R8 Capital Inv Regulatory News (MODE)

Mode Global Holdings Plc

Half yearly results for the period ended 30 June 2020

Mode Global Holdings Plc ("Mode"), the UK-based Fintech Group, today announces its unaudited financial results for the six months ended 30 June 2020.

Highlights

· Successful expansion of services to include Bitcoin Jar, P2P payments and Euro accounts

· Rebrand of R8 to Mode

· Recruitment of ex-Alipay EMEA Chief Rita Liu to the leadership team

· Successful completion of IPO on London Stock Exchange's main market

Executive Chairman, Jonathan Rowland, said: "During the period, we continued to invest in the business to develop and further add value to our existing payments and digital asset offering. After the interim period, we successfully completed our IPO and listed on one of the leading stock markets in the world, the London Stock Exchange's Main Market - a key milestone in the evolution of the Company. The funds raised will help us to further develop our business and our goal to become the next-generation financial services ecosystem for consumers and businesses."

Results for the period

For the period from 1 January 2020 to 30 June 2020, the Company's results were as expected.

There was a 62% increase £(1.9)m versus £(1.2)m in losses for the six-month period to 30 June 2020 when compared to the six month period ending 30 June 2019. This was largely due to the 56% increase in administrative expenses from technology and marketing spend and also included some key additional hires as the Company expanded its products (see below for details).

Finance costs increased by 55% (£191k versus £123k) due to the pro rata'd interest costs for the Convertible Loan Notes in 2019 and the financing commencing in two separate tranches - February 2019 and April 2019.

Revenues increased in line with the business plan as the offering of JGOO Limited ("JGOO") marketing services saw increased demand as well as an increase in trading revenues from Bitcoin during the COVID19 period.

Strategic developments during the period

During the six-month period ending 30 June 2020, there have been multiple developments across the Group including:

o Bitcoin Jar - Our Bitcoin Jar gives people access to higher-interest earning products than those they are accustomed to, by offering a 5% Annual Percentage Yield with no lock-up periods making it one of the most flexible, high-yielding products in the Bitcoin market.

o Euro Accounts - The launch of our Euro accounts with SEPA access provide our customers with a secure and simple way to add, hold and use Euros to buy Bitcoin. The Euro accounts are powered by our FCA-regulated banking partner, Modulr, who already provide the infrastructure for our users' existing GBP accounts.

o Peer-to-Peer Payments - Our new peer-to-peer Bitcoin transfer feature means our users can easily introduce their friends and family to the world of Bitcoin. This is an important first step towards seamless transfers worldwide as the world prepares for an increasingly cashless society.

o Rebrand - R8 rebranded as Mode in order to bring together the Group's separate businesses under one common identity. This is an important evolution of the Group, which will deliver enhanced financial services tailored to a new post-COVID norm, where the transition to online and mobile interactions is accelerating. We have ambitious plans for Mode as we seek to leverage the opportunities that faster digitalisation will bring for our society and economy.

o Open Banking - Mode's new functionality leverages the power of 'Open Banking' to offer our UK customers a new solution, allowing them to make seamless top-ups into their Mode GBP account. This feature is at the very core of our customer journey and marks the first step to leverage the potential of 'Open Banking' technology and progressive regulation, to provide further novel and innovative features.

Mode has gone a long way towards building and market-testing the key products and services that will form our next-generation banking ecosystem for consumers and businesses. We look forward to further developing and growing the business through a number of well-diversified revenue streams.

Other disclosures

Since the end of the interim period, additional funding of £7.5m has been received from the application to list on the London Stock Exchange main market on October 5th. This will secure the Company's funding and enable growth for the Company to build a scalable business model.

We've also taken steps to buy out the minority interest in JGOO. Pure NZ Gateway Limited ("PNZ") previously owned a 45% stake in JGOO, which will become a 100% owned subsidiary of Mode Global Limited.

Board and Employees

In August we announced the appointment of ex-Alipay executive, Rita Liu, to the leadership team. Rita's role is to help advance the Group's vision of transitioning to a truly digital financial system that reduces complexity and costs for consumers and businesses, and that gives digital assets the place they deserve in today's modern economy.

On the 1st October 2020, we appointed Chris Skinner as an advisor to the Company. Chris is a well-known independent commentator on financial markets and fintech and will advise the executive team and board on Mode's business strategy, as it continues to build out its consumer app and further develops its payments and loyalty business.

Biz Stone, co-founder of Twitter, left the board to commit more time to his other projects but remains an investor in the Company.

Outlook

Mode is seeking to expand its current products and services by:

· Launching a revolutionary payments solution, powered by Open Banking, that eliminates the need for cards once and for all. The new solution will aim to facilitate direct and seamless transactions in traditional and digital currency between businesses and Mode users.

· Developing a loyalty and rewards engine that builds on banking, financial and payment-related insights, allowing businesses to run targeted loyalty campaigns to engage with new and existing consumers.

· Integrating new payment and loyalty capabilities into the Mode app - a next-generation super app with unique payment, investment, loyalty and digital asset features, all in one.

· Continuing to expand Mode's business client base using global payment and marketing services, connecting more UK and European businesses with a growing consumer base from China and beyond.

With the £7.5m funding that has been received in early October, we believe this is an exciting period for Mode and will enable the Group to deliver on its promises outlined above.

Going Concern

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial information.

Responsibility Statement

The board confirms that to the best of our knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and

(c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

These financial statements were approved and authorised for issue by the board of directors on 7th October 2020.

Jonathan Rowland

Executive Chairman

Enquiries

For further information please visit www.modebanking.com or contact:

INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME

INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY

INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION

INTERIM CONDENSED CASH FLOW STATEMENT

NOTES TO THE UNAUDITED INTERIM CONDENSED REPORT

1. General Information

Mode Global Holdings plc is the holding Company for a group of companies that trade under the name 'Mode Global'. Mode Global Holdings plc was incorporated on 5 August 2020 under the laws of England with registered number 12794676.

Mode Global Holdings plc is in the financial services business. Its business address is Finsgate, 5-7 Cranwood Street, London, United Kingdom, EC1V 9EE.

Mode Global Holdings plc wholly owns Mode Global Limited ("Mode Global"), which in turn owns 55% of JGOO Limited ("JGOO®") and 100% of Greyfoxx Limited ("Greyfoxx"). This is defined as the Mode Global sub-group.

Greyfoxx wholly owns Fibermode Limited ("MODE®").

JGOO® is a payment processing, marketing and advertising company. It aims to bring the next generation of social media and mobile payments platforms to Europe, enabling consumers, merchants and brands to make and receive payments without the need for card platforms, using their mobile phones to pay and accept money. JGOO®'s initial focus has been on enabling British brands to engage with Chinese shoppers, both face-to-face and online, but will widen its market in the future.

MODE® provides customers the ability to manage their traditional (fiat) money and their digital assets using the same mobile (or web) application. Through MODE®'s mobile interface, customers have an all-encompassing view of their traditional fiat and cryptocurrency balances and will be able to initiate various transactions using both.

Greyfoxx is expecting shortly to become an FCA authorised electronic money institution, subject to meeting various conditions set out by the FCA. Once operational, Greyfoxx can provide e-money services to both JGOO® and MODE®.

2. Basis of preparation

The financial information in this interim report has been prepared in accordance with the International Financial Reporting Standards. IFRS comprises standards issued by the International Accounting Standards Board (IASB) and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the European Union (EU).

There are no IFRS, or IFRIC interpretations that are effective for the first time in this period that would be expected to have a material impact on the Company.

The Company has prepared these reports in accordance with IAS 34 in publishing its interim financial statements.

The financial information has been prepared under the historical cost convention, as modified by the accounting standard for financial instruments at fair value.

The Directors are of the opinion that the financial information should be prepared on a going concern basis, in the light of the Company's financial resources.

These condensed interim financial statements are for Mode Global Limited for the six months ended 30 June 2020 and 30 June 2019 are unaudited and do not constitute full accounts. The comparative figures for the period ended 31 December 2019 are extracted from the 2019 audited financial statements.

The basis of preparation remains consistent with the application of International Financial Reporting Standard in the 2019 audited accounts for the Mode Global sub-group.

No taxation charge has arisen for the period and the Directors have not declared an interim dividend.

Copies of the interim report can be found on the Company's website at www.Modeplc.com.

3. Basis of Consolidation

Subsidiaries are all entities over which the Group has control. The subsidiaries consolidated in these Group Accounts were acquired via group re-organisation on 10 September 2020, and as such Merger accounting will be applied. The interim information included herein, shows the consolidated results for the sub-group Mode Global Limited.

4. Loss per share

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

For diluted loss per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.

The calculation of basic and diluted earnings per share is based on the following figures:-

*The number of shares is derived from the total Mode Global Limited shares before consolidation and the share for share exchange which took place as part of the listing incorporating Mode Global Holdings Plc.

*\* The basic and diluted earnings per share are the same, since where a loss is incurred there is no effect from outstanding share options and warrants considered anti-dilutive and therefore are ignored for the purpose of the loss per share calculation.

5. Post Balance sheet events

On 8 September 2020, Mode Global Holdings Plc entered into a securities exchange agreement with all of the shareholders of Mode Global Limited, pursuant to which the Company acquired the entire issued share capital of Mode Global Limited in consideration of the allotment and issue by the Company of an aggregate of 54,979,579 new Ordinary Shares to such shareholders of Mode Global Limited, fully paid. Completion of the Securities Exchange Agreement occurred on 10 September 2020.

Merger relief accounting was used to recognise the excess value over par for shares issued as part of a share-for-share exchange.

On 25 September 2020, Mode Global Holdings Plc assumed Mode Global Limited's obligations under the latter's convertible loan notes, which have a face value together with rolled-up interest of £4.2m.

The share purchase agreement with Pure NZ Gateway Limited ("PNZ") and JGOO to purchase PNZ's 45% interest in JGOO's share capital in exchange for a cash payment of £75,000 is accounted for as an equity transaction and does not impact the income statement. The final payment to PNZ to transfer 100% ownership to Mode Global Limited will be made by 31st October 2020.

The IPO completed on October 5th provided £7.5m gross proceeds to support the Mode sub-group, including the Mode and JGOO roll out, developing products further and making additional key hires.