REG - HIRO Metaverse - 2021 Annual Report and Financial Statements
29/04/2022 15:00
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RNS Number : 9258J HIRO Metaverse Acquisitions I S.A. 29 April 2022
29 April 2022
Hiro Metaverse Acquisitions I S.A.
("Hiro" or the "Company" or, together with its subsidiaries, the "Group")
Annual Report and Financial Statements for the period ended 31 December 2021
Hiro Metaverse Acquisitions I S.A. (hereinafter referred to as HMAI or the
"Company") the special purpose acquisition company sponsored by Hiro Sponsor I
LLP (the "Sponsor"), an affiliate of Hiro Capital, a videogames and metaverse
technology venture capital fund, is pleased to announce its results for the
period ended 31 December 2021.
A copy of the Annual Report and Financial Statements will also available on
the Company's website at https://hma1.hiro.capital/investor-resources/
(https://hma1.hiro.capital/investor-resources/) where further information on
the Company can also be found. The Annual Report has also been submitted to
the National Storage Mechanism and will shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
For further information please contact:
For enquiries:
Hiro Metaverse Acquisitions 1
Peter@hiro.capital
+31612967281
JTC Group - Company Secretary & Administrator
Hiro.cosec@jtcgroup.com (mailto:Hiro.cosec@jtcgroup.com)
+44 203 846 9774
About Hiro Metaverse Acquisitions I S.A.
Hiro Metaverse Acquisitions I S.A. (hereinafter referred to as HMAI or the
"Company") is a special purpose acquisition company sponsored by Hiro Sponsor
I LLP (the "Sponsor"), an affiliate of Hiro Capital, a videogames and
metaverse technology venture capital fund.
Founded by Luke Alvarez, Sir Ian Livingstone CBE and Cherry Freeman, three
senior leaders with an established track record of entrepreneurship and
investments in the video gaming, digital sports and technology sectors. Hiro
Capital invests in high-growth video games, esports, interactive streaming,
gamified fitness and metaverse technology innovators. The founding team having
collectively co-founded and invested in over $9 billion worth of companies in
these sectors, from start-ups to IPO in London and New York.
HMAI raised £115 million through a listing on the London Stock Exchange.
The Company is focused on targets operating in the sectors of video games,
esports, interactive streaming, GenZ social networks, connected fitness &
wellness and metaverse technologies with principal business operations in the
U.K., Europe or Israel, although it may pursue an acquisition opportunity in
any industry or sector or region.
The Company was incorporated for the purpose of acquiring a stake in a company
or operating business (the "Target" or "Target Business") through a merger,
capital stock exchange, share purchase, asset acquisition, reorganisation or
similar transaction (an "Initial Business Combination").
Hiro Metaverse Acquisitions I S.A.
Société Anonyme
Registered address: 17, Boulevard F.W., L-2411Luxembourg
R.C.S. Luxembourg: B 259488
(the "Company" or the "Group")
DIRECTORS REPORT
to the annual general meeting of the shareholders of
HiRO METAVERSE ACQUISITIONS I S.A.
According to the prevailing law and the mandate you have granted to us we are
pleased to report the results for the company's first financial year from
incorporation 20 September to31 December 2021 (the "Financial Year").
We herewith submit to your meeting the Groups' audited consolidated financial
statements consisting of the Company's Consolidated statement of comprehensive
income, the Consolidated statement of financial position, Consolidated
statement of changes in equity; Consolidated statement of cash flows and the
Notes to the consolidated financial statements. and the Company's audited
Separate financial statements consisting of the Company's Separate statement
of comprehensive income, the Separate statement of financial position,
Separate statement of changes in equity; Separate statement of cash flows and
the Notes to the separate financial statements regarding the Financial Year
STATUS AND ACTIVITIES
The Company is a public limited liability company (société anonyme)
incorporated and operating under the laws of the Grand Duchy of Luxembourg.
The Company was incorporated for the purpose of acquiring a majority (or
otherwise controlling) stake in a company or operating business (the "Target"
or "Target Business") through a merger, capital stock exchange, share
purchase, asset acquisition, reorganisation or similar transaction (an
"Initial Business Combination"). The Company intends to focus on targets
operating in the sectors of video games, esports, interactive streaming, GenZ
social networks, connected fitness & wellness and metaverse technologies
with principal business operations in the U.K., Europe or Israel, although it
may pursue an acquisition opportunity in any industry or sector or region.
Prior to the completion of its Initial Business Combination, the Company is
not engaging in any operations, other than in connection with the selection,
structuring and completion of its Initial Business Combination.
The Company will need to obtain shareholder approval on the proposed Initial
Business Combination at a general meeting specifically convened for this
purpose (other than in respect of any Restricted Shares, being Public Shares
held by the Directors, the Sponsor or any Insiders).
The Company's main objective is to complete its Initial Business Combination
within an initial period of 15 months following admission to trading, subject
to an initial three-month extension period (the "First Extension Period") and
a further three-month extension period (the "Second Extension Period"), in
each case if approved by shareholder vote (the "Business Combination
Deadline"), although such extensions are not of a type required to be approved
by Public Shareholders as contemplated by Listing Rule 5.6.18AG.
During the financial year the Company did not open any branches either in
Luxembourg or abroad.
The review and development of the company's business, financial performance
and position are addressed by the board in both the preceding and below
paragraphs.
RESULTS AND DIVIDENDS
At the end of the period under review the Company recorded a loss of GBP
152,428.
The Company has not yet adopted a dividend policy. The Company has not paid
any dividends to date and will not pay any dividends prior to the Initial
Business Combination.
SHARE CAPITAL
The share capital of the Company on 20 September 2021 was set at GBP 30,000,
represented by 3,750,000 Sponsor Shares without nominal value.
The section below headed Subsequent Events sets out the changes to the share
capital subsequent to the end of the Financial Year following a placing and
subsequent admission to trading of the Company's Public Shares on the Main
Market of the London Stock Exchange on 7 February 2022.
VOTING RIGHTS
Each Ordinary Share confers the right to cast one vote at the general meeting.
Sponsor Shares have the same voting rights attached to them as all other
Ordinary Shares.
OWN SHARES
During the financial year the Company did not hold any of its own shares.
RESEARCH AND DEVELOPMENT
During the financial year the Company did not perform any research and
development activity.
DIRECTORS
During the Financial Year the Board of Directors (the "Board") consisted of:
Name Position Date of appointment Date of resignation
Mr Joost A. Mees Director 20 September 2021 10 December 2021
Mr Luke Alvarez Director 28 October n/a
2021
Ms Cherry Freeman Director 28 October n/a
2021
Sir Ian Livingstone Director 10 December n/a
2021
It is noted that Mr Joost A. Mees resigned as a Director of the Company on 10
December 2021 and was replaced by Sir Ian Livingstone on 10 December 2021.
The Board is responsible for leading and controlling the Company and has
overall authority for the management and conduct of its business, strategy and
development. The Board is also responsible for ensuring the maintenance of a
sound system of internal controls and risk management (including financial,
operational and compliance controls) and for reviewing the overall
effectiveness of systems in place as well as for the approval of any changes
to the capital, corporate and/or management structure of the Company.
CORPORATE GOVERNANCE STATEMENT
As a Luxembourg governed company that will be traded on the London Stock
Exchange, the Company is not required to adhere to the Luxembourg corporate
governance regime applicable to companies that are traded in Luxembourg. As
this regime has not been designed for special purpose acquisition companies
like the Company but for fully operational companies, the Company has opted to
not apply the X Principles of Corporate Governance of the Luxembourg Stock
Exchange on a voluntary basis.
In addition, the Company voluntarily complies with the requirements of the
U.K. Corporate Governance Code, save as set out below:
· Given the composition of the Board and the size and nature of the
Company, the Board considers certain provisions of the U.K. Corporate
Governance Code (in particular the provisions relating to the division of
responsibilities between the chairman, chief executive and senior independent
director, annual performance evaluation and executive compensation) to be
inapplicable to the Company.
· The Company will not have nomination or remuneration committees
prior to completion of its Initial Business Combination. The Board does not
consider the nomination or remuneration committees to be necessary given the
size and nature of the Company. Consequently, the Board will not appoint a
remuneration consultant.
· The U.K. Corporate Governance Code recommends the submission of
all directors for re-election at annual intervals. No Director will be
required to submit for re-election until the first annual general meeting of
the Company following the Initial Business Combination.
· The Board has adopted a share dealing code which is consistent
with the rules of the U.K. Market Abuse Regulation. The Board will be
responsible for taking all proper and reasonable steps to ensure compliance
with such share dealing code by the Directors.
The audit committee (the "Audit Committee") performs its duties in compliance
with applicable laws. The Audit Committee is composed of independent directors
of the Company and is responsible for all matters relating to financial
controls and reporting, internal and external audits, the scope and results of
audits and the independence and objectivity of auditors. It monitors and
reviews the Group's audit function and, with the involvement of its auditor,
focuses on compliance with applicable legal and regulatory requirements and
accounting standards. The Audit Committee consists of Emily Greer, Addie
Pinkster and Jurgen Post (chair).
FINANCIAL INSTRUMENTS
The Company's financial assets include equity instruments, cash and cash
equivalents and trade and other receivables. Trade and other receivables are
classified in accordance with IAS 39 and further details can be obtained from
the Notes to the financial statements.
Equity instruments are classified as investments in subsidiaries. Disclosures
of acquisitions and disposal of shares in affiliated undertakings are
contained in the investments in subsidiaries.
PRINCIPAL RISKS AND UNCERTAINTIES
The following is a summary of key risks that, alone or in combination with
other events or circumstances, could have a material adverse effect on the
Company's business, financial condition, results of operations and prospects.
In making the selection, the Company has considered circumstances such as the
probability of the risk materialising, the potential impact which the
materialisation of the risk could have on the Company's business, financial
condition and prospects, and the attention that management would, on the basis
of current expectations, have to devote to these risks if they were to
materialise:
· The Company is a newly formed entity with no operating history
and the Company has not generated and currently does not generate any revenues
and, as such, prospective investors have no basis on which to evaluate the
Company's performance and ability to achieve its business objective.
· The Company has not yet identified any specific potential Target
Business with which to complete its Initial Business Combination and, as such,
prospective investors have no basis on which to evaluate the possible merits
or risks of a Target Business's operations or specific industry.
· There is no assurance that the Company will identify suitable
Initial Business Combination opportunities by the Business Combination
Deadline, which could result in a loss of part of the investment of
shareholders.
· The Company may face significant competition for Initial Business
Combination opportunities.
· The requirement that the Company complete its Initial Business
Combination by the Business Combination Deadline may give potential Target
Businesses leverage over the Company in negotiating the Initial Business
Combination and may limit the time the Company has in which to conduct due
diligence on potential Target Businesses, which could undermine its ability to
complete its Initial Business Combination on terms that would produce value
for shareholders.
· Public Shareholders' ability to exercise redemption rights with
respect to a large number of the Public Shares may not allow the Company to
complete the most desirable Initial Business Combination or optimise its
capital structure.
· The nominal price paid by the Sponsor for the Sponsor Shares and
the conversion of the Sponsor Shares into Public Shares may incentivise the
Sponsor and the Directors to complete an Initial Business Combination in order
to realise a significant profit regardless of whether the trading price of
Public Shares declines materially.
· The Sponsor, the Directors and their respective affiliates may
have competitive interests that conflict with the Company's interests.
· Until consummation of an Initial Business Combination, the
Sponsor will hold a substantial interest in the Company and control the
appointment of the Board. As a result, it may exert a substantial influence on
the Company, potentially in a manner that investors do not support.
· Past performance by the Company's management team, the Sponsor
and their affiliates and their respective directors and management teams,
including investments and transactions in which they have participated and
businesses with which they have been associated, may not be indicative of
future performance of an investment in the Company.
· The Sponsor has paid approximately £0.01 per Sponsor Share and,
accordingly, investors will experience substantial dilution upon conversion of
the Sponsor Shares into Public Shares.
· The Company may issue additional Public Shares to complete its
Initial Business Combination, including via a private investment in public
equity, or PIPE transaction, or under an employee incentive plan after
completion of its Initial Business Combination. Any such issuances would
dilute the interest of the Public Shareholders and likely present other risks.
· The outstanding Public Warrants, Sponsor Warrants and Overfunding
Warrants will become exercisable in the future, which may increase the number
of Public Shares and result in further dilution for the Public Shareholders,
and investors may also experience a dilution of their percentage ownership of
the Company if they do not exercise their Public Warrants or if other
investors exercise their Public Warrants.
· If the Company is liquidated before the Business Combination
Deadline and distributes the amounts held in the Escrow Account as liquidation
proceeds, Public Shareholders could receive less than £10.30 per Public Share
(assuming there are no Additional Overfunding Subscriptions) or nothing at
all. In addition, it is difficult to predict when the amounts held in the
Escrow Account (if any) will be returned to the Public Shareholders.
· There is a risk that the market for the Public Shares or the
Public Warrants will not be active and liquid, which may adversely affect the
liquidity and price of the Public Shares and the Public Warrants.
STATEMENT OF GOING CONCERN
The Directors, having considered the financial position of the Company for a
period of least 12 months from the date of approval of the financial
statements, have a reasonable expectation and belief that the Company has
adequate resources to continue in operational existence for the foreseeable
future given the available cash and forecast cash outflows.
SUBSEQUENT EVENTS
On 2 February 2022, the number of Sponsor Shares was reduced from 3,750,000 to
2,875,000.
On 2 February 2022, the share capital of the Company was increased from GBP
30,000 to GBP 152,829.20 represented by 11,810,500 Public Shares (Class A
ordinary shares) and 2,875,000 Sponsor Shares (Class B ordinary shares).
The Company's Public Shares were admitted to trading on the Main Market of the
London Stock Exchange on 7 February 2022 following a placing of Public Shares
at a price of GBP 10 per Public Share. Each Public Share entitled the holder
to receive one-half (1/2) of one Public Warrant. Each whole Public Warrant
entitles a holder to subscribe for one Public Share for an exercise price of
GBP 11.50 per new Public Share. The Public Warrants were issued to holders of
Public Shares and admitted to the Main Market of the London Stock Exchange on
24 February 2022.
On 8 February 2022, the share capital of the Company was increased from GBP
152,829.20 to GBP 156,417.20 represented by 11,845,000 Public Shares (Class A
ordinary shares) and 2,875,000 Sponsor Shares (Class B ordinary shares).
MANAGEMENT REPORT
For the purposes of compliance with DTR 4.1.5R(2), DTR 4.1.8R and DTR 4.1.11R
the required content of the Management Report can be found in this Report of
Directors.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board is responsible for preparing the Report and the financial statements
in accordance with applicable law and regulations. Company law requires the
Board to prepare financial statements for each financial year. Under that law
the Board has prepared the Company's separate financial statements and the
Group's consolidated financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Under company law the Board must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company and of the profit or loss of the Company for that year. In
preparing these financial statements, the Board is required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
best estimate;
· present the financial statements and policies in a manner that
provides relevant, reliable, comparable and understandable information;
· state whether they have been prepared in accordance with
applicable IFRSs as adopted by the EU;
· assess the Company's ability to continue as a going concern,
disclosing, as applicable matters related to going concern; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business.
The Board is responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable it to prepare the financial statements, and ensure that the financial
statements comply with company law. It is responsible for such internal
control as it determines necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error, and has general responsibility for taking such steps as are reasonably
open to it to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities.
The Board is responsible for the maintenance and integrity of corporate and
financial information included on the Company's website. The financial
statements are published on the Company's website.
Legislation in Luxembourg governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
The Board, to the best of its knowledge, confirms that:
· the financial statements, prepared in accordance with applicable
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company included in the
consolidation as a whole; and
· the Management Report includes a fair review of the development
of the business and the position of the Company in the consolidation taken as
a whole, together with a description of the principal risks and uncertainties.
The Board considers the Annual Report and the Company's separate financial
statements and the Group's consolidated financial statements taken as a whole
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Company's position and performance, business
model and strategy.
INTERNAL CONTROL
The Board is responsible for determining the nature and extent of the
significant risks it is willing to take in achieving its strategic objectives.
The Board maintains sound risk management and internal control systems. The
Board has reviewed the Company's risk management and control systems and
believes that the controls are satisfactory given the nature and size of the
Company. Controls will be reviewed following completion of the Initial
Business Combination.
DISCLOSURE OF INFORMATION TO AUDITORS
So far as the Board is aware, there is no relevant audit information of which
the Auditor is unaware. The Directors have taken all steps that they ought to
have taken as Directors to make themselves aware of any relevant audit
information and to establish that the Auditor is aware of that information.
Finally, we request you to adopt the annual accounts and to grant discharge to
the members of the Board of Directors and the statutory auditor for their
mandate during the financial year 2021.
Luxembourg, 25 April 2022
Ian Livingstone Luke Alvarez
Director Director
Cherry Freeman Jurgen Post
Director Independent Non-Executive Director
Emily Greer Addie Pinkster
Independent Non-Executive Director Independent Non-Executive Director
To the Shareholders of
HIRO METAVERSE ACQUISITIONS I S.A.
Société Anonyme
R.C.S. Luxembourg B 259.488
17, Boulevard Raiffeisen
L-2411 Luxembourg
REPORT OF THE REVISEUR D'ENTREPRISES AGREE
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of HIRO METAVERSE
ACQUISITIONS I S.A. and its subsidiary (the "Group"), which comprise the
consolidated statement of financial position as of 31 December 2021, and the
consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the period from
20 September 2021 (date of incorporation) to 31 December 2021, and notes to
the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements give a true
and fair view of the consolidated financial position of the Group as at 31
December 2021, and of its consolidated financial performance and its
consolidated cash flows for the period from 20 September 2021 (date of
incorporation) to 31 December 2021 in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the EU Regulation N° 537/2014, the
Law of 23 July 2016 on the audit profession ("Law of 23 July 2016") and with
International Standards on Auditing ("ISAs") as adopted for Luxembourg by the
"Commission de Surveillance du Secteur Financier" ("CSSF"). Our
responsibilities under the EU regulation No 537/2014, the Law of 23 July 2016
and ISAs as adopted for Luxembourg by the CSSF are further described in the «
Responsibilities of the "réviseur d'entreprises agréé" for the Audit of the
Consolidated Financial Statements » section of our report. We are also
independent of the Group in accordance with the International Code of Ethics
for Professional Accountants, including International Independence Standards,
issued by the International Ethics Standards Board for Accountants (IESBA
Code) as adopted for Luxembourg by the CSSF together with the ethical
requirements that are relevant to our audit of the consolidated financial
statements, and have fulfilled our other ethical responsibilities under those
ethical requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period. These matters were addressed in the context of the audit of the
consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Based on the result of our audit procedures no Key Audit Matters were
identified for the audit of the consolidated financial statements as of 31
December 2021.
Other information
The Board of Directors is responsible for the other information. The other
information comprises the information stated in the Directors report including
the Corporate Governance Statement but does not include the consolidated
financial statements and our report of the "réviseur d'entreprises agréé"
thereon.
Our opinion on the consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information,
we are required to report this fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and Those Charged with Governance
of the Group for the Consolidated Financial Statements
The Board of Directors is responsible for the preparation and fair
presentation of the consolidated financial statements in accordance with IFRSs
as adopted by the European Union and for such internal control as the Board of
Directors determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to
fraud or error.
The Board of Directors is also responsible for presenting and marking up the
consolidated financial statements in compliance with the requirements set out
in the Delegated Regulation 2019/815 on European Single Electronic Format, as
amended ("ESEF Regulation").
In preparing the consolidated financial statements, the Board of Directors is
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Board of Directors either intends
to liquidate the Group or to cease operations, or has no realistic alternative
but to do so.
Those charged with governance are responsible for overseeing the Group's
financial reporting process.
Responsibilities of the "Réviseur d'Entreprises Agréé" for the Audit of the
consolidated financial statements
The objectives of our audit are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue a report of the
"Réviseur d'Entreprises Agréé" that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with accordance with the EU Regulation N° 537/2014,
the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF
will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with the EU Regulation N° 537/2014, the Law
of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we
exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
• Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures made by the
Board of Directors.
• Conclude on the appropriateness of Board of Directors' use of
the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group's ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our report of the "Réviseur d'Entreprises
Agréé" to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our report of the
"Réviseur d'Entreprises Agréé". However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• Assess whether the consolidated financial statements have been
prepared in all material respects with the requirements laid down in the ESEF
Regulation.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities and business activities within the Group
to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the Group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and
communicate to them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the consolidated
financial statements of the current period and are therefore the key audit
matters. We describe these matters in our report unless law or regulation
precludes public disclosure about the matter.
Report on Other Legal and Regulatory Requirements
We have been appointed as "réviseur d'entreprises agréé" on 20 September
2021 and the duration of our uninterrupted engagement, including previous
renewals and reappointments, is 1 year.
The Directors report is consistent with the consolidated financial statements
and has been prepared in accordance with applicable legal requirements.
We have checked the compliance of the consolidated financial statements of the
Group as at 31 December 2021 with relevant statutory requirements set out in
the ESEF Regulation that are applicable to the consolidated financial
statements. For the Group it related to:
- Consolidated Financial Statements prepared in valid xHTML
format;
- The XBRL markup of the Consolidated Financial Statements using
the core taxonomy and the common rules of markups specified in the ESEF
Regulation
In our opinion, the consolidated financial statements of the Group as of 31
December 2021, identified as 222100X27S5HMALJTB53-2021-12-31, have been
prepared, in all material respects, in compliance with the requirements laid
down in the ESEF Regulation.
We confirm that the audit opinion is consistent with the additional report to
the audit committee.
We confirm that the prohibited non-audit services referred to in EU Regulation
No 537/2014 were not provided and that we remained independent of the Group in
conducting the audit.
Luxembourg, 27 April 2022
For Mazars Luxembourg, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Nadhmi AMOURI
Réviseur d'entreprises agréé
Consolidated statement of comprehensive income for the period
20 September 2021 to 31 December 2021
Note 20 Sept 2021
to
31 Dec 2021
GBP
Revenue.................................................................................................................... ‑
Other operating 5 (152,560)
expenses......................................................................................
Taxes, duties and similar 6 ‑
expenses......................................................................
Operating (152,560)
(loss)/profit.........................................................................................
Finance ‑
income.......................................................................................................
Finance ‑
costs...........................................................................................................
Foreign currency exchange 272
gains/(losses)...........................................................
Loss before income (152,288)
tax........................................................................................
Income 6 ‑
tax...............................................................................................................
Profit/(loss) for the (152,288)
period..................................................................................
Other comprehensive ‑
income.............................................................................
Total comprehensive income/(loss) for the period, net of (152,288)
tax....................
Earnings/(loss) per share attributable to equity holders 7
Net earnings per
share.........................................................................................
(0.04)
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated Statement of financial position as at 31 December 2021
Assets Notes 31 Dec 2021
GBP
Current assets
Deferred 8 731,407
costs...........................................................................................................
Trade and other -
receivables...................................................................................
Cash and cash 9 30,000
equivalents.....................................................................................
Current 761,407
assets..........................................................................................................
Total Assets 761,407
Equity and liabilities
Equity
Share 10 30,000
capital.............................................................................................................
Accumulated (152,288)
deficit................................................................................................
(122,288)
Liabilities
Current liabilities
Trade and other 11 883,695
payables.......................................................................................
Taxes 6 ‑
payable..........................................................................................................
Total current liabilities5 883,695
Total 883,695
liabilities........................................................................................................
Total equity and 761,407
liabilities...................................................................................
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of changes in equity for the period ended 31 December
2021
Notes Share capital Accumulated deficit Total equity
GBP GBP GBP
Issuance of incorporation capital........... 10 30,000 ‑ 30,000
Loss for the period..................................... ‑ (152,288) (152,288)
Other comprehensive income.................. ‑ ‑ ‑
Balance at 31 December 2021.............. 30,000 (152,288) (122,288)
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of cash flows for the for the period
20 September 2021 to 31 December 2021
20 Sept 2021
to
31 Dec 2021
GBP
Cash flow from operating activities
Loss before income (152,288)
tax....................................................................................................................
Adjustments for:
.. Finance ‑
income..............................................................................................................................
.. Finance ‑
expense.............................................................................................................................
Net cash from operating activities before income (152,288)
tax............................................................
Changes in working capital:
.. Increase in deferred (731,407)
costs.............................................................................................................
.. Increase in trade and other 883,695
payables.........................................................................................
Net cash flows from operating ‑
activities....................................................................................
Cash flow from financing activities
Proceeds from issue of ordinary 30,000
shares.........................................................................................
Net cash flows from financing 30,000
activities....................................................................................
Net change in cash and cash 30,000
equivalents.....................................................................................
Cash and cash equivalents, ‑
beginning...........................................................................................
Cash and cash equivalents at the end of the 30,000
period.................................................................
The accompanying notes form an integral part of these consolidated financial
statements
1 General information
Hiro Metaverse Acquisitions I S.A. (the "Company") was incorporated on 20
September 2021 (date of incorporation as per the deed of incorporation agreed
between shareholders in front of the notary) as a public limited liability
company in Luxembourg (Société Anonyme or "S.A.") under the laws of the
Grand Duchy of Luxembourg for an unlimited period. The Company is registered
with the Luxembourg Trade and Companies Register (Registre de Commerce et des
Société, in abbreviated "RSC") under the number B259488 since 20 September
2021.
On the 8th of December 2021 the Company incorporated HMA1 (ESCROW) Limited
(the "Subsidiary"), under the Companies Act 2006 , in the United Kingdome,
being a private company, limited by shares, with its registered office at 52
Lime Street, London, England.
The consolidated financial statements for the period ended 31 December 2021
covers the Company and its subsidiary (collectively "the Group").
The share capital of the Company on 20 September 2021 was set at GBP 30,000
(thirty thousand Pound Sterling), represented by 3,750,000 (three million
seven hundred fifty thousand) Sponsor Shares without nominal value. The
Company may also issue Ordinary Shares. The share capital has been fully
paid up.
The registered office of the Company is located at 17, Boulevard F.W.
Raiffeisen, L‑2411, Luxembourg. The financial year of the Company starts
on 1 January and ends on 31 December; except for the first financial period
which starts on 20 September 2021 (date of incorporation) and ends on 31
December 2021.
The Company is managed by its Board of Directors composed of Luke Alvarez,
Cherry Freeman, Ian Livingstone as Executive Directors and Jurgen Post, Emily
Greer, and Addie Pinkster as Non-Executive Directors (the "Board of
Directors").
The sole shareholder of the Company is Hiro Sponsor I LLP (the "Sponsor"); a
limited liability partnership, incorporated and existing under the laws of
England, having its registered office located at 18th Floor, the Scalpel, 52
Lime Street, London, EC3M 7AF, United‑Kingdom, and registered with the
United Kingdom's Companies House under number OC439442.
The Company has been established for the purpose of acquiring one operating
business with principal business operations in a member state of the European
Economic Area or the United Kingdom or Israel in the form of a merger, capital
stock exchange, share purchase, asset acquisition, reorganization or similar
transaction (the "Business Combination").
It is the intention of the Board of Directors that the Company will undergo an
initial offering (the "Placing") and be admitted to listing on the standard
listing segment of the FCA's Official List and to trading on the London Stock
Exchange's main market for listed securities, a regulated market operated by
the London Stock Exchange PLC. The main characteristics which will be
described in the prospectus, to be approved by the United Kingdom Financial
Conduct Authority (the "FCA"), with its head office at 12 Endeavour Square,
London E20 1JN, United Kingdom, for the purpose of admission of certain
shares and warrants to the standard listing segment of the FCA's Official List
and to trading on the London Stock Exchange's main market for listed
securities.
The Company intends to seek a suitable target for the Business Combination
with a focus on targets operating in the sectors of Video Games, Esports,
Interactive Streaming, GenY Social Networks, Connected Fitness & Wellness
and Metaverse Technologies. The Company will have 15 months from the date
of the admission to trading to consummate a Business Combination, plus an
initial three-month extension period (the "First Extension Period") and a
further three-month extension period (the "Second Extension Period") subject
in each case to approval by the Company's shareholders. Otherwise, the Company
will be liquidated and distribute all of its assets to its shareholders, the
Public shares will be redeemed first and then the Company will be liquidated
and all remaining assets will be distributed to remaining shareholders (Class
B shareholders).
Pursuant to Article 3 of the current articles of association, the Company's
corporate purpose is the holding, management, development and disposal of
participations and any interests, in Luxembourg or abroad, in any companies
and/or enterprises in any form whatsoever. The Company may in particular
acquire by subscription, purchase and exchange or in any other manner any
stock, shares and other participation securities, bonds, debentures,
certificates of deposit and other debt instruments and more generally, any
securities and financial instruments issued by any public or private entity.
It may participate in the creation, development, management and control of any
company and/or enterprise. It may further invest in the acquisition and
management of a portfolio of patents or other intellectual property rights of
any nature or origin.
The Company may borrow in any form. It may issue notes, bonds and any kind
of debt and equity securities. The Company may lend funds, including without
limitation, resulting from any borrowings of the Company and/or from the issue
of any equity or debt securities of any kind, to its Subsidiaries, affiliated
companies and/or any other companies or entities it deems fit.
The Company may further guarantee, grant security in favour of or otherwise
assist the companies in which it holds a direct or indirect participation or
which form part of the same group of companies as the Company. The Company
may further give guarantees, pledge, transfer or encumber or otherwise create
security over some or all of its assets to guarantee its own obligations and
those of any other company, and generally for its own benefit and that of any
other company or person. For the avoidance of doubt, the Company may not
carry out any regulated activities of the financial sector without having
obtained the required authorization.
The Company may use any techniques and instruments to manage its investments
efficiently and to protect itself against credit risks, currency exchange
exposure, interest rate risks and other risks.
The Company may, for its own account as well as for the account of third
parties, carry out any commercial, financial or industrial operation
(including, without limitation, transactions with respect to real estate or
movable property) which may be useful or necessary to the accomplishment of
its purpose or which are directly or indirectly related to its purpose.
2 Basis of preparation and accounting policies
2.1 Basis of preparation
The group's financial year starts on 1 January and ends on 31 December of
each year, with the exception of the first financial period, which starts on
20 September 2021 (date of incorporation) and ends on 31 December 2021.
The consolidated financial statements comprise a consolidated statement of
financial position, a consolidated statement of comprehensive income, a
consolidated statement of changes in equity, a consolidated statement of cash
flows and the accompanying notes for the period ended 31 December 2021.
These consolidated financial statements have been prepared under the
assumption that the Group operates on a going concern basis.
These consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union for the period from 20 September 2021 (date of incorporation) to
31 December 2021 and were authorised for issue in accordance with a
resolution of the Board of Directors on 25 April 2022.
These consolidated financial statements have been prepared in Sterling (GPB)
unless stated otherwise.
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below.
2.2 Summary of significant accounting policies
2.2.1 New or revised Standards or Interpretations
International accounting standards include IFRS, IAS (International Accounting
Standards) and their interpretations (Standing Interpretations Committee) and
IFRICs (International Financial Reporting Interpretations Committee).
The repository adopted by the European Commission is available on the
following internet site:
http://ec.eu‑ropa.eu/finance/accounting/ias/index_en.htm
(http://ec.eu-ropa.eu/finance/accounting/ias/index_en.htm)
(a) New standards, amendments and interpretations that
were issued but not yet applicable as at 31 December 2021 and that are most
relevant to the Company - not yet endorsed by the EU:
· Reference to the Conceptual Framework - Amendments to IFRS 3: In
May 2020, the IASB issued Amendments to IFRS 3 Business Combinations -
Reference to the Conceptual Framework. The amendments are intended to replace
a reference to the Framework for the Preparation and Presentation of Financial
Statements, issued in 1989, with a reference to the Conceptual Framework for
Financial Reporting issued in March 2018 without significantly changing its
requirements.
· The IASB also added an exception to the recognition principle of
IFRS 3 to avoid the issue of potential 'day 2' gains or losses arising from
liabilities and contingent liabilities that would be within the scope of IAS
37 or IFRIC 21 Levies, if incurred separately.
At the same time, the IASB decided to clarify existing guidance in IFRS 3 for
contingent assets that would not be affected by replacing the reference to the
Framework for the Preparation and Presentation of Financial Statements.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2022 and apply prospectively.
· Amendments to IAS 1 -: Classification of Liabilities as Current
or Non-current. In January 2020, the IASB issued amendments to paragraphs 69
to 76 of IAS 1 to specify the requirements for classifying liabilities as
current or non-current. The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and must be applied
retrospectively.
· Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of
Accounting policies. In February 2021, the IASB issued amendments that are
intended to help preparers in deciding which accounting policies to disclose
in their financial statements. The amendments are effective for annual periods
beginning on or after 1 January 2023.
· Amendments to IAS 8: Definition of Accounting Estimate. In
February 2021, the IASB issued amendments to help entities to distinguish
between accounting policies and accounting estimates. The amendments are
effective for annual periods beginning on or after 1 January 2023.
· Amendments to IAS 12 - not yet endorsed by the EU: Deferred Tax
related to Assets and Liabilities arising from a Single Transaction. In May
2021, the IASB amended the standard to reduce diversity in the way that
entities account for deferred tax on transactions and events, such as leases
and decommissioning obligations, that lead to the initial recognition of both
an asset and a liability. The amendments apply for annual reporting periods
beginning on or after 1 January 2023 and may be applied early.
· Amendments to IAS 37: Onerous Contracts - Cost of Fulfilling a
Contract. The amendments specify that the 'cost of fulfilling' a contract
comprises the 'costs that relate directly to the contract'. Costs that relate
directly to a contract can either be incremental costs of fulfilling that
contract (examples would be direct labour, materials) or an allocation of
other costs that relate directly to fulfilling contracts (an example would be
the allocation of the depreciation charge for an item of property, plant and
equipment used in fulfilling the contract). The amendments are effective for
annual reporting periods beginning on or after 1 January 2022 with earlier
application permitted.
· Annual improvements to IFRS Standards 2018-2020: The annual
improvements to IFRS consists of amendments to IFRS 1, IFRS 9, IFRS 16, and
IAS 41. The amendments are effective for annual reporting periods beginning on
or after 1 January 2022 with earlier application permitted.
The initial application of these standards, interpretations, and amendments to
existing standards is planned for the period of time from when its application
becomes compulsory. Currently, the Board of Directors anticipates that the
adoption of these Standards and Interpretations in future periods will have no
material impact on the financial information of the Group.
2.2.2 Basis for of consolidation
Subsidiaries
Subsidiaries included in these consolidated financial statements are all
entities over which the Company has direct or indirect control. The Group
controls such an entity when it is exposed to, or has substantive rights to,
variable returns from its involvement with the Group and has the ability to
affect those returns through its power to direct the activities of the
entities. Subsidiaries are fully consolidated from the date on which control
is transferred to the Company until the date on which control ceases.
Intercompany transactions, outstanding balances, and unrealised gains on
transactions between Group companies are eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the transferred asset. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the net result/(loss) and equity of the
subsidiaries are shown separately in the consolidated statement of financial
position, consolidated statement of comprehensive income and consolidated
statement of changes in equity
2.2.3 Foreign currencies
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the curren-cy of the primary economic environment in which the
entity operates ("the functional currency"). The consolidated financial
statements are presented in Sterling (GBP).
Foreign currency transactions and balances
In preparing these consolidated financial statements of the Group,
transactions in currencies other than the entity's functional currency
(foreign currencies) are recognised at the rates of exchange prevailing on the
dates of the transactions. At each reporting date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing at that date. Non‑monetary items carried at fair value
that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Nonmonetary items
that are measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences are recognised in profit or loss in the year in which
they arise except for exchange differences on monetary items related to
deferred costs included in trade payables; which are recognised directly in
deferred cost.
2.2.4 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
The Group recognises a financial asset or a financial liability when it
becomes a party to the contractual provisions of the instrument. Purchases
or sales of financial assets that require delivery of assets within the time
frame generally established by regulation or convention in the marketplace
(regular way trades) are recognised on the trade date i.e. the date that the
Group commits to purchase or sell the asset.
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires. When an existing financial liability is replaced by
another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the
recognition of new liability. The difference in the respective carrying
account is recognised in the statement of profit or loss.
Classification and initial measurement of financial assets
All financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
Financial assets are classified into one of the following categories:
· amortised cost
· fair value through profit or loss (FVTPL), or
· fair value through other comprehensive income
(FVOCI).
In the period presented the Group includes cash and cash equivalents in the
category Financial assets held at amortised costs.
In the period presented the Group does not have any financial assets
categorised as FVTPL.
In the period presented the Group does not have any financial assets
categorised as FVOCI.
The classification is determined by both:
· the entity's business model for managing the
financial asset, and
· the contractual cash flow characteristics of the
financial asset.
All revenue and expenses relating to financial assets that are recognised in
profit or loss are presented within finance costs, finance income or other
financial items, except for impairment of trade receivables which is presented
within other expenses.
Subsequent measurement of financial assets
Financial assets are measured at amortised cost if the assets meet the
following conditions and are not designated as FVTPL:
· they are held within a business model whose
objective is to hold the financial assets and collect its contractual cash
flows, and
· the contractual terms of the financial assets
give rise to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the
effective interest method (EIR). Discounting is omitted where the effect of
discounting is immaterial.
Impairment of financial assets
IFRS 9's impairment requirements use forward‑looking information to
recognise expected credit losses - the 'expected credit loss (ECL) model'.
Instruments within the scope of the requirements included loans and some
financial guarantee contracts (for the issuer) that are not measured at fair
value through profit or loss.
The Group considers a broader range of information when assessing credit risk
and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
In applying this forward‑looking approach, a distinction is made between:
· financial instruments that have not deteriorated
significantly in credit quality since initial recognition or that have low
credit risk ('Stage 1').
· financial instruments that have deteriorated
significantly in credit quality since initial recognition and whose credit
risk is not low ('Stage 2').
· 'Stage 3' would cover financial assets that have
objective evidence of impairment at the reporting date.
Measurement of the expected credit losses is determined by a
probability‑weighted estimate of credit losses over the expected life of the
financial instrument.
Classification and measurement of financial liabilities
The financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss or financial liabilities at
amortised cost. The Group's financial liabilities carried at amortised costs
include borrowings and trade and other payables.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group designated a
financial liability at fair value through profit or loss.
Financial liabilities recognised at amortised cost are subsequently measured,
using the effective interest method.
All interest‑related charges and, if applicable, changes in an instrument's
fair value that are reported in profit or loss are included within finance
costs or finance income.
Offsetting financial instruments
Financial instruments are offset and a net amount reported in the statement of
financial position only when there is currently a legally enforceable right to
offset the recognised amounts and there is an intention to settle on a net
basis, or realise the asset and settle the liability simultaneously.
2.2.5 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash
at banks and on hand and short term, highly liquid deposits with a maturity of
three months or less, that are readily convertible to a known amount of cash
and subject to an insignificant risk of changes in value. The carrying
amounts of these approximate their fair value.
For the purpose of the financial statement of cash flows, cash and cash
equivalents consist of cash and short term deposits, as defined above, net of
outstanding bank overdrafts as they are considered an integral part of the
Group's cash management.
2.2.6 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
· In the principal market for the asset or
liability; or
· In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non‑financial asset takes into account a
market participant's ability to generate economic benefits by using the asset
in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in
the consolidated financial statements are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
· Level 1 ‑ Quoted (unadjusted) market prices in
active markets for identical assets or liabilities;
· Level 2 ‑ Valuation techniques for which the
lowest level input that is significant to the fair value measurement is
directly or indirectly observable;
· Level 3 ‑ Valuation techniques for which the
lowest level input that is significant to the fair value measurement is
unobservable.
2.2.7 Provisions and contingent liabilities
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
economic resources will be required from the Group and a reliable estimate can
be made of the amount of the obligation. The timing or amount of the outflow
may still be uncertain.
Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the
present obligation, based on the most reliable evidence available at the
reporting date, including the risks and uncertainties associated with the
present obligation. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole.
If the effect of the time value of money is material, provisions are
discounted using a current pre‑tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.
Any reimbursement that the Group is virtually certain to collect from a third
party with respect to the obligation is recognised as a separate asset.
However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of
present obligations is not probable. Such situations are disclosed as
contingent liabilities unless the outflow of resources is remote.
2.2.8 Other payables and accrued expenses
Other payables and accrued expenses are obligations to pay for services that
have been or will be acquired in the ordinary course of business from
suppliers. They are classified as current liabilities if payment is due
within twelve months after statement of financial position date. If not,
they are represented as non‑current liabilities. Other payables and
accrued expenses are recognised initially at fair value and subsequently
stated at amortised costs. The difference between the proceeds and the
amount payable is recognised over the period of the payable using the
effective interest method.
2.2.9 Taxation
Income tax recognized in the statement of profit or loss and other
comprehensive income includes current and deferred taxes.
Current tax
Current income tax assets and liabilities are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or
substantively enacted at the reporting date in the countries where the Group
operates and generates taxable income.
Current and deferred tax are recognised in profit or loss, except when they
relate to items that are recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the business
combination.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying
amounts of assets and liabilities in the consolidated financial statements and
the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary
differences. Deferred tax assets are generally recognized for all deductible
temporary differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be
utilized. This is assessed based on the Group's forecast of future operating
results, adjusted for significant non‑taxable income and expenses and
specific limits on the use of Deferred tax liabilities are generally
recognised in full, although IAS 12 specifies limited exemptions.
The carrying amounts of deferred tax are reviewed at the end of each reporting
period and adjusted if needed.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
2.2.10 Current versus non-current classification
The Group presents assets and liabilities in statement of financial position
based on current/non‑current classification.
An asset is current when it is:
· expected to be realised or intended to be sold or
be consumed in normal operating cycle;
· held primarily for the purpose of trading;
· expected to be realised within twelve months
after the reporting period; or
· cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at least twelve months after
the reporting period.
All other assets are classified as non-current.
A liability is current when:
· it is expected to be settled in normal operating
cycle;
· it is held primarily for the purpose of trading;
· it is due to be settled within twelve months
after the reporting period; or
· there is no unconditional right to defer the
settlement of the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non‑current.
2.2.11 Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the
service or as incurred.
3 Significant accounting judgements, estimates and assumptions
The preparation of these consolidated financial statements in conformity with
IFRS requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses.
Actual results and outcomes may differ from management's estimates and
assumptions due to risks and uncertainties, including uncertainty in the
current economic environment due to the ongoing outbreak of a novel strain of
the coronavirus ("COVID‑19")
In December 2019, a COVID‑19 outbreak was reported in China, and, in March
2020, the World Health Organization declared it a pandemic. Since being
initially reported in China, the coronavirus has spread to over 150
countries.
Given the ongoing and dynamic nature of the COVID‑19 crisis, it is difficult
to predict the impact on the business of potential targets. The extent of
such impact will depend on future developments, which are highly uncertain and
cannot be predicted, including new information which may emerge concerning the
severity of the coronavirus and actions taken to contain the coronavirus or
its impact, among others. The ongoing COVID‑19 pandemic, the increased
market volatility and the potential unavailability of third‑party financing
caused by the COVID‑19 pandemic as well as restrictions on travel and
in‑person meetings, which may hinder the due diligence process and
negotiations, may also delay and/or adversely affect the Business Combination
or make it more costly.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
As at 31 December 2021, the significant areas of estimation, uncertainty and
critical judgements in applying accounting policies that have the most
significant effect on the amounts recognised in these consolidated financial
statements are:
· Going concern: Judgement on going concern consideration. The
Board of Directors' underlying assumption to prepare the consolidated
financial statements is based on the anticipated successful completion of the
Placing. As required by art. 480‑2 of the Luxembourg law of
10 August 1915 (as amended) the Board of Directors of the Company plans to
present a business continuity plan to the shareholders. On 19 January 2022 the
Company entered into a loan agreement with the Sponsor for the purpose of
settling its creditors and other costs which become due in the ordinary course
of business, should the Placing for any reason not be successful. (Note 14.3)
· Deferred costs: According to the Board of Directors' underlying
assumption of a successful admission to the regulated market of the London
Stock Exchange, the related amounts incurred as transaction costs as of
31 December 2021 that qualify as incremental costs directly attributable to
the Placing are deferred until the effects of the Placing are reflected in the
accounts, and reported as deferred costs in the consolidated financial
statements as of that date. These deferred costs will be deducted from the
proceeds of the planned Placing, which occurred on the 2(nd) of February 2022.
4 Financial risk management, objectives and policies
The Group is newly formed and has not conducted any operations and currently
generates no revenue. The Group does not have material foreign currency
transactions. Hence, currently the Group does not face foreign currency
risks nor any interest rate risks as the financial instruments of the Group
bear a fixed interest rate.
Liquidity risks
Liquidity risk is the risk that the Group will encounter difficulty in meeting
its financial obligations as they fall due. If the Placing contemplated by
the Company is completed, 100% of the gross proceeds of this Placing will be
deposited in a secured deposit account. The amount held in the secured
deposit account will only be released in connection with the completion of the
Business Combination or the Company's liquidation. Following the completion
of the Placing, the Board of Directors believes that the funds available to
the Group outside of the secured deposit account, together with the available
shareholder loan will be sufficient to pay costs and expenses which are
incurred by the Group prior to the completion of the Business Combination.
The objective of the Sponsor Warrants issued to the Sponsor at the time of the
Placing, is to use the proceeds to pay the various costs and expenses incurred
and contracted for as disclosed in the Consolidated Financial Statements,
except the underwriting commission. The proceeds of the Placing of Public
Shares will not be used to pay these expenses.
The Sponsor is committing additional funds to the Company through the
Overfunding Subscription, the proceeds of which will be held in an escrow
account. The purpose of the overfunding subscription is to provide additional
cash funding into the Escrow Account, in addition to the funding from the
proceeds of the Units sold in the Placing, for the redemption of the Public
Shares by Public Shareholders ("Initial Overfunding Shares").
The Initial Overfunding Shares and Initial Overfunding Warrants are not part
of the Placing but will be part of the applications for Shares Admissions and
Warrants Admission.
To the extent that the Business Combination Deadline is extended, the Sponsor
will commit further additional funds to the Company through the subscription
of additional units as referred to in Part VIII. 4 of the Prospectus.
Capital management
The Board of Directors' policy is to maintain a strong capital base so as to
maintain investor, creditor, and market confidence and to sustain future
development of the business. In order to meet the capital management
objective described above, the Company intends to raise funds through a
Placing reserved to certain qualified investors inside and outside of the
United Kingdom, and to have the public shares and public warrants to be issued
in such Placing admitted to listing and trading on the regulated market
segment of London Stock Exchange in the near future. The above‑mentioned
financial instruments to be issued as part of this Placing will represent what
the entity will manage as capital.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a financial
loss. The Group is currently exposed to credit risk from its deposit with
banks.
5 Other operating expenses
The other operating expenses of GBP 152,560 consist of fees for accounting,
legal, and other services not related to the Placing.
20 Sept 2021
to
31 Dec 2021
GBP
Accounting, tax consulting, auditing and similar 151,407
fees.......................................................................
Notarial and similar 1,153
fees.........................................................................................................................
Other operating 152,560
expenses........................................................................................................................
6 Income Tax
20 Sept 2021
to
31 Dec 2021
GBP
Loss for the period before 152,288
tax................................................................................................................
Theoretical tax charges, applying the tax rate of (34,722)
22.8%..................................................................
Tax effect of adjustments from Luxembourg GAAP to (166,761)
IFRS........................................................
Unrecognised deferred tax 201,783
asset............................................................................................................
Income Tax ‑
Income tax
The tax rate used in reconciliation above is the Luxembourgish tax rate
(22.8%) as the Company is domiciled in the Grand Duchy of Luxembourg. The
Subsidiary did not generate any result for the period.
Deferred tax
Deferred tax assets have not been recognised in respect of the loss incurred
during the period ended 31 December 2021 because it is not probable that
future taxable profit will be available against which the Group can utilise
the benefits therefrom. Unused tax losses of the Group can be used within a
period of 17 years as per Luxembourg tax law.
7 Earnings /(loss) per share
Basic earnings/(loss) per share ("EPS") is calculated by dividing the
profit/(loss) for the year attributable to ordinary equity holders of the
Group by the weighted average number of ordinary shares outstanding during the
period.
Diluted EPS is calculated by dividing the profit/(loss) attributable to
ordinary equity holders of the Group by the weighted average number of
ordinary shares outstanding during the year plus the weighted average number
of ordinary shares that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares.
Currently, no other diluting instruments have been issued. Therefore, basic
EPS equals diluted EPS as at 31 December 2021.
8 Deferred costs
Deferred costs of GBP 731,407 as at 31 December 2021 are composed mainly of
legal and administration costs incurred by the Company in relation to the
public offering which will be offset against the proceeds from the planned
Placing.
Other Placing related costs which have not been incurred relate to the
underwriter fees, legal fees for the underwriter and escrow, exchange,
regulatory, and listing fees. These costs once incurred will also be deducted
from the proceeds of the Placing
9 Cash and cash equivalents
The amount of cash and cash equivalents was GBP 30,000 as at
31 December 2021.
10 Issued capital and reserves
Share capital
As at 31 December 2021, the subscribed share capital amounts to GBP 30,000
consisting of 3,750,000 shares without nominal value held by the Sponsor,
hereinafter referred to as the "Sponsor Shares". The Company's share capital
may be increased or reduced by a resolution of the general meeting of
shareholders adopted in the manner required for an amendment for the articles
of association.
On 26 January 2022, the issued capital shares was reduced from 3,750,000 to
2,875,000 through a forfeiture of 875,000 Sponsor Shares at a nil cost.
It is planned that the Sponsor Shares shall convert into Public Shares subject
to a certain schedule and trading price following the consummation of the
Business Combination. The Sponsor Shares will convert into a number of
Public Shares such that the number of Public Shares issuable to the Sponsor
upon conversion of all Sponsor Shares will be equal, in the aggregate, on an
as‑converted basis, to 20% of the total ordinary shares in issue following
the Placing. The Placing took place on 2 February 2022, refer to note 14.4 for
detailed information of the effect of the placing on the Share capital and
15.5 on the Warrants at reporting date.
Authorised capital
As at 31 December 2021, the authorized capital of the Company is set at
GBP 1,000,000 consisting of 100,000,000 shares without nominal value.
Legal reserves
The Company is required to allocate a minimum of 5% of its annual net profit
to a legal reserve, until this reserve equals 10% of the subscribed share
capital. This reserve may not be distributed.
11 Trade and other payables
31 Dec2021
GBP
Accounting, tax consulting, auditing and similar 151,135
fees.......................................................................
Deferred 731,407
costs...........................................................................................................................................
Notarial and similar 1,153
fees.........................................................................................................................
Trade and other payables 893,695
Trade and other payables are related to legal and other services received by
the Group. The carrying amounts of these approximate their fair value.
12 Related party disclosures
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in
making financial or operational decisions.
Terms and conditions of transactions with related parties
There have been no guarantees provided or received for any related party
receivables or payables as at 31 December 2021. Please refer to note 14.3
regarding the Shareholders loan put in place subsequent to 31 December 2021.
Transactions with key management personnel
There are no advances or loans granted to members of the Board of Directors as
at 31 December 2021.
The Board of Directors consists of 6 members who did not receive any
remuneration during the period ended 31 December 2021.
The Company entered into contracts with the non‑executive directors which
will be effective from the date of the Placing. The agreed directors fees
are GBP 10,000 per annum; to be paid semi‑annually in arrears in equal
instalments after deduction of any taxes and other amounts that are required
by law. In addition to the directors fee the Company will procure that the
Sponsor transfers 25,000 Sponsor Shares in the Company held by the Sponsor to
the non‑executive directors.
13 Commitments and contingencies
In the context of the planned Placing, the Company entered into or is
contemplating to enter into respective contracts with different providers, the
total costs of which is estimated at approximately GBP 1,200,000 (excluding
underwriting commission fees and the costs recorded as deferred costs).
After the Placing, the Company expects to incur expenses as a result of being
a publicly listed company (for legal, financial reporting, accounting and
auditing compliance). The Company cannot estimate expenses incurred in
connection with researching targets, the investigation of potential target
businesses and the negotiation, drafting and execution of the transaction
documents appropriate for the Initial Business Combination, as the amounts
will depend on the specific circumstances of the Initial Business Combination.
The Group has no other commitments and contingencies as at 31 December 2021.
14 Events after statement of financial position date
No events occurred after the reporting period which requires amendment to or
disclosure in the consolidated financial statements, except from those
disclosed below.
14.1 Impact of the COVID-19 pandemic
As a result of the COVID‑19 pandemic business operations worldwide have been
impacted in various ways. The COVID‑19 pandemic may continue to impact the
business operations and the intended Placing and Business Combination
processes. There is uncertainty in the nature and degree of its continued
effects over time.
14.2 Underwriting agreement
The Company entered into an agreement with Citigroup Global Markets Limited
(Underwriting Agreement), by virtue of which the Company will be liable to pay
Upfront Commission Fees of 2% of the aggregate gross proceeds of the
Securities, payable at closing of the offering; and a deferred commission
equal to 3.5% of the aggregate gross proceeds of the Securities, subject to
completion of Business Combination and payable after such completion.
Commissions are not payable on Securities issued to certain Investors; subject
to a maximum allocated amount of the greater of either GBP 32.5 million or 15%
of the Offering.
14.3 Shareholders loan
On 19 January 2022, the Company entered into a loan agreement with the Sponsor
for the purpose of settling its creditors and other costs which become due in
the ordinary course of business, should the Placing for any reason not be
successful. At reporting date no amount was drawn. The Placing took place
on 2 February 2022.The loan shall be available to the Company up until
consummation of the Business Combination or the liquidation of the Company.
14.4 Listing on London Stock Exchange
On 2 February 2022 the Company's Prospectus was approved and published on the
London Stock Exchange.
In terms of the Sponsor Private Placement Agreement; on 2 February 2022, the
Sponsor subscribed to 310,500 Overfunding shares at £10 per share, and
5,070,000 Class B Sponsor Warrants at GBP1 per warrant, raising capital in the
amount of GBP 8,175,000.
On 7 February 2022, 11,500,000 of the Company's Public Shares were admitted
to the standard listing segment of the Official List of the Financial Conduct
Authority and to trading on the London Stock Exchange's main market for listed
securities under ticker "HMA1", raising capital in the amount of GBP
115,000,000.
On 7 February 2022 Citigroup Global Markets Limited, acting as stabilising
manager, gave notice on of its non-exercise of the put option granted by the
Company.
On 8 February 2022 the Sponsor subscribed for a further 34,500 Shares cum
Rights at a price of GBP 10.00 per share, (the "Overfunding Shares
Subscription"). The non-exercise of the Put Option and the Overfunding Shares
Subscription brings the total number of Shares cum Rights in issue at
11,845,000.
The total number of voting rights in the Company following the Overfunding
Subscription is 14,720,000. This including the 2,8750,000 unlisted class B
ordinary shares with no par value held by the Sponsor.
14.5 Warrants Admission to Trading on the London Stock Exchange
On 8 February 2022 the Company published its notice on the stock exchange that
it intends to accelerate the proposed issue and admission of the Public
Warrants as follows:
- Warrants Ex Date
22 February 2022
- Warrants Record Date
6.00 p.m. on 23 February 2022
- Warrants Admission
Date
8.00 a.m. on 24 February 2022
On 8 February 2022, the Sponsor, in terms of the Sponsor Private Placement
Agreement; subscribed for a further 230,000 Sponsor Warrants at £1 per
warrant.
On 24 February 2022, the Company admitted 5,922,500 Public Warrants to the
standard listing segment of the Official List of the Financial Conduct
Authority and to trading on the London Stock Exchange's main market for listed
securities under ticker "HM1W".
14.6 Subscription of shares in HMA1 (Escrow) Limited
On 11 February 2022, the Company subscribed for 11,845,000 ordinary shares in
HMA1 at nominal value of GBP 1 per share. HMA1 issued the shares and the
consideration was fully paid up by the Company on the 15(th) of February 2022.
14.7 Geopolitical Situation
Management considered the effects of the invasion of Ukraine by Russia and it
has no impact on the Group and consequently does not affect the measurement of
Group's assets and liabilities as at 31 December 2021.
To the Shareholders of
HIRO METAVERSE ACQUISITIONS I S.A.
Société Anonyme
R.C.S. Luxembourg B 259.488
17, Boulevard Raiffeisen
L-2411 Luxembourg
REPORT OF THE REVISEUR D'ENTREPRISES AGREE
Report on the Audit of the Separate Financial Statements
Opinion
We have audited the separate financial statements (the "financial statements")
of HIRO METAVERSE ACQUISITIONS I SA (the "Company"), which comprise the
statement of financial position as of 31 December 2021, and the statement of
comprehensive income, statement of changes in equity and statement of
cash-flows for the period from 20 September 2021 (date of incorporation) to 31
December 2021, and notes to the financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair
view of the financial position of the Company as of 31 December 2021, and of
its financial performance and its cash flows for the period from 20 September
2021 (date of incorporation) to 31 December 2021 in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the
European Union.
Basis for Opinion
We conducted our audit in accordance with the EU Regulation N° 537/2014, the
Law of 23 July 2016 on the audit profession ("Law of 23 July 2016") and with
International Standards on Auditing ("ISAs") as adopted for Luxembourg by the
"Commission de Surveillance du Secteur Financier" ("CSSF"). Our
responsibilities under the EU regulation No 537/2014, the Law of 23 July 2016
and ISAs as adopted for Luxembourg by the CSSF are further described in the «
Responsibilities of the "réviseur d'entreprises agréé" for the Audit of the
Financial Statements » section of our report. We are also independent of the
Company in accordance with the International Code of Ethics for Professional
Accountants, including International Independence Standards, issued by the
International Ethics Standards Board for Accountants (IESBA Code) as adopted
for Luxembourg by the CSSF together with the ethical requirements that are
relevant to our audit of the financial statements, and have fulfilled our
other ethical responsibilities under those ethical requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period. These matters were addressed in the context of the audit of the
financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Based on the result of our audit procedures no Key Audit Matters were
identified for the audit of the financial statements as of 31 December 2021.
Other information
The Board of Directors is responsible for the other information. The other
information comprises the information stated in the Directors Report including
the Corporate Governance Statement but does not include the financial
statements and our report of the "réviseur d'entreprises agréé" thereon.
Our opinion on the financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report
this fact.
We have nothing to report in this regard.
Responsibilities of the Board of Directors and Those Charged with Governance
of the Company for the Financial Statements
The Board of Directors of the Company is responsible for the preparation and
fair presentation of the financial statements in accordance with IFRSs as
adopted by the European Union and for such internal control as the Board of
Directors of the Company determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
The Board of Directors is also responsible for presenting the financial
statements in compliance with the requirements set out in the Delegated
Regulation 2019/815 on European Single Electronic Format, as amended ("ESEF
Regulation").
In preparing the financial statements, the Board of Directors of the Company
is responsible for assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Board of Directors either
intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company's
financial reporting process.
Responsibilities of the "Réviseur d'Entreprises Agréé" for the Audit of the
financial statements
The objectives of our audit are to obtain reasonable assurance about whether
the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue a report of the "Réviseur
d'Entreprises Agréé" that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in
accordance with accordance with the EU Regulation N° 537/2014, the Law of 23
July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always
detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the EU Regulation N° 537/2014, the Law
of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we
exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures made by the
Board of Directors of the Company.
• Conclude on the appropriateness of Board of Directors of the
Company's use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to
continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our report of the "Réviseur
d'Entreprises Agréé" to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our report of the
"Réviseur d'Entreprises Agréé". However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
• Assess whether the financial statements have been prepared, in
all material respects, in compliance with the requirements laid down in the
ESEF Regulation.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and
communicate to them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We
describe these matters in our report unless law or regulation precludes public
disclosure about the matter.
Report on Other Legal and Regulatory Requirements
We have been appointed as "réviseur d'entreprises agréé" on 20 September
2021 and the duration of our uninterrupted engagement, including previous
renewals and reappointments, is 1 year.
The Directors report is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
We have checked the compliance of the financial statements of the Company as
at 31 December 2021 with relevant statutory requirements set out in the ESEF
Regulation that are applicable to the financial statements. For the Company,
it relates to financial statements prepared in valid xHTML format.
In our opinion, the financial statements of the Company as at 31 December
2021, identified as 222100X27S5HMALJTB53-2021-12-31, have been prepared, in
all material respects, in compliance with the requirements laid down in the
ESEF Regulation.
We confirm that the audit opinion is consistent with the additional report to
the audit committee.
We confirm that the prohibited non-audit services referred to in EU Regulation
No 537/2014 were not provided and that we remained independent of the Company
in conducting the audit.
Luxembourg, 27 April 2022
For Mazars Luxembourg, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Nadhmi AMOURI
Réviseur d'entreprises agréé
Statement of comprehensive income for the period from 20 September 2021 to
31 December 2021
Note 20 Sept 2021
to
31 Dec 2021
GBP
Revenue.................................................................................................................... ‑
Other operating 5 (152,560)
expenses......................................................................................
Taxes, duties and similar 6 ‑
expenses......................................................................
Operating (152,560)
(loss)/profit.........................................................................................
Finance ‑
income.......................................................................................................
Finance ‑
costs...........................................................................................................
Foreign currency exchange 272
gains/(losses)...........................................................
Loss before income (152,288)
tax........................................................................................
Income 6 ‑
tax...............................................................................................................
Profit/(loss) for the (152,288)
period..................................................................................
Other comprehensive ‑
income.............................................................................
Total comprehensive income/(loss) for the period, net of (152,288)
tax....................
Earnings/(loss) per share attributable to equity holders 7
Net earnings per
share.........................................................................................
(0.04)
The accompanying notes form an integral part of these financial statements
Statement of financial position as at 31 December 2021
Assets Notes 31 Dec 2021
GBP
Financial assets at fair value through profit or loss 8 1
Current assets
Deferred 9 731,407
costs...........................................................................................................
Trade and other -
receivables...................................................................................
Cash and cash 10 30,000
equivalents.....................................................................................
Current 761,407
assets..........................................................................................................
Total Assets 761,408
Equity and liabilities
Equity
Share 11 30,000
capital.............................................................................................................
Accumulated (152,288)
deficit................................................................................................
(122,288)
Liabilities
Current liabilities
Trade and other 12 883,696
payables.......................................................................................
Taxes 6 ‑
payable..........................................................................................................
Total current 883,696
liabilities.........................................................................................
Total 883,696
liabilities........................................................................................................
Total equity and 761,408
liabilities...................................................................................
The accompanying notes form an integral part of these separate financial
statements
Statement of changes in equity for the period ended 31 December 2021
Notes Share capital Accumulated deficit Total equity
GBP GBP GBP
Issuance of incorporation capital........... 10 30,000 ‑ 30,000
Loss for the period..................................... ‑ (152,288) (152,288)
Other comprehensive income.................. ‑ ‑ ‑
Balance at 31 December 2021.............. 30,000 (152,288) (122,288)
The accompanying notes form an integral part of these separate financial
statements.
Statement of cash flows for the for the period 20 September 2021 to 31
December 2021
20 Sept 2021
to
31 Dec 2021
GBP
Cash flow from operating activities
Loss before income (152,288)
tax....................................................................................................................
Adjustments for:
.. Finance ‑
income..............................................................................................................................
.. Finance ‑
expense.............................................................................................................................
Net cash from operating activities before income (152,288)
tax............................................................
Changes in working capital:
.. Increase in deferred (731,407)
costs.............................................................................................................
.. Increase in trade and other 838,696
payables.........................................................................................
Net cash flows from operating ‑
activities....................................................................................
Cash flow from financing activities
Proceeds from issue of ordinary 30,000
shares.........................................................................................
Net cash flows from financing 30,000
activities....................................................................................
Net change in cash and cash 30,000
equivalents.....................................................................................
Cash and cash equivalents, ‑
beginning...........................................................................................
Cash and cash equivalents at the end of the 30,000
period.................................................................
The accompanying notes form an integral part of these separate financial
statements
15 General information
Hiro Metaverse Acquisitions I S.A. (the "Company") was incorporated on 20
September 2021 (date of incorporation as per the deed of incorporation agreed
between shareholders in front of the notary) as a public limited liability
company in Luxembourg (Société Anonyme or "S.A.") under the laws of the
Grand Duchy of Luxembourg for an unlimited period. The Company is registered
with the Luxembourg Trade and Companies Register (Registre de Commerce et des
Société, in abbreviated "RSC") under the number B259488 since 20 September
2021.
On the 8th of December 2021 the Company incorporated HMA1 (ESCROW) Limited
(the "Subsidiary"), under the Companies Act 2006 , in the United Kingdome,
being a private company, limited by shares, with its registered office at 52
Lime Street, London, England.
The share capital of the Company on 20 September 2021 was set at GBP 30,000
(thirty thousand Pound Sterling), represented by 3,750,000 (three million
seven hundred fifty thousand) Sponsor Shares without nominal value. The
Company may also issue Ordinary Shares. The share capital has been fully
paid up.
The registered office of the Company is located at 17, Boulevard F.W.
Raiffeisen, L‑2411, Luxembourg. The financial year of the Company starts
on 1 January and ends on 31 December; except for the first financial period
which starts on 20 September 2021 (date of incorporation) and ends on 31
December 2021.
The Company is managed by its Board of Directors composed of Luke Alvarez,
Cherry Freeman, Ian Livingstone as Executive Directors and Jurgen Post, Emily
Greer, and Addie Pinkster as Non-Executive Directors (the "Board of
Directors").
The sole shareholder of the Company is Hiro Sponsor I LLP (the "Sponsor"); a
limited liability partnership, incorporated and existing under the laws of
England, having its registered office located at 18th Floor, the Scalpel, 52
Lime Street, London, EC3M 7AF, United‑Kingdom, and registered with the
United Kingdom's Companies House under number OC439442.
The Company has been established for the purpose of acquiring one operating
business with principal business operations in a member state of the European
Economic Area or the United Kingdom or Israel in the form of a merger, capital
stock exchange, share purchase, asset acquisition, reorganization or similar
transaction (the "Business Combination").
It is the intention of the Board of Directors that the Company will undergo an
initial offering (the "Placing") and be admitted to listing on the standard
listing segment of the FCA's Official List and to trading on the London Stock
Exchange's main market for listed securities, a regulated market operated by
the London Stock Exchange PLC. The main characteristics which will be
described in the prospectus, to be approved by the United Kingdom Financial
Conduct Authority (the "FCA"), with its head office at 12 Endeavour Square,
London E20 1JN, United Kingdom, for the purpose of admission of certain
shares and warrants to the standard listing segment of the FCA's Official List
and to trading on the London Stock Exchange's main market for listed
securities.
The Company intends to seek a suitable target for the Business Combination
with a focus on targets operating in the sectors of Video Games, Esports,
Interactive Streaming, GenY Social Networks, Connected Fitness & Wellness
and Metaverse Technologies. The Company will have 15 months from the date
of the admission to trading to consummate a Business Combination, plus an
initial three-month extension period (the "First Extension Period") and a
further three-month extension period (the "Second Extension Period") subject
in each case to approval by the Company's shareholders. Otherwise, the Company
will be liquidated and distribute all of its assets to its shareholders, the
Public shares will be redeemed first and then the Company will be liquidated
and all remaining assets will be distributed to remaining shareholders (Class
B shareholders).
Pursuant to Article 3 of the current articles of association, the Company's
corporate purpose is the holding, management, development and disposal of
participations and any interests, in Luxembourg or abroad, in any companies
and/or enterprises in any form whatsoever. The Company may in particular
acquire by subscription, purchase and exchange or in any other manner any
stock, shares and other participation securities, bonds, debentures,
certificates of deposit and other debt instruments and more generally, any
securities and financial instruments issued by any public or private entity.
It may participate in the creation, development, management and control of any
company and/or enterprise. It may further invest in the acquisition and
management of a portfolio of patents or other intellectual property rights of
any nature or origin.
The Company may borrow in any form. It may issue notes, bonds and any kind
of debt and equity securities. The Company may lend funds, including without
limitation, resulting from any borrowings of the Company and/or from the issue
of any equity or debt securities of any kind, to its Subsidiaries, affiliated
companies and/or any other companies or entities it deems fit.
The Company may further guarantee, grant security in favour of or otherwise
assist the companies in which it holds a direct or indirect participation or
which form part of the same group of companies as the Company. The Company
may further give guarantees, pledge, transfer or encumber or otherwise create
security over some or all of its assets to guarantee its own obligations and
those of any other company, and generally for its own benefit and that of any
other company or person. For the avoidance of doubt, the Company may not
carry out any regulated activities of the financial sector without having
obtained the required authorization.
The Company may use any techniques and instruments to manage its investments
efficiently and to protect itself against credit risks, currency exchange
exposure, interest rate risks and other risks.
The Company may, for its own account as well as for the account of third
parties, carry out any commercial, financial or industrial operation
(including, without limitation, transactions with respect to real estate or
movable property) which may be useful or necessary to the accomplishment of
its purpose or which are directly or indirectly related to its purpose.
16 Basis of preparation and accounting policies
16.1 Basis of preparation
The Company's financial year starts on 1 January and ends on 31 December of
each year, with the exception of the first financial period, which starts on
20 September 2021 (date of incorporation) and ends on 31 December 2021.
The separate financial statements comprise a statement of financial position,
a statement of comprehensive income, a statement of changes in equity, a
statement of cash flows and the accompanying notes for the period ended 31
December 2021. These separate financial statements have been prepared under
the assumption that the Company operates on a going concern basis.
These separate financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union for the period from 20 September 2021 (date of incorporation) to
31 December 2021 and were authorised for issue in accordance with a
resolution of the Board of Directors on 14 April 2022.
These separate financial statements have been prepared in Sterling (GPB)
unless stated otherwise.
The principal accounting policies applied in the preparation of these separate
financial statements are set out below.
16.2 Summary of significant accounting policies
16.2.1 New or revised Standards or Interpretations
International accounting standards include IFRS, IAS (International Accounting
Standards) and their interpretations (Standing Interpretations Committee) and
IFRICs (International Financial Reporting Interpretations Committee).
The repository adopted by the European Commission is available on the
following internet site:
http://ec.eu‑ropa.eu/finance/accounting/ias/index_en.htm
(http://ec.eu-ropa.eu/finance/accounting/ias/index_en.htm)
(a) New standards, amendments and interpretations that
were issued but not yet applicable as at 31 December 2021 and that are most
relevant to the Company - not yet endorsed by the EU:
· Reference to the Conceptual Framework - Amendments to IFRS 3: In
May 2020, the IASB issued Amendments to IFRS 3 Business Combinations -
Reference to the Conceptual Framework. The amendments are intended to replace
a reference to the Framework for the Preparation and Presentation of Financial
Statements, issued in 1989, with a reference to the Conceptual Framework for
Financial Reporting issued in March 2018 without significantly changing its
requirements.
· The IASB also added an exception to the recognition principle of
IFRS 3 to avoid the issue of potential 'day 2' gains or losses arising from
liabilities and contingent liabilities that would be within the scope of IAS
37 or IFRIC 21 Levies, if incurred separately.
At the same time, the IASB decided to clarify existing guidance in IFRS 3 for
contingent assets that would not be affected by replacing the reference to the
Framework for the Preparation and Presentation of Financial Statements.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2022 and apply prospectively.
· Amendments to IAS 1 -: Classification of Liabilities as Current
or Non-current. In January 2020, the IASB issued amendments to paragraphs 69
to 76 of IAS 1 to specify the requirements for classifying liabilities as
current or non-current. The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and must be applied
retrospectively.
· Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of
Accounting policies. In February 2021, the IASB issued amendments that are
intended to help preparers in deciding which accounting policies to disclose
in their financial statements. The amendments are effective for annual periods
beginning on or after 1 January 2023.
· Amendments to IAS 8: Definition of Accounting Estimate. In
February 2021, the IASB issued amendments to help entities to distinguish
between accounting policies and accounting estimates. The amendments are
effective for annual periods beginning on or after 1 January 2023.
· Amendments to IAS 12 - not yet endorsed by the EU: Deferred Tax
related to Assets and Liabilities arising from a Single Transaction. In May
2021, the IASB amended the standard to reduce diversity in the way that
entities account for deferred tax on transactions and events, such as leases
and decommissioning obligations, that lead to the initial recognition of both
an asset and a liability. The amendments apply for annual reporting periods
beginning on or after 1 January 2023 and may be applied early.
· Amendments to IAS 37: Onerous Contracts - Cost of Fulfilling a
Contract. The amendments specify that the 'cost of fulfilling' a contract
comprises the 'costs that relate directly to the contract'. Costs that relate
directly to a contract can either be incremental costs of fulfilling that
contract (examples would be direct labour, materials) or an allocation of
other costs that relate directly to fulfilling contracts (an example would be
the allocation of the depreciation charge for an item of property, plant and
equipment used in fulfilling the contract). The amendments are effective for
annual reporting periods beginning on or after 1 January 2022 with earlier
application permitted.
· Annual improvements to IFRS Standards 2018-2020: The annual
improvements to IFRS consists of amendments to IFRS 1, IFRS 9, IFRS 16, and
IAS 41. The amendments are effective for annual reporting periods beginning on
or after 1 January 2022 with earlier application permitted.
(b) The initial application of these standards,
interpretations, and amendments to existing standards is planned for the
period of time from when its application becomes compulsory. Currently, the
Board of Directors anticipates that the adoption of these Standards and
Interpretations in future periods will have no material impact on the
financial information of the Company.
16.2.2 Foreign currencies
Functional and presentation currency
These separate financial statements are presented in Sterling (GBP).
Foreign currency transactions and balances
In preparing these separate financial statements of the Company, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recognised at the rates of exchange prevailing on the dates of the
transactions. At each reporting date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates prevailing
at that date. Non‑monetary items carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at
the date when the fair value was determined. Nonmonetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences are recognised in profit or loss in the year in which
they arise except for exchange differences on monetary items related to
deferred costs included in trade payables; which are recognised directly in
deferred cost.
16.2.3 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
The Company recognises a financial asset or a financial liability when it
becomes a party to the contractual provisions of the instrument. Purchases
or sales of financial assets that require delivery of assets within the time
frame generally established by regulation or convention in the marketplace
(regular way trades) are recognised on the trade date i.e. the date that the
Company commits to purchase or sell the asset.
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires. When an existing financial liability is replaced by
another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the
recognition of new liability. The difference in the respective carrying
account is recognised in the statement of profit or loss.
Classification and initial measurement of financial assets
All financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
Financial assets are classified into one of the following categories:
· amortised cost
· fair value through profit or loss (FVTPL), or
· fair value through other comprehensive income
(FVOCI).
In the period presented the Company includes cash and cash equivalents in the
category Financial assets held at amortised costs.
In the period presented the Company includes investments in subsidiaries in
the category Fair value through profit or loss.
In the period presented the Company does not have any financial assets
categorised as FVOCI.
The classification is determined by both:
· the entity's business model for managing the
financial asset, and
· the contractual cash flow characteristics of the
financial asset.
All revenue and expenses relating to financial assets that are recognised in
profit or loss are presented within finance costs, finance income or other
financial items, except for impairment of trade receivables which is presented
within other expenses.
Subsequent measurement of financial assets
Financial assets are measured at amortised cost if the assets meet the
following conditions and are not designated as FVTPL:
· they are held within a business model whose
objective is to hold the financial assets and collect its contractual cash
flows, and
· the contractual terms of the financial assets
give rise to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the
effective interest method (EIR). Discounting is omitted where the effect of
discounting is immaterial.
Impairment of financial assets
IFRS 9's impairment requirements use forward‑looking information to
recognise expected credit losses - the 'expected credit loss (ECL) model'.
Instruments within the scope of the requirements included loans and some
financial guarantee contracts (for the issuer) that are not measured at fair
value through profit or loss.
The Company considers a broader range of information when assessing credit
risk and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
In applying this forward‑looking approach, a distinction is made between:
· financial instruments that have not deteriorated
significantly in credit quality since initial recognition or that have low
credit risk ('Stage 1').
· financial instruments that have deteriorated
significantly in credit quality since initial recognition and whose credit
risk is not low ('Stage 2').
· 'Stage 3' would cover financial assets that have
objective evidence of impairment at the reporting date.
Measurement of the expected credit losses is determined by a
probability‑weighted estimate of credit losses over the expected life of the
financial instrument.
Classification and measurement of financial liabilities
The financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss or financial liabilities at
amortised cost. The Company's financial liabilities carried at amortised
costs include borrowings and trade and other payables.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Company designated a
financial liability at fair value through profit or loss.
Financial liabilities recognised at amortised cost are subsequently measured,
using the effective interest method.
All interest‑related charges and, if applicable, changes in an instrument's
fair value that are reported in profit or loss are included within finance
costs or finance income.
Offsetting financial instruments
Financial instruments are offset and a net amount reported in the statement of
financial position only when there is currently a legally enforceable right to
offset the recognised amounts and there is an intention to settle on a net
basis, or realise the asset and settle the liability simultaneously.
16.2.4 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash
at banks and on hand and short term, highly liquid deposits with a maturity of
three months or less, that are readily convertible to a known amount of cash
and subject to an insignificant risk of changes in value. The carrying
amounts of these approximate their fair value.
For the purpose of the financial statement of cash flows, cash and cash
equivalents consist of cash and short term deposits, as defined above, net of
outstanding bank overdrafts as they are considered an integral part of the
Company's cash management.
16.2.5 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
· In the principal market for the asset or
liability; or
· In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the
Company.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non‑financial asset takes into account a
market participant's ability to generate economic benefits by using the asset
in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in
these separate financial statements are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
· Level 1 ‑ Quoted (unadjusted) market prices in
active markets for identical assets or liabilities;
· Level 2 ‑ Valuation techniques for which the
lowest level input that is significant to the fair value measurement is
directly or indirectly observable;
· Level 3 ‑ Valuation techniques for which the
lowest level input that is significant to the fair value measurement is
unobservable.
16.2.6 Provisions assets and contingent liabilities
Provisions are recognised when the Company has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
economic resources will be required from the Company and a reliable estimate
can be made of the amount of the obligation. The timing or amount of the
outflow may still be uncertain.
Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the
present obligation, based on the most reliable evidence available at the
reporting date, including the risks and uncertainties associated with the
present obligation. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole.
If the effect of the time value of money is material, provisions are
discounted using a current pre‑tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.
Any reimbursement that the Company is virtually certain to collect from a
third party with respect to the obligation is recognised as a separate
asset. However, this asset may not exceed the amount of the related
provision.
No liability is recognised if an outflow of economic resources as a result of
present obligations is not probable. Such situations are disclosed as
contingent liabilities unless the outflow of resources is remote.
16.2.7 Other payables and accrued expenses
Other payables and accrued expenses are obligations to pay for services that
have been or will be acquired in the ordinary course of business from
suppliers. They are classified as current liabilities if payment is due
within twelve months after statement of financial position date. If not,
they are represented as non‑current liabilities. Other payables and
accrued expenses are recognised initially at fair value and subsequently
stated at amortised costs. The difference between the proceeds and the
amount payable is recognised over the period of the payable using the
effective interest method.
16.2.8 Taxation
Income tax recognized in the statement of profit or loss and other
comprehensive income includes current and deferred taxes.
Current tax
Current income tax assets and liabilities are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or
substantively enacted at the reporting date in the countries where the Company
operates and generates taxable income.
Current and deferred tax are recognised in profit or loss, except when they
relate to items that are recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the business
combination.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying
amounts of assets and liabilities in these separate financial statements and
the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary
differences. Deferred tax assets are generally recognized for all deductible
temporary differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be
utilized. This is assessed based on the company's forecast of future
operating results, adjusted for significant non‑taxable income and expenses
and specific limits on the use of Deferred tax liabilities are generally
recognised in full, although IAS 12 specifies limited exemptions. As a
result of these exemptions in the future the company will not recognise
deferred tax on temporary differences relating to its future investments in
subsidiaries.
Such deferred tax assets and liabilities are not recognized if the temporary
difference arises from goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
The carrying amounts of deferred tax are reviewed at the end of each reporting
period and adjusted if needed.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
16.2.9 Current versus non-current classification
The company presents assets and liabilities in statement of financial position
based on current/non‑current classification.
An asset is current when it is:
· expected to be realised or intended to be sold or
be consumed in normal operating cycle;
· held primarily for the purpose of trading;
· expected to be realised within twelve months
after the reporting period; or
· cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at least twelve months after
the reporting period.
All other assets are classified as non-current.
A liability is current when:
· it is expected to be settled in normal operating
cycle;
· it is held primarily for the purpose of trading;
· it is due to be settled within twelve months
after the reporting period; or
· there is no unconditional right to defer the
settlement of the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non‑current.
16.2.10 Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the
service or as incurred.
17 Significant accounting judgements, estimates and assumptions
The preparation of these financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses.
Actual results and outcomes may differ from management's estimates and
assumptions due to risks and uncertainties, including uncertainty in the
current economic environment due to the ongoing outbreak of a novel strain of
the coronavirus ("COVID‑19")
In December 2019, a COVID‑19 outbreak was reported in China, and, in March
2020, the World Health Organization declared it a pandemic. Since being
initially reported in China, the coronavirus has spread to over 150
countries.
Given the ongoing and dynamic nature of the COVID‑19 crisis, it is difficult
to predict the impact on the business of potential targets. The extent of
such impact will depend on future developments, which are highly uncertain and
cannot be predicted, including new information which may emerge concerning the
severity of the coronavirus and actions taken to contain the coronavirus or
its impact, among others. The ongoing COVID‑19 pandemic, the increased
market volatility and the potential unavailability of third‑party financing
caused by the COVID‑19 pandemic as well as restrictions on travel and
in‑person meetings, which may hinder the due diligence process and
negotiations, may also delay and/or adversely affect the Business Combination
or make it more costly.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
As at 31 December 2021, the significant areas of estimation, uncertainty and
critical judgements in applying accounting policies that have the most
significant effect on the amounts recognised in these separate financial
statements are:
· Going concern: Judgement on going concern
consideration. The Board of Directors' underlying assumption to prepare these
separate financial statements is based on the anticipated successful
completion of the Placing. As required by art. 480‑2 of the Luxembourg
law of 10 August 1915 (as amended) the Board of Directors of the Company
plans to present a business continuity plan to the shareholders. On 19 January
2022 the Company entered into a loan agreement with the Sponsor for the
purpose of settling its creditors and other costs which become due in the
ordinary course of business, should the Placing for any reason not be
successful. (Note 15.3)
· Deferred costs: According to the Board of
Directors' underlying assumption of a successful admission to the regulated
market of the London Stock Exchange, the related amounts incurred as
transaction costs as of 31 December 2021 that qualify as incremental costs
directly attributable to the Placing are deferred until the effects of the
Placing are reflected in the accounts, and reported as deferred costs in these
separate financial statements as of that date. These deferred costs will be
deducted from the proceeds of the planned Placing, which occurred on the 2(nd)
of February 2022.
18 Financial risk management, objectives and policies
The Company is newly formed and has not conducted any operations and currently
generates no revenue. The Company does not have material foreign currency
transactions. Hence, currently the Company does not face foreign currency
risks nor any interest rate risks as the financial instruments of the Company
bear a fixed interest rate.
Liquidity risks
Liquidity risk is the risk that the Company will encounter difficulty in
meeting its financial obligations as they fall due. If the Placing
contemplated by the Company is completed, 100% of the gross proceeds of this
Placing will be deposited in a secured deposit account. The amount held in
the secured deposit account will only be released in connection with the
completion of the Business Combination or the Company's liquidation.
Following the completion of the Placing, the Board of Directors believes that
the funds available to the Company outside of the secured deposit account,
together with the available shareholder loan will be sufficient to pay costs
and expenses which are incurred by the Company prior to the completion of the
Business Combination.
The objective of the Sponsor Warrants issued to the Sponsor at the time of the
Placing, is to use the proceeds to pay the various costs and expenses incurred
and contracted for as disclosed in the Separate Financial Statements, except
the underwriting commission. The proceeds of the Placing of Public Shares
will not be used to pay these expenses.
The Sponsor is committing additional funds to the Company through the
Overfunding Subscription, the proceeds of which will be held in an escrow
account. The purpose of the overfunding subscription is to provide additional
cash funding into the Escrow Account, in addition to the funding from the
proceeds of the Units sold in the Placing, for the redemption of the Public
Shares by Public Shareholders ("Initial Overfunding Shares").
The Initial Overfunding Shares and Initial Overfunding Warrants are not part
of the Placing but will be part of the applications for Shares Admissions and
Warrants Admission.
To the extent that the Business Combination Deadline is extended, the Sponsor
will commit further additional funds to the Company through the subscription
of additional units as referred to in Part VIII. 4 of the Prospectus.
Capital management
The Board of Directors' policy is to maintain a strong capital base so as to
maintain investor, creditor, and market confidence and to sustain future
development of the business. In order to meet the capital management
objective described above, the Company intends to raise funds through a
Placing reserved to certain qualified investors inside and outside of the
United Kingdom, and to have the public shares and public warrants to be issued
in such Placing admitted to listing and trading on the regulated market
segment of London Stock Exchange in the near future. The above‑mentioned
financial instruments to be issued as part of this Placing will represent what
the entity will manage as capital.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a financial
loss. The Company is currently exposed to credit risk from its deposit with
banks.
19 Other operating expenses
The other operating expenses of GBP 152,560 consist of fees for accounting,
legal, and other services not related to the Placing.
20 Sept 2021
to
31 Dec 2021
GBP
Accounting, tax consulting, auditing and similar 151,407
fees.......................................................................
Notarial and similar 1,153
fees.........................................................................................................................
Other operating 152,560
expenses........................................................................................................................
20 Income Tax
20 Sept 2021
to
31 Dec 2021
GBP
Loss for the period before 152,288
tax................................................................................................................
Theoretical tax charges, applying the tax rate of (34,722)
22.8%..................................................................
Tax effect of adjustments from Luxembourg GAAP to (166,761)
IFRS........................................................
Unrecognised deferred tax 201,783
asset............................................................................................................
Income Tax ‑
Income tax
The tax rate used in reconciliation above is the Luxembourgish tax rate
(22.8%) as the Company is domiciled in the Grand Duchy of Luxembourg.
Deferred tax
Deferred tax assets have not been recognised in respect of the loss incurred
during the period ended 31 December 2021 because it is not probable that
future taxable profit will be available against which the Company can utilise
the benefits therefrom. Unused tax losses of the Company can be used within
a period of 17 years as per Luxembourg tax law.
21 Earnings /(loss) per share
Basic earnings/(loss) per share ("EPS") is calculated by dividing the
profit/(loss) for the year attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares outstanding during
the period.
Diluted EPS is calculated by dividing the profit/(loss) attributable to
ordinary equity holders of the Company by the weighted average number of
ordinary shares outstanding during the year plus the weighted average number
of ordinary shares that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares.
Currently, no other diluting instruments have been issued. Therefore, basic
EPS equals diluted EPS as at 31 December 2021.
22 Financial assets at fair value through profit or loss
On the 8th of December 2021 the company incorporated HMA1 (ESCROW) Limited,
under the Companies Act 2006 ,in the United Kingdome, being a private company,
limited by shares, with its registered office at 52 Lime Street, London,
England.
23 Deferred costs
Deferred costs of GBP 731,407 as at 31 December 2021 are composed mainly of
legal and administration costs incurred by the Company in relation to the
public offering which will be offset against the proceeds from the planned
Placing.
Other Placing related costs which have not been incurred relate to the
underwriter fees, legal fees for the underwriter and escrow, exchange,
regulatory, and listing fees. These costs once incurred will also be deducted
from the proceeds of the Placing.
24 Cash and cash equivalents
The amount of cash and cash equivalents was GBP 30,000 as at
31 December 2021.
25 Issued capital and reserves
Share capital
As at 31 December 2021, the subscribed share capital amounts to GBP 30,000
consisting of 3,750,000 shares without nominal value held by the Sponsor,
hereinafter referred to as the "Sponsor Shares". The Company's share capital
may be increased or reduced by a resolution of the general meeting of
shareholders adopted in the manner required for an amendment for the articles
of association.
On 26 January 2022, the issued capital shares was reduced from 3,750,000 to
2,875,000 through a forfeiture of 875,000 Sponsor Shares at a nil cost.
It is planned that the Sponsor Shares shall convert into Public Shares subject
to a certain schedule and trading price following the consummation of the
Business Combination. The Sponsor Shares will convert into a number of
Public Shares such that the number of Public Shares issuable to the Sponsor
upon conversion of all Sponsor Shares will be equal, in the aggregate, on an
as‑converted basis, to 20% of the total ordinary shares in issue following
the Placing. The Placing took place on 2 February 2022, refer to note 15.4 for
detailed information of the effect of the placing on the Share capital and
15.5 on the Warrants at reporting date.
Authorised capital
As at 31 December 2021, the authorized capital of the Company is set at
GBP 1,000,000 consisting of 100,000,000 shares without nominal value.
Legal reserves
The Company is required to allocate a minimum of 5% of its annual net profit
to a legal reserve, until this reserve equals 10% of the subscribed share
capital. This reserve may not be distributed.
26 Trade and other payables
31 Dec2021
GBP
Accounting, tax consulting, auditing and similar 151,135
fees.......................................................................
Deferred 731,407
costs...........................................................................................................................................
Notarial and similar 1,153
fees.........................................................................................................................
Payable to subsidiary 1
Trade and other payables 883,696
Trade and other payables are related to legal and other services received by
the Company. The carrying amounts of these approximate their fair value.
27 Related party disclosures
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in
making financial or operational decisions.
Terms and conditions of transactions with related parties
On 8 December 2021 the company incorporated HMA1 (ESCROW) LIMITED "(HMA1)"
with Company Number 13788517 respired with The Companies House United Kingdom,
with Share Capital of GBP 1. At reporting date the company has not
transferred the Share Capital to the subsidiary, the amount due is included in
trade and other payables. The Company subscribed for additional shares in HMA1
as disclosed in note 15.7.
There have been no guarantees provided or received for any related party
receivables or payables as at 31 December 2021. Please refer to note 15.4
regarding the Shareholders loan put in place subsequent to 31 December 2021.
Transactions with key management personnel
There are no advances or loans granted to members of the Board of Directors as
at 31 December 2021.
The Board of Directors consists of 6 members who did not receive any
remuneration during the period ended 31 December 2021.
The Company entered into contracts with the non‑executive directors which
will be effective from the date of the Placing. The agreed directors fees
are GBP 10,000 per annum; to be paid semi‑annually in arrears in equal
instalments after deduction of any taxes and other amounts that are required
by law. In addition to the directors fee the Company will procure that the
Sponsor transfers 25,000 Sponsor Shares in the Company held by the Sponsor to
the non‑executive directors.
28 Commitments and contingencies
In the context of the planned Placing, the Company entered into or is
contemplating to enter into respective contracts with different providers, the
total costs of which is estimated at approximately GBP 1,200,000 (excluding
underwriting commission fees and the costs recorded as deferred costs).
After the Placing, the Company expects to incur expenses as a result of being
a publicly listed company (for legal, financial reporting, accounting and
auditing compliance). The Company cannot estimate expenses incurred in
connection with researching targets, the investigation of potential target
businesses and the negotiation, drafting and execution of the transaction
documents appropriate for the Initial Business Combination, as the amounts
will depend on the specific circumstances of the Initial Business Combination.
The Company has no other commitments and contingencies as at 31 December 2021.
29 Events after statement of financial position date
No events occurred after the reporting period which requires amendment to or
disclosure in these separate financial statements, except from those disclosed
below.
29.1 Impact of the COVID-19 pandemic
As a result of the COVID‑19 pandemic business operations worldwide have been
impacted in various ways. The COVID‑19 pandemic may continue to impact the
business operations and the intended Placing and Business Combination
processes. There is uncertainty in the nature and degree of its continued
effects over time.
29.2 Underwriting agreement
The Company entered into an agreement with Citigroup Global Markets Limited
(Underwriting Agreement), by virtue of which the Company will be liable to pay
Upfront Commission Fees of 2% of the aggregate gross proceeds of the
Securities, payable at closing of the offering; and a deferred commission
equal to 3.5% of the aggregate gross proceeds of the Securities, subject to
completion of Business Combination and payable after such completion.
Commissions are not payable on Securities issued to certain Investors; subject
to a maximum allocated amount of the greater of either GBP 32.5 million or 15%
of the Offering.
29.3 Shareholders loan
On 19 January 2022, the Company entered into a loan agreement with the Sponsor
for the purpose of settling its creditors and other costs which become due in
the ordinary course of business, should the Placing for any reason not be
successful. . At reporting date no amount was drawn. The Placing took place
on 2 February 2022. The loan shall be available to the Company up until
consummation of the Business Combination or the liquidation of the Company.
29.4 Listing on London Stock Exchange
On 2 February 2022 the Company's Prospectus was approved and published on the
London Stock Exchange.
In terms of the Sponsor Private Placement Agreement; on 2 February 2022, the
Sponsor subscribed to 310,500 Overfunding shares at £10 per share, and
5,070,000 Class B Sponsor Warrants at GBP1 per warrant, raising capital in the
amount of GBP 8,175,000.
On 7 February 2022, 11,500,000 of the Company's Public Shares were admitted
to the standard listing segment of the Official List of the Financial Conduct
Authority and to trading on the London Stock Exchange's main market for listed
securities under ticker "HMA1", raising capital in the amount of GBP
115,000,000.
On 7 February 2022 Citigroup Global Markets Limited, acting as stabilising
manager, gave notice on of its non-exercise of the put option granted by the
Company.
On 8 February 2022 the Sponsor subscribed for a further 34,500 Shares cum
Rights at a price of GBP 10.00 per share, (the "Overfunding Shares
Subscription"). The non-exercise of the Put Option and the Overfunding Shares
Subscription brings the total number of Shares cum Rights in issue at
11,845,000.
The total number of voting rights in the Company following the Overfunding
Subscription is 14,720,000. This including the 2,875,000 unlisted class B
ordinary shares with no par value held by the Sponsor.
15.5 Warrants Admission to Trading on the London Stock Exchange
On 8 February 2022 the company published its notice on the stock exchange that
it intends to accelerate the proposed issue and admission of the Public
Warrants as follows:
- Warrants Ex Date
22 February 2022
- Warrants Record Date
6.00 p.m. on 23 February 2022
- Warrants Admission
Date
8.00 a.m. on 24 February 2022
On 8 February 2022, the Sponsor, in terms of the Sponsor Private Placement
Agreement; subscribed for a further 230,000 Sponsor Warrants at £1 per
warrant.
On 24 February 2022, the Company admitted 5,922,500 Public Warrants to the
standard listing segment of the Official List of the Financial Conduct
Authority and to trading on the London Stock Exchange's main market for listed
securities under ticker "HM1W".
15.6 Subscription of shares in HMA1 (Escrow) Limited
On 11 February 2022, the Company entered into a Subscription agreement with
its wholly owned subsidiary HMA1to subscribe for 11,845,000 ordinary shares at
nominal value of GBP 1 per share. The consideration was fully paid up on the
15(th) of February 2022.
15.7 Geopolitical Situation
Management considered the effects of the invasion of Ukraine by Russia and it
has no impact on the company and consequently does not affect the measurement
of companies' assets and liabilities as at 31 December 2021.
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