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MAC3 Marwyn Acquisition Company Iii Limited

0.00
0.00 (0.00%)
Share Name Share Symbol Market Type Share ISIN Share Description
Marwyn Acquisition Company Iii Limited LSE:MAC3 London Ordinary Share VGG5878H1038 ORD NPV (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.00 -
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Trust,ex Ed,religious,charty 0 -1.45M - N/A 0

Marwyn Acquisition Company III Ltd Interim Financial Statements - 31 December 2023

28/03/2024 7:00am

RNS Regulatory News


RNS Number : 5955I
Marwyn Acquisition Company III Ltd
28 March 2024
 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

LEI: 254900YT8SO8JT2LGD15

Marwyn Acquisition Company III Limited

(the "Company")

Interim Financial Statements for the period ended 31 December 2023

The Company announces the publication of its Interim Financial Statements for the period ended 31 December 2023.

The Interim Financial Statements are also available on the 'Shareholder Documents' page of the Company's website at www.marwynac3.com.

Enquiries:

Company Secretary

Antoinette Vanderpuije - 020 7004 2700

WH Ireland - Corporate Broker 020 7220 1666

Harry Ansell

Katy Mitchell

Marwyn Acquisition Company III Limited

 

Unaudited Interim

Condensed Consolidated Financial Statements for the six months ended 31 December 2023

MANAGEMENT REPORT

We present to shareholders the unaudited interim condensed consolidated financial statements (the "Interim Financial Statements") of Marwyn Acquisition Company III Limited (the "Company") for the six months to 31 December 2023, consolidating the results of Marwyn Acquisition Company III Limited and its subsidiary MAC III (BVI) Limited (collectively, the "Group" or "MAC").

Strategy

The Company was incorporated on 31 July 2020 and subsequently listed on the Main Market of the London Stock Exchange on 4 December 2020. The Company has been formed for the purpose of effecting a merger, share exchange, asset acquisition, share or debt purchase, reorganisation, or similar business combination with one or more businesses. The Company's objective is to generate attractive long term returns for shareholders and to enhance value by supporting sustainable growth, acquisitions, and performance improvements within the acquired companies.

While a broad range of sectors will be considered by the Directors, those which they believe will provide the greatest opportunity and which the Company will initially focus on include:

• Automotive & Transport;

• Clean Technology;

• Consumer & Luxury Goods;

• Banking & FinTech;

• Insurance, Reinsurance & InsurTech & Other Vertical Marketplaces;

• Media & Entertainment;

• Healthcare & Diagnostics; and

• Business-to-Business Services.

The Directors may consider other sectors if they believe such sectors present a suitable opportunity for the Company.

The Company will seek to identify situations where a combination of management expertise, improving operating performance, freeing up cashflow for investment, and implementation of a focussed buy and build strategy can unlock growth in their core markets and often into new territories and adjacent sectors.

Activity

During the period, the Directors have noted a marked increase in the volume of inbound opportunities and introductions to potential management partners, a number of whom the Company has engaged in discussions with. The Directors believe that in the current constrained financing environment, a listed cash shell becomes an increasingly attractive vehicle for industry-leading management partners to execute buy and build strategies.  

Results

The Group's profit after taxation for the period to 31 December 2023 was £237,150 (31 December 2022: loss of £509,128). The Group held a cash balance at the period end of £10,032,534 (as at 30 June 2023: £10,079,604). The Group has not yet acquired an operating business and as such is not yet generating income from trading activities.

Directors

The Directors of the Company have served as directors during the period and until the date of this report as set out below:

James Corsellis (Chairman)

Antoinette Vanderpuije

Tom Basset

Dividend Policy

The Company has not yet acquired a trading business and it is therefore inappropriate to make a forecast of the likelihood of any future dividends. The Directors intend to determine the Company's dividend policy following completion of an acquisition and, in any event, will only commence the payment of dividends when it becomes commercially prudent to do so.

Corporate Governance

As a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code and given the size and nature of the Group the Directors have decided not to adopt the UK Corporate Governance Code. Nevertheless, the Board is committed to maintaining high standards of corporate governance and will consider whether to voluntarily adopt and comply with the UK Corporate Governance Code as part of any Business Acquisition, taking into account the Company's size and status at that time.

The Company currently complies with the following principles of the UK Corporate Governance Code:

·      The Company is led by an effective and entrepreneurial Board, whose role is to promote the long term sustainable success of the Company, generating value for shareholders and contributing to wider society;

·      The Board ensures that it has the policies, processes, information, time and resources it needs in order to function effectively and efficiently; and

·      The Board ensures that the necessary resources are in place for the company to meet its objectives and measure performance against them.

Given the size and nature of the Company, the Board has not established any committees and intends to make decisions as a whole. If the need should arise in the future, for example following any acquisition, the Board may set up committees and may decide to  adopt the UK Corporate Governance Code.

Risks

The Company's Audited Annual Report and Consolidated Financial Statements for the year ended 30 June 2023, which are available on the Company's website, set out the risk management and internal control systems for the Group and identifies the risks that the Directors consider to be most relevant to the Company based on its current status. The Directors are of the opinion that there have been no changes to the risks faced by the Company since the publication of the Annual Report and Consolidated Financial Statements and that these remain applicable for the remaining six months of the year.

Outlook

The Directors continue to progress discussions with a number of potential management partners and investment opportunities across a range of sectors. As a listed cash shell, with the flexibility of the MAC structure, the Directors believe the Company is well-positioned to execute a buy and build strategy, once the management partner has been appointed and the investment hypothesis narrowed to a specific sectoral opportunity. The Directors look forward to updating shareholders in due course.

Each of the Directors confirms that, to the best of their knowledge:

(a) these Interim Financial Statements, which have been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

(b) these Interim Financial Statements comply with the requirements of DTR 4.2.

Neither the Company nor the Directors accept any liability to any person in relation to the interim financial report except to the extent that such liability could arise under applicable law.

Details on the Company's Board of Directors can be found on the Company website at www.marwynac3.com.

 

 

James Corsellis
Chairman
27 March 2024

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 


Six months

ended

 

Six months

ended

 


31 December

 

31 December

 


2023

 

2022

 

Note

Unaudited

 

Unaudited

 


£'s

 

£'s

 


 

 

 

Administrative expenses

6

(271,560)

 

(358,238)

Total operating loss


(271,560)

 

(358,238)




 

 

Finance income


254,710


103,110

Movement in fair value of warrants

13

254,000

 

(254,000)

Profit / (loss) for the period before tax


237,150

 

(509,128)




 

 

Income tax

7

-

 

-

Profit / (loss) for the period


237,150

 

(509,128)

Total other comprehensive income


-

 

-

Total comprehensive profit / (loss) for the period


237,150

 

(509,128)



 

 

 

Profit / (loss) per ordinary share





Basic

8

0.0187


(0.0401)

Diluted

8

(0.0011)


(0.0401)

 

The Group's activities derive from continuing operations.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION


 

As at

31 December

2023

 

As at

30 June

2023


Note

Unaudited

 

Audited



£'s

 

£'s

Assets





Current assets





Other receivables

10

23,781


20,780

Cash and cash equivalents

11

10,032,534


10,079,604

Total current assets

 

10,056,315

 

10,100,384






Total assets

 

10,056,315

 

10,100,384






Equity and liabilities





Equity





Ordinary Shares

14

326,700


326,700

A Shares

14

10,320,000


10,320,000

Sponsor share

14

1


1

Share-based payment reserve

15, 17

169,960


169,960

Accumulated losses

15

(2,988,075)


(3,225,225)

Total equity

 

7,828,586

 

7,591,436

 





Current liabilities





Trade and other payables

12

68,729


95,948

Warrants

13

2,159,000


2,413,000

Total liabilities

 

2,227,729

 

2,508,948






Total equity and liabilities

 

10,056,315

 

10,100,384

 

The Interim Financial Statements were approved by the Board of Directors on 27 March 2024 and were signed on its behalf by:

 

 

James Corsellis

Chairman

Antoinette Vanderpuije

Director

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

Ordinary

shares

 

A

Shares

 

Sponsor

share

 

Share

based

payment

reserve

 

Accumulated

losses

 

Total

equity


£'s

 

£'s

 

£'s

 

£'s

 

£'s

 

£'s

Balance as at 1 July 2022

326,700


10,320,000


1

 

169,960


(1,773,103)


9,043,558

Total comprehensive loss for the period

-


-


-


-


(509,128)


(509,128)

Balance as at 31 December 2022

326,700

 

10,320,000

 

1

 

169,960

 

(2,282,231)

 

8,534,430

 

 

Ordinary

shares

 

A

Shares

 

Sponsor

share

 

Share

based

payment

reserve

 

Accumulated

losses

 

Total

equity


£'s

 

£'s

 

£'s

 

£'s

 

£'s

 

£'s

Balance as at 1 July 2023

326,700

10,320,000

1

169,960

(3,225,225)

7,591,436

Total comprehensive profit for the period

-

-

-

-

237,150  

237,150

Balance as at 31 December 2023

326,700

10,320,000

1

169,960

(2,988,075)

7,828,586

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS



Six months

ended

31 December

2023

 

Six months

ended

31 December

2022


Note

Unaudited

 

Unaudited


 

£'s

 

£'s






Operating activities





Profit / (loss) for the period


237,150


(509,128)






Adjustments to reconcile total operating profit / (loss) to net cash flows:





Finance income


(254,710)


(103,110)

Fair Value (gain) / loss on warrant  liability

13

(254,000)


254,000

Working capital adjustments:





Increase in trade and other receivables and prepayments

10

(3,001)


(9,257)

Decrease in trade and other payables

  12

(27,219)


(38,532)

Net cash flows used in operating activities


(301,780)

 

(406,027)






Investing activities





Interest received


254,710


103,110

Net cash flows used in investing activities


254,710

 

103,110






Net decrease in cash and cash equivalents


(47,070)


(302,917)

Cash and cash equivalents at the beginning of the period


10,079,604


10,483,374

Cash and cash equivalents at the end of the period

11

10,032,534

 

10,180,457

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    GENERAL INFORMATION

Marwyn Acquisition Company III Limited was incorporated on 31 July 2020 in the British Virgin Islands ("BVI") as a BVI business company (registered number 2040967) under the BVI Business Company Act, 2004. The Company was listed on the Main Market of the London Stock Exchange on 4 December 2020 and has its registered address at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, VG1110, British Virgin Islands and UK establishment (BR022832) at 11 Buckingham Street, London WC2N 6DF.

The Company has been formed for the purpose of effecting a merger, share exchange, asset acquisition, share or debt purchase, reorganisation or similar business combination with one or more businesses. The Company has one wholly owned subsidiary, MAC III (BVI) Limited (together with the Company the "Group").

2.    ACCOUNTING POLICIES

(a)    Basis of preparation

These Condensed Consolidated Financial Statements ("Interim Financial Statements") have been prepared in accordance with the IAS 34 Interim Financial Reporting and are presented on a condensed basis.

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 Group's Annual Report and Financial Statements for the year ended 30 June 2023 (the "2023 Annual Report"), which is available on the Company's website, www.marwynac3.com. Accounting policies applicable to these Interim Financial Statements are consistent with those applied in 2023 Annual Report.

(b)   Going concern

The Interim Financial Statements have been prepared on a going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due within twelve months from the date of approval. The Directors have considered the financial position of the Group and have reviewed forecasts and budgets for a period of at least 12 months following the approval of the Interim Financial Statements.

At 31 December 2023 the Group has net assets of £7,828,586 (30 June 2023: £7,591,436), net assets excluding warrant liabilities of £9,987,586 (30 June 2023: £10,004,436) and a cash balance of £10,032,534 (30 June 2023: £10,079,604). The Company has sufficient resources to continue to pursue its investment strategy which may include effecting a merger, share exchange, asset acquisition, share or debt purchase, reorganisation or similar business combination with one or more businesses.

Subject to the structure of any acquisition, the Company may need to raise additional funds to finance the acquisition in the form of equity and/or debt. The capital structure of the Company enables it to issue different types of shares in order to raise equity to fund an acquisition. The ability of the Company to raise additional funds in relation to an acquisition may affect its ability to complete that acquisition. Other factors outside of the Company's control may also impact on the Company's ability to complete that acquisition. The key risks relating to the Company's ability to execute its stated strategy are set out in its 2023 Annual Report, which is available on the Company's website.

The Company entered into a forward purchase agreement ("FPA") on 27 November 2020 with Marwyn Value Investors II LP (''MVI II LP'') of up to £20 million, which may be drawn for general working capital purposes and to fund due diligence costs. Any drawdown is subject to the prior approval of MVI II LP and the satisfaction of conditions precedent. At 31 December 2023 £12 million had been drawn down under the FPA.

Whilst the FPA provides a mechanism for the Company to raise additional funds, as any drawdown is not under the exclusive control on the Company, all cashflow and working capital forecasts have been prepared without any further draw down on the FPA being assumed.

The Directors have considered macroeconomic backdrop and the ongoing operating costs expected to be incurred by the business over at least the next 12 months. Based on their review the Directors have concluded that there are no material uncertainties relating to going concern of the Group and as such the Interim Financial Statements have been prepared on a going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due within the next 12 months from the date of approval of the Interim Financial Statements.

(c)    New standards and amendments to International Financial Reporting Standards

New standards and amendments to International Reporting Standards

The International Financial Reporting Standards ("IFRS") applicable to the Interim Financial Statements of the Group for the six-month period to 31 December 2023 have been applied.

Standards issued but not yet effective

The following standards are issued but not yet effective. The Group intends to adopt these standards, if applicable, when they become effective. It is not expected that these standards will have a material impact on the Group.

Standard

Effective date

Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7*);

1 January 2024

Non-current Liabilities with Covenants (Amendments to IAS 1);

1 January 2024

Amendments to IFSR 16 - Lease liability in sale and leaseback;

1 January 2024

Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current*; and

1 January 2024

Amendments to IAS 21 Lack of Exchangeability.

1 January 2025

*Subject to EU endorsement


3.    CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group's Interim Financial Statements under IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Significant estimates and accounting judgements

Valuation of warrants

The Company, has issued matching warrants for both its issues of ordinary shares and A shares. For every share subscribed for, each investor was also granted a warrant ("Warrant") to acquire a further share at an exercise price of £1.00 per share (subject to a downward adjustment under certain conditions). Previously, the Warrants were exercisable at any time until five years after the issue date; effective 29 April 2022, the exercise date for the Warrants was extended to the 5th anniversary of a Business Acquisition, as defined in Note 13.

The Warrants are valued using the Black-Scholes option pricing methodology which considers the exercise price, expected volatility, risk free rate, expected dividends, and expected term of the Warrants.

4.    SEGMENT INFORMATION

The Board of Directors is the Group's chief operating decision-maker. As the Group has not yet acquired an operating business, the Board of Directors considers the Group as a whole for the purposes of assessing performance and allocating resources, and therefore the Group has one reportable operating segment.

5.    EMPLOYEES AND DIRECTORS

The Group does not have any employees. During the six months ended 31 December 2023, the Company had three serving Directors: James Corsellis, Antoinette Vanderpuije, and Tom Basset, no Director received remuneration or fees under the terms of their director service agreements.

James Corsellis, Antoinette Vanderpuije, and Tom Basset have a beneficial interest in the incentive shares issued by the Company's subsidiary as detailed in Note 17.

6.    ADMINISTRATIVE EXPENSES

 

For six months

ended 31

December 2023

 

For six months

ended 31

December 2022

 

Unaudited

 

Unaudited

 

£'s

 

£'s

Group expenses by nature

 

 

 

Professional support

258,879


267,791

Non-recurring project, professional and due diligence costs

-


74,943

Audit Fees

11,647


9,750

Other expenses

1,034


5,754


271,560

 

358,238

7.    TAXATION

 

For six months

ended 31

December 2023

 

For six months

ended 31

December 2022

 

Unaudited

 

Unaudited

 

£'s

 

£'s

Analysis of tax in period

 

 

 

Current tax on profits for the period

-


-

Total current tax

-


-

 

Reconciliation of effective rate and tax charge:

 

For six months

ended 31

December 2023

 

For six months

ended 31

December 2022

 

Unaudited

 

Unaudited

 

£'s

 

£'s

Profit / (loss) on ordinary activities before tax

237,150

 

(509,128)

Expenses not deductible for tax purposes

(252,922)


696,064

(Loss)/ profit on ordinary activities subject to corporation tax

(15,772)

 

186,936

(Loss)/ profit on ordinary activities multiplied by the rate of corporation tax in the UK of 25% (2022: 19%)

(3,943)


35,518

Effects of:




(Loss)/ profit carried forward for which no deferred tax recognised

3,943


(35,518)

Total taxation charge

-


-

The Group is tax resident in the UK. As at 31 December 2023, cumulative tax losses available to carry forward against future trading profits were £1,249,554 subject to agreement with HM Revenue & Customs. There is currently no certainty as to future profits and no deferred tax asset is recognised in relation to these carried forward losses. Under UK Law, there is no expiry for the use of tax losses.

8.    LOSS PER ORDINARY SHARE

Basic earnings per share ("EPS") is calculated by dividing the profit attributable to equity holders of the company by the combined weighted average number of ordinary shares and A shares in issue during the period. Diluted EPS is calculated by adjusting the combined weighted average number of ordinary shares and A shares outstanding to assume conversion of all instruments that are potentially dilutive to the ordinary shares and A shares.

As the Company has made a profit in the period 31 December 2023, the Warrants are considered potentially dilutive. Details on the Warrants in issue are given in Note 13. In the prior year, due to the Company making a loss, the potential exercise of the Warrants has had an antidilutive impact on EPS, resulting in both basic and diluted EPS being the same in the prior year.

The Company has also issued Incentive Shares as detailed in Note 17, which may, in the future, also be dilutive to the ordinary and A shareholders. The Incentive Shares have not been included in the calculation of diluted EPS in the current period as per IAS 33, they should be treated as outstanding until the date from which all necessary vesting conditions are satisfied. Incentive shares to not become exercisable until 3 to 7 years post completion of the platform acquisition (unless certain other events have occurred as detailed in Note 17) and therefore, as the Company has yet to complete its platform acquisition, the Incentive Shares are not currently dilutive.

The Company maintains different share classes, of which ordinary shares, A shares and sponsor shares were in issue in the current and prior period. The key difference between ordinary shares and A shares is that the ordinary shares are traded with voting rights attached. The ordinary share and A share classes both have equal rights to the residual net assets of the Company, which enables them to be considered collectively as one class per the provisions of IAS 33. The sponsor share has no distribution rights so has been ignored for the purposes of IAS 33.

 

For six months

ended 31 December 2023

 

For six months

ended 31 December 2022

 

Unaudited

 

Unaudited

Basic




Profit / (loss) attributable to owners of the parent (£'s)

237,150


(509,128)

Weighted average shares in issue

 12,700,000


12,700,000

Basic profit / (loss) per ordinary share (£'s)

0.0187

 

(0.0401)





Diluted




Profit / (loss) attributable to owners of the parent (£'s)

237,150


(509,128)

Effect of warrants in issue

(254,000)


-

Adjusted loss attributable to owners of the parent (£'s)

(16,850)


(509,128)

Weighted average shares in issue

 12,700,000


12,700,000

Adjustment to number of shares for warrants

2,159,000


-

Adjusted weighted average shares in issue

14,859,000


12,700,000

Diluted loss per ordinary share (£'s)

(0.0011)

 

(0.0401)

The adjustment to earnings of £254,000 is required under IAS 33 for the purposes of the calculating the diluted EPS as these are required to be calculated as being converted at the start of the year, resulting the no fair value gain. The adjusted weighted average shares adjustment arises from the treasury share method using a fair value of £0.83 per share for 12,000,000 warrants over A shares and 700,00 warrants over ordinary shares respectively, as these warrants are fully vested and represent potential ordinary shares. Please refer to Note 13 for further information on warrants in issue.

9.    SUBSIDIARY

Marwyn Acquisition Company III Limited is the parent company of the Group, the Group comprises of the Company and the following subsidiary as at 31 December 2023:

Company name

Nature of business

Country of incorporation

Proportion of ordinary shares held directly by parent

MAC III (BVI) Limited

Incentive vehicle

British Virgin Islands

100%

The share capital of MAC III (BVI) Limited (the "Subsidiary") consists of both ordinary shares and Incentive Shares. The Incentive Shares are non-voting and disclosed in more detail in Note 17.

There are no restrictions on the Company's ability to access or use the assets and settle the liabilities of the  Company's subsidiary. The registered office of MAC III (BVI) Limited is Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, VG1110, British Virgin Islands and its UK Establishment address is 11 Buckingham Street, London, WC2N 6DF.

10.  OTHER RECEIVABLES

 

As at

31 December

2023

 

As at

30 June

2023

 

Unaudited

 

Audited

 

£'s

 

£'s

Amounts receivable in one year:

 

 

 

Prepayments

18,420


14,372

Due from a related party (Note 18)

1


1

VAT receivable

5,360


6,407


23,781

 

20,780

There is no material difference between the book value and the fair value of the receivables. Receivables are considered to be past due once they have passed their contracted due date. Other receivables are all current.

11.  CASH AND CASH EQUIVALENTS

 

As at

31 December

2023

 

As at

30 June

2023

 

Unaudited

 

Audited

 

£'s

 

£'s

Cash and cash equivalents

 

 

 

Cash at bank

10,032,534


10,079,604


10,032,534

 

10,079,604

Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with a minimum short-term credit rating of P-1, as issued by Moody's, are accepted.

12.  TRADE AND OTHER PAYABLES

 

As at

31 December 2023

 

As at

30 June

2023

 

Unaudited

 

Audited

 

£'s

 

£'s

Amounts falling due within one year:

 

 

 

Trade payables

3,162


6,054

Due to a related party (Note 18)

29,451


28,656

Accruals

36,116


61,238


68,729


95,948

There is no material difference between the book value and the fair value of the trade and other payables. All trade payables are non-interest bearing and are usually paid within 30 days.

13.  WARRANT LIABLITY


Amounts falling

due within one

year


£'s

 

 

Fair value of warrants at 30 June 2022

2,032,000

Fair value movement of warrants:

 

Warrant liability - ordinary warrants

14,000

Warrant liability - A warrants

240,000

Total fair value movement

254,000

Fair value of warrants at 31 December 2022

2,286,000

Fair value movement of warrants:

 

Warrant liability - ordinary warrants

7,000

Warrant liability - A warrants

120,000

Total fair value movement

127,000

Fair value of warrants at 30 June 2023

2,413,000

Fair value movement of warrants:


Warrant liability - ordinary warrants

(14,000)

Warrant liability - A warrants

(240,000)

Total fair value movement

(254,000)

Fair value of warrants at 31 December 2023

2,159,000

On 4 December 2020, the Company issued 700,000 ordinary shares and matching warrants at a price of £1 for one ordinary share and matching warrant. Under the terms of the warrant instrument ("Warrant Instrument"), warrant holders are able to acquire one ordinary share per warrant at a price of £1 per ordinary share, subject to a downward price adjustment depending on the price of future shares issued prior to or in conjunction with an initial acquisition. Warrants are fully vested at the period end.

On 20 April 2021, the Company issued 12,000,000 A shares and matching warrants at a price of £1 for one A share and matching A warrant. Under the terms of the A warrant instrument ("A Warrant Instrument"), warrant holders are able to acquire one ordinary share per warrant at a price of £1 per ordinary share, subject to a downward price adjustment depending on the price of future shares issued prior to or in conjunction with an initial acquisition. Warrants are fully vested at the period end.

Effective 29 April 2022, both the Warrant Instrument and A Warrant Instrument were amended such that the long stop date was extended to the fifth anniversary of an initial acquisition by a member of the Group (which may be in the form of a merger, share exchange, asset acquisition, share or debt purchase, reorganisation or similar transaction) of a business ("Business Acquisition"). Previously the warrants were exercisable for 5 years from the date of issue.

Warrants are accounted for as a level 3 derivative liability instruments and are measured at fair value at grant date and revalued at each subsequent balance sheet date. The warrants and A warrants were separately valued at the date of grant. For both the warrants and A warrants, the combined market value of one share and one Warrant was considered to be £1, in line with the price paid by investors. A Black-Scholes option pricing methodology was used to determine the fair value, which considered the exercise prices, expected volatility, risk free rate, expected dividends and expected term.

On 31 December 2023, the fair value was assessed as 17p per warrant, the result of which is a fair value gain £254,000 (31 December 2022: loss of £254,000). The Directors are responsible for determining the fair value of the warrants at each reporting date, the underlying calculations are prepared by Deloitte LLP.

The key assumptions used in determining the fair value of the Warrants are as follows:


As at
31 December
2023


As at
30 June
2023


Unaudited

 

Audited

Combined price of a share and warrant

£1


£1

Exercise price

£1


£1

Expected volatility

25.0%


25.0%

Risk free rate

3.30%


4.70%

Expected dividends

0.0%


0.0%

Expected term

5th anniversary of the completion of a Business Acquisition


5th anniversary of the completion of a Business Acquisition

14.  STATED CAPITAL

Authorised




Unlimited ordinary shares of no par value




Unlimited A shares of no par value




100 sponsor shares of no par value









As at
31 December
2023


As at
30 June
2023


Unaudited


Audited


£'s


£'s

Issued




700,000 ordinary shares of no par value

326,700


326,700

12,000,000 A shares of no par value

10,320,000


10,320,000

1 sponsor share of no par value

1


1


10,646,701


10,646,701

On incorporation, the Company issued 1 ordinary share of no par value to MVI II Holdings I LP. On 30 September 2020, it was resolved that updated memorandum and articles ("Updated M&A") be adopted by the Company and with effect from the time the Updated M&A be registered with the Registrar of Corporate Affairs in the British Virgin Islands, the 1 ordinary share which was in issue by the Company be redesignated as 1 sponsor share of no par value (the "Sponsor Share").

On 4 December 2020, the Company issued 700,000 ordinary shares and matching warrants at a price of £1 for one ordinary share and matching warrant. As a result of the fair value exercise of the warrants, 14p was attributed to the warrants and therefore each ordinary share was initially valued at 86p per share. Costs of £275,300 directly attributable to this equity raise were taken against stated capital during the period ended 30 June 2021.

On 20 April 2021, the Company issued 12,000,000 A shares and matching A warrants at a price of £1 for one A share and matching A warrant. As a result of the fair value exercise of the A warrants, 14p was attributed to the A warrants and therefore each ordinary share was initially valued at 86p per share. There were no costs directly attributable to the issue of these shares.

There has been no issue of any share capital in the six months ending 31 December 2023.

The ordinary shares and A shares are entitled to receive a share in any distribution paid by the Company and a right to a share in the distribution of the surplus assets of the Company on a winding-up. Only ordinary shares have voting rights attached. The Sponsor Share confers upon the holder no right to receive notice and attend and vote at any meeting of members, no right to any distribution paid by the Company and no right to a share in the distribution of the surplus assets of the Company on a winding-up. Provided the holder of the Sponsor Share holds directly or indirectly 5 per cent. or more of the issued and outstanding shares of the Company (of whatever class other than any Sponsor Shares), they have the right to appoint one director to the Board.

The Company must receive the prior consent of the holder of the Sponsor Share, where the holder of the Sponsor Share holds directly or indirectly 5 per cent. or more of the issued and outstanding shares of the Company, in order to:

•              Issue any further Sponsor Shares;

•              issue any class of shares on a non pre-emptive basis where the Company would be required to issue such share pre-emptively if it were incorporated under the UK Companies Act 2006 and acting in accordance with the Pre-Emption Group's Statement of Principles; or

•              amend, alter or repeal any existing, or introduce any new share-based compensation or incentive scheme in respect of the Group; and

•              take any action that would not be permitted (or would only be permitted after an affirmative shareholder vote) if the Company were admitted to the Premium Segment of the Official List.

The Sponsor Share also confers upon the holder the right to require that: (i) any purchase of ordinary shares; or (ii) the Company's ability to amend the Memorandum and Articles, be subject to a special resolution of members whilst the Sponsor (or an individual holder of a Sponsor Share) holds directly or indirectly 5 per cent. or more of the issued and outstanding shares of the Company (of whatever class other than any Sponsor Shares) or are a holder of incentive shares.

15.  RESERVES

The following describes the nature and purpose of each reserve within shareholders' equity:

Accumulated losses

Cumulative losses recognised in the Consolidated Statement of Comprehensive Income.

Share based payment reserve

The share based payment reserve is the cumulative amount recognised in relation to the equity-settled share based payment scheme as further described in Note 17.

16.  FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS

The Group has the following categories of financial instruments at the period end:


As at

31 December 2023


As at

30 June
2023


Unaudited


Audited


£'s


£'s

Financial assets measured at amortised cost




Cash and cash equivalents (Note 11)

10,032,534


10,079,604

Due from related party (Note 18)

1


1


10,032,535

 

10,079,605

 


As at

31 December 2023

As at

30 June
2023


Unaudited

Audited


£'s

£'s

Financial liabilities measured at amortised cost




Trade payables (Note 12)

3,162


6,054

Accruals (Note 12)

36,116


61,238

Due to a related party (Note 18)

29,451


28,656


68,729

 

95,948


 

 

 

Financial liabilities measured at fair value through profit and loss




Warrant Liability

2,159,000


2,413,000


2,159,000

 

2,413,000

The fair value and book value of the financial assets and liabilities are materially equivalent.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.

Treasury activities are managed on a Group basis under policies and procedures approved and monitored by the Board. These are designed to reduce the financial risks faced by the Group which primarily relate to movements in interest rates. As the Group's assets are predominantly cash and cash equivalents, market risk and liquidity risk are not currently considered to be material risks to the Group.

 

17.  SHARE-BASED PAYMENTS

Management Long Term Incentive Arrangements

The Group has put in place a Long-Term Incentive Plan ("LTIP"), to ensure alignment between Shareholders, and those responsible for delivering the Company's strategy and to attract and retain the best executive management talent.

The LTIP will only reward the participants if shareholder value is created. This ensures alignment of the interests of management directly with those of Shareholders. As at the balance sheet date, an executive management team is not yet in place and as such Marwyn Long Term Incentive LP ("MLTI") (in which James Corsellis, Antoinette Vanderpuije and Tom Basset are indirectly beneficially interested) is the only participant in the LTIP. Once an executive management team is appointed, they will participate in the LTIP and this will be dilutive to MLTI. Under the LTIP, A ordinary shares ("Incentive Shares") are issued by the Subsidiary.

As at the statement of financial position date, MLTI had subscribed for redeemable A ordinary shares of £0.01 each in the Subsidiary entitling it to 100 per cent of the incentive value. 

Preferred Return

The incentive arrangements are subject to the Company's shareholders achieving a preferred return of at least 7.5 per cent. per annum on a compounded basis on the capital they have invested from time to time (with dividends and returns of capital being treated as a reduction in the amount invested at the relevant time) (the "Preferred Return").

Incentive Value

Subject to a number of provisions detailed below, if the Preferred Return and at least one of the vesting conditions have been met, the holders of the Incentive Shares can give notice to redeem their Incentive Shares for ordinary shares in the Company ("Ordinary Shares") for an aggregate value equivalent to 20 per cent. of the "Growth", where Growth means the excess of the total equity value of the Company and other shareholder returns over and above its aggregate paid up share capital (20 per cent. of the Growth being the "Incentive Value").

Grant date

The grant date of the Incentive Shares will be deemed to be the date that such shares are issued.

Redemption / Exercise

Unless otherwise determined and subject to the redemption conditions having been met, the Company and the holders of the Incentive Shares have the right to exchange each Incentive Share for Ordinary Shares in the Company, which will be dilutive to the interests of the holders of Ordinary Shares. However, if the Company has sufficient cash resources and the Company so determines, the Incentive Shares may instead be redeemed for cash. It is currently expected that in the ordinary course Incentive Shares will be exchanged for Ordinary Shares. However, the Company retains the right but not the obligation to redeem the Incentive Shares for cash instead. Circumstances where the Company may exercise this right include, but are not limited to, where the Company is not authorised to issue additional Ordinary Shares or on the winding-up or takeover of the Company.

Any holder of Incentive Shares who exercises their Incentive Shares prior to other holders is entitled to their proportion of the Incentive Value to the date that they exercise but no more. Their proportion is determined by the number of Incentive Shares they hold relative to the total number of issued shares of the same class.

Vesting Conditions and Vesting Period

The Incentive Shares are subject to certain vesting conditions, at least one of which must be (and continue to be) satisfied in order for a holder of Incentive Shares to exercise its redemption right.

The vesting conditions are as follows:

i.       it is later than the third anniversary of the initial Business Acquisition and earlier than the seventh anniversary of the Business Acquisition;

ii.      a sale of all or substantially all of the revenue or net assets of the business of the Subsidiary in combination with the distribution of the net proceeds of that sale to the Company and then to its shareholders;

iii.     a sale of all of the issued ordinary shares of the Subsidiary or a merger of the Subsidiary in combination with the distribution of the net proceeds of that sale or merger to the Company's shareholders;

iv.     where by corporate action or otherwise, the Company effects an in-specie distribution of all or substantially all of the assets of the Group to the Company's shareholders;

v.      aggregate cash dividends and cash capital returns to the Company's Shareholders are greater than or equal to aggregate subscription proceeds received by the Company;

vi.     a winding up of the Company;

vii.    a winding up of the Subsidiary; or

viii.   a sale, merger or change of control of the Company.

If any of the vesting conditions described in paragraphs (ii) to (viii) above are satisfied before the third anniversary of the initial acquisition, the A Shares will be treated as having vested in full.

Holding of Incentive Shares

MLTI holds Incentive Shares entitling them to aggregate to 100 per cent. of the Incentive Value. Any future management partners or senior executive management team members receiving Incentive Shares will be dilutive to the interests of existing holders of Incentive Shares, however the share of the Growth of the Incentive Shares in aggregate will not increase.

The following shares were in issue at 31 December 2023:


Nominal Price

Issue price per A ordinary share    £'s

Number of A ordinary shares

Unrestricted market value at grant date £'s

IFRS 2 Fair value       £'s

Marwyn Long Term Incentive LP

£0.01

7.50

2,000

15,000

169,960

Valuation of Incentive Shares

Valuations were performed by Deloitte LLP using a Monte Carlo model to ascertain the unrestricted market value and the fair value at grant date. Details of the valuation methodology and estimates and judgements used in determining the fair value are noted herewith and were in accordance with IFRS 2 at grant date.

There are significant estimates and assumptions used in the valuation of the Incentive Shares. Management has considered at the grant date, the probability of a successful first Business Acquisition by the Company and the potential range of value for the Incentive Shares, based on the circumstances on the grant date.

The fair value of the Incentive Shares granted under the scheme was calculated using a Monte Carlo model with the following inputs:

Issue date

Share designation at balance sheet date

Volatility

Risk-free rate

Expected term* (years)

25 November 2020

A Shares

25%

0.0%

7.0

 *The expected term assumes that the Incentive Shares are exercised 7 years post acquisition.

The Incentive Shares are subject to the Preferred Return being achieved, which is a market performance condition, and as such has been taken into consideration in determining their fair value. The model incorporates a range of probabilities for the likelihood of an Business Acquisition being made of a given size.

Expense related to Incentive Shares

There are no service conditions attached to the MLTI shares and as result the fair value at grant date of £169,960, less the subscription price of £15,000 (a net amount of £154,960) was expensed to the profit and loss account on issue, with the total fair value being recorded in the share-based payment reserve.

18.  RELATED PARTIES

James Corsellis, Antoinette Vanderpuije and Tom Basset have served as directors of the Company during the period. Funds managed by Marwyn Investment Management LLP ("MIMLLP"), of which James Corsellis is a managing partner and Antoinette Vanderpuije and Tom Basset are both partners, hold 75 per cent. of the Company's issued ordinary shares and warrants and 100% of the A shares and A warrants at the period end date as well as the Sponsor Share. The £1 due for the Sponsor Share is remains unpaid at the period end (30 June 2023: unpaid).

James Corsellis, Tom Basset, and Antoinette Vanderpuije have a beneficial interest in the Incentive Shares through their indirect interest in Marwyn Long Term Incentive LP which owns 2,000 A ordinary shares in the capital of MAC III (BVI) Limited which are disclosed in Note 17.

James Corsellis is the managing partner of Marwyn Capital LLP, and Antoinette Vanderpuije and Tom Basset are also both partners. Marwyn Capital LLP provides corporate finance support, company secretarial, administration and accounting services to the Company. On an ongoing basis a monthly fee of £25,000 per calendar month charged for the provision of the corporate finance services and managed services support is charged on a time spent basis. The total amount charged in the period ended 31 December 2023 by Marwyn Capital LLP for services was £182,690 (31 December 2022: £191,522) and they had incurred expenses on behalf of the Company of £21,423 (31 December 2022: £25,753) and of this £29,451 (30 June 2023: £28,656) was outstanding as at the period end.

19.  COMMITMENTS AND CONTINGENT LIABILITIES

There were no commitments or contingent liabilities outstanding at 31 December 2023 (31 December 2022: £Nil) which would require disclosure or adjustment in these Interim Financial Statements.

20.  POST BALANCE SHEET EVENTS

There have been no material post balance sheet events that would require disclosure or adjustment to these Interim Financial Statements.

ADVISORS

Company Broker

BVI legal advisers to the Company

WH Ireland Limited

Conyers Dill & Pearman

24 Martin Lane

Commerce House

London

Wickhams Cay 1

EC4R 0DR

Road Town

+44 (0)20 7220 1666

VG1110


Tortola


British Virgin Islands



Company Secretary

Depository

Antoinette Vanderpuije

Link Market Services Trustees Limited

11 Buckingham Street

The Registry

London

34 Beckenham Road

WC2N 6DF

Beckenham

Email: MAC3@marwyn.com

Kent


BR3 4TU



Registered Agent and Assistant Company Secretary

Registrar

Conyers Corporate Services (BVI) Limited

Link Market Services (Guernsey) Limited

Commerce House

Mont Crevelt House

Wickhams Cay 1

Bulwer Avenue

Road Town

St Sampson

VG1110

Guernsey

Tortola

GY2 4LH

British Virgin Islands


 

 

English legal advisers to the Company

Independent auditor

Travers Smith LLP

Baker Tilly Channel Islands Limited

10 Snow Hill

First floor, Kensington Chambers

London

46-50 Kensington Place

EC1A 2AL

St Helier


Jersey


JE4 0ZE

Registered office

+44 (0) 1534 755150

Commerce House

 

Wickhams Cay 1

 

Road Town


VG1110


Tortola


British Virgin Islands


 

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