Clarify Pharma PLC - Interim results

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 6 MONTH PERIOD ENDING 31 MAY 2022

1              General information

Clarify Pharma Plc was incorporated on 1 November 2019 in England and Wales and remains domiciled there with Registered Number 12294271 under the Companies Act 2006. The company was originally incorporated under the name Mena Esports Plc and subsequently changed its name to Clarify Pharma Plc on 4 February 2021.

The address of its registered office is 9th Floor 16, Great Queen Street, London, England, WC2B5DG.

The principal activity of the company during the period under review was that of the incubation of and investment in companies that are developing therapeutic remedies using compounds with certain psychedelic properties.

2              Accounting policies

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

2.1          Basis of preparation

The condensed interim financial statements ("interim financial statements") have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" (IAS 34) as adopted by the European Union (EU). The interim financial statements have been prepared on the historical cost basis, except for assets and liabilities measured at fair value through profit and loss, and are presented in pounds sterling (£). All amounts have been rounded to the nearest pound, unless otherwise stated.

The interim financial statements have not been audited.  The interim financial statements do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The figures have been prepared using applicable accounting policies and practices consistent with those adopted in the audited annual financial statements ("annual financial statements") for the year ended 30 November 2021.

The interim financial statements are for the six months to 31 May 2022, being six months from the financial year end for the Company being 30 November 2021. The interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company's annual financial statements for the period ended 30 November 2021. The Company has disclosed comparative data for the period from 1 December 2020 to 31 May 2021 as required for disclosure by accounting standards as well audited figures from the annual financial statements.

The functional currency for the Company is determined as the currency of the primary economic environment in which it operates. Both the function and presentational currency of the Company  Pounds Sterling (£).

The business is not considered to be seasonal in nature.

New standards, amendments and interpretations adopted by the Company

During the current period the Company adopted all the new and revised standards, amendments and interpretations that are relevant to its operations and are effective for accounting periods beginning on 1 December 2021.  This adoption did not have a material effect on the accounting policies of the Company. New standards, amendments and interpretations not yet adopted by the Company

The standards and interpretations that are relevant to the Company, issued, but not yet effective, up to the date of these interim financial statements have been evaluated by the directors and they do not consider that there will be a material impact of transition on the financial statements.

2.2          Going concern

The directors have assessed the Company's ability to adopt the going concern basis of accounting and consider the adoption to be appropriate in the preparation of the interim financial statements. As the Company exists currently it operates as a cash shell looking for potential opportunities in the life sciences sector. As a result of these limited operations the Company's monthly cash burn has historically been around £35,000/month. At period end the Company had cash and cash equivalents of £1,213,568 which at current cash burn rate is more than sufficient to last for at least 12 months and supports the adoption of the going concern.

2.3          Risks and uncertainties

The principal risks and uncertainties relevant to the Company have not changed materially since the release of the annual financial statements for the period ending 30 November 2021. These risks can be referenced in the strategic report contained within the annual financial statements.

3             Critical accounting estimates and judgements

In the application of the Company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated   assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed below:

Share Based Payments

The Company measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. There have been no dilutive instruments issued in the period and the value remains equal to that in the annual financial statements as at the last reporting period.

Investments

Investments are classified as listed or unlisted. The valuation of listed investments is determined with reference to published share prices. The valuation of unlisted investments is assessed by the directors at each reporting date using any available financial information or reports available to them at that time. The directors' assessment of these valuations is subjective and may therefore impact profit and loss and equity in future period. The directors do not assess that the underlying value of the investments have fluctuated relative to the last reporting date however they have been re-valued to reflect the most recent foreign exchange rate fluctuations.

4              Earnings per share

The calculation for basic and diluted earnings per ordinary share is based on the total comprehensive loss after income tax attributable to equity shareholders for the period and is as follows:

Earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the period.  A loss was made during the period and therefore basic EPS is equal to the diluted EPS.

5              Share capital and share premium

There were no shares issued in the 6 months ending 31 May 2022.

6              Share based payments reserve

The following warrants over ordinary shares have been granted by the Company and are outstanding at 31 May 2022:

There were no dilutive instruments issued in the 6 month period ending 31 May 2022.

The fair value of the share warrant rights granted are valued using the Black-Scholes option pricing model. The option pricing model assumptions can be referenced in the annual financial statements.

7              Financial commitments & contingent liabilities

There were no capital commitments or contingent liabilities pertaining to the Company at 31 May 2022.

8              Related party transactions

Service Agreements

The Company has the following service agreements with directors of the Company:

1)    Toro Consulting Ltd

On April 5^th 2021 the Company entered into a consultancy agreement with Toro Consulting Ltd, a company owned and controlled by Jonathan Bixby. During the period £60,000 was paid to Toro with an amount of £10,000 owed to Toro Consulting Ltd in relation to consulting & administrative operations for the month of May 2022.

2)    Dark Peak Services Limited

On 4 June 2021 the Company entered into a consultancy agreement with Dark Peak Services Limited, (Dark Peak), a company owned and controlled by Nicholas Lyth. During the period £18,000 was paid to Dark Peak.

3)    Marallo Holdings Inc

On 5 February 2021 the Company entered into a consultancy agreement with Marallo Holdings Inc ("Marallo"), a company owned and controlled by director Michael Edwards and his wife Julie Hamilton. During the period £35,000 was paid to Marallo.

9              Events subsequent to period end

There were no material events subsequent to period end that require disclosure.