the period
end, no additional creditors have made a claim against the Group or
the Parent Company. While it is important to consider these
liabilities in these accounts the Board have however made a
judgment that the risk of material unrecorded actual or contingent
liabilities is now more than remote.
-- The Group's former Board under through its Cellplan
subsidiary was promoting bespoke stem cell medical insurance and
launched a website to market the product. After due enquiry, the
new Board is not aware that any such policies were issued. There
does however remain a residual risk that policies may have been
issued. The board consider that the incidence and nancial impact is
now more than remote.
3. LOSS FROM OPERATIONS
18 Month
Year ended period
ended
==============================================
30 June 30 June
==============================================
2020 2019
GBP GBP
============================================== ============ =============
The loss for the period is stated after
charging:
============================================== ============ =============
Depreciation 2,503 417
============================================== ============ =============
Auditors remuneration - audit services 40,000 42,000
============================================== ============ =============
Auditors remuneration - corporate nance
services 63,500 -
============================================== ============ =============
Expenses by nature GBP GBP
============================================== ============ =============
Legal and professional fees 632,978 -
============================================== ============ =============
Consultancy fees 213,098 -
============================================== ============ =============
Other supplies and external services 359,101 83,979
============================================== ============ =============
Staff costs 999,686 243,506
Total operating expenses 2,204,863 327,485
============================================== ============ =============
Depreciation, amortisation and impairment
of assets 2,503 417
============================================== ============ =============
Impairment of loans 150,000 -
Total administrative expenses 2,357,366
============================================== ============ =============
Direct costs incurred in connection with
EHGOF nancing facility 262,000 -
2,619,366 327,902
============================================== ============ =============
4. STAFF COSTS
18 Month
Year ended period
ended
30 June 30 June
2020 2019
GBP GBP
============================================== ============ =============
Staff costs (including directors) comprise:
============================================== ============ =============
Wages and salaries 905,958 1,473,681
============================================== ============ =============
De ned contribution pension cost 25,370 53,315
============================================== ============ =============
Social security contributions and similar
taxes 68,358 144,073
============================================== ============ =============
Share-based payment expense - 11,807
999,686 1,682,876
Less: staff costs relating to discontinued
activities - (1,439,370)
Staff costs relating to continuing activities 999,686 243,506
============================================== ============ =============
4. STAFF COSTS (continued)
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:
18 Month
Year ended period
ended
30 June 30 June
2020 2019
Employee numbers GBP GBP
================================================ ============ ========
The average number of staff employed by the
group during the period amounted to:
================================================ ============ ========
General and administration 7 15
================================================ ============ ========
Less: staff involved in discontinued operations - (8)
7 7
================================================ ============ ========
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 Report of the remuneration committee on page 20 in the
Accounts.
5. DISCONTINUED OPERATIONS
In March 2019 the Board made the decision to discontinue the
stem cell research operations. The operating loss until the date of
discontinuation of the operations is summarised as follows:
Year ended 18 Month
period
ended
=====================================
30 June 30 June
=====================================
2020 2019
GBP GBP
===================================== ========== ===========
Revenue - 21,081
===================================== ========== ===========
Administrative expenses - write back
of creditor balances 450,062 (3,472,771)
===================================== ========== ===========
Impairment of non-current assets - (629,616)
===================================== ========== ===========
Operating pro t/(loss) 450,062 (4,081,306)
===================================== ========== ===========
Finance income - 2,174
===================================== ========== ===========
Finance expense - (31,747)
===================================== ========== ===========
Pro t/(loss) before taxation 450,062 (4,110,879)
===================================== ========== ===========
Taxation - (3,000)
===================================== ========== ===========
Pro t/(loss) for the period 450,062 (4,113,879)
===================================== ========== ===========
Other comprehensive expense - -
Total comprehensive pro t/(loss) for
the period 450,062 (4,113,879)
===================================== ========== ===========
6. FINANCE COSTS
18 Month
Year ended period
ended
30 June 30 June
2020 2019
GBP GBP
======================================= ============ =============
Finance costs
======================================= ============ =============
Penalties on redemption of convertible
loan notes 277,380 1,814,563
======================================= ============ =============
Penalties on make whole agreement 72,000 -
======================================= ============ =============
Interest on leases 3,740 4,050
Total nance expense 353,120 1,818,613
======================================= ============ =============
7. TAXATION
18 Month
Year ended period
ended
30 June 30 June
2020 2019
GBP GBP
======================================= ============ =============
Current tax
Total current tax - -
======================================= ============ =============
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:
Year ended 18 Month
period
ended
==============================================
30 June 30 June
==============================================
2020 2019
GBP GBP
============================================== ============= =============
Loss before taxation (2,390,121) (6,260,394)
============================================== ============= =============
Tax using the parent company's domestic
tax rate of 19% (2019: 19%) (454,123) (1,189,475)
============================================== ============= =============
Effects of:
============================================== ============= =============
Unrelieved tax losses and other deductions
arising in the period 383,779 720,478
============================================== ============= =============
Expenses not deductible for taxation purposes 70,344 468,997
Total tax charged in the income statement - -
============================================== ============= =============
The deferred taxation of GBP1,522,231 (2019: GBP1,178,850)
attributable to losses arising in the year and for losses carried
forward has not been recognised in these accounts due to the
uncertainty over whether this will be recovered.
8. LOSS PER SHARE
18 Month
Year ended period
ended
=============================================================
30 June 30 June
==================================== ========= ============
2020 2019
pence pence
==================================== ========= ============ ============= ===========
Numerator
==================================== ========= ============ ============= ===========
Loss for the period (2,371,776) (6,260,394)
==================================== ========= ============ ============= ===========
Denominator
==================================== ========= ============ ============= ===========
Weighted average number of ordinary
shares used in basic EPS 2,500,412,604 282,378,357
==================================== ========= ============ ============= ===========
Effects of:
==================================== ========= ============ ============= ===========
Employee share options - 2,808,454
Weighted average number of ordinary
shares used in diluted EPS 2,500,412,604 285,186,811
==================================== ========= ============ ============= ===========
Basic and diluted loss per share
(pence)
==================================== ========= ============ ============= ===========
- continuing operations (0.11) (0.75)
==================================== ========= ============ ============= ===========
- discontinued operations 0.00 (0.01)
==================================== ========= ============ ============= ===========
9. PROPERTY, PLANT AND EQUIPMENT
GROUP Plant Leasehold Computer
&
Machinery Improvements Hardware Total
GBP GBP GBP GBP
==================================== ========= ============ ============= ===========
Cost
==================================== ========= ============ ============= ===========
Balance at 1 January 2018 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
==================================== ========= ============ ============= ===========
Additions 18,000 - - -
Balance at 30 June 2020 373,772 185,849 83,095 624,716
==================================== ========= ============ ============= ===========
Amortisation
==================================== ========= ============ ============= ===========
Balance at 1 January 2018 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
==================================== ========= ============ ============= ===========
Charge for the year - - 2,503 2,503
Balance at 30 June 2020 355,772 185,849 78,505 620,126
==================================== ========= ============ ============= ===========
Carrying amounts
==================================== ========= ============ ============= ===========
Balance at 30 June 2020 18,000 - 4,590 22,590
Balance at 30 June 2019 - - 7,093 7,093
==================================== ========= ============ ============= ===========
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Right of use asset
The group does not lease any buildings or equipment which are
required to be disclosed under IFRS 16.
COMPANY Computer Hardware
Total
GBP GBP
========================== =========================================================== =======
Cost
========================== =========================================================== =======
Balance at 1 January 2018 62,690 62,690
========================== =========================================================== =======
Additions 14,231 14,231
Balance at 30 June 2019 76,921 76,921
========================== =========================================================== =======
Additions - -
Balance at 30 June 2020 76,921 76,921
========================== =========================================================== =======
Amortisation
========================== =========================================================== =======
Balance at 1 January 2018 20,213 20,213
========================== =========================================================== =======
Charge for the period 417 417
========================== =========================================================== =======
Impairment in period 49,198 49,198
Balance at 30 June 2019 69,828 69,828
========================== =========================================================== =======
Charge for the year 2,503 2,503
Balance at 30 June 2020 72,331 72,331
========================== =========================================================== =======
Carrying amounts
========================== =========================================================== =======
Balance at 30 June 2020 4,590 4,590
Balance at 30 June 2019 7,093 7,093
========================== =========================================================== =======
10. INTANGIBLE ASSETS
Intellectual Computer
Property software Total
GBP GBP GBP
========================== ============ ========= =======
Cost
========================== ============ ========= =======
Balance at 1 January 2018 - 139,106 139,106
========================== ============ ========= =======
Additions - - -
Balance at 30 June 2019 - 139,106 139,106
========================== ============ ========= =======
Additions 21,600 - 39,600
Balance at 30 June 2020 21,600 139,106 178,706
========================== ============ ========= =======
Amortisation
========================== ============ ========= =======
Balance at 1 January 2018 - - -
========================== ============ ========= =======
Impairment - 139,106 139,106
Balance at 30 June 2019 - 139,106 139,106
========================== ============ ========= =======
Impairment - - -
Balance at 30 June 2020 - 139,106 139,106
========================== ============ ========= =======
Carrying amounts
========================== ============ ========= =======
Balance at 30 June 2020 21,600 - 21,600
Balance at 30 June 2019 - - -
========================== ============ ========= =======
11. INVESTMENTS
COMPANY
30 June 30 June
2020 2019
GBP GBP
========================= ========================== =============== ================ =========
Investments in 2 -
subsidiaries
========================= ========================== =============== ================ =========
Subsidiaries
Registered Country of Nature of
Entity office address incorporation business Notes
========================= ========================== =============== ================ =========
WideCells International Waverley House, 9 Noel
Limited Street,
London, W1F 8GQ United Kingdom Holding company (c)
========================= ========================== =============== ================ =========
WideCells Portugal Rua Da Casa Branca,
SA
97 Coimbra 3030-109, Portugal Trading company (a)
Portugal
========================= ========================== =============== ================ =========
WideAcademy Limited Waverley House, 9 Noel
Street,
London, W1F 8GQ United Kingdom Dormant company (a)
========================= ========================== =============== ================ =========
CellPlan Limited 27/28 Eastcastle Street,
London, W1W 8DH United Kingdom Dormant company (a)
========================= ========================== =============== ================ =========
CellPlan International Edi cio Tower Plaza
Lda Rotunda Eng,
Edgar Cardoso, no.
23, 11 F,
4400-676 Vila Nova Portugal Dormant company (b)
de Gaia, Portugal
========================= ========================== =============== ================ =========
Iconic Labs UK 27/28 Eastcastle Street,
Limited London,
W1W 8DH United Kingdom Trading company (c)
========================= ========================== =============== ================ =========
Iconic Labs IP 27/28 Eastcastle Street,
Limited
London, W1W 8DH United Kingdom Trading company (c)
========================= ========================== =============== ================ =========
Nuuco Media Limited 27/28 Eastcastle Street,
London, W1W 8DH United Kingdom Trading company (d)
========================= ========================== =============== ================ =========
Coalition Media 27/28 Eastcastle Street,
Limited
London, W1W 8DH United Kingdom Dormant company (f)
========================= ========================== =============== ================ =========
Associates
Registered Country of Nature of
Entity office address incorporation business Notes
========================= ========================== =============== ================ =========
Medium Channel 27/28 Eastcastle Street,
Media Limited
London, W1W 8DH United Kingdom Dormant company (e)
========================= ========================== =============== ================ =========
Notes: (a) 100% owned by WideCells International Limited (b) 100% owned by CellPlan Limited
(c) 100% owned by Iconic Labs plc (d) 100% owned by Iconic Labs
UK Limited
(e) 24% owned by Iconic Labs plc (f) 50% owned by iconic Labs UK
Limited From September 2019, Widecells Limited has been placed into
liquidation.
From November 2019, Widecells Espana has been placed into
liquidation.
12. TRADE AND OTHER RECEIVABLE
GROUP 30 June 30 June
2020 2019
GBP GBP
=============================== ========= =======
Trade receivables 110,409 -
=============================== ========= =======
Other receivables 25,726 -
Trade and other receivables 136,135 -
=============================== ========= =======
VAT recoverable - 15,922
Total receivables 136,135 15,922
=============================== ========= =======
Trade and other receivables
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 nancial
position date is the fair value of each class of receivable.
Book values approximate to fair value at
30 June 2020 and 30 June 2019.
COMPANY 30 June 30 June
2020 2019
GBP GBP
========================================= ========= =========
Other receivables 9,116 -
9,116 -
========================================= ========= =========
13. CASH AND CASH EQUIVALENTS
GROUP 30 June 30 June
2020 2019
GBP GBP
========================================= ========= =========
Cash at bank available on demand 180,397 15,694
========================================= ========= =========
Bank overdraft - (97)
Total cash and cash equivalents 180,397 15,597
========================================= ========= =========
COMPANY 30 June 30 June
2020 2019
GBP GBP
========================================= ========= =========
Cash at bank available on demand 144,138 4,339
Total cash and cash equivalents 144,138 4,339
========================================= ========= =========
14. SHARE CAPITAL
30 June 30 June 2019
2020 GBP Number GBP
Number
===================================================================================================== ========== ======================== ==========
Authorised, allotted and fully
paid - classi ed as equity
================================================= ================================================== ========== ======================== ==========
Ordinary shares of GBP0.0025
each - - 1,399,302,698 3,498,257
================================================= ================================================== ========== ======================== ==========
Ordinary shares of GBP0.00001
each 6,248,241,015 62,482 - -
================================================= ================================================== ========== ======================== ==========
Deferred shares of GBP0.00249
each 1,637,129,905 4,076,454 - -
Total 7,885,370,920 4,138,936 1,399,302,698 3,498,257
================================================= ================================================== ========== ======================== ==========
At 1 July 2019, the company had 1,399,302,698 Ordinary shares of
GBP0.0025 in issue. During the period, the company issued
237,837,207 Ordinary shares of GBP0.0025 as follows:
-- 20 August 2019 - 237,827,207 shares issued in respect of the
conversion of convertible loan notes, at par.
On 27 February 2020, 1,637,129,905 Ordinary shares of GBP0.0025
were sub-divided into 1,637,129,905 Ordinary shares with a nominal
value of GBP0.00001 and 1,637,129,905 Deferred shares with a
nominal value of GBP0.00249.
During the period, the company issued 4,611,111,110 Ordinary
shares of GBP0.00001 each as follows:
-- 14 April 2020 - 555,555,555 shares issued in respect of a
conversion of a convertible band, at a premium of 0.00009p per
share;
-- 28 April 2020 - 555,555,555 shares issued in respect of a
conversion of a convertible band, at a premium of 0.00009p per
share;
-- 28 May 2020 - 800,000,000 shares issued in respect of a
conversion of a convertible band, at a premium of 0.00009p per
share;
-- 28 May 2020 - 500,000,000 shares issued in respect of a
conversion of a convertible band, at a premium of 0.00019p per
share;
-- 2 June 2020 - 500,000,000 shares issued in respect of a
conversion of a convertible band, at a premium of 0.00009p per
share;
-- 15 June 2020 - 1,700,000,000 shares issued in respect of a
conversion of a convertible band, at a premium of 0.00009p per
share.
At 30 June 2020, the company had 6,248,241,015 Ordinary shares
of GBP0.00001 in issue.
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.
14. SHARE CAPITAL (continued)
-- 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 t (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. The Ordinary shares 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 and deferred shares are recorded as equity.
15. RESERVES
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capita
in excess of nominal value
Retained de cit All other net gains and losses and transactions
with owners (e.g. dividends) not recognised elsewhere
16. TRADE AND OTHER PAYABLES
GROUP 30 June 30 June
2020 2019
GBP GBP
============================================ ========= =========
Trade payables 587,747 609,558
============================================ ========= =========
Other payables 620,931 831,587
============================================ ========= =========
Accruals 328,713 77,100
============================================ ========= =========
Tax and social security 162,403 218,061
Total 1,699,794 1,736,306
============================================ ========= =========
Book values approximate to fair values at
30 June 2020 and 30 June 2019.
COMPANY 30 June 30 June
2020 2019
GBP GBP
============================================ ========= =========
Trade payables 539,418 381,749
============================================ ========= =========
Other payables 592,824 831,587
============================================ ========= =========
Accruals 92,880 77,100
============================================ ========= =========
Tax and social security - 204,561
Total 1,225,122 1,494,997
============================================ ========= =========
Book values approximate to fair values at
30 June 2020 and 30 June 2019.
17. LOANS AND BORROWING
GROUP 30 June 30 June
2020 2019
GBP GBP
============================================ ========= =========
Non-Current
============================================ ========= =========
Leases - 11,141
Total - 11,141
============================================ ========= =========
30 June 30 June
2020 2019
GBP GBP
============================================ ========= =========
Current
============================================ ========= =========
Leases 31,981 68,278
============================================ ========= =========
Directors' loans 12,613 -
============================================ ========= =========
Convertible loans 1,695,000 -
Total 1,739,594 68,278
============================================ ========= =========
Book values approximate to fair values at
30 June 2020 and 30 June 2019.
During the year, the company issued convertible loan notes
totalling GBP2,155,000. At 30 June 2020, GBP1,695,000 was still
outstanding and included within loans and borrowings.
Leases are secured on the relevant
assets.
COMPANY 30 June 30 June
2020 2019
GBP GBP
=================================== ========= =========
Non-Current
=================================== ========= =========
Leases - 11,141
Total - 11,141
=================================== ========= =========
30 June 30 June
2020 2019
GBP GBP
=================================== ========= =========
Current
=================================== ========= =========
Leases 31,981 68,278
=================================== ========= =========
Directors' loans 12,613 -
=================================== ========= =========
Convertible loans 1,695,000 -
Total 1,739,594 68,278
=================================== ========= =========
18. PROVISIONS
30 June 30 June
2020 2019
GBP GBP
============================================ ======== =======
Provisions brought forward 40,000 -
============================================ ======== =======
Provision for costs relating to liquidation
of subsidiary undertakings - 40,000
============================================ ======== =======
Released against costs in the period (6,000) -
Provisions carried forward 34,000 40,000
============================================ ======== =======
As detailed further in the strategic report, last year the Group
made the decision to cease stem cell research operations. This has
led to number of subsidiary undertakings being liquidated. A
provision for the anticipated costs relating to the liquidation are
included in these nancial statements.
19. FINANCIAL INSTRUMENTS - RISK MANAGEMENT
The group is exposed through its operations to the following
nancial risks:
-- Credit risk.
-- Market risk.
-- Liquidity risk.
In common with other businesses, the group is exposed to risks
that arise from use of nancial instruments. This note describes the
group's objectives, policies and processes for managing those risks
and the methods used to measure them.
The principal nancial instruments used by the group, from which
the nancial instrument risks arise, are as follows:
-- Cash and cash equivalents.
-- Trade and other payables.
-- Loans and borrowings.
A summary of the nancial instruments held by category is
provided below:
-- Financial assets - amortised cost
-- Financial liabilities - amortised
cost
GROUP 2020 2019
GBP GBP
====================================== =========== ===========
Cash and cash equivalents 180,397 15,597
====================================== =========== ===========
Trade and other receivables 136,135 -
Total nancial assets - amortised
cost 316,532 15,597
====================================== =========== ===========
2020 2019
GBP GBP
====================================== =========== ===========
Trade and other payables 1,208,678 1,441,145
====================================== =========== ===========
Loans and borrowings 1,739,594 79,419
Total liabilities - amortised cost 2,948,272 1,520,564
====================================== =========== ===========
19. FINANCIAL INSTRUMENTS - RISK MANAGEMENT
(continued)
COMPANY 2020 2019
GBP GBP
============================================ =========== ===========
Cash and cash equivalents 144,138 4,339
============================================ =========== ===========
Trade and other receivables 9,116 -
Total nancial assets - amortised cost 153,254 4,339
============================================ =========== ===========
2020 2019
GBP GBP
============================================ =========== ===========
Trade and other payables 1,132,242 1,213,336
============================================ =========== ===========
Loans and borrowings 1,739,594 79,419
Total liabilities - amortised cost 2,871,836 1,292,755
============================================ =========== ===========
The Board has overall responsibility for the determination of
the group's risk management objectives and policies.
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 exibility. Further details regarding
these policies are set out below:
Credit risk
Credit risk is the risk of nancial loss to the Group if a
counterparty to the nancial instrument fails to meet its
contractual obligations. It is Group policy 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 nancial institutions. For banks and nancial
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 2020 2019
GBP GBP
========================================== ========= ========
Cash held at HSBC - S&P Rating AA 176,214 11,444
========================================== ========= ========
Cash held at Santander - S&P rating A 4,183 4,153
Total nancial assets 180,397 15,597
========================================== ========= ========
COMPANY 2020 2019
GBP GBP
========================================== ========= ========
Cash held at HSBC - S&P Rating AA 144,138 4,339
Total nancial assets 144,138 4,339
========================================== ========= ========
19. FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Market
risk
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.
As of 30 June 2020 the group's exposure to foreign exchange risk
was not material as the overseas operations had been
discontinued.
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 nancial obligations as they fall due.
The Board will continue to monitor long term cash projections
and will consider raising funds as required.
The following table sets out the contractual maturities
(representing undiscounted contractual cash- ows) of nancial
liabilities:
GROUP Between Between Between
Up to 3 months 3 and 12 1 and 2 2 and 5 Over
months years years 5 years
2020 GBP GBP GBP GBP GBP
=========================== ================ ========= ======== ======== =========
Trade and other payables 1,141,178 67,500 - - -
=========================== ================ ========= ======== ======== =========
Leases 28,877 3,104 - - -
=========================== ================ ========= ======== ======== =========
Borrowings 1,695,000 12,613 - - -
Total 2,865,055 83,217 - - -
=========================== ================ ========= ======== ======== =========
Between Between Between
3 and 12 1 and 2 2 and 5
Up to Over
5
3 months months years years years
2019 GBP GBP GBP GBP GBP
=========================== ================ ========= ======== ======== =========
Trade and other payables 1,441,145 - - - -
=========================== ================ ========= ======== ======== =========
Finance leases 32,127 36,151 11,141 - -
Total 1,473,272 36,151 11,141 - -
=========================== ================ ========= ======== ======== =========
More details in regard to the line items are included in the
respective notes:
-- Trade and other payables - note 16
-- Loans and borrowing - note 17
At the balance sheet date, the Group had liabilities due for
settlement within 3 months of GBP2,865,055, compared to a cash
balance of GBP180,397. Since the year end, the Group have
renegotiated repayment terms with suppliers and have arranged a
further funding agreement to ensure that operating costs and legacy
liabilities can be settled.
GBP1,695,000 of borrowings re convertible loan notes which can
be settled by way of an issue of share capital.
19. FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued)
Capital risk management
The group monitors capital which comprises all components of
equity (i.e. share capital, share premium and accumulated de
cit).
The directors are aware of the need for the Company to obtain
capital in order to fund the growth of the business and are in
continual discussions with providers of both debt and equity
capital. The directors regularly review the status of such
discussions and aim at all times to have offers of capital funding
available to the Company which more than exceed the needs of the
Company over the coming period.
In the medium term and in addition to the need to safeguard the
entity's ability to continue as a going concern, the directors are
aware of the views of members on certain nancing structures and
therefore have set an objective to move towards a conventional,
simpli ed capital structure based on equity capital.
Further details about the directors' assessment of the Group's
ability to continue as a going concern and the key considerations
there to are set out in the Corporate Governance Report on page 10
of the Accounts.
At present the directors do not intend to pay dividends but will
reconsider the position in future periods, as the group becomes pro
table.
Reconciliation of movement in net cash
Repayment
of
Net cash at Loan notes Loan notes borrowings New loans Net
cash
1 July issued in the converted in (continuing in
at 30 June
2019 Cash ow period the period activities) the period
2019
GBP GBP GBP GBP GBP GBP GBP
Cash at bank and in hand 15,597 164,800 - - - - 180,397
Borrowings (79,419)
- (2,195,000) 500,000 47,438 (12,613) (1,739,594)
Total nancial liabilities (63,822)
164,800 (2,195,000) 500,000 47,438 (12,613) (1,559,197)
New
loans
Loan Repayment Loan Repayment In Net
Net cash notes of notes of the Other cash
at issued borrowings converted borrowings period non at
1 January in the (continuing in (discontinued (discontinued cash 30 June
Cash the
2018 ow period activities) period activities) activities) items 2019
============
GBP GBP GBP GBP GBP GBP GBP GBP GBP
============ ============ ========== ============ =========== ========== ============= ============= ======== =========
Cash at
bank
and in
hand 118,041 (102,444) -- -- -- -- -- -- 15,597
============ ============ ========== ============ =========== ========== ============= ============= ======== =========
Borrowings (1,065,260) -- (2,700,000) 88,747 2,700,000 865,172 (326,583) 358,505 (79,419)
Total
nancial
liabilities (947,219) (102,444) (2,700,000) 88,747 2,700,000 865,172 (326,583) 358,505 (63,822)
20. RETIREMENT BENEFITS
The group operates a de ned contribution pension scheme for the
bene t of its employees. The assets of the scheme are to be
administered by trustees in funds independent from those of the
group.
21. SHARE-BASED PAYMENTS
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:
2020 2019
Weighted Weighted
average average
exercise exercise
price 2020 price 2019
GBP Number GBP Number
========================================= ==================== ====== ================== ===============
Outstanding at beginning of accounting
period - - 0.0490 3,610,870
========================================= ==================== ====== ================== ===============
Options granted in WideCells - - - -
Group plc
========================================= ==================== ====== ================== ===============
Options cancelled in period - - 0.0490 (3,610,870)
Outstanding at period end - - - -
========================================= ==================== ====== ================== ===============
The Black-Scholes valuation model was used setting an implied
volatility of 50%, interest rate of 5% and dividend yield of 1%.
Each tranche of share options was valued separately using the
actual exercise price. The Group recognised total expenses of
GBP11,807 related to share based payment transactions in 2019. The
expense was included in the results of discontinued operations.
22. LEASES
The group is leasing the more expensive pieces of laboratory
equipment for the stem cell processing and storage facility in
Manchester. The future payments are as follows:
GROUP Minimum
lease payments Present
Interest value
2020 GBP GBP GBP
============================== ================================================= ========== ==============
Not later than one year 31,981 632 31,349
============================== ================================================= ========== ==============
Between one year and ve years - - -
============================== ================================================= ========== ==============
Later than ve years - - -
31,981 632 31,349
============================== ================================================= ========== ==============
Current liabilities 31,349
============================== ================================================= ========== ==============
Non-current liabilities -
============================== ================================================= ========== ==============
Minimum
lease Present
payments Interest value
2019 GBP GBP GBP
============================== ================================================= ========== ==============
Not later than one year 70,978 2,700 68,278
============================== ================================================= ========== ==============
Between one year and ve years 11,773 632 11,141
============================== ================================================= ========== ==============
Later than ve years - - -
82,751 3,332 79,419
============================== ================================================= ========== ==============
Current liabilities 68,278
============================== ================================================= ========== ==============
Non-current liabilities 11,141
============================== ================================================= ========== ==============
22. LEASES (continued)
COMPANY Minimum
lease
Present
payments Interest value
2020 GBP GBP GBP
===================================== ========= ======== =========
Not later than one year 31,981 632 31,349
===================================== ========= ======== =========
Between one year and ve years - - -
===================================== ========= ======== =========
Later than ve years - - -
31,981 632 31,349
===================================== ========= ======== =========
Current liabilities 31,349
===================================== ========= ======== =========
Non-current liabilities -
===================================== ========= ======== =========
Minimum
lease Present
payments Interest value
2019 GBP GBP GBP
===================================== ========= ======== =========
Not later than one year 70,978 2,700 68,278
===================================== ========= ======== =========
Between one year and ve years 11,773 632 11,141
===================================== ========= ======== =========
Later than ve years - - -
82,751 3,332 79,419
===================================== ========= ======== =========
Current liabilities 68,278
===================================== ========= ======== =========
Non-current liabilities 11,141
===================================== ========= ======== =========
23. CAPITAL COMMITMENTS
The group had no capital commitments
at 30 June 2020 or 30 June 2019.
24. RELATED PARTY TRANSACTIONS
Details of directors' remuneration are given in the Remuneration
Report.
In 2019, under the previous management, the company was loaned
GBP330,325 by the directors and GBP158,832 was repaid to the
directors. Under the previous management, the company also loaned
GBP34,658 to the directors. Upon resignation of directorships, the
directors in question con rmed 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 nancial period. In 2020, under the current
management, the company was loaned GBP16,613 by the directors and
repaid GBP4,340. This amount was still outstanding at 30 June
2020.
In 2019, GBP150,000 was loaned to Medium Channel Media. The loan
is considered impaired in this set of accounts.
In 2020, the company received GBPnil (2019 - GBP2,166) interest
on loans that it provided to the directors in the period. The
company also paid GBPnil (2019 - GBP2,150) of interest to
directors.
Vivian Andrade, Joao Andrade's wife, received GBPnil (2019 -
GBP1,987) of professional fees for providing the services of
Quality Manager to WideCells Portugal SA. GBPnil (2019 - GBPnil)
was due to Vivian Andrade at the period end.
Luis Andrade, Joao Andrade's brother, received GBPnil (2019 -
GBP6,001) of professional fees for providing the services of Group
IT Manager to Iconic Labs plc. GBPnil (2019 - GBPnil) was due to
Luis Andrade at the period end.
There are no other related party transactions.
25. CONTINGENT LIABILITIES
The group had no contingent liabilities at 30 June 2020 or 30
June 2019.
26. POST BALANCE SHEET EVENTS
On 13 November, 6,231,610,203 new ordinary shares of GBP0.00001
each in the capital of the Company at a price of
GBP0.00012 per placing share to raise total gross proceeds of
GBP747,793 together with the entering into of a conventional
secured debt facility with Shard Merchant Capital for an amount up
to GBP1,000,000.
27. ULTIMATE CONTROLLING PARTY
The directors do not consider that there is an ultimate
controlling party of the group.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by
the Company to constitute inside information for the purposes of
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication
of this announcement via a Regulatory Information Service, this
inside information is now considered to be in the public
domain.
**ENDS**
For further information, please visit the Company's website
www.iconiclabs.co.uk or contact:
Damon Heath Shard Capital Partners Tel: +44 (0) 20 7186
LLP 9950
Iconic Labs ir@iconiclabs.co.uk
END
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END
FR FLFLAFLLAIII
(END) Dow Jones Newswires
December 10, 2020 02:00 ET (07:00 GMT)
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