Update re R&D tax credit

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

22 November 2019

Mi-Pay Group plc

('Mi-Pay', the 'Group', or the 'Company')

Update re R&D tax credit

Mi-Pay (AIM: MPAY), a leading provider of digital transformation, mobile payment and payment fraud management solutions to Tier 1 Mobile Network Operators, Mobile Virtual Network Operators and digital content providers, announces an update on the receipt of a research and development tax credit.

In its interim results for the period ended 30 June 2019, the Company announced that it expected to receive a research and development tax credit of approximately £0.3 million in respect of 2018 during October 2019, based upon the Company's experience in previous periods. The Company is yet to receive the tax credit and has today received correspondence from HMRC requesting further information before it can process the Company's tax credit. At this stage the Company has no reason to believe that the tax credit will not be paid however there is no guarantee as to the timing or final outcome.

As at 31 October 2019, the Company had cash and cash equivalents of £3.0 million, of which £2.7 million related to the management of client payments. Should the tax credit be materially delayed, reduced or unsuccessful, the Board of Mi-Pay considers that the Company will be required to secure further funding or undertake certain cost reduction measures before the end of Q1 2020. To that end, the Company is in discussions with existing and new investors, regarding a potential equity fundraise, which it hopes to complete in the near future.

Further announcements will be made in due course.

As previously announced, the Board of Mi-Pay continues to proactively review opportunities to enhance the Company's growth prospects and take advantage of the flexibility and commercial strength of the Company's services to deliver enhanced growth through organic or inorganic development.

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