Audited Preliminary Results

RNS Number : 2660Q

WideCells Group PLC

05 June 2018

 

5 June 2018

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

                                                                        Audited 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 audited preliminary results for the period ended 31 December 2017.  Copies of the full Annual Report will be posted to shareholders and will be available to view on the Corporate Documents section of the company's website.

Highlights

·     Launched a portfolio of stem cell services designed to make stem cell treatments accessible and affordable worldwide

·     Focused on driving global sales and revenues across the Group's three divisions

o  Innovative insurance product CellPlan, the world's first insurance plan and medical concierge service for the cord blood stem cell industry

§ Secured a number of commercial agreements with stem cell banks to facilitate roll-out and launched a bespoke e-commerce platform

§ Fully live in the UK with initial sales secured as part of a test launch to customers of Biovault, a leading storage facility

§ Launch in Spain anticipated

§ Agreements in place to launch in Thailand, Singapore, India and Brazil in H2 2018

o  Stem cell storage and pioneering research work continues, operated via WideCells' state-of-the-art Institute of Stem Cell Technology (ISCT) in Manchester, UK

§ Awarded Human Tissue Authority (HTA) research licence July 2017 to undertake paid-for-research work on stem cell therapy and regenerative medicine - three projects already secured, which are collectively worth ~£300,000

§ Includes government-backed Innovate UK Knowledge Transfer Partnership with Manchester Metropolitan University to undertake research on a new form of stem cell technology in March 2018.

§ Granted HTA Human Application licence in February 2018, which enabled launch of BabyCells, offering umbilical cord stem cells processing and storage services

§ Additional upside via sale of INDUS, a novel synthetic bone graft which promotes new bone formation - became a licenced provider in July 2017, and sales commenced in Q4 2017

o  Stem cell education and training division Wideacademy

§ Advanced from vision to commercialisation, with revenue generation on track to commence in H2 2018

§ First phase of bespoke platform launched February 2018, with full commercial launch targeted for H2 2018

§ Spearheaded by Former Director of Education at Apple, Alan Greenberg

·     Strengthened board and management team to drive new phase of revenue growth and created a Scientific Advisory Committee to continue to drive product development

·     Recognised industry leader - won and been nominated for several awards:

o  Ranked 21 in the Global DISRUPT 100 list, showing potential to influence, change and create new global markets

o  Won Power Business of the Year at The Manchester Awards 2017

o  Won CorporateLiveWire - Healthcare and Life Sciences Awards 2017, showing excellence in stem cell research services

o  Nominated for the UK Life Science IPO of the year

·     Current cash position anticipated to be bolstered through placing and live bookbuild to raise at least ~£1.80 million

o  Raised aggregate gross proceeds of approximately £1.4 million in two separate private placings since the Initial Listing in July 2016

o  The Live Market Bookbuild remains open and the Group will update the market in due course.

Chairman's Review

I am delighted to be part of this ground-breaking company and deliver my inaugural statement as its Chairman; the prospects of WideCells Group truly excite me. Through our three divisions, we are focused on making stem cell treatment affordable and accessible for families around the world. To this end, 2017 was a year of building both our service offerings and our partnerships with key players to position the Group as a multi-revenue generative opportunity in a fast-growing sector. This resulted in an inflection point with first revenues generated before the year end.

We believe that the stem-cell sector is reaching a tipping point in terms of the market's understanding of its potential to treat rare and life-threatening conditions; the global stem cell market is currently valued at c.US$96 billion and is predicted to grow to US$170 billion by 2020 and US$270.5 billion by 2025, implying a CAGR of 13.8%. We are proud to be recognised as an intrinsic part of this medical revolution.

Our integrated stem cell support services proposition includes: CellPlan, the first-of-its-kind stem cell insurance plan; WideCells, our storage focused division leading the way in the development and use of cell banking services; and Wideacademy, which is driving education and awareness on the stem cells sector. Each division made significant advances during the year as outlined below.

As testimony to our commitment to both innovation and education, in June 2017 the Group was ranked as the 21st most disruptive company globally by DISRUPT 100, an annual index celebrating the businesses with the most potential to influence, change or create new global markets. More recently, post period end, our CEO, João Andrade, was awarded the CEO Europe Award 2018 by CEO Today Magazine.

CellPlan

CellPlan has developed the world's first stem cell healthcare insurance plan and medical concierge service, designed to revolutionise stem cell healthcare by making stem cell transplants affordable for families who require treatment for life threatening diseases.

During the year, it made significant advances bolstering its innovative offering to create new revenue opportunities and expand its service globally. It secured an agreement with Biovault Technical Ltd, the UK's largest private human tissue storage facility, to roll-out CellPlan to Biovault's client base. Additionally, it launched its e-commerce platform, www.cellplan.com, which allows WideCells to sell CellPlan directly to families, whether existing or new clients.

Although the UK stem cell market is comparatively small, our initial launch in the UK has enabled us to trial our offering. The aim is now to roll CellPlan out internationally and include additional product offerings over time. We are preparing to launch in Spain imminently, and in support of this have secured an agreement with Stem Cell Banco Celulas Madre, S. A., an established provider of stem cell storage services, to offer CellPlan to its clients, and will also launch our e-commerce platform to ensure maximum market penetration. A definitive agreement has also been secured with Hemocord Clinica Medica Ltd in Brazil, a world-class leader in cord blood storage, which is set to provide CellPlan access to the largest cord blood storage market in South America, a market projected to be worth US$445 million by 2023.

In March this year WideCells announced a landmark deal with Cryoviva Group, an established cord blood storage facility with operations in Thailand, Singapore and India, to sell CellPlan in Asia.  Cryoviva has c.250,000 inspected samples stored to-date which represents almost 9% of all samples stored worldwide, with forecasts to store c.25,000 new samples every year. CellPlan will be launched to Cryoviva customers on a phased basis, commencing in H2 2018, providing staged revenue increases.

Finally, with our storage division WideCells having recently launched BabyCells, an umbilical cord blood and tissue storage service which is available to clients in the UK and Europe, additional synergistic growth opportunities are available for CellPlan, as one year's stem cell insurance cover will be included as part of the initial storage package.  It is our hope and expectation that this will lead to ongoing uptake and revenue generation for CellPlan, whilst also giving a competitive advantage to our storage services.

WideCells

WideCells offers stem cell procurement, processing, retrieval and storage services in the UK and Europe. Through WideCells Brasil, it also operates a stem cell laboratory in São Paulo, Brazil, licensed by the Brazilian regulatory authority, the Agência Naciónal de Vigilância Sanitáría (ANVISA).

WideCells has established its own storage and processing facility, called the Institute of Stem Cell Technology ('ISCT') based at the University of Manchester Innovation Centre in the UK, which is well positioned to capture an increasing share of the cord blood banking market in the UK and Europe. This provides the Group with exposure to a fundamental part of the market; 4 million cord blood samples are currently held in storage in 500 facilities across the world and this is increasing by 250,000 a year.

Whilst the Group had been offering umbilical cord stem cells processing and storage services through a third-party storage facility under its BabyCells brand in Portugal between 2014 and early 2015, it was only post period end in February 2018 that WideCells was awarded a Human Application Licence by the UK's Human Tissue Authority. This licence permits the Group to procure, import, export, process, store and distribute for treatment, umbilical cord blood and umbilical cord tissue from the UK and Europe at our ISCT facility in Manchester, UK. This transformational milestone licence enables the Group, under the brand name BabyCells, to offer affordable umbilical cord blood and tissue storage services at the highest standards to clients in the UK and Europe. Our focus is now on promoting client-uptake and we are actively looking for agents, initially focusing on Europe, to promote our stem cell storage services.  In support of this, we believe we have a very strong product offering, as alongside offering clients state-of-the-art storage services, new BabyCells clients will be given a year's stem cell insurance cover, provided by our CellPlan division.   

Going forward, WideCells intends to add additional stem cell services such as dental pulp processing and storage (TeethCells) and Adipose tissue collection, processing and storage (LipoCells) to increase the Group's stem cell storage product offering. Furthermore, during the year under review, WideCells secured a licence to provide INDUS, a novel synthetic bone graft which promotes new bone formation. The Group commenced selling this new product in the UK in Q4 2017, initially targeting the dental industry, with obvious potential for further roll out internationally.

Alongside our cryogenics facility at the ISCT, we have a state-of-the-art laboratory which allows us to undertake pioneering paid-for research projects to support the continued development of the stem cell industry. Our leading stem cell scientists have, for example, been appointed by Qigenix, a California-based clinical stage medical device company, to undertake research on its behalf, testing a new laser technology designed to increase the homing and integration of stem cells. By supporting development, we ensure we remain at the fore of the stem cell industry.

WideAcademy

Spearheaded by Alan Greenberg, the former Director of Apple Education, Wideacademy, the Group's education and training division, is focused on promoting best-practice and quality, whilst driving innovation and supporting sales of insurance and stem cell storage for CellPlan and WideCells divisions. By helping people to understand this growing industry from multiple perspectives and angles, Wideacademy will help drive the uptake of our other products and services and in turn investment across the entire sector, which ultimately, could save many lives. The platform, which combines free-to-access educational areas with paid-for premium digital tools and resources for doctors and medical professionals, was launched post period end and is already receiving excellent feedback.

Going forward, we intend to add additional functionality, including access to educational modular courses that can support Continual Professional Development ('CPD') for medical professionals. The Group is currently in discussions with a number of universities and educational organisations to refine its planned courses and CPD offering. Wideacademy also intends to launch a diseases & treatment section in H1 2018, to provide more detailed information on specific illnesses.

Corporate

During the year, several corporate changes were undertaken to reflect the Group's transition from product development into a revenue-generative, international provider of stem cell services. Accordingly, we have brought together individuals of outstanding quality who have proven track records in the stem cell industry and financial sector.

Directorship appointments included: Alan Greenberg, previously Vice President of Wideacademy and a Group Non-Executive Director, who became Senior Vice President of Wideacademy, a Group Executive Director and Group Chief Business Development Officer; Malcolm Glaister, who has held a number of management roles across a broad spectrum of leading investment and trading businesses and joined as a Non-Executive Director; and myself as Non-Executive Chairman, having previously held several senior directorship positions with both large and small companies in the insurance, healthcare and IT industries. As part of these board changes, Dr. Graham Hine, my predecessor as Chairman, retired from his board role; I would like to thank him for all his work and support in helping advance the Group to a point of international growth and development.

Post period end, David Henriques, who has significant asset management and corporate finance experience, and is involved with the digitalisation of insurance products, was appointed to the Board as a Non-Executive Director. He replaced Mr. Zakaria Aziz who stepped down from his position as Non-Executive Director.

A new Scientific Advisory Committee consisting of leading figures in the industry was also appointed. Responsible for identifying and advising the Board on new developments within the stem cell sector, the Committee will ensure that we continue to address market demand and offer the most competitive and innovative portfolio of services.

Finally, post-period end, investors will be aware that trading in our shares was suspended. This was a result of a delay in publishing our final results for 2017 pending completion of the audit process, which in turn could not be completed as we were in discussions with our financial advisers with a view to a fundraising.

Having received commitments in respect of approximately £1.47 million via a placing, and with a live market bookbuild underway due to bolster this further, we have been able to successfully conclude the auditing of our annual accounts. In light of this, we are working with the Financial Conduct Authority to achieve a lifting of the suspension following the publication of our results.

I would like to assure shareholders that despite the delay in publishing accounts and subsequent trading suspension, all business operations have continued to operate as usual and our growth prospects remain strong. Our focus is firmly on achieving the commercial roll-out of our stem cell services to build revenues and ultimately drive the value of our business.

Financial Overview

We successfully raised £1.4 million before expenses in two placings in 2017. 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 grow sales in 2018.

Outlook

We are now focused on growth and the commercial roll-out of products and services across all three divisions. As well as our existing regions, we are exploring opportunities in the Asia-Pacific territories, where the stem cell industry is gaining increasing profile. Our preeminent team and staff are leading the world in this exciting sector and with their support, I anticipate steady growth during the year.

To conclude, I would like to take this opportunity to thank our shareholders who provide ongoing support and look forward to updating our progress on a regular basis.

Peter Presland

Non-Executive Chairman

Chief Executive's Statement

Stem cell therapy is gaining increasing recognition for its life-saving potential in a wide-range of medical applications. 82 illnesses can currently be treated using stem cell procedures, and developments in its use in illnesses such as cystic fibrosis, cerebral palsy, diabetes and autism have caught the headlines of late. As the value potential of this innovative treatment advances, more and more people are becoming aware of the benefits of storing stem cells, which in turn is driving additional development and advancement in the industry. This is accordingly an opportune time to be building a leading position within the stem cell industry and having successfully launched our first of its kind end-to-end stem cell service that covers storage, insurance, research and education/training, we are now focused on achieving global roll-out to build revenues, drive development and ultimately ensure that all people, regardless of geography or financial position, have access to stem cell treatment.

Through first-hand experience, I have identified both the value potential and the limitations of the industry in which we operate. In terms of value potential, we are focused on cord blood, taken from the umbilical cord following birth, as we believe it is the most useful and best "quality" source of stem cells and it is an area of rapid growth, with more than 250,000 samples being stored per annum and growing fast. However, looking at the limitations, whilst over 4,000,000 people have stored cord blood with over 500 cord blood bank companies that exist worldwide, paying c.£2,000 to do so, many do not realise that if treatment is needed costs could climb to as high as £300,000, making it unaffordable for many. It is because of these limitations and strong growth dynamics that we have created our end-to-end stem cell service.

At the core of this offering is our highly innovative CellPlan product - the first global stem cell insurance package. This provides access to stem cell specialists and hospitals, covering the whole family for up to £/€1 million worth of medical, travel and accommodation expenses worldwide for an affordable £150-£300 per annum. With CellPlan live in the UK and strategic agreements in place to launch in Spain, Brazil, Thailand, India and Singapore in the coming year it is clear to see that our focus is now on achieving roll-out on a commercial scale. Of course, critical to stem cell treatment is stem cell storage and so alongside CellPlan, we are delighted to have recently launched our own stem cell storage services at our state of the art facilities at the Institute of Stem Cell Technology in Manchester, UK. Following landmark licensing approval from the Human Application Licence in February 2018, our BabyCells service, offering umbilical cord blood and tissue storage services to clients in the UK and Europe, is now live and we are accordingly focused on promoting uptake. BabyCells will be charged at a cost of circa £2,000 per sample for one year's storage (including collection and processing), with recurring storage revenues of £50-£75 per annum thereafter and alternative multi-year pre-paid storage plans. Clients of BabyCells will be also offered one year's stem cell insurance cover, provided by CellPlan, highlighting the synergistic offering of our tripartite business model.

The final string to our offering is education and training focused services, delivered through a bespoke online platform - Wideacademy - of which we launched the first stage in February 2018. Being spearheaded by the former Director of Apple Education, Alan Greenberg, Wideacademy is committed to utilising the power of education to support stem cell uptake across all levels of the industry, with revenue opportunities available through educational tools and courseware targeted at medical professionals.

Looking ahead, it is clear to see that 2018 is set to be incredibly active for WideCells Group. Having successfully launched all three divisions/services, our primary focus is now on driving product update to deliver strong recurring revenues and realise meaningful value for our investors, whilst providing our clients with an affordable and quality product offering that provides them with life-saving medical cover for them and their family, now and for many years to come. In line with our commitment to being at the fore of the rapidly growing global stem cell industry, we maintain an active growth strategy and will continue to target strategic opportunities that provide our company with value uplift opportunity, but our first and foremost focus is on building the profile and global reach of our innovative stem cell services.

João Andrade

Chief Executive Officer

FINANCIAL RESULTS

Consolidated income statement and statement of other comprehensive income for the year ended 31 December 2017

	2017 £	2016 £
Revenue	50,765	25,000
Administrative costs	(2,840,228)	(1,261,719)
Loss from operations	(2,789,463)	(1,236,719)
Finance expense	(17,264)	(30,710)
Loss before tax	(2,806,727)	(1,267,429)
Taxation	(2,126)	(7,517)
Loss for the period attributable to the owners of the parent	(2,808,853)	(1,274,946)
Other comprehensive expense - foreign exchange translation	(32,798)	-
Total comprehensive loss for the year	(2,841,651)	(1,274,946)
Loss per share
Basic & diluted loss per ordinary share	(0.05)	(0.03)

Consolidated statement of financial position at 31 December 2017

	2017 £	2016 £
Assets
Non-current assets
Tangible fixed assets	466,591	394,898
Intangible fixed assets	139,106	-
	605,697	394,898
Current assets
Inventories	27,850	2,887
Trade and other receivables	9,551	22,554
VAT recoverable	173,703	59,567
Cash and cash equivalents	615,219	1,149,758
	826,323	1,234,766
Total assets	1,432,020	1,629,664
Liabilities
Non-current liabilities
Loans and borrowing	207,551	247,803
	207,551	247,803
Current liabilities
Trade and other payables	935,536	392,331
Loans and borrowing	857,709	165,879
	1,793,245	558,210
Total liabilities	2,000,796	806,013
Issued capital and reserves attributable to owners of the parent
Share capital	162,053	135,145
Share premium	3,460,854	2,159,000
Merger reserve	(185,728)	(185,728)
Translation Reserve	(32,798)	-
Share-based payment reserve	331,975	211,513
Accumulated deficit	(4,305,132)	(1,496,279)
Total equity	(568,776)	823,651
Total equity and liabilities	1,432,020	1,629,664

Consolidated statement of cash flows for the year ended 31 December 2017

	2017 £	2016 £
Cash flows from operating activities
Loss for the year	(2,808,853)	(1,274,946)
Adjustments for:
Deprecation of tangible fixed assets	113,191	16,143
Share-based payment expense	120,462	186,626
Net Interest expense	17,264	30,710
Taxation expense	2,126	7,517
Cash flows used in operating activities before changes in working capital	(2,555,810)	(1,033,950)
Increase in stock	(24,963)	-
Increase in trade and other receivables	(101,132)	56,665
Increase in trade and other payables	543,205	238,129
Cash used in from operations	(2,138,701)	(739,156)
Taxes paid	(2,126)	(7,517)
Net cash used in operating activities	(2,140,827)	(746,673)
Investing activities
Purchases of property, plant and equipment	(323,989)	(205,531)
Sale of property, plant and equipment	-	24,931
Net cash used in investing activities	(323,989)	(180,600)
Financing activities
Share issues	1,398,697	2,000,000
Cost of share issue	(69,935)	(239,598)
Interest paid	(17,264)	(11,579)
Issue of convertible debt	50,000	274,500
Issue of finance leases	153,003	-
Proceeds from borrowings	150,000	200,000
Repayment of borrowings	(198,604)	(180,045)
Net cash generated from financing activities	1,465,897	2,043,278
Net (decrease)/increase in cash and cash equivalents	(998,919)	1,116,005
Cash and cash equivalents at beginning of year	1,149,758	33,753
Effect of foreign exchange rate changes	(32,798)	-
Net cash and cash equivalents at end of year	118,041	1,149,758

Consolidated statement of changes in equity

	Results 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	48	742	(466,318)	-	(221,333)	(686,861)
Loss for the year	-	-	-	-	(1,274,946)	(1,274,946)
Foreign exchange translation
Total comprehensive loss	-	-	-	-	(1,274,946)	(1,274,946)
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	135,145	2,159,000	(185,728)	211,513	(1,496,279)	823,651

	Results for the year ended 31 December 2017
	Share capital £	Share premium £	Merger reserve £	Transaction reserve £	Share-based payments reserve £	Accumulated deficit £	Total equity £
1 January 2017	135,154	2,159,000	(185,728)	-	211,513	(1,496,279)	823,651
Loss for the period	-	-	-	-	-	(2,808,853)	(2,808,853)
Foreign exchange transaction	-	-	-	(32,798)	-	-	(32,798)
Total comprehensive loss	-	-	-	(32,798)	-	(2,808,853)	(2,841,651)
Transactions with owners
Share based payment charge	-	-	-	-	120,462	-	120,462
Issue of shares and placings - 28 April 2017 and 15 August 2017	26,908	1,371,789	-	-	-	-	1,398,697
Cost of Placings	-	(69,935)	-	-	-	-	(69,935)
Total contribution by and distributions to owners	26,908	1,301,854	-	-	120,462	-	1,449,229
At 31 December 2017	162,053	3,460,854	(185,728)	(32,798)	331,975	(4,305,132)	(568,776)

Notes

1.  Accounting policies

Basis of preparation and going concern

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 second set of financial information prepared by the Company.

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

The financial information for the year ended 31 December 2017 and 31 December 2016 does not constitute the company's statutory accounts for these years. Statutory accounts for the years ended 31 December 2016 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 December 2017 will be delivered to the Registrar of Companies in due course.

The Independent Auditors' report on the Annual Report and Financial Statements for the year ended 31 December 2017 and 31 December 2016 was unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.  The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31 December 2017 drew attention to a material uncertainty in respect of going concern and included the following wording in that respect:

Material uncertainty related to going concern

We draw attention to note 1 to the financial statements concerning the group and parent company's ability to continue as a going concern. The Directors have prepared cashflow forecasts for a period of at least 12 months from the date of signing of these financial statements which show that the group requires funds from an equity placing and from an increase in the CellPlan and cell storage sales. Should the fundraising fail to complete or the forecast sales are below budget or delayed, a further injection of working capital will be required. These conditions, along with the other matters set out in note 1, indicate that a material uncertainty exists that may cast significant doubt on the group and parent company' ability to continue as a going concern. Our opinion is not modified in respect of this matter.

The Directors have prepared cashflow forecasts for a period including 12 months from the date of approval of this annual report and accounts which show that the Group and the parent company will have sufficient funds to continue and therefore that the going concern basis of preparation is appropriate. First and foremost, this assumes the successful completion of the current funding round of £1.80 million. The other key assumption within these forecasts is the growth in sales of CellPlan insurance policies and of the BabyCells umbilical cord blood and tissue storage service launched this year. Should the fundraising fail to complete or the forecast sales be below budget or delayed, a further injection of working capital will be required to meet the Group's liabilities as they fall due.

Thus the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements, though they also acknowledge that a material uncertainty exists that may cast significant doubt on the Group and parent company's ability to continue as a going concern given the factors described above.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as endorsed by the European Union (EU) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS and are presented in £ Sterling.

The consolidated financial statements have been prepared on a historical cost basis.

Changes in accounting policies

New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not effective for 2017 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) - EU endorsed

As the Group has not yet started to generate significant revenues the Directors are of the opinion that the introduction of IFRS15 will have no material impact on the previously reported revenue. The Directors will continue to review the Group's revenue recognition policy of its core revenue which should commence in the coming year to ensure that this is compliant with IFRS15. The Directors are also of the opinion that IFRS9 will have minimal impact on the Group. IFRS16 will not affect the Group until the year ended 1 January 2019. This will have the effect of capitalising some of the Group's leases on the Group's balance sheet and its effect has yet to be fully documented by the Directors.

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 subsidiary
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.

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 the translation 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:

1.           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.

2.           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 2017.

Tangible fixed assets

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 hardware	33% straight line basis
Motor vehicles	33% straight line basis

Intangible fixed assets

Intangible assets comprise capitalised computer software and are initially recognised at cost.

Amortisation is provided so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Computer software

33% straight line basis

Leased assets

Where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the Group (a "finance lease"), the asset is treated as if it had been purchased outright. The amount initially recognised as an asset is the lower of the fair value of the leased property and the present value of the minimum lease payments payable over the term of the lease. The corresponding lease commitment is shown as a liability. Lease payments are analysed between capital and interest. The interest element is charged to the consolidated statement of comprehensive income over the period of the lease and is calculated so that it represents a constant proportion of the lease liability. The capital element reduces the balance owed to the lessor.

Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an "operating lease"), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight-line basis over the lease term.

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 in 2017 also included the start of sales of CellPlan and INDUS product.

4.    Loss from operations

	2017 £	2016 £
The loss for the period is stated after charging/(crediting):
Depreciation	113,191	16,143
Auditor's Remuneration - Group	30,000	24,500
Auditor's Remuneration - Company	10,000	10,000
Operating lease - Property	87,069	33,320
Share-based payments	120,462	186,626
Foreign exchange gains	(54,881)	(1,191)
Expenses by nature	£	£
Supplies and external services	1,568,974	616,594
Other expenses	(46,938)	23,891
Staff cost	1,205,001	605,091
Total operating expenses	2,727,037	1,245,576
Amortisation and depreciation of assets	113,191	16,143
	2,840,228	1,261,719

5.    Share Capital
	31 December 2017		31 December 2016
	number	£	number	£
Authorised, allotted and fully paid - classified as equity
Ordinary shares of £0.0025 each	64,821,010	162,053	54,058,061	135,145
Total	64,821,010	162,053	54,058,061	135,145

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

On 28 April 2017 the Company issued 5,405,806 ordinary shares at a price of £0.12 per ordinary share.

On 18 August 2017 the Company issued 5,357,143 ordinary shares at a price of £0.14 per ordinary share.

Pursuant to a resolution passed on 16 June 2016, the Company resolved that;

•             The Directors be generally authorised in accordance with the Articles to exercise all the powers of the Company to allot Ordinary Shares, or grant rights to subscribe for, or convert any security into Ordinary Shares, up to a maximum aggregate nominal value of £500,000, provided always that such authority conferred on the directors shall (unless previously renewed, varied or revoked prior to that time) expire at the conclusion of the Company's next annual general meeting or on the date falling 18 months after the date of the passing of the resolution, whichever is the sooner. The Company may make an offer or agreement which would or might require Ordinary Shares to be allotted pursuant to the resolution referred to in paragraph 3.6.1 of the listing prospectus before the expiry of their authority to do so, but allot the Ordinary Shares pursuant to any such offer or agreement after that expiry date;

•             all pre-emption rights in the Articles be waived; (i) for the purposes of, or in connection with, the Placing, the issue of the Conversion Shares and the issue of the Warrant Shares; (ii) generally for such purposes as the directors may think fit (including the allotment of equity securities for cash) up to a maximum aggregate amount of £40,543.54; and (iii) for the purposes of the issue of securities offered (by way of a rights issue, open offer or otherwise) to existing holders of Ordinary Shares, but subject to the directors having a right to make such exclusions or other arrangements in connection with the offering as they deem necessary or expedient: (A) to deal with equity securities representing fractional entitlements; and (B) to deal with legal or practical problems in the laws of any territory, or the requirements of any regulatory body; on the basis that the authorities conferred under the resolution referred to in paragraph 3.6.2 of the listing prospectus shall (unless previously renewed, varied or revoked prior to that time) expire at the conclusion of the Company's next annual general meeting or on the date falling 18 months after the date of the passing of the resolution, whichever is the sooner. The Company may make an offer or agreement which would or might require equity securities to be issued before the expiry of its power to do so, but allot the equity securities pursuant to any such offer or agreement after that expiry date.

The provisions of section 561(1) CA 2006 (to the extent not disapplied pursuant to sections 570-571 CA 2006) confer on shareholders certain rights of pre-emption in respect of the allotment of equity securities (as defined in section 560 CA 2006) which are, or are to be, Rights attaching to the shares

Shares classified as equity

The holders of ordinary shares have full voting dividend and capital distribution rights.

They do not confer any rights of redemption.

On or following the occurrence of a change of control the receipts from the acquirer shall be applied to the holders of the ordinary shares pro rata to their respective holdings.

Ordinary shares were recorded as equity.

**ENDS**

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

WideCells Group PLC	CEO - João Andrade	Tel:  [phone]
Smaller Company Capital Limited	Broker - Jeremy Woodgate & Rupert Williams	Tel: [phone]
Shard Capital Partners LLP	Broker - Damon Heath & Erik Woolgar	Tel: [phone]
St Brides Partners Limited	PR - Charlotte Page & Isabel de Salis	Tel: [phone]

Notes to Editors

WideCells Group PLC

WideCells Group PLC is building an integrated stem cell services company, focused on making stem cell treatments accessible and affordable.  This is achieved through three divisions:

The Group has 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 provide stem cell storage services and focus on stem cell research and regenerative medicine. Its international cryogenics division specialises in stem cell storage, with the Group currently offering umbilical cord blood and tissue storage services to clients in the UK and Europe under the brand name BabyCells.

·     Wideacademy: 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 of 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 (MAR).

 

END

 

 

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