ICONIC LABS PLC — Interim / Quarterly Report 2021

Apr 30, 2021

National Storage Mechanism | Additional information

RNS Number : 2791X

Iconic Labs PLC

30 April 2021

ICONIC LABS PLC

UNAUDITED CONSOLIDATED INTERIM FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

ICONIC LABS PLC

CONTENTS

Page

	Company Information	1

	Chairman's Statement	2

	Responsibility Statement	4

	Consolidated Statement of Comprehensive Income	5

	Consolidated Statement of Financial Position	6

	Consolidated Statement of Changes in Equity	7

	Consolidated Statement of Cash Flows	8

	Notes to the Consolidated Financial Statements	9

ICONIC LABS PLC

COMPANY INFORMATION

DIRECTORS                                                   David Stybr

Bradley Taylor

Wilhelmus Van Der Meer         

SECRETARY		AMBA Secretaries Limited

REGISTERED OFFICE                                   27-28 Eastcastle Street

London

W1W 8DH

BUSINESS ADDRESS                                   Waverley House

9 Noel Street

London

W1F 8GO

REGISTERED NUMBER                                10197256 (England and Wales)

INDEPENDENT AUDITOR                           Crowe U.K LLP

55 Ludgate Hill

London

EC4M 7JW

SOLICITORS		King & Wood Mallesons LLP

11th Floor, 20 Fenchurch St.

London

EC3M 3BY

REGISTRAR                                                 Equiniti Charter

Elder House St Georges Business Park

Brooklands Road Weybridge

Surrey

KT12 9TS

PUBLIC RELATIONS                                  Citigate Dewe Rogerson

8th Floor, Holborn Gate

26 Southampton Buildings

London

WC2A 1AN 

ICONIC LABS PLC

CHAIRMAN'S STATEMENT

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

Having recently taken over as Chief Executive Officer of Iconic Labs plc (together with its subsidiaries, "Iconic Labs" or the "Company"), I am pleased to present the interim accounts for the six months ended 31 December 2020.

It has been a challenging endeavour assembling these accounts given the circumstances surrounding the departures of the previous executives, directors, and most of the personnel coupled with the lack of any formal handover from them. My predecessor Sarah Dees with the assistance of then non-executive director Stephen Birrell did a commendable job beginning the process of determining what had taken place at Iconic Labs during the last six months of 2020. I again thank them for their work and assistance in facilitating my transition and the transition of the new Board of Directors into the Company.

Since my arrival, the new Board of Directors and I, along with significant assistance from our reporting accounting firm and accountants have assembled these interim accounts.

Iconic Labs increased its six-month revenues to £496,052 compared to £107,333 for the twelve-month period ended 30 June 2020, mainly by providing management services to its business partners. Unfortunately, losses also increased to £934,707 in the six-month period ended 31 December 2020 compared to the £848,233 loss recorded for the six-month period ended 31 December 2019. The operating costs substantially outweighed the revenues - mainly due to spending on consulting, legal and professional services - resulting in a loss for the period.

Most of Iconic Labs' receivables stem from its business activity with Greencastle Acquisition Limited, Greencastle Capital, Greencastle MM LLP and/or their affiliated entities (together, the "Greencastle Entities"). Of note, when the previous executives, directors, and most of the personnel left Iconic Labs, they began working for the Greencastle Entities. As such, Iconic Labs is now in the peculiar position where significant revenues were generated through management service fees charged to the Greencastle Entities, those fees are still outstanding to Iconic Labs, but the previous Iconic Labs team under which those fees were generated now work for the Greencastle Entities. The term loan provided to Greencastle MM LLP is also outstanding as of the date of these six-month accounts.

As mentioned in our press releases, Iconic Labs has delivered pre-claim letters alleging a number of serious wrongdoings, including breaches of duty and unlawful means conspiracy, against certain executives, directors, consultants and affiliated entities who were with the Company in 2020, including, so far, the Greencastle Entities, David Sefton, Liam Harrington, John Quinlan and Samuel Regan-Asante. We have engaged legal and forensic experts to conduct a thorough internal investigation and assist us in pursuing these matters, and will ensure the market is apprised of developments along these fronts.

As also mentioned in our prior press release, Greencastle Acquisition Limited has also served a statutory demand on Iconic Labs for an amount of £58,668, which is alleged to be comprised of various sums assigned by the former executive team, consultants and employees of the Company less amounts owed by Greencastle Entities to Iconic, including the £1,000,000 term loan and outstanding management services fees. We are in the process of ascertaining the basis of this claim. While our review is not yet complete, based on information currently available, we have determined that the claim lacks substance and merit. As such, our Board of Directors has decided to disclose this claim by recognizing it as a contingent liability in these accounts.

With all of that in mind, today I would like to draw a hard line between the past and the future of Iconic Labs. I will diligently pursue, to the fullest extent of the law, all claims for alleged wrongdoings done to our Company during the period prior to my arrival. 

ICONIC LABS PLC

CHAIRMAN'S STATEMENT

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

However, our shareholders deserve more than the assurance that the past will be dealt with; they deserve a vision for the future. Towards those ends, beginning today Iconic Labs plans to assemble a new portfolio of cutting-edge media, data, information, internet, security, and technology companies. Active discussions are taking place with several companies and the market will be informed as those discussions advance. 

This vision can only be realized on the foundation of sound financing, which the Company has in place with its 2020 financing facility with European High Growth Opportunities Securitization Fund ("EHGOSF").

During the six-month period ended 31 December 2020, more than £1,700,000 million of convertible loans were converted, and Iconic Labs drew down an additional £1,000,000 in convertible debt from EHGOSF to be able to finance its operations.

Under this 2020 financing facility with EHGOSF, there remained £2,750,000 that could be drawn upon. On 29 April 2021, the Company submitted a drawdown request to EHGOSF of £250,000 under this facility. In turn, EHGOSF agreed to waive the conditions precedent to draw down with respect to such tranche and subscribed for the £250,000 tranche, with any conversions of convertible notes and warrants being subject to the Iconic Labs' existing corporate authorities.    The Company expects to receive the proceeds from such tranche in the amount of £250,000 within the coming days.

Following this subscription by EHGOSF of £250,000, there remains £2,500,000 for Iconic Labs to draw upon (noting the conversion of any notes and warrants issued in future drawdowns will be subject to Iconic Labs' then existing corporate authorities). EHGOSF has reiterated that it will support the Company in the next phase of its restructuring and vision for the future, including by continuing the financing under the existing 2020 financing facility.

As previously disclosed, Iconic Labs is also in discussions with EHGOSF with respect to a new financing facility in the amount of £50,000,000, which EHGOSF has committed to consider. Iconic Labs is grateful for the support of EHGOSF and the willingness it has shown to support the Company in this new phase of the Company's business. I look forward to updating shareholders on developments when they occur.

In closing, I hope that all of you and your families are staying safe and healthy during this pandemic. My thoughts go out to all of those who are suffering hardship or have lost family members and loved ones. Like everyone, I am hopeful that things will improve in 2021.     

Going Concern Assessment

The Board of Directors has carefully considered the financial position of Iconic Labs regarding the events during the six months ended 31 December 2020, with particular focus on the change in management and leadership as well as the economic and social effects of the current Covid-19 pandemic. We have concluded that as a result of the £2,500,000 facility remaining in place with EHGOSF as well as substantial discussions with EHGOSF to secure an additional long-term financing facility, Iconic Labs remains a going concern.

ICONIC LABS PLC

RESPONSIBILITY STATEMENT

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

The directors confirm to the best of our knowledge:

•              the interim financial statements have been prepared in accordance with IAS 34, as adopted by the European Union;

•              the Chairman's statement and interim financial statements include a fair review of the information required by the Financial Statements Disclosure and Transparency Rules (DTR) 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the year; and

•              the Chairman's statement includes a fair review of the information required by DTR 4.2.8R, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period and also any changes in the related party transactions described in the last annual report that could do so.

At the date of this statement, the Directors are those listed on the company information page of these interim financial statements.

ICONIC LABS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020 (unaudited)

			Six months ended 31 December 2020		Six months ended 31 December 2019		Year ended 30 June 2020 (audited)
		Notes	£		£		£
Revenue			496,052		2,500		107,303
Cost of sales			-		(81,468)		-
Gross profit/(loss)			496,052		(78,968)		107,303
Administrative expenses			(1,478,854)		(681,227)		(2,357,366)
Direct costs incurred in connection with EHGOF financing facility			-		-		(262,000)
Other operating income			36,637				25,000
Operating loss			(946,165)		(760,195)		(2,487,063)
Finance income			12,090		-		-
Finance costs			(632)		(1,935)		(353,120)
Loss before taxation			(934,707)		(762,130)		(2,840,183)
Taxation					-		-
Loss for the period from continuing operations			(915,673)		(762,130)		(2,840,183)
Loss for the period from discontinued operations			(19,034)		(86,103)		450,062
Loss for the period			(934,707)		(848,233)		(2,390,121)
Total comprehensive expense for the period			(934,707)		(848,233)		(2,390,121)
Basic and diluted loss per ordinary share (pence) -       from continuing operations -      from discontinued operations		3	(0.00)         (0.00)		(0.05)         (0.01)		(0.11)         (0.00)

ICONIC LABS PLC (REGISTERED NUMBER: 10197256)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2020 (unaudited)

		31 December 2020		31 December 2019		30 June 2020 (audited)
	Notes	£		£		£
Non-current assets
Property, plant and equipment		21,338		5,841		22,590
Intangible assets		21,600		39,600		21,600
		42,938		45,441		44,190
Current assets
Trade and other receivables		1,651,478		168,353		136,135
VAT recoverable		-		44,800		-
Cash and cash equivalents		190,990		26,914		180,397
		1,842,468		240,067		316,532
Total assets		1,885,406		285,508		360,722
Equity
Shareholders' equity
Share capital	4	4,450,506		4,092,825		4,138,936
Share premium		7,900,677		5,124,900		5,578,789
Retained deficit		(13,765,098)		(11,288,503)		(12,830,391)
Total equity		(1,413,915)		(2,070,778)		(3,112,666)
Current liabilities
Trade and other payables	5	1,986,131		1,610,533		1,699,794
Loans and borrowings		1,279,190		650,432		1,739,594
Lease liabilities		-		55,321		-
Provisions		34,000		40,000		34,000
		3,299,321		2,356,286		3,473,388
Total liabilities		3,299,321		2,356,286		3,473,388
Total equity and liabilities		1,885,406		285,508		360,722
Net asset value per share (pence)		(0.00)		(0.13)		(0.04)

ICONIC LABS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020 (unaudited)

	Share capital £	Share premium £	Retained deficit £	Total equity £
Balance at 1 July 2019	3,498,257	5,124,900	(10,440,270)	(1,817,113)
Changes in equity
Transactions with owners:
Issue of shares	594,568	-	-	594,568
Total transactions with owners:	594,568	-	-	594,568
Total comprehensive expense	-	-	(848,233)	(848,233)
Balance at 31 December 2019	4,092,825	5,124,900	(11,288,503)	(2,070,778)
Changes in equity
Transactions with owners:
Issue of shares	46,111	453,889	-	500,000
Total transactions with owners:	46,111	453,889	-	500,000
Total comprehensive expense	-	-	(1,541,888)	(1,541,888)
Balance at 30 June 2020	4,138,936	5,578,789	(12,830,391)	(3,112,666)
Changes in equity
Transactions with owners:
Issue of shares	311,570	2,406,222	-	2,717,792
Costs of issuing shares		(84,334)	-	(84,334)
Total transactions with owners:	311,570	2,321,888	-	2,633,458
Total comprehensive expense	-	-	(934,707)	(934,707)
Balance at 31 December 2020	4,450,506	7,900,677	(13,765,098)	(1,413,915)

ICONIC LABS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020 (unaudited)

		Six months ended 31 December 2020		Six months ended 31 December 2019		Year ended 30 June  2020 (audited)
		£		£		£
Cash flows from operating activities
Total comprehensive loss for the period		(934,707)		(848,233)		(2,390,121)
Loss for the period from discontinued operations		19,034		86,103		(450,062)
Adjustments for
Depreciation		1,252		1,252		2,503
Finance income		(12,090)
Finance costs		632		1,935		353,120
Increase in trade and other receivables		(1,519,174)		(197,231)		(120,213)
(Decrease)/increase in trade and other payables		287,736		(125,773)		1,212,679
Decrease in provisions		-		-		(6,000)
Operating cashflows used by continuing activities		(2,157,317)		(1,081,947)		(1,398,094)
Operating cashflows used by discontinued operations		(4,513)		(86,103)		(204,561)
Net cash used in operating activities		(2,161,830)		(1,168,050)		(1,602,655)
Cash flows from investing activities
Purchase of property, plant and equipment		-		-		(18.000)
Purchase of intangible assets		-		(39,600)		(21,600)
Net cash used in investing activities		-		(39,600)		(39,600)
Cash flows from financing activities
Interest paid		(632)		(1,935)		(353,120)
Repayment of finance leases		(11,904)		(24,098)		(47,098)
Loan from director		21,500		-		16,613
Repayment of loan from director		-		-		(4,340)
Issue of loan notes		1,500,000		1,245,000		2,195,000
Issue of share capital		747,793		-		-
Costs in respect of issuing share capital		(84,334)		-		-
Net cash from/(used in) financing activities		2,172,423		1,218,967		1,807,055
Increase/(decrease) in cash and cash equivalents		10,593		11,317		164,800
Cash and cash equivalents at beginning of period		180,397		15,597		15,597
Cash and cash equivalents at end of period		190,990		26,914		180,397

ICONIC LABS PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020 (unaudited)

1.          Basis of preparation

The Company is registered in England and Wales. The consolidated interim financial statements for the six months ended 31 December 2020 comprise those of the Company and subsidiaries. In 2020, the Company was primarily involved in media and technology in the United Kingdom and now plans to assemble a new portfolio of cutting-edge media, data, information, internet, security, and technology companies.

Statement of compliance

This consolidated interim financial report has been prepared in accordance with the measurement principles of IFRS adopted in the EU. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial performance and position of the Company since the last annual consolidated financial statements for the period ended 30 June 2020. This consolidated interim financial report does not include all the information required for full annual financial statements prepared in accordance with International Financial Reporting Standards. The financial statements are unaudited and do not constitute statutory accounts as defined in section 434(3) of the Companies Act 2006.

A copy of the audited annual report for the period ended 30 June 2020 has been delivered to the Registrar of Companies. The auditor's report on these accounts was unqualified and did not contain statements under s498(2) or s498(3) of the Companies Act 2006.

This consolidated interim financial report was approved by the Board of Directors on 29 April 2021.

Significant accounting policies

The accounting policies applied by the Company in this consolidated interim financial report are the same as those applied by the Company in its consolidated financial statements for the period ended 30 June 2020.

New and amended standards adopted by the Company

A number of new or amended standards became applicable for the current reporting period. The Company did not have to change its accounting policies or make retrospective adjustments as a result of the adoption of these standards.

Going concern

The Board of Directors has carefully considered the financial position of Iconic Labs regarding the events during the six months ended 31 December 2020, with particular focus on the change in management and leadership as well as the economic and social effects of the current Covid-19 pandemic. We have concluded that as a result of the £2,500,000 facility remaining in place with EHGOSF as well as substantial discussions with EHGOSF to secure a long-term financing facility, Iconic Labs remains a going concern.

2.         Operating segments

In 2020, the Company was primarily involved in media and technology in the United Kingdom and now plans to assemble a new portfolio of cutting-edge media, data, information, internet, security, and technology companies.

ICONIC LABS PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2020 (unaudited)

3.           Basic and diluted loss per share

Basic

The calculation of loss per share for the six months to 31 December 2020 is based on the loss for the period attributable to ordinary shareholders of £697,510 divided by a weighted average number of ordinary shares in issue.

The weighted average number of shares used for the six months ended 31 December 2020 was 22,255,503,715 (June 2020 - 2,500,412,604) (December 2019 - 1,572,502,947).

4.        Share capital

Allotted, issued and fully paid:			31 December 2020	31 December 2019	30 June 2020 (audited)
Number:	Class:	Nominal value:	£	£	£
37,405,248,039	Ordinary	£0.00001	374,052	-	62,482
1,637,129,905	Deferred	£0.00249	4,076,454	-	4,076,454
1,637,129,905	Ordinary	£0.00250	-	4,092,825	-
			4,450,506	4,092,825	4,138,936

At 1 July 2020, the Company had 6,248,241,015 Ordinary shares of £0.00001 each in issue. The Company had 1,637,129,905 Deferred shares of £0.00250 each in issue.

During the period, the company issued the following ordinary shares:

- 13 July 2020, 2,000,000,000 shares were issued to settle convertible loan notes. The shares were issued at a premium of 0.008 pence per share;

- 30 July 2020, 1,555,555,554 shares were issued to settle convertible loan notes. The shares were issued at a premium of 0.008 pence per share;

- 17 August 2020, 1,857,142,857 shares were issued to settle convertible loan notes. The shares were issued at a premium of 0.006 pence per share;

- 2 September 2020, 2,428,571,428 shares were issued to settle convertible loan notes. The shares were issued at a premium of 0.006 pence per share;

- 14 September 2020, 3,428,571,428 shares were issued to settle convertible loan notes. The shares were issued at a premium of 0.006 pence per share;

- 25 September 2020, 5,000,000,000 shares were issued to settle convertible loan notes. The shares were issued at a premium of 0.006 pence per share;

- 14 October 2020, 4,555,555,555 shares were issued to settle warrants. The shares were issued at a premium of 0.008 pence per share;

- 16 October 2020, 2,100,000,00 shares were issued to settle warrants. The shares were issued at a premium of 0.009 pence per share;

- 16 October 2020, 1,999,999,999 shares were issued to settle convertible loan notes. The shares were issued at a premium of 0.006 pence per share;

- 13 November 2020, 6,231,610,203 shares were issued. The shares were issued at a premium of 0.011 pence per share;

The Ordinary shares carry no rights to fixed income.

ICONIC LABS PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 (unaudited)

5.        Trade and other payables

	31 December 2020	31 December 2019	30 June 2020 (audited)
	£	£	£
Trade payables	675,884	686,452	587,747
Other payables	696,431	833,625	620,931
Accruals	298,350	54,000	328,713
Tax and social security	315,466	36,456	162,403
	1,986,131	1,610,533	1,699,794

6.        Financial instruments

	Net cash at 1 July 2019	Cash flow	Loan notes issued in the period	Loan notes converted in the period	New loans in the period	Repayment of borrowings	Net cash at 31 December 2019
	£	£	£	£	£	£	£
Cash at bank and in hand	15,597	11,317	-	-	-	-	26,914
Borrowings	(79,419)	-	(1,245,000)	594,568	-	24,098	(705,753)
Total financial liabilities	(63,822)	11,317	(1,245,000)	594,568	-	24,098	(678,839)

	Net cash at 1 July 2020	Cash flow	Loan notes issued in the period	Loan notes converted in the period	New loans in the period	Repayment of borrowings	Net cash at 31 December 2020
	£	£	£	£	£	£	£
Cash at bank and in hand	180,397	10,593	-	-	-	-	190,990
Borrowings	(1,739,594)	-	(1,500,000)	1,970,000	(21,500)	11,904	(1,279,190)
Total financial liabilities	(1,559,197)	10,593	(1,500,000)	1,970,000	(21,500)	11,904	(1,088,200)

7.        Post Balance Sheet Events

As set forth in greater detail in the Chairman's Message above, the directors, management, and most of the personnel who were with Iconic Labs in 2020, left the Company in early 2021 and moved to the Greencastle Entities. After an interim CEO and Board of Directors began the process of determining what had taken place at Iconic Labs prior to their arrival, a new CEO, Brad Taylor, was appointed as well as a new Board of Directors comprised of David Stybr, Willem van der Meer, and Brendan O'Mahony. On 29 April 2021, Brendan O'Mahony resigned from the Board of Directors.

Iconic Labs has delivered pre-claim letters to the Greencastle Entities as well as certain individuals. Greencastle Acquisition Limited also served a statutory demand on Iconic Labs. The Board of Directors has engaged forensic and accounting experts to investigate this claim. The Company's review is ongoing, but based on information currently available, we have determined that the claim against Iconic Labs lacks substance and merit.    

The Company is in discussions with several companies as it begins the process of assembling a portfolio of cutting-edge media, data, information, internet, security, and technology companies.

Iconic Labs has requested a draw down of, and EHGOSF has subscribed to, £250,000 pursuant to the 2020 financing facility leaving a remaining £2,500,000 that can be drawn upon (noting the conversion of any notes and warrants issued in future drawdowns will be subject to Iconic Labs' then existing corporate authorities). In addition, the Company continues its discussions with EHGOSF regarding a potential long term financing facility of up to £50,000,000. 

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