TIDMMACA
RNS Number : 4592P
MAC Alpha Limited
10 October 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF
THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE
UNLAWFUL TO DO SO
LEI: 254900LOBYWJWYSAB947
MAC Alpha Limited
(the "Company")
Publication of the Annual Report and Financial Statements for
the year ended 30 June 2023
The Company announces the publication of its Annual Report and
Financial Statements for the year ended 30 June 2023.
The Annual Report and Financial Statements are also available on
the 'Shareholder Documents' page of the
Company's website at www.mac-alpha.com .
Enquiries:
Company Secretary
Antoinette Vanderpuije - 020 7004 2700
MAC ALPHA LIMITED
Annual Report and Audited Consolidated Financial Statements
For the year ended 30 June 2023
MANAGEMENT REPORT
We present to shareholders the audited consolidated financial
statements of MAC Alpha Limited (the "Company") for the year ended
30 June 2023 (the "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 year 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 total comprehensive loss for the year to 30 June
2023 was GBP323,463 (period from incorporation to 30 June 2022:
GBP266,043). Of the costs incurred in the year, GBP15,798 (period
from incorporation to 30 June 2022: GBP61,872) relates to
non-recurring project costs. During the year, the Company raised
GBP600,000 (period from incorporation to 30 June 2022: GBP700,000)
through the issue of equity (excluding expenses) and held a cash
balance at 30 June 2023 of GBP554,446 (2022: GBP282,244). The Group
has not yet acquired an operating business and as such is not yet
income generating.
Directors
The Directors of the Company who served during the year are:
James Corsellis (Chairman);
Tom Basset (Non-Executive Director) (appointed 6 November
2022);
Antoinette Vanderpuije (Non-Executive Director) (appointed 6
November 2022); and
Mark Brangstrup Watts (Executive Director) (resigned 6 November
2022).
Directors' Biographies
James Corsellis
James brings extensive public company experience as well as
management and corporate finance expertise across a range of
sectors and an extensive network of relationships with
co-investors, advisers and other business leaders.
Previously James has served as a director of the following
companies: a non-executive director of BCA Marketplace Limited
(formerly BCA Marketplace Plc) from July 2014 to December 2017,
Advanced Computer Software from October 2006 to August 2008,
non-executive chairman of Entertainment One Limited from January
2007 to March 2014 and remaining on the board as a non-executive
director until July 2015, non-executive director of Breedon
Aggregates Limited from March 2009 to July 2011 and as CEO of
icollector Plc from 1994-2001 amongst others. James was educated at
Oxford Brookes University, the Sorbonne and London University.
James is currently the managing partner of Marwyn Capital LLP
and Marwyn Investment Management LLP, an executive director of
Silvercloud Holdings Limited, the chairman of Marwyn Acquisition
Company III Limited, and a director of 450 Plc, Marwyn Acquisition
Company II Limited and Plamer Street Limited.
Tom Basset
Tom has extensive experience working across a range of sectors
in the origination and assessment of new investment opportunities,
transaction execution, coordinating capital market and M&A
processes and providing strategic corporate advice to management
teams. Tom joined Marwyn in 2010, where he now leads the Investment
Team and is also a member of the Investment Committee. Prior to
Marwyn, Tom spent six years at Deloitte across the Assurance &
Advisory and Private Equity Transaction Services groups. Tom is a
qualified Chartered Accountant and graduated from Durham University
with a BA (Hons) in Economics.
Tom is a non-executive director of 450 plc and Marwyn
Acquisition Company III limited and a director of Silvercloud
Holdings Limited.
Antoinette Vanderpuije
Antoinette has been a partner of the Marwyn group for over ten
years and leads the Finance, Markets and Regulation Team. She has
extensive M&A and board experience with a particular focus on
corporate governance, regulation and listing requirements,
transaction tax structuring and incentive planning. Antoinette has
supported numerous private and public companies with their
day-to-day finance, company secretarial and operational
requirements and worked on numerous U.K. and cross border M&A
transactions in sectors as varied as online sales, transport,
media, chemicals and manufacturing and distribution.
Antoinette is also a member of Marwyn's Investment Committee and
previously ran Marwyn's award-winning in-house administration
business.
Antoinette previously worked in the finance team at Arcadia
Group and prior to that with Bourner Bullock Chartered Accountants.
She is a Chartered Accountant, a Chartered Tax Advisor and holds a
BA from University College London.
Antoinette is a non-executive director of Marwyn Acquisition
Company III Limited and a director of Silvercloud Holdings
Limited.
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.
Key Performance Indicators
The Company has not yet acquired a trading business and
therefore no key performance indicators have been set as it is
inappropriate to do so.
Stated Capital
Details of the share capital of the Company during the period
are set out in note 12 to the Financial Statements.
On 24 December 2021 the Company issued 700,000 ordinary shares
and matching warrants for a total price of GBP700,000. 90% of the
ordinary shares and matching warrants were issued to an entity
managed by Marwyn Investment Management LLP ("MIM LLP") and these
are still held by this entity as at the date of this report. The
remaining 10% were issued to third party investors, including a
number of senior executive managers of previous successful
acquisition companies launched by Marwyn.
On 5 March 2023, pursuant to the forward purchase agreement
("FPA") with Marwyn Value Investors II LP, the Company raised
GBP600,000 through the issue of 600,000 A shares ("A Shares") (with
Class A Warrants ("A Warrants") being issued on the basis of one
Class A Warrant per A Share) at a price of GBP1 per share. The A
Shares are ordinary equity shares with the same economic rights as
the Company's ordinary shares but without voting rights. They are
convertible into ordinary shares on a one-for-one basis at the time
at which the Company next publishes a prospectus or equivalent
document in relation to a future listing of shares.
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 comply with the UK Corporate Governance Code.
Risks
A robust risk assessment was carried out by the Directors of the
Company, along with its advisers, in preparation for the Company's
IPO on 24 December 2021 and the Directors have identified a wide
range of risks, which are set out in the Company's prospectus dated
24 December 2021. The risks relevant to the Company are formally
reviewed by the Board on at least an annual basis, with more
frequent updates being made as and when circumstances require. The
Company's prospectus is available on the Company's website:
www.macalpha.com .
The Company's risk management framework incorporates a risk
assessment that identifies and assesses the strategic, operational
and financial risks facing the business and mitigating controls.
The risk assessment is documented through a risk register which
categorises the key risks faced by the business into:
-- Business risks;
-- Shareholder risks;
-- Financial and procedural risks; and
-- Risks associated with the acquisition process.
The risk assessment identifies the potential impact and
likelihood of each of the risks detailed on the risk register and
mitigating factors/actions have also been identified.
The Company's risk management process includes both formal and
informal elements. The size of the Board and the frequency in which
they interact ensures that risks, or changes to the nature of the
Company's existing risks, are identified, discussed and analysed
quickly. The Company has a formal framework in place to manage the
review, consideration and formal approval of the risk register,
including the risk assessment.
The Group's only significant asset is cash. As at the balance
sheet date the Group's cash balance was GBP554,446 (2022:
GBP282,244). Price, credit, liquidity and cashflow risk are not
considered to be significant due to the simple nature of the
Company's assets and liabilities and the current activities
undertaken by the Group. 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. The
Directors have reviewed the risk of holding a singular
concentration of assets as predominantly all credit assets held are
cash and cash equivalents, however, do not deem this a material
risk. The risk is mitigated by all cash and cash equivalents being
held with Barclays Bank plc, which holds a short-term credit rating
of P-1, as issued by Moody's. The Directors have set out below the
principal risks faced by the business. These are the risks the
Directors consider to be most relevant to the Company based on its
current status. The risks referred to below do not purport to be
exhaustive and are not set out in any particular order of
priority.
Key risk Explanation
The Company The Company does not currently have sufficient
requires further cash to pursue its stated investment strategy.
funding to On 16 December 2021, the Company entered into
pursue its a FPA with Marwyn Value Investors II LP and Marwyn
stated investment General Partner II Limited, under which the Company
strategy. has the ability to drawdown up to GBP20 million,
which may be drawn down for working capital purposes
and to fund due diligence on potential acquisition
targets, through the issue of unlisted A shares.
Any drawdown under the FPA is subject to the prior
approval of Marwyn Investment Management LLP (the
manager of the Marwyn Fund) and the satisfaction
of conditions precedent. On 5 March 2023, pursuant
to the FPA the Company drew down GBP600,000.
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The Company There is a risk that the Company may incur substantial
could incur legal, financial and advisory expenses arising
costs for from unsuccessful transactions which may include
transactions public offer and transaction documentation, legal,
that may ultimately accounting and other due diligence which could
be unsuccessful. have a material adverse effect on the business,
financial condition, results of operations and
prospects of the Company.
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The Company The Company's future success is dependent upon
may not be its ability to not only identify opportunities
able to complete but also to execute a successful acquisition.
an acquisition There can be no assurance that the Company will
and may face be able to conclude agreements with any target
significant business and/or shareholders in the future and
competition failure to do so could result in the loss of an
for acquisition investor's investment. In addition, the Company
opportunities. may not be able to raise the additional funds
required to acquire any target business, fund
future operating expenses after the initial twelve
months, or incur the expense of due diligence
for the pursuit of acquisition opportunities in
accordance with its investment objective.
There may also be significant competition for
some, or all, of the acquisition opportunities
that the Company may explore. Such competition
may for example come from strategic buyers, sovereign
wealth funds, special purpose acquisition companies
and public and private investment funds, many
of which are well established and have extensive
experience in identifying and completing acquisitions.
A number of these competitors may possess greater
technical, financial, human and other resources
than the Company. Therefore, the Company may identify
an investment opportunity in respect of which
it incurs costs, for example through due diligence
and/or financing, but the Company cannot assure
investors that it will be successful against such
competition. Such competition may cause the Company
to incur significant costs but be unsuccessful
in executing an acquisition.
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The success The Company's return will be reliant upon the
of the Company's performance of the assets acquired and the Company's
investment investment objective from time to time. The success
objective of the investment objective depends on the Directors'
is not guaranteed. ability to identify investments in accordance
with the Company's strategy and to interpret market
data and predict market trends correctly. No assurance
can be given that the strategy to be used will
be successful under all or any market conditions
or that the Company will be able to generate positive
returns for shareholders. If the investment objective
is not successfully implemented, this could adversely
impact the business, development, financial condition,
results of operations and prospects of the Company.
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Directors Interests
The Directors have no direct interests in the ordinary shares of
the Company. The Directors have interests in the Company's long
term incentive plan, as detailed in note 15 to the Financial
Statements. James Corsellis is the managing partner of Marwyn
Investment Management LLP ("MIM LLP"), and Antoinette Vanderpuije
and Tom Basset are partners in MIM LLP which manages 95% per cent
of the ordinary share capital and matching warrants and 100% of the
ordinary share capital and matching A warrants. James Corsellis is
also the managing partner of Marwyn Capital LLP ("MC LLP"), and
Antoinette Vanderpuije and Tom Basset are partners in MC LLP, a
firm which provides corporate finance, company secretarial and
ad-hoc managed services support to the Company.
Details of the related party transactions which occurred during
the year are disclosed in note 16 to the Financial Statements, save
for the participation in the Company's long term incentive plan as
disclosed in note 15 to the Financial Statements. There were no
loans or guarantees granted or provided by the Company and/or any
of its subsidiaries to or for the benefit of any of the
Directors.
Statement of Going Concern
The Financial Statements are prepared on a going concern basis,
which assumes the Group will continue to be able to meet its
liabilities as they fall due for the foreseeable future. The Group
had cash resources of GBP554,446 (2022: GBP282,244) at 30 June 2023
and net assets of GBP502,011 (2022: GBP225,474). The Directors have
considered the financial position of the Group and reviewed
forecasts and budgets for a period of at least 12 months following
the approval of the Financial Statements.
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 GBP20 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. On 5 March 2023, the Company drew down
GBP600,000 under the FPA and accordingly issued 600,000 A shares
and 600,000 matching A warrants as set out in the FPA.
The Directors have reviewed the working capital model for the
Group, which includes the drawdown under the FPA, in detail and are
satisfied that the Company will have sufficient cash to meet its
ongoing operating costs. Subject to the structure of an
acquisition, the Company will likely need to raise additional funds
for an acquisition in the form of equity and/or debt.
Based on this review the Directors are satisfied that at the
date of approval of the Financial Statements, the Company and the
Group have sufficient resources to continue to pursue its stated
strategy.
Outlook
The Directors continue to identify and develop opportunities
with potential management partners, across a variety of sectors,
and believe the listed status and structure of the Company position
it well to capitalise on these opportunities in the current market
environment.
RESPONSIBILTY STATEMENT
The Directors are responsible for preparing the Financial
Statements in accordance with applicable laws and regulations,
including the BVI Business Companies Act, 2004. The Directors have
prepared the Financial Statements for the year to 30 June 2023,
which give a true and fair view of the state of affairs of the
Group and the profit or loss of the Group for that year.
The Directors have acted honestly and in good faith and in what
the Directors believe to be in the best interests of the
Company.
The Directors have chosen to use International Financial
Reporting Standards as adopted by the European Union ("EU adopted
IFRS" or "IFRS") in preparing the Financial Statements.
International Accounting Standard 1 requires that financial
statements present fairly for each financial period the group's
financial position, financial performance and cash flows. This
requires the faithful presentation of the effects of transactions,
other events and conditions in accordance with the definitions and
recognition criteria for assets, liabilities, income and expenses
set out in the International Accounting Standards Board's
"Framework for the preparation and presentation of financial
statements". In virtually all circumstances, a fair presentation
will be achieved by compliance with all applicable IFRS.
A fair presentation also requires the Directors to:
-- select consistently and apply appropriate accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- make judgements and accounting estimates that are reasonable and prudent;
-- provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance;
-- state that the Group has complied with IFRS, subject to any
material departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are also required to prepare financial statements
in accordance with the rules of the London Stock Exchange for
companies trading securities on the Stock Exchange.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Group, for safeguarding the assets, for
taking reasonable steps for the prevention and detection of fraud
and other irregularities and for the preparation of financial
statements.
Financial information is published on the Group's website. The
maintenance and integrity of this website is the responsibility of
the Directors; the work carried out by the auditor does not involve
consideration of these matters and, accordingly, the auditor
accepts no responsibility for any changes that may occur to the
financial statements after they are presented initially on the
website. Legislation in the British Virgin Islands governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Directors' Responsibilities Pursuant to DTR4
In compliance with the Listing Rules of the London Stock
Exchange, the Directors confirm to the best of their knowledge:
-- The Financial Statements have been prepared in accordance
with IFRS and give a true and fair view of the assets, liabilities,
financial position and loss of the Group; and
-- The management report includes a fair review of the
development and performance of the business and the financial
position of the Group, together with a description of the principal
risks and uncertainties that it faces.
Independent Auditor
Baker Tilly Channel Islands Limited ("BTCI") remains the
Company's independent auditor for the year ended 30 June 2023 and
has expressed its willingness to continue to act as auditor to the
Group.
Disclosure of Information to Auditor
Each of the Directors in office at the date the Report of the
Directors is approved, whose names and functions are listed in the
Report of the Directors confirm that, to the best of their
knowledge:
-- the Financial Statements, which have been prepared in
accordance with EU adopted IFRS, present fairly the assets,
liabilities, financial position and loss of the Group;
-- the Report of the Directors includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that it faces;
-- so far as they are aware, there is no relevant audit
information of which the Group's auditor is unaware; and
-- they have taken all the steps that they ought to have taken
as a Director in order to make themself aware of any relevant audit
information and to establish that the Group's auditor is aware of
that information.
This Directors' Report was approved by the Board of Directors on
9 October 2023 and is signed on its behalf.
By Order of the Board
James Corsellis
Chairman
9 October 2023
INDEPENT AUDITOR'S REPORT
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF MAC ALPHA
LIMITED
Opinion
We have audited the consolidated financial statements of MAC
Alpha Limited (the "Company" and, together with its subsidiary, MAC
Alpha (BVI) Limited, the "Group"), which comprise the consolidated
statement of financial position as at 30 June 2023, and the
consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash
flows for the year then ended, 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 30 June 2023, and of its consolidated
financial performance and its consolidated cash flows for the year
then ended in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs); and
-- have been prepared in accordance with the requirements of the
BVI Business Company Act 2004, as amended.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in
Jersey, including the FRC's Ethical Standard, and we have fulfilled
our other ethical responsibilities in accordance with these
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
judgement, were of most significance in our audit of the
consolidated financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of
our 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.
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================= ================
Our Application of Materiality
Materiality for the consolidated financial statements as a whole
was set at GBP20,000 (PY: GBP5,600), determined with reference to a
benchmark of net assets, of which it represents 4% (PY: 2.5%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material
amount across the consolidated financial statements as a whole.
Performance materiality was set at 70% (PY: 70%) of materiality
for the consolidated financial statements as a whole, which equates
to GBP14,000 (PY: GBP3,950). We applied this percentage in our
determination of performance materiality because we did not
identify any factors indicating an elevated level of risk.
We reported to the Audit Committee any uncorrected omissions or
misstatements exceeding GBP1,000 (PY: GBP282), in addition to those
that warranted reporting on qualitative grounds.
The work on all the components was performed by the Group audit
team.
Conclusions relating to Going Concern
In auditing the consolidated financial statements, we have
concluded that the Directors' use of the going concern basis of
accounting in the preparation of the consolidated financial
statements is appropriate.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and Company's ability to continue as a going concern for a
period of at least twelve months from when the consolidated
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Other Information
The other information comprises the information included in the
annual report other than the consolidated financial statements and
our auditor's report thereon. The Directors are responsible for the
other information contained within the annual report. Our opinion
on the consolidated financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. 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 course of the audit, or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in
the consolidated financial statements themselves. If, based on the
work performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the Directors
As explained more fully in the Directors' responsibilities
statement set out on page 8 and 9, the Directors are responsible
for the preparation of consolidated financial statements that give
a true and fair view in accordance with IFRSs, and for such
internal control as the Directors determine is necessary to enable
the preparation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the
Directors are 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 management either intends to liquidate the
Company or to cease operations, or has no realistic alternative but
to do so.
The Directors are responsible for overseeing the Group's
financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements
Our objectives 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
an auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs 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.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below:
-- Enquiry of management to identify any instances of
non-compliance with laws and regulations, including actual,
suspected or alleged fraud;
-- Reading minutes of meetings of the Board of Directors;
-- Review of legal invoices;
-- Review of management's significant estimates and judgements for evidence of bias;
-- Review for undisclosed related party transactions;
-- Using analytical procedures to identify any unusual or unexpected relationships; and
-- Undertaking journal testing, including an analysis of manual
journal entries to assess whether there were large and/or unusual
entries pointing to irregularities, including fraud.
The Company is required to include these financial statements in
an annual financial report prepared using the single electronic
reporting format specified in the TD ESEF Regulation. The auditor's
report provides no assurance over whether the annual financial
report has been prepared in accordance with that format.
A further description of the auditor's responsibilities for the
audit of the financial statements is located at the Financial
Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor's report.
Other Matters which we are Required to Address
We were appointed by MAC Alpha Limited to audit the consolidated
financial statements. Our total uninterrupted period of engagement
is 2 years.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Group and we remain independent of the
Group in conducting our audit. Our audit opinion is consistent with
the additional report to the audit committee in accordance with
ISAs.
Use of this Report
This report is made solely to the Members of the Company, as a
body, in accordance with our letter of engagement dated 5 September
2023. Our audit work has been undertaken so that we might state to
the Members those matters we are required to state to them in an
auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and its Members, as a body, for our
audit work, for this report, or for the opinions we have
formed.
Sandy Cameron
For and on behalf of Baker Tilly Channel Islands Limited
Chartered Accountants
St Helier, Jersey
Date: 9 October 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Period ended
30 June 30 June
2023 2022
Note GBP's GBP's
Administrative expenses 6 (331,885) (266,043)
----------
Total operating loss (331,885) (266,043)
Finance income 8,422 -
----------
Loss before income taxes (323,463) (266,043)
Income tax - -
---------- ============
Loss for the year / period (323,463) (266,043)
Total other comprehensive income - -
----------
Total comprehensive loss for the
year / period (323,463) (266,043)
========== ============
Loss per ordinary share GBP's GBP's
Basic and diluted 7 (0.3625) (0.5297)
The Group's activities derive from continuing operations.
The notes on pages 19 to 31 form an integral part of these
Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
30 June 2023 30 June 2022
Assets Note GBP's GBP 's
Current assets
Other receivables 9 6,621 9,602
Cash and cash equivalents 10 554,446 282,244
------------- -------------
Total current assets 561,067 291,846
Total assets 561,067 291,846
============= =============
Equity and liabilities
Equity
Ordinary shares 12 319,000 319,000
A shares 12 498,000 -
Sponsor share 12 1 1
Warrant reserve 12, 13 105,000 105,000
Warrant reserve A shares 12, 13 102,000 -
Share-based payment reserve 13, 15 67,516 67,516
Accumulated losses 13 (589,506) (266,043)
------------- -------------
Total equity 502,011 225,474
Current liabilities
Trade and other payables 11 59,056 66,372
-------------
Total liabilities 59,056 66,372
Total equity and liabilities 561,067 291,846
============= =============
The notes on pages 19 to 31 form an integral part of these
Financial Statements.
The Financial Statements were issued and approved by the Board
of Directors on 9 October 2023 and were signed on its behalf
by:
James Corsellis Tom Basset
Chairman Non-Executive Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Warrant based
Ordinary Sponsor Warrant reserve payment Accumulated Total
shares A shares share reserve A shares reserve losses equity
---------- ----------- ---------- --------- ----------- --------- ------------ ----------
GBP's GBP's GBP's GBP's GBP's GBP's GBP's GBP's
Balance at - - - - - - - -
incorporation
Issuance of 1
ordinary share 1 - - - - - - 1
Redesignation
of 1 ordinary
share (1) - 1 - - - - -
Issuance of 700,000
ordinary shares
and matching
warrants 595,000 - - 105,000 - - - 700,000
Share issue costs (276,000) - - - - - - (276,000)
Total comprehensive
loss for the
period - - - - - - (266,043) (266,043)
Share-based payment
charge - - - - - 67,516 - 67,516
----------- ----------- ---------
Balance at 30
June 2022 319,000 - 1 105,000 - 67,516 (266,043) 225,474
========== =========== ========== ========= =========== ========= ============ ==========
Share
Warrant based
Ordinary Sponsor Warrant reserve payment Accumulated Total
shares A shares share reserve A shares reserve losses equity
--------- ----------- ---------- --------- ----------- --------- ------------ ----------
GBP's GBP's GBP's GBP's GBP's GBP's GBP's GBP's
Balance at 1
July 2023 319,000 - 1 105,000 - 67,516 (266,043) 225,474
Issuance of 600,000
A shares and
matching
warrants - 498,000 - - 102,000 - - 600,000
Total comprehensive
loss for the year - - - - - - (323,463) (323,463)
---------
Balance at 30
June 2023 319,000 498,000 1 105,000 102,000 67,516 (589,506) 502,011
========= =========== ========== ========= =========== ========= ============ ==========
The notes on pages 19 to 31 form an integral part of these
Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended Period ended
30 June 30 June
2023 2022
Note GBP's GBP's
Operating activities
Loss for the year / period (323,463) (266,043)
Adjustments to reconcile total operating
loss to net cash flows:
Finance income (8,422) -
Share-based payment expense 15 - 52,516
Working capital adjustments:
Decrease / (Increase) in other receivables 2,981 (9,602)
(Decrease) / Increase in trade and other
payables (7,316) 66,372
Net cash flows used in operating activities (336,220) (156,757)
---------- ------------
Investing activities
Interest received 8,422 -
---------- ------------
Net cash flows received from investing
activities 8,422
---------- ------------
Financing activities
Proceeds from issue of A shares and matching
A warrants 12 600,000 -
Proceeds from issue of ordinary shares,
matching warrants and 1 sponsor share 12 - 700,001
Proceeds from issue of incentive shares 15 - 15,000
Costs directly attributable to equity
raise 12 - (276,000)
Net cash flows received from financing
activities 600,000 439,001
---------- ------------
Net increase in cash and cash equivalents 272,202 282,244
Cash and cash equivalents at the beginning
of the year / period 282,244 -
---------- ------------
Cash and cash equivalents at the end
of the year / period 10 554,446 282,244
========== ============
The notes on pages 1 9 to 31 form an integral part of these
Financial Statements.
NOTES TO THE 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,
VG1110, British Virgin Islands.
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
The Financial Statements for the year ended 30 June 2023 have
been prepared in accordance with International Financial Reporting
Standards and IFRS Interpretations Committee interpretations as
adopted by the European Union (collectively, "EU adopted IFRS" or
"IFRS") and are presented in British pounds sterling, which is the
presentational currency of the Group and the functional currency
and presentational currency of the Company.
The Financial Statements have been prepared under the historical
cost basis. The comparative reporting period represents the period
from incorporation, being 11 October 2021, to 30 June 2022 and
accordingly the periods are not directly comparable.
The principal accounting policies adopted in the preparation of
the Financial Statements are set out below. The policies have been
consistently applied throughout the period presented.
(b) Going concern
The Financial Statements are prepared on a going concern basis,
which assumes the Group will continue to be able to meet its
liabilities as they fall due for the foreseeable future. The Group
had cash resources of GBP554,446 (2022: GBP282,244) at 30 June 2023
and net assets of GBP502,011 (2022: GBP225,474). The Directors have
considered the financial position of the Group and reviewed
forecasts and budgets for a period of at least 12 months following
the approval of the Financial Statements.
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 GBP20 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. On 5 March 2023, the Company drew down
GBP600,000 under the FPA and accordingly issued 600,000 A shares
and 600,000 matching A warrants as set out in the FPA.
The Directors have reviewed the working capital model for the
Group, which includes the drawdown under the FPA, in detail and are
satisfied that the Company and the Group will have sufficient cash
to meet its ongoing operating costs. Subject to the structure of an
acquisition, the Company will likely need to raise additional funds
for an acquisition in the form of equity and/or debt.
Based on this review the Directors are satisfied that at the
date of approval of the Financial Statements, the Company and the
Group have sufficient resources to continue to pursue its stated
strategy.
(c) New standards and amendments to International Financial Reporting Standards
Standards, amendments and interpretations 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
Extension of temporary exemption of applying IFRS 1 January
9 (Amendments to IFRS 4); 2023
Amendments to IFRS 17 Insurance contracts; 1 January
2023
Disclosure of accounting policies (Amendments to 1 January
IAS 1); 2023
Definition of accounting estimates (Amendments 1 January
to IAS 8); 2023
Deferred Tax relating to Assets and Liabilities 1 January
arising from a Single Transaction (Amendments to 2023
IAS 12);
International Tax Reform - Pillar Two Model Rules 1 January
(Amendments to IAS 12); 2023
Initial Application of IFRS 17 and IFRS 9 - Comparative 1 January
Information Amendment to IFRS 17); 2023
Supplier Finance Arrangements (Amendments to IAS 1 January
7 and IFRS 7)*; 2024
Non-current Liabilities with Covenants (Amendments 1 January
to IAS 1); 2024
Amendment to IFRS 16 Leases: Lease Liability in 1 January
a sale & leaseback; 2024
Amendments to IAS 1 Presentation of Financial Statements: 1 January
Classification of Liabilities as Current or Non-current*;and 2024
Amendments to IAS 21 Lack of exchangeability. 1 January
2025
* Subject to EU endorsement
(d) Basis of consolidation
Subsidiaries are entities controlled by the Company. Control
exists when 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 over the entity. The
financial information of subsidiaries is fully consolidated in
these Financial Statements from the date that control commences
until the date that control ceases.
Intragroup balances, and any gains and losses or income and
expenses arising from intragroup transactions, are eliminated in
preparing these Financial Statements.
(e) 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.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances at banks.
(g) Stated capital
Ordinary shares, A shares and sponsor shares are classified as
equity . Incremental costs directly attributable to the issue of
new shares are recognised in equity as a deduction from the
proceeds.
(h) Corporation tax
There is no corporate, income or other tax of the British Virgin
Islands imposed by withholding or otherwise on BVI companies. The
Company will therefore not have any tax liabilities or deferred tax
in the BVI. The Company is exempt from all provisions of the Income
Tax Act of the British Virgin Islands.
(i) Loss per ordinary share
The Group presents basic earnings per ordinary share ("EPS")
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is calculated by
adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all potential dilutive ordinary
shares.
(j) Share based payments
The A ordinary shares in MAC Alpha (BVI) Limited (the "Incentive
Shares"), represent equity-settled share-based payment arrangements
under which the Company receives services as a consideration for
the additional rights attached to these equity shares, over and
above their nominal price.
Equity-settled share-based payments to Directors and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. Fair value is determined
using an appropriate valuation technique, further details of which
are given in note 15. The fair value is expensed, with a
corresponding increase in equity, on a straight-line basis from the
grant date to the expected exercise date. Where the equity
instruments granted are considered to vest immediately, the
services are deemed to have been received in full, with a
corresponding expense and increase in equity recognised at grant
date.
(k) Warrants
The Company has issued Ordinary shares and with matching
warrants and A shares and with matching A Warrants. Under the terms
of the warrant instruments, warrant holders are able to acquire one
corresponding share per warrant at a price of GBP1 per share.
Warrants are accounted for as equity instruments under IAS 32 and
are measured at fair value at grant date. Fair value of the
warrants has been calculated using a Black Scholes option pricing
methodology and details of these estimates and judgements used in
determining fair value of the warrants are set out in note 3.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Group's Financial Statements under IFRS
requires the Directors to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
Critical 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 GBP1 per ordinary share.
The Warrants are exercisable at any time until five years after the
IPO date, being 24 December 2021. Further on 5 March 2023, the
Company issued 600,000 A shares and matching Class A Warrants (" A
Warrants ") being issued on the basis of one Class A Warrant per A
Share at a price of GBP1 per share. The 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 GBP1 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.
Key sources of estimation uncertainty
Valuation of incentive shares
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 Group 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 and related share-based payment
expense was calculated using a Monte Carlo valuation model. A
summary of the terms is set out in note 15.
Valuation of warrants
The Warrants were valued using the Black Scholes option pricing
methodology which considered 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 year ended 30
June 2023, the Company had four serving directors as detailed on
page 3, no director received remuneration under the terms of their
director service agreements (2022: 2 directors and GBPnil). 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
Year ended Period ended
30 June 30 June
2023 2022
GBP's GBP's
Group expenses by nature
Professional support 288,477 131,842
Non-recurring project, professional
and due diligence costs 15,798 61,872
Audit fees payable in respect of the
audit of the Group (Note 18) 18,094 15,351
Share-based payment expenses (Note
15) - 52,516
Other expenses 9,516 4,462
----------
331,885 266,043
========== ============
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
year, 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.
Year ended Period ended
30 June 30 June
2023 2022
Loss attributable to owners of the
parent (GBP's) (323,463) (266,043)
Weighted average in issue 892,329 502,290
Basic and diluted loss per ordinary
share (GBP's) (0.3625) (0.5297)
8. INVESTMENTS
Principal subsidiary undertakings of the Group
The Company owns directly the whole of the issued ordinary share
capital of its subsidiary undertaking. Details of the Company's
subsidiary are presented below:
Proportion Proportion
of ordinary of ordinary
Nature of Country shares held shares held
Subsidiary business of incorporation by parent by the Group
----------------- ------------ ------------------- ------------- --------------
MAC Alpha (BVI) Incentive
Limited 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, VG1110,
British Virgin Islands.
9. OTHER RECEIVABLES
As at As at
30 June 30 June
2023 2022
GBP's GBP's
Amounts receivable within one year:
Prepayments 6,621 9,602
--------
6,621 9,602
======== ========
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
30 June 30 June
2023 2022
GBP's GBP's
Cash and cash equivalents
Cash at bank 554,446 282,244
-------- --------
554,446 282,244
======== ========
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
30 June 30 June
2023 2022
GBP's GBP's
Amounts falling due within one year:
Trade payables 5,430 3,258
Accruals 42,116 31,625
Due to a related party (Note 16) 11,510 31,489
--------
59,056 66,372
======== ========
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 A shares of no par value
Unlimited B shares of no par value
100 sponsor shares of no par value
As at As at
30 June 30 June
2023 2022
GBP's GBP's
Issued and fully paid
700,000 ordinary shares of no par
value 319,000 319,000
600,000 A shares of no par value 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 GBP1 for one ordinary share and
matching Warrant. Under the terms of the warrant instrument,
warrant holders are able to acquire one ordinary share per warrant
at a price of GBP1 per ordinary share. 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 GBP1, in
line with the market price paid by third party investors. A Black
Scholes option pricing methodology was used to determine the fair
value 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 GBP105,000 was recorded in
the warrant reserve. Costs of GBP276,000 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 GBP1 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
GBP1 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 GBP1, in line with the market price paid by
third party investors. A Black Scholes option pricing methodology
was used to determine the fair value 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 GBP102,000
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
30 June 30 June
2023 2022
GBP's GBP's
Financial assets measured at amortised
cost
Cash and cash equivalents (Note 10) 554,446 282,244
--------
554,446 282,244
======== ========
Financial liabilities measured at
amortised cost
Trade and other payables (Note 11) 47,546 66,372
Due to a related party (Note 16) 11,510 -
-------- --------
59,056 66,372
======== ========
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 Marwyn
Long Term Incentive LP (" 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 GBP0.01 each in the
Subsidiary entitling it to 100 percent 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 percent
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 percent
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 percent of the Growth being
the " Incentive Value ").
Grant date
The grant date of the Incentive Shares is 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,
the 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. where by corporate action or otherwise, the Company effects
an in-specie distribution of all or substantially all of the assets
of the Group to the Company's shareholders;
v. aggregate cash dividends and cash capital returns to the
Company's Shareholders are greater than or equal to aggregate
subscription proceeds received by the Company;
vi. a winding-up of the Company;
vii. a winding-up of the Subsidiary; or
viii. a sale, merger or change of control of the Company.
If any of the vesting conditions described in paragraphs (ii) to
(viii) above are satisfied before the third anniversary of the
initial acquisition, the A Shares will be treated as having vested
in full.
Holding of Incentive Shares
MLTI holds Incentive Shares entitling it 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 Number Unrestricted IFRS
per A ordinary of A ordinary market value 2 Fair
share shares at grant value
date
GBP's GBP's GBP's
Marwyn Long
Term Incentive
LP GBP0.01 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 GBP52,516
relating to the issue was recognised in the Statement of
Comprehensive Income for the period ended 30 June 2022.
16. RELATED PARTY TRANSACTION
James Corsellis, Antoinette Vanderpuije and Tom Basset have
served as directors of the company during the year. 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. Mark Brangstrup Watts was a director of the Company
until 6 November 2022, up until this date Mark Brangstrup Watts was
also a managing partner of MIM LLP.
Marwyn Value Investors II LP is an entity within the Marwyn
Fund, the Company has entered into an FPA with Marwyn Value
Investors II LP under which the Company drew down GBP600,000 on 5
March 2023.
James Corsellis is the managing partner of Marwyn Capital LLP,
and Antoinette Vanderpuije and Tom Basset are also partners. Mark
Brangstrup Watts was a managing partner of Marwyn Capital LLP until
6 November 2022. 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 GBP10,000 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
year ended 30 June 2023 by Marwyn Capital LLP was GBP179,612 (2022:
GBP226,755, which included a one-off engagement fee of GBP150,000
in relation to the Company's equity raise on IPO) and they had
incurred expenses on behalf of the Group, which were subsequently
recharged, of GBP24,109 (2022: GBP23,693). An amount payable to
Marwyn Capital LLP of GBP11,510 (2022: GBP29,891 was outstanding as
at the year end.
17. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding
at 30 June 2023 (2022: GBPnil) which would require disclosure or
adjustment in these Financial Statements.
18. INDEPENDENT AUDITOR'S REMUNERATION
BTCI acts as the Group's independent auditor. Audit fees payable
to BTCI for the year ended 30 June 2023 are GBP 18,094 (2022:
GBP15,351) (refer note 6). Fees payable for the year ended 30 June
2023 in respect of procedures of a potential capital markets
transaction were GBPNil (2022: GBP6,000).
19. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would
require disclosure or adjustment to these Financial Statements.
ADVISERS
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 Depository
Company Secretary
Conyers Corporate Services (BVI) Link Market Services Trustees
Limited 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 Registrar
Company
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
Limited
Wickhams Cay 1(st) Floor Kensington Chambers
1 Road Town 46/50 Kensington Place
VG1110 St Helier
Tortola Jersey
British Virgin Islands JE04 0ZE
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