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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Apollon Formularies plc | AQSE:APOL | Aquis Stock Exchange | Ordinary Share | IM00BJ0LRD77 | Ordinary shares |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.00 | - |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
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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NEXSDWFISEESEEM
(END) Dow Jones Newswires
June 30, 2022 11:29 ET (15:29 GMT)
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