TIDMHMA1
RNS Number : 9538X
HIRO Metaverse Acquisitions I S.A.
28 April 2023
28 April 2023
Hiro Metaverse Acquisitions I S.A.
("Hiro" or the "Company" or, together with its subsidiaries, the
"Group")
Annual Report and Financial Statements for the period ended 31
December 2022
Hiro Metaverse Acquisitions I S.A. (hereinafter referred to as
HMAI or the "Company") the special purpose acquisition company
sponsored by Hiro Sponsor I LLP (the "Sponsor"), an affiliate of
Hiro Capital, a videogames and metaverse technology venture capital
fund, is pleased to announce its results for the period ended 31
December 2022.
A copy of the Annual Report and Financial Statements will also
available on the Company's website at
https://hma1.hiro.capital/investor-resources/ where further
information on the Company can also be found. The Annual Report has
also been submitted to the National Storage Mechanism and will
shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
For further information please contact:
For enquiries:
Hiro Metaverse Acquisitions 1
Peter@hiro.capital
+31612967281
JTC Group - Company Secretary & Administrator
Hiro.cosec@jtcgroup.com
+44 203 846 9774
About Hiro Metaverse Acquisitions I S.A.
Hiro Metaverse Acquisitions I S.A. (hereinafter referred to as
HMAI or the "Company") is a special purpose acquisition company
sponsored by Hiro Sponsor I LLP (the "Sponsor"), an affiliate of
Hiro Capital, a videogames and metaverse technology venture capital
fund.
Founded by Luke Alvarez, Sir Ian Livingstone CBE and Cherry
Freeman, three senior leaders with an established track record of
entrepreneurship and investments in the video gaming, digital
sports and technology sectors. Hiro Capital invests in high-growth
video games, esports, interactive streaming, gamified fitness and
metaverse technology innovators. The founding team having
collectively co-founded and invested in over $9 billion worth of
companies in these sectors, from start-ups to IPO in London and New
York.
HMAI raised GBP115 million through a listing on the London Stock
Exchange.
The Company is focused on targets operating in the sectors of
video games, esports, interactive streaming, GenZ social networks,
connected fitness & wellness and metaverse technologies with
principal business operations in the U.K., Europe or Israel,
although it may pursue an acquisition opportunity in any industry
or sector or region.
The Company was incorporated for the purpose of acquiring a
stake in a company or operating business (the "Target" or "Target
Business") through a merger, capital stock exchange, share
purchase, asset acquisition, reorganisation or similar transaction
(an "Initial Business Combination").
Hiro Metaverse Acquisitions I S.A.
Société Anonyme
Registered address: 17, Boulevard F.W., L-2411 Luxembourg
R.C.S. Luxembourg: B 259488
(the "Company")
REPORT
of the Board of Directors to the annual general meeting of the
shareholders of
HiRO METAVERSE ACQUISITIONS I S.A.
According to the prevailing law and the mandate you have granted
to us we, are pleased to report the results for the company ' s
financial year from 1 January 2022 to 31 December 2022 (the "
Financial Year " ).
We herewith submit to your meeting the Company ' s annual
report, consisting of the Company ' s Consolidated statement of
comprehensive income, Consolidated statement of financial position,
Consolidated statement of changes in equity, Consolidated statement
of cash flows, and the explanatory notes and the Company ' s
Separate statement of comprehensive income, Separate statement of
financial position, Separate statement of changes in equity,
Separate statement of cash flows, and the explanatory notes thereto
regarding the Financial Year.
STATUS AND ACTIVITIES
The Company is a public limited liability company (société
anonyme) incorporated and operating under the laws of the Grand
Duchy of Luxembourg .
The Company was incorporated for the purpose of acquiring a
majority (or otherwise controlling) stake in a company or operating
business (the " Target " or " Target Business " ) through a merger,
capital stock exchange, share purchase, asset acquisition,
reorganisation or similar transaction (an " Initial Business
Combination " ). The Company intends to focus on targets operating
in the sectors of video games, esports, interactive streaming, GenZ
social networks, connected fitness & wellness and metaverse
technologies with principal business operations in the U.K., Europe
or Israel, although it may pursue an acquisition opportunity in any
industry or sector or region. Prior to the completion of its
Initial Business Combination, the Company is not engaging in any
operations, other than in connection with the selection,
structuring and completion of its Initial Business Combination.
The Company will need to obtain shareholder approval on the
proposed Initial Business Combination at a general meeting
specifically convened for this purpose (other than in respect of
any Restricted Shares, being Public Shares held by the Directors,
the Sponsor or any Insiders).
The Company ' s main objective is to complete its Initial
Business Combination within an initial period of 15 months
following admission to trading, subject to an initial three-month
extension period (the " First Extension Period " ) and a further
three-month extension period (the " Second Extension Period " ), in
each case if approved by shareholder vote (the " Business
Combination Deadline " ), although such extensions are not of a
type required to be approved by Public Shareholders as contemplated
by Listing Rule 5.6.18AG.
RESULTS AND DIVIDS
At the end of the year under review the Company recorded a loss
of GBP 5,549,198.
The Company has not yet adopted a dividend policy. The Company
has not paid any dividends to date and will not pay any dividends
prior to the Initial Business Combination.
SHARE CAPITAL
The share capital of the Company on 20 September 2021 was set at
GBP 30,000, represented by 3,750,000 Class B shares without nominal
value (the " Sponsor Shares " ).
On 2 February 2022, the 3,750,000 Sponsor Shares were converted
into 2,875,000 Sponsor Shares.
On 2 February 2022, the share capital of the Company was
increased from GBP 30,000 to GBP 33,229.20 through the issuance of
310,500 Non-Redeemable Class A Shares.
On 8 February 2022, the share capital of the Company was
increased from GBP 33,229.20 to GBP 36,817 through the issuance of
another 34,500 Non-Redeemable Class A Shares.
Redeemable Class A Shares
The Company ' s Public Shares were admitted to trading on the
Main Market of the London Stock Exchange on 8 February 2022
following a placing of Public Shares at a price of GBP 10 per
Public Share. Each Public Share entitled the holder to receive
one-half (1/2) of one Public Warrant. Each whole Public Warrant
entitles a holder to subscribe for one Public Share for an exercise
price of GBP 11.50 per new Public Share. The Public Warrants were
issued to holders of Public Shares and admitted to the Main Market
of the London Stock Exchange on 24 February 2022.
Because these Class A shares are redeemable under certain
conditions, the Board of Directors concluded that these Redeemable
Class A Shares did not meet the definition of an equity instrument
as per IAS 32. Hence the Redeemable Class A Shares are considered
as debt instruments from an accounting standpoint (see Note 11 and
12 of the Consolidated financial statements).
RELATED PARTY TRANSACTIONS
Information relating to related parties and related party
transactions are disclosed in the notes to the Consolidated and
Separate financial statements.
VOTING RIGHTS
Each Ordinary Share confers the right to cast one vote at the
general meeting. Sponsor Shares have the same voting rights
attached to them as all other Ordinary Shares.
OWN SHARES
During the financial year the Company did not hold any of its
own shares.
RESEARCH AND DEVELOPMENT
During the financial years ended 31 December 2022 and 2021, the
Company did not perform any research and development activity.
DIRECTORS
During the Financial Year the Board of Directors (the " Board "
) consisted of :
Name Position Date of appointment Date of resignation
--------------------- -------------------- -------------------- --------------------
Mr Luke Alvarez Director 28 October 2021 n/a
--------------------- -------------------- -------------------- --------------------
Ms Cherry Freeman Director 28 October 2021 n/a
--------------------- -------------------- -------------------- --------------------
Sir Ian Livingstone Director 10 December 2021 n/a
--------------------- -------------------- -------------------- --------------------
Mr Jurgen Post Independent Non- 7 February 2022 n/a
Executive Director
--------------------- -------------------- -------------------- --------------------
Ms Emily Greer Independent Non- 7 February 2022 n/a
Executive Director
--------------------- -------------------- -------------------- --------------------
Mr Adela Pinkster Independent Non- 7 February 2022 n/a
Executive Director
--------------------- -------------------- -------------------- --------------------
The Board is responsible for leading and controlling the Company
and has overall authority for the management and conduct of its
business, strategy and development. The Board is also responsible
for ensuring the maintenance of a sound system of internal controls
and risk management (including financial, operational and
compliance controls) and for reviewing the overall effectiveness of
systems in place as well as for the approval of any changes to the
capital, corporate and/or management structure of the Company.
CORPORATE GOVERNANCE STATEMENT
As a Luxembourg governed company that is traded on the London
Stock Exchange, the Company is not required to adhere to the
Luxembourg corporate governance regime applicable to companies that
are traded in Luxembourg. As this regime has not been designed for
special purpose acquisition companies like the Company but for
fully operational companies, the Company has opted to not apply the
X Principles of Corporate Governance of the Luxembourg Stock
Exchange on a voluntary basis.
In addition, the Company complies with the U.K. Corporate
Governance Code with the exception of the following:
-- Given the composition of the Board and the size and nature of
the Company, the Board considers certain provisions of the U.K.
Corporate Governance Code (in particular the provisions relating to
the division of responsibilities between the chairman, chief
executive and senior independent director, annual performance
evaluation and executive compensation) to be inapplicable to the
Company.
-- The Company does not intend having nomination or remuneration
committees prior to completion of its Initial Business Combination.
The Board does not consider the nomination or remuneration
committees to be necessary given the size and nature of the
Company. Consequently, the Board will not appoint a remuneration
consultant.
-- The U.K. Corporate Governance Code recommends the submission
of all directors for re-election at annual intervals. No Director
will be required to submit for re-election until the first annual
general meeting of the Company following the Initial Business
Combination.
-- The Board has adopted a share dealing code which is
consistent with the rules of the U.K. Market Abuse Regulation. The
Board is be responsible for taking all proper and reasonable steps
to ensure compliance with such share dealing code by the
Directors.
FINANCIAL INSTRUMENTS
The Company ' s financial assets include equity instruments,
cash and cash equivalents and trade and other
receivables. Further details can be obtained from the Notes to the financial statements.
Equity instruments are classified as investments in
subsidiaries. Subsidiaries are all entities over which the Company
has control. The Company controls an entity where 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 to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred or
acquired by the Company. They are deconsolidated from the date that
control ceases. Disclosures of acquisitions and disposal of shares
in affiliated undertakings are contained in the notes to the
financial statements .
PRINCIPAL RISKS AND UNCERTAINTIES
The following is a summary of key risks that, alone or in
combination with other events or circumstances, could have a
material adverse effect on the Company ' s business, financial
condition, results of operations and prospects. In making the
selection, the Company has considered circumstances such as the
probability of the risk materialising, the potential impact which
the materialisation of the risk could have on the Company ' s
business, financial condition and prospects, and the attention that
management would, on the basis of current expectations, have to
devote to these risks if they were to materialise:
-- The Company is an entity formed in 2021 with no operating
history and the Company ' s only income is the interest income on
the bank account. The Company has not generated and currently does
not generate any other revenues and, as such, prospective investors
have no basis on which to evaluate the Company ' s performance and
ability to achieve its business objective .
-- The Company has not yet identified any specific potential
Target Business with which to complete its Initial Business
Combination and, as such, prospective investors have no basis on
which to evaluate the possible merits or risks of a Target Business
' s operations or specific industry.
-- There is no assurance that the Company will identify suitable
Initial Business Combination opportunities by the Business
Combination Deadline, the Board intends for the Company to continue
as a privately held company and has no intention to commence
liquidation or winding up of the Company in the next 12 months.
-- The Company may face significant competition for Initial Business Combination opportunities.
-- The requirement that the Company complete its Initial
Business Combination by the Business Combination Deadline may give
potential Target Businesses leverage over the Company in
negotiating the Initial Business Combination and may limit the time
the Company has in which to conduct due diligence on potential
Target Businesses, which could undermine its ability to complete
its Initial Business Combination on terms that would produce value
for shareholders.
-- Public Shareholders ' ability to exercise redemption rights
with respect to a large number of the Public Shares may not allow
the Company to complete the most desirable Initial Business
Combination or optimise its capital structure.
-- The nominal price paid by the Sponsor for the Sponsor Shares
and the conversion of the Sponsor Shares into Public Shares may
incentivise the Sponsor and the Directors to complete an Initial
Business Combination in order to realise a significant profit
regardless of whether the trading price of Public Shares declines
materially.
-- The Sponsor, the Directors and their respective affiliates
may have competitive interests that conflict with the Company ' s
interests.
-- Past performance by the Company ' s management team, the
Sponsor and their affiliates and their respective directors and
management teams, including investments and transactions in which
they have participated and businesses with which they have been
associated, may not be indicative of future performance of an
investment in the Company.
-- The Sponsor has paid approximately GBP0.01 per Sponsor Share
and, accordingly, investors will experience substantial dilution
upon conversion of the Sponsor Shares into Public Shares.
-- The Company may issue additional Public Shares to complete
its Initial Business Combination, including via a private
investment in public equity, or PIPE transaction, or under an
employee incentive plan after completion of its Initial Business
Combination. Any such issuances would dilute the interest of the
Public Shareholders and likely present other risks.
-- The outstanding Public Warrants, Sponsor Warrants and
Overfunding Warrants will become exercisable in the future, which
may increase the number of Public Shares and result in further
dilution for the Public Shareholders, and investors may also
experience a dilution of their percentage ownership of the Company
if they do not exercise their Public Warrants or if other investors
exercise their Public Warrants.
-- If the Company is liquidated before the Business Combination
Deadline and distributes the amounts held in the Escrow Account as
liquidation proceeds, Public Shareholders could receive less than
GBP10.30 per Public Share (assuming there are no Additional
Overfunding Subscriptions) or nothing at all. In addition, it is
difficult to predict when the amounts held in the Escrow Account
(if any) will be returned to the Public Shareholders.
-- There is a risk that the market for the Public Shares or the
Public Warrants will not be active and liquid, which may adversely
affect the liquidity and price of the Public Shares and the Public
Warrants.
STATEMENT OF GOING CONCERN
The Directors, having considered the financial position of the
Company for a period of at least 12 months from the date of
approval of the financial statements, have a reasonable expectation
and belief that the Company has adequate resources to continue in
operational existence for the foreseeable future given the
available cash and forecast cash outflows.
As at the date of this report, the Company is not in
sufficiently advanced discussions with any potential targets to
enable the Public Shareholders to consider and vote on a potential
Initial Business Combination. The Company ' s initial deadline to
complete an Initial Business Combination is 7 May 2023 and the
Articles permit an initial three-month extension period, followed
by a further three-month extension period, in each case with the
approval of a simple majority of the holders of all Ordinary
Shares. However, the Board of Directors considers that these
permitted extensions are unlikely to provide sufficient time to
permit the Company to evaluate target companies, to agree terms on
a potential business combination, to seek agreement on financing
requirements, and to implement the necessary steps for readmission
under the UK Listing Rules in order to complete an Initial Business
Combination. Accordingly, on 4 April 2023 the Company gave notice
convening an EGM to be held on 5 May 2023 to consider, and if
thought fit, to approve the extension of the business combination
deadline to 7 February 2024 by way of an amendment to the Articles
of Incorporation.
As at the date of this report, it is therefore uncertain whether
the Company will extend its business combination deadline to 7
February 2024 and continue to seek an Initial Business Combination,
or if it will instead proceed to redeem its Public Shareholders and
cancel the listing and trading of the Company ' s Public Shares and
Public Warrants on the London Stock Exchange following expiry of
the initial business combination deadline of 7 May 2023. In any
event, if the current or any extended business combination deadline
expires without the Company having completed an Initial Business
Combination and the Company undertakes a redemption and delisting
of its Public Shares and Public Warrants as described above, the
Board intends for the Company to continue as a privately held
company and has no intention to commence liquidation or winding up
of the Company in the next 12 months.
SUBSEQUENT EVENTS
Since 31 December 2022 the market backdrop for SPACs and public
equity offerings more generally has continued to be challenging.
This climate has not been conducive to completing an Initial
Business Combination. As at the date of this report, the Company is
not in sufficiently advanced discussions with any potential targets
to enable the Public Shareholders to consider and vote on a
potential Initial Business Combination.
On 4 April 2023 the Company gave notice convening an EGM to be
held on 5 May 2023 to consider, and if thought fit, to approve the
extension of the business combination deadline to 7 February 2024
by way of an amendment to the Articles.
MANAGEMENT REPORT
For the purposes of compliance with DTR 4.1.5R(2), DTR 4.1.8R
and DTR 4.1.11R, the required content of the Management Report can
be found in this report.
DIRECTORS ' RESPONSIBILITY STATEMENT
The Board of Directors is responsible for preparing the Report
and the financial statements in accordance with applicable law and
regulations. Company law requires the Board of Directors to prepare
financial statements for each financial year. The Board of
Directors has prepared the Company financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union.
Under company law the Board of Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that year. In preparing these
financial statements, the Board of Directors is required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- present the financial statements and policies in a manner
that provides relevant, reliable, comparable and understandable
information;
-- state whether they have been prepared in accordance with
applicable IFRSs as adopted by the EU;
-- assess the Company ' s ability to continue as a going
concern, disclosing, as applicable matters related to going
concern; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Board of Directors is responsible for keeping adequate
accounting records that are sufficient to show and explain the
Company ' s transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable it to
prepare the financial statements and ensure that the financial
statements comply with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. It is responsible for
such internal control as it determines necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error, and has general
responsibility for taking such steps as are reasonably open to it
to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities.
The Board of Directors is responsible for the maintenance and
integrity of corporate and financial information included on the
Company ' s website. The financial statements are published on the
Company ' s website.
Legislation in Luxembourg governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Board of Directors, to the best of its knowledge, confirms
that:
-- the financial statements, prepared in accordance with
applicable accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company included in the consolidation as a whole; and
-- the Management Report includes a fair review of the
development of the business and the position of the Company in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties.
The Board of Directors considers the Annual Report and the
Company ' s separate financial statements and the Group ' s
consolidated financial statements taken as a whole is fair,
balanced and understandable and provides the information necessary
for shareholders to assess the Company ' s position and
performance, business model and strategy.
INTERNAL CONTROL
The Board of Directors is responsible for determining the nature
and extent of the significant risks it is willing to take in
achieving its strategic objectives. The Board of Directors
maintains sound risk management and internal control systems. The
Board of Directors has reviewed the Company ' s risk management and
control systems and believes that the controls are satisfactory
given the nature and size of the Company. Controls will be reviewed
following completion of the Initial Business Combination.
DISCLOSURE OF INFORMATION TO AUDITORS
So far as the Board of Directors is aware, there is no relevant
audit information of which the Auditor is unaware. The Directors
have taken all steps that they ought to have taken as Directors to
make themselves aware of any relevant audit information and to
establish that the Auditor is aware of that information.
Finally, we request you to adopt the separate and consolidated
financial statements and to grant discharge to the members of the
Board of Directors and the statutory auditor for their mandate
during the financial year 2022.
Luxembourg, 28 April 2023
Ian Livingstone Luke Alvarez
Director Director
Cherry Freeman Jurgen Post
Director Independent Non-Executive Director
--------------------------- ------------------------------------
Emily Greer Addie Pinkster
Independent Non-Executive Independent Non-Executive Director
Director
ANNEXURE A
HIRO METAVERSE ACQUISITIONS I S.A.
Société Anonyme
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED
31 DECEMBER 2022
Registered office: 17, Boulevard F.W. Raiffeisen
L-2411 Luxembourg
R.C.S. Luxembourg: B259488
HIRO METAVERSE ACQUISITIONS I S.A.
Consolidated financial statements for the year ended 31 December
2022
Index to the consolidated financial statements Page(s)
Independent auditor ' s report 2 -6
Consolidated statement of comprehensive income 7
Consolidated statement of financial position 8
Consolidated statement of changes in equity 9
Consolidated statement of cash flows 10
Notes to the consolidated financial statements 11 - 32
To the Shareholders of
HIRO METAVERSE ACQUISITIONS I S.A.
17, Boulevard Raiffeisen
L-2411 Luxembourg
R.C.S. Luxembourg B 259.488
REPORT OF THE REVISEUR D'ENTREPRISES AGREE
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of HIRO
METAVERSE
ACQUISITIONS I S.A. and its subsidiary (the "Group"), which
comprise the consolidated statement of financial position as of 31
December 2022, and the consolidated statement of comprehensive
income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year ended 31 December
2022, 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 31 December 2022, and of its
consolidated financial performance and its consolidated cash flows
for the period ended 31 December 2022 in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Basis for Opinion
We conducted our audit in accordance with the EU Regulation Ndeg
537/2014, the Law of 23 July 2016 on the audit profession ("Law of
23 July 2016") and with International Standards on Auditing
("ISAs") as adopted for Luxembourg by the "Commission de
Surveillance du Secteur Financier" ("CSSF"). Our responsibilities
under the EU regulation No 537/2014, the Law of 23 July 2016 and
ISAs as adopted for Luxembourg by the CSSF are further described in
the << Responsibilities of "réviseur d'entreprises agréé" for
the Audit of the Consolidated Financial Statements >> section
of our report. We are also independent of the Group in accordance
with the International Code of Ethics for Professional Accountants,
including International Independence Standards, issued by the
International Ethics Standards Board for Accountants (IESBA Code)
as adopted for Luxembourg by the CSSF together with the ethical
requirements that are relevant to our audit of the consolidated
financial statements, and have fulfilled our other ethical
responsibilities under those ethical 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
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in
the context of the 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.
Based on the result of our audit procedures no Key Audit Matters
were identified for the audit of the consolidated financial
statements as of 31 December 2022.
Emphasis of Matter
We draw attention to Note 17 of the consolidated financial
statements, which describes significant events that occurred after
the reporting period and their potential effects.
Other information
The Board of Directors is responsible for the other information.
The other information comprises the information stated in the
Consolidated Management Report and the Corporate Governance
Statement but does not include the consolidated financial
statements and our report of the "réviseur d'entreprises agréé"
thereon.
Our opinion on the consolidated financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, 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 audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report this fact. We have nothing
to report in this regard.
Responsibilities of the Board of Directors and Those Charged
with Governance of the Group for the Consolidated Financial
Statements
The Board of Directors is responsible for the preparation and
fair presentation of the consolidated financial statements in
accordance with IFRSs as adopted by the European Union and for such
internal control as the Board of Directors determines is necessary
to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or
error.
The Board of Directors is also responsible for presenting and
marking up the consolidated financial statements in compliance with
the requirements set out in the Delegated Regulation 2019/815 on
European Single Electronic Format, as amended ("ESEF
Regulation").
In preparing the consolidated financial statements, the Board of
Directors is 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 the Board of Directors either intends to
liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the
Group's financial reporting process.
Responsibilities of the "Réviseur d'Entreprises Agréé" for the
Audit of the consolidated financial statements
The objectives of our audit 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 a report of the "Réviseur d'Entreprises Agréé" that
includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with accordance with the EU Regulation Ndeg 537/2014,
the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by
the CSSF 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.
As part of an audit in accordance with the EU Regulation Ndeg
537/2014, the Law of 23 July 2016 and with ISAs as adopted for
Luxembourg by the CSSF, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Group's internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the Board of Directors.
-- Conclude on the appropriateness of Board of Directors' use of
the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our report of the "Réviseur d'Entreprises Agréé" to the related
disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our
report of the "Réviseur d'Entreprises Agréé". However, future
events or conditions may cause the Group to cease to continue as a
going concern.
-- Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair
presentation.
-- Assess whether the consolidated financial statements have
been prepared in all material respects with the requirements laid
down in the ESEF Regulation.
-- Obtain sufficient appropriate audit evidence regarding the
financial information of the entities and business activities
within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction,
supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and communicate to them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters. We
describe these matters in our report unless law or regulation
precludes public disclosure about the matter.
Report on Other Legal and Regulatory Requirements
We have been appointed as "réviseur d'entreprises agréé" on 20
September 2021 and the duration of our uninterrupted engagement,
including previous renewals and reappointments, is 1 year.
The Director's report is consistent with the consolidated
financial statements and has been prepared in accordance with
applicable legal requirements.
We have checked the compliance of the consolidated financial
statements of the Group as at 31 December 2022 with relevant
statutory requirements set out in the ESEF Regulation that are
applicable to the consolidated financial statements. For the Group
it related to:
- Consolidated Financial Statements prepared in valid xHTML format;
- The XBRL markup of the Consolidated Financial Statements using
the core taxonomy and the common rules of markups specified in the
ESEF Regulation
In our opinion, the consolidated financial statements of the
Group as of 31 December 2022, have been prepared, in all material
respects, in compliance with the requirements laid down in the ESEF
Regulation.
We confirm that the audit opinion is consistent with the
additional report to the audit committee or equivalent.
We confirm that the prohibited non-audit services referred to in
EU Regulation No 537/2014 were not provided and that we remained
independent of the Group in conducting the audit.
Luxembourg, 28 April 2023
For Mazars Luxembourg, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Fabien Delante
Réviseur d'entreprises agréé
1 Jan 2022 20 Sept 2021
to to
Notes 31 Dec 2022 31 Dec 2021
GBP GBP
Other operating expenses 5 (745,626) (152,560)
Taxes, duties and similar expenses (1,393) -
Operating loss (747,019) (152,560)
Finance income
Interest income from financial assets 1,586,260 -
held for cash management purposes
------------ ------------------
Finance income 1,586,260 -
Finance costs
Amortisation listing costs 12.1 (2,327,893) -
Fair value gain/(loss) on class A warrants 12.2 (473,800) -
Fair value gain/(loss) on class B warrants 12.3 (3,286,000) -
Foreign currency exchange gains/(losses) (5,929) 272
------------ ------------------
Finance costs (6,093,622) 272
------------ ------------------
Loss before income tax (5,254,381) (152,288)
Income tax 6 (294,817) -
------------ ------------------
Loss for the period (5,549,198) (152,288)
Other comprehensive income - -
------------ ------------------
Total comprehensive loss for the period,
net of tax (5,549,198) (152,288)
------------ ------------------
Earnings/(loss) per share attributable
to equity holders Net earnings per share
- basic and diluted 7 (0.41) (0.04)
The accompanying notes form an integral part of these
consolidated financial statements
Notes 31 Dec 2022 31 Dec 2021
GBP GBP
Current assets
Deferred costs 8 - 731,407
Restricted cash 9 120,008,667 -
Cash and cash equivalents 9 1,181,344 30,000
Prepayments 10 93,654 -
Current assets 121,283,665 761,407
----------- -----------
Total Assets 121,283,665 761,407
----------- -----------
Equity and liabilities
Equity
Share capital 11 36,817 30,000
Share premium 11 3,173,417 -
Accumulated deficit (5,701,486) (152,288)
(2,491,252) (122,288)
Liabilities
Non-current liabilities:
Class A warrants at fair value 12.2 6,396,300 -
Class B warrants at fair value 12.3 8,586,000 -
Total non-current liabilities 14,982,300 -
Current liabilities
Redeemable class A shares
108,335,684 - 12.1 108,335,684 -
Trade and other payables 13 162,116 883,695
Taxes payable 14 294,817 -
Total current liabilities 108,792,617 883,695
----------- -----------
Total liabilities 123,774,917 883,695
----------- -----------
Total equity and liabilities 121,283,665 761,407
----------- -----------
The accompanying notes form an integral part of these
consolidated financial statements
Share
premium
Notes Share and similar Accumulated Total
capital premiums deficit Equity
GBP GBP GBP GBP
Balance at 1 January
2022 30,000 - (152,288) (122,288)
Issuance of capital 11
Share capital
increase
2 Feb 2022
Issuance of 310,500
non- redeemable
Class
A shares 3,229 3,004,505 - 3,007,734
Reclassification of
non-redeemable
Class A shares from
equity
to liability (IAS
32) - (155,250) - (155,250)
Issuance of
10,350,000
redeemable Class A
shares 107,640 103,392,360 - 103,500,000
Issuance of
1,150,000
redeemable Class A
shares 11,960 11,488,040 - 11,500,000
Reclassification of
redeemable
Class A shares from
equity
to liability (IAS
32) (119,600) (114,880,400) - (115,000,000)
Share capital
increase
8 Feb 2022 11
Issuance of 34,500
non-redeemable
Class
A shares 3,588 341,412 - 345,000
Reclassification of
non-redeemable
Class A shares from
equity
to liability (IAS
32) - (17,250) - (17,250)
Loss for the period - - (5,549,198) (5,549,198)
Other comprehensive
income - - - -
Balance at 31
December
2022 36,817 3,173,417 (5,701,486) (2,491,252)
--------------- ---------------------- -------------------- ----------------------
Balance at 20
September
2021
Issuance of
incorporation
capital 30,000 - - 30,000
Loss for the period - - (152,288) (152,288)
Other comprehensive
income - - - -
Balance at 31
December
2021 30,000 - (152,288) (122,288)
--------------- ---------------------- -------------------- ----------------------
The accompanying notes form an integral part of these
consolidated financial statements.
1 Jan 2022 20 Sept
to 2021
31 Dec 2022 to
31 Dec
2021
GBP GBP
Cash flow from operating activities
Loss before income tax (5,549,198) (152,288)
Adjustments for:
Finance income (1,586,260) -
Finance costs 6,087,693 -
Foreign currency exchange gains/(losses) 5,929 -
Net cash from operating activities before income
tax (1,041,836) (152,288)
Changes in working capital:
Decrease/(increase) in deferred costs 731,407 (731,407)
(Increase) in prepayments (93,654) -
(Decrease)/increase in trade and other payables (721,579) 883,695
Increase in taxes payable 294,817 -
Net cash flows from operating activities (830,845) -
Cash flow from financing activities
Proceeds from issue of share capital - 30,000
Payment of cost in relation to capitalisation (3,339,475) -
Proceeds from issue of redeemable shares 115,000,000 -
Proceeds from issue of non-redeemable shares 3,450,000 -
Proceeds from issue of sponsor warrants 5,300,000 -
Interest received 1,586,260 -
Foreign currency exchange gains/(losses) (5,929) -
Net cash flows from financing activities 121,990,856 30,000
-
Net change in cash and cash equivalents 121,160,011 -
Increase in restricted cash (120,008,667) -
Cash and cash equivalents, beginning 30,000 -
Cash and cash equivalents at end of the period 1,181,344 30,000
------------- -----------------
The accompanying notes form an integral part of these
consolidated financial statements
1. General information
Hiro Metaverse Acquisitions I S.A. (the "Company") was
incorporated on 20 September 2021 (date of incorporation) as a
public limited liability Company incorporated in Luxembourg
(Société Anonyme or "S.A.") under the laws of the Grand Duchy of
Luxembourg for an unlimited period. The registered office of the
Company is located at 17, Boulevard Raiffeisen, L-2411, Luxembourg,
Grand Duchy of Luxembourg. The Company is registered with the
Luxembourg Trade and Companies Register (Registre de Commerce et
des Société, in abbreviated "RSC") under the number B259488 since
20 September 2021.
On the 8th of December 2021 the Company incorporated HMA1
(ESCROW) Limited (the " Subsidiary " ), under the Companies Act
2006, in the United Kingdom, being a private Company, limited by
shares, with its registered office at 52 Lime Street, London,
England.
The consolidated financial statements for the year ended 31
December 2022 covers the Company and its subsidiary (collectively "
the Group " ).
From a legal standpoint, the issued share capital of the Company
as of 31 December 2022 amounts to GBP 156,417.20 represented by
11,500,000 Redeemable Class A Shares, 345,000 Non-Redeemable Class
A Shares and 2,875,000 Class B Shares (the " Sponsor Shares " ),
all without nominal value . The total number of voting rights in
the Company is 14,720,000.
Because they are redeemable under certain conditions, the
11,500,000 Redeemable Class A Shares do not meet the definition of
an equity instrument as per IAS 32. Hence these Redeemable Class A
Shares are considered as debt instruments from an accounting
standpoint, resulting in a share capital of GBP 36,817 in the
financial statements. Detailed movements for the year are disclosed
in note 11. The 11,500,000 Redeemable Class A Shares are the Public
Shares issued by the Company in the Placing; being the Shares "cum
Rights," as contemplated in the Prospectus. The Sponsor (Hiro
Sponsor I LLP), subscribed for 34,500 of these Public Shares; being
the Overfunding Shares and Additional Overfunding Shares. The
proceeds of the Placing and of the Sponsor's overfunding
subscriptions are held in an Escrow account and are available for
the redemption of Public Shares held by Public Shareholders. The
Sponsor waived any rights attached to the Public Shares held by the
Sponsor. Consequently, being non-redeemable, the Public shares held
by the Sponsor are classified as equity.
The Company is managed by its Board of Directors composed of
Luke Alvarez, Cherry Freeman, Ian Livingstone as Executive
Directors and Jürgen Post, Emily Greer, and Addie Pinkster as
Non-Executive Directors (the "Board of Directors").
The registered office of the Company is located at 17, Boulevard
Raiffeisen, L-2411, Luxembourg. The financial year of the Company
starts on 1 January and ends on 31 December; except for he first
financial year which starts on 20 September 2021 (date of
incorporation) and ends on 31 December 2021.
The Company has been established for the purpose of acquiring
one operating business with principal business operations in a
member state of the European Economic Area, the United Kingdom or
Israel, in the form of a merger, capital stock exchange, share
purchase, asset acquisition, reorganization or similar transaction
(the " Business Combination " ).
The Company is seeking a suitable target for the Business
Combination with a focus on targets operating in the sectors of
Video Games, Esports, Interactive Streaming, GenZ Social Networks,
Connected Fitness & Wellness and Metaverse Technologies. The
Company has 15 months from the date of the admission to trading;
being 7 February 2022; to consummate a Business Combination, plus
an initial three-month extension period (the " First Extension
Period " ) and a further three-month extension period (the " Second
Extension Period " ) subject in each case to approval by the
Company ' s shareholders. Otherwise, the Company will be liquidated
and distribute all of its assets to its shareholders, the Public
shares issued during the initial offering (the " Placing " ) will
be redeemed first and then the Company will be liquidated and all
remaining assets will be distributed to remaining shareholders.
Pursuant to Article 3 of the current articles of association,
the Company ' s corporate purpose is the holding, management,
development and disposal of participations and any interests, in
Luxembourg or abroad, in any companies and/or enterprises in any
form whatsoever. The Company may in particular acquire by
subscription, purchase and exchange or in any other manner any
stock, shares and other participation securities, bonds,
debentures, certificates of deposit and other debt instruments and
more generally, any securities and financial instruments issued by
any public or private entity. It may participate in the creation,
development, management and control of any company and/or
enterprise. It may further invest in the acquisition and management
of a portfolio of patents or other intellectual property rights of
any nature or origin.
The Company may borrow in any form. It may issue notes, bonds
and any kind of debt and equity securities. The Company may lend
funds, including without limitation, resulting from any borrowings
of the Company and/or from the issue of any equity or debt
securities of any kind, to its Subsidiaries, affiliated companies
and/or any other companies or entities it deems fit.
The Company may further guarantee, grant security in favour of
or otherwise assist the companies in which it holds a direct or
indirect participation or which form part of the same group of
companies as the Company. The Company may further give guarantees,
pledge, transfer or encumber or otherwise create security over some
or all of its assets to guarantee its own obligations and those of
any other Company, and generally for its own benefit and that of
any other Company or person. For the avoidance of doubt, the
Company may not carry out any regulated activities of the financial
sector without having obtained the required authorization.
The Company may use any techniques and instruments to manage its
investments efficiently and to protect itself against credit risks,
currency exchange exposure, interest rate risks and other risks.
The Company may, for its own account as well as for the account of
third parties, carry out any commercial, financial or industrial
operation (including, without limitation, transactions with respect
to real estate or movable property) which may be useful or
necessary to the accomplishment of its purpose or which are
directly or indirectly related to its purpose.
2. Basis of preparation and accounting policies
2.1 Basis of preparation
The group ' s financial year starts on 1 January and ends on 31
December of each year, with the exception of the first financial
period, which started on 20 September 2021 (date of incorporation)
and ended on 31 December 2021.
The Group's consolidated financial statements for the period
ended 31 December 2021 have been delivered to the Luxembourg Trade
and Companies Register (Registre de Commerce et des Société, in
abbreviated "RSC"). The Group's Independent Auditor's report on
those accounts were unqualified.
The consolidated financial statements comprise a consolidated
statement of financial position, a consolidated statement of
comprehensive income, a consolidated statement of changes in
equity, a consolidated statement of cash flows and the accompanying
notes for the year ended 31 December 2022. These consolidated
financial statements have been prepared under the assumption that
the Group operates on a going concern basis.
These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union for the period from 1 January 2022
to 31 December 2022 and were authorised for issue in accordance
with a resolution of the Board of Directors 28 April 2023.
These consolidated financial statements have been prepared in
Sterling (GBP) unless stated otherwise.
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the periods
presented, unless otherwise stated.
2.2 Summary of significant accounting policies
The consolidated financial statements have been prepared in
accordance with the accounting policies adopted in the Group ' s
most recent annual financial statements for the period ended 31
December 2022.
2.2.1 New or revised Standards or Interpretations
International accounting standards include IFRS, IAS
(International Accounting Standards) and their interpretations
(Standing Interpretations Committee) and IFRICs (International
Financial Reporting Interpretations Committee).
The repository adopted by the European Commission is available
on the following internet site:
http://data.europa.eu/eli/reg/2008/1126/2023-01-01
(a) New standards, amendments and interpretations that were
issued but not yet effective as at
31 December 2022 and that are most relevant to the Company - not
yet endorsed by the EU:
-- Amendments to IAS 1 -: Classification of Liabilities as
Current or Non-current. In January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the requirements for
classifying liabilities as current or non-current. The amendments
are effective for annual reporting periods beginning on or after 1
January 2023 and must be applied retrospectively.
(b) New standards, amendments and interpretations that were
issued but not yet effective as at
31 December 2022 and that are most relevant to the Company -
endorsed by the EU:
-- Amendments to IAS 1 and IFRS Practice Statement 2 :
Disclosure of Accounting policies. In February 2021, the IASB
issued amendments that are intended to help preparers in deciding
which accounting policies to disclose in their financial
statements. The amendments are effective for annual periods
beginning on or after 1 January 2023.
-- Amendments to IAS 8: Definition of Accounting Estimate. In
February 2021 , the IASB issued amendments to help entities to
distinguish between accounting policies and accounting estimates.
The amendments are effective for annual periods beginning on or
after 1 January 2023.
-- Amendments to IAS 12 - not yet endorsed by the EU: Deferred
Tax related to Assets and Liabilities arising from a Single
Transaction. In May 2021, the IASB amended the standard to reduce
diversity in the way that entities account for deferred tax on
transactions and events, such as leases and decommissioning
obligations, that lead to the initial recognition of both an asset
and a liability. The amendments apply for annual reporting periods
beginning on or after 1 January 2023 and may be applied early.
The initial application of these standards, interpretations, and
amendments to existing standards is planned for the period of time
from when its application becomes compulsory. Currently, the Board
of Directors anticipates that the adoption of these Standards and
Interpretations in future periods will have no material impact on
the financial information of the Group.
2.2.2 Basis of consolidation
Subsidiaries
Subsidiaries included in these consolidated financial statements
are all entities over which the Company has direct or indirect
control. The Group controls such an entity when it is exposed to,
or has substantive rights to, variable returns from its involvement
with the Group and has the ability to affect those returns through
its power to direct the activities of the entities. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Company until the date on which control
ceases.
Intercompany transactions, outstanding balances, and unrealised
gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group.
Non-controlling interests in the net result/(loss) and equity of
the subsidiaries are shown separately in the consolidated statement
of financial position, consolidated statement of comprehensive
income and consolidated statement of changes in equity.
2.2.3 Foreign currencies
Functional and presentation currency
Items included in the financial statements of each of the Group
' s entities are measured using the currency of the primary
economic environment in which the entity operates ( " the
functional currency " ). The consolidated financial statements are
presented in Sterling (GBP).
Foreign currency transactions and balances
In preparing these consolidated financial statements of the
Group, transactions in currencies other than the entity ' s
functional currency (foreign currencies) are recognised at the
rates of exchange prevailing on the dates of the transactions. At
each reporting date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non monetary items carried at fair value
that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined.
Nonmonetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
year in which they arise except for exchange differences on
monetary items related to deferred costs included in trade
payables; which are recognised directly in deferred cost.
2.2.4 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. The Company recognises a financial
asset or a financial liability when it becomes a party to the
contractual provisions of the instrument. Purchases or sales of
financial assets that require delivery of assets within the time
frame generally established by regulation or convention in the
marketplace (regular way trades) are recognised on the trade date
i.e. the date that the Company commits to purchase or sell the
asset.
Recognition and derecognition
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires. When an existing financial
liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original
liability and the recognition of new liability. The difference in
the respective carrying account is recognised in the statement of
profit or loss.
Classification and measurement of financial assets
All financial assets are initially measured at fair value plus,
in the case of financial assets that are not measured at fair value
through profit and loss, transaction costs.
Financial assets are classified into one of the following
categories:
-- amortised cost,
-- fair value through profit or loss (FVTPL), or
-- fair value through other comprehensive income (FVOCI).
Financial assets measured at amortised cost: This is the
category most relevant to the Group. A debt instrument is measured
at amortised cost if it is held within a business model whose
objective is to hold financial assets in order to collect
contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding. Financial assets
at amortised cost are subsequently measured using the effective
interest rate (EIR) method and are subject to impairment. Gains and
losses are recognised in profit and loss when the asset is
derecognised, modified or impaired.
The Group includes in this category cash and cash equivalents
and cash in escrow ( " restricted cash " ).
In the period presented the Group includes Derivative financial
instruments as financial assets categorised as FVTPL.
All revenue and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables (when applicable) which is presented within other
expenses.
Impairment of financial assets
IFRS 9 ' s impairment requirements use forward-looking
information to recognise expected credit losses - the ' expected
credit loss (ECL) model ' . Instruments within the scope of the
requirements include financial assets at amortised cost, cash and
cash equivalent and restricted cash as well as debt instruments at
fair value through other comprehensive income and trade receivable
when applicable.
The Group considers a broader range of information when
assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable and
supportable forecasts that affect the expected collectability of
the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made
between:
-- financial instruments that have not deteriorated
significantly in credit quality since initial recognition or that
have low credit risk ( ' Stage 1 ' ).
-- financial instruments that have deteriorated significantly in
credit quality since initial recognition and whose credit risk is
not low ( ' Stage 2 ' ).
-- ' Stage 3 ' would cover financial assets that have objective
evidence of impairment at the reporting date.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected
life of the financial instrument.
Classification and measurement of financial liabilities
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, or
financial liabilities at amortised cost.
Financial liabilities are initially measured at fair value,
adjusted for transaction costs where applicable except for those
financial liabilities that are measured at fair value through
profit or loss.
Financial liabilities recognized at amortised cost are
subsequently measured, using the effective interest method. Gains
and losses are recognised in profit or loss when the liabilities
are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by considering any discount or
premium on acquisition and incremental fees or costs. The EIR
amortisation is included as finance costs in the statement of
profit or loss.
The Group includes in this category Redeemable Class A Shares
and trade and other payables, while the Public and Sponsor warrants
are classified as financial liabilities at fair value through
profit and loss.
All interest-related charges and, if applicable, changes in an
instrument ' s fair value that are reported in profit or loss are
included within finance costs or finance income.
Offsetting financial instruments
Financial instruments are offset and a net amount reported in
the statement of financial position only when there is currently a
legally enforceable right to offset the recognised amounts and
there is an intention to settle on a net basis, or realise the
asset and settle the liability simultaneously.
2.2.5 Cash and restricted cash
Cash in the statement of financial position comprise cash at
banks and on hand and short-term highly liquid deposits with a
maturity of three months or less, that are readily convertible to a
known amount of cash and subject to an insignificant risk of
changes in value. The carrying amounts of these approximate their
fair value.
Restricted cash included in the statement of financial position
comprise of cash at bank in Escrow accounts under the terms of an
Escrow Agreement and in accordance with the requirements set out in
Listing Rule 5.6.18A(2), with a maturity of three months or less,
that are readily convertible to a known amount of cash and subject
to an insignificant risk of changes in value. The carrying amounts
of these approximate their fair value.
For the purpose of the consolidated statement of cash flows,
cash and cash equivalents consist of cash and short-term deposits,
as defined above, net of outstanding bank overdrafts as they are
considered an integral part of the Group ' s cash management.
2.2.6 Fair value measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability; or
-- In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible
by the Group.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant ' s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
-- Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable.
-- Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy, as explained above.
2.2.7 Provisions and contingent liabilities
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of economic resources will be required
from the Group and a reliable estimate can be made of the amount of
the obligation. The timing or amount of the outflow may still be
uncertain.
Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to
settle the present obligation, based on the most reliable evidence
available at the reporting date, including the risks and
uncertainties associated with the present obligation. Where there
are a number of similar obligations, the likelihood that an outflow
will be required in settlement is determined by considering the
class of obligations as a whole.
If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time
is recognised as a finance cost.
Any reimbursement that the Group is virtually certain to collect
from a third party with respect to the obligation is recognised as
a separate asset. However, this asset may not exceed the amount of
the related provision.
No liability is recognised if an outflow of economic resources
as a result of a present obligation is not probable. Such
situations are disclosed as contingent liabilities unless the
outflow of resources is remote.
2.2.8 Trade payables, other payables and accrued expenses
Trade payables, other payables and accrued expenses are
obligations to pay for services that have been acquired in the
ordinary course of business. They are classified as current
liabilities if payment is due within twelve months after statement
of financial position date. If not, they are represented as
non-current liabilities.
2.2.9 Taxation
Income tax recognized in the statement of profit or loss and
other comprehensive income includes current and deferred taxes.
Current tax
Current income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the tax
authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the
reporting date in the countries where the Group operates and
generates taxable income.
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognised in other comprehensive
income or directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the
business combination.
Deferred tax
Deferred tax is recognized on temporary differences between the
carrying amount of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the
computation of taxable profit.
Deferred tax liabilities are generally recognized for all
taxable temporary differences. Deferred tax assets are generally
recognized for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against
which those deductible temporary differences can be utilized.
Deferred tax assets are tested for impairment on the basis of a tax
planning derived from management business plans.
Such deferred tax assets and liabilities are not recognized if
the temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
2.2.10 Current versus non-current classification
The Group presents assets and liabilities in the statement of
financial position based on current/non-current classification.
An asset is current when it is:
-- expected to be realised or intended to be sold or be consumed in normal operating cycle;
-- held primarily for the purpose of trading;
-- expected to be realised within twelve months after the reporting period; or
-- cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is current when:
-- it is expected to be settled in normal operating cycle;
-- it is held primarily for the purpose of trading;
-- it is due to be settled within twelve months after the reporting period; or
-- there is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non-current.
2.2.11 Operating expenses
Operating expenses are recognised in profit or loss upon
utilisation of the service or as incurred.
2.2.12 Share-based payments
The Board is currently assessing whether certain class B shares
and class B warrants issued to the Sponsor of the Company are to be
considered as falling in the scope of IFRS 2. The Board will
notably adopt its position based on market discussions and/or
positions adopted by market players, supervisory authorities and/or
standard setters.
In any case, the class B shares and class B warrants do not
carry a specified service period, but would be forfeited or
otherwise expire worthless if a business combination is not
consummated. Therefore, the Sponsor only derive the value from the
class B shares and class B warrants when they are converted into
class A shares upon a successful business combination.
Consequently, the grant date of these awards does not occur until
the target is approved. As of 31 December 2022, irrespective of the
conclusions of the ongoing assessment carried out by the Board, no
amounts would have had to be accounted for provided that no such
approval has occurred.
2.2.13 Equity-settled transactions
The cost of equity-settled transactions is determined by the
fair value at the date when the grant is made using an appropriate
valuation model. That cost is recognised in as part of other
operating expenses in the consolidated statement of comprehensive
income, together with a corresponding increase in equity, over the
period in which the service and, where applicable, the performance
conditions are fulfilled (the vesting period). The cumulative
expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which
the vesting period has expired and the Group ' s best estimate of
the number of equity instruments that will ultimately vest. The
expense or credit in the consolidated statement of comprehensive
income for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into
account when determining the grant date fair value of awards, but
the likelihood of the conditions being met is assessed as part of
the Group ' s best estimate of the number of equity instruments
that will ultimately vest. Market performance conditions are
reflected within the grant date fair value. Any other conditions
attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair value of an award
and lead to an immediate expensing of an award unless there are
also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest
because non-market performance and/or service conditions have not
been met. Where awards include a market or non-vesting condition,
the transactions are treated as vested irrespective of whether the
market or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the
minimum expense recognised is the grant date fair value of the
unmodified award, provided the original vesting terms of the award
are met. An additional expense, measured as at the date of
modification, is recognised for any modification that increases the
total fair value of the share-based payment transaction, or is
otherwise beneficial to the recipient of the share-based payment.
Where an award is cancelled by the entity or by the counterparty,
any remaining element of the fair value of the award is expensed
immediately through profit or loss.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share.
3. Significant accounting judgements, estimates and assumptions
The preparation of these consolidated financial statements in
accordance with IFRS requires The Board of Directors to make
judgements, estimates and assumptions that affect the application
of policies and the reported amounts of assets and liabilities and
income and expenses. The estimates and associated assumptions are
based on various factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making
the judgements about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
As at 31 December 2022, the significant areas of estimates,
uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amounts recognised in
these consolidated financial statements are the following:
-- Classification of Redeemable Class A Shares: The Board
assessed the classification of Redeemable Class Shares in
accordance with IAS 32, Financial Instruments: Presentation, under
which the Redeemable Class A Shares do not meet the criteria for
equity treatment and must be recorded as liabilities. The
Redeemable Class A Shares features certain redemption rights that
are considered to be outside of the Company ' s control and subject
to occurrence of uncertain future events. Accordingly, the Company
classifies the Redeemable Class A Shares as financial liabilities
at amortised cost in accordance with IFRS 9. The transaction costs
directly attributable to issuance of the Redeemable Class A shares
are deducted against the initial fair value.
-- Classification of Non- Redeemable Class A Shares: The Sponsor
and the Company ' s directors have entered into a Lock-up and
Waiver Agreement with the Company, pursuant to which they have
waived their rights to liquidating distributions from the Escrow
Account with respect to any Sponsor Shares, Sponsor Warrants,
Overfunding Shares, Overfunding Warrants and any Public Shares
acquired upon conversion or exercise thereof held by them if the
Company fails to complete the Initial Business Combination by the
Business Combination Deadline. Consequently, the proceeds of the
Sponsor shares and overfunding shares are not redeemable.
Accordingly, the Company classifies these Non-Redeemable Class A
Shares as Equity, and the proceeds from the subscription of such
Non-Redeemable Class A Shares are classified to equity under share
capital and share premium in the consolidated statement of
financial position, in line with the initial allocation of the
subscription price, the surplus being considered as a capital
contribution (share premium).
-- Classification and measurement of Warrants: The Board
assessed the classification of warrants in accordance with IAS 32
under which the warrants do not meet the criteria for equity
treatment and must be recorded as derivatives. Accordingly, the
Company classifies the Class A warrants and Class B warrants as
liabilities at fair value and adjust them to fair value at each
reporting period. This liability is subject to re-measurement at
each balance sheet date until exercised, and any change in fair
value is recognized in the consolidated statement of comprehensive
income. The fair value of Class A and B warrants is determined by
applying the average product of the Binomial Tree (BOPM) and M onte
Carlo valuations methods.
Going Concern
As at the date of these Consolidated financial statements, the
Company is not in sufficiently advanced discussions with any
potential targets to enable the Public Shareholders to consider and
vote on a potential Initial Business Combination. The Company ' s
initial deadline to complete an Initial Business Combination is 7
May 2023 and the Articles permit an initial three-month extension
period, followed by a further three-month extension period, in each
case with the approval of a simple majority of the holders of all
Ordinary Shares. However, the Board considers that these permitted
extensions are unlikely to provide sufficient time to permit the
Company to evaluate target companies, to agree terms on a potential
business combination, to seek agreement on financing requirements,
and to implement the necessary steps for readmission under the UK
Listing Rules in order to complete an Initial Business Combination.
Accordingly, on 4 April 2023 the Company gave notice convening an
EGM to be held on 5 May 2023 to consider, and if thought fit, to
approve the extension of the business combination deadline to 7
February 2024 by way of an amendment to the Articles.
As at the date of Consolidated financial statements, it is
therefore uncertain whether the Company will extend its business
combination deadline to 7 February 2024 and continue to seek an
Initial Business Combination, or if it will instead proceed to
redeem its Public Shareholders and cancel the listing and trading
of the Company ' s Public Shares and Public Warrants on the London
Stock Exchange following expiry of the initial business combination
deadline of 7 May 2023. In any event, if the current or any
extended business combination deadline expires without the Company
having completed an Initial Business Combination and the Company
undertakes a redemption and delisting of its Public Shares and
Public Warrants as described above, the Board intends for the
Company to continue as a privately held company and has no
intention to commence liquidation or winding up of the Company in
the next 12 months.
The Board, having considered the financial position of the Group
for a period of least 12 months from the date of approval of the
financial statements, have a reasonable expectation and belief that
the Company has adequate resources to continue in operational
existence for the foreseeable future given the available cash and
forecast cash outflows.
In particular, the Board reviewed the Group ' s committed
expenses for the period which leaves a significant cash buffer in
excess of GBP 1,1million. As these committed expenses are in line
with signed engagement letters or agreements, management takes
comfort that these expenses can be reliably measured and factored
into their budgeting.
In addition, the Board has noted that the Group ' s policy is
that no dividend will be declared until after a successful Business
Combination to ensure that capital is maintained in the period
prior to the Business Combination.
As at 31 December 2022, other than the effects of the COVID --
19 pandemic and the war in Ukraine, which have been considered by
the directors, there were no other significant areas of estimation,
uncertainty and critical judgements which were applied.
4. Financial risk management, objectives and policies
The Group is newly formed and has not conducted any operations
and currently generates no revenue. The Group does not have
material foreign currency transactions. Hence, currently the Group
does not face foreign currency risks nor any interest rate risks as
the financial instruments of the Group bear a fixed interest
rate.
Liquidity risks
Liquidity risk is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due.
The Placing was completed on 7 February 2022. 100% of the gross
proceeds of this Placing were deposited in an escrow account (the "
Escrow Account " ). The amount held in the Escrow Account will only
be released in connection with the completion of the Business
Combination or the Company ' s liquidation. The Board of Directors
believes that the funds available to the Group outside of the
escrow deposit account, together with the available shareholder
loan will be sufficient to pay costs and expenses which are
incurred by the Group prior to the completion of the Business
Combination.
The objective of the Sponsor Warrants issued to the Sponsor at
the time of the Placing, was to use the proceeds to pay the various
costs and expenses incurred and contracted for as disclosed in the
consolidated financial statements for the 12 months ended 31
December 2022, except the underwriting commission. The proceeds
from the Placing of Public Shares were not to be used to pay these
expenses.
The Sponsor has committed additional funds to the Company
through the Overfunding Subscription, the proceeds of which is held
in the Escrow Account. The purpose of the overfunding subscription
is to provide additional cash funding into the Escrow Account, in
addition to the funding from the proceeds of the Units sold in the
Placing, for the redemption of the Public Shares by Public
Shareholders ( " Initial Overfunding Shares " ).
The Initial Overfunding Shares and Initial Overfunding Warrants
were not part of the Placing but were part of the applications for
Shares Admissions and Warrants Admission which took place on 24
February 2022.
To the extent that the Business Combination Deadline is
extended, the Sponsor will commit further additional funds to the
Company through the subscription of additional units as referred to
in Part VIII. 4 of the Prospectus.
The following table illustrates the Group's expected liquidity
of assets held:
Less than 1-12
1 month months Total
GBP GBP GBP
At 31 December 2022
Total assets 1,181,344 120,102,321 121,283,665
---------- ------------ ------------
At 31 December 2021
Total assets 30,000 731,407 761,407
---------- ------------ ------------
The table below analyses the Group's financial liabilities into
relevant maturity based on the remaining period at the statement of
financial position date to the contractual maturity date. The
amounts in the table are the contractual undiscounted cash
flows.
Between
Less than 1-5 More than
1 year years 5 years Total
GBP GBP GBP GBP
At 31 December 2022
Trade and other
payables 162,116 - - 162,116
Taxes payable 294,817 - - 294,817
Redeemable class A
shares 108,335,684 - - 108,335,684
Class A warrants at
fair value - 6,396,300 - 6,396,300
Class B warrants at
fair value - 8,586,000 - 8,586,000
Total liabilities 108,792,617 14,982,300 - 123,774,917
-------------------- ------------------------- -------------------- ------------
At 31 December 2021
Trade and other
payables 883,695 - - 883,695
Total liabilities 883,695 - - 883,695
-------------------- ------------------------- -------------------- ------------
Capital management
As at 31 December 2022, the Group has a negative equity of GBP
2,491,252. However, the Board of Directors believes that the funds
available to the Group outside of the Escrow Account are sufficient
to pay costs and expenses incurred by the Company prior to the
completion of the Initial Business Combination. The Group has
non-current liabilities which do not impose any liquidity issues to
the Group. The Class A Warrants designated as "Initial Overfunding
Warrants" in the Prospectus and the Class B Warrants designated as
the "Sponsor Warrants" in the Prospectus, which together represent
a liability of GBP 8,586,000 as at 31 December 2022, have no
redemption rights or liquidation distribution rights and will
expire worthless in case of liquidation. Furthermore, the Public
Warrants, which represent a liability of GBP 6,396,300 as at 31
December 2022, are redeemable at the option of the Company.
Credit risk
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is currently exposed to
credit risk from its deposits with banks. The Group has placed its
cash with a prime financial institution with a credit rating of A1,
with a stable outlook, by the rating agency Moody's.
The Group's maximum exposure to credit risk is detailed in the
table below:
20 Sept
1 Jan 2022 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Restricted cash 120,008,667 -
Cash and cash equivalents 1,181,344 30,000
Prepayments 93,654 -
--------------------- ------------------------
121,283,665 30,000
--------------------- ------------------------
5. Other operating expenses
The other operating expenses of GBP 745,626 (2021: GBP 152,560)
consist of fees for accounting, legal, and other services not
related to the placing.
20 Sept
1 Jan 2022 2021
to to
31 Dec
2022 31 Dec 2021
GBP GBP
Accounting, tax consulting, auditing and
similar fees 249,471 151,407
Bank charges and commissions 2,500 -
Director's fees 27,348 -
Legal, litigation and
similar fees 72,575 -
Notarial and similar
fees 9,532 1,153
Other professional fees 110,706 -
Contributions to professional
associations 3,892 -
Third-party insurance 269,602 -
745,626 152,560
---------------- ----------------------
The total audit fees paid breaks down as follows:
20 Sept
1 Jan 2022 2021
to to
31 Dec
2022 31 Dec 2021
GBP GBP
Audit fees 93,309 98,280
Audit-related fees - 122,850
----------- ------------
Total 93,309 221,130
----------- ------------
6. Income Tax
20 Sept
1 Jan 2022 2021
to to
31 Dec 31 Dec
2022 2021
GBP GBP
Loss for the period
before tax (5,254,381) (152,288)
Theoretical tax charges applying tax rate
24.94% (2021: 22.8%) (1,310,443) (34,722)
Reconciling items:
Non deductible expenses:
Amortisation- Redeemable Public Shares
placing costs 580,577 -
Fair value adjustments- Public
Warrants 118,166 -
Fair value adjustments- Sponsor
Warrants 819,528 -
Other:
Unrecognised deferred
tax assets on tax losses 179,158 34,722
Effect of different
tax rates in other countries (92,169) -
------------
294,817 -
------------ ----------------------
Deferred tax
Deferred tax assets have not been recognised in respect of the
loss incurred during the period ended 31 December 2022 because it
is not probable that future taxable profit will be available
against which the Group can utilise the benefits therefrom. Unused
tax losses of the Group can be used within a period of 17 years as
per Luxembourg tax law.
7. Earnings /(loss) per share
Basic earnings/(loss) per share ( " EPS " ) is calculated by
dividing the profit/(loss) for the period attributable to ordinary
equity holders of the Group by the weighted average number of
ordinary shares outstanding during the period.
Diluted EPS is calculated by dividing the profit/(loss)
attributable to ordinary equity holders of the Group by the
weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would
be issued on conversion of all the dilutive potential ordinary
shares into ordinary shares.
Currently, no diluting instruments are exercisable. Therefore,
basic EPS equals diluted EPS as at 31 December 2022.
31 Dec
2022 31 Dec 2021
GBP GBP
Loss for the year/period (5,549,198) (152,288)
Weighted average number of ordinary shares 13,552,384 3,750,000
Basic and diluted EPS (0.41) (0.04)
------------ ------------
8. Deferred costs
As at 31 December 2022 there are no deferred costs. As at 31
December 2021 Deferred cost of GBP 731,407 comprised of legal costs
incurred by the Company in relation to the public offering which
was offset against the Sponsor Warrants after the Placing during
the year ended 31 December 2022.
9. Cash and cash equivalents
31 Dec
2022 31 Dec 2021
GBP GBP
Restricted cash 120,008,667 -
Cash and cash equivalents 1,181,344 30,000
121,190,011 30,000
---------------- ----------------------
Pursuant to the terms of the Escrow Agreement and in accordance
with the requirements set out in Listing Rule 5.6.18A(2), the
Company may only direct the release of cash held in escrow ( "
restricted cash " ) upon the occurrence of a payment event, being
any of:
-- redemption by any holder of Public Shares in connection with
the completion of an Initial Business Combination (which has been
approved by the Board of Directors and the Required Majority at the
General Meeting, in each case in accordance with the requirements
of the Articles of Association);
-- the redemption of any Public Shares properly submitted in
connection with a Shareholder vote to amend the Articles of
Association (A) to modify the substance or timing of the Company's
obligation to allow redemption in connection with the Initial
Business Combination or to redeem 100% of the Public Shares if the
Company does not complete the Initial Business Combination by the
Business Combination Deadline or (B) with respect to any other
material provisions relating to Shareholders ' rights or
pre-Initial Business Combination activity;
-- the passing of the Business Combination Deadline without the
Company completing an Initial Business Combination;
-- approval by the Board of the Initial Business Combination,
and the Required Majority adopting a resolution to approve the
Initial Business Combination prior to the Business Combination
Deadline, in each case in accordance with the requirements of the
Articles of Incorporation;
-- the winding-up or liquidation of the Company; or income tax
on interest earned (if any) on the funds in escrow becoming payable
by the Company.
10. Prepayments
20 Sept
1 Jan 2022 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Prepaid FCA fees 5,756 -
Prepaid D&O insurance 87,898 -
93,654 -
----------------------- ------------------------
11. Issued capital and reserves
As at 31 December 2021, the subscribed share capital amounted to
GBP 30,000 consisting of 3,750,000 Class B ordinary shares with no
par value held by the Sponsor, hereinafter referred to as the "
Sponsor Shares " . The Company ' s share capital may be increased
or reduced by a resolution of the general meeting of shareholders
adopted in the manner required for an amendment of the articles of
association.
On 2 February 2022, the existing 3,750,000 Sponsor Shares were
converted into 2,875,000 Sponsor Shares representing the entire
issued share capital of GBP 30,000.
It is planned that these Sponsor Shares shall convert into
Public Shares subject to a certain schedule and trading price
following the consummation of the Business Combination. The Sponsor
Shares will convert into a number of Public Shares such that the
number of Public Shares issuable to the Sponsor upon conversion of
all Sponsor Shares will be equal, in the aggregate, on an as
converted basis, to 20% of the total ordinary shares in issue
following the Placing.
On 2 February 2022 the Company ' s Prospectus was approved and
published on the London Stock Exchange.
On 2 February 2022, the capital of the Company was increased by
the issuance of 10,350,000 Redeemable Class A Shares (the "Public
Shares"), each share being issued in the form of a unit consisting
of one Public Share with the right to receive one half of a Public
Warrant. These Public Shares have been fully paid up by a
contribution in cash of GBP 103,500,000.
On the same day, the capital of the Company was increased by the
issuance of another 1,150,000 Redeemable Class A Shares (the
"Option Shares") through a second Capital Increase. These Option
Shares have been fully paid up by a contribution in cash of GBP
11,960. A complementary amount of GBP 11,488,040 (GBP 9.9896 per
Option Share) was allocated to account 115 of the Company and was
intended to be paid on the option closing period.
Because they are redeemable under certain conditions, the
11,500,000 Redeemable Class A Shares do not meet the definition of
an equity instrument as per IAS 32. Hence these Redeemable Class A
Shares are considered as debt instruments from an accounting
standpoint.
On 2 February 2022, the Sponsor subscribed to 310,500 units at a
price of GBP 10 per unit, each unit consisting of one
Non-Redeemable Class A Share cum right to receive one half Public
Warrant. Being non-redeemable, these shares qualify as equity
instruments under IAS 32. Hence they resulted in an increase of the
share capital from GBP 30,000 to GBP 33,229.20, the remaining of
the subscription price being allotted to the share premium
account.
On 7 February 2022, the 11,500,000 Redeemable Class A Shares
were admitted to the standard listing segment of the Official List
of the Financial Conduct Authority and to trading on the London
Stock Exchange's Main Market for listed securities under ticker
"HMA1".
On 7 February 2022 Citigroup Global Markets Limited, acting as
Stabilisation Manager, gave notice of the non-exercise by it of the
put option granted by the Company to the Stabilisation Manager (the
" Put Option " ), as no stabilisation was undertaken.
On 7 February 2022, further to the non-exercise of the Put
Option, the Sponsor subscribed to another 34,500 units at a price
of GBP 10 per unit, each unit consisting of one Non-Redeemable
Class A Share cum right to receive one half Public Warrant, hence
resulting in an increase of the share capital on 8 February 2022
from GBP 33,229.20 to GBP 36,817, the remaining of the subscription
price being allotted to the share premium account.
The non-exercise of the Put Option and the Overfunding Shares
Subscription brought the total number of Class A Shares to
11,845,000, of which 11,500,000 Redeemable Class A Shares and
345,000 Non-Redeemable Class A Shares.
The Company initially recognised the units subscribed by the
Sponsor as 345,000 Non- Redeemable Class A Shares at GBP 9.50 per
share and GBP 1 per full warrant. The Company initially recognised
these Non-Redeemable Class A shares at GBP 3,180,234, net of
transaction costs attributable to these shares amounting to GBP
97,266.
As at 31 December 2022, the issued share capital of the Company
amounts to GBP 156,417.20 from a legal standpoint, represented by
eleven million eight hundred 11,845,000 Public Shares without
nominal value and 2,875,000 Sponsor Shares without nominal value.
The total number of voting rights in the Company is 14,720,000.
From an accounting standpoint, considering that the Redeemable
Class A Shares do not meet the definition of an equity instrument
as per IAS 32, they are classified as debt instruments in the
consolidated financial statements. Therefore, the share capital in
the consolidated financial statements is only comprised of the
Class B Shares, also referred to as the " Sponsor Shares " , and
the Non-Redeemable Class A Shares, for a total amount of GBP 36,817
as at 31 December 2022, and a share premium of GBP 3,173,417 in the
share premium account.
Authorised capital
On 2 February 2022, the Board of Directors approved the increase
of the authorised capital of the Company from GBP 1,000,000
(consisting of 1,000,000,000 Public Shares) to GBP 1,122,829.20
(consisting of 1,011,810,500 Public Shares), and authorised the
Board of Directors of the Company, to issue Public Shares, to grant
options or warrants to subscribe for Public Shares and to issue any
other instruments giving access to such shares within the limits of
the authorised capital to such persons and on such terms as they
shall see fit and specifically to proceed with the issue of up to
one billion and eleven million eight hundred and ten thousand five
hundred (1,011,810,500) Public Shares without nominal value and
with removal or limitation of the preferential right to subscribe
to the Public Shares, as applicable, issued for the existing
shareholders of the Company.
Legal reserves
The Company is required to allocate a minimum of 5% of its
annual net profit to a legal reserve, until this reserve equals 10%
of the subscribed share capital. This reserve may not be
distributed.
12. Non-current liabilities
12.1 Redeemable Class A ordinary shares without nominal value
As referred to in note 11, the Company issued 11,500,000
Redeemable Class A Shares and allocated GBP 9.50 of the proceed per
Units to the share price and GBP 1 to each full warrant. The
Company initially recognised the redeemable Class A shares at
amortised cost valued at GBP 106,007,791, net of transaction costs
attributable to these shares amounting to GBP 3,242,209.
Transaction costs are incremental costs that are directly
attributable to the issuance of the Class A shares and its
subsequent listing on the London Stock Exchange were deducted from
its initial cost. The transaction costs include Listing Fees, legal
fees, audit fees, accounting and administration fees, agency fees
and FCA fees.
As at 31 December 2022, the amortized cost of the redeemable
Class A shares amounts to GBP 108,335,684 after amortisation of GBP
2,327,893 calculated using the EIR method. This amortization is
presented as part of finance costs in the statement of
comprehensive income. The fair value of redeemable Class A shares
is GBP 115,287,500 based on its quoted price (level 1) as of 31
December 2022.
Redemption Rights: The Company will provide its Class A Public
Shareholders with the opportunity to redeem all or a portion of
their Public Shares, exercisable prior to the completion of the
Initial Business Combination irrespective of whether and how they
vote at the General Meeting convened to approve the Initial
Business Combination. Public Shareholders seeking redemption of
their Public Shares must submit a valid request for redemption to
the Company in accordance with the terms to be set out in the
circular in relation to the shareholder vote on the Initial
Business Combination at the General Meeting, which will be
published by the Company following the approval of the Initial
Business Combination by the Board of the Company.
In terms of the Waiver and Lock Up Deed entered into by the
Sponsor; each Insider and the Company; the Sponsor and each Insider
agreed to not propose any amendment to the Company ' s amended and
restated memorandum and articles of association: (a) to modify the
substance or timing of the Company ' s obligation to allow
redemptions in connection with the Business Combination; (b) to
modify the substance or timing of the Company ' s obligation to
redeem 100% of the Public Shares if the Company does not complete a
Business Combination by the Business Combination Deadline; or (c)
with respect to any other material provisions relating to
shareholders ' rights or pre-Business Combination activity, in each
case, unless the Company provides its Public Shareholders with the
opportunity to redeem their Public Shares upon approval of any such
amendment at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Escrow Account, including
interest earned on the funds held in the Escrow Account and not
previously released to the Company to pay its taxes, divided by the
number of then issued and outstanding Public Shares.
12.2 Public Warrants
On 24 February 2022, the Company admitted 5,922,500 Class A
warrants (the " Public Warrants " ) to the standard listing segment
of the Official List of the Financial Conduct Authority and to
trading on the London Stock Exchange's main market for listed
securities under ticker "HM1W " .
The Public Warrants will be exercisable during the " Exercise
Period " , which shall be the period beginning 30 days after the
date on which the Initial Business Combination is completed and
ending at the close of trading on the main market for listed
securities of the London Stock Exchange on the first Business Day
after the fifth anniversary of the Business Combination Completion
Date provided that the Exercise Period shall end earlier (i) upon
redemption of the Public Warrants in accordance with their terms,
(ii) if the Company fails to complete an Initial Business
Combination by the Business Combination Deadline, (iii) or upon any
liquidation of the Company. During the Exercise Period, the Group
may, at its sole discretion, elect to redeem the Public Warrants in
whole but not in part, upon a minimum of 30 calendar days ' prior
written notice of redemption at (i) a redemption price of GBP0.01
per Public Warrant if the closing price of its Public Shares
following the consummation of the Initial Business Combination
equals or exceeds GBP18.00 for any 20 out of 30 consecutive trading
days ending three Business Days before the Company sends the notice
of redemption; or (ii) a redemption price of GBP0.10 per Public
Warrant if the closing price of its Public Shares for any 20 out of
30 consecutive trading days following the consummation of the
Initial Business Combination, ending three Business Days before the
Company sends the notice of redemption equals or exceeds GBP10.00
but is below GBP18.00, subject to adjustments to the number of
Public Shares issuable upon exercise or the exercise price of a
Public Warrant as described in the company's Prospectus.
Public Warrant holders may exercise their Public Warrants after
such redemption notice is given until the scheduled redemption
date.
There will be no redemption rights or liquidating distributions
with respect to the Public Warrants, which will expire worthless if
the Company fails to complete the Initial Business Combination by
the Business Combination Deadline.
The Public Warrants are classified as derivative liabilities and
were initially recognised at their fair value of GBP 1 per warrant
at the issuance date of 2 February 2022.
As at 31 December 2022, the fair value of Class A warrants was
estimated at GBP 6,395,300 (GBP1.08 per warrant) using the average
of the Binomial Tree and Monte Carlo valuations methods; (level 3),
resulting in the recognition of fair value loss of GBP 473,800 for
the period from issue date to 31 December 2022. The significant
inputs to the valuation model include the contractual terms of the
warrants (i.e. exercise price, maturity), risk-free rates of German
government bonds and volatility of the warrants by reference to
average of the volatility of traded warrants issued by similar
special purpose acquisition companies and of volatility of target
peers, and discount for probability of liquidation of the Company
because not having consummated a business combination by the stated
deadline.
12.3 Sponsor Warrants
On 2 February 2022, the Sponsor agreed and subscribed for an
aggregate of 5,070,000 Class B warrants (the " Sponsor Warrants " )
at a price of GBP 1.00 per Sponsor Warrant (GBP 5,070,000 in the
aggregate), each Sponsor Warrant entitling the holder to purchase
one Public Share at an exercise price of GBP 11.50 per Public
Share. The Sponsor Warrants are not admitted to listing or trading
on any regulated market or trading platform. As at 7 February 2022,
the Put Option (as defined in Note 11) was not exercised, and as a
consequence the Sponsor subscribed for 230,000 additional Sponsor
Warrants at a price of GBP 1.00 per Sponsor Warrant (GBP 230,000 in
the aggregate) to cover the increased underwriting fees payable by
the Company.
As at 31 December 2022, the fair value of Class B warrants was
estimated at GBP 8,586,300 (GBP1.62 per warrant) using the average
of the Binomial Tree and Monte Carlo valuations method; (level 3),
resulting in the recognition of fair value loss of GBP 3,286,000
for the period from issue date to 31 December 2022. The significant
inputs to the valuation model include the contractual terms of the
warrants (i.e. exercise price, maturity), risk-free rates of German
government bonds and volatility of the warrants by reference to
average of the volatility of traded warrants issued by similar
special purpose acquisition companies and of volatility of target
peers, and discount for probability of liquidation of the Company
because not having consummated a business combination by the stated
deadline.
13. Trade and other payables
1 Jan 2022 20 Sept 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Accounting, tax consulting, auditing
and similar fees 117,471 151,135
Directors fees 14,245 -
Deferred costs - 731,407
Notarial and similar
fees - 1,153
Professional fees 30,400 -
----------------- --------------------
162,116 883,695
----------------- --------------------
Trade and other payables are related to legal and other services
received by the Group. The carrying amounts of these approximate
their fair value.
14. Taxes payable
20 Sept
1 Jan 2022 2021
to to
31 Dec
2022 31 Dec 2021
GBP GBP
Corporate Income Tax 294,817 -
-------------- ----------------------
Income Tax
The Parent Company is subject to normal taxation under
Luxembourg tax regulations. The tax expense for the year is
calculated based on the result according to Luxembourg General
Accepted Accounting Principles (LUX GAAP).
The subsidiary is subject to normal taxation under United
Kingdom tax regulations and the tax expense for the year is
calculated based on the results of the subsidiary according to
these tax regulations.
Taxes payable represent the estimated corporate income tax
liability due by the Subsidiary.
15. Related party disclosures
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions.
Transactions with key management personnel
The Board of Directors consists of 6 members.
There are no advances or loans granted to members of the Board
of Directors as at 31 December 2022.
The Company entered into contracts with the non executive
directors effective from the date of the Placing. The agreed
Directors fees of GBP 10,000 per annum are payable semi annually in
arrears, in equal instalments, after deduction of any taxes and
other amounts that are required by law. Director's fees to the
value of GBP 27,348 were paid as at 31 December 2022.
16. Commitments and contingencies
The Group had the following material commitments and
contingencies at 31 December 2022:
The Group entered into an agreement with Citigroup Global
Markets Limited (Underwriting Agreement), by virtue of which the
Company will be liable to pay a deferred commission equal to 3.5%
of the aggregate gross proceeds of the Securities, subject to
completion of Business Combination and payable after such
completion.
The Group entered into contracts with three non-executive
directors which is effective as from the date of the Placing. The
agreed director ' s fees are GBP 10,000 per director, per annum; to
be paid semi-annually in arrears in equal instalments after
deduction of any taxes and other amounts that are required by
law.
During the year, the Group entered into an agreement with a
financial advisor to source and/or evaluate potential
acquisition(s) to be made by the Group. The group is committed to
pay the advisor a monthly retainer of GBP 12,000 until the
engagement is terminated. In terms of the agreement; in respect of
transactions that are already in contemplation, a commission of
0.8% of the relevant Target ' s enterprise value, is payable on the
date of signing of a share purchase agreement; and in respect of
transactions that are introduced to the Group by the advisor; a
commission of 1.25% of the relevant Target ' s enterprise value is
payable on the date of signing of the relevant SPA. These fees
payable in respect of the acquisition of the Target; shall be
reduced by the amount of the Retainer received by the advisor up to
the date that these fees becomes payable. In addition, an incentive
fee of GBP 500,000 is payable at the sole discretion of the Group
by way of the issuance of an equivalent number of ordinary shares
in the capital of the Group at the price at which ordinary shares
are issued by the Group pursuant to any equity raised to support
the acquisition.
The Group has no other material commitments and contingencies as
at 31 December 2022.
17. Events after the reporting period
Since 31 December 2022 the market backdrop for SPACs and public
equity offerings more generally has continued to be challenging.
This climate has not been conducive to completing an Initial
Business Combination. As at the date of this Report of Directors,
the Group is not in sufficiently advanced discussions with any
potential targets to enable the Public Shareholders to consider and
vote on a potential Initial Business Combination.
On 4 April 2023 the Company gave notice convening an EGM to be
held on 5 May 2023 to consider, and if thought fit, to approve the
extension of the business combination deadline to 7 February 2024
by way of an amendment to the Articles.
Should the required majority of the shareholders not vote in
favour of the amendment to the articles, the Company ' s business
combination deadline will expire without a business combination
being completed. In accordance with the Articles, the Company will
redeem in full the Redeemable Class A ordinary shares, the public
warrants will expire worthless and the corresponding liability will
be cancelled, and the Company ' s Redeemable Class A ordinary
shares and Public Warrants will be de-listed from the London Stock
Exchange. The Company may also have to incur additional costs in
relation to its liquidation, which cannot be estimated accurately
at this stage. However, such costs are deemed not material in the
Board ' s opinion.
To the Shareholders of
HIRO METAVERSE ACQUISITIONS I S.A.
Société Anonyme
R.C.S. Luxembourg B 259.488
9, rue de Bitbourg
L-1273 Luxembourg
REPORT OF THE REVISEUR D'ENTREPRISES AGREE
Report on the Audit of the Separate Financial Statements
Opinion
We have audited the separate financial statements of HIRO
METAVERSE
ACQUISITIONS I S.A. (the "Company"), which comprise the separate
statement of financial position as of 31 December 2022, and the
separate statement of comprehensive income, separate statement of
changes in equity and separate statement of cash flows for the year
ended 31 December 2022, and the notes to the separate financial
statements, including a summary of significant accounting
policies.
In our opinion, the accompanying separate financial statements
give a true and fair view of the separate financial position of the
Company as at 31 December 2022, and of its separate financial
performance and its separate cash flows for the period ended 31
December 2022 in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the EU Regulation Ndeg
537/2014, the Law of 23 July 2016 on the audit profession ("Law of
23 July 2016") and with International Standards on Auditing
("ISAs") as adopted for Luxembourg by the "Commission de
Surveillance du Secteur Financier" ("CSSF"). Our responsibilities
under the EU regulation No 537/2014, the Law of 23 July 2016 and
ISAs as adopted for Luxembourg by the CSSF are further described in
the << Responsibilities of "réviseur d'entreprises agréé" for
the Audit of the Financial Statements >> section of our
report. We are also independent of the Company in accordance with
the International Code of Ethics for Professional Accountants,
including International Independence Standards, issued by the
International Ethics Standards Board for Accountants (IESBA Code)
as adopted for Luxembourg by the CSSF together with the ethical
requirements that are relevant to our audit of the financial
statements, and have fulfilled our other ethical responsibilities
under those ethical requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Emphasis of Matter
We draw attention to Note 18 of the separate financial
statements, which describes significant events that occurred after
the reporting period and their potential effects.
Key Audit Matters
Key Audit Matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in
the context of the audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Based on the result of our audit procedures no Key Audit Matters
were identified for the audit of the financial statements as of 31
December 2022.
Other information
The Board of Directors is responsible for the other information.
The other information comprises the information stated in the
Management Report and the Corporate Governance Statement but does
not include the financial statements and our report of the
"réviseur d'entreprises agréé" thereon.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
this fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and Those Charged
with Governance of the Company for the Financial Statements
The Board of Directors is responsible for the preparation and
fair presentation of the financial statements in accordance with
IFRSs as adopted by the European Union and for such internal
control as the Board of Directors determines is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
The Board of Directors is also responsible for presenting and
marking up the separate financial statements in compliance with the
requirements set out in the Delegated Regulation 2019/815 on
European Single Electronic Format, as amended ("ESEF
Regulation").
In preparing the financial statements, the Board of Directors is
responsible for assessing the Company'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 the
Board of Directors either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the
Company's financial reporting process.
Responsibilities of the "Réviseur d'Entreprises Agréé" for the
Audit of the financial statements
The objectives of our audit are to obtain reasonable assurance
about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
a report of the "Réviseur d'Entreprises Agréé" that includes our
opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
accordance with the EU Regulation Ndeg 537/2014, the Law of 23 July
2016 and with ISAs as adopted for Luxembourg by the CSSF 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 financial statements.
As part of an audit in accordance with the EU Regulation Ndeg
537/2014, the Law of 23 July 2016 and with ISAs as adopted for
Luxembourg by the CSSF, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the Board of Directors.
-- Conclude on the appropriateness of Board of Directors' use of
the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the
Company's ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw
attention in our report of the "Réviseur d'Entreprises Agréé" to
the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our
report of the "Réviseur d'Entreprises Agréé". However, future
events or conditions may cause the Company to cease to continue as
a going concern.
-- Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
-- Assess whether the separate financial statements have been
prepared in all material respects with the requirements laid down
in the ESEF Regulation.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and communicate to them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe
these matters in our report unless law or regulation precludes
public disclosure about the matter.
Report on Other Legal and Regulatory Requirements
We have been appointed as "réviseur d'entreprises agréé" on 7
July 2022 and the duration of our uninterrupted engagement,
including previous renewals and reappointments, is 2 year.
The Director's report is consistent with the financial
statements and has been prepared in accordance with applicable
legal requirements.
The Corporate Governance Statement is included in the annual
report. The information required by Article 68ter paragraph (1)
letters c) and d) of the law of
19 December 2002 on the commercial and companies register and on
the accounting records and financial statements of undertakings, as
amended, is consistent with the separate financial statements and
has been prepared in accordance with applicable legal
requirements.
We have checked the compliance of the financial statements of
the Company as at 31 December 2022 with relevant statutory
requirements set out in the ESEF Regulation that are applicable to
the separate financial statements. For the Company it related
to:
- Separate Financial Statements prepared in valid xHTML format;
- The XBRL markup of the Separate Financial Statements using the
core taxonomy and the common rules of markups specified in the ESEF
Regulation.
In our opinion, the separate financial statements of the Company
as of 31 December 2022 have been prepared, in all material
respects, in compliance with the requirements laid down in the ESEF
Regulation.
We confirm that the audit opinion is consistent with the
additional report to the audit committee or equivalent.
We confirm that the prohibited non-audit services referred to in
EU Regulation No 537/2014 were not provided and that we remained
independent of the Company in conducting the audit.
Luxembourg, 28 April 2023
For Mazars Luxembourg, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Fabien DELANTE
Réviseur d'entreprises agréé
1 Jan 2022 20 Sept 2021
to to
Notes 31 Dec 2022 31 Dec 2021
GBP GBP
Other operating expenses 5 (738,626) (152,560)
Taxes, duties and similar expenses (1,393) -
------------ --------------------
Operating loss (740,019) (152,560)
Finance income
Interest income from financial assets 27,593 -
held for cash management purposes
Net gain/(loss) on financial assets 1,256,850 -
and liabilities
------------ ------------------
Finance income 1,284,443 -
Finance costs
Amortisation listing costs 14.1 (2,327,893) -
Fair value gain/(loss) on class A warrants 14.2 (473,800) -
Fair value gain/(loss) on class b warrants 14.3 (3,286,000) -
Foreign currency exchange gains/(losses) (5,929) 272
------------ --------------------
Finance costs (6,093,622) 272
------------ --------------------
Loss before income tax (5,549,198) (152,288)
Income tax 6 - -
------------ --------------------
Loss for the period (5,549,198) (152,288)
Other comprehensive income - -
------------ --------------------
Total comprehensive loss for the period,
net of tax (5,549,198) (152,288)
------------ --------------------
Earnings/(loss) per share attributable
to equity holders
Net earnings per share - basic and diluted 7 (0.41) (0.04)
The accompanying notes form an integral part of these separate
financial statements.
31 Dec
Assets Notes 2022 31 Dec 2021
GBP GBP
Non-current assets
Financial assets at fair value through
profit or loss 8 119,706,851 1
Total non-current assets 119,706,851 1
Current assets
Deferred costs 9 - 731,407
Cash and cash equivalents 10 1,181,344 30,000
Prepayments 11 93,654 -
Trade and other receivables 12 2,500 -
Current assets 1,277,498 761,407
----------- -------------
Total Assets 120,984,349 761,408
----------- -------------
Equity
Share capital 13 36,817 30,000
Share premium 13 3,173,417 -
Accumulated deficit (5,701,486) (152,288)
(2,491,252) (122,288)
Liabilities
Non-current liabilities:
Class A warrants at fair value 14.2 6,396,300 -
Class B warrants at fair value 14.3 8,586,000 -
Total non-current liabilities 123,317,984 -
Current liabilities
Redeemable class A shares 14.1 108,335,684 -
Trade and other payables 15 157,617 883,696
Total current liabilities 157,617 883,696
----------- -------------
Total liabilities 123,447,878 883,696
----------- -------------
Total equity and liabilities 120,984,349 761,408
----------- -------------
The accompanying notes form an integral part of these separate
financial statement
Share
premium
Notes Share and similar Accumulated Total
capital premiums deficit equity
GBP GBP GBP GBP
Balance at 1 January
2022 30,000 - (152,288) (122,288)
Issuance of capital 13
Share capital
increase
2 Feb 2022
Issuance of 310,500
non- redeemable
Class
A shares 3,229 3,004,505 - 3,007,734
Reclassification of
non-redeemable
Class A shares from
equity
to liability (IAS
32) - (155,250) - (155,250)
Issuance of
10,350,000
redeemable Class A
shares 107,640 103,392,360 - 103,500,000
Issuance of
1,150,000
redeemable Class A
shares 11,960 11,488,040 - 11,500,000
Reclassification of
redeemable
Class A shares from
equity
to liability (IAS
32) (119,600) (114,880,400) - (115,000,000)
Share capital
increase
8 Feb 2022 13
Issuance of 34,500
non-redeemable
Class
A shares 3,588 341,412 - 345,000
Reclassification of
non-redeemable
Class A shares from
equity
to liability (IAS
32) - (17,250) - (17,250)
Loss for the period - - (5,549,198) (5,549,198)
Other comprehensive
income - - - -
Balance at 31
December
2022 36,817 3,173,417 (5,701,486) (2,491,252)
--------------- ---------------------- -------------------- ----------------------
Balance at 20
September
2021
Issuance of
incorporation
capital 30,000 - - 30,000
Loss for the period - - (152,288) (152,288)
Other comprehensive
income - - - -
Balance at 31
December
2021 30,000 - (152,288) (122,288)
--------------- ---------------------- -------------------- ----------------------
The accompanying notes form an integral part of these separate
financial statements.
1 Jan 2022 20 Sept
to 2021
31 Dec 2022 to
31 Dec
2021
GBP GBP
Cash flow from operating activities
Loss before income tax (5,549,198) (152,288)
Adjustments for:
Finance income (1,284,443) -
Finance costs 6,087,693 -
Foreign currency exchange gains/(losses) 5,929 -
Net cash from operating activities before income
tax (740,019) (152,288)
Changes in working capital:
Decrease/(increase) in deferred costs 731,407 (731,407)
(Increase) in prepayments (93,654) -
(Increase) in trade and other receivables 2,500 -
(Decrease)/increase in trade and other payables (726,079) 883,695
Net cash flows from operating activities (830,845) -
Cash flows from investing activities
Purchase of non-dealing securities (118,450,000) -
Cash flow from financing activities
Proceeds from issue of share capital - 30,000
Payment of cost in relation to capitalization (3,339,475) -
Proceeds from issue of redeemable shares 115,000,000 -
Proceeds from issue of non-redeemable shares 3,450,000 -
Proceeds from issue of sponsor warrants 5,300,000 -
Interest received 27,593 -
Foreign currency exchange gains/(losses) (5,929) -
--------------- -------------
Net cash flows from financing activities 120,432,189 -
-
Net change in cash and cash equivalents 1,151,344 30,000
Cash and cash equivalents, beginning 30,000 -
Cash and cash equivalents at end of the period 1,181,344 30,000
--------------- -------------
The accompanying notes form an integral part of these separate
financial statements
1. General information
Hiro Metaverse Acquisitions I S.A. (the "Company") was
incorporated on 20 September 2021 (date of incorporation) as per
the deed of incorporation agreed between shareholders in front of
the notary) as a public limited liability company in Luxembourg
(Société Anonyme or "S.A.") under the laws of the Grand Duchy of
Luxembourg for an unlimited period. The Company is registered with
the Luxembourg Trade and Companies Register (Registre de Commerce
et des Société, in abbreviated "RSC") under the number B259488
since 20 September 2021.
On the 8th of December 2021 the Company incorporated HMA1
(ESCROW) Limited (the " Subsidiary " ), under the Companies Act
2006 , in the United Kingdom, being a private Company, limited by
shares, with its registered office at 52 Lime Street, London,
England.
From a legal standpoint, the issued share capital of the Company
as of 31 December 2022 amounts to GBP 156,417.20 represented by
11,500,000 Redeemable Class A Shares, 345,000 Non-Redeemable Class
A Shares and 2,875,000 Class B Shares (the " Sponsor Shares " ),
all without nominal value . The total number of voting rights in
the Company is 14,720,000.
Because they are redeemable under certain conditions, the
11,500,000 Redeemable Class A Shares do not meet the definition of
an equity instrument as per IAS 32. Hence these Redeemable Class A
Shares are considered as debt instruments from an accounting
standpoint, resulting in a share capital of GBP 36,817 in the
financial statements. Detailed movements for the year are disclosed
in note 11. The 11,500,000 Redeemable Class A Shares are the Public
Shares issued by the Company in the Placing; being the Shares "cum
Rights," as contemplated in the Prospectus. The Sponsor (Hiro
Sponsor I LLP), subscribed for 34,500 of these Public Shares; being
the Overfunding Shares and Additional Overfunding Shares. The
proceeds of the Placing and of the Sponsor's overfunding
subscriptions are held in an Escrow account and are available for
the redemption of Public Shares held by Public Shareholders. The
Sponsor waived any rights attached to the Public Shares held by the
Sponsor. Consequently, being non-redeemable, the Public shares held
by the Sponsor are classified as equity.
The Company is managed by its Board of Directors composed of
Luke Alvarez, Cherry Freeman, Ian Livingstone as Executive
Directors and Jürgen Post, Emily Greer, and Addie Pinkster as
Non-Executive Directors (the "Board of Directors").
The registered office of the Company is located at 17, Boulevard
Raiffeisen, L-2411, Luxembourg. The financial year of the Company
starts on 1 January and ends on 31 December; except for he first
financial year which starts on 20 September 2021 (date of
incorporation) and ends on 31 December 2021.
The Company has been established for the purpose of acquiring
one operating business with principal business operations in a
member state of the European Economic Area, the United Kingdom or
Israel, in the form of a merger, capital stock exchange, share
purchase, asset acquisition, reorganization or similar transaction
(the " Business Combination " ).
The Company is seeking a suitable target for the Business
Combination with a focus on targets operating in the sectors of
Video Games, Esports, Interactive Streaming, GenZ Social Networks,
Connected Fitness & Wellness and Metaverse Technologies. The
Company has 15 months from the date of the admission to trading;
being 7 February 2022; to consummate a Business Combination, plus
an initial three-month extension period (the " First Extension
Period " ) and a further three-month extension period (the " Second
Extension Period " ) subject in each case to approval by the
Company ' s shareholders. Otherwise, the Company will be liquidated
and distribute all of its assets to its shareholders, the Public
shares issued during the initial offering (the " Placing " ) will
be redeemed first and then the Company will be liquidated and all
remaining assets will be distributed to remaining shareholders.
Pursuant to Article 3 of the current articles of association,
the Company ' s corporate purpose is the holding, management,
development and disposal of participations and any interests, in
Luxembourg or abroad, in any companies and/or enterprises in any
form whatsoever. The Company may in particular acquire by
subscription, purchase and exchange or in any other manner any
stock, shares and other participation securities, bonds,
debentures, certificates of deposit and other debt instruments and
more generally, any securities and financial instruments issued by
any public or private entity. It may participate in the creation,
development, management and control of any company and/or
enterprise. It may further invest in the acquisition and management
of a portfolio of patents or other intellectual property rights of
any nature or origin.
The Company may borrow in any form. It may issue notes, bonds
and any kind of debt and equity securities. The Company may lend
funds, including without limitation, resulting from any borrowings
of the Company and/or from the issue of any equity or debt
securities of any kind, to its Subsidiaries, affiliated companies
and/or any other companies or entities it deems fit.
The Company may further guarantee, grant security in favour of
or otherwise assist the companies in which it holds a direct or
indirect participation or which form part of the same group of
companies as the Company. The Company may further give guarantees,
pledge, transfer or encumber or otherwise create security over some
or all of its assets to guarantee its own obligations and those of
any other Company, and generally for its own benefit and that of
any other Company or person. For the avoidance of doubt, the
Company may not carry out any regulated activities of the financial
sector without having obtained the required authorization.
The Company may use any techniques and instruments to manage its
investments efficiently and to protect itself against credit risks,
currency exchange exposure, interest rate risks and other risks.
The Company may, for its own account as well as for the account of
third parties, carry out any commercial, financial or industrial
operation (including, without limitation, transactions with respect
to real estate or movable property) which may be useful or
necessary to the accomplishment of its purpose or which are
directly or indirectly related to its purpose.
2. Basis of preparation and accounting policies
2.1 Basis of preparation
The Company ' s financial year starts on 1 January and ends on
31 December of each year, with the exception of the first financial
period, which started on 20 September 2021 (date of incorporation)
and ended on 31 December 2021.
The separate financial statements comprise a statement of
financial position, a statement of comprehensive income, a
statement of changes in equity, a statement of cash flows and the
accompanying notes for the year ended 31 December 2022. These
separate financial statements have been prepared under the
assumption that the Company operates on a going concern basis.
These separate financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union for the period from 1 January 2022
to 31 December 2022 and were authorised for issue in accordance
with a resolution of the Board of Directors 28 April 2023.
These separate financial statements have been prepared in
Sterling (GBP) unless stated otherwise.
The principal accounting policies applied in the preparation of
these separate financial statements are set out below. These
policies have been consistently applied to all the periods
presented, unless otherwise stated.
2.2 Summary of significant accounting policies
The separate financial statements have been prepared in
accordance with the accounting policies adopted in the Company ' s
most recent annual financial statements for the period ended 31
December 2022.
2.2.1 New or revised Standards or Interpretations
International accounting standards include IFRS, IAS
(International Accounting Standards) and their interpretations
(Standing Interpretations Committee) and IFRICs (International
Financial Reporting Interpretations Committee).
The repository adopted by the European Commission is available
on the following internet site:
http://data.europa.eu/eli/reg/2008/1126/2023-01-01
(a) New standards, amendments and interpretations that were
issued but not yet effective as at 31 December 2022 and that are
most relevant to the Company - not yet endorsed by the EU:
-- Amendments to IAS 1 -: Classification of Liabilities as
Current or Non-current. In January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the requirements for
classifying liabilities as current or non-current. The amendments
are effective for annual reporting periods beginning on or after 1
January 2023 and must be applied retrospectively.
(b) New standards, amendments and interpretations that were
issued but not yet effective as at 31 December 2022 and that are
most relevant to the Company - endorsed by the EU:
-- Amendments to IAS 1 and IFRS Practice Statement 2 :
Disclosure of Accounting policies. In February 2021, the IASB
issued amendments that are intended to help preparers in deciding
which accounting policies to disclose in their financial
statements. The amendments are effective for annual periods
beginning on or after 1 January 2023.
-- Amendments to IAS 8: Definition of Accounting Estimate. In
February 2021 , the IASB issued amendments to help entities to
distinguish between accounting policies and accounting estimates.
The amendments are effective for annual periods beginning on or
after 1 January 2023.
-- Amendments to IAS 12 - not yet endorsed by the EU: Deferred
Tax related to Assets and Liabilities arising from a Single
Transaction. In May 2021, the IASB amended the standard to reduce
diversity in the way that entities account for deferred tax on
transactions and events, such as leases and decommissioning
obligations, that lead to the initial recognition of both an asset
and a liability. The amendments apply for annual reporting periods
beginning on or after 1 January 2023 and may be applied early.
The initial application of these standards, interpretations, and
amendments to existing standards is planned for the period of time
from when its application becomes compulsory. Currently, the Board
of Directors anticipates that the adoption of these Standards and
Interpretations in future periods will have no material impact on
the financial information of the Company.
2.2.2 Foreign currencies
Functional and presentation currency
The separate financial statements are presented in Sterling
(GBP).
Foreign currency transactions and balances
In preparing these separate financial statements of the Company,
transactions in currencies other than the entity ' s functional
currency (foreign currencies) are recognised at the rates of
exchange prevailing on the dates of the transactions. At each
reporting date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value
that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined.
Nonmonetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
year in which they arise except for exchange differences on
monetary items related to deferred costs included in trade
payables; which are recognised directly in deferred cost.
2.2.3 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. The Company recognises a financial
asset or a financial liability when it becomes a party to the
contractual provisions of the instrument. Purchases or sales of
financial assets that require delivery of assets within the time
frame generally established by regulation or convention in the
marketplace (regular way trades) are recognised on the trade date
i.e. the date that the Company commits to purchase or sell the
asset.
Recognition and derecognition
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires. When an existing financial
liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original
liability and the recognition of new liability. The difference in
the respective carrying account is recognised in the statement of
profit or loss.
Classification and measurement of financial assets
All financial assets are initially measured at fair value plus,
in the case of financial assets that are not measured at fair value
through profit and loss,
Financial assets are classified into one of the following
categories:
-- Amortised cost
-- fair value through profit or loss (FVTPL), or
-- fair value through other comprehensive income (FVOCI).
Financial assets measured at amortised cost: This is the
category most relevant to the Company. A debt instrument is
measured at amortised cost if it is held within a business model
whose objective is to hold financial assets in order to collect
contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding. Financial assets
at amortised cost are subsequently measured using the effective
interest rate (EIR) method and are subject to impairment. Gains and
losses are recognised in profit and loss when the asset is
derecognised, modified or impaired.
In the period presented the Company includes investments in
subsidiaries in the category FVTPL.
In the period presented the Company includes Derivative
financial instruments as financial assets categorised as FVTPL
All revenue and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Impairment of financial assets
IFRS 9 ' s impairment requirements use forward-looking
information to recognise expected credit losses - the ' expected
credit loss (ECL) model ' . Instruments within the scope of the
requirements include financial assets at amortised cost, cash and
cash equivalent and restricted cash as well as debt instruments at
fair value through other comprehensive income and trade receivable
when applicable.
The Company considers a broader range of information when
assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable and
supportable forecasts that affect the expected collectability of
the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made
between:
-- financial instruments that have not deteriorated
significantly in credit quality since initial recognition or that
have low credit risk ( ' Stage 1 ' ).
-- financial instruments that have deteriorated significantly in
credit quality since initial recognition and whose credit risk is
not low ( ' Stage 2 ' ).
-- ' Stage 3 ' would cover financial assets that have objective
evidence of impairment at the reporting date.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected
life of the financial instrument.
Classification and measurement of financial liabilities
The financial liabilities are classified, at initial
recognition, as financial liabilities at fair value through profit
or loss, or financial liabilities at amortised cost.
Financial liabilities are initially measured at fair value,
adjusted for transaction costs where applicable except for those
financial liabilities that are measured at fair value through
profit or loss.
Financial liabilities recognized at amortised cost are
subsequently measured, using the effective interest method. Gains
and losses are recognised in profit or loss when the liabilities
are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by considering any discount or
premium on acquisition and incremental fees or costs. The EIR
amortisation is included as finance costs in the statement of
profit or loss.
The Company includes in this category Redeemable Class A Shares
and trade and other payables, while the Public and Sponsor warrants
are classified as financial liabilities at fair value through
profit and loss.
All interest-related charges and, if applicable, changes in an
instrument ' s fair value that are reported in profit or loss are
included within finance costs or finance income.
Offsetting financial instruments
Financial instruments are offset and a net amount reported in
the statement of financial position only when there is currently a
legally enforceable right to offset the recognised amounts and
there is an intention to settle on a net basis, or realise the
asset and settle the liability simultaneously.
2.2.4 Cash and restricted cash
Cash in the statement of financial position comprise cash at
banks and on hand and short-term highly liquid deposits with a
maturity of three months or less, that are readily convertible to a
known amount of cash and subject to an insignificant risk of
changes in value. The carrying amounts of these approximate their
fair value.
For the purpose of the financial statement of cash flows, cash
and cash equivalents consist of cash and short term deposits, as
defined above, net of outstanding bank overdrafts as they are
considered an integral part of the Company ' s cash management.
2.2.5 Fair value measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability; or
-- In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible
by the Company.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant ' s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Company uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
-- Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable.
-- Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy, as explained above.
2.2.6 Provisions and contingent liabilities
Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of economic resources will be required
from the Company and a reliable estimate can be made of the amount
of the obligation. The timing or amount of the outflow may still be
uncertain.
Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to
settle the present obligation, based on the most reliable evidence
available at the reporting date, including the risks and
uncertainties associated with the present obligation. Where there
are a number of similar obligations, the likelihood that an outflow
will be required in settlement is determined by considering the
class of obligations as a whole.
If the effect of the time value of money is material, provisions
are discounted using a current pre tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time
is recognised as a finance cost.
Any reimbursement that the Company is virtually certain to
collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed
the amount of the related provision.
No liability is recognised if an outflow of economic resources
as a result of present obligations is not probable. Such situations
are disclosed as contingent liabilities unless the outflow of
resources is remote.
2.2.7 Trade payables, other payables and accrued expenses
Trade payables, other payables and accrued expenses are
obligations to pay for services that have been acquired in the
ordinary course of business. They are classified as current
liabilities if payment is due within twelve months after statement
of financial position date. If not, they are represented as
non-current liabilities.
2.2.8 Taxation
Income tax recognized in the statement of profit or loss and
other comprehensive income includes current and deferred taxes.
Current tax
Current income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the
reporting date in the countries where the Company operates and
generates taxable income.
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognised in other comprehensive
income or directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the
business combination.
Deferred tax
Deferred tax is recognized on temporary differences between the
carrying amounts of assets and liabilities in the separate
financial statements and the corresponding tax bases used in the
computation of taxable profit.
Deferred tax liabilities are generally recognized for all
taxable temporary differences. Deferred tax assets are generally
recognized for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against
which those deductible temporary differences can be utilized.
Deferred tax assets are tested for impairment on the basis of a tax
planning derived from management business plans.
Such deferred tax assets and liabilities are not recognized if
the temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
2.2.9 Current versus non-current classification
The Company presents assets and liabilities in the statement of
financial position based on current/non-current classification.
An asset is current when it is:
-- expected to be realised or intended to be sold or be consumed in normal operating cycle;
-- held primarily for the purpose of trading;
-- expected to be realised within twelve months after the reporting period; or
-- cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is current when:
-- it is expected to be settled in normal operating cycle;
-- it is held primarily for the purpose of trading;
-- it is due to be settled within twelve months after the reporting period; or
-- there is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non-current.
2.2.10 Operating expenses
Operating expenses are recognised in profit or loss upon
utilisation of the service or as incurred.
2.2.11 Share-based payments
The Board is currently assessing whether certain class B shares
and class B warrants issued to the Sponsor of the Company are to be
considered as falling in the scope of IFRS 2. The Board will
notably adopt its position based on market discussions and/or
positions adopted by market players, supervisory authorities and/or
standard setters.
In any case, the class B shares and class B warrants do not
carry a specified service period, but would be forfeited or
otherwise expire worthless if a business combination is not
consummated. Therefore, the Sponsor only derive the value from the
class B shares and class B warrants when they are converted into
class A shares upon a successful business combination.
Consequently, the grant date of these awards does not occur until
the target is approved. As of 31 December 2022, irrespective of the
conclusions of the ongoing assessment carried out by the Board, no
amounts would have had to be accounted for provided that no such
approval has occurred.
2.2.12 Equity-settled transactions
The cost of equity-settled transactions is determined by the
fair value at the date when the grant is made using an appropriate
valuation model. That cost is recognised in as part of other
operating expenses in the consolidated statement of comprehensive
income, together with a corresponding increase in equity, over the
period in which the service and, where applicable, the performance
conditions are fulfilled (the vesting period). The cumulative
expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which
the vesting period has expired and the Company ' s best estimate of
the number of equity instruments that will ultimately vest. The
expense or credit in the consolidated statement of comprehensive
income for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into
account when determining the grant date fair value of awards, but
the likelihood of the conditions being met is assessed as part of
the Company ' s best estimate of the number of equity instruments
that will ultimately vest. Market performance conditions are
reflected within the grant date fair value. Any other conditions
attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair value of an award
and lead to an immediate expensing of an award unless there are
also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest
because non-market performance and/or service conditions have not
been met. Where awards include a market or non-vesting condition,
the transactions are treated as vested irrespective of whether the
market or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the
minimum expense recognised is the grant date fair value of the
unmodified award, provided the original vesting terms of the award
are met. An additional expense, measured as at the date of
modification, is recognised for any modification that increases the
total fair value of the share-based payment transaction, or is
otherwise beneficial to the recipient of the share-based payment.
Where an award is cancelled by the entity or by the counterparty,
any remaining element of the fair value of the award is expensed
immediately through profit or loss.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share
3. Significant accounting judgements, estimates and assumptions
The preparation of these separate financial statements in
accordance with IFRS requires the Board of Directors ' to make
judgements, estimates and assumptions that affect the application
of policies and the reported amounts of assets and liabilities and
income and expenses. The estimates and associated assumptions are
based on various factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making
the judgements about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
As at 31 December 2022, the significant areas of estimates,
uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amounts recognised in
these separate financial statements are the following:
-- Classification of Redeemable Class A Shares: The Board
assessed the classification of Redeemable Class Shares in
accordance with IAS 32, Financial Instruments: Presentation, under
which the Redeemable Class A Shares do not meet the criteria for
equity treatment and must be recorded as liabilities. The
Redeemable Class A Shares features certain redemption rights that
are considered to be outside of the Company ' s control and subject
to occurrence of uncertain future events. Accordingly, the Company
classifies the Redeemable Class A Shares as financial liabilities
at amortised cost in accordance with IFRS 9. The transaction costs
directly attributable to issuance of the Redeemable Class A shares
are deducted against the initial fair value.
-- Classification of Non- Redeemable Class A Shares: The Sponsor
and the Company ' s directors have entered into a Lock-up and
Waiver Agreement with the Company, pursuant to which they have
waived their rights to liquidating distributions from the Escrow
Account with respect to any Sponsor Shares, Sponsor Warrants,
Overfunding Shares, Overfunding Warrants and any Public Shares
acquired upon conversion or exercise thereof held by them if the
Company fails to complete the Initial Business Combination by the
Business Combination Deadline. Consequently, the proceeds of the
Sponsor shares and overfunding shares are not redeemable.
Accordingly, the Company classifies these Non-Redeemable Class A
Shares as Equity, and the proceeds from the subscription of such
Non-Redeemable Class A Shares are classified to equity under share
capital and share premium in the consolidated statement of
financial position, in line with the initial allocation of the
subscription price, the surplus being considered as a capital
contribution (share premium).
-- Classification and measurement of Warrants: The Board
assessed the classification of warrants in accordance with IAS 32
under which the warrants do not meet the criteria for equity
treatment and must be recorded as derivatives. Accordingly, the
Company classifies the Class A warrants and Class B warrants as
liabilities at fair value and adjust them to fair value at each
reporting period. This liability is subject to re-measurement at
each balance sheet date until exercised, and any change in fair
value is recognized in the consolidated statement of comprehensive
income. The fair value of Class A and B warrants is determined by
applying the average product of the Binomial Tree (BOPM) and M onte
Carlo valuations methods.
Going Concern
As at the date of these Separate financial statements, the
Company is not in sufficiently advanced discussions with any
potential targets to enable the Public Shareholders to consider and
vote on a potential Initial Business Combination. The Company ' s
initial deadline to complete an Initial Business Combination is 7
May 2023 and the Articles permit an initial three-month extension
period, followed by a further three-month extension period, in each
case with the approval of a simple majority of the holders of all
Ordinary Shares. However, the Board considers that these permitted
extensions are unlikely to provide sufficient time to permit the
Company to evaluate target companies, to agree terms on a potential
business combination, to seek agreement on financing requirements,
and to implement the necessary steps for readmission under the UK
Listing Rules in order to complete an Initial Business Combination.
Accordingly, on 4 April 2023 the Company gave notice convening an
EGM to be held on 5 May 2023 to consider, and if thought fit, to
approve the extension of the business combination deadline to 7
February 2024 by way of an amendment to the Articles.
As at the date of Separate financial statements, it is therefore
uncertain whether the Company will extend its business combination
deadline to 7 February 2024 and continue to seek an Initial
Business Combination, or if it will instead proceed to redeem its
Public Shareholders and cancel the listing and trading of the
Company ' s Public Shares and Public Warrants on the London Stock
Exchange following expiry of the initial business combination
deadline of 7 May 2023. In any event, if the current or any
extended business combination deadline expires without the Company
having completed an Initial Business Combination and the Company
undertakes a redemption and delisting of its Public Shares and
Public Warrants as described above, the Board intends for the
Company to continue as a privately held company and has no
intention to commence liquidation or winding up of the Company in
the next 12 months.
The Board, having considered the financial position of the
Company for a period of least 12 months from the date of approval
of the financial statements, have a reasonable expectation and
belief that the Company has adequate resources to continue in
operational existence for the foreseeable future given the
available cash and forecast cash outflows.
In particular, the Board reviewed the Company ' s committed
expenses for the period which leaves a significant cash buffer in
excess of GBP 1,1million. As these committed expenses are in line
with signed engagement letters or agreements, management takes
comfort that these expenses can be reliably measured and factored
into their budgeting.
In addition, the Board has noted that the Company ' s policy is
that no dividend will be declared until after a successful Business
Combination to ensure that capital is maintained in the period
prior to the Business Combination.
As at 31 Dec 2022, other than the effects of the COVID -- 19
pandemic and the war in Ukraine, which have been considered by the
directors, there were no other significant areas of estimation,
uncertainty and critical judgements which were applied.
4. Financial risk management, objectives and policies
The Company is newly formed and has not conducted any operations
and currently generates no revenue. The Company does not have
material foreign currency transactions. Hence, currently the
Company does not face foreign currency risks nor any interest rate
risks as the financial instruments of the Company bear a fixed
interest rate.
Liquidity risks
Liquidity risk is the risk that the Company will encounter
difficulty in meeting its financial obligations as they fall due.
The Placing was completed on 7 February 2022. 100% of the gross
proceeds of this Placing were deposited in an escrow account (the "
Escrow Account " ). The amount held in the Escrow Account will only
be released in connection with the completion of the Business
Combination or the Company ' s liquidation. The Board of Directors
believes that the funds available to the Company outside of the
escrow deposit account, together with the available shareholder
loan will be sufficient to pay costs and expenses which are
incurred by the Company prior to the completion of the Business
Combination.
The objective of the Sponsor Warrants issued to the Sponsor at
the time of the Placing, was to use the proceeds to pay the various
costs and expenses incurred and contracted for as disclosed in the
s eparate financial statements for the 12 months ended 31 December
2022, except the underwriting commission. The proceeds from the
Placing of Public Shares were not to be used to pay these
expenses.
The Sponsor has committed additional funds to the Company
through the Overfunding Subscription, the proceeds of which is held
in the Escrow Account. The purpose of the overfunding subscription
is to provide additional cash funding into the Escrow Account, in
addition to the funding from the proceeds of the Units sold in the
Placing, for the redemption of the Public Shares by Public
Shareholders ( " Initial Overfunding Shares " ).
The Initial Overfunding Shares and Initial Overfunding Warrants
were not part of the Placing but were part of the applications for
Shares Admissions and Warrants Admission which took place on 24
February 2022.
To the extent that the Business Combination Deadline is
extended, the Sponsor will commit further additional funds to the
Company through the subscription of additional units as referred to
in Part VIII. 4 of the Prospectus.
The following table illustrates the Company's expected liquidity
of assets held:
Less than 1-12
1 month months Total
GBP GBP GBP
At 31 December 2022
Total assets 1,181,344 119,803,005 120,984,349
---------- ------------ ------------
At 31 December 2021
Total assets 30,000 731,407 761,407
---------- ------------ ------------
The table below analyses the Company's financial liabilities
into relevant maturity based on the remaining period at the
statement of financial position date to the contractual maturity
date. The amounts in the table are the contractual undiscounted
cash flows.
Between
Less than 1-5 More than
1 year years 5 years Total
GBP GBP GBP GBP
At 31 December 2022
Trade and other
payables 157,617 - - 157,617
Redeemable class A
shares 108,335,684 - - 108,335,684
Class A warrants at
fair value - 6,396,300 - 6,396,300
Class B warrants at
fair value - 8,586,000 - 8,586,000
Total liabilities 108,493,301 14,982,300 - 123,475,601
-------------------- ------------------------- -------------------- ------------
At 31 December 2021
Trade and other
payables 883,696 - - 883,696
Total liabilities 883,695 - - 883,695
-------------------- ------------------------- -------------------- ------------
Capital management
As at 31 December 2022, the Company has a negative equity of GBP
2,491,252. However, the Board of Directors believes that the funds
available to the Company are sufficient to pay costs and expenses
incurred by the Company prior to the completion of the Initial
Business Combination. The Company has non-current liabilities which
does not impose any liquidity issues to the Company. The Class A
Warrants designated as "Initial Overfunding Warrants" in the
Prospectus and the Class B Warrants designated as the "Sponsor
Warrants" in the Prospectus, which together represent a liability
of GBP 8,586,000 as at 31 December 2022, have no redemption rights
or liquidation distribution rights and will expire worthless in
case of liquidation. Furthermore the Public Warrants, which
represent a liability of GBP 6,396,300 as at 31 December 2022, are
redeemable at the option of the Company.
Credit risk
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is currently exposed to
credit risk from its deposit with banks. The Company has placed its
cash with a prime financial institution with a credit rating of A1,
with a stable outlook, by the rating agency Moody's.
The Company ' s maximum exposure to credit risk is detailed in
the table below:
20 Sept
1 Jan 2022 2021
to to
31 Dec 2022 31 Dec 2021
GBP GBP
Cash and cash equivalents 1,181,344 30,000
Prepayments 93,654 -
--------------------- ----------------------
1,274,998 30,000
--------------------- ----------------------
5. Other operating expenses
The other operating expenses of GBP 738,626 (2021: GBP 152,560)
consist of fees for accounting, legal, and other services not
related to the placing.
20 Sept
1 Jan 2022 2021
To to
31 Dec
2022 31 Dec 2021
GBP GBP
Accounting, tax consulting, auditing and
similar fees 242,471 151,407
Bank charges and commissions 2,500 -
Director's fees 27,348 -
Legal, litigation and
similar fees 72,575 -
Notarial and similar
fees 9,532 1,153
Other professional fees 110,706 -
Contributions to professional
associations 3,892 -
Third-party insurance 269,602 -
---------------- ----------------------
738,626 152,560
---------------- ----------------------
The total audit fees paid breaks down as follows:
20 Sept
1 Jan 2022 2021
to to
31 Dec
2022 31 Dec 2021
GBP GBP
Audit fees 93,309 98,280
Audit-related fees - 122,850
------------------- ------------
Total 93,309 221,130
------------------- ------------
6. Income Tax
20 Sept
1 Jan 2022 2021
To to
31 Dec
2022 31 Dec 2021
GBP GBP
Loss for the period
before tax (5,549,198)) (152,288)
Theoretical tax charges applying tax rate
24.94% (2021: 22.8%) (1,383,970) (34,722)
Reconciling items:
Income excluded from taxable
income:
Fair value adjustments - Investment in
subsidiaries (313,458) -
Non-deductible expenses:
Amortisation- Redeemable Public Shares
placing costs 580,577 -
Fair value adjustments- Public
Warrants 118,166 -
Fair value adjustments- Sponsor
Warrants 819,528 -
Other:
Unrecognised deferred
tax assets on tax losses 179,158 34,722
-------------------- ----------------------
- -
-------------------- ----------------------
Deferred tax
Deferred tax assets have not been recognised in respect of the
loss incurred during the period ended 31 December 2022 because it
is not probable that future taxable profit will be available
against which the Company can utilise the benefits therefrom.
Unused tax losses of the Company can be used within a period of 17
years as per Luxembourg tax law.
7. Earnings /(loss) per share
Basic earnings/(loss) per share ( " EPS " ) is calculated by
dividing the profit/(loss) for the period attributable to ordinary
equity holders of the Company by the weighted average number of
ordinary shares outstanding during the period.
Diluted EPS is calculated by dividing the profit/(loss)
attributable to ordinary equity holders of the Company by the
weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would
be issued on conversion of all the dilutive potential ordinary
shares into ordinary shares.
Currently, no diluting instruments are exercisable. Therefore,
basic EPS equals diluted EPS as at 31 December 2022.
31 Dec
2022 31 Dec 2021
GBP GBP
Loss for the year/period (5,549,198) (152,288)
Weighted average number of ordinary shares 13,552,384 3,750,000.00
Basic and diluted EPS (0.41) (0.04)
------------ -------------
8. Financial assets at fair value through profit or loss
1 Jan 2022 1 Jan 2022
to to
31 Dec
2022 31 Dec 2022
Description No of shares shareholding cost price fair value
% GBP GBP
HMA1 (ESCROW) Limited 118,450,001 100.00 118,450,001 119,706,851
-------------- ----------------
The movements during the year ended 31 Dec 2022 and the year
ended 31 Dec 2021:
20 Sept
1 Jan 2022 20 Sept 2021 1 Jan 2022 2021
to to to to
31 Dec 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
cost price cost price fair value fair value
GBP GBP GBP GBP
Opening
balance 1 - 1 -
Acquisitions 118,450,000 1 118,450,000 1
Fair value
adjustments - - 1,256,850 -
Closing
balance 118,450,001 1 119,706,851 1
---------------------- -------------------------- ---------------------- ----------------------
On the 8th of December 2021 the company incorporated HMA1
(ESCROW) Limited, under the Companies Act 2006, in the United
Kingdome, being a private company, limited by shares, with its
registered office at 52 Lime Street, London, England.
On the 2nd February the Company subscribed for 106,605,000
ordinary shares with nominal value GBP 1 in HMA1 for the
consideration of GBP 106,605,000. The amount of GBP 106,616,960 was
transferred on 8 February 2022.
On the 11th of February the Company subscribed for an additional
11,833,040 ordinary shares with nominal value GBP 1 in HMA1for the
consideration of GBP 11,833,040. The amount of GBP 11,833,040 was
transferred on 15 February 2022.
9. Deferred costs
As at 31 December 2022 there are no deferred costs. A at 31
December 2021 Deferred cost of GBP 731,407 comprised of legal costs
incurred by the Company in relation to the public offering which
was offset against the Sponsor Warrants after the Placing during
the year ended 31 December 2022.
10. Cash and cash equivalents
31 Dec
2022 31 Dec 2021
GBP GBP
Cash and cash equivalents 1,181,344 30,000
---------------- --------------------
11. Trade and other receivables
As at 31 Dec 2022 the company has a receivable on HMA1 in the
amount of GBP 2,500.
12. Prepayments
31 Dec 2022 31 Dec 2021
GBP GBP
Prepaid FCA fees 5,756 -
Prepaid D&O insurance 87,898 -
93,654 -
---------------- ----------------------
13. Issued capital and reserves
As at 31 December 2021, the subscribed share capital amounted to
GBP 30,000 consisting of 3,750,000 Class B ordinary shares with no
par value held by the Sponsor, hereinafter referred to as the "
Sponsor Shares " . The Company ' s share capital may be increased
or reduced by a resolution of the general meeting of shareholders
adopted in the manner required for an amendment of the articles of
association.
On 2 February 2022, the existing 3,750,000 Sponsor Shares were
converted into 2,875,000 Sponsor Shares representing the entire
issued share capital of GBP 30,000.
It is planned that these Sponsor Shares shall convert into
Public Shares subject to a certain schedule and trading price
following the consummation of the Business Combination. The Sponsor
Shares will convert into a number of Public Shares such that the
number of Public Shares issuable to the Sponsor upon conversion of
all Sponsor Shares will be equal, in the aggregate, on an as
converted basis, to 20% of the total ordinary shares in issue
following the Placing.
On 2 February 2022 the Company ' s Prospectus was approved and
published on the London Stock Exchange.
On 2 February 2022, the capital of the Company was increased by
the issuance of 10,350,000 Redeemable Class A Shares (the "Public
Shares"), each share being issued in the form of a unit consisting
of one Public Share with the right to receive one half of a Public
Warrant. These Public Shares have been fully paid up by a
contribution in cash of GBP 103,500,000.
On the same day, the capital of the Company was increased by the
issuance of another 1,150,000 Redeemable Class A Shares (the
"Option Shares") through a second Capital Increase. These Option
Shares have been fully paid up by a contribution in cash of GBP
11,960. A complementary amount of GBP 11,488,040 (GBP 9.9896 per
Option Share) was allocated to account 115 of the Company and was
intended to be paid on the option closing period.
Because they are redeemable under certain conditions, the
11,500,000 Redeemable Class A Shares do not meet the definition of
an equity instrument as per IAS 32. Hence these Redeemable Class A
Shares are considered as debt instruments from an accounting
standpoint.
On 2 February 2022, the Sponsor subscribed to 310,500 units at a
price of GBP 10 per unit, each unit consisting of one
Non-Redeemable Class A Share cum right to receive one half Public
Warrant. Being non-redeemable, these shares qualify as equity
instruments under IAS 32. Hence they resulted in an increase of the
share capital from GBP 30,000 to GBP 33,229.20, the remaining of
the subscription price being allotted to the share premium
account.
On 7 February 2022, the 11,500,000 Redeemable Class A Shares
were admitted to the standard listing segment of the Official List
of the Financial Conduct Authority and to trading on the London
Stock Exchange's Main Market for listed securities under ticker
"HMA1".
On 7 February 2022 Citigroup Global Markets Limited, acting as
Stabilisation Manager, gave notice of the non-exercise by it of the
put option granted by the Company to the Stabilisation Manager (the
" Put Option " ), as no stabilisation was undertaken.
On 7 February 2022, further to the non-exercise of the Put
Option, the Sponsor subscribed to another 34,500 units at a price
of GBP 10 per unit, each unit consisting of one Non-Redeemable
Class A Share cum right to receive one half Public Warrant, hence
resulting in an increase of the share capital on 8 February 2022
from GBP 33,229.20 to GBP 36,817, the remaining of the subscription
price being allotted to the share premium account.
The non-exercise of the Put Option and the Overfunding Shares
Subscription brought the total number of Class A Shares to
11,845,000, of which 11,500,000 Redeemable Class A Shares and
345,000 Non-Redeemable Class A Shares.
The Company initially recognised the units subscribed by the
Sponor as 345,000 Non- Redeemable Class A Shares at GBP 9.50 per
share and GBP 1 per full warrant. The Company initially recognised
these Non-Redeemable Class A shares at GBP 3,180,234, net of
transaction costs attributable to these shares amounting to GBP
97,266 .
As at 31 December 2022, the issued share capital of the Company
is set at GBP 156,417.20 represented by eleven million eight
hundred 11,845,000 Public Shares without nominal value and
2,875,000 Sponsor Shares without nominal value. The total number of
voting rights in the Company is 14,720,000.
From an accounting standpoint, considering that the Redeemable
Class A Shares do not meet the definition of an equity instrument
as per IAS 32, they are classified as debt instruments in the
consolidated financial statements. Therefore, the share capital in
the consolidated financial statements is only comprised of the
Class B Shares, also referred to as the " Sponsor Shares " , and
the Non-Redeemable Class A Shares, for a total amount of GBP 36,817
as at 31 December 2022, and a share premium of GBP 3,173,417 in the
share premium account. .
Authorised capital
On 2 February 2022, the Board of Directors approved the increase
of the authorised capital of the Company from GBP 1,000,000
consisting of 1,000,000,000 Public Shares to GBP 1,122,829.20;
consisting of 1,011,810,500 Public Shares; and authorised the board
of directors of the Company, to issue Public Shares, to grant
options or warrants to subscribe for Public Shares and to issue any
other instruments giving access to such shares within the limits of
the authorised capital to such persons and on such terms as they
shall see fit and specifically to proceed with the issue of up to
one billion and eleven million eight hundred and ten thousand five
hundred (1,011,810,500) Public Shares without nominal value and
with removal or limitation of the preferential right to subscribe
to the Public Shares, as applicable, issued for the existing
shareholders of the Company.
Legal reserves
The Company is required to allocate a minimum of 5% of its
annual net profit to a legal reserve, until this reserve equals 10%
of the subscribed share capital. This reserve may not be
distributed.
14. Non-current liabilities
14.1 Redeemable Class A ordinary shares of no par value
As referred to in note 14, the Company issued 11,500,000
Redeemable Class A Shares and allocated GBP 9.50 of the proceed per
Units to the share price and GBP 1 to each full warrant. The
Company initially recognised the redeemable Class A shares at
amortised cost valued at GBP 106,007,791, net of transaction costs
attributable to these shares amounting to GBP 3,242,209.
Transaction costs are incremental costs that are directly
attributable to the issuance of the Class A shares and its
subsequent listing on the London Stock Exchange were deducted from
its initial cost. The transaction costs include Listing Fees, legal
fees, audit fees, accounting and administration fees, agency fees
and FCA fees.
As at 31 December 2022, the amortized cost of the redeemable
Class A shares amounts to GBP 108,335,684 after amortisation of GBP
2,327,893 calculated using the EIR method. This amortization is
presented as part of finance costs in the statement of
comprehensive income. The fair value of redeemable Class A shares
is GBP 115,287,500 based on its quoted price (level 1) as of 31
December 2022.
Redemption Rights. The Company will provide its Class A Public
Shareholders with the opportunity to redeem all or a portion of
their Public Shares, exercisable prior to the completion of the
Initial Business Combination irrespective of whether and how they
vote at the General Meeting convened to approve the Initial
Business Combination. Public Shareholders seeking redemption of
their Public Shares must submit a valid request for redemption to
the Company in accordance with the terms to be set out in the
circular in relation to the shareholder vote on the Initial
Business Combination at the General Meeting, which will be
published by the Company following the approval of the Initial
Business Combination by the Board of the Company.
In terms of the Waiver and Lock Up Deed entered into by the
Sponsor; each Insider and the Company; the Sponsor and each Insider
agreed to not propose any amendment to the Company ' s amended and
restated memorandum and articles of association: (a) to modify the
substance or timing of the Company ' s obligation to allow
redemptions in connection with the Business Combination; (b) to
modify the substance or timing of the Company ' s obligation to
redeem 100% of the Public Shares if the Company does not complete a
Business Combination by the Business Combination Deadline; or (c)
with respect to any other material provisions relating to
shareholders ' rights or pre-Business Combination activity, in each
case, unless the Company provides its Public Shareholders with the
opportunity to redeem their Public Shares upon approval of any such
amendment at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Escrow Account, including
interest earned on the funds held in the Escrow Account and not
previously released to the Company to pay its taxes, divided by the
number of then issued and outstanding Public Shares.
14.2 Public Warrants
On 24 February 2022, the Company admitted 5,922,500 Class A
warrants (the " Public Warrants " ) to the standard listing segment
of the Official List of the Financial Conduct Authority and to
trading on the London Stock Exchange's main market for listed
securities under ticker "HM1W " .
The Public Warrants will be exercisable during the " Exercise
Period " , which shall be the period beginning 30 days after the
date on which the Initial Business Combination is completed and
ending at the close of trading on the main market for listed
securities of the London Stock Exchange on the first Business Day
after the fifth anniversary of the Business Combination Completion
Date provided that the Exercise Period shall end earlier (i) upon
redemption of the Public Warrants in accordance with their terms,
(ii) if the Company fails to complete an Initial Business
Combination by the Business Combination Deadline, (iii) or upon any
liquidation of the Company. During the Exercise Period, the Company
may, at its sole discretion, elect to redeem the Public Warrants in
whole but not in part, upon a minimum of 30 calendar days ' prior
written notice of redemption at (i) a redemption price of GBP0.01
per Public Warrant if the closing price of its Public Shares
following the consummation of the Initial Business Combination
equals or exceeds GBP18.00 for any 20 out of 30 consecutive trading
days ending three Business Days before the Company sends the notice
of redemption; or (ii) a redemption price of GBP0.10 per Public
Warrant if the closing price of its Public Shares for any 20 out of
30 consecutive trading days following the consummation of the
Initial Business Combination, ending three Business Days before the
Company sends the notice of redemption equals or exceeds GBP10.00
but is below GBP18.00, subject to adjustments to the number of
Public Shares issuable upon exercise or the exercise price of a
Public Warrant as described in the company's Prospectus.
Public Warrant holders may exercise their Public Warrants after
such redemption notice is given until the scheduled redemption
date.
There will be no redemption rights or liquidating distributions
with respect to the Public Warrants, which will expire worthless if
the Company fails to complete the Initial Business Combination by
the Business Combination Deadline.
The Public Warrants are classified as derivative liabilities and
were initially recognised at their fair value of GBP 1 per warrant
at the issuance date of 2 February 2022
As at 31 December 2022, the fair value of Class A warrants was
estimated at GBP 6,395,300 (GBP1.08 per warrant) using the average
of the Binomial Tree and Monte Carlo valuations methods; (level 3),
resulting in the recognition of fair value loss of GBP 473,800 for
the period from issue date to 31 December 2022. The significant
inputs to the valuation model include the contractual terms of the
warrants (i.e. exercise price, maturity), risk-free rates of German
government bonds and volatility of the warrants by reference to
average of the volatility of traded warrants issued by similar
special purpose acquisition companies and of volatility of target
peers, and discount for probability of liquidation of the Company
because not having consummated a business combination by the stated
deadline.
14.3 Sponsor Warrants
On 2 February 2022, the Sponsor agreed and subscribed for an
aggregate of 5,070,000 Class B warrants (the " Sponsor Warrants " )
at a price of GBP 1.00 per Sponsor Warrant (GBP 5,070,000 in the
aggregate), each Sponsor Warrant entitling the holder to purchase
one Public Share at an exercise price of GBP 11.50 per Public
Share. The Sponsor Warrants are not admitted to listing or trading
on any regulated market or trading platform. As at 7 February 2022,
the Put Option (as defined in Note 11) was not exercised, and as a
consequence the Sponsor subscribed for 230,000 additional Sponsor
Warrants at a price of GBP 1.00 per Sponsor Warrant (GBP 230,000 in
the aggregate) to cover the increased underwriting fees payable by
the Company.
As at 31 December 2022, the fair value of Class A warrants was
estimated at GBP 8,586,300 (GBP1.62 per warrant) using the average
of the Binomial Tree and Monte Carlo valuations method; (level 3),
resulting in the recognition of fair value loss of GBP 3,286,000
for the period from issue date to 31 December 2022. The significant
inputs to the valuation model include the contractual terms of the
warrants (i.e. exercise price, maturity), risk-free rates of German
government bonds and volatility of the warrants by reference to
average of the volatility of traded warrants issued by similar
special purpose acquisition companies and of volatility of target
peers, and discount for probability of liquidation of the Company
because not having consummated a business combination by the stated
deadline.
15. Trade and other payables
1 Jan 20 Sept
2022 2021
to to
31 Dec 31 Dec
2022 2021
GBP GBP
Accounting, tax consulting, auditing and
similar fees 112,970 151,135
Directors fees 14,245 -
Deferred costs - 731,407
Notarial and similar
fees - 1,153
Professional fees 30,400 -
Payable to subsidiary 1 1
----------------- --------------------
157,616 883,696
----------------- --------------------
Trade and other payables are related to legal and other services
received by the Company. The carrying amounts of these approximate
their fair value.
16. Related party disclosures
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions.
Transactions with key management personnel
The Board of Directors consist of 6 members.
There are no advances or loans granted to members of the Board
of Directors as at 31 December 2022.
The Company entered into contracts with the non executive
directors effective from the date of the Placing. The agreed
Directors fees of GBP 10,000 per annum are payable semi annually in
arrears, in equal instalments, after deduction of any taxes and
other amounts that are required by law. Director's fees to the
value of GBP 27,348 were paid as at 31 December 2022.
17. Commitments and contingencies
The Company had the following material commitments and
contingencies at 31 December 2022:
The Company entered into an agreement with Citigroup Global
Markets Limited (Underwriting Agreement), by virtue of which the
Company will be liable to pay a deferred commission equal to 3.5%
of the aggregate gross proceeds of the Securities, subject to
completion of Business Combination and payable after such
completion.
The Company entered into contracts with three non-executive
directors which is effective as from the date of the Placing. The
agreed director ' s fees are GBP 10,000 per director, per annum;
paid semi-annually in arrears in equal instalments after deduction
of any taxes and other amounts that are required by law.
During the year, the Company entered into an agreement with a
financial advisor to source and/or evaluate potential
acquisition(s) to be made by the Company. The Company is committed
to pay the advisor a monthly retainer of GBP 12,000 until the
engagement is terminated. In terms of the agreement; in respect of
transactions that are already in contemplation, a commission of
0.8% of the relevant Target ' s enterprise value, is payable on the
date of signing of a share purchase agreement; and in respect of
transactions that are introduced to the Company by the advisor; a
commission of 1.25% of the relevant Target ' s enterprise value is
payable on the date of signing of the relevant SPA. These fees
payable in respect of the acquisition of the Target; shall be
reduced by the amount of the Retainer received by the advisor up to
the date that these fees becomes payable. In addition, an incentive
fee of GBP 500,000 is payable at the sole discretion of the Company
by way of the issuance of an equivalent number of ordinary shares
in the capital of the Company at the price at which ordinary shares
are issued by the Company pursuant to any equity raised to support
the acquisition.
The Company has no other material commitments and contingencies
as at 31 December 2022.
18. Events after the reporting period
Since 31 December 2022 the market backdrop for SPACs and public
equity offerings more generally has continued to be challenging.
This climate has not been conducive to completing an Initial
Business Combination. As at the date of this Report of Directors,
the Company is not in sufficiently advanced discussions with any
potential targets to enable the Public Shareholders to consider and
vote on a potential Initial Business Combination.
On 4 April 2023 the Company gave notice convening an EGM to be
held on 5 May 2023 to consider, and if thought fit, to approve the
extension of the business combination deadline to 7 February 2024
by way of an amendment to the Articles.
Should the required majority of the shareholders not vote in
favour of the amendment to the articles, the Company ' s business
combination deadline will expire without a business combination
being completed. In accordance with the Articles, the Company will
redeem in full the Redeemable Class A ordinary shares, the public
warrants will expire worthless and the corresponding liability will
be cancelled, and the Company ' s Redeemable Class A ordinary
shares and Public Warrants will be de-listed from the London Stock
Exchange. The Company may also have to incur additional costs in
relation to its liquidation, which cannot be estimated accurately
at this stage. However, such costs are deemed not material in the
Board ' s opinion
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END
FR PPUPWCUPWGQR
(END) Dow Jones Newswires
April 28, 2023 13:07 ET (17:07 GMT)
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