Apollon Formularies - Interim Results
RNS Number : 6135N
Apollon Formularies plc
30 September 2021
 

Apollon Formularies PLC / EPIC: APOL / Market: AQSE / Sector: Biotechnology

 

30 September 2021

APOLLON FORMULARIES PLC

("Apollon" or the "Company")

Interim Results

 

Apollon Formularies plc (AQSE: APOL, "Apollon" or the "Company"), a UK based international medical cannabis pharmaceutical company trading on Aquis Stock Exchange, is pleased to report its interim results for the period ended 30 June 2021.

 

Operational Highlights

 

·      Listed on London's Aquis Growth market

·      Raised £2.5 million through an over subscribed fundraise

·      Tested Apollon medical cannabis formulations in independent third party testing at BIOENSIS laboratory, the premier provider of 3D Cellular Pharmacology Services  in the United States. Results demonstrated the successful killing of nearly 100% of triple-negative and HER2+ breast cancer cells in 3D cell culture

·      Apollon entered into a joint testing agreement with Aion Therapeutic Inc. (CSE: AION), a BC based international pharmaceutical company trading on the Canadian Securities Exchange, utilising Aion's medicinal mushroom cancer formulations along with Apollon's medical cannabis formulations as potential companion therapies for HER2+ breast cancer. The testing results showed that Apollon's medical cannabis formulations were particularly effective in killing living HER2+ cancer cells directly (direct cytotoxicity), while Aion's medicinal mushroom formulations were most effective in stimulating the immune system's T-cell production to attack and kill HER2+ cancer cells and through macrophage induced phagocytosis. When the two formulations were combined, HER2+ breast cancer cells in 3D cell cultures, were demonstrated to kill these breast cancer cells through the three different independent pathways*

·      As a result of these successful cancer testing results, Apollon signed a long-term lease and is preparing to open its first International Cancer Institute in Kingston, Jamaica where it anticipates that it will begin treating patients (local and international) at the beginning of October 2021, and performing cancer clinical trials in the very near future

·      The Apollon on site dispensary in Negril, Jamaica, re-opened following closures due to Covid-19

 

* Stephen D. Barnhill, CEO of Apollon, is also the Executive Chair of the Board of Aion Therapeutic Inc.

 

Chairman's review of year to date

 

I am pleased to provide shareholders with Apollon's ("Apollon" or the "Company") unaudited interim results for the six months ended 30 June 2021 and update on the progress that the Company has made, and continues to make, in what has been a transitional period due to the gradual relaxation of Covid-19 restrictions.

 

During the six months ended 30 June 2021, Apollon completed a Reverse Takeover and commenced trading on the Aquis Growth Market. As part of the listing, Apollon secured £2.5 million through an oversubscribed fundraise at 5p.

 

Following a challenging period for businesses world over, Apollon Formularies Jamaica Limited ("Apollon Jamaica"), which operates the processing and extraction laboratory, the research and development centre and an independent onsite medical cannabis dispensary at Doc's Place Health and Wellness Centre, successfully reopened its facilities in May 2021 after temporarily closing due to Covid-19 lockdown restrictions. With receipt of Apollon Jamaica's Covid-19 Health and Safety Protocols Certification, the team were delighted to resume treating patients.

 

As announced in June 2021, Apollon also signed a long-term lease for its first International Cancer Institute in Kingston, Jamaica. The new facility will allow Apollon to expand the patient treatment programme, generate additional revenue for the Company, as well as providing the opportunity to gather invaluable patient data on Apollon's medical cannabis formulations.

 

Throughout the period, we announced the testing of Apollon medical cannabis formulations in independent third party testing at BIOENSIS laboratory, the premier provider of 3D Cellular Pharmacology Services in the United States. Results demonstrated the successful killing of nearly 100% of triple-negative and HER2+ breast cancer cells in 3D cell culture.

 

Additionally, we announced that Apollon entered into a joint testing agreement with Aion Therapeutic Inc. (CSE: AION), a BC based international pharmaceutical company trading on the Canadian Securities Exchange, utilising Aion's medicinal mushroom cancer formulations along with Apollon's medical cannabis formulations as potential companion therapies for HER2+ breast cancer. The testing results showed that Apollon's medical cannabis formulations were particularly effective in killing living HER2+ cancer cells directly (direct cytotoxicity), while Aion's medicinal mushroom formulations were most effective in stimulating the immune system's T-cell production to attack and kill HER2+ cancer cells and through macrophage induced phagocytosis. When the two formulations were combined, HER2+ breast cancer cells in 3D cell cultures were demonstrated to kill these breast cancer cells through the three different independent pathways.

 

As a result of these successful cancer testing results, Apollon signed a long-term lease and is preparing to open its first International Cancer Institute in Kingston, Jamaica where we anticipate treating patients (local and international) at the beginning of October 2021 and performing cancer clinical trials in the very near future.

 

Post period highlights

 

Beyond the period ended 30 June 2021, Apollon's hard work has continued.

 

In preparation for the commencement of cancer treatments at Apollon's International Cancer Institute, the Company appointed Dr. Dingle Spence, MBBS, Dip Pall. Med, FRCR, a licensed Jamaican physician specialising in Clinical Oncology, Radiation Therapy, and Palliative Care Medicine, as the Medical Director of its new facility. Additionally, three additional Jamaican licensed physicians with expertise in medical cannabis were hired to staff the International Cancer Institute.

 

In July 2021, we announced that Apollon's formulations were successful in killing both hormone-resistant and hormone-sensitive prostate cancer cells in 3D cell cultures, in addition to the aforementioned results. Similarly, the prostate cancer testing was performed independently by BIOENSIS.

 

Most recently, Apollon has announced the expansion of our production facility in Negril, Jamaica. As a key part of the upgrade, the Company purchased a new imported distiller from the US which will significantly increase Apollon's high-quality cannabis oil production capability to over 50 times our current production level. Fundamental to this is the generation of additional revenue for the Company through opportunities such as tolling processes and white labelling. The expansion also opens the path to further revenue generation opportunities to the wider domestic market and expansion to international export markets which is included in Apollon's Jamaican Cannabis License Authority (CLA) approvals. In addition, this increased production capacity allows the Company to significantly increase its inventory for our laboratory and patient data based medical cannabis oils for much larger international clinical trials which we anticipate will be in partnership with large pharmaceutical companies entering the medical cannabis market in the near future.

 

Outlook

 

Whilst we are early in our journey as a public company, Apollon's achievements are not small. Since being founded in 2014, Apollon has obtained a suite of CLA licenses which allow us to work with full spectrum oils inclusive of high levels of THC.

 

Through extensive laboratory and clinical data we have developed Apollon trademarked formulations and are in the process of patent protecting our formulations, including numerous Apollon medical cannabis formulations for the treatment of various cancers which have been validated through independent testing.

 

As an established business we have multiple revenue streams including in and out-patient treatments and consultations, dispensary sales of Apollon products in Jamaica, and most recently through the facility expansion, the sale of white-labelled oil and third-party tolling fees, and export of our products globally where legally allowed.

 

We continue to deliver on our strategy to become the premier global medical cannabis company with a number of key milestones achieved in the six months ended 30 June 2021. I would like to thank our shareholders for their support and continued investment with Apollon Formularies. Looking ahead, the opportunities to continue our growth both locally and, eventually, globally, are significant, and we are well-positioned to capitalise on them.

 

Financials

For the six-month period ended 30 June 2021 the Group is reporting a loss of £1,695,662 (six months ended 30 June 2020: loss £390,452).

The unaudited interim results to 30 June 2021 have not been reviewed by the Company's auditor.

Responsibility Statement

 

We confirm that to the best of our knowledge: 

 

·      the interim financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the EU;

·      give a true and fair view of the assets, liabilities, financial position and loss of the Company;

·      the Interim report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

·      The Interim report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

 

The interim report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:

 

Stephen D Barnhill M.D

Chairman

30 September 2021

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

The Directors of the Company accept responsibility for the contents of this announcement.

 For further information please visit www.apollon.org.uk or contact:

Apollon Formularies Plc

Stephen Barnhill, Executive Chairman

Tel: +44 207 907 9314

 Peterhouse Capital Limited

Guy Miller / Mark Anwyl

 

Tel: +44 (0) 207 220 9795



CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 


Notes

6 months to 30 June 2021 Unaudited

£

6 months to 30 June 2020 Unaudited

£

Continuing operations




Revenue


-

-

Administration expenses


(335,425)

(14,084)

Foreign exchange


(25,775)

(129,993)

Operating loss


(361,200)

(144,077)

Share based payment for reverse acquisition

6

(1,319,251)

-

Share on loss from associate


(11,412)

(243,950)

Finance costs


(3,799)

(2,425)

Loss before tax for the period


(1,695,662)

(390,452)

Tax


-

-

Loss for the period


(1,695,662)

(390,452)

Other comprehensive income




Items that may be reclassified to profit or loss




Total comprehensive income for the period


(1,695,662)

(390,452)

Total comprehensive income for the period attributable to equity holders


(1,695,662)

(390,452)

Earnings per share from continuing operations attributable to the equity owners of the parent




Basic and diluted (pence per share)

5

(0.49)p

(0.22)p

 

 



CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

                                                                                                                                                                    


 

 

 

Notes

As at

30 June 2021 Unaudited

£

As at

31 December 2020 Unaudited

£

As at

30 June 2020 Unaudited

£

Non-Current Assets





Investments in associate

7

2,205,310

2,157,310

2,221,721



2,205,310

2,157,310

2,221,721

Current Assets





Trade and other receivables


406,082

240,860

242,130

Cash and cash equivalents


1,256,797

2,369

2,875



1,662,879

243,229

245,005

Total Assets


3,868,189

2,400,539

2,466,726






Current Liabilities





Trade and other payables


159,559

85,225

93,925






Total Liabilities


159,559

85,225

93,925

Net Assets

3,708,630

2,315,314

2,372,801

Capital and Reserves Attributable to

Equity Holders of the Company





Share capital


-

17,344

17,309

Share premium


54,050,764

3,910,557

3,861,592

Reverse acquisition reserve

6

(47,033,885)

-

-

Retained losses


(3,308,249)

(1,612,587)

(1,506,100)

Total Equity


3,708,630

2,315,314

2,372,801

 



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

 




 


Note

Share capital

£

Share premium

£

Reverse Acquisition Reserve

£

Retained losses

£

Total equity

£

Balance as at 1 January 2020


17,309

3,861,592

-

(1,115,648)

2,763,253

Loss for the period


-

-

-

(390,452)

(390,452)

Total comprehensive income for the year


-

-

-

 

(390,452)

 

(390,452)

Total transactions with owners, recognised in equity


-

-

-

-

-

Balance as at 30 June 2020


17,309

3,861,592

-

(1,506,100)

2,372,801








Balance as at 1 January 2021


17,344

3,910,557

-

(1,612,587)

2,315,314

Loss for the period


-

-

-

(1,695,662)

(1,695,662)

Total comprehensive income for the year


-

-

-

(1,695,662)

(1,695,662)

Transfer to reverse acquisition reserve

6

(17,344)

(3,910,557)

(47,033,885)

-

(50,961,786)

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)

Total transactions with owners, recognised in equity


(17,344)

50,140,207

(47,033,885)

-

3,088,978

Balance as at 30 June 2021


-

54,050,764

(47,033,885)

(3,308,249)

3,708,630








 

 

 



 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 



 

 

 

Notes

6 months to 30 June 2021

Unaudited

£

6 months to 30 June 2020 Unaudited

£

Cash flows from operating activities





Operating loss



(1,695,662)

(390,452)

Adjustments for:





Share based payment for reverse acquisition


6

1,319,251

-

Loss from associate



11,412

243,950

Interest expense



-

2,426

Increase/(decrease) in trade and other receivables



(81,782)

117,969

Increase/(decrease) in trade and other payables



(519,372)

8,115

Foreign exchange



24,108

(24,294)

Net cash used in operations



(942,045)

(42,286)

 

Cash flows from investing activities





Cash acquired from acquisition


6

17,542

-

Loans granted to associate



(83,520)

-

Net cash used in investing activities



(65,978)

-

 

Cash flows from financing activities





Issue of share capital



2,500,000

-

Issue costs



(153,624)

-

Repayment of borrowings



(83,925)

(30,000)

Proceeds from borrowings



-

71,500

Net cash generated from financing activities



2,262,451

41,500

Net decrease in cash and cash equivalents



1,254,428

(786)

Cash and cash equivalents at beginning of period



2,369

3,661

Cash and cash equivalents at end of period



1,256,797

2,875

 

 

Major non-cash transactions:

 

On 13 April 2021, 666,666,666 Ordinary Shares at a price of £0.06 were issued as consideration for the acquisition of Apollon Formularies Limited for a total value of £40,000,000.



NOTES TO THE INTERIM 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").

 

2. Basis of Preparation

 

The condensed interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Statements" as adopted by the European Union and the Disclosure and Transparency Rules of the UK Financial Conduct Authority. The condensed interim financial statements should be read in conjunction with the annual financial statements for the period ended 31 December 2020, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

 

The interim financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union.

 

Statutory financial statements for the period ended 31 December 2020 were approved by the Board of Directors on 30 June 2021. The report of the auditors on those financial statements was unqualified. The condensed interim financial statements are unaudited and have not been reviewed by the Company's auditor. 

 

Going concern

 

The Group is managing the impact of the COVID-19 pandemic on its business and the uncertainty it creates. The Company has taken swift pre-emptive action to ensure the safety of its employees, contractors and supply chain. This includes a full financial and strategic review designed to safeguard and ensure the stability and longevity of Apollon's activities for the benefit for all its stakeholders.

 

The Directors, having made appropriate enquiries and considering the ability of the Group to raise further funding, consider that adequate resources exist for the Company to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the condensed interim financial statements for the period ended 30 June 2021. Further to this, the Directors believe the Group is in a strong position to endure ongoing uncertainty from COVID-19 however the risk remains for short term market volatility and uncertain long-term impacts which may affect the Groups ability to raise further funding in the future.

 

Risks and uncertainties

 

 The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Company's medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Company's 2020 Annual Report and Financial Statements, a copy of which is available on the Company's website: www.apollon.org.uk. The key financial risks are market risk, exchange rate risk, liquidity risk and credit risk.

 

Critical accounting estimates

 

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in Note 2 of the Company's 2020 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

 

 

3.   Accounting Policies

 

Except as described below, the same accounting policies, presentation and methods of computation have been followed in these condensed interim financial statements as were applied in the preparation of the Company's annual financial statements for the period ended 31 December 2020.

 

3.1 Changes in accounting policy and disclosures

(a) New and amended standards mandatory for the first time for the financial year beginning 1 January 2021

No new and/or revised Standards and Interpretations have been required to be adopted, and/or are applicable in the current year by/to the Company, as standards, amendments and interpretations which are effective for the financial year beginning on 1 January 2021 are not material to the Company.

 

 

(b) New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed and not early adopted

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the condensed interim financial statements are listed below. The Company intends to adopt these standards, if applicable when they become effective.

 

Standard


Effective date




IAS 16 (Amendments)

Property plant and equipment

1 January 2022*

IAS 1 (Amendments)

Classification of Liabilities ad Current and Non-Current

1 January 2022*

IAS 37 (Amendments)

Provisions, contingent liabilities, and contingent assets

1 January 2022*

 

*Not yet endorsed by the EU.

The Company is evaluating the impact of the new and amended standards above. The Directors believe that these new and amended standards are not expected to have a material impact on the Company's results or shareholders' funds.

 

3.2 Basis of preparation of financial statements

 

The Group Financial Statements consolidate the Financial Statements of the Company and its subsidiaries made up to 30 June 2021. Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

                                                                                                                                   

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

                                                                                                                                   

·      The contractual arrangement with the other vote holders of the investee;

·      Rights arising from other contractual arrangements; and

·      The Group's voting rights and potential voting rights

                                                                                                                                   

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the Group Financial Statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

                                                                                                                                   

Investments in subsidiaries are accounted for at cost less impairment within the Company Financial Statements. Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

 

Refer to Note 6 for information on the consolidation of Apollon Formularies Limited and the application of reverse acquisition accounting policies. The Reverse acquisition reserve represents a non-distributable reserve arising on the acquisition of

Apollon Formularies Limited.

 

4.   Dividends

 

No dividend has been declared or paid by the Company during the six months ended 30 June 2020 (six months ended 30 June 2020: £nil).

 

 

5.   Earnings per Share

 

The calculation of loss per share is based on a retained loss of £1,695,662 for the six months ended 30 June 2021 (six months ended 30 June 2020: £390,452 and the weighted average number of shares in issue in the period ended 30 June 2021 of 344,509,274 (six months ended 30 June 2020: 173,166,503).

 

No diluted earnings per share is presented for the six months ended 30 June 2021 or six months ended 30 June 2020 as the effect on the exercise of share options would be to decrease the loss per share.

 

 

6.   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 £40,000,000,  in addition to an investment of £1,160,000 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 summaries 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 £1,319,251 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 

£ 

Equity instruments in issue (31,710,011 ordinary shares £0.06 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 

1,161,378

Trade and other payables 

(595,571)

Total identified net assets 

583,349

Share based payment for obtaining listing

1,319,251

 

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 £0.06 per share.

 

Acquisition related costs of £437,667 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 £1,695,662 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 £nil and a loss of £2,193,323.

 

The following table summarises the movements in the Reverse Acquisition Reserve for the period

 


£

Opening balance

-

Investment in Legal Subsidiary

(41,160,000)

Elimination of Legal Parent share capital

3,927,901

Share based payment

1,319,251

Transfer of pre-acquisition retained losses

(11,121,037)


(47,033,885)

 

 

 

7. 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 Subsidary 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: 

 


30 June 2021

£

30 June 2020

£

Opening balance

2,157,309

2,304,520

Share of loss in associate

(11,412)

(243,950)

Loans granted

83,520

-

Foreign exchange

(24,107)

161,151


2,205,310

2,221,721

 

The Company's share of Apollon Jamaica result for the year was a loss of £11,412 (2020: loss of £235,745) of a total loss of £22,290 (2019: total loss of £481,112).

 

8. Events after the reporting date


There were no significant events after the reporting date.

 

9. Approval of interim financial statements

The Condensed interim financial statements were approved by the Board of Directors on 30 September 2021.

 

**ENDS**

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