Interim / Quarterly Report • Oct 1, 2025
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
Société Européenne
Registered office: 9, rue de Bitbourg L - 1273 Luxembourg R.C.S. Luxembourg: B255839
Unaudited interim consolidated financial statements for the period ended 30 JUNE 2025
| Index to the unaudited interim consolidated financial statements | Page(s) |
|---|---|
| Interim Management Report | 1 - 5 |
| Responsibility Statement | 6 |
| Unaudited interim consolidated statement of comprehensive income | 7 |
| Unaudited interim consolidated statement of financial position | 8 |
| Unaudited interim consolidated statement of changes in equity | 9 |
| Unaudited interim consolidated statement of cash flows | 10 |
| Notes to the unaudited interim consolidated financial statements | 11 - 35 |
The Board of Directors of SMG Hospitality SE (hereafter the "Company") submit its management report with the consolidated financial statements of the Company and its subsidiaries (the "Group") for the period ended 30 June 2025.
The Company is a special purpose acquisition company (otherwise known as a blank cheque company) incorporated in Luxembourg on 11 June 2021 and registered with the Luxembourg Trade and Companies Register on 17 June 2021. The Company's corporate purpose is the acquisition of one operating business with a principal business operations in a member state of the European Economic Area or the United Kingdom or Switzerland that is based in the real estate-related hospitality sector with a focus on the sub-sector lodging and leisure through a merger, capital stock exchange, share purchase, asset acquisition, reorganization or similar transaction (the "Business Combination"). The Company intends to complete the Business Combination using cash from the proceeds of the private placement of the class A shares and class A warrants (see below).
The Company completed its private placement (the "Private Placement") on 30 May 2022 through the issuance of 11,500,000 redeemable class A shares with a par value of EUR 0.0417 (the "Public Shares") and 5,750,000 class A warrants (the "Public Warrants"). The Public Shares are admitted to trading on the Frankfurt Stock Exchange under the symbol "RCVR" since 1 June 2022. Likewise, the Public Warrants are also admitted to trading on the Frankfurt Stock Exchange under the symbol "RCVRW". One Public Share and one-half (1/2) of a Public Warrant (each, a "Unit"), were sold at a price of EUR 10 per unit representing a total placement volume of EUR 115 million.
The sponsor of the Company, SMG Holding S.à r.l. (the "Sponsor"), Obotritia Capital KGaA (the "Co-Sponsor"), as well as certain members of the former supervisory board (the "Supervisory Board Investors") of the Company have subscribed to 2,875,000 class B shares amounting to EUR 120,000. On 25 May 2022, the Sponsor, Co-Sponsor and Supervisory Board Investors also subscribed to an aggregate 6,199,999 class B warrants (the "Sponsor Warrants") at a total price of EUR 9,300,000. The class B shares and Sponsor Warrants are not publicly traded securities. The Sponsor, Co-Sponsor and Supervisory Board Investors has agreed to a lock-up period running at least until the Business Combination, subject to customary exceptions described in the Company's prospectus (the "Prospectus"). The Sponsor subsequently purchased all class B shares and Sponsor Warrants from the Co-Sponsor and certain members of the former supervisory board.
On 24 July 2023, the Company announced in a buyback offer to all holders of Public Shares the possibility to tender their Public Shares for a price of EUR 10.35 per Public Share so redeemed (the "Buyback Offer"). At the closing of the period of the Buyback Offer on 28 July 2023, holders owning a total of 8,498,329 Public Shares had accepted the Buyback Offer. The aggregate purchase price for the tendered Public Shares amounts to EUR 87,957,705.15.
On 15 February 2024, the Company signed a Business Combination Agreement ("BCA") with the Sircle Hospitality Group Ltd ("Sircle"), an expert real estate investment group specialized in hospitality across Europe.
On 9 April 2024, the Company further redeemed 2,949,140 Class A shares for a price of EUR 10.35. The total amount redeemed amounted to EUR 30,523,599. Following the redemption, 52,531 Public Shares remain outstanding and 11,447,469 Public Shares are held by the Company as treasury shares.
Due to a delay in meeting certain closing conditions of the BCA, a consummation of the Business Combination by 31 May 2024, as agreed in the BCA, has not been possible. However, Sircle has so far not expressed or indicated that it wishes to or will exercise its termination right under the BCA. Sircle confirmed in writing on 26 August 2024 that they remained "open to closing the transaction under the BCA, subject to SMG and the Sponsor fulfilling all their obligations under the BCA, including meeting the Minimum Cash Condition (as defined in the BCA)". Sircle had previously indicated that it may seek certain modifications of the terms of the Business Combination in order to still complete the transactions. No modifications have yet been communicated and conversations on this are still ongoing.
As a blank cheque company, the Group currently does not have an active business. The Group did not generate revenue during the period ended 30 June 2025 and is not expected to generate any operating revenues until after the completion of the Business Combination. The Group's activities for the period ended 30 June 2025, subsequent to the completion of the Private Placement and listing on the Frankfurt Stock Exchange, were those necessary to identify a target company for a Business Combination and the potential acquisition, described below. The Group incurred expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance).
The net loss of the Group for the period ended 30 June 2025 was EUR 200,379 (30 June 2024: net profit of 5,360,987) due to the other operating income and revaluation of class B warrants.
The Group's main asset accounts refer to the cash in escrow which are the remaining proceeds from the Private Placement after redemptions of class A shares, including the additional sponsor subscription to cover the negative interest and overfunding sponsor subscription to cover the redemptions of Public shares or liquidation of the Company after the expiry of the business combination deadline. Whereas on the liability section, the significant balances refer to class A shares and class A and B warrants, trade and other payables and payable to related parties.
The Group has analysed the risks and uncertainties to which its business is subject, and the Board of Directors of the Company has considered their potential impact, their likelihood, controls that the Group has in place and steps the Group can take to mitigate such risks. The Group's principal risks and uncertainties can be summarised as follows:
| Risk | Likelihood | Mitigating factors |
|---|---|---|
| Benefits not achieved & the |
Low | On 15 February 2024, the Company |
| liquidation of the Company | entered into a Business Combination | |
| There is no assurance that the | Agreement with the Sircle and expects | |
| Company will identify suitable |
to successfully complete the Business | |
| Business Combination opportunities | Combination in the beginning of 2025. | |
| by the Business Combination |
Although the Business Combination | |
| Deadline, which would ultimately | was not achieved by 31 May 2025, | |
| lead to the liquidation of the |
Sircle has so far not expressed or | |
| Company. | indicated that it wishes to or will exercise | |
| its termination right under the BCA. | ||
| Going concern risk until |
Medium | The Company is undertaking |
| completion of the business |
continuous control and monitoring of | |
| combination | expenses incurred in view of its |
|
| The Company has incurred fees and | available funding and has engaged | |
| expenses associated with preparing | reputable service providers to assist | |
| and completing the Business |
with this monitoring. The Board believes | |
| Combination. The Company may | that the Company will have sufficient | |
| need to arrange third-party financing | funds to meet the fees and expenditures | |
| and there can be no assurance that | required for operating its business prior | |
| it will be able to obtain such |
| Risk | Likelihood | Mitigating factors |
|---|---|---|
| financing, which could compel the Company to restructure or abandon the Business Combination. |
to the closing of the Business Combination. |
|
| Legal and regulatory The Company may be adversely affected by changes to the regulations, law, account and general tax environment in Luxembourg and Germany as well as the jurisdiction which the target business is subject to. |
Low | The Company is undertaking continuous control and monitoring measure of the ongoing legal and regulatory landscape. Moreover, the Board of Directors is supported by leading service providers on the respective legal, accounting and tax domains. |
| Market conditions Adverse events and market conditions, such as the conflict between Russia and Ukraine and rising interest rates environment, might prevent the completion of the Business Combination. |
Low | The Company believes that external market conditions have not negatively disrupted in a material manner its operations and objectives. But it will continue to monitor external market conditions and continue to assess on a timely basis their impact on its operations and objectives. |
The other risks surrounding the Group are further disclosed in the Prospectus.
As at 30 June 2025, the Group had EUR 2,992 in cash in escrow (31 December 2024: EUR 1,548).
The Group has a negative equity of EUR 15,313,848 as at 30 June 2025 (31 December 2024: negative equity EUR 15,113,469). The Sponsor commits to secure additional liquidity to the Company to pay costs and expenses prior to the completion of the Business Combination. The Group has financial instruments which are presented as non-current liabilities which does not impose any liquidity issues to the Group. The class B warrants designated as Sponsor Capital At-Risk amounting to EUR 3,693,183 (31 December 2024: EUR 3,693,183) (See Note 13.1 to the consolidated financial statements) have no redemption rights or liquidation distribution rights and will expire worthless in case of liquidation. Furthermore, the class A warrants amounting to EUR 4,835,175 (31 December 2024: EUR 4,835,175) are redeemable at the option of the Company (See Note 13.2 to the consolidated financial statements). Further, these class A warrants have no liquidation distribution rights and will expire worthless in case of liquidation.
Please see Note 17 to the consolidated financial statements.
The Group did not have any activities in the field of research and development during the financial period ended 30 June 2025 and 2024.
As a Luxembourg governed company traded on the Frankfurt Stock Exchange, the Group is not required to adhere to the Luxembourg corporate governance regime applicable to companies that are traded in Luxembourg or to the German corporate governance regime applicable to listed companies in Germany. As these regimes have not been designed for special purpose acquisition companies like the Company but for fully operational companies, the Company has opted to not apply the Luxembourg or German corporate governance regime on a voluntary basis either.
The Company's articles of association (the "Articles") are available on the website of the Company (http://www.smg-recovery.com/). The function of the audit committee shall be assumed by the Board of Directors as long as the Company qualifies as small and medium sized enterprises (SMEs) in accordance with article 2 (1), (f) of the directive 2003/71/EC of the European parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC. If the criteria are no longer fulfilled, the Board of Directors will appoint an audit committee and adopt its terms of reference in accordance with applicable laws.
The Board of Directors is composed of three members: Dr. Stefan Petrikovics, Werner Weynand and George Aase. The Company is managed by the Board of Directors which is vested with the broadest powers to act in the name of the Company and to take any action necessary or useful to fulfil the Company's corporate purpose, with the exception of the powers reserved to the general meeting of shareholders by any laws or regulations or by the Articles of Association.
The Group has implemented a system of internal controls over financial reporting. It aims to identify, evaluate and control any risks that could influence the proper preparation of the consolidated financial statements. As a core component of the accounting and reporting process, the system of internal controls over financial reporting comprises preventive, detective, monitoring, and corrective control measures in accounting and operational functions, which are designed to ensure a methodical and consistent process for preparing the Group's financial statements.
The control and risk management mechanisms include identifying and defining processes, introducing layers of approval, and applying the principle of segregation of duties including the use of external service providers diligently selected and monitored. The Group's internal controls over financial reporting include policies and procedures that pertain to the maintenance of records that, in reasonable detail, are designed to accurately and fairly reflect the transactions and dispositions of the assets of the Group, provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the applicable accounting standards, provide reasonable assurance that the receipts and expenditures are being made only in accordance with authorisations of the Group's management and directors, and provide reasonable assurance regarding prevention or timely detection of the unauthorised acquisition, use or disposition of our assets that could have a material effect on the Group's financial statements. Because of its inherent limitations, the Group's internal controls over financial reporting may not prevent or detect errors or misstatements in the Group's financial statements. The system of internal controls is reviewed annually.
On 31 July 2023, the Company redeemed 8,498,329 of its own class A shares at a redemption price of EUR 10,35 per share and currently holds them as treasury shares. A payment in the amount of EUR 87,957,705 was made from the escrow account to redeeming shareholders to redeem these class A shares.
On 9 April 2024, the Company redeemed 2,949,140 of its own class A shares at a redemption price of EUR 10,35 per share and currently holds them as treasury shares. A payment in the amount of EUR 30,500,599 was made from the escrow account to redeeming shareholders to redeem these class A shares and EUR 23,000 remains unpaid and shown as part of other payables.
The Group does not have any branches as at 30 June 2025 and 31 December 2024.
As at the date of these consolidated financial statements, the Group experienced a liquidity shortage, among others from significant costs already incurred in connection with the Business Combination and its IPO which also caused the delay of the completion of the intended business combination signed on 15 February 2024. However, the Board of Directors is working to achieve a Business Combination in 2026.
Since 30 June 2025, no additional significant events have taken place other than those disclosed in Note 19 to the unaudited interim consolidated financial statements.
Luxembourg, 30 September 2025
Dr. Stefan Petrikovics Werner Weynand George Aase
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
The Management Board of the Company reaffirm their responsibility to ensure the maintenance of proper accounting records disclosing the unaudited interim consolidated financial position of the Group with reasonable accuracy at any time and ensuring that an appropriate system of internal controls is in place to ensure that the Group's business operations are carried out efficiently and transparently.
In accordance with Article 3 of the law of 11 January 2008 on transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, the Group declares that, to the best of our knowledge, the unaudited interim consolidated financial statements for the period ended 30 June 2025, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position as of that date and results for the period then ended.
In addition, management's report includes a fair review of the development and performance of the Group's operations during the interim period and of business risks, where appropriate, faced by the Group.
Luxembourg, 30 September 2025
Member of the Board of Directors
Dr. Stefan Petrikovics Werner Weynand George Aase
Member of the Board of Directors
Member of the Board of Directors
Unaudited interim consolidated statement of comprehensive income for the period ended 30 June 2025
| From 1 January 2025 to 30 June 2025 |
From 1 January 2024 to 30 June 2024 |
||
|---|---|---|---|
| Note(s) | EUR | EUR | |
| Revenue | - | - | |
| Other operating expenses | 5 | (200,414) | (1,076,698) |
| Other operating income | - | 1,046,292 | |
| Operating loss | (200,414) | (30,406) | |
| Finance cost | 6 | - | - |
| Finance income | 7, 10 | 35 | 2,094,560 |
| Fair value gain on class B warrants | 13.1 | - | 3,366,756 |
| Fair value loss on class A warrants | 13.2 | - | - |
| Other income | - | - | |
| Gain/(loss) before income tax | - | 5,430,910 | |
| Income tax | 8 | - | (69,923) |
| Gain/(loss) for the period | (200,379) | 5,360,987 | |
| Other comprehensive income | - | - | |
| Total comprehensive gain/(loss) for the |
|||
| period, net of tax | (200,379) | 5,360,987 |
The accompanying notes form an integral part of these unaudited interim consolidated financial statements.
\
| Note | 30 June 2025 EUR |
31 December 2024 EUR |
|
|---|---|---|---|
| ASSETS | |||
| Current assets | |||
| Cash in escrow | 10 | 2,992 | 2,958 |
| Prepayments | - | - | |
| Receivable from Sponsor | 17 | 175,001 | 175,001 |
| Receivable from other related parties Other receivables |
17 | 1,110,960 40,545 |
1,110,960 40,545 |
| Cash and cash equivalents | 11 | - | 33 |
| Total current assets | 1,329,498 | 1,329,497 | |
| Total assets | 1,329,498 | 1,329,497 | |
| EQUITY AND LIABILITIES | |||
| Equity | 12 | ||
| Share capital | 120,000 | 120,000 | |
| Other available reserves | 100,000 | 100,000 | |
| Warrant reserve | 600,000 | 600,000 | |
| Accumulated deficit | (16,133,848) | (15,933,469) | |
| Total equity | (15,313,848) | (15,113,469) | |
| Non-current liabilities | |||
| Payable to Sponsor | 17 | - | - |
| Class B warrants at fair value | 7,688,780 | 7,688,780 | |
| Class A warrants at fair value | 4,234,875 | 4,234,875 | |
| Total non-current liabilities | 11,903,655 | 11,903,655 | |
| Current liabilities | |||
| Class B warrants at fair value | 13.1 | - | - |
| Class A warrants at fair value | 13.2 | - | - |
| Redeemable class A shares | 14 | 543,696 | 546,323 |
| Payable to Sponsor | 17 | 2,022,946 | 1,079,627 |
| Trade and other payables Payable to related party |
15 17 |
2,068,336 51,488 |
2,841,408 51,488 |
| Bank overdraft | 11 | 53,225 | 20,465 |
| Total current liabilities | 4,739,691 | 4,539,311 | |
| Total liabilities | 16,643,346 | 16,442,966 | |
| Total equity and liabilities | 1,329,498 | 1,329,497 | |
The accompanying notes form an integral part of these unaudited interim consolidated financial statements.
| E y SP A C SE |
|---|
| ------------------------------ |
Unaudited interim consolidated statement of changes in equity for the period ended 30 June 2025
| Su bs ca cri pit be al d |
Sh are s p ac rem co ium un t |
Ot he r a res va erv ila ble es |
Wa res rra erv nt e |
Ac cu mu de lat fic ed it |
To tal |
|
|---|---|---|---|---|---|---|
| EU R |
EU R |
EU R |
EU R |
EU R |
EU R |
|
| Ba lan ce , 3 1 D ec em be r 2 02 4 |
12 0,0 00 |
- | 10 0,0 00 |
60 0,0 00 |
(17 ,12 2,4 50 ) |
(16 ,30 2,4 50 ) |
| Co mp reh en siv e l os s f or the fin an cia l ye ar |
- | - | - | - | 1,1 88 ,98 1 |
1,1 88 ,98 1 |
| Ba lan ce , 3 1 D ec em be r 2 02 4 |
12 0,0 00 |
- | 10 0,0 00 |
60 0,0 00 |
(15 ,93 3,4 69 ) |
(15 ,11 3,4 89 ) |
| Ba lan ce , 1 Ja nu ary 20 25 |
12 0,0 00 |
- | 10 0,0 00 |
60 0,0 00 |
(15 ,93 3,4 69 ) |
(15 ,93 3,4 69 ) |
| Co mp reh en siv e l os s for th e f ina nc ial pe rio d |
- | - | - | - | (20 0,3 79 ) |
(20 0,3 79 ) |
| Ba lan ce , 3 0 Ju ne 20 25 |
12 0,0 00 |
- | 10 0,0 00 |
60 0,0 00 |
(16 ,13 3,8 48 ) |
(16 ,13 3,8 48 ) |
Unaudited interim consolidated statement of cash flows for the period ended 30 June 2025
| From | From | ||
|---|---|---|---|
| Note | 1 January 2025 to 30 June 2025 |
1 January 2024 to 30 June 2024 |
|
| Cash flows from operating activities | |||
| Gain/(loss) before income tax | (200,379) | 5,360,987 | |
| Adjustment for non-cash items: | |||
| Finance cost | 6 | - | - |
| Finance income | 7 | 35 | (344,560) |
| Fair value gain on class B warrants | 13.1 | - | (3,366,756) |
| Fair value loss on class A warrants | 13.2 | - | - |
| Changes in working capital: | |||
| Decrease / (increase) in prepayment | - | 112,013 | |
| Decrease in loan receivable | - | - | |
| Increase in receivable from other related parties | 17 | - | (10,619) |
| Increase in other receivables | - | (71,109) | |
| (Increase) / decrease in net receivable from sponsor | - | (1,761,856) | |
| Decrease in redeemable class A share | (2,627) | - | |
| Increase in related party payables | 943,319 | 20,000 | |
| Decrease in trade and other payables | (773,072) | (363,407) | |
| Interest received | 10 | - | 344,560 |
| Net cash flows from (used in) operating activities | (32,724) | (80,747) | |
| Cash flows from financing activities | |||
| Redemption of class A shares | 14 | - | (30,500,599) |
| Net cash flows used in financing activities | - | (30,500,599) | |
| Net increase/(decrease) in cash and cash equivalents | |||
| of which: Decrease/(increase) in restricted cash (Cash in |
(32,724) | (30,581,346) | |
| Escrow) | 10 | (69) | 30,575,647 |
| Cash and cash equivalents, beginning | 11 | (20,432) | (1,909) |
| Cash and cash equivalents at end of year | 11 | (53,225) | (7,608) |
The accompanying notes form an integral part of these unaudited interim consolidated financial statements.
SMG Hospitality SE (formerly known as SMG European Recovery SPAC SE and hereinafter the "Company" or "Parent" and the "Group" if taken together with its subsidiaries) was incorporated on 11 June 2021 (date of incorporation per the deed of incorporation as agreed between shareholders in front of the notary) in Luxembourg as a European company (Société Européenne or "SE") based on the laws of the Grand Duchy of Luxembourg ("Luxembourg") for an unlimited period. The Company is registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, in abbreviated "RCS") under the number B255839 since 17 June 2021. The Company is a listed entity with its class A shares traded in the regulated market of Frankfurt Stock Exchange under the symbol "RCVR" since 1 June 2022. Likewise, the Company's class A warrants are also traded on the open market of the Frankfurt Stock Exchange under the symbol "RCVRW" (See Note 13.2). The Company also has 2,875,000 class B shares and 6,199,999 class B warrants issued and outstanding as at 30 June 2025 that are not listed on a stock exchange (See Notes 12 and 13.1).
The registered office of the Company is located at 9, rue de Bitbourg, L-1273 Luxembourg.
The Company's governing bodies are the Board of Directors and the shareholders' meeting. The Company is managed by its Board of Directors which is vested with the broadest powers to act in the name of the Company and to take any action necessary or useful to fulfil the Company's corporate purpose, with the exception of the powers reserved to the general meeting of shareholders by any laws or regulations or by the Articles of Association. This one-tier governance structure was resolved by an extraordinary shareholders' meeting of the Company held on 28 June 2025. The Board of Directors is composed of Dr. Stefan Petrikovics, Werner Weynand and George Aase.
The Company has been established for the purpose of acquiring one operating business with principal business operations in a member state of the European Economic Area (the "EEA Member States"), the United Kingdom or Switzerland in the form of a merger, capital stock exchange, share purchase, asset acquisition, reorganization or similar transactions (the "Business Combination"). The Company will not conduct operations or generate operating revenue unless and until the Company consummates the Business Combination.
The Company intends to seek a suitable target for the Business Combination in the real estate-related hospitality sector with a focus on the sub-sector lodging and leisure. The Company has 15 months from the date of the admission to trading to consummate a Business Combination. This period may be extended up to two times in total (for a maximum of 21 months), provided that (i) the period shall extend automatically by three months if the Company signs a letter of intent with a potential seller of a target within the initial 15 months (the "Automatic Extension") and (ii) may be extended by another three months, by resolutions of the Company's general shareholders' meeting, upon approval of the Business Combination. Otherwise, the Company will be liquidated and distribute substantially all of its assets to its shareholders (other than the Sponsor). On 15 February 2025, the Company signed a Business Combination Agreement ("BCA") with the Sircle Hospitality Group Ltd ("Sircle"), an expert real estate investment group specialized in hospitality across Europe. Due to a delay in meeting certain closing conditions of the BCA, a consummation of the Business Combination by 31 May 2025, as agreed in the BCA, has not been possible. However, Sircle has so far not expressed or indicated that it wishes to or will exercise its termination right under the BCA. Sircle confirmed in writing on 26 August 2025 that they remained "open to closing the transaction under the Business Combination Agreement, subject to SMG and the Sponsor fulfilling all their obligations under the BCA, including meeting the Minimum Cash Condition (as defined in the BCA)".
Upon closing of the Business Combination, the above Company's purpose shall cease to apply and the Company's purpose shall as from such time be the creation, holding, development and realisation of a portfolio, consisting of interests and rights of any kind and of any other form of investment in entities in the Grand Duchy of Luxembourg and in foreign entities, whether such entities exist or are to be created, especially by way of subscription, by purchase, sale, or exchange of securities or rights of any kind whatsoever, such as equity instruments, debt instruments as well as the administration and control of such portfolio.
The Company may further grant any form of security for the performance of any obligations of the Company or of any entity in which it holds a direct or indirect interest or right of any kind or in which the Company has invested in any other manner or which forms part of the same group of entities as the Company and lend funds or otherwise assist any entity in which it holds a direct or indirect interest or right of any kind or in which the Company has invested in any other manner or which forms part of the same group of companies as the Company.
The Company may borrow in any form and may issue any kind of notes, bonds and debentures and generally issue any debt, equity and/or hybrid securities in accordance with Luxembourg law.
The Company may carry out any commercial, industrial, financial, real estate or intellectual property activities which it may deem useful in accomplishment of these purposes.
Unlike other forms of companies, a Société Européenne only exists from the date of publication of its statutes with the RCS. Any act performed and any transaction carried out by the Company between the date of incorporation and the date of registration is considered to emanate from the Company and is therefore included in the consolidated financial statements. These consolidated financial statements were authorized for issue in accordance with a resolution of the Board of Directors on 2 August 2025. The consolidated financial statements are published in accordance with the European Single Electronic Format regulation on the Company's website (http://www.smg-recovery.com/).
The Company's financial year starts on 1 January and ends on 31 December of each year.
The interim consolidated financial statements have been prepared on a going concern basis (See Note 3) and in accordance with International Financial Report Standards (IFRS) published by the International Accounting Standards Board (IASB) as adopted by the European Union. They are also prepared in Euros (EUR) which is the Group's presentation and functional currency and have been prepared under the historical cost convention, except for financial instruments that are measured at fair value.
The interim consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 30 June 2025.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:
Generally, there is the presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
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: https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-andauditing/company-reporting/financial-reporting_en#ifrs
The initial application of these standards, interpretations and amendments to existing standards is planned for the period of time from when its application becomes compulsory. Currently, the Management Board anticipates that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial information of the Group.
The Company applied for the first time certain standards, amendments and interpretations which are effective for annual periods beginning on or after 1 January 2025 (unless otherwise stated). The Company has not early adopted any other standard, amendment or interpretation that has been issued but not yet effective.
The Group adopted these Standards and Interpretations in the current financial period and considered them to have no material impact on the financial information of the Group.
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.
The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create
outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the consolidated statement of comprehensive income in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognised in profit or loss.
When the amount of aggregate consideration transferred is in excess of the fair value of the net assets acquired a goodwill is recognized. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
These interim consolidated financial statements are presented in EUR, which is the Parent Company and subsidiaries' functional currency and presentation currency.
Transactions denominated in currencies other than the EUR are recorded at the exchange rate at the transaction date.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Group recognises a financial asset or a financial liability when it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date i.e. the date that the Group commits to purchase or sell the asset.
Financial assets: The Group classifies its financial assets as subsequently measured at amortised cost or measured at fair value through profit or loss on the basis of both:
The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit and loss, transactioncosts.
Financial assets measured at amortised cost: This is the category most relevant to the Group. A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognised in profit and loss when the asset is derecognised, modified or impaired.
The Group includes in this category cash and cash equivalents, other receivables, receivable from sponsors and other related entities, loans receivable, and cash in escrow.
Financial liabilities: The financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss or financial liabilities at amortised cost.
The Group's financial liabilities include trade and other payables, payable to sponsors and other related parties, redeemable class A shares, class A warrants at fair value and class B warrants at fair value.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transactioncosts.
Financial liabilities measured at amortised cost: This is the category most relevant to the Group. After initial recognition, trade and other payables, payable to sponsors and other related parties and redeemable class A shares are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the consolidated statement of comprehensive income.
Financial liabilities through profit or loss: Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the consolidated statement of comprehensive income.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability as at fair value through profit or loss.
Derecognition: A financial asset is derecognised when the rights to receive cash flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated statement of comprehensive income.
Impairment of financial assets: The Group has chosen to apply an approach similar to the simplified approach for expected credit losses ("ECL") under IFRS 9 to its financial assets. Therefore, the Group recognises a loss allowance based on lifetime ECLs at each reporting date. The Group's approach to ECLs reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions
Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and on hand and short-term highly liquid deposits with a maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. The carrying amounts of these approximate their fair value.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group's cash management.
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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
The principal or the most advantageous market must be accessible to theGroup.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the consolidated statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Income tax recognized in the consolidated statement of comprehensive income includes current and deferred taxes.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the consolidated statement of comprehensive income.
Deferred tax is recognized on temporary differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Deferred tax assets are tested for impairment on the basis of a tax planning derived from management business plans.
Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The Board of Directors is currently assessing whether certain class B shares and class B warrants issued to the Sponsor are to be considered as falling in the scope of IFRS 2. The Board of Directors will notably adopt its position based on market discussions and/or positions adopted by market players, supervisory authorities and/or standard setters.
In any case, the class B shares and class B warrants do not carry a specified service period, but would be forfeited or otherwise expire worthless if a business combination is not consummated. Therefore, the Sponsor only derive the value from the class B shares and class B warrants when they are converted into class A shares upon a successful business combination. Consequently, the grant date of these awards does not occur until the target is approved. As of 30 June 2025, irrespective of the conclusions of the ongoing assessment carried out by the Board of Directors, no amounts would have had to be accounted for provided that no such approval has occurred.
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised in as part of other operating expenses in the consolidated statement of comprehensive income, together with a corresponding increase in equity, over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the consolidated statement of comprehensive income for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition,
the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the recipient of the share-based payment. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
The preparation of these consolidated financial statements in conformity with IFRS 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.
Actual results and outcomes may differ from management's estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment in light of the ongoing military conflict between Ukraine and Russia, or as a result of the current turmoil in the Banking horizon due to the recent collapse of several banks.
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 2025, the significant areas of estimates, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in these consolidated financial statements are:
In addition, the Board of Directors underlying assumption to prepare the consolidated interim financial statements is based on the anticipated successful completion of the Business Combination.
In any case, the class B shares and class B warrants do not carry a specified service period, but would be forfeited or otherwise expire worthless if a business combination is not consummated. Therefore, the Sponsor only derives the value from the class B shares and class B warrants when they are converted into class A shares upon a successful business combination. Consequently, the grant date of these awards does not occur until the target is approved. As of 30 June 2025, irrespective of the conclusions of the ongoing assessment carried out by the Board of Directors, no amounts would have had to be accounted for provided that no such approval has occurred.
These consolidated interim financial statements include all the activities of the Group as at 30 June 2025.
Entities included in the scope of consolidation are listed below:
| % of equity interest As at |
||||
|---|---|---|---|---|
| Consolidated entities |
Principal activities |
Country of incorporation |
30 June 2025 |
31 December 2024 |
| SMG Hospitality SE | Special purpose acquisition company |
Luxembourg | Parent company | |
| SMG SPAC Advisors GmbH & Co. KG ("SMG SPAC Advisors KG") |
Support services to SMG Hospitality SE |
Germany | 100% | 100% |
| SMG SPAC Advisors Verwaltungs GmbH ("SMG SPAC Advisors GmbH") |
General partner of SMG SPAC Advisors KG |
Germany | 100% | 100% |
| SMG SPAC Issuance GmbH & Co. KG |
Support services to SMG Hospitality SE in relation to the issuance of shares |
Germany | 100% | 100% |
The Group is currently organised as one reportable segment. The Group has been deemed to form one reportable segment as the Parent and its subsidiaries have been established together for the purpose of acquiring one operating business i.e. the Business Combination (Note 1).
The other operating expenses consist of fees for accounting, legal and other services not related to the Private Placement.
| From 1 January 2025 to 30 June 2025 EUR |
From 1 January 2024 to 30 June 2024 EUR |
|
|---|---|---|
| Directors fees | 66,865 | 472,985 |
| Insurance expense | - | 112,013 |
| Accounting and corporate fees | 38,768 | 99,588 |
| Legal fees | 17,000 | 75,096 |
| Regulatory fees | 45,030 | 55,320 |
| Travel expenses | - | 55,062 |
| Bank charges | 28,727 | 15,136 |
| Other professional fees | - | - |
| Audit fees | - | - |
| Other expenses | 4,024 | 191,498 |
| Total | 200,414 | 1,076,698 |
The total audit fees paid breaks down as follows:
| From 1 January 2025 to 30 June 2025 EUR |
From 1 January 2024 to 30 June 2024 EUR |
|
|---|---|---|
| Statutory audit of the annual accounts Audit-related fees |
57,834 4,224 |
57,834 4,224 |
| Total | 62,058 | 62,058 |
The Company did not have any employees during the period ended 30 June 2025 (31 December 2024: nil).
For the six months ended 30 June 2025, finance costs amounted to nil (6 months ended 30 June 2024: EUR nil as the carrying amount of the Class A shares were completely amortised in August 2023 (See Note 14).
For the six months ended 30 June 2025, financial income in the amount of EUR 35 (6 months ended 30 June 2024: EUR 2,094,560) was represented by interest income on cash in escrow.
The reconciliation between actual and theoretical tax expense is as follows:
| From 1 January 2025 to 30 June 2025 |
From 1 January 2024 to 30 June 2024 |
|
|---|---|---|
| Gain/(loss) for the period before tax | (200,379) | 5,430,910 |
| Theoretical tax charges, applying the tax | ||
| rate of 22.80% | 45,686 | (1,238,247) |
| Tax effect of adjustments from local GAAP to IFRS1 | - | 1,677,640 |
| Non-deductible expenses | - | (102,145) |
| Non-taxable income | - | 91,131 |
| Tax effect of difference in tax rates | - | 17,150 |
| Unrecognized deferred tax assets | (515,451) | (515,451) |
| Income tax | - | (69,923) |
The tax rate used in the reconciliation above is the Luxembourgish tax rate (22.80%) as the Company is domiciled in Luxembourg. Deferred tax assets have not been recognised during the period ended
1 Income taxes payable to / recoverable from the tax authorities are determined based on the financial results of SMG European Recovery SPAC SE and its subsidiaries as shown in their stand-alone financial statements prepared in local GAAP. Hence adjustments from local GAAP to IFRS may lead to higher / lower taxable result in the consolidated financial statements as compared to that determined based on the stand-alone financial statements.
30 June 2025 because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom. Unused tax losses of the Company can be used within a period of 17 years as per Luxembourg tax law.
Basic earnings/(loss) per share ("EPS") is calculated by dividing the profit/(loss) for the year by the weighted average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit/(loss) for the year by the weighted average number of ordinary shares outstanding during the year 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 following table reflects the income and share data used in the basic and diluted EPS calculations:
| From 1 January 2025 to 30 June 2025 |
From 1 January 2024 to 30 June 2024 |
|
|---|---|---|
| Gain/(Loss) for the period Weighted average number of ordinary shares |
EUR (200,379) | EUR 5,360,987 |
| for EPS | 2,875,000 | 2,875,000 |
| Basic EPS | EUR (0.3) | EUR 1.86 |
| Diluted EPS | EUR (0.1) | EUR 0.32 |
| From 1 January 2025 to 30 June 2025 |
From 1 January 2024 to 30 June 2024 |
||
|---|---|---|---|
| Weighted average number of potential ordinary shares which are antidilutive: Redeemable Class A shares Warrants (Class A and B) Total |
52,531 11,949,999 12,002,530 |
1,676,578 11,949,999 13,626,577 |
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of these consolidated financial statements.
Cash in escrow of 2,992 (31 December 2024: EUR 4,985) consists of the remaining proceeds from the Private Placement after redemption of class A shares, the Additional Sponsor Subscription and Overfunding Sponsor Subscription (See Notes 13.1 and 14). The cash held in escrow from the Additional Sponsor Subscription is used to cover the negative interest on the escrow whereas the Overfunding Sponsor Subscription will be used to provide additional funds in case of the liquidation of the Company after expiry of the Business Combination Deadline, or in case of redemptions of class A shares in the context of a Business Combination. The cash held in escrow from the gross proceeds on the Private Placement is set aside to pay the following, in case of Business Combination:
i) payment of class A shares for which the redemption right was exercised, net of any interest, fees and taxes, ii) fixed deferred listing commission and if any, discretionary deferred listing commission (See Note 18), and iii) any remainder values will be returned to the Company.
If the Company does not consummate a Business Combination, the amounts standing on the escrow will be returned to the Company, and eventually to the holders of class A shares for the portion of the proceeds on the Private Placement, net of any interest, fees and taxes.
On 31 July 2023, the Company redeemed 8,498,329 of its own class A shares at a redemption price of EUR 10,35 per share and currently holds them as treasury shares. A payment in the amount of EUR 87,957,705 was made from the escrow account to redeeming shareholders to redeem these class A shares (Note 14).
On 9 April 2024, the Company redeemed additional 2,949,140 class A shares at a redemption price of EUR 10,35 per share and currently holds them as treasury shares. A payment in the amount of EUR 30,523,599 was made from the escrow account to redeeming shareholders to redeem these class A shares (Note 14).
The fair value of cash in escrow approximates its carrying value as at 30 June 2025 (level 3).
The amount of cash in escrow was EUR 2,992 as at 30 June 2025 (31 December 2024: EUR 4,985). As at 30 June 2025, the Group has bank overdraft of EUR 53,225 (31 December 2024: 20,465) which is presented under current liabilities.
The fair value of cash and cash equivalents (level 3) approximate its carrying value as at 30 June 2025 and 31 December 2024.
As at 31 December 2021, the subscribed share capital amounts to EUR 120,000 consisting of 12,000,000 class B shares without nominal value.
On 23 May 2022, following the extraordinary general meeting of shareholders the Company created two share classes within the class B shares and converted the existing 12,000,000 class B shares into 1,437,500 class B1 shares without nominal value ("Class B1 Shares") and 1,437,500 class B2 shares without nominal value ("Class B2 Shares").
Pursuant to the BCA and as part of the preparation for the Closing, the Sponsor agrees to proceed with the Class B2 shares redemption for no consideration by redeeming 408,333 Class B2 shares and up to an additional 550,000 Class B2 shares calculated pursuant to section 2.1.1 of the BCA. Upon and following the completion of the Business Combination, the Class B1 Shares and remaining Class B2 Shares existing at that point in time shall convert into class A shares in accordance with the conversion schedule (the "Promote Schedule" in the "Glossary" of the Prospectus).
The class B shares will only have nominal economic rights (i.e., reimbursement of their par value, at best, in case of liquidation). The class B shares were not part of the Private Placement and are not listed on a stock exchange.
On 30 May 2022, the Company issued 11,500,000 redeemable class A shares with a par value of approximately EUR 0.042 per share, together with class A warrants (together, a "Unit") for an aggregate price of EUR 10 per Unit, the nominal subscription price per class A warrant being EUR 0.01. The total proceeds on the issue of class A shares amount to EUR 111,053,218 after Private Placement costs of EUR 3,889,282. Because the class A shares are redeemable under certain conditions, the Board of Directors concluded that the class A shares do not meet the definition of an equity instrument as per IAS 32. Hence, the class A shares are considered as debt instruments (See Notes 3 and 14).
On 25 May 2022, it was resolved to raise additional funding to the Company in the form of an equity contribution in cash without the issuance of new shares (account 115 of the Luxembourg standard chart of accounts) for a total amount of EUR 700,000 in order to cover for operating expenses.
On 27 May 2022, the Management resolved to allocate EUR 600,000 from the available reserve, in accordance with the articles of association to the warrant reserve (see below).
As at 30 June 2025, the authorized capital, excluding the issued share capital, of the Company is set at EUR 6,520,002 consisting of 156,208,387 shares without nominal value.
The Company is required to allocate a minimum of 5% of its annual net profit to a legal reserve, until this reserve equals 10% of the subscribed share capital. This reserve may not be distributed.
Pursuant to Article 31 of the amended Articles of Association, the Board of Directors is required to create a specific reserve in respect of the exercise of any class A warrants or class B warrants issued by the Company (the "Warrant Reserve") and allocate and transfer sums contributed to the share premium and/or any other distributable reserve of the Company to such Warrant Reserve. The Board of Directors may, at any time, fully or partially convert amounts contributed to such Warrant Reserve to pay for the subscription price of any class A Shares to be issued further to an exercise of class A warrants or class B warrants issued by the Company. Only in case of failure by the Company to secure a Business Combination before the expiry of the Business Combination Deadline, the Warrant Reserve may be used for redemption of class A shares, in case where other available reserves are not sufficient. The Warrant Reserve is not distributable or convertible prior to the exercise, redemption or expiration of all outstanding class A warrants and class B warrants and may only be used to pay for the class A shares issued pursuant to the exercise of such class A warrants and class B warrants; thereupon, the Warrant Reserve will become a distributable reserve.
As at 30 June 2025, EUR 600,000 (31 December 2024: EUR 600,000) has been allocated to warrant reserve from other available reserve.
| Number of class B warrants |
30 June 2025 EUR |
31 December 2024 EUR |
|
|---|---|---|---|
| Sponsor Capital At-Risk | 3,243,333 | 3,693,183 | 3,693,183 |
| Additional Sponsor Subscription | 656,666 | - | 747,746 |
| Overfunding Sponsor Subscription | 2,300,000 | - | 2,619,010 |
| Total | 6,199,999 | 3,693,183 | 7,059,939 |
On 25 May 2022, the Sponsor, Co-Sponsor and the Company entered into a Sponsor Warrant Purchase Agreement. The Sponsor and the Co-Sponsor agreed, to initially subscribe to class B warrants as follows:
An amount of EUR 78,332 presented as part of Receivable from Sponsor in the consolidated statement of financial position refers to the remaining subscription price of the class B warrants. On the same date, the Sponsor transferred 1,302,000 class B warrants to the Supervisory Board Investors. In 2023, the Sponsor reacquired a total of 1,302,000 class B warrants from the Supervisory Board Investors. On 2 January 2025, the Sponsor acquired 431,250 class B1 shares and 431,250 class B2 shares from the co-sponsor for a total consideration of EUR 246,000 and 1,836,000 class B warrants from the co-sponsor for a total consideration of EUR 1,854,000.
The Sponsor Capital At-Risk is used to finance the Company's working capital requirements (including due diligence costs in connection with the Business Combination) and Private Placement and listing expenses, except for the deferred listing commission which will be paid from the escrow account. The Additional Sponsor Subscription is used to cover the negative interest on the escrow account. The Overfunding Sponsor Subscription will be used to provide additional funds to cover the liquidation of the Company after the expiry of the Business Combination Deadline or in case of redemptions of class A shares in the context of a Business Combination, for a redemption per class A share of up to (i) EUR 10.30 in case no extension has occurred, (ii) EUR 10.40 in case one extension has occurred and (iii) EUR 10.50 in case two extensions have occurred.
For any excess portion of the Additional Sponsor Subscription or Overfunding Sponsor Subscription remaining after the consummation of the Business Combination and the redemption of class A shares, the Sponsor may elect to either (i) request repayment of the remaining cash portion of the Additional Sponsor Subscription or the Overfunding Sponsor Subscription by redeeming the corresponding number of class B warrants subscribed for under the Additional Sponsor Subscription or the Overfunding Sponsor Subscription or (ii) not to request repayment and to keep the class B warrants subscribed for under the Additional Sponsor Subscription or the Overfunding Sponsor
Subscription. As at 30 June 2025, the Company determined there is no excess portion payable to the Sponsor.
Furthermore, with respect to the Additional Sponsor Subscription, if the negative interest payable under the escrow account has been reduced due to a change in the interest rate on deposits set by European Central Bank, the Sponsor may request from the escrow agent that a portion of the proceeds from the Additional Sponsor Subscription reflecting the amount by which the negative interest has been overfunded in respect of such period shall either be (i) repaid to the Sponsor against redemption of the corresponding number of class B warrants subscribed for under the Additional Sponsor Subscription or (ii) paid to the Company for working capital purposes.
Each class B warrants entitles its holder to subscribe for one class A share, with a stated exercise price of EUR 11.50.
On the issue date, the fair value of class B warrants were determined to be EUR 1.06 per warrant using a combination of Monte Carlo and Binomial Tree valuation model (level 3). The breakdown are as follows:
The above valuation resulted in the recognition of a day-one gain of EUR 2,728,000.
As at 30 June 2025, the fair value of class B warrants issued as Sponsor Capital At-Risk are determined to be EUR 1.14 per warrant or EUR 3,693,183 using a combination of Monte Carlo and Binomial Tree valuation model (level 3). While the Company determined there is no excess portion payable to the Sponsor on the Additional Sponsor Subscription and Overfunding Sponsor Subscription hence these were valued at zero.
The above valuation resulted in the recognition of fair value gain of EUR 5,606,817 for the period from the issue date to the closing date, and fair value gain of EUR 3,366,756 for the period from 1 January 2025 to 30 June 2025. The significant inputs to the valuation model include the contractual terms of the warrants (i.e. exercise price, maturity), risk-free rates of German government bonds, volatility of the Company's potential target peers and volatility of the warrants by reference to traded warrants issued by similar listed special purpose acquisition companies.
Class B warrants are identical to the class A warrants underlying the Units sold in the Private Placement, except that the class B warrants are not redeemable and may always be exercised on a cashless basis while held by the Sponsor or their Permitted Transferees (defined in the prospectus). Class B warrants are not part of the Private Placement and are not listed on a stock exchange.
Pursuant to the BCA and as part of the preparation for the Closing, the Sponsor agrees to proceed with the redemption and cancellation of all class B warrants pursuant to the Sponsor Warrant Cancellation Agreement provided in section 2.2 of the BCA.
On 30 May 2022, the Company issued 5,750,000 class A warrants (the "class A warrants") together with the class A shares (together, a "Unit") for an aggregate price of EUR 10 per Unit, the nominal subscription price per class A warrant being EUR 0.01. Hence, total proceeds in relation to the issue of the warrants amount to EUR 57,500. Class A warrants have the International Securities Identification Number ("ISIN") LU2380751656. Each class A warrant entitles its holder to subscribe for one class A share, with a stated exercise price of EUR 11.50, subject to customary anti-dilution adjustments. Holders of class A warrants can exercise the warrants on a cashless basis unless the Company elects to require exercise against payment in cash of the exercise price.
On the issue date, the fair value of class A warrants was estimated at EUR 4,082,500 (EUR 0.71 per warrant) using a combination of Monte Carlo and Binomial Tree valuation model (level 3), resulting in the recognition of a day-one loss of EUR 4,025,000.
As at 30 June 2025, the fair value of class A warrants was estimated to be EUR 4,835,175 (EUR 0.84 per warrant) using a combination of Monte Carlo and Binomial Tree valuation model (level 3), resulting in the recognition of fair value loss of EUR 4,777,675 for the period from issue date to closing date, and no fair value gain or loss for the period from 1 January 2025 to 30 June 2025. The significant inputs to the valuation model include the contractual terms of the warrants (i.e. exercise price, maturity), risk-free rates of German government bonds, volatility of the Company's potential target peers and volatility of the warrants by reference to traded warrants issued by similar listed special purpose acquisition companies.
Class A warrants may only be exercised for a whole number of class A shares. Class A warrants will become exercisable 30 days after the completion of a Business Combination. Class A warrants will expire five years from the date of the consummation of the Business Combination, or earlier upon redemption or liquidation. The Company may redeem class A warrants upon at least 30 days' notice at a redemption price of EUR 0.01 per class A warrant if (i) the closing price of its class A shares for any 20 out of the 30 consecutive trading days following the consummation of the Business combination equals or exceeds EUR 18.00 or (ii) the closing price of its class A shares for any 20 out of the 30 consecutive trading days following the consummation of the Business Combination equals or exceeds EUR 10.00 but is below EUR 18.00, adjusted for adjustments as described in the section of redemption of warrants in the prospectus. Holders of class A warrants may exercise them after the redemption notice is given.
Pursuant to the BCA and as part of the preparation for the Closing, the Company and the Sponsor agree to buyback (by way of public tender offer), all or substantially all outstanding class A warrants (except, in the case that the Cornerstone Investor makes the Subsidiary Investment, for 1,500,000 class A warrants held by the Cornerstone Investor) and subsequently cancel such class A warrants. Please also see Note 19.
On 30 May 2022, the Company issued 11,500,000 redeemable class A shares (the "class A shares") with a par value of EUR 0.0417, with ISIN code LU2380749676. The class A shares are issued together with the class A warrants (together, a "Unit") for an aggregate price of EUR 10 per Unit. Holders of class A shares are entitled to one vote for each share. On the issue date, the redeemable class A shares is measured at amortised cost valued at EUR 111,053,218, net of transaction costs amounting to EUR 3,889,282.
Transaction costs, which are incremental costs that are directly attributable to the issuance of the class A shares and its subsequent listing to the Frankfurt Stock Exchange, were deducted from its initial fair value. The transaction costs include Listing Fee (See Note 18), legal fees, audit fees, accounting and administration fees, and CSSF fees.
On 24 July 2023, the Company announced a buyback offer to all holders of class A shares offering the possibility to tender their Public Shares for a price of EUR 10.35 per share. At the closing of the period of the Buyback Offer on 28 July 2023, shareholders of the Company owning a total of 8,498,329 class A shares had accepted the Buyback Offer. The aggregate purchase price for the tendered Public Shares amounted to EUR 87,957,705.15.
On 9 April 2025, the Group additionally redeemed 2,949,140 Public Shares for a price of EUR 10.35 per share. The aggregate purchase price for the Public Shares amounted to EUR 30,523,599.
As at 30 June 2025, 52,531 of class A shares remain outstanding and 11,447,469 public shares are held by the Company as treasury shares.
As at 30 June 2025, the amortized cost carrying amount of the redeemable Class A shares amounts to EUR 543,696 calculated using the EIR method. The amortization which is presented as part of finance cost in the interim consolidated statement of comprehensive income during the 6 months ended 30 June 2023 amounts to EUR nil, as all class A shares were fully amortised till August 2023 (6 months ended 30 June 2023: EUR 2,183,834). As at 30 June 2025, the fair value of Redeemable Class A shares is estimated at EUR 543,696 which is the redemption value of the remaining class A shares (level 3).
Class A Shareholders m ay request redemption of all or a portion of their class A shares in connection with the Business Combination, subject to the conditions and procedures set forth in the Articles of Association. Class A shares will only be redeemed under the following conditions, (i) the Business Combination is approved by the general meeting of shareholders and subsequently consummated, (ii) a holder of class A shares notifies the Company of its request to redeem a portion or all of its Class A shares in writing by completing a form approved by the Board of Directors for this purpose that will be included with the convening notice for the general meeting of shareholders and such notification is received by the Company not earlier than the publication of the notice convening the general meeting of shareholders for the approval of the Business Combination and (iii) the holder of Class A shares transfers its class A shares to a trust depositary account specified by the Company and/or blocked on the account of the redeeming shareholder, (ii) and (iii) both not later than two business days prior to the date of the general meeting of shareholders convened for the purpose of approving the Business Combination.
Each class A share that is redeemed shall be redeemed in cash for a price equal to the aggregate amount on deposit in the escrow account related to the proceeds from the Private Placement of the class A shares and warrants, divided by the number of the then outstanding class A Shares, subject to (i) the availability of sufficient amounts on the escrow account and (ii) sufficient distributable profits and reserves of the Company.
Because the class A shares are redeemable under certain conditions, the Board of Directors concluded that the class A shares do not meet the definition of an equity instrument as per IAS 32. Hence, the class A shares are considered as debt instruments (See Note 3).
Trade and other payables amount to EUR 1,362,479 as at 30 June 2025 (31 December 2024: EUR 2,841,408).
Trade and other payables are related to legal and other services received by the Group. The carrying amounts of these approximate their fair value (level 3) as at 30 June 2025 and 31 December 2024.
The Group conducted no operations and currently generated no revenue. They do not have any 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 risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The Company has completed its Private Placement and listing on the Frankfurt Stock exchange. The proceeds from the Private Placement as well as the Additional Sponsor Subscription and Overfunding Sponsor Subscription is deposited in an escrow account. The amount held in the escrow account will only be released in connection with the completion of the Business Combination or the Company's liquidation. As at 30 June 2025, the Board of Directors believes that the funds available to the Group outside of the secured deposit account are sufficient to pay costs and expenses incurred by the Group prior to the completion of the Business Combination. Furthermore, the Group has financial instruments which are presented as non-current liabilities which does not impose any liquidity issues to the Group. The class B warrants related to Sponsor capital at risk and amounting to EUR 3,693,183 (31 December 2023: EUR 3,693,183) (See Note 13.1) have no redemption rights or liquidation distribution rights and will expire worthless in case of liquidation. Furthermore, the class A warrants amounting to EUR 4,835,175 (31 December 2023: EUR 4,835,175) are redeemable at the option of the Company (See Note 13.2) hence, does not pose any liquidity issues to the Group. Further, these class A warrants have no liquidation distribution rights and will expire worthless in case of liquidation.
The Board of Directors' policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. In order to meet the capital management objective described above, the Group has raised funds through a Private Placement reserved to certain qualified investors inside and outside of Germany, and had the class A shares and class A warrants issued in the context of this Private Placement admitted to listing and trading on the Frankfurt Stock Exchange. The above-mentioned financial instruments issued as part of this Private Placement represent what the entity is managing as capital, although these instruments are considered as debt instruments from an accounting standpoint.
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 financing activities, including deposits with banks and financial institutions. No specific counterparty risk is being assessed as cash and cash equivalents are mostly deposited with a P-1 (Moody's) or A-2 (S&P's) rated bank.
Parties are considered to be related if one party has the ability to control the other or exercise significant influence over the other party in making financial or operational decisions.
SMG Holding B.V. made payments on behalf of SMG Hospitality SE which are recognized as a liability third party liability.
There are no commitments with related parties as at 30 June 2025 and 31 December 2024, except those already disclosed in these interim consolidated financial statements.
Members of Management received remuneration during the periods ended 30 June 2025 and 30 June 2024 as disclosed in Note 5 under "Directors fees".
The following agreements were entered by the Company in the context of the Private Placement:
The Group has no other commitments and contingencies as at 30 June 2025 and 31 December 2024.
No events are reported after the reporting year.
On 15 February 2025, the Company signed a Business Combination Agreement ("BCA") with the Sircle Hospitality Group Ltd ("Sircle").
Due to a delay in meeting certain closing conditions of the BCA, a consummation of the Business Combination by 31 May 2025, as agreed in the BCA, has not been possible. However, Sircle has so far not expressed or indicated that it wishes to or will exercise its termination right under the BCA. Sircle confirmed in writing on 26 August 2025 that they remained "open to closing the transaction under the Business Combination Agreement (the "BCA"), subject to SMG and the Sponsor fulfilling all their obligations under the BCA, including meeting the Minimum Cash Condition (as defined in the BCA)". Sircle had previously indicated that it may seek certain modifications of the terms of the Business Combination in order to still complete the transactions. No modifications have yet been communicated and conversations on this are still ongoing.
Due to the delay in completion, the Company experienced a liquidity shortage, among others from significant costs already incurred in connection with the Business Combination, and its ongoing payment obligations in order to operate as a publicly listed company until such time that the Company and Sircle become a combined entity via the consummation of the Business Combination.
Management is of the opinion that the going concern assumption is appropriate due to the signed BCA still being intact and enforceable and both parties still being committed to consummate the Business Combination, albeit under modified conditions than currently agreed. Discussions are ongoing with the shareholder as well to improve the liquidity situation of the Company. The shareholder is exploring different refinancing possibilities to raise cash to bring the necessary funding to the Company.
Although the going concern assumption is deemed appropriate, it is clear from the above that material uncertainties exist to date regarding the Company's ability to meet all closing conditions of the BCA and hence secure the completion of the Business Combination, essential to guarantee the continuity of the Company.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.