Preliminary Results

RNS Number : 9828A

WideCells Group PLC

30 March 2017

 

30 March 2017

WideCells Group PLC ('WideCells Group' or 'the Company')

                                                                         Unaudited Preliminary Results

WideCells Group PLC, the healthcare services company focused on providing stem cell services and ground breaking insurance for stem cell treatment, announces its unaudited preliminary results for the period ended 31 December 2016.

Highlights

·      Successful IPO on the Main Market of the London Stock Exchange following £2 million raise to build an integrated stem cell support services company

o  Three distinct divisions WideCells, CellPlan and WideAcademy, focused on making stem cell treatment more accessible and affordable as well as improving research and development ('R&D') to further advancements in stem cell technology

·      WideCells launched WideCells Brasil, its umbilical cord blood processing and storage facility in São Paulo, Brazil

o   The launch follows a 2016 licencing agreement between the Company's wholly owned stem cell storage division, WideCells, and Biocells Brasil, the owner of the Facility, which has been in operation since 2012 and has an established client base of circa 400 clients. 

o  Established regional management team with proven operating experience both within the stem cell industry and regionally - includes Luiz Sardinha, the former COO of Coca-Cola Brasil (10,000+ employees and BRL4.9 billion) for 35 years, who has joined WideCells Brasil's Board as COO and has taken a 10% stake, which is testament to the strong market potential of the stem cell services industry

·      Launch and rollout of innovative insurance product CellPlan, the world's first insurance plan and medical concierge service for the cord blood stem cell industry

o  Provides affordable access to cutting edge stem cell treatments, which can currently be used to treat up to 82 blood disorders

o  First definitive agreement with Biovault Technical Ltd ('Biovault'), the UK's leading cord blood storage facility, providing access to its extensive customer base and a long-term revenue stream

o  Letters of Intent ('LOI') signed with two further cord blood banks to support continued rollout within Europe and South America.

·      New revenue stream identified following establishment of WideCells Institute of Stem Cell Technology (ISCT) at the University of Manchester Innovation Centre ('UMIC')

o  The Group's first UK-based stem cell processing and storage facility

o  Agreement signed with innovative North American medical device company, Qigenix, to undertake contract stem cell research worth £100,000. The first payment of £25,000, which is binding under the LOI, was paid to WideCells at the end of December 2016, representing the first revenue from this source. Subsequent payments will be at the commencement of laboratory research (£25,000) and the final payment at the delivery of the final research report to the client (£50,000).

·      Development of ten online short courses on stem cell technology in partnership with the University of Westminster

·      World-class leadership team secured, and a number of key managerial appointments made, to drive forward a strategy to deliver ground breaking services to the stem cell industry

o  The team is further strengthened by the appointment as a non-executive director of Dr Marilyn Orcharton, a qualified dentist and co-founder of Denplan, the UK's dental payment plan specialist.

o  Alan Greenberg, former Head of Apple Education for Europe and Asia, appointed to the Board as non-Executive Director and as Vice-President of WideAcademy.

WideCells CEO Joao Andrade said, "Our activities during the period have ideally positioned us to start generating revenues in 2017 from all three WideCells divisions, which work together to create the world's first end to end service solution focused on making cord blood stem cell treatment accessible and affordable globally.  Having listed in London in July 2016 we have made significant progress in the commercialisation of our stem cell services; the roll out of our revolutionary stem cell insurance product CellPlan has now commenced in collaboration with the UK's largest stem cell storage facility, Biovault; discussions with multiple other facilities are advancing rapidly; delivery of our first stem cell processing and storage facility in Manchester is on track for Q2 2017; and we have appointed the former Head of Apple Education, Alan Greenberg, as a non-Executive Director and VP of WideAcademy to devise a strategy that makes it the thought leader in the stem cell industry.  The pace with which we have achieved these milestone developments underpins our active growth strategy, and alongside this we have demonstrated our ability to execute our strategy in a reliable way, and to attract world-class personnel to our company, which we see as an endorsement of our revolutionary proposition. 

"I believe that our business is well placed for a value re-rate in 2017 as we bring our various work-streams over the line.  We have a ready and growing market for our products and services, a first mover advantage in delivering our product and building our brand, and partnerships with best-in-class companies which ensures that our commitment to quality is achievable at all time.  With this in mind, I am excited for the months ahead and look forward to providing regular updates to shareholders in the near term."

Chairman's Statement

WideCells Group was formed in 2012 with the aim to revolutionise the stem cell industry.  The stem cell market is projected to be worth US$170 billion by 2020 and as medical researchers continue to find new and ever more innovative applications for stem cells, this is a field which is likely to lead the way in disease therapy in the future.  However, the hidden costs associated with stem cell treatment can often come as a surprise to the increasing number of families that are choosing to store their babies' cord blood stem cells.  Therefore the Group's vision is to make potentially life-saving cord blood stem cell treatment affordable and accessible to families around the world and in July 2016 we embarked on making this vision a reality by listing on the Main Market of the London Stock Exchange.

The eight months following our listing can be characterised as a period of significant progress and I am delighted that we have been able to report first revenues via an agreement to undertake contract research work at our Institute of Stem Cell Technology laboratory ('ISCT') at the University of Manchester Innovation Centre ('UMIC').  This is only set to increase when the first phase of our CellPlan rolls out with Biovault going live before the end of May 2017.  Therefore, the coming months will see us build on the revenue generative foundation we have already created to establish a globally recognised brand in the evolving and growing stem cell industry.

Our three distinct and complementary divisions provide us with several entry points into the market and add to our unique proposition: through our WideCells division, we provide the cutting-edge in stem cell processing and storage facilities across Europe and the Americas with plans for extending into new markets; CellPlan represents the world's first stem cell insurance plan and medical concierge service which directly tackles affordability of stem cell transplantation for families across the globe; whilst, WideAcademy was established to drive research, innovation and teaching in the rapidly evolving stem cells market.  This approach ultimately acts as a marketing tool, underpinning our business proposition.

CellPlan

CellPlan is completely unique and a first-of-its-kind insurance product.  It removes barriers to affordability for not only cord blood stem cell transplantation but also the associated medical consultation and care.  This enables families to focus on recovery rather than potentially staggering medical bills.  Following its official launch to cord blood banks at the World Cord Blood Congress Europe in May 2016, we have made significant strides towards the successful rollout of CellPlan and we have received an overwhelmingly positive response from the market.  We believe that the implications of delivering this sophisticated product to the market could be radical.  Supporting this, a leading provider of market analysis reported that the launch would necessitate a revision in their forecasts for stem cell storage uptake, which acts as a strong endorsement of our business.

Due to our unique high potential proposition, we have attracted global partners including a world leader in expert medical opinion, and a leading underwriter.  In collaboration with them we finalised the terms and conditions ('T&Cs') for CellPlan in October 2016, which enables us to focus on driving our customer base and brand positioning while our partners take on the risks associated with underwriting an insurance product.  The finalisation of the T&Cs in October 2016 was an important milestone for the Group as it signalled the completion of our product development phase and marked the commencement of our rollout. 

We have also received very positive feedback from stem cell storage facilities, which have made clear their demand for a product such as ours.  The period under review saw us enter into an agreement with the UK's largest private stem cell storage facility, Biovault.  With Biovault's reputation for excellence, this partnership with an eminent stem cell facility has given the Group an ideal platform for entry into the European and global market.  The five-year agreement, which provides the Group with access to Biovault's customer base of 25,000 clients, marked the official entrance of CellPlan into the global insurance market.  We are now preparing for the commencement of first sales of CellPlan to Biovault customers by Q2 2017 and anticipate we will be in a position to report first revenues from this division in the near-term.  We were delighted to announce the extension of this rollout with the signing of two further Letters of Intent ('LOIs') with cord blood banks in Brazil.  This has given us unrivalled access to the largest market in South America's booming stem cell industry, projected to be worth US$445 million by 2023.

We aim to build CellPlan into the world's leading provider of cord blood and related stem cell insurance, by capitalising on our first mover advantage.  Our investors should be attracted to the recurring revenue stream and, given the nature of the insurance plan, customers are very likely to remain with us for many years.  We are in discussions with a range of other significant providers of stem cell storage services, and look forward to providing updates on this, and our other developments, in the coming months. 

Alongside the commercial rollout of CellPlan, we continue to focus on our service offering in order to ensure we maintain a competitive business model, which satisfies market demand.  Accordingly, and in line with our innovative business model, we created 'Your Expert Consultation'; A specialist medical consultation service, which provides clients with access to the best medical minds to provide a second opinion on their diagnosis.  As a stand-alone product with a low entry price point, we believe the launch of this consultation service will create an additional revenue stream for the Company and create further opportunities for growth.

Additionally, while CellPlan continues to be a flagship division, central to the success of our strategy, we have simultaneously made significant progress across all three of our core divisions.

WideCells

Through our WideCells division, we have penetrated another crucial area of the stem cell market: stem cell storage, a global market which was valued at US$2.4 billion in 2015.  Our WideCells division provides us with access to this burgeoning market and is a complementary addition to our wider portfolio, providing us with fertile ground from which to expand the rollout of CellPlan in future. 

The funds raised on listing were primarily required for the development of WideCells' Institute of Stem Cell Technology ('ISCT') at the University of Manchester Innovation Centre.  We are pleased to see that this continues to advance on schedule and is targeted for completion in Q2 2017 following the granting of a Human Tissue Authority Licence for Human Application and Research.  Once operational this state-of-the-art facility will provide us with a further revenue stream and will have the capacity to offer stem cell retrieval, processing and storage services to the European market.  Seeking to further cement our global presence, in September 2016, we launched WideCells Brasil following a licensing agreement with Biocells Brasil.  With an established client base the launch of this facility provides us with access to a compelling market, as well as the potential to generate further revenues through the provision of additional storage and healthcare services.

Stem cell research is developing at a rapid pace and it is crucial that the industry keeps pace with these advancements.  With our expert team and an adaptable business model, the Group has been able to utilise its strategic position to take advantage of new opportunities as they are identified.  Ahead of its completion, the ISCT has already proved a significant advantage to our portfolio, enabling us to establish a new revenue stream through a contract research agreement with Qigenix.  The agreement, announced 30 November 2016, provides the Group with an additional £100,000 in revenues for use of our state of the art laboratory.  The first payment of £25,000, which is binding under the LOI, was paid to WideCells by the end of December 2016, representing our first revenues.

WideAcademy

We are clear in our belief that as uptake in cord blood and other types of stem cell storage increases, further funding will be poured into research and development, in turn leading to further advancements in stem cell technology and treatments.  WideAcademy is our research, development and training division through which we will work to strengthen knowledge of the benefits of stem cell treatment to the wider medical community.  We were therefore delighted to appoint Alan Greenberg as non-Executive Director and VP of WideAcademy.  With his wealth of experience in healthcare and education technology ('EdTech'), most notably as Head of Apple Education for Europe and Asia, Alan has a vision to make WideAcademy a thought leader in the stem cell technology space, which will enable us to reach wider audiences and influence the next generation of stem cell therapies.  We will leverage his fantastic experience of how to disseminate information and educational resources digitally as soon as possible and look forward to updating the market with detail regarding his plans to build WideAcademy into a credible and innovative brand at the appropriate time.

We expect him to dramatically build on the successes we have already experienced in this division.  In September 2016 we announced, as part of our partnership with the University of Westminster, that we had devised a syllabus for a series of online short courses targeted at healthcare professionals wanting to expand their knowledge of stem cell technology, which does not currently form part of a medical degree.  The courses aim to close the knowledge gap between healthcare professionals, to keep them abreast of advancements as the industry continues to advance, and will create a new revenue stream when they launch later this year.  The courses will also provide the Group with access to professionals at the cutting edge of stem cell treatment and delivery, thereby creating access to an additional market segment to be targeted by both WideCells division and CellPlan.

Corporate

As the Group continues to establish itself in the global market, we have made a number of key appointments to support our sustainable growth.  These include Alan Greenberg as Non-Executive Director and Vice President of WideAcademy.  I am confident that we have secured a highly skilled and experienced team with the requisite skillset to make significant contributions to the wider growth of WideCells Group and to build the Company into a leader in the stem cell support services market. 

Financial Overview

We successfully raised £2m before expenses in an IPO on the Main Market of the London Stock Exchange on 27 July 2016.  This has enabled us to set up our operations for WideCells and WideAcademy in Manchester and for CellPlan in Porto and we are on target to begin sales in Q2 2017. 

Outlook

WideCells Group is driven by a vision to unlock the potential of stem cells and make stem cell treatment affordable, accessible and achievable for families worldwide.  We have taken significant strides forward this year to achieve this and have already positioned ourselves as a potential leader in the global stem cell services industry.  With an expert leadership team, which has experience across a range of recognised and highly relevant brands, a host of global partners and strong foundations for growth already in place, we are extremely excited about the months ahead.  The launch of the WideCells ISCT targeted for Q2 2017 will cement our position in the UK stem cell storage market and, we anticipate, will provide us with further openings for revenue generation and partnership opportunities.  We remain in ongoing discussion with global cord blood banks as we seek to continue the expansion of CellPlan's rollout to new markets globally. Alan Greenberg joining the team allows WideAcademy to move from strength to strength as we focus on building this division to become the go-to resource for professionals and consumers wishing to learn more about stem cells.  We anticipate that the year ahead will be one of growth for the Group as we further establish our brand and continue to progress our vision.

Finally, I would like to take this opportunity to thank our shareholders who provide ongoing support as we continue to grow WideCells Group and distinguish ourselves in this market.  This has been instrumental to our achievements thus far and we look forward to building your Company into a leader of stem cell support services in the global market

Dr Graham Hine

Chairman

Consolidated statement of comprehensive income for the year ended 31 December 2016

	Note	(Unaudited) 2016 £	(Unaudited) 2015 £
Revenue	3	25,000	50,644
Administrative costs		(1,347,886)	(251,330)
Loss from operations		(1,322,886)	(200,686)
Finance expense		(30,710)	(11,120)
Loss before tax		(1,353,596)	(211,806)
Taxation		(7,517)	(1,250)
Loss after tax attributable to the owners of the parent		(1,361,113)	(213,056)
Total comprehensive loss attributable to:
-    owners of the parent		(1,361,113)	(165,166)
-    non-controlling interest		-	(47,890)
Loss for the year	4	(1,361,113)	(213,056)
Loss per share Basic and diluted loss per ordinary share - £		(0.03)	(0.01)

Consolidated statement of financial position at 31 December 2016

	Note	(Unaudited) 2016 £	(Unaudited) 2015 £
Assets
Non-current assets
Tangible fixed assets		381,918	30,454
		381,918	30,454
Current assets
Stock		2,887	2,887
Trade and other receivables		22,554	114,783
VAT recoverable		59,567	24,002
Cash and cash equivalents		1,149,758	33,753
		1,234,766	175,425
Total assets		1,616,684	205,879
Liabilities
Non-current liabilities
Borrowings		247,803	-
		247,803	-
Current liabilities
Trade and other payables		390,769	103,501
Borrowings		165,879	714,490
		556,648	817,991
Total liabilities		804,451	817,991
Issued capital and reserves attributable to owners of the parent
Share capital	5	135,145	48
Share premium		2,159,000	742
Merger reserve		(185,727)	(466,317)
Share-based payment reserve		211,513	-
Accumulated deficit		(1,507,698)	(146,585)
Total equity		812,233	(612,112)
Total equity and liabilities		1,616,684	205,879

Consolidated statement of cash flows for the year ended 31 December 2016

	Note	(Unaudited) 2016 £	(Unaudited) 2015 £
Cash flows from operating activities
Loss for the year		(1,361,113)	(213,056)
Adjustments for:
Deprecation of tangible fixed assets		16,143	10,050
Amortisation of intangible fixed assets		-	1,473
Share-based payment expense		186,626	-
Net Interest expense		30,710	11,120
Taxation expense		7,517	1,250
Cash flows from operating activities before changes in working capital		(1,120,117)	(189,163)
Decrease in stock		-	810
Decrease in trade and other receivables		92,229	(30,337)
Increase in trade and other payables		334,999	6,785
Cash generated from operations		(692,889)	(211,905)
Taxes paid		(7,517)	(1,250)
Net cash used in operating activities		(700,406)	(213,155)
Investing activities
Purchases of property, plant and equipment		(205,531)	-
Sale of property, plant and equipment		24,931	7,762
Net cash generated (used) in investing activities		(180,600)	7,762
Financing activities
Share issues		2,000,000	788
Cost of share issue		(280,364)	-
Interest paid		(17,080)	(11,120)
Issue of convertible debt		274,500	185,399
Proceeds from bank borrowings		200,000	76,934
Repayment of borrowings		(180,045)	(22,617)
Net cash generated from  financing activities		1,997,011	229,384
Net increase in cash and cash equivalents		1,116,005	23,991
Cash and cash equivalents at beginning of year		33,753	9,762
Cash and cash equivalents at end of year		1,149,758	33,753

Consolidated statement of changes in equity for the year ended 31 December 2016

	Share capital £	Share premium £	Merger reserve £	Share-based payments reserve £	Accumulated deficit £	Total equity £
At 1 January 2016 (unaudited)	48	742	(466,317)	-	(146,585)	(612,112)
Loss for the year	-	-	-	-	(1,361,113)	(1,361,113)
Foreign exchange translation
Total comprehensive loss	-	-	-	-	(1,361,113)	(1,361,113)
Transactions with owners
Conversion of loan capital to share capital	28	355,772	-	-	-	355,800
Share exchange	75,924	(356,514)	280,590	-	-	-
Share based payment charge	-	-	-	186,626	-	186,626
Issue of shares on placing - 27 July 2016 including ordinary shares	45,454	1,954,546	-	-	-	2,000,000
Conversion of convertible loan notes	13,609	465,421	-	-	-	479,030
Fee shares	82	3,518	-	-	-	3,600
Broker warrants	-	(24,887)	-	24,887	-	-
Costs of IPO	-	(239,598)	-	-	-	(239,598)
Total contribution by and distributions to owners	135,097	2,158,258	280,590	211,513	-	2,785,458
At 31 December 2016 (unaudited)	135,145	2,159,000	(185,727)	211,513	(1,507,698)	812,233
	Share capital £	Share premium £	Merger reserve £	Non-controlling Interest £	Accumulated deficit £	Total equity £
1 January 2015(unaudited)	2	-	-	(180,589)	(154,464)	(335,051)
Loss for the year	-	-	-	(47,890)	(165,166)	(213,056)
Total comprehensive loss	-	-	-	(47,890)	(165,166)	(213,056)
Issue of shares	46	742	-	-	-	788
Capital contribution	-	-	-	-	173,045	173,045
Acquisition of non-controlling interests	-	-	(466,317)	228,479	-	(237,838)
Total contribution by and distributions to owners	46	742	(466,317)	228,479	173,045	(64,005)
At 31 December 2015 (unaudited)	48	742	(466,317)	-	(146,585)	(612,112)

Notes

1.  Accounting policies

These Preliminary Results have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards ("IFRS") and the IFRS Interpretation Committee (IFRIC) interpretations as endorsed by the European Union.  The financial information set out in these Preliminary Results does not constitute the Company's statutory accounts for the year ended 31 December 2016 or the year ended 31 December 2015. The financial information for the year ended 31 December 2015 is derived from the unaudited statutory accounts for that year which have been delivered to the Registrar of Companies. The audit of the statutory accounts for the year ended 31 December 2016 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.

The Directors have prepared cashflow forecasts for a period of 12 months from the date of releasing these Preliminary Results which show that the Group will have sufficient funds to continue and therefore that the going concern basis of preparation is appropriate. However, a key assumption within these forecasts is commencement of CellPlan sales from June 2017.  The directors are confident that the CellPlan product launch will be successful. However if there are reduced sales during 2017 the company will require additional funding to cover the 12 month period.  The directors have decided to raise additional funding via an equity placing to assist in the development of the business and compensate for any potential shortfalls. The directors have also provided non-binding letters of intent that they will make available additional funds to the company if there is a shortfall in the funding.

Basis of preparation

WideCells Group PLC the company is a public company (the "Company') is a company domiciled in England. The Company was incorporated on 24 May 2016 and this is the first set of financial information prepared by the Company.

The Group was formed when WideCells Group PLC entered into an agreement to acquire the entire share capital of WideCells International Limited and its wholly owned subsidiaries through the issue of shares in the Company which took place on 16 June 2016.

The capital structure for the comparative year reflects the former holding company, WideCells International Limited. Following the Group reconstruction the capital structure reflects that of WideCells Group PLC.

Accordingly, although the units which comprise the Group did not form a legal group for the entire period, the current period and comparative results comprise the results of the subsidiary companies as if the Group had been in existence throughout the entire period.

WideCells Group PLC adopted IFRS for the first time in its Historical Financial Information for the 3 years ended 31 December 2015 as presented in the Placing and Admission to Listing document dated 22 July 2016, WideCells Group PLC is a continuation of WideCells Group Limited as reflected in the merger accounting principle adopted and therefore the Group is not considered to be a first time adopter of IFRS in these financial statements.

The principal accounting policies adopted by the Group are set out below. The policies have been consistently applied to all the periods presented.

Changes in accounting policies

New standards, interpretations and amendments effective from 1 January 2016

There  were  no  new  standards  or  interpretations  effective  for  the  first  time  for  periods beginning on or after 1 January 2016 that had a significant effect on the Group's financial statements. None of the amendments to Standards that are effective from that date had a significant effect on the Group's financial statements.

New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not effective for 2016 and therefore have not been applied. The effective dates shown are for periods commencing on the date quoted.

·      IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018) - EU endorsed

·      IFRS 9 Financial Instruments (effective 1 January 2018) - EU endorsed

·      IFRS 16 Leases (effective 1 January 2019) - not yet EU endorsed

The Group has considered the above new standards, interpretations and amendments to published standards that are not yet effective and concluded that they are either not relevant to the Group or that they would not have a significant impact on the Group's financial statements, apart from additional disclosures.

Basis of consolidation

The Group financial statements consolidate those of the parent company and all of its subsidiaries. The parent controls a subsidiary if it has power over the investee to significantly direct the activities, exposure, or rights, to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect the amount of the investor's returns, all subsidiaries have a reporting date of 31 December.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-Group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. 

The consolidated financial statements consist of the results of the following entities:

Entity                                                     Summary description

WideCells Group PLC                          Ultimate holding company

WideCells International Limited      Holding company of subsidiaries

WideCells Limited                               Trading company

WideCells Portugal SA                       Trading company

WideCells España SL                          Trading company

WideAcademy Limited                        Trading company

CellPlan Limited                                  Holding company

CellPlan International Lda                Trading company

Revenue

Revenue represents the fair value of the consideration received or receivable in the year, net of discounts and sales taxes.

Sales income derives from the procurement and marketing of cord blood stem cell storage. Revenue is recognised as detailed below;

Revenue is recognised when it is probable that the economic benefits associated with a transaction will flow to the Group and the amount of revenue and associated costs can be measured reliably. Where the work has been carried out and it is certain that the income is due, appropriate adjustments are made through deferred and accrued income on a percentage of completion basis. Deferred income comprises of income received in advance of the consideration being due and has been included within current liabilities on the basis that the revenue becomes due within 12 months from the balance sheet date. Accrued Income Includes the value of work performed during the period and where a right to consideration has arisen, which was not invoiced until after the period end.

Intangible assets

An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably, the asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights.

Amortisation is charged on a straight line basis through the profit or loss. The rates applicable, which represent the Directors' best estimate of the useful economic life, are;

·       WideCells trademark - Fully amortised

Impairment of non-financial assets (excluding inventories and deferred tax assets)

Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the Group's CGUs that are expected to benefit from the synergies of the combination giving rise to the goodwill.

Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income.

Foreign currency

Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss, except for foreign currency borrowings qualifying as a hedge of a net investment in a foreign operation, in which case exchange differences are recognised in other comprehensive income and accumulated in the foreign exchange reserve along with the exchange differences arising on the retranslation of the foreign operation.

On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and accumulated in the foreign exchange reserve.

Exchange differences recognised in the profit or loss of Group entities on the translation of long-term monetary items forming part of the Group's net investment in the overseas operation concerned are reclassified to other comprehensive income and accumulated in the foreign exchange reserve on consolidation.

Financial assets

The Group does not have any financial assets which it would classify as fair value through profit or loss, available for sale or held to maturity. Therefore all financial assets are classed as loans and receivables as defined below.

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the consolidated statement of financial position.

Equity instruments

Convertible loan notes are categorised based on the substance of the contract and not their legal form. Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities is treated as an equity instrument.

A financial instrument is treated as an equity instrument only if:

a)      The instrument may or will be settled in the issuers own equity instruments, it is either a derivative that will be settled by the issuer exchanging a fixed amount of cash or another financial instrument for a fixed number of its own equity shares, or a non-derivative that includes a contractual obligation to deliver a variable number of the entity's own equity shares.

b)      The instrument includes no contractual obligation to deliver cash or another financial asset to another entity

Financial liabilities

The Group does not have any financial liabilities that would be classified as fair value through the profit or loss. Therefore these financial liabilities are classified as financial liabilities at amortised cost, as defined below.

Other financial liabilities include the following Items:

·       Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. Interest expense in this context includes initial transaction costs and premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

·       Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Share capital

The Group's ordinary shares are classified as equity instruments.

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the Directors. In the case of final dividends, this is when approved by the shareholders at the AGM. No dividends were declared during the years to 31 December 2016.

Property, plant and equipment

Items of plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs.

Depreciation is provided on all other items of property, plant and equipment, so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Plant & Machinery                -         33% straight line basis

Leasehold Improvements     -         33% straight line basis

Computer equipment             -         33% straight line basis

Motor vehicles                       -         33% straight line basis

Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Share-based payments

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period.  Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.  Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted.  As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied.  The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income over the remaining vesting period.

2. Critical accounting estimates and Judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. There are no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

3. Revenue

Revenue in all periods principally arises from the provision of services. In 2016 this was from the planning phase of an R&D contract with Qiginex, which will run through 2017 and 2018 in the UK.  The revenues from 2015 were the conclusion of stem cell storage contracts in Portugal before the company began fundraising activities in 2016.

4. Loss from operations

			(Unaudited) 2016 £	(Unaudited) 2015 £
The loss for the period is stated after charging:-
Depreciation			16,143	10,050
Amortisation			-	1,473
Auditor's Remuneration			24,500	-
Operating lease - Property			33,320	-
Share-based payments			186,626	-

5. Share capital	(Unaudited) 2016	(Unaudited) 2016	(Unaudited) 2015	(Unaudited) 2015
	Number	£	Number	£
Authorised, allotted and fully paid  - classified as equity Ordinary shares of £0.0001 each	-	-	475,000	48
Ordinary shares of £0.0025 each	54,058,061	135,145	-	-
Total	54,058,061	135,145	475,000	48

In accordance with CA 2006, the Company has no limit on its authorised share capital.

On incorporation of the Company on 24 May 2016, two ordinary shares of £0.0025 each were subscribed for and issued and allotted in equal number to João Andrade and Lopes Gil.

The parent company at 31 December 2015 was WideCells International and had 475,000 ordinary shares of £0.0001 in issue.  On 25 January 2016 285,000 ordinary shares were issued to minority interest shareholders who had transferred their stakes to the Group in December 2015.

On 16 June 2016 the Company issued and allotted 30,399,998 ordinary shares to the shareholders of WideCells International in consideration for the transfer of the entire issued share capital of WideCells international to the Company, making it a wholly owned subsidiary of the Company, and making the Company the new parent company.

On 27 July 2016 the Company issued 18,181,819 ordinary shares at a price of £0.11 per ordinary share. On the same date the Company issued 5,443,515 conversion shares in exchange for the cancellation of convertible debt and 32,727 fee shares.

**ENDS**

For further information, please visit the Company's website www.widecellsgroup.com, follow us on Twitter @WideCells_Group or contact:

WideCells Group	CEO - João Andrade	Tel:  [phone]
Vicarage Capital Ltd	Broker - Jeremy Woodgate & Rupert Williams	Tel: [phone]
Shard Capital Partners LLP	Broker - Damon Heath & Erik Woolgar	Tel: [phone]
St Brides Partners Ltd	PR - Elisabeth Cowell & Charlotte Page	Tel: [phone]

Notes to Editors

WideCells Group PLC is building an integrated stem cell services company, focused on making stem cell treatments accessible and affordable. The Directors believe that the use of cord blood stem cells for transplant will drive one of the next important phases in medicine and is therefore developing market leading products in complementary, strategic areas which are designed to take advantage of substantial market opportunities in one of the fastest growing segments in the healthcare industry.  With this in mind, it has created three divisions:

·      CellPlan: the world's first stem cell healthcare insurance plan with financial cover for medical treatment, travel and accommodation expenses and concierge service to manage the treatment process.

·      WideCells: the Institute of Stem Cell Technology has been established and is based in the University of Manchester Innovation Centre to focus on stem cell research and regenerative medicine. WideCells also has international cryogenics divisions specialising in stem cell storage.

·      WideAcademy: developing an education and training division to promote awareness of the benefits of stem cell storage across the global general practice community.

The Group has built an experienced senior management team that has been integral to the development of its growth and business to date.

Stem Cell Fast Facts:

·      Cord blood (which is taken from the umbilical cord) provides the most effective source of stem cells for families due to it being simple, safe and painless to collect relative to other sources of stem cells such as bone marrow. WideCells will focus on promoting the collection and storage cord blood.

·      Since 2005, there has been a 300% increase in the number of illnesses that can be treated using stem cells.

·      82 illnesses can currently be treated using stem cell procedures.

·      Despite initial storage often costing no more than a few £thousand, actual treatment can cost in the £hundreds of thousands.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014.

 

END

 

 

FR WGURWWUPMUAU