Publication of Annual Report and Accounts

Ananda Developments PLC

15 July 2024

 

15 July 2024

ANANDA DEVELOPMENTS PLC

("Ananda" or the "Company")

Completion of Audit & Publication of Annual Report and Accounts

Ananda's ambition is to be a leading provider of high-quality cannabinoid-based medicines for the treatment of complex, chronic inflammatory pain conditions. 

The information set out below has been extracted from the Group's annual report and audited consolidated accounts for the year ended 31 January 2024. The Company's Annual Report and Accounts for the year ended 31 January 2024, has been published on the Company's website and is available to read at www.anandadevelopments.com/publications.

Chairman's Statement

I am pleased to announce the Company's and the Group's results for the financial year ended 31 January 2024.

During the period in review I have been encouraged by the increased global attention on the potential of cannabidiol ('CBD') to effectively treat a range of complex, chronic inflammatory pain conditions. Whilst there remains some confusion about the regulations surrounding CBD, whether that be in the food supplement or medical space, I am increasingly convinced that the best way to help patients who suffer from a range of conditions for which CBD may be helpful is to develop licensed drugs which will be available on the UK's NHS and be supported by a recommendation from NICE.

I believe Ananda is at the forefront of the development of CBD based drugs with our patent-pending MRX formulations and formulation method. Our first indications, chemotherapy induced peripheral neuropathy (CIPN) and endometriosis are standout targets. If we can get through clinical trials and achieve a marketing authorisation in one of these indications, we will have the best intellectual property protection available in the form of 10 years of market exclusivity for our drug in the treatment of CIPN or endometriosis.

Like all companies in a new sector the road is always long and often winding. This is no different for Ananda and we are grateful for the support of our shareholders who are with us on this journey, as convinced as we are that this is the right work to be doing. The life of a micro-cap company is high risk with the concomitant rewards. There have been only a few times in my long career where I have felt ahead of the curve. The first was when my partner and I pegged large areas of land in North-East Pennsylvania, which later became the billion-dollar value Marcellus Gas Field. The second was in the founding of Clarity Pharmaceuticals Ltd about 15 years ago. Clarity is now a billion-dollar ASX listed company. I believe Ananda is ahead of the curve and assure you of my belief in, and commitment to, its success.

The Year in Review

The most significant corporate event during the year was the completion of the acquisition of MRX Global Limited ('MRX Global') and its wholly owned subsidiary MRX Medical Limited ('MRX'). MRX has invented a proprietary method to formulate essentially THC-free cannabinoid medicines, the first of which, MRX1, is to be used in a Phase II, double-blind, placebo controlled Randomised Controlled Trial (RCT) to investigate the effectiveness of MRX1 in patients with chemotherapy induced peripheral neuropathy (CIPN) and in a Phase II, double-blind, RCT pilot study investigating the effectiveness of MRX1 in patients with endometriosis.

MRX's cannabidiol formulations meet the requirements set out by the National Institute for Health and Care Excellence (NICE) for research into the effectiveness of cannabidiol ('CBD') with no or trace tetrahydrocannabinol (THC).

The clinical trials have received combined commitments of over £1 million in external grant funding and will be carried out by leading investigators in their fields at the University of Edinburgh ('UoE').

The acquisition of MRX Global was completed on 27 March 2023 with the passing of three resolutions at a specially held General Meeting. The Company paid £2,021,520 for 100% of the shares of MRX Global which was settled via the issue of 673,840,000 new ordinary shares at a price of 0.3p per share to the shareholders of MRX Global. At the same time, the Company raised £427,400 to be used as general working capital for the Company to fund its operations. Also, at the time of the acquisition, Professor Clive Page and Jeremy Sturgess-Smith joined the board of Ananda - further information on both Clive and Jeremy can be found on page 16 of this annual report. Certain loan notes held by me (Charles Morgan) were converted into ordinary shares.

In May, we raised a further £550,000 gross proceeds via the restructuring and exercise of outstanding Convertible Loan Notes which were accruing 12.5% interest per annum. Later that month we announced the appointment of SP Angel Corporate Finance LLP ('SP Angel') as the Company's AQSE Corporate Adviser and sole Broker. SP Angel has a dedicated in-house healthcare research team and is a nominated adviser which would be advantageous if the Company were to seek a listing on the AIM Market of the London Stock Exchange. On 6 September 2023, the Company announced it had completed a debt fund raise via the issue of 600,000 £1 Convertible Loan Notes ("CLNs" or "Notes") to two existing shareholders for cash and the capitalisation of £300,000 unsecured debt owed by the Company to me (Charles Morgan). The Notes holds an interest rate of 15%, which accrues for the term of the CLNs, with a conversion price being the lower of a 20% discount to the price at which shares are issued in the next capital raising of £1,000,0000 or more or 0.4 pence, with a minimum conversion price of 0.2 pence. The CLNs automatically convert upon the earlier of 30 November 2025, the listing of the Company on a different exchange or a change of control.

One of our most significant moves for the long-term future of Ananda was the filing, by MRX, of five separate patent applications across the year. The first four applications, made in May 2023, cover three cannabinoid formulations known as MRX1, MRX2 and MRX3. These formulations have been developed (and will continue to be optimized) as cannabidiol-based medicines for the treatment of a number of complex inflammatory indications which are classified as areas of high unmet need and have poor coverage from existing treatment options. The fourth application, made at the same time, covers a proprietary method for formulating these products. The fifth application was made in November 2023 and covers a new cannabinoid formulation known as MRX2T. This formulation is based on MRX's patent pending MRX2 cannabidiol formulation, with the addition of tetrahydrocannabinol (THC). This formulation has been developed specifically for use in Randomised Controlled Trials ("RCTs"). The filing of these patents is critical to the Group's IP strategy and is pivotal to our work 'widening the moat' to protect our business and will help significantly to secure our market position if our clinical trials are successful and we receive a Marketing Authorisation for any of our drug candidates.

MRX1 and MRX2 were launched as unlicensed Cannabis Based Products for Medicinal use in humans (CBPM's) on 27 July 2023 and since the year end, we have started to receive a small number of prescription orders over the last few months - our first revenue! This will begin to show from our interim accounts onwards.

Also throughout the year we continued to progress the two RCTs taking place in partnership with the University of Edinburgh, through the signing of a Drug Supply Agreement (14 November 2023), which governs the supply of both MRX1 and its matched placebo to the CIPN trial and secures the Group a licence over all arising Intellectual Property ("IP") for internal research and development purposes, as well as an option to licence the arising IP for all commercial purposes. We also announced the confirmation of the non-dilutive funders for the endometriosis trial (15 August 2023) and the appointment of Professor Cherry Wainright and Dr Katie Sloper as advisers to assist the Company in developing its in-house capabilities and pipeline of clinical trials.

During the period, the Company also made the difficult decision to pause operations at DJT Plants Limited ('DJT') as DJT's activities had run ahead of the current UK market demand for cannabis-based medicines and the Company could not justify the expenditure required to construct a Good Manufacturing Practices ('GMP') certified facility without a firm understanding of what the return on that investment will be. DJT did, during 2023, complete its medical cannabis cultivation trials. These trials have demonstrated that the low capital, low operating cost cultivation model delivers premium quality medical cannabis flower and large database of detailed standard operating procedures and protocols has now been developed, which will stand DJT in good stead as and when operations recommence in the future. Furthermore, the genetics programme successfully delivered third generation seeds with at least 87.5 per cent. homogeneity, which was in line with early planning, and which would be critical in ensuring that consistent cannabis plants can be grown batch to batch - an absolute must for producing medicines. DJT created and documented the proprietary breeding protocols.

After the end of the reporting period, on 6 February, Vitalii Ratushnyi joined the Company as an adviser. Vitalii is focusing on data and analytics and assisting in our work identifying potential disease areas where our formulations and IP could be utilised most effectively. We also announced on 28 February that MRX had signed a Drug Supply Agreement (with the same key terms as the last) for the endometriosis trial. On the 21 March 2024, we announced the formation of a Scientific Advisory Board, to provide the Group with expert technical advice and guidance.

Also after the end of the period we announced significant pre-clinical findings in a new indication, Heart Failure with Preserved Ejection Fraction (HFpEF). In the study, conducted by researchers at Robert Gordon University in Aberdeen, it was shown that the administration of MRX1 has significant cardioprotective effects in mice, demonstrating its potential as a treatment for patients with HFpEF. HFpEF is a condition which accounts for 50% of heart failure cases and is an area of unmet need. In the study, MRX1 exhibited multiple traits which indicate an effectiveness in mitigating cardiac fibrosis and improving heart health and we have included the data from the study in MRX1's International Patent Application. These successful outcomes suggest MRX1 could be a valuable therapeutic option for HFpEF and other cardiac conditions and Ananda is currently investigating next steps on how to bring this promising treatment to clinical use. For more details on these post-year end events please see Note 27.

In the period in question, the Group incurred a loss of £6,144,162 (Group 2023: £1,139,640) after tax and an R&D repayment, of which approximately £6,932,066 (Group 2023: £1,301,025) represents operational costs. Net assets of the Group at the year-end were £351,345 (Group 2023: £1,204,609).

The Directors' decision to impair DJT's intangible assets and reflecting that impairment on the investment value of DJT on Ananda's balance sheet is the significant item behind the increased loss versus 2023, though it is important to note that these losses are all non-cash. If in the future the estimates used to value the intangible assets (excepting the goodwill) change, then the calculation of the value for those assets could change and it may then be appropriate to reverse all or part of the impairment in the future. Similarly, were DJT's operations to be re-started (as is the intent of management) then the Board would look to reverse the majority to all of the impairment losses.

Charles Morgan

Chairman

To stay abreast of the latest developments at Ananda, we encourage you to follow our social media channels which are: 

•             Investor Hub: investors.anandadevelopments.com

•             Instagram: https://instagram.com/anandadevelopments?igshid=YmMyMTA2M2Y= 

•             LinkedIn: https://www.linkedin.com/company/anadevelopments/  

•             Twitter: https://twitter.com/AnandaPlc

•             Investor Meet Company: https://www.investormeetcompany.com/ananda-developments-plc/register-investor

-Ends-

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

ANANDA DEVELOPMENTS PLC Chief Executive Officer Melissa Sturgess Finance Director Jeremy Sturgess-Smith	[phone] [e-mail]
Investor Hub Engage with us directly at Ananda Developments' by signing up at: investors.anandadevelopments.com
SP ANGEL CORPORATE FINANCE LLP Corporate Finance Richard Morrison Caroline Rowe	[phone]
Corporate Broking Abigail Wayne Rob Rees
YELLOW JERSEY PR Charles Goodwin Zara McKinlay	[phone]

About Ananda Developments

Ananda is an AQSE-listed company whose ambition is to be a leading provider of cannabinoid-based medicines for the treatment of complex, chronic inflammatory pain conditions.

For more information, please visit: https://anandadevelopments.com/

 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 https://investors.anandadevelopments.com/link/lyaY7y

Group Statement of Comprehensive Income

		2024	2023
	Notes	£	£
Administrative expenses	3	(1,729,317)	(880,758)
Depreciation and other amounts written off tangible and intangible fixed assets	3	(5,063,971)	(172,284)
Interest receivable		27	-
Interest payable	7	(138,806)	(247,983)
Operating loss	3	(6,932,067)	(1,301,025)
Loss before taxation		(6,932,067)	(1,301,025)
Tax on loss	8	781,280	-
Loss after taxation		(6,150,787)	(1,301,025)
Other comprehensive income
R&D repayment	22	6,624	161,385
Total comprehensive loss for the year		(6,144,163)	(1,139,640)

Total comprehensive income for the year is all attributable to the owners of the Parent Company.

Earnings per share

Basic and diluted earnings per share (pence)      23           (0.23p)  (0.13p)

Group Statement of Financial Position

		Group 2024	2023	Company 2024	2023
Non-current assets	Notes	£	£	£	£
Goodwill	9	1,677,095	1,266,376	-	-
Other intangible assets	9	197,744	3,204,000	-	-
Total intangible assets		1,874,839	4,470,376	-	-
Property, plant and equipment	10	1,566,303	1,762,468	-	-
Investments	11	-	-	3,789,253	6,966,290
		3,441,142	6,232,844	3,789,253	6,966,290
Current assets Assets under construction	13	-	47,080	-	-
Trade and other receivables	14	77,380	210,144	345,224	124,685
Cash and cash equivalents		84,431	18,837	-	-
		161,811	276,061	345,224	124,685
Current liabilities Trade and other payables	15	(2,565,666)	(1,586,484)	(2,194,768)	(1,481,775)
Convertible loan notes	16	(636,507)	(2,924,812)	(636,507)	(2,924,812)
		(3,202,173)	(4,511,296)	(2,831,275)	(4,406,587)
Provisions for liabilities Deferred tax liability	18	(49,436)	(793,000)	-	-
Net assets		351,344	1,204,609	1,303,202	2,684,388
Equity Called up share capital	21	5,756,057	2,341,110	5,756,057	2,341,110
Share premium account	24	5,328,996	3,468,944	5,328,996	3,468,944
Share options reserve	24	48,398	32,499	48,398	32,499
Retained deficit	24	(10,782,107)	(4,637,944)	(9,830,249)	(3,158,165)
Total equity		351,344	1,204,609	1,303,202	2,684,388

Group Statement of Changes in Equity

	Notes	Share capital £		Share premium account £		Share options reserve £	Retained deficit £	Total £
Balance at 1 February 2022		1,597,031		876,347		18,788	(3,498,304)	(1,006,138)
Year ended 31 January 2023: Loss and total comprehensive income		-		-		-	(1,139,640)	(1,139,640)
Issue of share capital	21	744,079		2,592,597		-	-	3,336,676
Issue of share options		-		-		13,711	-	13,711
Balance at 31 January 2023		2,341,110		3,468,944		32,499	(4,637,944)	1,204,609
Year ended 31 January 2024: Loss and total comprehensive income		-		-		-	(6,144,163)	(6,144,163)
Issue of share capital	21	3,414,947		1,860,052		-	-	5,274,999
Issue of share options		-		-		15,899	-	15,899
Balance at 31 January 2024		5,756,057		5,328,996		48,398	(10,782,107)	351,344

Group Statement of Cashflows

	2024		2023
Notes	£	£	£	£
Cash flows from operating activities
Cash absorbed by operations                               30		(721,698)		(457,354)
Investing activities
Cash on acquisition	24,015		29,653
Purchase of property, plant and equipment	(2,962)		-
Purchase of investments	-		(1,476,597)
Interest received	27		-
Net cash generated from/(used in) investing activities		21,080		(1,446,944)
Financing activities
Proceeds from issue of shares	466,212		74,290
Proceeds from borrowings	300,000		1,888,845
Repayment of borrowings	-		(40,000)
Net cash generated from financing activities		766,212		1,923,135
Net increase in cash and cash equivalents		65,594		18,837
Cash and cash equivalents at beginning of year		18,837		-
Cash and cash equivalents at end of year		84,431		18,837

 

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