REG - Marwyn AcqCo III Ltd - Interim Financial Statements - 31 December 2024
25/03/2025 17:15
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RNS Number : 1176C Marwyn Acquisition Company III Ltd 25 March 2025
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PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN
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WHICH IT WOULD BE UNLAWFUL TO DO SO.
LEI: 254900YT8SO8JT2LGD15
Marwyn Acquisition Company III Limited
(the "Company")
Interim Financial Statements for the period ended 31 December 2024
The Company announces the publication of its Interim Financial Statements for
the period ended 31 December 2024.
The Interim Financial Statements are also available on the 'Shareholder
Documents' page of the Company's website at www.marwynac3.com
(http://www.marwynac3.com) .
Enquiries:
Company Secretary
Antoinette Vanderpuije - 020 7004 2700
Zeus Capital Limited - Corporate Broker - 020 3829 5000
Harry Ansell
Katy Mitchell
MARWYN ACQUISITION COMPANY III LIMITED
Unaudited Interim
Condensed Consolidated Financial Statements for the 6 months ended 31 December
2024
MANAGEMENT REPORT
We present to shareholders the unaudited interim condensed consolidated
financial statements (the "Interim Financial Statements") of Marwyn
Acquisition Company III Limited (the "Company") for the six months to 31
December 2024, consolidating the results of Marwyn Acquisition Company III
Limited and its subsidiary, MAC III (BVI) Limited (collectively, the "Group").
Strategy
The Company was incorporated on 31 July 2020 and subsequently listed on the
Main Market of the London Stock Exchange on 4 December 2020. The Company has
been formed for the purpose of effecting a merger, share exchange, asset
acquisition, share or debt purchase, reorganisation, or similar business
combination with one or more businesses. The Company's objective is to
generate attractive long term returns for shareholders and to enhance value by
supporting sustainable growth, acquisitions, and performance improvements
within the acquired companies.
While a broad range of sectors will be considered by the Directors, those
which they believe will provide the greatest opportunity and which the Company
will initially focus on include:
• Automotive & Transport;
• Clean Technology;
• Consumer & Luxury Goods;
• Banking & FinTech;
• Insurance, Reinsurance & InsurTech & Other Vertical Marketplaces;
• Media & Entertainment;
• Healthcare & Diagnostics; and
• Business-to-Business Services.
The Directors may consider other sectors if they believe such sectors present
a suitable opportunity for the Company.
The Company will seek to identify situations where a combination of management
expertise, improving operating performance, freeing up cashflow for
investment, and implementation of a focussed buy and build strategy can unlock
growth in their core markets and often into new territories and adjacent
sectors.
Activity
The Directors have been encouraged by the progress made in discussions with
potential management partners and believe the listed status and flexible
structure of the Company represents an attractive platform from which to
execute a buy-and-build strategy. This has been reinforced by preliminary due
diligence conducted on a variety of potential related Merger and Acquisition
(''M&A'') opportunities.
On 7 July 2024, the Company announced that it had repurchased and cancelled 5
million of its unlisted A Shares of no par value and 5 million unlisted
matching A Warrants for an aggregate consideration of £5,000,000. Further
details in respect of the Repurchase and Cancellation are disclosed in notes
13 and 14.
Results
The Group's profit after taxation for the period to 31 December 2024 was
£66,503 (31 December 2023: profit of £237,150). The Group held a cash
balance at the period end of £4,904,734 (as at 30 June 2024: £10,054,287).
The Group has not yet acquired an operating business and as such is not yet
generating income from trading activities.
Directors
The Directors of the Company have served as directors during the period and
until the date of this report as set out below:
James Corsellis (Chairman);
Antoinette Vanderpuije (Non-Executive Director); and
Tom Basset (Non-Executive Director).
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
During the previous period, the Company had a Standard Listing and was
therefore not required to comply with the provisions of the UK Corporate
Governance Code. On 29 July 2024, the new UK Listing Rules came into force;
under the new regime, the Company transitioned to the Shell Companies Category
and therefore continued to not be required to comply with the provisions of
the UK Corporate Governance Code.
The board of Directors (the "Board") is committed to maintaining high
standards of corporate governance. Given the size and nature of the Group, the
Board have decided not to adopt the UK Corporate Governance Code 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,
whose role is to promote the long term sustainable success of the Company,
generating value for shareholders and contributing to wider society;
· The Board ensures that it has the policies, processes,
information, time and resources it needs in order to function effectively and
efficiently; and
· The Board ensures that the necessary resources are in place for
the company to meet its objectives and measure performance against them.
Given the size and nature of the Company, the Board has not established any
committees and intends to make decisions as a whole. If the need should arise
in the future, for example following any acquisition, the Board may set up
committees and may decide to adopt the UK Corporate Governance Code.
Risks
The Company's Audited Annual Report and Consolidated Financial Statements for
the year ended 30 June 2024, which are available on the Company's website, set
out the risk management and internal control systems for the Group and
identifies the risks that the Directors consider to be most relevant to the
Company based on its current status. The Directors are of the opinion that
there have been no changes to the risks faced by the Company since the
publication of the Annual Report and Consolidated Financial Statements and
that these remain applicable for the remaining six months of the year.
Outlook
Further progress has been made in discussions with potential management
partners and, alongside a more favourable outlook for capital markets
generally, as well as encouraging sector-specific trends, the directors look
forward to updating shareholders in due course.
Each of the Directors confirms that, to the best of their knowledge:
(a) these Interim Financial Statements, which have been prepared in accordance
with IAS 34 "Interim Financial Reporting" as adopted by the European Union,
give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Company; and
(b) these Interim Financial Statements comply with the requirements of DTR
4.2.
Neither the Company nor the Directors accept any liability to any person in
relation to the Interim Financial Statements except to the extent that such
liability could arise under applicable law.
Details on the Company's Board of Directors can be found on the Company
website at www.marwynac3.com (http://www.marwynac3.com) .
James Corsellis
Chairman
25 March 2025
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months
Ended Ended
31 December 31 December
2024 2023
Note Unaudited Unaudited
£'s £'s
Administrative expenses 6 (305,826) (271,560)
Total operating loss (305,826) (271,560)
Finance income 172,329 254,710
Movement in fair value of warrants 13 - 254,000
Reversal of unrealised loss on cancellation of A warrants 13 200,000 -
Profit for the period before tax 66,503 237,150
Income tax 7 - -
Profit for the period 66,503 237,150
Total other comprehensive income - -
Total comprehensive profit for the period 66,503 237,150
Profit per ordinary share £'s £'s
Basic and diluted 8 0.0086 0.0187
The Group's activities derive from continuing operations.
The Notes on pages 9 to 23 form an integral part of these Interim Financial
Statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
31 December 30 June
2024 2024
Note Unaudited Audited
£'s £'s
Assets
Current assets
Other receivables 10 19,291 9,920
Cash and cash equivalents 11 4,904,734 10,054,287
Total current assets 4,924,025 10,064,207
Total assets 4,924,025 10,064,207
Equity and liabilities
Equity
Ordinary Shares 14 326,700 326,700
A Shares 14 6,020,000 10,320,000
Sponsor share 14 1 1
Share-based payment reserve 15, 17 169,960 169,960
Accumulated losses 15 (3,070,142) (3,136,645)
Total equity 3,446,519 7,680,016
Current liabilities
Trade and other payables 12 91,506 98,191
Warrants 13 1,386,000 2,286,000
Total liabilities 1,477,506 2,384,191
Total equity and liabilities 4,924,025 10,064,207
The Notes on pages 9 to 23 form an integral part of these Interim Financial
Statements.
The Interim Financial Statements were approved by the Board of Directors on 25
March 2025 and were signed on its behalf by:
James Corsellis Antoinette Vanderpuije
Chairman Director
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary A Sponsor Share Accumulated Total
shares Shares share based losses equity
payment
reserve
£'s £'s £'s £'s £'s £'s
Balance as at 1 July 2023 326,700 10,320,000 1 169,960 (3,225,225) 7,591,436
Total comprehensive profit for the period - - - - 237,150 237,150
Balance as at 31 December 2023 326,700 10,320,000 1 169,960 (2,988,075) 7,828,586
Ordinary A Sponsor Share Accumulated Total
shares Shares share based losses equity
payment
reserve
£'s £'s £'s £'s £'s £'s
Balance as at 1 July 2024 326,700 10,320,000 1 169,960 (3,136,645) 7,680,016
Total comprehensive profit for the period - - - - 66,503 66,503
Cancellation of A Shares and matching Warrants - (4,300,000) - - - (4,300,000)
Balance as at 31 December 2024 326,700 6,020,000 1 169,960 (3,070,142) 3,446,519
The Notes on pages 9 to 23 form an integral part of these Interim Financial
Statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months
ended ended
31 December 31 December
2024 2023
Note Unaudited Unaudited
£'s £'s
Operating activities
Profit for the period 66,503 237,150
Adjustments to reconcile total operating profit to net cash flows:
Finance income (172,329) (254,710)
Fair Value gain on warrant liability 13 - (254,000)
Reversal of unrealised loss on cancellation of A warrants 13 (200,000) -
Working capital adjustments:
Increase in trade and other receivables 10 (9,371) (3,001)
Decrease in trade and other payables 12 (6,685) (27,219)
Net cash flows used in operating activities (321,882) (301,780)
Investing activities
Interest received 172,329 254,710
Net cash flows used in investing activities 172,329 254,710
Financing activities
Repurchase of A shares 14 (4,300,000) -
Repurchase of A warrants 13 (700,000) -
Net cash flows used in financing activities (5,000,000) -
Net decrease in cash and cash equivalents (5,149,553) (47,070)
Cash and cash equivalents at the beginning of the period 10,054,287 10,079,604
Cash and cash equivalents at the end of the period 11 4,904,734 10,032,534
The Notes on pages 9 to 23 form an integral part of these Interim Financial
Statements.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Marwyn Acquisition Company III Limited was incorporated on 31 July 2020 in the
British Virgin Islands ("BVI") as a BVI business company (registered number
2040967) under the BVI Business Company Act, 2004. The Company was listed on
the Main Market of the London Stock Exchange on 4 December 2020 and has its
registered address at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road
Town, Tortola, VG1110, British Virgin Islands and UK establishment (BR022832)
at 11 Buckingham Street, London, WC2N 6DF.
The Company has been formed for the purpose of effecting a merger, share
exchange, asset acquisition, share or debt purchase, reorganisation or similar
business combination with one or more businesses. The Company has one
subsidiary, MAC III (BVI) Limited (together with the Company the "Group").
2. ACCOUNTING POLICIES
(a) Basis of preparation
These Condensed Consolidated Financial Statements ("Interim Financial
Statements") have been prepared in accordance with the IAS 34 Interim
Financial Reporting and are presented on a condensed basis.
The Interim Financial Statements do not include all the information and
disclosures required in the Annual Financial Statements and should be read in
conjunction with the Group's Annual Report and Financial Statements for the
year ended 30 June 2024 (the "2024 Annual Report"), which is available on the
Company's website, www.marwynac3.com (http://www.marwynac3.com) . Accounting
policies applicable to these Interim Financial Statements are consistent with
those applied in 2024 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 for the foreseeable future. The Directors have considered the
financial position of the Group and have reviewed forecasts and budgets for a
period of at least 12 months following the approval of the Interim Financial
Statements.
At 31 December 2024 the Group has net assets of £3,446,519 (30 June 2024:
£7,680,016), net assets excluding warrant liabilities of £4,832,519 (30 June
2024: £9,966,016) and a cash balance of £4,904,734 (30 June 2024:
£10,054,287). The Company has sufficient resources to continue to pursue its
investment strategy which may include effecting a merger, share exchange,
asset acquisition, share or debt purchase, reorganisation or similar business
combination with one or more businesses.
Subject to the structure of any acquisition, the Company may need to raise
additional funds to finance the acquisition in the form of equity and/or debt.
The capital structure of the Company enables it to issue different types of
shares in order to raise equity to fund an acquisition. The ability of the
Company to raise additional funds in relation to an acquisition may affect its
ability to complete that acquisition. Other factors outside of the Company's
control may also impact on the Company's ability to complete that acquisition.
The key risks relating to the Company's ability to execute its stated strategy
are set out in its 2024 Annual Report, which is available on the Company's
website.
The Company entered into a forward purchase agreement ("FPA") on 27 November
2020 with 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 2024 £12 million had been drawn down under the
FPA and therefore the Company has the ability to drawdown a further £8
million. Whilst the FPA provides a mechanism for the Company to raise
additional funds, as any drawdown is not under the exclusive control on the
Company, all cashflow and working capital forecasts have been prepared without
any further draw down on the FPA being assumed.
The Directors have considered macroeconomic backdrop, and the ongoing
operating costs expected to be incurred by the business over at least the next
12 months. Based on their review the Directors have concluded that there are
no material uncertainties relating to going concern of the Group and as such
the Interim Financial Statements have been prepared on a going concern basis,
which assumes that the Group will continue to be able to meet its liabilities
as they fall due within the next 12 months from the date of approval of the
Interim Financial Statements.
(c) New standards and amendments to International Financial Reporting
Standards
New standards and amendments to International Reporting Standards
The International Financial Reporting Standards ("IFRS") applicable to the
Interim Financial Statements of the Group for the six-month period to 31
December 2024 have been applied.
Standards issued but not yet effective
The following standards are issued but not yet effective. The Group intends to
adopt these standards, if applicable, when they become effective. It is not
expected that these standards will have a material impact on the Group.
Standard Effective date
Amendments to IAS 21 Lack of Exchangeability. 1 January 2025
Amendments IFRS 9 and IFRS 7 regarding the classification and measurement of 1 January 2026
financial instruments. *
IFRS 18 - Presentation and Disclosure of financial Statements*; 1 January 2027
IFRS 19 - Subsidiaries without Public Accountability: Disclosures. 1 January 2027
*Subject to EU endorsement
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group's Interim Financial Statements under IFRS
requires the Directors to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities. Estimates and judgements are continually evaluated and
are based on historical experience and other factors including expectations of
future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
Significant estimates and accounting judgements
Valuation of warrants
The Company has issued matching warrants for both its issues of ordinary
shares and A shares. For every share subscribed for, each investor was also
granted a warrant ("Warrant") to acquire a further share at an exercise price
of £1.00 per share (subject to a downward adjustment under certain
conditions). The Warrants are exercisable at any time until the 5(th)
anniversary of a Business Acquisition, as defined in Note 13. The Warrants are
valued at each period end date using the Black-Scholes option pricing
methodology which considers the exercise price, expected volatility, risk free
rate, expected dividends, and expected term of the Warrants.
4. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating decision-maker. As the
Group has not yet acquired an operating business, the Board of Directors
considers the Group as a whole for the purposes of assessing performance and
allocating resources, and therefore the Group has one reportable operating
segment.
5. EMPLOYEES AND DIRECTORS
The Group does not have any employees. During the six months to 31 December
2024, the Company had three serving Directors, as detailed on page 2, no
Director received remuneration under the terms of their Director service
agreements (31 December 2023: 3 directors and £Nil).
James Corsellis, Antoinette Vanderpuije, and Tom Basset have a beneficial
interest in the incentive shares issued by the Company's subsidiary as
detailed in Note 17.
6. ADMINISTRATIVE EXPENSES
Six months Six months
ended ended
31 December 31 December
2024 2023
Unaudited Unaudited
£'s £'s
Group expenses by nature
Professional support 291,955 258,879
Audit Fees 12,303 11,647
Other expenses 1,568 1,034
305,826 271,560
7. TAXATION
Six months Six months
ended ended
31 December 31 December
2024 2023
Unaudited Unaudited
£'s £'s
Analysis of tax in period
Current tax on profits for the period - -
Total current tax - -
Reconciliation of effective rate and tax charge: Six months Six months
ended ended 31 December
31 December 2024 2023
Unaudited Unaudited
£'s £'s
Profit on ordinary activities before tax 66,503 237,150
Deduction of fair value gain on warrant provision (200,000) (254,000)
Expenses not deductible for tax purposes 8,075 1,078
Loss on ordinary activities subject to corporation tax (125,422) (15,772)
Loss on ordinary activities multiplied by the rate of corporation tax in the (31,355) (3,943)
UK of 25% (2023: 25%)
Effects of:
Loss carried forward for which no deferred tax recognised 31,355 3,943
Total taxation charge - -
The Group is tax resident in the UK. As at 31 December 2024, cumulative tax
losses available to carry forward against future trading profits were
£1,391,924 (30 June 2024: £1,266,502) subject to agreement with HM Revenue
& Customs. There is currently no certainty as to future profits and no
deferred tax asset is recognised in relation to these carried forward losses.
A deferred tax asset will be recognised in accordance IAS 12 once it is
probable that the tax losses can be utilised. Under UK Law, there is no expiry
for the use of tax losses.
8. EARNINGS PER ORDINARY SHARE
Basic earnings per share ("EPS") is calculated by dividing the profit
attributable to equity holders of the company by the combined weighted average
number of ordinary shares and A shares in issue during the period. Diluted EPS
is calculated by adjusting the combined weighted average number of ordinary
shares and A shares outstanding to assume conversion of all instruments that
are potentially dilutive to the ordinary shares and A shares.
As the Company has made a profit in the period to 31 December 2024, the
Warrants are considered potentially dilutive. However, included in the
Consolidated Statement of Comprehensive Income is a £200,000 gain
representing the reversal of previously recognised unrealised losses on
revaluing to fair value since their issuance the 5 million A warrants that
were cancelled in the period. When this amount is reversed, the Group
returns to a loss making position as illustrated in the table below. This
adjustment to earnings is required under IAS 33 for the purposes of the
calculating the diluted EPS as these are required to be calculated as being
converted at the start of the year, resulting in no fair value gain being
reported. Therefore, the assumed exercise of the Warrants would also have an
anti-dilutive effect in the current year, resulting in both basic and diluted
EPS being the same, therefore, as at 31 December 2024 and 30 June 2024 the
Warrants and A Warrants are not dilutive. Please refer to Note 13 for further
information on warrants in issue.
The Company has also issued Incentive Shares as detailed in Note 17, which
may, in the future, also be dilutive to the ordinary and A shareholders. The
Incentive Shares have not been included in the calculation of diluted EPS in
the current period as per IAS 33, they should be treated as outstanding until
the date from which all necessary vesting conditions are satisfied. Incentive
shares do not become exercisable until 3 to 7 years post completion of the
platform acquisition (unless certain other events have occurred as detailed in
Note 17) and therefore, as the Company has yet to complete its platform
acquisition, the Incentive Shares are not currently dilutive.
The Company maintains different share classes, of which ordinary shares, A
shares and sponsor shares were in issue in the current and prior period. The
key difference between ordinary shares and A shares is that the ordinary
shares are traded with voting rights attached. The ordinary share and A share
classes both have equal rights to the residual net assets of the Company,
which enables them to be considered collectively as one class per the
provisions of IAS 33. The sponsor share has no distribution rights so has been
ignored for the purposes of IAS 33.
For six months For six months
ended 31 December 2024 ended 31 December 2023
Unaudited Unaudited
Basic
Profit attributable to owners of the parent (£'s) 66,503 237,150
Weighted average shares in issue 7,863,934 12,700,000
Basic profit per ordinary share (£'s) 0.0086 0.0187
Diluted
Profit attributable to owners of the parent (£'s) 66,503 237,150
Effect of reversing the unrealised loss re cancelled A warrants (200,000) (254,000)
Adjusted loss attributable to owners of the parent (£'s) (133,497) (16,850)
The adjustment to earnings of £200,000 is required under IAS 33 for the
purposes of the calculating the diluted EPS as detailed above, resulting there
being no fair value gain. Please refer to Note 13 for further information on
warrants in issue.
9. SUBSIDIARY
Marwyn Acquisition Company III Limited is the parent company of the Group, the
Group comprises of the Company and the following subsidiary as at 31 December
2024:
Company name Nature of business Country of incorporation Proportion of ordinary shares held directly by parent
MAC III (BVI) Limited Incentive vehicle British Virgin Islands 100%
The share capital of MAC III (BVI) Limited (the "Subsidiary") consists of both
ordinary shares and Incentive Shares. The Incentive Shares are non-voting and
disclosed in more detail in Note 17.
There are no restrictions on the Company's ability to access or use the assets
and settle the liabilities of the Company's subsidiary. The registered
office of MAC III (BVI) Limited is Commerce House, Wickhams Cay 1, P.O. Box
3140, Road Town, Tortola, VG1110, British Virgin Islands and its UK
Establishment address is 11 Buckingham Street, London, WC2N 6DF.
10. OTHER RECEIVABLES
As at As at
31 December 30 June
2024 2024
Unaudited Audited
£'s £'s
Amounts receivable in one year:
Prepayments 13,293 5,324
Due from related party (Note 18) - 1
VAT receivable 5,998 4,595
19,291 9,920
There is no material difference between the book value and the fair value of
the receivables. Receivables are considered to be past due once they have
passed their contracted due date. Other receivables are all current.
11. CASH AND CASH EQUIVALENTS
As at As at
31 December 30 June
2024 2024
Unaudited Audited
£'s £'s
Cash and cash equivalents
Cash at bank 4,904,734 10,054,287
4,904,734 10,054,287
Credit risk is managed on a group basis. Credit risk arises from cash and cash
equivalents and deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties with a minimum
short-term credit rating of P-1, as issued by Moody's, are accepted.
12. TRADE AND OTHER PAYABLES
As at As at
31 December 30 June
2024 2024
Unaudited Audited
£'s £'s
Amounts falling due within one year:
Trade payables 3,673 3,790
Due to related party (Note 18) 42,455 35,103
Accruals 45,378 59,298
91,506 98,191
There is no material difference between the book value and the fair value of
the trade and other payables. All trade payables are non-interest bearing and
are usually paid within 30 days.
13. WARRANT LIABLITY
Amounts falling
due within one
year
£'s
Fair value of warrants at 30 June 2023 2,413,000
Fair value movement of warrants:
Warrant liability - ordinary warrants (14,000)
Warrant liability - A warrants (240,000)
Total fair value movement (254,000)
Fair value of warrants at 31 December 2023 2,159,000
Fair value movement of warrants:
Warrant liability - ordinary warrants (7,000)
Warrant liability - A warrants (120,000)
Total fair value movement (127,000)
Fair value of warrants at 30 June 2024 2,286,000
Fair value movement of warrants:
Warrant liability - ordinary warrants -
Warrant liability - A Warrants -
Other movements:
Cancellation of A Warrants (900,000)
Total movement (900,000)
Fair value of warrants at 31 December 2024 1,386,000
On 4 December 2020, the Company issued 700,000 ordinary shares and matching
warrants at a price of £1 for one ordinary share and matching warrant. Under
the terms of the warrant instrument ("Warrant Instrument"), warrant holders
are able to acquire one ordinary share per warrant at a price of £1 per
ordinary share, subject to a downward price adjustment depending on the price
of future shares issued prior to or in conjunction with an initial
acquisition. Warrants are fully vested at the period end.
On 20 April 2021, the Company issued 12,000,000 A shares and matching warrants
at a price of £1 for one A share and matching A warrant. Under the terms of
the A warrant instrument ("A Warrant Instrument"), warrant holders are able to
acquire one ordinary share per warrant at a price of £1 per ordinary share,
subject to a downward price adjustment depending on the price of future shares
issued prior to or in conjunction with an initial acquisition. Warrants are
fully vested at the period end.
Effective 29 April 2022, both the Warrant Instrument and A Warrant Instrument
were amended such that the long stop date was extended to the fifth
anniversary of an initial acquisition by a member of the Group (which may be
in the form of a merger, share exchange, asset acquisition, share or debt
purchase, reorganisation or similar transaction) of a business ("Business
Acquisition"). Previously the warrants were exercisable for 5 years from the
date of issue.
On 7 July 2024, the Company announced that it had repurchased and cancelled
5,000,000 of its 12,000,000 unlisted A Shares of no par value and 5 million
unlisted matching A Warrants for an aggregate consideration of £5,000,000.
The Repurchase and Cancellation was carried out in accordance with the
memorandum and articles of association of the Company. The Repurchase and
Cancellation of the 5 million A Warrants resulted in a reduction in the
warrant liability of £900,000, equating to the 5 million A Warrants at their
fair value as at 30 June 2024 of £0.18 per A Warrant. The A Warrants had
been recorded at a fair value of £0.14 per A Warrant on the date of issuance,
equating to £700,000. Accordingly, a gain of £200,000 has been recognised
on the cancelation of A Warrants relating to the reversal of all previously
recognised unrealised movements on those A Warrants since the date of
issuance. This has been recorded in the statement of comprehensive income
for the period.
Warrants are accounted for as a level 3 derivative liability instruments and
are measured at fair value at grant date and revalued at each subsequent
balance sheet date. The warrants and A warrants were separately valued the
date of grant. For both the warrants and A warrants, the combined market value
of one share and one Warrant was considered to be £1, in line with the price
paid by investors. A Black-Scholes option pricing methodology was used to
determine the fair value, which considered the exercise prices, expected
volatility, risk free rate, expected dividends and expected term.
On 31 December 2024, the fair value remained at 18p per warrant, resulting in
no change to the fair value since 30 June 2024 (31 December 2023: £254,000
fair value gain). The Directors are responsible for determining the fair value
of the warrants at each reporting date, the underlying calculations are
prepared by Deloitte LLP.
The key assumptions used in determining the fair value of the Warrants are as
follows:
As at As at
31 December
30 June
2024
2024
Unaudited Audited
Combined price of a share and warrant £1 £1
Exercise price £1 £1
Expected volatility 25.0% 25.0%
Risk free rate 4.10% 4.10%
Expected dividends 0.0% 0.0%
Expected term 5(th) anniversary of the completion of a Business Acquisition 5th anniversary of the completion of a Business Acquisition
14. STATED CAPITAL
Authorised
Unlimited ordinary shares of no par value
Unlimited A shares of no par value
100 sponsor shares of no par value
As at As at
31 December
30 June
2024
2024
Unaudited Audited
£'s £'s
Issued
Ordinary shares of no par value 326,700 326,700
A shares of no par value 6,020,000 10,320,000
Sponsor share of no par value 1 1
6,346,701 10,646,701
On incorporation, the Company issued 1 ordinary share of no par value to MVI
II Holdings I LP. On 30 September 2020, it was resolved that updated
memorandum and articles ("Updated M&A") be adopted by the Company and with
effect from the time the Updated M&A be registered with the Registrar of
Corporate Affairs in the British Virgin Islands, the 1 ordinary share which
was in issue by the Company be redesignated as 1 sponsor share of no par value
(the "Sponsor Share").
On 4 December 2020, the Company issued 700,000 ordinary shares and matching
warrants at a price of £1 for one ordinary share and matching warrant. As a
result of the fair value exercise of the warrants, 14p was attributed to the
warrants and therefore each ordinary share was initially valued at 86p per
share. Costs of £275,300 directly attributable to this equity raise were
taken against stated capital during the period ended 30 June 2021.
On 20 April 2021, the Company issued 12,000,000 A shares and matching A
warrants at a price of £1 for one A share and matching A warrant. As a result
of the fair value exercise of the A warrants, 14p was attributed to the A
warrants and therefore each ordinary share was initially valued at 86p per
share. There were no costs directly attributable to the issue of these shares.
On 7 July 2024, the Company announced that it had repurchased and cancelled 5
million of its unlisted A Shares of no par value and 5 million unlisted
matching A Warrants for an aggregate consideration of £5,000,000. The A
Shares nor the A Warrants carried any voting rights and therefore the number
of voting rights in the Company was unaffected by the Repurchase and
Cancellation. The A Shares had been recorded at a value of £0.86 per A Share,
accordingly, stated capital was reduced by £4,300,000 in respect of the 5
million A Shares repurchased and cancelled.
Following the Repurchase and Cancelation, the Company has in issue:
· 700,000 ordinary shares and matching Ordinary Warrants;
· 7,000,000 A shares and matching A Warrants; and
· 1 sponsor share.
There has been no issue of any share capital in the six months ending 31
December 2024.
The ordinary shares and A shares are entitled to receive a share in any
distribution paid by the Company and a right to a share in the distribution of
the surplus assets of the Company on a winding-up. Only ordinary shares have
voting rights attached. The Sponsor Share confers upon the holder no right to
receive notice and attend and vote at any meeting of members, no right to any
distribution paid by the Company and no right to a share in the distribution
of the surplus assets of the Company on a winding-up. Provided the holder of
the Sponsor Share holds directly or indirectly 5 per cent. or more of the
issued and outstanding shares of the Company (of whatever class other than any
Sponsor Shares), they have the right to appoint one director to the Board.
The Company must receive the prior consent of the holder of the Sponsor Share,
where the holder of the Sponsor Share holds directly or indirectly 5 per cent.
or more of the issued and outstanding shares of the Company, in order to:
• Issue any further Sponsor Shares;
• issue any class of shares on a non pre-emptive
basis where the Company would be required to issue such share pre-emptively if
it were incorporated under the UK Companies Act 2006 and acting in accordance
with the Pre-Emption Group's Statement of Principles; or
• amend, alter or repeal any existing, or
introduce any new share-based compensation or incentive scheme in respect of
the Group; and
• take any action that would not be permitted (or
would only be permitted after an affirmative shareholder vote) if the Company
were admitted to the Premium Segment of the Official List.
The Sponsor Share also confers upon the holder the right to require that: (i)
any purchase of ordinary shares; or (ii) the Company's ability to amend the
Memorandum and Articles, be subject to a special resolution of members whilst
the Sponsor (or an individual holder of a Sponsor Share) holds directly or
indirectly 5 per cent. or more of the issued and outstanding shares of the
Company (of whatever class other than any Sponsor Shares) or are a holder of
incentive shares.
15. RESERVES
The following describes the nature and purpose of each reserve within
shareholders' equity:
Accumulated losses
Cumulative losses recognised in the Consolidated Statement of Comprehensive
Income.
Share based payment reserve
The share based payment reserve is the cumulative amount recognised in
relation to the equity-settled share based payment scheme as further described
in Note 17.
16. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments at the period
end:
As at As at
31 December 2024 30 June
2024
Unaudited Audited
£'s £'s
Financial assets measured at amortised cost
Cash and cash equivalents (Note 11) 4,904,734 10,054,287
Due from related party (Note 18) - 1
4,904,734 10,054,288
Financial liabilities measured at amortised cost
Trade payables (Note 12) 3,673 3,790
Due to related party (Note 18) 42,455 35,103
Accruals (Note 12) 45,378 59,298
91,506 98,191
Financial liabilities measured at FVPL
Warrant Liability (Note 13) 1,386,000 2,286,000
1,386,000 2,286,000
The fair value and book value of the financial assets and liabilities are
materially equivalent.
The Group's risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls, and
to monitor risks and adherence limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Group's
activities.
Treasury activities are managed on a Group basis under policies and procedures
approved and monitored by the Board. These are designed to reduce the
financial risks faced by the Group which primarily relate to movements in
interest rates. As the Group's assets are predominantly cash and cash
equivalents, market risk and liquidity risk are not currently considered to be
material risks to the Group.
17. SHARE-BASED PAYMENTS
Management Long Term Incentive Arrangements
The Group has put in place a Long-Term Incentive Plan ("LTIP"), to ensure
alignment between Shareholders, and those responsible for delivering the
Company's strategy and to attract and retain the best executive management
talent.
The LTIP will only reward the participants if shareholder value is created.
This ensures alignment of the interests of management directly with those of
Shareholders. As at the balance sheet date, an executive management team is
not yet in place and as such Marwyn Long Term Incentive LP ("MLTI") (in which
James Corsellis, Antoinette Vanderpuije and Tom Basset are indirectly
beneficially interested) is the only participant in the LTIP. Once an
executive management team is appointed, they will participate in the LTIP and
this will be dilutive to MLTI. Under the LTIP, A ordinary shares ("Incentive
Shares") are issued by the Subsidiary.
As at the statement of financial position date, MLTI had subscribed for
redeemable A ordinary shares of £0.01 each in the Subsidiary entitling it to
100 per cent of the incentive value.
Preferred Return
The incentive arrangements are subject to the Company's shareholders achieving
a preferred return of at least 7.5 per cent. per annum on a compounded basis
on the capital they have invested from time to time (with dividends and
returns of capital being treated as a reduction in the amount invested at the
relevant time) (the "Preferred Return"). The LTIP including the Preferred
Return are described in the prospectus available on the Company's website
(www.marwynac3.com/investors (http://www.marwynac3.com/investors) ).
Incentive Value
Subject to a number of provisions detailed below, if the Preferred Return and
at least one of the vesting conditions have been met, the holders of the
Incentive Shares can give notice to redeem their Incentive Shares for ordinary
shares in the Company ("Ordinary Shares") for an aggregate value equivalent to
20 per cent. of the "Growth", where Growth means the excess of the total
equity value of the Company and other shareholder returns over and above its
aggregate paid up share capital (20 per cent. of the Growth being the
"Incentive Value").
Grant date
The grant date of the Incentive Shares will be deemed to be the date that such
shares are issued.
Redemption / Exercise
Unless otherwise determined and subject to the redemption conditions having
been met, the Company and the holders of the Incentive Shares have the right
to exchange each Incentive Share for Ordinary Shares in the Company, which
will be dilutive to the interests of the holders of Ordinary Shares.
However, if the Company has sufficient cash resources and the Company so
determines, the Incentive Shares may instead be redeemed for cash. It is
currently expected that in the ordinary course Incentive Shares will be
exchanged for Ordinary Shares. However, the Company retains the right but not
the obligation to redeem the Incentive Shares for cash instead. Circumstances
where the Company may exercise this right include, but are not limited to,
where the Company is not authorised to issue additional Ordinary Shares or on
the winding-up or takeover of the Company.
Any holder of Incentive Shares who exercises their Incentive Shares prior to
other holders is entitled to their proportion of the Incentive Value to the
date that they exercise but no more. Their proportion is determined by the
number of Incentive Shares they hold relative to the total number of issued
shares of the same class.
Vesting Conditions and Vesting Period
The Incentive Shares are subject to certain vesting conditions, at least one
of which must be (and continue to be) satisfied in order for a holder of
Incentive Shares to exercise its redemption right.
The vesting conditions are as follows:
i. it is later than the third anniversary of the initial Business
Acquisition and earlier than the seventh anniversary of the Business
Acquisition;
ii. a sale of all or substantially all of the revenue or net assets
of the business of the Subsidiary in combination with the distribution of the
net proceeds of that sale to the Company and then to its shareholders;
iii. a sale of all of the issued ordinary shares of the Subsidiary or
a merger of the Subsidiary in combination with the distribution of the net
proceeds of that sale or merger to the Company's shareholders;
iv. where by corporate action or otherwise, the Company effects an
in-specie distribution of all or substantially all of the assets of the Group
to the Company's shareholders;
v. aggregate cash dividends and cash capital returns to the
Company's Shareholders are greater than or equal to aggregate subscription
proceeds received by the Company;
vi. a winding up of the Company;
vii. a winding up of the Subsidiary; or
viii. a sale, merger or change of control of the Company.
If any of the vesting conditions described in paragraphs (ii) to (viii) above
are satisfied before the third anniversary of the initial acquisition, the A
Shares will be treated as having vested in full.
Holding of Incentive Shares
MLTI holds Incentive Shares entitling them to aggregate to 100 per cent. of
the Incentive Value. Any future management partners or senior executive
management team members receiving Incentive Shares will be dilutive to the
interests of existing holders of Incentive Shares, however the share of the
Growth of the Incentive Shares in aggregate will not increase.
The following shares issued on 25 November 2020 remained in issue at 31
December 2024 and 30 June 2024:
Nominal Price Issue price per A ordinary share £'s Number of A ordinary shares Unrestricted market value at grant date £'s IFRS 2 Fair value £'s
Marwyn Long Term Incentive LP £0.01 7.50 2,000 15,000 169,960
Valuation of Incentive Shares
Valuations were performed by Deloitte LLP using a Monte Carlo model to
ascertain the unrestricted market value and the fair value at grant date.
Details of the valuation methodology and estimates and judgements used in
determining the fair value are noted herewith and were in accordance with IFRS
2 at grant date.
There were significant estimates and assumptions used in the valuation of the
Incentive Shares at grant date. Management has considered at the grant date,
the probability of a successful first Business Acquisition by the Company and
the potential range of value for the Incentive Shares, based on the
circumstances on the grant date.
The fair value of the Incentive Shares granted under the scheme was calculated
using a Monte Carlo model with the following inputs:
Issue date Share designation at balance sheet date Volatility Risk-free rate Expected term* (years)
25 November 2020 A Shares 25% 0.0% 7.0
*The expected term assumes that the Incentive Shares are exercised 7 years
post acquisition.
The Incentive Shares are subject to the Preferred Return being achieved, which
is a market performance condition, and as such has been taken into
consideration in determining their fair value. The model incorporates a range
of probabilities for the likelihood of a Business Acquisition being made of a
given size.
Expense related to Incentive Shares
There are no service conditions attached to the MLTI shares and as result the
fair value at grant date of £169,960, less the subscription price of £15,000
(a net amount of £154,960) was expensed to the profit and loss account on
issue, with the total fair value being recorded in the share-based payment
reserve.
18. RELATED PARTIES
James Corsellis, Antoinette Vanderpuije and Tom Basset have served as
directors of the Company during the period. Funds managed by Marwyn Investment
Management LLP ("MIMLLP"), of which James Corsellis is a managing partner and
Antoinette Vanderpuije and Tom Basset are both partners, hold 75 per cent. of
the Company's issued Ordinary Shares and Warrants and 100 per cent. of the A
Shares and A Warrants at the period end date. The £1 due for the Sponsor
Share was paid during the period (30 June 2024: unpaid).
James Corsellis, Tom Basset, and Antoinette Vanderpuije have a beneficial
interest in the Incentive Shares through their indirect interest in MLTI which
owns 2,000 A ordinary shares in the capital of MAC III (BVI) Limited which is
disclosed in Note 17.
James Corsellis is the managing partner of Marwyn Capital LLP ("MCLLP"), and
Antoinette Vanderpuije and Tom Basset are also both partners. MCLLP provides
corporate finance support, company secretarial, administration and accounting
services to the Company. On an ongoing basis a monthly fee of £26,175
(£25,000 up to 31 December 2023) per calendar month was charged for the
provision of the corporate finance services and managed services support is
charged on a time spent basis. The total amount charged in the period ended 31
December 2024 by MCLLP for services was £198,310 (31 December 2023:
£182,690) and they had incurred expenses on behalf of the Company of £16,567
(31 December 2023: £21,423) and of this £42,455 (30 June 2024: £31,103) was
owed to MCLLP at the period end.
On 7 July 2024, the Company announced that it had repurchased and cancelled 5
million of its unlisted A Shares of no par value and 5 million unlisted
matching A Warrants for an aggregate consideration of £5,000,000 that were
previously issued to Marwyn Value Investors II LP. The Repurchase and
Cancellation was carried out in accordance with the memorandum and articles of
association of the Company. The repurchase and cancellation of the 5 million A
Warrants resulted in a gain of £200,000 relating to the reversal of all
previously recognised unrealised losses on revaluing the 5 million A Warrants
to fair value at each preceding period end.
19. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding at 31 December
2024 (31 December 2023: £Nil) which would require disclosure or adjustment in
these Interim Financial Statements.
20. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would require
disclosure or adjustment to these Interim Financial Statements.
ADVISERS
Company Secretary Company Broker
Antoinette Vanderpuije Zeus Capital Limited
11 Buckingham Street 24 Martin Lane
London London
WC2N 6DF EC4R 0DR
Email: MAC3@marwyn.com
English legal advisers to the Company Assistant Company Secretary
Travers Smith LLP Conyers Trust Company (BVI) Limited
10 Snow Hill Commerce House
London Wickhams Cay 1
EC1A 2AL Road Town
Tortola
British Virgin Islands
Depository BVI legal advisers to the Company
MUFG Corporate Markets Trustees (UK) Limited Conyers Dill & Pearman
Central Square Commerce House
29 Wellington Street Wickhams Cay 1
Leeds Road Town
LS1 4DL Tortola
British Virgin Islands
VG1110
Independent auditor Registrar
Baker Tilly Channel Islands Limited MUFG Corporate Markets (Guernsey) Limited
2nd Floor, Lime Grove House Mont Crevelt House
Green Street Bulwer Avenue
St Helier St. Sampson
Jersey Guernsey
JE2 4UB GY2 4LH
Registered Agent
Conyers Trust Company (BVI) Limited
Commerce House
Wickhams Cay 1
Road Town
Tortola
British Virgin Islands
VG1110
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