TIDMMAC3
RNS Number : 0405U
Marwyn Acquisition Company III Ltd
31 March 2021
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: 254900YT8SO8JT2LGD15
Marwyn Acquisition Company III Limited
(the "Company")
Interim Report for the period ended 31 December 2020
The Company announces its interim results for the period ended
31 December 2020.
The Interim Report is also available on the 'Shareholder
Documents' page of the Company's website at www.marwynac3.com .
Enquiries:
Company Secretary
Antoinette Vanderpuije - 020 7004 2700
Finsbury - PR Adviser
Rollo Head 07768 994 987
Chris Sibbald 07855 955 531
Investec Bank plc - Financial Adviser 020 7597 5970
Christopher Baird
Carlton Nelson
Alex Wright
WH Ireland Limited - Corporate Broker - + 44 (0) 207 220
1666
Harry Ansell
Katy Mitchell
MARWYN ACQUISITION COMPANY III LIMITED
Unaudited Interim Condensed Consolidated Financial Statements
for the period from incorporation on 31 July 2020 to 31 December
2020
MANAGEMENT REPORT
I present to shareholders the unaudited interim condensed
consolidated financial statements of Marwyn Acquisition Company III
Limited (the "Company") for the period from incorporation on 31
July 2020 to 31 December 2020 (the "Consolidated Interim Financial
Statements"), consolidating the results of Marwyn Acquisition
Company III Limited and MAC III (BVI) Limited (collectively, the
"Group" or "MAC") .
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.
The Directors believe there is significant opportunity to invest
in companies that are positioned to take advantage of the
structural change arising from an unprecedented acceleration of
digitalisation brought about by the current macroeconomic
environment, affecting the way people live, work and consume, and
the way businesses operate, engage and sell to customers.
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:
-- Media & Entertainment
-- Technology & Software
-- Consumer E-commerce
-- Healthcare & Diagnostics
-- 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 focused buy and
build strategy can unlock growth in their core markets and often
into new territories and adjacent sectors.
Results
The Group's loss after taxation for the period to 31 December
2020 was GBP222,458. The Group held a cash balance at the period
end of GBP505,659.
Dividend Policy
The Company has not yet acquired a trading operation 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 a platform acquisition and,
in any event, will only commence the payment of dividends when it
becomes commercially prudent to do so.
Corporate Governance
As a company with a Standard Listing, the Company is not
required to comply with the provisions of the UK Corporate
Governance Code. 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,
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.
-- 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 as
appropriate.
Risks
The Directors have carried out a robust assessment of the
principal risks facing the Group including those that would
threaten its business model, future performance, solvency or
liquidity. There have been no changes to the principal risks
described in the Company's Prospectus published on 4 December 2020.
The Directors are of the opinion that the risks are applicable to
the period ended 31 December 2020 as well as the remaining six
months of the financial year. Details of the risks faced by the
Group are set out on pages 11-21 of the Prospectus which can be
found on the Company's website www.marwynac3.com .
Outlook
We believe there is significant opportunity to invest in
businesses that have the potential to be long term beneficiaries of
the changes to their respective sectors and the underlying
acceleration of digitalisation that the current macro environment
has brought about. We are active in pursuing and evaluating
opportunities with advisers, potential management partners, and
acquisition targets and are confident about acquiring an attractive
platform business for our shareholders.
RESPONSIBILITY STATEMENT
Each of the Directors confirms that, to the best of their
knowledge:
(a) these Consolidated 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 MAC; and
(b) these Consolidated Interim Financial Statements comply with
the requirements of DTR 4.2.
Neither the Company nor the Directors accept any liability to
any person in relation to the interim financial report except to
the extent that such liability could arise under applicable
law.
Details on the Company's Board of Directors can be found on the
Company website at www.marwynac3.com .
James Corsellis
Chairman
30 March 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period
ended
31 December
2020
Note Unaudited
GBP
Administrative expenses 6 (222,458)
------------
Total operating loss (222,458)
Income tax 7 -
------------
Loss for the period (222,458)
------------
Total comprehensive loss for the period attributable to owners of the parent (222,458)
============
Loss per ordinary share (GBP)
Basic 8 (0.32)
Diluted 8 (0.16)
The Group's activities derive from continuing operations.
The Notes on pages 9 to 20 form an integral part of these
Consolidated Interim Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
31 December
2020
Note Unaudited
GBP
Assets
Current assets
Trade and other receivables 10 20,192
Cash and cash equivalents 11 505,659
Total current assets 525,851
Total assets 525,851
============
Equity and liabilities
Equity
Sponsor share 13 1
Ordinary shares 13 326,700
Warrant reserve 13 98,000
Share-based payment reserve 14 169,960
Accumulated losses (222,458)
------------
Total equity 372,203
Current liabilities
Trade and other payables 12 153,648
------------
Total liabilities 153,648
Total equity and liabilities 525,851
============
The Notes on pages 9 to 20 form an integral part of these
Consolidated Interim Financial Statements.
The financial statements were approved by the Board of Directors
on 30 March 2021 and were signed on its behalf by:
James Corsellis Mark Brangstrup Watts
Chairman Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary Sponsor Warrant Share based Accumulated Total equity
Notes shares share reserve payment reserve losses
----------------- -------- -------- ------------------- ---------------- -------------------
GBP GBP GBP GBP GBP GBP
Balance as at - - - - -
31 July 2020
Issuance of 1
ordinary
share 13 1 - - - - 1
Redesignation
of 1 ordinary
share 13 (1) 1 - - - -
Issuance of
700,000
ordinary
shares and
matching
warrants 13 602,000 - 98,000 - - 700,000
Share issue
costs 13 (275,300) - - - - (275,300)
Loss and total
comprehensive
loss for the
period - - - - (222,458) (222,458)
Share-based
payment
expense 14 - - - 169,960 - 169,960
----------------- -------- -------- ------------------- ---------------- -------------------
Balance as at
31 December
2020 326,700 1 98,000 169,960 (222,458) 372,203
================= ======== ======== =================== ================ ===================
The Notes on pages 9 to 20 form an integral part of these
Consolidated Interim Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended
31 December
2020
Note Unaudited
---------------------
GBP
Operating activities
Loss for the period (222,458)
Adjustments to reconcile total operating loss to net cash flows:
Add back share based payment expense 154,960
Working capital adjustments:
Increase in trade and other receivables and
prepayments (20,192)
Increase in trade and other payables 153,648
Net cash flows used in operating activities 65,958
---------------------
Financing activities
Proceeds from issue of ordinary share capital and matching warrants 13 700,001
Proceeds from issue of A share capital in MAC III (BVI) Limited 15,000
Cost of share issuance 13 (275,300)
Net cash flows from financing activities 439,701
---------------------
Net increase in cash and cash equivalents 505,659
Cash and cash equivalents at the beginning of the period -
---------------------
Cash and cash equivalents at the end of the period 11 505,659
=====================
The Notes on pages 9 to 20 form an integral part of these
Consolidated Interim Financial Statements.
NOTES TO THE 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,
British Virgin Islands VG1110 and UK establishment 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 wholly
owned subsidiary, MAC III (BVI) Limited (together with the Company
the "Group").
2. ACCOUNTING POLICIES
(a) Basis of preparation
The Consolidated Interim Financial Statements have been prepared
in accordance with the IAS 34 Interim Financial Reporting and are
presented on a condensed basis.
The interim report does not include all of the notes of the type
normally included in an annual financial report. There have been no
annual financial statements prepared to date as this is the first
interim period, however this report should be read in conjunction
with any public announcements made by the Company during the
interim period.
The Company was incorporated on 31 July 2020, and therefore
these Consolidated Interim Financial Statements are the first set
of financial statements issued by the Company and as such no
comparatives are available.
The principal accounting policies adopted in the preparation of
the Consolidated Interim Financial Statements are set out below.
The policies have been consistently applied throughout the period
presented, unless otherwise stated.
(b) Going concern
The Consolidated 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.
(c) New standards and amendments to International Financial Reporting Standards
Standards, amendments and interpretation effective and adopted
by the Group
IFRSs applicable to the Consolidated Interim Financial
Statements of the Group for the period from 31 July 2020 to 31
December 2020 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 IFRS 3 Business Combinations: References 1 January
to the Conceptual Framework in IFRS Standards 2022*
Amendments to IAS 16 Property, Plant and Equipment 1 January
2022*
Amendments to IAS 37 Provisions, Contingent Liabilities 1 January
and Contingent Assets: Onerous contracts - cost 2022*
of fulfilling a contract
Amendments to Annual Improvements 2018-2020 1 January
2022*
Amendments to IAS 1 Presentation of Financial 1 January
Statements: Classification of Liabilities as Current 2022*
or Non-current
IFRS 17 Insurance contracts 1 January
2023*
* 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 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 the historical financial information.
(e) Cash and cash equivalents
Cash and cash equivalents comprise cash balances at banks.
(f) Stated capital
Ordinary shares and sponsor shares are classified as equity.
Incremental costs directly attributable to the issue of new shares
are shown in the associated stated capital as a deduction from the
proceeds.
(g) Share based payments
The A ordinary shares in MAC III (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.
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. 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.
(h) Warrants
On 4 December 2020, the Company issued 700,000 ordinary shares
and matching 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. Warrants are accounted for
as equity instruments under IAS 32 and are measured at fair value
at the date of issue. Fair value of the warrants has been
calculated using a Black Scholes option pricing methodology and
details of the estimates and judgements used in determining the
fair value of the warrants are set out in note 3.
(i) Corporation tax
Corporation tax for the period presented comprises current and
deferred tax.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantially enacted at
the balance sheet date, and any adjustment to taxes payable in
respect of previous years.
Deferred tax is provided using the balance sheet liability
method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to
the extent that it is not probable that the related tax benefit
will be realised.
(j) Earnings per ordinary share
Earnings per ordinary share ("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 earnings per share is
calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential
ordinary shares.
(k) 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.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as
subsequently measured at fair value through profit or loss
("FVPL"), amortised cost, or fair value through other comprehensive
income ("FVOCI").
The classification of financial assets at initial recognition
depends on the financial asset's contractual cash flow
characteristics and the Company's business model for managing them.
In order for a financial asset to be classified and measured at
amortised cost or FVOCI, it needs to give rise to cash flows that
are 'solely payments of principal and interest' on the principal
amount outstanding (the "SPPI Criterion").
Financial assets are initially measured at their fair value
plus, for those financial assets not at fair value through profit
or loss, transaction costs.
Subsequent measurement
For the purposes of subsequent measurement, all of the Group's
financial assets are classified as financial assets at amortised
cost. Financial assets at amortised cost comprise of assets that
are held within a business model with the objective to hold the
financial assets in order to collect contractual cash flows that
meet the SPPI Criterion. This category includes the Group's other
receivables. This asset is subsequently measured at amortised cost
using the effective interest method. The amortised cost is reduced
by impairment losses, interest income, foreign exchange gains and
losses and impairment losses are recognised in profit or loss. Any
gain or loss on derecognition is recognised in profit or loss.
The Group has not classified any assets as being financial
assets at FVOCI or FVPL.
Derecognition
A financial asset is primarily derecognised and removed from the
consolidated statement of financial position when the rights to
receive cash flows from the asset have expired.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss. All
financial liabilities are recognised initially at fair value and,
in the case of payables, net of directly attributable transaction
costs. The Group does not have any financial liabilities at the
balance sheet date.
Subsequent measurement
Financial liabilities are subsequently measured at amortised
cost and in the case of interest-bearing financial liabilities at
amortised cost using the effective interest rate method. Gains and
losses are recognised in the Statement of Comprehensive Income when
the liabilities are derecognised.
Derecognition
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Consolidated 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.
There are significant estimates and assumptions used in the
valuation of the A ordinary Shares in MAC III (BVI) Limited 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 and related share-based payment expense was
calculated using a Monte Carlo valuation model. A summary of the
terms is set out in note 14.
As part of the Company's initial fundraising on IPO, the Company
issued ordinary shares to a number of investors. For every ordinary
share subscribed for, each investor was also granted a warrant
("Warrant") to acquire a further ordinary share at an exercise
price of GBP1.00 per share. The Warrants are exercisable at any
time until five years after the IPO date, being 4 December 2020.
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.
For the period to 31 December 2020, the Directors do not
consider that they have made any other significant estimates,
judgments or assumptions which would materially affect the balances
and results reported in these financial statements.
4. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating
decision-maker. As the Group has not yet commenced trading, 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 period ended
31 December 2020, the Company had two directors: James Corsellis
and Mark Brangstrup Watts, neither director received remuneration
under the terms of their director service agreements.
6. ADMINISTRATIVE EXPENSES BY NATURE
For the period ended 31 December 2020
GBP
Group administrative expenses by nature
Professional fees 22,467
Non-recurring project costs 43,686
Listing fees 793
Share based payment expense 154,960
Branding and website cost 527
Bank charges 25
222,458
======================================
7. TAXATION
For the period ended 31 December 2020
GBP
Analysis of tax in period
Current tax on profits for the period -
--------------------------------------
Total current tax -
======================================
The central management and control of the Group is exercised in
the UK and accordingly the Group is treated as tax resident in the
UK.
Reconciliation of effective rate and tax charge:
For the period ended 31 December 2020
GBP
Loss on ordinary activities before tax (222,458)
Expenses not deductible for tax purposes 24,861
Loss on ordinary activities subject to corporation tax (197,597)
Loss on ordinary activities multiplied by the rate of corporation tax in
the UK of 19% (37,543)
Effects of:
Losses carried forward for which no deferred tax recognised 37,543
Total taxation charge -
======================================
As at 31 December 2020, cumulative tax losses available to carry
forward against future trading profits were GBP37,543 subject to
agreement with HM Revenue & Customs. Prior to an acquisition,
there is no certainty as to future profits and no deferred tax
asset is recognised in relation to these carried forward
losses.
8. LOSS PER ORDINARY SHARE
Basic EPS is calculated by dividing the profit attributable to
equity holders of a company by the weighted average number of
ordinary shares in issue during the year. Diluted EPS is calculated
by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary
shares.
The Company has issued 700,000 warrants, each of which is
convertible into one ordinary share as such the weighted average
number of shares has been adjusted in calculating diluted EPS.
For six months ended 31 December 2018
Loss attributable to owners of the parent (222,458)
Weighted average number of ordinary shares in issue 700,000
Weighted average number of ordinary shares for diluted EPS 1,400,000
9. 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
----------------------- ------------ ------------------- ------------- --------------
Incentive
MAC III (BVI) Limited vehicle BVI 100% 100%
The registered office of MAC III (BVI) Limited Commerce House,
Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin
Islands VG1110.
10. TRADE AND OTHER RECEIVABLES
As at 31 December 2020
GBP
Amounts receivable in one year:
Prepayments 5,180
Other receivables 15,001
VAT receivable 11
-----------------------
20,192
=======================
Other receivables are all current.
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.
11. CASH AND CASH EQUIVALENTS
As at 31 December 2020
GBP
Cash and cash equivalents
Cash at bank 505,659
-----------------------
505,659
=======================
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 31 December 2020
GBP
Amounts falling due within one year:
Trade payables 10,068
Accruals 143,580
153,648
======================
There is no material difference between the book value and the
fair value of the trade and other payables.
13. EQUITY AND RESERVES
Authorised
Unlimited ordinary shares of no par value
Unlimited A shares of no par value
100 sponsor shares of no par value
Stated capital
As at 31 December
2020
Issued GBP
700,000 ordinary shares of no par value 326,700
1 sponsor share of no par value 1
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 of 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 14p per
Warrant and therefore each ordinary share has been valued at 86p
per share.
Costs of GBP275,300 directly attributable to the equity raise
have been taken against stated capital during the period.
Holders of ordinary shares are entitled to receive notice and
attend and vote at any meeting of members, 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 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 summary
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. Once an executive management team is
appointed they will participate in the LTIP and this will be
dilutive to MLTI.
14. SHARE BASED PAYMENTS
The Company has put in place a Long Term Incentive Plan
("LTIP"), to ensure an alignment with all Shareholders, and the
high competition for 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
and directly with those of Shareholders. As at the balance sheet
date, an executive management team is not yet in place at the
Company and as such MLTI is the only participant of 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 GBP0.01 each in the
Subsidiary entitling it to 100% 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").
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, 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 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, which right begins on the third anniversary and ends on the
seventh anniversary of the date of the Company's initial
acquisition.
The vesting conditions are as follows:
i. it is later than the third anniversary of the initial 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 2020:
Issue price Number of A ordinary Unrestricted market IFRS 2
Nominal price per A ordinary share shares value at grant date Fair value
Marwyn Long Term
Incentive LP GBP0.01 GBP7.50 2,000 GBP15,000 GBP169,960
Valuation of Incentive Shares
A valuation of the incentive shares has been prepared by
Deloitte LLP dated 12 February 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% has been applied, based on the
average yield on a five-year UK Gilt at the valuation date. The
model incorporates a range of probabilities for the likelihood of
an acquisition being made of a given size.
Expense related to Incentive Shares
An expense of GBP154,960 has been recognised in the Statement of
Comprehensive Income in respect of the Incentive Shares issued to
MLTI which is the difference between the IFRS 2 valuation at grant
date of GBP169,960 and the amount paid by MLTI for 2,000 A ordinary
shares of GBP15,000.
15. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments
at the period end:
As at
31 December 2020
GBP
Financial assets measured at amortised cost
Cash and cash equivalents 505,659
Other receivables 15,001
------------------
520,660
------------------
Financial liabilities measured at amortised cost
Trade and other payables 153,648
------------------
153,648
==================
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.
16. RELATED PARTY TRANSACTIONS
James Corsellis and Mark Brangstrup Watts are directors of the
Company and Antoinette Vanderpuije is the Company Secretary of the
Company. Funds managed by Marwyn Asset Management Limited, of which
James Corsellis, Mark Brangstrup Watts and Antoinette Vanderpuije
are all non-executive directors and of which Mark Brangstrup Watts
and James Corsellis are the ultimate beneficial owners, hold 75% of
the Company's issued ordinary shares and Warrants at the statement
of financial position date.
James Corsellis, Mark Brangstrup Watts and Antoinette
Vanderpuije have a beneficial interest in the Incentive Shares as
described in note 14 of the Consolidated Interim Financial
Statements through their indirect interest in MLTI which owns 2,000
A ordinary shares in the capital of MAC III (BVI) Limited.
James Corsellis and Mark Brangstrup Watts are the managing
partners of Marwyn Capital LLP, and Antoinette Vanderpuije is also
a partner. Marwyn Capital LLP provides corporate finance advice,
company secretarial, administration and accounting services to the
Company. As part of this engagement a fee of GBP150,000 was charged
in relation to the listing of 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 as at the statement
of financial position date GBP10,000 is payable by the Company to
Marwyn Capital LLP.
James Corsellis and Mark Brangstrup Watts are the managing
partners of Marwyn Investment Management LLP, and Antoinette
Vanderpuije is also a partner. Marwyn Investment Management LLP
incurred costs on behalf of the Group which they recharged. During
the period Marwyn Investment Management LLP charged GBP11,805 in
respect of recharged costs of which GBP67.97 was outstanding at the
period end.
17. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding
at 31 December 2020 that requires disclosure or adjustment in these
financial statements.
18. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would
require disclosure or adjustment to these financial statements.
ADVISORS
Corporate Broker Company Secretary
WH Ireland Antoinette Vanderpuije
24 Martin Lane 11 Buckingham Street
London London
EC4R 0DR WC2N 6DF
Registrar Registered Agent and Assistant
Link Market Services (Guernsey) Company Secretary
Limited Conyers Corporate Services
Mont Crevelt House, Bulwer Avenue (BVI) Limited
St Sampson, Guernsey Commerce House, Wickhams Cay
GY2 4LH 1
Road Town, VG1110
Tortola, British Virgin Islands
Depository Solicitors to the Company (as
Link Market Services Trustees to English law)
Limited Travers Smith LLP
The Registry 34 Beckenham Road 10 Snow Hill
Beckenham London
Kent, BR3 4TU EC1A 2AL
Auditor Solicitors to the Company (as
Baker Tilly Channel Islands to BVI Law)
Limited Conyers Dill & Pearman
First floor, Kensington Chambers Commerce House, Wickhams Cay
46-50 Kensington Place 1
St Helier Jersey JE4 0ZE Road Town, VG1110
Tortola, British Virgin Islands
Financial Advisor Corporate Finance Adviser
Investec Bank Plc Marwyn Capital LLP
30 Gresham Street 11 Buckingham Street
London EC2V 7QN London, WC2N 6DF
UK Establishment Address
11 Buckingham Street
London
WC2N 6DF
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