Restructuring Update

RNS Number : 7169O

Iconic Labs PLC

02 February 2023

 

Iconic Labs PLC

("Iconic" or the "Company")

Restructuring Update

Iconic Labs PLC (LSE:ICON), provides this restructuring update following this first week after the trading suspension was lifted.

Iconic thanks its shareholders for their patience as management continues to stabilise the Company. Lifting the trading suspension was a significant step forward for the Company and whilst the Directors understand that shareholders are eager for news about the future, potential acquisitions, and strategy, their current focus is necessarily on completing the restructuring process.

Firstly, to fulfill its obligations under the Company Voluntary Arrangement ("CVA"), Iconic still must make two cash payments of £50,000 each for the months of February and March, and then a final £15,000 payment for April.

The cash for these payments shall come from the £3 million financing facility with European High Growth Opportunities Securitization Fund ("EHGOSF") provided (i) the closing market price of the shares for each of the ten consecutive trading days falling immediately prior to the relevant closing date is at least higher than 150% of the nominal value of Iconic's shares; and (ii) the average daily value traded of Iconic's shares (excluding 5% of the data points from the top and excluding 5% of the data points from the bottom of the data set) for the 20 trading days immediately prior to the applicable closing date is at least £ 10,000.

EHGOSF provides this financing to Iconic through notes with warrants attached that are then converted into shares. While this leads to some dilution, the Company asks that shareholders recognise that this financing does not lead to any corresponding cash liability; meaning, Iconic does not owe cash to EHSOSF for this financing. This is a valuable financing tool for a company in Iconic's position striving to have clean books with no liabilities.

Secondly, once those three payments have been made, Iconic must then fulfill its final obligation under the CVA of issuing 1,674,130,609 shares to the unsecured creditors. Iconic reminds shareholders that again, whilst this will lead to some dilution, these unsecured creditors had cash claims against the Company. Those claims have been cleared from Iconic's books and satisfied with a 75% discount paid in shares.

Thirdly, secured creditor claims brought against Iconic of roughly £4,200,000 were reduced to £750,000 to be satisfied through the issue of convertible notes, and EHGOSF reduced its historic claims against Iconic of £3,000,000 down to £750,000 to be satisfied through the issue of convertible notes. Again, this will result in some dilution, but compared to the original sums claimed against the Company, this is a significant result.

Finally, regarding potential acquisitions, Iconic has been in early stage talks with various parties. However, given that the trading suspension was only lifted last week, Iconic is only now able to move beyond preliminary discussions with those parties. It is anticipated that any acquisition that Iconic makes will most likely be a reverse takeover under the Listing Rules. Further updates on these discussions will be provided in due course.  

Brad Taylor, CEO stated:

"Restructuring a company that was in the distressed position that Iconic was in is a lengthy process. We have succeeded in exiting administration and getting the trading suspension lifted, two accomplishments that have rarely, if ever, been done before for a main market LSE company. We continue the process of stabilising the Company and discussing potential acquisitions with various entities so that we can generate shareholder value."   

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For any further information or enquiries please contact:

[e-mail]

 

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