REG - MAC Alpha Limited - Interim Financial Statements - 31 December 2023
14/03/2024 07:00
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RNS Number : 7800G MAC Alpha Limited 14 March 2024
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN
OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA,
JAPAN, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN
WHICH IT WOULD BE UNLAWFUL TO DO SO.
LEI number: 254900LOBYWJWYSAB947
MAC Alpha Limited
(the "Company")
Interim Financial Statements for the period ended 31 December 2023
The Company announces the publication of its Interim Financial Statements for
the period ended 31 December 2023.
The Interim Financial Statements are also available on the 'Shareholder
Documents' page of the Company's website at www.mac-alpha.com
(http://www.mac-alpha.com) .
Enquiries:
Company Secretary
Antoinette Vanderpuije - +44(0)207 004 2700
MAC ALPHA LIMITED
Unaudited Interim
Condensed Consolidated Financial Statements for the six months ended 31
December 2023
MANAGEMENT REPORT
We present to shareholders the unaudited condensed consolidated financial
statements of MAC Alpha Limited (the "Company") for the six months to 31
December 2023 (the "Interim Financial Statements"), consolidating the results
of MAC Alpha Limited and its subsidiary MAC Alpha (BVI) Limited (collectively,
the "Group" or "MAC").
Strategy
The Company was incorporated on 11 October 2021 and subsequently listed on the
Main Market of the London Stock Exchange on 24 December 2021. The Company has
been formed for the purpose of effecting a merger, share exchange, asset
acquisition, share or debt purchase, reorganisation, or similar business
combination with one or more businesses. The Company's objective is to
generate attractive long term returns for shareholders and to enhance value by
supporting sustainable growth, acquisitions, and performance improvements
within the acquired companies.
While a broad range of sectors will be considered by the Directors, those
which they believe will provide the greatest opportunity and which the Company
will initially focus on include:
• Automotive & Transport;
• Business-to-Business Services;
• Clean Technology;
• Consumer & Luxury Goods;
• Financial Services, Banking & Fin Tech;
• Insurance, Reinsurance & InsurTech, & Other Vertical
Marketplaces;
• Media & Technology; and
• Healthcare & Diagnostics.
The Directors may consider other sectors if they believe such sectors present
a suitable opportunity for the Company.
The Company will seek to identify situations where a combination of management
expertise, improving operating performance, freeing up cashflow for investment
and implementation of a focussed buy and build strategy can unlock growth in
their core markets and often into new territories and adjacent sectors.
Activity
During the period the Directors have engaged with a number of potential
management teams, attracted by the Company's flexible structure and main
market listing. Desktop due diligence has been conducted on sectoral
opportunities in which the prospective management teams have extensive
experience. While none of these opportunities have yet progressed to the
appointment of a management partner, or completing a platform acquisition,
discussions remain active.
Results
The Group's loss after taxation for the period to 31 December 2023 was
£137,174 (31 December 2022: loss of £170,297). The Group held a cash balance
at the period end of £391,116 (as at 30 June 2023: £554,446).
Directors
The Directors of the Company have served as directors during the period and
until the date of this report as set out below:
James Corsellis (Chairman)
Antoinette Vanderpuije
Tom Basset
Dividend Policy
The Company has not yet acquired a trading business and it is therefore
inappropriate to make a forecast of the likelihood of any future dividends.
The Directors intend to determine the Company's dividend policy following
completion of an acquisition and, in any event, will only commence the payment
of dividends when it becomes commercially prudent to do so.
Corporate Governance
As a company with a Standard Listing, the Company is not required to comply
with the provisions of the UK Corporate Governance Code and given the size and
nature of the Group the Directors have decided not to adopt the UK Corporate
Governance Code. Nevertheless, the Board is committed to maintaining high
standards of corporate governance and will consider whether to voluntarily
adopt and comply with the UK Corporate Governance Code as part of any
acquisition, taking into account the Company's size and status at that time.
The Company currently complies with the following principles of the UK
Corporate Governance Code:
· The Company is led by an effective and entrepreneurial board of
directors (''Board''), whose role is to promote the long-term sustainable
success of the Company, generating value for shareholders and contributing to
wider society;
· The Board ensures that it has the policies, processes,
information, time, and resources it needs in order to function effectively and
efficiently; and
· The Board ensures that the necessary resources are in place for
the Company to meet its objectives and measure performance against them.
Given the size and nature of the Company, the Board has not established any
committees and intends to make decisions as a whole. If the need should arise
in the future, for example following any acquisition, the Board may set up
committees and may decide to adopt the UK Corporate Governance Code.
Risks
The Directors have carried out a robust assessment of the principal risks
facing the Group including those that would threaten its business model,
future performance, solvency or liquidity. There have been no significant
changes to the principal risks described on in the Group's Audited Annual
Report and Consolidated Financial Statements for the year ended 30 June 2023.
The Directors are of the opinion that the risks detailed therein are
applicable to the six-month period to 31 December 2023, as well as the
remaining six months of the current financial year.
Outlook
The Board is steadfast in its commitment to a strategic approach that balances
patience with proactive engagement. As we navigate an M&A environment that
continues to evolve, especially regarding valuations and the availability and
cost of capital, our focus remains sharply on identifying the most promising
management partnerships and investment opportunities. The public status and
structure of our Company uniquely position us to adapt and capitalise on these
evolving opportunities, which we continue to progress.
Each of the Directors confirms that, to the best of their knowledge:
(a) these Interim Financial Statements, which have been prepared in accordance
with IAS 34 "Interim Financial Reporting" as adopted by the European Union,
give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Company; and
(b) these Interim Financial Statements comply with the requirements of DTR
4.2.
Neither the Company nor the Directors accept any liability to any person in
relation to the interim financial report except to the extent that such
liability could arise under applicable law.
Details on the Company's Board of Directors can be found on the Company
website at www.mac-alpha.com (http://www.mac-alpha.com) .
James Corsellis
Chairman
13 March 2024
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Six months ended
31 December 31 December
2023 2022
Note Unaudited Unaudited
£ £
Administrative expenses 6 (149,240) (172,048)
Total operating loss (149,240) (172,048)
Finance income 12,066 1,751
Loss before income taxes (137,174) (170,297)
Income tax - -
Loss for the period (137,174) (170,297)
Total other comprehensive income - -
Total comprehensive loss for the period (137,174) (170,297)
Loss per ordinary share
Basic and Diluted (£'S) 7 (0.1055) (0.2433)
The Group's activities derive from continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
31 December 2023 30 June
2023
Note Unaudited Audited
£ £
Assets
Current assets
Other receivables 9 17,606 6,621
Cash and cash equivalents 10 391,116 554,446
Total current assets 408,722 561,067
Total assets 408,722 561,067
Equity and liabilities
Equity
Ordinary shares 12 319,000 319,000
A shares 12 498,000 498,000
Sponsor share 12 1 1
Warrant reserve 12, 13 105,000 105,000
Warrant reserve A shares 12, 13 102,000 102,000
Share-based payment reserve 13, 15 67,516 67,516
Accumulated losses 13 (726,680) (589,506)
Total equity 364,837 502,011
Current liabilities
Trade and other payables 11 43,885 59,056
Total liabilities 43,885 59,056
Total equity and liabilities 408,722 561,067
The Interim Financial Statements were approved by the Board of Directors on 13
March 2024 and were signed on its behalf by:
James Corsellis Tom Basset
Chairman Non-Executive Director
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary A Sponsor Warrant Warrant Share Accumulated Total
shares Shares Share reserve reserve Based losses equity
A shares Payment
Reserve
£ £ £ £ £ £ £ £
Balance at 1 July 2022 319,000 - 1 105,000 - 67,516 (266,043) 225,474
Total comprehensive loss for the period - - - - - - (170,297) (170,297)
Balance as at 31 December 2022 319,000 - 1 105,000 - 67,516 (436,340) 55,177
Ordinary A Sponsor Warrant Warrant Share Accumulated Total
shares Shares Share reserve reserve Based losses Equity
A shares Payment
Reserve
£ £ £ £ £ £ £ £
Balance at 1 July 2023 319,000 498,000 1 105,000 102,000 67,516 (589,506) 502,011
Total comprehensive loss for the period - - - - - - (137,174) (137,174)
Balance as at 31 December 2023 319,000 498,000 1 105,000 102,000 67,516 (726,680) 364,837
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Six months ended
31 December 31 December
2023 2022
Note Unaudited Unaudited
£ £
Operating activities
Loss for the period (137,174) (170,297)
Adjustments to reconcile total operating loss to net cash flows:
Finance income (12,066) (1,751)
Working capital adjustments:
Increase in trade and other receivables and prepayments (10,985) (14,587)
Decrease in trade and other payables (15,171) (15,609)
Net cash flows used in operating activities (175,396) (202,244)
Investing activities
Interest received 12,066 1,751
Net cash flows received from investing activities 12,066 1,751
Net decrease in cash and cash equivalents (163,330) (200,493)
Cash and cash equivalents at the beginning of the period 554,446 282,244
Cash and cash equivalents at the end of the period 10 391,116 81,751
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
MAC Alpha Limited was incorporated on 11 October 2021 in the British Virgin
Islands ("BVI") as a BVI business company (registered number 2078235) under
the BVI Business Company Act, 2004. The Company was listed on the Main Market
of the London Stock Exchange on 24 December 2021 and has its registered
address at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola,
British Virgin Islands VG1110.
The Company has been formed for the purpose of effecting a merger, share
exchange, asset acquisition, share or debt purchase, reorganisation, or
similar business combination with one or more businesses. The Company has one
subsidiary, MAC Alpha (BVI) Limited (together with the Company the "Group").
2. ACCOUNTING POLICIES
(a) Basis of preparation
These Condensed Consolidated Financial Statements ("Interim Financial
Statements") have been prepared in accordance with IAS 34 Interim Financial
Reporting and are presented on a condensed basis.
These Interim Financial Statements do not include all the information and
disclosures required in the annual financial statements and should be read in
conjunction with the Group's Annual Report and Consolidated Financial
Statements for the year ended 30 June 2023 ("2023 Annual Report"), which is
available on the Company's website, www.mac-alpha.com
(http://www.mac-alpha.com) . Accounting policies applicable to these Interim
Financial Statements are consistent with those applied in the 2023 Annual
Report
(b) Going Concern
The Interim Financial Statements have been prepared on a going concern basis,
which assumes that the Group will continue to be able to meet its liabilities
as they fall due within the next 12 months from the date of approval. The
Directors have considered the financial position of the Group and have
reviewed forecasts and budgets for a period of at least 12 months following
the approval of the Interim Financial Statements.
The Group had cash resources of £391,116 (30 June 2023: £554,446) at 31
December 2023 and net assets of £364,837 (30 June 2023: £502,011). The
Company has sufficient resources to continue to pursue its investment
strategy.
Subject to the structure of any acquisition, which may include effecting a
merger, share exchange, asset acquisition, share or debt purchase,
reorganisation or similar business combination with one or more businesses,
the Company may need to raise additional funds to finance the acquisition in
the form of equity and/or debt. The capital structure of the Company enables
it to issue different types of shares in order to raise equity to fund an
acquisition. The ability of the Company to raise additional funds in relation
to an acquisition may affect its ability to complete that acquisition. Other
factors outside of the Company's control may also impact on the Company's
ability to complete that acquisition. The key risks relating to the Company's
ability to execute its stated strategy are set out in its 2023 Annual Report,
which is available on the Company's website.
On 16 December 2021, the Company entered into a forward purchase agreement
("FPA") with Marwyn Value Investors II LP (''MVI II LP'') of up to £20
million, which may be drawn for general working capital purposes and to fund
due diligence costs. Any drawdown is subject to the prior approval of MVI II
LP and the satisfaction of conditions precedent. As at 31 December 2023, the
Company has drawn down £600,000 under the FPA. Whilst the FPA provides a
mechanism for the Company to raise additional funds, as any drawdown is not
under the exclusive control on the Company, all cashflow and working capital
forecasts have been prepared without any further draw down on the FPA being
assumed.
The Directors have considered macroeconomic backdrop and the ongoing operating
costs expected to be incurred by the business over at least the next 12
months. Based on their review the Directors have concluded that there are no
material uncertainties relating to going concern of the Group and as such the
Interim Financial Statements have been prepared on a going concern basis,
which assumes that the Group will continue to be able to meet its liabilities
as they fall due within the next 12 months from the date of approval of the
Interim Financial Statements.
(c) New standards and amendments to International Financial Reporting
Standards
Standards, amendments and interpretations effective and adopted by the Group
IFRSs applicable to the Interim Financial Statements of the Group for the
six-month period to 31 December 2023 have been applied.
Standards issued but not yet effective
The following standards are issued but not yet effective. The Group intends to
adopt these standards, if applicable, when they become effective. It is not
currently expected that these standards will have a material impact on the
Group.
Standard Effective date
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7*); 1 January 2024
Non-current Liabilities with Covenants (Amendments to IAS 1); 1 January 2024
Amendments to IFSR 16 - Lease liability in sale and leaseback; 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements: Classification of 1 January 2024
Liabilities as Current or Non-current*; and
Amendments to IAS 21 Lack of Exchangeability. 1 January 2025
*Subject to endorsement by the EU
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group's Interim financial statements under IFRS
requires the Directors to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities. Estimates and judgements are continually evaluated and
are based on historical experience and other factors including expectations of
future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
Significant estimates and accounting judgements
Classification of warrants
On 24 December 2021, the Company issued 700,000 ordinary shares and matching
warrants ("Warrants"). Under the terms of the warrant instrument, warrant
holders are able to acquire one ordinary share per warrant at a price of £1
per ordinary share. On 5 March 2023, the Company issued 600,000 A shares and
matching Class A Warrants ("A Warrants") on the basis of one Class A Warrant
per A Share at a price of £1 per share. The Warrants and A Warrants are
exercisable at any time until five years after the IPO date, being 24 December
2021.
The Warrants and A Warrants can only be classified as equity if they will be
settled only by the issuer exchanging a fixed amount of cash or another
financial asset for a fixed number of its own equity instruments. The warrant
instruments contain an exercise price adjustment ("Exercise Price
Adjustment"), whereby if the corresponding shares are issued at less than £1
before or as part of an acquisition then the exercise price equals the
discounted issue price, as a result the fixed-for-fixed requirement is
breached. However, it is the opinion of the Directors that whilst the Exercise
Price Adjustment exists, the likelihood of this being used is remote, and
therefore it is most appropriate for the Warrants and A Warrants to be
classified as equity.
4. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating decision-maker. As the
Group has not yet acquired an operating business, the Board considers the
Group as a whole for the purposes of assessing performance and allocating
resources, and therefore the Group has one reportable operating segment.
5. EMPLOYEES AND DIRECTORS
The Group does not have any employees. During the six months to 31 December
2023, the Company had three serving Directors: James Corsellis, Antoinette
Vanderpuije and Tom Basset, no Director received remuneration under the terms
of their Director service agreements (31 December 2022: 4 directors and
£Nil). The Company's subsidiary has issued Incentive Shares, as more fully
disclosed in Note 15, in which the Directors are indirectly beneficially
interested.
6. ADMINISTRATIVE EXPENSES
Six months ended 31 December 2023 Six months ended 31 December 2022
£'s £'s
Group expenses by nature
Professional support 139,196 144,089
Non-recurring project, professional and due diligence costs - 15,798
Audit fees payable in respect of the audit of the Group) 9,057 7,696
Sundry expenses 987 4,465
149,240 172,048
7. LOSS PER ORDINARY SHARE
Basic EPS is calculated by dividing the profit/ loss attributable to equity
holders of the company by the weighted average number of ordinary shares in
issue during the period. Diluted EPS is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. The weighted average number of shares has
not been adjusted in calculating diluted EPS as there are no instruments which
have a current dilutive effect.
The Company maintains different share classes, of which ordinary shares, A
shares and sponsor shares were in issue in the current period, and ordinary
shares and sponsor shares were in issue in the prior period. The key
difference between ordinary shares and A shares is that the ordinary shares
are traded with voting rights attached and the A shares are not listed and do
not carry voting rights. The ordinary share and A share classes both have
equal rights to the residual net assets of the Company, which enables them to
be considered collectively as one class per the provisions of IAS 33.
The sponsor share has no distribution rights so has been ignored for the
purposes of IAS 33.
Refer to Note 15 (share based payments) for instruments that could potentially
dilute basic EPS in the future.
For six months ended 31 December 2023 For six months ended 31 December 2022
Loss attributable to owners of the parent (£'s) (137,174) (170,297)
Weighted average in issue 1,300,000 700,000
Basic and diluted loss per ordinary share (£'s) (0.1055) (0.2433)
8. INVESTMENTS
Principal subsidiary undertakings of the Group
The Company directly owns the whole of the issued ordinary share capital of
its subsidiary undertaking. Details of the Company's subsidiary are presented
below:
Nature of business Country of incorporation Proportion of ordinary shares held by parent Proportion of ordinary shares held by the Group
Subsidiary
MAC Alpha (BVI) Limited Incentive vehicle BVI 100% 100%
The share capital of MAC Alpha (BVI) Limited consists of both ordinary shares
and A ordinary shares (the "Incentive Shares"). The Incentive Shares are held
by Marwyn Long Term Incentive LP (''MLTI'') and are non-voting. Further detail
on the Incentive Shares is given in Note 15.
The registered office of MAC Alpha (BVI) Limited is Commerce House, Wickhams
Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands VG1110,
British Virgin Islands.
9. OTHER RECEIVABLES
As at As at
31 December 30 June
2023 2023
£ £
Amounts receivable in one year:
Prepayments 17,606 6,621
17,606 6,621
There is no material difference between the book value and the fair value of
the receivables. Receivables are considered to be past due once they have
passed their contracted due date. Other receivables are all current.
10. CASH AND CASH EQUIVALENTS
As at As at
31 December 30 June
2023 2023
£ £
Cash and cash equivalents
Cash at bank 391,116 554,446
391,116 554,446
Credit risk is managed on a group basis. Credit risk arises from cash and cash
equivalents and deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties with a minimum
short-term credit rating of P-1, as issued by Moody's, are accepted.
11. TRADE AND OTHER PAYABLES
As at As at
31 December 30 June
2023 2023
£ £
Amounts falling due within one year:
TTrade payables 12,609 5,430
Accruals 19,785 42,116
Due to a related party (Note 16) 11,491 11,510
43,885 59,056
There is no material difference between the book value and the fair value of
the trade and other payables. All trade payables are non-interest bearing and
are usually paid within 30 days.
12. STATED CAPITAL
Authorised
Unlimited ordinary shares of no par value
Unlimited class A shares of no par value
Unlimited class B shares of no par value
100 sponsor shares of no par value
As at As at
31 December 30 June
2023 2023
£ £
Issued
700,000 ordinary shares of no par value 319,000 319,000
600,000 A shares of no par value 498,000 498,000
1 sponsor share of no par value 1 1
On incorporation, the Company issued 1 ordinary share of no par value to MVI
II Holdings I LP. On 28 October 2021, it was resolved that updated memorandum
and articles ("Updated M&A") be adopted by the Company and with effect
from the time the Updated M&A be registered with the Registrar of
Corporate Affairs in the British Virgin Islands, the 1 ordinary share which
was in issue by the Company be redesignated as 1 sponsor share of no par value
(the "Sponsor Share").
On 24 December 2021, the Company issued 700,000 ordinary shares and matching
Warrants at a price of £1 for one ordinary share and matching Warrant. Under
the terms of the warrant instrument, warrant holders are able to acquire one
ordinary share per warrant at a price of £1 per ordinary share. Warrants are
accounted for as equity instruments under IAS 32 and are measured at fair
value at grant date, the combined market value of one ordinary share and one
warrant was considered to be £1, in line with the market price paid by third
party investors. A Black Scholes option pricing methodology was used to
determine the fair value of the Warrants, which considered the exercise price,
expected volatility, risk free rate, expected dividends, and expected term.
Warrants have been assigned a fair value of 15p per Warrant and each ordinary
share has been valued at 85p per share, therefore, on issuance of the Warrants
£105,000 was recorded in the warrant reserve. Costs of £276,000 directly
attributable to the equity raise were taken against stated capital at the
issuance date.
On 5 March 2023, the Company issued 600,000 A shares and matching A Warrants
at a price of £1 for one A share and matching A Warrant. Under the terms of
the warrant instrument, warrant holders are able to acquire one A share per
warrant at a price of £1 per A share. A Warrants are accounted for as equity
instruments under IAS 32 and are measured at fair value at grant date, the
combined market value of one A share and one A Warrant was considered to be
£1, in line with the market price paid by third party investors. A Black
Scholes option pricing methodology was used to determine the fair value of the
A Warrants, which considered the exercise price, expected volatility, risk
free rate, expected dividends, and expected term. A Warrants have been
assigned a fair value of 17p per A Warrant and each A share has been valued at
83p per share, therefore, on issuance of the Warrants £102,000 was recorded
in the warrant reserve. There were no costs directly attributable to the issue
of shares.
Holders of ordinary shares are entitled to receive notice and attend and vote
at any meeting of members and have the right to a share in any distribution
paid by the Company and a right to a share in the distribution of the surplus
assets of the Company on a winding up. The A Shares are ordinary equity shares
with the same economic rights as the Company's ordinary shares but without
voting rights.
The Sponsor Share confers upon the holder no right to receive notice and
attend and vote at any meeting of members, no right to any distribution paid
by the Company and no right to a share in the distribution of the surplus
assets of the Company on a winding up. Provided the holder of the Sponsor
Share holds directly or indirectly 5 per cent. or more of the issued and
outstanding shares of the Company (of whatever class other than any Sponsor
Shares), they have the right to appoint one director to the Board.
Provided the holder of the Sponsor Share holds directly or indirectly 5 per
cent. or more of the issued and outstanding shares of the Company (of whatever
class other than any Sponsor Shares) or is a holder of incentive shares the
Company must receive the prior consent of the holder of the Sponsor Share in
order to:
i. issue any further Sponsor Shares;
ii. issue any class of shares on a non pre-emptive basis where the
Company would be required to issue such share pre-emptively if it were
incorporated under the UK Companies Act 2006 and acting in accordance with the
Pre-Emption Group's Statement of Principles; or
iii. amend, alter, or repeal any existing, or introduce any new
share-based compensation or incentive scheme in respect of the Group; and
iv. take any action that would not be permitted (or would only be
permitted after an affirmative shareholder vote) if the Company were admitted
to the Premium Segment of the Official List.
The holder of the Sponsor Share has the right to require that: (i) any
purchase or redemption by the Company of its shares; or (ii) the Company's
ability to amend the Memorandum and Articles, be subject to a special
resolution of members whilst the Sponsor (or an individual holder of a Sponsor
Share) holds directly or indirectly 5 per cent. or more of the issued and
outstanding shares of the Company (of whatever class other than any Sponsor
Shares) or are a holder of incentive shares.
13. RESERVES
The following describes the nature and purpose of each reserve within
shareholders' equity:
Accumulated losses
Cumulative losses recognised in the Consolidated Statement of Comprehensive
Income.
Share based payment reserve
The share based payment reserve is the cumulative amount recognised in
relation to the equity-settled share based payment scheme as further described
in Note 15.
Warrant reserve
The warrant reserve is the cumulative fair value attributed to warrants issued
attached to ordinary shares.
Warrant reserve A shares
The warrant reserve is the cumulative fair value attributed to warrants issued
attached to A shares.
14. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments:
As at As at
31 December 2023 30 June
2023
£ £
Financial assets measured at amortised cost
Cash and cash equivalents (Note 10) 391,116 554,446
391,116 554,446
Financial liabilities measured at amortised cost
Trade and other payables (Note 11) 32,394 47,546
Due to a related party (Note 16) 11,491 11,150
43,885 59,056
The fair value and book value of the financial assets and liabilities are
materially equivalent.
The Group's risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls, and
to monitor risks and adherence limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Group's
activities.
Treasury activities are managed on a Group basis under policies and procedures
approved and monitored by the Board. These are designed to reduce the
financial risks faced by the Group which primarily relate to movements in
interest rates.
As the Group's assets are predominantly cash and cash equivalents, market risk
and liquidity risk are not currently considered to be material risks to the
Group.
15. SHARE-BASED PAYMENTS
Management Long Term Incentive Arrangements
The Group has put in place a Long-Term Incentive Plan ("LTIP"), to ensure
alignment between Shareholders, and those responsible for delivering the
Company's strategy and attract and retain the best executive management
talent.
The LTIP will only reward the participants if shareholder value is created.
This ensures alignment of the interests of management directly with those of
Shareholders. As at the balance sheet date, an executive management team is
not yet in place and as such MLTI is the only participant in the LTIP. Any
future issuances of Incentive Shares to management will be dilutive to MLTI.
Under the LTIP, Incentive Shares are issued by MAC Alpha (BVI) Limited (the
"Subsidiary").
As at the statement of financial position date, MLTI had subscribed for
redeemable A ordinary shares of £0.01 each in the Subsidiary entitling it to
100 per cent. of the incentive value.
Preferred Return
The incentive arrangements are subject to the Company's shareholders achieving
a preferred return of at least 7.5 per cent. per annum on a compounded basis
on the capital they have invested time to time (with dividends and returns of
capital being treated as a reduction in the amount invested at the relevant
time) (the "Preferred Return").
Incentive Value
Subject to a number of provisions detailed below, if the Preferred Return and
at least one of the vesting conditions have been met, the holders of the
Incentive Shares can give notice to redeem their Incentive Shares for ordinary
shares in the Company ("Ordinary Shares") for an aggregate value equivalent to
20 per cent. of the "Growth", where Growth means the excess of the total
equity value of the Company and other shareholder returns over and above its
aggregate paid up share capital (20 per cent. of the Growth being the
"Incentive Value").
Grant date
The grant date of the Incentive Shares will be the date that such shares are
issued.
Redemption / Exercise
Unless otherwise determined and subject to the redemption conditions having
been met, the Company and the holders of the Incentive Shares have the right
to exchange each Incentive Share for Ordinary Shares in the Company, which
will be dilutive to the interests of the holders of Ordinary Shares. However,
if the Company has sufficient cash resources and the Company so determines,
the Incentive Shares may instead be redeemed for cash. It is currently
expected that in the ordinary course of business, Incentive Shares will be
exchanged for Ordinary Shares. However, the Company retains the right but not
the obligation to redeem the Incentive Shares for cash instead. Circumstances
where the Company may exercise this right include, but are not limited to,
where the Company is not authorised to issue additional Ordinary Shares or on
the winding-up or takeover of the Company.
Any holder of Incentive Shares who exercises their Incentive Shares prior to
other holders is entitled to their proportion of the Incentive Value to the
date that they exercise but no more. Their proportion is determined by the
number of Incentive Shares they hold relative to the total number of issued
shares of the same class.
Vesting Conditions and Vesting Period
The Incentive Shares are subject to certain vesting conditions, at least one
of which must be (and continue to be) satisfied in order for a holder of
Incentive Shares to exercise its redemption right.
The vesting conditions are as follows:
i. it is later than the third anniversary of the
initial acquisition and earlier than the seventh anniversary of the
Acquisition;
ii. a sale of all or substantially all of the revenue
or net assets of the business of the Subsidiary in combination with the
distribution of the net proceeds of that sale to the Company and then to its
shareholders;
iii. a sale of all of the issued ordinary shares of the
Subsidiary or a merger of the Subsidiary in combination with the distribution
of the net proceeds of that sale or merger to the Company's shareholders;
iv. whereby corporate action or otherwise, the Company
effects an in-specie distribution of all or substantially all of the assets of
the Group to the Company's shareholders;
v. aggregate cash dividends and cash capital returns
to the Company's Shareholders are greater than or equal to aggregate
subscription proceeds received by the Company;
vi. a winding-up of the Company;
vii. a winding-up of the Subsidiary; or
viii. a sale, merger or change of control of the Company.
If any of the vesting conditions described in paragraphs (ii) to (viii) above
are satisfied before the third anniversary of the initial acquisition, the A
Shares will be treated as having vested in full.
Holding of Incentive Shares
MLTI holds Incentive Shares entitling it in aggregate to 100 per cent. of the
Incentive Value. Any future management partners or senior executive management
team members receiving Incentive Shares will be dilutive to the interests of
existing holders of Incentive Shares, however the share of the Growth of the
Incentive Shares in aggregate will not increase.
The following shares were issued on 25 November 2021.
Nominal Price Issue price per A ordinary share £'s Number of A ordinary shares Unrestricted market value at grant date £'s IFRS 2 Fair value £'s
Marwyn Long Term Incentive LP £0.01 7.50 2,000 15,000 67,516
Valuation of Incentive Shares
A valuation of the incentive shares has been prepared by Deloitte LLP dated 25
November 2021 to determine the fair value of the Incentive Shares in
accordance with IFRS 2 at grant date.
There are significant estimates and assumptions used in the valuation of the
Incentive Shares. Management has considered at the grant date, the probability
of a successful first acquisition by the Company and the potential range of
value for the Incentive Shares, based on the circumstances on the grant date.
The fair value of the Incentive Shares granted under the scheme was calculated
using a Monte Carlo model. The fair value uses an ungeared volatility of 25
per cent., and an expected term of seven years. The Incentive Shares are
subject to the Preferred Return being achieved, which is a market performance
condition, and as such has been taken into consideration in determining their
fair value. A risk-free rate of 0.7 per cent. has been applied. The model
incorporates a range of probabilities for the likelihood of an acquisition
being made of a given size.
As the shares issued to MLTI were deemed to vest on issue, the full expense of
£52,516 relating to the issue was recognised in the Statement of
Comprehensive Income for the period ended 30 June 2022.
16. RELATED PARTIES
James Corsellis, Antoinette Vanderpuije and Tom Basset have served as
directors of the company during the period. James Corsellis is the managing
partner of MIM LLP, and Antoinette Vanderpuije and Tom Basset are partners of
MIM LLP, MIM LLP is the manager of the Marwyn Fund, the Marwyn Fund holds 90%
of the Company's issued ordinary share capital, 100% of the A ordinary shares
and 1 Sponsor Share.
James Corsellis is the managing partner of Marwyn Capital LLP, and Antoinette
Vanderpuije and Tom Basset are also partners. Marwyn Capital LLP provides
corporate finance and managed services support including named company
secretary, to the Company. On an ongoing basis a monthly fee of £10,000 per
calendar month is charged for the provision of the corporate finance services,
and managed services support is charged by Marwyn Capital LLP on a time spent
basis. The total amount charged in the period ended 31 December 2023 by Marwyn
Capital LLP was £78,900 (31 December 2022: £90,352) and they had incurred
expenses on behalf of the Group, which were subsequently recharged, of £9,087
(31 December 2022: £84). An amount payable to Marwyn Capital LLP of £11,491
(31 December 2022: £12,724) was outstanding as at the period end.
17. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding at 31 December
2023 (31 December 2022: £Nil) which would require disclosure or adjustment in
these Interim Financial Statements.
18. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would require
disclosure or adjustment to these Interim Financial Statements.
ADVISORS
Company Secretary BVI legal advisers to the Company
Antoinette Vanderpuije Conyers Dill & Pearman
11 Buckingham Street Commerce House
London Wickhams Cay 1
WC2N 6DF Road Town
Email: MACAlpha@marwyn.com VG1110
Tortola
British Virgin Islands
Registered Agent and Assistant Company Secretary Depository
Conyers Corporate Services (BVI) Limited Link Market Services Trustees Limited
Commerce House The Registry
Wickhams Cay 1 34 Beckenham Road
Road Town Beckenham
VG1110 Kent
Tortola BR3 4TU
British Virgin Islands
English legal advisers to the Company Registrar
Travers Smith LLP Link Market Services (Guernsey) Limited
10 Snow Hill Mont Crevelt House
London Bulwer Avenue
EC1A 2AL St Sampson
Guernsey
GY2 4LH
Registered office Independent auditor
Commerce House Baker Tilly Channel Islands
Wickhams Cay 1 1(st) Floor Kensington Chambers
Road Town 46/50 Kensington Place
VG1110 St Helier
Tortola Jersey
British Virgin Islands JE04 0ZE
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