Mi Pay : 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.

24 January 2020

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 by Mi-Pay Limited, the Company's wholly owned operating subsidiary.

On 22 November 2019, the Company announced that it was yet to receive a research and development tax credit of approximately £0.3 million in respect of its 2018 claim and that it had received correspondence from HMRC requesting further information. On 23 January 2020, the Company received further correspondence from HMRC, stating that no further information is required to be provided in respect of the claim and that no amendment is being proposed to the claim.

Whilst the response from HMRC does not constitute formal approval of the claim, it is anticipated that a formal closure notice will be received from HMRC in due course. Subject to the receipt of formal approval by HMRC, after costs associated with the claim, it is anticipated that Mi-Pay Limited would receive approximately £0.26 million from the claim.

It is not expected that any funds will be received ahead of the Company's general meeting on 27 January 2020, to approve the disposal of Mi-Pay Limited ('Disposal') and cancellation of admission of the Company's ordinary shares from trading on AIM ('Cancellation'). Any amounts receivable under the claim will be payable to Mi-Pay Limited and not Mi-Pay Group plc and the receipt of the credit does not affect the consideration receivable by Mi-Pay Group plc in respect of the Disposal, details of which were set out in the Company's circular dated 23 December 2019 (the 'Circular').

The directors of the Company do not consider the funds receivable under the claim to materially affect the Company's working capital position. Therefore, notwithstanding this further correspondence from HMRC, it remains the opinion of Seamus Keating and Ed Lascelles, being the directors that are independent for the purposes of the Disposal, that it is in the best interest of shareholders to proceed with the Disposal on the terms contemplated in the Circular and it remains the opinion of the Board that it is in the best interest of shareholders to proceed with the Cancellation. The Board intend to vote in favour of the Disposal and Cancellation resolutions at the general meeting in respect of their direct and indirect shareholdings which, in aggregate, amount to 4,373,736 ordinary shares in the Company, representing 9.56% of the issued share capital of the Company.

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