Iconic Labs Plc (LSE:ICON ), a multi-divisional new media and technology business, has raised £747,793 by way of placing at 0.012p per share and entered into a new debt facility with Shard Merchant Capital Limited ("SMC").
For existing investors, the placing of 6,231,610,203 new ordinary shares will represent approximately 19.99% of the Company's existing issued share capital.
In addition, the Company has also entered into a more conventional Debt Facility with SMC of up to £1 million, with an initial drawdown of £0.5m.
The Debt Facility with SMC has an interest rate of 10% per annum and includes a number of standard events of default, and provided that the Facility is not in default then all repayments shall be made in cash.
The Debt Facility also includes the granting of warrants to SMC in an aggregate amount equal to half of the total commitment amount and with a strike price of a 50% premium to today’s Placing Price of 0.012p.
Importantly for investors, the Company can now bring to an end any further issuances of Ordinary Shares to European High Growth Opportunities Securitization Fund ("EHGOF") and has agreed with SMC, pursuant to the terms of the Facility, that the Company will not enter into a transaction with EHGOF for a 3 year period.
The Placing, along with the entering into of the new Facility, therefore enables the Company to progress towards a more conventional basis of equity and debt funding with the principal use of the proceeds received from the Placing being used for general working capital purposes.
John Quinlan, CEO of Iconic Labs plc commented: " I am very pleased that following hard work we are now able to follow through on our commitment to replace the EHGOF facility with more conventional funding. Many shareholders have told us that this was critical in their view, and it is great to be able to deliver the news that they have wanted for so long.
Now we have cancelled the EHGOF facility and put in place a more conventional debt funding facility, it will remove the overhang of continuous conversion of convertible instruments into Ordinary Shares and the dilutive effect that had. With this funding in place we will be able to focus on executing our strategy as previously outlined.
Trading Update
The most significant recent developments for the Company has been the management service contracts with JOE Media and TheLondonEconomic.
These management service contracts not only minimise the capital cost of expansion, through receipt of dependable fixed monthly fees, but also enable the Company to further develop its business and operations of its owned publishing brands.
Whilst the Company will continue to assess the balance of owned brands versus managed brands within its portfolio to ensure the best revenue mix versus intrinsic value, but expects to continue both types of operation.
The Facility, entered into with SMC, is a conventional senior secured loan that has been entered into in order to ensure that the Company has a sufficient working capital for its next phase of growth.
John Added “On an operational level, we believe the recent doubling of the base monthly management fee under the JOE media deal is a gamechanger and builds upon the commercial traction that we are achieving with these underlying businesses - in which we have a 25% profit share.
To give some examples, since taking over the management of JOE the Company has not only secured several major sponsorship contracts but has increased programmatic advertising revenue of 300%. We have also significantly increased revenues at TLE, with programmatic advertising revenue more than doubling in recent months."
Shares in ICON have traded within a tight range over the past three months with the shares opening at a premium to the placing price at 0.014p post the announcement.