Ananda Developments Plc - Interim Results for the six months ended 31 July 2020

30 October 2020

Ananda Developments Plc
(“Ananda”, the “Company” and, together with its subsidiaries, the “Group”)

Unaudited Interim Results for the six months ended 31 July 2020

The Directors present the interim results of Ananda Developments Plc for the period from 1 February 2020 to 31 July 2020.

UPDATE ON INVESTMENTS AND ACTIVITIES

Ananda’s vision is to become a significant player in the nascent medicinal and wellness cannabis sectors.  In the period under review, the Company has continued to proceed with caution, given the continued uncertainty around the legislative and regulatory environment for medicinal cannabis and CBD in the UK. The Company generated a loss for the period of £150,975 (2019: loss of £329,380).

ICAN Israel Cannabis Limited (“iCAN”)
iCAN has focused itself on an online conferencing platform over the past 6 months, due to the travel restrictions brought on by the Covid-19 crisis. This has proved popular and, after the end of the period, iCAN hosted its first paid for event.

Ananda holds 180 ordinary shares in iCAN. These shares were issued in two tranches, upon the meeting of certain milestones contained in two convertible loan notes (“CLN”), each with a value of USD100,000. The first CLN converted into 120 ordinary shares in iCAN at a valuation of USD10M and the second CLN converted in to 60 ordinary shares in iCAN at a valuation of USD20M. The shares held by Ananda represent 0.9% of the issued share capital of iCAN.

Liberty Herbal Technologies Limited (“LHT”)
LHT launched hapac^®, a dry herb medicinal cannabis inhaling technology, in Italy in late 2018.  LHT was founded by ex-British American Tobacco executives from the e-cigarette innovation and sales divisions, who bring with them a deep understanding of strict regulatory environments and the procedures and protocols required to develop and commercialise technologies of this nature.  Sales of hapac^® have unfortunately been suspended due to the reduced demand during the COVID-19 pandemic.  The Board of LHT continues to monitor the Italian situation. In the meantime,  the company continues to refine the dry herb vaping device and explore opportunities to grow the business in the North American, European and UK markets.

Tiamat Agriculture Limited (“Tiamat” or “TAL”) and DJT Group Limited (“DJT”)
DJT Plants Limited is a wholly owned subsidiary of DJT Group Limited, which is 50% owned by Tiamat Agriculture Limited, which is a 100% subsidiary of Ananda. DJT has made an application to the UK Home Office to grow >0.2% THC cannabis in Lincolnshire. 

Further to the Company’s announcement on 18 May 2020, the minutes of the meeting between DJT  and the Medicines and Healthcare Products Regulatory Agency have been finalised, agreed between the parties and sent to the Home Office to support the Company’s application for a licence to grow medicinal cannabis.  The Directors believe that this document provides additional evidence that the growing plans of DJT are legitimate and credible.

The proposed growing facility site has also been visited by representatives of the Lincolnshire police, who have confirmed they are happy with the proposed security measures. The Home Office has advised that it will make a physical site visit as soon as COVID restrictions allow, and has confirmed that it will not require the facility itself to be constructed before a decision is made about the granting of a licence. If a licence is granted in such circumstances, it would be conditional on build out of the facility to accommodate the growing and breeding of cannabis for the Company’s medicinal cannabis research.

It is the Company’s intention to transition its  research facility to commercial growing as soon as practicable and subject to Home Office approval.

Ananda’s Medicinal Cannabis Growing Plans
DJT’s joint venture partner is the JEPCO Group, comprised of JEPCO Limited and Anglia Salads Limited (“JEPCO”). DJT’s proposal is to commence growing up to 1,105 cannabis plants in Lincolnshire, and to ultimately increase to growing on an area up to 30 hectares (accommodating approximately 300,000 cannabis plants).  The management of the growing will be undertaken by JEPCO, which has previously grown medicinal cannabis in the UK for a large pharmaceutical company. 

The initial objective is to genetically stabilise 65 strains of cannabis to ensure high predictability, in collaboration with Dr Dedi Meiri’s laboratory in Israel, which it is hoped may be useful to treat a range of conditions such as Parkinson’s Disease, epilepsy and neuropathic pain.

Ananda’s objective is to convert the genetic stabilisation growing to commercial growing when demand builds in the UK medicinal cannabis industry and it is approved to do so by the Home Office.

JEPCO has successfully grown medicinal cannabis in the UK to very high standards, (for the pharmaceutical industry) and at low cost.  The Directors believe a UK source of medicinal cannabis will be well received, especially given the possibility of global supply chains continuing to break down.

Development of the UK’s medicinal cannabis sector
Medicinal cannabis was first available on prescription in the UK in November 2018.  Since then, there has been a considered focus on doctor education to drive patient access.  Professor Mike Barnes, the doctor responsible for securing the first medicinal cannabis prescription in the UK, believes that private clinics in the UK, which employ doctors who are trained to prescribe medicinal cannabis, are now seeing a 30% increase in prescriptions each month. 

Notwithstanding the significant challenges posed by COVID-19, the Directors remain committed to the medicinal cannabis sector and its objectives and believe that the medicinal cannabis and wellness/CBD sectors will continue to mature globally and, in the UK, to provide significant long term returns for shareholders.

On behalf of the board

Melissa Sturgess, Chief Executive Officer
29.10.2020

Interim Statement of Comprehensive Income
Period Ended 31 July 2020

There was no other comprehensive income in the period.

Interim Statement of Financial Position
Period Ended 31 July 2020

The interim financial statements were approved and authorised for issue by the Board and were signed on its behalf by:

Melissa Sturgess
Chief Executive Officer
29.10.2020

Interim Statement of Changes in Equity
Period Ended 31 July 2020

The following describes the nature and purpose of each reserve within owners’ equity:

Interim Statement of Cash Flows
Period Ended 31 July 2020

Notes to the Interim Financial Statements
Period Ended 31 July 2020

ACCOUNTING POLICIES

General information

Ananda Developments Plc’s interim financial statements are presented in British Pound Sterling (GBP) which is the functional currency of the parent company.  These interim financial statements were approved for issue by the Board of Directors on 22.10.2020.

The financial information set out in these interim financial statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.  The Company’s statutory financial statements for the year ended 31 January 2019 have been filed with the Registrar of Companies.  The auditor’s report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006.

These interim results have not been audited nor have they been reviewed by the Company’s auditors under ISRE 2410 of the Auditing Practices Board.

Basis of preparation

These interim financial statements are for the six month period ended 31 July 2020.  They have been prepared following the recognition and measurement principles of FRS 102.  They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements for the period ended 31 January 2020. 

These interim financial statements have been prepared on a going concern basis which the Directors believe to be appropriate.

These interim financial statements have been prepared in accordance with the accounting policies adopted in the financial statements for the period ended 31 January 2020.

1.           Foreign currency transactions

Transactions in foreign currencies are translated to GBP at the exchange rates at the dates of the transactions.  Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to GBP at the exchange rate on that date.  Foreign exchange differences arising on translation are recognised in the statement of comprehensive income. 

2.           Earnings per share

The calculation of earnings per share is based on the loss attributable to ordinary shareholders divided by the average number of shares in issue during the period.

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

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.