Iconic Labs Regulatory News (ICON)

Iconic Labs Plc ("Iconic Labs" or the "Company")

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

The Company is pleased to introduce the statement and accounts which cover the six-month period to 31 December 2019. The period covers both the continued shutting down of the old Widecells business as well as setting the operational platform from which we could start building the Iconic Labs business.

Significant progress was made in putting together the core elements from which we can now implement the strategy of building a new media and technology business with a view to ensuring the long term success of the business.

The Group was clearly constrained by capital during this and previous periods, with much needed funds being diverted to legacy issues. However, the work already done in the first half of 2019 led to a sizeable reduction in the losses for the period, from £6,260,394 in the 18 month period ended 30 June 2019 to £848,233 to the period ended 31 December 2019. These losses include funds being spent on legacy debts and also costs related to investing in the start of the new media and technology businesses of Iconic Labs.

Going forward, the plan for the new media and technology business continues to have two related elements: organic growth based upon deploying the team's skills and commercial experience in the sector alongside acquiring publishing platforms which we can leverage to sell those skills. 

The Group made its first acquisition in September with the purchase of the intellectual property of Gay Star News (GSN) for £33,000. We have spent limited funds but a significant amount of time redeveloping and redesigning the website and brand and rebuilding the business operations before the business's formal relaunch. The Group is delighted that it now has an asset with millions of users and a significant and substantive brand in a key and growing sector that it can now build on. We feel the relaunched GSN will not only contribute to future revenues but also prove to have been an exceptionally good value acquisition through the increased capital value of the brand and intellectual property.

Building the business through organic growth of revenue contracts continues to be a focus of the business. The Group developed the new corporate website of the company and launched it in November. Investing in essential developments such as the website and sales materials are all direct investments in future revenues. While understandably small revenue of £2,500 was recognised in this period, of greater significance is that work commenced on developing a pipeline that is already starting to result in contracts and partnerships. We have made several announcements in relation to this post the end of the period. Due to the nature of the industry the lead times for contracts and partnerships can be several months and some of the success in the early part of 2020 clearly reflects the hard work put in by the team during the period.

The pattern of building brands, audience and a healthy pipeline of contracts before seeing substantial revenue recognition in the future is something that the team successfully did in their previous business of UNILAD and believe that a similar 'playbook' will work at Iconic Labs.

The Group is fully aware that the convertible facility with European High Growth Opportunities Securitization Fund (EHGOSF) we inherited has led to a capital structure that is a source of frustration to the directors and to shareholders. The Group has sought to address these concerns with a settlement and financing agreement agreed post 31 December 2019 which will see a considerably healthier balance sheet in the future. Further details are as set out in the recent Notice of General Meeting, and the board is very grateful to members for their support of the proposals that we put forward.

It is also unfortunate but important that we recognise and take account of the current Coronavirus Covid-19 pandemic. Although it is still too soon to tell the exact effects of the virus on the Iconic Labs business, there has been a widespread cessation in current and new advertising campaigns and production during the current period of uncertainty which will clearly have an impact on branded content and campaign revenue. This will continue for at least as long as the country remains in lockdown, which renders the practical activity of producing content impossible. Whether there will be any meaningful impact on the core programmatic advertising revenue remains to be seen.

More generally, however, as more people spend time at home the Group remains confident that it will see a long term increase in demand for its online publishing content and platforms like GSN. While this is an unprecedented time for everyone, the Group believes that many content and technological trends may accelerate as a result, and the Group aims to be best positioned to benefit from the long term trends through the skillset and experience of the senior management team and the foundations they have put in place.

Going Concern Assessment

The directors have carefully considered the financial position of the Group with particular attention to the economic and social effects of the current Covid-19 pandemic. They have concluded that as a result of the £5 million facility in place with the European High Growth Opportunities Securitisation Fund, together with conservative assumptions as to revenues based on core programmatic advertising sales, that the Group remains a going concern.

Finally, we hope that all of you and your families are staying safe during this period and our thoughts go out to all of those who are suffering hardship or have lost family members and loved ones.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 (unaudited)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2019 (unaudited)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 (unaudited)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019 (unaudited)

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Iconic Labs Plc (LSE:ICON), is a multi-divisional new media and technology business set up by Liam Harrington, John Quinlan and Sam Asante. The initial focus is to expand the content platform, suite of digital brands, and technology products both organically and through acquisitions in addition to consultancy and agency services.

**ENDS**

For further information, please visit the Company's website www.iconiclabs.co.uk or contact: