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DJ Freyherr International Group PLC Half-year Report


RNS Number : 2473O

Freyherr International Group PLC

01 October 2019



for the period ending 30 June 2019

Freyherr International Group plc ("Freyherr International" or "the Company"), the NEX Growth Market medicinal cannabis and CBD company is pleased to announce its interim results for the six months ending 30 June 2019.

The period being reported on has been a busy half year for the Company as it consolidated its operations into the current trading group as follows:

   --      Freyherr d.o.o. acquired all the issued share capital of Patron d.o.o. on 6 February 2019; 

-- Freyherr International acquired all the issued share capital of Freyherr d.o.o. on 20 February 2019;

-- Freyherr d.o.o. acquired the remaining 30% minority interest in Freyherr Pharma on 9 April 2019 making it a wholly owned subsidiary;

In addition to the above transactions the Company was busy preparing for its admission to trading on the NEX Exchange Growth Market, which it achieved on 13 August. Despite these demands on management time and Company resources, the Group has traded strongly during the period.

Financial highlights

   --      Group Sales for the six months increased to GBP1.17m; 
   --      Gross profit increased to GBP550,000; 
   --      Group on target to exceed GBP2m sales in the current financial year; 

Operational highlights

   --      Application to upgrade the current GMP certificate held by Freyherr Pharma initiated; 

-- Development of Freyherr own branded products continued to complement white label production of homeopathic products at Freyherr Pharma;

-- Anticipated release of a further range of new Freyherr branded products to be launched in Q4 2019;

Chairman's Statement

I'm delighted with the progress the Group has made since the beginning of the year and all companies in the group continue to improve performance. Our focus is on the research, development and production of high-quality medicinal cannabis and CBD products. Our Slovenian pharmaceutical facility has GMP (good manufacturing practice) and GDP (good distribution practice) certifications for the production of homeopathic products and Freyherr has started the process to extend these certificates to cannabis based medicinal products in 2020.

Freyherr's primary goal in the development of its products is to extract, separate and purify cannabinoids and other pharmacologically active components from cannabis plants. The extracts are formulated into appropriate dosage forms or sold in bulk. The Company is focused on cannabinoid research and development from plant cultivation to end product, including improving extraction, production, and the supply of cannabinoid products to the medicinal, cosmetics, and edibles sectors. Freyherr's experience and industry contacts mean that it is able to source or produce individual components for production of the highest quality products in the shortest possible time.

The Company has invested in developing its own compliance, quality assurance requirements and operating procedures based on extensive in-house research, thus ensuring all elements of production adhere to industry leading quality standards. This includes the design planning and execution of the refurbishment of a large hybrid glasshouse facility upgrade in North Macedonia, where Freyherr's knowledge and experience has enabled the successful growth and harvest of medical cannabis flower.

Current main revenue streams are the production of food grade products for customers around the world. The largest customers at the moment are based in Slovenia, Austria, Spain, UK, Ireland and the Netherlands. Freyherr is also expanding into new worldwide markets, including Brazil, New Zealand, Australia and South Africa. Freyherr products are already sold under the Freyherr brand, in markets where they can be registered as medicinal products, and are as such sold in 700+ pharmacies in North Macedonia, with an aggressive plan to expand to other markets.

Growth in the remainder of 2019 and in 2020 will be accelerated by the expansion of the Freyherr product range. In addition to selling the current Freyherr medicinal products and white label products, the range will be broadened with the launch of a range of branded products in the cosmetics, food and medicinal sectors.

All new products will be offered in existing and emerging markets, making use of established distribution channels and existing partners and offering all permissible products in each market in accordance with local legislation. Freyherr is introducing 3 cosmetic products, 6 food grade products and 2 medical (GMP) products - all under the Freyherr brand.

The anticipated upgrade of Freyherr Pharma's current GMP certification of our pharmaceutical facility will additionally allow the sale of medical cannabis APIs (Active Pharmaceutical Ingredients).

Tony Burke


The following information has not been reviewed by the Company's auditor.

Unaudited Pro Forma Consolidated Income Statement

for the 6 month period ending 30 June 2019 (see Notes)

                               6 months to        12 months to 
                              30 June 2019    31 December 2018 
                                       GBP                 GBP 
 Sales                           1,167,074           1,322,320 
 Cost of sales                     617,399             746,361 
 Gross profit                      549,675             575,959 
 Distribution costs                 16,695              15,100 
 Administrative expenses           471,563             490,841 
 Other operating income                340               3,311 
 Operating profit                   61,757              73,329 
 Finance costs (net)                58,435               8,563 
 Profit before tax                   3,322              64,766 
 Taxation                                -               9,503 
 Profit for the period               3,322              55,263 

Unaudited consolidated statement of financial position

                                          as at 30 June 2019 
 Intangible Assets                                   628,889 
 Fixed Assets                                      1,220,467 
 Investments                                         179,310 
 Long-term operating receivables                      59,164 
 TOTAL NON-CURRENT ASSETS                          2,087,830 
 Inventories                                         861,681 
 Trade and other receivables                         813,083 
 Cash and cash Equivalents                            15,675 
 Short term investments, including 
  given loans                                        689,591 
 Short-term deferred costs and accrued 
  revenue                                            180,666 
 TOTAL CURRENT ASSETS                              2,560,696 
 Provisions                                            4,707 
 Loans and borrowings                                302,223 
 Long-term payables                                   45,499 
 TOTAL NON-CURRENT LIABILITIES                       352,429 
 Trade and other payables                          1,231,222 
 Loans and borrowings                              1,267,242 
 Short-term accrued costs and deferred 
  revenue                                              9,025 
 TOTAL CURRENT LIABILITIES                         2,507,489 
 NET ASSETS                                        1,788,608 
 Share capital                                       252,525 
 Share premium                                       837,779 
 Merger Reserve                                      500,000 
 Profit and loss account                               3,322 
 Other reserves                                      194,982 



These interim statements have been prepared on a basis consistent with International Financial Reporting Standards (IFRS). They do not contain all of the information required for full financial statements. These interim financial statements do not constitute statutory accounts within the meaning of the Companies Act.

The figures above have not been reviewed by the company's auditors, Moore Kingston Smith LLP.

1. Basis of preparation

The group came into being on 20 February 2019 following the transaction set out in 2(i) below. The 6 month period and 12 month comparative period financials are unaudited pro forma Consolidated Income Statements of the Group for the year to 31 December 2018 and for the six months to 30 June 2019 (the "Pro Forma Financial Information"). The Pro Forma Financial Information has been prepared for illustrative purposes only and includes the results of the group as if it had existed throughout 2018 and the first six months of 2019. Because of its nature, the Pro Forma Financial Information addresses a hypothetical situation and, therefore, does not represent the Group's actual financial position.

2. Significant events during the period

   i.             Acquisition of Freyherr d.o.o. 

On 20 February 2019, the company acquired 100 per cent of the issued share capital of Freyherr d.o.o., a company incorporated and registered in Slovenia. This occurred through a share for share exchange whereby the company issued 24,999,989 new ordinary shares of GBP0.01 each for GBP0.03 per share in exchange for a 99% holding in Freyherr d.o.o., and purchased the remaining 1% subsequently for consideration of GBP870. This combination has been merger accounted, resulting in the merger reserve and other reserve.

   ii.            Acquisition of minority interest of Freyherr Pharma d.o.o. (formerly INAM d.o.o.) 

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DJ Freyherr International Group PLC Half-year Report -2-

On 9 April 2019, Freyherr d.o.o., a wholly owned subsidiary of the company, entered into a share purchase agreement to purchase the remaining 30 per cent. minority interest of Freyherr Pharma d.o.o., a company incorporated and registered in Slovenia, and satisfaction of a loan from Olium d.o.o.. The consideration was payable on admission of the Ordinary shares of Freyherr International Group plc to trading on the NEX Exchange Growth Market and has been satisfied by:

a) the issue of 397,799 new Ordinary shares in the Company being the number of shares which equals the sum of EUR733,740 divided by the price per Ordinary share as at admission;

b) the grant of share options in respect of 236,743 Ordinary shares at an exercise price per share equal to EUR1.584, subject to certain vesting terms, and;

c) the grant of share options in respect of 203,307 Ordinary shares being the number of Ordinary shares as shall be equal to the sum of EUR375,000 divided by the price per Ordinary share as at admission, subject to certain vesting terms.

The share options are also subject to certain terms regarding the continuous service of key personnel.

   iii.           Loan conversion. 

On 10 April 2019, Freyherr d.o.o., a wholly owned subsidiary of the company, converted a loan of EUR400,000 by the issue of 252,525 new fully paid Ordinary shares of GBP0.01 each in the capital of Freyherr International Group plc.

3. Events after the balance sheet date

On 12 August 2019, immediately prior to admission to NEX Growth Market on 13 August, 511,363 Ordinary shares of GBP0.01 each were issued for cash at GBP1.70 each.

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

For further information please contact:


Toma Frelih 00 386 (41) 444 845

Freyherr International Group plc

No.1 London Bridge

London SE1 9BG


Corporate Advisor

David Papworth 0207 101 7676

Level 17 Dashwood House

69 Old Broad Street




Investor Relations

Tony Burke 020 7839 5081

97 Jermyn Street



Notes for Editors:

Freyherr International Group plc is the UK parent company of a group engaged in the production and sale of medicinal cannabis, cannabis cultivation and the production of cannabis dosing and dispensing packaging. Operations are centred in Slovenia and the Group principally operates within the EU.

The Group currently consists of 3 operating companies:

Freyherr d.o.o. has expertise in the cultivation and harvesting of cannabis as well as the formulation, marketing and distribution of cannabis and cannabis derived concentrates and extracts. It is currently growing cannabis in Slovenia and has invested in various cannabis production facilities in other for Editir

Patron d.o.o. is the dosing and dispensing arm which has been trading since 2015 it markets products suitable for dispensing concentrates and extracts of all sorts of nutritional and pharmaceutical products. The company also offers Cannabinoid analysis to identify the THC, CBD, or CBN levels in a given extract, concentrate or plant;

Freyherr Pharma d.o.o. is the analytics and pharmaceutical arm of the Group and holds an EU GMP certificate. It operates from its own certified building and manufactures CBD products for the Group and produces white label CBD products supplying them to various EU countries;

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