MIRI Mirriad Advertising Plc

1    Basis of preparation

These condensed consolidated interim financial statements for the six-month reporting period ended 30 June 2024 have been prepared in accordance with International Accounting Standard (IAS) 34, 'Interim Financial Reporting'.

The interim report does not include all of the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2023, which has been prepared in accordance with UK-adopted international accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

These condensed interim consolidated financial statements for the six months ended 30 June 2024 and for the six months ended 30 June 2023 do not constitute statutory accounts as defined in Section 434 of the Companies Act and are unaudited. The financial information for the six months ended 30 June 2024 presents financial information for the consolidated Group, including the financial results of the Company's wholly owned subsidiaries Mirriad Advertising Private Limited, Mirriad Inc, Mirriad Software Science and Technology (Shanghai) Co. Ltd (liquidated in 2023), and Mirriad Limited (dormant). Comparative figures in the condensed interim financial statements for the year ending 31 December 2023 have been taken from the Group's audited financial statements on which the Group's auditors, Pricewaterhouse Coopers LLP, expressed an unqualified opinion.

The Board approved these interim financial statements on 22 September 2024.

1.1   Going concern

These condensed interim financial statements have been prepared on the going concern basis, notwithstanding the Group having made a loss for the period of £4.8 million (June 2023 restated: £6.9 million). The going concern basis assumes that the Group and Company will have sufficient funds available to continue to trade for the foreseeable future and not less than 12 months from the end of the financial period being reported.

The Group's cash balance was £8.3 million at the period end and the Group remains debt free with no external borrowing.

The Company announced a Placing, Retail Offer and Directors' Subscription that raised approximately £6.2m after fees on 7 May 2024. The Company said at that time that the Directors anticipated that the proceeds of this fundraise can provide sufficient funding to trade cash flow break-even during 2025, based on base case forecasts which assume both revenue growth and cost savings being achieved over the next 18 months. After making enquiries and producing cash flow forecasts for the period up to 31 December 2025, the Directors have reasonable expectations, as at the date of approving the financial statements, that the Company and the Group will have adequate resources to fund the activities of the Company and the Group for the next 12 months from the date of the financial period being reported.

2     Accounting Policies

The accounting policies applied are consistent with those of the annual report and accounts for the year ended 31 December 2023, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 January 2024 and were adopted by the Group. These have had no significant impact on the Group's loss for the period or equity.

There are no items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidence which are required to be disclosed under IAS 34 para 16A(c).

There are no events after the interim reporting period which are required to be reported under IAS 34 para 16A(h).

There are no financial instruments being measured at fair value which require disclosure under IAS 34 para 16A(j)

3     Group financial risk factors

The condensed interim financial statements do not contain all financial risk management information and disclosures required in annual financial statements; the information should be read in conjunction with the financial information, as at 31 December 2023, summarised in the 2023 annual report and accounts. There have been no significant changes in any risk management policies since 31 December 2023.

4      Critical accounting estimates, judgements and errors

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results might differ from these estimates. IAS34(16A)(d) In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2023.

There are no changes in estimates of amounts reported in prior financial years.

(a)  Correction of material error in calculating share based payment charge

In December 2022 an employee who held options left the Company and at that time previously accrued share-based payment charge amounts related to their options were written back. In 2023 it was established that some of the options held by this employee vested monthly and were entitled to be retained after they left the Company. The error resulted in a material understatement of the share-based payment charge recognised for 2022. There was no impact on any further prior years.

The correction for this understatement in the share-based payment charge was originally posted in the June 2023 interim financial statements, but during the preparation of the 2023 annual report this correction was moved out of 2023 and into 2022, and the 2022 full year numbers were restated. The June 2023 share-based payment charge has now been restated here to reflect the correction for this error being moved from the 2023 to the 2022 numbers and to reinstate the amounts related to the options that the employee was entitled to retain on departure in 2022.

This error has been corrected by restating each of the affected financial statement line items for the prior periods as follows:

Condensed consolidated statement of profit or loss (extract)

Condensed consolidated statement of changes in equity (extract)

Basic loss per share for the prior period has been restated, and the impact of the correction for basic loss per share was a decrease of 0.1p per share.

The correction further affected some of the amounts disclosed in notes 5 (loss before tax), 6, and 8. The share-based payment expense for the prior period decreased by £246k.

There was no impact on cash flows in 2023.

5      Segment information

Management mainly considers the business from a geographic perspective since the same services are effectively being sold in every Group entity. Therefore, regions considered for segmental reporting are where the Company and subsidiaries are based, namely the UK, the USA, India and China (company liquidated in 2023). The revenue is classified by where the sales were booked not by the geographic location of the customer.

In the current and prior reporting period there is no income outside of the primary business activity.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. The steering committee is made up of the Board of Directors. There are no sales between segments. The revenue from external parties reported to the strategic steering committee is measured in a manner consistent with that in the income statement.

The Parent company is domiciled in the United Kingdom. The amount of revenue from external customers by location of the Group billing entity is shown in the tables below.

Revenue

Loss before tax

EBITDA is the loss for the year before depreciation, amortisation, interest and tax. The loss before tax is broken down by segment as follows:

Seasonality of Operations

Due to the seasonal nature of the US and UK advertising markets higher revenues are generally expected in the second half of the year than the first six months and this is the expectation for 2024. In the financial year ended 31 December 2023, 22% of US revenues accumulated in the first half of the year, with 78% accumulating in the second half. For the Group as a whole 33% of revenues accumulated in the first half of 2022 and 67% in the second half. Within this, the UK company revenue unusually showed higher revenue in the first half of the year, 73%, vs. 27% in the second half, and this was largely due to one new customer in the Middle East which only contributed revenue in the first half of the year.

6       Loss per share

(a) Basic

Basic loss per share is calculated by dividing the loss for the period / year by the weighted average number of ordinary shares in issue during the period / year. Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.

The loss per share for the period was 0.8p (six months to 30 June 2023 Restated: 2.2p; year ended 31 December 2023: 2.7p).

No dividends were paid during the period (six months to 30 June 2023: £nil; year ended 31 December 2023: £nil).

(b) Diluted

Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive

7       Share capital

Ordinary shares of £0.00001 each

During the period 543,291,490 Ordinary Shares were issued for £0.0125 per share as part of a £6.8 million gross fundraise from new and existing shareholders. This was split as follows:

·    53,751,000 Ordinary Shares issued on 9 May 2024 from the Firm Placing;

·    435,849,000 Ordinary Shares issued on 28 May 2024 from the Conditional Placing;

·    39,291,490 Ordinary Shares issued on 28 May 2024 from the Retail Offer

·    14,400,000 Ordinary Shares issued on 17 June 2024 from the Directors Subscription.

8        Net cash flows used in operating activities

9      Related party transactions

The Group is owned by a number of investors the largest being Rathbones Investment Management Limited ("Rathbones"), which owns approximately 16% of the issued share capital of the Company. Accordingly there is no ultimate controlling party.

Rathbones and M&G plc ("M&G") are substantial shareholders in the Company (as defined in the AIM Rules) and are therefore considered to be related parties of the Company pursuant to the AIM Rules (together, the "Substantial Shareholders"). During the period M&G agreed to subscribe for 59,920,000 new Ordinary shares in the Company's fundraising in May and Rathbones agreed to subscribe for 91,685,280 new Ordinary shares. The participation by each Substantial Shareholder in the fund-raising constituted a related party transaction for the purposes of Rule 13 of the AIM Rules.

Transaction with Directors

As part of the fundraise in June 2024 the following Directors purchased Ordinary Shares in the Company at a cost of £1.25 pence per share.

All the related party transactions disclosed above were settled by 30 June 2024 and No guarantees were given or received for any of these transactions.

10           Other disclosures

There are no items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidence which are required to be disclosed under IAS 34 paragraph 16A(c).

There are no events after the interim reporting period which are required to be reported under IAS 34 paragraph 16A(h).

There are no financial instruments being measured at fair value which require disclosure under IAS 34 paragraph 16A(j)

11           Availability of Interim Report

Electronic copies of this interim financial report will be available on the Company's website at www.mirriadplc.com/investor-relations.

ENDS