Apollon Formularies Plc - Interim Results for the 6 Months ended 30 June 2023
Announcement provided byApollon Formularies plc · APOL
Apollon Formularies PLC / EPIC: APOL / Market: AQUIS / Sector: Biotechnology
29 September 2023
APOLLON FORMULARIES PLC
(“Apollon” or the “Company”)
Apollon Formularies plc (AQUIS: APOL, "Apollon" or the "Company"), a
I am pleased to provide shareholders with Apollon's unaudited interim results for the six months ended 30 June 2023 and update on the progress that the Company has made, and continues to make, as it takes steps to transition towards serving a wider global market. Building on the success of 2022, we achieved some important milestones in new international jurisdictions in the first half of 2023.
Intellectual Property Licensing
During the first quarter, Apollon has focused on licensing its intellectual Property (IP) portfolio along with its proprietary formulations and patient protocols to international strategic partners.
In January 2023, Apollon announced that it had granted an exclusive Licensing Agreement with Global Hemp Group (CSE: GHG) for
In July 2023, Apollon announced the granting of an exclusive license agreement to PureCann Pty Ltd., for the territory of
PureCann intends to roll out a significant dispensary network providing cannabis based medicinal products with Apollon products forming the cornerstone of their business. Apollon stands to benefit greatly from PureCann’s current network where Purecann has contractual agreements with multiple GACP/GMP cultivators, where together we would have access to high-quality low-cost biomass reducing input costs dramatically across the production chain. PureCann also has access to two GMP extraction facilities meaning they can fully produce a complete range of certified cannabis based medicinal products’(CBMP's) for use locally within
In September 2023, the Company signed a letter of intent with Supernature Co., Ltd for an Exclusive License Agreement for
On September 12, 2023, Apollon announced a new executed binding Letter of Intent (“LOI”) with Sproutly Canada, Inc. (CSE: SPR). Sproutly is a Canadian public company specialising in proprietary natural biologics drug discovery utilising a proprietary technique known as Aqueous Phytorecovery Process (APP), which extracts high-quality phytonutrients in their complete and proportional profiles. As applied to cannabis, APP can produce water-soluble cannabis solutions that can be stably formulated into medicinal products and traditional beverages without the use of artificial chemical and/or physical means to keep the cannabinoids dissolved in the water base.
The combination of Apollon's AI based therapeutic product formulation with demonstrated success in pre-clinical and clinical testing, clinical trial capability, manufacturing and production laboratories, with Sproutly's APP technology and natural water-soluble ingredients, creates a unique opportunity to develop, new natural biologic therapeutic products with increased bioavailability, faster therapeutic response times, lower patient dose requirements and increased product shelf life.
The binding LOI, allows Sproutly to acquire the assets of Apollon pursuant to an Asset Purchase Agreement. In exchange for the assets of Apollon, Sproutly will issue to Apollon a sufficient number of Sproutly shares so that Apollon will own 49% of the enlarged share capital of Sproutly, post-transaction. If the transaction takes place with the number of outstanding Sproutly shares as are currently in issue, and at an anticipated deemed price of
Sproutly and Apollon have granted each other a 60-day option to conduct due diligence, following which, if agreed to by both companies, the asset acquisition will be completed. The due diligence period may be shortened by mutual agreement. It is understood by the parties that Sproutly must complete one or more audits and take other legal and regulatory steps (the "Steps") to again become active and trading on the Canadian Securities Exchange ("CSE"). The Steps will proceed simultaneously with the due diligence period and the preparation and finalisation of necessary transaction agreements for a closing (the "Closing") of the transaction.
The first half of 2023 was a busy and successful period for Apollon, and we are excited about the Company's prospects as we look towards 2024.
We are working extensively on ways in which to access the global market, by expanding our current capabilities to contract manufacturing in international GMP facilities in addition to the manufacturing, production operations and export opportunities we have currently in
We would like to thank our shareholders for their continued support and investment as we continue to work towards our goal of becoming the premier global medical cannabis and medicinal mushroom company in oncology and chronic pain.
For the six-month period ended 30 June 2023 the Group is reporting a loss of £763,796 (six months ended 30 June 2022: loss £212,436).
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
29 September 2023
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 Group accept responsibility for the contents of this announcement.
For further information please visit www.apollon.org.uk or contact:
Tel: +44 771 198 0221
Stene Jacobs email@example.com
Peterhouse Capital Limited (Corporate Adviser)
Tel: +44 207 220 9795
Guy Miller firstname.lastname@example.org
BlytheRay (Financial PR/IR-
Tel: +44 207 138 3204
Tim Blythe/Megan Ray email@example.com
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|Notes||6 months to 30 June 2023 Unaudited£||6 months to 30 June 2022 Unaudited£|
|Share on loss from associate||-||(45,386)|
|Loss before tax for the period||(763,796)||(212,436)|
|Loss for the period||(763,796)||(212,436)|
|Total comprehensive income for the period||(763,796)||(212,436)|
|Total comprehensive income for the period attributable to equity holders||(763,796)||(212,436)|
|Earnings per share from continuing operations attributable to the equity owners of the parent|
|Basic and diluted (pence per share)||5||(0.1)p||(0.03)p|
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|Notes||As at30 June 2023 Unaudited£||As at31 December 2022 Audited£||As at30 June 2022 Unaudited£|
|Available for Sale Investments||8||15,485||-||-|
|Investments in associate||6||2,829,140||2,996,788||2,625,721|
|Trade and other receivables||677,267||593,262||645,283|
|Cash and cash equivalents||50,934||389||2,653|
|Asset held for Sale||7||384,056||384,056||-|
|Trade and other payables||9||1,842,475||1,096,292||619,442|
|Share option reserve||85,363||85,363||85,363|
|Reverse acquisition reserve||(47,030,385)||(47,030,385)||(47,030,385)|
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
|Note||Share premium£||Share option reserve£||Reverse Acquisition Reserve£||Retained losses£||Total equity£|
|Balance as at 1 January 2022||54,050,764||85,363||(47,030,385)||(4,143,134)||2,962,608|
|Loss for the period||-||-||-||(212,436)||(212,436)|
|Other comprehensive income for the year|
|Items that may be subsequently reclassified to profit or loss|
|Total comprehensive income for the year||-||-||-||(212,436)||(212,436)|
|Total transactions with owners, recognised in equity||288,099||-||-||-||288,099|
|Balance as at 30 June 2022||54,338,863||85,363||(47,030,385)||(4,355,570)||3,038,271|
|Balance as at 1 January 2023||54,671,250||85,363||(47,030,385)||(4,848,025)||2,878,203|
|Loss for the period||-||-||-||(763,796)||(763,796)|
|Other comprehensive income for the year|
|Items that may be subsequently reclassified to profit or loss|
|Total comprehensive income for the year||-||-||-||(763,796)||(763,796)|
|Total transactions with owners, recognised in equity||-||-||-||-||-|
|Balance as at 30 June 2023||54,671,250||85,363||(47,030,385)||(5,611,821)||2,114,407|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|Notes||6 months to 30 June 2023Unaudited£||6 months to 30 June 2022 Unaudited£|
|Cash flows from operating activities|
|Loss from associate||-||45,386|
|Decrease in trade and other receivables||(87,005)||(284,626)|
|Increase/(decrease) in trade and other payables||722,658||440,469|
|Net cash used in operations||(30,754)||(214,993)|
|Cash flows from investing activities|
|Proceeds from sale of investments||8||13,147||-|
|Loans granted (to)/from associate||76,115||(87,340)|
|Net cash used in investing activities||89,262||(87,340)|
|Cash flows from financing activities|
|Loan repaid to director||10||(7,963)||-|
|Net cash generated from financing activities||(7,963)||-|
|Net (decrease)/increase in cash and cash equivalents||50,545||(302,333)|
|Cash and cash equivalents at beginning of period||389||304,986|
|Cash and cash equivalents at end of period||50,934||2,653|
NOTES TO THE INTERIM FINANCIAL STATEMENTS
- General Information
Apollon Formularies Plc is a medicinal cannabis pharmaceutical company incorporated and registered in the
2. Basis of Preparation
The condensed interim financial statements have been prepared in accordance with the Aquis Growth Market Rulebook. As permitted, the Company has chosen not to adopt IAS 34 “Interim Financial Statements” in preparing this interim financial information. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2022. The interim financial statements have been prepared in accordance with
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
Statutory financial statements for the period ended 31 December 2022 were approved by the Board of Directors on 30 June 2023. 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.
The preparation of financial statements requires an assessment on the validity of the going concern assumption. The Directors have reviewed projections for a period of at least 12 months from the date of approval of the financial statements as well as potential opportunities. Any potential shortfalls in funding have been identified and the steps to which Directors are able to mitigate such scenarios and/or defer or curtail discretionary expenditures should these be required have been considered.
The Directors are aware that the Group’s ability to remain a going concern for at least 12 months from the approval of these financial statements is dependent on the Group’s ability to raise further equity and/or debt finance. This is expected to happen within the going concern period of the next 12 months.
In approving the financial statements, the Board has 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.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group’s medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group’s 2022 Annual Report and Financial Statements, a copy of which is available on the Group’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 Group’s 2022 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.
3. Accounting Policies
The same accounting policies, presentation and methods of computation are followed in the interim consolidated financial information as were applied in the Group’s latest annual audited financial statements except for Intangible assets and those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2023 and will be adopted in the 2023 annual financial statements.
A number of new standards, amendments and became effective on 1 January 2023 and have been adopted by the Group. None of these standards have materially affected the Group.
3.1 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 2023. 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 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.
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.
3.2 Intangible assets
Intangible asset expenditure relates to patents and associated data acquired.
Intangible assets are only capitalised if the costs can be measured reliably and will generate future economic benefits in the form of cashflows to the Group.
Intangible assets are not subject to amortisation but are assessed annually for impairment. The assessment is carried out by allocating the patent assets to cash generating units (“CGU’s”), which are based on specific projects. The CGU’s are then assessed for impairment using a variety of methods including those specified in IAS 36.
Whenever the patent assets in cash generating units does not lead to the desired research outcome and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Statement of Comprehensive Income.
The Group is not income generating as yet and therefore there has been no amortization since acquisition. Patents and associated data will be amortized when the Group starts generating revenue relating to the assets.
- Asset held for sale
Asset are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.
- Intellectual property (IP)
IP assets (comprising patents) acquired by the Group as a result of a business combination are initially recognised at fair value or as a purchase at cost and are capitalised.
Internally generated IP costs are written off as incurred except where IAS 38 criteria, as described in research and development above, would require such costs to be capitalised.
The Group’s view is that capitalised IP assets have a finite useful life and to that extent they should be amortised over their respective unexpired periods with provision made for impairment when required. Capitalised IP assets are not amortised until the Group is generating an economic return from the underlying asset and as such no amortisation has been incurred to date as the products to which they relate are not ready to be sold on the open market. When the trials are completed and the products attain the necessary accreditation and clearance from the regulators, the Group will assess the estimated useful economic like and the IP will be amortised using the straight-line method over their estimated useful economic lives.
No dividend has been declared or paid by the Group during the six months ended 30 June 2023 (six months ended 30 June 2022: £nil).
5. Earnings per Share
The calculation of loss per share is based on a retained loss of £763,796 for the six months ended 30 June 2023 (six months ended 30 June 2022: £212,436) and the weighted average number of shares in issue in the period ended 30 June 2023 of 771,191,266 (six months ended 30 June 2022: 748,713,039).
No diluted earnings per share is presented for the six months ended 30 June 2023 or six months ended 30 June 2022 as the effect on the exercise of share options would be to decrease the loss per share.
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
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 2023£|
|Investment in associate|
|At beginning of period||-|
|Share of loss in associate||-|
|At end of period||-|
|Loans to Associate|
|At beginning of period||2,996,788|
|Loans granted from associate||(76,115)|
|At end of period||2,829,140|
The Company’s share of Apollon Jamaica result for the year was a loss of £5,035 (2022: loss of £45,386) of a total loss of £10,275 (2022: total loss of £92,624). The share of the loss in associate for the period ended 30 June 2023 is restricted to the carried forward investment in associate and has therefore been recognised as £nil. As a result, the remaining investment balance carried forward from the period ended 31 December 2022 remains at £nil.
7. Asset Held for Sale
Following the mutual termination of the proposed asset disposal to Global Hemp Group, on 12 September 2023, the Company entered into a binding letter of intent (“LOI”) with Sproutly Canada, Inc. (“Sproutly”).
Under the terms of the LOI, Sproutly will acquire all the Assets of Apollon Formularies plc, other than cash, cash equivalents, and accounts receivables, for a payment of 350,000,000 Sproutly common shares at a deemed price of
Sproutly and Apollon have granted each other a 60-day option to conduct due diligence, following which, if agreed to by both companies, the asset acquisition will be completed. The due diligence period may be shortened by mutual agreement.
The value of Asset Held for Sale is the expected sale proceeds from Sproutly, being the total consideration of shares and cash, converted into pounds sterling using the exchange rates on 12 September 2023 being
8. Available for sale investment
The movement in available for sale investments during the period was as follows:
|Available for sale investments||£|
|Balance as at 1 January 2023||-|
|10,000,000 shares in Global Hemp Group Plc||301,803|
|Sale of Global Hemp Group Plc Shares||(13,147)|
|Fair value adjustment||(273,171)|
|As at 30 June 2023||15,485|
9. Trade and Other Payables
|Current:||30 June 2023£||30 June 2022£|
|Directors Loan (note 10)||152,305||-|
|Tax and payroll||19,976||19,976|
The carrying amounts of the Group’s trade and other payables are denominated in pounds sterling.
10. Director Loan
During the year ended 31 December 2022, the Company entered into a loan agreement with Director Roderick McIllree. The term of the loan is 12 months (extendable for an additional 12 months by mutual agreement) and bears an interest rate of 8% pa. Roderick McIllree is also a shareholder of the Company. At as 30 June 2023, the Company owes Roderick McIllree £152,305.
|30 June 2023£|
11. Events after the reporting date
On 12 September 2023, the Group entered into a binding letter of intent (“LOI”) with Sproutly Canada, Inc. (“Sproutly”), Under the terms of the LOI, Sproutly will acquire all the Assets of Apollon Formularies plc, for a payment of 350,000,000 Sproutly common shares at a deemed price of
12. Approval of interim financial statements
The Condensed interim financial statements were approved by the Board of Directors on 29 September 2023.
View more ...