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Ananda Developments #ANA – Shareholder Update
Ananda’s ambition is to be a UK grower and provider of carbon neutral, consistent, high quality medical cannabis for the UK and international markets.
Since the Company’s update on 6 October 2021, works have continued on schedule at the medical cannabis research growing facility being constructed in the UK by DJT Plants Limited (“DJT Plants”), the Company’s 50% owned subsidiary.
Research facility construction
The construction of the research facility is near completion. Security fencing has been installed around the designated perimeter of the project area, the reservoir to hold required water is complete and the interior of the medical cannabis growing rooms is complete. Dr Hadar Less, the project’s lead geneticist, spent last week on site to finalise room by room lab requirements, plant nursery growing trollies and other details.
The initial 0.2 hectares of multi-chappelle growing tunnels have been constructed and the design for the plant layout within the units has commenced.
Ananda’s plan
As previously communicated to shareholders, Ananda will conduct a medical cannabis breeding and stabilisation programme designed to create a library of proprietary strains which exhibit metabolic profiles which thrive in local growing conditions and which are efficacious in the treatment of indications including epilepsy, neuropathic pain, scleroderma and Parkinsons disease, as well as for other indications. Subject to further licensing from the Home Office, it is intended to use these learnings to grow medical cannabis for commercial purposes.
As a result of the experience gained by Ananda’s partner, JEPCO, in growing medical cannabis from 2014-2017 for GW Pharmaceuticals, Ananda intends to grow in natural season with no artificial light or heat. The Directors believe that using the full natural spectrum of light will result in superior medical cannabis flower and enhance the opportunity to garner its full benefit. The plan also requires much lower levels of capital and operating expenditure and, in the opinion of the Directors, enables a more scalable business than would be required by the building of large glass houses with artificial light and heat. In addition, DJT Plants’ cannabis growing is expected to be zero carbon.
Ananda’s CEO Melissa Sturgess commented: “As we look to the North American experience of large facilities with their high capital requirements, high operating costs and businesses which are supply led rather than demand led, we see financial pressures. Ananda’s model is clear. We have a low capital, low operating cost model which focuses on patient demand and which we believe will deliver superior medicines with very strong margins.”
UK medical cannabis market
According to UK based medical cannabis advisory group, Maple Tree Consultants, there are now approximately 9,500 medical cannabis patients in the UK. Maple Tree predicts that this number will reach around 25,000 by the end of 2022. This growth is in line with the development of international medical cannabis markets which experienced slow growth immediately after legalisation, followed by increased and then rapid growth around year 3. Medical cannabis was legalised in the UK in late 2018. The Directors of Ananda are encouraged by the potential of the industry in the UK and the opportunity for Ananda. They are also greatly heartened to see medical cannabis becoming more widely acceptable and understood as an efficacious treatment for many health indications.
Sale of shareholding in Liberty Herbal Technologies Limited
Ananda has sold the Company’s holding of 1,642,857 ordinary shares in Liberty Herbal Technologies Limited (“LHT”), the developer of ready to use cannabis sachets for portable vaporisers. The consideration for the disposal is £100,000 in cash, which has been received by the Company.
The proceeds of the disposal will be used to support the ongoing construction, staffing and operation at the medical cannabis research growing facility being developed in the UK by DJT Plants, which is the focus of Ananda’s attention. As announced on 8 June 2021, the Company is in the process of acquiring the remaining 50% of DJT Plants that it does not already own. (https://anandadevelopments.com/wp-content/uploads/2021/09/08062021-Proposed-100-ownership-of-DJT-Plants-Limited.pdf).
Ananda Developments #ANA – Interim Results to 31 July 2021
Unaudited Interim Results for the six months ended 31 July 2021
The Directors present the interim results of Ananda Developments Plc for the period from 1 February 2021 to 31 July 2021.
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.
UPDATE ON INVESTMENTS AND ACTIVITIES
Ananda’s ambition is to be a UK-based grower of carbon neutral, consistent, high quality medical cannabis for domestic and international markets.
ICAN Israel Cannabis Limited (“iCAN”)
In the period under review, iCAN has expanded its conference platform and increased the number of companies in its incubator group. Since the end of the reporting period, iCAN has transitioned to an online offering to maintain revenue streams during the COVID-19 pandemic. The Company has converted its convertible debt into additional equity in 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 increased from launch however due to COVID they stagnated and fell during mid 2020. The Italian operations remain open, ready for relaunch when COVID allows, and 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 (“TAL”) and DJT Group Limited (“DJT”)
TAL is a wholly owned subsidiary of the Company and DJT is owned 50% by TAL and 50% by TAL’s joint venture partners Anglia Salads Limited and JEPCO Marketing Limited (together, “JEPCO”). DJTG is the 100% owner of DJT Plants Limited (“Plants”)
In October 2019, Plants submitted its application to the Home Office Drugs and Firearms Licencing Unity (“DFLU”) to grow >0.2% THC cannabis in Lincolnshire. Throughout the year Plants and its advisors continued to correspond with DFLU officials in order to progress the licence application through the various phases to the current position of awaiting a site visit from the DFLU. The Home Office made a physical site visit on 17 March 2021 and the Licence was received on 17 May 2021.
On 15 February 2021, Ananda announced that it had raised £300,000 for the build out of its research facility at the Licence location. As reported to shareholders at the time, these funds were set aside for the build out. DJT Plants will therefore immediately commence the build out and commissioning of the research facility.
On 8 June 2021, Ananda announced that it had entered into a non-binding Heads of Terms for the proposed acquisition by Ananda of the 50% shareholding in DJT currently owned by JEPCO. This transaction is ongoing.
On 14 July 2021, Ananda announced that it had raised £550,000 by way of the issue of 1p convertible loan notes (“CLNs”) with a fixed life of 2 years and an interest rate of 12.5%. The interest accrued on these notes will be rolled up and satisfied by the issue of ordinary shares at the end of the 2-year terms. The proceeds from the issue of the CLNs will be used to fund the ongoing build of Plants’ cannabis cultivation and research facility.
On behalf of the board
Melissa Sturgess, Chief Executive Officer
21 October 2021
| 6 months to 31 July 2021
Unaudited |
Year ended 31 January 2021 Audited |
6 months to 31 July 2020
Unaudited |
||
| Note | £ | £ | £ | |
| Administrative expenses | (688,498) | (496,110) | (151,089) | |
| Interest received | – | 114 | 114 | |
| Loss from operations | (668,498) | (495,996) | (150,975) | |
| Taxation | – | – | – | |
| Foreign Exchange Translation Gain / (Loss) | 1 | (149) | (887) | 1,157 |
| Total loss for the period | (688,647) | (495,109) | (149,818) |
| Earnings per share | ||||
| Basic and diluted earnings per share (pence) | 2 | (0.10p) | (0.11p) | (0.07p) |
There was no other comprehensive income in the period.
| 6 months to 31 July 2020
Unaudited |
Year ended 31 January 2021 Audited |
6 months to 31 July 2020
Unaudited |
||
| £ | £ | £ | ||
| Fixed assets | ||||
| Investments | 1,313,811 | 1,280,618 | 1,401,250 | |
| 1,313,811 | 1,280,618 | 1,401,250 | ||
| Current assets | ||||
| Debtors | 50,000 | 12,718 | 28,672 | |
| Cash at bank and in hand | – | – | 3,638 | |
| Total current assets | 50,000 | 12,718 | 32,310 | |
| Creditors: amounts falling due within one year | 863,564 | 462,299 | 308,898 | |
| Net current assets | (813,564) | (449,581) | (276,588) | |
| Total assets less current liabilities | 500,247 | 831,037 | 1,124,662 | |
| Capital and reserves | ||||
| Share capital | 1,589,004 | 928,278 | 882,194 | |
| Share premium | 766,336 | 689,229 | 689,229 | |
| Share option reserve | 67,361 | 447,337 | 441,755 | |
| Retained earnings | (1,922,454) | (1,233,807) | (888,516) | |
| Total equity and liabilities | 500,247 | 831,037 | 1,124,662 | |
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
[
21 October 2021
| Share Capital | Share Premium | Share Option Reserve | Retained Earnings | Total | |
| £ | £ | £ | £ | £ | |
| As at 1 February 2021 | 928,278 | 689,229 | 447,337 | (1,233,807) | 831,037 |
| Total comprehensive loss for the period | – | – | – | (688,647) | (688,647) |
| Proceeds from share issue | 660,726 | 77,107 | – | – | 737,833 |
| Issue of share options | – | – | (379,976) | – | (379,976) |
| Balance at 31 July 2021 | 1,589,004 | 766,336 | 67,361 | (1,922,454) | 500,247 |
| Share Capital | Share Premium | Share Option Reserve | Retained Earnings | Total | |
| £ | £ | £ | £ | £ | |
| As at 1 February 2020 | 836,111 | 689,229 | 441,755 | (738,698) | 1,228,397 |
| Total comprehensive loss for the year | – | – | – | (495,109) | (495,109) |
| Proceeds from share issue | 92,167 | – | – | – | 92,167 |
| Issue of share options | – | – | 5,582 | – | 5,582 |
| Balance at 31 January 2021 | 928,278 | 689,229 | 447,337 | (1,233,807) | 831,037 |
| Share Capital | Share Premium | Share Option Reserve | Retained Earnings | Total | |
| £ | £ | £ | £ | £ | |
| As at 1 February 2020 | 836,111 | 689,229 | 441,755 | (738,698) | 1,228,397 |
| Total comprehensive loss for the period | – | – | – | (149,818) | (149,818) |
| Proceeds from share issue | 46,083 | – | – | – | 46,083 |
| Balance at 31 July 2021 | 882,194 | 689,229 | 441,755 | (888,516) | 1,124,662 |
The following describes the nature and purpose of each reserve within owners’ equity:
| Reserve | Description and purpose |
| Share capital | This represents the nominal value of shares issued. |
| Share premium | Amount subscribed for share capital in excess of nominal value. |
| Retained earnings | Cumulative net gains and losses recognised in the statement of comprehensive income. |
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 21 October 2021.
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 2021 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 2021. 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 2021.
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 2021.
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.
| ANANDA DEVELOPMENTS PLC Chief Executive Officer Melissa Sturgess |
+44 (0)7717 573 235 ir@anandadevelopments.com |
| Investor Relations Jeremy Sturgess-Smith |
|
| PETERHOUSE CAPITAL LIMTED Corporate Finance Mark Anwyl Guy Miller |
+44 (0)20 7469 0930 |
| Corporate Broking Lucy Williams Duncan Vasey |
|
| CELICOURT COMMUNICATIONS Mark Antelme Ollie Mills |
+44 (0)20 7520 9266 |
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.
Ananda Developments #ANA – Issue of Equity and Directors’ Interests
As referred to in Ananda’s announcement of 18 May 2021, Charles Morgan (Chairman of the Company) and Melissa Sturgess (Chief Executive Officer of the Company) have each been issued with 100,000,000 ordinary shares of 0.2p each in the Company (“Ordinary Shares”; the “Contingent Consideration Shares”) following the successful grant of a > 0.2% THC Home Office Licence to grow cannabis for research activities.
Application will be made for the Ordinary Shares to be admitted to trading on the Access Segment of the AQSE Growth Market and admission is expected to become effective on 26 May 2021.
Directors’ Interests
Following the issue of the Contingent Consideration Shares, Charles Morgan and Melissa Sturgess are interested in Ordinary Shares as follows:
| Current Holding of Ordinary Shares | Issue of Contingent Consideration Shares | New Holding of Ordinary Shares | Percentage interest in Ordinary Shares | |
| Charles Morgan | 51,071,781 | 100,000,000 | 151,071,781 | 19.03% |
| Melissa Sturgess | 77,724,170 | 100,000,000 | 177,724,170 | 22.39% |
Total Voting Rights
Following this issue, the Company has 793,872,220 Ordinary Shares in issue, each share carrying the right to one vote.
This figure of 793,872,220 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA’s Disclosure and Transparency Rules.
Concert Party
Following the issue of the Contingent Consideration Shares, the members of the Concert Party will be interested, in aggregate, in 343,657,607 Ordinary Shares, representing 43.29 per cent of the Company’s enlarged issued share capital. The maximum potential interest of the Concert Party in the voting rights of the Company is set out in the table below:
| Concert Party Member | Current Holding of Ordinary Shares | Holding of Warrants | Exercise of Options | Maximum interest in Ordinary Shares following exercise of the Warrants by the Concert Party and the exercise of Options |
Maximum %age interest in voting rights following exercise of the Warrants by the Concert Party and the exercise of Options |
| Charles Morgan* | 151,071,781 | 5,530,115 | – | 156,601,896 | 19.03% |
| Melissa Sturgess* | 177,724,170 | 8,070,282 | – | 185,794,452 | 22.57% |
| Jeremy Sturgess-Smith | 1,700,000 | – | 10,451,389 | 12,151,389 | 1.48% |
| Peter Redmond | 8,686,743 | 3,686,743 | – | 12,373,486 | 1.50% |
| Michael Langoulant | 4,474,697 | 1,474,697 | – | 5,949,394 | 0.72% |
| URA | 216 | 216 | – | 432 | – |
| Total Concert Party Holding | 343,657,607 | 362,419,660 | 372,871,049 | 372,871,049 | 45.30% |
| Ordinary Shares in Issue | 793,872,220 | 812,634,293 | 823,085,682 | 823,085,682 |
*In addition to the Ordinary Shares set out above, Charles Morgan and Melissa Sturgess have been granted options over 9,282,778 and 9,282,778 Ordinary Shares respectively, pursuant to the Company’s Incentive Scheme. Charles Morgan and Melissa Sturgess have undertaken not to exercise these options unless such exercise is permitted by the Takeover Code.
Words and expressions defined in the circular to shareholders in the Company dated 24 May 2019, which is available on the Company’s website at www.anandadevelopments.com, have the same meaning in this announcement.
Andrew Hore – Quoted Micro 27 May 2019
NEX EXCHANGE
Ananda Developments (ANA) is amending its investing strategy and acquiring Tiamat Agriculture, which is applying for a UK controlled drug cannabis cultivation and supply licence. Anglia Salads and JEPCO will provide cannabis growing expertise. The new investing strategy will include the cultivation of medicinal cannabis. URA Holdings will subscribe £400,000 for shares at 0.45p each.
AfriAg Global (AFRI) has raised £1m at 0.1p a share and the cash will be used to acquire a 2.34% stake in Apollon Formularies Ltd. AfriAg hopes to gain first refusal to acquire the rest of Apollon in a transaction that would value the company at £40m.
Good Energy (GOOD) will redeem the first Good Energy Bond, which was launched in 2013, before the end of June. The outstanding principal is £3.6m and the cash for repayment will come from the disposals of Newton Downs and Brynwhilach solar farms to the local communities. The cash helped to develop nearly 150MW of renewable generation projects.
Wishbone Gold (WSBN) says that gold recoveries in Honduras have been low and it is considering whether to sell to the joint venture partner or take full control of the operations. Gold trading volumes are increasing but the contribution to overheads is modest.
Panther Minerals (PALM) has applied for an exploration licence for the Marrakai gold project in Northern Territory, Australia. Panther has also acquired additional ground surrounding the former Little Bear mine in Ontario, Canada.
Formation Group (FORM) reported a reduced loss in the six months to February 2019. There is £3.05m in cash in the balance sheet.
Angelfish Investments (ANGP) is investing up to £150,000 in convertible loan notes in ASSIF, which is developing a digital product to improve mental health. The first tranche has been drawn down and the rest will be invested when design work is completed. The loan notes are convertible into up to 35% of ASSIF, depending on the milestones achieved prior to conversion.
NQ Minerals (NQMI) has shipped 34,500 tonnes of precious metal pyrite concentrate from the Hellyer gold mine in Tasmania.
Proton Partners International Ltd (PPI) has started offering high energy proton beam therapy in Bomarsund in Northumberland.
Newbury Racecourse (NYR) non-executive director Dominic Burke has nearly doubled his shareholding to 2.8%. Tim Syder increased his stake to 3.1%.
V22 (V22O) will leave NEX at the close of business on 31 May.
AIM
SafeCharge International (SCH) is recommending a $5.55 (436p) a share cash offer from a subsidiary of fellow payment services provider Nuvei Corporation, valuing the company at £699m. The final dividend of 7.22p a share will be paid. The international payments processor joined AIM five years ago at 162p a share. Nuvei has a strong market position in North America and SafeCharge provides scale in Europe.
Trading in the shares of LXB Retail Properties (LXB) has been suspended following court approval of the dissolution of the company and a return of capital of 1.2p a share. The cancellation of the quotation will happen on 31 May.
Volvere (VLE) has sold its oldest subsidiary Sira Defence and Security for £3m, although management bonuses of £320,000 will be paid out of the proceeds. Sira cost a nominal amount and has contributed cash to the group. This leaves 80%-owned frozen pies maker Shire Foods, which increased its full year pre-tax profit from £635,000 to £854,000. Even stripping out incentive payments relating to the sale of the Impetus business, Shire hardly makes enough profit to cover central overheads.
Lawyer Gateley (GTLY) has confirmed that its full year revenues will be at least £102m and EBITDA at least £19m, an increase of 15%. The growth is a combination of acquisitive and organic. Knights Group (KGH) says that its full year revenues will be not less than £52.4m and underlying pre-tax profit will be ahead of expectations at £9.7m.
Argentina-focused oil and gas producer President Energy (PPC) increased revenues by 160% to $47.2m in 2018 and this enabled it to move into profit. This year pre-tax profit is set to improve from $3.5m to $17.3m as last year’s acquisition makes a more significant contribution and capital investment starts to pay back. Average production is expected to be 3,800 barrels of oil equivalent per day in 2019.
Science Group (SAG) has taken a 9% stake in digital radio technology developer Frontier Smart Technologies (FST) at 12.5p a share. Science offered to acquire the whole company via a cash bid of 30p a share but the proposal met with a negative response from the target’s board and the offer has been withdrawn.
Caledonian Trust (CNN) has renegotiated the conditions of the proposed sale of St Margaret’s House in Edinburgh, which was announced in February 2018. The buyer is still in the process of applying for planning consent and it has three months in which to submit the application, plus 12 months to secure consent. A further three months will be allowed to find a pre-let and Caledonia will vacate the property six months after that. This means that it could be two years before the transaction is completed. The consideration is still £15m, compared with a book value of £8m.
Rose Petroleum (ROSE) has received a £300,000 investment at 1.2p a share and appointed Colin Harrington to the board as executive chairman. Origin Creek Energy has a 14.8% shareholding following the share issue. This replaces the previously announced subscription at a lower share price and Robert Bensh has left the board because of that.
Kibo Energy (KIBO) says that 60%-owned flexible power generation development subsidiary MAST Energy Developments is acquiring Bordersley Power Ltd, which is developing a 5MW gas-fuelled power generation plant and relevant grid connections. The deal is dependent on certain conditions.
Cellcast (CLTV) is owed £453,000 by a Kenyan client of its gaming and lottery consultancy activities, which generated revenues of £395,000 in 2018. The government in Kenya is cracking down on advertising of gambling and it had previously raised taxation rates. Cellcast had £698,000 in the bank at the end of 2018.
Trading in the shares of Dublin-based Amryt Pharma (AMYT) has been suspended ahead of the proposed all share acquisition of the larger Aegerion Pharmaceuticals, which is a subsidiary of Nasdaq-listed Novelion Therapeutics Inc. Amryt plans to raise $60m from a share issue.
MAIN MARKET
Blockchain Worldwide (BLOC) has made a non-binding offer for Entertainment AI Inc although it is still subject to due diligence on the artificial intelligence and machine learning company. Trading in the shares has been suspended.
LED lighting supplier Luceco (LUCE) says trading continues to improve even though sales to UK professional customers are subdued. The overseas market is stronger. Margins are improving.
Motor finance provider S and U (SUS) says that profit from its core business has improved so far this year. The property bridging lending business has increased its loan book to £22m.
Andrew Hore