Macaulay Capital PLC - Final Results

Announcement provided by

Macaulay Capital PLC · MCAP

15/05/2023 07:00

RNS Number : 3416Z

Macaulay Capital PLC

15 May 2023

Macaulay Capital PLC

15 May 2023

Macaulay Capital PLC

("Macaulay Capital" or the "Company")

Final Results

Macaulay Capital PLC (AQSE:MCAP), which was formed to originate and manage corporate transactions, raise funds from third parties, invest its own funds alongside those of external investors and to manage its investment portfolio with the aim of maximising its value, announces its final results for the period ended 31 December 2022.

Copies of the annual report will be sent today to shareholders along with the Notice of the Company's Annual General Meeting which will take place on Tuesday 6 June 2023 at noon at 11 Laura Place, Bath, BA2 4BL

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

ENDS

Enquiries:

Macaulay Capital PLC
Clive Milner	+44 (0)12 2554 1904

Cairn Financial Advisers LLP (AQSE Corporate Adviser)
James Caithie Louise O'Driscoll Emily Staples	+44 (0)20 7213 0880

Oberon Capital (Broker)
Chris Crawford	+44 (0)20 3179 5304

For more information please visit: www.macaulaycapital.com

Chairman's Statement

For the period ended 31 December 2022

I am delighted to be writing this inaugural Chairman's statement for Macaulay Capital Plc ("Macaulay") and to welcome all Shareholders to the Group following the flotation of the Company on 29 July 2022.

These accounts are for the period from Macaulay's incorporation on 13 May 2022 to our year end of 31 December 2022.

Background

When we embarked on the fundraise and admission to trading on the Aquis Stock Exchange Growth Market we had hoped for admission to have been achieved by the end of April 2022. In the event, whilst the fundraising was complete, for reasons wholly unrelated to the Group, a whole host of clearing banks turned down the opportunity to provide the simple banking services we required. Fortunately, the historical, enlightened, and pragmatic Hoare and Co stepped forward and we were able to complete the IPO.

Our share capital comprises 10,000,000 shares which were issued at 20p per share, raising a gross total of £2 million, made up of £100,000 raised prior to admission and an additional £1.9 million raised on flotation.

The Horner Family is collectively the largest shareholder block with a total of 2.1 million shares (21.0%) today, which we expect to increase by a further 6 million shares over the next 15 months to 8.1 million shares (50.3%), through the exercise of warrants priced at 25p per share.

Much work has been done to position the Group well for the future, including establishing the compliance and regulatory framework, building the website, setting up the processes for onboarding potential investors in the Macaulay transactions and building our pipeline of potential opportunities, which is of course changing the whole time.

In early 2022 we considered embarking on the process of FCA authorisation as an independent company but felt that this might lead to further delays in establishing Macaulay. We therefore opted to be an Appointed Representative of The Fund Incubator Limited. Whilst this is a satisfactory solution for the time being, we wish to be completely independent in the future and will, when time permits, commence the lengthy and expensive process of seeking FCA authorisation.

Trading Activities

In May 2022 we completed the first Macaulay transaction, assisting Devonvale Limited's ("Devonvale") management team to buy out the company's founders. Devonvale was established in Honiton in 2002 and is a manufacturer of flapjacks, cakes and cereal bars. We established Vale Foods (Holdings) Limited to effect the buyout in conjunction with Martin Loader (Managing Director) and an incoming Executive Chairman, Tony Revill-Johnson, and invested £1 million, subscribing for 40% of the equity for £86,000 and for £914,000 of loan stock with a coupon of 8%.

As this transaction was ready to complete prior to the Company's fundraise and admission to AQSE and we did not want to delay or fail to achieve its completion, the Horner Family provided the interim funding required for the investment. Accordingly, Macaulay invested £200,000 and £800,000 was invested by the Horner Family. By the end of 2022, the Horner Family had successfully sold down all of the £800,000 portion at cost to third party investors introduced by Macaulay.

We are pleased to say that some six months from the purchase, Devonvale is performing in line with expectations.

On 23 March 2023 we announced the completion of another transaction, being the secondary management buy-out of Camloc Motion Control Limited, an established Midlands based precision engineering business which manufactures compression struts and dampers. This was bought from a private equity fund managed by Foresight plc and again we partnered with the incumbent management team. In this case Macaulay has taken on some £700,000 of the total fundraise of approximately £1.55 million and intends to sell down £500,000 of its investment in due course. Given the total funding was made up of £52,666 for approximately 52.7% of the equity and £1,498,359 in 8% loan stock, Macaulay will be earning a significantly enhanced coupon on its investment over the "usual" £200,000.

We have found that as we meet and explain Macaulay's operations to potential future investors, they ask what we have available for them to invest in. So, going forward we might well have a "stock" of investments which are earning a good running yield for Macaulay, thus enabling us to present potential investors with an immediate range of opportunities.

The Legacy Portfolio

In addition to Devonvale, Macaulay manages the investment portfolio transferred from Chelverton Asset Management Limited, (the "Legacy Portfolio" and "CAM" respectively). The Legacy Portfolio consists of five investments previously carried out by the "Macaulay Team" as part of CAM and financed by the group of investors coming under the Chelverton Investor Club banner. All of the agreements between CAM and the Legacy Portfolio companies have been novated to Macaulay giving it direct responsibility for on-going monitoring activities and entitling it to management fees, together with the potential for additional performance fees on exit.

Investors

Having a pool of potential investors for the underlying opportunities that Macaulay creates is a business imperative. However, there is a "Catch 22" - which is that when we have investment opportunities for people we attract their interest - but unless we have a critical mass of investors to fund any given transaction it can be difficult to attract investment opportunities.

Our marketing efforts are aimed at trying to find people like us, who consider the area of the market in which we operate to be underserved. We aim to create shareholder value through the identification of opportunities to invest in established companies which, if they were ten times larger, would attract much greater interest and would therefore command a much higher rating.

We have also been trying to impress on potential investors the importance of investing across a range of our opportunities and building a portfolio by investing in transactions created by Macaulay over several years and thus reducing their investment risk.

Outlook

As we expected we are finding no shortage of investment opportunities to consider. As we are highly selective, we reject the majority of these, taking on only a handful to offer stage and then finally presenting an even smaller number, say 3 - 5 a year, to potential investors.

The process is time-consuming and often unrewarding but necessary to achieve good outcomes for us and our fellow investors. We will continue marketing and introducing "the Macaulay Approach" to

High-Net-Worth individuals and Family Offices for whom what we do, particularly in a time of rising Inheritance Tax Assessments, should be of great interest.

We are pleased with the progress that has been made to date and fully expect to make greater steps forward in the current year.

Finally, and on behalf of the Board, I would like to thank our Shareholders, employees and advisers for their support.

Lindsay Mair

Chairman

12 May 2023

Consolidated Statement of Comprehensive Income

for the period ended 31 December 2022

		Period to
		31 December 2022
	Notes	£

Income	4	118,737
Other expenses	5/6	(502,827)
Loss on ordinary activities before interest and taxation		(384,090)

Loan interest	7	(904)

Loss on ordinary activities before taxation		(384,994)

Taxation	8	-
Loss on ordinary activities after taxation		(384,994)

Loss per Ordinary share in pence	10	(3.85)

The notes below form part of these financial statements

Consolidated Balance Sheet

For the period ended 31 December 2022

			2022
	Notes		£
Fixed assets
Tangible assets	11		4,219
Investments at fair value through profit or loss	12		200,000
			204,219
Current assets
Debtors: amounts falling due within one year	14	104,962
Cash at bank and in hand		1,189,219
		1,294,181
Creditors: amounts falling due within one year
Other creditors and accruals	15	(60,394)
Net current assets			1,233,787
Net assets			1,438,006

Capital and reserves
Called up share capital	16		1,000,000
Share premium account	2.17		823,000
Profit and loss account			(384,994)
Shareholders' funds			1,438,006

The financial statements were approved and authorised for issue by the Board and were signed on its behalf on 12 May 2023.

Lindsay Mair

Director

The notes below form part of these financial statements

Company Balance Sheet

for the period ended 31 December 2022

			2022
	Notes		£
Fixed assets
Investments in subsidiary	13		1,000,000
			1,000,000
Current assets
Debtors: amounts falling due within one year	14	28,517
Cash at bank and in hand		1,082,652
		1,111,169
Creditors: amounts falling due within one year
Other creditors and accruals	15	(390,814)
Net current assets			720,355
Net assets			1,720,355

Capital and reserves
Called up share capital	16		1,000,000
Share premium account			823,000
Profit and loss account			(102,645)
Equity Shareholders' funds			1,720,355

The financial statements were approved and authorised for issue by the Board on 12 May 2023 and were signed on its behalf by

Lindsay Mair Director

The notes below form part of these financial statements.

Consolidated Statement of Changes in Equity

for the period ended 31 December 2022

	Called up share capital	Share premium account	Profit and loss account	Total equity
	£	£	£	£
At 13 May 2022	-	-	-	-
Total comprehensive income for the period:
Loss for the period	-	-	(384,994)	(384,994)
Transactions with Shareholders recorded directly to equity:
Issue of Ordinary shares	1,000,000	1,000,000	-	2,000,000
Expenses of share issue	-	(175,000)	-	(175,000)
Irrecoverable VAT on share issue expenses	-	(2,000)	-	(2,000)
At 31 December 2022	1,000,000	823,000	(384,994)	1,438,006

The notes below form part of these financial statements.

Company Statement of Changes in Equity

for the period ended 31 December 2022

	Called up share capital	Share premium account	Profit and loss account	Total equity
	£	£	£	£
At 13 May 2022	-	-	-	-
Total comprehensive income for the period:
Loss for the period	-	-	(102,645)	(102,645)

Transactions with Shareholders recorded directly to equity:
Issue of Ordinary shares	1,000,000	1,000,000	-	2,000,000
Expenses of share issue	-	(175,000)	-	(175,000)
Irrecoverable VAT on share issue expenses	-	(2,000)	-	(2,000)
At 31 December 2022	1,000,000	823,000	(102,645)	1,720,355

The notes below form part of these financial statements.

Consolidated Cash Flow

for the period ended 31 December 2022

		2022
		£
Cash flows used in operating activities:
Loss for the year		(384,994)
Adjusted for:
Depreciation of assets		1,407
Interest paid		904
Increase in debtors		(104,962)
Increase in creditors		60,394
Net cash used in operating activities		(427,251)

Cash used in investing activities:
Purchase of investments		(200,000)
Purchase of fixed assets		(5,626)
Net cash used in investing activities		(205,626)

Cash flows generated from financing activities:
Issue of Ordinary shares		2,000,000
Share issue expenses (including irrecoverable VAT)		(177,000)
Interest paid		(904)
Net cash generated from financing activities		1,822,096

Net increase in cash and cash equivalents		1,189,219

Reconciliation of net cash flow to movement in net cash:
Increase in cash		1,189,219
Net cash at start of period		-
Net cash at end of period		1,189,219

The notes below form part of these financial statements.

Notes to the Financial Statements

for the period ended 31 December 2022

1 General information

Macaulay Capital Plc was incorporated on 13 May 2022 for the purpose of acquiring Macaulay Management Limited ("MML"). MML was incorporated on 14 October 2021 and was formed to originate and manage corporate transactions, raise funds from third parties, invest the Group's own funds alongside those of external investors and to manage the Group's investment portfolio with the aim of maximising its value. Macaulay Capital Plc acquired the entire issued share capital of MML on 14 June 2022.

The Company is a public limited company, which is incorporated and registered in England and Wales (Registered number: 14105915).

The registered office address is Suite 8, Bridge House, Courtenay Street, Newton Abbot, TQ12 2QS.

2 Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2 Basis of consolidation

The consolidated financial statements incorporate the results of the Company and its subsidiary MML, (the Group), as if they form a single entity using merger accounting. On the establishment of the Company as the ultimate parent of the Group, no change in ownership occurred and the entity was established for the purpose of acquiring MML. Therefore, the requirements of purchase method accounting did not apply.

The financial statements of the subsidiary are prepared for the period 14 October 2021 to 31 December 2022 using consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from them are eliminated on consolidation.

2.3 Going concern

Company law requires the Directors to consider the appropriateness of the going concern basis when preparing the financial statements. Having reviewed cash flow forecasts for the period to December 2024, the Directors confirm that they consider that the going concern basis is appropriate. This review included consideration of the Group's financial position in respect of its cash flows and investment commitments (of which there are none of significance), the working arrangements of key service providers, the impact of the conflict in

Ukraine and the current economic environment. In addition, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern.

The Directors believe that the Group has sufficient resources to continue in operational existence for the foreseeable future. Thus, they have adopted the going concern basis of accounting in preparing the annual financial statements.

2.4 Income

Income is attributable to the principal activities of the Group which are to manage corporate transactions, raise funds from third parties, invest the Group's own funds alongside those of external investors and to manage the Group's investment portfolio.

All of the reported revenue and operational results for the period derive from the Group's external investments and its investments and are recognised on an accruals basis. The Group is not reliant on any one customer.

2.5 Tangible fixed assets

Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the methods below:

Computer equipment - 4 years straight line.

2.6 Investment in subsidiaries

Investments in subsidiaries are measured at cost less any accumulated impairment in value.

2.7 Investments

Investments are measured initially at cost and at subsequent reporting dates at fair value and derecognised at the trade date.

2.8 Debtors

Short-term debtors are measured at transaction price, less any impairment.

2.9 Cash and cash equivalents

Cash comprises cash at bank and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

For the purpose of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above.

2.10 Financial instruments

The Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement.

2.11 Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, should they arise, will be measured initially at fair value net of transaction costs, and will be measured subsequently at amortised cost using the effective interest method.

2.12 Pensions - contributory pension plan

The Group operates a contributory plan for its employees. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in the Profit and Loss account when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The current employees have opted out of the Scheme and hence there will be no charge in the Profit and Loss account going forward.

2.13 Interest income

Interest income is recognised in the consolidated profit or loss using the effective interest method.

2.14 Earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares.

2.15 Dividend policy

The Company expects returns to Shareholders will be delivered primarily through an appreciation in the price of the Ordinary Shares rather than capital distribution through regular dividends.

2.16 Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

• The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

• Where they relate to timing differences in respect of interests in subsidiaries and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.17 Reserves

Share premium account

The share premium account represents the accumulated premium paid for shares issued in previous periods above their nominal value less issue expenses. This is a reserve forming part of non-distributable reserves. The following items are taken to this reserve:

• costs associated with the issue of equity; and

• premium on the issue of shares.

Profit and loss account

This reserve holds the accumulation of profits and losses reduced by any dividends paid to Shareholders.

3 Judgements in applying accounting policies and key sources of estimation uncertainty

The Group makes judgements, estimates and assumptions that affect the application of policies and the carrying values of assets and liabilities, income and expenses. The resulting accounting estimates calculated using these judgements will, by definition, seldom equal the related actual results but are based on the experience of the Directors and the expectation of future events. The estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised.

The principal areas where judgement is exercised are as follows:

Investments - all investments are held at fair value through profit or loss and the Directors assess the carrying value of investments as appropriate to assess whether an impairment is required.

4 Income

	Period to
	31 December 2022
	£
Arrangement fees	35,000
Monitoring fees	74,722
Loan stock interest	9,015
	118,737

5 Other expenses

	Period to
	31 December 2022
	£
Administration and secretarial services	10,417
Auditor's remuneration for:
- Audit services	15,000
- Non-audit services	6,319
Legal & professional fees	53,547
Irrecoverable VAT	15,897
Other expenses	113,781
	214,961

The Audit fee paid by the Company was £9,500.

6 Directors' remuneration and employee costs

	Period to
	31 December 2022
	£
Directors' fees	88,449
Director's healthcare	459
Staff salaries	172,975
Pension contributions	2,345
Employer's national insurance	23,638
	287,866

The average number of employees for the Group was 4.

7 Loan and loan interest

On 18 May 2022 Macaulay Management Limited entered into a £200,000 loan agreement with Chelverton Asset Management Limited ("CAM"), a Company of which David Horner is a Director, at an annual interest rate of 4%.

An amount of £70,000 was repaid on 26 August 2022, a further £90,000 was repaid on 31 August 2022 and the outstanding balance of £40,000 was repaid on 1 September 2022.

Total interest payable during the period amounted to £904. At 31 December 2022 the balance outstanding was £nil.

8 Taxation

	Period to
	31 December 2022
	£
Analysis of charge in period
Current tax	-
	-

Factors affecting current tax charge for the year

The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 19%. The differences are explained below:

	Period to
	31 December 2022
	£
Loss on ordinary activities	(384,994)
Theoretical tax at UK corporation tax rate of 19%
Corporation tax	(73,149)
Ineligible depreciation	267
Expenses not deductible for tax purposes	-
Excess expenses for the year	72,882
Current tax charge for the year	-

Factors that may affect future tax charges

At 31 December 2022 the Company had surplus management expenses of £383,587.

The UK government has announced that with effect from 1 April 2023 the Corporation Tax rate will be increased to 25% for companies with profits over £250,000, with a small profits rate of 19% applying to companies with profits of not more than £50,000, with marginal relief available for profits up to £250,000.

9 Parent company loss for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements. The loss after tax of the parent company for the year was £102,645.

10 Loss per share

The calculation of basic return per share is based on the return after tax and on a weighted average number of ordinary shares in issue in the period. Normal and diluted returns per share are the same as there are no dilutive elements on share capital.

	Period to
	31 December 2022
Loss after taxation attributable to Ordinary shareholders (£)	(384,994)
Weighted average Ordinary shares in issue	10,000,000
Loss per Ordinary share - basic and diluted (pence)	(3.85)

11 Tangible fixed assets

	31 December 2022
	Group
	Computer equipment
Cost or valuation	£
At 13 May 2022	-
Additions	5,626
Disposals	-
At 31 December 2022	5,626

Depreciation
At 13 May 2022	-
Charge for the period	1,407
At 31 December 2022	1,407

Net book value at 31 December 2022	4,219

12. Investments

	31 December 2022
	Group
	£
Investments held at fair value through profit or loss
Opening book cost	-
Opening net investment holding gains	-
Opening valuation	-

Movements in the year:
Purchases at cost	200,000
Movement in investment holding gains	-
Closing valuation	200,000

Closing book cost	200,000
Closing investment holding gains	-
Closing valuation	200,000

13. Investment in subsidiary undertaking

	31 December 2022
	Company
	£
At 13 May 2022	-
Additions	1,000,000
Net value at 31 December 2022	1,000,000

At 31 December 2022 the Company held interests in the following subsidiary company

	Country of incorporation	% of capital held	% share of voting rights	Nature of business

Macaulay Management Limited	England	100%	100%	Investment company

The registered address of the subsidiary is the same as the Company.

14. Debtors

	Group	Company
	31 December 2022	31 December 2022
	£	£
Due within one year:
Trade debtors	58,781	-
Other debtors	31,920	23,949
Prepayments and accrued income	14,261	4,568
	104,962	28,517

15. Creditors amounts falling due within one year

	Group	Company
	31 December 2022	31 December 2022
	£	£
Amounts due to subsidiary	-	350,908
Trade creditors	4,173	963
Other taxation and social security	12,155	7,391
Accruals and other creditors	44,066	31,552
	60,394	390,814

16. Called up share capital

	Group and Company
	31 December 2022	31 December 2022
Issued, allotted and fully paid:	Number	£
Ordinary shares of 10p each	10,000,000	1,000,000

Ordinary shares have full voting rights with 1 vote per share, they are entitled to dividends when proposed and are due a capital distribution on a company exit event.

Share options

The Company may adopt a formal incentive plan under which it contemplates awarding Share Options to Directors, employees and consultants pursuant to share option and incentive schemes approved by the Board. It is intended that any individual awards under any such scheme will be subject to vesting and/or performance conditions. The proportion of Ordinary Shares which will be made the subject of Share Options will not exceed 20 per cent. of the Company's issued Ordinary Share capital from time to time without the prior approval of the Shareholders and no Share Options are intended to be granted to David Horner.

Founder Warrants

Unconditional Founder Warrants have been issued to subscribe for 6,000,000 Ordinary Shares exercisable at £0.25 per share and which the Founder Warrant Holders have irrevocably undertaken to exercise in full within two years of admission; and

Conditional Founder Warrants have been issued to subscribe for a further 5,000,000 Ordinary Shares, exercisable at the higher of £0.25 per share or the mid- market price of an Ordinary Share at the time of exercise, conditional on the exercise of Share Options and in numbers of up to a maximum of (but not exceeding) the numbers of Ordinary Shares issued following the exercise of such Share Options.

17. Pension commitments

The Group operates a contributory pension scheme. The pension cost charge represents contributions payable by the Group to the fund and amounted to £2,345. All of the employees as at the year end have opted out of the scheme and there were no contributions payable to the fund at the balance sheet date.

18. Capital commitments

At 31 December 2022, there were no capital commitments outstanding and no contingent liabilities.

19. Related party transactions (Group and Company)

The Company has taken advantage of the exemption in section 33 of FRS 102 from the requirement to disclose transactions with its wholly owned subsidiary on the grounds that consolidated financial statements are prepared by the Parent Company.

The Directors are considered to be the key management of the business. Their remuneration for the year is disclosed in note 6 of these financial statements.

The Directors and connected persons held the following interests in the voting shares of the Company at 31 December 2022.

Number of shares % of total voting rights

David Horner 50,000 0.5%

Mary Horner 50,000 0.5%

Lindsay Mair 125,000 1.25%

For the purposes of the AQSE Growth Market Access Rulebook the parties referred to below are related parties of the Company for the reasons set out in those paragraphs.

David Horner is a related party of the Company because he is a Director of the Company; and Mary Horner, who is David Horner's wife, is for that reason an associate of David Horner and thereby a related party to the Company.

CAM, a company of which David Horner is a director and significant shareholder, is a related party of the Company because CAM is an associate of David Horner.

Each of Harry and Tom Horner is a related party of the Company for the following two reasons:

each of them will be entitled to exercise, or to control the exercise of, 10 per cent or more of the votes able to be cast on all or substantially all matters at general meetings of the Company; and

each of them is a son of David Horner and, as a result, an associate of his and therefore is a related party.

The loan transactions described below to which the Company is a party, each of which was formalised on the terms of loan agreements with the Company on 25 July 2022, are related party transactions, for the purposes of the AQSE Growth Market Access Rulebook, because the lender in each case was either David Horner or CAM.

A loan from CAM to MML in the principal amount of £200,000 was made to the Company on 18 May 2022 in order to enable the Group to make an investment The benefit to the Company of receipt of the loan was to enable it to fund the investment, which it would not have been able to do if the loan had not been made available.

The loan was repayable to CAM by the Company no later than the fifth business day following admission and its terms include a guarantee from David Horner in respect of MML's liabilities to CAM in respect of the loan. The loan bore interest at the rate of 4% per annum from the date of drawdown to the date of repayment. As stated in note 7 the loan has been fully repaid.

A loan facility from David Horner to MML in the aggregate principal amount of £100,000, for the amount of sums paid by him on behalf of MML during the period from 1 November 2022 to 20 July 2022 in respect of payroll expenses incurred by MML. This was of benefit to the Company because MML did not have available funds to meet these liabilities itself. The loan has now been repaid to David Horner by the Company and did not bear interest.

A loan facility from CAM to MML in the aggregate principal amount of £150,000, which has now been repaid, representing the aggregate amount of sums paid by CAM on behalf of the Company or MML during the period from 14 October 2021, the date of incorporation of MML, to 20 July 2022 in respect of various invoiced liabilities of the Company or of MML. This was of benefit to the Company because the Company and MML did not have available funds to meet these liabilities themselves. The loan did not bear interest.

A capital contribution of £9,475 made by David Horner in respect of costs and expenses payable by the Company in relation to admission so as to limit such costs and expenses to the amount of £175,000 net of VAT. This contribution was set against the balance of the £100,000 loan described above and paid by MML to the Company in accordance with a letter of direction from David Horner to MML to that effect, reducing the amount owed to David Horner by the Company.

Others

MML has agreed to take over the investment management of the unquoted investment portfolio of CAM, which David Horner, a director of the Company, founded and of which he is managing director. In line with its strategy, CAM's current and future focus is on quoted companies, rather than unquoted businesses, and therefore the unquoted portfolio is now insignificant, relative to CAM's quoted company portfolio.

In the period the Company's operations manager has spent a proportion of his time working with a private business owned by David Horner and his wife. Under this agreement, the private business paid the Group £7,500, equivalent to the pro-rata cost of the operations manager's employment to the Group.

20. Financial instruments

The Group's financial instruments comprise securities and other investments, cash balances and debtors and creditors that arise from its operations, for example, in respect of sales and purchases awaiting settlement and debtors for accrued income.

The financial instruments of the Group fall into the following categories:

Group	At amortised cost	Assets at fair value through profit or loss	Total
31 December 2022	£	£	£
Assets as per the Balance Sheet
Investments	-	200,000	200,000
Debtors	58,781	-	58,781
Cash and cash equivalents	1,189,219	-	1,189,219
Total	1,248,000	200,000	1,448,000

Liabilities as per the Balance Sheet
Creditors	48,239	-	48,239
Total	48,239	-	48,239

Company	At amortised cost	Assets at fair value through profit or loss	Total
31 December 2022	£	£	£
Assets as per the balance sheet
Cash and cash equivalents	1,082,652	-	1,082,652
Total	1,082,652	-	1,082,652

Liabilities as per the balance sheet
Creditors	383,423	-	383,423
Total	383,423	-	383,423

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