TIDMMAC3
RNS Number : 9550U
Marwyn Acquisition Company III Ltd
31 March 2023
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 RESULTS & TERMINATION OF PLACING PROGRAMME
The Company announces its interim results for the period ended
31 December 2022, which are available on the 'Shareholder
Documents' page of the Company's website at www.marwynac3.com .
The Directors have today approved the termination of the
12-month placing programme described in the Company prospectus
dated 29 April 2022 ("Placing Programme"), pursuant to which the
Company had the ability to issue up to 500 million C ordinary
redeemable shares ("C Shares") at an issue price of GBP1 per C
Share in order to raise up to an aggregate of GBP500 million. The
Placing Programme was due to lapse on 29 April 2023.
The Directors believe that terminating the Placing Programme
saves the significant legal and professional fees and management
time that would be incurred in its renewal whilst the focus remains
firmly on identifying the Company's management partners and
platform acquisition, but also does not preclude the Company from
publishing a further placing programme prospectus in the future
should the issue of C Shares be considered particularly
advantageous at that time for the ongoing strategic direction of
the Company.
Company Secretary
Antoinette Vanderpuije - 020 7004 2700
Marwyn Acquisition Company III Limited, 11 Buckingham Street,
London, WC2N 6DF
FGS Global - PR Adviser
Rollo Head 07768 994 987
Chris Sibbald 07855 955 531
Investec Bank plc - Financial Adviser 020 7597 5970
Chris Baird
Carlton Nelson
Alex Wright
N.M. Rothschild & Sons Limited - Financial Adviser 020 7280
5000
Peter Nicklin
Shannon Nicholls
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 2022
MANAGEMENT REPORT
I present to shareholders the unaudited interim condensed
consolidated financial statements of Marwyn Acquisition Company III
Limited (the "Company") for the six months to 31 December 2022 (the
"Consolidated Interim Financial Statements"), 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.
The Directors believe there is significant opportunity to invest
in companies that are positioned to take advantage of the
structural change arising from an unprecedented acceleration of
digitalisation brought about by the current macroeconomic
environment, affecting the way people live, work and consume, and
the way businesses operate, engage and sell to customers.
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
The Company has continued through the period to both identify
and progress the development of opportunities to partner with
highly experienced management teams, in a range of sectors. The
Directors have considered and continue to develop these discussions
where the flexible structure of the Company is seen as attractive
in unlocking proprietary deal flow or supporting the execution of a
buy and build strategy utilising the benefits of the Company's
listed status and the potential for significant shareholder value
creation.
On 29 April 2022, the Company announced the launch of a 12-month
placing programme (the "Placing Programme") pursuant to which the
Company has the ability to issue up to 500 million C ordinary
redeemable shares ("C Shares") at an issue price of GBP1 per C
share in order to raise up to an aggregate of GBP500 million. The
Placing Programme lapses on 29 April 2023. The Directors have today
approved the termination of the Placing Programme and believe that
that in doing so saves the significant legal and professional fees
and management time that would be incurred in its renewal whilst
the focus remains firmly on partnering with a highly experienced
management team, but also does not preclude the Company from
issuing a further placing programme prospectus in the future should
the use of C shares be considered particularly advantageous at that
time for the ongoing strategic direction of the Company. As such
effective 31 March 2023, GBP715,092 of costs incurred which are
currently included in current asset deferred costs (refer to Note
3) will be taken to the profit and loss account and recorded under
non-recurring project, professional and diligence costs.
Results
The Group's loss after taxation for the period to 31 December
2022 was GBP509,128 (period to 31 December 2021: loss of
GBP519,323). The Group held a cash balance at the period end of GBP
10,180,457 (as at 30 June 2022: GBP10,483,374).
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.
-- 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 comply with the UK Corporate Governance Code.
Risks
The Directors, alongside the Company's advisers, have performed
a robust risk assessment and have identified a wide range of risks,
which are set out in the Company's prospectuses dated 4 December
2020 (in relation to the Company's IPO) and 31 March 2022 (in
relation to the Placing Programme). The Company's prospectuses are
available on the Company's website: www.marwynac3.com . The
Company's audited annual report and financial statements for the
year ended 30 June 2022, 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 financial statements and that these remain applicable
for the remaining six months of the year.
Outlook
The Directors believe there is significant opportunity to invest
in businesses that have the potential to be long term beneficiaries
of the changes to their respective sectors and the underlying
acceleration of digitalisation that the current macro environment
has brought about. The Directors continue to progress discussions
with potential management partners with significant experience and
proven track records in their respective sectors, and look forward
to updating shareholders in due course.
RESPONSIBILITY STATEMENT
Each of the Directors confirms that, to the best of their
knowledge:
(a) these Consolidated 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 MAC; and
(b) these Consolidated 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
31 March 2023
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months
ended ended
31 December 31 December
2022 2021
Note Unaudited Unaudited
GBP GBP
Administrative expenses 6 (358,238) (646,323)
------------ ------------
Total operating loss (358,238) (646,323)
Finance income 103,110 -
Fair value (loss)/gain on warrant
provision 13 (254,000) 127,000
------------ ------------
Loss for the period before
tax (509,128) (519,323)
------------ ------------
Income tax 7 - -
------------ ------------
Loss for the period (509,218) (519,323)
------------ ------------
Total other comprehensive income - -
------------ ------------
Total comprehensive loss for
the period (509,128) (519,323)
============ ============
Loss per ordinary share
Basic and diluted 8 (0.04) (0.04)
The Group's activities derive from continuing operations.
The Notes on pages 10 to 22 form an integral part of these
Consolidated Interim Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
31 December 30 June
2022 2022
Note Unaudited Audited
GBP GBP
Assets
Current assets
Other receivables 10 760,130 750,873
Cash and cash equivalents 11 10,180,457 10,483,374
Total current assets 10,940,587 11,234,247
Total assets 10,940,587 11,234,247
============ ===========
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 15 169,960 169,960
Accumulated losses (2,282,231) (1,773,103)
------------ -----------
Total equity 8,534,430 9,043,558
Current liabilities
Trade and other payables 12 120,157 158,689
Warrants 13 2,286,000 2,032,000
------------ -----------
Total liabilities 2,406,157 2,190,689
Total equity and liabilities 10,940,587 11,234,247
============ ===========
The Notes on pages 10 to 22 form an integral part of these
Consolidated Interim Financial Statements.
The financial statements were approved by the Board of Director
s on 31 March 2023 and were signed on its behalf by:
James Corsellis Antionette Vanderpuije
Chairman Director
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share based Accumulated
Ordinary shares A Shares Sponsor share payment reserve losses Total equity
---------------- ----------- -------------- ------------------ ------------ -------------
GBP GBP GBP GBP GBP GBP
Balance as at 1
July 2022 326,700 10,320,000 1 169,960 (1,773,103) 9,043,558
Loss and 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
================ =========== ============== ================== ============ =============
Share based Accumulated
Ordinary shares A Shares Sponsor share payment reserve losses Total equity
---------------- ----------- -------------- ------------------ ------------ -------------
GBP GBP GBP GBP GBP GBP
Balance at 1 July
2021 326,700 10,320,000 1 169,960 (636,141) 10,180,520
Loss and total
comprehensive loss
for the period - - - - (519,323) (519,323)
Balance as at 31
December 2021 326,700 10,320,000 1 169,960 (1,155,464) 9,661,197
================ =========== ============== ================== ============ =============
The Notes on pages 10 to 22 form an integral part of these
Consolidated Interim Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months
ended ended
31 December 31 December
2022 2021
Note Unaudited Unaudited
------------- -------------
GBP GBP
Operating activities
Loss for the period (509,128) (519,323)
Adjustments to reconcile total
operating loss to net cash flows:
Less: Finance income (103,110) -
Add back/(deduct) fair value movement
on warrant liability 13 254,000 (127,000)
Working capital adjustments:
(Increase)/decrease in trade and
other receivables and prepayments 10 (9,257) 389,816
Decrease in trade and other payables 12 (38,532) (272,848)
Net cash flows used in operating
activities (406,027) (529,355)
Investing activities
Interest received 103,110 -
------------- -------------
Net cash flows used in investing 103,110 -
activities
Net (decrease)/increase in cash
and cash equivalents (302,917) (529,355)
Cash and cash equivalents at the
beginning of the period 10,483,374 12,255,385
------------- -------------
Cash and cash equivalents at
the end of the period 11 10,180,457 11,726,030
============= =============
The Notes on pages 10 to 22 form an integral part of these
Consolidated Interim Financial Statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM 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,
British Virgin Islands VG1110 and UK establishment 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
The Consolidated Interim Financial Statements have been prepared
in accordance with the IAS 34 Interim Financial Reporting and are
presented on a condensed basis.
The Consolidated 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 Consolidated Financial Statements for the year
ended 30 June 2022, which is available on the Company's website,
www.marwynac3.com . Accounting policies applicable to these
Consolidated Interim Financial Statements are consistent with those
applied in the Group's Annual Report and Consolidated Financial
Statements for the year ended 30 June 2022.
(b) Going concern
The Consolidated 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 twelve months from the date of approval.
(c) New standards and amendments to International Financial Reporting Standards
New standards and amendments to International Financial
Reporting Standards
The accounting policies adopted in the preparation of these
Consolidated Interim Financial Statements are consistent with those
followed in the preparation of the Group's audited consolidated
financial statements for the year ended 30 June 2022, which were
prepared in accordance with the International Financial Reporting
Standards ("IFRS"), as adopted by the European Union, updated to
adopt those standards which became effective for periods starting
on or before 1 July 2022: Onerous Contracts - Cost of Fulfilling a
Contract (Amendments to IAS 37), Property, Plant and Equipment:
Proceeds before Intended Use (Amendments to IAS 16), Annual
Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1,
IFRS 9, IFRS 16 and IAS 41), Amendments to IFRS 3: References to
Conceptual Framework (all of which had an effective date of 1
January 2022). None of these standards have had a material impact
on the Group.
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
Amendments to IAS 1 Presentation of Financial 1 January
Statements: Classification of Liabilities as Current 2023
or Non-current*
Disclosure of accounting policies (Amendments 1 January
to IAS 1) 2023
Definition of accounting estimates (Amendments 1 January
to IAS 8) 2023
Amendments to IFRS 17 Insurance contracts 1 January
2023
Amendments to IFRS 4 - Extension of temporary 1 January
exemption of applying IFRS 9 2023
Amendments to IAS 12 Income Taxes: Deferred tax 1 January
related to assets and liabilities arising from 2023
a similar transaction
Amendments to IFSR 16 - Lease liability in sale 1 January
and leaseback* 2024
Amendments to IAS 1 - Liabilities with covenants* 1 January
2024
*Subject to endorsement by the EU
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group's 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 accounting judgements
Recognition and classification of prepayment relating to a
possible further equity raise
As at the period end, GBP715,092 has been included in current
asset deferred costs (refer to note 10) as these costs are directly
attributable to a future issuance of shares under the Placing
Programme. As detailed in the Management Report and note 19,
effective 31 March 2023, the Directors have approved the
termination of the Placing Programme and as such effective this
date, the GBP715,092 of costs incurred will be taken to the profit
and loss account and recorded under non-recurring project,
professional and diligence costs.
Key sources of estimation uncertainty
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 GBP1.00 per share (subject to
a downward adjustment under certain conditions). Effective 31 March
2022, the exercise date for the Warrants was extended to the 5(th)
anniversary of a Business Acquisition, prior to this date the
Warrants were exercisable at any time until five years after the
issue date. 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 a trading
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
During the six months ended 31 December 2022, the Company had
the following directors: James Corsellis, Mark Brangstrup Watts
(resigned 6 November 2022), Antoinette Vanderpuije (appointed 6
November 2022), and Tom Basset (appointed 6 November 2022). The
Company has not had any employees since incorporation. 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 which were issued on 25 November 2020. Mark Brangstrup
Watts had a beneficial interest in the incentive shares whilst he
served as a director of the Company. This is disclosed in note
17.
6. ADMINISTRATIVE EXPENSES
For six For six
months months
ended 31 ended 31
December December
2022 2021
Unaudited Unaudited
GBP GBP
Group expenses by nature
Professional support 267,791 202,070
Non-recurring project, professional
and due diligence costs 74,943 413,527
Audit Fees 9,750 22,500
Other expenses 5,754 8,226
---------- ----------
358,238 646,323
========== ==========
7. TAXATION
For six For six
months months
ended 31 ended 31
December December
2022 2021
Unaudited Unaudited
GBP GBP
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
For six months ended 31
ended 31 December
December 2022 2021
Unaudited Unaudited
GBP GBP
Loss on ordinary activities before
tax (509,128) (519,323)
Expenses not deductible for tax purposes 257,494 122
--------------- ----------
Loss on ordinary activities subject
to corporation tax (251,634) (519,201)
--------------- ----------
Loss on ordinary activities multiplied
by the rate of corporation tax in
the UK of 19% (2021: 19%) (47,810) (98,648)
Effects of:
Losses carried forward for which
no deferred tax recognised 47,810 98,648
--------------- ----------
Total taxation charge - -
=============== ==========
The Group is tax resident in the UK. As at 31 December 2022,
cumulative tax losses available to carry forward against future
trading profits were GBP 1,397,670 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 EPS is calculated by dividing the loss attributable to
equity holders of the company by the weighted average number of
ordinary shares in issue during the period. Diluted EPS is
calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential
ordinary shares. The weighted average number of shares has not been
adjusted in calculating diluted EPS as there are no instruments
which have a current dilutive effect. The Company has issued
warrants, which are each convertible into one ordinary share. The
Group made a loss in the current period, which would result in the
warrants being anti-dilutive. Therefore, the warrants have not been
included in the calculation of diluted earnings per share.
The Company maintains three different share classes, being
ordinary shares, A shares and sponsor shares. The key difference
between ordinary shares and A shares is that the ordinary shares
are listed and have voting rights attached. The 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 rights to
distribution rights so has been ignored for the purposes of IAS
33.
Refer to note 13 (warrant liability) and to note 15 (share-based
payments) of these Consolidated Interim Financial Statements for
instruments that could potentially dilute basic EPS in the
future.
For six months For six months
ended 31 December ended 31 December
2022 2021
Unaudited Unaudited
Loss attributable to owners of the
parent (GBP's) (509,128) (519,323)
Weighted average shares in issue 12,700,000 12,700,000
Basic and diluted loss per ordinary
share (GBP's) (0.04) (0.04)
9. INVESTMENTS
Principal subsidiary undertakings of the Group
The Company is the parent of the Group, the Group comprises of
the Company and the following subsidiary as at 31 December
2022:
Proportion Proportion
of ordinary of ordinary
Nature of Country shares held shares held
Subsidiary business of incorporation by parent by the Group
--------------- ------------ ------------------- ------------- --------------
MAC III (BVI) Incentive
Limited vehicle BVI 100% 100%
There are no restrictions on the parent company's ability to
access or use the assets and settle the liabilities of the parent
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. MAC III (BVI)
Limited has a UK establishment (BR023625) at 11 Buckingham Street,
London, WC2N 6DF.
10. OTHER RECEIVABLES
As at
31 December As at 30
2022 June 2022
Unaudited Audited
GBP GBP
Amounts receivable in one year:
Prepayments 34,235 18,550
Deferred costs 715,092 715,092
Due from a related party (note 17) 1 1
VAT receivable 10,802 17,230
------------- -----------
760,130 750,873
============= ===========
There is no material difference between the book value and the
fair value of the receivables.
An amount of GBP715,092 (June 2022: GBP715,092) is included in
deferred costs as it directly relates to the potential issuance of
share capital and therefore, on completion of the Placing
Programme, would be reflected in equity. Further detail is included
in the critical accounting judgements in note 2 and under post
balance sheet events in note 19. The Placing Programme was
terminated on 31 March 2022, and as such on this date the costs
incurred which are currently included in current asset deferred
costs will be taken to the profit and loss account and recorded
under non-recurring project, professional and diligence costs.
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 As at
2022 30 June 2022
Unaudited Audited
GBP GBP
Cash and cash equivalents
Cash at bank 10,180,457 10,483,374
------------- --------------
10,180,457 10,483,374
============= ==============
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 As at 30
31 December June 2022
2022
Unaudited Audited
GBP GBP
Amounts falling due within one
year:
Trade payables 2,813 2,344
Due to a related party (note 17) 33,363 103,996
Accruals 83,981 52,349
------------- -----------
120,157 158,689
============= ===========
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
GBP's
Fair value of warrants at 1 July 2021 1,778,000
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 31 December 2021 1,651,000
==========
Fair value movement of warrants:
Warrant liability - ordinary warrants 21,000
Warrant liability - A warrants 360,000
Total fair value movement 381,000
----------
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
==========
On 4 December 2020, the Company issued 700,000 ordinary shares
and matching warrants at a price of GBP1 for one ordinary share and
matching warrant. Under the terms of the warrant instrument,
warrant holders are able to acquire one ordinary share per warrant
at a price of GBP1 per ordinary share, subject to a downward price
adjustment depending on future share issues. Warrants are fully
vested at the period end and are immediately exercisable for 5
years from the date of issue.
On 20 April 2021, the Company issued 12,000,000 A shares and
matching warrants at a price of GBP1 for one A share and matching A
warrant. Under the terms of the warrant instrument, warrant holders
are able to acquire one ordinary share per warrant at a price of
GBP1 per ordinary share, subject to a downward price adjustment
depending on future share issues. Warrants are fully vested at the
period end and are immediately exercisable for 5 years from the
date of issue.
Warrants are accounted for as a level 3 derivative liability
instrument and are measured at fair value at grant date and 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 GBP1, in line with the market price paid by
third party 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. At 31 December 2022, the fair value was assessed as
18p per warrant, the result of which is a fair value loss of
GBP254,000 (period ended 31 December 2021: gain GBP127,000)
The key assumptions used in determining the fair value of the
Warrants are as follows:
As at As at
31 December 30 June
2022 2022
Unaudited Audited
Combined price of a share and warrant GBP1 GBP1
Exercise price GBP1 GBP1
Expected volatility 25.0% 25.0%
Risk free rate 3.5% 2.17%
Expected dividends 0.0% 0.0%
Expected term 5 (th) anniversary
of the completion 5 (th) anniversary
of of the completion
a Business of a Business
Acquisition Acquisition
A 5-percentage point in the expected volatility rate would not
have a material impact on the fair value of the Warrants.
14. SHARE CAPITAL
As at As at
31 December 30 June
2022 2022
Unaudited Audited
GBP GBP
Authorised
Unlimited ordinary shares of no par - -
value
Unlimited A shares of no par value - -
100 sponsor shares of no par value - -
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
============ ==========
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 summary
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. SHARE BASED PAYMENTS
Management Long Term Incentive Arrangements
The Company has put in place a Long Term Incentive Plan
("LTIP"), to ensure an alignment with all Shareholders, and the
high competition for 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 in, and in which Mark
Brangstrup Watts had a beneficial interest whilst he served as a
director of the Company ) 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 GBP0.01 each in the
Subsidiary entitling it to 100% 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 it 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 2022:
Issue
price
per A Unrestricted
ordinary Number market value IFRS 2
Nominal share of A ordinary at grant Fair value
Issue date Name Price GBP's shares date GBP's GBP's
25 November 2020 MLTI GBP0.01 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:
Share designation
at balance Risk-free Expected
Issue date Name sheet date Volatility rate term (years)
25 November
2020 MLTI 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
No expense has been recognised in the Statement of Comprehensive
Income in respect of the Incentive Shares issued during the period
or the prior period, as there are no service conditions attached to
the MLTI shares and as result the fair value at grant date was
expensed to the profit and loss account on issue. At 31 December
2022, the share based payment reserve was GBP 169,960 (31 December
2021: GBP 169,960 ).
16. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments
at the period end:
As at As at
31 December 30 June
2022 2022
Unaudited Audited
GBP GBP
Financial assets measured at amortised
cost
Cash and cash equivalents 10,180,457 10,483,374
Due from related party (note 17) 1 1
10,180,458 10,483,375
------------- -----------
Financial liabilities measured at
amortised cost
Trade payables 2,813 2,344
Accruals 83,981 52,349
Due to a related party (note 17) 33,363 103,996
------------- -----------
120,157 158,689
------------- -----------
Financial liabilities measured at
fair value to profit and loss
Warrant Liability 2,286,000 2,032,000
------------- -----------
2,286,000 2,032,000
------------- -----------
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. RELATED PARTIES
James Corsellis, Antoinette Vanderpuije, Tom Basset, and Mark
Brangstrup Watts 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 GBP1 due for the Sponsor Share remains
unpaid at the period end (31 June 2022: unpaid). During the period
MIMLLP recharged expenses of GBPnil ( period ended 31 December 2021
: GBP54,699), of which GBPnil (30 June 2022: GBPnil) was
outstanding at the period end. Mark Brangstrup Watts was a director
of the Company until 6 November 2022, up until this date Mark
Brangstrup Watts was also a managing partner of MIMLLP.
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 15. Mark Brangstrup Watts also had an indirect
beneficial interest in the A ordinary shares until he stepped down
as director on 6 November 2022.
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 GBP25,000 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 2022 by Marwyn
Capital LLP for services was GBP191,522 ( period ended 31 December
2021: GBP85,614) and they had incurred expenses on behalf of the
Company of GBP25,753 ( period ended 31 December 2021: GBP1,860) and
of this GBP33,363 (30 June 2022: GBP56,807) was outstanding as at
the period end. Mark Brangstrup Watts was also a managing partner
of MCLLP until 6 November 2022.
The Company received recharged costs during the period
associated with provision of project services of GBP10,750 from
Marwyn Acquisition Company II Limited ("MAC II") ( period ended 31
December 2021: GBP4,729), of which GBPNil (30 June 2022: GBPNil)
was due to MAC II at period end. MAC II is related to the Group
through James Corsellis being a director of MAC II.
18. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding
at 31 December 2022 that requires disclosure or adjustment in these
financial statements.
19. POST BALANCE SHEET EVENTS
As at 31 March 2023, the Directors have resolved to terminate
the Placing Programme, which was due to lapse on 29 April 2023. As
such, effective 31 March 2023 GBP715,092 of costs incurred which
are currently included in current asset deferred costs will be
taken to the profit and loss account and recorded under
non-recurring project, professional and diligence costs.
There are no other post balance sheet events that require
adjustment or disclosure in these interim financial statements.
ADVISORS
Financial Adviser BVI legal advisers to the Company
Investec Bank Plc Conyers Dill & Pearman
30 Gresham St Commerce House
London Wickhams Cay 1
EC2V 7QN Road Town
+44 (0)20 7597 4000 VG1110
Financial Adviser Tortola
British Virgin Islands
Company Broker Depository
WH Ireland Limited Link Market Services Trustees
Limited
24 Martin Lane The Registry
London 34 Beckenham Road
EC4R 0DR Beckenham
+44 (0)20 7220 1666 Kent
Company Broker BR3 4TU
Company Secretary Registrar
Antoinette Vanderpuije Link Market Services (Guernsey)
Limited
11 Buckingham Street Mont Crevelt House
London Bulwer Avenue
WC2N 6DF St Sampson
Email: MAC3@marwyn.com Guernsey
GY2 4LH
Registered Agent and Assistant Independent auditor
Company Secretary
Conyers Corporate Services (BVI) Baker Tilly Channel Islands
Limited Limited
Commerce House First floor, Kensington Chambers
Wickhams Cay 1 46-50 Kensington Place
Road Town St Helier
VG1110 Jersey
Tortola JE4 0ZE
British Virgin Islands
English legal advisers to the Registered office
Company
Travers Smith LLP Commerce House
10 Snow Hill Wickhams Cay 1
London Road Town
EC1A 2AL VG1110
Tortola
British Virgin Islands
DISCLAIMERS
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates",
"anticipates", "expects", "intends", "may", "will", or "should" or,
in each case, their negative or other variations or comparable
terminology. These forward-looking statements relate to matters
that are not historical facts regarding the Company's business
strategy, financing strategies, investment performance, results of
operations, financial condition, prospects and dividend policies of
the Company and the assets in which it will invest. By their
nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may
or may not occur in the future. Forward-looking statements are not
guarantees of future performance. There are a number of factors
that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to, changes
in general market conditions, legislative or regulatory changes,
changes in taxation regimes or development planning regimes, the
Company's ability to acquire suitable assets on a timely basis and
the availability and cost of capital for future acquisitions.
The Company expressly disclaims any obligation or undertaking to
update or revise any forward-looking statements contained herein to
reflect actual results or any change in the assumptions, conditions
or circumstances on which any such statements are based unless
required to do so by FSMA, the Listing Rules, the Prospectus
Regulation Rules made under Part VI of the FSMA or the Financial
Conduct Authority, the UK version of the Market Abuse Regulation
(2014/596/EU) or other applicable laws, regulations or rules.
Neither the content of the Company's website, nor the content on
any website accessible from hyperlinks on its website for any other
website, is incorporated into, or forms part of, this announcement
nor, unless previously published by means of a recognised
information service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to
hold, or dispose of, securities in the Company.
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law and therefore
persons in such jurisdictions into which they are released,
published or distributed, should inform themselves about, and
observe, such restrictions.
This information is provided by RNS, the news service of the
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END
IR JBMLTMTIJMPJ
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