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Solid Clouds hf. — Interim / Quarterly Report 2023
Sep 1, 2023
8579_rns_2023-08-31_52dfe8f4-1bef-49a9-aefd-ab47c9678007.pdf
Interim / Quarterly Report
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RAFRÆNT UNDIRRITAD
Svanhvit Friðriksdóttir
Kt. 1910785359
Dags. 31.8.2023 17:35:10
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Ólafur Andri Ragnarsson
Kt. 2110664829
Dags. 31.8.2023 18:04:34
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Sigurlína V Ingvarsdóttir
Kt. 1411784319
Dags. 31.8.2023 17:59:27
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Brynjólfur Erlingsson
Kt. 1711774649
Dags. 31.8.2023 20:44:55
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Egert Árni Gislason
Kt. 2407612119
Dags. 31.8.2023 17:59:56
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Stefán Gunnarsson
Kt. 1204765649
Dags. 31.8.2023 18:00:45
Åstæða: Undirritun
Solid Clouds hf
Condensed
Interim Financial Statements June 30, 2023
kt: 600913-2550
Eiðistorgi 17
170 Seltjarnarnes
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Contents
Page
Report of the Board of Directors and Managing Director ... 3
Statement of Profit and Loss ... 4
Statement of Financial Position ... 5
Statement of Changes in Equity ... 6
Statement of Cash Flows ... 7
Notes ... 8
Managing Director and Board of Directors' Report
Solid Clouds hf was founded in 2013. Its objectives are software development and the creation and marketing of computer games.
Net loss for the period January 1st to June 30, 2023, amounted to ISK 50 million. Total assets stood at ISK 1,250 million at the end of June 2023 and stockholder's equity amounted to ISK 1,207 million at the same time. There were 20 employees during the period 1 January to 30 June 2023.
The number of shareholders at the end of June 2023 were 1,598 compared to 1,600 at the beginning of the year. The following are the ten largest shareholders as of the end of June 2023:
| Stefán Gunnarsson | 10,45% |
|---|---|
| Kjölur fjärfestingarfélag ehf. | 6,64% |
| Sigurður Arnljótsson | 4,12% |
| Stefán Þór Björnsson | 3,84% |
| Frigus ehf. | 2,61% |
| S9 ehf. | 1,94% |
| Vilano Capital Sp.z.o.o. | 1,73% |
| Tómas Sigurðsson | 1,67% |
| Eggert Árni Gíslason | 1,58% |
| Kvika - innlend hlutabréf | 1,56% |
| Other shareholders (1,584) | 63,86% |
Starborne Frontiers entered soft launch last February when the game was made available for smart devices in the app stores of Apple and Google. Since Starborne Frontiers launched, over 60,000 players have tried the game. Solid Clouds hf has adjusted its advertising campaigns in order to reach around 350 new players per day. That is a sufficient amount of players at this stage to get the data needed to tune the game and its revenue model. The percentage of players who have made in-game purchases (e. conversion) has been strong which bodes well for the future. Ahead is a major update and continued optimization of Starborne Frontiers' monetization and game systems.
Davíð Gunnarsson was elected to the board of Solid Clouds hf at the Company's Annual General Meeting last April. He has extensive experience in running technology companies as CEO of Dohop.
Solid Clouds hf's cash at the end of June 2023 amounted to ISK 119 million but in addition the Company expects about ISK 129 million reimbursement in early November from the state for research and development costs after receiving final approval from the tax authorities. Solid Clouds hf expects that the reimbursement for the operating year 2023, which will be paid out in November 2024, will be similar to the payment in the year 2023. Solid Clouds hf intends to raise additional capital this year by issuing new shares for the Company's operations and marketing activities next year.
The Board of Directors and the Managing Director of Solid Clouds hf have today reviewed the Interim Financial Statements of the Company for the period 1 January to 30 June 30 2023, and confirm them by means of their signatures.
Reykjavík, August 31st, 2023
Stefán Gunnarsson, Managing Director
Sigurlína Ingvarsd., Chairm. of the Board
Ólafur Andri Ragnarss., Board Member
Svanhvit Friðriksdóttir, Board Member
Brynjólfur Erlingsson, Board Member
Eggert Árni Gíslason, Board Member
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
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Statement of Profit and Loss January 1st to June 30, 2023
| | Note | 2023
1.1. - 30.6. | 2022
1.1. - 30.6. |
| --- | --- | --- | --- |
| Operating income | | | |
| Game revenues | 5 | 9.866 | 6.681 |
| Grants | | 0 | 4.902 |
| | | 9.866 | 11.583 |
| Operating expenses | | | |
| Development cost | | 2.220 | 2.499 |
| Salaries and related expenditures | | 3.467 | 2.309 |
| Operating expenses | | 26.529 | 14.728 |
| | | 32.216 | 19.536 |
| Operating loss before depreciation and financial inc. and expenses | | (22.350) | (7.953) |
| Depreciation of development costs | 6 | (43.049) | (28.636) |
| Depreciation of right-of use assets | 7 | (2.846) | (3.117) |
| Operating loss before financial income and expenses | | (68.246) | (39.706) |
| Financial income and (expenses) | | | |
| Interest revenues | | 6.211 | 5.735 |
| Interest expenses | | (701) | (1.639) |
| Currency exchange difference | | (354) | 64 |
| | | 5.156 | 4.160 |
| Operating loss before income tax | | (63.089) | (35.546) |
| Income tax | 8 | 13.384 | 9.211 |
| Net loss for the period | | (49.705) | (26.335) |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands
Statement of Financial Position June 30, 2023
| Note | 30.6.2023 | 31.12.2022 | |
|---|---|---|---|
| Assets | |||
| Development cost | 6 | 992.738 | 861.253 |
| Right-of-use assets | 7 | 6.911 | 10.706 |
| Deferred tax asset | 8 | 117.571 | 104.187 |
| Non-current assets | 1.117.220 | 976.145 | |
| Receivables | 6.931 | 4.710 | |
| Other receivables | 7.303 | 7.223 | |
| Cash and cash equivalents | 118.502 | 310.118 | |
| Current assets | 132.736 | 322.050 | |
| Total assets | 1.249.955 | 1.298.195 | |
| Equity | |||
| Share capital | 184.199 | 184.199 | |
| Share premium | 420.496 | 420.496 | |
| Restricted equity | 992.738 | 861.253 | |
| Share based payments | 12.336 | 11.918 | |
| Accumulated deficit | (402.878) | (221.688) | |
| Total stockholders equity | 1.206.890 | 1.256.177 | |
| Non-current liabilities | |||
| Lease liabilities | 7 | 2.161 | 4.901 |
| Non-current liabilities | 2.161 | 4.901 | |
| Liabilities | |||
| Lease liabilities | 7 | 5.406 | 6.768 |
| Accounts payable | 6.667 | 4.161 | |
| Other payables | 28.831 | 26.189 | |
| Current liabilities | 40.904 | 37.117 | |
| Total liabilities | 43.065 | 42.018 | |
| Total equity and liabilities | 1.249.955 | 1.298.195 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands
Statement of Changes in Equity June 30, 2023
| Share capital | Share premium | Restricted equity | Share-based payments | Accumul. deficit | Total Equity | |
|---|---|---|---|---|---|---|
| Equity January 1st to June 30, 2022 | ||||||
| Equity december 31, 2021 | 184.199 | 641.911 | 690.347 | 3.373 | (221.415) | 1.298.415 |
| Loss for the period | (26.335) | (26.335) | ||||
| Restricted equity | 151.932 | (151.932) | 0 | |||
| Share based payments | 830 | 830 | ||||
| Equity June 30, 2022 | 184.199 | 641.911 | 842.279 | 4.203 | (399.682) | 1.272.910 |
| Equity January 1st to June 30, 2023 | ||||||
| Equity december 31, 2022 | 184.199 | 420.496 | 861.253 | 11.918 | (221.688) | 1.256.177 |
| Loss for the period | (49.705) | (49.705) | ||||
| Restricted equity | 131.485 | (131.485) | 0 | |||
| Share based payments | 418 | 418 | ||||
| Equity June 30, 2023 | 184.199 | 420.496 | 992.738 | 12.336 | (402.878) | 1.206.890 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands
Statement of Cash Flows for January 1st to June 30, 2023
| | Note | 2023
1.1. - 30.6. | 2022
1.1. - 30.6. |
| --- | --- | --- | --- |
| Operating activities | | | |
| Operating loss before financial income and expenses and income tax | | (68.246) | (39.706) |
| Adjustments to reconcile results from operation to operating activities: | | | |
| Depreciation of development costs | 6 | 43.049 | 28.636 |
| Depreciation of right-of-use assets | 7 | 2.846 | 3.117 |
| Share based payments expensed | | 418 | 830 |
| Working capital used in operating activities | | (21.931) | (7.123) |
| Operating assets, changes | | (2.301) | (3.457) |
| Operating liabilities, changes | | 5.149 | 5.387 |
| Cash used in operating activities before interests | | (19.084) | (5.193) |
| Interest revenues received | | 6.211 | 5.735 |
| Interest expenses paid | | (701) | (1.639) |
| Net cash used in operating activities | | (13.574) | (1.097) |
| Investment activities | | | |
| Capitalized development cost | 6 | (174.534) | (180.568) |
| Investment activities | | (174.534) | (180.568) |
| Financing activities | | | |
| Instalments of lease liabilities | | (3.155) | (3.237) |
| Financing activities | | (3.155) | (3.237) |
| Decrease of cash and cash equivalents | | (191.262) | (184.902) |
| Cash and cash equivalents at beginning of year | | 310.118 | 569.625 |
| Translation difference of cash and cash equivalents | | (354) | 64 |
| Cash and cash equivalents at end of the period | | 118.502 | 384.787 |
| Non cash investment and financing activities | | | |
| Receivables because of public offering | | 0 | 0 |
| Share capital increase in public offering | | 0 | 0 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands
Notes to the Condensed Interim Financial Statements
- Reporting entity
Solid Clouds hf (the "Company") is a limited liability company incorporated and domiciled in Iceland. The address of the Company's registered office is Eiðistorg 17, Seltjarnarnes, Iceland. The main purpose of the Company is information technology, software development and creation and marketing of computer games.
- Statement of compliance with International Financial Reporting Standards
The Interim Financial Statements have been prepared in accordance with International Financial Reporting Standard IAS 34. The Condensed Interim Financial Statements of Solid Clouds hf do not include all of the information required in complete Financial Statements and should be read together with the Company's 2022 Financial Statements.
The Financial Statements for the year 2022 can be accessed at the Company or on its website, www.solidclouds.is.
- Significant accounting policies
The same accounting policies are followed in preparing the Interim Financial Statements as were used in preparing the Company's Financial Statements for 2022.
The Interim Financial Statements are presented in Icelandic krona (ISK), which is the Company's functional currency. All financial information presented in ISK has been rounded to the nearest thousand except when otherwise indicated.
- Estimates and judgement
The preparation of Interim Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands
Notes continuing:
5. Geographical distribution of the Company's income
The following table shows the distribution of revenue from game sale in different countries in the first six months of 2023 with comparison to the first six months of 2022:
| 1.1.2023 - 30.6.2023 | 1.1.2022 - 30.6.2022 | |||
|---|---|---|---|---|
| Sale in ISK thousands | Percentage of sale | Sale in ISK thousands | Percentage of sale | |
| USA | 5.836 | 59,15% | 3.184 | 47,66% |
| Canada | 756 | 7,66% | 1.138 | 17,03% |
| United Kingdom | 677 | 6,86% | 560 | 8,38% |
| Australia | 591 | 5,99% | 183 | 2,74% |
| Romania | 273 | 2,77% | 156 | 2,33% |
| Polland | 229 | 2,32% | - | - |
| Belgium | 208 | 2,11% | 437 | 6,54% |
| Slovenia | 175 | 1,77% | - | - |
| Norway | 139 | 1,41% | 83 | 1,24% |
| Hungary | 80 | 0,81% | - | - |
| Sweden | 66 | 0,67% | 143 | 2,14% |
| Germany | 65 | 0,66% | 63 | 0,94% |
| Netherlands | 60 | 0,61% | 92 | 1,38% |
| France | 58 | 0,59% | 84 | 1,26% |
| Brazil | 47 | 0,48% | - | - |
| Greece | - | - | 80 | 1,20% |
| Estonia | - | - | 62 | 0,93% |
| Mexico | - | - | 49 | 0,73% |
| Switzerland | - | - | 49 | 0,73% |
| 36 / 35 other countries | 606 | 6,14% | 318 | 4,76% |
| Total game revenues | 9.866 | 100,00% | 6.681 | 100,00% |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands
Notes continuing:
- Intangible assets
| Development cost and depreciation are specified as follows: | 2023 | 2022 |
|---|---|---|
| 1.1.-30.6. | 1.1.-31.12. | |
| Book value 1.1. | 861.253 | 690.348 |
| Capitalized development cost | 178.476 | 350.909 |
| Grants transferred to reduce development costs | (3.942) | (112.488) |
| Amortization of development cost | (43.049) | (67.516) |
| Book value at the end of the period | 992.738 | 861.253 |
- Leases
The Statement of Financial Position shows the following amounts relating to leases:
| 2023 | 2022 | |
|---|---|---|
| Right-of-use assets | 1.1.-30.6. | 1.1.-31.12. |
| Balance at the beginning of the year | 10.706 | 10.222 |
| Increase in right-of-use assets due to revaluation of lease liabilities | 585 | 1.223 |
| End of leases during the period | (1.534) | 0 |
| Capitalized right-of-use assets | 0 | 5.432 |
| Depreciation during the period | (2.846) | (6.171) |
| Balance at the end of the period | 6.911 | 10.706 |
| 30.6.2023 | 31.12.2022 | |
| --- | --- | --- |
| Lease liabilities | ||
| Non-current | 2.161 | 4.534 |
| Current | 5.406 | 6.352 |
| Total lease liabilities | 7.567 | 10.886 |
| 2023 | 2022 | |
| --- | --- | --- |
| The Statement of Profit and Loss shows the following amounts relating to leases: | 1.1.-30.6. | 1.1.-30.6. |
| Depreciation of right-of-use assets (included in depreciation) | 2.846 | 3.117 |
| Interest expense (included in interest expenses) | 324 | 249 |
| Total expense in the Statement of Profit and Loss for leases | 3.170 | 3.366 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands
Notes continuing:
| 8. Income tax asset | 2023 | 2022 |
|---|---|---|
| Income tax asset is specified as follows: | 1.1.-30.6. | 1.1.-31.12. |
| Income tax asset at the end of the year | 104.187 | 60.852 |
| Income tax in the Statement of Profit and Loss | 13.384 | 43.335 |
| Income tax asset at the end of the period | 117.571 | 104.187 |
| Income tax asset is divided to the following items: | 30.6.2023 | 31.12.2022 |
| Accumulated tax loss | 316.075 | 276.394 |
| Development cost | (198.548) | (172.251) |
| Currency exchange difference | 44 | 44 |
| Income tax asset at the end of the period | 117.571 | 104.187 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2023
All amounts are in ISK thousands