MDH Mendell Helium Plc

 

1.         GENERAL INFORMATION

1.1          Group

 

Voyager Life plc ("Voyager" or "the Company") and its subsidiary (together "the Group") are primarily involved in the development and retail of products for the health and wellness market. The Company is a public limited company and is incorporated and domiciled in Scotland.  The Company was incorporated on 12 November 2020 with Company Registration Number SC680788 and its registered office and principal place of business is Arran House, Arran Road, Perth, Perthshire PH1 3DZ, United Kingdom.

 

1.2          Company income statement

 

The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these financial statements.  The loss for the financial period dealt with in the accounts of the Company amounted to £1.077 million.

 

2.            PRINCIPAL ACCOUNTING POLICIES

 

2.1          Basis of preparation

 

The Consolidated Financial Statements of the Group and Company have been prepared in accordance with UK-adopted international accounting standards  and the requirements of the Companies Act 2006 and regulations made under it.  The Consolidated Financial Statements have been prepared under the historical cost convention.  The principal accounting policies are set out below and have, unless otherwise stated, been applied consistently for all periods presented in these Consolidated Financial Statements. 

 

The financial statements are prepared in pounds sterling and amounts are rounded to the nearest thousand.

 

2.2          Basis of consolidation

 

The Group financial information incorporates the financial information of the Company and its subsidiaries undertaking, drawn up to 31 March 2024.

 

The subsidiaries included are as follows:

 

Entity name	Country of incorporation	Registered address	Nature of business	% voting rights and shares held
Voyagercann Limited	Scotland	Arran House, Arran Road, Perth, Perthshire,    PH1 3DZ	Production of products for the health and wellness market	100% of ordinary shares
Amphora Health Limited	England	Riverbank House, 1 Putney Bridge Approach, London SW6 3JD	Wholesale and retail of CBD oils and vapour products	100% of ordinary shares
Infused Amphora Limited	England	Riverbank House, 1 Putney Bridge Approach, London SW6 3JD	Wholesale and retail of CBD oils and vapour products	100% of ordinary shares (owned by Amphora Health Limited)

 

Subsidiaries are entities over which the Company has control. The Company controls an entity when the Company 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.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.

 

Investments in subsidiaries are accounted for at cost less impairment.

 

Where necessary, adjustments are made to the financial information of subsidiaries to bring accounting policies into line with those used for reporting the operations of the Company. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

2.3          Going concern

 

The financial statements have been prepared on a going concern basis which assumes that the Company will continue in operational existence for the foreseeable future. 

 

The Company has historically generated revenues from the sale of CBD and other plant-based health & wellness products although, to date, revenues have not proved sufficient to support all of its overheads. However, as explained above, the Company has subsequently taken an option to acquire the entire issued share capital of M3 Helium Corp. and move to become a producer of helium in Kansas, USA.  The proposed sale of plant-based health & wellness business will remove a substantial part of the Company's overheads, primarily staff and property costs.

 

It is the Board's belief that, given the prevailing strong helium price, the Company will be better placed to attract investment with its new operations.

 

The Company is currently financed through investment by its shareholders and, since the end of the period, the Company raised £864,468, before costs, from the issue of shares. The Company made a loss for the period of £1.1 million before taxation and foreign exchange adjustments. Nonetheless, the Company held bank balances of £162,508 at the year end.

 

In assessing whether the going concern assumption is appropriate, the Directors take into account all available information for the foreseeable future, in particular for at least the twelve months from the date of approval of the financial statements. This information includes growing revenue opportunities, management prepared cash flows forecasts, the Company's current cash balances and the Company's existing and projected monthly running costs. Furthermore the Directors are mindful that, if the Company needs to raise further funds over the 12 months following approval of the financial statements in order to execute its strategy and for working capital, it has the ability to access additional financing, if required, over the next 12 months.  Specifically, the Company successfully completed two fundraisings since the end of the financial year through the issue of new ordinary shares.

 

The Directors therefore have made an informed judgement at the time of approving the financial statements that there is a reasonable expectation that the Company has adequate resources 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.

 

The auditors have made reference to going concern by way of a material uncertainty within their audit report.

 

2.4          Revenue recognition

 

Revenue is recognised at the fair value of the consideration received and represents amounts receivable for goods provided in the normal course of business net of sales incentives, discounts, returns and VAT.

 

Revenue is recognised when the performance obligations have been satisfied and the goods have been delivered to the customer.  It is the Company's policy to sell its products to the end customer with a right of return within 30 days. Accumulated experience is used to estimate such returns at the time of sale at a portfolio level (expected value method). The number of products returned has been small and it is highly probable that a significant reversal in cumulative revenue recognised will not occur.

 

Sale of goods - trade customers 

Sales to trade customers may be on credit terms.  Invoices are generated at the time of order and goods are typically despatched on the same day. Revenue from the sales of goods is recognised when confirmation of delivery to the customer has been received under the terms of the contract and when the significant risks and rewards of ownership have been transferred to the customer.

 

Sale of goods - retail

Sales are recognised when the goods have been sold to the customer in-store or at trade fairs and the performance obligations have been satisfied, namely when the customer is in possession of the products.  Retail sales are usually paid in cash or by credit or debit card.  The recorded revenue is the amount of the sale (net of VAT) and the credit card fees are charged to administrative expenses.

 

Sale of goods - online

Payment of the transaction price is due immediately when the customer purchases the product and delivery is arranged in-house. Revenue is recognised when the goods are dispatched and the performance obligations have been satisfied.  On-line sales are typically paid for by credit or debit card.  The recorded revenue is the amount of the sale (net of VAT) and the credit card fees are charged to administrative expenses.

 

2.5          Foreign currency translation

 

a)         Functional and presentation currency

Items included in the Historic Financial Information of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the Group is pounds sterling. The Historic Financial Information is presented in pounds sterling which is the Company's and Group's functional currency and amounts are rounded to the nearest thousand.

 

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 period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income.

 

2.6          Employee benefits - defined contribution pension costs and private healthcare

 

The Company operates a defined contribution plan for its employees.  A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity.  Once the contributions have been paid, the Company has no further payment obligations.

 

The contributions are charged to the statement of comprehensive income as they become payable in accordance with the rules of the scheme.  Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the statement of financial position.

 

The Company also provides certain employees with private healthcare.  Eligible employees opt into the scheme whereupon premiums are paid by the Company.  These premiums are charged to the statement of comprehensive income as they become payable.

 

2.7          Investment in subsidiaries

 

Investment in subsidiaries comprises shares in the subsidiaries stated at cost less provisions for impairment. 

 

2.8          Financial assets including trade and other receivables

 

Initial Recognition

A financial asset or financial liability is recognised in the statement of financial position of the Group when it arises or when the Group becomes part of the contractual terms of the financial instrument.

 

Classification

Financial assets at amortised cost

The Company measures financial assets at amortised cost if both of the following conditions are met:

·    the asset is held within a business model whose objective is to collect contractual cash flows; and

·    the contractual terms of the financial asset generating cash flows at specified dates only pertain to capital and interest payments on the balance of the initial capital.

 

Financial assets which are measured at amortised cost, are measured using the Effective Interest Rate Method (EIR) and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

 

Derecognition

A financial asset is derecognised when:

·    the rights to receive cash flows from the asset have expired, or

·    the Company has transferred its rights to receive cash flows from the asset or has undertaken the commitment to fully pay the cash flows received without significant delay to a third party under an arrangement and has either (a) transferred substantially all the risks and the assets of the asset or (b) has neither transferred nor held substantially all the risks and estimates of the asset but has transferred the control of the asset.

 

Impairment

The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original expected interest rate (EIR). The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

 

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

 

For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Company applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Company does not track changes in credit risk, but instead, recognizes a loss allowance based on the financial asset's lifetime ECL at each reporting date.

 

The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.

 

At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit impaired. 

 

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

 

2.9          Financial liabilities including trade and other payables

 

Financial liabilities measured at amortised cost using the effective interest rate method include trade and other payables that are short term in nature. Financial liabilities are derecognised if the Company's obligations specified in the contract expire or are discharged or cancelled.

 

Trade payables other payables are non-interest bearing and are stated at amortised cost using the effective interest method.

 

2.10        Intangible assets

 

Identifiable intangible assets are recognised when the Company controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured.

 

Intangible assets with finite lives are stated at acquisition cost less accumulated amortisation less any identified impairment.  The amortisation period and method are reviewed at least annually and adjusted as appropriate.

 

Intangible assets comprise those acquired at the time of the acquisition of the Cannafull brand, website and customer lists and are being amortised on a straight-line basis over the expected useful economic life of three years which has been deemed by the Directors to be an appropriate period.  Amortisation is charged to administrative expenses.  The acquisition of Amphora Health Limited is treated as an asset acquisition and therefore also charged to administrative expenses. 

 

Amortisation is provided on all intangible assets at rates calculated to write off the cost, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

 

Identifiable assets acquired                        3 years

 

Useful economic lives and estimated residual value are reviewed annually and adjusted as appropriate.

 

2.11        Tangible fixed assets

 

Tangible fixed assets are measured at historical cost less accumulative depreciation and any accumulative impairment losses. Historical cost includes expenditure that is directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management. 

 

Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

 

Fixtures, fittings and equipment                               3-5 years

Motor vehicles                                                  4 years

Right-of-use assets                                         over the lease term

 

Useful economic lives and estimated residual values are reviewed annually and adjusted as appropriate.

 

 

 

 

2.12        Impairment testing of intangible and tangible assets

 

At each balance sheet date, the Company assesses whether there is any indication that the carrying value of any asset may be impaired.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 

 

2.13        Leases

 

Leases are accounted for under IFRS 16.  IFRS 16 distinguishes leases and service contract on the basis of whether an identified asset is controlled by a customer.  A model where a right-of-use asset and a corresponding liability are recognised for all leases by lessees (i.e. all on balance sheet) except for short term leases and leases of low value assets.

 

The right-of use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability.  The lease liability is initially measured at the present value of the lease payments that are not paid at that date.  Subsequently the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications, amongst others.

 

The Group assesses whether a contract is, or contains, a lease at the inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (less than £5,000 per annum, which are considered immaterial), which fall out of IFRS 16 scope and are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.

 

2.14        Inventory

 

Inventory is measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out (FIFO) method. The carrying amount of inventory sold is recognised as an expense in the period in which the related revenue is recognised and earned.

 

The cost of inventories comprise all costs of purchase, costs of conversion (from raw materials to finished goods) and other costs incurred in bringing the inventories to their present location and condition.

 

Voyager Life plc incurs some costs of conversion on inventory items from white label and private label skincare manufacturing through its VoyagerCann division. These costs of conversion include costs directly related to production, such as direct labour as well as a systematic allocation of fixed and variable production overheads that are incurred in converting materials into finished goods.

 

Fixed production overheads are those indirect costs of production that remain relatively constant regardless of the volume of production, such as depreciation and maintenance of factory equipment and right-of-use assets used in the production process. Variable production overheads are those indirect costs of production that vary directly, or nearly directly, with the volume of production, such as indirect materials and indirect labour.

 

2.15        Cash and cash equivalents

 

Cash and cash equivalents comprise cash at bank and in hand, that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

2.16        Equity

 

Share capital is determined using the nominal value of shares that have been issued.

 

The Share premium account includes any premiums received on the initial issuing of the share capital.  Any transaction costs associated with the issuing of shares are deducted from the Share premium account, net of any related income tax benefits.

 

Equity-settled share-based payments are credited to a Share-based payment reserve as a component of equity until related options or warrants are exercised.

 

Retained loss includes all current and prior period results as disclosed in the income statement.

 

2.17        Share-based payments

 

During the year, the Company issued no share options to employees and no share warrants to advisers as part of their fees.

 

Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant.  The fair value so determined is expensed on a straight-line basis over the vesting period, based on the Company's estimate of the number of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

 

Fair value is measured using a Black-Scholes pricing model.  The key assumptions used in the model have been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

 

2.18        Taxation

 

The tax expense for the period comprises current tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised directly in equity. In this case the tax is also recognised directly in other comprehensive income or directly in equity, respectively.

 

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

 

Deferred tax represents the tax expected to be payable or recoverable on the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The Company has tax losses which can be used to offset future profits. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. No deferred tax asset has been recognised in the current period.

 

2.19        Research and development

 

The Company undertakes research and development activities with the aim of formulating and developing new bespoke CBD and hemp products.  Research and development costs (principally staff costs and ingredients) are expensed as incurred. 

 

2.20 Government grants

 

Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

 

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support with no future related costs are recognised as other income in the profit and loss in the period in which they become receivable.

 

2.21     Critical accounting judgements and key sources of estimation uncertainty

In the process of applying the entity's accounting policies, management makes estimates and assumptions that have an effect on the amounts recognised in the financial statements. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.  The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period, are those relating to the valuation of share based payments.

 

Operating the extraction and manufacturing facility in Poland

On 15 December 2022, Voyager contracted to acquire a company which owned and operated an extraction and manufacturing facility in Poland and, on 1 January 2023, Voyager assumed management of the operations. The proposed acquisition included the land that the facilities are built on and under Polish law non-EU purchases of real estate must obtain government approval. The acquisition agreement included a longstop date of 30 June 2023 and, when approval was not granted by that date, the acquisition lapsed and the facility was returned to its former owners.

 

IFRS 3 establishes the accounting and reporting requirements for the acquirer in a business combination. IFRS 10 provides that an investor controls an investee (the Polish company) if and only if the investor (Voyager) has all of the following elements:

·       Power over the investee, i.e. the investor has existing rights that give it the ability to direct the relevant activities (the activities that significantly affect the investee's returns).

·       Exposure, or rights, to variable returns from its involvement with the investee.

·       The ability to use its power over the investee to affect the amount of the investor's returns.

 

The Directors consider that control of the company was never achieved on the basis that:

(i)    The acquisition agreement never became unconditional;

(ii)   The board of directors of the investee business comprised exclusively representatives of the seller;

(iii)  Polish regulations require approval of several matters critical to the business operations (including annual leave, travel and certain exports) to be given only by a director of the business;

(iv) Operation of the business' bank account was in conjunction with the seller; and

(v)  The acquisition agreement contained certain restrictions on Voyager's operation of the facility.

Consequently, costs of operating the Polish company were reflected in an outstanding loan balance which the Board has prudently provided against this year.

 

Acquisition of Amphora Health Limited

 

On 30 January 2024, Voyager contracted to acquire the entire issued share capital of Amphora which itself owned 100% of Infused Amphora Limited. The acquisition was announced on 30 January 2024 and completed on 7 March 2024. 

 

As a result of the SPA, on 7 March 2024, Voyager assumed control of Amphora.  The acquisition comprised:

·    Inventory owned by Amphora

·    The listing of 23 edible CBD products on the FSA's novel foods list

·    Various trademarks and logos owned by the Amphora brand

·    A website and various social media accounts operated by Amphora

The consideration for the acquisition was £50,000 satisfied by the issue of 416,666 ordinary shares.  In addition, a further 416,666 new ordinary shares at a price of 12 pence per share may be issued in the event, inter alia, that sales of Amphora or Infused Amphora branded products exceed £100,000 over the 24 month period from completion.

 

The acquisition specifically did not include any premises, employees, existing customers or active operations.  Amphora was essentially in a dormant state and had been for some time which is the primary reason why Voyager was able to secure the company at what the Board considered to be an attractive price.

 

IFRS 3 establishes the accounting and reporting requirements for an acquirer but the treatment differs according to whether or not the acquisition meets the definition of a business.  Taking account of these provisions and the facts of the acquisition, Voyager has treat the acquisition as an asset acquisition and not a business on the basis that:

·    Amphora had no employees or premises.

·    Amphora had no recent or ongoing operations.

·    The acquisition included no working capital, cash, debt, creditors or debtors

 

2.22     New and amended statements adopted by the Group

At the date of approval of these financial statements, certain new standards, amendments to and interpretations of existing standards have been published but are not yet effective.  None of these pronouncements have been adopted early by the Group, and they have not been disclosed as they are not expected to have a material impact on the Group's financial statements.  Management anticipates that all pronouncements will be adopted for the first period beginning on or after their effective date.

 

2.23        Segmental reporting

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

 

The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as Nick Tulloch.

 

All operations and information are reviewed together so that at present there is only one reportable operating segment.

 

3.            REVENUE

 

Revenue arising from the sale of goods by type is analysed as:

 

2024   2023     £'000   £'000   Shop revenue 142 186 Trade sales 125 57 Website and other sales 37 41 Total revenue 304 284

4.            SEGMENT REPORTING

 

Operating segments are not reported on as there are no determined segments. There is deemed to be only one segment being the development and retail of the products for the health and wellness market and as such the information presented to the Chief Operating Decision Maker ("CODM") is the same as that set out in the primary statements. All revenue has been generated in the UK and is recognised at a point in time.

 

5.	OTHER OPERATING INCOME	2024		2023
		£'000		£'000
	Employment grants	2		19
		2		19

 

There are no unfulfilled conditions relating to the grant schemes at 31 March 2024.

 

 

 

 

 

6.

OPERATING EXPENSES BY NATURE

 

				2024						2023
				£'000						£'000
Auditors' Remuneration				69						63
Depreciation of tangible fixed assets				25						22
Depreciation of right-of-use assets				88						84
Share-based payments charge				51						67
Non-domestic rates				42						36
Short term operating lease costs				21						23
Wages and Salaries				558						640
Other operating costs				384						322
7.	AUDITOR'S REMUNERATION 2024   2023 £'000   £'000   Audit of the accounts of the parent company 53 60 53 60
8.		STAFF NUMBERS AND COSTS
		The average number of staff during the period, including Directors, was 25.   The aggregate payroll costs of these persons were as follows:
					2024						2023
					£'000						£'000
Wages and salaries*					589						640
Social security costs					32						39
Healthcare costs					3						2
Contributions to defined contribution pension plans					16						17
					640						698
Charge in respect of share-based payments					51						67
					691						765

*Including manufacturing salaries that have been included in cost of sales on the statement of comprehensive income.

Directors' emoluments

There were no directors who received or exercised share options during the year.

 

The directors' aggregate emoluments in respect of qualifying services were:

 

	Salary	Pension	Benefits	Share based remuneration	2024 TOTAL
	£'000	£'000	£'000	£'000	£'000
Executive Director:
N Tulloch**	90	9	2	-	101
	90	9	2	-	101
Non-executive Directors:
E Boyle*	45	-	-	-	45
J Overland***	30	-	-	-	30
	75	-	-	-	75

 

* Eric Boyle was appointed as Non-executive Chairman of the Company pursuant to a letter of appointment dated 28 June 2021. With effect from Admission to AQSE on 1 July 2021, Mr Boyle's director's fee is £45,000 pa.

 

** Nick Tulloch was appointed as Chief Executive Officer of the Company pursuant to a service agreement dated 28 June 2021.  With effect from Admission to AQSE on 1 July 2021, the basic salary payable to Mr Tulloch is £90,000 per annum and in addition a discretionary bonus in relation to each financial year which may be payable in cash and/or shares. The Company is also required to make a contribution equal to 10 per cent of Mr Tulloch's annual salary into his personal pension and provide private medical insurance for him and his family.

 

*** Jill Overland was appointed on 8 June 2021, with a salary of £30,000 per annum.

 

Key management

The Directors consider that key management personnel are the Directors of Voyager Life plc.

 

9.	NET FINANCE EXPENSES	2024		2023
		£'000		£'000
	Net finance expenses comprise:
	Finance charge on lease liabilities for assets-in-use	21		23
	Interest Income	(6)		(4)

 

10.		TAXATION   Recognised in the income statement	2024					2023
			£'000				£'000
Current tax			-				-
Deferred tax			-				-
Taxation charge/credit for the period			-				-
Loss on continuing operations before tax			(1,104)				(1,111)
Tax using the UK corporation tax rate of 25%			(276)				(211)
Impact of costs disallowable for tax purposes			20				41
Impact of unutilised tax losses carried forward			256				170
Taxation charge for the period			-				-
	The UK Government enacted changes to the UK tax rate in 2020, resulting in the rate remaining at 19%.  In the 2021 Budget, the UK Chancellor announced that legislation would be proposed to increase the main rate of corporation tax to 25% from 1 April 2023.
	Tax has been calculated based on the rate of 25% which was effective for the period.  The taxation charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the Company operates.    At 31 March 2024, the Group had unutilised tax losses of 2,379,000.   The deferred tax asset not provided for in the accounts based on the estimated tax losses and the treatment of temporary timing differences, is approximately £595,000.

 

11.          LOSS PER SHARE

 

The calculation of the loss per share is based on the loss for the financial period after taxation of £1.077 million and on the weighted average of ordinary shares in issue during the period. 

 

The options outstanding at 31 March 2024 are considered to be non-dilutive in that their conversion into ordinary shares would not increase the net loss per share.  Consequently, there is no diluted loss per share to report for the period.

 

	2024		2023
Weighted average shares in issue	13,059,359		10,042,872
(Loss)/earnings (£'000)	(1,077)		(1,111)
(Loss)/earnings per share	(8.2)		(11.1)

 

 

 

12.          INTANGIBLE ASSETS

 

Group
		Identifiable assets acquired
		£'000
Cost
At 31 March 2023		3
Additions		43
At 31 March 2024		46
Amortisation
At 31 March 2023		(1)
Additions		(1)
At 31 March 2024		(2)
Net book value
At 31 March 2023		2
At 31 March 2024		44
Company
		Identifiable assets acquired
		£'000
Cost
At 31 March 2023		3
Additions		-
At 31 March 2024		3
Amortisation
At 31 March 2023		(1)
Additions		(1)
At 31 March 2024		(2)
Net book value
At 31 March 2023		2
At 31 March 2024		1

 

The intangible assets arose from the acquisition of the trade and assets of Cannafull Limited and Ascend Skincare in December 2021 and Amphora Health Limited in March 2024 and primarily relate to the value of the  novel food licenses.  These are being amortised over a period of 3 years.

 

13.       TANGIBLE ASSETS

Group	Fixtures, fittings and equipment		Motor vehicles		Total
	£'000		£'000		£'000
Cost
At 31 March 2023	47		39		86
Additions	5		-		5
At 31 March 2024	52		39		91
Depreciation
At 31 March 2023	(21)		(10)		(31)
Charge for the period	(16)		(10)		(26)
At 31 March 2024	(37)		(20)		(57)
Net book value
At 31 March 2023	26		29		55
At 31 March 2024	15		19		34
Company	Fixtures, fittings and equipment		Motor vehicles		Total
	£'000		£'000		£'000
Cost
At 31 March 2023	47		39		86
Additions	4		-		4
At 31 March 2024	51		39		90
Depreciation
At 31 March 2023	(21)		(10)		(31)
Charge for the period	(16)		(10)		(26)
At 31 March 2024	(37)		(20)		(57)
Net book value
At 31 March 2023	26		29		55
At 31 March 2024	14		19		33

 

14.          RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

 

The Company leases a number of properties for its retail operations and has accounted for these arrangements under IFRS 16 - Leases, which sets out the principles for recognition, measurement, presentation and disclosure of leases.

 

The interest rates implicit in the leases of between 3% per annum and 4% per annum have been applied.  The leases are repayable in monthly instalments.  Each of the Company's leases for its three retail premises is for an initial 10-year term and thereafter extendable by agreement.  The leases for its Dundee and St Andrews premises contain break clauses at 3 years and 5 years respectively.  The Company makes assumptions in respect of rent review dates within its internal planning and analysis.

 

The carrying amounts of the right of use assets recognised and the movements during the period are shown below:

 

Group   ROU Asset   £'000 Cost   At 31 March 2023 715 Additions                              37 At 31 March 2024 752 Amortisation   At 31 March 2023 (131) Additions (87) At 31 March 2024 (218) Net book value   At 31 March 2023 584 At 31 March 2024 534                         Company   ROU Asset   £'000 Cost   At 31 March 2023 715 Additions                               -   At 31 March 2024 715 Amortisation   At 31 March 2023 (131) Additions (78) At 31 March 2024 (209) Net book value   At 31 March 2023 584 At 31 March 2024 506

Group

£'000

Lease liabilities recognised

572

The lease payments during the year amounted to £99,620

The maturity of the leases outstanding is as follows:

Group

£'000

Current < 1 year

80

Non-current 2 - 5 years

302

Non-current > 5 years

190

Total Non-current

492

Total Lease liability at 31 March 2024

572

Company

£'000

Lease liabilities recognised

544

The lease payments during the year amounted to £90,020

The maturity of the leases outstanding is as follows:

Company

£'000

Current < 1 year

62

Non-current 2 - 5 years

292

Non-current > 5 years

190

Total Non-current

482

Total Lease liability at 31 March 2024

544

15.

INVESTMENT IN SUBSIDIARIES

2024

2023

Company

£'000

£'000

Investment in subsidiary

50

-

 

Subsidiary Companies:

As at 31 March 2024, the Company had three subsidiaries, VoyagerCann Limited, Amphora Health Limited and Infused Amphora Limited, all of which are owned 100%.  VoyagerCann Limited was incorporated in Scotland with its registered office at Arran House, Arran Road, Perth, Perthshire PH1 3DZ.  Amphora Health Limited and Infused Amphora Limited are incorporated in England with its registered offices at Riverbank House, 1 Putney Bridge Approach, London SW6 3JD.  The acquisition of Amphora Health Limited has been treated as an asset acquisition and not as a business acquisition under IFRS3.

 

Acquisition of Amphora Health Ltd:

 

On 7 March 2024 Voyager Life plc acquired 100% of the equity of Amphora Health Ltd and Infused Amphora Ltd.  At acquisition, under IFRS3, a business must have three elements: inputs, processes and outputs to constitute a business combination.

 

At acquisition, Amphora Health Ltd and Infused Amphora Ltd were dormant companies with little underlying assets.  Additionally, Amphora Health Ltd and Infused Amphora Ltd did not have processes including a workforce to produce outputs.  Therefore the directors conclusion was that the transaction was an asset acquisition and not a business combination.

 

The details of the Voyager Life plc's acquisition of Amphora Health Ltd and Infused Amphora Ltd are as follows;

 

Net assets group acquired                                                                              £,000

Novel Food licenses                                                                                                 43

Inventory                                                                                                                     17

Other current liabilities                                                                                         (10)

Total                                                                                                                               50

 

 

Total purchase price                                                                                          £,000

Amount settled in shares                                                                                      50

Total                                                                                                                               50

 

 

16.     INVENTORY	Group			Company
	2024	2023		2024	2023
	£'000	£'000		£'000	£'000
Finished products and consumables	108	122		75	122
Raw materials	9	3		-	3

 

The provision held at 31 March 2024 for slow moving stock is £nil.  There are no material differences between the balance sheet value of inventory and their replacement cost.

17.	TRADE & OTHER RECEIVABLES
		Group					Company
		2024		2023			2024			2023
		£'000		£'000			£'000			£'000
Amounts falling due within one year
Trade receivables (Net of Bad Debt provision)		4		7			3			7
Escrow account		-		500			-			500
Other receivables		-		8			11			8
Prepayments and accrued income		13		13			13			13
VAT receivable		2		17			1			17
Sativa Wellness debtor account		-		35			-			35
		19		580			28			580
Amounts falling due after one year
Other receivables: rent deposit		18		17			18			17
		37		597			46			597

 

All amounts in trade receivables are due within 3 months.  The non-collection risk on trade receivables is reflected in the level of allowance for non-recovery of £1,000.

 

Other receivables relate to the escrow account that was repaid to the Company on 10 July 2023 and rent deposits.

 

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.  Fair values have been calculated by discounting cash flows at prevailing interest rates.  See also Note 27.

 

 

18.	CASH & CASH EQUIVALENTS
		Group							Company
		2024			2023				2024		2023
		£'000			£'000				£'000		£'000
Cash at bank		163			490				163		490

 

Cash at bank comprises of balances held in current bank accounts.  The carrying amount of these assets approximates to their fair value. 

 

19.	TRADE & OTHER PAYABLES AMOUNTS FALLING DUE WITHIN ONE YEAR
		Note	Group					Company
			2024	2023				2024			2023
			£'000	£'000				£'000			£'000
Trade payables			(88)	(9)				(75)			(9)
Accruals			(89)	(74)				(88)			(74)
Pensions payable			(2)	(2)				(2)			(2)
Right of use liability		14	(80)	(70)				(62)			(70)
Other payables			(26)	(22)				(23)			(22)
			(285)	(177)				(250)			(177)

 

Trade payables and accruals principally comprise amounts outstanding for trade purchases and continuing costs.  The Directors consider that the carrying amount of trade and other payables approximates to their fair value.  See also Note 26.

 

20.	LEASE LIABILITIES - AMOUNTS FALLING DUE AFTER ONE YEAR
		Group					Company
		2024	2023				2024		2023
		£'000	£'000				£'000		£'000
Non-current lease liabilities
Later than 1 year and not later than 5 years		(314)	(288)				304		288
More than 5 years		(190)	(271)				190		271
		(504)	(559)				(494)		(559)
21.	SHARE CAPITAL
				31 March				31 March
				2024				2023
				£'000				£'000
Allotted called up and fully paid:
13,402,888 ordinary shares of £0.01 each				144				140

 

The Company has only one class of share.  All ordinary shares have equal voting rights and rank pari passu for the distribution of dividends and repayment of capital. The following changes to the issued share capital of the Company during the year:

 

	Number	Par value of shares issued
		£'000
At 31 March 2023	13,986,244	140
7 March 2024 subscription for shares	416,644	4
Total issued in the period	416,644	4
Number of shares in issue at 31 March 2024	14,402,888	144

 

The only change to the issued share capital of the Company during the year was that, on 7 March 2024, the Company issued 416,644 fully paid-up Ordinary Shares for the investment of the share capital in Amphora Health Ltd.

 

At 31 March 2024 there were warrants and options outstanding over 6,383,774 unissued ordinary shares.   Details of the warrants and options outstanding at the year end are as follows:

 

Granted	Exercisable from	Exercisable until	Number Outstanding	Exercise price (p)
Warrants
30 June 2021	Any time until	30 June 2024	34,474	38
30 June 2021	Any time until	30 June 2024	102,394	58
24 March 2023	Any time until	20 March 2025	4,794,088	20
			4,930,956
Options
16 January 2023	Any time until	16 January 2033	1,452,818	20
			1,452,818
Total			6,383,774

 

 

The Directors held the following options at the end of the period. As explained further in note 23, these options only vest if the Company's share price exceeds a hurdle of 20 pence.

 

Director	At 31 March 2023	Award in the period	At 31 March 2024	Exercise price (pence)	Earliest date of exercise	Latest date of exercise
E Boyle	460,652	-	460,652	20	16 January 2025	16 January 2033
N Tulloch	921,304	-	921,304	20	16 January 2025	16 January 2033
Total	1,381,956	-	1,381,956

The market price of the shares at the year-end was 9.35 pence per share. 

 

During the period, the minimum and maximum prices were 9.35 pence and 14.25 pence per share respectively.

 

22.          SHARE PREMIUM ACCOUNT
		2024
		£'000
At 31 March 2023		2,004
7 March 2024 issue of shares		45
Total issued in the period		45
Less:  Costs relating to share issues		-
At 31 March 2024		2,049

 

23.          EQUITY-SETTLED SHARE-BASED PAYMENTS RESERVE

					2024
					£'000
	At 31 March 2023				135
	On options and warrants granted in the period				-
	Equity settled share based payment				51
	At 31 March 2024				186

The share options are Enterprise Management Incentive (EMI) options and therefore there is no employer's National Insurance Contributions on either their grant or exercise.

 

The details of the exercise price and exercise period of warrants and options are given in Note 21 above.   

 

Details of the options and warrants outstanding at the period end are as follows:

 

		2024	2024
Options and Warrants		Number	Weighted average exercise price    - pence
Outstanding at the beginning of the period		1,567,818	20.00p
Granted during the period		-
Lapsed during the period		115,000	20.00p
Exercised during the period		-
Outstanding at the period end		1,452,818	20.00p
Exercisable at the period end		1,452,818	20.00p

 

There were no options or warrants exercised during the period. 

 

The options and warrants outstanding at the period end have a weighted average remaining contractual life of 2.9 years.  The exercise price of the options and warrants outstanding at the period end range from 20 pence to 58 pence per share.  Full details of the exercise price and potential exercise dates are given in Note 21 above.

 

There were no warrants and or options granted during the year. 

 

The Group recognised total charges of £50,830 related to equity-settled share-based payment transactions during the period, the amount of which is included in administrative expenses and the share premium account.

 

24.          CAPITAL COMMITMENTS

 

There were no capital commitments at 31 March 2024.

 

25.          CONTINGENT LIABILITIES

 

There were no contingent liabilities at 31 March 2024.

 

26.          FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

 

The Company's financial instruments comprise primarily cash and various items such as trade debtors and trade creditors which arise directly from its operations.  The main purpose of these financial instruments is to provide working capital for the Company's operations.  The Group did not utilise complex financial instruments or hedging mechanisms.  To date, these amounts have, individually, been not material to the Company's trading performance or working capital.

 

Financial assets by category

The categories of financial assets (as defined by IFRS 9: Financial Instruments) included in the balance sheet and the heading in which they are included are as follows:

 

Group		2024		2023
		£'000		£'000
Non-current assets
Trade and other receivables		630		658
Current assets
Trade and other receivables		136		705
Cash and cash equivalents		163		490
		929		1,853
Company		2024		2023
		£'000		£'000
Non-current assets
Trade and other receivables		608		658
Current assets
Trade and other receivables		103		705
Cash and cash equivalents		163		490
		874		1,853

 

Financial liabilities by category

The categories of financial liabilities (as defined by IFRS 9) included in the balance sheet and the heading in which they are included are as follows:

 

Group		2024		2023
		£'000		£'000
Current liabilities
Trade and other payables		(177)		(91)
Categorised as financial liabilities
measured at amortised cost		(177)		(91)
Company		2024		2023
		£'000		£'000
Current liabilities
Trade and other payables		(163)		(91)
Categorised as financial liabilities
measured at amortised cost		(163)		(91)

 

All amounts are short term and payable in 0 to 9 months. 

 

Credit risk

The maximum exposure to credit risk at the reporting date by class of financial asset was:

 

Group		2024		2023
		£'000		£'000
Trade and other receivables - gross		19		581
Provisions		-		(1)
		19		580
Company		2024		2023
		£'000		£'000
Trade and other receivables - gross		28		581
Provisions		-		(1)
		28		580

 

Trade receivables are due within 3 months.  A provision for expected losses of £491 has been established.

 

Capital management

The Company considers its capital to be equal to the sum of its total equity. The Company monitors its capital using a number of metrics including cash flow projections, working capital ratios, the cost to achieve development milestones and potential revenue from activities. The Company's objective when managing its capital is to ensure it obtains sufficient funding for continuing its planned programme of growth. The Company funds its capital requirements through the issue of new shares to investors.

 

Interest rate risk

The maximum exposure to interest rate risk at the reporting date by class of financial asset was:

 

Group		2024		2023
		£'000		£'000
Bank balances and receivables		163		490
Company		2024		2023
		£'000		£'000
Bank balances and receivables		163		490

 

The nature of the Company's activities and the basis of funding are such that the Company has significant liquid resources.  The Company uses these resources to meet the cost of future development activities.  Consequently, it seeks to minimise risk in the holding of its bank deposits.  The Company is not financially dependent on the small rate of interest income earned on these resources and therefore the risk of interest rate fluctuations is not significant to the business and the Directors have not performed a detailed sensitivity analysis.  Nonetheless, the Directors take steps when possible and cost effective to secure rates of interest which generate a return for the Company by depositing sums which are not required to meet the immediate needs of the Company in interest-bearing deposits.  Other balances are held in an interest-bearing, 95-day notice account.  All deposits are placed with UK banks to restrict both credit risk and liquidity risk.  The deposits are placed for the short term, of up to 95 days, to provide flexibility and access to the funds and to avoid locking into potentially unattractive interest rates. 

 

Credit and liquidity risk

Credit risk is managed on a Group basis. Funds are deposited with financial institutions with a credit rating equivalent to, or above, the main UK clearing banks. The Group's liquid resources are invested having regard to the timing of payments to be made in the ordinary course of the Company's activities. All financial liabilities are payable in the short term (normally between 0 and 3 months) and the Group maintains adequate bank balances to meet those liabilities as they fall due.

 

Currency risk

The majority of income and costs are incurred in sterling and foreign currency risk is not considered to be significant.  During the period, the Group had access to both Euro and Polish Zloty bank accounts pursuant to its Polish operations but access to these accounts ceased on 30 June 2023 when these operations ceased.

 

27.          RELATED PARTY TRANSACTIONS

 

There were no related party transactions in the year to 31 March 2024 aside from the transactions with directors in respect of remuneration, details of which are set out on pages 39 to 43 of the annual report.

 

28.          EVENTS AFTER THE REPORTING PERIOD

 

On 27 June 2024, the Company announced that it had entered into an option agreement to acquire the entire issued share capital of M3 Helium Corp., a producer of helium based in Kansas, USA.  The option gives the Company the right to acquire M3 Helium through the issue of 57,611,552 new ordinary shares to M3 Helium's shareholders, representing 57 per cent. of the issued share capital of the Company as enlarged by the New Ordinary Shares following the option and the fundraise (explained below).

 

The exercise of the Option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of the Admission Document in due course.

 

Also on 27 June 2024, the Company announced that it had raised £864,468 through the issue of 28,815,606 New Ordinary Shares at an issue price of 3 pence per new ordinary share. For every two new ordinary shares issued pursuant to the fundraise, investors will receive one warrant allowing the holder to subscribe for an additional new ordinary share in the Company at an exercise price of 6 pence per ordinary share, exercisable within two years.

 

In connection with the fundraise, the Company also issued 900,000 Broker Warrants, exercisable at 3 pence per new ordinary share at any time until the second year anniversary of issue.

 

The proceeds of the Fundraise have been utilised to fund the development of M3 Helium's operations through a loan facility to M3 Helium of up to US$500,000.

 

The loan facility has been prepared on the basis of an arm's length commercial agreement between Voyager and M3 Helium for a term of up to one year. The loan facility and bears an interest rate of 6 per cent. per annum starting from the date on which the funds are received and ending upon the term date. The loan facility contains restrictions on M3 Helium taking on external finance and is structured to ensure it ranks in priority to M3 Helium's other obligations.  Drawdowns under the loan facility must be for a specified purpose, namely the ongoing development of M3 Helium's business.  As at 27 September 2024, US$487,362 had been drawn down under the loan facility.

 

29.          CONTROL

 

In the opinion of the Directors there is no single ultimate controlling party.

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF VOYAGER LIFE PLC

 

The independent audit report draws attention to note 2.3 in the financial statements, which indicates that conditions exist that may cast significant doubt on the Group's and Company's ability to continue as a going concern. The company will therefore be reliant on one of the following to ensure it will continue as a going concern (i) conducting a fundraise and (ii) further cost reductions. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the group's and company's ability to continue as a going concern. The auditor's opinion is not modified in respect of this matter. The Independent Auditor's Report is set out in full below.

 

Opinion

 

We have audited the financial statements of Voyager Life Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Cashflow Statements and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

 

In our opinion:

·    the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2024 and of the group's loss for the year then ended;

·    the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

·    the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and

·    the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

 

Basis for opinion

 

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

Material uncertainty related to going concern

 

We draw attention to note 2.3 in the financial statements, which indicates that conditions exist that may cast significant doubt on the Group's and Company's ability to continue as a going concern. The company will therefore be reliant on one of the following to ensure it will continue as a going concern:-

 

 (i) conducting a fundraise and

(ii) further cost reductions.

 

As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the group's and company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included obtaining and reviewing the management's going concern assessment and associated cashflow forecasts for a minimum of 12 months from the date of approval of the financial statements. We have reviewed key inputs to the forecast financial information, and challenged the applicable assumptions and key estimates and confirmed that the calculations applied in the forecasts were in accordance with the assumptions and were mathematically accurate. In addition, we have also reviewed the current cash position to ensure it is in accordance with management expectation.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

 

Our application of materiality

 

The scope of our audit was influenced by our application of materiality. We determined overall materiality for the consolidated financial statements as a whole to be £61,000 (2023: £50,000).

 

Overall materiality has been set at 6% (2023: 5%) of loss before tax. Loss before tax is considered to be the most important metric for users of the financial statements, and is a key performance indicator for Voyager Life Plc as their primary business function is to sell CBD goods to both businesses and customers, and therefore their ability to generate revenue and maintain strong cost controls are essential for business growth. 

 

The only significant component of the group is the parent company which was audited to an overall materiality of £57,950 (2023: £49,000) based on Loss before tax. Performance materiality was set at 70% (2023: 70%) of overall materiality for both the group and parent company. The performance materiality is based on our assessment of the relevant risk factors such as management's attitude towards proposed adjustments and the level of estimation inherent within the group. We use performance materiality to assess the extent of testing needed to reduce the risk that the aggregated uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole to an acceptably low level. We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified through our audit with a value in excess of £3,050 (2023: £2,500) for the group and £2,000 (2023: 2,450) for the parent company. We also agreed to report any other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds as well as disclosure matters that we identified when assessing the overall presentation of the financial statements.

 

We applied the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatement. Materiality is reassessed throughout the audit. The materiality threshold for both the group and the parent company has not changed since the audit planning stage.

 

Our approach to the audit

 

In designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas requiring the directors to make subjective judgements, for example in respect of significant accounting estimates including the valuation of share-based payments including the modification of share options, the valuation of inventory and the estimates of useful lives and residual values of tangible assets. We have also considered the accounting treatment for the acquisition of Amphora Health Ltd and Infused Amphora Ltd. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represents a risk of material misstatement due to fraud.

 

A full scope audit was performed on the complete financial information of the group's operating components located in Scotland, with the group's key accounting function for all being based in the same location.

 

We identified what we considered to be key audit matters in the next section and planned our audit approach accordingly.

 

Key audit matters

 

Except for the matter described in the Material uncertainty related to going concern section, we have determined that there are no other key audit matters to communicate in our report.

 

Other information

 

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

 

Opinions on other matters prescribed by the Companies Act 2006

 

In our opinion, based on the work undertaken in the course of the audit:

·    the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

·    the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

 

 

Matters on which we are required to report by exception

 

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

·    adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·    the parent company financial statements are not in agreement with the accounting records and returns; or

·    certain disclosures of directors' remuneration specified by law are not made; or

·    we have not received all the information and explanations we require for our audit.

 

Responsibilities of directors

 

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the group and parent company financial statements, the directors are responsible for assessing the group and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

 

Auditor's responsibilities for the audit of the financial statements

 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

·    We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management, industry research, application of cumulative audit knowledge and experience of the CBD sector.

·    We determined the principal laws and regulations relevant to the parent company in this regard to be those arising from:

o  The Novel Foods (England) Regulations 2018 (CBD edibles are regulated as a novel food through the Food Standards Agency)

o  Food Safety Act 1990

o  Health and Safety Act 1974

o  QCA Corporate Governance

o  AQSE Growth Market regulations - Access Segment

o  Misuse of Drugs Act 1971 and Misuse of Drugs Regulations 2001

o  Local tax laws and regulations

o  Companies Act 2006

·    We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to:

o  Making enquiries of management regarding potential instances of non-compliance;

o  A review of Board meeting minutes; and

o  A review of legal ledger accounts

·    We also identified the risks of material misstatement of the financial statements due to fraud. Aside from the non-rebuttable presumption of a risk of fraud arising from management override of controls and the rebuttable presumption of risk of fraud on revenue recognition, we did not identify any other significant fraud risks.

·    We addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.        

·    To address the risk of fraud arising from revenue recognition, we performed audit procedures which included, but were not limited to: tests of control and substantive transactional testing of income from sale of products through trade fares, shops, the company's website and third-party websites recognised in the financial statements on a sample basis, including deferred and accrued income balances recognised at the period-end.

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

 

Use of our report

 

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

 

Timothy Harris (Senior Statutory Auditor)                 15 Westferry Circus

For and on behalf of PKF Littlejohn LLP                      Canary Wharf                                         

Statutory Auditor                                                             London E14 4HD                                                                                                                                              

                                                 27   September 2024