Interim Report for the period ended 30 June 2023

Financials Acquisition Corp

29 September 2023

 

Financials Acquisition Corp

Unaudited Condensed Interim Financial Report

For the period from 1 January 2023 to 30 June 2023

	Page(s)
Interim Board Report	1-4
Unaudited Condensed Statement of Financial Position	5
Unaudited Condensed Statement of Comprehensive Income	6
Unaudited Condensed Statement of Changes in Equity	7
Unaudited Condensed Statement of Cash Flows	8
Notes to the Unaudited Condensed Interim Financial Statements	9-31

Company Summary

The Directors of Financials Acquisition Corp (the "Company") are pleased to submit their Annual Report and Audited Financial Statements (the "Financial Statements") for the period ended 30 June 2023.

Financials Acquisition Corp (the "Company"), is an exempted company with limited liability, incorporated under the laws of the Cayman Islands on 31 August 2021. The Company is registered with the Registrar of Companies in the Cayman Islands under incorporation number 380273 and has its registered office at SIX, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

Principal Activity

The Company is a special purpose acquisition company (a "SPAC"), formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination (a "Business Combination"). The Company aims to identify and acquire a company or business operating principally (or adjacent to) the insurance or broader financial services industry.

The Company was admitted to trading on the main market of the London Stock Exchange on 13 April 2022, having raised £150,000,000 in its initial public offering (the "IPO") of 15,000,000 Class A Ordinary Shares ("Ordinary Shares") at £10.00 per share (the "Offering") with matching warrants being issued concurrently with the delivery of the Ordinary Shares to subscribers of Ordinary Shares in the Offering on the basis of one-half (1/2) of one (1) warrant per Ordinary Share ("Public Warrants"). Additionally, £4,500,000 was raised via the Company's Overfunding Subscription of 450,000 Ordinary Shares which were issued to the Overfunding Sponsor Entity.

The proceeds of the Offering were placed in an escrow account as outlined in the prospectus for the IPO (the "Escrow Account" and "Prospectus" respectively). At the same time as the Offering the Company raised £3,875,000 from the private placement of 3,875,000 Sponsor Warrants at £1.00 per Sponsor Warrant, the proceeds of which were held outside of the Escrow Account to cover the costs relating to the IPO and running costs as outlined in the Prospectus.

Business Combination

Since the completion of its IPO, the Company's leadership team has been focused on identifying a potential target for the business combination within the meaning of the Prospectus (the "Business Combination"). This process is ongoing and the Company will continue its search with the aim to complete a business combination within 15 months following the Admission Date (13 April 2022), subject to two three-month extension periods under conditions outlined in the Prospectus, or as otherwise extended with shareholder approval.

The proceeds of the Company's IPO, £154,500,000, were placed in its Escrow Account which is held at HSBC Bank plc. All amounts contributed to the Escrow Account are held for the benefit of the Company and the Ordinary Shareholders as further described in the Prospectus.

On 21 June 2023, the Company announced that it had recently identified a business combination opportunity which could involve the Company raising additional capital and becoming a listed operating company deploying funds into the Lloyds of London insurance market (the "Proposed Transaction").

Principal Risks and Uncertainties

Please refer to the following sections of the Prospectus for the Company's principal risks and uncertainties.

-     Risk Factors (pages 9 to 39)

The Company's risk management objectives and policies are consistent with those disclosed in the Prospectus. Additional risks or circumstances not known to the Company, or currently believed not to be material, could individually or cumulatively, later turn out to have a material impact on the Company's business, revenue, assets, liquidity, capital resources or net income.

Going concern

The Company's operation is restricted to structuring and completing its Business Combination, the Board have assessed the viability of the Company until the Business Combination Deadline of 13 July 2023, taking account of the Company's current position and the potential impact of the principal risks outlined in this statement.

The Company has 15 months from the admission date to complete a business combination, subject to two three-month extension periods if approved, or as otherwise extended with shareholder approval (the "Business Combination Deadline"). The Company has sufficient funds to cover operating costs through to the initial deadline. The costs related to the Company's IPO and working capital requirements up to the initial Business Combination Deadline were covered by the proceeds of the issuance of the Sponsor Warrants as part of the Offering process.  

On 23 June 2023, the Company called an Extraordinary General Meeting to extend the Business Combination Deadline to 30 December 2023, for the purpose of implementing the Proposed Transaction, which was approved by shareholders at the Extraordinary General Meeting held on 10 July 2023 (the "Extension").

 In relation to the Extension, the Company expects to be able to secure additional funds for general working capital purposes from certain related parties of the Company and an announcement will be made by the Company as and when such arrangements have been entered into. In addition, to the extent that the Company is unable to raise additional funds to pay third party adviser costs (and other costs) related to the implementation of the Business Combination, the Company expects to structure the costs associated with the implementation of the Business Combination in such a manner so as to ensure that such costs are only payable upon the consummation of the Business Combination or, in the event that a Business Combination cannot be consummated by the Business Combination Deadline, upon a winding-up of the Company out of the Escrow Account ahead of Ordinary Shareholders pursuant to the terms of the Articles of Association of the Company.

The Company will have until the Business Combination Deadline to complete a Business Combination, subject to any extension period being granted. If the Company has not completed a Business Combination by such time (or the expiry of any extension period), it will: cease all operations except for the purpose of winding up; as promptly as reasonably possible, redeem the Ordinary Shares, and as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Directors, liquidate and dissolve.

The events and conditions that management considers relevant to the Company's ability to continue as a going concern include the limited time frame remaining to the Business Combination Deadline and market conditions inclusive of competition and potential geopolitical events.

Management remain focused on completing a Business Combination by the Business Combination Deadline. Having considered all relevant information, management have concluded that there are no material uncertainties related to the identified events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. Reaching the conclusion that there is no material uncertainty involves significant judgement.

Going concern (continued)

In addition, such opinion is not dependent on the Company completing a Business Combination by the Business Combination Deadline. It is important to note that nothing in this analysis implies that the Company would be unable to meet its debts as they fall due or to fulfil the above mentioned redemptions of redeemable Ordinary Shares should the Company not complete a Business Combination by the Business Combination Deadline.

Corporate Governance

As an exempted company incorporated under the laws of the Cayman Islands with a standard listing on the London Stock Exchange's main market, the Company has no statutory obligation or listing requirement to adopt a corporate governance code. However, the Company has to voluntarily observe the requirements of the UK Corporate Governance Code insofar as appropriate for a SPAC in its pre-merger stage.

·    The Directors' Corporate Governance Statement in respect of its governance obligations can be found on pages 8 to 9.

·    The Board has established an Audit Committee, comprised of two independent directors, to provide oversight and preserve the integrity of the Company's financial reporting process and internal controls and risk management systems, and to monitor the statutory audit of the Company's annual financial statements. The Report of the Audit Committee can be found on pages 11 to 14.

Related Party Transactions

The main related party transactions are outlined in the "Related Party Transactions" section of the Prospectus. Refer to note 10 - Related party transactions for disclosure within the Financial Statements

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable laws and regulations. The Board confirms that to the best of their knowledge:

-    the Financial Statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit of the Company, as required by Disclosure and Transparency Rule ("DTR") 4.1.12R;and

-    the Director's Report includes a fair review of the development and performance of the business during the period, and the position of the Company at the end of the year, together with a description of the principal risks and uncertainties that the Company faces, as required by DTR 4.1.8R and DTR 4.1.9R.

The Board 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 that enable them to ensure that the Financial Statements comply with the Companies Act (As Revised) of the Cayman Islands. The Board is also responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the Cayman Islands governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

Signed on behalf of the Board by:

Andrew Rear (Executive Chairman)

26/9/2023

Financials Acquisition Corp

Unaudited Condensed Statement of Financial Position

As at 30 June 2023

			30 June 2023 (Unaudited)	31 December 2022 (Audited)
	Note		£	£
Assets
Current assets
Cash and cash equivalents	5		84,183	203,264
Restricted cash	5		158,934,183	155,984,100
Trade and other receivables			51,575	74,191
Total assets			159,069,941	156,261,555
Liabilities and shareholders' equity
Non-current liabilities
Redeemable ordinary shares	7		149,870,215	148,214,847
Current liabilities
Derivative liabilities	3		266,250	305,000
Accrued expenses			738,243	1,109
Due to related party	10		26,060	26,060
Total liabilities			150,900,768	148,547,016
Shareholders' equity
Issued share capital	7		4,494,614	4,494,614
Other reserves			36,140,970	22,419,507
Accumulated loss			(32,466,411)	(19,199,582)
Total shareholders' equity			8,169,173	7,714,539
Total liabilities and shareholders' equity			159,069,941	156,261,555

The Condensed Interim Financial Statements were approved and authorized for issue by the Board of Directors on 29 September 2023 and signed on its behalf by:

Andrew Rear

Executive Chairman

Financials Acquisition Corp

Unaudited Condensed Statement of Comprehensive Income 
For the period from 1 January 2023 to 30 June 2023

		For the period from 1 January 2023 to 30 June 2023	For the period from 31 August 2021 (date of incorporation) to 30 June 2022
	Note	£	£
Income
Interest income		2,950,083	153,051
Total income		2,950,083	153,051
Expenses
Share-based payment expense	8	13,721,463	5,913,117
Professional fees		845,477	216,688
Listing and regulatory fees		10,000	187,580
Directors and officers insurance fees		22,615	56,351
Share issue costs	7	-	24,372
Other expenses		739	303
Total expenses		14,600,294	6,398,411
Net investment loss		(11,650,211)	(6,245,360)
Net change in unrealised gain/(loss) on financial liabilities
Net change in unrealised gain/(loss) on financial liabilities	3	38,750	(1,067,500)
Net gain/(loss) on financial liabilities		38,750	(1,067,500)
Net loss before finance expense		(11,611,461)	(7,312,860)
Finance expense	7	1,655,368	691,612
Total comprehensive loss for the period		(13,266,829)	(8,004,472)
Basic and dilutive net loss per share	9	(3.08)	(2.80)

All items in the above statement derive from continuing operations.

Financials Acquisition Corp 

Unaudited Condensed Statement of Changes in Equity 

For the period from 1 January 2023 to 30 June 2023

		Share capital	Other reserves*	Accumulated loss	Total shareholders' equity
		£	£	£	£
As at 1 January 2023		4,494,614	22,419,507	(19,199,582)	7,714,539
Share-based payment reserve		-	13,721,463	-	13,721,463
Total comprehensive loss for the period		-	-	(13,266,829)	(13,266,829)
As at 30 June 2023		4,494,614	36,140,970	(32,466,411)	8,169,173

		Share capital	Other reserves*	Accumulated loss	Total shareholders' equity
		£	£	£	£
As at 31 August 2021 (date of incorporation)		-	-	-	-
Issued share capital and sponsor warrants		4,500,305	8,470,617	-	12,970,922
Share cancellation		(5,691)	-	-	(5,691)
Total comprehensive loss for the period		-	-	(8,004,472)	(8,004,472)
As at 30 June 2022		4,494,614	8,470,617	(8,004,472)	4,960,759

* Sponsor Warrants have been accounted for as a capital contribution in other reserves. Please see notes 2 and 7 for further details.

Financials Acquisition Corp 

Unaudited Condensed Statement of Cash Flows 

For the period from 1 January 2023 to 30 June 2023

		For the period from 1 January 2023 to 30 June 2023	For the period from 31 August 2021 (date of incorporation) to 30 June 2022
		£	£
Cash flows from operating activities
Total comprehensive loss for the period		(13,266,829)	(8,004,472)
Adjustments to reconcile total comprehensive loss for the period to net cash provided by operating activities:
Net change in unrealised (gain)/loss on financial liabilities		(38,750)	1,067,500
Share-based payment expense		13,721,463	5,913,117
Finance expense		1,655,368	691,612
Changes in:
Trade and other receivables		22,616	(172,191)
Accrued expenses		737,134	50,712
Due to related party		-	26,060
Net cash provided by / (used in) operating activities		2,831,002	(427,662)
Cash flows from investing activities
Increase in restricted cash		(2,950,083)	(154,653,051)
Net cash used in investing activities		(2,950,083)	(154,653,051)
Cash flows from financing activities
Proceeds from sponsor and overfunding shares		-	4,500,305
Share cancellation		-	(5,691)
Proceeds from issued share capital and public warrants		-	145,882,057
Proceeds from issuance of sponsor warrants (including other reserves)		-	3,875,000
Payment of share issue costs		-	1,275,000
Net cash provided by financing activities		-	155,526,671
Net change in cash and cash equivalents		(119,081)	445,958
Cash and cash equivalents at beginning of the period		203,264	-
Cash and cash equivalents at end of the period		84,183	445,958

1.    General information

Financials Acquisition Corp (the "Company"), is an exempted company with limited liability, incorporated under the laws of the Cayman Islands on 31 August 2021. The Company is registered with the Registrar of Companies in the Cayman Islands under incorporation number 380273 and has its registered office in Grand Cayman, Cayman Islands.

The Company is a special purpose acquisition company (a "SPAC"), formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination (a "Business Combination"). The Company aims to identify and acquire a company or business operating principally (or adjacent to) the insurance or broader financial services industry.

The Company is sponsored by FINSAC LLP (the "Sponsor Entity") and FINSAC II LLP (the "Overfunding Sponsor Entity").

The Company was admitted to trading on the main market of the London Stock Exchange on 13 April 2022, having raised £150,000,000 in its initial public offering (the "IPO") of 15,000,000 Class A Ordinary Shares ("Ordinary Shares") at £10.00 per share (the "Offering") with matching warrants being issued concurrently with the delivery of the Ordinary Shares to subscribers of Ordinary Shares in the Offering on the basis of one-half (1/2) of one (1) warrant per Ordinary Share ("Public Warrants"). Additionally, £4,500,000 was raised via the Company's Overfunding Subscription of 450,000 Ordinary Shares which were issued to the Overfunding Sponsor Entity.

The proceeds of the Offering were placed in an escrow account as outlined in the Prospectus for the IPO (the "Escrow Account" and "Prospectus" respectively). At the same time as the Offering, the Company raised £3,875,000 from the private placement of 3,875,000 Sponsor Warrants(as defined in the Prospectus) at £1.00 per Sponsor Warrant the proceeds of which were held outside of the Escrow Account to cover the costs relating to the IPO and running costs as outlined in the Prospectus.

Since the completion of its IPO, the Company's leadership team has been focused on identifying a potential target for the Business Combination. This process is ongoing and the Company will continue its search with the aim to complete a Business Combination within 15 months following the admission date of 13 April 2022, subject to two three-month extension periods under conditions outlined in the Prospectus, or as otherwise extended with shareholder approval.

On 21 June 2023, the Company announced that it had recently identified a business combination opportunity which could involve the Company raising additional capital and becoming a listed operating company deploying funds into the Lloyds of London insurance market (the "Proposed Transaction"). On 23 June 2023, the Company called an Extraordinary General Meeting to extend the Business Combination Deadline to 30 December 2023, for the purpose of implementing the Proposed Transaction, which was approved by shareholders at the Extraordinary General Meeting held on 10 July 2023.

These Financial Statements have not been audited or reviewed by our auditors.

2.  Principal accounting policies

The Company is not presently engaged in any activities other than those which are required in connection with the selection, structuring and completion of a Business Combination.

The Financial Statements have been prepared in accordance with applicable law, the Company's principal documents and International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). This is the first year of audit and no historic audited financial information is available other than the prospectus.  

The Company had no operations and therefore no segmental information is presented. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company's Financial Statements:

2.  Principal accounting policies (continued)

Basis of presentation

The Financial Statements have been prepared in accordance with applicable law, the Company's principal documents and International Financial Reporting Standards ("IFRS").

The Financial Statements are presented in British Pounds ("GBP" or "£"), which is the Company's presentation and functional currency.

Going concern

The Financial Statements have been prepared on a going concern basis. Following the Offering and prior to the completion of any Business Combination, the Company will not engage in any operations, other than in connection with the selection, structuring and completion of a Business Combination.

The Company has 15 months from the admission date to complete a business combination, subject to two three-month extension periods if approved, or as otherwise extended with shareholder approval (the "Business Combination Deadline"). The Company has sufficient funds to cover operating costs through to the initial deadline. The costs related to the Company's IPO and working capital requirements up to the initial Business Combination Deadline were covered by the proceeds of the issuance of the Sponsor Warrants as part of the Offering process.

On 23 June 2023, the Company called an Extraordinary General Meeting to extend the Business Combination Deadline to 30 December 2023, for the purpose of implementing the Proposed Transaction, which was approved by shareholders at the Extraordinary General Meeting held on 10 July 2023 (the "Extension").

In relation to the Extension, the Company expects to be able to secure additional funds for general working capital purposes from certain related parties of the Company and an announcement will be made by the Company as and when such arrangements have been entered into. In addition, to the extent that the Company is unable to raise additional funds to pay third party adviser costs (and other costs) related to the implementation of the Business Combination, the Company expects to structure the costs associated with the implementation of the Business Combination in such a manner so as to ensure that such costs are only payable upon the consummation of the Business Combination or, in the event that a Business Combination cannot be consummated by the Business Combination Deadline, upon a winding-up of the Company out of the Escrow Account ahead of Ordinary Shareholders pursuant to the terms of the Articles of Association of the Company.

The Company will have until the Business Combination Deadline to complete a Business Combination, subject to any extension period being granted. If the Company has not completed a Business Combination by such time (or the expiry of any extension period), it will: cease all operations except for the purpose of winding up; as promptly as reasonably possible, redeem the Ordinary Shares, and as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Directors, liquidate and dissolve.

The events and conditions that management considers relevant to the Company's ability to continue as a going concern include the limited time frame remaining to the Business Combination Deadline and market conditions inclusive of competition and potential geopolitical events.

Management remain focused on completing a Business Combination by the Business Combination Deadline. Having considered all relevant information, management have concluded that there are no material uncertainties related to the identified events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. Reaching the conclusion that there is no material uncertainty involves significant judgement.

In addition, such opinion is not dependent on the Company completing a Business Combination by the Business Combination Deadline. It is important to note that nothing in this analysis implies that the Company would be unable to meet its debts as they fall due or to fulfil the above mentioned redemptions of redeemable Ordinary Shares should the Company not complete a Business Combination by the Business Combination Deadline. 

2.  Principal accounting policies (continued)

New and amended standards and interpretations applied

The following accounting standards and updates were applicable in the reporting period but did not have a material impact on the Company:

-     Amendments to IFRS 1 and IFRS 9 Annual Improvements to IFRS 2018-2020

-     Amendments to IFRS 3: Business Combinations

-     Amendments to IAS 16: Property, Plant and Equipment

-     Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets

-     IFRS 17: Insurance Contracts

-     Amendments to IAS 17: Insurance Contracts

-     Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors

-     Amendments to IAS 12: Income Taxes

-     Amendments to IAS 1: Presentation of Financial Statements

New and amended standards and interpretations not applied

There are no new and amended standards and interpretations in issue that are applicable to the Company but are not yet effective and therefore, have not been adopted by the Company:

The Company has considered the IFRS's in issue but not yet effective and do not consider any to have a material impact on the Company.

Financial assets and liabilities

(i) Recognition and initial measurement

The Company initially recognises financial assets and financial liabilities on the date it becomes a party to the contractual provisions of the instrument. Any gains and losses arising from changes in fair value of the financial assets or financial liabilities at fair value through profit or loss ("FVTPL") are recorded in the statement of comprehensive income.

Financial assets and financial liabilities are measured initially at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue.

(ii) Classification and subsequent measurement

Financial assets

On initial recognition, the Company classifies financial assets as measured at amortised cost or FVTPL.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

-     It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

2.  Principal accounting policies (continued)

Financial assets and liabilities (continued)

(ii) Classification and subsequent measurement (continued)

Financial assets (continued)

-     Its contractual terms give rise on the specified dates to cash flows that are solely payments of principal and interest.

All financial assets not classified as measured at amortised cost as described above are measured at FVTPL.

Financial assets classified at amortised cost are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Financial assets classified at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest income and foreign exchange gains and losses, are recognised in profit or loss.

Financial liabilities

Financial liabilities are classified as measured at amortised cost or FVTPL.

A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains or losses, including any interest, are recognised in profit or loss.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

(iii) Amortised cost

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured on initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance.

(iv) 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 in the principal or, in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk.

2.  Principal accounting policies (continued)

Financial assets and liabilities (continued)

(iv) Fair value measurement (continued)

When available, the Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as 'active' if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company measures instruments quoted in an active market at a mid-price, because this price provides a reasonable approximation of the exit price.

If there is no quoted price in an active market, then the Company uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The Company recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change has occurred.

(v) Impairment

The Company recognises loss allowances for Expected Credit Losses ("ECLs") on financial assets measured at amortised cost.

The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

-     financial assets that are determined to have low credit risk at the reporting date; and

-  other financial assets for which credit risk has not increased significantly since initial recognition.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's historical experience and informed credit assessment and including forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when:

-     the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or

-     the financial asset is more than 90 days past due.

The Company considers a financial asset to have low credit risk when the credit rating of the counter party is equivalent to the globally understood definition of 'investment grade'. The Company considers this to be BBB or higher per Standard and Poor's.

2.  Principal accounting policies (continued)

Financial assets and liabilities (continued)

(v) Impairment (continued)

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Fund expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

-     significant financial difficulty of the borrower or issuer;

-     a breach of contract such as a default or being more than 90 days past due; or

-     it is probable that the borrower will enter bankruptcy or other financial reorganisation.

Presentation of allowance for ECLs in the statement of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof.

(vi) Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

2.  Principal accounting policies (continued)

Financial assets and liabilities (continued)

(vi) Derecognition (continued)

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset that is derecognised) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in the statement of comprehensive income. Any interest in such transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability.

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is profit or loss.

Expenses

All expenses are accounted for on an accrual basis and are presented as expense items, except for expenses that are incidental to the disposal of an investment which are deducted from the disposal proceeds, and expenses related to the issue of shares which are netted against the financial instruments they are allocated to. For equity instruments, these reduce share capital, for derivative liabilities these are expensed immediately and for liabilities these initially reduce the liability and are subsequently accreted to the Statement of Comprehensive Income over time.

Prepayments

These represent assets for amounts paid prior to the end of the financial period, for which services are yet to be provided to the Company.

Accrued expenses

These amounts represent liabilities for services provided to the Company prior to the end of the financial period, which are unpaid. Accrued expenses are recognised initially at fair value. The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price. Subsequent measurement is at amortised cost using the effective interest method.

Share issue costs

Share issue cost have been incurred in relation to the issue of the share capital encompassing Ordinary Shares, Public Shares and Warrants. Where shares are classified as equity, share issue costs are recognised in equity. Ordinary Shares not subject to the Inside Letter (as per the Prospectus) have been classified as liabilities, due to the redemption facility attached to these Shares. Share issue costs attributed to these shares are amortised to the Statement of Comprehensive Income using the effective interest method. For warrants the share issue costs are recognised immediately in the Statement of Comprehensive Income. 

2.  Principal accounting policies (continued)

Cash and restricted cash

Cash represents cash deposits held at financial institutions. Cash is held for meeting short-term liquidity requirements, rather than for investment purposes. Cash is held at major financial institutions.

Use of judgements and estimates

The preparation of Financial Statements in accordance with IFRS requires the Board 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.

The estimates and underlying assumptions are reviewed on a semi-annual basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The principal judgements and estimates are as follows:

Share-based payments

Regarding the Sponsor Shares issued by the Company, the Board has exercised judgement in determining whether the Sponsor Shares should be treated as a financial instrument (IAS 32) or share based payments (IFRS 2).

IFRS 2 applies to any transaction in which an entity receives goods or services as part of a share based payment arrangement. Careful consideration of all facts and circumstances, such as whether the rights of the Sponsor Shareholders differ from those of the Ordinary Shareholders, is required to determine if IFRS 2 applies. In making this determination, the following factors have been considered.

-   Should a Business Combination be successfully achieved, a proportion of the Sponsor Shares will automatically convert into Ordinary Shares at no further cost to the Sponsor Shareholders. As the aggregate issue price of the Sponsor Shares was £25,000, this represents a considerable discount to the price paid by Ordinary Shareholders for their Ordinary Shares;

-    The number of Sponsor Shares that may be converted to Ordinary Shares may increase further, subject to certain performance-related conditions subsequent to the Business Combination;

-    Notwithstanding that the Sponsor Entity is providing its services to the Company in an equivalent capacity to an employment relationship, the conversion of the Sponsor Shares to Ordinary Shares is entirely contingent on the successful consummation of a Business Combination, and no reward will accrue to the Sponsor Entity for its services in the event that a Business Combination is not consummated.

Accordingly, the Board has exercised judgement in determining that the Sponsor Shares fall under the scope of IFRS 2 as equity-settled share based payments. The fair value at the grant date of equity-settled share based payments is generally recognised as an expense with a corresponding increase in equity over the vesting period. 

2.  Principal accounting policies (continued)

Use of judgements and estimates (continued)

Share based payment (continued)

The deemed grant date of the Ordinary Shares will determine the point at which the Ordinary Shares will be accounted for under IFRS 2. The Board has determined that the effective grant date for the Ordinary Shares is the point of consummation of a Business Combination, and not the original date of issue of the Sponsor Shares for the following reasons:

-     No contractual obligation on the part of the Company to deliver cash or any other financial asset to holders of the Sponsor Shares exists prior to a Business Combination, and the Sponsor Shareholders are not entitled to any preferential terms over holders of Ordinary Shares;

-     Should the Sponsor Entity fail to successfully achieve a Business Combination, then the Sponsor Shares will not be eligible for conversion to Ordinary Shares and the Sponsor Entity will receive no material compensation for their work in attempting to identify a target acquisition;

-    Under the Insider Letters, the Sponsor Entity has agreed to waive its right to any liquidating distributions from the Escrow Account; and

The Sponsor Entity has provided services in the form of expertise and guidance to assist the Company in achieving the Business Combination, in exchange for the trading of its Sponsor Shares which has been recorded as share-based payments. The difference between the total consideration received by the Company for the Sponsor Shares and their fair value at the grant date will be pro-rated over the period to the Business Combination deadline.

Sponsor Warrants

Similarly to Sponsor Shares, the Board has exercised judgement in determining whether the Sponsor Warrants should be treated as a financial instrument (IAS 32) or share based payments (IFRS 2). IFRS 2 applies to any transaction in which an entity receives goods or services as part of a share-based payment arrangement. That determination requires careful consideration of all the facts and circumstances, such as whether the rights of the Sponsor Warrant holders differ from those of the Public Warrant holders. The board have determined that Sponsor Warrants do not fall within the scope of IFRS 2 for the following reasons:

-   The Sponsor Warrants were issued at a price of £1.00 per warrant and are exercisable at a price of £11.50 per Ordinary Share, which do not represent preferential terms to those afforded to Public Warrant holders;

-   No further Sponsor Warrants are receivable for zero or discounted consideration;

-  The commercial basis for the issue of Sponsor Warrants is to provide sufficient capital to cover the Company's listing costs and operating expenses until the achievement of a Business Combination, without diluting the value of the Ordinary Shareholders' shares;

-   There are no service conditions attached to the Sponsor Warrants;

-  Sponsor Warrant holders have no different rights from Public Warrant holders in the event of a successful Business Combination or the failure to achieve such a combination.

The Board's judgement is that the Sponsor Warrants are a puttable financial instrument that includes a contractual obligation for the issuer to redeem that instrument for cash or another financial asset (in this case, an Ordinary Share) upon exercise. The Sponsor Warrants do not entitle the holder to a pro rata share of the entity's assets in the event of the entity's liquidation and are therefore classified as a financial liability in accordance with section 16 of IAS 32.

2.  Principal accounting policies (continued)

Use of judgements and estimates (continued)

Deferred underwriting fee

Barclays Bank PLC, HSBC Bank plc and Numis Securities Limited ("the Underwriters" of the Company's Placing) are potentially entitled to a deferred underwriting fee. The Board has exercised judgement in determining that at the period-end no liability in relation to this fee exists as IAS 32 requires the recognition of the worst-case liability which would be to repay the funds raised to shareholders if no business combination is completed. This underwriting fee is only payable on the completion of a Business Combination.

Fair value of derivative financial instruments at fair value through profit or loss

The Company recognises its investment in derivative instruments (Public Warrants and Sponsor Warrants) initially at fair value at date of issuance with any subsequent movement in fair value between the issuance date and the reporting date being recognised as a fair value movement through profit and loss. A third party valued the warrants using an appropriate valuation model and determined the fair value at the date of issuance to be £0.17 per warrant for the Public Warrants and £0.34 per warrant for the Sponsor Warrants, and determined the fair value at period end to be £0.02 and £0.03 respectively. Judgements were required for the inputs into the valuation model specifically volatility rates of suitable comparable companies and estimated life of the warrants.

3.  Fair value measurement

A number of the Company's accounting policies and disclosures require the measurement of fair values for financial assets and liabilities.

The Board has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Board periodically reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Board assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of the Standards, including the level in the fair value hierarchy in which the valuations should be classified.

The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

Level 1 ‑	Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 ‑	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3 ‑	Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

3.  Fair value measurement (continued)

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 in the principal or, in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non‑performance risk.

When measuring the fair value of an asset or liability, the Company uses observable market data as far as possible. The determination of what constitutes "observable" requires significant judgment by management. Fair values of financial assets and liabilities that are traded in active markets are based on quoted market prices or price quotations from a broker that provides an unadjusted price from an active market for identical instruments. A market is regarded as "active" if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an on‑going basis.

The determination of fair value for financial assets and financial liabilities for which there is no observable market price requires the use of valuation techniques. For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

3.1 Valuation techniques

To value the warrant liabilities, the valuation specialist uses proprietary valuation models such as Black Scholes Pricing Model. Judgement and estimation are usually required for the selection of the appropriate valuation model to be used.

Valuation models that employ significant unobservable inputs require a high degree of judgement and estimation in the determination of fair value. Some or all of the significant inputs into these models may not be observable in the market and are derived from market prices or rates or are estimated based on assumptions. Assumptions and inputs used in the valuation models include a risk-free interest rate, time to business combination deadline, probability of business combination and volatility. In order to estimate volatility, valuation techniques include comparison with similar instruments for which observable market prices exist.

3.2 Fair value hierarchy

The following table summarises the valuation of the Company's financial instruments within the fair value hierarchy levels at 30 June 2023:

	Level 1	Level 2	Level 3	Total
	£	£	£	£
Derivative liabilities	-	-	266,250	266,250
	-	-	266,250	266,250

 

3.  Fair value measurement (continued)

The following table summarises the valuation of the Company's financial instruments within the fair value hierarchy levels at 31 December 2022:

	Level 1	Level 2	Level 3	Total
	£	£	£	£
Derivative  liabilities	-	-	305,000	305,000
	-	-	305,000	305,000

3.3 Changes in level 3 measurement

The following table presents the changes in the Company's financial instruments classified in level 3 of the fair value hierarchy for the period ended 30 June 2023:

	30 June 2023	31 December 2022
	£	£
Beginning of period	305,000	-
Proceeds from sponsor warrants and public warrants	-	2,592,500
Net change in unrealised gain on financial liabilities	(38,750)	(2,287,500)
End of period	266,250	305,000

 

There were no transfers between levels for the period.

3.4 Significant unobservable inputs

The following table summarises the valuation techniques and significant unobservable inputs used for the Company's financial instruments classified in level 3 as of 30 June 2023, and also provides information about the sensitivity of the year end fair value measurement to changes in the most significant inputs:

	Fair value £	Valuation technique	Unobservable inputs	Range of inputs (weighted average)
Derivative liabilities - Sponsor warrants	116,250	Black-Scholes Pricing Model	Expected volatility	4.6%
			Risk free rate	4.0%

Derivative liabilities - Public warrants	150,000	Binomial Option Pricing Model	Expected volatility	4.6%
			Risk free rate	4.0%
	266,250

3.  Fair value measurement (continued)

3.4 Significant unobservable inputs (continued)

The following table summarises the valuation techniques and significant unobservable inputs used for the Company's financial instruments classified in level 3 as of 31 December 2022, and also provides information about the sensitivity of the year end fair value measurement to changes in the most significant inputs:

	Fair value £	Valuation technique	Unobservable inputs	Range of inputs (weighted average)
Derivative liabilities - Sponsor warrants	155,000	Black-Scholes Pricing Model	Expected volatility	2.9%
			Risk free rate	3.9%

Derivative liabilities - Public warrants	150,000	Binomial Option Pricing Model	Expected volatility	2.9%
			Risk free rate	3.9%
	305,000

The fair value of sponsor warrant and public warrants liabilities are determined by the Board upon consultation with a valuation specialist with reference to significant unobservable inputs. The valuation specialist has used the Black-Scholes Pricing Model and Binomial Option Pricing Model respectively, incorporating expected volatility, expected term and the risk-free rate, to value the warrant liabilities. Warrants are accounted for as derivative liabilities measured at FVTPL at each reporting period, in accordance with IFRS 9 and IAS 32. Changes in the fair value of the warrants are recorded in the Statement of Comprehensive Income.

4.  Acquisition

The Company made no acquisitions during the period from 1 January 2023 to 30 June 2023.

5.  Cash

The amounts available to the Company in the current accounts are used to cover the costs relating to the offering and admission, search for a company or business for a Business Combination and other running costs.

	30 June 2023	31 December 2022
	£	£
Restricted cash	158,934,183	155,984,100
Cash and cash equivalents	84,183	203,264
Total	159,018,366	156,187,364

The Escrow Agent may only release the funds within the Escrow Account in accordance with the terms of the Escrow Agreement, which meets the requirements set out in Listing Rule 5.6.18AG(2) (save for the minor departures from this rule which are disclosed in the Prospectus).

The Escrow Agreement provides that the Company and a trustee, which was appointed by the Company to provide escrow trustee services in connection with the Escrow Account, will jointly deliver an instruction to the Escrow Agent to release the funds in escrow only in the event that circumstances described in the Prospectus for the release of the funds in escrow have occurred, and that as requested by the Escrow Agent the Company will deliver evidence of the circumstances for release having occurred to the Escrow Agent prior to delivering an instruction for release to the Escrow Agent. Such circumstances are, in accordance with LR 5.6.18AG(2) (save for the minor departures from this rule which are disclosed in the Prospectus): (i) to provide consideration for a Business Combination that has been approved by the Directors of the Company and the Ordinary Shareholders (excluding the Excluded Persons), in accordance with the requirements of the Articles of Association of the Company and the Listing Rules; (ii) to repurchase the Ordinary Shares for which a redemption right was validly exercised; and (iii) to repurchase the Ordinary Shares and Public Warrants and commence liquidation.

6.  Financial risk management

The Company is exposed to market risk, credit risk and liquidity risk. The risk management policies employed by the Company to manage these risks are discussed below:

(a)  Market risk

Market risk is the risk that changes in market factors such as foreign exchange rates, interest rates and equity prices will affect the Company's income and/or the value of its holdings in financial instruments.

6.  Financial risk management (continued)

(a)  Market risk (continued)

Foreign currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. During the period ended 30 June 2023, the Company had no financial instrument denominated in a currency other than its operational and reporting currency, and therefore was not exposed to foreign currency risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's cash and cash equivalents are non-interest-bearing, however the restricted cash balance consists of amounts held in an Escrow Account which accrue interest at a variable rate and therefore exposed to interest rate risk.

As at 30 June 2023, if interest rates had been 0.5% higher/lower, with all other variables held constant, the Company's bank interest received for the period would have been £795,092 (31 December 2022: £772,500) higher or lower.

As at end of the reporting period, the Company's exposure to interest rate risk is considered to be for £159,018,366 (31 December 2022: £154,500,000). The Company is exposed to risks associated with the effects of fluctuations in the prevailing levels of interest rates on its financial position and cash flows. Although these interest are not hedged however the Company regularly monitors the cash balances for any adverse interest rate fluctuations.

Price risk is the risk that changes in market prices will affect the value of the Company's financial assets or liabilities at fair value through profit or loss. The Company is exposed to price risk in respect of its Public Warrants and Sponsor Warrants, which are measured at fair value using an appropriate valuation model.

As at 30 June 2023, if prices had been 5% higher/lower, the net fair value of the Company's financial assets or liabilities at fair value through profit or loss subject to price risk would increase/decrease by £13,312 (31 December 2022: £15,250).

The Company will analyse the risk of individual assets and evaluate the market risk through its daily operation, by reviewing the latest development of financial markets and the release of economic data.

The Company's overall exposures to financial asset values are monitored on an on going basis.

(b)  Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company, resulting in a financial loss to the Company. The Company is exposed to credit risk arising from its restricted cash, cash and cash equivalents and other receivables.

6.  Financial risk management (continued)

(a)   Credit risk (continued)

The maximum credit risk exposure in relation to the Company's cash balances is best represented by the carrying value of the cash and cash equivalents, amounts held in escrow balances and other receivables in the Statement of Financial Position.

The Company seeks to mitigate the credit risk attached to its cash and cash equivalents and amounts held in escrow by placing all cash with reputable banking institutions with a credit rating of A (or equivalent) or higher as determined by an internationally recognised rating agency.

Cash and cash equivalents are held with Barclays Bank plc, which has a Fitch long-term credit rating of A+, a Moody's long-term credit rating of A1 and an S&P long-term credit rating of A.

Amounts held in escrow are held with HSBC Bank plc, which has a Fitch long-term credit rating of A+, a Moody's long-term credit rating of A3 and an S&P long-term credit rating of A-.

(b)  Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with its financial liabilities.

The table below analyses how quickly the Company's assets can be liquidated to meet the obligation of maturing liabilities.

Maturity Analysis

As at 30 June 2023	< 1 month £	>12 months £	No stated maturity £	Total £
Assets
Restricted cash	-	158,934,183	-	158,934,183
Cash and cash equivalents	84,183	-	-	84,183
Trade and other receivables	51,575	-	-	51,575
	135,758	158,934,183	-	159,069,941
Liabilities
Redeemable ordinary shares	-	149,870,215	-	149,870,215
Derivative liabilities	-	266,250	-	266,250
Due to related party	26,060	-	-	26,060
Accrued expense	738,243	-	-	738,243
	764,303	150,136,465	-	150,900,768

6.  Financial risk management (continued)

(b)  Liquidity risk (continued)

As at 31 December 2022	< 1 month £	>12 months £	No stated maturity £	Total £
Assets
Restricted cash	-	155,984,100	-	155,984,100
Cash and cash equivalents	203,264	-	-	203,264
Trade and other receivables	74,191	-	-	74,191
	277,455	155,984,100	-	156,261,555
Liabilities
Redeemable ordinary shares	-	148,214,847	-	148,214,847
Derivative liabilities	-	305,000	-	305,000
Due to related party	26,060	-	-	26,060
Accrued expense	1,109	-	-	1,109
	27,169	148,519,847		148,547,016

The Company is exposed to liquidity risk as the positions in which the company invests may not be able to get liquidated quickly without negatively affecting the share prices. It is the Companies policy to maintain conservative levels of liquidity to ensure it has the ability to meet its obligations as they fall due.

(c)  Capital risk management

The capital structure of the Company consists of equity attributable to holders of Sponsor Shares and non-redeemable Public Shares, redeemable Public Shares issued (see note 7) and retained earnings.

7.  Capital instruments

The following summarises the issued share capital as at 30 June 2023 and 31 December 2022.

	No. of shares	£
Redeemable Class A ordinary shares of £10 par value ("Ordinary Shares")	15,000,000	150,000,000
Non-redeemable Class A ordinary shares of £10 par value ("Ordinary Shares")	450,000	4,475,304
Class B ordinary shares of £0.0001 par value, issued at £0.005 ("Sponsor Shares")	3,862,500	19,310
	19,312,500	154,494,614

Class A ordinary shares ("Ordinary Shares")

Further to publication of its Prospectus on 7 April 2022, the Company completed the placing of 15,000,000 Ordinary Shares of the Company at a price of £10.00 per share, with matching warrants being issued concurrently with the delivery of the Ordinary Shares to subscribers of Ordinary Shares in the Offering on the basis of one-half (1/2) of one (1) warrant per Ordinary Share ("Public Warrants"). Additionally, 450,000 Ordinary Shares were issued to the Overfunding Sponsor Entity via the Company's Overfunding Subscription.

On 13 April 2022, the Company announced the admission of 154,500,000 Ordinary Shares to trading on the London Stock Exchange's main market for listed securities ("LSE").

As at 30 June 2023 and 31 December 2022, the 450,000 Ordinary shares issued to the Overfunding Sponsor Entity, these share are subject to the Insider Letter (see Prospectus), in which, inter alia, removes the right of redemption attached to these Ordinary Shares, which are accordingly classified as equity. These shares 450,000 Ordinary Shares alongside with the 3,682,500 Class B Ordinary shares make up share capital net of issuance costs of £24,696.

Ordinary Shares carry the right to receive dividends and other distributions declared on them, and (save as provided in the Prospectus) holders of Ordinary Shares are entitled to one vote per share at a general shareholders' meeting of the Company, including a vote on the proposed business combination.

7.  Capital instruments (continued)

Class A ordinary shares ("Ordinary Shares") (continued)

Holders of redeemable Ordinary Shares are entitled to redeem all or a portion of their Ordinary Shares upon the completion of the business combination. Accordingly, these Ordinary Shares are classified as liabilities in the Company's Statement of Financial Position and are measured at amortised cost.

Ordinary Shares	30 June 2023 £	31 December 2022 £
Opening balance	148,214,847	-
Proceeds of issue of Ordinary Shares	-	150,000,000
Less: initial recognition of Public Warrants	-	(1,275,000)
Less: share issue costs	-	(2,842,943)
Effective interest accretion	1,655,368	2,332,790
	149,870,215	148,214,847

Class B ordinary shares ("Sponsor Shares")

During the period ended 31 December 2022, the Sponsor and the Directors subscribed to a total of 3,862,500 (comprising 1,931,250 B1 Shares, 965,625 B2 Shares and 965,625 B3) Sponsor Shares at a price of £0.0001 per share.

Upon completion of the Business Combination, the entire sub-class of B1 Shares shall automatically convert on a one-for-one basis (subject to adjustment in certain circumstances) into such number of Ordinary Shares as will be equal, in the aggregate, on an as-converted basis, to 10% of the total number of Ordinary Shares issued and outstanding immediately following the completion of the Offering. In addition, the entire sub-class of B2 Shares and the entire sub-class of B3 Shares shall automatically convert on a one-for-one basis (subject to adjustment in certain circumstances) into Ordinary Shares in two further tranches (each of which shall equal 5% of the total number of Ordinary Shares issued and outstanding immediately following the completion of the Offering) after the Business Combination subject to certain performance-related conditions.

Subject to the variation of certain voting rights and powers in respect of the Business Combination, Sponsor Shares carry the same shareholder rights as Ordinary Shares. However, the Company's Sponsor and Directors have entered into an Inside Letter with the Company, under which they have agreed to waive their redemption rights in respect of the Sponsor Shares or any Ordinary Shares acquired as a result of conversion in connection with the Business Combination. Accordingly, the Sponsor Shares are classified as equity in the Company's Statement of Financial Position.

Public warrants

On 13 April 2022, 7,500,000 Public Warrants, the right to which was included in the issue of Ordinary Shares in the Company, were admitted to trading on LSE.

7.  Capital instruments (continued)

Public warrant (continued)

Each Public Warrant gives the holder the right to subscribe for one Ordinary Share at a price of £11.50 at any time commencing 30 days following the completion of the Business Combination.

Accordingly, the Public Warrants are classified as derivative liabilities and were initially recognised at their fair value of £0.17 per warrant at the admission date of 13 April 2022.

As at 30 June 2023, the Public Warrants have been valued using an appropriate valuation model at £.02 (31 December 2022: £.02) per warrant and are recognised in these Financial Statements at a fair value of £150,000 (31 December 2022: £150,000). The movement in fair value of £nil (31 December 2022: £1,125,000) from the admission date and period end has been recognised through profit and loss.

Sponsor warrants                                                            

During the period, the Sponsor and the Directors subscribed to a total of 3,875,000 Sponsor Warrants at a price of £1 per warrant. Of the £3,875,000 raised from the issue of the Sponsor Warrants, a derivative liability was recognised at the admission date of 13 April 2022 amounting to £1,317,500. The remainder has been allocated to other reserves as a capital contribution to the company amounting to £2,557,500.

As at 30 June 2023, the Sponsor Warrants have been valued at £.03 (31 December 2022: £.04) per warrant and are recognised in these Financial Statements at a total value of £116,250 (31 December 2022: £155,000). The movement in fair value of £38,750 (31 December 2022: £1,162,500) between the admission date and period end has been recognised through profit and loss.

Each Sponsor Warrant gives the holder the right to subscribe for one Ordinary Share at a price of £11.50 following the completion of the Business Combination.

8.  Share based expense

The Sponsor Entity has provided services in the form of expertise and guidance to assist the Company in achieving the Business Combination, in exchange for the trading of its sponsor shares which has been recorded as share based payments.

The valuation specialist has used a Monte Carlo simulation to estimate the fair value of the sponsor shares. Non-market performance conditions have not been taken into account when estimating the fair value such as the probability of Business Combination. The key inputs used in the measurement of the fair value at grant date of the sponsor shares were the initial stock price, volatility, expected term and the restriction period after the initial Business Combination.

As of grant date the fair value of each sponsor share is estimated. The difference between the total consideration received by the Company for the sponsor shares and their fair value at the grant date is. This will be pro-rated over the period to the Business Combination Deadline and recognised in equity as a share-based payment reserve with the associated expense reflected in the statement of comprehensive income as share based payment expense.

9.  Earnings per share

9.1         Basic loss per share

		For the period from 1 January 2023 to 30 June 2023 £	For the period from 31 August 2021 (date of incorporation) to 30 June 2022 £
Numerator
Net loss for the period and earnings used in basic loss per share		(13,266,829)	(8,004,472)
Total loss for the period used in basic loss per share		(13,266,829)	(8,004,472)
Denominator
Weighted average number of shares used in basic loss per share		4,312,500	2,856,972
Total weighted average number of shares used in basic loss per share		4,312,500	2,856,972
Basic loss per share		(3.08)	(2.80)

The weighted average number of Ordinary Shares is determined by reference to the 3,862,500 Class B Ordinary Shares and 450,000 non-redeemable Class A Ordinary Shares. Public and Sponsor Warrants are deemed to be anti-dilutive as the average market price of Ordinary Shares during the period did not exceed the £11.50 exercise price of the warrants and they are therefore out of the money and excluded from the diluted earnings per share calculation. The 15,000,000 redeemable Class A Ordinary Shares under IAS 33 are deemed to be contingently issuable shares issuable only upon a Business Combination so under IAS 33.24 will be excluded from the earnings per share calculations until the Business Combination has occurred.

9.  Earnings per share (continued)

9.2         Diluted loss per share

The Company has reviewed the dilution factors and concluded that there are no instruments that have dilutive potential as at 30 June 2023 and 31 December 2022. As there is uncertainty as to the likelihood of an initial Business Combination, the potential dilutive effects of redeemable Ordinary Shares, Sponsor Warrants and Public Warrants have not been factored into the weighted average number of shares. The conditions for conversion of these instruments to equity have not been satisfied at the reporting date. When the Business Combination has occurred, the redeemable Ordinary Shares will become equity and will no longer be a financial liability, hence the dilutive effect is not considered in the diluted earnings per share calculation. As a result, diluted earnings per share is deemed to be the same as basic earnings per share as at 30 June 2023 and 31 December 2022.

10.  Related party transactions

All legal entities that can be controlled, jointly controlled or significantly influenced by the Company are considered to be a related party. Also, entities which can control, jointly control or significantly influence the Company are considered a related party. In addition, statutory and supervisory directors and close relatives are regarded as related parties.

The Sponsor Entity made payments of £nil (31 December 2022: £158,703) related to expenses paid on behalf of the Company, of which £26,060 is still outstanding as of 30 June 2023 (31 December 2022: £26,060).

Administration expense paid to the sponsor entity was £nil (31 December 2022: £135,000) for the period ended 30 June 2023.

Other than the issuance of Sponsor Shares and Sponsor Warrants to the Sponsor Entity and non-executive directors, there have been no related party transactions.

11.   Income tax

The Company is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there is no income, estate, corporation, capital gains or other taxes payable by the Company. As a result, no provision for Cayman Islands' taxes has been made in the Financial Statements.

Overseas withholding taxes may be charged on certain investment income and capital gains of the Company. No withholding taxes have been incurred or paid during the period ended 31 December 2022.

The Company has concluded that there was no impact on the results of its operations relating to taxation for the period ended 30 June 2023 (31 December 2022: nil).

12.  Contingencies and commitments

As disclosed in the Prospectus, the underwriters of the Company's Offering are entitled to a deferred underwriting fee payable from the Escrow Account upon the successful completion of a Business Combination. In addition, certain fees and expenses of certain professional advisers to the Company that were incurred upon IPO have been deferred until successful completion of a Business Combination or in the event that a Business Combination cannot be consummated by the Business Combination Deadline, upon a winding-up of the Company.

.

13.  Subsequent events

On 11 July 2023, at an Extraordinary General Meeting of the Company, the Ordinary Shareholders of the Company approved the Extension and in connection thereto redeemed 12,383,019 Ordinary Shares at the redemption amount of £10.53 per Ordinary Share (which, pursuant to the Company's Articles of Association that were adopted at the Extraordinary General Meeting, was calculated so as to allow provision for creditors of the Company to be paid out of the Escrow Account upon a winding-up of the Company). The aggregate redemption amount was £130,393,190. The payment in respect of the redemption of such Ordinary Shares was made on or around 17 July 2023. Following such redemption payments, £30m remained in the Company's Escrow Account.

On 8 September 2023, the Company announced that London Innovation Underwriters Limited ("LIU") has separately been established for the purpose of implementing the Proposed Transaction. It is intended that the Proposed Transaction will be implemented through a business combination with LIU, which will seek to raise a significant sum of equity capital through a listing of LIU on the Main Market of the London Stock Exchange. A further announcement will be made by the Company when the business combination agreement has been entered into. The Company has incurred, and will continue to incur, significant third party adviser costs (and other costs) in relation to the implementation of the Proposed Transaction.

There were no other significant period and events that require disclosure or adjustment in these financial statements.

 

END