TIDMAPOL
RNS Number : 8963Q
Apollon Formularies plc
30 June 2022
30 June 2022
Apollon Formularies Plc
Final Results for the Year Ended 31 December 2021
Apollon Formularies plc (AQSE: APOL, "Apollon" or the "Company")
, a UK based international pharmaceutical company trading on the
Aquis Stock Exchange, is pleased to announce its Final Results for
the year ended 31 December 2021 (the 'Period').
Period Highlights:
-- Listed on London's Aquis Growth market in April 2021
-- Raised GBP2.5 million through an oversubscribed fundraise
-- Third-party testing of Apollon's medical cannabis
formulations demonstrated the successful killing of nearly 100% of
triple negative and HER2+ breast cancer cells in 3D cell cultures.
Further testing showed the formulations to also be successful in
killing nearly 100% of prostate cancer cells in 3D cell
cultures
-- Expansion of Apollon's production facility in Negril,
Jamaica, to increase high-quality cannabis oil production capacity
to over 50 times the current production level
-- In preparation for global expansion, appointment of Stephen
Barnhill Jr. as Chief Operating Officer of Jamaican, Caribbean, and
North American Operations, and Stene Jacobs as Chief Operating
Officer of European and African Operations
-- Appointment of Dr. Dingle Spence as the Medical Director of
Apollon's International Cancer and Chronic Pain Institute
-- First patients treated at International Cancer and Chronic Pain Institute in December 2021
Post Period Highlights:
-- Joint Venture with Tri-Medi Canna, South Africa to start
servicing the South Africa Development community (SADC) comprising
of 16 member states encompassing a population of circa
350million
-- Acquired patents from Aion Therapeutic which includes all
associated supporting data including pre-clinical testing results
from BIOENSIS:
o Composition and Methods for Treatment of Cancers ;
o Composition and Methods for Treatment of Inflammation ;
o Methods for Treatment of Human Cancers using Mushroom
Combinations; and
o Methods for Treatment of Human Cancers using Cannabis Compos
itions.
-- Appointment of Dr. Archibald McDonald, Professor Emeritus as
Director of Clinical Trials and Dr. Herbert Fritsche to the Board
of Directors
-- Renewal of CLA-licenses for Processing and Retail
(Therapeutic) until January 2025. Apollon's Research and
Development license is current and does not need to be renewed
until September 2022
Chairman's Report
I am pleased to provide shareholders with Apollon's ("Apollon"
or the "Company") financial results for the full year ended 31
December 2021 and an update on the progress that the Company has
made, and continues to make, as it takes steps to transition
towards serving a wider global export market.
In April 2021, Apollon completed a reverse takeover and
commenced trading on the Aquis Growth Market. This public listing
was notable as Apollon was among the first medical cannabis
companies legally licenced to work with full-spectrum high THC
medical cannabis products allowed to be publicly listed in London.
As part of this, Apollon secured GBP2.5 million through an
oversubscribed fundraise at 5p.
As announced in June 2021, third-party independent lab testing
carried out by BIOENSIS demonstrated that Apollon's proprietary
medical cannabis formulations were successful in killing nearly
100% of triple negative and HER2+ breast cancer cells in 3D cell
cultures. Further testing carried out by BIOENSIS, announced in
July 2021, showed the formulations to be successful in killing both
hormone-resistant and hormone-sensitive prostate cancer cells in 3D
cell cultures.
As part of the Company's strategy to reach global markets,
Apollon expanded its production facility in Negril, Jamaica. A key
part of the upgrade consisted of Apollon purchasing a new imported
distiller from the US which will significantly increase our
high-quality cannabis oil production capacity by over 50 times the
current level, to more than 20 litres of distilled medical cannabis
oil per day. This allows Apollon to greatly increase its inventory
ahead of global exportation to countries where legal import is
allowed.
During the Period, we made a number of appointments to
strengthen our medical team and Board in preparation for global
expansion. In July 2021 we appointed Dr. Dingle Spence, MBBS, Dip
Pall. Med, FRCR, as the Medical Director of its new facility, the
Apollon International Cancer and Chronic Pain Institute, in
Kingston, Jamaica. In addition, Stephen Barnhill Jr. and Stene
Jacobs were appointed as joint Chief Operating Officers, with
Stephen Barnhill Jr. focusing on Jamaica, the Caribbean and North
America, whilst Stene Jacobs has been focusing on Apollon's
expansion into Europe and Africa.
At the beginning of December 2021, we announced that the
International Cancer and Chronic Pain Institute was open and had
begun treating its first cancer patients with Apollon's medical
cannabis products. This important step rounds off a successful year
which has seen significant growth and development of the Company,
as it strives to increase shareholder value.
Post-Period
Following the opening of the International Cancer and Chronic
Pain Institute, Apollon has had continued demand from international
patients for treatment and consultations at the Institute, as well
as at the Wellness Centre in Negril and we have made some exciting
steps in the first half of 2022 as we build on the success of
2021.
In March 2022, Apollon announced the formation of a joint
venture partnership with Tri-Medi Canna to establish a vertically
operated business, Apollon SA Pty. This joint venture represents
our first international expansion and is a significant development
for the Company as it provides access, under license, to the South
Africa Development Community (SADC), comprising of 16 member states
with the potential to reach over 350 million people. According to
Prohibition Partners, Africa Cannabis Report, March 2019, Africa's
medical cannabis sector is forecast to be worth up to $7.1 billion
by 2023, which provides an excellent potential for Apollon to
establish a commercial footprint.
We have also acquired four international patents from Aion
Therapeutics. These patents are filed through the Patent
Cooperation Treaty covering 156 countries and contracting states,
as well as being filed in Jamaica. This acquisition includes all
associated supporting data including the pre-clinical testing
results from BIOENSIS. The patent Titles are:
1. Composition and Methods for Treatment of Cancers.
2. Composition and Methods for Treatment of Inflammation.
3. Methods for Treatment of Human Cancers using Mushroom Combinations and
4. Methods for Treatment of Human Cancers using Cannabis Compositions.
Apollon currently provides these medical cannabis and medicinal
mushroom products by physician prescription at the International
Cancer and Chronic Pain Institute in Kingston, Jamaica, and at the
Cannabis Licensing Authority ("CLA") licensed dispensary in Negril,
Jamaica. Apollon will, and in the near term, provide them through
medically supervised patient trials to validate the successful
results seen in pre-clinical testing.
In January 2022, it was announced that Dr. Archibald McDonald,
Professor Emeritus, and Former University Dean, Faculty of Medical
Sciences and Pro-Vice Chancellor, University of the West Indies,
was appointed as Director of
Clinical Trials at Apollon. Dr. McDonald is currently the
Chairman of the Ethics Committee of the Ministry of Health in
Jamaica and is now working with the Company on medically supervised
patient trials. Further to this appointment, we were delighted to
welcome Dr. Herbert Fritsche to the Board of Directors. Dr Herbert
Fritsche is former Professor of Laboratory Medicine and Chief of
the Clinical Chemistry Section at The University of Texas, M.D.
Anderson Cancer Center in Houston, Texas and world-renowned
Clinical Chemist recognized internationally as an expert in the
field of clinical chemistry, cancer diagnostics and laboratory
medicine.
Furthermore, in January 2022, the CLA approved Apollon's request
for the renewal of two medical cannabis licenses: Processing, and
Retail (Therapeutic) for an additional three years. The Company has
a current CLA approved Research and Development (Experimental)
License, and we are currently one of the very few companies in
Jamaica with all three of these vertically integrated CLA approved
licenses.
The combination of these licenses allows the us to successfully
implement our business plan and achieve the goal of developing,
processing, and manufacturing our proprietary formulations, selling
Apollon's cannabis derived pharmaceutical and nutraceutical
products, treating patients, performing clinical trials, and
legally exporting our scientifically validated medical cannabis
products globally.
Outlook
As we look ahead through the second half of 2022 into 2023 and
beyond, there are several key developments that the Company intends
to make. A major priority for Apollon is exporting its first line
of products to South Africa for continued academic research with
its academic affiliates in the region, and for patients to access
through prescription under S21 guidelines in South Africa. Apollon
will continue engagement with the South African Health Products
Regulatory Authority to start the licensed medication process in
the region.
In Jamaica, Apollon is working to gain regulatory authority from
the Ministry of Health and Wellness to supply the entire Jamaican
dispensary and pharmacy network, which is currently 750 strong.
We are focused on investigating ways to upgrade our current
capabilities to a larger GMP/EU-GMP facility, which would give us
the access to the wider global export market in supportive
jurisdictions where medical cannabis is legal.
We note the recent extreme volatility in the global financial
markets as central banks struggle to contain inflationary pressures
after more than a decade of loose fiscal policy. This volatility
has disproportionately impacted growth-orientated companies such as
Apollon and has the potential to create challenging periods to
raise continued financing. Due to its relatively low overheads and
nimble decision making capabilities, the Company seeks to retain
financial and operational flexibility in the uncertain times ahead
while remaining committed to created shareholder value in the
longer term.
I am excited for what the future holds for Apollon and would
like to thank our shareholders for their support and continued
investment as we execute our strategy to become the premier global
medical cannabis company in Oncology and Chronic Pain. We have
achieved several key milestones during the year ended 31 December
2021 and we are well positioned to continue our growth both locally
and globally. I look forward to keeping investors updated with
future developments.
Stephen D Barnhill M.D
Chairman
30 June 2022
A copy of the annual report and financial statements will be
available on the Company's website at
https://www.apollon.org.uk/investor-relations/presentations-and-reports/
The Directors of the Company accept responsibility for the
contents of this announcement.
For more information contact:
Apollon Formularies
Tel: +44 771 198 0221
Stene Jacobs stene@apollon.org.uk
Peterhouse Capital Limited (Corporate Adviser)
Tel: +44 207 220 9795
Guy Miller gm@peterhousecapital.com
BlytheRay (Financial PR/IR-London)
Tel: +44 207 138 3204
Tim Blythe/Alice McLaren apollon@blytheray.com
Consolidated statement of comprehensive income for the year
ended 31 December 2021
For the For the
year ended year ended
31 December 31 December
2021 2020
Continued operations Note GBP GBP
--------------------------------------- ---- ------------ ------------
Revenue 6 197,671 -
Cost of sales - -
Gross profit 197,671 -
------------ ------------
Administrative expenses 7 (959,412) (56,145)
Share on loss of an associate 25 (197,931) (235,744)
Foreign exchange 6,723 (202,623)
Other net gains/(losses) 8 (241,344) -
Operating (loss) (1,194,293) (494,512)
------------ ------------
Impairment 24 (1,332,464) -
Finance costs 9 (3,799) (2,427)
Loss before tax (2,530,556) (496,939)
------------ ------------
Tax credit/(expense) - -
Loss for the year (2,530,556) (496,939)
============ ============
Other comprehensive income:
Items that will or may be reclassified
to profit or loss - -
Total comprehensive loss for the year
attributable to the equity owners (2,530,556) (496,939)
Basic and diluted - pence 19 (0.462) (0.287)
------------ ------------
Weighted average number of ordinary
shares parent
Basic and diluted 19 548,102,705 173,166,503
============ ============
Statement of Financial Position as at 31 December 2021
Group Company
-------------------------- ---------------------------
As at 31 As at As at 31 As at 31
December 31 December December December
2021 2020 2021 2020
Note GBP GBP GBP GBP
---------------------------- ---- ------------ ------------ ---------- ---------------
Non-current assets
Investment in Associate 25 2,379,981 2,157,310 402,189 -
Investment in Subsidiaries 23 - - 41,362,023 1,160,000
2,379,981 2,157,310 41,764,212 1,160,000
------------ ------------ ---------- ---------------
Current assets
Trade and other receivables 13 360,657 240,857 336,460 9,004
Cash and cash equivalents 14 304,986 2,369 202,133 12,162
------------
665,643 243,226 538,593 21,166
------------ ------------ ---------- ---------------
Total assets 3,045,624 2,400,536 42,302,805 1,181,166
------------ ------------ ---------- ---------------
Current liabilities
Trade and other payables 15 83,016 85,222 82,985 96,654
83,016 85,222 82,985 96,654
------------ ------------ ---------- ---------------
Total liabilities 83,016 85,222 82,985 96,654
------------ ------------ ---------- ---------------
Net assets 2,962,608 2,315,314 42,219,820 1,084,512
------------ ------------ ---------- ---------------
Equity
Share capital 17 - 17,344 - -
Share premium 17 54,050,764 3,910,557 54,050,764 11,704,388
Share option reserve 17 85,363 - 85,363 -
Reverse acquisition reserve 24 (47,030,385) - - -
Retained earnings (4,143,134) (1,612,587) (11,916,307) (10,619,876)
------------ ------------
Total equity 2,962,608 2,315,314 42,219,820 1,084,512
------------ ------------ ---------- ---------------
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the Parent Company
Statement of Comprehensive Income. The loss for the Parent Company
for the year was GBP1,296,431 (31 December 2020: loss of GBP
330,942 ).
The Financial Statements were approved and authorised for issue
by the Board on 30 June 2022 and were signed on its behalf by:
Stephen D Barnhill M.D
Executive Chairman
Consolidated statement of changes in equity for the year ended
31 December 2021
Share Share premium Reserve Retained Total
capital Share option acquisition earnings
reserve reserve
GBP GBP GBP GBP GBP
------------------------- -------- ------------- ------------ ------------ ----------- ---------
Balance as at
1 January 2020 17,309 3,861,592 - - (1,115,648) 2,763,253
-------- ------------- ------------ ------------ ----------- ---------
(Loss) for the
period - - - - (496,939) (496,939)
Total comprehensive
(Loss) for the
period - - - - (496,939) (496,939)
-------- ------------- ------------ ------------ ----------- ---------
Issue of shares 35 48,965 - - - 49,000
Total transactions
with owners, recognised
directly in equity 35 48,965 - - - 49,000
-------- ------------- ------------ ------------ ----------- ---------
Balance as at
31 December 2020 17,344 3,910,557 - - (1,612,587) 2,315,314
======== ============= ============ ============ =========== =========
Reverse
Share Share Share option acquisition Retained
capital premium reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP
------------------------- -------- ----------- ------------ ------------ ----------- ------------
Balance as at
1 January 2021 17,344 3,910,557 - - (1,612,587) 2,315,314
-------- ----------- ------------ ------------ ----------- ------------
(Loss) for the
period - - - - (2,530,556) (2,530,556)
-------- ----------- ------------ ------------ ----------- ------------
Total comprehensive
loss for the period - - - - (2,530,556) (2,530,556)
-------- ----------- ------------ ------------ ----------- ------------
Transfer to reverse
acquisition reserve (17,344) (3,910,557) - (47,030,385) - (50,958,286)
-------- ----------- ------------ ------------ ----------- ------------
Recognition of
AfriAg plc equity
at acquisition
date - 11,704,388 - - - 11,704,388
-------- ----------- ------------ ------------ ----------- ------------
Share issue for
acquisition - 40,000,000 - - - 40,000,000
-------- ----------- ------------ ------------ ----------- ------------
Share issue for
cash - 2,500,000 - - 2,500,000
Share issue costs - (153,624) - - (153,624)
Warrants issued - - 85,363 - - 85,363
-------- ----------- ------------ ------------ ----------- ------------
Total transactions
with owners, recognised
directly in equity (17,344) 50,140,207 85,363 (47,030,385) - 3,177,841
-------- ----------- ------------ ------------ ----------- ------------
Balance as at
31 December 2021 - 54,050,764 85,363 (47,030,385) (4,143,134) 2,962,608
======== =========== ============ ============ =========== ============
Company statement of changes in equity for the year ended 31
December 2021
Share Share premium Share option Retained Total
capital reserve earnings
GBP GBP GBP GBP GBP
------------------------- ----------- --------------- -------------- -------------- -----------
Balance as at 1 January
2020 - 11,705,388 127,828 (11,078,646) 754,570
----------- --------------- -------------- -------------- -----------
(Loss) for the period - - - 330,942 330,942
Total comprehensive
(loss) for the period - - - 330,942 330,942
----------- --------------- -------------- -------------- -----------
Share issues costs - (1,000) - - (1,000)
Transfer with equity - (127,828) 127,828 -
Total transactions
with owners, recognised
directly in equity - (1,000) (127,828) 127,828 (1,000)
----------- --------------- -------------- -------------- -----------
Balance as at 31
December 2020 - 11,704,388 - (10,619,876) 1,084,512
=========== =============== ============== ============== ===========
Share Share premium Share option Retained Total
capital reserve earnings
GBP GBP GBP GBP GBP
---------------------------- -------- ------------- ------------ ------------ -----------
Balance as at 1 January
2021 - 11,704,388 - (10,619,876) 1,084,512
-------- ------------- ------------ ------------ -----------
(Loss) for the period - - - (1,296,431) (1,296,431)
-------- ------------- ------------ ------------ -----------
Total comprehensive
loss for the period - - - (1,296,431 (1,296,431)
-------- ------------- ------------ ------------ -----------
Share issue for acquisition - 40,000,000 - - 40,000,000
-------- ------------- ------------ ------------ -----------
Share issue for cash - 2,500,000 - - 2,500,000
Share issue costs - (153,624) - - (153,624)
Warrants issued - - 85,363 - 85,363
Total transactions
with owners, recognised
directly in equity - 42,346,376 85,363 - 42,431,739
-------- ------------- ------------ ------------ -----------
Balance as at 31
December 2021 - 54,050,764 85,363 (11,916,307) 42,219,820
======== ============= ============ ============ ===========
Consolidated cash flow statement for the year ended 31 December
2021
For the For the
year ended year ended
31 December 31 December
2021 2020
Note GBP GBP
------------------------------------------ ---- ------------ ------------
Cash flows from operating activities
Net (loss) for the year (2,530,556) (496,939)
Adjustments for:
Interest expense - 2,426
Shares issued for services - 49,000
Share based payments 18 85,363 -
(Increase)/decrease in trade and other
receivables (24,768) 256,092
(Decrease)/increase in trade and other
payables (617,215) (581)
Foreign exchange (gain)/loss (18,406) 202,753
Net cash flows from operating activities (3,105,582) 12,751
------------ ------------
Investing activities
Acquisition of Apollon Formularies
PLC, net of cash acquired 24 1,332,464 -
Cash acquired upon acquisition of Apollon
Formularies Ltd 24 17,542 -
Loans granted to associate 25 (402,189) (291,288)
Loss from associate 25 197,931 235,745
Net cash inflow/(outflow) in investing
activities 1,145,748 (55,543)
------------ ------------
Financing activities
Proceeds from share issue 17 2,500,000 -
Cost of share issue 17 (153,624) -
Loan repayments (83,925) (30,000)
Proceeds from borrowings - 71,500
Net cash inflow/(outflow) in financing
activities 2,262,451 41,500
------------ ------------
Net increase/(decrease) in cash and
cash equivalents 302,617 (1,292)
Cash and cash equivalents at beginning
of period 2,369 3,661
Cash and cash equivalents and end
of period 304,986 2,369
------------ ------------
Major non-cash transactions
On 13 April 2021, the proposed reverse takeover of Apollon
Formularies Limited had completed. The Company acquired the full
share capital of Apollon Formularies Limited via the issuance of
666,666,666 shares based on 3.95 consideration shares being issued
for every 1 ordinary share in Apollon Formularies Limited. The
acquisition constitutes a reverse acquisition as the shareholders
of Apollon Formularies Limited will acquire control of Apollon
Formularies Plc (formerly AfriAg Global plc).
Company cash flow statement for the year ended 31 December
2021
For the For the
year ended year ended
31 December 31 December
2021 2020
Note GBP GBP
----------------------------------------- ---- ------------ ------------
Cash flows from operating activities
Net profit/(loss) for the year (1,296,431) 330,942
Adjustments for:
Share based payments 18 85,363 -
(Increase)/decrease in trade and other
receivables (230,977) 4,242
(Decrease)/increase in trade and other
payables (109,986) (427,621)
Net cash flows from operating activities (1,552,031) (92,437)
------------ ------------
Investing activities
Loans granted to associate 25 (402,189) -
Loans granted to subsidiary 23 (202,023) -
Receipts on sale of investments - 7,130
Net cash inflow/(outflow) in investing
activities (604,212) 7,130
------------ ------------
Financing activities
Proceeds from share issue 17 2,500,000 -
Cost of share issue 17 (153,624) (1,000)
Net cash inflow/(outflow) in financing
activities 2,346,376 (1,000)
------------ ------------
Net increase/(decrease) in cash and
cash equivalents 190,133 12,162
Cash and cash equivalents at beginning
of period 12,000 86,307
Cash and cash equivalents and end
of period 202,133 98,469
------------ ------------
Major non-cash transactions
On 13 April 2021, the proposed reverse takeover of Apollon
Formularies Limited had completed. The Company acquired the full
share capital of Apollon Formularies Limited via the issuance of
666,666,666 shares based on 3.95 consideration shares being issued
for every 1 ordinary share in Apollon Formularies Limited. The
acquisition constitutes a reverse acquisition as the shareholders
of Apollon Formularies Limited will acquire control of Apollon
Formularies Plc (formerly AfriAg Global plc).
Notes to the financial statements
1. General information
Apollon Formularies Plc is a medicinal cannabis pharmaceutical
company incorporated and registered in the Isle of Man. The
Company's registered office is 34 North Quay, Douglas, Isle of Man,
IM1 4LB. The Company's ordinary shares are traded on the AQSE
Exchange Growth Market as operated by Aquis Stock Exchange Ltd
("AQSE").
Information on the Group's structure is provided in Note 23.
Information on other related party relationships of the Group is
provided in Note 22.
2. Accounting policies
The principal accounting policies applied in the preparation of
these Financial Statements are set out below (Accounting Policies
or Policies). These Policies have been consistently applied to all
the periods presented, unless otherwise stated.
2.1. Basis of preparing the Financial Statements
The consolidated Financial Statements have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006. The Financial
Statements have also been prepared under the historical cost
convention, except as modified for assets and liabilities
recognised at fair value under business combinations and for
derivatives.
The Financial Statements are presented in Pounds Sterling
rounded to the nearest pound.
The preparation of Financial Statements in conformity with
UK-adopted international accounting standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
Accounting Policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the Financial Information are disclosed in Note
4.
a) Changes in Accounting Policies
i) New and amended standards adopted by the Group
As of 1 January 2021, the Company adopted IAS 1, IFRS 7, IFRS 9,
IAS 8 (amendments) definition of material, IFRS 3 (amendments)
business combinations and Amendments to References to the
Conceptual Framework in IFRS Standards, as well as Amendments to
Interest Rate Benchmark Reform in IFS Standards. The adoption of
these standards did not have a material impact on the financial
statements.
ii) New IFRS Standards and Interpretations not yet adopted
At the date on which these Financial Statements were authorised,
there were no Standards, Interpretations and Amendments which had
been issued but were not effective for the period ended 31 December
2021 that are expected to materially impact the Group's Financial
Statements.
iii) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 16 (amendments) Property, Plant and Equipment: 1 January 2022
Proceeds before Intended Use
---------------------------------- ---------------
IFRS 3 Reference to Conceptual Framework 1 January 2022
---------------------------------- ---------------
IAS 37 Onerous contracts 1 January 2022
---------------------------------- ---------------
IFRS Standards 2018-2020 annual improvement 1 January 2022
(amendments) cycle
---------------------------------- ---------------
IAS 8 Accounting estimates 1 January 2023
---------------------------------- ---------------
IAS 1 Classification of Liabilities 1 January 2023
as Current or Non-Current.
---------------------------------- ---------------
IFRS 17 Insurance Contracts 1 January 2023
---------------------------------- ---------------
The Group is evaluating the impact of the new and amended
standards above which are not expected to have a material impact on
the Group's results or shareholders' funds.
2.2. Basis of consolidation
The Consolidated Financial Statements consolidate the Financial
Statements of the Company and the accounts of all of its subsidiary
undertakings for all periods presented.
Subsidiaries are entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IAS 39 either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified
as equity is not re-measured, and its subsequent settlement is
accounted for within equity.
Investments in subsidiaries are accounted for at cost less
impairment.
Where considered appropriate, adjustments are made to the
financial information of subsidiaries to bring the accounting
policies used into line with those used by other members of the
Group. All intercompany transactions and balances between Group
enterprises are eliminated on consolidation.
2.3. Going concern
The consolidated Financial Statements have been prepared on a
going concern basis with a material uncertainty. The Directors
believe funds can continue to be raised from the capital markets to
support any working capital shortfalls. The Directors have a
reasonable expectation that the Group and Company will continue to
be able to raise finance as required and to continue in operational
existence for the foreseeable future. Thus, they continue to adopt
the going concern basis of accounting in preparing the Financial
Statements.
2.4. Foreign currencies
a) Functional and presentation currency
Items included in the Financial Statements are measured using
the currency of the primary economic environment in which the
entity operates (the functional currency). The Financial Statements
are presented in Pounds Sterling, rounded to the nearest pound,
which is the parent company's functional currency. For each entity,
the Group determines the functional currency and items included in
the financial statements of each entity are measured using that
functional currency. The Group uses the direct method of
consolidation and on disposal of a foreign operation, the gain or
loss that is reclassified to profit or loss reflects the amount
that arises from using this method.
b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where such items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the Income Statement. Foreign exchange gains and
losses that relate to borrowings and cash and cash equivalents are
presented in the Income Statement within 'finance income or costs.
All other foreign exchange gains and losses are presented in the
Income Statement within 'Other net gains/(losses)'.
Translation differences on non-monetary financial assets and
liabilities such as equities held at fair value through profit or
loss are recognised in profit or loss as part of the fair value
gain or loss. Translation differences on non-monetary financial
assets measured at fair value, such as equities classified as
available for sale, are included in other comprehensive income.
2.5. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is
the fair value of the consideration paid, less any impairment
provision. The financial statements of the subsidiary are prepared
for the same reporting period as the Group. When necessary,
adjustments are made to bring the accounting policies in line with
those of the Group.
2.6. Investments in associates
An associate is an entity over which the Group has significant
influence. Significant influence is the power to
participate in the financial and operating policy decisions of
the investee, but is not control or joint control
over those policies.
The considerations made in determining significant influence or
joint control are similar to those necessary to determine control
over subsidiaries. The Group's investment in its associate are
accounted for using the equity method.
Under the equity method, the investment in an associate is
initially recognised at cost. The carrying amount of the investment
is adjusted to recognise changes in the Group's share of net assets
of the associate since the acquisition date.
The statement of profit or loss reflects the Group's share of
the results of operations of the associate. Any change in OCI of
those investees is presented as part of the Group's OCI. In
addition, when there has been a change recognised directly in the
equity of the associate, the Group recognises its share of any
changes, when applicable, in the statement of changes in equity.
Unrealised gains and losses resulting from transactions between the
Group and the associate are eliminated to the extent of the
interest in the associate.
The financial statements of the associate are prepared for the
same reporting period as the Group. When necessary, adjustments are
made to bring the accounting policies in line with those of the
Group.
After application of the equity method, the Group determines
whether it is necessary to recognise an impairment loss on its
investment in its associate. At each reporting date, the Group
determines whether there is objective evidence that the investment
in the associate is impaired. If there is such evidence, the Group
calculates the amount of impairment as the difference between the
recoverable amount of the associate and its carrying value, and
then recognises the loss within 'Share of profit of an associate'
in the statement of profit or loss.
Upon loss of significant influence over the associate or joint
control over the joint venture, the Group measures and recognises
any retained investment at its fair value. Any difference between
the carrying amount of the associate upon loss of significant
influence or joint control and the fair value of the retained
investment and proceeds from disposal is recognised in profit or
loss.
2.7. Property, plant and equipment
Property, plant and equipment is stated at cost, less
accumulated depreciation and any accumulated impairment losses.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to the Income
Statement during the financial period in which they are
incurred.
Depreciation is provided on all property, plant and equipment to
write off the cost less estimated residual value of each asset over
its expected useful economic life on a declining balance basis at
the following annual rates:
Leasehold improvements 20%
Production equipment 15%
Office equipment 15%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposal are determined by comparing the
proceeds with the carrying amount and are recognised within 'Other
net gains/(losses)' in the Income Statement.
2.8. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and
are subject to an insignificant risk of changes in value.
2.9. Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
2.10. Reserves
Share Premium - the reserve for shares issued above the nominal
value. This also includes the cost of share issues that occurred
during the year.
Retained Earnings - the retained earnings reserve includes all
current and prior periods retained profit and losses.
Share option reserve - the reserve for share options which have
been granted by the Company.
Reserve acquisition reserve - represents a non-distributable
reserve arising on the acquisition of Apollon Formularies
Limited;
2.11. Trade payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method
2.12. Borrowings
Bank and other borrowings
Interest-bearing bank loans and overdrafts and other loans are
recognised initially at fair value less attributable transaction
costs. All borrowings are subsequently stated at amortised cost
with the difference between initial net proceeds and redemption
value recognised in the Income Statement over the period to
redemption on an effective interest basis.
2.13. Taxation
No current tax is yet payable in view of the losses to date.
Deferred tax is recognised for using the liability method in
respect of temporary differences arising from differences between
the carrying amount of assets and liabilities in the Group
Financial Statements and the corresponding tax bases used in the
computation of taxable profit. However, deferred tax liabilities
are not recognised if they arise from the initial recognition of
goodwill; deferred tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss.
In principal, deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets (including
those arising from investments in subsidiaries), are recognised to
the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised.
Deferred income tax assets are recognised on deductible
temporary differences arising from investments in subsidiaries only
to the extent that it is probable the temporary difference will
reverse in the future and there is sufficient taxable profit
available against which the temporary difference can be used.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in except where the Group is
able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred tax assets and
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Deferred tax is calculated at the tax rates (and laws) that have
been enacted or substantively enacted by the statement of financial
position date and are expected to apply to the period when the
deferred tax asset is realised or the deferred tax liability is
settled.
Deferred tax assets and liabilities are not discounted.
2.14. Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
or services supplied in course of ordinary business, stated net of
discounts, returns and value added taxes. The Group recognises
revenue in accordance with IFRS 15 at either a point in time or
over time, depending on the nature of the goods or services and
existence of acceptance clauses.
Revenue from the sale of goods is recognised when delivery has
taken place and the performance obligation of delivering the goods
has taken place. The performance obligation of products sold are
transferred according to the specific delivery terms that have been
formally agreed with the customer, generally upon delivery when the
bill of lading is signed as evidence that they have accepted the
product delivered to them.
Revenue from the provision of consultancy services is recognised
as the services are rendered, in accordance with customer
contractual terms.
2.15. Finance income and cost
Interest income and costs is recognised using the effective
interest method.
2.16. Financial assets and liabilities
Financial assets
On initial recognition, financial assets are recognised at fair
value and are subsequently classified and measured at: (i)
amortised cost; (ii) fair value through other comprehensive income
("FVOCI"); or (iii) fair value through profit or loss ("FVTPL").
The classification of financial assets is generally based on the
business model in which a financial asset is managed and its
contractual cash flow characteristics. A financial asset is
measured at fair value net of transaction costs that are directly
attributable to its acquisition except for financial assets at
FVTPL where transaction costs are expensed. All financial assets
not classified and measured at amortised cost or FVOCI, are
measured at FVTPL. On initial recognition of an equity instrument
that is not held for trading, the Company may irrevocably elect to
present subsequent changes in the investment's fair value in other
comprehensive income.
For a financial asset to be classified and measured at amortised
cost or fair value through OCI, it needs to give rise to cash flows
that are 'solely payments of principal and interest (SPPI)' on the
principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level. Financial assets
with cash flows that are not SPPI are classified and measured at
fair value through profit or loss, irrespective of the business
model. The classification determines the method by which the
financial assets are carried on the statement of financial position
subsequent to inception and how changes in value are recorded.
Impairment
An 'expected credit loss' impairment model applies which
requires a loss allowance to be recognised based on expected credit
losses. The estimated present value of future cash flows associated
with the asset is determined and an impairment loss is recognised
for the difference between this amount and the carrying amount as
follows: the carrying amount of the asset is reduced to estimated
present value of the future cash flows associated with the asset,
discounted at the financial asset's original effective interest
rate, either directly or through the use of an allowance account
and the resulting loss is recognised in profit or loss for the
period.
In a subsequent period, if the amount of the impairment loss
related to financial assets measured at amortised cost decreases,
the previously recognised impairment loss is reversed through
profit or loss to the extent that the carrying amount of the
investment at the date the impairment is reversed does not exceed
what the amortised cost would have been had the impairment not been
recognised.
Financial liabilities
Financial liabilities are designated as either: (i) FVTPL; or
(ii) other financial liabilities. All financial liabilities are
classified and subsequently measured at amortised cost except for
financial liabilities at FVTPL. The classification determines the
method by which the financial liabilities are carried on the
statement of financial position subsequent to inception and how
changes in value are recorded. Accounts payable and accrued
liabilities is classified as other financial liabilities and
carried on the statement of financial position at amortised
cost.
Derivatives which are financial liabilities are initially
recognised at fair value and are subsequently remeasured at fair
value at each year-end prior to settlement. The movements in fair
value in each period is recognised within other net gains/(losses)
in the Consolidated Statement of Comprehensive Income.
2.17. Goodwill
Goodwill arises on the acquisition of subsidiaries and
associates and represents the excess of the consideration
transferred and the acquisition date fair value of any previous
equity interest in the acquiree over the fair value of the net
identifiable assets, liabilities and contingent liabilities of the
acquiree. If the total of consideration transferred,
non-controlling interest recognised and previously held interest
measured at fair value is less than the fair value of the net
assets of the subsidiary acquired, in the case of a bargain
purchase, the difference is recognised directly in the Income
Statement.
For the purpose of impairment testing, goodwill acquired in a
business combination or reverse takeover is allocated to each of
the cash-generating units, or groups of cash-generating units, that
are expected to benefit from the synergies of the combination. Each
unit or group of units to which the goodwill is allocated
represents the lowest level within the entity at which the goodwill
is monitored for internal management purposes. Goodwill is
monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually, or more
frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of goodwill is compared to
the recoverable amount, which is the higher of value in use and the
fair value less costs to sell. Any impairment is recognised
immediately as an expense and is not subsequently reversed.
3. Financial risk management
3.1. Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk, credit risk and liquidity risk. The Group's
overall risk management programme focuses on the unpredictability
of financial markets and seeks to minimise potential adverse
effects on the Group's financial performance.
Risk management is carried out by the management team under
policies approved by the Board of Directors.
a) Market Risk
The Group is exposed to market risk, primarily relating to
interest rate and foreign exchange. The Group has not sensitised
the figures for fluctuations in interest rates and foreign exchange
as the Directors are of the opinion that these fluctuations would
not have a significant impact on the Financial Statements at the
present time. The Directors will continue to assess the effect of
movements in market risks on the Group's financial operations and
initiate suitable risk management measures where necessary.
b) Credit Risk
Credit risk arises from cash and cash equivalents as well as
exposure to customers including outstanding receivables. To manage
this risk, the Group periodically assesses the financial
reliability of customers and counterparties .
No credit limits were exceeded during the period, and management
does not expect any losses from non-performance by these
counterparties.
c) Liquidity Risk
The Group 's continued future operations depend on the ability
to raise sufficient working capital through the issue of equity
share capital or debt. The Directors are reasonably confident that
adequate funding will be forthcoming with which to finance
operations. Controls over expenditure are carefully managed.
3.2. Capital risk management
The Group 's objectives when managing capital are to safeguard
the Group 's ability to continue as a going concern, in order to
enable the Group to continue its investment activities, and to
maintain an optimal capital structure to reduce the cost of
capital.
In order to maintain or adjust the capital structure, the Group
may adjust the issue of shares or sell assets to reduce debts.
The Group defines capital based on the total equity of the
Company. The Group monitors its level of cash resources available
against future planned operational activities and the Company may
issue new shares in order to raise further funds from time to
time.
4. Critical accounting estimates
The preparation of the Financial Statements in conformity with
IFRSs requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
Financial Statements and the reported amount of expenses during the
year. Actual results may vary from the estimates used to produce
these Financial Statements.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. Actual results may vary from the estimates used to
produce these Financial Statements and the key estimates and
judgements are described below:
Going concern
The preparation of financial statements requires an assessment
on the validity of the going concern assumption. The Directors have
reviewed projections for a period of at least 12 months from the
date of approval of the financial statements as well as potential
opportunities. Any potential short falls in funding have been
identified and the steps to which Directors are able to mitigate
such scenarios and/or defer or curtail discretionary expenditures
should these be required have been considered.
In approving the financial statements, the Board have recognised
that these circumstances create a level of uncertainty. However,
having made enquiries and considered the uncertainties outlined
above, the Directors have a reasonable expectation that the Group
will continue to be able to raise finance as required over this
period to enable it to continue in operation and existence for the
foreseeable future. Accordingly, the Board believes it is
appropriate to adopt the going concern basis in the preparation of
the financial statements.
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment. Assets that
are subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an
asset's fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows
(cash-generating units). Non-financial assets that suffered an
impairment are reviewed for possible reversal of the impairment at
each reporting date.
Share based payments
The Company may grant stock options to acquire common shares of
the Company to Directors, Officers, employees and consultants. An
individual is classified as an employee when the individual is an
employee for legal or tax purposes or provides services similar to
those performed by an employee.
The fair value of stock options is measured on the date of
grant, using the Black-Scholes option pricing model, and is
recognized over the vesting period. Consideration paid for the
shares on the exercise of stock options is credited to share
capital. In situations where equity instruments are issued to
non-employees and some or all of the goods or services received by
the entity as consideration cannot be specifically identified, they
are measured at fair value of the share-based payment. Otherwise,
share-based payments are measured at the fair value of goods or
services received.
Reverse takeover accounting
When considering how the acquisition of Apollon Formularies
Limited via a reverse takeover should be accounted for, the
Directors have been required to make a judgment on whether the
acquisition falls within the scope of IFRS 3 or not. The directors
assessed the accounting acquiree, Apollon Formularies Plc, at the
time of acquisition to not be a business as defined by IFRS 3. As a
result, the acquisition was assessed as falling outside the scope
of IFRS 3. Refer to Note 24 for commentary on how the reverse
takeover was accounted for.
5. Dividends
No dividend has been declared or paid by the Group during the
year ended 31 December 2021 (31 December 2020: GBPNil).
6. Revenue from contracts with customers
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2021 2020
GBP GBP
--------------------- ------------ ------------
Consultancy services 197,671 -
197,671 -
------------ ------------
Consultancy services were provided to Apollon Formularies
Jamaica Limited, an associate of the Group.
7. Administrative Expenses
Group
--------------------------
For the For the
year end year end
31 December 31 December
2021 2020
GBP GBP
------------------------------ ------------ ------------
Directors' salaries 222,222 -
Directors' benefits 31,747
Employee salaries and wages 54,571 -
Audit 46,500 -
Accountancy 3,700 -
Exchange fees 22,553 -
Consulting and professional 388,708 53,293
Insurance 45,502 -
Office and administration 19,743 982
Travel and entertainment 17,263 -
Share based payments 85,363 -
Advertising and marketing 11,548 -
Other 9,992 1,870
------------ ------------
Total administrative expenses 959,412 56,145
------------ ------------
During the year the Group (including its subsidiaries) obtained
the following services from the Company's auditors and its
associates:
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2021 2020
GBP GBP
----------------------------------------------- ------------ ------------
Fees payable to the Company's auditor
and its associates for the audit of the
Company and Consolidated Financial Statements 46,500 -
46,500 -
------------ ------------
8. Other net gains/(losses)
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2021 2020
GBP GBP
------------------------------------- ------------ ------------
Loss of CBev option and loan (218,910) -
Gain on debt settlement of Directors
fees 11,239 -
Other losses (33,673) -
--------------------------------------- ------------ ------------
(241,344) -
------------ ------------
During the year the right to purchase option to acquire CBev
Ventures Inc was allowed to expire and subsequently the receivable
was written off.
9. Finance Costs
Group
----------------------------
For the For the
year ended year ended
31 December 31 December
2021 2020
GBP GBP
------------------ ------------ ------------
Interest on loans 3,799 2,427
3,799 2,427
------------ ------------
10. Employee benefits expense
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2021 2020
GBP GBP
------------------------------------ ------- ----- ------------ --------------
Salaries and wages 46,889 -
Social security contributions and
similar taxes 6,937 -
Other employment costs 745 -
54,571 -
------------ --------------
11. Directors' remuneration
At at 31 December 2020
------------- ---------------------------
For the
Fees Written year ended
and Salaries off Salary 31 December
GBP Payments 2020
GBP GBP
----------------------- ------------- ----------- ------------
David Lenigas - (179,000) (179,000)
Donald Strang 10,000 (95,000) (85,000)
Hamish Harris 10,000 (130,000) (120,000)
------------- -----------
20,000 (404,000) (384,000)
------------- ----------- ------------
At at 31 December 2021
------------- ------------------------
Fees Benefits For the
and Salaries in kind year ended
GBP 31 December
2021
GBP GBP
----------------------- ------------- -------- ------------
Nicholas Ingrassia 9,478 - 9,478
Stephen Barnhill 195,097 31,747 226,844
Nicholas Barnhill 9,000 - 9,000
Kevin Sheil 8,647 - 8,647
------------- --------
222,222 - 253,969
------------- -------- ------------
Nicholas Ingrassia's fees for the period, totalling GBP9,478,
have been accrued and remain unpaid as at 31 December 2021.
Stephen Barnhill's fees and benefits in kind are paid to Apollon
Formularies Inc of which Stephen Barnhill is the sole director.
Notwithstanding a fee of GBP195,097 was paid for the year ended 31
December 2021 to Apollon Formularies Inc are for the services of
two Executives being a Chief Executive Officer (Stephen Barnhill
Snr) and the Chief Operating Officer (Stephen Barnhill Jnr). A
further GBP41,868 was paid to Apollon Formularies Inc for health
insurance costs.
Nicholas Barnhill fees are paid via Apollon Formularies Inc.
David Lenigas, Donald Strang and Hamish Harris resigned on the
date of completion of the reverse take-over of the Company, 12
April 2021. Stephen Barnhill, Nicholas Barnhill, Nicholas Ingrassia
and Kevin Sheil were appointed on 12 April 2021.
12. Taxation
For the For the
year end year end
31 December 31 December
2021 2020
GBP GBP
---------------------------------------------------- ------------ ------------
Total Current tax - -
Total tax in the Income Statement - credit/(expense) - -
------------ ------------
The tax charges for the period use the standard rate applicable
in the Isle of Man of 0% (2020- 0%).
For the For the
year end year end
31 December 31 December
2021 2020
GBP GBP
--------------------------------------- ------------ ------------
Profit/(loss) on ordinary activities
before tax (2,530,556) 330,942
Tax on loss on ordinary activities at
standard CT rate of 0% - -
------------ ------------
Profit/(Losses) arising in territories
where no tax is charged (2,530,556) 330,942
------------ ------------
13. Trade and other receivables
Current:
Group Company
---------------------------- --------------------------------
For the For the For the year For the
year end year end end 31 December year end
31 December 31 December 2021 31 December
2021 2020 2020
------------- ------------- ----------------- -------------
GBP GBP GBP GBP
Trade receivables 197,671 - 197,671 673
Prepayments 6,604 - 6,604 8,331
VAT receivables 120,429 21,946 96,483 -
Other receivables 35,953 218,911 35,702 -
------------- ------------- ----------------- -------------
360,657 240,857 336,460 9,004
------------- ------------- ----------------- -------------
14. Cash and cash equivalents
Group Company
---------------------------------- ----------------------------------
For the year For the year For the year For the year
end 31 December end 31 December end 31 December end 31 December
2021 2020 2021 2020
---------------- ---------------- ---------------- ----------------
GBP GBP GBP GBP
Cash at bank and on
hand 304,986 2,369 202,133 12,162
---------------- ---------------- ---------------- ----------------
304,986 2,369 202,133 12,162
---------------- ---------------- ---------------- ----------------
The carrying amounts of the Group's cash and cash equivalents
are denominated in pounds sterling.
15. Trade and other payables
Current: Group Company
---------------------------------- ----------------------------------
For the year For the year For the year For the year
end 31 December end 31 December end 31 December end 31 December
2021 2020 2021 2020
---------------- ---------------- ---------------- ----------------
GBP GBP GBP GBP
Trade payables 32,269 1,298 32,238 10,388
Accrued liabilities 50,747 - 50,747 -
Directors Loan - 32,289 - -
Tax and payroll - - - 1,266
Other creditors - 51,635 - 85,000
---------------- ---------------- ---------------- ----------------
83,016 85,222 82,985 96,654
---------------- ---------------- ---------------- ----------------
The carrying amounts of the Group's trade and other payables are
denominated in pounds sterling.
16. Financial instruments by category
For the year end
Consolidated 31 December 2021
---------------------
At amortised
cost Total
Assets per Statement GBP GBP
---------------------------------------------------- ------------ ---------
Trade and other receivables (excluding prepayments) 354,053 354,053
Cash and cash equivalents 304,986 304,986
------------ -------
659,039 659,039
------------ -------
At amortised
cost Total
Liabilities per Statement GBP GBP
---------------------------------------------------- ------------ -------
Trade and other payables (excluding non-financial
liabilities) 32,289 32,289
------------ -------
32,289 32,289
------------ -------
For the year end
Company 31 December 2021
---------------------------
At amortised
cost Total
Assets per Statement GBP GBP
---------------------------------------------------- ---------------- ---------
Trade and other receivables (excluding prepayments) 329,856 329,856
Cash and cash equivalents 202,133 202,133
---------------- ---------
531,989 531,989
---------------- ---------
At amortised
cost Total
Liabilities per Statement GBP GBP
---------------------------------------------------- ---------------- ---------
Borrowings (excluding finance leases) - -
Trade and other payables (excluding non-financial
liabilities) 32,238 32,238
---------------- ---------
32,238 32,238
---------------- ---------
The Company's financial instruments comprise cash at bank and
payables which arise in the normal course of business. It is, and
has been throughout the period under review, the Company's policy
that no speculative trading in financial instruments shall be
undertaken. The Company has been solely equity funded during the
period. As a result, the main risk arising from the Company's
financial instruments is currency risk. The Company's financial
instruments are held at fair value through profit or loss.
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in Note 2 of the
accounts.
Interest rate risk and liquidity risk
As the Company has no borrowings, it only has limited interest
rate risk. The impact is on income and operating cash flow and
arises from changes in market interest rates. Cash resources are
held in current, floating rate accounts.
Currency risk
The Directors consider that there is no significant currency
risk faced by the Company. The Company is denominated in pound
sterling. Apollon Formularies Jamaica, has currency exposure to
Jamaican dollars. As the interest in this entity is 49% this is not
considered a significant risk to the Company.
Fair values
Cash and cash equivalents (which are presented as a single class
of assets on the face of the balance sheet) comprise cash held by
the company with an original maturity of three months or less. The
carrying amount of these assets approximates their fair value.
The directors consider there to be no material difference
between the book value of financial instruments and their values at
the balance sheet date.
17. Share capital and share premium
Number of shares Share capital Share premium Total
--------------------------- ---------------- ------------- ------------- -----------
GBP GBP GBP
Issued and fully
paid
As at 31 December
2019 31,360,011 17,309 3,861,592 3,878,901
--------------------------- ---------------- ------------- ------------- -----------
Issue of Shares 350,000 35 48,965 49,000
--------------------------- ---------------- ------------- ------------- -----------
As at 31 December
2020 31,710,011 17,344 3,910,557 3,927,901
--------------------------- ---------------- ------------- ------------- -----------
Transfer to reverse
acquisition reserve (31,710,011) (17,344) (3,910,557) (3,927,901)
Recognition of AfriAg
plc equity at acquisition
date 31,710,011 - 11,704,388 11,704,388
13 April 2021 -
Investment in Apollon
Limited 666,666,666 - 40,000,000 40,000,000
14 April 2021 50,000,000 - 2,500,000 2,500,000
Cost of capital - - (153,624) (153,624)
--------------------------- ---------------- ------------- ------------- -----------
As at 31 December
2021 748,376,677 - 54,050,764 54,050,764
--------------------------- ---------------- ------------- ------------- -----------
On 27 November 2019 at a General Meeting of the AfriAg plc it
was approved that the Ordinary Shares were consolidated to new
Ordinary Shares with no par value. Therefore the share capital
balance at 31 December 2021 is nil. Due to the reverse takeover,
the share capital comparative stated in 2019 and 2020 is that of
Apollon Formularies Limited.
On 13 April 2021, the proposed reverse takeover of Apollon
Formularies Limited had completed. The Company acquired the full
share capital of Apollon Formularies Limited via the issuance of
666,666,666 shares based on 3.95 consideration shares being issued
for every 1 ordinary share in Apollon Formularies Limited. The
acquisition constitutes a reverse acquisition as the shareholders
of Apollon Formularies Limited will acquire control of Apollon
Formularies Plc (formerly AfriAg Global plc).
On 13 April 2021, the Company issued 50,000,000 Ordinary Shares
at a price of 5 pence per share raising a total of GBP2,500,000
18. Share Option Reserve
Share options and warrants
Share options and warrants outstanding and exercisable at the
end of the period have the following expiry dates and exercise
prices:
Vesting date Expiry date Exercise price 31 December 31 December
GBP 2021 2020
-------------- ------------- --------------- ------------ ------------
13/04/2021 13/04/2026 0.055 4,000,000 -
-------------- ------------- --------------- ------------ ------------
The Company and Group have no legal or constructive obligation
to settle or repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined
using the Black Scholes valuation model. The parameters used are
detailed below:
2021 Warrants
--------------
Granted on: 13/04/2021
Life (years) 5 years
Exercise price (pence
per share) 5.5 p
Risk free rate 1.56%
Expected volatility 24.40%
Expected dividend -
yield
Marketability discount 20%
Total fair value (GBP000) 85,363
The expected volatility of the 2021 warrants has been calculated
based on volatility for the six month period post the date of grant
due to unavailability of data. The risk-free rate of return is
based on zero yield government bonds for a term consistent with the
warrant life. A reconciliation of warrants granted over the period
to 31 December 2021 is shown below:
31 December 2021 31 December 2020
------------------------- ----------------------
Weighted Weighted
average average
exercise exercise
Number price (GBP) Number price (GBP)
-------------------------- ---------- ------------- ------- -------------
Outstanding at beginning - - - -
of period
Granted 4,000,000 0.055 - -
Outstanding as at period
end 4,000,000 0.055 - -
-------------------------- ---------- ------------- ------- -------------
Exercisable at period
end 4,000,000 0.055 - -
-------------------------- ---------- ------------- ------- -------------
31 December 2021 31 December 2020
-------------------------------------------------- --------------------------------------------------
Weighted Weighted Weighted Weighted
Weighted average average Weighted average average
Range average remaining remaining average remaining remaining
of exercise exercise life life exercise life life
prices price Number expected contracted price Number expected contracted
(GBP) (GBP) of shares (years) (years) (GBP) of shares (years) (years)
-------------- ---------- ----------- ----------- ------------ ---------- ----------- ----------- ------------
0.05 -
0.15 0.055 4,000,000 4.2 4.2 - - - -
-------------- ---------- ----------- ----------- ------------ ---------- ----------- ----------- ------------
During the period there was a charge of GBP85,363 (31 December
2020: GBPNil) in respect of and warrants.
19. Earnings per share
For the period ended 31 December 2021, the calculation of the
total basic loss per share of (0.462) pence is calculated by
dividing the loss attributable to shareholders of GBP2,530,556 by
the weighted average number of ordinary shares of 548,102,705 in
issue during the period.
20. Fair Value of Financial Assets and Liabilities Measured at Amortised Costs
Financial assets and liabilities comprise the following:
-- Trade and other receivables
-- Cash and cash equivalents
-- Trade and other payables
The fair values of these items equate to their carrying values
as at the reporting date .
21. Capital Commitments and Contingencies
The Group is not aware of any material personal injury or damage
claims open against the Group. There are no non-cancellable capital
commitments as at the balance sheet date. The Company has no
contingent liabilities at the balance sheet date.
22. Related party transactions
Loan from Apollon Formularies Plc to Apollon Formularies
Limited
As at 31 December 2021 there were amounts receivable of
GBP202,023 from Apollon Formularies Limited.
All intra Group transactions are eliminated on
consolidation.
Loan from Apollon Formularies Plc to Apollon Formularies Jamaica
Ltd
As at 31 December 2021 there were amounts receivable of
GBP402,189 from Apollon Formularies Jamaica.
Loan from Apollon Formularies Limited to Apollon Formularies
Jamaica Ltd
As at 31 December 2021 there were amounts receivable of
GBP1,813.705 from Apollon Formularies Jamaica Ltd.
Loan from Apollon Formularies Plc to Docs Place International
Inc
As at 31 December 2021 there were amounts receivable of
GBP20,383 from Docs Place International Inc. Docs Place
International Inc shares a common director being Stephen
Barnhill.
Other transactions
Apollon Formularies Inc a company of which Stephen Barnhill is a
director, was paid a fee of GBP195,097 for the services of two
Executives being a Chief Executive Officer (Stephen Barnhill Snr)
and the Chief Operating Officer (Stephen Barnhill Jnr).
Nicholas Barnhill's fees of GBP9,000 for the year ended 31
December 2021 were paid via Apollon Formularies Inc.
23. Investments in subsidiary undertakings
Company
31 December
2021
GBP
------------------------------ -------------
Shares in Group Undertakings
At beginning of period 1,160,000
Investment during period 40,000,000
------------------------------ -------------
At end of period 41,160,000
------------------------------ -------------
Loans to Group Undertakings
------------------------------ -------------
At beginning of period -
------------------------------ -------------
Loan during period 202,023
------------------------------ -------------
At end of period 202,023
------------------------------ -------------
Total 41,362,023
------------------------------ -------------
Investments in Group undertakings are stated at cost, which is
the fair value of the consideration paid, less any impairment
provision. Investments and loans to subsidiaries are eliminated
upon consolidation.
In the prior year, Shares in Group undertakings were classified
as a Level 3 Financial Investment with this being reclassified due
to the acquisition of Apollon Formularies Limited. Refer to Note
24.
Proportion
Country Proportion of ordinary
of incorporation of ordinary shares held
and place shares held by the Group
Name of subsidiary of business by parent (%) (%) Nature of business
--------------------- ------------------- --------------- -------------- -------------------
Apollon Formularies England Medical cannabis
Ltd & Wales 100% 100% pharmaceutical
Apollon Formularies Ltd holds a 49% indirect interest in Apollon
Formularies Jamaica Ltd.
24. Reverse Acquisition
On 13 April 2021 the Group acquired 100% of the share capital of
Apollon Formularies Limited (the 'Legal Subsidiary') for
666,666,666 Consideration Shares at a deemed valuation of 6 pence
per share, valuing the Company at GBP40,000,000, in addition to an
investment of GBP1,160,000 already held in Apollon Formularies
Limited. Through this acquisition of the Legal Subsidiary, the
Group acquired a 49% interest in Apollon Formularies Jamaica
Limited ("Apollon Jamaica") a company incorporated in Jamaica. As a
result of the acquisition the Group will be able to conduct
operations in the medicinal cannabis pharmaceutical sector.
The acquisition has been treated as a reverse acquisition and
hence accounted for in accordance with IFRS 2. Although the
transaction resulted in Apollon Formularies Limited becoming a
wholly owned subsidiary of the Company, the transaction constitutes
a reverse acquisition as the previous shareholders of Apollon
Formularies Limited own a substantial majority of the Ordinary
Shares of the Company and the executive management of Apollon
Formularies Limited became the executive management of Apollon
Formularies Plc. In substance, the shareholders of Apollon
Formularies Limited acquired a controlling interest in the Company
and the transaction has therefore been accounted for as a reverse
acquisition. The reverse acquisition falls under IFRS 2 rather than
IFRS 3 as the activities of Apollon Formularies plc (previously
AfriAg plc and the 'Legal Parent') do not constitute a
business.
The following table summarises the consideration paid for the
Legal Parent through the reverse acquisition and the amounts of the
assets acquired and liabilities assumed on the acquisition date.
The financial comparatives relate to Legal Subsidiary rather than
the Legal Parent as the consolidated financial statements represent
a continuation of the financial statements of the Legal
Subsidiary.
In accordance with IFRS 2, the value of obtaining the listing
under a reverse acquisition is calculated on the net assets of the
legal parent. The share based payment of GBP1,332,464 arising from
the acquisition is attributable to the value of the parent company
being an AQSE listed entity to the Legal Subsidiary.
Consideration at 13 April 2021 GBP
-------------------------------------------------------- ---------
Equity instruments in issue (31,710,011 ordinary shares
GBP0.06 each) 1,902,600
Total consideration 1,902,600
-------------------------------------------------------- ---------
Recognise amounts of identifiable assets acquired
and liabilities assumed
Cash and cash equivalents 17,542
Trade and other receivables 1,163,047
Trade and other payables (610,452)
-------------------------------------------------------- ---------
Total identified net assets 570,136
-------------------------------------------------------- ---------
Share based payment for obtaining listing 1,332,464
-------------------------------------------------------- ---------
In a reverse acquisition the acquisition date fair value of the
consideration transferred by the Legal Subsidiary is based on the
number of equity instruments that the Legal Subsidiary would have
had to issue to the owners of the Legal Parent to give the owners
of the Legal Parent the same percentage of equity interests that
results from the reverse acquisition. However, in the absence of a
reliable valuation of the Legal Subsidiary, the cost of the reverse
acquisition was calculated using the fair value of all the
pre-acquisition issued equity instruments of the Legal Parent as at
the date of the acquisition. The fair value was based on the
published price of the Legal Parent shares immediately prior to the
acquisition being GBP0.06 per share.
Acquisition related costs of GBP437,667 were recognised in the
Legal Parent's profit or loss. These costs were incurred prior to
the date of the acquisition and have therefore been eliminated on
consolidation along with other pre-acquisition losses in the Legal
Parent in accordance with the requirements of IFRS 2.
The fair values of the recognised amounts of identifiable assets
acquired and liabilities assumed equate to their carrying values as
stated above.
The Legal Parent did not contribute any revenue to the Group
since the acquisition on 13 April 2021. The Group statement of
comprehensive income includes an operating loss of GBP2,530,556 in
the period since acquisition, which is attributable to the Legal
Parent. Had the Legal Parent been consolidated from 1 January 2021,
the consolidated statement of comprehensive income would show
revenue of GBPnil and a loss of GBP3,014,420.
The following table summarises the movements in the Reverse
Acquisition Reserve for the period
GBP
--------------------------------------------- -------------
Opening balance -
Investment in Legal Subsidiary (41,160,000)
Elimination of Legal Parent share capital 3,927,901
Share based payment 1,332,464
Transfer of pre-acquisition retained losses (11,130,750)
--------------------------------------------- -------------
(47,030,385)
--------------------------------------------- -------------
25. Associate
On 28 September 2018, the Legal Subsidiary acquired a right to
receive a 49% equity interest in Apollon Formularies Jamaica
Limited ("Apollon Jamaica"), a company incorporated in Jamaica,
upon approval by the Cannabis Licensing Authority (CLA) of Jamaica
for Company to so own such equity in a medically licensed cannabis
company. In the interim, the Company entered into a contract with
Apollon Jamaica whereby the Company receives 95% of the net profits
of Apollon Jamaica. The Legal Subsidiary also entered into a
contract with its shareholder, Stephen D. Barnhill, M.D., who is
the person presently recognised as the owner of such 49% equity
interest in Apollon Jamaica, that he: (i) pledges to assign such
equity to Company upon CLA approval of Company being an owner, (ii)
commits to vote the equity he holds in Apollon Jamaica in
accordance with such assignment obligation to the extent permitted
by law, and (iii) will participate as a director of Apollon Jamaica
and act when voting in a way that is consistent with such equity
commitments to the Company to the extent permitted by law.
Apollon Jamaica is accounted for as an associate because the
Legal Subsidiary has significant influence over it, has a
representative serving as a director who participates in its
policy-making process, and has engaged in material transactions
with it that includes loans and a right to receive 95% of its
profits. These factors have been determined to be sufficient to
meet the requirements of IAS 28 even though the Company does not
presently own any equity in Apollon Jamaica and, once it does, will
only receive a 49% share of the return on investment (which will
come from the 5% net income) and only have 49% voting rights. As an
associate, Apollon Jamaica is accounted for on an equity accounting
basis.
The carrying value of the investment in the associate is
determined as follows:
31 December 31 December
2021 2020
GBP GBP
---------------------------- ------------ ------------
Opening balance 2,157,310 2,304,520
Share of loss in associate (197,931) (235,745)
Loans granted 402,189 291,288
Foreign exchange 18,413 (202,753)
---------------------------- ------------ ------------
Closing balance 2,379,981 2,157,310
---------------------------- ------------ ------------
The Company's share of Apollon Jamaica result for the year was a
loss of GBP197,931 (2020: loss of GBP235,745) of a total loss of
GBP403,941 (2020: total loss of GBP481,112).
The associate had no contingent liabilities or capital
commitments as at 31 December 2021 and 2020.
The following table illustrated the summarised financial
information of Apollon Formularies Jamaica Limited at 31 December
2021.
31 December
2021
GBP
------------------------- ------------
Current assets 24,893
Non-current assets 2,441
Current liabilities -
Non-current liabilities 402,189
Equity 374,854
------------------------- ------------
31 December
2021
GBP
------------------------- ------------
Revenue 13,958
Cost of sales (6,568)
Administrative expenses (411,330)
Loss before tax (403,941)
------------------------- ------------
26. Ultimate Controlling Party
The Directors believe there is no ultimate controlling
party.
27. Events After the Reporting Date
On 2 March 2022, the Company announced an agreement with
Tri-Medi Canna Pty Ltd to enter in a Joint Venture. As part of this
agreement Tri-Medi Canna will become a shareholder in Apollon via
share subscription totalling GBP300,000 over two tranches, the
first of which will be for GBP150,000 at 2.5p per share
On 17 June 2022, the Company issued 4,348,679 new Ordinary
Shares of the Company for a price of GBP0.0625 per share for a
total of GBP288,099 as consideration for the acquisition of
intellectual property from Aion Therapeutics Inc.
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END
NEXSDWFISEESEEM
(END) Dow Jones Newswires
June 30, 2022 11:29 ET (15:29 GMT)
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