Under the financing deal with the European High Growth Opportunities Securitization Fund, WideCells will issue the investor convertible bonds with warrants attached in return for the funding. The funding will support the company's cash flow needs for the next 12 to 18 months.
In the six months to June 30, the company’s loss widened to £2.03mln from £880,396 a year ago as revenue fell to £17,929 from £25,000.
WideCells said revenues from recently signed contracts took longer to materialise and it incurred higher costs in investing in products and services. It also took a one-off £0.39mln hit related to aborted acquisitions of two stem cell banks in Brazil, three attempts to raise capital and reorganisations costs.
Peter Presland, who was appointed non-executive chairman last December, said: “It gives me no pleasure to report that the first half of 2018 has been a very difficult time for the group.
“Whilst the vision and the value proposition of the group remains unchanged, as shareholders will no doubt be aware, the year to date has been one that has presented us with unforeseen challenges.
“As a result, we have undertaken a thorough review of the group's operations and are undertaking a number of corporate changes to better streamline our structure and strategy, so that we can position ourselves for profitable growth.”
Restructuring plan to cut costs and deliver growth
As part of his turnaround plan, Presland will undertake a number of cost-saving initiatives and ensure that resources are focused on growth opportunities.
A full operational review has been undertaken to create a strategy that will generate revenue, reduce overheads and achieve profitability.
The company said it is focused on converting current sales agreements for CellPlan, its stem cell insurance plan and medical concierge service, into tangible revenues. CellPlan was initially trialled and launched in the UK last year and WideCells plans to increase its roll-out nationwide and in other targeted countries.
The group is also in talks to restructure its education and training division Wideacademy in a bid to reduce costs.
WideCells unit makes positive progress
Meanwhile, WideCells storage and processing services unit made positive progress during the first half with the award of a Human Application Licence from the UK's Human Tissue Authority in February.
The licence allows the group for the first time to import, export, process, store and distribute for treatment umbilical cord blood and umbilical cord tissue to and from the UK and Europe.
Revenue streams from the BabyCells package, which offers collection and processing of umbilical cord blood with one year's storage, will provide longer-term recurring revenues. “Whilst this revenue stream will take a while to grow, our focus is now to build the profile and drive uptake of this storage service,” the group said.
“We are in active discussions and have begun to sign commercial agreements with a number of industry professionals, including midwives, obstetrics and gynaecology departments and medical clinics who will now offer and promote our stem cell storage service to their patients.”
Widecells shares were down 67% to 0.62p.
--Updates for share price and video link--