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Solid Clouds hf. — Interim / Quarterly Report 2024
Aug 30, 2024
8579_rns_2024-08-30_5ee7cb8d-becf-497d-a0d1-c17dc29b4207.pdf
Interim / Quarterly Report
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RAFRÆNT UNDIRRITAD
Eggert Árni Gíslason
Kt. 2407612119
Dags. 30.8.2024 14:58:09
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Stefán Gunnarsson
Kt. 1204765649
Dags. 30.8.2024 15:17:58
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Davíð Gunnarsson
Kt. 2407805939
Dags. 30.8.2024 14:59:19
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Andrea Olsen
Kt. 1212802999
Dags. 30.8.2024 15:28:03
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Ellas Skúli Skúlason
Kt. 1608653189
Dags. 30.8.2024 15:03:40
Åstæða: Undirritun
RAFRÆNT UNDIRRITAD
Svanhvit Fríðriksdóttir
Kt. 1910785359
Dags. 30.8.2024 15:05:02
Åstæða: Undirritun
Solid Clouds hf
Condensed
Interim Financial Statements June 30, 2024
kt: 600913-2550
Eiðistorgi 17
170 Seltjarnarnes
.
Contents
Page
Report of the Board of Directors and Managing Director ... 3
Statement of Profit and Loss ... 5
Statement of Financial Position ... 6
Statement of Changes in Equity ... 7
Statement of Cash Flows ... 8
Notes ... 9
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 multiplayer computer games.
Net loss for the period January 1st to June 30, 2023, amounted to ISK 102.5 million. Total assets stood at ISK 1,421.5 million at the end of June 2024 and stockholder's equity amounted to ISK 1,372.8 million at the same time. There were 20 employees during the period 1 January to 30 June 2024.
The number of shareholders at the end of June 2024 were 1,630 compared to 1,581 at the beginning of the year. The following are the ten largest shareholders as of the end of June 2024:
| Festa - lífeyrissjóður | 8,1% |
|---|---|
| Stefán Gunnarsson | 6,7% |
| Birta - lífeyrissjóður | 6,0% |
| Stefán Þór Björnsson | 3,9% |
| Kjölur fjárfestingarfélag ehf. | 3,7% |
| Eggert Árni Gíslason | 3,3% |
| Fea ehf | 3,0% |
| Sigurður Arnljótsson | 2,6% |
| Guðmundur Ingi Jónsson | 2,5% |
| Þorlákur Traustason | 2,4% |
| Other shareholders (1.620) | 57,8% |
In February, Solid Clouds hf increased its share capital by issuing 147,600,945 new shares at ISK 2 per share through a private placement and a public share offering, raising a total of ISK 295.2 million.
In April 2024, Solid Clouds hf intensified its marketing efforts for Starborne Frontiers and released a PC version of the game, enabling its upcoming publication on Steam, the world's largest gaming portal, in the latter half of 2024.
Key performance indicators for Starborne Frontiers, including Return on Ad Spend (ROAS), Average Revenue Per Daily Active User (ARPDAU), and daily conversion of players, have shown consistent improvement in the last months.
At the 2024 AGM, Eggert Árni Gíslason, a current board member, was elected Chairman of the Board. Additionally, Davíð Gunnarsson, also a board member, was appointed Vice Chairman by the board.
Skúli Skúlason joined the board at the 2024 AGM. With over 29 years in aviation, he co-founded Airport Associates and Bluebird Cargo. He is currently the Managing Director of Express ehf.
Andrea Olsen became a board member at the 2024 AGM. With extensive experience as a corporate lawyer, including at LOGOS Legal Services, she is now the Managing Director and CEO of Frigus ehf, a high-wealth family office. She also serves on several other boards through her role at Frigus ehf.
Ingólfur Ávarsson joined the board at the 2024 AGM as an alternative member. He has held key roles in gaming industry at CCP hf., and 1939 Games ehf. Currently, he is the CEO of Porcelain Fortress ehf., a gaming studio.
As of the end of June 2024, Solid Clouds hf cash reserves totaled ISK 87.2 million. Additionally, the Company anticipates receiving approximately ISK 132.7 million in R&D tax credits in early November.
Solid Clouds also plans to raise additional capital later in 2024 by issuing new shares to support operations and marketing activities for the upcoming year.
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
Managing Director and Board of Directors' Report, cont.
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 2024, and confirm them by means of their signatures.
Reykjavik, August 30th, 2024
| Stefán Gunnarsson, Managing Director | Eggert Árni Gíslason, Chairm. of the Board |
|---|---|
| Davíð Gunnarsson, Board Member | Svanhvít Friðriksdóttir, Board Member |
| Andrea Olsen, Board Member | Skúli Skúlason, Board Member |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
.
Statement of Profit and Loss January 1st to June 30, 2024
| | Note | 2024
1.1. - 30.6. | 2023
1.1. - 30.6. |
| --- | --- | --- | --- |
| Operating income | | | |
| Game revenues | 5 | 29.147 | 10.888 |
| Cost of game revenue collection | | (4.329) | (1.022) |
| | | 24.817 | 9.866 |
| Operating expenses | | | |
| Development cost | | 1.989 | 2.220 |
| Salaries and related expenditures | | 12.207 | 3.467 |
| Operating expenses | | 86.892 | 26.529 |
| | | 101.088 | 32.216 |
| Operating loss before depreciation and financial inc. and expenses | | (76.270) | (22.350) |
| Depreciation of development costs | 6 | (53.285) | (43.049) |
| Depreciation of right-of use assets | 7 | (2.377) | (2.846) |
| Operating loss before financial income and expenses | | (131.933) | (68.246) |
| Financial income and (expenses) | | | |
| Interest revenues | | 5.128 | 6.211 |
| Interest expenses | | (1.578) | (701) |
| Currency exchange difference | | (78) | (354) |
| | | 3.472 | 5.156 |
| Operating loss before income tax | | (128.461) | (63.089) |
| Income tax | 8 | 25.931 | 13.384 |
| Net loss for the period | | (102.530) | (49.705) |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
All amounts are in ISK thousands
Statement of Financial Position June 30, 2024
| Note | 30.6.2024 | 31.12.2023 | |
|---|---|---|---|
| Assets | |||
| Development cost | 6 | 994.295 | 995.148 |
| Right-of-use assets | 7 | 6.736 | 4.472 |
| Deferred tax asset | 8 | 185.667 | 159.736 |
| Non-current assets | 1.186.697 | 1.159.356 | |
| Receivables | 8.760 | 8.535 | |
| Other receivables | 138.804 | 5.799 | |
| Cash and cash equivalents | 87.268 | 44.003 | |
| Current assets | 234.832 | 58.337 | |
| Total assets | 1.421.530 | 1.217.693 | |
| Equity | |||
| Share capital | 331.800 | 184.199 | |
| Share premium | 346.409 | 198.808 | |
| Restricted equity | 994.295 | 995.148 | |
| Share based payments | 18.908 | 13.945 | |
| Accumulated deficit | (318.650) | (216.973) | |
| Total stockholders equity | 1.372.762 | 1.175.126 | |
| Non-current liabilities | |||
| Lease liabilities | 7 | 2.125 | 0 |
| Non-current liabilities | 2.125 | 0 | |
| Liabilities | |||
| Lease liabilities | 7 | 5.408 | 4.900 |
| Accounts payable | 4.772 | 6.556 | |
| Other payables | 36.463 | 31.109 | |
| Current liabilities | 46.643 | 42.566 | |
| Total liabilities | 48.768 | 42.566 | |
| Total equity and liabilities | 1.421.530 | 1.217.693 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
All amounts are in ISK thousands
Statement of Changes in Equity June 30, 2024
| Share capital | Share premium | Restricted equity | Share-based payments | Accumul. deficit | Total Equity | |
|---|---|---|---|---|---|---|
| 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 |
| Equity January 1st to June 30, 2024 | ||||||
| Equity december 31, 2023 | 184.199 | 198.808 | 995.148 | 13.945 | (216.973) | 1.175.127 |
| Share capital increase | 147.601 | 147.601 | 295.202 | |||
| Loss for the period | (102.530) | (102.530) | ||||
| Restricted equity | (853) | 853 | 0 | |||
| Share based payments | 4.963 | 4.963 | ||||
| Equity June 30, 2024 | 331.800 | 346.409 | 994.295 | 18.908 | (318.650) | 1.372.762 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
All amounts are in ISK thousands
Statement of Cash Flows for January 1st to June 30, 2024
| | Note | 2024
1.1. - 30.6. | 2023
1.1. - 30.6. |
| --- | --- | --- | --- |
| Operating activities | | | |
| Operating loss before financial income and expenses and income tax | | (131.933) | (68.246) |
| Adjustments to reconcile results from operation to operating activities: | | | |
| Depreciation of development costs | 6 | 53.285 | 43.049 |
| Depreciation of right-of-use assets | 7 | 2.377 | 2.846 |
| Share based payments expensed | | 4.963 | 418 |
| Working capital used in operating activities | | (71.307) | (21.931) |
| Operating assets, changes | | (133.232) | (2.301) |
| Operating liabilities, changes | | 3.570 | 5.149 |
| Cash used in operating activities before interests | | (200.969) | (19.084) |
| Interest revenues received | | 5.128 | 6.211 |
| Interest expenses paid | | (1.578) | (701) |
| Net cash used in operating activities | | (197.419) | (13.574) |
| Investment activities | | | |
| Capitalized development cost | 6 | (186.762) | (174.534) |
| Grants transferred to reduce development costs | 6 | 134.330 | 0 |
| Investment activities | | (52.432) | (174.534) |
| Financing activities | | | |
| Share capital increase | | 295.202 | 0 |
| Instalments of lease liabilities | | (2.008) | (3.155) |
| Financing activities | | 293.194 | (3.155) |
| Increase (decrease) of cash and cash equivalents | | 43.343 | (191.262) |
| Cash and cash equivalents at beginning of year | | 44.003 | 310.118 |
| Translation difference of cash and cash equivalents | | (78) | (354) |
| Cash and cash equivalents at end of the period | | 87.268 | 118.502 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
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, Seltjarnames, 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 2023 Financial Statements.
The Financial Statements for the year 2023 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 2023.
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.
- 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 2024 with comparison to the first six months of 2023:
| 1.1.2024 - 30.6.2024 | 1.1.2023 - 30.6.2023 | |||
|---|---|---|---|---|
| Sale in ISK thousands | Percentage of sale | Sale in ISK thousands | Percentage of sale | |
| USA | 18.362 | 63,00% | 6.441 | 59,15% |
| Canada | 904 | 3,10% | 834 | 7,66% |
| United Kingdom | 2.623 | 9,00% | 747 | 6,86% |
| Australia | 1.749 | 6,00% | 652 | 5,99% |
| Romania | 874 | 3,00% | 301 | 2,77% |
| Polland | 583 | 2,00% | 253 | 2,32% |
| Belgium | 350 | 1,20% | 229 | 2,11% |
| Slovenia | 321 | 1,10% | 193 | 1,77% |
| Norway | 262 | 0,90% | 153 | 1,41% |
| Hungary | 233 | 0,80% | 88 | 0,81% |
| Sweden | 219 | 0,75% | 73 | 0,67% |
| Germany | 204 | 0,70% | 72 | 0,66% |
| Netherlands | 189 | 0,65% | 66 | 0,61% |
| France | 175 | 0,60% | 64 | 0,59% |
| Brazil | 160 | 0,55% | 52 | 0,48% |
| 38 / 36 other countries | 1.939 | 6,65% | 670 | 6,14% |
| Total game revenues | 29.147 | 100,00% | 10.888 | 100,00% |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
All amounts are in ISK thousands
Notes, continuing:
- Intangible assets
| Development cost and depreciation are specified as follows: | 2024 | 2023 |
|---|---|---|
| 1.1.-30.6. | 1.1.-31.12. | |
| Book value 1.1. | 995.148 | 861.253 |
| Capitalized development cost | 186.762 | 360.743 |
| Grants transferred to reduce development costs | (134.330) | (138.607) |
| Amortization of development cost | (53.285) | (88.241) |
| Book value at the end of the period | 994.295 | 995.148 |
- Leases
The Statement of Financial Position shows the following amounts relating to leases:
| 2024 | 2023 | |
|---|---|---|
| Right-of-use assets | 1.1.-30.6. | 1.1.-31.12. |
| Balance at the beginning of the year | 4.472 | 10.706 |
| Changes in right-of-use assets during the year | 4.641 | (1.229) |
| Depreciation during the period | (2.377) | (5.005) |
| Balance at the end of the period | 6.736 | 4.472 |
| 30.6.2024 | 31.12.2023 | |
| --- | --- | --- |
| Lease liabilities | ||
| Non-current | 2.125 | 0 |
| Current | 5.408 | 4.900 |
| Total lease liabilities | 7.532 | 4.900 |
| 2024 | 2023 | |
| --- | --- | --- |
| 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) | 2.377 | 2.846 |
| Interest expense (included in interest expenses) | 1.086 | 324 |
| Total expense in the Statement of Profit and Loss for leases | 3.463 | 3.170 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
All amounts are in ISK thousands
Notes, continuing:
-
Income tax asset
Income tax asset is specified as follows:
Income tax asset at the end of the year ... 159.736 104.187
Income tax in the Statement of Profit and Loss ... 25.931 55.549
Income tax asset at the end of the period ... 185.667 159.736
Income tax asset is divided to the following items:
Accumulated tax loss ... 411.048 358.745
Development cost ... (225.412) (199.030)
Currency exchange difference ... 32 21
Income tax asset at the end of the period ... 185.667 159.736 -
Operating expenses
Operating expenses in the Income Statement is specified as follows:
Advertising expenses ... 48.640 13.101
Other operating expenses ... 55.830 28.244
Capitalized operating expenses ... (17.578) (14.816)
Operating expenses in the Income Statement ... 86.892 26.529 -
Capitalized development cost
Capitalized development cost is specified as follows:
Capitalized development costs ... 37.549 42.182
Capitalized salary and salary related cost ... 131.635 121.478
Capitalized operating expenses, see note 9 ... 17.578 14.816
Capitalized development cost ... 186.762 178.476
Received grants that lower capitalized development cost ... (1.563) (3.942)
Capitalized development cost, net of grants ... 185.199 174.534
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
All amounts are in ISK thousands
Notes, continuing:
11. Total operating expenses
| Total operating expenses in 2024 is specified as follows: | Capitalized | Cost in the Income Statem. | Total operat. exp. 6M 2024 |
|---|---|---|---|
| Development cost | 37.549 | 1.989 | 39.538 |
| Salary and salary related cost | 131.635 | 12.207 | 143.842 |
| Advertising expenses | 0 | 48.640 | 48.640 |
| Other operating expenses | 17.578 | 38.252 | 55.830 |
| Total operating expenses first six months in 2024 | 186.762 | 101.088 | 287.850 |
| Total operating expenses in 2023 is specified as follows: | Capitalized | Cost in the Income Statem. | Total operat. exp. 6M 2023 |
| Development cost | 42.182 | 2.220 | 44.402 |
| Salary and salary related cost | 121.478 | 3.467 | 124.945 |
| Advertising expenses | 0 | 13.101 | 13.101 |
| Other operating expenses | 14.816 | 13.428 | 28.244 |
| Total operating expenses first six months in 2023 | 178.476 | 32.216 | 210.692 |
Solid Clouds hf - Condensed Interim Financial Statements June 30, 2024
All amounts are in ISK thousands