Key Figures

All figures in ISK m. Comparative figures from last year in parentheses.

- Operating loss before depreciation, financial income & expenses: 21.9 (8)
- Net loss for the period: 49.3 (26.3)
- Total assets: 1,249.9 (1,298.2)
- Equity ratio: 96.6% (97.1%)
- Game revenue: 9.9 (6.7)

Solid Clouds initiated the soft launch of its latest game, Starborne Frontiers, last February. The game is already generating revenue with minimum marketing efforts and has been well received so far. The game has earned high ratings and reviews from players on both Google Play (Android) and on the App Store (iOS). 

“The team is very proud of the reception of the game so far at this stage in the development of the game and it gives us high hopes for the future success of Starborne Frontiers”, says Stefán Gunnarsson, the Company’s CEO. 
Solid Clouds is preparing the release of a major update to the game, known as the Abyss mode, in the coming weeks. This game mode is one of the core endgame systems and is a huge milestone towards the official launch of the game in Q2 2024. The Abyss game mode, along with additional player content and further optimizations, is intended to enhance long-term gameplay, user retention and revenue per player significantly.

The PC version goes live in Q1 next year, significantly increasing the potential customer base, improving targeting of customers and reducing costs associated with third-party vendors like Apple and Google.

The global release of Starborne Frontiers will be accompanied by a full-scale marketing campaign in Q2, 2024.

The Condensed Interim Financial Statements of Solid Clouds for the first half of 2023 were approved by the Company’s Board of Directors and the CEO at a board meeting on 31 August 2023. These cover the period from 1 January to 30 June 2023 and were prepared according to International Financial Reporting Standards (IFRS). They have neither been reviewed nor audited by the Company’s auditors, Deloitte ehf.

First Half 2023 Financial Highlights

Most of Solid Clouds’ expenses arise from R&D spending, which is capitalized and then amortized over its expected lifespan. Capitalized R&D cost amounted to ISK 174.5 m during the first half of 2023, a decrease of 3% from the first half of 2022.

The Icelandic state provides tax credits to stimulate research and development. R&D tax credits for the operating year 2022, paid in November, are expected to reach ISK 128.6 m, an increase of 22% from 2022.

Game revenues amounted to ISK 9.9 m, an increase of 47.7% compared with the first half of 2022.

Operating loss before income tax amounted to ISK 62.6 m, compared to a loss of ISK 35.5 m in the first half of 2022.

Financial Liquidity

As of 30 June 2023, the Company had cash on hand of ISK 118.5 m. The Company expects to receive about ISK 128.6 m in R&D tax credits in November this year, subject to final approval by the Icelandic Tax Authority (RSK). The Company expects that R&D tax credits for the operational year 2023, to be paid in November 2024, will be comparable to the payment this year.

Proposed share capital increase 
The Board of Directors of Solid Clouds has approved a proposed share capital offering of up to ISK 400 million, with an option of increasing the size of the offering to ISK 600 million. The proposed issuance is priced at ISK 7 per share. The net proceeds of the offering will allow the Company to finalize development of Starborne Frontiers and implement robust marketing strategies to support the launch. 

“As the full scale marketing of the game starts next year we are raising additional capital in a share offering to support our operational expenses and marketing initiatives,” says Stefán Gunnarsson, the Company’s CEO. “This step is integral to maintaining the momentum we have achieved, expanding our reach and engaging with a wider audience of players. The additional capital will empower the Company to implement robust marketing strategies that resonate with our target markets.” 

A shareholders’ meeting has been called for 8 September at 4:00 pm, at the Headquarters of Arion Bank see link.

Solid Clouds’ Financial Statements and Operational Update and Proposed Share Capital Increase are available on the Company’s website: https://www.solidclouds.com/investors/docs

Recent Business Highlights

The soft launch of Starborne Frontiers began in February when the game was made available for smart devices via the Apple and Google app stores. Since then, over 60,000 players have downloaded the game. During this stage of game development, Solid Clouds has aimed to attract approximately 350 new players daily, which proves sufficient for collecting the user data necessary to refine the game and its revenue model. The proportion of players who have converted into paying customers has been high, and this bodes well for the future. The game and revenue systems of Starborne Frontiers will continue to undergo optimization, and more content will be added to the game. 

Proposed Share Capital Increase

The Company hereby announces a contemplated private placement to raise gross proceeds of up to ISK 400 million, but with the option of an increase to ISK 600 million (the “Private Placement”) by the issuance of new shares in the Company (the “Offer Shares”). The subscription price per Offer Share (the “Subscription Price”) is ISK 7,0. The Company has engaged Arion Bank hf. to act as manager of the Private Placement (“Arion”). Based on a limited wall-crossing exercise, Arion has received positive feedback from investors. The net proceeds for the Private Placement will be used to generate revenue through marketing efforts and to support the final stages of development of Starborne Frontiers.

The subscription period commenced on 30 August 2023 at 12:00 GMT and will end on September 7 at 23:59 GMT. 

The number of Offer Shares to be issued in the Private Placement will be determined by the Company’s Board of Directors, following the completion of the bookbuilding process. The Private Placement will be directed towards fewer than 150 natural or legal persons, other than qualified investors, pursuant to section 4. b) of Article 1 of the EU Prospectus Regulation (Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017) and ancillary regulations, as implemented pursuant to Icelandic Act No. 14/2020 on Prospectuses for Public Offering or Admission to Trading on a Regulated Market, subject to applicable exemptions from relevant registration, filing and prospectus requirements, and subject to other applicable selling restrictions.

Subscriptions placed in the Private Placement are conditional on the Company’s shareholder meeting approving a share capital increase of 57,142,857 Offer Shares, each with a nominal value of ISK 1, and the Board of Directors being granted approval to issue a further 28,571,429 Offer Shares. Subscriptions in the Private Placement are also conditional upon existing shareholders waiving their pre-emptive rights to the issuance of the Offer Shares. These matters will be voted upon at the Company’s shareholder meeting on 8 September 2023.

Settlement of the Private Placement is expected to be on or about 14th of September. The completion of the Private Placement by delivery of the Offer Shares to investors is subject to all necessary corporate resolutions being validly made by the Company, and extraordinary general meeting authorising the Company’s Board of Directors to raise the share capital by issuing new shares.