Apollon Formularies - Final Results
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 £2.5 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:

Composition and Methods for Treatment of Cancers;

Composition and Methods for Treatment of Inflammation;

Methods for Treatment of Human Cancers using Mushroom Combinations; and

Methods for Treatment of Human Cancers using Cannabis Compositions.

·    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 £2.5 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 year ended 31 December 2021

For the year ended 31 December 2020

Continued operations

Note

 

£

£

 





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 December 2021

As at 31 December 2020

As at 31 December 2021

As at 31 December 2020

 

 

Note

£

£

£

£

 

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 £1,296,431 (31 December 2020: loss of £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

capital

Share premium

Share option reserve

Reserve acquisition reserve

Retained earnings

Total

 

£

£

£

 

£

£

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

 

 

 

 

 

 

 

 

 

 

Share

capital

Share premium

Share option reserve

Reverse acquisition reserve

Retained earnings

Total

 

£

£

£

£

£

£

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

capital

Share premium

Share option reserve

Retained earnings

Total

 

£

£

£

£

£

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

capital

Share premium

Share option reserve

Retained earnings

Total

 

£

£

£

£

£

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 year ended 31 December 2021

For the year ended 31 December 2020

 

Note

 

£

£

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 year ended 31 December 2021

For the year ended 31 December 2020

 

Note

 

£

£

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: Proceeds before Intended Use

1 January 2022

IFRS 3

Reference to Conceptual Framework

1 January 2022

IAS 37

Onerous contracts

1 January 2022

IFRS Standards (amendments)

2018-2020 annual improvement cycle

1 January 2022

IAS 8

Accounting estimates

1 January 2023

IAS 1

Classification of Liabilities as Current or Non-Current.

1 January 2023

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: £Nil).

 

6.      Revenue from contracts with customers

 

 

Group

 

For the year ended 31 December 2021

£

For the year ended 31 December 2020

£

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 year end 31 December 2021

For the year end 31 December 2020

 

 

£

£

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


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 year ended 31 December 2021

For the year ended 31 December 2020

 

 

£

£

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 year ended 31 December 2021

For the year ended 31 December 2020

 

 

 

£

£

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 year ended 31 December 2021

For the year ended 31 December 2020

 

 

 

 

£

£

 

Interest on loans



3,799

2,427

 

 

 

 

3,799

2,427

 

 

10.   Employee benefits expense

 

 

 

Group

 

 

 

 

For the year ended 31 December 2021

For the year ended 31 December 2020

 

 

 

£

£

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

 

 

 

Fees and Salaries

£

Written off Salary Payments

For the year ended 31 December 2020

 

 

 

£

£

 

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 and Salaries

£

Benefits in kind

For the year ended 31 December 2021

 

 

 

£

£

 

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 £9,478, 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 £195,097 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 £41,868 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 year end 31 December 2021

For the year end 31 December 2020

 

 

£

£

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 year end 31 December 2021

For the year end 31 December 2020

 

 

£

£

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 year end 31 December 2021

For the year end 31 December 2020

For the year end 31 December 2021

For the year end 31 December 2020


£

£

£

£

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 end 31 December 2021

For the year end 31 December 2020

For the year end 31 December 2021

For the year end 31 December 2020

 

£

£

£

£

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 end 31 December 2021

For the year end 31 December 2020

For the year end 31 December 2021

For the year end 31 December 2020

 

£

£

£

£

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

 

Consolidated

For the year end 31 December 2021

 

 

At amortised cost

Total

 

Assets per Statement

£

£

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

£

£

 

Trade and other payables (excluding non-financial liabilities)

32,289

32,289

 

 

32,289

32,289

 

 

 

Company

For the year end 31 December 2021

 

At amortised cost

Total

Assets per Statement

£

£

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

£

£

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

 

 

 

£

£

£

 

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

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 £2,500,000

 

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 2021

31 December 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 (£000)



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

 

Number

Weighted average exercise price (£)

 

Number

Weighted average exercise price (£)

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

Range of exercise prices (£)

Weighted average exercise price (£)

Number of shares

Weighted average remaining life expected (years)

Weighted average remaining life contracted (years)

Weighted average exercise price (£)

Number of shares

Weighted average remaining life expected (years)

Weighted average remaining life contracted (years)

0.05 - 0.15

0.055

4,000,000

4.2

4.2

-

-

-

-

 

During the period there was a charge of £85,363 (31 December 2020: £Nil) 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 £2,530,556 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 £202,023 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 £402,189 from Apollon Formularies Jamaica.

 

Loan from Apollon Formularies Limited to Apollon Formularies Jamaica Ltd

 

As at 31 December 2021 there were amounts receivable of £1,813.705 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 £20,383 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 £195,097 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 £9,000 for the year ended 31 December 2021 were paid via Apollon Formularies Inc.



 

 

23.   Investments in subsidiary undertakings

 

 

Company

31 December 2021

£

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.

Name of subsidiary

Country of incorporation and place of business

Proportion of ordinary shares held by parent (%)

Proportion of ordinary shares held by the Group (%)

Nature of business

Apollon Formularies Ltd

England & Wales

100%

100%

Medical cannabis 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 £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 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 £1,332,464 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 

£ 

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 

1,163,047

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 £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 £2,530,556 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 £nil and a loss of £3,014,420.

 

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

1,332,464

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 2021

£

31 December 2020

£

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 £197,931 (2020: loss of £235,745) of a total loss of £403,941 (2020: total loss of £481,112).

 

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

£

Current assets

24,893

Non-current assets

2,441

Current liabilities

-

Non-current liabilities

402,189

Equity

374,854

 

 

 

31 December 2021

£

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 £300,000 over two tranches, the first of which will be for £150,000 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 £0.0625 per share for a total of £288,099 as consideration for the acquisition of intellectual property from Aion Therapeutics Inc.

 

 

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