0
MAC ALPHA LIMITED
Consolidated Financial Statements for the period from
incorporation on 11 October 2021 to 30 June 2022
CONTENTS
1
Management Report 2
Responsibility Statement 8
Independent Auditor’s Report 10
Consolidated Statement of Comprehensive Income 14
Consolidated Statement of Financial Position 15
Consolidated Statement of Changes in Equity 16
Consolidated Statement of Cash Flows 17
Notes to the Consolidated Financial Statements 18
Advisers 30
MANAGEMENT REPORT
2
We present to shareholders the audited consolidated financial statements of MAC Alpha Limited (the
“Company”) for the period from incorporation on 11 October 2021 to 30 June 2022 (the “Financial
Statements”), consolidating the results of MAC Alpha Limited and its subsidiary, MAC Alpha (BVI) Limited
(collectively, the “Group”).
Strategy
The Company was incorporated on 11 October 2021 and subsequently listed on the Main Market of the London
Stock Exchange on 24 December 2021. The Company has been formed for the purpose of effecting a merger,
share exchange, asset acquisition, share or debt purchase, reorganisation, or similar business combination with
one or more businesses. The Company's objective is to generate attractive long term returns for shareholders
and to enhance value by supporting sustainable growth, acquisitions, and performance improvements within
the acquired companies.
While a broad range of sectors will be considered by the Directors, those which they believe will provide the
greatest opportunity and which the Company will initially focus on include:
• Automotive & Transport
• Business-to-Business Services
• Clean Technology
• Consumer & Luxury Goods
• Financial Services, Banking & Fin Tech
• Insurance, Reinsurance & InsurTech, & Other Vertical Marketplaces
• Media & Technology
• Healthcare & Diagnostics
The Directors may consider other sectors if they believe such sectors present a suitable opportunity for the
Company.
The Company will seek to identify situations where a combination of management expertise, improving
operating performance, freeing up cashflow for investment and implementation of a focussed buy and build
strategy can unlock growth in their core markets and often into new territories and adjacent sectors.
Activity
During the period the Directors have engaged with a number of potential management teams, attracted by the
Company’s flexible structure and main market listing. Desktop due diligence has been conducted on respective
sectoral opportunities in which the prospective management teams have extensive experience. While none of
these opportunities have yet progressed to the appointment of a management partner, or completing a platform
acquisition, a number of discussions remain ongoing.
Results
The Group’s loss after taxation for the period to 30 June 2022 was £266,043. Of the costs incurred in the period,
£61,872 relates to non-recurring project costs. During the period, the Company raised £700,000 through the
issue of equity (excluding expenses) and held a cash balance at the period end of £282,244. The Group has not
yet acquired an operating business and as such is not yet income generating.
MANAGEMENT REPORT
3
Directors
The Directors of the Company have served as directors for the period from incorporation until the date of this
report. The Directors are:
James Corsellis (Chairman); and
Mark Brangstrup Watts.
Directors’ Biographies
James Corsellis
James brings extensive public company experience as well as management and corporate finance expertise
across a range of sectors and an extensive network of relationships with co-investors, advisers and other
business leaders.
Previously James has served as a director of the following companies: a non-executive director of BCA
Marketplace Limited (formerly BCA Marketplace Plc) from July 2014 to December 2017, Advanced Computer
Software from October 2006 to August 2008, non-executive chairman of Entertainment One Limited from
January 2007 to March 2014 and remaining on the board as a non-executive director until July 2015, non-
executive director of Breedon Aggregates Limited from March 2009 to July 2011 and as CEO of icollector Plc
from 1994-2001 amongst others. James was educated at Oxford Brookes University, the Sorbonne and London
University.
James is a managing partner of Marwyn Capital LLP and Marwyn Investment Management LLP, an executive
director of Silvercloud Holdings Limited, and the chairman of Marwyn Acquisition Company Plc, Marwyn
Acquisition Company III Limited. James is also a director of Marwyn Acquisition Company II Limited.
Mark Brangstrup Watts
Mark has many years of experience deploying long term investment strategies in the public markets. Mark brings
his background in strategic consultancy to the management team, having been responsible for strategic
development projects at a range of international companies including Ford Motors Company (US), Cummins
(Japan) and 3M (Europe).
Previously Mark has served a director of the following companies: a non-executive director of Zegona
Communications Plc from January 2015 to May 2020, BCA Marketplace Limited (formerly BCA Marketplace Plc)
from July 2014 to December 2017, Advanced Computer Software from October 2006 to September 2012,
Entertainment One Limited from June 2009 to July 2013, Silverdell Plc from March 2006 to December 2013,
Inspicio Holdings Limited from October 2005 to February 2008 and Talarius Limited September 2005 to February
2007 amongst others. Mark has a BA in Theology and Philosophy from King’s College, London.
Mark is a managing partner of Marwyn Capital LLP and Marwyn Investment Management LLP, an executive
director of Silvercloud Holdings Limited, and a director of AdvancedAdvT Limited, Marwyn Acquisition Company
Plc, Marwyn Acquisition Company II Limited and Marwyn Acquisition Company III Limited.
MANAGEMENT REPORT
4
Dividend Policy
The Company has not yet acquired a trading business and it is therefore inappropriate to make a forecast of the
likelihood of any future dividends. The Directors intend to determine the Company’s dividend policy following
completion of an acquisition and, in any event, will only commence the payment of dividends when it becomes
commercially prudent to do so.
Key Performance Indicators
The Company has not yet acquired a trading business and therefore no key performance indicators have been
set as it is inappropriate to do so.
Stated Capital
Details of the share capital of the Company during the period are set out in note 12 to the Financial Statements.
On 24 December 2021 the Company issued 700,000 ordinary shares and matching warrants for a total price of
£700,000. 90% of the ordinary shares and matching warrants were issued to an entity managed by Marwyn
Investment Management LLP (“MIM LLP”) and these are still held by this entity as at the date of this report. The
remaining 10% were issued to third party investors, including a number of senior executive managers of previous
successful acquisition companies launched by Marwyn.
Corporate Governance
As a company with a Standard Listing, the Company is not required to comply with the provisions of the UK
Corporate Governance Code and given the size and nature of the Group the Directors have decided not to adopt
the UK Corporate Governance Code. Nevertheless, the Board is committed to maintaining high standards of
corporate governance and will consider whether to voluntarily adopt and comply with the UK Corporate
Governance Code as part of any Acquisition, taking into account the Company’s size and status at that time.
The Company currently complies with the following principles of the UK Corporate Governance Code:
• The Company is led by an effective and entrepreneurial Board, whose role is to promote the long term
sustainable success of the Company, generating value for shareholders and contributing to wider
society.
• The Board ensures that it has the policies, processes, information, time and resources it needs in order
to function effectively and efficiently.
• The Board ensures that the necessary resources are in place for the Company to meet its objectives and
measure performance against them.
Given the size and nature of the Company, the Board has not established any committees and intends to make
decisions as a whole. If the need should arise in the future, for example following any acquisition, the Board may
set up committees and may decide to comply with the UK Corporate Governance Code.
Risks
A robust risk assessment was carried out by the Directors of the Company, along with its advisers, in preparation
for the Company’s IPO on 24 December 2021 and the Directors have identified a wide range of risks, which are
set out in the Company’s prospectus dated 24 December 2021. The Company’s prospectus is available on the
Company’s website: www.macalpha.com.
MANAGEMENT REPORT
5
The Company’s risk management framework incorporates a risk assessment that identifies and assesses the
strategic, operational and financial risks facing the business and mitigating controls. The risk assessment is
documented through a risk register which categorises the key risks faced by the business into:
• Business risks;
• Shareholder risks;
• Financial and procedural risks; and
• Risks associated with the acquisition process.
The risk assessment identifies the potential impact and likelihood of each of the risks detailed on the risk register
and mitigating factors/actions have also been identified.
The Company’s risk management process includes both formal and informal elements. The size of the Board and
the frequency in which they interact ensures that risks, or changes to the nature of the Company’s existing risks,
are identified, discussed and analysed quickly. The Company has a formal framework in place to manage the
review, consideration and formal approval of the risk register, including the risk assessment.
The Group’s only significant asset is cash. As at the statement of financial position date the Group’s cash balance
was £282,244. Price, credit, liquidity and cashflow risk are not considered to be significant due to the simple
nature of the Company’s assets and liabilities and the current activities undertaken by the Group. As the Group’s
assets are predominantly cash and cash equivalents, market risk, and liquidity risk are not currently considered
to be material risks to the Group. The Directors have reviewed the risk of holding a singular concentration of
assets as predominantly all credit assets held are cash and cash equivalents, however, do not deem this a
material risk. The risk is mitigated by all cash and cash equivalents being held with Barclays Bank plc, which holds
a short-term credit rating of P-1, as issued by Moody’s. The Directors have set out below the principal risks faced
by the business. These are the risks the Directors consider to be most relevant to the Company based on its
current status. The risks referred to below do not purport to be exhaustive and are not set out in any particular
order of priority.
Key risk
Explanation
The Company
requires further
funding to pursue
its stated
investment
strategy.
The Company does not currently have sufficient cash to pursue its stated investment
strategy. On 16 December 2021, t
he Company entered into a forward purchase
agreement (“FPA”) with Marwyn Value Investors II LP and Marwyn General Partner II
Limited, under which the Company has the ability to drawdown up to £20 million,
which may be drawndown for working capital purposes and to fund due diligence on
potential acquisition targets, through the issue of unlisted A shares. Any drawdown
under the FPA is subject to the prior approval of Marwyn Investment Management LLP
(the manager of the Marwyn Fund) and the satisfaction of conditions precedent.
The Company could
incur costs for
transactions that
may ultimately be
unsuccessful.
There is a risk that the Company may incur substantial legal, financial and advisory
expenses arising from unsuccessful transactions which may include public offer and
transaction documentation, legal, accounting and other due diligence which could
have a material adverse effect on the business, financial condition, results of
operations and prospects of the Company.
The Company may
not be able to
complete an
acquisition and
The Company's future success is dependent upon its ability to not only identify
opportunities but also to execute a successful acquisition. There can be no assurance
that the Company will be able to conclude agreements with any target business and/or
shareholders in the future and failure to do so could result in the loss of an investor's
MANAGEMENT REPORT
6
may face significant
competition for
acquisition
opportunities.
investment. In addition, the Company may not be able to raise the additional funds
required to acquire any target business, fund future operating expenses after the initial
twelve months, or incur the expense of due diligence for the pursuit of acquisition
opportunities in accordance with its investment objective.
There may also
be significant competition for some or all of the acquisition
opportunities that the Company may explore. Such competition may for example come
from strategic buyers, sovereign wealth funds, special purpose acquisition companies
and public and private investment funds, many of which are well established and have
extensive experience in identifying and completing acquisitions. A number of these
competitors may possess greater technical, financial, human and other resources than
the Company. Therefore, the Company may identify an investment opportunity in
respect of which it incurs costs, for example through due diligence and/or financing,
but the Company cannot assure i
nvestors that it will be successful against such
competition. Such competition may cause the Company to incur significant costs but
be unsuccessful in executing an acquisition.
The success of the
Company's
investment
objective is not
guaranteed.
The Company's return will be reliant upon the performance of the assets acquired and
the Company's investment objective from time to time. The success of the investment
objective depends on the Directors' ability to identify investments in accordance with
the Company's strategy
and to interpret market data and predict market trends
correctly. No assurance can be given that the strategy to be used will be successful
under all or any market conditions or that the Company will be able to generate
positive returns for shareholders. If the investment objective is not successfully
implemented, this could advers
ely impact the business, development, financial
condition, results of operations and prospects of the Company.
Directors Interests
The Directors have no direct interests in the ordinary shares of the Company. The Directors have interests in the
Company’s long term incentive plan, as detailed in note 15 to the Financial Statements. James Corsellis and Mark
Brangstrup Watts are managing partners of Marwyn Investment Management LLP which manages 90% per cent
of the ordinary shares and matching warrants. James Corsellis and Mark Brangstrup Watts are also managing
partners of Marwyn Capital LLP, a firm which provides corporate finance, company secretarial and ad-hoc
managed services support to the Company. Details of the related party transactions which occurred during the
period are disclosed in note 16 to the Financial Statements, save for the participation in the Company’s long
term incentive plan as disclosed in note 15 to the Financial Statements. There were no loans or guarantees
granted or provided by the Company and/or any of its subsidiaries to or for the benefit of any of the Directors.
Statement of Going Concern
The Financial Statements are prepared on a going concern basis, which assumes the Group will continue to be
able to meet its liabilities as they fall due for the foreseeable future. The Group had cash resources of £282,244
at 30 June 2022 and had net assets of £225,474. The Directors have considered the financial position of the
Group and reviewed forecasts and budgets for a period of at least 12 months following the approval of the
Financial Statements. The Company has entered into a forward purchase agreement (“FPA”) with Marwyn Value
Investors II LP and Marwyn General Partner II Limited, under which the Company has the ability to drawdown
up to £20 million, which may be drawndown for working capital purposes and to fund due diligence on potential
acquisition targets, through the issue of unlisted A shares. Any drawdown under the FPA is subject to the prior
approval of Marwyn Investment Management LLP (the manager of the Marwyn Fund) and the satisfaction of
conditions precedent. Marwyn Investment Management LLP has confirmed that it intends to provide the
MANAGEMENT REPORT
7
financial resources necessary for the Group to continue as a going concern for a period of at least 12 months
from the date of these financial statements.
Subject to the structure of any potential transaction, the Company will need to raise additional funds for the
acquisition in the form of equity and/or debt, which is not factored into the Director’s going concern assessment
as this is dependent on the size and nature of a future acquisition. The Directors have considered the ongoing
impact of the Covid-19 pandemic, conflict in Ukraine and current macro-economic factors on the Group’s
forecast cashflows and liabilities, concluding that prior to completing a transaction, these have no material
impact on the Group due to the nature of its operations.
Based on this review the Directors are satisfied that at the date of approval of the Financial Statements, the
Company and the Group have sufficient resources to continue to pursue its stated strategy.
Outlook
While no appointment of an executive management team or platform acquisition has yet been completed, the
Directors remain highly confident in delivering the stated investment strategy, particularly in the current
environment which is likely to provide differentiated deal flow at more attractive valuations than has been the
case in recent years.
RESPONSIBILITY STATEMENT
8
The Directors are responsible for preparing the Financial Statements in accordance with applicable laws and
regulations,
including the BVI Business Companies Act, 2004. The Directors have prepared the Financial
Statements for the period from incorporation to 30 June 2022, which give a true and fair view of the state of
affairs of the Group and the profit or loss of the Group for that period.
The Directors have acted honestly and in good faith and in what the Directors believes to be in the best interests
of the Company.
The Directors have chosen to use International Financial Reporting Standards as adopted by the European Union
(“IFRS”) in preparing the Financial Statements. International Accounting Standard 1 requires that financial
statements present fairly for each financial period the group’s financial position, financial performance and cash
flows. This requires the faithful presentation of the effects of transactions, other events and conditions in
accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the
International Accounting Standards Board’s “Framework for the preparation and presentation of financial
statements”. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable
IFRS.
A fair presentation also requires the Directors to:
• select consistently and apply appropriate accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
• make judgements and accounting estimates that are reasonable and prudent;
• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the
entity’s financial position and financial performance;
• state that the Group has complied with IFRS, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the company will continue in business.
The Directors are also required to prepare financial statements in accordance with the rules of the London Stock
Exchange for companies trading securities on the Stock Exchange.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the Group, for safeguarding the assets, for taking reasonable steps for the
prevention and detection of fraud and other irregularities and for the preparation of financial statements.
Financial information is published on the Group’s website. The maintenance and integrity of this website is the
responsibility of the Directors; the work carried out by the auditor does not involve consideration of these
matters and, accordingly, the auditor’s accept no responsibility for any changes that may occur to the financial
statements after they are presented initially on the website. Legislation in the British Virgin Islands governing
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT
9
Directors’ Responsibilities Pursuant to DTR4
In compliance with the Listing Rules of the London Stock Exchange, the Directors confirm to the best of their
knowledge:
• The Financial Statements have been prepared in accordance with IFRS and give a true and fair view of
the assets, liabilities, financial position and loss of the Group.
• The management report includes a fair review of the development and performance of the business
and the financial position of the Group, together with a description of the principal risks and
uncertainties that it faces.
Independent Auditor
Baker Tilly Channel Islands Limited ("BTCI") was appointed as the Company's independent auditor during the
period. BTCI has expressed its willingness to continue to act as auditor to the Group.
Disclosure of Information to Auditor
Each of the Directors in office at the date the Report of the Directors is approved, whose names and functions
are listed in the Report of the Directors confirm that, to the best of their knowledge:
• so far as they are aware, there is no relevant audit information of which the Group’s auditor is unaware;
and
• they have taken all the steps that they ought to have taken as a Director in order to make themself
aware of any relevant audit information and to establish that the Group’s auditor is aware of that
information.
This Directors’ Report was approved by the Board of Directors on 27 October 2022 and is signed on its behalf.
By Order of the Board
James Corsellis
Chairman
27 October 2022
INDEPENDENT AUDITOR’S REPORT
10
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MAC ALPHA LIMITED
Opinion
We have audited the consolidated financial statements of MAC Alpha Limited (the “Company” and, together
with its subsidiary,
MAC Alpha (BVI) Limited, the “Group”), which comprise the consolidated statement of
financial position as at 30 June 2022, and the consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the period then ended, and notes
to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements:
• give a true and fair view of the consolidated financial position of the Group as at 30 June 2022, and of its
consolidated financial performance and its consolidated cash flows for the period then ended in accordance
with International Financial Reporting Standards as adopted by the European Union (IFRSs); and
• have been prepared in accordance with the requirements of the BVI Business Company Act 2004, as
amended.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordance
with the ethical requirements that are relevant to our audit of the consolidated financial statements in Jersey,
including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by us, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the
matter
Key observations communicated
to those charged with governance
Equity and Warrants Issuance
The warrants issued to investors
are subject to judgement in both
classification and valuation.
The classification of the warrants is
complex and must consider the
nature and details of the
instruments’
contracts to
determine the correct
classification between equity and
liabilities.
Our audit procedures included, but
were not limited to:
Classification:
We obtained an understanding of
management’s assessment for the
classification of these instruments
and the rationale for their
classification.
We reviewed, in conjunction with
our Technical Director the
classification of these instruments
and management’s assessment in
Based on the procedures
performed, we are satisfied that
management’s judgements and
estimates in respect of the
valuation and classification of
warrants for the period ended 30
June 2022 along with the related
disclosures in the consolidated
financial statements are
appropriate.
We have nothing to report to those
charged with governance from our
testing.
INDEPENDENT AUDITOR’S REPORT
11
Further the fair value of these
warrants was determined using
the Black Scholes option pricing
methodology which considered
the exercise price, expected
volatility, risk free rate, expected
dividends and expected term of
the warrants which is complex and
involves estimates and
judgements.
Financial Statement Impact:
£105,000
Fair Value of Warrants
The accounting policies on page
20 sets out the treatment applied
by management, and related
disclosures are presented in Note
12.
accordance with IAS 32 and IFRS 9
and we challenged management
on their assessment.
Valuation:
We obtained the valuation report
prepared by management’s
expert.
We performed the review of and
validation of the valuation
assumptions, methodology and
calcul
ations in respect of the
valuation of the instruments and
determined whether it was in
accordance with the requirements
of IFRS 9 and IFRS 13.
Disclosure:
We reviewed the relevant
disclosures in the consolidated
financial statements in accordance
with the requirements of the IFRS
as adopted by the European Union
and performed a financial
statement disclosure checklist
utilising specialist software.
Our application of Materiality
Materiality for the consolidated financial statements as a whole was set at £5,600, determined with reference
to a benchmark of Net Assets, of which it represents 2.5%.
In line with our audit methodology, our procedures on individual account balances and disclosures were
performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that
individually immaterial misstatements in individual account balances add up to a material amount across the
consolidated financial statements as a whole.
Performance materiality was set at 70% of materiality for the consolidated financial statements as a whole,
which equates to £3,950. We applied this percentage in our determination of performance materiality because
we did not identify any factors indicating an elevated level of risk.
We reported to the Board of Directors any uncorrected omissions or misstatements exceeding £282, in addition
to those that warranted reporting on qualitative grounds.
All Group companies were within the scope of testing by the Group audit team.
Conclusions relating to Going Concern
In auditing the consolidated financial statements, we have concluded that the Directors’ use of the going concern
basis of accounting in the preparation of the consolidated financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group and Company’s ability to
continue as a going concern for a period of at least twelve months from when the consolidated financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
INDEPENDENT AUDITOR’S REPORT
12
Other information
The other information comprises the information included in the annual report other than the consolidated
financial statements and our auditor's report thereon. The Directors are responsible for the other information
contained within the annual report. Our opinion on the consolidated financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the consolidated financial statements themselves. If, based on the work
performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Responsibilities of the Directors
As explained more fully in the Statement of Directors’ responsibility statement set out on pages 8 and 9, the
Directors are responsible for the preparation of consolidated financial statements that give a true and fair view
in accordance with IFRSs, and for such internal control as the Directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the Group and
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 management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
The Directors are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
• Enquiry of management to identify any instances of non-compliance with laws and regulations, including
actual, suspected or alleged fraud;
• Reading minutes of meetings of the Board of Directors;
• Review of legal invoices;
• Review of management’s significant estimates and judgements for evidence of bias;
• Review for undisclosed related party transactions;
• Obtained and reviewed bank statements as well as reviewed ledgers and minutes to ensure revenue is
complete and as per our expectation;
• Using analytical procedures to identify any unusual or unexpected relationships; and
• Undertaking journal testing, including an analysis of manual journal entries to assess whether there were
large and/or unusual entries pointing to irregularities, including fraud.
A further description of the auditor’s responsibilities for the audit of the financial statements is located at the
Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
INDEPENDENT AUDITOR’S REPORT
13
Other matters which we are required to address
We were appointed by Mac Alpha Limited on 27 July 2022 to audit the consolidated financial statements. Our
total uninterrupted period of engagement is 1 year.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group and we remain
independent of the Group in conducting our audit.
Use of this Report
This report is made solely to the Members of the Company, as a body, in accordance with our letter of
engagement, dated 22 September 2022. Our audit work has been undertaken so that we might state to the
Members those matters we are required to state to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company
and its Members, as a body, for our audit work, for this report, or for the opinions we have formed.
Sandy Cameron
For and on behalf of Baker Tilly Channel Islands Limited
Chartered Accountants
St Helier, Jerse
y
Date:
27 October 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
14
Loss per share
£
Basic and diluted
7
(0.530
The Group’s activities derive from continuing operations.
The notes on pages 18 to 29
form an integral part of these Financial Statements.
Period
from
incorporation to
30 June
2022
Note
£’s
Administrative expenses
6
Operating loss
Finance income
Loss before income taxes
Income tax
Loss for the period
Total other comprehensive income
Total comprehensive loss for the period
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
15
The notes on pages 18 to 29
form an integral part of these Financial Statements.
The Financial Statements were approved by the Board of Directors on 27 October 2022 and were signed on its
behalf by:
James Corsellis
Chairman
Mark Brangstrup Watts
Director
As at
30 June 202
2
Assets
Note
£’s
Current assets
Other receivables
9
Cash and cash equivalents
10
Total current assets
Total assets
Equity and liabilities
Equity
Ordinary Shares
12
Sponsor share
12
Warrant reserve
12
Share-based payment reserve
15
Accumulated losses
(266,043 )
Total equity
Current liabilities
Trade and other payables
11
Total liabilities
Total equity and liabilities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
16
The notes on pages 18 to 29
form an integral part of these Financial Statements.
Notes
Ordinary
Shares
Sponsor
Share
Share
Based
Payment
Reserve
Warrant
reserve
Accumulated
losses Total equity
£’s £’s £’s £’s £’s £’s
Balance at incorporation
-
-
-
-
-
-
Issuance of 1 ordinary share
12
Redesignation of 1 ordinary share
12
(1 )
Issuance of 700,000 ordinary shares and matching
warrants 12 595,000 - - 105,000 - 700,000
Share issue costs
12
(276,000 )
(276,000 )
Total comprehensive loss for the period
(266,043 )
(266,043 )
Share-based payment charge
15
Balance at 30 June 2022
(266,043 )
CONSOLIDATED STATEMENT OF CASH FLOWS
17
For the period
ended
30 June
2022
Note
£’s
Operating activities
Loss for the period
(266,043 )
Adjustments to reconcile total operating loss to net cash flows:
Share-based payment expense
15
Working capital adjustments:
Increase in other receivables
(9,602 )
Increase in trade and other payables
Net cash flows used in operating activities
(156,757 )
Financing activities
Proceeds from issue of ordinary share capital, matching warrants and 1 sponsor
share
12
Proceeds from issue of ordinary A shares
Costs directly attributable to equity raise
(276,000 )
Net cash flows received from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
-
Cash and cash equivalents at the end of the period
10
The notes on pages 18 to 29 form an integral part of these Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18
1. GENERAL INFORMATION
the Main Market of the London Stock Exchange on 24 December 2021 and has its registered address at
has one subsidiary, MAC Alpha (BVI) Limited (together with the Company the "Group").
2. ACCOUNTING POLICIES
(a) Basis of preparation
The Financial Statements for the period from incorporation to 30 June 2022 have been prepared in accordance
with International Financial Reporting Standards and IFRS Interpretations Committee interpretations as adopted
by the European Union (collectively, “IFRS”) and are presented in British pounds sterling, which is the
presentational currency of the Group and the functional currency and presentational currency of the Company.
The Financial Statements have been prepared under the historical cost basis. This is the Group’s first set of
financial statements since incorporation and as such no comparatives have been presented.
The principal accounting policies adopted in the preparation of the Financial Statements are set out below. The
policies have been consistently applied throughout the period presented.
(b) Going concern
The Financial Statements are prepared on a going concern basis, which assumes the Group will continue to be
able to meet its liabilities as they fall due for the foreseeable future. The Group had cash resources of £282,244
at 30 June 2022 and had net assets of £225,474. The Directors have considered the financial position of the
Group and reviewed forecasts and budgets for a period of at least 12 months following the approval of the
Financial Statements. The Company has entered into a forward purchase agreement (“FPA”) with Marwyn Value
Investors II LP and Marwyn General Partner II Limited, under which the Company has the ability to drawdown
up to £20 million, which may be drawn down for working capital purposes and to fund due diligence on potential
acquisition targets, through the issue of unlisted A shares. Any drawdown under the FPA is subject to the prior
approval of Marwyn Investment Management LLP (the manager of the Marwyn Fund) and the satisfaction of
conditions precedent. Marwyn Investment Management LLP has confirmed that it intends to provide the
financial resources necessary for the Group to continue as a going concern for a period of at least 12 months
from the date of these financial statements.
Subject to the structure of any potential transaction, the Company will need to raise additional funds for the
acquisition in the form of equity and/or debt, which is not factored into the Director’s going concern assessment
as this is dependent on the size and nature of a future acquisition. The Directors have considered the ongoing
impact of the Covid-19 pandemic, conflict in Ukraine and current macro-economic factors on the Group’s
forecast cashflows and liabilities, concluding that prior to completing a transaction, these have no material
impact on the Group due to the nature of its operations.
Based on this review the Directors are satisfied that at the date of approval of the Financial Statements, the
Company and the Group have sufficient resources to continue to pursue its stated strategy.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19
2. ACCOUNTING POLICIES (Continued)
New standards and amendments to International Financial Reporting Standards
Standards, amendments and interpretations effective and adopted by the Group:
The accounting policies adopted in the presentation of these Financial Statements reflect the adoption of the
below listed new standards, amendments and interpretations effective for periods beginning on or after 1
January 2021: Interest rate benchmark reform (Phase 2 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
16) and Covid-19 related rent concessions (Amendments to IFRS 16). None of these new standards, amendments
or interpretations have had a material impact on the Group.
Standards, amendments and interpretations issued but not yet effective:
The following standards are issued but not yet effective. The Group intends to adopt these standards, if
applicable, when they become effective. It is not currently expected that these standards will have a material
impact on the Group.
Standard
Effective date
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
1 January 2022
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
1 January 2022
Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS
16 and IAS 41);
1 January 2022
Amendments to IFRS 3: References to Conceptual Framework;
1 January 2022
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as
Current or Non-current*;
1 January 2023
Disclosure of accounting policies (Amendments to IAS 1);
1 January 2023
Extension of temporary exemption of applying IFRS 9 (Amendments to IFRS 4)
1 January 2023
Deferred Tax relating to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12);
1 January 2023
Initial Application of IFRS 17 and IFRS 9 – Comparative Information Amendment to IFRS
17)*;
1 January 2023
Definition of accounting estimates (Amendments to IAS 8);
1 January 2023
Amendments to IFRS 17 Insurance contracts;
1 January 2023
Amendment to IFRS 16 Leases: Lease Liability in a sale & leaseback*.
1 January 2024
* Subject to EU endorsement
(c) Basis of consolidation
Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial information of subsidiaries is fully consolidated in these Financial Statements
from the date that control commences until the date that control ceases.
Intragroup balances, and any gains and losses or income and expenses arising from intragroup transactions, are
eliminated in preparing these Financial Statements.
(d) 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20
2. ACCOUNTING POLICIES (Continued)
The Group initially recognises financial assets and financial liabilities at fair value. Financial assets and liabilities
are subsequently remeasured at amortised cost using the effective interest rate.
(e) Cash and cash equivalents
Cash and cash equivalents comprise cash balances at banks.
(f) Stated capital
Ordinary shares, A shares and sponsor shares are classified as equity
. Incremental costs directly attributable to
the issue of new shares are recognised in equity as a deduction from the proceeds.
(g) Corporation tax
There is no corporate, income or other tax of the British Virgin Islands imposed by withholding or otherwise on
BVI companies. The Company will therefore not have any tax liabilities or deferred tax in the BVI. The Company
is exempt from all provisions of the Income Tax Act of the British Virgin Islands.
(h) Loss per ordinary share
The Group presents basic earnings per ordinary share (“EPS”) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares.
(i) Share based payments
The A ordinary shares in MAC Alpha (BVI) Limited (the “Incentive Shares”), represent equity-settled share-based
payment arrangements under which the Company receives services as a consideration for the additional rights
attached to these equity shares, over and above their nominal price.
Equity-settled share-based payments to Directors and others providing similar services are measured at the fair
value of the equity instruments at the grant date. Fair value is determined using an appropriate valuation
technique, further details of which are given in note 15. The fair value is expensed, with a corresponding increase
in equity, on a straight-line basis from the grant date to the expected exercise date. Where the equity
instruments granted are considered to vest immediately, the services are deemed to have been received in full,
with a corresponding expense and increase in equity recognised at grant date.
(j) Warrants
On 24 December 2021, the Company issued 700,000 ordinary shares and matching warrants. Under the terms
of the warrant instrument, warrant holders are able to acquire one ordinary share per warrant at a price of £1
per ordinary share. Warrants are accounted for as equity instruments under IAS 32 and are measured at fair
value at grant date. Fair value of the warrants has been calculated using a Black Scholes option pricing
methodology and details of these estimates and judgements used in determining fair value of the warrants are
set out in note 3.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Group’s Financial Statements under IFRS requires the Directors to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets
and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and
other factors including expectations of future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
Critical accounting judgements
Classification of warrants
As part of the Company’s initial fundraising on IPO, the Company issued ordinary shares to a number of investors.
For every ordinary share subscribed for, each investor was also granted a warrant (“Warrant”) to acquire a
further ordinary share at an exercise price of £1.00 per share. The Warrants are exercisable at any time until five
years after the IPO date, being 24 December 2021.
Warrants can only be classified as equity if they will be settled only by the issuer exchanging a fixed amount of
cash or another financial asset for a fixed number of its own equity instruments. The warrant instrument contains
exercise price adjustment (“Exercise Price Adjustment”), whereby if the ordinary shares are issued at less than
£1 before or as part of an acquisition then the exercise price equals the discounted issue price, as a result the
fixed-for-fixed requirement is breached. However, it is the opinion of the Directors that whilst the Exercise Price
Adjustment exists, the likelihood of this being used is remote, and therefore it is most appropriate for the
Warrants to be classified as equity.
Key sources of estimation uncertainty
Valuation of incentive shares
There are significant estimates and assumptions used in the valuation of the A ordinary Shares in MAC Alpha
(BVI) Limited the (“Incentive Shares”). Management has considered at the grant date, the probability of a
successful first acquisition by the Group and the potential range of value for the Incentive Shares, based on the
circumstances on the grant date. The fair value of the Incentive Shares and related share-based payment expense
was calculated using a Monte Carlo valuation model. A summary of the terms is set out in note 15.
Valuation of warrants
The Warrants were valued using the Black Scholes option pricing methodology which considered the exercise
price, expected volatility, risk free rate, expected dividends and expected term of the Warrants.
4. SEGMENT INFORMATION
The Board of Directors is the Group’s chief operating decision-maker. As the Group has not yet acquired an
operating business, the Board of Directors considers the Group as a whole for the purposes of assessing
performance and allocating resources, and therefore the Group has one reportable operating segment.
5. EMPLOYEES AND DIRECTORS
The Group does not have any employees. During the period ended 30 June 2022, the Company had two
directors: James Corsellis and Mark Brangstrup Watts, neither director received remuneration under the terms
of their director service agreements. The Company’s subsidiary has issued Incentive Shares as more fully
disclosed in note 15 in which the Directors are indirectly beneficially interested.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22
6. ADMINISTRATIVE EXPENSES
Period from
incorporation to
30 June
202
2
£’s
Group expenses by nature
Non-recurring project, professional and due diligence costs
61,872
Professional support
131,842
Audit fees payable in respect of the audit of the Group (Note 18)
15,351
Share-based payment expenses (Note 15)
52,516
Other expenses
4,462
266,043
7. LOSS PER ORDINARY SHARE
Basic EPS is calculated by dividing the profit/ loss attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the period. Diluted EPS is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
The weighted average number of shares has not been adjusted in calculating diluted EPS as there are no
instruments which have a current dilutive effect.
The Company has 700,000 ordinary shares and 1 sponsor share in issue at 30 June 2022. The sponsor share has
no rights to distribution and so has been ignored for the purposes of IAS 33.
Refer to note 15 (share based payments) for instruments that could potentially dilute basic EPS in the future.
For the period
ended 30 June
2022
Loss attributable to owners of the parent (£’s)
(266,043)
Weighted average in issue
502,290
Basic and diluted loss per ordinary share (£’s)
(0.5297)
8. SUBSIDIARY
Subsidiary undertaking of the Group
The Company owns the whole of the issued and fully paid ordinary share capital of its subsidiary undertaking.
The subsidiary undertaking of the Company as at 30 June 2022 is:
Subsidiary Nature of business
Country of
incorporation
Proportion of
ordinary
shares held by
parent
Proportion of
ordinary
shares held
by the Group
MAC Alpha (BVI) Limited
Incentive vehicle
BVI
100%
100%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23
8. SUBSIDIARY (CONTINUED)
The share capital of MAC Alpha (BVI) Limited consists of both ordinary shares and A ordinary shares. The A
ordinary shares are held by Marwyn Long Term Incentive LP (‘’MLTI’’) and are non-voting. Further detail on the
Incentive Shares is given in note 15.
The registered office of MAC Alpha (BVI) Limited is Commerce House, Wickhams Cay 1, P.O. Box 3140, Road
Town, Tortola, VG1110, British Virgin Islands.
9. OTHER RECEIVABLES
As at
30 June
2022
£’s
Amounts receivable within one year:
Prepayments
9,602
9,602
10. CASH AND CASH EQUIVALENTS
As at
30 June
2022
£’s
Cash and cash equivalents
Cash at bank
282,244
282,244
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents and deposits with banks
and financial institutions. For banks and financial institutions, only independently rated parties with a minimum
short-term credit rating of P-1, as issued by Moody’s, are accepted.
11. TRADE AND OTHER PAYABLES
As at
30 June
2022
£’s
Amounts falling due within one year:
Trade payables
33,149
Accruals
33,223
66,372
There is no material difference between the book value and the fair value of the trade and other payables. All
trade payables are non-interest bearing and are usually paid within 30 days.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24
12. STATED CAPITAL
Authorised
Unlimited ordinary shares of no par value
Unlimited A shares of no par value
Unlimited B shares of no par value
100 sponsor shares of no par value
Issued and fully paid
As at 30 June
2022
£’s
700,000 ordinary shares of no par value
319,000
1 sponsor share of no par value
1
Ordinary
shares of no
par value
Ordinary share
stated capital
£
Sponsor share
of no par value
Issued and fully paid
Opening number of shares on
incorporation
1
1
-
Capital reorganisation:
Sponsor share of no par value
(1)
(1)
1
Shares issued during the period:
Ordinary shares of no par value
700,000
595,000
-
Issue costs taken against stated capital
(276,000)
Closing number of shares at period end
700,000
319,000
1
On incorporation, the Company issued 1 ordinary share of no par value to MVI II Holdings I LP . On 28 October
2021, it was resolved that updated memorandum and articles (“Updated M&A”) be adopted by the Company
and with effect from the time the Updated M&A be registered with the Registrar of Corporate Affairs in the
British Virgin Islands, the 1 ordinary share which was in issue by the Company be redesignated as 1 sponsor share
of no par value (the “Sponsor Share”).
On 24 December 2021, the Company issued 700,000 ordinary shares and matching warrants (“Warrants”) at a
price of £1 for one ordinary share and matching Warrant. Under the terms of the warrant instrument, warrant
holders are able to acquire one ordinary share per warrant at a price of £1 per ordinary share. Warrants are
accounted for as equity instruments under IAS 32 and are measured at fair value at grant date, the combined
market value of one ordinary share and one warrant was considered to be £1, in line with the market price paid
by third party investors. A Black Scholes option pricing methodology was used to determine the fair value of the
Warrants, which considered the exercise price, expected volatility, risk free rate, expected dividends and
expected term. Warrants have been assigned a fair value of 15p per Warrant and each ordinary share has been
valued at 85p per share, therefore, on issuance of the Warrants £105,000 was recorded in the warrant reserve.
Costs of £276,000 directly attributable to the equity raise have been taken against stated capital during the
period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25
12. STATED CAPITAL (CONTINUED)
Holders of ordinary shares are entitled to receive notice and attend and vote at any meeting of members and
have the right to a share in any distribution paid by the Company and a right to a share in the distribution of the
surplus assets of the Company on a winding up.
The Sponsor Share confers upon the holder no right to receive notice and attend and vote at any meeting of
members, no right to any distribution paid by the Company and no right to a share in the distribution of the
surplus assets of the Company on a winding up. Provided the holder of the Sponsor Share holds directly or
indirectly 5 per cent. or more of the issued and outstanding shares of the Company (of whatever class other than
any Sponsor Shares), they have the right to appoint one director to the Board.
Provided the holder of the Sponsor Share holds directly or indirectly 5 per cent. or more of the issued and
outstanding shares of the Company (of whatever class other than any Sponsor Shares) or is a holder of incentive
shares the Company must receive the prior consent of the holder of the Sponsor Share in order to:
o issue any further Sponsor Shares;
o issue any class of shares on a non pre-emptive basis where the Company would be
required to issue such share pre-emptively if it were incorporated under the UK
Companies Act 2006 and acting in accordance with the Pre-Emption Group’s Statement of
Principles; or
o amend, alter, or repeal any existing, or introduce any new share-based compensation or
incentive scheme in respect of the Group; and
o take any action that would not be permitted (or would only be permitted after an
affirmative shareholder vote) if the Company were admitted to the Premium Segment of
the Official List.
The holder of the Sponsor Share has the right to require that: (i) any purchase or redemption by the Company
of its shares; or (ii) the Company’s ability to amend the Memorandum and Articles, be subject to a special
resolution of members whilst the Sponsor (or an individual holder of a Sponsor Share) holds directly or indirectly
5 per cent. Or more of the issued and outstanding shares of the Company (of whatever class other than any
Sponsor Shares) or are a holder of incentive shares.
13. RESERVES
The following describes the nature and purpose of each reserve within shareholders’ equity:
Accumulated losses
Cumulative losses recognised in the Consolidated Statement of Comprehensive Income.
Share based payment reserve
The share based payment reserve is the cumulative amount recognised in relation to the equity-settled share
based payment scheme as further described in note 15.
Warrant reserve
The warrant reserve includes the cumulative fair value of warrants issued as valued on the grant of the warrants.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26
14. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments as at 30 June 2022:
As at
30 June
2022
£’s
Financial assets measured at amortised cost
Cash and cash equivalents (Note 10)
282,244
282,244
Financial liabilities measured at amortised cost
Trade and other payables (Note 11)
66,372
66,372
All financial instruments are classified as current assets and current liabilities. There are no non-current financial
instruments as at 30 June 2022.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls, and to monitor risks and adherence limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. Treasury
activities are managed on a Group basis under policies and procedures approved and monitored by the Board.
As the Group’s assets are predominantly cash and cash equivalents, market risk and liquidity risk are not
currently considered to be material risks to the Group.
15. SHARE-BASED PAYMENTS
Management Long Term Incentive Arrangements
The Group has put in place a Long-Term Incentive Plan (“LTIP”), to ensure alignment between Shareholders, and
those responsible for delivering the Company’s strategy and to attract and retain the best executive
management talent.
The LTIP will only reward the participants if shareholder value is created. This ensures alignment of the interests
of management directly with those of Shareholders. As at the balance sheet date, an executive management
team is not yet in place and as such Marwyn Long Term Incentive LP ("MLTI") is the only participant in the LTIP.
Once an executive management team is appointed, they will participate in the LTIP and this will be dilutive to
MLTI. Under the LTIP, A ordinary shares ("Incentive Shares") are issued by the Subsidiary.
As at the statement of financial position date, MLTI had subscribed for redeemable A ordinary shares of £0.01
each in the Subsidiary entitling it to 100 percent of the incentive value.
Preferred Return
The incentive arrangements are subject to the Company's shareholders achieving a preferred return of at least
7.5 percent per annum on a compounded basis on the capital they have invested from Admission through to the
date of exercise (with dividends and returns of capital being treated as a reduction in the amount invested at
the relevant time) (the "Preferred Return").
Incentive Value
Subject to a number of provisions detailed below, if the Preferred Return and at least one of the vesting
conditions have been met, the holders of the Incentive Shares can give notice to redeem their Incentive Shares
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27
15. SHARE-BASED PAYMENTS (CONTINUED)
for ordinary shares in the Company ("Ordinary Shares") for an aggregate value equivalent to 20 percent of the
"Growth", where Growth means the excess of the total equity value of the Company and other shareholder
returns over and above its aggregate paid up share capital (20 percent of the Growth being the "Incentive
Value").
Grant date
The grant date of the Incentive Shares is the date that such shares are issued.
Redemption / Exercise
Unless otherwise determined and subject to the redemption conditions having been met, the Company and the
holders of the Incentive Shares have the right to exchange each Incentive Share for Ordinary Shares, which will
be dilutive to the interests of the holders of Ordinary Shares. However, if the Company has sufficient cash
resources and the Company so determines, the Incentive Shares may instead be redeemed for cash. It is
currently expected that in the ordinary course of business, the Incentive Shares will be exchanged for Ordinary
Shares. However, the Company retains the right but not the obligation to redeem the Incentive Shares for cash
instead. Circumstances where the Company may exercise this right include, but are not limited to, where the
Company is not authorised to issue additional Ordinary Shares or on the winding-up or takeover of the Company.
Any holder of Incentive Shares who exercises their Incentive Shares prior to other holders is entitled to their
proportion of the Incentive Value to the date that they exercise but no more. Their proportion is determined by
the number of Incentive Shares they hold relative to the total number of issued shares of the same class.
Vesting Conditions and Vesting Period
The Incentive Shares are subject to certain vesting conditions, at least one of which must be (and continue to
be) satisfied in order for a holder of Incentive Shares to exercise its redemption right.
The vesting conditions are as follows:
i. it is later than the third anniversary of the initial acquisition and earlier than the seventh anniversary of
the Acquisition;
ii. a sale of all or substantially all of the revenue or net assets of the business of the Subsidiary in
combination with the distribution of the net proceeds of that sale to the Company and then to its
shareholders;
iii. a sale of all of the issued ordinary shares of the Subsidiary or a merger of the Subsidiary in combination
with the distribution of the net proceeds of that sale or merger to the Company's shareholders;
iv. where by corporate action or otherwise, the Company effects an in-specie distribution of all or
substantially all of the assets of the Group to the Company's shareholders;
v. aggregate cash dividends and cash capital returns to the Company's Shareholders are greater than or
equal to aggregate subscription proceeds received by the Company;
vi. a winding-up of the Company;
vii. a winding-up of the Subsidiary; or
viii. a sale, merger or change of control of the Company.
If any of the vesting conditions described in paragraphs (ii) to (viii) above are satisfied before the third
anniversary of the initial acquisition, the A Shares will be treated as having vested in full.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28
15. SHARE-BASED PAYMENTS (CONTINUED)
Holding of Incentive Shares
MLTI holds Incentive Shares entitling it in aggregate to 100 per cent. of the Incentive Value. Any future
management partners or senior executive management team members receiving Incentive Shares will be
dilutive to the interests of existing holders of Incentive Shares, however the share of the Growth of the Incentive
Shares in aggregate will not increase.
The following shares were issued on 25 November 2021
Nominal Price
Issue price per A
ordinary share
£’s
Number of
A ordinary
shares
Unrestricted
market value
at grant date
£’s
IFRS 2 Fair
value
£’s
Marwyn Long Term
Incentive LP
£0.01 7.50 2,000 15,000 67,516
Valuation of Incentive Shares
A valuation of the incentive shares has been prepared by Deloitte LLP dated 25 November 2021 to determine
the fair value of the Incentive Shares in accordance with IFRS 2 at grant date.
There are significant estimates and assumptions used in the valuation of the Incentive Shares. Management has
considered at the grant date, the probability of a successful first acquisition by the Company and the potential
range of value for the Incentive Shares, based on the circumstances on the grant date.
The fair value of the Incentive Shares granted under the scheme was calculated using a Monte Carlo option
model. The fair value uses an ungeared volatility of 25 per cent, and an expected term of 7 years. The Incentive
Shares are subject to the Preferred Return being achieved, which is a market performance condition, and as such
has been taken into consideration in determining their fair value. A risk-free rate of 0.7 per cent. has been
applied, based on the average yield on a seven-year UK Gilt at the valuation date. The model incorporates a
range of probabilities for the likelihood of an acquisition being made of a given size.
Expense related to Incentive Shares
An expense of £52,516 has been recognised in the Statement of Comprehensive Income in respect of the
Incentive Shares issued to MLTI which is the difference between the IFRS 2 valuation at grant date of £67,516
and the amount payable by MLTI for 2,000 A ordinary shares of £15,000. There are no service conditions attached
to the MLTI shares, and hence the expense of £52,516 has been recognised in the consolidated statement of
comprehensive income for the period. The fair value at grant date has been taken to the share-based payment
reserve in the statement of changes in equity.
16. RELATED PARTY TRANSACTION
James Corsellis and Mark Brangstrup Watts are directors of the Company and Antoinette Vanderpuije is the
Company Secretary of the Company. James Corsellis and Mark Brangstrup Watts are managing partners of
Marwyn Investment Management LLP (“MIMLLP”), and Antoinette Vanderpuije is a partner of MIMLLP. MIMLLP
is the manager of the Marwyn Fund, the Marwyn Fund holds 90% of the Company’s issued ordinary shares.
MVI II Holdings I LP is an entity within the Marwyn Fund. MVI II Holdings I LP incurred costs of £23,382 in respect
of the incorporation and proposed listing of the Company, the Company repaid this amount in full during the
year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29
16. RELATED PARTY TRANSACTION (CONTINUED)
James Corsellis and Mark Brangstrup Watts are managing partners of Marwyn Capital LLP (“MCLLP”), and
Antoinette Vanderpuije is a partner of MCLLP. MCLLP has entered into an engagement letter with the Company
for the provision of corporate finance, company secretarial, administration and accounting services. As part of
this engagement a fee of £150,000 has been charged in relation to the establishment of the Company and the
subsequent listing, of which £Nil is outstanding at period end.
MCLLP has incurred costs of £312 in respect of the incorporation and listing of the Company, of which £nil was
outstanding at the period end. During the period, Marwyn Capital LLP charged £76,755 in respect of services
supplied of which £29,891 was outstanding at period end.
James Corsellis, Mark Brangstrup Watts and Antoinette Vanderpuije have an indirect beneficial interest in the
Incentive Shares as described in Note 15 of the Financial Statements through their indirect interest in MLTI which
owns 2,000 A Ordinary Shares in the capital of MAC Alpha (BVI) Limited.
17. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding at 30 June 2022 which would require disclosure
or adjustment in these Financial Statements.
18. INDEPENDENT AUDITOR’S REMUNERATION
For the period ended 30 June 2022, the Group has appointed BTCI as the Group’s independent auditor. Audit
fees payable to BTCI for the period ended 30 June 2022 are £15,351 (refer note 6). Fees payable for the period
ended 30 June 2022 in respect of procedures of a potential capital markets transaction were £6,000.
19. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would require disclosure or adjustment to these
Financial Statements.
ADVISERS
30
Company Secretary
BVI legal advisers to the Company
Antoinette Vanderpuije
Conyers Dill & Pearman
11 Buckingham Street
Commerce House
London
Wickhams Cay 1
WC2N 6DF
Road Town
Email: MACAlpha@marwyn.com
VG1110
Tortola
British Virgin Islands
Registered Agent and Assistant Company Secretary
Depository
Conyers Corporate Services (BVI) Limited
Link Market Services Trustees Limited
Commerce House
The Registry
Wickhams Cay 1
34 Beckenham Road
Road Town
Beckenham
VG1110
Kent
Tortola
BR3 4TU
English legal advisers to the Company
Registrar
Travers Smith LLP
Link Market Services (Guernsey) Limited
10 Snow Hill
Mont Crevelt House
London
Bulwer Avenue
EC1A 2AL
St Sampson
Guernsey
GY2 4LH
Registered office
Auditor
Commerce House
Baker Tilly Channel Islands Limited
Wickhams Cay 1
First floor, Kensington Chambers
Road Town
46-50 Kensington Place
Tortola
St Helier
British Virgin Islands
Jersey
JE4 0ZE