TIDMICON
RNS Number : 5633L
Iconic Labs PLC
03 January 2023
3 January 2023
Iconic Labs PLC
("Iconic" or the "Company")
Full Year Results for the year ended 30 June 2022
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 2022.
Copies of the Report and Accounts for the year ended 30 June
2022 will be sent to shareholders.
ENQUIRIES:
Brad Taylor ir@iconiclabs.co.uk
Chief Executive Officer
CHIEF EXECUTIVE AND CHAIRMAN'S REPORT
Dear Shareholders,
I am pleased to present the audited accounts for the twelve
months ended 30 June 2022.
While these accounts cover the twelve-month period ended 30 June
2022, given the administration that began on 4 June 2021 and
suspension of trading, our focus has, of necessity, been on
restructuring the Company, settling various legal disputes, and
exiting administration rather than on the accounting, operational,
and strategic tasks that we would have undertaken in normal
circumstances. As such, it is only now, in the fourth quarter of
2022 that we have been able to prepare these accounts.
The Company Voluntary Arrangement ("CVA") has been approved by
the creditors, and any other legal disputes relating to this period
have been settled, the challenge period for the CVA has expired
without any objections, and the administration has ended such that
control of Iconic is once again in the hands of the Directors.
With this successful restructuring behind us, our goal now is to
get the suspension of Iconic's shares lifted so that trading can
resume, financing can continue, and we can implement our strategic
objectives for the Company.
Therefore, in this report, we will not only be providing the
Audited Annual Report & Accounts for the twelve months ended 30
June 2022, but we will also be providing an update on where Iconic
stands as of the fourth quarter of 2022 in the interest of full
transparency and providing the market with the most up to date
information on the Company.
Administration
Details surrounding the appointment of joint administrators on 4
June 2021 and suspension of the trading of Iconic's shares on 7
June 2021 can be found in the Audited Annual Report and Accounts
for the year ended 30 June 2021 that has been published at
approximately the same time as this report for the year ended 30
June 2022.
Events From 1 July 2021 through 30 June 2022:
On 26 July 2021, Iconic submitted a Statement of Affairs to the
High Court of Justice, Business & Property Courts setting forth
a summary of the Company's assets, liabilities, creditors, and
shareholders as of 4 June 2021 when the administration began. On
the same date, the Joint Administrators submitted to the creditors
Proposals Relating to Iconic, wherein, among other items, they
proposed that if adequate funding could be found, a CVA proposal
could be submitted to the creditors for their consideration.
Following several adjournments, a Shareholders' General Meeting
was ultimately held on 8 December 2021 for shareholders to vote on
the meeting agenda that was convened on 20 May 2021. All
resolutions were passed and involved the ability of Iconic to allot
shares and finance the Company as set forth below:
-- Resolution 1: Authority to allot relevant securities in
respect of the 2019 Issuance Agreement and the Amended 2020
Issuance Agreement. This Resolution authorised the Directors to
convert the notes and/or warrants issued under the 2019 Issuance
Agreement and the Amended 2020 Issuance Agreement and issue further
notes and/or warrants under such agreements, including in respect
of subsequent drawdowns under the Amended 2020 Issuance Agreement.
This authority is for relevant securities up to an aggregate
nominal amount of GBP692,246, is in addition to any existing other
authorities to allot relevant securities and expires on 14 June
2026.
-- Resolution 2: Authority to allot relevant securities in
respect of any Flexible Facility. This Resolution authorised the
Directors to issue convertible securities (which grant rights to
subscribe for ordinary shares) and ordinary shares on conversion of
such convertible securities in connection with any "Flexible
Facility" (as described in the Resolution). This authority is for
relevant securities up to an aggregate nominal amount of
GBP807,754, is in addition to any existing other authorities to
allot relevant securities and expires on 14 June 2026.
-- Resolution 3: Disapplication of pre-emption rights in respect
of the 2019 Issuance Agreement and the Amended 2020 Issuance
Agreement. This Resolution was subject to the passing of Resolution
1, which passed. In turn, this third Resolution authorised the
Company to disapply the pre-emption rights conferred by the
Companies Act 2006 in connection with the allotment authority
conferred by Resolution 1 in respect of the 2019 Issuance Agreement
and the Amended 2020 Issuance Agreement. This authority applies to
the relevant securities which were the subject of the allotment
authority conferred by Resolution 1, is in addition to any existing
powers conferred on the Company and expires on 14 June 2026.
-- Resolution 4: Disapplication of pre-emption rights in respect
of any Flexible Facility. This Resolution was subject to the
passing of Resolution 2, which passed. In turn, this fourth
Resolution authorised the Company to disapply the pre-emption
rights conferred by the Companies Act 2006 in connection with the
allotment authority conferred by Resolution 2 in respect of any
Flexible Facility. This authority applies to the relevant
securities which are the subject of the allotment authority
conferred by Resolution 2, is in addition to any existing powers
conferred on the Company and expires on 14 June 2026.
-- Resolution 5: Disapplication of pre-emption rights in respect
of the allotment authorities from the Company's Annual General
Meeting ("AGM"). At the Company's AGM on 31 December 2020, the
shareholders passed a resolution that authorised the Directors to
allot shares in the Company (and to grant rights to subscribe for,
or to convert any security into, shares in the Company) up to an
aggregate nominal amount of GBP124,684.16 as well as up to a
further aggregate nominal amount of GBP124,684.16 in connection
with a rights issue. This fifth Resolution authorised the Company
to disapply the pre-emption rights conferred by the Companies Act
2006 in connection with the allotment authorities conferred on the
Company at the last AGM described above. This authority is in
addition to any existing powers conferred on the Company and
expires at the conclusion of the Company's next AGM.
Events Post Closing of the 2022 Accounts:
While the administration was still in effect as of 30 June 2022,
with the foregoing resolutions passed, we turned our attention to
(i) negotiating settlements to all outstanding disputes; (ii)
finalizing a CVA with the Joint Administrators and the critical,
preferential, secured, and unsecured creditors; and (iii) agreeing
to financing terms with EHGOSF to support the Company upon exiting
from administration. Given the numerous parties involved and their
competing interests, complexity of the various legal and financial
issues confronting the parties, and volume of related legal
documentation to be agreed upon, this process took until August
2022.
At that time, settlement agreements resolving all disputes were
finalized, and notices were issued for a Creditors' Meeting to be
held on 22 September 2022 to approve the CVA and a Shareholders'
General Meeting to also be held on 22 September 2022 after the
Creditors' Meeting. As part of the settlement agreements, EHGOSF
agreed to cancel its outstanding convertible loan notes and
warrants in exchange for new convertible loan notes of GBP750,000,
and in addition, GBP750,000 in new convertible loan notes were to
be issued to Linton Capital, which had been assigned Arch's
Capital's positions. These new convertible loan notes were issued
to EHGOSF and Linton Capital, respectively, on 19 December 2022,
but to date have not been converted into new shares in Iconic.
At the Creditors' Meeting on 22 September 2022, the CVA was
approved. In summary, a payment plan was approved over a period of
nine months for the critical and preferential creditors as well as
all costs and expenses associated with the administration. In
addition, unsecured creditors agreed to be repaid in Iconic shares
at a rate of GBP0.25 per GBP1.00 of unsecured claims against the
Company, resulting in a reduction of more than GBP800,000 of
liabilities against Iconic. These new Iconic shares will be issued
to the unsecured creditors once all payments have been made to the
critical and preferential creditors, and all costs and expense
associated with the administration have been paid in full. Subject
to Iconic's trading suspension being lifted, and financing
continuing under the new GBP3m financing facility with EHGOSF, set
forth in detail below, Iconic anticipates these new shares to be
issued to the unsecured creditors in May of 2023. A total of
1,674,130,609 new shares will be issued to the unsecured creditors
at that time.
At the Shareholders' General Meeting also held on 22 September
2022, all resolutions were passed as set forth below:
-- Resolution 1: The CVA that had been approved earlier in the
day by the creditors was then approved at the General Meeting by
the shareholders.
-- Resolution 2: Authority to allot relevant securities to the
creditors of the Company in respect of the CVA. The shareholders
granted authority to the Company under the Companies Act 2006 for
the Company to issue 1,674,130,609 ordinary shares to the relevant
creditors in accordance with the CVA. This authority is for
relevant securities up to an aggregate nominal amount of
GBP16,741.31, is in addition to any existing other authorities to
allot relevant securities and expires 5 years from the date of this
Resolution.
-- Resolution 3: Authority to allot securities generally for
purpose the Directors may deem necessary or expedient in promoting
the success of the Company. The shareholders granted authority to
the Company to issue ordinary shares for such purposes as deemed
fit to promote the success of the Company, and for those general
commercial purposes that are in the best interest of the Company
and its shareholders. The Company is authorised to issue ordinary
shares up to 14,962,099,216 of GBP0.00001 per share in the capital
of the Company. An aggregate nominal amount of GBP149,620.99
represents approximately forty per cent (40%) of the issued
ordinary share capital of the Company as of 30 August 2022. This
authority is for relevant securities up to an aggregate nominal
amount of GBP149,620.99, is in addition to any existing other
authorities to allot relevant securities and expires 5 years from
the date of this Resolution.
-- Resolution 4: Disapplication of pre-emption rights in respect
of the ordinary shares to be issued in accordance with the CVA.
This Resolution was subject to the passing of Resolution 2, which
passed. In turn, this fourth Resolution authorised the Company to
disapply the pre-emption rights conferred by the Companies Act 2006
in connection with the issue of 1,674,130,609 ordinary shares to
the creditors of the Company pursuant to the CVA and applies to the
allotment authority conferred by Resolution 2 above. This authority
is in addition to any existing powers conferred on the Company and
expires 5 years from the date of this Resolution.
-- Resolution 5: Disapplication of pre-emption rights in respect
of the general authority to issue up to 14,962,099,216 of ordinary
shares. This Resolution was subject to the passing of Resolution 3,
which passed. In turn, this fifth Resolution authorised the Company
to disapply the pre-emption rights conferred by the Companies Act
2006 in connection with the issue of up to 14,962,099,216 of
ordinary shares representing approximately forty per cent (40%) of
the issued ordinary share capital of the Company as of 30 August
2022 and applies to the allotment authority conferred by Resolution
3 above. This authority is in addition to any existing powers
conferred on the Company and expires 5 years from the date of this
Resolution.
New Financing Facility with EHGOSF
Following the approval of the CVA by creditors and shareholders,
on 28 September 2022 Iconic entered into a GBP3 million Deed of
Issuance and Subscription in respect of loan notes ("Notes")
convertible into new ordinary shares with share subscription
warrants ("Warrants") attached (together "the Financing Facility")
with EHGOSF. The Financing Facility can be drawn down in up to 14
sequential tranches over a maximum period of 18 months and each
Note has a duration of 24 months as from its date of issue.
On the same day, Iconic submitted a drawdown notice for the
first tranche of GBP250,000 and 781,250,000 warrants with an
exercise price of GBP 0.00016. The subsequent tranches will be as
follows: (i) GBP150,000 for tranches 2 through 6; and (ii) GBP
250,000 for tranches 7 through 14.
Under the Financing Facility, EHGOSF will provide Iconic with up
to GBP3 million by subscribing for up to 3,000 Notes, each with a
par value of GBP1,000, convertible into new ordinary shares in the
Company, with the Warrants attached. Each Note is convertible into
shares of Iconic at a conversion price equal to the highest of a)
90% of
the lowest volume-weighted average price of the 15 trading days
prior to delivery of a conversion notice and b) the nominal value
of the shares. Iconic is to pay a commitment fee of GBP 150,000 in
Notes under the terms of the Financing Facility. On termination of
the Financing Facility Iconic has an obligation to pay EHGOSF an
administration fee in the total aggregate amount of twenty percent
(20%) of the principal amount of all Notes outstanding at the time
of the termination.
The Financing Facility is subject to Iconic complying with
certain obligations and conditions precedent, including:
-- With respect to the fourth tranche onwards, that the
suspension on Iconic's shares from trading on the London Stock
Exchange be lifted with 3 months of the agreement being entered
into, and that the shares of Iconic recommence trading on Main
Market of the London Stock Exchange (the "Commencement of
Trading");
-- From the first tranche following the Commencement of Trading onwards:
o the closing market price of the shares for each of the ten
consecutive trading days falling immediately prior to the relevant
closing date must be at least higher than 150% of the nominal value
of Iconic's shares; and
o the average daily value traded of Iconic's shares (excluding
5% of the data points from the top and excluding 5% of the data
points from the bottom of the data set) for the 20 trading days
immediately prior to the applicable closing date must be at least
GBP 10,000;
-- From the fifth Tranche onwards, Iconic having published a prospectus;
-- No binding commitment having been entered into by Iconic
pursuant to which a change of control in Iconic would occur;
and
-- No occurrence that constitutes an event of default having occurred and is continuing.
The Warrants will amount to 50% of the financing provided by
EHGOSF such that the number of Warrants will be equal to 50% of the
principal amount of the Notes divided by the warrant exercise
price.
Before the trading suspension on Iconic's shares is lifted and
trading resumes, the warrant exercise price will be equal to the
share price immediately prior to suspension, or GBP0.00016 per
share.
If the trading suspension in Iconic's shares is lifted and
trading resumes, the warrant exercise price will be equal to 120%
of the share volume weighted average price of the shares over the
15 trading days immediately preceding the relevant subscription or
issuance request.
Iconic will only be able to draw down on the first three
tranches, for a total of GBP550,000, prior to the trading
suspension in Iconic's shares being lifted by the Financial Conduct
Authority and Iconic is once again trading on the Main Market of
the London Stock Exchange. The Iconic executive team, advisors and
auditors are diligently working to have the trading suspension
lifted as soon as possible. Iconic will provide updates on its
progress in due course.
On 28 October 2022, Iconic received a Subscription Form from
EHGOSF for the second tranche of notes amounting to GBP 150,000 and
468,750,000 warrants with an exercise price of GBP 0.00016 .
On 29 November 2022, Iconic received a Subscription Form from
EHGOSF for the third tranche of notes amounting to GBP 150,000 and
468,750,000 warrants with an exercise price of GBP 0.00016.
CVA Payments
On 21 October 2022, the first payments due to critical and
preferential creditors under the CVA were timely paid. In addition,
on the same day, the challenge period to the CVA expired without
any challenges having been made. As such, the CVA was final, and
the Joint Administrators submitted the requisite filings with
Companies House to this effect.
On 29 October 2022, the second payments due to critical and
preferential creditors under the CVA were timely made.
On 8 November 2022, the Joint Administrators submitted their
Final Report to Companies House and the High Court of Justice,
Business & Property Courts seeking to exit the administration
and return control of the Company to the Directors.
On 28 November, the third payments due to critical and
preferential creditors under the CVA were timely made.
On 29 November, Companies House and the High Court of Justice,
Business & Property Courts confirmed and acknowledged the Joint
Administrators' Final Report such that the administration ended,
and control of the Company was returned to the Directors.
On 28 December 2022, the fourth payments due to critical and
preferential creditors under the CVA shall be timely made.
The Company and its advisors are currently in discussions with
the FCA to lift the trading suspension on the Company's shares as
soon as possible.
Financial Summary
Iconic incurred a loss for the 2022 financial year of GBP762,107
(2021 - GBP7,697,306). During the 2022 financial year, Iconic Labs
UK Limited and Wideacademy Limited were dissolved and all assets
and liabilities in those subsidiaries were written down to nil
value in the consolidated financial statements.
Currently, Iconic is at an early stage of development its future
strategy and is not currently profitable. Future revenues and
profitability are dependent on the trading suspension being
lifted.
Further details regarding the financial performance of Iconic
can be found in the Strategic Report.
Brad Taylor
Director
Date: 27 December 2022
STRATEGIC REPORT
Introduction
This is the sixth set of financial statements prepared by
Iconic. For the reasons set forth in the Chief Executive and
Chairman's Report above, this Strategic Report has been prepared in
the fourth quarter of 2022 and as such, details the strategy and
risks of the Company from that time. This Strategic Report should
also be read in conjunction with the Chief Executive and Chairman's
statement which is included within the 2022 Annual Report.
Principal Activities and Business Review
Iconic is a media and technology business focused on the
identification, acquisition and growth of technology driven
companies in the online media, artificial intelligence, and big
data gathering, processing and analysis sectors.
Iconic's sole asset is Gay Star News ("GSN"), an online media
platform dedicated to the LGBTQ+ community and that Iconic intends
to continue developing with strategic partners.
Iconic's principal activities in the short term are ensuring
compliance with the terms of the CVA and settlement agreements and
working with the FCA to lift the trading suspension on Iconic's
shares as soon as possible so that the Directors can begin working
on the operational and strategic objectives for the Company.
Principal Risks and Uncertainties
The following risks are considered by the Board to be the most
significant to the business:
Revenue and Profitability Risk
Iconic remains at an early stage of development with only one
asset, GSN. Since the balance sheet date, it has had to rebalance
all previous activities and is focusing on compliance with the
terms of the CVA and settlement agreements and working with the FCA
to lift the trading suspension on Iconic's shares as soon as
possible so that the Directors can begin working on the operational
and strategic objectives for the Company.
Iconic's Financing Facility with EHGOSF is conditional upon the
Company trading again. In the event the Company is not relisted and
Iconic cannot obtain financing to acquire companies for its
portfolio, there is a risk that Iconic will not generate the
revenue and profitability to remain a going concern.
Administration Risk
As of the closing of the 2022 accounts, the Joint Administrators
controlled Iconic, however post-closing of the 2022 accounts,
Iconic entered into a CVA with all creditors, has exited
administration, and is working with the FCA on getting the trading
suspension on its shares lifted. There is, however, a risk that
Iconic's trading suspension will not be lifted, in which case the
EHGOSF financing will cease, and the Company would have to examine
alternative financing strategies or undergo liquidation proceedings
should it not be able to comply with its financial obligations
under the CVA.
Key Executive Risk
Given the wholesale change in the Board of Directors and
executive team in February and March of 2021, coupled with the
complexity of the restructuring, administration, CVA, and relisting
processes, there is a risk of Iconic not being able to retain key
executives, which could adversely affect Iconic's operating and
financial performance.
Retaining and motivating key executives, particularly those who
worked diligently with the Joint Administrators, EHGOSF, and the
various parties involved in disputes with the Company, to
successfully restructure Iconic is a critical component of the
future success of the business. Without the participation of these
key executives, it is highly unlikely that the execution of the
CVA, relisting of the Company, financing with EHGOSF, and
implementation of its strategic vision will be implemented. The
departure of any of Iconic's executive officers would have a
significant negative impact on its operations and likely result in
the liquidation of Iconic.
Funding Risk
Iconic is at an early stage of development, with only a single
asset, and is not currently profitable. While Iconic has entered
into a GBP3million financing facility with EHGOSF there are
numerous conditions to the financing that if not met will result in
EHGOSF suspending or terminating its financing of the Company. In
the short term, the highest risk affecting this financing from
EHGOSF is getting the trading suspension on Iconic's shares lifted.
In the event the trading suspension is not lifted, the likelihood
of future financing from EHGSOF or any other financing partner will
be difficult if not impossible.
Market Risk
The online media and publishing, technology, artificial
intelligence, and data gathering, processing, and analytics sectors
are continually changing and have a significant amount of
competition. Iconic has identified various acquisition targets, but
until such time as the trading suspension is lifted and Iconic's
financing situation can correspondingly be solidified, it is
difficult to predict the likelihood of these acquisition targets
remaining interested. Until such time, Iconic will also be
materially affected by the actions of competitors, partners and
suppliers. As a Company at an early stage of development, Iconic's
competitors could offer superior scale and put pressure on prices
which could affect Iconic's revenues and profit margins.
Global Economic Risk
The online media and publishing, technology, artificial
intelligence, and data gathering, processing, and analytics sectors
are susceptible to adverse developments in the global economy and
particularly the UK economy where Iconic is located. The continual
uncertainty over Brexit or COVID, for example, may continue to
delay spending by potential clients which may have a negative
effect on the demand for services which could affect Iconic's
revenues.
Potential Unrecorded Legacy Liabilities
As evidenced by the administration and disputes involving
various key parties, there were significant legacy issues that
predated the new management's arrival when they took control of the
business. Following the exit from administration and the entering
into of confidential settlement agreements with various parties, it
is highly unlikely that there are any material unknown liabilities
of Iconic.
The current status of the old Widecells subsidiaries is as
follows:
-- Widecells Limited - was dissolved on 23 August 2022
-- WideAcademy - was dissolved on 26 April 2022
-- 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 International LDA - 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. As part of this review the
Directors are making enquiries into the regulatory arrangements
surrounding the company's promoting of the Stem Cell insurance
product.
-- Cellplan Limited - shareholder of Cellplan International LDA. Dormant
-- Widecells International Limited - dormant
Financial Risk Management
The Board monitors the internal risk management function across
Iconic and advises on all relevant risk issues. There is regular
communication with internal departments, external advisors and
regulators. Iconic's policies on financial instruments and the
risks pertaining to those instruments are set out in the accounting
policies in note 1 of the financial statements.
Financial Review
Iconic made a loss in the 2022 financial year of GBP762,107
(2021 - GBP7,697,306).
The revenue of the Group in the year was GBP26,823 (2021 -
GBP509,171). Administrative expenses decreased by GBP3,373,665 in
the year, mainly due to the parent company being in administration
for the entire financial year.
At 30 June 2022, Iconic held total assets of GBP6 (2021 -
GBP154,056), following the writing down of assets and a provision
for bad debts in the year as a result of the dissolution of Iconic
Labs UK Limited in June 2022. The Group had liabilities of
GBP8,938,526 at the balance sheet date (2021 - GBP8,330,469), an
increase of GBP608,057. Details of the CVA which has been approved
post year end are also detailed in the Chief Executive and
Chairman's Report.
Key Performance Indicators:
The business is focused on the areas of cash management and
operating results.
Iconic has identified the following key performance indicators
which the Directors will use to measure success against the
business plan:
-- Gross revenue growth
-- EBITDA growth
-- Market value
Future Development and Strategy
Market Trends
The Directors closely follow the trends and developments in the
online media and publishing, technology, artificial intelligence,
and big data gathering, processing, and analytics sectors. We see
the shift continuing towards leaner online companies that can scale
rapidly, operate internationally with an inexpensive footprint, and
provide a broad array of services across various sectors through
the effective use of information and video gathering, data mining,
just in time processing, and online collaboration technology.
While the administration paused Iconic's ability to conduct
transactions in these sectors, the Directors nevertheless continued
to follow these market trends and are well positioned now that
Iconic has exited administration to take advantage of opportunities
in these areas.
Company Strategy
The Directors have identified numerous players in the sectors of
interest, many of which have technological or operational
advantages, but are unable to grow and scale rapidly or
internationally for various reasons including the fragmented,
localized, and isolated nature of their business models. We believe
there is a significant opportunity to support, acquire, and
integrate these companies into Iconic given the Directors'
international capabilities and strategic growth expertise.
Going concern
The Board's assessment of going concern and the key
considerations thereto, are set out in our Corporate Governance
Report.
Capital Structure
Details of the ordinary shares of the Company are shown in note
13. The Company has a class of ordinary shares with a nominal value
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 Iconic's Annual
Report and audited financial statements, to attend and speak or
appoint proxies and to exercise voting rights at Iconic's general
meetings.
The Company's Articles of Association (the "Articles") do not
have any specific restrictions on the transfer of shares or
restrictions on voting rights, and there are no limitations on
holding such shares. Other than the obligations contained in the
Financing Facility with EHGOSF and the CVA, the Directors are not
aware of any agreement between Iconic shareholders that may result
in restrictions on the transfer of securities or on voting
rights.
No person has any special rights of control over Iconic'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 Quoted Companies
Alliance Corporate Governance Code, the Companies Act 2006 and
related legislation. The powers of the Directors are described in
the Corporate Governance Report.
Environmental Issues
As far as the Directors are aware, Iconic's business activities
do not cause a direct and disproportionate adverse effect on the
environment.
Employee Matters
As of 30 June 2022, and continuing through the fourth quarter of
2022, Iconic does not have any employees and its management is
being conducted primarily by Brad Taylor and David týbr who have
worked with the Joint Administrators and creditors to restructure
the company and exit administration, resolve all outstanding
disputes, and get the trading suspension on Iconic' shares
lifted.
Social, community and human rights issues
Iconic seeks to achieve the highest ethical standards and
behaviours in conducting its business, with integrity, openness,
diversity and inclusiveness being a priority.
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 Iconic's personnel and other stakeholders, the
impact of its activities on the community, the environment and its
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 Iconic 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 in the Corporate
Governance Report.
The Directors are aware of their responsibilities to promote the
success of Iconic in accordance with section 172 of the Companies
Act 2006. To ensure Iconic 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 Iconic engages with its
stakeholders and opportunities for enhancement in the future. A
section 172 notice has been included with the Board papers since
this date. As required, Iconic's 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 Iconic's principal stakeholders and
how It engages with them. This is achieved through information
provided by management and 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.
Given that Iconic was still in administration from 1 July 2021
through 30 June 2022, Iconic did not have, and was not permitted to
have, any Board meetings during this period.
Brad Taylor
Director
Date: 27 December 2022
CORPORATE GOVERNANCE REPORT
As Chairman of the Company, it is my responsibility to work with
my fellow Board members to ensure that the Company embraces the
highest standards of corporate governance and to manage the Board
in the best interests of our many stakeholders. The Board shares my
belief that practicing solid corporate governance is essential for
building a successful and sustainable business, and our commitment
to good corporate governance has allowed us to build a healthy
corporate culture throughout the organization.
The Company has adopted the Quoted Companies Alliance Corporate
Governance Code (2018) (the "QCA Code"), which it believes to be
the most appropriate governance code for Iconic. We report our
compliance with the QCA Code in this Annual Report.
The Directors closely follow the trends and developments in the
online media and publishing, technology, artificial intelligence,
and big data gathering, processing, and analytics sectors. Iconic
has a corporate strategy to identify and develop leaner online
companies that can scale rapidly, operate internationally with an
inexpensive footprint, and provide a broad array of services across
various sectors through the effective use of information and video
gathering, data mining, just in time processing, and online
collaboration technology. Iconic delivers its business strategy
with tightly controlled overheads, supplementing its financial
resources through corporate transactions, JVs and partnerships as
well as trading and disposals or exchanges of non-core assets.
The Board upholds its responsibility to govern the Company in
the best interests of all its stakeholders. The Board takes charge
of formulating, reviewing and approving the Company's strategy,
financial activities and operational performance. There are Audit
and Remuneration Committees established to provide additional
review and scrutiny in their respective areas. The Committees
report back to the Board, following each committee meeting and make
appropriate recommendations with regard to the matters under their
purview.
The Board, as a whole, is committed to instill a culture across
the Company, delivering strong values and behaviours.
Iconic recognizes all sectors of stakeholders in delivering our
strategy and we are mindful of our responsibilities and duties to
our stakeholders. The importance of engaging with our shareholders
continues, and the Board strives to ensure that there are
opportunities for investors to engage with the Board.
QCA CODE - APPLICATION, PRINCIPLES AND DISCLOSURE
REQUIREMENTS
Until October 2019, Iconic gave due regard to the principles set
out in the UK Corporate Governance Code published in April 2016 by
the Financial Reporting Council and the Quoted Companies Alliance
published Corporate Governance Guidelines. In October 2019, Iconic
formally adopted the QCA Code which is an enabling,
principles-based, corporate governance code for companies focused
on growth. Iconic is committed to maintaining and promoting robust
corporate governance structures and processes to support its
long-term success.
The QCA Code sets out ten principles that are listed below
together with a short explanation of how the Company applies each
of the principles and reasons for any non-compliance.
Principle 1: Establish a strategy and business model which
promote long-term value for shareholders
Details on the strategy and business model are included in the
strategic report.
Principle 2: Seek to understand and meet shareholder needs and
expectations
Relationship with shareholders
Primary responsibility for effective communication with
shareholders lies with the Chairman and Chief Executive Officer,
Brad Taylor, but all Directors are available to meet with
shareholders throughout the year. Mr. Taylor has been active in
meeting with and preparing presentations for investors. Iconic
endeavours to answer all queries raised by shareholders
promptly.
Principle 3: Take into account wider stakeholder and social
responsibilities and their implication for long-term success
Environmental Issues
As far as the Directors are aware, Iconic's business activities
do not cause a direct and disproportionate adverse effect on the
environment.
Employee Matters
As of 30 June 2022, Iconic does not have any employees and its
management is solely being conducted by the executive officers and
non-executive Directors who are working with the Joint
Administrators and creditors to restructure the company and exit
administration, resolve all outstanding disputes, and get the
trading suspension on Iconic' shares lifted.
Social, community and human rights issues
Iconic seeks to achieve the highest ethical standards and
behaviours in conducting its business, with integrity, openness,
diversity and inclusiveness being a priority.
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.
Principle 4: Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Details on the strategy and business model are included in the
strategic report.
Principle 5: Maintain the board as a well-functioning, balanced
team led by the chair
As of 30 June 2022, the Board comprised the following:
-
- Brad Taylor: Chief Operating Officer & Chairman
- David týbr: Non-Executive Director
- Wilhelmus van der Meer: Non-Executive Director
- Marija Hrebac, Non-Executive Director
How the Board functions
The Board is collectively responsible for Iconic's long-term
success. The Board provides entrepreneurial leadership for Iconic
within a framework of prudent and effective controls which enables
risk to be assessed and managed. The Board considers the management
team's proposals for strategy and, following a consideration of
those proposals, determines Iconic's strategy and ensures that the
necessary resources are in place for management to execute that
strategy. Further details on Iconic's business model and strategy
can be found in the Strategic Report.
An important part of the Board's role is the review of
management performance. Iconic's process for evaluating the
effectiveness of the Board and Directors' performance will comprise
an annual internal review of executive and non-executive Directors'
performance and a triennial review of Board performance by external
providers. The results of such reviews will be used to determine
whether any alterations are needed or whether any additional
training would be beneficial.
Responsibility and delegation
The Board has specifically reserved a number of matters for its
consideration and approval. These include:
-- Overall leadership of Iconic and setting Iconic's values and standards
-- Approval of Iconic's long-term objectives and commercial strategy
-- Approval of the annual operating and capital expenditure budgets and any changes to them
-- Major investments or capital projects
-- The extension of Iconic's activities into any new business or geographic areas
-- Any decision to cease any material operations
-- Changes in Iconic's capital structure or management and control structure
-- Approval of the annual report and accounts and preliminary
and half-yearly financial statements
-- Approval of treasury policies, including foreign currency
exposures and use of financial derivatives
-- Ensuring the maintenance of a sound system of internal control and risk management
-- The entering into of agreements that are not in the ordinary course of business or material strategically or by reason of their size
-- Changes to the size, composition or structure of the Board and its committees
Board balance
The Board comprises individuals with wide business experience
gained in various industry sectors related to Iconic's business and
it is the intention of the Board to ensure that the balance of the
Directors reflects the changing needs of that business. The Board
considers that it is of a size and has the balance of skills,
knowledge, experience and independence that is appropriate for
Iconic's business. While not having a specific policy regarding the
constitution and balance of the Board, potential new Directors are
considered on their own merits with regards to their skills,
knowledge, experience and credentials, regardless of gender, race,
ethnic, or national background.
The QCA Code requires that the boards of companies have an
appropriate balance between Executive and Non-Executive Directors.
Given the Board comprises one Executive Director and three
Non-Executive Directors it is felt that given the current size of
the Board and the Company there is a strong enough presence of
independent judgement.
Principle 6: Ensure that between them the Directors have the
necessary up-to-date experience, skills and capabilities
Board Member Biographies
Brad Taylor
Mr. Taylor began his career as an attorney with law firms Akin
Gump Strauss Hauer & Feld in Houston, and Greenberg Traurig in
Dallas before switching to private equity as a director with
Holland Park Capital in Austin. From there, he worked in Paris as
the General Counsel and member of the Executive Committee of Orco
Property Group. While at Orco, he served on the board of Orco
Germany in Berlin, and the board of Suncani Hvar Hotels, a public
private partnership with the Republic of Croatia. Now based in
Washington DC, he is the CEO of Ott Ventures USA and of Iconic
Labs, an LSE listed company. A Canadian citizen, he has a Bachelor
of Commerce degree from McGill University, a Juris Doctorate from
Baylor University School of Law, an MBA from INSEAD, and studied
International Law at Cambridge University.
David týbr
Mr. týbr's career has been oriented on business activities,
project leadership and asset management. His main focuses have been
in finance, investments, private equity, venture capital and real
estate, with significant experience working for investment
companies operating on US futures markets, management positions in
a leading CEE real estate company, and leading a family office. He
also has expertise in strategic planning and preparing measurable
targets to be achieved by corporations, as well as financial
oversight.
Wilhelmus van der Meer
Mr. Van Der Meer has extensive experience in the equity, capital
raising, and restructuring sectors throughout Europe. A Dutch
native, he began his career in institutional equity sales with DW
Brand NV before becoming the founder of one of the largest
mid/small cap investment banks in the Netherlands, Amsterdam
Effecten Kantoor. He has also served as the CEO of Greenstone Gold,
the Founder and General Manager of Petite Fleur, and Senior Advisor
to Global EcoPower, S.A.
Marija Hrebec
Marija has over 20 years of executive experience managing a
variety of complex organizations. She has worked with international
corporations including Schering-Plough, MSD, L'Oréal, and Alas
International at both the national and international levels, and
has also worked across various industries including pharmaceutical,
construction, cosmetics, hospitality, and banking. Marija's
expertise revolves around the implementation of business processes,
establishing organisational structures, turnarounds, crisis
management, operational consolidations, and business integrations.
Since 2012, Marija has been leading the Croatian Deposit Insurance
Agency with a focus on implementing international standards and
improving the national deposit guarantee system. In addition, she
is a member of the Croatian Financial Stability Committee, a member
of the Executive Council of the International Association of
Deposit Insurers, and the vice-chair of the European Forum of
Deposit Insurers. Marija holds a master's degree in Organizations
and Management from the Faculty of Economics and Business at the
University of Zagreb.
Principle 7: Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement
The Board hold regular meetings and on a quarterly basis conduct
a review of Company performance based both on the quantitative
metrics discussed in the strategic report and also longer-term
strategic targets such as acquisitions or capital sourcing.
Where there is an opportunity, the Board will add members who
possess key experience and expertise in particular areas that align
with the Company's long-term ambitions.
Principle 8: Promote a corporate structure that is based on
ethical values and behaviours
Social, community and human rights issues
openness, diversity and inclusiveness being priorities 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.
In presenting this report, and having monitored, reviewed or
approved recent shareholder communications, the Board is confident
that it has presented a balanced and understandable assessment of
the Iconic's position and prospects.
Principle 9: Maintain governance structures and processes that
are fit for purpose and support good decision-making by the
Board
Remuneration Committee
At 30 June 2022, the Remuneration Committee is comprised of Brad
Taylor and David týbr. There are no employees as of that date and
continuing through the fourth quarter of 2022. Since the change of
management in March 2021 until the fourth quarter of 2022, there
have been no Remuneration Committee meetings as a result of the
administration and restructuring of the Company.
The Remuneration Committee's role is to set Iconic's
remuneration policy, determine the remuneration packages of the
executive Directors and set the targets for performance-related
pay.
The Remuneration Committee shall:
-- Discuss and approve the salaries and benefits for the key employees and executives.
-- Discuss and agree deferral of certain parts of the salaries and benefits.
-- Discuss a proposed employee option scheme which it intends to implement in the near future.
Audit Committee
At 30 June 2022, the Audit Committee is comprised of Brad Taylor
and David Stybr. Iconic's accounting is provided by Azets and its
audits are conducted by Nordens Audit Limited. From 1 July 2021
through the fourth quarter of 2022, there has only been one Audit
Committee meeting that was held to approve this 2022 Audited Annual
Report & Accounts.
The Audit Committee shall:
-- Monitor the integrity of the financial statements and any
formal announcements relating to financial performance.
-- Review internal financial controls and risk management systems.
-- Make recommendations to the Board in relation to the
appointment, re-appointment and removal of auditors, including
approving the remuneration and terms of engagement of the
auditor.
-- Review the auditor's independence and objectivity
-- Develop and implement the non-audit services policy.
Board and Committee Responsibility and Activity
The Terms of Reference for each of the committees shall be
available to view on the Company's website.
Board meetings are usually held at the Company's principal
working office, however due to the COVID-19 pandemic the Directors
moved towards holding meetings online. Directors are provided with
comprehensive background information for each meeting and all
Directors have been able to participate fully and on an informed
basis in the Board decisions. In addition, certain members of the
senior management team have been invited to attend the whole or
parts of the meetings to deliver reports on the business. Any
specific actions arising during meetings are agreed by the Board
and followed up and reviewed at subsequent Board meetings to ensure
their completion.
Principle 10: Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders.
Relationship with shareholders
Up until the time that Iconic entered administration, the Chief
Executive Officer was active in meeting with and preparing
presentations for investors. Since the administration began,
Iconic, through the office of the Joint Administrators, has
endeavoured to answer all queries raised by shareholders
promptly.
Investor relations (IR) and communications
Whenever required, the Executive Directors communicates with
Iconic's brokers to confirm shareholder sentiment and to consult on
particular governance issues.
In the period since Iconic's admission, regulatory announcements
have been released informing the market of certain matters. Copies
of these announcements, together with other IR information and
documents, are available on Iconic's website.
Insurance and indemnity
In accordance with Article 54 of the Articles of Association,
Iconic's Directors and officers are entitled to an indemnity from
Iconic against liabilities incurred by them in the actual or
purported exercise of their duties, or exercise of their powers
including liability incurred in defending any proceedings (whether
civil or criminal) which relate to anything done or omitted to be
done and in which judgment is given in his favour, or in which he
is acquitted, or which are otherwise disposed of.
Going Concern Assessment
Prior to entering administration, the Board was taking steps to
ensure that Iconic would be in a position to meet its operating
costs going forward and was confident that all liabilities that
existed would be capable of being met via financing with
EHGOSF.
At present, given that Iconic is in administration,
restructuring work will be undertaken with all creditors with a
goal of finding a resolution to all claims and outstanding disputes
such that Iconic can exit administration, resume trading, and begin
implementing its strategic objectives.
Brad Taylor
Director
Date: 27 December 2022
REMUNERATION COMMITTEE REPORT
Remuneration Committee
Once Iconic resumes trading and operations are stabilised, a
Remuneration Committee will be held to assist the Board in
determining its responsibilities in relation to remuneration,
including making recommendations to the Board on employment
contracts for key personnel, bonus compensation to those who
restructured the Company, exited administration, resolved all
outstanding legal disputes, and relisted the Company, and a policy
on executive remuneration, setting the over-arching principles,
parameters and governance framework of the Iconic's remuneration
policy and determining the individual remuneration and benefits
package of each of the Executive Directors.
The Remuneration Committee shall ensure compliance with the QCA
Code in relation to remuneration wherever possible.
Remuneration Policy
The main aim of Iconic's remuneration policy shall be to align
the interests of Executive and Non-Executive Directors with
Iconic's business strategy and the long-term creation of
shareholder value. The policy shall aim to pay the Directors
competitively, whilst considering the remuneration practices of
other international companies of similar size and scope, the
current economic climate, the regulatory and governance framework,
remuneration around these companies and the need to ensure that the
Directors are remunerated appropriately, whilst ensuring that
Iconic pays no more than is necessary.
The Remuneration Committee shall have no formal method of
involving employees in the setting of Directors' remuneration,
however the members of the Remuneration Committee shall have access
to employees both in formal and informal settings and take into
account the level of employee remuneration when setting Directors'
remuneration.
Shareholders' views on Directors' remuneration shall be taken
into account when setting the Remuneration Policy.
Compensation
All management services for the Company, including, but not
limited to, financial and corporate restructuring, negotiations
with the joint administrators and creditors, implementation of the
CVA, settlement of all outstanding disputes, negotiation with
EHGOSF for financing, corporate governance, administration and
accounting, shareholder meetings, identification of potential
acquisitions, strategic development, relations with the FCA and
LSE, and communications to the marketplace are being rendered to
Iconic pursuant to a Management Services Agreement (the "MSA")
effective 1 February 2021 with Ott Ventures, s.r.o. and Ott
Ventures USA Inc. (the "Ott Companies") for a total of
GBP50,000/month.
As of 30 June 2022, the Ott Companies had received a total of
GBP365,000 under the MSA and had submitted a claim for GBP270,000
in unpaid fees under the CVA. As with all unsecured creditors, the
Ott Companies will receive Iconic shares at GBP0.25 per GBP1.00 of
claims under the CVA in full satisfaction of this GBP270,000
claim.
On 1 October 2022, only after the CVA had been approved by both
the creditors and shareholders, settlements of all disputes had
been executed, and a new GBP3 million financing facility with
EHGOSF had been signed, did the Ott Companies invoice Iconic
GBP365,000 as a success fee for the extensive restructuring and
settlement work they had performed through 30 September 2022. Given
that the cash priorities at this time involve making payments to
the preferential and critical creditors under the CVA and paying
the costs and expenses related to the CVA, the Ott Companies have
not yet been paid from Iconic related to this GBP365,000 success
fee. In October of 2022, the Ott Companies also resumed invoicing
Iconic GBP50,000 per month under the MSA. However, in an effort to
again manage Iconic's cash flow, the Ott Companies have only been
paid GBP25,000 per month for October, November and December 2022
from the first three tranches of the new GBP3 million financing
facility with EHGOSF.
The Ott Companies are being compensated in line with the time
commitment and responsibilities their personnel are providing
Iconic. This compensation is similar to that provided to firms
whose senior executives are engaged in the complex restructuring,
CVA, stabilization, settlement, and strategic business planning
required to manage publicly listed companies involved in similarly
distressed situations as Iconic.
Recruitment Policy
At present, recruiting is not a priority, but once trading has
resumed, and strategic objectives begin to be implemented, the
Remuneration Committee's approach to remuneration with regard to
recruiting staff shall be to pay no more than is necessary to
attract candidates of the appropriate calibre and experience needed
for the role. The Remuneration Committee would consider payment of
compensation for the forfeiture of variable awards from previous
employers on an individual basis. Iconic would only consider
candidates for a Directorship if they hold the necessary experience
and qualities to help Iconic prosper, and in turn generate value
for the shareholders. The table below sets out the principles upon
which the Remuneration Committee shall approach recruitment of new
Executive Directors in regard to each element of remuneration.
Remuneration Purpose
Type
Basic Salary To provide the basis of a market competitive
overall remuneration.
Takes account of the role, skills, experience
and contribution of the individual.
-----------------------------------------------
Annual Bonus To incentivise executives to achieve key
strategic outcomes and deliver value for
the shareholders.
-----------------------------------------------
Exit Payments
When determining any loss of office payment for a departing
individual the Remuneration Committee shall ensure that a
consistent approach is adopted so that there is no reward for poor
performance and the liabilities of Iconic are minimised where
appropriate.
No amount shall be payable if an Executive Director is dismissed
for serious breach of contract, serious misconduct or
under-performance or acts that bring the Executive Directors, or
Iconic, into serious disrepute.
The table below sets out the policy on exit payments in relation
to each element of remuneration for Executive Directors:
Remuneration Effect of termination
Type
Basic Salary Basic salary will be paid up to and including
the termination date. Payment in-lieu of
notice may be considered.
-----------------------------------------------------
Annual Bonus The executive may still be entitled to an
annual bonus should their performance merit,
although this is at the discretion of the
Remuneration Committee. In the event of misconduct,
the executive will lose any entitlement to
a bonus.
-----------------------------------------------------
Brad Taylor
Director
Date: 27 December 2022
AUDIT COMMITTEE REPORT
The Audit Committee considers Iconic's financial reporting,
including accounting policies, and internal financial controls. It
is responsible for ensuring that Iconic's financial performance is
properly monitored and reported on. The Audit Committee aims to
meet at least twice a year, once with the auditors, and is
comprised of Bradley Taylor and David týbr. However, from 1 July
2021 through the fourth quarter of 2022, there has only been one
Audit Committee meeting that was held to approve this 2022 Audited
Annual Report & Accounts.
Iconic's accounting is provided by Azets and its audits are
conducted by Nordens Audit Limited.
Role of the Committee
The Audit Committee determines and examines any matters relating
to the financial affairs of the Group including:
- Monitoring the integrity of the financial statements and any
formal announcements relating to financial performance to ensure
that they adequately comply with appropriate accounting policies,
practices and legal requirements;
- Reviewing internal financial controls and risk management systems;
- Making recommendations to the Board in relation to the
appointment, re-appointment and removal of auditors, including
approving the remuneration and terms of engagement of the
auditor;
- Reviewing the auditor's independence and objectivity; and
- Developing and implement the non-audit services policy.
Brad Taylor
Director
Date: 27 December 2022
DIRECTORS' REPORT
The directors present their report together with the audited
financial statements of Iconic Labs PLC and its subsidiaries for
the year ended 30 June 2022.
Directors
The Directors as of 30 June 2022 were:
Brad Taylor
David Stybr
Wilhelmus Van Der Meer
Marija Hrebac
Matters Covered in the Strategic Report
A review of the business, future developments, subsequent events
and risks and uncertainties is included in the strategic
report.
Dividends
The directors do not recommend the payment of a dividend for the
year ended 30 June 2022 (30 June 2021: GBPnil).
Corporate Governance statement
The Corporate Governance report forms part of the Directors'
Report.
Post Balance Sheet Events
The company entered administration in June 2021 and as of 30
June 2022 remained in administration. Given that this report has
been prepared in the fourth quarter of 2022, numerous post balance
sheet events have been presented.
Further details can be found in note 2 of the financial
statements.
Greenhouse Gas Emissions
As far as the directors are aware the company's current business
activates (the creation of online media and advertising) do not
cause more than a negligible amount of emissions.
Directors' Responsibilities
The directors are responsible for preparing the directors'
report and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial
statements for each financial period. Under that law, the directors
have elected to prepare the financial statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the United Kingdom. The financial statements are required by law to
give a true and fair view of the state of affairs of the Company
and the Group and of the Group's results for that period.
In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and estimates that are reasonable and prudent;
-- state whether the financial statements comply with IFRS as
adopted by the United Kingdom; and
-- prepare the financial statements on the going-concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and enable them to ensure
that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Website Publication
The directors are responsible for ensuring the Annual Report and
financial statements are made available on the website. Financial
statements are published on the Group's website in accordance with
legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from
legislation in other jurisdictions. The directors are responsible
for the maintenance and integrity of the corporate and financial
information included on the Company's website. The directors'
responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Directors' Responsibilities Pursuant to DTR 4
The directors confirm that to the best of their knowledge:
-- the Group financial statements have been prepared in
accordance with international Financial Reporting Standards (IFRS)
as adopted by the United Kingdom and Article 4 of the IAS
regulation and give a true and fair view of the assets,
liabilities, financial position and profit and loss of the Group;
and
-- the annual report includes a fair review of the development
and performance of the business and the position of the Group, and
the parent company, together with a description of the principal
risks and uncertainties that they face.
Statement of disclosure to auditor
Each director at the date of approval of this annual report
confirms that:
-- so far as the directors are aware, there is no relevant audit
information of which the Group's and Company's auditor is unaware;
and
-- all the directors have taken all the steps that they ought to
have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the auditor is
aware of that information
Auditor
The auditor, Nordens Audit Limited, will be proposed for
re-appointment at the forthcoming Annual General Meeting.
Brad Taylor
On behalf of the Board
Date: 27 December 2022
INDEPENT AUDITOR'S REPORT
FOR THE YEARED 30 JUNE 2022
What we have audited
We have audited the financial statements of Iconic Labs PLC (the
"Parent Company") and its subsidiaries (the "Group") for the year
ended 30 June 2022, which comprise the: Consolidated Statement of
Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Statement of Changes in Equity, Consolidated Statement
of Cash Flows, Company Statement of Financial Position, Company
Statement of Changes in Equity and the notes to the consolidated
financial statements, including a summary of significant accounting
policies.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the United Kingdom. The financial reporting framework that has been
applied in the preparation of the Parent Company financial
statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
Opinion
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 30
June 2022 and of the Group's loss for the period then ended;
-- the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards as
adopted by the United Kingdom;
-- the Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
'Auditor's responsibilities for the audit of the financial
statements' section of our report. We are independent of the Group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to note 1 in the financial statements,
concerning the Directors' assessment of the Group and the Parent
Company's ability to continue as a going concern.
The directors have prepared cashflow forecasts for a period of
at least 12 months from the date of approving these financial
statements which indicate that the Group is at an early stage of
development and it not currently profitable. As stated in note 1,
these events or conditions, along with the other matters as set
forth in note 1 and the Group having net liabilities at the 30 June
2022 of GBP8,938,520 (2021: GBP8,176,413), indicate that a material
uncertainty exists that may cast significant doubt on the ability
of the Parent Company and the Group to continue as a going concern.
As mentioned in the Strategic Report earlier in these financial
statements, the financing from EHGOSF is conditioned upon the
Company trading again. In the event that the Company is not
relisted and Iconic cannot obtain financing to acquire companies
for its portfolio, there is a risk that it will not generate the
revenue and profitability to remain a going concern. Our opinion is
not modified in respect of this matter.
Given the uncertainties noted above, we considered going concern
to be a 'Key Audit Matter' and our audit response was as
follows:
-- Review of documentation regarding the CVA that was approved
and put in place on 22 September 2022.
-- Review of the Financing Facility in place with EHGOSF
-- Review of the confirmation of the Company exiting administration on 29 November 2022
The Company has not currently prepared forecasts for a period of
at least 12 months from the date of approval of the financial
statements due to there being no confirmation of the relisting at
the date of approval and therefore, we are unable to review these
at this current time. We have confirmed with management that they
are not aware of any other factors that might adversely impact on
their assessment of the Group's and Company's ability to continue
as a going concern other than those already noted in the financial
statements.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgment, we determined overall
materiality for the financial statements as a whole to be GBP38,000
(2021: GBP150,000), based on 5% of adjusted group loss before tax.
Materiality for the parent Company financial statements as a whole
was set at GBP35,000 (2021: GBP130,000) based on 5% of the adjusted
loss before tax.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Where considered appropriate, performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors renumeration.
We agreed with the Audit Committee to report to it all
identified errors in excess of GBP3,500 (2021: GBP13,000). Errors
below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative
grounds.
Overview of the scope of our audit
There are two significant components of the Group, located and
operating in the United Kingdom. The audits of Iconic Labs PLC and
its UK subsidiary undertakings were conducted from the UK by the
engagement team. Financial information from other components not
considered to be individually significant individually was subject
to limited review procedures carried out by the audit team.
Extent to which the audit is capable of detecting
irregularities, including fraud
We design our procedures so as to obtain sufficient appropriate
audit evidence that the financial statements are not materially
misstated due to non-compliance with laws and regulations or due to
fraud and error.
We are not responsible for preventing non-compliance and cannot
be expected to detect non-compliance with all laws and regulations
- this responsibility lies with management with the oversight of
the Directors and Audit Committee.
Based on our understanding of the Group and industry,
discussions with management and the Audit Committee, we identified
financial reporting standards, and Companies Act 2006 as having a
direct effect on the amounts and disclosures in the financial
statements.
We gained an understanding of the legal and regulatory framework
applicable to the Group and the industry in which it operates, and
considered the risks of acts by the Group which were contrary to
applicable laws and regulations, including fraud. These included
but were not limited to compliance with Companies Act 2006, the FCA
listing rule and IFRS adopted by the United Kingdom.
As part of our discussion with internal engagement team about
how and where the Group's financial statements may be materially
misstated due to fraud, we identified an increase risk of fraud in
revenue completeness.
Our audit procedures included:
-- Enquiry of management about the Group's policies, procedures
and related controls regarding compliance with laws and regulations
and if there are any known instances of non-compliance;
-- Examining supporting documents for all material balances, transactions and disclosures;
-- Review of the Board of Directors minutes;
-- Enquiry of management about litigations and claims and
inspection of relevant correspondence;
-- Evaluation of the selection and application of accounting
policies related to subjective measurements and complex
transactions;
-- Analytical procedures to identify any unusual or unexpected relationships;
-- Testing the appropriateness of journal entries recorded in
the general ledger and other adjustments made in the preparation of
the financial statements;
-- Review of accounting estimates for bias.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the financial
statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organised
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
We have identified above the going concern key audit matter and,
given that the administration of the Company previously detected
all known liabilities and there has been limited trading within the
Group during the period, no further key audit matters were
identified.
Our audit procedures in relation to these matters were designed
in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on these matters
individually and we express no such opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements, or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our
audit
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and the
Parent Company and their environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group's and Parent Company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Independence
We were appointed by the Audit Committee on 19 October 2022 and
therefore, our period of uninterrupted engagement is less than one
year covering the financial year ending 30 June 2021. We have
fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical
requirements including the FRS Ethical Standard as applied to
listed public interest entities.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Group or the Company and we remain
independent of the Group and the Company in conduction our
audit.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Lorraine Curtis BFP ACA FCCA (Senior Statutory Auditor)
for and on behalf of
Nordens Audit Limited
Statutory Auditor
Essex
Date: 27 December 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2022
Notes Year ended Year ended
30 June 30 June
2022 2021
GBP GBP
Continuing operations
Revenue 26,823 509,171
Gross profit 26,823 509,171
Administrative expenses 3 (203,930) (3,577,595)
Direct costs in connection with EHGOF
financing facility 3 (585,000) (70,000)
Other operating income - 37,945
Operating loss (762,107) (3,100,479)
Finance
costs 6 - (4,593,154)
----------- ------------
Loss before taxation (762,107) (7,693,633)
Taxation 7 - -
----------- ------------
Loss for the period from continuing
operations (762,107) (7,693,633)
Loss for the period from discontinued
operations 5 - (3,673)
Loss for the period (762,107) (7,697,306)
Total comprehensive loss for the
period (762,107) (7,697,306)
=========== ============
Loss per ordinary share 8
Basic and diluted
* from continuing operations (0.00) (0.00)
(0.00) (0.00)
* from discontinued operations (please calculate)
=========== ============
The loss for the year and total comprehensive loss for the year
are wholly attributable to the equity holders of the parent.
30 June 30 June
2022 2021
GBP GBP
Notes
Assets
Non-current assets
Intangible assets 9 1 1
----------------- -------------
Total non-current assets 1 1
----------------- -------------
Current Assets
Trade and other receivables 11 - 103,126
Cash and cash equivalents 12 5 50,929
5 154,055
----------------- -------------
Total assets 6 154,056
================= =============
Equity
Share capital 13 4,450,506 4,450,506
Share premium 14 7,900,778 7,900,778
Retained deficit 14 (21,289,804) (20,527,697)
(8,938,520) (8,176,413)
Liabilities
Current liabilities
Trade and other payables 15 6,523,526 5,881,469
Loans and borrowings 16 2,415,000 2,415,000
Provisions 17 - 34,000
8,938,526 8,330,469
----------------- -------------
Total liabilities 8,938,526 8,330,469
----------------- -------------
Total equity and liabilities 6 154,056
================= =============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
The financial statements of Iconic Labs plc were approved by the
Board and authorised for issue on 27 December 2022. They were
signed on its behalf by:
.............................................
Brad Taylor
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2022
Share Share Retained Total
capital premium deficit Equity
GBP GBP GBP GBP
Balance at 30 June 2020 4,138,936 5,578,789 (12,830,391) (3,112,666)
---------- ------------ -------------------------- ----------------
Loss for the year - - (7,697,306) (7,697,306)
Total comprehensive loss for the
year - - (7,697,306) (7,697,306)
---------- ------------ --------------------------
Transactions with owners:
Issue of shares 311,570 2,406,223 - 2,717,793
Cost of placings - (84,234) - (84,234)
Total contribution by and distribution
to owners 311,570 2,321,989 - 2,633,559
---------- ------------ --------------------------
Balance at 30 June 2021 4,450,506 7,900,778 (20,527,697) (8,176,413)
---------- ------------ -------------------------- ----------------
Loss for the year - - (762,107) (762,107)
Total comprehensive loss for the
year - - (762,107) (762,107)
---------- ------------ --------------------------
Transactions with owners:
Balance at 30 June 2022 4,450,506 7,900,778 (21,289,804) (8,938,520)
========== ============ ========================== ================
Year ended Year ended
30 June 30 June
2022 2021
Notes GBP GBP
Cash flows from operating activities
Total comprehensive loss for
the period (762,107) (7,697,306)
Loss from discontinued operations 5 - 3,673
Loss from sale of tangible assets - 20,086
Impairment of intangible assets 21,599
Depreciation 3 - 2,504
Finance costs 6 - 4,593,154
(762,107) (3,056,290)
Decrease/(increase) in trade
and other receivables 103,126 33,009
(Decrease)/increase in trade
and other payables 642,057 4,181,675
(Decrease)/increase in provisions (34,000) -
Operating cash flows used by continuing
activities (50,924) 1,158,394
Operating cash flows generated from/(used
by) discontinued operations - (3,673)
----------- ------------
Net cash used in operating activities (50,924) 1,154,721
Cash flows from financing activities
Interest paid 6 - (4,593,154)
Repayment of leases - (31,981)
Repayment of loan from director - (12,613)
Issue of share capital - 2,717,793
Cost of issuing share capital - (84,234)
Issue of convertible loan notes - 720,000
Financing cash flows from continuing
activities - (1,284,189)
Financing cash flows used by discontinued - -
operations
Net cash flows from financing
activities - (1,284,189)
Net increase/(decrease) in cash
and cash equivalents (50,924) (129,468)
Cash and cash
equivalents at
beginning
of period 50,929 180,397
Cash and cash equivalents at period
end 12 5 50,929
----------- ------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2022
30 June 30 June
2022 2021
Notes GBP GBP
Non-current assets
Investments 10 2 2
------------- -------------
Non-current assets 2 2
------------- -------------
Current assets
Trade and other receivables 11 - 400,795
Cash and cash equivalents 12 - 838
------------- -------------
- 401,633
------------- -------------
Total assets 2 401,635
============= =============
Equity
Share capital 13 4,450,506 4,450,506
Share premium 14 7,900,778 7,900,778
Retained deficit 14 (21,289,344) (19,886,206)
(8,938,060) (7,534,922)
------------- -------------
Current liabilities
Trade and other payables 15 6,523,062 5,521,557
Loans and borrowings 16 2,415,000 2,415,000
------------- -------------
8,938,062 7,936,557
------------- -------------
Total liabilities 8,938,062 7,936,557
-------------
Total equity and liabilities 2 401,635
============= =============
COMPANY STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 30 JUNE 2022
The Company's loss and total comprehensive loss for the year
ended 30 June 2022 was GBP1,403,138 (30 June 2021:
GBP7,361,611)
The financial statements of Iconic Labs plc, company number
10197256, were approved by the Board and authorised for issue on 27
December 2022. They were signed on its behalf by:
................................................
Brad Taylor
Director
COMPANY STATEMENT OF CHANGES IN EQUITY
Share Share Retained Total
capital premium deficit equity
GBP GBP GBP GBP
Balance at 30 June 2020 4,138,936 5,578,789 (12,524,595) (2,806,870)
---------- ---------- ------------- ------------
Loss for the period - - (7,361,611) (7,361,611)
---------- ---------- ------------- ------------
Total comprehensive loss
for period - - (7,361,611) (7,361,611)
---------- ---------- ------------- ------------
Transactions with owners
Issue of shares 311,570 2,406,223 - 2,717,793
Cost of placings - (84,234) - (84,234)
---------- ---------- ------------- ------------
Total contributions by and
distributions to owners 311,570 2,321,989 - 2,633,559
---------- ---------- ------------- ------------
Balance at 30 June 2021 4,450,506 7,900,778 (19,886,206) (7,534,922)
Loss for the year - - (1,403,138) (1,403,138)
---------- ---------- ------------- ------------
Total comprehensive loss
for year - - (1,403,138) (1,403,138)
---------- ---------- ------------- ------------
Balance at 30 June 2022 4,450,506 7,900,778 (21,289,344) (8,938,060)
========== ========== ============= ============
FOR THE YEARED 30 JUNE 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2022
1. Accounting Policies
Basis of preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
United Kingdom ("adopted IFRS") and with those parts of the
Companies Act 2006 applicable to companies preparing their accounts
under adopted IFRS.
These consolidated financial 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 financial 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 Iconic
financial statements on the basis that that they are able to
continue to operate for a period of at least 12 months from the
date of approving these financial statements.
As noted in the Strategic Report 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 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 Company has only recently exited administration and the
Board is working diligently to ensure compliance with the terms of
the CVA and also to get the Company relisted as soon as
possible.
The Company has, like most, been affected by the COVID-19
pandemic and has lost some revenue however the Company is confident
that it's risk to the pandemic has been mitigated. The Company has
completed fundraising which will reduce the reliance of the Company
on revenue. The Directors remain satisfied that the assumptions
they have used in the forecasts to assess that Iconic is a going
concern.
Basis of consolidation
The Group financial statements consolidate those of the parent
company and all of its subsidiaries. Subsidiaries are entities
controlled by the Group. The parent company controls a subsidiary
if it has power over the investee to significantly direct the
activities, exposure, or rights, to variable returns from its
involvement with the investee, and the ability to use its power
over the investee to affect the amount of the investors' returns.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases.
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 financial and operating policy decisions of another
entity, it is classified as an associate. Associates are initially
recognised in the consolidated statement of financial position at
cost. Subsequently associates are accounted for using the equity
method, where the Group's share of post-acquisition profits and
losses and other comprehensive income is recognised in the
consolidated statement of profit 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 2022, the Group used the five-step
model as prescribed under IFRS15 on the Group's revenue
transaction. This included the identification of the contract,
identification 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 satisfies 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 unprofitable, or a client
fails to remunerate the Company for services provided.
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
profit 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 reflect consistent classification of discontinued
operations across all periods presented.
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 benefit costs
The Group operates defined contribution retirement benefit
schemes. 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
profit for the year. Taxable profit differs from net profit 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 financial statements and the corresponding tax
bases used in the computation of taxable profit, 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 profits 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 profit nor the accounting
profit.
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 profits 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.
Intangible fixed 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 financial 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 non-current 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 financial asset.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial assets expire, or when the
financial asset and substantially all of the risks and rewards are
transferred.
The financial assets of the Group are initially measured at fair
value adjusted for transaction costs (where applicable).
Financial assets are classified into the following
categories:
- Amortised cost
- Fair value through profit or loss (FVTPL)
- Fair value through other comprehensive income (FVOCI)
The classification is determined by both:
- The Group's business model for managing the financial asset
- The contractual cash flow characteristics of the financial asset
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs and
finance 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 financial assets and collect its contractual cash
flows
- The contractual terms of the financial assets give rise to
cash flows 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 financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance
against 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
profit or loss.
Trade and other receivables
The group makes use of a simplified 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 flows, considering the potential for default at
any point during the life of the financial 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 financial liabilities include trade and
other payables and convertible debt none of which would be
classified as fair value through profit or loss.
Therefore, these financial liabilities are classified as
financial liabilities at amortised cost, as defined below:
Other financial liabilities include the following items:
-- Borrowings are initially recognised at fair value net of any
transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are subsequently
measured at amortised cost using the effective interest method,
which ensures that any interest expense over the period to
repayment is at a constant rate on the balance of the liability
carried in the statement of financial position. Interest expense in
this context includes initial transaction costs and premium payable
on redemption, as well as any interest or coupon payable while the
liability is outstanding.
-- Trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
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 financial 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 financial
instrument is measured at amortised cost using the effective
interest rate method.
Leased assets
The company applies IFRS 16 Leases. Accordingly leases are all
accounted for in the same manner:
-- A right of use asset and lease liability is recognised on the
statement of financial position, initially measured at the present
value of future lease payments;
-- Depreciation of right-of-use assets and interest on lease
liabilities are recognised in the statement of comprehensive
income;
-- The total amount of cash paid is recognised in the statement
of cash flows, split between payments of principal (within
financing activities) and interest (also within financing
activities)
The initial measurement of the right of use asset and lease
liability takes into account the value of lease incentives such as
rent free periods.
The costs of leases of low value items and those with a short
term at inception are recognised as incurred.
Share capital
The group's ordinary shares are classified as equity
instruments.
New standards adopted
From 1 January 2021 the company has applied UK-adopted IAS. At
the date of application, the UK-adopted IAS and EU-adopted IFRS
were the same.
The following accounting pronouncements and standards became
effective from 1 January 2021 and have been adopted but did not
have a significant impact on the Group's financial results or
position:
-- Covid-19 related rent concessions beyond 30 June 2021 (amendments to IFRS 16)
-- Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16)
New standards, interpretations and amendments not yet
effective
At the date of authorisation of these financial statements, the
company has not early adopted the following amendments to Standards
and Interpretations that have been issued but are not yet effective
and have not been adopted early by the Group.
Standard or Interpretation
-- Narrow scope amendments to IFRS 3, IAS 16 and IAS 37 (effective 1 January 2022)
-- Annual improvements to IFRS Standards 2018-2020 (effective 1 January 2022)
-- Amendments to IAS 1: Classification of Liabilities as Current
or Non-current (effective 1 January 2023)
-- Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure
of Accounting Policies and classification of liabilities as Current
or Non-current (effective 1 January 2023)
-- Amendments to IAS 8: Definition of Accounting Estimates (effective 1 January 2023)
-- Amendments to IAS 12: Deferred Tax Related to Assets and
Liabilities arising from a Single Transaction (effective 1 January
2023)
As yet, none of these have been endorsed for use in the UK and
will not be adopted until such time as endorsement is confirmed.
The directors do not expect any material impact as a result of
adopting the standards and amendments listed above in the financial
year they become effective.
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. Significant 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 2021, 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 unrecorded actual or contingent
liabilities is now low.
-- 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 financial impact
is now low.
3. Loss from Operations
Year ended Year ended
30 June 30 June
2022 2021
GBP GBP
The loss for the period is stated after charging:
Depreciation - 2,504
Auditors remuneration - audit services 50,000 50,000
Expenses by nature: GBP GBP
Legal and professional fees (7,102) 911,787
Consultancy fees 255,254 1,053,856
Other supplies and external services 86,027 444,473
Staff costs - 1,164,975
----------- ----------
Total operating expenses 334,179 3,575,091
----------- ----------
Depreciation, amortisation and
impairment of assets - 2,504
Writing down of subsidiary undertakings (130,249) -
Total administrative expenses 203,930 3,577,595
-----------
Direct costs incurred in connection
with EHGOF financing facility 585,000 70,000
Other penalties - 4,593,154
----------- ----------
788,930 8,240,749
----------- ----------
4. Staff Costs
Year ended Year ended
30 June 30 June
2022 2021
GBP GBP
Staff costs (including directors) comprise:
Wages and salaries - 1,128,545
Defined contribution pension cost - (150)
Social security contributions and similar
taxes - 36,580
- 1,164,975
-----------------------------------------------------------------------------------
Employee Numbers
The average number of staff employed by the group during the
period amounted to:
General and administration 4 3
4 3
---
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 Remuneration Committee Report.
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 Year ended
30 June 30 June
2022 2021
GBP GBP
Administrative expenses - write back of creditor
balances - (3,673)
Operating profit/(loss) - (3,673)
Taxation - -
-------------- -------------
Profit/(loss) for the period - (3,673)
Other comprehensive expense - -
-------------- -------------
Total comprehensive profit/(loss) for the
period - (3,673)
============== =============
6. Finance Costs
Year ended Year ended
30 June 30 June
2022 2021
GBP GBP
Finance costs
Other loan penalties - 4,592,522
Interest on leases - 632
Total finance expense - 4,593,154
------------
7. Taxation
Year ended Year ended
30 June 30 June
2022 2021
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 Year ended
30 June 30 June
2022 2021
GBP GBP
Loss before taxation (762,107) (7,697,306)
Tax using the parent company's domestic tax
rate of 19% (2021: 19%) (144,800) (1,462,488)
Effects of:
Unrelieved tax losses and other deductions
arising in the period 144,800 1,462,488
Expenses not deductible for taxation purposes - -
Total tax charged in the income statement - -
-------------
Deferred taxation 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
Year ended Year ended
30 June 30 June 2021
2022 GBP
GBP
Numerator
Loss for the period (762,107) (7,697,306)
Denominator
Weighted average number of ordinary shares
used in basic EPS 37,405,248,039 22,750,589,218
Basic and diluted loss per share
- continuing operations (0.00) (0.00)
- discontinued operations (0.00) (0.00)
--------------- -------------------
9. Intangible Assets
Group
Intellectual Computer
Property software Total
GBP GBP GBP
Cost
Balance at 30 June 2020 21,600 139,106 160,706
Disposals - (139,106) (139,106)
------------- -----------
Balance at 30 June 2021 and
30 June 2022 21,600 - 21,600
------------- ----------- -----------
Amortisation
Balance at 30 June 2020 - 139,106 139,106
Impairment 21,599 - 21,599
Eliminated on disposal - (139,106) (139,106)
-------------
Balance at 30 June 2021 and
30 June 2022 21,599 - 21,599
------------- ----------- -----------
Carrying amounts
Balance at 30 June 2022 1 - 1
============= =========== ===========
Balance at 30 June 2021 1 - 1
============= =========== ===========
10. Investments
Company
30 June 30 June
2022 2021
GBP GBP
Investments in subsidiaries 2 2
2 2
========= =========
Subsidiaries as at 30 June 2022:
Country Nature of
Entity Registered office of incorporation business Notes
address
------------------------- ------------------------- ------------------- ----------------- ---------
WideCells International 7 Bell Yard, London, United Kingdom Holding company (c)
Limited WC2A 2JR
WideCells Limited 3 Field Court, Gray's United Kingdom In liquidation (a)
Inn, London, WC1R
5EF
WideCells Portugal Rua Da Casa Branca, Portugal Trading company (a)
SA 97 Coimbra 3030-109,
Portugal
WideCells Espana Calle Castillo de Spain In liquidation (a)
SL Fuensaldana, 4, 28232
Las Rozas, Madrid
CellPlan Limited 7 Bell Yard, London, United Kingdom Dormant company (a)
WC2A 2JR
CellPlan International Edificio Tower Plaza Portugal Dormant company (b)
Lda Rotunda Eng, Edgar
Cardoso, no. 23,
11 F, 4400-676 Vila
Nova de Gaia, Portugal
Iconic Labs IP Limited 7 Bell Yard, London, United Kingdom Trading company (c)
WC2A 2JR
Nuuco Media Limited 7 Bell Yard, London, United Kingdom Trading company (c)
WC2A 2JR
Notes: (a) 100% owned by WideCells International Limited (b) 100% owned by CellPlan Limited
(c) 100% owned by Iconic Labs plc
During the 2022 financial year, the following subsidiary
undertakings and associated undertakings were dissolved:
- Iconic Labs UK Limited (subsidiary);
- Wideacademy Limited (subsidiary);
- Coalition Media Limited (subsidiary); and
- Medium Channel Media Limited (associate)
In September 2019, Widecells Limited was placed liquidation. The
company was dissolved in August 2022.
In August 2022, Iconic Labs IP Limited was dissolved.
In November 2019, Widecells Espana was placed into
liquidation.
11. Trade and other receivables
Group
30 June 30 June
2022 2021
GBP GBP
Trade receivables - 100,000
Other receivables - 3,126
--------- --------
Total receivables - 103,126
========= ========
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 financial
position date is the fair value of each class of receivable.
Book values approximate to fair value at 30 June 2022 and 30
June 2021.
Company
30 June 30 June
2022 2021
GBP GBP
Amounts due from group companies - 398,185
Other receivables - 2,610
--------- --------
- 400,795
============================================ ========
12. Cash and cash equivalents
Group
30 June 30 June
2022 2021
GBP GBP
Cash at bank available on demand 5 50,929
Bank overdraft - -
-------- --------
Total cash and cash equivalents 5 50,929
-------- --------
Company
30 June 30 June
2022 2021
GBP GBP
Cash at bank available on demand - 838
Total cash and cash equivalents - 838
---------
13. Share Capital
30 June 30 June 2021
2022
Number GBP Number GBP
Authorised,
allotted
and fully paid
- classified
as equity
Ordinary
shares of
GBP0.00001
each 37,405,248,039 374,052 37,405,248,039 374,052
Deferred
shares of
GBP0.00249
each 1,637,129,905 4,076,454 1,637,129,905 4,076,454
-------------------------- ----------- ------------------------------- ----------------
Total 39,042,377,944 4,450,506 39,042,377,944 4,450,506
-------------------------- ----------- ------------------------------- ----------------
At 30 June 2021 and 30 June 2022, the company had 37,405,248,039
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.
-- All pre-emption rights in the Articles to be waived; (i) for
the purposes of, or in connection with, the Placing, the issue of
the Conversion shares and the issue of the Warrant shares; (ii)
generally for such purposes as the directors may think fit
(including the allotment of equity securities for cash) up to a
maximum aggregate amount of GBP40,543.54; and (iii) for the
purposes of the issue of securities offered (by way of a rights
issue, open offer or otherwise) to existing holders of Ordinary
share, but subject to the directors having a right to make such
exclusions or other arrangements in connection with the offering as
they deem necessary or expedient; (A) to deal with the equity
securities representing fractional entitlements; and (B) to deal
with legal or practical problems in the laws of any territory, or
the requirements of any regulatory body; on the basis that the
authorities conferred under the resolution referred to in paragraph
3.6.2 of the listing prospectus shall (unless previously renewed,
varied or revoked prior to that time) expire at the conclusion of
the company's next annual general meeting or on the date falling 18
months after the date of the passing of the resolution, whichever
is the sooner. The company may make an offer or agreement which
would or might require equity securities to be issued before the
expiry of its power to do so, but allot the equity securities
pursuant to any such offer or agreement after that expiry date.
The holders of Ordinary shares have full voting, dividend and
capital distribution rights. 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.
14. Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share
capital in excess of nominal
value
Retained deficit All other net gains and losses
and transactions with owners
(e.g. dividends) not recognised
elsewhere
15. Trade and other payables
Group
30 June 30 June
2022 2021
GBP GBP
Trade payables 809,844 821,249
Other payables 5,574,562 4,660,251
Accruals 139,120 95,621
Tax and social security - 304,348
Total 6,523,526 5,881,469
----------
Book values approximate to fair values at 30 June 2022 and 30
June 2021.
Company
30 June 30 June
2022 2021
GBP GBP
Trade payables 809,380 775,376
Other payables 5,574,562 4,657,060
Accruals 139,120 89,121
Tax and social security - -
---------- ----------
6,523,062 5,521,557
---------- ----------
Book values approximate to fair values at 30 June 2022 and 30
June 2021.
16. Loans and borrowings
Group
30 June 30 June
2022 2021
Current GBP GBP
Convertible loans 2,415,000 2,415,000
---------- ----------
Total 2,415,000 2,415,000
---------- ----------
Book values approximate to fair values at 30 June 2022 and 30
June 2021.
Company
30 June 30 June
2022 2021
Current GBP GBP
Convertible loans 2,415,000 2,415,000
Total 2,415,000 2,415,000
----------
17. Provisions
30 June 30 June
2022 2021
GBP GBP
Provisions brought forward 34,000 34,000
Provision reversed in year (34,000) -
Provisions carried forward - 34,000
----------
18. Financial Instruments - Risk Management
The group is exposed through its operations to the following
financial risks:
-- Credit risk
-- Market risk
-- Liquidity risk
In common with other businesses, the group is exposed to risks
that arise from use of financial instruments. This note describes
the group's objectives, policies and processes for managing those
risks and the methods used to measure them.
The principal financial instruments used by the group, from
which the financial instrument risks arise, are as follows:
-- Cash and cash equivalents
-- Trade and other payables
-- Loans and borrowings
A summary of the financial instruments held by category is
provided below:
-- Financial assets - amortised cost
-- Financial liabilities - amortised cost
Group:
2022 2021
GBP GBP
Cash and cash equivalents 5 50,929
Trade and other receivables - 103,126
----- --------
Total financial assets - amortised cost 5 154,055
----- --------
2022 2021
GBP GBP
Trade and other payables 6,523,526 5,881,469
Loans and borrowings 2,415,000 2,415,000
---------- ----------
Total liabilities - amortised cost 8,938,526 8,296,469
---------- ----------
Company: 2022 2021
GBP GBP
Cash and cash equivalents - 838
Trade and other receivables - 400,795
-------- --------
Total financial assets - amortised cost - 401,633
-------- --------
2022 2021
GBP GBP
Trade and other payables 6,523,062 5,521,557
Loans and borrowings 2,415,000 2,415,000
---------- ----------
Total liabilities - amortised cost 8,938,062 7,936,557
---------- ----------
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 flexibility. Further details regarding
these policies are set out below:
Credit risk
Credit risk is the risk of financial loss to the Group if a
counterparty to the financial 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 financial institutions. For banks and
financial institutions, only independently rated parties with high
credit status are accepted.
The Group does not enter into derivatives to manage credit
risk.
Cash in bank
Group
2022 2021
GBP GBP
Cash held at HSBC - S&P Rating AA 5 46,746
Cash held at Santander - S&P rating A - 4,183
----- -------
Total financial assets 5 50,929
----- -------
Company
2022 2021
GBP GBP
Cash held at HSBC - S&P Rating AA - 838
Total financial assets - 838
------
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 2022 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 financial 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-flows) of financial
liabilities:
Group:
Between Between Between Over
Up to 3 and 1 and 2 and 5 years
3 months 12 2 5 years GBP
2022 GBP months years GBP
GBP GBP
Trade and other payables 6,523,526 - - - -
Borrowings 2,415,000 - - - -
Total 8,938,526 - - - -
----------- -------- -------- ---------
Between Between Between Over
Up to 3 and 1 and 2 and 5 years
3 months 12 2 5 years GBP
2021 GBP months years GBP
GBP GBP
Trade and other payables 5,881,469 - - - -
Borrowings 2,415,000 - - - -
Total 8,296,469 - - - -
----------- -------- -------- ---------
More details in regard to the line items are included in the
respective notes:
-- Trade and other payables - note 15
-- Loan and borrowings - note 16
At the balance sheet date, the Group had liabilities due for
settlement within 3 months of GBP8,938,526, compared to a cash
balance of GBP5. 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.
GBP2,415,000 of borrowings are convertible loan notes which can
be settled by way of an issue of share capital.
Capital risk management
The group monitors capital which comprises all components of
equity (i.e. share capital, share premium and accumulated
deficit).
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 financing structures and
therefore have set an objective to move towards a conventional,
simplified 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.
At present the directors do not intend to pay dividends but will
reconsider the position in future periods, as the group becomes
profitable.
Reconciliation of movement in net cash
Repayment
Loan notes Loan notes of
Net cash issued converted borrowings Net cash
at 01 July Cash flow in the in the (continuing at 30 June
2021 period period activities) 2022
GBP GBP GBP GBP GBP GBP
Cash at
bank and
in hand 50,929 (50,924) - - - 5
Borrowings (2,415,000) - - - - (2,415,000)
Total
financial
liabilities (2,364,071) (50,924) - - - (2,414,995)
Repayment
Loan Loan of
Net cash notes notes borrowings Net cash
at 01 July Cash issued converted (continuing at 30 June
2020 flow in the in the activities) 2021
period period
GBP GBP GBP GBP GBP GBP
Cash at
bank and
in hand 180,397 (129,468) - - - 50,929
Borrowings (1,739,594) - (720,000) - 44,594 (2,415,000)
Total
financial
liabilities (1,559,197) (129,468) (720,000) - 44,594 (2,364,071)
19. Capital Commitments
The group had no capital commitments at 30 June 2022 or 30 June
2021.
20. Related party Transactions
Details of directors' remuneration are given in the Remuneration
Committee Report.
There are no other related party transactions.
21. Contingent Liabilities
The group had no contingent liabilities at 30 June 2022 or 30
June 2021.
22. Post Balance Sheet Events
In the fourth quarter of 2022 exited administration. Further
details can be found in the Chief Executive and Chairmans'
Statement.
23. Ultimate Controlling Party
The directors do not consider that there is an ultimate
controlling party of the group.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR SSIFMDEDSEDF
(END) Dow Jones Newswires
January 03, 2023 11:48 ET (16:48 GMT)
Widecells (LSE:WDC)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Widecells (LSE:WDC)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024
