Igea Pharma: Annaul report

IGEA Pharma N.V. Annual report 2022

Table of content

Section I - Management review 2022………………………………………………………………………….………….. 3

Section II - Corporate Governance Report …………………………………………………………….……….….…… 5

Section III - Consolidated Financial Statements 2022 ………………………………………….……………...……… 18

Consolidated Balance Sheet ………………….……...………….………………………...…………………...……… 18

Consolidated Statement of Profit and Loss …………………….……………………………...……….……...……… 19

Consolidated Statement of Comprehensive Income ……...…….……………………………………...……...……… 20

Consolidated Statement of Changes in Equity ………………………….……………………………………..……… 21

Consolidated Cash Flow Statement …………….……………..………….……….……………………...…...……… 22

Notes to the consolidated financial statements ………………………….………………………...……………...…… 23

Section IV - Statutory Financial Statements 2022 ………………………………………………….……………….…. 47

Balance Sheet ………………….……...…………….………………………...………………..…...………...……… 47

Statement of Profit and Loss ……………………….…………………………………..….……………...…...……… 48

Notes to the financial statements ………………………….………………………...……………………...…….…… 49

Section V - Other information …………………………...………………………………………….……………….…. 55

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IGEA Pharma N.V.

www.igeapharma.nl

Section I - Management review 2022

1 Company profile

IGEA Pharma N.V. focuses on highly controlled vegetable matrices and their industrial processing to extract cannabidiol, terpenes, polycosanol, and other valuable components and in the distribution of food supplements, functional food as well as health-tech and med-tech preventative products and devices after having merged with Blue Sky Natural Resources LTD during the second half of 2021.

IGEA is listed on the SIX Swiss Exchange (ticker IGPH) and is headquartered in Hoofddorp, the Netherlands.

Unless the context indicates otherwise, all reference to 'IGEA' or the 'Company' or the 'Group' refer to IGEA Pharma N.V. and its consolidated subsidiaries.

2 Operating and financial overview 2022

Profit and loss

• The Group did not start to generate revenue in the 'Industrial processing' segment as expected (same as previous period) and the 'Distribution' segment did not operate as expected due to defocused activities (2021: marginal revenue for TEUR 103.3).
• Costs of the sales activity were TEUR 10.7 (2021: TEUR 126.2) and were generated by write-offs of previous years' financial positions exclusively. Impairments on financial assets are disclosed separately in the profit or loss statement and therefore the item was not included in the gross result.
• Operating expenses, net of other income, were TEUR 10,458.2 (2021: TEUR 1'248.3), of which TEUR 10,223.7
  (2021: TEUR 413.5) due to impairment charges. Other income substantially due to non-recurring operations was EUR
  361.7 (2021: TEUR 179.9).
• The Group recognized impairments of associates and joint ventures accounted for using the equity method was TEUR 1,297.3 (2021: none) without any share of loss of associate and joint ventures accounted for using the same method (2021: share of loss of TEUR 132.3).
• EBITDA as adjusted (before impairment charges) and EBIT was TEUR (234.6) (2021: (863.8)) and TEUR (11,755.5)
  (2021: TEUR (1,277.3)) respectively.
• Net finance result was negligible (same as previous period).
• Net loss of the period was TEUR 11,778.1 (previous period: TEUR 1,258.9), representing a basic and diluted loss per
  share of EUR 0.0347 (2021: basic and diluted loss per share of EUR 0.0039).

Balance sheet and cash flow

• As of 31 December 2022, the Group held total assets of TUER 222.0 (2021: TEUR 11,448.3), all of which are of
  current nature (2021: non-current asset of TEUR 10,321.2 and current assets for 1,127.1). The decrease of TEUR
  11,226.3 (2021: increase of TEUR 8,935.3) is substantially due to the relevant impairments recognized during the period.
• Liabilities were TEUR 2,622.0 (2021: TEUR 2,144.8), with an increase substantially due to loans convertibles in share of IGEA only still classified as financial liabilities on 2022, and the total shareholder's equity was TEUR (2,400.0) (2021: TEUR 9,303.5).
• The cash flow during 2022 (net of any exchange difference effects) was TEUR 5.7 (2021: cash use for TEUR 162.1),
  of which TEUR 401.2 (2021: TEUR 1,085.9) used for operations, TEUR 107.4 used for investing activities (2021: cash inflow from investing activities of TEUR 291.8) and TEUR 514.3 deriving from financing activities (2021: TEUR 632.0).
• Cash and cash equivalents at year's end is TEUR 29.9 (2021: TEUR 17.1). The Group ensured additional cash and cash equivalents during 2023 necessary to finance its level of activities for at least twelve months.

3 Outlook 2023

Pursuant to the new board of directors of IGEA (Board) in office since end of April 2023, the expected setup of an own industrial site to transform CBD and other vegetable-based matrices into high value products for the health prevention, cosmeceutical and other selected industries in Biasca, Switzerland, has been stagnating for almost three years now, the funding remains highly uncertain and the start of the activities - if ever - highly unpredictable, casting herewith serious doubts on the continuation of those activities. In the best interests of IGEA and its stakeholders, the Board decided therefore on 27 May 2023 to sell the 'Industrial processing' segment as well as certain activities of the 'Distribution' segment. The transaction has been performed by selling all equity interests of IGEA in BSNR to Pharma Tech Holdings SA (Pharmatech),

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IGEA Pharma N.V.

www.igeapharma.nl

which is a related party to the Company - please refer to notes 21 and 22 of the consolidated financial statements in this annual report 2022 (Annual Report) for more details. IGEA did not grant any liabilities or had any constructive obligation ensuring that previously participating interest would pay their liabilities and this operation will strengthen the equity of IGEA with a reduction from TEUR (2,400.0) as of 31 December 2022 down to expected TEUR (317.7) net of the effects of the transaction, the further conversion of outstanding notes into shares and before any result of 2023, generally reduce the overall IGEA's liabilities from TEUR 2,622.0 down to TEUR 613.4 (net of the further conversion of outstanding notes into shares of IGEA), and simplified the Group's corporate and operational structure, which the Board considers strategic conditions to pursue operations.

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IGEA Pharma N.V.

www.igeapharma.nl

Section II - Corporate Governance

This Corporate Governance Report follows the SIX Swiss Exchange Directive on Information relating to Corporate Governance dated 20 March 2018 and takes into account the Swiss Code of Best Practice for Corporate Governance and the Dutch Corporate Governance Code (the 'Code'). The Company, being Dutch, is not subject to the Swiss Ordinance against Excessive Compensation at Listed Joint-Stock Companies.

The Company's corporate governance principles are laid out in the Articles, in the Board rules (the 'Board Rules') as adopted and in a set of other directives. The Articles, the Board Rules as well as the other documents building the corporate governance framework of the Company can be viewed or downloaded on the Company's webpage at https://www.igeapharma.nl/corporate-governance/.To avoid redundancies, references are inserted to other parts of this Annual Report and links to IGEA's website that could provide additional, more detailed information.

Some changes to the Company's corporate governance occurred between 31 December 2022 and the date of disclosure of this Annual Report. Where required, reference to these changes has been made in this Corporate Governance Report for disclosure to investors in an appropriate and comprehensible form.

1 Group structure and shareholders

1.1 Group structure

1.1.1 Operational group structure

The business was initiated and operated by IGEA Research Corporation ('IGEA Research'), a company incorporated on 1 May 2015 under the laws of the State of Florida, US. On December 2017, IGEA, newly incorporated as a private company with limited liability (besloten vennootshap) under the laws of Netherland, acquired IGEA Research, ultimately controlled by the same group of shareholders, to manage the existing business activities in the US and to roll out in the EU market under a single holding entity. The Company converted into a public company with limited liability (naamloze vennootschap) on March 2018 and changes its legal name to IGEA Pharma N.V. In 2021, IGEA and Blue Sky Natural Resources LTD (BSNR), a private company limited by shares incorporated under the law of England and registered under company number 10142949 with the Registrar of Companies of England and Wales with headquarter and registered office is in 10 Philpot Lane EC3M BAA, London, England and principal place of business is Europe, focused on highly controlled vegetable matrices and their industrial processing to extract cannabidiol, terpenes, polycosanol, and other valuable components and in the distribution of food supplements and functional food, combined their businesses.

All operations of the Group are managed by the Executive Director who is also the Chief Executive Officer (CEO) together with the other officers of the Group.

1.1.2 Listed company

IGEA is registered in the trade register of the Dutch Chamber of Commerce of Amsterdam (Kamer van Koophandel) under number 70212821, with headquarter and registered office is in Siriusdreef 17, 2132 WT Hoofddorp, the Netherlands. Its shares have been listed on the SIX Swiss Exchange in Zürich, Switzerland, since 18 December 2018 under the ticker symbol 'IGPH', Swiss Security Number 41217478 and ISIN code NL0012768675. The market capitalization on 31 December 2022 was CHF 10.1 million.

The Directors elected by the General Meeting on 24 April 2023 become aware of the total absence of any financial reporting within the Group and the consequent inability of the Board to disclose the annual report 2022 within the mandatory deadlines and disclosed immediately to the market. The deadline of 31 May 2023 to disclose the annual report 2022 immediately granted by the SIX could not be respected. In the meantime, the SIX suspended trading of the Company shares.

1.1.3 Non-listed companies

The Group subsidiaries are listed in note 2.3 of the consolidated financial statements in this Annual Report.

1.2 Significant shareholders

Following shareholders (or group of shareholders) have disclosed a shareholding of 3% or more of the share capital and voting rights of IGEA as of 31 December 2022:

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IGEA Pharma N.V.

www.igeapharma.nl