LONDON (Alliance News) - Shares in WideCells Group PLC on Thursday plunged as its interim loss expanded amid a "very difficult time" for the stem cell services provider.
Shares in Widecells slumped 61% to 0.75 pence on Thursday.
Revenue for the first six months of 2018 fell to GBP17,929 from GBP25,000 a year ago, as the company's pretax loss widened significantly to GBP2.0 million from GBP880,396.
Administration costs rose to GBP1.5 million in the period from just GBP898,075 a year ago.
The company booked "over" GBP390,000 in the period through costs related to aborted acquisitions and three attempts to raise capital, as well as re-organisation expenses of GBP130,000.
"It gives me no pleasure to report the first half of 2018 has been a very difficult time for the group. Whilst the vision and the value proposition of the group remains unchanged, as shareholders will no doubt be aware, the year to date has been one that has presented us with unforeseen challenges," said Chairman Peter Presland.
Looking ahead, particularly at its funding requirements, the company said it has been unable to secure "traditional bank funding" in the form of commercials loans due to a lack of revenue.
The board has also been advised that, for similar reasons, further equity raising from existing shareholders is unlikely to succeed. In June, Widecells raised GBP2.0 million via a share placing.
Thus, Widecells has entered into an issuance agreement with a provider of convertible bonds, European High Growth Opportunities Securitization Fund, to secure GPB2.7 million worth of funding in return for bonds convertible into shares with attached warrants.
There will be three initial tranches of the bonds, with GBP635,000 to be disbursed upon signing the contract, GBP1.0 million to be deliver at either the later of November 15 or once a prospectus has been validated and approved by the Financial Conduct Authority, and GBP265,000 to be automatically disbursed three calendar months after the second tranche.
Following all this, there will be four tranches each of an aggregate nominal value of GBP200,000.
Without the new funds, the company is at risk of not being able to continue.
"The past six months have been a particularly difficult and chastening experience, and going forward, I believe that the group has learned some valuable lessons. We, perhaps, have been too ambitious and have stretched our capabilities too far, too quickly," said Presland.
He added: "With new and improved disciplines and a refined business model, we look forward to proving the intrinsic value of our core stem cell service offering, so that we can build value for all stakeholders."