TIDMAPOL
RNS Number : 6301E
Apollon Formularies plc
30 June 2023
30 June 2023
Apollon Formularies Plc
Final Results for the Year Ended 31 December 2022
Apollon Formularies plc (AQSE: APOL, "Apollon" or the "Company")
, a UK based international pharmaceutical company trading on the
Aquis Stock Exchange, that is licenced to research, develop,
process, and sell medical cannabis therapeutic products that
include legal medical cannabis to treat various illnesses under
medical supervision, is pleased to announce its Final Results for
the year ended 31 December 2022 (the 'Period').
Chairman's Report
Dear Shareholders,
I am pleased to present the Chairman's statement for Apollon
Formularies plc for the year ended 31 December 2022. This has been
a transformative year for the Group as we continued to make
significant progress in our natural biologic drug discovery efforts
identifying active pharmaceutical ingredients ("APIs") from natural
sources found in nature and commercialising these products
globally.
In keeping with our mission to develop pharmaceutical grade
natural product therapeutic formulations, we have expanded our drug
discovery efforts to now include functional mushrooms. In addition
to our successful API discoveries with medical cannabis, our
efforts have now demonstrated that combining APIs from medical
cannabis with APIs found in functional mushrooms have proven to be
synergistically beneficial in killing cancer cells in our
independent third-party pre-clinical testing.
We hope that Apollon formulations will improve the lives of
patients around the world where the Group has now expanded its
reach through recent exclusive intellectual property licence
agreements in the US, Canada, Mexico, Israel, and the European
Union with extension to Morocco and South Africa.
Over the past year, we have made significant strides in
advancing our product pipeline and strengthening our market
position. I would like to highlight some of the key
achievements:
Market Expansion
We have signed exclusive intellectual property licence
agreements for manufacturing, distribution, and sale of Apollon
products in the US, Canada, Mexico, Israel, the European Union with
extension to Morocco and South Africa. These exclusive licences and
strategic collaborations have enabled us to extend the reach of our
product line and tap into new patient populations, which should
drive revenue growth, including royalties on products sold, and
diversify our future revenue streams.
Intellectual Property
In May 2022, Apollon announced that it had purchased certain
intellectual property from Aion Therapeutic Inc ("the Agreement").
Under the terms of the Agreement, Apollon acquired the following
patent applications and all associated supporting data including
the pre-clinical testing results from BIOENSIS:
1. Compositions and Methods for Treatment of Cancers.
2. Compositions and Methods for Treatment of Inflammation.
3. Methods for Treatment of Human Cancers using Mushroom Compositions.
4. Methods for Treatment of Human Cancers using Cannabis Compositions.
Since acquiring these patent applications, Apollon has advanced
the patent applications by filing National Phase applications in
the following territories: the US, Canada, Mexico, Israel, and the
European Union with extension to Morocco and South Africa. The
Group also has patent applications pending in Jamaica, which were
filed separately as Jamaica is not part of the Patent Cooperation
Treaty ("PCT").
These national phase patent applications are the subject of the
recently signed exclusive licences, which included upfront payments
and ongoing royalties, for the protected territories.
Commercial Acquisition
In mid-2022 we were pleased to announce the acquisition of
Citiva Jamaica, originally founded by Josh Stanley, Co-Founder of
Charlotte's Web. This purchase gives Apollon ownership of a world
class research, cultivation, manufacturing, and processing
facility, affiliated with and located in the Medical School of the
University of West Indies ("UWI") campus. The acquisition delivers
on Apollon's previously stated desire to become a vertically
integrated, globally recognised natural biologic drug discovery
business providing treatments and medicines for various human
afflictions with a specific focus on cancer.
We are in the process of completing GMP certification at UWI,
Faculty of Medicine facility. Once this GMP certification has been
achieved the Group expects to ramp up production of its
high-quality natural biologic medical products. These medical
products will continue to be distributed locally, in Jamaica, as
well as in the broader Caribbean Community and the South African
Development community via export sales as well as other markets
currently experiencing high demand for natural biologic medicinal
products. These products could be shipped to any countries where
the APIs are legal.
Global Hemp Group
It was pleasing to announce post the financial period that
Apollon had executed a binding Letter of Intent ("LOI") with Global
Hemp Group ("GHG"), a publicly traded company on the Canadian Stock
Exchange, for an exclusive licence to products covered by four of
Apollon's patent applications in North America. Subsequent to the
signing of the LOI, this exclusive licence agreement was extended
to include the European Union with further extension to Morocco and
Israel.
The exclusive licencing agreement was completed, and Apollon
received a total of US$250,000 (C$341,000) in two distinct tranches
from GHG and were issued 10 million common shares of GHG at a
deemed price of C$0.015 per share, for total consideration of
C$491,000.
In addition to the granting of the exclusive licence, the LOI
allowed GHG to enter a due diligence period in which GHG would have
the option to acquire all the assets of Apollon Formularies plc
other than cash, cash equivalents, and receivables, for a payment
of 771,191,266 GHG common shares at a deemed price of $0.015 per
GHG common share, for total consideration of C$11,567,869. The
initial due diligence period was extended, and we wait for GHG's
final decision.
Legal and Ethical Commitment
At Apollon Formularies, we are committed to operating with the
highest standards of regulatory compliance and sustainability. We
continue to prioritise adherence to all relevant laws and
regulations governing our industry. Our strong commitment to
ethical practices and patient safety has further strengthened our
reputation and trust amongst healthcare professionals and
regulatory bodies.
Outlook
Looking ahead, we are optimistic about the future of Apollon
Formularies. We remain committed to advancing our pipeline of
innovative natural biologic products, expanding our global
footprint, and delivering sustainable long-term growth. We continue
to invest in research and development, patent protecting our
discoveries, and leveraging cutting-edge artificial intelligence
technologies and scientific advancements to develop breakthrough
therapies that address unmet medical needs.
We are excited to have completed and filed the necessary
national phase patent application through the PCT in the following
territories: the US, Canada, Mexico, Israel, and the European Union
with extension to Morocco and South Africa. The Group also has
patent applications pending in Jamaica. These patent applications
have resulted in significant upfront licencing fees and should
continue to provide revenue to Apollon through product royalties.
We continue to negotiate with additional potential licencees for
additional expansion of our intellectual property rights and
product sales globally.
We also look forward to the final decision from GHG on its due
diligence.
We recognise that our success is driven by our people, and we
have made significant investments in attracting and retaining top
talent. Our team comprises experienced professionals who bring
diverse expertise and perspectives to the Group, enabling us to
maintain a competitive edge in the rapidly evolving natural
biologic pharmaceutical industry.
Furthermore, we will maintain a disciplined approach to cost
management while ensuring that we allocate resources strategically
to support our growth initiatives. We are confident that our robust
business model, and experienced leadership team will position us
for continued success in the years to come.
In conclusion, I would like to express my gratitude to our
shareholders for their unwavering support and confidence in our
vision. I would also like to extend my appreciation to our
dedicated employees, whose hard work and commitment have been
instrumental in our achievements. We look forward to another year
of growth and value creation for our shareholders and
stakeholders.
Stephen D Barnhill M.D.
Executive Chairman
30 June 2023
The audit opinion contains the following statements:
" Material uncertainty related to going concern
We draw attention to note 2 in the financial statements under
the heading 'Going concern' concerning the ability of the Group to
continue as a going concern. The Group's forecasts and projections
indicate that the Group does not have sufficient cash reserves and
is highly dependent on its ability to raise additional funds
through equity or debt finance or the expected sale proceeds from a
highly probable sale of certain assets of the Group, which are held
for sale and are expected to be completed by September 2023 as
disclosed in note 27 of the financial statements. The fund raise or
highly probable sale is expected to happen within twelve months of
the date of the approval of these financial statements to continue
its operations. The ability of the Group to raise additional funds
is dependent upon investor appetite and prevailing market
conditions.
As stated in note 2, these events or conditions, along with the
other matters as set forth in note 2, indicate that a material
uncertainty exists that may cast significant doubt on the Group's
ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the Group's ability to
continue to adopt the going concern basis of accounting
included
-- Reviewing the cash flow forecasts prepared by management for
the period of next 12 months corroborating, providing challenge to
key assumptions, and reviewing for reasonableness;
-- A comparison of actual results for the year to forecasts to
assess the forecasting ability/accuracy of management;
-- Reviewing post-year-end RNS announcements; and
-- Assessing the adequacy of going concern disclosures within
the Annual Report and Financial Statements.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Emphasis of matter paragraph - recoverability of trade
receivables
We draw attention to note 4 in the financial statements, which
describes the Group's recoverability assessment of the trade
receivables balance of GBP483k (2021: GBP197k). This balance is
receivable from the associate for services provided by the Group to
the associates in the current and prior years. Management have
explained their assessment over the recoverability within the
critical accounting estimates and conclude this to be recoverable.
The financial statements do not include the adjustment that would
result if the Group was unable to fully recover this.
Our opinion is not modified in this respect. "
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 additional information, please visit www.apollon.org.uk or
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/ Narisha Ragoonanthun gm@peterhousecapital.com
BlytheRay (Financial PR/IR-London)
Tel: +44 207 138 3204
Tim Blythe/Megan Ray/Matt Bowld apollon@blytheray.com
(Incorporated in the Isle of Man with company number
002845V)
Directors: Registered Office:
Stephen D Barnhill, M.D. (Chief Executive Quayside House
Officer) 6 Hope Street
Nicholas Ingrassia (Non-Executive Director) Castleton
Nicholas Barnhill (Non-Executive Director) Isle of Man, IM9 2AS
Roderick McIllree (Non-Executive Director)
Herb Fritsche (Executive Director)
Consolidated statement of comprehensive income for the year
ended 31 December 2022
For the For the year
year ended ended 31
31 December December
2022 2021
Continued operations Note GBP GBP
---------------------------------------- ---- ------------ ------------
Revenue 6 286,144 197,671
Cost of sales - -
------------
Gross profit 286,144 197,671
------------ ------------
Administrative expenses 7 (1,007,985) (959,412)
Share on loss of an associate 25 (164,086) (197,931)
Foreign exchange 213,137 6,723
Other net (losses) 8 (39,682) (241,344)
------------
Operating (loss) (712,472) (1,194,293)
------------ ------------
Impairment 24 - (1,332,464)
Finance income/(expense) 9 7,581 (3,799)
------------ ------------
Loss before tax (704,891) (2,530,556)
------------ ------------
Tax credit/(expense) - -
Loss for the year (704,891) (2,530,556)
------------ ------------
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 (704,891) (2,530,556)
Basic and diluted - pence 19 (0.093) (0.462)
------------ ------------
Weighted average number of ordinary
shares parent
Basic and diluted 19 758,779,740 548,102,705
============ ============
Statement of Financial Position as at 31 December 2022
Group
--------------------------
As at As at
31 December 31 December
2022 2021
Note GBP GBP
---------------------------- ---- ------------ ------------
Non-current assets
Investment in Associate 25 2,996,788 2,379,981
2,996,788 2,379,981
------------ ------------
Current assets
Trade and other receivables 13 593,262 360,657
Cash and cash equivalents 14 389 304,986
------------
593,651 665,643
------------ ------------
Asset held for Sale 27 384,056 -
------------ ------------
Total assets 3,974,495 3,045,624
------------ ------------
Current liabilities
Trade and other payables 15 1,096,292 83,016
Total liabilities 1,096,292 83,016
------------ ------------
Net assets 2,878,203 2,962,608
------------ ------------
Equity
Share premium 17 54,671,250 54,050,764
Share option reserve 18 85,363 85,363
Reverse acquisition reserve 24 (47,030,385) (47,030,385)
Retained earnings (4,848,025) (4,143,134)
Total equity 2,878,203 2,962,608
------------ ------------
The Financial Statements were approved and authorised for issue
by the Board on 30 June 2023 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 2022
Share Share Share Reverse Retained Total
capital premium option acquisition earnings
reserve reserve
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
======== =========== ======== ============ =========== ============
Share Share Share Reserve Retained Total
capital premium option acquisition earnings
reserve reserve
GBP GBP GBP GBP GBP
--------------------- -------- ---------- -------- ------------ ----------- ---------
Balance as
at 1 January
2022 - 54,050,764 85,363 (47,030,385) (4,143,134) 2,962,608
-------- ---------- -------- ------------ ----------- ---------
(Loss) for the
period - - - - (704,891) (704,891)
Total comprehensive
(Loss) for the
period - - - - (704,891) (704,891)
-------- ---------- -------- ------------ ----------- ---------
Issue of shares
- 19 May 2022 - 288,100 - - - 288,100
Issue of shares
- 26 July 2022 - 332,386 - - - 332,386
-------- ---------- -------- ------------ ----------- ---------
Total transactions
with owners,
recognised directly
in equity - 620,486 - - - 620,486
-------- ---------- -------- ------------ ----------- ---------
Balance as
at 31 December
2022 - 54,671,250 85,363 (47,030,385) (4,848,025) 2,878,203
======== ========== ======== ============ =========== =========
Consolidated cash flow statement for the year ended 31 December
2022
For the For the
year ended year ended
31 December 31 December
2022 2021
(restated*)
Note GBP GBP
------------------------------------------ ---- ------------ ------------
Cash flows from operating activities
Net (loss) for the year (704,891) (2,530,556)
Adjustments for:
Share based payments 18 - 85,363
(Increase)/decrease in trade and other
receivables (232,605) (24,768)
(Decrease)/increase in trade and other
payables 858,863 (617,215)
Foreign exchange (gain)/loss (213,138) (18,406)
Share of loss of an associate 25 164,086 197,931
Net cash flows from operating activities (127,685) (2,907,651)
------------ ------------
Investing activities
Purchase of intellectual property (95,957) -
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 (235,367) (402,189)
Net cash (outflow)/inflow in investing
activities (331,324) 947,817
------------ ------------
Financing activities
Proceeds from share issue 17 - 2,500,000
Cost of share issue 17 - (153,624)
Loan repayments - (83,925)
Loan granted from director 26 154,412 -
Proceeds from borrowings - -
Net cash inflow in financing activities 154,412 2,262,451
------------ ------------
Net (decrease)/increase in cash and
cash equivalents (304,597) 302,617
Cash and cash equivalents at beginning
of period 304,986 2,369
Cash and cash equivalents and end
of period 389 304,986
------------ ------------
Major non-cash transactions
On 19 May 2022, Apollon issued 4,348,679 ordinary shares at a
price of GBP0.06625 per share in lieu of the acquisition of certain
intellectual property, for a total consideration of GBP288,100.
On 26 July 2022, Apollon issued 18,465,910 ordinary shares at a
price of GBP0.018 per share in lieu of the acquisition of Citiva
Jamaica LLC for a total consideration of GBP332,386.
*share of loss of an associate has been correctly reclassified
to the operating activities which was incorrectly classified in
investing activities in the prior year financial statements.
Therefore, the prior year cash flow statement has been restated
accordingly.
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 Quayside House, 6 Hope Street,
Castletown, Isle of Man, IM9 1AS. 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 UK-adopted International Accounting Standards. 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
The following new standards have come into effect this year
however they have no impact on the Group:
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
-- References to Conceptual Framework (Amendments to IFRS 3).
ii) New UK-adopted International Standards and Interpretations
not yet adopted
The following amendments are effective for the period beginning
1 January 2023:
-- Initial application of IFSR 17 and IFRS 9 - Comparative Information (Amendment to IFRS 17)
-- Amendments to IAS 1: Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies
-- Amendments to IAS 8: Accounting Policies, Changes in
Accounting Estimates and Errors - Definition of Accounting
Estimates
-- Amendments to IAS 12: Income Taxes - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction
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
IFRS 3 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 are
aware that the Group's ability to remain a going concern for at
least 12 months from the approval of these financial statements is
dependent on the Group's ability to raise further equity and/or
debt finance, as well as the receipt of expected sale proceeds from
the sale of certain assets to GHG (refer Note 27). This is expected
to happen within the going concern period of the next 12
months.
Whilst the Directors acknowledge this has a high degree of
uncertainty, in part due to current market volatility, they have a
reasonable expectation that the Group will continue to be able to
raise finance as required over this period despite the material
uncertainty as discussed in the auditor's report. The Directors are
also confident in completion of the sale of the assets to GHG. The
Directors' will continue to seek investment opportunities for the
Group. The Company intends to remain an Enterprise Company which
may invest in the developing market for medicinal or therapeutic
Cannabis based medicinal products, in legal jurisdictions. 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 principle, 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 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 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 Group 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 are 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.
2.18. Asset held for sale
Asset are classified as assets held for sale when their carrying
amount is to be recovered principally through a sale transaction
and a sale is considered highly probable. They are stated at the
lower of carrying amount and fair value less costs to sell.
2.19. Intellectual property (IP)
IP assets (comprising patents) acquired by the Group as a result
of a business combination are initially recognised at fair value or
as a purchase at cost and are capitalised.
Internally generated IP costs are written off as incurred except
where IAS 38 criteria, as described in research and development
above, would require such costs to be capitalised.
The Group's view is that capitalised IP assets have a finite
useful life and to that extent they should be amortised over their
respective unexpired periods with provision made for impairment
when required. Capitalised IP assets are not amortised until the
Group is generating an economic return from the underlying asset
and as such no amortisation has been incurred to date as the
products to which they relate are not ready to be sold on the open
market. When the trials are completed and the products attain the
necessary accreditation and clearance from the regulators, the
Group will assess the estimated useful economic like and the IP
will be amortised using the straight-line method over their
estimated useful economic lives.
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 shortfalls 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.
The Directors are aware that the Group's ability to remain a
going concern for at least 12 months from the approval of these
financial statements is dependent on the Group's ability to raise
further equity and/or debt finance, as well as the receipt of
expected sale proceeds from the sale of certain assets to GHG
(refer Note 27). This is expected to happen within the going
concern period of the next 12 months.
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
recognised 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.
Recoverability of trade receivables
The Group considers the recoverability of the trade receivables
to be a key area of judgment, and this is held at its carrying
amount which is expected to be recovered from the counterparty
(i.e., it's associate). The directors believe that the trade
receivables balance at year end is recoverable based on the
directors' expectation around the potential of associate's licences
to generate sufficient economic benefits in the foreseeable future
to repay this trade receivable to the Group.
5. Dividends
No dividend has been declared or paid by the Group during the
year ended 31 December 2022 (31 December 2021: GBPNil).
6. Revenue from contracts with customers
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2022 2021
GBP GBP
--------------------- ------------ ------------
Consultancy services 286,144 197,671
286,144 197,671
------------ ------------
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
2022 2021
GBP GBP
------------------------------ ------------------ ------------
Directors' salaries 339,644 222,222
Directors' benefits 10,121 31,747
Employee salaries and wages 127,612 54,571
Audit 47,060 46,500
Accountancy 69,133 3,700
Exchange fees 34,447 22,553
Consulting and professional 308,273 388,708
Insurance 10,141 45,502
Office and administration 26,682 19,743
Travel and entertainment 14,802 17,263
Acquisition related fees 2,500 -
Share based payments - 85,363
Advertising and marketing 13,559 11,548
Other 4,011 9,992
------------------ ------------
Total administrative expenses 1,007,985 959,412
------------------ ------------
During the year the Group (including its subsidiaries) obtained
the following services from the Group's auditors and its
associates:
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2022 2021
GBP GBP
-------------------------------------------------- ------------ ------------
Fees payable to the Group's auditor and
its associates for the audit of the Consolidated
Financial Statements 43,000 46,500
43,000 46,500
------------ ------------
8. Other net gains/(losses)
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2022 2021
GBP GBP
------------------------------------- ------------ ------------
Loss of CBev option and loan - (218,910)
Gain on debt settlement of Directors
fees - 11,239
Other losses (39,682) (33,673)
--------------------------------------- ------------ ------------
(39,682) (241,344)
------------ ------------
During the period, the Group wrote off a VAT balance of
GBP27,106. The remainder of the losses were currency losses.
During the prior period, the right to purchase option to acquire
CBev Ventures Inc was allowed to expire and subsequently the
receivable was written off.
9. Finance income/(expense)
Group
----------------------------
For the For the
year ended year ended
31 December 31 December
2022 2021
GBP GBP
---------------- ------------ ------------
Interest income 7,581 3,799
7,581 3,799
------------ ------------
Interest income comprises 2% pa. interest on the loan to Apollon
Formularies Jamaica Ltd.
During the year ended 31 December 2022, the Company entered into
a loan agreement with Director Roderick McIllree. The term of the
loan is 12 months (extendable for an additional 12 months by mutual
agreement) and bears an interest rate of 8% pa. Roderick McIllree
is also a shareholder of the Group (note 26).
10. Employee benefits expense
Group
--------------------------
For the For the
year ended year ended
31 December 31 December
2022 2021
GBP GBP
------------------------------------ ------- ----- ------------ --------------
Salaries and wages 123,500 46,889
Social security contributions and
similar taxes 3,752 6,937
Other employment costs 360 745
127,612 54,571
------------ --------------
The average monthly number of employees for the Company during
the year was 2 (year ended 31 December 2021: 2) and the average
monthly number of employees for the Group was 2 (year ended 31
December 2021: 2).
11. Directors' remuneration
As at 31 December 2022
--------- --------- ----------------------
Fees and Accrued Benefits For the
Salaries Fees and in kind year ended
Salaries 31 December
2022
GBP GBP GBP GBP
----------------------- --------- --------- -------- ------------
Nicholas Ingrassia - 12,000 - 12,000
Stephen Barnhill 39,926 252,574 10,121 302,621
Nicholas Barnhill 1,638 10,362 - 12,000
Kevin Sheil 1,000 - - 1,000
Roderick McIllree - 11,000 - 11,000
Herbert Fritsche - 11,144 - 11,144
--------- --------- --------
42,564 297,080 10,121 349,765
--------- --------- -------- ------------
As at 31 December 2021
--------- --------- ------------------------
Fees and Accrued Benefits For the
Salaries Fees and in kind year ended
Salaries 31 December
2021
GBP GBP 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
--------- --------- --------
212,744 9,478 - 253,969
--------- --------- -------- ------------
Nicholas Ingrassia's fees for the year ended 31 December 2021,
totalling GBP9,478, have been accrued and remain unpaid as at 31
December 2022.
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 GBP292,500 was recognised for the year
ended 31 December 2022 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 GBP10,121 was paid to Apollon Formularies Inc. for
health insurance costs. Nicholas Barnhill fees are paid via Apollon
Formularies Inc.
Stephen Barnhill, Nicholas Barnhill, Nicholas Ingrassia and
Kevin Sheil were appointed on 12 April 2021. Kevin Sheil resigned
on 27 January 2022. Roderick McIllree was appointed 11 January
2022. Herbert Fritsche was appointed 26 January 2022.
12. Taxation
For the For the
year end year end
31 December 31 December
2022 2021
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% (2021- 0%).
For the For the
year end year end
31 December 31 December
2022 2021
GBP GBP
--------------------------------------- ------------ ------------
Profit/(loss) on ordinary activities
before tax (704,891) (2,530,556)
Tax on loss on ordinary activities at - -
standard CT rate of 0%
------------ ------------
Profit/(Losses) arising in territories
where no tax is charged (704,891) (2,530,556)
------------ ------------
The Group has tax losses of approximately GBP410,094 (2021: loss
of GBP384,127) available to carry forward against future taxable
profits in its UK subsidiary. A deferred tax asset has not been
recognised because of uncertainty over future taxable profits
against which the losses may be utilized. The applicable tax rate
for its UK Subsidiary, Apollon Formularies Ltd is 19% (2021:
19%)
13. Trade and other receivables
Group
----------------------------
Current: For the For the
year end year end
31 December 31 December
2022 2021
------------- -------------
GBP GBP
Receivables - due from associate 483,815 197,671
Prepayments 4,064 6,604
VAT receivables 8,590 120,429
Other receivables 96,793 35,953
------------- -------------
593,262 360,657
------------- -------------
14. Cash and cash equivalents
Group
--------------------------
For the For the
year end year end
31 December 31 December
2022 2021
------------ ------------
GBP GBP
Cash at bank and on hand 389 304,986
------------ ------------
389 304,986
------------ ------------
The carrying amounts of the Group's cash and cash equivalents
are denominated in pounds sterling.
15. Trade and other payables
Group
--------------------------
Current: For the For the
year end year end
31 December 31 December
2022 2021
------------ ------------
GBP GBP
Trade payables 396,462 32,269
Accrued liabilities 429,777 50,747
Directors Loan 154,412 -
Tax and payroll 19,684 -
Other creditors 95,957 -
------------ ------------
1,096,292 83,016
------------ ------------
The carrying amounts of the Group's trade and other payables are
denominated in pounds sterling.
16. Financial instruments by category
Consolidated For the year end
31 December 2022
---------------------
At amortised Total
cost
Assets per Statement GBP GBP
---------------------------------------------------- ------------ -------
Trade and other receivables (excluding prepayments) 589,198 589,198
Cash and cash equivalents 389 389
------------ -------
589,587 589,587
------------ -------
At amortised Total
cost
Liabilities per Statement GBP GBP
---------------------------------------------------- ------------ -------
Trade and other payables (excluding non-financial
liabilities) 666,514 666,514
------------ -------
666,514 666,514
------------ -------
The Group'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 Group's policy
that no speculative trading in financial instruments shall be
undertaken. The Group has been solely equity funded during the
period. As a result, the main risk arising from the Group's
financial instruments is currency risk. The Group'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 Group has no interest-bearing bank loans and overdrafts,
and interest rate on the directors' loan is fixed, 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 Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the Jamaican Dollar (JMD) and the British Pound
Sterling (GBP or GBP). Assets held for sale are exposed to foreign
exchange risk arising on Canadian Dollar (CAD or C$) and United
States Dollar (USD or US$). Foreign exchange risk arises from
future commercial transactions, recognised assets and liabilities
and net investments in foreign operations.
As at 31 December 2022, if Jamaican Dollar lost or gained 10 per
cent. against the British Pound Sterling, the impact on
comprehensive income would have been as follows:
31 December 2022
Impact on comprehensive income Group
GBP
--------------------------------- -----------------
+10% JMD/GBP 16,409
-10% JMD/GBP (16,409)
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 Group 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 Share capital Share premium Total
shares
----------------------- ------------ ------------- ------------- -----------
GBP GBP GBP
Issued and fully
paid
----------------------- ------------ ------------- ------------- -----------
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
----------------------- ------------ ------------- ------------- -----------
Issue of shares
- 19 May 2022 4,348,679 - 288,100 288,100
Issue of shares
- 26 July 2022 18,465,910 - 332,386 332,386
As at 31 December
2022 771,191,266 - 54,671,250 54,671,250
----------------------- ------------ ------------- ------------- -----------
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.
On 19 May 2022, Apollon issued 4,348,679 ordinary shares at a
price of GBP0.06625 per share in lieu of the acquisition of certain
intellectual property.
On 26 July 2022, Apollon issued 18,465,910 ordinary shares at a
price of GBP0.018 per share in lieu of the acquisition of Citiva
Jamaica LLC.
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 2022 2021
-------------- ------------- --------------- ------------ ------------
13/04/2021 13/04/2026 0.055 4,000,000 4,000,000
-------------- ------------- --------------- ------------ ------------
The Group has no legal or constructive obligation to settle or
repurchase the options or warrants in cash. During the period ended
31 December 2021, the 4,000,000 warrants fully vested and therefore
the charge was recognised in full.
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 2022 is shown below:
31 December 2022 31 December 2021
------------------------- -------------------------
Number Weighted Number Weighted
average average
exercise exercise
price (GBP) price (GBP)
-------------------------- ---------- ------------- ---------- -------------
Outstanding at beginning
of period 4,000,000 0.055 - -
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 4,000,000 0.055
-------------------------- ---------- ------------- ---------- -------------
31 December 2022 31 December 2021
-------------------------------------------------- --------------------------------------------------
Range Weighted Number Weighted Weighted Weighted Number Weighted Weighted
of exercise average of shares average average average of shares average average
prices exercise remaining remaining exercise remaining remaining
(GBP) price life life price life life
(GBP) expected contracted (GBP) expected contracted
(years) (years) (years) (years)
-------------- ---------- ----------- ----------- ------------ ---------- ----------- ----------- ------------
0.05 -
0.15 0.055 4,000,000 4.2 4.2 0.055 4,000,000 4.2 4.2
-------------- ---------- ----------- ----------- ------------ ---------- ----------- ----------- ------------
During the period there was a charge of GBPnil (31 December
2021: GBP85,363) in respect of and warrants.
19. Earnings per share
For the period ended 31 December 2022, the calculation of the
total basic loss per share of (0.093) pence is calculated by
dividing the loss attributable to shareholders of GBP704,891 by the
weighted average number of ordinary shares of 758,779,740 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 .
The ageing of trade receivables for the Group is as follows:
Group
---------------------------
As at 31 December 2022 Less than 6 - 12
6 months months Total
--------- ------- -------
GBP GBP GBP
Trade receivables 190,018 293,797 483,815
Prepayments 4,064 - 4,064
VAT receivables 8,590 - 8,590
Other receivables - 96,793 96,793
--------- ------- -------
202,672 390,590 593,262
--------- ------- -------
Group
---------------------------
As at 31 December 2021 Less than 6 - 12
6 months months Total
--------- ------- -------
GBP GBP GBP
Trade receivables 197,671 - 197,671
Prepayments 6,604 - 6,604
VAT receivables 22,825 97,604 120,429
Other receivables - 35,953 35,953
--------- ------- -------
227,100 133,557 360,657
--------- ------- -------
The carrying amounts of the Group's trade receivables are
denominated in pounds sterling. 'Other receivables' are held in US
dollar.
The directors believe that the trade receivables balance at year
end is recoverable based on the directors' expectation around the
potential of associate's licences to generate sufficient economic
benefits in the foreseeable future to repay this trade receivable
to the Group.
The ageing of trade payables for the Group is as follows:
Group
-----------------------------------------
As at 31 December 2022 Less 6 - Between Total
than 6 12 months 1 and
months 2 years
-------- ---------- -------- ---------
GBP GBP GBP GBP
Trade payables 195,802 185,628 15,032 396,462
Accruals 292,174 128,125 9,478 429,777
Directors Loan 154,412 - - 154,412
Tax and payroll - 19,684 - 19,684
Other creditors - 95,957 - 95,957
-------- ---------- -------- ---------
642,388 429,394 24,510 1,096,292
-------- ---------- -------- ---------
Group
-------------------------------------
As at 31 December 2021 Less 6 - Between Total
than 6 12 months 1 and
months 2 years
------- ---------- -------- ------
GBP GBP GBP GBP
Trade payables 32,269 - - 32,269
Accruals 50,747 - - 50,747
83,016 - - 83,016
------- ---------- -------- ------
The carrying amounts of the Group's trade and other payables are
denominated in the following currencies:
Group
--------------------------
31 December 31 December
2022 2021
----------- -----------
GBP GBP
UK Pounds 920,880 77,991
US Dollar 157,403 875
Jamaican Dollar 18,009 4,150
1,096,292 83,016
----------- -----------
All cash and cash equivalents are held in pounds sterling.
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 Group 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 2022 there were amounts receivable of
GBP103,860 from Apollon Formularies Limited (31 December 2021: GBP
202,023)
All intra Group transactions are eliminated on
consolidation.
Loan and Other Receivables from Apollon Formularies plc to
Apollon Formularies Jamaica Ltd
As at 31 December 2022 there were loan amounts receivable of
GBP969,943 from Apollon Formularies Jamaica (31 December 2021: GBP
402,189).
As at 31 December 2022 there were other amounts receivable from
Apollon Formularies Jamaica Ltd of GBP483,815 (31 December 2021:
GBP197,671)
Loan from Apollon Formularies Limited to Apollon Formularies
Jamaica Ltd
As at 31 December 2022 there were amounts receivable of
GBP2,026,845 from Apollon Formularies Jamaica Ltd (31 December
2021: GBP 1,813,705) .
Loan from Apollon Formularies plc to Doc's Place International
Inc.
As at 31 December 2022 there were amounts receivable of
GBP76,709 from Docs Place International Inc. Doc's Place
International Inc. shares a common director, being Stephen Barnhill
(31 December 2021: GBP 20,383)
Loan from Roderick McIllree to Apollon Formularies plc
As at 31 December 2022 there were amounts payable of GBP154,412
to Director Roderick McIllree (Note 26) (31 December 2021:
GBPNil)
Loan from Apollon Formularies plc to Citiva Jamaica
As at 31 December 2022 there were amounts receivable from Citiva
Jamaica of GBP4,515 (31 December 2021: GBPNil)
Other transactions
Apollon Formularies, Inc., a company of which Stephen Barnhill
is a director, recognised a fee of GBP292,500 for the services of
two Executives, being a Chief Executive Officer (Stephen Barnhill
Snr) and the Chief Operating Officer (Stephen Barnhill Jnr) (31
December 2021: GBP195,097). A further GBP10,121 was paid to Apollon
Formularies, Inc. for health insurance costs (31 December 2021:
GBP20,383).
Nicholas Barnhill's fees of GBP12,000 for the year ended 31
December 2022 were recognised via Apollon Formularies, Inc (31
December 2021: GBP9,000).
As at 31 December 2022 there were total amounts payable of
GBP306,558 to Directors. For a breakdown of the accrued salaries
throughout the year, refer to Note 11 (31 December 2021: GBP
9,478).
23. Subsidiary undertakings
Name of subsidiary Country Proportion Proportion Nature of business
of incorporation of ordinary of ordinary
and place shares held shares held
of business by parent by the Group
(%) (%)
--------------------- ------------------- ------------- -------------- -------------------
Apollon Formularies England & Medical cannabis
Ltd Wales 100% 100% pharmaceutical
The subsidiaries of the Group are as below:
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 the 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
2022
GBP
---------------------------- ------------
Investment in associate
At beginning of period 164,086
Share of loss in associate (164,086)
---------------------------- ------------
At end of period -
---------------------------- ------------
Loans to Associate
At beginning of period 2,215,895
------------------------ ----------
Loans granted 567,755
------------------------ ----------
Foreign exchange 213,138
------------------------ ----------
At end of period 2,996,788
------------------------ ----------
Total 2,996,788
------------------------ ----------
The loans to Apollon Formularies Jamaica for a total value of
GBP2,996,788 has been assessed for recoverability, and thus the
Directors have concluded that the loan is recoverable.
The Company's share of Apollon Jamaica result for the year was a
loss of GBP164,086 (2021: loss of GBP197,931) of a total loss of
GBP655,718 (2021: total loss of GBP403,941). The share of the loss
in associate for the year ended 31 December 2022 is restricted to
the carried forward investment in associate. As a result, the
remaining investment balance carried forward from the period ended
31 December 2021, is reduced to GBPnil.
The associate had no contingent liabilities or capital
commitments as at 31 December 2022 and 2021.
The following table illustrated the summarised financial
information of Apollon Formularies Jamaica Limited at 31 December
2022.
31 December 31 December
2022 2021
GBP GBP
---------------------------------------------- ------------ --------------
Current assets 25,507 24,893
Non-current assets 369,957 2,441
Current liabilities 528,485 -
Non-current liabilities 969,944 402,189
Equity 1,102,965 374,854
---------------------------------------------- ------------ --------------
31 December 31 December
2022 2021
GBP GBP
---------------------------------------------- ------------ ------------
Revenue 2,710 13,958
Cost of sales - (6,568)
Administrative expenses (658,428) (411,330)
Loss before tax (655,718) (403,941)
---------------------------------------------- ------------ ------------
26. Directors Loan
During the year ended 31 December 2022, the Company entered into
a loan agreement with Director Roderick McIllree. The term of the
loan is 12 months (extendable for an additional 12 months by mutual
agreement) and bears an interest rate of 8% pa. Roderick McIllree
is also a shareholder of the Company. At as 31 December 2022, the
Company owes Roderick McIllree GBP154,412.
31 December
2022
GBP
----------------- ------------
Opening balance -
Loans granted 142,974
Interest 11,438
Closing balance 154,412
----------------- ------------
27. Asset Held for Sale
On 9 January 2023, the Company entered into a binding letter of
intent ("LOI") with Global Hemp Group Inc. ("GHG"), pursuant to
which the Company granted a perpetual exclusive licence of certain
intellectual property for use in Canada, the United States and
Mexico, in exchange for 10,000,000 GHG Shares and a payment of
US$250,000. This includes, but is not limited to, four key patent
applications as described below, including any continuations,
divisional, and continuations-in-part, along with the use of any
and all associated preclinical and clinical data relating to the
patents and proprietary technology (the "IP").
The patents are registered under the International Patent System
(PCT) and are also registered in Jamaica. This exclusive perpetual
licence will cover Canada, the United States and Mexico, for the
four patents below and all associated supporting data:
-- Compositions and Methods for Treatment of Cancers;
-- Compositions and Methods for Treatment of Inflammation;
-- Methods for Treatment of Human Cancers Using Cannabis Compositions;
-- Methods for Treatment of Human Cancers Using Mushroom Compositions;
The LOI also provided for a due diligence period of 60 days
(which time period was later extended by agreement). If both
parties are satisfied with the results of the due diligence, GHG
will have the exclusive option to acquire all the Assets of Apollon
Formularies plc, other than cash, cash equivalents, and
receivables, for a payment of 771,191,266 GHG common shares at a
deemed price of C$0.015 per GHG common share, for a total
consideration of C$11,567,86. If GHG and the Company are satisfied
with their due diligence reviews, GHG will also acquire the Assets,
including full ownership of the four patent applications listed
above. In summary, the Disposal will also consist of:
-- The BIOENSIS preclinical data reflecting the independent
testing of cannabis and mushroom formulations.
-- The Company's contract right to receive a 49% equity interest
in Apollon Jamaica, subject to approval by the CLA.
-- The Company's contract right to receive 95% of the net profits of Apollon Jamaica.
Therefore, the Directors determine that certain intangible and
tangible Apollon Formularies plc assets be classified as an asset
held for sale as at 31 December 2022.
The initial due diligence period was extended, and we wait for
GHG's final decision within the next 3 months.
The value of Asset Held for Sale is the expected sale proceeds
from GHG, being the total consideration of shares and cash,
converted into pounds sterling using the exchange rates on 9
January 2023 being 0.83 and 0.61, US dollar and Canadian dollar,
respectively.
Asset Held for Sale of GBP384,056 ("GHG Consideration") consists
of the following assets:
31 December 31 December
2022 2021
GBP GBP
---------------------- ------------ ------------
Intellectual property 384,056 -
384,056 -
---------------------- ------------ ------------
The intellectual property, which comprises of patents, was
acquired during the year ended 31 December 2022 for a total
consideration of GBP384,056, comprising GBP95,957 cash and the
issuing of 4,348,679 ordinary shares in the Company.
28. Ultimate Controlling Party
The Directors believe there is no ultimate controlling
party.
29. Events After the Reporting Date
On 9 January 2023, the Group entered into a binding letter of
intent ("LOI") with Global Hemp Group Inc. ("GHG"), pursuant to
which the Group granted a perpetual exclusive licence of certain
intellectual property for use in Canada, the United States and
Mexico, in exchange for 10,000,000 GHG Shares and a payment of
US$250,000. GHG will also have the exclusive option to acquire all
the Assets of Apollon for a payment of 771,191,266 GHG common
shares at a deemed price of C$0.015 per G
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NEXEAKKEDASDEFA
(END) Dow Jones Newswires
June 30, 2023 12:32 ET (16:32 GMT)
Apollon Formularies (AQSE:APOL)
Historical Stock Chart
From Apr 2024 to May 2024
Apollon Formularies (AQSE:APOL)
Historical Stock Chart
From May 2023 to May 2024
