Troubled healthcare firm looking to secure future with funding

Manchester based healthcare firm WideCells has warned that it will be forced to introduce cost cutting measures after suffering a torrid year.

The firm, which focusses on providing stem cell services and insurance for stem cell treatment, has announced its interim results for the six months.

Over the period there was minimal revenues which led to a loss of £2.03m.

Costs included over £390,000 relating to the aborted acquisitions and three attempts to raise capital.

There were also reorganisation costs of £130,000. Underlying administration costs rose from £900,000 in the previous period to £1.51m.

In June the group was successful in securing a placing for £2.06m, supported by a revised strategy that was based on a reduction in future cost investment and an expectation of significant revenues in H2 2018, particularly from CellPlan and the Wideacademy division.

However, after costs and the conversion of existing loans into shares as part of the placing, the group received only £1.66m in new cash, which fell further when the firm was unable to convert its overdraft, which had risen to £620,000 to longer term debt and was thus repaid from the placing funds.

Chairman Peter Presland said: “Looking ahead at the group’s ongoing financial requirements for the remainder of 2018 and 2019, alongside undertaking cost-cutting measures, we need to ensure we have financial security to support the business’ ongoing requirements, whilst we build the revenue-generative potential of our services.

“The board looked at all sources of financing in order to find the best solution in the interest of our shareholders. Given the absence to date of substantial revenues, we have been unable to secure traditional bank funding in the form of commercial loans, and the board has been advised that, for similar reasons, a further equity fundraising from existing shareholders is unlikely to succeed.

“Accordingly, the group has entered into an Issuance Agreement with a provider of Convertible Bonds to secure £2.7m worth of funding in return for bonds convertible into shares with attached warrants. “

He added: “The past six months have been a particularly difficult and chastening experience, and going forward, I believe that the group has learned some valuable lessons.

“We, perhaps, have been too ambitious and have stretched our capabilities too far, too quickly. We must be more focussed and realistic in our business planning, with a fundamental change in the operation of the business.”

He added: “However, these lessons have come at a significant cost. As a result, I very much regret having to inform shareholders that, once again, the group requires the significant new fundraising outlined above, without which it is at risk of not being able to continue trading as a going concern.

“Whilst the board understands the financial dilutive effect that such a fundraising will have on existing shareholders, we cannot allow the group to remain continually concerned about its financial future, and it is the intention that this fundraising will draw a line under this uncertainty.”