Notes to the interim condensed consolidated financial statements for the six months ended 30 June 2022

1.  General information

Hiro Metaverse Acquisitions I S.A. (the "Company") was incorporated on 20 September 2021 (date of incorporation) as a public limited liability Company incorporated in Luxembourg (Société Anonyme or "S.A.") under the laws of the Grand Duchy of Luxembourg for an unlimited period. The registered office of the Company is located at 17, Boulevard Raiffeisen, L-2411, Luxembourg, Grand Duchy of Luxembourg. The Company is registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Société, in abbreviated "RSC") under the number B259488 since 20 September 2021.

On the 8th of December 2021 the Company incorporated HMA1 (ESCROW) Limited (the "Subsidiary"), under the Companies Act 2006 , in the United Kingdom, being a private Company, limited by shares, with its registered office at 52 Lime Street, London, England.

The interim condensed consolidated financial statements for the period ended 30 June 2022 covers the Company and its subsidiary (collectively "the Group").

The Company is managed by its Board of Directors composed of Luke Alvarez, Cherry Freeman, Ian Livingstone as Executive Directors and Jurgen Post, Emily Greer, and Addie Pinkster as Non-Executive Directors (the "Board of Directors").

The sole shareholder of the Company is Hiro Sponsor I LLP (the "Sponsor"); a limited liability partnership, incorporated and existing under the laws of England, having its registered office located at 18th Floor, the Scalpel, 52 Lime Street, London, EC3M 7AF, United Kingdom, and registered with the United Kingdom's Companies House under number OC439442.

On 2 February 2022 the Company's Prospectus was approved and published on the London Stock Exchange. On 7 February 2022, the Company underwent an initial offering (the "Placing"). 11,500,000 of the Company's Public Shares were admitted to the standard listing segment of the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's main market for listed securities under ticker "HMA1", raising capital in the amount of GBP 115,000,000. The main characteristics of this offering are described in the prospectus.

The Company intends to seek a suitable target for the Business Combination with a focus on targets operating in the sectors of Video Games, Esports, Interactive Streaming, GenY Social Networks, Connected Fitness & Wellness and Metaverse Technologies. The Company has 15 months from the date of the admission to trading to consummate a Business Combination, plus an initial three-month extension period (the "First Extension Period") and a further three-month extension period (the "Second Extension Period") subject in each case to approval by the Company's shareholders. Otherwise, the Company will be liquidated and distribute all of its assets to its shareholders, the Public shares will be redeemed first and then the Company will be liquidated and all remaining assets will be distributed to remaining shareholders (Class B shareholders).

On 17 May 2022, the Company engaged Liberum Capital Limited. They will assist the Company with identifying new possible targets, its analysis of each Target's business plan and valuation, commercial negotiations and on how to position its equity story to investors.

2.  Basis of preparation and accounting policies
2.1 Basis of preparation

These unaudited interim condensed consolidated financial statements are for the six months ended 30 June 2022 and includes comparative information for the period ended 31 December 2021. They have been prepared in accordance with IAS 34 'Interim Financial Reporting'. They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the consolidated financial statements for the period ended 31 December 2021.

The Group's consolidated financial statements for the period ended 31 December 2021 have been delivered to the Luxembourg Trade and Companies Register (Registre de Commerce et des Société, in abbreviated "RSC"). The Group's Independent Auditor's report on those accounts were unqualified.

The consolidated financial statements comprise a consolidated statement of financial position, a consolidated statement of comprehensive income, a consolidated statement of changes in equity, a consolidated statement of cash flows and the accompanying notes for the interim period ended 30 June 2022.

During the Placing, the Company raised GBP 115,000,000. After making more enquiries and bearing in mind the nature of the Group's business and assets, the Board of Directors consider that the Company has adequate cash resources to continue in operational existence for the next 12 months from the date of approval of these interim condensed consolidated financial statements. Thus, these interim condensed consolidated financial statements have been prepared under the assumption that the Group operates on a going concern basis.

These interim condensed consolidated financial statements have been prepared in Pound Sterling (GPB), which is the functional currency of the parent company, unless stated otherwise.

The interim condensed consolidated financial statements were approved for issue by the Board of Directors on 19 September 2022

The principal accounting policies applied in the preparation of these interim condensed consolidated financial statements are set out below.

2.2 Summary of significant accounting policies

2.2.1 New or revised Standards or Interpretations

International accounting standards include IFRS, IAS (International Accounting Standards) and their interpretations (Standing Interpretations Committee) and IFRICs (International Financial Reporting Interpretations Committee).

The repository adopted by the European Commission is available on the following internet site: http://ec.eu
ropa.eu/finance/accounting/ias/index_en.htm

a) New standards, amendments and interpretations that were issued but not yet applicable as at 31 December 2021 and that are most relevant to the Company - not yet endorsed by the EU:

There are no new accounting pronouncements which have become effective from 1 January 2022 that have a significant impact on the Group's interim condensed consolidated financial statements.

The interim condensed consolidated financial statements have been prepared in accordance with the accounting policies adopted in the Group's most recent annual financial statements for the period ended 31 December 2021.

3. Significant accounting judgements, estimates and assumptions

The preparation of these consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Given the ongoing and dynamic nature of the COVID 19 crisis, it is difficult to predict the impact on the business of potential targets. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information, which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. The ongoing COVID 19 pandemic, the increased market volatility and the potential unavailability of third party financing caused by the COVID 19 pandemic as well as restrictions on travel and in person meetings, which may hinder the due diligence process and negotiations, may also delay and/or adversely affect the Business Combination or make it more costly.

On 24 February 2022, Russian troops invaded Ukraine. The war is ongoing and has already caused extreme loss of life, damage to infrastructure, dislocation of the Ukraine population to other countries as well as disruption to economic activity worldwide. The continued war in Ukraine may increase inflationary pressure and weaken the already weakened post-pandemic economy.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

As at 30 June 2022, other than the effects of the COVID‑19 pandemic and the war in Ukraine, which have been considered by the directors, there were no other significant areas of estimation, uncertainty and critical judgements, which were applied.

4. Financial risk management, objectives and policies

The Group is newly formed and has not conducted any operations and currently generates no revenue. The Group does not have material foreign currency transactions. Hence, currently the Group does not face foreign currency risks nor any interest rate risks as the financial instruments of the Group bear a fixed interest rate.

Liquidity risks

Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Placing was completed on 7 February 2022. 100% of the gross proceeds of this Placing were deposited in a secured deposit account. The amount held in this secured deposit account will only be released in connection with the completion of the Business Combination or the Company's liquidation. The Board of Directors believes that the funds available to the Group outside of the secured deposit account, together with the available shareholder loan will be sufficient to pay costs and expenses, which are incurred by the Group prior to the completion of the Business Combination.

The objective of the Sponsor Warrants issued to the Sponsor at the time of the Placing, is to use the proceeds to pay the various costs and expenses incurred and contracted for as disclosed in the interim condensed consolidated financial statements for the six months ended 30 June 2022, except the underwriting commission. The proceeds of the Placing of Public Shares will not be used to pay these expenses.

The Sponsor has committed additional funds to the Company through the Overfunding Subscription, the proceeds of which is held in an escrow account. The purpose of the overfunding subscription is to provide additional cash funding into the Escrow Account, in addition to the funding from the proceeds of the Units sold in the Placing, for the redemption of the Public Shares by Public Shareholders ("Initial Overfunding Shares").

The Initial Overfunding Shares and Initial Overfunding Warrants were not part of the Placing but were part of the applications for Shares Admissions and Warrants Admission, which happened on 24 February 2022.

To the extent that the Business Combination Deadline is extended, the Sponsor will commit further additional funds to the Company through the subscription of additional units as referred to in Part VIII. 4 of the Prospectus.

Capital management

The Group no longer faces a capital management risk as the Company raised funds through public shares and public warrants, which were issued in the Placing and the application for Shares Admissions and Warrants Admission and were admitted to listing and trading on the regulated market segment of the London Stock Exchange on 2 February 2022 and 24 February 2022. The Group has a strong capital base.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is currently exposed to credit risk from its deposit with banks.

5.  Other operating expenses

The other operating expenses of GBP 530,755 consist of fees for accounting, legal, and other services not related to the Placing.

1 Jan 2022      20 Sept 2021

to                       to

30 June 2022     31 Dec 2021

6.  Income Tax

1 Jan 2022      20 Sept 2021

to                       to

30 June 2022     31 Dec 2021

7.  Earnings /(loss) per share

Basic earnings/(loss) per share ("EPS") is calculated by dividing the profit/(loss) for the period attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the period.

Diluted EPS is calculated by dividing the profit/(loss) attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. The Sponsor and Public Warrants will only become exercisable 30 days after the consummation of the Initial Business Combination. The Sponsor Warrants will expire five years from the date of consummation of the Initial Business Combination, or earlier upon redemption or liquidation.

Currently, no diluting instruments are exercisable. Therefore, basic EPS equals diluted EPS as at 30 June 2022.

8.  Deferred costs

Deferred costs of GBP 691,337 as at 30 June 2022 are composed of legal costs incurred by the Company in relation to the public offering which will be offset against the proceeds from the Placing once the invoice is received for the fees.

9.  Cash and cash equivalents

The amount of cash and cash equivalents was GBP 120,778,993 as at 30 June 2022.

10.           Issued capital and reserves

Share capital and share premium

As at 31 December 2021, the subscribed share capital amounts to GBP 30,000 consisting of 3,750,000 shares without nominal value held by the Sponsor, hereinafter referred to as the "Sponsor Shares". The Company's share capital may be increased or reduced by a resolution of the general meeting of shareholders adopted in the manner required for an amendment for the articles of association.

On 26 January 2022, the issued capital shares was reduced from 3,750,000 to 2,875,000 through a forfeiture of 875,000 Sponsor Shares at a nil cost.

On 2 February 2022 the Company's Prospectus was approved and published on the London Stock Exchange.

In terms of the Sponsor Private Placement Agreement; on 2 February 2022, the Sponsor subscribed to 310,500 Overfunding shares at GBP10 per share, and 5,070,000 Class B Sponsor Warrants at GBP1 per warrant, raising capital in the amount of GBP 8,175,000.

On 7 February 2022, 11,500,000 of the Company's Public Shares were admitted to the standard listing segment of the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's main market for listed securities under ticker "HMA1".

On 7 February 2022, Citigroup Global Markets Limited, acting as stabilising manager, gave notice on of its non-exercise of the put option granted by the Company.

As a result of the shares subscribed for the London Stock Exchange; on 8 February 2022, the Company issued 11,500,000 Public Shares; cum rights in respect of one-half (1/2) of a Public Warrant; without nominal value at a price of GBP 10 per Public Share raising gross proceeds of GBP 115 million. This increased the total number of Public Shares without nominal value in the Company in issue to 11,810,500.The Company will provide its Public Shareholders with the opportunity to redeem all or a portion of their Public Shares, exercisable prior to the completion of the Initial Business Combination irrespective of whether and how they vote at the General Meeting convened to approve the Initial Business Combination. Because it is not certain that the Class A Shares will be redeemed or become redeemable prior to business acquisition, these shares are classified as liabilities.

On 8 February 2022 the Sponsor subscribed for a further 34,500 Shares cum Rights at a price of GBP 10.00 per share, (the "Overfunding Shares Subscription"). The non-exercise of the Put Option and the Overfunding Shares Subscription brings the total number of Shares cum Rights in issue at 11,845,000.

It is planned that the Sponsor Shares shall convert into Public Shares subject to a certain schedule and trading price following the consummation of the Business Combination. The Sponsor Shares will convert into a number of Public Shares such that the number of Public Shares issuable to the Sponsor upon conversion of all Sponsor Shares will be equal, in the aggregate, on an as converted basis, to 20% of the total ordinary shares in issue following the Placing.

As at 30 June 2022, the issued share capital of the Company is set at GBP 156,417.20 represented by eleven million eight hundred and forty-five thousand (11,845,000) Public Shares without nominal value and two million eight-hundred seventy-five thousand (2,875,000) Sponsor Shares without nominal value. The total number of voting rights in the Company is 14,720,000.

11. Trade and other payables

1 Jan 2022      20 Sept 2021

to                      to

30 June 2022    31 Dec 2021

Trade and other payables are related to legal and other services received by the Group. The carrying amounts of these approximate their fair

12.  Financial liabilities

1 Jan 2022      20 Sept 2021

to                        to

30 June 2022    31 Dec 2021

(unaudited)         (audited)

GBP                 GBP

Class A Public shares cum rights- refer to note 10                                                                   119,073,063                 -

The redemption price is expected to be £10.30 per Public Share plus any interest earned on funds held in the Escrow Account.

13. Public Warrants

On 24 February 2022, the Company admitted 5,922,500 Public Warrants to the standard listing segment of the  Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's main market for listed securities under ticker "HM1W".

The Public Warrants will be exercisable during the "Exercise Period", which shall be the period beginning 30 days after the date on which the Initial Business Combination is completed and ending at the close of trading on the main market for listed securities of the London Stock Exchange on the first Business Day after the fifth anniversary of the Business Combination Completion Date provided that the Exercise Period shall end earlier (i) upon redemption of the Public Warrants in accordance with their terms, (ii) if the Company fails to complete an Initial Business Combination by the Business Combination Deadline, (iii) or upon any liquidation of the Company.

During the Exercise Period, the Company may, at its sole discretion, elect to redeem the Public Warrants in whole but not in part, upon a minimum of 30 calendar days' prior written notice of redemption at (i) a redemption price of £0.01 per Public Warrant if the closing price of its Public Shares following the consummation of the Initial Business Combination equals or exceeds £18.00 for any 20 out of 30 consecutive trading days ending three Business Days before the Company sends the notice of redemption; or (ii) a redemption price of £0.10 per Public Warrant if the closing price of its Public Shares for any 20 out of 30 consecutive trading days following the consummation of the Initial Business Combination, ending three Business Days before the Company sends the notice of redemption equals or exceeds £10.00 but is below £18.00, subject to adjustments to the number of Public Shares issuable upon exercise or the exercise price of a Public Warrant as described in the Company's Prospectus.

Public Warrant holders may exercise their Public Warrants after such redemption notice is given until the scheduled redemption date.

At the date of these interim accounts, the Company has not entered into the "Exercise Period"; and therefore no financial asset or liability is recognised in respect of Public Warrants.

14. Sponsor Warrants

On 2 February 2022, the Sponsor agreed and subscribed for an aggregate of 5,070,000 Class B warrants (the "Sponsor Warrants") at a price of GBP 1.00 per Sponsor Warrant (GBP 5,070,000 in the aggregate), each Sponsor Warrant entitling the holder to purchase one Public Share at an exercise price of GBP 11.50 per Public Share. The Sponsor Warrants will not be admitted to listing or trading on any regulated market or trading platform. As at 7 February 2022, the Put Option was not exercised, and as a consequence the Sponsor subscribed for 230,000 additional Sponsor Warrants at a price of GBP 1.00 per Sponsor Warrant (GBP 230,000 in the aggregate) to cover the increased underwriting fees payable by the Company.

At the date of these interim accounts, the Company has not entered into the "Exercise Period"; and therefore no financial asset or liability is recognised in respect of Sponsor Warrants.

15. Related party disclosures

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

Terms and conditions of transactions with related parties

On 19 January 2022, the Company entered into a loan agreement with the Sponsor for the purpose of settling its creditors and other costs, which become due in the ordinary course of business, should the Placing for any reason not be successful. At reporting date, no amount was drawn. The Placing took place on 2 February 2022. The loan shall be available to the Company up until consummation of the Business Combination or the liquidation of the Company.

On 2 February, the Sponsor subscribed to 5,070,000 Class B Warrants at a price of GBP 1 per Sponsor Warrants. On 7 February 2022, the Sponsor subscribed to 230,000 additional Sponsor Warrants at a price of GBP 1 per Sponsor Warrant. Please refer note 12 for more information.

On 11 February 2022, the Company subscribed for 11,845,000 ordinary shares in HMA1 at nominal value of GBP 1 per share. HMA1 issued the shares and the consideration was fully paid up by the Company on 15 February 2022.

Transactions with key management personnel

There are no advances or loans granted to members of the Board of Directors as at 30 June 2022.

The Company entered into contracts with the non-executive directors, which is effective as from the date of the Placing. The agreed directors' fees are GBP 10,000 per annum; to be paid semi annually in arrears in equal instalments after deduction of any taxes and other amounts that are required by law. Director's fees to the value of GBP 12,348.02 were paid as at 30 June 2022. In addition to the directors' fee, on 11 February 2022, the Sponsor transferred 85,000 Sponsor Shares to the non-executive directors.

16. Events after the reporting period

No events occurred after the reporting period, which requires amendment to, or disclosure in the interim condensed consolidated financial statements, except from those disclosed here below:

Management considered the effects of the continued invasion of Ukraine by Russia and it has no impact on the Group and consequently does not affect the measurement of Group's assets and liabilities as at 30 June 2022.

The Company appointed Liberum Capital Limited as Financial advisor and the firm commenced contractual activities as from July 2022.