REG - HIRO Metaverse - Annual Financial Report
28/04/2023 18:15
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RNS Number : 9538X HIRO Metaverse Acquisitions I S.A. 28 April 2023
28 April 2023
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 2022
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 2022.
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 (mailto: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-2411 Luxembourg
R.C.S. Luxembourg: B 259488
(the "Company")
REPORT
of the Board of Directors 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 financial year from 1 January
2022 to 31 December 2022 (the "Financial Year").
We herewith submit to your meeting the Company's annual report, consisting of
the Company's Consolidated statement of comprehensive income, Consolidated
statement of financial position, Consolidated statement of changes in equity,
Consolidated statement of cash flows, and the explanatory notes and the
Company's Separate statement of comprehensive income, Separate statement of
financial position, Separate statement of changes in equity, Separate
statement of cash flows, and the explanatory notes thereto 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.
RESULTS AND DIVIDENDS
At the end of the year under review the Company recorded a loss of GBP
5,549,198.
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 Class B shares without nominal value (the "Sponsor
Shares").
On 2 February 2022, the 3,750,000 Sponsor Shares were converted into 2,875,000
Sponsor Shares.
On 2 February 2022, the share capital of the Company was increased from GBP
30,000 to GBP 33,229.20 through the issuance of 310,500 Non-Redeemable Class A
Shares.
On 8 February 2022, the share capital of the Company was increased from GBP
33,229.20 to GBP 36,817 through the issuance of another 34,500 Non-Redeemable
Class A Shares.
Redeemable Class A Shares
The Company's Public Shares were admitted to trading on the Main Market of the
London Stock Exchange on 8 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.
Because these Class A shares are redeemable under certain conditions, the
Board of Directors concluded that these Redeemable Class A Shares did not meet
the definition of an equity instrument as per IAS 32. Hence the Redeemable
Class A Shares are considered as debt instruments from an accounting
standpoint (see Note 11 and 12 of the Consolidated financial statements).
RELATED PARTY TRANSACTIONS
Information relating to related parties and related party transactions are
disclosed in the notes to the Consolidated and Separate financial statements.
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 years ended 31 December 2022 and 2021, 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 Luke Alvarez Director 28 October 2021 n/a
Ms Cherry Freeman Director 28 October 2021 n/a
Sir Ian Livingstone Director 10 December 2021 n/a
Mr Jurgen Post Independent Non- Executive Director 7 February 2022 n/a
Ms Emily Greer Independent Non- Executive Director 7 February 2022 n/a
Mr Adela Pinkster Independent Non- Executive Director 7 February 2022 n/a
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 is 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 complies with the U.K. Corporate Governance Code with
the exception of the following:
· 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 does not intend having 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 is be responsible for
taking all proper and reasonable steps to ensure compliance with such share
dealing code by the Directors.
FINANCIAL INSTRUMENTS
The Company's financial assets include equity instruments, cash and cash
equivalents and trade and other receivables. Further details can be
obtained from the Notes to the financial statements.
Equity instruments are classified as investments in subsidiaries. Subsidiaries
are all entities over which the Company has control. The Company controls an
entity where the Company is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred or
acquired by the Company. They are deconsolidated from the date that control
ceases. Disclosures of acquisitions and disposal of shares in affiliated
undertakings are contained in the notes to the financial statements.
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 an entity formed in 2021 with no operating history and
the Company's only income is the interest income on the bank account. The
Company has not generated and currently does not generate any other 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, the
Board intends for the Company to continue as a privately held company and has
no intention to commence liquidation or winding up of the Company in the next
12 months.
· 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.
· 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 at 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.
As at the date of this report, the Company is not in sufficiently advanced
discussions with any potential targets to enable the Public Shareholders to
consider and vote on a potential Initial Business Combination. The Company's
initial deadline to complete an Initial Business Combination is 7 May 2023 and
the Articles permit an initial three-month extension period, followed by a
further three-month extension period, in each case with the approval of a
simple majority of the holders of all Ordinary Shares. However, the Board of
Directors considers that these permitted extensions are unlikely to provide
sufficient time to permit the Company to evaluate target companies, to agree
terms on a potential business combination, to seek agreement on financing
requirements, and to implement the necessary steps for readmission under the
UK Listing Rules in order to complete an Initial Business Combination.
Accordingly, on 4 April 2023 the Company gave notice convening an EGM to be
held on 5 May 2023 to consider, and if thought fit, to approve the extension
of the business combination deadline to 7 February 2024 by way of an amendment
to the Articles of Incorporation.
As at the date of this report, it is therefore uncertain whether the Company
will extend its business combination deadline to 7 February 2024 and continue
to seek an Initial Business Combination, or if it will instead proceed to
redeem its Public Shareholders and cancel the listing and trading of the
Company's Public Shares and Public Warrants on the London Stock Exchange
following expiry of the initial business combination deadline of 7 May 2023.
In any event, if the current or any extended business combination deadline
expires without the Company having completed an Initial Business Combination
and the Company undertakes a redemption and delisting of its Public Shares and
Public Warrants as described above, the Board intends for the Company to
continue as a privately held company and has no intention to commence
liquidation or winding up of the Company in the next 12 months.
SUBSEQUENT EVENTS
Since 31 December 2022 the market backdrop for SPACs and public equity
offerings more generally has continued to be challenging. This climate has not
been conducive to completing an Initial Business Combination. As at the date
of this report, the Company is not in sufficiently advanced discussions with
any potential targets to enable the Public Shareholders to consider and vote
on a potential Initial Business Combination.
On 4 April 2023 the Company gave notice convening an EGM to be held on 5 May
2023 to consider, and if thought fit, to approve the extension of the business
combination deadline to 7 February 2024 by way of an amendment to the
Articles.
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.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors is responsible for preparing the Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Board of Directors to prepare financial statements
for each financial year. The Board of Directors has prepared the Company
financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
Under company law the Board of Directors 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 of Directors
is required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· 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 of Directors 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 International Financial Reporting Standards
(IFRSs) as adopted by the European Union. 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 of Directors 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 of Directors, 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 of Directors 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 of Directors is responsible for determining the nature and extent of
the significant risks it is willing to take in achieving its strategic
objectives. The Board of Directors maintains sound risk management and
internal control systems. The Board of Directors 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 of Directors 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 separate and consolidated financial
statements and to grant discharge to the members of the Board of Directors and
the statutory auditor for their mandate during the financial year 2022.
Luxembourg, 28 April 2023
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
ANNEXURE A
HIRO METAVERSE ACQUISITIONS I S.A.
Société Anonyme
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022
Registered office: 17, Boulevard F.W. Raiffeisen
L-2411 Luxembourg
R.C.S. Luxembourg: B259488
HIRO METAVERSE ACQUISITIONS I S.A.
Consolidated financial statements for the year ended 31 December 2022
Index to the consolidated financial statements Page(s)
Independent auditor's report 2 -6
Consolidated statement of comprehensive income 7
Consolidated statement of financial position 8
Consolidated statement of changes in equity 9
Consolidated statement of cash flows 10
Notes to the consolidated financial statements 11 - 32
To the Shareholders of
HIRO METAVERSE ACQUISITIONS I S.A.
17, Boulevard Raiffeisen
L-2411 Luxembourg
R.C.S. Luxembourg B 259.488
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 2022, and the
consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year ended
31 December 2022, 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 2022, and of its consolidated financial performance and its
consolidated cash flows for the period ended 31 December 2022 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 "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 2022.
Emphasis of Matter
We draw attention to Note 17 of the consolidated financial statements, which
describes significant events that occurred after the reporting period and
their potential effects.
Other information
The Board of Directors is responsible for the other information. The other
information comprises the information stated in the Consolidated Management
Report and 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 Director's 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 2022 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 2022, 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 or equivalent.
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, 28 April 2023
For Mazars Luxembourg, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Fabien Delante
Réviseur d'entreprises agréé
1 Jan 2022 20 Sept 2021
to to
Notes 31 Dec 2022 31 Dec 2021
GBP GBP
Other operating expenses 5 (745,626) (152,560)
Taxes, duties and similar expenses (1,393) -
Operating loss (747,019) (152,560)
Finance income
Interest income from financial assets held for cash management purposes 1,586,260 -
Finance income 1,586,260 -
Finance costs
Amortisation listing costs 12.1 (2,327,893) -
Fair value gain/(loss) on class A warrants 12.2 (473,800) -
Fair value gain/(loss) on class B warrants 12.3 (3,286,000) -
Foreign currency exchange gains/(losses) (5,929) 272
Finance costs (6,093,622) 272
Loss before income tax (5,254,381) (152,288)
Income tax 6 (294,817) -
Loss for the period (5,549,198) (152,288)
Other comprehensive income - -
Total comprehensive loss for the period, net of tax (5,549,198) (152,288)
Earnings/(loss) per share attributable to equity holders Net earnings per 7 (0.41) (0.04)
share - basic and diluted
The accompanying notes form an integral part of these consolidated financial
statements
Notes 31 Dec 2022 31 Dec 2021
GBP GBP
Current assets
Deferred costs 8 - 731,407
Restricted cash 9 120,008,667 -
Cash and cash equivalents 9 1,181,344 30,000
Prepayments 10 93,654 -
Current assets 121,283,665 761,407
Total Assets 121,283,665 761,407
Equity and liabilities
Equity
Share capital 11 36,817 30,000
Share premium 11 3,173,417 -
Accumulated deficit (5,701,486) (152,288)
(2,491,252) (122,288)
Liabilities
Non-current liabilities:
Class A warrants at fair value 12.2 6,396,300 -
Class B warrants at fair value 12.3 8,586,000 -
Total non-current liabilities 14,982,300 -
Current liabilities
Redeemable class A shares 108,335,684 - 12.1 108,335,684 -
Trade and other payables 13 162,116 883,695
Taxes payable 14 294,817 -
Total current liabilities 108,792,617 883,695
Total liabilities 123,774,917 883,695
Total equity and liabilities 121,283,665 761,407
The accompanying notes form an integral part of these consolidated financial
statements
Share
premium
Notes Share and similar Accumulated Total
capital premiums deficit Equity
GBP GBP GBP GBP
Balance at 1 January 2022 30,000 - (152,288) (122,288)
Issuance of capital 11
Share capital increase 2 Feb 2022
Issuance of 310,500 3,229 3,004,505 - 3,007,734
non- redeemable Class A shares
Reclassification of non-redeemable Class A shares from equity to liability - (155,250) - (155,250)
(IAS 32)
Issuance of 10,350,000 107,640 103,392,360 - 103,500,000
redeemable Class A shares
Issuance of 1,150,000 11,960 11,488,040 - 11,500,000
redeemable Class A shares
Reclassification of redeemable Class A shares from equity to liability (IAS (119,600) (114,880,400) - (115,000,000)
32)
Share capital increase 8 Feb 2022 11
Issuance of 34,500 3,588 341,412 - 345,000
non-redeemable Class A shares
Reclassification of non-redeemable Class A shares from equity to liability - (17,250) - (17,250)
(IAS 32)
Loss for the period - - (5,549,198) (5,549,198)
Other comprehensive income - - - -
Balance at 31 December 2022 36,817 3,173,417 (5,701,486) (2,491,252)
Balance at 20 September 2021
Issuance of incorporation capital 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.
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Cash flow from operating activities
Loss before income tax (5,549,198) (152,288)
Adjustments for:
Finance income (1,586,260) -
Finance costs 6,087,693 -
Foreign currency exchange gains/(losses) 5,929 -
Net cash from operating activities before income tax (1,041,836) (152,288)
Changes in working capital:
Decrease/(increase) in deferred costs 731,407 (731,407)
(Increase) in prepayments (93,654) -
(Decrease)/increase in trade and other payables (721,579) 883,695
Increase in taxes payable 294,817 -
Net cash flows from operating activities (830,845) -
Cash flow from financing activities
Proceeds from issue of share capital - 30,000
Payment of cost in relation to capitalisation (3,339,475) -
Proceeds from issue of redeemable shares 115,000,000 -
Proceeds from issue of non-redeemable shares 3,450,000 -
Proceeds from issue of sponsor warrants 5,300,000 -
Interest received 1,586,260 -
Foreign currency exchange gains/(losses) (5,929) -
Net cash flows from financing activities 121,990,856 30,000
-
Net change in cash and cash equivalents 121,160,011 -
Increase in restricted cash (120,008,667) -
Cash and cash equivalents, beginning 30,000 -
Cash and cash equivalents at end of the period 1,181,344 30,000
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 a public limited liability Company
incorporated in Luxembourg (Société Anonyme or "S.A.") under the laws of the
Grand Duchy of Luxembourg for an unlimited period. The registered office of
the Company is located at 17, Boulevard Raiffeisen, L-2411, Luxembourg, Grand
Duchy of Luxembourg. 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 Kingdom, being
a private Company, limited by shares, with its registered office at 52 Lime
Street, London, England.
The consolidated financial statements for the year ended 31 December 2022
covers the Company and its subsidiary (collectively "the Group").
From a legal standpoint, the issued share capital of the Company as of 31
December 2022 amounts to GBP 156,417.20 represented by 11,500,000 Redeemable
Class A Shares, 345,000 Non-Redeemable Class A Shares and 2,875,000 Class B
Shares (the "Sponsor Shares"), all without nominal value. The total number of
voting rights in the Company is 14,720,000.
Because they are redeemable under certain conditions, the 11,500,000
Redeemable Class A Shares do not meet the definition of an equity instrument
as per IAS 32. Hence these Redeemable Class A Shares are considered as debt
instruments from an accounting standpoint, resulting in a share capital of
GBP 36,817 in the financial statements. Detailed movements for the year are
disclosed in note 11. The 11,500,000 Redeemable Class A Shares are the Public
Shares issued by the Company in the Placing; being the Shares "cum Rights," as
contemplated in the Prospectus. The Sponsor (Hiro Sponsor I LLP), subscribed
for 34,500 of these Public Shares; being the Overfunding Shares and Additional
Overfunding Shares. The proceeds of the Placing and of the Sponsor's
overfunding subscriptions are held in an Escrow account and are available for
the redemption of Public Shares held by Public Shareholders. The Sponsor
waived any rights attached to the Public Shares held by the Sponsor.
Consequently, being non-redeemable, the Public shares held by the Sponsor are
classified as equity.
The Company is managed by its Board of Directors composed of Luke Alvarez,
Cherry Freeman, Ian Livingstone as Executive Directors and Jürgen Post, Emily
Greer, and Addie Pinkster as Non-Executive Directors (the "Board of
Directors").
The registered office of the Company is located at 17, Boulevard Raiffeisen,
L-2411, Luxembourg. The financial year of the Company starts on 1 January and
ends on 31 December; except for he first financial year which starts on 20
September 2021 (date of incorporation) and ends on 31 December 2021.
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, 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").
The Company is seeking a suitable target for the Business Combination with a
focus on targets operating in the sectors of Video Games, Esports, Interactive
Streaming, GenZ Social Networks, Connected Fitness & Wellness and
Metaverse Technologies. The Company has 15 months from the date of the
admission to trading; being 7 February 2022; 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 issued during the initial
offering (the "Placing") will be redeemed first and then the Company will be
liquidated and all remaining assets will be distributed to remaining
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 started on 20
September 2021 (date of incorporation) and ended on 31 December 2021.
The Group's consolidated financial statements for the period ended 31 December
2021 have been delivered to the Luxembourg Trade and Companies Register
(Registre de Commerce et des Société, in abbreviated "RSC"). The Group's
Independent Auditor's report on those accounts were unqualified.
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 year ended 31 December 2022. 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 1 January 2022 to 31 December 2022 and were
authorised for issue in accordance with a resolution of the Board of Directors
28 April 2023.
These consolidated financial statements have been prepared in Sterling (GBP)
unless stated otherwise.
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
2.2 Summary of significant accounting policies
The consolidated financial statements have been prepared in accordance with
the accounting policies adopted in the Group's most recent annual financial
statements for the period ended 31 December 2022.
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://data.europa.eu/eli/reg/2008/1126/2023-01-01
(http://data.europa.eu/eli/reg/2008/1126/2023-01-01)
(a) New standards, amendments and interpretations that were issued but not
yet effective as at
31 December 2022 and that are most relevant to the Company - not yet endorsed
by the EU:
· 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.
(b) New standards, amendments and interpretations that were issued but not
yet effective as at
31 December 2022 and that are most relevant to the Company - endorsed by the
EU:
· 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.
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 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 currency 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 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 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.
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 measurement of financial assets
All financial assets are initially measured at fair value plus, in the case of
financial assets that are not measured at fair value through profit and loss,
transaction costs.
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).
Financial assets measured at amortised cost: This is the category most
relevant to the Group. A debt instrument is measured at amortised cost if it
is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Financial assets at amortised
cost are subsequently measured using the effective interest rate (EIR) method
and are subject to impairment. Gains and losses are recognised in profit and
loss when the asset is derecognised, modified or impaired.
The Group includes in this category cash and cash equivalents and cash in
escrow ("restricted cash").
In the period presented the Group includes Derivative financial instruments as
financial assets categorised as FVTPL.
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 (when applicable)
which is presented within other expenses.
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 include financial assets at amortised
cost, cash and cash equivalent and restricted cash as well as debt instruments
at fair value through other comprehensive income and trade receivable when
applicable.
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
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, or financial liabilities at
amortised cost.
Financial liabilities are initially measured at fair value, adjusted for
transaction costs where applicable except for those financial liabilities that
are measured at fair value through profit or loss.
Financial liabilities recognized at amortised cost are subsequently measured,
using the effective interest method. Gains and losses are recognised in profit
or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by considering any discount or premium on
acquisition and incremental fees or costs. The EIR amortisation is included as
finance costs in the statement of profit or loss.
The Group includes in this category Redeemable Class A Shares and trade and
other payables, while the Public and Sponsor warrants are classified as
financial liabilities at fair value through profit and loss.
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 restricted cash
Cash 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.
Restricted cash included in the statement of financial position comprise of
cash at bank in Escrow accounts under the terms of an Escrow Agreement and in
accordance with the requirements set out in Listing Rule 5.6.18A(2), 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 consolidated 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, maximizing
the use of relevant observable inputs and minimizing the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in
the 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.
For the purpose of fair value disclosures, the Group has determined classes of
assets and liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy, as
explained above.
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
a present obligation is not probable. Such situations are disclosed as
contingent liabilities unless the outflow of resources is remote.
2.2.8 Trade payables, other payables and accrued expenses
Trade payables, other payables and accrued expenses are obligations to pay for
services that have been acquired in the ordinary course of business. 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.
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 tax 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
amount 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. Deferred tax assets are tested for impairment on the basis of a tax
planning derived from management business plans.
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.
2.2.10 Current versus non-current classification
The Group presents assets and liabilities in the 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.
2.2.12 Share-based payments
The Board is currently assessing whether certain class B shares and class B
warrants issued to the Sponsor of the Company are to be considered as falling
in the scope of IFRS 2. The Board will notably adopt its position based on
market discussions and/or positions adopted by market players, supervisory
authorities and/or standard setters.
In any case, the class B shares and class B warrants do not carry a specified
service period, but would be forfeited or otherwise expire worthless if a
business combination is not consummated. Therefore, the Sponsor only derive
the value from the class B shares and class B warrants when they are converted
into class A shares upon a successful business combination. Consequently, the
grant date of these awards does not occur until the target is approved. As of
31 December 2022, irrespective of the conclusions of the ongoing assessment
carried out by the Board, no amounts would have had to be accounted for
provided that no such approval has occurred.
2.2.13 Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the
date when the grant is made using an appropriate valuation model. That cost is
recognised in as part of other operating expenses in the consolidated
statement of comprehensive income, together with a corresponding increase in
equity, over the period in which the service and, where applicable, the
performance conditions are fulfilled (the vesting period). The cumulative
expense recognised for equity-settled transactions at each reporting date
until the vesting date reflects the extent to which the vesting period has
expired and the Group's best estimate of the number of equity instruments that
will ultimately vest. The expense or credit in the consolidated statement of
comprehensive income for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the Group's best estimate of the
number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are also service and/or
performance conditions.
No expense is recognised for awards that do not ultimately vest because
non-market performance and/or service conditions have not been met. Where
awards include a market or non-vesting condition, the transactions are treated
as vested irrespective of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are
satisfied.
When the terms of an equity-settled award are modified, the minimum expense
recognised is the grant date fair value of the unmodified award, provided the
original vesting terms of the award are met. An additional expense, measured
as at the date of modification, is recognised for any modification that
increases the total fair value of the share-based payment transaction, or is
otherwise beneficial to the recipient of the share-based payment. Where an
award is cancelled by the entity or by the counterparty, any remaining element
of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share
dilution in the computation of diluted earnings per share.
3. Significant accounting judgements, estimates and
assumptions
The preparation of these consolidated financial statements in accordance with
IFRS requires The Board of Directors to make judgements, estimates and
assumptions that affect the application of policies and the reported amounts
of assets and liabilities and income and expenses. The estimates and
associated assumptions are based on various factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
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 2022, the significant areas of estimates, uncertainty and
critical judgements in applying accounting policies that have the most
significant effect on the amounts recognised in these consolidated financial
statements are the following:
· Classification of Redeemable Class A Shares: The Board assessed the
classification of Redeemable Class Shares in accordance with IAS 32, Financial
Instruments: Presentation, under which the Redeemable Class A Shares do not
meet the criteria for equity treatment and must be recorded as liabilities.
The Redeemable Class A Shares features certain redemption rights that are
considered to be outside of the Company's control and subject to occurrence of
uncertain future events. Accordingly, the Company classifies the Redeemable
Class A Shares as financial liabilities at amortised cost in accordance with
IFRS 9. The transaction costs directly attributable to issuance of the
Redeemable Class A shares are deducted against the initial fair value.
· Classification of Non- Redeemable Class A Shares: The Sponsor and the
Company's directors have entered into a Lock-up and Waiver Agreement with the
Company, pursuant to which they have waived their rights to liquidating
distributions from the Escrow Account with respect to any Sponsor Shares,
Sponsor Warrants, Overfunding Shares, Overfunding Warrants and any Public
Shares acquired upon conversion or exercise thereof held by them if the
Company fails to complete the Initial Business Combination by the Business
Combination Deadline. Consequently, the proceeds of the Sponsor shares and
overfunding shares are not redeemable. Accordingly, the Company classifies
these Non-Redeemable Class A Shares as Equity, and the proceeds from the
subscription of such Non-Redeemable Class A Shares are classified to equity
under share capital and share premium in the consolidated statement of
financial position, in line with the initial allocation of the subscription
price, the surplus being considered as a capital contribution (share premium).
· Classification and measurement of Warrants: The Board assessed the
classification of warrants in accordance with IAS 32 under which the warrants
do not meet the criteria for equity treatment and must be recorded as
derivatives. Accordingly, the Company classifies the Class A warrants and
Class B warrants as liabilities at fair value and adjust them to fair value at
each reporting period. This liability is subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized
in the consolidated statement of comprehensive income. The fair value of Class
A and B warrants is determined by applying the average product of the Binomial
Tree (BOPM) and Monte Carlo valuations methods.
Going Concern
As at the date of these Consolidated financial statements, the Company is not
in sufficiently advanced discussions with any potential targets to enable the
Public Shareholders to consider and vote on a potential Initial Business
Combination. The Company's initial deadline to complete an Initial Business
Combination is 7 May 2023 and the Articles permit an initial three-month
extension period, followed by a further three-month extension period, in each
case with the approval of a simple majority of the holders of all Ordinary
Shares. However, the Board considers that these permitted extensions are
unlikely to provide sufficient time to permit the Company to evaluate target
companies, to agree terms on a potential business combination, to seek
agreement on financing requirements, and to implement the necessary steps for
readmission under the UK Listing Rules in order to complete an Initial
Business Combination. Accordingly, on 4 April 2023 the Company gave notice
convening an EGM to be held on 5 May 2023 to consider, and if thought fit, to
approve the extension of the business combination deadline to 7 February 2024
by way of an amendment to the Articles.
As at the date of Consolidated financial statements, it is therefore uncertain
whether the Company will extend its business combination deadline to 7
February 2024 and continue to seek an Initial Business Combination, or if it
will instead proceed to redeem its Public Shareholders and cancel the listing
and trading of the Company's Public Shares and Public Warrants on the London
Stock Exchange following expiry of the initial business combination deadline
of 7 May 2023. In any event, if the current or any extended business
combination deadline expires without the Company having completed an Initial
Business Combination and the Company undertakes a redemption and delisting of
its Public Shares and Public Warrants as described above, the Board intends
for the Company to continue as a privately held company and has no intention
to commence liquidation or winding up of the Company in the next 12 months.
The Board, having considered the financial position of the Group 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.
In particular, the Board reviewed the Group's committed expenses for the
period which leaves a significant cash buffer in excess of GBP 1,1million. As
these committed expenses are in line with signed engagement letters or
agreements, management takes comfort that these expenses can be reliably
measured and factored into their budgeting.
In addition, the Board has noted that the Group's policy is that no dividend
will be declared until after a successful Business Combination to ensure that
capital is maintained in the period prior to the Business Combination.
As at 31 December 2022, other than the effects of the COVID‑19 pandemic and
the war in Ukraine, which have been considered by the directors, there were no
other significant areas of estimation, uncertainty and critical judgements
which were applied.
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. The Placing was completed on 7
February 2022. 100% of the gross proceeds of this Placing were deposited in an
escrow account (the "Escrow Account"). The amount held in the Escrow Account
will only be released in connection with the completion of the Business
Combination or the Company's liquidation. The Board of Directors believes that
the funds available to the Group outside of the escrow 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, was to use the proceeds to pay the various costs and expenses
incurred and contracted for as disclosed in the consolidated financial
statements for the 12 months ended 31 December 2022, except the underwriting
commission. The proceeds from the Placing of Public Shares were not to be used
to pay these expenses.
The Sponsor has committed additional funds to the Company through the
Overfunding Subscription, the proceeds of which is held in the 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 were not part
of the Placing but were part of the applications for Shares Admissions and
Warrants Admission which took place on 24 February 2022.
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.
The following table illustrates the Group's expected liquidity of assets held:
Less than 1-12
1 month months Total
GBP GBP GBP
At 31 December 2022
Total assets 1,181,344 120,102,321 121,283,665
At 31 December 2021
Total assets 30,000 731,407 761,407
The table below analyses the Group's financial liabilities into relevant
maturity based on the remaining period at the statement of financial position
date to the contractual maturity date. The amounts in the table are the
contractual undiscounted cash flows.
Between
Less than 1-5 More than
1 year years 5 years Total
GBP GBP GBP GBP
At 31 December 2022
Trade and other payables 162,116 - - 162,116
Taxes payable 294,817 - - 294,817
Redeemable class A shares 108,335,684 - - 108,335,684
Class A warrants at fair value - 6,396,300 - 6,396,300
Class B warrants at fair value - 8,586,000 - 8,586,000
Total liabilities 108,792,617 14,982,300 - 123,774,917
At 31 December 2021
Trade and other payables 883,695 - - 883,695
Total liabilities 883,695 - - 883,695
Capital management
As at 31 December 2022, the Group has a negative equity of GBP 2,491,252.
However, the Board of Directors believes that the funds available to the Group
outside of the Escrow Account are sufficient to pay costs and expenses
incurred by the Company prior to the completion of the Initial Business
Combination. The Group has non-current liabilities which do not impose any
liquidity issues to the Group. The Class A Warrants designated as "Initial
Overfunding Warrants" in the Prospectus and the Class B Warrants designated as
the "Sponsor Warrants" in the Prospectus, which together represent a liability
of GBP 8,586,000 as at 31 December 2022, have no redemption rights or
liquidation distribution rights and will expire worthless in case of
liquidation. Furthermore, the Public Warrants, which represent a liability of
GBP 6,396,300 as at 31 December 2022, are redeemable at the option of the
Company.
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 deposits with
banks. The Group has placed its cash with a prime financial institution with a
credit rating of A1, with a stable outlook, by the rating agency Moody's.
The Group's maximum exposure to credit risk is detailed in the table below:
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Restricted cash 120,008,667 -
Cash and cash equivalents 1,181,344 30,000
Prepayments 93,654 -
121,283,665 30,000
5. Other operating expenses
The other operating expenses of GBP 745,626 (2021: GBP 152,560) consist of
fees for accounting, legal, and other services not related to the placing.
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Accounting, tax consulting, auditing and similar fees 249,471 151,407
Bank charges and commissions 2,500 -
Director's fees 27,348 -
Legal, litigation and similar fees 72,575 -
Notarial and similar fees 9,532 1,153
Other professional fees 110,706 -
Contributions to professional associations 3,892 -
Third-party insurance 269,602 -
745,626 152,560
The total audit fees paid breaks down as follows:
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Audit fees 93,309 98,280
Audit-related fees - 122,850
Total 93,309 221,130
6. Income Tax
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Loss for the period before tax (5,254,381) (152,288)
Theoretical tax charges applying tax rate 24.94% (2021: 22.8%) (1,310,443) (34,722)
Reconciling items:
Non deductible expenses:
Amortisation- Redeemable Public Shares placing costs 580,577 -
Fair value adjustments- Public Warrants 118,166 -
Fair value adjustments- Sponsor Warrants 819,528 -
Other:
Unrecognised deferred tax assets on tax losses 179,158 34,722
Effect of different tax rates in other countries (92,169) -
294,817 -
Deferred tax
Deferred tax assets have not been recognised in respect of the loss incurred
during the period ended 31 December 2022 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 period 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 diluting instruments are exercisable. Therefore, basic EPS
equals diluted EPS as at 31 December 2022.
31 Dec 2022 31 Dec 2021
GBP GBP
Loss for the year/period (5,549,198) (152,288)
Weighted average number of ordinary shares 13,552,384 3,750,000
Basic and diluted EPS (0.41) (0.04)
8. Deferred costs
As at 31 December 2022 there are no deferred costs. As at 31 December 2021
Deferred cost of GBP 731,407 comprised of legal costs incurred by the Company
in relation to the public offering which was offset against the Sponsor
Warrants after the Placing during the year ended 31 December 2022.
9. Cash and cash equivalents
31 Dec 2022 31 Dec 2021
GBP GBP
Restricted cash 120,008,667 -
Cash and cash equivalents 1,181,344 30,000
121,190,011 30,000
Pursuant to the terms of the Escrow Agreement and in accordance with the
requirements set out in Listing Rule 5.6.18A(2), the Company may only direct
the release of cash held in escrow ("restricted cash") upon the occurrence of
a payment event, being any of:
· redemption by any holder of Public Shares in connection with the
completion of an Initial Business Combination (which has been approved by the
Board of Directors and the Required Majority at the General Meeting, in each
case in accordance with the requirements of the Articles of Association);
· the redemption of any Public Shares properly submitted in connection
with a Shareholder vote to amend the Articles of Association (A) to modify the
substance or timing of the Company's obligation to allow redemption in
connection with the Initial Business Combination or to redeem 100% of the
Public Shares if the Company does not complete the Initial Business
Combination by the Business Combination Deadline or (B) with respect to any
other material provisions relating to Shareholders' rights or pre-Initial
Business Combination activity;
· the passing of the Business Combination Deadline without the Company
completing an Initial Business Combination;
· approval by the Board of the Initial Business Combination, and the
Required Majority adopting a resolution to approve the Initial Business
Combination prior to the Business Combination Deadline, in each case in
accordance with the requirements of the Articles of Incorporation;
· the winding-up or liquidation of the Company; or income tax on
interest earned (if any) on the funds in escrow becoming payable by the
Company.
10. Prepayments
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Prepaid FCA fees 5,756 -
Prepaid D&O insurance 87,898 -
93,654 -
11. Issued capital and reserves
As at 31 December 2021, the subscribed share capital amounted to GBP 30,000
consisting of 3,750,000 Class B ordinary shares with no par 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 of the articles
of association.
On 2 February 2022, the existing 3,750,000 Sponsor Shares were converted into
2,875,000 Sponsor Shares representing the entire issued share capital of GBP
30,000.
It is planned that these 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.
On 2 February 2022 the Company's Prospectus was approved and published on the
London Stock Exchange.
On 2 February 2022, the capital of the Company was increased by the issuance
of 10,350,000 Redeemable Class A Shares (the "Public Shares"), each share
being issued in the form of a unit consisting of one Public Share with the
right to receive one half of a Public Warrant. These Public Shares have been
fully paid up by a contribution in cash of GBP 103,500,000.
On the same day, the capital of the Company was increased by the issuance of
another 1,150,000 Redeemable Class A Shares (the "Option Shares") through a
second Capital Increase. These Option Shares have been fully paid up by a
contribution in cash of GBP 11,960. A complementary amount of GBP 11,488,040
(GBP 9.9896 per Option Share) was allocated to account 115 of the Company and
was intended to be paid on the option closing period.
Because they are redeemable under certain conditions, the 11,500,000
Redeemable Class A Shares do not meet the definition of an equity instrument
as per IAS 32. Hence these Redeemable Class A Shares are considered as debt
instruments from an accounting standpoint.
On 2 February 2022, the Sponsor subscribed to 310,500 units at a price of
GBP 10 per unit, each unit consisting of one Non-Redeemable Class A Share cum
right to receive one half Public Warrant. Being non-redeemable, these shares
qualify as equity instruments under IAS 32. Hence they resulted in an increase
of the share capital from GBP 30,000 to GBP 33,229.20, the remaining of the
subscription price being allotted to the share premium account.
On 7 February 2022, the 11,500,000 Redeemable Class A 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".
On 7 February 2022 Citigroup Global Markets Limited, acting as Stabilisation
Manager, gave notice of the non-exercise by it of the put option granted by
the Company to the Stabilisation Manager (the "Put Option"), as no
stabilisation was undertaken.
On 7 February 2022, further to the non-exercise of the Put Option, the Sponsor
subscribed to another 34,500 units at a price of GBP 10 per unit, each unit
consisting of one Non-Redeemable Class A Share cum right to receive one half
Public Warrant, hence resulting in an increase of the share capital on 8
February 2022 from GBP 33,229.20 to GBP 36,817, the remaining of the
subscription price being allotted to the share premium account.
The non-exercise of the Put Option and the Overfunding Shares Subscription
brought the total number of Class A Shares to 11,845,000, of which 11,500,000
Redeemable Class A Shares and 345,000 Non-Redeemable Class A Shares.
The Company initially recognised the units subscribed by the Sponsor as
345,000 Non- Redeemable Class A Shares at GBP 9.50 per share and GBP 1 per
full warrant. The Company initially recognised these Non-Redeemable Class A
shares at GBP 3,180,234, net of transaction costs attributable to these shares
amounting to GBP 97,266.
As at 31 December 2022, the issued share capital of the Company amounts to GBP
156,417.20 from a legal standpoint, represented by eleven million eight
hundred 11,845,000 Public Shares without nominal value and 2,875,000 Sponsor
Shares without nominal value. The total number of voting rights in the Company
is 14,720,000.
From an accounting standpoint, considering that the Redeemable Class A Shares
do not meet the definition of an equity instrument as per IAS 32, they are
classified as debt instruments in the consolidated financial statements.
Therefore, the share capital in the consolidated financial statements is only
comprised of the Class B Shares, also referred to as the "Sponsor Shares", and
the Non-Redeemable Class A Shares, for a total amount of GBP 36,817 as at 31
December 2022, and a share premium of GBP 3,173,417 in the share premium
account.
Authorised capital
On 2 February 2022, the Board of Directors approved the increase of the
authorised capital of the Company from GBP 1,000,000 (consisting of
1,000,000,000 Public Shares) to GBP 1,122,829.20 (consisting of 1,011,810,500
Public Shares), and authorised the Board of Directors of the Company, to
issue Public Shares, to grant options or warrants to subscribe for Public
Shares and to issue any other instruments giving access to such shares within
the limits of the authorised capital to such persons and on such terms as they
shall see fit and specifically to proceed with the issue of up to one billion
and eleven million eight hundred and ten thousand five hundred (1,011,810,500)
Public Shares without nominal value and with removal or limitation of the
preferential right to subscribe to the Public Shares, as applicable, issued
for the existing shareholders of the Company.
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.
12. Non-current liabilities
12.1 Redeemable Class A ordinary shares without nominal value
As referred to in note 11, the Company issued 11,500,000 Redeemable Class A
Shares and allocated GBP 9.50 of the proceed per Units to the share price and
GBP 1 to each full warrant. The Company initially recognised the redeemable
Class A shares at amortised cost valued at GBP 106,007,791, net of transaction
costs attributable to these shares amounting to GBP 3,242,209.
Transaction costs are incremental costs that are directly attributable to the
issuance of the Class A shares and its subsequent listing on the London Stock
Exchange were deducted from its initial cost. The transaction costs include
Listing Fees, legal fees, audit fees, accounting and administration fees,
agency fees and FCA fees.
As at 31 December 2022, the amortized cost of the redeemable Class A shares
amounts to GBP 108,335,684 after amortisation of GBP 2,327,893 calculated
using the EIR method. This amortization is presented as part of finance costs
in the statement of comprehensive income. The fair value of redeemable Class A
shares is GBP 115,287,500 based on its quoted price (level 1) as of 31
December 2022.
Redemption Rights: The Company will provide its Class A Public Shareholders
with the opportunity to redeem all or a portion of their Public Shares,
exercisable prior to the completion of the Initial Business Combination
irrespective of whether and how they vote at the General Meeting convened to
approve the Initial Business Combination. Public Shareholders seeking
redemption of their Public Shares must submit a valid request for redemption
to the Company in accordance with the terms to be set out in the circular in
relation to the shareholder vote on the Initial Business Combination at the
General Meeting, which will be published by the Company following the approval
of the Initial Business Combination by the Board of the Company.
In terms of the Waiver and Lock Up Deed entered into by the Sponsor; each
Insider and the Company; the Sponsor and each Insider agreed to not propose
any amendment to the Company's amended and restated memorandum and articles of
association: (a) to modify the substance or timing of the Company's obligation
to allow redemptions in connection with the Business Combination; (b) to
modify the substance or timing of the Company's obligation to redeem 100% of
the Public Shares if the Company does not complete a Business Combination by
the Business Combination Deadline; or (c) with respect to any other material
provisions relating to shareholders' rights or pre-Business Combination
activity, in each case, unless the Company provides its Public Shareholders
with the opportunity to redeem their Public Shares upon approval of any such
amendment at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Escrow Account, including interest earned on the funds
held in the Escrow Account and not previously released to the Company to pay
its taxes, divided by the number of then issued and outstanding Public Shares.
12.2 Public Warrants
On 24 February 2022, the Company admitted 5,922,500 Class A warrants (the
"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".
The Public Warrants will be exercisable during the "Exercise Period", which
shall be the period beginning 30 days after the date on which the Initial
Business Combination is completed and ending at the close of trading on the
main market for listed securities of the London Stock Exchange on the first
Business Day after the fifth anniversary of the Business Combination
Completion Date provided that the Exercise Period shall end earlier (i) upon
redemption of the Public Warrants in accordance with their terms, (ii) if the
Company fails to complete an Initial Business Combination by the Business
Combination Deadline, (iii) or upon any liquidation of the Company. During the
Exercise Period, the Group may, at its sole discretion, elect to redeem the
Public Warrants in whole but not in part, upon a minimum of 30 calendar days'
prior written notice of redemption at (i) a redemption price of £0.01 per
Public Warrant if the closing price of its Public Shares following the
consummation of the Initial Business Combination equals or exceeds £18.00 for
any 20 out of 30 consecutive trading days ending three Business Days before
the Company sends the notice of redemption; or (ii) a redemption price of
£0.10 per Public Warrant if the closing price of its Public Shares for any 20
out of 30 consecutive trading days following the consummation of the Initial
Business Combination, ending three Business Days before the Company sends the
notice of redemption equals or exceeds £10.00 but is below £18.00, subject
to adjustments to the number of Public Shares issuable upon exercise or the
exercise price of a Public Warrant as described in the company's Prospectus.
Public Warrant holders may exercise their Public Warrants after such
redemption notice is given until the scheduled redemption date.
There will be no redemption rights or liquidating distributions with respect
to the Public Warrants, which will expire worthless if the Company fails to
complete the Initial Business Combination by the Business Combination
Deadline.
The Public Warrants are classified as derivative liabilities and were
initially recognised at their fair value of GBP 1 per warrant at the issuance
date of 2 February 2022.
As at 31 December 2022, the fair value of Class A warrants was estimated at
GBP 6,395,300 (GBP1.08 per warrant) using the average of the Binomial Tree and
Monte Carlo valuations methods; (level 3), resulting in the recognition of
fair value loss of GBP 473,800 for the period from issue date to 31 December
2022. The significant inputs to the valuation model include the contractual
terms of the warrants (i.e. exercise price, maturity), risk-free rates of
German government bonds and volatility of the warrants by reference to average
of the volatility of traded warrants issued by similar special purpose
acquisition companies and of volatility of target peers, and discount for
probability of liquidation of the Company because not having consummated a
business combination by the stated deadline.
12.3 Sponsor Warrants
On 2 February 2022, the Sponsor agreed and subscribed for an aggregate of
5,070,000 Class B warrants (the "Sponsor Warrants") at a price of GBP 1.00 per
Sponsor Warrant (GBP 5,070,000 in the aggregate), each Sponsor Warrant
entitling the holder to purchase one Public Share at an exercise price of GBP
11.50 per Public Share. The Sponsor Warrants are not admitted to listing or
trading on any regulated market or trading platform. As at 7 February 2022,
the Put Option (as defined in Note 11) was not exercised, and as a consequence
the Sponsor subscribed for 230,000 additional Sponsor Warrants at a price of
GBP 1.00 per Sponsor Warrant (GBP 230,000 in the aggregate) to cover the
increased underwriting fees payable by the Company.
As at 31 December 2022, the fair value of Class B warrants was estimated at
GBP 8,586,300 (GBP1.62 per warrant) using the average of the Binomial Tree and
Monte Carlo valuations method; (level 3), resulting in the recognition of fair
value loss of GBP 3,286,000 for the period from issue date to 31 December
2022. The significant inputs to the valuation model include the contractual
terms of the warrants (i.e. exercise price, maturity), risk-free rates of
German government bonds and volatility of the warrants by reference to average
of the volatility of traded warrants issued by similar special purpose
acquisition companies and of volatility of target peers, and discount for
probability of liquidation of the Company because not having consummated a
business combination by the stated deadline.
13. Trade and other payables
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Accounting, tax consulting, auditing and similar fees 117,471 151,135
Directors fees 14,245 -
Deferred costs - 731,407
Notarial and similar fees - 1,153
Professional fees 30,400 -
162,116 883,695
Trade and other payables are related to legal and other services received by
the Group. The carrying amounts of these approximate their fair value.
14. Taxes payable
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Corporate Income Tax 294,817 -
Income Tax
The Parent Company is subject to normal taxation under Luxembourg tax
regulations. The tax expense for the year is calculated based on the result
according to Luxembourg General Accepted Accounting Principles (LUX GAAP).
The subsidiary is subject to normal taxation under United Kingdom tax
regulations and the tax expense for the year is calculated based on the
results of the subsidiary according to these tax regulations.
Taxes payable represent the estimated corporate income tax liability due by
the Subsidiary.
15. 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.
Transactions with key management personnel
The Board of Directors consists of 6 members.
There are no advances or loans granted to members of the Board of Directors as
at 31 December 2022.
The Company entered into contracts with the non executive directors effective
from the date of the Placing. The agreed Directors fees of GBP 10,000 per
annum are payable semi annually in arrears, in equal instalments, after
deduction of any taxes and other amounts that are required by law. Director's
fees to the value of GBP 27,348 were paid as at 31 December 2022.
16. Commitments and contingencies
The Group had the following material commitments and contingencies at 31
December 2022:
The Group entered into an agreement with Citigroup Global Markets Limited
(Underwriting Agreement), by virtue of which the Company will be liable to pay
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.
The Group entered into contracts with three non-executive directors which is
effective as from the date of the Placing. The agreed director's fees are GBP
10,000 per director, 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.
During the year, the Group entered into an agreement with a financial advisor
to source and/or evaluate potential acquisition(s) to be made by the Group.
The group is committed to pay the advisor a monthly retainer of GBP 12,000
until the engagement is terminated. In terms of the agreement; in respect of
transactions that are already in contemplation, a commission of 0.8% of the
relevant Target's enterprise value, is payable on the date of signing of a
share purchase agreement; and in respect of transactions that are introduced
to the Group by the advisor; a commission of 1.25% of the relevant Target's
enterprise value is payable on the date of signing of the relevant SPA. These
fees payable in respect of the acquisition of the Target; shall be reduced by
the amount of the Retainer received by the advisor up to the date that these
fees becomes payable. In addition, an incentive fee of GBP 500,000 is payable
at the sole discretion of the Group by way of the issuance of an equivalent
number of ordinary shares in the capital of the Group at the price at which
ordinary shares are issued by the Group pursuant to any equity raised to
support the acquisition.
The Group has no other material commitments and contingencies as at 31
December 2022.
17. Events after the reporting period
Since 31 December 2022 the market backdrop for SPACs and public equity
offerings more generally has continued to be challenging. This climate has not
been conducive to completing an Initial Business Combination. As at the date
of this Report of Directors, the Group is not in sufficiently advanced
discussions with any potential targets to enable the Public Shareholders to
consider and vote on a potential Initial Business Combination.
On 4 April 2023 the Company gave notice convening an EGM to be held on 5 May
2023 to consider, and if thought fit, to approve the extension of the business
combination deadline to 7 February 2024 by way of an amendment to the
Articles.
Should the required majority of the shareholders not vote in favour of the
amendment to the articles, the Company's business combination deadline will
expire without a business combination being completed. In accordance with
the Articles, the Company will redeem in full the Redeemable Class A ordinary
shares, the public warrants will expire worthless and the corresponding
liability will be cancelled, and the Company's Redeemable Class A ordinary
shares and Public Warrants will be de-listed from the London Stock Exchange.
The Company may also have to incur additional costs in relation to its
liquidation, which cannot be estimated accurately at this stage. However, such
costs are deemed not material in the Board's opinion.
To the Shareholders of
HIRO METAVERSE ACQUISITIONS I S.A.
Société Anonyme
R.C.S. Luxembourg B 259.488
9, rue de Bitbourg
L-1273 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 of HIRO METAVERSE
ACQUISITIONS I S.A. (the "Company"), which comprise the separate statement of
financial position as of 31 December 2022, and the separate statement of
comprehensive income, separate statement of changes in equity and separate
statement of cash flows for the year ended 31 December 2022, and the notes to
the separate financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying separate financial statements give a true and
fair view of the separate financial position of the Company as at 31 December
2022, and of its separate financial performance and its separate cash flows
for the period ended 31 December 2022 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 "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.
Emphasis of Matter
We draw attention to Note 18 of the separate financial statements, which
describes significant events that occurred after the reporting period and
their potential effects.
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 2022.
Other information
The Board of Directors is responsible for the other information. The other
information comprises the information stated in the Management Report and 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 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
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 and marking up the
separate 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 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.
• 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 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 separate financial statements have been
prepared in all material respects 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 7 July 2022 and
the duration of our uninterrupted engagement, including previous renewals and
reappointments, is 2 year.
The Director's report is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
The Corporate Governance Statement is included in the annual report. The
information required by Article 68ter paragraph (1) letters c) and d) of the
law of
19 December 2002 on the commercial and companies register and on the
accounting records and financial statements of undertakings, as amended, is
consistent with the separate 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 2022 with relevant statutory requirements set out in the ESEF
Regulation that are applicable to the separate financial statements. For the
Company it related to:
- Separate Financial Statements prepared in valid xHTML format;
- The XBRL markup of the Separate Financial Statements using the core
taxonomy and the common rules of markups specified in the ESEF Regulation.
In our opinion, the separate financial statements of the Company as of 31
December 2022 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 or equivalent.
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, 28 April 2023
For Mazars Luxembourg, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Fabien DELANTE
Réviseur d'entreprises agréé
1 Jan 2022 20 Sept 2021
to to
Notes 31 Dec 2022 31 Dec 2021
GBP GBP
Other operating expenses 5 (738,626) (152,560)
Taxes, duties and similar expenses (1,393) -
Operating loss (740,019) (152,560)
Finance income
Interest income from financial assets held for cash management purposes 27,593 -
Net gain/(loss) on financial assets and liabilities 1,256,850 -
Finance income 1,284,443 -
Finance costs
Amortisation listing costs 14.1 (2,327,893) -
Fair value gain/(loss) on class A warrants 14.2 (473,800) -
Fair value gain/(loss) on class b warrants 14.3 (3,286,000) -
Foreign currency exchange gains/(losses) (5,929) 272
Finance costs (6,093,622) 272
Loss before income tax (5,549,198) (152,288)
Income tax 6 - -
Loss for the period (5,549,198) (152,288)
Other comprehensive income - -
Total comprehensive loss for the period, net of tax (5,549,198) (152,288)
Earnings/(loss) per share attributable to equity holders 7 (0.41) (0.04)
Net earnings per share - basic and diluted
The accompanying notes form an integral part of these separate financial
statements.
Assets Notes 31 Dec 2022 31 Dec 2021
GBP GBP
Non-current assets
Financial assets at fair value through profit or loss 8 119,706,851 1
Total non-current assets 119,706,851 1
Current assets
Deferred costs 9 - 731,407
Cash and cash equivalents 10 1,181,344 30,000
Prepayments 11 93,654 -
Trade and other receivables 12 2,500 -
Current assets 1,277,498 761,407
Total Assets 120,984,349 761,408
Equity
Share capital 13 36,817 30,000
Share premium 13 3,173,417 -
Accumulated deficit (5,701,486) (152,288)
(2,491,252) (122,288)
Liabilities
Non-current liabilities:
Class A warrants at fair value 14.2 6,396,300 -
Class B warrants at fair value 14.3 8,586,000 -
Total non-current liabilities 123,317,984 -
Current liabilities
Redeemable class A shares 14.1 108,335,684 -
Trade and other payables 15 157,617 883,696
Total current liabilities 157,617 883,696
Total liabilities 123,447,878 883,696
Total equity and liabilities 120,984,349 761,408
The accompanying notes form an integral part of these separate financial
statement
Share
premium
Notes Share and similar Accumulated Total
capital premiums deficit equity
GBP GBP GBP GBP
Balance at 1 January 2022 30,000 - (152,288) (122,288)
Issuance of capital 13
Share capital increase 2 Feb 2022
Issuance of 310,500 3,229 3,004,505 - 3,007,734
non- redeemable Class A shares
Reclassification of non-redeemable Class A shares from equity to liability - (155,250) - (155,250)
(IAS 32)
Issuance of 10,350,000 107,640 103,392,360 - 103,500,000
redeemable Class A shares
Issuance of 1,150,000 11,960 11,488,040 - 11,500,000
redeemable Class A shares
Reclassification of redeemable Class A shares from equity to liability (IAS (119,600) (114,880,400) - (115,000,000)
32)
Share capital increase 8 Feb 2022 13
Issuance of 34,500 3,588 341,412 - 345,000
non-redeemable Class A shares
Reclassification of non-redeemable Class A shares from equity to liability - (17,250) - (17,250)
(IAS 32)
Loss for the period - - (5,549,198) (5,549,198)
Other comprehensive income - - - -
Balance at 31 December 2022 36,817 3,173,417 (5,701,486) (2,491,252)
Balance at 20 September 2021
Issuance of incorporation capital 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.
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Cash flow from operating activities
Loss before income tax (5,549,198) (152,288)
Adjustments for:
Finance income (1,284,443) -
Finance costs 6,087,693 -
Foreign currency exchange gains/(losses) 5,929 -
Net cash from operating activities before income tax (740,019) (152,288)
Changes in working capital:
Decrease/(increase) in deferred costs 731,407 (731,407)
(Increase) in prepayments (93,654) -
(Increase) in trade and other receivables 2,500 -
(Decrease)/increase in trade and other payables (726,079) 883,695
Net cash flows from operating activities (830,845) -
Cash flows from investing activities
Purchase of non-dealing securities (118,450,000) -
Cash flow from financing activities
Proceeds from issue of share capital - 30,000
Payment of cost in relation to capitalization (3,339,475) -
Proceeds from issue of redeemable shares 115,000,000 -
Proceeds from issue of non-redeemable shares 3,450,000 -
Proceeds from issue of sponsor warrants 5,300,000 -
Interest received 27,593 -
Foreign currency exchange gains/(losses) (5,929) -
Net cash flows from financing activities 120,432,189 -
-
Net change in cash and cash equivalents 1,151,344 30,000
Cash and cash equivalents, beginning 30,000 -
Cash and cash equivalents at end of the period 1,181,344 30,000
The accompanying notes form an integral part of these separate 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 Kingdom,
being a private Company, limited by shares, with its registered office at 52
Lime Street, London, England.
From a legal standpoint, the issued share capital of the Company as of 31
December 2022 amounts to GBP 156,417.20 represented by 11,500,000 Redeemable
Class A Shares, 345,000 Non-Redeemable Class A Shares and 2,875,000 Class B
Shares (the "Sponsor Shares"), all without nominal value. The total number of
voting rights in the Company is 14,720,000.
Because they are redeemable under certain conditions, the 11,500,000
Redeemable Class A Shares do not meet the definition of an equity instrument
as per IAS 32. Hence these Redeemable Class A Shares are considered as debt
instruments from an accounting standpoint, resulting in a share capital of
GBP 36,817 in the financial statements. Detailed movements for the year are
disclosed in note 11. The 11,500,000 Redeemable Class A Shares are the Public
Shares issued by the Company in the Placing; being the Shares "cum Rights," as
contemplated in the Prospectus. The Sponsor (Hiro Sponsor I LLP), subscribed
for 34,500 of these Public Shares; being the Overfunding Shares and Additional
Overfunding Shares. The proceeds of the Placing and of the Sponsor's
overfunding subscriptions are held in an Escrow account and are available for
the redemption of Public Shares held by Public Shareholders. The Sponsor
waived any rights attached to the Public Shares held by the Sponsor.
Consequently, being non-redeemable, the Public shares held by the Sponsor are
classified as equity.
The Company is managed by its Board of Directors composed of Luke Alvarez,
Cherry Freeman, Ian Livingstone as Executive Directors and Jürgen Post, Emily
Greer, and Addie Pinkster as Non-Executive Directors (the "Board of
Directors").
The registered office of the Company is located at 17, Boulevard Raiffeisen,
L-2411, Luxembourg. The financial year of the Company starts on 1 January and
ends on 31 December; except for he first financial year which starts on 20
September 2021 (date of incorporation) and ends on 31 December 2021.
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, 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").
The Company is seeking a suitable target for the Business Combination with a
focus on targets operating in the sectors of Video Games, Esports, Interactive
Streaming, GenZ Social Networks, Connected Fitness & Wellness and
Metaverse Technologies. The Company has 15 months from the date of the
admission to trading; being 7 February 2022; 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 issued during the initial
offering (the "Placing") will be redeemed first and then the Company will be
liquidated and all remaining assets will be distributed to remaining
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 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 started on
20 September 2021 (date of incorporation) and ended 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 year ended 31
December 2022. 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 1 January 2022 to 31 December 2022 and were
authorised for issue in accordance with a resolution of the Board of Directors
28 April 2023.
These separate financial statements have been prepared in Sterling (GBP)
unless stated otherwise.
The principal accounting policies applied in the preparation of these separate
financial statements are set out below. These policies have been consistently
applied to all the periods presented, unless otherwise stated.
2.2 Summary of significant accounting policies
The separate financial statements have been prepared in accordance with the
accounting policies adopted in the Company's most recent annual financial
statements for the period ended 31 December 2022.
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://data.europa.eu/eli/reg/2008/1126/2023-01-01
(http://data.europa.eu/eli/reg/2008/1126/2023-01-01)
(a) New standards, amendments and interpretations that were issued but not yet
effective as at 31 December 2022 and that are most relevant to the Company -
not yet endorsed by the EU:
· 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.
(b) New standards, amendments and interpretations that were issued but not yet
effective as at 31 December 2022 and that are most relevant to the Company -
endorsed by the EU:
· 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.
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.
2.2.2 Foreign currencies
Functional and presentation currency
The 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.
2.2.3 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 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.
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 measurement of financial assets
All financial assets are initially measured at fair value plus, in the case of
financial assets that are not measured at fair value through profit and loss,
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).
Financial assets measured at amortised cost: This is the category most
relevant to the Company. A debt instrument is measured at amortised cost if it
is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Financial assets at amortised
cost are subsequently measured using the effective interest rate (EIR) method
and are subject to impairment. Gains and losses are recognised in profit and
loss when the asset is derecognised, modified or impaired.
In the period presented the Company includes investments in subsidiaries in
the category FVTPL.
In the period presented the Company includes Derivative financial instruments
as financial assets categorised as FVTPL
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.
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 include financial assets at amortised
cost, cash and cash equivalent and restricted cash as well as debt instruments
at fair value through other comprehensive income and trade receivable when
applicable.
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.
Financial liabilities are initially measured at fair value, adjusted for
transaction costs where applicable except for those financial liabilities that
are measured at fair value through profit or loss.
Financial liabilities recognized at amortised cost are subsequently measured,
using the effective interest method. Gains and losses are recognised in profit
or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by considering any discount or premium on
acquisition and incremental fees or costs. The EIR amortisation is included as
finance costs in the statement of profit or loss.
The Company includes in this category Redeemable Class A Shares and trade and
other payables, while the Public and Sponsor warrants are classified as
financial liabilities at fair value through profit and loss.
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.
2.2.4 Cash and restricted cash
Cash 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.
2.2.5 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, maximizing the use of relevant observable inputs and minimizing the use
of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in
the 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.
For the purpose of fair value disclosures, the Company has determined classes
of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy, as
explained above.
2.2.6 Provisions 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.
2.2.7 Trade payables, other payables and accrued expenses
Trade payables, other payables and accrued expenses are obligations to pay for
services that have been acquired in the ordinary course of business. 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.
2.2.8 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 the 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. Deferred tax assets are tested for impairment on the basis of a tax
planning derived from management business plans.
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.
2.2.9 Current versus non-current classification
The Company presents assets and liabilities in the 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.
2.2.10 Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the
service or as incurred.
2.2.11 Share-based payments
The Board is currently assessing whether certain class B shares and class B
warrants issued to the Sponsor of the Company are to be considered as falling
in the scope of IFRS 2. The Board will notably adopt its position based on
market discussions and/or positions adopted by market players, supervisory
authorities and/or standard setters.
In any case, the class B shares and class B warrants do not carry a specified
service period, but would be forfeited or otherwise expire worthless if a
business combination is not consummated. Therefore, the Sponsor only derive
the value from the class B shares and class B warrants when they are converted
into class A shares upon a successful business combination. Consequently, the
grant date of these awards does not occur until the target is approved. As of
31 December 2022, irrespective of the conclusions of the ongoing assessment
carried out by the Board, no amounts would have had to be accounted for
provided that no such approval has occurred.
2.2.12 Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the
date when the grant is made using an appropriate valuation model. That cost is
recognised in as part of other operating expenses in the consolidated
statement of comprehensive income, together with a corresponding increase in
equity, over the period in which the service and, where applicable, the
performance conditions are fulfilled (the vesting period). The cumulative
expense recognised for equity-settled transactions at each reporting date
until the vesting date reflects the extent to which the vesting period has
expired and the Company's best estimate of the number of equity instruments
that will ultimately vest. The expense or credit in the consolidated statement
of comprehensive income for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the Company's best estimate of the
number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are also service and/or
performance conditions.
No expense is recognised for awards that do not ultimately vest because
non-market performance and/or service conditions have not been met. Where
awards include a market or non-vesting condition, the transactions are treated
as vested irrespective of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are
satisfied.
When the terms of an equity-settled award are modified, the minimum expense
recognised is the grant date fair value of the unmodified award, provided the
original vesting terms of the award are met. An additional expense, measured
as at the date of modification, is recognised for any modification that
increases the total fair value of the share-based payment transaction, or is
otherwise beneficial to the recipient of the share-based payment. Where an
award is cancelled by the entity or by the counterparty, any remaining element
of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share
dilution in the computation of diluted earnings per share
3. Significant accounting judgements, estimates and assumptions
The preparation of these separate financial statements in accordance with IFRS
requires the Board of Directors' to make judgements, estimates and assumptions
that affect the application of policies and the reported amounts of assets and
liabilities and income and expenses. The estimates and associated assumptions
are based on various factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
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 2022, the significant areas of estimates, uncertainty and
critical judgements in applying accounting policies that have the most
significant effect on the amounts recognised in these separate financial
statements are the following:
· Classification of Redeemable Class A Shares: The Board assessed the
classification of Redeemable Class Shares in accordance with IAS 32, Financial
Instruments: Presentation, under which the Redeemable Class A Shares do not
meet the criteria for equity treatment and must be recorded as liabilities.
The Redeemable Class A Shares features certain redemption rights that are
considered to be outside of the Company's control and subject to occurrence of
uncertain future events. Accordingly, the Company classifies the Redeemable
Class A Shares as financial liabilities at amortised cost in accordance with
IFRS 9. The transaction costs directly attributable to issuance of the
Redeemable Class A shares are deducted against the initial fair value.
· Classification of Non- Redeemable Class A Shares: The Sponsor and the
Company's directors have entered into a Lock-up and Waiver Agreement with the
Company, pursuant to which they have waived their rights to liquidating
distributions from the Escrow Account with respect to any Sponsor Shares,
Sponsor Warrants, Overfunding Shares, Overfunding Warrants and any Public
Shares acquired upon conversion or exercise thereof held by them if the
Company fails to complete the Initial Business Combination by the Business
Combination Deadline. Consequently, the proceeds of the Sponsor shares and
overfunding shares are not redeemable. Accordingly, the Company classifies
these Non-Redeemable Class A Shares as Equity, and the proceeds from the
subscription of such Non-Redeemable Class A Shares are classified to equity
under share capital and share premium in the consolidated statement of
financial position, in line with the initial allocation of the subscription
price, the surplus being considered as a capital contribution (share premium).
· Classification and measurement of Warrants: The Board assessed the
classification of warrants in accordance with IAS 32 under which the warrants
do not meet the criteria for equity treatment and must be recorded as
derivatives. Accordingly, the Company classifies the Class A warrants and
Class B warrants as liabilities at fair value and adjust them to fair value at
each reporting period. This liability is subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized
in the consolidated statement of comprehensive income. The fair value of Class
A and B warrants is determined by applying the average product of the Binomial
Tree (BOPM) and Monte Carlo valuations methods.
Going Concern
As at the date of these Separate financial statements, the Company is not in
sufficiently advanced discussions with any potential targets to enable the
Public Shareholders to consider and vote on a potential Initial Business
Combination. The Company's initial deadline to complete an Initial Business
Combination is 7 May 2023 and the Articles permit an initial three-month
extension period, followed by a further three-month extension period, in each
case with the approval of a simple majority of the holders of all Ordinary
Shares. However, the Board considers that these permitted extensions are
unlikely to provide sufficient time to permit the Company to evaluate target
companies, to agree terms on a potential business combination, to seek
agreement on financing requirements, and to implement the necessary steps for
readmission under the UK Listing Rules in order to complete an Initial
Business Combination. Accordingly, on 4 April 2023 the Company gave notice
convening an EGM to be held on 5 May 2023 to consider, and if thought fit, to
approve the extension of the business combination deadline to 7 February 2024
by way of an amendment to the Articles.
As at the date of Separate financial statements, it is therefore uncertain
whether the Company will extend its business combination deadline to 7
February 2024 and continue to seek an Initial Business Combination, or if it
will instead proceed to redeem its Public Shareholders and cancel the listing
and trading of the Company's Public Shares and Public Warrants on the London
Stock Exchange following expiry of the initial business combination deadline
of 7 May 2023. In any event, if the current or any extended business
combination deadline expires without the Company having completed an Initial
Business Combination and the Company undertakes a redemption and delisting of
its Public Shares and Public Warrants as described above, the Board intends
for the Company to continue as a privately held company and has no intention
to commence liquidation or winding up of the Company in the next 12 months.
The Board, 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.
In particular, the Board reviewed the Company's committed expenses for the
period which leaves a significant cash buffer in excess of GBP 1,1million. As
these committed expenses are in line with signed engagement letters or
agreements, management takes comfort that these expenses can be reliably
measured and factored into their budgeting.
In addition, the Board has noted that the Company's policy is that no dividend
will be declared until after a successful Business Combination to ensure that
capital is maintained in the period prior to the Business Combination.
As at 31 Dec 2022, other than the effects of the COVID‑19 pandemic and the
war in Ukraine, which have been considered by the directors, there were no
other significant areas of estimation, uncertainty and critical judgements
which were applied.
4. 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. The Placing was completed
on 7 February 2022. 100% of the gross proceeds of this Placing were deposited
in an escrow account (the "Escrow Account"). The amount held in the Escrow
Account will only be released in connection with the completion of the
Business Combination or the Company's liquidation. The Board of Directors
believes that the funds available to the Company outside of the escrow 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, was to use the proceeds to pay the various costs and expenses
incurred and contracted for as disclosed in the separate financial statements
for the 12 months ended 31 December 2022, except the underwriting commission.
The proceeds from the Placing of Public Shares were not to be used to pay
these expenses.
The Sponsor has committed additional funds to the Company through the
Overfunding Subscription, the proceeds of which is held in the 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 were not part
of the Placing but were part of the applications for Shares Admissions and
Warrants Admission which took place on 24 February 2022.
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.
The following table illustrates the Company's expected liquidity of assets
held:
Less than 1-12
1 month months Total
GBP GBP GBP
At 31 December 2022
Total assets 1,181,344 119,803,005 120,984,349
At 31 December 2021
Total assets 30,000 731,407 761,407
The table below analyses the Company's financial liabilities into relevant
maturity based on the remaining period at the statement of financial position
date to the contractual maturity date. The amounts in the table are the
contractual undiscounted cash flows.
Between
Less than 1-5 More than
1 year years 5 years Total
GBP GBP GBP GBP
At 31 December 2022
Trade and other payables 157,617 - - 157,617
Redeemable class A shares 108,335,684 - - 108,335,684
Class A warrants at fair value - 6,396,300 - 6,396,300
Class B warrants at fair value - 8,586,000 - 8,586,000
Total liabilities 108,493,301 14,982,300 - 123,475,601
At 31 December 2021
Trade and other payables 883,696 - - 883,696
Total liabilities 883,695 - - 883,695
Capital management
As at 31 December 2022, the Company has a negative equity of GBP 2,491,252.
However, the Board of Directors believes that the funds available to the
Company are sufficient to pay costs and expenses incurred by the Company prior
to the completion of the Initial Business Combination. The Company has
non-current liabilities which does not impose any liquidity issues to the
Company. The Class A Warrants designated as "Initial Overfunding Warrants" in
the Prospectus and the Class B Warrants designated as the "Sponsor Warrants"
in the Prospectus, which together represent a liability of GBP 8,586,000 as at
31 December 2022, have no redemption rights or liquidation distribution rights
and will expire worthless in case of liquidation. Furthermore the Public
Warrants, which represent a liability of GBP 6,396,300 as at 31 December 2022,
are redeemable at the option of the Company.
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. The Company has placed its cash with a prime financial institution with
a credit rating of A1, with a stable outlook, by the rating agency Moody's.
The Company's maximum exposure to credit risk is detailed in the table below:
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Cash and cash equivalents 1,181,344 30,000
Prepayments 93,654 -
1,274,998 30,000
5. Other operating expenses
The other operating expenses of GBP 738,626 (2021: GBP 152,560) consist of
fees for accounting, legal, and other services not related to the placing.
1 Jan 2022 20 Sept 2021
To to
31 Dec 2022 31 Dec 2021
GBP GBP
Accounting, tax consulting, auditing and similar fees 242,471 151,407
Bank charges and commissions 2,500 -
Director's fees 27,348 -
Legal, litigation and similar fees 72,575 -
Notarial and similar fees 9,532 1,153
Other professional fees 110,706 -
Contributions to professional associations 3,892 -
Third-party insurance 269,602 -
738,626 152,560
The total audit fees paid breaks down as follows:
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Audit fees 93,309 98,280
Audit-related fees - 122,850
Total 93,309 221,130
6. Income Tax
1 Jan 2022 20 Sept 2021
To to
31 Dec 2022 31 Dec 2021
GBP GBP
Loss for the period before tax (5,549,198)) (152,288)
Theoretical tax charges applying tax rate 24.94% (2021: 22.8%) (1,383,970) (34,722)
Reconciling items:
Income excluded from taxable income:
Fair value adjustments - Investment in subsidiaries (313,458) -
Non-deductible expenses:
Amortisation- Redeemable Public Shares placing costs 580,577 -
Fair value adjustments- Public Warrants 118,166 -
Fair value adjustments- Sponsor Warrants 819,528 -
Other:
Unrecognised deferred tax assets on tax losses 179,158 34,722
- -
Deferred tax
Deferred tax assets have not been recognised in respect of the loss incurred
during the period ended 31 December 2022 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.
7. Earnings /(loss) per share
Basic earnings/(loss) per share ("EPS") is calculated by dividing the
profit/(loss) for the period 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 diluting instruments are exercisable. Therefore, basic EPS
equals diluted EPS as at 31 December 2022.
31 Dec 2022 31 Dec 2021
GBP GBP
Loss for the year/period (5,549,198) (152,288)
Weighted average number of ordinary shares 13,552,384 3,750,000.00
Basic and diluted EPS (0.41) (0.04)
8. Financial assets at fair value through profit or loss
1 Jan 2022 1 Jan 2022
to to
31 Dec 2022 31 Dec 2022
Description No of shares shareholding cost price fair value
% GBP GBP
HMA1 (ESCROW) Limited 118,450,001 100.00 118,450,001 119,706,851
The movements during the year ended 31 Dec 2022 and the year ended 31 Dec
2021:
1 Jan 2022 20 Sept 2021 1 Jan 2022 20 Sept 2021
to to to to
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
cost price cost price fair value fair value
GBP GBP GBP GBP
Opening balance 1 - 1 -
Acquisitions 118,450,000 1 118,450,000 1
Fair value adjustments - - 1,256,850 -
Closing balance 118,450,001 1 119,706,851 1
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.
On the 2nd February the Company subscribed for 106,605,000 ordinary shares
with nominal value GBP 1 in HMA1 for the consideration of GBP 106,605,000. The
amount of GBP 106,616,960 was transferred on 8 February 2022.
On the 11th of February the Company subscribed for an additional 11,833,040
ordinary shares with nominal value GBP 1 in HMA1for the consideration of GBP
11,833,040. The amount of GBP 11,833,040 was transferred on 15 February
2022.
9. Deferred costs
As at 31 December 2022 there are no deferred costs. A at 31 December 2021
Deferred cost of GBP 731,407 comprised of legal costs incurred by the Company
in relation to the public offering which was offset against the Sponsor
Warrants after the Placing during the year ended 31 December 2022.
10. Cash and cash equivalents
31 Dec 2022 31 Dec 2021
GBP GBP
Cash and cash equivalents 1,181,344 30,000
11. Trade and other receivables
As at 31 Dec 2022 the company has a receivable on HMA1 in the amount of GBP
2,500.
12. Prepayments
31 Dec 2022 31 Dec 2021
GBP GBP
Prepaid FCA fees 5,756 -
Prepaid D&O insurance 87,898 -
93,654 -
13. Issued capital and reserves
As at 31 December 2021, the subscribed share capital amounted to GBP 30,000
consisting of 3,750,000 Class B ordinary shares with no par 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 of the articles
of association.
On 2 February 2022, the existing 3,750,000 Sponsor Shares were converted into
2,875,000 Sponsor Shares representing the entire issued share capital of GBP
30,000.
It is planned that these 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.
On 2 February 2022 the Company's Prospectus was approved and published on the
London Stock Exchange.
On 2 February 2022, the capital of the Company was increased by the issuance
of 10,350,000 Redeemable Class A Shares (the "Public Shares"), each share
being issued in the form of a unit consisting of one Public Share with the
right to receive one half of a Public Warrant. These Public Shares have been
fully paid up by a contribution in cash of GBP 103,500,000.
On the same day, the capital of the Company was increased by the issuance of
another 1,150,000 Redeemable Class A Shares (the "Option Shares") through a
second Capital Increase. These Option Shares have been fully paid up by a
contribution in cash of GBP 11,960. A complementary amount of GBP 11,488,040
(GBP 9.9896 per Option Share) was allocated to account 115 of the Company and
was intended to be paid on the option closing period.
Because they are redeemable under certain conditions, the 11,500,000
Redeemable Class A Shares do not meet the definition of an equity instrument
as per IAS 32. Hence these Redeemable Class A Shares are considered as debt
instruments from an accounting standpoint.
On 2 February 2022, the Sponsor subscribed to 310,500 units at a price of
GBP 10 per unit, each unit consisting of one Non-Redeemable Class A Share cum
right to receive one half Public Warrant. Being non-redeemable, these shares
qualify as equity instruments under IAS 32. Hence they resulted in an increase
of the share capital from GBP 30,000 to GBP 33,229.20, the remaining of the
subscription price being allotted to the share premium account.
On 7 February 2022, the 11,500,000 Redeemable Class A 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".
On 7 February 2022 Citigroup Global Markets Limited, acting as Stabilisation
Manager, gave notice of the non-exercise by it of the put option granted by
the Company to the Stabilisation Manager (the "Put Option"), as no
stabilisation was undertaken.
On 7 February 2022, further to the non-exercise of the Put Option, the Sponsor
subscribed to another 34,500 units at a price of GBP 10 per unit, each unit
consisting of one Non-Redeemable Class A Share cum right to receive one half
Public Warrant, hence resulting in an increase of the share capital on 8
February 2022 from GBP 33,229.20 to GBP 36,817, the remaining of the
subscription price being allotted to the share premium account.
The non-exercise of the Put Option and the Overfunding Shares Subscription
brought the total number of Class A Shares to 11,845,000, of which 11,500,000
Redeemable Class A Shares and 345,000 Non-Redeemable Class A Shares.
The Company initially recognised the units subscribed by the Sponor as 345,000
Non- Redeemable Class A Shares at GBP 9.50 per share and GBP 1 per full
warrant. The Company initially recognised these Non-Redeemable Class A shares
at GBP 3,180,234, net of transaction costs attributable to these shares
amounting to GBP 97,266.
As at 31 December 2022, the issued share capital of the Company is set at GBP
156,417.20 represented by eleven million eight hundred 11,845,000 Public
Shares without nominal value and 2,875,000 Sponsor Shares without nominal
value. The total number of voting rights in the Company is 14,720,000.
From an accounting standpoint, considering that the Redeemable Class A Shares
do not meet the definition of an equity instrument as per IAS 32, they are
classified as debt instruments in the consolidated financial statements.
Therefore, the share capital in the consolidated financial statements is only
comprised of the Class B Shares, also referred to as the "Sponsor Shares", and
the Non-Redeemable Class A Shares, for a total amount of GBP 36,817 as at 31
December 2022, and a share premium of GBP 3,173,417 in the share premium
account..
Authorised capital
On 2 February 2022, the Board of Directors approved the increase of the
authorised capital of the Company from GBP 1,000,000 consisting of
1,000,000,000 Public Shares to GBP 1,122,829.20; consisting of 1,011,810,500
Public Shares; and authorised the board of directors of the Company, to issue
Public Shares, to grant options or warrants to subscribe for Public Shares and
to issue any other instruments giving access to such shares within the limits
of the authorised capital to such persons and on such terms as they shall see
fit and specifically to proceed with the issue of up to one billion and eleven
million eight hundred and ten thousand five hundred (1,011,810,500) Public
Shares without nominal value and with removal or limitation of the
preferential right to subscribe to the Public Shares, as applicable, issued
for the existing shareholders of the Company.
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.
14. Non-current liabilities
14.1 Redeemable Class A ordinary shares of no par value
As referred to in note 14, the Company issued 11,500,000 Redeemable Class A
Shares and allocated GBP 9.50 of the proceed per Units to the share price and
GBP 1 to each full warrant. The Company initially recognised the redeemable
Class A shares at amortised cost valued at GBP 106,007,791, net of transaction
costs attributable to these shares amounting to GBP 3,242,209.
Transaction costs are incremental costs that are directly attributable to the
issuance of the Class A shares and its subsequent listing on the London Stock
Exchange were deducted from its initial cost. The transaction costs include
Listing Fees, legal fees, audit fees, accounting and administration fees,
agency fees and FCA fees.
As at 31 December 2022, the amortized cost of the redeemable Class A shares
amounts to GBP 108,335,684 after amortisation of GBP 2,327,893 calculated
using the EIR method. This amortization is presented as part of finance costs
in the statement of comprehensive income. The fair value of redeemable Class A
shares is GBP 115,287,500 based on its quoted price (level 1) as of 31
December 2022.
Redemption Rights. The Company will provide its Class A Public Shareholders
with the opportunity to redeem all or a portion of their Public Shares,
exercisable prior to the completion of the Initial Business Combination
irrespective of whether and how they vote at the General Meeting convened to
approve the Initial Business Combination. Public Shareholders seeking
redemption of their Public Shares must submit a valid request for redemption
to the Company in accordance with the terms to be set out in the circular in
relation to the shareholder vote on the Initial Business Combination at the
General Meeting, which will be published by the Company following the approval
of the Initial Business Combination by the Board of the Company.
In terms of the Waiver and Lock Up Deed entered into by the Sponsor; each
Insider and the Company; the Sponsor and each Insider agreed to not propose
any amendment to the Company's amended and restated memorandum and articles of
association: (a) to modify the substance or timing of the Company's obligation
to allow redemptions in connection with the Business Combination; (b) to
modify the substance or timing of the Company's obligation to redeem 100% of
the Public Shares if the Company does not complete a Business Combination by
the Business Combination Deadline; or (c) with respect to any other material
provisions relating to shareholders' rights or pre-Business Combination
activity, in each case, unless the Company provides its Public Shareholders
with the opportunity to redeem their Public Shares upon approval of any such
amendment at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Escrow Account, including interest earned on the funds
held in the Escrow Account and not previously released to the Company to pay
its taxes, divided by the number of then issued and outstanding Public Shares.
14.2 Public Warrants
On 24 February 2022, the Company admitted 5,922,500 Class A warrants (the
"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".
The Public Warrants will be exercisable during the "Exercise Period", which
shall be the period beginning 30 days after the date on which the Initial
Business Combination is completed and ending at the close of trading on the
main market for listed securities of the London Stock Exchange on the first
Business Day after the fifth anniversary of the Business Combination
Completion Date provided that the Exercise Period shall end earlier (i) upon
redemption of the Public Warrants in accordance with their terms, (ii) if the
Company fails to complete an Initial Business Combination by the Business
Combination Deadline, (iii) or upon any liquidation of the Company.During the
Exercise Period, the Company may, at its sole discretion, elect to redeem
the Public Warrants in whole but not in part, upon a minimum of 30 calendar
days' prior written notice of redemption at (i) a redemption price of £0.01
per Public Warrant if the closing price of its Public Shares following the
consummation of the Initial Business Combination equals or exceeds £18.00
for any 20 out of 30 consecutive trading days ending three Business Days
before the Company sends the notice of redemption; or (ii) a redemption price
of £0.10 per Public Warrant if the closing price of its Public Shares for
any 20 out of 30 consecutive trading days following the consummation of the
Initial Business Combination, ending three Business Days before the Company
sends the notice of redemption equals or exceeds £10.00 but is below £18.00,
subject to adjustments to the number of Public Shares issuable upon exercise
or the exercise price of a Public Warrant as described in the company's
Prospectus.
Public Warrant holders may exercise their Public Warrants after such
redemption notice is given until the scheduled redemption date.
There will be no redemption rights or liquidating distributions with respect
to the Public Warrants, which will expire worthless if the Company fails to
complete the Initial Business Combination by the Business Combination
Deadline.
The Public Warrants are classified as derivative liabilities and were
initially recognised at their fair value of GBP 1 per warrant at the issuance
date of 2 February 2022
As at 31 December 2022, the fair value of Class A warrants was estimated at
GBP 6,395,300 (GBP1.08 per warrant) using the average of the Binomial Tree and
Monte Carlo valuations methods; (level 3), resulting in the recognition of
fair value loss of GBP 473,800 for the period from issue date to 31 December
2022. The significant inputs to the valuation model include the contractual
terms of the warrants (i.e. exercise price, maturity), risk-free rates of
German government bonds and volatility of the warrants by reference to average
of the volatility of traded warrants issued by similar special purpose
acquisition companies and of volatility of target peers, and discount for
probability of liquidation of the Company because not having consummated a
business combination by the stated deadline.
14.3 Sponsor Warrants
On 2 February 2022, the Sponsor agreed and subscribed for an aggregate of
5,070,000 Class B warrants (the "Sponsor Warrants") at a price of GBP 1.00 per
Sponsor Warrant (GBP 5,070,000 in the aggregate), each Sponsor Warrant
entitling the holder to purchase one Public Share at an exercise price of GBP
11.50 per Public Share. The Sponsor Warrants are not admitted to listing or
trading on any regulated market or trading platform. As at 7 February 2022,
the Put Option (as defined in Note 11) was not exercised, and as a
consequence the Sponsor subscribed for 230,000 additional Sponsor Warrants at
a price of GBP 1.00 per Sponsor Warrant (GBP 230,000 in the aggregate) to
cover the increased underwriting fees payable by the Company.
As at 31 December 2022, the fair value of Class A warrants was estimated at
GBP 8,586,300 (GBP1.62 per warrant) using the average of the Binomial Tree and
Monte Carlo valuations method; (level 3), resulting in the recognition of fair
value loss of GBP 3,286,000 for the period from issue date to 31 December
2022. The significant inputs to the valuation model include the contractual
terms of the warrants (i.e. exercise price, maturity), risk-free rates of
German government bonds and volatility of the warrants by reference to average
of the volatility of traded warrants issued by similar special purpose
acquisition companies and of volatility of target peers, and discount for
probability of liquidation of the Company because not having consummated a
business combination by the stated deadline.
15. Trade and other payables
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Accounting, tax consulting, auditing and similar fees 112,970 151,135
Directors fees 14,245 -
Deferred costs - 731,407
Notarial and similar fees - 1,153
Professional fees 30,400 -
Payable to subsidiary 1 1
157,616 883,696
Trade and other payables are related to legal and other services received by
the Company. The carrying amounts of these approximate their fair value.
16. 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.
Transactions with key management personnel
The Board of Directors consist of 6 members.
There are no advances or loans granted to members of the Board of Directors as
at 31 December 2022.
The Company entered into contracts with the non executive directors effective
from the date of the Placing. The agreed Directors fees of GBP 10,000 per
annum are payable semi annually in arrears, in equal instalments, after
deduction of any taxes and other amounts that are required by law. Director's
fees to the value of GBP 27,348 were paid as at 31 December 2022.
17. Commitments and contingencies
The Company had the following material commitments and contingencies at 31
December 2022:
The Company entered into an agreement with Citigroup Global Markets Limited
(Underwriting Agreement), by virtue of which the Company will be liable to pay
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.
The Company entered into contracts with three non-executive directors which is
effective as from the date of the Placing. The agreed director's fees are GBP
10,000 per director, per annum; paid semi-annually in arrears in equal
instalments after deduction of any taxes and other amounts that are required
by law.
During the year, the Company entered into an agreement with a financial
advisor to source and/or evaluate potential acquisition(s) to be made by the
Company. The Company is committed to pay the advisor a monthly retainer of GBP
12,000 until the engagement is terminated. In terms of the agreement; in
respect of transactions that are already in contemplation, a commission of
0.8% of the relevant Target's enterprise value, is payable on the date of
signing of a share purchase agreement; and in respect of transactions that are
introduced to the Company by the advisor; a commission of 1.25% of the
relevant Target's enterprise value is payable on the date of signing of the
relevant SPA. These fees payable in respect of the acquisition of the Target;
shall be reduced by the amount of the Retainer received by the advisor up to
the date that these fees becomes payable. In addition, an incentive fee of GBP
500,000 is payable at the sole discretion of the Company by way of the
issuance of an equivalent number of ordinary shares in the capital of the
Company at the price at which ordinary shares are issued by the Company
pursuant to any equity raised to support the acquisition.
The Company has no other material commitments and contingencies as at 31
December 2022.
18. Events after the reporting period
Since 31 December 2022 the market backdrop for SPACs and public equity
offerings more generally has continued to be challenging. This climate has not
been conducive to completing an Initial Business Combination. As at the date
of this Report of Directors, the Company is not in sufficiently advanced
discussions with any potential targets to enable the Public Shareholders to
consider and vote on a potential Initial Business Combination.
On 4 April 2023 the Company gave notice convening an EGM to be held on 5 May
2023 to consider, and if thought fit, to approve the extension of the business
combination deadline to 7 February 2024 by way of an amendment to the
Articles.
Should the required majority of the shareholders not vote in favour of the
amendment to the articles, the Company's business combination deadline will
expire without a business combination being completed. In accordance with
the Articles, the Company will redeem in full the Redeemable Class A ordinary
shares, the public warrants will expire worthless and the corresponding
liability will be cancelled, and the Company's Redeemable Class A ordinary
shares and Public Warrants will be de-listed from the London Stock Exchange.
The Company may also have to incur additional costs in relation to its
liquidation, which cannot be estimated accurately at this stage. However, such
costs are deemed not material in the Board's opinion
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